Topic: Cato Publications

Fair and Balanced, Think Tank Edition

The website CapitolWords.org allows you to track the use of words uttered by members of Congress. Our intern wrangler, Michael Hamilton, decided to compare uses of the term “Cato Institute” to the names of other think tanks around town. Here’s what he found:

Cato is mentioned roughly equally by both Republicans and Democrats in Congress. It’s hard to draw conclusions based solely on members’ use of the names of think tanks, but it seems clear that Democrats and Republicans make roughly equal use of Cato research in making appeals to their colleagues and the public.

Note: The Brookings Institution is sometimes misstated as “Brookings Institute,” so both are included.

This Month’s Cato Unbound: Liberty, Commerce, and Literature

This month’s Cato Unbound is on the theme of Liberty, Commerce, and Literature. We all know that the western canon is often extraordinarily critical of the free market, sometimes without its authors appearing to understand very much about economics at all. But why should this be? Literature as we know it owes much to commercial society. Before the early modern era, one could almost never make a living as a writer. People read many fewer books – if they could read at all – and serious literature frequently belonged to the upper classes alone. It would be odd if literature were so unaware of the institutions that made it so popular in today’s commercial, market-driven world.

In her lead essay for Cato Unbound, literary scholar Sarah Skwire asks us to revisit the western canon’s portrayal of business and commerce. Mainstream scholars and libertarians both seem to agree that the “great books” portray business in a uniformly negative light, but Skwire finds the evidence for this contention to be thin. Good literature is not mere propaganda – for either side – and readings that collapse the great books into anti-capitalist polemic are likely to be missing a lot.

In his response essay, Robert A. Heinlein biographer William H. Patterson, Jr. reflects on the origins of liberty, commerce, and literature as we have come to understand them today. He finds that all three have a common root in the European Enlightenment. History, however, often comes in cycles or waves, and the fortunes of all three have risen and fallen over time. He expresses the hope that each of these “at-risk children of the Enlightenment” will flourish in the coming decades.

Poet and literary theorist Frederick Turner suggests a structural explanation for why scholars have been so eager to supply anti-commercial readings to the western canon – which is not, he adds, really that anti-commercial at all: Literary criticism began among gentlemen; it then passed to the anti-commercial meritocracy of the universities. Both built up their own legitimacy by arguing against that of mere businessmen. But alternate readings exist, and Turner even offers a startlingly pro-commerical reading of The Merchant of Venice.

Libertarian activist and science fiction scholar Amy H. Sturgis adds that much of the apparent anti-market bias in literature stems from elitism. By excluding genre fiction, mainstream literary critics also exclude many thoughtful and provocative treatments of markets and their place in political economy. Often the excluded works are highly sympathetic to libertarian ideals. Fiction shapes public opinion, including public opinion about markets, and popular fiction by definition reaches more than any other kind.

As always, our panelists will continue to discuss and debate through the end of the month. We also welcome your letters, which we may publish at our option. Send them to JKuznicki [at] cato [dot] org.

Is the Individual Mandate a Tax?

From my 2010 paper “Obama’s Prescription for Low-Wage Workers; High Implicit Taxes, Higher Premiums”:

President Obama argues that a legal requirement for individuals to purchase health insurance is not a tax. Yet many economists, including some of President Obama’s economic advisers, consider it to be a type of tax.

Princeton University health economist Uwe Reinhardt writes, “[Just because] the fiscal flows triggered by [the] mandate would not flow directly through the public budgets does not detract from the measure’s status of a bona fide tax.”

MIT health economist Jonathan Gruber writes, “Suppose … the government mandated that everyone buy full insurance at the average price… . This would not be a very attractive plan to careful consumers … who could view themselves as essentially being taxed in order to support this market, by paying higher premiums than they should based on their risk.”

President Obama’s National Economic Council chairman Larry Summers writes, “Essentially, mandated benefits are like public programs financed by benefit taxes.”

Sherry Glied, President Obama’s appointee to assistant secretary for planning and evaluation at the Department of Health and Human Services, writes, “The individual mandate … is in many respects analogous to a tax. It requires people to make payments for something whether they want it or not.”

When the Clinton administration proposed an individual mandate in 1993, the CBO went so far as to treat the mandatory premiums that Americans would pay as federal revenues and include them in the federal budget. So far, the CBO has not done the same for the mandates in the House and Senate bills. (As Reinhardt suggests, that does not imply that those mandates are not a tax.)

Each bill would also impose penalties on individuals (and employers) who do not comply with the health-insurance mandates. Those penalties would be paid to the Internal Revenue Service along with one’s income taxes.

Adler on How the IRS Is Rewriting ObamaCare to Tax Employers

Jonathan H. Adler is the Johan Verheij Memorial Professor of Law and director of the Center for Business Law and Regulation at Case Western Reserve University.  In this new Cato Institute video, Adler explains how a recently finalized IRS rule implementing ObamaCare taxes employers without any statutory authority.

For more, see this previous Cato video, “States Should Flatly Reject ObamaCare Exchanges”:

See also our November 2011 op-ed on this IRS rule that appeared in the Wall Street Journal.

Fake ID Foolishness

In this USA Today story, identity-based security mavens sputter about the availability of high-quality fake IDs that include digital holograms, credit-card quality plastics, and specialty inks found in “more secure” drivers’ licenses. Along with adding technical security measures to cards, states that once made driver licensing easier reversed course and discontinued issuing licenses over the counter so they could new-fangle their IDs. All this inconvenience and expense has done nothing but require bad guys (and college students) to order their driver’s licenses at sites like ID Chief.

One could have predicted all this:

The more valuable a driver’s license is for access to work, mobility, goods, and services, the more likely people will seek to acquire this document illegally. Reforms … may “stiffen” state-issued identification card processes, but they leave it brittle.

Meanwhile the expense and inconvenience of restricted access to identification cards will fall on all Americans—including the ones who need drivers’ licenses for the simple purpose of driving. Honest, law-abiding Americans will suffer impingement on their freedom of action, their individual power, and their security from identity-based frauds. The REAL ID Act is full of reforms that do not fix.

Instead of “strengthening” our national identification system, policies that reduce the value of breaking identification systems will improve identification. Jujitsu is needed much more than brawn.

That’s yours truly, writing in the 2006 Cato book, Identity Crisis: How Identification is Overused and Misunderstood.

The Value of Books

At MasterResource, a free-market energy blog, Alex Epstein posts a glowing tribute to the 1996 Cato book Oil, Gas, and Government by Robert L. Bradley, Jr. (who happens to be a co-blogger at MasterResource). Oil, Gas, and Government is surely the longest book Cato ever published, and nobody knows better than I do—well, Rob Bradley does—how much work went into researching, writing, editing, and publishing it.

In these days of blogs and tweets, we’re used to consuming information in very small bites. But one of the fundamental roles of think tanks is to produce long-form research, not just talking points and congressional briefings. And Oil, Gas, and Government is very long form—1,997 pages in two volumes. (We told him nobody wanted to read a 2,000-page book, so he stopped at 1997.) It’s a tremendous and comprehensive achievement, as Epstein explains:

While recently researching energy history for a writing project, I was reminded of how valuable—and underrated—Robert Bradley’s Oil, Gas, and Government: The U.S. Experience is. While there are countless books covering the history of energy from one angle or another, very few, in my experience, can be counted on for precision and accuracy.

The majority of books I read that reference early petroleum history, for example, tell a radically oversimplified narrative of petroleum replacing whale oil. However, if one reads Harold Williamson and Arnold Daum’s definitive two-volume The American Petroleum Industry, one learns about a far more intricate and interesting progress, including the one-time dominance of camphene, a turnpentine-based illuminant that preceded petroleum–or the story of “coal oil,” which was once believed to be the illuminant of the future. (I discuss this history in my essay Energy at the Speed of Thought: The Original Alternative Energy Market.)

What distinguishes Williamson and Daum—and Oil, Gas, and Government—is the systematic use of primary sources. For a researcher, this certainly makes life more difficult as it is far easier to use popular accounts as a jumping off points.

But the researchers who undergo this difficult task give the rest of us an enduring resource. Williamson and Daum present the essential technological and economic history of the industry through the 1950s, with exact quantitative data and contemporaneous images throughout. Bradley’s book gives us the essential political and political-economic history of the oil and gas industry through the 1980s, with painstaking attention to detail.

Bradley’s introduction, incidentally, gives a valuable overview of the merits and shortcomings of various popular histories. Not surprisingly, Williamson and Daum receive high praise and are referenced throughout Oil, Gas & Government.

Bradley’s 2,000-page opus may be daunting for some, but if you ever need historical context on today’s developments, from offshore drilling to natural gas policy, this is the resource to consult.

Earlier this year, for example, I was wondering about the history of eminent domain in the oil industry, and Oil, Gas, and Government covered it comprehensively-–including this memorable passage about how Standard Oil created pipelines without using eminent domain:

Right-of-way was obtained by dollars, not legal force. Pipe was laid deep for permanence, and only the best equipment was used to minimize leakage. Storage records reflected “accuracy and integrity.” Innovative tank design reduced leakage and evaporation to benefit all parties. Fire-preventions reflected “systematic administration.” The pricing strategy was to prevent entry by keeping rates low. While these business successes may not have benefited certain competitors, they benefited customers and consumers of the final products.

The book does not need to be read cover-to-cover, though I have found it immensely rewarding to do so. Any chapter stands on its own, almost as an encyclopedia entry, though one will find references to intriguing concepts or history discussed elsewhere in the book.

Oil, Gas, and Government has an additional benefit: Bradley’s theoretical examination of certain important issues in petroleum policy. Most notable is his discussion of a “homestead” theory of property rights in oil. Under this theory, the individual who creates value by discovering a reservoir is the primary rights-holder, so long as he has made proper arrangements for any given surface access point.

Under traditional theory, every person whose land happens to be above a given reservoir, whether they do anything or not, is a rights-holder with a right to “capture” as much oil as they can once someone else has discovered it. When I first read Bradley’s account many years ago my reaction was “Of course—this is the only way to do it.”

I write all of this because I think the energy community would be served by possessing more copies of this book—along with Williamson and Daum—and, owing to its length and its age (nearly 20 years old) it does not get the attention it deserves. In our age of quick communication, where even medium-sized books seem on the wane, the old-styled treatise has a storied place in our understanding of history to better inform the present and imagine the future.

Copies still available!

Big Government Causes Hyper-Partisanship in the Judicial Appointment Process

Earlier this year, the Georgetown Journal of Law & Public Policy hosted a symposium on “Hyper-Partisanship and the Law.” The journal editors graciously invited me to join an august panel on partisanship in the judiciary that included George Mason University Law School’s Todd Zywicki and the U.S. Chamber of Commerce’s Rachel Brand. (Brand ran the DOJ’s Office of Legal Policy, which is responsible for vetting and advising the president on judicial nominees, from 2005 to 2007.)

The symposium video isn’t available online, but the participants were invited to publish their presentations in this summer’s issue of the GJLPP. Zywicki has already blogged about his paper, “The Senate and Hyper-Partisanship: Would the Constitution Look Different if the Framers Had Known that Senators Would Be Elected in Partisan Elections?”

My (short) article is entitled “Big Government Causes Partisanship in Judicial Nominations.” Here’s an excerpt:

In 1962, Byron White’s hearing lasted 15 minutes and consisted of three questions.  Can you imagine that happening now?  Most district court nominees would take that deal.  Is it because of TV and the media and the instant sound bite and the new media with the Internet and social networking and all the rest of it?  Is it because the issues have gotten more ideologically divisive?  I think the answer isn’t really any of these.  It isn’t that there’s been a corruption of the confirmation process, the nomination process, presidential or senatorial rhetoric, or the use of filibusters.  It’s a relatively new development but one that’s part and parcel of a much larger problem: constitutional corruption.

As government has grown, so have the laws and regulations over which the Court has power.  The Court’s power has grown commensurate with the power of Congress, because all of a sudden it’s declaring what Congress can do with its great powers and what kind of new rights will be recognized.   As we have gone down the wrong jurisprudential track since the New Deal, judges all of a sudden have more power behind them and the opportunity to really change the direction of public policy more than they ever did.

Read the whole thing (not yet in the final format). My presentation largely tracked some of the points Roger Pilon made in his seminal (and now decade-old) paper, “How Constitutional Corruption Has Led to Ideological Litmus Tests for Judicial Nominees.” You should read that too.