Archives: 12/2010

Brian Aitken’s Sentence Commuted

New Jersey Governor Chris Christie has commuted the seven-year sentence of Brian Aitken, the man wrongfully convicted on firearms charges under that state’s draconian gun laws. Good.

While a full pardon seems more appropriate – the judge in this case should have given the jury instructions on the “moving exception” that protected Aitken – this is at least recognition of an injustice and relief for one man and his family.

The New Jersey state judicial system’s webpage describes the grand jury’s function as “a screening mechanism to protect citizens from unfounded charges.” That didn’t happen in this case. For more on this phenomenon, read this Cato Policy Analysis, “A Grand Façade: How the Grand Jury Was Captured by the Government.”

For more Cato work on criminal justice, check out Tim Lynch’s excellent book, In the Name of Justice.

Getting Serious about Antidumping Reform in 2011

The U.S. antidumping law still enjoys broad bipartisan support in Congress and within pockets of the executive branch. Although some of that support can be chalked up to politicians representing the narrow interests of influential constituencies that have mastered the use of antidumping as a bludgeon to cripple the competition, much more support stems from a fundamental misunderstanding of the purpose, history, mechanics, and consequences of the law.

Too many policymakers passively accept the anachronistic rationalizations proffered by the steel industry, labor unions, other big antidumping users, and their hired guns in Washington. Too many buy into the idealized imagery of a patriotic, upstanding American producer working tirelessly to ensure the preservation of well-paying jobs for hard-working Americans, but is suffering the ravages of unscrupulous, predatory foreign traders intent on destroying U.S. firms and monopolizing the U.S. market. What politician could oppose a law presumed to protect that kind of a company against that kind of a scourge?

But when the curtain is peeled back, exposing the reality of the operation of the U.S. antidumping law, one discerns a very different reality.  Antidumping measures always raise the costs of firms in downstream industries that rely on the affected imports.  The law routinely claims domestic firms as victims.  The law is often used as a tool by domestic firms waging battle for supremacy over other domestic firms.  Sometimes foreign-owned firms are the petitioners and U.S-owned firms are the respondents.  Rarely does the law lead to job creation or job restoration in the domestic industry.  And never is the allegation of “unfair trade” substantiated, or even investigated.  Myth and misinformation explains the persistence of the U.S. antidumping regime.

Over the next few months, the Cato Institute’s Center for Trade Policy Studies will shine the spotlight on  U.S. antidumping policy and update its large body of research on the subject by publishing some new papers and hosting discussions about the prospects for meaningful antidumping reform. The new Congress should pay attention.  After all, if renewed talk about completing the Doha Round in 2011 is to become action, so must antidumping reform.

The first of those studies is now available on the Cato home page. That paper describes the evolution of U.S. antidumping policy from an obscure offshoot of competition law into the predominant instrument of contingent protection that it is today and provides an account of some of the crucial statutory and administrative changes that have occurred over the decades. Its purpose is to demonstrate that the increase in antidumping activity reflects several developments that have nothing to do with foreign behavior whatsoever, including a progressive expansion of the definition of dumping, relaxation of evidentiary standards, and a pro-domestic-industry bias in the law’s administration at the U.S. Department of Commerce. The arcane mix of statutory rules and discretionary whims that emerged as contemporary antidumping policy is a far cry from the first antidumping law—in practice and intent. Today, antidumping is little more than an elaborate excuse for run-of-the-mill protectionism. And overwhelmingly, U.S. businesses and consumers are its victims.

Bush Deception Points

Former President George W. Bush’s book Decision Points is apparently selling quite well. The book includes a defense of the president’s fiscal record, and a table on page 447 compares Bush to prior presidents on spending and debt (you can see the table on Amazon’s search inside feature).

One problem with the table is that Bush claims credit for the low spending and debt of President Clinton’s last year, fiscal 2001. The first budget Bush crafted was for fiscal 2002. Here are the data reported by Bush, and data recalculated to better reflect the budgets that each president had some control over. Figures are averages over the fiscal year periods, measured as a share of GDP:

Decision Points Comparison: Clinton (1993-2000) 19.8%, Bush (2001-2008) 19.6%.
More Accurate Comparison: Clinton (1994-2001) 19.4%, Bush (2002-2009) 20.4%.

The book makes Bush look better on spending, but a more accurate comparison shows Clinton to have a better record.

It’s true that Bush was not responsible for some of fiscal 2009 spending, and if we take that year out Bush would have average spending of 19.8%. But consider the direction of spending under the two presidents–spending fell under Clinton from 21.4% to 18.2%, but it increased under Bush from 18.2% to 20.7% by fiscal 2008 (and even higher in fiscal 2009). (Spending data are here). 

The table in Decision Points also shows Bush looking better than Clinton on public debt as a share of GDP, averaged over each president’s tenure. But the debt data has the same time period problem as the spending data. More importantly, Clinton delivered surpluses his last four years in office, which handed Bush a budget with very low debt and low interest costs. The low interest costs helped mask the spending-increase policies of Bush for a number of years. But Bush’s profligacy eventually became clear to analysts and the public alike, and this autobiography cannot undo his record as the biggest spender since LBJ.

Final note: yes, I understand that Congress plays a large role in federal budgeting, but so do presidents. Presidents propose annual budgets, they twist arms and use the bully pulpit to increase or cut programs, they support legislation to expand or contract entitlement programs, and they sign or veto appropriation and authorization bills.

Government Program Immortality

Who said: “A government bureau is the nearest thing to eternal life we’ll ever see on this earth.”?

As political junkies know, that was Ronald Reagan at the 1964 Republican convention. The Internet attributes other similar quips to Reagan.

Reagan apparently borrowed the idea from Senator James F. Byrnes, who stated on the floor of the Senate in 1933: “The nearest earthly approach to immortality is a bureau of the federal government.”

My source is “Reorganization of Federal Administrative Agencies,” Congressional Quarterly, September 17, 1933. The article is a reminder that concerns about government waste, duplication, overlap, and inefficiency certainly did not start with Reagan. Government failure has been around a long time.

The CQ article notes that the 1932 Democratic platform called for “an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance, to accomplish a saving of not less than 25 percent in the cost of the federal government.”

Alas, that leaner-government policy was not exactly the approach followed by FDR.

Mega-Consumers against Consumerism

Adjacent articles in the latest New Yorker deplore “consumerism” among the American revolutionaries and the modern Chinese. You wonder how a magazine so concerned about manifestations of consumer desire would support itself. Surely it struggles along on a shoestring, preaching the message of austerity and simplicity to sincere but poor readers. In fact, however, these laments about consumerism in societies vastly poorer than our own are sandwiched between lush full-page advertisements for Chanel watches, Samsung home entertainment centers, single malt Scotch, Grey Goose vodka, Cristal champagne, David Yurman jewelry, German automobiles, and Norwegian Cruise Lines. The articles themselves appear on pages lined with small, elegant ads for Jay-Z’s book-ebook-app, tours of Wales, monogram rings, Aeron chairs, European berets, cashmere caps, and a remarkable number of expensive psychiatric facilities, perhaps specializing in the treatment of cognitive dissonance.

Lame Duck Won’t Create Race-Based Government After All

Good news out of Congress this week (and by good news, I mean they didn’t screw things up any more than they already are):  The infamous Akaka Bill, which would create a “Native Hawaiian” government for purposes of racial preferences and other unconstitutional goodies, will not be a part of the slimmed-down legislation that funds the government until Congress gets around to passing an actual budget.  (For background, see my op-eds here – for which I was attacked by Hawaii’s Governor-Elect Neil Abercrombie – and here, and watch the Cato Capitol Hill Briefing.  And for coverage of a related recent Supreme Court case, see these two blogposts and Cato’s amicus brief.)

Three weeks ago, there had been fears that the Akaka language would be inserted into the omnibus spending bill (see Roger Clegg and Hans von Spakovsky blogging at NRO’s The Corner).  Had that been the case, it would’ve been an outrage for several reasons:

  1. This is a new Akaka Bill.  The text was only introduced in November and was apparently the result of a backroom deal cut between the Hawaii’s senators and lame-duck Governor Linda Lingle in July, but which did not become public until after the election.
  2.  There have never been any hearings on this language – not in the House of Representatives Natural Resources Committee, not in the Senate Indian Affairs Committee, and definitely not in Hawaii.  No testimony has been heard about how this particular bill will divide Hawaii, on the constitutionality of the new provisions, how Hawaiians’ civil rights will be affected, or how the tax base of Hawaii will be diminished.
  3. This is an abuse of the process.  It is completely inappropriate to use a must-pass spending bill to avoid debate, amendment, and public scrutiny on an unrelated matter of such grave constitutional and practical importance.
  4. Sen. Inouye (D-HI) previously denied that he planned to use the appropriations process to avoid public scrutiny of the bill, so this would have been a 180-degree reversal.

Perhaps bowing to the above kinds of arguments, what actually appeared in the mega-bill was a “study” that the Secretary of the Interior had to conduct in conjunction with “those offices designated under the Hawaii State Constitution as representative of the Native Hawaiian community,” to make recommendations to Congress “on developing a mechanism for the reorganization of a Native Hawaiian governing entity and recognition by the United States of the Native Hawaiian governing entity as an Indian tribe.”  In other words, this was getting the ball moving, establishing facts on the ground, etc.

Fortunately – for many reasons unrelated to race-based government – the omnibus went down in flames (the first tangible victory for the Tea Party, before their congressmen even assumed office?) and with it the aforementioned “study.”  The new streamlined “continuing resolution,” which I’ve skimmed in its entirety – just 36 pages! – still includes various legislative gems but there is no mention of the Aloha State.

That’s a good thing: we seem to have escaped the spectre of race-based government yet again – but be aware that the Akaka Bill lurks in the background of every Congress, ready to ensnare those who think it’s just about “parochial” Hawaii issues that have nothing to do with the “real world.”

Cigarette Taxes and Smuggling

The Mackinac Center’s Michael LaFaive and Todd Nesbit have released a new study on the ill-effects of raising cigarette taxes at the state and local level. Cigarette tax hikes have become a popular choice for spend-happy state policymakers looking for money in these tough economic times.

Also check out their accompanying video on the topic: