Topic: Government and Politics

Small Is Beautiful

Thank you for reading the Cato blog and doing what you do to help spread freedom. Now you have the chance to advocate liberty every day while you are going to work or running errands.

New at the Cato store is this handsome DownsizingGovernment.org bumper sticker.

 

The sticker is appropriate for bumpers, hoods, fenders, and windshields, or even around your home on garage doors and mailboxes.

And here’s a special deal for Cato blog readers: the first 25 people to email my assistant Nick (nzaiac [at] cato [dot] org) with their street address will receive a free sticker.

And there’s more: members of Congress and top White House aides are eligible for as many free stickers as will fit on their Lexus and BMW bumpers! More than anybody else, these folks need a daily reminder that Small is Beautiful When It Comes to Government.

Poland’s Alliance with America: Worthless to Whom?

The outspoken Polish Foreign Minister, Radoslaw Sikorski, apparently believes his nation’s alliance with America is “worthless.”  Washington should not race to reassure him.  Instead, Warsaw should demonstrate why it is worthy of Washington’s support.

A weekly Polish publication received a recording of Sikorski’s conversation in which he declared:  “This Polish-American union is worthless.  It is even harmful because it gives Poland a false sense of security.  Complete [B.S.].  We get into conflicts with the Germans, with Russia, and we think everything’s great because the Americans like us.  Suckers.  Complete suckers.” 

There are suckers in the existing relationship, but they are American rather than Polish.

The United States spends more than four percent of its GDP on the military and accounts for three-fourths of total defense outlays by NATO members.  Poland has been patting itself on the back for recently hiking defense expenditures—to 1.8 percent of GDP.  Overall, America’s contribution to direct NATO expenditures is nearly ten times that of Poland.

The collapse of the Soviet Union exacerbated the discrepancy among alliance members.  While Washington preserved its globe-spanning military, the Europeans cut their armed forces significantly.

Worse, the alliance expanded willy-nilly to the Russian border, bringing in nations combining minimal military capabilities and serious potential disputes with Moscow.  None had ever mattered to American security, but Washington handed out security guarantees like hotels place chocolates on pillows:  everyone got one, including Poland.

American and European officials simply assumed that they would never have to make good on their promises.  Then came the crisis in Ukraine. 

Unanimous Supreme Court Correctly Stops Police from Searching Peoples’ Entire Lives Willy-Nilly

In its ruling today in Riley v. California, the Supreme Court unanimously established a clear new rule for police-citizen interaction: The police can’t, without a warrant, search the digital information on cell phones they seize from people they arrest. This is a big deal because it means that being arrested for, say, not paying a speeding ticket, will no longer open you up to having your entire life examined by law enforcement. Unlike the satchels and billfolds of yore, people now carry essentially all their private documents with them at all times: address books, financial and medical records, photo albums, diaries, correspondence, and more. To allow police to review all of that information just because they happen to have arrested someone would violate the Fourth Amendment’s protection of personal papers and effects against unreasonable searches and seizures.

If the police have independent probable cause to access someone’s digital information, they can get a warrant. If they don’t, making an arrest shouldn’t give them license to go on a fishing expedition.

What’s really surprising about this ruling is that it’s both broad and unanimous. Sweeping rulings on high-profile subjects tend to split the Court, whether ideologically or, in criminal procedure cases like this one, between formalists and pragmatists. Unanimous rulings, meanwhile, tend to be cautious, splitting the baby in a way that doesn’t significantly change the law. Yet here we have a loud and unified “bright-line rule” that sets a major standard for the digital age. Kudos to the Court—and raspberries to the federal government, which has now had its expansive arguments rejected unanimously 11 times since January 2012.

Are Driverless Cars Fool-Proof? Not Quite

Randal O’Toole discussed the idea of safe, efficient, driverless cars in his book Gridlock: Why We’re Stuck in Traffic and What to Do about It and in this full-page Wall Street Journal essay in 2010. It wasn’t exactly a new idea – Norman Bel Geddes first imagined the idea 75 years ago at the New York World’s Fair of 1939 – but O’Toole was on the cutting edge of bringing it to more popular attention. And as he noted, one of the important benefits of driverless, or “self-driving,” cars is safety. As a driving-test site, citing British studies, says: “By far the biggest cause of road accidents is driver/rider error or reaction, which causes 68% of all crashes.” The loss of control, the reliance on mysterious computers, scares many of us. But there’s good evidence that computers can guide both airplanes and automobiles more reliably than human operators.

But maybe not all human operators.

Meredith Shiner of Yahoo! News reports:

Scientists from Carnegie Mellon University on Tuesday brought a prototype of a driverless car to Washington in an attempt to show Congress that it could embrace a future devoid of man-made errors. 

And then Congress broke that car.

It was not immediately clear whether the mere proximity to the Capitol created the series of events that led to an emergency switch being flipped, causing the car to shut down, or if an actual member of Congress did it….

In true Washington fashion, no one would take immediate responsibility for the developing car situation.

Okay, not entirely fool-proof. But getting there.

Update: NBC News reports: “D.C. Delegate Eleanor Holmes Norton hit the kill switch on the car before she was supposed to take a ride, and they couldn’t get it running again.”

Senseless in Seattle: The Minimum-Wage Follies

Meet the Marxist behind Seattle’s wage hike,” read the headline of the lead item at CNN Money late this morning. It seems that one Kshama Sawant, an immigrant from India who earned a Ph.D. in economics from North Carolina State University before taking a teaching position at Seattle Central Community College, is credited by the local press with being the political force behind the city council’s recent vote to raise the minimum wage there to $15 an hour, phased in for large businesses by 2017 and all businesses by 2021.

A self-described Marxist, Ms. Sawant went from Occupy Wall Street to occupying Seattle City Council, the story says, adding that she was “radicalized politically by the gaping inequality she observed upon arriving in the world’s richest country.” Thus, she ran for city council last year “under the banner of Socialist Alternative, an organization that calls for ‘international struggle’ against global capitalism.”

Say this for Ms. Sawant: Whatever she learned about economics in the course of getting her degree, at least she’s not hiding her views. But what can we say about the Seattle City Council, which passed her proposal unanimously? Perhaps there’s something in the coffee out there. Or perhaps they really believe, as Ms. Sawant does, that this measure will “transfer $3 billion from businesses to low-wage workers over the next decade.”

Well it turns out that you don’t need a Ph.D. in economics to understand that economies are not static. That elementary insight from Econ 101 was captured, in fact, in an earlier lead item at CNN Money, “Seattle $15 wage plan is unfair to me.” Quoting several small business owners on what’s in store for them—and their employees—here we find Subway franchise owner Matthew Hollek lamenting that, although he has only eight employees, he’ll have to start paying them 60 percent more by 2017—while the sandwich shop next door will be immune from the law for another four years. The reason? The law counts him as a large employer because he’s part of a national chain. It looks like these “gaping inequalities” are more difficult to close than Ms. Sawant seems to have realized.

Indeed, not only are economies dynamic and is Seattle not an island, but if the benefits of a minimum wage were as good as its advocates believe, then why stop at $15? Why not $20, or $30, or more? You never hear an answer to that because there is none. For a sampling from Cato of a more serious approach to the subject, see here, here, and here.

Resources for a Potential Ruling Today in Halbig v. Sebelius

The D.C. Circuit is due to rule any day now, quite possibly today, on Halbig v. Sebelius. For those who haven’t been watching the vigil I keep over at DarwinsFool.comNewsweek calls Halbigthe case that could topple ObamaCare.”

First a little background. The Patient Protection and Affordable Care Act offers refundable “premium-assistance tax credits” to qualified taxpayers who purchase health insurance “through an Exchange established by the State.” The PPACA contains no language authorizing tax credits through the 34 Exchanges established by the federal government in states that declined to establish one themselves, nor does it authorize the Internal Revenue Service to treat those federally established Exchanges as if they had been “established by the State.” Offering benefits only in compliant states was proposed by numerous Republicans and Democrats in 2009, for obvious reasons: Congress cannot force states to implement federal programs, but it can create incentives for states to act, such as by offering health-insurance subsidies to residents of compliant states.

Halbig is one of four cases challenging the IRS’s decision to rewrite the statute and offer tax credits in the 34 states with federal Exchanges. The plaintiffs are individuals and employers who are injured by the IRS’s overreach because, due to the PPACA’s many inter-locking pieces, issuing those illegal tax credits subjects them to illegal penalties.

Since a ruling may come today (or some Tuesday or Friday hence, as is the D.C. Circuit’s habit), here are some materials for those who want to hit the ground running.

Update: The D.C. Circuit has handed down rulings for today, and Halbig is not among them. Click here to check on the court’s most recent rulings.

IRS IT: $2.4 Billion But Not World-Class

Perhaps the most suspicious thing about the disappearance of Lois Lerner’s emails is that the IRS is not a small business operation that cannot afford high-quality computer, email, and backup systems. It is a huge modern bureaucracy that has computer technology at the core of its operations. The IRS IT budget in 2014 is a massive $2.4 billion (page 149 here).

Here is what the administration’s most recent IRS budget says (page 150) about its IT strategy:

IT is a key enabler for efficient and effective tax administration … To ensure the public trust, the IRS also is making significant investments to secure infrastructure, data, and applications. With continued investment in new technologies and the modernization of existing IT systems, the IRS is improving service to taxpayers, achieving productivity gains, and distinguishing itself as a model of tax administration around the world. The IRS also has established world-class practices and tools to manage and implement its portfolio of IT investments more efficiently.

There is no doubt that the IRS has distinguished itself recently, but not as a model of world-class practices.

Obamacare FYI: Page 147 shows that IRS IT costs for the ACA will be $345 million in 2014. Page 32 shows that IRS IT costs for the ACA over 2010-2018 will be $1.9 billion.