Honestly, a 900-word Politico article on “the Power of Obama’s Hand”? It’s going to be a long four-to-eight years. (Hat tip: Dave Weigel).
Cato at Liberty
Cato at Liberty
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Barton: Good Cause, Awful Rhetoric
Arguing against a delay of the transition to digital television, Rep. Joe Barton (R‑TX) argued that spectrum destined for public safety uses would be held up. Well and good. But he did so this way:
Osama bin Laden isn’t fictional, and he isn’t waiting. That should be reason enough to go full speed ahead with the DTV transition.
People around the world read and discuss what U.S. leaders say about terrorists. By invoking the specter of bin Laden, Barton has given free publicity to a leading terrorist among people who might join him or any group loosely affiliated with Al Qaeda. If they want to be a part of something powerful, Representative Barton has signaled to them what they should do.
The digital television transition should go forward, but exalting terrorists is not the way to argue for that.
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Atul Gawande Is Right
Path dependence plays a huge role in shaping nations’ health care sectors. Path dependence is also why we want health care reform to nudge America toward freer markets.
Government exacerbates path dependence. Government gives the old order the power to block the new. The larger the role government plays in health care (or anything else), the harder it is to make incremental changes that would yield greater benefits than existing arrangements.
That’s why, as Gawande observes, Medicare does a lousy job of improving quality. (Or containing costs, for that matter.) Medicare and other government interventions are also why we don’t see enough innovation in the private sector, either.
So if you want tomorrow’s health care sector to have the same problems with cost, quality, and access as today’s, then by all means expand Medicare. Or create a government-run “exchange” like the Federal Employees Health Benefits Program. Or expand the Veterans’ Health Administration. Or expand Medicaid and SCHIP.
But if you’d rather a health care sector that constantly makes improvements in cost and quality, you need to let seniors and non-seniors alike control their health care dollars and choose their own health plan.
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“Fair Pay Act” Will Only Further Damage Economy
When President Obama signs the Lilly Ledbetter Fair Pay Act, he will be fulfilling a campaign promise but undermining the American economy. This bill is not about sex discrimination — paying men and women different wages for the same job has been illegal for nearly half a century — but rather about statutes of limitations. How long after an incident of discrimination should someone be allowed to sue? The Supreme Court ruled that an employee has six months after a company’s initial pay decision to file a discrimination claim. While this was a fair reading of existing law, critics legitimately questioned whether the law itself unfairly foreclosed redress for a decision made long before an employee discovered the pay discrimination. They correctly went to Congress to fix the law, instead of demanding that courts rewrite it themselves.
But the solution is not to eliminate statutes of limitations altogether, which is essentially what the Fair Pay Act does when it restarts the litigation clock with every new paycheck. No, the proper solution is simply to codify the common law “discovery rule” for these types of cases, making clear that the statute of limitations begins to run only when the employee discovers the wrong that had been committed against her way back when — a compromise that was proposed by Senator Kay Bailey Hutchison but rejected by the Senate. Instead, the new law introduces major uncertainty into business operations and gives every employee a Sword of Damocles to dangle over her employer’s balance sheet. Companies will all of a sudden be subject to decades-old discrimination claims they have no ability to defend.
At bottom, the Lilly Ledbetter Fair Pay Act takes a bludgeon to an already reeling economy, acting as a stimulus only for the lawyers bringing and defending the coming avalanche of lawsuits.
Investing Abroad, Investing at Home
On the campaign trail, then-candidate Obama spoke against policies that give companies tax breaks after shipping jobs overseas.
“I will stop giving tax breaks to corporations that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America,” Obama said.
Now as president, there’s little doubt he will put those promises into action.
In today’s Cato Daily Podcast, Dan Griswold, director of Cato’s Center for Trade Policy Studies, explains why singling out those companies now for tax hikes can have a particularly painful negative side effect.
“When they talk about shipping jobs overseas what do they mean exactly? Well, if they mean U.S. companies investing in operations abroad then you’re indicting pretty much all of corporate America,” Griswold says.
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Whatever Happened to the Blue Dog Democrats?
Remember the Blue Dog Democrats? They were the fiscally conservative Democrats from Southern and Western and rural districts who weren’t going to go along with the big-spending leadership of their party. They’ve gotten a lot of attention, especially after a lot of new Blue Dogs were elected in 2006, helping to give the Democrats a majority in the House.
But where are they now? After eight years of unprecedented profligacy, with a trillion-dollar increase in federal spending, and in the face of both trillion-dollar deficits and unimaginably large long-term fiscal imbalances, the House is just about to vote to spend $825 billion that the government doesn’t have. Will any Blue Dogs vote no? Will any Blue Dogs live up to their campaign rhetoric about fiscal conservatism?
Don’t bet on it.
Their record isn’t as good as they’d like you to believe. John Fund pointed out back in 2005 that they were not supporting any Republican efforts to limit spending. But maybe that was just because the Republicans didn’t try to work with them. Fair enough. Now they’re part of the Democratic majority. And apparently they’re satisfied with vague promises from the Obama administration that after we spend all this money, we’ll get back to fiscal responsibility. (Lord, make me chaste, but not just yet.)
Blue Dogs supported fiscal responsibility at some vague point in the misty past, and they will strongly support fiscal responsibility at some vague point in the future, but right now they’re going to vote to put their constituents another $825 billion in debt.
Their members range from Rep. Mike Arcuri of New York to Rep. Charlie Wilson of Ohio, and include the newly promoted Kirsten Gillibrand. If you seek their monument, look around you.
UPDATE: By my colleague Tad DeHaven’s count, 37 out of 43 “Blue Dogs” voted for the spending bill that will probably end up costing about $900 billion. Congratulations to actual Blue Dogs Allen Boyd, Jim Cooper, Brad Ellsworth, Collin Peterson, Heath Shuler, and Gene Taylor.
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National Science Foundation “Stimulated” Enough
The House version of the “stimulus” plan being developed in Congress would give the government’s National Science Foundation (NSF) an extra $3 billion, in part, to “put scientists to work looking for the next great discovery.” Three billion dollars is a considerable chunk of change given that the NSF spent more than $6 billion in fiscal year 2008.
A story in today’s Politico says that Senator Chuck Grassley (R‑IA) wants more details on a NSF Inspector General finding that “NSF employees have been spending significant amounts of company time on smut sites and in other explicit pursuits.” The report states that one senior NSF official “had been repeatedly and excessively visiting pornographic websites and spending up to 20 percent of his official work time viewing sexually explicit images and engaging in sexually explicit on-line ‘chats’ with various women.”
I didn’t take the time to read the entire 68-page report, but what I did see was replete with examples of wasted taxpayer money by NSF employees and grant recipients. For instance, the section prior to the porn finding discusses one NSF Don Juan who “based NSF-funded travel decisions, at least in part, on his desire to further personal relationships with women, some of whom were affiliated with NSF.” Right prior to that we learn that a Colorado grant recipient spent taxpayer money on booze for “workshop” attendees.
These examples of tawdry behavior at the NSF invite a bigger question: should taxpayers be forced to fund scientific research to begin with? The majority of scientists would probably reply that the government doesn’t spend enough. Then again, it’s hard to find any group that has developed a dependency on taxpayer largesse who will say otherwise.
One scientist who thinks the government shouldn’t fund scientific research is Dr. Terence Kealey, a clinical bio-chemist at the University of Buckingham in the UK. Dr. Kealey made some interesting observations in a piece he wrote for Cato a while back called “End Government Science Funding.”
Without government funding of science, the United States overtook Britain around 1890 as the richest country in the world. So strenuously did Congress disapprove of federal involvement in research that it refused James Smithson’s bequest in 1829 and only grudgingly accepted it in 1846. (His gift helped establish the Smithsonian Institution.)
Further, government funding of university science is largely unproductive. When Edwin Mansfield surveyed 76 major American technology firms, he found that only around 3 percent of sales could not have been achieved “without substantial delay, in the absence of recent academic research.” Thus some 97 percent of commercially useful industrial technological development is, in practice, generated by in-house R&D. Academic science is of relatively small economic importance, and by funding it in public universities, governments are largely subsidizing predatory foreign companies.
In a 2003 interview with Scientific American, Dr. Kealey had this to say:
Research and development, which is a wider category, is largely funded by the private sector [for industrial purposes]. There’s no doubt in my mind that if government didn’t fund science, there would be significantly more private funding even for academic science. By “academic science” I mean pure or basic science as opposed to university science; the latter would dwindle, but the former would grow within industry. My belief–and it’s based on historical evidence of how good American science was before 1940–is that you have significant foundations [that would fund pure science]. Indeed, in my book I pointed out that quite a lot of the big foundations of science preceded 1940, and then after the huge influx of American government funding, people said, “Well, the government’s doing that,” and they started turning their attention to other things. More recently we’ve had people like [Bill] Hewlett and [Dave] Packard and others leaving billions to endow research, as the government started to withdraw slightly from that activity.