Obama, McCain Swap Places on Trade with Cuba

During their time in the Senate, John McCain has voted in a free-trade direction on 88 percent of major votes affecting barriers to trade, Barack Obama only 36 percent of the time. But on trade with the pathetic, socialist island of Cuba, the two presumptive presidential nominees swap places.

In a speech yesterday, McCain accused Obama of changing his position on the U.S. government’s almost 50-year-old embargo against Cuba. “Now Senator Obama has shifted positions and says he only favors easing the embargo, not lifting,” Mr. McCain said, according to a story in this morning’s New York Times. “He also wants to sit down unconditionally for a presidential meeting with Raúl Castro. These steps would send the worst possible signal to Cuba’s dictators—there is no need to undertake fundamental reforms, they can simply wait for a unilateral change in U.S. policy.”

Cuba is one of the few trade-related issues where Democrats generally come down on the right side and Republicans on the wrong side, and the two presidential front-runners are true to type.

According to the Cato Institute’s “Free Trade, Free Markets” web feature that tracks congressional votes on trade, Sen. McCain voted in 2003 against ending the ban on Americans traveling to Cuba. In 2005, Sen. Obama voted to defund enforcement of the ban. In their public statements, McCain has supported the comprehensive embargo in place since 1960, while Obama has questioned its usefulness.

The politics behind the embargo are quite straightforward. Florida is a swing state that is home to half a million politically active Cubans who rightly detest the communist regime in Havana. Many of them wrongly see the embargo as a test of America’s resolve to bring an end to the regime. But the embargo’s lack of substance is also equally straightforward. After almost half a century, the embargo has failed to prompt the Cuban government to undertake anything remotely resembling “fundamental reforms.” It has made the Cuban people a bit poorer, while not making them one bit freer.

For a comprehensive argument against the embargo, check out the text of a speech I gave in 2005 at the James A. Baker III Institute at Rice University in Houston. The only thing I would consider changing is the title, which was, “Four Decades of Failure: The U.S. Embargo against Cuba.” My new title would be, “Almost Five Decades of Failure.”

Last Minute Farm Bill Earmarks

The wildly popular, bipartisan farm bill is cruising toward becoming law this week after the likely road bump of President Bush’s veto pen. It passed the House and Senate by veto-proof margins last week. Congressional enthusiasm for the farm bill helps to explain the 18 percent approval rating of Congress in a recent Gallup poll.

Taxpayers aren’t likely to be impressed by a $500 million giveaway for a timber company and other wasteful earmarks in the bill. The official list of earmarks total $934.5 million (not including the $500 million timber tax break or six earmarks authorized without specific funding levels). The earmarks were air-dropped into the bill’s conference report, after legislators spent years — and held countless hearings — crafting it.

Fourteen senators (nine Democrats and five Republicans) and one House Democrat inserted 26 earmarks, according to the conference report. Three earmarks appear to be multi-member earmarks. [Here’s the PDF of the earmarks.]

The earmarks represent only one-third of one percent of the bill’s expected cost ($289 billion). Legislators will soon issue laudatory press releases patting themselves on the back for rewarding their districts and deflecting criticism by pointing out the “low” cost of earmarks. That’s not the point. The sneaky way the earmarks were inserted and the inefficiency of the federal government doling out money for local projects (also an affront to federalism) helps explain why the public has lost faith in Congress.

Earmark critics also point to several provisions in the farm bill not disclosed as earmarks. The Associated Press briefly described these giveaways to favored companies and industries.

Perhaps most egregious is a vague provision inserted by Baucus which would authorize $500 million in tax-credit bonds to purchase 400,000 acres of land (mostly in Montana). Although not mentioned in the bill, there’s only one company that would qualify for this stealth earmark: the Plum Creek Timber Co., which is the largest private landowner in the United States.

Plum Creek’s in-house lobbying operation spent $1.1 million on lobbying from 2005 to 2007, according to Congressional lobbying records rounded to the nearest $20,000. The company spent $140,000 in the first quarter of 2008, the most recent period records are available.

Plum Creek also hired the lobbying firm Nutter & Harris to lobby Congress for the provision and other issues from 2006 to 2008. Firm principal Robert L. Harris, a former Senate staffer, handled the Plum Creek account. Plum Creek paid the firm $300,000 ($120,000 in 2006 and 2007 and $60,000 in the first quarter of 2008).

In the 2006 cycle, Baucus received $9,000 from Plum Creek’s PAC (the Plum Creek Timber Good Government Fund), run by Robert Jirsa, the company’s in-house lobbyist. The PAC gave Baucus $1,000 in the 2004 cycle and $5,000 in the 2002 cycle. It has doled out $511,266 since 1998 to parties and candidates, according to the Center for Responsive Politics. The PAC favored Republican federal candidates until they lost the majority in 2006. Their 2008 cycle donations favor Democrats (60 percent to 40 percent).

All told, that’s roughly a $2 million investment over nearly ten years ($1.4 million in lobbying and $500,000 in PAC contributions) for a windfall tax break of $500 million.

House Republican Leader John Boehner criticized the earmarks in the farm bill, but his warning proved insufficient to stop most Republicans from voting for the bloated bill. It’s a victory for bipartisan, logrolling politics as usual. It’s a defeat for conservative Republicans who tried to convince leadership and rank-and-file members to take a stand on the farm bill as part of an effort to return to conservative fiscal principles after years of out-of-control spending and earmark scandals.

To read previous posts on the farm bill by Sallie James, Cato’s expert on the topic, click here.

The “Fundamental” Problem

Goldwater Institute VP Matt Ladner offered his thoughts today on an exchange between the Ed Sector’s Kevin Carey and myself. In the process of defending Cato, Matt suggested that: “The Cato Institute can be accused of being fundamentally opposed to public schooling. I’d guess that they would happily plead guilty to that….”

As I explained in my reply to Kevin, Cato doesn’t take positions, only its scholars do. So, am I “fundamentally opposed to public schooling” as Matt imagines? No.

I’m not fundamentally opposed to, or in favor of, any policy. I do my best to rationally derive policy recommendations by examining the best and broadest possible array of relevant evidence. That means studying school systems from ancient times to the present, from all over the world, and determining if some systems consistently work well or poorly regardless of variations in cultural and economic circumstances. I recommend a free market approach to education, coupled with need based financial assistance to ensure universal access, because that is the pattern that emerges from the evidence. 

Policy scholars who find these conclusions inconsistent with their beliefs might wish to familiarize themselves with the historical and international evidence so that they can form conclusions of their own and offer informed commentary on mine. I’m sure we would all benefit from that process, as would American children.

Reversing the Course of a River

Bruce Schneier is a smart and interesting guy. His sound thinking on computer security has influenced me a great deal, and it extrapolates well into related fields like national security. So I’m always interested to find writings of his with which I disagree. A recent essay in Wired, entitled “Our Data, Ourselves” is one. It calls for “a comprehensive data privacy law.”

This law should protect all information about us, and not be limited merely to financial or health information. It should limit others’ ability to buy and sell our information without our knowledge and consent. It should allow us to see information about us held by others, and correct any inaccuracies we find. It should prevent the government from going after our information without judicial oversight. It should enforce data deletion, and limit data collection, where necessary. And we need more than token penalties for deliberate violations.

If he really believes that these rules should govern the collection and use of data - “all information about us!” - what an administrative nightmare that would be to implement. The benefits of doing so would be quite small in comparison.

Some of these things are agreeable, such as judicial oversight of government data collection (the Fourth Amendment is that law) but even a solid libertarian like myself wouldn’t endorse judicial oversight of government officials looking up information about me on public Web sites, for example.

And should I have a right to review any email in which people discuss this blog post and its author? Incredible.

The flaw in this article (beyond its carelessness) is Bruce’s treatment of these information practices as all-new, and needing an all-new regulatory regime, just because decision-making is now undertaken using “data.”

Whoever controls our data can decide whether we can get a bank loan, on an airplane or into a country. Or what sort of discount we get from a merchant, or even how we’re treated by customer support.

But it’s always been true that decisions like these are made using “data” - perhaps not in digital form, but data/information all the same. When has a decision ever been made not using “data”? We don’t need to throw out old rules about privacy, fairness, and so on just because information is digitized.

Many of Schneier’s premises are correct. The change from analog to digital data systems does cause a lot more tracks to form behind people as they traverse the economy and society. This creates lots of efficiency, convenience, wealth, and problems - threats to privacy, fair treatment, personal security, seclusion, and liberty. Let’s deal with them - each one - on their merits rather than trying to write a single law to overhaul the use of information in society.

Reversing the course of a river would be a tiny problem compared to what Schneier proposes.

The Perverse Incentives of Eminent Domain

Over at the Show-Me Institute’s blog, my former colleague Dave Stokes notices a great example of the kind of damage eminent domain has done to our economy:

Kevin Minden studied a map of the future Mississippi River bridge, looking for clues as to how it might affect his engine rebuilding shop.

One of the connector ramps will run a few blocks from his building, which has him concerned that the bridge might lead to a development boom. Minden fears losing his land to a developer.

“Everything in that area is old,” Minden said. “What are they wanting people to see when they drive across?”

Of course in a rational world, business owners would welcome a development boom because it would mean more business and higher property values. But under the eminent domain laws currently in force in Missouri, re-development is a threat to existing business owners, especially smaller ones, who are likely to be pushed out of the way to make room for new shopping malls, big-box retail stores, and the like. It’s a serious problem. I documented Missouri’s flawed eminent domain laws in a study for the Show-Me Institute last year, but the problem certainly isn’t limited to the Show-Me state. In last year’s eminent domain report card from the Institute for Justice, only five states had done the kind of comprehensive reform necessary to earn an “A” grade, while almost half of states—Missouri included—received a “D” or “F” grade, suggesting that they have done little or nothing to strengthen property rights. Further reforms are needed to ensure that property owners in all 50 states can be secure in the knowledge that they won’t be shoved aside for the benefit of another private party.

Debating Health Care Reform at Colby College

Last month, I debated the direction America should take in reforming its health care sector with Prof. Hugh Waters of Johns Hopkins University’s Bloomberg School of Public Health.  We squared off in front of students and faculty at Colby College in Waterville, Maine, under the auspices of the college’s Goldfarb Center for Public Affairs and Civic Engagement.  Those interested can find more information here or listen to the debate here.