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Cato Daily Dispatch for July 30, 2003

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It's Really Time for Poindexter to Go
North Korea Rethinking its Nuclear Plans
California Assembly, At Last, Passes Budget

It's Really Time for Poindexter to Go

An editorial in today's Boston Globe argues that the Defense Department should dismiss retired Adm. John Poindexter, head of the Pentagon's Terrorist Information Awareness (TIA) program and supervisor of the Pentagon's short-lived Policy Analysis Market scheme, which would have been a government-funded terrorist futures market.

"The Defense Department should sever its ties with Poindexter before he can humiliate Americans again," reads the editorial. "Indeed, President Bush should have dismissed him last year and owes the nation an explanation of how his administration nearly implemented such a bizarre proposal. This distortion of a fashionable faith in pure market forces betrays a radical detachment from reality."

Writing about the TIA program in "The Poindexter Awareness Office: Turning the Tables on Mr. Supersnoop," Clyde Wayne Crews Jr., director of technology policy, says:

"Ironically, TIA can undermine society's goals, not merely of privacy enhancement, but of protection from terrorism itself. True, there are lots of private databases on us. But it's appropriate for them to remain separate, not be combined in TIA, since separateness can have security advantages in its own right. TIA can further undermine national security by creating a tempting target database for hackers. And to the extent that TIA results in information overload, diversion and wasted effort, it almost goes without saying how costly it could be for America."

North Korea Rethinking its Nuclear Plans

"Top U.S. arms negotiator John Bolton told South Korea today North Korea was probably thinking carefully about restarting talks on its atomic ambitions and he was not unduly pessimistic, a South Korean official said," according to Reuters.

"The Foreign Ministry official told Reuters that Bolton's talks with South Korean Foreign Minister Yoon Young-kwan were mostly about fathoming why North Korea had yet to respond to an offer of two-phase multilateral talks."

In "All the Players at the Table: A Multilateral Solution to the North Korean Nuclear Crisis," Cato Senior Fellow Doug Bandow writes: "Washington's dominant role in Northeast Asia was unnecessary when the North's threats were limited to conventional forces. That entanglement will be equally unnecessary--but far more dangerous--if North Korea becomes a nuclear power. . . . Multilateral negotiations and pressure from the four regional powers--China, Japan, Russia, and South Korea--offer the best hope of forestalling North Korean production and sale of nuclear weapons."

California Assembly, At Last, Passes Budget

"Grumpy and bleary-eyed from a night spent locked in their chambers, members of the California Assembly grudgingly threw their support yesterday behind a nearly $100-billion budget deal, in effect ending one of the bleakest political and fiscal chapters in state history," reports the Los Angeles Times.

"The final document includes neither the new taxes nor the deep reductions in government services that fiscal analysts had recommended to get the state back on solid financial footing and out from under its projected $38.2-billion shortfall. Instead it uses extensive borrowing as a political crutch, allowing the state to limp forward but saddling it with a deficit of at least $7.9 billion next year."

In "State Fiscal Fictions," Cato Director of Fiscal Policy Chris Edwards advocates state spending caps to control budgets and avoid problems like California's. He writes: "To avoid budget crunches during slowdowns, states should limit spending growth during booms, sort of like setting a lower highway speed limit. States can do this with a budget cap like Colorado's, which provides automatic refunds when state revenues grow faster than inflation plus population growth. Such a cap prevents governments from starting too many new spending programs in good times, thus making it easier to balance their budgets during the next downturn."

Jonathan Block, editor, jblock@cato.org