Cato Daily Dispatch for November 26, 2001
Terrorism Boosts Special Interest GroupsBanks, Feds Join Forces
Bush Pushes Stimulus Package
Terrorism Boosts Special Interest Groups
With the nation's fight against terrorism in full swing, lobbies as diverse as road-sign manufacturers, farmers, the high-tech industry, energy producers and other businesses are promoting pre-Sept. 11 proposals as key to national security, the Associated Press reports.
"You have to get the attention of lawmakers to get something done, and right now their attention is focused on terrorism and national security," said Jim Albertine, president of the American League of Lobbyists. Lobbyists "have been very imaginative in their use of the events of 9-11 to advance their particular projects and their particular lobby goals," he said.
Among the examples of post-Sept. 11 lobbying:
-The American Farm Bureau Federation is arguing that federal subsidies for farmers are crucial for a sufficient national food supply.
-Ethanol producers want the government to require ethanol in gasoline, contending it would make the United States less reliant on Middle East fuel sources.
In "Against Politics As Usual," Cato scholar John Samples warns against special interest politics in the wake of the terrorist attacks. "As the aftershocks of September 11 spread through the economy - which may have been headed for a recession prior to the attacks - we should expect that other claimants to public largesse will show up on Capitol Hill. Some, like the airlines, may be partially justified. Most will not. More than a few interest groups may conclude that the attacks have created an opportunity to win special favors. If they succeed, others will follow, a remorseless logic that creates a stampede."
Banks, Feds Join Forces
According to the Wall Street Journal, the nation's largest financial firms and federal law-enforcement agencies are considering an information-sharing agreement that could give authorities unprecedented ability to track terrorists using the U.S. financial system.
The New York Clearing House, set up to facilitate payments between banks, is spearheading the talks, which include officials from several large banks such as J.P. Morgan Chase & Co. and Citigroup Inc., as well as the Federal Bureau of Investigation and the Treasury Department. Initially, the agreement is expected to apply to banks, but over time likely would extend to brokerage houses, mortgage lenders, insurance firms and wire-transfer companies.
"Law-enforcement and Justice Department officials have names of either suspects or actual participants in terrorist activities and they want to be able to run those against the databases of financial institutions to see if any of the names are doing business there," New York Clearing House President Jeffrey Neubert said. "And they'd like to do it in real time with a daily download." Consumer advocates were quick to complain about the ease of access the proposed agreement would give the government. Beyond the general issue of customer privacy, they questioned how information about innocent people with the same name as a suspected terrorist will be treated by authorities.
In "Privacy Punished, Not Terrorism," Cato policy analyst Veronique de Rugy examines existing money-laundering laws and says the reality is that they don't seem to work. "Financial transactions and bank accounts in the United States have been monitored for some time now. Unfortunately, this monitoring didn't detect the nine SunTrust accounts used in Florida by the terrorists involved in the attack of the World Trade Center. Indeed, French laws monitoring bank accounts and illegal activities don't stop Algerian terrorists living in France from regularly murdering people by placing bombs in subways."
Bush Pushes Stimulus Package
President Bush said the recession officially declared Monday should act as a clarion call for Congress to quickly approve an economic stimulus plan, the Associated Press reports. ( http://dailynews.yahoo.com/h/ap/20011126/us/attacks_economy_3.html )
"I am obviously aware our economy is slow. We will do everything we can to enhance recovery," Bush told reporters during an appearance in the Rose Garden with two aid workers newly released from Afghanistan. He spoke shortly after the National Bureau of Economic Research announced that the United States entered a recession in March.
The president said he was aware of the economic problems almost as soon as he took office, and that's why he advocated the tax cuts approved earlier this year. His spokesman, Ari Fleischer, contended that without those cuts, "The recession would be deeper, the recession would probably be longer."
In "Three Cheers for Three Corporate Tax Breaks," director of fiscal policy studies Chris Edwards examines some of the provisions of the economic stimulus package, including reductions in the corporate income tax, repeal of the Alternative Minimum Tax, and reform of depreciation rules. "No one can guarantee that these tax proposals, or other stimulus ideas, will quickly boost the economy out of recession," he argues. "But these reforms are needed anyway, and they certainly will add to economic growth in the long run. So reporters and pundits should look beyond the superficial fact that these provisions are supported by flocks of corporate lobbyists. In this case, what is good for corporate America is good for the U.S. economy."
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