Teachers Union Calls For Divestment From Education Reform Supporters

By
Jason Bedrick

Last week, the American Federation of Teachers released a blacklist of financial asset managers that fund organizations supporting education reform and/or switching from defined-benefit to defined-contribution pension systems, such as StudentsFirst, the Show-Me Institute and the Manhattan Institute. The report urges AFT affiliates to pressure pension fiduciaries not to invest their money with such asset managers. The AFT also makes a not-so-subtle threat to go after the donors to other think tanks and education reform groups:

This report is not intended as a one-time publication. Future versions will incorporate additional political organizations and their donors. The AFT is committed to shining a bright light on organizations that harm public sector workers, especially when those organizations are financed by individuals who earn their money from the deferred wages of our teachers.

This isn’t the first time the AFT has employed strong-arm tactics, but I find it hard to muster any outrage. As this report makes clear, the AFT’s mission is not about providing the best education for children, it’s about protecting the jobs of its members. It makes perfect sense that they wouldn’t want their money going to organizations that they perceive as working against their interests (whether that perception is accurate or not). If they would rather have lower returns on their investments, that’s their prerogative.

That said, if the AFT is going to be consistent and principled, they should support public-sector “right to work” legislation so that no one who wants to teach in public schools is forced to join a union and have their mandatory dues go toward a cause that they oppose. Moreover, the unions should end the practice of having state and local governments collect dues for them, essentially using state power and tax dollars to fund causes that some taxpayers, parents, and even teachers perceive as against their interests.

Of course, they’ll never do that. Without the use of coercion, the entire machine would fall apart.

Topics: 
Education and Child Policy

Rubio Blames GOP for Government Dependency

By
Tad DeHaven

According to The Hill, Sen. Marco Rubio (R-FL) told Rush Limbaugh that the Republican Party is “primarily” to blame for the growth in government dependency: 

“I’d say that’s a growing problem in America in general,” Rubio said. “I think we have a growing problem in this country that too many people have forgotten what the true sense of prosperity is … and let me tell you who I blame for that first and foremost. I blame that primarily, quite frankly, on decisions made by the Republican Party in the past to embrace crony capitalism and corporate welfare as conservatism, when, in fact, that’s not what we’re about.”

That’s a pretty serious charge. Although I think both parties deserve equal blame (food stamps are an example), I give Rubio credit for not going along with the standard Republican delusion that Obama lit the torch of government dependency. The current occupant of the White House had it passed to him, and Rubio appears to acknowledge that reality: 

“I also think that while we’ve had multiple candidates in the past that have campaigned as limited-government conservatives … until it’s their government program that they’re trying to protect, or what have you,” he said. “So I don’t think necessarily Republicans have always governed as the limited-government movement and the result is you see this kind of confusion in the American electorate about what the source of prosperity is.”

Yep, Republicans talk a good game about limited government but talk is about as far as it goes.

There’s just one problem with Rubio criticizing Republicans who “have campaigned as limited-government conservatives…until it’s their government program that they’re trying to protect.” When it came time to vote to phase out the federal government’s Soviet-style system of subsidies and supports for sugar producers, Rubio sided with his state’s notorious sugar interests.   

Topics: 
Tax and Budget Policy

Why Art Laffer’s Unfortunate Endorsement of a State Sales Tax Cartel Is Misguided

By
Daniel J. Mitchell

Art Laffer has a guaranteed spot in the liberty hall of fame because he popularized the common-sense notion that you can’t make any assumptions about tax rates and tax revenue without also figuring out what happens to taxable income.

Lot’s of people on the left try to denigrate the “Laffer Curve,” but it’s worth noting that even left-wing economists now admit that you don’t maximize revenue with a 100 percent tax rate.*

Indeed, I think the only people who now cling to that absurd view are the bureaucrats at the Joint Committee on Taxation.

But this post isn’t about the Laffer Curve. It’s about a disappointing column that Art Laffer wrote last week in the Wall Street Journal.

The issue is whether states should have the power to impose taxes on sales that take place outside their borders. Art starts the column with a very good point about the link between growth and living standards.

After enjoying an average growth rate above 3.5% per year between 1960 and 1999, Americans have had to make do with less than one-half that pace since 2000. The consequences are already dramatic and will become even more so over time. Overall we are 20% poorer today than we would be had the pre-2000 growth rate persisted.

Read the rest of this post »

Topics: 
Tax and Budget Policy, Telecom, Internet & Information Policy

“Good Thing This Is Canada!”

By
Walter Olson

The makers of a Canadian take-out coffee cup have a bit of fun at the expense of a certain country immediately to their south: 

If this was another country, we’d have to tell you that this coffee may be hot. Good thing this is Canada!

For more on hot coffee spills and warnings, see Overlawyered’s hot coffee tag. For more on the famous McDonald’s case and its long afterlife as a chestnut of online comments sections, see Ted Frank’s mythbusting post and “Law of McDonald’s” lecture; product liability site Abnormal Use’s FAQ on the case;  and Glenn Garvin (quoted) on one propagandistic film.

 

Topics: 
Law and Civil Liberties

American Sugar Alliance Looks Brazilian Gift Horse in the Mouth

By
Sallie James

The American Sugar Alliance, the main lobby group for American sugar growers, released a report last week alleging that the subsidies given to Brazilian sugar growers are depressing the world price of sugar perhaps by 25 to 30 percent. But instead of thanking the Brazilian taxpayers for their gift of cheap sugar, apparently the ASA are suggesting that U.S. trade negotiators “add it to their agenda”, implying that they should challenge the subsidies using the World Trade Organization’s dispute settlement mechanism. From Inside U.S. Trade [$]:  

The American Sugar Alliance (ASA) this week released a report estimating that Brazil subsidizes its sugar industry so grossly that it may be depressing the world price for the commodity by as much as 25 to 30 percent. ASA is hoping the report will give further ammunition to its claim that eliminating the U.S. sugar program would be devastating to U.S. producers, even as sweetener users continue a fight to unravel the program through a variety of avenues. The report, authored by sugar and ethanol industry analyst Patrick Chatenay, estimates that Brazilian sugar producers benefit from as much as $2.5 billion in direct and indirect subsidies annually. Factored into that number are benefits accruing to the industry from the “economies-of-scale” for sugar production, which are driven by the heavily subsidized ethanol sector, the report argues. Jack Roney, ASA’s director of economics and policy analysis, said in a conference call with reporters that the $2.5 billion annual estimate may even be conservative. “This report underscores the importance of maintaining the current U.S. sugar policy, which was designed to fleece consumers and deny them access to cheap sugar shield consumers from foreign market manipulation and ensure an continuous flow of rents to sugar producers affordable, homegrown supply of a food staple,” he said. [Emphasis and snarky commentary added.]

I mean, really. This is getting awfully tiresome. The sugar lobby for years have been complaining that we need the sugar program, which keeps prices high for producers by keeping imports strictly controlled, in order to enable “reliable” (i.e., managed) access to sugar. Now they think sugar is too available (i.e., cheap)? For sure, if I was a Brazilian taxpayer, I would baulk at the thought of subsidising (if that in fact is the situation) the sugar addictions of my richer neighbours to my north, but as a consumer? Muito obrigado! The sugar lobby’s talking points are getting ever more creative. But none of them are valid. 

Topics: 
Tax and Budget Policy, Trade and Immigration

On the Capture of Tsarnaev

By
Tim Lynch

Over at the Guardian, Glenn Greenwald reacts to Senator Lindsay Graham’s call to keep Tsarnaev out of the criminal justice system and treat him as an “enemy combatant”:

It is bizarre indeed to watch Democrats act as though Graham’s theories are exotic or repellent. This is, after all, the same faction that insists that Obama has the power to target even US citizens for execution without charges, lawyers, or any due process, on the ground that anyone the president accuses of Terrorism forfeits those rights. The only way one can believe this is by embracing the same theory that Lindsey Graham is espousing: namely, that accused Terrorists are enemy combatants, not criminals, and thus entitled to no due process and other guarantees in the Bill of Rights. Once you adopt this “entire-globe-is-a-battlefield” war paradigm - as supporters of Obama’s assassination powers must do and have explicitly done - then it’s impossible to scorn Graham’s views about what should be done with Tsarnaev. Indeed, one is necessarily endorsing the theory in which Graham’s beliefs are grounded.

It’s certainly possible to object to Graham’s arguments on pragmatic grounds, by advocating that Tsarnaev should be eventually Mirandized and tried in a federal court because it will be more beneficial to the government if that is done. But for anyone who supports the general Obama “war on terror” approach or specifically his claimed power to target even US citizens for execution without charges, it’s impossible to object to Graham’s arguments on principled or theoretical grounds. Once you endorse the “whole-globe-is-a-battlefield” theory, then there’s no principled way to exclude US soil. If (as supporters of Obama’s terrorism policies must argue), the “battlefield” is anywhere an accused terrorist is found and they can be detained or killed without charges, then that necessarily includes terrorists on US soil (or, as Graham put it, using one of the creepiest slogans imaginable: “the homeland is the battlefield”)….

[I]t is worth noting that the US government previously did exactly what [Graham] advocated. In 2002, US citizen Jose Padilla was arrested on terrorism charges on US soil (at Chicago’s O’Hare International Airport), and shortly before he was to be tried, the Bush administration declared him to be an “enemy combatant”, transferred him to a military brig, and then imprisoned him (and tortured him) for the next 3 1/2 years without charges, a lawyer, or any contact with the outside world. That was the incident that most propelled me to start political writing, but it barely registered as a political controversy.

So as extremist as Graham’s tweets may have seemed to some, it was already done in the US with little backlash. That demonstrates how easily and insidiously extremist rights assaults become normalized if they are not vehemently resisted in the first instance, regardless of one’s views of the individual target.

Let’s recall that the police did not bypass the Bill of Rights with Oklahoma City bomber, Timothy McVeigh.  Before his execution, McVeigh got a lawyer, trial, and an appeal.  That’s our law–and there’s no fiddling with it.  And experience tells us there are very good reasons for placing limits on police questioning.  For related Cato work, go here and here.

Topics: 
Law and Civil Liberties

Unexpected Praise for Australia’s Private Social Security System

By
Daniel J. Mitchell

As part of my “Question of the Week” series, I said that Australia probably would be the best option if the United States suffered some sort of Greek-style fiscal meltdown that led to a societal collapse.*

One reason I’m so bullish on Australia is that the nation has a privatized Social Security system called “Superannuation,” with workers setting aside 9 percent of their income in personal retirement accounts (rising to 12 percent by 2020).

Established almost 30 years ago, and made virtually universal about 20 years ago, this system is far superior to the actuarially bankrupt Social Security system in the United States.

Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security.

To be blunt, the Aussies are kicking our butts. Their system gets stronger every day and our system generates more red ink every day.

And their system is earning praise from unexpected places. The Center for Retirement Research at Boston College, led by a former Clinton Administration official, is not a bastion of laissez-faire thinking. So it’s noteworthy when it publishes a study praising Superannuation.

Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government.

Since I wrote my dissertation on Australia’s system, I can say with confidence that the author is not exaggerating. It’s a very good role model, for reasons I’ve previously discussed.

Here’s more from the Boston College study.

The program requires employers to contribute 9 percent of earnings, rising to 12 percent by 2020, to a tax-advantaged retirement plan for each employee age 18 to 70 who earns more than a specified minimum amount. …Over 90 percent of employed Australians have savings in a Superannuation account, and the total assets in these accounts now exceed Australia’s Gross Domestic Product. …Australia has been extremely effective in achieving key goals of any retirement income system. …Its Superannuation Guarantee program has generated high and rising levels of saving by essentially the entire active workforce.

The study does include some criticisms, some of which are warranted. The system can be gamed by those who want to take advantage of the safety net retirement system maintained by the government.

Australia’s means-tested Age Pension creates incentives to reduce one’s “means” in order to collect a higher means-tested benefit. This can be done by spending down one’s savings and/or investing these savings in assets excluded from the Age Pension means test. What makes this situation especially problematic is that workers can currently access their Superannuation savings at age 55, ten years before becoming eligible for Age Pension benefits at 65. This ability creates an incentive to retire early, live on these savings until eligible for an Age Pension, and collect a higher benefit, sometimes referred to as “double dipping.”

Though I admit dealing with this issue may require a bit of paternalism. Should individuals be forced to turn their retirement accounts into an income stream (called annuitization) once they reach retirement age?

Read the rest of this post »

Topics: 
General, Government and Politics, International Economics and Development, Social Security, Tax and Budget Policy

Pages