Archives: 12/2009

Palmer and Cowen on the Nature of Liberty

Two leading libertarian thinkers, Tom Palmer and Tyler Cowen, discussed Palmer’s new book, Realizing Freedom: Libertarian Theory, History, and Practice, at a recent Cato Book Forum. You can see the video or download a podcast here.

Two years ago, Cowen and Palmer were among the contributors to a Cato Unbound colloquy on the past and future of libertarianism. Cowen was interviewed for Cato’s Daily Podcast and expressed a more critical view of the concept of “negative liberties” than classical liberals typically do. A few days later, in another Daily Podcast, Palmer took on what he considers the coercive confusions of “positive liberty” and defended the necessity of “negative liberty” to a free society.

Listen to them both and buy the book.

Update: Here’s a portion of Palmer’s talk that focuses on the rule of law:

On Transparency, Talk Trumps Action

In the heady first days of the administration, President Obama issued a memorandum on transparency and open government that seemed it would set the ship of state on a course for transparency, participation, and collaboration. Many people expected that within the 120-day time-frame stated in the memo, the administration would issue the “Open Government Directive” it called for.

Well, 120 days from January 21 was May 21—and 200 days after that, we are finally going to see that open government plan. An announcement of it will be streamed live on the White House web site at 11:00 am.

It turns out that administrators didn’t fall woefully behind on President Obama’s instructions. His memorandum directed the not-yet-appointed Chief Technology Officer and others “to coordinate the development by appropriate executive departments and agencies, within 120 days, of recommendations for an Open Government Directive …” It was an instruction to coordinate on the writing of a directive, and within 120 days, people were surely coordinating.

Given the exciting campaign mantra of “change,” one could forgive people expecting the administration to set its course for good governance early. How un-change-like it is that nearly a quarter of the way through President Obama’s term (an eighth if he’s reelected), with old habits established and unlikely to be dislodged, we finally get that “open government plan.”

If only this good-government priority had been pursued as steadfastly as President Obama’s big-government priorities.

While coordinating and planning has gone on, President Obama has specifically declined to carry out an open government promise he made on the campaign trail. In fact, more than 100 times since he has been in office, he has declined to post online the bills sent him by Congress for five days of public review before he signs them. I’ll put up a new chart covering all the laws President Obama has signed sans sunlight later today.

Since I last wrote about this favorite topic, I learned of a new development, however. At some point earlier this year, the White House began posting links on Whitehouse.gov to bills that were heading its direction, a half-measure the White House told the New York Times it would take.

I failed to notice the existence of these pages, but I think it is forgivable error. There is no uniform structure to them, and there is no link I can discover on Whitehouse.gov that would bring anyone to them.

Based on my spot-checking, they haven’t been crawled by any search engine, so the only way a person could find them is by searching on Whitehouse.gov for phrases on the yet unseen pages or by searching the House or Senate bill numbers of bills that you know to look for because they have already passed into law.

This doesn’t fulfill the spirit of the Sunlight Before Signing pledge. It doesn’t give the public an opportunity to review final bills and comment before the president signs them. I doubt if a single one of the people who cheered when President Obama made his Sunlight Before Signing pledge has visited one of these pages and commented to the president as he told them they would be able to do.

There are further curiosities: The pages themselves are undated, but their “posted” dates, which appear in search results, are sometimes well beyond the date on which they became law. A Whitehouse.gov search for H.R. 2131, which became Public Law 111-70 on October 9th, shows that it was posted for comment on October 23rd.

Today the White House announces plans for dramatic steps forward on government transparency. But the steps it could have taken starting on day one remain promises unfulfilled. President Obama’s “Sunlight Before Signing” campaign pledge breaks every time he signs a bill without posting its final version at Whitehouse.gov for five days of public review before signing it.

Timber Payments and Logrolling

Since 1908, the U.S. Forest Service has paid 25 percent of its gross receipts to the states for spending on roads and schools in the counties where national forests are located. In the Pacific Northwest, receipts started to decline in the late 1980s due to lower timber sales as a result of efforts to protect the spotted owl. In 1993, Congress responded with additional “spotted owl payments” to the affected states. A 2000 law spread these payments to all national forests, but the bulk continued to go to the Pacific Northwest.

When the law was reauthorized last year, members of Congress used it as an opportunity to grab money for their states. According to the Associated Press:

The federal largesse initially focused on a handful of Western states, with Oregon alone receiving nearly $2 billion. Spending of that magnitude, though, sparked a new timber war – this one among politicians eager to get their hands on some of the logging money. A four-year renewal of the law, passed last year, authorizes an additional $1.6 billion for the program through 2011 and shifts substantial sums to states where the spotted owl never flew. While money initially was based on historic logging levels, now any state with federal forests – even those with no history of logging – is eligible for millions in Forest Service dollars. Doling out all that taxpayer money is based less on logging losses than on the powerful reality of political clout.

Democratic New Mexico Senator Jeff Bingaman bluntly admitted that the money grab was a result of good ole congressional logrolling:

Of much more important note: New Mexico’s two senators served as chairman and ranking Republican on the Senate committee that rewrote the timber payments formula. New Mexico’s increase under the new formula was 692 percent… Bingaman defended the changes. ‘Frankly we had to broaden the program in order to get the support to go ahead and do a reauthorization, and that’s exactly what we did,’ he said in an interview.

And of course, the porkfest was bipartisan:

Senate Minority Leader Mitch McConnell, R-Ky., was an early backer of the law and provided political cover for Republicans to support it… Timber harvests in Kentucky’s Daniel Boone National Forest have been modest in recent decades – ranging from $7,600 to $77,000 annually – but Clay County, Ky., which includes part of the forest, received $338,510 this year from the timber program, a 341 percent increase.

A Cato essay on the U.S. Forest Service notes that a “reform step would be to revive federalism by eliminating federal forest subsidies to the states and turning portions of the national forests over to the states. Other activities could be privatized… Some experts have proposed full privatization of the national forests.”

Such reforms would help to address the chaotic nature of current forest management through the federal political process, as illustrated by the spotted owl saga.

Copenhagen: Let the Games Begin!

25,000 bureaucrats, factota, hangers on, and representatives of various environmental organizations have just converged on Copenhagen for the UN’s latest “Conference of the Parties (COP) to its infamous 1992 climate treaty. Expect a lot of heat, not much light, and a punt right into our next election.

President Obama says that the US will agree to a “politically binding” reduction of our emissions of carbon dioxide to a mere 17% of 2005 levels by 2050. This will allow the average American the carbon dioxide emission of the average citizen in 1867. Obama’s pronouncement has stepped all over the toes of the US Senate, which really doesn’t want to vote on similar legislation this election year. Jim Webb, a democrat heretofore very loyal to the President recently wrote Obama a very tersely worded note reminding him that the power to commit the nation to such a regulation lies with the Senate, not with the Commander-in-Chief.

The UN’s own climate models show that even if every nation that has obligations under the failed Kyoto Protocol (which is supposed to be replaced by the Copenhagen Protocol) did what Obama wants, that only 7% of prospective warming would be prevented by 2100. The world’s largest emitter—China—was exempt then, and won’t agree to these reductions now.

Instead they will agree to reduce “carbon intensity”—the amount of carbon dioxide emitted per unit GDP—by 20% per decade. This is nothing but business as usual for a developing or robust economy. In fact, when President George W. Bush said that was our global warming policy, he was roundly booed. The Chinese announcement—already telegraphed, is being greeted with unmitigated praise by the same environmentalists who beat on Bush for the exact same policy. India has just announced that there is no way that they will agree to any emission reductions unless we pay them lotsa money. Obama thinks that’s a good idea, too. Polling data, anyone?

Since there’s no way that India and China will agree to large reductions, the real result of Copenhagen is that the climate can will be kicked down the road to the next COP, which begins on November 8, 2010, right down the road in Mexico City. That’s six days after our Congressional election, guaranteeing that cap-and-tax will be on the voters’ minds when they close the curtain on the current Congress.

One Thing Greenspan Got Right and Bernanke Didn’t

While both Greenspan and Bernanke merit considerable blame for helping to inflate the housing bubble, it is worth mentioning what Greenspan did get right:  bringing to the attention of Congress and the public the risk posed to our financial system from Fannie Mae and Freddie Mac.

During Bernanke’s confirmation hearing last week, Banking Committee Chairman Chris Dodd criticized the Fed for not doing enough to warn Congress on systemic risks facing the economy.  Given Dodd’s attendance record, both as Chair and before, he can perhaps be forgiven if he missed one of Greenspan’s many appearances before the Banking Committee.

To help remind us, on Feb. 24, 2004, Greenspan told the Banking Committee:

Concerns about systemic risk are appropriately focused on large, highly leveraged financial institutions such as the GSE’s…to fend off possible future system difficulties, which we assess as likely…preventive actions are required sooner rather than later.”  In Greenspanspeak, that translates to “do something now.

Again on April 6, 2005, Greenspan warned the Banking Committee:

When these institutions were small, the potential for such risk, if any, was small.  Regrettably, that is no longer the case.  From now on, limiting the potential for systemic risk will require the significant strengthening of GSE regulation.

These are just a few of Greenspan’s many warnings to Congress on the risks posed by Fannie and Freddie.  In addition, economists at the Fed published numerous studies, during Greenspan’s tenure, on the nature of Fannie and Freddie.

Sadly, upon taking over as Chair of the Federal Reserve, Ben Bernanke scaled back these efforts.  Gone was the published economic research on GSEs.  Gone was the loud voice of authority from a Fed Chairman on GSE policy.  Instead, Bernanke choose to appease the GSE’s protectors in Congress.

While the Federal Reserve does not maintain primary regulatory authority over Fannie and Freddie, the Fed has long been viewed as the most credible voice in Washington on issues of systemic risk.  When faced with the choice of protecting the Fed, or protecting the financial system, by raising the pressure on GSE reform, Bernanke punted.  How he can be trusted to find the courage to taken on the next “Fannie Mae” is beyond me.

Big Out-of-Control Government Has Had Better Days at the Supreme Court

This morning at the Supreme Court, the federal government argued for the continued existence of the Public Company Accounting Oversight Board (PCAOB, pronounced peek-a-boo) – and by extension the nefarious financial regulatory scheme known as Sarbanes-Oxley.  Cato filed a brief supporting a free market advocacy group and an accounting firm, who sued PCAOB for violating both the Appointments Clause and general constitutional separation-of-powers principles.

Passed with scant deliberation in the wake of the Enron and WorldCom scandals, the Sarbanes-Oxley Act of 2002 established PCAOB to oversee the accounting practices of the nation’s public companies.  As my piece with Cato legal associate Travis Cushman details today, PCAOB enjoys the rare authority to make its own laws, collect taxes, inspect records, prosecute infractions, make judgments, and impose sanctions.

Traditionally, independent agencies that serve such executive functions must be accountable to the president.  PCAOB members, however, may only be removed “for cause” by members of the Securities and Exchange Commission, who in turn may only be removed “for cause” by the president.  I previously blogged about the case, Free Enterprise Fund v. PCAOBhere, here, and here.

As far as how the argument went, I think the forces of limited constitutional government have eked out a 5-4 victory.  Justices Ginsburg, Breyer, and Sotomayor were extremely hostile to the challengers’ argument, while the Chief Justice and Justices Scalia and Alito were supportive.  (Scalia at one point joked that he had no less power than the president – meaning not very much – to influence PCAOB.)  Justice Stevens only spoke up once but seemed to show a leaning towards the government position.  Justice Thomas, while remaining silent, can be expected to support the view of D.C. Circuit Judge Brett Kavanaugh – whose blistering yet scholarly dissent likely prompted the Court to take up the case.

And so the ruling rests, as often happens with the most interesting cases, on the shoulders of Justice Kennedy.  I remain cautiously optimistic that Kennedy will decide to uphold constitutional checks and balances and strike down what has become an unholy new branch of government.

Two curious notes from the argument: 1. Petitioners’ counsel Michael Carvin referenced Cato’s brief in discussing PCAOB’s overreach internationally – seeking to regulate even foreign accounting standards – without oversight from the State Department or the SEC, let alone the president; 2. PCAOB brought its own lawyer to argue alongside the solicitor general, begging the question: if PCAOB is subservient to the SEC and/or the president, why does it need its own counsel to represent its own views?

All the News That’s Fit to Subsidize

Today, Politico Arena asks:

NPR v. Fox News?

My post:

Do I sense a bit of chutzpa in Politico’s report today that NPR executives have asked their top political correspondent, Mara Liasson, to reconsider her appearances on Fox News because of what the executives perceive as the network’s political bias?  The request would be impertinent if NPR itself were beyond reproach, ideologically, but “fair and balanced” it is not.  It’s a playpen for the left, subsidized by the American taxpayer, exceeded in its biases only by Pacifica Radio, another tax subsidized playpen straight out of the late ’60s.

There’s nothing wrong with a news organization tilting left or right, of course:  let the public then decide, as the Fox News numbers show the public is doing.  (And that, plainly, is what’s behind the White House efforts to marginalize the one network that’s had the audacity to criticize it systematically.)  There is something deeply wrong, however, with asking the public to subsidize that tilt.  NPR and its listeners would be screaming, and rightly so, if the taxpayers were subsidizing Fox News.  Is it any different in their case?  And please don’t say that NPR’s news is “news” – we’re all adults here.  There’s a reason conservatives, mostly, and libertarians want to reduce the reach of government.  It’s because so much of life – from news to education, religion, health care, the arts, and so much more – is fraught with values about which reasonable people can have reasonable differences.   For that, there is only one answer: freedom, including freedom, as Jefferson put it, from having to subsidize views one finds abhorrent.