Cato: The CFPB Gets One Right?

It’s no secret that I’m not a big fan of the Dodd-Frank-created Consumer Financial Protection Bureau (CFPB), mostly because I believe it will not be good for consumers.  So let me acknowledge an instance in which the agency is attempting to do something good.

One thing I dislike more than the CFPB is the practice of many state and local governments to use their “abandoned” property laws to steal the remaining value of a consumer’s gift card.  Here’s how it often works:  Say your favorite aunt gives you an Amazon gift card for your birthday.  Now you don’t know what you want to use it for, so you put it in a drawer in your house.  If you leave it there for more than two years—even considering that it is in your house (that is, in your actual possession)—but you don’t use it, states like Maine consider it “abandoned” and force the merchant (in this case Amazon) who issued it to transfer its outstanding value to the government.  If that’s not theft, I don’t know what is.

Read more at http://www.cato-at-liberty.org/the-cfpb-gets-one-right/

Cato: Can I Get Some Free Trade in My Free Trade Agreements?

Last week, I voiced several complaints about the Trans Pacific Partnership, the main trade agreement being negotiated by the U.S.  Let me add another concern: There’s too much protectionism in this “free trade” agreement.

Read more at http://www.cato-at-liberty.org/can-i-get-some-free-trade-in-my-free-trade-agreements/

Cato: Challenging the Need to Modernize the U.S. Nuclear Arsenal

Over the weekend, the Washington Post published a lengthy story by Dana Priest on plans to modernize the nation’s nuclear arsenal. It is difficult to comprehend the strategic rationale for the nation’s nuclear arsenal and force structure, and politics and parochialism (especially the jobs associated with the various nuclear labs) add a further layer of complexity. Most casual observers can be forgiven for becoming lost in the haze of secrecy and deliberate obfuscation that has swirled around the nation’s nuclear deterrent for decades. To her credit, Priest, one of the better national security reporters out there, is trying to pierce the fog. Unfortunately, this particular story may obscure more than it illuminates.

In excruciating detail, the Los Alamos Study Group’s Greg Mello points out his many complaints. Those who read the entire Priest story might at least want to consider Mello’s point by point analysis. For my part, I tend to agree with Mello that this line–”The need to spend heavily to modernize the nation’s shrinking nuclear stockpile has been apparent for at least two decades”–is the “money quote” of the piece.

Read more at http://www.cato-at-liberty.org/challenging-the-need-to-modernize-the-u-s-nuclear-arsenal/

Cato: The U.S. Takes a Dive in Economic Freedom of the World Index

Economic freedom in the United States has plummeted to an all-time low. According to theEconomic Freedom of the World: 2012 Annual Report, co-published today with the Fraser Institute, the United States’ ranking has dropped to 18th place after having ranked 3rd for decades up to the year 2000. The loss of freedom is a decade-long trend—the United States ranked 8th in 2005—that has accelerated in recent years.

Virtually every U.S. indicator has seen a deterioration. Government spending and regulations have grown, the rule of law and protection of property rights have weakened, and foreign investment and non-tariff barriers have increased. Authors James Gwartney, Robert Lawson, and Josh Hall note some of the reasons for the decline, including the war on terror and the growth of crony capitalism.

Read more at http://www.cato-at-liberty.org/the-u-s-takes-a-dive-in-economic-freedom-of-the-world-index/

Cato: The ’47 Percent’ and the Fundamental Attribution Error

There are a number of things wrong with Mitt Romney’s now infamous suggestion that the 47 percent of Americans who don’t pay federal income tax will automatically support larger government, because those “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them” can never be persuaded to “take personal responsibility and care for their lives.” For one, as both Matt Yglesias and Ezra Klein note, the people who aren’t paying income tax are overwhelmingly either college-aged or elderly retirees who aren’t making much taxable income, not able-bodied layabouts in their 30s and 40s. In other words, they’re mostly not some distinct parasite class, but rather ordinary, hard-working people who either already have paid or will soon be paying quite substantial taxes.

The deeper mistake, however, is what social psychologists have dubbed the “fundamental attribution error”: the nigh universal human tendency to ascribe actions and outcomes to immutable personal characteristics rather than situational factors. We assume too quickly that someone behaves kindly or callously because they are a “kind person” or a “callous person”—yet research suggests that minor variations in circumstances can elicit either type of behavior from the very same people.

Read more at http://www.cato-at-liberty.org/the-47-percent-and-the-fundamental-attribution-error/

Cato: Mitt Romney’s Contrived Trade War

The Obama administration filed a formal complaint with the World Trade Organization on Monday alleging that the Chinese government is bestowing various prohibited subsidies upon Chinese automobile and auto parts producers to the tune of $1 billion and that Beijing is, accordingly, in violation of its commitments under the WTO Agreement on Subsidies and Countervailing Measures.

There are reasons to shake one’s head at this move, including the apparent hypocrisy it reveals of an administration that spins the $85 billion of subsidies it heaped upon two U.S. car companies and the United Autoworkers union as its chief economic accomplishment. Of course that figure doesn’t even include the $12-$14 billion in unorthodox tax breaks granted to GM under the bankruptcy terms; $17 billion in funds committed from the TARP to GM’s former financial arm GMAC (which received taxpayer support to facilitate GM auto sales); GM’s portion of the $25 billion Energy Department slush fund to underwrite research and development in green auto technology; and the $7,500 tax credit granted for every new purchase of a Chevy Volt, and more. (Full story here.)

Read more here http://www.cato-at-liberty.org/mitt-romneys-contrived-trade-war/

Cato: When ‘Free Speech’ as a Concept Vanishes

A sign mentioned in the New York Times coverage of the ongoing protests in the Muslim world crystallized a question that had been nagging at the back of my head since the attacks on the American embassies in Libya and Egypt. The sign read: “Shut up America!” and “Obama is the president, so he should have to apologize!”

What a strange non-sequitur, to Western ears! What does the president—or the U.S. government in general—have to do with some crude, rinky-dink YouTube video produced by an apparent con man? Surely, like the overwhelming majority of Americans, Barack Obama would never even have been aware of the trailer for “Innocence of Muslims” if it hadn’t become the bizarre focus of controversy abroad. Even if the video was more catalyst than cause of the outrage, commenters all along have remarked how absurd, almost surreal, it seems that one shoddy YouTube—surely one of many containing harsh criticism of Islam or its prophet—could trigger such a massive reaction. If people hadn’t died, it would be comical.

Read more at http://www.cato-at-liberty.org/when-free-speech-as-a-concept-vanishes/

Cato: Hooray for the Rankings!

Heaven knows there are oodles of problems with American higher education – and you’ll get them all thoroughly dissected, diagnosed, and wellness plans delivered at SeeThruEdu – but I want to start my blogging here on a positive note. At least, a relatively positive note: American higher education is way closer to a free market than our moribund elementary and secondary system, and there’s no better sign of that than the oft-maligned U.S. News and World Reportcollege rankings released last week.

Just like higher education generally, the U.S. News rankings have huge problems. Heck, Emory University admitted to having sent inflated SAT and ACT scores, as well as class ranks, to the publication for years. As a result, in the latest rankings Emory moved…not one bit. The school stayed as number 20 among “national universities,” and U.S. News apparently just accepted the data Emory submitted this time based on the school having “confirmed” them. More broadly, the rankings are based far more on inputs such as endowment funds, and dubious academic reputation surveys, than measures of what students actually learn.

Read more at http://www.cato-at-liberty.org/hooray-for-the-rankings/

Cato: ‘Do Indians Rightfully Own America?’

Bryan Caplan at Econlog revisits an old libertarian chestnut about land ownership, and following the lead of Murray Rothbard analyzes it in a priori fashion with little attention to the devices that Anglo-American law long ago evolved to adjudicate claims of ancient title, such as statutes of limitations and repose, laches, and adverse possession. But in fact we don’t need to consider these questions in a historical and empirical vacuum. Not only has Indian title been the subject of an extensive legal literature since the very start of the American experiment — much of it written by scholars and reformers highly sympathetic toward Native Americans and their plight — but Indian land claims resurged in the 1970s to become the subject of a substantial volume of litigation in American courts, casting into doubt (at least for a time) the rightful ownership of many millions of acres, until the past few years, when the U.S. Supreme Court finally brought down the curtain on most such claims.

Read more at http://www.cato-at-liberty.org/do-indians-rightfully-own-america/

Cato: Just as ‘Fair Trade’ Means Protectionism for the Benefit of Special Interests, ‘Fair Tax Competition’ Means Tax Harmonization for the Benefit of Politicians

Very few people are willing to admit that they favor protectionism. After all, who wants toembrace a policy associated with the Great Depression?

But people sometimes say “I want free trade so long as it’s fair trade.” In most cases, they’re simply protectionists who are too clever to admit their true agenda.

Read more at http://www.cato-at-liberty.org/just-as-fair-trade-means-protectionism-for-the-benefit-of-special-interests-fair-tax-competition-means-tax-harmonization-for-the-benefit-of-politicians/

Election Results

Dear whichever Rebulicrat won the election,

Do you realize how many people disagree with you?  How many people voted against you?  Whatever victory margin you had does not mean you have a resounding mandate to drag the country even further in your preferred direction.

Dear whatever people voted for the winner,

Do you realize how many people in the country disagree with you?  You are barely the majority.  Just because Obomney won doesn't mean you can completely ignore everyone who voted against Obomney.

Look at the approval ratings for the federal government.  Even if the House, Senate, and Presidency switched parties in the election, I bet the approval ratings will still be abysmal.  Being disliked less than the other guy doesn't mean you're actually liked.

PS - I hope Johnson gets 5% of the national vote.  Completely absurd dream is that Johnson, Stein, and Goode all get 5%.  And while I'm dreaming, why not change the election method to alternative voting...

Cato: U.S. Corporate Tax Rate Is Double the Average

Cato has released a new study by scholars Duanjie Chen and Jack Mintz on corporate effective tax rates in 2012 for 90 countries. The study provides estimates of marginal effective tax rates, which are an important driver of real investment flows.

Read more at http://www.cato-at-liberty.org/u-s-corporate-tax-rate-is-double-the-average/

Cato: ‘Has the Fed Been a Failure?’

That is the provocative title of the lead paper in the prestigious economics publication, theJournal of Macroeconomics. It is authored by George Selgin, William D. Lastrapes, and Lawrence H. White. (Selgin and White are professors, Cato scholars, and many-time participants in the annual Cato monetary conference).

The journal’s editor considered the paper so important that he devoted a section of the September issue to it, with discussion by a number of prestigious economists, including professors Allan Meltzer and Jeffrey Miron (a Cato senior fellow).

Read more at http://www.cato-at-liberty.org/has-the-fed-been-a-failure/

Cato: Where Have All the Foreign Policy Experts Gone?

Why is it that so many people with so little foreign policy experience wind up as top foreign policy advisers to campaigns and presidents?

I touched on this question in a 2011 Politico piece looking at President Obama’s advisers:

Before Obama named [Leon] Panetta as CIA director, the former congressman from California had little experience on national security issues. This was part of a larger trend: many of the president’s important foreign policy aides have scant training in foreign policy.

For example, the president’s national security adviser, Tom Donilon, had been a Beltway lawyer, lobbyist and executive at Fannie Mae. The lead author of the president’s National Security Strategy, Ben Rhodes, has a background in fiction and poetry, putting aside work on his first novel (“The Oasis of Love”) to join the administration’s speech-writing team, from which he moved over to the National Security Council.

Read more at http://www.cato-at-liberty.org/where-have-all-the-foreign-policy-experts-gone/

Cato: Jurisdictional Competition Is Why the West Became Rich While Asia languished

During the dark ages, nations like China were relatively advanced while Europeans were living in squalid huts.

But that began to change several hundred years ago. Europe experienced the enlightenment and industrial revolution while the empires of Asia languished.

What accounts for this dramatic shift?

I’m not going to pretend there’s a single explanation, but part of the answer is that Europe benefited from decentralization and jurisdictional competition. More specifically, governments were forced to adopt better policies because labor and capital had significant ability to cross borders in search of less oppression.

I’m certainly a big fan of making governments compete with each other, but even I didn’t realize how jurisdictional rivalry gave us modernity.

Read more at http://www.cato-at-liberty.org/jurisdictional-competition-is-why-the-west-became-rich-while-asia-languished/

Cato: Incoherent Politicians Lag Public Opinion on TSA

If you needed proof of politicians’ sensitivity to, and encouragement of, persistent terrorism fears, look no further than today’s hearing in the House Homeland Security Subcommittee on Transportation Security. It’s called “Eleven Years After 9/11 Can TSA Evolve To Meet the Next Terrorist Threat?” and it’s being used to feature—get this—a report arguing for a “smarter, leaner” Transportation Security Administration.

Could the signaling be more incoherent? The hearing suggests both that unknown horrors loom and that we should shrink the most visible federal security agency.

Lace up your shoes, America—we’re goin’ swimmin’!

Our federal politicians still can’t bring themselves to acknowledge that terrorism is a far smaller threat than we believed in the aftermath of the September 11, 2001, attacks, and that the threat has waned since then. (The risk of attack will never be zero, but terrorism is far down on the list of dangers Americans face.)

Read more at http://www.cato-at-liberty.org/incoherent-politicians-lag-public-opinion-on-tsa/

Cato: Paul Ryan, Deficits, and Smaller Government

NPR notes on Sunday that Rep. Paul Ryan’s voting record in Congress calls into question his image as a deficit hawk. But they emphasize Alice Rivlin’s explanation:

I think you have to distinguish deficit hawk from small-government conservative. I think of him as a man committed to a smaller government that has less of a role in people’s lives. He really believes that: that the government does too much. And he thinks taxes should be less.

Read more at http://www.cato-at-liberty.org/paul-ryan-deficits-and-smaller-government/

Cato: Is Government like Immigrants?

In his speech last night, President Obama listed a lot of groups of people whom we shouldn’t blame for “all our problems”:

We don’t think the government can solve all our problems. But we don’t think that the government is the source of all our problems, any more than are welfare recipients, or corporations, or unions, or immigrants, or gays, or any other group we’re told to blame for our troubles.

He’s right to discourage scapegoating. But there’s a category error here. Government is not just a group of people distinguished by their place of birth, or sexual orientation, or economic organization. Government is defined by its power to use force to achieve its purposes. Gays and immigrants don’t have such power. Neither do corporations or unions or welfare recipients.

No one blames governments for “all our problems.” Indeed, libertarians should be the first to remember, as Dr. Johnson told us,

How small, of all that human hearts endure,
That part which laws or kings can cause or cure!

Read more at http://www.cato-at-liberty.org/is-government-like-immigrants/

Cato: Unregulated Is Not Unconstrained

The forces that constrain behavior are manifold—moral, physical, financial, reputational, and so on. Formally, the word “regulate,” with its roots in the Latin regulare (“to control by rule, direct”), refers to only one kind of constraint: the governmental kind (or at least some kind of authority). Yet when one calls something “unregulated,” that often seems to imply that it can act on whim, launching itself in any direction it likes. Not so.

Foreign Affairs has a capsule review of a book on non-governmental organizations that relies on the distinction between other constraints and government regulation. The review describes the factors that arguably cause international NGOs to behave well, even though they are “not regulated.”

Read more at http://www.cato-at-liberty.org/unregulated-is-not-unconstrained/

Cato: Clinton and Obama, Polar Opposites

Last night, Bill Clinton introduced President Barack Obama as the Democratic nominee. He went to great lengths to stress their similarities, but failed to mention their divergent views on the appropriate size of government.

When President Clinton took office in 1993, government expenditures were 22.1% of GDP, and when he departed in 2000, the federal government’s share of the economy had been squeezed to a low of 18.2%. As the accompanying table shows, during the Clinton years, federal government expenditures as a percent of GDP fell by 3.9 percentage points. No other modern president has come close.

Read more at http://www.cato-at-liberty.org/clinton-and-obama-polar-opposites/

Cato: Sunlight Before Signing: Measuring a Campaign Promise

And when there’s a bill that ends up on my desk as president, you, the public, will have five days to look online and find out what’s in it before I sign it, so that you know what your government’s doing.

When candidate Obama spoke that line on the campaign trail (starting around 1:00 in the video), it was met with a hail of applause. This same promise was featured on his campaign web site. He laid out a vision for a transparent, responsive government.

Read more at http://www.cato-at-liberty.org/sunlight-before-signing-measuring-a-campaign-promise/

Cato: Does the $16 Trillion Debt Matter? A Remedial Lesson in Public Finance Economics for the GOP

Everyone has a cross to bear in life, some sort of burden or obligation, often self-imposed.

For some inexplicable reason, I’ve decided that one of my responsibilities is to educate a backwards and primitive people who seem impervious to common sense, simple logic, and strong principles.

As you’ve probably guessed already, I’m talking about Republicans.

I’ve already identified them at the Stupid Party, but they seem especially ill-informed and clueless on the topic of government borrowing.

I’ve specifically warned that they are economically (and politically) misguided when they focus on deficits and debt as America’s main fiscal problem.

Read more at http://www.cato-at-liberty.org/does-the-16-trillion-debt-matter-a-remedial-lesson-in-public-finance-economics-for-the-gop/

Cato: :The Truth about the GM and Chrysler Bailouts

Vice presidential candidate Paul Ryan has been accused of lying when he claimed that Obama broke a promise by letting a Wisconsin auto factory close, when in fact the factory closed before Obama took office. Although that isn’t precisely what Ryan said, there is some validity to the accusation that his statement was deceptive.

But numerous Obama supporters are playing just as loose with the facts when they say that, if Obama hadn’t rescued GM and Chrysler, far more factories would have closed permanently. That is simply untrue. While news agencies have fact-checked some of the things being said at the Democratic convention, I haven’t seen any challenges of this claim.

Read more at http://www.cato-at-liberty.org/the-truth-about-the-gm-and-chrysler-bailouts/

The Lesser of Two Evils

The problem of voting for the lesser of two evils:

How can you be sure you're not voting for the better of two liars?

Cato: What the Manual by DOJ’s Top Intelligence Lawyer Says About the FISA Amendments Act

To a casual observer, debates about national security spying can seem like a hopeless game of he-said/she-said. Government officials and congressional surveillance hawks characterize the authorities provided by measures like the FISA Amendments Act of 2008 in one way, while paranoid civil libertarians like me tell a more unsettling story. Who can say who’s right?

Fortunately, there is an authoritative unclassified source that explains what the law means: the revised 2012 edition of National Security Investigations and Prosecutions by David S. Kris (who headed the Justice Department’s National Security Division from 2009–2011) and J. Douglas Wilson. As the definitive (unclassified) treatise on what foreign intelligence surveillance law says, means, and permits, it’s the same resource you’d expect the government attorneys who apply for surveillance authority to consult for guidance on what the law does and doesn’t allow spy agencies to do. Let’s see what it says about the scope of surveillance authorized by the FAA:

[The FAA's] certification provision states that the government under Section 1881a is “not required to identify the specific facilities, places premises, or property at which an acquisition … will be directed or conducted.” This is a significant grant of authority, because it allows for authorized acquisition—surveillance or a search—directed at any facility or location. For example, an authorization targeting “al Qaeda”—which is a non-U.S. person located abroad—could allow the government to wiretap any telephone that it believes will yield information from or about al Qaeda, either because the telephone is registered to a person whom the government believes is affiliated with al Qaeda, or because the government believes that the person communicates with others who are affiliated with al Qaeda, regardless of the location of the telephone. Unless the FISC attempts to address the issue under the rubric of minimization, no judge will contemporaneously review the government’s choice of facilities or places at which to direct acquisition. [….] Review of the certification is limited to the question “whether [it] contains all the required elements”; the FISC does not look behind the government’s assertion’s. Thus, for example, the FISC could not second-guess the government’s foreign intelligence purpose of conducting the acquisition, as long as the certification in fact asserts such a purpose.

Read more at http://www.cato-at-liberty.org/what-the-manual-by-dojs-top-intelligence-lawyer-says-about-the-fisa-amendments-act/

Cato: Hey RNC, There Already Was a Gold Commission

The rumor is that Republicans, at their upcoming convention, will call for a government commission to study the feasibility of returning to a gold monetary standard.  The platform would also call for a policy audit of the Federal Reserve, a proposal that has passed the House but is currently stuck in the Senate (and apparently opposed by the Obama White House).

First let’s recognize that a GOP gold standard plank isn’t all that novel. Republican platforms in the past have often alluded to “a dependable monetary standard,” as both the 1980 and 1984 platforms made some reference to monetary matters.  In fact, the 1980 election did result in the creation of a Gold Commission. Cato recently republished the commission’s minority report, The Case for Gold, as a free ebook.  So if Republicans want to consider some sort of gold standard, there is already a significant amount written on the topic.  Cato also published a paper in 2008 by George Mason University professor Larry White on the economics of the gold standard.

Read more at http://www.cato-at-liberty.org/hey-rnc-there-already-was-a-gold-commission/

Cato: I Heard It Through the Grapevine That the Government Was Violating Property Rights

Property owners shouldn’t be made to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights. Yet that is exactly what the U.S. Department of Agriculture seeks to impose on independent raisin farmers Marvin and Laura Horne when they protested the enforcement of a USDA “marketing order” that demanded that the Hornes turn over 47 percent of their crop without compensation.

The marketing order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market. The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.

Believing that they, as raisin “producers,” were exempt, the Hornes failed to set aside the requisite tribute during the 2002-2003 and 2003-2004 growing seasons. The USDA disagreed with the Hornes’ interpretation of the Agricultural Marketing Agreement Act of 1937 and brought an enforcement action, seeking $438,843.53 (the approximate market value of the raisins that the Hornes allegedly owe), $202,600 in civil penalties, and $8,783.39 in unpaid assessments.

Read more at http://www.cato-at-liberty.org/i-heard-it-through-the-grapevine-that-the-government-was-violating-property-rights/

Cato: The President Can’t Expand Federal Power by Signing a Treaty

In 2010, the Supreme Court decided United States v. Bond, a case that seems right out of a soap opera. Carol Anne Bond learned that her best friend was having an affair with her husband, so she spread toxic chemicals on the woman’s car and mailbox. Postal inspectors discovered this plot after they caught Bond on film stealing from the woman’s mailbox.

Rather than leave this caper to local law enforcement to resolve, however, a federal prosecutor charged Bond with violating a statute that implements U.S. treaty obligations under the 1993 Chemical Weapons Convention. Bond pled guilty and was sentenced, but she reserved the right to appeal her conviction on the ground that the statute at issue violates the Tenth Amendment—in that her offense was local in nature and not properly subject to federal prosecution.

She won the first part of that appeal process: The Supreme Court unanimously accepted the argument offered in an amicus brief by Cato and the Center for Constitutional Jurisprudence that there’s no reason in constitutional structure or history that someone can’t use the Tenth Amendment to challenge the constitutionality of the statute under which she was convicted.

On remand to the Philadelphia-based U.S Court of Appeals for the Third Circuit, Bond (now with standing to challenge that law) raised the argument that Congress’s limited and enumerated powers cannot be increased by treaties. We again filed in that case in support of Bond. The Third Circuit disagreed, however—if reluctantly—based on one sentence by Justice Oliver Wendell Holmes in Missouri v. Holland (1920) that has been interpreted to mean that Congress’s constitutional powers can indeed be expanded by treaties.

Read more at http://www.cato-at-liberty.org/the-president-cant-expand-federal-power-by-signing-a-treaty/

Cato: Can You Spot the Difference?

The Republican National Platform on the War on Drugs in Latin America:

“The war on drugs and the war on terror have become a single enterprise. We salute our allies in this fight, especially the people of Mexico and Colombia. We propose a unified effort on crime and terrorism to coordinate intelligence and enforcement among our regional allies, as well as military-to-military training and intelligence sharing with Mexico, whose people are bearing the brunt of the drug cartels’ savage assault.”

The Democratic National Platform on the War on Drugs in Latin America:

“We have strengthened cooperation with Mexico, Colombia, and throughout Central America to combat narco- traffickers and criminal gangs that threaten their citizens and ours. We will also work to disrupt organized crime networks seeking to use the Caribbean to smuggle drugs into our country. As we collectively confront these challenges, we will continue to support the region’s security forces, border security, and police with the equipment, training, and technologies they need to keep their communities safe. We will improve coordination and share more information so that those who traffic in drugs and in human beings have fewer places to hide. And we will continue to put unprecedented pressure on cartel finances, including in the United States.”

Read more at http://www.cato-at-liberty.org/can-you-spot-the-difference/

Cato: Another Dismal Assessment of Obamanomics: United States Drops to 7th in WEF’s Global Competitiveness Index

Every year, I look forward to the annual releases of both Economic Freedom of the World and the Index of Economic Freedom. With their comprehensive rankings, these two publications enable interested parties to compare nations and see which countries are moving in the right direction.

As an American, I’m ashamed to say that these publications also show which nations are moving in the wrong direction. And the United States ranks poorly by this metric, having dropped from 3rd place to 10th place since 2000 according to Economic Freedom of the World.

The United States also has dropped to 10th place in the Index of Economic Freedom, and is now ranked only as a “mostly free” nation.

Read more at http://www.cato-at-liberty.org/another-dismal-assessment-of-obamanomics-united-states-drops-to-7th-in-wefs-global-competitiveness-index/

Cato: Details of the Auto Bailout You Won’t Hear in Charlotte

The central economic selling point of the Obama reelection team is that the president saved the U.S. auto industry. That such a contestable proposition serves as the administration’s economic headline does more to underscore its abysmal record than to inspire confidence in its continued economic stewardship.

The administration didn’t save the auto industry. The stronger case is that it damaged the auto industry along with several important institutions vital to capitalism’s proper functioning. However, it should be granted that President Obama’s commandeering of GM’s and Chrysler’s bankruptcy process saved jobs at those companies and elsewhere in their supply chains (and provided an opportunity to dole out spoils for politically favored interests). How many jobs were saved is impossible to determine because it’s not clear what would have happened to GM’s and Chrysler’s assets had a normal, non-political bankruptcy process been allowed to unfold.

Yes, jobs were saved for the time being in Michigan, Ohio, and a few other industrial states in the Midwest. That is what can be seen. And politicians are hardwired to tout the benefits—and only the benefits—of their policies.

Read more at http://www.cato-at-liberty.org/details-of-the-auto-bailout-you-wont-hear-in-charlotte/

Cato: Is Secession a Good Idea?

I’m not talking about secession in the United States, where the issue is linked to the ugliness of slavery (though at least Walter Williams can write about the issue without the risk of being accused of closet racism).

But what about Europe? I have a hard time understanding why nations on the other side of the Atlantic should not be allowed to split up if there are fundamental differences between regions. Who can be against the concept of self-determination?

Heck, tiny Liechtenstein explicitly gives villages the right to secede if two-thirds of voters agree. Shouldn’t people in other nations have the same freedom?

This is not just a hypothetical issue. Secession has become hot in several countries, with Catalonia threatening to leave Spain and Scotland threatening to leave the United Kingdom.

Read more at http://www.cato-at-liberty.org/is-secession-a-good-idea/

Cato: Buckyballs, the CPSC, and the Coconut Menace

It’s rare for a regulated company to mount open and disrespectful resistance to a federal regulatory agency, but that’s what the maker of BuckyBalls, the popular desktop magnetic toy, is doing in response to the Consumer Product Safety Commission’s effort to ban its product. Powerful magnets can be harmful if swallowed, and the maker of BuckyBalls has extensively warned that they are meant for adult use and should be kept out of kids’ hands. The CPSC considers these warnings inadequate and wants to ban the product even for adult use.

Read more at http://www.cato-at-liberty.org/buckyballs-the-cpsc-and-the-coconut-menace/

Cato: Washington Post Sees Solar Panel Duties for What They Are: Self-Flagellation

The Washington Post was channeling the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies in this morning’s succinct and insightful editorial about the foolishness of taxing imports of Chinese solar panels.

The editorial picks up a few of the themes and draws very similar policy conclusions to those we have been advocating for many years and, without stating it explicitly, presents a compelling case for major reform, if not repeal, of the trade remedies laws.

For context, last week the U.S. Commerce Department published the final rates of duty calculated in both antidumping and countervailing duty (anti-subsidy) investigations of imports of Chinese solar panels, which were initiated in October 2011. (Here are some earlier thoughts on the matter.)

Formal antidumping and countervailing duty orders will take effect, probably, next month following a final determination by the U.S. International Trade Commission that the U.S. solar panel industry has been materially injured by these Chinese imports.

Read more at http://www.cato-at-liberty.org/washington-post-sees-solar-panel-duties-for-what-they-are-self-flagellation/

Cato: Free Trade, Free Markets: Rating the Congress

With all the China bashing we’re hearing on the campaign trail and the arguments from both candidates that free trade agreements are good only because they increase manufacturing exports, one might reasonably deduce that free trade advocacy is a thing of the past and a losing position with the American people.  If this is true, many in Congress haven’t gotten the memo.  The House and Senate are home to many free traders.  You can see for yourself by visiting Cato’s interactive trade votes database, Free Trade, Free Markets: Rating the Congress.

The Cato Institute has been keeping track of how Congress votes on trade issues since 1997.  At the website you can see reports summarizing the votes for each congressional term.  There is no report for last term (2009–2010) because Congress was too busy dealing with healthcare and Keynesian stimulus to take on trade issues, but the last two years have seen votes on free trade agreements, Chinese currency and subsidies, export finance, and sugar price controls.  We’ll have a report after the current term ends on what all these votes mean for the freedom of Americans to interact with foreigners and on what to expect in the next two years.

Read more at http://www.cato-at-liberty.org/free-trade-free-markets-rating-the-congress/

Cato: Drug Warriors Wrong on Marijuana Ballot Initiatives

Three states’ ballot initiatives might legalize the recreational use of marijuana this year. To the displeasure of some current and former drug warriors, the Obama Department of Justice is silent on the matter.

Those urging the feds to weigh in, unfortunately, rest their case on some bad reasoning:

• Peter Bensinger, DEA administrator under Jimmy Carter: “Federal law, the U.S. Constitution and Supreme Court decisions say that this cannot be done because federal law preempts state law.”
• Tom Gorman, director of the federal Rocky Mountain High-Intensity Drug Trafficking Area: “It’s illegal for a state to pass a constitutional measure that allows its citizens to violate federal law.”

Read more at http://www.cato-at-liberty.org/drug-warriors-wrong-on-marijuana-ballot-initiatives/

Cato: Minnesota: Beware of Free Education

Imagine that it’s the 21st century, and that at least a handful of people in the education business have realized this. Putting their insight to good use, a few of them create an online service called “Coursera” that offers free lectures from some of the top universities in the nation (Stanford, Johns Hopkins, etc.). Then imagine that the state of Minnesota has decided that it is illegal for Coursera to offer these free lectures to its citizens.

I know, it’s hard to imagine. Unfortunately, you don’t have to, you can just read about how it’s actually happening.

Read more at http://www.cato-at-liberty.org/beware-of-free-education/

Cato: What the Candidates Won’t Explain about Outsourcing

Like almost everything about the 2012 presidential campaigns, the bickering between the major party candidates over who is most responsible for shipping jobs overseas has been banal and utterly uninformative. While politicians have scared many Americans with hyperbolized sales pitches about the costs of foreign outsourcing, most people remain in the dark about the causes and benefits of outsourcing. What is foreign outsourcing anyway? Why do some businesses invest in sales operations, research and development, production and assembly operations, or the provision of services abroad? Are low wages and lax environmental and safety standards in poor countries really the magnets attracting U.S. investment? If so, why is 75% of U.S. direct investment abroad in rich countries? What explains the fact that the United States (high-standard, rich country that it is) is the number one destination in the world for foreign direct investment? Doesn’t the fact that businesses have options in our globalized economy serve to discipline some of the worst government policies?

Read more at http://www.cato-at-liberty.org/what-the-candidates-wont-explain-about-outsourcing/

Cato: The Canadian Model for Fiscal Reform

In the Washington Post today, Brian Lee Crowley discusses the still little-known story of Canada’s

tremendous budgetary turnaround achieved in the mid-1990s. Over just a few years, between 1995 and 1998, Canada transformed a $32 billion federal deficit, equivalent to 4 percent of its gross domestic product, into a $2.5 billion surplus. This achievement was followed by a full decade of surplus budgets, with debt, tax and poverty rates all falling as growth, investment and employment rose.

Crowley discusses the reasons the success happened, from bipartisan (actually multipartisan) agreement to rallying public support. He promises six reasons, but lists only five. Maybe that’s part of the cutbacks. It’s an inspiring story: if Canada could cut federal spending from 22 percent of GDP to 15 percent, why can’t we?

And it’s a story you could have read in Cato Policy Report in May. Long-ago Canadian Chris Edwards, Cato’s director of tax policy studies, wrote:

In just two years, total noninterest spending fell by 10 percent, which would be like the U.S. Congress chopping $340 billion from this year’s noninterest federal spending of $3.4 trillion. When U.S. policymakers talk about “cutting” spending, they usually mean reducing spending growth rates, but the Canadians actually spent less when they reformed their budget in the 1990s.

Read more at http://www.cato-at-liberty.org/the-canadian-model-for-fiscal-reform/

Cato: Higher Taxes on the Rich Are a Precursor to Higher Taxes on the Rest of Us

President Obama repeatedly assures us that he only wants higher taxes on the rich as part of his class-warfare agenda.

But I don’t trust him. In part because he’s a politician, but also because there aren’t enough rich people to finance big government (not to mention that the rich easily can alter their financial affairs to avoid higher tax rates).

Honest leftists are beginning to admit that their real target is the middle class. Here are a few examples.

• The New York Times endorsed higher taxes on the middle class in 2010.
• The then-House Majority Leader Steny Hoyer also gave a green light that year to higher taxes on the middle class.
• Earlier this year, MIT professor and former IMF official Simon Johnson argued that the middle class should pay more tax.
• The Washington Post also called for higher taxes on the middle class this year, as did Vice President Joe Biden’s former economist.

In other words, politicians often say they want to tax the rich, but the real target is the middle class. Indeed, this is the history of tax policy. In a post earlier this year, warning the folks in the Cayman Islands not to impose an income tax, I noted how the U.S. income tax began small and then swallowed up more and more people.

Read more at http://www.cato-at-liberty.org/higher-taxes-on-the-rich-are-a-precursor-to-higher-taxes-on-the-rest-of-us/

Cato: Building a Free Trade Area of Most of the Americas

Today the Free Trade Agreement between the United States and Panama went into effect. The United States now has FTAs with Canada and eleven Latin American countries stretching from Mexico to Chile. My colleague Bill Watson has a less enthusiastic view of the FTA with Panamahere.

Last week during the third presidential debate, Mitt Romney talked about how the United States has not taken full advantage of trade opportunities with Latin America. Some experts, such as Ted Piccone at the Brookings Institution, were quick to point out that Romney’s call for expanded trade with Latin America isn’t very realistic since Washington already has in place FTAs with all the Latin American countries that want trade agreements with the United States while those who don’t, such as Brazil and Argentina, aren’t interested in one. However, that doesn’t mean that there’s no room for a substantial hemispheric trade agenda.

Read more at http://www.cato-at-liberty.org/building-a-free-trade-area-of-most-of-the-americas/

Cato: Drug-Sniffing Dogs Are Sense-Enhancing Technology

The Supreme Court heard oral argument yesterday in Florida v. Jardines, a case that examined whether bringing a drug-sniffing dog to the front door of a home looking for drugs was a Fourth Amendment search.

Having attended the oral argument (transcript; audio forthcoming), my sense is that a majority on the Court thinks dog-sniffs at front doors (absent a warrant) go too far. But few of the justices know why. The one who does is Justice Kagan.

What rationale might the Court use to decide the case? Even after United States v. Jones threw open Fourth Amendment doctrine, the instinct for using “reasonable expectation of privacy” analysis is strong. (I’ve joked that many lawyers think the word “privacy” can’t be uttered without the prefix “reasonable expectation of.”) This is where much of the discussion focused, and Justice Breyer seemed the most firmly committed to its use.

Read more at http://www.cato-at-liberty.org/drug-sniffing-dogs-are-sense-enhancing-technology/

Cato: A Four-Picture Indictment: Final Pre-Election Jobs Report Is Not Good News for Obama

In some sense, President Obama is fortunate. I predicted a long time ago that he would win re-election if the unemployment rate was under 8 percent.

Well, the new numbers just came out and the unemployment rate is 7.9 percent.

So even though his stimulus failed, and even though his class-warfare tax policy is like a dark cloud over the economy, and even though his plans to further increase the burden of government spending will accelerate America’s descent into a Greek-style fiscal quagmire, he may dodge the proverbial bullet.

You can see my latest election prediction by clicking here, and you can even cast a vote in my reader poll. But let’s set aside the crystal ball nonsense and focus on public policy.

Read more at http://www.cato-at-liberty.org/a-four-picture-indictment-final-pre-election-jobs-report-is-not-good-news-for-obama/

Pre Deluge Warning

Due to my inattentiveness about linking articles here, the backlog has gotten quite ... large.  So the next week will see a rather absurd amount of posts here.  But fear not.  After the backlog is through, things will continue at a more leisurely pace and there'll even be regular posts from me.

(Look at that.  Three posts by me in three days.)