Tag: aei

Only the Little People Oppose Common Core

With the Common Core – national curricular standards in English and math – having been adopted by 45 states, it seems Core supporters’ heads might be getting a bit big. Or, at least, they are starting to more openly express their feelings that Core opponents are very small. Like “little people” who pay taxes small.

The reputed Leona Helmsley quote is, actually, highly apropos for the view expressed by Mitchell Chester, education commissioner for the state of Massachusetts, at a recent AEI conference on implementation and governance of the Common Core. At the end of a session in which, alas, there was a fair amount of contempt expressed for supposedly conspiracy-theorizing Core opponents, Chester gratuitously threw in a small diatribe excoriating anyone who would object to the Core based on its cost. Keep in mind, reasonable estimates of the cost of fully bringing on Common Core hit as high as $16 billion

Start at the 1:10:00 mark to hear Chester say, essentially, if it will help kids, people simply have no “right” to object to the Common Core based on costs:

Chester may, indeed, think that only the little people pay taxes, or at least only very small people would care how tax dollars are spent if spending is supposed to help “the children.” Of course, that’s much easier to feel when you are using other people’s hard-earned money. It’s far less painful to act like any decent person would be above worrying about something as pedestrian as cost when you are not the one getting hit with the $16 billion bill.

Alas, this was not the only contempt expressed by Core supporters at the conference. Playing on comments made in Mitchell Chester’s panel suggesting that Core opponents were weaving ridiculous conspiracy theories, such as the United Nations using the Core to take over the country, in the subsequent panel Chester Finn, President of the Thomas B. Fordham Institute, responded to my fears that the federal government would take responsibility for enforcing the Core by flippantly saying the U.N. or OECD would do it. Start at the 36:10 mark to catch my comments and Finn’s dismissive, evasive response:

That’s right, forget Race to the Top, NCLB waivers, federally selected and funded tests – oh, and the Obama Administration’s NCLB reauthorization proposal, which put national standards at its accountability core – and stop with all the “federal control” falderal! Heck, even forget Finn’s own writing on this!

Common Core opponents, you are very small people. But even you deserve much more openness and seriousness than some Common Core supporters appear willing to give you. After all, your money – and your children – are wrapped up in this, too.

An Alleged Decline in Economic Mobility and Arthur Brooks’s ‘47 Percent Solution’

A Wall Street Journal article by Arthur C. Brooks, president of the American Enterprise Institute, urges presidential candidate Mitt Romney to acknowledge two “simple facts” about income inequality. One is that “low-income Americans are struggling,” which is surely true by definition. The second is that “economic opportunity is declining.” The author scolds the Republican convention for being too cheerful about the facts, as though Romney never mentioned shrinking median income, or high poverty and unemployment.

That second “simple fact” (declining opportunity) is not simple and not a fact. When Mr. Brooks asserts that opportunity is declining, he means “mobility” supposedly declined before 2006 according to one source—a 12-page brief by Katharine Bradbury of the Boston Fed.   But “mobility” is not at all the same as “opportunity,” because studies of this sort treat downward mobility the same as upward mobility. Bradbury is troubled by people making fewer big leaps from one fifth (quintile) to another, which Mr. Brooks likewise defines as declining opportunity; yet her data cannot distinguish ups from downs.

What is ostensibly being measured is the percentage of people in each fifth (quintile) of the income distribution who spend five or six years out of 10 in either the “same or adjacent” quintile. Bradbury compares three 10-year periods: 1976 to 1986, 1986 to 1996, and 1996 to 2006 and finds 27.4 percent remained in the poorest quintile during the earliest period and 25.9 percent in the most recent 10 years.  Since that suggests increasing mobility for the poor, she switches to emphasizing how many remained in either the same “or adjacent” quintile. This permits Bradbury to argue that those in the poorest or richest quintiles “did not move very far.”

Switching to “adjacent” quintiles means anyone in the top or bottom quintile would have to leap all the way to the middle to be counted as having moved at all. Since those at the bottom or top can only move in one direction, Bradbury therefore finds (of course) that for “those in the poorest or richest quintile… mobility is quite low.” People in other quintiles can move either up or down, so their “mobility” appears higher by this peculiar definition, particularly during severe recessions.

It is unsurprising that there was greater movement (up and down) between adjacent income groups in 1976-86, since that period included nasty inflationary recessions in 1980-82, followed by four years of 4.8 percent economic growth. The 1986-96 period, by contrast,  experienced a barely measurable slump in 1991, while 1996-2006 included the exhilarating tech boom of 1997-2000 and the perilous housing boom of 2004-2006. When the economy is rising steadily there is less risk of falling to a lower quintile, hence less movement (aka “mobility”). Since Brooks and Bradbury define income  stability as “declining opportunity,” they would presumably define 1929-33 or 2008-2009 as periods of rising opportunity.

A more serious study of income mobility by Treasury economists Gerald Auten and Geoffery Gee in the June 2009 National Tax Journal found,  “considerable income mobility in the U.S. economy over the 1987–1996 and 1996–2005 periods. Consistent with prior mobility studies, the data show that over half of taxpayers moved to a different income quintile and that roughly half of taxpayers who began in the bottom income quintile moved up to a higher income group by the end of each period. By contrast, those with the very highest incomes in the base year [the top 1 percent] were more likely to drop to a lower income group and the median real income of these taxpayers declined in each period. Economic growth resulted in rising incomes for most taxpayers over both time periods.” The largest percentage increases in real incomes were for those initially in the lowest income groups, while the most dramatic downward mobility was among those who had briefly occupied the top 1 percent.  This evidence is consistent with my own work showing that rising income shares for the top 1 percent have been associated with falling poverty rates and vice-versa.

ObamaCare Is Pro-Market Like the Berlin Wall Was Pro-Migrant

Today’s New York Times features an opinion piece by J.D. Kleinke of the conservative American Enterprise Institute. Kleinke’s thesis is that ObamaCare’s conservative opponents should stop complaining. “ObamaCare is based on conservative, not liberal, ideas.”

If one defines conservative ideas as those that emphasize free markets and personal responsibility, there is zero truth to this claim.

  • Free markets require freedom, like the freedom to control your own property, to enter markets, and to negotiate prices and other contractual terms. ObamaCare mandates how people must dispose of their property, imposes tremendous barriers to entry into markets, and imposes price controls and myriad other terms on ostensibly private contracts.
  • Market prices are the lifeblood of a market economy. Kleinke considers them a “flaw” that ObamaCare uses “market principles” to “correct.”
  • As I have written elsewhere, ObamaCare “promotes irresponsibility by allowing healthy people to wait until they get sick to buy coverage. It creates that free-rider problem, which has been known to make insurance markets collapse. Supporters of the law could have taken personal responsibility for this instability they introduced into the market—say, by volunteering to pay the free riders’ premiums. Instead, they imposed a mandate, which attempts to stabilize the market by depriving others of their money and freedom. Forcing others to bear the costs of your decisions is the opposite of personal responsibility.”
  • Employers are hardly “free to decide” under a law that penalizes them for not offering government-designed health benefits.
  • Kleinke is apparently unaware that half of the $2 trillion of new government spending in this “pro-market” law comes from a massive expansion of a tax-financed, government-run health insurance program that crowds out private markets – Medicaid.

I could go on.

Even if one adopts the more forgiving definition that conservative ideas are whatever ideas conservatives advocate, there still isn’t enough truth to sustain Kleinke’s point. Yes, the conservative Heritage Foundation trumpeted ObamaCare’s regulatory scheme from 1989 until around the time a Democratic president endorsed it. But as National Review’s Ramesh Ponnuru writes, accurately, “The think tankers were divided, with the Heritage Foundation an outlier. It was an outlier, too, in the broader right-of-center intellectual world.” Kleinke even flubs the paternity of the individual mandate, which he says is “an idea forged not by liberal social engineers at Brookings but conservative economists at the Heritage Foundation.” In fact, the idea originated with Randall Bovbjerg of the left-wing Urban Institute.

Kleinke has done insightful work. This oped is just nutty, and emblematic of the lack of intellectual rigor among the Church of Universal Coverage members residing in both left-wing and right-wing think tanks.

NATO: Theater of the Absurd

I don’t know what the right word is here, but there is something remarkable about the fact that the United States is currently borrowing money from China to buy precision-guided munitions to give to the Europeans to drop on Libya, isn’t there?

At AEI on Tuesday, Defense Secretary Robert Gates responded to a question about removing U.S. troops from Europe by saying that bringing them back home and having to build facilities to base them here actually would be about a wash, money-wise. That’s probably correct, but the real question is why we shouldn’t bring them home and disband their units. On that logic, Gates remarked that Europe “is one of the places where an American presence has a significant impact on our allies, on our friends, and on everybody for that matter.”

He’s right. It does have a significant impact on our allies: it encourages European countries to let their defenses atrophy to the point where they aren’t even capable of beating up on a third-rate military like Libya’s without our help. The irony here is that this phenomenon is something Gates has whined about previously. But until an American defense policymaker can put two and two together and figure out that if we defend Europe, Europeans won’t, we’re going to be stuck in this ridiculous feedback loop.

No, Paul Ryan Really Doesn’t Cut Pentagon Spending

Last week I expressed my disappointment with Paul Ryan’s budget plan, specifically about his unwillingness to cut military spending. Some people think that he does cut spending through his acceptance of Secretary Gates’s $78 in “cuts.” (see, for example, Sen. John Sununu; Sen. Joseph Lieberman, AEI’s Gary Schmitt and Tom Donnelly; and the Heritage Foundation’s Baker Spring).

So either I am wrong, or they are. Let me try to set the record straight.

First, all of Ryan’s other savings – savings which I support – were projected either against the Obama administration’s FY 2012 budget or against the current budget baseline. For example, according to Ryan’s own “Key Facts” his plan “Cuts $6.2 trillion in government spending over the next decade compared to the President’s budget, and $5.8 trillion relative to the current-policy baseline.” With respect to military spending, however, Ryan’s plan basically follows the Obama/Gates budget, proposing to spend a staggering $670.9 billion in FY 2012. The Obama administration’s DoD budget request for FY 2012 – including the Pentagon’s base budget plus overseas contingency operations (OCO) – totals $670.9 billion as well.  Of course, that total leaves out national defense spending tucked away in other departments (including nuclear weapons spending in the Department of Energy). Total national defense spending in FY 2012 will top $700 billion. I stand by my earlier assertion that the Pentagon’s budget escapes from Ryan’s budget axe “essentially unscathed.”

Ryan and others claim that military spending has already been cut, hence the decision to embrace this portion of the president’s budget. Sen. Lieberman explained to Bloomberg news, “To a certain extent, Secretary Gates has enabled us at least temporarily to take defense off the table because he has initiated his own round of defense cuts.”

“To a certain extent” is doing a lot of work in that statement. In fact, Gates and Obama do not cut military spending.

First, they don’t claim to do so. These supposed cuts are only “cuts” in Washington-speak. The Pentagon’s base budget under both the Ryan and Obama plans will increase 1 percent in real, inflation-adjusted terms. See the table below, recreated by my colleague Charles Zakaib from the official DoD budget request.

Second, Ryan claims that Gates’s “exhaustive review of the Pentagon’s budget” identified $178 billion in savings. It does nothing of the sort. By Ryan’s own admission, taxpayers will see only $78 billion of these; the other $100 billion are to be “reinvested” elsewhere in the Pentagon. (They’re always “investments” when you’re spending the taxpayers’ money, even when Republicans do it.)

So we’re really talking about $78 billion toward deficit reduction over the next five years, or approximately 2.6 percent of the Pentagon’s base budget (excluding the wars) over that same period. With all due respect, that isn’t a bold plan for reducing the crushing burden of spending and debt; that’s a rounding error.

What’s more, it is highly unlikely that these savings will materialize. Many of these efficiencies involve consolidation of commands – something that Congress has already balked at – and unspecified savings that are relatively easy to identify, but extremely difficult to implement.

But if, by some miracle, Robert Gates’s successor(s) manage to get them passed by Congress, those savings won’t actually be dedicated to deficit reduction: they will be completely devoured by spending on the wars. This is the greatest sham of all. Charles Knight at the Project on Defense Alternatives (and a key contributor to the Sustainable Defense Task Force, of which I was also a member) explains:

For several years now White House budget projections have included a “placeholder for outyear overseas contingency operations” most of which are accounted for by the wars in Iraq and Afghanistan. This placeholder number has been and remains $50 billion. Every year actual OCO (overseas contingency operations) spending turns out to be several times that number. FY11′s OCO is $159 billion and FY12′s is $118 billion.

Adjusting for the effect of the new OCO for FY12, the $68 billion budgeted above the placeholder of $50 billion eats up most of the $78 billion in Pentagon cuts that Secretary Gates offered up in January to fiscal responsibility….The remaining $8 billion (and much more) will go to the war budgets when reality collides with placeholder projections.

On 14 February Pentagon Comptroller Hale confirmed that the $50 billion placeholders for FY13 and beyond was the “best we can do.” Others make an attempt to be more realistic. The high tech industry association called Tech America annually projects DoD budgets for ten years out. In their 2010 projection they estimate that OCO spending will be $102 billion in FY13, $69 billion in FY14 and $57 billion in FY15. When we subtract the $50 billion placeholder for each of those years and total the remainder we find that the Pentagon is likely to spend $78 billion more in the years FY13 through FY15 than in the White House budget projections.

I hope that I’m proved wrong. I hope that the wars in Iraq and Afghanistan are brought to a close. I hope that the Congress gets serious about tackling Pentagon waste, and stops treating the military budget as an elaborate jobs program. I hope that our brave men and women in uniform get the hardware, equipment, and training that they need, and that Americans get the “defense budget” that they deserve. But if past history is any guide, the Pentagon’s budget will continue to climb, other countries around the world will continue to free ride on Uncle Sam’s largesse, and U.S. taxpayers will be left to foot the bill.

Could the U.S. Stop Israel from Bombing Iran?

Last night, Chris Matthews presided over an odd, staccato interview with AEI’s Michael Rubin and Time magazine’s Bob Baer that was enough to make one feel sorry for the interviewees.  Matthews was wildly whipping questions at Rubin and Baer, but they both did an admirable job returning Matthews’ volleys.

One interesting topic that came up was whether the Obama administration should discourage Israel from attacking Iran.  Rubin and Baer agreed that at this point an Israeli attack would be unhelpful and should be discouraged, but Baer noted that our ability to prevent such an attack is “zero.”  They agreed that the likelihood of an Israeli strike in the next year was “greater than 50-50” and Rubin suggested that the Israeli timeline for an attack was “months if not weeks.”

Zbigniew Brzezinski recently broached the subject of Israeli overflight of Iraqi airspace in an unfortunately provocative manner, telling the Daily Beast that the United States ought to make clear to the Israelis that there was a real danger of “a Liberty in reverse,” meaning the prospect that Israeli aircraft overflying Iraq may find themselves under fire from the United States, the de facto owners of Iraqi airspace.  (The Iraqi government that we have helped obtain power almost certainly would be under great pressure to respond militarily to Israeli overflight.)  Neoconservatives predictably pounced on this framing.

Readers interested in the technical questions surrounding a potential Israeli strike can find an optimistic assessment here. [.pdf] But this larger issue of whether the United States could stop Israel from doing something contrary to American interests reminded me of this passage George Kennan wrote about U.S. involvement in the Middle East more generally in 1977.  In The Cloud of Danger, Kennan called on U.S. policymakers to

kennanbring about an early clarification–not just vis-a-vis the Israelis themselves but also vis-a-vis the Arabs–of the limits of our responsibility for Israeli policy.  We have allowed the impression to become established throughout the entire region that we have it in our power to make the Israelis do almost anything we want, and that this being the case, we are really responsible for Israeli policy.  This assumption is reflected in a host of Arab statements.  It is, of course, wholly incorrect.  Not only can we not dictate to the Israelis, who are very well aware of the strength of their bargaining power vis-a-vis us, but it is a real question whether we ought to do it even if we could.  (More about that in a moment.)

[…]

[W]e have allowed ourselves to be maneuvered into a position where each of the two parties believes it can use us for its own ends, where each has the impression that it is primarily through us that its desiderata can be achieved, with the result that we are always first to be blamed, no matter whose ox is gored; and all this in a situation where we actually have very little influence with either party.  Seldom, surely, can a great power have got itself into a more unsound and unnecessary position.

I stand firmly with [George] Ball on the need for an attempt to reach an understanding with the Soviet Union with relation to the larger problems of the region, but not on the details of a possible Arab-Israeli settlement.  That, it seems to me, should be left for direct negotiation between Israel and her Arab neighbors.  Our own role should be confined to assuring that the Israelis are strong enough militarily so that the idea of crushing them by force of arms does not offer promising prospects to anybody, and so that they have an adequate measure of bargaining power in any negotiations on these subjects they may enter into.  But we should not try to tell them, or the Arabs, what the terms of a settlement should be.  It is they, after all, not we, who would have to live with any settlement that might be achieved.  Many of us can think, I am sure, of concessions which, in our personal opinion, it would be wise for the Israelis to make; but for the United States government to take the responsibility of urging them to make such concessions is quite another matter.  There are many who would think, for example, that it would be wise for them to give up the Golan Heights.  They may of course be right.  But how can we be sure?  What would our responsibility be if we urged this upon them and it turned out to be disastrous?

A couple of thoughts.  First, obviously the repeated references to “the Arabs” reflect the book’s authorship pre-1979.  Second, Kennan is clearly uncomfortable with a situation in which a foreign country, fairly pursuing what it perceives to be its own interests, can pull America along for the ride.  (This is a mainstream position in U.S. views of Israel today: the idea that the United States should write Israel a blank check and allow that country to do what it may, with lockstep American support.)  Third, and I think most interesting, is Kennan’s discomfort at the prospect of directing Israel’s foreign policy ourselves.  (This is an increasingly mainstream position in the foreign-policy debate today, where U.S. analysts decide that they can perceive Israeli interests better than the Israelis can, so we should intervene and pressure them to act as we think they should.)

Kennan recognized that the Israelis, unlike the United States, live in a rough neighborhood and that they simply have different national interests than we do.  But the idea that we ought to demand various concessions from the Israelis, or attempt to dictate their foreign policy to them, appears to have horrified Kennan.  Decisions about Israeli security could have serious consequences for the people who live there, and for Kennan this seems to have been a strong argument for putting the weight of costs and benefits squarely on the shoulders of the Israelis themselves, beyond the (unlikely, even in 1977) prospect of Israel being militarily overrun.

To listen to the Matthews-Baer-Rubin discussion today, the Israelis are preparing to do something contrary to U.S. national interests about which we can do nothing.  As Kennan wrote, “Seldom, surely, can a great power have got itself into a more unsound and unnecessary position.”