September 23, 2011 11:47AM

Eyes Wide Shut to Trade Policies That Would Encourage Domestic Investment and Hiring

The Congressional Joint Economic Committee held a hearing this week entitled “Manufacturing in the USA: How U.S. Trade Policy Offshores Jobs.” The intended purpose of the hearing was to examine how foreign unfair trade practices encourage the offshoring of U.S. manufacturing. Thankfully, not all witnesses stayed within the contours of that presumption.

I say “thankfully” because the incessant focus of politicians on fixing the policies and practices of foreign governments, as though they were the primary impediments to U.S. business success at home and abroad, is a diversion that should no longer be tolerated. It gives the appearance that our elected officials are earnestly seeking appropriate solutions, while further obscuring the real solutions. Meanwhile, it protects incumbents from having to make substantive, consequential choices.

I’ve written lately (in this policy paper and in this op‐​ed) about how U.S. trade policy undermines the competitiveness of U.S. firms and chases some producers offshore. But I find some of the greatest impediments to U.S. firms’ success to be homegrown, domestic policies that place unnecessary restrictions and burdens on U.S. firms trying to compete in a global economy.

I elaborated on those points in written testimony submitted to the committee, the introduction of which follows:

Too many U.S. policymakers, from Capitol Hill to the various executive branch agencies in Washington, tend to focus on foreign policies and foreign barriers when considering how best to improve the competitive prospects for U.S. firms. The presumption is that the major impediments to the success of U.S. firms are foreign born. Closed foreign markets, complex laws and regulations, overt flaunting of the trade rules, subtle protectionism, and unfair trade are the primary culprits that subvert the success of U.S. firms, discourage investment and hiring, and encourage offshoring of production. Indeed, that is the premise of today’s hearing, as inferred from its description on the Committee’s website.

But that premise is myopic and, frankly, irresponsible. It reinforces arguments for nonsensical policies, such as preserving our own barriers to trade and investment, which are nothing more than costs to U.S. businesses and families. Policies that raise the cost of doing business in the United States — such as our tariff regime and the trade remedies duties that the U.S. government imposes on broad swaths of industrial inputs — encourage manufacturers to at least consider moving operations abroad, where those materials are available at better prices.

Governments are competing for business investment and talent, which both tend to flow to jurisdictions where the rule of law is clear and abided; where there is greater certainty to the business and political climate; where the specter of asset expropriation is negligible; where physical and administrative infrastructure is in good shape; where the local work force is productive; where there are limited physical, political, and administrative frictions. This global competition in policy is a positive development. But we are kidding ourselves if we think that the United States is somehow immune from this dynamic and does not have to compete and earn its share with good policies. The decisions made now with respect to our policies on immigration, education, energy, trade, entitlements, taxes, and the role of government in managing the economy will determine the health, competitiveness, and relative significance of the U.S. economy in the decades ahead.

September 23, 2011 11:20AM

Obama’s Double‐​Secret Violation of the Constitution

Though few people outside of the Tea Party — especially politicians — have the guts to say it, federal education control like the No Child Left Behind Act is blatantly unconstitutional. Authority over education is not among the federal government’s enumerated powers, and laws like the NCLB — which truly is a wreck driven by what self‐​interested politicians thought sounded good—also go far beyond the 14th Amendment’s charge to prohibit discrimination by state and local governments. 

But not satisfied to just have Washington fully ensconced in classrooms, this morning the Obama administration officially went to double‐​secret violation of the Constitution, adding a brazen dumping of the separation of powers to federal education policy.

This second layer of Constitution‐​contempt comes in the form of the administration telling states that they can get waivers from the No Child Left Behind Act — which the NCLB allows — but requiring that they adopt administration‐​approved policies to do so. That second part the NCLB does not allow, meaning the president has decided to rewrite the law all by himself — including strong‐​arming states to adopt “college and career ready standards,” another step toward federal curriculum standards — even though the Constitution is crystal clear: “All legislative Powers herein granted shall be vested in a Congress of the United States.” 

In response to this, will we finally hear the Constitution loudly, constantly, and honestly invoked and defended by members of Congress, especially those in the GOP who don’t have the obstacle of having to defend “their” president? We sure as heck should, but don’t count on it: If they start really defending the Constitution now, think of all the violations they’ve happily perpetrated that someone might notice. No, better to keep up the double‐​secret evasion and complain on other grounds, like President Obama is being too “political.” Because no one in Congress — or anywhere else — would ever act based on political motives, such as concluding that “Constitution, shmonstitution, we can’t push to get the Feds completely out of education because people would think we are mean.” 

No, political thinking like that would never happen.

September 23, 2011 6:00AM

Congress on Transparency: ‘Needs Improvement’

"Needs improvement" is the understated theme of a Capitol Hill briefing this morning entitled "Publication Practices for Transparent Government: Rating the Congress." (Live-streamed starting at 9:00 am. If timely, check it out---the video will come up before too long also---and join the conversation on Twitter at the #RateCongress hashtag.)

Congress needs to improve its data publication practices if it's going to be the transparent legislature that it should be.

How did we arrive at this conclusion? We're doing more than stating the obvious.

A Cato Briefing Paper released today entitled "Publication Practices for Transparent Government" goes through some technically challenging but essential concepts in data publication: authoritative sourcing, availability, machine-discoverability, and machine-readability. Together, these practices will allow computers to automatically generate the myriad stories that the data Congress produces have to tell. Following these practices will allow many different users to put the data to hundreds of new uses in government oversight.

At the event, we're releasing informal grades that rate how each of the major parts of the legislative process are published as data. To produce the grades, we constructed a "data model" of formal federal legislative processes (HTML version, Word version).

Read the rest of this post »
September 23, 2011 5:33AM

Questioning the Drone Wars

The Washington Post reported Tuesday that we are building more unmanned aerial vehicle bases around the Horn of Africa and Yemen to strike al Qaeda militants.

For a critical take on drone strikes in both places, read what I wrote here in July. I discuss the danger of conflating all jihadist militants with those bent on attacking us. Here’s the bit on Somalia.

Since our recent drone strike in Somalia on leaders of the al‐​Shabab insurgent group, the administration has claimed that Shabab’s leaders are plotting terrorism against American or western targets. The only evidence given for this assertion is vague claims of Shabab’s ties to Yemeni militants and its claim of responsibility for a 2010 terrorist bombing in Uganda. But that bombing came because Ugandan troops are in the African Union force fighting al‐​Shabab. While reprehensible, the attack does not show a desire to terrorize Americans.

At the risk of sounding quaint, Congress should make the administration substantiate its claims that Shabab is targeting Americans before we bomb them further. We have enough insurgents to fight these days outside Somalia.

I also questioned the Bush administration’s claims about the Shabaab‐​al Qaeda nexus here in 2008.

Prior links and several al Qaeda guys in the mix, while worrying, do not mean that organization is going to attack Americans, and is therefore one we should target.

Mixing a “war on terrorism” with the promiscuous designation of Islamic insurgent organizations as terrorists is a recipe for spending the next century tied up in other people’s civil wars. There’s a self‐​fulfilling aspect to this policy. Declaring war on insurgents may cause them to attack Americans or ally with those who do. There’s evidence that this dynamic is already occurring in Somalia.

Last month, I wrote a post for the National Interest about drone strikes in Pakistan, arguing that no one really knows how well they work. That uncertainty, combined with secrecy, is, I argue, good reason to oppose them. The principle applies elsewhere. Our leaders should have to work harder to make war.

Finally, globe‐​trotting reporter David Axe criticized U.S. policy toward Somalia in a 2009 Cato Policy Analysis, arguing for a more hands‐​off approach.

September 23, 2011 5:29AM

What Is Judicial Activism?

Nearly a year ago, I had an engaging debate at Berkeley Law School regarding “judicial activism.” Of course, as I clarified, the phrase is really just an epithet hurled by someone to describe a legal ruling with which he disagrees. The whole argument about whether a certain judge is “activist,” “restrained,” or anything else is irrelevant: fidelity to the Constitution should be the sole evaluative criterion — and point of debate — regardless of whether that means striking down a law or upholding it, deferring to the legislature or not.

As I said during this debate (which was against a young law professor named Fred Smith),

The purveyors of conventional punditry all miss the larger point. The role of the judiciary in terms of constitutional interpretation is to fully interpret and apply the Constitution, period. So, if that means upholding a law, fine. If that means striking it down, fine. Activism is doing something that is not supposed to be the judicial role or not being faithful to the Constitution, which is no small task in part because of the doctrinal mess the Supreme Court has made. Again, whether a particular statute stands or falls is of no moment. Fidelity to the founding document should be the touchstone, not a circular debate over the virtues of judicial restraint or — as John Roberts put it at his confirmation hearing — modesty: just calling balls and strikes, just being in a kind of modest judicial role. Again, where you stand on those sorts of debates depends on where you sit.

I can quote this debate because a transcript has been published in the Federalist Society’s journal, Engage. The current volume has plenty of other interesting articles, including some authored by various Cato‐​affiliated or ‑friendly folks.

September 22, 2011 4:20PM

Cato Conference: Ending the Global War on Drugs

On Tuesday, November 15, Cato will be hosting a day‐​long drug policy conference on Ending the Global War on Drugs. This issue, which has always been a crucial part of libertarian thought, has picked up wider support in recent decades. More and more people are realizing two fundamental truths about the war on drugs: 1) that the government has no place in deciding what you are or are not allowed to put in your body, and 2) that, even if it did, the costs associated with prohibition are, well, prohibitively high.

One of these costs, the effect that drug prohibition has had on South America and Mexico, will be highlighted at the November conference. Fernando Henrique Cardoso, the former President of Brazil, Luis Alberto Lacalle Pou, the Speaker of the House of Deputies in Uruguay, and Jorge Castañeda, former Minister of Foreign Affairs in Mexico, will all be on hand to discuss the effects of prohibition in their home countries.

The conference also features Glenn Greenwald, prominent Salon blogger and civil libertarian, as well as the author of one of our most‐​cited white papers, Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies. It should be a fantastic event. For those who may still be on the fence about ending drug prohibition, I advise taking a look at LearnLiberty’s excellent new video featuring Dr. Stephen Davies:

September 22, 2011 10:42AM

Rating Congress on Transparency

Tomorrow morning, I’ll be officially releasing a paper entitled “Publication Practices for Transparent Government” at a Hill briefing entitled “Publication Practices for Transparent Government: Rating the Congress.”

If you’re a smart and savvy Internet user, you probably noticed that the paper is there at the first link above, unofficially released just for you. This qualifies you to read it and get some of the fascinating and different technical aspects of transparency.

This is all a teaser for our release tomorrow of “grades” on how Congress is doing with publishing data about the essential parts of its legislative work. For that, you’ll have to attend the event or watch it live‐​streamed (here, commencing at 9:00 Eastern with remarks from House Oversight and Government Reform Committee Chairman Darrell Issa (R‑CA)).

If you like transparency — and chances are you do — you can help spur discussion tomorrow (or even today) using the hashtag #RateCongress, along with, of course, #transparency. (Don’t know what a hashtag is? Well, here’s a little help.)

Despite good faith efforts on the part of the Obama administration and congressional leaders, government transparency hasn’t flourished as it could the last few years. The paper, event, and “report card” are intended to spur progress on that front.

Transparency is interesting not only technically and administratively, but ideologically. Libertarians and conservatives believe it will expose waste and corruption, fomenting downward pressure on the size and scope of government. Liberals and progressives believe transparency will expose waste and corruption, validating many government programs and roles.

I say let’s get on with exposing waste and corruption, so we can find out what happens next!