Archives: 08/2012

Cybersecurity Improves No Matter What Congress Does

The Hill’s “Hillicon Valley” blog reported late Wednesday that cybersecurity legislation was likely to fail in the Senate today.

The post, originally titled “Cybersecurity Act Expected to Crash and Burn in Senate,” indulged in some typical Washington, D.C. conceit: “The Senate’s cybersecurity bill is likely to go down in defeat on Thursday,” it said, “ending any hope of passing a measure by the end of the year to protect America’s networks.”

It is highly arguable, the question whether cybersecurity legislation would protect America’s networks. Doing so is the responsibility of the owners and operators of those networks (and all other communications and computing infrastructure). They are working all the time on protecting their assets, and their capacities to do so are constantly improving.

Yes, attacks on computing are improving, too, but there is little substantiated evidence (the fear-mongering of government officials and contractors is not substantiated) that the bad guys are getting the upper hand.

The Scylla and Charybdis Senate leaders appear to have been navigating was between a bill that was too regulatory, swamping American tech companies and “critical infrastructure” providers with deadening regulation, and, on the other hand, a bill that tapped too deeply into Americans’ communications and data. I’m happy—and feel quite safe—with cybersecurity legislation breaking up on the shoals or getting sucked down into a whirlpool, either one.

It’s possible, of course, that Senate leaders could arrive at a last-minute compromise—they’ll come forth extolling their own heroism for doing so. It’s very likely that the next Congress will return with undiminished hubris to the idea that the federal government can and should secure our computers, networks, and data. But it’s not true. That is the responsibility, and far more within the capability, of the private-sector owners of the nation’s digital infrastructure.

Nothing in this post should diminish the importance of cybersecurity. It is indeed hundreds or thousands of different problems that will be addressed by manifold actors various ways over coming decades. The government has a role in cybersecurity: getting and keeping its own house in order. But the majority of the problem is ours, not the government’s, and we are slowly, surely taking care of it.

The U.S. Postal Service and the Constitution

If my inbox is any indication, a lot of Americans apparently believe that an amendment to the Constitution would be necessary to privatize the U.S. Postal Service. That is simply not true.

Article 1, Section 8 says that [The Congress shall have the power] to establish Post Offices and Post Roads. It does not say that the federal government shall have the exclusive power to deliver mail. Nor does it require that the mail be delivered by an agent of the federal government to every home in the country, six days a week.

In a 1996 Cato book, The Last Monopoly, James I. Campbell writes the following in a chapter on the history of postal monopoly law:

The U.S. Constitution, in 1789, authorized Congress to establish “Post Offices and post Roads” but, unlike the Articles of Confederation, did not explicitly establish an exclusive monopoly. The first substantive postal law, enacted in 1792, listed post roads to be established, reflecting the traditional concept of postal service as a long-distance transport. It authorized the Postmaster General to enter into contracts for the carriage of “letters, newspapers, and packets” but limited the postal monopoly to “letter or letters, packet or packets, other than newspapers.”

According to Campbell, the Post Office “first began delivery of mail to a small portion of the U.S. population” in 1863:

Until the Postal Act of 1863, the Post Office remained essentially a contracting office for intercity transportation services. In fiscal 1862, costs of intercity and foreign transportation constituted 63 percent of all expenses. Before 1863, intercity letters were either held at the destination post office for collection or delivered by a “letter carrier” who acted as independent contractor and charged the addressee two cents, one of which went to the Post Office.

Then there’s the issue of intracity mail delivery:

A person could drop letters at a post for delivery by a letter carrier within the same city, but that was a secondary service as far as the Post Office was concerned; even after the 1863 act, such “drop letters” were considered “not transmitted in the mails of the United States.”

Delivery of local, intracity letters was pioneered by private companies such as Boyd’s Despatch in New York City and Blood’s Despatch in Philadelphia. One authority counted 147 private local postal companies. The “locals” introduced adhesive postage stamps at least as early as 1841. The Post Office did not introduce stamps until 1847 and did not require their use until 1851. Efforts by the Post Office to suppress the locals failed when, in 1860, a federal court ruled that the postal monopoly pertained only to the transportation of letters over “post roads” between post offices and did not prohibit the delivery of letters within a single postal district.

The Postal Code of 1872 extended the postal monopoly to the delivery of local letters.

The Illegal IRS Rule to Increase Taxes & Spending under ObamaCare: Our Response to Timothy Jost

Jonathan Adler and I have a post at the at the Health Affairs blog where we respond to Timothy Jost’s critique of our working paper, “Taxation without Representation: the Illegal IRS Rule to Expand Tax Credits under the PPACA.” Jost has been our most tenacious (if not most consistent) critic.

Here’s an excerpt. Keep in mind that although we say “tax credits,” government spending accounts for about 80 percent of the money involved. Which is a lot: the cost of this illegal IRS rule could be in the hundreds of billions of dollars.

The dispute is over whether the [Patient Protection and Affordable Care] Act authorizes the IRS to provide tax credits only in Exchanges established by states (under Section 1311) or also in Exchanges established by the federal government (under Section 1321). Three facts are key to this dispute.

First, both sides acknowledge that the statutory language governing eligibility for tax credits is clear and unambiguous. The Act provides that taxpayers are eligible for tax credits if they purchase a health plan through “an Exchange established by the State under section 1311.” That language clearly authorizes tax credits only in state-established Exchanges, and the Act employs or refers to that language no less than six times when authorizing tax credits. There is no parallel language anywhere in the statute authorizing the IRS to offer tax credits through federal Exchanges established under Section 1321.

Second, there is nothing in the statute that conflicts with the plain meaning of that language. Indeed, the rest of the statute supports that plain meaning. Nor has anyone identified anything in the law’s legislative history that conflicts with that language. The only statement anyone has found on this point shows the statutory language was intentional. During congressional debate, the bill’s lead author, Senate Finance Committee chairman Max Baucus (D-MT), explained that the bill conditions tax credits on the establishment of a state-run Exchange.

Third, even though some members of Congress and the President might have preferred a law that authorized tax credits in federal Exchanges, they nevertheless enacted a law that did not. Many advocates of health care reform urged passage of the Senate bill even though there were parts of the bill they did not like, and knowing full well that not all defects could or would be fixed through the reconciliation process. Congress amended the sections of the Senate bill that authorize tax credits and cost-sharing subsidies a total of 12 times through the reconciliation process, but left the language limiting tax credits to state-established Exchanges undisturbed. Again, many of those amendments support the clear meaning of that language, and none of them conflict with it.

And yet, in late May the IRS finalized a rule that will issue tax credits—and therefore will trigger cost-sharing subsidies and employer-mandate penalties—through federal Exchanges, contrary to the plain language of the statute. It is our contention that this rule is illegal.

We invite everyone to read our working paper alongside Jost’s post, and our reply, and to decide for themselves whether the IRS is breaking the law.

You can also watch Jost and me testify before Congress on the IRS rule tomorrow at 9am ET in room 2154 of the Rayburn House Office Building.

Felipe Calderón’s Arrogant Call for U.S. Gun Control

The blood had barely dried in the tragic Aurora, Colorado, shooting before Mexican President Felipe Calderon put the blame on permissive U.S. gun laws. In a post on his Twitter account, Calderon offered his condolences to the victims, but then added that the incident showed that  “the American Congress must review its mistaken legislation on guns. It’s doing damage to us all.”

It was hardly a new theme from Mexico’s lame-duck president. But his latest statement requires an extraordinary amount of gall. During Calderon’s presidency, more than 50,000 of his people have died in the war on drugs that he chose to escalate. A foreign leader with that awful of a track record daring to lecture the United States on its policies regarding  firearms is not likely to sit well with most Americans.

But Calderon has repeatedly blamed U.S. gun laws rather than his decision to launch a military-led offensive against the drug cartels for the resulting violence in his country. The Mexican government even posted a massive sign on the border with the United States between Ciudad Juarez and El Paso reading “No More Weapons!” The sign was made from recycled guns seized by Mexican security forces.

But the location of that sign undercuts Calderon’s own argument. Juarez has been for the past five years the epicenter of gun violence in Mexico. Yet El Paso has a very low violent crime rate. If “lax” U.S. gun laws were the cause of the carnage in Juarez, wouldn’t El Paso also be awash in blood? Some other factor must account for the extraordinary violence south of the border.

Extensive research on restrictive gun laws in both U.S. and foreign jurisdictions shows no correlation between tough laws and a decline in homicides and other crimes. Mexico’s own experience confirms that point. Following sometimes violent radical leftist challenges to the government in the late 1960s, Mexico enacted some of the strictest gun-control measures in the world. Today, it is nearly impossible for a civilian to legally possess a handgun or rifle in that country. Yet such tough restrictions have done nothing to disarm the drug gangs. In fact, those measures may have made it easier for cartel enforcers to terrorize portions of the country, since they don’t have to worry much about law-abiding civilians being armed and able to defend themselves and their families.

Conversely, the trend over the past decade or so in various jurisdictions throughout the United States toward conceal-carry and other permissive policies regarding firearms has not produced the surge of killings that gun control zealots predicted. To the contrary, the rates of homicides and other violent crimes in most of those jurisdictions have actually gone down.

Calderon should have had the decency not to exploit the Aurora tragedy to push his misguided gun control agenda for the United States. During his remaining months in office, he should instead focus on easing the suffering that his policies have caused in his own country.

Cross-posted from the Skeptics at the National Interest.

International Data on Living Standards Show that the United States Should Not Become More Like Europe

I’m not a big fan on international bureaucracies, particularly the Paris-based Organization for Economic Cooperation and Development. The OECD, funded by American tax dollars, has become infamous for its support of statist pro-Obama policies.

But I’m a policy wonk, so I’ll admit that I often utilize certain OECD’s statistics. After all, if numbers from a left-wing organization help to advance the cause of liberty, that makes it harder for opponents to counter our arguments.

With that being said, let’s look at some truly remarkable statistics from the OECD website on comparative living standards in industrialized nations. This chart shows average levels of individual consumption (AIC) for 31 OECD countries. There are several possible measures of prosperity, including per-capita GDP. All are useful, but AIC is thought to best capture the well-being of a people.

As you can see from this chart, the United States ranks far ahead of other nations. The only countries that are even close are Norway, which is a special case because of oil wealth, and Luxembourg, which also is an outlier because it is a tiny nation that also serves as a tax haven (a very admirable policy, to be sure).

At the risk of making an understatement, this data screams, “THE U.S. SHOULD NOT BECOME MORE LIKE EUROPE.”

For all intents and purposes, Americans are about 40 percent better off than their European counterparts, in part because we have less government and more economic freedom.

Yet Obama, with his plans to exacerbate class-warfare taxation and further expand the burden of government spending, wants America to be more like nations that have lower living standards.

And don’t forget European living standards will presumably fall even further - relative to the U.S. - as the fiscal crisis in nations such as Greece, Spain, and Italy spreads to other welfare states such as France and Belgium

Here’s another chart that looks at the G-7 nations. Once again, the gap between the U.S. and the rest of the world is remarkable.

Maybe, just maybe, the United States should try to copy nations that are doing better, not ones that are doing worse. Hong Kong and Singapore come to mind.

Getting there is simple. Just reduce the size and scope of government.

It’s the Message, Stupid

Today POLITICO Arena asks:

Senator Marco Rubio, Governors Susana Martinez and Brian Sandoval, and now Ted Cruz’s victory yesterday, all Republicans:  Are Democrats mishandling minority recruitment efforts?

My response:

Ted Cruz’s victory yesterday over Lt. Gov. David Dewhurst was no fluke. Dewhurst represented the GOP establishment, which stands for little but staying in office, whereas Cruz, an educated and articulate young voice, spoke about liberty and opportunity under limited constitutional government. That’s the same message we hear from Marco Rubio, Susana Martinez, and Brian Sandoval.

Like the Republican establishment, therefore, Democrats, with their paucity of attractive Latino politicians, aren’t so much mishandling their minority recruitment efforts as mishandling their message. Prospective minority candidates need a vision that resonates, not the vision the Democratic establishment is selling. Latinos are no different than others: They want a life of opportunity, not a life of dependence on government. Who wants to live the “Life of Julia”?