Death Blow. WSJ Editorial
Even 35% isn't enough for the envy club.
WSJ, Apr 09, 2009
We'll take pro-growth victories wherever we can find them these days, and last week saw a small one in the U.S. Senate, of all places. The Members voted 51-48 to cut permanently the death tax rate to 35% and exempt all estates of less than $10 million per couple ($5 million for a single taxpayer) from any tax. President Obama wants a 45% rate with only a $7 million exemption.
Every Republican voted for the lower rate, and so did 10 Democrats. This is the closest thing to bipartisanship we've seen so far this year on Capitol Hill, but naturally the White House and most of the media are appalled. Their idea of bipartisanship is when three Republicans cross party lines to pass $780 billion in "stimulus" spending.
Perhaps this explains why Majority Leader Harry Reid blew a gasket during the floor debate, calling the death-tax amendment by Jon Kyl (R., Ariz.) and Blanche Lincoln (D., Ark.) "outrageous," a "stunning act of hypocrisy," and a tax cut for those "at the very top of the food chain."
Then he actually said: "We can only turn the page from recession to recovery if we watch every single taxpayer dollar the way families watch every dollar in their budget." We'd say Mr. Reid was being deliberately ironic, but Harry doesn't do irony. He's an outrage man. And speaking of which, he was at that very moment working to pass a 2010 budget outline that includes record spending and trillions of dollars in new debt.
We've long argued that the fairest death tax rate is zero, because the money was already taxed when it was earned. Assets, such as stocks or property, in estates that have appreciated in value over time should be taxed at the capital gains rate of 15% in the year of the sale. These two changes would prevent the all-too-common and tragic firesale of businesses and farms when a family member dies. Senator Jim DeMint of South Carolina proposed an amendment to abolish the estate tax, but Mr. Reid blocked even a vote. Ah, the new bipartisanship.
He should listen to Senator Lincoln, who talked about the Arkansas companies and farmers whose assets are looted by the estate tax. "These are the people," she explained, "who employ more than half the workers in Arkansas. These are the people who, if we reform the estate tax, will invest in their businesses and create more jobs." Evidently, if they aren't government jobs, Mr. Reid isn't much interested. The battle now goes to a House-Senate conference, where liberals plan to strip the lower death tax rate. These days, the political class is so voracious that even taking 35% of a man's lifetime savings is insufficient.
Thursday, April 9, 2009
At the G-20 meeting in London, officials from many nations said that the US is to blame for the world recession
It Didn't Start Here. By Alan Reynolds
This article appeared in the New York Post on April 9, 2009.
At the recent meeting of G-20 nations in London, officials from many nations agreed on one thing -- that the United States is to blame for the world recession. President Obama agreed, speaking in Strasbourg of "the reckless speculation of bankers that has now fueled a global economic downturn."
One problem with this blame-game is that last year's recession was much deeper in many European and Asian countries than it was in the United States.
By the fourth quarter of 2008, as the nearby table shows, real US gross domestic product was just 0.8 percent smaller than it had been a year earlier. The contraction was twice as deep in Germany and Britain and much worse in Japan and Sweden.
In February, US industrial production was 11.8 percent lower than a year before -- while Singapore was down by 22.4 percent, Sweden by 22.9 percent and Japan by 38.4 percent.
What was the mechanism by which US problems were supposedly spread to other countries? It wasn't international trade. The dollar value of US imports didn't start to fall until August 2008, and imports of consumer goods didn't fall until September -- many months after Japan and Europe fell into recession.
Indeed, most of the economies that fell first and fastest were not heavily dependent on exports to the United States. Even Japan accounted for just 6.6 percent of US merchandise imports last year, compared with 15.9 percent for both Canada and China -- whose economies fared relatively well.
Even if all of the weakest European and Asian economies could plausibly blame all their troubles on the relatively stronger US economy, how could anyone possibly blame banks? There were no bank failures last year in Japan, Sweden, Canada or any other country on this list except Britain. And US and British banks didn't fail until September-October -- at least nine months after the Japanese and European recessions began.
Yet it's clearly US/UK banks being fingered as the villains. German Finance Minister Peer Steinbrueck, for example, criticized an "Anglo-Saxon" attitude in America and Britain that encouraged risky lending and investment practices because of "an exaggerated fixation on returns."
But Germany's GDP and industrial production was down 19.2 percent for the year ending in January -- versus an 11.4 percent decline in Britain and a similar US drop. Are we supposed to believe that German (and Japanese) firms are more dependent on US and UK banks than American and British firms?
Another problem with blaming the United States is that the timing is all wrong. If the US recession had simply spread to other countries like a mysterious infection, shouldn't the US economy have been the first to start contracting?
Yet US industrial production only started to decline from its peak after January 2008 -- long after production began to slow in Canada (July 2007), Italy (August 2007), France (October 2007) and the Euro area as a whole (November 2007). Aside from a one-month uptick in February 2008, Japan's industrial production peaked in October 2007.
By January 2008, when both the US and European recessions are said to have begun, the OECD leading indicators were lower by nearly 0.8 points from a year before in the US -- but down 2.3 points in Sweden, 2.8 points in Japan, 2.6 points in Korea and 4.1 points in Ireland.
Those leading indicators correctly anticipated much deeper recessions in the latter four countries. And the most famous leading indicator -- monthly stock prices -- peaked in October 2007 in the US and UK, four months after stocks had peaked in Japan and the Euro area.
What did all the contracting economies have in common? Not all had housing booms -- certainly not Canada, Japan, Sweden or the other countries at the bottom of the economic-growth list.
What really triggered this recession should be obvious, since the same thing happened before every other postwar US recession save one (1960).
In 1983, economist James Hamilton of the University of California at San Diego showed that "all but one of the US recessions since World War Two have been preceded, typically with a lag of around three-fourths of a year, by a dramatic increase in the price of crude petroleum." The years 1946 to 2007 saw 10 dramatic spikes in the price of oil -- each of which was soon followed by recession.
In The Financial Times on Jan. 3, 2008, I therefore suggested, "The US economy is likely to slip into recession because of higher energy costs alone, regardless of what the Fed does."
In a new paper at cato.org, "Financial Crisis and Public Policy," Jagadeesh Gokhale notes that the prolonged decline in exurban housing construction that began in early 2006 was a logical response to rising prices of oil and gasoline at that time. So was the equally prolonged decline in sales of gas-guzzling vehicles. And the US/UK financial crises in the fall of 2008 were likewise as much a consequence of recession as the cause: Recessions turn good loans into bad.
The recession began in late 2007 or early 2008 in many countries, with the United States one of the least affected. Countries with the deepest recessions have no believable connection to US housing or banking problems.
The truth is much simpler: There is no way the oil-importing economies could have kept humming along with oil prices of $100 a barrel, much less $145. Like nearly every other recession of the postwar period, this one was triggered by a literally unbearable increase in the price of oil.
This article appeared in the New York Post on April 9, 2009.
At the recent meeting of G-20 nations in London, officials from many nations agreed on one thing -- that the United States is to blame for the world recession. President Obama agreed, speaking in Strasbourg of "the reckless speculation of bankers that has now fueled a global economic downturn."
One problem with this blame-game is that last year's recession was much deeper in many European and Asian countries than it was in the United States.
By the fourth quarter of 2008, as the nearby table shows, real US gross domestic product was just 0.8 percent smaller than it had been a year earlier. The contraction was twice as deep in Germany and Britain and much worse in Japan and Sweden.
In February, US industrial production was 11.8 percent lower than a year before -- while Singapore was down by 22.4 percent, Sweden by 22.9 percent and Japan by 38.4 percent.
What was the mechanism by which US problems were supposedly spread to other countries? It wasn't international trade. The dollar value of US imports didn't start to fall until August 2008, and imports of consumer goods didn't fall until September -- many months after Japan and Europe fell into recession.
Indeed, most of the economies that fell first and fastest were not heavily dependent on exports to the United States. Even Japan accounted for just 6.6 percent of US merchandise imports last year, compared with 15.9 percent for both Canada and China -- whose economies fared relatively well.
Even if all of the weakest European and Asian economies could plausibly blame all their troubles on the relatively stronger US economy, how could anyone possibly blame banks? There were no bank failures last year in Japan, Sweden, Canada or any other country on this list except Britain. And US and British banks didn't fail until September-October -- at least nine months after the Japanese and European recessions began.
Yet it's clearly US/UK banks being fingered as the villains. German Finance Minister Peer Steinbrueck, for example, criticized an "Anglo-Saxon" attitude in America and Britain that encouraged risky lending and investment practices because of "an exaggerated fixation on returns."
But Germany's GDP and industrial production was down 19.2 percent for the year ending in January -- versus an 11.4 percent decline in Britain and a similar US drop. Are we supposed to believe that German (and Japanese) firms are more dependent on US and UK banks than American and British firms?
Another problem with blaming the United States is that the timing is all wrong. If the US recession had simply spread to other countries like a mysterious infection, shouldn't the US economy have been the first to start contracting?
Yet US industrial production only started to decline from its peak after January 2008 -- long after production began to slow in Canada (July 2007), Italy (August 2007), France (October 2007) and the Euro area as a whole (November 2007). Aside from a one-month uptick in February 2008, Japan's industrial production peaked in October 2007.
By January 2008, when both the US and European recessions are said to have begun, the OECD leading indicators were lower by nearly 0.8 points from a year before in the US -- but down 2.3 points in Sweden, 2.8 points in Japan, 2.6 points in Korea and 4.1 points in Ireland.
Those leading indicators correctly anticipated much deeper recessions in the latter four countries. And the most famous leading indicator -- monthly stock prices -- peaked in October 2007 in the US and UK, four months after stocks had peaked in Japan and the Euro area.
What did all the contracting economies have in common? Not all had housing booms -- certainly not Canada, Japan, Sweden or the other countries at the bottom of the economic-growth list.
What really triggered this recession should be obvious, since the same thing happened before every other postwar US recession save one (1960).
In 1983, economist James Hamilton of the University of California at San Diego showed that "all but one of the US recessions since World War Two have been preceded, typically with a lag of around three-fourths of a year, by a dramatic increase in the price of crude petroleum." The years 1946 to 2007 saw 10 dramatic spikes in the price of oil -- each of which was soon followed by recession.
In The Financial Times on Jan. 3, 2008, I therefore suggested, "The US economy is likely to slip into recession because of higher energy costs alone, regardless of what the Fed does."
In a new paper at cato.org, "Financial Crisis and Public Policy," Jagadeesh Gokhale notes that the prolonged decline in exurban housing construction that began in early 2006 was a logical response to rising prices of oil and gasoline at that time. So was the equally prolonged decline in sales of gas-guzzling vehicles. And the US/UK financial crises in the fall of 2008 were likewise as much a consequence of recession as the cause: Recessions turn good loans into bad.
The recession began in late 2007 or early 2008 in many countries, with the United States one of the least affected. Countries with the deepest recessions have no believable connection to US housing or banking problems.
The truth is much simpler: There is no way the oil-importing economies could have kept humming along with oil prices of $100 a barrel, much less $145. Like nearly every other recession of the postwar period, this one was triggered by a literally unbearable increase in the price of oil.
US Diplomats Discuss Humanitarian Situation in Sri Lanka with Tamil Diaspora Groups
Assistant Secretary Boucher and Ambassador Blake Discuss Humanitarian Situation in Sri Lanka with Tamil Diaspora Groups
US State Dept, Bureau of Public Affairs, Office of the Spokesman
Washington, DC, April 8, 2009
Assistant Secretary of State for South and Central Asian Affairs Richard Boucher and U.S. Ambassador to Sri Lanka Robert Blake met with several U.S.-based organizations representing members of the Tamil diaspora to discuss the humanitarian situation in Sri Lanka.
Assistant Secretary Boucher and Ambassador Blake welcomed the opportunity to listen to the concerns and perspectives of the American Tamil diaspora community and to share the steps the United States is taking to address the humanitarian crisis. Assistant Secretary Boucher and Ambassador Blake emphasized U.S. concern about the plight of the civilians trapped in the “no fire zone” in northern Sri Lanka. They called on the Liberation Tigers of Tamil Eelam to release the civilians. They reiterated that both the Tamil Tigers and the Government of Sri Lanka should stop firing into and from the no fire zone. They outlined the steps the U.S. has taken to support the civilians in the no fire zone.
The United States has provided $23.6 million towards International Committee of the Red Cross (ICRC) regional activities, which includes ICRC activities in Sri Lanka, and $8.3 million to UNHCR for its South Asia appeal and its portion of the Common Humanitarian Action Plan (CHAP) for Sri Lanka. In 2008, the United States also provided $5.9 million in non-food support to the UN and international NGOs operating in Sri Lanka.
Assistant Secretary Boucher and Ambassador Blake emphasized the urgent need for the Government of Sri Lanka to engage Tamils, including diaspora communities around the world, to find a political end of the conflict. Assistant Secretary Boucher and Ambassador Blake concluded by saying that they would like to continue the dialogue with the diaspora community and urged participants to continue to share feedback.
The discussion took place at the State Department with Ambassador Blake speaking through via a digital video conference at the U.S. Embassy in Colombo.
US State Dept, Bureau of Public Affairs, Office of the Spokesman
Washington, DC, April 8, 2009
Assistant Secretary of State for South and Central Asian Affairs Richard Boucher and U.S. Ambassador to Sri Lanka Robert Blake met with several U.S.-based organizations representing members of the Tamil diaspora to discuss the humanitarian situation in Sri Lanka.
Assistant Secretary Boucher and Ambassador Blake welcomed the opportunity to listen to the concerns and perspectives of the American Tamil diaspora community and to share the steps the United States is taking to address the humanitarian crisis. Assistant Secretary Boucher and Ambassador Blake emphasized U.S. concern about the plight of the civilians trapped in the “no fire zone” in northern Sri Lanka. They called on the Liberation Tigers of Tamil Eelam to release the civilians. They reiterated that both the Tamil Tigers and the Government of Sri Lanka should stop firing into and from the no fire zone. They outlined the steps the U.S. has taken to support the civilians in the no fire zone.
The United States has provided $23.6 million towards International Committee of the Red Cross (ICRC) regional activities, which includes ICRC activities in Sri Lanka, and $8.3 million to UNHCR for its South Asia appeal and its portion of the Common Humanitarian Action Plan (CHAP) for Sri Lanka. In 2008, the United States also provided $5.9 million in non-food support to the UN and international NGOs operating in Sri Lanka.
Assistant Secretary Boucher and Ambassador Blake emphasized the urgent need for the Government of Sri Lanka to engage Tamils, including diaspora communities around the world, to find a political end of the conflict. Assistant Secretary Boucher and Ambassador Blake concluded by saying that they would like to continue the dialogue with the diaspora community and urged participants to continue to share feedback.
The discussion took place at the State Department with Ambassador Blake speaking through via a digital video conference at the U.S. Embassy in Colombo.
Obama in Ankara: Turkey's Dangerous Drift
Obama in Ankara: Turkey's Dangerous Drift. By Ariel Cohen, Ph.D. and Owen Graham
Heritage WebMemo #2383
April 6, 2009
[Full article w/notes at the link above]
After attending the three summits--G-20, NATO, and the EU--President Obama arrived in Ankara, Turkey, Sunday for the final stop on his inaugural European tour. Obama's visit to Turkey highlights the importance Washington attaches to this country as a key regional player, a veteran NATO ally, and an influential state with a predominately Muslim population.
During the NATO summit on Saturday, the alliance unanimously chose Anders Fogh Rasmussen, Denmark's prime minister, as the next secretary general. Turkey was initially against the nomination, however, alleging that Rasmussen was insensitive to Muslims during the scandal over the Prophet Muhammad cartoons and due to his pessimistic views about Turkey's EU membership.[1] Turkey claimed to speak on behalf of the Muslim world, raising the larger question of Turkey's direction and its trajectory toward the West in general and NATO in particular.
Deterioration of U.S.-Turkish Ties
Until the Justice and Development Party's (AKP) rise to power in 2002, Turkey was considered a reliable U.S. partner. During the Cold War, Turkey's modernizing secular elites championed unpopular causes: the Korean War, support of U.S. operations during the 1991 Gulf War, and Operation Northern Watch in Iraqi Kurdistan (1991-2003).
Turkey also played a vital role in peacekeeping missions in Bosnia, Kosovo, Somalia, and Afghanistan. Likewise, the U.S. supported Turkey against the Kurdish terrorist organization PKK and the 1999 capture of its leader, Abdullah Ocalan. These relations contributed to major mutually beneficial projects, such as the Baku-Tbilisi-Ceyhan main oil export pipeline.
Today, the AKP appears to be moving Turkey away from its pro-Western and pro-American orientation to a more Islamist one. This drift has left many in Washington uncertain over the country's direction. The growing anti-Americanism within Turkey poses a major challenge to bilateral relations.
In 2007, for instance, according to public opinion polls, only 9 percent of the population held favorable views of the United States. The Turkish public was overwhelmingly against the Iraq war and also protested perceived U.S. inaction on Kurdish PKK terrorist attacks launched from northern Iraq. Anti-Semitism and vitriolic anti-Israel sentiment is also rising--often fanned by the AKP-controlled media and politicians--and threatening to destroy a close security relationship between the two countries.
Growing Illiberalism
Turkey's secular elites are increasingly concerned by the country's direction. They argue that the AKP is promoting a creeping Islamic agenda--one that is closer to Muslim Brotherhood fundamentalism than to the traditional Ottoman tolerant religious outlook.
In July 2008, the Constitutional Court, in a split decision, rejected an attempt by Turkey's chief prosecutor to ban the AKP. The prosecution accused the AKP of violating separation of mosque and state in public life, with the intention of leading secular Turkey down a path toward Shari'a law.[2]
While the AKP has enjoyed popular support since it came to power, for the first time since 2002, it lost support, dropping from 47 percent to 39 percent in the March 29 local elections. While the global economic crisis is in part responsible for this decrease in support, the outcome of these elections is also explained by discontent with AKP policies and recognition that the party has strayed from its promises of a more liberal Turkey in the European Union.[3] Prominent supporters of democracy are concerned that the right of dissent and the principle of government accountability are being eroded: The AKP is viewed as increasingly intolerant of opposing views.[4]
Turkey's Foreign Policy Drift
Regarding foreign policy, there are important signs that Turkey is drifting away from the West. In 2006, Turkey became the first NATO member to host the leader of Hamas, Khaled Mashaal. Turkey also enthusiastically hosted Iranian president Mahmoud Ahmadinejad and Sudanese President Omar al-Bashir, whose government has been accused of genocide. Turkey's geography explains its association with Iran but not with Hamas or Sudan; only Islamist solidarity and anti-Western sentiment can explain these ties.
Although Turkey has been trying to facilitate an Arab-Israeli rapprochement, it is losing its impartiality and, therefore, credibility. It is attempting to sponsor an Israeli-Palestinian industrial border zone and an Israeli-Palestinian hospital. It also sponsored an Israeli-Syrian proximity talks in Istanbul.
However, at the recent Davos World Economic Forum, Turkish Prime Minister Recep Tayyip Erdogan called Israel's operation in Gaza "inhumane." The prime minister has verbally attacked the elderly, Nobel-prize-winning, dovish Israeli President Shimon Peres as a killer of children, thus positioning himself as a Hamas protector. He then stormed out of the Davos panel, only to receive a hero's welcome at home.
Turkey supports the development of a peaceful nuclear power program by Iran but wants transparency and dialog on the subject. However, Erdogan's judgment has been called into question after he stated last year that "those who ask Iran not to produce nuclear weapons should themselves give up their nuclear weapons first."[5]
The Bear Hug
There have also been worrisome developments in Turkey's Black Sea and Caucasus policies. During the Russian-Georgia war, the Turkish prime minister proposed the "Caucasus Stability and Cooperation Platform." The platform proposed a condominium of Russia and Turkey, together with the three South Caucasus countries, but it initially omitted the U.S. and EU, as well as Iran.[6] Moreover, the United States and the European Union were not consulted on these proposals beforehand.
Turkey also temporarily blocked the transit of U.S. warships delivering humanitarian aid to Georgia. And it prioritized rapprochement with the Russian ally Armenia over the ties with the secular, pro-Western Azerbaijan. These developments underscore Turkey's cozying up to Russia as Moscow is providing nearly two-thirds of its gas supplies. Indeed, Russia may have used multi-billion-dollar construction and gas supply contracts as leverage over Ankara.
Turkey is critical to Europe's efforts to reduce its dependence on Russian energy, including the proposed Nabucco gas pipeline that would bring Central Asian gas to Europe via Turkey, bypassing Russia. However, Turkey demanded to fill Nabucco with Iranian gas while it is currently stalling on signing an intergovernmental agreement on Nabucco. Thus, Turkey is throwing the "bypass Russia" gas transit strategy in limbo.[7]
If Turkey's terms do not improve soon, Azerbaijan may be forced to embrace Gazprom.[8] If that occurs, Ankara's actions will threaten to derail a decade of Western progress on East-West energy and transportation.
Afghanistan and Iraq
According to Prime Minister Erdogan, Turkey is open to discussing the withdrawal of U.S. forces from Iraq through Turkey.[9] Considering that Turkey refused to allow U.S. troops to enter Iraq from its territory, this is a questionable statement. Yet Turkey is a major logistical hub of efforts in Afghanistan. The planned withdrawal of troops from Iraq raises the importance of the Incirlik base.
Beyond this, Turkey has played a positive role in Afghanistan. Finally, President Obama is well aware that his statements on the Armenian genocide issue are being watched carefully. He avoided alienating a key ally not by using the "G" word (genocide) in his speeches. However, it is not clear whether the White House can prevent a congressional resolution on genocide from passing, primarily with Democratic votes, for domestic political reasons.
What Should the U.S. Do?
Despite Turkey's movement away from the West, the country continues to play a key role in NATO. Strong bilateral security relations are particularly important for cooperation on the Iraq withdrawal, Afghanistan, dealing with Iran, and addressing a resurgent Russia.
Washington should devote more attention to U.S.-Turkish relations. The Administration should stress that it is in Turkey's long-term interests to remain politically oriented toward the West. However, the timing of Secretary of State Hillary Clinton's and President Obama's visits have provided political support to the ruling anti-American political party at the time of crucial elections and increased criticism on behalf of pro-American secularists, who feel abandoned.
The United States should expand energy cooperation with Turkey. Yet it should also warn that excessive dependence on either Russian or Iranian gas will jeopardize Turkey's sovereignty and security. While U.S. support of the Turkish-Armenian normalization is justified, so is American reinforcement of the Turkish-Azeri ties.
When speaking before the Turkish Parliament, President Obama voiced support for Turkey's membership in the European Union, saying that it would "broaden and strengthen" Europe's foundation.[10]
Instead of sending mixed messages, the Obama Administration should specify clear terms under which Turkish cooperation with the U.S. is welcome. After all, it is up to the Turkish elites to decide whether they want to continue on the path of development with the trusted and powerful ally or seek new friends in Iran, Sudan, and Saudi Arabia.
Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, and Owen Graham is a Research Assistant at the Katherine and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.
Heritage WebMemo #2383
April 6, 2009
[Full article w/notes at the link above]
After attending the three summits--G-20, NATO, and the EU--President Obama arrived in Ankara, Turkey, Sunday for the final stop on his inaugural European tour. Obama's visit to Turkey highlights the importance Washington attaches to this country as a key regional player, a veteran NATO ally, and an influential state with a predominately Muslim population.
During the NATO summit on Saturday, the alliance unanimously chose Anders Fogh Rasmussen, Denmark's prime minister, as the next secretary general. Turkey was initially against the nomination, however, alleging that Rasmussen was insensitive to Muslims during the scandal over the Prophet Muhammad cartoons and due to his pessimistic views about Turkey's EU membership.[1] Turkey claimed to speak on behalf of the Muslim world, raising the larger question of Turkey's direction and its trajectory toward the West in general and NATO in particular.
Deterioration of U.S.-Turkish Ties
Until the Justice and Development Party's (AKP) rise to power in 2002, Turkey was considered a reliable U.S. partner. During the Cold War, Turkey's modernizing secular elites championed unpopular causes: the Korean War, support of U.S. operations during the 1991 Gulf War, and Operation Northern Watch in Iraqi Kurdistan (1991-2003).
Turkey also played a vital role in peacekeeping missions in Bosnia, Kosovo, Somalia, and Afghanistan. Likewise, the U.S. supported Turkey against the Kurdish terrorist organization PKK and the 1999 capture of its leader, Abdullah Ocalan. These relations contributed to major mutually beneficial projects, such as the Baku-Tbilisi-Ceyhan main oil export pipeline.
Today, the AKP appears to be moving Turkey away from its pro-Western and pro-American orientation to a more Islamist one. This drift has left many in Washington uncertain over the country's direction. The growing anti-Americanism within Turkey poses a major challenge to bilateral relations.
In 2007, for instance, according to public opinion polls, only 9 percent of the population held favorable views of the United States. The Turkish public was overwhelmingly against the Iraq war and also protested perceived U.S. inaction on Kurdish PKK terrorist attacks launched from northern Iraq. Anti-Semitism and vitriolic anti-Israel sentiment is also rising--often fanned by the AKP-controlled media and politicians--and threatening to destroy a close security relationship between the two countries.
Growing Illiberalism
Turkey's secular elites are increasingly concerned by the country's direction. They argue that the AKP is promoting a creeping Islamic agenda--one that is closer to Muslim Brotherhood fundamentalism than to the traditional Ottoman tolerant religious outlook.
In July 2008, the Constitutional Court, in a split decision, rejected an attempt by Turkey's chief prosecutor to ban the AKP. The prosecution accused the AKP of violating separation of mosque and state in public life, with the intention of leading secular Turkey down a path toward Shari'a law.[2]
While the AKP has enjoyed popular support since it came to power, for the first time since 2002, it lost support, dropping from 47 percent to 39 percent in the March 29 local elections. While the global economic crisis is in part responsible for this decrease in support, the outcome of these elections is also explained by discontent with AKP policies and recognition that the party has strayed from its promises of a more liberal Turkey in the European Union.[3] Prominent supporters of democracy are concerned that the right of dissent and the principle of government accountability are being eroded: The AKP is viewed as increasingly intolerant of opposing views.[4]
Turkey's Foreign Policy Drift
Regarding foreign policy, there are important signs that Turkey is drifting away from the West. In 2006, Turkey became the first NATO member to host the leader of Hamas, Khaled Mashaal. Turkey also enthusiastically hosted Iranian president Mahmoud Ahmadinejad and Sudanese President Omar al-Bashir, whose government has been accused of genocide. Turkey's geography explains its association with Iran but not with Hamas or Sudan; only Islamist solidarity and anti-Western sentiment can explain these ties.
Although Turkey has been trying to facilitate an Arab-Israeli rapprochement, it is losing its impartiality and, therefore, credibility. It is attempting to sponsor an Israeli-Palestinian industrial border zone and an Israeli-Palestinian hospital. It also sponsored an Israeli-Syrian proximity talks in Istanbul.
However, at the recent Davos World Economic Forum, Turkish Prime Minister Recep Tayyip Erdogan called Israel's operation in Gaza "inhumane." The prime minister has verbally attacked the elderly, Nobel-prize-winning, dovish Israeli President Shimon Peres as a killer of children, thus positioning himself as a Hamas protector. He then stormed out of the Davos panel, only to receive a hero's welcome at home.
Turkey supports the development of a peaceful nuclear power program by Iran but wants transparency and dialog on the subject. However, Erdogan's judgment has been called into question after he stated last year that "those who ask Iran not to produce nuclear weapons should themselves give up their nuclear weapons first."[5]
The Bear Hug
There have also been worrisome developments in Turkey's Black Sea and Caucasus policies. During the Russian-Georgia war, the Turkish prime minister proposed the "Caucasus Stability and Cooperation Platform." The platform proposed a condominium of Russia and Turkey, together with the three South Caucasus countries, but it initially omitted the U.S. and EU, as well as Iran.[6] Moreover, the United States and the European Union were not consulted on these proposals beforehand.
Turkey also temporarily blocked the transit of U.S. warships delivering humanitarian aid to Georgia. And it prioritized rapprochement with the Russian ally Armenia over the ties with the secular, pro-Western Azerbaijan. These developments underscore Turkey's cozying up to Russia as Moscow is providing nearly two-thirds of its gas supplies. Indeed, Russia may have used multi-billion-dollar construction and gas supply contracts as leverage over Ankara.
Turkey is critical to Europe's efforts to reduce its dependence on Russian energy, including the proposed Nabucco gas pipeline that would bring Central Asian gas to Europe via Turkey, bypassing Russia. However, Turkey demanded to fill Nabucco with Iranian gas while it is currently stalling on signing an intergovernmental agreement on Nabucco. Thus, Turkey is throwing the "bypass Russia" gas transit strategy in limbo.[7]
If Turkey's terms do not improve soon, Azerbaijan may be forced to embrace Gazprom.[8] If that occurs, Ankara's actions will threaten to derail a decade of Western progress on East-West energy and transportation.
Afghanistan and Iraq
According to Prime Minister Erdogan, Turkey is open to discussing the withdrawal of U.S. forces from Iraq through Turkey.[9] Considering that Turkey refused to allow U.S. troops to enter Iraq from its territory, this is a questionable statement. Yet Turkey is a major logistical hub of efforts in Afghanistan. The planned withdrawal of troops from Iraq raises the importance of the Incirlik base.
Beyond this, Turkey has played a positive role in Afghanistan. Finally, President Obama is well aware that his statements on the Armenian genocide issue are being watched carefully. He avoided alienating a key ally not by using the "G" word (genocide) in his speeches. However, it is not clear whether the White House can prevent a congressional resolution on genocide from passing, primarily with Democratic votes, for domestic political reasons.
What Should the U.S. Do?
Despite Turkey's movement away from the West, the country continues to play a key role in NATO. Strong bilateral security relations are particularly important for cooperation on the Iraq withdrawal, Afghanistan, dealing with Iran, and addressing a resurgent Russia.
Washington should devote more attention to U.S.-Turkish relations. The Administration should stress that it is in Turkey's long-term interests to remain politically oriented toward the West. However, the timing of Secretary of State Hillary Clinton's and President Obama's visits have provided political support to the ruling anti-American political party at the time of crucial elections and increased criticism on behalf of pro-American secularists, who feel abandoned.
The United States should expand energy cooperation with Turkey. Yet it should also warn that excessive dependence on either Russian or Iranian gas will jeopardize Turkey's sovereignty and security. While U.S. support of the Turkish-Armenian normalization is justified, so is American reinforcement of the Turkish-Azeri ties.
When speaking before the Turkish Parliament, President Obama voiced support for Turkey's membership in the European Union, saying that it would "broaden and strengthen" Europe's foundation.[10]
Instead of sending mixed messages, the Obama Administration should specify clear terms under which Turkish cooperation with the U.S. is welcome. After all, it is up to the Turkish elites to decide whether they want to continue on the path of development with the trusted and powerful ally or seek new friends in Iran, Sudan, and Saudi Arabia.
Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, and Owen Graham is a Research Assistant at the Katherine and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.
Wednesday, April 8, 2009
CEI Comment on EPA’s Reconsideration of California’s Request for a Waiver to Establish Emission Standards for new Motor Vehicles
CEI Comment on EPA’s Reconsideration of California’s Request for a Waiver to Establish Emission Standards for new Motor Vehicles, by Marlo Lewis, Jr.
CEI, April 6, 2009
EPA should stick to its guns and deny California’s request for a waiver of federal preemption of State motor vehicle emission standards. Granting the waiver would allow the California Air Resources Board (CARB) to impose potentially lethal burdens on an industry in crisis. California has no “extraordinary conditions” with respect either to atmospheric greenhouse gas concentrations or the potential impacts thereof, and consequently does not “need” a waiver. The CARB program massively and directly regulates fuel economy, and thus violates the Energy Policy and Conservation Act (EPCA), which prohibits State law and regulation “related to” fuel economy. Granting the waiver would allow CARB and other “California” States to nullify the fuel economy reforms Congress adopted through EISA, violating the Supremacy Clause. Finally, granting the waiver would create a State-by-State patchwork of vehicle rationing programs, an economically-ruinous policy clearly at odds with congressional intent.
Docket ID No. EPA-HQ-OAR-2006-0173
California State Motor Vehicle Pollution Control Standards; Greenhouse Gas Regulations; Reconsideration of Previous Denial of a Waiver of Preemption
Full report: Marlo Lewis - CEI - Comment on California Waiver Request - 2009-04-06.pdf
CEI, April 6, 2009
EPA should stick to its guns and deny California’s request for a waiver of federal preemption of State motor vehicle emission standards. Granting the waiver would allow the California Air Resources Board (CARB) to impose potentially lethal burdens on an industry in crisis. California has no “extraordinary conditions” with respect either to atmospheric greenhouse gas concentrations or the potential impacts thereof, and consequently does not “need” a waiver. The CARB program massively and directly regulates fuel economy, and thus violates the Energy Policy and Conservation Act (EPCA), which prohibits State law and regulation “related to” fuel economy. Granting the waiver would allow CARB and other “California” States to nullify the fuel economy reforms Congress adopted through EISA, violating the Supremacy Clause. Finally, granting the waiver would create a State-by-State patchwork of vehicle rationing programs, an economically-ruinous policy clearly at odds with congressional intent.
Docket ID No. EPA-HQ-OAR-2006-0173
California State Motor Vehicle Pollution Control Standards; Greenhouse Gas Regulations; Reconsideration of Previous Denial of a Waiver of Preemption
Full report: Marlo Lewis - CEI - Comment on California Waiver Request - 2009-04-06.pdf
Rise of the Luddites
Rise of the Luddites, by Fred Smith
Open Market/CEI, April 07, 2009 @ 3:57 pm
When it comes to things such as environmental policy, the Progressives have been rather successful at promoting their world view. They realized that it would be futile to argue that property rights and human ingenuity could not solve anything - so they did not try (immediately) to socialize oil or other sub-surface minerals but they did succeed in derailing the evolutionary process by which institutions emerged to resolve emerging problems. The economist Ronald Coase noted this in an essay pointing out that the EMS (Emergency Medical Services) was well on its way to being homesteaded with rules for allowing multiple uses - and then the Feds created the Federal Communication Commission and the spectrum is still terribly managed to this day.
The environment is valuable and valued by many. The difficulty is that we have relegated its “protection” and “management” to bureaucrats - and suppressed the evolution of property rights in environmental resources (wildlife, groundwater, fisheries). These resources remain as common property resources - and we experience repeatedly the Tragedy of the Commons. However, the most distressing aspect of the debate over environmental policy, is that the view gaining prevalence from the Progressive side is decidedly anti-human, and anti-technology at its core.
There are many features of the growing anti-human-relevant-science campaign.
* One is the selection of the fearful – the Malthusian wing of this movement that sees “technology” as change, as a move into an untested future and, thus, to be slowed if not banned. These people champion the Precautionary Principle – a totally Luddite rule. Has there ever been a market innovation (one that we hoped people would buy) that created more harm than good?
* The Economic Rational wing, which has championed “comparative effectiveness” and so on. After all, they argue, it would be foolish and wasteful to approve a new drug or device that was not “cost effective for the median individual.” A wonderful capture of the rational language but, of course, that approach argues that we can know in advance that a specific innovation will or will not prove beneficial (the French minitel system comes to mind). Most – all – innovations appear first as clunky, expensive toys or (for a very few) necessities. The purchasers are the ‘Early Adopters’ – often rich or eager to “be the first on their block.” However, the freedom to create an infant market for a product that would be too expensive and too inefficient for most people made it possible for the thousand dollar 1940s television sets with tiny blurry pictures and very low quality to become the few hundred 34-inch flat screen marvels of today. We will suffer in many areas for this loss but the greatest losses may be in the medical innovation area.
* The Government Research Must be Dominant school is characterized by those who sought on “scientific” grounds for removal of any restraints on stem cell research – not because such research was banned (private parties were largely free), but rather because it meant that their approved source of scientific funding – the government – was kept from the field. Indeed, this group is much more ambitious – their effort to drive the market from the marketplace of ideas is one of the most threatening themes. Research that has been funded by a company, individuals who have done consulting or worked for a company, groups who’ve received support from a company – all inherently more suspect that a government-funded scientist. One can expect that such individuals and the research work they do will soon have to wear a yellow C (for corporate) patch on their clothes, appended on every page of their journal articles.
* The Science Good, Technology Bad sub-class. This refers to the observations of Joel Mokyr and others. That it has been the close link between (largely) non-economic driven science and (largely) economic-driven technology that transformed the slow progress of most of mankind’s history to the exponential growth we have experienced in the last several centuries. Brilliant individuals have popped up from time to time throughout history. They expand man’s knowledge and some small use is made of that knowledge to improve man’s welfare. In the Industrial Revolution, however, the growth of economic freedom created a more receptive and attentive audience for such knowledge. Electricity would be discovered and Edison and others would immediately begin to think, “What is it good for?” Then, in turn, they would go back to the science and note – “this worked OK but … why?” and those questions would both prompt and interest the science community in expanding knowledge in directions more likely to prove human beneficial. The resulting positive “feed back loop” is critical to progress. This group would sever that link — Science Good, Technology Bad!!
As I have stated above, the environment is valuable, and its preservation is valuable to many. Therefore, at CEI, one of the things we have tried to do in our work is not ridicule the environmentalists or argue that environmental values are irrelevant. We simply make the point that the Malthusian goals - less people, less consumption, less technology - is far less inspiring that the view of mankind as the Ultimate Resource.
I am proud of the work we have done, but we have much work to do to improve our marketing skills. The other side of this debate seems rather adept at garnering popularity, and is much better funded. My message to those who may share our views is that we needed to find ways to create a more effective and powerful alliance between the entrepreneurial elements of the business community and the free market community. We face many problems. Keep up the good work – and help find the scientist-entrepreneurs who have not succumbed to this insanity. There must be a handful of people who recognize that the politicization of science by conservatives was stupid, but the politicization of science by the Luddites is suicidal.
Open Market/CEI, April 07, 2009 @ 3:57 pm
When it comes to things such as environmental policy, the Progressives have been rather successful at promoting their world view. They realized that it would be futile to argue that property rights and human ingenuity could not solve anything - so they did not try (immediately) to socialize oil or other sub-surface minerals but they did succeed in derailing the evolutionary process by which institutions emerged to resolve emerging problems. The economist Ronald Coase noted this in an essay pointing out that the EMS (Emergency Medical Services) was well on its way to being homesteaded with rules for allowing multiple uses - and then the Feds created the Federal Communication Commission and the spectrum is still terribly managed to this day.
The environment is valuable and valued by many. The difficulty is that we have relegated its “protection” and “management” to bureaucrats - and suppressed the evolution of property rights in environmental resources (wildlife, groundwater, fisheries). These resources remain as common property resources - and we experience repeatedly the Tragedy of the Commons. However, the most distressing aspect of the debate over environmental policy, is that the view gaining prevalence from the Progressive side is decidedly anti-human, and anti-technology at its core.
There are many features of the growing anti-human-relevant-science campaign.
* One is the selection of the fearful – the Malthusian wing of this movement that sees “technology” as change, as a move into an untested future and, thus, to be slowed if not banned. These people champion the Precautionary Principle – a totally Luddite rule. Has there ever been a market innovation (one that we hoped people would buy) that created more harm than good?
* The Economic Rational wing, which has championed “comparative effectiveness” and so on. After all, they argue, it would be foolish and wasteful to approve a new drug or device that was not “cost effective for the median individual.” A wonderful capture of the rational language but, of course, that approach argues that we can know in advance that a specific innovation will or will not prove beneficial (the French minitel system comes to mind). Most – all – innovations appear first as clunky, expensive toys or (for a very few) necessities. The purchasers are the ‘Early Adopters’ – often rich or eager to “be the first on their block.” However, the freedom to create an infant market for a product that would be too expensive and too inefficient for most people made it possible for the thousand dollar 1940s television sets with tiny blurry pictures and very low quality to become the few hundred 34-inch flat screen marvels of today. We will suffer in many areas for this loss but the greatest losses may be in the medical innovation area.
* The Government Research Must be Dominant school is characterized by those who sought on “scientific” grounds for removal of any restraints on stem cell research – not because such research was banned (private parties were largely free), but rather because it meant that their approved source of scientific funding – the government – was kept from the field. Indeed, this group is much more ambitious – their effort to drive the market from the marketplace of ideas is one of the most threatening themes. Research that has been funded by a company, individuals who have done consulting or worked for a company, groups who’ve received support from a company – all inherently more suspect that a government-funded scientist. One can expect that such individuals and the research work they do will soon have to wear a yellow C (for corporate) patch on their clothes, appended on every page of their journal articles.
* The Science Good, Technology Bad sub-class. This refers to the observations of Joel Mokyr and others. That it has been the close link between (largely) non-economic driven science and (largely) economic-driven technology that transformed the slow progress of most of mankind’s history to the exponential growth we have experienced in the last several centuries. Brilliant individuals have popped up from time to time throughout history. They expand man’s knowledge and some small use is made of that knowledge to improve man’s welfare. In the Industrial Revolution, however, the growth of economic freedom created a more receptive and attentive audience for such knowledge. Electricity would be discovered and Edison and others would immediately begin to think, “What is it good for?” Then, in turn, they would go back to the science and note – “this worked OK but … why?” and those questions would both prompt and interest the science community in expanding knowledge in directions more likely to prove human beneficial. The resulting positive “feed back loop” is critical to progress. This group would sever that link — Science Good, Technology Bad!!
As I have stated above, the environment is valuable, and its preservation is valuable to many. Therefore, at CEI, one of the things we have tried to do in our work is not ridicule the environmentalists or argue that environmental values are irrelevant. We simply make the point that the Malthusian goals - less people, less consumption, less technology - is far less inspiring that the view of mankind as the Ultimate Resource.
I am proud of the work we have done, but we have much work to do to improve our marketing skills. The other side of this debate seems rather adept at garnering popularity, and is much better funded. My message to those who may share our views is that we needed to find ways to create a more effective and powerful alliance between the entrepreneurial elements of the business community and the free market community. We face many problems. Keep up the good work – and help find the scientist-entrepreneurs who have not succumbed to this insanity. There must be a handful of people who recognize that the politicization of science by conservatives was stupid, but the politicization of science by the Luddites is suicidal.
Now banned on campus: bottled water
Now banned on campus: bottled water. By Angela Logomasini
Originally published in The Union Leader. April 6, 2009
There is a new “sin” industry on college campuses. It’s not beer, fast food or tobacco. It’s water! Universities around the nation have begun to deny students the option to drink bottled water, removing it from vending machines and campus stores.
Why? They are following the advice of environmental activist groups that say students should “drink responsibly” — which to them means tap water. Drinking bottled water is supposedly wasteful because you get basically the same thing from a tap. Yet their claims don’t hold water, and surely don’t warrant this silly prohibition.
At the extreme is Washington University in St. Louis, MO. As part of its “Tap It” campaign, the school took a symbolic step in promoting sustainability, according to student body representative, Kady McFadden. This “step” basically banned bottled water from campus stores and vending machines, except where sales must continue until bottled water contracts expire.
These actions ignore the important reasons why some people choose bottled water. Among them is predictable quality. Tap water, on the other hand, periodically experiences quality problems that cause governments issue health alerts.
In the spring of 2008, Penn State — a campus considering prohibitions on bottled water — declared a tap water health advisory, calling students to boil water or drink bottled water. Fortunately, it was eventually determined that the water was OK. Such incidents reveal that overreliance on tap water doesn’t make sense and why people appreciate other options.
Even places that claim to have exceptional tap water — such as New York City — experience problems. New York’s Columbia/New York Presbyterian Hospital has provided bottled water to its patients for drinking and brushing teeth since 2005 after two patients died from Legionnaire’s disease which transmitted via city tap water. Because tap water must travel through pipes, it can develop such quality problems along the way.
In addition to safety issues, piped water can suffer flavor defects from contaminants found in pipes, disinfectants, or from the water source. Some sources, such as the Potomac River next to Washington D.C., are home to species of algae that periodically impact tap water flavor.
This is not to suggest that most tap water isn’t generally pretty safe. The United States has some of the best quality tap water in the world. However, it is not correct for environmentalists to deny the unique challenges and quality differences that tap water possesses. Nor is it fair to deny students and other consumers the option to pick a product with fewer such issues or one they simply like better.
In fact, bottled water delivers consistent results. Seventy five percent of bottled water is drawn from non-municipal sources, such as springs and aquifers, which provide water on a sustainable long-term basis. Many of these sources have supplied quality water for decades. Other distributors purify municipal water, providing a higher quality product than simply opening the tap, and the packaging ensures the quality is maintained during delivery.
Still opponents of bottled water argue that plastic bottles have been the source of excessive waste. Yet the bottles contribute less than 0.3 percent of solid waste, which is managed safely via recycling and landfilling.
This debate over bottled water has taken calls for “dry” campuses to a whole new level! Many people desire their water will taste just as sweet or crisp as the last time they bought it. And why not? There is no good reason why anyone else should deprive them access to those products—on campus or anywhere else.
Charles Huang is a student at the University of California, Berkeley, and Angela Logomasini, Ph.D., is director of risk and environmental policy at the Competitive Enterprise Institute.
Originally published in The Union Leader. April 6, 2009
There is a new “sin” industry on college campuses. It’s not beer, fast food or tobacco. It’s water! Universities around the nation have begun to deny students the option to drink bottled water, removing it from vending machines and campus stores.
Why? They are following the advice of environmental activist groups that say students should “drink responsibly” — which to them means tap water. Drinking bottled water is supposedly wasteful because you get basically the same thing from a tap. Yet their claims don’t hold water, and surely don’t warrant this silly prohibition.
At the extreme is Washington University in St. Louis, MO. As part of its “Tap It” campaign, the school took a symbolic step in promoting sustainability, according to student body representative, Kady McFadden. This “step” basically banned bottled water from campus stores and vending machines, except where sales must continue until bottled water contracts expire.
These actions ignore the important reasons why some people choose bottled water. Among them is predictable quality. Tap water, on the other hand, periodically experiences quality problems that cause governments issue health alerts.
In the spring of 2008, Penn State — a campus considering prohibitions on bottled water — declared a tap water health advisory, calling students to boil water or drink bottled water. Fortunately, it was eventually determined that the water was OK. Such incidents reveal that overreliance on tap water doesn’t make sense and why people appreciate other options.
Even places that claim to have exceptional tap water — such as New York City — experience problems. New York’s Columbia/New York Presbyterian Hospital has provided bottled water to its patients for drinking and brushing teeth since 2005 after two patients died from Legionnaire’s disease which transmitted via city tap water. Because tap water must travel through pipes, it can develop such quality problems along the way.
In addition to safety issues, piped water can suffer flavor defects from contaminants found in pipes, disinfectants, or from the water source. Some sources, such as the Potomac River next to Washington D.C., are home to species of algae that periodically impact tap water flavor.
This is not to suggest that most tap water isn’t generally pretty safe. The United States has some of the best quality tap water in the world. However, it is not correct for environmentalists to deny the unique challenges and quality differences that tap water possesses. Nor is it fair to deny students and other consumers the option to pick a product with fewer such issues or one they simply like better.
In fact, bottled water delivers consistent results. Seventy five percent of bottled water is drawn from non-municipal sources, such as springs and aquifers, which provide water on a sustainable long-term basis. Many of these sources have supplied quality water for decades. Other distributors purify municipal water, providing a higher quality product than simply opening the tap, and the packaging ensures the quality is maintained during delivery.
Still opponents of bottled water argue that plastic bottles have been the source of excessive waste. Yet the bottles contribute less than 0.3 percent of solid waste, which is managed safely via recycling and landfilling.
This debate over bottled water has taken calls for “dry” campuses to a whole new level! Many people desire their water will taste just as sweet or crisp as the last time they bought it. And why not? There is no good reason why anyone else should deprive them access to those products—on campus or anywhere else.
Charles Huang is a student at the University of California, Berkeley, and Angela Logomasini, Ph.D., is director of risk and environmental policy at the Competitive Enterprise Institute.
The Advantages of Incremental Innovation in Drug Development
Pharmaceutical Evolution. By Albert I. Wertheimer and Thomas M. Santella
The Advantages of Incremental Innovation in Drug Development
CEI, April 7, 2009
Innovation is the lifeblood of the pharmaceutical industry. Over the last century, that industry has been responsible for thousands of new drugs, based on hundreds of thousands of smaller incremental innovations. The breakthrough “blockbuster” drugs taken by millions of patients today were not produced from thin air. Most represent the combined weight of seemingly small improvements achieved over time. The advantages of incremental improvements on existing drugs are paramount to overall increases in the quality of health care. As the pharmaceutical industry developed, classes of drugs—those with similar chemical composition and which treat similar conditions—have grown to provide physicians with the tools they need to treat diverse patient groups.
Still, critics have been highly condescending about what they call “Me-too” drugs—drugs within the same chemical class as one or more others already on the market—which they claim add little or no therapeutic value and are nothing more than an opportunity for pharmaceutical companies to fleece unsuspecting consumers. While some claim that there are too many similar drugs, and that pharmaceutical industry research and development could be more profitably directed toward developing entirely new classes of medicines, drugs based on incremental improvements generally represent advances in safety and efficacy. They also provide new formulations and dosing options that significantly increase patient compliance—both of which lead to improved health outcomes. From an economic standpoint, adding new drugs to a class of medicines also offers the possibility of lower drug prices as competition between manufacturers increases. Additionally, pharmaceutical companies depend on incremental innovations to provide the revenue that will support development of the riskier, capital-and research-intensive blockbuster drugs.
When critics refer to Me-too drugs, they do not mean exact generic copies of already existing drugs, or illegal counterfeits. Instead, Me-toos have a similar chemical composition to one or more others on the market, and have similar biological effects. But, in order to be approved, Me-too drugs must undergo the same extensive clinical testing as other new drugs to determine their safety and efficacy because they are chemically different. In addition, these differences, even if small, typically must represent a medical advancement—such as fewer side effects or improved efficacy for patient sub-populations—in order to attract a portion of the market away from the first approved drug in the class. Nevertheless, many drug industry critics have called for federal policies to inhibit the development and marketing of such incrementally improved medicines. But policies that curb incremental innovation will ultimately lead to a reduction in the overall quality of existing drug classes and could arrest the creation of truly novel drugs.
Research in any industry is a building process. Few scientists develop groundbreaking drugs from no prior research. Most work within, and respond to, existing knowledge—reading the same medical literature, and reacting to new technological breakthroughs at the same time. It is not hard to imagine, therefore, that many different companies would be working on similar drugs. In fact, it is often the case that the only reason why one drug is called novel and another a Me-too analogue is the speed at which each moves through the regulatory process.
Like other technological and value-added industries, the pharmaceutical industry depends on small steps for the creation of blockbuster drugs, which often result from a long series of small innovations. It also depends on these steps for the creation of drugs that provide slight, incremental improvements on existing drugs—thereby adding to a drug class, increasing competition among drugs, and incentivizing further innovation. As the National Research Council has observed, “the cumulative effect of numerous minor incremental innovations can sometimes be more transforming and have more economic impact than a few radical innovations or ‘technological breakthroughs’.” The net effect of increasing the number of drugs through innovation leads to advances in safety, efficacy, selectivity, and utility of drugs within a specific class.
Importantly, providing physicians with a variety of prescription options within a given therapeutic class is paramount to the provision of optimal health care. This is especially true for some drug classes, such as those relating to the central nervous system, for which overall response rates can be as low as 50 percent. For unknown reasons, certain patients respond differently to different drugs within a single class. If physicians have many options at their disposal, they can calibrate their prescribing patterns to better address the needs of specific patients. The existence of multiple similar molecular agents also provides backup in situations where the novel drug in a class is found to have unacceptable side effects and is thus removed from the market. As patients come to depend on a particular class of drugs, it is essential to make sure that they do not lose access to needed medication as a result of regulatory action.
One of the most vehement criticisms made against Me-too drugs is that they siphon money away from research that could be devoted to the creation of novel breakthrough drugs. This assumption is incorrect for a host of reasons, the most important of which is the fact that the pharmaceutical industry depends on selling the products of incremental innovations to provide the revenue for research and development of breakthrough drugs. Additionally, while it is unrealistic to presume that every incremental innovation leads to cost savings, the sum of all drug innovations can result in cost savings by reducing overall treatment costs, shortening or obviating hospital stays, increasing worker productivity and reducing absenteeism, and lowering drug costs through increased competition among manufacturers.
Ideally, every new drug would represent an unprecedented breakthrough and lead to the creation of a completely novel treatment. This, however, is not the reality of the pharmaceutical industry, or of any other development-based industry. Creating drugs based on incremental innovations provides pharmaceutical companies with a secure stream of revenue, which can be directed to higher-risk, potential blockbuster-yielding research. Policies aimed at reducing the industry’s ability to obtain revenues from incremental innovations could be self-defeating, as those industries will then have less revenue to reinvest in R&D for new drugs. Put simply, limiting incremental drug innovation is analogous to limiting competition. The ultimate result could have devastating consequences for the future of the pharmaceutical industry and for the millions of patients who depend on it.
The authors and CEI would like to thank the International Policy Network in London, which published an earlier version of this paper.
Full paper: Wertheimer and Santella - Pharmaceutical Evolution.pdf
The Advantages of Incremental Innovation in Drug Development
CEI, April 7, 2009
Innovation is the lifeblood of the pharmaceutical industry. Over the last century, that industry has been responsible for thousands of new drugs, based on hundreds of thousands of smaller incremental innovations. The breakthrough “blockbuster” drugs taken by millions of patients today were not produced from thin air. Most represent the combined weight of seemingly small improvements achieved over time. The advantages of incremental improvements on existing drugs are paramount to overall increases in the quality of health care. As the pharmaceutical industry developed, classes of drugs—those with similar chemical composition and which treat similar conditions—have grown to provide physicians with the tools they need to treat diverse patient groups.
Still, critics have been highly condescending about what they call “Me-too” drugs—drugs within the same chemical class as one or more others already on the market—which they claim add little or no therapeutic value and are nothing more than an opportunity for pharmaceutical companies to fleece unsuspecting consumers. While some claim that there are too many similar drugs, and that pharmaceutical industry research and development could be more profitably directed toward developing entirely new classes of medicines, drugs based on incremental improvements generally represent advances in safety and efficacy. They also provide new formulations and dosing options that significantly increase patient compliance—both of which lead to improved health outcomes. From an economic standpoint, adding new drugs to a class of medicines also offers the possibility of lower drug prices as competition between manufacturers increases. Additionally, pharmaceutical companies depend on incremental innovations to provide the revenue that will support development of the riskier, capital-and research-intensive blockbuster drugs.
When critics refer to Me-too drugs, they do not mean exact generic copies of already existing drugs, or illegal counterfeits. Instead, Me-toos have a similar chemical composition to one or more others on the market, and have similar biological effects. But, in order to be approved, Me-too drugs must undergo the same extensive clinical testing as other new drugs to determine their safety and efficacy because they are chemically different. In addition, these differences, even if small, typically must represent a medical advancement—such as fewer side effects or improved efficacy for patient sub-populations—in order to attract a portion of the market away from the first approved drug in the class. Nevertheless, many drug industry critics have called for federal policies to inhibit the development and marketing of such incrementally improved medicines. But policies that curb incremental innovation will ultimately lead to a reduction in the overall quality of existing drug classes and could arrest the creation of truly novel drugs.
Research in any industry is a building process. Few scientists develop groundbreaking drugs from no prior research. Most work within, and respond to, existing knowledge—reading the same medical literature, and reacting to new technological breakthroughs at the same time. It is not hard to imagine, therefore, that many different companies would be working on similar drugs. In fact, it is often the case that the only reason why one drug is called novel and another a Me-too analogue is the speed at which each moves through the regulatory process.
Like other technological and value-added industries, the pharmaceutical industry depends on small steps for the creation of blockbuster drugs, which often result from a long series of small innovations. It also depends on these steps for the creation of drugs that provide slight, incremental improvements on existing drugs—thereby adding to a drug class, increasing competition among drugs, and incentivizing further innovation. As the National Research Council has observed, “the cumulative effect of numerous minor incremental innovations can sometimes be more transforming and have more economic impact than a few radical innovations or ‘technological breakthroughs’.” The net effect of increasing the number of drugs through innovation leads to advances in safety, efficacy, selectivity, and utility of drugs within a specific class.
Importantly, providing physicians with a variety of prescription options within a given therapeutic class is paramount to the provision of optimal health care. This is especially true for some drug classes, such as those relating to the central nervous system, for which overall response rates can be as low as 50 percent. For unknown reasons, certain patients respond differently to different drugs within a single class. If physicians have many options at their disposal, they can calibrate their prescribing patterns to better address the needs of specific patients. The existence of multiple similar molecular agents also provides backup in situations where the novel drug in a class is found to have unacceptable side effects and is thus removed from the market. As patients come to depend on a particular class of drugs, it is essential to make sure that they do not lose access to needed medication as a result of regulatory action.
One of the most vehement criticisms made against Me-too drugs is that they siphon money away from research that could be devoted to the creation of novel breakthrough drugs. This assumption is incorrect for a host of reasons, the most important of which is the fact that the pharmaceutical industry depends on selling the products of incremental innovations to provide the revenue for research and development of breakthrough drugs. Additionally, while it is unrealistic to presume that every incremental innovation leads to cost savings, the sum of all drug innovations can result in cost savings by reducing overall treatment costs, shortening or obviating hospital stays, increasing worker productivity and reducing absenteeism, and lowering drug costs through increased competition among manufacturers.
Ideally, every new drug would represent an unprecedented breakthrough and lead to the creation of a completely novel treatment. This, however, is not the reality of the pharmaceutical industry, or of any other development-based industry. Creating drugs based on incremental innovations provides pharmaceutical companies with a secure stream of revenue, which can be directed to higher-risk, potential blockbuster-yielding research. Policies aimed at reducing the industry’s ability to obtain revenues from incremental innovations could be self-defeating, as those industries will then have less revenue to reinvest in R&D for new drugs. Put simply, limiting incremental drug innovation is analogous to limiting competition. The ultimate result could have devastating consequences for the future of the pharmaceutical industry and for the millions of patients who depend on it.
The authors and CEI would like to thank the International Policy Network in London, which published an earlier version of this paper.
Full paper: Wertheimer and Santella - Pharmaceutical Evolution.pdf
Getting drugs to market is much harder than the media lets on.
It's Time to Fight the 'PharmaScolds'. By David A Shaywitz and Thomas P Stossel
Getting drugs to market is much harder than the media lets on.
WSJ, Apr 08, 2009
Relationships between university researchers and medical product companies are under relentless attack by critics who portray these associations as a morality play in which noble academics struggle to resist the dark, corrupting influence of industry. So why are leading disease-research foundations increasingly choosing to partner with industry rather than condemn it?
The answer is that by prioritizing the needs of patients, these medical philanthropies remain keenly aware of something academic critics of industry may have forgotten as they've scaled the university ladder. The goal of medical research is not to publish papers, but to develop new treatments for people suffering from disease. And translating laboratory research into new therapies, in the words of Robert Beall, president of the Cystic Fibrosis Foundation, is something "academics are really not good at."
After years of extensive public investment of billions of dollars in medical research, we have generated thousands of scientific papers, but few important new treatments for dreadful conditions such as pancreatic cancer and Alzheimer's disease.
To be sure, we have won some important battles. Statins and blood pressure medications have dramatically improved the prognosis of patients at risk for heart attacks, while powerful antiviral medicines mean HIV is no longer a death sentence.
But behind these spectacular achievements is an arduous, expensive and underappreciated journey, occurring largely in industry, from an original scientific concept to an effective drug or device. Most promising ideas either never pan out or result in modest, incremental advances. Human biology is maddeningly complex, laboratory models are necessarily simplistic, and scientific understanding remains painfully limited.
Discerning which ideas have value and capturing this value is extraordinarily challenging and has a depressingly high failure rate. The complexity of product development as well as the scientific sophistication, regulatory oversight, and manufacturing consistency required to pull this off are astounding. That any new useful medical products emerge at all is nearly miraculous.
Given the vital role of medical products companies and the magnitude of their challenges, one might imagine that this industry would be admired. To some extent, it is. Leading research organizations such as the Michael J. Fox Foundation for Parkinson's disease proactively build bridges with industry leaders, solicit advice from industry scientists, and fund projects in industry labs.
But this enlightened view of industry is not widespread. This is largely because of the disproportionate influence of a coterie of prominent critics we have previously dubbed "pharmascolds," who routinely vilify the medical products industry and portray academics working with it as traitors and sellouts. These critics are pious academics, self-righteous medical journal editors, and opportunistic politicians and journalists. Their condemnation of anyone's legitimate profit -- it's all "corruption" in their book -- has in fact materially enhanced their own careers. They extrapolate from occasional behavioral lapses in industry -- which is equally, if not more prevalent, in universities -- to demonize the market and portray scientific medicine as an ascetic religion, which it is not.
The pharmascolds systematically discount the difficulties of product development. Meanwhile, each new barrier -- such as the National Institutes of Health's ban on paid consulting for industry -- erected between publicly funded researchers and companies, especially cash-strapped start-ups where many of the breakthroughs occur, slows the progress of potential treatments.
In response to these attacks, drug company spokespeople seem content to offer up measly press releases. When challenged by reporters, most academic consultants to industry refuse to comment or offer a meek explanation, instead of retorting that industry pays them because they add critically important value. This evasion has only emboldened industry critics, disheartened company employees, and caused even allies to wonder if there really is something to hide.
For the sake of the many patients whose diseases require innovative treatments -- and for the medical philanthropists determined to make it happen -- it's time for the leaders of the medical products industry to take pride in their purpose and start fighting back.
And discovering a few important new medicines wouldn't hurt either.
Dr. Shaywitz is a management consultant in New Jersey. Dr. Stossel is a professor of medicine at Harvard and a fellow at the Manhattan Institute.
Getting drugs to market is much harder than the media lets on.
WSJ, Apr 08, 2009
Relationships between university researchers and medical product companies are under relentless attack by critics who portray these associations as a morality play in which noble academics struggle to resist the dark, corrupting influence of industry. So why are leading disease-research foundations increasingly choosing to partner with industry rather than condemn it?
The answer is that by prioritizing the needs of patients, these medical philanthropies remain keenly aware of something academic critics of industry may have forgotten as they've scaled the university ladder. The goal of medical research is not to publish papers, but to develop new treatments for people suffering from disease. And translating laboratory research into new therapies, in the words of Robert Beall, president of the Cystic Fibrosis Foundation, is something "academics are really not good at."
After years of extensive public investment of billions of dollars in medical research, we have generated thousands of scientific papers, but few important new treatments for dreadful conditions such as pancreatic cancer and Alzheimer's disease.
To be sure, we have won some important battles. Statins and blood pressure medications have dramatically improved the prognosis of patients at risk for heart attacks, while powerful antiviral medicines mean HIV is no longer a death sentence.
But behind these spectacular achievements is an arduous, expensive and underappreciated journey, occurring largely in industry, from an original scientific concept to an effective drug or device. Most promising ideas either never pan out or result in modest, incremental advances. Human biology is maddeningly complex, laboratory models are necessarily simplistic, and scientific understanding remains painfully limited.
Discerning which ideas have value and capturing this value is extraordinarily challenging and has a depressingly high failure rate. The complexity of product development as well as the scientific sophistication, regulatory oversight, and manufacturing consistency required to pull this off are astounding. That any new useful medical products emerge at all is nearly miraculous.
Given the vital role of medical products companies and the magnitude of their challenges, one might imagine that this industry would be admired. To some extent, it is. Leading research organizations such as the Michael J. Fox Foundation for Parkinson's disease proactively build bridges with industry leaders, solicit advice from industry scientists, and fund projects in industry labs.
But this enlightened view of industry is not widespread. This is largely because of the disproportionate influence of a coterie of prominent critics we have previously dubbed "pharmascolds," who routinely vilify the medical products industry and portray academics working with it as traitors and sellouts. These critics are pious academics, self-righteous medical journal editors, and opportunistic politicians and journalists. Their condemnation of anyone's legitimate profit -- it's all "corruption" in their book -- has in fact materially enhanced their own careers. They extrapolate from occasional behavioral lapses in industry -- which is equally, if not more prevalent, in universities -- to demonize the market and portray scientific medicine as an ascetic religion, which it is not.
The pharmascolds systematically discount the difficulties of product development. Meanwhile, each new barrier -- such as the National Institutes of Health's ban on paid consulting for industry -- erected between publicly funded researchers and companies, especially cash-strapped start-ups where many of the breakthroughs occur, slows the progress of potential treatments.
In response to these attacks, drug company spokespeople seem content to offer up measly press releases. When challenged by reporters, most academic consultants to industry refuse to comment or offer a meek explanation, instead of retorting that industry pays them because they add critically important value. This evasion has only emboldened industry critics, disheartened company employees, and caused even allies to wonder if there really is something to hide.
For the sake of the many patients whose diseases require innovative treatments -- and for the medical philanthropists determined to make it happen -- it's time for the leaders of the medical products industry to take pride in their purpose and start fighting back.
And discovering a few important new medicines wouldn't hurt either.
Dr. Shaywitz is a management consultant in New Jersey. Dr. Stossel is a professor of medicine at Harvard and a fellow at the Manhattan Institute.
Japan warns against U.N. inaction on N Korea rocket launch
Japan warns against U.N. inaction on N Korea rocket launch
Japan Today, Wednesday 08th April, 06:30 AM JST
TOKYO — Japan’s foreign minister warned Tuesday that the U.N. Security Council must give a strong response to North Korea’s recent rocket launch or risk losing its authority.
Foreign Minister Hirofumi Nakasone said a failure to respond to the North’s Sunday launch could hurt multilateral talks aimed at getting the communist nation to halt its nuclear programs.
“If violations are allowed, the U.N. Security Council’s authority would be threatened and trust placed upon it would be impaired,” Nakasone told a news conference. “The U.N. Security Council should respond properly and teach North Korea a lesson that it has to pay for the act of provocation.”
He said the lack of a strong response to the rocket launch—seen by many as a cover for testing long-range missile technology—would send the wrong message to the North.
Security Council diplomats were mired in squabbles over how, or even whether, to punish North Korea for Sunday’s launch. World leaders, including President Barack Obama, called it a provocative act and a violation of previous sanctions, imposed after the North’s underground nuclear test in 2006.
Japan said Monday that while it was trying to lobby China and Russia, which are reluctant to punish the North, it would extend sanctions against North Korea for another year in response to the launch.
Japan imposed tight trade sanctions against the North in 2006 following Pyongyang’s missile and atomic tests that year. The ongoing sanctions, which ban North Korean ships from entering Japan and prohibit imports of North Korean goods, have been renewed every six months since and were to expire on April 13.
Pyongyang continued to claim it put a communications satellite into orbit and is now transmitting data and patriotic songs. But Japan joined the rest of the world in saying that it appeared to be a failure.
Nakasone said Japan has yet to determine whether North Korea launched a satellite or a missile, but either way the launch violated the Security Council ban because it used missile technology.
The international community will allow North Korea to engage in space development “only if the North fulfilled its obligation to abandon all nuclear programs and no longer poses a threat to Japan and the rest of the world,” he said.
Japan Today, Wednesday 08th April, 06:30 AM JST
TOKYO — Japan’s foreign minister warned Tuesday that the U.N. Security Council must give a strong response to North Korea’s recent rocket launch or risk losing its authority.
Foreign Minister Hirofumi Nakasone said a failure to respond to the North’s Sunday launch could hurt multilateral talks aimed at getting the communist nation to halt its nuclear programs.
“If violations are allowed, the U.N. Security Council’s authority would be threatened and trust placed upon it would be impaired,” Nakasone told a news conference. “The U.N. Security Council should respond properly and teach North Korea a lesson that it has to pay for the act of provocation.”
He said the lack of a strong response to the rocket launch—seen by many as a cover for testing long-range missile technology—would send the wrong message to the North.
Security Council diplomats were mired in squabbles over how, or even whether, to punish North Korea for Sunday’s launch. World leaders, including President Barack Obama, called it a provocative act and a violation of previous sanctions, imposed after the North’s underground nuclear test in 2006.
Japan said Monday that while it was trying to lobby China and Russia, which are reluctant to punish the North, it would extend sanctions against North Korea for another year in response to the launch.
Japan imposed tight trade sanctions against the North in 2006 following Pyongyang’s missile and atomic tests that year. The ongoing sanctions, which ban North Korean ships from entering Japan and prohibit imports of North Korean goods, have been renewed every six months since and were to expire on April 13.
Pyongyang continued to claim it put a communications satellite into orbit and is now transmitting data and patriotic songs. But Japan joined the rest of the world in saying that it appeared to be a failure.
Nakasone said Japan has yet to determine whether North Korea launched a satellite or a missile, but either way the launch violated the Security Council ban because it used missile technology.
The international community will allow North Korea to engage in space development “only if the North fulfilled its obligation to abandon all nuclear programs and no longer poses a threat to Japan and the rest of the world,” he said.
Salazar Announces that East Coast Windmills Could Provide 100 Percent of Nation’s Electricity
Fantasy Land: Salazar Announces that East Coast Windmills Could Provide 100 Percent of Nation’s Electricity
The Institute for Energy Research, Apr 07, 2009
WASHINGTON, D.C. - IER President Thomas J. Pyle today issued the following statement in response to Secretary Salazar’s assertion that windmills off the East Coast, “could generate 1 million megawatts of power, roughly the equivalent of 3,000 medium coal-fired power plants, or nearly five times the number of coal plants now in the United States.”
“We were pleasantly surprised to hear Secretary Salazar announce today that East Coast windmills could not only replace the electricity we get from coal, but double it. According to his estimate, these windmills could completely replace the 1 million megawatt hours of power that coal, natural gas, nuclear, biomass, onshore wind, and other renewable sources provide.
“Unfortunately, upon closer inspection, key elements of the secretary’s claim fail to hold up to scrutiny. For starters, America doesn’t even have 3,000 coal plants in service right now—we don’t have even half of that. But even if we did, the secretary appears to be suggesting that East Coast windmills could meet well over 100 percent of our electricity needs all by themselves. Never mind that wind accounts for only 1.3 percent of our nation’s electricity today. To make the secretary’s claim accurate, we would need to install 309,587 giant 3.25 mw turbines spread over 1,800 miles of coastline (which is the entire East Coast)—or about 172 turbines per mile of coastline—and hope the wind blows 24 hours a day, seven days a week.
“Assuming the wind never stops, and assuming Americans could do without a recreational coastline, we might have a shot at meeting the secretary’s goal. But it won’t be cheap. According to the Energy Information Administration, offshore wind power—21 cents per kilowatt hour—is more than twice as costly as just about every other conventional alternative available.”
NOTE: The Cape Wind Project calls for the installation of 130 wind turbines, which have a rated capacity of 420 megawatts of energy.
More from IER:
Blog Posting: Will Renewables Become Competitive Anytime Soon?
Press Release: Hundreds Turn Out in Support of Offshore Energy Development
Fact Sheet: Offshore Energy Exploration: Myths vs. Facts
The Institute for Energy Research, Apr 07, 2009
WASHINGTON, D.C. - IER President Thomas J. Pyle today issued the following statement in response to Secretary Salazar’s assertion that windmills off the East Coast, “could generate 1 million megawatts of power, roughly the equivalent of 3,000 medium coal-fired power plants, or nearly five times the number of coal plants now in the United States.”
“We were pleasantly surprised to hear Secretary Salazar announce today that East Coast windmills could not only replace the electricity we get from coal, but double it. According to his estimate, these windmills could completely replace the 1 million megawatt hours of power that coal, natural gas, nuclear, biomass, onshore wind, and other renewable sources provide.
“Unfortunately, upon closer inspection, key elements of the secretary’s claim fail to hold up to scrutiny. For starters, America doesn’t even have 3,000 coal plants in service right now—we don’t have even half of that. But even if we did, the secretary appears to be suggesting that East Coast windmills could meet well over 100 percent of our electricity needs all by themselves. Never mind that wind accounts for only 1.3 percent of our nation’s electricity today. To make the secretary’s claim accurate, we would need to install 309,587 giant 3.25 mw turbines spread over 1,800 miles of coastline (which is the entire East Coast)—or about 172 turbines per mile of coastline—and hope the wind blows 24 hours a day, seven days a week.
“Assuming the wind never stops, and assuming Americans could do without a recreational coastline, we might have a shot at meeting the secretary’s goal. But it won’t be cheap. According to the Energy Information Administration, offshore wind power—21 cents per kilowatt hour—is more than twice as costly as just about every other conventional alternative available.”
NOTE: The Cape Wind Project calls for the installation of 130 wind turbines, which have a rated capacity of 420 megawatts of energy.
More from IER:
Blog Posting: Will Renewables Become Competitive Anytime Soon?
Press Release: Hundreds Turn Out in Support of Offshore Energy Development
Fact Sheet: Offshore Energy Exploration: Myths vs. Facts
Tuesday, April 7, 2009
Libertarian views: Resenting the Rich
Resenting the Rich, by Chris Edwards
This article appeared in the Economist on April 7, 2009
This is half of a larger debate between Chris Edwards and Professor Thomas Piketty.
Should the rich pay higher taxes? Definitely not. Governments do not need any more money, and they misallocate much of what they already take from us. Furthermore, taxation imposes large deadweight losses on the economy, which makes us all poorer.
More on those points later, but first let us examine how much tax the rich are currently paying. In the United States, Congressional Budget Office (CBO) data show average effective tax rates for five income groups or quintiles. The CBO data include federal income, payroll, and excise taxes (www.cbo.gov/publications/collections/taxdistribution.cfm).
The most recent data for 2005 show that effective rates (taxes divided by income) for the quintiles starting at the bottom were 4.3%, 9.9%, 14.2%, 17.4% and 25.5%. That is a steeply graduated tax system. I would prefer a flat or proportional system because I believe in the American ideal of equal justice under law. But it is amazing that some people want to increase taxes on the rich when the top quintile is already paying a rate five times higher than the rate at the bottom.
The Economist's proposition states: "Inequality has risen across the rich world since the 1970s" partly as a result of lower taxes on the rich. If income inequality has risen, the CBO data suggests that taxes are not the cause. The CBO data show that the effective tax rate on the top quintile has been fairly constant since 1979, hovering between 25% and 28%.
If there are disproportionately large tax cuts at the top end, it might lead to larger asset accumulations by the wealthy and greater pre-tax income inequality over time. But the CBO data show that is not what happened. The rich have been pummelled with an effective rate of 25% or more for decades, while effective rates on the other four quintiles have fallen modestly.
Statutory rates have been cut at the top end, but that has led to substantially higher reported income due to an increase in productive efforts and a reduction in tax avoidance. In a 2006 paper, Martin Feldstein at Harvard calculated that the elasticity of taxable income with respect to income tax rates is about 1, so that cutting the top rate from 40% to 30% would boost taxable income by about 16%. The result would be more work effort and less avoidance by entrepreneurs, doctors, scientists and others in the top quintile, which would greatly benefit the rest of us.
Unfortunately, President Obama wants to go in the other direction, raising the top two income tax rates, which would reduce production and increase avoidance by highly skilled people. Such economic damage from higher taxes is called deadweight loss. In the 2006 paper, Mr Feldstein argued that deadweight losses from a federal income tax rate increase would be $1.76 for every dollar of tax increase. That means that every new $1 billion spending programme in President Obama's budget will destroy about $1.76 billion of activities in the private sector.
That is the economics of tax hikes, but what about the politics? The Economist proposition suggests that "resentment over inequality is growing ever more vocal … is taxing the rich more heavily necessary to buy social peace?" Consider that 43% of American households do not pay any federal income tax, according to data from the Joint Committee on Taxation. That large group is doing little to support the huge burden of the welfare state, so it is laughable that they might be angry at the wealthy who do bear the burden. The CBO data show that the top one-fifth of households pay 69% of the entire costs of the federal government. Frankly, the rest of Americans are free-riders on the top quintile's enormous financial support of government.
In America, it is not rich and productive people that create resentment. Instead, it is corrupt politicians handing out special favours, it is the bungling bureaucrats we saw after Hurricane Katrina, and it is cabinet nominees who cheat on their taxes. Americans are not upset at wealthy Steve Jobs and his amazing innovations, but they are upset when they hear that global warming advocate Al Gore lives in a mansion that consumes 15 times more electricity than the average US home. It is hypocrisy, fraud and corruption that people do not like, not hard work and high incomes.
The main reason that we should not increase taxes on the rich is that most governments are far above their optimal size. Vito Tanzi, a former top economist at the International Monetary Fund, noted in a 2004 study: "All the theoretical reasons advanced by economists to justify the role of the state in the economy, including the need to assist the poor, could be satisfied with a much smaller share of spending of GDP than is now found in most industrial countries." Mr Tanzi found that bigger governments were not correlated with better human development indicators such as education achievement, infant mortality or life expectancy.
There are fundamental reasons why big governments do not work very well. As taxes rise, resources are shifted from more efficient private activities to less efficient government activities. The private sector is not more efficient than government because it does not make mistakes, but because it has mechanisms to purge mistakes and move resources to higher-valued uses. Government policymakers do the opposite: they retain failed programmes year after year, and resources get stuck in low-value uses.
Even if politicians did focus on moving resources to higher-value uses, they would be unable to because government activities do not generate the price and profit signals needed to allocate capital and labour efficiently. A final problem is that government programmes are often horribly managed. To take one example, President Obama wants to expand subsidies for energy research, but past US energy subsidies have led to boondoggle after boondoggle, as I have documented at www.downsizinggovernment.org. Perhaps governments in other countries work better than in the United States, but I doubt it.
Some economists in America think that it is inevitable that taxes will rise in coming years. But Canada's recent experience shows a different path. Since the early 1990s, Canada has cut individual and corporate tax rates, shrunk the overall size of government from 53% of GDP to 40%, and has consistently balanced its federal budget. In Canada, tax cuts, spending cuts and debt reduction have not led to less social peace, nor should it anywhere else.
Chris Edwards is tax policy director at the Cato Institute and co-author of Global Tax Revolution.
This article appeared in the Economist on April 7, 2009
This is half of a larger debate between Chris Edwards and Professor Thomas Piketty.
Should the rich pay higher taxes? Definitely not. Governments do not need any more money, and they misallocate much of what they already take from us. Furthermore, taxation imposes large deadweight losses on the economy, which makes us all poorer.
More on those points later, but first let us examine how much tax the rich are currently paying. In the United States, Congressional Budget Office (CBO) data show average effective tax rates for five income groups or quintiles. The CBO data include federal income, payroll, and excise taxes (www.cbo.gov/publications/collections/taxdistribution.cfm).
The most recent data for 2005 show that effective rates (taxes divided by income) for the quintiles starting at the bottom were 4.3%, 9.9%, 14.2%, 17.4% and 25.5%. That is a steeply graduated tax system. I would prefer a flat or proportional system because I believe in the American ideal of equal justice under law. But it is amazing that some people want to increase taxes on the rich when the top quintile is already paying a rate five times higher than the rate at the bottom.
The Economist's proposition states: "Inequality has risen across the rich world since the 1970s" partly as a result of lower taxes on the rich. If income inequality has risen, the CBO data suggests that taxes are not the cause. The CBO data show that the effective tax rate on the top quintile has been fairly constant since 1979, hovering between 25% and 28%.
If there are disproportionately large tax cuts at the top end, it might lead to larger asset accumulations by the wealthy and greater pre-tax income inequality over time. But the CBO data show that is not what happened. The rich have been pummelled with an effective rate of 25% or more for decades, while effective rates on the other four quintiles have fallen modestly.
Statutory rates have been cut at the top end, but that has led to substantially higher reported income due to an increase in productive efforts and a reduction in tax avoidance. In a 2006 paper, Martin Feldstein at Harvard calculated that the elasticity of taxable income with respect to income tax rates is about 1, so that cutting the top rate from 40% to 30% would boost taxable income by about 16%. The result would be more work effort and less avoidance by entrepreneurs, doctors, scientists and others in the top quintile, which would greatly benefit the rest of us.
Unfortunately, President Obama wants to go in the other direction, raising the top two income tax rates, which would reduce production and increase avoidance by highly skilled people. Such economic damage from higher taxes is called deadweight loss. In the 2006 paper, Mr Feldstein argued that deadweight losses from a federal income tax rate increase would be $1.76 for every dollar of tax increase. That means that every new $1 billion spending programme in President Obama's budget will destroy about $1.76 billion of activities in the private sector.
That is the economics of tax hikes, but what about the politics? The Economist proposition suggests that "resentment over inequality is growing ever more vocal … is taxing the rich more heavily necessary to buy social peace?" Consider that 43% of American households do not pay any federal income tax, according to data from the Joint Committee on Taxation. That large group is doing little to support the huge burden of the welfare state, so it is laughable that they might be angry at the wealthy who do bear the burden. The CBO data show that the top one-fifth of households pay 69% of the entire costs of the federal government. Frankly, the rest of Americans are free-riders on the top quintile's enormous financial support of government.
In America, it is not rich and productive people that create resentment. Instead, it is corrupt politicians handing out special favours, it is the bungling bureaucrats we saw after Hurricane Katrina, and it is cabinet nominees who cheat on their taxes. Americans are not upset at wealthy Steve Jobs and his amazing innovations, but they are upset when they hear that global warming advocate Al Gore lives in a mansion that consumes 15 times more electricity than the average US home. It is hypocrisy, fraud and corruption that people do not like, not hard work and high incomes.
The main reason that we should not increase taxes on the rich is that most governments are far above their optimal size. Vito Tanzi, a former top economist at the International Monetary Fund, noted in a 2004 study: "All the theoretical reasons advanced by economists to justify the role of the state in the economy, including the need to assist the poor, could be satisfied with a much smaller share of spending of GDP than is now found in most industrial countries." Mr Tanzi found that bigger governments were not correlated with better human development indicators such as education achievement, infant mortality or life expectancy.
There are fundamental reasons why big governments do not work very well. As taxes rise, resources are shifted from more efficient private activities to less efficient government activities. The private sector is not more efficient than government because it does not make mistakes, but because it has mechanisms to purge mistakes and move resources to higher-valued uses. Government policymakers do the opposite: they retain failed programmes year after year, and resources get stuck in low-value uses.
Even if politicians did focus on moving resources to higher-value uses, they would be unable to because government activities do not generate the price and profit signals needed to allocate capital and labour efficiently. A final problem is that government programmes are often horribly managed. To take one example, President Obama wants to expand subsidies for energy research, but past US energy subsidies have led to boondoggle after boondoggle, as I have documented at www.downsizinggovernment.org. Perhaps governments in other countries work better than in the United States, but I doubt it.
Some economists in America think that it is inevitable that taxes will rise in coming years. But Canada's recent experience shows a different path. Since the early 1990s, Canada has cut individual and corporate tax rates, shrunk the overall size of government from 53% of GDP to 40%, and has consistently balanced its federal budget. In Canada, tax cuts, spending cuts and debt reduction have not led to less social peace, nor should it anywhere else.
Chris Edwards is tax policy director at the Cato Institute and co-author of Global Tax Revolution.
Remarks by the Federal President to the Troops in Baghdad
THE WHITE HOUSE
Office of the Press Secretary
_________________________________________________________________
For Immediate Release April 7, 2009
REMARKS BY THE PRESIDENT TO THE TROOPS
Al Faw Palace
Baghdad, Iraq
6:08 P.M. (Local)
THE PRESIDENT: Thank you. Thank you, guys. Let me say Multinational Force Iraq, Multinational Corps Iraq, Multinational Security Transition Command Iraq First Corps, America's Corp Band: Thanks to all of you.
Listen, I am so honored.
AUDIENCE MEMBER: We love you.
THE PRESIDENT: I love you back. (Applause.) I am honored -- I'm honored and grateful to be with all of you. And I'm not going to talk long because I want to shake as many hands as I can. (Applause.) And I've been talking all week. (Laughter.)
But there's a couple of things I want to say. Number one, thank you.
AUDIENCE MEMBER: You're welcome.
THE PRESIDENT: You know, when I was at Camp Lejeune I spoke about what it means for America to see our best and brightest, our finest young men and women serve us. And what I said then is something that I want to repeat to you, which is: You have performed brilliantly in every mission that has been given to you.
AUDIENCE: Ooh-ah.
THE PRESIDENT: Under enormous strain and under enormous sacrifice, through controversy and difficulty and politics, you've kept your eyes focused on just doing your job. And because of that, every mission that's been assigned -- from getting rid of Saddam, to reducing violence, to stabilizing the country, to facilitating elections -- you have given Iraq the opportunity to stand on its own as a democratic country. That is an extraordinary achievement, and for that you have the thanks of the American people. (Applause.) That's point number one.
Point number two is, this is going to be a critical period, these next 18 months. I was just discussing this with your commander, but I think it's something that all of you know. It is time for us to transition to the Iraqis. (Applause.) They need to take responsibility for their country and for their sovereignty. (Applause.)
And in order for them to do that, they have got to make political accommodations. They're going to have to decide that they want to resolve their differences through constitutional means and legal means. They are going to have to focus on providing government services that encourage confidence among their citizens.
All those things they have to do. We can't do it for them. But what we can do is make sure that we are a stalwart partner, that we are working alongside them, that we are committed to their success, that in terms of training their security forces, training their civilian forces in order to achieve a more effective government, they know that they have a steady partner with us.
And so just as we thank you for what you've already accomplished, I want to say thank you because you will be critical in terms of us being able to make sure that Iraq is stable, that it is not a safe haven for terrorists, that it is a good neighbor and a good ally, and we can start bringing our folks home. (Applause.)
So now is not the time to lose focus. We have to be even more focused than we've been in order to achieve success.
The last point I want to make is I know how hard it's been on a lot of you. You've been away from your families, many of you for multiple rotations. You've seen buddies of yours injured and you remember those who have made the ultimate sacrifice.
AUDIENCE: Ooh-ah.
THE PRESIDENT: There are probably some people here who have seen children born and have been missing watching them grow up. There are many of you who have listened to your spouse and the extraordinary sacrifices that they have to make when you're gone.
And so I want you to know that Michelle and myself are doing everything -- (applause) -- are doing everything we can to provide additional support for military families. The federal budget that I have introduced increases support for military families. We are going to do everything required to make sure that the commitment we make to our veterans is met, and that people don't have to fight for what they have earned as a consequence of their service.
The main point I want to make is we have not forgotten what you have already done, we are grateful for what you will do, and as long as I am in the White House, you are going to get the support that you need and the thanks that you deserve from a grateful nation. (Applause.)
So thank you very much everybody. (Applause.) God bless you. (Applause.) God bless the United States of America. (Applause.)
END
6:15 P.M. (L)
Office of the Press Secretary
_________________________________________________________________
For Immediate Release April 7, 2009
REMARKS BY THE PRESIDENT TO THE TROOPS
Al Faw Palace
Baghdad, Iraq
6:08 P.M. (Local)
THE PRESIDENT: Thank you. Thank you, guys. Let me say Multinational Force Iraq, Multinational Corps Iraq, Multinational Security Transition Command Iraq First Corps, America's Corp Band: Thanks to all of you.
Listen, I am so honored.
AUDIENCE MEMBER: We love you.
THE PRESIDENT: I love you back. (Applause.) I am honored -- I'm honored and grateful to be with all of you. And I'm not going to talk long because I want to shake as many hands as I can. (Applause.) And I've been talking all week. (Laughter.)
But there's a couple of things I want to say. Number one, thank you.
AUDIENCE MEMBER: You're welcome.
THE PRESIDENT: You know, when I was at Camp Lejeune I spoke about what it means for America to see our best and brightest, our finest young men and women serve us. And what I said then is something that I want to repeat to you, which is: You have performed brilliantly in every mission that has been given to you.
AUDIENCE: Ooh-ah.
THE PRESIDENT: Under enormous strain and under enormous sacrifice, through controversy and difficulty and politics, you've kept your eyes focused on just doing your job. And because of that, every mission that's been assigned -- from getting rid of Saddam, to reducing violence, to stabilizing the country, to facilitating elections -- you have given Iraq the opportunity to stand on its own as a democratic country. That is an extraordinary achievement, and for that you have the thanks of the American people. (Applause.) That's point number one.
Point number two is, this is going to be a critical period, these next 18 months. I was just discussing this with your commander, but I think it's something that all of you know. It is time for us to transition to the Iraqis. (Applause.) They need to take responsibility for their country and for their sovereignty. (Applause.)
And in order for them to do that, they have got to make political accommodations. They're going to have to decide that they want to resolve their differences through constitutional means and legal means. They are going to have to focus on providing government services that encourage confidence among their citizens.
All those things they have to do. We can't do it for them. But what we can do is make sure that we are a stalwart partner, that we are working alongside them, that we are committed to their success, that in terms of training their security forces, training their civilian forces in order to achieve a more effective government, they know that they have a steady partner with us.
And so just as we thank you for what you've already accomplished, I want to say thank you because you will be critical in terms of us being able to make sure that Iraq is stable, that it is not a safe haven for terrorists, that it is a good neighbor and a good ally, and we can start bringing our folks home. (Applause.)
So now is not the time to lose focus. We have to be even more focused than we've been in order to achieve success.
The last point I want to make is I know how hard it's been on a lot of you. You've been away from your families, many of you for multiple rotations. You've seen buddies of yours injured and you remember those who have made the ultimate sacrifice.
AUDIENCE: Ooh-ah.
THE PRESIDENT: There are probably some people here who have seen children born and have been missing watching them grow up. There are many of you who have listened to your spouse and the extraordinary sacrifices that they have to make when you're gone.
And so I want you to know that Michelle and myself are doing everything -- (applause) -- are doing everything we can to provide additional support for military families. The federal budget that I have introduced increases support for military families. We are going to do everything required to make sure that the commitment we make to our veterans is met, and that people don't have to fight for what they have earned as a consequence of their service.
The main point I want to make is we have not forgotten what you have already done, we are grateful for what you will do, and as long as I am in the White House, you are going to get the support that you need and the thanks that you deserve from a grateful nation. (Applause.)
So thank you very much everybody. (Applause.) God bless you. (Applause.) God bless the United States of America. (Applause.)
END
6:15 P.M. (L)
U.S.-New Zealand Arrangement For Cooperation On Nonproliferation Assistance to Kazakhstan
U.S.-New Zealand Arrangement For Cooperation On Nonproliferation Assistance
Bureau of Public Affairs, Office of the Spokesman, US State Dept
Washington, DC, April 7, 2009
Secretary of State Hillary Rodham Clinton and New Zealand Foreign Minister Murray McCully signed on April 7, 2009, an arrangement for cooperation on nonproliferation assistance. This arrangement supports collaborative work between the United States and New Zealand to secure nuclear and radioactive materials that could be used in a nuclear or radiological weapon and to detect and deter illicit trafficking in these materials by improving monitoring capabilities at priority border crossings, airports, and seaports.
Through this arrangement, New Zealand has pledged to provide NZ$685,000 (approximately US$350,000) to support the U.S. Department of Energy’s National Nuclear Security Administration’s Second Line of Defense program in equipping Kazakhstan’s borders with radiation monitors and providing related infrastructure and training. This contribution builds on the success of a similar arrangement signed in May 2007, through which New Zealand contributed similar assistance to help secure Ukraine’s border.
This arrangement reflects the common conviction on the part of the Governments of the United States and New Zealand that nuclear smuggling is a global threat that requires a coordinated, global response. Secretary Clinton and Foreign Minister McCully have agreed to sign this document today because of the high priority that the United States and New Zealand both place on nonproliferation cooperation.
This contribution results from the efforts of the U.S. Government’s Nuclear Smuggling Outreach Initiative (NSOI), a Department of State-led program that also involves the Department of Energy’s National Nuclear Security Administration and several other U.S. agencies. NSOI engages nations most at risk of nuclear smuggling to jointly identify steps to improve their capabilities to combat that threat. NSOI then works with international donors to identify and coordinate funding to help the vulnerable countries address their needs. New Zealand is one of eleven partners that has joined the United States in supporting anti-nuclear smuggling projects through NSOI. For more information on the Nuclear Smuggling Outreach Initiative, go to www.nsoi-state.net.
Bureau of Public Affairs, Office of the Spokesman, US State Dept
Washington, DC, April 7, 2009
Secretary of State Hillary Rodham Clinton and New Zealand Foreign Minister Murray McCully signed on April 7, 2009, an arrangement for cooperation on nonproliferation assistance. This arrangement supports collaborative work between the United States and New Zealand to secure nuclear and radioactive materials that could be used in a nuclear or radiological weapon and to detect and deter illicit trafficking in these materials by improving monitoring capabilities at priority border crossings, airports, and seaports.
Through this arrangement, New Zealand has pledged to provide NZ$685,000 (approximately US$350,000) to support the U.S. Department of Energy’s National Nuclear Security Administration’s Second Line of Defense program in equipping Kazakhstan’s borders with radiation monitors and providing related infrastructure and training. This contribution builds on the success of a similar arrangement signed in May 2007, through which New Zealand contributed similar assistance to help secure Ukraine’s border.
This arrangement reflects the common conviction on the part of the Governments of the United States and New Zealand that nuclear smuggling is a global threat that requires a coordinated, global response. Secretary Clinton and Foreign Minister McCully have agreed to sign this document today because of the high priority that the United States and New Zealand both place on nonproliferation cooperation.
This contribution results from the efforts of the U.S. Government’s Nuclear Smuggling Outreach Initiative (NSOI), a Department of State-led program that also involves the Department of Energy’s National Nuclear Security Administration and several other U.S. agencies. NSOI engages nations most at risk of nuclear smuggling to jointly identify steps to improve their capabilities to combat that threat. NSOI then works with international donors to identify and coordinate funding to help the vulnerable countries address their needs. New Zealand is one of eleven partners that has joined the United States in supporting anti-nuclear smuggling projects through NSOI. For more information on the Nuclear Smuggling Outreach Initiative, go to www.nsoi-state.net.
Conservative: How not to promote democracy in Cuba and at home
How not to promote democracy in Cuba and at home. By Paul Mirengoff
Washington Examiner, Apr 04, 2009
Momentum is growing in Washington for removing the ban on most travel to Cuba and for lifting or lightening other economic sanctions. This is a subject about which reasonable people can disagree. Unfortunately, there appears to be little room for disagreement within the Senate Democratic caucus.
Let’s start with the merits. U.S. sanctions were originally intended to bring down Castro’s revolutionary regime or, alternatively, to marginalize it.
Sanctions failed on the first score, but succeeded on the second. In less than 20 years, Cuba was transformed, even in the left-liberal imagination, from a romantic cutting-edge society to an impoverished backwater. And Castro was never able to “export” his revolution.
This was due primarily to the underlying weakness of Castro’s model, but sanctions probably made a contribution too. Once Cuba was marginalized, however, the case for maintaining the sanctions came to rest on their ability to help actually change Cuba.
In this, sanctions have not succeeded, and there begins the case for lifting or lightening them. Taking the analysis one step further, liberal Democrats contend that Cuban “engagement” with American tourists and American businesses will make the country a more open one and increase internal pressure for reform.
The problem with this approach is that, like sanctions, it has been tried and found wanting. As Sen. Robert Menendez, D-NJ, points out, millions of Europeans, Canadians, Mexicans, and South Americans have visited Cuba, while their nation’s businesses and governments have invested in the Cuban economy and entered into trade agreements. Yet the regime has not opened up.
Unfortunately, the tyrants who control Cuba have the desire and the means to maintain their control. Neither the infliction of more economic pain on the population through sanctions nor the further lining of the tyrants’ pockets through “engagement” will change this.
Maintaining the sanctions nonetheless increases the likelihood of a democratic Cuba. The next generation of Cuban leaders may be less dead set against loosening the government’s hold on society than the old-time totalitarians. If sanctions remain in place, the prospect that they might be lifted provides the new leaders with an incentive to reform. If sanctions have already been removed or substantially reduced, that particular incentive no longer exists.
The Senate Democrats, though, have decided to accommodate the Cuban regime without seeking any political concessions. And they are brooking no dissent from within their caucus.
Menendez is a dissenter. The son of Cuban immigrants, Menendez has forcefully advocated the continuation of sanctions and travel restrictions.
In response, according to The Washington Post, some of Menendez’s Democratic Senate colleagues are questioning whether he should continue to serve as chairman of the Democratic Senatorial Campaign Committee. The Post also reports that some liberal donors have “protested doing business with a man they [believe] is taking outdated positions.”
This reaction is odd. First, President Obama told the Cuban American National Foundation last year that he would “maintain the embargo [of Cuba] as an inducement for democratic change on the island.” Menendez, then, is in hot water for holding an “outdated” position not that different from the Democratic president’s.
Second, the Democrats don’t need Menendez’s vote. They have the support of influential Republican Richard Lugar and other farm-state Republicans looking for new markets.
Finally, Menendez’s main objection does not even go to the merits of the sanctions; he says he just wants an open debate. He fears, however, that his Democratic colleagues will thwart such a debate by radically altering U.S. policy towards Cuba through language smuggled into unrelated legislation.
“A full and open discussion of the real situation in Cuba is timely,” Menendez concedes. All he demands is that “we gather the evidence, bring a wide range of voices to the table, and make careful and thoughtful considerations of their implications.”
This doesn’t seem like too much to ask – unless you’re questioning liberal Democratic orthodoxy.
Ironically, it is the Republican Party that is portrayed in the mainstream media as doctrinaire and monolithic. Yet throughout the Bush administration, the party tolerated defections from Republican Senators.
The dissenting Senators included not just blue state centrists like Susan Collins, Olympia Snowe, and Arlen Specter, but also, for example, John Sununu (on the Patriotic Act), George Voinovich (on John Bolton’s nomination), Lindsey Graham (on treatment of detainee policy), and John McCain (on detainee policy, tax cuts, etc.) Far from being punished, Specter became chairman of the Senate Judiciary Committee. McCain became the Republican nominee for president.
As a minority party, the Democrats too were reasonably tolerant of dissent, at least on the part of members of Congress from red states or congressional districts. But now that they are in power, and racing to implement a leftist agenda, their acceptance of dissent seems diminished.
The main culprit appears to be the left-wing interest groups that help float the party. As noted above, “liberal donors” say they are reluctant to do business with Menendez due to his “outdated” views about Cuba. And Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee, says he is working to dissuade liberal interest groups from raising money to finance challenges to centrist Democrats.
How the Democrats resolve this matter is their business. But the Party’s aversion to full and open legislative debate should concern all Americans.
Menendez’s fear that the Senate leadership will limit or prevent debate on altering U.S. policy towards Cuba is well-founded. Earlier this year, the Democrats pushed through a trillion dollar stimulus package without hearings, and on a timetable so short that members could not read the legislation before voting on it. Marching in lockstep, every Democratic Senator voted for the legislation without really knowing its contents.
Reasoned debate is not possible when members do not know what they are debating. Neither is responsible legislating.
By limiting public debate and discouraging even internal debate, the Democratic Party shows itself to be increasingly less democratic.
Paul Mirengoff is a lawyer in Washington, D.C., and a principal author of Powerlineblog.com.
Washington Examiner, Apr 04, 2009
Momentum is growing in Washington for removing the ban on most travel to Cuba and for lifting or lightening other economic sanctions. This is a subject about which reasonable people can disagree. Unfortunately, there appears to be little room for disagreement within the Senate Democratic caucus.
Let’s start with the merits. U.S. sanctions were originally intended to bring down Castro’s revolutionary regime or, alternatively, to marginalize it.
Sanctions failed on the first score, but succeeded on the second. In less than 20 years, Cuba was transformed, even in the left-liberal imagination, from a romantic cutting-edge society to an impoverished backwater. And Castro was never able to “export” his revolution.
This was due primarily to the underlying weakness of Castro’s model, but sanctions probably made a contribution too. Once Cuba was marginalized, however, the case for maintaining the sanctions came to rest on their ability to help actually change Cuba.
In this, sanctions have not succeeded, and there begins the case for lifting or lightening them. Taking the analysis one step further, liberal Democrats contend that Cuban “engagement” with American tourists and American businesses will make the country a more open one and increase internal pressure for reform.
The problem with this approach is that, like sanctions, it has been tried and found wanting. As Sen. Robert Menendez, D-NJ, points out, millions of Europeans, Canadians, Mexicans, and South Americans have visited Cuba, while their nation’s businesses and governments have invested in the Cuban economy and entered into trade agreements. Yet the regime has not opened up.
Unfortunately, the tyrants who control Cuba have the desire and the means to maintain their control. Neither the infliction of more economic pain on the population through sanctions nor the further lining of the tyrants’ pockets through “engagement” will change this.
Maintaining the sanctions nonetheless increases the likelihood of a democratic Cuba. The next generation of Cuban leaders may be less dead set against loosening the government’s hold on society than the old-time totalitarians. If sanctions remain in place, the prospect that they might be lifted provides the new leaders with an incentive to reform. If sanctions have already been removed or substantially reduced, that particular incentive no longer exists.
The Senate Democrats, though, have decided to accommodate the Cuban regime without seeking any political concessions. And they are brooking no dissent from within their caucus.
Menendez is a dissenter. The son of Cuban immigrants, Menendez has forcefully advocated the continuation of sanctions and travel restrictions.
In response, according to The Washington Post, some of Menendez’s Democratic Senate colleagues are questioning whether he should continue to serve as chairman of the Democratic Senatorial Campaign Committee. The Post also reports that some liberal donors have “protested doing business with a man they [believe] is taking outdated positions.”
This reaction is odd. First, President Obama told the Cuban American National Foundation last year that he would “maintain the embargo [of Cuba] as an inducement for democratic change on the island.” Menendez, then, is in hot water for holding an “outdated” position not that different from the Democratic president’s.
Second, the Democrats don’t need Menendez’s vote. They have the support of influential Republican Richard Lugar and other farm-state Republicans looking for new markets.
Finally, Menendez’s main objection does not even go to the merits of the sanctions; he says he just wants an open debate. He fears, however, that his Democratic colleagues will thwart such a debate by radically altering U.S. policy towards Cuba through language smuggled into unrelated legislation.
“A full and open discussion of the real situation in Cuba is timely,” Menendez concedes. All he demands is that “we gather the evidence, bring a wide range of voices to the table, and make careful and thoughtful considerations of their implications.”
This doesn’t seem like too much to ask – unless you’re questioning liberal Democratic orthodoxy.
Ironically, it is the Republican Party that is portrayed in the mainstream media as doctrinaire and monolithic. Yet throughout the Bush administration, the party tolerated defections from Republican Senators.
The dissenting Senators included not just blue state centrists like Susan Collins, Olympia Snowe, and Arlen Specter, but also, for example, John Sununu (on the Patriotic Act), George Voinovich (on John Bolton’s nomination), Lindsey Graham (on treatment of detainee policy), and John McCain (on detainee policy, tax cuts, etc.) Far from being punished, Specter became chairman of the Senate Judiciary Committee. McCain became the Republican nominee for president.
As a minority party, the Democrats too were reasonably tolerant of dissent, at least on the part of members of Congress from red states or congressional districts. But now that they are in power, and racing to implement a leftist agenda, their acceptance of dissent seems diminished.
The main culprit appears to be the left-wing interest groups that help float the party. As noted above, “liberal donors” say they are reluctant to do business with Menendez due to his “outdated” views about Cuba. And Rep. Chris Van Hollen, chairman of the Democratic Congressional Campaign Committee, says he is working to dissuade liberal interest groups from raising money to finance challenges to centrist Democrats.
How the Democrats resolve this matter is their business. But the Party’s aversion to full and open legislative debate should concern all Americans.
Menendez’s fear that the Senate leadership will limit or prevent debate on altering U.S. policy towards Cuba is well-founded. Earlier this year, the Democrats pushed through a trillion dollar stimulus package without hearings, and on a timetable so short that members could not read the legislation before voting on it. Marching in lockstep, every Democratic Senator voted for the legislation without really knowing its contents.
Reasoned debate is not possible when members do not know what they are debating. Neither is responsible legislating.
By limiting public debate and discouraging even internal debate, the Democratic Party shows itself to be increasingly less democratic.
Paul Mirengoff is a lawyer in Washington, D.C., and a principal author of Powerlineblog.com.
The Supreme Court of Iowa’s decision to redefine marriage abandons reason and replaces it with feelings as the standard of public consensus
Law, Feelings, and Religion at the Bar in Iowa, by Matthew J. Franck
The Supreme Court of Iowa’s decision to redefine marriage abandons reason and replaces it with feelings as the standard of public consensus.
April 07, 2009
What happens when judicial arrogance becomes so habitual as to become second nature? This past Friday, April 3, the Supreme Court of Iowa provided an answer: judicial arrogance transforms into smug self-deception. This is not the question the court thought it was answering. It claimed to be addressing the question of whether “exclusion of a class of Iowans from civil marriage”—namely the “class” of “gay and lesbian people” who wish to marry others of the same sex—can be justified by the state. But the opinion for a unanimous court in Varnum v. Brien, written by Justice Mark Cady, actually says very little about matters of such justification. By contrast, it speaks volumes about the extent to which American judicial power, having burst free of all constraints, is now in the grip of a banal routinization of tyranny so complete that the tyrants do not recognize their own character as they blandly overturn many centuries of civilization in a day’s work.
The evidence of this “banality of tyranny” (to paraphrase Hannah Arendt) is littered throughout Justice Cady’s opinion. We might point to the court’s blithe unconcern for the actual words of the Iowa constitution, which receive no real analysis at all. We might note, as has legal scholar Robert F. Nagel, that the opinion is full of “clunking vocabulary” and “painfully labored analysis” about whether the statute under challenge is subject to the “rational basis test” or to “strict scrutiny” or to something in between called “intermediate scrutiny.” We might remark on the relentless question-begging and the abrupt ipse dixits that drive the court’s choice of the third of these “levels of analysis” and create a simulacrum of reasoning on the part of judges whose minds were clearly made up before any “analysis” was undertaken. We might say something about the bad faith the judges show their fellow Iowans, whose tolerant attitudes about homosexuality, expressed in previous public policy decisions, are exploited to push their state into a brave new world they continue to resist. Or we might join others who have gasped incredulously at the court’s rejection of any argument for the natural family as the best setting for child-rearing as a mere “stereotype” (and this in a dismissive footnote, no less).
We could broaden the discussion to consider the Iowa supreme court’s general impression of its relationship to its state constitution and to the people for whom and by whom it was made. More than once, Justice Cady’s opinion actually cites the undoubted prospect of failure for the cause of same-sex marriage in Iowa’s democratic institutions as a justification for the court’s intervention on the cause’s behalf on allegedly constitutional grounds. The judges, you see, are “free from the influences that tend to make society’s understanding of equal protection resistant to change.” And so when he follows the lead of the U.S. Supreme Court’s 2003 Lawrence v. Texas ruling (overturning a state law criminalizing sodomy), claiming that “the standards of each generation” are the touchstone for understanding what the Constitution says about equality, we know perfectly well that Cady does not mean that democratic majorities will be consulted for discerning what those standards are. No, “a new understanding of equal protection is achieved” whenever the judges say a new thing on the subject. Adorning the opinion with the standard insincere pledge of a “keen and respectful understanding” of separation of powers that is employed by all judicial activists, Cady all but admits that the Iowa supreme court has just amended the state constitution. This is easily done illegitimately by the judiciary, but is a very hard thing for Iowans themselves to do legitimately through the prescribed amendment process. Cady knows this too, remarking that the people can “shape it over time,” while silently passing over the fact that the judiciary can do it in a few minutes on a Friday morning.
We could talk about all these matters at length, but let us instead consider something else in this “legal astonisher” (to borrow Abraham Lincoln’s description of the Dred Scott case). Let us examine the state supreme court’s peculiar view of the role of moral reasoning in legal decision-making, and of the sources of moral principles.
Choosing, as it does, the standard of “intermediate scrutiny” to test the validity of Iowa’s 1998 marriage-protective statute, the court puts the burden of justification on the state. This maneuver masks the essential weakness of the argument for same-sex marriage, which comes finally to this: because some persons are “sexually and romantically attracted to members of their own sex,” and because some of those persons have entered into “committed and loving relationships” with each other, they are entitled to “the personal and public affirmation that accompanies marriage.”
From this vantage point, the feelings individuals have for one another are the authoritative wellspring of moral principle. Now, only a great fool would deny the connection of love and marriage—they go together like a horse and carriage, as Frank Sinatra famously sang. But emotion and desire, without more, are a treacherous foundation for law and public policy. As Pascal remarked, the heart has its reasons of which reason knows nothing. From society’s vantage point, that’s not good enough. Marriage and family are a moral institution—the teacher of right conduct between the sexes, the school of morality for the young, the founding scene of our moral obligations, the refuge from a wider world where respect for those obligations is a much chancier proposition. These may sound like lofty ideals often unrealized, but that both is the point and is beside the point. Society has an interest—none of its interests is higher—in encouraging the successful formation of marriages and families that point by their nature toward the achievement of these ideals. Within the metes and bounds of the law that expresses society’s conclusions about these matters, the rest is up to us.
Hence it is essential that public policy on marriage turn from love, and from lovers’ felt need for “affirmation,” to consider what reasons can be given for this or that way of arranging the family that makes a claim on our attention. Are all “relationships” created equal? Are all of them equally conducive to human flourishing? Is every way of bringing children into the world, or of rearing them, equally deserving of “affirmation”? How many men and/or women does it take to make a marriage that will perform the functions we want marriage to perform? Are children best prepared for healthy, responsible adult lives with both a mother and a father? Natural or “step-” or adopted? With a mother and a father or with “parents”? How many of each?
The laws of marriage and family, of divorce and custody, are efforts to address such questions rationally, if necessarily imperfectly, with the moral health of each party concerned being something to be optimized to the greatest extent possible. In the nature of things, someone’s preferred notion of a “relationship” that needs “affirming” is always going to be left outside the moral pale, or so one would have thought until now. But on the Iowa court, all such questions, answered slowly and haltingly by G.K. Chesterton’s democracy of the dead, the living, and the yet-unborn—otherwise known as “tradition”—are swept aside by the judges’ solicitude for the “excluded” whose self-esteem is wounded. When desire becomes the foundation for a right, beware. Nothing in what passes for reasoning in Justice Cady’s opinion can stand against the next claimant—perhaps the polygamist—who presents himself as needing affirmation for his relationships. This is not a slippery slope we have before us. It is the sight of a levee breaking in a spring flood.
The Iowa court itself presents an alternative to a feelings-based moral reasoning in the final pages of the Varnum opinion. But it presents that alternative in the most thuggish and intellectually dishonest way. Turning to an argument that was not even made by the county officials defending their duty under Iowa law (and thus should not have been discussed by the court at all), Justice Cady imputes to the state legislature a covert motive behind its marriage-protective statute of 1998: “religious opposition to same-sex marriage.” This is what’s really going on: “religious sentiment most likely motivates many, if not most, opponents of same-sex civil marriage.” But this, Cady argues, is constitutionally objectionable for the following reasons: first, there are different religious opinions, some opposing but others approving of same-sex marriage; second, the state government is forbidden to choose between rival religious beliefs; and third, “[s]tate government can have no religious views, either directly or indirectly, expressed through its legislation. . . . This proposition is the essence of the separation of church and state.”
Justice Cady seems not to notice that, by ruling in favor of same-sex marriage, he and his fellow judges, by his own reasoning, have placed the state in the position of endorsing those religious views that approve of same-sex marriage. But that observation only scratches the surface of an argument that is—well, come to think of it—all surface. For the unanimous Iowa court appears incapable of entertaining the most elementary distinction between matters of theology, faith, and worship, on the one hand, and matters of moral reasoning springing from religious conviction on the other. What the opinion calls “religious opposition to same-sex marriage” would more accurately be described as “moral opposition to same-sex marriage springing from religious sources.” It would not go too far to say that religion is the true wellspring of moral thought and action in our civilization. Our own Declaration of Independence—source of what Lincoln called “our ancient faith”—calls upon the Creator as the giver of all our fundamental rights.
Because of the diversity of religious commitments in our society—and because it violates our constitutional morality, and no little part of our dominant religious morality, for anyone to be coerced in matters of faith and practice—we must express our moral opinions to one another in a shared language of reasons and arguments. This does not and cannot mean that the connection of our moral arguments to our religious sentiments is severed when we meet in the public square. But when all the arguments have been aired out, the moral view that prevails at the ballot box and in the legislative halls is entitled to have its way in public policy, barring any explicit constitutional obstacles to its enactment. The “separation of church and state” is not one of those obstacles. If it were, no law with any moral purpose that happened to coincide with the view of any religious community could ever be upheld.
All of this escapes the Iowa justices, whose view seems to be that if a moral argument finds support in any religious commitment, then the promulgation of that argument in law is a violation of the principle of religious disestablishment. This is logically fallacious, historically illiterate, and politically brutish. Recall that juxtaposed with this unremitting hostility to religiously-supported morality is an embrace of the morality of desire. Yet in the Iowa court’s view, religion is itself reduced to mere “feeling,” and so the justices wind up incoherently privileging one kind of feeling over another. Those who desire to marry win out over those who desire to “exclude” them from marrying, and that’s that.
Lost from view is the true ground of our common public morality: reasoned judgment about the natures of things and the good of human persons, families, and communities. About such matters, religion can be instructive (to say the least), while a mere desire to “affirm” our “relationships” cannot be. And so, in both its reductive approach to religion and its empty invocations of feelings, the Iowa Supreme Court has done an injustice to religion, to the possibility of lawful public morality, and—yes—to our relationships themselves.
Matthew J. Franck is professor and chairman of political science at Radford University and a visiting fellow in the James Madison Program at Princeton University.
The Supreme Court of Iowa’s decision to redefine marriage abandons reason and replaces it with feelings as the standard of public consensus.
April 07, 2009
What happens when judicial arrogance becomes so habitual as to become second nature? This past Friday, April 3, the Supreme Court of Iowa provided an answer: judicial arrogance transforms into smug self-deception. This is not the question the court thought it was answering. It claimed to be addressing the question of whether “exclusion of a class of Iowans from civil marriage”—namely the “class” of “gay and lesbian people” who wish to marry others of the same sex—can be justified by the state. But the opinion for a unanimous court in Varnum v. Brien, written by Justice Mark Cady, actually says very little about matters of such justification. By contrast, it speaks volumes about the extent to which American judicial power, having burst free of all constraints, is now in the grip of a banal routinization of tyranny so complete that the tyrants do not recognize their own character as they blandly overturn many centuries of civilization in a day’s work.
The evidence of this “banality of tyranny” (to paraphrase Hannah Arendt) is littered throughout Justice Cady’s opinion. We might point to the court’s blithe unconcern for the actual words of the Iowa constitution, which receive no real analysis at all. We might note, as has legal scholar Robert F. Nagel, that the opinion is full of “clunking vocabulary” and “painfully labored analysis” about whether the statute under challenge is subject to the “rational basis test” or to “strict scrutiny” or to something in between called “intermediate scrutiny.” We might remark on the relentless question-begging and the abrupt ipse dixits that drive the court’s choice of the third of these “levels of analysis” and create a simulacrum of reasoning on the part of judges whose minds were clearly made up before any “analysis” was undertaken. We might say something about the bad faith the judges show their fellow Iowans, whose tolerant attitudes about homosexuality, expressed in previous public policy decisions, are exploited to push their state into a brave new world they continue to resist. Or we might join others who have gasped incredulously at the court’s rejection of any argument for the natural family as the best setting for child-rearing as a mere “stereotype” (and this in a dismissive footnote, no less).
We could broaden the discussion to consider the Iowa supreme court’s general impression of its relationship to its state constitution and to the people for whom and by whom it was made. More than once, Justice Cady’s opinion actually cites the undoubted prospect of failure for the cause of same-sex marriage in Iowa’s democratic institutions as a justification for the court’s intervention on the cause’s behalf on allegedly constitutional grounds. The judges, you see, are “free from the influences that tend to make society’s understanding of equal protection resistant to change.” And so when he follows the lead of the U.S. Supreme Court’s 2003 Lawrence v. Texas ruling (overturning a state law criminalizing sodomy), claiming that “the standards of each generation” are the touchstone for understanding what the Constitution says about equality, we know perfectly well that Cady does not mean that democratic majorities will be consulted for discerning what those standards are. No, “a new understanding of equal protection is achieved” whenever the judges say a new thing on the subject. Adorning the opinion with the standard insincere pledge of a “keen and respectful understanding” of separation of powers that is employed by all judicial activists, Cady all but admits that the Iowa supreme court has just amended the state constitution. This is easily done illegitimately by the judiciary, but is a very hard thing for Iowans themselves to do legitimately through the prescribed amendment process. Cady knows this too, remarking that the people can “shape it over time,” while silently passing over the fact that the judiciary can do it in a few minutes on a Friday morning.
We could talk about all these matters at length, but let us instead consider something else in this “legal astonisher” (to borrow Abraham Lincoln’s description of the Dred Scott case). Let us examine the state supreme court’s peculiar view of the role of moral reasoning in legal decision-making, and of the sources of moral principles.
Choosing, as it does, the standard of “intermediate scrutiny” to test the validity of Iowa’s 1998 marriage-protective statute, the court puts the burden of justification on the state. This maneuver masks the essential weakness of the argument for same-sex marriage, which comes finally to this: because some persons are “sexually and romantically attracted to members of their own sex,” and because some of those persons have entered into “committed and loving relationships” with each other, they are entitled to “the personal and public affirmation that accompanies marriage.”
From this vantage point, the feelings individuals have for one another are the authoritative wellspring of moral principle. Now, only a great fool would deny the connection of love and marriage—they go together like a horse and carriage, as Frank Sinatra famously sang. But emotion and desire, without more, are a treacherous foundation for law and public policy. As Pascal remarked, the heart has its reasons of which reason knows nothing. From society’s vantage point, that’s not good enough. Marriage and family are a moral institution—the teacher of right conduct between the sexes, the school of morality for the young, the founding scene of our moral obligations, the refuge from a wider world where respect for those obligations is a much chancier proposition. These may sound like lofty ideals often unrealized, but that both is the point and is beside the point. Society has an interest—none of its interests is higher—in encouraging the successful formation of marriages and families that point by their nature toward the achievement of these ideals. Within the metes and bounds of the law that expresses society’s conclusions about these matters, the rest is up to us.
Hence it is essential that public policy on marriage turn from love, and from lovers’ felt need for “affirmation,” to consider what reasons can be given for this or that way of arranging the family that makes a claim on our attention. Are all “relationships” created equal? Are all of them equally conducive to human flourishing? Is every way of bringing children into the world, or of rearing them, equally deserving of “affirmation”? How many men and/or women does it take to make a marriage that will perform the functions we want marriage to perform? Are children best prepared for healthy, responsible adult lives with both a mother and a father? Natural or “step-” or adopted? With a mother and a father or with “parents”? How many of each?
The laws of marriage and family, of divorce and custody, are efforts to address such questions rationally, if necessarily imperfectly, with the moral health of each party concerned being something to be optimized to the greatest extent possible. In the nature of things, someone’s preferred notion of a “relationship” that needs “affirming” is always going to be left outside the moral pale, or so one would have thought until now. But on the Iowa court, all such questions, answered slowly and haltingly by G.K. Chesterton’s democracy of the dead, the living, and the yet-unborn—otherwise known as “tradition”—are swept aside by the judges’ solicitude for the “excluded” whose self-esteem is wounded. When desire becomes the foundation for a right, beware. Nothing in what passes for reasoning in Justice Cady’s opinion can stand against the next claimant—perhaps the polygamist—who presents himself as needing affirmation for his relationships. This is not a slippery slope we have before us. It is the sight of a levee breaking in a spring flood.
The Iowa court itself presents an alternative to a feelings-based moral reasoning in the final pages of the Varnum opinion. But it presents that alternative in the most thuggish and intellectually dishonest way. Turning to an argument that was not even made by the county officials defending their duty under Iowa law (and thus should not have been discussed by the court at all), Justice Cady imputes to the state legislature a covert motive behind its marriage-protective statute of 1998: “religious opposition to same-sex marriage.” This is what’s really going on: “religious sentiment most likely motivates many, if not most, opponents of same-sex civil marriage.” But this, Cady argues, is constitutionally objectionable for the following reasons: first, there are different religious opinions, some opposing but others approving of same-sex marriage; second, the state government is forbidden to choose between rival religious beliefs; and third, “[s]tate government can have no religious views, either directly or indirectly, expressed through its legislation. . . . This proposition is the essence of the separation of church and state.”
Justice Cady seems not to notice that, by ruling in favor of same-sex marriage, he and his fellow judges, by his own reasoning, have placed the state in the position of endorsing those religious views that approve of same-sex marriage. But that observation only scratches the surface of an argument that is—well, come to think of it—all surface. For the unanimous Iowa court appears incapable of entertaining the most elementary distinction between matters of theology, faith, and worship, on the one hand, and matters of moral reasoning springing from religious conviction on the other. What the opinion calls “religious opposition to same-sex marriage” would more accurately be described as “moral opposition to same-sex marriage springing from religious sources.” It would not go too far to say that religion is the true wellspring of moral thought and action in our civilization. Our own Declaration of Independence—source of what Lincoln called “our ancient faith”—calls upon the Creator as the giver of all our fundamental rights.
Because of the diversity of religious commitments in our society—and because it violates our constitutional morality, and no little part of our dominant religious morality, for anyone to be coerced in matters of faith and practice—we must express our moral opinions to one another in a shared language of reasons and arguments. This does not and cannot mean that the connection of our moral arguments to our religious sentiments is severed when we meet in the public square. But when all the arguments have been aired out, the moral view that prevails at the ballot box and in the legislative halls is entitled to have its way in public policy, barring any explicit constitutional obstacles to its enactment. The “separation of church and state” is not one of those obstacles. If it were, no law with any moral purpose that happened to coincide with the view of any religious community could ever be upheld.
All of this escapes the Iowa justices, whose view seems to be that if a moral argument finds support in any religious commitment, then the promulgation of that argument in law is a violation of the principle of religious disestablishment. This is logically fallacious, historically illiterate, and politically brutish. Recall that juxtaposed with this unremitting hostility to religiously-supported morality is an embrace of the morality of desire. Yet in the Iowa court’s view, religion is itself reduced to mere “feeling,” and so the justices wind up incoherently privileging one kind of feeling over another. Those who desire to marry win out over those who desire to “exclude” them from marrying, and that’s that.
Lost from view is the true ground of our common public morality: reasoned judgment about the natures of things and the good of human persons, families, and communities. About such matters, religion can be instructive (to say the least), while a mere desire to “affirm” our “relationships” cannot be. And so, in both its reductive approach to religion and its empty invocations of feelings, the Iowa Supreme Court has done an injustice to religion, to the possibility of lawful public morality, and—yes—to our relationships themselves.
Matthew J. Franck is professor and chairman of political science at Radford University and a visiting fellow in the James Madison Program at Princeton University.
WSJ Editorial: The Silicosis Abdication
The Silicosis Abdication. WSJ Editorial
A scam that deserves as much scrutiny as Lerach and Scruggs.
WSJ, Apr 07, 2009
It is going on four years since a Texas judge blew the whistle on widespread silicosis fraud, exposing a ring of doctors and lawyers who ginned up phony litigation to reap jackpot payouts. So where's the enforcement follow-up?
That's an especially apt question given news that New York's State Board for Professional Medical Conduct has finally revoked the license of Dr. Ray Harron. He was among the doctors who Texas Judge Janis Graham Jack showed had fraudulently diagnosed thousands of plaintiffs with silicosis, a rare lung disease. These doctors were later called to testify in Congress, where many, including Dr. Harron, took the Fifth Amendment.
Dr. Harron has since lost his medical licenses in California, New Mexico, Texas, Florida, North Carolina and Mississippi. This is progress, though hardly sufficient. Among the questions Congress asked state departments of health during the silicosis hearings were why those bodies hadn't moved to shut down these doctors and their mobile X-ray vans at the time they were committing medical malpractice.
New York is belatedly joining the queue, and its order stripping Dr. Harron of his license is particularly noteworthy. After outlining his unethical actions, and citing other medical boards that had denied him a new license, it summarized: "[Dr. Harron] was part of an operation to find plaintiffs with silicosis whether or not they really had silicosis. This is perpetrating a fraud on the courts."
Precisely. The question is what anybody else is doing about it. Judge Jack's findings inspired U.S. attorneys in the Southern District of New York to convene a grand jury investigation into silicosis fraud. The criminal division of the Texas state attorney general also went this route. We know both juries subpoenaed doctors and documents involved in the Jack case. While these physicians bear responsibility for negligent medical practices, the Jack trial and Congressional hearings made clear that many were taking orders from the trial bar. Dr. Harron has stated in court that he "capitulated" to attorney demands that he include inaccurate language in his silicosis reports.
Yet these grand juries have yet to result in prosecutions. The feds and Texas aside, it would seem incumbent upon New York State Attorney General Andrew Cuomo to follow up on his own state medical board's determination of fraud. A follow-up is especially important given that, prior to their silicosis escapade, these doctors made millions working for trial attorneys on asbestos. According to the Johns Manville Bankruptcy Trust, six of the doctors at the center of the silicosis fraud were also responsible for at least 140,000 asbestos-lawsuit diagnoses. Dr. Harron alone diagnosed an astonishing 51,048 people with asbestos-related disease.
The silicosis litigation machine broke down after Judge Jack's ruling, yet hundreds of thousands of phony asbestos-related diagnoses continue to clog courts. An Ohio state court in 2006 dismissed all cases that relied solely on Dr. Harron, and a federal court in Philadelphia recently did the same. But with medical boards now admitting these doctors were at the center of silicosis schemes to defraud courts, prosecutors ought to pursue their role in asbestos too.
The silicosis and asbestos scams are as corrosive to justice in their way as the cases that resulted in convictions for Bill Lerach, Dickie Scruggs and Melvyn Weiss for kickbacks or bribery. The difference is that these asbestos cases are still in court.
A scam that deserves as much scrutiny as Lerach and Scruggs.
WSJ, Apr 07, 2009
It is going on four years since a Texas judge blew the whistle on widespread silicosis fraud, exposing a ring of doctors and lawyers who ginned up phony litigation to reap jackpot payouts. So where's the enforcement follow-up?
That's an especially apt question given news that New York's State Board for Professional Medical Conduct has finally revoked the license of Dr. Ray Harron. He was among the doctors who Texas Judge Janis Graham Jack showed had fraudulently diagnosed thousands of plaintiffs with silicosis, a rare lung disease. These doctors were later called to testify in Congress, where many, including Dr. Harron, took the Fifth Amendment.
Dr. Harron has since lost his medical licenses in California, New Mexico, Texas, Florida, North Carolina and Mississippi. This is progress, though hardly sufficient. Among the questions Congress asked state departments of health during the silicosis hearings were why those bodies hadn't moved to shut down these doctors and their mobile X-ray vans at the time they were committing medical malpractice.
New York is belatedly joining the queue, and its order stripping Dr. Harron of his license is particularly noteworthy. After outlining his unethical actions, and citing other medical boards that had denied him a new license, it summarized: "[Dr. Harron] was part of an operation to find plaintiffs with silicosis whether or not they really had silicosis. This is perpetrating a fraud on the courts."
Precisely. The question is what anybody else is doing about it. Judge Jack's findings inspired U.S. attorneys in the Southern District of New York to convene a grand jury investigation into silicosis fraud. The criminal division of the Texas state attorney general also went this route. We know both juries subpoenaed doctors and documents involved in the Jack case. While these physicians bear responsibility for negligent medical practices, the Jack trial and Congressional hearings made clear that many were taking orders from the trial bar. Dr. Harron has stated in court that he "capitulated" to attorney demands that he include inaccurate language in his silicosis reports.
Yet these grand juries have yet to result in prosecutions. The feds and Texas aside, it would seem incumbent upon New York State Attorney General Andrew Cuomo to follow up on his own state medical board's determination of fraud. A follow-up is especially important given that, prior to their silicosis escapade, these doctors made millions working for trial attorneys on asbestos. According to the Johns Manville Bankruptcy Trust, six of the doctors at the center of the silicosis fraud were also responsible for at least 140,000 asbestos-lawsuit diagnoses. Dr. Harron alone diagnosed an astonishing 51,048 people with asbestos-related disease.
The silicosis litigation machine broke down after Judge Jack's ruling, yet hundreds of thousands of phony asbestos-related diagnoses continue to clog courts. An Ohio state court in 2006 dismissed all cases that relied solely on Dr. Harron, and a federal court in Philadelphia recently did the same. But with medical boards now admitting these doctors were at the center of silicosis schemes to defraud courts, prosecutors ought to pursue their role in asbestos too.
The silicosis and asbestos scams are as corrosive to justice in their way as the cases that resulted in convictions for Bill Lerach, Dickie Scruggs and Melvyn Weiss for kickbacks or bribery. The difference is that these asbestos cases are still in court.
An Idea for Mr. Summers: He could pay higher taxes—if he thought that was right
An Idea for Mr. Summers. WSJ Editorial
He could pay higher taxes—if he thought that was right.
WSJ, Apr 07, 2009
Larry Summers, the White House economic guru, is taking some hits from the left after his official disclosure forms revealed late last week that he got rich thanks to the financial industry he is now charged with reviving and reregulating.
The appearance-of-a-conflict-of-interest crowd isn't happy that Mr. Summers earned $5.2 million last year working for the beneficent hedge fund, D. E. Shaw & Co. He also made a bundle in speaking fees, including $135,000 for a single appearance for Goldman Sachs. That must have been some stemwinder, though we're confident Goldman figures it didn't overpay given Mr. Summers's later White House prominence.
We've got nothing against getting rich, though it is worth noting that Mr. Summers will pay Bush-era tax rates on his Wall Street windfall profit. So if the man who would still like to be Federal Reserve Chairman is looking to make a gesture of political solidarity with the middle-class masses, here's an idea: Honor your principles, and pay taxes on that income at Bill Clinton-Barack Obama rates.
Mr. Summers could simply calculate his taxes for 2008 based on what he'd pay if President Obama's tax proposals had been law. Thus his top marginal income tax rate would rise from 35% to 39.6%, plus the phase outs in deductions and exemptions, which would make the rate roughly 41.6%. Mr. Summers could write a check to the IRS for the difference. And of course he wouldn't forget to deduct any charitable giving at only 28 cents on the dollar, rather than 35 or 41.6 cents.
Mr. Obama likes to say it's the "era of responsibility," and if that's true then we assume Mr. Summers will want to lead by example.
He could pay higher taxes—if he thought that was right.
WSJ, Apr 07, 2009
Larry Summers, the White House economic guru, is taking some hits from the left after his official disclosure forms revealed late last week that he got rich thanks to the financial industry he is now charged with reviving and reregulating.
The appearance-of-a-conflict-of-interest crowd isn't happy that Mr. Summers earned $5.2 million last year working for the beneficent hedge fund, D. E. Shaw & Co. He also made a bundle in speaking fees, including $135,000 for a single appearance for Goldman Sachs. That must have been some stemwinder, though we're confident Goldman figures it didn't overpay given Mr. Summers's later White House prominence.
We've got nothing against getting rich, though it is worth noting that Mr. Summers will pay Bush-era tax rates on his Wall Street windfall profit. So if the man who would still like to be Federal Reserve Chairman is looking to make a gesture of political solidarity with the middle-class masses, here's an idea: Honor your principles, and pay taxes on that income at Bill Clinton-Barack Obama rates.
Mr. Summers could simply calculate his taxes for 2008 based on what he'd pay if President Obama's tax proposals had been law. Thus his top marginal income tax rate would rise from 35% to 39.6%, plus the phase outs in deductions and exemptions, which would make the rate roughly 41.6%. Mr. Summers could write a check to the IRS for the difference. And of course he wouldn't forget to deduct any charitable giving at only 28 cents on the dollar, rather than 35 or 41.6 cents.
Mr. Obama likes to say it's the "era of responsibility," and if that's true then we assume Mr. Summers will want to lead by example.
Tobacco cessation therapies, cell phone towers, &c.
ACSH Dispatches Round-Up: Tobacco cessation therapies, cell phone towers, &c. By Elizabeth Wade
ACSH, Apr 04, 2009
April 3, 2009
Congress's Pro-Smoking Bill and Anti-Book Law, plus Radiation Hysteria
Quitting smoking just got harder
A story about a study concluding that smokers who use nicotine replacement therapy are twice as likely to quit for six months than those who were given placebos reminds us of the dire straits we are in with regard to tobacco cessation therapy. What isn't reported until the end of the news story is that only 6.75% of the smokers given the nicotine replacement therapy managed to quit for six months -- and only half of them are expected to remain smoke-free in the future.
"These abysmal quit rates show that our current smoking cessation therapies are almost never effective," says ACSH's Dr. Gilbert Ross. "People who close their eyes to alternative cessation therapies, such as smokeless tobacco as harm reduction, are being ostriches at the expense of the over 40 million addicted smokers in this country -- and who knows how many millions around the world."
Unfortunately, the U.S. took a step in the wrong direction yesterday when the House of Representatives passed the Kennedy-Waxman bill giving the FDA regulatory control of tobacco and defeated Rep. Steven Buyer's (R-IN) harm reduction amendment in a 284-142 vote. Lawmakers expect a tighter vote in the Senate, and ACSH looks forward to offering our science-based perspective to the continuing debate. We wholeheartedly agree with Rep. Buyer when he says, "Effectively giving an FDA stamp of approval on cigarettes will improperly lead people to believe that these products are safe, and they really aren't. We want to move people from smoking down the continuum of risk to eventually quitting."
The current battle over the e-cigarette illustrates the problems with our country's approach to tobacco policy. The e-cigarette delivers a hit of nicotine vapor when a person "smokes" it, so smokers who are trying to quit can satisfy their craving without inhaling the harmful products of combustion produced by cigarettes. But because the FDA has yet to approve the e-cigarette as a nicotine-delivery device, this new technology could be banned until it undergoes the approval process. "You can't blame the FDA for enforcing the law, but we have bad laws about tobacco that lead to bad public policy outcomes," says ACSH's Jeff Stier.
Attack of the cell phone towers!
A group of Staten Island parents and lawmakers are up in arms about the possibility of cell phone towers sending low-level radiation into a nearby school. "When they traced the source of radiation, which was above average but not dangerous, they found that it wasn't connected to the cell phone towers at all," Dr. Ross remarks. "But they are still trying to get them removed!"
Dr. Whelan adds, "When people believe scares like this they become totally irrational. When they really believe that these towers are emitting dangerous levels of radiation, how do you convince them otherwise?"
Dr. Ross jokes, "The only way to appease them seems to be getting all the students at this school metal helmets." ACSH debunked the wrongheaded notion that cell phones cause brain cancer in our Top 10 Unfounded Health Scares of 2008. For more information, see our publication The Health Effects of Low-Level Radiation.
CPSIA remains intact, Prop 65 grows even more ridiculous
Unfortunately, the Senate rejected Senator Jim DeMint's (R-SC) amendment to the stimulus bill that would have reformed the Consumer Product Safety Improvement Act (CPSIA). "The Senate failed to take a breath of fresh air," Stier says. As we have written before, the CPSIA places an impossible burden on many small businesses by banning certain types of phthalates and requiring that every children's product be tested for minuscule levels of lead. If a business can't afford the expensive testing, it must throw out the products -- even all-terrain vehicles (ATVs) and children's books!
As summarized so succinctly in today's Wall Street Journal editorial, "With one stroke of the regulatory pen, an estimated $100 million of inventory can't be sold, and the industry loss may reach $1 billion."
In California, we see the results of another absurdly stringent "public health" measure, Proposition 65, which requires warnings to accompany any product that contains "toxic chemicals." To avoid lawsuits, businesses in the state have taken to posting frivolous "warning signs" about products that do not pose any danger to consumers' health.
"Prop 65 is not based on health or science, but rather perceptions and politics," Dr. Ross says. For more on the consequences of the misguided law, check out Stier's op-ed "Perils of Global Warnings" from the Washington Times.
ACSH, Apr 04, 2009
April 3, 2009
Congress's Pro-Smoking Bill and Anti-Book Law, plus Radiation Hysteria
Quitting smoking just got harder
A story about a study concluding that smokers who use nicotine replacement therapy are twice as likely to quit for six months than those who were given placebos reminds us of the dire straits we are in with regard to tobacco cessation therapy. What isn't reported until the end of the news story is that only 6.75% of the smokers given the nicotine replacement therapy managed to quit for six months -- and only half of them are expected to remain smoke-free in the future.
"These abysmal quit rates show that our current smoking cessation therapies are almost never effective," says ACSH's Dr. Gilbert Ross. "People who close their eyes to alternative cessation therapies, such as smokeless tobacco as harm reduction, are being ostriches at the expense of the over 40 million addicted smokers in this country -- and who knows how many millions around the world."
Unfortunately, the U.S. took a step in the wrong direction yesterday when the House of Representatives passed the Kennedy-Waxman bill giving the FDA regulatory control of tobacco and defeated Rep. Steven Buyer's (R-IN) harm reduction amendment in a 284-142 vote. Lawmakers expect a tighter vote in the Senate, and ACSH looks forward to offering our science-based perspective to the continuing debate. We wholeheartedly agree with Rep. Buyer when he says, "Effectively giving an FDA stamp of approval on cigarettes will improperly lead people to believe that these products are safe, and they really aren't. We want to move people from smoking down the continuum of risk to eventually quitting."
The current battle over the e-cigarette illustrates the problems with our country's approach to tobacco policy. The e-cigarette delivers a hit of nicotine vapor when a person "smokes" it, so smokers who are trying to quit can satisfy their craving without inhaling the harmful products of combustion produced by cigarettes. But because the FDA has yet to approve the e-cigarette as a nicotine-delivery device, this new technology could be banned until it undergoes the approval process. "You can't blame the FDA for enforcing the law, but we have bad laws about tobacco that lead to bad public policy outcomes," says ACSH's Jeff Stier.
Attack of the cell phone towers!
A group of Staten Island parents and lawmakers are up in arms about the possibility of cell phone towers sending low-level radiation into a nearby school. "When they traced the source of radiation, which was above average but not dangerous, they found that it wasn't connected to the cell phone towers at all," Dr. Ross remarks. "But they are still trying to get them removed!"
Dr. Whelan adds, "When people believe scares like this they become totally irrational. When they really believe that these towers are emitting dangerous levels of radiation, how do you convince them otherwise?"
Dr. Ross jokes, "The only way to appease them seems to be getting all the students at this school metal helmets." ACSH debunked the wrongheaded notion that cell phones cause brain cancer in our Top 10 Unfounded Health Scares of 2008. For more information, see our publication The Health Effects of Low-Level Radiation.
CPSIA remains intact, Prop 65 grows even more ridiculous
Unfortunately, the Senate rejected Senator Jim DeMint's (R-SC) amendment to the stimulus bill that would have reformed the Consumer Product Safety Improvement Act (CPSIA). "The Senate failed to take a breath of fresh air," Stier says. As we have written before, the CPSIA places an impossible burden on many small businesses by banning certain types of phthalates and requiring that every children's product be tested for minuscule levels of lead. If a business can't afford the expensive testing, it must throw out the products -- even all-terrain vehicles (ATVs) and children's books!
As summarized so succinctly in today's Wall Street Journal editorial, "With one stroke of the regulatory pen, an estimated $100 million of inventory can't be sold, and the industry loss may reach $1 billion."
In California, we see the results of another absurdly stringent "public health" measure, Proposition 65, which requires warnings to accompany any product that contains "toxic chemicals." To avoid lawsuits, businesses in the state have taken to posting frivolous "warning signs" about products that do not pose any danger to consumers' health.
"Prop 65 is not based on health or science, but rather perceptions and politics," Dr. Ross says. For more on the consequences of the misguided law, check out Stier's op-ed "Perils of Global Warnings" from the Washington Times.
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