18 September 2009

Today’s Tabbloid
PERSONAL NEWS FOR [email protected]

FISCALLY CONSERVATIVE BLOG FEEDS invoked this ability, but want to keep it in reserve. If that description
were accurate, I’d say let them. But as currently written, the “lone wolf”
A Chance to Fix the PATRIOT language potentially covers people who are really conventional domestic
threats with only the most tenuous international ties—the DOJ letter
Act? [Cato at Liberty] alludes to people who “self-radicalize” by reading online propaganda, but
SEP 17, 2009 05:23P.M. are not actually agents of a foreign group at all.

As Tim Lynch noted earlier this week, Barack Obama’s justice Finally, there’s the “business records” provision, which actually covers
department has come out in favor of renewing three controversial the seizure of any “tangible thing.” The problems with this one probably
PATRIOT Act provisions—on face another in a train of disappointments deserve their own post, and ideally you’d just go through the ordinary
for anyone who’d hoped some of those broad executive branch warrant procedure for this. But at the very, very least there should be
surveillance powers might depart with the Bush administration. some more specific nexus to a particular foreign target than “relevance”
to a ongoing investigation before an order issues. The gag orders that
But there is a potential silver lining: In the letter to Sen. Patrick Leahy automatically accompany these document requests also require more
(D-VT) making the case for renewal, the Justice Department also robust judicial scrutiny.
declares its openness to “modifications” of those provisions designed to
provide checks and balances, provided they don’t undermine Some of these fixes—and quite a few other salutary reforms
investigations. While the popular press has always framed the fight as besides—appear to be part of the JUSTICE Act which I see that Sen. Russ
being “supporters” and “opponents” of the PATRIOT Act, the problem Feingold (D-WI) introduced earlier this afternoon. I’ll take a closer look
with many of the law’s provisions is not that the powers they grant are at the provisions of that bill in a post tomorrow.
inherently awful, but that they lack necessary constraints and oversight
mechanisms.

Consider the much-contested “roving wiretap” provision allowing FISCALLY CONSERVATIVE BLOG FEEDS
warrants under the Foreign Intelligence Surveillance Act to cover all the
communications devices a target might use without specifying the The John Murtha ‘Air Pork’
facilities to be monitored in advance—at least in cases where there are
specific facts supporting the belief that a target is likely to take measures [The Club for Growth]
to thwart traditional surveillance. The objection to this provision is not SEP 17, 2009 05:21P.M.
that intelligence officers should never be allowed to obtain roving
warrants, which also exist in the law governing ordinary law enforcement The Senate just voted on a Jim DeMint amendment that would have
wiretaps. The issue is that FISA is fairly loosey-goosey about the defunded one of the most egregious pork projects in the country, John
specification of “targets”—they can be described rather than identified. Murtha’s Air Pork. It failed 43-53. How did your Senator vote?
That flexibility may make some sense in the foreign intel context, but
when you combine it with similar flexibility in the specification of the
facility to be monitored, you get something that looks a heck of a lot like
a general warrant. It’s one thing to say “we have evidence this particular
phone line and e-mail account are being used by terrorists, though we
don’t know who they are” or “we have evidence this person is a terrorist,
but he keeps changing phones.” It’s another—and should not be
possible—to mock traditional particularity requirements by obtaining a
warrant to tap someone on some line, to be determined. FISA warrants
should “rove” over persons or facilities, but never both.

The DOJ letter describes the so-called “Lone Wolf” amendment to FISA
as simply allowing surveillance of targets who are agents of foreign
powers without having identified which foreign power (i.e. which
particular terrorist group) they’re working for. They say they’ve never

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS Europe and the states of the former Soviet Union today…
which demonstrates, once again, the awesome power of ideas.
Why Chile Is More
The role and achievements of Chile’s team of classical liberal economists
Economically Free Than the is well known. They were the ones who in 1975, once the quasi-civil war
was over, decided to carry out a principled, “friendly takeover” of the
United States [Cato at Liberty] military government that had arisen from the breakdown of democracy
SEP 17, 2009 04:52P.M. in 1973 (here is my essay, published in “Society”, on that drama). Much
less well-known, however, is that they were also the foremost proponents
of a gradual and constitutional return to a limited democracy.

In fact, on August 8, 1980, a new Constitution, containing both a bill of

rights and a timeline for the restoration of full political freedom, was
proposed and approved in a referendum. In the period 1981-1989, what
Fareed Zakaria has called the “institutions of liberty” were created—an
independent Central Bank, a Constitutional Court, private television and
universities, voting registration laws, etc—since they were crucial for
having not only elections but a democracy at the service of freedom.
Then on March 11, 1990, an extraordinary event happened: the
governing military Junta surrendered its power to a democratically
elected government in strict accordance to the 1980 Constitution (here is
my note on the restoration of democracy in Chile).

Since 1990, Chile has had four moderate center-left governments and,
despite minor setbacks on tax, labor and regulation policies, the essence
In the 2009 Economic Freedom of the World Report, Chile is now #5, of the free-market reforms are still intact. The 1980 Constitution is the
one place ahead of the United States. law of the land, and has been amended by consensual agreements among
all parties represented in Congress. Not only is Chile now at the top of
In 1975, of 72 countries, Chile was No 71. How did this happen? The rankings on free trade (number 3 in the world after Hong Kong and
explanation lies in what I call the “Chilean Revolution”, because it was as Singapore) and transparency (less corruption that in most western
important and transformative to my country as the celebrated American European countries), but it is expected to be a developed country by
Revolution that gave birth to the United States. 2018, the first in Latin America.

The exceptional political circumstances of this period have obscured the Nobel Laureate Friedrich Hayek proved, again, to have been a visionary
fact that from 1975 to 1989 a true revolution took place in Chile, when he stated in 1981: “Chile is now a great success. The world shall
involving a radical, comprehensive, and sustained move toward come to regard the recovery of Chile as one of the great economic
economic and political freedom (from a starting point where there was miracles of our time.”
neither one nor the other). This revolution not only doubled Chile’s
historic rate of economic growth (to an average of 7% a year, 84-98),
drastically reduced poverty (from 45% to 15%), and introduced several
radical libertarian reforms that set the country on a path toward rapid
development; but it also brought democracy, restored limited
government, and established the rule of law.

In 1998, The Los Angeles Times described the importance of the Chilean
Revolution to the world:

In a sense, it all began in Chile. In the early 1970s, Chile was

one of the first economies in the developing world to test such
concepts as deregulation of industries, privatization of state
companies, freeing of prices from government control, and
opening of the home market to imports. In 1981, Chile
privatized its social-security system. Many of those ideas
ultimately spread throughout Latin America and to the rest of
the world. They are behind the reformation of Eastern

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Creigh Deeds on Taxes [The That Costly Mandate [Cato at

Club for Growth] Liberty]
SEP 17, 2009 04:44P.M. SEP 17, 2009 02:17P.M.

This guy is not going to get elected governor if 50.1% of voters in Virginia The Wall Street Journal notes that Sen. Max Baucus’s allegedly
watch this video (HT: Ed Frank). moderate health care plan “would increase the cost of insurance and
then force people to buy it, requiring subsidies. Those subsidies would be
paid for by taxes that make health care and thus insurance even more
expensive, requiring even more subsidies and still higher taxes.” Other
than that, it’s not so bad. The Journal also digs up a great graphic
produced by the 2008 presidential campaign of a little-known Illinois
FISCALLY CONSERVATIVE BLOG FEEDS senator named Barack Obama:

Thursday Links [Cato at

Liberty]
SEP 17, 2009 03:31P.M.

• A new T-shirt for Senator Baucus: I worked for six months with
half a dozen members of the Senate Finance Committee, and all I
got was this lousy 223-page summary of what I hope the new
health care bill will look like.

• Why should evidence even matter in education policy? I mean,

we’re doing this for the children.

• Videos reveal tax-funded organization being used to help those

who want to open a brothel and illegally bring underage girls into
the United States as “sex workers.” Meet the two 20-something And speaking of health care mandates and how much they’re going to
who exposed it. cost young people, as the Washington Post was yesterday, I just had
lunch with Clark Ruper, program manager for Students for Liberty, who
• It’s time to narrowly define the mission in Afghanistan. “The told me he’d be on the Newshour with Jim Lehrer on PBS tonight. In the
United States does not have the patience, cultural knowledge or interview he told them that as a young healthy person he has voluntarily
legitimacy to transform what is a deeply divided, poverty stricken, chosen not to purchase health insurance and instead invests in his own
tribal-based society into a self-sufficient, non-corrupt, and stable savings. And he thinks a lot of young people make such choices and don’t
electoral democracy.” want a government mandate requiring them to buy government-
approved insurance. Check it out tonight on PBS.
• Podcast: The future of health insurance: You buy it, or else.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS security is the major issue, why not pay a guard $12 an hour to stand
watch?
Response to Matthew Yglesias
Isn’t it possible, just possible, that a bike center with even more racks
re: Uncle Sam’s $4 Million Bike could have been built for a lot less? Isn’t that the question that people
like Yglesias, who want more people on bikes and less in cars, should be
Rack [Cato at Liberty] asking?
SEP 17, 2009 02:07P.M.
I don’t see anything inherently governmental about building and
In response to my criticism of the new federally-financed $4 million bike operating parking garages or bike centers. The absolutely sorriest, most
center set to open at Union Station in Washington, DC, Think Progress poorly run parking garage system I’ve ever experienced is the one
blogger Matthew Yglesias says: managed by the State of Indiana where I used to work. I recall an
overcrowding situation — exacerbated by lousy management — in which
I look forward to the day when the Cato Institute does a blog the solution put forward was to just build another garage. Hey, someone
post denouncing each and every publicly financed parking lot else is going to pay for it so who cares, right? I often tell people that
or garage in the United States of America. young libertarians should spend a couple years working in the bowels of
government in order to reinforce their belief system with hands-on
I’ll take that bait…sort of… experience. I’m starting to think “progressives” and other unwavering
fans of all-things-government should do the same.
I denounce each and every federally financed parking lot or garage in the
United States of America on non-federal property. I’m one of those
quaint individuals who recognizes that the Constitution grants the
federal government specific enumerated powers. Using federal tax FISCALLY CONSERVATIVE BLOG FEEDS
dollars to finance local parking garages, lots, bike centers and racks is
not one of the powers granted to the federal government. So let me Funding ACORN [Cato at
rephrase my statement from yesterday: Look, I harbor no animosity
against [car drivers], but under what authority — legal or moral — does Liberty]
the federal government tax me in order to build [parking garages or lots] SEP 17, 2009 01:54P.M.
for parochial, special interests?
The ACORN scandal provides a good opportunity for citizens concerned
By the way, for an excellent study on the problems with federal subsidies about profligacy in Washington to explore some of the tools available to
to state and local government, please see my colleague Chris Edwards’ find out where their tax money goes.
“Federal Aid to the States: Historical Cause of Government Growth and
Bureaucracy.” A good place to start your research is the Federal Audit Clearinghouse on
the Census website. All groups receiving more than $500,000 a year
Here are a few additional random thoughts… from the government are required to file a report. Just type in “ACORN”
as the entity and the system pops up the group’s filings. My assistant
John Nelson summarized the federal programs and amounts received by
ACORN in recent years:

2003

Housing Counseling Assistance $1,168,388

Community Development Block Grants $388,273

Home Investment Partnership $8,000

Self-Help Homeownership Opportunity $204,082

Fair Housing Initiatives Program $85,000

I know so-called “progressives” like Yglesias don’t lose sleep over how
much money the federal government spends, but $4 million to park a Total $1,853,743
hundred or so bikes? As one reader of my original post noted, if bike
2004

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

Housing Counseling Assistance $2,209,009 Subsidy information is also available from IRS Form 990, which is filed
by all non-profit groups and compiled at Guidestar and other websites. I
Community Development Block Grants $221,007 am not an expert on this data, but Velma Anne Ruth of ABS Community
Research has done a detailed analysis, which she kindly sent to me. She
Home Investment Partnership Program $21,092 finds that federal funding for ACORN was about $1.7 million in 2008
and about $2.2 million in 2009.
Self-Help Homeownership Opportunity $127,183
Finally, a user-friendly website to research recipients of federal grants
Fair Housing Initiatives Program $105,000 and contracts is www.usaspending.gov.

Total $2,683,291 ACORN’s share of overall federal subsidies is tiny, but as thousands of
similar organizations have become hooked on 1,800 different federal
2005 subsidy programs, a powerful lobbying force has been created that
propels the $3.6 trillion spending juggernaut. ACORN’s own website
Housing Counseling Assistance $2,605,558 touts its lobbying success in helping to pass various big government
programs. So cutting off ACORN is a start, but just a small start at the
Community Development Block Grants $367,560 daunting task of cutting back the giant federal spending empire.

Self-Help Homeownership Opportunity $153,082

Fair Housing Initiatives Program $140,917 FISCALLY CONSERVATIVE BLOG FEEDS

Total $3,267,117 CAP’s Proposal to Add ‘Public

2006 Members’ to Corporate Boards
Housing Counseling Assistance $1,955,074 Is Flawed [Cato at
Self-Help Homeownership Opportunity $59,541 Liberty‘Public Members’ to
Rural Housing and Economic Development $47,619 Corporate Boards Is Flawed]
SEP 17, 2009 01:45P.M.
Fair Housing Initiatives Program $150,000
Today the Center for American Progress rolled out its proposal that we
Community Development Block Grants $238,809 add “public directors” to the boards of companies that have been bailed
out by the government. CAP scholar Emma Coleman Jordan argues that
Total $2,451,043 “public directors will provide a corrective to the boards of the financial
institutions that helped cause the crisis.”
2007
One has to wonder whether Ms. Jordan has ever heard of Fannie Mae
Housing Counseling Assistance $1,813,011 and Freddie Mac. If she had, she might recall that a substantial number
of the board members of Fannie and Freddie were so-called “public”
Self-Help Homeownership Opportunity $46,608 members appointed by the President. Perhaps she can ask CAP adjunct
scholar and former Fannie Mae executive Ellen Seidman to review the
Rural Housing and Economic Development $30,504 history of those companies for her.

Fair Housing Initiatives Program $60,000 Where’s the evidence that any of those Fannie/Freddie “public”
directors, whether they were appointed by Republican or Democrat
Community Development Block Grants $372,950 Presidents, ever once look out for the public interest? In fact all the
evidence points to these public directors looking out for the interests of
Total $2,323,073 Fannie and Freddie, often lobbying Congress and the Administration on
the behalf of these companies.
My colleague, Tad DeHaven, has discussed why these HUD programs
that funded ACORN ought to be abolished completely. I suppose CAP would tell us that having the regulators pick the directors
instead of the president would protect us from having those positions

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

filled with political hacks. Ms. Jordan argues that “regulators should any real analysis or, more important, any actual
determine most of the details of the public directorships—after all, they evidence.
have the most direct experience in trying to regulate private companies
that have received public funds.” We tried that route as well. In contrast One would expect “intelligence” reporting firms to have the same
to Fannie/Freddie, each of the twelve Federal Home Loan Banks had to incentives as politicians and other media: drum up fear to drum up
have a number of its directors appointed by its then regulator, the business. But there is value in providing actual facts and sound strategies
Federal Housing Finance Board. It was well known within the Beltway for responding to world events. As a non-expert, I’m not able to evaluate
that these appointments were more often political hacks than not. For the substance of the STRATFOR report or its conclusions, but I give
instance one long time director of the Federal Home Loan Bank of it credibility as a statement against interest.
Pittsburgh was the son of a senior member of the US House Committee
on Finance Services. Once again we’ve gone down this road, we know After the early ineptitude shown by the Obama Administration, I was
how this story ends. beginning to think that the steady drumbeat of news about preparation
for flu season was appropriate societal girding for what could be a
If we are truly interested in protecting the taxpayer, we should, first, end notable disease outbreak. I am more inclined now to believe that we are
the ability of the Federal Reserve to bailout companies, and second, as flushing more money down the drain because of fears the administration
quickly as possible remove any government involvement in these generated.
companies. Having the government appoint board directors only further
entangles the government into our financial system; and if Fannie and Overreaction harms the country, and it is the responsibility of
Freddie are a good guide, actually increases the chances of future governments—if they take a role—to quell impulses toward overreaction
bailouts. when incidents of national significance occur.

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

‘Behind the Headlines’? Despite Washington Legal Foundation

the Headlines! [‘Cato at Liberty] Opposes GBS Deal [Cato at
SEP 17, 2009 01:25P.M.
Liberty]
STRATFOR—a group I hadn’t heard of before—provides, in their words, SEP 17, 2009 01:17P.M.
“geopolitical intelligence – independent, non-ideological and non-
partisan analysis and perspective that is unavailable anywhere else in the Via James Grimmelmann, the Washington Legal Foundation, a group
world.” They also say they provide the “intelligence behind the known for its defense of property rights, filed an objection to the Google
headlines.” book deal earlier this month focusing on concerns related to those I
raised in my posts earlier this week.
Well, I was struck—delighted, really—to see them outright contradict the
headlines in a report of theirs that mercilessly skewers H1N1 (swine) flu WLF points out that the Supreme Court has mandated that plaintiffs
fears: seeking to certify a class must make a diligent effort to notify all affected
class members. According to the high court’s Shutts decision, this effort
It has been five months since the A(H1N1) influenza virus — must include—at a minimum—sending a letter to every identifiable
aka the swine flu — climbed to the top of the global media member of the class. In this case, this would mean sending a letter to
heap, and with the start of the Northern Hemisphere’s annual every address in the US Copyright Office’s database of authors. WLF
flu season just around the corner, the topic is worth questions whether this was done; the foundation reports that it never
revisiting. received notification related to any of the books for which it holds the
copyrights.
If you take only one fact away from this analysis, take this:
The U.S. Centers for Disease Control and Prevention Now, it might be objected that this process would be prohibitively
(CDC) believes that hospitalization rates and expensive. But if the class is so large that it’s impractical to notify all of
mortality rates for A(H1N1) are similar to or lower its members, then the class is certainly too large to expect a judge to
than they are for more traditional influenza strains. verify that the interests of all class members is being served by the
And if you take two facts away, consider this as well: settlement. If the class is too large to notify, then it’s too large to certify.
Influenza data are incomplete at best and rarely cross-
comparable, so any assertions of the likelihood of mass WLF also points out that the sprawling and heterogeneous class of
deaths are little more than scaremongering bereft of plaintiffs makes it unlikely that the plaintiffs’ lawyers can fairly represent

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

all parties who would be bound by the settlement:

For example, only those class members whose works have

already been copied by Google are entitled to cash payments
under the Settlement Agreement. Thus, the financial interests
of those whose works have been copied diverge from the
interests of class members whose works have not been
copied. The former have an interest in maximizing cash
payments, while the latter would prefer to see a smaller
portion of the settlement pot allocated to those cash
payments and a larger portion allocated to compensation for
copying to be performed by Google in the future.

Another distinction among class members involves orphan

works – that is, works whose owners are difficult (if not
impossible) to ascertain. The owners of orphan works (who
may not even know that they hold any ownership interests) A millennium or so ago, Steve Martin played a stadium with his stand-up
have an obvious interest in ensuring that a large portion of act. He got the crowd of tens of thousands to repeat a series of
settlement funds is dedicated to identifying the ownership of statements in unison. My favorite, for sheer irony: “We Are all
orphan works. On the other hand, the owners of works whose Individuals.”
ownership is readily identifiable have an interest in holding
down such search costs. If less money is devoted to such But, the thing is, we are.
search efforts, a correspondingly greater percentage of
settlement funds will be available to provide compensation This is why I never cease to be amazed by disagreements like the one
to them. currently playing out between the curriculum groups “Common Core,”
and “Partnership for 21st Century Skills.”
The point here isn’t that the amount allocated to orphan works searches
is too high (or too low), or that more (or less) should be allocated to pay Is there really one curriculum that is right for every child in this nation of
for previously-scanned books. The point is that a settlement involving 300 million people? Really?
millions of plaintiffs will inevitably enrich some plaintiffs at the expense
of others. This isn’t a problem that can be solved by changing the details Rather than fighting a winner-take-all Shootout at the O.K. Curriculum,
of the settlement. It’s a problem that can only be solved by limiting the which is what our illustrious leaders seem to want, how about this peace-
scope of the settlement to parties whose interests are actually loving alternative: we let teachers teach whatever and however they
represented by the plaintiffs’ attorneys. want, and we let families choose and pay for whichever schools they
think are best for their kids (with financial aid for those who need it).

‘Cause the thing is, a quarter century of econometric research is

FISCALLY CONSERVATIVE BLOG FEEDS repeating, in Steve-Martin-Like unison that: educational freedom
works.
Repeat after Me: “We Are All
Individuals” [Cato at
Liberty“We Are All
Individuals”]
SEP 17, 2009 01:14P.M.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS evolutionary mechanism of the common law is generally the best way to
establish these market-structuring defaults. Unlike Jim, I think
Online Privacy and Regulation sometimes it’s appropriate to resort to statute instead. This story from
Techdirt should suggest why:
by Default [Cato at Liberty]
SEP 17, 2009 12:52P.M. It’s still not entirely clear what online agreements are actually
enforceable and which aren’t. We’ve seen cases go both ways,
My colleague Jim Harper and I have been having a friendly internal with a recent ruling even noting that terms that are a
argument about Internet privacy regulation that strikes me as having hyperlink away, rather than on the agreement page itself,
potential implications for other contexts, so I thought I might as well may be enforceable. But the latest case, involving online
pick it up here in case it’s of interest to anyone else. Unsurprisingly, retailer Overstock went in the other direction. A court found
neither of us are particularly sanguine about elaborate regulatory that Overstock’s arbitration requirement was unenforceable,
schemes—and I’m sympathetic to the general tenor of his recent post on because, as “browserwrap,” the user was not adequately
the topic. But unlike Jim, as I recently wrote here, I can think of two notified. Eventually, it seems that someone’s going to have to
rules that might be appropriate: A notice requirement that says third- make it clear what sorts of online terms are actually
party trackers must provide a link to an ordinary-language explanation enforceable (if any). Until then, we’re going to see a lot more
of what information is being collected, and for what purpose, combined lawsuits like this one.
with a clear rule making those stated privacy policies enforceable in
court. Jim regards this as paternalistic meddling with online markets; I Evolutionary mechanisms are great, but they’re also slow, incremental,
regard it as establishing the conditions for the smooth functioning of a and in the case of the common law typically parasitic on the parallel
market. What do those differences come down to? evolution of broader social norms and expectations. That makes it an
uneasy fit with novel and rapidly changing technological platforms for
First, a question of expectations. Jim thinks it’s unreasonable for people interaction. The tradeoff is that, while it’s slow, the discovery process
to expect any privacy in information they “release” publicly—and when tends to settle on efficient rules. But sometimes having a clear rule is
he’s talking about messages posted to public fora or Facebook pages, actually more important—maybe significantly more important—than
that’s certainly right. But it’s not always right, and as we navigate the getting the rule just right. These features seem to me to weigh in favor of
Internet our computers can be coaxed into “releasing” information in allowing Congress, not to say what standards of privacy must look like,
ways that are far from transparent to the ordinary user. Consider this but to step in and lay down public default rules that provide a stable
analogy. You go to the mall to buy some jeans; you’re out in public and basis for informed consumers and sellers to reach their own mutually
clearly in plain view of many other people—most of whom, in this day beneficial agreements.
and age, are probably carrying cameras built into their cell phones. You
can hardly complain about being observed, and possibly caught on Finally, there’s the question of whether it’s constitutionally appropriate
camera, as you make your way to the store. But what about when you for federal legislators, rather than courts, to make that kind of decision. I
make your way to the changing room at The Gap to try on those jeans? If scruple to say how “the Founders intended” the Constitution to apply to
the management has placed an unobtrusive camera behind a mirror to e-commerce, but even on a very narrow reading of the Commerce Clause,
catch shoplifters, can the law require that the store post a sign informing this seems to fall safely within the purview of a power to “make regular”
you that you’re being taped in a location and context where—even commerce between the several states by establishing uniform rules for
though it’s someone else’s property—most people would expect privacy? transactions across a network that pays no heed to state boundaries. A
Current U.S. law does, and really it’s just one special case of the law patchwork of divergent standards imposed by judges and state legislators
laying down default rules to stabilize expectations. I think Jim sees the does not strike me as an especially market-friendly response to people’s
reasonable expectation in the online context as “everything is potentially online privacy concerns, but that appears to be the alternative. If there’s
monitored and archived all the time, unless you’ve explicitly been a way to address those concerns that’s both constitutionally appropriate
warned otherwise.” Empirically, this is not what most people and works by enabling informed choice and contract rather than
expect—though they might begin to as a result of a notice requirement. nannying consumers or micromanaging business practices, then it seems
to me that it makes sense for supporters of limited government to point
Now, as Jim well knows, there are many cases in which the law sets that solution out.
defaults to stabilize expectations. Under the common law doctrine of
implied warranty, when you go out and buy a toaster, you do not
explicitly write out a contract in which it’s stipulated that the thing will
turn on when you get home and plug it in, that it will toast bread without
bursting into flames, and so on. Markets would not function terribly well
if you did have to do this constantly. Rather, it’s understood that there
are some minimal expectations built into the transaction—toasters toast
bread!—unless the seller provides explicit notice that this is an “as is”
sale. This brings us to a second point of divergence: Like Jim, I think the

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FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Is the Tide Turning on Free Where is President Obama’s

Speech? [The Club for Growth] Health Care “Plan”? [Americans
SEP 17, 2009 12:26P.M.
for Tax Reform“Plan”?]
I take this as a good sign — the liberal Denver Post had a great editorial SEP 17, 2009 12:23P.M.
earlier this week on the Citizens United case and had this to say:
Obama “plan” as transparent as a Cheney cabinet meeting, says Norquist
In other words, the government’s case is that showing a film, Click here for PDF WASHINGTON, D.C. — Last week, President Obama
simply because it has procured its funding from an spoke at length about what he called “my pl...
unacceptable entity, can be considered illegal speech. Well,
then, how about other media? For-profit corporations
produce timely and hard-hitting, politically motivated books
about candidates all the time. McCain-Feingold law bans the FISCALLY CONSERVATIVE BLOG FEEDS
broadcast, cable or satellite transmission of “electioneering
communications” of political material 30 days before a Australian Trade Scholars Offer
primary and 60 days before the general election. So could the
Federal Election Commission ban political books? The Perfect Cure for “Protectionitis”
answer, incredibly enough, is yes.
[Cato at Liberty“Protectionitis”]
*** SEP 17, 2009 12:00P.M.

Most Americans react in disgust to the idea of “banning a

book.” But why should it be any more acceptable for the FEC
to ban a movie on the grounds that it has a political message?
Why should the FEC even decide what constitutes a political
message? Yes, “Hillary The Movie” amounted to transparent
political electioneering, but quite often messaging can be
subtle. Where does this kind of regulation end? Fortunately
we may not find out. It looks as if the Supreme Court will
reject regulation of the movie and, according to experts
watching the proceedings, perhaps even overrule two earlier
decisions that restrict the manner in which corporations and
unions take part in campaigns. How broadly the court will
rule is what’s important now. When Solicitor General Elena
Kagan was making a case for the FEC to keep jurisdiction
over regulating the distribution of political materials, she
claimed that “the FEC has never applied this statute to a
book.” This isn’t enough to comfort us. Chief Justice Roberts’ Earlier this month, the Lowy Institute in Australia published a paper
reply to Kagan was on point: “We don’t put our First offering some very sound and, obviously, very timely advice about how to
Amendment rights in the hands of FEC bureaucrats.” We contain, and ultimately, eradicate protectionism. The paper is being
certainly hope not. circulated among the G20 delegations, who will undoubtedly discuss the
topic of trade and protectionism in Pittsburgh next week. So for those of
you interested in getting a sense of what will probably be the single best
idea on (or at least near) the table at the G20 summit, I highly
recommend this 20-pager.

The solution proposed by the authors boils down to a two-word phrase:

“Domestic Transparency.” What is meant by that phrase is that
“defeating protectionism begins at home.” And by that slogan, the
authors mean that the key to reducing, and ultimately eliminating,
protectionism is not external pressure from other countries, mercantilist
trade negotiations, or filing trade complaints at the WTO, but rather

9
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

greater awareness at home of the real costs of protectionism. I couldn’t FISCALLY CONSERVATIVE BLOG FEEDS
agree more. (In fact better transparency is one of our recommendations
in this paper). Republicans Just as Guilty of
When governments impose trade barriers at the behest of special Flawed Keynesian Thinking
interests, they usually justify that protectionism with diversionary
rhetoric concerning some vague conception of the “national interest,” [Cato at Liberty]
and the imperative of shielding domestic business from unfair SEP 17, 2009 11:51A.M.
competition and other vagaries of the globalized economy. That the
protectionist measure itself—the product of special interests diverting The core of Keynesian economic policy is that the government must
productive resources from economic to political ends—forces involuntary come in and replace reductions in private sector demand with public
and usually unknowing subsidization of those protection-seekers by the sector demand, therefore bringing overall demand back to its previous
same citizens at large who are expected to buy into the national interest level. One of the many flaws in this thinking is in assuming that the
canard is a detail about which most people remain in the dark. previous level of demand was “correct” and getting us back to that level
is the appropriate policy response.
The central theme of the Lowy paper is that once people become
informed about the costs of protectionism, not only to the broader Take the example of the housing market and the government response.
economy, but in terms of what it means for their own personal budgets, The primary response of Republicans in Washington has been to offer
politicians and lobbyists will find it much more difficult to concoct tax credits and other incentives to replace the drop in demand for
protectionist schemes. housing. Witness Senator Johnny Isakson’s recent comments on why we
need to extend the $8,000 homebuyer tax credit: “If you take that kind
That this paper is written by Australians is no accident. The Aussies have of business out of what’s already a very weak housing market, you do
experience and credibility implementing a successful domestic nothing but protract and extend the recession.”
transparency regime, which entailed the establishment of an
independent authority (independent from the levers of government and This analysis could not be more wrong. The tax credit largely acts to keep
business) to provide advice to governments that is “disinterested, open housing prices from falling further. However, that is how markets are
to public scrutiny, and formulated from the perspective of national supposed to clear in an environment of excess supply. If there’s too much
welfare rather than the needs of particular producer groups.” The housing, the way to address that is to allow housing prices to fall, which
establishment of that agency (oddly named the “Industries Assistance attracts buyers back into the market.
Commission”—one of the authors, Bill Carmichael, is the former
Chairman of the IAC) in 1974 and its successor agency (also oddly named We should also recognize that the tax credit does not help the buyer, it
the “Productivity Commission”) are widely credited with exposing the helps the seller, by allowing the seller to charge that much more for the
costs of protectionism to Australians, who subsequently supported price of the home.
dramatic waves of trade liberalization and have since been skeptical of
efforts of industries to secure protection. Perhaps the worst impact of the policy is that it encourages the
continued building of homes, only adding to the over-supply, which itself
In this country, the U.S. International Trade Commission is an agency will “protract and extend the recession.” Witness the recent news that
with a stable of economists that measures the welfare effects of trade housing starts in the US just hit a nine month high. While these levels
liberalization and protectionism. While it may have the resources to are still low in historic terms, and housing inventories are declining, we
conduct the analyses, it doesn’t have the independence. Regrettably, ITC still have an excess of housing. The damage done by creating a false floor
studies are often subject to the whims of politics, particularly when the to housing prices is that builders don’t respond to inventory, they
objectivity and facts in their reports don’t comport with politicians’ respond to prices, and as long as there is a positive gap between prices
“expectations.” We need something similar to Australia’s domestic and construction costs, builders will build. The tax credit only serves to
transparency institution in the United States, and in other countries, too. widen that gap between prices and construction costs.

G20 members should seriously consider the proposal in this excellent Back to Keynes: the central flaw in the thinking behind the tax credit
Lowy paper. proposal is its assumption that we need to re-inflate the housing bubble.
The previous level of housing demand, from say 2003 to 2006, was not
driven by fundamentals; we had a bubble. There will be a correction in
the housing market. Our choices are to either take that correction quickly
and move on, or to prolong that correction, maybe even make it worse,
by trying to create a false floor to the market.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS • “As Governor, Bob McDonnell will leverage stimulus funding to
incentivize individuals and businesses to conduct energy audits
Bob McDonnell: The Modern and encourage public private partnerships between small
businesses and government.”
Republican [Cato at Liberty]
SEP 17, 2009 11:42A.M. It’s true that McDonnell’s plan has some free market elements, and also
that Ronald Reagan supported some wasteful energy boondoggles.
This is from the Reagan administration’s deregulatory 1981 energy plan: However, the degree to which the modern Republican wants to
“All Americans are involved in making energy policy. When individual micromanage and manipulate the energy industry is remarkable.
choices are made with a maximum of personal understanding and a McDonnell is almost setting out a Soviet five-year plan for a substantial
minimum of government restraints, the result is the most appropriate part of the Virginia economy. For goodness sakes, he wants to treat
energy policy.” Virginia like a separate country and try to fix the supposed problem that
it is “importing” too much energy from other states!
Many modern Republicans claim devotion to Ronald Reagan’s ideas, but
they often seem to forget about the “minimum of government” thing. The It’s not just energy. Look at the top-down central planning ideas that
following points are from Republican Virginia gubernatorial candidate McDonnell has for “creating jobs”:
Bob McDonnell’s “More Energy, More Jobs” plan:
• “Expanding use of the Governor’s Opportunity Fund by roughly
• “McDonnell was the chief sponsor of legislation creating the doubling the funding available and broadening Fund rules to allow
Virginia Hydrogen Energy Plan.” companies that generate additional state and local tax revenue to
qualify.”
• “McDonnell also supported grant programs for solar photovoltaic
manufacturing, tax exemptions for solar energy and recycling • “Appointing Lieutenant Governor Bolling to serve as “Virginia’s
property, and tax credits for solar energy equipment.” Chief Job Creation Officer” in the McDonnell/Bolling
Administration.”
• “In order to protect Virginia’s citizens from the skyrocketing
wholesale prices of electricity seen in other states, McDonnell • “Designating one Deputy Secretary of Commerce to Focus Solely on
brought together all the necessary stake holders to re-regulate Rural Economic Development.”
electricity in Virginia.”
• “Providing a $1,000 tax credit per job to businesses that create 50
• “Currently, Virginia is the second largest importer of electricity new jobs, or 25 new jobs in economically distressed areas.”
behind California. This is unacceptable.”
• “Double the funding for the Virginia Tourism Corporation.
• “Bob McDonnell will establish Virginia as a Green Jobs Zone to Currently Virginia trails 14 states including West Virginia and
incentivize companies to create quality green jobs. Qualified Tennessee in tourism funding.”
businesses would be eligible to receive an income tax credit equal
to $500 per position created per year for the first five years.” • “Increase funding for the Governor’s Motion Picture Fund by $2
million.”
• “The Virginia Alternative Fuels Revolving Fund was established to
assist local governments that convert to alternative fuel systems . . . • “Providing a $1,000 tax credit per job to businesses that create 50
Bob McDonnell will expand the purpose of this fund to include new jobs, or 25 new jobs in economically distressed areas.”
infrastructure such as refueling stations, provide seed money and
aggressively pursue additional grants.” Again, McDonnell mixes some pro-market proposals in with these Big
Government interventions. And his opponent, Creigh Deeds, is
• “Bob McDonnell will make Southwest and Southside Virginia the promoting his own interventionist schemes, many very similar
nation’s hub for traditional and alternative energy research and to McDonnell’s.
development…To assist with the attraction, building and operation
of major energy facilities in Southside and Southwest Virginia, we In 1980, the difference between Jimmy Carter and Ronald Reagan on
will also support the establishment of the Center for Energy.” economic policy was clear. But today, we seem to have arrived at a point
where it’s virtually impossible to tell the difference in economic
• “To help Virginia universities gain access to federal stimulus platforms between a self-proclaimed conservative Republican and a
money, as Governor, Bob McDonnell will establish the Virginia liberal Democrat.
Universities Clean Energy Development and Economic Stimulus
Foundation.”

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Taxpayers, Anyone? And How Have the Democrats

About Tuition Inflation? [Cato Outsmarted the Republicans on
at Liberty] Health Care? [Cato at Liberty]
SEP 17, 2009 11:37A.M. SEP 17, 2009 11:26A.M.

The Student Aid and Fiscal Responsiblilty Act will probably be approved In their attempt to defeat Obamacare, Republicans have focused their
by the House of Representatives today, and to push it along the bill’s criticism on the public option, painting it as the most objectionable
sponsor, Rep. George Miller (D-CA), makes clear for whom he is feature of existing proposals. Senator Max Baucus, (D-Mont.), has now
working: proposed a plan without the public option. This leaves the Republicans
in an awkward position, especially since Baucus’s plan is projected to
Let’s remember whose voices really matter here. It’s time to cost less than earlier proposals.
listen to our students and our families.
If Republicans oppose the Baucus plan, they surely risk the ire of voters
First of all, do the voices of taxpayers not matter at all? You know, the who will be told during the mid-term elections, “The Republicans
folks who are going to foot the bill for all this largesse? Oh yeah – blocked a plan that would have covered the uninsured and reduced the
concentrated benefits, diffuse costs. And have students and their families deficit.”
really been trees falling in the wilderness with no one to hear them? With
inflation-adjusted aid per full-time-equivalent student (table 3) rising The problem is, the public option was never the crucial issue; instead, it
from $4,454 in 1987 to $10,392 in 2007 — a 134 percent increase — it was the mandate to purchase insurance. Once government mandates
sure doesn’t seem so. insurance coverage, it gets to define what constitutes insurance, which
means it can ban pre-existing condition clauses and the like. The
In fairness, the bill’s proponents have paid lip service to taxpayers, mandate also”justifies” large subsidies for insurance, to avoid non-
saying with straight and utterly deceptive faces that SAFRA won’t cost compliance with the mandate. So, an individual mandate, which the
taxpayers a dime. The thing is, not only is this totally unsupportable Baucus plan includes, implies a rapid takeover of the entire health care
according to several Congressional Budget Office analyses, system by the federal government.
it completely ingores that tax money is covering all of the costs of the
bill. SAFRA would simply transfer taxpayer ducats from backing Something like the Baucus plan will pass. It will either cost far more than
ostensibly private loans to loans directly from Washington, as well as lots existing projections, if government administrators fail to impose the
of other federal expenditures. restrictions on reimbursements that generate the projected cost savings,
or it will involve massive rationing of care.
And then there’s this: SAFRA supporters can talk all they want about
helping students and families, but increasing grants and The Democrats played it perfectly. The Republicans got sucker-punched.
loans ultimately just hurts college-goers. Why? Because colleges and
universities raise their prices to capture every additional penny of aid, as C/P Libertarianism, from A to Z
basic economics makes clear they would. So the only people politicians
are ultimately helping are colleges, and by appearing to care ever so
much about likely voters, themselves.

12
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS Recently, the Club aired a TV ad highlighting the
dangers of Wyden-Bennett and mailed 3,200 likely
Thursday’s Daily News [The delegates to the next Utah State Republican
Convention urging them to call on Senator Bennett
Club for Growth] to drop his plan for government-run healthcare.
SEP 17, 2009 11:22A.M.
“It’s time for Senator Bennett to come clean,” added
THE DAILY NEWS Baucus Plan: Public Option Lite - Wall Street Chocola. “He claims to be a victim of false attacks,
Journal Editorial Baucus’s Take on the Takeover - National Review and then he turns up for a back room meeting at the
Editorial Does Anybody Actually Like the Baucus Bill? - D. Thompson, White House as liberal Democrats are searching for
The Atlantic Pay More, Get Less - Michael Tanner, Cato Institute Is a vehicle to pass government-run healthcare. Which
Health Care Reform Constitutional? - IBD Editorial Democrats Join GOP is it? Does Senator Bennett stand with his
Czar Wars - Manu Raju, The Politico Cap and Tax: It’s a Doozy - Union constituents or with the hard left?”
Leader Editorial All Talk on Trade - Washington Post Editorial Will
Obama Rue His Trade Tariff on China’s Tires? - CS Monitor Editorial
Dems Pull Back on Specter’s Card-Check Prediction - The Hill Cubs 5,
Brewers 9 - Associated Press FISCALLY CONSERVATIVE BLOG FEEDS

Obama’s Twisted Logic [The

FISCALLY CONSERVATIVE BLOG FEEDS Club for Growth]
SEP 17, 2009 10:16A.M.
Club: Bob Bennett Caught Red
Forget the argument about President Obama’s politics. The world should
Handed [The Club for Growth] focus on his policy decisions and then really question whether he has
SEP 17, 2009 11:06A.M. sound judgment. On health care, he’s claiming that we have to spend
money in order to save money. On the stimulus, he’s claiming that we
have to take money from the private sector (through massive
Senator Bob Bennett Caught government spending) in order to enrich the private sector. On trade,
Red Handed he’s claiming that we have to restrict trade (i.e. tire tariffs) in order to
expand trade. Can anyone describe this as anything other than twisted
logic?

Washington – As a healthcare reform bill sponsored

by Senate Finance Chairman Max Baucus drew
FISCALLY CONSERVATIVE BLOG FEEDS
sharp criticism across Capitol Hill yesterday,
President Obama quietly held a White House
meeting with Senators Bob Bennett and Ron Wyden,
Democrat Senator Rips Middle
both sponsors of a rival healthcare proposal. The
meeting late Wednesday afternoon was not on the
Class Taxes in the Baucus
President’s public schedule, but administration
officials confirmed it took place.
Health Care Bill [Americans for
“Utahans deserve to know what kind of big
Tax Reform]
SEP 17, 2009 10:07A.M.
government healthcare takeover Senator Bennett is
negotiating behind closed doors with President
Senator Baucus released his supposedly “moderate” health care proposal
Obama and liberal Democratic Senator Ron Wyden,”
yesterday, and he is already drawing fire from Democrat Senator Jay
said Club President Chris Chocola.
Rockefeller (W. Va..) for raising taxes! Roc...

Wyden and Bennett have long pushed a reform bill

that would put the government in near total control
of our health insurance market, leaving Americans
with fewer choices and massive tax increases to pay
for it all.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

When Stimulus Is No Stimulus Quote of the Day [The Club for

[Cato at Liberty] Growth]
SEP 17, 2009 09:40A.M. SEP 17, 2009 09:21A.M.

The Obama administration has been touting its wasteful “stimulus” Here’s a report from Crain’s Chicago Business about a recent speech
package as the answer to the recession. Now that Uncle Sam has started given by RINO Rep. Mark Kirk, who is running for the Senate in Illinois:
his spending binge, John Cogan, John Taylor, and Volker Wieland assess
the result. Their conclusion: for all of the money spent, the effort wasn’t [A] congressman known for his pro-environmental stances
much of a stimulus. said he voted the way he did on [cap and trade] because, “It
was in the narrow interests of my congressional district.
They write in the Wall Street Journal:
“But,” he quickly added as some in the Republican crowd
Direct evidence of an impact by government spending can be booed, “as your (senator), representing the entire state of
found in 1.8 of the 5.4 percentage-point improvement from Illinois, I would vote ‘no’ against the bill coming up, and
the first to second quarter of this year. However, more than that’s because we are manufacturing, agriculture and coal
half of this contribution was due to defense spending that was state.”
not part of the stimulus package. Of the entire $787 billion
stimulus package, only $4.5 billion went to federal purchases So it’s not about whether a policy is constitutional or not, it’s about
and $17.7 billion to state and local purchases in the second whether it will please the special interests. Right.
quarter. The growth improvement in the second quarter must
have been largely due to factors other than the stimulus HT: Steve Bartin
package.

Incoming data will reveal more in coming months, but the

data available so far tell us that the government transfers and FISCALLY CONSERVATIVE BLOG FEEDS
rebates have not stimulated consumption at all, and that the
resilience of the private sector following the fall 2008 panic Public Schools Should TEACH
not the fiscal stimulus program deserves the lion’s share of
the credit for the impressive growth improvement from the Lord of the Flies, Not REENACT
first to the second quarter. As the economic recovery takes
hold, it is important to continue assessing the role played by It [Cato at Liberty]
the stimulus package and other factors. These assessments SEP 17, 2009 08:36A.M.
can be a valuable guide to future policy makers in designing
effective policy responses to economic downturns. Let the Common School be expanded to its capabilities, let it
be worked with the efficiency of which it is susceptible, and
If policymakers really want to stimulate the economy, they will stop nine tenths of the crimes in the penal code would become
prodigiously wasting money, unfairly redistributing people’s earnings, obsolete; the long catalogue of human ills would be abridged;
making the tax system ever more complex, and imposing job-killing men would walk more safely by day…
regulations. In other words, politicians will stop being politicians. – Horace Mann, the father of U.S. public schooling, 1841

How would Mann have reacted, I wonder, to the knowledge that his
Common Schools would be expanded beyond his wildest expectations,
end up enrolling 50 million children at a cost of over half a trillion
dollars annually, and produce results like this:

14
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS

New York Charging Businesses

to Comply with Requirement
[Tax Foundation]
SEP 17, 2009 12:00A.M.

New York is not only forcing out-of-state businesses to become tax

collectors, they’re now charging for the privilege. From the Buffalo
News:

The New York State Department of Taxation and Finance is sending out
And of course this attack wasn’t unique. A search for “school fight” on letters ordering businesses to renew their sales tax certificates — the
YouTube returns over 100,000 hits. How do private and charter schools piece of paper that allows them to collect sales tax on behalf of the state
compare to traditional public schools when it comes to safety and crime? — and pay a renewal fee of $50 apiece.[...]
Have a look at the Heritage Foundation’s recent study of the DC area.
The fees collected are expected to raise about $34 million for the state
And as for “the efficiency of which” Mann believed public schools were over three years.[...]
“susceptible,” it’s hard to find any sign of it a century-and-half into our
experiment with them: Companies that do less than $37,000 in taxable sales annually and file
once a year are exempt from the fee, but must renew registration.
U.S. Total Per Pupil Spending vs. Achievement of 17-year-olds
Given that Americans are suspicious of tax increases, politicians often
turn to fees (or calling things fees) for revenue. To the extent that the
money compensates the government for the cost of providing a
particularized service to a select group, it’s a valid fee. But if the group is
just getting squeezed with the money is going to the general fund, it’s a
tax.

It’s hard to say here. Who knows what it really costs New York to provide
the “service” of getting a sales tax license. $34 million a year sounds like
a lot. Businesses are required by law to get the license, so there’s not
much of a market here either. And paying a tax to collect a tax sounds a
lot like that California law we helped strike down.

It also reminds me of the first national tax in the U.S., where whiskey tax
collectors were charged for the privilege of collecting the tax. Of course,
they got to keep a sizeable cut of the proceeds. If they could avoid being
tarred-and-feathered, that is.
Do we wait another century and a half to see if public schools will end
crime and start spending efficiently? Or do we give families and
taxpayers alternatives today?

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Peter Schiff Announces More Evidence on America’s

Candidacy for Senate [Reason Socialism [Cato at Liberty]
SEP 16, 2009 04:48P.M.
TV]
SEP 17, 2009 12:00A.M. KPMG has released its annual survey of personal income tax rates
around the world. The survey covers 86 countries, including all the high-
... income nations and many middle- and lower-income nations, such as
Brazil, China, and India.

The chart shows the top personal income tax rates in 2009 for national
FISCALLY CONSERVATIVE BLOG FEEDS governments, per the KPMG study. The current top U.S. rate is 35
percent, which is substantially above the 86-country average of 28.9
The Empirical Evidence Against percent. The Obama administration plans to let the U.S. rate jump to
39.6 percent in 2011, which would be almost 11 points higher than the
Big Government [Reason TV] international average.
SEP 17, 2009 12:00A.M.
Worse still, the United States has state income taxes with rates up to 10
Building on a previous mini-documentary that focused on theory, this percent that are piled on top of the federal tax. Some of the nations in the
video from the Center for Freedom and Prosperity Foundation presents survey (e.g. Canada) also have subnational income taxes, but many, or
real-world data and research showing that the burden of government most, of them do not.
spending is far too high not only in the United States (where the Bush-
Obama policies have increased the federal budget by more than 100 Finally, note that supporters of government health care expansion have
percent), but also in other nations where government budgets sometimes been eyeing further increases in the top U.S. tax rate above 40 percent.
consume more than one-half of an economy’s output. Alas, we need more of the Global Tax Revolution to sweep across our
www.freedomandprosperity.org shores.

FISCALLY CONSERVATIVE BLOG FEEDS

Wednesday Links [Cato at

Liberty]
SEP 16, 2009 05:43P.M.

• Quantifying misery in Iran.

• Why sending more troops to Afghanistan would only weaken the

authority of Afghan leaders and undermine the U.S.’s ability to deal
with security challenges elsewhere in the world. Plus, an exit
strategy for Afghanistan.

• Grading the Baucus health plan: The good, the bad and the ugly.

• Who’s really indoctrinating the nation’s schoolkids.

• Podcast: How to quietly tax the poor, anger a giant nation, and
reward a labor union, all at the same time!

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS First, this is not an instance where legal privileges are “extended to
America’s enemies in Afghanistan.” The petition from Bagram originally
Speaking in Nashville [Cato at had four plaintiffs, none of whom were captured in Afghanistan – they
were taken into custody elsewhere and moved to Bagram, which is quite
Liberty] a different matter than a Taliban foot soldier taken into custody after an
SEP 16, 2009 03:54P.M. attack on an American base. As Judge Bates says in his decision, “It is
one thing to detain t
I’ll be giving two talks in Nashville on Tuesday, September 29.
hose captured on the surrounding battlefield at a place like Bagram,
At 5:00 p.m., I’ll speak at the Vanderbilt University Law School, in the which [government attorneys] correctly maintain is in a theater of war. It
Moore Room on the second floor, on a joint Law School-Owen Business is quite another thing to apprehend people in foreign countries – far
School panel, “Drug Legalization and Emerging Economic from any Afghan battlefield – and then bring them to a theater of war,
Opportunities.” Audience will be mostly law and business students, but where the Constitution arguably may not reach.”
it’s open to the public.
Judge Bates also took into account the political considerations of hearing
Then I’ll speak on the current political situation at an event sponsored by a petition from Haji Wazir, an Afghan man detained in Dubai and then
America’s Future Foundation and the Tennessee Policy Center at
Mulligan’s Pub in downtown Nashville (117 2nd Ave N., Nashville, TN moved to Bagram. Because of the diplomatic implications of ruling on an
37201-1901). Drinking will start at 6:30, and I’ll make remarks about Afghan who is on Afghan soil, Bates dismissed Wazir’s petition. So much
7:30. You can RSVP for that event here. for judicial “despotism” and judicial interference on the battlefield,
unless you define the world as your battlefield.
I hope to see Nashville-area friends at one or both events.
Second, the detainees have not been given very much process. Their
detentions have been approved in “Unlawful Enemy Combatant Review
Boards.” Detainees in these proceedings have no American
FISCALLY CONSERVATIVE BLOG FEEDS representative, are not present at the hearings, and submit a written
statement as to why they should be released without any knowledge of
Bagram, Habeas, and the Rule what factual basis the government is using to justify their detention. This
is far less than the Combatant Status Review Tribunal procedures held
of Law [Cato at Liberty] insufficient in the Supreme Court’s Boumediene ruling.
SEP 16, 2009 03:42P.M.
Yes, Fix Detention in Afghanistan
Andrew C. McCarthy has an article up at National Review criticizing a
recent decision by Obama administration officials to improve the McCarthy then chides the Obama administration for trying to get ahead
detention procedures in Bagram, Afghanistan. of the courts by affording more process to detainees: “See, we can give
the enemy more rights without a judge ordering us to do so!”
McCarthy calls the decision an example of pandering to a “despotic”
judiciary that is imposing its will on a war that should be run by the Well, yes. We should fix the detention procedures used in Afghanistan to
political branches. McCarthy’s essay is factually misleading, ignores the provide the adequate “habeas substitute” required by Boumediene so
history of wartime detention in counterterrorism and counterinsurgency, that courts either: (1) don’t see a need to intervene; or (2) when they do
and encourages the President to ignore national security decisions review detention, they ratify the military’s decision more often than not.
coming out of the federal courts.
Thing is, the only substitute for habeas is habeas. Habeas demands a
More details after the jump. hearing, with a judge, with counsel for both the detainee and the
government, and a weighing of evidence and intelligence that a federal
McCarthy is Factually Misleading court will take seriously. If the military does this itself, then the success
rate in both detaining the right people and sustaining detention
McCarthy begins by criticizing a decision by District Judge John Bates to decisions upon review are improved.
allow three detainees in Bagram, Afghanistan, to file habeas corpus
petitions testing the legitimacy of their continued detention. McCarthy This is nothing new or unprecedented. Salim Hamdan, Usama Bin
would have you believe that this is wrong because they are held in a Laden’s driver, received such a hearing prior to his military commission.
combat zone and that they have already received an extraordinary The CSRT procedures that the Bagram detainees are now going to face
amount of process by wartime detention standards. He is a bit off on were insufficient to subject Hamdan to a military commission, so Navy
both accounts. Captain Keith Allred granted Hamdan’s motion for a hearing under
Article V of the Geneva Conventions to determine his legal status.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

Allred found that Hamdan’s service to Al Qaeda as Osama Bin Laden’s weapon.
driver and occasional bodyguard, pledge of bayat (allegiance) to Bin
Laden, training in a terrorist camp, and transport of weapons for Al History dictates an approach that uses military force as a means to re-
Qaeda and affiliated forces supported finding him an enemy combatant. impose order and the law to enforce it. The United States did this in Iraq,
Hamdan was captured at a roadblock with two surface-to-air missiles in separating hard core foreign fighters from local flunkies and conducting
the back of his vehicle. The Taliban had no air force; the only planes in counterinsurgency inside its own detention facilities. The guys who were
the sky were American. Hamdan was driving toward Kandahar, where shooting at Americans for a quick buck were given some job training and
Taliban and American forces were engaged in a major battle. The officer signed over to a relative who assumed legal responsibility for the
that took Hamdan into custody took pictures of the missiles in Hamdan’s detainee’s oath not to take up arms again. We moved detainees who
vehicle before destroying them. could be connected to specific crimes into the Iraqi Central Criminal
Court for prosecution. We did all of this under the Law and Order Task
Hamdan’s past association with the Ansars (supporters), a regularized Force, establishing Iraqi criminal law as the law of the land.
fighting unit under the Taliban, did not make him a lawful combatant.
Though the Ansars wore uniforms and bore their arms openly, Hamdan We did the same in Vietnam, establishing joint boards with the
was taken into custody in civilian clothes and had no distinctive uniform Vietnamese to triage detainees into Prisoner of War, unlawful
or insignia. Based on his “direct participation in hostilities” and lack of combatant, criminal defendant, and rehabilitation categories.
actions to make him a lawful combatant, Captain Allred found that
Hamdan was an unlawful enemy combatant. The Washington Post article on our detention reforms in Afghanistan
indicates that we are following a pattern similar to past conflicts. How
Hamdan’s Article V hearing should be the template for battlefield this is a novel and dangerous course of action escapes me.
detention. Charles “Cully” Stimson at the Heritage Foundation, a judge
in the Navy JAG reserves and former Bush administration detainee Who’s the Despot Here?
affairs official, wrote a proposal to do exactly that, Holding Terrorists
Accountable: A Lawful Detention Framework for the Long War. McCarthy points to FDR as a model for our actions in this conflict
between the Executive and Judiciary branches. He says that the
The more we legitimize and regularize these decisions, the better off we President should ignore the judgments of the courts in the realm of
are. Military judges should be writing decisions on detention and national security and their “despotic” decrees. I do not think this word
publishing declassified versions in military law reporters. One of the means what he thinks it means.
great tragedies of litigating the detainees from the early days in
Afghanistan is that a number were simply handed to us by the Northern FDR was the despot in this chapter of American history, threatening to
Alliance with little to no proof and plenty of financial motive for false pack the Supreme Court unless they adopted an expansive view of
positives. My friends in the service tell me that we are still running quite federal economic regulatory power. The effects of an expansive reading
a catch-and-release program in Afghanistan. I attribute this to arguing of the Commerce Clause are felt today in an upending of the balance of
over dumb cases from the beginning of the war when we had little power that the Founders envisioned between the states and the federal
cultural awareness and a far less sophisticated intelligence apparatus. government.
Detention has become a dirty word. By not establishing a durable legal
regime for military detention, we created lawfare fodder for our enemies McCarthy does not seem bothered by other historical events involving
and made it politically costly to detain captured fighters. the President’s powers as Commander-in-Chief in the realm of national
security. The Supreme Court has rightly held that the President’s war
The Long-Term Picture powers do not extend to breaking strikes at domestic factories when
Congress declined to do so during the Korean War, trying American
McCarthy, along with too many on the Right, is fixated on maintaining citizens by military commission in places where the federal courts are
executive detention without legal recourse as our go-to policy for still open and functioning, and declaring the application of martial law to
incapacitating terrorists and insurgents. In the long run we need to civilians unconstitutional while World War II was under way.
downshift our conflicts from warmaking to law enforcement, and at
some point detention transitions to trial and conviction. The Constitution establishes the Judiciary as a check on the majoritarian
desires of the Legislature and the actions of the Executive, even during
McCarthy might blast me for using the “rule of law” approach that he wartime. To think otherwise is willful blindness.
associates with the Left and pre-9/11 counterterrorism efforts. Which is
fine, since, just as federal judges “have no institutional competence in
the conduct of war,” neither do former federal prosecutors.

Counterterrorism and counterinsurgency are not pursued solely by

military or law enforcement means. We should use both. The military is
a tool of necessity, but in the long run, the law is our most effective

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

FISCALLY CONSERVATIVE BLOG FEEDS SAFRA’s sponsor, Rep. George Miller (D-CA), has been touting his bill as
a revolutionary money saver since day one.
Americans for Tax Reform
The truth on this thing is out there, but it’s definitely not in the New
Sponsors 2009 Pacific Rim York Times.

Policy Exchange [Americans for

Tax Reform] FISCALLY CONSERVATIVE BLOG FEEDS
SEP 16, 2009 03:34P.M.
Why Wall Street Loves Obama
Americans for Tax Reform along with the Property Rights Alliance,
International Policy Network, World Taxpayers Association, and Acton [Cato at Liberty]
Institute, is sponsoring the third annual Pacific Rim Polic... SEP 16, 2009 02:21P.M.

FISCALLY CONSERVATIVE BLOG FEEDS

NYT Nonsense on SAFRA [Cato

at Liberty]
SEP 16, 2009 02:29P.M.

With the Student Aid and Fiscal Responsibility Act (SAFRA) likely to be
voted on by the full House or Representatives today, the media is
finally giving some space to debate over the bill. Unfortunately, the New
York Times only pays attention to the parts it likes, writing in an
editorial today that:

The private lenders and those who do their bidding in

Congress have recently taken issue with a Congressional Was it just me, or did there seem to be a whole lot of applause during
Budget Office analysis that showed that the bill would save Obama’s Wall Street speech? Remember this was a room full of Wall
about $87 billion over the next 10 years. Street executives. The President even started by thanking the Wall Street
They argue, absurdly, for example, that the savings would be execs for their “warm welcome.”
smaller if the system were analyzed under accounting rules
other than the ones that the federal government is required to While of course, there was the obligatory slap on the wrist, that “we will
use. The aim is to mislead taxpayers and members of not go back to the days of reckless behavior and unchecked excess,” but
Congress into believing that the C.B.O. estimate is dishonest. there was no mention that the bailouts were a thing of the past. Indeed,
there is nothing in Obama’s financial plan that would prevent future
Um, excuse me New York Times, but the CBO has never said the bill — bailouts, which is why I believe there was such applause. The message to
not just going from subsidized to direct lending, but the whole bill — the Goldman’s of the world, was, you better behave, but even if you don’t,
would save $87 billion over ten years. Moreover, it has been a series you, and your debtholders will be bailed out.
of analyses from the CBO — albeit driven by requests from members of
Congress – that have continually increased the cost estimates for The president also repeatedly called for “clear rules” and “transparency”
SAFRA. (I have linked to all the CBO analyses here.) CBO’s very first – but where exactly in his plan is the clear line dividing who will or will
estimate of the bill’s likely net cost put it at around $6 billion over ten not be bailed out. That’s the part Wall Street loves the most; they can all
years, and it only went up from there after incorporating such things as say we’ve “learned the lesson of Lehman: Wall Street firms cannot be
lending risk and potentially higher Pell grant costs. allowed to fail.” At least that’s the lesson that Obama, Geithner and
Bernanke have taken away. The truth is we’ve been down this road
Of course, the Times isn’t alone in its refusal to talk honestly about before with Fannie and Freddie. Politicians always called for them to do
SAFRA. Despite all of the CBO estimates, yesterday U.S. Secretary of their part, and that their misdeeds would not be tolerated. Remember all
Education Arne Duncan said SAFRA would give college students the tough talk after the 2003 and 2004 accounting scandals at Freddie
and numerous other interests the world without costing taxpayers a and Fannie? But still they got bailed out, and what new regulations were
dime. “We’re not asking the taxpayers for one single dollar,” he said. And imposed were weak and ineffective.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

As if the applause wasn’t enough, as Charles Gaspario points out, FISCALLY CONSERVATIVE BLOG FEEDS
financial stocks rallied after the president’s speech. Clearly the markets
don’t see his plan as bad for the financial industry. How Cap and Tax Will Hurt
It would seem the best investment Goldman has made in recent years Mississippi [Americans for Tax
was in its employees deciding to become the largest single corporate
contributor to the Obama Presidential campaign. That’s an investment Reform]
that continues to yield massive dividends. SEP 16, 2009 02:08P.M.

In our continuing, daily, state by state, look at the financial impact of the
Waxman-Markey Cap and Trade Tax Bill, we will show you the projected
FISCALLY CONSERVATIVE BLOG FEEDS losses in Gross State Product, Personal Income, and N...

Dem Senator Warns of ‘Big, Big

Tax’ [The Club for Growth] FISCALLY CONSERVATIVE BLOG FEEDS
SEP 16, 2009 02:14P.M.
A Bizarre Privacy Indictment
Well, that was quick. Even Democrats hate the new Democratic health
care bill in the Senate. Democratic Senator Jay Rockefeller, speaking of [Cato at Liberty]
Max Baucus’ new bill, said it would be “a big, big tax.” He also added SEP 16, 2009 02:02P.M.
that, “it’s a very dangerous idea.”
Page one of today’s Washington Times—above the fold—has a
fascinating story indicting the White House for failing to disclose that it
will collect and retain material posted by visitors to its pages on social
FISCALLY CONSERVATIVE BLOG FEEDS networking sites like Facebook and YouTube. The story is fascinating
because so much attention is being paid to it. (It was first reported, as an
CFA to Senate: Support Sen. aside at least, by Major Garrett on Fox News a month ago.)

DeMint’s Push to End Funding The question here is not over the niceties of the Presidential Records Act,
which may or may not require collection and storage of the data. It’s over
for Murtha’s “Air-Pork” people’s expectations when they use the Internet.

[Americans for Tax Reform] Marc Rotenberg, president of the Electronic Privacy
SEP 16, 2009 02:14P.M. Information Center, said the White House signaled that it
would insist on open dealings with Internet users and, in fact,
Not too long ago, the controversy over John Murtha Johnstown-Cambria should feel obliged to disclose that it is collecting such
County Airport about two hours East of Pittsburgh flared up when it was information.
one of the first airports in the country to receive &quot...
Of course, the White House is free to disclose or announce anything it
wants. It might be nice to disclose this particular data practice. But is it
really a breach of privacy—and, through failure to notify,
transparency—if there isn’t a distinct disclosure about this particular
data collection?

Let’s talk about what people expect when they use the Internet and social
networking sites. Though the Internet is a gigantic copying machine,
some may not know that data is collected online. They may imagine that,
in the absence of notice, the data they post will not be warehoused and
redistributed, even though that’s exactly what the Internet does.

There can be special problems when it is the government collecting the

information. The White House’s “[email protected]” tip line was
concerning because it asked Americans to submit information about
others. There is a history of presidents amassing “enemies” lists. But this

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

is not the complaint with White House tracking of data posted on its FISCALLY CONSERVATIVE BLOG FEEDS
social networking sites.
An Australian Perspective on
People typically post things online because they want publicity for those
things—often they want publicity for the fact that they are the ones Joe Wilson [Cato at Liberty]
posting, too. When they write letters, they give publicity to the SEP 16, 2009 01:46P.M.
information in the letter and the fact of having sent it. When they hold
up signs, they seek publicity for the information on the signs, and their
own role in publicizing it.

How strange that taking note of the things people publicize is taken as a
violation of their privacy. And failing to notify them of the fact they will
be observed and recorded is a failure of transparency.

America, for most of what you do, you do not get “notice” of the
consequences. Instead, in the real world and online, you grown-ups are
“on notice” that information you put online can be copied, stored,
retransmitted, and reused in countless ways. Aside from uses that harm
you, you have little recourse against that after you have made the
decision to release information about yourself.

The White House is not in the wrong here. If there’s a lesson, it’s that
people are responsible for their own privacy and need to be aware of how
information moves in the online environment. Will you allow a foreigner to comment on something that has intrigued
her about this great country?

All this hand-wringing and then censure (not to mention impeachment

FISCALLY CONSERVATIVE BLOG FEEDS talk) over Rep. Joe Wilson’s admittedly rude intervention at President
Obama’s speech last week has me baffled. Partly, it is because I come
New York Mayor Opposes from a land that is governed by a parliamentary system, where Question
Time is a much-loved institution. The offense (manufactured, perhaps)
Closing Schools for Muslim that Representative Wilson’s comment has caused is almost laughable
when I think about some of the insults that have been hurled in both
Holidays [Cato at Liberty] directions in Australia’s parliament. Here’s a collection of quotes from
SEP 16, 2009 01:58P.M. former Australian Prime Minister Paul Keating just for starters
(warning: offensive language). Here is a Brit’s take on why American
I have been trying for years to make people understand that a single politicians are “a bunch of wimps.”
system of government schools is fundamentally at odds with American
values, especially individual liberty and equal treatment under the law. Mainly, though, I am surprised that questioning of power is not more
New York City Mayor Michael Bloomberg, in opposing a move to let city valued in America. To be sure, the President of the United States is not
public schools close for Muslim holidays as they do for Christian and answerable to Congress in the same way that Ministers (including Prime
Jewish holidays, recently made my point in one, simple sentence: Ministers) are to a Westminster-system parliament, but I would have
thought that questioning the president would be well within the bounds
One of the problems you have with a diverse city is that if you of a nation conceived in liberty and on the understanding that all men
close the schools for every single holiday, there won’t be any are created equal. You got rid of infallible kings in 1776, remember?
school.
I get why the Democrats are making political hay out of Representative
Exactly. So which religions, and which people, will get to be more equal Wilson’s outburst, even if I think they are hypocrites for suddenly finding
than others, Mr. Mayor? religion on civility, given their own history. And I thoroughly reject, by
the way, the notion that much of the criticism directed towards Obama is
With universal school choice, we wouldn’t have to grapple with such based on racism, even if this sort of talk gives unfortunate credence to
terrible questions. the claims. But those same Dems who are shocked (shocked!) by Joe
Wilson’s behavior are right now allowing a tax cheat to pull the nation’s
purse strings.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 18 September 2009

This focus on style — who says what, how they say it, what their Look, I harbor no animosity against bike riders, but under what
motivations might be — over the substance of what the congressional authority — legal or moral — does the federal government tax me in
and administrative branches of government are doing is tremendously order to build bike centers for parochial, special interests? The
disappointing. I have heard far more censorious talk about Joe Wilson’s Constitution?
character and the propriety (or lack thereof) of what he did than of the
point he was making. Meanwhile, the Dems are keeping “internal” But let’s pretend — and I mean pretend – that such federal expenditures
investigations of Charlie Rangel’s ethical violations very quiet indeed. are legitimate. The Post article say the center will have 150 indoor bike
racks and 20 outdoors. A recent NPR article says it will hold 130 bikes.
Quite frankly, I’m far more interested in those than I am in Joe Wilson’s Whatever the figure, at a cost of $4 million, it comes out to around $25-
rudeness. $30 thousand per bike. And, yes, I recognize that the “1,700-square-foot
building west of the station will also have changing rooms, personal
lockers, a bike repair shop and a retail store that will sell drinks and bike
accessories.” But the ultimate purpose is to hold bikes. In my mind, the
FISCALLY CONSERVATIVE BLOG FEEDS extra extravagance merely reflects the fact that taxpayers are picking up
the tab.
Baucus Healthcare Bill Violates
There’s the old saying that a picture is worth a thousand words. In this
Obama Tax Pledge [Americans case, it’s more like 4 million:

for Tax Reform]

SEP 16, 2009 01:31P.M.

At least five tax hikes in the bill violate Obama’s central campaign
promise not to raise “any form” of taxes on families making less than
$250,000 The healthcare reform plan unveil...

FISCALLY CONSERVATIVE BLOG FEEDS

Government Pays $4 Million for

a Bike Rack [Cato at Liberty]
SEP 16, 2009 01:24P.M.

There you go, America. Your taxes are funding this multi-million dollar
bike rack in Washington, DC — the beneficiaries of which will probably
be the same Capitol Hill lobbyists and congressional staffers who spend
all day pilfering your paychecks.

The $4 million Union Station Bike Transit Center is scheduled to open in

Washington, DC on October 2nd. According to an August Washington
Post story, 80 percent of the cost of this opulent bike center is being
borne by federal taxpayers via the U.S. Department of Transportation.

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