Archives: June, 2011

Afghanistan Discussion This Wednesday, 4:00 p.m.

At 4:00 this Wednesday, Cato is hosting a panel discussion on “turning the page in Afghanistan” with the coauthor of Cato’s recent paper on the topic, Josh Rovner, as well as my colleague Malou Innocent, Joshua Foust of the American Security Project, and Michael O’Hanlon of the Brookings Institution. The event will feature a (perhaps uncommonly) wide range of opinion about the current strategy and the recently announced drawdown timeline. I look forward to having the privilege of moderating the discussion.

Register to attend here, or watch live at 4:00 Wednesday here.

Unhappy (belated) Birthday National Minimum Wage

I wasn’t in the mood Friday to celebrate the 73rd birthday of the federal minimum wage, created under the Fair Labor Standards Act of 1938.  Looking at youth unemployment numbers can be a little depressing.   Those figures should, however, sober up anyone who is still drunk under the spell of thinking the minimum wage has no impact on unemployment.

The chart above shows the increase in unemployment overall (right axis) and the unemployment rate for workers age 16 to 19 (left axis).  The difference between these two numbers usually runs about 10 percent, even in good times.  Notice that when the minimum wage was raised in July 2009, overall unemployment had started to level off, while youth unemployment sky-rocketed.  We also witnessed a big spike in youth unemployment the last time the minimum wage was raised in July 2008.

For those who truly care about reducing unemployment, as I do, the first thing we can do is recognize that a large part of the problem is being driven by the massive spike in youth unemployment, which the data suggests is partly being driven by the minimum wage.

For a great review of the historical evidence, I suggest David Neumark’s book Minimum Wages.  And yes, I’ve read David Card’s studies, which I think have tons of problems, but that is beyond the discussion here.  The bottom line should be that in a free society, whatever two consenting individuals agree to, should be respected, whether its marriage or the contours of a labor contract.

Republicans and the New York Marriage Law

Since New York passed a law extending marriage to same-sex couples, Republican presidential candidates have been mostly silent. But not Rep. Michele Bachmann, who has had a long and strong interest in gay rights issues. In an interview on Fox News Sunday she endorsed both New York’s Tenth Amendment right to make marriage law and the federal government’s right to override such laws with a constitutional amendment, confusing host Chris Wallace:

WALLACE: You are a strong opponent of same-marriage. What do you think of the law that was just passed in New York state—making it the biggest state to recognize same-sex marriage?

BACHMANN: Well, I believe that marriage is between a man and a woman. And I also believe—in Minnesota, for instance, this year, the legislature put on the ballot for people to vote in 2012, whether the people want to vote on the definition of marriage as one man, one woman. In New York state, they have a passed the law at the state legislative level. And under the 10th Amendment, the states have the right to set the laws that they want to set….

WALLACE: But you would agree if it’s passed by the state legislature and signed by the governor, then that’s a state’s position.

BACHMANN: It’s a state law. And the 10th Amendment reserves for the states that right.

WALLACE: All right. I want to follow up on that, because I’m confused by your position on this. Here’s what you said in the New Hampshire debate. Let’s put it on.

(BEGIN VIDEO CLIP)

BACHMANN: I do support a constitutional amendment on marriage between a man and a woman, but I would not be going into the states to overturn their state law.

(END VIDEO CLIP)

WALLACE: That’s why I’m confused. If you support state rights, why you also support a constitutional amendment which would prevent any state from recognizing same-sex marriage?

BACHMANN: Well, because that’s entirely consistent, that states have, under the 10th Amendment, the right to pass any law they like. Also, federal officials at the federal level have the right to also put forth a constitutional amendment….

WALLACE: My point is this, do you want to say it’s a state issue and that states should be able to decide? Or would like to see a constitutional amendment so that it’s banned everywhere?

BACHMANN: It is— it is both. It is a state issue and it’s a federal issue. It’s important for your viewers to know that federal law will trump state law on this issue. And it’s also—this is why it’s important—

WALLACE: And you would [sic] federal law to trump state law?

BACHMANN: Chris, this is why it’s so important because President Obama has come out and said he will not uphold the law of the land, which is the Defense of Marriage Act. The Congress passed the Defense of Marriage Act and Bill Clinton signed it into law, to make sure that a state like New York passed a definition of marriage other [sic] one man, one woman, that other states wouldn’t be forced to recognize New York’s law….

WALLACE: So, just briefly, you would support a constitutional amendment that would overturn the New York state law?

BACHMANN: Yes, I would. I would. That is not inconsistent, because the states have the right under the 10th Amendment to do what they’d like to do. But the federal government also has the right to pass the federal constitutional amendment. It’s a high hurdle, as you know.We only have 27 amendments to the federal constitution. It’s very difficult. But certainly, it will either go to the courts, or the people’s representatives at the federal level.

Congratulations to Chris Wallace for his tenacious questioning. Presumably the way to understand Bachmann’s position is that she thinks states have a Tenth Amendment right to make their own laws in any area where the federal government doesn’t step in, and she supports a federal law overriding state marriage laws. That includes the Defense of Marriage Act, whose Section 3 says for the first time in history that the federal government will not recognize marriage licenses issued by the states. And it also includes a federal constitutional amendment to prohibit states from implementing equal marriage rights for gay couples.

Bachmann is not the only Republican who should be asked about the tension between support for the Tenth Amendment and support for federal laws and amendments to carve exceptions out of the Tenth Amendment. This month George Will has praised two Texas Republicans: First, Senate candidate and former Texas solicitor general Ted Cruz, whom he called a “limited-government constitutionalist” and who wrote a senior thesis at Princeton “on the Constitution’s Ninth and 10th amendments. Then as now, Cruz argued that these amendments, properly construed, would buttress the principle that powers not enumerated are not possessed by the federal government.” And second, Governor Rick Perry, who “was a ‘10th Amendment conservative‘ (‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people’) before the Tea Party appeared.”

Cruz boasts on the same page of his website of his support of both the Tenth Amendment and DOMA. Does he really think, as a staunch defender of the Tenth Amendment, that the federal government should override the marriage law of the great state of New York? Perry may be a consistent Tenth Amendment conservative. In his book Fed Up! Our Fight to Save America from Washington he makes his opposition to gay marriage more than clear. But he does write, “Crucial to understanding federalism in modern-day America is the concept of mobility, or the ability to ‘vote with your feet.’ If you don’t support the death penalty and citizens packing a pistol, don’t come to Texas. If you don’t like medical marijuana and gay marriage, don’t move to California.” And an NPR interviewer reported:

States should be free to make decisions regulating such things as taxes, marijuana and gay marriage, Perry says.

“If you want to live in a state that has high taxes, high regulations — that is favorable to smoking marijuana and gay marriage — then move to California,” he says.

Now that a large state has made national headlines by passing a gay marriage law—without any prodding from the judiciary—more political candidates, from President Obama to his Republican challengers, are going to be pressed to make their positions clear on the issue of marriage equality itself, on federalism and the powers of the states, and on the lawsuits that are moving through the courts.

Epic Win for First Amendment in Violent Videogame Case

The Supreme Court scored an epic win for the First Amendment in striking down California’s prohibition on selling violent videogames to minors. The law was both overly broad—sweeping in a wide variety of games based on no objective standard and no age-based gradations—and underinclusive—with no restrictions on other types of media. With a few strictly drawn exceptions for historically unprotected speech—obscenity, incitement, fighting words—government lacks the power to restrict expression simply because of its content. And a legislature cannot create new types of unprotected speech simply by weighing its purported social costs against its alleged value.

“Reading Dante is unquestionably more cultured and intellectually edifying than playing Mortal Kombat,” Justice Scalia points out in his majority opinion. “But these cultural and intellectual differences are not constitutional ones.”

Moreover, the Court, citing Cato’s amicus brief, described how each generation’s new media produces consternation from adults who want to avoid the “seduction of the innocent” (to borrow a phrase from the attack on comic books in the 1950s). In the 19th century, dime novels and “penny dreadfuls” were blamed for social ills and juvenile delinquency. Later, Congress held hearings on the cartoon menace, which prompted the comic book industry to voluntarily adopt a ratings system. Backlash against certain kinds of movies and music caused those respective industries also to adopt voluntary ratings systems. And the videogame industry too adopted an effective and responsive ratings system after congressional hearings in the early ‘90s. Not only is all this hand-wringing overwrought, but self-regulation and parental oversight have worked—evidence from the Federal Trade Commission shows that the voluntary ratings system works more effectively with videogames than with any other medium—and they avoid First Amendment thickets. Adding a level of governmental control, even if were constitutional, would be counterproductive.

Here’s the Court’s opinion in Brown v. Entertainment Merchants Association (Cato’s brief is cited on pages 9-10).

Block-Granting Medicaid Is a Long-Overdue Way of Restoring Federalism and Promoting Good Fiscal Policy

This new video, based in large part on the good work of Michael Cannon, explains why Medicaid should be shifted to the states. As I note in the title of this post, it’s good federalism policy and good fiscal policy. But the video also explains that Medicaid reform is good health policy since it creates an opportunity to deal with the third-party payer problem.

One of the key observations of the video is that Medicaid block grants would replicate the success of welfare reform. Getting rid of the federal welfare entitlement in the 1990s and shifting the program to the states was a very successful policy, saving billions of dollars for taxpayers and significantly reducing poverty. There is every reason to think ending the Medicaid entitlement will have similar positive results.

Medicaid block grants were included in Congressman Ryan’s budget, so this reform is definitely part of the current fiscal debate. Unfortunately, the Senate apparently is not going to produce any budget, and the White House also has expressed opposition. On the left, reducing dependency is sometimes seen as a bad thing, even though poor people are the biggest victims of big government.

It’s wroth noting that Medicaid reform and Medicare reform often are lumped together, but they are separate policies. Instead of block grants, Medicare reform is based on something akin to vouchers, sort of like the health system available for Members of Congress. This video from last month explains the details.

In closing, I suppose it would be worth mentioning that there are two alternatives to Medicaid and Medicare reform. The first alternative is to do nothing and allow America to become another Greece. The second alternative is to impose bureaucratic restrictions on access to health care—what is colloquially known as the death panel approach. Neither option seems terribly attractive compared to the pro-market reforms discussed above.

Should the Government Ban ATMs and Create “Spoon-ready” Projects?

At the Britannica Blog today I note President Obama’s concern over ATMs, Hillary Clinton’s support for the candlemakers’ petition, John Maynard Keynes’s simple solution to the problem of unemployment—and how Bastiat refuted all their arguments more than 150 years ago:

And there’s your question for President Obama: Do you really think the United States would be better off if we didn’t have ATMs and check-in kiosks? …  And do you think we’d be better off if we mandated that all these “shovel-ready projects” be performed with spoons?

In his 1988 book The American Job Machine, the economist Richard B. McKenzie pointed out an easy way to create 60 million jobs: “Outlaw farm machinery.” The goal of economic policy should not be job creation per se; it should be a growing economy that continually satisfies more consumer demand. And such an economy will be marked by creative destruction. Some businesses will be created, others will fail. Some jobs will no longer be needed, but in a growing economy more will be created… .

Finding new and more efficient ways to deliver goods and services to consumers is called economic progress. We should not seek to impede that process, whether through protectionism, breaking windows, throwing towels on the floor, or fretting about automation.

More here.

Should TSA Change Its Policy?

News that Transportation Security Administration officers required a 95-year-old cancer patient to remove her adult diaper for search lit up the social media this weekend. It’s reminiscent of the recent story where a 6-year-old girl got the pat-down because she didn’t hold still in the strip-search machine. TSA administrator John Pistole testified to a Senate hearing that the agency would change its policy about children shortly thereafter.

So, should the TSA change policy once again? Almost certainly. Will it ever arrive at balanced policies that aren’t punctuated by outrages like this? Almost certainly not.

You see, the TSA does not seek policies that anyone would call sensible or balanced. Rather, it follows political cues, subject to the bureaucratic prime directive described by Cato chairman emeritus and distinguished senior economist Bill Niskanen long ago: maximize discretionary budget.

When the TSA’s political cues pointed toward more intrusion, that’s where it went. Recall the agency’s obsession with small, sharp things early in its tenure, and the shoe fetish it adopted after Richard Reid demonstrated the potential hazards of footwear. Next came liquids after the revelation of a bomb plot around smuggling in sports bottles. And in December 2009, the underwear bomber focused the TSA on everyone’s pelvic region. Woe to the traveler whose medical condition requires her to wear something concealing the government’s latest fixation.

The TSA pursues the bureaucratic prime directive—maximize budget—by assuming, fostering, and acting on the maximum possible threat. So a decade after 9/11, TSA and Department of Homeland Security officials give strangely time-warped commentary whenever they speechify or testify, recalling the horrors of 2001 as if it’s 2003. The prime directive also helps explain why TSA has expanded its programs following each of the attempts on aviation since 9/11, even though each of them has failed. For a security agency, security threats are good for business. TSA will never seek balance, but will always promote threat as it offers the only solution: more TSA.

Because of countervailing threats to its budget—sufficient outrage on the part of the public—TSA will withdraw from certain policies from time to time. But there is no capacity among the public to sustain “outrage” until the agency is actually managing risk in a balanced and cost-effective way. (You can ignore official claims of “risk-based” policies until you’ve actually seen the risk management and cost-benefit documents.)

TSA should change its policy, yes, but its fundamental policies will not change. Episodes like this will continue indefinitely against a background of invasive, overwrought airline security that suppresses both the freedom to travel and the economic well-being of the country.

In a 2005 Reason magazine “debate” on airline security, I described the incentive structure that airlines and airports face, which is much more conducive to nesting security with convenience, privacy, savings, and overall traveler comfort and satisfaction. The threat of terrorism has only dropped since then. We should drop the TSA.