Topic: Government and Politics

Scott Walker Hands $250 Million in Taxpayers’ Money to Billionaire Bucks Owners

Scott Walker touts his record as a fiscal conservative. But this morning, reports the Associated Press

Wisconsin Gov. Scott Walker took a break from the presidential campaign trail Wednesday to commit $250 million in taxpayer money to pay for a new arena for the Milwaukee Bucks.

Walker’s come under a lot of criticism from both left and right for his arena funding plan, including an article I wrote at the Huffington Post after he defended his plan on ABC’s “This Week.” Such deals are paid for by average taxpayers to benefit millionaire players and billionaire owners. But millionaires and billionaires have more influence than average taxpayers, and the pictures around stadium deals are great: 

Calling the new NBA stadium a “dynamic attraction for the entire state of Wisconsin,” Walker signed the bill at the Wisconsin State Fair Park surrounded by state lawmakers, local officials and Bucks team president Peter Feigin.

The economics, not so good. Walker has claimed a ”return on investment” of three to one, which he says is “a good deal” for the taxpayers. Economists disagree. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed D.C. stadium subsidy, “The wonder is that anyone finds such figures credible….

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

Republican voters are looking for fiscal conservatives and straight talkers. We’re hearing a lot of denunciations of corporate welfare and crony capitalism. And here’s a leading conservative candidate for president sitting down in front of cameras to sign a bill handing $250 million in taxpayers’ money (Bloomberg says $400 million with interest) to wealthy owners of a sports team (some of whom, no doubt coincidentally, are large donors to his campaign), in defiance of free-market advocates and virtually all economists. Will the other Republican candidates take him on? Will they denounce this wasteful extravagance?

Or will we have to rely on John Oliver to do the job small-government Republicans ought to be doing?

More Keynesian Primitivism from the Congressional Budget Office

I never watched That ’70s Show, but according to Wikipedia, the comedy program “addressed social issues of the 1970s.”

Assuming that’s true, they need a sequel that addresses economic issues of the 1970s. And the star of the program could be the Congressional Budget Office, a Capitol Hill bureaucracy that apparently still believes - notwithstanding all the evidence of recent decades - in the primitive Keynesian view that a larger burden of government spending is somehow good for economic growth and job creation.

I’ve previously written about CBO’s fairy-tale views on fiscal policy, but wondered whether a new GOP-appointed director would make a difference. And I thought there were signs of progress in CBO’s recent analysis of the economic impact of Obamacare.

But the bureaucracy just released its estimates of what would happen if the spending caps in the Budget Control Act (BCA) were eviscerated to enable more federal spending. And CBO’s analysis was such a throwback to the 1970s that it should have been released by a guy in a leisure suit driving a Ford Pinto blaring disco music.

Bloomberg BNA Podcast on Legal Challenges to ObamaCare

In this Bloomberg BNA podcast, Supreme Court correspondent Kimberly Robinson and I discuss King v. BurwellSissel v. HHS (the Origination Clause case), and House of Representatives v. Burwell, (the House GOP’s lawsuit against the Obama administration’s efforts to exceed its powers under the Constitution and the Affordable Care Act).

Keep an eye out for my article on King v. Burwell with Jonathan Adler in the upcoming Cato Supreme Court Review.

Adler and I will be speaking about King at the Cato Institute’s 14th annual Constitution Day symposium on September 17, 2015. Register here.

Maintaining and Enforcing Spending Caps Is a Huge Test of GOP Credibility on Fiscal Policy

Let’s celebrate some good news.

When politicians can be convinced (or pressured) to exercise even a modest bit of spending restraint, it’s remarkably simple to get positive results.

Here’s some of what I wrote earlier this year.

…one of the few recent victories for fiscal responsibility was the 2011 Budget Control Act (BCA), which only was implemented because of a fight that year over the debt limit. At the time, the establishment was screaming and yelling about risky brinksmanship. But the net result is that the BCA ultimately resulted in the sequester, which was a huge victory that contributed to much better fiscal numbers between 2009-2014.

And “much better fiscal numbers” really are much better.

Here’s a chart I put together showing how the burden of federal spending declined between 2009 and 2014. And this happened for the simple reason that spending was flat and the economy had a bit of growth.

But now let’s look at some bad news.

Republicans Looking for Libertarian Voters?

Recently I got an envelope at home that looked important. It had no return address, just a notice that said “DO NOT DESTROY/OFFICIAL DOCUMENT.” Trembling, I tore it open. The reply envelope inside also looked official, with “PROCESS IMMEDIATELY” emblazoned across the top. But since it was addressed to the Republican National Committee, I began to suspect that it wasn’t actually an OFFICIAL DOCUMENT. It did say that I had been specially selected “to represent voters in Virginia’s 8th Congressional District” and that I was receiving documents registered in my name, with tracking code J15PM110. The document must be returned by August, 17, 2015.

So in another words, just another dishonest communication from a political party. The dishonesty didn’t even wait for the letter, it started with the outer envelope.

But I wouldn’t take time to complain about mere political dishonesty. What I actually found interesting was the first question on my 2015 CONGRESSIONAL DISTRICT CENSUS. It was a simple question, asking how I describe my political ideology:

1. Do you generally identify yourself as a:

  • Conservative Republican
  • Moderate Republican
  • Independent Voter who leans Republican
  • Liberal Republican
  • Tea Party Member
  • Libertarian
  • Other____________________

So it’s nice to see that at last political professionals are noticing the existence of libertarian voters. My colleague David Kirby and I have been writing about libertarian voters for about nine years now, starting with our paper “The Libertarian Vote.” In that paper we found that some 13 to 15 percent of voters give libertarian answers to three standard questions about political values. (And as Clive Crook wrote in the Atlantic, why do so FEW Americans give such “characteristically American answers” to the questions?) The Gallup Poll, with a slightly easier test, found that 24 percent of respondents could be characterized as libertarians. David Kirby found that some 34 percent of Republicans hold libertarian views, which might just be what the RNC wants to investigate.

However, our studies have also shown that more voters hold libertarian views than know or accept the word “libertarian.” In a followup study done by Zogby International we found that only 9 percent of the voters we identified as libertarian chose the “libertarian” label. (That is, only 9 percent of 15 percent, or about 1.5 percent of the electorate.) Fifty percent chose “conservative” and 31 percent “moderate.” So the RNC survey, even if the results are actually tallied, is likely to underestimate the number of Republicans who hold libertarian views. A better question, which they didn’t ask, might be 

“Would you describe yourself as fiscally conservative and socially liberal?”

In the Zogby survey 59 percent of respondents answered “yes” to that question. When we made the question a little more provocative, adding the word “libertarian”–

“Would you describe yourself as fiscally conservative and socially liberal, also known as libertarian?” 

–44 percent of respondents still said “yes.” Now that would be a fun question for the RNC to ask next time! Or indeed the DNC.

Politics in Massachusetts Just Got a Bit Freer

Regular readers might recall a Supreme Court brief Cato filed last year in SBA List v. Driehaus, which involved a challenge to an Ohio law that made it a crime to “lie” about a politician during an election. That case predictably resulted in the law being overturned as an unconstitutional violation of the First Amendment.

But that wasn’t the end of the story. Because SBA List reached the Supreme Court on procedural grounds – and the law was only declared unconstitutional by the district court on remand – the ruling didn’t automatically invalidate similar laws across the nation. Over a dozen states still have criminal laws almost identical to Ohio’s, letting thin-skinned politicians haul their critics into court whenever they think politics attacks against them are unfair.

One of these states was Massachusetts. Earlier this year, Cato filed an amicus brief in the Massachusetts Supreme Judicial Court to argue that there was no way that the law could withstand any level of First Amendment scrutiny. The SJC agreed. In an opinion released this past Thursday, the court invalidated the law for being “antagonistic to the fundamental right of free speech,” and chilling “the very exchange of ideas that gives meaning to our electoral system.”  

While a victory, the facts of Commonwealth v. Lucas show just how odious and dangerous these law are in practice. The case began with Brian Mannal, a sitting state representative. When he was last up for reelection (he won by 205 votes), Mannal took issue with a series of flyers distributed by his critics.  Instead of engaging in a debate about the underlying issues, Mannal initiated criminal proceedings against the treasurer of the organization that published the flyers. This demonstrates one of the most dangerous aspects of these laws: any politician whose ego has been bruised can file a complaint in order to silence and intimidate opponents. 

States Must Preserve Voter Equality

When you go to vote for state legislators, you don’t expect that some other voters in your state will have their votes weighed double yours, just because they happen to be neighbors with people who can’t vote. But that, in effect, is what Texas is trying to do.

When Texas draws its state legislative districts, it looks only to equalize the total population in each district, ignoring how many of those people are actually citizens of voting age. The result is a plan that would create one senate district where 74% of the residents can vote and another where only 47% can vote. Depending on where you live, you might be one of 383,000 people who get to choose a senator, or one of 611,000.

This is a blatant violation of the principle of “one person, one vote” (OPOV) that the Supreme Court established 50 years ago under the Fourteenth Amendment’s Equal Protection Clause: no matter where you live in your state, your vote should have the same weight. Nonetheless, a three-judge federal district court upheld the plan, following a flawed Fifth Circuit precedent holding that the Equal Protection Clause was ambiguous as to whether total population or voter population should be equalized.

But if a state really only has to care about total population, it could create districts of 10%, 5%, or even 1% eligible voters—and the tiny groups of voters in those districts would each be able to choose one senator all the same. Cato, joined by the Reason Foundation, has filed an amicus brief in the Supreme Court arguing against this absurd result, focusing on rebuttals to two supposed justifications for allowing states to violate OPOV.

First, many have argued that the method by which members of Congress are apportioned to the states—according to total population—provides an important “federal analogy” that justifies using total population to allocate political power within a state. But history shows that the federal rule was created to solve a uniquely federal problem. Since states define suffrage for themselves, a rule based on eligible voters would provide states with a perverse incentive to expand suffrage as much as possible (for example, by lowering their voting age to 12) and thus artificially acquire more representatives.

States, however, are not mini-nations; one county in Texas cannot lower its voting age below that of the other counties in a bid to gain more state senators. The primary justification for the federal rule simply does not exist at the intra-state level. In fact, the true federal analogy is to that part of the Fourteenth Amendment which was designed to remove the newly freed but still disenfranchised slaves from their states’ apportionment total, so as not to give more voting power to their former owners. The Fourteenth Amendment confirms the principle that when unfranchised persons are not “virtually” represented by the votes of their neighbors, they should not be used to give more weight to the voting power of those neighbors.

Second, besides the misunderstood federal analogy, it has also been argued that Section 2 of the Voting Rights Act, as currently interpreted, requires states to gerrymander districts along racial lines in ways that will make low-percentage-voter districts inevitable. But a statute can’t trump the Equal Protection Clause. States should not be tied in knots with statutory requirements when drawing their districts such that OPOV is reduced to, at best, a secondary or tertiary consideration.

To the extent statutory barriers are preventing states from treating their voters equally, the Supreme Court must remove them. In this case, the Court should to equalize the weight of each vote.

The Supreme Court will hear the case of Evenwel v. Abbott late this fall.