1679 (Author at Cato Institute) https://www.cato.org/ en Jim Powell’s commentary, “Why Did FDR’s New Deal Harm Blacks?,” is cited on The Larry Elder Show https://www.cato.org/multimedia/media-highlights-radio/jim-powells-commentary-why-did-fdrs-new-deal-harm-blacks-cited Mon, 02 Mar 2020 11:34:33 -0500 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-commentary-why-did-fdrs-new-deal-harm-blacks-cited Jim Powell’s research on the New Deal is cited on The Larry Elder Show https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-new-deal-cited-larry-elder-show Sun, 25 Aug 2019 12:08:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-new-deal-cited-larry-elder-show Jim Powell’s research on the New Deal and the minimum wage is cited on The Larry Elder Show https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-new-deal-minimum-wage-cited-larry-elder-show Thu, 25 Apr 2019 12:17:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-new-deal-minimum-wage-cited-larry-elder-show Jim Powell’s research on the New Deal and the minimum wage is cited on C-SPAN 2 https://www.cato.org/multimedia/media-highlights-tv/jim-powells-research-new-deal-minimum-wage-cited-c-span-2 Sun, 14 Apr 2019 11:41:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-tv/jim-powells-research-new-deal-minimum-wage-cited-c-span-2 Jim Powell’s research on FDR’s New Deal is cited on KPRC’s Pursuit of Happiness Radio https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-fdrs-new-deal-cited-kprcs-pursuit-happiness Wed, 13 Mar 2019 11:33:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-research-fdrs-new-deal-cited-kprcs-pursuit-happiness Jim Powell discusses FDR and the New Deal on The Larry Elder Show https://www.cato.org/multimedia/media-highlights-radio/jim-powell-discusses-fdr-new-deal-larry-elder-show Tue, 12 Feb 2019 10:30:00 -0500 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powell-discusses-fdr-new-deal-larry-elder-show Jim Powell’s paper, “Why Did FDR’s New Deal Harm Blacks?, ” is cited on The Larry Elder Show https://www.cato.org/multimedia/media-highlights-radio/jim-powells-paper-why-did-fdrs-new-deal-harm-blacks-cited-larry Tue, 12 Jun 2018 11:06:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-paper-why-did-fdrs-new-deal-harm-blacks-cited-larry Ralph Raico, RIP https://www.cato.org/blog/ralph-raico-rip Jim Powell <p>I was saddened by the news of Ralph Raico’s passing on December 13. <br><br /> <br> At Cato summer seminars during the 1980s, he delivered fabulous lectures about the history of liberty and its adversaries. He focused on European intellectual history and the development of classical liberalism. He was clear, concise and passionate, and his talks sparkled with memorable details. I&nbsp;still cherish audio cassettes of those lectures. <br><br /> <br> Ralph attended the Bronx High School of Science, earned a&nbsp;B.A. at the City College of New York, and joined the New York libertarian underground during the 1950s. His friends included Ronald Hamowy, Leonard Liggio, George Reisman, Robert Hessen, and other eager students of liberty. For a&nbsp;while, Ralph and his group, calling themselves the “Circle Bastiat,” met for discussions with Ayn Rand’s group, “the Collective.” Ludwig von Mises invited Ralph to attend his graduate seminars at New York University. Ralph became a&nbsp;close friend of Murray and Joey Rothbard. <br><br /> <br> By 1960, Ralph was at the University of Chicago for a&nbsp;Ph.D. in intellectual history. F.A.&nbsp;Hayek was his thesis advisor. Ralph started a&nbsp;quarterly student journal called <em>New Individualist Review</em> and served as editor‐​in‐​chief. Each issue featured about a&nbsp;half‐​dozen articles. The first issue appeared in April 1961. The lead article was “Capitalism and Freedom” by Milton Friedman. The second issue featured “Freedom and Coercion” by Hayek. And so it went, a&nbsp;cavalcade of scholarly stars, including three future Nobel Laureates. The authors included George Stigler, Yale Brozen, Karl Brunner, Henry Hazlitt, W.H. Hutt, David Levy, Walter Oi, Sam Peltzman, Wilhelm Roepke, B.R. Shenoy, Gordon Tullock, Joe Cobb, and E.G. West, in addition to Hayek and Friedman. A&nbsp;few conservatives joined the fun, too—William F. Buckley, Jr., M. Stanton Evans, and Russell Kirk. <br><br /> <br> As it happened, in 1962, when I&nbsp;had to decide on a&nbsp;college, I&nbsp;received a&nbsp;subscription flyer for <em>New Individualist Review</em>. I&nbsp;was familiar with a&nbsp;number of the authors, because I&nbsp;had read issues of <em>The Freeman</em> that my father had in his home office, and they published some of the same authors. So, the University of Chicago was where I&nbsp;had to go. While many college kids did fraternities or football, I&nbsp;did NIR. I&nbsp;met Ralph, joined the staff of <em>New Individualist Review</em>, and altogether 17 issues were published. NIR involved insightful, inspiring, and sometimes amusing exchanges among students and professors in history, economics, philosophy, science, law, and business. For better or worse, NIR was a&nbsp;spontaneous phenomenon that never focused on becoming an institution. Gradually, everybody got their degrees and moved on. I&nbsp;was the last editor‐​in‐​chief (1968). <br><br /> <br> Ralph had so much literary talent that there were hopes he might produce a&nbsp;glorious history of liberty, like Lord Acton talked so much about but never started. Alas, time slipped through their fingers and—for now—that big story is still out there. <br><br /> <br> Nonetheless, Ralph became known for elegantly‐​crafted articles, pamphlets, and chapter contributions that helped illuminate the history of liberty. <br><br /> <br> Ralph translated Mises’ 1927 book <em>Liberalismus</em>, an excellent basic statement of classical liberalism, into English (1962), and a&nbsp;number of publishers have reissued his splendid translation. <br><br /> <br> He also wrote: <br> </p> <ul> <li><em>Die Partei der Freiheit: Studien zur Geschichte des deutschen Liberalismus</em>&nbsp;(1999), about the fateful struggles of German classical liberals during the 19<sup>th</sup> century.</li> <li><em>The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord&nbsp;Acton</em> (2010), his University of Chicago Ph.D. thesis.</li> <li><em>Classical Liberalism and the Austrian School</em> (2012).&nbsp;</li> </ul> Wed, 14 Dec 2016 15:43:00 -0500 Jim Powell https://www.cato.org/blog/ralph-raico-rip How People Abroad Viewed Our Declaration of Independence https://www.cato.org/blog/how-people-abroad-viewed-our-declaration-independence Jim Powell <p>How did people around the world react to the American Declaration of Independence?&#13;<br /> &#13;<br /> On Tuesday, July 9, 1776, the German printer Henrich Miller published the first translation of the Declaration, just four days after the English text was first published by John Dunlop whose printing shop was a few doors away in Philadelphia.&#13;<br /> &#13;<br /> Many French people were eager to see the Declaration, but until 1778, when the French government announced its alliance with the rebels, producing a translation was a dangerous thing to do in France. Alleged translations were anonymous. The earliest-known French translation was published in the Netherlands.&#13;<br /> &#13;<br /> Abroad, the Declaration had the greatest impact on debates leading up to the French Revolution (1789). The French referred frequently not only to the Declaration but also to the Virginia Bill of Rights, state constitutions and bills of rights and the U.S. Constitution. These documents, scholars Elise Marienstras and Naomi Wulf wrote, “acted as an indispensable guide or foil in the conception of their own principles.”&#13;<br /> &#13;<br /> In London, the Russian chargé d’affairs Vasilii Grigor’evich Lizakevich learned the news about the Declaration and on August 13 wrote a dispatch to the first minister of the College of Foreign Affairs, Count Nikita Ivanovich Panin, making clear the significance of the Declaration: “The publication of this document as well as the proclamation of a formal declaration of war against Great Britain offer evidence of the courage of the leadership there.”&#13;<br /> &#13;</p> <p>Russian newspapers published much information from America, but the actual text of the Declaration was suppressed there for eight decades. Meanwhile, the American Revolution inspired the Russian poet Aleksandr Nikolaievich Radishchev who wrote an ode called “Vol’nost” (Liberty). Apparently Empress Catherine wasn’t pleased, and Radishchev was exiled to Siberia. In December 1825, Russian army officers led the Decembrist Revolt against the autocrat Nicholas I, and they were hanged. Not until 1863, after czar Alexander II implemented some important reforms – notably the abolition of serfdom – was it safe to publish a translation of the American Declaration of Independence in Russia.&#13;<br /> &#13;<br /> Although Spain provided some money to help Americans fight Britain in the Revolutionary War, this was because of the rivalry between those great powers. Spanish monarchs, like the French King Louis XVI who provided crucial assistance for the Americans, wasn’t interested in promoting democracy.&#13;<br /> &#13;<br /> The first Spanish translation of the Declaration doesn’t seem to have been published until about 1868, more than nine decades after the Declaration, when Spain had its own Glorious Revolution. It involved the overthrow of Queen Isabella II and, two years later, resulted in the Spanish Republic. But royalists fought back, and in 1875 the monarchy was restored with Isabella’s son crowned King Alfonso XII.&#13;<br /> &#13;<br /> Scholar Joaquim Olra reflected, “That the Declaration of Independence was so seldom translated into Spanish may be due to various causes. One might be Jefferson’s inclusion of the ‘pursuit of Happiness’ among the ‘certain unalienable rights,’ which goes against the Spanish understanding of the Catholic teaching on happiness, since this was always understood as attainable only in the other world.” Olra added that during the Glorious Revolution, many Spaniards talked about “derechos ilegislables [unalienable rights], an expression that was then completely new in the Spanish political vocabulary and that probably has never been used since.”&#13;<br /> &#13;<br /> The first Japanese translation of the Declaration was in 1854, the year the United States and Japan signed a treaty in Yokohama, after more two centuries of isolation from the outside world. But that translation was based on an American history book written in Chinese.&#13;<br /> &#13;<br /> Fukuzawa Yukichi, a great admirer of Benjamin Franklin’s enterprising spirit, was the first to produce a Japanese translation of the Declaration and the Constitution directly from English. This was a daunting task, because there weren’t any good English-Japanese dictionaries. According to Tadashi Aruga, a Japanese scholar, “There were no readily available Japanese words for such key Western concepts as freedom, equality and right. At first Japanese scholars were able to refer to Chinese translations of Western books. Increasingly, however, Japanese translators had to invent for themselves appropriate Japanese words. They found Japanese words of Chinese origin that could be redefined to convey Western concepts, rediscovered rarely used Chinese words, or created new words by making new combinations of Chinese characters.”&#13;<br /> &#13;<br /> The Chinese translation of the Declaration of Independence wasn’t published until 1901. It appeared in Guomin Bao, a monthly journal published by Chinese students in Tokyo. “The concept of natural rights has been consistently alien to the Chinese mind,” explained translator Frank Li. “Natural and civil rights were terms that could not be found in the vast sea of Chinese political, social, philosophical and literary writing. Yet, on rare occasions, the word ‘freedom’ (ziyou) was used in poetry and other literary works to denote an unconstrained atmosphere. The word had no political or philosophical connotation.”&#13;<br /> &#13;<br /> Since the time of the American Declaration of Independence, dozens of societies – including some communist regimes like Ho Chi Minh’s Vietnam (1945) – have issued declarations of independence. While independence is generally important for a free society, it isn’t enough. Among the many essential elements are popular support for the doctrine of natural rights, secure private property, freedom of association, freedom of contract, freedom of trade, freedom of speech, freedom of the press, freedom of religion, representative assemblies, term limits, a separation of church and state, a separation of powers with checks &amp; balances, and other measures to limit government power. The more of these a society has, the more likely it will be free.</p> <p></p> Fri, 01 Jul 2016 10:50:01 -0400 Jim Powell https://www.cato.org/blog/how-people-abroad-viewed-our-declaration-independence Milton Friedman’s Favorite Book on Trade https://www.cato.org/publications/commentary/milton-friedmans-favorite-book-trade Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Adam Smith wrote the most influential case for economic liberty, “The Wealth of Nations” (1776), but the best book on free trade probably came from our side of the Atlantic.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Though fewer people remember the American economist&nbsp;Henry George&nbsp;(1839–97),&nbsp;Milton Friedman&nbsp;once told me that George’s book “Protection or Free Trade” (1886) was, in his opinion, the most rhetorically brilliant work ever written on the subject. In it George demonstrated how free trade benefits a&nbsp;nation that opens its markets, even if other nations close theirs. “If foreigners will bring us goods cheaper than we can make them ourselves,” he declared, “we shall be the gainers.”</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>Henry George’s ‘Protection or Free Trade’ in 1886 decisively showed the value of opening markets.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>As George pointed out, trade is voluntary, driven by individual buyers and sellers. “Trade is not invasion,” he wrote. “It does not involve aggression on one side and resistance on the other, but mutual consent and gratification. There cannot be a&nbsp;trade unless the parties to it agree.”</p> <p>He posed a&nbsp;thought experiment to challenge the common view that exports are good, and imports are bad: “To have all the ships that left each country sunk before they could reach any other country would, upon protectionist principles, be the quickest means of enriching the whole world, since all countries could then enjoy the maximum of exports with the minimum of imports.”</p> <p>What about the argument that tariffs are needed to support vital domestic industries? George observed that these political favors will inevitably go not to the deserving but to the strong and unscrupulous. See if this sounds like Washington today: “infant industries have no more chance in the struggle for governmental encouragement than infant pigs with full‐​grown swine about a&nbsp;meal‐​tub. Not merely is the encouragement likely to go to industries that do not need it, but is likely to go to industries that can be maintained only in this way, and thus to cause absolute loss to the community by diverting labor and capital from remunerative industries.”</p> <p>Using tariffs to protect domestic producers from lower‐​cost foreign competition also harms businesses further down the supply chain. For instance, a&nbsp;tariff that raises the price of steel increases the cost of everything made from steel. And there are more jobs at stake in steel‐​using industries (commercial construction, transportation, machinery) than in steel‐​producing industries.</p> <p>George invoked history, too. The first civilizations, he wrote, did not rise in isolated places, shielded “by rugged mountain‐​chains, by burning deserts, or by seas too wide and tempestuous for the frail bark of the early mariner.” Why? Because they depended on trade. “It is on accessible harbors, by navigable rivers and much‐​traveled highways that we find cities arising and the arts and sciences developing.”</p> <p>War was the analogy in what are perhaps George’s most famous lines: “Blockading squadrons are a&nbsp;means whereby nations seek to prevent their enemies from trading; protective tariffs are a&nbsp;means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.”</p> <p>Something to ponder as 21st‐​century politicians threaten retaliatory tariffs against foreign competitors—which would simply force Americans to pay more for many things. “No other nation,” George reminded us, “can thus injure us so much as we shall injure ourselves.”</p> </div> Fri, 10 Jun 2016 09:56:00 -0400 Jim Powell https://www.cato.org/publications/commentary/milton-friedmans-favorite-book-trade Getting King John To Sign Magna Carta Was Only Half The Battle https://www.cato.org/blog/getting-king-john-sign-magna-carta-was-only-half-battle Jim Powell <p>The very day King John pledged to uphold Magna Carta, June 20, 1215, he asked Pope Innocent III to annul it.  The pope replied, “We utterly reject and condemn this settlement and under threat of excommunication we order that the king should not dare to observe it and that the barons and their associates should not require it to be observed.”&#13;<br /> &#13;<br /> So, John reneged on his agreement with the barons, they rebelled and formed an alliance with King Philip II of France who prepared to invade England.  Before long, the French Prince Louis entered London, and the French controlled castles throughout England.  The English Church, however, backed John and refused to crown Lewis as England’s king. &#13;<br /> &#13;<br /> John fled from his pursuers, but somewhere along the line he contracted dysentery and was dying.  He appointed 13 executors including William Marshal who was among the most revered knights in England.  John died on October 19, 1216,  and his nine-year-old son was hastily crowned Henry III.  Because he was under-age, Marshal formed a regency government.  Although Marshal was able to seize an important English castle from the French, the civil war was substantially stalemated.&#13;<br /> &#13;<br /> With John gone, the rebel barons found themselves in an awkward position – their alliance with foreigners who occupied England.  Patriotic English wanted to get the French out.  Fortunately, Prince Louis was happy to collect a bribe, and soon the French went home.&#13;<br /> &#13;<br /> Regent Marshal recognized that there was more likely to be domestic peace if some fundamental legal issues were resolved and that consequently John’s repudiation of Magna Carta must be reversed.   So Marshal reviewed the document, made some cuts, and reissued Magna Carta in late 1216.   Among the cuts was paragraph 61 about the committee of 25 barons who would monitor the king's compliance with Magna Carta and, if necessary, try to enforce it.  Perhaps less important than those words was the fact that the barons had demonstrated their willingness to use force against a tyrannical king.&#13;<br /> &#13;</p> <p>The government needed more money again in 1217, and Marshall proposed a tax on the land held by knights – land that provided food and generated revenue to make possible their feudal military service.  Barons resisted, and Marshall reissued the previous version of Magna Carta with some clauses added to protect feudal privileges of the barons.&#13;<br /> &#13;<br /> In February 1225, there were fears that England might be invaded by the French, and the government needed even more money to mount a defense.  There was much debate and eventually an agreement among the barons to pay a tax on moveable goods – provided the king reissued Magna Carta.  Accordingly, Henry III approved a version similar to that of  1217 and affirmed that he did it with his "spontaneous and free will" as well as with his royal seal.  He declared, “neither we nor our heirs will determine anything by which the liberties contained in this charter be violated or weakened.”&#13;<br /> &#13;<br /> Over the centuries, the 1225 Magna Carta was reaffirmed dozens of times by English sovereigns.  In 1311, Edward II referred to some statutes, saying “that they be not contrary to the Great Charter.”&#13;<br /> &#13;<br /> Other countries issued charters intended to limit  a ruler's power, too, but Magna Carta really took root, and constitutional development went furthest in England.  For instance:&#13;<br /> &#13;</p> <ul> <li>Magna Carta appeared in dozens of compilations of English laws, invariably as the first law.  Initially it was in Latin, then French and finally English.</li> <li>The Due Process of Law Act was adopted in 1368, during the reign of Edward III, and it said, in part, that the “Great Charter be holden and kept in all Points, and if any Statute be made to the contrary, that shall be holden for none.”</li> <li>In 1509, King Henry VIII approved of the beheading of Edmund Dudley and Richard Empson, accused of looting taxpayers and the government.  One of the formal charges involved violating Magna Carta.</li> <p>&#13; </p> </ul> <p>Queen Elizabeth I, near the peak of her power in 1587, wanted to establish a new judicial post in her government for one of her cronies, Richard Cavendish, so he could make a lot of money by issuing certain documents in the common law courts.  She asked administrative judges whose approval was needed.  They refused, and they were charged with disobedience.  They had to explain themselves before the queen.&#13;<br /> &#13;<br /> According to constitutional historian Henry Hallam, the judges said they meant no offense to her majesty, but her order was against “the law of the land” – meaning principles affirmed in Magna Carta.  Consequently, they said “no one is bound to obey such an order.”  When further pressed, they pointed out that the queen herself had sworn to uphold the law of the land.  The judges believed they couldn’t obey her order without violating the laws and their oaths.  The judges cited prior practices that had been rejected, because they violated the laws of the land.  Queen Elizabeth left the chamber without commenting, and nothing more was heard about the matter.&#13;<br /> &#13;<br /> During the 17th century, the legal scholar, judge and member of Parliament Edward Coke (pronounced “Cook”) interpreted Magna Carta as a bedrock of the English constitutional law that enabled people to resist and rebel against the tyrannical Stuart kings. &#13;<br /> &#13;<br /> Many critics have belittled the importance of Magna Carta by dwelling on the fact that the rebel barons were looking out for their own interests as feudal lords.  But establishing constitutional limits on a ruler with arbitrary power is always extraordinarily difficult.  Some people succeed before others, and their success is likely to make it easier for more people to follow.&#13;<br /> &#13;<br /> Although Magna Carta didn’t derive from the principles of a “higher law,” such as were received by Moses and articulated by Sophocles, Marcus Tullius Cicero, John Lilburne, John Locke, Thomas Paine, Thomas Jefferson,  and others, from a constitutional standpoint Magna Carta had similar standing.  It didn’t come from rulers.  It couldn’t be repealed.  It was forever.</p> <p></p> Thu, 04 Jun 2015 15:45:00 -0400 Jim Powell https://www.cato.org/blog/getting-king-john-sign-magna-carta-was-only-half-battle The Forgotten Depression: 1921: The Crash That Cured Itself https://www.cato.org/multimedia/events/forgotten-depression-1921-crash-cured-itself Jim Powell, Lawrence H. White, George Selgin <p></p><div class="event-book"><a href="http://www.amazon.com/The-Forgotten-Depression-Crash-Itself/dp/1451686455/?tag=catoinstitute-20" target="_blank"><img border="0" data-src="https://object.cato.org/sites/cato.org/files/images/forgotten-depression.jpg" class=" lozad" /></a></div>What happens if you throw a depression and nobody from the government shows up? No Quantitative Easers or fiscal stimulators or financial-firm rescuers? And what would happen if, instead of lowering interest rates and spending more to spur recovery, the government did nothing? The answer, in 1921 at least, is that the economy not only recovers but is "roaring" in less than two years. Was "The Crash that Cured Itself," as the subtitle of James Grant's fascinating new book refers to it, a fluke, or does it offer useful lessons for today's erstwhile depression fighters? <p>Join us to hear James Grant, Jim Powell, and Lawrence H. White discuss this and other important questions raised by Grant's stimulating new book.</p> Tue, 18 Nov 2014 16:01:00 -0500 Jim Powell, Lawrence H. White, George Selgin https://www.cato.org/multimedia/events/forgotten-depression-1921-crash-cured-itself Jim Powell’s policy report, “Woodrow Wilson’s Great Mistake,” is cited on WNYC’s The Brian Lehrer Show https://www.cato.org/multimedia/media-highlights-radio/jim-powells-policy-report-woodrow-wilsons-great-mistake-cited Thu, 31 Jul 2014 12:18:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powells-policy-report-woodrow-wilsons-great-mistake-cited Woodrow Wilson’s Great Mistake https://www.cato.org/policy-report/mayjune-2014/woodrow-wilsons-great-mistake Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>For a&nbsp;long time, Americans have been branded as “isolationists” guilty of “appeasement” when they question the wisdom of starting or entering another foreign war.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>The terms “isolationist” and “appeasement” are used to link today’s noninterventionists to the political leaders who, during the 1930s, did nothing to stop Hitler early on, when that might have been easy. Ever since then, starting or entering wars has been justified by claiming that the present situation is analogous to the threat from Nazi Germany and requires force.</p> <p>The first problem with such a&nbsp;scenario is that Hitler’s rise to power owed much to a&nbsp;prior war: World War I, which was supposed to end war. That famous phrase appears to have originated with <em>The War That Will End War</em> (1914), a&nbsp;book by the British socialist author H. G. Wells. His dubious claim inspired cynicism early on. British prime minister David Lloyd George reportedly remarked, “This war, like the next war, is a&nbsp;war to end war.” Journalist Walter Lippmann said “the delusion is that whatever war we are fighting is the war to end war.”</p> <p>Precisely because France and Britain entered World War I&nbsp;and were devastated — which none of the political leaders seem to have anticipated — people in those countries lacked the will for another war. They had also been lied to repeatedly by their political leaders, and they weren’t interested in going through that again. As far as Americans were concerned, the greed and hypocrisy of World War I&nbsp;belligerents discredited the idea of doing good by going to war, which is why Americans wanted nothing to do with another foreign war. It was because pro‐​war people lost their credibility during World War I&nbsp;that nobody responded when alarms were sounded about Hitler during the 1930s.</p> <p>If popular sentiment now generally opposes starting or entering foreign wars, the people who deserve considerable credit are those “internationalists” who promote participation in wars that go wrong. Often there are terrible unintended consequences, because wars are the most costly, volatile, unpredictable, and destructive human events.</p> <p><strong>THE HAZARDS OF THE UNFORESEEN</strong><br>World War I&nbsp;was probably history’s worst catastrophe, and U.S. President Woodrow Wilson was substantially responsible for unintended consequences of the war that played out in Germany and Russia, contributing to the rise of totalitarian regimes and another world war. American “isolationism” — armed neutrality would be a&nbsp;more accurate term — developed as a&nbsp;sensible reaction to his policies. After Germany’s initial advances into the Low Countries and France, the adversaries in World War I&nbsp;dug trenches and seldom advanced or retreated much from those lines.</p> <p>German soldiers were generally outnumbered on the Western Front, but the Germans had smarter generals and more guns. The British navy enforced an effective blockade that made it difficult for the Germans to obtain many vital supplies, including food. Germany responded by building a&nbsp;submarine fleet, but it didn’t give them a&nbsp;way to invade Britain or the United States. By 1918, the war had been stalemated for more than three years, neither side able to force vindictive terms on the other. One of the last German offensives ground to a&nbsp;halt in the French countryside when German commanders couldn’t prevent their starving soldiers, amazed by the abundance of food, from gorging themselves on cheeses, sausages, and wine.</p> <p>If the U.S. had stayed out of the war, it seems likely there would have been some kind of negotiated settlement. Neither the Allied Powers (France, Britain, Russia, Italy, Japan, and several smaller states) nor the Central Powers (Germany, Austria‐​Hungary, the Ottoman Empire, and Bulgaria) would have gained everything they wanted from a&nbsp;negotiated settlement. Both sides would have complained. But a&nbsp;catastrophe would have been less likely after a&nbsp;negotiated settlement than after vindictive terms were forced on the losers.</p> <p>Apparently Wilson wanted to demonstrate the global influence of the U.S. by presiding at postwar negotiations, but he figured he could do that only if the U.S. were a&nbsp;belligerent. He had offered his services as a&nbsp;mediator, but his prospective allies, the French and British, weren’t interested. As historian Barbara Tuchman reported, “It was not mediation they wanted from America but her great, untapped strength.”</p> <p>French and British generals squandered the youth of their countries by ordering them to charge into German machine‐​gun fire, and they wanted to command American soldiers the same way. Those generals repeatedly demanded that Americans reinforce their depleted ranks and fight under French and British flags. America’s first great struggle in the war was with the French and British, who feared that if American soldiers went into battle as an independent force under American command, they — not the French and British — would get the credit for success.</p> <p>On April 2, 1917, when Wilson went before Congress to seek a&nbsp;declaration of war, he wasn’t trying to protect the United States from an attack or imminent attack, although there had been provocations. His stated aim was to destroy German autocracy. He urged “the crushing of the Central Powers.” He famously promised that the world “would be made safe for democracy.”</p> <p>The U.S. played a&nbsp;significant military role only during the last six months of the war, but that was enough to change history — for the worse. By entering the war on the side of the French and British, Wilson put them in a&nbsp;position to break the stalemate, win a&nbsp;decisive victory, and — most important — force vindictive surrender terms on the losers.</p> <p><strong>THE FRONTIERS OF CONTROL</strong><br>Wilson seemed unaware of two critical limits of his power. First, since he represented the largest and richest belligerent, he assumed he would be able to control what his allies did, but he couldn’t, and they hijacked the postwar negotiations. French Prime Minister Georges Clemenceau was determined to avenge Germany’s humiliating defeat of France in 1870 — a&nbsp;war that France had started. Clemenceau wasn’t to be denied, since most of the fighting during World War I&nbsp;took place on French soil and the French suffered some 6&nbsp;million casualties. He made sure the Versailles Treaty obligated Germany to pay huge reparations and surrender a&nbsp;long list of assets including coal, trucks, guns, and ships — private property as well as property of the German government.</p> <p>Despite Wilson’s professed ideals about the self‐​determination of peoples who had been in multinational European empires, he didn’t stop the Allies from dividing German colonies among themselves. British Prime Minister David Lloyd George expanded the British Empire by seizing the former German colonies of Tanganyika and part of Togoland and the Cameroons. The French and British each gained authority over some territories of the defunct Ottoman Empire.</p> <p>The French and British bribed Italy to enter the war on their side by signing the secret Treaty of London (April 26, 1915) that promised Italy war spoils in Austria‐​Hungary, the Balkans, Asia Minor, and elsewhere — and the Italians wanted it all. They were outraged to find that the French and British planned on giving them little. The Japanese demanded Chinese territory and a&nbsp;statement affirming racial equality, and while they didn’t get those things, they ended up receiving German assets in China’s Shantung province, including a&nbsp;port, railroads, mines, and submarine cables.</p> <p>The second critical limit of Wilson’s power was that he couldn’t control what the losers did. For a&nbsp;while this didn’t seem to matter, since the Germans had been decisively defeated, their weapons were taken away, and they were broke.</p> <p>The vindictive surrender terms, made possible by American entry in the war and enshrined in the Treaty of Versailles, triggered a&nbsp;dangerous nationalist reaction. Hitler was able to recruit several thousand Nazis. Allied demands for reparations gave Germans incentives to inflate their currency and pay the Allies with worthless marks. The runaway inflation wiped out Germany’s middle class, and Hitler recruited tens of thousands more Nazis by appealing to those bitter people whom he referred to as “starving billionaires” — they might have had billions of paper marks, but they couldn’t afford a&nbsp;loaf of bread.</p> <p><strong>WHAT MIGHT HAVE BEEN</strong><br>Suppose, for a&nbsp;moment, that the United States had stayed out of World War I, and instead of a&nbsp;negotiated settlement there was a&nbsp;German victory on the Western Front. How bad might that have been? The Germans showed how harsh they could be in the Treaty of Brest‐​Litovsk (March 3, 1918) in which, as a&nbsp;condition for ending the war on the Eastern Front, they gained large chunks of territory including Ukraine, Georgia, Finland, and the Baltic states. If Germany had won on the Western Front, it would have acquired some French territory and maybe Belgium.</p> <p>The Germans probably wouldn’t have been able to enjoy their victory for long. Britain would have retained its independence, protected by its navy that might have continued the hunger blockade against Germany. In all likelihood, Germany would have become bogged down in endemic conflicts along the frontier with Russia, complicated by nationalist rebellions in the wreckage of Germany’s ally, Austria‐​Hungary. Such problems might have proven to be too much for the German army that was already struggling to put down mutinies. Bad as this would have been, even it was preferable to what did happen: the rise of Hitler, World War II, and the Holocaust.</p> <p>American entry in World War I&nbsp;helped produce another terrible consequence: the November 1917 Bolshevik coup in Russia. The country had been deteriorating ever since Czar Nicholas II entered the war in 1914. It led to millions of Russian casualties, drained the country’s finances, generated devastating inflation, caused pervasive shortages, and discredited the government and the army.</p> <p>France and Britain had to know they were playing with fire when they pressured the Russians to stay in the war so that German forces would continue to be tied up on the Eastern Front. The last thing France and Britain wanted was for Russia to make a&nbsp;separate peace with Germany and thereby enable the Germans to transfer forces to the Western Front. Allied pressure assured that the deterioration of Russia would continue or even accelerate.</p> <p>Following the spontaneous revolution and abdication of the czar in March 1917, Wilson authorized David Francis, his ambassador to Russia, to offer the Provisional Government $325 million of credits — equivalent to perhaps $3.9 billion today — if Russia stayed in the war. The Provisional Government was broke, and it accepted Wilson’s terms: “No fight, no loans.”</p> <p>Wilson was oblivious to the fact that ordinary Russians had nothing to gain from whatever happened on the Western Front, which was his sole concern. The Bolsheviks exploited deteriorating conditions brought on or aggravated by the war. They were the only ones on the Russian political scene who advocated withdrawal. Lenin’s slogan was “Peace, land, and bread.”</p> <p>For a&nbsp;while, despite all of Russia’s problems, the Bolsheviks weren’t able to make much headway. In elections for the Constituent Assembly, they never received more than a&nbsp;quarter of the votes. Lenin failed three times to seize power during the summer of 1917. It wasn’t until the fall of 1917, when the Russian army collapsed, that the Bolsheviks were able to seize power.</p> <p>The diplomat and historian George F. Kennan observed, “it may be questioned whether the United States government, in company with other western Allies, did not actually hasten and facilitate the failure of the Provisional Government by insisting that Russia should continue the war effort, and by making this demand the criterion for its support. In asking the leaders of the Provisional Government simultaneously to consolidate their political power and to revive and continue participation in the war, the Allies were asking the impossible.”</p> <p>What might have happened in Russia if the United States had stayed out of World War I? Russia almost certainly would have quit the war earlier, with the Russian Army still intact and capable of defending the Provisional Government from a&nbsp;Bolshevik coup.</p> <p><strong>CONCLUSION</strong><br>Thanks to Wilson’s misguided policies, the Bolshevik coup led to seven decades of Soviet communism. Historian R. J. Rummel estimated that almost 62 million people were killed by the Soviet government. He estimated that all 20th‐​century communist regimes killed between 110 million and 260 million people.</p> <p>Nothing Wilson did could compensate for the colossal blunder of entering World War I. He claimed his League of Nations would help prevent future wars, but charter members of the League of Nations were most of the winners of the war and their friends — countries that hadn’t been fighting each other. They vowed to continue not fighting each other. Member nations agreed to join in defending any of them that might be attacked, which meant that the league was another alliance. An attack on one member nation would lead to a&nbsp;wider war. The World War I&nbsp;losers weren’t members.</p> <p>Wilson’s admirers tend to blame postwar troubles on Republicans in Congress who refused to support his beloved League of Nations. Wilson’s arrogance toward Congress and his refusal to compromise had a&nbsp;lot to do with that. He failed to recognize that he couldn’t control his allies, he couldn’t control the losers, and he couldn’t control Congress. World War I&nbsp;should remind us that the consequences of war are extremely difficult to predict and often impossible to control. The world would have been better off if America had stayed out of that war and pursued a&nbsp;policy of armed neutrality.</p> </div> Mon, 02 Jun 2014 09:47:00 -0400 Jim Powell https://www.cato.org/policy-report/mayjune-2014/woodrow-wilsons-great-mistake How President Obama Could be Swept Away with His Executive Orders That Defy Congress and the Courts https://www.cato.org/publications/commentary/how-president-obama-could-be-swept-away-executive-orders-defy-congress Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Apparently President Obama has become convinced that he can make magic with that pen he keeps talking about, the one he plans to use for signing executive orders to revive his beleaguered presidency. Executive orders are irresistible, because a&nbsp;president doesn’t have to propose anything, debate the issues, endure hearings or solicit votes. An executive order can be issued in a&nbsp;few minutes — behind closed doors and away from bright lights.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Paul Begala, who was an advisor to President Bill Clinton, reportedly remarked, “Stroke of the pen, law of the land, kinda cool.”</p> <p>What about the Constitution? It describes presidential power broadly. There isn’t anything in the Constitution that authorizes an executive order or limits what a&nbsp;president can do with it.</p> <p>Executive orders arise from “implied constitutional and statutory authority,” the Congressional Research Service reported. “If issued under a&nbsp;valid claim of authority and published in the&nbsp;<em>Federal Register</em>, executive orders may have the force and effect of law.”</p> <p>Many executive orders are in a&nbsp;twilight zone of dubious constitutional legitimacy if not open defiance of the Constitution, especially when they amount to lawmaking without congressional approval.</p> <p>Presidents have made extravagant claims with their executive orders, as Harry Truman did when he issued executive order 10340 that directed the Secretary of Commerce to stop a&nbsp;steelworkers strike by seizing privately‐​owned steel mills. Truman insisted that a&nbsp;prolonged strike would impair the government’s ability to fight his undeclared “police action” in Korea. Truman’s Solicitor General Philip B. Perlman declared that Article II, Section 2&nbsp;of the Constitution “constitutes a&nbsp;grant of all the executive powers of which the Government is capable.”</p> <p>The case came before the Supreme Court as&nbsp;<em>Youngstown Sheet &amp;&nbsp;Tube Co. v. Sawyer</em>, 343 U.S. 579 (1952). Justice Robert Jackson — like Truman, a&nbsp;Democrat — was incredulous at the administration’s position. He said, “The example of such unlimited executive power that must have most impressed the forefathers was the prerogative exercised by King George&nbsp;III. The description of its evils in the Declaration of Independence leads me to doubt that they were creating their new Executive in his image. Continental European examples were no more appealing. And, if we seek instruction from our own times, we can match it only from the executive powers in those governments we disparagingly describe as totalitarian. I&nbsp;cannot accept the view that the clause is a&nbsp;grant in bulk of all conceivable executive power.”</p> <p>Justice Hugo Black, another Democrat, wrote the majority opinion invalidating the seizures. Black explained that an executive order&nbsp;(1) “must stem either from an act of Congress or from the Constitution itself” and (2) an executive order is on dubious ground if it’s “incompatible with the express or implied will of Congress.”</p> <p>There have been thousands of executive orders, so it’s hard for government to keep track of them all, and it’s even harder for ordinary citizens. In 1974, the Senate Committee on National Emergencies and Delegated Emergency Powers was surprised to discover that “Since March 9, 1933, the United&nbsp;States has been in a&nbsp;state of declared national emergency. There are now in effect four presidentially‐​proclaimed states of national emergency. In addition to the national emergency declared by President Roosevelt [during the Great Depression], there are also the national emergency proclaimed by President Truman on December 16, 1950, during the Korean conflict, and the states of national emergency declared by President Nixon on March 23, 1970 and August 15, 1971.”</p> <p>The committee report continued, “These proclamations give force to 470 provisions of Federal law, delegating to the President extraordinary powers, ordinarily exercised by the Congress, which affect the lives of American citizens in a&nbsp;host of all‐​encompassing manners…The President may seize property, organize and control the means of production, seize commodities, assign military forces abroad, institute martial law, seize and control all transportation and communication, regulate the operation of private enterprise, restrict travel, and in a&nbsp;plethora of particular ways, control the lives of all Americans.”</p> <p>President Obama’s admirers like to talk about the wonderful things can be done with executive orders, but the historical record has been mixed. Some have been fine, while many have backfired badly.</p> <p>Executive orders go back to the beginning of our country, although they weren’t called that. Usually they were referred to as proclamations.</p> <p>President George Washington’s first proclamation was on October 3, 1789. He said, “Both Houses of Congress have by their joint Committee requested me to recommend to the People of the United States a&nbsp;day of public thanksgiving.” This was authorized by Congress.</p> <p>Washington’s Neutrality Proclamation wasn’t authorized by Congress. Issued on April 22, 1793, it declared that the United States would be neutral in the war between France and Great&nbsp;Britain, which had begun two months before. Members of Washington’s cabinet, including Secretary of State Thomas Jefferson, agreed that the United States was too fragile to become involved in another war. So far, so good.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>While executive orders are attractive to presidents because they can be issued quickly, they can be revoked quickly, too.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Abraham Lincoln expanded presidential powers via proclamations and executive orders. He did this in the name of suppressing rebellion rather than waging war, since the Constitution gave Congress the power to declare war.</p> <p>In April 1861, a&nbsp;Maryland militia officer named John Merryman was arrested and detained at Fort McHenry in Baltimore. He was said to have damaged Union facilities and trained Confederate soldiers. His lawyer obtained a&nbsp;writ of habeas corpus from Chief Justice Roger B. Tawney who directed George Cadwalader, the commander at Fort McHenry, to produce Merryman and explain the facts and the legal basis for detention. Cadwalader refused, saying that Lincoln had suspended habeas corpus. Tawney cited him for contempt, but a&nbsp;marshal couldn’t enter the fort to deliver the contempt citation. Tawney wrote what became known as the&nbsp;<em>Ex Parte Merryman</em>&nbsp;opinion, saying, in part, that “If the authority which the Constitution has confided to the judiciary department may upon any pretext be usurped by the military power, the people of the United&nbsp;States are no longer living under a&nbsp;government of laws.”</p> <p>On September 24, 1862, Lincoln issued a&nbsp;proclamation officially suspending habeas corpus, which meant that the government could detain people indefinitely. Lincoln “managed the home front, in part,”historian Mark E. Neely, Jr. reported,&nbsp;“by means of military arrests of civilians — thousands and thousands of them.”</p> <p>Lincoln had issued executive orders expanding the amount of Union territory subject to military control, particularly southern Illinois, Indiana and Ohio where “copperheads” were operating. In 1864, the Union army arrested Lambdin Milligan and four others in southern Indiana. They were charged with plotting to free Confederate prisoners‐​of‐​war. A&nbsp;military court sentenced the men to death, but they appealed for their constitutional right to habeas corpus. After the Civil War, in 1866, the Supreme Court noted that Indiana wasn’t under attack, and civilian courts were functioning, so Milligan and the others were entitled to a&nbsp;jury trial there. Justice David Davis wrote: “The Constitution of the United States is a&nbsp;law for rulers and people, equally in war and in peace, and covers with the shield of protection all classes of men, at all times, in all circumstances.”</p> <p>Historian James G. Randall reflected, “No president has carried the power of presidential edict and executive order — independently of Congress — so far as [Lincoln] did. It would not be easy to state what Lincoln conceived to be the limit of his powers.”</p> <p>Lincoln’s best‐​known executive order was the Emancipation Proclamation. He hoped to provoke a&nbsp;slave revolt in the Confederacy and make it easier for the Union to win the Civil War. Accordingly, on September 22, 1862, he issued a&nbsp;preliminary Emancipation Proclamation. It applied to any state that didn’t return to the Union by January 1, 1863. No states returned. At that point, Lincoln issued the historic Emancipation Proclamation. It applied to slaves in the Confederacy — territory that the Union didn’t control. It neither abolished slavery nor extended citizenship to former slaves, but it did make the abolition of slavery a&nbsp;war aim.</p> <p>Until the early 20th century, executive orders were generally undocumented. They were addressed to a&nbsp;particular government agency which had the only copy. Nobody seemed to know how many executive orders there were. As late as the 1930s, there was an account, published in the&nbsp;<em>New York Times</em>, claiming that “there are no readily available means of ascertaining the true texts and history of the thousand or more executive orders issued since March 4, 1933.”</p> <p>The peacetime expansion of federal power began with Theodore Roosevelt who issued 1,006 executive orders, more than any previous president. They performed a&nbsp;wide range of administrative functions, especially the disposition of government‐​owned land.</p> <p>TR emphatically rejected the view that “what was necessary for the nation could not be done by the President unless he could find some specific authorization to do it…it was not only [the president’s] right but his duty to do anything that the needs of the nation demanded unless such action was forbidden by the Constitution or by the laws.”</p> <p>TR also said: “I think [the presidency] should be a&nbsp;very powerful office, and I&nbsp;think the President should be a&nbsp;very strong man who uses without hesitation every power the position yields.” He continued, “I&nbsp;believe in a&nbsp;strong executive. I&nbsp;believe in power.”</p> <p>According to biographer Henry Pringle, “It seldom occurred to Roosevelt that the duty of the executive was to carry out the mandates of the legislative. In so far as he was able, he reversed the theory. Congress, he felt, must obey the president.” He wanted the Supreme Court to obey him, too. Roosevelt acknowledged, “I did greatly broaden the use of executive power.”</p> <p>At times, TR seemed drunk with power, as when he remarked: “I don’t think that any harm comes from the concentration of power in one man’s hands.”</p> <p>Woodrow Wilson issued 1,791 executive orders. For instance, executive order 1810 (August 7, 1913) prohibited anyone from operating a&nbsp;flying machine or balloon across the Panama Canal Zone.&nbsp;Wilson issued executive order 1860 (November 11, 1913) to dictate interest rates for the Canal Zone — a&nbsp;surprising number of Wilson’s executive orders had to do with administering that little territory.</p> <p>Most of Wilson’s executive orders were issued during World War I. For instance, on April 14, 1917, he issued executive order 2594 to establish the Committee on Public Information — war propaganda. On April 28th, he issued executive order 2604 for censorship of messages sent via the trans‐​Atlantic cables. Executive order 2679-A (August 10, 1917) established the Food&nbsp;Administration. Executive order 2697 (September 7, 1917) required that anyone wishing to export coins, bullion or currency must file an application in triplicate with the nearest Federal Reserve bank. Executive order 2736 (October 23, 1917) authorized Food Administrator Herbert Hoover to requisition food. Executive order 2953 (September 12, 1918) authorized the sale of property seized in accordance with the Trading with the Enemy Act.</p> <p>Franklin D. Roosevelt issued 3,723 executive orders, more than any other U.S. president. In his Inaugural Address, he said: “I shall ask the Congress for the one remaining instrument to meet the [depression] crisis — broad executive power to wage a&nbsp;war against the emergency, as great as the power that would be given me if we were in fact invaded by a&nbsp;foreign foe.”</p> <p>On March 6, 1933, FDR issued Proclamation 2029 that cited Wilson’s Trading with the Enemy Act to justify ordering banks closed for a&nbsp;National Bank Holiday.</p> <p>FDR sent his Emergency Banking bill to the House of Representatives, and it was passed after only 38&nbsp;minutes of debate — apparently without members reading it.</p> <p>In 1933, FDR issued executive order 6102 that made it illegal for Americans to own gold bullion or gold certificates, even though historically gold provided the best protection against inflation and monetary crises. Violators faced the prospect of a&nbsp;fine up to $10,000 or up to 10&nbsp;years in prison.</p> <p>Since economic fascism was popular during the early 1930s, FDR issued executive orders to suspend antitrust laws and establish German‐​style cartels in dozens of industries, restricting total industry output, allocating market shares and fixing above‐​market wages and prices. Above‐​market wages discouraged employers from hiring, and above‐​market prices discouraged consumers from buying, so these executive orders weren’t good for the country. Among them:</p> <p>* 6204-A, for the rayon weaving industry</p> <p>* 6205-C, for the silk manufacturing industry</p> <p>* 6216, for the ship building and ship repairing industries</p> <p>* 6242-B, for electrical manufacturing</p> <p>* 6248, for the corset and brassiere industries</p> <p>* 6250, for theaters</p> <p>* 6253, for the fishing tackle industry</p> <p>* 6254, for the iron and steel industries</p> <p>* 6255, for the forest products industry</p> <p>* 6256, for the petroleum industry</p> <p>* 6543-A, for the drapery and upholstery industries</p> <p>With executive orders, FDR multiplied the number of government bureaucracies. He established the Civilian Conservation Corps by issuing executive order 6101. The Public Works Administration followed with executive order 6174. Then came these executive orders:</p> <p>* 6225, the Central Statistical Board</p> <p>* 6340, the Commodity Credit Corporation</p> <p>* 6420-B, the Civil Works Administration</p> <p>* 6433-A, the National Emergency Council</p> <p>* 6470, the Public Works Emergency Housing Corporation</p> <p>* 6474, the Federal Alcohol Control Administration</p> <p>* 6514, the Electric Home and Farm Authority</p> <p>* 6581, the Export‐​Import Bank of Washington</p> <p>* 6623, the Federal Employment Stabilization Office</p> <p>* 6632, the National Recovery Review Board</p> <p>* 6770, the Industrial Emergency Committee</p> <p>* 6777, the National Resources Board</p> <p>* 7027, the Resettlement Administration</p> <p>* 7034, the Works Progress Administration</p> <p>While some of the programs provided relief for desperate people, they failed to achieve a&nbsp;sustained revival of private sector job creation. Indeed, relief spending was the main reason government spending doubled and taxes tripled during the New Deal era (1933–1940). Where did the tax revenue come from? The biggest source of federal revenue was the federal excise tax on cigarettes, beer, soda, chewing gum and other cheap pleasures consumed disproportionately by poor and middle income people. This means the cost of relief programs for poor and middle income people was borne mainly by poor and middle income people. In May 1939, FDR’s Secretary of the Treasury Henry Morgenthau lamented, “We are spending more than we have ever spent before, and it does not work. After eight years of this administration, we have just as much unemployment as when he started.”</p> <p>New Deal unemployment averaged 17&nbsp;percent, and it didn’t go down significantly until the government began removing more than 10 million men from the civilian work force via military conscription for World War II.</p> <p>FDR’s most controversial executive order was 9066 which he issued on February 19, 1942. It established the War Relocation Authority to forcibly move Japanese‐​Americans away from the Pacific Coast into “relocation camps” for the duration of World War II. About 70 percent of these people were second‐​generation, born in the United States. Three individuals,&nbsp;Fred Korematsu, Gordon Hirabayashi and Minoru Yasui, were convicted of refusing to comply with internment. The case went up to the Supreme Court which upheld FDR’s executive order in&nbsp;<em>Korematsu v. United States</em>, 323 U.S. 214 (1944). The majority opinion&nbsp;asserted that protecting against potential Japanese espionage was more important than protecting individual rights. Six of FDR’s 8&nbsp;appointees sided with him against the interned Japanese. The lone Republican appointee, Owen Roberts, was opposed.</p> <p>FDR’s Solicitor General Charles Fahey, who argued the case before the Supreme Court, allegedly suppressed reports by the FBI and the Office of Naval Intelligence, showing that there wasn’t any evidence Japanese‐​Americans posed a&nbsp;security threat to the United States. The suppressed reports came to light years later, and the convictions were overturned November 10, 1983 by the U.S. District Court for the Northern District of California, thereby eliminating the case as a&nbsp;possible precedent for future arbitrary imprisonment.</p> <p>President&nbsp;Nixon issued two executive orders that had unfortunate consequences.</p> <p>On August 15, 1971, he announced his New Economic Policy, which happened to be what Bolshevik firebrand Vladimir Lenin called one of his misadventures. Nixon issued executive order 11615 that declared: “to stabilize the economy, reduce inflation, and minimize unemployment, it is necessary to stabilize prices, rents, wages, and salaries.” These controls failed to stop inflation which hit double‐​digits during the 1970s, and they caused chronic shortages, rationing and business disruption — making it harder to create private sector jobs. By maintaining below‐​market prices, controls simultaneously encouraged producers to provide less, while encouraging consumers to demand more. Hence, the shortages.</p> <p>Although this experience with price controls had been a&nbsp;flop, Nixon decided to try again. On June 13, 1973, he signed executive order 11723 that called for a&nbsp;freeze on prices, while he continued to control wages, salaries and rents.</p> <p>Nixon’s executive orders made a&nbsp;bad situation worse. For instance, his price control administrator C.&nbsp;Jackson Grayson confessed: “lumber controls were beginning to lead to artificial middlemen, black markets and sawmill shutdowns. Companies trapped with low base‐​period profit margins were beginning to consider selling out those with higher base periods, sending their capital overseas, or reducing their efforts. Instances of false job upgrading — which were actually ‘raises’ in disguise — were reported. To keep away from profit‐​margin controls, companies were considering dropping products where costs, and thus prices, had increased. And shortages of certain products (like molasses and fertilizer) were appearing because artificially suppressed domestic prices had allowed higher world prices to pull domestic supplies abroad.”</p> <p>In 1999, Bill Clinton waged war with executive orders. He issued executive order 13088 that declared the governments of the Federal Republic of Yugoslavia (Serbia and Montenegro) and the Republic of Serbia posed “an extraordinary threat to the national security and foreign policy of the United States.” Therefore, Clinton proclaimed a “national emergency.” He ordered the seizure of property belonging to the named governments in the United States, and he prohibited Americans from conducting commercial transactions with those governments. Clinton’s executive order 13119 declared that the region was a&nbsp;war zone. Executive order 13120 summoned military reserve units for active duty.</p> <p>None of this was authorized by Congress. On the contrary, Congress voted down a&nbsp;resolution to declare war. Congress wouldn’t “authorize” the air war. Clinton ignored Congress and kept America in the war. When, on June 10, 1999, NATO announced it was over, Clinton ordered American soldiers to serve in the Kosovo Force.</p> <p>Not long after that, we found ourselves in an open‐​ended national emergency declared on September 14, 2001 and extended since by both George W. Bush and Barack Obama. This means the president has standby powers from hundreds of statutes that would enable him to re‐​introduce military conscription, seize private property and in myriad ways establish a&nbsp;government‐​run economy.</p> <p>How could an executive order be revoked?</p> <p>First, an executive order can be revoked by another executive order. Probably all presidents revoke some executive orders by their predecessors.</p> <p>For example, Bill Clinton’s executive order 12919, issued on June 3, 1994, was about national security. It revoked all or part of more than a&nbsp;dozen executive orders issued between 1939 and 1991.</p> <p>President Obama revoked executive orders 13258 (2002) and 13422 (2007), both of which were issued by George W. Bush, and Obama amended executive order 12866 (1993) which had been issued by Bill Clinton. These executive orders had to do with regulatory processes.</p> <p>So, while executive orders are attractive to presidents because they can be issued quickly, they can be revoked quickly, too.</p> <p>Second, an executive order can be revoked by legislation. Reportedly every president since Grover Cleveland has had some of his executive orders modified or revoked by legislation.</p> <p>The Congressional Research Service cited a&nbsp;number of examples: “in 2006, Congress revoked part of an executive order from November 12, 1838, which reserved certain public land for lighthouse purposes. Congress has also explicitly revoked executive orders in their entirety, such as the Energy Policy Act of 2005 which revoked a&nbsp;December 13, 1912 executive order that created Naval Petroleum Reserve Number 2.” An executive order by President George H.W. Bush, to establish a&nbsp;human fetal tissue bank for research purposes, was revoked when Congress declared that ‘the provisions of Executive Order 12806 shall not have any legal effect.’”</p> <p>Third, an executive order can be revoked by a&nbsp;federal appeals court or the Supreme Court.</p> <p>For example, President Clinton’s executive order12954 prohibited the federal government from hiring contractors who replaced strikers. He argued that strikers can become violent when they’re replaced, so it would be better to appease strikers and support union workplace monopolies by banning replacements.</p> <p>But executive order 12954 conflicted with&nbsp;a&nbsp;7–0 U.S. Supreme Court decision in&nbsp;<em>NLRB v. Mackay Radio &amp;&nbsp;Telegraph Company</em>,&nbsp;304 U.S. 333&nbsp;(1938),. In part, that court decided “[The employer] is not bound to discharge those hired to fill the places of strikers.”</p> <p>D.C. Circuit Judge Laurence Silberman said, “We think it untenable to conclude that there are no judicially enforceable limitations on presidential actions [enabling] the President to bypass scores of statutory limitations on governmental authority.”&nbsp;Accordingly, the U.S. Court of Appeals for the D.C. Circuit revoked Clinton’s executive order in&nbsp;<em>Chamber of Commerce v. Reich,</em>&nbsp;74&nbsp;F.3d 1322&nbsp;(D.C. Cir. 1996). </p> <p>While executive orders look like an easy option for a&nbsp;beleaguered president, they increase the temptation to over‐​reach. They’re likely to inflame controversy and motivate opponents to further mobilize their forces. In the end, when opponents come to power again, whatever has been established with executive orders is most vulnerable to being swept away by a&nbsp;whirlwind.</p> </div> Thu, 30 Jan 2014 15:02:00 -0500 Jim Powell https://www.cato.org/publications/commentary/how-president-obama-could-be-swept-away-executive-orders-defy-congress What to Do If and When Obamacare Collapses https://www.cato.org/publications/commentary/what-do-when-obamacare-collapses Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>It’s too soon to write an epitaph for Obamacare, but its crises are piling up so fast that one has to begin looking ahead.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Obamacare combines a&nbsp;government‐​run health care crisis, a&nbsp;financial crisis and a&nbsp;constitutional crisis.</p> <p>By spending $650 million on a&nbsp;no‐​bid contract, awarded to a&nbsp;firm with political connections to the White House, for the problem‐​plagued Obamacare website — the administration made clear that it cannot handle money. The website has processed only a&nbsp;quarter of the meager sign‐​ups, with the rest handled by 14 state‐​run exchanges that also have problems and cost taxpayers an additional $4.4 billion.</p> <p>The initial “glitches” turned out to be chronic, and the website repeatedly crashed when Secretary of Health and Human Services Kathleen Sebelius tried to demonstrate its alleged wonders. Revelations of deeper problems continue to be reported, like the fact that important website components aren’t even developed yet. More and more people recognize that it’s reckless to fill out Obamacare applications, since they require all the personal information hackers need to steal people’s identity, and meaningful security is lacking.</p> <p>Meanwhile, there’s mounting chaos as Obamacare causes millions of people to lose their individual health insurance policies, their doctors, their hospitals and even their life‐​saving treatments.</p> <p>In 2014, we can expect to see perhaps 100 million people panic as the Obamacare employer mandate triggers more layoffs and the dumping of group health insurance plans.</p> <p>So many people are suffering from sticker shock at Obamacare’s inflated premiums that they’re holding onto their money and cutting back wherever they can. Consumer holiday spending is likely to take a&nbsp;hit. Anxious retailers reportedly are starting to offer discounts early.</p> <p>Americans have become accustomed to more freedom, more choices in just about everything, but now Obamacare is restricting our freedom. It’s all about things we can’t keep and things we must do or pay penalties. Government bureaucracies gain unlimited power over our health care, controlling some of the most intimate aspects of our lives.</p> <p>Financially, Obamacare is doomed as long as young, healthy people want nothing to do with it and as long as sign‐​ups are dominated by older people, many with pre‐​existing conditions, who want free Medicaid.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>Here are some guiding principles for an alternative to Obamacare and single‐​payer.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Obamacare costs could explode because of expanded mental illness coverage alone. The National Institute of Mental Illness estimated that about 57 million people “suffer from a&nbsp;diagnosable mental disorder.” Mental illnesses, noted the <em>New York Times</em>, are viewed as “chronic lifelong diseases,” suggesting that mentally ill people could collect benefits for life. Because mental illness doesn’t necessarily have physical symptoms, it’s difficult to diagnose and costly to treat, there could be quite a&nbsp;bit of fraud.</p> <p>As more and more sick people sign up, premiums will skyrocket, and fewer and fewer healthy people will buy it. The only way to get healthy people to sign up for Obamacare would be to use coercion and compulsion — perhaps call out the army and have it force Obamacare down people’s throats at the point of a&nbsp;gun.</p> <p>Not to be overlooked: if insurance companies incur huge losses because they ended up mainly covering sick people, the Obamacare law — specifically provisions referring to “cost offsets” or “risk corridors” — provide that the insurers will be bailed out. The bailout could blow a&nbsp;big hole in the federal budget. Nobody knows how many billions of dollars such a&nbsp;bailout might cost.</p> <p>Obamacare’s biggest problem is adverse selection, and it can’t be fixed because that’s the way it’s built. Fixing Obamacare would be like trying to fix a&nbsp;building by removing all the steel and concrete. The only way to fix Obamacare would be to destroy it, but probably that won’t be necessary if it collapses. Big losses in 2014 would mean dramatic premium hikes in 2015, and that could be the year Obamacare comes crashing down.</p> <p>Meanwhile, Obama has usurped legislative power delegated to Congress under our Constitution by repeatedly issuing decrees to change Obamacare deadlines, to disregard Obamacare provisions that are politically inconvenient, and to exempt his cronies, members of Congress and their staffs from Obamacare costs and restrictions imposed on everyone else. None of these actions are authorized anywhere in the Obamacare law. They’re the kinds of arbitrary actions more often associated with a&nbsp;dictatorship than with a&nbsp;constitutional democracy, and if Congress doesn’t stop him, then Americans have a&nbsp;problem.</p> <p>More than a&nbsp;century ago, Alexis de Tocqueville, the most perceptive foreign observer of America, anticipated the situation we find ourselves in now. “Above this race of men,” he warned, “stands an immense power, which takes upon itself alone to watch over their fate. That power is absolute. It would be like the authority of a&nbsp;parent if its object was to prepare men for manhood, but it seeks to keep them in perpetual childhood. It seeks to be the sole agent and the only arbiter of their happiness.”</p> <p>As Obamacare problems multiply, the administration seems likely to beat the drums for a&nbsp;single‐​payer government monopoly of health insurance. Obama, after all, has said “I happen to be a&nbsp;proponent of the single‐​payer universal health insurance.” [<a href="http://www.youtube.com/watch?v=fpAyan1fXCE" target="_blank">http://​www​.youtube​.com/​w​a​t​c​h​?​v​=​f​p​A​y​a​n​1fXCE</a>]</p> <p>Yet despite all the problems with the American health care system, our level of care is still among the highest in the world, and large numbers of people were happy with what they had. It made sense to fix the problems and make more people better off, rather than throw out everything, cause brand new problems and make millions of people worse off as Obamacare is doing.</p> <p>Accordingly, here are some guiding principles for an alternative to Obamacare and single‐​payer, an alternative that could help us deal with new as well as old problems, while restoring our freedom to choose.</p> <p>1. People should be free to decide what’s in their health insurance plan, considering their needs and their budget. Obamacare’s coverage mandates mean that policies have coverage many people don’t want and costs they cannot afford. If, for example, some men want maternity benefits, let them choose that option and pay for it, but let’s not force it on everybody — or force other people to subsidize it.</p> <p>2. People should be free to choose among health insurance companies, and health insurance companies should be free to choose among applicants. For any particular individual, some companies are likely to be a&nbsp;better fit than others, and performance records vary from company to company.</p> <p>3. People should be free to shop for health insurance across state lines. The Commerce Clause of the Constitution was intended to prevent states from erecting barriers to trade, but state insurance regulations do that. They limit the ability of out‐​of‐​state insurance companies to compete in the state, and they deny the freedom of state residents to choose insurance available from companies based in other states. These regulations should be struck down, so that free competition will give consumers more choices, help drive down premiums and encourage innovation.</p> <p>4. People should be free to choose among doctors, and doctors should be free to choose among patients. The government should neither force patients to work with some doctors nor prevent patients from working with other doctors.</p> <p>5. No government should have the power to force people to have some medical treatments or prevent people from having other medical treatments.</p> <p>6. People should be free to choose among hospitals and other health care facilities, and these should be free to choose among patients.</p> <p>7. The most effective plan for most people to cover health care costs probably would include the following elements:</p> <p>(A) A&nbsp;major medical insurance policy for catastrophic expenses</p> <p>(B) A&nbsp;high deductible to minimize insurance premiums</p> <p>(C) A&nbsp;tax‐​advantaged health savings account built up with regular contributions to cover medical expenses below the deductible</p> <p>(D) A&nbsp;guaranteed‐​renewable (sometimes referred to as non‐​cancellable) feature that means the insurer will continue covering a&nbsp;policyholder regardless of medical conditions, as long as premiums are paid on time</p> <p>(E) A&nbsp;health‐​status feature to protect against the risk that future premiums might rise significantly if a&nbsp;policyholder develops medical conditions involving higher medical expenses</p> <p>Health‐​status insurance is a&nbsp;relatively new idea, and the <a href="https://object.cato.org/sites/cato.org/files/pubs/pdf/pa-633.pdf">best explanation of it</a> is by John H. Cochrane, a&nbsp;finance professor at the University of Chicago’s Booth School of Business, a&nbsp;research associate at the National Bureau of Economic Research and a&nbsp;senior fellow at the Hoover Institution, Stanford University.</p> <p>(F) All insurance policies should be owned by the insured, not their employers or anyone else. This means wherever one might move, the insurance policies will follow. Similarly, divorce won’t result in the loss of health insurance.</p> <p>(G) Each health insurance owner should receive a&nbsp;standard deduction for health insurance premiums on his or her federal income tax return.</p> <p>8. Before doctors perform risky procedures, there should be a&nbsp;legally‐​enforceable contract specifying the maximum damages award a&nbsp;patient might seek if something goes seriously wrong. A&nbsp;doctor might offer to accept a&nbsp;greater potential award with a&nbsp;higher fee and accept a&nbsp;lower fee if a&nbsp;patient has confidence and agrees to a&nbsp;lesser potential award.</p> <p>While serious medical mistakes are a&nbsp;problem for which patients deserve compensation, a&nbsp;doctor shortage is a&nbsp;problem, too. Unpredictable, high damages awards are factors that discourage doctors from practicing in jurisdictions where they fear possible financial ruin. In Texas, medical liability caps attracted a&nbsp;surge of doctors into the state, relieving the doctor shortage there.</p> <p> </p><hr width="75%"><p>What about pre‐​existing conditions?</p> <p>For starters, there are only about 2&nbsp;million uninsured people who cannot obtain insurance because of pre‐​existing conditions. That’s a&nbsp;lot of people, but it compares with 12 million people who have individual insurance policies and almost 160 million who have employer‐​provided insurance.</p> <p>Point 7(F) above, providing that each health insurance policy should be owned by the person insured, will do much to minimize the number of people who might have difficulty obtaining insurance because of pre‐​existing conditions. If you own your policy, it will go wherever you go, and you would never lose coverage when you change jobs or are between jobs.</p> <p>All you need to do is buy health insurance before you have anything that might be considered a&nbsp;pre‐​existing condition and then pay your premiums on time.</p> <p>Point 1&nbsp;above, your freedom to choose what’s in your plan, means that if you’re on a&nbsp;tight budget and can afford only the cheapest, most basic health insurance policy, that’s what you can get. You won’t be priced out of the market by mandates piling on costly coverage that’s a&nbsp;low priority for you.</p> <p>Point 7(G) above, a&nbsp;standard deduction for health insurance premiums, will help you pay your premiums.</p> <p>Point 3&nbsp;above, freedom to shop for health insurance across state lines, enables you to gain the benefits of competition. You could take advantage of policies that offer the most coverage for your money, regardless where the insurers might be located.</p> <p>Point 7(B), a&nbsp;high deductible major medical policy, will minimize premiums, and Point 7(C), a&nbsp;tax‐​advantaged health savings account, will help you pay out‐​of‐​pocket medical expenses below the deductible amount.</p> <p>Point 7(D), a&nbsp;guaranteed‐​renewable feature, gives you assurance that as long as you pay your premiums on time, your health insurance coverage is unaffected by any medical conditions that might develop.</p> <p>Point 7(E), a&nbsp;health‐​status feature, protects you from premium increases that might otherwise result from a&nbsp;medical condition in the future.</p> <p>Finally, there’s nothing in this alternative that forces some people to subsidize other people’s issues.</p> <p>The most important thing government can do for people with little money for health insurance or much else is to pursue aggressive pro‐​growth policies that make it inexpensive and easy for entrepreneurs to start businesses, expand businesses and hire people. For example:</p> <p>• Recognize that the federal and state governments as well as many municipalities face severe fiscal crises because of runaway entitlement spending and unfunded liabilities for government employee pension and health insurance plans.</p> <p>• Cap spending and then begin gradual annual spending cuts by reducing the number of functions performed by government and reducing the number of government employees, so the cost of government — the biggest cost most people face — can be cut, and so that government can focus on providing core services well.</p> <p>• Recognize that because governments generally spend all available revenue and then some, tax increases lead to higher spending, more deficits and debt.</p> <p>• Recognize that endlessly hiking taxes provides strong incentives for employers and taxpayers to flee for lower‐​cost jurisdictions — which tends to mean fewer jobs in high‐​cost jurisdictions.</p> <p>• Cut federal personal income taxes across‐​the‐​board.</p> <p>• Phase out state and municipal income taxes</p> <p>• Abolish the corporate income tax — corporations don’t really pay it, since it’s a&nbsp;cost of doing business that’s factored into the prices consumers pay for goods and services. Abolishing the corporate income tax could serve as a&nbsp;magnet for employers who want to become more competitive.</p> <p>• Cut business taxes across‐​the‐​board</p> <p>• Streamline land use regulations, making it possible to develop projects more quickly and at lower cost.</p> <p>• Closed‐​shop states should aim to become right‐​to‐​work states, attracting more employers and increasing the demand for labor.</p> <p>• Governments shouldn’t go into business and try to pick winners, since governments don’t have a&nbsp;crystal ball, and they tend to lose a&nbsp;lot of money.</p> <p>• Don’t waste money paying big employers to remain in a&nbsp;state, since that’s a&nbsp;budget item that generates upward pressure on taxes. Focus on making a&nbsp;state an inexpensive, easy place to hire people, to grow and prosper.</p> <p>As John F. Kennedy famously remarked, when there’s rapid growth — annual rates reached 7&nbsp;percent during the Reagan years — it “lifts all boats.” More people have jobs, more of the jobs are full‐​time, there’s more upward mobility as employers grow, and it’s easier for people to get more for their money, including health insurance.</p> <p></p><br><hr width="75%"> <p>This alternative I’ve outlined would have 5&nbsp;big advantages over Obamacare:</p> <p>First, an incremental approach is much simpler, less costly and less hazardous than trying to remake one‐​sixth of the American economy which, as Obama admitted, is more complicated than he had imagined. With an incremental approach, there are likely to be fewer large, unintended consequences and more time to make adjustments before much harm is done.</p> <p>Second, the alternative outlined here would avoid the perverse Obamacare incentives for employers to limit the hiring of full‐​time people who desperately need jobs.</p> <p>Third, the overwhelming majority of Americans who find policies they like and can pay for won’t be disrupted. They’ll keep their policies as long as they want and change policies whenever they need to. Millions of precious doctor‐​patient relationships will be untouched, and access to hospitals of choice won’t be restricted. Suddenly, millions of Americans would calm down as the government stops messing around with their lives.</p> <p>Fourth, this alternative avoids the skyrocketing losses that can result from adverse selection.</p> <p>Fifth, this alternative avoids Obamacare’s gross unfairness to young, healthy people who will be forced to pay inflated premiums — often double or triple the health care costs that they’re paying for now. All this is in addition to the vast transfer of resources from young people who pay payroll taxes to help cover the unfunded liabilities of Social Security and Medicare — even though young people have the lowest average net worth of any adult age group, and older people have the highest average net worth of any age group.</p> <p>If, amidst the collapse of Obamacare, the president launches a&nbsp;blitzkrieg for a&nbsp;single‐​payer monopoly, it will probably be impossible to resist without an alternative. We will need public awareness of and support for a&nbsp;simple, positive program that can help protect our vital freedom to choose. Maybe some of the points discussed here would be part of it.</p> </div> Fri, 22 Nov 2013 09:52:00 -0500 Jim Powell https://www.cato.org/publications/commentary/what-do-when-obamacare-collapses The Fourth Obamacare Shock Wave Is about to Reach Us https://www.cato.org/publications/commentary/fourth-obamacare-shock-wave-about-tto-reach-us Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Obamacare is intensifying the doctor shortage — though not in ways that were anticipated.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Everybody seems to have expected that Obamacare would sign up some 30 million people who don’t have health insurance, and they would overwhelm doctors’ offices. But these people — especially the young and healthy whose sky‐​high Obamacare premiums were supposed to finance everybody else’s subsidies — have stayed away. They know a&nbsp;bad deal when they see&nbsp;one.</p> <p>Although the young and healthy aren’t going for Obamacare, the doctor shortage is intensifying, because government intervention generally is making it more expensive and difficult for doctors to do their job.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>Obamacare is intensifying the doctor shortage — but not in ways that were anticipated.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Government‐​run Romneycare — the model used for Obamacare — was enacted in Massachusetts in 2006, and a&nbsp;recent survey by the Massachusetts Medical Society found that half the state’s primary care practices aren’t accepting new patients. At practices accepting new patients, the average wait to see a&nbsp;family physician is 39&nbsp;days, and the average wait to see an internal medicine physician is 50&nbsp;days.</p> <p>Because so many people in Massachusetts don’t have a&nbsp;doctor, there has been a&nbsp;sharp increase in the number of emergency room visits. Stressed‐​out emergency room nurses are talking about possible strikes.</p> <p>Medicare has multiplied the number of people who can’t see a&nbsp;doctor. Medicare reimbursement rates are about 40 percent less than private insurance reimbursement rates. Consequently, according to the Centers for Medicare and Medicaid Services, the number of doctors who no longer accept Medicare patients has tripled during the last three years.</p> <p>Only about half of doctors accept new Medicaid patients, and the number appears to be declining as a&nbsp;consequence of lagging reimbursement rates, long reimbursement delays and high administrative burdens associated with Medicaid patients. Yet Obamacare is rapidly expanding the number of people on Medicaid.</p> <p>Obamacare reimbursement rates are lower than Medicare. Obamacare has a&nbsp;special disadvantage, too: a&nbsp;90‐​day grace period. This means people can buy an Obamacare policy, have costly procedures done and then cancel the policy within 90&nbsp;days. If the cancellation comes during the first 30&nbsp;days, the insurer is responsible for trying to collect payment, but after that, doctors are on their own. They would have to spend time and money chasing patients for payments. California Healthline reported that deadbeats “would not receive a&nbsp;fine, a&nbsp;premium rate increase or a&nbsp;repayment order. They also would not be barred from purchasing another subsidized plan during the next enrollment period.” No other type of health insurance has a&nbsp;90‐​day grace period like this.</p> <p>Missouri Hospital Association CEO Herb Kuhn and Missouri State Medical Association Executive VP Thomas Holloway warned that that the policy “puts doctors at an unfair and significant risk for providing uncompensated care to patients.”</p> <p>Doctors are worried about potentially huge liabilities as they try to comply with Obamacare’s mandate to digitize medical records. Computer errors relating to test results, medication doses or other crucial information could have terrible consequences for doctors as well as patients. Medical records software tends to be complicated and not always reliable. Sometimes software vendors are no help. With fully‐​booked schedules, doctors have difficulty finding large chunks of time needed to deal with software‐​related Obamacare deadlines.</p> <p>Most doctors who don’t accept Obamacare, Medicare or Medicaid serve patients with private group health insurance provided by their employers. This applies to about two‐​thirds of the population under 65 — almost 160 million people. However, that market is expected to shrink as many employers dump their plans, because it can be cheaper to pay penalties than to pay Obamacare premiums.</p> <p>More primary care doctors are likely to go off private insurance networks as well as Obamacare, Medicare and Medicaid, transitioning to concierge arrangements. These involve paying an annual fee — often ranging from $1,500 to $2,500 — for access to doctors. Patients can get immediate appointments, they spend more time with doctors, and a&nbsp;comprehensive physical might be included. Concierge medicine offers participating patients and doctors welcome relief from frantic assembly‐​line practices, but it dramatically reduces the number of patients served — perhaps as much as 80 percent. One doctor, for example, reduced his patient load from about 2,600 to about 550.</p> <p>Some doctors go off networks and continue their usual routines, but they accept only cash, checks or credit cards. Such doctors seem to cut their prices about 50 percent, since they don’t have all the billing paperwork and the staff needed to handle it, and they don’t wait months to get paid by Obamacare, Medicare or Medicaid.</p> <p>Meanwhile, major health insurance companies are dumping doctors from Medicare Advantage networks. Among the most recent cases was United Healthcare that announced its decision to cut some 2,250 doctors in Connecticut — about 19 percent of the network total.</p> <p>This was the occasion for a&nbsp;tumultuous town hall meeting in affluent Westport where a&nbsp;parade of Democratic politicians — headed by Connecticut’s senior U.S. Senator Richard Blumenthal — piled on the insurance company, calling it arrogant, greedy and unconscionable.</p> <p>During this two‐​hour gathering, none of the politicians acknowledged that they wholeheartedly supported Obamacare. Nor did they mention the real reason the docs were dumped. Namely: Medicare Advantage involved subsidies enabling many people to have policies for zero premiums. Obamacare called for cutting those subsidies 85 percent, so the funds could be re‐​directed to subsidize Obamacare — part of a $500 billion transfer of funds from Medicare to Obamacare. All this was known three years ago when Obamacare was enacted. The AARP certainly knew about it when they promoted Obamacare.</p> <p>Lawyers representing the Fairfield County Medical Association and the Hartford County Medical Association conceded that by taking money out of Medicare, specifically cutting Medicare Advantage subsidies, Obamacare prompted the doc dumping. The lawyers wrote, “By terminating numerous physicians from the Medicare Advantage networks, United seeks to stem financial losses occasioned by reduced federal payments.” What in the world did lawmakers think would happen when they voted for Obamacare?</p> <p>That’s not all. Obamacare authorized the Centers for Medicare and Medicaid Services, a&nbsp;bureaucracy in the Department of Health and Human Services, to rate Medicare Advantage plans. High‐​rated plans entitled insurance companies to collect bonus payments from Medicare. United Healthcare reportedly collected $540 million of such payments in 2012.</p> <p>Administration officials decided on more than 50 performance measures and 5&nbsp;different rating systems: the Healthcare Effectiveness Data And Information Set (HEDIS), Consumer Assessment Of Healthcare Providers And Systems (CAHPS), Health Outcomes Survey (HOS) and Independent Review Entity (IRE), as well as the Centers for Medicare And Medicaid Services (CMS). All this is a&nbsp;fancy way of saying government officials, not doctors and patients, are increasingly shaping key decisions about health care — not least, which docs are dumped.</p> <p>What might Obama do amidst a&nbsp;tsunami of protests from angry multitudes who don’t have access to a&nbsp;doctor, regardless whether they have health insurance?</p> <p>Obama might try to intimidate doctors like he intimidated Chief Justice John Roberts into switching his vote to uphold Obamacare. Doctors should brace themselves for the same kind of venomous denunciations that Obama has aimed at millionaires and billionaires.</p> <p>Since Obama is an avowed progressive, and previous progressive presidents have given us compulsory measures like government monopolies, income taxes and military conscription — he might consider using force with doctors. Perhaps an executive order establishing a&nbsp;doctor’s mandate to serve a&nbsp;minimum number of Obamacare patients as a&nbsp;condition for renewing their medical licenses. Obama could cite the fact that we’re in a&nbsp;state of emergency, originally declared by President George W. Bush on September 23, 2001,&nbsp;<a href="http://www.gpo.gov/fdsys/pkg/FR-2012-03-22/pdf/2012-7019.pdf" target="_blank">renewed in 2012</a>&nbsp;and most recently&nbsp;<a href="http://www.whitehouse.gov/the-press-office/2013/09/18/notice-continuation-national-emergency-respect-persons-who-commit-threat" target="_blank">extended by Obama on September 18, 2013</a>.</p> <p>But this could backfire, because the average age of doctors is about 56, which means the most likely outcome would be a&nbsp;surge of doctor retirements.</p> <p>The worsening doctor shortage looms as the fourth Obamacare shock wave, following the $650&nbsp;million website that didn’t work, cancelled insurance coverage threatening millions and sticker shock from Obamacare policies costing perhaps double what people had paid for the private insurance policies they liked and were promised they could keep. Such shock waves have led to the downfall of seemingly invincible regimes.</p> </div> Wed, 13 Nov 2013 11:10:00 -0500 Jim Powell https://www.cato.org/publications/commentary/fourth-obamacare-shock-wave-about-tto-reach-us Could a Peaceful, Well‐​Organized Protest Movement Help Save Us from Obamacare? https://www.cato.org/publications/commentary/could-peaceful-well-organized-protest-movement-help-save-us-obamacare Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Principled House votes, brave Senate filibusters and aggressive Capitol Hill lobbying have failed to save us from Obamacare, in part because they’re inside‐​the‐​beltway strategies, all wrong for the situation we find ourselves in now — namely, millions of Americans alarmed because, contrary to President Obama’s cynical promises, we cannot keep the health insurance policy we like, we cannot work with the doctor we like, we face astronomical Obamacare premiums, and we fear catastrophic health care costs if we go without insurance.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>What could concerned citizens do now?</p> <p>Well, we already tried staying home and watching TV to see what Washington might do.</p> <p>The worst option would be to remain passively on the sidelines, hoping for the best, waiting to see whether Republicans will come up with enough compelling candidates and focus on an effective strategy or whether Republicans will become distracted by other issues and self‐​destruct amidst intramural struggles. Sometimes it seems Republicans have a&nbsp;talent for snatching defeat from the jaws of victory.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>Ordinary people in tough circumstances have changed history before, and it’s possible we could do it again.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Concerned citizens need to consider a&nbsp;more pro‐​active strategy that will generate pressure on members of Congress from both parties to save us from Obamacare. Most people seem to think that means running to Washington, but actually pressure must be generated out in the country where we live, among voters in the 50 states, and pressure must be directed at Washington. The most effective way to change the direction that the wind blows in Washington is to change the direction that the wind blows in states and congressional districts.</p> <p>Now in pain because of Obamacare, increasing numbers of Americans might be motivated enough to participate in nonviolent nation‐​wide protests, to testify about how their policies were cancelled, how their premiums skyrocketed, how they were denied access to their doctors and how they’re gaining new hope through solidarity.</p> <p>People who show up for a&nbsp;well‐​organized protest attract more media camera crews than somebody writing a&nbsp;blog. Also, people who take the trouble of showing up someplace tend to be more highly motivated than people who stay at home. So, well‐​organized protests can make a&nbsp;difference.</p> <p>Ordinary people in tough circumstances have changed history before, and it’s possible we could do it again. Just recall some of the most successful mass movements. None of them developed in a&nbsp;capital where entrenched interests govern. All were started by people nobody heard of.</p> <p>As we know, the American civil rights movement started in Birmingham back in December 1955 when Rosa Parks, a&nbsp;tailor’s assistant, refused to move to the back of a&nbsp;bus as required by local ordinances supporting compulsory racial segregation. The focus of what became the nonviolent civil rights movement moved from place to place, wherever there were outrageous civil rights violations and large numbers of people who could be mobilized. Although Martin Luther King was the most famous leader, it was a&nbsp;big movement with many capable leaders.</p> <p>The fabled 1963 March on Washington happened late in the civil rights movement. It was a&nbsp;climax, not a&nbsp;beginning. It attracted the huge crowd that it did, because it came after the movement had mobilized support throughout the country and after civil rights strategists gained a&nbsp;lot of experience organizing protests.</p> <p>The movement to achieve equal rights for women began in Seneca Falls, New York, in July 1848, when housewife Elizabeth Cady Stanton drafted her Declaration of Rights and Sentiments and gathered like‐​minded people to discuss what they could do next. She focused on equal property rights and, to help secure those, she sought the right to vote. She formed the Woman Suffrage Association of America and served as president of the National Woman Suffrage Association. She criss‐​crossed the country, giving speeches, as she recalled, “in log cabins, in depots, unfinished school houses, churches, hotels, barns, and in the open air.”</p> <p>Because Stanton needed to take care of a&nbsp;large family, she teamed up with Susan B. Anthony, a&nbsp;single woman who could remain on the road for longer periods, and Stanton drafted Anthony’s speeches as well as articles and proposed legislation. Incredibly, the nonviolent movement that Stanton and Anthony led kept going for 70&nbsp;years, until American women had the right to vote.</p> <p>In 1823, Irish lawyers Daniel O’Connell and Richard Lawler Sheil formed the Catholic Association to challenge English laws that denied Irish people the liberty to own land, attend school, learn a&nbsp;trade, bear arms, hold public office, travel abroad or practice their religion without interference. This was the beginning of the movement that came to be known as Catholic Emancipation. It was funded with dues of a&nbsp;penny per month, an amount Irish peasants could afford.</p> <p>O’Connell was on the road constantly, speaking in every city and hamlet. He generated so much popular pressure for reform that back in London, on April 10, 1829, Parliament passed the Emancipation bill that reduced or removed many restrictions on Catholics. Then O’Connell started the Repeal Association to generate pressure for eliminating the union with Britain and all the unfair burdens that involved. He staged a&nbsp;succession of “Monster Meetings,” each of which drew as many as 300,000 people. Unfortunately, O’Connell’s health faded. His campaign wasn’t successful, but he set the stage for the mighty struggles that achieved Irish Independence during the 20th&nbsp;century.</p> <p>On May 22, 1787, Cambridge University student Thomas Clarkson, lawyer Granville Sharp and 10 other men met in a&nbsp;London print shop and began an epic conversation about how to abolish slavery, something no civilization had ever done voluntarily. Because so many people profited from slavery, the men decided to focus initially on the English slave trade, and if they were able to abolish that, then they would try to liberate the approximately 800,000 slaves in England’s Caribbean colonies. The men formed the Committee for the Abolition of the Slave Trade.</p> <p>Clarkson’s nonviolent campaign involved travelling around England, establishing anti‐​slavery groups and giving speeches at public meetings run like religious revivals. He denounced the cruelty of slavery and shocked audiences by holding up branding irons, neck collars, leg shackles, handcuffs, thumbscrews and other gruesome devices for enforcing slavery. He displayed diagrams showing how slave ships chained human beings into tiny spaces, awash with excrement. Clarkson arranged for former slaves like Olaudah Equiano to testify about the horrors they experienced. English porcelain manufacturer Josiah Wedgewood contributed his expertise, producing medallions with the poignant image of a&nbsp;chained, kneeling slave and the immortal inscription, “Am I&nbsp;not a&nbsp;man and a&nbsp;brother?” This, the logo for English abolitionism, was later adopted by American abolitionists.</p> <p>Clarkson bombarded Parliament with about 500 anti‐​slavery petitions signed by more than 400,000 people. Buoyed by this proof of public support, member of Parliament William Wilberforce introduced anti‐​slave trade bills year after year. By 1807, Parliament voted to abolish the slave trade in English ships which dominated the business. Clarkson and Wilberforce subsequently launched a&nbsp;new campaign to abolish slavery itself. Wilberforce had to retire in 1825 because of poor health, but Clarkson and new leaders like Thomas Buxton carried on. They helped establish some 230 anti‐​slavery groups, and they generated more than 700 petitions for emancipation. Parliament gave way to the pressure and passed the Slavery Abolition Act on August 29, 1833. Slavery was dispatched without a&nbsp;civil war.</p> <p>Today, with Obamacare, we face the biggest peacetime expansion of federal power in more than 70&nbsp;years, destroying an industry (private health insurance), nationalizing one‐​sixth of the economy and causing massive disruption. Obamacare suppresses our freedom to make some of the most critical choices about our lives. The president has usurped legislative power by unilaterally changing terms in the law without the approval of Congress which alone has legislative power under the Constitution. Skyrocketing Obamacare premiums amount to gigantic tax hikes — hammer blows that destroy jobs. Soaring Obamacare costs are a&nbsp;serious threat to our solvency, since the federal budget in general and entitlements in particular are already out of control. The law attempts to make a&nbsp;vast transfer of resources from young people to older people, in addition to Social Security and Medicare that are transferring vast resources from young people to older people. Whatever good Obamacare might do for some people is offset by the harm done to other people who must pay unfairly high premiums. Politicians who claim to do good should observe the first principle of medicine: First, Do No Harm.</p> <p>What specifically might be involved in well‐​organized protests to help save us from Obamacare?</p> <p>Here’s a&nbsp;checklist that could be a&nbsp;starting point for discussion:</p> <ul><li>Consider collaboration with other like‐​minded groups in your area, if that might help achieve a&nbsp;bigger event.</li> <li>Obtain any permits that might be required for a&nbsp;potentially large gathering in a&nbsp;city park, a&nbsp;town green or other suitable location with easy parking.</li> <li>Contact a&nbsp;private security firm or arrange with off‐​duty police to be on the scene just in case troublemakers try to disrupt the event.</li> <li>Make sure to have a&nbsp;good, reliable sound system, so that everybody can easily hear what’s being said, especially if the crowd turns out to be larger than expected, or if there’s likely to be significant background noise.</li> <li>Contact prospective food vendors.</li> <li>Contact prospective vendors with pro‐​liberty bumper stickers and related items</li> <li>Contact providers of portable toilets and waste disposal containers.</li> <li>Arrange for a&nbsp;clean‐​up crew afterwards.</li> <li>A good comedian is very hard to find, and it’s much better to have no comedian than one who bombs, but if there’s a&nbsp;good comedian who can effectively ridicule Obamacare, that would help set up the event and make it more memorable.</li> <li>Another possibility: hire somebody to walk around the event area in a&nbsp;Pinocchio costume and a&nbsp;long nose, holding a&nbsp;sign saying something like YOU CAN KEEP YOUR POLICY &amp;&nbsp;YOUR DOCTOR — BELIEVE IT OR NOT!</li> <li>Hire an appropriate band — with an upbeat rock ‘n’ roll sound or a&nbsp;country sound– to help attract a&nbsp;bigger crowd.</li> </ul><p>All this, of course, will require funding that will take time to resolve.</p> <p>Possible theme songs:</p> <ul><li>“<a href="http://www.youtube.com/watch?v=BahoT7cKOys" target="_blank">Freedom</a>,” from the hit Broadway musical Shenandoah.</li> <li>“<a href="http://www.youtube.com/watch?v=9ttDUGM-1mU" target="_blank">Coming to America</a>” by Neil Diamond</li> <li>“<a href="http://www.youtube.com/watch?v=4VPpAZ9_qAw" target="_blank">Independence Day</a>” by Martina McBride (Starting with the words, “Let freedom ring.”)</li> </ul><p>A possible program outline –</p> <ol><li>MC’s opening remarks about the event.</li> <li>MC asks people to help clean up their stuff afterward, to be a&nbsp;good neighbor.</li> <li>MC introduces comedian who performs.</li> <li>MC introduces band that has been playing as people began to arrive.</li> <li>MC introduces a&nbsp;succession of people offering brief testimony about how their health insurance policies were cancelled, how they cannot keep their doctor, and how they face skyrocketing premiums, because of Obamacare.</li> <li>MC or guest speaker emphasizes there are alternatives that respect people’s freedom, such as: — (1) let people shop for the best health insurance options anywhere in the country and buy across state lines; (2) give health insurance deductions to individuals rather than employers, and have policies in each person’s name, so policies will be with you wherever you work; (3) let people choose the coverage they want; (4) minimize premiums with high deductibles, and prepare to pay out‐​of‐​pocket costs by making regular contributions to a&nbsp;health savings account.</li> <li>MC thanks everyone for attending, mentions upcoming events of related interest, encourages people to sign SAVE US FROM OBAMACARE petitions at well‐​marked petition tables and reminds people to pick up all their stuff.</li> </ol><p>Please share any ideas you might have for peaceful, well‐​organized, nation‐​wide protests to help save us from Obamacare.</p> </div> Mon, 04 Nov 2013 13:19:00 -0500 Jim Powell https://www.cato.org/publications/commentary/could-peaceful-well-organized-protest-movement-help-save-us-obamacare How Europe’s Economy Is Being Devastated by Global Warming Orthodoxy https://www.cato.org/publications/commentary/how-europes-economy-being-devastated-global-warming-orthodoxy Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Many Europeans complain about their high energy costs, largely due to their increasing dependence on renewables — the most costly energy sources. But European political parties as well as a&nbsp;majority of people still want government to promote costly options, especially wind and solar power.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>This is killing European economies. Electricity costs in Europe are more than double the cost of electricity in the U.S. High electricity costs make it difficult for businesses to operate if they need a&nbsp;lot of electricity. Their cost of electricity is high, and they might not be able to pass it on to consumers when consumers are free to patronize businesses operating where electricity costs are much lower. Many businesses under pressure are likely move to a&nbsp;lower‐​cost location, and jobs will go with them. Antonio Tajani, European Commissioner for Industry and Entrepreneurship, warned: “We face a&nbsp;systemic industrial massacre.”</p> <p>The Germans probably have done more than anyone else to promote high‐​cost wind and solar power. Other types of renewable energy, like hydro power and geothermal power, usually are limited to a&nbsp;small number of suitable sites. The Germans want to have renewables account for 80 percent of their electricity. Their experience&nbsp;illustrates consequences of such a&nbsp;policy.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>The high cost of electricity makes it harder for the economies to function and for European governments to make payments on debt.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>The most obvious consequence is lots of subsidies and taxes. The German government has arranged for renewable energy producers to sell the power grid their electricity at more than 6 times the wholesale electricity market rate. <em>Nature</em> reported that in 2012 renewable energy producers “cashed in an estimated €20 billion for electricity worth a mere €3 billion.” Counting the costs of electricity from all sources, the Institute for Energy Research reported that “Germans pay 34 cents a kilowatt hour compared to an average of 12 cents in the United States).”</p> <p><strong>Big gap between low U.S. energy costs and high European energy costs</strong></p> <p>Americans, of course, benefit from the fracking revolution, despite President Obama’s efforts to discourage it. Fracking is responsible for natural gas prices that are one-third to one-quarter of what Europeans pay for Russian gas. As we know, fracking has boosted oil production in America, too. Since 2005, U.S. electricity rates have remained substantially the same, while European electricity rates have jumped about 40 percent. The expansion of pipelines from Canada, along existing permitted routes, will make it possible to tap larger continental reserves, even if Obama continues to block or severely restrict the Keystone pipeline. Cheap, reliable American energy helps cover sins like the world’s highest corporate income taxes. By contrast, in Europe mere talk about fracking can be enough to set off riots.</p> <p>The Boston Consulting Group affirmed that electricity is one of the biggest factors that determine manufacturing costs. The cost of U.S. natural gas has come down by half since 2005, and more and more utilities are switching to natural gas, so the outlook is for U.S. electricity rates to remain steady or decline further, whereas European electricity costs seem likely to go higher as more wind turbines and solar panels are installed.</p> <p>Because crude oil costs less in the U.S. than in Europe, feedstocks are cheaper for companies manufacturing plastics, pharmaceuticals, industrial chemicals and other products. Neither wind nor solar power produce feedstocks. IHS, an international market research firm, projects that by 2020 U.S. chemical production will double, but European chemical production could fall by about a third.</p> <p><strong>That sucking sound of European business going to the US</strong></p> <p>The Association of German Chambers of Industry and Commerce (DIHK) reported that its surveys indicated many German business executives would rather move operations to the US than remain handicapped by high European electricity costs as they try to remain competitive in world markets. DIHK Chief Executive Martin Wansleben acknowledged that “The U.S. has become much more attractive to companies than Europe.”</p> <p>It’s no wonder more European companies are opening or expanding facilities in the U.S., and more U.S. multi-nationals are shifting overseas operations back home:</p> <ul><li>Airbus is building an aircraft assembly plant in Mobile, Alabama. It will produce A320 jets for the American market. <em>Der Spiegel</em> noted that Airbus “could save on manufacturing costs compared to its plants in Hamburg, Germany, and Toulouse, France.”</li> <li>Siemens, a German multi-national engineering and electronics company, is making turbines for fossil fuel power plants in Charlotte, North Carolina.</li> <li>BASF, the German chemical company, has opened a $33 million facility expansion in Research Triangle Park, North Carolina.</li> <li>Michelin, the French tire producer, is developing a $750 million facility in Greenville, South Carolina.</li> <li>BMZ GmbH, a German company, opened its U.S. facility in Virginia Beach, Virginia for research, development, assembly and distribution of lithium ion rechargeable batteries.</li> <li>SO.F.TER Group, an Italian plastics compounding company, is building a new plant in Lebanon, Tennessee.</li> <li>Prufrex Innovative Power Products, a German producer of digital ignition systems and electronic control units, is spending $7.3 million to build a manufacturing plant in Virginia Beach, Virginia.</li> <li> Thomas Magnete GmbH provides engineering services and hydraulic equipment for the automobile, agricultural and construction industries, and it will be opening a manufacturing facility in Brookfield, Wisconsin.</li> <li>Wacker Polysilicon, which makes hyper-pure poly-crystalline silicon, is opening a $5 million pilot plant and training center in Chattanooga, Tennessee.</li> <li>Kayser Automotive, a German producer of metal and plastic components for cars, will build a $1.5 million manufacturing facility in Fulton, Kentucky.</li> <li> British-based Rolls Royce decided against expanding a plant in the U.K. and instead built a plant in Prince George County, Virginia for producing engine parts.</li> <li> The Kűbler Group, a German manufacturer of motion sensors, opened a U.S. production facility in Charlotte, North Carolina.</li> <li>The Austrian steelmaker Voestalpine AG is building a $715 million plant near Corpus Christi, Texas.</li> <li> Royal Dutch Shell, headquartered in the Netherlands, announced it would build a multi-billion dollar petrochemical plant in Pennsylvania.</li> <li>Dow Chemical closed facilities in Belgium, the Netherlands, Spain and the U.K., while opening a plant in Texas.</li> </ul><p><strong>European taxpayers soaked to subsidize high-cost wind and solar power</strong></p> <p>The German government tried to stem the outflow of investment capital and jobs by making electricity available to aluminum, chemicals, steel and other big energy-intensive German companies at subsidized low rates. Naturally, many more companies began lobbying for those subsidized low rates, and the government expanded eligibility by changing the official definition of “energy-intensive” from those using more than 10 gigawatt-hours annually to those using more than 1 gigawatt-hour annually. Some retail chains, for instance, qualified by adding up energy consumed by all their stores for lighting, heating and air-conditioning. The soaring cost of subsidies was paid by a special tax on German consumers and on businesses too small to qualify for subsidized low rates.</p> <p>There were howls about unfairness from German consumers and small business people as well as foreign companies competing with German companies that benefited from subsidized low rates. Complaints were filed with the European Commission, and European Energy Commissioner Gűnther Oettinger declared the subsidies were unacceptable. While renewables might make many people feel good, it seems nobody wants to pay the high costs, and they cause ill will all around.</p> <p>If, as seems likely, the European Commission strikes down Germany’s subsidized electricity rates, German businesses will be hit hard. German Chancellor Angela Merkel has acknowledged that subsidies will have to be cut. Sharply higher electricity costs could accelerate the de‑industrialization of Germany, knocking Europe’s strongest economy into a depression.</p> <p>This would make it difficult if not impossible for Germany to provide financial assistance for spendthrift European governments during the next debt crisis. The high cost of electricity makes it harder for the economies to function and for European governments to make payments on debt.</p> <p><strong>Why wind and solar power are so costly</strong></p> <p>Wind and solar power are costly because they’re intermittent. The amount of wind and sunlight often vary considerably from one hour to the next. Sometimes the wind doesn’t blow, and the sun doesn’t shine (especially at night). Many wind turbines are reported to generate power only about one-third of the time. According to the London <em>Telegraph</em>, output from renewables averages about 17 percent of capacity in Germany and 25 percent of capacity in the U.K.</p> <p class="center"> </p><div data-embed-button="image" data-entity-embed-display="view_mode:media.full" data-entity-type="media" data-entity-uuid="9542d421-d4b1-4092-8fad-3831a9403426" data-langcode="en" class="embedded-entity"> <img width="275" height="375" alt="Media Name: powell-919-2013.jpg" class="lozad component-image lozad" loading="lazy" data-srcset="/sites/cato.org/files/styles/pubs/public/images/powell-919-2013.jpg?itok=YGv2XIk1 1x, /sites/cato.org/files/styles/pubs_2x/public/images/powell-919-2013.jpg?itok=NRGeYYsq 1.5x" data-src="/sites/cato.org/files/styles/pubs/public/images/powell-919-2013.jpg?itok=YGv2XIk1" typeof="Image" /></div> <p>Consequently, maintaining consistent power requires back‑up from fossil fuel power systems. The general policy is that fossil fuel power isn’t used if enough power is available from renewables, but this means turning a fossil fuel power plant on and off a lot which is very costly. The Dutch and Poles have liked getting free German electricity when the wind blows and the sun shines, but apparently they have complained about having to pay the cost of maintaining back-up fossil fuel power.</p> <p>In addition, offshore wind farms — where winds tend to be steadier — cost between 200 percent and 300 percent more to build than land-based wind farms, and they cost more to maintain. The most bizarre case involves an offshore German wind farm about nine miles from the North Sea Island of Borkum, where diesel engines make the blades spin. Financial support for this wind farm collapsed after it was built but before it was connected to the power grid. Investors lost confidence because of soaring costs, and apparently there weren’t enough government subsidies. The utility, Offshore Windpark Riffgat, was concerned that if the turbines remained stationary, there would have been a build-up of rust because of exposure to salt water. The idea was that if the turbines were kept moving, they might prevent rus from building up, and someday subsidies might be available to finish the project. Thus, the need for diesel engines.</p> <p>Solar power is the least efficient renewable energy technology. It consumes half the subsidies Germany has spent on renewables, while producing only 20 percent of the electricity from renewables. The German Physical Society reported, “Photovoltaics are fundamentally incapable of replacing any other type of power plant.” Solar power, one might add, isn’t well-suited for the Germany’s temperate climate that includes many cloudy days.</p> <p><strong>Why renewables cause costly problems for power grids and energy users</strong></p> <p>As renewables account for a higher percentage of total energy output in Europe, it becomes more difficult to maintain consistent power. The Institute for Energy Research warned that “The [German] government’s transition to these intermittent green energy technologies is causing havoc with its electric grid and that of its neighbors–countries that are now building switches to turn off their connection with Germany at their borders. The intermittent power is causing destabilization of the electric grids causing potential blackouts, weakening voltage and causing damage to industrial equipment.”</p> <p>That’s not all. According to the Institute, “More than one third of Germany’s wind turbines are located in the eastern part of the nation where this large concentration of generating capacity regularly overloads the region’s power grid, threatening blackouts. In some extreme cases, the region produces <em>three to four times the total amount of electricity actually being consumed</em>, placing a strain on the eastern German grid. System engineers have to intervene every other day to maintain network stability.”</p> <p><em>Der Spiegel</em> reported that for “high-performance computers, outages lasting only a millisecond can trigger system failures. For example, at 3 AM on a Wednesday machines suddenly ground to a halt at Hydro Aluminum in Hamburg. The rolling mill’s highly sensitive monitor stopped production so abruptly that the aluminum belts snagged. They hit the machines and destroyed part of the mill.”</p> <p>More industrial companies are going off Germany’s power grid. They’re having to spend money on batteries as well as generators to avoid problems caused or aggravated by intermittent renewable power sources. Such problems must make some executives wonder how much longer they can afford to operate in Europe.</p> <p>About 8 percent of German electricity production comes from wind and 5.3 percent from solar. By contrast, in the U.S., about 3.5 percent of electricity production comes from wind and 0.1 percent from solar. So businesses and consumers in the U.S. benefit from much less exposure to such high-cost electricity sources.</p> <p>Europeans find themselves stuck with it, because of Green Party politicians from various European countries who began coordinating their efforts for bigger government during the late 1970s. The European Federation of Green Parties was established in 1993.</p> <p>In 2011, after the catastrophic meltdown of Japan’s Fukushima nuclear power plant, Chancellor Merkel persuaded the Bundestag — Germany’s legislature — to pass a law for phasing out all 17 of Germany’s nuclear reactors. The Fukushima meltdown was caused by an earthquake and a tsunami. Germany doesn’t face such serious risks. Its most seismic areas are in the Rhine Rift Valley and the northern edge of the Alps. Eight reactors — providing about a fifth of Germany’s electrical power — were closed immediately, and the rest are to go by 2022. Germany also aimed to slash coal-generated power and aggressively expand wind and solar power. “We want to reach the age of renewable energy as fast as possible,” Merkel declared.</p> <p>Almost overnight, Germany switched from being an energy exporter to being an energy importer. Ironically, although German politicians are avowed foes of nuclear power, the government has been importing nuclear power from France (which gets about 80 percent of its power from nuclear plants) and from the Czech Republic (about a third of its power from nuclear plants that have had problems). In addition, Germany has been importing energy from Poland, produced in old coal-fired plants. Also, Austria imports nuclear power from the Czech Republic to pump water uphill, then lets it flow downhill through turbines, generating hydropower for Germany.</p> <p><strong>Should your government promote noisy 40-story high wind turbines in your neighborhood?</strong></p> <p>Undermining European economies is bad enough, but there’s worse to come. Subsidized wind power and solar power systems disfigure the landscape. Because they’re so inefficient, both wind turbines and solar panels require tremendous amounts of space. Germany’s largest solar facility, Lieberose Solar Park, covers almost 2 million square feet of ground with solar panels. Germany’s largest onshore wind farm — with more than 80 turbines spread across the landscape — is in Ribbeck, a town near Berlin.</p> <p>Sometimes it seems there are wind towers everywhere you look, because they must be very tall to rise above the earth’s surface where winds are erratic and reach heights where winds are likely to be steadier. Wind towers can be almost 600 feet high — approximately the equivalent of a 40‑story building. Imagine something like that in your neighborhood! The blades are big, too: some as long as a football field and weighing perhaps 30 tons.</p> <p>“With the prime coastal locations already taken,” <em>Der Spiegel</em> reported, “operators are increasingly turning to areas further inland. Flat-bed trucks laden with tower segments make their way slowly across boggy fields. Cranes crawl up narrow forest paths to set up outsized wind turbines on the tops of mountains. Plans call for some 60,000 new turbines to be erected in Germany — and completely alter its appearance.” Germany currently has more than 22,000 wind turbines, so you ain’t seen nothing yet. Would Americans ever be tempted to go for something like this, subsidized and promoted by the government?</p> <p>A single German state — Brandenberg — has more than 3,100 of these things all over the place. You wouldn’t want to find that there are plans to build one or more near you, because they’re noisy. One German, who lives about a fifth of a mile from a wind turbine, was quoted as saying “It whirrs and hisses, and then it drones like an airplane about to take off.” There have been lawsuits about wind turbine noise, and in at least one case the operator had to set the turbines at a slower speed between 10 PM and 6 AM, which meant generating less electricity and losing more money.</p> <p>Some doctors have reported patients complaining about how their health suffered after a wind turbine was built near them. For example, Dr. Nina Pierpont, author of <a href="http://www.amazon.com/Wind-Turbine-Syndrome-Natural-Experiment/dp/0984182705/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1379195019&amp;sr=1-1&amp;keywords=wind+turbine+syndrome" target="_blank"><em>Wind Turbine Syndrome</em></a>, reported in <em>Counterpunch</em> that the <a href="http://www.windturbinesyndrome.com/2010/wind-turbine-syndrome-pierpont/?var=wts" target="_blank">symptoms include</a> “(1) Sleep disturbance, (2) Headache, (3) Tinnitus, (4) Ear pressure, (5) Dizziness, (6) Vertigo, (7) Nausea, (8) Visual blurring, (9) Tachycardia, (10) Irritability, (11) Problems with concentration and memory, (12) Panic episodes associated with sensations of internal pulsation or quivering, which arise while awake or asleep. None of these people had experienced these symptoms to any appreciable degree before the turbines became operational. All said their symptoms disappeared rapidly whenever they spent several days away from home. I found a statistically significant correlation between the telltale symptoms and pre-existing motion sensitivity, inner ear damage, and migraine disorder.”</p> <p>You commonly see wind turbines pictured in scenic settings, but there are safety issues. An overheated wind turbine caused a fire that burned an estimated 220 acres. J.A. Doucette was crushed when he was unloading tower sections from a truck, and one of the sections rolled onto him. Robert Skarski was erecting a small turbine, the tower collapsed, and he fell to his death. Tim McCartney fell from a tower while removing a turbine, and his body was found nearby. Part of a turbine housing blew off, killing Bernhard Saxen. Jens Erik Madsen was electrocuted as he serviced a turbine controller. Mark Ketteling was near the base of a tower when a sharp piece of ice fell down from it and, like a guillotine, cut his body in half. John Donnelly became caught in the turbine machinery, suffered multiple amputations and died. There have been fatal auto accidents where a wind turbine suddenly comes into view, distracting drivers. A 16-year-old boy climbed a tower to remove a broken coupling, and his clothing was caught by a rotating blade, strangling him.</p> <p><strong>Wind farms kill millions of birds</strong></p> <p>The number of birds killed by wind turbines is reckoned in the millions around the world. Among the slaughtered species are eagles, hawks, kites, cranes, ducks, swans, geese, gulls, vultures, owls and grouse. Often the area around a wind turbine is littered with severed heads, wings, other bodily parts and lots of torn feathers. Sometimes a bird is hit several times, its body chopped into many pieces. Today’s environmental movement provides the curious spectacle of nature lovers promoting a monumental slaughter of species.</p> <p>To be sure, U.S. wind farms produce plenty of carnage, too. For example, the <em>Journal of Raptor Research </em>published a study that showed at least 85 bald eagles have been killed by wind farms in 10 states since 1997. This doesn’t count the death toll in Altamont Pass, northern California where about 60 bald eagles are killed annually. The number of dead bald eagles at wind farms in Idaho, Montana and Nevada is also unavailable.</p> <p>In the U.S., the Bald and Golden Eagle Protection Act (1940), amended in 1962 (16 U.S.C. 668c; 50 CFR 22.3) provides a $5,000 fine or one year in prison for anyone convicted of killing or wounding a bald eagle. Repeat offenders are subject to a $10,000 fine and two years in prison.</p> <p>The Obama administration has exempted politically-connected wind farm operators from fines and prison terms when their turbines kill species that are protected by the Endangered Species Act (1973) and the Migratory Bird Treaty Act (1918) as well as the Bald and Golden Eagle Protection Act.</p> <p><strong>Is high-cost energy destroying European economies for nothing?</strong></p> <p>Conceivably it might make sense for government to promote high-cost electricity and cause all the resulting conflicts and dislocations if it’s true that (1) carbon dioxide causes global warming, (2) global warming would devastate the earth and (3) promoting renewables would save us from devastation. If one or more of these propositions is false, then the mad pursuit of renewables and the de-industrialization of Europe would be utterly pointless.</p> <p>As it happens, more and more people are becoming skeptical about global warming. Everyone is aware that there have been significant warming and cooling cycles before human beings appeared on earth. Dinosaurs thrived amidst abundant plant life during warm periods, and dinosaurs became extinct when global temperatures plunged — we’re still not sure why they plunged. The Ice Age limited the ability of people to produce food, and human populations were small. They expanded dramatically when global temperatures subsequently rose, glaciers melted, and there was much more land for crops.</p> <p>If, as far as climate is concerned, the only choices we have are warming and cooling, then warming is better (we’re not talking about boiling). Cooling — especially if it means another ice age — makes life far more difficult. More people die from extreme cold than die from extreme heat. Indur M. Goklany, a science and technology analyst in the U.S. Department of the Interior, calls extreme cold “the deadliest natural hazard.”</p> <p>Since the point has been raised, does CO2 cause global warming? Well, if it did, then global warming should always follow higher CO2 levels.</p> <p>Phil Jones, the University of East Anglia (UK) climate guru who wrote embarrassing emails intended to help promote global warming orthodoxy and suppress research by global warming skeptics, <a href="http://online.wsj.com/article/SB10001424052748704757904575077741687226602.html" target="_blank">reportedly acknowledged</a> that there hasn’t been any global warming since about 1995. Yet CO2 levels have gone up. Whatever causes global warming, CO2 doesn’t appear to be it.</p> <p>The National Academy of Sciences has admitted — in the most under-stated way possible — that global warming orthodoxy has been wrong. <a href="http://junkscience.com/2013/09/13/shock-admission-ahead-of-ipcc-report-national-academy-of-sciences-says-climate-models-not-ready-for-decision-making/" target="_blank">Look at this</a>: “Enormous progress has been made in the past several decades in improving the robustness of climate models, <strong>but more is needed to meet the desires of decision makers who are increasingly relying on the information from climate models.</strong>”</p> <p>The Committee on a National Strategy for Advancing Climate Modeling was a little more candid, <a href="http://dels.nas.edu/Report/National-Strategy-Advancing-Climate/13430" target="_blank">stressing the need for</a> <strong>“climate models to evolve substantially in order to deliver climate projections at the scale and level of detail [meaning accuracy] desired by decision makers.”</strong></p> <p>According to the <em>Daily Mail</em>, a leaked report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) — whose pronouncements have been gospel in global warming circles — acknowledged that “<strong>scientific forecasts of imminent doom were drastically wrong</strong>.” The IPCC probably phrased the point more delicately. When there has been global warming, it has been less than half as much as previously claimed by IPCC experts, which is to say there has been little.</p> <p>It’s interesting that <a href="http://www.forbes.com/sites/jamestaylor/2012/03/14/shock-poll-meteorologists-are-global-warming-skeptics/" target="_blank">a poll</a> suggests weather forecasters generally have been unimpressed by global warming doomsayers who issued dire predictions about what they were sure would happen during the next 20, 50, 100 or more years. Weather forecasters are constantly reminded of all the frequently-changing factors that make it difficult to develop accurate forecasts for the next 5 days. Weather forecasters know that beyond 5 days, accuracy tends to go down dramatically.</p> <p>In any case, far from being a bad thing, CO2 is a good thing. For example, rising CO2 levels can act like a fertilizer, stimulating plant growth. <em>Geophysical Research Letters</em> <a href="http://onlinelibrary.wiley.com/doi/10.1002/grl.50563/abstract" target="_blank">published a study</a> by four Australian scientists who analyzed satellite evidence that foliage increased more than 10 percent during the last three decades. They focused on arid regions rather than, say, temperate forests or tropical jungles, since in arid regions it’s easier to identify the effects of CO2 from other factors that affect plant growth. Increased foliage was observed in places like the southwestern U.S., the Australian Outback, the Mideast and Africa. More CO2 expands potential land suitable for growing crops and feeding hungry people.</p> <p>There are many questions for which global warming orthodoxy doesn’t appear to have answers. For example, the National Snow and Ice Data Center reported that during the last 12 months, satellite images showed Arctic Sea ice expanded about 60 percent, from covering 1.32 million square miles in September 2012 to covering 2.35 million square miles in August 2013. This extraordinary expansion of ice occurred despite global warming doomsayers who had predicted that there wouldn’t be any Arctic ice. Incidentally, polar bear populations, said to be falling, appear to be booming. Some scientists wonder if we might be at the beginning of a global cooling trend.</p> <p>A number of scientists are looking beyond the earth for possible insights about our climate. The National Aeronautics and Space Administration reported finding evidence that Mars is warming: namely, deposits of frozen carbon dioxide have shrunk. Obviously, there haven’t been any coal-fired power plants, internal combustion engines or other human activity on Mars, so it cannot be the cause of warming there.</p> <p>Other scientists suggest that the sun — the hottest thing in our corner of the universe (about 27 million degrees Fahrenheit at its core) — is probably responsible for global temperature cycles. Sometimes there are bursts of solar particles that damage satellites and electronics on earth.  A solar storm knocked out power in a Canadian province. The strongest solar storms occur in 11-year cycles. It’s hard to predict how a solar storm will interact with the earth’s magnetic field and atmosphere. There’s some speculation that a solar storm might have blown away Mars’ atmosphere — we cannot assume that something has always been the way it is now.</p> <p>During the 1990s, the Danish physicist Henrik Svensmark suggested that solar radiation affects the earth’s climate because of the impact on cloud formation. He explained, “All we know about the effect of [carbon dioxide] is based on computer models that predict how climate should be in 50 or 100 years, and these compute models cannot model clouds at all, so they are really poor. It’s a well-known fact that clouds are the major uncertainty in any climate model.”</p> <p>CERN, the Swiss-based European Organization for Nuclear Research, is now testing Svensmark’s proposed theory. The idea is that cosmic radiation — charged particles from exploding stars — bombard the earth from outer space. This radiation breaks apart the molecules of atmospheric gases, and the resulting particles become nuclei for water droplets to condense and form clouds. These reflect sunlight, cooling the earth. At night, they retain some of the heat that the earth had absorbed during the day. During periods when there are bursts of radiation from the sun, it provides a magnetic shield from much of the cosmic radiation. There tend to be fewer clouds, the earth is warmer during the day, and more of the heat is lost at night. There are cycles of higher and lower levels of solar activity.</p> <p>The point here is that there are a lot of things we don’t understand very well, like the reasons why there have been warming and cooling cycles since the earth began. Scientists aren’t sure about many things, like how the molten earth came to have so much water and how life began on earth.</p> <p>It’s quite possible that factors beyond our control — such as solar phenomena — have played a major role in global warming and cooling cycles. We know that the earth tilts on its axis every year. Seasonal warming occurs in the hemisphere tilted toward the sun, and seasonal cooling occurs in the hemisphere tilted away from the sun.</p> <p>With such factors beyond our control, it would be crazy to adopt energy policies that disrupt the economy and make millions of people worse off, in the vain hope of, say, taming the sun or changing the earth’s tilt.</p> <p>What we probably can do is adapt to climate changes, as living things have adapted to all sorts of challenging circumstances through the ages. Meanwhile, we should unshackle economies and let them grow.</p> </div> Thu, 19 Sep 2013 12:18:00 -0400 Jim Powell https://www.cato.org/publications/commentary/how-europes-economy-being-devastated-global-warming-orthodoxy What Should You Do if You’re Threatened by a Mass Murderer? https://www.cato.org/publications/commentary/what-should-you-do-youre-threatened-mass-murderer Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Calling 911 isn’t enough.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>On July 23, 2007, two men invaded the Cheshire, Connecticut home of Dr. William Petit Jr., his wife Jennifer Hawke‐​Petit and their daughters 11‐​year‐​old Michaela and 17&nbsp;year‐​old Hayley. There wasn’t a&nbsp;gun in the house that could have been used to ward off the attackers. They savagely beat Dr. Petit and then left him to focus on the others. He managed to call 911. The attackers tied the girls to their beds. Jennifer was raped and strangled, the girls were sexually abused, then the place was doused with gasoline and torched.</p> <p>Incredibly, police who arrived at the scene didn’t go straight into the house. They were said to have stood around outside for about 25&nbsp;minutes, and there were off‐​the‐​record reports of screams from the house during that time. After having committed three murders, the men tried to escape, and police caught them outside.</p> <p>Dr. Pettit wanted to know why the police didn’t try to stop the killing, but evidently neither Town Manager Michael Milone, nor Police Chief Michael Cruess (when the crime occurred) nor the present Police Chief Neil Dryfe had any comments. According to the&nbsp;<em>Hartford Courant</em>, the police department didn’t review their handling of this case. Town officials similarly declined to answer questions from David Heilbroner and Kate Davis, who produced&nbsp;<em>The Cheshire Murders</em>, a&nbsp;documentary that HBO aired in July. The Associated Press reported, “Connecticut Cops Still Mum On ’07 Home Invasion Response.”</p> <p><strong>SWAT team and posse too slow</strong></p> <p>This could have been a&nbsp;matter of incompetence or cowardice. It could also have been a&nbsp;matter of obsolete police procedure. Officers might have been ordered not to do anything until a&nbsp;police supervisor arrived. Or they might have been ordered to wait until a&nbsp;SWAT (Special Weapons And Tactics) team was on the scene.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>You need to understand that if you’re threatened by a&nbsp;killer, you’re on your own, and you must take initiative to protect yourself.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Until the mid‐​1960s, police work was generally handled by patrolmen. Then came a&nbsp;succession of difficult challenges, like the Watts riots (Los Angeles, 1965), barricaded gunmen, hostage situations and snipers. For example, on August 1, 1966, a&nbsp;sniper climbed to the top of the Texas Bell Tower at the University of Texas and killed 15 people, wounding 31 others.</p> <p>These challenges led to the formation of specialized tactical forces — SWAT teams. Their policy has been to proceed slowly and deliberately. In any case, it was hard to move fast, since a&nbsp;SWAT team involved assembling men, advanced weapons and tactical equipment.</p> <p>The April 20, 1999 massacre at Columbine High School, Littleton, Colorado was a&nbsp;wake‐​up call. Apparently two disgruntled seniors wanted to do copycat killings that would rival the Oklahoma City bombing (April 19, 1995). Undoubtedly one consideration was that a&nbsp;school was a&nbsp;gun‐​free zone where attackers could anticipate little, if any, resistance. The idea of these seniors was to detonate two bombs in the cafeteria, driving people out of the building and into a&nbsp;hail of gunfire. The bombs didn’t go off, so the duo went inside and began to shoot randomly. They found the largest concentration of students in the library, cowering helplessly under desks, and that’s where the killers seem to have spent most of their time. Altogether, 13 people were murdered, and another 24 were wounded. This was the most deadly attack at an American high school.</p> <p>Some police who arrived at the scene reportedly entered the building but backed off when they saw the bombs. There was a&nbsp;decision for officers to stay outside until a&nbsp;bomb squad or SWAT team arrived. It isn’t known if a&nbsp;bomb squad ever showed up. There was a&nbsp;SWAT team, but it was too slow to do victims any good. The shooting began about 11:19 AM, and it ended around 12:08 PM when the killers were believed to have committed suicide. Incredibly, a&nbsp;SWAT team didn’t enter the building until about 1:09 PM — about an hour after the massacre ended!&nbsp;<a href="http://news.yahoo.com/columbine-massacre-timeline-20110418-143500-222.html" target="_blank">See a&nbsp;shocking timeline for yourself</a>.</p> <p>All the officers gathered outside did nothing to stop the slaughter inside. The more time passed, the more people were killed. This must rank among the worst episodes in the history of American law enforcement.</p> <p>If you wish to check out the police response to mass murders discussed in this article, or any other cases that might interest you, try to find a&nbsp;timeline and note: (1) the time when killing began, (2) the time when the first 911 call was made, (3) the time when police arrived at the scene, (4) the time when police entered the building and (5) the time when they reached or stopped the killer (who in many cases commits suicide). (1), (2) and (3) are commonly mentioned in press reports. (4) and (5) can be a&nbsp;problem, commonly omitted from press reports.</p> <p>The point in this article isn’t to criticize police. The point is you need to understand that if you’re threatened by a&nbsp;killer, you’re on your own, and you must take initiative to protect yourself. There’s a&nbsp;high probability that police cannot stop the killer in time to save you.</p> <p>The Columbine experience made many observers realize that the more quickly police intervened, the more lives might be saved. Consequently, it was better to intervene sooner, even though that meant going in with fewer officers. Police departments across the country began training officers to form small groups — commonly four officers — with whomever the early arrivals turn out to be. This is sometimes referred to as the “posse theory.” With greater recognition that faster intervention means saving more lives, the small‐​group strategy was refined. Especially in large, compartmentalized facilities like a&nbsp;school, often with much sound‐​proofing, it’s hard to tell where gunshots might be coming from unless the killer is nearby, so the strategy was to have small groups enter a&nbsp;building and split up, enabling the officers to explore more corridors, rooms, stairways and other parts of a&nbsp;building faster.</p> <p>The posse theory, however, was never universally adopted, and in any case it, too, involved having officers wait around until there were enough to proceed.</p> <p>On April 3, 2009 — almost a&nbsp;decade after Columbine — there was another wake‐​up call: a&nbsp;mass killing at the American Civic Association immigration center, Binghamton, New York, and it was déjà vu all over again. Around 10:30 AM, a&nbsp;man barricaded the rear entrance of the building with a&nbsp;car, so nobody could escape, then went to the front entrance, walked into the building and began shooting. Somebody called 911 right away. The gunman entered a&nbsp;classroom and shot everyone. He fired 88 rounds with a&nbsp;9mm Beretta and 11 more rounds with a .45 caliber Beretta. Altogether 13 people were killed — the same death toll as at Columbine — and four were wounded. The killer committed suicide.</p> <p>Police, who had arrived about 10:33 AM, three minutes after they had been dispatched, remained outside the building. They didn’t try to stop the killing inside. As at Columbine, they waited for a&nbsp;SWAT team. It entered the building at 11:13 AM, approximately a&nbsp;half‐​hour after the last victim had been shot and 43&nbsp;minutes after the first 911 call — far too late to do the victims any good.</p> <p>There continue to be cases where officers arrive at a&nbsp;scene quickly, then wait around outside while killing goes on inside. Don Alwes, a&nbsp;tactical trainer, noted on&nbsp;<a href="http://policeone.com/" target="_blank">PoliceOne​.com</a>, “As I&nbsp;go around the country teaching, I&nbsp;encounter many departments still instructing officers to wait until 4&nbsp;or 6&nbsp;officers are present before making entry.”</p> <p>Which makes it more likely that officers would be too late to save you.</p> <p><strong>The most critical minutes</strong></p> <p>In an effort to help save more lives, Ron Borsch, manager and lead trainer at the South East Area Law Enforcement (SEALE) Training Academy, Bedford, Ohio,&nbsp;<a href="http://www.spartancops.com/posse-theory-workable-tactic-mass-murder/" target="_blank">began analyzing past experience</a>. He identified approximately 150 cases of what he called rapid mass murder attempts in the U.S. since 1975. He defined this to mean more than four people murdered in 20&nbsp;minutes at the same place.</p> <p>“Of the pre‐​Columbine rapid mass murders,” he explained, “the average killing time was 11&nbsp;minutes, (ranging from 2&nbsp;examples of 4&nbsp;minutes, to one example of 20&nbsp;minutes). Among the known times of post‐​Columbine rapid mass murders, the average time was down to 8&nbsp;minutes. Now the average killing time is only about 6&nbsp;minutes.”</p> <p>In many cases, Borsch pointed out, rapid mass murders are over in less time. At Sandy Hook Elementary School, Newtown, Connecticut, the killing time was 5&nbsp;or 6&nbsp;minutes.</p> <p>A problem is that the first 911 call tends to come in about 6&nbsp;minutes after a&nbsp;killer has started shooting.</p> <p>Then officers have to be dispatched, arrive at a&nbsp;location, enter a&nbsp;building, find the killer and stop him.</p> <p>The odds are that an officer won’t be able to stop much if any killing.</p> <p>Nonetheless, it’s an officer’s sworn duty to try. Borsch strongly believes that the first officer who arrives at a&nbsp;location should go straight into a&nbsp;building and begin searching for the killer. He should jog through hallways and spend no more than 5&nbsp;seconds scanning any suspicious room or other placelock along the way.</p> <p>A rapid mass murderer almost always acts alone, so a&nbsp;solo officer is unlikely to be outnumbered. In addition, a&nbsp;solo officer has had far more training and more time on a&nbsp;shooting range than a&nbsp;killer. Reinforcements are coming for a&nbsp;solo officer, but nobody’s coming to help a&nbsp;killer. At least a&nbsp;third of the time, the sounds of approaching police lead a&nbsp;killer to commit suicide. The sooner that happens, the better, since it could mean fewer people killed.</p> <p>For example, a&nbsp;45‐​year‐​old man burst into the Pinelake Health &amp;&nbsp;Rehab facility, Carthage, North Carolina, and began looking for victims. Within a&nbsp;few minutes, he killed eight people. He was stopped only because a&nbsp;911 call was placed right away, police officer Justin&nbsp;Garner happened to be nearby, he immediately entered the premises and began a&nbsp;search. The killer fired his shotgun, and pellets hit Garner in the legs and feet, but Garner disabled him with a&nbsp;pistol at 114&nbsp;feet. Moore County District Attorney Maureen Krueger reported, “We had a&nbsp;well‐​trained officer who prevented this from getting even worse than it was.”</p> <p><strong>Revelations about rapid mass murder</strong></p> <p>Ron Borsch, with three decades of police experience, has reported many important findings about rapid mass murders. For instance:</p> <ul><li>Although the overall murder rate declined by about 50 percent since 1980, the annual number of rapid mass murders has nearly quadrupled since Columbine.</li> <li>A rapid mass murderer’s apparent aim is to kill as many people as possible in a&nbsp;short period of time. Such killers are rarely interested in negotiation.</li> <li>These killers tend to be cowards, because they generally favor gun‐​free zones where few, if any people, are likely to resist their attacks with force.</li> <li>Most common targets: 41 percent of rapid mass murder attempts occur at educational facilities — 31 percent at K-12 schools, 10 percent at colleges and universities, so killers prefer facing little children rather than big guys.</li> <li>By comparison, 7&nbsp;percent of rapid mass murder attempts occur at offices, 6&nbsp;percent at churches, 5&nbsp;percent at eating places, 5&nbsp;percent at malls, 4&nbsp;percent at factories, 4&nbsp;percent at government offices, 3&nbsp;percent at hospitals, 2&nbsp;percent at grocery stores, 2&nbsp;percent at post offices and 1&nbsp;percent at bars and night clubs.</li> <li>62 percent of rapid mass murder attempts are stopped by civilians on‐​site– not police based off‐​site.</li> <li>76 percent of successful civilian attempts to stop rapid mass murder are initiated by one individual.</li> <li>About two‐​thirds of civilians who stop a&nbsp;rapid mass murder attempt are unarmed.</li> <li>38 percent of rapid mass murder attempts are stopped by police.</li> <li>73 percent of successful police attempts to stop rapid mass murder are initiated by one individual.</li> </ul><p>Incidentally, many people refer to the perpetrators as “active shooters,” but Borsch pointed out that the overwhelming majority of shooters are generally good, law‐​abiding people. Some do recreational shooting, and many are in law enforcement. Obviously, when there’s a&nbsp;killer on the loose, everyone wants a&nbsp;sharp shooter capable of stopping him. Borsch recommends the phrase “active killer.”</p> <p>Also, Borsch noted that most rapid mass murderers seem to want notoriety. They don’t wear masks, hoods or do anything else to conceal their identity. They appear to relish sensational headlines about their exploits. Accordingly, Borsch supports the practice of ignoring their names when discussing their murders.</p> <p><strong>You’re on your own</strong></p> <p>In 2011, the New York City Police Department published&nbsp;<a href="http://www.nyc.gov/html/nypd/downloads/pdf/counterterrorism/ActiveShooter.pdf" target="_blank"><em>Active Shooter, Recommendations And Analysis for Risk Mitigation</em></a>, a&nbsp;report listing 279 cases that involve “an individual actively engaged in killing or attempting to kill people in a&nbsp;confined and populated area.” Based on internet searches, the research covers cases in office buildings, schools, homes, churches, mosques, airports, factories, warehouses, restaurants, malls, medical facilities, nursing homes, neighborhood streets — on and on. It would be hard to think of a&nbsp;setting that’s totally secure.</p> <p>There have been cases across the U.S. and overseas, in places with and without gun controls.</p> <p>The report makes clear that we must always be aware of what’s going on around us, and we must take initiative to protect ourselves and our loved ones in unexpected circumstances.</p> <p>The New York City Police Department report includes much basic information about rapid mass murderers, though it doesn’t indicate when a&nbsp;911 call was made, when police arrived at a&nbsp;scene, entered a&nbsp;building and reached or stopped the killer.</p> <p>J. Pete Blair, Terry Nichols, David Burns and John R. Curnutt, at the Advanced Law Enforcement Rapid Response Training Center at Texas State University,&nbsp;<a href="http://www.amazon.com/Active-Shooter-Events-Response-Blair/dp/1466512296/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1377969220&amp;sr=1-1&amp;keywords=active+shooter+events+and+response" target="_blank">published some related findings</a>.</p> <p>These researchers studied “active killer events “ as they call crimes where the aim is to maximize killing. They gathered data on all such cases in the U.S. between 2000 and 2010. They found that about half the time, killing ended before officers reached the killer.</p> <p>The point of all this is to understand that even if you’re fortunate to live in a&nbsp;place with a&nbsp;great police department, and you’ve managed to call 911, you’re still substantially on your own during a&nbsp;killing time.</p> <p>The December 14, 2012 massacre at Sandy Hook Elementary School, Newtown, Connecticut makes this dramatically clear. Officers didn’t enter the building until after the killer fired 154 shots, murdering 20 children and six adults.</p> <p>One factor might have been the decision to take time forming three three‐​officer teams, rather than sending the first officer into the building and trying to save at least a&nbsp;few of the people threatened. Borsch derides as “tactical loitering” this practice of having officers stand around rather than going into a&nbsp;building immediately. Apparently none of the police fired a&nbsp;shot.</p> <p>The 5&nbsp;or 6‐​minute killing time suggests a&nbsp;compelling case to have trained, armed individuals on‐​site who can provide immediate resistance to a&nbsp;killer.</p> <p>Gun control is no answer, since Connecticut already had strict gun control laws and special restrictions on assault weapons. Despite gun control laws, robbers, drug dealers, gang members and other criminals never seem to have much trouble obtaining guns. Governments can’t even keep illegal guns out of jails and prisons where government has more direct control over people than anywhere else.</p> <p>Rapid mass murder is likely to go on as long as (1) there are easily accessible victims and (2) there’s no effective resistance.</p> <p>It seems that the only credible solution is to have each school, business or other entity assume responsibility for maintaining its own security. The interest of such entities is different from the mission of a&nbsp;police department. Police respond to calls and go to crime scenes. They don’t have a&nbsp;budget big enough to protect everybody all the time. The surest way to gain comprehensive protection is to have trained, armed people already on‐​site.</p> <p><strong>Take initiative to survive</strong></p> <p>Survivors are most likely to be those who take initiative, try to protect themselves and fight if necessary. For years, we were told that when confronting an attacker, whether an urban mugger or a&nbsp;Nazi thug, the best advice was to be passive so as not to provoke the attacker, but plenty of experience has shown that such passivity makes it easier for killers to do whatever they want — not good for us.</p> <p>In their survey of all rapid mass murder cases from 2000 to 2010, Blair, Nichols, Burns and Curnutt don’t attribute as many saves to self‐​help as Borsch, but they affirm that self‐​help is vital. They reported, “In 30 percent of the attacks stopped before police arrived, the victims took action to stop the shooter themselves either by physically subduing the attacker (81 percent) or by shooting him with their own personal weapon (19 percent). These data clearly show that it is possible to defend yourself successfully in these events even if you are unarmed.”</p> <p>Blair, Nichols, Burns and Curnutt cite the Virginia Tech case that illustrates the importance of taking initiative to protect yourself.&nbsp;On April 16, 2007, a&nbsp;senior with a&nbsp;history of disturbing behavior went on two rampages at Virginia Polytechnic Institute and State University, Blacksburg. The first was reported at 7:15 AM in West Ambler Johnston Hall, a&nbsp;dormitory — two dead. At 9:42, shooting was reported in Norris Hall, an engineering building. Police arrived in about three minutes, but the killer had chained all the entrances shut, so that nobody could escape. Breaking open an entrance took another five minutes. Apparently after hearing the police make their way through the building, the killer committed suicide. Altogether, 32 people were dead, and 17 more were wounded.</p> <p>The Norris Hall shooting spree is of particular interest, because survival rates varied dramatically in the four second‐​floor classrooms. The doors didn’t have locks that would have helped turn those classrooms into safe rooms, so finding ways to prevent the killer from entering depended entirely on the initiative, resourcefulness and quickness of the people in each room.</p> <ul><li>“In room 206,” Blair, Nichols, Burns and Curnutt explained, “where the potential victims took no defensive actions other than freezing, 92 percent of the people were shot, and more than three‐​quarters of them died.”</li> <li>In room 211, people couldn’t block the doorway, and the killer got in quickly. Everyone was shot, and two‐​thirds died.</li> <li>In room 204, the door was blocked for a&nbsp;while before the killer got in.&nbsp;The delay enabled many people to escape through the windows before the killer was able to enter the room and start shooting. About 36 percent of the people were shot, and 14 percent were killed.</li> <li>In room 205, people successfully blocked the doorway with a&nbsp;heavy teacher’s desk and kept the killer out. Nobody was hit — 100 percent survived.</li> </ul><p>Blair, Nichols, Burns and Curnutt concluded: “Those who took some form of defensive action at Virginia Tech fared much better than those who did not.” Freezing and playing dead didn’t work, since the killer walked back and forth, shooting at people lying on the floor, some of whom hadn’t been shot before.</p> <p>D<strong>o’s and don’ts of escape — the best option</strong></p> <p>People are most likely to be killed if they’re trapped in an enclosed space, so the best option is to escape — if it’s possible.</p> <p>It’s important to think through your preferred escape route and alternatives in case the preferred route is blocked.</p> <p>The temptation might be to run, but that could be deadly if you’re wrong about the killer’s location, and you inadvertently run into him. Walking might be more prudent, since it would enable you to reverse direction fast.</p> <p>Avoid trying to escape in an elevator (where you could be trapped) or on an escalator (where you would be exposed).</p> <p>As the Virginia Tech made clear, one’s chances of surviving a&nbsp;drop from the second floor were much better than the odds of surviving in one of the classrooms.</p> <p>How to drop from a&nbsp;second story window: (1) you need to keep your feet down, so you don’t land on your head, which could be fatal; so (2) carefully maneuver your way out of a&nbsp;window feet first, facing the building, and hang on to the bottom of the window frame; (3) when you let go, put your hands behind your head, to help protect your head and neck; (4) bend your knees and try to land on the balls of your feet; (5) push out with your legs when you hit the ground, as if you were jumping up; (6) try to roll forward, to reduce stress on your legs and spine — curl your body and pull in one shoulder to roll in that direction (depending on what’s below).</p> <p>Don’t assume, though, that you’ll be safe once you’re outside — look for a&nbsp;place where you might find cover. More than one planned massacre involved indoor terror intended to drive people outside where killers were ready to open fire.</p> <p><strong>What you should know about hiding</strong></p> <p>It’s worthwhile thinking about how you might escape or where you might hide in the unlikely event a&nbsp;killer came to your school, workplace or other places you often go.</p> <p>A good hiding place has a&nbsp;door with a&nbsp;solid lock. It’s an essential starting point for a&nbsp;safe room.</p> <p>Even though movies often show somebody blasting a&nbsp;lock apart, a&nbsp;handgun is unlikely to do that.</p> <p>Discovery Channel’s&nbsp;<em><a href="http://dsc.discovery.com/tv-shows/mythbusters/videos/mega-movie-myths-shootin-locks.htm" target="_blank">Mythbusters</a></em>&nbsp;tested the ability of a&nbsp;9mm handgun, a .357 magnum, a&nbsp;12‐​gauge shotgun and an M-1 high‐​powered rifle to break apart standard padlocks and deadbolt locks. Testers fired three rounds through a&nbsp;hole in a&nbsp;large shooting shield at the front, side and center of each lock. The locks were battered and loosened up to various degrees, but they continued to hold, and the keys still worked.</p> <p>The 12‐​gauge shotgun and M-1 rifle did succeed in breaking apart the locks, but the area was showered with shrapnel. Doing this in a&nbsp;small space like a&nbsp;hallway, without a&nbsp;shooting shield, would have been quite hazardous, probably incapacitating a&nbsp;shooter.</p> <p>Okay, once you’re in a&nbsp;room, and the door is locked, you should pile as many large, heavy objects against the door as possible — desks, tables, chairs, book cases, anything available. The more difficult and time consuming it is for a&nbsp;killer to enter a&nbsp;room, the more likely he’ll go elsewhere. Also, all those things can help stop bullets.</p> <p>After a&nbsp;door is heavily secured, turn off lights, silence cell phones, stay low and keep quiet.</p> <p>A large room isn’t a&nbsp;good idea, especially if there are already a&nbsp;lot of people hiding there, because there’s no safety in numbers. Active killers go where they can find a&nbsp;large number of potential victims.</p> <p>The closer a&nbsp;hiding place is to a&nbsp;window or outside door, the better.</p> <p>You need to check out a&nbsp;number of possible hiding places, in case somebody else has locked one or more that you had identified.</p> <p>It would be tragic if you ever desperately needed a&nbsp;good hiding place, and you didn’t know of one, or you hadn’t identified enough backups, even though you had been going to this school, office or other facility for years.</p> <p><strong>What if you’re face‐​to‐​face with a&nbsp;killer?</strong></p> <p>There are a&nbsp;wide range of situations. When one person acts immediately as an opportunity arises, usually others will get the idea and join in. For instance:</p> <ul><li>In a&nbsp;crowded supermarket parking lot, a&nbsp;22‐​year‐​old man shot U.S. Congresswoman Gabrielle Giffords and 18 others as she held an outdoor constituent meeting. Six people died. The killer used a&nbsp;9mm Glock 19 semi‐​automatic pistol. When he was hastily reloading, he dropped the magazine. Patricia Maisch, standing just a&nbsp;few feet away, grabbed it. Someone behind the killer hit him on the head with a&nbsp;folding chair. Then he was tackled and brought to the ground by Bill&nbsp;Badger, a&nbsp;74‐​year‐​old retired U.S. Army colonel. Patricia Maisch, together with bystanders Roger&nbsp;Sulzgeber and Joseph Zamudo, reportedly helped subdue the killer until police could take him away.</li> <li>A 58‐​year‐​old disgruntled maintenance worker broke into a&nbsp;meeting of the Kanawha County Board of Education, Charleston, West Virginia.&nbsp;He wounded one person with an AK-47 and doused two others with gasoline but was unable to set them afire, because three people nearby were quick to pull his gun away and subdue him.</li> <li>A 16‐​year‐​old boy brought a&nbsp;Winchester 12‐​gauge pump‐​action sporting gun to Columbia High School in East Greenbush, New York. He began shooting randomly, but almost immediately assistant principal John Sawchuck managed jump on him from behind, and the gun went off as they hit the ground. Special‐​ed teacher Michael Bennett was wounded as he came to help. Because of Sawchuck’s decisive action, there were no other casualties.</li> <li>A 15‐​year‐​old boy brought a&nbsp;shotgun and a .22 caliber pistol to school, intending to avenge grievances with the principal, teachers and students. When he aimed the shotgun at a&nbsp;social studies teacher, custodian Dave Thompson managed to grab it from him. The boy reached for the pistol and shot the principal who managed to tackle him and knock the gun away. Others helped hold him for the police, preventing any more shooting, but the principal subsequently died.</li> <li>A 36‐​year‐​old school bus driver brought a&nbsp;handgun to the Laidlaw Transit Services bus yard and opened fire on her co‐​workers. One of them was killed, and three more were wounded. Gregory Alan Lee, another Laidlaw employee, was close enough to grab the killer until the police showed up. San Jose sergeant Steve Dixon remarked, “He saved a&nbsp;lot of lives.”</li> <li>A man, 58, with a&nbsp;12‐​gauge shotgun, broke into a&nbsp;Unitarian Universalist Church in Knoxville, Tennessee during a&nbsp;children’s performance of&nbsp;<em>Annie</em>. He aimed toward the front of the church, killing two and wounding seven others. Jamie Parkey charged him, and several more church members helped subdue the killer.</li> <li>A 69‐​year‐​old man with a .32 caliber pistol planned a&nbsp;massacre of residents at the Kkottongnae Retreat Camp, a&nbsp;Korean Catholic community where he worked as a&nbsp;handyman nearTemecula, California.&nbsp;He wounded a&nbsp;man and killed his wife living in one bungalow, but apparently the shots alerted the couple in the next bungalow. They fought him with their fists, furniture, a&nbsp;dumbell and whatever else happened to be available. The killer was knocked out and taken into custody.</li> <li>A 53‐​year‐​old disgruntled former employee of Grady Crawford Construction Company, Baton Rouge, Louisiana, used a&nbsp;handgun to kill two people and wound a&nbsp;third person there before he was brought to the ground by four other employees. One of them, a&nbsp;foreman, put his finger between the killer’s finger and the trigger guard, preventing the killer from getting off more shots.</li> <li>A 32‐​year‐​old man with a .30–06 hunting rifle shot two students outside Deer Creek Middle School, Littleton, Colorado — only about three miles from Columbine High School. While he was reloading, seventh grade math teacher and track team coach David Benke tackled him and held him until police arrived. Both of the victims survived.</li> <li>A 41‐​year‐​old man with a .357 magnum pistol started firing randomly at a&nbsp;playground where children were playing, outside Kelly Elementary School in Carlsbad, California. Then he went back to his car and tried to get away. But construction worker Carlos Partida dashed to his truck and followed, eventually hitting and stopping the assailant’s car. Partida and several other construction workers piled onto the assailant until the police arrived.</li> <li>At Las Vegas’ New York, New York casino, Justin Lampert thought the popping sounds were coming from a&nbsp;game. Then he saw people screaming and running past him. Behind them, he noticed a&nbsp;shabby‐​looking bearded man about 20&nbsp;yards from where he stood. The man, 51, stopped to reload a&nbsp;9mm pistol. Lampert took off for him and wrestled him to the ground. It turned out that four people had been wounded. The situation could have been much worse. Lampert was an Iraq war veteran and a&nbsp;staff sergeant in the North Dakota National Guard. His brave save accomplished its mission in less than 30&nbsp;seconds.</li> </ul><p><strong>Armed civilians and off‐​duty cops stop killers</strong></p> <p>The fastest way to stop a&nbsp;killer is to have somebody on‐​premises who’s armed, whether a&nbsp;security guard, an off‐​duty police officer or a&nbsp;civilian with a&nbsp;permit. For example:</p> <ul><li>Two men broke into a&nbsp;College Park, Georgia student apartment. They separated the men and women, demanded wallets, planned to rape the women, and since the intruders counted their bullets, they seemed ready to kill everyone. Fortunately, one of the male students pulled a&nbsp;gun out of his backpack and began shooting. One intruder was killed, and the other fled.</li> <li>A 16‐​year‐​old gunman with a&nbsp;Marlin 336 .30–30 caliber rifle broke into Pearl High School, Pearl, Mississippi. He killed two students and wounded seven others. Then he left the school and walked toward an elementary school across the street, presumably for more mayhem. Assistant principal Joel Myrick ran outside to his truck and grabbed his .45‐​caliber semi‐​automatic pistol. He intercepted the killer and detained him until police arrived.</li> <li>A 30‐​year‐​old man with a&nbsp;pistol entered the Players Bar &amp;&nbsp;Grill, Winnemucca, Nevada. He fired, reloaded and fired again, killing one and wounding another. Reportedly this had to do with a&nbsp;dispute between two families. The attacker was killed by a&nbsp;man from Reno who had a&nbsp;concealed carry license for his handgun.</li> <li>A 14‐​year‐​old boy killed a&nbsp;teacher and wounded three others at a&nbsp;Parker Middle School dinner‐​dance in Edinboro, Pennsylvania. James Strand, who owned the banquet hall where the dinner‐​dance took place, got his shotgun and used it to detain the killer for the police.</li> <li>A 24‐​year‐​old man started shooting his pistol at the Youth With A&nbsp;Mission training center, Arvada, Colorado. He killed two people and wounded two others. He left and later opened fire at the New Life Church, Colorado Springs, killing two more people, wounding another two. But former Minneapolis police officer Jeanne Assam shot back, hitting him several times, and he subsequently committed suicide.</li> <li>A 79‐​year‐​old man entered a&nbsp;store in New York Mills, New York and began firing a .357&nbsp;Magnum at employees. One was wounded. Probably somebody would have been killed if off duty police officer Donald J. Moore hadn’t been in the store at the time. He stopped the assailant with his .40 caliber handgun.</li> <li>A 43‐​year‐​old man entered the Appalachian School of Law, Grundy, Virginia and opened fire on administrators with a .380 ACP semi‐​automatic handgun. It isn’t entirely clear what happened next, but he seems to have been subdued by one student, Ted Besen, while two other students, Tracy Bridges and Mikael Gross, retrieved guns from their cars and helped detain the killer for police.</li> </ul><p>NOTE: An armed civilian who stops a&nbsp;killer must be extremely cautious when police officers arrive, because they know little, if anything, about what happened. They don’t know who the good guys and bad guys are.</p> <p>If they see a&nbsp;civilian with a&nbsp;gun in a&nbsp;place where there has been shooting, they might well assume that person is the killer and start shooting.</p> <p>The best advice is to drop your gun and open your hands to show you don’t have anything.</p> <p>Don’t make any sudden movements.</p> <p>You might be handcuffed until you have had an opportunity to explain, because the police will be preoccupied trying to determine how many killers there are and who needs medical attention.</p> <p><strong>Talk a&nbsp;prospective killer out of it?</strong></p> <p>Although active killers rarely negotiate, since their goal is a&nbsp;maximum body count for notoriety, occasionally a&nbsp;confident, resourceful, compassionate individual is able to engage a&nbsp;killer and persuade him to not to do terrible things. It might be worth trying before shooting begins.</p> <p>You probably heard about the quiet heroism of a&nbsp;Georgia school bookkeeper. In case you didn’t: on August 20, 2013, a&nbsp;man dressed in black followed a&nbsp;student with a&nbsp;pass into the Ronald E. McNair Discovery Learning Academy near Atlanta. The man, armed with a&nbsp;semi‐​automatic weapon, stopped in the office where he encountered Antoinette Tuff. He told her to call the police and warn them to stay out of the building.&nbsp;She did that, and while she talked with the dispatcher, the man went into the hallway and fired some shots.</p> <p>The man returned to Tuff, and she relayed the message to him that no police would come into the building. Then she started a&nbsp;sympathetic conversation with him, captured on the 24‐​minute 911 recording that has some incredible moments amidst periods of silence when Tuff&nbsp;<a href="http://www.slate.com/blogs/the_slatest/2013/08/22/antoinette_tuff_911_call_listen_to_the_full_tape_of_ga_school_clerks_call.html">put the dispatcher on hold</a>.</p> <p>Apparently Tuff didn’t display any fear. She took the initiative to share some of her personal struggles. “I&nbsp;tried to commit suicide last year,” she explained. “My husband left me after 33&nbsp;years.” She added, “I’ve got a&nbsp;son who’s multiple‐​disabled. “</p> <p>He said he had nothing to live for, and she replied, “Look at me now. I’m working, and everything is OK.”</p> <p>She went on to say that she had stumbled but picked herself up, and he could pick himself up, too. She offered to walk with him out of the building, so that nobody would hurt him. He agreed to give her his gun, and she put it on the other side of the office. As directed, he emptied his pockets and lay on the floor with his hands behind his back, awaiting the police.</p> <p>“Nobody’s going to hate you,” she said. “You didn’t hurt anybody. It’s going to be all right, sweetie. I&nbsp;just want you to know I&nbsp;love you, OK? And I’m proud of you. That’s a&nbsp;good thing you’re giving up. Don’t worry about it. We all go through something in life.”</p> <p>Later, after the man was in police custody, Tuff said, “I’ve never been so scared in all the days of my life.”</p> <p>As these cases suggest, there are times when you must have your wits about you to survive.</p> <p>Even in the most difficult circumstances, though, there are probably more ways than you might imagine to protect your life and your liberty.</p> </div> Wed, 04 Sep 2013 09:26:00 -0400 Jim Powell https://www.cato.org/publications/commentary/what-should-you-do-youre-threatened-mass-murderer College Education Costs Are Likely to Drop at Least 50% — without Government Intervention https://www.cato.org/publications/commentary/college-education-costs-are-likely-drop-least-50-without-government Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>After the federal government has injected more than $1 trillion into higher education, doing more than anything else to inflate the cost of higher education — now comes President Obama who claims he can reduce costs with even more intervention.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Obama offers the latest of his command‐​and‐​control schemes: government‐​controlled ratings of colleges and universities that would help determine which institutions get government money and which institutions are denied. Of course, the Department of Education wouldn’t politicize college ratings like the IRS.</p> <p>This is the same man who, while he was promoting government‐​run health insurance, vowed that it would lower health insurance premiums and that “If you like your health insurance plan, you can keep it” — until health insurance premiums soared, and people began losing their health insurance plans.</p> <p>The fact is that nothing he’s proposing would stop the inflation of college costs, as long as more dollars — via subsidized student loans — are chasing basically the same number of college openings. The gusher of federal money has encouraged more students to go to college — more students than there are jobs requiring a&nbsp;college degree. This, in turn, has encouraged colleges to spend more money on everything. Colleges have learned they can endlessly hike their rates, and next year there will be even more applications. The richest colleges, with endowments in the billions, hike their rates like everybody else.</p> <p>I’m in the midst of all this, because three years ago my son entered a&nbsp;top tier research university, and the cost of tuition, student life fee, room charge, meal plan and insurance was about $60,000. My daughter will be attending the same university, and the tab is now about $66,000. That’s up 10 percent in three years. Higher education inflation has soared about 900 percent during the last 30&nbsp;years. The education is great, but there’s the prospect of worrisome debt.</p> <p>Ironically, Obama’s effort to gain more control over colleges and universities comes as the private sector is in the early stages of cutting college costs dramatically — if the government doesn’t interfere. In free markets, high prices give people powerful incentives to develop options, and that process is well underway.</p> <p>Privately‐​funded technologies have sparked a&nbsp;revolution in the education business whose basic method — bring together a&nbsp;wise teacher and a&nbsp;motivated student — haven’t changed much since the days of Socrates, Plato and Aristotle. Oxford University has had the same model for almost a&nbsp;thousand years.</p> <p>Salman Khan, a&nbsp;former hedge fund analyst, showed how dramatically and inexpensively all levels of education could be improved with simple online methods&nbsp;<a href="http://www.cbsnews.com/video/watch/?id=7401696n" target="_blank">like a&nbsp;computer blackboard</a>. His Khan Academy videos have reportedly been viewed more than 200 million times by people around the world.</p> <p>Consider undergraduate lecture classes, the biggest moneymakers in the traditional college curriculum. A&nbsp;lecture class is often attended by hundreds of students — the largest number supporting a&nbsp;single professor’s salary.</p> <p>Because these are such big classes, there isn’t much opportunity for students to ask questions or interact in other ways with a&nbsp;professor. Consequently, lecture classes could be replaced with&nbsp;online learning programs that feature recorded presentations by the world’s best professors, regardless where they might be affiliated. Even the most humble college could arrange for its students to benefit from the best professors.</p> <p>Such programs could incorporate a&nbsp;wide range of visual elements, including illustrations, video clips, computer graphics and animation, to enliven presentations and help students retain more.</p> <p>To get an idea what recorded lectures might look like — without much in the way of video enhancements — one need only look at the website of the Teaching Company,&nbsp;<a href="http://www.thegreatcourses.com/greatcourses.aspx?ai=73058&amp;mkwid=s3jtSRbVA_dc&amp;pcrid=28152949142&amp;pkw=teaching%20company&amp;pmt=e&amp;cmp=PS_Brand_google_US&amp;gclid=COH9o5_0k7kCFUii4Aod0DoAuQ" target="_blank">now known as Great Courses</a>. For a&nbsp;quarter‐​century, it has been identifying and recording hundreds of lectures by America’s best professors on science, mathematics, history, geography, art, music, philosophy, social science, foreign languages and much more. Audio and video recordings are available. They’re fabulous. Course costs vary with the length. They range from $30 to several hundred dollars, and Great Courses seems to haves sales every month.</p> <p>Who decides which professors qualify as the best? The customers. Individuals or colleges are free to choose the professors whose presentations they want to use in their programs.</p> <p>Because such programs could be licensed to large numbers of institutions, the cost to licensees would be less than having a&nbsp;best professor on staff.</p> <p>Note that the process of showing students presentations by the best professors is like selecting textbooks. College departments are likely to choose better textbooks when they have more choices. What college would be so backward as to insist that a&nbsp;textbook could be assigned in a&nbsp;class only if it was written by one of the college’s professors? That would mean less choice and almost certainly inferior textbooks.</p> <p>Online learning isn’t poised to replace only traditional lectures. It could replace most general education requirements, except perhaps for those requiring lab work. All these could be better handled by recorded presentations from the best professors. Why would a&nbsp;student want to be limited to professors who happen to be based at a&nbsp;single campus, when the best, wherever they might live, can be seen with a&nbsp;few clicks?</p> <p>Increasingly sophisticated software, Dan W. Butin, an author and professor of education,&nbsp;<a href="http://elearnmag.acm.org/featured.cfm?aid=2263018" target="_blank">explained in&nbsp;<em>eLearn Magazine</em></a>, aims to include “an adaptive testing model in which students are presented with a&nbsp;question about a&nbsp;lecture topic at an appropriate level of difficulty based on their correct or incorrect answers to previous segments. As students demonstrate mastery at specific levels, they can move forward. In the event of incorrect answers, they are sent to subprograms to test for and support key background skills and knowledge. Such subprograms, in turn, could make use of a&nbsp;wider set of resources that students work through until they are able to rejoin the course at the point at which they were first stumped. These subprograms could themselves be liked to a&nbsp;formidable array of computer‐​based intelligent tutoring systems (ITS) that have been shown to be as effective as human tutors by mimicking real‐​life tutors as they ‘walk students through’ a&nbsp;problem and its solution.”</p> <p>Butin added, “Well‐​designed studies have begun to show that not only are such automated models as good as human teaching or tutoring, in many cases they increase certain types of learning by 20–50 percent.”</p> <p>Upgrading college lectures and most general education requirements while cutting costs with the best professors would pose two challenges for colleges.</p> <p>First, lucrative undergraduate lectures and other large introductory classes enable a&nbsp;college to take money from undergraduate families and give it to somebody else who’s probably not benefiting their children — namely, graduate school professors with perhaps a&nbsp;half‐​dozen graduate students in, say, a&nbsp;Ph.D. seminar.</p> <p>Because colleges are squeezing undergraduate families so much, colleges shouldn’t count on them to subsidize somebody else’s graduate education forever. Higher unemployment and/​or federal financial problems that result in student loan cutbacks could mean serious resistance to escalating college costs.</p> <p>Without subsidies from undergraduate families, money to support graduate programs would have to be obtained from other sources, or graduate school fees would have to be raised quite a&nbsp;bit until they cover the cost of graduate education less whatever portion might be borne by endowment funds.</p> <p>Many professors working with graduate students are among the best professors and could earn their keep by developing recorded presentations for undergraduates and graduates, used at their home base as well as licensed for use at other institutions.</p> <p>If a&nbsp;professor is a&nbsp;Nobel Prize winner or considered to be on a&nbsp;Nobel short list, he or she could be a&nbsp;draw for donors despite focusing on research and minimizing time with students. Otherwise, a&nbsp;research institute might be a&nbsp;better fit than a&nbsp;college or university.</p> <p>The second challenge of replacing big lecture classes and other large introductory classes with online presentations by the best professors is what to do with non‐​best professors under contract to a&nbsp;college. If they don’t develop competitive presentations or contribute in other ways to a&nbsp;best‐​professor system, then probably their contracts shouldn’t be renewed, so that costs can be reduced. These people are likely to be the most vocal opponents of cutting costs.</p> <p>Colleges are likely to find themselves in the same position that Hollywood movie studios faced with the coming of talkies during the late 1920s and early 1930s. While old contracts obligated studios to continue paying actors who couldn’t adapt to the new medium, the studios scrambled to find new talent that could thrive with it. Because colleges still have many tenured professors (about a&nbsp;quarter of the total), the transition to more online learning will be slower than it would be otherwise.</p> <p>For colleges, personnel and financial transition issues seem likely to be more challenging than online technology issues.</p> <p>Clearly, one thing online learning technology can do is enable colleges to cut their staffing cost while increasing the number of students who can be well‐​served.</p> <p>Western Governors University&nbsp;is a&nbsp;pioneer. Launched in 1998 by governors of 19 western and mid‐​western states and based in Salt Lake City, Utah, this is a&nbsp;private, nonprofit university that doesn’t receive any government subsidies, though each state contributed $100,000 of seed money. The university has four colleges: Business, Information Technology, Teacher Education and Health Professions. Bachelors and master’s degrees are offered in each.</p> <p>This is the first accredited university to be competency‐​based.&nbsp;Students can move rapidly through topics they already know, so they can focus on what they need to learn. Students receive credit for knowledge they can demonstrate, regardless how little time they might have spent in a&nbsp;classroom. Degree programs involve textbooks, web tutorials, online classes and other materials. The university licenses course modules from major educational publishers including Pearson and McGraw‐​Hill. Testing is done at proctored exam sites.</p> <p>The university reports it has about 38,000 students from all 50 states. There are about 1,100 full‐​time staff and 200 part‐​timers. The average student earns a&nbsp;degree in about 30 months with a&nbsp;total tuition cost around $17,000.</p> <p>The Massachusetts Institute of Technology ventured into the online world when, in 2001, it began posting course materials for nearly all its classes. There are now&nbsp;<a href="http://www.nytimes.com/2011/12/19/education/mit-expands-free-online-courses-offering-certificates.html">postings for some 2,100 MIT courses</a>, and they have been viewed by more than 100 million people.&nbsp;In 2011, MIT began offering free online courses, and it awarded certificates to those who demonstrated mastery of the subjects. About 120,000 people enrolled in the first course, “Circuits &amp;&nbsp;Electronics,” and 10,000 took the final exam.</p> <p>A German immigrant, Sebastian Thrun, became a&nbsp;research professor of computer science at Stanford University, and in 2011 he created a&nbsp;free online course about artificial intelligence. More than 160,000 students enrolled. The following year, Thrun and two associates, David Stavens and Mike Sokolsky,&nbsp;established Udacity, a&nbsp;for‐​profit educational corporation to develop massive open online (MOOCs) courses for large‐​scale participation. Funding has come from venture capitalists as well as the principals. Udacity reports that students have enrolled from more than 200 countries, and their ages range from 13 to over 80.</p> <p>In May 2012,&nbsp;<a href="http://www.nytimes.com/2012/05/03/education/harvard-and-mit-team-up-to-offer-free-online-courses.html">Harvard and MIT</a>&nbsp;launched&nbsp;edX, a $60 million non‐​profit for creating online classrooms with free online courses. They include discussions, labs and quizzes. The prestige of these institutions helps give more credibility to the online education phenomenon, though it remains to be seen whether they will be leaders or laggards with online courses for credit. They might be concerned about undermining their elite brands with mass market products.</p> <p>In any case, Dan W. Butin noted in&nbsp;<em>eLearn Magazine</em>, “It’s just a&nbsp;matter of time before someone solves the logistics of user authentication to turn a&nbsp;certificate [of mastery] into transferable credit for a&nbsp;nominal fee. There have been attempts, but they haven’t gained acceptance.”</p> <p>In April 2012, two Stanford University computer science professors — Israeli‐​American Daphne Koller and UK‐​born Chinese Andrew Ng — established&nbsp;Coursera, a&nbsp;company that provides a&nbsp;computer platform for free online courses. Coursera offers more than 400 courses in 20 categories by partnering with Duke University, Johns Hopkins University, Princeton University, University of California (Berkeley), the University of Pennsylvania, Yale University and others — 85 altogether in the U.S. and abroad. Some 4&nbsp;million students have enrolled in Coursera courses.</p> <p>In mid‐​August 2013, Georgia Tech&nbsp;<a href="http://www.nytimes.com/2013/08/18/education/masters-degree-is-new-frontier-of-study-online.html?pagewanted=all" target="_blank">made news</a>&nbsp;when it introduced an online master’s degree program in computer science, priced at $6,600. Georgia Tech offers the same program on campus for $45,000.</p> <p>If this proves to be popular, other major colleges and universities are likely to offer more online programs that offer a&nbsp;degree rather than a&nbsp;certificate of mastery or completion that online programs tend to offer now.</p> <p>As employers hire online graduates and find them to be competent — indicating that online degrees are predictors of success — then hold onto your seats, because online learning will be taking off. The success of comparatively inexpensive online alternatives will intensify pressure on traditional on‐​campus colleges to cut their costs.</p> <p>To be sure, there’s no telling which, if any, of these initial participants, strategies and technologies will survive. Dramatic changes are the norm during the development of any new product or service. For sure, somebody has to come up with a&nbsp;business model that can yield profits.</p> <p>It has been suggested that online learning could make it possible to cut the traditional four‐​year college experience to two years. That would be the time for small undergraduate seminars, lab work and other functions, including social functions, that can only be done when students are together on campus. The single step of transitioning from a&nbsp;four‐​year college to a&nbsp;two‐​year college could cut college costs in half.</p> <p>Many of those who can afford a&nbsp;four‐​year college experience will continue to choose that, especially if a&nbsp;college offers something special like girls, water skiing, football or an Ivy League credential.</p> <p>Critics like to say that online learning cannot replace all in‐​person campus experiences, but it would be hard to find anybody who would make such a&nbsp;general claim. Even if current college management practices were the best from the standpoint of education, they cannot be sustained, because they cost too much, and too many students are becoming overwhelmed with debt.</p> <p>Online learning can do as well or better than many in‐​person campus experiences. Online learning is likely to become one among a&nbsp;number of standard elements of a&nbsp;college education.</p> <ul><li>Online learning makes possible dramatic cuts in college costs.</li> <li>Courses based on recorded presentations by the best professors, regardless where they might be based, expose students to more high‐​powered teaching talent than is likely exist on any campus.</li> <li>Gone is the common annoyance of paying steep tuition even when one or more of a&nbsp;student’s courses are handled by graduate student teaching assistants, not professors.</li> <li>It’s common for students not to know in advance who will teach a&nbsp;course, but when courses are based on recorded presentations by the best professors, their names will be known — they’re bragging points!</li> <li>Online learning takes place at a&nbsp;time and place convenient for students, not wherever and whenever a&nbsp;college is able to schedule a&nbsp;class. This flexibility of online learning accommodates students with jobs and families as well as everyone else.</li> </ul><p>A caveat: Low pass rates on some online exams make one wonder if successful results require participants who are self‐​starters. Online technology, regardless how sophisticated, might not work if participants are easily distracted and cannot focus on their work for extended periods.</p> <p>On the other hand, low pass rates aren’t very surprising when registration is easy, and courses are free. Undoubtedly many people are simply curious to see what a&nbsp;course is like. By contrast, when people have a&nbsp;practical need for particular knowledge, and they must pay to get it, they have a&nbsp;stronger motivation to finish a&nbsp;course and pass an exam.</p> <p>Charles Murray, in his book&nbsp;<em><a href="http://www.amazon.com/Real-Education-Bringing-Americas-Schools/dp/0307405397/ref=sr_1_5?s=books&amp;ie=UTF8&amp;qid=1377270687&amp;sr=1-5&amp;keywords=charles+murray" target="_blank">Real Education</a></em>, urged that the process of learning skills and certifying competency should be separated. There certainly is a&nbsp;conflict of interest if schools that do the teaching also do the testing to determine how effective the teaching was. This is why students in accounting and law go to professional schools, then take competency exams before they can actually begin their careers.</p> <p>Separating the educational process from the certification process would enable individuals to use more diverse methods of learning. In effect, they could build a&nbsp;portfolio demonstrating different competencies. Students would be able to demonstrate what they need to in ways that suit their budgets and interests.</p> <p>Independent certification of skill‐​sets should make it easier for employers to determine an individual’s ability to perform — and make it easier for a&nbsp;competent person to get a&nbsp;job.</p> <p>So, the private sector is setting the stage for better education at much less cost — exactly what government cannot do. That’s because people in government spend other people’s money, and as we know, people aren’t as careful with other people’s money as they are with their own money.</p> <p>When government tries to solve a&nbsp;problem, it mainly does two things: use force and throw money.</p> <p>For example, in 2010 the Los Angeles government school district tried to improve its wretched K-12 schooling, and the result was the 24‐​acre Robert F. Kennedy Community Schools complex, the most costly public school facility ever built in the United States. It cost $578 million ($140,000 per student).&nbsp;The sports and entertainment center alone cost $375 million. The school district approved this extravagance even though it was struggling with a $640 million budget deficit that resulted in laying off some 3,000 teachers. Despite all this wild spending, the district’s test scores are still among the lowest in the country, and the graduation rates are among the worst.</p> <p>Spurred by competitors taking advantage of new technologies, colleges will be under intense pressure to cut costs while doing a&nbsp;better job. There’s no need for a&nbsp;heavy‐​handed president making threats and trying to take over another sector of the economy.</p> <p>Colleges that don’t find better, cheaper ways of delivering a&nbsp;good education will probably either fade away or be absorbed by somebody else.</p> </div> Mon, 26 Aug 2013 13:35:00 -0400 Jim Powell https://www.cato.org/publications/commentary/college-education-costs-are-likely-drop-least-50-without-government What Are the Most Likely Outcomes of State and Municipal Financial Crises? https://www.cato.org/publications/commentary/what-are-most-likely-outcomes-state-municipal-financial-crises Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Across the U.S., investigators are scrambling to find out how much debt states and municipalities have taken on. The general answer is: far more debt than has been previously disclosed, often debt beyond legal limits and without required approvals. The debt is in the trillions.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>There are sure to be some epic showdowns between (1) interest groups determined to collect everything politicians promised them and (2) taxpayers determined not to pay for other people’s problems — especially since many of the problems involve other people’s pension and health care benefits plans that are much richer than their own.</p> <p>The interest groups include institutions holding some $3.5 billion of municipal bonds and labor unions representing most of America’s 19 million state and local government employees. What can we expect to happen?</p> <p><strong>1. Probably there will be more strikes disrupting public services including public schools</strong>.&nbsp;<strong>Some of these strikes are likely to be prolonged and perhaps violent.</strong></p> <p>When politicians take serious steps to curb runaway spending, there’s sure to be defiant push‑back.</p> <p>The 2012 Chicago teachers’ union strike made clear the determination of union bosses to gain the most costly contracts, regardless of the ability of the city to pay. Chicago public school teachers have made more money than teachers elsewhere — between $71,000 and $76,000, not counting pension and health care benefits — for working America’s shortest school days. That might be fine if results were stellar, but only about 20 percent of Chicago’s 8th&nbsp;graders are proficient readers, and only&nbsp;<a href="http://online.wsj.com/article/SB10000872396390443524904577651533203955546.html" target="_blank">60 percent of students</a>&nbsp;graduate from high school. Chicago teachers went on strike the day after they were offered a&nbsp;16 percent pay raise over four years, while millions of Americans were struggling to find full‐​time jobs.</p> <p>Union tactics don’t seem to have changed since New York City’s financial crisis of the 1970s. In 1975, Mayor Abraham D. Beame proposed that municipal unions accept a&nbsp;6 percent pay cut, and tens of thousands of outraged union members responded with noisy protests in lower Manhattan. Beame proposed limited layoffs, and the result was a&nbsp;deluge of walk‐​outs and sick‐​outs.</p> <p>The&nbsp;<em>New York Times</em>&nbsp;<a href="http://www.nytimes.com/2011/10/20/opinion/in-bleak-70s-salvo-of-protest.html" target="_blank">reported</a>&nbsp;that “Laid‐​off police officers rushed onto the Brooklyn Bridge, their still employed brethren reluctant to make arrests. Sanitation workers went on a&nbsp;wildcat strike, leaving garbage piled up in the South Bronx and on the Upper East Side alike. Perhaps the most creative acts of resistance occurred in November, when the city shut Engine Company 212, a&nbsp;fire company in Williamsburg, Brooklyn. Tipped off to the imminent closure by an air‐​raid siren, residents occupied the fire station, refusing to leave or to let the fire engine be driven away. They slept and ate there, and held meetings every Tuesday night that were open to the community and attracted large numbers of activists.”</p> <p>During struggles to stop runaway spending, it will be abundantly clear that the unions are pursuing their own self‐​interest, not the interest the public they are supposedly serving amidst state and local financial crises.</p> <p><strong>2. When states try to force financial reforms on insolvent municipalities, local officials are likely to resist — slowing down and complicating a&nbsp;reform process.</strong></p> <p>Local officials don’t want state officials taking over their turf. “It looks like the Germans occupying Paris,” remarked a&nbsp;Rhode Island lawyer representing local officials amidst a&nbsp;state takeover. In addition, local officials are driven by labor union members who don’t want their generous pension and health benefits plans cut back.</p> <p>In Detroit, resistance has racial overtones, since 80 percent of Detroit’s population is black, and for 39&nbsp;years Detroit’s mayors have been black Democrats, whereas the state government is currently in the hands of white Republicans.</p> <p>One thing for sure, those mayors generally didn’t do any favors for ordinary folks who more than anything needed a&nbsp;prosperous economy and safe streets. Instead there was racial hustling and massive corruption.</p> <p>The most notorious hustler was Kwame Malik Kirpatrick who, at 31&nbsp;in 2001, became the youngest mayor of Detroit. He went wild with his city‐​issued credit card, running up more than $200,000 of bills for all sorts of personal items like strippers performing at the mayor’s official residence. He went on to spend time in the slammer for perjury, obstruction of justice, mail fraud, wire fraud and racketeering. Clearly, a&nbsp;bailout can’t help a&nbsp;desperate city recover when voters repeatedly elect politicians like this.</p> <p><strong>3. Creditors — especially bondholders and government employees — count on government’s taxing power to pay everything a&nbsp;state or municipality might owe. But the taxing power often backfires.</strong></p> <p>If there’s a&nbsp;shortfall, the answer is always to raise taxes as much as necessary until creditors are fully paid.</p> <p>But the higher taxes go, the stronger the incentives people have to change their behavior in ways that will reduce their tax liabilities.</p> <p>For example, higher property taxes will generate upward pressure on rents. More people will start looking for cheaper places to live and work.</p> <p>Increasing numbers of people will come to the conclusion that it makes sense to move out of a&nbsp;high‐​tax jurisdiction and go where it’s less expensive to live, start a&nbsp;business, grow a&nbsp;business and, ultimately, retire.</p> <p>Consequently, the taxing power can lead to an exodus of employers, an exodus of people and an exodus of capital. So the taxing power can contribute to a&nbsp;declining population and economy, reducing tax revenues and making it more difficult for a&nbsp;state and/​or municipality to pay its bills.</p> <p>This is what happened to Detroit which lost a&nbsp;quarter of its population between 2000 and 2010. Many high‐​tax states and municipalities are similarly suffering from net outflows of people.</p> <p><strong>4. Cities will try restricting the ability of people and employers to move away.</strong></p> <p>One way of making it harder for people to move away is to order steep hikes in property transfer taxes, so that it’s more expensive to sell property. At the very least, this is a&nbsp;deliberate nuisance that tells investors they’re not welcome.</p> <p>Cities could make it more difficult for employers by requiring advance notice — like 180&nbsp;days — before a&nbsp;business could shut down a&nbsp;facility.&nbsp;This would subject employers to possible intimidation and violence.</p> <p>Employers might be obligated to continue paying for terminated employees’ pension and health care benefits as well as providing big severance payments and paying the cost of job retraining. If employers are believed to have violated such laws, they might be subject to individual or class action lawsuits as well as civil penalties for each day of violation.</p> <p><strong>5. In the name of “regionalization” and “revenue sharing,” city dwellers probably will try to tax suburbanites. Doing this will require help from politically‐​connected friends in state capitals and in Washington, who could give an urban jurisdiction some power over a&nbsp;suburban jurisdiction.</strong></p> <p>This idea seems to have been kicked around for decades, and apparently Detroit’s bankruptcy has revived interest in it. For example, recently the&nbsp;<em>New York Times</em>&nbsp;published a&nbsp;<a href="http://www.nytimes.com/2013/08/04/opinion/sunday/sunday-dialogue-can-suburbs-help-cities.html?pagewanted=all" target="_blank">feature about it</a>.</p> <p>While city dwellers want suburban money, they won’t want suburbanites telling them what to do with the money.</p> <p>There are a&nbsp;number of ways of doing regionalization. For example, establish or expand regional taxing authorities to support hospitals, utilities, rapid transit systems and/​or other entities.</p> <p>A variation of regional taxing authorities would be regional school authorities, combining suburban school districts with crime‐​ridden inner city school districts. Like forced busing, that would probably provoke another exodus.</p> <p>Some municipalities might try to revive commuter taxes like New York City had for three decades until 1999. Commuter taxes require the approval of state legislators. Over time, more and more suburbanites worked in the suburbs, and they didn’t see the point of paying taxes to a&nbsp;jurisdiction they neither lived nor worked in. That was the end of New York City’s commuter taxes.</p> <p>In Michigan, three counties voted for a&nbsp;property tax levy to help support the Detroit Institute of Arts, but it might be difficult to come up with something else that would be mutually beneficial for city and suburbs. If it isn’t mutually beneficial, it will be forced and deeply resented. Probably the result would be another exodus to more distant destinations.</p> <p><strong>6. More states and municipalities will be charged with securities fraud.&nbsp;</strong></p> <p>The first state charged was New Jersey in August 2010. The Securities &amp;&nbsp;Exchange Commission accused it of misleading investors into believing that New Jersey government employee pension funds were properly‐​funded when New Jersey sold $26 billion of bonds between 2001 and 2007. While the state was supposed to have contributed $67 billion for the pension funds, it had contributed only $21 billion — <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/08/18/AR2010081806792.html" target="_blank">a $46 billion shortfall</a>.</p> <p>New Jersey officials did more than fail to disclose unfunded pension liabilities that could impair its ability to make bond payments. Officials claimed there was a&nbsp;special reserve fund to cover pension liabilities, but the fund turned out to be an accounting illusion. It led investors to pay more for the bonds than they were actually worth.</p> <p>Despite the substantial amount of money involved, the SEC settled the case quickly. New Jersey officials denied any wrongdoing and vowed not to do it again. No New Jersey officials seem to have been reported paying fines, losing their jobs or going to prison. By contrast, the Sarbanes‐​Oxley law (2002) holds private corporate executives to a&nbsp;much higher standard — personal responsibility for other people’s actions — even though far smaller amounts of money are involved, compared with the tens of billions in a&nbsp;state government employee pension fund.</p> <p>To be sure, the SEC cannot force states to honor pension fund commitments. The SEC can’t even force states to accurately disclose its pension fund liabilities. The SEC’s power is limited to requiring adequate disclosures that affect bond offerings.</p> <p>All such disclosure can do is make a&nbsp;point, perhaps embarrassing irresponsible state officials and generating some public pressure to fulfill obligations for the pension health care benefit plans.</p> <p>In this, the SEC has been a&nbsp;laggard, not a&nbsp;pioneer. Three years before the SEC announced its charges against New Jersey, the&nbsp;<em>New York Times</em>&nbsp;reported serious discrepancies in New Jersey’s accounting for government employee pension funds. “The discrepancies raise questions about how much money is really in the pension funds,” the article noted. But better late than never.</p> <p>In March 2013, the&nbsp;<a href="http://www.nytimes.com/2013/03/12/business/sec-accuses-illinois-of-securities-fraud.html" target="_blank">SEC accused</a>&nbsp;Illinois of securities fraud when it issued $2.2 billion of bonds between 2005 and 2009. Here again, there was more than a&nbsp;failure to disclose liabilities that could impair the ability of a&nbsp;state to make bond payments. For some 15&nbsp;years, Illinois issued annual reports that claimed it was making scheduled contributions for government employee pension funds, when actually there were ever larger shortfalls, and the pension funds didn’t have enough money for current and future obligations. Top officials didn’t admit any wrongdoing, but they agreed to “cease and desist” from doing it again.</p> <p>The SEC charged Pennsylvania’s capital city, Harrisburg, with securities fraud in May 2013. For years, local politicians had gone on spending binges for money‐​losing projects like a&nbsp;sports arena, a&nbsp;Civil War museum and a&nbsp;big incinerator that didn’t work. Between 2009 and 2011, officials suppressed worsening news so that investors would overpay for bonds. When the cover‐​up could no longer be sustained, Officials neither denied nor admitted the charges. The SEC’s settlement omitted the names of responsible officials, and it didn’t mention penalties.</p> <p>Despite the SEC’s outrageous policy of giving dishonest officials an easy‐​pass, more people are coming to recognize that cities as well as states are running out of money. There are financial crises developing across the country. California, Connecticut, Illinois, New Jersey and New York and Washington rank among the most financially‐​troubled states. Big cities struggling include Camden, Chicago, Los Angeles, New York, Providence and San Diego. Many smaller cities are in financial trouble, too.</p> <p>There have been financial gimmicks aplenty for misleading municipal bond investors. For example, the&nbsp;<em>New York Report</em>&nbsp;(2012), from the State Budget Crisis Task Force,&nbsp;<a href="http://www.statebudgetcrisis.org/wpcms/wp-content/images/NY-Report.pdf" target="_blank">acknowledged</a>&nbsp;that “Common practices are to transfer ‘excess’ revenues from other state funds and public authorities, refinance outstanding bonds without creating new assets while realigning debt service payments to achieve front‐​loaded savings, roll or delay payments to suppliers, contractors and localities from one fiscal year to the next, and delay payment of tax refunds into the following fiscal year.”</p> <p><strong>7. Pressure will be intensifying for a&nbsp;political resolution of state and municipal financial crises.</strong></p> <p>Bankruptcy proceedings tend to involve significant concessions from both bondholders and labor unions.</p> <p>David A. Skeel Jr., of the University of Pennsylvania Law School,&nbsp;<a href="https://lawreview.uchicago.edu/sites/lawreview.uchicago.edu/files/uploads/79_2/04%20Skeel%20ART.pdf" target="_blank">explained</a>, “Much as admiralty law’s ‘general average’ principle requires that every constituency share in the cost of measures taken in response to a&nbsp;crisis during a&nbsp;voyage, bankruptcy requires that the sacrifice be borne by everyone, rather than one or two disfavored constituencies…The principle of equal treatment of creditors is deeply entrenched.”</p> <p>It’s quite possible that in a&nbsp;bankruptcy proceeding, labor union pension and health care plans would be protected only to the degree that they’re funded. Since these plans are major factors in state and municipal financial crises precisely because they’re substantially unfunded, unions could emerge from bankruptcy proceedings as big losers. That’s why they want politicians to step in and make sweetheart deals.</p> <p>If General Motors had gone through bankruptcy proceedings in 2009, probably both bondholders and labor unions would have ended up with an equal share of the reorganized company. But labor unions had spent hundreds of millions of dollars helping Barack Obama win the 2008 presidential election. Unions demanded their payoff. Obama appointed Wall Street wheeler‐​dealer and Democratic fundraiser Steven Rattner to become “Car Czar,” protecting the unions’ interests. He seems to have been the one who decided that investors with $27 billion of General Motors bonds should receive only a&nbsp;10&nbsp;percent share of the restructured company, while the United Auto Workers Union, with $20&nbsp;billion of claims, should receive a&nbsp;rich 39 percent of the company. The federal government ended up with a&nbsp;50 percent share of the company, but since it wasn’t an active owner, the unions gained control.</p> <p>Now unions are demanding that Obama bail out Detroit. Most Democrats seem to favor such a&nbsp;bailout.&nbsp;<a href="http://opinionator.blogs.nytimes.com/2013/07/19/we-have-to-step-in-and-save-detroit/?_r=0" target="_blank">Steven Rattner wrote&nbsp;</a>a&nbsp;<em>New York Times</em>&nbsp;piece insisting that “We have to step in and save Detroit.”</p> <p>But Detroit’s problems didn’t develop because of a&nbsp;lack of money. Back in 1960, Detroit had the highest per capita income in the U.S. Detroit’s problems are primarily consequences of bad policies. They certainly weren’t unique to Detroit, but together they made a&nbsp;devastating cocktail:</p> <ul><li>Detroit has had the highest income taxes in its state, and people figured out they could give themselves a&nbsp;tax cut by just moving out of the city.</li> <li>Welfare benefits for single teenage mothers created perverse incentives not to get married, thereby increasing the odds that single teenage mothers would stay poor and that they would have difficulty controlling their children, especially teenage boys — thereby contributing to higher crime rates.</li> <li>Minimum wage laws made it illegal for employers to hire unskilled, inexperienced people unless they were given the pay of people who had marketable skills and experience. This policy has had the effect of denying unskilled, inexperienced people opportunities to gain on‐​the‐​job experience and become more valuable — thereby perpetuating poverty.</li> <li>Costly unionized government school monopolies (with a&nbsp;market share over 90 percent) have failed to help inner city children master fundamental skills needed to rise out of poverty and prosper.</li> <li>Skyrocketing taxes and crime rates made Detroit an unattractive place to do business, and increasing numbers of employers moved out.</li> <li>After the 1967 race riots, mayors increasingly catered to black constituencies with anti‐​white rhetoric that convinced more and more whites to leave the city. The city’s population, now around 714,000, is less than it was in 1920 (993,698).</li> </ul><p>These policies are still the prevailing orthodoxy, and no amount of bailout money will revive Detroit as long as they’re in effect. In these circumstances, it would be easy to pour tens or even hundreds of billions into Detroit and have nothing to show for it except colossal corruption.</p> <p>Perhaps that’s a&nbsp;major reason why Obama’s Treasury Secretary John Lew claimed there would be no bailout. He might also have been aware of polls showing that most Americans don’t want more bailouts.</p> <p>But Lew left the administration some wiggle room. He was quoted as saying, “We stand with Detroit and have been working with them, the technical advice, working with the kinds of normal programs the federal government has, to see if there’s anything we can do to help.” Well, the federal government has hundreds, maybe thousands of “normal” spending programs that could pour a&nbsp;lot of money into Detroit, even if nobody in the administration dares to call it a “bailout.” Perhaps the first of the payments will be $100 million to demolish some abandoned buildings — Detroit has approximately 78,000 of those.</p> <p>What about a&nbsp;payoff for the unions, Obama’s top priority? He might be bold and order a&nbsp;federal guarantee of Detroit’s $9.4 billion of unfunded liabilities — $3 billion for pensions and $6.4&nbsp;billion for health care benefits.</p> <p>Such guarantees have been a&nbsp;popular way of appeasing powerful interest groups, because guarantees don’t cost anything when they’re issued. Costs usually occur after a&nbsp;politician has left office, and they’re somebody else’s problem.</p> <p>In Detroit’s case, Obama might belittle the numbers as chump change, suggesting that money for Detroit shouldn’t be compared with the notorious Wall Street bailouts.</p> <p>Of course, Chicago, New York, Los Angeles and dozens of other improvident cities and states would line up outside the Oval Office for their guarantees. Suddenly, the policy of guaranteeing unfunded pension and health care liabilities would involve huge numbers. The States Project, conducted by Harvard’s Institute of Politics, the University of Pennsylvania’s Fels Institute and the American Education Foundation,&nbsp;<a href="http://www.iop.harvard.edu/november-27-2012-harvard%E2%80%99s-institute-politics-upenn%E2%80%99s-fels-institute-government-and-aef-produce-us" target="_blank">reported that</a>&nbsp;“State and local governments are carrying over $7 trillion in debt. Over half of that debt is not reported in the official financial statements produced by state and local governments.”</p> <p>With a&nbsp;single executive order, though, Obama could pull off the biggest ever giveaway for labor unions and energize them to go all‐​out for him in the 2014 election campaigns.</p> <p>Obama could leave whatever cash flow there is in Detroit for bondholders and current city employees to fight over.</p> <p>In 2012, the Detroit Water and Sewerage Department generated revenue of approximately $403&nbsp;million, more than enough to cover the $356 million of interest due on bonds. But debt service and payments to retirees consume more than half of Detroit’s annual budget. There isn’t much financial maneuvering room.</p> <p>If it turns out municipal bondholders take a&nbsp;huge hit, while unions are guaranteed their generous pension and health care benefits, this could send a&nbsp;shockwave through municipal bond markets, shattering the illusion that municipal bonds are secure investments for retirees, widows, orphans or anyone else.</p> <p>The doubling of municipal bond markets since 2005 might come to be seen as a&nbsp;bubble like the housing bubble, something reckless that prudent investors should avoid. The flow of municipal bond revenue could slow down, and for many municipalities it could stop altogether. If after making municipal bond investors absorb a&nbsp;disproportionate share of Detroit’s municipal bond losses, politicians might be reminded that what goes around comes around. Without municipal bond revenue, they would have to make really serious spending cuts, the likes of which they have never seen. Maybe they would wake up sober.</p> </div> Tue, 20 Aug 2013 13:42:00 -0400 Jim Powell https://www.cato.org/publications/commentary/what-are-most-likely-outcomes-state-municipal-financial-crises Jim Powell discusses his Forbes article “How Did Rich Connecticut Morph into One of America’s Worst Performing Economies?” on WTIC’s The John Rowland Show https://www.cato.org/multimedia/media-highlights-radio/jim-powell-discusses-forbes-article-how-did-rich-connecticut-morph Mon, 12 Aug 2013 15:40:00 -0400 Jim Powell https://www.cato.org/multimedia/media-highlights-radio/jim-powell-discusses-forbes-article-how-did-rich-connecticut-morph How Did Rich Connecticut Morph into One of America’s Worst Performing Economies? https://www.cato.org/publications/commentary/how-did-rich-connecticut-morph-one-americas-worst-performing-economies Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Connecticut has so many advantages that it might be hard to understand how it became one of America’s worst‐​performing state economies.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>As we know, Connecticut is located along an important commercial corridor between New York and Boston. It’s well‐​served by railroads and highways. Major airports are accessible. Connecticut has many charming towns, historic sights, stylish shops and nice beaches. CNN determined that of America’s 25 towns with the highest median family incomes, four are in Connecticut — New Canaan (#1), Darien (#2), Westport (#5) and Greenwich (#14). The most expensive American home ever offered for sale is Copper Beech Farm which, with an asking price of $190 million, has 50&nbsp;acres of waterfront property in Greenwich.</p> <p>Although Connecticut lacks a&nbsp;major high tech region, there’s a&nbsp;concentration of executive talent capable of managing large organizations. Many are in financial services.</p> <p></p> </div> , <aside class="aside--right aside pb-lg-0 pt-lg-2"> <div class="pullquote pullquote--default"> <div class="pullquote__content h2"> <p>The most fundamental lesson here is simply that investors, entrepreneurs and other productive people want to go where they’re welcome.</p> </div> </div> </aside> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Despite these attractions, during the past two decades some 300,000 more Connecticut residents have moved out of the state than have moved in. This compares with the current population of about 3.5 million.</p> <p>Why the exodus?</p> <p><strong>Dismal performance</strong></p> <p>Perhaps with the complacency of old money, Connecticut policymakers came to believe they didn’t need to compete for investors and entrepreneurs — the key people who make prosperity happen. Keep in mind that government basically doesn’t have any money other than what it extracts from the private sector via taxation.</p> <p>As a&nbsp;columnist for the&nbsp;<em>Hartford Courant</em>&nbsp;remarked, “businesses here have become vulnerable to appeals from places [like Florida and Texas] that Connecticut leaders once thought they could safely hold in low regard.”</p> <p>When investors and entrepreneurs consider important decisions like where to establish a&nbsp;residence, where to operate a&nbsp;business and, yes, where to die, they compare their options. From a&nbsp;financial point of view, Connecticut turns out not to be a&nbsp;great option. For instance:</p> <ul><li>Connecticut ranks #50 — the worst — in annual economic growth. According to the Department of Commerce’s Bureau of Economic Analysis, Connecticut’s economy contracted for the second year in a&nbsp;row. “Connecticut is the laggard,”&nbsp;<a href="http://articles.courant.com/2013-06-07/business/hc-connecticut-economy-worst-in-nation-20130606_1_gdp-growth-economic-growth-connecticut" target="_blank">reported&nbsp;</a>Connecticut Department of Labor economist Daniel Kennedy.</li> <li>Between 1996 and 2006 –&nbsp;<em>before&nbsp;</em>the financial meltdown and recession — the number of Connecticut small businesses declined by 2.2 percent, while the average experience of all 50 states was a&nbsp;10 percent increase. Only Ohio and West Virginia did worse than Connecticut. Its small businesses account for about half of the state’s private sector jobs.</li> <li>Government spending is out of control. Two years ago, Connecticut Governor Dannell P. Malloy signed a $1.8 billion tax hike, the biggest in the state’s history, that supposedly would generate enough. But it wasn’t enough for the next budget, enacted this year. It was balanced mainly with gimmicks like shifting some $6 billion of Medicaid spending off‐​budget.</li> <li><a href="https://docs.google.com/spreadsheet/ccc?key=0All0h4lh_xOsdFZMaVJ2X0poX1VnZERaUmNHVEFUT3c#gid=0" target="_blank">State Budget Solutions</a>, a&nbsp;think tank monitoring state finances, reported that among the 50 states Connecticut has run up the fourth largest pile of debts per capita — $27,540. This includes unfunded liabilities for government employee pension funds. The total is almost double the per capita debts of financially‐​strapped California. Higher debts imply higher taxes in the future.</li> <li><em><a href="http://online.barrons.com/article/SB50001424053111904881404577603301566976464.html#articleTabs_article%3D1" target="_blank">Barron’s</a></em>&nbsp;considered Connecticut to be in the worst financial shape — with debt and pension liabilities a&nbsp;higher percentage of GDP (17.1) than any other state. The financially strongest state: South Dakota where debt and pension liabilities are only 1&nbsp;percent of GDP.</li> <li>Connecticut has one of the worst business climates in the country. Factors affecting a&nbsp;state’s business climate include the individual income tax, corporate income tax, sales tax, property tax, unemployment insurance tax and security of private property. For example, as the<a href="http://taxfoundation.org/sites/taxfoundation.org/files/docs/2013_Index.pdf" target="_blank">&nbsp;Tax Foundation reported</a>, “Connecticut imposed a&nbsp;temporary 20 percent surtax on top of its flat 7.5 percent corporate income tax, in effect raising its rate to 9&nbsp;percent. This 20 percent surcharge is an increase on a&nbsp;supposedly temporary 10 percent surcharge that has been in place since 2009.”</li> <li>The American Legislative Council, in its annual&nbsp;<a href="http://alec.org/docs/RSPS-6th-Edition" target="_blank"><em>Rich States, Poor States</em>&nbsp;study</a>, ranks states two ways — economic performance and economic outlook. The economic performance ranking is based on a&nbsp;state’s GDP trend, migration trend (in or out) and non‐​farm payroll enrollment trend.&nbsp;The economic outlook ranking is based on 15 factors including the top marginal personal income tax rate, the top marginal corporate income tax rate, property tax burden, estate tax burden, public employees per 100,000 population, state liability system survey and whether a&nbsp;state has a&nbsp;right‐​to‐​work law. Connecticut is ranked #46 for economic performance and #43 for economic outlook.</li> <li>The Connecticut Business &amp;&nbsp;Industry Association reported that “70 percent of executives believe the value they receive for their tax dollars is extremely low considering the amount they&nbsp;pay in taxes.”</li> <li><a href="https://object.cato.org/sites/cato.org/files/pubs/pdf/GRC2012.pdf">The Cato Institute&nbsp;</a>gives Connecticut Governor Dannel P. Malloy an F&nbsp;grade for his economic policies that throttle investors and entrepreneurs. Malloy “creates a&nbsp;more hostile climate for business, but then tries to compensate for the damage with tax incentives.”</li> <li>Connecticut’s probate court system seems to have gained a&nbsp;reputation for loading unnecessary costs on estates and sometimes arbitrarily nullifying wills, a&nbsp;practice that’s hard to distinguish from looting. Yale Law School professor John H. Langbein&nbsp;<a href="http://www.law.yale.edu/faculty/1766.htm" target="_blank">declared that</a>&nbsp;“Connecticut probate is a&nbsp;national scandal.”</li> </ul><p>How did Connecticut end up in this mess?</p> <p><strong>Some perspective: early success, great potential</strong></p> <p>Like other states, Connecticut started out with agriculture, then expanded with trade and boomed with manufacturing — ships, railroads, saddles, sewing machines, carriages, brass fittings, corsets, guns, on and on. Such enterprise displayed a&nbsp;lot of Yankee ingenuity.</p> <p>Fast‐​growing industries attracted thousands and thousands of immigrants as well as native‐​born people looking for jobs. Connecticut’s population grew mightily.</p> <p>During the 1920s, however, Connecticut began to feel competitive pressures as 14 of its 47 textile mills moved to less costly locations in the South.</p> <p>Democrats gained control of Connecticut during the Great Depression, but neither they nor their “progressive” comrades at the federal level were able to banish depression era high unemployment. It persisted throughout FDR’s New Deal, in part because the New Deal tripled taxes, which meant employers had less money for hiring and consumers had less money for spending. Depression era unemployment didn’t come down until the government began conscripting millions of young men for military service during World War II.</p> <p>American factories switched from the production of civilian goods to the production of war materials. Living standards, though, weren’t much different than they had been during the depression, since civilian goods were unavailable, and food consumption was limited by rationing.</p> <p>After the war, many military contracts ended, but the Cold War began almost immediately, and Connecticut’s politically‐​connected Democratic representatives helped win new military contracts for Pratt &amp;&nbsp;Whitney (airplane engines), Hamilton Standard (propellers), Cheney (parachutes), Electric Boat (submarines), Sikorsky (helicopters) and other government contractors.</p> <p>When the civilian economy revived after the war, often it involved technologies that developed in unexpected places that weren’t on Connecticut’s radar. For example, during the 1940s Stanford University’s dean of engineering Frederick Terman encouraged students and graduates to establish new businesses. That was the humble beginning of Silicon Valley.</p> <p><strong>More business burdens, less business hiring</strong></p> <p>During the last century, Connecticut’s state government became bigger, raising taxes and in other ways making it more costly to do business.&nbsp;Connecticut certainly wasn’t the only state to have adopted such policies, but many states avoided them and prospered.</p> <p>Connecticut economic regulations multiplied, further increasing the cost of doing business. Steven P. Lanza, reporting in&nbsp;<em>The Connecticut Economy</em>, published quarterly by the University of Connecticut, found that “excessive regulation plays a&nbsp;role in hamstringing business owners and entrepreneurs who simply don’t have the resources of larger firms to cope with these constraints.”</p> <p>Former U.S. Senator and Democratic presidential candidate George McGovern learned all this the hard way. In 1988, he bought, renovated and operated a&nbsp;150‐​room hotel and conference center in Stratford, Connecticut. The business went bankrupt two years later. McGovern reflected on his experience&nbsp;<a href="http://online.wsj.com/article/SB10001424052970203406404578070543545022704.html" target="_blank"> in the&nbsp;<em>Wall Street Journal</em></a>: “My business associates and I&nbsp;lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I&nbsp;never have doubted the worthiness of these goals, the concept that most often eludes legislators is: ‘Can we make consumers pay the higher prices for increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.’ It is a&nbsp;simple concern that is nonetheless often ignored by legislators.”</p> <p>In addition, state land use restrictions have limited the number of suitable business locations and often made it harder to establish a&nbsp;business. “Land use litigation pervades the dockets of state and federal courts,”&nbsp;<a href="http://www.bu.edu/law/central/jd/organizations/journals/bulr/documents/STERK.pdf" target="_blank">noted</a>&nbsp;Cardozo School of Law professor Stewart E. Sterk. “What is remarkable is that so many [land use] controversies — major and minor — are litigated to final judgment, and often reach appellate courts. Whereas the overwhelming majority of cases filed end with settlement rather than judgment, land use cases tend not to settle. Broad standing rules often permit neighbors, community groups and other governmental entities to challenge any settlement. Zoning law also provides a&nbsp;variety of grounds, both procedural and substantive, on which to attack any settlement.”</p> <p>Significant numbers of low‐​income blacks and Hispanics moved into Connecticut’s major cities. In the name of “urban renewal,” local governments used their power of eminent domain to seize private property, promote the demolition of low‐​income housing and the construction of new housing, but it was a&nbsp;while before anybody noticed that (1) more housing units were being demolished than built, and (2) the housing built was more expensive — not intended for the displaced poor people who were forced to bid against other poor people for a&nbsp;reduced supply of low‐​income housing. That’s why&nbsp;<a href="http://content.knowledgeplex.org/kp2/img/cache/kp/2092.pdf" target="_blank">urban renewal&nbsp;</a>became known as “Negro removal” and made urban problems worse.</p> <p>One of government’s most basic responsibilities is keeping people safe, yet Connecticut’s urban crime rates worsened during the 1960s and 1970s. This increased the cost of doing business in affected areas. At the same time, many customers fled to suburbs for greater personal safety and more affordable living space.</p> <p>Fortunately for Connecticut, things were even worse for its tri‐​state rivals New York and New Jersey. Moreover, Connecticut had an important advantage — no income tax. Connecticut’s less unfavorable business climate for investors and entrepreneurs helped spur a&nbsp;corporate exodus to Connecticut. Among those moving headquarters to the nutmeg state were American Brands, General Electric and Union Carbide.</p> <p>But these moves mainly benefited Connecticut cities closest to New York, like Fairfield, Greenwich and Stamford.</p> <p>Other Connecticut cities declined amidst high taxes, high crime rates and “progressive” policies that made it harder for entrepreneurs to start businesses and hire people. For example:</p> <ul><li>Bridgeport, Connecticut’s largest city, is estimated to have about 146,000 (2012) — fewer than it had in 1930 (146,716).</li> <li>New Haven, Connecticut’s second largest city, is estimated to have about 131,000 people (2012) — fewer than in 1910 (133,000).</li> <li>Hartford, Connecticut’s third largest city, is estimated to have about 125,000 people (2012) — fewer than in 1920 (138,036).</li> </ul><p>Waterbury, Connecticut’s fifth largest city (Stamford is #4), appears to be the exception, an old Connecticut manufacturing center whose population is actually near a&nbsp;peak — approximately 110,000&nbsp;in 2012 vs the peak of 110,366 recorded in 2010. This is mainly because of government and hospital jobs. But few people seem to give Waterbury high marks for the quality of life there.</p> <p>For instance, in 1992&nbsp;<a href="http://www.nytimes.com/1992/12/06/nyregion/wounded-waterbury-no-place-to-go-but-up.html?pagewanted=all&amp;src=pm" target="_blank"><em>Money Magazine</em> surveyed&nbsp;</a>300 U.S. metropolitan areas and considered Waterbury to be the worst.</p> <p>Waterbury made the&nbsp;<a href="http://www.wisdomportal.com/Books/BestPlacesToLive.html" target="_blank"><em>Places Rated Almanac</em>&nbsp;list</a>&nbsp;of the “10 Worst Places to Live in America.”</p> <p>In April 2008,&nbsp;<a href="http://waterburywatchdogs.wordpress.com/2010/05/01/forbes-magazine-ranks-waterbury-as-the-11th-worst-city-in-the-country-for-job-growth/" target="_blank"><em>Forbes</em>&nbsp;considered</a>&nbsp;Waterbury one of the “Worst Places for Businesses and Careers in America.”</p> <p>In 2013,&nbsp;<a href="http://www.wfsb.com/story/21287173/waterbury-named-one-of-saddest-in-country" target="_blank"><em>Atlantic Magazine</em>&nbsp;analyzed</a>&nbsp;10 million tweets by place of origin and concluded that Waterbury was one of the saddest American cities.</p> <p>Many politicians like to blame Connecticut’s decline on things beyond their control like factory closings, but&nbsp;there’s nothing new about losing employers. Change has been the natural order of things since the beginning of time. Employers go away because better technologies come along, old businesses weren’t managed as effectively as new competitors, businesses have been acquired or merged with operations located elsewhere, labor unions priced themselves out of world markets, consumer preferences changed, other jurisdictions offered better business climates — on and on.</p> <p>What Connecticut politicians failed to do was focus on making their jurisdictions as attractive as possible to investors and entrepreneurs, so there would be a&nbsp;continuing influx of new jobs. Among other things, this means reducing the cost of doing business for everyone, large and small — prospective newcomers as well as investors and entrepreneurs already in the state.</p> <p>Instead of doing that, Connecticut politicians have gone on spending sprees in an effort to enhance their re‐​election prospects. The spending sprees necessitated higher taxes that increased the cost of doing business and helped drive away potential investors and entrepreneurs.</p> <p>Of course, politicians can be counted on to say that they must spend ever larger amounts of money because of all the poor people who need help. But more than anything else, poor people need a&nbsp;real private sector job — a&nbsp;means of sustaining their financial independence and helping to produce goods or services other people are willing to pay for. The more costly it is to do business, the fewer jobs there will be, and the more people will stay poor.</p> <p>Often government is costly because of corruption. Among the Connecticut officials who became felons: Bridgeport Mayor Joseph P. Ganim (bribery), Danbury Mayor James E. Dyer (tax evasion), Hartford Mayor Eddie Perez (bribery), Waterbury Mayor Philip Giordano (sex offenses) and Connecticut State Senator Ernie Newton (fraud).</p> <p>“For the record,” the&nbsp;<em>New York Times</em>&nbsp;declared, “not everyone in Connecticut is a&nbsp;crook. But this is no longer obvious.”</p> <p>Politicians have made Connecticut’s state and local governments more costly by promoting unionized construction companies for public projects. Governor Malloy has backed “project labor agreements” to help do that. The Hartford Board of Education has required that bidders agree to “perform all project work with union labor.” A&nbsp;2007 study by economists Paul Bachman and Jonathan Haughton showed that project labor agreements increased public school construction costs between 9&nbsp;percent and 15 percent. Remember that the next time you pay a&nbsp;property tax bill.</p> <p>One of the most important ways Connecticut politicians have accelerated spending and taxes was to expand the number of unionized government employees. According to a&nbsp;Yankee Institute study, between 1970 and 2000 Connecticut’s state payrolls grew 6&nbsp;times faster than the overall population. Connecticut’s municipal payrolls were reported to have grown 4&nbsp;times faster.</p> <p><strong>Throwing away an important competitive advantage</strong></p> <p>Connecticut’s downhill slide seems to have speeded up after 1990. That year, former Connecticut Senator Lowell P. Weicker Jr. campaigned for the governorship by vowing to resolve the state’s financial problems without introducing an income tax. After he was elected, he revealed his true colors and signed an income tax into law. Perhaps some Ivy League arrogance (Weicker went to Yale) impaired his ability to understand how incentives like lower taxes stimulate enterprising spirits.</p> <p>The income tax failed to achieve the wonders Weicker claimed. By siphoning more money out of the private sector, the Connecticut income tax reduced the amount of money available for private sector hiring and reduced the amount of money available for consumer spending. The Federal Deposit Insurance Corporation reported, “no other state in the country has had such stagnation of employment.”</p> <p>Ironically, while Connecticut’s income tax generated more revenue than the state had before, it undermined efforts to control spending. The last Connecticut annual budget before the income tax was about $7.5 billion, and state spending since then has nearly tripled — not counting all of the state’s spending on Medicaid. Connecticut’s runaway spending spree has meant more deficits and debt.</p> <p>Income tax revenue hasn’t resulted in property tax relief. Connecticut property taxes went up.</p> <p><a href="http://taxfoundation.org/article/state-gasoline-tax-rates-2009-2013" target="_blank">Nor has there been gasoline tax relief</a>. Connecticut has the highest gasoline taxes in New England (45 cents per gallon), compared with Rhode Island’s 33 cents per gallon, Maine’s 31.5 cents, Vermont’s 26.7 cents, Massachusetts’ 23.5 cents and New Hampshire’s 19.6 cents.</p> <p>Introducing an income tax made Weicker unpopular, and he served only one term. His successor, Republican John G. Rowland, vowed he would get rid of the income tax, but somehow he never got around to doing that. He campaigned for a&nbsp;second term, promising to do what he had promised the first time around. His second term came and went, and in December 2003, during Roland’s third term, he admitted receiving improper favors from a&nbsp;lobbyist, and he subsequently served time in the slammer.</p> <p>Meanwhile, Connecticut income taxes continue to go up, and Connecticut taxes generally are multiplying. According to the Yankee Institute, 2011 was a&nbsp;banner year when Democrats — who now control both the governor’s mansion and the legislature —<a href="http://www.yankeeinstitute.org/2011/06/69-higher-taxes-for-ct/" target="_blank">&nbsp;pushed through 77 tax hikes</a>. For instance:</p> <ul><li>The personal income tax rate went up for individuals making as little as $50,000</li> <li>The highest marginal income tax rate went up from 6.5 percent to 6.7 percent.</li> <li>The corporate tax rate went from 8.25 percent to 9&nbsp;percent.</li> <li>Higher taxes were retroactive to January 1, 2011.</li> <li>Property tax credits were reduced to $300 (and to nothing for individuals making over $100,000).</li> <li>Estate taxes started kicking in at $2 million instead of $3.5 million.</li> <li>The real estate conveyance tax went up from 0.5 percent to 0.75 percent on the first $800,000 of the sale price of one’s home.</li> <li>Luxury goods tax — 7&nbsp;percent on clothing costing over $1,000, jewelry over $5,000, motor vehicles over $50,000 and boats over $100,000.</li> <li>There’s a&nbsp;new tax of .25 of one cent per kilowatt hour of electricity from the most reliable sources (like nuclear power, natural gas and coal) — not applicable to subsidized solar or wind power.</li> <li>Sales taxes went up to 6.35 percent.</li> <li>Sales tax exemptions were eliminated for non‐​prescription medicines, yoga instruction, airport valet parking, stop‐​smoking products and shoes costing less than $50.</li> <li>The&nbsp;Ama​zon​.com&nbsp;tax — sellers without a&nbsp;physical presence in Connecticut must collect sales taxes on orders originating in Connecticut.</li> <li>Hotel taxes went from 12 percent to 15 percent.</li> <li>The rent‐​a‐​car tax went from 6.35 percent to 9.35 percent.</li> <li>The hospital tax — 4.6 percent quarterly on net hospital revenue from patients.</li> <li>Nursing home resident user fee — up from 5.5 percent to 6&nbsp;percent.</li> <li>Cremation taxes, up from $100 to $150.</li> </ul><p><strong>The Exodus Now</strong></p> <p>Connecticut’s tax base is eroding as more and more people conclude there’s a&nbsp;better future someplace else.</p> <p>For decades, Hartford has been known as a&nbsp;major center of the U.S. insurance business and a&nbsp;bulwark of Connecticut’s economy. But many insurance jobs have moved out of Hartford to the suburbs, other insurance jobs have left Connecticut, and some unexpected rivals have emerged as industry leaders.</p> <p>For example,&nbsp;<em>Business Wire</em>&nbsp;called Des Moines, Iowa “the number one spot for U.S. insurance companies.” Among the insurance companies headquartered in Des Moines: Aviva, EMC Insurance Companies, Nationwide Mutual Insurance Company, Principal Financial Group and Wellmark Blue Cross Blue Shield. Other insurance companies with a&nbsp;presence in the area include Centurion, Guardian Life, Hartford Life Insurance, MetLife, New York Life, Prudential, Sun Life and TIAA-CREF. In 2010,&nbsp;<em>Forbes</em>&nbsp;rated Des Moines as “Best Place for Business.”</p> <p>A terrible tragedy, the December 2012 massacre of 20 children and 6&nbsp;adults in Sandy Hook, Connecticut, led to the adoption of tougher state gun control laws, even though it isn’t clear how those laws would prevent deranged people from killing.</p> <p>What the laws have done is spur the exodus of companies that account for about one‐​seventh of U.S. firearms production — a&nbsp;Connecticut industry going back more than a&nbsp;century. The National Shooting Sports Foundation estimated that Connecticut gun manufacturers provide some 2,900 jobs and generate $1.7 billion within the state. Perhaps the best‐​known Connecticut gun producer is Colt Manufacturing whose armory, capped with a&nbsp;distinctive blue onion dome, has been a&nbsp;landmark on Hartford’s southern skyline since 1867.</p> <p>The first gun manufacturer to announce plans for moving out was PTR Industries, a&nbsp;Bristol‐​based manufacturer of military‐​style rifles. It’s going to South Carolina. Stag Arms, in New Britain, Connecticut, is also planning to move out. Sturm Ruger &amp;&nbsp;Company is inclined to retain their headquarters in Connecticut, while expanding production elsewhere. It seems likely other gun manufacturers will leave the state.</p> <p>The biggest exodus — and the most financially calamitous consequence of Connecticut’s personal income and corporate taxes — could involve hedge fund managers. There are reported to be some 200 hedge funds in Connecticut.</p> <p>For example, Edward Lampert, Chairman of Sears Holding Corporation and the CEO of ESO Investments (a $10 billion hedge fund), used to do business in Greenwich. But after Connecticut’s most recent tax hike, he decided that he had enough. Lampert, believed to be worth about $3 billion, moved to Miami.</p> <p>Thalius Hechsher, who heads global development for Apex Fund, also moved his business to Florida. He said, “There’s no need to drag people down here. It’s a&nbsp;zero‐​income‐​tax jurisdiction.”</p> <p>Since Connecticut no longer has a&nbsp;big tax advantage over New York, and Manhattan real estate prices are much lower than they were before the financial meltdown, many investment managers find it attractive to rent a&nbsp;high‐​end office in Manhattan. It still has the greatest concentration of hedge fund managers.</p> <p>For a&nbsp;while back in 2010, there was talk that New York might enact a&nbsp;hedge fund tax. Jodi Rell, Connecticut’s governor at the time, was quick to host a&nbsp;Darien reception to show investment managers that they were welcome in Connecticut.</p> <p>But her successor Malloy threatened a&nbsp;hedge fund tax. He was reportedly shocked when UBS began transferring some of its people back to Manhattan, and other investment managers started to talk about relocating. Malloy was a&nbsp;bit slow to recognize that the bloom was off the rose.</p> <p>In the dimness of his perception about what it takes to achieve real economic growth — namely, making the business climate attractive for all comers, including the multitude of small&nbsp;businesses without political connections — Malloy has doled out oodles of corporate welfare. Thusfar, his sweetest deal has been a $25 million, “forgivable” 10‐​year loan at 1&nbsp;percent interest for Bridgewater Associates, reported to be the largest hedge fund, PLUS — Bridgewater is to get $90 million for job training, alternative energy and assorted tax credits.&nbsp;The idea is to help Bridgewater move from one wealthy town (Westport) to new digs in another wealthy town (Stamford).</p> <p>It will be interesting to see how this deal looks in a&nbsp;few years.</p> <p>Meanwhile, Malloy is digging himself deeper into the business of picking winners, the business where President Obama embarrassed himself by backing a&nbsp;succession of green energy losers that finagled government‐​subsidized loans before going bankrupt.</p> <p>Malloy, for instance, got the idea that Maine‐​based Jackson Labs might help launch a&nbsp;Connecticut high tech boom. Listen to this: the state, already loaded with excessive debt, will borrow $291 million more, pay the $120 million of interest costs, then pick up all the construction costs to establish a&nbsp;new lab facility in Farmington and finally subsidize the lab’s operations for the first 10&nbsp;years. Only after that is Jackson Labs projected to provide funding. Jackson Labs itself is dependent on public funding, so the whole deal might appear to be a&nbsp;house of cards. Yankee Institute researcher Zachary Janowski reported that Connecticut funding amounts to a $42,327 state subsidy per job per year.</p> <p><strong>Don’t die in Connecticut!</strong></p> <p>There’s another factor that leads people to think seriously about leaving Connecticut: its probate court system.</p> <p>Yale Law School professor John H. Langbein said that “When citizens of our state ask me about Connecticut probate, I&nbsp;give this simple advice: Try not to die in Connecticut. If you are a&nbsp;person of means, you should establish your domicile in some place such as Florida or Maine or Arizona that has a&nbsp;responsible probate system.”&nbsp;<a href="http://www.law.yale.edu/faculty/1766.htm" target="_blank">&nbsp;See Langbein’s testimony</a>&nbsp;before the Connecticut Legislature Committee on Program Review &amp;&nbsp;Investigation, October 7, 2005.</p> <p>Connecticut probate corruption has been going on for a&nbsp;long time, because judges and lawyers aggressively resist attempted reforms. More than 60&nbsp;years ago, New York University law professor Thomas Atkinson reported that “Connecticut is just about at the bottom of the list so far as its probate court system is concerned.”</p> <p>Today, Connecticut probate judges work part‐​time in one town and often practice law in other towns which can mean obvious conflicts‐​of‐​interest. Probate judge A&nbsp;is reluctant to reject motions enriching lawyer B&nbsp;who comes before him, because lawyer B&nbsp;serves as probate judge B&nbsp;in another town where probate judge A&nbsp;works as lawyer A&nbsp;and makes motions to enrich himself.</p> <p>To be sure, there is a&nbsp;Connecticut statute — <a href="http://www.cga.ct.gov/current/pub/chap_801.htm#sec_45a-25" target="_blank">Chapter 801, Section 45a‐​25</a> — that says a&nbsp;probate judge cannot appear as an attorney in another probate judge’s court when a&nbsp;matter is “contested.” A&nbsp;matter is “contested” if a&nbsp;party objects. In that situation, a&nbsp;Connecticut probate judge might be able to get around the law by having his law firm partner or associate appear in a&nbsp;another probate judge’s court.</p> <p>If there’s no objection, because a&nbsp;party or his/​her attorney isn’t present — perhaps because there wasn’t proper notice about a&nbsp;hearing — then the law seems to indicate that a&nbsp;probate judge could appear as an attorney in another probate judge’s court.</p> <p>In 2011, there were some changes in Connecticut law applicable to probate courts, and Judge Paul J. Knierim, Connecticut Probate Court Administrator, claimed that those reforms “addressed all of Langbein’s core concerns.”</p> <p>Langbein emphatically disagreed: “The worst feature of the probate system, that many of the judges are part‐​timers who have active law practices, remains. No set of be‐​good rules can begin to eradicate structural conflicts‐​of‐​interest this system invites. If you are in law practice, you are looking to build your law practice. That is profoundly inconsistent with the judicial function, where your sole purpose must be to make the right decision under law.”</p> <p>Connecticut’s probate system has enabled judges to collect fees for essentially looting estates. According to Langbein, “Filing fees and subsequent charges are far higher than elsewhere. Probate courts have extended their fees to non‐​probate transfers such as life insurance and joint tenancy, for which, by definition, no probate services are needed.”</p> <p>That’s not all. Connecticut has had something called the Duplicate Trial Rule that, as Langbein pointed out, “allows a&nbsp;litigant who is determined to have a&nbsp;contested probate matter heard by a&nbsp;professional judge to do so, but only after making that person pay for two full trials.”</p> <p>Langbein insisted that “It’s no answer to say [as Knierim did] that the court fees and the judges’ compensation are set by law. The problem is that there are still too many probate courts, too many [part‐​time] judges and too much needless judicial supervision of trusts and estates, driving up costs.”</p> <p>Langbein warned about the arbitrary power of probate judges to dictate “who owns the property of a&nbsp;decedent, and they can decide whether to strip a&nbsp;citizen of his or her liberty by declaring the citizen incompetent. It is far from clear that Connecticut probate could withstand constitutional scrutiny under the Due Process clause of the U.S. Constitution. When liberty and property are at stake, the state has an obligation to operate under procedures commensurate with the seriousness of the affected interests.”</p> <p>Consider this case exposed by&nbsp;<em>Hartford Courant</em>&nbsp;investigative reporter Rick Green. The case involved Josephine Smoron, the last of a&nbsp;family of Polish farmers whose 80‐​acre property is in Southington. She willed it to Sam Manzo, her long‐​time caretaker. The property was estimated to be worth about $1.5 million.</p> <p>According to the&nbsp;<em>Courant</em>, when Smoron’s health worsened, probate judge Brian Meccariello appointed local lawyer John Nugent as conservator supposedly to protect her interests. Nugent, who never met Smoron (“I don’t speak dementia,” he was quoted as saying), reportedly made a&nbsp;deal to help a&nbsp;Southington developer gain control of the property. The developer was identified by the&nbsp;<em>Courant</em>&nbsp;as Carl Verderame. In May 2009, Meccariello arbitrarily changed Smoron’s will, disinheriting Manzo and setting up a&nbsp;legal maneuver that would transfer the property to Verderame. Manzo persisted with efforts to uphold Smoron’s original will, and the case went to Superior Court in Hartford. <em>Rick Green</em>&nbsp;described the judge as struggling to resolve a “circular firing squad of competing interests.” Manzo finally prevailed this year, but the court nearly pulled off a&nbsp;robbery.</p> <p>These courts have been reformed? “As for the scandals involving abuse of the protective jurisdiction for the elderly,” Yale Law’s Langbein remarked, “I am not aware of any major reforms having been taken to prevent such cases in the future. The power to strip an elderly person of autonomy over his or her property is essential — we cannot leave such persons to harm themselves or be victimized — but that power is inherently dangerous and should not be in the hands of guys who are on the make.”</p> <p>Despite the 2011 Connecticut probate reforms, there continue to be outrageous cases of guardianship abuse. Connecticut Probate Advocates&nbsp;has gathered cases from multiple sources.</p> <p>What should be done about Connecticut’s probate scandals? Langbein believes “the reform that is needed is to get rid of the probate court system, fold the jurisdiction into the ordinary courts as in other states, and have it served by real judges chosen more on merit.” Unfortunately, such genuine reform isn’t likely to happen, because as Langbein notes, “The probate gang is a&nbsp;feared interest group in the state legislature, and they largely get what they want.”</p> <p>Probate issues, though little talked about outside the world of trusts and estates, could spur an acceleration of the exodus from Connecticut as affluent baby boomers retire where they’re less likely to be looted.</p> <p><a href="http://www.topretirements.com/blog/great-towns/worst-states-to-retire-2012-northeast-and-midwest-come-up-losers.html/" target="_blank"><em>TopRe​tire​ments​.com</em></a> rated states according to their desirability for retirement. They ranked Connecticut dead last.</p> <p>The most fundamental lesson here is simply that investors, entrepreneurs and other productive people want to go where they’re welcome. They start to think about leaving when they feel exploited.</p> <p>If enough of these people leave, how can a&nbsp;declining economy possibly turn around?</p> </div> Thu, 01 Aug 2013 09:51:00 -0400 Jim Powell https://www.cato.org/publications/commentary/how-did-rich-connecticut-morph-one-americas-worst-performing-economies Lois Lerner Should Be Free to Plead the Fifth — One Question at a Time https://www.cato.org/publications/commentary/lois-lerner-should-be-free-plead-fifth-one-question-time Jim Powell <div class="lead mb-3 spacer--nomargin--last-child text-default"> <p>Many people were shocked to see Congressman Darrell Issa, Chairman of the House Oversight and Government Reform Committee, excuse IRS official Lois Lerner after she made a&nbsp;statement asserting her innocence, then pleaded the Fifth Amendment — refusing to answer questions that might incriminate her. He let the witness go just like that.</p> </div> , <div class="mb-3 spacer--nomargin--last-child text-default"> <p>Some members of the committee believed that by making a&nbsp;statement with a&nbsp;number of claims, Lerner waived her right to plead the Fifth.</p> <p>There’s a&nbsp;hidden assumption here: if she still has the right to plead the Fifth, she could avoid all questions with a&nbsp;single pleading and be done with the hearing.</p> <p>Well, pleading the Fifth Amendment is an inalienable right not to incriminate oneself, an important constitutional protection whose roots go back to 17th&nbsp;century England where, as many other places, the prevailing practice in criminal justice proceedings had been to extract forced confessions from defendants. Back then, the principal defendants were religious dissenters.</p> <p>But this doesn’t mean a&nbsp;witness can avoid all questions with a&nbsp;single pleading.</p> <p>A witness must plead the Fifth one question at a&nbsp;time.</p> <p>Members of a&nbsp;congressional committee may ask a&nbsp;witness as many questions as they wish, and a&nbsp;witness may answer some, all or none — but the witness must respond to the questions individually.</p> <p>This is how major congressional hearings have been conducted in the past.</p> <p>Witnesses who plead the Fifth many times might defer or avoid legal perils, but they’re likely to undermine their credibility.</p> <p>Perhaps the most spectacular congressional hearings, in terms of Fifth Amendment pleadings, involved Senate investigations about links between organized crime and compulsory unionism. In January 1957, the Democratic Senate established the United States Select Committee on Improper Activities in Labor and Management. The Chairman was Democratic Senator John L. McClellan, and this became known as the McClellan Committee. Democrat Robert F. Kennedy served as assistant counsel and a&nbsp;principal strategist. The committee operated for three years, until it was dissolved in March 1960.</p> <p>Altogether, there were a&nbsp;reported 253 active investigations, some 8,000 subpoenas for witnesses and documents, and 1,526 witnesses appeared before the committee. The proceedings involved 270&nbsp;days of hearings and an estimated 150,000 pages of transcripts.</p> <p>Of particular interest were the 343 witnesses who refused to answer questions, citing their Fifth Amendment right not to incriminate themselves.</p> <p>For example, Frank Rosenthal, who managed Las Vegas casinos for the Chicago Mob, pleaded the Fifth Amendment 37 times.</p> <p>Mafioso and labor union racketeer Johnny Dio reportedly figured in the blinding of newspaper columnist Victor Reisel — sulfuric acid was thrown in his face on a&nbsp;New York City street. During a&nbsp;two‐​hour appearance before the McClellan Committee, Dio pleaded the Fifth Amendment 140 times.</p> <p>In 1957, when Dave Beck was the Teamster Union boss, he was summoned before the McClellan Committee and pleaded the Fifth Amendment 117 times. The&nbsp;<em>New York Times</em>&nbsp;reported that “the hearings cost Mr. Beck his teamster leadership and his entree to Presidents and prime ministers.”</p> <p>One of Beck’s associates, Norman Gessert, pleaded the Fifth Amendment 71 times.</p> <p>After Beck was convicted on bribery charges, tax evasion and other offenses, he resigned as Teamsters president, and Jimmy Hoffa took over the union.</p> <p>He, too, had a&nbsp;corrupt and violent past — and he was indicted for offering an $18,000 bribe to a&nbsp;staff member of the McClellan Committee, in an effort to find out what it had on him. In Tennessee, where a&nbsp;special grand jury was investigating whether Hoffa had engaged in jury tampering, he pleaded the Fifth Amendment 54 times.</p> <p>In 1975, Salvatore Briguglio, a&nbsp;suspect in the mysterious disappearance of Hoffa, pleaded the Fifth Amendment when questioned by a&nbsp;federal grand jury. “I don’t really feel like getting into what I’m doing here,” he was quoted as saying. “What is this, a&nbsp;quiz show?”</p> </div> Thu, 23 May 2013 14:58:00 -0400 Jim Powell https://www.cato.org/publications/commentary/lois-lerner-should-be-free-plead-fifth-one-question-time