Archives: September, 2009

AFL-CIO Wants to Tax Stock Trades…to Stop Speculation

Earlier this week, the AFL-CIO, building upon a suggestion made last week in the UK, proposed that the federal government impose a 1/10 of 1 percent tax of all stock trades.  The union group argues that such a tax would reduce non-productive speculative activity in the stock market.

First of all, we have all sorts of transfer taxes on housing, and yet we still had a housing bubble.  So much for small taxes stopping speculative activity.  If an investor expected to double his money, it seems quite a stretch to believe that such a small tax would discourage him.

More importantly, our recent financial crisis was not triggered by too much equity (like stocks) but by too much debt.  In taxing stock transactions, we only add to the already favorable treatment of debt compared to equity, encouraging even greater leverage in our financial system.

The real purpose of this tax on speculation becomes apparent when the AFL-CIO suggests what the money should be used for…building new infrastructure that would require the hiring of unionized workers.  The AFL-CIO should stop hiding behind the spin of stopping speculation and directly engage in the real debate:  the massive size of our federal government and the unsustainable fiscal path we are on.

Captain Louis Renault Award: Politics in Government Schools?!*

As Neal and Andrew have already covered extensively, President Obama is set to address the nation’s school children, and the Secretary of Education has sent out marching orders to government teachers and lesson plans for the kids.

The administration has now backpedaled from a classic political gaffe and cleaned up the most offensive aspects; asking kids to write about how they can help, explain why its important to listen to political leaders, etc.

But I think a couple of points deserve repeating.

From a push for vastly expanding federal involvement in preschool and early education to home visitations in the health care bills, the government remains intent on expanding its dominion (And hot on the heels of President Bush’s massive expansion of federal involvement in schools).

But this problem didn’t begin with Obama and won’t end with him. Politics in the schools is what we get when the government runs our schools.

Don’t want your kids indoctrinated by government bureaucrats, special interests, or the President?

Private school choice is the only remedy, and education tax credits are the increasingly popular and successful way to deliver it.

When will a critical mass of the people realize that it is dangerous and destructive to allow the government to control the education of our children and finally do something about it?

* Captain Louis Renault reference

Making Enemies in Afghanistan

Yaroslav Trofimov’s article in Wednesday’s Wall Street Journal explains how Ghulam Yahya, a former anti-Taliban, Tajik miltia leader from Herat, became an insurgent. The short answer: because the American master plan in Afghanistan required the retirement of warlords. The trouble is that in much of Afghanistan “warlord” is a synonym for “local government.” Attacking local authority structures is a good way to make enemies.  So it went in Herat. Having been fired from a government post, Ghulum Yahya turned his militia against Kabul and now fires rockets at foreign troops, kidnaps their contractors, and brags of welcoming foreign jihadists.  Herat turned redder on the color-coded maps of the “Taliban” insurgency.

That story reminded me of C.J. Chivers’s close-in accounts of firefights he witnessed last spring with an army platoon in Afghanistan’s Korangal Valley. According to Chivers, the Taliban there revolted in part because the Afghan government shut down their timber business. That is an odd reason for us to fight them.

One of the perversions of the branch of technocratic idealism that we now call counterinsurgency doctrine is its hostility to local authority structures.  As articulated on TV by people like General Stanley McChrystal, counterinsurgency is a kind of one-size-fits-all endeavor. You chase off the insurgents, protect the people, and thus provide room for the central government and its foreign backers to provide services, which win the people to the government. The people then turn against the insurgency.  This makes sense, I suppose, for relatively strong central states facing insurgencies, like India, the Philippines or Colombia.  

But where the central state is dysfunctional and essentially foreign to the region being pacified, this model may not fit. Certainly it does not describe the tactic of buying off Sunni sheiks in Anbar province Iraq (a move pioneered by Saddam Hussein, not David Petraeus, by the way). It is even less applicable to the amalgam of fiefdoms labeled on our maps as Afghanistan. From what I can tell, power in much of Afghanistan is really held by headmen — warlords — who control enough men with guns to collect some protection taxes and run the local show. The western idea of government says the central state should replace these mini-states, but that only makes sense as a war strategy if their aims are contrary to ours, which is only the case if they are trying to overthrow the central government or hosting terrorists that go abroad to attack Americans. Few warlords meet those criteria. The way to “pacify” the other areas is to leave them alone. Doing otherwise stirs up needless trouble; it makes us more the revolutionary than the counter-revolutionary.

On a related note, I see John Nagl attacking George Will for not getting counterinsurgency doctrine. Insofar as Will seems to understand, unlike Nagl, that counterinsurgency doctrine is a set of best practices that allow more competent execution of foolish endeavors, this is unsurprising. More interesting is Nagl’s statement that we, the United States have not “properly resourced” the Afghan forces.  Nagl does not mention that the United States is already committed to building the Afghan security forces (which are, incidentally, not ours) to a size – roughly 450,000 – that will annually cost about 500% of Afghanistan’s budget (Rory’s Stewart’s calculation), which is another way of saying we will be paying for these forces for the foreseeable future.

It probably goes too far to say this war has become a self-licking ice-cream cone where we create both the enemy and the forces to fight them, but it’s a possibility worth considering.

Actions Speak Louder than Words, Mr. President

NRO points out that, after criticism from pundits and the blogosphere, the Obama administration has revised its suggested curriculum activities tied to his speech to schoolchildren next Tuesday. Originally, the Department of Education’s “Menu of Activities” recommended that elementary school children “write letters to themselves about what they can do to help the president.” The new guidance suggests that students should write letters about realizing their own education goals.

It’s a relief to see the administration redress the Orwellian undertone of its original curriculum guidance. But the real problem isn’t what the president or the education department have to SAY. The problem is what they are actually doing.

If the president really wants to improve academic achievement and raise graduation rates, why did he kill the federal private school choice program in Washington DC? His own education department reports that this program significantly raises students’ academic achievement, and it’s doing so at one quarter the cost of the city’s public schools. Several scientific studies also show that private schools significantly raise the high school graduation rate over the level of public schools, especially for inner-city African American students who are at a high risk of dropping out. And that holds true even when the public and private school students being compared come from similar families.

Instead of just telling kids to get good grades and stay in school, president Obama should support policies that are proven to achieve those goals. Actions speak louder than words, Mr. president.

Want to Contact Your School District? Here’s How.

Since Neal McCluskey and I weighed in on the president’s planned address to public school students this morning, we’ve been getting a whole lot of calls and e-mails from parents who aren’t too keen on the prospect. They’ve been asking us how to let their school districts know that they don’t feel comfortable with the president as “Educator in Chief.”

If you’re in the same boat, here’s how to contact your district officials and (politely, of course) voice your opinion. Go to this school district search page at the Department of Education and type in the name of your district and the state that it’s in. Click the button and it will display your district’s telephone number.

I’m sure the president would approve of helping parents to become more actively involved in their own children’s education.

Wednesday Links

  • Cato senior fellow Tom Palmer filing a lawsuit to legally carry firearms in Washington D.C.
  • Podcast: How some on the right-wing are doing everything they can to defend torture. Let’s just call them “enhanced justification techniques.”