Archives: 07/2009

America Suffers When Washington Wins

The Washington Post has a “feel-good” story about how the huge expansion in the federal government has created a relatively strong job market in the D.C. area.

The story mentions that the federal workforce will expand by another 200,000 during the Obama years. Yet at no point does the author bother to mention (or perhaps even understand) that all these new bureaucrats are financed by draining resources from the productive sector of the economy.

A sample:

They came in droves wearing dark suits and carrying résumés yesterday — some lined up for a block in the hot sun waiting for the doors to open — to the only employer in this dismal economy hiring by the thousands: the federal government.
More than 6,000 people jammed into the National Building Museum in Washington to apply for openings at 75 agencies, including the departments of Treasury, Homeland Security, Justice, Veterans Affairs and Energy. 

[I]n the government, added [an applicant from] Silver Spring, “you get stability, you get great benefits and [an opportunity] to move up and progress in your job.” The federal government represents about one-third of the Washington region’s $401 billion economy. Some analysts said they think the ramp-up in federal hiring and spending will help the area emerge from the recession before most other metropolitan regions. From May 2008 to May 2009, the region lost 55,000 jobs. But during that same period, nearly 20,000 jobs were created, mainly in the federal government and federal contracting sector. 

…The Partnership for Public Service, a nonprofit that sponsored the job fair and is surveying federal agencies to determine their staffing needs, estimates that the government will hire about 600,000 people over the next four years, as many as 120,000 of whom would work in the Washington region. The federal workforce, currently at 1.9 million, is expected to grow to about 2.1 million during the Obama administration, according to the Partnership for Public Service. That is comparable to the staffing level during the Johnson administration’s Great Society programs of the 1960s.

Regulation Cures Cancer

That’s the implicit message of an advocacy campaign the American Cancer Society’s “Cancer Action Network” is running in the Washington, D.C. Metro’s Capitol South station.

Large placards showing pictures of people people who are “NOW” healthy but will “LATER” be stricken with cancer give Capitol Hill staffers commuting in to work a clear message: Do something — anything. It’s part of the otherworldly bubble that lobbyists and advocacy groups press around staff and members of Congress.

The message they need — perhaps a little too complex for the subway — is that Congress has Münchausen syndrome by proxy with respect to the health care system.

Obama’s Audacious NAACP Speech

President Obama’s audacious — some might say condescending — speech to the NAACP yesterday leaves me cold. What’s most chilling is the speech comes from a person who opposes helping poor parents assume the most important responsibility of all, choosing the best school for their child.

From the president:

To parents, we can’t tell our kids to do well in school and fail to support them when they get home. For our kids to excel, we must accept our own responsibilities. That means putting away the Xbox and putting our kids to bed at a reasonable hour. It means attending those parent-teacher conferences, reading to our kids, and helping them with their homework…

It also means pushing our kids to set their sights higher. They might think they’ve got a pretty good jump shot or a pretty good flow, but our kids can’t all aspire to be the next LeBron or Lil Wayne. I want them aspiring to be scientists and engineers, doctors and teachers, not just ballers and rappers. I want them aspiring to be a Supreme Court Justice. I want them aspiring to be President of the United States.

This, from the man who supports killing the DC voucher program, the ONLY education reform empirically proven to work through multiple random-assignment studies. These are thousands of young lives we are talking about.

This, from a man who sends his daughters to one of the most expensive private schools in the country, rather than the miserably failing and unsafe schools in their backyard.

Make no mistake, President Obama knows exactly what he’s doing and what his action and inaction means:

So, I know what can happen to a child who doesn’t have that chance. But I also know what can happen to a child who does. I was raised by a single mother. I don’t come from a lot of wealth. I got into my share of trouble as a kid. My life could easily have taken a turn for the worse. But that mother of mine gave me love; she pushed me, and cared about my education; she took no lip and taught me right from wrong. Because of her, I had a chance to make the most of my abilities. I had the chance to make the most of my opportunities. I had the chance to make the most of life.

Yes, Mr. President, and you received a scholarship to attend that wonderful school. That scholarship helped you to become president. It would be nice if you supported funding the same kinds of opportunities for other children in need.

PASS ID and National ID - Rejoinder to Schwartz

Ari Schwartz responded in characteristic even tones to my critique of his testimony in favor of the PASS ID Act, which would revive the moribund REAL ID law. It’s worth a rejoinder, and I’ll offer him the same again here if he wishes.

Ari clouds matters slightly by suggesting that my “strong biases” obscure certain facts. I readily admit having a strong bias in favor of liberty – it’s why I do what I do. Ari admits several biases, including one in favor of consensus-building, which was what I accused him of prioritizing over principle. Let’s put aside the question of bias.

It’s good to see Ari state that CDT does not support a national ID system. It would be better to see him state that CDT opposes having a national ID system. (I imagine this is just a matter of word choice, but it would be good to have clarity.)

Next, Ari says his testimony “makes it clear that we believe that PASS ID prevents the creation of a National ID system.” I don’t believe this is clear from his testimony. More importantly, this is not a sound assessment of what a national ID is or what PASS ID does.

We need some defined terms, so let’s tease out what he means by “national ID.” (He has told me that there is some distinction between a “national ID,” a “national ID system,” and perhaps a “national ID card,” but the distinction is lost on me. I believe a national ID card is part of a national ID system, both of which are commonly referred to in shorthand as a “national ID.”)

Twice in his testimony, he correctly calls REAL ID a national ID system. The factors that make it so appear to be “the very real possibility that individuals would not be able to function in American society without a REAL ID card” and “giving unfettered discretion to DHS to expand the ‘official purposes’ for which REAL ID cards could be required.”

In my recent post on the subject, I defined a national ID as being a card: 1) nationally uniform in its key elements; 2) the possession of which is either practically or legally required; and 3) that is used for identification.

I think 1) and 3) are both given. Ari’s take on 2) - inability to function without it – and my formulation – practically required – are equivalent, so Ari and I agree on that much.

But is DHS discretion to expand “official purposes” an essential element of a national ID card? I don’t think so.

Let’s say Congress passes a law requiring employers to check a certain card before they hire new workers. What if Congress requires credit issuers to check the card? States require presentation of the card at the voting booth? What if Congress requires pharmacists to check it before selling people cold medicine?

Is this card system saved from being a “national ID system” because someone other than DHS came up with these ideas? Of course not. DHS discretion to expand usage is not what makes an ID system a “national ID system.”

The better definition is what we agree on: A national ID is national, identifying, and practically or legally required, meaning the lack of it disables people from functioning in society.

Do REAL ID and PASS ID differ in ways that make the one a national ID and the other not a national ID? No, and Ari doesn’t say so. He merely says PASS ID would slow national ID mission creep by some margin because it denies DHS some discretion. (PASS ID “[r]emoves from DHS’s authority the ability to unilaterally determine new official purposes for which a PASS ID-compliant card can be required … .”)

This is not central to “national ID-ness,” and PASS ID doesn’t actually deny DHS that authority – it simply removes the specific grant of authority in REAL ID. Removing a grant of authority in one law does not deny an agency authority it has elsewhere. (It’s like the difference between “not supporting” and “opposing” something.) DHS and other agencies almost certainly have power under other law to require the IDs they choose for functions that are plausibly related to security or fraud prevention.

I was wrong to assume that it was lack of principle driving CDT and Ari to endorse the PASS ID Act, which revives our moribund national ID law. Other explanations are no more palatable, though, and no other group that I am aware of missed the true import of PASS ID.

Here’s a memorable Bruce Schneier quote to emphasize the importance of opposing a national ID, which so many civil liberties groups are doing:

History will record what we, here in the early decades of the information age, did to foster freedom, liberty and democracy. Did we build information technologies that protected people’s freedoms even during times when society tried to subvert them? Or did we build technologies that could easily be modified to watch and control? It’s bad civic hygiene to build an infrastructure that can be used to facilitate a police state.

No civil liberties group supports PASS ID. CDT can’t claim that mantle while it does.

What Fed Independence?

More than 250 economists have signed an “Open Letter to Congress and the Executive Branch” calling upon them to “defend the independence of the Federal Reserve System as a foundation of U.S. economic stability.”

Allan Meltzer is not a signatory to the petition and he has explained why not.  The Fed has frequently not shown independence in the past, and there is no reason to expect it to do so reliably in the future.  Professor Meltzer has just completed a multi-volume history of the Fed and knows all-too-well of the Fed’s willingness to accommodate the policies of administrations from FDRs to Lyndon Johnson’s. 

I would add that the Fed’s behavior under Chairman Bernanke breaks new ground in aligning the central bank’s policy with Treasury’s.  Much of what the Fed has done, first under Bush/Paulson, and now under Obama/Geithner, involves credit allocation.  Since that ultimately involves the provision of public money for private purpose, it is pre-eminently fiscal policy.  Central bank independence is a fuzzy concept.  If it means anything, however, it is that monetary policy is conducted independently of Treasury’s fiscal policy.

In short, it is not the critics of the Fed who threaten its independence, but the Fed’s own actions.  Its intervention in the economy is unprecedented in size and scope. It is inevitable that those actions would lead to calls for further Congressional oversight and control.  The Fed is a creature of Congress and ultimately answerable to that body. 

The petition raises legitimate concerns about whether the Fed will be able to tighten monetary policy when the time comes, and exit from its interventions in credit markets.  But it is precisely the Fed’s own recent actions that raise those problems.  Critics of recent Fed policy actions have for some time complained that the Fed has no exit strategy.  Apparently the critics are now going to be blamed for the Fed’s inability to extricate itself from its interventions.

Cross-posted at ThinkMarkets

Slight Correction to My DC Per Pupil Spending Figure

In my IBD piece today I gave total per pupil spending in DC as $29,000 per pupil. That was based on an official k-12 audited enrollment count of 44,681, which I was told by a district official included the special needs students placed by the district in private schools. It turns out this was not the case, so we have to add in the special needs students to arrive at the total enrollment figure. Unfortunately, I wasn’t able to get that enrollment correction into the IBD in time for publication. Its impact on per pupil spending is not large, however.

The grand total audited enrollment was 48,353 students. From that we have to subtract 997 students in adult education programs and 1,498 students in preschool programs who are not covered by my k-12 budget calculations. That leaves us with a k-12 audited enrollment of 45,858. Dividing that in to the District of Columbia’s $1.3 billion k-12 education budget yields a per pupil spending figure of about $28,000.