October 2010

October 28, 2010 1:33PM

Local Knowledge and a Stake in the Outcome

European criticisms of U.S. airline security match those of many U.S. travelers, so the recent volley of complaints from the other side of the pond are unremarkable. The most interesting tidbit from this news story is that British pilots are part of the chorus.

There’s a chance that it was some organizational spokesperson whose interests diverge from the actual men and women who fly planes. But if you want to choose a group to trust on airline security, it’s the group with local knowledge and a genuine stake in the outcome. That’s not any security agency. That’s pilots.

October 28, 2010 1:13PM

How Long Can the Politics of Compromise Continue?

Today POLITICO Arena asks:

Are Mitch McConnell’s and John Boehner’s recent statements about not compromising a refreshing bit of candor from top political leaders, rather than the usual platitudes about bipartisanship and working across the aisle?

My response:

Mitch McConnell’s comment about making Obama “a one‐​term president” and John Boehner’s vow that Republicans will not “compromise on their principles” if they win the majority do indeed challenge “the usual platitudes about bipartisanship and working across the aisle.” But they also reflect a deeper problem that the midterm campaigns have begun to unmask, namely, that decades of compromises have brought us to a state where further compromise is no longer tenable. Look at France. Look at Greece. Look even at England.

I allude, of course, to the “entitlement” schemes that are sinking all western democracies — others more than ours. These are giant Ponzi schemes that would be criminal if undertaken by private parties, because like all such schemes, they’re unsustainable, with late entrants left holding the bag. But unlike their private counterparts, the public versions force us all to play. Yet as the day of reckoning approaches, government has only limited choices: either reduce the promised benefits, or pay for them by taxing or borrowing more or by selling government assets (e.g., western lands), each of which has inherent limits, or by printing money, which is another way of breaking promises — and it ends ultimately in a death spiral. That’s the hard reality. Government isn’t Santa Claus.

So when Obama governs as though he has no grasp of that reality, talk of a one‐​term presidency is simply coming to grips with reality. And if this election is any indication, Americans appear increasingly to appreciate that. To be sure, there are issues on which to compromise. But for far too long we’ve acted as if every issue were “political,” from retirement security to healthcare to so many other “problems” that in truth are simply the problems of life. Earlier generations solved those problems privately, either by themselves or in voluntary association with others. Indeed, the freedom to do so was what the Constitution was written to secure.

But Progressives disdained that kind of freedom as illusory. They wanted us to solve our problems collectively. The New Deal institutionalized that vision, of course, turning the Constitution on its head. Thus today’s progressives think that nearly every “problem” is a political problem, to be solved collectively — utterly ignoring the evidence of the ages about such collective undertakings. Sarkozy has prevailed for the moment in France, but strikes continue to cripple the economy, and the opposition has promised to make him pay in the next election. One can hope only that American voters will take a different course and that those they elect next Tuesday will have the wisdom to know when and when not to compromise, because this cannot go on forever.

October 28, 2010 1:11PM

NPR Story Was Hardly Biased, but the Headline?

Today’s NPR story, “Health Law Hardly At Fault For Rising Premiums,” was much fairer than its headline (and the sub‐​heads, if that’s what we call them). ObamaCare is “hardly at fault for rising premiums?” Really? The story quotes an insurance‐​industry flack who well establishes what the Obama administration’s own regulations confirm: ObamaCare will be a major driver of premium increases for some health plans. A sub‐​head calls such claims “misinformation.” Oh? The article does more to bolster those claims than the administration’s flack does to knock them down. A more accurate headline would have been, “Health Law at Fault for Rising Premiums? In Some Cases, Yes.”

One wonders whether, in some posh Versailles salon, there’s an editor who already knows what the headline should be — never mind what the article says.

October 28, 2010 1:10PM

Prop. 19 Roundup

Here’s some recent commentary on California’s Prop. 19 ballot initiative:

  • Today, New York Times columnist Nicholas Kristof makes the case against the war on cannabis. Although there is no mention of Cato, Kristoff mentions the work of our senior fellow, Jeff Miron, and links to our report on the Budgetary Impact of Ending Drug Prohibition. Kristoff also mentions Portugal’s drug decriminalization policies and links to a Time Magazine article that highlights the Cato report on that subject by Glenn Greenwald.
  • Nick Gillespie and Matt Welch make the case that Prop. 19 is the most important item before the voters in this election cycle. Even more important than whether Barbara Boxer can continue her work in the Senate? Yes, read the whole thing. Dan Mitchell has additional thoughts here.
  • George Soros is in the news for helping the Prop. 19 effort with a one million dollar contribution. He explained his reasons for supporting Prop. 19 in a Wall Street Journal op‐​ed.

For additional Cato scholarship on drug policy, go here.

October 28, 2010 11:59AM

The Student Aid Did It!

The College Board is out with its annual reports on college prices and student aid, and the story is pretty familiar. According to The New York Times, the reports reveal that over the last year tuition and fees rose 8 percent at public, four‐​year schools, and 4.5 percent at private non‐​profits. Meanwhile, student aid rose at a very fast clip. Indeed, over the last five years, despite lightning‐​quick growth in sticker prices, after‐​aid college costs actually dropped.

Now, don’t expect to hear this from the College Board or even mentioned in the Times, but doesn’t it seem at least plausible that giving more and more aid to students enables schools to raise prices? You know, that colleges might jack up tuition and fees knowing that government, largely, will ensure that students can cover them? It’s not only plausible, it’s almost certainly the case. But like I said, forget about ever reading that in The New York Times. Instead, we get this standard lament:

“The College Board figures are depressing and utterly predictable,” said Terry Hartle, senior vice president of the American Council on Education. “When states cut funding for higher education, tuitions go up to make up for the difference.”

Dealing with this one gets incredibly tiresome, and it should infuriate taxpayers who fund both massive student aid and subsidies to public colleges.

For one thing, of course, cuts in state subsidies don’t explain constantly increasing private school costs. Moreover, while no doubt public schools sometimes raise tuition to make up for state funding dips, they also raise it when state funding is going up. Indeed, as this chart from the State Higher Education Executive Officers illustrates, public schools raise prices no matter what is going on with state and local subsidies:

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How can schools get away with this? Because students are able to cover the incessantly rising prices. And how can students do that? By using more and more money that comes from someone else!

The data scream this reality so loudly even passed‐​out undergrads could hear it. So why does it get so little attention? In part, no doubt, because many in the media refuse to even consider that there could be a causal connection between ballooning aid and skyrocketing prices. Even worse, the people controlling the aid see votes, votes, votes from playing education Warbucks. And if, say, the President of the United States can buy votes with student aid, why would he ever admit that his “generosity” mainly just lets higher education bleed taxpayers dry? The unfortunate answer is, he wouldn’t.

October 28, 2010 11:08AM

Boehner Endorses More Medicare Spending: Meet the New Boss, Same as the Old Boss?

While flipping through the radio on my way to pick my son up from school yesterday afternoon, I was dumbfounded to hear Congressman John Boehner talk about repealing Obama’s Medicare cuts on Sean Hannity’s show.

I wasn’t shocked that Boehner was referring to non‐​existent cuts (Medicare spending is projected to jump from $519 billion in 2010 to $677 billion in 2015 according to the Congressional Budget Office). I’ve been dealing with Washington’s dishonest definition of “spending cuts” for decades, so I’m hardly fazed by that type of routine inaccuracy.

But I was amazed that the presumptive future Speaker of the House went on a supposedly conservative talk radio show and said that increasing Medicare spending would be on the agenda of a GOP‐​controlled Congress. (I wondered if I somehow misinterpreted what was being said, but David Frum heard the same thing)

To be fair, Boehner also said that he wanted to repeal ObamaCare, so it would be unfair to claim that the interview was all Bush‐​style, big‐​government conservatism. But it is not a positive sign that Boehner is talking about more spending before he’s even had a chance to pick out the drapes for his new office.

October 28, 2010 10:04AM

GOP: Cut Whaling History Subsidies, Save Nation

House Republican Whip Eric Cantor’s “YouCut” project has released a new video that attempts to visually underscore the impropriety of sticking future taxpayers with a mountain of federal debt.

The video begins with a voice saying “You wouldn’t do this to your child’s piggy bank” followed by visuals of a child’s piggy bank being smashed with a hammer. The voice then says:

But Democrat controlled Washington is leaving a $13 trillion debt for your children and future generations. It’s time Washington got its fiscal house in order. Start changing the culture of spending in Washington by voting on YouCut today.

That’s a wee bit disingenuous considering that Republicans and Democrats alike are responsible for the massive federal debt.

More frustrating is the fact that the GOP leadership rhetoric of grave concern is completely at odds with the party’s tiny proposed reforms. In Cantor’s YouCut commentary he says “America is at a critical crossroads, and the choices we make today will determine the kind of country we leave to our children and grandchildren.”

Now let’s look at this week’s proposed GOP spending cuts. A website banner says “CLICK HERE TO VOTE FOR THIS WEEK’S FIVE CUTS,” but takes the viewer to the YouCut page where they’re offered three spending cut options:

1. Terminate Taxpayer Funding of National Public Radio. The site says this would achieve “Savings of Tens of Millions of Dollars (potentially in excess of a hundred million dollars).” NPR shouldn’t receive taxpayer funding – and not just because it canned Juan Williams. But couldn’t the House GOP leadership have at least offered up the $500 million Corporation for Public Broadcasting that subsidizes NPR for cutting?

2. Terminate Exchanges with Historic Whaling and Trading Partners Program. The site says this would save $87.5 million over ten years.

3. Terminate the Presidential Election Fund. This would achieve a whopping projected savings of $520 million over ten years.

America is at a “critical crossroads” and the GOP leadership is offering to cut whaling history subsidies? Congress is bankrupting the nation and the possible next Speaker of the House – “never a details man” – can’t even specify what he would cut in the budget.

It’s pathetic.