The Antitrust Religion in Action

This summer, David Boaz noted how sad it was that Google’s top executives have apparently diverted their attention away from developing the next hot new technology toward building their Washington presence. Declan McCullagh notes that Google’s generosity, which has flowed primarily to Democrats, may be coming back to bite them, as disgruntled Republicans have suddenly gotten religion when it comes to antitrust and are demanding that Google’s acquisition of Doubleclick receive close scrutiny. Strangely, those same Republicans weren’t so worried about a spate of mergers that involved large telecom firms like SBC and Verizon. I’m sure the disparity has nothing to do with the telecom industry’s generous contributions to their campaigns.

As I point out at Techdirt, these sorts of shenanigans shouldn’t surprise us. Modern antitrust law gives government bureaucrats seemingly unlimited discretion to second-guess corporate mergers based on the flimsiest of pretexts, or to attach arbitrary conditions to merger approvals. Last winter, for example, as a condition of the BellSouth merger, two FCC commissioners coerced AT&T into accepting “network neutrality” rules that Congress had earlier failed to adopt, rules that apply to no one else in their industry. And don’t forget the XM/Sirius debate, in which terrestrial broadcasters—their principal competitors—trotted out the ludicrous argument that the merged company would have no competition. XM and Sirius’s fundamental sin seems to be that they hadn’t invested as much money on Washington lobbyists as the NAB had.

The rule of law demands that government decision-making proceed according to objective, clearly-defined, and predictable rules. Antitrust law as it’s currently enforced doesn’t qualify, and as a result it’s ripe for abuse. And if you believe Edwin Rockefeller, this isn’t new. He argues that antitrust law has always been primarily a weapon for politically-connected companies to use against their rivals.

Trim the Fat — with a Nano-Knife

John Boehner, the leader of House Republicans, responds to a Washington Post editorial challenging him to identify what he would cut out of the budget to avoid “an irresponsible tax increase” to offset a reduction in the Alternative Minimum Tax. Seeking to restore the GOP’s fiscally conservative image, publicly challenged to offer a plan, employing all the resources of the House Republican Caucus, these are the budget cuts that Minority Leader Boehner came up with:

* $3.2 billion to revive outdated programs, such as one funding exchanges “with historic whaling and trading partners.”

* $1 million for the Clinton School of Public Service in Arkansas.

* $300,000 for an “Exploratorium” in San Francisco.

* $100,000 for an educational program conducted aboard a catamaran in California’s Monterey Bay.

So out of the $2.9 trillion federal budget, the leader of the House Republicans manages to come up with one $3.2 billion appropriation and three tiny earmarks that appear to be personal projects of Hillary Rodham Clinton and Nancy Pelosi.

Boehner is right when he goes on to say, “Moreover, the editorial missed the point. Congress doesn’t have a revenue problem. Revenue is at an all-time high after the 2001 and 2003 tax cuts, which have triggered economic growth that is ‘paying for’ an AMT patch many times over.” But he then notes, “Rather, Congress has a spending problem.”

Indeed. The Republican Congress of which Boehner has been a leader has increased spending by a trillion dollars in six years. And out of that massive gush of taxpayer dollars, Boehner can find only $3.2 billion in unnecessary spending. Which is perhaps why polls now show that voters trust Democrats more than Republicans on the issue of cutting government spending.

Republicans: Nothing Matters But the War

William Kristol, a top Republican strategist and editor of the Weekly Standard is pushing Democratic senator Joe Lieberman for vice president, on the strength of Lieberman’s full-throated support for the war without end. Pete Wehner, the leading intellectual in the Bush White House (OK, but still–that carries some weight in the Bush party), backs the idea in National Review. 

True, Lieberman is one of the few Americans still solidly behind Bush’s war. But that couldn’t be sufficient for Republicans to put him a heartbeat from the presidency, right? He must share Republican values on other issues, right?

Not really. As Robert Novak pointed out back when Republicans were endorsing Lieberman for reelection,

Lieberman followed the liberal line in opposing oil drilling in ANWR, Bush tax cuts, overtime pay reform, the energy bill, and bans on partial-birth abortion and same-sex marriage. Similarly, he voted in support of Roe vs. Wade and for banning assault weapons and bunker buster bombs. His only two pro-Bush votes were to fund the Iraq war and support missile defense (duplicating Sen. Hillary Clinton’s course on both).

Lieberman’s most recent ratings by the American Conservative Union were 7 percent in 2003, zero in 2004 and 8 percent in 2005.

I actually agree with him on a couple of those votes, though I wouldn’t expect that conservatives would. The National Taxpayers Union said that he voted with taxpayers 9 percent of the time in 2005, worse than Chris Dodd or Barbara Boxer. Maybe because of all the Republican love in 2006, he soared to a 15 percent rating.

In a previous speech, Lieberman called for a tax increase so that we could continue the war without “squeezing important domestic programs, as we have been doing”–his view of a period during which federal spending rose by one trillion dollars:

During the Second World War, our government raised taxes and we spent as much as 30 percent of our Gross Domestic Product to defeat fascism and Nazism. During the war in Korea, we raised taxes and spent fourteen percent of GDP on our military…Today, in the midst of a war against a brutal enemy in a dangerous world, we have cut taxes and are spending less than five percent of GDP to support our military…It is not an acceptable answer to push the sacrifice of this war against terrorism onto our children and grandchildren through deficit spending, as we have been doing. And it is not an acceptable answer to pay the costs of this war by squeezing important domestic programs, as we have been doing.

Only if you believe that continuing to support the war in Iraq outweighs all other issues combined–for the next five years–could a conservative reasonably support Joe Lieberman. And apparently some Republicans and conservatives are willing to toss aside his commitment to high taxes, higher spending, more regulation, and entitlement expansion in order to get a vice president firmly committed to long-term entanglement in Iraq.

I Gave You My Heart, You Gave Me a Pen

I’ve been a John Cusack fan since Sixteen Candles. Thus his recent unflattering comments about Cato kinda sting.

I think Cusack is a smart guy who has been misinformed. As Tom Firey notes, Cato scholars, like Cusack, are keenly interested in making it harder for Congress and the president to start wars. I recently offered a proposal for reforming veterans’ health care. One of the proposal’s main selling points, to my mind, is that it would force Congress to confront many of the costs of war that the current system hides.

I even agree with some of what Cusack said. Cato scholars certainly don’t have “any monopoly on insight into anything.” And I’m sure we come across poorly at times. 

But do Cato scholars really want, as Cusack has written,  ”the total liberation of corporations”? If I were really a corporate tool, would I have just penned an oped where I smeared the entire health care industry as a pack of “rent-seeking weasels”? 

If Cusack could see how poorly we get along with most corporations most of the time, he might give Cato another look.

Anyone Know What This Guy’s Saying?

One fun little perk of working at the Cato Institute is the daily e-mail from our media department listing recent press references. Often, these “Cato Clips” are sources of pride — a Cato scholar being quoted on a good point, or a member of the public citing Cato while making a thoughtful argument in a letter to the editor. Occasionally the clips can be disappointing, as when someone misrepresents or straw-mans a Cato scholar’s position or misunderstands the institute’s philosophical perspective. (We’re sometimes identified as “ultra-conservative“ and “neo-conservative.”)

And then sometimes a Cato Clip is just plain baffling. Case in point, yesterday’s clip of an interview with actor John Cusack that appeared in the Detroit weekly Metro Times. The piece includes this bit:

“Do you think all these people work at the Cato Institute?” he continues. “No. Even the people who work at these places, I’ve met them. They don’t have any monopoly or insight into anything. Where does their intellectual or moral clout come from? Nowhere. The guy’s talking in front of a camera, reading from a teleprompter, bitching at people. I know enough to be intimidated by serious men and women, but I won’t be cowed by people like that.”

I don’t know exactly what Cusack is on about here, but he doesn’t seem to like Cato very much. The question is why.

Earlier in the interview he argues that the U.S. should bring back the military draft because people would then be more inclined to oppose U.S. military action. There, he’s definitely at odds with at least one Cato scholar who worries that, by making military labor cheaper, the U.S. would be more inclined to military action. On the other hand, Cusack laments Republican politicians’ use of the threat of terrorism as justification for all sorts of dubious policies. Cato scholars have made this argument repeatedly, including this piece by Ohio State professor (and one-time Cato visiting fellow) John Mueller.

Anyhoo, if you can explain Mr. Cusack’s comment about Cato, please %20tfirey [at] cato [dot] org (drop me a line).

Defending Ron Paul’s Tax Plan

The Washington Post takes a swipe at Ron Paul, deriding his plan to abolish the income tax because revenues would fall to 1995 levels (rather than 2000 levels, as Dr. Paul mistakenly claimed in a recent Jay Leno appearance):

Expounding on his proposal for abolishing the income tax, Paul claims this would still leave the U.S. Treasury with roughly the revenues it had in 2000, in the final year of the Clinton administration. A post on the Paul campaign website explains that individual income taxes account for “approximately one third of federal revenue.” Unfortunately for the tax slashers, the one-time Libertarian candidate for president is wrong on both counts. According to the Congressional Budget Office, individual income taxes represent between 45 and 49 percent of federal tax revenues, depending on the year. For financial year 2007, total receipts from individual income tax were in the region of $1.1 trillion dollars. If you eliminated all that revenue, the federal budget would shrink to the size it was around 1995.

The Post’s criticism is akin to condemning a book because the typesetting was not centered on a few pages. The real issue is whether America would be a stronger and more prosperous nation if government was reduced to the levels envisioned by the Founding Fathers. America climbed from agricultural poverty to middle-class prosperity before the income tax was adopted, and federal government spending (with the exception of times of war) was a small percentage of GDP. The Post also fixates on whether the Paul campaign has identified $1.1 trillion of savings to match the forgone revenue from eliminating the income tax.

In attempt to figure out where the $1.1 trillion in annual savings is going to come from in a Paul administration, I talked yesterday afternoon to the candidate’s policy director, Joseph Becker. He pointed out that Paul has promised to bring troops home from Iraq and Afghanistan, eliminate foreign aid, eliminate agriculture subsidies, and get rid of the U.S. Education Department. A President Paul would, however, still have a military sufficient to defend the homeland.

Based on Paul’s rhetoric and record, this presumably is not a problem. The candidate almost certainly would favor the elimination (or transfer to the states) of the Departments of Agriculture, Energy, Education, Housing and Urban Development, Transportation, Labor, Commerce, and Health and Human Services. (What a joyous sentence to type!) Indeed, because he also would gradually turn entitlement programs into systems based on personal accounts (and shift welfare components back to the state and local levels), the long-term savings would significantly exceed the amount of money collected by the personal income tax. Ron Paul may not be a realistic candidate in today’s America, but that is an unfortunate reflection on voters (and the forces that have shaped voter attitudes), not the candidate’s platform.

First Thing We Do, Let’s Kill All the Lawyers

Scholars argue about what Shakespeare’s famous line in Henry VI really means, but I prefer to think that the wise playwright understood that law is a protection for the people and a constraint on rapacious rulers. Which brings us to the situation in Pakistan, where President/General Musharraf must be contemplating Shakespeare’s proposition. The glamorous Benazir Bhutto gets the headlines, but the real conflict is between Musharraf and the judges and lawyers who uphold the rule of law.

The latest crisis began last March, when Musharraf suspended Supreme Court Chief Justice Iftikhar Chaudhry. The rest of the Supreme Court then reinstated the chief justice. After questions arose about the legitimacy of Musharraf’s reelection, the general suspended the constitution and brought lawyers into the streets.

Lawyers. In the streets. In suits, as a Washington Post essayist noted. It’s not the usual image of a revolution. The people leading the rebellion against Musharraf’s undemocratic rule are not embattled farmers, or sans-culottes, or proletarian mobs, or even Buddhist monks. They’re lawyers, people normally committed to quiet meetings, legal briefs, formal argument, and decisionmaking processes both judicial and judicious.

But as Husain Haqqani, a former adviser to three Pakistani prime ministers, wrote in the Wall Street Journal:

Pakistan’s burgeoning civil society, led by lawyers and encouraged by judges ousted from the Supreme Court, is refusing to be cowed. Protests are spreading despite thousands of arrests and the use of tear gas and batons against peaceful demonstrators. More than 1,700 attorneys have been jailed but still more are taking to the streets. University students have joined the lawyers, and former Prime Minister Benazir Bhutto has vowed to violate a ban on public meetings by leading a rally on Friday.

There are a number of important reasons why Pakistan’s attorneys are leading the protests against Mr. Musharraf. They have a long tradition of activism for rule of law and human-rights issues. In 1968-69, the lawyers started the campaign that resulted in the ouster of Pakistan’s first military ruler, Field Marshal Ayub Khan. They also were at the forefront of the campaign against Mr. Zia-ul-Haq, whose 11-year military rule ended when he died in a 1988 plane crash.

The sympathies of Americans should be with the Pakistani people and the rule of law, not with any political player in the current struggle. It is not for the United States government to pick winners in Pakistan, but we should free ourselves of the belief that Musharraf is the only force capable of opposing radical Islamic terrorism in the country. Chief Justice Chaudhry, in Haqqani’s words, “has become a symbol of resistance to arbitrary rule — the man who refused to roll over and disappear, unlike earlier judges who cooperated with military rulers or simply went home when their conscience dictated otherwise.” He may one day be seen as the Joan of Arc or the George Washington of his country’s revival.

Haqqani writes, “Mr. Musharraf seems determined to put his own political survival before the rule of law — actions that warrant the label dictator. Pakistan’s attorneys, and increasingly the rest of its citizenry, seem equally determined to prevent this from happening.” Americans should wish them well.