Cato Daily Dispatch for November 8, 2005
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Penalizing ProfiteeringCIA Not Exempt from Law
Budget Cuts Get Push-Back from Both Sides
Penalizing Profiteering
"With voters fuming about high fuel prices, two Senate committees want answers from oil company executives about why they are ringing up record profits," the Washington Post reports. "Senior officials from ExxonMobil Corp., Chevron Corp., ConocoPhillips, BP America and Shell Oil Co. are to appear [Wednesday] before a joint hearing of the Energy and Commerce committees, to try to deflect a push by Republicans as well as Democrats for anti-price-gouging legislation, including a windfall profits tax."
In a working paper, "Economic Amnesia: The Case against Oil Price Controls and Windfall Profit Taxes," Cato senior fellows Jerry Taylor and Peter Van Doren demonstrate that government intervention would likely create fuel shortages and reduce investment in new gas supplies. They argue that prices are established by the interplay of supply and demand and that competition ensures consumers face the lowest possible prices. Today's relatively high prices will do more to encourage conservation and new supply than any combination of federal policies.
In "Gouge On," Taylor writes: "'[P]rofiteering' strikes most of us as unsavory. But it depends on the context. After all, were we serious about criminalizing price gouging, we would throw every member of the National Association of Realtors behind bars."
CIA Not Exempt from Law
"U.S. interrogation practices have been under fire since news accounts in 2004 reported harsh tactics by U.S. interrogators at Abu Ghraib prison in Iraq, Guantanamo Bay in Cuba and at detention facilities in Afghanistan. In a new case Monday, five Army Rangers were charged with abusing detainees in Iraq," USA Today reports. "Over White House opposition, the Senate voted 90-9 last month to approve an amendment by Sen. John McCain, (R-AZ)., that would ban the use of torture. Vice President Cheney has pushed for an exemption for the CIA. The administration has said in a statement that while it does not condone torture, it opposes the measure because it would be 'unnecessary or duplicative' and could restrict 'the president's ability to conduct the war (on terrorism) effectively under existing law.'"
Timothy Lynch, director of the Cato Institute's Project on Criminal Justice, comments: "During wartime, the president does get some leeway with respect to how the war must be conducted and how the country is to be defended. Mr. Bush's policies stir controversy because he not only demands leeway, he demands a blank check to do just about whatever he wants. In the immediate aftermath of 9/11, the public and Congress mostly went along. What changed? A combination of things -- Abu Ghraib scandal, disillusionment over the Iraq war, revelations about the government's incompetence in the months leading up to the 9/11 attacks, and other events. With respect to reports of CIA camps, it seems there is little doubt of their existence. Not even Congress knows the scale, because of secrecy. The CIA should not be exempt from American law. What would be the purpose of saying 'America does not torture its prisoners -- except for the CIA'? A policy against torture needs to restrict everyone. The president is entitled to some leeway during wartime, but he must still abide our laws, including the Bill of Rights. Those safeguards were written down for a reason -- so that they would not be brushed aside during a war or other crisis."
Budget Cuts Get Push-Back from Both Sides
"A full-court press by liberal activists, coupled with conflicting regional interests, is threatening to sink a far-reaching Republican budget bill in the House that was designed to slice $54 billion in federal spending over the next five years," the Washington Post reports.
In "Congress Should Make Some Sacrifices, Too," Stephen Slivinski, director of budget studies at the Cato Institute, writes: "Finding offsetting budget cuts to pay for disaster relief is obviously not impossible, nor is it unheard of. Relief bills for the 1994 California earthquake and the Oklahoma City bombing were all paid for by offsetting spending cuts.
"There's no reason why money spent on natural disaster relief should not compete with spending in other areas of government. If spending this money is truly necessary than other less essential programs in the budget then those less essential programs should be pared back to make room for it."
Kristen Kestner, editor, kkestner@cato.org
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