Archives: December, 2011

Will the Last Job Creator to Leave California Please Turn Off the Lights?

By
Daniel J. Mitchell

I’ve written before about whether California is the Greece of America, in part because of crazy policies such as overpaid bureaucrats and expensive forms of political correctness,

And we all know that California has one of the nation’s greediest governments, imposing confiscatory tax rates on a shrinking pool of productive citizens.

So it is hardly surprising that the Golden State is falling behind, losing jobs and investment to more sensible states such as Texas.

But not everybody is learning the right lessons from California’s fiscal and economic mess.

There’s a group of crazies who want to increase the top tax rate by five percentage points, an increase of about 50 percent. And they have made Kim Kardashian the poster child for their proposed ballot initiative.

I’m relatively clueless about popular culture, but even I’m aware that there is a group of people know as the Kardashian sisters. I don’t know who they are or what they do, but I gather they are famous in sort of the same way Paris Hilton was briefly famous.

And they have cashed in on their popularity, which may not reflect well on the tastes of the American people, but it’s not my job to tell other people how to spend their money.

But not everybody share this live-and-let-live attitude, which is why the pro-tax crowd in California produced this video.

I suppose I could criticize the petty dishonesty of the proponents, since they deliberately blurred of the difference between “tax rates” and “taxes paid.”

Or I could expose their economic illiteracy by pointing out that higher tax rates would accelerate the emigration of investors, entrepreneurs, small business owners, and other rich taxpayers to zero-tax states such as Nevada.

But I won’t do those things. Instead, like the Nevada Realtors Association and Arizona Business Relocation Department, I’m going to support this ballot initiative.

Not because I overdid the rum and eggnog at Christmas, but because it’s good to have negative role models, whether they are countries like Greece, cities such as Detroit, or states like California.

So here’s my challenge to the looters and moochers of the Golden State. Don’t just boost the top tax rate by five-percentage points. That’s not nearly enough. Go for a 20 percent top tax rate. Or 25 percent. After all, think of all the special interests that could use the money more than Ms. Kardashian.

And if somebody tells you that she will move to South Beach or Las Vegas, or that the other rich people will move to Texas, Wyoming, or Tennessee, just ignore them. Remember, it’s good intentions that count.

In closing, I apologize to the dwindling crowd of productive people in California. It’s rather unfortunate that you’re part of this statist experiment. But you know what they say about eggs and omelets.

By the way, here’s some humor about the Golden State, including a joke about the bloated bureaucracy and a comparison with Texas.

Topics: 
General, Government and Politics, Political Philosophy, Tax and Budget Policy

Truth Is Stranger Than Fiction, Gingrich Division

By
Ilya Shapiro

Roger Pilon has been doing good, quick work on New Gingrich’s pronouncements on the role of the judiciary in interpreting the Constitution. (Roger read Newt’s 54-page “white paper” so you don’t have to!)

I have nothing to add to that assessment of the former House Speaker’s legally questionable and politically unwise views. Instead, I want to share a snippet from this lighter take by Mark Steinberg:

The Supreme Court today held that the United States Congress is unconstitutional and must vacate the Capitol no later than January 1, 2012.

The 8-1 vote followed closely on the heels of statements by Newt Gingrich, now leading the race for the GOP presidential nomination, that as president he would ignore decisions by the courts if he was having “a really bad day”; that Congress should have the power to subpoena and impeach federal judges whose jibs the legislators found un-seaworthy; and that the judiciary is “a twig on the governmental tree that the president and Congress can prune and burn in the backyard.”

The piece reads like something from The Onion.

Funny, when I heard that Gingrich was discoursing on the law, I thought he’d be proposing the appointment of sentient robots to be our judicial overlords…

Happy Holidays, everyone!

Topics: 
Government and Politics, Law and Civil Liberties

Back When Democrats Cared Enough to Advocate What Works

By
Andrew J. Coulson

Many, if not most, of the stated goals of the Democratic Party have universal appeal in the United States. Foremost among those would be reducing poverty and ensuring that every child has access to a high-quality education.

The problem with the Democratic Party today is that its leadership seems not to understand the kinds of policies that will achieve those goals. Instead of finding out what works and implementing it, they simply call for new government programs on the assumption that those programs will work (or, if you’re jaded, on the assumption that doing so will get them re-elected).

It wasn’t always like that. There was a time when one of the most prominent Democrats in the nation was so deeply committed to these goals that he was willing to advocate the policies that would achieve them—special interests be damned.

Scott Walter has a little of that story at Philanthropy Daily.

To plagiarize Instapundit: more like this, please.

Topics: 
Education and Child Policy, Government and Politics

Strike Three for PolitiFact

By
Michael F. Cannon

The annual unveiling of its “Lie of the Year” award garners PolitiFact more attention than anything else. Hopefully, it will garner so much attention that people will recognize this award, which is supposed to improve political discourse, instead degrades it.

PolitiFact’s past three Lies of the Year have been about health care.  Not one of them was a lie.

A lie is when a speaker says something that he knows or believes to be false, for the purpose of deceiving others. None of these supposed Lies of the Year even met the threshold test of being false.  The first two (“death panels” and “ObamaCare is a government takeover”) were actually, demonstrably true.

The third and latest Lie of the Year—that “Republicans voted to end Medicare”—is arguably true: its veracity depends on what your definition of “Medicare” is. To seniors, Medicare means “the government helps me pay for health care.” The House Republicans’ budget (a.k.a., the Ryan plan) would not end such federal assistance, and would arguably improve access to quality health care. To the Left, “Medicare” means the particular way the federal government helps seniors access health care: a single-payer system.  The Ryan plan would end that single-payer system. My leftist friends are right and PolitiFact is wrong: from a certain and valid perspective, this claim is true.

Moreover, even if these three statements were false, the speakers believed them to be true. Therefore, they cannot be lies. Every single Lie of the Year award has gotten that basic fact wrong.

In the process, this award degrades political discourse by implicitly launching—an encouraging others to launch—ad hominem assaults on people who hold legitimate differences of opinion. PolitiFact should find a better way to attract readers.

I have been writing about the flaws in PolitiFact’s business model for some time:

I’m glad to see my friends on the Left have taken notice, though I regret the way it happened.

Topics: 
Government and Politics, Health Care

Solar Panel Case Shines Light on the Imperative of U.S. Trade Law Reform

By
Daniel J. Ikenson

Earlier this year, the Cato Institute published this paper, which describes the self-flagellating nature of the U.S. antidumping law. Nearly 80 percent of all U.S. antidumping measures imposed between 2000 and 2009 (130 of 164 measures) restrict imports of intermediate goods—inputs required by U.S. producers for their own production processes.

Antidumping duties on magnesium, polyvinyl chloride, and hot-rolled steel, for example, enable petitioning U.S. companies that often dominate domestic supply of raw materials to foreclose alternative sources and then thrust higher prices on their U.S. customers. But those customers—U.S. producers of auto parts, paint, and appliances—who consume the now-restricted raw materials to produce higher value-added goods and who might otherwise create jobs, are instead made less profitable and less competitive, burdening the broader economy.

But here’s the kicker. The statute itself forbids the administering authorities from considering the economic impact of antidumping restrictions on those firms or on the economy at large. The well-being of the petitioning industry is all that matters and the collateral damage to downstream industries and the overall economy is to be ignored.

Now, the high-profile antidumping and countervailing duty cases recently initiated against solar panels from China are shining some fresh light on this outrage. A group called the Coalition for Affordable Solar Energy (CASE), which represents the portion of the U.S. solar industry that is downstream of the solar panel producers (the producers’ customers), is asking the cases be dropped or settled. CASE, representing 145 member companies that employ over 14,000 workers in solar project development, logistics, construction, and installation, argues:

The severe tariffs [being sought] would have a very damaging effect on the solar industry in the United States and would fundamentally undermine many years of effort by all of us who care about the future of solar power …

In simple dollar terms, [the] petition threatens the planned installation of solar electric power systems in the amount of $11 billion in 2012 and the potential installation of $60 billion currently in the total pipeline …

By asking government to interfere and artificially increase the price (equivalent to putting on a high tax) will only hinder the deployment, cost thousands of jobs … and further negatively impact an already shaky economy.

There is no good reason for arguments like these—and the facts supporting them—to be ignored in trade remedies cases. Several other major countries that have antidumping and countervailing duty laws on their books employ a so-called public interest provision that directs the authorities to deny duties when the likely costs are demonstrated to exceed any benefits to the petitioning industry. (See page 18 for an elaboration.)

It is difficult to fathom how an administration that begs U.S. businesses to invest and hire would not be pushing hard for this particular reform. After all, the administration acknowledges the importance of ensuring downstream producers have access to imported inputs. The Office of the U.S. Trade Representative has argued this point in its complaint against Chinese export restrictions at the World Trade Organization. And the president himself described how the competitiveness of U.S. firms is hurt by restrictions on imported inputs when he signed into law the Manufacturer’s Enhancement Act last year.

But then again, incongruities in this administration’s economic policies seem to be the rule, not the exception. In the solar panel case, the president has offered his rhetorical support (at least) to the petitioners, even though their success would drive up the cost of already-too-expensive solar power, reducing demand for an energy source the president has been advocating and subsidizing with the incentive of 30 percent tax credits.

I suppose the White House has determined that the cost of import duties—to consumers up front and to taxpayers through the a much higher tax credit—is worth the benefit of having a Chinese scapegoat to take the heat off the president for Solyndra’s failure.

Topics: 
Trade and Immigration

Withholding Scientific Data: Good Idea or Not?

By
Jim Harper

Should information be withheld from academic journals because of the potential that it might fall into the hands of terrorists? The National Science Advisory Board for Biosecurity (NSABB) has asked the journals Science and Nature to keep certain details out of reports they intend to publish about experiments that produced a human-transmissible version of a flu virus that is deadly about 50 percent of the time.

The NSABB said conclusions should be published, but not “experimental details and mutation data that would enable replication of the experiments.” This government panel has not sought to ban the release this information, so we’re not talking about formal censorship, but the request is at an early point on the censorship continuum.

It would seem that withholding this information from academic journals might do some good. But the limiting factor on production of a newly transmissible virus is training in virology (or whatever) and access to the equipment that allows such work to be done—not access to data about the technique used in these experiments. Whether it’s published in these journals or not, a criminal/terrorist virologist would probably be able to access the data using the subterfuge of having a genuine scientific interest.

So, to stop terrorists accessing bioweapons do we limit training in virology? Control laboratory equipment as dual-use civilian/military technology? No, because the massive weight of training and equipment—something approaching, if not actually, 100 percent—will go to people who will use these things to make us safer, even if a one-off tries to use virology skills to make us unsafe.

It’s a close call, and I’m not entirely certain about what I’ve just said, but this is a more difficult logic puzzle than most people think. Given the overwhelming majority of good people using information for good, diffusion of information will almost always be good. I doubt that the NSABB has sufficiently considered the costs of withholding information about the modified virus from people who would use that information to secure against its modification by whatever invention they bring to bear. (I can’t cite the invention because it hasn’t been invented yet!)

This is akin to the gun control issue. Consensus goes against guns because they make a loud bang and often draw blood when they’re used harmfully, but they are utterly silent in their beneficial use of deterring crime and violence, which is what they do the vast majority of the time. The idea of a massive epidemic strikes our primal imaginations with fear, while the notion of scientists converting diffuse knowledge into security against epidimics is a somber intellectual exercise.

Speaking of imagination, the idea of the terrorist super-villain is widespread, but imaginary. It’s important to remember that the 9/11 terrorists had box cutters. They had no idea their attack would produce the collapse of the twin towers, though many people reasoned backwards from that devastation to give them sophistication (and motivations) they didn’t actually have. It’s our psychology/imagination that gave terrorists access to chem/bio/rad/super-weapons over the last decade, a notion that almost certainly infects the considerations of the NSABB.

It’s probably a mistake to withhold scientific data from publication. We’re rather more safe from the threat of biological terrorism than most people think, and we’d get marginally safer from having information about virus experiments easily available to any researcher who might use it to discover ways of making us even safer.

(Related: Milton Leitenberg of the University of Maryland’s Center for International and Security Studies has a great contrarian piece in the Cato book Terrorizing Ourselves about the counterproductive mania around bioweapons, though his points don’t easily sync up with what I’ve said here.)

Topics: 
Cato Publications, Foreign Policy and National Security, Telecom, Internet & Information Policy

Truth in Budget Reporting

By
David Boaz

Newspaper articles on government budgets virtually never tell the reader the two most important facts: What was the budget last year, and what is it this year? Instead, the typical budget article trumpets “cuts” and “austerity,” and never actually mentions that the budget is going up by four percent, or six percent, or nine percent in the coming year. So two cheers to the Washington Post for its article on Virginia governor Robert McDonnell’s proposed budget, which does—eventually—give you most of that information. Still, the second paragraph (and second sentence) of the article says that McDonnell “proposed saving nearly $1 billion in a variety of ways.”

You have to wait for the seventh paragraph, on the jump page, before you find out that the proposed budget amounts to $85 billion over two years.  And only in the 20th of 25 paragraphs do you find out that

The two-year budget, which begins July 2012, will be the largest spending plan in Virginia history, growing by about $7 billion.

So two cheers for giving the facts, even if the lead of the story might have led some readers to think that McDonnell was cutting $1 billion from the state’s budget. And three cheers for Steve Contorno of the Washington Examiner, who put the basic facts clearly in the third paragraph (and third sentence) of his article:

In an hour-long address to the General Assembly’s budget committees, McDonnell laid out an $85 billion spending plan through June 30, 2014, up from $79 billion in 2010-2012.

Please, reporters: when you write about a city, state, or federal budget, please tell us readers and taxpayers how much the budget actually is, and how much it will be next year. With that information, we can figure out for ourselves whether it involves cuts or not.

Topics: 
General, Tax and Budget Policy

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