201302

February 15, 2013 2:56PM

‘Constitutional Slippage’ — Arts Edition

Writing and ratifying a constitution is one thing; preserving one quite another, as the history of our own amply demonstrates.

One of our bright young legal associates, James Schindler, was wandering about town the other day, as so many young people in Washington are wont to do, when he strolled into the Capitol Visitor Center and saw an art exhibit extolling the virtues of the National  Endowment for the Arts. Above it was emblazoned an excerpt from the Constitution that read, “The Congress shall have Power to … promote … useful Arts.”

Thinking something amiss, he pulled out his Cato pocket Constitution, without which, being a solid citizen, he never leaves home. And sure enough, the constitutional passage actually reads, “The Congress shall have Power To … promote the … useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

It takes no small imagination, of course, to read that passage as authorizing Congress to promote the arts by subsidizing them and not simply by protecting intellectual property. But never let it be said that the folks at the National Endowment for the Arts are without imagination.

Thus does “constitutional slippage” unfold. One imagines that in the beginning, before the advent of national endowments for art, the humanities, science, and more, all was dark and mere philistines roamed the earth, searching for the light.

February 15, 2013 12:53PM

This Week at Lib​er​tar​i​an​ism​.org

It's been a busy week over at Libertarianism.org, Cato's website exploring the theory and history of liberty. George H. Smith published a new essay in his Excursions series. In this third part of an ongoing look at the history of political philosophy, Smith examines early thinking on political obligation, and how the problem of allegiance was the major concern of John Locke.

When philosophers discuss political obligation they sometimes ignore the crucial distinction between political obligation and political allegiance, despite the fact that many early political debates focused on the latter issue. Political obligation in some form was taken for granted, but this did not answer the crucial question: What makes a government legitimate in the first place?

Read it here.

We also released two new videos. In the first, Walter Williams, speaking at a 1984 Libertarian International conference, explains how the state's occupational licensing restrictions and other discriminatory laws often prevent minorities from finding gainful employment.

Our second video is a 1986 lecture by economist Fred McChesney. McChesney discusses how private ownership incentivizes productivity in everything from transportation systems to fire departments to oyster beds. Public ownership, on the other hand, incentivizes waste, overuse of natural resources, and higher costs.

Free Thoughts, Libertarianism.org's blog, had an active week as well. Philosopher Matt Zwolinski kicked things off on Monday with a post on "moralized freedom."

For if one holds the moralized conception of liberty, then liberty is defined not as freedom from interference per se but merely as freedom from interference with what one has a right to do. If one then says that we have the right to self-ownership, and private property, etc., because those rights protect liberty, then one has argued oneself right into a circle.

As he's been doing for the last few weeks, economist David D. Friedman pushed back against Zwolinski's arguments about freedom and private property. In "Is All Freedom Equal?" Friedman accuses Zwolinski of "blur[ring] together the kind of property which does raise problems for libertarians, property in land, which is an uncreated resource, with the kind of property which does not raise such problems, property created by human action."

The debate didn't end there. Zwolinski responded a day later with a long post, "Conceptual Claims Aren’t Moral Claims: Why Not All Freedom Matters Equally." In it, he clarified many of his prior arguments, as well as addressed the broader problem of precision in moral philosophy.

It would be nice if morality were easier. It would be nice if we had a formula that could tell us exactly when and how much each of these considerations matters, and to what conclusion they lead in any particular case. But as far as I can tell, we don’t. And so morality, like painting or architecture or any other skill of reasonable complexity, remains as Aristotle claimed it to be, a domain in which rules and formulas inevitably fall short, and in which ultimately there is no substitute for the experienced judgment of practical wisdom.

Finally, I published the second in my series of posts on the political thought of Robert Nozick. In the first, I gave an overview of Nozick's theory of natural rights and explained what they say about the role of the state. In this week's post, I moved on to his debate with libertarian anarchists, specifically his story of how a minimal state can---and, he claims, morally must---rise out of an initially anarchist society, and might do so without violating anyone's rights.

We’re still living in anarchy, however. None of those agencies can compel people to accept and pay for its services and so the world still contains many “independents,” as Nozick calls them. These independents—either individuals or smaller, non-affiliated agencies—present a problem for the dominant protection agency. In the mind of that agency and its clients, independents take justice into their own hands. The dominant protection agency’s job is to protect the rights of its own clients, so it understandably gets concerned when an independent seeks to extract restitution from one of those clients. Not knowing for sure if the client is guilty, the dominant protection agency is obligated to prevent punishment until guilt is assured. And the only way for the dominant protection agency to be sure (or sure enough) of its client’s guilt is to subject that client to its own procedures.

Next week, we'll have even more new essays, videos, and blog posts at Libertarianism.org. If you'd like to keep on top of it all, you can follows us on Facebook and Twitter, or sign up to get updates by email. 

February 15, 2013 11:16AM

Like Its Big Sibling, Early Head Start Not Built to Last

Media Name: 320px-waaah.jpg

People used to laugh nervously about the federal government taking over their lives “from cradle to grave.” But at least since the passage of Obamacare---not to mention the two-dimensional Utopia of Julia---that has seemed a much more concrete prospect. And with President Obama’s new proposals to expand federal pre-kindergarten programs going all the way to age zero, the cradle is now fully in play.

We’ve heard a lot about pre-K for years, but focused mainly on the age 3-to-5 set. For the federal government that means Head Start, an $8 billion program that has been shown again and again to have essentially no lasting benefits. But since the mid-1990s Washington has also run something called Early Head Start aimed at infants and toddlers.

It’s probably safe to say that few people know much about Early Head Start, which is too bad because, if the debate goes anything like that for overall pre-K, there will be many deceptive claims suggesting it has nearly miraculous effects. Indeed, yesterday Washington Post “Wonkblog” contributor Dylan Matthews wrote that Early Head Start has “proven very effective in randomized controlled trials.” To back the claim he linked to “The Promising Practices Network” which, citing three studies, did indeed designate the program “proven.”

But is it? The answer is emphatically “no,” just like regular Head Start. The positive effects disappear by, at the latest, fifth grade, meaning recipients would have ultimately been as well off had they not gone through the program. As the authors write in the conclusion to the third study cited by the Promising Practices Network:

The impact analyses show that for the overall sample, the positive effects of Early Head Start for children and parents did not continue when children were in fifth grade…. It appears that the modest impacts across multiple domains that were observed in earlier waves of follow-up did not persist by the time children were in fifth grade.

That is not the only bad news for Early Head Start. While some lasting, positive effects were found for some subgroups, so were many negative effects. And for the families and children designated “highest risk”-–-those who needed help the most-–-the effects of Early Head Start were awful:

Finally, for children in the highest-risk group, six impacts were statistically significant, all of which were at the child level and all of which favored the control group. Children in the program group scored significantly lower than children in the control group on the PPVT-III (ES = −0.21, p < .10) and the mathematics test (ES = −0.33, p < .05) and had lower scores on the academic success index (ES = −0.29, p< .05). Parents reports indicated that chronic absenteeism was higher in the program group than the control group (ES = 0.37, p < .10). Children in the program group also scored higher on the cumulative risk index (ES = 0.35, p < .10) and lower on the cumulative success index (ES = −0.31, p < .05) than children in the control group. There were no significant impacts on parenting and family-level outcomes in the highest-risk group.

The highest-risk kids, it seems, would have been significantly better off staying out of Early Head Start.

“Proven,” Early Head Start absolutely is not. Just like its ineffectual big brother.

February 15, 2013 11:02AM

Jack Lew’s Cayman Adventure

Every so often you get a "teaching moment" in Washington. We now have one excellent example, as President Obama's nominee for treasury secretary has been caught with his hand in the "tax haven" cookie jar. Mr. Lew not only invested some of his own money in a Cayman-based fund, he also was in charge of a Citi Bank division that had over 100 Cayman-domiciled funds. This provides an opportunity to educate lawmakers about the "offshore" world.

As you can imagine, Republicans are having some fun with this issue. Mitt Romney was subjected to a lot of class warfare demagoguery during the 2012 campaign because he had invested some of his wealth in a Cayman fund. GOPers are now hoisting Lew on a petard and grilling him about the obvious hypocrisy of a "progressive" utilizing---both personally and professionally---a jurisdiction that commits the unforgivable crime of not imposing income tax.

In a sensible world, Lew would be able to say what everyone in the financial world already understands: the Cayman Islands are an excellent, fully legal, tax-neutral platform for investment funds because 1) there's no added layer of tax, 2) there's good rule of law, and, 3) foreigners can invest in the American economy without creating any nexus with the IRS. But we don't live in a sensible world, so Lew instead wants us to believe he didn't realize that the funds were domiciled in Cayman.

I guess all the other wealthy progressives with offshore-based investments were probably also unaware, right?

Anyhow, I'm taking a glass-half-full perspective on this kerfuffle since it gives me an opportunity to educate more people on why tax havens are a liberalizing and positive force in the global economy.

And what of Lew as treasury secretary? As I explained for Real News, he's competent but misguided.

In other words, the chances of any good tax reform in the next four years are asymptotically approaching zero. Based on his background (and also based on the views of the president he'll be serving), it's virtually impossible to envision good entitlement reform, pro-growth tax reform, or any changes to fiscal policy that would lessen the likelihood of future Greek-style fiscal collapse (as amusingly illustrated by this cartoon).

So with any luck, they'll be some tax havens around the world that the rest of us can utilize when that day of reckoning occurs.

February 15, 2013 9:43AM

With All Due Respect, Mr. President, That Is Not True

Conor Friedersdorf notes that stay-at-home mom (and video blogger) Kira Davis asked tougher questions of President Obama on a recent Google+ "hangout" than Steve Kroft of 60 Minutes ever asked. You can watch the exchange in this video starting at the 35:10 mark.

In response to Davis's question about transparency, President Obama said:

This is the most transparent administration in history, and I can document how that is the case. Everything from---every visitor that comes into the White House is now part of the public record. That's something that we changed. Just about every law that we pass, every rule that we implement, we put online for everybody there to see.

With all due respect, Mr. President, that is not true.

Now, the White House has put visitor logs online. I was initially unimpressed with the achievement, but I do believe it took a good deal of effort, and there's no discounting that. Perhaps it symbolizes how low the baseline for transparency has been. And alas the practice may have simply moved meetings out of the White House.

But it is not accurate to say, "Just about every law that we pass ... we put online for everybody to see there."

As a campaigner, President Obama promised to put every bill Congress sent him online for five days before signing it. As I recently reported again in a post called "Sunlight Before Signing in Obama's First Term," that was the president’s first broken promise, and in the first year of his administration he broke it again with almost every new law, giving just six of the first 124 bills he signed the exposure he promised. Over his first term, by my count, he gave less than 2/3rds of the bills he signed the promised sunlight.

And many important and controversial bills don't get sunlight. (The post office renamings always do.) Recent bills denied promised sunlight include the controversial FISA Amendments Act Reauthorization and the “fiscal cliff” bill. Obamacare did not get sunlight---the president signed it the day after Congress presented it to him.

The first three laws President Obama has signed in the 113th Congress have not gotten the promised sunlight.

The Obama administration has taken some small pro-transparency steps, but far from what's possible, and the House of Representatives is making the greater headway on transparency. President Obama has not put "just about" every bill sent him online. So, in the words of a stellar think tank here in D.C., "With all due respect, Mr. President, that is not true."

February 14, 2013 5:17PM

How Does Immigration Impact Wages?

Many Americans are curious about the impact of immigration on the wages of other Americans.  The best research on this focuses on the period between 1990 and 2006, when almost 17 million people immigrated to the U.S. lawfully and a net 12 million came unlawfully.  The first major study is by Borjas and Katz (B&K) and the second is by Ottaviano and Peri (O&P).  O&P borrowed much of B&K’s methodology.  Here are the long run findings:

Media Name: 201302_blog_alex141.jpg

B&K draw a more negative conclusion than O&P.  The main differences are that O&P assume capital adjusts quicker to increased labor abundance and immigrants are more complementary.  B&K’s paper reflects their assumptions about native-immigrant substitutability.  Since immigrants are more likely to have less than a high school degree and more likely to have a graduate or professional degree than natives, B&K’s model assumes natives in those categories are competing with immigrants for jobs and therefore experience wage declines. 

Both O&P and B&K found that increased immigration has a larger affect on immigrants than natives.  Depending on their level of education, longer settled immigrants experience greater wage declines and smaller wage gains from more recent immigration compared to natives:

Media Name: 201302_blog_alex142.jpg

Both sets of authors rightly assume that more recent waves of immigrants are most similar to immigrants from older waves, making the two arrival cohorts of immigrants substitutes in the workplace.  Recent papers by Ethan Lewis and Giovanni Peri and Sparber make convincing argument that language ability of recent immigrants makes them more similar and, thus, substitutable with previous waves of immigrants.  Language ability also makes immigrants complements to natives, partly explaining why O&P and B&K found wage increases for so many American workers as a result of immigration.

Here is a comparison of the long run wages effects on immigrants and natives from the O&P and B&K study:

Media Name: 201302_blog_alex143.jpg

These charts merely explain the results of previous waves of immigration on the American labor market.  If immigration increases in the future these numbers will likely be different but the past is always a useful guide for anticipating the effects of future policy changes.


Bibliography:

Borjas, George, “The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market.”

Borjas, George and Lawrence Katz, “The Evolution of the Mexican-Born Workforce in the United States.”

Ottaviano, Gianmarco and Giovanni Peri, “Immigration and National Wages: Clarifying the Theory and the Empirics.”

Peri, Giovanni and Chard Sparber, “Task Specialization, Immigration, and Wages.”

Lewis, Ethan, “Immigrant-Native Substitutability: The Role of Language Ability.”  
February 14, 2013 3:25PM

Happy Birthday, Frederick Douglass!

A former slave, Frederick Douglass did not know his actual birthday. His mother, also a slave, called him "my little Valentine" on her occasional visits to see her child. She traveled miles, usually at night, to spend just a few minutes with her son. Douglass chose February 14 to mark his birth.

Here is Cato adjunct Robert McDonald detailing the life of one of liberty's greatest champions.

Here's text based on MacDonald's speech and more from Libertarianism.org on Frederick Douglass's story and his impact on the rights of women and the libertarian tradition. Most importantly, here are three short essays by Douglass worthy of your consideration.