Malaria, Politics and DDT. WSJ Editorial
The U.N. bows to the anti-insecticide lobby.
WSJ, May 25, 2009
In 2006, after 25 years and 50 million preventable deaths, the World Health Organization reversed course and endorsed widespread use of the insecticide DDT to combat malaria. So much for that. Earlier this month, the U.N. agency quietly reverted to promoting less effective methods for attacking the disease. The result is a victory for politics over public health, and millions of the world's poor will suffer as a result.
The U.N. now plans to advocate for drastic reductions in the use of DDT, which kills or repels the mosquitoes that spread malaria. The aim "is to achieve a 30% cut in the application of DDT worldwide by 2014 and its total phase-out by the early 2020s, if not sooner," said WHO and the U.N. Environment Program in a statement on May 6.
Citing a five-year pilot program that reduced malaria cases in Mexico and South America by distributing antimalaria chloroquine pills to uninfected people, U.N. officials are ready to push for a "zero DDT world." Sounds nice, except for the facts. It's true that chloroquine has proven effective when used therapeutically, as in Brazil. But it's also true that scientists have questioned the safety of the drug as an oral prophylactic because it is toxic and has been shown to cause heart problems.
Most malarial deaths occur in sub-Saharan Africa, where chloroquine once worked but started failing in the 1970s as the parasite developed resistance. Even if the drugs were still effective in Africa, they're expensive and thus impractical for one of the world's poorest regions. That's not an argument against chloroquine, bed nets or other interventions. But it is an argument for continuing to make DDT spraying a key part of any effort to eradicate malaria, which kills about a million people -- mainly children -- every year. Nearly all of this spraying is done indoors, by the way, to block mosquito nesting at night. It is not sprayed willy-nilly in jungle habitat.
WHO is not saying that DDT shouldn't be used. But by revoking its stamp of approval, it sends a clear message to donors and afflicted countries that it prefers more politically correct interventions, even if they don't work as well. In recent years, countries like Uganda, Tanzania and Zambia have started or expanded DDT spraying, often with the help of outside aid groups. But these governments are also eager to remain in the U.N.'s good graces, and donors typically are less interested in funding interventions that WHO discourages.
"Sadly, WHO's about-face has nothing to do with science or health and everything to do with bending to the will of well-placed environmentalists," says Roger Bate of Africa Fighting Malaria. "Bed net manufacturers and sellers of less-effective insecticides also don't benefit when DDT is employed and therefore oppose it, often behind the scenes."
It's no coincidence that WHO officials were joined by the head of the U.N. Environment Program to announce the new policy. There's no evidence that spraying DDT in the amounts necessary to kill dangerous mosquitoes imperils crops, animals or human health. But that didn't stop green groups like the Pesticide Action Network from urging the public to celebrate World Malaria Day last month by telling "the U.S. to protect children and families from malaria without spraying pesticides like DDT inside people's homes."
"We must take a position based on the science and the data," said WHO's malaria chief, Arata Kochi, in 2006. "One of the best tools we have against malaria is indoor residual spraying. Of the dozen or so insecticides WHO has approved as safe for house spraying, the most effective is DDT." Mr. Kochi was right then, even if other WHO officials are now bowing to pressure to pretend otherwise.
Monday, May 25, 2009
The president of the Dallas Fed on inflation risk and central bank independence
Don't Monetize the Debt. By Mary Anastasia O'Grady
The president of the Dallas Fed on inflation risk and central bank independence.
WSJ, May 25, 2009
Dallas
From his perch high atop the palatial Dallas Federal Reserve Bank, overlooking what he calls "the most modern, efficient city in America," Richard Fisher says he is always on the lookout for rising prices. But that's not what's worrying the bank's president right now.
His bigger concern these days would seem to be what he calls "the perception of risk" that has been created by the Fed's purchases of Treasury bonds, mortgage-backed securities and Fannie Mae paper.
Mr. Fisher acknowledges that events in the financial markets last year required some unusual Fed action in the commercial lending market. But he says the longer-term debt, particularly the Treasurys, is making investors nervous. The looming challenge, he says, is to reassure markets that the Fed is not going to be "the handmaiden" to fiscal profligacy. "I think the trick here is to assist the functioning of the private markets without signaling in any way, shape or form that the Federal Reserve will be party to monetizing fiscal largess, deficits or the stimulus program."
The very fact that a Fed regional bank president has to raise this issue is not very comforting. It conjures up images of Argentina. And as Mr. Fisher explains, he's not the only one worrying about it. He has just returned from a trip to China, where "senior officials of the Chinese government grill[ed] me about whether or not we are going to monetize the actions of our legislature." He adds, "I must have been asked about that a hundred times in China."
A native of Los Angeles who grew up in Mexico, Mr. Fisher was educated at Harvard, Oxford and Stanford. He spent his earliest days in government at Jimmy Carter's Treasury. He says that taught him a life-long lesson about inflation. It was "inflation that destroyed that presidency," he says. He adds that he learned a lot from then Fed Chairman Paul Volcker, who had to "break [inflation's] back."
Mr. Fisher has led the Dallas Fed since 2005 and has developed a reputation as the Federal Open Market Committee's (FOMC) lead inflation worrywart. In September he told a New York audience that "rates held too low, for too long during the previous Fed regime were an accomplice to [the] reckless behavior" that brought about the economic troubles we are now living through. He also warned that the Treasury's $700 billion plan to buy toxic assets from financial institutions would be "one more straw on the back of the frightfully encumbered camel that is the federal government ledger."
In a speech at the Kennedy School of Government in February, he wrung his hands about "the very deep hole [our political leaders] have dug in incurring unfunded liabilities of retirement and health-care obligations" that "we at the Dallas Fed believe total over $99 trillion." In March, he is believed to have vociferously objected in closed-door FOMC meetings to the proposal to buy U.S. Treasury bonds. So with long-term Treasury yields moving up sharply despite Fed intentions to bring down mortgage rates, I've flown to Dallas to see what he's thinking now.
Regarding what caused the credit bubble, he repeats his assertion about the Fed's role: "It is human instinct when rates are low and the yield curve is flat to reach for greater risk and enhanced yield and returns." (Later, he adds that this is not to cast aspersions on former Fed Chairman Alan Greenspan and reminds me that these decisions are made by the FOMC.)
"The second thing is that the regulators didn't do their job, including the Federal Reserve." To this he adds what he calls unusual circumstances, including "the fruits and tailwinds of globalization, billions of people added to the labor supply, new factories and productivity coming from places it had never come from before." And finally, he says, there was the 'mathematization' of risk." Institutions were "building risk models" and relying heavily on "quant jocks" when "in the end there can be no substitute for good judgment."
What about another group of alleged culprits: the government-anointed rating agencies? Mr. Fisher doesn't mince words. "I served on corporate boards. The way rating agencies worked is that they were paid by the people they rated. I saw that from the inside." He says he also saw this "inherent conflict of interest" as a fund manager. "I never paid attention to the rating agencies. If you relied on them you got . . . you know," he says, sparing me the gory details. "You did your own analysis. What is clear is that rating agencies always change something after it is obvious to everyone else. That's why we never relied on them." That's a bit disconcerting since the Fed still uses these same agencies in managing its own portfolio.
I wonder whether the same bubble-producing Fed errors aren't being repeated now as Washington scrambles to avoid a sustained economic downturn.
He surprises me by siding with the deflation hawks. "I don't think that's the risk right now." Why? One factor influencing his view is the Dallas Fed's "trim mean calculation," which looks at price changes of more than 180 items and excludes the extremes. Dallas researchers have found that "the price increases are less and less. Ex-energy, ex-food, ex-tobacco you've got some mild deflation here and no inflation in the [broader] headline index."
Mr. Fisher says he also has a group of about 50 CEOs around the U.S. and the world that he calls on, all off the record, before almost every FOMC meeting. "I don't impart any information, I just listen carefully to what they are seeing through their own eyes. And that gives me a sense of what's happening on the ground, you might say on Main Street as opposed to Wall Street."
It's good to know that a guy so obsessed with price stability doesn't see inflation on the horizon. But inflation and bubble trouble almost always get going before they are recognized. Moreover, the Fed has to pay attention to the 1978 Full Employment and Balanced Growth Act -- a.k.a. Humphrey-Hawkins -- and employment is a lagging indicator of economic activity. This could create a Fed bias in favor of inflating. So I push him again.
"I want to make sure that your readers understand that I don't know a single person on the FOMC who is rooting for inflation or who is tolerant of inflation." The committee knows very well, he assures me, that "you cannot have sustainable employment growth without price stability. And by price stability I mean that we cannot tolerate deflation or the ravages of inflation."
Mr. Fisher defends the Fed's actions that were designed to "stabilize the financial system as it literally fell apart and prevent the economy from imploding." Yet he admits that there is unfinished work. Policy makers have to be "always mindful that whatever you put in, you are going to have to take out at some point. And also be mindful that there are these perceptions [about the possibility of monetizing the debt], which is why I have been sensitive about the issue of purchasing Treasurys."
He returns to events on his recent trip to Asia, which besides China included stops in Japan, Hong Kong, Singapore and Korea. "I wasn't asked once about mortgage-backed securities. But I was asked at every single meeting about our purchase of Treasurys. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States. That seems to be the issue people are most worried about."
As I listen I am reminded that it's not just the Asians who have expressed concern. In his Kennedy School speech, Mr. Fisher himself fretted about the U.S. fiscal picture. He acknowledges that he has raised the issue "ad nauseam" and doesn't apologize. "Throughout history," he says, "what the political class has done is they have turned to the central bank to print their way out of an unfunded liability. We can't let that happen. That's when you open the floodgates. So I hope and I pray that our political leaders will just have to take this bull by the horns at some point. You can't run away from it."
Voices like Mr. Fisher's can be a problem for the politicians, which may be why recently there have been rumblings in Washington about revoking the automatic FOMC membership that comes with being a regional bank president. Does Mr. Fisher have any thoughts about that?
This is nothing new, he points out, briefly reviewing the history of the political struggle over monetary policy in the U.S. "The reason why the banks were put in the mix by [President Woodrow] Wilson in 1913, the reason it was structured the way it was structured, was so that you could offset the political power of Washington and the money center in New York with the regional banks. They represented Main Street.
"Now we have this great populist fervor and the banks are arguing for Main Street, largely. I have heard these arguments before and studied the history. I am not losing a lot of sleep over it," he says with a defiant Texas twang that I had not previously detected. "I don't think that it'd be the best signal to send to the market right now that you want to totally politicize the process."
Speaking of which, Texas bankers don't have much good to say about the Troubled Asset Relief Program (TARP), according to Mr. Fisher. "Its been complicated by the politics because you have a special investigator, special prosecutor, and all I can tell you is that in my district here most of the people who wanted in on the TARP no longer want in on the TARP."
At heart, Mr. Fisher says he is an advocate for letting markets clear on their own. "You know that I am a big believer in Schumpeter's creative destruction," he says referring to the term coined by the late Austrian economist. "The destructive part is always painful, politically messy, it hurts like hell but you hopefully will allow the adjustments to be made so that the creative part can take place." Texas went through that process in the 1980s, he says, and came back stronger.
This is doubtless why, with Washington taking on a larger role in the American economy every day, the worries linger. On the wall behind his desk is a 1907 gouache painting by Antonio De Simone of the American steam sailing vessel Varuna plowing through stormy seas. Just like most everything else on the walls, bookshelves and table tops around his office -- and even the dollar-sign cuff links he wears to work -- it represents something.
He says that he has had this painting behind his desk for the past 30 years as a reminder of the importance of purpose and duty in rough seas. "The ship," he explains, "has to maintain its integrity." What is more, "no mathematical model can steer you through the kind of seas in that picture there. In the end someone has the wheel." He adds: "On monetary policy it's the Federal Reserve."
Ms. O'Grady writes the Journal's Americas column.
The president of the Dallas Fed on inflation risk and central bank independence.
WSJ, May 25, 2009
Dallas
From his perch high atop the palatial Dallas Federal Reserve Bank, overlooking what he calls "the most modern, efficient city in America," Richard Fisher says he is always on the lookout for rising prices. But that's not what's worrying the bank's president right now.
His bigger concern these days would seem to be what he calls "the perception of risk" that has been created by the Fed's purchases of Treasury bonds, mortgage-backed securities and Fannie Mae paper.
Mr. Fisher acknowledges that events in the financial markets last year required some unusual Fed action in the commercial lending market. But he says the longer-term debt, particularly the Treasurys, is making investors nervous. The looming challenge, he says, is to reassure markets that the Fed is not going to be "the handmaiden" to fiscal profligacy. "I think the trick here is to assist the functioning of the private markets without signaling in any way, shape or form that the Federal Reserve will be party to monetizing fiscal largess, deficits or the stimulus program."
The very fact that a Fed regional bank president has to raise this issue is not very comforting. It conjures up images of Argentina. And as Mr. Fisher explains, he's not the only one worrying about it. He has just returned from a trip to China, where "senior officials of the Chinese government grill[ed] me about whether or not we are going to monetize the actions of our legislature." He adds, "I must have been asked about that a hundred times in China."
A native of Los Angeles who grew up in Mexico, Mr. Fisher was educated at Harvard, Oxford and Stanford. He spent his earliest days in government at Jimmy Carter's Treasury. He says that taught him a life-long lesson about inflation. It was "inflation that destroyed that presidency," he says. He adds that he learned a lot from then Fed Chairman Paul Volcker, who had to "break [inflation's] back."
Mr. Fisher has led the Dallas Fed since 2005 and has developed a reputation as the Federal Open Market Committee's (FOMC) lead inflation worrywart. In September he told a New York audience that "rates held too low, for too long during the previous Fed regime were an accomplice to [the] reckless behavior" that brought about the economic troubles we are now living through. He also warned that the Treasury's $700 billion plan to buy toxic assets from financial institutions would be "one more straw on the back of the frightfully encumbered camel that is the federal government ledger."
In a speech at the Kennedy School of Government in February, he wrung his hands about "the very deep hole [our political leaders] have dug in incurring unfunded liabilities of retirement and health-care obligations" that "we at the Dallas Fed believe total over $99 trillion." In March, he is believed to have vociferously objected in closed-door FOMC meetings to the proposal to buy U.S. Treasury bonds. So with long-term Treasury yields moving up sharply despite Fed intentions to bring down mortgage rates, I've flown to Dallas to see what he's thinking now.
Regarding what caused the credit bubble, he repeats his assertion about the Fed's role: "It is human instinct when rates are low and the yield curve is flat to reach for greater risk and enhanced yield and returns." (Later, he adds that this is not to cast aspersions on former Fed Chairman Alan Greenspan and reminds me that these decisions are made by the FOMC.)
"The second thing is that the regulators didn't do their job, including the Federal Reserve." To this he adds what he calls unusual circumstances, including "the fruits and tailwinds of globalization, billions of people added to the labor supply, new factories and productivity coming from places it had never come from before." And finally, he says, there was the 'mathematization' of risk." Institutions were "building risk models" and relying heavily on "quant jocks" when "in the end there can be no substitute for good judgment."
What about another group of alleged culprits: the government-anointed rating agencies? Mr. Fisher doesn't mince words. "I served on corporate boards. The way rating agencies worked is that they were paid by the people they rated. I saw that from the inside." He says he also saw this "inherent conflict of interest" as a fund manager. "I never paid attention to the rating agencies. If you relied on them you got . . . you know," he says, sparing me the gory details. "You did your own analysis. What is clear is that rating agencies always change something after it is obvious to everyone else. That's why we never relied on them." That's a bit disconcerting since the Fed still uses these same agencies in managing its own portfolio.
I wonder whether the same bubble-producing Fed errors aren't being repeated now as Washington scrambles to avoid a sustained economic downturn.
He surprises me by siding with the deflation hawks. "I don't think that's the risk right now." Why? One factor influencing his view is the Dallas Fed's "trim mean calculation," which looks at price changes of more than 180 items and excludes the extremes. Dallas researchers have found that "the price increases are less and less. Ex-energy, ex-food, ex-tobacco you've got some mild deflation here and no inflation in the [broader] headline index."
Mr. Fisher says he also has a group of about 50 CEOs around the U.S. and the world that he calls on, all off the record, before almost every FOMC meeting. "I don't impart any information, I just listen carefully to what they are seeing through their own eyes. And that gives me a sense of what's happening on the ground, you might say on Main Street as opposed to Wall Street."
It's good to know that a guy so obsessed with price stability doesn't see inflation on the horizon. But inflation and bubble trouble almost always get going before they are recognized. Moreover, the Fed has to pay attention to the 1978 Full Employment and Balanced Growth Act -- a.k.a. Humphrey-Hawkins -- and employment is a lagging indicator of economic activity. This could create a Fed bias in favor of inflating. So I push him again.
"I want to make sure that your readers understand that I don't know a single person on the FOMC who is rooting for inflation or who is tolerant of inflation." The committee knows very well, he assures me, that "you cannot have sustainable employment growth without price stability. And by price stability I mean that we cannot tolerate deflation or the ravages of inflation."
Mr. Fisher defends the Fed's actions that were designed to "stabilize the financial system as it literally fell apart and prevent the economy from imploding." Yet he admits that there is unfinished work. Policy makers have to be "always mindful that whatever you put in, you are going to have to take out at some point. And also be mindful that there are these perceptions [about the possibility of monetizing the debt], which is why I have been sensitive about the issue of purchasing Treasurys."
He returns to events on his recent trip to Asia, which besides China included stops in Japan, Hong Kong, Singapore and Korea. "I wasn't asked once about mortgage-backed securities. But I was asked at every single meeting about our purchase of Treasurys. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States. That seems to be the issue people are most worried about."
As I listen I am reminded that it's not just the Asians who have expressed concern. In his Kennedy School speech, Mr. Fisher himself fretted about the U.S. fiscal picture. He acknowledges that he has raised the issue "ad nauseam" and doesn't apologize. "Throughout history," he says, "what the political class has done is they have turned to the central bank to print their way out of an unfunded liability. We can't let that happen. That's when you open the floodgates. So I hope and I pray that our political leaders will just have to take this bull by the horns at some point. You can't run away from it."
Voices like Mr. Fisher's can be a problem for the politicians, which may be why recently there have been rumblings in Washington about revoking the automatic FOMC membership that comes with being a regional bank president. Does Mr. Fisher have any thoughts about that?
This is nothing new, he points out, briefly reviewing the history of the political struggle over monetary policy in the U.S. "The reason why the banks were put in the mix by [President Woodrow] Wilson in 1913, the reason it was structured the way it was structured, was so that you could offset the political power of Washington and the money center in New York with the regional banks. They represented Main Street.
"Now we have this great populist fervor and the banks are arguing for Main Street, largely. I have heard these arguments before and studied the history. I am not losing a lot of sleep over it," he says with a defiant Texas twang that I had not previously detected. "I don't think that it'd be the best signal to send to the market right now that you want to totally politicize the process."
Speaking of which, Texas bankers don't have much good to say about the Troubled Asset Relief Program (TARP), according to Mr. Fisher. "Its been complicated by the politics because you have a special investigator, special prosecutor, and all I can tell you is that in my district here most of the people who wanted in on the TARP no longer want in on the TARP."
At heart, Mr. Fisher says he is an advocate for letting markets clear on their own. "You know that I am a big believer in Schumpeter's creative destruction," he says referring to the term coined by the late Austrian economist. "The destructive part is always painful, politically messy, it hurts like hell but you hopefully will allow the adjustments to be made so that the creative part can take place." Texas went through that process in the 1980s, he says, and came back stronger.
This is doubtless why, with Washington taking on a larger role in the American economy every day, the worries linger. On the wall behind his desk is a 1907 gouache painting by Antonio De Simone of the American steam sailing vessel Varuna plowing through stormy seas. Just like most everything else on the walls, bookshelves and table tops around his office -- and even the dollar-sign cuff links he wears to work -- it represents something.
He says that he has had this painting behind his desk for the past 30 years as a reminder of the importance of purpose and duty in rough seas. "The ship," he explains, "has to maintain its integrity." What is more, "no mathematical model can steer you through the kind of seas in that picture there. In the end someone has the wheel." He adds: "On monetary policy it's the Federal Reserve."
Ms. O'Grady writes the Journal's Americas column.
Interrogations and Presidential Prerogative - The Executive and substantial discretionary powers
Interrogations and Presidential Prerogative. By Walter Berns
The Founders created an executive with substantial discretionary powers.
WSJ, May 25, 2009
Recently, an Episcopal church in Bethesda, Md., displayed a banner with the following words: "God bless everyone (no exceptions)." I confessed to the rector of my own church that, try as I might, I simply could not obey this injunction. Judging by what he had to say about "enhanced" interrogations, Sen. Lindsey Graham (R., N.C.) seems not to share my difficulty.
Mr. Graham believes that we're either a rule-of-law nation or we're not, and no exceptions. "I don't love the terrorists. I just love what Americans stand for," he said in an interview with Newsweek in 2006. His point was that our definitions of torture should not vary with the sort of person being questioned -- terrorists, for example, or merely prisoners of war.
Mr. Graham's position is similar to the one taken by Chief Justice Roger Brooke Taney during the Civil War. In 1861, Confederate sympathizers in Maryland were burning railroad bridges, tearing up their tracks, and attacking federal troops so as to prevent them from reaching the national capital. Since local officials did nothing about this, Abraham Lincoln did. He ordered the military to suspend the writ of habeas corpus, which led to the arrest and imprisonment of John Merryman, a leader of the sympathizers.
Chief Justice Taney ruled in Ex Parte Merryman (1861) that only Congress could suspend the writ of habeas corpus and ordered Merryman released. Lincoln disobeyed the order, believing that the executive must sometimes do things it would not do in ordinary times. Would he have done this if the issue had been the interrogation of terrorists? Does the law have something to say about this?
And would Taney and Graham find support for their views in the writings of our Founders or their philosophical mentors, particularly John Locke, the 17th century Englishman sometimes referred to as "America's philosopher"? Locke is the source of our attachment to the rule of law and the priority of the legislative power.
Locke argued in the Second Treatise of Civil Government that the "first and fundamental law is the establishment of the legislative power." And so it is that the first article of the U.S. Constitution is devoted to the legislative power. There is safety in law, he said; the law is "promulgated and known to the people," and everyone without exception is subject to it.
But Locke admitted that not everything can be done by law. Or, as he said, there are many things "which the law can by no means provide for." The law cannot "foresee" events, for example, nor can it act with dispatch or with the appropriate subtlety required when dealing with foreign powers. Nor, as we know very well indeed, can a legislative body preserve secrecy.
Such matters, Locke continued in the Second Treatise, should be left to "the discretion of him who has the executive power." It is in this context that he first spoke of the "prerogative": the "power to act according to discretion, for the public good without the prescription of the law, and sometimes even against it." He concluded by saying "prerogative is nothing but the power of doing public good without a rule" (italics in the original).
Did the Framers find a place in our Constitution for this extraordinary power? What, if anything, did they say on the subject or, perhaps more tellingly, what did they not say?
They said nothing about a prerogative or -- apart from the habeas corpus provision -- anything suggesting a need for it. But they provided for an executive significantly different from -- and significantly more powerful than -- the executives provided for in the early state constitutions of the revolutionary era. This new executive is, first of all, a single person, and, as the Constitution has it, "he shall be Commander in Chief of the Army and Navy." This is no mean power; Lincoln used it to imprison insurgents and to free the slaves.
The Framers seemed to be aware of what they were doing when they established the office. I draw this conclusion from their reaction when the office was first proposed.
According to the "Records of the Federal Convention of 1787," on June 1, a mere two weeks into the life of the convention, James Wilson "moved that the Executive consist in a single person." Charles Pinckney seconded the motion. Then, "a considerable pause" ensued, and the chairman asked if he should put the question. "Doc Franklin observed that it was a point of great importance and wished that the gentlemen would deliver their sentiments on it before the question was put and Mr. Rutledge animadverted on the shyness of gentlemen. . . ."
Why the silence? Why were they shy? Apparently because the proposal was so radically different from the executives provided in the state constitutions (and the fact that there was no executive whatsoever under the Articles of Confederation). All of these governmental bodies (except New York), and especially those whose constitutions were written in the years 1776-78, included "almost every conceivable provision for reducing the executive to a position of complete subordination," as Charles C. Thach Jr., noted in "The Creation of the Presidency, 1775-1789." The gentlemen were also shy because the provision for a single executive reminded them of George III and of what he had done.
This new, single executive is also required to take an oath to "preserve, protect and defend the Constitution of the United States." This was the provision of his oath President George W. Bush used to capture, hold and interrogate terrorists.
Questions arise: Was the Constitution or, better, the nation actually in jeopardy after 9/11? Was Mr. Bush entitled to imprison the terrorists in Guantanamo? Were the interrogations justified? Were they more severe than necessary? Did they prove useful in protecting the nation and its citizens? These are the sorts of questions Locke may have had in mind in his chapter on the prerogative. Who, he then asked, shall be judge whether "this power is made right use of?" Initially, of course, the executive but, ultimately, the people.
The executive in our case, at least to begin with, is represented by the three Justice Department officials who wrote the memos that Mr. Graham and many members of the Obama administration have found offensive. They have been accused of justifying torture, but they have not yet been given the opportunity in an official setting or forum to defend what they did.
That forum could be a committee of Congress or a "truth commission" -- so long as, in addition to the assistance of counsel, they would be judged by "an impartial jury," have the right to call witnesses in their favor, to call for the release of evidence including the CIA memos showing the success of enhanced interrogations, and the right to "confront the witnesses" against them as the Constitution's Fifth and Sixth Amendments provide. There is much to be said for a process that, among other things, would require Nancy Pelosi to testify under oath.
Mr. Berns is a resident scholar at the American Enterprise Institute.
The Founders created an executive with substantial discretionary powers.
WSJ, May 25, 2009
Recently, an Episcopal church in Bethesda, Md., displayed a banner with the following words: "God bless everyone (no exceptions)." I confessed to the rector of my own church that, try as I might, I simply could not obey this injunction. Judging by what he had to say about "enhanced" interrogations, Sen. Lindsey Graham (R., N.C.) seems not to share my difficulty.
Mr. Graham believes that we're either a rule-of-law nation or we're not, and no exceptions. "I don't love the terrorists. I just love what Americans stand for," he said in an interview with Newsweek in 2006. His point was that our definitions of torture should not vary with the sort of person being questioned -- terrorists, for example, or merely prisoners of war.
Mr. Graham's position is similar to the one taken by Chief Justice Roger Brooke Taney during the Civil War. In 1861, Confederate sympathizers in Maryland were burning railroad bridges, tearing up their tracks, and attacking federal troops so as to prevent them from reaching the national capital. Since local officials did nothing about this, Abraham Lincoln did. He ordered the military to suspend the writ of habeas corpus, which led to the arrest and imprisonment of John Merryman, a leader of the sympathizers.
Chief Justice Taney ruled in Ex Parte Merryman (1861) that only Congress could suspend the writ of habeas corpus and ordered Merryman released. Lincoln disobeyed the order, believing that the executive must sometimes do things it would not do in ordinary times. Would he have done this if the issue had been the interrogation of terrorists? Does the law have something to say about this?
And would Taney and Graham find support for their views in the writings of our Founders or their philosophical mentors, particularly John Locke, the 17th century Englishman sometimes referred to as "America's philosopher"? Locke is the source of our attachment to the rule of law and the priority of the legislative power.
Locke argued in the Second Treatise of Civil Government that the "first and fundamental law is the establishment of the legislative power." And so it is that the first article of the U.S. Constitution is devoted to the legislative power. There is safety in law, he said; the law is "promulgated and known to the people," and everyone without exception is subject to it.
But Locke admitted that not everything can be done by law. Or, as he said, there are many things "which the law can by no means provide for." The law cannot "foresee" events, for example, nor can it act with dispatch or with the appropriate subtlety required when dealing with foreign powers. Nor, as we know very well indeed, can a legislative body preserve secrecy.
Such matters, Locke continued in the Second Treatise, should be left to "the discretion of him who has the executive power." It is in this context that he first spoke of the "prerogative": the "power to act according to discretion, for the public good without the prescription of the law, and sometimes even against it." He concluded by saying "prerogative is nothing but the power of doing public good without a rule" (italics in the original).
Did the Framers find a place in our Constitution for this extraordinary power? What, if anything, did they say on the subject or, perhaps more tellingly, what did they not say?
They said nothing about a prerogative or -- apart from the habeas corpus provision -- anything suggesting a need for it. But they provided for an executive significantly different from -- and significantly more powerful than -- the executives provided for in the early state constitutions of the revolutionary era. This new executive is, first of all, a single person, and, as the Constitution has it, "he shall be Commander in Chief of the Army and Navy." This is no mean power; Lincoln used it to imprison insurgents and to free the slaves.
The Framers seemed to be aware of what they were doing when they established the office. I draw this conclusion from their reaction when the office was first proposed.
According to the "Records of the Federal Convention of 1787," on June 1, a mere two weeks into the life of the convention, James Wilson "moved that the Executive consist in a single person." Charles Pinckney seconded the motion. Then, "a considerable pause" ensued, and the chairman asked if he should put the question. "Doc Franklin observed that it was a point of great importance and wished that the gentlemen would deliver their sentiments on it before the question was put and Mr. Rutledge animadverted on the shyness of gentlemen. . . ."
Why the silence? Why were they shy? Apparently because the proposal was so radically different from the executives provided in the state constitutions (and the fact that there was no executive whatsoever under the Articles of Confederation). All of these governmental bodies (except New York), and especially those whose constitutions were written in the years 1776-78, included "almost every conceivable provision for reducing the executive to a position of complete subordination," as Charles C. Thach Jr., noted in "The Creation of the Presidency, 1775-1789." The gentlemen were also shy because the provision for a single executive reminded them of George III and of what he had done.
This new, single executive is also required to take an oath to "preserve, protect and defend the Constitution of the United States." This was the provision of his oath President George W. Bush used to capture, hold and interrogate terrorists.
Questions arise: Was the Constitution or, better, the nation actually in jeopardy after 9/11? Was Mr. Bush entitled to imprison the terrorists in Guantanamo? Were the interrogations justified? Were they more severe than necessary? Did they prove useful in protecting the nation and its citizens? These are the sorts of questions Locke may have had in mind in his chapter on the prerogative. Who, he then asked, shall be judge whether "this power is made right use of?" Initially, of course, the executive but, ultimately, the people.
The executive in our case, at least to begin with, is represented by the three Justice Department officials who wrote the memos that Mr. Graham and many members of the Obama administration have found offensive. They have been accused of justifying torture, but they have not yet been given the opportunity in an official setting or forum to defend what they did.
That forum could be a committee of Congress or a "truth commission" -- so long as, in addition to the assistance of counsel, they would be judged by "an impartial jury," have the right to call witnesses in their favor, to call for the release of evidence including the CIA memos showing the success of enhanced interrogations, and the right to "confront the witnesses" against them as the Constitution's Fifth and Sixth Amendments provide. There is much to be said for a process that, among other things, would require Nancy Pelosi to testify under oath.
Mr. Berns is a resident scholar at the American Enterprise Institute.
Sunday, May 24, 2009
Japan should have ability to strike enemy bases in defense: LDP panel
Japan should have ability to strike enemy bases in defense: LDP panel
Japan Today, Monday 25th May, 06:44 AM JST
TOKYO — A subcommittee of the ruling Liberal Democratic Party’s defense panel plans to propose that Japan be allowed under a new basic defense program to have the ability to strike enemy bases within the scope of its defense-only policy, according to a draft proposal made available Sunday. It also says Japan should be allowed to develop an early warning satellite system to detect the launch of a missile or other objects that may be aimed at the country.
The recommendations are being sought apparently in view of North Korea’s missile launch in April. The government plans to compile a basic defense program for fiscal 2010 to 2014 by the end of this year, and the subcommittee wants to make those recommendations for the deliberations of the outline.
‘‘Japan should have the ability to strike enemy bases within the scope of its defense-oriented policy, in order not to sit and wait for death,’’ the LDP subcommittee said in the draft proposal.
The government takes a stance that Japan can strike an enemy military base even under the nation’s pacifist Constitution, if hostile attacks are certain.
But Defense Minister Yasukazu Hamada and some lawmakers have taken a cautious attitude toward examining Japan’s possessing such capability.
Japan, meanwhile, is depending on a U.S. early warning satellite against possible missile attacks. But since the April 4 missile launch by North Korea, there have been calls for developing Japan’s own system among members of the LDP.
Japan Today, Monday 25th May, 06:44 AM JST
TOKYO — A subcommittee of the ruling Liberal Democratic Party’s defense panel plans to propose that Japan be allowed under a new basic defense program to have the ability to strike enemy bases within the scope of its defense-only policy, according to a draft proposal made available Sunday. It also says Japan should be allowed to develop an early warning satellite system to detect the launch of a missile or other objects that may be aimed at the country.
The recommendations are being sought apparently in view of North Korea’s missile launch in April. The government plans to compile a basic defense program for fiscal 2010 to 2014 by the end of this year, and the subcommittee wants to make those recommendations for the deliberations of the outline.
‘‘Japan should have the ability to strike enemy bases within the scope of its defense-oriented policy, in order not to sit and wait for death,’’ the LDP subcommittee said in the draft proposal.
The government takes a stance that Japan can strike an enemy military base even under the nation’s pacifist Constitution, if hostile attacks are certain.
But Defense Minister Yasukazu Hamada and some lawmakers have taken a cautious attitude toward examining Japan’s possessing such capability.
Japan, meanwhile, is depending on a U.S. early warning satellite against possible missile attacks. But since the April 4 missile launch by North Korea, there have been calls for developing Japan’s own system among members of the LDP.
How Joe Biden Wrecked the Judicial Confirmation Process
How Joe Biden Wrecked the Judicial Confirmation Process. By Collin Levy
The vice president can't complain if Republicans object to Obama's Supreme Court nominee.
WSJ, May 22, 2009
Vice President Joe Biden is widely praised for the expertise he brings in helping Barack Obama choose a replacement for retiring Supreme Court Justice David Souter. Having served for three decades on the Senate Judiciary Committee, he is considered an asset both for his relationships with committee members and his familiarity with the nuts and bolts of judicial nominations. So let's have a look at how the confirmation process actually fared under Mr. Biden's leadership.
As a member of the Senate Judiciary Committee, Mr. Biden was present for the nomination and confirmation of every currently sitting Supreme Court justice except for John Paul Stevens. In 1986, the year before Mr. Biden took over as committee chairman, Antonin Scalia was approved by the Senate in a vote of 98-0. Then came Robert Bork and a presidential election.
Before Judge Bork's nomination, Mr. Biden had said he would support him. And why not? He was widely considered a dazzling legal mind and had even received (during his confirmation to the D.C. Circuit Court of Appeals) a rating of "exceptionally well-qualified" from the liberal-leaning American Bar Association. "Say the administration sends up Bork," Mr. Biden told the Philadelphia Inquirer in November 1986, "and, after our investigations, he looks a lot like Scalia. I'd have to vote for him, and if the [special-interest] groups tear me apart, that's the medicine I'll have to take."
But by the time of the actual nomination, Democrats were promising to play "hardball" with President Ronald Reagan's nominees and Mr. Biden was running for president. Mr. Biden's Democratic colleagues lined up against the nominee. They were led by Sen. Edward Kennedy, who demonized him with a monologue on "Robert Bork's America," which he promised would be "a land in which women would be forced into back alley abortions." Liberal groups joined the chorus for Mr. Biden to recant his earlier support, which he did, helping to defeat Mr. Bork's nomination.
Back then the tactics were considered shocking. Warren Burger, the former chief justice, said he was "astonished" by the comments he'd read about a nominee he thought was one of the most qualified he'd seen in 50 years. If the Senate rejected Mr. Bork, he said, "then they shouldn't have confirmed me."
Just one year after the conservative Mr. Scalia's unanimous confirmation the winds had changed dramatically. The Senate had hitherto proceeded on the principle that it owed the president deference on his judicial selections. No longer.
"The framers clearly intended the Senate to serve as a check on the president and guarantee the independence of the judiciary," Mr. Biden said in August 1987 in defense of his newfound opposition to Judge Bork. "The Senate has an undisputed right to consider judicial philosophy." With that marker placed, the ultimate winner of the seat vacated by Justice Lewis Franklin Powell Jr. was a nominee nearly devoid of political philosophy -- Anthony Kennedy.
Mr. Biden's obstruction was further rewarded by the first President Bush. In attempting to dodge controversy, he gave liberals David Souter, whose appeal was enhanced by the fact that he had been a federal judge for less than a year and had almost no paper trail.
By the time Clarence Thomas's confirmation hearings came around, Mr. Biden's modus operandi was well known. In his book, "My Grandfather's Son," Justice Thomas recalls that before the Anita Hill inquisition began, Mr. Biden called him and said "Judge, I know you don't believe me but if the allegations come up I will be your biggest defender." "He was right about one thing," Justice Thomas wrote, "I didn't believe him."
Under Mr. Biden's leadership, holding up nominations to the nation's appeals courts also became a routine exercise. In 1988, the Senate Judiciary Committee delayed 17 months before refusing to confirm law professor and scholar Bernard Siegan to the Ninth Circuit Court of Appeals because of his libertarian positions on economic issues. In 1992, Mr. Bush's nominee to the 11th Circuit, Edward Carnes, endured an eight-month delay and an attempted filibuster before finally being confirmed. By 1992, 64 judicial nominees were stuck in the senatorial muck waiting for the Judiciary Committee to give them a yea or nay.
The Senate obstructionism that began with Reagan's nominees thus became a game of political revenge as each new batch of nominees was made to suffer at the hands of one party for the treatment its nominees had received in the last round. Republicans blocked some of President Bill Clinton's nominees, including briefly, Sonia Sotomayor, the Second Circuit judge said to be on Mr. Obama's short list to replace Mr. Souter. Unable to bottle up Miguel Estrada in committee in 2003, Democrats filibustered him on the floor of the Senate. Sen. Carl Levin (D., Mich.) held up as many as four judicial nominations for years in retribution for Republicans blocking Mr. Clinton's nomination of Helene White (she was confirmed for the Sixth Circuit last year). And so on.
The effect of this game has been toxic not only for the nominees but for the courts. Many circuits have suffered judicial emergencies, defined as vacancies on courts overwhelmed by their caseloads, or vacancies languishing more than 18 months on busy circuits. Some stood open longer. The Bush administration's 2006 appointment of Peter Keisler to fill the D.C. Circuit seat vacated by John Roberts was left to expire, unfilled, at the end of the administration.
True, Supreme Court nominees John Roberts and Samuel Alito were confirmed -- but without the support of then Sens. Joe Biden or Barack Obama. Mr. Alito was confirmed by a vote of 58-42, the second narrowest margin in Senate history (after Clarence Thomas). Even Chief Justice Roberts's margin of 78-22 was contentious in historical terms. Ruth Bader Ginsburg was confirmed 93-3, Sandra Day O'Connor 99-0, John Paul Stevens 98-0, and David Souter 90-9.
What is in store for Mr. Obama's nominees remains to be seen. Sen. Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, has said he isn't inclined to the filibuster even if it is an option and most expect the president's Supreme Court choice will be confirmed.
As a matter of judicial philosophy, however, Mr. Obama has said he wants a nominee who "understands that justice isn't about some abstract legal theory or footnote in a case book." If that is considered by opponents as grounds for rejection Joe Biden will know where they're coming from.
Ms. Levy is a senior editorial writer at the Journal, based in Washington.
The vice president can't complain if Republicans object to Obama's Supreme Court nominee.
WSJ, May 22, 2009
Vice President Joe Biden is widely praised for the expertise he brings in helping Barack Obama choose a replacement for retiring Supreme Court Justice David Souter. Having served for three decades on the Senate Judiciary Committee, he is considered an asset both for his relationships with committee members and his familiarity with the nuts and bolts of judicial nominations. So let's have a look at how the confirmation process actually fared under Mr. Biden's leadership.
As a member of the Senate Judiciary Committee, Mr. Biden was present for the nomination and confirmation of every currently sitting Supreme Court justice except for John Paul Stevens. In 1986, the year before Mr. Biden took over as committee chairman, Antonin Scalia was approved by the Senate in a vote of 98-0. Then came Robert Bork and a presidential election.
Before Judge Bork's nomination, Mr. Biden had said he would support him. And why not? He was widely considered a dazzling legal mind and had even received (during his confirmation to the D.C. Circuit Court of Appeals) a rating of "exceptionally well-qualified" from the liberal-leaning American Bar Association. "Say the administration sends up Bork," Mr. Biden told the Philadelphia Inquirer in November 1986, "and, after our investigations, he looks a lot like Scalia. I'd have to vote for him, and if the [special-interest] groups tear me apart, that's the medicine I'll have to take."
But by the time of the actual nomination, Democrats were promising to play "hardball" with President Ronald Reagan's nominees and Mr. Biden was running for president. Mr. Biden's Democratic colleagues lined up against the nominee. They were led by Sen. Edward Kennedy, who demonized him with a monologue on "Robert Bork's America," which he promised would be "a land in which women would be forced into back alley abortions." Liberal groups joined the chorus for Mr. Biden to recant his earlier support, which he did, helping to defeat Mr. Bork's nomination.
Back then the tactics were considered shocking. Warren Burger, the former chief justice, said he was "astonished" by the comments he'd read about a nominee he thought was one of the most qualified he'd seen in 50 years. If the Senate rejected Mr. Bork, he said, "then they shouldn't have confirmed me."
Just one year after the conservative Mr. Scalia's unanimous confirmation the winds had changed dramatically. The Senate had hitherto proceeded on the principle that it owed the president deference on his judicial selections. No longer.
"The framers clearly intended the Senate to serve as a check on the president and guarantee the independence of the judiciary," Mr. Biden said in August 1987 in defense of his newfound opposition to Judge Bork. "The Senate has an undisputed right to consider judicial philosophy." With that marker placed, the ultimate winner of the seat vacated by Justice Lewis Franklin Powell Jr. was a nominee nearly devoid of political philosophy -- Anthony Kennedy.
Mr. Biden's obstruction was further rewarded by the first President Bush. In attempting to dodge controversy, he gave liberals David Souter, whose appeal was enhanced by the fact that he had been a federal judge for less than a year and had almost no paper trail.
By the time Clarence Thomas's confirmation hearings came around, Mr. Biden's modus operandi was well known. In his book, "My Grandfather's Son," Justice Thomas recalls that before the Anita Hill inquisition began, Mr. Biden called him and said "Judge, I know you don't believe me but if the allegations come up I will be your biggest defender." "He was right about one thing," Justice Thomas wrote, "I didn't believe him."
Under Mr. Biden's leadership, holding up nominations to the nation's appeals courts also became a routine exercise. In 1988, the Senate Judiciary Committee delayed 17 months before refusing to confirm law professor and scholar Bernard Siegan to the Ninth Circuit Court of Appeals because of his libertarian positions on economic issues. In 1992, Mr. Bush's nominee to the 11th Circuit, Edward Carnes, endured an eight-month delay and an attempted filibuster before finally being confirmed. By 1992, 64 judicial nominees were stuck in the senatorial muck waiting for the Judiciary Committee to give them a yea or nay.
The Senate obstructionism that began with Reagan's nominees thus became a game of political revenge as each new batch of nominees was made to suffer at the hands of one party for the treatment its nominees had received in the last round. Republicans blocked some of President Bill Clinton's nominees, including briefly, Sonia Sotomayor, the Second Circuit judge said to be on Mr. Obama's short list to replace Mr. Souter. Unable to bottle up Miguel Estrada in committee in 2003, Democrats filibustered him on the floor of the Senate. Sen. Carl Levin (D., Mich.) held up as many as four judicial nominations for years in retribution for Republicans blocking Mr. Clinton's nomination of Helene White (she was confirmed for the Sixth Circuit last year). And so on.
The effect of this game has been toxic not only for the nominees but for the courts. Many circuits have suffered judicial emergencies, defined as vacancies on courts overwhelmed by their caseloads, or vacancies languishing more than 18 months on busy circuits. Some stood open longer. The Bush administration's 2006 appointment of Peter Keisler to fill the D.C. Circuit seat vacated by John Roberts was left to expire, unfilled, at the end of the administration.
True, Supreme Court nominees John Roberts and Samuel Alito were confirmed -- but without the support of then Sens. Joe Biden or Barack Obama. Mr. Alito was confirmed by a vote of 58-42, the second narrowest margin in Senate history (after Clarence Thomas). Even Chief Justice Roberts's margin of 78-22 was contentious in historical terms. Ruth Bader Ginsburg was confirmed 93-3, Sandra Day O'Connor 99-0, John Paul Stevens 98-0, and David Souter 90-9.
What is in store for Mr. Obama's nominees remains to be seen. Sen. Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, has said he isn't inclined to the filibuster even if it is an option and most expect the president's Supreme Court choice will be confirmed.
As a matter of judicial philosophy, however, Mr. Obama has said he wants a nominee who "understands that justice isn't about some abstract legal theory or footnote in a case book." If that is considered by opponents as grounds for rejection Joe Biden will know where they're coming from.
Ms. Levy is a senior editorial writer at the Journal, based in Washington.
WaPo on California Sinking: The case against a federal bailout
California Sinking. WaPo Editorial
The case against a federal bailout
WaPo, Sunday, May 24, 2009
CALIFORNIA FINDS itself in more than a bit of a bind: Facing at least a $21 billion budget deficit, the state could run out of money in a matter of weeks. Borrowing to help fill the hole will be challenging and expensive, given that California has the lowest credit rating of all 50 states. Last week's warning by Standard and Poor's to Britain about a possible debt downgrade will make risky government borrowing even more difficult. The state would like to see Uncle Sam pick up part of the tab; but as steeped in the bailout business as the feds have become, there are strong reasons for them to refuse to add California to the list of recipients.
This is a budget crisis that has been a long time coming. The requirement of a two-thirds vote in the legislature to raise taxes or pass a budget has exacerbated partisanship and made sensible budgeting impossible. The initiative process -- which too often allows politicians to turn the hard decisions over to voters who, surprise, aren't always willing to make them -- results in a crazy-quilt fiscal scheme whose ever-changing priorities leave it underfunded and inherently unstable. When they do make decisions, legislators have routinely elevated the interests of public employees unions over the broader interests of the state, producing crushing costs from high salaries and benefits. Temporary measures and gimmicks have been used to mask these problems for years.
It should come as no surprise, then, that an economic downturn could lead the state to the fiscal brink. Last week's referendum offering up a slew of budgetary fixes was a fiasco, with voters accepting only a plan to freeze the pay of their legislators in the years they run deficits. Now Gov. Arnold Schwarzenegger (R) has to decide how to proceed. He has said that the state needs to find at least $5.5 billion in spending cuts -- likely to come from education, health care and other areas. One-time measures such as selling assets are also on the table: prisons, fairgrounds, concert halls for sale -- anyone, anyone? Even if there are buyers, more action will be required.
As for federal government help in providing funds directly or through loan guarantees, there are economic arguments in favor: California's economy is larger than that of most countries, and the spending cuts and tax increases that would be required to balance the budget are precisely the opposite of the policies needed during an economic downturn. However, there are stronger arguments on the other side. The federal government already is heading dangerously deeper into the red. Getting involved could open the bailout door to 49 other eager states, which would be less likely to manage their own budgets properly if they believed the federal government would save them from their mistakes. The Obama administration seems inclined to agree. Treasury Secretary Timothy F. Geithner has said that money from the Trouble Assets Relief Program (TARP) probably cannot be used to help the states, and the Federal Reserve appears hesitant to get dragged into the mess.
Bailing out the banks was defensible because of the critical and central role they play in the economy. Bailing out the auto companies may have made sense in order to save jobs -- though now that the government is heading for long-term ownership, we are beginning to doubt the worth of that policy. Bailing out the states would be an even more perilous road to start down.
The case against a federal bailout
WaPo, Sunday, May 24, 2009
CALIFORNIA FINDS itself in more than a bit of a bind: Facing at least a $21 billion budget deficit, the state could run out of money in a matter of weeks. Borrowing to help fill the hole will be challenging and expensive, given that California has the lowest credit rating of all 50 states. Last week's warning by Standard and Poor's to Britain about a possible debt downgrade will make risky government borrowing even more difficult. The state would like to see Uncle Sam pick up part of the tab; but as steeped in the bailout business as the feds have become, there are strong reasons for them to refuse to add California to the list of recipients.
This is a budget crisis that has been a long time coming. The requirement of a two-thirds vote in the legislature to raise taxes or pass a budget has exacerbated partisanship and made sensible budgeting impossible. The initiative process -- which too often allows politicians to turn the hard decisions over to voters who, surprise, aren't always willing to make them -- results in a crazy-quilt fiscal scheme whose ever-changing priorities leave it underfunded and inherently unstable. When they do make decisions, legislators have routinely elevated the interests of public employees unions over the broader interests of the state, producing crushing costs from high salaries and benefits. Temporary measures and gimmicks have been used to mask these problems for years.
It should come as no surprise, then, that an economic downturn could lead the state to the fiscal brink. Last week's referendum offering up a slew of budgetary fixes was a fiasco, with voters accepting only a plan to freeze the pay of their legislators in the years they run deficits. Now Gov. Arnold Schwarzenegger (R) has to decide how to proceed. He has said that the state needs to find at least $5.5 billion in spending cuts -- likely to come from education, health care and other areas. One-time measures such as selling assets are also on the table: prisons, fairgrounds, concert halls for sale -- anyone, anyone? Even if there are buyers, more action will be required.
As for federal government help in providing funds directly or through loan guarantees, there are economic arguments in favor: California's economy is larger than that of most countries, and the spending cuts and tax increases that would be required to balance the budget are precisely the opposite of the policies needed during an economic downturn. However, there are stronger arguments on the other side. The federal government already is heading dangerously deeper into the red. Getting involved could open the bailout door to 49 other eager states, which would be less likely to manage their own budgets properly if they believed the federal government would save them from their mistakes. The Obama administration seems inclined to agree. Treasury Secretary Timothy F. Geithner has said that money from the Trouble Assets Relief Program (TARP) probably cannot be used to help the states, and the Federal Reserve appears hesitant to get dragged into the mess.
Bailing out the banks was defensible because of the critical and central role they play in the economy. Bailing out the auto companies may have made sense in order to save jobs -- though now that the government is heading for long-term ownership, we are beginning to doubt the worth of that policy. Bailing out the states would be an even more perilous road to start down.
WaPo on Hugo Chavez: Is Silence Consent?
Is Silence Consent? WaPo Editorial
The Obama administration's 'engagement' policy is convenient for Hugo Chávez's latest crackdown.
WaPo, Sunday, May 24, 2009
WHILE THE United States and Venezuela's neighbors silently stand by, Hugo Chávez's campaign to destroy his remaining domestic opposition continues. On Thursday night state intelligence police raided the Caracas offices of Guillermo Zuloaga, the president of the country's last independent broadcast network, Globovision. They claimed to be looking for evidence of irregularities in the car dealership that Mr. Zuloaga also runs. In fact this was a thinly disguised escalation of an attack that Mr. Chávez launched this month against Globovision. The channel has been officially accused of "inciting panic," based on its accurate reporting of a mild May 4 earthquake in Caracas; under the regime's draconian media control law it could be shut down. Few doubt that that is Mr. Chávez's intent: Two years ago he revoked the license of the country's most popular television network after a similarly trumped-up campaign.
To recap: In February Mr. Chávez eliminated the limit on his tenure as president after a one-sided referendum campaign that included ugly attacks on Venezuela's Jewish community. Since then he has imprisoned or orchestrated investigations against most of the country's leading opposition figures, including three of the five opposition governors elected last year. The elected mayor of Maracaibo, who was the leading opposition candidate when Mr. Chávez last ran for president, was granted asylum in Peru last month after authorities sought his arrest on dubious tax charges. The National Assembly, controlled by Mr. Chávez, is considering legislation that would eliminate collective bargaining and replace independent trade unions with "worker's councils" controlled by the ruling party. Another new law would eliminate foreign financing for independent non-government groups.
This is hardly the first time that a Latin American caudillo has tried to eliminate peaceful opponents: Mr. Chávez is following a path well worn by the likes of Juan Perón and Alberto Fujimori -- not to mention his mentor, Fidel Castro. But this may be the first time that the United States has watched the systematic destruction of a Latin American democracy in silence. As Mr. Chávez has implemented the "third phase" of his self-styled revolution, the Obama administration has persisted with the policy of quiet engagement that the president promised before taking office.
"We need to find a space in which we can actually have a conversation, and we need to find ways to enhance our levels of confidence," Assistant Secretary of State Thomas A. Shannon Jr. said two weeks ago, echoing earlier remarks by Secretary of State Hillary Rodham Clinton. We have no objection to dialogue with Mr. Chávez. But isn't it time to start talking about preserving independent television stations, opposition political leaders, trade unions and human rights groups -- before it is too late?
The Obama administration's 'engagement' policy is convenient for Hugo Chávez's latest crackdown.
WaPo, Sunday, May 24, 2009
WHILE THE United States and Venezuela's neighbors silently stand by, Hugo Chávez's campaign to destroy his remaining domestic opposition continues. On Thursday night state intelligence police raided the Caracas offices of Guillermo Zuloaga, the president of the country's last independent broadcast network, Globovision. They claimed to be looking for evidence of irregularities in the car dealership that Mr. Zuloaga also runs. In fact this was a thinly disguised escalation of an attack that Mr. Chávez launched this month against Globovision. The channel has been officially accused of "inciting panic," based on its accurate reporting of a mild May 4 earthquake in Caracas; under the regime's draconian media control law it could be shut down. Few doubt that that is Mr. Chávez's intent: Two years ago he revoked the license of the country's most popular television network after a similarly trumped-up campaign.
To recap: In February Mr. Chávez eliminated the limit on his tenure as president after a one-sided referendum campaign that included ugly attacks on Venezuela's Jewish community. Since then he has imprisoned or orchestrated investigations against most of the country's leading opposition figures, including three of the five opposition governors elected last year. The elected mayor of Maracaibo, who was the leading opposition candidate when Mr. Chávez last ran for president, was granted asylum in Peru last month after authorities sought his arrest on dubious tax charges. The National Assembly, controlled by Mr. Chávez, is considering legislation that would eliminate collective bargaining and replace independent trade unions with "worker's councils" controlled by the ruling party. Another new law would eliminate foreign financing for independent non-government groups.
This is hardly the first time that a Latin American caudillo has tried to eliminate peaceful opponents: Mr. Chávez is following a path well worn by the likes of Juan Perón and Alberto Fujimori -- not to mention his mentor, Fidel Castro. But this may be the first time that the United States has watched the systematic destruction of a Latin American democracy in silence. As Mr. Chávez has implemented the "third phase" of his self-styled revolution, the Obama administration has persisted with the policy of quiet engagement that the president promised before taking office.
"We need to find a space in which we can actually have a conversation, and we need to find ways to enhance our levels of confidence," Assistant Secretary of State Thomas A. Shannon Jr. said two weeks ago, echoing earlier remarks by Secretary of State Hillary Rodham Clinton. We have no objection to dialogue with Mr. Chávez. But isn't it time to start talking about preserving independent television stations, opposition political leaders, trade unions and human rights groups -- before it is too late?
Friday, May 22, 2009
Understanding why single motherhood is on the rise
Women and Children First. Cathy Young
Understanding why single motherhood is on the rise
Reason, May 21, 2009
A new report from the National Center for Health Statistics with the dry title, "Changing Patterns of Nonmarital Childbearing in the United States," contains startling news: births to single mothers, which had leveled off in the early 2000s, have risen sharply in recent years. In 2007, nearly 40 percent of all babies born in the United States were born to single women, up from 34 percent in 2002. Some sociologists believe we have reached a tipping point: the link between marriage and parenthood is no longer the norm. Why is this happening, and what does it mean for women, children, and men? There are no simple answers—only difficult questions that we ignore at our peril.
Complicating the discussion, single motherhood comes in many different forms. An unwed mother is not necessarily a solo mother: about 40 percent are living with the baby's father when they give birth, and some later marry. A mother without a partner could be a teenage high school dropout trapped in poverty, or a 30-something professional who decides not to wait for "Mr. Right." While older, better-educated women are far less likely to become single mothers, one in three births to women in their late 20s and almost one in five births to women in their 30s are out of wedlock.
Many blame the growth of single motherhood on selfish, irresponsible men who shun commitment and abandon their partners and children. Others condemn self-centered women who refuse to settle for a less-than-perfect man or want total control over their child's upbringing. Both stereotypes have some truth to them. Yet this trend is also driven by major societal shifts—most of them positive, from unprecedented prosperity to individual freedom, tolerance, the liberation of women, and reliable birth control.
The powerful economic, social, and cultural pressures that once pushed the vast majority of people into marriage are gone almost completely. All that remains is romantic love—and refusing to marry your child's other parent is often seen as more honorable than marrying someone you don't love, at least if you're a woman.
For many feminists, the ability to choose single motherhood is an essential part of female autonomy. According to American University law professor Nancy Polikoff, "It is no tragedy, either on a national scale or in an individual family, for children to be raised without fathers." Nation magazine columnist Katha Pollitt has put it more bluntly: "Children are a joy; many men are not."
But would the children agree? Of course, not every father is a joy to his child. Yet there is abundant evidence that children generally fare better with two parents—and many children without fathers keenly feel their absence.
In one positive development, unmarried fathers today are much more likely than in earlier generations to be a part of their children's lives, even if they are not living with the mother. Even Bristol Palin, the daughter of Republican vice presidential candidate Sarah Palin and currently the nation's most famous teenage unwed mom, is now working out a visitation schedule with the baby's father, Levi Johnston. Yet a visiting dad is usually, even with best intentions, a pale substitute for day-to-day interaction with a father in the home.
We now have a situation in which large numbers of men are alienated from family life and from the next generation. And that's hardly "feminist," at least if feminism means the equality of women and men not only in public life but at home.
For years, feminists have urged men to take on their fair share of domestic responsibilities. While parenting still isn't equal in two-parent families, the fathers of today are far more involved in hands-on child care than their predecessors. Yet, paradoxically, there also far more absentee fathers, due to both divorce and unwed childbearing.
For all its liberated trappings, single motherhood is the ultimate "second shift" for working women who shoulder the full burden of domestic labor. It is also, in some ways, a throwback to the very old-fashioned, decidedly non-feminist idea that family life and child-rearing are a female domain. True, there are also more single fathers today who have custody of their children (usually when the mother is unable or unwilling to raise them); but, for both biological and cultural reasons, the single-parent family is likely to remain an overwhelmingly female-dominated structure.
Millions of single mothers and fathers do their best to be good parents, and their efforts should not be disparaged. Nonetheless, an intact marriage is still the most reliable way to protect the father-child bond. It is neither possible nor desirable to turn back the clock on the changes that have turned marriage from a near-necessity into an uncoerced choice. It is, however, a choice the culture should encourage. Giving up on the two-parent family as an ideal would be a sad defeat.
Cathy Young is a contributing editor at Reason magazine and a columnist at RealClearPolitics. She blogs at The Y Files. This article originally appeared at RealClearPolitics.
Understanding why single motherhood is on the rise
Reason, May 21, 2009
A new report from the National Center for Health Statistics with the dry title, "Changing Patterns of Nonmarital Childbearing in the United States," contains startling news: births to single mothers, which had leveled off in the early 2000s, have risen sharply in recent years. In 2007, nearly 40 percent of all babies born in the United States were born to single women, up from 34 percent in 2002. Some sociologists believe we have reached a tipping point: the link between marriage and parenthood is no longer the norm. Why is this happening, and what does it mean for women, children, and men? There are no simple answers—only difficult questions that we ignore at our peril.
Complicating the discussion, single motherhood comes in many different forms. An unwed mother is not necessarily a solo mother: about 40 percent are living with the baby's father when they give birth, and some later marry. A mother without a partner could be a teenage high school dropout trapped in poverty, or a 30-something professional who decides not to wait for "Mr. Right." While older, better-educated women are far less likely to become single mothers, one in three births to women in their late 20s and almost one in five births to women in their 30s are out of wedlock.
Many blame the growth of single motherhood on selfish, irresponsible men who shun commitment and abandon their partners and children. Others condemn self-centered women who refuse to settle for a less-than-perfect man or want total control over their child's upbringing. Both stereotypes have some truth to them. Yet this trend is also driven by major societal shifts—most of them positive, from unprecedented prosperity to individual freedom, tolerance, the liberation of women, and reliable birth control.
The powerful economic, social, and cultural pressures that once pushed the vast majority of people into marriage are gone almost completely. All that remains is romantic love—and refusing to marry your child's other parent is often seen as more honorable than marrying someone you don't love, at least if you're a woman.
For many feminists, the ability to choose single motherhood is an essential part of female autonomy. According to American University law professor Nancy Polikoff, "It is no tragedy, either on a national scale or in an individual family, for children to be raised without fathers." Nation magazine columnist Katha Pollitt has put it more bluntly: "Children are a joy; many men are not."
But would the children agree? Of course, not every father is a joy to his child. Yet there is abundant evidence that children generally fare better with two parents—and many children without fathers keenly feel their absence.
In one positive development, unmarried fathers today are much more likely than in earlier generations to be a part of their children's lives, even if they are not living with the mother. Even Bristol Palin, the daughter of Republican vice presidential candidate Sarah Palin and currently the nation's most famous teenage unwed mom, is now working out a visitation schedule with the baby's father, Levi Johnston. Yet a visiting dad is usually, even with best intentions, a pale substitute for day-to-day interaction with a father in the home.
We now have a situation in which large numbers of men are alienated from family life and from the next generation. And that's hardly "feminist," at least if feminism means the equality of women and men not only in public life but at home.
For years, feminists have urged men to take on their fair share of domestic responsibilities. While parenting still isn't equal in two-parent families, the fathers of today are far more involved in hands-on child care than their predecessors. Yet, paradoxically, there also far more absentee fathers, due to both divorce and unwed childbearing.
For all its liberated trappings, single motherhood is the ultimate "second shift" for working women who shoulder the full burden of domestic labor. It is also, in some ways, a throwback to the very old-fashioned, decidedly non-feminist idea that family life and child-rearing are a female domain. True, there are also more single fathers today who have custody of their children (usually when the mother is unable or unwilling to raise them); but, for both biological and cultural reasons, the single-parent family is likely to remain an overwhelmingly female-dominated structure.
Millions of single mothers and fathers do their best to be good parents, and their efforts should not be disparaged. Nonetheless, an intact marriage is still the most reliable way to protect the father-child bond. It is neither possible nor desirable to turn back the clock on the changes that have turned marriage from a near-necessity into an uncoerced choice. It is, however, a choice the culture should encourage. Giving up on the two-parent family as an ideal would be a sad defeat.
Cathy Young is a contributing editor at Reason magazine and a columnist at RealClearPolitics. She blogs at The Y Files. This article originally appeared at RealClearPolitics.
Review of Leesons's The Invisible Hook: The Hidden Economics of Pirates
Blackbeard Economics, by Katherine Mangu-Ward
Reason, June 2009
Review of The Invisible Hook: The Hidden Economics of Pirates, by Peter T. Leeson, New Jersey: Princeton University Press, 296 pages, $24.95
Pirates are alluring to novelists and moviemakers because we know they really existed but don’t know enough hard facts to get in the way of a good story. Contemporaneous newspaper accounts and other tales from the early 18th century are colorful but unreliable, tending toward propaganda. They report that these appalling yet appealing “Hell-hounds” marauded for the Jolly Roger, enslaved passing sailors, and tortured the innocent for fun. “Danger lurked in their very Smiles,” one pirate chronicler reported. Pirates were “violators of all Laws, Humane and Divine.”
Portraying the freebooters in the worst possible light worked to the advantage of everyone concerned. For governments, crusading against the outlaws who robbed their merchants and treasury ships was a way to keep public opinion firmly on the side of the state. Practicing pirates, meanwhile, were happy to be depicted as violent and unpredictable outlaws, as this encouraged their prey to surrender and cooperate. In fact, the marauders went to great lengths to ensure that their reputation as heartless ship wreckers and torturers remained intact. The famous Blackbeard, for instance, used to stick sulfur fuses in his great, bushy beard and light them on fire before battles to create a general sense of the demonic. He also occasionally killed his pals without warning, just to keep the fear alive.
But a pirate’s life had less publicized qualities as well: Ships were known among sailors for their relatively decent living conditions, profitsharing opportunities, democratic practices, and racially integrated crews. Life “on the account,” as pirating was known, was often far more civilized than legitimate seamanship.
So how can these two images be reconciled?
Bloodthirsty buccaneers and their progressive alter egos both want the same thing: booty. Cold, hard doubloons drove pirates and their persecutors alike. In The Invisible Hook, George Mason University economist Peter T. Leeson digs into the dollars and cents of piracy. He urges us to see pirates as economic actors, their behavior shaped by incentives, just like the rest of us. Once you’re in an economic state of mind, you can begin to understand actions such as lighting one’s beard on fire, voting, being decent to black people, and torturing captives “for fun”—all equally nutty behaviors to the average 18th-century observer. When Leeson is done guiding you through the pirate world, life on a rogue ship starts to look less like a Carnival cruise with cutlasses and cannons and more like an ongoing condo association meeting at sea.
Robbery on the high seas has existed since ancient times, but the seafaring pirates of popular imagination first arose in the 16th century as agents of the state. These privateers, as they were known, were charged with raiding the ships of enemies—or, more accurately, anyone who couldn’t immediately prove to the pirates that he was a friend. Sir Henry Morgan (yes, the real-life Captain Morgan, for those of you doing rum shots at home) was a big name in 17thcentury state-sponsored piracy. The Welsh-born brute sacked Panama and burned the richest city in New Spain to the ground. For his accomplishments, he was knighted and made lieutenant governor of Jamaica.
Once the War of the Spanish Succession, and with it many opportunities for legally approved pillage, came to an end in 1714, many plunderers realized they preferred piracy to the life of an honest seaman. Others who might rather have stayed on the up and up were unable to find work as the world’s navies contracted.
So the great age of piracy began, and it lasted about a decade. During this period, between 1,000 and 2,000 pirates terrorized the seas at any given time. That may not seem like many, but keep in mind that the entire population of the North American colonies back then was only about 150,000. Navies and merchant sailors outnumbered pirates, with 13,000 men in the British Navy alone, but pirates had the better gig.
Leeson begins with a look inside the piratical pocketbook. In peaceful years, annual pay for legit sailors was £25, equivalent to around $4,000 today. A big haul for a pirate crew, on the other hand, might bring in between £300 and £1,000 per man for a few months’ work. If legally sanctioned sailor pay was bad, the working conditions were worse. Captains on merchant ships held absolute power over their crews, and they regularly ordered floggings, revoked pay or rations, or tied men to the mast. Sailors could sue when they got home, and they occasionally won, but that’s cold comfort when you’re six months at sea, stripes from the lash stinging your back, and ordered to forfeit your rum ration.
This commercial setup, Leeson argues, was the result of a bad incentive structure, not a surfeit of sadistic captains. A ship is a big investment. Once its owner sends it out to sea, lots of bad things can happen. Weather. Navigational errors. Even pirates. If you’re just a schmo sailor on the payroll, it makes sense to slack off when no one is looking and bail out as soon as things get rough. Why not steal from the cargo hold? Why not stay up late drinking and gambling? If pirates attack, of course you will hand over the cargo and beg them to spare your life. It’s not like the slaves, spices, or gold were yours to begin with. Indeed, pirates often compensated the conquered crew so that the sailors would be none the worse for having surrendered, even if their masters were out a significant sum. Captains, who often held a small ownership stake in the ship or were family to the merchant owners, had every incentive to rule by force over their less invested crew.
Pirates, by contrast, were outlaws, with no recognized authorities to settle disputes. So they invented their own ways of doing business. Decades before the American Founders got their act together, pirates were drafting documents full of voting rights, juries, checks and balances, rules for property allocation, even methods for impeachment. The buccaneers may have been less concerned with natural rights than with survival and claiming their fair share of booty, but the end result feels surprisingly like the kind of self-governance we expect from enlightened modern republics. Perhaps even better, since the deal was truly voluntary (for the pirates if not their prey). No one is born a pirate, and everyone has to swear into the contract on each venture.
In his 1724 General History of the Pyrates, Charles Johnson, a probable one-time pirate about whom almost nothing is known, described Capt. Bartholomew Roberts like this: “How indeed Roberts could think that an Oath would be obligatory, where Defiance had been given to the Laws of God and Man, I can’t tell.” Johnson then answers his own question: “He thought their greatest Security lay in this, That it was every one’s Interest to observe them if they were minded to keep up so abominable a Combination.”
So it was that Roberts’ men lived under a kind of constitution, a contract for behavior with rules for the political and the personal all spelled out (albeit with pretty poor spelling). The guidelines were surprisingly tame: Lights out by 8 p.m. No drinking below decks after bedtime. No gambling. No smoking. No brawling. Many a modern American high school student lives a wilder life than pirates did in their heyday.
Yet the outlaw existence between raids wasn’t all wholesome and smoke-free. Going on the account meant agreeing to some unpleasant terms as well. Punishments were harsh on the high seas: Holding back more than a dollar’s worth of treasure from your pirate brethren could result in marooning, “a Barbarous Custom of putting the Offender on Shore, on some desolate or uninhabited Cape or Island,” wrote Johnson, “with a Gun, a few Shot, a Bottle of Water, and a Bottle of Powder, to subsist with, or starve.” Quarrels were to be settled not with fists on deck but with swords or pistols on shore. To bring a lady on board in disguise was punishable by death. Failing to chip in with the fighting could also result in death or marooning.
But this “rougish Commonwealth” also had due process. Caprtains were elected, and they could be removed by a vote of the crew. Speeches were given for and against candidates. One of Capt. Roberts’ sailors, for example, urged his fellows to vote for a leader “who by his Counsel and Bravery seems best able to defend this Commonwealth... such a one I take Roberts to be. A Fellow! I think, in all Respects, worthy of your Esteem and Favour.” Speeches also contained warnings and reminders of the power of the people: “Should a Captain be so saucy as to exceed Prescription at any time, why down with him! it will be a Caution after he is dead to his Successors, of what fatal Consequence any sort of assuming may be.”
A ship’s captain received the same lodging and rations as ordinary sailors, and very similar pay. His one unique power was absolute command during battle; in this way, pirates got the advantage of quick decisions from a powerful commander and total obedience from his fighters when the heat of battle was upon them, while enjoying the leisurely indulgence of deliberation and voting when things were calmer. Roberts’ constitution allowed “the Captain and Quarter-Master to receive two Shares of a Prize; the Master, Boatswain, and Gunner, one Share and a half, and other Officers, one and a Quarter.” Additional payments, agreed upon in advance, went to those who lost eyes or limbs, a primitive sort of workers’ compensation.
Balancing the powers of the captain was the quartermaster, the captain’s peacetime counterpart. Sort of a den mother with a blunderbuss, he oversaw the distribution of loot and generally kept peace on the ship by enforcing the rules and arbitrating disputes. He too could be replaced at any time by a vote.
They may have been outlaws “without government,” Lesson writes, “but they weren’t without governance.” And here’s where Leeson gets to his lesson. The book is actually an argument for extralegal systems of regulation—for ordered anarchy.
When it came time for pirates to swing into action, the main goal was not to have to do battle at all. Thinking economically, intimidation, not cannons, was the buccaneer’s chief weapon. Everyone is familiar with the skull and crossbones, designed to remind prey of the death and torture facing them if they were so foolish as to fight. Less well known is that some pirates added extra flourishes to their Jolly Rogers, advertising which specific murderous madman was about to rain hell on the hapless merchants.
That’s one reason why so many accounts of piracy feature tales of torture. Cruel and unusual punishment was a kind of bloody marketing campaign, Leeson suggests. The problem is that once you’ve concocted a reputation for being crazy and tough, you have to a) keep it, b) brand it, and c) prevent other ships from stealing your brand. As the fictional Dread Pirate Roberts (not to be confused with the historical Capt. Bartholomew Roberts) put it in the cult film The Princess Bride, “Once word leaks out that a pirate has gone soft, people begin to disobey you, and then it’s nothing but work, work, work, all the time.”
The sea is big, and we’re talking about a time before there was a reliable way to calculate longitude, so encountering prey was a challenge. One of the reasons pirates used torture was to save themselves time looking for the next ship. When they boarded a merchant vessel, plunderers went first to the captain’s quarters to find records, maps, and other indications of trade routes and future voyages. These were the real booty, since they bought tomorrow’s income as well. Threats of torture made captives more eager to divulge the whereabouts of plans.
As convincing as Leeson’s account of piratus economicus might be, he’s hardly the first to use pirates to illustrate a broader point about social organization. Charles Kingsley, a 19th-century Christian socialist, wrote a poem, “The Last Buccaneer,” about pirate ships as workers’ cooperatives. In the 1987 book Between the Devil and the Deep Blue Sea, University of Pittsburgh historian Marcus Rediker suggested that pirate ships transported 17th-century English radicalism to American revolutionaries. Eugène Delacroix’s famous painting of a bare-breasted Liberty brandishing the French revolutionary flag, Rediker noted, looked awfully similar to engravings of the notorious lady pirate Anne Bonny, who was typically depicted in similar dishabille.
The cross-dressing exploits of Anne and her fellow disguised lady pirates, coupled with the rules against bringing attractive young lads or gals aboard and a form of mutual insurance called matelotage in which two pirates pledged their support to one another, has prompted Arizona State historian B.R. Burg to create a cottage industry of books on queer pirate theory. In Sodomy and the Pirate Tradition (1984), he claims an “almost universal homosexual involvement among pirates.”
In his 1995 article “Black Men Under the Black Flag,” Kenneth J. Kinkor, a historian and piratologist at the Expedition Whydah Sea-Lab and Learning Center in Provincetown, Massachusetts, compiled the available data on the racial composition of pirate crews. By Kinkor’s reckoning, 25 percent to 30 percent of the average golden-age pirate crew was black. Because of this large minority presence, some have argued that pirates were somehow more enlightened than other whites of their age, recognizing blacks as fellow victims of the system.
But what scant evidence there is suggests that Caucasian pirates felt the same way about blacks as did most whites of the time. It seems likely that they simply worked with black pirates if that was the best way to get treasure. Many blacks were worth more as free colleagues than as slaves. “Sometimes,” writes Leeson, “the invisible hook led pirates to display a racial progressivism in practice that didn’t accord with the racial views in their minds.”
Unfortunately, there isn’t much data to support the notion of pirate ships as Enlightenment-born societies of revolutionary republicans and tolerant liberals. For every apparently compassionate act, there is an act of enslavement or murder. For every cooperative effort, there is a brutal maiming or marooning. Everyone wants a piece of the pirates, but most accounts struggle to explain the ways pirates stubbornly deviate from the progressive ideal. Leeson convincingly argues that “without economics, pirates...are a veritable ball of contradictions. They’re sadistic pacifists; womanizing homosexuals; treasure-lusting socialists...and lawless anarchists who lived by a strict code of rules.” With economics, they’re a bunch of gossipy racists who go to bed early, ban women from the premises, and bluster to avoid fighting. These fastidious, calculating pirates may have been a far cry from the romantic, mad buccaneers of legend. But Peter Leeson’s economical actors have an appeal all their own.
Katherine Mangu-Ward is an associate editor at reason.
Reason, June 2009
Review of The Invisible Hook: The Hidden Economics of Pirates, by Peter T. Leeson, New Jersey: Princeton University Press, 296 pages, $24.95
Pirates are alluring to novelists and moviemakers because we know they really existed but don’t know enough hard facts to get in the way of a good story. Contemporaneous newspaper accounts and other tales from the early 18th century are colorful but unreliable, tending toward propaganda. They report that these appalling yet appealing “Hell-hounds” marauded for the Jolly Roger, enslaved passing sailors, and tortured the innocent for fun. “Danger lurked in their very Smiles,” one pirate chronicler reported. Pirates were “violators of all Laws, Humane and Divine.”
Portraying the freebooters in the worst possible light worked to the advantage of everyone concerned. For governments, crusading against the outlaws who robbed their merchants and treasury ships was a way to keep public opinion firmly on the side of the state. Practicing pirates, meanwhile, were happy to be depicted as violent and unpredictable outlaws, as this encouraged their prey to surrender and cooperate. In fact, the marauders went to great lengths to ensure that their reputation as heartless ship wreckers and torturers remained intact. The famous Blackbeard, for instance, used to stick sulfur fuses in his great, bushy beard and light them on fire before battles to create a general sense of the demonic. He also occasionally killed his pals without warning, just to keep the fear alive.
But a pirate’s life had less publicized qualities as well: Ships were known among sailors for their relatively decent living conditions, profitsharing opportunities, democratic practices, and racially integrated crews. Life “on the account,” as pirating was known, was often far more civilized than legitimate seamanship.
So how can these two images be reconciled?
Bloodthirsty buccaneers and their progressive alter egos both want the same thing: booty. Cold, hard doubloons drove pirates and their persecutors alike. In The Invisible Hook, George Mason University economist Peter T. Leeson digs into the dollars and cents of piracy. He urges us to see pirates as economic actors, their behavior shaped by incentives, just like the rest of us. Once you’re in an economic state of mind, you can begin to understand actions such as lighting one’s beard on fire, voting, being decent to black people, and torturing captives “for fun”—all equally nutty behaviors to the average 18th-century observer. When Leeson is done guiding you through the pirate world, life on a rogue ship starts to look less like a Carnival cruise with cutlasses and cannons and more like an ongoing condo association meeting at sea.
Robbery on the high seas has existed since ancient times, but the seafaring pirates of popular imagination first arose in the 16th century as agents of the state. These privateers, as they were known, were charged with raiding the ships of enemies—or, more accurately, anyone who couldn’t immediately prove to the pirates that he was a friend. Sir Henry Morgan (yes, the real-life Captain Morgan, for those of you doing rum shots at home) was a big name in 17thcentury state-sponsored piracy. The Welsh-born brute sacked Panama and burned the richest city in New Spain to the ground. For his accomplishments, he was knighted and made lieutenant governor of Jamaica.
Once the War of the Spanish Succession, and with it many opportunities for legally approved pillage, came to an end in 1714, many plunderers realized they preferred piracy to the life of an honest seaman. Others who might rather have stayed on the up and up were unable to find work as the world’s navies contracted.
So the great age of piracy began, and it lasted about a decade. During this period, between 1,000 and 2,000 pirates terrorized the seas at any given time. That may not seem like many, but keep in mind that the entire population of the North American colonies back then was only about 150,000. Navies and merchant sailors outnumbered pirates, with 13,000 men in the British Navy alone, but pirates had the better gig.
Leeson begins with a look inside the piratical pocketbook. In peaceful years, annual pay for legit sailors was £25, equivalent to around $4,000 today. A big haul for a pirate crew, on the other hand, might bring in between £300 and £1,000 per man for a few months’ work. If legally sanctioned sailor pay was bad, the working conditions were worse. Captains on merchant ships held absolute power over their crews, and they regularly ordered floggings, revoked pay or rations, or tied men to the mast. Sailors could sue when they got home, and they occasionally won, but that’s cold comfort when you’re six months at sea, stripes from the lash stinging your back, and ordered to forfeit your rum ration.
This commercial setup, Leeson argues, was the result of a bad incentive structure, not a surfeit of sadistic captains. A ship is a big investment. Once its owner sends it out to sea, lots of bad things can happen. Weather. Navigational errors. Even pirates. If you’re just a schmo sailor on the payroll, it makes sense to slack off when no one is looking and bail out as soon as things get rough. Why not steal from the cargo hold? Why not stay up late drinking and gambling? If pirates attack, of course you will hand over the cargo and beg them to spare your life. It’s not like the slaves, spices, or gold were yours to begin with. Indeed, pirates often compensated the conquered crew so that the sailors would be none the worse for having surrendered, even if their masters were out a significant sum. Captains, who often held a small ownership stake in the ship or were family to the merchant owners, had every incentive to rule by force over their less invested crew.
Pirates, by contrast, were outlaws, with no recognized authorities to settle disputes. So they invented their own ways of doing business. Decades before the American Founders got their act together, pirates were drafting documents full of voting rights, juries, checks and balances, rules for property allocation, even methods for impeachment. The buccaneers may have been less concerned with natural rights than with survival and claiming their fair share of booty, but the end result feels surprisingly like the kind of self-governance we expect from enlightened modern republics. Perhaps even better, since the deal was truly voluntary (for the pirates if not their prey). No one is born a pirate, and everyone has to swear into the contract on each venture.
In his 1724 General History of the Pyrates, Charles Johnson, a probable one-time pirate about whom almost nothing is known, described Capt. Bartholomew Roberts like this: “How indeed Roberts could think that an Oath would be obligatory, where Defiance had been given to the Laws of God and Man, I can’t tell.” Johnson then answers his own question: “He thought their greatest Security lay in this, That it was every one’s Interest to observe them if they were minded to keep up so abominable a Combination.”
So it was that Roberts’ men lived under a kind of constitution, a contract for behavior with rules for the political and the personal all spelled out (albeit with pretty poor spelling). The guidelines were surprisingly tame: Lights out by 8 p.m. No drinking below decks after bedtime. No gambling. No smoking. No brawling. Many a modern American high school student lives a wilder life than pirates did in their heyday.
Yet the outlaw existence between raids wasn’t all wholesome and smoke-free. Going on the account meant agreeing to some unpleasant terms as well. Punishments were harsh on the high seas: Holding back more than a dollar’s worth of treasure from your pirate brethren could result in marooning, “a Barbarous Custom of putting the Offender on Shore, on some desolate or uninhabited Cape or Island,” wrote Johnson, “with a Gun, a few Shot, a Bottle of Water, and a Bottle of Powder, to subsist with, or starve.” Quarrels were to be settled not with fists on deck but with swords or pistols on shore. To bring a lady on board in disguise was punishable by death. Failing to chip in with the fighting could also result in death or marooning.
But this “rougish Commonwealth” also had due process. Caprtains were elected, and they could be removed by a vote of the crew. Speeches were given for and against candidates. One of Capt. Roberts’ sailors, for example, urged his fellows to vote for a leader “who by his Counsel and Bravery seems best able to defend this Commonwealth... such a one I take Roberts to be. A Fellow! I think, in all Respects, worthy of your Esteem and Favour.” Speeches also contained warnings and reminders of the power of the people: “Should a Captain be so saucy as to exceed Prescription at any time, why down with him! it will be a Caution after he is dead to his Successors, of what fatal Consequence any sort of assuming may be.”
A ship’s captain received the same lodging and rations as ordinary sailors, and very similar pay. His one unique power was absolute command during battle; in this way, pirates got the advantage of quick decisions from a powerful commander and total obedience from his fighters when the heat of battle was upon them, while enjoying the leisurely indulgence of deliberation and voting when things were calmer. Roberts’ constitution allowed “the Captain and Quarter-Master to receive two Shares of a Prize; the Master, Boatswain, and Gunner, one Share and a half, and other Officers, one and a Quarter.” Additional payments, agreed upon in advance, went to those who lost eyes or limbs, a primitive sort of workers’ compensation.
Balancing the powers of the captain was the quartermaster, the captain’s peacetime counterpart. Sort of a den mother with a blunderbuss, he oversaw the distribution of loot and generally kept peace on the ship by enforcing the rules and arbitrating disputes. He too could be replaced at any time by a vote.
They may have been outlaws “without government,” Lesson writes, “but they weren’t without governance.” And here’s where Leeson gets to his lesson. The book is actually an argument for extralegal systems of regulation—for ordered anarchy.
When it came time for pirates to swing into action, the main goal was not to have to do battle at all. Thinking economically, intimidation, not cannons, was the buccaneer’s chief weapon. Everyone is familiar with the skull and crossbones, designed to remind prey of the death and torture facing them if they were so foolish as to fight. Less well known is that some pirates added extra flourishes to their Jolly Rogers, advertising which specific murderous madman was about to rain hell on the hapless merchants.
That’s one reason why so many accounts of piracy feature tales of torture. Cruel and unusual punishment was a kind of bloody marketing campaign, Leeson suggests. The problem is that once you’ve concocted a reputation for being crazy and tough, you have to a) keep it, b) brand it, and c) prevent other ships from stealing your brand. As the fictional Dread Pirate Roberts (not to be confused with the historical Capt. Bartholomew Roberts) put it in the cult film The Princess Bride, “Once word leaks out that a pirate has gone soft, people begin to disobey you, and then it’s nothing but work, work, work, all the time.”
The sea is big, and we’re talking about a time before there was a reliable way to calculate longitude, so encountering prey was a challenge. One of the reasons pirates used torture was to save themselves time looking for the next ship. When they boarded a merchant vessel, plunderers went first to the captain’s quarters to find records, maps, and other indications of trade routes and future voyages. These were the real booty, since they bought tomorrow’s income as well. Threats of torture made captives more eager to divulge the whereabouts of plans.
As convincing as Leeson’s account of piratus economicus might be, he’s hardly the first to use pirates to illustrate a broader point about social organization. Charles Kingsley, a 19th-century Christian socialist, wrote a poem, “The Last Buccaneer,” about pirate ships as workers’ cooperatives. In the 1987 book Between the Devil and the Deep Blue Sea, University of Pittsburgh historian Marcus Rediker suggested that pirate ships transported 17th-century English radicalism to American revolutionaries. Eugène Delacroix’s famous painting of a bare-breasted Liberty brandishing the French revolutionary flag, Rediker noted, looked awfully similar to engravings of the notorious lady pirate Anne Bonny, who was typically depicted in similar dishabille.
The cross-dressing exploits of Anne and her fellow disguised lady pirates, coupled with the rules against bringing attractive young lads or gals aboard and a form of mutual insurance called matelotage in which two pirates pledged their support to one another, has prompted Arizona State historian B.R. Burg to create a cottage industry of books on queer pirate theory. In Sodomy and the Pirate Tradition (1984), he claims an “almost universal homosexual involvement among pirates.”
In his 1995 article “Black Men Under the Black Flag,” Kenneth J. Kinkor, a historian and piratologist at the Expedition Whydah Sea-Lab and Learning Center in Provincetown, Massachusetts, compiled the available data on the racial composition of pirate crews. By Kinkor’s reckoning, 25 percent to 30 percent of the average golden-age pirate crew was black. Because of this large minority presence, some have argued that pirates were somehow more enlightened than other whites of their age, recognizing blacks as fellow victims of the system.
But what scant evidence there is suggests that Caucasian pirates felt the same way about blacks as did most whites of the time. It seems likely that they simply worked with black pirates if that was the best way to get treasure. Many blacks were worth more as free colleagues than as slaves. “Sometimes,” writes Leeson, “the invisible hook led pirates to display a racial progressivism in practice that didn’t accord with the racial views in their minds.”
Unfortunately, there isn’t much data to support the notion of pirate ships as Enlightenment-born societies of revolutionary republicans and tolerant liberals. For every apparently compassionate act, there is an act of enslavement or murder. For every cooperative effort, there is a brutal maiming or marooning. Everyone wants a piece of the pirates, but most accounts struggle to explain the ways pirates stubbornly deviate from the progressive ideal. Leeson convincingly argues that “without economics, pirates...are a veritable ball of contradictions. They’re sadistic pacifists; womanizing homosexuals; treasure-lusting socialists...and lawless anarchists who lived by a strict code of rules.” With economics, they’re a bunch of gossipy racists who go to bed early, ban women from the premises, and bluster to avoid fighting. These fastidious, calculating pirates may have been a far cry from the romantic, mad buccaneers of legend. But Peter Leeson’s economical actors have an appeal all their own.
Katherine Mangu-Ward is an associate editor at reason.
Thursday, May 21, 2009
What Unions Do: How Labor Unions Affect Jobs and the Economy
What Unions Do: How Labor Unions Affect Jobs and the Economy. By James Sherk
Heritage Backgrounder #2275
May 21, 2009
What do unions do? The AFL-CIO argues that unions offer a pathway to higher wages and prosperity for the middle class. Critics point to the collapse of many highly unionized domestic industries and argue that unions harm the economy. To whom should policymakers listen? What unions do has been studied extensively by economists, and a broad survey of academic studies shows that while unions can sometimes achieve benefits for their members, they harm the overall economy.
Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers' wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.
The average union member earns more than the average non-union worker. However, that does not mean that expanding union membership will raise wages: Few workers who join a union today get a pay raise. What explains these apparently contradictory findings? The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business. Consequently, unions do not negotiate higher wages for many newly organized workers. These days, unions win higher wages for employees only at companies with competitive advantages that allow them to pay higher wages, such as successful research and development (R&D) projects or capital investments.
Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.
This, along with the fact that unions function as labor cartels that seek to reduce job opportunities, causes unionized companies to lose jobs. Economists consistently find that unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members--non-union manufacturing employment has risen. Research also shows that widespread unionization delays recovery from economic downturns.
Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. On balance, labor cartels harm the economy, and enacting policies designed to force workers into unions will only prolong the recession.
Full report here
Heritage Backgrounder #2275
May 21, 2009
What do unions do? The AFL-CIO argues that unions offer a pathway to higher wages and prosperity for the middle class. Critics point to the collapse of many highly unionized domestic industries and argue that unions harm the economy. To whom should policymakers listen? What unions do has been studied extensively by economists, and a broad survey of academic studies shows that while unions can sometimes achieve benefits for their members, they harm the overall economy.
Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers' wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.
The average union member earns more than the average non-union worker. However, that does not mean that expanding union membership will raise wages: Few workers who join a union today get a pay raise. What explains these apparently contradictory findings? The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business. Consequently, unions do not negotiate higher wages for many newly organized workers. These days, unions win higher wages for employees only at companies with competitive advantages that allow them to pay higher wages, such as successful research and development (R&D) projects or capital investments.
Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.
This, along with the fact that unions function as labor cartels that seek to reduce job opportunities, causes unionized companies to lose jobs. Economists consistently find that unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members--non-union manufacturing employment has risen. Research also shows that widespread unionization delays recovery from economic downturns.
Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. On balance, labor cartels harm the economy, and enacting policies designed to force workers into unions will only prolong the recession.
Full report here
A High-Speed Rail Mirage
A High-Speed Rail Mirage, by Randal O'Toole
This article appeared in USA Today on May 20, 2009
At first glance, President Obama's enthusiasm for building a high-speed rail network linking major cities seems like a wise move. On closer inspection, however, it is clear that the plan would cost taxpayers billions of dollars and do little to reduce traffic congestion or improve the environment.
Already California, Florida, Illinois and other states are applying for funds under the president's plan. But, except for rail contractors, Americans should find little reason to like this proposal.
Although every taxpayer would share the cost of these trains, high-speed rails are not about serving the common people. Instead, they are aimed at the elite. Japanese and French high-speed trains are attractive to tourists, but they're not heavily used by local residents. Residents of Japan and France on average ride their bullet trains less than 400 miles a year.
Pricey option
Amtrak charges a minimum of $99 for its high-speed Acela from New York to Washington, but only $72 for its conventional train. Fares for unsubsidized buses on this route start as low as $20 (including free Wi-Fi), while airfares start at $99. Only the wealthy and those whose employers cover the cost will pay the $99 rail fare.
Obama's 9,000-mile high-speed rail plan reaches just 33 states, yet the $13 billion he proposes to spend would cover about 2.5% to 25% of the cost, depending on how the system is built. In contrast with the interstate highway system, which paid for itself out of user fees, high-speed rail fares would not cover the capital costs and only part of the operating costs.
Most of Obama's plan should really be called "moderate-speed rail," as it would upgrade existing freight lines to run passenger trains at top speeds of 110 mph. At around $5 million per mile, the total cost would come close to $50 billion.
Not satisfied with moderate-speed trains, California says it wants half of all federal funds so it can build brand-new 220-mph rail lines. But it's unlikely other states will settle for the slower trains if California gets the faster ones. Building fast trains nationwide would cost at least $500 billion. (By comparison, and adjusting for inflation, the 47,000-mile interstate highway system cost about $425 billion.)
Little congestion relief
Besides the high costs, these trains do little to relieve congestion. "Not a single high-speed track built to date has had any perceptible impact on the road traffic" in Europe, says Ari Vatanen, a European Parliament member. California predicts its 220-mph trains would take just 3.5% of cars off of roads. California highway traffic grows that much every two years.
Moderate-speed trains would do even less. Nor would such trains be good for the environment. Amtrak diesel trains are only a little more energy efficient than flying or driving, and pumping those trains up to 110 mph would reduce their efficiency. Because planes and cars are growing 2% more energy-efficient per year, rail would fare poorly by such measures over the next 15 to 20 years.
Moreover, high-speed rail consumes enormous amounts of energy and emits enormous volumes of greenhouse gases. These would cancel out any operational savings over cars and planes.
Interstates paid for themselves out of gas taxes, and most Americans use them almost every day. Rail requires huge tax subsidies and would regularly serve only a small elite. Which is the better symbol for the America President Obama wants to build?
This article appeared in USA Today on May 20, 2009
At first glance, President Obama's enthusiasm for building a high-speed rail network linking major cities seems like a wise move. On closer inspection, however, it is clear that the plan would cost taxpayers billions of dollars and do little to reduce traffic congestion or improve the environment.
Already California, Florida, Illinois and other states are applying for funds under the president's plan. But, except for rail contractors, Americans should find little reason to like this proposal.
Although every taxpayer would share the cost of these trains, high-speed rails are not about serving the common people. Instead, they are aimed at the elite. Japanese and French high-speed trains are attractive to tourists, but they're not heavily used by local residents. Residents of Japan and France on average ride their bullet trains less than 400 miles a year.
Pricey option
Amtrak charges a minimum of $99 for its high-speed Acela from New York to Washington, but only $72 for its conventional train. Fares for unsubsidized buses on this route start as low as $20 (including free Wi-Fi), while airfares start at $99. Only the wealthy and those whose employers cover the cost will pay the $99 rail fare.
Obama's 9,000-mile high-speed rail plan reaches just 33 states, yet the $13 billion he proposes to spend would cover about 2.5% to 25% of the cost, depending on how the system is built. In contrast with the interstate highway system, which paid for itself out of user fees, high-speed rail fares would not cover the capital costs and only part of the operating costs.
Most of Obama's plan should really be called "moderate-speed rail," as it would upgrade existing freight lines to run passenger trains at top speeds of 110 mph. At around $5 million per mile, the total cost would come close to $50 billion.
Not satisfied with moderate-speed trains, California says it wants half of all federal funds so it can build brand-new 220-mph rail lines. But it's unlikely other states will settle for the slower trains if California gets the faster ones. Building fast trains nationwide would cost at least $500 billion. (By comparison, and adjusting for inflation, the 47,000-mile interstate highway system cost about $425 billion.)
Little congestion relief
Besides the high costs, these trains do little to relieve congestion. "Not a single high-speed track built to date has had any perceptible impact on the road traffic" in Europe, says Ari Vatanen, a European Parliament member. California predicts its 220-mph trains would take just 3.5% of cars off of roads. California highway traffic grows that much every two years.
Moderate-speed trains would do even less. Nor would such trains be good for the environment. Amtrak diesel trains are only a little more energy efficient than flying or driving, and pumping those trains up to 110 mph would reduce their efficiency. Because planes and cars are growing 2% more energy-efficient per year, rail would fare poorly by such measures over the next 15 to 20 years.
Moreover, high-speed rail consumes enormous amounts of energy and emits enormous volumes of greenhouse gases. These would cancel out any operational savings over cars and planes.
Interstates paid for themselves out of gas taxes, and most Americans use them almost every day. Rail requires huge tax subsidies and would regularly serve only a small elite. Which is the better symbol for the America President Obama wants to build?
Seven Bad Ideas for Health Care Reform
Obamacare to Come: Seven Bad Ideas for Health Care Reform. By Michael D. Tanner
Cato, May 21, 2009
President Obama has made it clear that reforming the American health care system will be one of his top priorities. In response, congressional leaders have promised to introduce legislation by this summer, and they hope for an initial vote in the Senate before the Labor Day recess.
While the Obama administration has not, and does not seem likely to, put forward a specific reform plan, it is possible to discern the key components of any plan likely to emerge from Congress:
Full report:
Download the PDF of Policy Analysis no. 638 (505 KB)
View this Policy Analysis in HTML
Cato, May 21, 2009
President Obama has made it clear that reforming the American health care system will be one of his top priorities. In response, congressional leaders have promised to introduce legislation by this summer, and they hope for an initial vote in the Senate before the Labor Day recess.
While the Obama administration has not, and does not seem likely to, put forward a specific reform plan, it is possible to discern the key components of any plan likely to emerge from Congress:
- At a time of rising unemployment, the government would raise the cost of hiring workers by requiring employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
- Every American would be required to buy an insurance policy that meets certain government requirements. Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government's definition of "acceptable insurance."
- A government-run plan similar to Medicare would be set up in competition with private insurance, with people able to choose either private insurance or the taxpayer-subsidized public plan. Subsidies and cost-shifting would encourage Americans to shift to the government plan.
- The government would undertake comparative-effectiveness research and cost-effectiveness research, and use the results of that research to impose practice guidelines on providers — initially, in government programs such as Medicare and Medicaid, but possibly eventually extending such rationing to private insurance plans.
- Private insurance would face a host of new regulations, including a requirement to insure all applicants and a prohibition on pricing premiums on the basis of risk.
- Subsidies would be available to help middle-income people purchase insurance, while government programs such as Medicare and Medicaid would be expanded.
- Finally, the government would subsidize and manage the development of a national system of electronic medical records.
Full report:
Download the PDF of Policy Analysis no. 638 (505 KB)
View this Policy Analysis in HTML
Historic compromise on tough fuel economy rules: 'Ford Might Not Survive'
'Ford Might Not Survive.' By Henry Payne
Planet Gore/NRO, May 22, 2009
Detroit, Mich. — Washington’s lap-dog press obediently wagged their tails yesterday at The One’s announcement that autos would have to achieve an absurd 35 mpg in six years (a 40 percent increase in little over one product cycle). Even the Detroit Free Press — which might ask whether the bankrupt industry in its backyard could afford government edicts that will increase their per vehicle costs from $2,500 to $8,000 — fell in line.“President Barack Obama announced a historic compromise on tough fuel economy rules,” gushed Washington reporter Justin Hyde, that “were a ‘harbinger of a change’ for Washington.”
The only dissonant note in the Free Press account was a stray thought about whether anyone would actually buy Obama’s dream cars. “The wild card remains consumers,” allowed the Freep. In a consumer-based market economy, consumers are a “wild card?”Fortunately, media watchdogs still exist.
Los Angeles Times reporter Jim Tankersley took the novel approach of calling sources to find that the “great victory” (as Obama pal Guv Schwarzenegger put it) reached by automakers, greens, and pols was not all hugs and kisses.In fact, Ford had cold feet about the deal right through the weekend. As the only Detroit company without a direct line to Uncle Sugar, Ford faces the massive costs of new mandates alone.
On Sunday, just two days before Obama’s big Rose Garden announcement, reports Tankersley, “a senior Ford executive said the company had run the numbers again and concluded it might not survive if it accepted the deal.”
Ford might not survive.
“In the end, with more number-crunching and another application of White House pressure, Ford did not bolt,” continued the Times report. And since we know the Obama adminstration threatened Chrysler secured debtholders into submission, “White House pressure” is a loaded term.
Whatever pressure was brought, Ford also likely got guarantees that it would have access to the 3 percent of cap-and-tax revenue Mich. Rep. John Dingell has negotiated as part of the upcoming energy bill.
In an industry where government wields unprecedented power, we need watchdog journalism.
The Times report also bucked its media brethren by actually talking to Republicans and the picture got even more chilling.
"These exact companies were fighting this . . . tooth and nail six months ago, and now suddenly they love it?" Rep. John Campbell (R., Calif.) said, accurately reconstructing the recent past. "No, they don't love it. This is what this administration is doing: This administration is autocratically forcing people to do whatever it wants."
Even Schwarzenegger pointed out the 800-pound Rottweiler in the room. "All of a sudden, the car manufacturers needed . . . the taxpayers' money," he said. "So in order to get that help, I'm sure that President Obama said: 'OK . . . here's what you need to do.' "
Translation: Let me make a deal youse Detroiters can’t refuse.
Planet Gore/NRO, May 22, 2009
Detroit, Mich. — Washington’s lap-dog press obediently wagged their tails yesterday at The One’s announcement that autos would have to achieve an absurd 35 mpg in six years (a 40 percent increase in little over one product cycle). Even the Detroit Free Press — which might ask whether the bankrupt industry in its backyard could afford government edicts that will increase their per vehicle costs from $2,500 to $8,000 — fell in line.“President Barack Obama announced a historic compromise on tough fuel economy rules,” gushed Washington reporter Justin Hyde, that “were a ‘harbinger of a change’ for Washington.”
The only dissonant note in the Free Press account was a stray thought about whether anyone would actually buy Obama’s dream cars. “The wild card remains consumers,” allowed the Freep. In a consumer-based market economy, consumers are a “wild card?”Fortunately, media watchdogs still exist.
Los Angeles Times reporter Jim Tankersley took the novel approach of calling sources to find that the “great victory” (as Obama pal Guv Schwarzenegger put it) reached by automakers, greens, and pols was not all hugs and kisses.In fact, Ford had cold feet about the deal right through the weekend. As the only Detroit company without a direct line to Uncle Sugar, Ford faces the massive costs of new mandates alone.
On Sunday, just two days before Obama’s big Rose Garden announcement, reports Tankersley, “a senior Ford executive said the company had run the numbers again and concluded it might not survive if it accepted the deal.”
Ford might not survive.
“In the end, with more number-crunching and another application of White House pressure, Ford did not bolt,” continued the Times report. And since we know the Obama adminstration threatened Chrysler secured debtholders into submission, “White House pressure” is a loaded term.
Whatever pressure was brought, Ford also likely got guarantees that it would have access to the 3 percent of cap-and-tax revenue Mich. Rep. John Dingell has negotiated as part of the upcoming energy bill.
In an industry where government wields unprecedented power, we need watchdog journalism.
The Times report also bucked its media brethren by actually talking to Republicans and the picture got even more chilling.
"These exact companies were fighting this . . . tooth and nail six months ago, and now suddenly they love it?" Rep. John Campbell (R., Calif.) said, accurately reconstructing the recent past. "No, they don't love it. This is what this administration is doing: This administration is autocratically forcing people to do whatever it wants."
Even Schwarzenegger pointed out the 800-pound Rottweiler in the room. "All of a sudden, the car manufacturers needed . . . the taxpayers' money," he said. "So in order to get that help, I'm sure that President Obama said: 'OK . . . here's what you need to do.' "
Translation: Let me make a deal youse Detroiters can’t refuse.
WaPo: A good credit card bill that isn't really needed
A Good Credit Card Bill . . . WaPo Editorial
. . . That isn't really needed
WaPo, Thursday, May 21, 2009
WHY, YOU MIGHT ask, did Congress pass new credit card legislation just months after the Federal Reserve Board adopted what Fed Chairman Ben S. Bernanke described as "the most comprehensive and sweeping reforms" of credit card accounts? The legislation isn't identical to the Fed reforms, but it is awfully similar. As much as anything, this is about Congress not wanting to let a ripe issue go by -- especially one with more popular appeal than, say, bailing out banks.
Redundant as the bill might be, the basic changes make sense. Credit card contracts, and all the fine print that comes with them, have become far more complex over the years; few would disagree with that. To help clarify the terms, the Fed issued a number of changes under the Federal Trade Commission Act and the Truth in Lending Act. Included were requirements for simplified language to help customers understand what they are agreeing to, requirements for a 45-day notice of rate increases (rather than 15), and summary tables of changes in key borrowing terms to make the information more obvious. The Fed also restricted the circumstances under which interest rates could be increased on outstanding balances or accounts with promotional rates; ensured that consumers have adequate time between receiving a bill and having to make a payment; prohibited double-cycle billing; and required that payments be applied to balances carrying the highest interest rates or across the board on balances carrying different rates and not just to balances with the lowest rates.
The Fed rules aren't scheduled to take effect until July 1, 2010, and Congress wanted to speed things up: That's the rationale for a legislative package. However, the time Congress has taken to put the bill together means most changes won't be phased in much sooner than the Federal Reserve rules will be. Congress also has added some measures, including penalty restrictions and disclosure requirements regarding how long it would take to pay off a debt if only the minimum amount were paid each month, as well as an absurd provision that would allow visitors to national parks to carry concealed weapons. But for the most part, the legislation is strikingly similar to what is already set to be phased in.
Increasing clarity is sensible. The new restrictions also make sense on balance, though there will be trade-offs: lending, especially to small businesses and low-income people, who happen to be the riskiest borrowers, will be negatively affected. Fortunately, Congress has resisted the bad idea of placing a cap on the interest rates that companies can charge. Overall, ending the model under which profits stem from customer confusion is a sensible reform -- even if Congress didn't need to jump into the game to get us there.
. . . That isn't really needed
WaPo, Thursday, May 21, 2009
WHY, YOU MIGHT ask, did Congress pass new credit card legislation just months after the Federal Reserve Board adopted what Fed Chairman Ben S. Bernanke described as "the most comprehensive and sweeping reforms" of credit card accounts? The legislation isn't identical to the Fed reforms, but it is awfully similar. As much as anything, this is about Congress not wanting to let a ripe issue go by -- especially one with more popular appeal than, say, bailing out banks.
Redundant as the bill might be, the basic changes make sense. Credit card contracts, and all the fine print that comes with them, have become far more complex over the years; few would disagree with that. To help clarify the terms, the Fed issued a number of changes under the Federal Trade Commission Act and the Truth in Lending Act. Included were requirements for simplified language to help customers understand what they are agreeing to, requirements for a 45-day notice of rate increases (rather than 15), and summary tables of changes in key borrowing terms to make the information more obvious. The Fed also restricted the circumstances under which interest rates could be increased on outstanding balances or accounts with promotional rates; ensured that consumers have adequate time between receiving a bill and having to make a payment; prohibited double-cycle billing; and required that payments be applied to balances carrying the highest interest rates or across the board on balances carrying different rates and not just to balances with the lowest rates.
The Fed rules aren't scheduled to take effect until July 1, 2010, and Congress wanted to speed things up: That's the rationale for a legislative package. However, the time Congress has taken to put the bill together means most changes won't be phased in much sooner than the Federal Reserve rules will be. Congress also has added some measures, including penalty restrictions and disclosure requirements regarding how long it would take to pay off a debt if only the minimum amount were paid each month, as well as an absurd provision that would allow visitors to national parks to carry concealed weapons. But for the most part, the legislation is strikingly similar to what is already set to be phased in.
Increasing clarity is sensible. The new restrictions also make sense on balance, though there will be trade-offs: lending, especially to small businesses and low-income people, who happen to be the riskiest borrowers, will be negatively affected. Fortunately, Congress has resisted the bad idea of placing a cap on the interest rates that companies can charge. Overall, ending the model under which profits stem from customer confusion is a sensible reform -- even if Congress didn't need to jump into the game to get us there.
About Those 'Speculators' . . . Pension funds also got whacked by Uncle Sam
About Those 'Speculators' . . . WSJ Editorial
Pension funds also got whacked by Uncle Sam.
WSJ, May 21, 2009
Remember how President Obama blamed Chrysler's bankruptcy filing last month on "a small group of speculators" who turned down Treasury's $2 billion final offer for their $6.9 billion in debt? Well, it turns out that hedge funds and other short sellers weren't the only secured creditors who got a raw deal from Uncle Sam.
Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government," reports Mr. Mourdock.
Far from being speculators, these funds represent retired public employees, including cops and teachers. The funds paid a premium to buy "secured" status, only to discover that they were politically outranked by the United Auto Workers in the White House hierarchy.
"In the past, to be 'secured' meant an investor was 'first in line' in the event of a bankruptcy and 'non-secured' creditors would receive value after secured-creditors were paid," Mr. Mourdock says. "In the Chrysler bankruptcy, however, secured creditors received $.29 on the dollar even as non-secured creditors received higher values and ended up with a 55% ownership of the new company, which is fundamentally wrong and a dangerous precedent to the capital markets."
We've worried that the Chrysler sandbagging would discourage bond investment. And, sure enough, Mr. Mourdock says that from now on no funds under his control will invest in the secured debt of "General Motors, other manufacturing companies, or those insurance companies who have or will be receiving bailout funds." Given the recent actions by the feds, he adds, "the risk is too great for any prudent investor to accept."
This isn't political grandstanding. Public investment officials like Mr. Mourdock have a fiduciary duty to seek maximum returns for retirees. The question for all public officials responsible for investing pension money is whether they too should conclude that investing in U.S.-aided companies now carries so much political risk that it violates their legal obligations. Such are the wages of White House disdain for legal contracts.
Pension funds also got whacked by Uncle Sam.
WSJ, May 21, 2009
Remember how President Obama blamed Chrysler's bankruptcy filing last month on "a small group of speculators" who turned down Treasury's $2 billion final offer for their $6.9 billion in debt? Well, it turns out that hedge funds and other short sellers weren't the only secured creditors who got a raw deal from Uncle Sam.
Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government," reports Mr. Mourdock.
Far from being speculators, these funds represent retired public employees, including cops and teachers. The funds paid a premium to buy "secured" status, only to discover that they were politically outranked by the United Auto Workers in the White House hierarchy.
"In the past, to be 'secured' meant an investor was 'first in line' in the event of a bankruptcy and 'non-secured' creditors would receive value after secured-creditors were paid," Mr. Mourdock says. "In the Chrysler bankruptcy, however, secured creditors received $.29 on the dollar even as non-secured creditors received higher values and ended up with a 55% ownership of the new company, which is fundamentally wrong and a dangerous precedent to the capital markets."
We've worried that the Chrysler sandbagging would discourage bond investment. And, sure enough, Mr. Mourdock says that from now on no funds under his control will invest in the secured debt of "General Motors, other manufacturing companies, or those insurance companies who have or will be receiving bailout funds." Given the recent actions by the feds, he adds, "the risk is too great for any prudent investor to accept."
This isn't political grandstanding. Public investment officials like Mr. Mourdock have a fiduciary duty to seek maximum returns for retirees. The question for all public officials responsible for investing pension money is whether they too should conclude that investing in U.S.-aided companies now carries so much political risk that it violates their legal obligations. Such are the wages of White House disdain for legal contracts.
How to Win the 'Long, Hard Slog' - WSJ.com
How to Win the 'Long, Hard Slog' - WSJ.com. By Douglas Feith
Obama is right that we need to be better at civilian national-security operations.
Obama is right that we need to be better at civilian national-security operations.
Wednesday, May 20, 2009
Libertarian on nuclear disarmament
Proliferated Nonsense, by Ted Galen Carpenter
The National Interest (Online), May 20, 2009
It's been a really bad springtime for arms-control activists who want to see a nuclear-free world. First, when the UN Security Council criticized North Korea's test of a long-range ballistic missile in early April, Pyongyang used that response—toothless though it was—as a pretext to withdraw from the six-party talks on its nuclear program. Later that month, Iran announced a breakthrough in its uranium-enrichment efforts, boasting that it was now running seven thousand centrifuges. And just this week, credible media reports indicate that Pakistan is rapidly expanding its nuclear arsenal.
Yet while the trend is unmistakably in the direction of more, not fewer, nuclear powers, the arms-control community is devoting ever more time and resources to the goal of "global zero"—the abolition of nuclear weapons. That obsession is a fascinating and maddening detachment from reality.
It is not even clear that abolishing nuclear weapons would produce an unambiguously beneficial result. Perhaps it is only a coincidence, but the six and a half decades since the dawn of the atomic age constitute the first extended period since the emergence of the modern state system in the seventeenth century that no major wars have occurred between great powers. Many historians conclude that the principal reason the cold war did not turn hot was because both Moscow and Washington feared that a conventional conflict could easily spiral out of control into a nuclear conflagration. It is at least a worrisome possibility that the elimination of nuclear weapons could inadvertently make the world safe for new great-power wars. And given the destructive capacity of twenty-first-century conventional weapons, such wars would be even more horrific than the two bloodbaths in the twentieth.
But even if global zero did not produce such a perverse outcome, the goal is simply unattainable. It is improbable enough that the United States, Russia, Britain, France and China would be willing to relinquish their arsenals. It is a much bigger stretch to believe that such countries as Israel, India and Pakistan would do so. And it is bordering on fantasy to expect such wannabe nuclear powers as North Korea and Iran to abandon their aspirations.
All of those countries embarked on nuclear programs because of acute regional and extra-regional security concerns. Israel worries about the huge demographic edge enjoyed by its Islamic neighbors, and the prospect that the Jewish state's edge in conventional military capabilities will gradually erode. Pakistan worries about the growing economic and military power of its larger neighbor, India. New Delhi, for its part, not only distrusts Pakistan, but frets about China's geostrategic ambitions. All of those countries regard their nuclear arsenals as their ace in the hole, guaranteeing not only their regional status, but in some cases their very existence. They are highly unlikely to relinquish such a tangible insurance policy in exchange for paper security promises from the United Nations or any other source.
The incentives are at least as strong for Iran and North Korea to join the ranks of nuclear-weapons powers. As a Shiite country, Iran is surrounded by hostile Sunni neighbors—as well as its arch-nemesis, Israel. Tehran also has reason to fear the United States. Iranian leaders see how Washington has treated nonnuclear adversaries since the end of the cold war. If the U.S. mugging of Serbia didn't convey the message sufficiently, Iran had a ringside seat to the ouster of Saddam Hussein's regime. It was not a manifestation of paranoia for the Iranian leadership to conclude that the only way to prevent Iran becoming the next item on Washington's regime-change agenda was to develop a nuclear deterrent. North Korea appears to have reached a similar conclusion.
Of course, other factors—including national pride and prestige—have played relevant roles in the decision of various countries to become, or seek to become, nuclear powers. But the security concerns appeared to be paramount.
Unfortunately, the emergence of even one nuclear-weapons state in a region creates a greater likelihood that others will follow suit. India's nuclear program made it inevitable that Pakistan would go down the same path. Israel's arsenal likely figured in Tehran's calculations. If Iran continues its nuclear ambitions, it is highly probable that Saudi Arabia, Egypt and other countries in that region will decide on a similar course. North Korea's de facto nuclear status creates pressures on Japan, South Korea and Taiwan to abandon their own commitment to remain nonnuclear. The promise of the U.S. nuclear shield may restrain those ambitions for a time, but it requires considerable optimism to believe that it will do so over the long term.
Instead of pursuing the chimera of global zero, the arms control community needs to focus on attainable goals in a world in which proliferation is becoming an unpleasant reality. Getting the United States and Russia to drastically cut their bloated nuclear arsenals is one such goal. So, too, is an effort to induce India and Pakistan to adopt more explicitly defensive nuclear doctrines, and in the case of Pakistan, to improve the security of its arsenal. It may be possible—although it is more of a long shot—to persuade Iran to refrain from weaponizing its nuclear program, thereby reducing the incentive of its worried neighbors to build their own deterrents. An effort to reduce Pyongyang's temptation to become the global supermarket for the sale of nuclear technology has at least some prospect of success.
Even those more limited and practical goals will require patient, creative diplomacy by the United States and other countries. We are entering a more dangerous era, and there is no policy panacea.
The National Interest (Online), May 20, 2009
It's been a really bad springtime for arms-control activists who want to see a nuclear-free world. First, when the UN Security Council criticized North Korea's test of a long-range ballistic missile in early April, Pyongyang used that response—toothless though it was—as a pretext to withdraw from the six-party talks on its nuclear program. Later that month, Iran announced a breakthrough in its uranium-enrichment efforts, boasting that it was now running seven thousand centrifuges. And just this week, credible media reports indicate that Pakistan is rapidly expanding its nuclear arsenal.
Yet while the trend is unmistakably in the direction of more, not fewer, nuclear powers, the arms-control community is devoting ever more time and resources to the goal of "global zero"—the abolition of nuclear weapons. That obsession is a fascinating and maddening detachment from reality.
It is not even clear that abolishing nuclear weapons would produce an unambiguously beneficial result. Perhaps it is only a coincidence, but the six and a half decades since the dawn of the atomic age constitute the first extended period since the emergence of the modern state system in the seventeenth century that no major wars have occurred between great powers. Many historians conclude that the principal reason the cold war did not turn hot was because both Moscow and Washington feared that a conventional conflict could easily spiral out of control into a nuclear conflagration. It is at least a worrisome possibility that the elimination of nuclear weapons could inadvertently make the world safe for new great-power wars. And given the destructive capacity of twenty-first-century conventional weapons, such wars would be even more horrific than the two bloodbaths in the twentieth.
But even if global zero did not produce such a perverse outcome, the goal is simply unattainable. It is improbable enough that the United States, Russia, Britain, France and China would be willing to relinquish their arsenals. It is a much bigger stretch to believe that such countries as Israel, India and Pakistan would do so. And it is bordering on fantasy to expect such wannabe nuclear powers as North Korea and Iran to abandon their aspirations.
All of those countries embarked on nuclear programs because of acute regional and extra-regional security concerns. Israel worries about the huge demographic edge enjoyed by its Islamic neighbors, and the prospect that the Jewish state's edge in conventional military capabilities will gradually erode. Pakistan worries about the growing economic and military power of its larger neighbor, India. New Delhi, for its part, not only distrusts Pakistan, but frets about China's geostrategic ambitions. All of those countries regard their nuclear arsenals as their ace in the hole, guaranteeing not only their regional status, but in some cases their very existence. They are highly unlikely to relinquish such a tangible insurance policy in exchange for paper security promises from the United Nations or any other source.
The incentives are at least as strong for Iran and North Korea to join the ranks of nuclear-weapons powers. As a Shiite country, Iran is surrounded by hostile Sunni neighbors—as well as its arch-nemesis, Israel. Tehran also has reason to fear the United States. Iranian leaders see how Washington has treated nonnuclear adversaries since the end of the cold war. If the U.S. mugging of Serbia didn't convey the message sufficiently, Iran had a ringside seat to the ouster of Saddam Hussein's regime. It was not a manifestation of paranoia for the Iranian leadership to conclude that the only way to prevent Iran becoming the next item on Washington's regime-change agenda was to develop a nuclear deterrent. North Korea appears to have reached a similar conclusion.
Of course, other factors—including national pride and prestige—have played relevant roles in the decision of various countries to become, or seek to become, nuclear powers. But the security concerns appeared to be paramount.
Unfortunately, the emergence of even one nuclear-weapons state in a region creates a greater likelihood that others will follow suit. India's nuclear program made it inevitable that Pakistan would go down the same path. Israel's arsenal likely figured in Tehran's calculations. If Iran continues its nuclear ambitions, it is highly probable that Saudi Arabia, Egypt and other countries in that region will decide on a similar course. North Korea's de facto nuclear status creates pressures on Japan, South Korea and Taiwan to abandon their own commitment to remain nonnuclear. The promise of the U.S. nuclear shield may restrain those ambitions for a time, but it requires considerable optimism to believe that it will do so over the long term.
Instead of pursuing the chimera of global zero, the arms control community needs to focus on attainable goals in a world in which proliferation is becoming an unpleasant reality. Getting the United States and Russia to drastically cut their bloated nuclear arsenals is one such goal. So, too, is an effort to induce India and Pakistan to adopt more explicitly defensive nuclear doctrines, and in the case of Pakistan, to improve the security of its arsenal. It may be possible—although it is more of a long shot—to persuade Iran to refrain from weaponizing its nuclear program, thereby reducing the incentive of its worried neighbors to build their own deterrents. An effort to reduce Pyongyang's temptation to become the global supermarket for the sale of nuclear technology has at least some prospect of success.
Even those more limited and practical goals will require patient, creative diplomacy by the United States and other countries. We are entering a more dangerous era, and there is no policy panacea.
IRS disputes $US100b tax-haven loss estimate
IRS disputes $US100b tax-haven loss estimate
Bloomberg, May 20, 2009
Internal Revenue Service Commissioner Douglas Shulman said projections that the US loses $US100 billion annually to offshore tax havens are "wild estimates" that "don't have much basis".
Still, the tax commissioner said today, the problem is serious enough that the agency needs hundreds of new employees and new law-enforcement tools recommended by President Barack Obama.
"Those numbers are pretty broad numbers," Shulman said. The $US100 billion figure, a compilation of private-sector estimates, is often cited by Michigan Senator Carl Levin, a Democrat who led a congressional investigation into the role played by Swiss bank UBS and Liechtenstein's LGT Group in tax avoidance by Americans. North Dakota Senator Byron Dorgan also frequently cites the $US100 billion figure.
Shulman testified today before a House appropriations subcommittee on the IRS's $US12.1 billion budget request for the fiscal year that begins Oct. 1. The request, including funds to hire 800 new workers to focus on international tax issues, would be a 5.2 per cent increase over the agency's current budget.
Shulman said it was too difficult to accurately estimate how much of the $US290 billion in taxes that go uncollected each year can be attributed to international transactions by individuals and companies.
Bloomberg, May 20, 2009
Internal Revenue Service Commissioner Douglas Shulman said projections that the US loses $US100 billion annually to offshore tax havens are "wild estimates" that "don't have much basis".
Still, the tax commissioner said today, the problem is serious enough that the agency needs hundreds of new employees and new law-enforcement tools recommended by President Barack Obama.
"Those numbers are pretty broad numbers," Shulman said. The $US100 billion figure, a compilation of private-sector estimates, is often cited by Michigan Senator Carl Levin, a Democrat who led a congressional investigation into the role played by Swiss bank UBS and Liechtenstein's LGT Group in tax avoidance by Americans. North Dakota Senator Byron Dorgan also frequently cites the $US100 billion figure.
Shulman testified today before a House appropriations subcommittee on the IRS's $US12.1 billion budget request for the fiscal year that begins Oct. 1. The request, including funds to hire 800 new workers to focus on international tax issues, would be a 5.2 per cent increase over the agency's current budget.
Shulman said it was too difficult to accurately estimate how much of the $US290 billion in taxes that go uncollected each year can be attributed to international transactions by individuals and companies.
Golden rice an effective source of vitamin A
Golden rice an effective source of vitamin A
Eurekalert, May 13, 2009
HOUSTON – (May 13, 2009) – The beta-carotene in so-called "Golden Rice" converts to vitamin A in humans, according to researchers at Baylor College of Medicine (www.bcm.edu) and Tufts University in an article that appears in the current issue of the American Journal of Clinical Nutrition.
Golden Rice was developed in the early 1990s with a grant from the Rockefeller Foundation with the goal of creating rice that had beta-carotene -- a vitamin A precursor – in the rice grain. In its current form, Golden Rice contains 35 micrograms of beta-carotene per gram.
"We found that four units of beta-carotene from Golden Rice convert to one unit of vitamin A in humans," said Dr. Michael Grusak (http://www.bcm.edu/cnrc/faculty/?PMID=9536), associate professor of pediatrics at the USDA/ARS Children's Nutrition Research Center (http://www.bcm.edu/cnrc/?PMID=0) at BCM and Texas Children's Hospital.
They determined this by feeding five healthy adults a specific amount of specially-labeled Golden Rice and measured the amount of retinol, a form of vitamin A, in the blood.
Vitamin A deficiency is prevalent in many parts of the world where poorer community members rely on rice as their major food source. People who lack adequate amounts of this vitamin can have vision problems or even blindness as a result.
"By incorporating vitamin A into the major crop that is consumed, we would be able to make it accessible to the majority of people in the area," said Grusak.
Additional research is necessary before Golden Rice is made commercially available. The next steps of the research include incorporating this technology into the rice grains found in various regions and continuing testing the conversion rates in humans.
###
Others who participated in this study include Guangwen Tang, Jian Qin, Gregory G. Dolnikowski and Robert M Russell, all of the Jean Mayer US Department of Agriculture Human Nutrition Research Center on Aging at Tufts University.
Funding for this study came from the National Institute of Diabetes and Digestive and Kidney Diseases, a part of the National Institutes of Health.
The study can be found at http://www.ajcn.org/cgi/rapidpdf/ajcn.2008.27119v1.
For more information on basic science at Baylor College of Medicine, please go to www.bcm.edu/news or www.bcm.edu/fromthelab.
Eurekalert, May 13, 2009
HOUSTON – (May 13, 2009) – The beta-carotene in so-called "Golden Rice" converts to vitamin A in humans, according to researchers at Baylor College of Medicine (www.bcm.edu) and Tufts University in an article that appears in the current issue of the American Journal of Clinical Nutrition.
Golden Rice was developed in the early 1990s with a grant from the Rockefeller Foundation with the goal of creating rice that had beta-carotene -- a vitamin A precursor – in the rice grain. In its current form, Golden Rice contains 35 micrograms of beta-carotene per gram.
"We found that four units of beta-carotene from Golden Rice convert to one unit of vitamin A in humans," said Dr. Michael Grusak (http://www.bcm.edu/cnrc/faculty/?PMID=9536), associate professor of pediatrics at the USDA/ARS Children's Nutrition Research Center (http://www.bcm.edu/cnrc/?PMID=0) at BCM and Texas Children's Hospital.
They determined this by feeding five healthy adults a specific amount of specially-labeled Golden Rice and measured the amount of retinol, a form of vitamin A, in the blood.
Vitamin A deficiency is prevalent in many parts of the world where poorer community members rely on rice as their major food source. People who lack adequate amounts of this vitamin can have vision problems or even blindness as a result.
"By incorporating vitamin A into the major crop that is consumed, we would be able to make it accessible to the majority of people in the area," said Grusak.
Additional research is necessary before Golden Rice is made commercially available. The next steps of the research include incorporating this technology into the rice grains found in various regions and continuing testing the conversion rates in humans.
###
Others who participated in this study include Guangwen Tang, Jian Qin, Gregory G. Dolnikowski and Robert M Russell, all of the Jean Mayer US Department of Agriculture Human Nutrition Research Center on Aging at Tufts University.
Funding for this study came from the National Institute of Diabetes and Digestive and Kidney Diseases, a part of the National Institutes of Health.
The study can be found at http://www.ajcn.org/cgi/rapidpdf/ajcn.2008.27119v1.
For more information on basic science at Baylor College of Medicine, please go to www.bcm.edu/news or www.bcm.edu/fromthelab.
On Professor Goldsmith's New Republic article on President Obama approach to fighting terrorism
The Goldsmith Variations. By Scott Johnson
Powerline Blog, May 20, 2009 at 5:29 AM
Professor Jack Goldsmith's New Republic article gives President Obama high marks for his approach to fighting terrorism, in part because he appears to be continuing controversial policies established by President Bush. Paul Mirengoff commented on Goldsmith's article here. Professor Goldsmith is a preeminent authority with on-the-job professional experience in the issues he addresses in the article.
Several of the policies considered by Professor Goldsmith are policies for which Obama condemned the Bush administration (and for which he continues to condemn it). I deduce from Professor Goldsmith's account that the Democratic critique of Bush administration national security policies has been long on partisanship and short on principle. Professor Goldsmith, however, commends Obama with respect to his superior diplomacy in continuing these policies.
Professor Goldsmith does not indict Obama for his partisan treatment of the issues. According to Professor Goldsmith, Obama is merely finding governing harder than campaigning. That is certainly one way of putting it. Professor Goldsmith explains Obama's actions by reference to the fact "that many of the Bush policies reflect longstanding executive branch positions." One might think that this basic fact places Obama's "campaigning" in a poor light, along with his continuing criticism of the Bush administration policies he is following.
Goldsmith criticizes the expansive rhetoric of the Bush administration on executive power based on Justice Department opinions, presidential signing statements and Vice President Cheney's express desire to "leave the presidency stronger than we found it." He finds this rhetoric unprecedented. If this expansive rhetoric was the keystone of Bush administration policies, one might think that Professor Goldsmith could have quoted a full sentence from some speech given by President Bush in the course of his eight years in office.
Here Goldsmith compares Obama favorably to Lincoln and Roosevelt, by contrast with President Bush:
[The Obama administration] seems to have embraced, probably self-consciously, the tenets of democratic leadership that Roosevelt and Lincoln used to enhance presidential trust, and thus presidential effectiveness, during their wars. Like Roosevelt and to some degree Lincoln, President Obama has chosen a bipartisan national security team to help convey that his national security actions are in the public interest and not a partisan one. Also like our two greatest war presidents, President Obama seems committed to genuine consultation with Congress. If he gets Congress fully on board for his terrorism program, he will spread responsibility for the policies and help convince the public and the courts that the threat is real and the steps to counterterrorism necessary. President Obama has also promised a less secretive executive branch than President Bush. There is little evidence yet that his administration has done this, but if it does, it will reduce the mistakes that excessive secrecy brings and produce a more responsible and prudent government.
Finally, the Obama administration is following the Lincoln-Roosevelt approach to rhetoric and public symbols. The president talks frequently about the importance of adhering to constitutional values, he worries publicly about terrorism policies going too far, and he suggests that he is looking for ways to keep them in check. He has said not a word about presidential prerogative in national security or the importance of expanding his power. Closing GTMO--especially in the face of loud opposition--is an important symbol of the new president's commitment to the rule of law even if the detainees ultimately receive no greater rights. The small restrictions his administration has placed on itself as compared to the late Bush practices are public indications of restraint, especially when contrasted with the early Bush insistence on maximum presidential flexibility at all costs. They are yet more significant because the Obama administration is embracing them on its own initiative rather than, as was so often true of its predecessor, under apparent threat of judicial or congressional scrutiny.
Is this contrast between Bush on the one hand, and Lincoln and Roosevelt on the other hand, fair? Does Bush compare unfavorably to them with respect to sensitivity to civil liberties in wartime? (As for public rhetoric, no one, including Obama, can compare with Lincoln.)
The constitutional powers of the commander-in-chief in time of war are critical to the system established by the framers. Lincoln's analysis and exercise of the commander-in-chief's war powers during the Civil War both serve to illuminate those powers and to place Bush's actions in a relevant context.
Lincoln's primary aim as commander-in-chief was of course the preservation of the Union -- the restoration of democracy and the rule of law among the seceding states. He meant to demonstrate that "among free men, there can be no successful appeal from the ballot to the bullet; and that those who take such appeal are sure to lose their case, and pay the cost."
Indeed, as Professor Daniel Farber recalls in Lincoln's Constitution, Lincoln originally called up the militia in the name of the rule of law because "the laws of the United States have been for some time past, and now are opposed, and the execution thereof obstructed" by "combinations too powerful to be suppressed by the ordinary course of judicial proceedings."
In subduing the Confederacy, Lincoln took his bearings by his constitutional duty to "preserve, protect and defend the Constitution." Though this is the subject for another day, it should be noted that, given the Supreme Court's handiwork in the Dred Scott case, he was not an advocate of judicial supremacy. As president and commander-in-chief, he suspended habeas corpus, used martial law, instituted military trials, and exercised power to the limits of his constitutional authority in a manner that suggests the loose nature of those limits when confronted by necessity.
As Farber notes, "several Civil War actions taken under military authority impinged on freedom of speech." Perhaps best known is the case of former Ohio Congressman Clement Vallandingham. As commanding general of the Department of Ohio, Ambrose Burnside prohibited "the habit of declaring sympathies for the enemy." In the spring of 1863, Burnside had Vallandingham arrested for violating the order in a speech calling the war "wicked, cruel and unnecessary."
As Farber recounts, "he called upon his audience to [use the ballot box to] hurl 'King Lincoln' from his throne." The echoes of Vallandingham in the Democrats' recurrent gibes at President Bush are surely inadvertent. The Peace Democrats of 1863 nevertheless sound remarkably like the contemporary Democrats who have castigated President Bush.
In any event, the military commission found Vallandingham guilty of violating Burnside's General Order No. 38 and ordered him confined until the war ended. The ensuing controversy elicited Lincoln's famous letter to Erastus Corning defending the policy of military arrests in the name of public necessity. Lincoln ultimately resolved the controversy over Vallandingham's conviction and confinement by banishing him to Confederate territory (from which he escaped to Canada). Perhaps Lincoln's letter provides an example of the superior rhetorical dexterity that Professor Goldsmith attributes to Lincoln, but he also had more to justify than President Bush ever did.
From the case of Vallandingham, Farber moves on to consider the case of the New York World. The case of the World combines elements of the 2004 presidential campaign and the role played by another New York newspaper of our own day in a way that gives it a surprisingly contemporary feel. As Farber tells it:
Two journalists forged an Associated Press story about a bogus presidential call for drafting four hundred thousand men. (As a signal of desperation by the president, this "news" was supposed to drive up the price of gold, allowing the two men to make a quick profit.) The World fell for the stunt and published the story. Suspecting a Confederate plot, Lincoln ordered the arrest of the editors and publishers, as well as the seizure of the premises. This put the newspaper out of business until the order was countermanded.
So much for Lincoln. What about Franklin Roosevelt? Even before World War II, Franklin Roosevelt was concerned about domestic subversion. In Roosevelt's Secret War: FDR and World War II Espionage, Joseph Persico writes that "[f]ew leaders have been better suited by nature and temperament for the anomalies of secret warfare than FDR." He quotes Roosevelt: "You know that I am a juggler, and I never let my right hand know what my left hand does." As Persico demonstrates (pages 34-36), President Roosevelt's enthusiasm for intelligence extended to prewar domestic wiretapping of "diplomats, journalists, labor leaders and political activists" in the face of newly enacted statutory bans on wiretapping that had been upheld by the Supreme Court.
"I have agreed with the broad purpose of the Supreme Court relating to wiretapping in investigations," Roosevelt instructed J. Edgar Hoover. "However, I am persuaded that the Supreme Court never intended any dictum in the particular case which it decided to apply to grave matters involving the defense of the nation." Persico summarizes: "In short, never mind Congress, the Supreme Court, or the attorney general's qualms. The nation was in peril." (Persico's reference to Roosevelt's attorney general is of course to future Supreme Court Justice Robert H. Jackson.) Roosevelt's wiretapping program was not blessed by congressional consultation. Neither rhetoric nor public symbols were invoked to support it.
During the war, President Roosevelt did not seem particularly moved by constitutional limits or self-imposed restraint. To take just one example, consider the detention of Japanese American citizens that took place on his order. It took place under the authority of Executive Order 9066 without let or hindrance by the Supreme Court in Hirabayashi and Korematsu . Was this because of Roosevelt's brilliant public tact? I don't think so.
One might well ask whether President Bush ever took any action remotely comparable to these undertaken by Lincoln or Roosevelt at the margin of their authority. Again, I don't think so. Lincoln certainly did not escape the severe censure of his Democratic opponents. Indeed, the vituperation heaped on Bush during his eight years in office by Obama et al. might be roughly comparable to that heaped on Lincoln during his tenure in office. At least to me, Professor Goldsmith's analysis seems lacking in an element of fairness.
Professor Goldsmith's invocation of Franklin Roosevelt in this context is instructive, if not exactly as he intends. It is difficult to imagine Barack Obama wielding the powers of his office against America's foreign enemies with anything like the enthusiasm and ferocity of Roosevelt or, for that matter, Harry Truman, whom Obama seems more apt to apologize for than to emulate.
(On Lincoln, this post closely follows Farber's book at pages 170-173 and 176. For more, see Professor Michael Paulsen's brilliant review of Farber's book in the spring 2004 issue of the University of Chicago Law Review, Mark Neely's Pulitzer Prize-winning The Fate of Liberty, and William Rehnquist's All the Laws But One.)
Powerline Blog, May 20, 2009 at 5:29 AM
Professor Jack Goldsmith's New Republic article gives President Obama high marks for his approach to fighting terrorism, in part because he appears to be continuing controversial policies established by President Bush. Paul Mirengoff commented on Goldsmith's article here. Professor Goldsmith is a preeminent authority with on-the-job professional experience in the issues he addresses in the article.
Several of the policies considered by Professor Goldsmith are policies for which Obama condemned the Bush administration (and for which he continues to condemn it). I deduce from Professor Goldsmith's account that the Democratic critique of Bush administration national security policies has been long on partisanship and short on principle. Professor Goldsmith, however, commends Obama with respect to his superior diplomacy in continuing these policies.
Professor Goldsmith does not indict Obama for his partisan treatment of the issues. According to Professor Goldsmith, Obama is merely finding governing harder than campaigning. That is certainly one way of putting it. Professor Goldsmith explains Obama's actions by reference to the fact "that many of the Bush policies reflect longstanding executive branch positions." One might think that this basic fact places Obama's "campaigning" in a poor light, along with his continuing criticism of the Bush administration policies he is following.
Goldsmith criticizes the expansive rhetoric of the Bush administration on executive power based on Justice Department opinions, presidential signing statements and Vice President Cheney's express desire to "leave the presidency stronger than we found it." He finds this rhetoric unprecedented. If this expansive rhetoric was the keystone of Bush administration policies, one might think that Professor Goldsmith could have quoted a full sentence from some speech given by President Bush in the course of his eight years in office.
Here Goldsmith compares Obama favorably to Lincoln and Roosevelt, by contrast with President Bush:
[The Obama administration] seems to have embraced, probably self-consciously, the tenets of democratic leadership that Roosevelt and Lincoln used to enhance presidential trust, and thus presidential effectiveness, during their wars. Like Roosevelt and to some degree Lincoln, President Obama has chosen a bipartisan national security team to help convey that his national security actions are in the public interest and not a partisan one. Also like our two greatest war presidents, President Obama seems committed to genuine consultation with Congress. If he gets Congress fully on board for his terrorism program, he will spread responsibility for the policies and help convince the public and the courts that the threat is real and the steps to counterterrorism necessary. President Obama has also promised a less secretive executive branch than President Bush. There is little evidence yet that his administration has done this, but if it does, it will reduce the mistakes that excessive secrecy brings and produce a more responsible and prudent government.
Finally, the Obama administration is following the Lincoln-Roosevelt approach to rhetoric and public symbols. The president talks frequently about the importance of adhering to constitutional values, he worries publicly about terrorism policies going too far, and he suggests that he is looking for ways to keep them in check. He has said not a word about presidential prerogative in national security or the importance of expanding his power. Closing GTMO--especially in the face of loud opposition--is an important symbol of the new president's commitment to the rule of law even if the detainees ultimately receive no greater rights. The small restrictions his administration has placed on itself as compared to the late Bush practices are public indications of restraint, especially when contrasted with the early Bush insistence on maximum presidential flexibility at all costs. They are yet more significant because the Obama administration is embracing them on its own initiative rather than, as was so often true of its predecessor, under apparent threat of judicial or congressional scrutiny.
Is this contrast between Bush on the one hand, and Lincoln and Roosevelt on the other hand, fair? Does Bush compare unfavorably to them with respect to sensitivity to civil liberties in wartime? (As for public rhetoric, no one, including Obama, can compare with Lincoln.)
The constitutional powers of the commander-in-chief in time of war are critical to the system established by the framers. Lincoln's analysis and exercise of the commander-in-chief's war powers during the Civil War both serve to illuminate those powers and to place Bush's actions in a relevant context.
Lincoln's primary aim as commander-in-chief was of course the preservation of the Union -- the restoration of democracy and the rule of law among the seceding states. He meant to demonstrate that "among free men, there can be no successful appeal from the ballot to the bullet; and that those who take such appeal are sure to lose their case, and pay the cost."
Indeed, as Professor Daniel Farber recalls in Lincoln's Constitution, Lincoln originally called up the militia in the name of the rule of law because "the laws of the United States have been for some time past, and now are opposed, and the execution thereof obstructed" by "combinations too powerful to be suppressed by the ordinary course of judicial proceedings."
In subduing the Confederacy, Lincoln took his bearings by his constitutional duty to "preserve, protect and defend the Constitution." Though this is the subject for another day, it should be noted that, given the Supreme Court's handiwork in the Dred Scott case, he was not an advocate of judicial supremacy. As president and commander-in-chief, he suspended habeas corpus, used martial law, instituted military trials, and exercised power to the limits of his constitutional authority in a manner that suggests the loose nature of those limits when confronted by necessity.
As Farber notes, "several Civil War actions taken under military authority impinged on freedom of speech." Perhaps best known is the case of former Ohio Congressman Clement Vallandingham. As commanding general of the Department of Ohio, Ambrose Burnside prohibited "the habit of declaring sympathies for the enemy." In the spring of 1863, Burnside had Vallandingham arrested for violating the order in a speech calling the war "wicked, cruel and unnecessary."
As Farber recounts, "he called upon his audience to [use the ballot box to] hurl 'King Lincoln' from his throne." The echoes of Vallandingham in the Democrats' recurrent gibes at President Bush are surely inadvertent. The Peace Democrats of 1863 nevertheless sound remarkably like the contemporary Democrats who have castigated President Bush.
In any event, the military commission found Vallandingham guilty of violating Burnside's General Order No. 38 and ordered him confined until the war ended. The ensuing controversy elicited Lincoln's famous letter to Erastus Corning defending the policy of military arrests in the name of public necessity. Lincoln ultimately resolved the controversy over Vallandingham's conviction and confinement by banishing him to Confederate territory (from which he escaped to Canada). Perhaps Lincoln's letter provides an example of the superior rhetorical dexterity that Professor Goldsmith attributes to Lincoln, but he also had more to justify than President Bush ever did.
From the case of Vallandingham, Farber moves on to consider the case of the New York World. The case of the World combines elements of the 2004 presidential campaign and the role played by another New York newspaper of our own day in a way that gives it a surprisingly contemporary feel. As Farber tells it:
Two journalists forged an Associated Press story about a bogus presidential call for drafting four hundred thousand men. (As a signal of desperation by the president, this "news" was supposed to drive up the price of gold, allowing the two men to make a quick profit.) The World fell for the stunt and published the story. Suspecting a Confederate plot, Lincoln ordered the arrest of the editors and publishers, as well as the seizure of the premises. This put the newspaper out of business until the order was countermanded.
So much for Lincoln. What about Franklin Roosevelt? Even before World War II, Franklin Roosevelt was concerned about domestic subversion. In Roosevelt's Secret War: FDR and World War II Espionage, Joseph Persico writes that "[f]ew leaders have been better suited by nature and temperament for the anomalies of secret warfare than FDR." He quotes Roosevelt: "You know that I am a juggler, and I never let my right hand know what my left hand does." As Persico demonstrates (pages 34-36), President Roosevelt's enthusiasm for intelligence extended to prewar domestic wiretapping of "diplomats, journalists, labor leaders and political activists" in the face of newly enacted statutory bans on wiretapping that had been upheld by the Supreme Court.
"I have agreed with the broad purpose of the Supreme Court relating to wiretapping in investigations," Roosevelt instructed J. Edgar Hoover. "However, I am persuaded that the Supreme Court never intended any dictum in the particular case which it decided to apply to grave matters involving the defense of the nation." Persico summarizes: "In short, never mind Congress, the Supreme Court, or the attorney general's qualms. The nation was in peril." (Persico's reference to Roosevelt's attorney general is of course to future Supreme Court Justice Robert H. Jackson.) Roosevelt's wiretapping program was not blessed by congressional consultation. Neither rhetoric nor public symbols were invoked to support it.
During the war, President Roosevelt did not seem particularly moved by constitutional limits or self-imposed restraint. To take just one example, consider the detention of Japanese American citizens that took place on his order. It took place under the authority of Executive Order 9066 without let or hindrance by the Supreme Court in Hirabayashi and Korematsu . Was this because of Roosevelt's brilliant public tact? I don't think so.
One might well ask whether President Bush ever took any action remotely comparable to these undertaken by Lincoln or Roosevelt at the margin of their authority. Again, I don't think so. Lincoln certainly did not escape the severe censure of his Democratic opponents. Indeed, the vituperation heaped on Bush during his eight years in office by Obama et al. might be roughly comparable to that heaped on Lincoln during his tenure in office. At least to me, Professor Goldsmith's analysis seems lacking in an element of fairness.
Professor Goldsmith's invocation of Franklin Roosevelt in this context is instructive, if not exactly as he intends. It is difficult to imagine Barack Obama wielding the powers of his office against America's foreign enemies with anything like the enthusiasm and ferocity of Roosevelt or, for that matter, Harry Truman, whom Obama seems more apt to apologize for than to emulate.
(On Lincoln, this post closely follows Farber's book at pages 170-173 and 176. For more, see Professor Michael Paulsen's brilliant review of Farber's book in the spring 2004 issue of the University of Chicago Law Review, Mark Neely's Pulitzer Prize-winning The Fate of Liberty, and William Rehnquist's All the Laws But One.)
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