December 2015

December 11, 2015 5:02PM

CAP Study on Federal Land Issues

The federal government owns more than one quarter of the land in the nation, about 640 million acres. The holdings are concentrated in the West, where it owns about half of the 11 westernmost states.

The policy issues surrounding federal land are complex, but there is a good argument that much of the land would be better managed, and would generate more value for Americans, if it was transferred to state governments and the private sector. There is a movement in the West to gain more local control over federal lands because the economic and environmental decisions made in faraway Washington often do no reflect local needs. Randy O’Toole and I wrote about some of these issues here.

Read the rest of this post »
December 11, 2015 12:46PM

The Solution to Congestion

It is distressing, at least to economists, how many problems could be solved by adopting basic free-market principles, yet those solutions are ignored or stridently opposed by the very people who would benefit from them. California's drought is one of those: California actually has plenty of water, it is just poorly priced.

An even more pervasive problem is traffic congestion, which (according to the Texas Transportation Institute) wasted more than 3 billion gallons of fuel and nearly 7 billion hours of people's time for a total cost of $160 billion in 2014. Brookings economist Anthony Downs wrote a whole book about congestion that concluded there was no solution to the problem--except, he noted almost parenthetically, congestion pricing which Downs decided was politically impossible. Of course, that's a self-fulfilling prophecy because if no one argues for something because it's impossible, it will truly be impossible.

Read the rest of this post »
December 11, 2015 10:21AM

“Isolationist” Is a Compliment Coming from Marco Rubio

After claiming a special expertise in foreign policy, GOP presidential wannabe Marco Rubio finds himself under fire because of his neoconservative tendencies. He’s responded in the usual way for someone whose policies would keep America perpetually at war: accuse his critics of being “isolationists.”

Trying to defend his record of supporting such disastrous misadventures as Iraq and Libya, he denounced unnamed foes who sought “to derail the postwar consensus about America’s role in the world.” This outrageous yet anonymous “they,” he added, “will never call themselves isolationists, but that is exactly what they are.”

Against Ted Cruz, the likely intended target, the claim obviously is nonsense. After all, Cruz recently proposed carpet-bombing the Islamic State.

What Rubio unintentionally illustrated was the fact that “isolationist” today has been stripped of almost all meaning to become an all-purpose epithet. Indeed, if “isolationist” means anything today, it simply is “you don’t want to intervene where I want to intervene.”

Read the rest of this post »
December 11, 2015 10:19AM

Quantitative Easing: A Requiem

By Tom Clougherty

When the Federal Open Market Committee (FOMC) meets in Washington next week, its members are widely expected to vote to raise interest rates for the first time since June 2006.  By doing so, they will move towards monetary policy normalization, after more than seven years of near-zero interest rates, and a vast expansion of the central bank’s balance sheet.

But how did monetary policy become so abnormal in the first place?  Were the Fed’s unconventional monetary policies a success?  And how smoothly will implementation of the Fed’s so-called “exit strategy” go?  These are among the questions addressed by Dan Thornton, a former vice president of the Federal Reserve Bank of St. Louis, in “Requiem for QE,” the latest Policy Analysis from Cato’s Center for Monetary and Financial Alternatives.

Read the rest of this post »
December 11, 2015 10:13AM

What Is Real REAL ID Compliance?

This fall, the Department of Homeland Security and its pro-national ID allies staged a push to move more states toward complying with REAL ID, the U.S. national ID law. The public agitation effort was so successful that passport offices in New Mexico were swamped with people fearing their drivers' licenses would be invalid for federal purposes. A DHS official had to backtrack on a widely reported January 2016 deadline for state compliance.

DHS continues to imply that all but a few holdout states stand in the way of nationwide REAL ID compliance. The suggestion is that residents of recalcitrant jurisdictions will be hung out to dry soon, when the Transportation Security Administration starts turning away travelers who arrive at its airport checkpoints with IDs from non-compliant states.

Read the rest of this post »
December 10, 2015 1:57PM

It’s the Heritage Individual Mandate Debate All Over Again

A group of prominent conservatives recently released an ObamaCare replacement plan that would replicate many of that law’s worst features. As I explain in a new post at Darwin’s Fool, conservatives need to examine this proposal closely against the alternative. An excerpt:

If you’re a conservative and you’re reading this, chances are good you have a gun to your headConservatives are so averse to health policyNational Review‘s Ramesh Ponnuru once quipped that “Republicans will do anything to repeal ObamaCare–except think about health care.” This is no small problem. Indeed, it is how we got ObamaCare in the first place: conservative neglect enabled a raft of very un‐​conservative health care ideas to germinate at the Heritage Foundation for a decade and a half. By the time Democrats picked up those ideas and ran with them in 2009, it was too late. Conservatives were powerless to stop them.

Conservatives may indeed be just one election away from repealing ObamaCare, which is all to the good. But some conservatives have proposed replacing ObamaCare with refundable tax credits for health‐​insurance. Tax credits are ObamaCare‐​lite. They would cement in place many of ObamaCare’s worst features, and replicate its awful results. If those features acquire a bipartisan imprimatur, we will never in our lifetimes be rid of them. Unless conservatives give tax credits the scrutiny they should have applied to the Heritage Foundation plan in the 1990s, they will make the same mistake all over again.

Conservatives don’t have to repeat history. A better set of reforms offers a clear path toward a market system, and away from ObamaCare, by building on the bedrock conservative idea of health savings accounts (HSAs). “Large” HSAs would deliver better, more affordable, and more secure health care, particularly for the most vulnerable. At the same time, Large HSAs would give workers a larger effective tax cut than all the Reagan and Bush tax cuts combined, and nine times larger than repealing ObamaCare.

Read the whole thing.

December 10, 2015 12:10PM

No, It Is Not 1938

The other night, Fox News host Bill O’Reilly again insisted that ISIS poses a dire threat to the United States.  On this occasion, though, O’Reilly surpassed the shrill warnings of his ideological colleagues, insisting that the situation was the same as the nation faced in 1938 with the rise of Nazi Germany and its fascist allies.  

It is a preposterous comparison.  In 1938, three of the top seven world powers were governed by fascist regimes and were linked together in the Tripartite Alliance.  Those three countries, Germany, Italy, and Japan, were all modern, powerful nation states, with large, productive economies.  They also were able to field several million ground troops backed by extremely capable air and naval forces.  Together, those countries posed a credible threat not only to American security but to the entire global balance of power.

The resources ISIS can draw upon are puny by comparison.  The movement controls a very limited territory, the shaky “caliphate” in western Iraq and eastern Syria, and that redoubt is nearly surrounded by hostile regional forces—Iran and its Shiite allies in Iraq, the Kurds, and the Alawite-led government in Syria.  The correlation of forces was not favorable to ISIS even before Russia added its considerable military weight to the anti-ISIS coalition.

The closest historical model to the ISIS threat is not the menace that the fascist powers posed in the late 1930s, but the far more limited one that radical anarchists mounted in the last half of the nineteenth century.  Akil N. Awan, Associate Professor in Modern History, Political Violence and Terrorism at the University of London, ably shows the similarities in a recent article in National Interest Online.

Awan points out that anarchists were responsible for an alarming series of mass shootings, bombings, and high-profile assassinations. An 1893 attack on the opera house in Barcelona, Spain, which killed 22 people and wounded another 35, was eerily similar to the recent incident in Paris.  In a period of less than five decades, anarchists assassinated two U.S. presidents, a Russian czar, an Austria-Hungarian empress, an Italian president, a French president, an Italian king, and two Spanish prime ministers.  And as in our own era, there was a growing atmosphere of panic, with calls for drastic measures that would do lasting damage to fundamental civil liberties.

Read the rest of this post »