April 25, 2004

D-Day in Pa.

William F. Buckley Jr., in support of Pat Toomey:

Pat Toomey is a vigorous figure who battled for the House seat in a heavily Democratic district in Pennsylvania and won. He did his three terms and then quit-as he had promised to do, believing in term limits. Toomey is a resolute conservative whose votes, on economic and social issues, have earned him high regard as a brainy and honest legislator. His champions in Pennsylvania are confident that he would do well in November. His backers nationwide, in a primary contest that has been singled out as the most important of the season, are saying that support for Toomey would be a hygienic transfusion for a Republican Party that seems adrift in profligate spending and the search for new social programs.

Arlen Specter is the man who voted in favor of Bill Clinton during impeachment, voted against Robert Bork for the Supreme Court, voted against school choice for the District of Columbia, endorses an absolutist interpretation of abortion rights. He is bright and he is tough and he belongs elsewhere. If reelected, his term would end when he is 80 years old and, some voters might hope, senescent, permitting him to vote accidentally every now and then for Republican principles.

You can't get mad at George Bush for going to Pittsburgh and doing his duty. That would be wrong, like getting mad at Barry Goldwater, which was unconstitutional. But GOP voters in Pennsylvania have the opportunity to forgive Bush, and vote for Toomey.

April 19, 2004

Thank you for choosing United, Mr. bin Laden

Ann Coulter on the 9-11 comission:

Last week, 9-11 commissioner John Lehman revealed that "it was the policy (before 9-11) and I believe remains the policy today to fine airlines if they have more than two young Arab males in secondary questioning because that's discriminatory." Hmmm ... Is 19 more than two? Why, yes, I believe it is. So if two Jordanian cab drivers are searched before boarding a flight out of Newark, Osama bin Laden could then board that plane without being questioned. I'm no security expert, but I'm pretty sure this gives terrorists an opening for an attack.


The famed 1995 guidelines were set forth in a classified memorandum written by the then-deputy attorney general titled "Instructions for Separation of Certain Foreign Counterintelligence and Criminal Investigations," which imposed a "draconian" wall between counterintelligence and criminal investigations.

What Ashcroft said next was breathtaking. Prohibited from mounting a serious search for Almihdhar and Alhazmi, an irritated FBI investigator wrote to FBI headquarters, warning that someone would die because of these policies - "since the biggest threat to us, OBL (Osama bin Laden), is getting the most protection."

FBI headquarters responded: "We're all frustrated with this issue. These are the rules. NSLU (National Security Law Unit) does not make them up. But somebody did make these rules. Somebody built this wall."

The person who built that wall described in the infamous 1995 memo, Ashcroft said, "is a member of the commission." If this were an episode of "Matlock," the camera would slowly pan away from Ashcroft's face at this point and then quickly jump to an extreme close-up of Jamie Gorelick's horrified expression. Armed marshals would then escort the kicking, screaming Gorelick away in leg irons as the closing credits rolled. Gorelick was the deputy attorney general in 1995.

The 9-11 commission has finally uncovered the proverbial "smoking gun"! But it was fired by one of the 9-11 commissioners.

April 18, 2004

What's Wrong With Paternalism?

Article by Arnold Kling:

There are three layers to the argument against paternalism. The first layer is purely libertarian, which says that government compulsion of individuals is always wrong. The second layer is utilitarian, which says that, contrary to the intuition of Steven Weinberg and others on the left, we are better off with a larger private sector and a smaller public sector. The final layer is what in economics is known as Public Choice Theory, which says that it is unrealistic to expect government officials to be wise and benevolent, given that they themselves are mere mortals with human desires and human flaws.

April 13, 2004

(Class) War Won’t Work

John Samples on Kerry's strategy:

Take Kerry's tax proposal. He plans to raise taxes for those who make over $200,000 a year while retaining Bush's tax cuts for everyone else and adding tax credits for middle-class families. Kerry has apparently learned the 1984 lesson of Walter Mondale who promised to raise taxes for everyone if elected president. Kerry too promises to raise taxes but only on the top one percent of American households.

That's not much of a test of political courage. The truly rich are a small minority in a democracy that decides most issues by majority vote. The affluent, even broadly defined, make up only one third of the nation. Kerry is not the first candidate for office to endorse taxing the rich to buy the votes of a majority on Election Day. As far back as 1787, James Madison warned that such redistributions of wealth - he called them "wicked and improper projects" - might destroy the new American republic.


More puzzling still, making war on the wealthy will not win many elections. The liberal concern about inequality is not widely shared in the United States. Three scholars from Harvard and the London School of Economics recently analyzed attitudes toward inequality in Europe and here. In Europe, surveys have found that inequality of wealth makes two groups unhappy: rich leftists and the poor. By contrast, only rich leftists are troubled by inequality in the United States. The three professors argue that the poor in the U.S. are not concerned about inequality of wealth because they expect to rise up the income ladder whereas Europeans feel stuck in their assigned status in society. Americans do not resent the rich; Americans want and expect to be like them thanks to social mobility. The American Dream lives on except for wealthy progressives.

April 09, 2004

Ending Farm Subsidies Wouldn’t Help the Third World? It Just Ain’t So!

E. C. Pasour explains how farm subsidies in the "first world" produce great damage in low-income countries:

Both the EU and the United States maintain programs to directly subsidize exports of farm products. The EU spends about $3.3 billion per year doing this. That gives EU goods an artificial advantage in international markets and works against the interests of producers in poor countries.3

Direct export subsidies have long been a prominent feature of U.S. farm programs. Public Law 480, enacted in 1954, is still going strong. It was instituted to rid government warehouses of surplus wheat, corn, cotton, and other farm products acquired through price-support programs. Dubbed "Food for Peace" to burnish its desired altruistic image, PL 480 provides easy credit and donates food to people throughout the world in response to famine and other emergencies.

Farmers in poor nations are especially critical of U.S. food aid for humanitarian purposes. Unlike the EU, which for the most part donates cash to buy food from producers in stricken countries, the United States buys food from American farmers. The Department of Agriculture (USDA) estimates the total value of U.S. food aid to be about $1.5 billion this year.


Indirect subsidies in wealthy countries also damage producers in low-income countries. The U.S. sugar program, for example, holds domestic sugar prices above the world price through import quotas. It also reduces opportunities for sugar producers in low-income countries. Indirect export subsidies are just as harmful to producers in low-income countries as the direct subsidies associated with the production of beef, corn, cotton, rice, wheat, and other commodities in first-world countries.

Farmers in the United States become irate when low-cost imports undercut domestic prices. Farmers in low-income countries are just as concerned about the effects of subsidized agricultural imports on their markets. It is ironic that one arm of the U.S. government provides assistance for economic development in poor countries while another subsidizes farm exports that stifle development.

April 08, 2004

Kerry Is Backwards on Taxes

Bruce Bartlett on the distribution of the tax burden:

All of those in the middle 3 quintiles paid less in 2001 than they paid in 1984. In other words, between 1984 and 2001, average tax rates for the wealthy substantially increased while at least 80 percent of households paid considerably less. Progressivity rose as the wealthy now pay about 6 times more than the poor.

Looking at the share of taxes paid shows a similar pattern. From 1984 to 2001, those in the bottom quintile reduced their share of the total tax burden from 2.4 percent to 1.1 percent. Those in the top quintile saw their share rise from 55.6 percent to 65.3 percent. Among the ultra wealthy, the top 10 percent increased their share from 39.3 percent to 50 percent, the top 5 percent raised their share from 28.2 percent to 38.5 percent, and those in the top 1 percent raised their share from 14.7 percent to 22.7 percent.


Unfortunately, all taxpayers pay a price for the steeply graduated tax system that has evolved. A new study by economists Steven Cassou and Kevin Lansing shows that a flat-rate tax would add significantly to economic growth. Published in the April issue of Economic Inquiry, the study concludes that real per capita gross domestic product might rise by 0.143 percentage points per year if a flat-rate tax were in place. This may not sound like much, but it's the difference between GDP doubling in 33 years instead of 36 years.

The Cassou-Lansing study found that flattening the marginal-tax-rate schedule causes most of the economic gains, which explains why tax burdens on the rich rose as their statutory rates fell. Raising statutory rates on the rich, as John Kerry proposes, likely would reverse this trend, causing taxes on the poor and middle class to rise.

April 05, 2004

A bill full of pork

Robert Novak on conservative outrage at the recently passed "highway" bill:

Rep. Sue Myrick of Charlotte, N.C., a conservative star of the famous Republican congressional class of 1994, has just about had it with the way the world works on Capitol Hill. "It makes you not want to be here. It just makes you want to leave," she told me Friday morning before the House passed the "highway" bill by a veto-proof margin of 357 to 65. What infuriates her is the money provided by this bill that does not have a thing to do with highways.

Myrick went before the closed-door House Republican Conference last week to spell out this outrage. The response was icy silence.


The highway bill marks the absolute termination of the Gingrich Revolution ushered in by the 1994 Republican sweep. In the face of President Bush's repeated veto threats, Republicans are determined to pass a bill filled with earmarked spending for individual members of Congress. The 1982 highway bill contained only 10 earmarks. The 1991 bill, the last highway bill passed under Democratic leadership, contained 538 such projects. But the addiction for pork has grown so large that the current bill contains at least 3,193 earmarks.


Only 58 Republicans (and six Democrats) joined Myrick in voting no Friday. She is not opposed to spending money for roads, within reason. It's the non-highway money that bothers her. "Why are we paying for all of this stuff?" Myrick asked me (using a more vivid word than "stuff"). "It's just the way you get along here."

That so serious a conservative as Sue Myrick feels she would like to quit shows how much the climate has changed on Capitol Hill since she and other bright-eyed new Republican House members were sent there by the 1994 election.

I wrote 10 years ago that Republicans, taking control for the first time in 40 years, faced a test. Metaphorically, would they close the executive washroom or just change the locks? It was almost immediately evident that they would take the latter course. Now, it's becoming clear the erstwhile Republican reformers are also super-sizing what they once condemned.
Property Rights Champion Hernando de Soto Wins Friedman Prize for Liberty

Hernando de Soto, author of the influential Mystery of Capital and founder of the Institute for Liberty and Democracy has won the 2004 Friedman Prize for Liberty.

Rare is the economist who finds himself the target of terrorist bombings and assassination attempts, but Hernando de Soto is no ordinary economist. Beginning in his native Peru, de Soto has focused on a revolutionary concept that is having repercussions throughout the world's poor countries: the lack of formal property rights as the source of poverty in poor countries. His decades of pioneering work for presidents and in the streets on behalf of property rights for the poor have led to global acclaim and recognition.


From his Peruvian roots, de Soto now can be seen traveling throughout the world, meeting with current and future heads of state. President Vicente Fox of Mexico sought out de Soto for help when he was the governor of the state of Guanajuato, and today de Soto is working with the Fox administration on property rights reform. Egyptian president Hosni Mubarak's son, Gamal, approached de Soto and today a property rights program is about to be implemented in Egypt. Both Philippine presidents Joseph Estrada and Gloria Arroyo have invited de Soto to help. The New York Times reports that African presidents are faxing him.

De Soto tells these heads of state that their poor citizens are lacking formal legal title to their property and are unable to use their assets as collateral. They cannot get bank loans to expand their businesses or improve their properties. He and his colleagues calculate the amount of "dead capital" in untitled assets held by the world's poor as "at least $9.3 trillion" - a sum that dwarfs the amount of foreign aid given to the developing world since 1945.

Hernando de Soto has truly revolutionized our understanding of the causes of wealth and poverty. While many scholars have pointed to and explained the importance of property rights to rising living standards, de Soto has asked the hard question of what it takes to get the state to recognize the property rights that function within the communities of the poor. Can they transform the mere physical "extralegal" control of assets into capital, a key to sustained economic development?

De Soto affirmed that they can attain legal status and developed a guide to the "capitalization process" for poor countries. In his activism and in his books The Other Path and The Mystery of Capital, Hernando de Soto has done much more than apply the lessons of economics to old problems; he has asked new questions and provided both new understanding and new hope for transforming poverty into wealth.


For his efforts, the Peruvian Marxist terror group Shining Path targeted him for assassination. The institute's offices were bombed. His car was machine-gunned. Today the Shining Path is moribund, but de Soto remains very much alive and a passionate advocate. Delivering formal property rights to the poor can bring them out of the sway of demagogues and into the extended order of the modern global economy. "Are we going to make [capitalism] inclusive and start breaking the monopoly of the left on the poor and showing that the system can be geared to them as well?" That's de Soto's challenge and his life's work.