With dead protesters littering the streets of Cairo, Secretary of State John Kerry’s theory that Egypt’s military rulers “were restoring democracy” isn’t looking very good. The dead won’t be able to vote in the new and improved Egypt.
Instead of acting as the regime’s enabler, the Obama administration should cut off foreign “aid.” If there is influence for Washington to exercise, officials should do so quietly and informally.
Unfortunately, U.S. policy toward Egypt has rarely focused on the Egyptian people. The $75 billion in “aid” was largely a payoff to successive dictators and their military Praetorian Guards. Washington worried about “stability,” not democracy.
Hosni Mubarak was finally overthrown in 2011. In last year’s presidential election, the Brotherhood’s Mohamed Morsi defeated Mubarak’s last prime minister, Ahmed Shafik. The secular liberals were not a factor.
Morsi failed to establish his organization’s democratic bona fides, and especially to reach out to disaffected Egyptians who only reluctantly backed him. But his opponents were little better, while the Mubarak state remained largely intact and undercut him at every turn.
It would have taken extraordinary skill, forbearance, and luck, none of which President Morsi possessed, to have succeeded. Had the opposition simply waited Morsi would have discredited political Islam—democratically. In this way, argued Reuel Marc Gerecht of the Foundation for Defense of Democracies: “The Egyptian military may have snatched defeat from the jaws of victory.”
Instead, Morsi’s disparate opponents backed SCAF in staging the July 3 coup: the president removed, his top aides arrested, his movement’s media shuttered and journalists arrested, the president and others charged with fanciful offenses, and his supporters gunned down in the streets.
Certainly it was an odd way to go about “restoring democracy.” David Kramer, Freedom House’s president, cited a “significant decline in most of the country’s democratic institutions” after Morsi’s ouster. What the al-Sisi government actually restored was the old Mubarak structure.
The Brotherhood resisted the military’s demand for abject surrender. After meeting with government officials Sen. Lindsey Graham (R-SC) said: “You could tell people were itching for a fight.” Indeed, reported the Washington Post, “Two weeks before the bloody crackdown in Cairo, the Obama administration, working with European and Persian Gulf allies, believed it was close to a deal to have Islamist supporters of ousted President Mohamed Morsi disband street encampments in return for a pledge of nonviolence from Egypt’s interim authorities. But the military-backed government rejected the deal and ordered its security forces to break up the protests.”
The military government acknowledged over 600 dead, and the toll almost certainly was much higher. Many of the killings appeared to be deliberate, the result of army snipers. Sherif Mansour of the Committee to Protect Journalists decried the “systematic” targeting of the press.
The slaughter in Cairo sparked more violence nationwide, including Brotherhood attacks on government buildings and Coptic churches. Although the army has the near-term advantage, the movement has survived prior attempts at suppression. Moreover, the government is encouraging the rise of a more radical and violent leadership. Al-Qaeda’s head, Ayman al-Zawahiri, was a member of the Brotherhood and imprisoned and tortured during a prior crackdown.
Continuing civil disorder and violence is almost certain. Terrorism is possible. The kind of strife in Iraq after the U.S. invasion and Algeria in the 1990s also is a risk. Of course, in any such conflict there will be little room for liberal and democratic values.
The Obama administration has ignored U.S. law requiring an aid cut-off after a coup because it wanted to preserve its “leverage.” Unfortunately, Washington has consistently demonstrated its impotence in Cairo. Most recently, Washington has been begging the military to promote reconciliation, without evident success.
The carnage in Cairo mimics that in Beijing’s Tiananmen Square. To subsidize Cairo today is to underwrite murder. Washington’s best policy is to support neither side and leave this tragic conflict to the Egyptian people.
Occupational licensing laws make it harder and more expensive for people to get jobs or to create innovative businesses that might not fit into to conceptual box designed by last generation’s regulators. Worse, while these laws are supposed to be about protecting consumers against dangerous or inept practitioners, they’re often exploited by existing businesses to bar newcomers from competing against them.
But these problems are nothing compared to “Certificate of Public Convenience and Necessity” laws, also called “Certificate of Need” or CON laws. Unlike typical licensing rules, CON laws don’t have anything to do with whether a person is educated or qualified. Instead, they prohibit you from going into business unless you first prove to bureaucrats that a new business is “needed.” And these laws rarely define “need,” or explain how to prove it. Still worse, such laws usually allow existing firms to block a newcomer from staring a competing business. In short, CON laws bar you from going into business until you get permission from your own competitors. (It sounds like something from an Ayn Rand novel, right?)
Last week, Cato adjunct scholar Timothy Sandefur and his colleagues at the Pacific Legal Foundation filed a motion with a federal judge in Kentucky asking the court to strike down that state’s CON law for moving companies. The details are here, and they’re telling.
There have been 39 applications for new moving licenses since 2007. Those that were not “protested” by existing moving companies were approved without incident. But in 19 cases, existing firms did object. And in all of those cases, one of two things happened: either the applicant gave up and abandoned the application, or the government denied it on the grounds that existing moving services were “adequate.” The state never approved an application that was protested by existing firms, no matter what. In one case, an applicant who’d been working for moving companies for 39 years was denied a license in a decision that declared him fully qualified–but said existing companies didn’t need the competition. No wonder Sandefur calls the law “the Competitor’s Veto.”
Notably, of the 114 “protests” filed against applications for new moving licenses in the past five years, all said that the reason for protesting was that a new moving company would cause competition. None even alleged that the applicant was dangerous or incompetent or dishonest.
Not only is Kentucky’s CON law explicitly designed to protect established companies against entrepreneurs who want to work hard to support themselves, but they’re also incomprehensibly vague. What is a “need”? What qualifies as “adequate”? Nobody knows, and state officials testified under oath that they don’t use any objective standards when making such determinations.
The Bluegrass State, by the way, isn’t the only example of this sort of thing. In an article forthcoming in the George Mason Civil Rights Law Journal, Sandefur demonstrates the same pattern in Missouri, where he challenged the constitutionality of a very similar law. There, too, all of the 110 protests filed against moving license applications were filed by existing firms, and all explicitly said that their only reason for objecting was to avoid competition. (That law was repealed last year.)
The Supreme Court has made clear that licensing requirements must focus on the applicant’s “fitness or capacity to practice the profession,” and it has invalidated CON laws that only protect cartels against competitors. Like those laws, Kentucky’s CON law isn’t about protecting the public. It’s based on fallacious and outdated economic theories that saw competition as wasteful and inefficient. Economists now generally agree that competition is the source of efficiency – and that when government tries to decide what kind of businesses are “needed,” that power will be captured by private interests seeking to benefit themselves at the expense of consumers and entrepreneurs. Here’s hoping the court strikes down the Kentucky anti-competition law and enforce the constitutional right to earn a living.
Daniel J. Mitchell
As regular readers know, one of my great challenges in life is trying to educate policy makers about the Laffer Curve, which is simply a way of illustrating that government won’t collect any revenue if tax rates are zero, but also won’t collect much revenue if tax rates are 100 percent. After all, very few people will be willing to earn and report income if the government steals every penny.
In other words, you can’t estimate changes in tax revenues simply by looking at changes in tax rates. You also have to consider changes in taxable income. Only a fool, for instance, would assume that you can double tax revenue by doubling tax rates.
But how do you explain this to the average person? Or, if you want a bigger challenge, how do you get this point across to a politician?
Over the years, I’ve picked up a few teaching examples that seem to be effective. People are always shocked, for example, when I show them the IRS numbers on how rich people paid a lot more tax when Reagan cut the top tax rate from 70 percent to 28 percent.
And they’re also more likely to understand why class-warfare tax policy won’t work when I show them the IRS data on how upper-income taxpayers have considerable control over the timing, level, and composition of their income.
Perhaps my favorite teaching technique, though, is to ask folks to pretend that they’re running a restaurant and to think about what might happen to their sales if they double the price of hamburgers. Would it make sense to assume that they would get twice as much revenue?
Almost everybody understands that hamburger sales would plummet and that they would likely lose revenue.
Well, great minds (or at least wonky minds) think alike, because the Tax Foundation has released a great video on dynamic scoring and they use donuts to make the same point.The Economics of Tax Reform: Lessons from the Donut Shop
The video suggests that it would be a good idea to modernize the revenue-estimating process.
I fully agree. The Joint Committee on Taxation, which is responsible for revenue estimates on Capitol Hill, is notorious for using antiquated and biased methodology.
I elaborate (and use my hamburger example) in this video I narrated for the Center for Freedom and Prosperity.The Laffer Curve, Part III: Dynamic Scoring
P.S. The Joint Committee on Taxation also is responsible for producing biased estimates of so-called tax expenditures.
P.P.S. Only 15 percent of CPAs (the folks who see first-hand how taxes impact behavior) agree with the Joint Committee on Taxation’s methodology.
In a nation with a strong tradition of holding major political contests in years divisible by the number two, politicos are mostly confined to chirping about distant elections during odd-numbered years. The exceptions in the year following a presidential election are New Jersey and Virginia, which hold their gubernatorial elections. In addition, due to the passing of Senator Frank Lautenberg, New Jersey will hold a special election to the U.S. Senate. In all three elections, one or both of the major candidates have made school choice an issue. That makes sense because school choice is increasingly popular, especially once implemented. Unfortunately, while the candidates should be commended for promoting school choice policies in general, their specifics leave much to be desired.
Last week, the Republican gubernatorial candidate in Virginia, Ken Cuccinelli, unveiled an education plan calling for an expansion of the state’s scholarship tax credit program (or the creation of a separate program) that would direct funds to students currently attending a failing public school. However, what Virginia’s scholarship tax credit program really needs is the policy equivalent of Extreme Home Makeover to remove unnecessary regulations on private schools, shift administration of the program to the Department of Revenue, increase the credit amount, and expand the uses of the scholarships beyond just tuition. As Andrew Coulson has demonstrated, it is the least regulated, most market-like private schools that do the best job of serving families.
In New Jersey, Governor Chris Christie is once again advocating for a scholarship tax credit program, just as he had promised in 2009. Thus far, Christie has not fulfilled his promise. While Christie has repeatedly included a tax credit program in his proposed budgets, he has also repeatedly signed budgets lacking such programs. Certainly Christie faces a hostile legislature on this issue, but he has proven capable of getting his top priorities through. Private school choice does not appear to be one of them. That said, recognizing the need for competition, Christie did implement a modest public school choice law and has helped transform some traditional district schools into charter schools. It’s certainly possible that if reelected, he might spend his enhanced political capital on finally enacting private school choice. Color me skeptical, but if the latest polls are any indication, voters will give Christie the opportunity to finally keep his promise.
In the New Jersey Senate race, both candidates have declared their support for school choice. Indeed, the issue has become somewhat of a political football, with former mayor Steve Lonegan accusing Mayor Cory Booker of not being sufficiently pro-school choice:
“It is time for Cory Booker to man up and say once and for all whether he will support school vouchers if he is elected to the U.S. Senate or will he join President Obama in shutting down school voucher programs…Cory had seven years to give low-income students in Newark a chance at receiving a quality education. Instead, he has offered platitudes and vague statements.”
The attack is somewhat disingenuous since a voucher program would have to be enacted at the state level, not the local level. Some commentators see the attack as an effort to drive a wedge between Booker and his base to dampen support on election day, though Booker’s support for vouchers didn’t hurt him in the primary. What’s not clear is how either candidate’s support for school choice will translate into policy in the Senate. Supporting the Washington, D.C. voucher program is certainly laudable, but pushing for a national voucher program would be misguided.
In summary, it is encouraging that the popularity of school choice programs has translated into greater political support, but this year’s elections don’t offer much for school choice advocates to get excited about.