Archives: 09/2009

Obama Transparency Update II

An editorial in the New York Times the other day reminded me that it’s a good time for another look at the Obama administration’s record on transparency.

The editorial lauded a new policy of disclosure for the Secret Service’s logs of White House visits, naming the visitor, who set up the meeting, where it was held, and how long it lasted. The Times gushed: “[T]he administration is well on course to be the most open in modern times, with such earlier initiatives as the online Data.gov to allow citizen access to huge amounts of federal agency information.”

These things are good—and the White House certainly means well—but I’m a little less enthusiastic, and I think the Times set the bar at the wrong height: A ham sandwich is more transparent than recent administrations. Candidate Obama made some firm commitments about transparency that are better for gauging his performance.

Disclosure of White House visitor logs is a small step forward, but I agree with the Times that a three to four month delay in revealing visits is too long. Much of this information is computerized at the White House and could be revealed in real time or within 24 hours. Also, visits that are not revealed for security or diplomatic reasons should be noted as such so that the quantity of such visits can be tracked over time and misuse of this secrecy ferreted out.

It’s also slightly ironic to see the Times sing President Obama’s transparency praises while the White House flouts a transparency commitment made to the paper back in June. For a story called “White House Changes the Terms of a Campaign Pledge About Posting Bills Online,” White House spokesman Nick Shapiro told New York Times reporter Katherine Seelye, “[O]nce it is clear that a bill will be coming to the president’s desk, the White House will post the bill online.” It hadn’t happened yet when I wrote about it in July, and it still hasn’t happened, even though 22 more bills have passed into law since then.

Below the jump is an updated ”Sunlight Before Signing” chart, reflecting all the bills President Obama has signed to date. Still only one (of sixty-one bills) has been posted on Whitehouse.gov for five days before signing. (That’s a .016 average, baseball fans.)

The DTV Delay Act was online for five days after final passage in Congress, though not formal presentment to the president, but I’ve given him the benefit of the doubt to count it as a win.

I’ve amended the chart to highlight an interesting thing: Two-thirds of the time (41 of 61), the White House has held bills for five days or more before President Obama has signed them. The only thing keeping him from fulfilling his promise as to these bills is the simple failure to post them on Whitehouse.gov. It’s hard to understand why the White House is not taking this easy step. The “Presidential Actions” page seems like a good place for it.

On measurable commitments, we have seen weakness, but, as I say, the White House certainly means well. This was confirmed for me again last week when Cass Sunstein, the new administrator of the Office of Information and Regulatory Affairs, invited a small group of transparency advocates including myself in for a meeting. We highlighted many angles of the transparency issue to him, mine being earmarks.

During the campaign, now-President Obama said, “[W]e will put every corporate tax break and every pork barrel project online for every American to see. You will know who asked for them and you can decide whether your representative is actually representing you.”

Since then, it has been WashingtonWatch.com, not the White House, tracking and disclosing earmarks. But an OMB representative told Federal Computer Week in August that it would begin tracking and disclosing congressional earmarks from the request stage in the next budget cycle.

I passed a copy of the FCW article to Sunstein and some of the OIRA staff members who joined us at the meeting. I’m hopeful that they will follow through on this commitment. I’m looking forward to reporting tangible results to go along with the good intentions flowing from the White House!

Public Law Date Presented Date Signed Five Days? Posted (Linked)? Posted Five Days?
P.L. 111-2, The Lilly Ledbetter Fair Pay Act of 2009 1/28/2009 1/29/2009 No 1/29/2009 No
P.L. 111-3, The Children’s Health Insurance Program Reauthorization Act of 2009 2/4/2009 2/4/2009 No 2/1/2009 No
P.L. 111-4, The DTV Delay Act 2/9/2009 2/11/2009 No 2/5/2009 Yes and No
P.L. 111-5, The American Recovery and Reinvestment Act of 2009 2/16/2009 2/17/2009 No 2/13/2009 No
P.L. 111-6, Making further continuing appropriations for fiscal year 2009, and for other purposes 3/6/2009 3/6/2009 No No No
P.L. 111-7, A bill to designate the facility of the United States Postal Service located at 2105 East Cook Street in Springfield, Illinois, as the “Colonel John H. Wilson, Jr. Post Office Building” 2/26/09 3/9/2009 Yes No No
P.L. 111-8, The Omnibus Appropriations Act, 2009 3/11/2009 3/11/2009 No 3/6/2009 No
P.L. 111-9, To extend certain immigration programs 3/18/2009 3/20/2009 No No No
P.L. 111-10, To provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958, and for other purposes 3/19/2009 3/20/2009 No No No
P.L. 111-11, The Omnibus Public Land Management Act of 2009 3/30/2009 3/30/2009 No 3/30/2009 No
P.L. 111-12, The Federal Aviation Administration Extension Act of 2009 3/24/2009 3/30/2009 Yes No No
P.L. 111-13, The Generations Invigorating Volunteerism and Education Act 4/20/2009 4/21/2009 No No No
P.L. 111-14, To designate the United States courthouse under construction at 327 South Church Street, Rockford, Illinois, as the “Stanley J. Roszkowski United States Courthouse” 4/14/2009 4/23/2009 Yes No No
P.L. 111-15, The Special Inspector General for the Troubled Asset Relief Program Act of 2009 4/14/2009 4/24/2009 Yes No No
P.L. 111-16, The Statutory Time-Periods Technical Amendments Act of 2009 4/30/2009 5/7/2009 Yes No No
P.L. 111-17, A joint resolution providing for the appointment of David M. Rubenstein as a citizen regent of the Board of Regents of the Smithsonian Institution 4/28/2009 5/7/2009 Yes No No
P.L. 111-18, A bill to repeal section 10(f) of Public Law 93-531, commonly known as the “Bennett Freeze” 4/28/2009 5/8/2009 Yes No No
P.L. 111-19, The Civil Rights History Project Act of 2009 4/30/2009 5/12/2009 Yes No No
P.L. 111-20, The Protecting Incentives for the Adoption of Children with Special Needs Act of 2009 5/5/2009 5/15/2009 Yes No No
P.L. 111-21, The FERA 5/19/2009 5/20/2009 No No No
P.L. 111-22, The Helping Families Save Their Homes Act of 2009 5/20/2009 5/22/2009 No No No
P.L. 111-23, The Weapon Systems Acquisition Reform Act of 2009 5/21/2009 5/22/2009 No 5/14/2009 No
P.L. 111-24, The Credit Cardholders’ Bill of Rights Act of 2009 5/20/2009 5/22/2009 No 5/14/2009 No
P.L. 111-25, The Ronald Reagan Centennial Commission Act 5/21/2009 6/2/2009 Yes No No
P.L. 111-26, To designate the facility of the United States Postal Service located at 12877 Broad Street in Sparta, Georgia, as the “Yvonne Ingram-Ephraim Post Office Building” 6/9/2009 6/19/2009 Yes No No
P.L. 111-27, To designate the facility of the United States Postal Service located at 300 East 3rd Street in Jamestown, New York, as the “Stan Lundine Post Office Building” 6/9/2009 6/19/2009 Yes No No
P.L. 111-28, To designate the facility of the United States Postal Service located at 103 West Main Street in McLain, Mississippi, as the “Major Ed W. Freeman Post Office” 6/9/2009 6/19/2009 Yes No No
P.L. 111-29, To designate the facility of the United States Postal Service located at 3245 Latta Road in Rochester, New York, as the “Brian K. Schramm Post Office Building” 6/9/2009 6/19/2009 Yes No No
P.L. 111-30, The Antitrust Criminal Penalty Enhancement and Reform Act of 2004 Extension Act 6/19/2009 6/19/2009 No No No
P.L. 111-31, The Family Smoking Prevention and Tobacco Control Act 6/16/2009 6/22/2009 Yes No No
P.L. 111-32, The Supplemental Appropriations Act, 2009 6/19/2009 6/24/2009 Yes No No
P.L. 111-33, The Native American Heritage Day Act of 2009 6/16/2009 6/26/2009 Yes No No
P.L. 111-34, To designate the Federal building and United States courthouse located at 306 East Main Street in Elizabeth City, North Carolina, as the “J. Herbert W. Small Federal Building and United States Courthouse” 6/19/2009 6/30/2009 Yes No No
P.L. 111-35, To designate the Federal building located at 799 United Nations Plaza in New York, New York, as the “Ronald H. Brown United States Mission to the United Nations Building” 6/19/2009 6/30/2009 Yes No No
P.L. 111-36, The Webcaster Settlement Act of 2009 6/19/2009 6/30/2009 Yes No No
P.L. 111-37, The Veterans’ Compensation Cost-of-Living Adjustment Act of 2009 6/25/2009 6/30/2009 Yes No No
P.L. 111-38, A bill to provide additional personnel authorities for the Special Inspector General for Afghanistan Reconstruction 6/24/2009 6/30/2009 Yes No No
P.L. 111-39, To make technical corrections to the Higher Education Act of 1965, and for other purposes 6/26/2009 7/1/2009 Yes No No
P.L. 111-40, A bill to award a Congressional Gold Medal to the Women Airforce Service Pilots (”WASP”) 6/24/2009 7/1/2009 Yes No No
P.L. 111-41, The Korean War Veterans Recognition Act 7/27/2009 7/27/2009 No No No
P.L. 111-42, Approving the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003, and for other purposes 7/27/2009 7/28/2009 No No No
P.L. 111-43, A bill to provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958, and for other purposes 7/30/2009 7/31/2009 No No No
P.L. 111-44, The New Frontier Congressional Gold Medal Act 7/27/2009 8/7/2009 Yes No No
P.L. 111-45, To authorize the Director of the United States Patent and Trademark Office to use funds made available under the Trademark Act of 1946 for patent operations in order to avoid furloughs and reductions-in-force, and for other purposes 7/27/2009 8/7/2009 Yes No No
P.L. 111-46, To restore sums to the Highway Trust Fund, and for other purposes 8/4/2009 8/7/2009 No No No
P.L. 111-47, Making supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program 8/6/2009 8/7/2009 No No No
P.L. 111-48, The Miami Dade College Land Conveyance Act 7/31/2009 8/12/2009 Yes No No
P.L. 111-49, The Judicial Survivors Protection Act of 2009 8/3/2009 8/12/2009 Yes No No
P.L. 111-50, To designate the facility of the United States Postal Service located at 46-02 21st Street in Long Island City, New York, as the “Geraldine Ferraro Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-51, To designate the facility of the United States Postal Service located at 601 8th Street in Freedom, Pennsylvania, as the “John Scott Challis, Jr. Post Office” 8/11/2009 8/19/2009 Yes No No
P.L. 111-52, To designate the facility of the United States Postal Service located at 2351 West Atlantic Boulevard in Pompano Beach, Florida, as the “Elijah Pat Larkins Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-53, The Utah Recreational Land Exchange Act of 2009 8/11/2009 8/19/2009 Yes No No
P.L. 111-54, To designate the facility of the United States Postal Service located at 41 Purdy Avenue in Rye, New York, as the “Caroline O’Day Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-55, To designate the facility of the United States Postal Service located at 431 State Street in Ogdensburg, New York, as the “Frederic Remington Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-56, To designate the facility of the United States Postal Service located at 123 11th Avenue South in Nampa, Idaho, as the “Herbert A Littleton Postal Station” 8/11/2009 8/19/2009 Yes No No
P.L. 111-57, To designate the facility of the United States Postal Service located at 1300 Matamoros Street in Laredo, Texas, as the “Laredo Veterans Post Office” 8/11/2009 8/19/2009 Yes No No
P.L. 111-58, To designate the facility of the United States Postal Service located at 702 East University Avenue in Georgetown, Texas, as the “Kyle G. West Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-59, To designate the facility of the United States Postal Service located at 19190 Cochran Boulevard FRNT in Port Charlotte, Florida, as the “Lieutenant Commander Roy H. Boehm Post Office Building” 8/11/2009 8/19/2009 Yes No No
P.L. 111-60, To extend the deadline for commencement of construction of a hydroelectric project 8/11/2009 8/19/2009 Yes No No
P.L. 111-61, Recognizing the service, sacrifice, honor, and professionalism of the Noncommissioned Officers of the United States Army 8/11/2009 8/19/2009 Yes No No
P.L. 111-62, A joint resolution granting the consent and approval of Congress to amendments made by the State of Maryland, the Commonwealth of Virginia, and the District of Columbia to the Washington Metropolitan Area Transit Regulation Compact 8/7/2009 8/19/2009 Yes No No

Monday Links

  • The true cost of financial regulation: “A detailed anatomy of the bubble shows that many of the policies and regulations meant to reduce financial risk actually increased it.”
  • Government: “Hey, let’s start meddling in the Internet business.” A better idea: Preserve net neutrality without regulation. Here’s how.

New at Cato Unbound: Monetary Lessons from the Not-So-Great Depression

unbound

Accounting for the Great Depression and devising plans for preventing a sequel has been a major preoccupation of monetary and macroeconomics for over seventy years now. If the sometimes vitriolic infighting raging now within the economics profession is any indication, our recent recession and financial collapse may play a similar role for years to come. Did Bernanke display a virtuoso touch and keep a bad thing from becoming worse? Or did the Fed drive the economy over the edge by compounding prior errors with fresh mistakes?

Until the Milton Friedmans and Anna Schwartzes of our “great recession” emerge, try this month’s Cato Unbound for some preliminary answers. We’ve recruited a panel of top-notch money specialists to tease out some of the key monetary lessons from the present mess, and here’s a quick gloss on what they’ve said so far.

In our lead essay, Bentley University economist Scott Sumner, a specialist on the Great Depression, stands against conventional wisdom in arguing that monetary policy in the period running up to the carnage in the financial sector was disastrously contractionary. Easier money, Sumner says, might have prevented the worst. He proposes a new strategy for central bankers — targeting forecasts of nominal GDP — that might help avert future crises. Sumner warns of the political dangers of misdiagnosing the crisis: unless the record is set straight, free markets will once again take the fall for a flubbed central banking.

In his reply essay, “It’s Harder than it Looks,” James Hamilton of UCSD and the popular blog Econbrowser disagrees with some, but agrees with much of Sumner’s diagnosis, including the claim that the Fed could have done better and might have limited the damage of the financial crisis had it pushed  rates of nominal GDP growth higher than they were. But Hamilton points out that this is easier said than done and raises doubts about the practicability of Sumner’s preferred targeting strategy.

Cato senior fellow and University of Georgia economist George Selgin agrees with Sumner that “tight money was the proximate cause of the post-September 2008 recession” and that “a policy of nominal income growth targeting might have prevented the recession.” But Selgin encourages Sumner to acknowledge the role easy money played in the subprime crisis, and argues that Sumner’s favored five-percent nominal income-growth target is “unnecessarily and perhaps dangerously high.” Selgin favors a lower target and tolerance for some price deflation, a strategy he contends would be less likely to perpetuate boom-bust cycles.

In the last of this issue’s formal replies, San Jose State’s Jeffrey Rogers Hummel sees merit in much of Sumner’s account of the causes of the financial crisis, but he doubts a better rule for central bankers will keep us out of trouble in the future. Hummel contends that “only abolition of the Fed, elimination of government fiat money, and complete deregulation of banks and other financial institutions offer any long-term hope of bringing better macroeconomic stability.”

Stay tuned as our panelists  continue to hash it out in free-for-all blog chat that begins Wednesday. And if this is the sort of thing that revs your engine, don’t forget about Cato’s annual monetary policy conference coming up in November.

Nobody Considers Health Insurance Mandates a Tax? Really??

As my colleague Jeffrey Miron noted earlier today, when grilled by George Stephanopolous on whether the so-called “individual mandate” is a tax increase, Obama replied, “Nobody considers that a tax increase….You can’t just make up that language and decide that that’s called a tax increase…My critics say everything is a tax increase.”

Where do Obama’s critics get these wacky ideas?  From a bunch of nobodies, that’s who!

Princeton economist Uwe Reinhardt, quoted by Larry Summers (1987):

[Just because] the fiscal flows triggered by mandate would not flow directly through the public budgets does not detract from the measure’s status of a bona fide tax.

Economist Larry Summers, Obama’s National Economic Council chair (1989):

Economists have generally devoted little attention to mandated benefits regarding them as simply disguised tax and expenditure measures… Essentially, mandated benefits are like public programs financed by benefit taxes… [If] the mandated benefit is worthless to employees, it is just like a tax from the point of view of both employers and employees…There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers.

Columbia University economist Sherry Glied, Obama’s appointee to HHS Assistant Secretary for Planning and Evaluation, in the New England Journal of Medicine (2008):

The mandate is in many respects analogous to a tax. It requires people to make payments for something whether they want it or not. One important concern is that the government will provide insufficient funds for the subsidies intended to accompany the mandate. In that case, the mandate will act as a very regressive tax, penalizing uninsured people who genuinely cannot afford to buy coverage.

Congressional Budget Office (2009):

Under some proposals, firms would be required to make payments to the federal government if they chose not to offer health insurance to their employees, and individuals who did not comply with the requirement to  obtain insurance would have to pay a penalty. Such payments would be equivalent to a tax or a fine, and the government’s receipts should be recorded in the budget as federal revenues.

Here’s a question: if an individual mandate is not a tax, why exempt anybody?  If an employer mandate isn’t a tax, why exempt small businesses?

Trade Delivers Peace and Bargain Prices

Mad about tradeFor a fair and authoritative (and did I mention favorable?) assessment of my new Cato book, Mad about Trade: Why Main Street America Should Embrace Globalization, you can read William H. Peterson’s review in today’s Washington Times.

Dr. Peterson is an adjunct scholar with the Heritage Foundation and the Ludwig von Mises Institute who holds a Ph.D. in economics from New York City University. In his review he writes:

Daniel Griswold’s tour de force explores, reasons and documents how import competition benefits the American consumer, seeing him move ahead toward greater peace incentives, lower real prices, more choices, better quality. Mr. Griswold also tracks how the big-box retailers such as Wal-Mart, Home Depot and Best Buy deliver the world’s goods mostly by sea via millions of big, truckload-size containers. …

So Mr. Griswold would have the United States adopt or maintain trade policies best for most Americans, especially the poor and middle class, no matter what other nations do. Says the author: Let’s drop the remaining barriers separating us from ongoing growth and peace policies enhancing the global marketplace. Bully for him.

Information at the beginning of the review should have given the list price of the book as $21.95, and it is available with a nice discount at Amazon.com.

Information at the beginning of the review should have given the cover price of the book as $21.95. It is available with a nice discount at Amazon.com along with a peek inside at the table of contents and selected pages.

Eye of Neutrality, Toe of Frog

FCC Chairman Julius GenachowskiI won’t go on at too much length about FCC Chairman Julius Genachowski’s speech at Brookings announcing his intention to codify the principle of “net neutrality” in agency rules—not because I don’t have thoughts, but because I expect it would be hard to improve on my colleague Tim Lee’s definitive paper, and because there’s actually not a whole lot of novel substance in the speech.

The digest version is that the open Internet is awesome (true!) and so the FCC is going to impose a “nondiscrimination” obligation on telecom providers—though Genachowski makes sure to stress this won’t be an obstacle to letting the copyright cops sniff through your packets for potentially “unauthorized” music, or otherwise interfere with “reasonable” network management practices.

And what exactly does that mean?

Well, they’ll do their best to flesh out the definition of “reasonable,” but in general they’ll “evaluate alleged violations…on a case-by-case basis.” Insofar as any more rigid rule would probably be obsolete before the ink dried, I guess that’s somewhat reassuring, but it absolutely reeks of the sort of ad hoc “I know it when I see it” standard that leaves telecoms wondering whether some innovative practice will bring down the Wrath of Comms only after resources have been sunk into rolling it out. Apropos of which, this is the line from the talk that really jumped out at me:

This is not about protecting the Internet against imaginary dangers. We’re seeing the breaks and cracks emerge, and they threaten to change the Internet’s fundamental architecture of openness. [….] This is about preserving and maintaining something profoundly successful and ensuring that it’s not distorted or undermined. If we wait too long to preserve a free and open Internet, it will be too late.

To which I respond: Whaaaa? What we’ve actually seen are some scattered and mostly misguided  attempts by certain ISPs to choke off certain kinds of traffic, thus far largely nipped in the bud by a combination of consumer backlash and FCC brandishing of existing powers. To the extent that packet “discrimination” involves digging into the content of user communications, it may well run up against existing privacy regulations that require explicit, affirmative user consent for such monitoring. In any event, I’m prepared to believe the situation could worsen. But pace Genachowski, it’s really pretty mysterious to me why you couldn’t start talking about the wisdom—and precise character—of some further regulatory response if and when it began to look like a free and open Internet were in serious danger.

If anything, it seems to me that the reverse is true: If you foreclose in advance the possibility of cross-subsidies between content and network providers, you probably never get to see the innovations you’ve prevented, while discriminatory routing can generally be detected, and if necessary addressed, if and when it occurs.  And the worst possible time to start throwing up barriers to a range of business models, it seems to me, is exactly when we’re finally seeing the roll-out of the next-generation wireless networks that might undermine the broadband duopoly that underpins the rationale for net neutrality in the first place. In a really competitive broadband market, after all, we can expect deviations from neutrality that benefit consumers to be adopted while those that don’t are punished by the market. I’d much rather see the FCC looking at ways to increase competition than adopt regulations that amount to resigning themselves to a broadband duopoly.

Instead of giving wireline incumbents a new regulatory stick to whack new entrants with, the FCC could focus on facilitating exploitation of “white spaces” in the broadcast spectrum or experimenting with spectral commons to enable user-owned mesh networks. The most perverse consequence I can imagine here is that you end up pushing spectrum owners to cordon off bandwidth for application-specific private networks—think data and cable TV flowing over the same wires—instead of allocating capacity to the public Internet, where they can’t prioritize their own content streams.  It just seems crazy to be taking this up now rather than waiting to see how these burgeoning markets shake out.

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Learning from Trade Wars Past

David Rockefeller, the former chairman and CEO of Chase Manhattan Bank, makes a compelling historical case in today’s New York Times for pursing free trade policies. Rockefeller has been around long enough to remember the Smoot-Hawley tariff bill of 1930 and the Great Depression that followed. In an op-ed piece titled, “Present at the Trade Wars,” he writes:

I lived through the stock market crash of 1929 and the Great Depression that followed it, and I saw that there was no direct cause and effect relationship. Rather, there were specific governmental actions and equally important failures to act, often driven by political expediency, that brought on the Depression and determined its severity and longevity.

One critical mistake was America’s retreat from international trade. This not only helped to turn the 1929 stock market decline into a depression, it also chipped away at trust between nations, paving the way for World War II.

On the eve of the G-20 summit in Pittsburgh this week, Rockefeller offers a timely warning to President Obama not to repeat the mistakes of the past.