Treasury Secretary Timothy Geithner has finally unveiled details about his bailout plan. Not surprisingly, he plans on propping up insolvent (but politically influential) financial institutions. Even worse, there is no effort to shut down — or even reform — the two government-sponsored enterprises that deserve the lion’s share of the blame for the financial crisis. Yet as Peter Wallison of the American Enterprise Institute explains in this new video from the Center for Freedom and Prosperity, Fannie Mae and Freddie Mac are at the epicenter of the housing bubble and subsequent damage to financial markets.

Suffering through a massive housing bust spurred by the activities of utterly irresponsible government-sponsored entities such as Fannie Mae and Freddie Mac, may have led you to believe that the government should stop subsidizing the irresponsible and improvident. Indeed, with government spending and lending off the charts, you might even have come to believe that Washington should cut back on its spending and lending. 

Silly you.

According to the Obama administration, more spending and lending is in order. And by Fannie Mae and Freddie Mac. Indeed, preparing the government for even more spending and lending apparently is the goal of current policy, which already includes a lot of spending and lending.

Christina Romer, Chairwoman of the Council of Economic Advisers, was interviewed by CNN’s John King on Sunday. She helpfully sought to clear up the confusion exhibited by those of us who thought the current economic crisis resulted from irresponsible spending and lending. According to CNN:

KING: Mr. Liddy said he is going to break up AIG. Do we need to break up Fannie and Freddie?

ROMER: I think that is certainly going to be an issue going forward. I think it should be part of the overall financial regulatory reform, to figure out what is the best way.

Again, you know, anytime we have now got taxpayer money on the line, what we have an obligation to do is do it in a way that protects the American taxpayer. What is going to be the way that gets these institutions safe, gets them doing what we need them to do, which is lend like crazy, and just basically functioning again for the economy.

Of course. 

“Lend like crazy” really is the “just basically functioning” of Fannie and Freddie. But it is beyond question that this behavior helped spark the current crisis. Unfortunately, Dr. Romer does not explain exactly how we can make these fiscally irresponsible, money-losing organizations “safe.” Nor does she enlighten us on how having Fannie and Freddie “lend like crazy” will have better results than before. 

If this is the advice President Barack Obama is getting from what traditionally is one of the most economically responsible agencies in the executive branch, imagine what he is hearing elsewhere. Buckle up, for the economic ride is likely to get much worse.

The evidence is weak that Pre‑K education improves the long-term prospects of public school kids, says Adam Schaeffer, Cato education policy analyst.

In Monday’s Cato Daily Podcast, Schaeffer explains why the push for universal preschool is really all about money, monopoly and misdirection:

The scale problem is a massive one and they haven’t really addressed it. State programs run into these problems as well. As they scale up the program, we see that there is no overall change in outcomes for the children in the state. Their test scores don’t go up.

Join Patri Friedman at the Cato Institute, Tuesday, April 7, to learn about the new movement to compete with sovereign nations by starting a new society on the high seas.

The Seasteading Institute seeks to build self-sufficient deep-sea platforms that would empower individuals to break free of national governments and start their own societies.

Executive director Patri Friedman predicts a future in which any group of people dissatisfied with their current government would be able to start a new one by purchasing a floating platform called a “seastead” and building a new community on the open ocean. He hopes that the availability of alternatives will encourage existing governments to reform themselves to better serve their citizens.

Can seasteading succeed where past plans have not? Are people willing to brave the high seas for liberty? Economist Arnold Kling will address the viability of the project in light of similar efforts in the past. Doug Bandow will address whether existing governments will tolerate seasteads, and specifically how the international Law of the Sea Treaty might complicate matters.

Please join us for an in-depth discussion of the prospects of this exciting new effort.

Featuring Patri Friedman, Executive Director, Seasteading Institute; with comments by Doug Bandow, Senior Fellow, Cato Institute; and Arnold Kling Adjunct Scholar, Cato Institute.

Help spread the word, and invite your friends on Facebook.

Here’s the latest round-up of bloggers who are writing about, citing and linking to Cato research and commentary:

• Blogging about Real ID, AxXiom for Liberty posted Jim Harper’s piece about DHS officials who skirted open meeting laws to promote the program.

• The Club for Growth’s Andrew Roth interviewed Cato Chairman Bob Levy about his book, The Dirty Dozen.

• No Land Grab, a blog covering eminent domain abuse, posted the latest Cato video on the Susette Kelo case. Jason Pye, who wrote a commentary on the case for the Georgia Public Policy Foundation, linked to it as well.

• Sights on Pennsylvania blogged about international health care systems, citing Michael D. Tanner’s January article on health care reform and a 2008 Hill Briefing that compared various systems around the world.

• Wes Messamore, AKA The Humble Libertarian, is compiling a list of 100 libertarian blogs/​Web sites, and looking for recommendations. Last week, Wes penned his thoughts on the role of the U.S. in foreign policy, making heavy use of a recent Cato article by Benjamin Friedman and a 1998 foreign policy brief by Ivan Eland, citing military intervention overseas as a cause of terrorist activity against Americans.

• David Kirkpatrick shared an excerpt from the Cato Weekly Dispatch with his readers about Obama’s marijuana policy.

If you’re blogging about Cato, contact Chris Moody at cmoody@​cato.​org.

Monday, March 23, 2009

BOOK FORUM- The Tie Goes to Freedom: Justice Anthony M. Kennedy on Liberty

12:00 PM (Luncheon to Follow)
The Cato Institute

Author Helen Knowles examines how Kennedy’s background as a law student and classroom teacher has influenced his judicial philosophy. The book begins by examining Kennedy’s judicial thought in the context of libertarian thought. Knowles does not call the justice a libertarian. Instead, in a sympathetic but not uncritical analysis, she uses libertarian philosophy, focusing on privacy, race, and speech cases, to draw out Kennedy’s views about limited government and individual liberty. Please join us for a discussion of Justice Kennedy’s “modest libertarianism,” with comments by one of the nation’s foremost constitutional scholars, Professor Randy Barnett.

Watch live online here.

CAPITOL HILL BRIEFING- Tax Havens Should Be Celebrated, Not Persecuted

12:00 PM (Lunch Included)
B‑340 Rayburn House Office Building

Join Cato scholar Dan Mitchell and former member of the Cayman Islands Monetary Authority Richard Rahn to review the myths and realities about the role of tax havens in the global economy.

POLICY FORUM- Georgia’s Liberal Institutions In the Wake of War and the Global Economic Crisis

12:00 PM (Luncheon to Follow)
The Cato Institute

Featuring David Bakradze, Speaker of the Georgian Parliament; Kakha Bendukidze, Former Minister of the Economy and Reform Coordination, Georgia; and Andrei Illarionov, Senior Fellow, Center for Global Liberty and Prosperity, Cato Institute.

Register to attend or watch live online here.

The Democratic Congress recently signed a death warrant for the DC voucher program and we witnessed some in the center-left media come out swinging in defense of the policy.

Support for school choice is mainstreaming. And while we have seen serious setbacks on voucher policy in recent years, supporters of private schools choice should not be discouraged.

Education tax credits are making huge strides, with new programs multiplying and old ones expanding. And the support is increasingly bipartisan.

So congratulations and thanks to South Carolina State Sen. Robert Ford, the latest high-profile Democrat to support education tax credits:

State Sen. Robert Ford is lending his voice — a black voice rooted in the African-American struggle for equal rights — to the S.C. fight over school choice. To the dismay of his African-American Senate colleagues, the Charleston Democrat is hawking a bill that would give students [an education tax credit or scholarship supported by credits] to go to a private school.

Ford, who is seeking the Democratic nomination for governor … is making the case that the students who would benefit most from a [tax credit] program in South Carolina are African-Americans who attend poorly performing schools.

“All of us have been defending the system,” Ford said. “It’s time to stop. I’m not pussyfooting with this anymore.”

Ford might be a bit lonely at first in South Carolina, but he stands in good company across the nation.

Florida’s donation tax-credit program became law in 2001 with the vote of a single Democratic legislator. Last year, a third of statehouse Democrats, half the black caucus and the entire Hispanic caucus voted to expand that program.

New or expanded tax-credit initiatives were signed into law by Democratic governors in Arizona, Iowa and Pennsylvania in 2006. That same year a Democrat-controlled legislature in Rhode Island passed a donation tax credit and a Democratic governor and legislature in Iowa expanded the tax-credit dollar cap by 50 percent in 2007.

Last year six states moved a school choice bill through both chambers and five more passed a bill through one chamber. Georgia passed a universal donation tax credit program, and Louisiana passed both a voucher program and an education tax deduction.

Ford is right that the public school system has failed children and taxpayers for decades. Now the system is failing to maintain the only thing that matters to it; political support.