Topic: General

Sens. Paul and Markey Propose Drone Restrictions

The MQ-9 Predator drone is probably best known as a tool of American foreign policy. Since 2002 the Bush and Obama administrations have used unmanned aircraft such as the predator in missions that have (according to New America) resulted in the deaths of hundreds of civilians and thousands of militants in the ongoing War on Terror.

However, Customs and Border Protection (CBP) has used predator drones in American airspace, albeit with limited success. As my colleague Patrick Eddington pointed out in September last year, CBP has a poor track record when it comes to using drones. At the end of 2014 the Department of Homeland Security’s Inspector General found

Although CBP anticipated increased apprehensions of illegal border crossers, a reduction in border surveillance costs, and improvement in the U.S. Border Patrol’s efficiency, we found little or no evidence that CBP met those program expectations.

In a blunt press release issued last year the Department of Homeland Security’s Inspector General’s office said that it  ”recommends that CBP abandon plans to spend $443 millionmore on additional aircraft and put those funds to better use.”

Two senators recently singled out border patrol drones for special treatment in proposed legislation that would restrict the government’s use of drones.

An amendment to the FAA Reauthorization Act of 2016 proposed by Sens. Rand Paul (R-KY) and Edward Markey (D-MA) would prohibit the government from using drones to “gather evidence or other information pertaining to criminal conduct or conduct in violation of a statute or regulation or for intelligence purposes except to the extent authorized in a warrant.”

America’s Economic Problem Is Regulation, not Trade

Even when Donald Trump seems to get something right, he’s mostly wrong. At least when it comes to economics.

Many Americans are suffering financially. Yet the problem is not trade: Americans have grown wealthy as a trading nation. In contrast, regulation has done much to harm U.S. competitiveness.

The Obama administration is busy writing new rules to turn America into its vision of a good society, irrespective of the impact on liberty or prosperity. Last year Uncle Sam spent $62 billion to run the rest of our lives.

Observed Patrick McLaughlin and Oliver Sherouse of the Mercatus Center: “Over the last 20 years the regulatory budget has more than doubled in real terms while the number of total restrictions has grown by about 220,000—a 25 percent increase.”

The problem is not only the expense of enforcement. Far greater is the cost of the impact on the economy.

Last year Clyde Wayne Crews of the Competitive Enterprise Institute assessed the impact of regulation in his working paper entitled “Tip of the Costberg.” He figured the total price of regulation to be $1.88 trillion.

However, these figures almost certainly are too low. Crews argued: “Too often, regulatory impacts don’t get measured. But further, the disruption of market processes and the derailment of wealth, safety and health creating processes themselves are for the most part wholly neglected.”

Regulatory costs play out in many ways. One aspect is what an individual or company spends to comply with government dictates. Far harder to measure is what does not occur as a result of arbitrary and expensive rules. What products are not launched, what enterprises are not started, what jobs are not created?

Of course, regulations theoretically are promulgated because they yield net benefits after costs. However, agencies have an incentive to inflate the value of what they are doing. That means exaggerating problems and “social costs,” overstating alleged benefits, and discounting compliance costs.

Overall how much have we lost from excessive, unnecessary regulation? A lot, according to economists John W. Dawson and John J. Seater.

They considered the cumulative impact of losing a couple percent of economic growth year in and year out from 1949 through 2005: “That reduction in the growth rate has led to an accumulated reduction in GDP of about $38.8 trillion as of the end of 2011. That is, GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion if regulation had remained at its 1949 level.”

Increased regulation also contributes to increased inequality. In January McLaughlin and Laura Stanley of Mercatus concluded that such rules “skew income toward politically connected producers and away from individual who lack the resources necessary to navigate the legal and regulatory framework.” 

Finally, there is the issue of lost liberty. Crews released a second study last year entitled “Mapping Washington’s Lawlessness 2016.” It reviewed what he termed “regulatory dark matter.”

The regulatory process is essentially lawless, beyond the normal accountability of a democratic system. As Crews explained: “Congress passes and the president signs a few dozen laws every year. Meanwhile, federal departments and agencies issue well over 3,000 rules and regulations of varying significance. A weekday never passes without new regulation. Beyond those rules, however, we lack a clear grasp on the amount and cost of the thousands of executive branch and federal agency proclamations and issuances, including memos, guidance documents, bulletins, circulars, and announcements with practical regulatory effect.”

Americans are suffering. But closing off the economy is no answer to them.

As I pointed out in American Spectator online: “Policymakers should address federal, state, and local governments which are doing so much to prevent American companies from out-competing foreign operations and rewarding Americans accordingly. These are the bad policies to blame for creating today’s economic problems and imposing widespread financial hardship, thereby fueling the populist Trump bandwagon.”

Equality Run Amok—Women’s Soccer Version

The New York Times reports today that five key members of the US women’s national soccer team have filed a complaint with the Equal Employment Opportunity Commission charging U.S. Soccer, the private federation that oversees soccer in the United States, with wage discrimination. It seems that, on average (see the article for details), the federation pays women players considerably less than players on the men’s team, and that may be a problem under current law.

If Thomas Jefferson only knew what would follow from writing “All men are created equal.” What he meant, of course, was only that we all have equal rights to “life, liberty, and the pursuit of happiness,” and we’re free to pursue happiness however we think best. Most of us do that through voluntary association with others, which can result in all kinds of inequalities, yet violate the rights of no one. After all, whose rights are violated if Mia Hamm negotiates a salary with the team that is higher than a lesser player negotiates?

Drug War Defeats Taxpayers

The federal government spends about $30 billion a year on the war on drugs. Much of the spending is wasteful and counterproductive. This week, for example, an auditor’s report revealed how the drug bureaucracy flushed $86 million down the drain on an anti-drug aircraft that was never used.

The Washington Post described this Drug Enforcement Administration (DEA) and Department of Defense (DOD) boondoggle:

The plan was for DOD to modify a DEA plane to be used in counter-narcotics operations in a combat zone. … The Justice Department’s Office of the Inspector General (IG) determined “collectively, the DEA and DOD spent more than $86 million to purchase and modify a DEA aircraft with advanced surveillance equipment to conduct operations in the combat environment of Afghanistan, in what became known as the Global Discovery Program. We found that more than 7 years after the aircraft was purchased for the program, it remains inoperable, resting on jacks in Delaware, and has never flown in Afghanistan.”

The IG found that the “program has cost almost four times its original anticipated amount of $22 million.” Sadly, this sort of failure is par for the course when it comes to federal capital investments.  

Thank goodness for the IGs who uncover such waste, but what will come of these findings? Will anyone be fired? Will policymakers begin to rethink the drug war? Not yet it seems. When the Washington Post asked the DEA and DOD about the report, “the Pentagon did not reply and the DEA response was short boilerplate.”

For more on the government’s drug war, see Jeff Miron’s work here.

Big Win for MetLife and Other SIFIs

MetLife notched an important win this week, securing a ruling from a federal court that it is not a systemically important financial institution (SIFI) under Dodd-Frank. Like much of the Dodd-Frank Act, the SIFI designation has been controversial since its introduction in 2010. The designation is intended to help the Financial Stability Oversight Council (FSOC, another Dodd-Frank creation) to monitor companies whose demise could destabilize the country’s financial system. Putting aside the question of whether a group of regulators in Washington could see and stop a crisis more quickly than those in the trenches at the nation’s financial giants, the designation triggers a host of regulatory requirements that many companies would prefer to avoid. 

One of the most controversial aspects of the SIFI designation is its black box nature. There is no publicly available SIFI check-list. The rationale for following a more principles- than rules-based approach may be that the definition needs to remain flexible. Companies may be motivated to avoid the letter of such a rules-based approach without avoiding the spirit, leaving FSOC without the ability to monitor a company that, despite not triggering the SIFI designation, still poses a risk to the financial system. But this has left companies in a bind. The SIFI designation has real and substantial ramifications for any company that triggers it, but companies have been unable both to avoid designation and to challenge designation once applied.  It’s hard to argue that you don’t fit a certain definition if you don’t know what the definition is.

Of course, not all companies want to avoid SIFI status. Although some have argued that FSOC and other aspects of Dodd-Frank will prevent future bailouts, it seems naïve to think that the government could designate a company as a risk to the entire financial system and then sit idly by as it burns.  SIFI designation is a wink and a nod, all but assuring government support if the designated company founders in rocky times.

Perspective on Heroin Babies

According to a recent story on WBUR, the NPR radio affiliate in Boston,

Massachusetts hospitals are seeing evidence that the opioid epidemic is affecting the next generation, with an increasing number of babies being born exposed to drugs.

Is this cause for concern? Perhaps, but the “crack baby” scare of the 1980s suggests caution in jumping to conclusions.

In the mid-1980s, as crack use spread and garnered attention from law enforcement officials, the public health community, and the media, it seemed that crack use by pregnant mothers was generating horrific harms. For example, the New York Times reported in 1985 that

Cocaine use may be dangerous for pregnant women and their babies, causing spontaneous abortions, developmental disorders and life-threatening complications during birth, doctors reported today.

Similarly, a 1985 article in the New England Journal of Medicine concluded that

these preliminary observations suggest that cocaine influences the outcome of pregnancy as well as the neurologic behavior of the newborn.

And many media assessments  were extremely pessimistic; Charles Krauthammer, for example, wrote that 

the inner-city crack epidemic is now giving birth to the newest horror: a bio-underclass, a generation of physically damaged cocaine babies whose biological inferiority is stamped at birth.

Three decades later, however, with the benefit of calm reflection and better data, the assessment of crack’s impact is strikingly different.   In 2009, the New York Times wrote:

So far, these scientists say, the long-term effects of [crack] exposure on children’s brain development and behavior appear relatively small.

Mr. President, the Only Thing We Can Learn from Communism Is that It Doesn’t Work

Over the years, President Obama has made some statements that indicate a rather statist mindset.

Now he may have added to that list during a recent speech in Argentina. Check out this excerpt from a report in the Daily Caller.

President Barack Obama downplayed the differences between capitalism and communism, claiming that they are just “intellectual arguments.” …Obama said…”I think for your generation, you should be practical and just choose from what works.”

It’s hard to object to the notion that people should choose “what works,” so perhaps there’s not a specific quote that I can add to my collection. However, the president’s implication that there’s some kind of equivalence between capitalism and communism, which both systems having desirable features, is morally offensive. Sort of like saying that we should “choose from what works” in Hitler’s national socialism. Here’s what we know about the real-world impact of communism.

Communism is a disgusting system that butchered more than 100,000,000 people.

It is a system that leads to starvation and suffering.

Communism produces unspeakable horrors of brutality.

So what exactly “works” in that system? If you watch Obama’s speech, you’ll notice there’s not a lot of substance. There is a bit of praise for Cuba’s decrepit government-run healthcare system (you can click here, here, and here if you want to learn why the system is horrifying and terrible for ordinary citizens). And he also seems to think it’s some sort of achievement that Cuba has schools.

So let’s take a closer look at what Cuba actually has to offer. Natalie Morales is a Cuban-American actor, writer, and filmmaker. Here’s some of what she wrote about her country and her relatives still trapped on the island.