Topic: Government and Politics

New Defense Guidelines with Japan Threaten U.S. Confrontation with China

Prime Minister Shinzo Abe’s trip to Washington demonstrated that Japan remains America’s number one Asian ally. Unfortunately, the relationship increases the likelihood of a confrontation between the United States and China.

Japan’s international role has been sharply limited since World War II. During Prime Minister Abe’s visit, the two governments released new “Guidelines for Japan-U.S. Defense Cooperation.” The document clearly sets America against China.

First, the rewrite targets China. Japan’s greatest security concern is the ongoing Senkaku/Diaoyu dispute and Tokyo had pushed hard for an explicit U.S. guarantee for the unpopulated rocks. Second, Japan’s promise to do more means little; the document stated that it created no “legal rights or obligations.” Tokyo will remain reluctant to act outside of core Japanese interests.

Third, though the new rules remove geographical limits from Japanese operations, most of Japan’s new international responsibilities appeared to be what Prime Minister Abe called “human security.” In his speech to Congress, the prime minister mostly cited humanitarian and peacekeeping operations as examples of his nation’s new duties.

Moreover, the guidelines indicate that the SDF’s military involvement will be “from the rear and not on offensive operations,” noted analysts at the Center for Strategic and International Studies. Defense Minister Gen Nakatani cited “ship inspection” as an example of helping America’s defense.

Repeal, Not Reform, Is Necessary for the Bloated Welfare State

The United States is effectively bankrupt. Economist Laurence Kotlikoff figures the United States faces unfunded liabilities in excess of $200 trillion. Only transforming or eliminating such programs would save the republic.

The Left likes to paint conservatives as radical destroyers of the welfare state. Instead, some on the Right have made peace with expansive government.

Particularly notable is the movement of “reform conservatism,” or the so-called “reformicons” who, noted Reason’s Shikha Dalmia, “have ended up with a mix of old and new liberal ideas that thoroughly scale back the right’s long-running commitment to free markets and limited government.”

The point is not that attempts to improve the functioning of bloated, inefficient programs are bad. But they are inadequate. Yes, government costs too much. Government also does too much.

Montana Reins in Civil Asset Forfeiture

It’s been a nice few weeks for civil liberties in Montana.  On the heels of the nation’s most comprehensive restrictions on police militarization, Montana Governor Steve Bullock (D) has signed a bill reforming civil asset forfeiture in the state.

HB463 requires a criminal conviction before seized property can be forfeited, requires that seized property be shown by “clear and convincing evidence” to be connected to the criminal activity, and bolsters the defenses for innocent owners by shifting the burden of proof to the government.

The effort was spearheaded by State Representative Kelly McCarthy (D), who credited the work of the Institute for Justice and other civil liberties organizations for bringing the abuses of civil asset forfeiture to light.

McCarthy told the Daily Caller News Foundation:

“After looking into Montana laws and working with the Institute for Justice, we found that our laws provided no greater property rights protections than those states who were identified with rampant abuse, (Texas, Kentucky, Pennsylvania, Virginia, etc.).

From that time I began meeting with stakeholders and working on the bill.”

Montana is now the second state in less than a month to heavily restrict state-level civil asset forfeiture, following New Mexico. It must be noted that the Montana reforms are less robust than those that passed in New Mexico last month. 

Unlike the New Mexico law, the Montana law does not restrict law enforcement agencies’ exploitation of federal forfeiture laws that maintain the lower burdens of proof and the civil proceedings that Montana now restricts at the state level. The bill also allows Montana law enforcement to keep the proceeds of their seizures, whereas the New Mexico law requires that such proceeds be deposited into the general fund, thus depriving police of any profit motive for initiating seizures.

That said, the Montana law represents substantial progress for a state that the Institute for Justice labeled “terrible” on civil asset forfeiture, and all those who worked for its passage should be commended for striking a blow in favor of due process and property rights.

That a traditionally red state like Montana with a Democratic governor and a traditionally blue state like New Mexico with a Republican governor have both passed substantial civil asset forfeiture reforms this year is a testament to the bipartisan consensus building around restricting this inherently abusive practice.

 

Roger Milliken’s Company Joins the Global Economy

Roger Milliken, head of the South Carolina textile firm Milliken & Co. for more than 50 years, was one of the most important benefactors of modern conservatism. He was active in the Goldwater campaign, and was a founder and funder of National Review and the Heritage Foundation. He dabbled in libertarianism, too. He was a board member of the Foundation for Economic Education and supported the legendary anarchist-libertarian speaker Robert LeFevre, sending his executives to LeFevre’s classes.

But he parted company with his free-market friends on one issue: free trade. Starting in the 1980s, when Americans started buying a lot of textile imports, he hated it. As the Wall Street Journal reports today,

Milliken & Co., one of the largest U.S. textile makers, has been on the front lines of nearly every recent battle to defeat free-trade legislation. It has financed activists, backed like-minded lawmakers and helped build a coalition of right and left-wing opponents of free trade….

“Roger Milliken was likely the largest single investor in the anti-trade movement for many years—as though no amount of money was too much,” said former Clinton administration U.S. Trade Representative Charlene Barshefsky, who battled with him and his allies….

Mr. Milliken, a Republican, invited anti-free-trade activists of all stripes to dinners on Capitol Hill. The coalition was secretive about their meetings, dubbing themselves the No-Name Coalition.

Several people who attended the dinners, which continued through the mid-2000s, recall how International Ladies’ Garment Workers Union lobbyist Evelyn Dubrow, a firebrand four years younger than the elderly Mr. Milliken, would greet the textile boss, who fought to keep unions out of his factories, with a kiss on the cheek.

“He had this uncanny convening power,” says Lori Wallach, an anti-free-trade activist who works for Public Citizen, a group that lobbies on consumer issues. “He could assemble people who would otherwise turn into salt if they were in the same room.”…

“He was just about the only genuinely big money that was active in funding trade-policy critics,” says Alan Tonelson, a former senior researcher at the educational arm of the U.S. Business and Industry Council, a group that opposed trade pacts.

But the world has changed, and so has Milliken & Co. Roger Milliken died in 2010, at age 95 still the chairman of the company his grandfather founded. His chosen successor, Joseph Salley, wants Milliken to be part of the global economy. He has ended the company’s support for protectionism and slashed its lobbying budget. And as the Journal reports, Milliken’s executives are urging Congress to support fast-track authority for President Obama.

North Carolina Forfeiture Case Reveals Limits of Executive Reform, Government Defensiveness

In March, we detailed reforms announced by Attorney General Eric Holder to federal asset forfeitures under the Bank Secrecy Act’s “structuring” law.  Those changes mirror an earlier policy shift by the Internal Revenue Service.  Unfortunately for some, those changes were not made retroactive, meaning people whose property was seized before the announcements in a way that would violate the new policies did not automatically have their property returned.

Lyndon McLellan, the owner of a North Carolina convenience store, has not been charged with a crime.  He has, however, had his entire business account totaling $107,702.66, seized by the federal government.  As Mr. McLellan attempts to recover his money, he is now being represented by the Institute for Justice, which issued this release:

“This case demonstrates that the federal government’s recent reforms are riddled with loopholes and exceptions and fundamentally fail to protect Americans’ basic rights,” said Institute for Justice Attorney Robert Everett Johnson, who represents Lyndon. “No American should have his property taken by the government without first being convicted of a crime.”

In February 2015, during a hearing before the U.S. House of Representatives Ways & Means Oversight Subcommittee, North Carolina Congressman George Holding told IRS Commissioner John Koskinen that he had reviewed Lyndon’s case—without specifically naming it—and that there was no allegation of the kind of illegal activity required by the IRS’s new policy. The IRS Commissioner responded, “If that case exists, then it’s not following the policy.”

The government’s response to the notoriety Mr. McLellan’s case has received was nothing short of threatening.  After the hearing, Assistant U.S. Attorney Steven West wrote to Mr. McLellan’s attorney:

Whoever made [the case file] public may serve their own interest but will not help this particular case. Your client needs to resolve this or litigate it. But publicity about it doesn’t help. It just ratchets up feelings in the agency. My offer is to return 50% of the money. 

What “feelings in the agency” could possibly be “ratchet[ed] up” by highlighting a case in which the owner is accused of no wrongdoing while both the Department of Justice and the Internal Revenue Service have announced reforms to prevent these seizures from occurring?

Perhaps the government is sensitive to the avalanche of negative press that civil asset forfeiture has received over the past several years (thanks to the tireless efforts of organizations like the Institute for Justice and the ACLU).  Perhaps the government feels that the game is nearly up, after dozens of publicized cases of civil asset forfeiture abuse.

Cases like this show that the executive branch, now under a new Attorney General who has her own controversial civil forfeiture history, cannot be trusted to stay its own hand.  State and federal legislators must take the initiative, as some already have, if this abusive practice is going to end.

Raise the Wage Act Is More Rhetoric than Reality

When U.S Congressman Robert C. “Bobby” Scott (D-VA) and U.S. Senator Patty Murray (D-WA) introduced the Raise the Wage Act on April 30, they promised that their bill would “raise wages for nearly 38 million American workers.” Their bill would also phase out the subminimum tipped wage and index the minimum wage to median wage growth.

With rhetorical flourish, Sen. Murray said, “Raising the minimum wage to $12 by 2020 is a key component to helping more families make ends meet, expanding economic security, and growing our economy from the middle out, not the top down.”

The fact sheet that accompanied the bill claims that passing the Raise the Wage Act would reduce poverty and benefit low-wage workers, especially minorities. Indeed, it is taken as given that the Act “would give 37 percent of African American workers a raise”—by the mere stroke of a legislative pen. It is also assumed that “putting more money into the pockets of low-wage workers stimulates consumer demand and strengthens the economy for all Americans.”

The reality is that whenever wages are artificially pushed above competitive market levels jobs will be destroyed, unemployment will increase for lower-skilled workers, and those effects will be stronger in the long run than in the short run.  The least productive workers will be harmed the most as employers substitute new techniques that require fewer low-skilled workers.  There will be less full-time employment for those workers and their benefits will be cut over time.  That is the logic of the market price system.

IMF Proposes to Sabotage China’s Economy

For the people of China, there’s good news and bad news.

The good news, as illustrated by the chart below, is that economic freedom has increased dramatically since 1980. This liberalization has lifted hundreds of millions from abject poverty.

 

The bad news is that China still has a long way to go if it wants to become a rich, market-oriented nation. Notwithstanding big gains since 1980, it still ranks in the lower-third of nations for economic freedom.

Yes, there’s been impressive growth, but it started from a very low level. As a result, per-capita economic output is still just a fraction of American levels.

So let’s examine what’s needed to boost Chinese prosperity.