Florida cops have made a practice of ticketing drivers who warn others about speed traps by flashing their lights, despite uncertainty as to whether state law actually does prohibit such flashing. Now a judge in Sanford, Fla. has ruled that Ryan Kintner of Lake Mary not only was within his rights under state law when he flashed his headlights, but was engaging in speech protected by the First Amendment. [Orlando Sentinel; cross-posted from Overlawyered]
Cato at Liberty
Cato at Liberty
Email Signup
Sign up to have blog posts delivered straight to your inbox!
Topics
Canada’s Economic Reforms
The lead article in the new Cato Policy Report is entitled “We Can Cut Government: Canada Did.” The article reviews Canada’s economic reforms since the 1980s, which have included free trade, privatization, spending cuts, sound money, large corporate tax cuts, personal tax reforms, balanced federal budgets, block grants, and decentralizing power by cutting the central government.
Those all sound like things we ought to pursue in America. The political systems of the two countries are different, but Canada’s pro-market reform lessons are universally applicable.
Canada’s reforms, for example, refute the Keynesian notion that cutting government spending harms economic growth. Canadian federal spending was cut from 23.3 percent of GDP in 1993 to 16.5 percent by 2000. Keynesians and their macro models would predict a crushing economic blow from such a spending reduction. They would argue that the “austerity” would slash “aggregate demand” and “take money out of the economy.”
Yet Canada’s spending cuts of the 1990s were coincident with the beginning of a 15-year economic boom that only ended when the United States dragged its neighbor into recession in 2009. As the government shrank in size during the 1990s, the Canadian unemployment rate plunged from more than 11 percent to less than 7 percent.
Canada still has a large welfare state, and its provincial governments are prone to overspending. However, its experience shows that even a modest dose of public sector austerity combined with pro-market reforms can lead to substantial gains in private-sector prosperity. American and European leaders still under the Keynesian spell should take note.
Related Tags
Diversity & Choice or Regulation & Monopoly?
Stephanie Saul’s anecdote-driven smear piece in yesterday’s NYT has perhaps had one positive effect; a serious discussion of good education tax credit bill design.
John Kirtley, chairman of the only active scholarship organization in Florida and father of the state’s credit program, used the NYT piece as a jumping-off point for legislative guidelines. Kirtley has done tremendous things in Florida for low income children and educational choice, but several of his policy recommendations (shared by others) are either unsupported or contradicted by the evidence.
I’ll use Saul’s brief description of the positive aspects of Florida’s credit program (which Kirtley praises) and his own guidelines as a structure for discussion. (See here for legislative guidelines and model legislation.)
Academic and Fiscal “Accountability”
This is the area in which the guidelines proposed by Kirtley and organizations such as the American Federation for Children are most at odds with research on education markets and government regulation. For decades, policymakers have desperately tried to improve education through accountability to the government. Their efforts have clearly failed. And it would be disastrous to involve the government, which has failed so dismally for so long, more directly in the private education sector and the private decisions of families and taxpayers. As Neal McCluskey showed for Florida specifically, fraud, waste and abuse in the public education system is much more widespread and pervasive than in private school choice programs.
Below are the reasons it is unnecessary and harmful to increase government regulation on education decisions made by families and taxpayers.
Related Tags
What’s ‘Wacky’ About Wanting to Eliminate the USDA?
Over at the Washington Post’s PostPartisan blog, Jonathan Bernstein discusses the rising influence of the “Ron Paul crowd” on Republican state party platforms. Bernstein cites a derisive piece from Ed Kilgore on a draft platform being considered by the Iowa Republican Party:
Now, a new group — the Ron Paul crowd — is taking over some formal GOP structures, including in Iowa. Ed Kilgore has a great post detailing some of the wackier things they’ve put in the official Iowa Republican Party platform — for example, eliminating the Agriculture Department. In Iowa. Oh, there’s plenty more, including phasing out Social Security and Medicare; overall, it has called for a federal government half the size of what Paul Ryan has advocated.
I don’t take issue with Bernstein’s contention that a platform like the one being proposed by the Iowa GOP would be a problem for most Republican politicians because the overall program “is just spectacularly unpopular with the general public.” I quickly scrolled through the hundreds of proposed “planks” in the platform and, as a libertarian, often found myself shaking my head and rolling my eyes. So it struck me as odd that of all the ideas in the platform that one could deem to be “wacky,” Bernstein chose to focus solely on planks that would cut – admittedly, dramatically – federal spending.
Bernstein continues:
Many libertarians have fooled themselves into believing that the American people are with them on their basic program, but if that were the case, Ron Paul would have been a viable presidential candidate, not someone who finds it hard to break 15 percent in primaries. Nor would the polling on government spending be mixed, with majorities for cutting spending overall (good for libertarians!) and for increasing spending on most programs (disaster for libertarians!).
I could be wrong, but I think most libertarians are aware that the average American favors spending cuts in general but is often less enthusiastic when the cuts are specified. And while Paul isn’t going to be the next president of the United States, his campaign has been successful in getting a lot more Americans to understand that the federal government needs to be downsized. Younger people in particular have been drawn to Paul’s limited government message. Paul was never going to win over the older folks who at the end of the day are primarily concerned with making sure that their Social Security and Medicare benefits aren’t touched. But the younger crowd is becoming increasingly aware that they’re eventually going to take it on the chin in order to maintain the federal government’s intergenerational redistribution schemes. Perhaps that’s what concerns people like Bernstein.
Circling back, proposing to eliminate the U.S. Department of Agriculture could be called a lot of things: provocative, controversial, dramatic, etc. But dismissing it as “wacky” is lazy. If Bernstein thinks that it’s a bad idea, then he should just say so (of course, my colleagues and I would argue otherwise).
For more “wacky” ideas, check out Downsizing the Federal Government.
Related Tags
In the Lake Wobegon Fantasy World, All Investments Make Money
I sometimes wonder whether journalists have the slightest idea of how capitalism works.
In recent weeks, we’ve seen breathless reporting on the $2 billion loss at JP Morgan Chase, and now there’s a big kerfuffle about the falling value of Facebook stock.
In response to these supposed scandals, there are all sorts of articles being written (see here, here, here, and here, for just a few examples) about the need for more regulation to protect the economy.
Underlying these stories seems to be a Lake Wobegon view of financial markets. But instead of Garrison Keillor’s imaginary town where “all children are above average,” we have a fantasy economy where “all investments make money.”
I don’t want to burst anyone’s bubble or shatter any childhood illusions, but losses are an inherent part of the free market movement. As the saying goes, “capitalism without bankruptcy is like religion without hell.”
Moreover, losses (just like gains) play an important role in that they signal to investors and entrepreneurs that resources should be reallocated in ways that are more productive for the economy.
Legend tells us that King Canute commanded the tides not to advance and learned there are limits to the power of a king when his orders had no effect.
Sadly, modern journalists, regulators, and politicians lack the same wisdom and think that government somehow can prevent losses.
But perhaps that’s unfair. They probably understand that losses sometimes happen, but they want to provide bailouts so that nobody ever learns a lesson about what happens when you touch a hot stove.
Government-subsidized risk, though, is just as foolish as government-subsidized success.
Related Tags
Gov. Romney, Federal ‘Incentives’ Mean Federal Power
In a speech today, presumptive GOP presidential nominee Mitt Romney will lay out the foundations of his education platform. Based on an outline of his proposals released by Education Week this morning, Gov. Romney seems just a little less disinterested in the Constitution — and the 40-plus years of proven federal education failure — than the man he seeks to replace. And no, calling what you want federal “incentives” neither absolves them of being unacceptable federal intrusions, nor makes them any less coercive.
The heart of what Mr. Romney wants in elementary and secondary education is federal enticements to get states to implement everything from “open-enrollment” policies for schools, to individual school “report cards,” to encouraging “talented individuals to become teachers.”
As I wrote last week, while “incentive” sounds kinda harmless, an incentive program is really all that No Child Left Behind is. No state has to do anything in NCLB. It only has to follow the law if it wants the federal money attached to it. The funding is only an incentive, but it is so big an incentive it is irresistible, even with the law being a huge millstone around the neck of American education. And, of course, taxpayers had no choice about furnishing the ducats to begin with. (Well, I suppose they were incentivized by a trip to prison…)
Where Romney’s K‑12 offering is most enticing is his proposal that federal money be attached to low-income and special-needs children and made portable even to private schools. (Portable, that is, “in accordance with state guidelines,” a proviso the outline doesn’t flesh out.) But the very real threat, as with all federal funding , is federal control. What Washington funds it will regulate — though usually for political show, not efficiency or effectiveness — and that is something we should strenuously avoid for private schools when states can implement more varied — and less regulation prone — choice mechanisms such as education tax credits. And, of course, the Constitution gives the federal government no more authority to deliver school choice than to dictate curricula. That is, except in Washington itself, and to his credit Mr. Romney is proposing to save the D.C. voucher program that Mr. Obama, for whatever shoddy reason, seems determined to suffocate.
The good news about Gov. Romney’s outline is that it directly addresses the primary problem in higher education, and one of its primary causes: insane tuition inflation fueled by massive federal student aid. Indeed, though he will no doubt get flayed for it by the higher ed establishment, who will publically deny it like so many naked emperors, Mr. Romney’s outline is refreshingly straightforward in identifying the root problem:
Governor Romney realizes that more spending will not solve the problem of tuition increases – to the contrary, it has helped fuel the problem. When Washington puts more money into student aid programs to help families and individuals pay for higher education, colleges and universities raise tuition rates.
So what grade does Mr. Romney get on education, at least from this initial outline? About a 30 percent for K‑12, and a 90 percent for higher ed. That works out to 60 percent — a woeful D‑minus — but that’s probably a tad bit better than most presidents would have gotten since the 1960s.
Related Tags
NYT Channels Monty Python’s Black Knight
America’s growing school choice movement is a bridge to educational freedom—an escape from our failing state school monopolies. And with all the tenacity (and veracity) of Monty Python’s Black Knight, the New York Times stands athwart that bridge, declaring: “None shall pass.”
The Times’ latest attempt to parry the thrust for educational freedom is this story attacking education tax credit school choice programs: “Public Money Finds Back Door to Private Schools.” No doubt this story has legs…but not for long.
Let’s begin with the title, which claims that private donations to private scholarship organizations are “public money” because they qualify for a tax credit. It’s a simple claim that is simply not true. As has been recently reported:
the genius of [tax credit programs] was that the money would never go into public accounts, making it less susceptible to court challenges…. As predicted, tax credits have thus far withstood legal challenges, most recently when the Supreme Court upheld Arizona’s program last year.
Perhaps the editors of the NYT were simply unaware of the report above—and unaware of the Supreme Court decision it cites (ACSTO v. Winn) explicitly stating that tax credited donations are not public money. But here’s the thing, the quote above is actually from the same story on which the Times slapped the “Public Money…” headline. So either the NYT’s editors don’t read their own stories, or they’re knowingly presenting a false statement to their readers in big, bold type. I can understand someone not wanting to read the NYT every day, but surely they’ve managed to find editors willing to do so?
Next, let’s talk about the story’s lede.…