The White House Privacy Board Hasn’t Gotten Everything Right

In a recent post, I lauded the White House Privacy Board for its use of an analytical framework similar to the one I helped produce for the DHS Privacy Committee. It wasn’t a total endorsement, and I covered my … tracks by saying, “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.”

Someone else shares that view, someone who should know. Lanny Davis, the lone Democrat on the Board, has resigned. Newsweek reports that he complains of “substantial” edits of the board’s report in his resignation letter.

Davis charged that the White House sought to remove an extensive discussion of recent findings by the Justice Department’s inspector general of FBI abuses in the uses of so-called “national security letters” to obtain personal data on U.S. citizens without a court order. He also charged that the White House counsel’s office wanted to strike language stating that the panel planned to investigate complaints from civil liberties groups that the Justice Department had improperly used a “material witness statute” to lock up terror suspects for lengthy periods of time without charging them with any crimes.

I am not a bit surprised. Serving as I do on a similar board, I am keenly aware of the pressures to conform the group’s findings to the prevailing view at the sponsoring agency. So far, the DHS Privacy Committee has been pretty good at resisting that, but it is not fully independent by any stretch.

This all is a reminder: Privacy will never be protected by government-constituted boards or officials. It is a product of individuals having the power to control information about themselves and exercising that control consistent with their interests and values. Don’t ever think you’ve got privacy because there is a White House Privacy Board or a DHS Privacy Committee.

Uncle Sam: Electrician

My new Cato policy analysis goes into great detail about how the federal government uses your tax money to subsidize businesses.  In fiscal 2006, the “corporate welfare state” cost $92 billion, all of which funded programs that provide unique benefits to particular companies or industries.

One of these programs is the Rural Utilities Service (RUS).  A relic of the New Deal, the goal of the program was to electrify the countryside.  Now that reading by candlelight in the boonies is a thing of the long forgotten past, the RUS has morphed into a fountain of cash for rural electricity co-ops. 

As a story on the front page of this morning’s Washington Post highlights, it’s always easier to create a program than to kill it:

The key to the longevity of the Agriculture Department’s programs for rural utilities has been the [electricity co-ops’] powerful political voice. More than 30,000 members gave an average of $41 last year to the co-op association for political contributions. Given their geographic scope, the co-ops can mobilize letter-writing campaigns across a vast number of states and congressional districts.

To learn more about the corporate welfare budget generally, tune in to my live interview on Bloomberg Radio’s “On the Economy” today at 6:30 pm Eastern.  A podcast about the corporate welfare state will be featured on the Cato website on Tuesday.   

Another Crack in Democracy’s “Bedrock”

It’s often argued that by letting parents select private schools for their children that teach curricula and values not vetted by government, school choice would destroy American democracy. In contrast, government-controlled schooling takes children from diverse backgrounds and forges them into unified, informed, tolerant Americans, making public schools the “bedrock” of American democracy.

Phooey.

In Why We Fight: How Public Schools Cause Social Conflict, I attempted to debunk those notions, pointing out how government schooling regularly forces divisive social battles and does little to foster meaningful unity. In a new Education Next article, University of Arkansas professor Patrick Wolf digs deeply into a critical component of the debate, zeroing in on what civic values and knowledge schools actually teach, and what children actually learn.  His analysis offers powerful evidence that the “bedrock of democracy,” compared to private education, is more like loose sand:

Findings from existing studies suggest that the effect of private schooling or school choice on civic values is most often neutral or positive. Among the group of more-rigorous studies, 12 findings indicate statistically significant positive effects of school choice or private schooling on civic values and 10 suggest neutral results. Only one finding from the rigorous evaluations indicates that traditional public schooling arrangements enhance a civic value.

Recommended reading.

As If Canada Were a Separate Country

Jim Harper adequately documents (1) how the State Department is bungling my wife’s application for a new passport, which one now needs to fly to Montreal (for some reason), and (2) my appeal to the opposite sex. 

I would add only that, while David Boaz is correct that a fence between the U.S. and Mexico is not exactly Berlin Wall-esque (“The Berlin Wall was designed to keep citizens in”), this bone-headed rule that one cannot fly to Canada without a passport might be: it actually does make it more difficult for American citizens to leave.

Are Short-Sighted Politicians (and Greedy Voters) Undermining Democracy?

Writing for American.com, Kevin Hassett notes that politically repressive market-oriented nations are growing faster than politically free market-oriented countries. He issues the obvious caveat that - everything else being equal - we expect poorer countries to grow faster, but he wonders whether democratic regimes sow the seeds of their own destruction (or at least create for themselves a competitive disadvantage) by enabling people to seize unearned wealth through the political process:

…the countries that are economically and politically free are underper­forming the countries that are economically but not politically free. For example, unfree China had a growth rate of 9.5 percent from 2001 to 2005. But China was not the whole story—Malaysia’s GDP grew 9.5 percent from 1991 to 1995, Singapore’s GDP grew 6.4 percent from 1996 to 2000, and Russia’s grew 6.1 percent from 2001 to 2005. The unfree governments now understand that they have to provide a good economy to keep citizens happy, and they understand that free-market econ­omies work best. Also, nearly all of the unfree nations are developing countries. History shows they grow faster, at least for a while, than mature nations. But being unfree may be an economic advantage. Dictatorships are not hamstrung by the preferences of voters for, say, a pervasive welfare state.

Advocates for freedom usually - and with great justification - blame politicians for these outcomes, but a new book by Bryan Caplan says voters deserve part of the blame. Both Cafe Hayek and Marginal Revolution draw attention to Caplan’s work.

WHTI Does More Harm Than Good

The Woodrow Wilson Center’s Canada Institute is having an event May 30th entitled “People, Security and Borders: The Impact of the Western Hemisphere Travel Initiative on North America.” It looks like a good event exploring an important suite of issues.

I’ve been drawn into WHTI because of the privacy consequences of many border control efforts - RFID-chipped passport cards and such - but the trade issues are just as important. My back-of-the-envelope calculations about the costs of WHTI (exchanged for essentially no increased security) can now be augmented by not one, but two compelling anecdotes! Both have to do with Montreal … .

Anecdote #1 - The Busy, er, Dopey Traveler
A couple of weeks ago, I embarked on a quick round of travel to speaking engagements in Orlando and Montreal. Then, after a day in Chicago, I had planned a weekend in Las Vegas (to properly release a bachelor friend from the bonds of singledom).

As I headed to the Dulles airport bound for Orlando, I realized that I had not brought my passport for the Montreal portion of the journey. After burning a lot of candle-power figuring out what to do, I had a tenant of mine FedEx my passport to Orlando for arrival the next morning. ($24 + gratuity for the little feller going well out of his way = $40)

It arrived well after my scheduled flight for Montreal had departed, so I turned up at the Orlando airport around noon hoping to stand by on later flights. Informed that this was an impossibility on international flights (also, I believe, because of security), I came close to cancelling my attendance at the Computers, Freedom & Privacy conference in Montreal, but I persisted. (Who knows what rules were bent on my behalf, or what the rules actually are.) It took me about 14 hours and a good deal of stress to get to Montreal.

(N.B. This episode was not a stunt done to prove a point - I only do those when reporters agree to come along. It was a simple oversight because I don’t think of Montreal as being in a “foreign country” they way Lisbon or Hong Kong are.)

Long story short (oops, too late), the stresses of comporting myself to the passport requirement and various other security measures caused me to abandon the Vegas portion of my trip and head back to D.C. from Chicago for a quiet weekend. Careless as I am in tinsel-town, that probably kept $1,000 from circulating into the U.S. economy.

Anecdote #2 - The On-the-Ball Travelers
The Cato Institute’s own Michael Cannon was married two years ago. (Yes, there’s somebody out there for everyone.) To celebrate his recently completed graduate schooling and their second anniversary, he and his wife have been planning to go to Montreal this weekend.

The new(ish)ly renamed Mrs. Cannon has her act together - opposites attract, you see - and a few months ago, anticipating this trip, she applied for a passport in her new name. The check was cashed back in March, but the passport has yet to materialize.

At this moment, the two are in logistics hell, trying to navigate the State Department’s bureaucracy (including its downed electronic appointment scheduling system).

What will happen? Nobody knows. Will herculean efforts by Mrs. Cannon and her hubby produce a passport? Will the two cancel their trip? Will Mr. Cannon persist in the face of this heavy, security based regulation and go on his own?

Programs like WHTI are often justified as being part of a layered security system for the United States. “Layered security” is a legitimate way of thinking about things. One shouldn’t rely on a single security system, because that creates a single point of failure. However, security layering doesn’t end the inquiry. Each layer must provide security that is cost-justified. If checking the passports of Canadian-border crossers doesn’t create a substantial protection - and it doesn’t - that layer does more harm than good.

The United States is not safer because of what the Cannons are experiencing. It’s just smaller and unhappier.

Paulson Warns: Over-Taxation and Over-Regulation Hamper US Competitiveness

Treasury Secretary Henry Paulson recently spoke in St. Louis on the importance of having an open and competitive economy. While many politicians assume cross-border economic activity is a threat and like to blame foreigners for any bad news, Paulson correctly noted the benefits of openness and warned that America’s biggest challenge may be self-inflicted wounds caused by too much taxation and too much regulation. Tax-news.com reports:

Paulson warned that the US is starting to lose its edge in terms of tax competitiveness as emerging economies compete fiercely for foreign investment. …According to the US Treasury, in the last few years, the United States has not received as high a share of total worldwide FDI as it did before 2000. Paulson said that this trend could be due to the growth of opportunities in emerging markets, burdensome US legal, regulatory and corporate tax regimes, or the misperception that the United States is no longer open to foreign direct investments. In any event, the Treasury Secretary said that such statistics were “cause for some concern”. …He went on to tell the Forum that: “The United States has historically been the best place in the world to do business and is a magnet for foreign investment, so it’s important to reaffirm both our openness to foreign direct investment and the benefits investment brings to the US economy. And as we seek to attract foreign capital, we must realize that we have a constantly changing world where there are an increasing number of attractive economies across the globe competing for investment dollars. Against this backdrop, we must assess the cost versus the benefits of our regulatory structure and certain aspects of our legal system that may discourage foreign investment.” Paulson said that tax competitiveness was an integral part of maintaining foreign interest in the US economy, perhaps hinting that the administration’s goal of substantial tax reform is no longer the lost cause that supporters of tax code simplifcation had begun to fear. “Our corporate tax system is also increasingly putting us at a competitive disadvantage with some – with a few other nations which tax companies or capital at lower rates than does the US,” he stated.

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