Archives: 01/2013

It’s Cowboys vs. Packers in the Game of Politics, and the Price of Beef Is at Stake

An effort is underway at the Department of Agriculture to reform the federal government’s mandatory country-of-origin labeling rules for beef.  The current scheme was successfully challenged by Canada and Mexico as a violation of WTO obligations prohibiting protectionist regulatory discrimination.  If the United States does not bring its law into compliance, Mexico and Canada will have the option of raising tariffs on U.S. goods in retaliation.

The supposed purpose of mandatory origin labels is to improve food safety by providing consumers with information.  How does the country of origin of the cattle impact food safety?  I surely do not know.  If consumers want this information, why is a law needed to compel businesses to provide it?  I don’t know that either.

The actual purpose of the law is to prevent Canadian cattle raisers from competing with American cattle raisers.  The labeling scheme accomplishes this not by informing consumers that their beef is made from cattle that ate grass north of the 49th parallel, but by imposing on downstream processors the expense of keeping track of the cattle’s historical whereabouts.  The meat packers can avoid this expense by purchasing only purely U.S. origin cattle.    The price of American cattle goes up accordingly.

The extent of any reforms made this year will tell us how much the WTO ruling affected the balance of political power within the cow-to-hamburger value chain.  The law’s existence is evidence that cattle raisers currently have more influence in Washington than meat packers, but the WTO ruling has already made a difference simply by prompting the initiation of a reform effort.  The possibility of retaliation by Canada and Mexico spreads the negative consequences of the law to other politically relevant U.S. industries with a stake in North American trade.  These industries will not sit idly by while their own businesses suffer in the name of expensive beef.  

Let the lobbying begin!

Seneca Falls, and Selma, and Stonewall

I recently blogged that for me, the one (and perhaps only) bright spot of President Obama’s second inaugural address was this gem:

We, the people, declare today that the most evident of truths – that all of us are created equal – is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall; just as it guided all those men and women, sung and unsung, who left footprints along this great Mall, to hear a preacher say that we cannot walk alone; to hear a King proclaim that our individual freedom is inextricably bound to the freedom of every soul on Earth.

A reader responds:

Just a little feedback for your post below. I think you are being a bit too “highbrow” by not explaining what the three place names signify. I had to look up two of them to realize what they signified. They may all be top-of-mind to Obama Democrats, but this long-time libertarian (30+ years) and previous to that conservative republican really knew not of the references. With Wikipedia & Google search, it does not take much to look them up, but still….

I think a lot about why more women and minorities don’t show an interest in libertarianism, especially when libertarian ideas should be particularly appealing to groups that have suffered at the hands of the state. I think my correspondent exhibits one reason. Seneca Falls, Selma, and Stonewall represent seminal moments in the movements to liberate three groups who had suffered (and at least one of which is still suffering) state-sponsored repression right here in the United States. Yet this 30-year libertarian had to look up two of those references. I had to look up one. We didn’t know all three because libertarians do not routinely talk about these incredibly important moments and movements in the history of American freedom. Sure, we are glad they happened (and are ongoing). But we don’t celebrate them. Which we should. Barack Obama is ahead of us on this one.

Suppose you or a close family member had been in Selma. If you met a libertarian, and mentioned Selma, and he drew a blank – what would you think?

Gruber: No Reason for States to Establish ObamaCare Exchanges This Year

On Tuesday, I testified before the Florida Senate’s Select Committee on the Patient Protection and Affordable Care Act. Also testifying was economist Jonathan Gruber. Gruber is an architect of RomneyCare, and one of ObamaCare’s leading proponents. So it was significant when Gruber agreed that there is no reason for states to establish Exchanges this year:

Michael Cannon, director of health policy studies at the Cato Institute, and Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology, agreed on little about the federal health law, [yet] one bit of common ground emerged: Florida should go slow in its approach to a health-insurance exchange.

Gruber thinks that for 2014, states would be better off opting for a type of federal Exchange called a type of “partnership” Exchange, and then maybe running the Exchange themselves after that. I argue there is no reason for states to lift a finger to implement this law, now or ever, and that states would benefit from refusing both to establish an Exchange and to expand their Medicaid programs.

But now that ObamaCare’s leading proponent has acknowledged there is no reason for states to establish Exchanges this year, it will be easier for states who are still wrestling with that question (e.g., Idaho, Utah, North Carolina, Kentucky, Mississippi) to make up their minds.

Crowdfunding Science

File this under “where there’s a will, there’s a way.”

While it seems hard to believe (as attested to by the growing budget for National Science Foundation) federal and state budget decisions are apparently putting the squeeze on some forms of government-funded science, and so some scientists are seeking alternative ways of raising funds for their projects of interest. One such “novel” method is a direct appeal to the masses for support.

Witness this announcement from the American Association for the Advancement of Science (AAAS):

Crowdfunding Science: Appealing to the online community for research money

Event Date: January 29, 2013 12 p.m. Eastern, 9 a.m. Pacific, 5 p.m. GMT, 6 p.m. CEST

With federal and state funding for science on the downward trend, many young scientists are bypassing the grant writing process and appealing directly to the public via the Internet for money to support their research. Crowdfunding, as it is known, holds huge potential for scientists who can effectively capture the imagination of the public and get them to open their wallets in support of science.

In AAAS MemberCentral’s webinar “Appealing to the online community for research money”, we’ll look at #SciFund Challange, a website that helps researchers get their projects funded by the public, and we’ll also hear from two scientists who successfully funded their projects via the crowd. We’ll find out what they learned along the way, share tips on how to reach your funding goal and give you an opportunity to ask the panelists questions.

This seems a step in the right direction towards producing better-justified science projects that will be done for a lot less money with a lot more transparency.

How this fits in to a University setting should be interesting. Almost certainly it will bring the often exorbitant overhead rates for science funding into focus.  Most schools tack on an additional 50% or so which goes from the producer departments (science and engineering) to those that can’t carry their own weight.  Will the “crowd” accept being dunned for work they don’t support?  If this caught on, maybe our schools would better serve the market rather than centrally planning their own.

It’ll be interesting to see how this method of fundraising develops, but from the surface, it seems a positive development.

New York Times Misrepresents Georgia Education Program

A Monday New York Times story (“Backed by State Money, Georgia Scholarships Go to Schools Barring Gays”) repeatedly claims that the scholarship funds used in Georgia’s education tax credit program are “tax money,” “state money,” and “public money.” The entire article depends on this characterization—a characterization that is demonstrably false. Here’s why:

In its 2011 ACSTO v. Winn decision, the United States Supreme Court flatly rejected the claim that donations under a similar Arizona tax credit program were public funds, stating that:

In [the respondents’] view the tax credit is… best understood as a governmental expenditure. That is incorrect.

The Court elaborates on the next page:

When Arizona taxpayers choose to contribute to [Scholarship Tuition Organizations],they spend their own money, not money the State has collected from respondents or from other taxpayers. Arizona’s [tax credit program] does not “extrac[t] and spen[d]” a conscientious dissenter’s funds in service of an establishment [of religion],… or “‘force a citizen to contribute three pence only of his property’” to a sectarian organization…. On the contrary, respondents and other Arizona taxpayers remain free to pay their own tax bills, without contributing to an STO. — emphasis added

Because these scholarship donations are private and voluntary, the central point of the New York Times story is false. Under an education donation tax credit program, no one is forced to support schools whose teachings violate their convictions. Note that the same cannot be said of public schools, which all taxpayers must support regardless of their beliefs. For those of us who truly value freedom of conscience and individual liberty, education tax credits are a superior means of funding education to the status quo system. For over a decade, I have advocated education tax credit programs precisely because they do not do what the Times story wrongly claimed.

Two years ago, I shared the ACSTO v. Winn ruling with the standards editor of the Associated Press, who ultimately agreed that it was a misrepresentation for journalists to call these private donations “public money.” I sincerely hope that the New York Times will rise to the same journalistic standard as the AP, publish a correction to its story, and take steps to prevent future occurrences of this error.

Is Anybody Surprised that Krugman Was Wrong about U.K. Fiscal Policy?

Just like in the United States, politicians in the United Kingdom use the deceptive practice of “baseline budgeting” as part of fiscal policy.

This means the politicians can increase spending, but simultaneously claim they are cutting spending because the budget could have expanded at an even faster pace.

Sort of like saying your diet is successful because you’re only gaining two pounds a week rather than five pounds.

Anyhow, some people get deluded by this chicanery. Paul Krugman, for instance, complained in 2011 that “the government of Prime Minister David Cameron chose instead to move to immediate, unforced austerity, in the belief that private spending would more than make up for the government’s pullback.”

This was nonsense. There have not been any genuine budget cuts in the United Kingdom. Heck, just compare what’s happening today in the United Kingdom and what happened in Canada in the 1990s to see the difference between gimmickry and real fiscal restraint.

Now we have some new numbers that confirm that the UK economy is suffering because of a heavy burden of government spending.

Here’s some of what Allister Heath, the Editor of City A.M., wrote for the UK-based Telegraph.

The public finances are deteriorating again, making a mockery of the Coalition’s core purpose. Osborne’s fatal problem is that he is proving unable to deliver any meaningful reduction in the size of the state. The extent of his failure will come as a shock to many. Remarkably, public spending actually went up last year as a share of our national income… public spending hit 49pc of UK GDP last year, a shocking increase on the 48.6pc of GDP spent by the state in 2011. Even with a stagnant economy, this implies that Osborne has lost control of public spending.

Gee, doesn’t sound like much budget cutting to me.

Heck, the burden of government spending is worse than it is in Germany (45 percent of GDP). Or even Spain (44 percent) or Portugal (47.4 percent).

Perhaps the most shocking number is the one showing that the UK has radically veered in the wrong direction this century.

Public spending as a share of GDP hit a trough of just 36.6pc in 2000.

Allister hits the nail on the head.

…after all the rows about “slashing spending to the bone”, and following almost three years of coalition government, the state is still spending around half of national income. …it beggars belief that a government that remains so large, so bloated cannot provide much better quality services, and that we have a public debate in this country that exaggerates beyond all recognition the extent of the state’s downsizing.

But there has been some “austerity,” but only for taxpayers.

…real austerity is only biting on the tax side: total UK government revenues increased from 40.3pc of GDP in 2011 to 42.4pc in 2012, the OECD estimates. It’s getting increasingly hard for the Chancellor to extract revenues, with taxes on income and wealth falling to £194.3bn over 2012 as a whole, 2.7pc lower than in 2011, when they stood at £199.7bn, according to separate figures from the Centre for Economics and Business Research.

That last sentence, by the way, shows the Laffer Curve in action.  The supposedly Conservative government of Cameron and Osborne has raised the tax burden, yet revenues aren’t materializing.

Allister also echoes the argument of Veronique de Rugy about choosing the right kind of austerity and reining in the public sector.

Not all kinds of austerity were created equal: cutting current expenditure, such as benefits, is good for growth; but hiking taxes is bad for it… There is also lots of evidence that elevated levels of public spending and large government debts are bad for GDP; no wonder, therefore, that growth is failing to materialise.

So what’s the bottom line? Well, as Allister stated, the real problem is that government is too big and spending too much.

And until Cameron and Osborne are willing to tackle that problem, don’t expect much positive from the United Kingdom.

Gun Owner Saves Boy from Pit Bull Attack! Wait … Police Say His Actions Could be ‘Criminal’ ?

Today’s Washington Post reports that a boy in a DC neighborhood was out riding a new bike that he received on Christmas.  As he was riding through his neighborhood, he turned a corner and suddenly came upon three unattended pit bulls who proceeded to maul him. Fortunately for this 11-year old boy, a neighbor saw what was going on, ran into his house, got his handgun, and then returned and shot one of the pit bulls.  A DC police officer, nearby on bicycle, heard the shot, got to the scene, and then shot the other two pit bulls.

The boy, unidentified by the newspaper, is traumatized.  His uncle describes his injuries as “horrific” – all three pit bulls had their teeth clenched in the boy’s extremities just before the neighbor and officer shot them. 

Is the unidentified neighbor hailed as a hero?  No – just the opposite – he apparently needs a lawyer because he is reportedly under “investigation” for violating our capital city’s firearms laws!  You see – he may have discharged his weapon beyond his property line. Talk about no good deed going unpunished.  

Every single day, Americans use guns to save lives but we do not hear about these incidents on the evening news–and that’s mostly because the gun only has to be brandished and the bad guy takes flight. Just not considered “news.”  Another reason is media bias–as the past few days illustrate.  Yesterday, CNN had full coverage of a gun crime in Houston.  This story–civilian uses gun to save an 11-year old’s life–only a few paragraphs back in the metro section of the newspaper.

Whether or not the prosecutors file charges here, DC laws need to change–so residents don’t have to hope for good sense to prevail (while paying attorneys fees).   House Republicans do have jurisdiction over DC affairs – so here’s an opportunity to send a bill to the president’s desk to get the needed changes in place.

To draw more attention to how often Americans use guns in self-defense, Cato published this paper and created this self-defense map.