Archives: 02/2011

American Manufacturing Continues to Thrive in a Global Economy

University of Michigan economist and American Enterprise Institute scholar Mark Perry has an excellent oped in today’s Wall Street Journal [$] about how U.S. manufacturing is thriving.  It can’t be emphasized enough how important it is to present such illuminating, factual, compelling analyses to a public that is starved for the truth and routinely subject to lies, half-baked assertions, and irresponsibly outlandish claims about the state of American manufacturing.

The truth matters because U.S. trade and economic policies—your pocketbook—hang in the balance.

For more data, facts, and background about the true state of U.S. manufacturing, please see this Cato policy analysis and these opeds (one, two, three).

Romney and Huckabee, What a Choice

You know you’re really wrong when Mike Huckabee can call you out. But that’s the situation Mitt Romney finds himself in, as Michael Cannon points out below.  Huckabee says Romney’s government-run health care plan with an individual mandate is a bad idea, Romney says he’s still proud of his plan, which is totally different from President Obama’s government-run health care plan with an individual mandate. But really, what can he do? In 17 years of seeking high political office, he is known for two things: changing his position on a surprisingly large number of issues, and his Massachusetts health care program. Which was of course the forerunner of Obamacare, as Michael Cannon and I pointed out in the video that Michael linked. So Romney is still defending a position I think we’ve already refuted.

Meanwhile, in speeches and interviews this week, Mike Huckabee continues to make the untenable connection between gay marriage and family breakdown that I discussed two weeks ago in the Los Angeles Times. Huckabee told reporters:

Huckabee opposes gay marriage on the grounds that, according to him, it destroys traditional families.

“There is a quantified impact of broken families,” Huckabee said. “[There is a] $300 billion dad deficit in America every year…that’s the amount of money that we spend as taxpayers to pick up the pieces because dads are derelict in their duties.”

But what’s the connection? As I wrote:

One thing gay couples are not doing is filling the world with fatherless children. Indeed, it’s hard to imagine that allowing more people to make the emotional and financial commitments of marriage could cause family breakdown or welfare spending….

Social conservatives point to a real problem and then offer phony solutions.

But you won’t find your keys on the thoroughfare if you dropped them in the alley, and you won’t reduce the costs of social breakdown by keeping gays unmarried and preventing them from adopting orphans.

One might add that, as Huckabee knows very well, rates of divorce and unwed motherhood soared decades before anyone started agitating for gay marriage.

If Huckabee and Romney are the Republican frontrunners, President Obama must be sleeping well these days.

Everything You Need to Know about Whether State and Local Bureaucrats Are Over-Compensated, in One Chart

The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that  Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.

Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.


This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.

The only bit of semi-good news for Wisconsin taxpayers is that state and local bureaucrats are not as lavishly over-compensated as federal bureaucrats.

This Center for Freedom and Prosperity video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.

The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist.

Pressuring Toyota into an Overcautious Recall

With the news that Toyota has agreed to extend its floor mat and gas pedal recall to another 2.1 million vehicles, mostly SUVs, certain press outlets may slip back into the tone of coverage (Toyota in crisis! Safety mysteries still unresolved!) so prevalent last year before the scare was deflated. Some perspective:

  • As you learned if you read all the way down to paragraph 14 of the hyperventilating L.A. Times report – and never learned at all from some other reports – the National Highway Traffic Safety Administration (NHTSA) is now closing its investigation of alleged sudden acceleration problems in Toyotas. That’s a huge win for the Japanese automaker and the real news of the day.
  • NHTSA insisted, however – presumably as its price for stamping the case as closed – that Toyota expand its recall as happened yesterday.
  • Toyota’s stock went up on the news, not down, suggesting that in investors’ view the price was well worth paying for the automaker to rid itself of the regulatory entanglement.
  • Floor mat jams that obstruct proper operation of the brake and gas pedal are an exceedingly, even freakishly rare cause of unintended acceleration accidents. While they do seem to have been a factor in one much-publicized crash, they have nothing to do with the vast majority of unintended acceleration episodes, which as we now know (or knew all along) arise from drivers’ hitting the wrong pedal by mistake.
  • To the extent floor mat jams are a real safety worry, the main way to avoid them is to not throw extra mats in, and watch out for mats that aren’t intended for the make/model, may be prone to slip around, or both. The New York Daily News spoke to a Toyota manager in Brooklyn: “The biggest problem is people put in an extra mat, and that’s been the real issue,” said Michael Ianelli. “They’re not supposed to put in a second mat.” Much of the recall seems to be aimed at engineering around the problem of careless user maintenance.
  • Murmurings are already being heard that similarly designed Toyota vehicles sold in other parts of the world aren’t subject to the recall – another hint the company may be trying more to keep NHTSA happy than address what it views as a major safety issue.

Millions of dollars will now be spent with very dubious safety benefits. But at least a federal agency will be able to boast that it “did something.”

Does the Internet Cause Freedom?

That will be the subject of a Cato on Campus session this afternoon entitled: “The Internet and Social Media: Tools of Freedom or Tools of Oppression?” Watch live online at the link starting at 3:30 p.m., or attend in person. A reception follows.

The delight that so many felt to see protesters in Iran using social media has given way to delight about the use of Facebook to organize for freedom in Egypt. But this serial enthusiasm omits that the “Twitter revolution” in Iran did not succeed. The fiercest skeptics even suggest that the tweeting during Iran’s suppressed uprising was mostly Iranian ex-pats goosing excitable westerners and not any organizing force within Iran itself. Coming to terms with the Internet, dictatorships are learning to use it for surveillance and control, possibly with help from American tech companies.

So is the cause of freedom better off with the Internet? Or is social media a shiny bauble that distracts from the long, heavy slog of liberating the people of the world?

Joining the discussion will be Chris Preble, Director of Foreign Policy Studies at Cato; Alex Howard, Government 2.0 Correspondent for O’Reilly Media; and Tim Karr, Campaign Director at Free Press. More info here.

Romney Van Winkle

In 2006, then-Massachusetts governor Mitt Romney (R) fought for and enacted a health care law now known as RomneyCare – though the law is so nearly identical to ObamaCare that one could call it ObamaCare 1.0.  Romney is seeking the GOP nomination for president in 2012.  But since 84 percent of Republicans want ObamaCare repealed, the fact that he paved the way for ObamaCare is causing problems for Romney among the party faithful.  The most recent manifestation came in the form of a tongue-lashing from former Arkansas governor Mike Huckabee (R), whose book criticizes Romney both for enacting RomneyCare and for refusing to admit it was mistake.  In a recent interview, Huckabee said:

The position he should take is to say: “Look, the reason Obamacare won’t work is because we’ve tried it at the state level and we know it won’t work.”

Through a spokesman, Romney has – once again! – defended ObamaCare 1.0:

“Mitt Romney is proud of what he accomplished for Massachusetts in getting everyone covered,” Romney’s spokesman, Eric Fehrnstrom, told the Boston Globe, in the first direct response Team Mitt made to Huckabee’s criticism of the health plan in his new book.

Fehrnstrom added the usual stuff about how, even though Romney is proud of what RomneyCare/ObamaCare has done for Massachusetts, RomneyCare/ObamaCare may not be right for the entire nation.  As David Boaz and I explain in this Cato video, to which Romney has lent enduring relevance, Romney can’t have it both ways:



It’s as if the guy has just awakened from a 20-year nap and doesn’t realize the world has changed.