Dear Journalists: Please Ask Hillary This Question

Senator Clinton, it has been suggested that education tax credit programs would allow universal school choice without creating the problem you have identified with school vouchers. Do you support state-level education tax credits, and if not, why not?

Here’s why this is the $64,000 question for the senator: asked about her views on school choice and vouchers, she recently responded as follows:

My problem with vouchers … is that if you provide vouchers through tax dollars, under our Constitution, to religious and private schools that you and I would agree are appropriate — that do a good job on education — how do you say no to the schools that, frankly, I would not want my tax dollars supporting — the school of white supremacists, or the school of the jihadists’ vision? You give vouchers to Catholics or Protestants, and then somebody says, ‘Well, I want my voucher for the church school that I want my child to attend.’ But you don’t want to support those values… . How do you draw that line?

The answer is to allow taxpayers to make that decision as they see fit, by offering school choice through tax credits instead of vouchers. Vouchers are, indeed, “public money.” We’re all forced to pay taxes. So, under a government school voucher program, we might be compelled to support sorts of education we find morally objectionable. But though Senator Clinton doesn’t seem to realize it, this is even more true of the existing public school system. That’s why we have been fighting school wars over what and how to teach our children for the past century and a half.

There is a simple solution to this problem: allow universal school choice through education tax credits instead of vouchers. Under a tax credit program, no government money is spent (see my blog post to that effect yesterday). Families who owe property taxes or state sales or income taxes basically receive a tax cut if they take financial responsibility for their own children’s education (paying tuition, or home-schooling them). Families with little or no tax liability would receive private scholarships that are funded by tax creditable donations from individuals and businesses. Both kinds of programs already exist, at a very tiny scale, in several states.

Both the personal use tax credits and the scholarship donation tax credits allow taxpayers to decide who receives their money — this is categorically different from both our current monopoly public school system and from government voucher programs. If you want to support the ability of poor families to choose their children’s schools instead of being locked into a particular public school, you can give money to a particular Scholarship Granting Organization of your own choosing.

If you don’t wish to subsidize education that you consider extremist, you can pick an SGO that does not allow its scholarships to be used at such schools. Because many different SGOs arise under scholarship tax credit programs, both low income families and taxpayer/donors can find ones that comport with their own needs and preferences. This arrangement all but eliminates the compulsion about which the senator has expressed concern. And if she really cares about that compulsion, she should prefer tax credit school choice programs to the status quo, because the current monpoly public school system engenders more compulsion than any other.

So, Senator Clinton: Do you support school choice through education tax credits instead of vouchers, and if not, why not?

A Seam Opens …

An oft-repeated scene in the Washington, D.C. kabuki dance recently began with the release of former CIA director George Tenet’s memoir At the Center of the Storm: My Years at the CIA.

I don’t find it particularly interesting to watch a mighty ego defend his honor — mighty egos in the U.S. government are as common as pigeons in the park. (It has to be that way, doesn’t it? Only an inflated ego thinks it can run a government as overlarge as ours.) But I’m pleased by the healthy airing of differences the book has spawned.

This morning in the Washington Post, Richard Perle takes after Tenet about factual inaccuracies in the book. (Puffing pigeons.) The rift starts to reveal some important, but long overlooked, information.

Perle writes, “the CIA failed to make our leaders aware of the rise of Islamist extremism and the immense danger it posed to the United States.” An example I would offer is the presence of Nawaf al-Hazmi and Khalid al-Mihdhar inside the United States — terrorists linked to the USS Cole bombing. Of al-Mihdar, the 9/11 Commission reported, “No one was looking for him.” The story is recounted in brief in my Cato Policy Analysis (with Jeff Jonas) Effective Counterterrorism and the Limited Role of Predictive Data Mining.

A conclusion of that paper: “In the days and months before 9/11, new laws and technologies like predictive data mining were not necessary to connect the dots. What was needed to reveal the remaining 9/11 conspirators was better communication, collaboration, a heightened focus on the two known terrorists, and traditional investigative processes.”

As U.S. government officials turn against each other, they help reveal that their agreement to turn against us — in the USA-PATRIOT Act, domestic spying, and myriad other laws and programs — was a salve for those wounded egos. They didn’t want to admit that they outright missed the 9/11 attacks.

Structured Analysis at the WH Privacy Board

The White House’s Privacy and Civil Liberties Oversight Board recently came out with its annual report, which details its organization, operations, and recent work.

I was pleased to see that it has adopted a structured approach to analyzing privacy and related issues (see pages 24-25). Its approach is quite similar to the one adopted in the Framework document created by the Department of Homeland Security’s Data Privacy and Integrity Advisory Committee. (Well, I’ll put a finer point on it: the Privacy Board report acknowledges and thanks me and the committee. It’s very nice to be singled out, of course, but the Framework document was the product of many minds, eyes, and hands from the DHS Privacy Committee.)

This doesn’t mean the White House Privacy Board has gotten everything right, of course. I have no doubt that they could have done better. But it is very important progress to see a group like this committing to an organized, structured thought process. Doing so facilitates the discussions that lead to improved, better understood, and more widely agreeable outcomes.

(Some) Developing Countries Don’t Like the “Trade” Bit in “World Trade Organization”

The Doha round of world trade talks stagger on, with the latest “deadline” for completion of a deal set at end-2007 (i.e., before the US presidential campaign season gets underway in earnest). Last week the chair of the agriculture negotiations released a paper designed to inject movement back in to the agriculture negotiations that are proving the key stumbling block to reaching a deal on the other important areas of world trade. (On why agriculture is such a big deal, considering its relatively small share in world goods trade, see here). In any event, the chairman’s paper has been roundly criticized, which means it has been a success.

Part of the skirmish, and this is true of the trade talks more broadly, is the explicit commitment to give developing countries “special and differential (S&D) treatment” in the negotiations. In other words, poorer countries have to lower their trade barriers less than do developed countries. In the wake of the disastrous meeting in Cancun in September 2003, when developing countries flexed their muscle, these sorts of concessions were deemed necessary to get the Doha round back on track.

Unfortunately, the S&D provisions have been used frequently as an excuse for developing countries to do almost nothing to lower their trade barriers. It is not quite that clear-cut, of course. Many developing countries have an interest in exporting to other developing countries, and so want to see trade barriers come down across the board. But generally, developing countries feel that this round is about developed countries lowering their barriers to developing country goods and services, while the poorer nations continue to protect their “sensitive” goods markets from competition.

Mercantalism is to some extent the basis of the World Trade Organization: it presupposes that countries will only open their markets in return for increased access for their exports, from which the benefits of trade flow. That’s economic nonsense, of course, but in the absence of political will for unilateral trade liberalization (see more about that here), the negotiated multilateral route is the best one towards freeing markets and giving consumers access to cheaper and more goods and services.

The new development focus of the WTO, however, is proving to be an obstacle in itself to reaching a deal. South Africa, for example, on behalf of a group of other developing countries, read a statement in a meeting earlier this week of the negotiating group on market access (for industrial–or manufactured–goods) that, according to an article today:

“accused rich countries of subverting the talks known as the Doha round by seeking to advance their commercial interests instead of the original “development” goal of lifting millions of people worldwide out of poverty through free trade.” (emphasis added)

Seeking to advance their commercial interests? Those shameless knaves!

The World Trade Organization is just that – a trade organization. It is not a development institution. It is true that freer markets and trade lead to economic growth, but the Doha round of trade talks is a commercial negotiation, not a donors’ conference.

Naming it the ‘Doha Development Agenda’ may have been politically necessary, but it has proven to be a big mistake.

Wisconsin Gas Station’s Prices Are Too Low!

At least, as Dan noted below, that’s the verdict of state regulators, who recently threatened to sue a BP station owner unless he discontinues giving a 2 cent per gallon discount to senior citizens and a 3 cent per gallon discount to boosters of local youth sports programs.

According to Wisconsin regulators, the discounts represent “unfair competition” against other gas stations, and that — get this — imperils consumers. A 1939 Badger State law requires retailers to sell motor fuels at no less than a 9.2 percent markup over the wholesale price.

Wisconsin is not the only state with such a law — a dozen others (Alabama, Colorado, Florida, Louisiana, Maryland, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, and Utah) have similar provisions to protect gas station owners from the horrors of price competition.

You would think that, amidst the Sturm and Drang of the past few years’ high fuel prices, the public would force lawmakers to throw out this welfare for gas station owners. Alas, no.

Hat tip: Tim Rowland

Ban on Travel to Cuba Makes a Martyr out of Michael Moore

I normally don’t have the time of day for Michael Moore, the far-left filmmaker, but count me on his side in his current run-in with the U.S. Treasury Department.

Moore is under investigation for allegedly violating the U.S. government’s virtual ban on travel to Cuba. In February, Moore traveled to the socialist workers’ paradise with a group of Americans seeking medical care. The trip formed a segment of Moore’s new film “Sicko” that takes a critical look at America’s health care system.

According to an Associated Press story this morning:

The Treasury Department’s Office of Foreign Assets Control notified Moore in a letter dated May 2 that it was conducting a civil investigation for possible violations of the U.S. trade embargo restricting travel to Cuba. A copy of the letter was obtained Tuesday by the AP.

This office has no record that a specific license was issued authorizing you to engage in travel-related transactions involving Cuba,” Dale Thompson, OFAC chief of general investigations and field operations, wrote in the letter to Moore.

According to U.S. law, Moore could be fined thousands of dollars for violating our decades-old ban on travel to, trade with, and investment in Cuba.

As we have long argued at Cato [check out our research on the subject], the economic embargo against Cuba violates the freedom of Americans while giving the Castro government a handy excuse for the economic failures of its communist system.

By bringing this action against Moore, the U.S. government will turn him into a sympathetic martyr while providing millions of dollars of publicity for his latest piece of propaganda.

All Your Money Is Belong to Us (not)

The Ed Sector’s Sara Mead made a passing comment recently that, “yes, vouchers or tax expenditures in the form of tax credits are public funding.” The problem with this statement is not just that it’s wrong in general, or even that it has repeatedly been found to be wrong with specific regard to education tax credit programs, but that its wrongness has been a matter of court record for long enough that anyone working in education policy can reasonably be expected to be aware of it.

The most notable relevant case is Kotterman v. Killian, in which opponents of Arizona’s education tax credit program challenged it on the grounds that public money was being used to pay for religious instruction. Writing for the majority, Arizona Supreme Court Chief Justice Thomas A. Zlaket observed that

According to Black’s Law Dictionary, “public money” is “[r]evenue received from federal, state, and local governments from taxes, fees, fines, etc.” …. As respondents note, however, no money ever enters the state’s control as a result of this tax credit. Nothing is deposited in the state treasury or other accounts under the management or possession of governmental agencies or public officials. Thus, under any common understanding of the words, we are not here dealing with “public money.”

There’s much more. The AZ Supreme Court utterly gutted the plaintiff’s arguments on this matter. In their decision, the justices also cited numerous precedents from other states reaching the same conclusion, and subsequent rulings from Illinois regarding that state’s education tax credit program have further cemented this view.

When I see obviously counterfactual, readily falsified claims such as Mead’s, by people who should know better, I’m always deeply puzzled as to how and why they occur. Somebody throw me a bone here.