October 29, 2012 1:17PM

The Canadian Model for Fiscal Reform

In the Washington Post today, Brian Lee Crowley discusses the still little‐​known story of Canada’s

tremendous budgetary turnaround achieved in the mid‐​1990s. Over just a few years, between 1995 and 1998, Canada transformed a $32 billion federal deficit, equivalent to 4 percent of its gross domestic product, into a $2.5 billion surplus. This achievement was followed by a full decade of surplus budgets, with debt, tax and poverty rates all falling as growth, investment and employment rose.

Crowley discusses the reasons the success happened, from bipartisan (actually multipartisan) agreement to rallying public support. He promises six reasons, but lists only five. Maybe that’s part of the cutbacks. It’s an inspiring story: if Canada could cut federal spending from 22 percent of GDP to 15 percent, why can’t we?

And it’s a story you could have read in Cato Policy Report in May. Long‐​ago Canadian Chris Edwards, Cato’s director of tax policy studies, wrote:

In just two years, total noninterest spending fell by 10 percent, which would be like the U.S. Congress chopping $340 billion from this year’s noninterest federal spending of $3.4 trillion. When U.S. policymakers talk about “cutting” spending, they usually mean reducing spending growth rates, but the Canadians actually spent less when they reformed their budget in the 1990s.

And he offered this graphic depiction of the diverging fiscal picture in the United States and Canada:

Members of Congress: take note. Washington Post readers: You could have read it here first.

October 29, 2012 8:51AM

The Fourth Amendment in the Supreme Court This Week

Prior to the development of trade and commerce, movable property was "not esteemed of so high a nature, nor paid so much regard to by the law,” Blackstone tells us in his commentaries on the laws of England. Such property in transit was routinely confiscated by authorities or tariffed at exorbitant rates.

When commercial relations expanded, the quantity and value of personal property increased, and the law "learned to conceive different ideas of it." Legal protection for movable property increased.

In parallel to the growth of commerce in movables centuries ago, commerce in information is on the rise today. It may be time to "conceive different ideas of it" as well---different ideas that accord information similar protection. This is what a group of amici have encouraged the Supreme Court to do in a brief on an important privacy case being argued this week.

In Clapper v. Amnesty International, the Gun Owners Foundation, Gun Owners of America, Inc., the U.S. Justice Foundation, the Downsize D.C. Foundation, DownsizeDC.org, and the Conservative Legal Defense and Education Fund have argued that the Court should recognize a property interest in confidential communications. Doing so would more clearly establish the standing of the respondents in this case to challenge the global wiretapping program Congress established in the FISA Amendments Act of 2008.

William J. Olson, lead counsel on the brief, articulated the issues well in an email distributing it:

Our amicus brief in the Clapper case extrapolates from the court’s holding in Jones and identifies the property interests at stake in this case as confidential communications that are critical to the practice of law and of the enterprise of journalism. Using a property analysis, the citizens in Clapper have a protectable property interest in their electronic communications as they do in their written communications. Thus, even though plaintiffs are not "targeted" by the Government, the Government’s contention that their search and seizure of plaintiffs’ communications is only "incidental" is unavailing.

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October 28, 2012 11:26AM

Does “Pro‐​Life” Mean Government Control? To Thomas Friedman It Does

Thomas Friedman of the New York Times has a column today provocatively titled “Why I Am Pro‐​Life.” Of course he doesn’t mean that he wants the government to protect life in utero. Instead he turns to a standard Democratic theme: How can you say you’re “pro‐​life” and oppose welfare, environmental regulation, and every other government program? Friedman doesn’t miss a beat: “common‐​sense gun control…the Environmental Protection Agency, which ensures clean air and clean water, prevents childhood asthma, preserves biodiversity and combats climate change that could disrupt every life on the planet.… programs like Head Start that provide basic education, health and nutrition for the most disadvantaged children.…”

But then he takes it a breathtaking step further:

the most “pro‐​life” politician in America is New York City Mayor Michael Bloomberg. While he supports a woman’s right to choose, he has also used his position to promote a whole set of policies that enhance everyone’s quality of life — from his ban on smoking in bars and city parks to reduce cancer, to his ban on the sale in New York City of giant sugary drinks to combat obesity and diabetes, to his requirement for posting calorie counts on menus in chain restaurants, to his push to reinstate the expired federal ban on assault weapons and other forms of common‐​sense gun control, to his support for early childhood education, to his support for mitigating disruptive climate change.

Thomas Friedman’s vision of “pro‐​life” policies is, in every case, a network of bans and mandates forcing us to live our lives in ways that are pleasing to him and Mayor Bloomberg. No “life, liberty, and the pursuit of happiness” for him. No, his pro‐​life vision is Ira Levin’s dystopia in This Perfect Day, a world in which the state takes care of our every need.

When Hayek, in his essay “Why I Am Not a Conservative,” wrote about “the party of life,” he described it as “the party that favors free growth and spontaneous evolution.” Not Tom Friedman’s party! And certainly also not the party that seeks to ban drugs, gay marriage, and the discussion of evolution in science class. In her book The Future and Its Enemies, Virginia Postrel wrote at length about “the party of life,” and she didn’t have in mind Friedman’s crabbed view of a government that “protects life” by snuffing out liberty.

Some years ago I wrote a column titled “Pro‐​Life,” and I too had the Hayekian, not the Bloomberg‐​Friedman, view of life and liberty in mind. But long before that, as usual, Alexis de Tocqueville, in “What Sort of Despotism Democratic Nations Have to Fear,” warned us that one day Thomas Friedman and Michael Bloomberg would come for our liberties:

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things;it has predisposed men to endure them and often to look on them as benefits.

After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

October 26, 2012 6:14PM

Eric Cantor Sprints After His Bolted Horse

Several Republican congressmen have written to U.S. Export‐​Import Bank President Fred Hochburg, asking some probing questions about the business plan the bank submitted to Congress last month. They rightly express concern about the bank’s operations and risk management. They also cite the nondiversified portfolio of the bank, with its high reliance on the aircraft sector (which has long been about half of the bank’s exposure) singled out for particular concern. The letter, in short, gives a good indication of where bodies are buried at Ex‐​Im.

All this is very well, of course, except for one problem: most of the issues the congressmen raise have been a concern for many years, and yet Majority Leader Eric Cantor, one of the letter’s signatories, earlier this year negotiated not only an extention of the bank’s mandate (he agreed to extend it until 2014), but also an increase in its lending ceiling, with a few lily‐​livered “reforms” tacked on. Now he’s asking questions?

Mr. Cantor isn’t alone, of course; plenty of members from both sides of the aisle (including “tea‐​party” folks) voted for the reauthorization. But the concerns the letter raises are serious, longstanding, and were ultimately solvable by deauthorizing the bank’s charter altogether. And yet Mr. Cantor balked at that opportunity.

I should point out that one of the other signatories to this letter, Rep. Jim Jordan, and the Republican Study Committee he chairs, were behind a push to wind down the bank.

October 26, 2012 3:22PM

Canadian Children Take American Jobs

This week on ABC’s Nashville, viewers were treated to the musical debut of the daughters of country star Rayna Jaymes (Connie Britton). Actual sisters Lennon and Maisy Stella play Jaymes’s daughters Maddie and Daphne Conrad. And on the show’s third episode, they sing a song together at a school talent show, to rave reviews. Take a look:

And just who are these darling, talented girls singing their hearts out in the heartland of America? Why, it turns out they’re … Canadian. But you’ve got to go to the proud Canadian media to find out.

Are there no little American girls who could play a country singer’s daughters? They’re taking our jobs! I grew up a hundred miles from Nashville. They may be taking jobs from my own relatives. (I made the same point back in 2007 about baseball player Daisuke Matsuzaka, who was clearly taking a job in the major leagues that an American could fill.)

Notice how the American media, like Nashville station WKRN and the Wetpaint website, conceal the sinister Canadian origins of the young singers. Why do they hate American child singers?

Seriously, of course, we all benefit from free trade and liberal immigration rules. Hollywood has been enhanced by Canadians Mary Pickford, William Shatner, Jim Carrey, Justin Bieber, and James Cameron. We all benefit from companies like Google, Intel, Yahoo!, eBay, Netgear, and YouTube, all started at least in part by immigrants.

Though I do wonder about this from the Toronto Star:

Only one obstacle remained: the girls needed a green card. As Canadian citizens, they were still prohibited from working in the U.S.

“They had the parts for Nashville already,” says Marylynne. “But in order to get their visas, they needed to get press. So we needed to get something in the local papers or local TV in Whitby or Oshawa, anything, to get anybody to say anything about them, so we could put it in the application for their visas.”

To that end, she uploaded a new video, a rerecording of a song that the girls had performed at a local talent show, an a capella cover of “Call Your Girlfriend.”

The clip exploded, “literally overnight,” marvels Marylynne. “It went so viral so fast, they got all the press they needed … and it happened all in one day. We posted the video on May 30, at about 2 o’clock in the morning, and the next day we were on Good Morning America in New York.”

The Star didn’t finish the story. Did the girls get their green cards? Presumably. Did media attention help? That’s the implication. Does the INS deliver green cards faster to popular celebrities? You’d have to ask them.

Immigration rules should apply equally to everyone. But it’s good to keep America welcoming talent from all over the world.

October 26, 2012 3:17PM

‘Mediscare’ and the Pennsylvania Senate Race

Back in August, Cato adjunct scholar Veronique de Rugy expressed concern about Republican campaign rhetoric on Medicare. As Republicans tell it, they want to “protect” and “strengthen” Medicare, whereas President Obama wants to “cut” and “weaken” it. Veronique thinks that the GOP’s “Mediscare” campaign could end up backfiring by making it harder to reform Medicare if Republicans succeed in taking control of Washington.

What I find irritating is that for all the standard platitudes from Republicans about getting federal spending under control, they’re simultaneously attacking Democrats for allegedly wanting to cut the budget’s big‐​ticket items like Medicare and military spending. Democrats might deserve it for decades of trying to scare the pants off of seniors, but the GOP’s adoption of their tactics is evidence in support of the view that the parties merely represent two sides of the same coin. (Don’t forget the last big expansion of entitlements came from the Republican‐​engineered addition of a prescription drug benefit to Medicare in 2004.)

That brings me to the Pennsylvania race for U.S. Senate , where Republican challenger Tom Smith is trying to unseat Democrat Bob Casey. Smith is apparently in striking distance after months of running television ads attacking Casey. However, one particular ad being run by the Smith campaign is a good example of how low Republicans have sunk when it comes to Mediscaring:

At the end of the ad we see Smith sitting with his elderly mother. Smith says, “In the Senate I’ll protect Social Security and Medicare. After all, my own mother receives those benefits and this son would never jeopardize that.” He then turns to his mom, puts his arm on her shoulder, and asks, “Right, mom?” “Right” she replies.


Note to partisan readers: my criticism of the Smith ad does not mean that I support Bob Casey or believe that Casey would be a better senator.

October 26, 2012 2:20PM

Same‐​Sex Marriage: Some Cato Resources

Four states will consider gay-marriage measures on Nov. 6. Voters in Maine (Question 1), Maryland (Question 6), and Washington (Referendum 74) will decide whether to approve same-sex marriage laws, while Minnesota voters will vote on a constitutional amendment that would ban such recognition.

Cato as an institution takes no position on state ballot initiatives, but it has devoted a lot of attention to the underlying issues. In May of last year (see the video below), we hosted a panel discussion with the co-counsels of the case challenging California's Prop 8, Theodore ("no relation") Olson and David Boies, and co-plaintiffs John Podesta and Robert Levy (who is also Cato's chairman).

Below the jump are some other contributions by Catoites.

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