Policy Institutes

A Governor's Warped Priorities

Cato Op-Eds - Mon, 01/13/2014 - 16:40

Jason Bedrick

The governor of New Hampshire just submitted an amicus brief in the lawsuit against the “Live Free or Die” state’s scholarship tax credit program. Last year, Governor Maggie Hassan unsuccessfully sought its repeal. The brief offers nothing new in the way of legal arguments. As with the ACLU and, unfortunately, the trial court judge, the governor’s brief tries to imagine a constitutional difference between tax credits and tax deductions and absurdly assumes that money that a private corporation donated to a private nonprofit that financially assists private citizens sending their children to private schools is somehow “public” money because the state could have collected it in taxes had the legislature so decided. This claim contradicts both logic and the U.S. Supreme Court’s holding in ACSTO v. Winn:

Like contributions that lead to charitable tax deductions, contributions yielding [scholarship] tax credits are not owed to the State and, in fact, pass directly from taxpayers to private organizations. Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the … State Treasury.

The Cato Institute submitted an amicus brief defending the constitutionality of the program back in November.

What’s noteworthy here is not the legal reasoning, but the governor’s chutzpah. First, as the Union Leader noted, “Hassan is pushing state-funded, need-based scholarships for college students while trying to eliminate need-based scholarships for students in grades K-12.” The governor’s amicus brief does not explain why direct public expenditures that students can use at a Catholic college are perfectly constitutional but a low-income student using a tax-credit scholarships at a religious elementary or secondary school would, as her amicus brief melodramatically puts it, “jeopardize both the hallowed underpinnings of religious tolerance and freedom, and the prohibition against entanglement made sacred by [the] New Hampshire Constitution.” 

Second, Hassan is a strong proponent of “research and development” tax credits that pick winners and losers among certain types of businesses and business activities, thereby distorting the market. Moreover, by the governor’s faulty logic, these tax credits constitute direct subsidies of public funds to profit-seeking entities. R&D tax credits clearly reduce state revenue to fund activities that businesses are generally doing anyway for their own financial self-interest.  

By contrast, scholarship tax credits expand the market for private education without distorting it. Parents pick winners and losers among schools rather than the government. The corporations who receive the 85 percent tax credits do not benefit financially – indeed, they’d be better off financially had they not donated at all. Moreover, the Josiah Bartlett Center projected that, if fully utilized, the scholarship tax credits would save New Hampshire taxpayers millions of dollars in the long run by reducing state expenditures by more than they would reduce state tax revenue.

In short, Governor Hassan supports corporate welfare but opposes tax credits that assist low-income families seeking the best education for their children.

Categories: Policy Institutes

Dennis Rodman May Be Crazy, But He Is Not Entirely Wrong

Cato Op-Eds - Mon, 01/13/2014 - 16:08

Doug Bandow

That Dennis Rodman is unconventional, even unbalanced, was evident when he played professional basketball.  His athletic skills won him a lucrative contract, but his behavior suggested no interest in diplomatic protocol. 

He has been much criticized for visiting the Democratic People’s Republic of Korea, a brutal totalitarian dictatorship.  There are no political freedoms or civil liberties. 

Open Doors just released its latest World Watch List and the DPRK again is rated the globe’s worst religious persecutor.  The government tolerates a little more private economic activity, but that free space remains painfully small.

As I wrote in the Huffington Post:

Nevertheless, cultural and sports exchanges should be encouraged.  Americans gain a small window into the Hermit Kingdom, as well as an equally restricted opportunity to share unscripted moments with individual North Koreans.  When I visited years ago I was usually accompanied by a driver, interpreter, and handler.  But there were moments when I was alone with one or another.  And such opportunities are more frequent with larger groups which involve more local officials.

Private engagement of this kind may help influence North Koreans who might play a leadership role in the future.  The family dynasty will not last forever and may implode sooner rather than later.  It would be better for the U.S. if more North Koreans see Americans and realize that they do not match the demons of regime propaganda.

In fact, the U.S. government also would benefit from engagement.  Washington should offer to establish consular relations, creating a window into the “Hermit Kingdom” and a presence that could intercede when Americans are arrested, as is becoming more common. 

Thus, Rodman’s trips are not objectionable in the abstract.  Let his team of washed up NBA players journey to Pyongyang.  And then let the North send its team to America.

What Rodman got wrong was so shamelessly sucking up to the “young general.”  Calling Kim his friend for life, singing happy birthday to him, and seemingly endorsing the dictator and dictatorial system were grotesque. 

Rodman need not publicly denounce Kim.  But he could go about his business, quietly polite to North Korean officials and restrained when responding to American journalists.  He could simply say he went to the DPRK for sports, not politics, and then shut up—though, admittedly, that would be completely out of character for him.

The basketball great even glimpsed a small truth about l’affaire de Kenneth Bae.  The Christian missionary obviously is a man of courage and conviction.  And the government’s relentless persecution of religious believers is a human rights outrage.  There was nothing wrong with “what Kenneth Bae did,” as Rodman suggested, that justifies the former’s imprisonment.

However, Bae knew the risks he was taking.  He chose to visit the North and, apparently, violate North Korean law by engaging in evangelism.  He knew arrest and imprisonment would result if he was caught.  Unlike the hapless 85-year-old American tourist who found himself detained and accused of war crimes more than six decades ago, Bae intentionally though bravely put himself at risk. 

Thus, Rodman’s response when pressed on the issue, “that’s not my job,” was callous, not outrageous.  Still, basic decency should have caused the player to make an effort on the missionary’s behalf. 

An indirect approach likely would have been most effective.  Rodman could have cited his obvious commitment, despite significant criticism at home, to draw the U.S. and North closer together, but explained that Bae’s continued imprisonment impeded that effort.  He then could have advocated Bae’s release as a good will gesture. 

Rodman is a convenient lightening rod.  But he isn’t completely wrong. 

North Korea is a great human tragedy.  And we should hope that the next informal ambassador to the DPRK is someone less prone to inane outbursts.  Nevertheless, Dennis Rodman is (a little) better than nothing. 

Categories: Policy Institutes

Nothing New Under the Sun, Diplomacy Edition

Cato Op-Eds - Mon, 01/13/2014 - 16:03

Justin Logan

A second-term American president begins a diplomatic opening with a long-time adversary. Neoconservatives, citing the adversary’s interpretation of the agreement, suggest that diplomacy harms US interests and tips the balance of power, perhaps irreversibly, in favor of the other party. They cultivate a sense of growing threat and a weakening America. The president responds by suggesting that those opposed to diplomacy seem to believe war is inevitable, and that they fail to appreciate that diplomacy provides an opportunity to avoid such a war, benefiting US interests. His opponents counter by accusing him of appeasement and a lack of will, calling him a “useful idiot for [enemy] propaganda.”

It’s 1988, and Ronald Reagan has just negotiated the INF treaty.

The parallel, of course, is to the current garment-rending over the interim deal negotiated between the permanent 5 members of the UN Security Council plus Germany (P5+1) and Iran. There is absolutely no plausible interpretation of this deal that puts Iran with or closer to a nuclear weapon at the end of the six month period covered by the deal. At worst, it either puts 4-6 weeks onto the breakout time frame, or else Iran cheats and that cheating is detected, given the increased inspection schedules in the deal. As the New York Times’ account notes:

The interim agreement is, in effect, an elaborate pause button that provides a basis for pursuing a larger accord. It adds at least several weeks to the time Iran would need to acquire enough enriched uranium for a bomb if it decided to pursue a military option, but it can be reversed if either side changes its mind.

Under the interim deal, Iran agreed to stop enriching uranium beyond 5 percent, a level that is sufficient for energy production but not for a bomb. The country’s stockpile of uranium enriched to 20 percent, a step toward weapons-grade fuel, will be diluted or converted to oxide so that it cannot be readily prepared for military purposes.

Iran also agreed not to install any new centrifuges, start up any that were not already operating, or build new enrichment facilities. The agreement does not, however, require Iran to stop enriching uranium to a low level of 3.5 percent, or to dismantle any existing centrifuges.

Increasing Iran’s more highly enriched stockpile of uranium is a necessary condition for their acquisition of a nuclear bomb. This deal either will reduce that stockpile, or the deal is off. Those are the possible outcomes.*

Objections to this interim agreement are really hard to understand on the merits. Supporters of the current Menendez-Kirk bill, which would preemptively hang more sanctions over the Iranians’ heads, insist they support diplomacy, but given that the Iranians have said repeatedly they’ll walk if the bill passes—and given that if they do walk, there are going to be a lot more calls for military strikes—that’s tough to believe. Only two Senate Republicans have yet to sign onto the bill–Sen. Jeff Flake of Arizona and Sen. Rand Paul of Kentucky–both of whom had supported previous sanctions legislation but are exhibiting the conservative values of caution and prudence while diplomacy (and diminution of Iran’s stockpile of 20% enriched uranium) ensues.

Then again, it is also hard to understand on the merits the neoconservative objections to the INF treaty (and to diplomacy with the Soviet Union altogether), and that turned out okay. Here’s hoping cooler heads prevail. Again.

* Some observers have worried about a nuclear facility whose location we don’t know at present. This is indeed a concern, although it is the same concern with or without the nuclear deal.

Categories: Policy Institutes

Downsize the Department of Health and Human Services

Cato Op-Eds - Mon, 01/13/2014 - 15:00

Caleb O. Brown

The Department of Health and Human Service (HHS) spends more than $908 billion each year (nearly a third of the federal budget) in various redistribution programs, the most important ones being Medicaid and Medicare.

Medicaid helps low-income citizens getting healthcare. It matches state spending, encouraging them to spend more than they otherwise would – their spending increased from $ 118 billion in 2000 to $ 275 billion in 2010, and is projected to double in the next decade. Ten to twenty percent of Medicaid funds ($ 180 billion) are wasted in various frauds.

Medicare, which helps seniors over 65 getting healthcare, is the third largest expenditure for the federal government. It is estimated that its unfunded liabilities could reach $30 trillion (in other words, $30,000 billion) in the next 75 years.

In order to stop hemorrhaging so much money, serious reforms need to be enacted. For Medicare, freedom of choice in coverage should be given back to citizens, along with private competition and personal savings. And for Medicaid, states should ultimately be the only ones spending money of the program, keeping them from overspending. In the end, this would save hundreds on billions of dollars each year. To that end we’ve created a short video which makes these and other points, which you can watch below:

Downsize the Department of Health and Human Services
Categories: Policy Institutes

Krugtron the Invincible or the Undercover Economist?

Cato Op-Eds - Mon, 01/13/2014 - 14:19

Dalibor Rohac

If one questions the old-school Keynesian orthodoxy, one risks being accused by Paul Krugman of being complicit in an “anti-scientific revolution” in macroeconomics:

[w]e had a scientific revolution in economics, one that dramatically increased our comprehension of the world and also gave us crucial practical guidance about what to do in the face of depressions. The broad outlines of the theory devised during that revolution have held up extremely well in the face of experience, while those rejecting the theory because it doesn’t correspond to their notion of common sense have been wrong every step of the way.

Yet a large part of both the political establishment and the economics establishment rejects the whole thing out of hand, because they don’t like the conclusions.

Galileo wept.

While there is no question of the importance of Keynesian models in 20th-century economic thinking, the current pluralism of modeling and empirical strategies in macroeconomics is a fact of life. The existence of divergent views on macroeconomics should not be surprising, given by the difficulty of doing clean empirical tests. Krugman does his discipline a disservice by elevating one narrow subset of models to the status of a well-established scientific truth and presenting the views of a large part of what he calls “the economics establishment” – i.e. of numerous other academics – as somehow obviously false and irrelevant.

So when it comes to economic journalism, one can – and should – do better than Krugman. To see a living example, come next Thursday to Cato and listen to Tim Harford (or watch live here if you can’t make it). Harford may disagree with libertarians on many issues but, unlike Krugman, he has always been the epitomy of civility. What is more, his writings demonstrate that one can communicate complicated ideas to wide audiences without falling into tired ideological clichés and self-righteousness.

Categories: Policy Institutes

Government Will Lose Recess Appointments Case

Cato Op-Eds - Mon, 01/13/2014 - 13:48

Ilya Shapiro

This morning’s oral argument couldn’t have gone any better for those challenging President Obama’s recess appointments (see previous commentary and Cato’s brief for background on NLRB v. Noel Canning). Not only were Justices Scalia and Alito sticklers for constitutional text and structure, but the more liberal justices joined in to express extreme skepticism about the government’s theories. Justice Kagan pointed out that modern presidents don’t face congressional absences—the reason for the president’s power to appoint federal officials without the Senate’s “advice and consent”—but merely congressional “intransigence.” And the Recess Appointments Clause doesn’t exist to solve those kinds of political problems, noted Justice Breyer. Justice Breyer also pointed out that, if you follow the government’s argument that so-called “pro forma” Senate sessions don’t count, then the Senate repeatedly violates the Constitution by not having a “actual” sessions on January 3 (as the 20th Amendment requires) and by recessing for more than three days without the House’s consent (as Article I, Section 5 requires).

Solicitor General Verrilli’s suggestion that the Senate has to be engaging in business to deny the president the recess-appointments power didn’t seem to satisfy anyone. As Justice Kagan put it, any such test can be easily evaded by a clever Senate (that could name post offices by unanimous consent, for example, or, in Chief Justice Roberts’s example, note in the Senate Journal for “pro forma” sessions that “no business is anticipated to be [rather than will be] conducted”). Justice Kennedy said that he was “in search of a limiting principle” to the government’s position—so as not to simply give the president sole discretion to determine when the Senate is or isn’t in recess. Justice Kagan was left asking both sides how the Court should rule given that the presidential practice—whose history prior to the Truman administration the parties dispute—seemed to so clearly contradict the constitutional text and structure.

And indeed that is the question: If it’s true, as an overwhelming majority of the justices seemed to think, that the president was only supposed to have the power to make recess appointments during intersession recesses, and only for vacancies that arose during such recesses, what does it mean that this correct interpretation has never been followed? The challengers had several ready answers: (1) The Court hasn’t hesitated to make significant rulings upsetting existing practice based on separation-of-powers concerns (for example regarding the authority of criminal sentencing guidelines); (2) Past nominations won’t be unduly disturbed because of various finality rules, statutes of limitation, and agencies’ ability to ratify past decisions; (3) Given the changed modern context, with Congress in session for much longer periods and senators able to fly back to Washington on a moment’s notice, recess appointments are less important; and (4) Regardless of the correct interpretation of the recess-appointments power, it is the Senate that gets to determine when it’s in session or in recess, not the president.

While it’s unclear how exactly the Supreme Court will write its opinion in this case and where its focus will lie, it’ll be a real shock if the government wins this case. The justices recognized that the battle over executive and judicial nominations is a political one and that in cases of impasse, the Framers designed a system encouraging either political compromise or a final decision by the voters—not endless constitutional brinksmanship.

Categories: Policy Institutes

Hearings on Wasteful Federal Spending

Cato Op-Eds - Mon, 01/13/2014 - 13:45

Chris Edwards

In the picture, I am swearing to tell the truth about wasteful spending to the House Oversight Committee last week. And the truth is that the government does huge amounts of it.

In my testimony, I described why the federal fiscal outlook is worse than shown in official long-range projections. And I discussed why federal “waste” is a broader problem than simple screw-ups, such as an unused $300 million Pentagon blimp.

The federal government has been wasting money since the beginning of the Republic, and I listed 15 reasons why that is the case. I concluded with some proposed reforms, including privatization and chopping aid to the states.

Senator Tom Coburn also testified at the hearing. Coburn’s staff puts together a very nice annual compilation of wasteful projects, and it publishes many detailed reports on proposed reforms to federal agencies.

Why is Coburn just about the only member of Congress who uses his staff to dig into the budget, critique programs, and inform people about where savings can be found? Every congressional office should be doing that. If they did, Congress might finally be able to put together a package of major budget savings.

Also testifying was Tom Schatz of CAGW, Brandon Arnold of NTU, and Jaimie Woo of PIRG. For years, Tom’s group has been informing the public about thousands of wasteful projects buried in the massive federal budget.

Brandon and Jaimie have released a study describing billions of dollars of savings from cuts that should appeal to both liberals and conservatives. Brandon is a former director at Cato, and so Cato’s small-government views were well-reflected at the hearing.

My homework assignment for members of Congress is to task their staffs with digging through the budget and producing lists of, say, 20 substantial cuts to spending. Publish those proposed savings, and use media opportunities to highlight them, as Coburn does. That would at least start a dialog about budget trade-offs.

All federal programs impose burdens on taxpaying families, and so members of Congress have a duty to weed out low-value agencies, programs, and activities on an ongoing basis.

(I completed the homework assignment here).

Downsize the Department of Education
Categories: Policy Institutes

Chinese Liberal Mao Yushi Turns 85

Cato Op-Eds - Mon, 01/13/2014 - 12:01

James A. Dorn

Mao Yushi accepts the 2012 Milton Friedman Prize for Advancing Liberty

All lovers of liberty and limited government should celebrate Mao Yushi’s 85th birthday on January 14.  He was a signatory to Charter 08 and the recipient of the 2012 Milton Friedman Prize for Advancing Liberty.  As chairman of the Unirule Institute of Economics in Beijing, Mao Yushi has been instrumental in spreading classical liberal ideas in China.  In 1998, he commissioned the first Chinese translation of F. A. Hayek’s classic text, The Constitution of Liberty.  Unirule (Tianze or “Universal Rule”) conveys the fundamental principle of liberty under the law. 

Mao was educated as a mechanical engineer but later became interested in economics and how China could make the transition from central planning to a market economy.  In 1957, he was purged from the Chinese Communist Party during the Anti-Rightest Campaign, and he lost his job as a railroad engineer.  Later, during the Cultural Revolution, he lost his property when Mao Zedong outlawed private ownership. 

After Deng Xiaoping’s opening to the outside world in 1978, Mao Yushi was invited to rejoin the CCP but refused.  Instead, he became a leading critic of the Party’s monopoly on power and an advocate of free markets and civil society. 

In a recent essay, “Returning Mao Zedong to Human Form,” he argued that Chairman Mao should be subject to open criticism and not be viewed as a god—and called for removing Mao’s picture from Tiananmen Square and from the Chinese currency. As Nobel Peace Prize winner Liu Xiaobo has said, Mao Yushi’s “bravery is worth our respect.”

At Unirule, Mao Yushi has attracted many younger scholars to discuss the institutions necessary for a market economy, particularly private property rights and a legal system that protects basic human rights.  He holds that the state should protect the people who should be free to choose—an idea that goes back to Lao Tzu. 

In addition to drawing from the work of Hayek, Mao Yushi and his colleagues at Unirule have developed the ideas of Nobel Laureate economists Douglass North and Ronald Coase, focusing on the “new institutional economics.”  Peaceful development requires nurturing the right institutions and, in Coase’s words, requires a “market for ideas,” not just for goods and services.

In China’s Future: Constructive Partner or Emerging Threat? (Cato Institute, 2000), Mao Yushi wrote, “”The major obstacle to developing market institutions in China is the special privilege rights that lie beyond, and conflict with, human rights.”  That obstacle is still present, and Mao is still fighting for the people’s rights.  His courage in advancing freedom and civil society in China—through his writings, Unirule, Fuping Development Institute, and, most recently, the Humanism Economics Society—deserves our admiration and respect.

Categories: Policy Institutes

Uncertainty and Economic Fluctuations

Cato Op-Eds - Mon, 01/13/2014 - 09:02

Jeffrey A. Miron

Economist Nicholas Bloom (Stanford) has produced a nice summary of his work on uncertainty and economic fluctuations:

This review article tries to answer four questions: (i) what are the stylized facts about uncertainty over time; (ii) why does uncertainty vary; (iii) do fluctuations in uncertainty matter; and (iv) did higher uncertainty worsen the Great Recession of 2007-2009? On the first question both macro and micro uncertainty appears to rise sharply in recessions. On the second question the types of exogenous shocks like wars, financial panics and oil price jumps that cause recessions appear to directly increase uncertainty, and uncertainty also appears to endogenously rise further during recessions. On the third question, the evidence suggests uncertainty is damaging for short-run investment and hiring, but there is some evidence it may stimulate longer-run innovation. Finally, in terms of the Great Recession, the large jump in uncertainty in 2008 potentially accounted for about one third of the drop in GDP.

The crucial unanswered question is why uncertainty increased in 2008.

One possibility is that consumers and firms could not readily judge the severity of the financial crisis.

A different possibility is that consumers and firms were confused by the federal government’s aggressive new policies (e.g., bailouts) and uncertain about whether the incoming Obama administration would emphasize fiscal responsibility (e.g., scaling back entitlements) or expanded redistribution (e.g., Obamacare and higher tax rates).

The two possibilities are not mutually exclusive. But it matters a great deal which is quantitatively more important.  With luck, Bloom’s future work will address this issue.

Categories: Policy Institutes

If North Korea Implodes, Its Neighbors Should Pick up the Geopolitical Pieces

Cato Op-Eds - Mon, 01/13/2014 - 08:56

Doug Bandow

The Democratic People’s Republic of Korea remains sui generis, a communist monarchy wrapped in mystery, prone to sporadic brinkmanship and violent spasms.  The young leader’s surprise execution of his uncle suggests regime instability, which might spark new international provocations for domestic political purposes. 

The latest events have rekindled predictions of a possible North Korean collapse.  In a recent study the Rand Corporation’s Bruce Bennett argued that “There is a reasonable probability that North Korean totalitarianism will end in the foreseeable future.” 

Of course, DPRK has outlived the Soviet Union by more than two decades.  Pyongyang may continue to surprise the West with its resilience. 

Nevertheless, the system is under increasing stress.  Columnist Steven Metz observed: “The execution could be a sign that the cohesion of the North Korean elite is crumbling.”  Jang’s elimination suggests weakness, not strength. 

Any future political battle could turn even more violent, including possible civil war.  The resulting hardship could exceed that resulting from the 1990s famine, which killed a half million or more North Koreans.  We should not expect a peaceful German-style resolution. 

Although most people presume reunification would follow a North Korean collapse, Bennett warned that “China could take political control of much of the North, likely in cooperation with one or more North Korean factions.”

What should Washington do?  Analyst John Guardiano advocated unilateral American military intervention: “we likely will have to occupy and rebuild the country.”  Seoul might not approve of the Pentagon turning the North into an American colony.  More likely, the South would lead any Western military effort. 

However, Beijing also would be tempted to act militarily.  Its incentive to act would be even stronger if U.S. forces entered as well. 

The DPRK military might resist.  Worse would be a clash between allied and Chinese forces.  Worried Bennett: “The forces of both sides would have significant incentives to advance rapidly into the North, leading to a risk of accidental combat between them.”

In short, a North Korean implosion could be an explosion as well.  Concerned governments should begin pondering likely contingencies.

South Korea has the most to do.  It should adopt reunification legislation, since under its constitution North Koreans currently are considered ROK citizens. 

However, consultations should not stop in Seoul.  So far China has been reluctant to enter talks regarding its ally, but relations between the two states have frayed.  The execution of Jang, a friend of Beijing, introduced new tensions in the relationship.

Desirable would be regional cooperation, including providing forces for reconstruction duties. 

However, the U.S. should limit its role.  Humanitarian aid should primarily come from multinational agencies and the North’s neighbors, especially South Korea, China, and Japan, which have the most at stake. 

America should reject any direct military role.  In no case should the U.S. be involved in occupying and pacifying the North.  The U.S. could provide logistical aid for any South Korean military move, though by now Seoul should be able to support its own forces.

Washington also might consider limited operations to secure nuclear materials and other WMDs.  However, even this mission would be complicated:  China is closer to many facilities, such the Yongbyon nuclear complex, and might quickly occupy them.  Moreover, the ROK might decide that reunification was a convenient opportunity to augment its own military capabilities.

And as I explain in the National Interest online:

Most important, the U.S. should ease Chinese fears about America’s role in a reunified Korea.  Although troops along the Yalu might seem minor compared to air and sea forces in the Asia-Pacific, the former would be a potent symbol and resurrect memories from the Korean War.  Beijing would see less need for a buffer state if there were no U.S. ground forces against which to buffer.

Kim Jong-un celebrated Jang’s execution as demonstrating national unity.  More likely, however, the regime’s foundation is cracking. 

The North’s neighbors should prepare for “what if?”  Washington’s most important role would be to limit expectations as to what the U.S. would do.  Ultimately Pyongyang is a South Korean and Asian rather than an American responsibility.

Categories: Policy Institutes

The Administration's School-Discipline Push, Cont'd.

Cato Op-Eds - Fri, 01/10/2014 - 15:16

Walter Olson

As Andrew Coulson explained, the federal Justice Department and Department of Education have sent out a “Dear Colleague” letter discouraging schools from pursuing strict discipline policies against student misbehavior, especially against “routine” or “minor” infractions; Education Secretary Arne Duncan cited tardiness and disrespect as examples of the latter. 

Assuming that the federal government has somehow acquired the legitimate constitutional authority to begin dictating the fine points of disciplinary policy to local schools in the first place—a big if—it might seem at first that much of this is innocuous. Some early press coverage, for example, makes it sound as if the letter is mostly aimed at obtaining a reconsideration of zero-tolerance policies (long criticized by libertarians) as well as the sorts of suspensions and expulsions that are based on far-fetched dangers like finger guns or forbidden hugs.

Unfortunately, there’s much more. The letter represents the culmination of a years-long drive toward imposing tighter Washington oversight on school discipline policies that result in “disparate impact” among racial or other groups. Policies that result in the suspension of differentially more minority kids, or special-ed kids, will now be suspect—even if the rate of underlying behavior is not in fact uniform among every group. (Special-ed kids, for example, include many placed in that category because of emotional and behavioral problems that correlate with a higher likelihood of acting out in misbehavior. Boys misbehave more than girls.)

In 2012 Senate testimony, Andrew Coulson noted:

  1. Compared with the alternatives, the use of out-of-school suspensions appears to improve the learning environment for other (non-disciplined) students by protecting them from disruption.
  2. Zero-tolerance policies were adopted in the first place in part as a way for administrators to try to defend themselves against disparate-impact charges. In other words, the new supposed remedy (disparate-impact scrutiny) helped cause the disease to which it is being promoted as the cure.

If the policy helps speed the correction of some overly harsh, mechanical school policies (both under the zero-tolerance rubric and otherwise), it may have some positive side effects. But the disparate-impact premise is a pernicious one that’s sure to create many new problems of its own.

C/P and adapted from Overlawyered.

Categories: Policy Institutes

Privatize the TSA: Make Americans Safer by Letting Airports Handle Security

Cato Op-Eds - Fri, 01/10/2014 - 13:05

Doug Bandow

Any American who travels deals with the Transportation Safety Administration. The Bush administration made many mistakes in the wake of the September 11, 2001 terrorist attacks; creating a government monopoly to handle air transportation security was one of the worst.

Government’s most important duty is protecting its citizens, but others can share that role. After all, no airport or airline wants a plane hijacking, and no airline (or railroad) passenger wants to die in a terrorist incident. 

Unfortunately, the TSA is a costly behemoth that is better at bureaucracy than safety. Created in 2001, the TSA spent $7.9 billion and employed 62,000 employees last year alone. The agency’s main job is to protect the more than 450 commercial airports, and two-thirds of the agency’s budget goes for airport screening. 

Unfortunately, as my Cato Institute colleague Chris Edwards has documented in a recent Policy Analysis, the TSA has lived down to expectations. Notes Edwards: “TSA has often made the news for its poor performance and for abusing the civil liberties of airline passengers. It has had a troubled workforce and has made numerous dubious investments.” For all the agency’s spending and effort, “TSA’s screening performance has been no better, and possibly worse, than the performance of the remaining private screeners at U.S. airports.”

The TSA has had an abundance of problems, as I listed in a Freeman column:

Wasteful spending of all sorts. “Unethical and possibly illegal activities,” according to the agency Inspector General. “Costly, counterintuitive, and poorly executed” operations, according to the House oversight committee. Employee misconduct. Ranking 232 out of 240 federal agencies in job satisfaction.

Worst, though, is the TSA’s failure to do the job for which it was created: secure America’s airports and other transportation hubs. Reported Edwards, “There were 25,000 security breaches at U.S. airports during TSA’s first decade, despite the agency’s huge spending and all the inconveniences imposed on passengers.” In tests, the agency failed to catch as much as three-quarters of fake explosives. 

The problem is not just operational inefficiency. The TSA doesn’t think strategically, or at least, it does not do so effectively. The agency has been criticized for failing to follow “robust risk assessment methodology” and undertaking “little or no evaluation of” program performance.

No planes have been hijacked since 9/11, but, wrote Edwards, “The safety of travelers in recent years may have more to do with the dearth of terrorists in the United States and other security layers around aviation, than with the performance of TSA airport screeners.” 

The alternative to the TSA monopoly is privatization. Entrust airport security to airports, which can integrate screening with other aspects of facility security and adjust to local circumstances. It’s not a leap into the unknown; Canadian and most European airports use private screening.

Even the 2001 legislation setting up the TSA allowed a small out for American airports. Five were allowed to go private, and another 11 have chosen to do so in the intervening 12 years. However, the Reason Foundation’s Robert Poole complained that the TSA “micromanages” even private operations, “thereby making it very difficult for screening companies to innovate.”  Worse, a House oversight committee charged the agency with “a history of intimidating airport operators that express an interest in” effectively firing the TSA.

Shifting security to private operators would not eliminate problems. But expanding airport flexibility and, more important, creating security competition would encourage increased experimentation.

Americans started to innovate on that tragic September day a dozen years ago.  When passengers on the fourth hijacked flight learned what their hijackers had in store, the former ended the mission. Passengers later took down the shoe and underwear bombers. 

Obviously, dangers remain. But the best way to protect people would be to end the TSA, limiting Washington to general oversight and tasks such as intelligence activities. Travel would be safer, security would be cheaper, and Americans would be freer.

Categories: Policy Institutes

Washington Big Spenders: Wasteful as Essential

Cato Op-Eds - Fri, 01/10/2014 - 09:22

Doug Bandow

If you live anywhere but Washington, D.C., you probably believe that the federal government spends too much.  Today the national debt is more than $17 trillion.  CBO figured that existing budget plans would add between $6.3 trillion and $8.8 trillion in red ink over the coming decade. 

Social Security and Medicare alone account for more than $100 trillion in unfunded liabilities, promised benefits for which no revenues are set.  Counting a multitude of other debts and obligations, American taxpayers are on the hook for more than $220 trillion in unfunded liabilities.

As I point out in my new Forbes online column:

However, denizens of Washington see things very differently.  Policymakers recently approved a bipartisan budget that increased discretionary spending, theoretically the easiest outlay to control, over the next two years.  Legislators ignored so-called entitlement outlays, which threaten to consume the entire federal budget.

It really doesn’t matter which party is in charge in Washington.  Most Republicans have little desire to cut federal outlays.  One man’s waste is another man’s vote-winning special interest hand-out.

Sen. Tom Coburn (R-Ok.) has issued a second “Wastebook” which contains 100 of the dumbest uses of taxpayers’ money.  Explained the Senator:  “While the president and his cabinet issued dire warnings about the cataclysmic impacts of sequestration, taxpayers were not alerted to all of the waste being spared from the budget axe.”

For instance, the National Endowment for the Humanities devoted almost $1 million to the Popular Romance Project to “explore the fascinating, often contradictory origins and influences of popular romance as told in novels, films, comics, advice books, songs, and internet fan fiction, taking a global perspective—while looking back across time as far as the ancient Greeks.”  The National Science Foundation spent a quarter of a million dollars to study “attitudes toward the Senate filibuster among the American public.”

The Army spent nearly $300 million on a blimp for surveillance in Afghanistan—only to drop the project after its inaugural U.S. flight, selling the airship back to its maker for $301,000.  The International Trade Association devoted nearly $300,000 to send Indi Rock music executives on a tour to Brazil.  

The National Institutes for Health dropped $335,525 on a study which determined that “marriages that were the happiest were the ones in which the wives were able to calm down quickly during marital conflict.”  The $1.9 million Senate Office of Education and Training provides classes for staffers on such subjects as sleeping well and making small talk.  The National Endowment for the Arts used $10,000 to underwrite the PowerUP Project, which featured choreographed (utility) pole dancing. 

Housing and Urban Development used $1.2 million to create an apartment designed for the deaf in Tempe, Arizona, only to then decide that three-quarters of the residences should be occupied by people with normal hearing.  The Agriculture Department gave an Oklahoma winery $200,000 to purchase new equipment. 

The Institute of Museum and Library Services gave a New York museum $150,000 to create an exhibit on play.  NSF spent $2.9 million to create sites “where arts and science will be used to educate the public about Indianapolis’s water system.”

The Commerce Department provided Las Vegas with $800,000 to think about economic development.  The U.S. Marshals Service dropped nearly $800,000 on promotional “swag,” including Christmas ornaments.

Sen. Coburn’s 100 programs cost about $30 billion total.  While that’s a lot of money for most anyone except Bill Gates, it is small change for the federal government, less than 1/700th Uncle Sam’s current unfunded liabilities.  Even eliminating the many wasteful projects that litter the federal bureaucracy would not balance the budget.

But Congress should start by killing the Coburn 100.  Americans then need to have an adult conversation about the budget.  Too many people expect to live at someone else’s expense through Washington.  Which is why the nation faces financial ruin.

Categories: Policy Institutes

The Council on Foreign Relations Doesn't Care What You Think

Cato Op-Eds - Thu, 01/09/2014 - 13:50

Justin Logan

Bruce Stokes has a piece up at Foreign Policy describing the disconnect between public opinion on US foreign policy and elite opinion. The point has been made many times before. Benjamin Page and Marshall Bouton wrote a book arguing that there is a disconnect in that the public wants more liberal foreign policies—focusing on multilateral cooperation, protecting weak nations from one another, improving foreigners’ standards of living, and promoting democracy abroad—but elites are more realist, focused on power and dominance. Dan Drezner, on the other hand, argued that there is a disconnect, but in exactly the opposite direction: the public is more realist, focused on power and security, and cool to the liberal views and policies of America’s foreign-policy elite.

Tabling who is right and who is wrong about what the public wants, everyone making this sort of argument is at least implicitly acknowledging that the foreign-policy elite defies public preferences on foreign policy. This is pretty easy to explain. Since the United States is so safe, foreign policy isn’t salient to voters in the way that their proximate interests—getting a tax credit or transfer payment—are. Some scholars have pointed out that public opinion on foreign policy has a lot to do with voters’ identity: right-thinking sorts of people hold these sorts of foreign policy views: “I am a right-thinking person, therefore I will hold these sorts of views.” This is why you hear foreign policy elites bleating endlessly about leadership, American exceptionalism, strength, et cetera. Those concepts zap the public in ways that wonky arguments about how extended deterrence or alliance politics work don’t.

As Ben Friedman and Chris Preble recently wrote in the LA Times, the public is moving closer to the views of Cato’s defense and foreign policy scholars. A disastrous decade of foreign policy brought to them by the foreign-policy elite, combined with an economic slowdown and growing concerns about our domestic economy and politics, have created a come home, America sentiment among the public. Academic scholars, as well, have become more Cato-ish. As three academic proponents of the status quo recently admitted with alarm, “According to…most scholars who write on the future of U.S. grand strategy,” restraint’s time has come.

But public opinion, and certainly academic opinion, isn’t enough. The insular foreign policy elite, and the politicians who employ them, can regularly defy public opinion because voters generally don’t use the tools they have at their disposal—votes and campaign contributions—to get rid of the pols and policymakers whose foreign policies they don’t like. Foreign policy just doesn’t affect them enough to keep their attention. Moreover, the few interested parties in US foreign policy generally push for a more interventionist policy, not a less interventionist one. As Ben Friedman wrote:

In current national security politics, there is debate, but all the interests are on one side. Both parties see political reward in preaching danger. The massive U.S. national security establishment relies on a sense of threat to stay in business. On the other side, as former defense secretary Les Aspin once wrote, there is no other side. No one alarms us about alarmism. Hitler and Stalin destroyed America’s isolationist tradition. Everyone likes lower taxes, but not enough to organize interest groups against defense spending. A scattering of libertarians and anti-war liberals confronts a bipartisan juggernaut. The information about national security threats comes to Americans principally from people driven by organizational or electoral incentives toward threat inflation.

In light of this, it’s remarkable that Americans have grown as sensible as they have. And there are obvious exceptions where politicians pay a price for their reckless policies—President George W. Bush, the Iraq War, and the foreign policy brain trust that dreamed it up did political damage to the individuals most closely associated with the policy—but these exceptions prove the rule.

Chris Layne, a leading opponent of America’s bipartisan interventionist strategy, put it well in his book Peace of Illusions:

Unless it undergoes a Damascene-like intellectual conversion, as long as the present foreign policy elite remains in power the United States will remain wedded to a hegemonic grand strategy. It probably will take a major domestic political realignment—perhaps triggered by setbacks abroad or a severe economic crisis at home—to bring about a change in American grand strategy.

Categories: Policy Institutes

The Annals of Power: Christie, FDR, and Nixon

Cato Op-Eds - Thu, 01/09/2014 - 13:17

David Boaz

Experts tell Monica Hesse of the Washington Post that closing a few bridge lanes is pretty thin gruel as far as punishing your enemies goes. Journalism professor and scandal-culture expert Mark Feldstein scoffs, “If he’s not willing to be thinking of unauthorized wiretaps . . .”

Hesse asks, “In the grand scheme of diabolical political paybacks, how does this vision stack up?”

Take FDR, Feldstein says. During World War II, after the Chicago Tribune published news of broken Japanese codes, President Franklin D. Roosevelt tried to order troops to take over the newspaper’s building. (He was eventually talked down from this martial plot.) The publisher was an old nemesis from prep school.

Take President Richard M. Nixon — always with Nixon — who tried to get the IRS to conduct field audits against people he perceived as political foes in the early, pre-Watergate 1970s. “It was really a matter of trying to destroy people personally” by using the governmental means available, says Joseph Cummins, the author of dirty tricks encyclopedia “Anything for a Vote.” “That was the way Nixon felt about things.”

 FDR knew the rule, “Never pick a fight with a man who buys ink by the barrel.” He wasn’t so squeamish when it came to retailers who defied his preferences. Sewell Avery, chairman of the big catalog company Montgomery Ward, opposed labor unions, Roosevelt’s New Deal, and Roosevelt’s re-election. In 1944 Avery refused FDR’s order to extend his company’s labor contracts to avoid a strike. Roosevelt ordered the War Department to seize the offices of Montgomery Ward. Attorney General Francis Biddle flew to Chicago to oversee the army’s physical removal of Avery from his office, as the photo shows.

When Christie does that, he’ll be ready for the political big leagues.

Categories: Policy Institutes

Downsize the Department of Energy

Cato Op-Eds - Thu, 01/09/2014 - 11:33

Caleb O. Brown

The Department of Energy spends $29 billion per year on various schemes with a disastrous track record, often with bipartisan support. From regulations that destabilize markets, decrease domestic output and harm consumers, to subsidies that pick and choose winners and losers, this department is a perfect example of a white elephant – an expensive project of little to no useful purpose.

Solyndra is the best example of such waste. The solar panel company received a $535 million loan before filing for bankruptcy in 2011. The federal government will likely recover just $27 million from that loan.

The department can be abolished by relegating security and clean-up-related tasks to the EPA or the Department of Defense and by returning research functions to the private sector. In all, abolishing the Department of Energy would save taxpayers about $7 billion a year. To that end we’ve created a short video which makes these and other points, which you can watch below.

Categories: Policy Institutes

Education Guns Fire Blanks in War on Poverty

Cato Op-Eds - Thu, 01/09/2014 - 11:10

Neal McCluskey

A lot of federal weapons were created to fight President Lyndon Johnson’s ”War on Poverty,” and some of the biggest were in education. The Elementary and Secondary Education Act, the Higher Education Act, and Head Start are all parts of Johnson’s overall effort to end poverty and create a “Great Society.” They also share two other things in common: pretty damning evidence that they are failures, and Cato videos laying out the bad news.

The first video – which calls for the end of the U.S. Department of Education, but in so doing highlights ESEA and HEA programs – presents the big evidence of K-12 and higher ed failure: massive spending, stagnant test scores, and turbo-charged college tuition inflation. Of course, a lot of variables affect these things, but there is simply no compelling evidence of federal success. 

Downsize the Department of Education

The second video is of Cato’s recent forum, “Preschool Education: What the Research Says.” While there is a great deal of debate about the effectiveness of preschool generally, there seems to be consensus that Head Start has few, if any, meaningful, lasting, positive effects. Yet not only do we stick with it, President Obama is pushing to expand federal preschool intervention, to the tune of $75 billion over ten years.

What keeps these misfiring, War on Poverty blunderbusses in service? Not their effectiveness, because, well, there is precious little evidence of any. Most likely, it is that it’s very compelling to “help” the young and poor with big programs, while it is cost prohibitive for the average American, with a full-time job and other interests, to research whether these programs actually help. Finally, for most politicians – where the public-sentiment rubber meets the public-policy road – the costs of appearing not to care are much too great to act on the powerful evidence that voters rarely see.

Hopefully, voters will see these videos.

Categories: Policy Institutes

U.S. Leverage over Iraqis? When Did We Have That?

Cato Op-Eds - Thu, 01/09/2014 - 10:10

Christopher A. Preble

Today’s Wall Street Journal features a front-page story (may be paywalled) on the civil war raging in Iraq. The headline observes that the United States has minimal leverage in Iraq, and that American officials fear that they will therefore be unable to halt the war, at least not any time soon.

Despair over our supposed “lost leverage” has been building for a while. Late last month, Max Boot lamented “the tragedy of Maliki’s Iraq” and opined “Maliki needs to implement a comprehensive counterinsurgency campaign…whose central feature must be outreach to the estranged Sunnis.” “The tragedy,” Boot concluded, “is that Maliki lacks the acumen to do that–and the U.S. lacks the leverage to compel him, because of the ill-advised pullout of American forces at the end of 2011.”

Such recommendations are based on two fundamental misconceptions: 1) That Americans once had leverage over the Iraqis, and that we lost it around the time U.S. troops were withdrawn from Iraq; and, 2) that there is a durable political solution within reach, if only we had the gumption to go back in.

Instead, the hard fighting of brave Americans to secure Iraq’s future have been, in the inimitable Boot’s words, “squandered by politicos in Baghdad and Washington.” 

Boot ignores there was no public appetite for leaving U.S. troops in Iraq after 2011, and there is even less enthusiasm for sending them back in today. If he wants to criticize politicos in Baghdad and Washington, he must also criticize the voters who elected them. Otherwise, he is effectively howling at the moon.

Thankfully, there is intelligent, informed commentary on what is happening in Iraq, commentary that recognizes political realities in Iraq, and doesn’t succumb to fantasies about the United States’ magical democracy-making powers. I especially appreciated the New America Foundation’s Douglas Ollivant’s piece at ForeignPolicy.com. His advice to Iraqi Prime Minister Nouri al-Maliki? Fight. There is no talk in Ollivant’s piece about American soldiers fighting for him.

The central problem in Anbar province and other Sunni-dominated areas, Ollivant writes: 

is that significant numbers of Anbaris have not yet reconciled themselves to the loss of power – and the privileges that came with it – after the fall of Saddam Hussein. This has spawned two results: demonstrations to express demands that are politically impossible outside an authoritarian system and a return to the violence that al Qaeda has been trying for years to precipitate.


So when analysts (or U.S. senators) suggest that Maliki meet the protesters’ demands, what are they really saying? Do they mean he should take extraconstitutional measures to bring about preferred policies such as limiting de-Baathification or regularizing how oil is produced and its revenues distributed – two legislative initiatives that Iraq’s lawfully elected parliament failed to approve? 


This is not to say that Maliki and his government are blameless. There are no doubt actions the prime minister has taken that he wishes he could take back. Politicians make mistakes and miscalculate. But the fact remains that a terrorist force is blowing up thousands of Iraqi citizens. What kind of responsible elected official would just sit around and do nothing?

(Read the whole thing here.)

Maliki represents a constituency within Iraq, certainly not perfectly, as Ollivant notes, but well enough to get elected. Those who note that he was actually defeated in 2010, but managed to hold onto power illegally, cannot point to a credible alternative leader who might have been able to lead Iraq out of this dark period through negotiations. Any such person would surely be confronted by rejectionists who would rather fight than make concessions to their enemies. 

Achieving peace and reconciliation in Iraq is going to be very hard. I’d say impossible, at least for a while. And, most importantly, it will be done by Iraqis, not by Americans on behalf of Iraqis. Remember that the next time you hear people talking about the leverage that Americans once had over Iraqis, and that we could get that leverage back, if only we had U.S. troops on the ground.

Categories: Policy Institutes

Making a Blood Purge Pay in North Korea

Cato Op-Eds - Thu, 01/09/2014 - 08:45

Doug Bandow

North Korea long has been called the “Hermit Kingdom.”  Although the North’s isolation has eased in recent years, it still resembles “a riddle wrapped in a mystery inside an enigma,” as Winston Churchill famously described the Soviet Union.  No one is sure what to make of the execution of the young leader’s uncle and one-time mentor Jang Song-taek. 

However, the latest turmoil provides an important entrepreneurial opportunity for the Democratic People’s Republic of Korea, one of the world’s poorest nations.  Jang was denounced for having “seriously obstructed the nation’s economic affairs and the improvement of the standard of people’s living.”

No one knows the truth of this charge.  But something continues to obstruct economic development.  There may be an answer.  As I suggest in my latest American Spectator article:

Something needs to be done to spark the sort of growth in North Korea occurring elsewhere in East Asia, including China.  The answer is to turn the purge into a profit-making opportunity. Communist countries always have had a special talent for treating power struggles as public spectacles. Why not also use the ongoing purge to make some cash?

Start with T-shirts. A colleague of mine suggested “I Survived the Purge” would be a winner with tourists—as well as residents of Pyongyang, assuming anyone actually survives the purge. Other ideas include “I was Purged and All I got was this T-Shirt” and “Purge them All and Let God Sort Them Out.” 

Tourist shops could stock bobble-heads of political favorites, including winners and losers in the North’s ongoing political battles. Directed especially at the Russian market would be matryoshka dolls, with successively smaller figures fitting within the others. 

The Kim dynasty could license a special line of liquors, along the lines of Jack Daniels’ new “Sinatra Select,” named after Frank Sinatra, who favored the brand. The late Kim Jong-il was a devoted fan of Chivas Regal. Perhaps Kim fils has a special drink he relaxes with—and sips while purging and executing his enemies. 

Another opportunity is product endorsements. Kim Jong-il cornered the market on platform shoes and big sun-glasses, as well as bouffant hair styles. Kim Jong-un loves basketball.  What American boy would want to be without the special Kim Jong-un ball and hoop set?

Indeed, there’s no reason to stop with basketball products. The latter Kim could team up with his close personal friend and former NBA great Dennis Rodman to start a professional basketball league in North Korea. Imagine the Pyongyang Purge playing on an international tour. 

The North Koreans also should create board, card, and video games centered around their unique “social system,” as they called their society when I visited years ago. Who needs “Monopoly” when you can have “Show Trial”?  Combat games could feature liberation from South Korean oppression, overthrow of Japanese colonialism, and, of course, destruction of American imperialism. 

Finally, the North needs to tap into the global cultural marketplace. Who needs Hollywood, Bollywood (India), and Nollywood (Nigeria) when you could have Pollywood in Pyongyang?  (In fact, Kim Jong-il was so committed to developing a domestic movie industry that he ordered the kidnapping of foreigners to produce North Korean works.)

Obviously, these activities would only be the start of an economic revival.  But the legacy of Jang Song-taek, noted “human scum,” could live on if the Kim regime grasps the opportunity before it. With the right marketing, Jang could end up bigger than Darth Vader, an enemy of truly global proportions. And Pyongyang could profit in the process.

Categories: Policy Institutes

Police Misconduct -- The Worst Case in December

Cato Op-Eds - Wed, 01/08/2014 - 17:05

Tim Lynch

Over at Cato’s Police Misconduct web site, we have identified the worst case for December. It was the case of Eric Crinnian, a Kansas City man who was threatened by police for refusing them warrantless entry into his home. When Crinnian, a lawyer, refused to let officers search his home in the middle of the night without a warrant, he says an officer told him, “If we have to get a warrant, we’re going to come back when you’re not expecting it, we’re going to park in front of your house, where all your neighbors can see, we’re gonna bust in your door with a battering ram, we’re gonna shoot and kill your dogs…and then we’re going to ransack your house looking for these people.”

That kind of conduct shows a clear contempt for the Constitution, which is supposed to be the law of the land.

We welcome assistance from readers. If you see a police misconduct story while you are reading the news, send it our way using this form. Thank you.

Categories: Policy Institutes