How did Adam Smith feel about fiat money?
Since the news media keeps saying that we’re heading for a “constitutional showdown” between President Bush and the Congress, it’s time for a pop quiz.
Who wrote the following passage?
“Congress’s power to compel members of the executive branch to obey its legitimate requests for information has long been deemed critical to the functioning of our democracy and has been upheld by the Supreme Court.”
A. Hillary Clinton
B. Dick Cheney
C. Thurgood Marshall
D. John Yoo
The correct answer is D, John Yoo. See “How Congress’s Subpoena Power Works,” Wall Street Journal, May 28, 1997. Interestingly, ten years later, there’s another op-ed in the Journal, but today’s piece (subscription required) argues that the Bush Administration can resist congressional subpoenas that relate to the current controversy concerning the firing of the U.S. Attorneys.
Yesterday, Senator McCain took issue with Wolf Blitzer’s statement that “everything we hear, that if you leave the so-called green zone, the international zone, and you go outside of that secure area, relatively speaking, you’re in trouble if you’re an American.” Here’s McCain’s response:
MCCAIN: You know, that’s why you ought to catch up on things, Wolf.
General Petraeus goes out there almost every day in an unarmed Humvee. You want to – I think you ought to catch up. You see, you are giving the old line of three months ago. I understand it. We certainly don’t get it through the filter of some of the media.
But I know for a fact of much of the success we’re experiencing, including the ability of Americans in many parts – not all. We’ve got a long, long way to go. We’ve only got two of the five brigades there – to go into some neighborhoods in Baghdad in a secure fashion.
Then Michael Ware, a reporter who has been in Iraq for years, came in for a later segment, and challenged Senator McCain’s claim:
MICHAEL WARE, CNN CORRESPONDENT: Well, I’d certainly like to bring Senator McCain up to speed, if he ever gives me the opportunity. And if I have any difficulty hearing you right now, Wolf, that’s because of the helicopter circling overhead and the gun battle that is blazing just a few blocks down the road.
Is Baghdad any safer?
Sectarian violence – one particular type of violence – is down. But none of the American generals here on the ground have anything like Senator McCain’s confidence.
I mean, Senator McCain’s credibility now on Iraq, which has been so solid to this point, has now been left out hanging to dry.
To suggest that there’s any neighborhood in this city where an American can walk freely is beyond ludicrous. I’d love Senator McCain to tell me where that neighborhood is and he and I can go for a stroll.
And to think that General David Petraeus travels this city in an unarmed Humvee. I mean in the hour since Senator McCain has said this, I’ve spoken to some military sources and there was laughter down the line. I mean, certainly, the general travels in a Humvee. There’s multiple Humvees around it, heavily armed. There’s attack helicopters, predator drones, sniper teams, all sorts of layers of protection.
So, no, Senator McCain is way off base on this one – Wolf.
Predictably, right-wing blogs and radio programs went into a tizzy that Ware, a man who has, after all, only been on the ground in Iraq for four years, would have the temerity to challenge Senator McCain. Fortunately, the Washington Post has posted retired Gen. Barry McCaffrey’s paper for the U.S. Military Academy (.pdf) on its website today. Perhaps it can help clarify the situation?
No Iraqi government official, coalition soldier, diplomat, reporter, foreign NGO, nor contractor can walk the streets of Baghdad, nor Mosul, nor Kirkuk, nor Basra, nor Tikrit, nor Najaf, nor Ramadi—without heavily armed protection.
It seems Senator McCain either a) doesn’t know what he’s talking about, or b) is not telling the truth. In either case, continuing cause for alarm from a man who wants to be president.
Deploring the Sixties and the sexual revolution has become big business. Myron Magnet may have kicked it off with his book The Dream and the Nightmare, which focused on the poor. (The publisher bills this as “the book that made George W. Bush President,” but honestly, I don’t think you can blame Magnet for that.) He followed that with Modern Sex: Liberation and Its Discontents. For the younger generation, Wendy Shalit offered A Return to Modesty. Like a lot of conservative authors, she told us that the ladies of “Sex and the City” are a walking embodiment of “the failure of sexual liberation.”
No doubt the new rules about sex, gender, courtship, and marriage have indeed brought much heartache. But there’s a reason people threw over the old rules. We can point to some sociological explanations–the pill, for instance. Not to mention the pill appearing on the scene at the same time as the explosion in college attendance and the Vietnam war. See Brink Lindsey’s forthcoming book The Age of Abundance: How Prosperity Transformed America’s Politics and Culture for some of that story.
But there’s also a more personal reason that the old rules failed: they too caused a lot of pain. Friday night the TCM channel will broadcast a sweet and sad movie, Cheers for Miss Bishop, released in 1941 and set in the late 19th and early 20th centuries. Miss Bishop graduates from college and stays on to teach for 50 years. She never marries. And that means, given the strictures of the time, that she never experiences a full love affair. In her youth she is engaged to a young man, but he takes a tumble with her less-respectable cousin, so of course she can’t marry him. Twenty years later, mirabile dictu, she gets another chance, with a cultured and educated visiting professor. But his wife won’t give him a divorce, and she can’t go off to Italy with a married-but-separated man. So it’s back to spinsterhood for Miss Bishop.
I can never remember if this movie is called Cheers for Miss Bishop or Tears for Miss Bishop. It’s presented as a touching story, with 50 years of students returning to celebrate the difference she made in their lives. And so she did. But she gave up two chances at real happiness because of the strictures of the old rules. The old rules certainly had their uses – there were fewer STDs and fewer fatherless babies (there’s an irony, considering that it was the pill that helped to usher in the new world) – but they also condemned some people to lonely lives.
Watch Tears – I mean, Cheers for Miss Bishop Friday night and give two cheers for the sexual revolution.
Although the government lacks a majority in Parliament, the Czech Republic’s Prime Minister has announced a 15 percent flat tax. According to Tax-news.com, the proposal will be unveiled next month:
Czech Prime Minister Mirek Topolanek has reportedly stated that his government’s plan to introduce a flat income tax is a near certainty. In comments made to the daily Hospodarske Noviny newspaper, Topolanek said that at the moment, a 15% flat tax rate is “certain”. … The reform package will be published by the government in April. … Initially, the coalition had planned to introduce a flat tax at a rate of 17% to 19%. Corporate tax in the Czech Republic was reduced to 24% last year, and personal income tax rates are levied at progressive rates to a maximum of 32%.
Given the government’s precarious hold on power, it is unclear whether the proposal will be enacted. A Czech news service notes that the economic community likes the flat tax, but there is some concern that it will not get enough votes:
Analysts are cautiously optimistic that the government’s upcoming flat tax and other tax reforms, set to be announced April 3, may strengthen public finances. However, while all the analysts spoken to by CBW agree a tax reform is much needed, and that the proposals published thus far would have a positive impact on the economy, they caution that the draft legislation is still a long way from the law books and is likely to change before it gets there. … David Marek, macroeconomic analyst, with brokerage Patria Finance said that the lower corporate tax rates are the most important part of the reform because they will give the Czech Republic one of the lower corporate tax rates in Europe and encourage foreign direct investment.
But if it did get enacted, it would create additional pressure on Western Europe’s welfare states. One can only imagine that French and German politicians are praying that the flat tax is not adopted.
Sara Mead of Education Sector continues our discussion of education markets here. She rounds out her post by impugning my professional integrity, but not before she has misrepresented my position. I’ll begin at the beginning.
Mead claims that I advocate letting Chilean children languish under its current voucher system which financially discriminates against private schools serving the poor. I said no such thing. Among the many changes I would make to the Chilean system, the first would be to equalize public and private sector funding levels.
Mead then manages to combine two distinct errors into a single sentence: the first, a misrepresentation of the evidence, and the second, a non-sequitur. She writes: “Leave aside that it’s not clear [that expanding Chile’s choice program] would be desirable, since poor students in Chile’s private schools perform less well than those in its public schools.”
First, as I pointed out in my previous post, Chile’s government schools only outperform the private sector when they receive between 150 and 300 percent of the voucher amount – and it is government schools serving the poor that enjoy targeted federal funding programs not available to the private sector. When they receive only about as much as the voucher, or even somewhat more, government schools perform worse. So, by equalizing funding across sectors, Chile could make significantly more efficient use of its educational dollars in serving all its children. This 2002 finding by Sapelli and Vial is discussed in detail in the pieces to which I have previously linked.
Second, the non-sequitur: Even if Chile’s government schools were outperforming its private schools in serving the poor (which, taking funding levels into account, they are not) it would not follow that the choice program lacked value. That’s because the competition produced by the choice program has been improving achievement simultaneously in both government schools and private voucher schools. This result was demonstrated by researcher Francisco Gallego, and is also cited in the pieces I’ve linked to.
Next, let’s turn to the Netherlands. Ms. Mead complains that “Coulson doesn’t even engage with my argument that the situation of the Netherlands is fundamentally different from that of the United States in ways that make it unhelpful as an example here.” Mead presented no such argument. She simply claimed, without rational justification, that because the Dutch adopted a voucher system to end religious strife and ideological dissatisfaction over the content of government schooling, their experience doesn’t apply to us. A claim is not an argument, and this particular claim is simply wrong.
The earlier Dutch conflict over the content of its government schools is not a point of divergence between our countries, it is a point of similarity. St. Augustine’s Church was burned to the ground in 1844 during Philadelphia’s “Bible Riots” which were fought over which version of the Bible, Protestant or Catholic, would be used in government schools. To this day, there is a an ongoing cultural battle between Red and Blue America over what should be taught in public schools. Both our countries are pluralistic, and there is no reason to believe that the general international pattern of supply rising to meet demand under school choice programs would magically take a holiday in the United States.
If Mead wants to attempt an argument to the contrary, she is welcome to do so, but she hasn’t made one yet.
A related point that Mead does not seem to have internalized is that the usefulness of the international data is to be found in the patterns that exist across nations. When a consistent pattern of success or failure can be discerned for some given school system across many different times and places, it suggests that there is something truly systemic at work, and not simply accidents of circumstance – because the circumstances are different, but the results similar. The degree of confidence of such conclusions is proportional to the breadth of evidence across which the patterns are found – so the more evidence we look at, the more sure we can be.
Supply has always risen to meet demand in the private education sector, across nations, except to the extent it has been obstructed by government interference, such as the funding discrimination that exists in most nations, or the regulations imposed on private schools that stifle the specialization that contributes to their appeal. Sometimes it rises even despite these impediments, as in India and parts of Africa today.
This search for patterns across time and place has a name: “natural experimentation,” and it is used by researchers in fields from epidemiology to cosmology. It is also the methodology underpinning Jared Diamond’s fascinating analysis of the fates of human societies in his Pulitzer Prize-winning Guns, Germs, and Steel.
Ms. Mead, apparently unfamiliar with this analytic technique, is at a loss to understand why I have looked so far and wide to study market forces in education. Unable to discern that reason, she decides to impugn my integrity instead.
Mead characterizes me as a “disingenuous” ideologue who spends a lot of his “time trying to find examples that will support his ideological support for vouchers.” I, she claims, am “much more interested in expanding choice” for its own sake, whereas she, she tells us, is “much more focused on expanding the supply of high-quality schools serving poor kids.”
The truth, as I explained above, is more prosaic: I have studied the evidence of market versus bureaucratic school systems, serving children at all income levels, wherever it is to be found. Far from avoiding the study of conflicting evidence, I have sought it out, in both my historical work and my review of the modern international research. But Ms. Mead wouldn’t know that, because she is, by her own admission, unfamiliar with my work.
To impugn a scholar’s professional integrity by claiming that they cherry pick their data, without actually being familiar with that person’s work, shows poor judgment and a lack of intellectual rigor. Poor kids – all kids – deserve better from the education policy community.
Even though several nations are opposed, the European Commission plans to harmonize the definition of taxable income for corporations. It is true that the current system is a hassle for multinational companies, requiring 27 different tax returns for firms operating in all EU nations. But there are good ways and bad ways to address this problem. Allowing firms the option of choosing the “common” tax base would ensure that the bureaucrats in Brussels had less of an incentive to use the new system as a way of extorting more money from businesses. Another option would allow firms to use their home country’s definition of taxable income – an approach that would promote rather than retard tax competiiton since governments would have an incentive to attract companies by using a pro-growth definition of taxable income. Needless to say, the European Commission is not using either of these approaches. The EU Observer reports:
The European Commission is set to press ahead with introducing a single EU company tax base by 2010 in only a limited number of member states, circumventing national veto power in the sensitive tax area. … EU member states are deeply divided over possible harmonization, with 12 capitals in favour, five to seven against and the rest remaining undecided. Britain, Ireland and the Baltic states fear that the next step for Brussels would be interference in the levels of their corporate taxes, an area where EU states compete with each other as well.
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