Topic: Government and Politics

The Way We Were

Conservatives and even libertarians often view history through the prism of “the road to serfdom,” believing that there was some golden age of liberty in the past that is progressively being eroded. Two recent articles remind us of some of the problems with that thesis.

An obituary in today’s Washington Post told of what happened to American-born May Asaki and her family after the outbreak of war between the United States and her parents’ home country of Japan:

On May 8, 1942 – May Asaki’s 23rd birthday – she and her family were loaded into the back of an Army truck and sent to a detention center. They were allotted one suitcase each.

May, who was the second oldest of 11 children, spoke only rudimentary Japanese and had known no home but California. Her older brother volunteered for the Army the day after Pearl Harbor, but his patriotism didn’t help her family. U.S. authorities considered Americans of Japanese descent to be potential enemies during World War II, and the Asaki family eventually ended up at an internment camp in a snake-infested swamp in Arkansas. Within six months, May’s mother was dead at 48.

“My older brother was serving in the U.S. Army while our family was incarcerated as criminals,” May wrote in her memoir, “the stress of which was too great for our mother to bear.”

The only good thing to be said for May’s two years of captivity was that she met Paul Ishimoto, whom she married in April 1944. Three months later, when their internment camp was closed, they moved to Washington. The federal government gave them $25 apiece to start a new life.

We can only hope that census data will never again be used to round up American citizens and imprison them on the basis of their race. Meanwhile, at the Independent Gay Forum, David Link writes about a historian who was frustrated in trying to find stories in the Los Angeles Times archives about homosexuality in L.A. during the mid-20th century. His searches kept coming up empty. Had they simply never covered such stories?

Then he realized that he was searching for words and phrases he was used to using: “homosexual” and “gay” and “sexual orientation.”  But those were not the words journalists would have used prior to our own time.

Try it for yourself.  If you have access to any database of news stories up to about the 1960s, see how many articles you can find about homosexuality using the words you know to describe sexual orientation.

Than try using these: “deviant;” “degenerate;” “pervert.”

That is the way homosexuality was both understood and reported (when it was reported at all) in days gone by.

Those are the words, and the preconceptions, that would have been dominant, if not exclusive in the minds of the single demographic we can most reliably count on to vote against us today – seniors.  Those who grew up in the 1930s and 40s and 50s would have, first, avoided any possible discussion of such an unpleasant and impolite subject as homosexuality.  That is how the closet – the don’t ask, don’t tell of its day – accommodated the times.

But denial on such a wide scale has to begin fraying at the edges.  And when homosexuality did come up, as Chauncey so vividly described – in criminal trials, bar raids, and mass arrests – the reporting had a condemnatory force built-in.  The police arrested a dozen sexual perverts; a high-profile degenerate was found in a love nest; a bar owner lost his license because his business catered to deviants.

Taxes may have been lower in the 1950s (though come to think of it, the marginal rate was 91 percent). Regulation may been less burdensome (except for the New Deal-derived microregulation of finance, transportation, and communications). The labor market may have been freer (unless you got drafted into the armed services, like Elvis and millions of other young men). But stories like this remind us of how many people were excluded from the promises of the Declaration of Independence – the inalienable rights of life, liberty, and the pursuit of happiness – throughout American history. Liberalism has always campaigned for a society of merit, not of status. That meant in the first place the dismantling of the privileges of nobility and aristocracy. Over the centuries it has also meant extending liberty and equality to people of other races and creeds, to women, to Jews, to gays and lesbians. And current historical trends are certainly more complicated than worries about a road to serfdom, or nostalgia for “the world we have lost.”

Growing Support for Smaller Government

A new Washington Post-ABC News poll finds that respondents favor “smaller government with fewer services” over “larger government with more services” by 58 to 38 percent. Reporter Dan Balz notes:

The poll also shows how much ground Obama has lost during his first year of trying to convince the public that more government is the answer to the country’s problems. By 58 percent to 38 percent, Americans said they prefer smaller government and fewer services to larger government with more services. Since he won the Democratic nomination in June 2008, the margin between those favoring smaller over larger government has moved in Post-ABC polls from five points to 20 points.

I’ve noted previously that

I’ve always thought the “smaller government” question is incomplete. It offers respondents a benefit of larger government – “more services” – but it doesn’t mention that the cost of “larger government with more services” is higher taxes. The question ought to give both the cost and the benefit for each option. A few years ago a Rasmussen poll did ask the question that way. The results were that 64 percent of voters said that they prefer smaller government with fewer services and lower taxes, while only 22 percent would rather see a more active government with more services and higher taxes. A similar poll around the same time, without the information on taxes, found a margin of 59 to 26 percent. So it’s reasonable to conclude that if you remind respondents that “more services” means higher taxes, the margin by which people prefer smaller government rises by about 9 points.

In fact, Rasmussen has continued to ask just that question, and found a month ago that voters preferred “smaller government with fewer services and lower taxes” by a margin of 66 to 22 percent. That’s a larger margin for the alternative wording than I had previously estimated. I know some people are skeptical of Rasmussen’s polling. (A Republican consulting firm recently found results very similar to the Rasmussen poll.) So I invite Gallup, Harris, the New York Times, the Washington Post, and other pollsters to ask this more balanced question and see what results they get.

Is Government Transparency Headed for a Detour?

With a year in office, and perhaps under some pressure to deliver on promises of transparency and change, the White House went on a little PR offensive this week. It rolled out a blog post and a video claiming the transparency successes of the administration’s first year. A lot has gone on, and it’s worth a review. It’s also worth noting some signals that the government transparency project could be heading for a slight detour.

In the video — a little infomercial-y, but tolerable and interesting — federal chief technology officer Aneesh Chopra cites several examples of government use of technology. A system called ISDS Distribute helps the government monitor flu outbreaks, for example, akin to Google.org’s Flu Trends. Chopra touted the benefits of machine readability and the Agriculture Department’s release of data about a thousand most commonly eaten foods. (I’m not sure if this is it, but if not it’s probably something similar. Someone like Mike could use it to build a site that is further along than 1996’s state-of-the-art.) And Chopra discussed the platforms they are building at apps.gov to help agencies draw on the participation and engagement of the public. Putting aside how these illustrate the federal government’s distended role, these are all fine things.

White House ethics counsel Norm Eisen cited the release of visitor records as “one of the big innovations in the White House” over the past year. (Good, yes. But “big”?) Eisen dodged the question about why health care negotiations are not on C-SPAN.

In response to a question about putting federal advisory committees online, Chopra told of a recent meeting of the President’s Council of Advisers for Science and Technology, which was telecast live on the web and archived.

Finally, Chopra touted the planned January 22nd roll-out of data feeds from every federal agency under a recent open government memorandum — three “high-value data sets” per agency. In working toward this, Chopra said, “the conversation is all about what would help you do what you do better.  How can we advance our shared goals of reducing disparities in health care, improving our commitment  to renewable energies, advancing our collective educational results?”

This language and some of the examples cited in the video cause me to worry that the transparency effort may be heading for a detour. Rather than substantive insight into government management, deliberations, and results, we might get a lot of data-oriented play-toys.

According to the memorandum:

High-value information is information that can be used to increase agency accountability and responsiveness; improve public knowledge of the agency and its operations; further the core mission of the agency; create economic opportunity; or respond to need and demand as identified through public consultation.

That’s a very broad definition. Without more restraint than that, public choice economics predicts that the agencies will choose the data feeds with the greatest likelihood of increasing their discretionary budgets or the least likelihood of shrinking them. That’s data that “further[s] the core mission of the agency” and not data that “increase[s] agency accountability and responsiveness.” It’s the Ag Department’s calorie counts, not the Ag Department’s check register.

The kind of substance the transparency community expects is well represented in a  report issued jointly by the Center for Democracy and Technology and OpentheGovernment.org in March of last year. It’s called “Show Us the Data: Most Wanted Federal Documents,” and it asks for access to important research and governmental process information with the capacity to generate real insights into government and its operations.

Interesting data that the agency has collected or produced may be just that — interesting — but the heart of the government transparency effort is getting information about the functioning of government. Once we have these core elements of transparency captured, other data are absolutely good to have. But let the starting point be the workings of agencies themselves.

To help focus agencies on releasing the data that is high-value for genuine government transparency, I plan to examine the three data-streams each agency releases and grade the agencies on whether their releases provide insight into agency management, deliberations, or results.

As I examine the agency’s data feeds, I’ll use their proximity to true government transparency to assign them a letter grade, awarding them three points for each feed that has to do with management, deliberation, or results. These numerical scores — 9, 6, 3, or 0 — I’ll translate into grades: A, B, C, or D. (Nobody fails when the criteria only came out a week in advance.) F is reserved for agencies that don’t produce feeds.

This rubric for rating the data that agencies release seems reasonably objective, and a decent measure of which agencies are really responding to the demand for transparency and change, and which are pushing interesting data out as a smokescreen against deeper insights and reform. Hopefully, this effort at focusing agencies on true high-value data will see some uptake among my colleagues in the transparency community (if I haven’t alienated them with my endless harping on President Obama’s Sunlight Before Signing promise). Watch this space for agency grades shortly after the release of the feeds.

Reforming Previous Reforms, ad Infinitum

In the forthcoming issue of Cato Policy Report, Jeffrey Friedman describes the cumulative effects of regulations that led to the 2008 financial collapse:

So deposit insurance begat bank-capital regulations. Initially these were blunderbuss rules that required banks to spend the same levels of capital on all their investments and loans, regardless of risk. In 1988 the Basel accords took a more discriminating approach, distinguishing among different categories of asset according to their riskiness — riskiness as perceived by the regulators. The American regulators decided in 2001 that mortgage-backed bonds were among the least risky assets, so they required much lower levels of capital for these securities than for every alternative investment but Treasurys. And in 2006, Basel II applied that erroneous judgment to the capital regulations governing most of the rest of the world’s banks. The whole sequence leading to the financial crisis began, in 1933, with deposit insurance…

Deposit insurance, hence capital minima, hence the Basel rules, might all have been a mistake founded on the New Deal legislators’ and regulators’ ignorance of the fact that panics like the ones that had just gripped America were the unintended effects of previous regulations.

Friedman is talking about financial and housing regulation. But I was reminded of them when I heard President Obama tell congressional Democrats, “Today we are on the doorstep of accomplishing something that Washington has been talking about since Teddy Roosevelt was President, and that is reforming health care and health insurance here in America.” And his formal speech to Congress in September: “I am not the first President to take up this cause, but I am determined to be the last.”

But of course we’ve been “reforming” health care ever since Teddy Roosevelt, and those reforms have brought us to our present difficulties. The Flexner Report 100 years ago reduced the supply of doctors and drove up the price. Wage and price controls during another Roosevelt era led to the system of employer-provided insurance, again driving up costs. Medicare and Medicaid poured more third-party payments into the system and added layers of government bureaucracy. HMOs and other cost-containment measures were a response to a problem created by the absence of normal consumer pressure. Then we got HIPAA, Kennedy-Kassebaum, the Mental Health Parity Act, state mandated-coverage laws, and the Medicare Prescription Drug Benefit.

And here we are today, with a health care system that everyone agrees needs reform. Maybe it’s time to recognize that we’re just piling new regulations on top of old regulations, like some compulsory Rube Goldberg device, and to try instead free markets, in which consumers pay for what they want from providers, insurance companies, managed care organizations, and other entities that compete for their business by seeking to provide better care at lower prices. Otherwise, we can be sure that Barack Obama won’t be the last president to stand before Congress and declare that our health insurance system needs reform. Indeed, we can bet that if he signs the current bill, he himself will be back before Congress in a year or two asking for reforms to reform the reforms that were intended to reform the previous reforms.

America vs. Europe

The blogosphere has been buzzing with a debate on whether America or Europe is more prosperous. A partial list of contestants includes Jim Manzi, Paul Krugman, Matt Welch, Megan McArdle, Matthew Yglesias,  and Tino (don’t know who he is, but his blog has lots of good info).

I’ve addressed this issue in the past, with detailed comparisons in my Cato study on the Nordic Model, as well as a paper for the Heritage Foundation looking at Fiscal Policy Lessons from Europe.

I’m frankly shocked when people claim Europe is as rich as the United States, for the simple reason that the data showing otherwise is so abundant. The following charts, both from presumably impeccable sources, should be more than enough to end the argument. The first one is from OECD data (see page 6), showing average individual consumption per capita. I compare America to the EU-15 (Western Europe), but then also add Norway and Switzerland to the mix to boost the European score.

The next bit of data comes from a Danish Finance Ministry study (see page 3), and it shows another measure of individual consumption per capita. Once again, I only look at Western Europe, as defined by the EU-15 plus Norway and Swtizerland. And I even include consumption financed by government transfers. Nonetheless, the gap between U.S. and European living standards is stunning.

The data for both these charts is from earlier this decade, but as this up-to-date OECD data on economic performance indicates, the United States certainly has not lost any ground relative to Western Europe in recent years. Last but not least, this post is not an attack on Western Europe, which is a very wealthy region by global standards. But the data certainly show that America is even richer. And since the biggest policy difference between the U.S. and Western Europe is the burden of government, this certainly suggests that the Bush-Obama policies of bigger government and more intervention may not be a path to more prosperity.

One final comment. Luxembourg is the one Western European nation that ranks above the United States according to both the OECD and the Danish Finance Ministry. If any statists want to suggest that we mimic Luxembourg’s tax haven policies, you can count on my support.

White House, Unions Reach Deal on Taxing Insurance Coverage

The Washington Post reports that the White House has reached a tentative agreement with labor leaders to tax high-cost health insurance policies.

What did you think of the negotiations? You did watch them on C-SPAN, didn’t you?

At the Sunlight Foundation blog, I’ve joined in some discussion about whether a president could really force process reforms on Congress like requiring negotiations to be televised. (Short answer: It’s possible, not probable.)

But here’s a case where the White House declined to put its own negotiations on television as the president promised.

Supreme Court Lets Eminent Domain Abuse Continue

Yesterday, the Supreme Court decided not take up an important takings case, the infelicitously titled 480.00 Acres of Land v. United States. As I blogged previously, Cato filed an amicus brief in the case in the hopes that the owner of the “480.00 Acres of Land,” Gil Fornatora, would ultimately receive the “just compensation” to which he is constitutionally entitled.  The Court also missed the chance to correct the pattern of due process abuse that is apparently rampant in Florida.  The case involved the federal government maneuvering to unjustly drive down property values before taking land for (legitimate) public use – in this case expanding the Everglades – thus greatly diminishing the compensation it was obligated to pay the owners.  Fox News recently had a report about the case, in which I briefly appeared.

Interestingly – and sadly – since the Fox News report, my voicemail and email inbox has been receiving story after story of individuals who have experienced injustices similar to that of Mr. Fornatora. While it is unfortunate that this case has come to an end, the number of calls and emails leads me to believe that more cases like this will be making their way through the federal judiciary and that, eventually, this abuse will be halted.

To that end, while Cato does not involve itself directly in litigation, on the subject of takings and eminent domain abuse I can certainly recommend our friends at the Institute for Justice and Pacific Legal Foundation.  Specifically on the type of “condemnation blight” at the heart of the Fornatora case, feel free to contact PLF’s Atlantic (Florida) office at (772)781-7787 or write to Pacific Legal Foundation, 1002 SE Monterey Commons Blvd., Suite 102, Stuart, FL  34996.  Steven Gieseler was the attorney who presented the Fornatora case to the Supreme Court, and who got me involved.

In other eminent domain news, George Will had an excellent column on January 3 condemning the pernicious Atlantic Yards land grab that you can read about here.