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Breaking (From Yesterday)!: Reason Foundation's Proactive No Vote on Tom Daschle as HHS Secretary

gillespie@reason.com (Nick Gillespie) — Thu, 20 Nov 2008 13:14:00 EST

Yesterday I directed Hit & Runners' attention to Reason Foundation policy analyst Shikha Dalmia's proactive case against picking the awful Eric Holder as President-elect Barack Obama's attorney general.

Now that we know that the awful former Sen. Tom Daschle (D-S.D.) is going to be Obama's Health and Human Services jefe, it's time to look again what Dalmia wrote earlier this week in her exhaustive survey of good, bad, and ugly picks for the next administration's cabinet:

For libertarians, three poor picks [for HHS secretary] would be chairman of the Democratic Party and former Vermont Governor Howard Dean, New York Sen. Hillary Clinton, rumored to be the frontrunner for Secretary of State, and former Democratic Senator from South Dakota Tom Daschle.
Dean, a doctor himself, tried to control soaring health care costs by expanding government control over insurance prices and hospital budgets. He also created a statewide insurance pool and formed a new bureaucracy to manage it. None of this worked and premiums—and the number of uninsured—increased under him.
Clinton, of course, tried to nationalize the health care industry in one fell swoop when her husband was in office. Even though she seems to have abandoned that plan, during her presidential campaign, she advocated forcing the uninsured to buy coverage—through penalties and fines if necessary—to achieve universal coverage.
Meanwhile, since leaving the Senate, Daschle has written a book titled, Critical: What We Can Do About America's Health-Care Crisis, in which he recommends creating the equivalent of the Federal Reserve Board for health care to set treatment standards, performance requirements and impose other mandates on the industry. In short, create another layer of bureaucracy on top of the one that he would oversee and hand it even more powers.
[Any] of them will signal a return of Big Government, big time.

More here.

To which I can only say: The return of Big Government? It feels like it's never left.

What's the Matter With Libertarians?

jwalker@reason.com (Jesse Walker) — Thu, 20 Nov 2008 12:00:00 EST

The Wrecking Crew: How Conservatives Rule, by Thomas Frank, New York: Metropolitan Books, 353 pages, $25.

One of the screwier sentiments circulating in libertarian circles holds that liberals should love George W. Bush. After all, he spends lots of money! It’s an analysis for people who’d rather joust lazily with strawmen than engage their opponents’ ideas. Real-life liberals don’t want the government to spend money willy-nilly; they want it to spend money on specific things. And the items they have in mind are not, by and large, the items chosen by Bush.

In The Wrecking Crew, a brief and breezy polemic by one of the left’s rising stars, Thomas Frank offers a similar argument about libertarianism. Under Bush, Frank points out, federal spending has exploded and corruption has oozed from official Washington. Obviously, we’re watching the free market in action, because businesses benefit! Really.

Frank, formerly the editor of the radical journal The Baffler and currently the token lefty on the Wall Street Journal op-ed page, doesn’t just fail to distinguish between crony capitalism and free markets. He actively refuses to recognize the difference. “Laissez-faire,” he admits, “has never described political reality all that well, since conservative governments have intervened in the economy with some regularity.” Yet that doesn’t prevent him from declaring a little later that “what makes a place a free-market paradise is not the absence of government; it is the capture of government by business interests.” If you relied on Frank for your information, you would never dream that the idea of laissez faire initially emerged not as a defense against left-wing regulators, who were scarce in the 18th century, but as a critique of subsidies, government-imposed monopolies, and what Adam Smith called the “mean and malignant expedients of the mercantile system.” In other words, the “free-market paradise” was supposed to be an alternative to “the capture of government by business interests.”

Frank knows that libertarians believe the state is the engine by which some segments of society loot the others. “Governments are instituted among men in order to help one group in society exploit another,” he writes, summarizing Albert Jay Nock’s Our Enemy, the State. They “are then captured by some other class, which sets about exploiting some other group, and so on.” For the free market set, says Frank, “there is no conceivable instance in which the state might be reformed or function morally: only oppression succeeding oppression all the way to the far horizon.”

Frank won’t acknowledge the implicit alternative: a society with much less government, where competition replaces privilege and cooperation replaces coercion. Instead he treats the Nockian perspective as a piece of psychological projection, less a description of state power as it is ordinarily exerted than a forecast of the Bush era. Free marketeers believe the state is essentially a tool for looting the treasury; therefore, Frank concludes, when free marketeers are in power, they loot.

In the waning months of an administration marked by enormous interventions on behalf of business interests, there has been an understandable surge of interest in both libertarianism, the ideal of a government that doesn’t intervene on behalf of any particular player, and social democracy, the ideal of a government that manages to help the masses without being captured by corporations. The best way to understand The Wrecking Crew is as propaganda for one of those alternatives against the other.

To that end, the book does everything it can to conflate libertarians not just with the Bush regime but with conservatives in general, regarding the two groups’ on-again, off-again alliance since the 1930s as a more permanent and deep-seated connection. “The conservative coalition has changed over the years,” Frank informs us, but “a commitment to the ideal of laissez-faire” has “remained steadfast.” When he turns his attention to the present day, he paints the Republican regime of cronyism and militarism, and its ugly results from Baghdad to New Orleans, as a specifically libertarian dystopia.

For evidence, Frank expends much breath describing the ways work once done at taxpayers’ expense by the federal bureaucracy itself is now done at taxpayers’ expense by federal contractors. There is a glimmer of an indictment of the pro-market movement here: Some libertarian economists have argued that contracting out exclusive services to private providers will be more efficient than doing the work in-house, and that this could serve as a stepping stone toward moving those functions to the free market. I don’t feel compelled to defend that view, since I have limited sympathy for it myself; still, I should note that the free market case for outsourcing has always stressed the need for competitive bidding, transparency, and other elements obviously absent from the sweetheart deals and no-bid contracts that attract Frank’s attention. And much of the spending Frank describes doesn’t even fall under the category of contracting: Simple earmarks earn a lot of his anti-market ire, as if Milton Friedman dreamed of a world where more pork went to businesses than to nonprofits.

Frank’s argument about government regulation is a bit more sophisticated. It may appear, he declares, that Republicans have done little to roll back the regulatory state, but looks can be deceiving. When the plutocrats despise a department but the masses support it, he contends, the “standard method” is to put the bureau “under the control of someone who is either spectacularly ill-suited for the job or vocally opposed to that department’s mission,” a strategy that “avoids the tactlessness of repealing or abolishing agencies while achieving the same results.” His examples include Howard Phillips, appointed chief of the Office of Economic Opportunity under Richard Nixon in order to wipe out the agency’s subsidies to the left; and James Watt, Ronald Reagan’s first secretary of the interior, who was famously friendly to ranchers, drillers, miners, and other businesspeople who wanted access to public land.

Frank recognizes that it isn’t exactly unprecedented for an industry to capture the agency that is supposed to regulate it. He quotes the railroad lawyer Richard Olney, attorney general in the second Grover Cleveland administration, explaining why he didn’t want to destroy the new Interstate Commerce Commission, an agency ostensibly designed to stop rate discrimination: “It satisfies the popular clamor for government supervision of the railroads, at the same time that that supervision is almost entirely nominal.” Frank does not discuss the other reason many railroad companies supported the ICC, and indeed lobbied to create it. As the historian Gabriel Kolko pointed out in his 1965 study Railroads and Regulation, freight rates in the late 19th century kept dropping, despite the industry’s attempts to stabilize them via voluntary agreements; when those efforts failed, the companies decided to use regulations to “bring under control those railroads within their own ranks that refused to conform.” That meant strengthening the commission, by giving it the power to set standard rates.

In other words, pro-business officials weren’t deregulating the railroads through inaction; they were regulating the rails in a way designed to assist the industry’s dominant companies. This was no aberration. When trucks started carrying freight, the same agency imposed a host of rules whose chief effect was to impose entry barriers against upstarts. The Civil Aeronautics Board was essentially an open conspiracy to eliminate competition in the airline business. There was a revolving door in the late 1920s and early ’30s between broadcast networks and the Federal Radio Commission, which dutifully reduced the power levels and transmission hours of smaller stations. When the New Deal regime replaced the agency with the broader Federal Communications Commission, that state-corporate partnership remained in place.

The result of such cozy arrangements is not just corruption but stagnation. In 1973—at a time when, by Frank’s account, “the country had embarked on a massive regulatory offensive, and reversing it would require conservative mobilization on an equally massive scale”—one observer wrote that “it is difficult to provide evidence of what innovations would have occurred without regulation; yet it is clear that technological lethargy logically adheres in the very structure of regulation.”

Was that cynical critic some corporate apologist slandering a sensible system? Nope: It was Mark Green, now president of the Air America radio network and a serial left-wing candidate for public office. He made that observation in The Monopoly Makers, a book assembled by Ralph Nader’s Study Group. By the 1970s, while the business-friendly Nixon administration was getting behind the “regulatory offensive” that Frank praises, the Naderites had become so disenchanted with the status quo that many of them were willing to call for substantial deregulation. Within a few years, Nader and that notorious Nockian, Sen. Ted Kennedy (D-Mass.), would push airline deregulation through Congress, at which point it was signed into law by the John Galt of presidents, Jimmy Carter. This incident is absent from Frank’s description of the “conservative mobilization” against regulation.

Instead he writes about episodes such as Watt’s tenure at Interior, an alleged example of deregulation being enacted in practice rather than statute. But Frank misses the most telling detail of Watt’s reign: The secretary was cool to the idea of moving public assets to the private sector. Indeed, he helped nudge Reagan away from a proposal to sell even a small fraction of federal lands. In this, he followed the preferences of the industries that used that terrain. They preferred the below-market rates they negotiated with regulators to the full costs they’d have to pay in an open market.

The alleged regulatory rollback of today tends to follow the same pattern. The agencies have sometimes, as Frank writes, pulled back from practices that offend the dominant players. The Department of Agriculture, for example, watered down its meat inspection processes in the Bush and Clinton eras. But the department hasn’t been shy about wielding its hammer against industry outsiders. When the owner of Montana Quality Foods, an independent meat packer, informed the government that he had received contaminated beef from the heavily subsidized giant ConAgra, the food cops jumped into action and investigated…the whistleblower. And the department actually prohibited a small company in Kansas, Creekstone Farms Premium Beef, from testing its own cattle for mad cow disease. After all, if Creekstone advertised the fact that its beef was 100 percent safe, the bigger packers would have to either lose market share or respond to the competition by doing all that expensive inspecting themselves.

Such favoritism resembles the way the mid-20th-century FCC treated the Austin broadcasting operations owned by Lyndon Johnson’s wife. If a rule stood in the Johnsons’ way, the commissioners found a way to waive it. But if an upstart wanted to compete with the couple’s local monopoly, the government came up with an excuse to block it.

The FCC, incidentally, has arguably been more interventionist under Republican chief Kevin Martin than it was under the last Democrat to fill the position, William Kennard. More broadly, according to an August report from the Weidenbaum Center at Washington University in St. Louis and the Mercatus Center at George Mason University, regulatory spending has gone up more than $20 billion in constant dollars since Bush became president. Regulatory staffing has decreased in some areas, including labor and the environment, but only slightly—and it has increased by more than 80,000 employees overall. This is not a regulatory apparatus that has been hollowed out and rendered ineffective. It is a government pursuing the same general industryboosting approach it took from the ’30s through the ’70s. If Frank wants to imagine that we’re in an era of laissez faire now, he ought to extend his fantasy back to the period he prefers.

But he won’t. Frank, who first came to prominence as a caustic cultural critic, now writes with a goshwow earnestness about the Roosevelt-Truman-Johnson era; he spends more time describing a gooey civic text from 1945 called We Are the Government than he does exploring the government’s actual activities in the ’40s. Frank has a long history of disdaining any American figures, from Barry Goldwater to the Beats, who challenged the mid-century liberal consensus. In this book he extends his animus even to the public’s post-Watergate skepticism, pointing out that it “permanently poisoned public attitudes toward government and stirred up a wave that swept Ronald Reagan into office six years later—and made antigovernment cynicism the default American political sentiment.” This is the domestic equivalent of a neocon fretting about the Vietnam Syndrome.

Frank’s narrative reaches a crescendo when he describes the Northern Marianas, a U.S. commonwealth in the Pacific where taxes on capital were low, minimum wage laws were weak, construction permits were granted freely, and, in a sharp break from all that deregulation, an army of foreign guest workers were legally prohibited from changing jobs without official permission and thus were largely helpless in the face of abuse. When the Interior Department started making noises about overruling some of those policies, the island government hired the rightwing fixer Jack Abramoff to make its case to the nation. Abramoff dutifully began to boast about the benefits the territory had accrued with its lower taxes and lighter business regulations. Those advantages were real, but they were only part of the story. As long as those workers were legally chained to their employers, exploitation was inevitable.

You might conclude from this that labor mobility in the Marianas needed to be deregulated. Frank concludes that the free market is a fraud. Specifically, he says: “What went on in the [Northern Marianas] could not have happened without the active involvement of the state. Yes, this was a free-market paradise, as the libertarians assured the world on dozens of occasions, but a free-market system never simply means do what thou wilt.”

So is there any merit at all to this book? Actually, there is. Frank devotes a lot of space to the underside of the right in the Reagan years, when Abramoff and Ralph Reed were College Republicans instead of corrupt appendages to the political class. This is the one section where he makes a real contribution to our understanding of the last three decades, sifting through ancient direct-mail packages and low-circulation right-wing journals to paint a vivid picture of a milieu that hasn’t received much attention from historians.

The account that emerges is sometimes superficial, but Frank has noticed something that many mainstream pundits miss: the flat-out weirdness of the 1980s right. Modern Republicans often chide the liberals of that decade for not realizing the Soviet Union was on the brink of collapse, but the conservatives could be even further off base. Just a few years before the Communist system collapsed under its own weight, paranoid cold warriors imagined Moscow as a virtually all-powerful giant, its tentacles pulling stateside liberals’ strings while our weak-willed society teetered toward surrender.

Meanwhile, Rambo-era conservatives cast themselves as a band of guerrilla heroes, openly drawing on their Marxist enemies for inspiration. Frank actually understates the levels of irony here. He describes the right’s love affair with a series of morally dubious anticommunist rebellions in the Third World, with the Angolan thug Jonas Savimbi receiving the veneration that a certain sort of leftist gives to Che Guevara. “Angola had been one of the very last countries in Africa to be freed from colonial domination,” Frank explains, “but unlike so many other ‘national liberators’ over the preceding decades, Savimbi was not a Communist.” Somehow Frank neglects to mention the funniest part of the tale: Savimbi was a communist, or at least had played that role when his biggest benefactors were based in Beijing rather than the Heritage Foundation. In Cambodia, similarly, the right exalted the nationalist opponents of the Vietnamese occupation while tiptoeing around the fact that they were effectively fronts for Pol Pot, the bloodthirsty former dictator who made Mao look like a mild-mannered McGovern volunteer. The same people who accused liberals of being naive communist dupes were themselves…naive communist dupes.

Against this background, the young Abramoff and others drew freely on libertarian language about the virtues of the market and the evils of the state, even as they prepared for careers of using the state to feather their nests. This phenomenon is genuinely disturbing, and if Frank had been willing to take his foes’ ideas seriously he could have expanded his discussion of it into a potent critique.

Frank is wrong to blame the libertarian attitude toward government for the crony capitalism of the Bush years. But it is true that many conservatives used the libertarians’ anti-statist rhetoric as they acquired power, then turned around and behaved like stock villains from the free market imagination. Worse yet, some people in the libertarian movement were their willing partners, if not in the looting spree then in the selective outrage that helped those unprincipled opportunists take over Washington.

Someone could write an interesting book about that. But not Frank. For one thing, he’d have to contrast such corruption with the behavior of all the free market organizations that refused to fold their principles when a funder’s interests were at stake. More important, he’d have to acknowledge that there is such a thing as a libertarian principle in the first place, that it’s possible to take a stand for economic liberty and anger a wealthy corporate donor in the process.

If Frank embraced that sort of intellectual rigor, his thesis would have unraveled. He would have had to treat the people who believe in unfettered markets as more than just a front group for the regime that brought us billion-dollar bailouts and a trillion-dollar war. And that would mean acknowledging that Frank’s political tribe is not the only conceivable alternative to the Bush Republicans.

Managing Editor Jesse Walker is the author of Rebels on the Air: An Alternative History of American Radio (NYU Press).

The Favor Factory

rbalko@reason.com (Radley Balko) — Mon, 17 Nov 2008 17:59:00 EST

Last month, the Seattle Times assembled a handy database breaking down the earmarks attached to the 2008 defense appropriations bill. The paper looked at how many of the bill's earmarks went to each congressional district and, in turn, how much money in campaign contributions the recipients of those earmarks have given to the congressmen who requested them.

For example, my congressman, Rep. Jim Moran (D-Va.) larded the 2008 defense bill with $40.6 million in earmarks. Over the last five years, the recipients of those earmarks have given Moran more than $890,000 in campaign contributions. Moran was second only to Rep John Murtha (D-Pa.) in raking in contributions from recipients of his sponsored earmarks—Murtha reaped $1.6 million in contributions from the whopping $126 million he put in the bill.

Only about 10 percent of Congress requested no earmarks at all.

SC Gov. Mark Sanford to Feds: Drop Dead!

gillespie@reason.com (Nick Gillespie) — Mon, 17 Nov 2008 14:01:00 EST

Gov. Mark Sanford (R-S.C.) has a message to D.C. lawmakers, his fellow governors, and the American people that's worth listening to. The short version: The feds shouldn't bail out his state or anybody else's.

In 2008 bailouts became the first resort [in a strapped economy]. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate "stimulus" checks of last February) to "improve" the economy. I don't see how another $150 billion now will make a difference in a global slowdown. We've already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.
However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security's REAL ID requirements will cost $8.9 million.

Read the whole thing in the Wall Street Journal (for free).

Watch the July 2008 CNN interview that might has cost the governor a VP slot on a McCain ticket (Sanford does such a piss-poor job articulating McCain's positives it is almost unbelievable):

When you make all the mandatory exemptions for real-life, actually elected politicians, Sanford is one of the most attractive pols around—a fiscal tightwad who is not unwilling to actually address and cut mega-spending issues.

Here's excerpts from a 2000 reason interview with then-Rep. Sanford, who was among those rare few who actually kept their self-imposed term-limit pledges.

Republican Mark Sanford ran for Congress in 1994 because he wanted to do something about the deficit, the debt, and Social Security. The GOP establishment wasn't happy—he was a developer, not a longtime pol who'd attended all the right dinners and functions—and they did their best to defeat him in the primary. They sent the likes of Tom DeLay, Dick Cheney, and Jack Kemp to South Carolina's 1st District to campaign against him. "I was like, ‘Why are you people here? I don't know who you are,'" recalls Sanford.
Once in office, Sanford was among the early advocates of privatizing at least part of Social Security. He also wants to free Americans to trade with Cuba. And he's famously cheap -a valuable and rare character trait in a politician. Domestically, this led him to oppose pork barrel spending, even in his own district. Internationally, it led him to pay a Cuban family $35 a night to put him up during a 1999 visit rather than stay at a hotel. On a personal level, it leads him to sleep on a futon on his D.C. office floor, rather than rent an apartment. At least he won't have to break a lease when he leaves town....
Reason: You once said that being a congressman wasn't that hard, that it should take six months to grasp the basics. Do you still believe this?
Sanford: In the 9 a.m. Republican conference meeting today, a certain unnamed Californian stands up and says, "This is real simple. It's shirts versus skins. We're shirts, they're skins." It's all the very elementary stuff on trading marbles. Any kid who has a set of marbles in the back yard or Pokémon cards or baseball cards and learns how to trade them knows everything you need to know about Congress.
Reason: Why does the trading always seem to go one way then? People seem to trade more for more, which leads to the growth of government every year. Why don't you ever make a new program contingent on killing an old one?
Sanford: That is the structural problem of democracy: diffuse costs and concentrated benefits. I'll have 100 visits in a week in the office. Ninety-nine of those visits people will say, "Mark, we really appreciate what you are doing on the deficit and debt and trying to reduce government spending. Keep it up. But we are here to talk to you about this one program and why it is very important." Who's going to take a trip to Washington to save 2 cents on the price of sugar because of the sugar subsidy?...
Reason: What's the biggest surprise you've had in Congress?
Sanford: The local will always trump national. Tip O'Neill said that all politics are local. He was exactly right. Whatever is in the best interest of one's chances of getting reelected is what drives the institution. It's selfishness in that "I-have-got-to-stay-up-here-to-do-good, fight-other-fights" way.
These people become your friends and you don't want to disappoint them. Even though I've only been here six years, some of my best friends in life are other members of Congress and I am going to miss them when I go. And if I had been here on the 20-year program, I would be that much more hesitant about disappointing them. Because nobody likes to disappoint anybody.

More with Sanford and other "congressional quitters," bless their souls, here.

The Important Thing Is that the Big 2.5 Automakers Should Get $25 Billion from Somewhere...

gillespie@reason.com (Nick Gillespie) — Mon, 17 Nov 2008 11:37:00 EST

This is what leadership in DC has been reduced to in the early years of the 21st century (the post-American century?): Congress demanding a bailout for the Ford, Chryler, and GM from the magical pool of $700 billion created just a few short weeks ago and the White House demanding that the bailout come instead from a Department of Energy boondoggle specifically designed to pad the carmakers' bottom lines.

Perino's early morning statement also made clear, however, that the administration steadfastly opposes drawing funds from the bailout plan to help Detroit. She said the $25 billion that Democrats favor taking from the rescue plan should come, instead, from a Department of Energy program previously approved and funded to develop fuel-efficient vehicles. The White House opposes the idea of automakers getting an additional $25 billion.
Democrats want to use part of the $700 billion Wall Street bailout for emergency loans to help prop up the Big Three carmakers. General Motors Corp., Ford Motor Co. and Chrysler LLC are seeking an infusion of $25 billion, a figure that several Senate Democrats embraced Sunday.

More here, via the Cincinnati Enquirer.

Purely rhetorical question: Have you driven a Ford lately?

Why State Budgets Are in the Crapper (Hint: It's Not the Economy)

gillespie@reason.com (Nick Gillespie) — Mon, 10 Nov 2008 08:23:00 EST

Author's update: An astute reader, which is to say one who, unlike me, had had some coffee before perusing the screen and can tell the difference between a 3 and an 8, points out that this story I posted here is actually five years old. Apologies for that mistake, but in the interest of openness, I'll leave it up while I see if I can find any current stories on the same matter.

USA Today has analyzed why so many states are in serious budget meltdowns. The answer, it turns out, is not that the national economy has tanked, or even regional economies have hit the skids:

The financial problems racking many state governments this year have less to do with the weak national economy than with the ability of governors and legislators to manage money wisely.
That is the key finding of a USA TODAY analysis of how the 50 states spend, tax and balance their budgets—or don't.
The National Governors Association says states are suffering their worst economic crisis since World War II. But for many states, the analysis shows, the fault is largely their own.
Some states that have enjoyed handsome growth in tax revenue nonetheless have huge budget shortfalls. At the other extreme, some of the best-managed states suffered sharp declines in tax collections but promptly took painful steps to balance their books.
Utah, Georgia and Delaware are the best financial stewards, according to the USA TODAY analysis of the states' financial performance. The key to their success: restraint. During the economic boom of the late 1990s, these states limited both spending growth and tax cuts. After the economy weakened in early 2001, they acted swiftly and decisively to keep their finances sound.
California, the worst-performing state in the analysis, did the opposite.

Don't expect the current situation to change the way most states do business.

State spending keeps growing.
It went up 6.3% for the fiscal year that ended June 30, 2002, and it's on track to rise about 5% in the 12 months that end June 30. The number of people on Medicaid, which pays for health care and nursing homes for the poor, remains at a near-record 40 million. That number is up 30% since 1998, the result of efforts to sign up people who qualify. And despite anecdotal reports of layoffs—Oregon furloughed 130 state troopers, for example—state governments have added 74,000 workers (an increase of 1.5%) in the past two years while the private sector has registered a net loss of 2.6 million jobs (a decline of 2.4%).

Whole thing here.

The GAO's Transition Wishlist

gillespie@reason.com (Nick Gillespie) — Thu, 06 Nov 2008 10:57:00 EST

The Government Accountability Office has released its list of "urgent policy concerns...[that] are critical and time sensitive and require prioritized federal action." The list, presumably in descending order of importance is as follows:

- oversight of financial institutions and markets,
- U.S. efforts in Iraq and Afghanistan,
- protecting the homeland,
- undisciplined defense spending,
- improving the U.S. image abroad,
- finalizing plans for the 2010 Census,
- caring for service members,
- preparing for public health emergencies,
- revamping oversight of food safety,
- restructuring the approach to surface transportation,
- retirement of the Space Shuttle,
- ensuring an effective transition to digital TV, and
- rebuilding military readiness.

More information here.

I can follow the GAO, which is absolutely one of the most useful resources for journalists and small-government devotees of all professions, through first four. But then I think they start getting a bit lost in the weeds (and not simply because caring for service members and rebuilding military readiness should probably be folded into numbers two through four into a single bullet point about totally revamping about half of all discretionary government spending). I just don't see how the retirement of the Space Shuttle makes it onto the list. Can't we just ignore it until it goes away?

What If Ted Stevens Threatens Not to Resign?

jsullum@reason.com (Jacob Sullum) — Wed, 29 Oct 2008 15:07:00 EDT

The Alaska Republican Party is urging voters to re-elect a convicted felon to the U.S. Senate. If Ted Stevens, who was found guilty on Monday of filing false Senate financial disclosure forms, is defeated in next week's election, he will be replaced by his Democratic opponent, Anchorage Mayor Mark Begich. But if he wins and then resigns, there will be a special election that a Republican might win.

Here's another scenario: Stevens is re-elected and refuses to resign, forcing his colleagues to vote on whether to expel him. They can muster only 66 votes, one shy of the two-thirds majority required. Stevens continues to serve in the Senate while serving his prison term, which he completes in 2011 or so, and is re-elected in 2014, when he turns 90. I'm no Stevens fan, but for sheer entertainment value this could be the best thing to come out of this year's election. (For similar reasons, I was rooting for Jim Traficant, who was expelled from the House in 2002 by a vote of 420 to 1.)

Speaking of pork-pulling nonagenarian senators, Democratic leaders in the Senate reportedly are planning to ditch Robert Byrd as chairman of the Senate Appropriations Committee. According to The New York Times, they have "reluctantly and sorrowfully" concluded that Byrd, who has represented West Virginia in the Senate since 1959, "is not up to the immense challenges he would face in that job." They are therefore bringing in some new blood: 84-year-old Sen. Daniel K. Inouye of Hawaii.

"If Obama hates Bush's policies, hopefully he will cut government."

gillespie@reason.com (Nick Gillespie) — Fri, 24 Oct 2008 16:25:00 EDT

Columnist Ron Hart:

Is there better irony than an imprudent Washington "investing" about a trillion dollars of debt funded tax money into the banking system and telling them how to run a business?
The same federal government confiscated the Mustang Ranch bordello in Nevada in the 90s and then promptly ran it into bankruptcy. If the feds cannot make a profit in a monopoly business of selling sex and booze, my guess is the complexities of banking will totally perplex them—especially when they have to follow the convoluted regulations they themselves impose.
If Congress imposes economic sanctions on Iran as harshly as they have on businesses in the USA, we should crush them with no military force required.

Hart notes wryly, "if Obama hates Bush's policies, hopefully he will cut government."

More here.

Obama's Job Fetish

jsullum@reason.com (Jacob Sullum) — Wed, 22 Oct 2008 07:00:00 EDT

Despite all the facile comparisons between the current economic situation and the conditions that preceded the Great Depression, the most recent figures show GDP continuing to grow, with unemployment at a historically modest 6.1 percent. But if, as widely expected, Barack Obama faces a recession when he takes office in January, many Americans will expect him to deliver on his promise to "create jobs."

They probably will be disappointed, because Obama seems to view job creation not only as something the government does with taxpayers' money but as an end in itself. That's a recipe for wasteful spending that will divert resources from more productive uses and ultimately result in lower employment than would otherwise occur.

Obama says he will "transform the challenge of global climate change into an opportunity to create 5 million new green jobs," which he likens to the economic activity triggered by the personal computer. This way of looking at climate change is a variation on the broken window fallacy, according to which the loss caused by a smashed window is offset by the employment it gives the glazier.

By the same logic, Obama should view war, crime, and hurricanes as opportunities to create jobs. All three generate economic activity, but we'd be better off if the resources spent on bombs, burglar alarms, and reconstruction were available for other purposes, instead of being used to inflict, prevent, or recover from losses.

Likewise, overhauling manufacturing, transportation, and power production to reduce the emission of carbon dioxide may or may not be justified, but it is properly viewed as a drag on the economy. We'd be better off if we didn't have to worry about, and use resources to minimize, climate change.

Obama wants to spend $150 billion on "developing and deploying advanced energy technologies, including solar, wind and clean coal." He says this plan "will reduce greenhouse gas emissions, decrease our dependence on foreign oil and create jobs that can't be outsourced."

Leaving aside the desirability of "energy independence" and the merits of Obama's approach to reducing carbon dioxide emissions (which has the government, rather than businesses, picking the most efficient methods), the fact that he lists "jobs that can't be outsourced" as a distinct goal is troubling. Paying people to dig holes and fill them in again also creates "jobs that can't be outsourced," but that doesn't mean it's a smart investment or an appropriate use of taxpayers' money.

Speaking of digging holes, Obama also wants to spend $60 billion to "provide financing to transportation infrastructure projects across the nation." He says "these projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity."

Fixing a bridge, widening a highway, or building a light rail system may or may not make economic sense. But the fact that it involves paying people to operate jackhammers and pour concrete does not make it any more worthwhile. If creating jobs and stimulating "new economic activity" can justify transportation projects, why not fill the country with empty airports and bridges to nowhere?

Obama also sees regulation as an engine of economic growth. He says requiring that "25 percent of American electricity be derived from renewable sources by 2025...has the potential to create hundreds of thousands of new jobs." Even if true, that projection tells us nothing about the advisability of such a mandate. If the government required that 25 percent of cars be replaced by horse-drawn carriages, that also would create certain jobs, while destroying or forestalling others.

Obama's job fetish is apparent even when he talks about spontaneous economic activity. "Businesses should live up to their responsibilities to create American jobs," he declared in his acceptance speech at the Democratic National Convention. In a free market, businesses exist because they provide goods or services that people value. A business that makes job creation its overriding goal will not be employing anyone for long.

Privatizing the Way Out of Shortfalls

gillespie@reason.com (Nick Gillespie) — Tue, 21 Oct 2008 14:03:00 EDT

In The New York Post, Leonard Gilroy, the director of government reform at Reason Foundation, the nonprofit that publishes reason online, tallies up savings from a recent string of privatizations done by Chicago (yeah, that Chicago):

Mayor Richard Daley has learned how effective partnering with the private sector can be:
* In 2005, he leased a 7.8-mile stretch of toll road for $1.8 billion. The private company operates and maintains the road, earning its money back through tolls. The city used the upfront cash to pay down debt and establish a $500 mil- lion rainy-day fund.
* Daley also didn't see why the city was in the parking-garage business. So he leased four downtown parking garages, bringing taxpayers $563 million.
* Most recently, he announced the lease of Chicago's Midway Airport to a private company for $2.5 billion.
All these moves have raised the city's credit rating, lowered its borrowing costs and shored up pension funds.

Addressing New York's massive deficit, Gilroy argues that

the Empire State has $70 billion in transportation projects waiting for funding. Two years ago, it identified several potential public-private partnership projects that would help eliminate the backlog—including expansion projects for the Staten Island Expressway, Van Wyck Expressway, I-84 and other major highways....
Any windfall needs to deliver lasting value for taxpayers. Leasing valuable assets and then diverting the cash to cover operating shortfalls in other parts of the budget may be a tempting Band-Aid but is terrible fiscal policy.

More here.

Not to drift into "disaster capitalism" or anything, but one possible upside of budget crunches can be that governments get out of businesses they don't need to be in in the first place.

Tomorrow We Scrimp, But Tonight We Spend!

gillespie@reason.com (Nick Gillespie) — Mon, 20 Oct 2008 13:02:00 EDT

Here's some text from a speech likely president Barack Obama gave a week ago in Toledo, Ohio:

I won't pretend this [Obama's economic "rescue plan"] will be easy or come without cost. We'll have to set priorities as never before, and stick to them. That means pursuing investments in areas such as energy, education and health care that bear directly on our economic future, while deferring other things we can afford to do without....
It also means promoting a new ethic of responsibility. Part of the reason this crisis occurred is that everyone was living beyond their means—from Wall Street to Washington to even some on Main Street. CEOs got greedy. Politicians spent money they didn't have. Lenders tricked people into buying homes they couldn't afford and some folks knew they couldn't afford them and bought them anyway.
We've lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save....
Once we get past the present emergency, which requires immediate new investments, we have to break that cycle of debt.

Whole text, which includes details on a whole lot of new and increased spending and not many specifics related to "scouring the federal budget, line-by-line, ending programs that we don't need and making the ones we do work more efficiently and cost less" here.

Given Obama's virtual complete lack of interest in detailing any area of the economy that the government should not be involved in (in the speech, he lauds the bailouts of the Big 2.5 automakers and the financial industry and suggests that more might be necessary; bashes free trade; talks up giveaways to "small businesses," yadda yadda yadda), I humbly submit that the idea of spending today and scrimping tomorrow is magical thinking at best.

One of the oddest surprises of the past 30 years or so was that Bill Clinton's first two budgets, passed by a Democratic majority, were leaner that what came later, with a budget-slashing (har har har) Repbublican Congress. Clinton benefited mightily from what used to be called the peace dividend, the post-Cold War drawdown in military spending (GOP "revolutionaries" such as Newt Gingrich are always slow to acknowledge that the defense budget is the real moving piece of discretionary spending; Nixon, H.W. Bush, and Clinton all took a chisel to defense).

Clinton was a free trader and interested in policy innovation. By contrast, Obama never misses a chance to mention China in a disparaging way and all of his plans seem to revolve around throwing money at any perceived problems. Does anyone think he bring fiscal restraint to the federal budget? Does anyone think he'll approach entitlement reform with any weapon other than increased payroll taxes?

Obama's election will end centuries' worth of odious racial discourse in America and that alone may well be worth a crap economy and videos of kids spreading happiness from now until Doomsday. But let's not pretend that this sort of proposal and a dozen others like it, also from the Toledo stumper, represents change anyone can take seriously:

We will also save one million jobs by creating a Jobs and Growth Fund that will provide money to states and local communities so that they can move forward with projects to rebuild and repair our roads, our bridges, and our schools. A lot of these projects and these jobs are at risk right now because of budget shortfalls, but this fund will make sure they continue.

The Curious Case of Lousiana Film Subsidies

gillespie@reason.com (Nick Gillespie) — Mon, 13 Oct 2008 09:53:00 EDT

One of the biggest bills has come due in Louisiana, where residents are financing a hefty share of Brad Pitt's next movie: $27,117,737, which the producers will receive by cashing or selling off valuable tax credits.
Louisiana, one of the most assertive players in the subsidy game, wound up covering $27 million of the nearly $167 million budget of Pitt's "The Curious Case of Benjamin Button"—the state's biggest movie payout to date—when producers for Paramount Pictures and Warner Bros. qualified the movie under an incentive that has since been tightened....
Until two years ago, Louisiana's program offered a 15 percent credit for virtually the entire budget of a qualified film. Mark Smith, who oversaw the program, pleaded guilty last year to taking $67,500 in bribes to inflate budgets for a company that authorities did not name.

In case you're wondering, there's no evidence that such plans, on whatever scale, actually create jobs (duh).

"There's no evidence yet that this is a particularly efficient or effective way to create jobs," said Noah Berger, executive director of the Massachusetts Budget and Policy Center.
The nonprofit center reviews budget and tax policies in Massachusetts, which is spending about $60 million a year on producer credits. A recent study by the center found that the state's film credit, at 25 percent, is five times what is offered to those who build in designated economic opportunity areas and more than eight times the state's standard investment tax credit.

More here.

Do subsidies really swing that much business? Or are they a waste of tax money? reason has answers dammit.

What the United States Needs Is More Debt, Er, Credit

bdoherty@reason.com (Brian Doherty) — Thu, 09 Oct 2008 10:36:00 EDT

If you hear people adding "record deficits" to the account of the current economic crisis, are they just being hyperbolic? Nope!

The federal budget deficit hit a new record in the just-completed 2008 budget year under the latest estimates from the Congressional Budget Office.
The record $438 billion shortfall for the budget year that ended last week is up from $162 billion posted last year. The previous record of $413 billion was posted in 2004.
CBO said Tuesday that with the economy in a slump, revenues dropped by almost 2 percent. Corporate income receipts dropped by $65 billion, or nearly 18 percent. At the same time, individual income tax revenues declined by 1.6 percent.
The deficit is virtually certain to balloon even higher next year as the government sorts out the financial crisis and taps a $700 billion Treasury fund to buy toxic mortgage-related securities.

But don't worry about it. Both or either McCain or Obama are going to slash spending. And start lots of expensive new programs. And start a few new wars. And lower taxes on most of you. And supply health care and fresh energy solutions to all. And buy everything bad, and sell everything good. And do whatever is necessary to delay by one more day any bad consequences from decades of spending beyond the government's means.

The Nearly $700 Billion Payout No One Talked Much About

bdoherty@reason.com (Brian Doherty) — Wed, 01 Oct 2008 20:32:00 EDT

Decrier of American expansionist foreign policy Chalmers Johnson gripes at Antiwar.com (scroll down a bit) about how no one paid much mind to the casual passage by the House this week of a $612 billion defense authorization:

On Wednesday, Sept. 24, right in the middle of the fight over billions of taxpayer dollars slated to bail out Wall Street, the House of Representatives passed a $612 billion defense authorization bill for 2009 without a murmur of public protest or any meaningful press comment at all. (The New York Times gave the matter only three short paragraphs buried in a story about another appropriations measure.)
........
Our annual spending on "national security" – meaning the defense budget plus all military expenditures hidden in the budgets for the departments of Energy, State, Treasury, Veterans Affairs, the CIA, and numerous other places in the executive branch – already exceeds a trillion dollars, an amount larger than that of all other national defense budgets combined. Not only was there no significant media coverage of this latest appropriation, there have been no signs of even the slightest urge to inquire into the relationship between our bloated military, our staggering weapons expenditures, our extravagantly expensive failed wars abroad, and the financial catastrophe on Wall Street. The only congressional "commentary" on the size of our military outlay was the usual pompous drivel about how a failure to vote for the defense authorization bill would betray our troops. The aged Sen. John Warner (R-Va.), former chairman of the Senate Armed Services Committee, implored his Republican colleagues to vote for the bill "out of respect for military personnel."

An Expert-Induced Bubble

info@reason.com (David M. Levy) info@reason.com (Sandra J. Peart) — Tue, 30 Sep 2008 07:00:00 EDT

How is it that assets built out of mortgages which just yesterday were worth so much are worth so little today? Investors have only recently come to realize that the ratings for these assets were terribly biased. The question now is why we ever came to believe mortgage-backed securities were worth our investing dollars in the first place. There is of course much blame to go around. But insufficient attention has been paid to how ordinary investors—not greedy capitalists but instead those of us who are trying to save for our retirement, our kids' college education, or, indeed, the down payment for a house!—trusted the experts and got burned.

Experts are constantly telling investors what to buy. Sometimes they give us good advice and sometimes not. So surely the fact that there are experts who give investment advice can't explain the trillion-dollar bubble and subsequent meltdown we're now witnessing. The key additional fact is that experts were selling advice about mortgage-backed assets as if those assets were independent when, in reality, they weren't at all independent assets. Only once investors realized that the housing market is a national market—not a local one—did it become clear that these securities were extraordinarily risky. Hence the collapse.

Until very recently it was widely believed that all housing markets were local. If this were so, then assets constructed by pooling mortgages across different localities would consist of pooled independent assets. And these new assets would be dramatically less risky to hold than a single mortgage of similar worth: Combine a bunch of diverse mortgages and sell shares of the new security and those shares represent much less risk than holding a single mortgage of the same value as the share. Or so the story went.

All of this, however, depended critically on housing markets being local, so that the assets in the pooled security didn't move together. Not so long ago, this was the conventional wisdom. Federal Reserve Chairman Alan Greenspan testified to this effect before Congress in 2005, when the housing bubble was well under way: "The housing market in the United States is quite heterogeneous, and it does not have the capacity to move excesses easily from one area to another. Instead, we have a collection of only loosely connected local markets."

So, following Greenspan's advice, a firm could build highly rated investment portfolios of purportedly uncorrelated assets out of nothing but mortgages from different parts of the country. Once these portfolios were built, it would become easier to finance houses even for buyers of dubious credit. The problem was that these new securities, and the money which flowed into all housing markets, were sufficient to generate correlation in housing values across the country. As everyone followed the experts' advice—and invested in these new mortgage-backed assets—we began to observe correlated behavior in the housing market, nationwide.

So how did the securities maintain their high investment grades? Once correlations were evident, once the interconnectedness of housing markets nationwide was evident, why didn't another set of experts, the rating agencies, step in and downgrade the securities?

Because of incentives, the cornerstone of economists' advice about how to get good economic outcomes. In this case, the incentives weren't there to obtaining unbiased estimates of security values. Instead, incentives favored "rating shopping" and so, unsurprisingly, rating shopping became the norm. The Securities and Exchange Commission's 1994 report, Concept Release: The Nationally Recognized Statistical Ratings Organization (NRSRO), contained the following sentences:"A mortgage related security must, among other things, be rated in one of the two highest rating categories by at least one NRSRO." The phrase "one of the two highest rating categories" authorized the firm holding a mortgage backed security to shop for ratings. If one rating agency failed to produce a desirable rating, the firm could look for another, more favorable rating.

Those who made the ratings became like expert witnesses in court, seeing things the way their clients, the firms holding the securities and offering them for sale to you and me, wanted things to be seen. The problem was that shoppers, like a jury, did not have the ability to average out different pieces of testimony to help remove the bias. As long as experts were trusted and the market didn't know the difference between unbiased and biased estimates, the trick worked marvelously. The collapse followed suddenly as we have all come to understand that the ratings were miserably biased.

All of this is a telling lesson about how much and when to trust the experts. This is especially so now that a new set of experts is attempting to get us all out of the mess we're in.

David M. Levy is an economist at George Mason University and Sandra J. Peart is an economist at University of Richmond. They are the authors of The Vanity of the Philosopher: From Equality to Hierarchy in Post-Classical Economics.

What's $7 Billion When You're Ready to Blow 100 Times As Much?

jsullum@reason.com (Jacob Sullum) — Fri, 26 Sep 2008 18:39:00 EDT

As Rep. Jeff Flake (R-Ariz.) notes, "This all may seem a little trivial in a week [when] we may approve $700 billion," but the $630 billion omnibus spending bill Congress is finishing up includes some $6.6 billion in earmarks. The biggest pork puller in the Senate is the indicted Alaska Republican Ted Stevens, who will be going out with a bang if he's convicted of illegally hiding corporate gifts and is forced from office. According to Taxpayers for Common Sense, Stevens is responsible for 39 earmarks totaling $239 million. In the House, The New York Times reports, Rep. John Murtha (D-Pa.) leads with "30 items totaling $111 million, including $24.5 million for the National Drug Intelligence Center in Johnstown, his hometown." That's $1.5 million more than his last earmark proposal for the intelligence center, which presumably is the main reason drug warriors are so smart.

While Flake, a leading fiscal consrervative, regrets the way the pending Wall Street bailout has defined congressional profligacy up (or is it down?), many of his colleagues welcome it:

Mr. Murtha told reporters that earmarks were just a tiny fraction of "what the administration wants to bail out those rich guys in New York."
Other lawmakers said the earmarks were a way of tossing a few bones to Main Street, before the Treasury pours hundreds of billions of dollars onto Wall Street.

As I predicted in January, earmark sponsors easily circumvented President Bush's executive order telling agencies to ignore spending instructions not included in the body of legislation. According to Times, "the omnibus spending bill says that the lists of earmarks, though not included in the bill, 'are hereby required by law to be carried out' by federal agencies, just as if they were in the bill."

What's up With Wired's Presidential To Do List?

mriggs@reason.com (Mike Riggs) — Wed, 24 Sep 2008 12:14:00 EDT

Magazines of every stripe are going wild with policy suggestions aimed at the next administration. Wired is one of those magazines, and its October issue contains 15 ideas "about how to fix the things that need fixing." (Earlier this month, Brian Doherty analyzed two similar lists from Foreign Policy.) After reading these babies online and in print, I'm tempted to conclude that they're all for show. (One Wired editor to another: Goddamnit, man, we need more Web 2.0 imagery!) The compilers seldom take applicability into consideration, and the Wired list in particular builds on the assumption that the next president lacks a concrete agenda for environmental concerns and foreign policy. Cabinet members, too, have plans, and so do the expert yappers in the next concentric circle. A group of West Coast journo nerds isn't likely to be anywhere near the bullseye.

But just for a minute, let's pretend that the endless excretion of lists titled, "What Obama/McCain Must/Can't/Should/Shouldn't do to Fix the Country," are relevant, and that one or two suggestions here and there possibly will resonate with somebody who knows somebody who knows somebody who is the next president. In this scenario, the Wired list disappoints, not because it lacks innovation, but because it possesses a big-government mentality.

The ideas worth keeping, such as making 401k plans more difficult to opt out of than into and relaxing trade restrictions, could be realized most efficiently through government inaction. Using genome studies and investing more in the prevention of—rather than responses to—future epidemics are wothwhile preventative health measures in and of themselves, but the former, if implemented with no other healthcare reforms, could deny healthcare access to the unknown number of Americans with genetic ticking bombs; while the latter idea could devolve into one more reason to impede immigration.

And some of the ideas, like investing more money in NASA and redesigning entire cities "from scratch" (Le Corbusier lives!), are just plain dumb. But don't take my word for it, check out the complete list here, and use the thread for neas and yeas (or whoos! and boos). Bonus points will be awarded to the commenters who come up with the most totalitarian and the freest First 100 Days agendas.

Ted Stevens on Trial

jsullum@reason.com (Jacob Sullum) — Mon, 22 Sep 2008 17:23:00 EDT

As Sen. Ted Stevens' trial begins in Washington, ABC News reviews the allegations against the Alaska Republican, who is accused of concealing some $250,000 in gifts from VECO Corp., an oil services company based in his state. Although Stevens is not charged with accepting bribes, federal prosecutors nevertheless plan to delve into the favors he allegedly has done for VECO over the years. Stevens' lawyers say the government should stay away from that area unless it is prepared to provide evidence of a quid pro quo. Prosecutors say the help VECO got from Stevens is relevant in explaining his motive for concealing the gifts, which consisted mainly of renovations to his home in Girdwood, Alaska.

But as I argued in a recent column, even if you take the charges at face value, Stevens' relationship with VECO did far less damage to the Treasury than the perfectly legal assistance he has rendered his constituents during his four decades in Congress. Add up all the alleged favors for VECO, and the amount of taxpayer money actually spent totals maybe $35 million. That's probably something like one-thousandth of the money that Stevens has proudly funneled to Alaska during his career. Federal spending there totaled $9 billion in 2006 alone.

I mentioned in my column that Republicans may be stuck with a convicted felon on the ballot in Alaska, since Stevens stands for re-election just a few weeks after his trial is expected to end. Should he win re-election even after losing the trial, The New York Times notes, Stevens' colleagues will be stuck with a convicted felon in Congress unless and until he resigns or his fellow senators vote to force him out.

We're the Government. We'd Rather Pay for It

rbalko@reason.com (Radley Balko) — Wed, 10 Sep 2008 08:52:00 EDT

Your government at work.

Retired Glenwood Springs car dealer John Haines' hope of donating a giant chunk of snow -white marble to the federal government to replace the cracked Tomb of the Unknowns at Arlington National Cemetery is stalled again.
Haines' hoped-for donation, which has sat outside the Yule Quarry near Marble since it was cut for the tomb in 2003, didn't even rate a mention in a 34-page Department of the Army report to Congress this week on replacement and repair options for the deteriorating tomb.
Haines' donation creates problems for the federal government because it is free and has not gone through a pricey bidding and specification process.
[...]
This week's report — the latest in a string of tomb reports done since Arlington officials decided the marble needed replacing 18 years ago — estimates the cost of replacing the tomb's marble at $2.2 million — $80,000 of that for seeking bids, $90,000 for buying and transporting the marble and the remainder for sculpting.
Haines made the final payment for his $31,000 piece of marble last week. He also has lined up donated transport for the rock on a flag-decorated flatbed truck. He did all that after receiving a letter from an Army major general five years ago thanking him for his "most kind and generous donation."

Better that the government spend $170,000 merely to solicit a bid, then another $2.2 million on the actual marble, because who knows what kind of bargain marble Haines is donating?

Except...

...Haines' marble isn't just any marble. It was cut from the same Yule Quarry where the original gold-veined marble for the Tomb of the Unknowns was mined nearly 80 years ago. The marble on the outside of the Lincoln Memorial also came from that quarry. The tomb replacement piece was cut after a nearly five-year search for an unflawed piece that would look like the original.

The only problem with Haines' marble really does seem to be the fact that he wants to donate it.

"It's not doable. A citizen can't just give us any piece of marble and say, 'This is what we'll use to replace the tomb,' " said Thurman Higginbotham, deputy superintendent of Arlington.
[...]

Meanwhile, the free, room-sized block of marble gracing a hillside near Marble draws some curious tourists who snap pictures in front of it. Haines said if it can't be used for the tomb, he has the option to sell it back to the quarry, where it would be cut up and sold for other projects.
"I understand how the government works," Haines said. "But there comes a point when you just say 'to hell with it.' "

Haines should use the marble to construct a monument to government waste.

Serve, Protect, and Ignore

jsullum@reason.com (Jacob Sullum) — Wed, 10 Sep 2008 07:00:00 EDT

The Republican platform unveiled last week notes in passing that "the Constitution assigns the federal government no role in local education." Yet the same document offers opinions on all manner of local educational issues, including the virtues of phonics, the evils of sex education, the wisdom of merit pay for teachers, and the folly of social promotion.

That contradiction illustrates the hollowness of the Republican commitment to "constrain the federal government to its legitimate constitutional functions." The Republicans (like the Democrats) respect the Constitution only when it's convenient.

You might say that's old news. Yet while campaigning for president in 1980, Ronald Reagan promised to abolish the Department of Education. So did Bob Dole in 1996. After two terms of a Republican president who proudly charged in the opposite direction, the most John McCain can muster is a promise to "identify and eliminate ineffective programs"—that is, to make unconstitutional activities more efficient.

Although the Department of Education is still with us, by threatening to eliminate it Reagan and like-minded Republicans signaled that they understood some matters are beyond the purview of the federal government. It's hard to find evidence of that understanding in the current GOP platform.

In 1887 Grover Cleveland, a Democrat, vetoed a bill allocating $10,000 to help drought-stricken farmers in Texas, saying, "I can find no warrant for such an appropriation in the Constitution." Nowadays the Republican Party takes for granted the propriety of both "a natural disaster insurance policy" and an "economic safety net for farmers."

Likewise, the GOP platform does not question the legitimacy of the federal government's enormous entitlement programs, saying only that they should be "reformed" and "modernized." Regarding Social Security, McCain does not go even as far as George W. Bush, who proposed letting Americans shift some of their payroll taxes to private accounts. By contrast, the current platform calls for "personal investment accounts which are distinct from and supplemental to" the existing system of intergenerational income redistribution.

Far from shrinking the federal government, the Republicans want to enlarge it, providing "aid to those hurt by the housing crisis," solving "the energy crisis" (undeterred by the Carteresque connotations of that phrase), "expanding access to higher education," seeking "a major expansion of support" for certain kinds of stem cell research, even "returning Americans to the moon as a step toward a mission to Mars." The platform does not explain how these initiatives qualify as "legitimate constitutional functions."

The Republicans are committed to "continuing the fight against illegal drugs," even though that fight, unlike alcohol prohibition, was never authorized by a constitutional amendment. They want to impose national bans on gay marriage, human cloning, assisted suicide, and online gambling, even while declaring that "Congress must respect the limits imposed by the Tenth Amendment," which reserves to the states or the people "the powers not delegated to the United States by the Constitution." Despite their eagerness to trample individual freedom in all these areas, Republicans claim "the other party wants more government control over people's lives," but "Republicans do not."

The Republicans "lament that judges have denied the people their right to set abortion policies in the states." Yet their position that "the unborn child has a fundamental individual right to life" guaranteed by the 14th Amendment implies that the Constitution not only allows but requires a national ban on abortion, which also would override state policy choices.

Defending "the free-speech right to devote one's resources to whatever cause or candidate one supports," the Republicans say they "oppose any restrictions or conditions upon those activities that would discourage Americans from exercising their constitutional right to enter the political fray or limit their commitment to their ideals." Yet their presidential nominee is famous for pushing precisely such restrictions and conditions in the name of "campaign finance reform."

As an indicator of where McCain would take the country after eight years of big-government conservatism, the 2008 Republican platform is not just disappointing. It's incoherent.

Freddie Mac the Freeloader

gillespie@reason.com (Nick Gillespie) — Tue, 09 Sep 2008 08:46:00 EDT

Regarding the Freddie Mac and Fannie Mae, the government-backed mortgage colossi, whose bailout could cost $200 billion:

"Doesn't this make the case for privatization, and powerfully at that? Don't forget that we are also sitting here with Social Security and Medicare leaving taxpayers on the hook for more than $50 trillion in liabilities."

That's James Pethokoukis, economics columnist of U.S. News & World Report, quoted by reason contributor and Denver Post columnist David Harsanyi, who asks when will the government gravy stop being poured?

Airlines already have benefited from the largesse. Detroit's auto industry, it has been reported, hopes to secure $50 billion in additional federal loans to, you know, help out.
Well, because the Big Three built cars no one wanted, failed to embrace new technologies, offered sweetheart deals to executives, and surrendered to predatory union demands ... naturally, they deserve a cushy government loan. (I only hope newspapers are afforded such compassionate treatment. We're a national treasure, after all.)...
Isn't it ironic that government bars a citizen from risking his own Social Security funds because it's too chancy yet uses your money to bail out companies that have engaged in the very behavior government supposedly is safeguarding us from?
And really, what's riskier than letting Washington handle your money?

More here.

Jeff Taylor on FMFM here.

1990s Nostalgia Sweeps Nation: Government Shutdowns, Doc Martens to Follow

kmw@reason.com (Katherine Mangu-Ward) — Mon, 08 Sep 2008 15:55:00 EDT

From today's Congress Daily PM:

"This is the longest time it's been in 20 years since Congress has actually [not] passed one appropriations bill. It is not a record to be proud of and we would like actually [to] have them do some of that before we talk about a CR."
—White House Press Secretary Dana Perino, in response to a question on whether President Bush would veto a continuing resolution if it includes a drilling moratorium.

Nostlgia for the 1990s is in the air (see: The Wackness). And at the Denver convention, Dems spoke wistfully of the Clinton era. Apparently Newt Gingrich is part of the zeitgeist too. He sees another potential government shutdown on the horizon. If only...

Vintage reason on the shutdown here.

Nobody's Default But Ours

bdoherty@reason.com (Brian Doherty) — Mon, 08 Sep 2008 15:22:00 EDT

Old-school libertarian historian Jeffrey Rogers Hummel over at History News Network has some thoughts on the unthinkable in the wake of the Fannie Mae and Freddie Mac takeovers: is defaulting on U.S. Treasury obligations in our future? And would that be a bad thing?

He thinks yes, and no, for a variety of reasons. He sallies forth with some hardcore libertarian moral arguments. ("Treasury securities represent a stream of future tax revenues, and investors have no more just claim to those returns than to any investment in a criminal enterprise.")

But he also has come economic speculations that lead him to believe a partial U.S. government debt repudiation would not be the "end of the world" that Tyler Cowen, with whom he's grappling throughout the piece, thinks it would be. (Cowen's opinion is shared by most of the world, of course.) Says Hummel:

Repudiating government debt eliminates future tax liabilities. To the extent that people correctly anticipate those liabilities, the value of private assets (including human capital) should rise over the long run by the same amount that the value of government securities falls. Thus, people will gain or lose depending how closely their wealth is associated with the State. If on the other hand, people underestimate their future tax liabilities, they suffer from a fiscal or "bond illusion" in which Treasury securities make them feel wealthier than they actually are. Debt repudiation will bring their expectations into closer alignment with reality, which should increase saving.

Hummel even thinks the political repercussions of such repudiation might be relatively sunny, considering the history of past state-level repudiations. (Most of his value judgements here rather require you to be a libertarian to see them as sunny, of course.)

A government default is certainly a balanced-budget amendment with real teeth. Moreover, government defaults in the past, when not obviated by bailouts from other governments, seem to have had positive political consequences. Compare the widespread defaults of American state governments in the 1830s, with their cascading benefits--reluctance of states to set up government-owned railroads the way they had government-owned canals, balanced-budget constitutional amendments at the state level which even today impose lingering constraints, a general state retrenchment in a period of increasing laissez faire, among others--with the baleful consequences of the failure to repudiate the Revolutionary War debt, the most notorious of which was replacement of the Articles of the Confederation with the U.S. Constitution.....

The greatest potential political benefit of a future government default would be the end of the democratic welfare state...

It's an election year, and strangely no one is yet leaping on a "repudiate the debt" platform. But with the looming social insurance catastrophe, that's a possibility that those living today may well face. Starting to think about how much of an "end of the world" it might be seems both bracing and necessary.

The Subsidy State

jsullum@reason.com (Jacob Sullum) — Wed, 03 Sep 2008 07:00:00 EDT

A few years ago, in the wake of Hurricane Katrina, Sen. Tom Coburn of Oklahoma suggested taking money earmarked for a notoriously extravagant "bridge to nowhere" in Alaska and using it for reconstruction work in Louisiana. Sen. Ted Stevens of Alaska, a fellow Republican, angrily declared, "This is the first time I have seen any attempt by any senator to treat my state...differently from any other state."

In a tirade that included threats to behave like "a wounded bull on the floor of the Senate," to "be taken out of here on a stretcher," and to "resign from this body," Stevens' insistence that all he wanted was equal treatment for Alaska may have been the least believable thing he said. During the last four decades no one has done more than Stevens to ensure that Alaska is treated unequally, receiving far more in federal spending than it pays in taxes.

The octogenarian senator's gift for grabbing dollars in the zero-sum game of congressional appropriations helps explain his easy victory in last week's Republican primary, despite his recent indictment on federal charges of hiding corporate gifts. Yet the "track record of delivering results for Alaskans" he brags about is more scandalous than the crimes he denies, exemplifying a pervasive, poisonous parochialism that flouts the Constitution and drains the Treasury.

Federal prosecutors accuse Stevens of violating the Ethics in Government Act by failing to report more than $250,000 in gifts (consisting mostly of renovations to his "chalet" in Girdwood, Alaska) from VECO Corp., a now-defunct oil services and construction company whose CEO has admitted bribing state officials. Stevens' trial is scheduled to begin on September 22 and conclude shortly before the November 4 general election, so Republicans could be stuck with a convicted felon on the ballot.

Although the government says Stevens "could and did use his official position and his office on behalf of VECO," it is not charging him with accepting bribes, apparently because it does not have enough evidence of a quid pro quo. But if Stevens did help VECO with grants or contracts, it was of a piece with the "results" he has delivered for his constituents since he joined the Senate in 1968, and the amount of taxpayer money involved was a drop in the ocean compared to the billions of dollars he has directed Alaska's way.

From 2004 to 2008, Taxpayers for Common Sense reports, Stevens had a hand in 891 Alaska-oriented earmarks worth $3.2 billion. That works out to about $4,800 per Alaskan, 18 times the national average. And earmarks represent just a fraction of federal spending in Alaska, which totaled $9 billion in 2006 alone.

According to the Tax Foundation, Alaska ranked first in federal spending per capita in 18 of the 25 years from 1981 through 2005. In 2005 Alaskans received $1.84 for every dollar they sent to Washington in taxes. Stevens, who was chairman of the Senate Appropriations Committee for a dozen years and until his indictment was the senior Republican on the defense appropriations subcommittee, has played such an important role in this northward redistribution of income that federal spending in Alaska is known as "Stevens money."

Alaska continues to receive these subsidies from the rest of us even though its government, which collects neither sales nor income tax from state residents, is flush with oil revenue and running budget surpluses. Yet Stevens, who lobbied for statehood in the 1950s, still sees Alaskans, the biggest beneficiaries of congressional largess, as victims of a high-handed federal government.

During his 2005 tantrum over Tom Coburn's proposal to move transportation money from Alaska to hurricane-stricken Louisiana (a proposal the Senate overwhelmingly rejected), Stevens repeatedly invoked his state's "sovereign" and "equal" status, seemingly worried that his colleagues were disrespecting Alaska behind his back. His attitude was reminiscent of a beggar who not only demands a handout but insists that everyone pretend the money was his all along.