Archives: May, 2013

Washington Booms during Slowest Recovery

Continuing our ongoing series on the wealth of Washington, we bring you the lead story in Friday’s “Mansion” section of the Wall Street Journal:

WSJ DC Boomtown

The Journal reports:

As other American cities have been buffeted by an uneven economy, Washington’s property market has been buoyed two forces specific to the capital city: a surge of federal contractors and a rising tide of government spending. The result: what real-estate agents and developers are calling an unprecedented real-estate surge.

Yes, a rising tide of government spending may be bad for the American economy, but it’s great for the Washington area.

Washington is wealthy and getting wealthier, despite history’s slowest recovery in most of the country. As we’ve said here before, this of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. 

Money spent in Washington is taken from the people who produced it all over America. Washington produces little real value on its own. National defense and courts are essential to our freedom and prosperity, but that’s a small part of what the federal government does these days. Most federal activity involves taking money from some people, giving it to others and keeping a big chunk as a transaction fee.

Every business and interest group in society has an office in Washington devoted to getting some of the $3.6 trillion federal budget for itself: senior citizens, farmers, veterans, teachers, social workers, oil companies, labor unions - you name it. The massive spending increases of the Bush-Obama years have created a lot of well-off people in Washington. New regulatory burdens, notably from Obamacare, are also generating jobs in the lobbying and regulatory compliance business.

Walk down K Street, the heart of Washington’s lobbying industry, and look at the directory in any office building. They’re full of lobbyists and associations that are in Washington, for one reason: because, as Willie Sutton said about why he robbed banks, “That’s where the money is.”

The wonder is why the taxpayers put up with it.

Are You Indian Enough to Be Exempt from Obamacare?

You can’t make this up: Obamacare exempts certain American Indians from the “choice” Americans will face as of January of buying health insurance or paying Chief Justice Roberts’s special tax. But apparently this is a far narrower category of people than those recognized as “Indian” under various state laws:

The problem is so new that the federal government is still seeking to establish how many people might be affected, although Indian health advocacy groups estimate it could be up to 480,000.

In California alone, about 21,000 people who currently receive free health care through Indian clinics are not recognized as Native American by the federal government and would have to pay the penalty, according to the nonprofit California Rural Indian Health Board.

So people who’ve considered themselves American Indian all their lives and have been treated as such by their states–including for health care purposes–suddenly won’t be considered Indian as far as Obamacare is concerned. 

Wow–Indian law is complicated and constitutionally problematic enough without having further regulatory overlays bollix up the works even more. But that’s what happens when government encoraches more and more into civil society. As I wrote in January in an article on, of all things, the contraceptive mandate:

But there’s an even bigger issue here. This is just the latest example of the difficulties in turning health care—or increasing parts of our economy more broadly—over to the government. As my colleague Roger Pilon has written, when health care (or anything) is socialized or treated as a public utility, we’re forced to fight for every “carve-out” of liberty…

The more government controls—whether health care, education, or even marriage—the greater the battles over conflicting values. With certain things, such as national defense, basic infrastructure, clean air and water and other “public goods,” we largely agree, at least inside reasonable margins. But we have vast disagreements about social programs, economic regulation and so much else that government now dominates at the expense of individual liberty.

Obamacare delenda est.

Pakistan: Will the Third Time as Prime Minister be the Charm for Nawaz Sharif?

Pakistan always has been a good example of being careful for what one wishes when it comes to democracy in Third World nations. The Pakistani people theoretically rule the unstable nuclear state. Whether that actually is positive is not so clear.

In the latest election, Nawaz Sharif’s Pakistan Muslim League-Nawaz won a strong plurality, making him the almost certain prime minister. However, that position may be a poisoned chalice. When he was last premier, for the second time, in 1999, he found himself ousted in a coup, imprisoned for months, and eventually bundled into exile.

Despite the relatively free (though violence-laden) vote, Pakistan’s political, economic, and security problems are enormous. And the dangers of a failed state reach well beyond Pakistan’s borders. As I wrote in my latest Forbes online column:

for those who worry about an Islamic Bomb in Tehran, one already exists in Islamabad. Pakistan has between 90 and 120 warheads, and is producing more plutonium than any other nation on earth. The result likely will be an expanded arsenal. Observed Tom Hundley of the Pulitzer Center on Crisis Reporting: “Pakistan could end up in third place, behind Russia and the United States, within a decade.” Yet the contest with India has left Islamabad officials “hobbled by fear, paranoia, and a deep sense of inferiority,” in Hundley’s words. At the same time, Pakistan has increasingly dispersed its warheads to frustrate any U.S. attempt to seize the weapons. The practice increases the possibility of radicals grabbing a warhead or fissile material.

Oh joy.

Although only the Pakistani people can fix their own country, Washington could help. It should wind down the war in Afghanistan, which is a destabilizing force in Pakistan. The U.S. should reduce its use of drones, which have made America hated by Pakistanis. Washington should resist the temptation to dump ever more foreign “aid” into the corrupt and incompetent institution known as the Pakistani government. Finally, Americans should hope—and pray!—that Nawaz Sharif has learned something during his 14 years in the political wilderness.

Cultural Sensitivity or Surrender?

One of the most important lessons one learns from traveling abroad is to be culturally sensitive. A self-professed sophisticate like myself would never want to be considered to be the prototypical “Ugly American.”

Yet as I’m visiting the Persian Gulf kingdom of Qatar I’ve been thinking about who gets to decide on culture.

Most of us believe that certain practices are beyond the bounds of tolerance. Consider the Indian practice of suttee—the burning of widows—which Britain banned. Set aside whether the British government should have shown up with soldiers, guns, and warships and claimed the Indian subcontinent as its own; once there, surely it was right to forbid murder.

In a story that may be apocryphal but should be true even if not, an Indian complained to a British colonial official that it was tradition to burn widows on their deceased husbands’ funeral pyres. The official replied, according to the story, that it was British tradition to execute those who burned widows on their deceased husbands’ funeral pyres.

Of course, nothing like suttee is going on in Qatar. Indeed, as Muslim societies go, it is a pretty liberal place. Observance of conservative Islamic tenets is routine but often not deeply held. Some younger Qatar citizens (and TV cameramen!) look a lot like their Western counterparts. I wasn’t the only person on my flight to arrive wearing shorts. Hotels that cater to Westerners serve alcohol and provide Western television stations. Men and women use the gym together.

Still, visitors are warned to be sensitive, especially of dress. People should be modest in all circumstances. Shorts are tolerated, but should hit the knee. Shoulders should be covered.

Support for School Choice Tax Credits Grows Once Implemented

The unanimous decision of the Iowa legislature to expand the state’s scholarship tax credit (STC) program yesterday once again demonstrates that school choice programs grow even more popular once implemented.

Iowa’s STC expansion bill raises the credit cap from $8.75 million to $12 million and expands the types of corporations eligible to receive tax credits for donations to scholarship organizations. The bill adds no new regulations.

Six of the seven states with STC programs enacted before 2010 have subsequently voted to expand those programs. The chart below shows the legislative support and opposition in four of those states. (The expansions in Indiana and Pennsylvania were part of legislation covering other issues so they were excluded from this analysis. The chart includes information for Arizona’s corporate-donor STC program but not its individual-donor STC program, for a similar reason.)

 

Initial Vote For STC Program

Most Recent STC Expansion

State

Year

For

Against

% Difference

Year

For

Against

% Difference

Arizona House

2006

33

26

12%

2012

37

19

32%

Arizona Senate

2006

16

13

10%

2012

20

9

38%

Florida House

2001

76

39

32%

2012

92

24

59%

Florida Senate

2001

33

4

78%

2012

32

8

60%

Georgia House

2008

92

73

12%

2013

168

3

96%

Georgia Senate

2008

32

20

23%

2013

40

11

57%

Iowa House

2006

75

19

60%

2013

97

0

100%

Iowa Senate

2006

49

1

96%

2013

49

0

100%

The most dramatic shift was in Georgia’s State House, which moved in just a few years from a fairly even divide to overwhelming support. Support in Iowa went from overwhelming to unanimous. While Florida’s Senate barely moved, support has grown considerably in the House. Arizona has also had modest increases in support for school choice in both chambers.

A survey by Harvard University’s Program on Education Policy and Governance found that 72 percent of the American public already supports scholarship tax credit programs. The survey found even higher support among parents, African-Americans, Hispanics, and registered Independents and Democrats.

There have not yet been any studies measuring whether support in a given state increases after enacting an STC program, but if legislative support is a reliable proxy then the answer appears to be in the affirmative.

Target the IRS—and the Abusive Administrative State

The IRS scandal has appropriately tarred the Obama administration. But IRS abuse is not new: Franklin Delano Roosevelt, John Kennedy, and Richard Nixon all shamelessly used the tax authorities against their political enemies.

Thus, the problem is nonpartisan. More important, to paraphrase Rahm Emanuel, this scandal will be wasted if we don’t use it to advance the cause of liberty. The real issue is the expansive, expensive bureaucratic state, which threatens any system of limited government, rule of law, and individual liberty.

As I wrote in my recent article on American Spectator online:

the broader the government’s authority, the greater its need for revenue, the wider its enforcement power, the more expansive the bureaucracy’s discretion, the increasingly important the battle for political control, and the more bitter the partisan fight, the more likely government officials will abuse their positions, violate rules, laws, and the Constitution, and sacrifice people’s liberties.

One response to the scandal would be tax reform. But failing to address the broader underlying causes of the scandal would set the stage for a repeat performance in some form a few years hence. At the very least the latest IRS abuses should derail the Obama administration’s efforts to ever-expand the federal government.

The response should not be merely defensive. Americans should insist on abolishing the IRS as we know it. Ending tax-based social engineering would help. Moreover, government–and especially the national government–should do less.

Americans must decide if they want to live in a truly free society. Government increasingly attempts to run our lives at our expense. And now, we see yet again, public officials use their power to reward friends and punish enemies. Firing a couple of mid-level IRS employees isn’t enough. People must insist on real change in Washington.

Man Saves Child’s Life; Fined $1,000

Benjamin Srigley saw several pit bulls attacking an 11-year-old boy, so he ran into his home, retrieved his handgun, ran back, and shot one of the dogs. A bicycle policeman arrived on the scene shortly thereafter and shot the other two dogs. 

Here comes the twist: This incident happened in Washington, D.C., and even though the Supreme Court declared the city’s gun control regulations unconstitutional in 2008, the city government is still quite hostile to gun ownership. How hostile? Well, prosecutors offered Srigley a “deal”: pay a $1,000 fine and they would drop criminal charges against him. Turns out Srigley had lawfully purchased firearms when he lived outside D.C., but he had not registered them when he moved into D.C.

What kind of government would demand money from a guy who just saved a child’s life? The boy’s family can’t believe what is happening to their knight in shining armor. Srigley is now planning to move out of the city. One wonders if District officials can see any connection between their fine and the move.

On June 4, Cato will be hosting an event about the landmark Heller ruling. Registration information can be found here.

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