Obama Considering Another Round of Stimulus
With unemployment continuing to climb and the economy struggling along, some lawmakers and pundits are raising the possibility of a second stimulus package at some point in the future. The Cato Institute was strongly opposed to the $787 billion package passed earlier this year, and would oppose additional stimulus packages on the same grounds.
"Once government expands beyond the level of providing core public goods such as the rule of law, there tends to be an inverse relationship between the size of government and economic growth," argues Cato scholar Daniel J. Mitchell. "Doing more of a bad thing is not a recipe for growth."
Mitchell narrated a video in January that punctures the myth that bigger government “stimulates” the economy. In short, the stimulus, and all big-spending programs are good for government, but will have negative effects on the economy.
Writing in Forbes, Cato scholar Alan Reynolds weighs in on the failures of stimulus packages at home and abroad:
In reality, the so-called stimulus package was actually just a deferred tax increase of $787 billion plus interest.
Whether we are talking about India, Japan or the U.S., all such unaffordable spending packages have repeatedly been shown to be effective only in severely depressing the value of stocks and bonds (private wealth). To call that result a "stimulus" is semantic double talk, and would be merely silly were it not so dangerous.
In case you’re keeping score, Cato scholars have opposed government spending to boost the economy without regard to the party in power.
For more of Cato’s research on government spending, visit Cato.org/FiscalReality.
Sarah Palin Resigns as Governor of Alaska
Alaska Governor Sarah Palin resigned from office last week with 18 months left in her term, setting off weeklong speculation by pundits.
Cato Vice President Gene Healy comments:
Palin's future remains uncertain, but it's hard to see how her cryptic and poorly drafted resignation speech positions her for a presidential run. Nonetheless, her departure presents a good opportunity to reflect on the Right's affinity for presidential contenders who - how to put this? - don't exactly overwhelm you with their intellectual depth.
It's one thing to reject liberal elitism. It's another thing to become so consumed with annoying liberals that you cleave to anyone they mock, and make presidential virtues out of shallow policy knowledge and lack of intellectual curiosity.
Writing at Politico, Cato scholars David Boaz and Roger Pilon weigh in on what her resignation means for the former Vice-Presidential candidate’s political future:
Will we one day say that her presidency was ‘born on the Fourth of July’? I doubt it. This appears to be just the latest evidence that Sarah Palin is not ready for prime time. The day McCain chose her, I compared her unfavorably to Mark Sanford. Despite everything, I'd still stand by that analysis. At the time I noted that devout conservative Ramesh Ponnuru said ‘Palin has been governor for about two minutes.’ Now it's three minutes.
Running for president after a single term as governor is a gamble. Running after quitting in the middle of your first term is something else again. If this is indeed a political move to clear the decks for a national campaign, then she needs adult supervision soon. But I can't really believe that's what's going on here. I suspect we're going to hear soon about a yet-unknown scandal that was about to make continuing in office untenable.
It seems that since her return to the state following the campaign, activist opponents and bloggers have bombarded the governor’s office with endless document requests. And she’s faced 16 ethics inquiries, with no end in sight. All but one have since been resolved, but the politics of personal destruction has cost the state millions, as Palin noted. Add to that the unrelenting, often vicious and gratuitous attacks on her and even on her family, and it’s no wonder that she would say ‘Enough.’ It has nothing to do with ‘quitting’ or with being ‘unable to take the heat.’ It has everything to do with stepping back and saying you’re not willing to put your family and your state through any more. She seems confident that history will judge her more thoughtless critics for what they are. I hope she’s right.
Honduras’ President Is Removed from Office
In reaction to Honduran President Manuel Zelaya’s attempt to stay in power despite term limits set by the nation’s Constitution, armed forces removed him, sending the Latin American nation into political turmoil.
Juan Carlos Hidalgo, an expert on Latin American affairs, comments:
The removal from office of Zelaya on Sunday by the armed forces is the result of his continuous attempts to promote a referendum that would allow for his reelection, a move that had been declared illegal by the Supreme Court and the Electoral Tribunal and condemned by the Honduran Congress and the attorney general. Unfortunately, the Honduran constitution does not provide an effective civilian mechanism for removing a president from office after repeated violations of the law, such as impeachment in the U.S. Constitution. Nonetheless, the armed forces acted under the order of the country’s Supreme Court, and the presidency has been promptly bestowed on the civilian figure — the president of Congress — specified by the constitution.
To be sure, Hidalgo writes, the military action in Honduras was not a coup:
What happened in Honduras on June 28 was not a military coup. It was the constitutional removal of a president who abused his powers and tried to subvert the country's democratic institutions in order to stay in office.
The extent to which this episode has been misreported is truly remarkable.
Numerous polls show that Americans want to reduce our military presence abroad, allowing our allies and other nations to assume greater responsibility both for their own defense and for enforcing security in their respective regions.
But why haven't we done so?
In his new book, The Power Problem, Christopher A. Preble contends that the vast military strength of the United States has induced policymakers in Washington to broaden the perception of the "national interest," and ultimately to commit ourselves to the impossible task of maintaining global order.
Preble holds that the core national interest — preserving American security — is easily defined and largely immutable. In his view, military power is purely instrumental: if it advances U.S. security, then it is fulfilling its essential role.
Preble spoke at Cato about what we views as the proper role of the United States in the world.
Today marks the 20th anniversary of the massacre of students and other anti-authoritarian protests in Tiananmen square.
If you want background info, including causes and the wider political context, check Wikipedia.
You can also see stirring videos on Youtube.
There are incredible photos on Flickr.
And of course Twitter has a wealth of real-time information and thinking about the anniversary. Just search using the hash tag #Tiananmen.
But for those 1.5 billion people trapped behind the Great Firewall of China, absolutely none of those links are accessible. To mark the event that the government assures never happened, the Chinese government has blocked most social networking sites.
In 1989, when a nascent pro-democracy movement wanted to communicate its vitality and prepare to take on the state, meeting en masse was vital. But that made it fairly easy for the CCP to roll in and crush the dream of democracy.
Twenty years later, the Internet is the place where mass movements for liberty can take root. While the CCP is attempting to use the electronic equivalent of an armored division to prevent change, reform today is a question of when, not if. Shutting down open dialogue will only slow the democratic transition to freedom, which the Chinese government cannot ultimately prevent.
The leadership of today's Chinese government should allow that country's citizens and journalists to communicate openly. The alternative is to suffer eternal loss of face as history records them occupying its wrong side.
Obama Picks Sotomayor for Supreme Court
President Obama chose federal Judge Sonia Sotomayor on Tuesday as his nominee for the U.S. Supreme Court, the first Hispanic Latina to serve on the bench.
On Cato’s blog, constitutional law scholar Roger Pilon wrote, “President Obama chose the most radical of all the frequently mentioned candidates before him.”
Cato Supreme Court Review editor and senior fellow Ilya Shapiro weighed in, saying, "In picking Sonia Sotomayor, President Obama has confirmed that identity politics matter to him more than merit. While Judge Sotomayor exemplifies the American Dream, she would not have even been on the short list if she were not Hispanic."
Shapiro expands his claim that Sotomayor was not chosen based on merit at CNN.com:
In over 10 years on the Second Circuit, she has not issued any important decisions or made a name for herself as a legal scholar or particularly respected jurist. In picking a case to highlight during his introduction of the nominee, President Obama had to go back to her days as a trial judge and a technical ruling that ended the 1994-95 baseball strike.
Pilon led a live-chat on The Politico’s Web site, answering questions from readers about Sotomayor’s record and history.
And at The Wall Street Journal, Cato senior fellow John Hasnas asks whether "compassion and empathy" are really characteristics we want in a judge:
Paraphrasing Bastiat, if the difference between the bad judge and the good judge is that the bad judge focuses on the visible effects of his or her decisions while the good judge takes into account both the effects that can be seen and those that are unseen, then the compassionate, empathetic judge is very likely to be a bad judge. For this reason, let us hope that Judge Sotomayor proves to be a disappointment to her sponsor.
North Korea Tests Nukes
The Washington Post reports, “North Korea reportedly fired two more short-range missiles into waters off its east coast Tuesday, undeterred by the strong international condemnation that followed its detonation of a nuclear device and test-firing of three missiles a day earlier.”
Writing in the National Interest online, Cato scholar Doug Bandow discusses how the United States should react:
Washington has few options. The U.S. military could flatten every building in the Democratic People's Republic of Korea (DPRK), but even a short war would be a humanitarian catastrophe and likely would wreck Seoul, South Korea's industrial and political heart. America's top objective should be to avoid, not trigger, a conflict. Today's North Korean regime seems bound to disappear eventually. Better to wait it out, if possible.
On Cato’s blog, Bandow expands on his analysis on the best way to handle North Korea:
The U.S. should not reward “Dear Leader” Kim Jong-Il with a plethora of statements beseeching the regime to cooperate and threatening dire consequences for its bad behavior. Rather, the Obama administration should explain, perhaps through China, that the U.S. is interested in forging a more positive relationship with [the] North, but that no improvement will be possible so long as North Korea acts provocatively. Washington should encourage South Korea and Japan to take a similar stance.
Moreover, the U.S. should step back and suggest that China, Seoul, and Tokyo take the lead in dealing with Pyongyang. North Korea’s activities more threaten its neighbors than America. Even Beijing, the North’s long-time ally, long ago lost patience with Kim’s belligerent behavior and might be willing to support tougher sanctions.
Cato Media Quick Hits
Here are a few highlights of Cato media appearances now up on Cato's YouTube channel:
- Ted Galen Carpenter discuss the North Korean missile tests on WOR radio.
- On Fox News, Chris Edwards disputes the idea of a federal sales tax.
- Gene Healy comments on the future of Guantanamo detainees on BBC.
- On CNBC, Dan Mitchell explains why California is like the “France of America.”
- In Friday's Cato Daily Podcast, John Samples discusses how at least three presidents used the Fairness Doctrine to squelch dissenting speech.
During the campaign, President Obama asserted that tax havens "cost" the Treasury $100 billion per year (see, for instance, 8:07 of this video), echoing the assertions made by demagogues such as Michigan's Democratic Senator, Carl Levin. Many gullible journalists proceeded to disseminate this number, even though I repeatedly warned that it was a blatant fabrication. Indeed, it was the first falsehood that I punctured in my video entitled, Tax Havens: Myths vs Facts.
So it was with considerable interest that I read about the recent testimony of IRS Commissioner, Douglas Shulman, who acknowledged that the Obama-Levin numbers are "wild estimates" that "don't have much basis." Here is the key passage from a report from Bloomberg:
Internal Revenue Service Commissioner Douglas Shulman said projections that the US loses $US100 billion annually to offshore tax havens are "wild estimates" that "don't have much basis". ..."Those numbers are pretty broad numbers," Shulman said. The $US100 billion figure, a compilation of private-sector estimates, is often cited by Michigan Senator Carl Levin... North Dakota Senator Byron Dorgan also frequently cites the $US100 billion figure.
This, of course, raises an interesting question. If politicians are willing to use dishonest numbers to push a certain policy, what does that suggest about the merits of the policy?