Next time you notice some politician demanding a higher minimum wage and denouncing private employers for underpaying labor, chances are good the message reached you with the help of an unpaid student intern. Last week a Washington Post opinion contributor unsurprisingly revealed that the Obama White House is itself taking on about 150 such interns this summer, even as it keeps dreaming up new ways to extend and toughen the coverage of the Fair Labor Standards Act of 1938 for everyone else. New York State Sen. Daniel Squadron, sponsor of a bill to raise the minimum wage at many employers to $15/hour, turns out to offer his own unpaid internships (minimum commitment: 3 days a week), while Del. Heather Mizeur, the left-most Democratic candidate for Maryland governor, has advised would-be Campaign Fellows that “All positions are unpaid and you must provide your own phone and laptop.” All this following two years of agitation by labor activists and class-action lawyers about the iniquity of unpaid internships.
More about politicians’ double standards in a moment: should, in fact, the government ban such internships for private employers? I answer “no” in a new U.S. News “Debate Club” also featuring an entry by Dan Rothschild of R Street Institute as well as contributions by three advocates of a ban. Excerpt from mine:
With eyes wide open, students with many options have long sought out voluntary unpaid internships because they’re an arrangement that can rationally benefit both sides.
In an Auburn University working paper last month (via), four economists reported on a study that found internship experience was associated with a 14 percent increase in the rate at which prospective employers request interviews of job seekers. As a predictor of the rate of callbacks, an internship on the resume actually worked much better than a business degree itself.
Yet class-action lawyers and labor activists now attack internships as — in the trendy, elastic new term — “wage theft.” These same lawyers and activists go to court demanding millions of dollars retrospectively over arrangements both sides understood perfectly well at the time to be unpaid — and think shakedowns like these should *not* be called “theft.” …
In modern America, it’s never more than a short jump from “this set-up isn’t for everyone” to “let’s ban it.”
I go on to discuss the sclerosis of the European job market, especially when it comes to youth employment, and observe that the “campaign against internships is part of a wider campaign against low-pay work options in general — call it a campaign to get rid of any stepping stones in the stream that aren’t sturdy enough to support a whole family.” And I note the curious contrast with higher education pointed out by my colleague Andrew Coulson: “Paying to Learn Nothing = Legal. Paying Nothing to Learn = Illegal.”
But back to the politicos. My reaction to the stories above is not to try to shame President Obama or Sen. Squadron. To begin with, we know exactly what fix they are likely to propose once we “win” that debate: mulct taxpayers in Terre Haute and Ticonderoga to provide stipends for highly credentialed White House or Albany interns who are already probably headed for the top 10 percent of the income distribution no matter what. Another victory for salving our consciences about inequality!
Instead, I hope stories like the above lead some supporters of Obama, Squadron and Mizeur to rethink their notions of exploitation and unpaid labor. Why wouldn’t a 22-year-old with a laptop and a few free months take a flyer to work for a dynamic political operation, or (mutatis mutandis) hang out in a foreign correspondent’s office, or be the coffee-bringer while getting to see how a Hollywood studio makes a film? Why shouldn’t consenting parties be free to make a choice like these for themselves, rather than our presuming to make it for them? [adapted and expanded from Overlawyered]
“Within limits, the system of progressive taxation is defensible and effective. Beyond a certain point, however, it dulls incentives, and may destroy the principal source of funds for new enterprises involving exceptional risks.”
–Harold G. Moulton (founder of the Brookings Instituion), Controlling Factors in Economic Development, The Brookings Institution, 1949, p. 292.
Oh dear, yet another scare story about falling-down bridges. A Washington Post headline today in the hardcopy is “63,000 Bridges Structurally Deficient, U.S. Says.”
The Federal Highway Administration (FHWA) has released its annual data on bridge conditions, and indeed the data show that 63,522 bridges were “structurally deficient” in 2013. That sounds like a lot, but it is out of 607,751 total U.S. bridges.
Here’s what nearly all media stories on this topic gloss over: the share of U.S. bridges that are structurally deficient has been falling steadily for more than two decades. The chart below (based on FHWA data) shows that the share of U.S. bridges that are structurally deficient fell from 22 percent in 1992 to just 10 percent in 2013.
The chart clearly shows good news on the bridge front, but many reporters focus on the bad news angle favored by construction lobby groups.
The WaPo story reflects lobbyist pleas that the states need the federal government to fix their bridges. But why? If Pennsylvania has “the nation’s worst problem,” then the Pennsylvania legislature should find a solution—either reprioritize the state budget, start privatizing bridges, charge bridge tolls, or find other funding sources. No need to look to Washington. Uncle Sam is not Santa Claus.
K. William Watson
The 2009 Family Smoking Prevention and Tobacco Control Act banned the sale of all flavored cigarettes, except menthols, in the United States. Indonesia successfully challenged that part of the law at the World Trade Organization as disguised protectionism—the banned products were clove cigarettes from Indonesia and the exempted menthols are made in the United States. The U.S. government tried to claim that the distinction was justified because kids like smoking cloves more than menthols. They failed to convince the trade court, because that’s ridiculous.
The time given the United States to bring its measure into compliance with WTO law has now elapsed. Instead of changing the law to allow cloves or to ban menthols, however, the United States has claimed that issuing a report and thinking about what to do about menthol cigarettes is enough to bring it into compliance. Indonesia understandably disagrees and is seeking permission to retaliate against U.S. imports.
To stave off retaliation, the U.S. government has now decided to defend the clove cigarette ban by arguing that it was completely ineffective. As reported by Inside U.S. Trade ($)(emphasis added):
The U.S. is … claiming that, even if it is found not to have complied with the ruling, Indonesia is not entitled to retaliation because the country’s exports have not been nullified or impaired by the U.S. ban on clove cigarettes….
Specifically, the U.S. points out that the Indonesian industry has repackaged clove cigarettes into clove cigars, which unlike their counterparts are not banned. Therefore, the U.S. maintains, Indonesia’s clove exports have not suffered as a result of the ban.
International trade rules probably won’t slow the steady creeping of progressive lifestyle paternalism, but I truly enjoy these kinds of embarrassing revelations. The pesky thing about people is that they keep trying to do things they want to do even when governments tell them not to—coercive “nudges” notwithstanding.
Last year, Sallie James and I wrote a paper warning against the increasing prevalence of regulatory protectionism in the United States. We noted that, unlike most product regulations, tobacco control doesn’t lend itself to market solutions:
For some regulations that have nonprotectionist goals, there is no free market answer, because the “legitimate” goal is an illiberal imposition on consumer choice. Again, the clove cigarette ban provides an excellent example. For tobacco control advocates, the goal is not to have better quality products or to prevent negative environmental impact—the goal of a cigarette ban is to control people for their own purported good.
Any cigarette ban, like other forms of prohibition, is incompatible with the ideals of a free society. The dangers of smoking are well-known, and its popularity has waned considerably in recent decades, but smoking tobacco tastes and feels as good as it always has, and many find the risks acceptable.
While the global tobacco control movement is fiercely opposed to the proliferation of global trade rules, the anti-tobacco forces are probably wasting their energy. Even if tobacco measures are exempted from all trade rules, the paternalists are going to lose because their agenda is ultimately hopeless. They’re fighting a losing battle against the indelible human spirit that pursues happiness without permission.
As the fall-out continues from the Supreme Court’s affirmative action decision earlier this week—see, in order, Ilya’s, my, and Wally’s Cato@Liberty comments—I was invited late yesterday to expand, very briefly, on my earlier reflections at a site called “2paragraphs”—in particular, to discuss, in two paragraphs, how public higher education transfers wealth from the lower to the upper classes of society, and how affirmative action actually harms those it’s meant to help. You’ll find that brief discussion here.
The Springdale (Ark.) Police Department put together a recruitment video for new officers. The video is getting some attention—for its militarism. Take a look:Springdale Police Recruiting Video
The video shows armored vehicles, flash bang grenades, and (at the 2:30 min. mark) officers dressed in ghillie suits.
Whenever the government magnanimously “offers” its assistance, all Americans should be skeptical. Recent confirmation of this fact has come from Harrington, Maine, where the federal government’s helpful assistance—via the employment verification system, E-Verify—has cost one small business thousands in fines.
Worcester Wreath Co. hires around 500 seasonal employees annually to help fill orders for handcrafted holiday wreaths and centerpieces. The majority of the wreaths are sold, while others go to the company’s Wreaths Across America program, which places free wreaths on headstones at Arlington National Cemetery. In short, this is an American company that supplies holiday goods and helps to honor deceased American veterans at no cost to the taxpayer.
Worcester Wreath, however, made the mistake of voluntarily using the Fed’s E-Verify system. E-Verify is an electronic employment eligibility verification system run by the federal government that is intended to weed unauthorized immigrants out of the labor force by allowing employers to check their eligibility against a government database. The employer enters the job applicant’s Social Security number and information into E-Verify which then checks it against a government database.
Any potential issues are flagged with a tentative non-confirmation (TNC). Employers and employees have an opportunity to appeal the TNC, but a failed appeal (or failure to appeal) will result in a final non-confirmation (FNC) and the applicant being ruled as not work-authorized for legal employment in the United States.
Some 101 of Worcester Wreath’s seasonal employees were found by E-Verify to have employment-authorization issues. Six were retained by the company despite the issues and another six were fired and then rehired at a later date.
For the sin of employing 12 willing workers with statuses marked as questionable (not clear from the article whether a TNC or an FNC was issued) by the voluntarily used, notoriously unreliable, and largely ineffective E-Verify, the company was fined $25,000 ($2,083.33 per worker).
Worchester Wreath’s participation in E-Verify was voluntary but the fines were heavy. Fines like these on businesses of all sizes who employ seasonal workers will only get worse if E-Verify becomes mandatory. Instead of punishing businesses who supply free holiday decorations to the world’s most famous veterans’ cemetery, the Feds should attack the root problem and fix our legal immigration system.
Scott Platton assisted in the writing of this piece.
Lawrence and Wishart, a radical press founded in 1936 and formerly associated with the Communist Party of Great Britain, has asserted a copyright over “Marx-Engels Collected Works,” a series of $25-50-ish hardcovers, and demanded that they be removed from the Marxist Internet Archive. As Scott McLemee notes, the editions in question were “prepared largely if not entirely with the support of old-fashioned, Soviet-era Moscow gold” and consist, in large part, of arguments about the moral bankruptcy and corrupting influence of claims of private property.
The archive says it intends to comply with the takedown demand on May Day.
Justice John Paul Stevens, who left the high court in 2010, is on fire. He just released a book, Six Amendments: How and Why We Should Change the Constitution, and is now on a media tour that has thus far featured his views on campaign finance, guns, and the death penalty—the subjects of three of his proposed constitutional amendments—and, just today, marijuana. All this, and last weekend he celebrated his 94th birthday!
It might not be appropriate for Stevens to propose constitutional amendments or otherwise opine on political matters because he’s technically still an Article III federal judge (though he hasn’t been hearing cases in the lower courts as Justices Sandra Day O’Connor and David Souter have), but nevertheless the ideas he floats are worth examining. To that end, I recently wrote two op-eds related to the Stevens book tour.
The first looks at the response to the justice’s proposal to abolish the death penalty. Some have criticized him for having taken so long to reach this position, but that misunderstands what he’s saying. It’s not that capital punishment is unconstitutional—as recently as 2008 he concurred in a ruling that upheld Kentucky’s method of lethal injection—but that he feels that it’s wrong and that we need to amend the Constitution to remedy that wrong. That’s the proper response, which can be hard to understand for those who conflate law and policy.
My second piece is a quick-and-dirty critique of all six amendments, three of which are structural—(1) requiring state officials to enforce federal law; (2) doing away with political gerrymandering; and (3) eliminating state sovereign immunity—while the other three relate to individual liberties—(4) excising the Second Amendment’s protection for the right to armed self-defense; (5) allowing Congress and state legislatures to limit the money people can spend on election campaigns; and (6) outlawing the death penalty. I’m firmly against 1, 4, and 5, on balance against 6, am sympathetic to 2 but it needs to be redrafted, and support 3 (but it could go farther).
Happy belated birthday, Justice Stevens! I may not have seen things your way too often when you were on the bench, and don’t much agree with you now, but I hope that I live long enough in good health to be able to read books at your age, let alone write them.
Today’s Washington Post has an article about Obama’s new clemency project and talks about the work of former Catoite, Julie Stewart. Julie left Cato to start Families Against Mandatory Minimums (FAMM) in 1991. Here’s an excerpt from the Post story:
An Obama administration initiative to encourage nonviolent drug offenders in federal prison to seek clemency is likely to trigger tens of thousands of petitions, and the government could be processing applications for the next three years, according to lawyers and civil rights activists….
“We will get tens of thousands of applications,” said Julie Stewart, president of Families Against Mandatory Minimums. “This is a very complicated, many-layered project. It will go on until the end of the Obama administration.”…
For some of the activists, the issue is deeply personal. Stewart’s brother, Jeff, was sent to federal prison for a mandatory five years for growing marijuana.
He had cultivated 365 six-inch marijuana plants in his garage in Washington state, where the drug is now legal. She thought what he did was “stupid” but assumed he would get off with a relatively light sentence because it was “only marijuana.”
“The judge said, ‘I don’t want to give you this much time but I have no choice because Congress has determined your sentence when they passed the mandatory sentencing laws for drug crimes,’ ” Stewart said. “That was the spark that ignited my mission. I always thought judges judge and determine the punishment that fits the crime. But the judge couldn’t do anything about my brother’s sentence.”…
“When I started my group, sentencing reform was such a fringe issue,” she said. “Nobody knew anything about it and nobody cared. We’ve been working so hard for so many years to build bipartisan support. People are serving decades behind bars for nonviolent mistakes they made in their 20s.”
Over at the FAMM web site, there are profiles of persons serving long sentences in federal prisons. A few weeks ago, before this week’s clemency announcement, Julie and I discussed these issues in a Cato audio roundtable discussion. We both criticized Obama for not exercising his pardon power. Were our criticisms were picked up by the NSA? In any event, you have our permission to listen to that conversation here.
Previous post on the clemency initiative here.
While almost certainly not intended to do this, yesterday the Council of Chief State School Officers – one of the creators of the Common Core – held a revelatory panel discussion with four state superintendents. Revelatory, because Core-supporting two state superintendents said pretty much what many Core opponents have long explained: Even if the standards are of outstanding quality, the Core won’t work because “accountability” won’t be rigorously implemented.
Starting around the 30-minute mark of the event video you can start catching comments from Tennessee Supe Kevin Huffman, and New Mexico’s Hanna Skandera, lamenting past failure to translate high standards into performance, and the abandonment of Common Core testing by teacher unions. Huffmann seems especially shocked and angry that state unions he thought were on board with the Core and all its attendant accountability measures are suddenly fighting tooth and nail against it.
Said Huffmann, whose state is on the brink of delaying Core testing: “Our union leadership, which started out…in support of the standards and the assessments…has quit on the process. And they have come out against the transition to more robust assessments….I find that a shocking deviation from the past.”
Alas, had Huffman and other Core supporters been listening to opponents such as myself, or Jay Greene at the University of Arkansas, they would not have been the least bit shocked by this. For instance, as I wrote in the 2010 report Behind the Curtain: Assessing the Case for National Curriculum Standards:
[T]eachers and administrators whose livelihoods depend on public schooling are highly motivated to focus on education, and so exert outsized power over politicians on education issues. And because employees are naturally averse to management raising the standards for their performance, it is unsurprising that teachers’ unions and administrators’ associations use their political influence…to keep standards low.
I should note that in the now-blistering Common Core battle, I sympathize with a lot of the substance that teacher unionists offer against the Core, such as one-size can’t fit all; the Core is totally untested; and the standards were implemented with barely a semblance of a “democratic” process. All those very valid concerns aside, however, I also don’t think you can expect people to willingly subject themselves to outside accountability if they don’t have to. It’s not evil. It’s just human.
Anyway, Jay Greene has offered pretty much the same analysis, especially to conservatives who have long decried the outsized influence of public school employees over public schooling politics. As he colorfully put it in 2011 testimony to the U.S. House of Representatives:
Second, to the extent that there will be change in a nationalized system of standards, curriculum, and assessments, it will be directed by the most powerful organized interests in education, and probably not by reformers. Making standards more rigorous and setting cut scores on assessments higher would show the education system in a more negative light, so teachers unions and other organized interests in education may attempt to steer the nationalized system in a less rigorous direction. In general, it is unwise to build a national church if you are a minority religion.
Mr. Huffman, you were warned.
So that folks like Mr. Huffman – and the whole country – can avoid future bracing slaps in the face by the political process, perhaps a visual aid would help to understand the likely effects of top-down efforts to impose “rigorous” standards and accountability. Thankfully, my long-ago introduced “Top-Down Standards Outcomes Matrix” is just such an aid:
So be shocked no more, Core supporters! It will now take but a moment to see why top-down plans won’t work out the way you want.
A new Rasmussen poll finds that just 19 percent of voters think that the federal government “does the right thing nearly all the time.” The poll also finds that two-thirds of voters think that the government “looks out primarily for its own interests.”
These public perceptions about the federal government are correct, as frequent stories in the Washington Post confirm. Today, the newspaper has front-page stories about how the Navy’s Blue Angels may have been a “hotbed of hazing, sexual harassment and other forms of discrimination,” and how the Department of Homeland Security (DHS) has been apparently acting corruptly at the highest levels.
Regarding the Blue Angels, the Post reports:
… an internal military document that a Navy official inadvertently e-mailed to a Washington Post editor states that a former member of the Blue Angels filed a complaint last month accusing [Blue Angels commander Gregory] McWherter of promoting a hostile work environment and tolerating sexual harassment. The complaint described an atmosphere rife with sexually explicit speech, the open display of pornography and jokes about sexual orientation. The Navy officer is the latest in a string of senior military commanders to come under investigation for sexual misconduct or other misbehavior.
It does sound like top Pentagon officials are taking a harder line than in the past against such bad behavior, no doubt due to all the negative press these sorts of incidents have been generating.
That’s why I find the new DHS revelations more disturbing. The Post story indicates that rather than trying to stomp out bad behavior, top DHS officials were collaborating in the appalling rule-breaking of its former inspector general (IG), Charles Edwards.
IGs are the internal watchdogs that the public counts on to keep the massive $3.5 trillion federal government operating with at least some degree of propriety. But, as the Post reports, the DHS IG was apparently working with top DHS officials to selfishly undermine the public trust for narrow political ends.
The top watchdog for the Department of Homeland Security altered and delayed investigations at the request of senior administration officials, compromising his independent role as an inspector general, according to a new report from a Senate oversight panel.
Charles K. Edwards, who served as acting DHS inspector general from 2011 through 2013, routinely shared drinks and dinner with department leaders and gave them inside information about the timing and findings of investigations, according to the report from an oversight panel of the Homeland Security and Government Operations Committee.
A year-long bipartisan investigation by the panel also found that Edwards improperly relied on the advice of top political advisers to then-Homeland Security Secretary Janet Napolitano and acquiesced to their suggestions about the wording and timing of three separate reports.
… Edwards was particularly close to members of Napolitano’s inner staff and often communicated more with them than with his own senior leadership team, the Senate inquiry found.
… Federal law requires inspectors general to remain independent of the agencies they oversee and to seek legal advice only from their own counsel or another IG’s counsel … [But] the Senate report said Edwards conferred regularly with both [DHS general counsel John] Sandweg and Noah Kroloff, Napolitano’s chief of staff, at the same time he was allegedly pushing to delete embarrassing information from the Secret Service report.
So if the new bipartisan report is correct, the DHS IG was an enabler of bad behavior in the DHS, rather than an investigator of it. He aided top officials in pursuing their selfish political ends, rather than calling them to task. To me, that’s corruption and it’s disgraceful. Too often, federal officials work against the public interest, not for it, and that is one reason why we should downsize the government.
Justice Scalia could hardly have set the rhetorical stage more vividly: “[In this] jurisprudential twilight zone… we confront a frighteningly bizarre question: does the Equal Protection Clause of the Fourteenth Amendment forbid what its text plainly requires?” Some readers will be let down to discover on proceeding further that the case doesn’t actually turn on that question: all eight participating Justices agree at least formally that the issue this time was not whether Michigan voters could end racial preferences at all, but instead whether they chose a method of doing so (constitutional amendment, in this case) that itself survives Equal Protection scrutiny.
A technicality? To me, it made the case far more interesting. So many big cases have tackled the constitutionality of racial preferences as a matter of substance that anyone who cares has had ample opportunity to reflect on those big questions. By contrast, there’s been far less attention to the Hunter/Seattle “political process” line of Equal Protection cases, by which the Court occasionally and selectively intervenes to strike down democratic processes as unfair after they arrive at the “wrong” policy conclusions. (Hunter v. Erickson (1969) and Washington v. Seattle (1982) descended from Reitman v. Mulkey (1967), in which the Warren Court decided 5-4 that California voters had no right to enshrine freedom of association in their state constitution as a way of heading off then-new “fair-housing” enactments.)
Scalia and Thomas regard this line of cases (and I agree) as unprincipled, un-administrable, and lacking in any particular stopping point: the “radical logic” of Hunter and Seattle (to quote the syllabus) would lead toward general judicial review of any and all government action on the basis of whether it has “disparate impact” on minority residents, no matter how unintended. The two Justices are accordingly ready to overrule this bad line of cases directly as a mistake of its era; the plurality, for better or worse, are not (yet) willing to do so, and instead recharacterize the cases’ facts to limit their reach in ways that neither Scalia nor Sotomayor find logically defensible.
Sotomayor’s mantra “Race matters” is likely to thrill some readers — it has already been in use for a while as a catch-phrase in academia and elsewhere — but as a device for organizing a legal opinion, it’s at best – how shall we say? – imprecise. All the Justices agree that race matters, but disagree on how. As Ilya Somin and David Bernstein point out at Volokh Conspiracy, Sotomayor also gerrymanders the word race itself in a way convenient to her purposes, using it to include Hispanics (who, as official forms remind us, “can be of any race,”) while breathing not one word about Asian-Americans (a more widely racially classified group whose situation of being both historically disadvantaged and discriminated against in university admissions cries out for recognition).
“Race matters,” indeed.
[adapted from Overlawyered]
Did you know that the White House has a fleet of 19 helicopters? The Washington Post today discusses efforts to replace this fleet of aging Sikorsky’s with 21 new vehicles yet to be procured. The fleet is used by the president, vice president, and cabinet secretaries.
The size of the helicopter fleet seems excessive. For one thing, I understand that cabinet secretaries have become mere minions to presidential aides, so I’m surprised that they would generally need access to such high-cost transportation.
The Post story focuses on the $3.2 billion flushed down the drain the last time the White House tried to replace its helicopter fleet:
The last time the Pentagon tried to upgrade the president’s coolest ride — the fleet of helicopters that drop him at his doorstep on the South Lawn of the White House — it didn’t go well. Costs doubled. Delays sparked ridicule, then outrage. And President Obama, then just a few weeks in office, said it was “an example of the procurement process gone amok” before defense officials killed the program outright.
It was an embarrassing debacle that cost $3.2 billion and produced no usable helicopter, turning an iconic symbol of presidential power into an illustration of government waste and incompetence …
In the wake of the Sept. 11, 2001, attacks, replacing the helicopters — which fly under the call sign “Marine One” when the president is aboard — became a priority for the Pentagon. In 2005, a team led by Lockheed Martin won the contract, beating out Sikorsky, which built the helicopters currently used in the Marine One program.
But soon it became a case study in how not to build a helicopter, analysts say. The design became so overloaded with new requirements — to be able to hover longer and at high altitudes, travel great distances without refueling, and defend against missile attacks — it essentially became an impossible task. “Too many people had a seat at the table,” said Richard Aboulafia, an aviation analyst at the Fairfax-based Teal Group …
Rep. Mac Thornberry (R-Tex.), the vice chairman of the House Armed Services Committee, said that the last effort failed because “it was almost like they were trying to cram rotors onto Air Force One. This time, there has been careful monitoring, and the process seems much more realistic thus far” …
Some are skeptical that once the helicopters start being built, the Navy, the White House, the Secret Service or any of the other agencies involved will be able to resist restoring expensive features that had been scrapped for savings and efficiency. “Some bright person is going to say, ‘I know we took it out in order to get the contract signed in the first place, but I think we really underestimated our needs,’” said John Pike, the director of GlobalSecurity.org. “Sikorsky will sell you as much helicopter as you’re willing to pay for. And nothing is too good for the president. So you have to be concerned that they have temporarily scaled it back, but that it will bloat up again down the road.”
Sen. Charles E. Schumer (D-N.Y.), who has been pushing for Lockheed to get the contract because much of the work would be done at its facility in Upstate New York, said that the cost will be heavily scrutinized.
As most people know, the Pentagon has had chronic cost overruns in procurement for decades. It is interesting that the agency has yet to solve these problems because military leaders surely do not enjoy being repeatedly lambasted by Congress and the media.
The Pentagon promises to get the new helicopter project right, and Senator Schumer says that he is watching closely. So taxpayers can breathe easy that at least this military project will come in on-time and under-budget. :-)
Note on Downsizing Government: Nicole Kaeding is updating this essay on government cost overruns, so look for that in coming months.
Today, James Cole, Deputy Attorney General of the United States, announced a new “Clemency Initiative.” The gist is that the Obama administration is soliciting more clemency petitions as a part of its “Smart on Crime” plan to address our “vastly overcrowded prison population.”
According to Cole, Obama is anxious to commute more prison sentences, but something has been amiss thus far. To respond to Obama’s new directive, Cole tells us that a new team of lawyers will be taking over the Office of the Pardon Attorney within the Department of Justice and the new team is going to expedite clemency applications for Obama’s consideration.
The new initiative is aimed at inmates who meet the following criteria:
1. Presently serving time federal prison. (Inmates in state prison ineligible).
2. Would have received a lesser sentence if current sentencing rules had been in place when they were sentenced way back when.
3. No significant ties to gangs, cartels, or mafia families. “Low-level” offenders.
4. No significant criminal history.
5. Record of good conduct while in prison.
6. No history of violence prior to, or during, prison stay.
7. Must have already served 10 years of prison sentence.
The administration is really hyping this initiative and raising expectations about dramatic moves by Obama as this gets underway. I remain skeptical for a few reasons. First, I question the narrative that it has only recently occured to Obama that there ought to be more meritorious clemency petitions on his desk.
Second, I note that the administration is expecting to receive thousands of petitions and applications. That language is important. Later on, Obama’s people may say, “As expected, we received thousands of applications! We never said there would be hundreds or thousands of commutations.”
Third, there’s just no way of telling how the criteria are going to applied. What are “significant ties” to gangs? “Significant” criminal history? A “history” of violence? For example, maybe there is a guy who was caught driving a truck full of marijuana. Maybe he was sentenced to 20 years in prison because of the amount of drugs. Suppose he had no real ties to any gang or cartel and suppose he has already served 12 years for the non-violent offense. Good candidate? Wait, there’s a problem. While in prison, he was disciplined a few times for fighting with other inmates. (The prison authorities couldn’t tell whether the candidate was only defending himself, as he claimed, or not.) According to a strict reading of the criteria, the candidate’s petition will fail #5 and #6 above. But is it wise to keep a person like this locked up?
Obama deserves some credit for turning his attention to clemency. But we will have to await his actions. For many non-violent drug offenders, the wait has already been too long.
Right on cue, the New York Times editorialized this morning against yesterday’s Supreme Court decision upholding the right of Michigan’s citizens to amend their constitution to prohibit the state from engaging in affirmative action, which they did in 2006 by passing, by a large margin, a proposition prohibiting racial, gender, ethnic, and national origin preferences in public employment, education, and contracting. The Times was not alone, of course. NPR’s lament this morning was a solo interview of Lee Bollinger, president of my undergraduate alma mater, Columbia University, and the defendant in the 2003 Gratz and Grutter affirmative action decisions when he was president of the University of Michigan.
It was a bad day for affirmative action, but a good day for the Constitution. Yet neither of those commentaries, nor any of the five opinions that issued from this split decision, came to terms with the discrimination that is inherent and hence inescapable in government undertakings as such, and is at the core of this problem today.
Among other things, the editorialists at the Times note that “the justices disagreed about whose rights were at issue: the minorities who would be affected by the ban or the majority of the state’s voters who passed it.” Justice Kennedy, writing for a three-judge plurality, sided with the voters, taking no position on the constitutionally of race-conscious public practices. Justice Sotomayor, joined by Justice Ginsburg in dissent, wrote that “Our Constitution places limits on what a majority of the people may do,” such as when they pass laws that “oppress minorities,” the Times adds.
Conflicting rights? If there were a right to preferential treatment by the state, the Constitution’s Equal Protection Clause would have no meaning—as Justice Scalia, joined by Justice Thomas, made clear in his concurrence. But that’s not the right the plaintiffs in this case brought before the Court. Their claim, rather, was that by prohibiting the state from considering only certain factors—race, for example, in university admissions, but not others, such as legacy—those with such characteristics are disadvantaged vis-à-vis the latter because, to be given preferences, they must not only win in the legislative arena, but must also overturn a state constitutional amendment; all of which amounts to unequal treatment in violation of the U.S. Constitution’s Equal Protection Clause.
The argument is not without merit: In fact, it persuaded eight of the fifteen Sixth Circuit judges who were sitting en banc below, producing five dissenting opinions. And the issue cannot be resolved, of course, unless we go to the underlying question of whether preferences themselves violate equal protection, which they do, but which Kennedy, unlike Scalia, was unwilling to say.
The deeper issue, however, unaddressed by all, is why we stop at race, gender, ethnicity, national origin…and sexual orientation, marital status, appearance, socio-economic background, etc., etc. Why, that is, can the University of Michigan take legacy, or athletic ability, or musical talent into consideration when making admissions decisions, but not race, gender, etc.? Is legacy permitted because that’s likely to lead to more alumni contributions, and athletic and musical talent for the same reason, plus the long history of college football and marching bands? For that matter, why does academic aptitude play so prominent a role in admissions decisions? Don’t the parents of the academically less gifted pay taxes to support the University of Michigan too? The dirty little secret of public higher education, of course, is that it amounts to a massive transfer of wealth from the lower to the upper classes of any state in which we find it, as Justice Thomas pointed out in his Grutter dissent.
And so we come to the point of it all, to the discrimination that is inherent and hence inescapable in government undertakings as such. All public institutions, like their private counterparts, have to discriminate in countless ways if they’re to function. But whether they’re educating, hiring, contracting, what have you, they belong to all of us and so may discriminate only on grounds that are narrowly tailored to serve their functions. But what are those functions—and those grounds? Education may be the main function of a public university—hence the presumptive centrality of academic merit as a legitimate ground for discrimination. But are there other functions? Is football central to the function of a university—and hence athletic ability a legitimate ground for discriminating? Tell that to another of my alma maters, the University of Chicago.
Plainly, if we go to these core questions—these First Principles—this argument can go either way: If athletic ability can justify discriminating in favor of an applicant—and against another—then why may not a public university’s admissions officers take race into consideration, just like a private university may—at least in an ideal world? The reason, doubtless, is because of our long history with racial and, to a lesser extent, gender and ethnic discrimination. Under the Equal Protection Clause, those factors are singled out for special consideration, understandably, just as sexual orientation today increasingly is. But the principle of the matter is perfectly general. If, before public decisionmakers, all must be treated equally, meaning that discrimination must be narrowly tailored to serve a public institution’s function, then a decisionmaker’s discretion must be limited.
The broader conclusion, however, is that there no clear, undisputable answers to these questions. But what is clear is that much of this could be avoided—not eliminated, as we will always have a public sector—if we did less through the public sector. Why, for example, is government involved in higher education—or in education generally, for that matter? Public universities should not be permitted to discriminate on the basis of race, which is what affirmative action amounts to, but private universities ought to be free to engage in all the affirmative action of whatever kind they wish. There’s the solution to the problem: once again, less government.
In February, I highlighted the Department of Energy’s issuance of a $6.5 billion loan guarantee to build a nuclear power facility in Georgia. At the time, the project was behind schedule with cost overruns, and the project’s owners had already secured private financing. Yet DOE issued the loan guarantee anyway.
Now we’ve learned that DOE’s actions were even more foolish than previously thought. DOE waived the credit fees charged to the company—which are meant to offset the risk to taxpayers—when it issued the loan.
According to the Washington Examiner:
“Developers of a Georgia nuclear project didn’t have to pay millions of dollars in fees designed to prevent risk for taxpayers when it secured $6.5 billion in loan guarantees from the Energy Department in February, the agency confirmed Tuesday to the Washington Examiner.
The DOE calculated a zero dollar “credit subsidy fee,” which protects taxpayers if developers default, for electric utility Georgia Power – a subsidiary of Southern Co. – and Oglethorpe Power Corp. to spur completion of two large, next-generation nuclear reactors at the Vogtle power plant in Waynesboro, Ga.”
This isn’t the first time that DOE has been criticized for the handling of its loan guarantee programs, and thus risking losses to taxpayers. In 2012, the Government Accountability Office said, “if DOE underestimates these costs [credit subsidies], taxpayers will ultimately bear the cost of default.” GAO said that DOE did not follow its own processes for handling applications “potentially increasing the taxpayer’s exposure to financial risk from an applicant’s default.”
Energy loan guarantee programs should be eliminated, but closing them doesn’t seem likely under the current administration. But you would think that even this administration would favor DOE following sound lending practices to try and minimize taxpayer losses.
Most Americans dislike the income tax, now more than a century old. The rates are too high. The provisions are unfair. The record-keeping is onerous. The revenues are wasted.
But there are fans, certainly, such as the politicians of both parties. What good would it do to serve in Congress if you didn’t have money to spend?
The beneficiaries of the politicians’ largesse also share in the income tax lovefest. Uncle Sam needs money to write checks. He can borrow, but there’s a limit to the credulity of investors. Borrow too much and they might doubt Washington’s ability to repay.
Then there are the fans of expensive and expansive government. Never mind the endless mess created by Uncle Sam. Something he does must work!
More dangerous may be the social engineers. For instance, Yale economic professor Robert J. Shiller suggested using the income tax to mitigate “some of the worst consequences of income inequality.” He proposed indexing taxes to income inequality.
It’s a genuinely nutty idea. Inequality measures are sensitive to data distortion. Moreover, they incorporate no moral judgment as to how the inequality arose. Were opportunities obstructed and systems manipulated, or did a generally free society operate naturally and deliver ever-changing income and wealth patterns?
“Worse, though, is the weird presumption that seizing private wealth from mostly productive taxpayers and giving it to political operators noted for their electoral skills rather than economic judgment would somehow remedy financial disparities. There is no evidence that increasing Washington’s resources would yield greater social or economic justice, improve economic efficiency or growth, or make people wealthier or freer.”
To the contrary, experience demonstrates that the majority are likely to end up worse off. Extensive bureaucracies soak up much money before it leaves government hands. Cash is tossed at influential interest groups. Benefits for the poor are dwarfed by middle class welfare, such as Social Security and Medicare.
Providing more money to expand these and other programs is supposed to close the income and wealth gaps?
Unfortunately, the income tax creates additional harms. By taxing work, the levy discourages work. Moreover, credits and deductions give legislators the opportunity to play social engineers.
The greater the resulting complexity, the more wealth wasted in compliance activities. There is no financial privacy, since Uncle Sam is empowered to rummage through everyone’s personal affairs.
Moreover, as Edwards pointed out, the entire enforcement process is built around a denial of due process. From start to finish, the burden of proof falls on the taxpayer, not the government.
Contrast this with the sales tax: You pay it when you purchase something and you are done with it.
Even social engineering usually is at a minimum. Politicians don’t claim that they can use the sales tax to solve the “problem” of income inequality.
The first income tax in U.S. history was proposed in 1814 to fund the ill-fated War of 1812. In 1861 a desperate national government turned to the income tax to fund its war to conquer the southern states seeking to separate.
A search for revenue to replace declining tariff collections led to another income tax in 1894, but the Supreme Court declared the levy unconstitutional. Fifteen years later, Congress proposed a constitutional amendment, which was approved on February 2, 1913, during the heyday of the Progressive Era. From modest beginnings it has grown into a monster.
There is a necessary role for government, but it is far more limited than today’s Leviathan. Moreover, today’s income tax has made it far too easy for politicians to mulct the public. The income tax has greatly contributed to Americans’ steady and serious loss of liberty.
Daniel R. Pearson
Japan and the United States have undertaken a series of high-level negotiations over the past several weeks in an effort to reach a bilateral agreement that could lead to completion of the 12-country Trans-Pacific Partnership (TPP). Japanese Minister of State for Economic and Fiscal Policy, Akira Amari, has met with U.S. Trade Representative Michael Froman both in Tokyo and Washington in an effort to resolve differences prior to President Obama’s visit to Japan this week. Reports indicate that the talks have made some progress. However, large gaps remain that are expected to preclude any breakthrough announcement when the president meets on April 24 with Japanese Prime Minister Shinzo Abe.
The stated obstacles to concluding the talks have been Japanese reluctance to eliminate tariffs on sensitive agricultural products – beef, dairy, pork, rice, sugar and wheat – and U.S. reluctance to eliminate the 2.5 percent tariff on automobile imports and the 25 percent tariff on light trucks. Each side is very much in the right to ask the other to change these protectionist policies. They have the effect of stifling comparative advantage. They reduce economic welfare by raising consumer costs while curtailing opportunities for efficient producers to make export sales. Ending these trade restrictions would not only help the country requesting the changes, but would also help the economy of the country making the change. What’s not to like about this deal?
Stepping back from the details of the requests and offers, the real problems facing each country are the underlying political realities. Japanese farmers strongly resist reductions in the level of support they receive from tariff protection, and have done so consistently for decades. Those farmers also have been consistent and dedicated supporters of Prime Minister Abe’s Liberal Democratic Party (LDP). If Japan’s agricultural community becomes sufficiently unhappy with the Abe administration, it is entirely possible that his government could fall. Nonetheless, Prime Minister Abe seems willing to push agricultural policy in the direction of reform. He knows that updating Japan’s agricultural policies is an essential condition for becoming a member of the TPP.
Political considerations in the United States are somewhat different. Yes, the automobile industry would give up tariff protection on imports from Japan. But the reality is that a 2.5 percent duty isn’t all that high in the first place, and the protective effect of the 25-percent duty on light trucks has been undermined significantly by Japanese firms’ investments in U.S. manufacturing facilities. A whole lot of “Japanese” vehicles already are built in the United States. Nonetheless, the U.S. auto industry and its workers are not enamored of tariff reductions, and the Obama administration no doubt keeps this in mind.
The real reason for the impasse is lack of fast-track negotiating authority (also known as Trade Promotion Authority, or TPA) that would allow the TPP agreement to be submitted to Congress for an up-or-down vote. Fast-track arrangements that prohibit amendments have been used for congressional consideration of trade agreements since the Trade Act of 1974. This process was developed in response to the failure of Congress in the 1960s to adopt key provisions of the Kennedy Round agreement dealing with customs valuation and antidumping procedures. The Kennedy Round’s tariff reductions were approved, but there had been no prior congressional commitments to limit amendments, so it wasn’t possible to find the votes needed to pass the controversial provisions. Any controversial parts of a TPP agreement that conceivably could be presented to Congress in the absence of fast track also would prove difficult (impossible?) to enact. Frankly, TPP may have a hard time being approved by the current Congress even if fast track already was in place.
What’s more, opposition to passage of fast-track authority is very broad and deep within the president’s Democratic Party. Anti-fast-track forces include not only organized labor and many left-leaning civil-society organizations, but also Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi, and many fellow Democrats in Congress. Although the Obama administration supports the concept of fast track, it has not yet endorsed a specific legislative proposal. It is noteworthy that the administration chose not to support the bipartisan approach introduced in January this year by then-chairman of the Senate Finance Committee Max Baucus (D-MT), Ranking Member of Senate Finance Orrin Hatch (R-UT), and House Ways and Means Chairman Dave Camp (R-MI). The new Finance Committee chairman, Sen. Ron Wyden (D-OR), has indicated that he is considering how or whether to propose fast-track legislation, but appears to be on a timetable that would delay introduction of any bill until at least after the November 2014 election.
The administration has given no indications that it is making progress in overcoming Democratic resistance to fast track; recent objections by members of Congress timed to coincide with the president’s Asian trip suggest that the administration may be losing ground. The April 21 op-ed in the Los Angeles Times by Reps. George Miller (D-CA), Rosa DeLauro (D-CT), and Louise Slaughter (D-NY) amounts to a kick in the pants as the president sets off on his diplomatic mission. (It makes one wonder what these Democrats would be saying if the president was a Republican rather than a member of their own party.) There is no precedent from the administration’s first five years in office in which the White House pushed back effectively against such strong objections from key parts of its political base. It seems unlikely they will find a way to do so with fast track, especially since this could be seen as favoring Republicans over Democrats. That meaningful progress toward trade liberalization could be put on hold at least until a new administration takes office in 2017 is reason for concern.
Japanese officials no doubt have been paying close attention to U.S. trade politics. Prime Minister Abe can see that United States is not in a terribly strong position to push TPP to a completely trade-liberalizing conclusion. But President Obama is coming to Tokyo and it’s necessary to do something. Should Japan go ahead and commit to eliminate agricultural tariffs before the United States even has fast-track authority? Does the United States really want to conclude an agreement at this point when U.S. negotiators appear to have only limited credibility and leverage, or have the recent rounds of bilateral TPP talks just been for show? If Japan takes the plunge and agrees to painful cuts now, what happens if it becomes clear following the November election that their U.S. partners are not able to move forward? Will the future of the Abe government be at risk?
The net result is that Prime Minister Abe appears to have backed away from what may have been his intention to pursue a truly far-reaching reform of Japan’s agricultural policies. He can’t afford to put everything on the table when he can see that the U.S. side simply isn’t in a position to deliver.
It is unfortunate that a presidential trip to Japan – certain to raise expectations – has come at a time when the United States has relatively little negotiating leverage. Pressure to achieve a deal apparently has led U.S negotiators to agree that Japan would be allowed to maintain a significant degree of agricultural tariff protection. Even though the TPP talks might not be concluded for several years (if ever), important ground now has been lost. It will likely be impossible to reclaim a position of greater liberalization later in the course of the negotiations. It also is unclear whether the other 11 nations involved in TPP will be willing or able to keep the process going for several years in hopes that the United States eventually will get its act together. Perhaps soon it may be time to think about how to maintain the hope for a broad Pacific trade agreement that might be achieved at some point further in the future.
Last week, the New Hampshire Supreme Court heard oral arguments in Duncan v. New Hampshire, concerning the constitutionality of the “Live Free or Die” state’s trailblazing scholarship tax credit program. The Cato Institute filed an amicus brief in support of the program. Over at the Friedman Foundation’s blog, I summarize the law’s history and the primary legal arguments on each side, including legal standing, public versus private money, and the use of public funds at religious schools. I conclude by outlining four possible outcomes:
1. The court rules that the plaintiffs lack standing. In this case, the trial court’s opinion would be overturned and scholarship students would be able to attend the school of their choice, religious or secular.
2. The court rules in favor of the program on the merits. That would mean either the court holds that tax credits are private money or that public money may be spent at a religious school so long as it reaches the schools in a manner that is indirect and incidental to the choices of parents. As in the first scenario, scholarship students would be able to attend the school of their choice, religious or secular.
3. The court upholds the trial court’s decision. In this case, the tax-credit scholarship program would continue as it has in the last year. The trial court forbid the use of scholarships at religious schools but allowed their use at secular private schools, out-of-district public schools, and homeschool environments. In this scenario, the Institute for Justice likely would challenge the decision in federal court for violating the Free Exercise clause of the First Amendment since such a decision would require legislative hostility toward religion rather than neutrality.
4. The court rules against the program and rejects the severability clause. The trial court found that the severability clause that the legislature had added was valid, therefore the program could continue for parents selecting secular schools or homeschooling. The state supreme court could reach the same conclusion on the merits, but reject the severability clause. This would be the most devastating outcome for educational choice in New Hampshire, as it would completely obliterate the tax-credit scholarship program.
Ideally, New Hampshire’s Supreme Court will follow the precedent of the U.S. Supreme Court and the Arizona Supreme Court by holding that taxpayers’ money is their own until it reaches the tax collector’s hand.