Tag: obama

NEA Asks President to Nationalize Industries

The NEA demands that “a dying laissez faire must be destroyed,” and calls on the president to nationalize the credit agencies, utilities and major industries (see AP story at right), and we hear hardly a peep from the punditocracy. Strange.

Well, okay, I’m not actually surprised. This is a real story that actually ran on March 1st… 1934. I tweaked the image to refer to president Obama rather than FDR.

It’s taken three quarters of a century, but the NEA’s plan to nationalize the credit agencies and major industries seems to have finally gotten under way, particularly given the recent assertion of federal control over GM.

One advantage of the delay is that we now have generations of experience with another state-run industry, education, as a guide for what to expect from the latest state takeovers.

And since the president (Obama, not FDR) is starting with GM, it seems only fitting to take a look at the public schools of Detroit. Rather than give you the typical statistical wonkery, though, I thought I’d point readers to this compelling photo essay.

After flipping through it, do you think the Detroit auto industry would have worked better over these past 75 years if it had been run like the Detroit public schools?

Why President Obama Won’t Save Urban Catholic Schools

In today’s Washington Post, Checker Finn and Andy Smarick ask President Obama to save the nation’s vanishing urban Catholic schools. Their commentary does a good job of explaining why he might want to do that: Catholic schools are typically bastions of excellence in otherwise educationally blighted inner-city areas. Economist Derek Neal has shown that black children attending these schools are 26 percentage points more likely to finish high school, and twice as likely to graduate from college, than similar students attending urban public schools.

Finn and Smarick also suggest ways that president Obama could bring the option of private schooling, including Catholic schools, within reach of all families – supporting the spread of state tax credit and scholarship programs around the country, for instance.

What Finn and Smarick don’t do is explain why the president will continue to ignore the evidence and their plea, instead letting the educational prospects of inner-city children erode even further. Three possible explanations occur to me:

  • The president is unfamiliar with the evidence on the superiority of private and especially urban Catholic schools
  • He thinks that his administration will succeed in dramatically improving public schools all over the country, despite the failure of all his predecessors’ efforts
  • He thinks that making it easier for poor parents to choose private schools would hurt him politically

Personally, I don’t believe the first explanation. I can believe the second, but wish I couldn’t (wouldn’t it be nice to have a realist in the Oval Office)? And I can certainly believe the third, but if so, the president simply hasn’t done the political math.

Coming out strongly in favor of public and private school choice at the state level would win Barack Obama substantial new support from independent and moderate swing voters who seem to have been drifting away from him, while costing him very little from his base. The NEA might reduce its level of support, but they’re not going to flip and back Republicans. And few if any Democratic voters would switch party allegiance over a Democratic president’s desire to help poor kids with the most effective policies.

New at Cato

Here are a few highlights from Cato Today, a daily email from the Cato Institute. You can subscribe here.

  • Scott Lincicome discusses how the Obama administration has put U.S. leadership in free trade in jeopardy.
  • Ted Galen Carpenter discusses President Obama’s recent trip to Mexico to meet with President Felipe Calderon.
  • Appearing on PBS, Cato Chairman Robert A. Levy debates the state of American gun laws.
  • In today’s Cato Daily Podcast, John Samples discusses what the “Tea Party” protests mean for the GOP.

The President’s Make-Believe Fiscal Conservatism

At first, I thought the calendar was wrong and it must be April 1 and the White House was playing an April Fool’s joke. That seemed like the only logical explanation for a story in today’s Washington Post stating that the President wants all government departments to identify $100 million in supposed budget cuts. With 14 cabinet-level departments, that adds up to $1.4 billion of savings – and those savings almost certainly be measured against an ever-increasing budget baseline, which means that they would merely be reductions in planned increases. This is a shallow and insincere stunt to trick taxpayers. This is the same President, after all, that just squandered nearly $800 billion on a so-called stimulus bill. And this is the same President that just rammed through a $3.5 trillion budget. This chart provides a useful comparison.

For those who appreciate irony (or perhaps a late April Fool’s joke), the Washington Post story makes for interesting reading:

President Obama plans to convene his Cabinet for the first time today, where he will order members to identify a combined $100 million in budget cuts over the next 90 days, according to a senior administration official. Although the cuts would account to a minuscule portion of the federal budget, they are intended to signal the president’s determination to trim spending and reform government, the official said. …In his radio and Internet address Saturday, Obama repeated his vow for his administration to scour the federal budget “line by line” to reduce spending.

Update: Some people have written to say that Obama is asking his team to come up with a combined $100 million, not $100 million from each department. So my initial post gave him 14 times too much credit. This is almost beyond parody.

Week in Review: Tax Day, Pirates and Cuba

Tax Day: The Nightmare from Which There’s No Waking Up

Cato scholars were busy exposing the burden of the American tax system on Wednesday, the deadline to file 2008 tax returns.

At CNSNews.com, tax analyst Chris Edwards argued that policymakers should give Americans the simple and low-rate tax code they deserve:

The outlook for American taxpayers is pretty grim. The federal tax code is getting more complex, the president is proposing tax hikes on high-earners, businesses, and energy consumers; and huge deficits may create pressure for further increases down the road…

The solution to all these problems is to rip out the income tax and replace it with a low-rate flat tax, as two dozen other nations have done.

At Townhall, Dan Mitchell excoriated the complexity of the current tax code:

Beginning as a simple two-page form in 1913, the Internal Revenue Code has morphed into a complex nightmare that simultaneously hinders compliance by honest people and rewards cheating by Washington insiders and other dishonest people.

But that is just the tip of the iceberg. The tax code also penalizes economic growth, distorts taxpayer behavior, undermines American competitiveness, invites corruption and promotes inefficiency.

Mitchell appeared on MSNBC, arguing that every American will soon see massive tax hikes, despite Washington rhetoric.

Don’t miss the new Cato video that highlights just how troubling the American tax code really is.

U.S. Navy Rescues Captain Held Hostage by Somali Pirates

gallery-somali-pirates-pi-003USA Today reports that the captain of a merchant vessel that was attacked by Somali pirates was freed Monday when Navy SEAL sharpshooters killed the pirates. The episode raises a larger question: How should the United States respond to the growing threat of piracy in the region?

Writing shortly after Capt. Richard Phillips was freed, foreign policy expert Benjamin Friedman explained the reasons behind the increase in piracy:

It’s worth noting the current level of American concern about piracy is overblown. As Peter Van Doren pointed out to me the other day, the right way to think about this problem is that pirates are imposing a tax on shipping in their area. They are a bit like a pseudo-government, as Alexander the Great apparently learned. The tax amounts to $20-40 million a year, which is, as Ken Menkhaus put it in this Washington Post online forum, a “nuisance tax for global shipping.”

The reason ships are being hijacked along the Somali coast is because there are still ships sailing down the Somali coast. Piracy is evidently not a big enough problem to encourage many shippers to use alternative shipping routes. In addition, shippers apparently find it cheaper to pay ransom than to pay insurance for armed guards and deal with the added legal hassle in port. The provision of naval vessels to the region is an attempted subsidy to the shippers, and ultimately consumers of their goods, albeit one governments have traditionally paid. Whether or not that subsidy is cheaper than letting the market actors sort it out remains unclear to me.

Appearing on Russia Today, Friedman discussed the implications of the increased threat and what ships can do to avoid future incidents with Somali pirates.

Since the problems at sea are related to problems on Somali land, what can Western nations do to decrease poverty and lawlessness on the African continent? Dambisa Moyo, author of Dead Aid, argued at a Cato Policy Forum last week that the best way to combat these issues is to halt government-to-government aid, and proposed an “aid-free solution” to development based on the experience of successful African countries.

Obama Lifts Some Travel Bans on Cuba

The Washington Post reports:

President Obama is lifting some restrictions on Cuban Americans’ contact with Cuba and allowing U.S. telecom companies to operate there, opening up the communist island nation to more cellular and satellite service… The decision does not lift the trade embargo on Cuba but eases the prohibitions that have restricted Cuban Americans from visiting their relatives and has limited what they can send back home.

In the new Cato Handbook for Policymakers, Juan Carlos Hidalgo and Ian Vasquez recommend a number of policy initiatives for future relations with Cuba, including ending all trade sanctions on Cuba and allowing U.S. citizens and companies to visit and establish businesses as they see fit; and moving toward the normalization of diplomatic relations with the island nation.

While Obama’s plan is a small step in the right direction, Hidalgo argues in a Cato Daily Podcast that Obama should take further steps to lift the travel ban and open Cuba to all Americans.

Topics:

What “Taxpayers?”

In an editorial yesterday on President Obama’s proposal to end federal guaranteed student lending and turn everything into loans and grants direct from Uncle Sam, the New York Times had an interesting take on what constitutes putting ”taxpayers’ interests first”:

Private companies that reap undeserved profits from the federal student-loan program are gearing up to kill a White House plan that would get them off the dole and redirect the savings to federal scholarships for the needy. Instead of knuckling under to the powerful lending lobby, as it has so often done in the past, Congress needs to finally put the taxpayers’ interests first.

So let me get this straight: Redirecting tax dollars from lenders – who do get cushy fees and security through the guaranteed loan program – and giving it to students is somehow in the best interest of taxpayers? Maybe I’m old fashioned or something, but wouldn’t the best thing for taxpayers be to get their money back, not just see it shuffled from one special interest to another?

Obviously it would, and not just because taxpayers are best off when they decide how their ducats are used. As Andrew Gillen and I made clear in a Capitol Hill briefing last week, the best thing that could happen for taxpayers, students, and all of society would be for the federal government to provide much less aid to students, not more. The reality is that student aid drives massive, self-defeating college price inflation, creates ugly bloat and waste in our ivory towers, and ultimately cramps economic growth.

And we wonder why there are tea parties!