While a lame argument is disappointing for the opportunity cost of having read it, a lame argument put forth as rebuttal to one’s own assertions can be affirming. But, to paraphrase a colleague, there’s nothing better than being challenged with lame arguments by adversaries who have wide media circulation. For that, I thank you, Pat Buchanan.
Buchanan takes exception to the arguments I make in this piece, which appeared in the Washington Times last week. The theme of my op‐ed was that Congress should curtail its instinct to blame trade for everything that’s wrong with America. I even go as far as to suggest that, with strong economic growth, strong job creation, and a low rate of unemployment, things might not be all that bad in America. And at the very least, Congress should take the time to honestly assess the meaning of the trade deficit. What Congress would find is that the deficit is highly pro‐cyclical (meaning that is shrinks when the economy contracts, it grows when the economy expands, and grows faster when the economy grows faster – see some of Dan Griswold’s work on this topic). I also suggested that the trade account has very little to do with trade policy, and much more to do with demand in the United States and abroad, as well as differences in habits of savings and consumption.
For those empirically sound (and verifiable) assertions, Buchanan lampoons libertarians for possessing some religious‐like devotion to their beliefs regardless of the facts before taking two of my points out of context to serve as springboards into his xenophobic, isolationist, nationalistic rage.
When we win at trade, it doesn’t mean they lose (“cleaning those foreigners’ clocks”). We are all winning at trade as the economic pie grows larger and larger—so much so that the large U.S. economy can grow at a moderate‐to‐strong pace every year with the exception of two for the past quarter century, while the small‐to‐medium‐sized Chinese economy simultaneously can grow by double digits every year during the same period.
But rather than reinvent the wheel under which arguments like Buchanan’s have been reliably squashed throughout the years, I invite you to peruse this collection of timeless commentaries from Cato scholars and others about Buchanan‐like views on trade and globalization.
The Hill reports on a senator’s curiosity about 527 groups:
“I promised a group of people that we would do some hearings on it,” said Feinstein. “We’ll take a look at the 527, what it is today and where it appears to be going. I’d like to know exactly what 527s are doing. My exposure to them is necessarily limited, as it is for most members. It’s when you have a 527 weighing in against you that you want to know where this money is coming from.” (emphasis added)
Not that Senator Feinstein would do anything to harm the people weighing in against her. She is just curious, eager to learn.
The Economist has an entire section on the “offshore” world in the latest issue. Among the key findings are that so-called offshore financial centers promote growth and discourage wasteful government:
…the most vexing problem that highly mobile financial flows pose for governments is that when they cross borders they may take tax revenues with them. …As companies become ever more multinational, they find it easier to shift their activities and profits across borders and into OFCs. …Financial liberalisation—the elimination of capital controls and the like—has made all of this easier. So has the internet, which allows money to be shifted around the world quickly, cheaply and anonymously. …tax, regulatory and other competition is healthy because it keeps bigger countries' governments from getting bloated. Others argue that OFCs may be an inevitable concomitant of globalisation. “Even if today's OFCs were somehow stamped out, something like them would pop up to take their place,” says Mihir Desai of Harvard Business School. Some academics have found signs that OFCs have unplanned positive effects, spurring growth and competitiveness in nearby onshore economies. …International organisations have launched various initiatives to try to get OFCs to tighten supervision, co-operate more with foreign governments to catch tax cheats and, at least in Europe, eliminate “harmful” tax practices. OFCs think such initiatives are designed to force them out of business. The countries that set these standards “are an oligopoly trying to keep out smaller competitors. They are both players and referees in the game. How can they be objective?”, asks Richard Hay, a lawyer in Britain who represents OFCs. …the broader concern over OFCs is overblown. Well-run jurisdictions of all sorts, whether nominally on- or offshore, are good for the global financial system.
A column in the Financial Times takes an even stronger position. It notes that tax competition encourages more responsible behavior by lawmakers. It also explains that low taxes are not akin to subsidies, and points out that anti-tax-competition advocates will not be satisfied until all pro-growth tax policies are exterminated:
Here’s Representative Barbara Cubin’s (R-WY) letter to state legislators regarding the REAL ID Act, as reported in the Casper Star‐Tribune: “The new driver’s licenses will allow state and federal law enforcement to check the authenticity of a license, but will not grant access to state databases of private information.”
Now here’s section 202(d) of the REAL ID Act:
To meet the requirements of this section, a State shall adopt the following practices in the issuance of drivers’ licenses and identification cards: …
(12) Provide electronic access to all other States to information contained in the motor vehicle database of the State.
(13) Maintain a State motor vehicle database that contains, at a minimum–
(A) all data fields printed on drivers’ licenses and identification cards issued by the State; and
(B) motor vehicle drivers’ histories, including motor vehicle violations, suspensions, and points on licenses.
Who you gonna believe?
Unemployment is low, the stock market is booming, we’ve had 10 years of welfare reform — and “America’s welfare state is bigger than ever,” reports the Associated Press.
The number of families receiving cash benefits from welfare has plummeted since the government imposed time limits on the payments a decade ago. But other programs for the poor, including Medicaid, food stamps and disability benefits, are bursting with new enrollees.
The result, according to an Associated Press analysis: Nearly one in six people rely on some form of public assistance, a larger share than at any time since the government started measuring two decades ago.
Note that this story only looks at the welfare state for the poor. Far more than one in six Americans are dependent on such government programs as Social Security, Medicare, unemployment compensation, and so on, as Sen. Jim DeMint has been warning for years. More than 48 million people received a Social Security check last year, for instance.
But the AP investigation does show the weakness of welfare reform after 10 years. As Cato scholars have noted, many people have left the “welfare rolls” only to remain dependent on Medicaid, food stamps, housing subsidies, and other means‐tested transfer programs.
The AP report was printed on many newspaper websites, but it didn’t appear in the nation’s largest papers. It should get more attention. Presidential candidates should be asked whether they think it’s bad that almost 50 million Americans are on welfare or welfare‐related programs. What would they do to reduce dependency? And how long can a nation remain free if half its citizens are dependent on government hand‐outs?
Somehow, I’ve found myself on an email distribution list for the Republican National Committee’s opposition research team. Every couple of days or so, I get something documenting how the Democrat of the moment is out to lunch on this or that issue, speaking or acting hypocritically about some matter, or is an all‐around crook or ne’er-do-well. These packaged emails — intended primarily for the press — are the equivalent of political drive‐by shootings with footnotes.
Today’s edition, however, is exquisite. Titled “Hillary’s Kerryaoke on Energy,” it purports to document Hillary Clinton’s crazy statements and votes on energy policy. Here’s what we learn:
- Hillary Clinton is a big proponent of energy independence and calls for a big Manhattan‐style project to get us there. “ ‘If we landed a man on the moon and brought him back safely to Earth within a decade as President Kennedy had promised in 1961, we know we can do this,’ said Clinton to the AP the other day in the course of promoting her $50 billion program to reduce the nation’s dependence on foreign oil. The RNC’s complaint? She sounds just like John Kerry did in 2004. My complaint? She sounds just like President Bush, who proposes to spend at least that much to jack‐up the Strategic Petroleum Reserve — and that’s before we even begin tallying up the costs associated with his ethanol madness, his clean coal, nuclear power, and renewable energy subsidies, and a plethora of related costly interventions.
- Hillary Clinton wants to impose special taxes on oil company profits to help fund this $50 billion initiative of hers. Can’t complain with the RNC attack here. But someone ought to remind these young operatives that George Bush is likewise happy to levy special taxes on oil companies to fatten government coffers.
- Hillary Clinton voted 17 times against ethanol subsidies and even once dared to cast a procedural vote against an energy bill containing clean coal subsidies. The RNC is outraged — OUTRAGED! — that the New York Senator would eschew federal attempts to rig energy markets and intervene in private investment decisions.
- Hillary Clinton has voted eight times to prevent drilling in the Arctic National Wildlife Refuge. I’m not sure that the “free market” position is to drill, but I am pretty sure that drilling there would have no appreciable impact on U.S. energy security.
You’ll probably hear some echoes of this RNC hit‐piece on right‐wing talk radio shows over the next week or so. The point the RNC is trying to make is that she TALKS a good game regarding energy independence, but hasn’t always voted that way. Well, if I have to choose between someone who means the crazy rhetoric he is dishing out and one who really doesn’t, I’ll take the latter.
Government Computer News has had a number of articles recently about the problems besieging the Transportation Worker Identity Card (or TWIC), one of a number of government identification systems nominally responding to the post‐9/11 threat environment. It should be no surprise to government watchers that a service provider for TWIC, viewed by many as unqualified, happens to be in the district of the former Chairman of the House Appropriations Committee’s Homeland Security Subcommittee.
The REAL ID Act is a bigger government identity control project, by far, which attempts to force states to convert their drivers’ licenses into a national ID card. Regulations implementing REAL ID are widely expected to be released this week.
Even while the architects of the surveillance state gather to talk about implementation, the Washington Post has an article out today that is probably best taken as the first post mortem on REAL ID.
The headline (“As Bush’s ID Plan Was Delayed, Coalition Formed Against It”) wrongly attributes REAL ID to the Bush Administration, which was not a proponent of REAL ID, though the President did accept it as part of a military spending bill. The article correctly attributes responsibility to Rep. James Sensenbrenner (R-WI), the former Chairman of the House Judiciary Committee.
Though the Bush Administration has room to distance itself from this colossal unfunded national surveillance mandate, a prominent member of the Administration appears to have consumed the REAL ID Koolaid — in quantity.
“If we don’t get it done now, someone’s going to be sitting around in three or four years explaining to the next 9/11 commission why we didn’t do it,” Homeland Security Secretary Michael Chertoff told the Senate’s Homeland Security Committee on Feb. 13.
Secretary Chertoff’s shameless terror‐pandering is matched only by his ignorance of identification’s utility as a security tool. People who understand identification know that it does not provide security against committed threats.
It’s unfortunate that government works by trial and error, but this trial may soon show that a national ID is error.