Politicians Befriend Big Business, Undermine Free Market

The recent primary defeat of House Majority Leader Eric Cantor was one of the bigger shocks to American politics in some time. Congressional leaders, known to bring home the bacon for local folks, usually are handily reelected.

But Cantor’s loss will do more than simply reshuffle the biggest offices on Capitol Hill. He gave lip service to fiscal responsibility but was, argued Nick Gillespie of Reason, “atrocious and hypocritical in all the ways that a Republican can be,” constantly voting to grow government.

Indeed, Cantor’s constituency was as much corporate America as it was Virginia voters. Business was counting on him to help reauthorize the Export-Import Bank, known as “Boeing’s Bank” for lavishing extensive benefits on one company; extend terrorism risk insurance, which transfers financial liability for loss from firms to taxpayers; and preserve Fannie Mae and Freddie Mac, which nearly wrecked the economy while subsidizing homeowners, builders, and lenders. 

Hold Pakistan Accountable For Blasphemous Oppression

In a world aflame, religious minorities are among those who suffer most.  Pakistan is notable for its failure to protect religious liberty, the most basic right of conscience.

The State Department recently reported on Pakistan that “The constitution and other laws and policies officially restrict religious freedom and, in practice, the government enforced many of these restrictions.  The government’s respect for and protection of the right to religious freedom continued to be poor.”

Minority faiths frequently face violent attack.  Although Islamabad does not launch these assaults, it does little to prevent or redress them.  This failure, the State Department explained, “allowed the climate of impunity to continue.”

The most common tool of persecution may be the charge of blasphemy which, explained the U.S. Commission on International Religious Freedom, is used to “target members of religious minority communities and dissenting Muslims and frequently result in imprisonment.”  The blasphemy laws are made for abuse:  “The so-called crime carries the death penalty or life in prison, does not require proof of intent or evidence to be presented after allegations are made, and does not include penalties for false allegations.”

With evidence unnecessary, the charge is routinely used in personal and business disputes.  Penalties are not limited to the law.  Since 1990, at least 52 people charged with blasphemy have been killed before reaching trial.

CBO Long-Term Spending Projections

The Congressional Budget Office has released new long-term projections of federal spending and debt. Without reforms, spending is expected to rise steadily and dangerously as a share of the economy in coming decades. The chart below shows spending under CBO’s “extended alternative” scenario, which assumes that politicians keep current policies in place. Spending would rise from 17.6 percent of GDP in 2000, to 20.4 percent this year, to 31.8 percent by 2040.

Under that scenario, federal debt held by the public would rise from 74 percent of GDP this year to a giant 170 percent by 2040. But if spending and debt were to rise along that trajectory, we would surely have a major financial and economic meltdown long before we got to 2040.

Our fiscal outlook is actually much worse than reflected in this scenario. That’s because under the basic extended alternative, CBO does not take into account the negative effects of rising spending and debt on GDP over the long term. CBO does have a special chapter in their report looking at some of these negative effects—but only some of them. In this testimony, I mention reasons why the outlook is worse than under the CBO baseline.

    

Bulgaria Wins Balkan Prize

Every country aims to lower inflation, unemployment, and lending rates, while increasing gross domestic product (GDP) per capita. Through a simple sum of the former three rates, minus year-on-year per capita GDP growth, I constructed a misery index that comprehensively ranks 89 countries based on misery. The table below is a sub-ranking of all Balkan states presented in the full index.

 

All of the Balkan states in my index suffer from high unemployment and relatively high levels of misery.

That said, the least miserable Balkan country is Bulgaria. For all of its problems, including a recent bank run, the country’s currency board system - which I, as President Stoyanov’s adviser, helped design and install in 1997 - provides monetary and fiscal discipline, and produces positive results in a region plagued with problems. 

Should Boehner Sue Obama?

Well into our sixth year with this president, we’re long past the point of having to demonstrate his indifference to the rule of law—the unconstitutional appointments, the Obamacare rewrites, the IRS and VA scandals, the list goes on.  In fact, it’s Obama’s indifference simply to doing his job that lately has drawn attention. “The bear is loose”—on the golf course, in the pool hall, dining late with athletes and entertainers. It’s driven House Republicans to talk of impeachment and of a House suit against him for his failure to faithfully execute the laws.

Both would be a mistake, Thomas Sowell tells us this morning, and he’s right. As November’s mid-term elections loom just ahead, either course would shift public attention from Obama to his critics, just as happened when the House impeached President Clinton. Not that there isn’t a case to be made for both impeachment and a suit. But impeachment, at the end of the day, is less a legal than a political matter, as we saw in the Clinton episode. So too is the suit that Speaker Boehner is now considering. Both proposals, therefore, have to be looked at through that lens.

To a good many in the House, however, a suit against the president seems like the lesser but wiser course. And contrary to first impressions, including my own, such a move is not as far-fetched as it might seem. In fact, if one takes the time to wade through the dense testimony that our good friend Elizabeth Price Foley presented to the House Judiciary Committee last February, it soon becomes clear that the standing objection that arises immediately with such a suit could likely be overcome in this case.

But even if a suit could get off the ground, would one be wise? True, unlike with impeachment, where the House is the “grand jury” and the Senate the “court,” in this case it wouldn’t be the other political branch attacking the president. Rather, attention would be directed to the third, non-political branch of government, where the action would be happening, and that would soften the attack to some extent, making it seem less a political than a legal charge. But those are subtleties. In the hands of the media, they’d likely pass over most heads as we move toward November.

And what turns on November? Nothing less than the courts themselves, as Sowell points out. To elaborate just a bit on the point, after November, Obama will have two more years in office. He got off to a slow start exercising the most long-lasting of a president’s powers, the power to nominate judges for lifetime appointments on our federal courts. But he’s catching up. We saw just last month how his two Supreme Court appointments have read the Constitution on some of the most important cases of the Court’s just-concluded term.

Well it’s no different below, especially in the courts of appeal, except that it’s less noticed. We tend to focus on the Supreme Court, which blinds us too often to the fact that the Court decides only 70 or so cases a year while the 13 federal appellate courts terminate some 60,000 cases—and they don’t always follow the guidance of the Supreme Court in doing so. It’s crucial, therefore, given the inclination of this president to see his view of the Constitution reflected in the people he nominates for seats on those courts, to have a Senate over the next two years that will carry out its advice and consent responsibilities more responsibly than has been done under the leadership of Harry Reid. Anything that distracts from that focus should be avoided.   

How to Lie with Statistics: Florida School Spending Edition

Activists in Florida found a way to torture the state’s education spending data to make appear as though Florida is 50th in education spending. The only catch is that their rather unconventional method ranks Washington D.C. as 51st, despite the fact that D.C. spends nearly $30,000 per pupil, putting it in first place for spending per pupil according to the U.S. Census Bureau (page 11, table 11). 

How did they accomplish this literally unbelievable statistical feat? As Patrick Gibbons explains at RedefinED, the activists have inappropriately seized on the U.S. Census Bureau’s “education revenues per $1,000 of personal income” figure. Holding all else constant, Florida could improve its ranking using that figure either by spending more on education or by its citizens becoming poorer. Gibbons crunched the numbers to see what it would take to put Florida in 24th place, just above the median, without increasing spending:

To reach the “above average” point on the spending-per-income statistic, Florida would need education revenues of $49.15 per $1,000 of personal income. Without spending a dime more, or less, on education, Florida could boost its ranking to 24th in the nation if its collective income simply shrank by 26 percent.

Florida would become THE POOREST state in the U.S., but we would have above-average education spending – at least according to this misleading metric. Something tells me nobody will be happy with those results.

Embedded in the activists’ use of this figure is the odd notion that it costs more to educate students from wealthier states than students from poorer states. Indeed, if every state had exactly the same “education revenues per $1,000 of personal income” then rich states would far outspend poor states, yet I suspect that the activists citing this figure would not be pleased.

Nicaraguan Unaccompanied Child Migrants - Where Are They?

U.S. policy is equally generous to unaccompanied children (UAC) from El Salvador, Guatemala, Honduras, and Nicaragua – but today’s child migrants are not coming from Nicaragua.  Explaining why Nicaraguan UAC are not part of the recent surge may help explain why so many are coming from El Salvador, Guatemala, and Honduras - the so-called Northern Triangle. 

Nicaragua has low rates of violent crime, gang membership, and fewer family connections to the United States than the Northern Triangle.  If U.S. policy was the main reason why there is a sudden surge of UAC, it should also pull UAC from Nicaragua.  This suggests that other factors like the high levels of violence and strong family connections are the main reasons why UAC from the Northern Triangle are coming and why Nicaraguan UAC are absent.        

Nicaragua has a much lower homicide rate than El Salvador, Honduras, and Guatemala.  According to the United Nations, there has been a dramatic increase in murder rates across Central America since 2006 – except in Nicaragua.    

 

Source: United Nations Office on Drugs and Crime https://www.unodc.org/gsh/en/data.htm.