Archives: March, 2013

Judge Strikes Down Bloomberg’s Soda Grab

My new op-ed at the Daily Caller is their “most shared” this morning. Excerpt:

On Monday, Judge Tingling struck down the soda ban in a sweeping opinion that does everything but hand Mayor Poppins his umbrella and carpetbag. This wasn’t just a temporary restraining order putting the regulation on hold for a few weeks. The judge struck down the ban permanently both on the merits (“fraught with arbitrary and capricious consequences”) and as overstepping the rightful legal powers of the New York City Department of Health…

[For] the mayor and his public health crew… the biggest reproach in the decision isn’t in being found to have gotten the facts wrong, it’s being found to have violated the law.

And if anyone is expected to know and play by the rules, it’s a nanny.

Michael Grynbaum, New York Times: 

[Bloomberg’s] administration seemed caught off guard by the decision. Before the judge ruled, the mayor had called for the soda limits to be adopted by cities around the globe; he now faces the possibility that one of his most cherished endeavors will not come to fruition before he leaves office, if ever. …

The measure was already broadly unpopular: In a New York Times poll conducted last August, 60 percent of city residents said it was a bad idea for the Bloomberg administration to pass the limits. 

The Times also profiles Judge Tingling and reports on reactions by the New Yorker in the street (not favorable toward the ban). Coverage from yesterday, including my podcast with Cato’s Caleb Brown, here. [cross-posted and slightly condensed from Overlawyered]

Obama’s Trade Policy Should Be Judged on Its Accomplishments, Not Its Promise

There has been more buzz about the prospects for trade liberalization this year than at any time since the first term of the second president Bush. It appears that some may be mistaking the chatter for actual accomplishment.

For example, trade policy made the front page of Saturday’s Washington Post in a story that is much less about the substantive issues, or the obstacle-strewn path to meaningful liberalization, or the political leadership that will be required to surmount those obstacles than it is a paean to President Obama’s alleged metamorphosis into a champion of free trade.

But before anyone awards the president the Nobel Trade Prize for a job yet done, consider this: in four-plus years, this administration has concluded zero trade agreements, while launching 13 WTO cases against various trade partners. For 50 months, enforcement and domestic protectionism—not liberalization—have dominated the trade agenda.

Yet, the absence of evidence that this administration can deliver meaningful new trade agreements doesn’t seem to curb the enthusiasm of Bruce Stokes, a long-time trade policy observer, whose comment serves as the emphatic final sentence of the Washington Post tribute: “They appear to have moved from a risk-averse first term to creating a legacy in international economic and trade policy.” A legacy? Really? Shouldn’t the bar be raised just a smidge before we coronate President Obama this generation’s Cordell Hull?

For starters, wouldn’t the president have delegated someone capable and experienced to take ownership of the trade agenda if he were really committed to leaving a trade policy legacy? U.S. trade representative Ron Kirk announced more than one year ago that he would be leaving his post early in a second Obama administration. Yet there is nobody vetted and ready to take the reins of trade policy. Kirk’s official resignation came at the end of last month—though he has been hanging around to help out on account of … “sequestration.”

The most prominent name floated for U.S. Trade Representative has been the OMB’s Jeff Zients, the person most closely associated with President Obama’s proposal to subsume the USTR under the enforcement-centric Commerce Department—again, not exactly the substance of trade legacy-building. Members from both parties in Congress have demanded a better candidate if the president expects his trade agenda to be taken seriously.

Accomplishments, not rhetorical intentions, should serve as the basis for our judgments. Anyone can announce initiatives. President Obama is quite proficient at reciting litanies of initiatives. But it remains to be seen how he handles the situation when the deals require his confronting allied interests and dismantling their protectionist perches. In fairness, the administration’s trade negotiators have been working hard toward a Trans-Pacific Partnership agreement with 10 Pacific-rim nations. But let’s see where this goes before we start writing history. There’s still a lot of ham left on that bone.

The administration has verbally committed to completing the TPP negotiations by the end of this year and the just-announced Transatlantic Trade and Investment Partnership negotiations with Europe by the end of next year—both virtual impossibilities given where things stand in those negotiations and between the White House and Congress. So we already have a credibility problem.

Everything You Need to Know About the Ryan Budget

Sigh. Even when they’re sort of doing the right thing, Republicans are incapable of using the right argument.

Rep. Paul Ryan (R-WI), chairman of the House Budget Committee, has unveiled his proposed budget and he and other Republicans are bragging that the plan will balance the budget in 10 years.

That’s all fine and well, but good fiscal policy is achieved by reducing the burden of government spending, and that means restraining the budget so that federal outlays grow slower than the private sector.

It’s good to balance the budget, of course, but that should be a secondary goal.

Now for the good news. The Ryan Budget does satisfy the Golden Rule of fiscal policy. As you can see in the chart, federal spending grows by an average of 3.4 percent annually, and that modest bit of fiscal discipline is enough to reduce the burden of government spending to 19.1 percent of economic output by 2023.

It’s also good news that the Ryan Budget calls for structural reform of entitlement programs, including Medicaid block grants and Medicare premium support. The budget also assumes the repeal of the costly Obamacare program.

And there’s also some good tax policy. Not bold tax reform like a flat tax, but top tax rates would be reduced to 25 percent and many forms of double taxation, like the death tax and capital gains tax, presumably would be reduced or eliminated.

Let’s be clear, though, that this is not a libertarian budget. Federal spending will still be far too high. Indeed, the budget will consume a larger share of the economy than it did when Bill Clinton left office.

And while Republicans do a good job of restraining spending in the first couple of years of the new Ryan Budget, outlays rise far too rapidly beginning around 2016.

Moreover, there’s no Social Security reform.

Equally worrisome, the budget assumes that the federal tax burden should remain at about 19 percent of GDP, higher than the long-run average of 18 percent of GDP and—for all intents and purposes—permanently enshrining Obama’s fiscal cliff victory.

And it’s depressing to see that the Ryan Budget has gotten weaker each year.

At this rate, it won’t be that long before the GOP budget and Obama budget converge.

Okay, that’s an exaggeration. But the moral of the story is that the Ryan Budget is a step in the right direction, but much more will be needed to restore limited, constitutional government.

Government Science

We started up Cato’s Center for the Study of Science to investigate how the government’s virtual monopoly funding of many branches of science results in unseemly mixtures of science, scientists, and the political process.

Lest anyone wonder why we do this, here is the “motto” of the U.S. government’s Global Change Research Program (with its annual $2.6 billion budget):

“Thirteen Agencies, One Vision: Empower the Nation with Global Change Science”

Yikes!

We are currently in the midst of reviewing the latest offering from the USGCRP—its assessment of the potential impacts in the U.S. from anthropogenic climate change. Guess what, “it’s worse than we thought!”

Nevermind that this new document has no problems using screeds from the Union of Concerned Scientists, various climate “alliances,” and literature greyer than a Russian Blue cat, in support of some of its more lurid claims. After all, the USGCRP has a “vision.”

Speaking of vision, if you want to look for yourself, download this turkey here. Public comments due by April 12, 2013.

Transit Ridership Falls Since 2008

The lies begin right in the headline of the American Public Transportation Association’s annual press release patting the industry on the back for carrying heavily subsidized riders last year. “Record 10.5 Billion Trips Taken On U.S. Public Transportation In 2012,” claims the press release headline.

The text reveals that it wasn’t actually a record at all, but merely the “second-highest ridership since 1957.” When was the first highest? In 2008, meaning the headline would have been more accurate if it had read, “Transit Ridership Falls Since 2008.”

Of course, as a lobby group, APTA is paid to promote the transit industry. Reporters are also paid to see through lobbyists’ lies, but unfortunately many of them simply modestly rewrite the press release while others add their own questionable analyses.

Source: Auto driving is from the Federal Highway Administration’s Highway Statistics series, while the transit numbers are from APTA’s own Public Transportation Fact Book.

Anti-auto writers gleefully report that transit ridership is growing faster than driving. While it is true that urban driving has stagnated since the 2008 financial crisis, the chart above shows that transit has a long way to go to catch up with driving. (Note that DC Streets Blog reports on total driving, while I use urban driving, which is a better comparison with urban transit.)

In 2012, transit carried about 1.8 percent of motorized urban passenger miles, which is about what transit’s share of urban passenger miles has been, plus or minus 0.1 percent, since 1993. Before then, it was 2.1 percent in 1990, 3.1 percent in 1980, and 4.7 percent in 1970. The roughly half a trillion dollars spent subsidizing transit since 1970 hasn’t done much good.

Another point APTA carefully neglects to mention is that urban population growth is the main source of transit ridership growth. Transit carried about 44 trips per urban resident in 2012, which is about what it has been, plus or minus 1 trip, since 2005. Prior to that, they grew since 1995, when they were just 38, but steadily shrank before then. In 1990, there were 47 trips per capita and in 1980 there were 51.

The press release also reports that the fastest growing form of transit is light rail. But it neglects to mention that that is mainly because of new construction. In fact, the miles of rail are growing far faster than rail riders.

In 1994, light rail carried more than 500,000 trips per route mile. By 1999 this had fallen below 400,000 trips per mile; by 2012 it was down to 300,000 trips per mile. With rising construction costs and falling ridership per mile, light rail is suffering from some seriously diminishing returns.

It is certainly reasonable to ask whether the stagnation of urban driving is a trend or simply a reflection of the recession and high unemployment rates among young people. But it is not reasonable to think that transit is providing an adequate substitute for urban driving.

According to the Federal Highway Administration’s traffic volume trends, urban driving declined by 11 billion vehicle miles between 2007 and 2012. Considering average occupancy rates, that’s roughly 16 billion passenger miles. In that time period, urban transit gained about 3 billion passenger miles, all of them between 2007 and 2008. To the extent that people really are driving less, it is more because they are traveling less than that they are riding transit more.

Karzai’s Latest Outrageous Comment

Yesterday, Afghan President Hamid Karzai alleged that the United States and the Taliban are “working in concert to convince Afghans that violence will worsen if most foreign troops leave.” His accusation exposes a strange irony. Karzai not only supports U.S. forces in Afghanistan after 2014, but also disparages that presence to evade his own failings. 

Since 2001, senior U.S. officials have tethered our military might to the sick man of Central Asia. In 2004, President George W. Bush pledged America’s “ironclad commitment” to help Karzai’s country succeed. In 2010, President Obama made clear that the U.S. role in Afghanistan “is a long-term partnership.” 

President Karzai codified those pledges last May by concluding the Enduring Strategic Partnership Agreement between the Islamic Republic of Afghanistan and the United States of America. Despite his history of hindering U.S.-backed anti-corruption investigations, denouncing the international community, and claiming the U.S. ferried Taliban to the north in order to spread violence, he eagerly signed an Agreement that commits the U.S. government to Afghanistan’s future. It provided for the possibility of a U.S. troop presence until 2024, and a long-term framework for training Afghan security forces and targeting al Qaeda. 

Washington’s devotion to nation building still holds fast despite Karzai’s inability to fulfill its lofty expectations. As former U.S. ambassador to Kabul Karl W. Eikenberry bluntly warned his superiors in November 2009, Karzai “is not an adequate strategic partner.” 

Certainly, the United States is not blameless for Afghanistan’s downward spiral—it took responsibility back in 2001 to rebuild the war-ravaged country and then shifted its attention and resources in 2003 to invade and occupy Iraq. Yet, the endemically corrupt Karzai regime and its band of thugs and cronies are also culpable. 

Ample reporting on Afghan corruption need not be repeated here. More to the point, Karzai fails to appreciate the way in which his poor governance vindicates insurgent propaganda and drives many Afghans to fight. A widespread perception of the central government’s massive corruption delegitimizes the state and inspires the sense of injustice that makes the Taliban appear as an effective alternative. Apart from Karzai himself, Afghan police are notorious for perpetrating crimes they are supposed to be stopping, such as corruption, theft, kidnapping, murder, and child abuse. Meanwhile, the Afghan army, long hailed as the mission’s shining success story, is rife with factionalism and patronage networks that could splinter the institution along political and ethnic lines. Foreign policy planners in Washington overlooked the second- and third-order consequences of their attempts to build a strong central government that wields a monopoly on the legitimate use of force. 

As the Democratic majority staff of the Senate Foreign Relations Committee admitted two years ago, “Foreign aid, when misspent, can fuel corruption, distort labor and goods markets, undermine the host government’s ability to exert control over resources, and contribute to insecurity.” (Emphasis mine.] 

Perversely, the corruption of the Afghan central government and the failures of the foreign-led nation-building project feed off one another in disturbing symbiosis. The Washington Post hasreported that foreign military and development spending provide roughly 97 percent of Afghanistan’s gross domestic product, fomenting fears that withdrawal will push the Afghan economy into depression. The alternative to popping that foreign aid bubble, some argue, would be to commit several hundred thousand troops and decades of attention, resources, and patience to transform Afghanistan’s deeply divided society into a stable, non-corrupt, electoral democracy. Of course, such success would hardly be guaranteed and assumes we possess the local knowledge as well as the cultural and religious legitimacy to operate indefinitely in a country notoriously suspicious of outsiders and largely devoid of central authority. 

Over twelve years of nation-building has had little success in creating an economically viable Afghan state, much less a self-sustaining Afghan security force. Indeed, nation building has propped up an erratic and unreliable regime whose behavior feeds the insurgency’s momentum. 

Policymakers must reject the flawed premise on which their policies rest. They must overcome their tendency to overestimate the strategic importance of a small, underdeveloped country to the narrower and more achievable goals of disrupting terrorist networks and preserving U.S. national security.

My Heart Breaks and Tears Flow When I Read about Sequestration Being a Big Defeat for Lobbyists

I believe in the First Amendment, so I would never support legislation to restrict political speech or curtail the ability of people to petition the government.

That being said, I despise the corrupt Washington game of obtaining unearned wealth thanks to the sleazy interaction of lobbyists, politicians, bureaucrats, and interest groups.

So you can imagine my unfettered joy when reading about how this odious process is being curtailed by sequestration. Here are some cheerful details from story in Roll Call.

…sequester cuts…reflect not only Washington’s political paralysis but a bitter lobbying failure for K Street interests across the board. From university professors and scientists to cancer victims, defense contractors and federal workers, hundreds of advocacy, trade and labor groups have lobbied aggressively for months to head off the cuts. They’ve run ads, testified on Capitol Hill, staged demonstrations and hounded lawmakers, all to no avail. …the path forward could be a lobbying nightmare.

Reading the story, I recalled a Charles Addams cartoon from my childhood. Thanks to the magic of Al Gore’s Internet, I found it.

Slightly modified to capture my spirit of elation, here it is for you to enjoy.

Except I like to think I’m a bit more prepossessing than the Uncle Fester character, but let’s not get hung up on details.

What matters is that sequestration was a much-needed and very welcome victory for taxpayers. Obama suffered a rare defeat, as did the cronyists who get rich by working the system.

To be sure, all that we’ve achieved is a tiny reduction in the growth of federal spending (the budget will be $2.4 trillion bigger in 10 years rather than $2.5 trillion bigger). But a journey of many trillions of dollars begins with a first step.