Archives: October, 2010

Hooray for Fordham — Oooh, Wait

On many, many occasions I have taken the Fordham Institute to task for its big-government conservatism. Well, for about 90 percent of my time reading the latest from Fordham president Chester Finn, I was preparing to celebrate a conversion story of timeless proportions. It seemed Finn had finally gotten it, as he railed against the myriad failures of Washington and the foolishness of looking to government to solve our problems. I thought Finn had finally grasped that life and society are far too complicated for any puppet master of group or puppet masters to micromanage. I thought, at last, he’d fully appreciated the huge problem of concentrated benefits and diffuse costs, which give special interests so much power. I thought maybe he’d read that copy of Government Failure: A Primer in Public Choice  I’d sent to Fordham VP Michael Petrilli a few years ago.

And then I read Finn’s concluding paragraphs:

Even modest-seeming promises don’t get kept. Arne Duncan sensibly wants us to focus on turning around the lowest-performing 5 percent of U.S. schools. Seems far more doable than NCLB’s labeling more than half our schools as needing surgery. Yet who really believes that the Education Department’s program of School Improvement Grants will yield this result? Nobody from Washington is flying out to turn around individual schools—as if any of them knew how—yet practically nobody outside the Beltway has a clue how to do it, either. Another dashed hope and unkept promise? Another issue for the Tea Party? Part of the reason for the (idiotic) calls to eliminate the Education Department altogether?

Government, in short, finds it difficult to fulfill its current responsibilities, coordinate its various parts, and honor its core obligations, many of which are vital just to keep us healthy, safe, and alive. How many more things should it try to do? Are not more promises by government a formula for failure and disappointment? A boost to libertarians who would have government cease and desist from just about everything? What if we just settled for scrambled eggs that don’t make us ill?

So let me get this straight: In light of constant, failed, bankrupting federal overreaching. In light of seemingly non-stop federal power-grabbing. In light of the Constitution’s very clear limits on federal authority that proscribe federal meddling in education – but, as most libertarians will tell you, rightly empower Washington to do some things – it is libertarians whom Finn implies are a bit crazy, and it is calling for elimination of the Department of Education that he concludes is “idiotic”?

Unfortunately – and amazingly – you read that right.

Good Time to End Farm Subsidies

The Wall Street Journal reports that the agricultural sector is recovering nicely from the recent recession while the rest of the private sector continues to struggle. The counter-cyclical nature of some farm subsidy programs means that the taxpayer bill for the year could be cut in half to only about $12 billion.

From the article:

For many crops, prices are climbing even as big harvests pile up, a rare combination. Farmland values are up while those for some other kinds of real estate languish. Debt on the farm is manageable. Incomes are rising.

And trade, of which many Americans are growing wary, is for agriculture a boon. Asia’s economic vigor and appetites make the farm sector’s reliance on exports—once thought a vulnerability in some quarters—a plus today.

“The farm economy is coming out of the recession far faster than the general economy,” said Don Carson, a senior analyst.

The WSJ article also notes that farmers will still receive direct payments of about $5 billion for basically just being farmers. This subsidy is particularly insulting to taxpayers as the program was created in 1996 to help wean farmers off of subsidies. Instead, these “temporary” payments were turned into a permanent hand-out in 2002.

Better news for taxpayers would be the abolition of farm subsidies. While they obviously remain popular with the beneficiaries and their patrons in Washington, the general public seems to be increasingly aware that the subsidies amount to little more than legalized theft.

Of course, farm subsidy apologists will respond that the programs must be kept in place in order to cushion farm incomes when times aren’t so good. As a Cato essay on farm subsidies points out, this is nonsense:

Another point to consider is that farm households are much more diversified today and better able to deal with market fluctuations. Many farm households these days earn the bulk of their income from nonfarm sources, which creates financial stability. USDA figures show that only 38 percent of farm households consider farming their primary occupation.

Some USDA programs provide useful commercial services such as insurance. The USDA says that its insurance services are “market-based,” but if that were true, there would be no need for subsidies and the services ought to be privatized. After all, most U.S. industries pay for their own commercial services. Also, financial markets offer a wide range of tools, such as hedging and forward contracting, which can help farmers survive cycles in markets without government subsidies.

Obamacare Suffers Another Legal Blow

Yes, Speaker Pelosi, the constitutional concerns people have with the health care legislation you rammed through Congress despite overwhelmingly negative public opinion are serious. The Florida court’s ruling, denying the government’s motion to dismiss the challenge to the new health care law brought by 20 states and the National Federation of Independent Business, mirrors the one we saw in July in Virginia’s separate lawsuit. These have been the most thoroughly briefed and argued lawsuits, so these significant and lengthy opinions conclusively establish that the constitutional concerns raised by the individual mandate and other provisions are serious. Nobody can ever again suggest with a straight face that the legal claims are frivolous or mere political gamesmanship.

And that should come as no surprise to those who have been following the litigation because the new law is unprecedented – quite literally, without legal precedent – both in its regulatory scope and its expansion of federal authority. Never before have courts had to consider such a breathtaking assertion of raw federal power – not even during the height of the New Deal. “While the novel and unprecedented nature of the individual mandate does not automatically render it unconstitutional,” Judge Vinson observed, “there is perhaps a presumption that it is.”

This means at the very least that “the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.”

Just so – and the deliberate consideration that these district courts are giving to these serious constitutional arguments (unlike the Michigan judge’s perfunctory treatment last week) indicates that the probability that the Supreme Court will ultimately strike down the individual mandate continues to increase.

“… this only applies to big business …”

The union- and trial-lawyer-backed Paycheck Fairness Act, which would greatly expand the scope of lawsuits against private employers alleging gender pay inequality, has run into considerable resistance in Congress. The Bangor Daily News, for example, notes that middle-of-the-road Maine Sens. Olympia Snowe and Susan Collins, known for their willingness to support some Democratic initiatives, have criticized the PFA as “broad,” “unprecedented,” and costly to employers (Snowe) and as likely to “impose excessive litigation on the small-business community” (Collins).

Democratic Rep. Chellie Pingree (D-Maine), on the other hand, is impatient with all such objections:

“If there is litigation in the future, that is minor compared to making sure that people get fair pay for the work that they do,” Pingree said. “It is also important to say that this only applies to big business, this does not apply to the sandwich shop around the corner.”

What do you think she means by “only applies to big business” and not “the sandwich shop around the corner”? Keith Smith at ShopFloor checked out the language of the bill, which by its own terms would affect employers subject to the federal Fair Labor Standards Act of 1938. Does the FLSA apply “only … to big business”? No; according to the U.S. Department of Labor, it covers “almost every employee working in the United States.” To begin with, the law covers all employers that have two or more employees and do at least $500,000 a year in business. But that’s just the start, as Smith explains:

Even if a business meets these thresholds, the only employees who would not be covered by the FLSA would be the ones who do not produce goods for interstate commerce, or closely-related process or occupation directly essential to such production, who are not involved in domestic service and are not engaged in interstate commerce. So that means if an employee makes a phone call to another state, sends mail to another state, travels to other states or even processes credit card transaction [he or she] is engaged in “interstate commerce”.

It sounds as if Rep. Pingree has a distinctive, not to say eccentric, understanding of what constitutes “only … big business”.

Advocates of Regulation Are to Charlie Brown as Washington, D.C., Is to Lucy

This morning on WNYC in New York City, I debated Josh Silver of the pro-Internet-regulation group Free Press. It was a healthy exchange of views, except for a few barbs and innuendos thrown by Silver, who is obviously frustrated by his group’s lack of progress in seeking a “government takeover of the Internet.” (He wanted to debate in simple, ideological terms like that, so I indulge here.)

What was most interesting to me was how unsophisticated Silver is with respect to government and regulation. Take a look at his plea:

What we’re asking for—what we need are regulatory agencies that are not captured by industry and that actually act on behalf of the American public. And that’s what they were created to do. The FCC—1934, with the advent of radio—was created to make sure that the public interest was protected. And what we’ve seen is industry capture of regulatory agencies has made those agencies fail again and again and again.

And the only thing that’s gonna work is if the Obama administration and the FCC stand up and say, “No more business as usual. We are going to protect net neutrality. We’re going to protect competition, and make sure there’s choices for consumers. And we’re going to end the status quo in Washington that has really broken our entire political system.”

The Obama administration and the FCC did stand up and say “no more business as usual,” but that’s what politicians do to seduce voters. Then, once in power, they go about business as usual. Lucy always yanks away the football, Charlie Brown.

Silver is not alone in having these sweet, sad “good government” sentiments. Many of my interlocutors, with whom I often share outcome goals, believe strongly in achieving those goals by remaking governmental and political systems so that they finally “work.” They believe so strongly in this approach that they seem to think it’s just around the corner—if only we prohibit some speech here, some petitioning of the government there. Y’know, “take the money out of politics.”

Hopefully this fantasy will never come true, because it requires reversing fundamental rights such as free speech in all its instantiations—a handover of power from people to the government and elites that run it.

In the absence of that perfected, all-powerful government—thank heavens—we must organize the society’s resources using the best machine we’ve got for discovering consumers’ interests and delivering on them: an unhampered marketplace, now energized and enhanced by the Internet.

How Herbert Hoover Didn’t End the Depression

Joshua Green writes in the Atlantic, after discussing the Austrian economists’ views in 1929 on what to do about the not-yet-great depression:

Herbert Hoover’s Treasury secretary, Andrew Mellon, offered similar counsel, famously urging Hoover to “liquidate” and “purge the rottenness out of the system.” But this failed to stop the catastrophe.

That’s true. And you know, here’s a general rule: Absolutely nothing that a treasury secretary says to a president will affect the real economy if the president ignores his advice and does something else.

Hoover didn’t cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal. And Green is right: In the face of these policies, Mellon’s memos to Hoover failed to stop the catastrophe.

The rest of the article, about Ron Paul as “The Tea Party’s Brain,” is pretty interesting.

More Discipline for SEAL in Afghanistan than SWAT Officer in Fairfax?

You’ve probably heard that Linda Norgrove, the kidnapped British aid worker in Afghanistan who died in a rescue attempt, appears to have been killed by a grenade thrown by one of the Navy SEALs coming to her aid, not a suicide bomb vest as initially reported.

Two things come to mind here.

First, the fact that it was a grenade and not a suicide vest that killed her only came to light because of the video cameras capturing the event. The unit performing the rescue had cameras mounted on the helicopters and the helmets of the SEALs on the ground. As I said in this video and this blog post, cameras provide an honest witness in these dangerous situations.

Second, compare the accountability the SEAL will face with what would happen to a SWAT team member. It appears that the SEAL who threw the grenade will face disciplinary action. If I had to guess, this will be a memorandum of reprimand from a general officer. That would go into the SEAL’s permanent personnel file, and cause a “slow death” of his career. Unable to get promoted in an up-or-out personnel system, the SEAL could be forced out of the service before he is eligible for retirement.

This is an elite Navy SEAL performing a hostage rescue mission in an armed camp in the Korengal Valley, arguably one of the most dangerous places in the world. The SEALs didn’t know where the hostage was, and the last Taliban kidnapper alive on the objective was firing at other SEALs with an automatic weapon. Yet the SEAL who threw the grenade, in a situation that justifies the use of a dynamic raid, may face the end of his career.

Compare this with the discipline that Fairfax County Police Officer Deval J. Bullock faced for killing optometrist Sal Culosi. Culosi ran a sports betting operation, and an undercover officer had placed bets with him in the prelude to a prosecution. Fairfax officers served the arrest warrant with a SWAT team, and Officer Bullock had an accidental discharge with his handgun at point blank range into Culosi’s chest, killing him almost instantly. Bullock was suspended for three weeks and kicked off the SWAT team. Commonwealth’s Attorney Robert Horan didn’t take Bullock’s case to a grand jury, declaring that when someone fires a gun without malice and accidentally kills someone, “they do not commit a crime.” Sorry, that’s negligent homicide. And, according to police union officials, the three-week suspension was still too stiff a punishment.

So, an elite military hostage-rescue team member may face more consequences for a judgment error – when a kidnapper is threatening the lives of everyone on the objective with an automatic weapon at the tail end of a 30-minute gunfight necessitated by the imminent threat that the hostage will be moved to a more hostile location across the Pakistan border – than a suburban police officer who negligently murders a non-violent offender in a situation that didn’t warrant the use of a SWAT team to begin with.

In some instances, to call this “police militarization” is to slander the military. Here are some parallel thoughts from Radley Balko, and a whole lot more on paramilitary police raids in Radley’s Overkill and at the Raidmap.