September 9, 2011 2:39PM

Waterboarding, Consent, and Rape

Former Vice President Dick Cheney appeared at AEI today to promote his book and again made the claim that waterboarding detainees is not torture because we use this technique on our own troops. As he put it:

"Another key point that needs to be made was that the techniques that we used were all previously used on Americans," Cheney went on. "All of them were used in training for a lot of our own specialists in the military. So there wasn't any technique that we used on any al Qaeda individual that hadn't been used on our own troops first, just to give you some idea whether or not we were ‘torturing' the people we captured."

This isn’t a new argument. Plenty of other folks have argued that, because we subject members of the military to waterboarding in Survival, Evasion, Resistance, and Escape (SERE) School (the military’s POW prep course), waterboarding detainees is not mistreatment.

It’s also a nonsensical argument.

The difference is consent. What one person consents to in one set of conditions does not make the same treatment, without consent and in other conditions, somehow less invasive or less illegal under domestic and international law. I was not waterboarded when I attended SERE school, but I endured treatment I wouldn’t willingly accept in other circumstances. If you want to waterboard me, you’d best be ready for a fight.

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September 9, 2011 1:49PM

Military Spending Discussion Set for Next Week

The so‐​called Supercommittee only kicked off yesterday but already one of its members, Sen. Jon Kyl (R‑AZ), has threatened to quit if military spending is included in the search for savings.

[Kyl] told GOP leaders, “I’m off the committee” if further military cuts would be on the table.

“We’re not going there,” Kyl said sternly,…“Defense has given enough already.”

Such comments reflect a general lack of knowledge about the actual size of the U.S.military budget relative to the rest of the world, and an inattention to the growth of that spending over the past 10–12 years. And, contrary to what Senator Kyl and others claim, the military’s budget still hasn’t been cut. We will spend more in 2011, in inflation‐​adjusted dollars, than at any time since World War II.

And that really is the point. Why are we spending so much? Because we ask our military to do too much. We should place fewer demands on our troops and recognize that our spending and our foreign policy discourages other countries from doing more. Declaring military spending off limits before the Supercommittee even begins its work reveals a shocking unwillingness to reconsider the roles and missions that drive military spending.

I will stress that theme next Tuesday, September 13th, during a panel discussion moderated by Major Garrett of National Journal that will address DoD spending over the past 10 years, and also consider a path forward within an environment of fiscal austerity. Other speakers include Janne Nolan with the American Security Project, Foreign Policy’s Josh Rogin, Larry Korb from the Center for American Progress, Loren Thompson of the Lexington Institute, and Truman National Security Project Vice President Michael Breen The event will take place at the Capitol Visitors Center at 2:00 PM. It is open to the public, but space is limited. To learn more and to register, visit here.

Senator Kyl notwithstanding, I hope that the rest of the Supercommittee will take their obligations seriously. The federal government is capable of getting its fiscal house in order, but the politicians can’t afford to postpone the hard decisions any longer. It simply isn’t realistic to believe that we can reduce total federal spending while declaring more than 50 percent of the discretionary budget to be off limits.

September 9, 2011 1:44PM

Defending Foreign Countries Costs Money

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Rep. Adam Smith[/caption]

America's military budget includes funds used to pay for defense of the United States as well as funds extracted from Americans to fund the defense of an array of client states across the world. Don't believe me? Listen to Rep. Adam Smith (D-Wash), discussing U.S. military strength in the context of Asia:

We should be strong enough to defend our interests and the interests of other countries in the region.

In this view, how strong should actual countries in the region be? Do they have to do anything to defend their interests? Or will we just do it for them, come what may? If the latter, is this smart?

September 9, 2011 10:02AM

One Expensive New Job Forward, Two Existing Jobs Back

As the president was pitching his jobs plan last night, his current policies were hard at work discouraging job creation and incentivizing layoffs. 

One of innumerable such policies concerns the treatment of imported raw materials and other intermediate goods that are subject to antidumping or countervailing duty measures, but needed by U.S. producers to make their final products. It almost defies comprehension that, in a modern, interdependent economy characterized by transnational supply chains and cross-border investment, over 80 percent of all U.S. antidumping and countervailing duty measures are imposed on these ingredients of U.S. production. This policy drives up the cost of production for downstream U.S. industries, making it more difficult for them to compete in the United States and abroad, curtailing profits, investment, and hiring.

However, under the U.S. Foreign Trade Zones program, some of the costs inflicted on downstream, import-consuming firms can be mitigated. (Of course, the program wouldn't be necessary if U.S. duties were recognized as just another cost of production and set, optimally, at zero.) Among the aims of the FTZ program is to encourage manufacturing activity in the United States (and to discourage manufacturers from shuttering domestic operations and moving offshore as a result of the burden of paying U.S. customs duties).

FTZs are usually manufacturing plants or facilities physically located within the United States, but considered outside U.S. territory for the purpose of customs duty payment. Goods that enter FTZs are not subject to customs duties (including antidumping or countervailing duties) until they leave the zone and are formally entered into the commerce of the United States. If those goods are used as inputs to a further manufacturing process, the rate of duty applicable to the final product is assessed. If the goods are exported from a FTZ, with or without further processing, no duties are imposed because the product never officially "entered" the United States.

With respect to products made from materials and components subject to AD or CVD duties, the standing regulations require FTZ operators to get advance approval from the Foreign Trade Zones Board if the intention is to sell those final products in the United States. That requirement does not apply when the final product is going to be exported from the FTZ, which provides some incentive to downstream U.S. firms to keep production in the United States by operating as a FTZ.

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September 9, 2011 9:55AM

Obama’s Job Speech Full of Bad Ideas

I note on National Review today that President Obama’s “jobs” package is full of bad ideas, including:

  • A temporary payroll tax cut. This is not a tax cut at all because the president would “pay for it” with tax hikes later on. And if it’s temporary, it won’t encourage businesses to hire additional workers anyway.
  • More federal infrastructure. When the federal government spends on infrastructure, it often misallocates the funds. The list of federal infrastructure boondoggles and cost overruns is endless — in public housing, dam‐​building, Corps of Engineers projects, bridges to nowhere, high‐​speed rail, etc. Instead, what we need is higher‐​quality infrastructure spending financed and built by the private sector. We need private airports, private air‐​traffic control, and private toll highways.
  • A federal infrastructure bank. Such a financial scheme would reduce transparency in federal spending, which would go directly against a key Obama promise of increased budget transparency.
  • Federal jobs training programs. Since the 1960s, federal jobs‐​training programs simply haven’t worked.
  • New business tax credits. New tax credits for hiring will distort business decisionmaking and, by making the tax code more complicated, such credits would encourage more tax cheating. They would be the exact sort of tax loophole that Obama claims to hate.
  • Crony capitalism. When Obama talks about “government and business working side‐​by‐​side,” it sounds to me like an invitation to corruption.
  • Extending unemployment insurance. Such subsidies would help keep the unemployment rate high.

Rather than all this big‐​government micromanagement, federal policymakers should pursue a large and clean corporate tax rate cut. Obama did talk vaguely about corporate‐​tax reform tonight, but I’ll believe that when I see it.

September 9, 2011 9:30AM

Obama’s Economic Policy: From Tragedy to Farce

Herman Cain probably had the best reaction to the President’s speech: “We waited 30 months for this?”

My reaction yesterday was mixed. In some sense, I was almost embarrassed for the President. He demanded a speech to a joint session of Congress and then produced a list of recycled (regurgitated might be a better word) Keynesian gimmicks.

But I was also angry. Tens of millions of Americans are suffering, but Obama is unwilling to admit big government isn’t working. I don’t know whether it’s because of ideological blindness or short‐​term politics, but it’s a tragedy that ordinary people are hurting because of his mistakes.

The Wall Street Journal this morning offered a similar response, but said it in a nicer way.

This is not to say that Mr. Obama hasn’t made any intellectual progress across his 32 months in office. He now admits the damage that overregulation can do, though he can’t do much to stop it without repealing his own legislative achievements. He now acts as if he believes that taxes matter to investment and hiring, at least for the next year. And he now sees the wisdom of fiscal discipline, albeit starting only in 2013. Yet the underlying theory and practice of the familiar ideas that the President proposed last night are those of the government conjurer. More targeted, temporary tax cuts; more spending now with promises of restraint later; the fifth (or is it sixth?) plan to reduce housing foreclosures; and more public works spending, though this time we’re told the projects really will be shovel‐​ready.

And let’s also note that Obama had the gall to demand that Congress immediately enact his plan — even though he hasn’t actually produced anything on paper!

And then, for the cherry on the ice cream sundae, he says he wants the so‐​called supercommittee to impose a bunch of class‐​warfare taxes to finance his latest scheme.

What began as tragedy has now become farce.

If you didn’t see it when I posted it a month or so ago, here’s the video I did last year when Obama was proposing a second faux stimulus. Now that he’s on his fourth of fifth jobs‐​bill/​stimulus/​growth‐​package/​whatever, it’s worth another look.

Though I must confess that I made a mistake when I put together this video. I mistakenly assumed the economy would have at least managed to get back to a semi‐​decent level of growth. More confirmation that economists are lousy forecasters.

September 8, 2011 5:08PM

For Jobs, Cut the Corporate Tax Rate

As we wait for President Obama’s big “jobs” speech tonight, here are a few thoughts.

The way to think about jobs is to think first about investment. Workers are expensive, so businesses don’t hire them willy nilly. Instead, businesses seeking new markets build factories and buy machines. Then they hire the number of workers they need to run the new machines and maximize their profits.

If President Obama wants more hiring, he should make it more profitable for businesses to invest in the United States. The simplest and most direct way to do that would be to chop America’s uniquely high corporate tax rate of 40 percent, which includes the 35 percent federal rate and the average state rate. That reform could be combined with cuts to federal spending—such as business subsidies–so as not to increase the deficit.

A corporate rate cut makes political sense for Obama because it would be both pro‐​business and pro‐​labor. The nonpartisan Joint Committee on Taxation ran two macroeconomic models in 2005 and found that a corporate rate cut would “provide incentives for increased investment in corporate capital. Over time, this increased investment results in more goods and services and higher total output. It also results in higher labor productivity, leading to increased wages and employment.”

How big a rate cut do we need? According to KPMG, the global average corporate tax rate fell over the last decade from 32 percent to just 25 percent. Thus, cutting our rate by at least 15 percentage points would match the global average, and it would be bold stroke by Obama to get the economy booming again before the upcoming election