Archives: 06/2010

Driverless Cars — You Heard It Here First

Not five months after Randal O’Toole discussed the idea of safe, efficient, driverless cars in his book Gridlock: Why We’re Stuck in Traffic and What to Do about It and in this full-page Wall Street Journal essay – but 71 years after Norman Bel Geddes first imagined the idea at the New York World’s Fair of 1939 – the Washington Post (in an article picked up from the New Scientist) and Scripps-Howard columnist Dale McFeatters (in the New York Post and elsewhere) are writing about the benefits of such advanced technology. As the Post puts it,

Yet according to Jonas Ekmark, a researcher at Volvo headquarters near Gothenburg, Sweden, this is just the start. He says we are entering an era in which vehicles will also gather real-time information about the weather and highway hazards, using this to improve fuel efficiency and make life less stressful for the driver and safer for all road users. “Our long-term goal is the collision-free traffic system,” says Ekmark.

Or as O’Toole had put it in the Wall Street Journal,

Driverless vehicles offer huge advantages over current autos. Because computer reaction times are faster, driverless cars can safely operate more closely together, potentially tripling highway throughput. This will virtually eliminate congestion and reduce the need for new road construction….

Driverless cars and trucks will be safer. They will also be greener, first by significantly reducing congestion, and eventually because vehicles will be lighter in weight due to reduced collision risks.

Stay tuned to the Cato Institute for more ahead-of-the-curve ideas.

‘Make Wall Street traders and CEOs fear for their lives, or at least for their freedom to travel.’

Recall the unionists’ siege of the Maryland banker’s home the other day? Perhaps it was inspired in part by this screed on the world financial crisis that appeared a little while back on the blog New Deal 2.0, published by the left-leaning Franklin and Eleanor Roosevelt Institute. Other advice in the same piece on how to handle execs from Goldman Sachs and similar investment banks: “Build some Guantanamo-like facility to hold these enemy financial combatants until they can be tried, convicted, and properly punished.” And: “Post the names of all managers and traders on Interpol. Arrest anyone who tries to board a plane, train, or boat; confiscate their passports; revoke their visas and work permits; and put a hold on their bank accounts until culpability can be assessed.”

Tongue in cheek-ism, evidence of a genuine impulse to dispense with the rule of law, or some of both? Well, judge for yourself, bearing in mind what sorts of rhetoric serve in accusing, say, the Tea Party movement of extremism and worse. The “braintrusters” roster of the Roosevelt Institute, incidentally, boasts such respectables as Jonathan Alter, Hendrik Hertzberg, appeals court nominee Goodwin Liu, Joseph Stiglitz and Sean Wilentz.

As part of a symposium the other day, the recently launched blog Think Tanked asked me to help define what a think tank is and what it should do. My advice on the latter was to “let ‘em rip” – the scholars and thinkers, that is – but maybe in the case of the Roosevelt Institute I’d advise making an exception.

Topics:

John Ashcroft Returns to Heritage Foundation

Dana Milbank has an article about an Ashcroft address at Heritage yesterday. 

Here’s an excerpt:

Ashcroft, in his own conciliatory gesture, implicitly acknowledged that he was on the wrong side in the Hamdi v. Rumsfeld detention case, in which the Supreme Court ruled against the Bush administration. “The Hamdi case was a bit of an anomaly because Hamdi was an American citizen, and it’s been considered settled law for a long time that American citizens always have the right in American courts to petition the court for habeas corpus,” Ashcroft allowed.

Well, yes, it was settled law right up until Bush’s lawyers launched their attack on the writ of habeas corpus.  Nowadays those lawyers play down the dangerous legal positions they advanced during their tenure.  Cheney is the exception.

Fiscal Imbalance and Global Power

Over at National Journal’s National Security Experts blog, this week’s question revolves around the health of the U.S. economy, and its relationship to U.S. power. 

The editors ask

How serious a threat is the mounting debt to the nation’s standing as the world’s only superpower? Can the U.S. continue to spend more than all other countries combined on its military forces given burdensome debt levels? In what other ways does the mounting debt undermine the country’s strategic position? […]

My response:

Our long-term fiscal imbalance, which increasingly amounts to a massive intergenerational wealth transfer, is clearly a sign of our decline. But it is a decline that has been a long time coming. (I first wrote about the insolvency of the Social Security system as a college sophomore, 23 years ago.) As such, it is tempting for people to assume that we’ll figure our way out of this mess before a complete collapse. Let’s call them, at the risk of a double negative, the declinist naysayers. And, even if they are willing to admit to the problem in the abstract, the naysayers can point to the more serious, and urgent, imbalances between pensioners and those who pay the pensions in Europe or Japan and say “At least we aren’t them.”

That is a pretty shoddy argument, but it seems to be ruling the day. We can talk about the obvious unsustainability of using taxes on current workers to pay benefits for retirees until we’re blue in the face. And my second grader can do the math on a system that was designed when workers outnumbered beneficiaries by 16.5 to 1, and in which, by 2030, that ratio will fall to 2 to 1. It simply doesn’t add up. (For more on this, much more, see my colleague Jagadeesh Gokhale’s latest.)

But this isn’t a math problem; this is a political problem. The incentive to kick the can down the road is overwhelming. The pain in attempting to deal with the problem in the here and now is, well, painful. It is hardly surprising, therefore, that members of Congress / Parliament / Bundestag / Diet, etc, have become very good at avoiding the issue altogether. And many of those who have chosen to tackle it are “spending more time with their families.”

What does all this mean for the United States’s standing as the world superpower? Less than you might think. Our difficulties in two medium-sized countries in SW/Central Asia have done more to puncture the illusion of American power than our political inability to deal with domestic problems. Our fiscal insolvency might convince other countries to play a larger role, if they genuinely feared for their safety. But other countries, especially our allies, are cutting military spending, while Uncle Sam continues to bear the weight of the world on his shoulders. In other words, our ability to maintain our global superpower status isn’t driven by our economic problems. But it is strategically stupid.

It is here that I take issue with Ron Marks’s contention that we spend less today than during the Cold War. While technically accurate, measuring military spending as a share of GDP is utterly misleading (as I’ve argued elsewhere.) If the point is to argue that we could spend more, I agree. But the measure doesn’t address whether we should do so.

We should think of military spending not as a share of the American economy, but rather relative to the threats we face. In real terms (constant current dollars), we spend today more than when we were facing down a nuclear-armed adversary with a massive army stationed in Eastern Europe and a navy that plied the seven seas from Cam Ranh Bay to Cuba. We spend more than during the height of the Vietnam or Korean Wars. Today, terrorist leaders are hunkered down in safe houses somewhere in, well, somewhere. In other words, what we spend is utterly disconnected from the threats we face, a point that is easily obscured when one focuses on military spending as a share of total output.

We spend so much today not because we are facing down one very scary adversary, but because we are facing down dozens or hundreds of small adversaries that should be confronted by others. After the Cold War ended, our strategy expanded to justify a massive military. Since 9/11, it has expanded further. Our fiscal crisis alone won’t force a reevaluation of our grand strategy. It will take sound strategic judgement, and a bit of political courage, to turn things around.

In the cover letter to his just-released National Security Strategy, President Obama acknowledged that it doesn’t make sense for any one country to attempt to police the entire planet, irrespective of the costs. Unfortunately, the document fails to outline a mechanism for transferring some of the burdens of global governance to others who benefit from a peaceful and prosperous world order. We should assume, therefore, that the U.S. military will continue to be the go-to force for cleaning up all manner of problems, and that the U.S. taxpayers will be stuck with the bill.

Prof. Krugman Is Wrong, Again

Prof. Paul Krugman asserts in his New York Times column of May 31st that “Both textbook economics and experience say that slashing spending when you’re still suffering from high unemployment is a really bad idea – not only does it deepen the slump, but it does little to improve the budget outlook, because much of what governments save by spending less they lose as a weaker economy depresses tax receipts.”

While Prof. Krugman and most other fiscalists believe this to be self-evident, it is not.  Indeed, this fiscalist dogma fails to withstand the indignity of empirical verification.  Prof. Paul Krugman’s formulation fails to mention the state of confidence.  This is an important oversight.  As Keynes himself put it: “The state of confidence, as they term it, is a matter to which practical men pay the closest and most anxious attention.”

By ignoring the confidence factor, economic theory can lead to wildly incorrect conclusions and misguided policies.  Just consider naive Keynesian fiscal theory – the type presented (as Prof. Krugman notes) in textbooks and embraced by most policymakers and the general public.  According to Keynesian theory, an expansionary fiscal policy (an increase in government spending and/or a decrease in taxes) stimulates the economy, at least for a year or two after the fiscal stimulus.  To put the brakes on the economy, Keynesians counsel a fiscal contraction.

A positive fiscal multiplier is the keystone for Keynesian fiscal theory because it is through the multiplier that changes in the budget balance are transmitted to the economy.  With a positive multiplier, there is a positive relationship between changes in the fiscal deficit and economic growth: larger deficits stimulate growth and smaller ones slow things down.

So much for theory.  What about the real world?  Suppose a country has a very large budget deficit.  As a result, market participants might be worried that a further loosening of fiscal conditions would result in more inflation, higher risk premiums and much higher interest rates.  In such a situation, the fiscal multipliers may be negative.  Fiscal expansion would then dampen economic activity and a fiscal contraction would increase economic activity.  These results would be just the opposite of those predicted by naive Keynesian fiscal theory.

The possibility of a negative fiscal multiplier rests on the central role played by confidence and expectations about the course of future policy.  If, for example, a country with a very large budget deficit and high level of debt (estimated U.S. deficit and debt levels as a percentage of GDP for 2010 are 10.3% and 63.2%, respectively) makes a credible commitment to significantly reduce the deficit, a confidence shock will ensue and the economy will boom, as inflation expectations, risk premiums and long-term interest rates decline.

There have been many cases in which negative fiscal multipliers have been observed.  The Danish fiscal squeeze of 1983-86 and the Irish stabilization of 1987-89 are notable.  The fiscal deficits that preceded the Danish and Irish fiscal squeezes were clearly unsustainable, and risk premiums and interest rates were extremely high.  Confidence shocks accompanied the fiscal squeezes, and with negative multipliers in play, the Danish and Irish economies took off.  (Evidence from the U.S. is presented in an article by Professors Jason E. Taylor and Richard K. Vedder which appears in the current May/June 2010 issue of the Cato Policy Report.)

Margaret Thatcher also made a dash for confidence and growth via a fiscal squeeze.  To restart the economy in 1981, Thatcher instituted a fierce attack on the British deficit, coupled with an expansionary monetary policy.  Her moves were immediately condemned by 364 distinguished economists.  In a letter to the Times of London, they wrote a knee-jerk Keynesian (Prof. Krugman-type) response: “Present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.”  Thatcher was quickly vindicated.  No sooner had the 364 affixed their signatures than the economy boomed.  People had confidence in Britain again, and Thatcher was able to introduce a long series of deep free-market reforms.

While Prof. Krugman’s authority is weighty, his arguments and evidence are slender.

Revise the Maryland Wiretap Law?

As I said in this piece in the Baltimore Sun, Maryland police officers are misusing that state’s wiretap law to deter anyone who would film them performing their duties. Maryland officers have asserted that any audio recording of a conversation, even in a public place, is a violation of the state’s wiretapping law and a felony punishable by five years in prison and a $10,000 fine. Officers made this claim to deter filming of an arrest at the Preakness, and when motorcyclist Anthony Graber videotaped his traffic stop.

As Radley Balko points out, the officers’ reading of the law is out of step with the language of the statute itself and Maryland rulings interpreting the scope of the law. Is it time for a revision of this law, or is it just the officers’ interpretation that is the problem? I discussed this on the Kojo Nnamdi Show with the prosecutor pressing charges against Anthony Graber, State’s Attorney Joseph Cassilly, and Graber’s lawyer, David Rocah of the Maryland ACLU.

If you ask some officers in Maryland, any recording of a conversation violates the wiretap statute. If you ask a judge, you will get an entirely different reading of the law. Even though Maryland’s wiretapping statute is considered a “unanimous consent” or “two-party consent” law, its language is different from other states put in the same category such as Massachusetts and Illinois. Where Massachusetts and Illinois have no protection for recordings of conversations outside of electronic means of communication, the first section of the Maryland wiretapping law restricts unlawful interceptions of “oral communications” to words spoken in a “private conversation.”

While the analysis for wire communications is made without regard to privacy, Maryland courts held in Fearnow v. C & P Telephone Co. that a “private conversation” is one where there is a “reasonable expectation of privacy.” Fourth Amendment jurisprudence provides plenty of guidance on where a “reasonable expectation of privacy” exists. Simply put, a traffic stop on an interstate is not a place where Anthony Graber or the officers who cited him have a reasonable expectation of privacy.

This conclusion is bolstered by the guidance given to the Montgomery County Police by the Maryland Attorney General in this 2000 advisory opinion on recording traffic stops. Since 1991, the wiretapping statute had an exemption for police dash cameras where officers could record interactions with motorists when they warned the citizen that the traffic stop would be recorded. The 2000 letter addresses the possibility that other people could show up after the receipt of consent from a motorist and potential “inadvertent interceptions.” The opinion concludes that there is little for officers to worry about, but the state legislature expanded the law enforcement exception in 2002 to address this concern anyway. In a footnote, the advisory opinion makes the point that, in any case, the motorists being pulled over have no reasonable expectation of privacy:

It is also notable that many encounters between uniformed police officers and citizens could hardly be characterized as “private conversations.” For example, any driver pulled over by a uniformed officer in a traffic stop is acutely aware that his or her statements are being made to a police officer and, indeed, that they may be repeated as evidence in a courtroom. It is difficult to characterize such a conversation as “private.”

The Attorney General’s office provided further guidance on the issue in this letter to a state legislator in 2009, advising that surreptitious recording of a meeting of the Democratic Club would probably not be a violation of the Maryland wiretapping law because statements made in this setting lack a “reasonable expectation of privacy.”

So, under the interpretation of the law supporting Anthony Graber’s prosecution, dash camera footage of Anthony Graber’s traffic stop is not a violation of the law, but Graber’s helmet-mounted footage is. The law enforcement officer, a public official performing public duties, retains a “reasonable expectation of privacy” on the side of I-95, but Anthony Graber has none. This is an assertion made contrary to the interpretation of the courts of Maryland, the Maryland Attorney General, and common sense.

This injustice could be resolved in several ways. First, as Radley suggests, the Maryland Attorney General could issue an opinion clarifying the wiretapping law with regards to recording police activity. Advisory opinions are not generally given sua sponte, so a state legislator or other official would have to request the AG’s interpretation. Second, Anthony Graber’s case may provide a rebuttal to an expansive reading of the statute by Maryland law enforcement officers. Third, the legislature could step in to deter future abuse of the statute by expressly stating that public discussions are not “private conversations.”

I discussed this on the Kojo Nnamdi Show with David Rocah and Joseph Cassilly. Rocah wants to preserve the “two-party consent” statute. The legislature, in fact, can clarify the  definition of “private conversations” without changing the consent requirement of the law with regard to electronic communications.

On the other hand, State’s Attorney Joseph Cassilly recalled occasions when citizens have come to his office with recordings of threats or extortion demands and he was required to tell them that under Maryland law (1) their recording was not admissible as evidence because it did not have the consent of the threatening or extorting party (though I see no reason that a letter with the same communication would be inadmissible); and (2) the victim of the threat or extortion committed a felony violation of the wiretapping law by making the recording in the first place. That may be the law, but it’s not justice.

In any case, the prosecution of Anthony Graber is an abuse of police power. If Maryland law enforcement officers continue to use the state’s wiretapping law to shield their activities from public view, the backlash may result in a revision of the law in its entirety.

Don’t Try This at Home, Kids

Q. What role did formal education play in the success of Chris Haney, the co-creator of the board game Trivial Pursuit, which he and Scott Abbott sold to Hasbro for $80 million?

A. Born Aug. 9, 1950, in Welland, Ontario, Mr. Haney often described himself as a beer-swilling high school dropout whose biggest mistake was quitting school at 17. “I should have done it when I was 12,” he said in interviews.