Topic: Government and Politics

Sustainable Architecture - A (Real Life) Straw Man?

If you’re free Friday morning, you might want to hop on over to the Russell Senate Office Building to learn about the amazing, inexplicable, short-sighted market bias against straw-bale buildings and the need for the feds to do something about it. The Environmental & Energy Study Institute, the sponsor of this event,

Invites you to learn how the ‘new but old’ method of straw-bale construction can help address some of our most serious national policy challenges, such as record energy prices and unemployment, inadequate supply of affordable housing, the threat of climate change, and pressing needs in transportation and infrastructure funding. The modern building industry places heavy demands on the energy and transportation sectors. Straw is a locally-sourced, widely available, and renewable resource that builders, architects, engineers, and home owners are turning into affordable, safe, durable, and energy-efficient buildings in many climates. The following presenters will discuss the benefits of using this American invention, the regulatory barriers and institutional biases against straw-bale construction, and the role of the federal government in resolving these issues.

And that parable about the three little pigs? A PR smear spun by “Big Brick” no doubt.

Political Brouhaha

InBev, a giant Belgian beer conglomerate, has made a bid to purchase Anheuser-Busch, the brewer of popular beers like Budweiser, Bud Light, and Michelob – not to mention lesser-known, though equally-delicious beverages such as Bud Dry, Busch Ice, Hurricane High Gravity, and King Cobra.

Anheuser-Busch is of course, headquartered in St. Louis.  So it should come as no surprise that Missouri politicians have sprung into action to block the deal.

Senator Claire McCaskill is “nervous” and “upset” and plans on contacting the board of director’s at Anheuser-Busch to urge them to stop the deal.  Governor Matt Blunt finds the deal “deeply troubling” and is frantically searching for a state law that would allow him to intervene.

Senator Kit Bond has honed in on a specific set of laws that he believes should be used to block the deal. In a letter to U.S. Attorney General Mukasey and Federal Trade Commission Chairman Kovacic he claims:

The proposed foreign acquisition of Anheuser-Busch is troubling to me because it potentially raises antitrust issues under existing law by putting a significant market share of the U.S. in the hands of fewer competitors.  I urge you to scrutinize closely InBev’s proposed acquisition of Anheuser-Busch to protect the interests of American consumers and the
U.S. economy.

This is yet another case of government officials trying to meddle in the free market to protect parochial interests. Thankfully, early indications suggest that despite the pleadings of Missouri’s elected officials, the federal government will not intervene in the possible deal. 

The political uproar should serve as a reminder of why Congress should repeal antitrust laws altogether. As the Cato Handbook on Policy explains:

More than two centuries ago, in the Wealth of Nations, Adam Smith observed that ‘‘people of the same trade seldom meet together … but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.’’ Coming from the father of laissez faire, that warning has been cited ad nauseam by antitrust proponents to justify all manner of interventionist mischief. Those same proponents, whether carelessly or deviously, rarely mention Smith’s next sentence: ‘‘It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.’’

Antitrust is bad law, bad economics, and bad public policy. It deserves an ignominious burial—sooner rather than later.

Cheers to that.

Obama Tax Proposals

Candidate Obama has introduced an array of tax proposals, which he discusses in various places on his campaign website. There are four overlapping themes in the Obama tax proposals the way I see it:

  1. Social engineering.
  2. Discrimination.
  3. Economic micromanagement.
  4. Empty populism.

Under social engineering, I would put Obama’s plan to greatly increase the dependent care tax credit. That would further encourage parents to find institutional day care for their children, rather than providing care themselves.

Under discrimination, I would put Obama’s proposed special tax break for the elderly. The federal fiscal system is already heavily tilted in favor of the elderly, thus it is unclear why Obama would want to further discriminate against the young. 

Obama’s “American Opportunity Tax Credit” also creates unfair discrimination. This new tax break for college essentially increases subsidizes for future lawyers, accountants, and other professionals. Why subsidize these folks who will likely have much higher earnings than factory workers, retail clerks, and others who don’t go to college?

Under economic micromanagement, I would put Obama’s Patriot Employer Act, which provides tax breaks to certain businesses that jump through hoops related to hiring, wages, and other items.  Obama wants to cut capital gains taxes on certain investments and increase capital gains taxes on others, and he is proposing various narrow energy tax breaks. 

Under empty populism, I would put Obama’s railings against “tax haven abuse” and “corporate loopholes.” If Mr. Obama really wanted to reduce corporate tax avoidance–rather than just using it as a campaign prop–he would join with John McCain and call for an across-the-board corporate rate cut.

A final category might be “innocuous tax cuts that do nothing for economic growth.” Here I would put Obama’s $500 payroll tax credit called “making work pay.” If Obama had wanted to spur employment, he should have proposed a cut in the payroll tax rate, which would change the marginal incentive to work, unlike the proposed credit.

In sum, Obama’s tax proposals are pretty awful. It is true that many Republicans and Democrats have proposed similarly bad tax ideas over the years. But Obama can be contrasted with candidate McCain, who thus far has avoided narrow favoritism in his tax proposals, and favors broad-based tax reductions designed to spur economic growth.  

A President Who Knew When to Cast Off the Neocons

I’m reminded that today is the anniversary of Ronald Reagan’s “tear down this wall” speech in Berlin:

It’s a useful reminder that while Reagan included key neoconservatives in his administration, particularly in his first term, most of them always suspected that he was a fool, incapable or unwilling to take the heels-dug-in position that would bring down our Soviet adversaries. Even in 1982, at the height of the neocons’ influence on Reagan and just five years before this speech, neocon capo Norman Podhoretz was accusing Reagan of “following a strategy of helping the Soviet Union stabilize its empire, rather than … encouraging the breakdown of that empire from within.”

I could bore you with umpteen more examples of these sorts of (neo-)conservative denunciations of Reagan, but the man knew an opportunity when he saw it, and wasn’t going to listen to the naysayers and pessimists when they told him it wasn’t so. Reagan by no means got everything right, but on the big questions, he would be a welcome respite from today’s Republican Party, which has been handed over to the neoconservatives in exchange for the mess of pottage that is our Iraq policy.

Civil Liberties in Britain

David Davis, the shadow home secretary in the United Kingdom (that is, the prospective attorney general should the Conservative Party take power), has resigned his seat in the House of Commons to protest Parliament’s approval of a bill that would allow the government to hold terror suspects up to 42 days without charges.

Davis, generally regarded as a Thatcherite, said:

Until yesterday I took a view that what we did in the House of Commons representing our constituents was a noble endeavour because for centuries of forebears we defended the freedom of people. Well, we did, up until yesterday.

This Sunday is the anniversary of Magna Carta, a document that guarantees the fundamental element of British freedom, habeas corpus. The right not to be imprisoned by the state without charge or reason.

But yesterday this house allowed the state to lock up potentially innocent citizens for up to six weeks without charge.

He denounced the bill as “the one most salient example of the insidious, surreptitious and relentless erosion of fundamental British freedom” and went on to cite ID cards, “an assault on jury trials,” and “a DNA database bigger than any dictatorship has” as other elements of that erosion.

Davis said he would run in a special election to reclaim his seat by campaigning “against the slow strangulation of fundamental British freedoms by this government.” Observers expect him to win handily, as the Labour Party has fallen dramatically in the polls. But Conservative leader David Cameron has already appointed a new shadow home secretary, so Davis may have forfeited his leadership role.

I’m reminded of Phil Gramm, a Democratic congressman, who worked with President Reagan and the Republicans to cut taxes and spending in the early 1980s. When the Democratic leadership removed him from the Budget Committee, he switched to the Republican Party. Saying that the voters of his district should have the chance to decide whether they wanted a Republican representative, he resigned, ran in the special election as a Republican, was easily elected on Lincoln’s birthday, and the following year waltzed into the U.S. Senate.

Will Davis find such success by resigning and giving the voters a chance to assess his performance? Only time will tell… In the meantime, you can watch the video of his five-minute speech here.

What Use are Campaign Economists?

An irony of modern presidential campaigns is that they bring on board top tier economic advisors, but that doesn’t stop them from injecting economic nonsense into candidate speeches.  

Candidate Obama just added some skilled economists, but that didn’t prevent him from making ridiculous claims about recent economic policies in a speech yesterday. Take one Obama statement: “our president sacrificed investments in health care, and education, and energy and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs.” Obama is wrong on every point in this remark.

Here are the facts from the federal budget looking at Bush’s first 7 years in office (FY2001 to FY2008):

  • Department of Health and Human Services spending up 67 percent in 7 years of Bush.
  • Department of Education spending up 92 percent in 7 years of Bush.
  • Department of Energy spending up 42 percent in 7 years of Bush.
  • Federal capital investment outlays up 35 percent for nondefense and 131 percent for defense in 7 years of Bush.
  • Federal corporate tax revenues up a stunning 128 percent in 7 years of Bush.

All these figures are available to the Obama campaign in the Federal Budget—Historical Tables. There is no reason for Obama and his advisors to make up nonsense statements about supposed spending cuts, when there are plenty actual failed economic policies that Bush could be criticized for.

Obama Should Learn from King Canute

Legendary tale of King Canute:

“King Canute (995-1035) ruler of England, Denmark and Norway, was surrounded by sycophants. One day, he ordered his courtiers to take him to the sea shore, where he challenged them, saying, ‘Do you believe that I can halt the sea?’ None disputed the fact, so Canute commanded the sea to cease its upwards march. But soon Canute’s feet were covered in water, showing that even he was unable to hold back the tide.”

Legendary tale of candidate Obama:

“I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when… the rise of the oceans began to slow and our planet began to heal.”