What You Don’t Know Won’t Hurt You (Surveillance State Edition)

While there are many choice tidbits to relate from Tuesday’s hearings on PATRIOT Act reform at the House Judiciary Committee’s Subcommittee on the Constitution—not least the fellow who had to be wrestled from the room, literally kicking and screaming, after he tried to stand and interrupt with a complaint about alleged FBI violations of his civil rights—I’ll just relate a novel theory of the Fourth Amendment advanced by Rep. Steve King (R-Iowa).

The ACLU’s Mike German, a former FBI agent turned surveillance policy expert, was explaining that it’s hard to know whether expansive surveillance powers are being abused, they’re mostly used in secret and deployed via third-parties like financial institutions and telecoms, who have little incentive to raise much fuss or draw attention to their cooperation. King interrupted to suggest that if we weren’t hearing about constitutional challenges, then it was probably safe to assume there was no Fourth Amendment harm. German tried to reiterate that the people whose privacy interests were directly harmed typically would not know they had ever been targeted.

That, King declared, was precisely the point. Surveillance of which the subject never became aware, he said, could be compared to a “tree falling in the forest” when nobody’s around. In other words, if you aren’t ultimately prosecuted, and don’t even feel subjective distress as a result of the knowledge that your private records or communications have been pored over, then it’s presumably no harm, no  foul. If we take this line of thinking literally, sufficiently secret surveillance can never be unconstitutional, which would seem to make King a spiritual cousin of Richard “if the president does it, that means it’s not illegal” Nixon.

Americans Don’t Want It

“Americans are more likely today than in the recent past to believe that government is taking on too much responsibility for solving the nation’s problems and is over-regulating business,” according to a new Gallup Poll.

New Gallup data show that 57% of Americans say the government is trying to do too many things that should be left to businesses and individuals, and 45% say there is too much government regulation of business. Both reflect the highest such readings in more than a decade.

Byron York of the Examiner notes:

The last time the number of people who believe government is doing too much hit 57 percent was in October 1994, shortly before voters threw Democrats out of power in both the House and Senate. It continued to rise after that, hitting 60 percent in December 1995, before settling down in the later Clinton and Bush years.

Also, the number of people who say there is too much government regulation of business and industry has reached its highest point since Gallup began asking the question in 1993.

That might give an ambitious administration pause. The independents who swung the elections in 2006 and 2008 clearly think things have gone too far. An administration as smart as Bill Clinton’s will take the hint and rein it in. Meanwhile, another recent poll, by the Associated Press and the National Constitution Center, shows that

Americans decidedly oppose the government’s efforts to save struggling companies by taking ownership stakes even if failure of the businesses would cost jobs and harm the economy, a new poll shows.

The Associated Press-National Constitution Center poll of views on the Constitution found little support for the idea that the government had to save AIG, the world’s largest insurer, mortgage giants Fannie Mae and Freddie Mac, and the iconic American company General Motors last year because they were too big to fail.

Just 38 percent of Americans favor government intervention - with 60 percent opposed - to keep a company in business to prevent harm to the economy. The number in favor drops to a third when jobs would be lost, without greater damage to the economy.

Similarly strong views showed up over whether the president should have more power at the expense of Congress and the courts, if doing so would help the economy. Three-fourths of Americans said no, up from two-thirds last year.

“It really does ratify how much Americans are against the federal government taking over private industry,” said Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the results of the survey.

Note that 71 percent of the respondents opposed government takeovers, with 50 percent strongly opposed, before the “benefits” of such takeovers were presented.

President Obama is an eloquent spokesman for his agenda, and he has an excellent political team with a lot of outside allies to push it. But as the old advertising joke goes, you can have the best research and the best design and the best advertising for your dog food, but it won’t sell if the dogs don’t like it.

Congress to Lift the Travel Ban to Cuba?

Bloomberg News reports today that the U.S. House may pass a bill by the end of the year lifting the almost five-decade-old ban on travel to Cuba by American citizens. The step is long overdue. According to the article:

A group of House and Senate lawmakers proposed in March ending restrictions to allow all U.S. citizens and residents to travel to Cuba. [Rep. Sam Farr, a California Democrat] said the legislation, known as the “Freedom to Travel to Cuba Act,” also has enough votes to clear the Senate, where Senator Byron Dorgan, a North Dakota Democrat, and Republican Senator Michael Enzi of Wyoming introduced the legislation.

As Rep. Farr succinctly added, “If you are a potato, you can get to Cuba very easily, but if you are a person, you can’t, and that is our problem.”

“If you are a potato, you can get to Cuba very easily,” he said. “But if you are a person, you can’t, and that is our problem.”

I rebut a lot of what Sen. Dorgan has said about free trade and globalization in my new book, Mad about Trade, but on the issue of the Cuban embargo and travel ban, Sen. Dorgan and most of his fellow Democrats are pushing in the right direction, while most Republicans still vote to maintain our failed policies. For more on why the travel ban and embargo should be lifted, read my speech at Rice University in 2005.

Here is one issue where those of use who support less government and more economic freedom really can hope for progressive change.

Robbing Peter to Pay Paul

The FDIC’s insurance fund, which it uses to pay off despositors in failed banks, is getting low. One way it can bolster its reserves is to draw on a $100 billion line of credit from the Treasury. Instead, however,

Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

A brilliant scheme to avoid another taxpayer bailout? Not really.

The banks are willing to lend because the FDIC will pay them a good interest rate. Repayment is virtually guaranteed because the FDIC can always draw on its line of credit. Thus the banks are getting a better deal than they would in the marketplace (that’s why they are doing this), so the scheme is a backdoor way of further bailing out the banks.

Why go through this charade? Apparently, using the Treasury credit line

is said to be unpalatable to Sheila C. Bair, the agency chairwoman whose relations with the Treasury secretary, Timothy F. Geithner, have been strained.

“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,” said Camden R. Fine, president of the Independent Community Bankers. “She’d do just about anything before going there.”

Instead, the FDIC will con the taxpayers. The FDIC has no choice under existing policy, of course, but to pay off depositors of failing banks. They should just be honest about how who is paying for it.

C/P Libertarianism from A to Z

Tuesday Links

  • Richard Rahn on the growing debt bomb, set to explode within three years: “Expect to see record high real interest rates and/or inflation, coupled with a collapse of many ‘entitlements.’”
  • Let the battle of ideas begin: Economists debate the monetary lessons of the last recession.

You Don’t Have to Be a Czar, Baby, to Be in My Show

Raging against “czars” seems all but obligatory these days for movement conservatives. The proliferation of Obama administration czars means “a giant expansion of presidential power,” warns Karl Rove, former domestic policy czar for the Bush administration–which I suppose proves once again that the capacity for embarassment is a career liability in this town.

Conservatives ought to be concerned about the growth of executive power. But as I argue in my Washington Examiner column this week, “czars” are pretty far down any serious list of executive-power concerns:

conservatives’ current bout of czar mania elevates symbolism over substance. All the focus on a scary moniker for certain executive officials misses the real problem: Unconstitutional delegation of power to the executive branch. Whether those illegitimate powers are exercised by unconfirmed presidential advisers or the president himself is quite beside the point….

Often, czars are mere figureheads, appointed to signal concern over the latest hot-button issue. As one presidential scholar puts it, “when in doubt, create a czar.”

True, it’s problematic that some of these appointees aren’t vetted by the Senate, and that presidents claim czars don’t have to answer to Congress – as when the Bush administration asserted in 2002 that executive privilege shielded then-homeland security czar Tom Ridge from testifying on the Hill.

But as the Washington Independent’s Dave Weigel has pointed out, many of the “czars” who appear on the conservative target list already have to be confirmed by the Senate. Others don’t, but when Obama is hell-bent on taking over the health care sector – one-sixth of the U.S. economy – it’s bizarre to agonize over the allegedly unchecked power exercised by the likes of the AIDS and urban affairs czars.

Similarly, while it’s great to see a nutter like Van Jones denied a federal salary, few of those cheering Jones’ defenestration can coherently explain what the green jobs czar actually does, or the threat he was supposed to represent.

What, was Jones going to give 9/11 “Truthers” and black nationalists jobs weatherizing homes? Will we stop wasting money on such projects now that he’s gone?

More here.

Gruber on Whether Mandates Are Taxes

Yesterday, on PBS’s NewsHour, I debated MIT health economist Jonathan Gruber on (among other things) whether the individual mandate in President Obama’s health plan is a tax.  As you can see in this video, Gruber pretty clearly states that the mandate is not a tax:

Which seems to conflict with what he wrote in his textbook:

Suppose…the government mandated that everyone buy full insurance at the average price of $825 per year…This would not be a very attractive plan to careful consumers, however, who could view themselves as essentially being taxed in order to support this market, by paying higher premiums than they should based on their risk.

There are really two government interventions at play in that example: the mandate that requires everyone to purchase insurance (whether they want it or not), and the price controls that force low-risk consumers to pay more than an actuarially fair premium.  One could say that it is the price controls, rather than the mandate, that Gruber likens to a tax.  It might be inconsistent, however, to suggest that when price controls force you to pay more for something than the market would charge, that is a tax, but when a mandate forces you to purchase something you don’t want at all, that’s not a tax.

Gruber also suggests that, for better or worse, the arbiter of whether a mandate is a tax is the Congressional Budget Office, and the CBO has said that the mandates in the leading health-reform bills are not a tax.  I think that’s incorrect for a few reasons.

  1. As I mentioned on the NewsHour and blogged earlier, the CBO has affirmed that the penalties for non-compliance are taxes.
  2. The CBO has not declared that the mandated private payments that result from the individual mandate are not a tax.  What the CBO has said is that – as the leading health-reform bills exist today – those mandated private payments do not meet the CBO’s definition of “federal revenues.”  In this report, the CBO explains that it will consider those mandated private payments to be federal revenues only if the government denies consumers a “sufficient” or “meaningful” or “substantial” degree of choice among health plans.  Faced with the necessity of drawing a line between what it will and will not include in the federal budget, the CBO made a judgment call and drew a line.  The agency went no farther; it did not say that mandates are taxes only if they fall on one side of that line.
  3. If the CBO’s determination of what constitutes “federal revenues” were to be the arbiter of what constitutes “a tax,” that would lead to absurd results.   Suppose Congress enacts the Baucus mandate, and then next year a new CBO director changes the rule so that those mandated private payments do count as federal revenues.  The result?  A massive tax increase!  Despite the fact that CBO has no authority to raise taxes.  And despite the fact that there would be no tax increase.   CBO’s change of heart would not alter public or private fiscal flows by one penny.

The president and his supporters have a tough road to hoe if they want to claim the individual mandate isn’t a tax.