Thursday, April 29, 2010

The Insurance Mandate in Peril -

Do my liberal friends support Congress really having this much power?  Would they like a future conservative Congress to mandate every American buy a gun under similar constitutional logic?


Randy E. Barnett: The Insurance Mandate in Peril -


The Patient Protection and Affordable Care Act (aka ObamaCare) includes what it calls an "individual responsibility requirement" that all persons buy health insurance from a private company. Congress justified this mandate under its power to regulate commerce among the several states…

In this way, the statute speciously tries to convert inactivity into the "activity" of making a "decision." By this reasoning, your "decision" not to take a job, not to sell your house, or not to buy a Chevrolet is an "activity that is commercial and economic in nature" that can be mandated by Congress.

It is true that the Supreme Court has interpreted the Commerce Clause broadly enough to reach wholly intrastate economic "activity" that substantially affects interstate commerce. But the Court has never upheld a requirement that individuals who are doing nothing must engage in economic activity by entering into a contractual relationship with a private company. Such a claim of power is literally unprecedented.




Thursday, April 22, 2010

On Presidential Rhetoric -


On Presidential Rhetoric -


President Obama came to office promising an era of political comity, but even he has had to concede that his first 15 months in office haven't lived up to his campaign hope of transcending partisan divisions. While it takes two to tangle, we think the hyper-polarization owes more than a little to Mr. Obama's own rhetorical habits. More than any President in memory, Mr. Obama has a tendency to vilify his opponents in personal terms and assail their arguments as dishonest, illegitimate or motivated by bad faith.

Presidents speak to all of America and they best build consensus through argument and persuasion—not by singling out political targets, cultivating resentment, questioning motives and mocking differences of principle or political philosophy. Mr. Obama's bellicosity is no more attractive than Sarah Palin's attempts to pit "the real America" against the big-city slickers. And his rhetorical method seems especially discordant coming from a President who still insists, in between these assaults, that he is striving mightily to change the negative tone of American politics.

If the President and his advisers are wondering why his approval ratings are falling even as the economy is recovering, they might look to his own divisive conduct and the contempt he too often shows for anyone who disagrees with him.




Wednesday, April 21, 2010

An Economy of Liars -


Gerald P. O'Driscoll: Why Government Regulation Fails -


Free markets depend on truth telling. Prices must reflect the valuations of consumers; interest rates must be reliable guides to entrepreneurs allocating capital across time; and a firm's accounts must reflect the true value of the business. Rather than truth telling, we are becoming an economy of liars. The cause is straightforward: crony capitalism.

Congressional committees overseeing industries succumb to the allure of campaign contributions, the solicitations of industry lobbyists, and the siren song of experts whose livelihood is beholden to the industry. The interests of industry and government become intertwined and it is regulation that binds those interests together. Business succeeds by getting along with politicians and regulators. And vice-versa through the revolving door.

We call that system not the free-market, but crony capitalism. It owes more to Benito Mussolini than to Adam Smith.

Nobel laureate Friedrich Hayek described the price system as an information-transmission mechanism. The interplay of producers and consumers establishes prices that reflect relative valuations of goods and services. Subsidies distort prices and lead to misallocation of resources. Prices no longer convey true values but distorted ones.

Distorted prices and interest rates no longer serve as accurate indicators of the relative importance of goods. Crony capitalism ensures the special access of protected firms and industries to capital. Businesses that stumble in the process of doing what is politically favored are bailed out. That leads to moral hazard and more bailouts in the future.





Tuesday, April 20, 2010

An Homage to Hummer -

Alternate titles I would have liked: 1) “Freedom to be stupid” 2) “Then They Came for the Pie”

Penn Jillette's Homage to Hummer -

Having a Hummer is stupid. It's stupid to waste that much gas. It's stupid to waste that much money on gas. It's stupid to parade your insecurities on public roads. Hummers are stupid looking. You don't need an attack vehicle for the Krispy Kreme drive through.

Hummers are stupid and wasteful and if they go away because no one wants to buy one, that'll be just a little sad. It's always a little sad to lose some stupid. I love people doing stupid things that I'd never do—different stupid things than all the stupid things I do. It reminds me that although all over the world we humans have so much in common, so much love, and need, and desire, and compassion and loneliness, some of us still want to do things that the rest of us think are bug-nutty. Some of us want to drive a Hummer, some of us want to eat sheep's heart, liver and lungs simmered in an animal's stomach for three hours, some us want to play poker with professionals and some of us want a Broadway musical based on the music of ABBA. I love people doing things I can't understand. It's heartbreaking to me when people stop doing things that I can't see any reason for them to be doing in the first place. I like people watching curling while eating pork rinds.

But if any part of the Hummer going belly-up are those government rules we're putting in on miles per gallon, or us taking over of GM, then I'm not just sad, I'm also angry. Lack of freedom can be measured directly by lack of stupid. Freedom means freedom to be stupid. We never need freedom to do the smart thing. You don't need any freedom to go with majority opinion. There was no freedom required to drive a Prius before the recall. We don't need freedom to recycle, reuse and reduce. We don't need freedom to listen to classic rock, classic classical, classic anything or Terry Gross. We exercise our freedom to its fullest when we are at our stupidest.

There's a lot of bad stupid around. Really bad stupid. But we can't stop the real horror by stopping just-plain-stupid stupid. We're not going to stop overseas wars by stopping people from driving big stupid cars. As long as we think that "nation building" is part of our destiny, no amount of independence from foreign oil is going to stop us from getting into meddling, expensive, immoral foreign wars. As long as we let terrorism fill us with terror, we're not going to get our nonstupid freedoms back. Our government declaring that we need alternative energy sources, and betting our money on who might get a smart idea, is not going to give smart people smart ideas. It's really easy to see stupid all around us, but I don't think we want to be too quick to stop it. We need to protect other people's stupid to save freedom for all of us.

We're all making bad choices all the time, and most of mine are way stupider than driving a Hummer. I love my freedom of stupid. I bumped into Adrien one time and had a great talk with him, we got along great. I know Carrot Top well enough to call him "Scott." I know that they're both a lot thinner than me. They're both in a lot better shape. They eat better than me, and they can do a lot more push-ups and sit-ups. They can run farther and faster than me. So, in the near future, with us all being involved in each other's health care, Adrien and Scott might make up for their wasted gas mileage paying for my high-blood-pressure meds. If we're all getting together to stop the stupidity of driving a Hummer, will we have to stop the stupidity of eating Krispy Kreme doughnuts and pie? Freedom is freedom to be stupid.

They came first for the Hummers.

Then they came for the pie.

Wednesday, April 14, 2010

'Spreading The Wealth' Isn't Fair -


Arthur C. Brooks: 'Spreading The Wealth' Isn't Fair -


The president wants to create what he calls "a sense of balance and fairness in our tax code," as he said on the campaign trail, and ensure that well-off Americans "pay their fair share." He famously defended his planned tax hikes to "Joe the Plumber" by saying, "I think when you spread the wealth around it's good for everybody."

If you think spreading money around by force seems like an odd definition of fairness, you're not alone.

Most Americans think tax rates are already unfairly high. A February 2009 Harris poll found that on average, Americans believe the maximum amount anyone should have to pay in total taxes is less than 16% of income.

Nor do Americans believe it is fair to expand the pool of people with no income tax liability at all.  66% of Americans agree with the statement that "Everyone should be required to pay some minimum amount of tax to help fund government." People understand that good citizenship means we all contribute in some way to the national project.

Nobody wants to sound anti-poor, so we too easily concede the notion of fairness to those who define it as redistribution and criticize redistribution only because it leads to economic inefficiency.

This is an error. There is nothing inherently fair about equalizing incomes. If the government penalizes you for working harder than somebody else, that is unfair. If you save your money but retire with the same pension as a free-spending neighbor, that is also unfair.

Real fairness, as most of us see it, does not mean bringing the top down. Yes, free markets tend to produce unequal incomes. We should not be ashamed of that. On the contrary, our system is the envy of the world and should be a source of pride. Generation after generation, it has rewarded hard work and good values, education and street smarts. It has offered the world's most disadvantaged not government redistribution but a chance to earn their success.

That is true fairness, American-style.




Tuesday, April 13, 2010

Reaganism, New Jersey Style -


William McGurn: Reaganism, New Jersey Style -


Mr. Christie knows he needs to put the hard choices before the state's citizens, and to speak to them as adults.

Budgets are serious business, but it's been a long time since anyone in New Jersey has been serious about the budget. This year, gross mismanagement and accumulated fictions have left state taxpayers a $10.7 billion gap on a total state budget of $29.3 billion. Mr. Christie's answer is simple: "a smaller government that lives within its means."

However quaint that may sound, when you have to cut nearly $11 billion in state spending to get there, you are going to get a lot of yelling and screaming. Most comes from the New Jersey Education Association, hollering that "the children" will be hurt by Mr. Christie's proposals for teachers to accept a one-year wage freeze and begin contributing something toward their health plans. What makes the battle interesting is the way Mr. Christie is throwing the old chestnuts back at his critics.

Here are a few examples, culled from his budget address, public meetings and radio appearances:

The children will be the ones to suffer from your education cuts. "The real question is, who's for the kids, and who's for their raises? This isn't about the kids. Let's dispense with that portion of the argument. Don't let them tell you that ever again while they are reaching into your pockets."

Budget cuts are unfair. "The special interests have already begun to scream their favorite word—which, coincidentally, is my 9-year-old son's favorite word when we are making him do something he knows is right but does not want to do—'unfair.' . . . One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits—a total of $3.8 million on a $120,000 investment. Is that fair?"




Friday, April 9, 2010

World Tariff Wars -


World Tariff Wars -


President Obama launched his National Export Initiative last month. Objective: Double exports in five years. Sounds good. Too bad some of our trading partners missed the memo.

Brazil, in the same week, announced a plan to impose new tariffs on 102 U.S. products. On some items, the tariffs will go as high as 100%. In all, it will affect about $1 billion a year in U.S. exports. Brazil also announced it's considering sanctions against U.S. intellectual property, including compulsory licensing in pharmaceuticals, music, chemicals and software.

Before screaming for a first strike on Brazil, bear in mind that what it did is an approved action under World Trade Organization rules. Brazil won the right to retaliate against U.S. exports because U.S. subsidies to cotton growers contravene the rules of the multilateral trading system. Because we are in "non-compliance," they get to engage in "retaliation." On Monday Brazil gave the U.S. a reprieve until April 22 on the new tariff implementation in the hopes that a negotiated compromise might be reached. If not, we will have an old fashioned trade war on our hands.

The destructive clash with Brazil is not an isolated case. WTO-approved retaliation to counteract U.S. trade violations is spreading. More than $3.4 billion of U.S. exports now face punishing retaliation tariffs.

It is possible that Brazil will back down, but the damage to U.S. leadership on free trade cannot be underestimated. The common thread linking these threats to U.S. export growth is America's current antitrade compulsions, typified by Congress's refusal to ratify free trade agreements with Colombia, Panama and South Korea. If Mr. Obama really wants to open new export markets, he doesn't need to slap the word "export" on new bureaucracies. He needs to honor U.S. commitments and explain the dangers of a creeping global protectionism.




Wednesday, April 7, 2010

Taking the Driver Out of the Car -


Randal O'Toole on Taking the Driver Out of the Car -


Driverless cars have so far remained the stuff of science fiction. Seventy years after Mr. Bel Geddes's promise, they are finally close to reality.

Consumers today can buy cars that steer themselves; accelerate and brake to maintain a safe driving distance from cars ahead; and detect and avoid collisions with other cars on all sides. Making them completely driverless will involve little more than a software upgrade.

Driverless vehicles offer huge advantages over current autos. Because computer reaction times are faster, driverless cars can safely operate more closely together, potentially tripling highway throughput. This will virtually eliminate congestion and reduce the need for new road construction.

Driverless cars and trucks will be safer. They will also be greener, first by significantly reducing congestion, and eventually because vehicles will be lighter in weight due to reduced collision risks.

Automobiles continue to maintain a huge cost advantage over passenger rail. Counting both subsidies and personal costs, Americans spend less than 25 cents a passenger mile on autos, nearly 60 cents a passenger mile on Amtrak, and more than 90 cents a passenger mile on urban transit. No wonder 85% of all our passenger travel is by automobile.

The call to spend hundreds of billions of dollars in subsidies to build the world's finest, 1930s-era transportation network would benefit the wealthy and those willing to live and work in expensive quarters near rail stations.

In contrast, the driverless scenario relies on new technology, not old; and will largely be self-funded by users rather than paid out of tax dollars. Most important, driverless vehicles will bring mobility to almost everyone.




Tuesday, April 6, 2010

Jaime Escalante Stood and Delivered. It's Our Turn. -


Andrew Coulson: Jaime Escalante Stood and Delivered. It's Our Turn. -


Jaime Escalante, the brilliant public school teacher immortalized in the 1988 film, "Stand and Deliver," died this week at the age of 79. With the help of a few dedicated colleagues at Garfield High in East Los Angeles, he shattered the myth that poor inner-city kids couldn't handle advanced math. At the peak of its success, Garfield produced more students who passed Advanced Placement calculus than Beverly Hills High.

In any other field, his methods would have been widely copied. Instead, Escalante's success was resented. And while the teachers union contract limited class sizes to 35, Escalante could not bring himself to turn students away, packing 50 or more into a room and still helping them to excel. This weakened the union's bargaining position, so it complained.

By 1990, Escalante was stripped of his chairmanship of the math department he'd painstakingly built up over a decade. Exasperated, he left in 1991, eventually returning to his native Bolivia. Garfield's math program went into a decline from which it has never recovered. The best tribute America can offer Jaime Escalante is to understand why our education system destroyed rather than amplified his success—and then fix it.

America not only needs more teachers like Jaime Escalante, it needs an education system that recognizes them and helps them to reach a mass audience. The tutoring sector is a proven model for doing so: Unleash the freedoms and incentives of the marketplace, so teachers like Escalante become the Steve jobs or Bill Gates of education, profiting from their exceptional ability to serve our children.