Max Boot, Oil, and the “Dictatorship Dividend”

In the LA Times today, Max Boot identifies a real problem: oil revenue goes disproportionately to some pretty odious regimes. His solutions, such as “increase federal funding for research and rollout of fossil-fuel substitutes such as hydrogen, cellulosic ethanol (produced from grasses and agricultural waste) and plug-in electric engines,” reflect a touching faith in the ability of the federal government to pick winners among all the potential alternatives to oil out there. He would be on stronger ground if we were to argue “tax the hell out of oil and let’s see what emerges.”

Unfortunately, the cost gap between conventional gasoline and the alternatives is quite steep. Look at Europe for instance. Even with gasoline taxes that put prices at between $5-8 per gallon, we don’t see non-oil transportation fuels penetrating the market in any significant way.

I call this the “wish upon a star” policy. Yes, it would be nice if we could render oil valueless through some sort of concerted government effort. But we have made a number of great and small stabs toward that end over the decades and have nothing to show for it save for bankrupt companies, synfuel stories that no one apparently pays any attention to anymore, and forgotten white elephants like California’s glorious attempt in the early 1990s to produce high performance golf carts to replace the automobile. But alas, hope springs eternal.

If consumers want to strike a blow against “the dictator dividend” associated with gasoline consumption, there’s nothing stopping them. Don’t buy gasoline. Ride a bike. Walk. Tool around in a golf cart. Retrofit your car to run on vegetable oil or “Bio-Willie.” If that’s too much for you, you can always simply cut back on gasoline and shrink the dividend that way. There’s nothing here that government needs to do that we can’t do ourselves—if we really want to go where Boot would take us.

Operation Human Shield

It is not offensive that Congress is planning to spend $70 billion to assist American soldiers in a hostile foreign nation. What’s offensive is that Congress is using those soldiers as human shields to protect $70 billion it is wasting on less defensible priorities.

The spending bill that the Senate is expected to vote on today has been designated “emergency” spending. In effect, that means it doesn’t count toward the spending caps that Congress supposedly imposes on itself.

It has become routine for Congress to meet those caps by packing the regular spending bills with junk and then to spend well beyond those caps by labeling predictable expenditures “emergency” needs. So every $1 billion of Iraq war spending they label as “emergency” allows them to spend another $1 billion on junk.

Talk about war profiteering.

A Right to Experimental Drugs? Yes. No. Maybe.

The D.C. Circuit recently ruled that ”a terminally ill, mentally competent adult patient’s informed access to potentially life-saving … new drugs determined by the FDA after Phase I trials to be sufficiently safe for expanded human trials warrants protection under the Due Process Clause.” You can read more about it here.

 I want to raise a question about the way others are characterizing the case.

Following some of the language of the D.C. Circuit’s opinion, Jonathan Adler and Orin Kerr describe the case as a decision that recognizes a new “right to experimental drugs.” This characterization makes the case sound quite revolutionary. And it raises an interesting problem about how to talk about substantive due process cases. Compare common descriptions of Cruzan v. Director, Missouri Department of Health. There, the Supreme Court upheld a state law that, in effect, prohibited withdrawal of life support from a vegetative patient despite her previously expressed wish to die when in such a condition. (The law forced a surrogate to prove the patient’s wishes by heightened evidence.) But the Court also held that patients have a protected liberty interest in “refusing unwanted medical treatment.” Why then did it uphold state law? Because the Court held that the state interests outweighed the liberty interest at issue on the facts of the case.

Cruzan defies easy categorization. It’s variously described as a case that (1) left the right to die “unanswered”; or (2) recognized a “right to die.” This D.C. Circuit case also defies easy categorization. Relying on the logic of Cruzan, the D.C. Circuit held that patients have a liberty interest in control over their use of life-saving drugs protected by the Due Process Clause. But, whether the state has a sufficiently strong interest to override the liberty interest remains an open question, which the trial court must now consider. Like the state regs in Cruzan, the FDA regulations will be upheld if the government can show the regs serve a narrowly tailored “compelling interest”–what lawyers call “strict scrutiny.” (One way the FDA may try to do so, suggested by Cruzan, is to show that the regs somehow protect patients who don’t understand the risks involved–perhaps by attempting to show that terminally ill patients are poor judges of unknown risks and therefore at high risk of manipulation by doctors and pharmaceutical companies during Phase I trials. See this article for notes toward such an argument.)

In short, you shouldn’t assume that strict scrutiny is always fatal in fact. “Strict scrutiny” tests appear throughout constitutional law, and they are applied with different degrees of rigor: more exacting in some free speech cases, less exacting in equal protection cases. If Cruzan is any evidence, the “strict scrutiny test” applied in the field of substantive due process is a weaker variety. Perhaps there are important differences between the FDA regs here and state regs upheld in Cruzan. But on the face of things, it’s possible the endgame of this decision may leave room for government regulation—or even uphold the FDA regs in their entirety.

This is one reason why I think the Supreme Court–if the case were to be appealed–would be wise to wait until the trial court has balanced the state interests and the liberty interest recognized by the D.C. Circuit. And it is also a reason why pundits should be cautious about describing the case’s real-world effect. The real action in this case may be yet to come.

Nancy Johnson Does Well by Doing “Good”

Sometimes what does not happen is the most important thing in politics.

Nancy Johnson is a twelve-term Republican member of the House of Representatives. But she has a problem. Al Gore in 2000 and John Kerry in 2004 ran better in her district than they did in the nation as a whole. Nancy Johnson, a Republican, represents a district that all things being equal would elect a Democrat.

Nancy Johnson should be facing the fight of her life this fall given the problems of the Bush administration and the general unpopularity of the congressional Republicans. As the New York Times reports (subscription required), she is facing a tough fight. Her opponent has raised some money and is trying to tie Rep. Johnson to President Bush.

But Johnson’s fight for survival will not be as tough as it might have been. Prior to McCain-Feingold passing in 2002, labor unions, corporations and other groups could buy ads that discussed issues in ways critical of incumbent members of Congress. For example, a group could support an ad that said: “Nancy Johnson helped George Bush pass a bad prescription drug plan that helped the Big Drug Companies and hurt our seniors. Call Nancy Johnson and tell her to stop helping the Big Drug Companies and hurting our seniors.”

Not surprisingly, vulnerable Republicans in Congress like Nancy Johnson did not like such ads. Such Republicans provided the crucial support in the House to pass McCain-Feingold, which prohibited labor unions and corporations and other groups from running these ads. So much for free speech, but Nancy Johnson will have an easier race this fall.

But maybe not. After all, Democrats used 527 groups to try to defeat President Bush in 2004. Maybe the 527s could show up in Nancy Johnson’s district saying mean things about the incumbent. But again, maybe not. The House has passed, and the Senate seems likely to approve, a bill that essentially ends the 527 option.

So Nancy Johnson is likely to survive this fall, precisely because her constituents will not hear political speech they might have heard if McCain-Feingold had not been enacted.

Nancy Johnson, by the way, was one of the first House Republicans to support McCain-Feingold.

New at Cato Unbound: Dark Days for Small Government

Today in Cato Unbound, Bruce Bartlett, author of Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy, agrees with David Frum’s gloomy assessment of the prospects for small government and argues that conservatives and libertarians often compound the problem by failing to understand the magnitude and political intractability of the government’s non-discretionary entitlement programs. Slashing government is not “as easy as waving a magic wand.” Bartlett warns of the danger of resigning in frustration and calls for “a serious debate among libertarians and small government-types on a realistic political strategy for achieving their goals.”

Stay tuned! Ross Douthat and Reihan Salam will comment Friday, and Cato’s David Boaz will round out the replies to Frum with an essay on Monday.

Beyond Parody

The Nanny State grows too bizarre for satire.

Here’s The Onion in 1998:

According to a controversial Federal Trade Commission report released Tuesday, food manufacturer Hostess may have intentionally marketed “Twinkies”—a dangerous snack cake linked to obesity and hyperactivity—to minors.

There is substantial evidence supporting the claim that, for decades, Hostess has carried out an aggressive marketing campaign with the goal of promoting Twinkie use among underage consumers,” the FTC report read. “Our nation’s children have been targeted for the consumption of these fattening, unwholesome cakes at a vulnerable age, before they are old enough to make responsible decisions about health and nutrition. “The report also stated that “as a result of Hostess’ targeting of minors, millions of young bodies have been exposed to potentially harmful substances such as fat, sugar, cholesterol, polysorbate 60, calcium sulfate, partially hydrogenated vegetable oil and caramel color.”

Among the questionable Hostess marketing tactics the FTC report cites: positioning Twinkies billboards in the direct view of schoolyards, airing Twinkies ads on Saturday-morning TV and, most notably, developing and aggressively promoting “Twinkie The Kid,” a smiling, lariat-wielding cowboy cartoon mascot shaped like a Hostess Twinkie.

Believe it or not, here’s an actual press release from the FTC, issued yesterday:

The Federal Trade Commission and the Department of Health and Human Services today released a report recommending concrete steps that industry can take to change their marketing and other practices to make progress against childhood obesity.

[…]

“Responsible, industry-generated action and effective self-regulation are critical to addressing the national problem of childhood obesity,” said FTC Chairman Deborah Platt Majoras. “The FTC plans to monitor industry efforts closely, and we expect to see real improvements.”

This isn’t the first time the Nanny State has caught up to an Onion parody. See here, for example. Or here. Or here.

For an explanation why SpongeBob Squarepants isn’t to blame for childhood obesity, check here.

Medicare

On May 2, I attended an American Enterprise Institute symposium on Medicare’s financial outlook. That outlook is awful.

I offered the Stroke of a Pen solution of raising the age of eligibility going forward. In Crisis of Abundance, I explain in more detail how to phase out Medicare.

This idea was ridiculed by the panel. For the most part the panel reminded me of an old business cartoon with the caption, “I don’t have a solution, but I really admire your problem.”

However, the most likely alternative to cutting benefits is “cost control,” meaning price controls and/or rationing. The audience and the panel seemed much more receptive to cost control than to cutting benefits. Maybe the AEI is getting ready to play a role in the Hillary Clinton administration.

One of those who emphatically resisted cutting benefits was Mark McClellan, the Medicare czar. He was so gung-ho about Medicare’s quality initiatives that during the Q&A I asked him whether Medicare should take over health care for everyone. Instead of saying, “No,” he gave a political answer about how Medicare’s new initiatives were a “partnership” with the private sector.

Public-private partnerships are problematic, in my view. Power corrupts, absolute power corrupts absolutely, and private-public partnerships absolutely corrupt the private sector.

We have reached the point in health care policy where government is like the ten-year-old boy who starts fires so that he can be lauded as a hero for helping to put them out. Massachusetts gives huge hospital subsidies for “uncompensated care”—the subsidies apparently exceed the cost of care, because one of the obstacles to the Massachusetts reform is that hospitals are worried that they will lose money. Anyway, these subsidies, along with dysfunctional insurance regulations, favor uninsured free riders, causing the fire that needs to be put out with health insurance mandates.

McClellan lauded the Massachusetts reforms.