Topic: Government and Politics

The Slippery Slope Goes Vertical

In the Obama era, the slippery slope has gone vertical. Instead of “eventually,” the feared extensions of government power come immediately.

When President Obama decided to convert George W. Bush’s bailout of General Motors Corp. and Chrysler L.L.C. into effective government ownership, critics warned that this could lead to political intrusion into the management of automobile companies, with decisions being made for political instead of economic reasons. The companies would get less efficient. The government might try to preserve jobs or engage in political grandstanding rather than build sound companies that serve consumers - eventually.

But there was no “eventually” about it. Before he had even secured government control, Obama fired the chief executive officer of General Motors. He decided what the ownership structure of the companies should be. He insisted that the companies build “clean cars” rather than cars that consumers want to buy. And as soon as a deal was concluded, members of Congress started trying to block the closing of inefficient dealerships and to require the companies to buy their palladium in Montana, use unionized trucking companies, remove mercury from scrapped cars, and so on. Politics reared its ugly head in the first moments of government control.

Now we have the federal government’s unprecedented intrusions into executive-pay decisions at seven bailed-out banks and automobile companies….

Read more at today’s Philadelphia Inquirer.

Just Say “No” to Competition

The Democrats who still control the Virginia State Senate (which wasn’t on the ballot this week) say they want to work with the new Republican governor.

“I won’t be like the House Republicans were, where anything they propose is bad,” said Senate Majority Leader Richard L. Saslaw (D-Fairfax), who like many Democrats says the GOP-led House obstructed the agenda of Gov. Timothy M. Kaine (D). “If there are areas where we can work things out, I’m ready, willing and able, and so is my caucus.”

But not so fast:

But asked about certain key pieces of McDonnell’s agenda, Saslaw demurred. Selling state-run liquor stores to raise money for transportation, for instance, would sacrifice the annual revenue the stores provide to schools and other purposes, Saslaw said. The Senate’s education committee remains opposed to changing state laws to allow more charter schools, another McDonnell proposal, he said.

No to bipartisan cooperation, no to competition, yes to hoary monopolies. Is that really the rock on which the Democrats want to make their stand as the country’s “implicit libertarian synthesis” yields a “libertarian moment”?

Liberty Most Deer

As a footnote to Chris Moody’s post about Monday’s 20-year anniversary of the fall of the Berlin Wall, I just came across this article about red deer refusing to cross from Germany into the Czech Republic.  This, of course, is a border that was the once heavily fortified dividing line between free West Germany and captive Czechoslovakia.

Even deer who weren’t born when barbed wire, watchtowers, and armed guards prevented the natural extension of their happy grazing grounds act as if the Cold War never ended — apparently because they learned their habits from their parents, who learned them from their parents.

Still, as with the new generation of Eastern Europeans who have no memory of Communism, some young deer are starting to break the mold, taking advantage of — and even taking for granted — their newfound freedom.  I wonder if the grass (and ferns, and whatever else deer eat) is any greener on the other side of the former Iron Curtain.

Give Us Your Tired, Your Energetic, Your Poor, Your Rich — Pretty Much Anyone Who’s Not a Criminal or Terrorist

On Wednesday I blogged about how, for the first time in many years — since the last recession — H-1B skilled worker visas remain available despite the hard cap on their number.  In other words, even foreigners respond to market incentives: when there are no jobs, there are fewer immigrants.

I’ve gotten some interesting email in response to that little notice, one of which I post below, along with my paragraph-by-paragraph responses.

Just read your blog entry on the H-1b visa.  The problem is that this visa has been misused by sponsoring companies, suffering from high rates of fraud.  I find it strange that Cato supports (or appears to support) a labor tool that is anything but free market.  The H-1b visa is more of an indentured servant visa program than anything else – where employees must be sponsored by an employer.  Since employees aren’t free to find new jobs or start their own business, it results in a captive workforce who will do whatever the employee asks, even beyond reason.  They won’t bargain for higher wages, quit if mistreated, join unions, or do anything that might result in their immigration status being jeopardized.

Having myself been on H-1Bs with several employers, including Cato, I agree that the program is seriously flawed, in the ways this correpondent describes and in others.  Ideally, people would be able to apply for a work permit — their application gaining more “points,” say, for language, youth, skills, the needs of the economy, or whatever other criteria the political process determines are important — and then not be tied to an employer and have an opportunity to receive permanent residence and eventual naturalization if they pay their taxes, stay out of jail, etc.  Or, indeed, we could admit all people who want to come here (after screening for security, criminal, and health concerns), and give them the same opportunity.  But until we get to that more perfect world, I see no conflict in advocating for a repeal of the H-1B cap or pointing out how this recession shows that immigrants come for jobs, not to leech off our welfare state (if that’s the concern, then wall off the welfare state, not the country) or commit crimes.

One thing not correct in your blog is that H-1b visa holders cannot get a green-card.  They can, unfortunately most of the workers are from India so it is difficult for those workers to get the green-card because of how, numerically, green-cards are issued.  The H-1b visa is a “dual intent” visa meaning there is a path to permanent residence and after 6 years on the visa holders can extend 1 year until their green-card is processed.  Indian workers call it the “green carrot” and relate it to the picture of where the mule driver holds a carrot on a stick in front of the mule to keep him moving.  No matter how hard the mule tries, the carrot gets no closer.

The H-1B’s “dual intent” provision is categorically not a path to a green card.  All it does is, as the correspondent points out, allow the worker to stay in the country during the green card application process.  That process, however, and the substantive requirements for obtaining a green card, is no different for H-1B holders than it is for anyone else.  Indeed, spending five or six years on an H-1B with one employer can be a detriment, inasmuch as that employer’s sponsorship application cannot take into account the skills gained during that time of employment.  And yes, the nationality-based restrictions are also obnoxious.

The primary sponsors of H-1b workers are Indian outsourcing firms.  In short, the visa is used as a tool to send jobs overseas.  People from Cato may not have a problem with that because of their own views on globalization and free trade, but the majority of Americans do.  You guys are notorious at just looking at one half of the equation when it comes to free market practices unfortunately – which is the corporate side.  Yes, corporations can move people around the world using a variety of immigration programs.  But do the people being moved around control their own destinies or are they at the mercy of the corporations?

Cato is not a corporate shill.  Plenty of what we advocate is counter to the expressed preferences of Big [fill in your preferred Villain] because the business community often prefers stability over liberty-enhancing volatility — smaller, secure profits over potentially larger but not-guaranteed ones — and a place at the government subsidies trough over a truly free market.  Moreover, and with much irony, it is the H-1B’s cap and costly bureaucratic processing that has promoted outsourcing — which in and of itself is not problematic for the American economy as a whole — by preventing American firms from bringing Indian (and other) workers here.  And people on H-1Bs are “at the mercy of corporations” precisely because this visa is tied to one employer, as mentioned in the first quoted paragraph above.

Liberty doesn’t just apply to corporations and the narrow objective of free trade.  I just don’t understand how the Cato Institute and all of your intellectuals don’t see through this visa for what it is.  It deprives people of liberty.  Many American workers don’t care that “an Indian” is being deprived of their liberty, but they should if not for moral reasons than for economic reasons.  If I have a worker that I can exploit and pay less, now I have a bargaining tool against the worker I previously could not.  When one man is deprived of their liberty, in a way we all are.

I couldn’t agree more that our current immigration regime benefits nobody — not big business, not small business, not skilled workers, not unskilled workers, not the American economy as a whole, not certain sectors of it — with the possible exception of populist demagogues of both the left and the right.  The answer to that morass isn’t to attack globalization or free trade — which is not a “narrow objective” but a fundamental mechanism for enhancing peoples’ lives all over the world — but to reform our immigration system.

For more on these and related issues, check out these recent studies put out by my colleague Dan Griswold and his trade and immigration policy team:

Government of Continual Failure

The Washington Post is full of so many stories about government failure these days, it’s hard to keep up.

Today, on page A19 we learn about a Small Business Administration subsidy program that has a 60-percent default rate. On the same page, we learn that the U.S. Postal Service will lose $7 billion this year.

Flipping over to page A20, we learn that former New York City Police Commissioner Bernard Kerik is a liar, a tax cheat, and thoroughly corrupt.

Then flip back to A15, and columnist Steve Pearlstein rightly lambastes the latest stimulus scheme from Congress: ”This $10 billion boondoggle is nothing more than a giveaway to the real estate industrial complex.”

Finally, on A14, we’ve got government-owned Fannie Mae losing a colossal $19 billion this year and asking the Treasury for another $15 billion taxpayer hand-out.

The federal government is a mess. Policymakers have no idea what the effects will be when they spend billions on scheme after scheme. Most of them don’t read the legislation, they don’t understand economics, and they never admit mistakes when their schemes almost inevitably fail. Fully 40 percent of the vast federal budget will be debt-fueled this year, but few policymakers seem to care. And public corruption seems never-ending. 

Isn’t it time to give libertarianism a chance?

As it Turns Out, There Are Limits on Congress’s Power

In 2006, Congress passed the Adam Walsh Child Protection and Safety Act. One provision of the law authorizes the federal government to civilly commit anyone in the custody of the Bureau of Prisons whom the attorney general certifies to be “sexually dangerous.” The effect of such an action is to continue the certified person’s confinement after the expiration of his prison term, without proof of a new criminal violation.

Six days before the scheduled release of Graydon Comstock — who had been sentenced to 37 months in jail for receiving child pornography — the attorney general certified Comstock as sexually dangerous. Three years later, Comstock thus remains confined in a medium security prison, as do more than 60 other similarly situated men in the Eastern District of North Carolina alone.

Comstock and several others challenged their confinements as going beyond Congress’s constitutional authority and won in both the district and appellate courts. The United States successfully petitioned the Supreme Court to review the case.

Cato, joined by Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a brief opposing the government. We argue that the use of federal power here is unconstitutional because it is not tied to any of Congress’s limited and enumerated powers. The government’s reliance on the Necessary and Proper Clause of Article I, Section 8, is misplaced because that clause grants no independent power but merely “carries into execution” the powers enumerated elsewhere in that section. The commitment of prisoners after their terms simply is not one of the enumerated powers.

While the government justifies its actions by invoking its implied power “to establish a federal penal system” — itself a necessary and proper auxiliary to certain enumerated powers — civil commitment is unrelated to creating or maintaining a penal system (let alone any enumerated power). Nor can the law at issue fall under the Commerce Clause, because civil commitment involves non-economic intrastate activity.

As the Supreme Court recognized almost 150 years ago in Ex Parte Milligan, “[n]o graver question was ever considered by this court, nor one which more nearly concerns the rights of the whole,” than the government’s unconstitutional assertion of power against its own citizens. In this spirit, the Court should affirm the Fourth Circuit’s rejection of this blatant government overreach.

United States v. Comstock will be argued on January 12.  You can read Cato’s brief here.

The House Health Care Bill — Transparent or Not?

The House health care bill is reportedly coming to the floor this weekend, and House Speaker Pelosi committed in September to a 72-hour delay between the time the bill is posted online and a final vote.

Is that 72-hour delay happening? Some say yes. Some say no.

On the “yes” side are some folks at the Sunlight Foundation. John Wonderlich wrote a post last Sunday called “72 Hours is Now.” He hailed the posting of the health care bill well in advance of a vote.

“Public outcry, partisan pressure, and rising expectations are forcing Congress’s hand,” he wrote, ”and it’s now (apparently) taken as a matter of course that this bill is online for a long weekend before its final consideration.”

Paul Blumenthal followed that up mid-week, sounding slightly more cautious notes but hailing the posting of the “final manager’s amendment.” His post restarted the 72-hour clock.

Which brings us to the folks who say no.

On the Weekly Standard blog, John McCormack says that Speaker Pelosi plans to violate the promise to post the health care bill online for 72 hours.

House members are still negotiating important issues in the bill — whether it will provide taxpayer-funding for abortions, for example. Pelosi is pushing for a Saturday House vote, and a number of big changes will be introduced, likely less than 24 hours before the vote takes place (if in fact it does).

Did Pelosi promise to post a bill? Yes — and she did, when it was pretty near final.

Meanwhile, though, the really tricky details — the stuff that matters to a lot of people — are still being hammered out. The spirit of the 72-hour pledge remains unfulfilled.

And this reveals a weakness in H. Res. 554, the preferred reform of the Sunlight-backed ”Read the Bill” effort. It would install a House rule giving bills 72 hours of online airing “before floor consideration.”

Floor consideration can and regularly does include the adoption of a “manager’s amendment” which can revamp a bill wholesale or add and subtract key details — things that matter.

H. Res. 554 has a loophole you can drive a truck through, and Speaker Pelosi is revving her engines.

This episode is a good, if regrettable, illustration that “self-reform” by a branch of government isn’t reliable. “Read the bill” is a good idea, but the genius of President Obama’s parallel “Sunlight Before Signing” pledge to hold bills coming out of Congress for five days before signing them is that it is based on interbranch rivalry. Especially, but not only, when there is partisan division between the president and Congress, competition among branches will promote the practice.

(More on “Read the Bill” and “Sunlight Before Signing” here.)

Getting Congress to hold up its own legislation for 72 hours, giving meaningful access to the public of every detail, is asking Congress to be altruistic. And Congress is anything but altruistic.