Invade to Aid?

Should we force our way into Burma to aid cyclone victims? Since the May 3 storm, Burma’s military regime has barred most outsiders from delivering supplies and medical relief. The regime is accepting aid shipments, it appears, but lacks the capacity and maybe the will to efficiently deliver them. With people still dying – estimates so far range roughly from 40,000 to 130,000 – and another storm possibly on the way, several Western nations may push the UN Security Council to evoke the “responsibility to protect,” and authorize the use of military force to deliver the aid. National positions are still solidifying, but it appears that France, the UK, the Netherlands, Germany, maybe Canada, and even Pakistan endorse this tact. EU Foreign Policy Chief Javier Solana, for one, is willing to do “whatever is necessary to help the people who are suffering” in Burma.

Less importantly, Robert Kaplan takes up the call in today’s New York Times, pointing out that US Naval forces now exercising off Thailand could escort in an invasion force. Kaplan doesn’t quite come out and call for the use of force but seems to be leaning that way, as is his wont.

Kaplan does concede that things could get messy. Even if the war were quick, the government could fall, and then the invaders might wind up trying to reorganize the country, which is fraught by ethnic tensions. Kaplan is cautiously optimistic about this endeavor – he thinks the fact that Burma has suffered insurgencies for 60 years is conducive to their settlement rather than indicative of their tenacity. Personally, I think the last thing the United States needs is another occupation to manage. We should wish the Europeans luck if they’re game, but we shouldn’t encourage them.

You could argue that the best way to get the junta to open Burma’s doors is to get legal authority to knock them down. But bluffing may be a bad tactic here. The Burmese military is reputed to be paranoid about invasion. According to the Times, “One of the generals’ most enduring fears is a seaborne invasion by Western powers it refers to as ‘foreign saboteurs.’” Along with the truth of the adage, “just because you’re paranoid doesn’t mean they’re not after you,” this fear indicates that threatening to break in may only cause the Burmese to double their locks. Painful as it is, diplomacy is a better route.

Kindergarten Cop Out

Gov. Arnold Schwarzenegger just released his revised budget proposal. To close the $17.2 billion gap between the spending desired and the revenue growth projected, the governor is recommending securitizing future lottery revenue or increasing the sales tax. As soon as November, pending legislative approval, voters could have the chance to vote for even more state debt. Rejecting the proposed ballot measure would trigger a sales tax increase of 1 cent for up to three years. Schwarzenegger’s budget does keep some of the two percent across-the-board spending cuts the administration called for in January and renews his call for a spending limit and rainy day fund.

Interestingly, in his comments, the finance office director notes that the underlying problem in the state is the tendency to spend one-time revenues on spending increases that continue indefinitely. Unfortunately for Californians, their proposed solution is not to reduce the size of the state government, but to call for a rainy day fund to smooth fluctuations in revenue growth, which will be funded by more debt.

Hopefully, as legislators consider the spending plan for 2008-09, they will take a closer look at reducing spending and enacting a spending limit to address the underlying problem of unsustainable spending growth.

Is Bob Barr a Libertarian? Certainly Not on Trade

Former Georgia congressman Bob Barr announced this week that he wants to be the Libertarian Party’s presidential nominee in 2008. Party members have only another week to kick the tires of this former Republican before they decide at their May 22 convention whether he should be their standard bearer in the fall.

I’ll leave it to others to dissect his overall record, but on international trade Barr is no libertarian.

During his eight years in the House, from 1995 to 2003, Barr voted on 24 major bills and amendments affecting the freedom of Americans to trade and invest in the global economy. He voted in favor of lower trade barriers only four times, voting in favor of higher trade barriers 20 times.

You can check out his trade voting record (or that of any other member of Congress) by using the “Trade Vote Records” search tool on the Cato Institute’s Center for Trade Policy Studies web site.

On the pro-trade side, Barr did vote twice to approve presidential trade promotion authority, to expand visas for foreign-born doctors, and to relax computer export controls. But he also voted:

  • Numerous times to uphold the trade embargo and travel ban against Cuba.
  • Against normal trade relations with China and Vietnam. Denial of NTR would have resulted in drastically higher tariffs on imports from those countries.
  • In favor of mandatory “country of origin” labeling on imported food, a federal mandate aimed at discouraging consumers from buying imported food.
  • Against lower tariffs on imports from Andean countries, including Colombia.
  • Against capping farm subsidy payments to the largest farm operations.
  • Against lower tariffs on goods imported from Caribbean and Sub-Saharan African countries.
  • And in favor of quotas on steel imports.

Barr’s libertarian credentials were solid when it came to trade subsidies such as farm price supports and export promotion. He voted against both versions of the 2002 farm bill, against subsidies for sugar, wool and mohair, and against the Export-Import Bank, Overseas Private Investment Corp. and Market Access Program, which all shovel tax dollars to large multinational corporations.

His votes in favor of trade barriers are easy enough to explain politically. Georgia has lots of cotton farmers who have been protected and subsidized over the years. The state is also home to a small and shrinking textile and apparel industry that has traditionally hid behind trade barriers against lower cost imports from China, Latin America and to a lesser extent Africa.

The Libertarian Party, however, promotes itself as “The Party of Principle,” with those principles being “Smaller Government … Lower Taxes … More Freedom.”

Before Bob Barr becomes the party’s presidential nominee, he needs to explain to delegates why he voted so consistently to impose or maintain high tariff duties on products millions of Americans buy everyday, why he could not bring himself to cap farm subsidy payments, and why he supported trade and travel restrictions against a pathetic Cuba that poses no national security threat to the United States.

Free trade is not just a quirky side issue for libertarians. It is a basic pillar of free-market economics. None other than Adam Smith devoted an entire book of his monumental work The Wealth of Nations to arguing for the freedom of people to trade across international borders. Milton Friedman was an uncompromising advocate of free trade. The same Frederic Bastiat who wrote the libertarian classic The Law also made a career of ridiculing the kind of protectionist measures that so consistently won Bob Barr’s support during his time in Congress.

When he stands before the Libertarian Party convention next week, Bob Barr needs to tell delegates either that he was wrong all along about free trade or that Adam Smith was wrong.

How Many Impossible Things Can You Believe before Breakfast?

Yesterday, an announcement from the Commonwealth Fund landed in my inbox. The subject line read:

How to Achieve Universal Coverage While Lowering Health Spending

A colleague received the same release, and forwarded it along with this note:

Coming next, anti-gravity and perpetual motion machines.

To which I replied:

eternal youth, gold from base metals, a lasting peace in the Middle East

To which he replied:

The dead shall rise, the lame shall walk, the blind shall see.

I’m tempted to throw in something about the Cubs winning the World Series. But even that wouldn’t convey the level of impossibility we’re talking about here. You see, there’s an outside chance that the Cubs actually could take the Series.

I’d say we’re as likely to see the dead, the lame, and the blind win the World Series as we are to achieve universal coverage while lowering health spending.

Or does even that overstate the odds?

Can You Trust Cato?

After noting that “some of my best friends work for think tanks,” The Atlantic blogger Megan McArdle contends that these organizations cannot be trusted because the purported ideological homogeneity of their employees renders them intellectually blindered, lazy, and compromised. Since Cato was apparently the first think tank Ms. McArdle thought of in the context of school choice (and I’m not even one of her best friends!), I couldn’t resist the temptation to respond.

All human institutions are flawed (I used to work for one of the most successful corporations in the world, and it was no exception), but I haven’t noticed the crippling “groupthink” that McArdle warns of in my time at Cato. I have had stimulating debates with colleagues on a host of issues, including education policy. As it happens, I’m not alone. Cato made waves in the blogosphere not so long ago due to a very public disagreement among its staff over domestic surveillance law and policy. One of the bloggers who noted this lack of ideological groupthink at Cato was… Megan McArdle. Cato scholars have at times publicly disagreed on high profile foreign policy questions as well.

Getting to the heart of her argument, though, I’m puzzled as to why someone conversant with public choice theory would imagine that think tanks are categorically different from other sources of scholarship when it comes to ideological bias. McArdle contends that donors would balk if think tanks produced publications at odds with the donors’ preferences. Some do. Cato has in fact lost donors on a number of occasions for this reason. But this incentive system is not fundamentally different from what obtains in the academic world. In academia, career advancement is tied to journal publication, but journal editors and peer reviewers have their own biases (as do academic authors themselves), and these are felt in their decisions of what to publish. Hence, there is pressure on academics to conduct studies they expect to be more rather than less publishable.

The most notable difference between academic and think tank papers is that naive some readers grant academic papers an unwarranted presumption of impartiality. The same applies to government publications. For think tanks, the absence of that presumption means that our work is more stringently checked by the media when the ideological flavor of the medium is different from the presumed slant of the think tank. Since there are few libertarian media outlets, Cato output is subjected to more extensive fact checking by the media than is the typical academic paper, government pronouncement, or the media’s own reporting. For example, I recently wrote an op-ed noting that the press grossly understates per pupil spending in DC public schools. In making my case, I observed that local media had claimed “$8,322 is spent for each student” and then I showed that when the district’s total budget is divided by its enrollment the real figure is over $24,000 per pupil. The editor of the paper publishing my piece asked for my source for the inaccurate media figure, claiming that his own paper knew better. I pointed him to an article in his own paper that used it (among others).

This is not unusual. It is far more common that we at Cato point out inaccuracies in the mainstream media and in government claims and reports than the other way around. 

In a world in which everyone who collects and analyzes data invariably is subject to complex economic pressures, there is only one reliable path to the truth: read their publications critically and assess them for yourself, on their intrinsic merits. In cases where you lack the expertise to critically evaluate a study yourself, the next best thing is probably to seek out a proxy reviewer – an expert in the field whose conclusions you have reason to trust. But simply dismissing an entire category of scholarly institutions due to a misplaced faith in the impartiality of the other categories is an epistemological error.

Hitler’s America? Only to an Anti-Trade Liberal

In an op-ed in today’s Wall Street Journal the political liberal Thomas Frank paints a Depression-era picture of American workers and households.

“Real hourly wages for most workers … have risen only 1% since 1979,” he writes. Median “non-elderly” household income is down since 2000. Americans work more hours per year than their counterparts in other industrialized countries. The phrase “modern American slave labor” even finds its way into his column. All this reminds Frank of “those what-if stories in which Hitler wins World War II. Could this really have happened to my country?”

What is to blame for this “disaster”? According to Frank, “tax cuts, trade agreements, deregulatory measures, and enforcement decisions all finely crafted to benefit one part of society and leave the rest of us behind.”

Facts on the ground show a far different America. In a study from last October, titled “Trading Up,” I found that expanding trade and trade agreements have actually lifted the living standards of most Americans. Consider a few facts that directly contradict Frank’s doom-saying:

  • In the past decade, the average hourly real compensation—wages and benefits adjusted for inflation—earned by American workers is up 22 percent.
  • Median household income for all Americans (what, don’t the elderly count, too?) is up 6 percent in the past decade.
  • The share of American households earning LESS than $35,000 a year continues to fall.
  • The median net worth of American families, adjusted for inflation, is up by more than one-third since the mid-1990s.
  • Total employment is up by 16.5 million and the unemployment rate is down. (And since when did liberals find it objectionable that Americans seem to have plenty of work to do?)

Critics of free markets and free trade may find it politically expedient to paint a grim picture of economic “stagnation,” but in the real world Americans continue to progress.