An Argentine Mess

The decision of Argentina’s president Cristina Fernández to raise the export taxes on grain producers has sparked protests all over the country, putting the country once again in international headlines. But punishing exporters is not the main story, it’s the economic mess that the last two administrations have created in that beautiful country.

The previous government of Nestor Kirchner–Fernandez’s husband–thought that he could devalue his way out of the crisis of 2001. Since that year, the Central Bank of Argentina has consistently applied a weak peso policy, which along with a massive increase in public spending, has resulted in runaway inflation. Last year, the Argentine peso was the only Latin American currency that didn’t appreciate against the U.S. dollar; in fact it depreciated slightly. The weak peso thus served as a subsidy to exporters, including the farmers now protesting the tax hike.

So we actually have the Argentine government subsidizing and confiscating agricultural exporters at the same time, while creating inflation (which has led to price controls, bans on exports, and other economic beauties). And now, in response to the protests, the Fernández administration has announced new subsidies to farmers.

Only in Argentina.

Will They Turn Themselves In?

British prime minister Gordon Brown has announced that he supports increasing the penalties for the use of marijuana, reversing the slight liberalization of the law under his predecessor, Tony Blair.

I touched on this topic about nine months ago in my posting “Hash Brownies and Harlots in the Halls of Power.” As the Brown government began a review of the marijuana laws, it was revealed that at least eight members of Brown’s cabinet –including the Home Secretary (or attorney general), who was charged with studying the idea of increased penalties, the police minister, and the Home Office minister in charge of drugs – had themselves used marijuana. They were dubbed the “Hash Brownies,” in honor of their service in Brown’s government. I wrote at the time:

In the United States many leading politicians including Al Gore, Newt Gingrich, Bill Bradley, and Barack Obama have admitted using drugs, while Bush and Bill Clinton tried to avoid answering the question.

In both Britain and the United States, all these politicians support drug prohibition. They support the laws that allow for the arrest and incarceration of people who use drugs. Yet they laugh off their own use as “a youthful indiscretion.”

These people should be asked: Do you think people should be arrested for using drugs? Do you think people should go to jail for using drugs? And if so, do you think you should turn yourself in? Do you think people who by the luck of the draw avoided the legal penalty for using drugs should now be serving in high office and sending off to jail other people who did what you did?

Those are still good questions. I noted at the time that they might also be asked of Sen. David Vitter, a patron of prostitutes who believes that prostitution should be illegal. And of course now they should be asked – if he were to reappear and take questions – of former New York governor Eliot Spitzer, who not only supported the laws he was breaking but aggressively enforced those very laws during the same period in which he was enthusastically violating them.

Hypocrisy may be the tribute that vice pays to virtue in matters of advice. But it’s entirely unbecoming when the coercive force of law is involved.

Dropouts. Starving for a Good Education

“Secretary of Education Margaret Spellings will require all states to use one federal formula to calculate graduation and dropout rates,” reports the New York Times, as part of a campaign to keep more kids in school.

The idea that we can reduce the public school dropout rate simply by measuring it better is misguided. It’s like believing that the North Koreans could improve their economy by more accurately measuring the number of people who are starving. As with the North Korean economy, the problem with U.S. public schooling is that it is a monopoly that takes choice away from families, takes professional autonomy away from educators, and takes normal economic incentives away from everyone.

Meanwhile, there is evidence from a sophisticated nationwide study that inner city minority kids – those most at risk of dropping out – are more likely to graduate, more likely to get into college, and more likely to graduate from college if they attend private instead of public schools – and that’s true after controlling for differences in student and family background. Other small scale studies of the Milwaukee school voucher program show similar results.

We already know how to reduce the dropout rate: ensure that all families can easily afford to choose the public or private schools best suited to their children. Until that happens, expect to see millions of American kids continuing to starve for a real education.

April Fools for Skilled Workers

Quite appropriately, today exposes another facet of the foolishness that is U.S. immigration policy. April 1st is the day each fiscal year when employers are allowed to begin filing petitions with the US Citizen and Immigration Services for highly skilled workers to be given what are known as H-1B visas. For the second consecutive year, the quota of these visas was reached on this first day of eligibility.

H-1Bs allow employers to hire foreign workers in certain professional occupations. They are good for three years and can be renewed for another three. Though an H-1B cannot lead to a green card, it’s still a pretty good deal.

The problem is that, even in this apparent economic downturn, there aren’t enough visas: Congress limits the number of annual H-1Bs grants, and that magic number has been set at 65,000 for five years now. Before that, and in response to the technology boom of the late ’90s, Congress temporarily raised the H-1B cap to 195,000. But that expansion expired in 2004, and the cap has been reached earlier and earlier each year since.

In 2005, that meant August. In 2006, May 26. Last year, by the afternoon of April 2, 2007 (April 1 was a Sunday), USCIS had received over 150,000 H-1B applications. Officials quickly announced that they would randomly select 65,000 petitions from all those the agency had received in the first two days of eligibility.

Last week, with demand for the prized work permits only increasing, the powers that be decreed that this year’s lottery would accept all entries received in the first five business days. USCIS simultaneously promulgated a rule prohibiting employers from trying to game the lottery by filing multiple petitions for the same employee.

As for the vast majority of employers and employees who will be out of luck, the immigration laws say, like so many “rebuilding” baseball teams this opening week, “wait till next year.” Except, in this case, next year means putting your business or career on hold until October 1, 2009—the day people who secure H-1Bs for fiscal year 2010 can start work.

If only this were all a bad April Fools’ joke.

Read more on this in the article I have up on National Review Online today.

No End in Sight

Sunday’s New York Times contains a review of Charles Ferguson’s No End in Sight, the book version of his documentary film of the same name. The book is basically a 500 page compilation of the interviews Ferguson did for the film.

Like most of those who reviewed the film, the reviewer, Barry Gewen, has only good things to say about Ferguson’s project. For the most part, he’s right to praise. Ferguson made a fortune in software (after getting a PhD in Political Science from MIT!) and used a chunk of his wealth to travel to Iraq at great risk and make a first-rate documentary, even though he’d never before made a film. You have to give the guy credit.

On the other hand, both the film and book at least implicitly subscribe to the incompetence dodge: the idea that the problem in Iraq was the Bush Administration’s execution of the occupation, not the thing itself; means not ends. Ferguson, a liberal hawk who supported the war and, from what I can tell, still does, says in his preface that the purpose of the film was to answer the “big question of how and why all this had occurred.” “All this” means the disaster in Iraq. He answers by dissecting the management of the early occupation, particularly the decisions to disband the Iraqi Army and fire most Ba’athists from Iraq’s government. He demonstrates that these decisions were ill-considered, ill-advised and aided the insurgency. By stopping there, Ferguson implies that he has answered his question by looking at the tactics of occupation; that this incompetence is what went wrong in Iraq.

The Bush Administration was incompetent and then some in Iraq, but the occupation failed because it involved Americans trying to reorder the government of a far-off country with plenty of grievances and arms but no liberal ideology. It’s too much to say that success was impossible, but failure was likely, no matter who was President.

Gewen flags a quote Ambassador Barbara Bodine gives in the book: “There were 500 ways to do it wrong, and two or three ways to do it right,” Bodine tells Ferguson. “What we didn’t understand is that we were gonna go through all 500.”

What Gewen doesn’t say is that if she’s right and the odds of success are 1/250, the lesson is don’t chance it.

For an explanation of why civil war was likely in Iraq after an American invasion, no matter how well the President planned and whether they dissolved the Iraqi Army, read the essay, “Learning the Right Lessons from Iraq,” that I wrote for Cato with Harvey Sapolsky and Chris Preble.

On why getting this right matters, see Andrew Bacevich:

How Americans choose to incorporate Iraq into the nation’s historical narrative will either affirm our post-Cold War trajectory toward empire or create opportunities to set a saner course.

Banal maybe, but worth repeating.

Myth Dodger

Every Sunday, the Washington Post lets someone bust five myths about some public-policy matter. Most recently, the buster—or shall I say dodger—was Chester E. Finn Jr., President of the Thomas B. Fordham Foundation, who addressed five contentious accusations about the No Child Left Behind Act. Why “dodger”? Because rather than directly address the myths, in most cases Finn offered either tangential, deceptive, or just plain inaccurate responses. Let’s look at the five myths and Finn’s answers to them, but rather than go in the order that Finn listed the myths, let’s work from the smallest dodge to the largest.

Least-dodged myth: We begin at the end of Finn’s list, with Finn attacking the notion that “certified teachers are better than non-certified teachers.” Finn argues that “there’s no solid evidence that state teacher certification ensures classroom effectiveness,” and here he’s right on the money. In fact, I wrote the same thing just a few weeks ago.

Getting a little dodgier: In his second entry, Finn disputes the assertion that “No Child Left Behind is egregiously underfunded.” Here he rightly takes issue with constant complaints that NCLB is underfunded because Washington has never spent the full amount authorized under the law. 100 percent of an authorized amount is almost never spent under any law, and Finn correctly points out that “viewed that way, nearly everything born in Washington is underfunded.”

Where Finn runs into trouble is that he fails to directly address another common underfunding complaint: NCLB requires states and districts to do things—write and implement new tests, produce report cards, comply with lots of new rules and regulations—without supplying sufficient funds to pay for them. Finn logically points out that public schools in the U.S. spend nearly $10,000 per-pupil (though it’s more like $11,500 and counting), so they have plenty of money to implement new things, but to directly bust the myth it’s necessary to show that NCLB pays for what it requires.

Mid-way dodge: The third myth Finn addresses is that “setting academic standards will fix U.S. schools.” Finn is a proponent of national standards, so it’s no surprise that he finesses this myth by acknowledging that NCLB encourages states to set low standards while simultaneously suggesting that standards-based reforms can work if “good standards” are in place.

Finn is right about NCLB’s perverse incentives—if schools and states don’t make progress toward 100-percent “proficiency” they are punished, but states define proficiency for themselves—however, its a big leap to imply that government schools will ever put “good standards” in place. Teachers, school administrators, and education bureaucrats who have a strong interest in low, easy-to-meet standards control education politics, which might be why only three states—Massachusetts, California and South Carolina—have standards Finn considers good, and two of these three might soon have their high standards go away.

The runner-up dodge: In the penultimate dodge—and the fourth myth attacked on his list—Finn addresses the belief that “standardized testing required by No Child Left Behind gets in the way of real learning.” Instead of arguing that NCLB’s standardized testing requirements truly don’t get in the way of real learning, Finn argues that if testing is “an honest measure of a solid curriculum” it doesn’t have to get in the way. But based on the “setting academic standards” myth discussed above, we know that states aren’t honestly measuring solid curricula. And then there’s what Finn himself has written: Because NCLB puts all the carrots, sticks, and tests on math and reading, it has pushed other important subjects dangerously close to the margins, most definitely jeopardizing “real learning.”

The Big Dodge: Finn started with his big dodge, and I’ll end with it. Despite all logic and evidence screaming that it is absolutely not a myth that “No Child Left Behind is an unprecedented extension of federal control over schools,” Finn says it is. Why? Because states don’t have to follow the law if they’ll just turn down federal money, and NCLB is really just the latest incarnation of the decades-old Elementary and Secondary Education Act (ESEA).

First off, while states do “volunteer” to take federal money, their taxpayers have no choice but to pony the funds up in the first place, which means by following NCLB states are really just getting back hundreds-of-millions of their taxpayers’ dollars. And the notion that because NCLB is the latest permutation of ESEA it isn’t an unprecedented intrusion? Well, the original ESEA was only about 50 pages long, while NCLB occupies more than 600 pages! And the additional 550 sheets aren’t just filled with meaningless doodles or love notes; they contain scads of directives and programs heaped onto the law over decades of reauthorizations, including brand-new NCLB requirements for testing, teacher qualifications, “scientifically-based” reading curricula, etc. In other words, NCLB is absolutely an unprecedented extension of federal power, and no amount of myth-dodging can change that.

Meet the Latin American Left

Last week I participated in a conference in the city of Rosario, Argentina, on the 20th anniversary of the local Fundación Libertad. The event gathered the most prestigious representatives of Latin America’s classical liberal movement and it was a unique experience sharing three days with such enlightened minds.

The only downside was the encounter we had with a group of leftist strikers on Friday afternoon, when the bus we were riding was intercepted in the Ché Guevara plaza (coincidence?) by at least 150 thugs, who stoned and destroyed the vehicle. Among the people in the bus were well-known writer Mario Vargas Llosa and my Cato colleague Gabriela Calderón. It was a very tense and unnecessary moment, given that the group attacked us without any sign of provocation.

Fortunately nobody was hurt during the incident. Nevertheless, this situation reflects the degree of intolerance and violence which characterizes the Latin American “carnivorous” left, to paraphrase the authors of El Regreso del Idiota Latinoamericano (The Return of the Latin-American Idiot), also participating in the event in Rosario. These people are willing to use force against those who think differently, and it gets much worse when they manage to attain power, as they have in Venezuela, Bolivia and Ecuador, where they can deploy the repressive apparatus of the government to their own ends.

This is a picture I took during the attack:

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