K for Korruption

The Washington Post has been running a series on its website (Citizen K Street) on the life of Gerald Cassidy, the preeminent entrepreneur of federal budget earmarking since the 1970s. Here are a few thoughts:

- Cassidy is a liberal Democrat, but a much more important aspect of his character seems to be his insatiable quest for money, money, money.

- Rather than adding to the nation’s gross domestic product, Cassidy earned his fortune of about $125 million as the middleman in the forced transfer of wealth from taxpayers to state and local recipient groups willing to play the Washington game.  

- Annual revenues of registered lobbyists in Washington have increased from $100 million in 1975 to $2.5 billion by 2006.

- The word “conservative” doesn’t have any meaning when it comes to big government spending. The Post describes former Rep. Jamie Whitten as a “conservative Mississippi Democrat,” yet Whitten was a famous pork barrel spender. The Post story also captures a smiling Tom Delay and Roy Blunt–supposedly staunch Republican conservatives– at a party in honor of Cassidy and Associates’ 30-year record of lobbying for pork.   

- Cassidy pioneered earmarking for universities and other state and local institutions. His firm provides a very high return on investment for his clients. One client paid Cassidy $1.3 million in fees and was rewarded with a $29 million taxpayer-funded earmark. Another client paid Cassidy $15 million and received $106 million in earmarks. And in another case, a client paid Cassidy $1.2 million and received a $15 million earmark.

- Washington tends to attract sharp, aggressive, amibitious people like Cassidy, who want to become rich, and don’t seem to care about limited government, constitutional government, good government, or the broad public interest. 

- When you combine democracy with the tremendous entrepreneurial abilities of folks like Cassidy, and some of the members of Congress he serves, the result is a federal government that will spend about $3 trillion this year.   

DHS Privacy Committee Meeting Tomorrow

The DHS Data Privacy and Integrity Advisory Committee meets tomorrow (Mar. 21) at the Crowne Plaza Washington National Airport in Arlington. 

The morning agenda is heavy on REAL ID, and we’ll hear from Jonathan Frenkel, a Senior Policy Advisor at DHS who was one of the key officials responsible for writing the recently issued regulations.

More on Libertarians and Democrats

In a blog post yesterday, my colleague John Samples tried to pour cold water on my idea of libertarian outreach to the left. Specifically, he cites depressing polling data that show strong support among Democratic voters for increased government spending. Alas, the appetite for free ice cream from Washington isn’t restricted to Democrats, as I point out in an essay for this month’s issue of Cato Unbound. I’ll concede, though, that Democratic voters are especially unlikely to pressure their representatives to show spending restraint.

Does that mean libertarians have no business seeking common ground with liberals? Let me make just a couple of quick points.

First, polls aren’t everything. After all, as Cato’s Stephen Slivinski has written, real federal spending increased at an annual rate of only 1.5 percent under Bill Clinton, as compared to a 5.6 percent rate of growth during George W. Bush’s first term. So Democratic politicians can run and win on a record of fiscal prudence. Yes, it’s true that Clinton’s good spending record was due in significant part to the fact that he faced a GOP Congress for most of his time in office. But this just shows that people who care about controlling spending would do better to rely on divided government than on Republicans’ small-government rhetoric. And you can’t have divided government without electing some Democrats!

Second, spending isn’t everything. The cause of limited government has many other dimensions besides the degree of budget bloat. How, I wonder, do Democratic voters compare to Republicans in their attitudes on getting out of Iraq? Getting into Iran? Torture? Warrantless wiretapping? Immigration? The drug war? Whatever voters tell pollsters, it’s clear that Democratic politicians are more likely than their GOP counterparts to resist government overreaching in these vital areas.

The sad fact is that libertarians have few allies today in either political party. Why on earth then should we refuse to seek common ground with those Democrats who hold relatively pro-market attitudes?

Just like Ohio’s Children, Gov. Strickland Needs a Good Education

Ryan Boots over at Edspresso hits Ohio’s new Governor Ted Strickland  for claiming that vouchers are “inherently undemocratic.”  Strickland thinks that vouchers are “inherently undemocratic” because “they allow public dollars to be used in ways and in settings where the public has little or no oversight,” and “those who are paying those tax dollars have no ability to vote for a board of education or to make determinations regarding curriculum, or discipline or admission policies or a whole range of things.”

As Ryan points out, this just isn’t the case with the highly (over)regulated EdChoice program, which encumbers participating schools with an array of restrictions that ensure no real market in education services will arise to serve the needs of the neediest children.

Even if Strickland’s fantasy voucher program did exist, however, the current system of government schooling is less democratic and more prone to corruption.  The profligate spending, waste and outright fraud that characterize the government education system hardly suggest that it is subject to effective public oversight.

And for good reason … it is controlled by the education-industrial complex, aka “Big Ed,” which short-circuits all political attempts to direct it for the public good.  Big Ed controls board of education elections as well as “determinations regarding curriculum, or discipline or admission policies or a whole range of things.”  That’s why exasperated policy experts with no love of the free market are calling for parental choice in education and why parents are desperate to escape a system they pay for but can’t control.

But Strickland does hit on one good point, buried though it may be beneath a pile of misconceptions and delusions.  “Those who are paying those tax dollars” for education should be able to direct their money to the kind of education that they support.  Agreed.

Taxpayers should not be forced to pay for kids to learn about condoms in the 3rd grade or abstinence-only in the 12th grade. Forcing all parents to educate their children in the same way is a recipe for irresolvable value conflicts and civic strife.   Disbursing general revenues for education forces some people to pay for education with which they disagree.

Education tax credits allow every taxpayer to support the kind of education they want to and force no one to pay for education to which they object.  Tax credits create a public education system where schools are accountable to the parents who choose them and the people who pay for them … not through a corrupt political process beholden to Big Ed, but directly accountable to the people themselves.

That is true oversight. That is a democratic system of education.  If Strickland can’t support vouchers, he certainly has no reason to oppose education tax credits.  Other than fealty to Big Ed over our children.

REAL ID News and Views

An interesting report says that at least one member of the Carter-Baker Commission would not have signed on to its recommendation to use REAL ID as a voter ID card had she known more about it.

Meanwhile, the Boston Globe editorializes against REAL ID, calling it “unrealistic.”

Greater safety is imperative. But given its flaws, the Real ID law should be scrapped. The country needs to invest more thought, time, debate, and money into how best to upgrade driver’s licenses.

Health Insurance Do-Nots

Kate Bundorf and Mark Pauly examine the issue of the affordability of health insurance.

health insurance is unaffordable for 10.5 percent of adults aged 25-64. For the whole sample, using the poverty line as a benchmark, 71 percent of the currently uninsured population could afford health insurance coverage. Increasing the definition of affordability to family income exceeding three times the poverty threshold, the proportion of “uninsured afforders” declines to 28 percent.

Bundorf and Pauly also present a number of estimates defining affordability thresholds according to the proportion of individuals with similar characteristics who purchase insurance. Using a definition of health insurance as affordable if the majority of people in similar circumstances purchase coverage, the authors find that health coverage was affordable to between 59 and 66 percent of the [un]insured, depending on the characteristics used to define individuals as similar. Using the threshold that 80 percent of similar households purchase insurance, they find that around 25 percent of the uninsured could afford coverage based on peer comparisons.

This is empirical support for the phenomenon that I once described as health insurance do-nots.

The State Department’s Misguided Money-Laundering Wish List

A couple of decades ago, there were no laws against money laundering. Instead, governments fought crime by…well…fighting crime. Then politicians came up with the idea of making it illegal to use the proceeds of crime. This was not necessarily a bad idea. After all, crime theoretically will be reduced by polices that either increase the expected punishment or lower the expected rewards. Unfortunately, anti-money laundering laws have been an expensive failure. They costs billions of dollars yet there is no peer-reviewed literature showing that they have any impact on crime. Heck, they don’t even stop crooks from laundering funds. Yet the myopic bureaucrats at the State Department publish an annual report hectoring other nations to make their anti-money laundering laws more intrusive and burdensome. Richard Rahn’s Washington Times op-ed reviews some of the sillier suggestions:

This month, the State Department has set a new record by managing to insult the citizens of 123 different lands at one time in the “International Narcotics Control Strategy Report: Volume II, Money Laundering and Financial Crimes.” The 450-page report discusses what other countries are doing to reduce money laundering and financial crimes, which is fine. But then the authors go on gratuitously lecturing each of the countries by name about how they could do things “better.” To understand the total hypocrisy of the State Department nags, it is important to remember that more money laundering goes on in the United States than anywhere else, and that the U.S. is the world’s biggest market for illegal drugs. The Report…is filled with endless demands that other countries do a better job enforcing their laws, pass more laws, sign more international treaties and engage in some practices that would be illegal and unconstitutional in the U.S. Many of the demands would not meet a reasonable cost-benefit test… Some examples: The Belgians “should strengthen the adherence to reporting requirements by some nonfinancial entities, such as lawyers and notaries,” so says State, while completely ignoring the importance of lawyer client confidentiality. …To the Germans they say, “Amend legislation to waive the asset-freezing restrictions in the EU Clearinghouse for financial crime and terrorism financing, so that the freezing process does not require a criminal investigation.” Perhaps, the folks at State Department forgot there are certain historical reasons why the Germans now insist on strong legal protections against a potentially abusive state. The Greeks (and others) are told, “Abolish company-issued bearer shares, so that all bearer shares are legally prohibited.” Maybe the State Department gurus were unaware that bearer shares are perfectly legal in some states in the U.S., such as Nevada, and can serve a sound economic and personal privacy purpose. The authors say the government of Dominica “should eliminate its program of economic citizenship.” But then again, maybe they were unaware that many, if not most, countries allow permanent residency and/or citizenship (including the U.S.) to noncitizens who invest a certain amount in their adopted homeland. …Singapore is told that it “should add tax and fiscal offenses to its schedule of serious offenses.” Perhaps again, it did not occur to the folks in State that the highly educated and prosperous citizens of Singapore are quite capable of figuring out for themselves which laws ought to be “serious offenses.”