Archives: 03/2014

Why Would School Staff Force a Student to Freeze?

It seems mind-boggling. Minnesota public school staff forced a barefoot teenage girl in a wet bathing suit to stand outside in sub-zero weather until she developed frostbite. 

It happened around 8:30 a.m. Wednesday at Como Park High School in St. Paul. Fourteen-year-old Kayona Hagen-Tietz says she was in the school’s pool when the fire alarm went off.

While other students had gotten out earlier and were able to put on dry clothes, Hagen-Tietz said she was rushed out with just her towel.

On Wednesday morning, the temperature was 5 below, and the wind chill was 25 below.

A teacher prevented her from getting her clothes from her locker because the rules stipulate that everyone must immediately leave the building in the event of a fire alarm. Shivering, the student pleaded to be allowed to go inside a car or another building but her request was denied.

Hagen-Tietz asked to wait inside an employee’s car, or at the elementary school across the street. But administrators believed that this would violate official policy, and could get the school in trouble, so they opted to simply let the girl freeze.

Students huddled around her and a teacher gave her a coat, but she stood barefoot for ten minutes before obtaining permission to sit in a vehicle. By that point, she had already developed frostbite.

Obama’s New Budget: Burden of Government Spending Rises More than Twice as Fast as Inflation

The President’s new budget has been unveiled.

There are lots of provisions that deserve detailed attention, but I always look first at the overall trends. Most specifically, I want to see what’s happening with the burden of government spending.

And you probably won’t be surprised to see that Obama isn’t imposing any fiscal restraint. He wants spending to increase more than twice as fast as needed to keep pace with inflation.

Obama 2015 Budget Growth

What makes these numbers so disappointing is that we learned last month that even a modest bit of spending discipline is all that’s needed to balance the budget.

By the way, you probably won’t be surprised to learn that the President also wants a $651 billion net tax hike.

That’s in addition to the big fiscal cliff tax hike from early last and the (thankfully small) tax increase in the Ryan-Murray budget that was approved late last year.

P.S. Since we’re talking about government spending, I may as well add some more bad news.

Nothing to Celebrate in Obama’s Budget

President Obama released his fiscal year 2015 budget request today. Sadly, for those who support smart, sensible budgeting, the president’s budget is nothing to celebrate. The budget increases spending and fails to tackle the main driver of our budget problem—entitlement spending. All deficit reduction included in the budget is from revenue increases, not spending cuts.

In coming days, we’ll be analyzing the president’s budget in detail, but here are the top-line numbers:

1. The president’s budget proposes spending more than the Ryan-Murray budget deal passed in December. Under the agreement reached by Congressman Ryan and Senator Murray, and supported by the president, discretionary spending for fiscal year 2015 should be $1,014 trillion. The president’s budget includes a section that bumps that up by $56 billion, paid for mostly by tax increases.

2. Over the 10-year budgetary window, the president spends $171 billion more than Congressional Budget Office (CBO) baseline. The budget also runs large deficits every single year.

3. According to Obama’s budget, the federal government will collect $3.3 trillion in tax revenue in 2015, more than any other year in history. The budget includes $650 billion in new revenue though various tax hikes. The president’s Office of Management and Budget also made rosier assumptions about economic growth over the next 10 years than did the CBO. As a result, the president’s budget would collect an additional $3.1 trillion in revenue over 10 years than CBO assumes.

Will Venezuela Be Next?

Last year, Nicholas Krus and I published a chapter, “World Hyperinflations”, in the Routledge Handbook of Major Events in Economic History. We documented 56 hyperinflations – cases in which monthly inflation rates exceeded 50% per month. Only seven of those hyperinflations have savaged Latin America (see the accompanying table).

At present, the world’s highest inflation resides in Latin America, namely in Venezuela. The Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, estimates that Venezuela’s implied annual inflation rate is 302%. Will Venezuela be the eighth country to join the Latin American Hall of Shame? Maybe. But, it has a long way to go.

The Hanke-Krus Hyperinflation Table
Latin American edition

Country Month With Highest Inflation Rate Highest Monthly Inflation Rate Equivalent Daily Inflation Rate Time Required for Prices to Double
1. Peru Aug. 1990 397% 5.49% 13.1 days
2. Nicaragua Mar. 1991 261% 4.37% 16.4 days
3. Argentina Jul. 1989 197% 3.69% 19.4 days
4. Bolivia Feb. 1985 183% 3.53% 20.3 days
5. Peru Sep. 1988 114% 2.57% 27.7 days
6. Chile Oct. 1973 87.6% 2.12% 33.5 days
7. Brazil Mar. 1990 82.4% 2.02% 35.1 days

Source: Steve H. Hanke and Nicholas Krus (2013), “World Hyperinflations”, in Randall Parker and Robert Whaples (eds.) Routledge Handbook of Major Events in Economic History, London: Routledge Publishing.

Finding a Way Back From the Brink in Ukraine

Ukrainians won an important political battle by ousting the corrupt Viktor Yanukovich as president.  But replacing Yanukovich with another dubious politico will change little.

Washington also triumphed.  Without doing much—no troops, no money, few words—Americans watched protestors frustrate Russia’s Vladimir Putin. 

But now Russia is attempting to win as well, intervening in Crimea.  Moscow has created a tinderbox ready to burst into flames.  The only certainty is that the U.S. should avoid being drawn into a war with Russia. 

In 2010 Yanukovich triumphed in a poll considered to be fair if not entirely clean.  His corrupt proclivities surprised no one.  However, while tarred as pro-Russian, in accepting Putin’s largesse last November Yanukovich actually refused to sign the Moscow-led Customs Union.

Still, protestors filled Maidan Square in Kiev over Yanukovich’s rejection of a trade agreement with the European Union.  As I point out in my latest Forbes column:  “The issue, in contrast to Kiev’s later brutal treatment of protestors, had nothing to do with democracy, human rights, or even sovereignty.”  As such, it was not America’s business, but up to the Ukrainian people.

And Ukraine is divided.  Broadly speaking, the nation’s west is nationalist and leans European while the east is Russo-friendly. 

Demonstrations quickly turned into a de facto putsch or street revolution.  Yanukovich’s ouster was a gain for Ukraine, but similar street violence could be deployed against better elected leaders in the future.

Moreover, many of those who look east and voted for Yanukovich feel cheated.  There was no fascist coup, but the government they helped elect was violently overthrown.  Some of them, especially in Crimea, prefer to shift their allegiance to Russia.

Kiev should engage disenfranchised Yanukovich backers.  Kiev also should reassure Moscow that Ukraine will not join any anti-Russian bloc, including NATO.  But if Crimeans, in particular, want to return to Russia, they should be able to do so. 

There is no important let alone vital security issue at stake for the U.S. in the specific choices Ukrainians make.  The violent protests against the Yanukovich government demonstrate that Moscow has no hope of dominating the country.  Kiev will be independent and almost certainly will look west economically. 

Russia could still play the new Great Game.  Unfortunately, rather than play Vladimir Putin upended the board by taking effective control of the Crimea. 

Yet Putin tossed aside his trump card, a planned referendum by Crimea’s residents.  A majority secession vote would have allowed him to claim the moral high ground.  However, an election conducted under foreign occupation lacks credibility.

As it stands Russia has committed acts of aggression and war. 

Even in the worst case the U.S. has no cause for military intervention.  Who controls the Crimea ain’t worth a possible nuclear confrontation.

Putin is a nasty guy, but Great Power wannabe Russia is no ideologically-driven superpower Soviet Union.  Moscow perceives its vital interests as securing regional security, not winning global domination.  Yet bringing Ukraine into NATO would have created a formal legal commitment to start World War III.

The allies should develop an out for Russia.  For instance, Moscow withdraws its forces while Kiev schedules independence referendums in Russian-leaning areas. 

If Putin refuses to draw back, Washington and Brussels have little choice but to retaliate.  The allies could impose a range of sanctions, though most steps, other than excluding Russian banks from international finance, wouldn’t have much impact. 

Tougher would be banning investment and trade, though the Europeans are unlikely to stop purchasing natural gas from Moscow.  The other problem is the tougher the response the more likely Russia would harm American interests elsewhere, including in Afghanistan, Iran, and Korea. 

The Ukrainian people deserve a better future.  But that is not within Washington’s power to bestow.  Today the U.S. should concentrate on pulling Russia back from the brink in Ukraine. 

A new cold war is in no one’s interest.  A hot war would be a global catastrophe.

Helicopter Parents, Helicopter Governance, and Today’s Childhood

Should parents helping their child’s teacher put on a short class party have to submit to a background check first? Is it child endangerment to leave your toddler in the car for a few minutes on a mild day while you run into a shop? If your child gets hurt falling off a swing, is it potential child neglect not to sue every solvent defendant in sightShould police have arrested a dad who walked into school at pickup time rather than wait outside for his kids as he was supposed to? 

Author Lenore Skenazy has led the charge against the forces of legal and societal overprotectiveness in her book Free-Range Kids and at her popular blog of the same name.  This Thursday, March 6 – rescheduled from a weather-canceled event originally set for last month – she’ll be the Cato Institute’s guest for a lunchtime talk on helicopter parenting and its near relation, helicopter governance; I’ll be moderating and commenting. The event is free and open to the public, but you need to register, which you can do here. You can also watch online live at this link.

In Defense of Truthiness

If you only read one Cato brief this Supreme Court term, it should be this one.

Believe it or not, it’s illegal in Ohio to lie about politicians, for politicians to lie about other politicians, or for politicians to lie about themselves. That is, it violates an election law—this isn’t anything related to slander or libel, which has higher standards of proof for public figures—to make “false statements” in campaign-related contexts.

During the 2010 House Elections, a pro-life advocacy group called the Susan B. Anthony List (SBA List), published ads in Ohio claiming that then-Rep. Steven Driehaus, who was running for re-election, had voted to fund abortions with federal money (because he had voted for Obamacare). Rather than contesting the truth of these claims in the court of public opinion, Driehaus filed a complaint with the Ohio Election Commission (OEC) under a state law that makes it a crime to “disseminate a false statement concerning a candidate, either knowing the same to be false or with reckless disregard of whether it was false.”

While the complaint was ultimately dropped, the SBA List took Driehaus and the OEC to federal court, seeking to have this law declared unconstitutional and thus enable advocacy groups to have more freedom going forward. The case has now reached the Supreme Court.

Joined by legendary satirist (and Cato’s H.L. Mencken Research Fellow) P.J. O’Rourke, our brief supports the SBA List and reminds the Court of the important role that “truthiness”—facts you feel you in heart, not in your head—plays in American politics, and the importance of satire and spin more broadly. We ask the Court a simple yet profound question: Doesn’t the First Amendment’s guarantee of free speech protect one man’s truth even if it happens to be another man’s lie? And who’s to judge—and on what scale—when a statement slides “too far” into the realm of falsehood?

However well intentioned Ohio legislators may have been, laws that criminalize “false” speech don’t replace truthiness and snark with high-minded ideas and “just the facts.” Instead, they chill speech, replacing the sort of vigorous political dialogue that’s at the core of the democratic process with silence. The Supreme Court of all institutions should understand that just because a statement isn’t fully true, that doesn’t mean it doesn’t have its place in public discourse. Moreover, pundits and satirists are much-better placed to evaluate and send-up half-truths than government agencies.

The Supreme Court will hear argument in Susan B. Anthony List v. Driehaus on April 22.