Archives: July, 2009

Our Tax Dollars Are Being Used to Lobby for More Government Handouts

The First Amendment guarantees our freedom to petition the government, which is one of the reasons why the statists who wants to restrict or even ban lobbying hopefully will not succeed. But that does not mean all lobbying is created equal. If a bunch of small business owners get together to lobby against higher taxes, that is a noble endeavor. If the same group of people get together and lobby for special handouts, by contrast, they are being despicable. And if they get a bailout from the government and use that money to mooch for more handouts, they deserve a reserved seat in a very hot place.

This is not just a hypothetical exercise. The Hill reports on the combined $20 million lobbying budget of some of the companies that stuck their snouts in the public trough:

Auto companies and eight of the country’s biggest banks that received tens of billions of dollars in federal bailout money spent more than $20 million on lobbying Washington lawmakers in the first half of this year. General Motors, Chrysler and GMAC, the finance arm of GM, cut back significantly on lobbying expenses in the period, spending about one-third less in total than they had in the first half of 2008. But the eight banks, the earliest recipients of billions of dollars from the federal government, continued to rely heavily on their Washington lobbying arms, spending more than $12.4 million in the first half of 2009. That is slightly more than they spent during the same period a year ago, according to a review of congressional records.

…big banks traditionally are among the most active Washington lobbying interests in the financial industry, and the recession has done little to dent their spending. …Since last fall, companies receiving government funds have argued that none of the taxpayer money they were receiving was being spent on lobbying.

…American International Group, the insurance firm crippled by trades in financial derivatives that received roughly $180 billion in bailout commitments, closed its Washington lobbying shop earlier this year. AIG continues to spend money on counsel to answer requests for information from the federal government, but the firm said it does not lobby on federal legislation.

The most absurd part of the story was the companies claiming that they did not use tax dollar for lobbying. I guess the corporate bureaucrats skipped the classes where their teachers explained that money is fungible.

The best part of the story was learning that AIG closed its lobbying operation, though that does not mean much since AIG basically now exists as a subsidiary of the federal government. The most important message (which is absent from the story, of course) is that the real problem is that government is too big and that it intervenes in private markets. Companies would not need to lobby if government left them alone and/or did not offer them special favors. Indeed, that was the key point of my video entitled, “Want Less Corruption: Shrink the Size of Government.”

Does Watching Whales Make You a Better Teacher?

whale_watchingYears ago, talking with a public school teacher friend of mine at the end of the school year, she told me how excited she was about her impending orca whale watching outings in the San Juan Islands. Not only would it be a blast, but it would count as a continuing education credit (toward a master’s of education degree, as I recall) that would boost her salary substantially.

Normally, I bite my tongue in such situations. But before I could stop myself I blurted out the question: “Is watching whales going to make you a better teacher?”

The lack of any relationship between education master’s degrees and student achievement is acknowledged in a recent study from the Center for American Progress by Marguerite Roza and Raegen Miller.  In fact, Roza and Miller find that states waste $8.6 billion every year paying for master’s degrees that do nothing to improve student performance. Ironically, the state that offers the highest wage bump to teachers who obtain an M. Ed. ($10,777) is my home state of Washington.

Watching whales may not do much for your students, but it does wonders for your pocketbook. (HT: Joanne Jacobs)

Cato Institute to Launch Ad Campaign Against Government-Run Health Care

The Cato Institute will launch an ad campaign Thursday highlighting under-reported poll data showing Americans’ concerns that current health care reform plans will raise costs, limit choice and reduce the quality of their health care.

The campaign will feature full-page ads in major national newspapers, in addition to radio spots focusing on why government-run health care cannot address the problems of growing costs and lack of coverage for many individuals and families. The campaign will expand in the weeks ahead.

“Our goal is to help the American public navigate terms like ‘a public plan’ and ‘individual or employer mandates’ to understand what is really happening here,” said Ed Crane, founder and president of the Cato Institute. “The bottom line is, most of the plans coming from the White House and congressional leadership will result in a government-run health care system that is really not the best option for most Americans.”

A poll by the Washington Post and ABC News conducted June 18-21 showed that 84 percent of respondents were “very” or “somewhat” concerned that “current efforts to reform the health care system” would increase their health care costs. The survey also showed that 79 percent of respondents were concerned that current efforts would limit their choices of doctors or medical treatments.

As part of the campaign, Cato is running radio ads in major cities across the country. You can listen to them below, and embed them on your own blog using the code on the official campaign site.

Who Pays?

Download the MP3

Who Decides?

Download the MP3

Cato has also created a new website, Healthcare.cato.org, to promote more free market-oriented health care reform proposals.

My Question for the President

President Obama will hold a press conference tonight to answer questions about his health care reform proposal. This is what I would ask him:

Mr. President, during your campaign, you said, “I can make a firm pledge…Under my plan, no family making less than $250,000 a year will see any form of tax increase.”  You also said that “no one will pay higher tax rates than they paid in the 1990s.”

Your National Economic Council chairman, Larry Summers, has written that employer mandates “are like public programs financed by benefit taxes.”  Under the House health reform bill, an uninsured worker earning $50,000 per year, with no offer of coverage from her employer, would face a 15.3-percent federal payroll tax, a 25-percent federal marginal income tax rate, an 8-percent reduction in her wages (to pay the employer penalty), plus a 2.5 percent uninsured tax.  In total, her effective marginal federal tax rate would reach 50.8 percent.

Do you stand by those pledges, and would you therefore veto any employer mandate or individual mandate as a tax on the middle class?

(Add it to the questions I posed here and here.)

Sotomayor Doesn’t Deserve a Supreme Court Seat

Having sat through the entire gavel-to-gavel coverage of last week’s confirmation hearings, I still don’t know if I would vote to confirm Sonia Sotomayor if I were a senator, I really don’t. Deciding how to vote on this is more than a simple matter of deciding whether she is “qualified” to sit on the Supreme Court—which is hard enough given there is no fixed qualification standard.

It also has to include how much deference you want to give the president, in general terms but also taking into account that Sotomayor will likely be confirmed and you want to position yourself politically for the next nominee. And it has to include, of course, how your constituents feel; while it’s cowardly to follow opinion polls blindly, you are accountable to those who sent you to Washington. There are many other considerations, both political and legal.

But I’m not a senator—or even a senator’s aide—so I don’t have to make that decision. As a constitutional lawyer, however, I can say that—even as most of Sotomayor’s opinions are uncontroversial—it is impossible to overlook the short thrift the judge gave to the judicial process in Ricci v. DeStefano and Didden v. Port Chester. I am similarly hard-pressed to accept hearing-seat conversions that contradict over 15 years of speeches and articles: most notably against the idea that judges’ ethnic backgrounds—and even “physiological differences”—should affect their rulings.

Given Sotomayor’s repeated past rejection of the idea that law is or should be objective, stable, or discernible from written text, her inability during her testimony to explain her judicial philosophy—or even state her position on important cases and issues beyond an acceptance of precedent (by which she would no longer be bound in her new role)—leaves me with an abiding concern about the damage she could do to the rule of law in this country. Because of the nominee’s evasion, obfuscation, and doubletalk, I like her less now than I did before the hearings.

And so, on second thought, I do know how I would vote. During John Roberts’s confirmation hearings, Sen. Dick Durbin said that “no one has a right to sit on the Supreme Court” and that the “burden of proof for a Supreme Court justice is on the nominee.” I will follow this very apt “burden of proof” paradigm and respect the logic of Sen. Arlen Specter, the Republican-turned-Democrat former judiciary committee chairman who at President Clinton’s impeachment trial curiously evoked Scottish law to vote “not proven.” Given the impropriety of citing foreign law (another issue on which the nominee failed to explain her “conversion” in hearing testimony), I would vote that the case for confirming Sonia Sotomayor to the Supreme Court is “not proven”—under American law.

The Difference between the Health Care Systems in Canada and the U.S.

Sally C. Pipes understands Canadian health care. As the former assistant director of the free-market Fraser Institute, she lived under Canada’s national health care system and has researched it extensively.

The Canadian experience with national health care has produced waiting lines, rationed care and has not produced the preventive and patient-focused care that it has promised, says Pipes, who is now president of the Pacific Research Institute and author of the new book, The Top Ten Myths of American Health Care.

She spoke at the Cato Institute July 15, 2009.

For market-based solutions to health care reform, visit Healthcare.Cato.org.

Senate Votes to End Production of F-22 Raptor

As I have written previously, President Obama and the members of Congress who voted to kill funding for the F-22 did the right thing.

The Washington Post reports:

The Senate voted Tuesday to kill the nation’s premier fighter-jet program, embracing by a 58 to 40 margin the argument of President Obama and his top military advisers that more F-22s are not needed for the nation’s defense and would be a costly drag on the Pentagon’s budget in an era of small wars and counterinsurgency efforts.

While this vote marks a step in the right direction, the fight isn’t over. The F-22’s supporters in the House inserted additional monies in the defense authorization bill, and the differences will need to be reconciled in conference. But the vote for the Levin-McCain amendment signals that Congress will take seriously President Obama and Secretary Gates’ intent to bring some measure of rationality to defense budgeting.

The Raptor’s whopping price tag— nearly $350 million per aircraft counting costs over the life of the program— and its poor air-to-ground capabilities always undermined the case for building more than the 187 already programmed.

In the past week, Congress has learned more about the F-22’s poor maintenance record, which has driven the operating costs well above those of any comparable fighter. And, of course, the plane hasn’t seen action over either Iraq or Afghanistan, and likely never will.

Beyond the F-22 and the Joint Strike Fighter, we need a renewed emphasis in military procurement on cost containment. This can only occur within an environment of shrinking defense budgets. Defense contractors who are best able to meet stringent cost and quality standards will win the privilege of providing our military with the necessary tools, but at far less expense to the taxpayers. And those who cannot will have to find other business.