Topic: Government and Politics

He Has a Point

Stung by accusations that he is a “socialist,” President Obama pointed out to two New York Times reporters that, “it wasn’t under me that we started buying a bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement -– the prescription drug plan – without a source of funding.”

Not to defend Obama’s unprecedented increase on government spending or plans to involve the government in almost every area of our lives…but he does have a point. As I pointed out in Leviathan on the Right, the Bush administration’s brand of big-government conservatism was, at the very least, the greatest expansion of government from Lyndon Johnson to, well, Barack Obama.

Mr. President, If You’re Involved It’s Already Politicized

Yesterday, President Obama coupled his lifting of an executive order banning federal funding for embryonic stem cell research with the signing of a memorandum directing “the White House Office of Science and Technology Policy to develop a strategy for restoring scientific integrity to government decision making.” In other words, at the very moment he was directly injecting politics into science by forcing taxpayers to fund research that many find immoral – and that could be funded privately – Obama declared that he wouldn’t politicize science.

Don’t insult our intelligence. When government pays for scientific work that science is politicized. Yes, it could be argued that government not funding something is also political, but which is inherently more politicized, government forcing people to fund research, or leaving it to private individuals to voluntarily support scientific endeavors they believe of value?

You don’t have to be a scientist to grasp the obvious answer to that one.  And as I’ve laid out very clearly regarding education, this kind of compelled support ultimately leads not only to ugly politicization, but social conflict and division.

Culture wars, anyone?

The rhetoric supporting federal funding of embryonic stem cell research – and lots of other science – may sound noble, but the means-ends calculations are anything but. They are divisive incursions on liberty, and make political conflict inevitable.

Who’s Blogging about Cato

Here’s a weekend round-up of bloggers who are writing about Cato:

  • The editors at quote Alan Reynolds in a post about President Obama’s spending plans.
  • Peking University Professor Michael Pettis quotes Daniel J. Ikenson on his blog, which covers trade policy in China. The quote was pulled from Ikenson’s latest op-ed in the South China Morning Post.
  • Fr33 Agents blogger Morgan Ashcom cites Gene Healy’s Examiner op-ed that criticizes conservative foreign policy.

Let us know if you’re blogging about Cato by emailing cmoody [at] (subject: blogging about Cato) or drop us a line on Twitter @catoinstitute.

Hillary’s Shock Doctrine

Hillary Rodham Clinton, the secretary of state who no doubt thinks of herself as “fourth in the line of succession,” tells a European audience how the Obama administration will pass an agenda that Americans have previously rejected: “Never waste a good crisis … Don’t waste it when it can have a very positive impact on climate change and energy security.”

As I’ve written several times, governments throughout the decades have taken advantage of wars and economic crises to expand their size, scope, and power. Bob Higgs wrote about “Crisis and Leviathan” long before Naomi Klein called it “The Shock Doctrine.”

But the striking thing about the Obama administration is that they openly acknowledge that’s what they’re doing – using a crisis to ram through their entire policy agenda while people are in a state of panic. Projects like national health insurance, raising the price of energy, and subsidizing more schooling – the three prongs of President Obama’s speech to Congress – have nothing to do with solving the current economic crisis. But the administration is trying to push them all through as “stimulus” measures. And they keep proclaiming their strategy.

First it was Rahm Emanuel: “You never want a serious crisis to go to waste. And this crisis provides the opportunity for us to do things that you could not do before.” Then Joe Biden: “Opportunity presents itself in the middle of a crisis.”  Not to mention Paul Krugman and Arianna Huffington. And now Hillary.

Not since George Bush the elder told the media that his campaign theme was “Message: I care” has a president been so open about his political strategy. But these people are displaying a contempt for the voters. They’re telling us that we’re so dumb, we’ll go along with a sweeping agenda of economic and social change because we’re in a state of shock. They may be right.

But voters and members of Congress should remember Bill Niskanen’s sobering analysis of previous laws passed in a panic.

Corruption Rewarded in Government

In Downsizing the Federal Government, I discussed some of the corruption surrounding former Senator Ted Stevens:

Another example of abuse engineered by Senator Stevens involves Alaska Native Corporations. Because of rule changes slipped in by Stevens, these shadowy businesses based in his state are allowed to circumvent normal federal procurement rules and win no-bid contracts. The result of such loopholes is that taxpayers do not get value for their money. For example, in 2002 a half billion dollar contract for scanning machines at U.S. border crossings was given to a native corporation with little experience in the technology, instead of established leaders in the field who were not allowed to bid.

The Washington Post did a good job of bringing the scandal of ANCs to light a few years ago. Did the spotlight on ANCs and connections to disgraced Senator Stevens convince Congress to move ahead with reforms? Hardly. From Government Executive today:

In fiscal 2008, companies owned by Alaskan regional and tribal corporations earned a record $5 billion in federal contracts, nearly 10 times the $506 million they earned in fiscal 2000 … ANCs earned two-thirds of the $24 billion they accumulated in prime contracts since fiscal 2000 through the Small Business Administration’s 8(a) Business Development program … Federal acquisition specialists said the data shows that the program, which was designed to help small and disadvantaged companies, has been undermined by a system that rewards companies that earn hundreds of millions in annual revenue.

In the story, Steven Schooner, of George Washington University, summed up the scam well: “The ANC program, as currently implemented, is a blunt instrument that distorts the procurement system, injects well-founded cynicism into the process, and reinforces the belief that government procurement is more about allocating political spoils than ensuring that the government receives value for taxpayer money.”

President Obama has promised procurement reform. He could start be eliminating ANCs and other forms of procurement favoritism.

FutureGen: Economic and Political Decisions

People who support expanded federal intervention into areas such as energy and health care naively assume that policymakers can make economically rational and efficient decisions to allocate resources. They cannot, as a Washington Post story today on FutureGen illustrates.

The story describes the political battle over the location of a $1.8 billion ”clean coal” plant. I don’t know where the most efficient place to site such a plant is, or  if such a plant makes any sense in the first place. But the story illustrates that as soon as such decisions are moved from the private sector to the political arena, millions of dollars are spent to lobby the decisionmakers, and members of Congress are hopelessly biased in favor of home-state spending regardless of what might be best for the national economy as a whole.

President Obama has promised to ramp up spending on such green projects. So get ready for some huge political fights over the big-dollar spoils, and get ready for some monsterous energy boondoggles.

Who’s Blogging about Cato

Here’s a round-up of bloggers who are writing about Cato this week:

  • Writing at the Adam Smith Institute blog, Phillip Salter discusses Patrick J. Michaels’s proposal that scientific articles should be available online for public comment.
  • Penning his thoughts on Obama’s plan to raise taxes on oil and gas usage, Wintery Knight cites Jerry Taylor’s research that shows why similar price control programs didn’t work in the 1970s.
  • Reihan Salam quotes William Niskanen on The Atlantic’s Washington blog in a post about the “starve the beast” theory that says lawmakers can slow government’s growth by lowering taxes and running up deficits.
  • Think Progress blogger Matthew Yglesias responds to Michael Cannon’s work on health care reform in a post about Obama’s White House health care summit.
  • Dr. Paul Hsieh of FIRM (Freedom and Individual Rights in Medicine) and Brian Schwartz of Patient Power cite John H. Cochrane’s Cato paper on free market solutions to health care security.