Archives: 10/2008

All Our Problems, in One, Easy Op-ed!

If you could endorse everything that’s killing our economy and inflating college costs in one op-ed, Michael Dannenberg of the New America Foundation has done it in this morning’s USA Today. Call for government-backed student loans to all comers, regardless of horrible credit history? Check! Trot out the old canard that penurious state higher ed spending drives tuition increases? Check! Demand deficit spending? Check! Declare that FDR ended the longest depression in American history with massive government outlays? Check!

Unfortunately, I am at a conference right now and can’t give this the full treatment it deserves, but just read the op-ed. Frankly, as we are now paying the stabbing price for years of too much easy, government-driven credit—not to mention massive deficit spending—the piece practically refutes itself.

Me, McCain, and a Skip Down Memory Lane

John McCain writing for the Op-Ed page of the New York Times: “Isn’t it more likely that antipathy toward the United States in the Islamic world might diminish amid the demonstrations of jubilant Iraqis celebrating the end of a regime that has few equals in its ruthlessness?”

Iraq is now the “cause celebre” for jihadists worldwide. But inside the Beltway that’s neither here nor there, since our “war on terror” discourse has morphed into praising the gains of the surge, regardless of how “fragile and reversible” those gains may have been. But discussions on Iraq should not be about “who was right about the surge,” because that argument is premised on the false belief that we attacked the correct country. The root of the problem is that politicians like Senator McCain use the surge to deflect attention from their own complicity in diverting America’s resources away from those who attacked us on 9/11 by invading a country that did not.

The Moral Case for Tax Havens

Last month, I narrated a video explaining the economic benefits of tax havens. Today, the highly-anticipated sequel (that may be a slight exaggeration) is available. The video below explains that there is a powerful moral case for these low-tax jurisdictions. As I note in the video, the financial privacy laws that make tax havens desirable to French entrepreneurs are the same laws that make these jurisdictions attractive to people who live in nations plagued by incompetent and/or venal governments. The mini-documentary also exposes some of the hypocritical and unseemly activities of international bureaucracies that are attacking tax havens.

For those who read the recent book that I co-authored with Chris Edwards, you already know that tax competition is a very important constraint on the ability of politicians to over-tax and over-spend. And as the first installment of this video series explained, tax havens are a critical component of tax competition. But the current video makes clear that economic growth is just one reason why these jurisdictions should be celebrated rather than persecuted.

Please feel free to share this new video with your friends and colleagues.

Criticisms Leveled against U.S. Approach to Counterterrorism

The New York Times reports this morning on criticisms leveled by two high-ranking U.K. counterterrorism officials against the United States’ current approach to counterterrorism.

It’s worth having the insights of people who have prosecuted suspects in all the major terrorist attacks in the U.K. since 2005, achieving a 90 percent conviction rate, so you should read the whole thing.

“You Must Fulfill Your Moral Obligation to Public Radio.”

That’s what a public radio personality told me this morning.  And he didn’t mean that you have a moral obligation to press Congress to defund public radio, so that you can reclaim your money and your dignity.  No, this public radio personality admonishes that if you listen to public radio, you have a moral obligation to give even more than that.

Just the latest outrage from a public-radio membership campaign.


Obama Tax Plan and IRS Data

Senator Obama wants to “restore fairness to our tax code” by raising taxes on those earning more than $250,000. Let’s look at the most recent IRS income tax data for 2006 to see what we can learn about tax fairness.

See line 42 in this IRS table, which shows data for those earning less than $200,000 (the closest income breakpoint). This group paid 9.7 percent of their adjusted gross income in federal income taxes.

Now scroll down to line 58 in the table. Those earning more than $200,000 paid 21.8 percent of their income in income tax, thus paying more than twice the tax rate of the other group.

Is that fair?

Ohio Schools Take a Page from Stalin’s Playbook

The commissar vanishes from Stalin photo

School districts in Ohio systematically exclude the test scores of certain students, with the effect of raising the districts’ overall averages. According to the Columbus Dispatch, districts drop from their test results students who move to other districts before the end of the year (but after they’ve taken the test). Since kids who move around tend to perform worse academically, this practice bumps up district averages and presumably helps them to avoid penalties imposed by the federal No Child Left Behind law. As in a retouched Stalin-era photograph, the offending low-scoring students are simply erased – appearing in no district’s test score average.

One of the key reasons that the free enterprise system works is that producers have incentives to find out what their customers want and to give it to them. Since the customers are spending their own money, they tend to be deeply interested in whether or not they’re getting what they’re paying for. All of this breaks down when the “customer” is a government agency spending other people’s money.

In the public school monopoly, state governments and the NCLB hold districts “accountable” for (manipulable) statistics. In competitive education markets, parents hold schools accountable for the success of their individual children. It’s pretty clear which approach better serves the interests of families.