Archives: 04/2013

Iran’s Inflation Statistics: Lies, Lies and Mehr Lies

The Mehr News Agency is now reporting that Iran’s annual inflation rate has reached 31.5%. According to the Central Bank’s official line, Iran’s annual inflation rate has bumped up only 1.3 percentage points from February to March.

Never mind that this official inflation statistic is well below all serious estimates of Iran’s inflation. And yes, Iran’s official inflation statistics are also contradicted by the overwhelming body of anecdotal reports in the financial press.

Since September 2012, I have been estimating Iran’s inflation rate – which briefly reached hyperinflation levels in October 2012 – using a standard, widely-accepted methodology. By measuring changes in the rial’s black-market (read: free-market) U.S. dollar exchange rate, it is possible to calculate an implied inflation rate for Iran.

When we do so, a much different picture of Iran’s inflation emerges. Indeed, Iran’s annual inflation rate is actually 82.5% – a rate more than double the official rate of 31.5% (see the accompanying chart).

As I have documented, regimes in countries undergoing severe inflation have a long history of hiding the true extent of their inflationary woes. In many cases, the regimes resort to underreporting or simply fabricating statistics to hide their economic problems. And, in some cases, such as Zimbabwe and North Korea, the government simply stops reporting economic data altogether.

Iran has followed a familiar path, failing to report inflation data in a timely and replicable manner. Those data that are reported by Iran’s Central Bank tend to possess what I’ve described as an “Alice in Wonderland” quality and should be taken with a grain of salt.

A Wisconsin Judicial Race With National Implications

Unions and other opponents tried almost everything in their efforts to derail Act 10, Gov. Scott Walker’s package of public-sector labor-law reforms in Wisconsin. They fought vainly in the Wisconsin legislature, in the courts, and in public discussion. They staged tumultuous, disruptive Occupy-style demonstrations and sit-ins in Madison.  Most formidable of all, they even changed their Facebook and Twitter avatars to little clenched fists in the shape of the state of Wisconsin. 

All to no avail. On Tuesday they lost what will probably turn out to be their last chance, in the form of a race for a seat on the Wisconsin Supreme Court. That court is deeply split 4-3 along ideological lines, with a liberal minority led by Chief Justice Shirley Abrahamson considered eager to overturn the Walker reforms, and a majority of 4 led by Justice David Prosser seen as disinclined to do so. With Act 10 due to come before the court soon, one of the four-justice majority, Justice Patience Roggensack, was up for re-election and her rival on the ballot, Democratic-backed Marquette law professor Ed Fallone, was widely seen as more likely to search for some way to strike down the law, on which he might be the deciding vote.

Wisconsin voters weren’t having that: by a very comfortable margin (at last count) of 57-43 they re-elected Justice Roggensack. Incumbent judges do tend to win re-election at the polls, of course, and many voters may simply be tired of all the partisan bickering and politicization of the courts. Either way, it looks as if they are willing to give Act 10 a fair chance to work as intended. Public-sector labor law reformers in other states, take note. 

Look at No Child Left Behind. See, No Federal Control. Wait…

In what is either a case of blinders-wearing or just poor timing, today the Fordham Institute’s Kathleen Porter-Magee has an article on NRO, co-written with the Manhattan Institute’s Sol Stern, in which she and Stern take to task national curriculum standards critics who assert, among other things, that the Common Core is being pushed by President Obama. Yes, that’s the same Kathleen Porter-Magee whom it was announced a couple of days ago would be on a federal “technical review” panel to evaluate federally funded tests that go with the Common Core.

The ironic timing of the article alone is probably sufficient to rebut arguments suggesting that the Common Core isn’t very much a federal child. Still, let’s take apart a few of the specifics Porter-Magee and Stern offer on the federal aspect. (Other Core critics, I believe, will be addressing contentions about Common Core content).

Some argue that states were coerced into adopting Common Core by the Obama administration as a requirement for applying for its Race to the Top grant competition (and No Child Left Behind waiver program). But the administration has stated that adoption of “college and career readiness standards” doesn’t necessarily mean adoption of Common Core. At least a handful of states had K–12 content standards that were equally good, and the administration would have been hard-pressed to argue otherwise.

Ah, the power of parsing. While it is technically correct that in the Race to the Top regulations the administration did not write that states must specifically adopt the Common Core, it required that states adopt a “common set of K-12 standards,” and defined that as “a set of content standards that define what students must know and be able to do and that are substantially identical across all States in a consortium.” How many consortia met that definition at the time of RTTT? Aside, perhaps, from the New England Common Assessment Program, only one: the Common Core.

Eleventh Circuit Overturns Department of Labor’s Claim of Authority As “Absurd”

The U.S. Department of Labor claimed the authority to issue rules governing the H-2B guest worker program on the grounds that the underlying statute provides for it to be consulted as part of the program’s administration. On Monday, the Eleventh Circuit U.S. Court of Appeals curtly rebuffed this “absurd” claim. From its opinion:

In its proposed and final rules, DOL cited two statutory provisions as the source of its rulemaking authority. First, DOL cited 8 U.S.C. § 1184(c)(1), which instructs the Secretary of DHS to consult with the “appropriate agencies of the Government” in resolving whether to grant a foreign worker a visa upon the “petition of the importing employer.” Although there is no grant of rulemaking authority to DOL in this statutory section, DOL asserts that as the result of the permission it grants to DHS to consult with it, DOL “has authority to issue legislative rules to structure its consultation with DHS.” The end result, in DOL’s view, is that it is empowered to engage in rulemaking, even without the DHS.

We reject this interpretation of “consultation.” Under this theory of consultation, any federal employee with whom the Secretary of DHS deigns to consult would then have the “authority to issue legislative rules to structure [his] consultation with DHS.” This is an absurd reading of the statute and we decline to adopt it.

Meanwhile, today’s Washington Post reports that the Obama Administration is anxious to get more of its appointees confirmed to the D.C. Circuit, which hears more regulatory appeals than any other, on the grounds that the current roster of judges on the circuit too frequently strikes down the administration’s regulations as exceeding the federal government’s authority.  Perhaps the administration would not have to worry about seeing so many of its regulations struck down if it took care not to ground them on claims of authority that are “absurd.”

Joke Continues, But…

Yesterday, I wrote about a new “technical review process” the Feds have created to scrutinize “item design and validation” for national tests that go with new national curriculum standards. In that post, while noting that “in-depth” information on the review process was as-yet unavailable, I wrote that creation of the process “most likely” means federal reviewers will be “reviewing the specific questions that will go on the tests” [emphasis in the original]. I have since been cautioned by Ted Rebarber, CEO of Accountability Works and an expert on standards and testing, against making too firm a statement on this. While it is possible the review will consider test questions, it’s also quite possible the process will only examine the methodologies the consortia have employed to create and validate their measures.

Rebarber is no doubt correct about the potentially limited scope of the review, and right to caution against overstating what it might involve. That said, with very limited information available, it is hard to know what the review will ultimately encompass. But assume it doesn’t examine actual questions at all. Still, it will have the money-supplying federal government judging the technical merits of something that we are incessantly told only nutty people would think could become federally controlled. In other words, my main point – and root concern – remains: The technical review is yet more evidence substantiating the incredibly sane concern that “national standards” will ultimately mean “federal control.” It’s a very real possibility that, it seems, many Common Core fans just don’t want you thinking about.


The Making of a Japanese Ambassador

The Washington Post keeps telling us that the Japanese will love Caroline Kennedy as an ambassador, because they appreciate the honor of our sending an ambassador of vast experience and respect. As Jason Horowitz put it:

Diplomatic sources said that the Japanese tend to be flattered when the American ambassador is a person of great renown, because it confirms their importance to the United States. Past ambassadors to Japan have included former Senate majority leaders Mike Mansfield and Howard Baker, former vice president Walter F. Mondale, and former House speaker Tom Foley.

Well, let’s see. Each one of those ambassadors had previously served more than 20 years in high public office. Caroline Kennedy is the daughter of a president and a major supporter of the incumbent president’s first campaign. I suspect the Japanese are thinking this week, “One of these things is not like the others.”

U.S. Can’t Use Supreme Court’s Property Rights Ruling to Rewrite Takings Law

The Supreme Court ruled in December that a taking occurs when a government action gives rise to “a direct and immediate interference with the enjoyment and use of land,” thus allowing the Arkansas Game & Fish Commission to proceed with claims relating to the damage caused by government-induced flooding of a state wildlife management area. (The lower court had bizarrely held that while temporary physical invasions and permanent floods were subject to takings analysis, temporary flooding, even if repeated, was not.  For more background and links to Cato’s amicus briefs before the Supreme Court, see Roger Pilon’s commentary.)

On remand to the U.S. Court of Appeals for the Federal Circuit, however, the United States, relying on a single passage from the opinion, contends that the Supreme Court created a new multi-factor test applicable to all regulatory and temporary physical takings claims. Cato has now joined the Pacific Legal Foundation, National Federation of Independent Business, and National Association of Home Builders on a brief supporting the Commission and arguing that the passage upon which the government relies is both non-binding (“dicta” in legal terms) and in any event cannot be read to upset the distinction between regulatory and physical takings that the Court has consistently asserted.

It is well established in the Supreme Court’s takings jurisprudence that government intrusions on private property that permanently deprive the owner of a valuable property interest are to be subjected to the same test, regardless of whether the invasions are permanent or temporary. Under that test, courts are to consider the duration of the government intrusion, along with other information, to determine (1) whether the invasion is the direct cause of injury to the property and (2) whether the injury is substantial enough to subtract from the owner’s full enjoyment of the property and limit his exploitation thereof. If the injury to the property is substantial, it doesn’t matter whether the it was caused by an invasion of limited duration; once it is shown that the government invasion directly and substantially interfered with an owner’s property right, the government has a categorical duty to pay compensation.

In this case, the government’s intrusion permanently damaged significant property — valuable timber, from the destruction of trees — and is thus a compensable taking. The Supreme Court’s decision in Arkansas Game & Fish Commission didn’t modify or overturn the well-settled test for adjudicating physical takings claims, which remains distinct from the test that controls regulatory takings claims.

The Federal Circuit will hear argument in the case later this spring.