Peter Van Doren
An article on page 1 of Thursday’s Wall Street Journal describes the financial problems faced by some private infrastructure owners because of reduced demand from the Great Recession. The story features the Foley Beach Express bridge in Alabama built as a toll concession in the early 2000s. The bridge filed for bankruptcy in July after traffic volumes were lower than projections leaving taxpayers on the hook for millions.
How can private infrastructure financing manage demand uncertainty? Cato’s Regulation answered the question in 2002 with an article entitled “A New Approach to Private Roads.” Traditional private infrastructure concessions utilize a Build-Operate-and-Transfer contract in which a private company builds and subsequently collects tolls and operates a facility for a specified term (20 to 30 years). At the end of the contractual term, ownership of the infrastructure is transferred to the government. The problem with this contractual design is that it involves a combination of “front-loaded investment and substantial uncertainty about demand for the road.” This demand uncertainty increases the probability that revenues fall short of required bond payments causing insolvency.
The authors replace the traditional contract with what they term “Present-Value-of-Revenues” franchising. This method gives the concession to the firm that bids the lowest present value of toll revenues. The franchise is not for a fixed term but ends instead when the present value of the bid is reached. If toll revenues fall short of projections, the term of the franchise lengthens and bond payments are delayed contractually. If revenues are higher than expected, the government can buy out the concession for the difference between the revenues received and the present value bid. The latter contingency avoids the problems found in Orange County (California) Route 91, where traffic volumes were higher than expected, but contract terms barred the county from increasing the capacity of the toll road.
For a good overview of infrastructure and prospects for more private involvement see Chris Edwards’ recent essay at Downsizing Government.
Ted Galen Carpenter
A leading foreign policy scholar once described alliances as “transmission belts for war,” mechanisms for converting local conflicts into far wider and more destructive wars. We now have a graphic example of that danger in the U.S. security treaty with Japan.
Tokyo is embroiled in an emotional territorial dispute with Beijing over a chain of uninhabited rocks in the East China Sea, which Japanese call the Senkaku Islands and Chinese call the Diaoyu Islands. Although Japan administers those islands, Beijing insists that both maritime precedent and history confirm that the territory is rightfully part of China.
That dispute has existed for decades, but tensions have been escalating over the past two years, and have now spiked dramatically. Late last week, Xinhua, the official Chinese news agency, published a map of a newly established East China Sea Air Defense Identification Zone, which includes the airspace over most of that body of water—including the disputed islands. China’s Defense Ministry also released identification rules for aircraft in the zone and stated that “China’s armed forces will adopt emergency measures to respond to aircraft” that don’t abide by those rules. Over the weekend, the Chinese air force began patrols to emphasize the point.
It was hardly a surprise that Japan did not respond well to Beijing’s proclamation. A Japanese Foreign Ministry spokesman stated bluntly that the islands were part of Japan and that Beijing’s actions were an unacceptable attempt to change the status quo. The move was “very dangerous” and could lead to unforeseen, but clearly undesirable, outcomes.
A nasty spat between Asia’s two strongest powers, and the countries with the world’s second and third largest economies, is obviously troubling. But Washington did not help matters by weighing-in immediately on behalf of its Japanese ally. Secretary of State John Kerry not only admonished China to exercise restraint, but emphasized that the United States was “steadfastly committed to our allies and partners.” Officials provided pointed reminders of Washington’s position that the U.S.-Japan security treaty covers the Senkaku Islands. Secretary of Defense Chuck Hagel rebuked China for “a destabilizing attempt to alter the status quo in the region.”
There are a couple of worrisome aspects about the U.S. position. First, although China’s actions are needlessly provocative, Beijing is not the only party to disrupt the status quo. The Japanese government’s decision last year to nationalize the islands from private owners certainly did so. Yet U.S. officials had little to say about that move. Second, Washington’s stance on the underlying territorial dispute is contradictory, if not disingenuous. U.S. leaders simultaneously insist that they do not prejudge the resolution of the territorial matter and emphasize that the security treaty covers the islands. But the treaty applies to the islands only if the United States regards them as Japanese territory. That position definitely prejudges the issue.
Although Japan should be strong enough to defend its own security and national interests without U.S. involvement, one can make the case that protecting Japan and helping to keep it out of Beijing’s orbit is also a legitimate interest of the United States. Whether it is important enough to risk war with China is a much more difficult question, but it is folly to risk such a war merely to back an ally in a murky territorial dispute over some uninhabited rocks. Yet that is a danger we now incur.
This episode is a textbook example of why the United States should use only informal security arrangements, not written, long-term treaties. The former approach gives Washington far greater flexibility regarding the best response to changing conditions. History will not be kind to U.S. leaders if a security treaty causes this country to end up in a military confrontation with China over such meager stakes as the Senkaku/Diaoyu Islands.
America’s Liberal Persian Gulf Friend: An Uneasy Kuwait Confronts Domestic Critics and Regional Threats
Kuwait City, Kuwait—Kuwait is a shrimp among whales in the Middle East. It lies among three much larger states, Iran, Iraq, and Saudi Arabia, all of which have the potential, noted one American diplomat, of swallowing the small Gulf kingdom. Indeed, Baghdad attempted to do precisely that in 1990.
Although more than two decades have passed, Kuwaitis remain grateful to the U.S. They know they would be the 19th province of Iraq absent American military support. The Sheraton, where I typically stay, includes photos of the damage wreaked by Iraqi invaders.
Today Iran looms as the larger threat, though Kuwaitis actually are less concerned about nuclear issues. When your neighbor holds a gun to your head, who cares how big it is, quipped one. With a heretofore well-integrated minority Shia population, most Kuwaitis actually worry more about the Shia-Sunni battle being fought especially vigorously by Iran and Saudi Arabia.
However, most Kuwaitis appear to back the Obama administration’s diplomatic approach. They know that military strikes are an alternative to negotiations, and war would be disastrous. Moreover, Kuwaitis hope future talks ultimately could ease tensions in other areas. Kuwait’s assent offers an important affirmation of Washington’s strategy.
Regional events, not just Iranian threats but the Arab Spring bust, have helped reduce domestic political tensions. Kuwait is among the Gulf’s most liberal societies, enjoying a powerful parliament, vigorous media, and independent population. However, in recent years the political process ran aground, putting both openness and stability at some risk.
In July, Kuwait held the third National Assembly poll in 17 months. Last year the opposition boycotted the election in protest over changed election rules. Demonstrations erupted, sparking a sharp government crackdown. Fractures in what remains a small political community seemed to widen dangerously.
However, the protests have stopped. Enthusiasm is difficult to sustain, while small political communities possess powerful tools to discourage active opposition. Moreover, noted one American observer, there appears to be increased fear of jeopardizing “this island of stability.” There’s a lot to complain about in the current system, but far more could be lost. Indeed, after Islamists won control of the National Assembly in February 2012, it was the hereditary monarch who blocked proposed legislation to base law on Sharia, bar construction of any new churches, and execute blasphemers.
Dr. Sami al-Faraj, a well-connected consultant who advises the royal family, among others, believes that creating a vibrant, opportunity-oriented private sector is the key to permanently easing political tensions. Abundant oil wealth has created a welfare society in which most everyone is dependent on the state, creating what one analyst calls “a transactional state.” The royal family’s control of so much wealth discourages measures to promote private entrepreneurship and democratic governance. As a result, al-Faraj says his country is “continually in a crisis management mode.”
The Middle East has dramatically demonstrated how democracy can become a minefield for liberal, tolerant societies. While Kuwait is not Washington’s most important ally in the region, it is America’s strongest Arab friend. And probably the Gulf’s most free society. Kuwaiti success in moving in a direction that is both liberal and democratic would offer an important model for its neighbors. We should wish the Kuwaitis well.
Christopher A. Preble
Rumors abound that budget negotiators are nearing a possible deal to reverse spending cuts required under the 2011 Budget Control Act (BCA).
Senate Republican Leader Mitch McConnell is hoping his colleagues will stand firm and reject any deal. He told reporters last week that it would be “a bad idea to revisit a law that’s actually working and reducing spending.” But he is competing with military spending advocates such as Reps. Buck McKeon and Mac Thornberry. They claim that the dangers confronting the United States today are graver than ever, that the costs to address these threats are rising and cannot be contained, and removing the defense spending caps is necessary to ensure the United States remains safe and secure.
They are wrong on all counts.
First, some context on spending: The Pentagon’s base budget, excluding the costs of the ongoing war in Afghanistan, remains 26 percent higher than in 2000, in inflation-adjusted dollars. Under the spending caps established by BCA, Pentagon spending would average around $528 billion per year from 2013 to 2021, over 18 percent higher than during a typical year in the Cold War.
This is curious considering the threats facing the United States were far greater then. The threats today are declining, not rising. In fact, all forms of violence, from cataclysmic great power wars, to civil wars and ethnic conflicts, have declined to historic lows.
To be sure, some insurance against potential threats is wise, in the unlikely event that current favorable trends are reversed, but we can maintain our safety while spending less because technological advances allow today’s military to address possible threats with fewer people and fewer platforms. U.S. naval vessels have far more striking power than the early 20th century dreadnaughts, just as precision-guided munitions have rendered today’s aircraft at least 10 times more capable of striking targets as their dumb-bomb-dropping precursors. To be sure, these new platforms are much more expensive, but the military services and their suppliers are more cost-conscious today than a decade ago, as when the Air Force recently killed a plan to outfit the next-generation bomber with a $300,000 kitchenette. Such excesses might be resurrected if BCA opponents succeed in changing the law.
The reforms extend well beyond procurement. In 2011, then-Chairman of the Joint Chiefs of Staff Mike Mullen admitted that the military hadn’t been forced “to make the hard choices” because they had all the money they requested, plus a little more. Today, the spending caps are forcing the services to prioritize.
For example, austerity has focused attention on the military’s antiquated compensation system. Today’s soldiers, sailors, airmen and Marines are better compensated than those who served during World War II or the Cold War. And they should be. A modern military must compete to attract and retain the best and the brightest, and that costs money.
The current trajectory of personnel costs is unsustainable, however. Pay and benefits are already eating into other Pentagon spending accounts, including procurement, operations and maintenance, and training. The net effect may impair military readiness. Now, even outspoken military spending advocates, such as Reps. Duncan Hunter and Adam Kinzinger, both veterans of the post-9/11 military, have endorsed changes, including expecting working-age retirees to pick up more of their health care costs.
There is, in fact, broad, bipartisan support for proposals that touch what were once thought of as the third-rails of Pentagon politics. In addition to compensation reform for active-duty military personnel, a letter signed by scholars from the American Enterprise Institute, the Center for American Progress, and the Brookings Institution, among others, also calls for shrinking the Pentagon’s sprawling civilian workforce and reducing overhead, including eliminating excess base capacity.
The most important piece of the military spending puzzle remains the United States’ hyperactive foreign policy. Even if we were to implement the sensible reforms made politically realistic by spending caps, we would still spend more than we need to keep Americans safe. That is because today’s military is mainly geared toward defending others. By discouraging our allies from doing more to defend themselves and their interests, U.S. policymakers have ensured that U.S. troops bear disproportionate burdens, and U.S. taxpayers pay disproportionate costs. If we are going to spend less on the military in the next ten years than we have over the last ten, we must ask our smaller, cheaper military to do less. And we must expect others to do more.
The Budget Control Act, for all its flaws, has managed to deliver something once thought impossible: actual spending cuts. Our military remains second to none, despite those cuts, and might be stronger in the future because of them. A deal to cancel or reverse those cuts threatens to derail sensible reform proposals that could deliver far larger savings to taxpayers in the future.
Sen. McConnell is right: Congress should stand firm.
Steve H. Hanke
With the announcement on Saturday night that Iran and the P5+1 group reached a tentative deal over the Iranian nuclear program, the Iranian rial appreciated 3.45% against the dollar on the black market. The rial jumped from 30000 IRR/USD on Saturday November 23rd to 29000 IRR/USD on Sunday November 24th. A daily appreciation of this magnitude is rare. In fact, it has occurred fewer than ten times since the beginning of 2013. Indeed, this indicates that the diplomatic breakthrough is having a positive effect on Iranian expectations.
Over a year ago, I uncovered the fact that Iran experienced a period of hyperinflation (in early October 2012), when its monthly inflation rate peaked at 62%. Since then, I have been actively monitoring and reporting on the IRR/USD black market exchange rates and calculating implied inflation rates for the country.
Since Hassan Rouhani took office, on August 3rd, Iranian expectations about the economy have turned less negative. Thus far, it appears Rouhani has been successful in ending the long period of economic volatility that has plagued Iran, since the US imposed sanctions in 2010. This has been reflected in the black-market IRR/USD exchange rate, which has held steady around 30,000 in recent weeks (see the accompanying chart).
There are three main factors at work here. The first is a concerted effort by the Rouhani administration and the central bank to curb Iran’s inflation. This stands in stark contrast to the previous regime, whose strategy was to simply deny that inflation was a problem.
The second is that that Iran’s economy has proved remarkably “elastic” – meaning that the country has ultimately adapted to the sanctions regime and has found ways to keep its economy afloat in spite of them.
The third factor in the rial’s recent stability is an improvement in Iranian economic expectations. This is where the P5+1 talks come into play. Iranians recognized that easing of the sanctions regime would be a bargaining chip in any nuclear negotiations. In consequence, their economic expectations improved as the talks progressed. Indeed, Saturday’s announcement gave these expectations a shot in the arm.
In light of the rial’s recent stability, I have delisted the rial from my list of “Troubled Currencies,” as tracked by the Troubled Currencies Project. For starters, the rial no longer appears to be in trouble. And, on a technical note, implied inflation calculations are less reliable during sustained periods of exchange rate stability.
That said, we must continue to pay the most careful and anxious attention to the black-market IRR/USD exchange rate in the coming months. Like the P5+1 agreement, Rouhani’s economic progress in Iran is tentative and likely quite fragile. Since the black-market IRR/USD is one of the only objective prices in the Iranian economy – and perhaps the most important one of all – it will continue to serve as an important weather vane, as the diplomatic process continues, and as Iran’s economy gradually moves into a post-sanctions era.
In the 19th Century, when railroads were being built across the West, the federal government granted significant land and benefits to railroad companies. The Great Railroad Right-of-Way Act of 1875 empowered the government to grant railroad companies right-of-way easements to build tracks across others’ land to facilitate the expansion of the nation’s railways – that is, railroads were granted a right to use sections of another’s property for railroad purposes without owning title to the land underneath. In 1976, the government sold the Brandt family a parcel of land in Wyoming which was crossed by one of these railroad easements.
In 2001, the railroad that owned the easement formally abandoned all claims to it. Typically, when this happens, the easement is simply extinguished and the owner of the land may then use the former easement however he or she wishes. But the federal government had different plans for the thin strip running through the Brandts’ land. In 2006, the government sued for title to the land lying under the former easement on the theory that it had retained a “reversionary interest” in the land when granting the railroad the right of way easement, even though it never actually set aside any interests when granting the easement. The government thus claimed that after the railroad abandoned the easement (after only ever owning an easement and never full title to the land), full title to the land “reverted” back to the federal government. The Brandts argue that under the basic principles of the common law of property, the government had no such right, and that even if any legislative act allowed the government to somehow acquire their land, such an act would require payment of just compensation under the Fifth Amendment’s Takings Clause.
Although this may seem like a small, unique problem, the scope of the Old West’s railway system was huge and those old easements criss-cross the land of thousands of property owners. In 1983, Congress amended the National Trails System Act to allow the government to take abandoned railroad easements and turn them into land for public recreation and “railroad banking.” Landowners have been fighting the taking of their property under the Trails Act ever since, claiming, as here, that the government’s original grant to the railroads contained no residual right of possession for the government.
After the trial court rejected the government’s radical claims, the U.S. Court of Appeals for the Tenth Circuit split with the Seventh and Federal Circuit courts (and ignored some of its own precedent on the way) and held that the government did indeed have a reversionary interest in the land, even though it never actually carved itself an exception, as the law requires. The Brandts, faced with the uncompensated government confiscation of a strip of land cutting their property in two, have now brought their case to the Supreme Court in an attempt to keep the government’s hands off their land and off the land of thousands of other landowners in their same position.
After supporting the Brandts’ request for Supreme Court review, Cato, along with four other groups and several property law professors – including Richard Epstein – has now filed a brief supporting the Brandts’ fight against the government’s poorly justified land-grab. We argue that the Tenth Circuit’s decision threatens to unsettle longstanding presumptions of property law because it willfully ignores basic differences between easements and “fee estates” in land and other basic principles of property law like the “strip and gore” doctrine (which holds, for example, that land under a right-of-way is split down the center and owned by those who own the land on either side of the easement).
This case is important, because there are many thousands of miles of old railroad rights-of-way crossing the countryside that would be potentially subject to uncompensated government confiscation if the Court were to follow the Tenth Circuit’s approach. In addition, some 3,000 to 4,000 miles of old railroad easements are abandoned every year. It’s not entirely surprising that the government would go full throttle on such a shoddy legal argument for the chance to be able to snatch this land back without having to pay for it. The surprising thing is that the Tenth Circuit green-lighted it. We urge the Supreme Court to switch tracks.
The Court will hear argument in Brandt v. United States on January 14.
Cato legal associate Julio Colombo co-authored this blogpost.
Today (Nov. 23) is Repudiation Day, a special holiday recognized by law in Frederick County, Maryland, where I live. In 1765, judges here “became the first to repudiate the British Stamp Act designed to maintain the costs of keeping British troops in America. [They] decided they were not going to charge the tax and refused to stamp the documents … The late Judge Edward Delaplaine called [them] the ‘12 immortal judges.’” More at the Wikipedia entry and in this 2006 column by Joe Volz at the Frederick News-Post (via Brian Griffiths, Red Maryland/Baltimore Sun).
Can you think of any other holiday that celebrates judicial resistance to overweening government and onerous taxation? I can’t.
The post-mortems today, after Harry Reid yesterday dropped the “nuclear option” on the Senate floor, then headed out of town, contain few surprises. As expected, the editorialists at the New York Times, headlining their thoughts with “Democracy Returns to the Senate,” called the 52-48 vote to end filibusters for appellate court nominees “long overdue.” The Times’ history goes back all of five years, conveniently ignoring the origins of the practice in the 108th Congress, when Democrats were in the Senate minority, as I outlined here and here yesterday. (See here for a detailed discussion of the period before that.)
At the Washington Post, however, one might be surprised to find not only the editors but two reliably liberal columnists, Dana Milbank and Ruth Marcus, on the other side. But in an effort to be even-handed, the editors, among other things, call the Republican rationale for recently filibustering three Obama nominees to the DC Circuit Court of Appeals—that the court’s workload does not justify adding new judges—a “pretext.” Yet as I outlined yesterday, the facts say otherwise, clearly, and do so far more than when Democrats used that rationale, successfully, in 2006.
Which brings me to a couple of little noted points in the reportage that has followed yesterday’s bombshell. Not only have the facts been too often little aired in much of that, when not outright misreported, but the “both-sides-have-been-guilty” meme has been uncritically prominent. It’s true, of course, that Republicans too have filibustered some of Obama’s appellate court picks. But the sequence matters—or, as parents concerned not simply with peace but with justice often ask, “Who hit first?” Turn-around is fair play, as we say. And that’s what galls so many about the events of yesterday. As many have noted, even those who oppose judicial filibusters, Reid was fine with Democratic filibusters of George W. Bush’s appellate court nominees. He couldn’t endure the turn-around.
It was Mr. Dooley who first reminded us that “politics ain’t beanbag,” which old-line Democratic pols like Tip O’Neill took to heart and practiced like an art. That analogy with sports—let’s stipulate that beanbag is “sports” of a sort—is instructive. We don’t give a guy hitting only .200 four strikes, or require a clearly superior team to gain 15 yards for a first down. So too in politics: Whatever the rules may be, they have to be followed equally or one side is playing a suckers game. I raise this issue because we’re already hearing Republican stirrings that, given pressure from the base, they “will be unable to resist using the same power” Democrats have now used. Where is Mr. Dooley when he’s needed?
But a second point, too little noted, concerns the implications from there being numerous “judicial emergencies” in the other circuits—vacancies in seriously overworked circuits for which the president hasn’t even named anyone. Judicial emergencies have increased 90 percent since 2006, and the vacancies with nominees have declined from 60 percent to 47 percent. Yet rather than attend to filling those vacancies, Obama and Reid are focused on adding three more judges to the already seriously underworked and overstaffed DC Circuit. That speaks volumes, of course, about what their agenda is. As I wrote yesterday, the DC Circuit’s docket is mostly about challenges to administrative decisions. Judges in such cases have considerable discretion about whether or not to defer to the judgment of those agencies. If you want to rule by executive diktat, as Obama plainly does, you’ll want “your people” on that court, deferring to “your people” at EPA, HHS, OSHA, the FEC, the IRS, and so on down the line. Let the folks out in the country wait a little longer to get justice. Washington needs to get to the business of “fundamentally changing America.”
Fareed Zakaria’s new column is titled (at least on the Washington Post website) “Why Americans Hate Their Government” or (in the paper) “Why We Hate our Government.” But some of the points he makes might better be seen as reasons not to keep on expanding a government that has grown beyond its competence.
Washington is having one of its odd debates as to whether the Obama administration’s rollout of HealthCare.gov was worse than the Bush administration’s response to Hurricane Katrina. But whatever the answer, if there is one, the real story is that both are examples of a major, and depressing, trend: the declining competence of the federal government. Paul Volcker, former chairman of the Federal Reserve, has been saying for years that most Americans believe their government can no longer act effectively and that this erosion of competence, and hence confidence, is a profound problem.
“The federal service is suffering its greatest crisis since it was founded in the first moments of the republic,” scholar Paul Light writes in his book “A Government Ill Executed.”
Over the past decade, the federal government has had several major challenges: Iraq, Afghanistan, a new homeland security system, Katrina and Obamacare. In almost every case, its performance has been plagued with mismanagement, massive cost overruns and long delays.
Zakaria argues that this was not always the case: “In the 1940s, ’50s and ’60s, federal agencies were often lean, well managed and surprisingly effective.” Maybe so, depending on your metric. But of course in those decades the federal government had not yet undertaken cradle-to-grave responsibilities. Maybe the lesson is that if you want competent government, you should limit it to manageable tasks.
On the other hand,
If you want the federal government to tax (and borrow) and transfer $3.6 trillion a year, if you want it to build housing for the poor and give special benefits to Alaska Natives, if you want it to supply Americans with health care and school lunches and retirement security and local bike paths, then you have to accept that such programs come with incentive problems, politicization, corruption, and waste.
In that case, this is the business you have chosen.
Elane Photography LLC v. Vanessa Willock is the case in which an Albuquerque, NM woman has (thus far successfully) sued husband-and-wife photographers under New Mexico’s “public accommodations” discrimination law for their reluctance to shoot photos of her commitment ceremony to a female partner. One of the most dismaying elements of the case is that the American Civil Liberties Union has taken the anti-liberty side. Adam Liptak in the NYT:
I asked Louise Melling, a lawyer at the American Civil Liberties Union, which has a distinguished history of championing free speech, how the group had evaluated the case.
Ms. Melling said the evaluation had required difficult choices. Photography is expression protected by the Constitution, she said, and Ms. [Elane] Huguenin acted from “heartfelt convictions.”
But the equal treatment of gay couples is more important than the free speech rights of commercial photographers, she said, explaining why the A.C.L.U. filed a brief in the New Mexico Supreme Court supporting the couple.
The ACLU of all groups should have no reason to see this as a “difficult choice” or as a conflict of constitutional values. Free speech and expression rights, which extend to the right not to engage in expression on behalf of a cause one deplores, are central constitutional values and the ACLU is the very first organization people turn to to defend them. Equal treatment of gay couples by private actors, on the other hand (as distinct from by the government itself) has no clear status as a constitutional value at all.
Shame on the ACLU for selling out civil liberties principle in favor of its current notions of civil rights. As Jacob Sullum points out, if it “cannot bring itself to stand up for Huguenin’s rights, it should at least have the decency to sit this one out.” In the mean time, it would do well to adopt some new and changed name on its letterhead, such as American Civil Rights Union.
I’m happy to say that Cato (with law professors Dale Carpenter and Eugene Volokh) filed an amicus brief supporting the photographers’ rights before the New Mexico Supreme Court, albeit unsuccessfully. Certiorari has now been sought at the U.S. Supreme Court.
Well Harry Reid went nuclear, as he’d threatened to do all week. And by a vote of 52-48, Senate Democrats did his bidding just a couple of hours ago. I wrote about his hypocrisy at NRO this morning. He’s the same Harry Reid who assured us only a few months ago that “We’re not talking about changing the filibuster rules that relates to nominations for judges” (Press Briefing, 7/11/13) and “We’re not touching judges. That’s what they were talking about. This is not judges.” (NBC’s “Meet The Press,” 7/14/13). Well we are talking about judges. And we’ll be talking about them quite a bit more, I’m afraid.
The Democratic hypocrisy on the subject boils down to this. After sitting on George W. Bush’s appellate court nominees during his first two years when they controlled the Senate—never even holding hearings—Democrats for the next two years, after losing the Senate in the 2002 midterm elections, conducted unprecedented filibusters of Bush’s appellate court picks—all of which ended only with the “Gang of 14” compromise in 2005. But now that the Republican minority has used that same practice—directed this session only at the latest D.C. Circuit nominees—Democrats have moved to strip it from them—and not by a two-thirds vote of the Senate, as Senate rules require, but by a simple majority. It’s heads I win, tails you lose.
But it doesn’t end there. After Obama’s nominee Sri Srinivasen was unanimously confirmed for the D.C. Circuit last May, Republicans have filibustered Obama’s three latest nominees for that circuit for practical reasons, not for the ideological reasons that drove Democratic filibusters. As I outlined in my NRO piece, there simply isn’t enough work in the D.C. Circuit to justify three more judges. For 17 straight years that court has had the lowest number of appeals filed and the lowest number of appeals terminated of all the circuits.
So what’s the upshot of Reid’s move? The most obvious one is this: If Harry Reid is willing to drop the nuclear bomb for these three nominees—given all that that implies about the sanctity of Senate rules—he must be expecting some return. It’s not for nothing that the D.C. Circuit Court is called the second most important court in the land. It’s the court that will be deciding challenges to the vast executive branch “lawmaking” by which the Obama administration today is ruling America, covering everything from health care to environmental regulations, labor arrangements, financial affairs, and so much more. With a divided Congress, Obama can’t get things done the constitutional way, so he rules by diktat—and hopes the courts will uphold his unilateral decisions. Given the docket of the D.C. Circuit, rule by executive order just got easier.
But Obama has three more years to name judges for the other circuits as well, and possibly for the Supreme Court, and that got easier for him too. And of course it’s now easier to change other Senate rules by a simple majority. But what goes around comes around. And the way the polls are going in the wake of the Obamacare debacle, the Senate itself, already in play, may be more so come next November. If it turns out that way, Republicans should have no scruples about playing by the rules the Democrats have seen fit first to employ, when in the minority, and then to remove, when in the majority. As is said, it couldn’t happen to a nicer bunch.
Christopher A. Preble
A loya jirga, an assembly of 3,000 or so Afghan leaders, is currently reviewing a draft bilateral security agreement that would allow U.S. and other foreign troops to remain in Afghanistan until 2024. Even if it passes with few substantive changes, the agreement is unlikely to please anyone.
Afghan President Hamid Karzai has said he will not sign it, and the few remaining hawks in the United States will point to some military leaders’ call for a much larger force to remain for a generation or more, and accuse President Obama of fecklessness.
Most Americans, however, are likely to have the opposite reaction: a force of 8,000 is too large, and ten years is too long. A senior administration official’s assertion to the New York Times that “there is no scenario in which those forces would stay in Afghanistan until anywhere near 2024,” isn’t likely to be very reassuring. We’ve heard before that open-ended missions wouldn’t be, or that U.S. troops would eventually come home.
The president’s supporters, including Secretary of State John Kerry, characterize the agreement as an acceptable compromise that ensures legal protections for Americans stationed in Afghanistan, while also granting the United States access for continued counterterrorism operations, including raids in Afghan homes, said to be one of the last sticking points of the negotiations.
The details must still be worked out, and it is possible that the loya jirga will alter the agreement, or vote it down. If the legal protections for American citizens are stripped out, or if there is no agreement, then the U.S. military mission should be withdrawn entirely from Afghanistan. As in the case in Iraq, when a democratically elected government refused the Obama administration’s reasonable request to shield U.S. troops from the vagaries of Iraqi justice, no deal should mean no troops. This story is far from over, and I will be watching as more details emerge.
This much is clear, however: The enthusiasm for quixotic nation-building crusades that swept through Washington a few years ago has been replaced by a welcome skepticism. Senior military officers dressed it up with a fancy name–COIN–but the public never bought what they were selling. Now even some scholars within the military establishment are pushing back. A force of 100,000 wasn’t nearly large enough to accomplish a nation-building mission, and, the Obama administration no longer even pretends that that is the true object. A mere 8,000 foreign troops will have trouble enough training an Afghan army beset by illiteracy, absenteeism, and corruption. Any pretense that the few U.S. troops who remain in Afghanistan after 2014 can write Afghan legal codes, build a functioning political system, put the country on the road to economic self-sufficiency, and protect the rights of women and religious and ethnic minorities is out the window.
But the critical constraint on any lingering nation-building fantasies is the American people who want this nation’s longest war to be over. They should be forgiven for believing that it would be by now, given that President Obama intoned repeatedly during last year’s campaign that he was committed to ending it.
He hasn’t yet.
Paul C. "Chip" Knappenberger
Tomorrow [today] Rep. Henry A. Waxman and Sen. Sheldon Whitehouse, co-chairs of the Bicameral Task Force on Climate Change, will host representatives from five of America’s major sports leagues, as well as the U.S. Olympic Committee (USOC), to discuss the effects of climate change on sporting activities and the work these organizations are doing to reduce their greenhouse gas (GHG) emissions. The group will meet for a closed-door discussion, followed by a press availability.
Now, admittedly, even as a climatologist, I do spend a fair amount of time discussing sports.
But I do so around the water cooler or at the local bar, not with Congressional task forces.
Your tax dollars are probably better served that way.
Ilya ShapiroThe Congressional Black Caucus has now explicitly attacked Republicans as racist for blocking President Obama’s latest judicial nominees. Not only are they racist, but if you scratch them, you find Confederate gray. Unbelievable. Do these elected officials really think that the filibustering of three D.C. Circuit nominees (one of whom is black) has more to do with race than either judicial philosophy or the ongoing battle over whether this underworked court actually needs more judges? Even after Indian-American Sri Srinivasen was confirmed to that same court unanimously in May after Caitlin Halligan (who’s white) was blocked for ideological reasons? Moreover, this is a pretty rich accusation for Democratic lawmakers to make after the filibustering of Janice Rogers Brown (since confirmed after the ‘Gang of 14’ deal) and Miguel Estrada (seven failed cloture votes ultimately leading to withdrawal) during the Bush years. And recall the infamous memo detailing how Estrada needed to be blocked because he’s Latino. This isn’t even about whether the Senate should use the “nuclear option” to end the filibustering of nominees – that’s a question of tactics rather than principles – but if Republicans had done that back in 2006, we wouldn’t still be trapped in this political gamesmanship. Regardless of what happens on that front, however, there should be a forceful response from folks named Cruz and Rubio – and Tim Scott, who was the only African-American senator until Cory Booker’s election. This is shameful – but alas of a piece with this administration’s racialization of everything from housing policy to Justice Department hiring to voter ID. It’s too bad that the CBC passes for leadership in the black community, distracting its constituents from real policy issues to engage in base calumny. I guess if all you have is a demagogic hammer, then everything is a racist nail.
Gerald P. O'Driscoll Jr.
The Senate Banking Committee just voted 14 to 8 to confirm Janet Yellen’s nomination to be the new Chair of the Federal Reserve. She will likely go on to be confirmed by the full Senate.
Much of the coverage has focused on Yellen as a person, when the real story is on the Fed as an institution. Sometimes individuals have profound influence on Fed policy, such as Paul Volcker in the late 1970s and 1980s. Over time, however, the institutional structure of the central bank and the incentives facing policymakers matter more.
The Federal Reserve famously has a dual mandate of promoting maximum employment and price stability. The Federal Open Market Committee, which sets monetary policy, has great discretion in weighting the two policy goals. As a practical matter, the vast majority of the time, full employment receives the greater weight. That is because the Fed is subject to similar pressures as are the members of Congress to which the Fed must report. In the short run, voters want to see more job creation. That is especially true today. The United States is experiencing weak growth with anemic job creation.
Never mind that the Fed is not capable of stimulating job creation, at least not in a sustained way over time. It has a jobs mandate and has created expectations that it can stimulate job growth with monetary policy. The Fed became an inflation-fighter under Volcker only when high inflation produced strong political currents to fight inflation even at the cost of recession and job creation.
The Federal Reserve claims political independence, but it has been so only comparatively rarely. Even Volcker could make tough decisions only because he was supported by President Carter, who appointed him, and President Reagan, who reappointed him. Conventionally defined inflation is low now, so the Fed under any likely Chair would continue its program of monetary stimulus. Perhaps Yellen is personally inclined to continue it longer than might some other candidates. But all possible Fed chiefs’ would face the same pressures to “do something” to enhance job growth, even if its policy tools are not effective.
The prolonged period of low interest rates has made the Fed the enabler of the federal government’s fiscal deficits. Low interest rates have kept down the government’s borrowing costs, at least compared to what they would have been under “normal” interest rates of 3-4 percent.
Congress and the president have been spared a fiscal crisis, and thus repeatedly punted on fiscal reform. They are likely to continue doing so until rising interest rates precipitate a crisis. How long that can be postponed remains an open question.
There’s been much ink spilled the past few days over U.S. Secretary of Education Arne Duncan’s defense of the Common Core, delivered as an obnoxious attack on white, suburban women. Proclaimed Duncan to a meeting of the Council of Chief State School Officers (one of the Core’s progenitors):
It’s fascinating to me that some of the pushback is coming from, sort of, white suburban moms who – all of a sudden – their child isn’t as brilliant as they thought they were and their school isn’t quite as good as they thought they were, and that’s pretty scary.
Much of the uproar over Duncan’s attack has been over his injecting race and sex into the Common Core debate, and that certainly was unnecessary. But much more concerning to me – and indicative of the fundamental problem with federally driven national standardization – is the clear message sent by Duncan’s denunciation of Jane Suburbia: average Americans are either too dull or too blinkered to do what’s best for their kids. The masses need their betters in government – politicians, bureaucrats – to control their lives.
Alas, this has been a subtext of almost the entire defense of the Core. Every time supporters decide to smear opponents primarily as “misinformed” or “conspiracy theorists,” they imply that people who are fighting for control of what their children will learn are either too ignorant, or too goofy, to matter.
Of course, there are some opponents who don’t get all the facts right about the Common Core, but supporters ignore that many of these people are just finding out about the Core. Unlike major Core supporters, many opponents – often parents and plain ol’ concerned citizens – haven’t been working on the Core for years. And even when opponents use such regretably over-the-top rhetoric as calling the Common Core “Commie Core,” they are ultimately making a legitimate point: the federally driven Core is intended to make the learning outcomes of all public schools the same – “common” is in the name, for crying out loud! – and in so doing, nationalize learning. At the very least, that’s not a move in the libertarian direction.
Every once in a while, Core supporters will openly air their basic distrust of average Americans. If you go to the 53:10 mark of our Common Core “Great Debate,” you’ll catch just such an admission by Chester Finn, president of the Core-championing Thomas B. Fordham Institute. In response to an explanation of how free markets enable average people to smartly consume things about which they are not experts, Finn declares that most parents won’t do even easy work to make informed choices. Then he asks, “is that a way to run a society?”
And there it is: In the end, Common Core, and all the government power behind it, is ultimately about experts running society rather than letting free people govern themselves. Why? Because parents – “the people” – are either thought incapable, or unwilling, of caring for their children themselves.
This attitude if fundamentally at odds with maintaining a free society. It declares that government must control what children learn, and in so doing gives government – not free people – the power over what the next generation of Americans will think. This is not to say that the Common Core is intended to inculcate values and attitudes – most supporters probably just want to better furnish skills – but it will nevertheless couple power over what the schools teach with an attitude that is fundamentally corrupting: I know what is best, and must make you do it. And if your betters think you can’t be trusted to teach your child about something as unthreatening as the ABCs, imagine what they may eventually require – or forbid – in teaching about religion, or guns, or climate change?
As has been the case in the past, Secretary Duncan has actually done Common Core opponents a huge favor in an effort to take them down. But this may be his most important contribution yet, revealing the supremely threatening contempt in which he seems to hold the average parent, and which drives the Common Core.