What Fresh Hell Is This?

In today’s San Francisco Chronicle, I take a look at Mike Huckabee, the winner of the Iowa caucuses:

After a year of wringing their hands over their choices in the presidential race - a pro-choice mayor with an authoritarian streak, a serial flip-flopper, and a senator who is a dedicated opponent of free speech - the Republicans finally have a new front-runner….

So … Republicans looking for a presidential candidate to inspire them are now faced with a tax-and-spend religious rightist who would have the federal government regulate everything from restaurant menus to local schools.

As Dorothy Parker would say, “What fresh hell is this?”

It’s NCLB’s Birthday, and You Can Cry if You Want To

Tomorrow is No Child Left Behind’s birthday, but what do you get for the law that’s done nothing? Barely a month ago, two separate sets of international test results were released, allowing us to see how U.S. academic performance has changed since the law was enacted. Across grades and subjects, student achievement has either stagnated or declined – that’s despite the infusion of tens of billions of dollars of new spending in each of the past six years. 

The tests were PIRLS (Program on International Reading Literacy Survey) and PISA (Program on International Student Assessment). For the gory details, please see my summary of the results here.

What do you get for the sixth birthday of a law that’s done nothing? Repeal.

Intellectual Honesty and Oil Prices

During the GOP presidential debate Saturday night, moderator Charlie Gibson - anchor of ABC’s World News Tonight - asked the candidates whether “intellectual honesty” demanded that they forthrightly tell the American people that oil prices were only going to get higher? None of the candidates really answered the question, so allow me to do so.

No.

Oil prices might indeed be on a rocket ship upwards for as far as the eye can see, but market actors don’t think so. At the New York Mercantile Exchange, oil for delivery from next month through December 2016 is showing a downward price trend. In short, the people with the most money on the line - who will live and die (economically speaking) by these assessments - aren’t buying Gibson’s assertion about the future.

More evidence can be found the behavior of oil inventory holders. At present, oil inventories are being released to the market –hardly what one would expect if inventory holders thought that oil prices will continue their long march upward.

Of course, market actors could be wrong. Energy forecasts have such a poor track record that one should probably resist making any concrete predictions about the future. So while Charles Gibson might well be right that oil prices are only going to go higher, it is not “intellectually dishonest” to suggest that might not be the case.

Where’s the Beef?

Sen. Barack Obama has excited the national media, Andrew Sullivan, young voters, and 38 percent of Iowa Democrats with his message of “change” and “hope” and “becoming one people, the United States of America.” It makes for a great speech. But I’m reminded of what the Democratic establishment candidate, Walter Mondale, said to insurgent Gary Hart after Hart did well in the 1984 Iowa caucuses with a campaign of “new ideas”: Where’s the beef?

It’s not that Obama hasn’t addressed questions of public policy. His campaign website has as many policy ideas as a Bill Clinton State of the Union Address. It’s just that they’re pretty much the same ideas: more taxes, more spending, more government help to scratch every itch a voter might have. He’s got more subsidies for workers who lose their jobs because of international competition, more subsidies for research and jobs and energy technology and broadband access and rural schools, more federal support for labor unions, and much much more.

To help borrowers and employees, he proposes more regulations on lenders, credit card issuers, and employers. These would, of course, make lending and hiring more expensive, so fewer people would be hired, and their wages would be lower, and borrowing on credit cards and mortages would be more costly.

But my main point here is, these are the same policies that Sen. Hillary Clinton proposes. So what’s so new? In what way does Obama offer “change” or “hope” or something different from ”the same kind of partisan battling we had in the ’90s”? Where’s the beef?

Endless Earmarks

One sure way to create an uprising against big government would be to sign up every American voter to Senator Tom Coburn’s daily email reports on pork spending. I should take news about pork in stride, but I can’t help myself. I get disgusted every time I read the Coburn blasts.

Today’s item that turned my stomach was from the Waterbury Republican American (Connecticut):

One of the more enlightening disclosures from the legislature’s latest ethics eruption was the state spends about $10 million a year on the salaries and benefits of more than 50 agency administrators whose main function is to lobby lawmakers.

For taxpayers, this may be the costliest appropriation in the distended $16.3 billion state budget. It funds squads of unfettered lobbyists who wheedle and when necessary sleep with key legislators for ungodly sums of your tax dollars for dubious programs and projects. One reason state taxes are so high, state budget growth easily outstrips inflation every year and the state’s per-capita debt is among the highest in the nation is the government constantly lobbies itself to spend and borrow more.

The self-reinforcing or perpetual motion aspect of big government is one of the most disturbing aspects of federal subsidies, which I explore in this study.

Anyway, kudos to Coburn’s staff for its daily reminders of folly in government. You can get on the daily pork blast by emailing Roland_Foster [at] coburn [dot] senate [dot] gov.

Keynesians in the White House

President Bush is considering a “stimulus package” to boost the U.S. economy. But the idea that the government should be trying to manipulate short-term economic performance with fiscal policy is very misguided. 

The Washington Post today quotes a Bush advisor: “What everyone’s looking at is what is the fastest way to get money out there.” Huh? Where does the advisor think the money is going to come from? This stimulus concept is Keynesian mythology and should have been buried decades ago.

What Bush and Congress should consider are long-term, permanent changes to the tax code to make the economy more productive, such as a corporate tax rate cut or more favorable treatment for capital investment. If that helps in the short-term, that’s good, but spurring long-term growth in the economy is far more important than worrying about temporary ups and downs.