Archives: June, 2013

Larry Summers Redefines Balanced Budgets as Stimulus and Big Deficits as Austerity

Former Treasury Secretary Larry Summers, in June 4 testimony before the Senate Budget Committee, offers a scatter diagram which allegedly shows “that countries that pursued harsher austerity policies in recent years also had lower real GDP growth.”  He acknowledges, but does not adequately explain, that the causality may well be backwards: Bond markets would not allow countries in severe economic distress (Portugal, Ireland, Greece and Spain) to continue financing deficits at the peak levels of 2010.

Summers defines “austerity” as the three-year change (regardless of the level) from 2010 to 2013 in cyclically-adjusted “primary” deficits (excluding interest expense) as a percent of potential GDP.  His scatter diagram then compares those changes to average real GDP growth from 2010 to 2013, using unexplained estimates for 2013.

Measuring fiscal stimulus by the change in budget deficits means several countries with little or no budget deficit in both 2010 and 2013 appear as employing the most “fiscal stimulus” in Summers’ graph. Sweden’s deficit is estimated at 0.1 percent of GDP for 2013, according to The Economist, and was literally zero in 2010.  Keeping the budget balanced puts Sweden on the admirable left side of Summers’ diagram – the side ostensibly choosing growth rather than austerity.  Germany is another country Summers counts as avoiding austerity, even though Germany’s brief cyclically-adjusted deficit of 3.5 percent of GDP in 2010 was cut to zero in 2012-2013.

When it comes to real GDP Growth, Hong Kong, Singapore, the Slovak Republic and South Korea appear near the top of Summers’ graph.  It is revealing that Hong Kong is also far to the left on the pro-growth side of the austerity axis.  This may appear paradoxical since Hong Kong ran budget surpluses in 7 of the past 8 years, and will do so again in 2013. No amount of cyclical adjusting could turn chronic surpluses into deficits.  Simply because Hong Kong has not switched from a big deficit to a smaller one, that alone suffices to place it among the least “austere” economies on list.  Similarly, South Korea’s budget surplus is estimated at 1.3-1.4 percent of GDP in both 2010 and 2013, according to the OECD, but keeping the budget in surplus between those years counts as stimulative policy in Summers’ reckoning.

Common Core Deceive-and-Denigrate Campaign Continues

I’ve written a lot recently about the untoward tactics being employed by supporters of the Common Core national curriculum standards. I’m afraid little seems to be changing, as illustrated by two new bits of evidence.

The first is a survey in Tennessee by the Core-supporting State Collaborative on Reforming Education. The survey – which has gotten significant coverage across the Volunteer State – supposedly shows that Tennesseans just love the Common Core. As the Knoxville News succinctly put it in its headline, “3 in 4 Tennesseans Favor Common Core Standards.” The article goes on to report that “after hearing a brief description about the standards, about 76 percent of voters support their implementation, with 44 percent ‘strongly’ favoring them.”

Well, that seems like an open-and-shut case for the Common…wait a minute. What was that “description” respondents heard?

Checking out the brief summary SCORE put out about its survey, it appears to be the following (see note 1):

Now, just so everyone taking this survey has the same information, let me tell you some more about these Common Core State Standards. These new standards were developed by states and have been set to internationally competitive levels in English and math. This means that students may be more challenged by the material they study, and the tests they take will measure more advanced concepts and require students to show their work. Knowing this, do you favor or oppose implementing these new Common Core State Standards?

Really? “Just so everyone…has the same information”? Gimme a break.

This is, of course, a classic loaded question designed to get a positive response. How many people are going to oppose “internationally competitive” standards by which children will be “challenged”? Forget that curriculum experts hardly all agree with this assertion. Then, it says that the standards were “developed by states” when, in fact, they were not: the National Governors Association and Council of Chief State School Officers are not states. Finally, it completely ignores that the federal government coerced state adoption of the Core – the main concern of the Core’s most vocal opponents – and did so before the final standards had even been published. If you’re going to include highly dubious assertions, and exclude crucial concerns, you might as well just say “the Common Core is terrific, has no down sides, and will be great for your kids. Now, do you favor or oppose terrific standards that will surely help your children?”

Alas, this is not new. It’s a standard, pro-Core question.

In other news, Delaware Governor Jack Markell (D) took to the pages of the Washington Post today to defend the Common Core against a Post report on Tea Party opposition to the Core. Alas, it was a typical defense, based as much on smearing Core opponents, and ignoring crucial federal involvement, as discussing the Core’s merits.

Markell starts with a straw man, citing the Post article as saying that Tea Party people argue that the Common Core was developed by the Feds. No such assertion appears in the article. Markell then suggests that Common Core was controlled by “state leaders” without saying who they were, perhaps because the NGA and CCSSO employees in charge of the effort were not “state leaders.” Moreover, he implies that somehow for standards to be high, and our nation internationally competitive, standards must be national. He offers no meaningful arguments for these things, and ignores the significant empirical evidence against such superficial assumptions.

Perhaps the most egregious – but typical – of his piece’s failings are two. The first is the absence of any mention of Race to the Top or NCLB waivers (not to mention federal funding and selection of national tests) that are the concrete federal actions that utterly justify anyone’s worries about federal control. They are also just the kinds of actions supporters asked for. And the second? Smearing the Tea Party as “fringe” kooks who, it is implied, only peddle myths.

Given what we’re seeing from many Core supporters, that last bit is ironic, isn’t it?

Happy Birthday Nat Hentoff!

Cato Senior Fellow Nat Hentoff turns 88 today. 

John Whitehead, president of the Rutherford Institute, recently had some high praise for our colleague:

I’ve had the privilege of working with some remarkable individuals in my lifetime—celebrities, politicians, writers, artists, musicians, journalists, people whose names are legendary and others whose impact, no less significant, was only felt by a small few—yet for sheer nerve, integrity, tenacity, vision and a love of America that has weathered the best and worst this nation has had to offer, no one can match Nat Hentoff.

Even at the ripe age of 88, Hentoff is a radical in the best sense of the word, a feisty, fiercely loyal, inveterate freedom fighter and warrior journalist with a deep-seated intolerance of injustice and a well-deserved reputation for being one of the nation’s most respected, controversial and uncompromising writers.

Armed with a keen understanding of the law and an enviable way with words, brandishing a rapier wit and teeming with moral outrage, Nat has never been one to back down from a fight, and there have been many over the course of his lifetime—one marked by controversy and fueled by his passion for the protection of civil liberties and human rights. …

A self-described uncategorizable libertarian, Hentoff adds he is also a “Jewish atheist, civil libertarian, pro-lifer.” Born in Boston on June 10, 1925, Hentoff received a B.A. with honors from Northeastern University and did graduate work at Harvard. From 1953 to 1957, he was associate editor of Down Beat magazine. He went on to write many books on jazz, biographies and novels, including children’s books. His articles have appeared in the Wall Street Journal, New York Times, Commonwealth, the New Republic, the Atlantic and the New Yorker, where he was a staff writer for more than 25 years. In 1980, he was awarded a Guggenheim Fellowship in Education and an American Bar Association Silver Gavel Award for his coverage of the law and criminal justice in his columns. In 1985, he was awarded an Honorary Doctorate of Laws by Northeastern University. For 50 years, Hentoff wrote a weekly column for the Village Voice. When that position was terminated on December 31, 2008, Hentoff joined the Cato Institute as a Senior Fellow.

Read the whole thing.

Just a few days before Glenn Greenwald broke the explosive story about NSA surveillance, Hentoff was already complimenting Greenwald for his work defending free speech and a free press:

What all of this comes down to, as it may affect future administrations as well as generations of Americans, has been precisely underlined by Glenn Greenwald, an incisive journalist who would have given James Madison hope for the First Amendment’s future.

Writing about how “media outlets and journalists have finally awakened to the serious threat posed by the Obama administration to press freedoms, whistle blowing and transparency,” the question now, Greenwald demands, is:

“What, if anything, will they (journalists) do to defend the press freedoms they claim to value? … Thwarting government attacks like these … requires a real adversary posture, renouncing their subservience to government interests and fear of alienating official sources.

Hentoff discusses the NSA story here.

And beyond his work on civil liberties, Hentoff still finds time to review jazz music for the Wall Street Journal.  Last month, Hentoff had this article about Joe Alterman.

Government’s Legal Arguments Shrivel on the Vine

Yet again the unanimous Supreme Court has slapped down a government attempt to deprive property owners of their civil rights.  What was at stake in Horne v. Dept. of Agriculture wasn’t even the property – raisins! – but the mere ability to challenge the government’s desire to take that property without meaningful judicial review.

Nobody should have to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights. Yet that’s exactly what the U.S. Department of Agriculture sought to impose on raisin farmers Marvin and Laura Horne when they protested the enforcement of a USDA “marketing order” that demanded that the Hornes turn over 47% of their crop without compensation.

These New Deal-era regulations are bad enough – forcing raisin “handlers” to turn over some of their crop to the government so it can control raisin supply and price – but here the government kept throwing up obstacles to the Hornes’ attempts to assert that they shouldn’t legally be subject to them.  The government demanded about $650,000 from the Hornes and didn’t want to give them a day in court until they paid the money and jumped through assorted administrative hoops.

The Supreme Court correctly rejected that absurd position and reversed the California-based U.S. Court of Appeals for the Ninth Circuit that upheld it, reinforcing the line drawn by five other circuit courts.  “In the case of an administrative enforcement proceeding,” Justice Thomas wrote on all his colleagues’ behalf, “when a party raises a constitutional defense to an assessed fine, it would make little sense to require the party to pay the fine in one proceeding and then turn around and sue for recovery of that same money in another.”

Indeed, there’s no reason to treat Fifth Amendment takings claims any differently than lawsuits against government violations of other constitutional provisions.

Here’s more background on the case and Cato’s amicus brief.

In Its Bubble of Secrecy, the National Security Bureaucracy Redefined Privacy for Its Own Purposes

Rep. Jim Sensenbrenner (R-WI) is nothing if not a security hawk, and this weekend he decried the NSA’s collection of all Americans’ phone calling records in a Guardian post entitled, “This Abuse of the Patriot Act Must End.” On Thursday last week, he sent a letter to Attorney General Eric Holder demanding answers by Wednesday.

It also became apparent over the weekend that the National Security Agency’s program to collect records of every phone call made in the United States is not for the purpose of data mining. (A Wall Street Journal editorial entitled “Thank You for Data Mining” was not only wrong on the merits, but also misplaced.) Rather, the program seizes data about all of our telephone communications and stores that data so it can aid investigations of any American who comes under suspicion in the future.

Details of this program will continue to emerge–and perhaps new shocks. The self-disclosed leaker–currently holed up in a Hong Kong hotel room waiting to learn his fate–is fascinating to watch as he explains his thinking.

The court order requiring Verizon to turn over records of every call “on an ongoing daily basis” is a general warrant.

The Framers adopted the Fourth Amendment to the Constitution in order to bar general warrants. The Fourth Amendment requires warrants 1) to be based upon probable cause and 2) to particularly describe the place to be searched and the persons or things to be seized. The leaked warrant has neither of these qualities.

A warrant like this would never be adopted in an open court system. With arguments and decisions available to the public and appeals going to public courts, common sense and simple shame would foreclose suspicionless data-gathering about every American for the benefit of future potential investigations. 

Alas, many people don’t believe all that deeply in the Constitution and the rule of law when facile promises of national security are on offer. It is thus worthwhile to discuss whether this is unconstitutional law enforcement and security practice would work. President Obama said last week, “I welcome this debate and I think it’s healthy for our democracy.”

Fighting Terrorists Not the Same as Fighting Terror

I have a new piece up this morning at CNN’s Global Public Square, co-authored with Mieke Eoyang of Third Way, making the case against an expanded Authorization for Use of Military Force (AUMF). Rather than thinking of new powers to hand over to the president, Congress should revisit the original rationale for the AUMF, and realize that, with the end of combat operations in Afghanistan by late 2014, such authorities are no longer required. In the future, should additional threats emerge that the president is unable to address without taking the country to war, then Congress can and should declare war, on an enemy, and with a clear end-goal in mind.

As it currently stands, the AUMF has become a catch-all for any U.S. government activities that can be cast as counterterrorism. It has allowed what should have been a small and achievable mission–killing or capturing those who planned the 9/11 attacks, and those who helped them, and degrading al Qaeda’s ability to carry out future such operations–to become a quixotic and unbounded global crusade, the longest war in the nation’s history, with no end in sight. One proposed revision would only compound this problem, making it easier for the president, this one or his successors, to expand the list of targets, and this war, at his or her discretion. So long as the nation remains on a war-footing, the government will always find new wars to fight. 

The GPS piece was written before the revelations of U.S. government surveillance of U.S. citizens’ phone records, and, perhaps, Internet usage. But the themes are connected: how does the U.S. government strike a balance between protecting the rights and liberties of American citizens, and securing those same citizens from physical harm, especially from individuals (i.e. terrorists) who use violence or the threat of violence against innocent people for political purposes? The American people, usually jealous of government intrusions in their private lives, have been far more tolerant of such intrusions over the past 12 years for a simple reason: they are scared. Indeed, they are terrified. Counterterrorism should address that psychological condition as much as it does the people that cause it. And we don’t need an expanded AUMF to do that.

The government has done an able job of rounding up terrorists and their accomplices; core al Qaeda has been practically eliminated, and its would-be successors are notably unsophisticated. The AUMF had little to do with that, with the important exception of those initial operations conducted in and around Afghanistan. The government has also collected, chiefly through traditional law-enforcement methods, an additional cohort of idiots, nitwits, and utter incompetents, many of whom were unlikely to harm even themselves, let alone innocent bystanders. The small likelihood that they might succeed has justified further extraordinary efforts, about which we now know a bit more. Again, such capabilities do not hinge on an AUMF.

By contrast, the government has done a terrible job of reducing people’s fears, and the context of the AUMF–reminding the public that we are at war–probably makes the problem worse. By and large, despite a few hopeful signs, we are still terrorizing ourselvesThis was the overarching theme in a collection of essays that I edited with Jim Harper and Ben Friedman. The book was published nearly three years ago. Its message, unfortunately, still remains relevant today.

The Federal Government’s “Rural” Industrial Complex

David Fahrenthold has another excellent article on waste in government in Sunday’s Washington Post. This time he finds a truly comic example of waste, duplication, and confusion:

[T]he U.S. government has at least 15 official definitions of the word “rural,” two of which apply only to Puerto Rico and parts of Hawaii.

All of these definitions matter; they’re used by various agencies to parcel out $37 billion-plus in federal money for “rural development.” And each one is different….

There are 11 definitions of “rural” in use within the U.S. Department of Agriculture alone.

It’s laughable. But the real question is, Why does the federal government even need to define “rural”? Well, of course the answer comes back to the real purpose of our modern tax-and-transfer state: The definitions define who gets the subsidies.

Every year, there are billions available to fund projects in rural communities. Money for housing. Community centers. Sewer plants. Broadband connections.

In a sidebar to the story, we get some details. The Census Bureau has one definition of “rural” so it can tell us how many Americans live in rural areas. Here are the purposes of the other 14 definitions:

Used for a variety of loan and grant programs, all meant to foster rural development…for loans and grants for “community facilities” in rural areas… for aid for water and waste-disposal systems… for aid for improvements in telecommunications systems…by farm-credit associations making housing loans… for certain lending programs for rural community development…to determine areas served by Office of Rural Health…by the National Rural Development Partnership…for grants to rural institutions of higher education…to determine what areas of Hawaii are eligible for rural-aid programs…to determine what areas of Puerto Rico are eligible for rural-aid programs…by various rural development loan and grant programs.

So let’s see. People in rural areas pay federal taxes. People in urban areas pay federal taxes. All that money goes to Washington – where a great deal of it stays – and then some of it is used to provide programs and services in rural and urban areas. Maybe both rural and urban Americans would be better off keeping their money at home and paying for whatever services they think are actually worth the cost. And then the federal government wouldn’t have to pay handsome salaries to well-educated people to form task forces to determine 15 different definitions of “rural.” And states, cities, and rural areas wouldn’t have to hire expensive lobbyists to get a piece of that federal pie.