Billboard Senate Blues

The Washington Post reports on Senator Reid's protection of billboards, which he says is "a matter of personal importance":

In a (quite) large sign that protecting U.S. troops isn't the only thing on Senate Majority Leader Harry Reid's mind these days, the Nevada Democrat inserted an item into the Senate's Iraq war funding bill -- safeguarding billboards.

Senate debate began yesterday on the bill, which provides $122 billion for the wars in Iraq and Afghanistan; sets a goal of March 31, 2008, for withdrawing U.S. troops from Iraq; and -- if Reid has his way -- allows thousands of billboards destroyed by bad weather to be rebuilt.

An opponent of Reid's measure is quoted in the news article:

Kevin Fry, president of Scenic America, said: "The bill carves out an exception to local land-use rules for a single industry that is not available to any other. . . . One might reasonably ask why legislation affecting the South and Southeast was introduced by a senator from Nevada."

Is it also just too much to ask that the Senate majority leader, and every member of Congress for that matter, consult the Constitution? It seems to me that the Supreme Court's constitutional jurisprudence has taken local land use rules to be a matter of police power, which is supposedly reserved by the 10th Amendment for state government. Constitutionally speaking, Congress is supposed to have certain enumerated powers which are located in Article I, Section 8. I can't find the police power there, nor can I find any other power in the list of enumerated powers that I think sounds like specifying rules for billboards.

Is there something I'm missing?

Agricultural Subsidies & Congress

The Wall Street Journal ($$) has interesting commentary today concerning agricultural subsidies.

Congress is preparing to rewrite farm policy this year, which means the farm lobby will try to tap taxpayers for another $18 billion or so per year to subsidize agribusiness. Some things in politics can't be changed. But is it asking too much for Congress at least to cut off subsidies to the richest Americans, many of whom don't even farm for a living?

The point of the commentary is to discuss a proposal by the President to cap farm subsidy payment eligibility at $200,000 annual adjusted gross income (AGI). Currently the cap is at $2.5 million AGI. You can probably tell from the quote above that the WSJ supports the reduced cap, and the WSJ seems not really to support agricultural subsidies at all. Of course, I don't support agricultural subsidies, because as any Econ 101 student learns agricultural subsidies are bad economic policy.

But, what is really interesting about the commentary are some of the numbers presented.

. . . . In 2004, 276 Washington, D.C. "farmers" filed an IRS "Schedule F" -- for taxpayers who actively participate in their farms -- and 80 of them reported AGI of more than $200,000. If you've been to the District of Columbia lately, you've probably noticed it isn't overrun with corn fields. The D.C. 80 almost certainly do something else as their main occupation, and we'd like to know how many of them also cadge farm payments on the side. Who are these mystery farmers anyway?

Yes, indeed, who are these DC farmers? Let's see, there are what, 435 members of Congress? Many of these are certainly from farm states. There are sure to be at least a few agricultural subsidy lobbyists. And, then, there are all the political appointees to the Executive Branch agencies, and certainly at least a few of these are involved in the agricultural subsidies programs of our government. I have to guess that at least a few of these DC farmers are active participants in the political process that chooses the agricultural subsidy programs.

Okay, let's forget the DC farmers for a minute. I wonder how many "farmers" around the country with AGI of $200,000 or more receive farm subsidies?

All in all, some 38,000 "farmers" who reported AGI of more than $200,000 in 2004 received more than $400 million in federal farm subsidies, or about 5% of all farm program payments that year. . . .

Unfortunately, the WSJ commentary points out that the proposed change in cap value is "controversial":

With all the political and media chatter about "inequality" these days, you'd think this welfare for the rich would cause a stir. But this is Washington, where corporate welfare is a bipartisan industry. The lower AGI subsidy cap has turned out to be the most controversial Bush farm proposal and is running into stiff opposition on Capitol Hill.

"I'm not sure that Congress is going to go along with that whole concept of the $200,000 AGI. At least I'm not supportive of it," declared Missouri Republican Jo Ann Emerson at a recent hearing. Arkansas Democrat Blanche Lincoln, who runs the subsidy subcommittee in the Senate, also opposes reducing farm welfare for the rich.

The National Cotton Council has been especially vocal, with Chairman John Pucheu declaring that "means testing continues to be bad policy." He added that "The Administration's proposal greatly expands the intent of Congress, which imposed a $2.5 million AGI means test in the current farm bill aimed primarily at eligibility of those with substantial non-farm income." So $200,000 isn't substantial?

That is an interesting question, at least I think it is in view of my AGI.

Well, back to the topic of the DC farmers. It turns out that at least one of the DC farmers is Iowa Senator Charles Grassley.

By the way, one gentleman farmer who's doing the right thing is Iowa Senator Chuck Grassley. According the Des Moines Register, Mr. Grassley reported net income of $25,177 from his 800-acre family farm in 2005 and received about $34,000 in farm subsidies that year. But at least he's supporting the subsidy means test.

I'm glad to read that Senator Grassley supports the new cap. But, again, I find the interesting tidbit of information in the numbers shown here. For this DC farmer, the government subsidy payments received are greater than the net income reported from the farm which is the object of the subsidy payments. Actually, I think the government subsidy payments are just about 35% greater than the net income reported from the farm. Now that is an interesting business. The numbers also suggest that government has chosen a very interesting public policy for agriculture. I suppose, when you think about all these numbers, what we have in here is a pretty good illustration of why economists tend to think agricutural subsidies are such bad economic policy.

Top Ten Emergency Earmarks

Just in case you want to keep score on the earmarks Politico reports a list of the top ten:

--$165,200 to the widow of Rep. Charles Norwood (R-Ga.), a promoter of patients’ rights legislation who died of cancer and lung disease in February, three months after he was reelected.

--$4 million for the Office of Women's Health at the Food and Drug Administration.

--$5 million for tropical fish breeders and transporters for losses from a virus last year.

--$25 million for spinach that growers and handlers were unable to market, up to 75 percent of their losses.

--$50 million “for asbestos abatement and other improvements” to the Capitol Power Plant.

--$60.4 million for the National Marine Fisheries Service, “to be distributed among fishing communities, Indian tribes, individuals, small businesses, including fishermen, fish processors, and related businesses, and other persons for assistance to mitigate the economic and other social effects caused by” a commercial fishery failure.

--$74 million “for the payment of storage, handling, and other associated costs for the 2007 crop of peanuts to ensure proper storage of peanuts for which a loan is made.”

--$120 million for the shrimp and menhaden fishing industries to cover consequences of Hurricane Katrina.

--$283 million for the Milk Income Loss Contract Program.

--$400 million for “wildland fire suppression.”

And, that was just in the House. The Senate has pork plans as well:

Next week, the Senate will take up its version of the war bill, which includes such sweeteners as $13 million for Ewe Lamb Replacement and Retention Program, $24 million for sugar beet producers and $165.9 million for fisheries disaster relief.

I suppose what I'm going to write next will just sound silly. But, when you look at the enumerated powers in Article I, Section 8, where can we find Congress having the power to do the things on these lists? Does the power to regulate interstate commerce include the power to pay for ewe lamb replacement or to subsidize milk income losses, or to give "our" money to spinach farmers for unmarketed crops? I know, I know, the Supreme Court has surely allowed Congress to assert such things as falling under the power to regulate interstate commerce. Oh, and by the way, where is the enumerated power to give tax dollars to a widow? And, all of this as part of an emergency national defense appropriations bill. What a shame.

Congress Is A Mess

John Fund:

Nothing highlighted Congress's spending problem in last year's election more than earmarks, the special projects like Alaska's "Bridge to Nowhere" that members drop into last-minute conference reports leaving no opportunity to debate or amend them. Voters opted for change in Congress, but on earmarks it looks as if they'll only be getting more smoke and mirrors.

Democrats promised reform and instituted "a moratorium" on all earmarks until the system was cleaned up. Now the appropriations committees are privately accepting pork-barrel requests again. But curiously, the scorekeeper on earmarks, the Library of Congress's Congressional Research Service (CRS)--a publicly funded, nonpartisan federal agency--has suddenly announced it will no longer respond to requests from members of Congress on the size, number or background of earmarks. "They claim it'll be transparent, but they're taking away the very data that lets us know what's really happening," says Oklahoma Sen. Tom Coburn. "I'm convinced the appropriations committees are flexing their muscles with CRS."

Indeed, the shift in CRS policy represents a dramatic break with its 12-year practice of supplying members with earmark data. "CRS will no longer identify earmarks for individual programs, activities, entities, or individuals," stated a private Feb. 22 directive from CRS Director Daniel Mulhollan.

When Sen. Coburn and Sen. Jim DeMint of South Carolina submitted earmark inquiries recently, they were both turned down. Each then had heated conversations with Mr. Mulhollan. The director, who declined to be interviewed for this article, explained that because the appropriations committees and the White House's Office of Management and Budget (OMB) were now preparing their own lists of earmarks, CRS should no longer play a role in the process. He also noted that both the House and Senate are preparing their own definitions of earmarks. "It is not appropriate for us to continue our research," his directive states.

There is at least one member of Congress who wants to end the corruption:

Sen. Coburn plans to fight back. He says he will attach an amendment to every appropriations bill demanding CRS prepare a full report on the earmarks in it. "Let senators vote for secrecy and prove they don't want a transparent process or let them deliver what they promised," he says. "The choice will be theirs and the American people will be watching."

It seems to be the case that many people are watching. I suspect a large part of the Republican defeats in the last election were due to many people thinking the party running Congress was misuing Congressional power. Now the other party runs the Congress and it seems nothing has changed. Or, perhaps it would be safe to say something is changing in Congress, i.e., the members of Congress are now trying very hard to hide their earmarking corrupt ways from public view. Of course, that is not a good change.

Even though there are many Americans who are paying attention to Congress and earmarks, many, many are not. Perhaps the Curse of Rational Ignorance just can't be broken?

Earmarks

Politico:

The House Appropriations Committee granted members a six-week extension to submit earmark requests as the ethics chairwoman waved off suggestions that her committee had issued a report to clarify the new standards for the requests.

Why not try extending the idea that earmarks are wrong, and therefore, the practice of members of Congress making earmarks will be stopped?

Constitution & Attorneys

John Yoo in the WSJ ($$)

But presidents need to have their own people in place in order to promote a consistent, national agenda. While U.S. attorneys can gather better information on, and react more swiftly to, local conditions, the Constitution still gives the president the responsibility to govern the activities of all U.S. officials. As James Madison said in 1789 in the first Congress, "no power could be more completely executive than that of appointing, inspecting and controlling those who had the immediate administration of the laws." Ever since, the Supreme Court has recognized that the power to remove is the power to control.

The president has no constitutional authority to order executive branch officials to obey his policies, except by removing them. If independence rules, the defense secretary could double the surge of troops into Baghdad to end the fighting there, the secretary of state could settle the Korean nuclear crisis on easier terms, and the attorney general could stop bringing drug trafficking cases if he disagreed with the war on drugs.

Critics want to insulate U.S. attorneys from political control by the president. Some have proposed over the years that the attorney general either be elected or chosen through some "neutral" non-political process. But how do you guarantee "neutrality"? Our Constitution's well-tempered system of checks and balances already does that quite well. Presidents are elected because of their political preferences and are expected to manage the executive branch accordingly. Congressmen do the same. Since when has a Democratic congressman, to be neutral and fair, had to hire Republicans on his staff?

His view of the Constitution sure seems right to me. It also seems this hubbub is purely contrived. As I noted recently, there sure seems to be a lot of this sort of stuff with Congress these days. Can we say it is the curse of the rationally ignorant voters?

There They Go Again

Here's an interesting question from the pages of Investors Business Daily:

Did anyone believe Democrats would actually cut pork and keep their promise that they wouldn't force an early Iraq pullout? For those who did, we suggest a quick trip through the news.

So, what can be discovered by such a trip?

In the House, lawmakers are considering the Democrats' $124 billion war funding bill that not only includes $21 billion for political pet projects, but also establishes an ill-advised Aug. 31, 2008, deadline for bringing the troops home from Iraq.

The legislation, swollen with $3.7 billion in farm subsidies, is expected to be voted on Thursday. It also includes $500 million for wildfire suppression, $283 million in milk subsidies, $100 million for citrus growers, $75 million for peanut storage, $25 million for spinach growers and $15 million for rice farmers.

Well, well, well. A bill to fund national defense expenditures includes farm subsidies. Imagine that. Why should we not be surprised? Seems we have a little casual empiricism to help us feel good about public choice economics.

Yesterday I linked to commentary in the Wall Street Journal that pointed out that the Speaker of the House had started buying votes, and today the Investor's Business Daily points out how some of those votes are being bought, i.e., farm subsidies.

It seems to me the first 2 or 3 months of the new Congress is not a pretty sight.

Our elected representatives are seen on the floors of Congress debating endlessly resolutions that are not binding and seem to have no meeting except to express a lack of will to help the constitutionally elected government of Iraq provide security that is essential for the new government's success and that is essential to get the country on the path to some future prosperity.

There was passage of legislation that would increase the minimum wage, and thereby also cause some employees to be disemployed.

There was an interesting promise of the first hundred days that seems to have quietly fizzled, unless you want to fuss over things that were fussed over during the first 100 days, such as, to paraphrase a former President, "It depends on what the meaning of days is." Perhaps the House is still in the first 100 days, but no one seems to be talking about the promises made.

Now, in the defense legislation the House will vote on whether or not to send a memo to the enemies of the new government of Iraq with the subject line: "Hey, just hang on a while longer, we are about to leave."

There was the time spent on public hearings about an employee of the CIA and an alleged crime that justified the full time work of a special prosecutor. Yet, I understand that by the time the special prosecutor took up his job, he already knew no violation of a criminal statute had occurred, and he even knew who had committed the revelation that was a non-crime. Still, our Congress chose to waste time on issues that seem only to matter as yet another act in a political play.

And, there is yet another political furor being contrived over a President who fired US attorneys. The best I can figure out is the positions in question are filled by people who serve "at the pleasure of the President." In other words, the very conditions of employment for these positions includes the clear condition that the President can fire you from the position for absolutely any reason. The furor seems a contrivance of congressional Democrats, and perhaps the media, to offer up yet another act in their political play. Just consider that in this act of the play people in Congress want to pretend they are shocked that the President, the person who is elected to head the Executive Branch of government, a political branch of government, may well have fired the US attorneys in question for political reasons. Oh my, what are we to do?

I have, of late, frequently pointed out the public choice insight that people are rationally ignorant, and I have noted how the actions of our public officials seem quite consistent with this insight. I suppose we do need a Congress, but perhaps that is not so clear when the members of Congress spend so much of their time doing things that seem mostly about finding ways to use the rational ignorance of voters to personal advantage.

This Is Our Congress

Wall Street Journal:

So what's a leader of Congress to do to get a majority? You know the answer: Let the vote-buying begin!

Thus has Mr. Bush's request for $100 billion to fund the troops in Iraq and Afghanistan, plus $3 billion to replenish the disaster-relief fund, devolved into a $124.6 billion logrolling extravaganza. You can get the flavor from the bill's very first words on page two: "Title I--Supplemental Appropriations for the Global War on Terror Chapter 1 Department of Agriculture Foreign Agricultural Service." Forget the Marines; send in the meat inspectors.

This bill has everything the modern military doesn't need. There's $25 million for spinach, designed to attract the vote of Sam Farr, a California farm-region liberal. Perhaps spinach growers who lost business due to last year's E. coli scare need this taxpayer bailout, but it won't intimidate the Taliban unless Mr. Farr plans to draft Popeye.

Other lowlights include $20 million to restore farmland damaged by freezing temperatures, and $1.48 billion for livestock farmers. And don't forget the $74 million "to ensure proper storage for peanuts," an urgent national-security need. This happens to be about the same amount that House Democrats propose to increase spending for operations of the Army Reserve, so it's good to see Congress has its priorities in order.

Then there are the provisions to raise the minimum wage, at one pace for the continental U.S. but at a separate, slower pace for the Northern Mariana Islands. And $500 million for "urgent wildland fire suppression"--that's forest fires, not weapons fire. There's so much more, if only the press corps would take the time to look.

This pork-barrel blowout is grounds enough for a Presidential veto. But the vote-buying is more important for what it says about Congress and the way it wants to micromanage the war. Any legislature is essentially a committee of special interests, each of which wants to be massaged. This is true of war strategy as much as farm policy. The goal isn't victory in Iraq, but "victory" on Capitol Hill, which means cobbling together a majority of 218 in the House and 51 in the Senate. Logrolling and micromanagement are two sides of the same coin of the legislative Pentagon.

This is our Congress, ain't it grand?

Congressional Ethics? Congressional Corruption?

THE POLITICO:

A new congressional ethics rule is causing headaches for lawmakers as they scrambled to meet Thursday's deadline to request funding for projects in their districts.

The new rule, instituted on the first day of the new Democratic-controlled Congress in response to recent scandals, requires members to certify that they have no financial interest in projects they seek to fund.

But the rule is too ambiguous, congressional aides said, making lawmakers unsure of what constitutes a financial interest and whether a favorable comment about a project would be considered a request.

House Minority Leader John Boehner (R-Ohio) wrote to House Speaker Nancy Pelosi (D-Calif.) Thursday for clarification, calling the issue "a matter of profound concern to many of our members on both sides of the aisle."

"There are many ways by which members express support for specific appropriations - both orally and in writing - at various stages of the legislative process," Boehner wrote. "In the absence of written guidance, members are understandably uncertain about which official actions would trigger the requirement in the rule."

Boehner asked whether specific instances, such as raising the issue with a committee chairman or voting for a bill containing the provision, would constitute a formal request and require the financial certification.

Noting the House ethics committee was responsible for resolving the confusion, Boehner lamented that Democrats had not given the panel more funding.

"The failure of the ethics committee to provide essential guidance to members in a timely manner has placed members seeking to advocate for much needed funds in a dangerous and untenable position," Boehner wrote. "I hope you will agree with me that this situation is completely unacceptable, and will take whatever steps are necessary to rectify it."

Pelosi spokesman Nadeam Elshami said the ethics committee was working on the problem.

I don't know. All this just doesn't seem too confusing to me. If you are elected to office, and you suggest a project be funded or a policy be adopted, then why should you seek to hide (or not reveal) any personal, and I mean "any" in the sense of any slight interest or connection, interest in the project? Well, I suppose I can think of one reason, eh? You don't want to be completely transparent because that would make it seem like your political work involves at least a little bit of corruption. So, I suspect corruption is afoot when members say they are confused about whether Congressional ethics rules require them to be transparent.

Global Warming: Gore's Credibility

I was looking at an article in the New York times about global warming, much of which is about Al Gore, and I ran across this:

“He has credibility in this community,” said Tim Killeen, the group’s president and director of the National Center for Atmospheric Research, a top group studying climate change. “There’s no question he’s read a lot and is able to respond in a very effective way.”

The "he" in this reference is Al Gore. The group referred to here is the American Geophysical Union.

Now I have to wonder how the word credibility is defined. My dictionary reveals that credible means: capable of being believed; believable; plausible; worthy of confidence; reliable. It also says about credibility: worthiness of belief. None of this reminds me of a politician, in general, and certainly it doesn't remind of this politician in particular.

I've posted several times recently about politics and public choice theory, mostly about the idea of rational ignorance and the implications of rational ignorance for our politics and our system of political economy. I think many of those implications point to reasons we should not often associate politicians with the words in the definitions just above.

I'm having some trouble understanding why a politician of Mr. Gore's standing would be seen as credible by a group of scientists. I certainly do not see Mr. Gore's views about science as "worthy of confidence," while I do have much greater confidence in Mr. Gore's ability to turn the rational ignorance of voters to his personal advantage. So, I suspect Mr. Gore has credibility with this group of scientists, not because of his wisdom with respect to science, but rather with respect to his wisdom about global science politics. And, this leads me to yet another idea from public choice. Could it be that Mr. Gore has credibility with this group of scientists because the nature of the politics of this group of scientists fits the idea of rent seeking?

See, It's Global Warming

Russell Roberts:

. . . See, it's all about the science. The model is perfect. There are no outliers to be explained, no data that doesn't fit the model. Really hot? Global warming? Really cold? Global warming! It's a very powerful theory that explains everything.

Does sound like this doesn't it? What's a citizen supposed to think, eh?

Another Form of Senate Corruption?

Through a link by Glen Reynolds at Instapundit, I found Professor Bainbridge making an observation about Congress:

So it seems that we are ruled by crooks and cheats.

Hmm, wonder where that idea comes from? The stage is set by:

Taken together, the semi-strong and strong forms of the Efficient Capital Markets Hypothesis teach that no class of investors can beat the market over time without routine access to material nonpublic information. Many studies have shown that the only investors who, as a class, routinely produce postive abnormal returns are corporate insiders. . . .

You see Professor Bainbridge was commenting on a report in the Wall Street Journal about recent research that discovered something interesting about the investment savvy of members of the US. Senate:

A study suggests that U.S. senators possess stock-picking skills that even the most seasoned money manager would envy. During the boom years of the 1990s, senators' stock picks beat the market by 12 percentage points a year on average, according to the study. Corporate insiders, meanwhile, beat the market by about six percentage points a year, while U.S. households underperformed the market by 1.4 percentage points a year on average, according to separate studies. The final details of the study will be published in the December issue of the Journal of Financial and Quantitative Analysis. ...

Looking at the timing of cumulative returns, the senators also appeared to know exactly when to buy or sell their holdings. Senators would buy stocks just before the shares suddenly would outperform the market by more than 25%. Conversely, senators would sell stocks that had been beating the market by about 25% for the past year just when the shares would fall back in line with the market's performance.

Imagine that, eh? Senators just seemed to know when a stock outperforming the market would be best sold. Could be a little bird whispers in their ears, eh?

VDH: The Disingenuous Party

I think Victor Davis Hanson sees these issues clearly:

Unlike the invasion of Panama (1989), the Gulf war (1991), the Balkans war (1999) or even the Afghanistan conflict (2001-2007), Iraq has taken over 3,000 American lives. Had the reconstruction of Iraq gone as relatively smoothly as the three-week removal of Saddam, most Democratic candidates would now be heralding their past muscular support for democratic change in Iraq.

So instead of self-serving attacks on the present administration, Democratic senators and candidates should simply confess that while most of the earlier reasons to remove Saddam remain valid, the largely unforeseen costs of stabilizing Iraq in their view have proved too high, and now outweigh the dangers of leaving.

But they should remember one final consideration. The next time a Democratic administration makes a case for using America’s overwhelming military force to preempt a Milosevic or a mass murderer in Darfur — and history suggests that one will — the Democrats’ own present disingenuous antiwar rhetoric may come back to haunt them, ensuring that such future humanitarian calls will probably fall on ears as deaf as they are partisan.

It also seems likely these Democrat politicians know voters to generally be rationally ignorant, and thus, they also expect to get away with being disingenuous.

It's The Freedom, Stupid?

Sheldon Richman writes about Adam Smith's observation that "Nothing . . . can be more absurd than this whole doctrine of the balance of trade."

. . . . I've come away with a new appreciation of what the old Scotsman was saying. Concern about imports and exports really is ridiculous.

What is an export? What is an import? These words are defined in reference to political boundaries of only one kind: national boundaries. If there were no such boundaries, there would be no exports or imports. But political boundaries are just that. They are not economic boundaries. To the extent that they can, people go about their business as though those boundaries weren't there. People cross the Canadian-American and Mexican-American borders to transact business every day. If they give them a thought it is only because governments put up barriers patrolled my armed guards who make them wait in line. People learn early in life that they can gain immensely from trade, and with that understanding comes the insight that it doesn't much matter on which side of a Rand-McNally line your trading partner lives.

So the very concepts imports and exports are founded on an arbitrary construct that has little practical consequence for people's economic activities. Back in the 1980s, when neomercantilists feared Japan's economic success at selling us stuff (seems a little crazy now, no?), I used to ask what would happen to the trade deficit if Japan were made the 51st state. Obviously, the deficit would have disappeared because we don't reckon trade imbalances between states. Why not?

In reality, then, there are no imports and exports. There is only what I make and what everyone else makes. Few people would want to live just on what they themselves could make. Frederic Bastiat pointed out that each of us daily uses products we couldn't make in isolation in a thousand years. Talk about poor, solitary, nasty, brutish, and short! "What makes this phenomenon stranger still is that the same thing holds true for all men," Bastiat wrote. "Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else."

This is just another way of saying that the case for free trade is conceded the moment someone eschews self-sufficiency. After that, we're just haggling over the size of the trade area. But if free trade (read: division of labor) is good, then the bigger the free-trade area the better. Globalization should be the worldwide removal of all barriers to the exchange of goods and services -- rather than trade managed through state capitalism and multinational bureaucracies. Unilateral, unconditional free trade is the smartest policy.

Remember the political slogan "It's the economy, stupid?" Doesn't it seem like freedom's just another word for prosperity?

If you want to know why "made in China" makes no sense, then read the rest of Mr. Richman's essay.

More Carbon Offsets

The recent assertion that Al Gore is a carbon glutton has led to quite a number of articles and commentaries about "carbon offsets," which is like "cap and trade" policy being discussed as part of our policy toward global warming.

The basic idea of "cap and trade" (or carbon offsets) is an idea that comes from environmental economics. Different sources for controlling carbon emissions will have different marginal costs of control, and this means that it is possible to design, in principle, a public policy that achieves a reduction in carbon emissions at least cost.

Say that the cost to me of reducing one ton of carbon emissions from my economic activities would be $50. Suppose also that someone else is able to reduce a ton of carbon emissions from their own economic activities at a cost of $40. It would then be possible for me to pay this other person, say for illustration $44, to would reduce 1 ton of carbon emissions from his economic activities. The result would be a decrease in carbon emissions by one ton. At the same time, the other person would make an extra $4 on his supply of carbon emissions reduction to me, and I would keep an extra $6 in my pocket. As always, both parties to the voluntary exchange would be better off. At the same time, from the "social point of view" the cost of this additional 1 ton of carbon emissions reduced cost $6 less than if I had been the person to reduce the carbon emissions.

The WSJ summarizes well the reason for liking a cap and trade or carbon offsets approach to climate change policy:

This kind of trading works, and we've argued in these columns that cap-and-trade beats the pants off just plain capping by lowering the overall economic burden of a cap.

Unfortunately, even when the wisdom in the economic ideas gets the attention of our elected leaders in Washington, the way politics works means that if "cap and trade" is the basis for the public policy chosen to deal with climate change, it is most likely that "cap and trade" will not be implemented in a fashion that actually is the "cap and trade" from economics.

The same commentary in the WSJ points this out as well:

The difficulties don't lie with the trading, but with the cap, which is where the companies lobbying for restrictions come in. James Rogers, CEO of Duke Energy, put it plainly earlier this year: "If you're not at the table when these negotiations are going on, you're going to be on the menu." Translation: If a cap is coming, better to design it in a way that you profit from it, instead of being killed by it.

Which is why the emphasis really should be cap-and-trade. It's all about the cap, because without it there's no trading. We don't buy our daily ration of oxygen because it's in abundant supply. Same with carbon dioxide--there's no constraint on your ability to produce CO2 until the government creates one. When it does, it creates an artificial scarcity. What Duke, Entergy, TXU, BP, Dupont and all the rest want is to make sure that when the right to produce CO2 becomes limited, they're the ones that end up owning the allowances. Because that would mean they could sell them, and make money off something that previously wasn't worth a dime.

Thus, Entergy, a utility that relies heavily on natural gas and nuclear power and thus produces relatively less CO2, would love a cap that distributes the allowances based on how much electricity you churn out, rather than on how much CO2 you produce. Entergy's "carbon footprint" is small compared to some other utilities, so an electrical-output-based cap would be windfall city. Dupont, meanwhile, wants credit for reductions already made because it sees instant profit in costs already paid. It also wants a cap to cover as many industries as possible so it can make money selling emissions-reduction products.

We don't begrudge anyone the opportunity to make a buck. But there's a difference between making money by producing things people want and making money by gaming the regulatory process. There's no market here unless the government creates one, and who has the profit opportunity depends entirely on who the government picks as the winners and the losers in designing this market in the first place. So it's no wonder that almost any business that has ever put an ounce of CO2 into the atmosphere is rushing to show its cap-and-trade bona fides.

Note carefully what the businesses in support of cap and trade want the design of the cap and trade policy to look like. Basing the policy on electricity production isn't the economic idea, which of course focuses on the carbon emissions. Allowing previously achieved reductions to be sold later, is also not really the economic idea because so far there has been no cap imposed. Political incentives, rent seeking, and compromise are ideas that characterize the way our system of politics works, and they all point to the expectation that even a good economic idea is pretty unlikely to actually ever be implemented as conceptually explained and conceived.

The concluding paragraph in the WSJ commentary points to Bruce Yandle's theory of bootleggers and baptists that has been spawned by public choice theory:

The emerging alliance of business and environmental special interests may well prove powerful enough to give us cap-and-trade in CO2. It would make Hollywood elites feel virtuous, and it would make money for some very large corporations. But don't believe for a minute that this charade would do much about global warming.

The baptists of global warming are of course the environmental special interests and the virtuous Hollywood elites, and the bootleggers are the existing businesses that will provide the money to grease the wheels of climate change politics in return for the ability to design the rules in their favor. Unfortunately, this is just the way our system of political economy works.

Carbon Offsets

If you've been reading recently about Al Gore's carbon gluttony, you probably know that Mr. Gore's response to these accusations is that his life is carbon neutral because he buys carbon offsets. You may be wondering what a carbon offset is. You may even be asking yourself if you could buy some carbon offsets for yourself so that you, too, could be a carbon neutral sort of guy. If so, then you might want to check out DriveNeutral.

Here is what I learned about my family car when I visited DriveNeutral:

This car uses the equivalent of 571 gallons of gasoline each year. This means it produces 11077 pounds of CO₂ annually. You can neutralize your 2006 carbon emissions by purchasing a Tier Two DriveNeutral certification for $40.

I think these numbers are kind of interesting. So $40 divided by 571 gallons means I can, presumably, offset my family car carbon footprint for only about 7 cents per gallon. Can that be right? Why are some people talking about increasing the gasoline excise tax by at least 50 cents a gallon because of their global warming concerns? Now, divide 11077 pounds by 571 gallons, and the result is, according to these numbers, that I leave behind me 19.4 pounds of carbon dioxide for every gallon of gasoline I burn in the family car. Hmmmm, I wonder how much a gallon of gasoline weighs? I'm starting to wonder now if maybe I typed my family vehicle incorrectly when I visited Drive Neutral.

Baghdad Economies

Omar Fadhil writes about his experience in Baghdad, which seems encouraging for now:

Operation “Imposing Law” continues in Baghdad. In contrast with previous operations to secure the city, this one is managing to not only keep the initial momentum, but the operation’s effects seem to be growing as well. . . .
While many Iraqi families are returning to the homes they once were forced to leave, there are also Baghdadis who are reopening their stores, ending the months they spent out of business because of violence and intimidation. Some streets that were virtually deserted a few months ago are slowly showing signs of returning to life.

The reopening stores even include some liquor shops! There are two stores on one street that I used to shop that closed early last year when their owners received death threats from the insurgents and the militias. Yesterday I walked through that street and, to my amazement, I found both stores open and back in business.

Of course the reopening of two liquor stores is no big deal by itself when we are talking about a city where thousands of businesses are still shuttered. I regard this as a further positive sign of a change in Baghdad’s daily life. It means that those shopkeepers are leaving their fear behind, and openly ignoring the threats of militias and insurgents who once ruled the streets and intimidated the people with threats and violence.

I was reading Hayek's The Use of Knowledge in Society recently for one of my courses, and this description of Baghdad's daily life reminds me of Hayek's definition of economy. On Hayek's definition "economy" pretty much refers to the economic life of an individual, and as such, I think it makes at least some sense to associate "economy" with the daily life as people live it and experience it.

The report here that daily economic life in Baghdad is more and more involved with the activities of daily commercial enterprises suggests that increasing numbers of people in Baghdad are feeling greater personal security. It seems to me this is sort of a "leading indicator" that government is being more effective at providing security.

Of course, the economies of daily life are dynamic and today's appearance of growing expectations of security may turn in the future to expectations of deepening insecurity. So, I also like Fadhil's conclusion:

The results of Operation “Imposing Law” are not magical. We didn’t expect them to be magical. The commanders didn’t claim they’d be when the Operation began. Still these latest developments are certainly promising. And let’s not forget that what has been achieved so far was achieved while many thousands of the new troops assigned to Baghdad are yet to arrive.

Meetings

I knew there was a reason I hate meetings:

People have a harder time coming up with alternative solutions to a problem when they are part of a group, new research suggests.

I'm sure there are other reasons I don't like meetings, but this should be sufficient.

Leiberman: War Politics

Senator Lieberman:

Congress thus faces a choice in the weeks and months ahead. Will we allow our actions to be driven by the changing conditions on the ground in Iraq--or by the unchanging political and ideological positions long ago staked out in Washington? What ultimately matters more to us: the real fight over there, or the political fight over here?

Senator Lieberman has a insightful commentary. I think the answer has been pretty clear that what matters to most politicians is the political fight over here.

Porker Of The Year

The Porker of the Year for 2006 is:

Rep. Alan Mollohan (D-W.Va.) received 48 percent of the vote, with co-nominees Sens. Thad Cochran (R-Miss.) and Trent Lott (R-Miss.) receiving 25.5 percent, and Sen. John Thune (R-S.D.) receiving 22.9The finalists were chosen by CAGW staff from among the 12 Porker of the Month winners for 2006.

Rep. Mollohan was named Porker of the Month in April 2006 for abusing his position on the House Appropriations Committee by securing millions of dollars in earmarks that may have benefited him personally. The New York Times(4/08/06) detailed how Rep. Mollohan directed $250 million to five nonprofit organizations that he set up.Rep. Mollohan surrendered his seat as ranking Democrat on the House Ethics Committee in April.

Now this sounds like excellence in Congressional corruption, $250 million to your own personal benefit, eh? Kind of a shame he had to surrender his ranking Democrat on the Ethics Committee status too. I suppose ethics and corruption are two ideas that shouldn't be put together.

Obama's Worn Out Economic Ideas

Tom Sowell is watching the presidential politicians. If only the politicians would pay a little attention to Tom Sowell. Here is what Sowell writes about some of Senator Obama's favorite policies to talk about in his run for president thus far:

He thinks higher teacher pay is the answer to the abysmal failures of our education system, which is already far more expensive than the education provided in countries whose students have for decades consistently outperformed ours on international tests.

Senator Obama is for making college "affordable," as if he has never considered that government subsidies push up tuition, just as government subsidies push up agricultural prices, the price of medical care and other prices.

He is also for "alternative fuels," without the slightest thought about the prices of those fuels or the implications of those prices. All this is the old liberal agenda from years past, old wine in new bottles, a new face with old ideas that have been tried and failed repeatedly over the past generation.

This might be the best summary of the Senator's presidential policies:

Senator Obama is being hailed as the newest and freshest face on the American political scene. But he is advocating some of the oldest fallacies, just as if it was the 1960s again, or as if he has learned nothing and forgotten nothing since then.

We could also hope that voters would remember that all these policies have been tried before. So many of the policies politicians run on in elections, and so many chosen by legislatures, seem to be based on ideas that are simply foreign to economic reality.

But Sowell puts this better than I:

But politics is not about facts. It is about what politicians can get people to believe.

George Washington: Entrepreneur

John Fund:

Although George Washington was born 275 years ago tomorrow, most Americans think they know a great deal about him. He led American soldiers in winning our independence from Britain. He was the nation's first president. He adorns our dollar bill and a new dollar coin. But how many people know he was also a leading businessman, probably the No. 1 whiskey producer in all of colonial America?

Indeed, Washington was a prosperous farmer and entrepreneur throughout his life. "He thought like an American businessman," says Jim Rees, the executive director of Washington's Mount Vernon estate. "He was a true disciple of the free enterprise system, and he sensed that our new system of government would encourage people to think creatively, take chances and invest."

I like that attitude.

History of Power v. History of Cooperation

Stephen Davies notes that history is typically marked through time in terms of wars and revolutions, and much of history seems to emphasize government. He suggests we might draw history's timelines in terms of what is important for everyday life:

However, because this narrative is not spelled out and its key dates are mostly unknown, we are generally unaware of it. The process it traces and its benefits are taken for granted and assumed to be natural. If we do stop and think about it, however, we will see the world and the course of human history differently from how the narrative of power would have us see it. We should realize that what is important for the everyday life and hopes of ordinary people is not power but peaceful cooperation and exchange. Not everyone welcomes this. There are those who would decry increased affluence, regret the easier movement of people, and deplore cultural mixing and exchange. We should ignore them and reject their argument.

This is a very interesting idea. I do wonder what history's timelines would look like if we emphasized the development of economic prosperity, instead of the use of power by government. Perhaps this is done by economic historians, eh?

Politics in the Courts

Victoria Toensing offers mock indictments with respect to the Libby case in the Washington Post:

THIS GRAND JURY CHARGES PATRICK J. FITZERALD with ignoring the fact that there was no basis for a criminal investigation from the day he was appointed, with handling some witnesses with kid gloves and banging on others with a mallet, with engaging in past contretemps with certain individuals that might have influenced his pursuit of their liberty, and with misleading the public in a news conference because . . . well, just because.

She also offers indictments of: the CIA, Joe Wilson, Ari Fleischer, Richard Armitage, the U.S. Justice Department, and the media.

If you want to know how things work in our system of politics, then this is probably something worth reading. It seems that cases like this are designed to present a story to the rationally ignorant public of abuse of power that will be punished by legal means. But instead, if we look at the entire picture painted by this story, we seem to be seeing a picture that suggests someone is trying to use our court system for simple, self-interested political purposes (and maybe just self-agrandizement). We should probably try to keep political trials for the court of public opinion. At least, that is one lesson I think we can draw from this case (and I think there have been many other cases like this as well).

While Congress Was Voting

If you would like to add some perspective to your understanding of Congress and Iraq, then you might want to check out Mudville Gazette's update on events in Iraq.

Bosnia Lessons?

CHRISTIAN SCHWARZ-SCHILLING:

We live in an era where the mechanics of peacekeeping and nation-building are at the heart of geopolitical debate. While Afghanistan and Iraq dominate the headlines, the experience of Bosnia and Herzegovina continues to be illuminating.

A year ago, at the start of my mandate as the European Union's Special Representative and the international community's High Representative for Bosnia and Herzegovina, I believed that nation-building in this Balkan country had reached a watershed and that the "quasi-protectorate" was no longer viable. I argued, therefore, that more than a decade after the end of the war, it was time for the people of this country and their elected leaders to assume full responsibility for their own destiny. . . .

Yet the process of forming coalitions at the various levels of government has proceeded without international hand-holding. Electoral commitments bind the incoming local authorities to pursue pragmatic policies and prioritize economic growth.

I continue to believe in a policy of local ownership, but I also believe that the transition should take longer. There is a risk of importing instability from elsewhere in the region. And there is a risk of internal political paralysis. The local authorities need more time to adapt and the international community will have to show greater patience. It is therefore not yet time to give up the Bonn Powers.

But this extraordinary authority to impose laws and remove public officials does not provide long-term solutions. However, if held in reserve and used sparingly, it can still serve as a useful insurance policy against destabilization. This argument is gaining ground in the capitals that have to decide at the end of this month on the future of these powers and the Office I head. . . .

In charting the right course toward a viable and functional Bosnia and Herzegovina it has been necessary to differentiate between what works and what doesn't work. It has also been necessary to change a mindset, both in Bosnia and Herzegovina and in the international community. Promoting local ownership is neither easy nor risk-free, but it avoids short-term fixes in an effort to create real and durable stability. It can yield success in Bosnia and Herzegovina. And it might also prove effective elsewhere.

I have not paid much attention to Bosnia and Herzegovina, so I can't really specifically assess the analysis here. I suspect counseling patience in this region and in Afghanistan and Iraq is sound wisdom from his experience.

John Burns on Iraq

Hugh Hewitt had a very interesting interview with John Burns of the NY Times. Here is some of it:

HH: Mr. Burns, in reviewing the Charlie Rose interview, as well as the one you did with Bill Maher in March of 2006, I was struck by two statements. To Bill Maher, I’m paraphrasing, yes, the Americans made a whole bunch of mistakes in the occupation, but if we fail, it won’t be because of those mistakes, and to Charlie Rose, the statement that when Iraqis sit down and talk with you in calm situations, the vast majority of people still believe they are better off with Saddam, under Saddam. Nothing was possible, it was frozen. Those two statements are extraordinary. You don’t hear them very much. Can you expand on them?

JB: Yeah, I need to say something about opinion polling in Iraq, because opinion polls tend to tell you something different. But I think opinion polling in Iraq is extremely misleading, because opinion is intimidation led. It was under Saddam. If CNN posed a camera in the face of somebody on the street in Baghdad in the fall of 2002, when the war was looming, and they said are you with Saddam or are you with George Bush, well of course, 100% of all Iraqis who were asked that question said they were with Saddam. What else could they do? They didn’t…they were going to end up in Abu Ghraib on the end of a rope. Of course the situation changed somewhat, but any Iraqi who is asked now a question like do you regard American troops as occupation troops, do you want them out, is wise, given the fact that American troops may be in the neighborhood for 30 minutes, but the bad guys are in the neighborhood for 24 hours, it’s wise to give a heavily, carefully calibrated answer, which does nothing to upset the bad guys. So yes, I do believe, number one, that most Iraqis still believe that for all of the price they have paid, amidst all of this chaos, that the possibility of a different kind of future for the country that was opened by the arrival of American troops was net an advantage. Let’s look at what happened after the hanging of Saddam. There were protests, but they were not very widespread, they were not very protracted. Saddam had very little legacy left at the end. The problem was not Saddam. The problem is that the Sunni minority in Iraq has not reconciled to the loss of power. That explains a great deal about the war. It was a frozen society. It was an unbelievably brutal society. And most Iraqis, and this is beyond doubt, and I include in this Sunnis, yearned to be relieved of it. And when America did that for them, it was after many, many years of Iraqis attempting to overthrow Saddam, failing, and paying an incredible price for it. So I think that we’d have to remember that in making an assessment of what happened. As for what has happened since, and the American mistakes, when I said if it fails, it won’t be because of American mistakes, what did I mean by that? Of course, if there hadn’t been some of the mistakes that were made along the way, the situation might be somewhat better. But my sense of it is that if it fails, that history may say it was mission impossible from the beginning, which is to say that when you remove the carapace of terror that Saddam had imposed on that society, what was revealed underneath it was an extremely fractured society which had never resolved the question of power, political and economic power, and how it was going to be divided between the principal communities, mainly Sunni and Shiites. That’s the situation the United States inherited, it’s the situation which continues to fuel the violence there, and it may be that history will say that the china shop rule, the power rule, you break it, you own it, might have been well to consider beforehand, not because Iraqis didn’t want him overthrown, Saddam overthrown. They did want him, and there was scenes of liberation in the streets of Iraq afterward. But you know, this is an extremely complex, extremely violence-prone society, a society that has proven to be resistant to, not yet ready for, and maybe will not be ready for a very long time, for Jeffersonian democracy of the kind that the United States hopes to install there. We’ll have to see what history’s verdict is, but my sense is that Iraqis still, in the main, are happy at least that Saddam is gone, very unhappy about other things, but happy to see him gone.

I really enjoyed the interview. It seems to me we don't get very much of the sort of experienced analysis that Mr. Burns offered in this interview. We don't seem to hear such experienced analysis from most of the news and commentary industry, and we don't seem to get it from our elected leaders inside the Washington beltway.

Inequality of Patience

This is from a report in The Economist:

Five years later, Dr Reyes-Garcia and her colleagues came back again. They re-interviewed 100 of their volunteers (the other 51 were unavailable for one reason or another) and found that those who had shown most patience in the original experiment had also seen their incomes increase more than those of their less patient counterparts. The effect was relatively small—the incomes of the patient had grown 1% a year faster than those of the impatient. Over a lifetime, though, that adds up to a significant amount of inequality.

I don't think this is going to surprise very many economists. But, given the rhetoric of those in politics who make correcting inequalities one of their mantras, it may be a surprise to some people. When we think about public policy concerning inequality it is clear that we have to recognize that at least some inequality, and maybe a lot of inequality, is the result of different choices made by different people.

Freedom & Responsibility

Edmund Phelps explores differences in the economic dynamism of Europe and the United States:

It may be that the Continentals finding, over the 19th and early 20th century, that there was little opportunity or reward to exercise freedom and responsibility, learned not to care much about those values. Similarly, it may be that Americans, having assimilated large doses of freedom and initiative for generations, take those things for granted. That appears to be what Tocqueville thought: "The greater involvement of Americans in governing themselves, their relatively broad education and their wider equality of opportunity all encourage the emergence of the 'man of action' with the 'skill' to 'grasp the chance of the moment.'"

The entire piece is well worth reading. I want to note the emphasis on economic dynamism. I think it is important when thinking about economic prosperity to keep a truly dynamic perspective in mind. Prosperity is not just a matter of a sort of static working out of present conditions. Prosperity is truly dynamic, with feedbacks long into the future arising from conditions today. I think prosperity is emergent, not deterministic. I think this is why "large does of freedom and initiative for generations" seems to me to be right on target.

Economically Literate Politicians

Tory Newmyer has made a list of the 10 most economically literate members of Congress:

Senate: Bob Bennett (R-Utah), Kent Conrad (D-North Dakota), Chris Dodd (D-Connecticut), Judd Gregg (R-New Hampshire), Jon Kyl (R-Arizona)

House: John Boehner (R-Ohio), David Dreier (R-California), Barney Frank (D-Massachusetts), Paul Ryan (R-Wisconsin), John Spratt (D-South Carolina)

[Hat Tip: Greg Mankiw]

Congressional Corruption

Kimberly Strassel:

This budget week, there was one thing on which Democrats and Republicans agreed: It's time to do something about earmarks. And in a nod to voter disapproval with these special-interest projects, this year Congress will do its pork spending in secret.

Welcome to Congress's new and dirtier earmark game, in which the big spenders are setting all the rules. In front of the cameras, both parties claim to have found earmark religion, and are talking up a bill that would reform the way Congress asks for billions in goodies for lawmakers' home districts. Behind the scenes, they're working feverishly to keep the earmarks rolling, this time using a technique outside of the legislative process and hidden from public view.

The gears on this new underground earmarking machine started whirring late last year, when Republicans failed in a lame-duck session to pass the 2007 spending bills. The GOP pork crowd wanted to use its last weeks in power to push through 12,000 more bridges to nowhere. Saner heads noted that the party had just lost an election in part due to these corrupting payoffs and urged restraint. The standoff resulted in Republicans punting the 2007 spending responsibility to the Democrats.

That put the new House appropriations chief, Wisconsin's David Obey--a spender for our time--in the distasteful position of having to live up to his party's election promises to fix the earmark boondoggle. He begrudgingly promised a "moratorium." And last week, when Mr. Obey celebrated the passage of his $464 billion 2007 spending bill, he bragged that Democrats had fulfilled their promise and "stripped all earmarks from the measure."

"This decision doesn't come without pain," intoned Mr. Obey. "Many worthwhile earmarks are not funded in this measure, but we had to take this step to clear the decks, clean up the process and start over."

The key language here is "not funded in this measure," and it explains why Mr. Obey is still smiling through his pain. Congressional members, led by appropriators and an army of staff, have already figured out a new way to keep their favors in the money, and it might as well be called 1-800-EARMARKS (which unfortunately is already taken). All across Washington, members are at this moment phoning budget officers at federal agencies--Interior, Defense, HUD, you name it--privately demanding that earmarks in previous legislation be fully renewed again this year. There might not be a single official earmark in the 2007 spending bill, but thousands are in the works all the same.

And getting far less scrutiny than before--if that's even possible. Under this new regime, members don't even have to go to the trouble of slipping an earmark into a committee report, where it might later (once the voting is over) come in for criticism. All the profligates need now to keep the money flowing is a quiet office and a cellphone.

Well, well, well, who would have guessed, eh?

Illegal Immigration

When will illegal immigration end? Victor Davis Hanson offers an answer:

We hear all sorts of solutions for ending illegal immigration. Build a wall! Beef up border security! Fine employers, and create a massive guest-worker program. Or America could insist on tamper-proof identification cards, or detention, deportation or even amnesty for some illegal aliens -- or all of these measures somehow combined.

But ultimately the solution lies in the hope that a Tijuana might become as prosperous as a San Diego -- now a few miles away but a world apart.

After all, Hong Kong used to be a magnet for illegal immigrants who streamed in from impoverished Red China. Not so much any longer. Shanghai, for example, in two decades has become almost as wealthy as the old British colony.

East Berliners used to risk their lives to cross the wall into the West. Now billions of dollars are being invested in restoring the eastern half of a united Germany's capital. . . .

I suspect this is the case because people seem to be seeking better chances of becoming prosperous by coming to the United States. Our government can make greater efforts to "close the border," or greater efforts to catch and punish employers who break the laws against hiring illegal workers, or each of these and even more. And, I suspect such efforts will reduce the flow of illegal immigration to our country. After all, such efforts will increase the price of choosing to immigrate illegally to the United States. But such efforts will probably cannot end illegal immigration because it seems to me the bottom line is that the governments of Mexico and of many other countries to our south are simply not very good at providing the institutional necessary conditions for economic prosperity [see Mancur Olson, Power and Prosperity] in their countries. These governments are not very good at enforcing contracts and private property rights, they tend to be characterized by much corruption and by many forms of economic predation.

Can't Trust Politicians

James Taranto:

When NBC's Tim Russert asked John Edwards on Sunday if he, as president, would accept a nuclear-armed Iran, the silver-tongued lawyer got tongue-tied: "I--there's no answer to that question at this moment. I think that it's a--it's a--it's a very bad thing for Iran to get a nuclear weapon. I think we have--we have many steps in front of us that have not been used. We ought to negotiate directly with the Iranians, which has not, not been done. The things that I just talked about, I think, are the right approach in dealing with Iran. And then we'll, we'll see what the result is. . . . I think--I think the--we don't know, and you have to make a judgment as you go along, and that's what I would do as president."

Less than two weeks earlier, Mr. Edwards had spoken by satellite to Israel's annual Herzliya Conference. "Let me be clear: Under no circumstances can Iran be allowed to have nuclear weapons. . . . To ensure that Iran never gets nuclear weapons, we need to keep all options on the table. Let me reiterate--all options must remain on the table."

Why did Mr. Edwards's views morph so quickly from hawkish to weaselly? Probably because confrontation with Iran is very unpopular among the Democratic antiwar base. Last week Ezra Klein of The American Prospect, a left-liberal magazine, confronted Mr. Edwards about the Herzliya speech, and the candidate waffled. Although allowing that "it would be foolish for any American president to ever take any option off the table," he offered this criticism of President Bush: "When he uses this kind of language 'options are on the table,' he does it in a very threatening kind of way." Does Mr. Edwards mean to be docile?

Mr. Klein asked if America can live with a nuclear Iran. "I'm not ready to cross that bridge yet," Mr. Edwards answered. There's a world of difference between the unequivocal "under no circumstances" and the coy "I'm not ready." And that "yet" suggests it is only a matter of time before he does cross the bridge.

Once again we see an illustration that politicians seem to have heard what public choice assumes, i.e., voters are rationally ignorant. Even in a world with audio and video, even in a world with left and right bloggers watching every appearance, we find politicians (read about Senator Clinton in this piece as well) saying one thing before one group, and another thing before another group.

Totten's View From Lebanon

Michael Totten writes about a very interesting conversation concerning the situation in Lebanon. The entire piece is worth reading. But, what I want to point specifically to here is his summary of our policy these days:

The problem with all this is that it’s purely intellectual and theoretical. None of it is going to happen. Like it or not, the United States is retreating for now into a “realist” posture where tyrants and the status quo are frozen in place. Many Republicans and even most Democrats are behind this even though it’s the old right-wing position the left used to hate.

I think this is well put. The US is seemingly retreating to a policy stance "where tyrants and the status quo are frozen in place."

Bash Bush

Tim Graham:

On Friday night's edition of Inside Washington airing locally on Washington PBS station WETA, the first topic was whether the media's been unfair to President Bush, given his abysmal approval ratings. NPR reporter Nina Totenberg said Bush received a "free ride" for years, so now the worm has turned and the coverage is fierce. Then the host turned to Newsweek's Evan Thomas, who was frank in his assessment of the media's role:

Gordon Peterson: "What do you think, Evan? Are the mainstream media bashing the president unfairly?"

Evan Thomas: "Well, our job is to bash the president, that's what we do almost --"

Peterson: "But unfairly?"

Thomas: "Mmmm -- I think when he rebuffed, I think when he just kissed off the Iraq Study Group, the Baker-Hamilton Commission, there was a sense then that he was decoupling himself from public opinion and Congress and the mainstream media, going his own way. At that moment he lost whatever support he had."

The message in that is very simple: the president must never "decouple" himself from the "mainstream media," because they are the key players in maintaining public opinion.

Is a media that thinks its role is to "bash" President Bush playing a useful role in our system of political economy? I wonder if Thomas would have considered saying instead that the media's job, in general, was to "bash" every President, or was to bash all elected officials? Why isn't the role of the media to provide accurate reporting on the events of the nation?

Many people on the conservative side of the commentary isle have asserted that the media, in general, is biased against Republicans and against conservatives. Doesn't "my job is to bash Bush" fit this assertion? Or, is it just that the media is biased against this particular President?

Many insights from public choice economics follow from the assumption of rational ignorance on the part of voters. It seems to me that most politicians behave in ways that take advantage of that rational ignorance. I wonder if many in the news industry have also learned to take advantage of the rational ignorance of voters?

Have people in the news industry learned, just as politicians seem to have learned, that because of rational ignorance voters won't really notice that what is said and written can change from week to week and month to month? Have they learned that because of rational ignorance people don't really make much effort to discover whether what is reported is true or not? Have many in the news industry learned that because of rational ignorance they can pick a side and say many things that are inaccurate and untrue in an effort to get their favored side in politics elected?

[via Instapundit]

Governor Richardson on Iraq

Governor Richardson of New Mexico is running for President. He said this yesterday:

"The reality is, we have done in Iraq what we said we would do. We have rid the world of a brutal dictator. We have brought about free and fair elections three times over," he said. "The Iraqis now have a constitution, over 200,000 armed soldiers and they have oil revenue. It's time for our troops to leave with honor."

I don't agree that it is time for our troops to leave Iraq, but it seems to me there is an important perspective expressed in the rest of the Governor's statement. I think in some ways that we should consider saying that our war in Iraq is over. After all, our war was against the dictatorial government of Saddam Hussein, and that government was defeated. Today the government of Iraq is not at war with us, nor are we are war with it. It seems to me that our efforts in Iraq at this time are to help the government of Iraq provide the necessary internal security as well as national security against outside agents that are supported by other countries such as Iran.

I think it is important for the United States to support the government of Iraq in these ways for as long as that government seeks such support. But, perhaps this relationship should be formalized by terms of a treaty that both governments agree to. Instead of debating whether "an escalation of the war" is good or bad policy, I think the policy discussion should accept the idea that our war with Iraq was finished with the formation of a constitutional government of Iraq. Now, both the government of the United States and the government of Iraq should formally negotiate a treaty by which we agree to aid Iraq in internal security matters as well as national security matters. If the government of Iraq no longer wants the presence and help of the US, then certainly we should withdraw. Here at home, assuming Iraq wants us to continue to help with security, Congress and the President should be discussing the terms and obligations of a formal treaty to aid in specific ways.

It seems to me that the conceptual idea that is the premise of Governor Richardson's comment, should be accepted because I think it would provide a more sound basis for our own discussion of our foreign policy with respect to Iraq.

Taheri On Iraq

Amir Taheri takes a look at the situation in Iraq. He seems well informed, but his analysis seems very little like what so many in Washington and in our news industry believe about Iraq these days:

If it is a civil war, we should identify the two camps and decide which to support. If it is a sectarian war, the only way to end it is either by geographical separation (as was the case with Croatia and Serbia) or through massive foreign occupation, as in Bosnia.

What is happening in Iraq, however, is neither a civil nor a sectarian war (although elements of both exist within the broader context). This war is a political one - between those who wish Iraq to succeed as a new democracy and those who want it to fail.

Those who want the new Iraq to succeed represent the overwhelming majority of Iraqis of all ethnic and religious backgrounds. Those who want it to fail are made up of Saddamite bitter-enders, some misguided pan-Arab nationalists, death squads financed by Tehran - and a variety of non-Iraqi terrorist outfits who have come to Iraq to kill and die in the name of their perverted vision of Islam.

In short, the war in Iraq is part of the broader war against terrorism and its many dark forces.

Read his entire analysis. He seems to understand the elements and the details of what has been happening in Iraq. Our political leaders in Congress, who have been rather loudly debating what our efforts in, or out of, Iraq should be, don't seem to be talking in terms of such details as Mr. Taheri brings to bear in his analysis. Could it be that Mr. Taheri has it wrong?

When I listen to our representatives in Congress talk about Iraq, almost none of them provide such details as the basis for their conclusions. Consequently, it is difficult for me to believe any politician who is not talking about continuing to provide security for the new constitutional government of Iraq, and who is instead talking only about what sounds like retreat. I think if the retreatists would just pick one of Mr. Taheri's choices between (a) it is a civil war and we must pick a side, or (b) it is a sectarian war and we must partition on the basis of religious belief, then I could at least conclude that they were being sincere, even though I tend to be persuaded by Mr. Taheri's conclusion. Instead, I conclude that most of those in Washington today who are saying they won't support the Commander in Chief are simply playing politics with national security issues. That is not good, but what can we do, eh? This is pretty much exactly what I tell my students the study of public choice theory says we should expect from our elected leaders.

Iran: Between State and Revolution

Amir Taheri in the WSJ ($$):

"Mizanan, ya na?" (Will they hit or not?) In Tehran these days, this question is the talk of the town. The "they" is seldom spelled out. Yet everyone knows that it refers to the United States. . . .

The bulk of the Khomeinist leadership, including the "Supreme Guide" Ali Khamenei, however, take the threat seriously and are preparing public opinion for a climb-down by the Islamic Republic. The American naval build-up in the Persian Gulf, the new U.S. offensive against Iran's agents and armed clients in Iraq, Tehran's failure to seize power in Beirut through its Hezbollah proxy, and plummeting oil prices are all cited by Ayatollah Khamenei's entourage as reasons why a climb-down might be necessary.

Sometime in the next few weeks, Iran is likely to offer a "compromise formula" under which it would suspend its enrichment program, as demanded by the Security Council, in exchange for a suspension of sanctions. This will be accompanied by noises from Tehran about readiness to help the U.S. in Iraq, plus possible concessions in Lebanon and over the Palestine-Israel issue. . . . .

So, what should the Bush administration do when, and if, the mullahs unveil their compromise formula? First is to see the mullahs' move as deja vu all over again. Each time the mullahs are in trouble they become the essence of sweet reasonableness. They deploy their traditional tactics of taqiyah (obfuscation), kitman (dissimulation) and ehtiat (caution) to confuse the "infidels" and divide their ranks. The Iranian leadership did this in the early days of the Khomeinist revolution in 1979 by persuading the clueless Jimmy Carter that the ayatollah was the only force capable of preventing Iran from falling into communist hands. In 1984 and '85, they seduced the Reagan administration with an offer of releasing the American hostages in Beirut in exchange for the secret U.S. arms deliveries Iran needed to stop the Iraqi advance. In 1987 they stopped their attacks on Kuwaiti oil tankers in the Persian Gulf after an American task force sunk the Revolutionary Guard's navy in a 10-hour battle.

In 1988, fear of an even bigger U.S. military attack persuaded Ayatollah Khomeini to "drink the cup of poison" by agreeing to end his eight-year war with Iraq. In 1998, the mullahs offered a "grand bargain" to the Clinton administration as a means of averting U.S. retaliation for the Iranian-sponsored killing of 19 American soldiers in an attack in Khobar, Saudi Arabia. . . .

The Khomeinist revolution has not succeeded in destroying the plurimillennial idea of Iran as a nation-state. But each time the Khomeinist revolution found itself on the defensive, the Western powers, including the U.S., helped it restore its legitimacy and regain its breath. The same illusions that produced the détente, which arguably prolonged the life of the Soviet Union, have also helped the Khomeinist revolution survive long after its sell-by date.

Today, Iran is once again facing the schizophrenia imposed on it through the conflict between state and revolution. A majority of Iranians, including many in the ruling elite, wish Iran to re-emerge as a nation-state.

The U.S. has no interest in helping the Khomeinist revolution escape the consequences of its misdeeds. This does not mean that there should be no diplomatic contact with Tehran or that pressure should be exerted for the sake of it. Nor does it mean that military action, "to hit or not to hit," is the only question worth pondering with regard to the Islamic Republic.

No one should be duped by a tactical retreat in Tehran or a temporary modification of the regime's behavior. What is needed is a change in the nature of the regime. The chances of setting such change in motion have never been as good, and the current showdown should be used to communicate a clear message: As a nation-state, Iran can and will be a friend. As a revolution, it would always remain a foe.

This is very interesting. Perhaps we should not be duped by a Tehran retreat, but that does seem to be what has happened in the past. I don't think the politics being played in Washington these days gives me any reason to think that our national political leaders will not be duped this time around as well.

Kagen on Congress & the War

ROBERT KAGEN:

Other critics claim that these are political cop-outs, which they are. These supposedly braver critics demand a cutoff of funds for the war and the start of a withdrawal within months. But they're not honest either, since they refuse to answer the most obvious and necessary questions: What do they propose the United States do when, as a result of withdrawal, Iraq explodes and ethnic cleansing on a truly horrific scale begins? What do they propose our response should be when the entire region becomes a war zone, when al-Qaeda and other terrorist organizations establish bases in Iraq from which to attack neighboring states as well as the United States? Even the Iraq Study Group acknowledged that these are likely consequences of precipitate withdrawal.

Those who call for an "end to the war" don't want to talk about the fact that the war in Iraq and in the region will not end but will only grow more dangerous. Do they recommend that we then do nothing, regardless of the consequences? Or are they willing to say publicly, right now, that they would favor sending U.S. troops back into Iraq to confront those new dangers? Answering those questions really would be honest and brave.

Of course, most of the discussion of Iraq isn't about Iraq at all. The war has become political abstraction, a means of positioning oneself at home.

[. . . .]

. . . Here's a wild idea: Forget the political posturing, be responsible, and provide the moral and material support our forces need and expect. The next president will thank you.

Hagel, Congress, War

Peggy Noonan has an interesting commentary about a recent speech (rant?) by Senator Hagel about the war and about Congress. I think it is related to a recent post of mine.

Here is what she concluded about Senator Hagel and about Congress:

"But Mr. Hagel said the most serious thing that has been said in Congress in a long time. This is what we're here for. This is why we're here, to decide, to think it through and take a stand, and if we can't do that, why don't we just leave and give someone else a chance?

Mr. Hagel has shown courage for a long time. He voted for the war resolution in 2002 but soon after began to question how it was being waged. This was before everyone did. He also stood against the war when that was a lonely place to be. Senate Democrats sat back and watched: If the war worked, they'd change the subject; and if it didn't, they'd hang it on President Bush. Republicans did their version of inaction; they supported the president until he was unpopular, and then peeled off. This is almost not to be criticized. It's what politicians do. But it's not what Mr. Hagel did. He had guts."

I suggested in my earlier post that our leaders in Congress were trying to have things both ways. I think she makes the same suggesti0n in the paragraph just above. I'm not sure I want to agree that "this is almost not to be criticized," because on national security matters I think we really need truly responsible leaders who will not run and hide or try to have things both ways. It does seem that Senator Hagel was imploring his colleagues to be such responsible leaders.

Noonan also throws Senator Kerry into her mix with:

"A note too on John Kerry, who, on the floor of the Senate, also talked about Iraq this week, and said he would not run for president. Clearly he saw the lipstick writing on the wall: This is the year of the woman. He also might have been acting on the sense that this is a time of ongoing and incipient political flux. The major parties seem as played out as they are ruthless, and the arc of political fame is truncated: nobodies become somebodies become has-beens before half the country knows their name. The Democrats have no idea what they stand for, the Republicans only remember what they stood for.

But there was Mr. Kerry, liberated by the death of a dream and for once quite human as he tried to tell it the way he actually saw it. Took the mock right out of me. Good for him, and for Mr. Hagel. . . ."

Then, she concludes:

"I wonder if we are seeing the start of a new seriousness."

Hmm, wouldn't that be interesting? I'm afraid I doubt it.

I will join Mrs. Noonan in saying good for Senator Hagel. Surely Senator Hagel's justified rant is not enough. Debating expressions of no confidence in the President, without first engaging a serious debate about waging the war against jihadism, which has been declared against us and much of the rest of the world, seems to me insufficient and damaging to our security interests. Debating expressions of no confidence without first debating the way forward against those who have declared us there enemies, offers no real leadership. What did Senator Hagel offer this week in this regard? What is Senator Hagel's view of our war against jihadism?

Congress & the Constitution

The Wall Street Journal says Congress does not have the Constitutional power to micromanage war, and the talk and efforts at Democrat resolutions about Iraq presume to do just that.

In addition to being feckless, all of this is unconstitutional. As Commander-in-Chief, the President has the sole Constitutional authority to manage the war effort. Congress has two explicit war powers: It has the power to declare war, which in the case of Iraq it essentially did with its resolution of 2003. It also has the power to appropriate funds.

There is a long and unsettled debate over whether Congress can decide to defund specific military operations once it has created a standing Army. We lean toward those who believe it cannot, but the Founders surely didn't imagine that Congress could start dictating when and where the 101st Airborne could be deployed once a war is under way.

Mr. Bush was conciliatory and respectful in his State of the Union Address Tuesday night, asking Congress to give his new Iraq strategy a chance. In a better world, the Members would do so. But if they insist on seeking political cover by trying to operate as a committee of 535 Commanders-in-Chief, Mr. Bush will have to start reminding Congress who really has the job.

Of course, members of Congress do have the Constitutional power to play politics, and it seems to me many members of Congress are choosing to play politics with national security.

But then such analysis probably takes this resolution more seriously than most of the Senators do. If they were serious and had the courage of their convictions, they'd attempt to cut off funds for the Iraq effort. But that would mean they would have to take responsibility for what happens next. By passing "non-binding resolutions," they can assail Mr. Bush and put all of the burden of success or failure on his shoulders.

I've heard it said that politics ends where our shore begins. I do not know if this is an accurate characterization of a tradition in our politics or not. It is my opinion that members of Congress should think it is.

I suspect that instead of honestly and publicly confronting the leadership challenges posed by our war with jihadism, many members of Congress are simply trying to have things both ways. If we end up taking our military out of Iraq and bloody chaos follows, then they want to be able to point to the past when they supported resolutions to do just that. If, instead, the constitutionally elected government of Iraq is protected and held secure by our military (and other) efforts, then they hope you will forget they voted for such resolutions. I think they understand, as public choice economics suggests, that generally voters are "rationally ignorant." But, I think these politicians also understand that even just talk, much less passage, of such resolutions increases the probability that we will end up taking our military out of Iraq with bloody chaos to follow. That is why they hope voters are rationally ignorant and forgetful. I hope we don't forget. But I suspect the insights of public choice are pretty good on such matters.

Pigou Club and Government Policy

Russell Roberts makes a very good point:

Greg Mankiw tries to expand the Pigou Club:

Some of my libertarian friends aren't members of the Pigou Club because they view gasoline taxes as a case of excessively intrusive government. But if this tangle of regulation is the alternative, isn't it time for them to reconsider?

But that's a different club. As I understand it, members of the Pigou Club support an increase in the federal gasoline tax on various externality grounds—pollution, global warming and international security issues. I'd be happy to replace all or even most attempts to reduce gasoline consumption via command-and-control and replace them with a higher tax rate. But that Club is a quixotic club—Archer Daniels Midland and others who benefit from ethanol regulation along with whoever it is that benefits from CAFE standards (regulators and politicians who get lobbied to see it tweaked or delayed?) will make sure that Club's mission is never achieved. But the Pigou Club's goal very well may be achieved and will add a higher gasoline tax to the existing tangle of regulations.

The federal tax on gasoline has been increased many times since its inception in 1932. Have any of those increases been accompanied by regulatory simplification?

It seems to me that most of the time economists offer policy advice and evaluation without thinking very much about whether it is practical or not. They also often offer advice without giving much thought to how the political process is likely to play out, even if the advice is taken. In the case at hand, I tell the students in all of my classes that the economic policy approach to pollution is a corrective, or Pigovian tax. The idea is, of course, to replace all the inefficient current policy approaches with a Pigovian tax. But, this simply doesn't look like politics would ever accomplish this substitution. Instead, as Russell Roberts suggests, what we most likely would get if the economists advice was followed was a corrective tax piled on top of all the inefficient policies and regulations already in place.

Victor Davis Hanson Is Worried

Hugh Hewitt recently interviewed Victor Davis Hanson. I find that VDH generally presents views that I find to be thoughtful and compelling. You can read the transcript of the entire interview yourself, but perhaps it is well worth your time to at least consider how the interview concluded:

HH: Let me ask you then, in terms of assessing the peril in which the country finds itself, and perhaps it’s not obvious, is it similar to the peril that the late Roman Republic found itself in when Caesar crosses Rubicon, and everything starts to descend? Or is it more like a simple period of political instability such as mark the 30’s and the depressions before that?

VDH: You know, that’s a great question, because I’m very worried, because in some sense, the jihadists are just a rag tag bunch of failed extremists. They don’t compare with the Wehrmacht, or they don’t compare with 7,000 nuclear weapons, but then you stop and say well, wait a minute. They did what none of those people did. They took out 3,000 Americans at the heart of American military and economic power in Washington and New York, and then you realize as you start thinking about it, this is a worldwide ideology that transcends countries, Indonesia, Philippines, Iran, all these places. And then more importantly, in the age of globalization, miniaturization, and nuclear proliferation, you really don’t need those assets that threatened the United States before. And then you add one other wrinkle to it. Never in the history of the United States, as I see it, have we had an elite who are more diffident and conflicted about is the United States different? Is it exceptional? Is it better than the alternative? Is it worth defending? And at this sort of perfect storm, bin Laden and these people have come along and said you know what? We can wage a psychological terrorist war against the people who don’t think that they really deserve to continue as a people in the way they had before.

HH: Then I take that to mean that the threat is indeed much higher than most people think. . . .

I think the threat is very real and very significant. It seems far too many of those elected to Congress simply are not serious about their responsibility to protect our country. Perhaps we cannot get away from politicians who choose to play politics with the national interest, but I also don't think we have to embrace such politicians or their views. Unfortunately, the views of such politicians seem to be trumpeted by most of the news industry, and perhaps far too widely accepted at face value by our fellow Americans.

Scholars & Politics

DAVID HARDY:

"I've posted before on how the antigun Joyce Foundation was using its millions to, essentially, rent law reviews as fora for second amendment attacks. It'd invested in symposium issues of the Chicago-Kent Law Review and Fordham Law Review, getting them to bring in outsiders as symposium editors, inviting only anti-second amendment articles, and then paying for copies to distribute to judges and legislators. Understand, most law reviews run on a shoestring. Authors are unpaid, editors get a pittance ($600 a year when I did it). Some tax-exempt place comes in and offers tens of thousands, it's unprecedented.

The spring issue of the Stanford Law and Policy Review is coming out with a symposium issue on, you guessed it, gun laws and the second amendment. So I did a bit of research and found this note on Joyce Foundation's homepage, under its 2004 grants:

'Ohio State University Foundation
John Glenn Institute for Public Service & Public Policy
Columbus, OH $125,000
To host a symposium at Stanford Law School on the connections between the Second Amendment and the Fourteenth Amendment, to publish papers in a major law review, and disseminate findings via the Web. (2 yrs.)'"

I guess I shouldn't be surprised, eh? After all, I teach economics. Even those in the academy are self-interested.

[via Instapundit]