Andrew J. Coulson
Since she was shot in the head by a would-be Taliban assassin, Malala Yousafzai has become one of the most recognizable and admired young people on the planet. But in a new piece in the British Spectator magazine, education scholar and Cato Institute adjunct fellow James Tooley points out that “something curious is going on.”
Something crucial to her experience is always omitted when her life and mission are described by international agencies and the media… it wasn’t to governments that Malala and her family turned (or are turning now) to get an education…. In fact, she’s scathing about government education: it means ‘learning by rote’ and pupils not questioning teachers. It means high teacher absenteeism and abuse from government teachers, who, reluctantly posted to remote schools, ‘make a deal with their colleagues so that only one of them has to go to work each day’; on their unwilling days in school, ‘All they do is keep the children quiet with a long stick as they cannot imagine education will be any use to them.’ She’s surely not fighting for the right of children to an education like that.
But if not government education, what is she standing for? In fact, Malala’s life story shows her standing up for the right to private education.
For the school she attended, on her way to which she was famously shot by the Taleban, was in fact a low-cost private school set up by her father. This reality gets hidden in some reports: not untypically, Education International describes her father as a ‘headmaster’. Time magazine describes him as a ‘school administrator’. Headmaster, school administrator: these obscure the truth. In fact, her father was an educational entrepreneur.
Read the whole thing. James Tooley is the Indiana Jones of education, splitting his life between his professorial duties at the University of Newcastle and scouring the globe for something “experts” used to think was a myth: private schools serving poorest of the poor. He’s found them all across India, Africa, and even China—and they work. You can pick up the mind-blowing story in his book The Beautiful Tree.
Contrary to the claims of many transit advocates, regions that spend more money on transit seem to grow slower than regions that spend less. The fastest-growing urban areas of the country tend to offer transit service mainly to people who lack access to automobiles. Urban areas that seek to provide high-cost transit services, such as trains, in order to attract people out of their cars, tend to grow far slower.
Transit advocates often argue that a particular city or region must spend more on urban transit in order to support the growth of that region. To test that claim, I downloaded the latest historic data files from the National Transit Database, specifically the capital funding and service data and operating expenses by mode time series. These files list which urbanized area each transit agency primarily serves, so it was easy to compare these data with Census Bureau population data from 1990, 2000, and 2010.
The transit data include capital and operating expenses for all years from 1991 through 2011. I decided to compare the average of 1991 through 2000 per capita expenses with population growth in the 1990s, and the average of 2001 through 2010 per capita expenses with population growth in the 2010s. In case there is a delayed response, I also compared the average of 1990 through 2000 per capita expenses with population growth in the 2000s. Although it shouldn’t matter too much, I used GNP deflators to convert all costs to 2012 dollars.
I had to make a few adjustments to the population data to account for changes in the Census Bureau’s definitions of urbanized areas. Between 1990 and 2000, the San Francisco-Oakland and Los Angeles urbanized areas were split into several parts, so I added up the various parts for 2000 and 2010 data. At the same time, the Miami, Ft. Lauderdale, and West Palm Beach urbanized areas were merged, so I added these three for 1990. The Oklahoma City urbanized area was radically reduced in size, with the apparent but incorrect result that it had lost population between 1990 and 2000. I used the growth rates for the Oklahoma City metropolitan statistical area instead. Since they are served by the same transit agencies, I combined Boulder and Denver data as well as Salt Lake, Ogden, and Provo-Orem data.
Although the United States has about 400 urbanized areas, data are incomplete for many of the smaller areas. Most transit debates take place in major urban areas, and what happens in Nampa, Idaho or Tyler, Texas is probably not too representative of what could happen in Indianapolis or Tampa. So, for my initial run, I compared only the 64 largest urban areas (number 65 being Concord, California, which was split off from San Francisco-Oakland in 2000). This includes nearly all urban areas with 2010 populations greater than 600,000 people.
Within these 64 urban areas, transit spending covers a wide range: per capita capital spending ranges from about $10 per year to $300; per capita operating costs range from about $15 per year to nearly $500. Growth rates range from minus 1.1 percent per year in New Orleans in the 2000s to 6.5 percent per year in Las Vegas in the 1990s.Correlation Coefficients 64 Regions 160 Regions 1990s Capital Spending & 1990s Growth -0.09 -0.04 2000s Capital Spending & 2000s Growth -0.07 -0.09 1990s Capital Spending & 2000s Growth -0.23 -0.18 1990s Operations Spending & 1990s Growth -0.19 0.00 2000s Operations Spending & 2000s Growth -0.26 -0.22 1990s Operations Spending & 2000s Growth -0.30 -0.21
The results show a clear trend: more transit spending always correlates with less growth. Within each decade, the trend is strongest for operating expenses: minus 0.19 in the 1990s and minus 0.26 in the 2000s. The trend is negative but much weaker for capital spending: minus 0.09 in the 1990s and minus 0.07 in the 2000s. But high transit capital spending in the 1990s strongly correlates with slower growth in the 2000s: minus 0.23. High operating budgets in the 1990s also strongly correlate with slow growth in the 2000s: minus 0.30.
Regions that spent more on transit capital improvements in the 1990s tended to grow slower in the 2000s than regions that spent less.
Adding more regions to the equation doesn’t significantly change the results. For the next 100 largest urban areas, including nearly all urban areas with 2010 populations greater than 200,000, the range in annual per capita capital spending was much smaller–about $5 to $25–but the range in population growth was still large–from -7 percent to more than 80 percent. With one varying widely and the other not, correlations would have to fall, and they do. The negative correlation between 1990 operational expenditures and growth declined to zero, and most of the others declined slightly, but (except for the one that declined to zero) are still negative.
Needless to say, correlation does not prove causation. Many factors influence population growth, and transit spending is not likely to be the most important. However, the stiff taxes required by urban areas that spend heavily on transit represent a burden to consumers and businesses, and seem likely to contribute to a slowing of economic growth.
These results support that idea in two ways. First, the fact that the correlations are almost always negative shows that transit spending is not likely to support more rapid growth. Moreover, the fact that the results are stronger in the second decade–that more spending in the 1990s more strongly correlates with slower growth in the 2000s than in 1990s–suggests that, to the extent that there is a causative relationship, transit spending has a greater influence on growth than growth has on spending.
Superconducting magnetic levitation is the “next generation of transportation,” says a new rail advocacy group that calls itself The Northeast Maglev (TNEM). The group’s proposed New York-Washington maglev line has received attention from the Washington Post and Baltimore Sun. TNEM’s claims might have seemed valid 80 years ago, when maglev trains were first conceived, but today maglev is just one more superexpensive technology that can’t compete with what we already have.
Maglev has all the defects of conventional high-speed rail with the added bonuses of higher costs and greater energy requirements. Unlike automobiles on roads, rails don’t go where you want to go when you want to go there. Compared with planes, even the fastest trains are slow, and modest improvements in airport security would do far more to speed travelers, at a far lower cost, than building expensive new rail infrastructure.
TNEM’s proposal is to use a new maglev technology called electrodynamic suspension using superconducting magnets. Ignoring the gee-whiz terminology, the basic advantage is that it is supposed to be able to go a little faster than previous maglevs, but with the disadvantage that the levitation fails to work at slow speeds so wheels must be added to the carriages.
Japan plans to use this technology to build a line from Tokyo to Osaka that won’t be completed for 14 more years and is estimated to cost $350 million per mile. That compares with Amtrak’s proposal to rebuild the Boston-to-Washington corridor into a true high-speed rail route at a cost of about $250 million per mile. To be fair, Japan’s cost is high partly because they expect to dig tunnels for much of the route. But even TNEM estimates that a Baltimore-Washington segment would cost “somewhere north of $10 billion,” or about the same, per mile, as Amtrak’s plan. Such early estimates are always well below final costs.
Maglev’s advantage over conventional high-speed rail is supposed to be that levitated vehicles can be frictionlessly propelled at high speeds. But that doesn’t mean they are energy-efficient: it takes a lot of energy to levitate a train car full of people. One study by a pro-rail group estimated that maglev would require several times more energy per passenger mile as conventional rail technology and have the least effect on reducing greenhouse gas emissions.
Rail advocates point to “successful” high-speed rail lines in Europe and Asia. But one point escapes their attention: high-speed trains have succeeded in capturing passengers away from low-speed trains, but nowhere have they captured significant numbers of passengers from cars or planes.
When Japan opened its first high-speed rail line in 1964, rails accounted for 70 percent of the nation’s passenger travel. Today, it has many more high-speed lines, but rails account for well under 30 percent of passenger travel. Similarly, in 1980, before any high-speed rail had been built in Europe, rails accounted for 8 percent of western European passenger travel. Today, with high-speed trains in France, Germany, Italy, Spain, and other countries, rails account for about 6 percent of passenger travel.
The only truly high-speed maglev line in operation connects the Shanghai airport to downtown Shanghai, 19 miles away. Though the train has a top speed of 268 mph, it attracts enough passengers to fill only about 20 percent of its seats because, people say, it doesn’t go where they want to go.
Rail advocates argue that, given travel times to and from airports, high-speed rail can be competitive with air for downtown-to-downtown trips. But most people no longer live or work near downtowns. Given multiple airports around Washington, New York, Chicago, Los Angeles, San Francisco, and other cities, most people are still going to find air travel faster, not to mention less expensive (unless taxpayers also subsidize rail operating costs). The main people who work downtown today are bankers, lawyers, government bureaucrats, and lobbyists–not exactly the first people you think of when asked who deserves a transportation subsidy from taxpayers.
So if taxpayers spend $117 billion on Amtrak’s plan for high-speed rail between Boston and Washington, or $165 billion on a maglev line over the same route, we can expect that nearly all the passengers on these trains will be people who would have otherwise taken earlier Amtrak trains. To cover operating costs, fares will be so high that only the wealthy will ride the trains: While Megabus charges about $15 to go from New York to Washington, Amtrak currently charges about $150 to ride its Acela over the same route, and that $150 doesn’t pay for the capital or maintenance costs needed to keep the trains running.
Meanwhile, Eric Jaffe at The Atlantic argues that Republicans killed Obama’s high-speed rail plan simply in order to discredit the administration. In fact, Obama’s plan would have been a fiscal disaster, ultimately costing taxpayers close to $1 trillion to provide a disconnected transportation system that few would have used. While the Interstate Highway System, which was entirely self-funded out of gas taxes and other user fees, connects all major urban areas and carries about 20 percent of all passenger travel and more than 10 percent of all freight in the United States, Obama’s high-speed rail system would have been lucky to carry 1 percent of passenger travel.
New transportation technologies are successful when they are faster, more convenient, and less expensive than existing technologies. Maglev and conventional high-speed rail are less convenient than driving, slower than flying, and far more expensive than either. Far being an idea whose time has arrived, they are an idea that has already left the station.
People shouldn’t be surprised about the botched roll-out of Obamacare and all the damaging effects of the law that are now generating headlines. Over the decades, federal efforts to subsidize and manipulate the economy have failed over and over again.
That lesson has been driven home to me in researching Downsizing Government. Farm policies, for example, have been an ongoing boondoggle for more than eight decades. President Herbert Hoover’s Federal Farm Board blew $500 million trying to stabilize crop markets, but it did the opposite by inducing overproduction and depressing prices. Every farm bill since then—including the one moving through Congress right now—has been based on two very dumb ideas: that farm businesses need welfare and that agriculture needs government central planning.
I recently came across “The Sickness of Government,” (PDF) a 1969 essay by famed management theorist Peter Drucker. It is strikingly relevant to the problems we see in Washington today from Obamacare, to farm programs, to IRS abuse, to NSA spying. Unlike, say, Ayn Rand–who at the time was writing about government from the standpoint of individual freedom–Drucker was writing from the practical perspective that Big Government simply wasn’t working.
Here are some excerpts from Drucker, but his whole essay is worth reading:“Government surely has never been more prominent than today. The most despotic government of 1900 would not have dared probe into the private affairs of its citizens as income tax collectors now do routinely in the freest society. Even the tsar’s secret police did not go in for the security investigations we now take for granted.”
“For seventy years or so – from the 1890’s to the 1960’s – mankind, especially in the developed countries, was hypnotized by government. We were in love with it and saw no limits to its abilities, or to its good intentions.”
“This belief has been, in effect, only one facet of a much more general illusion from which the educated and the intellectuals in particular have suffered: that by turning tasks over to government, conflict and decision would be made to go away. Once the “wicked private interests” had been eliminated, a decision as to the right course of action would be rational and automatic. There would be neither selfishness nor political passion. Belief in government was thus largely a romantic escape from politics and from responsibility.”
“The greatest factor in the disenchantment with government is that government has not performed. The record over these last thirty or forty years has been dismal. Government has proven itself capable of doing only two things with great effectiveness. It can wage war. And it can inflate the currency.”
“The best we get from government in the welfare state is competent mediocrity. More often we do not even get that; we get incompetence such as we would not tolerate in an insurance company. In every country, there are big areas of government administration where there is no performance whatever – only costs.”
“Modern government has become ungovernable. There is no government today that can still claim control of its bureaucracy and of its various agencies. Government agencies are all becoming autonomous, ends in themselves, and directed by their own desire for power, their own narrow vision rather than by national policy.”
“We are very good at creating administrative agencies. But no sooner are they called into being than they become ends in themselves, acquire their own constituency as well as a “vested right” to grants from the treasury, continuing support by the taxpayer, and immunity to political direction. No sooner, in other words, are they born than they defy public will and public policy.”
“Nothing in history, for instance, can compare in futility with those prize activities of the American government, its welfare policies and its farm policies. Both policies are largely responsible for the disease that they are supposed to cure.”
In the essay, Drucker’s solution for government is decentralization and “reprivatization,” which today is called privatization. Based on his views in this article, he is no libertarian. His conclusions about government are practical in nature, stemming from his long experience studying how organizations work.
I find it depressing that more people don’t share my understanding of individual freedom, the Constitution, and limited government. But it is also depressing that Drucker-style common sense ideas about government failure have so little penetrated the nation’s governing elite. After all these decades, too many people are still “in love” with government and, indeed, “hypnotized” by it, as Drucker noted.
For more of Drucker’s analysis of government, see this 1995 article on Al Gore’s Reinventing Government effort.
If you think that Western welfare states are in a pickle, imagine what they would look like if, instead of transferring money, governments tried to help people by giving all of them free or cheap stuff. One does not need to be an economist to see the inefficiency of in-kind transfers, but many countries use redistribution of stuff – typically in the form of commodity subsidies – as the main tool of redistribution and social assistance.
In Egypt, the government subsidizes the prices of fuels and certain food products at artificially low levels. Obviously, the wealthy – who can afford to consume more of the subsidized commodities – are the largest beneficiaries of the subsidy system. In urban areas of Egypt, for example, the top quintile of the income distribution receives eight times as much in energy subsidies as the bottom quintile.
As I argue in a new Cato Policy Analysis published today, commodity subsidies are behind Egypt’s fiscal meltdown – the country is currently running a deficit of 15 percent of GDP, while being kept afloat only by the inflow of funds from the Gulf countries. To avert a looming fiscal catastrophe, Egyptian policymakers need to act now. The paper, which I also summarize here, provides a list of recommendations about how the reform should be approached:
Firstly, [the reform] will have to be quick and complete – unlike the partial adjustments that were made to subsidy programmes in the past. Every failed reform attempt causes Egyptian rulers to lose some of their credibility. If yet another partial reform is tried, people will simply refuse to take it seriously and instead demand, perhaps in a violent way, the preservation of the status quo.
Secondly, a successful reform will have to come as a part of a broader package of structural reforms. Egypt’s energy markets are marked by heavy government involvement and lack of competition. Simultaneously, the patterns of Egyptian food prices display strong downward rigidities, with domestic prices not falling even when international prices do. That is a sign of uncompetitive, inflexible markets.
Thirdly, it is unreasonable to expect Egyptians to buy into the subsidy reform if the government does not commit to sharing its benefits with the population. Such commitment can take the form of cash transfers that would replace the existing commodity subsidies. After all, the enormous size of subsidy spending creates large opportunities for fiscal savings and for fairly generous payments to those in need. The government could essentially save half of its subsidy spending and still be able to pay every Egyptian household a sum of $373 annually. Or, with a basic system of means-testing in place, it could pay the poorest 40 per cent of households $933 every year while still spending only one half of what it currently spends on subsidies. That may sound modest, but Egypt’s GDP per capita is only slightly above $3,000, and one quarter of the country’s population is living on less than $37 a month.
You can download my new policy analysis here.
During the hullaballoo around the government shutdown, the Washington Examiner published a jaw-dropping series of stories about blatant waste in an obscure federal agency called the Federal Mediation and Conciliation Service. These stories shouldn’t be missed.
Reporter Luke Rosiak writes:
One federal employee leased a $53,000 take-home car with taxpayer money in apparent defiance of federal regulations and regularly billed the government for service at shops such as BMW of Fairfax.
Others charged the government monthly for family members’ cell phones and high-end TV packages and Internet at home — and even at second homes.
Managers freely made out checks to employees without requiring documentation of how it would be spent, giving $1,316 directly to one who said she was reimbursing herself for furniture she bought for a “home office” and using convenience checks to give workers bonuses.
Federal bureaucrats dole themselves these perqs in an agency where the median annual salary is already $120,000. Federal pay, of course, is something Chris Edwards has highlighted for a long time.
Rosiak’s stories on FCMS are worth a read. Their worth more than that—like maybe some congressional oversight. Because internal oversight is failing.
“With three whistle-blowers gone,” he concludes, “there is little indication that the spending abuses have stopped.”
Four months after the military takeover in Egypt, the country’s economy is still a train wreck. With growth well below government forecasts, the budget deficit in 2013/2014 may get to 15 percent of GDP, bringing Egypt into truly dangerous territory, unless the inflow of aid from the Gulf countries continues indefinitely. And instead of reforms, there are discussions of a new stimulus plan, worth $3.6 billion.
Nor are there many reasons for optimism in the political arena. Mohamed Morsi appeared in court on Monday, charged with inciting violence and murder. If convicted, he can face the death penalty. Unsurprisingly, the trial, alongside with the ongoing crackdown on the Muslim Brotherhood, has fostered further violent protests in Cairo.
However, if instead of following the news, one listened to U.S. officials, one could not avoid the impression that everything is going swimmingly. Today’s Washington Post has a brilliant editorial describing the state of denial in the administration:
Not surprisingly, a Freedom House report released Monday concludes that “there has been virtually no substantive progress toward democracy … since the July 3 coup,” despite the military regime’s supposed “road map.” But that’s not how Secretary of State John F. Kerry sees it. “The road map is being carried out to the best of our perception,” he pronounced during a quick trip to Cairo on Sunday. A liberal constitution and elections? “All of that is, in fact, moving down the road map in the direction that everybody has been hoping for.”
A large part of the Egyptian problem is that the U.S. government is convinced that continued support to Egypt’s generals serves American interests in the region and will contribute to political and economic stability in the country—which is why the administration is keen, to use Mr. Kerry’s words, to “restore the full measure of the relationship that existed previously.”
The idea that U.S. support for the military—however inept and power-hungry it may be—serves American interests is misguided. The only thing that the unscrupulous political and financial commitment to the autocratic elite in Egypt achieves is that it harms the Egyptian people, fuels anti-American sentiments in the region, and erodes any moral high ground the United States might have once occupied.
It’s very expensive to visit many cities in the United States. New York City is perhaps the most expensive, not only because of the finite space in such a densely populated city, but because of numerous taxes on lodging and regulations like rent control that artificially create lodging shortages.
Nevertheless, there is still high demand to visit cities like New York and the market has found a way to make those visits more affordable. AirBnB is an online service that allows members to stay in people’s spare rooms, apartments, and homes in cities all over the world, often much more cheaply than the average hotel stay in the area.
New York State Attorney General Eric Schneiderman, however, is challenging the entrepreneurial innovation—probably under pressure from special interests who would like the government to stifle their competition. This is crony capitalism as usual. As we’ve seen here in DC, established businesses like brick and mortar restaurants and taxicab drivers use their connections to government to squeeze out competition like food trucks and the Uber personal car service that challenge the status quo.
Cato has long supported free markets, entrepreneurship, and innovations to make goods and services more affordable. Government overreach like General Schneiderman’s campaign punishes not only AirBnB hosts and travelers, but also the New York economy as a whole as fewer people will be able to visit New York. I was on Fox Business last night talking about this protectionist government overreach. You can watch that here:Watch the latest video at video.foxbusiness.com
Current Wisdom: Observations Now Inconsistent with Climate Model Predictions for 25 (going on 35) Years
Paul C. "Chip" Knappenberger and Patrick J. Michaels
The Current Wisdom is a series of monthly articles in which Patrick J. Michaels and Paul C. “Chip” Knappenberger, from Cato’s Center for the Study of Science, review interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.
Question: How long will the fantasy that climate models are reliable indicators of the earth’s climate evolution persist in face of overwhelming evidence to the contrary?
Answer: Probably for as long as there is a crusade against fossil fuels.
Without the exaggerated alarm conjured from overly pessimistic climate model projections of climate change from carbon dioxide emissions, fossil fuels—coal, oil, gas—would regain their image as the celebrated agents of prosperity that they are, rather than being labeled as pernicious agents of our destruction.
Just how credible are these climate models?
In two words, “they’re not.”
Everyone has read that over the past 10-15 years, most climate models’ forecasts of the rate of global warming have been wrong. Most predicted a hefty warming of the earth’s average surface temperature to have taken place, while there was no significant change in the real world.
But very few people know that the same situation has persisted for 25, going on 35 years, or that over the past 50-60 years (since the middle of the 20th century), the same models expected about 33 percent more warming to have taken place than was observed.
We can blame the lack of public awareness of this scientific farce squarely on the U.N.’s Intergovernmental Panel on Climate Change (IPCC). In the Summary for Policymakers, the most-read section of its brand new Fifth Assessment Report (released back in late September), the IPCC had this to say about climate model performance:
Climate models have improved since the [Fourth Assessment Report published in 2007]. Models reproduce observed continental-scale surface temperature patterns and trends over many decades, including the more rapid warming since the mid-20th century and the cooling immediately following large volcanic eruptions (very high confidence).
Followed immediately by this:
The long-term climate model simulations show a trend in global-mean surface temperature from 1951 to 2012 that agrees with the observed trend (very high confidence). There are, however, differences between simulated and observed trends over periods as short as 10 to 15 years (e.g., 1998 to 2012).
All in all, a rather glowing assessment.
Glowing, but not so hot.
We’ve calculated the trend in the global average surface temperature simulated to have occurred starting in every year since 1950 and ending in 2012 for every* run of every climate model used in the new IPCC report. In Figure 1, we compare the average (and spread) of these 106 model runs with the observed trend during each of the same periods.
In every single case, the observed trend lies below the model average trend. For the trends of length 16, 17, 18, 19, 20, 21, 22, 23, 24, and 27 years, the observed trend lies outside (below) the range which includes 95 percent of all model runs (indicated by red in Figure 1). In statistics, this means that the observed trend is inconsistent with the collection of model trends. For trends of length 10, 11, 12, 25, 26, 28, 29, 30, 31, 32, 33, and 34 years, the observed trend lies outside (below) the range encompassing 90 percent of all model trends (indicated in yellow in Figure 1). We call this marginally inconsistent with the models. For trends of length 13, 14, 15, and all lengths greater than 34 years, the observed trend is consistent with the collection of model trends (indicated by green in Figure 1), although it lies pretty far out in the low end of model projections in every case.
For what it’s worth, this same IPCC report has verbal descriptors of their published probability figures. When they say something has a 90 percent probability, it is “virtually likely” (whatever the heck that means!), and a 95 percent probability is “extremely likely.” So, analogously, one could apply those same words to our 90 and 95 percent probabilities of model failure over certain lengths of time. But because English is our primary language, we’re stating that the models are “marginally inconsistent” and “clearly inconsistent” with reality in these periods.
This hardly seems to fit the IPCC description that “[m]odels reproduce observed continental-scale surface temperature patterns and trends over many decades” or is grounds for having “very high confidence” that the “model simulations show a trend in global-mean surface temperature from 1951 to 2012 that agrees with the observed trend.”
And things aren’t going to get better anytime soon (if ever). In fact, they are about to get much worse.
That’s because the longer global temperatures just sort of plod along without rising much (new research suggests that such a period may extend for another 20 years or so), the more established (and entrenched) the observed/model mismatch becomes.
In Figure 1, below, our analysis ended with the last full year of available data, 2012. With three-quarters of 2013 already in the books, we can make a pretty good guess as to what the global average temperature anomaly is going to be at years’ end, and perform the same analysis we described above, but ending in the year 2013 instead of 2012. By the looks of things, 2013 is going to continue the string of years (going on 17 now) during which there has been virtually no change in the global average temperature and thus making the model performance even worse.
Figure 2, right, gives the updated result.Figure 2. Same as Figure 1, except the end year for the trend calculations is 2013.
For data ending in the year 2013, the category of marginal inconsistency extends out to 37 years and is now flirting with lengths exceeding 50 years, and trends of lengths 11-28, 31, 33, and 34 (!) are clearly inconsistent with the climate model simulations.
In other words, over the past third of a century—the period with the greatest amount of anthropogenic greenhouse gas emissions—the behavior of the real world (i.e., reality) falls far below the average expectation of climate models and, in fact, is clearly inconsistent with the range of model results. Less than 2.5 percent of model runs show that global warming is really global luke warming to the degree that real-world observations indicate.
Basically, the models don’t work.
This reality ought to be enough to stop the anti-fossil fuel (via carbon dioxide emission restrictions) crusaders in their tracks.
But thus far, it hasn’t, aided in part by the obfuscations of the United Nations (through the IPCC reports) and our own federal government (via reports such as the National Assessment of Climate Change).
If the people currently in charge of these organizations can’t face reality, then it is high time to replace them with others who can.
* We should say, every run that was available through the Climate Explorer website. Climate Explorer had 106 individual model runs, while the IPCC states it has 113 (we have been unable to identify the other 7 runs). The difference should have minimal impacts on our analysis.
Daniel J. Mitchell
Being a glass-half-full kind of guy, I look for kernels of good news when examining economic policy around the world. I once even managed to find something to praise about French tax policy. And I can assure you that’s not a very easy task.
I particularly try to find something positive to highlight when I’m a visitor. While in the Faroe Islands two days ago, for instance, I wrote about that jurisdiction’s new system of personal retirement accounts.
And now that I’m in Iceland, I want to focus on spending restraint.
As you can see from this chart, lawmakers in this island nation have done a reasonably good job of satisfying the Mitchell Golden Rule over the past couple of years. Nominal economic output has been growing by 6.1 percent annually, while government spending has risen by an average of 2.8 percent per year.
If Iceland continues to enjoy this level of growth and can maintain this modest degree of fiscal discipline, the burden of government spending will soon drop below 40 percent of GDP.
As I’ve noted before, fiscal progress can occur very rapidly if spending is curtailed. Consider what’s happened, for example, over the past two years in America. Total federal spending didn’t grow in 2011 or 2012, and that de facto two-year spending freeze has led to a big reduction in the size of the public sector relative to GDP.
And because policymakers addressed the underlying disease of excessive spending, it’s no surprise that the symptom of red ink became much less of a problem with the deficit falling by almost 50 percent in those two years.
And nations such as New Zealand and Canada also have enjoyed quick benefits when limiting the growth of government.
Now let’s take a glass-half-empty look at Icelandic fiscal policy.
First, Iceland isn’t really moving in the right direction. Policymakers are merely undoing the damage that occurred in the latter part of last decade. As recently as 2006, the burden of government spending was less than 42 percent of GDP. So the current period of fiscal discipline is like going on a diet after spending several years at an all-you-can-eat dessert shop.
Second, three years of spending restraint could be a statistical blip rather than a long-run trend, especially since the 2014 numbers from the IMF are an estimate and the 2012 and 2013 numbers aren’t even finalized.
What Iceland needs is some sort of Swiss-style spending cap to impose long-run limits on the growth of government spending. As you can see from this second chart, Switzerland’s “debt brake” has produced more than ten years of spending restraint. Government generally has been growing slower than the private sector, which means that burden of government spending has been falling in Switzerland while other European nations are moving in the wrong direction.
By the way, it’s not just Iceland that would benefit from this type of spending cap. I explained last year that America would never have experienced trillion-dollar deficits if we had something similar to the Swiss debt brake.
Though it’s important not to overstate the benefits of this policy. A Swiss-type spending cap presumably wouldn’t have stopped the Fed’s easy-money policy. Nor would it have prevented Fannie Mae and Freddie Mac from subsidizing a housing bubble. So we presumably still would have suffered a financial crisis.
But that’s not an argument against a spending cap. We lock our doors and latch our windows even though we realize that determined crooks can still break in. But at least we want to make our homes a less inviting target. Likewise, a spending cap doesn’t preclude all bad policies. But at least it makes it harder for politicians to increase spending.
The ultimate challenge, of course, is figuring out how to convince politicians to tie their own hands. The academic research suggests that spending caps need to be well designed if we want to limit the greed of the political class.
Iceland has made some progress, but Switzerland at this point is a better role model because the debt brake has been very durable.
P.S. If we’re going to copy Switzerland, we also should take a close look at their tax laws. Switzerland has the best ranking in the Tax Oppression Index, while the United States languishes in the bottom half of nations measured.
We have now had 100 years of central banking. So what do we have to show for it? Has the Federal Reserve been worth it? If not, what should we do?
That’s the topic of this month’s Cato Unbound. Our panel will present a variety of viewpoints, starting with Cato Senior Fellow Gerald P. O’Driscoll, Jr., who argues that a central bank is unnecessary in a classical regime of commodity money and free banking. Central banks are only needed, he argues, when governments want to spend beyond their means. He recommends returning to fiscal discipline and then to commodity money, under which a central bank will be unnecessary.
Opinions do differ on these questions, of course, and we will also hear from George Mason University Professor Lawrence H. White, Bentley University Professor Scott Sumner and former Cleveland Federal Reserve President Jerry L. Jordan. Readers are invited to submit comments and to follow us on Twitter and Facebook for regular updates and discussion.
Ted Galen Carpenter
While media attention has focused on such matters as the Obama Care roll-out fiasco and the civil war in Syria, developments in Iraq are becoming increasingly ominous. Sectarian violence there has reached levels not seen since the chaotic days of 2006-2007. Some 7,000 people have perished so far in 2013, and the total for October alone was just shy of 1,000. Since Iraq’s population is a mere 25 million, a comparable death toll in the United States would be nearly 13,000 for October and nearly 90,000 for the current calendar year. As I note in a recent article in Gulan, Iraq is now in the throes of a low-intensity, but very real, civil war between Sunni and Shiite factions.
Because the last units of U.S. troops were withdrawn from Iraq at the end of 2011, this country is not directly involved in the crisis—in marked contrast to the earlier sectarian conflict. We need to keep it that way. Iraqi Prime Minister Nouri al-Maliki, however, is maneuvering to draw the United States into the renewed fighting, asking the Obama administration to increase military assistance to Baghdad—including supplying his government with Apache attack helicopters for offensives against “Sunni militants.”
That term is a code for “Al Qaeda,” but we need to recognize that Maliki has every incentive to portray his aid request in that fashion, even though the nature of Iraq’s turmoil is far more complex than a mere struggle against terrorism. The conflict in Iraq is an internal power struggle between Maliki’s Shiite-led government and disgruntled Sunni factions, some of whom supported Saddam Hussein. Even more important, it is part of a Sunni-Shiite power struggle throughout the Middle East. Not only is that sectarian division a major factor in the ongoing civil war next door in Syria, but it is showing up in such places as Bahrain and Yemen as well.
U.S. leaders need to keep the United States on the sidelines of an increasingly nasty sectarian conflict. Unfortunately, the Obama administration seems receptive to Baghdad’s siren call. Providing Maliki’s regime with extensive military aid may make Washington’s policy in the region even more incoherent than it is now. A prominent U.S. objective has been to weaken Iran, the principal Shiite power in the Middle East. That goal is a major reason for Washington’s hostility toward Bashar al-Assad’s regime in Syria and the willingness to assist rebel forces seeking to oust him. Assad is a key ally of Tehran. But Maliki also has been extremely cooperative with Iran as well, and both Assad and Maliki head Shiite-controlled governments.
If Washington steps up military assistance to Maliki, we will be in the bizarre position of simultaneously aiding Sunni-led militants in Syria while helping the Iraq government suppress Sunni-led militants in that country. That is a reasonably good operational definition of an incoherent foreign policy.
The United States has nothing to gain by becoming entangled in the emotional, bloody Sunni-Shiite power struggle in Iraq and elsewhere in the Middle East. The Iraq quagmire is beckoning again, but this time we should have the wisdom to resist that invitation. Losing more than 4,400 American lives and wasting nearly a trillion dollars in taxpayer money the first time around was more than enough of a tragedy.
For two weeks most Americans didn’t notice that the federal government had closed. Other nations complained that the shutdown undercut America’s position as a great power, but Americans must debate fundamental issues despite the criticism of foreign governments.
Some analysts worried that the partisan budget deadlock would ruin America’s international reputation. For instance, Sina Toossi of Foreign Policy in Focus argued: “It is clear that politicking in Washington is reaching the point where consequential damage is being done to the broader and longer term national interests of the United States.”
Secretary of State John Kerry joined the America-bashing. He warned that if the partial shutdown was “prolonged or repeated,” people might question America’s ability to “stay the course” and whether the U.S. can “be counted on.”
The shutdown may have been a foolish political tactic, but such hand-wringing was silly. For all of the drang und sturm in Washington, people elsewhere barely noticed. American politicians looked stupid, but that’s nothing new. International policies, treaties, and alliances remained unchanged.
Even more important, nothing changed outside of government. The U.S. economy remained the world’s largest and most productive. American entrepreneurs continued to circle the globe looking for business opportunities. U.S. culture continued to hold sway most everywhere people travel and electromagnetic waves reach. American people continued to visit other nations as tourists, athletes, missionaries, educators, and humanitarians. The world didn’t wait on the U.S. since the American people didn’t wait on their government.
President Obama did cancel a trip to Asia. Aleksius Jemadu of Indonesia’s Pelita Harapan University opined that the “Obama administration has to convince again partners in Asia that the United States is really serious about the plan to focus on Asia.” Shihoko Goto of the Woodrow Wilson International Center similarly contended that even a friend like Japan is “beginning to regard Washington’s political impasse as the beginning of the end of U.S. influence in the region.”
Yet Washington’s Asia policy remained the same. U.S. military forces continued to provide what amounts to defense welfare to prosperous and populous allies throughout the Asia-Pacific. (Unfortunately!)
Of course, the president missed some meetings. But most of the work at international gatherings is done by staff, and none of the president’s planned trips were particularly important. The Secretaries of State and Commerce—officials more influential than the heads of state and government of most other nations—attended the largest gathering. Moreover, political leaders the world over routinely forgo foreign travel in response to domestic political crises.
Still, Secretary Kerry was worried: “The question no longer is whether our politics stops at the water’s edge, but whether our politics stops us from providing the leadership that the world needs.”
Yet a world so utterly dependent on the U.S. is not good for the U.S., let alone the rest of the world. In fact, American and foreign leaders alike hype Washington’s importance for their own ends. U.S. officials enjoy their supposed indispensability and bask in lavish attention accorded by other states. Foreign governments enjoy foisting their most difficult problems on America while benefiting from all manner of financial and military subsidies.
American Security Project’s August Cole complained that “America is losing its ability to lead globally on the strength of its actions and ideas, to support a vibrant free-market system, to nurture a responsive democratic political system and to uphold a social contract that honors economic and social progress.”
The nation’s vibrant free-market system and responsive democratic system are under serious threat, but not from the recent political battle. The danger comes from ever more expansive government.
For instance, Washington’s take over of American health care is bending the cost curve up. By inflating health insurance expenses government is threatening economic growth and job creation. By raising government costs the Obama program is weakening federal finances. Finally, by imposing unpopular legislation amid a cascade of lies—such as that everyone could keep their own insurance if they wanted—the administration is undercutting American democracy.
While the shutdown was counterproductive, only political vigilance and concerted action can preserve a vibrant market economy and responsive political democracy. That battle must be fought even if other nations look askance at the result. What other think matters far less than preserving liberty at home.
Daniel J. Mitchell
I’m currently in the Faroe Islands, a relatively unknown and semi-autonomous part of Denmark located in the North Atlantic. Sort of like Greenland, but too small to appear on most maps.
I’m in this chilly archipelago for a speech to the annual meeting of the Faroese People’s Party. According to Wikipedia, “the party is supportive of the economic liberalism.” But liberal in this context is classical liberal, so they’re my kind of people.
The current government of the Faroe Islands, which includes the People’s Party, has modernized its Social Security regime with a system of personal retirement accounts. Starting next January, workers will begin setting aside some of their income to finance a comfortable retirement income. When fully implemented, workers will be putting 15 percent of their income in their accounts, creating a system that’s even larger than the private retirement models in Australia and Chile.
So why did Faroese politicians take this step? Well, unlike politicians in most nations, they looked at the long-run data, saw that they had an aging population, realized that a tax-and-transfer scheme no longer could work, and decided to reform now instead of waiting for the old system to collapse.
Here’s a chart put together by the Nordic Council. As you can see, the Faroe Islands were (and other jurisdictions are) heading to an intolerable and unsustainable situation of too few workers and too many retirees.
By the way, the same situation exists in the United States.
Our population is aging, the Baby Boomers are going into retirement, and birth rates have dropped. Our long-run numbers aren’t as grim as some other nations, but our Social Security system is basically insolvent.
Indeed, Social Security’s long-run deficit is measured in trillions, not billions. According to the most recent Trustee’s Report, deficits over the next 75 years are expected to equal $36 trillion. And that’s after adjusting for inflation!
For what it’s worth, if a private insurance or pension company kept its books in the same was as Social Security, it would be forced into bankruptcy and its managers would be indicted for fraud..
But when politicians operate a Ponzi Scheme, we’re supposed to applaud them for compassion!
This is why it might be worth the cost if we sent the politicians in Washington on a junket (using their taxpayer-financed fleet of luxury jets) to Torshavn, the Faroese capital. They could eat some lamb and fish and learn what it’s like to responsibly address a problem before it becomes a crisis.
Or we could save the money and simply force them to watch my video on personal retirement accounts.Saving Social Security with Personal Retirement Accounts
P.S. In you like gallows humor, you can enjoy some Social Security cartoons here, here, and here. And we also have a Social Security joke, though it’s not overly funny when you realize it’s a depiction of reality.
P.P.S. You probably don’t want to know how Obama would like to “fix” the Social Security shortfall.
P.P.P.S. On Monday, I continue my tour of the North Atlantic with a speech in Iceland on the Laffer Curve. I don’t know if I’ll say anything memorable, but I’ll use the opportunity to learn more about some of that nation’s policies, including their very successful privatized fishery system. Iceland has some bad policies, of course, but it’s also worth noting that they wisely have rejected membership in the European Union, they’ve reduced the burden of government spending in recent years, and they also made the right decision when they decided (with help from an outraged electorate) to limit bailouts when their banks went bust. You won’t be surprised to learn, though, that the Paris-based OECD has been using American tax dollars to advocate bad fiscal policy in Iceland.
Relevant foresight from Swedish economist Assar Lindbeck, “Hazardous Welfare State Dynamics,” American Economic Review, May 1995:
The basic dilemma of the welfare state … is that the more generous the benefits, the greater will be not only the tax distortions but also, because of moral hazard and benefit cheating, the number of beneficiaries. This is a field where Say’s Law certainly holds in the long run: the supply of benefits creates its own demand… .
Serious benefit-dependency, or ‘learned helplessness’, may … emerge only in a long-run perspective. Possible examples of such gradual adjustments are an increased tendency to apply for social assistance, less job search and greater choosiness among unemployed workers, more absence from work for alleged health reasons, more applications for (subsidized) early retirement due to alleged inability to work, and more time and effort devoted to tax avoidance and tax evasion.
P.S. A 2007 empirical study by Friedrich Heinemann supported Linbeck’s hypothesis, finding that “transfer expansion or increasing unemployment tend to be associated with a larger readiness of the country’s population to cheat on benefits.”
The U.S. Senate is expected to vote Monday on the Employment Non-Discrimination Act (ENDA), a bill to “prohibit employment discrimination on the basis of sexual orientation or gender identity” that’s been proposed in one form or another for nearly 40 years. It will be a symbolic vote at many different levels. First, the bill stands little chance of passage in the GOP-controlled House; the point of giving it prolonged attention now is more to inflict political damage on Republicans for resisting a popular measure than to get a bill on President Obama’s desk. Second, it seeks to ratify (and take political credit for) a social change that has already occurred through nearly all the country, including even very conservative locales. Most larger employers are now on record with policies against discriminating against gay employees, and even smaller employers without formal policies mostly hew to the same path in practice, for many good reasons that include not wanting to lose the talents of employees from any demographic.
ENDA is a less salient bill than it looks in a second way as well; statistics from the many states and municipalities that have passed similar bills (“mini-ENDAs”) indicate that they do not serve in practice as a basis for litigation as often as one might expect. This may arise from the simple circumstance that most employees with other options prefer to move on rather than sue when an employment relationship turns unsatisfactory, all the more so if suing might require rehashing details of their personal life in a grueling, protracted, and public process. The forbidden group categories that tend more to drive HR managers crazy are things like age, disability, and criminal record consideration, where the law regularly tries to forbid behavior that in fact is perfectly rational for employers to engage in.
On a level of sheer entertainment, the bill has certainly furnished more than one way for some conservatives and Republicans to make themselves appear ridiculous. Some GOP supporters in Congress, for example, seem to be tempted by ENDA as an “easy,” crowd-pleasing vote to show they’re not always on the anti-gay side. But consider the implication: lawmakers who take this path come across as willing to sacrifice the freedom of private actors—as libertarians recognize, every expansion of laws against private discrimination shrinks the freedom of association of the governed—even as they go to the mat to preserve disparate treatment by the government itself in the recognition of family relationships. Sorry, but that’s upside-down. A classical liberal stance can reasonably ask the government itself to behave neutrally among different citizens with their differing values and aspirations, but should not attempt to enforce neutrality on private citizens themselves.
One may also smile to see some implacable Culture War conservatives suddenly emerge as “Libertarians for a Day” when it comes to adding gays to the list of protected categories. Race aside, few among them have previously crusaded against the earlier inclusion of categories like age, marital status, pregnancy, or, say, religious affiliation.
And yet at some point we do need to stop adding new groups to the parade—either that, or see freedom of association turn into a presumption of something else. At what point do we say no to future demands that protected-group status be accorded to employees based on political and controversial systems of belief, physical appearance (the “looksism” issue), family responsibilities, résumé gaps because of unemployment or other reasons, or use of lawful products or engagement in lawful activities in off hours—to name just a few of the areas that in fact have been the subject of real-world agitation in recent years? If we say yes to all, we introduce a new presumption—familiar from the prevailing labor law in parts of Europe—that no employer should be free to terminate or take other “adverse action” against an employee without being prepared to show good cause to a judge. That is exactly the goal of some thinkers on the Left, but it should appall believers in a free economy.
That’s reason enough to oppose ENDA, as I see it.
Thank goodness for whistleblowers in the government, whether regarding intelligence activities or the mundane bureaucratic waste that occurs in every department. Congress does a generally pathetic job of oversight and presidential administrations are rarely transparent—despite their promises. So the citizens who pay for our $3.6-trillion government rely on federal workers who witness illegal and unethical activities to come forward and inform the press.
Federal employees at the Department of Homeland Security call it the “candy bowl,” a pot of overtime money they have long dipped into to pad their pay even if they haven’t earned it, whistleblowers say. This practice, which can add up to 25 percent to a paycheck, has become so routine over the last generation that it’s often held out as a perk when government managers try to recruit new employees…
The problem with government is that bad behaviors and anti-productive cultures become engrained over time because there is no built-in mechanism to rout it out. In the private sector, that is the role of profit-seeking and competition.
More from the Post:
“It’s pickpocketing Uncle Sam,” [whistleblower] Ducos Bello said in an interview. “Employees will sit at their desks for an extra two hours, catching up on Netflix, talking to friends or using it for commuting time.” He estimated that 27 employees in the Commissioner’s Situation Room, which is part of Customs and Border Protection, improperly put in for a total of $696,000. They ranged from managers, who received up to $34,000 each, to border patrol agents, who received $24,500 each, he said. “It was such misuse that I felt I had a legal obligation to report. I will sleep better at night,” said Ducos Bello, a 24-year veteran of government employment.
Another whistleblower, Jimmy Elam, a supervisory paralegal specialist for Customs and Border Protection in San Diego, reported that eight administrative employees at his location received a total of $150,000 of improper [overtime pay] a year. “It happens day after day, year after year,” Elam said in an interview. “They are sometimes working, sometimes goofing off or just unaccountable completely.”
Thank you, Mr. Bello and Mr. Elam. You are patriots.
James Madison famously noted: “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”
Whistleblowers are one of those controls. They inform citizens not only how the government is feathering its own nest, but what the government is doing to us. Most federal departments have far too many tentacles manipulating the affairs of state and local governments, businesses, and individuals.
Stay tuned for upcoming analyses at DownsizingGovernment on slimming down DHS.
A recent blogpost published by Doug Kendall of the Constitutional Accountability Center (with whom we sometimes work with on op-eds and briefs) criticized Cato’s involvement in Mount Holly v. Mount Holly Gardens Citizens in Action as cowardly, and inconsistent with our ideals. While Cato has great respect for any organization that, like the CAC, works “to preserve the rights and freedoms of all Americans,” their criticism of our brief is baseless, and grossly mischaracterizes Cato’s position in the case and track record generally.
While I’m wary of misrepresenting the post through over-simplification, it can be boiled down to the following:
- Mount Holly is a case about eminent domain;
- Pro-property rights groups (including Cato) have a history of “howling” against eminent domain;
- Those groups’ failure to argue against eminent domain in this case (and their support of the Township of Mount Holly), is inconsistent with their previous stance on property rights, and evinces a lack of moral courage;
- That failure can be explained because this case is also about civil rights and equality, and conservative groups hate equality, and live to help the state further oppress the downtrodden masses.
CAC’s criticism stems from an incorrect framing of the case at hand:
an important case out of Mount Holly, New Jersey, that involves Fair Housing Act (FHA) claims in the context of an effort by Mount Holly Township to use eminent domain to redevelop its only predominately minority community—and in the process, displace and raze the homes of its residents.
While that description is accurate in that the case is important, originates in Mount Holly, and concerns the applicability of the Fair Housing Act to a redevelopment plan, the case before the Supreme Court has nothing to do with eminent domain. The question to be argued before high court couldn’t be plainer: “Whether disparate impact claims are cognizable under the Fair Housing Act.”
It’s surprising that CAC would make such a basic mistake about the case, given that they filed a brief in the case, supporting the Mount Holly residents (a brief which makes no mention of eminent domain – at all).
“Eminent domain” refers to a specific way that the government can acquire private property against the will of the owner. So far, Mount Holly Township hasn’t resorted to eminent domain. Of the 329 properties that the township wants to include in the redevelopment plan, it has been able to acquire all but 70 of them through voluntary sales. If those remaining 70 owners – some of whom are parties to the case – were to challenge any attempts to expropriate their homes, Cato would be first in line to file a brief in their support, probably joined by those “howling” pro-property groups like the Institute for Justice and Pacific Legal Foundation. (Sadly, it’s unlikely that we would garner CAC’s support, because the group has “long supported the reasonable use of eminent domain for redevelopment purposes.”)
No, this case isn’t about eminent domain because the residents aren’t challenging the township’s acquisition of property, but what it intends to do with that property. In a nutshell, the plaintiffs argue that the Fair Housing Act – which forbids governments and private individuals from refusing “to sell or rent … or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin” – bars not just intentional discrimination like restrictive covenants, but also any action that, even if entirely neutral and colorblind, has a “disproportionate impact” on the ability of members of a protected class to buy or rent a home. They argue not that Mount Holly is intentionally discriminating against minority residents, but that the increase in property values as a result of redevelopment would effectively price the poor out of the neighborhood – and that counts as discrimination because the poorer residents are disproportionately drawn from minority groups
Cato opposes that theory of law generally, for the same reason that we oppose governmental abuse of eminent domain: we stand firmly against attempts by the government to control how people may dispose of their property. A homeowner should be able to sell his house for whatever price he thinks fair – without worrying that if his asking price is too high, he’ll be accused of racism and forced to defend himself in court. Our position in Mount Holly is the product of the reasoned and consistent application of well-articulated liberal principles, not “cowardice.”
As a closing note, we take issue with the implication that Cato “detests civil rights statutes.” Cato supports laws that protect individual freedom and opposes those that don’t. We may disagree with CAC on whether a law falls in the first or second category, regardless of whether it’s a “civil rights” statute or otherwise, but make no mistake that we support individual civil (and other) rights.
Indeed, believe that the first and foremost duty of civil rights legislation (and constitutions) is to protect citizens from undue state interference with their daily lives and liberties. A reading of the FHA that embraces disparate impact claims doesn’t protect individuals from the state but instead represents an expansion of state interference. Behavior that was once lawful – selling your home for whatever price you wish – would become sanctionable. Disparate impact theory holds private individuals responsible not for personal bigotry, or the direct consequences of their actions, but for economic realities beyond their control – and that makes no one freer, nor more equal.
This blogpost was co-authored by Cato legal associate Gabriel Latner.
Just in time for Halloween, the Senate Intelligence Committee has produced fig-leaf legislation that entrenches indiscriminate collection of Americans’ phone and Internet records, but dressed it up in the costume of a surveillance reform bill designed to ban such collection. The “FISA Improvements Act” does contain some mild but generally positive transparency measures—somewhat ironically, given that the bill itself was marked up in secret. But the main provision deals with the NSA’s controversial bulk phone records program. According to the extraordinarily misleading press release, the law:
Prohibits the collection of bulk communication records under Section 215 of the USA PATRIOT Act except under specific procedures and restrictions set forth in the bill
This is almost precisely backwards. In fact, the bill for the first time explicitly authorizes, and therefore entrenches in statute, the bulk collection of communications records, subject to more or less the same rules already imposed by the FISA Court. It endorses, rather than prohibits, what the NSA is already doing. Moreover, it imposes those restrictions only with respect to bulk collection of communications records—which is dangerous, because it signals to the FISA Court that Congress implicitly endorses the use of Section 215 to collect other records in bulk without comparable restrictions. (The key phrase “acquisition in bulk,” incidentally, does not appear to be given any concrete definition.)
Perhaps most troubling, the bill contains a section stipulating that bulk orders for communcations records may not acquire the contents of any communications. That sounds good, right? The problem is, under canons of judicial interpretation, a narrow and explicit prohibition on getting content under bulk orders for communications records could easily be read to imply that content can be acquired via non-bulk orders, or even via bulk orders for other types of records. At present, it is not clear whether the statute allows for the acquisition of contents under 215, but there are strong arguments it does not—though, of course, I’d argue the Constitution would forbid this even if the statute didn’t. Under this law, though, a clever Justice Department lawyer could plausibly argue that a prohibition on content collection under one very specific type of 215 order would be senseless and redundant unless Congress intended for content to be accessible under 215 orders generally—and Courts generally have to interpret the law in a way that avoids making any provision redundant.
This is not at all a hypothetical concern. In 2006, Congress amended Section 215 to add special “protections” for educational and medical records. What Congress didn’t know is that, because those records are already protected under other federal laws, and 215 contained no language explicitly overriding those statutes, the Justice Department had determined that 215 simply could not be used to access those types of records—an interpretation that was reversed after the “protections” were added. Congress, in other words, inadvertently expanded the scope of 215 while trying to limit it—a fact that was discovered only later, when a report by the Inspector General revealed the unintended consequences of the amendment.
[W]e know in the months ahead we will be up against a “business-as-usual brigade” – made up of influential members of the government’s intelligence leadership, their allies in thinktanks and academia, retired government officials, and sympathetic legislators. Their game plan? Try mightily to fog up the surveillance debate and convince the Congress and the public that the real problem here is not overly intrusive, constitutionally flawed domestic surveillance, but sensationalistic media reporting. Their end game is ensuring that any surveillance reforms are only skin-deep.
The business-as-usual brigade have resigned themselves to the inevitability of some kind of NSA reform—but they’re clearly hoping some cosmetic changes, falsely billed as a “prohibition” on bulk collection, along with a few mild transparency tweaks, will preempt any more substantive reform. It’s an ingenious costume, but most assuredly more trick than treat.
That tune you hear is the sound of an ice cream truck arriving in Hades: Following vigorous denials that President Obama knew anything about U.S. eavesdropping on German Chancellor Angela Merkel or other allied leaders, Sen. Dianne Feinstein (D-NSA), has issued a blistering statement calling for a comprehensive review of intelligence programs:
Unless the United States is engaged in hostilities against a country or there is an emergency need for this type of surveillance, I do not believe the United States should be collecting phone calls or emails of friendly presidents and prime ministers. The president should be required to approve any collection of this sort.
It is my understanding that President Obama was not aware Chancellor Merkel’s communications were being collected since 2002. That is a big problem.
The White House has informed me that collection on our allies will not continue, which I support. But as far as I’m concerned, Congress needs to know exactly what our intelligence community is doing. To that end, the committee will initiate a major review into all intelligence collection programs.
As many have noted, it’s a little odd that surveillance of a foreign leader is more disturbing to Feinstein than bulk collection of her own constituents’ information. In part, Feinstein simply seems displeased that she wasn’t apprised of the surveillance—reminding us that perhaps the only really unforgivable intelligence sin is failing to show proper respect to a committee chair.
It’s also a recognition of the serious problems posed by international blowback against NSA’s overreach. American intelligence agencies have long benefitted enormously from the fact that foreign Internet traffic—even between two foreign countries—flows through the United States, and that American Internet services and Web hosts are extremely popular with foreign users and companies. Now, Brazil and other countries are mulling legislation that would require data be stored in their own jurisdictions, along with limitiations on intelligence sharing.
Beyond the economic harms this would impose—one recent study estimates the potential losses to American cloud computing firms at up to $35 billion over three years—it’s clearly contrary to the interests of the intelligence community itself to lose that access. It’s another reminder that the flourishing global Internet depends, to a great extent, on trust—and we may be starting to see the long-term consqeuences of undermining that trust.
Above all, though, it reminds us again that frequent claims that NSA’s activities are subject to “rigorous oversight by all three branches of government” really just mean that the Intelligence Committees get a fairly limited and rosy view of whatever programs the intelligence community sees fit to brief them on.
The global surveillance apparatus is so vast and complex that Congress, the FISA Court, and even the NSA itself cannot really hope to comprehend the entire system. As Director of National Intelligence James Clapper once told Congress, “There’s only one entity in the universe that has visibility on all [Special Access Programs]: That’s God.” Which, presumably, makes the Almighty a security risk: Recent reports allege that NSA has been wiretapping the pope as well.