Dr. Krugman Meets Dr. Fox

Dr. Paul Krugman, the hyper-productive New York Times columnist and Nobel laureate, has produced a flood of fiscal factoids. He argues that the only way to put the major economies around the world back on track is to “stimulate” them via deficit-financed government spending.

Most recently, Dr. Krugman has weighed in repeatedly on Greece’s travails with his fiscalist snake oil. His column of January 26th, “Ending Greece’s Nightmare,” makes it clear that he thinks he can deliver an elixir.

Not so fast Doctor. A mountain of evidence shows that the elixir is a fiscal factoid. Never mind.

Injunction against Obama’s Immigration Action: Policy and Political Consequences

U.S. District Court Judge Andrew Hanen granted a preliminary injunction to block the implementation of President Obama’s executive actions on immigration – specifically the DAPA program and his expansion of DACA - until he decides on their legality.  Constitutional scholars are going to be writing about this for the near future (I recommend reading Josh Blackman’s comments here and our Cato brief here) and the appeals will come quickly.  In the midst of this lively debate, the political and policy consequences of Judge Hanen’s ruling should not be ignored. 

The political consequences could be immediate.  Speaker Boehner could use this moment of GOP “victory” to pass a clean DHS funding bill as he hides behind the preliminary injunction.  It could tone down the intensity of the political debate on Capitol Hill now that the courts will decide DACA/DAPA’s future.  The GOP does not have the votes to force the Democrats to accept defunding either of those programs.  This preliminary injunction allows Speaker Boehner to stop the DACA/DAPA defund fight while claiming some victory and avoiding the defeat he seems to be preparing for.  Now he can leave it to the courts with some confidence, more than he is likely to be feeling right in the DHS defunding fight, that they will rule in the GOP’s favor in a few weeks.  Regardless, this provides an opportunity for Boehner to skip the bruising DHS funding fight without suffering a political rout.

Federal Judge Stops Obama’s Executive Action on Immigration

Late last night, as the DC area braced for a snowstorm, a federal judge in Brownsville, Texas granted a temporary injunction to the executive action that President Obama announced in November. The expanded Deferred Action for Childhood Arrivals (DACA) was set to go into effect tomorrow, with the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) starting up in May, so a quick ruling was expected after Judge Andrew Hanen held a hearing last month. And based on how that hearing went, it’s no surprise that Texas and the 25 other states suing the federal government succeeded in stopping the executive action at least temporarily.

Is “Colorado’s Marijuana Money Going Up In Smoke?”

NPR has an interesting story about the interaction between Colorado’s tax revenue from legalized marijuana and its Taxpayer Bill of Rights (TABOR):

Colorado voters overwhelmingly supported state taxes on marijuana, and the state collected tens of millions of dollars in the first year of legalization. But in a strange twist, all those taxes raised from pot may have to be refunded because of a quirk in the state’s constitution. That means money earmarked for schools and drug prevention programs could be lost unless lawmakers agree on a solution.

Liberal supporters of legalization will worry that this conflict threatens to invalidate a key argument for legalization; conservative opponents will use the conflict to claim legalization was oversold.

But libertarian legalizers should not care much either way.  The crucial arguments for legalization are increased freedom for marijuana users and decreased prohibition costs for everyone, not increased tax revenue.

So if Coloradans end up with legal marijuana and an income tax refund, that’s just fine.

On Greece: Plus Ça Change, Plus C’est la Même Chose

People keep asking me what I think about Europe’s most recent crisis (read: Greece). Well, my sentiments are exactly the same as they were in April 2012, when my Globe Asia column was titled: “China and Greece – Here We Go Again.”

Here’s what I wrote on Greece: “And if you think the political chattering classes in the U.S. are dangerous, take a look at Europe, where the elites are fighting economic reality with all their might — a fight they will lose. Indeed, they have built an economic doomsday machine. And when it comes to Greece, don’t fool yourselves into believing that the recent huge debt restructuring exercise will allow Europe’s politicos to pull their chestnuts out of the fire. Greece’s annual broad money (M3) growth rate has been in negative territory for every month since February 2010, and it is currently contracting at a fantastic 17.5%. In the words of former President George W. Bush (not Yogi Berra): ‘This sucker is going down.’ You can forget all the calculations and soothing noises coming from Europe.”

Yes. Plus ça change, plus c’est la même chose.

Judges Say No To Obama Labor Regulators’ Hot Blueberry Crush

What does federal labor law have in common with civil forfeiture law? As I write at Reason:

Under a provision of the 1938 Fair Labor Standards Act, the U.S. Department of Labor can seek what is known as a “hot goods” order, freezing the physical output of an employer that it suspects of having violated wage and hour law, all without having to prove its case at a trial.

Until lately the procedure was little known to the general public, but the Obama administration, amid its general all-fronts offensive to expand wage and hour law and intensify its enforcement, has begun using it against farmers in a series of actions. Applied to agriculture, a “hot goods” order is even more than usually coercive, because both sides know the crop will rot if not brought to market soon. Moreover, as in many forfeiture cases, the freezing of a target’s most valuable asset may mean that it cannot afford legal help to appeal or otherwise challenge what has happened — all of which gives the federal government the leverage to get what it wants in resulting negotiations without having to test the strength of its case at trial.

Now, however, a federal judge has slapped down the administration hard in a Pacific Northwest case that farm groups had described as “extortion.” In a humiliating defeat, the Department of Labor has agreed to drop charges against two Oregon blueberry growers and refund the moneys extracted from them. It’s a case that should rally attention to the need to roll back the Department’s powers in this area.

My whole Reason piece is here.

Disappointed Broad Foundation Pauses its $1 Million Prize for Urban Schools. Foreseeable?

The Broad Foundation has decided to halt its 13-yr-old prize for academic improvement.The idea of the prize was that recognizing and celebrating top performance within our traditional district-based school system would lead to widespread emulation of the most successful practices. The proximate cause of the decision is reportedly the Foundation’s disappointment at the paucity of high performing districts. It may also have to do with the the fact that earlier prize-winners did not spark the mass replication of successful methods, as hoped.

While no doubt frustrating for the Foundation, it was neither unforeseeable nor unforseen. Two years before the Prize for Urban Districts was launched, I reviewed the Foundation’s programs and plans. Concerned, I addressed a letter to Mr. Broad, which I reproduce in its entirety below.

March 14, 2000

Dear Mr. Broad:

It was with great pleasure that I read your letter describing the creation of the Broad Foundation. Your organization’s dedication to encouraging exemplary educational leadership has the potential to do great things for our nation’s children.

Having also read the brief prospectus enclosed with your letter, I wonder if I might raise a question which I consider crucial to the Foundation’s success? It seems as though the Foundation will be promoting pockets of excellent leadership in urban districts around the country. My question is this: Does the Foundation have a plan for ensuring that these pockets of excellence will 1) consistently endure beyond the lifetime of the individuals involved, and 2) systematically expand to reach all students rather than remaining isolated?

Much of my research on educational governance has been historical, chronicling the relative merits of education systems from 500 BC to the present. One of my findings is that, while there have been few periods that lacked isolated pockets of excellence, these pockets very rarely lasted for more than a generation or two, and very rarely spread beyond a tiny fraction of the population.

There have been only a handful of exceptions to this sad historical record, such as classical Athens, the early medieval Islamic world, and early 19th century England and America. The difference between these remarkably successful periods and their less successful counterparts was that they enjoyed a mechanism that reliably perpetuated excellence over time, and relentlessly drove its spread to an ever wider group of children.

The specific nature of that mechanism is not the point of my letter. My point is to highlight the compelling need for some such mechanism given the patently transitory nature of nearly every education reform effort in the history of civilization. The goals of the Broad Foundation, which I share, are too important to be left to erode in the sands of time like the mighty works of Ozymandius, or to burn like a few solitary candles amidst a vast and lingering educational darkness.

There have been many foundations created for the improvement of education over the years. The ones that will be remembered will be those that understand excellence is not intrinsically self-perpetuating—that it only endures and thrives within systems whose incentive structures inexorably drive people to perpetuate it. I hope that your organization will be among this rare group of insightful foundations.

Please feel free to call or e-mail me if you would like to discuss this issue in detail.

Yours very truly,

Andrew J. Coulson