Archives: 02/2012

Earmarks are a Symptom of the Problem

A Washington Post investigation identified dozens of examples of federal policymakers directing federal dollars to projects that benefited their property or an immediate family member. Members of Congress have been enriching themselves at taxpayer expense? In other news, the sun rose this morning.

According to the Post, “Under the ethics rules Congress has written for itself, this is both legal and undisclosed”:

By design, ethics rules governing Congress are intended to preserve the freedom of members to direct federal spending in their districts, a process known as earmarking. Such spending has long been cloaked in secrecy and only in recent years has been subjected to more transparency. Although Congress has imposed numerous conflict-of-interest rules on federal agencies and private businesses, the rules it has set for itself are far more permissive.

Lawmakers are required to certify that they do not have a financial stake in the actions they take. In the cases The Post examined, not one lawmaker mentioned that he or she owned property that was near the earmarked project or had a relative who was employed by the company or institution that received the earmark. The reason: Nothing in congressional rules requires them to do so, and the rules do not address proximity.

With the fox guarding the henhouse, the most one can hope to accomplish is to limit the carnage. Many pundits, politicians, and policy wonks argue that a permanent ban on earmarks would be an effective limit. Unfortunately, that’s just wishful thinking as earmarks are merely a symptom of the real problem: Congress can spend other peoples’ money on virtually anything it wants.

Take the example of Rep. Candace Miller (R-MI):

In Harrison Township, Mich., Rep. Candice S. Miller’s home is on the banks of the Clinton River, about 900 feet downstream of the Bridgeview Bridge. The Republican lawmaker said when she learned local officials were going to replace the aging bridge, she decided to make sure the new one had a bike lane.

“I told the road commission, ‘I am going to try to get an earmark for the bike path,’” Miller said, recalling that she said, “If we don’t put a bike path on there while you guys are reconstructing the bridge, it will never happen.”

A member of the House Transportation Committee, Miller in 2006 was able to secure a $486,000 earmark that helped add a 14-foot-wide bike lane to the new bridge. That lane is a critical link in the many miles of bike paths that Miller has championed over the years. When the bridge had its grand reopening in 2009, Miller walked over from her home.

“People earmark for all kinds of things,” she said. “I’m pretty proud of this; I think I did what my people wanted. Should I have told them, ‘We can never have this bike path complete because I happen to live by one section of it’? They would have thrown me out of office.”

Forget how the federal money made it to Harrison Township, Michigan. As I’ve discussed before, the more important concern is that the federal government is funding countless activities that are not properly its domain:

There just isn’t much difference between the activities funded via earmarking and the activities funded by standard bureaucratic processes. The means are different, but the ends are typically the same: federal taxpayers paying for parochial benefits that are properly the domain of state and local governments, or preferably, the private sector. As a federal taxpayer, I’m no better off if the U.S. Dept. of Transportation decides to fund a bridge in Alaska or if Alaska’s congressional delegation instructs the DOT to fund the bridge.

As a taxpayer, it disgusts me that Rep. Miller steered federal dollars to a project in her district that she personally benefited from. But would I be any better off had the money for a bike path in Harrison Township, Michigan come from a grant awarded by the Department of Transportation?

If Harrison Township wanted a bike path, then it should have been paid for with taxes collected by the appropriate unit of local government. Better yet, a private group could have raised the funds. Either way, I don’t see how it’s possible to argue that the U.S. Constitution gives Congress the authority to spend taxpayer money on such activities. Invoking the General Welfare Clause doesn’t pass the laugh test as the bike path obviously doesn’t benefit the rest of the country. The Commerce Clause? Please.

For more on why the federal government should stop subsidizing activities that are properly the domain of the state and local government, see this Cato essay on fiscal federalism.

Libya Begets Syria?

A little over a year ago, as members of the Obama administration were pondering military intervention in Libya, skeptics (including The Skeptics) pressed them to explain how that situation differed from other comparable cases elsewhere in the world. If Libya, why not Yemen? Why not Bahrain? Why not Syria? We may soon learn the answer to that last question. And their too-permissive—or merely haphazard—approach a year ago might pave the way for an intervention in Syria that would be ill-advised, if not disastrous.

At the time of the Libya debate (to the extent that there was one), the president and his foreign-policy advisers dismissed concerns that the intervention in Libya would set a precedent. “It is true that America cannot use our military wherever repression occurs,” President Obama said in a televised speech to the nation on March 28, 2011. But, he continued:

that cannot be an argument for never acting on behalf of what’s right. In this particular country—Libya—at this particular moment, we were faced with the prospect of violence on a horrific scale… To brush aside America’s responsibility as a leader and, more profoundly, our responsibilities to our fellow human beings under such circumstances would have been a betrayal of who we are.

At other times, the administration alluded to a loose set of guidelines to explain why it might choose to use force, guidelines which the Libya case met but other cases supposedly did not. These included the likelihood that a large-scale loss of life was imminent; the belief that prompt military action would prevent this violence; and the support of the international community, ideally a formal sanction in the UNSC (absent that, the approval of a regional body, such as the Arab League, might suffice).

Notably absent was sufficient consideration of whether our vital strategic interests were at stake. They were not in Libya, and they are not in Syria.

We should strive to avoid foreign intervention in all but very rare cases. Because getting in is always much easier than getting out, the burden of proof must always be on those making the case for war, not those advising against.

Beyond that, we must know what mission the U.S. military has been tasked with performing. We must have a reasonable estimate of the likelihood that it will achieve its mission. And we must have some sense of the likely costs in blood and treasure. Finally, we are a nation of laws, not of men—and decidedly not of one man. The president has very little authority to send troops into harm’s way, and he has none when U.S. security is not at stake (a criteria that Barack Obama endorsed as a senator but abandoned when he assumed a higher office). If the Obama administration is considering military action to remove Bashar al-Assad from power in Syria, it should obtain formal congressional authorization for such action. And it should do that before going to the United Nations.

No other country is afforded such choices. No other country is able to project power over great distances and on very short notice. No other country has a track record of frequent foreign intervention, even when such operations have no direct connection to advancing our own security. This pattern of behavior constitutes our unique power problem. It is precisely because the United States has used force on numerous occasions over the past two decades that we need a particularly stringent set of criteria governing our future interventions. There is an almost endless parade of aggrieved parties calling on Uncle Sam to save them from harm. And when Washington refuses, or merely drags its heels, they will say: You fought to save Muslims in Bosnia and Kosovo, why do you then refuse to aid Muslims in Northern Africa or the Levant? The United States must have a ready answer.

But the Obama administration, cheered on or goaded by liberal and neoconservative hawks, does not have one. Yet. And its halting signals are likely to embolden those calling for yet another war.

Cross-posted from the Skeptics at the National Interest.

Milwaukee Man Shoots Armed Robber

A Milwaukee man only recently acquired his permit to carry a concealed handgun and then found himself in the middle of an armed robbery.   As the robber threatened a store clerk with a shotgun, the permit holder was able to draw his weapon and shoot the culprit.  The Milwaukee District Attorney said: “He disrupted an act that potentially exposed himself and others to great bodily harm.”

Last week, Cato released a new study concerning the frequency with which citizens use guns in self-defense, along with a map to track such events.  We’ve already received many suggestions from readers all over the web and we’ll be updating our map regularly.

(H/T Ann Althouse)

Acting as the Typhoid Mary of the Global Economy, the OECD Urges Higher Taxes in Latin America

Is it April Fool’s Day? Has somebody in Paris hacked the website at the Organization for Economic Cooperation and Development? Have we been transported to a parallel dimension where up is down and black is white?

Please forgive all these questions. I’m trying to figure out why any organization—even a leftist bureaucracy such as the OECD—would send out a press release entitled, “Rising tax revenues: a key to economic development in Latin American countries.”

Not even Keynesians, after all, think higher taxes are a recipe for growth.

Ah, never mind. I just remembered that the OECD is a hotbed of statism, so the press release makes perfect sense. After all, the U.S.-taxpayer-funded organization has become infamous for reflexively advocating big government.

With this dismal track record, it’s hardly a surprise that the Paris-based bureaucracy is now pushing to undermine prosperity in Latin America. Here’s some of what the OECD said in its release.

Additional tax revenues enable governments to simultaneously improve their competitiveness and promote social cohesion through increased spending on education, infrastructure and innovation. Latin American countries have made great strides over the past two decades in raising tax revenues.

You won’t be surprised when I tell you that the Paris-based bureaucrats do not bother to provide even the tiniest shred of proof to support the silly claim that higher taxes improve competitiveness. But that shouldn’t be surprising since even Keynesians don’t believe something that absurd.

And the claim about social cohesion also is a bit of a stretch given the riots, chaos, and social disarray in many European nations.

The only accurate part of the passage is that Latin American nations have increased tax burdens over the past 20 years. To the tax-free bureaucrats at the OECD, that is making “great strides.”

Let’s see what else the OECD had to say.

Despite these improvements, significant gaps between Latin America and OECD countries remain. The average tax to GDP ratio in OECD countries is much higher than in Latin American countries (33.8% compared to 19.2% in 2009, respectively). As the countries in the region still find themselves in relatively strong economic conditions, now is the time to consider reforms that generate long-term, stable resources for governments to finance development.

Wow. The OECD is implying that Latin American nations should mimic OECD nations. In other words, the bureaucrats in Paris apparently think it makes sense to tell nations to copy the failed high-tax, welfare-state model of countries such as Greece, Italy, and Spain.

Is that really the lesson they think people should learn from recent fiscal history? Are they really so oblivious and/or blinded by ideology that they issued the release as these European nations are in the middle of a fiscal crisis?

To further demonstrate their bias, the folks at the OECD even acknowledged that the Latin American nations, with their less oppressive tax regimes, are enjoying “relatively strong economic conditions.” Normal people would therefore conclude that the failed high-tax European nation should copy Latin America on fiscal policy, not the other way around. But not the geniuses at the OECD.

Now that we’ve addressed the awful policy advice of the OECD, let’s take a moment to look at the real policy challenges facing Latin America.

The Fraser Institute, in cooperation with dozens of other research organizations around the world, produces every year a comprehensive survey measuring Economic Freedom of the World.

The report ranks 141 nations based on dozens of variables that are used to construct scores for five key measures of economic freedom. Of those five categories, the Latin nations have the highest average ranking on…you guessed it…fiscal policy.

Yet the OECD wants policies that will undermine the competitiveness of the Latin nations, hurting them in the area where they are doing a halfway decent job.

If the bureaucrats actually wanted to boost economic performance in Latin America, they would be pressuring those nations to make reforms in the two areas where the burden of government is most severe—legal structure/property rights and regulation.

But that would make sense, which is contrary to the OECD’s mission of promoting statism.

The only semi-positive thing to say about the OECD is that it is consistent. As this video explains, the Paris-based bureaucrats are advocating bigger government in the United States. And to add insult to injury, they’re using American tax dollars to push that agenda.

What a scam. Politicians from various nations send taxpayer money to Paris. The bureaucrats at the OECD then issue reports and studies saying the politicians in those countries should raise taxes and increase the burden of government. Everybody wins…except for taxpayers and the global economy.

Per dollar spent, OECD subsidies may be the most destructively wasteful part of the federal budget. And that says a lot.

Cardless National ID and the E-Verify Rebellion

New Hampshire was the state where the “REAL ID rebellion” got its start. There, in 2006, Rep. Neal Kurk (R-Weare) took to the floor of the New Hampshire House to talk about his principled opposition to the federal national ID law.

In stirring words, Kurk urged his colleagues to overturn a committee recommendation that no action should be taken on his bill to have New Hampshire reject REAL ID. The House went on to pass his bill and half the states in the nation soon followed suit.

Now a bill pending in the New Hampshire House responds to a more insidious version of the federal government’s national ID plans: E-Verify.

E-Verify is a federal background check system that its proponents intend to be used on every person seeking work in the United States. Once in place, E-Verify would expand to new uses, giving the federal government direct regulatory control of all Americans’ lives through control of proof of identity. It’s being fitted to operate using only databases, so I’ve been referring to it as a “cardless national ID.”

New Hampshire Rep. Seth Cohn (R-Merrimack 6) has introduced a bill to prevent his state from contributing New Hampshirites’ personal data to the E-Verify system. HB 1549 would not only prohibit the state from allowing citizens’ personal data to be used in E-Verify. It would prohibit the state from requiring employers to participate in the E-Verify system.

It’s an appropriate response to the Department of Homeland Security’s latest move. You see, a branch of E-Verify is called the “RIDE” program. That stands for “Records and Information from Department of Motor Vehicles for E-Verify” (Yeah, it’s a stretch…) Basically, RIDE is the conduit through which the states are going to start passing data to the federal government, weaving together that national ID outside of the REAL ID Act.

In their desire to bring illegal immigration under control, a lot of people have convinced themselves over many years that growing the federal government and conscripting businesses into “internal enforcement” of immigration law was the way to go. Unfortunately, that route costs a lot of money, it bloats the federal government, and it requires a national ID system, which is a threat to liberty that Americans reject. My paper, “Franz Kafka’s Solution to Illegal Immigration,” goes through many of the details.

Is this the beginning of the E-Verify rebellion? It’s a welcome addition to the national debate from the “Live Free or Die” state.

E.J. Dionne on Campaign Finance as Class Warfare

E.J. Dionne was in high dudgeon at the Washington Post this morning over Citizens United, the Supreme Court’s January 2010 campaign finance decision that ever since has driven the Left into fits of apoplexy. Taking his cue from Obama’s infamous State-of-the-Union condemnation of the Court shortly after the decision came down, plus the class warfare meme at the core of Obama’s reelection campaign, Dionne attacks not only the Court’s wisdom but its motives:

A more troubling interpretation [than “naiveté”] is that a conservative majority knew exactly what it was doing: that it set out to remake our political system by fiat in order to strengthen the hand of corporations and the wealthy. Seen this way, Citizens United was an attempt by five justices to push future electoral outcomes in a direction that would entrench their approach to governance.

Indeed, the Court’s decision “should be seen as part of a larger initiative by moneyed conservatives to rig the electoral system against their opponents,” Dionne continues. Pointing to recent state legislation aimed at ensuring electoral integrity, such as voter ID laws, he charges that “conservatives are strengthening the hand of the rich at one end of the system and weakening the voting power of the poor at the other.”

Reading this screed you’d think that the moneyed classes, including corporations, were all on the Right. Yet as the Post itself reported last fall, “despite frosty relations with the titans of Wall Street, President Obama has still managed to raise far more money this year from the financial and banking sector than Mitt Romney or any other Republican presidential candidate.” Indeed, “Obama has outdone Romney on his own turf, collecting $76,600 from Bain Capital employees through September – and he needed only three donors to do it.”

So let’s get that white-hat/black-hat silliness out of the way and turn to the charge that the Court “set out to remake our political system by fiat.” The charge, if you read the majority’s opinion, is preposterous on its face. Only Justice Stevens has clung to the idea that money is not speech. (Want proof that it is? How much speech have you heard from the presidential campaign of former Louisiana Governor Buddy Roemer, who accepts no contributions over $100?) Well if money is speech, then the First Amendment tells us, straightforwardly, that “Congress shall make no law abridging the freedom of speech.”

Regrettably, despite that simple imperative, the Court has allowed numerous restrictions on the contributions side of the campaign finance ledger. But in Citizens United it opened the door to those who speak through their corporations or unions (the Left’s outrage is directed only to the corporations side of the decision, of course), provided the spending is not coordinated with the candidate. Thus, far from having torn down “a century’s worth of law” – Dionne alludes to the 1907 Tillman Act, which banned corporations from giving directly to candidates – Citizens United simply repealed a provision of the 1947 Taft-Hartley Act that prohibited corporate and union expenditures on independent, non-candidate coordinated campaigns.

But Dionne’s confusion doesn’t end there. Like almost every other Leftist, he attributes the rise of super PACs, his main target, to the decision in Citizens United. But it was the March 2010 DC Circuit’s decision in Speech Now v. FEC that brought about those entities. And almost all super PACs are funded by individuals, not corporations or unions. What Speech Now did was lift the ban on individual contributions of more than $5,000 when individuals get together to speak through Political Action Committees that are independent of candidates.

Dionne abhors those PACs, of course. So do the candidates, because they have no control over what “their” PACs say. (“Save me from my friends!”) Far better it would be if contributors were able to give directly to a candidate’s campaign. This is a big country, with over 300 million people and millions of corporations and unions. Are we really to believe, with so many potential contributors, that candidates for federal office would be easily bought and sold if that were allowed? Well in states with few campaign finance restrictions for state offices – where the number of potential contributors is substantially smaller – the evidence simply does not support the wild charges of corruption that so animate the Dionnes of the world. But what is evidence when your real agenda is class warfare?