Archives: 10/2012

Here’s Your Answer, Governor Martinez

New Mexico’s Governor, Susana Martinez (R), wrote a letter to DHS Secretary Janet Napolitano last week asking for assurance that implementation of our national ID law, the REAL ID Act, will not be pushed back again beyond the upcoming January 15, 2013 deadline. Here’s your answer, Governor Martinez.

Congress passed REAL ID in 2005 as an attachment to a military spending bill. The law never had a hearing in the House or Senate.

In 2006, the policy of having a national ID implemented by states was beginning to sink in, and in April of that year, Representative Neal Kurk, a Republican from Weare, New Hampshire, spoke eloquently against REAL ID, saying:

I don’t believe that the people of New Hampshire elected us to help the federal government create a national identification card. We care more for our liberties than to meekly hand over to the federal government the potential to enumerate, track, identify, and eventually control.

Thus began the “REAL ID Rebellion.”

It wasn’t the U.S. Congress that had the first hearing on REAL ID. It was the New Mexico legislature in September 2006.

A year and a half after the law passed, New Mexico legislators heard about the costs and consequences of having a national ID. The Wall Street Journal dubbed the federal policy “Real Bad ID” the next month.

In 2007, states across the country started passing legislation barring themselves from complying with REAL ID and denouncing the law. By 2009, half the states in the country would say “NO” to REAL ID.

The law had a three-year implementation schedule, meaning states were supposed to start issuing national IDs in March 2008. But about a year before the deadline, then-Secretary of Homeland Security Michael Chertoff announced in conjunction with the release of draft implementation rules that the Department would grant extensions to all States requesting them. The final deadline for compliance was now going to be December 31, 2009.

The DHS didn’t come out with standards for REAL ID until January 2008, just months from the original May 2008 statutory deadline. DHS pushed the deadline for extension requests, which hadn’t come in, to March 31, 2008. The December 31, 2009 deadline that DHS had earlier announced became an “initial” deadline, with a later “real” deadline of October 11, 2009 for states that achieved “certain milestones.”

When the March 31, 2008 deadline for extension requests came, the states were not forthcoming with them. Montana notified the DHS that was not going to comply with the REAL ID Act, ever. The DHS saw the writing on the wall and treated that notification as a request for an extension—and granted it.

The Missoulian reported “Montana Wins REAL ID Standoff.” New Hampshire won, too. And so did South Carolina.

By September 2009, several states were declining to ask for a second extension (with a showing of material compliance), so DHS kicked the deadline for extension requests down to December 2009. And in December 2009, with states still refusing compliance with REAL ID, the DHS stayed the compliance deadline “until further notice.”

In March of 2011, the DHS quietly extended the deadline again, this time to the current date of January 2013.

You can see the writing on the wall, Governor Martinez. The states are not going to implement REAL ID—not the ones that respect their place in our constitutional system, anyway. Accordingly, the DHS will—as it must—extend the deadline for REAL ID once again, as Congress continues its failure to do away with the moribund national ID.

Governor Martinez may see this as a way to score some points—a two-fer even. She can suggest that DHS Secretary is soft on security and she can use REAL ID in her push to restrict access to drivers’ licenses in her state.

But when Janet Napolitano extends the REAL ID deadline, she’ll be just as soft on security as her predecessor Michael Chertoff was. New Mexico is one of the few states that still uses drivers’ licenses to administer driving and doesn’t condition licensing on proving one’s citizenship or immigration status. If Governor Martinez wants to change that, investing New Mexicans in the national ID system as a byproduct of Congress’ failure to pass comprehensive immigration reform, that’s between her and her constituents.

No Matter How Hard He Tries, Obama Will Never Be as Bad as FDR

I’ve explained on many occasions that Franklin Roosevelt’s New Deal was bad news for the economy. The same can be said of Herbert Hoover’s policies, since he also expanded the burden of federal spending, raised tax rates, and increased government intervention.

So when I was specifically asked to take part in a symposium on Barack Obama, Franklin Roosevelt, and the New Deal, I quickly said yes.

I was asked to respond to this question: “Was that an FDR-Sized Stimulus?” Here’s some of what I wrote.

President Obama probably wants to be another FDR, and his policies share an ideological kinship with those that were imposed during the New Deal. But there’s really no comparing the 1930s and today. And that’s a good thing. As explained by Walter Williams and Thomas Sowell, President Roosevelt’s policies are increasingly understood to have had a negative impact on the American economy. …[W]hat should have been a routine or even serious recession became the Great Depression.

In other words, my assessment is that Obama is a Mini-Me version of FDR, which is a lot better (or, to be more accurate, less worse) than the real thing.

To be sure, Obama wants higher tax rates, and he has expanded government control over the economy. And the main achievement of his first year was the so-called stimulus, which was based on the same Keynesian theory that a nation can become richer by switching money from one pocket to another. …Obama did get his health plan through Congress, but its costs, fortunately, pale in comparison to Social Security and its $30 trillion long-run deficit. And the Dodd-Frank bailout bill is peanuts compared to all the intervention of Roosevelt’s New Deal. In other words, Obama’s policies have nudged the nation in the wrong direction and slowed economic growth. FDR, by contrast, dramatically expanded the burden of government and managed to keep us in a depression for a decade. So thank goodness Barack Obama is no Franklin Roosevelt.

The last sentence of the excerpt is a perfect summary of my remarks. I think Obama’s policies have been bad for the economy, but he has done far less damage than FDR because his policy mistakes have been much smaller.

Moreover, Obama has never proposed anything as crazy as FDR’s “Economic Bill of Rights.” As I pointed out in my article, this “would have created a massive entitlement state—putting America on a path to becoming a failed European welfare state a couple of decades before European governments made the same mistake.”

On the other hand, subsequent presidents did create that massive entitlement state and Obama added another straw to the camel’s back with Obamacare. And he is rigidly opposed to the entitlement reforms that would save America from becoming another Greece. So maybe I didn’t give him enough credit for being as bad as FDR.

P.S.: Here’s some 1930s economic humor, and it still applies today.

P.P.S.: The symposium also features an excellent contribution from Professor Lee Ohanian of UCLA.

And from the left, it’s interesting to see that Dean Baker of the Center for Economic and Policy Research basically agrees with me. But only in the sense that he also says Obama is a junior-sized version of FDR. Dean actually thinks Obama should have embraced his inner-FDR and wasted even more money on an even bigger so-called stimulus.

The Duration of Iran’s Hyperinflation?

Since I first estimated Iran’s hyperinflation at 69.6% per month, many people have asked, how long will it last? To answer that question, I have posted my “Hanke Chart of the Day” and will let the data speak for themselves.

 

On second thought, perhaps I should offer some “tweet-able”  hyperinflation-duration takeaways:

  • The average duration of hyperinflation is roughly 12 months.
  • The longest duration of hyperinflation is 58 months (4 years and 10 months), which occurred in Nicaragua from June 1986 until March 1991.
  • The shortest duration of hyperinflation is one month (see numbers 46-57).

When it comes to Iran and the probable duration of its hyperinflation, the specter of  “a horrible end” or “a horror without end” comes to mind.

For the latest news on Iran’s hyperinflation, follow my Twitter: @Steve_Hanke

Nobel Peace Prize to the EU Is a Farce

The Nobel Peace Prize Committee has awarded the 2012 Nobel Peace Prize to the European Union for “keeping peace in Europe.” The committee has now turned the award into a farce. But few people are laughing.

The Committee has ignored the important role that the North Atlantic Treaty Organization (NATO) and the United States have played in keeping Europe at peace throughout the Cold War. While it is true that the free trade agreements among the EU countries have led to more prosperity and cooperation, other EU initiatives have exacerbated Europe’s problems and ancient animosities.

Decision making in the EU lacks basic transparency and accountability. As shown by the Danish, French, Dutch, and Irish referenda, the EU has nothing but contempt for disagreement and opposition. The European common currency is in existential crisis. Periodic bailouts, which are needed to keep the eurozone together, have led to riots and loss of life. The EU today is deeply unpopular and distrusted. Corruption, scandals, and cynical abuses of power by EU officials are pervasive.

This is the troubling reality of the EU that should not be ignored. Unfortunately, the Nobel Peace Prize Committee has decided to look the other way.

Here is a related podcast.

2012 Vice Presidential Debate Live Blog

Join us Thursday, October 11th at 8:45 PM ET for live commentary during the debate between vice presidential candidates Paul Ryan and Joe Biden.

Tweet questions during the debate to the live blog participants below:

Follow the Twitter list of all live blog participants here. You can also join the conversation with the hashtag #VPDebate and by following @CatoInstitute and @CatoFP.

***UPDATE: Watch the full debate video here.***

Is Common Core about to Melt Down?

Is the national curriculum standards debate about to go nuclear?

Proponents of national standards, as I’ve pointed out many times, have made a concerted effort to avoid attention as they’ve insidiously—and successfully—pushed the so-called Common Core on states. They’ve insisted the effort is “state led,” even though states didn’t create the standards and Washington coerced adoption through Race to the Top and No Child Left Behind waivers. They’ve called adoption “voluntary,” even with the heavy hand of the Feds behind them. And they’ve assiduously avoided what blew up past efforts to impose national standards: concrete content such as required readings or history lessons that were guaranteed to make people angry.

Well, with a recent unveiling of sample items for federally funded tests that go with the standards, all that might be about to change, and the whole thing could become radioactive to the public.

A couple of days ago the HechingerEd blog—from the education-centric Hechinger Report—published a post looking at preliminary testing items from the two consortia hand-picked by the Obama administration to create the national tests. Included in the post were links to sample items. I didn’t hit every one, but those I did check out contained, among other things,  confusing readings, poor questions, and lame functionality (in some cases the reading material on which questions were based didn’t even show up). And here’s one for the grammarians: A video-based item about the effect of weightlessness on astronauts’ bodies asked how weightlessness is like “lying” on a bed. The astronaut being interviewed, however, said it’s like “laying on a bed.” A small matter, perhaps, but one among many matters both small and big.

And here’s a really big one:

Smarter Balanced officials gave an example of a multi-part question in which high school students are asked to imagine they are the chief of staff for a congresswoman. Before they start working on the test, their teacher is supposed to lead a classroom activity about nuclear power. The students are then asked to come up with a list of pros and cons about nuclear power. Finally, they must write up a presentation for the congresswoman to give at a press conference later that day…. Questions like the one about nuclear power are more expensive, because they will likely require a trained evaluator to score them.

So much for avoiding controversy! Not only do we discover that the tests will have students take on hot-button topics like nuclear power, but scores will be meted out by human evaluators.

The fears and problems are clear: What should students be told about nuclear power—or any other contentious issue—that the tests address? Who decides? Will evaluators really just grade students on the structure of their presentations, or whether students write things with which the evaluators agree?  How will scoring be consistent among evaluators? Even if consistent, how will students and parents be assured of that?

This day had to arrive sooner or later. Eventually, something substantive had to come from the Common Core crowd. The question now is whether it will cause the whole, dubious undertaking to suddenly melt down.

Cronyism in the Energy Industry — from Enron to Al Gore

Tomorrow, Robert L. Bradley Jr. will discuss “Give Me Regulation: From Samuel Insull to James E. Rogers in the Electric Power Industry” at a Cato Policy Forum. The talk draws upon Bradley’s most recent book, Edison to Enron: Energy Markets and Political Strategies, the second volume in his trilogy on political capitalism in the energy industry.

Maybe he should call it, “From Samuel Insull [who organized Commonwealth Edison back around 1900] to Al Gore.”

The Washington Post reports today that former vice president Gore’s “clean energy” companies have received $2.5 billion in taxpayers’ money from the Obama administration. Which is perhaps not unrelated to the fact that “[j]ust before leaving public office in 2001, Gore reported assets of less than $2 million; today, his wealth is estimated at $100 million.”

I suppose it could be worse—Gore’s companies didn’t get all the $90 billion that the Obama administration doled out to uneconomic energy firms.

Attend the forum or watch it online at noon Friday.