Tag: Politico

An Appalling Breach of Decorum

This morning, Politico Arena invites comments on Obama’s SOTU attack on the Supreme Court.

My response:

I join my Arena colleagues, Professors Bradley Smith and Randy Barnett, in condemning the president’s remarks last night singling out the Supreme Court for its Citizens United decision last week, which overturned law that the government itself admitted would even have banned books.  Not only was Obama’s behavior an appalling breach of decorum, but he didn’t even get his facts right.  As Brad, former FCC chairman, noted in his Arena post last night, and a bit more fully here, the decision did nothing to upset law that prohibits foreigners, including foreign corporations, from contributing anything of value to an American election.  Obama, the sometime constitutional law professor, should have known that.  At the least, his aides had plenty of time to research the question before he spoke.  This is just one more example of the gross incompetence or, worse, the indifference to plain fact that we’ve seen in this administration.

But it’s the breach of decorum that most appalls.  By constitutional design, the Supreme Court is the non-political branch of government.  Like members of the military, Supreme Court justices are invited to the State of the Union event, but they do not stand and applaud when the president makes political points that bring others to their feet.  For the president to have singled the justices out for criticism, while others around them stood and applauded as they sat there still, is simply demagoguery at its worst.  I would not be surprised if the justices declined next year’s invitation.  And Obama wanted to change the tone in Washington?  He sure has.

Democracy Will Survive Citizens United

At Politico Arena, today’s focus is on the Court and campaign finance.

My comment:

The ink is barely dry on today’s Citizens United opinion, and the hysteria has already begun.  Set aside the misunderstandings we’re seeing in some of the comments here at the Arena – corporations still cannot, for example, contribute directly to campaigns – even some of those who understand the law and this decision would have us believe that the world as we know it is coming to an end.  Thus, the inimitable Rick Hasen, whose knowledge of these issues is second to none, tells us that “today’s Supreme Court opinion marks a very bad day for American democracy.”  And attorneys at NYU’s Brennan Center, which made its reputation promoting campaign finance “reform,” head up their post with this: “After the Flood: How to Save Democracy Post Citizens United.”  One imagines the Dark Ages just beyond the gloaming.
 
Over on the Hill, meanwhile, Senator Russ Feingold, who’s having a bad day in what must for him be a bad week, promises darkly, “In the coming weeks, I will work with my colleagues to pass legislation restoring as many of the critical restraints on corporate control of our elections as possible.”
 
Relax.  Half of our states, states like Virginia, have minimal campaign finance laws, and there’s no more corruption in those states than in states that strictly regulate.  And that’s because the real reason we have this campaign finance law is not, and never has been, to prevent corruption.  The dirty little secret – the real impetus for this law – in incumbency protection.  How else to explain the so-called Millionaire’s Amendment, which the Court struck down in 2008.  That little gem in the McCain-Feingold “reform” package exempted candidates (read: incumbents) from the law’s strictures if they were running against a self-financed “millionaire,” who could not be prohibited from spending his own money campaigning.  Thus, the nominal rationale for the incomprehensible edifice we call “campaign finance law” – to prohibit corruption – suddenly disappeared if you were running against a millionaire.  Well, the Court, fortunately, saw right through that.  And a majority on the Court saw the light in today’s decision, too.  The First Amendment is not a “loophole.”  It’s the very foundation of our democracy, and we are the stronger today for this decision.

Obama’s Other Massachusetts Problem

Even if Democrat Martha Coakley wins 50 percent of the vote in the race to fill the late Sen. Ted Kennedy’s (ahem) term, there are other numbers emanating from Massachusetts that present a problem for President Obama’s health plan.

On Wednesday, the Cato Institute will release “The Massachusetts Health Plan: Much Pain, Little Gain,” authored by Cato adjunct scholar Aaron Yelowitz and yours truly. Our study evaluates Massachusetts’ 2006 health law, which bears a “remarkable resemblance” to the president’s plan. We use the same methodology as previous work by the Urban Institute, but ours is the first study to evaluate the effects of the Massachusetts law using Current Population Survey data for 2008 (i.e., from the 2009 March supplement).  Since I’m sure that supporters of the Massachusetts law and the Obama plan will dismiss anything from Cato as ideologically motivated hackery: Yelowitz’s empirical work is frequently cited by the Congressional Budget Office, and includes one article co-authored with MIT health economist (and Obama administration consultant) Jonathan Gruber, under whom Yelowitz studied.

Among our findings:

  • Official estimates overstate the coverage gains under the Massachusetts law by roughly 50 percent.
  • The actual coverage gains may be lower still, because uninsured Massachusetts residents appear to be concealing their lack of insurance rather than admit to breaking the law.
  • Public programs crowded out private insurance among low-income children and adults.
  • Self-reported health improved for some, but fell for others.
  • Young adults appear to be avoiding Massachusetts as a result of the law.
  • Leading estimates understate the cost of the Massachusetts law by at least one third.

When Obama campaigns for Martha Coakley, he is really campaigning for his health plan, which means he is really campaigning for the Massachusetts health plan.

He and Coakley should explain why they’re pursuing a health plan that’s not only increasingly unpopular, but also appears to have a rather high cost-benefit ratio.

(Cross-posted at Politico’s Health Care Arena.)

Talking about Terrorism

Terrorists are named after an emotion for a reason. They use violence to produce widespread fear for a political purpose. The number of those they kill or injure will always be a small fraction of those they frighten. This creates problems for leaders, and even analysts, when they talk publicly about terrorism. On one hand, leaders need to convince the public that they are on the case in protecting them, or else they won’t be leaders for long. On the other hand, good leaders try to minimize unwarranted fear.

One reason is that we shouldn’t give terrorists what they want. Another is that fear is a real social harm, particularly when it is exaggerated. Stress from fear harms health. It causes bad decisions. For example, if people avoid flying and drive instead the number of added fatalities on the road will quickly surpass the dead from a typical terrorist attack. Most important, excessive fear causes policy responses that often damage the economy without much added safety. Measured in lives on dollars, reactions to terrorism often cost more than the attack themselves.

If leaders talk only about the danger of terrorism and everything they are doing to fight it, without putting danger in context, they may be on safe political ground, but they risk causing or prolonging groundless fear and encouraging all sorts of harmful overreactions. That is the Bush Administration’s counterterrorism record, in a nutshell. If leaders just say “calm down and worry about something more likely to harm you,” they will be butchered politically.

So a reasonable approach is to sound concerned but reassuring. You want to convince people that they are mostly safe without appearing complacent. I don’t like many of this administration’s counterterrorism policies, starting with Afghanistan, but thus far its communication about terrorism is far more sensible than the last administration’s. That includes the aftermath of this attempted Christmas Day attack.

The administration made it clear that it is unacceptable that a guy we just got warned about got onto a plane wearing explosives. But the President also said Americans should be generally confident in their safety from terrorism. He didn’t act as if this incident was the most important thing on his schedule this year or compare the Al Qaeda affiliate in Yemen to the Third Reich or what have you, exaggerating their capability and power. I wish he had gone further and said that detonating explosives smuggled on to a plane is tricky and that flying remains incredibly safe. (Jim Harper will soon have more to say here on the security failures and how to talk about them.)

In a different political universe, the President could describe the terrorist threat honestly. He would say that recent attempted terrorist attacks in the United States show more amateurism and failure than skill and success. He could add that we are fortunate that our greatest enemy, al Qaeda and its fellow-travelers, are scattered and weak compared the sorts of enemies we historically faced. He would sound more like Michael Bloomberg, who told New Yorkers that they had a better chance of being struck by lightening than killed by terrorists, after a particularly inept terrorist plot on JFK airport was uncovered. He could even quote Nate Silver, who calculates that in the last decade of US flights, there was one terrorist incident per 11,569,297,667 miles flown. It’s true, as Kip Viscusi demonstrates, that people don’t think like actuaries. They rightly value different sorts of deaths in different ways, and want more protection against terrorism than other dangers. But knowing the odds is still important in weighing the appropriate amount of concern and forming policy preferences. The president could also have treated voters like grown-ups and pointed out that whatever flaws in airline security that this attempted attack reveals, there is no such thing as perfect safety, and sooner or later even the finest security systems fail.

I also disagree with the argument that the trouble with our airline security or national security policy-making in general is insufficient presidential attention. Overall, we could do with a little more masterly inactivity in security policy, to use an old British phrase. Aviation security is another matter, but I struggle to see how presidential involvement would have fixed this problem. The 9-11 Commission did claim that September 11 occurred because leaders failed to pay sufficient attention to al Qaeda, but there, as in other matters, the Commission is wrong. At least in the executive branch, the attention paid to the threat in the 1990s was quite substantial, as you can see in this essay by Josh Rovner or in my contribution to this book. The historical record shows that the threat was well understood by security officials and the reading public. Time, for example, called Osama bin Laden the most wanted man in the world when they interviewed him in 1998. The trouble, in my opinion, was not misperception but our policies and the difficult and unprecedented nature of problem–a terrorist group ensconced in hostile country that refused to do anything about it.

Getting the line between confidence and vigilance right is not easy, but it starts with acknowledgment that there is such a thing as overreaction. That subject will be the on the agenda for our January 13 counterterrorism forum with James Fallows, State Department Counterterrorism Coordinator Daniel Benjamin, Paul Pillar and others.

*My attempts to explain this stuff to Politico yesterday resulted in some confused and inaccurate uses of my quotes in this story by Carol E. Lee, which unconvincingly compares the Obama’s response to this terrorist attempt to his silly involvement in the Henry Louis Gates arrest fiasco. First, Lee absurdly uses me as example of “predictable” attacks from the right on Obama, when I said I was glad that the President said Americans should feel confident but that I’d have preferred if he’d done it more forcefully by saying flying remains safe and al Qaeda weak. That is more or less the opposite of the predictable take on the right. Then, she says that my views on the President’s response to the attacks referred to his post-press conference golf outing. I was talking about his overall response, or lack thereof, over the last several days. I can’t decipher the meaning of presidential golf.

Today’s White House ‘Jobs Summit’

Today’s Politico Arena asks:

The WH Jobs Summit: “A little less conversation? A little more action? ( please)”

My response:

Today’s White House “jobs summit” reflects little more, doubtless, than growing administration panic over the political implications of the unemployment picture.  With the 2010 election season looming just ahead, and little prospect that unemployment numbers will soon improve, Democrats feel compelled to “do something” – reflecting their general belief that for nearly every problem there’s a government solution.  Thus, this summit is heavily stacked with proponents of government action.  This morning’s Wall Street Journal tells us, for example, that “AFL-CIO President Richard Trumka is proposing a plan that would extend jobless benefits, send billions in relief to the states, open up credit to small businesses, pour more into infrastructure projects, and bring throngs of new workers onto the federal payroll – at a cost of between $400 billion and $500 billion.”  If Obama falls for that, we’ll be in this recession far beyond the 2010 elections.
 
The main reason we’re in this mess, after all, is because government – from the Fed’s easy money to the Community Reinvestment Act and the policies of Freddy and Fannie – encouraged what amounted to a giant Ponzi scheme.  So what is the administration’s response to this irresponsible behavior?  Why, it’s brainchilds like ”cash for clunkers,” which cost taxpayers $24,000 for each car sold.  Comedians can’t make this stuff up.  It takes big-government thinkers.
 
Americans will start to find jobs not when government pays them to sweep streets or caulk their own homes but when small businesses get back on their feet.  Yet that won’t happen as long as the kinds of taxes and national indebtedness that are inherent in such schemes as ObamaCare hang over our heads.  Milton Friedman put it well:  “No one spends someone else’s money as carefully as he spends his own.”  Yet the very definition of Obamanomics is spending other people’s money.  If he’s truly worried about the looming 2010 elections (and beyond), Mr. Obama should look to the editorial page of this morning’s Wall Street Journal, where he’ll read that in both Westchester and Nassau Counties in New York – New York! – Democratic county executives have just been thrown out of office, and the dominant reason is taxes.  Two more on the unemployment rolls.

Summers’ Corporate Tax Confusion

At a conference yesterday, White House National Economic Council Director Larry Summers repeated a superficial critique of the U.S. corporate income tax that we’ve heard often from the Obama administration.

Politico notes that Summers suggested “that U.S. corporate tax rates are relatively low, despite complaints from U.S. corporations.” And they quote him: “If you look at taxes paid by corporations as a fraction of profits, they’re actually very low” because the U.S. tax code is replete with “evasion and avoidance.”

The Obama team’s solution to the supposed problem is to pile more complex IRS rules and regulations on U.S. corporations and to increase taxes on their foreign earnings.

There are lots of problems here. One is the implication that the U.S. corporate tax is uniquely subject to evasion and avoidance. It isn’t. Corporate income taxes around the globe are subject to large avoidance and evasion pressures because of globalization and technological advance.

That is one of the main reasons why virtually every other industrial nation has dramatically cut its corporate tax rate over the last decade or so. But the United States has not followed suit, and that’s why U.S. corporations are having to put large efforts into avoidance.

The latest data from KPMG shows that the U.S. federal/state rate is 40 percent–tied with Libya for the third-highest rate among 116 countries surveyed. The chart shows the average rate for the 30 OECD nations.

Summers may be right that U.S. corporate taxes are “low” when measured as a share of profits, although that calculation is more complex than you might think (For example, is he talking about domestic taxes divided by domestic profits, domestic taxes divided by worldwide profits, or something else?)

Anyway, Larry is referring to a measure of the average tax rate. But, generally, it is statutory rates that drive avoidance, and so it is the very high U.S. statutory rate that is helping to shrink federal taxes paid and thus drive down the average rate that Larry is worried about.

Note that lower statutory corporate rates over the last two decades have been associated with higher corporate tax revenues, as Figure 1 illustrates here. Thus, if Larry wants a higher average rate, he should propose cutting the U.S. statutory rate.

Summers apparently wants corporations to “help the country” by paying more taxes. But Larry must know that it is individual workers, consumers, and savers who actually bear the burden of the corporate tax. These people are “the country” and they would be helped by dramatically cutting the corporate tax rate and boosting the economy.

Fort Hood and Political Correctness

This morning, Politico Arena asks:

The Fort Hood tragedy: Why does it matter, or not, what we call it? Is it being politicized?

My response:

If we want to be technical, what we call the Fort Hood massacre matters, and James Taranto got it right in Monday’s Wall Street Journal:  It was not a terrorist attack, targeting noncombatants, but an act of guerrilla warfare, carried out by one of our own in apparent contact with the enemy, and hence an act of treason.

But the deeper and far larger problem is why the Army didn’t act sooner against this man and, even more, why it is, as Dorothy Rabinowitz put it in yesterday’s Journal, that “the tide of pronouncements and ruminations pointing to every cause for this event other than the one obvious to everyone in the rational world continues apace.”  After all, it is not as if “the Hasan problem,” richly detailed elsewhere, were unknown to the Army.  So why was nothing done?  We all know why.  It was stated simply in an NPR report yesterday:  “A key official on a [Walter Reed] review committee reportedly asked how it might look to terminate a key resident who happened to be a Muslim.”  If this isn’t ”political correctness,” nothing is.

And it goes beyond the naive analyses that say we can do nothing about these kinds of problems.  It infects our very culture, from the newsroom to the college campus and far beyond, crippling sound analysis and judgment.  We learn just this morning, for example, again in the Journal, that the FBI may not have briefed the Army, or done so sufficiently (it’s unclear), about Hasan’s intercepted emails with Anwar al-Awlaki, the radical Yemeni imam.  There may have been intelligence reasons for compartmenting that information.  But in other cases it is an obsession with privacy that cripples investigation, itself a species of political correctness.  Yet the conflicting “rights” at issue in risk contexts are never more than right claims until they’re delineated by statute or adjudication.  Too often, however, that obsession blinds us, including in our legislation and adjudication, to the rights on the other side.  After all, the 3,000 who died on 9/11 and the soldiers who died at Fort Hood had rights too.

The Fort Hood massacre cries out for further investigation.  But it must be clear-eyed and free from the prejudice that today is rightly called “political correctness.”