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CATO WEEKLY VIDEO

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Description: Cato Weekly Video presents a variety of speakers, interviews, and events at the Cato Institute. The wealth of Cato's multimedia content is carefully selected and edited to portray the most pivotal issues in a concise and engaging way, inviting viewers to rethink their assumptions about liberty and the proper role of government.
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PAST SHOWS

Title:We Can't Save the Environment without Freedom
Date:Tue, 22 Apr 2014 11:51 EDT
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Description:Randal O'Toole The first Earth Day took place in 1970, when I was a high school senior, and that day set the course of my life for the next 25 years. Convinced of the need to protect the environment and realizing that forests were a key part of the environment in my home state of Oregon, I elected to attend forestry school, graduating in 1974. Over the next two decades, I helped almost every major environmental group in their efforts to save public forests from what we thought were the rapacious hands of timber companies. But I soon realized that the real problem was that Congress had inadvertently given public land agencies budgetary incentives to lose money harming the environment, and disincentives to either make money or do environmental good. This insight helped me see that creating markets for all resources would allow them to compete on a level playing field. Recreation fees, for example, could reward public land managers for protecting things that recreationists care about, such as scenery, diverse wildlife habitat, and clean water. Though economists estimated that recreation was worth more than any other public land resource, Congress didn’t allow managers to charge for most recreation. Many environmentalists in the 1970s and 1980s were receptive to my ideas of reform. Our common goal was to protect the environment, and they happily accepted any tools that would solve a particular environmental problem best. Soon, Congress passed a law allowing federal land agencies to charge recreation fees and to keep those fees. “Giving government power to solve a problem is not the same as actually solving the problem.” Unfortunately, things changed in the early 1990s because of two events: the fall of the Soviet Union and the election of Bill Clinton to the White House. Polls showed that the fall of the Soviet Union persuaded most Americans that government was a poor solution to most problems. One of the few exceptions was environmental protection, which many Americans still believed needed government regulation. This led many self-described “progressives,” who believe in more government control, to push their agenda by joining the environmental movement. Meanwhile, Clinton’s election changed the financing of the environmental movement. From 1981 through 1992, environmental groups raised much of their money by charging that Republicans in the White House threatened the environment. With a Democrat as president, grassroots funding for environmental groups plummeted. To make up the difference, most groups turned to foundation grants. But foundations demanded that the groups they funded all adopt the same strategy. Progressives took this opportunity to demand that their strategy — transferring power from on-the-ground forest managers to political appointees – be the one that was adopted. For example, they opposed recreation fees because, with everything controlled from Washington, they didn’t think they needed to rely on incentives. The progressive goal was not environmental protection but government control. They believed they knew how every acre of land in the country should be managed, which forests should be cut, which crops should be planted on which farms, and how many urbanites should live in apartments instead of single-family homes. The constitutional rights and personal desires of property owners, the expertise of public land managers, and the housing preferences of homebuyers were unimportant compared with the greater good that could be achieved through central control of our natural resources. When free-market environmentalists showed that most environmental problems could be solved with better incentives, progressives latched onto climate change as the one issue that demanded complete government control. “Climate change is a collective problem that demands collective action,” enthuses Naomi Klein, and it “supercharges the pre-existing case for virtually every progressive demand on the books.” Giving government power to solve a problem is not the same as actually solving the problem. Instead, that government is more likely to make the problem worse as it abuses its power. Klein’s own proposals for climate change — “subways, streetcars and light-rail … everywhere” and high-density “housing along those transit lines” — will have practically no effect on climate but devastating effects on our economy. Air, water, wildlife, forests, and other things we call “the environment” are precious and deserve our care. But freedom is also precious. The most important lesson of my four decades as an environmentalist is that you can’t have one without the other. Randal O’Toole is a senior fellow with the Cato Institute and author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future.

Title:The Most [REDACTED] Administration in History
Date:Tue, 22 Apr 2014 10:12 EDT
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Description:Gene Healy Good news: thanks to a ruling by the 2nd U.S. Circuit Court of Appeals Monday, the “most transparent administration in history” is going to have to tell American citizens when it believes it’s legally entitled to kill them. The lawsuit arose out of Freedom of Information Act requests by two New York Times reporters for Office of Legal Counsel memoranda exploring the circumstances under which it would be legal for U.S. personnel to target American citizens. The administration stonewalled, asserting that “the very fact of the existence or nonexistence of such documents is itself classified,” and a federal district judge upheld the refusal in January 2013. A month later, however, someone leaked a Justice Department “white paper” on the subject to NBC News, forcing a re-examination of the question in light of changed circumstances. On Monday, the three-judge panel held “it is no longer either ‘logical’ or ‘plausible’ to maintain that disclosure of the legal analysis in the OLC-DOD Memorandum risks disclosing any aspect” of sensitive sources and methods. In matters of transparency, the Obama Team can always be counted on to do the right thing — after exhausting all other legal options and being forced into it by the federal courts. “In matters of transparency, the Obama Team can always be counted on to do the right thing — after exhausting all other legal options and being forced into it by the federal courts.” When “peals of laughter broke out in the briefing room” after then-press secretary Robert Gibbs floated the “most transparent administration” line at an April 2010 presser, the administration should have taken the hint. But it’s one soundbite they just can’t quit. Gibbs’ successor Jay Carney repeated it just last week, as did the president himself in a Google Hangout last year: “This is the most transparent administration in history … . I can document that this is the case.” Actually, any number of journalists and open government advocates have documented that it’s not. As the Associated Press reported last month: “More often than ever, the [Obama] administration censored government files or outright denied access to them last year under the U.S. Freedom of Information Act.” It wasn’t supposed to be this way. In the hope-infused afterglow of his first inauguration, President Obama declared, “for a long time now, there’s been too much secrecy in this city,” and ordered his attorney general to issue newly restrictive standards for government use of the “state secrets privilege,” which allows the government to shield national security secrets from civil or criminal discovery. Attorney General Eric Holder pledged that the administration would not “invoke the privilege for the purpose of concealing government wrongdoing or avoiding embarrassment.” Easier pledged than done, apparently. Earlier this year, in a case involving a Stanford graduate student erroneously placed on a no-fly list, we learned that the government had cried “state secrets” to cover up a paperwork error. Holder himself assured the court that assertion of the privilege was in keeping with the new policy of openness. When the presiding judge found out the truth, he said: “I feel that I have been had by the government.” In fact, the Obama administration has driven state secrecy to new levels of absurdity. We’re not even allowed to know who we’re at war with, apparently, because letting that secret slip could cause “serious damage to national security.” Over the last year, thanks in large part to illegal leaks, we’ve learned that we’re living in a [REDACTED] republic. In the president’s version of “transparency,” the Americans have no right to debate even the most basic public questions — like the legal standards for spying on or killing American citizens — unless, of course, that information leaks, at which point the administration “welcomes” the debate. Gene Healy, a Washington Examiner columnist, is vice president at the Cato Institute and author of The Cult of the Presidency.

Title:We Need a New Earth Day
Date:Tue, 22 Apr 2014 09:05 EDT
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Description:Edward J. Calabrese The first Earth Day, in 1970, was celebrated after a wave of environmentalism swept the nation. Many give credit to Rachel Carson’s 1962 book, Silent Spring, which popularized the notion of large-scale chemical pollution, for igniting the movement. But she was really feeding off of a concept developed a few years earlier. The “precautionary principle” was conceptualized when the National Academy of Sciences proposed a radical change in the risk assessment of exposure to radiation and carcinogens. It recommended changing the regulatory paradigm from a “threshold dose” model to a linear one. The threshold paradigm was what one might call common sense. It held that humans could tolerate small doses of things that, in larger doses, could be harmful. Sunlight is a perfect example. Low doses are actually required for survival, as ultraviolet radiation — the same general type that causes sunburn — catalyzes the formation of Vitamin D. But, as is obvious to anyone who lives in a sun-drenched area, excessive exposure can lead to death in the near term (from dehydration) or the longer term (from skin cancer). The “linear model” assumes that just a single molecule of a carcinogen or a single ionization from an X-ray can induce cancer. The enthusiasm spawned by Earth Day soon gave us brand new regulatory agencies such as the Environmental Protection Agency and the Occupational Safety and Health Administration. The EPA routinely applies the linear model to carcinogens. “Environmental regulations based on the “linear model” are having a negative impact, not only on societal costs, but on our health as well.” The linear model is a case study in the unintended consequences of the desire to do good. In this case, an ideologically driven scientist, Nobel Prize laureate Herman Muller, whose research formed the basis for EPA’s model, led the charge. A very powerful figure in health physics, he is now known to have marginalized and obstructed the publication of any research that provided evidence counter to the linear model. If that sounds like the way senior climate scientists were found to behave in the famous 2009 “Climate-gate” emails, it should. The regulatory agencies fell in line, as did a compliant scientific community and a media that was afraid to dig deeper. Every country followed the U.S.’ lead. The linear model is rigid, absolute and wrong. We now know that there are so many flaws or holes in the linear dose response model that it looks more like Swiss cheese. The resulting environmental regulations are having a negative impact, not only on societal costs, but on our health as well. Over the past several decades, considerable research has revealed a plethora of life-saving adaptive processes that can be used to enhance the quality of life and to extend life. Our cells are flexible, adaptive and can actually be strengthened via low-level exposure to a large number of compounds that the EPA would like to regulate down to the last molecule. Instead of preventing harm, the precautionary principle actually causes harm. The entire therapeutic model is built around the notion that certain compounds that are highly toxic in large doses can be life-enhancing and life-extending in low ones. How can the regulatory community accept the linear model when so many of its senior practitioners are living lives that prove the opposite? Many of these aging regulators are taking ACE (angiotensin converting enzyme) inhibitors to control blood pressure. The original ACE inhibitor, Captopril, is the active substance in the venom of the Brazilian viper. A lot will kill you very quickly. A little could extend your life for decades. We need a new Earth Day. It should be dedicated to righting the past deceptions and correcting the ongoing errors in environmental regulation. It should be one that acknowledges our adaptive responses to what, in high doses, can cause cancer, but, in low doses, can improve our well-being. Edward J. Calabrese is professor of environmental health sciences at the University of Massachusetts and an adjunct scholar at The Cato Institute.

Title:At Yale and in the Boy Scouts, Freedom of Association Is in the Crosshairs
Date:Mon, 21 Apr 2014 10:39 EDT
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Description:Roger Pilon The Daily Caller’s morning e-mail today brings us two brief stories that capture nicely the growing intolerance of the Left for people and groups holding views with which they disagree. One arises from a decision by Yale’s Social Justice Network (SJN) of Dwight Hall to deny membership to the school’s Choose Life at Yale (CLAY) group. The second concerns a proposed California ban on judges affiliated with the Boy Scouts. Both illustrate how a bedrock American principle, freedom of association, is increasingly being gutted by the Left’s anti-discrimination agenda. The Yale case is straightforward. As blogger Katherine Timpf writes, CLAY had been a provisional member of the network for the past year, during which its members did voluntary work with a local non-profit organization that helped pregnant women. But the vote last week, making CLAY the first group to be denied full membership in the network, denies CLAY further access to the hall’s resources such as funding, vehicles, and meeting spaces. Timpf points to an opinion piece written by the chair of the Yale chapter of the ACLU, itself a member of the SNJ group, urging the group not to admit CLAY because it would “divert funds away from groups that do important work pursuing actual social justice.” That’s par for the course on today’s campuses. It’s training for the real world, as seen in the California case. Here, blogger Patrick Howley writes: The California Supreme Court Advisory Committee on The Code of Judicial Ethics has proposed to classify the Boy Scouts as practicing “invidious discrimination” against gays, which would end the group’s exemption to anti-discriminatory ethics rules and would prohibit judges from being affiliated with the group. These politically-driven changes in status could not be limited to the Boy Scouts, of course, but it’s a start. That point was made in a letter to the committee from Catherine Short, legal director of the pro-life group Life Legal Defense Foundation. The Girl Scouts, numerous pro-life and religious groups, even the military practice “discrimination” of one kind or another, she wrote. “The distinction between private and public and the further distinction between reasonable and unreasonable discrimination are being undermined.” Years ago when I was a scout leader as my son was growing up I read a lengthy insert in the handbook meant for leaders. It concerned sexual exploitation and the need for scout leaders to take it seriously, prompted doubtless by experience. Given the nature of scouting activities, often isolated in the wild, and the need to assure both boys and their parents concerning the potential for abuse, even if the BSA had never taken an express position on sexual orientation, its decision to disallow gay scout leaders would not be gratuitous. Yet critics say that the concerns of the BSA and of scout parents should be set aside and that gay would-be scout leaders must be given the benefit of the doubt. That may or may not be a fair point, substantively, but it cuts both ways, of course. Are judges who volunteer to work with scouts presumptively unfit to serve on the bench? The California committee seems to think so. As Short’s letter states: This proposed amendment has as its overtly-stated purpose the branding of the BSA as an organization whose members must be assumed to be biased and thus unfit for the bench. The Committee states that “eliminating the exemption… would enhance public confidence in the impartiality of the judiciary.” So is this a matter simply of which principle you apply: The presumption goes either with the individual or with the organization, but it must be the same in both cases, right? No, and that takes us back to freedom of association. The BSA is a private association. Agree or disagree with the presumption it has applied, it has a right to set the conditions for membership, which it has done by deciding, in part, that it does not want to run the risk, whether reasonable or not, of allowing gay scout leaders into the group. The courts, by contrast, are public institutions, which may discriminate only for compelling reasons. Doubtless there are those who believe that anyone associated with scouting must be homophobic and incapable of unbiased judgment, but it’s not likely that that view commands wide acceptance — not yet, at least. Which brings us back to Yale: Here we have a set of private associations — setting aside the gobs of public funds the university receives. In principle, therefore, like the Boy Scouts, SJN can be as narrow and prejudiced as it wishes and Yale’s internal by-laws permit. But unlike the scouts, the ground for SJN’s discrimination appears to be, if not wholly gratuitous, pretty close to it: CLAY does not practice “actual” social justice, it is said. Tell that to the women CLAY has helped. And so in these two cases we have a textbook example of how the distinction between private and public and the further distinction between reasonable and unreasonable discrimination are being undermined by a political agenda that has the freedom of private association as its ultimate target. Roger Pilon is vice president for legal affairs at the Cato Institute, founder and director of Cato’s Center for Constitutional Studies, and publisher of the Cato Supreme Court Review.

Title:The Global Warming Apocalypses That Didn't Happen
Date:Mon, 21 Apr 2014 09:57 EDT
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Description:Richard W. Rahn “The Arctic Ocean is warming up, icebergs are growing scarcer, and in some places the seals are finding the water too hot. Reports from fishermen, seal hunters, and explorers all point to a radical change in climate conditions and hitherto unheard-of temperatures in the Arctic zone. Exploration expeditions report that scarcely any ice has been met as far north as 81 degrees 29 minutes. Within a few years it is predicted that due to the ice melt the sea will rise and make most coastal cities uninhabitable.” — from an Associated Press report published in The Washington Post on Nov. 2, 1922. You may have noticed that the predicted disaster 92 years ago did not happen, nor have other predicted catastrophes from the global-warming crowd. On July 5, 1989, Noel Brown, then the director of the New York office of the United Nations Environment Program, warned of a “10-year window of opportunity to solve” global warming “entire nations could be wiped off the face of Earth by rising sea levels if the global-warming trend is not reversed by the year 2000. Coastal flooding and crop failures would create an exodus of ‘eco-refugees,’ threatening political chaos.” “The reason we have a global warming crisis is because crisis sells.” The U.N.-forecast disaster never occurred. However, thanks must be given to Mother Nature for the unexpected 17-year pause in global warming rather than the actions of mankind, which have continued to spew out carbon dioxide at record levels. This little error has not stopped the doomsayers at the U.N. In 2007, the chief of the U.N. Intergovernmental Panel on Climate Change (IPCC) said, “If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.” It is now 2014 and nothing was done before 2012, so, since it is “too late,” why spend any more time and money fighting global warming? On Jan. 19, 2009, James Hansen, climate expert who until last year was head of NASA’s Goddard Institute of Space Studies, firmly declared that President Obama “has only four years to save the Earth” which you might have noticed he failed to do. Back in 2006, Al Gore told us that we had only “10 years” to solve the global-warming problem. Since his recommendations are most unlikely to be accepted and acted on in the next two years, and since there has been no statistically significant warming since the former vice president received his vision, what do you think he will say two years from now? “The longer the planners delay, the more difficult will they find it to cope with climate change once the results have become grim reality.” This is from an article in Newsweek on April 28, 1975, warning us of the dangers of global cooling. (You can find most of these and many more quotes on the Climate Depot website, collected by Marc Morano, illustrating how little the experts really know about climate change.) The just-released report by the IPCC toned down much of the rhetoric from its previous reports because its predictive models failed to anticipate the 17-year pause in warming and the increasing disagreements among the many “experts” who were involved in drafting the report. For years, knowledgeable and thoughtful critics of the earlier IPCC reports, such as the United Kingdom’s Nigel Lawson, former chancellor of the Exchequer, have been arguing that it made far more economic sense to concentrate on adaptation rather than mitigation, which is probably impossible with existing technologies as well as the political reality. For instance, sea levels have been slowly rising since the end of the Little Ice Age around 1850. Coastal cities have not disappeared, though, because in the normal course of constantly rebuilding structures and infrastructures, we have been elevating them. For the most part, this is not a piece of some grand master plan (other than building codes for new structures), but the basic fact is that “new” cities are constantly being built on top of “old cities,” a practice that has gone on for at least a few thousand years. The good news is that mankind will probably adapt to climate change just fine, as we have been adapting since the end of the Ice Age. New studies show that to date, the benefits of global warming have been greater than the costs, and are likely to remain so for many more decades. More carbon dioxide, warmer temperatures and more rainfall benefit farming. Shipping costs are reduced as ports, roads and rails have more ice- and snow-free days. Cold weather kills more people than warm weather, and most people enjoy longer warm seasons for sports and other recreation. The reason we have a global warming crisis is because crisis sells. It allows politicians to tax, spend and assert more control. Undoubtedly, more people would have read this column, if the headline had been, “World to end.” So ignore the “experts” and enjoy the summer, which most of us will find is too short. Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

Title:Book Review: The Shock and Awing of America
Date:Mon, 21 Apr 2014 09:44 EDT
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Description:Ted Galen Carpenter The Shock and Awing of America :Echoing Consequences of Fear and Alienation By Ximena Ortiz CreateSpace, $15, 334 pages In The Shock and Awing of America, author Ximena Ortiz argues that the Sept. 11, 2001, terrorist attacks “made a direct hit on the country’s collective psyche” and that they still “carry a strong, damaging resonance.” Miss Ortiz contends that a severely traumatized society has reacted with counterproductive, and at times disastrous, policies. Indeed, measures that officials and members of the opinion-shaping elite adopted have led to major missteps in both the international and domestic arenas. The consequences of those blunders may plague the American republic for decades to come. Miss Ortiz makes the provocative assertion that the aftermath of Sept. 11 has even caused the United States to resemble some of the chronically dysfunctional political, economic and social systems in the Third World. Manifestations include acute fiscal irresponsibility, an unhealthy drift toward unrestrained executive power, growing violations of civil liberties and foreign-policy jingoism — all in the name of preserving national security. “This book should be a wake-up call for citizens who have too readily accepted an alarming growth of arbitrary governmental power in the name of waging a war on terrorism.” By debasing American values in that fashion, she argues, U.S. leaders have responded in precisely the way that radical Islamic terrorists intended. It is a troubling indictment, made all the more credible because the author is not a leftist basher of all things American. Miss Ortiz comes from the conservative side of the political spectrum, having served as an editorial writer for The Washington Times and executive editor of the respected foreign-policy journal The National Interest. Her arguments, therefore, deserve to be taken seriously. Much of her evidence is very hard to dispute. Only the most perpetually optimistic types can regard the military interventions in Iraq and Afghanistan as even remotely successful. In the former case, Washington sacrificed more than $850 billion and 4,400 American lives to replace a staunchly anti-Iranian Sunni dictator with a generally pro-Iranian Shiite autocrat. Post-Saddam Iraq is a maelstrom of fighting between sectarian factions that has caused the country to be on the brink of civil war and fragmentation. The outcome in Afghanistan is scarcely better. The corrupt, often ineffectual, rule of President Hamid Karzai has made a mockery of U.S. nation-building objectives. As in Iraq, the United States spent a great amount of blood and treasure, only to experience never-ending frustration. Miss Ortiz also makes a powerful case that what President Dwight Eisenhower termed “the military-industrial complex” exploited the Sept. 11 attacks to advance its political and budgetary agendas. She notes that “America dramatically outspends other rich countries on defense even when measured as a percentage of their wealth.” Moreover, that spending has not been driven solely or even primarily by the costs associated with wars conducted in the name of combating the terrorist threat. Instead, “expenditures unrelated to the wars have also surged.” That is not a minor concern, Miss Ortiz contends. “This kind of fiscal hemorrhaging is debilitating even for the world’s largest economy and only superpower.” The portion of her analysis that should disturb advocates of limited, constitutional government the most is the material on civil liberties in the post-Sept. 11 era. Officials and much of the American public have certainly taken a more casual, accepting view of torture and other unsavory measures. Miss Ortiz points out that the government has now “given itself to order the killing of American citizens without any due process whatsoever, even the procedural scrutiny of a military court. It can relegate detainees to an ‘indefinite detention’ lasting as long, and at whatever justification, as the state chooses.” She goes on to note the surge in surveillance and the growing violations of privacy rights. Those aspects are all the more troubling, since they do not include most of the subsequent revelations of National Security Agency abuses in the documents that Edward Snowden revealed. Miss Ortiz reaches the depressing conclusion that “liberties are perhaps impossible to sustain by a shocked and awed citizenry.” If current trends continue, she warns, “the laws and customs and oppression of the Third World might not look so foreign to Americans.” Miss Ortiz has written a disturbing, provocative book that deserves serious attention. She is on very strong ground when she examines the deleterious aftermath of Sept. 11 on government spending, foreign policy and civil liberties. Her treatment of some other issues is not as persuasive. For example, her argument that the psychological shock of the terrorist attacks has encouraged an escapist mentality, including a fondness for mindless entertainment, on the part of the American people is dubious. That social phenomenon was prominent long before Sept. 11. Her comparison of American trends with the political and ideological pathologies of the Third World is also a bit overstated. Although the trends are certainly worrisome, America is still a long way from that nightmarish outcome. Nevertheless, The Shock and Awing of America should be a wake-up call for citizens who have too readily accepted an alarming growth of arbitrary governmental power in the name of waging a war on terrorism. Miss Ortiz makes a compelling case that the United States has reacted in unhealthy, dangerous ways to the trauma of Sept. 11. Americans ignore her timely warning only at the peril of their nation’s well-being and their own fundamental freedoms. Ted Galen Carpenter, a senior fellow at the Cato Institute, is the author of nine books and more than 550 articles and policy studies on international affairs, civil liberties and other topics.

Title:U.S. Foreign Policy Should Focus on Protecting Americans, Not Reassuring Friends and Allies
Date:Mon, 21 Apr 2014 09:21 EDT
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Description:Doug Bandow The United States is busy in the world, with the Secretaries of Defense and State always on the international move. No function seems more important to Washington than acting as the world’s universal comforter, constantly “reassuring” friends and allies no matter where located. Russia’s annexation of Crimea created a flood of European anxieties that America attempted to relieve. For instance, in early March the administration undertook what Secretary of State John Kerry termed “concrete steps to reassure our NATO allies.” The Military Times reported that Washington dispatched aircraft “to reassure NATO partners that border Russia.” Washington Post columnist Charles Krauthammer urged the administration to set as a top objective to “reassure NATO.” Also last month Vice President Joe Biden was reported to have “swept into Poland and the Baltic nations … with a message of reassurance.” Indeed, headlined the New York Times: “Biden in Europe to Reassure U.S. allies over Russia’s Moves in Ukraine.” Fox News reported that he had arrived in Poland “to reassure allies.” (That Biden’s presence would reassure anyone raises serious questions.) The process continues. The Wall Street Journal entitled an article “U.S. Tries to Help Ukraine, Reassure Allies Without Riling Russia.” ABC News announced: “U.S. Destroyer Headed to Black Sea to Reassure Allies.” Last week Reuters reported additional deployments “to reassure allies worried by Russia’s annexation of Crimea.” USA Today said the moves were intended to “reassure jittery allies in Central Europe.” “The Obama administration is busy “reassuring” US allies. Instead should be reassuring Americans who are paying the bills.” Gen. Philip Breedlove said the transatlantic alliance would maintain new security measures throughout the year “to assure our allies of our complete commitment.” Polish Foreign Minister Radoslaw Sikorski insisted that Eastern Europe “deserves a reassurance package.” Apparently Washington’s efforts are bearing fruit. The Washington Post headlined an article two days ago: “NATO Reassurances Ease Fears in Baltics.” Beijing’s willingness to throw some sharp elbows in Asia has resulted in another gaggle of friendly states clamoring for reassurance, and the administration is responding there too. Defense Secretary Chuck Hagel visited Asia in early April; the Washington Post reported that he sought “to reassure allies in Asia amid questions about U.S. commitment.” About the same time Eugene Kogan of the Kennedy School wrote a commentary in National Interest online entitled “Reassuring Jittery Asian Allies.” The president is heading to Asia tomorrow, explained Voice of America, “in a bid to reassure allies in the region.” According to the Washington Post, “he and his top aides will be less focused on any big policy announcements than on reassuring jittery allies.” The Gulf News was positive, titling its analysis: “Obama’s Asia Tour Will Reassure Allies.” Obviously the conventional wisdom continues to dominate American foreign and defense policy. Washington’s obligation always is to give. The U.S. not only is supposed to guarantee the security of assorted friends and allies. It also must constantly reassure them. Americans must not only be prepared to die for anyone and everyone who wants protection, but Americans must always and in every way demonstrate that willingness. Apparently U.S. officials should not sleep easy unless the people and leaders of other (at least friendly) nations also sleep easy. It’s a strange, even bizarre policy. First, the overriding responsibility of Washington officials is to safeguard America — its people, territory, constitutional liberties, and prosperity. The Department of Defense is not a charity created to protect the world, defend the self-important, secure the rich, subsidize the improvident, calm the nervous, guard the pacifist, or save the indifferent. The American armed forces aren’t designed to advance human rights, aid humanitarianism, promote democracy, rebuild nations, or even rescue the helpless, though some or even all of these might at times be consistent with Washington’s fundamental responsibility to defend the U.S. Second, America’s broader foreign policy should be directed at advancing the interests of Americans. The national government is the agent of those who fund, staff, and support it, the American people. Their welfare is primary. Washington should look after their interests, not those of some imaginary “international community” that exists only in the minds of social engineers who desire to escape even minimal national restraints. However, interest is necessary, not sufficient, to justify Washington’s actions. The U.S. should act within a larger ethical framework that values human life and respects people’s liberty and dignity. The tendency of political organizations to live out Lord Acton’s famous warning that “power tends to corrupt and absolute power corrupts absolutely” requires the U.S. government to build limits into its own institutions and especially those beyond its borders. The latter typically are the least representative and accountable, and the most susceptible to special interest manipulation. Reassuring other nations — whether their leaders or peoples — is rarely a worthwhile objective for the U.S. government. In contrast, America should behave in ways that are naturally reassuring. For instance, it should be apparent from its actions that the United States does not intend to launch wars of conquest, seize other countries’ resources for profit, oust other governments’ leaders for convenience, or compel other societies’ compliance with America’s cultural, economic, political, or social preferences. Washington’s actions also should demonstrate that it is committed to shared liberty and prosperity with other nations and peoples in the great global commons. The U.S. should act to promote an international order rooted in the understanding that political institutions exist to serve human beings, not vice versa. The notion of America having an obligation to constantly “reassure” others is particularly pernicious when applied to the military. Washington’s principal obligation is to protect the American people, not those who desire to be defended by the world’s greatest military power. Unfortunately, sometimes the latter seems include most everyone else on earth. When I visited North Korea two decades ago one official suggested that our two nations should cooperate against Japan, which Pyongyang reviled even more than the U.S.! There are occasions when it is in America’s interest to defend other states, but only rarely. Today Washington collects allies like most people accumulate Facebook friends. The more the merrier, even when they are security black holes. Unfortunately, almost all U.S. allies expect to be defended by America rather than to help defend America. Some contribute small troop contingents to Washington’s unnecessary wars elsewhere, such as in Iraq, but only after the U.S. helps fund and equip those forces. Alas, gaining marginal assistance from, say, Georgia in return for promising to face down nuclear-armed Russia on Tbilisi’s behalf would be a poor bargain indeed. One of the worst consequences of America’s Asian and European alliances is discouraging prosperous and populous states from defending themselves. Europe has eight times Russia’s GDP — why is it relying on America at all? And why isn’t it moving forces into Eastern Europe if the continent’s security is at risk? Similarly, why is Japan, a wealthy state which until recently had the world’s second largest economy, expecting Washington’s help to assert control over contested islands? Why does South Korea, with 40 times the GDP of North Korea, presume the U.S. will forever maintain military forces in the peninsula? Alas, these countries are responding rationally to America’s incentive for security free-riding. Now Washington is sending Cabinet secretaries and military forces hither and yon to “reassure” these same nations that it will continue to subsidize their defense. Indeed, the consistent message is that they need not worry even if they do little on their own behalf. Of course, Washington officials periodically voice frustration that their rich dependents aren’t doing more. But why should governments in Asia and Europe inconvenience their peoples when Washington is willing to burden Americans to pay for the former’s defense? It oft has been said that the State Department needs an America desk. So does the Pentagon. And the White House. And Congress. Washington should stop reassuring friendly nations that they will forever be security wards of America. The people who most need reassuring are Americans. Obama administration is busy “reassuring” US allies. Instead should be reassuring Americans who are paying the bills. Doug Bandow is a senior fellow at the Cato Institute.

Title:Blurring the Typical Boundaries
Date:Mon, 21 Apr 2014 09:13 EDT
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Description:Doug Bandow Sectarian violence is spreading ominously across Africa. The only good news is that so far the conflicts appear to be national rather than regional. Sudan has long suffered from a complicated religious-ethnic conflict. In Mali,France was drawn into a religious-infused civil war. Nigeria is a divided nation where long-standing sectarian antagonisms increasingly have been amplified by the Islamic terrorist group Boko Haram, which kills moderate Muslims as well as Christians. Thankfully, fighting in the first two has ebbed. But Nigeria’s battle remains intense, albeit contained within its national boundaries. However, rising violence within the Central African Republic threatens to swamp the other conflicts in regional impact. Attacks on Christians following a takeover by the rebel Islamic Seleka coalition triggered retaliation by Christian militias. Not only is the violence creating a host of angry victims, but the outward flow of refugees is planting seeds of conflict in surrounding nations. “Sectarian violence is spreading ominously across Africa.” Central Africa increasingly looks like a region aflame, but in the continent tribal politics usually dominate and in this case geography helps separate the major religious battlegrounds. Of course, addressing even largely distinct national conflicts is not easy, as we have seen in Sudan and Nigeria. Unfortunately, religion is one force capable of transcending normal political and ethnic differences. For instance, Boko Haram so far has focused its murderous activities within Nigeria. But the exodus from C.A.R. creates an increased possibility of cooperation among various militants acting as friends if not quite allies. The implications of a truly regional conflict are frightening. All of C.A.R.’s neighbors share an interest in ending the sectarian killing. Not just for humanitarian reasons, but also as a matter of basic self-interest. Doug Bandow is a senior fellow at the Cato Institute. He is also the author of Beyond Good Intentions: A Biblical View of Politics.

Title:Walgreen Could Benefit from Moving to Europe
Date:Sun, 20 Apr 2014 10:31 EDT
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Description:Daniel J. Mitchell Some shareholders at Walgreen Co., based in Deerfield, are pressing the company to move its headquarters to Europe, where it owns nearly half of Swiss pharmacy giant Alliance Boots. Should Walgreen move? Walgreen Co.’s purchase of Alliance Boots raises the question of whether the expanded company should be domiciled in the United States or overseas. Many shareholders want a “corporate inversion” with the company based in Europe, possibly Switzerland. Some think this would allow Walgreen to avoid paying tax on American profits to Uncle Sam. This is not true. All companies, whether domiciled in America or elsewhere, pay tax to the IRS on income earned in the U.S. “Politicians in Washington should lower the corporate tax rate and reform the code so that America no longer is an unfriendly home for multinational firms.” But there is a big tax advantage if Walgreen becomes a Swiss company. The U.S. imposes “worldwide taxation,” which means American-based companies not only pay tax on income earned at home but also are subject to tax on income earned overseas. Most other nations, including Switzerland, use “territorial taxation,” which is the common-sense approach of only taxing income earned inside national borders. The bottom line is that Walgreen, if it becomes a Swiss company, no longer would have to pay tax to the IRS on income that is earned in other nations. That’s not a trivial matter since that income already is subject to tax by other governments. Moreover, the U.S. has one of the world’s highest corporate tax rates, putting American-based firms at an even greater disadvantage. Experts at UBS estimate that Walgreen faces a tax rate of more than 37 percent, while Boots has a rate of 20 percent. So if the combined company were based in Switzerland and got out from under America’s misguided tax system, the firm’s tax burden would drop, and UBS analysts predict that earnings per share would jump by 75 percent. That’s a plus for shareholders, of course, but also good for employees and consumers. But ideologues on the left, even the ones who understand that the company would comply with tax laws, are upset that Walgreen is considering this shift. They think companies have a moral obligation to pay more tax than required. This is a bizarre mentality. It assumes not only that we should voluntarily pay extra tax but also that society will be better off if more money is transferred from the productive sector of the economy to politicians. The management at Walgreen should do what’s best for shareholders, workers and consumers. But the real lesson is that politicians in Washington should lower the corporate tax rate and reform the code so that America no longer is an unfriendly home for multinational firms. Daniel J. Mitchell is a senior fellow at the Cato Institute.

Title:Dems Want Government Health Care for All -- No Matter the Cost
Date:Sun, 20 Apr 2014 10:26 EDT
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Description:Michael D. Tanner With little fanfare, Vermont is preparing to become the first state to implement a single-payer, government-run health-care system. The Vermont plan, if implemented, would abolish private health insurance in the state and replace it with a taxpayer-funded system under which the state government directly pays doctors and hospitals. Of course the state is having a bit of trouble figuring out how to pay for the program’s estimated $2 billion price tag, considering that the entire state government’s operating budget is currently just $2.7 billion. Currently under consideration is an increase in the state sales tax from 6.9% to 29%. At the same time, opponents of ObamaCare have often suggested the massive health-care program is really a stalking horse for such a government-run system. ObamaCare’s fans have sometimes suggested the same. Senate Majority Leader Harry Reid (D-Nev.) has said that the health-care law is “as step in the right direction” toward abolishing private health insurance. “Obamacare may take us further down the road to a government-run health care system.” But a single-payer system — or at least government-run health care — may already be a reality in far more ways than most Americans realize. Already the government directly pays for more than half of every dollar spent on health care in this country. This compares to just 13 cents directly paid by the individual purchasing or consuming the health care. (Virtually all of the remaining 37% is paid for through insurance, much of which is also subsidized, directly or indirectly, by the government). In fact, consumers in many countries that we associate with “socialized medicine,” such as France, actually pay more out of pocket for their health care than do Americans. Medicare is the single biggest government health care program. At a cost of $612 billion this year, the massive insurance program for seniors alone accounts for one-fifth of all US health care spending. Medicaid pays an additional 15%. Altogether, there are at least a dozen government programs to provide or pay for health care. In 2012, nearly 41% of New Yorkers receive health care through one or another government program, Medicaid in particular. According to the Kaiser Family Foundation, roughly 23% of New Yorkers are on Medicaid. By comparison, just 15% of Connecticut residents and 12% of New Jerseyans are on Medicaid. Medicare is the second-largest health-care payer in New York, providing coverage for 12% of residents, slightly below the 14% in Connecticut and New Jersey. But Medicare’s influence extends well beyond the number of enrollees. Because the program is the 800-pound gorilla in terms of paying for health care, it establishes the standards that private insurers use to set reimbursement rates for doctors and hospitals. Thus, directly or indirectly, the government is already involved in setting health-care prices. ObamaCare will further expand the governments reach into health care. Based on CMS figures, it is likely that 3 to 4 million people enrolled in Medicaid as a result of ObamaCare’s expansion of the program. (The administration has claimed more than 8 million Medicaid enrollees, but most are simply part of the normal churn within the Medicaid program, not new sign-ups.) This represents a 5.2% increase in the number of Americans on Medicaid. In New York, the percentage of people receiving health care through the program will shoot up to more than 28%. The evidence suggests that at many those new Medicaid recipients previously had private insurance before, but either were dumped by their employers or chose to go on “free” insurance. The Robert Wood Johnson Foundation, long a supporter of Medicaid, has amply documented this “crowd-out effect,” concluding that in some cases, loss of private insurance could completely offset the increased gains from Medicaid expansion. Similarly, a study by Jonathan Gruber of MIT, one of the architects of ObamaCare, and others found that for every 100 children who received coverage through Medicaid or SCHIP from 1996-2002, 60 lost private insurance. Given how far up the income scale ObamaCare expands Medicaid, such “crowd out” is liable to be even more common than before. When not expanding the number of Americans receiving government health care through Medicaid, ObamaCare will be adding to those whose purchase of private insurance is subsidized by taxpayers. According to the Center for Medicare and Medicaid Services and outside organizations such as the Kaiser Family Foundation, possibly as much as 83% of the 7.5 million Americans who signed up for insurance through exchanges received a subsidy to help pay for their insurance. That could amount to more than 6.2 million people. Worse, since it’s possible that fewer than 2 million enrollees were previously uninsured, millions of Americans who were paying for their own insurance have now moved into a system where the government is paying most of the cost. And it’s not as though those subsidies are going only to the poor, who otherwise could not afford insurance. Although more generous to those earning 250% of the poverty line ($58,875 for a family of four), some level of subsidy is available up to 400% of poverty ($94,200 for a family of four). In fact, taking into account various income disregards, some families with even higher incomes could receive a subsidy. The Congressional Budget Office estimates that as many as 700,000 people with incomes more than three times the poverty level will receive a subsidy next year. Nor should we forget that government also sets the rules for private insurance, regulating premiums, and mandating coverage for various medical conditions and provider groups. At the same time, certificate-of-need laws let state governments control where and when hospitals can be built or what medical equipment they may purchase. ObamaCare may indeed take us further down the road to a government-run health care system, but it’s a road already well-traveled. Now we face the same question as Vermont: Can we afford it? Michael Tanner is a senior fellow at the Cato Institute.

Title:Washington's Biggest Strategic Mistake
Date:Fri, 18 Apr 2014 16:45 EDT
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Description:Ted Galen Carpenter The United States is on the brink of committing a cardinal sin in foreign policy: antagonizing two major powers simultaneously. There are frictions in bilateral ties with both Moscow and Beijing that have reached alarming levels over the past year or so. It is a disturbing development that could cause major geopolitical headaches for Washington unless the Obama administration takes prompt corrective measures and sets more coherent priorities. Russia’s invasion and annexation of Crimea has created a deep freeze in relations that were already rather frosty. Although few knowledgeable Americans agreed with Mitt Romney’s assertion in the 2012 presidential campaign that Russia was the principal geopolitical adversary of the United States, there were surging sources of friction even before the onset of the Crimea crisis, including sharp disagreements over policy toward Syria and Iran. The Crimea episode has made matters dramatically worse, with Washington and its European Union allies imposing economic sanctions on Russia, and the Kremlin responding with (mostly symbolic) sanctions of its own. The language coming out of both Washington and Moscow is characterized by a hostility not seen since the end of the Cold War. U.S. officials ruminate about deploying troops to NATO members in Eastern Europe to discourage additional expansionist moves by Russia.Hawks in the U.S. foreign policy community openly advocate an even more provocative troop deployment, along with military aid, to Ukraine. “The United States is on the brink of committing a cardinal sin in foreign policy: antagonizing two major powers simultaneously.” Washington’s relations with Beijing also have become noticeably more contentious. That point was highlighted during Secretary of Defense Chuck Hagel’s recent visit to China. A series of testy exchanges culminated with a pointed warning from Defense Minister Chang Wanquan that efforts to “contain” China would never succeed. Beijing has been increasingly irritated by U.S. stances on a variety of issues. Washington’s position regarding China’s territorial disputes with neighboring states in both the South China and East China seas is an especially prominent grievance. From Beijing’s perspective, the Obama administration has exhibited an unsubtle backing of Japan, the Philippines, Vietnam, and other rival claimants. The new security agreement between Washington and Manila is likely to further exacerbate Sino-U.S. tensions on territorial issues. The simultaneous deterioration of U.S. relations with Russia and China is more than a little worrisome. It violates an important admonition that Secretary of State Henry Kissinger made during the Cold War. Reflecting on the Nixon administration’s decision to normalize relations with China, Kissinger emphasized the underlying geostrategic rationale. “Our relations to possible opponents,” he wrote in White House Years, the first volume of his memoirs, “should be such that our options toward both of them were always greater than their options toward each other.” In other words, he believed that Washington should take steps to make certain that its ties to both Beijing and Moscow were always closer than their ties to each other. It was a good strategy then, and it is a good strategy now. Clumsy diplomacy by the Obama administration threatens to produce a different and much more unpleasant result. Washington’s conduct may even be pushing Russia and China together, causing them to mute their own serious differences—including border disputes going back into the nineteenth century and ongoing political and economic competition in Central Asia—to deal with more pressing worries about the United States. Even the tone of U.S. diplomacy toward both countries is sometimes needlessly shrill and confrontational. Obama administration officials have thrown diplomatic temper tantrums because Beijing and Moscow have dared to resist U.S.-led efforts to unseat Syrian leader Bashar al-Assad and impose increasingly harsh economic sanctions on Iran. National Security Adviser Susan Rice, at the time U.S. ambassador to the United Nations, denounced Chinese and Russian vetoes of a Security Council resolution on Syria, proclaiming that her country was “disgusted” and adding that such actions were “shameful” and “unforgivable.” That attitude unsurprisingly drew sharp rebukes from Moscow and Beijing. Ideally, the United States should seek to repair relations with both countries. If Obama administration officials cannot bring themselves to adopt that approach, they should at least choose one major power to be the designated adversary, not antagonize both governments. The last thing we should want to do is inadvertently help reverse the split between Moscow and Beijing that began in the late 1950s. That means setting policy priorities and making choices. Policy makers need to ask themselves a set of important questions. Which country is more important to the United States, strategically and economically? Which country is more capable of harming important American interests? Which country may have the greater intent and capability to disrupt the status quo in their respective regions? Which country may have the intent and ability to alter the global status quo to the disadvantage of the United States? Those questions do not have easy answers. Russia may seem to be the more worrisome potential adversary in some categories, China in others. But making such complex assessments is the challenge confronting any effective foreign policy. Dodging that task and creating the risk of making adversaries of both Moscow and Beijing, which appears to be the current U.S. approach, is not an intelligent option. Down that path lie frustration and potential disaster. Ted Galen Carpenter, a senior fellow at the Cato Institute and a contributing editor to The National Interest, is the author of nine books and more than 550 articles and policy studies on international affairs.

Title:Shift Responsibility to the EU
Date:Fri, 18 Apr 2014 09:29 EDT
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Description:Doug Bandow For most of its history, the U.S. avoided what George Washington termed “entangling alliances.” During World War II and the Cold War, the U.S. aided friendly states to prevent hostile powers from dominating Eurasia. The collapse of communism eliminated the prospect of any nation controlling Europe and Asia. But NATO developed new roles to stay in business, expanding into a region highly sensitive to Russia. The invasion of Crimea has triggered a cascade of demands for NATO, mostly meaning America, to act. In March the administration undertook what Secretary of State John Kerry termed “concrete steps to reassure our NATO allies.” President Barack Obama detailed: “Today NATO planes patrol the skies over the Baltics, and we’ve reinforced our presence in Poland, and we’re prepared to do more.” The Eastern Europeans aren’t satisfied. An unnamed former Latvian minister told the Economist: “We would like to see a few American squadrons here, boots on the ground, maybe even an aircraft carrier.” A gaggle of American policy advocates agreed. “Europeans have no reason to change so long as Washington guarantees their security.” Ian Brzezinski of the Atlantic Council urged NATO or the U.S. alone to arm Kiev with “anti-tank and anti-aircraft weapons.” A number of analysts would make Ukraine an ally in everything but name. “Determine that any further assaults on Ukraine’s territorial integrity beyond Crimea represent a direct threat to NATO security and … will be met with a NATO response,” wrote Kurt Volker of the McCain Institute. Europeans have no reason to change so long as Washington guarantees their security. Charles Krauthammer suggested creating “a thin tripwire of NATO trainer/advisers” to “establish a ring of protection at least around the core of western Ukraine.” AEI’s Thomas Donnelly proposed “putting one brigade astride each of the two main roads” connecting Crimea to the Ukrainian mainland, “backed by U.S. aircraft and partnered with NATO and Ukrainian units.” Robert Spalding of the Council on Foreign Relations advocated deploying F-22 fighters along “with an American promise to defend Ukrainian skies from attack.” Sens. John McCain, R-Ariz., and Lindsey Graham, R-S.C., urged increasing “cooperation with, and support for, Ukraine, Georgia, Moldova and other non-NATO partners.” Of course, more must be spent on the military. “The past half-decade has seen the U.S. defense budget fall victim to the budgetary axe,” Ilan Berman of the American Foreign Policy Council complained. Yet America’s military spending is up 37 percent over the last two decades, while collective expenditures by NATO’s other 27 members are down by 3.4 percent. Overall the Europeans spend 1.6 percent of gross domestric product on the military. None match America’s 4.4 percent. Today, most NATO members continue to cut outlays. The Eastern Europeans, with the exception of Poland, have been reducing their spending as well. Of course, U.S. officials insist that Europe should do more. But the Europeans have no reason to change so long as Washington guarantees their security. Despite Europe’s anemic military efforts, it still far outranges Russia. In 2012, the other 27 NATO members spent $319 billion on their militaries, compared to $91 billion by Russia. With a collective GDP more than eight times that of Russia, the Europeans could do far more if they desired. The basic problem, noted Stephen Walt, is that “president after president simply assumed the pledges they were making would never have to be honored.” Obviously, an American threat to go to war may deter. But history is replete with alliances that failed to prevent conflict and became transmission belts of war instead. In fact, alliances can encourage conflict by emboldening weaker partners. For instance, in 2008 Georgia appeared to believe that Washington would back it against Russia. Offering military support to Ukraine could have a similar effect. Washington should bar further NATO expansion. Over the longer term the U.S. should turn responsibility for Europe’s defense back to Europe. Americans should sympathize with the Ukrainian people, who have been victimized by Moscow. But that does not warrant extending military support or security guarantees to Kiev. Today, Washington could best protect itself outside of the transatlantic alliance. Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to President Ronald Reagan, he is the author of Foreign Follies: America’s New Global Empire.

Title:The Shocking Secret Behind Obamacare Enrollment Numbers
Date:Wed, 16 Apr 2014 14:37 EDT
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Description:Michael F. Cannon Barack Obama wants you to know he enrolled 7.5 million Americans through Obamacare’s health insurance Exchanges. What he doesn’t want you to know is how. Federal courts may soon rule that President Obama induced the majority of those enrollees to enroll by offering them taxpayer dollars he has no legal authority to spend.  If the courts put a stop to that unauthorized spending, a majority of Exchange enrollees would suddenly face the full cost of Obamacare coverage, and enrollments would plummet. “The president is literally forcing taxpayers, without any legal authorization, to subsidize two out of every three Exchange enrollments.” Under the Patient Protection and Affordable Care Act, states have the option of establishing an Exchange themselves, or letting the federal government do it. The Act also authorizes subsidies that can require taxpayers to cover nearly the entire premium for Exchange plans. Among the eligibility criteria for those subsidies is a requirement that recipients enroll “through an Exchange established by the State.” Such requirements are routine, and this one is and unequivocal. Countless federal programs offer subsidies only in states that agree to implement them. The PPACA’s legislative history is littered with Republican and Democratic proposals to offer various subsidies — including tax credits and Exchange subsidies — exclusively in states that establish Exchanges. The eligibility rules for the PPACA’s Exchange subsidies specify nine times, without deviation, that recipients must enroll “through an Exchange established by the State.” House Democrats even complained about this part of the Senate-passed PPACA before they themselves approved it, so they knew exactly what they were sending to the president’s desk. Confounding supporters’ expectations, 34 states declined to establish Exchanges. Under the plain terms of federal law, subsidies are therefore available in the 16 Exchanges established by states, and not available in the 34 Exchanges established by the federal government. In 2011, however, the Obama administration unilaterally announced it would force taxpayers to subsidize insurance purchased through federal Exchanges as well. It cited no statutory authority for its decision, and has stubbornly refused to follow its own law despite immediate and sustained criticism.  In January of this year, the Obama administration began spending billions of dollars of unauthorized subsidies to induce Americans to enroll in the 34 Exchanges established by the federal government. The president is literally forcing taxpayers, without any legal authorization, to subsidize two out of every three Exchange enrollments.  Fortunately, unlike other ways President Obama has unilaterally rewritten the health care law, this one faces credible court challenges. Under the PPACA’s many interrelated provisions, those subsidies trigger penalties against millions of employers and individual taxpayers, who have filed suit asking the courts to put a stop to both. Last month, one of those lawsuits — Halbig v. Sebelius — went before a skeptical three-judge panel of the D.C. Circuit. After years of not articulating any statutory basis for its decision, the administration assured the court that the PPACA “makes clear that Congress expected the federal premium tax credits to be available on the federal exchange.”  How?  Through “a system of nested provisions that when you walk through them lead to the conclusion that the federal Exchange stands in the place of a state exchange.”  Oh. No one disputes the purpose of a federal Exchange is to stand in the place of a state-established Exchange. The problem is the administration’s logical leap that an Exchange established by the federal government is somehow “established by the State.” Judge Thomas B. Griffith, a George W. Bush appointee considered the panel’s swing vote, somewhat comically forced the administration to admit the tautology that an Exchange established by the federal government is not “established by the State.” He then explained, “the key language is who establishes the Exchange, and you just keep coming back to well, the Secretary establishes it.” The D.C. Circuit likely will issue a ruling sometime in the coming months, as will the 4th Circuit, which will hear oral arguments in King v. Sebelius on May 14, another challenge to the legality of the subsidies. Two similar challenges, filed by the attorneys general in Oklahoma (Pruitt v. Sebelius) and Indiana (Indiana v. IRS), await consideration in federal district courts. A ruling for the plaintiffs would uphold part of Obamacare the president is trying to repeal all by himself. And it would expose that the president is inducing millions of Americans to enroll in Obamacare under false pretenses. Michael F. Cannon is director of health policy studies at the Cato Institute. He blogs at DarwinsFool.com.

Title:Tax Day
Date:Wed, 16 Apr 2014 14:30 EDT
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Description:Michael D. Tanner Yesterday was, of course, tax day, the day on which most Americans file their federal and state income taxes. This, it should be noted, is different from the day on which Americans finally stop working just to pay taxes, which this year falls on April 18, three days later than last year. Until then, the government collects, on average, every cent that Americans earn, so you may still have a few more days to go until you can keep the fruits of your labor. Altogether, Americans will pay roughly $3 trillion in federal taxes this year, the most ever in nominal dollars. For taxes as a share of GDP, it is topped only by the year 2000. So much for the idea that our budget problems are caused by a lack of revenue. Tax day inevitably brings out a wide variety of pundits and politicians to repeat a number of persistent myths about American taxation, in particular the recycled claims about how the current tax system is rigged against the poor and middle class to benefit the wealthy. “How much, really, do different brackets of wage earners pay?” There certainly is much to criticize about the American tax system. It is far too complex and riddled with special-interest favors. There is definitely something wrong when an estimated 1,000 American households earning more than $1 million were able to avoid paying any income taxes in 2013. Moreover, the time and effort put into tax avoidance is badly distorting to the economy in general. Those who believe in free markets should admit that not every tax break is justifiable. However, on the larger point, wealthy Americans already pay a disproportionate share of federal income taxes. The top 1 percent earns 16 percent of all income in the United States, while paying 36.7 percent of all federal income taxes. The top 5 percent earns just over a third of U.S. income, but pays 59 percent of federal income taxes. On the other hand, the bottom half of tax filers earns 12 percent of U.S. income, but pays just 2.4 percent of federal income taxes. In fact, the 400 highest-earning Americans together pay nearly as much in federal income taxes as do the 50 percent of taxpayers at the low end of the scale. So, yes, the rich earn a lot more than the rest of us — that’s what makes them rich, after all — but they pay even more. True, if you also take into account sales, payroll and corporate income taxes, things even out a bit. But even so, in 2010 the average federal tax rate was only 11.5 percent for the middle quintile, compared to 24 percent for the highest quintile. The much-maligned 1 percent faced an even higher average rate of 29.4 percent. All of this is before the increase in the top tax rates as part of the fiscal-cliff deal and the numerous tax increases embedded in Obamacare take effect; today, the tax system is even more progressive than it was four years ago. And if you consider taxes as a transaction — what people receive from the government vs. what they pay — in 2010 those in the lowest quintile paid, on average, $300 in federal taxes but received $8,600 in transfers from programs like the earned-income tax credit, the Supplemental Nutrition Assistance Program, and the refundable portion of the child tax credit. But this phenomenon was hardly confined to the lowest-income Americans. Indeed, three-fifths of Americans received more in transfers than they paid in federal taxes, with those in the middle quintile receiving $8,400 more than they paid in. As can be seen from the numbers above, the U.S. tax code is quite progressive. But American liberals might be shocked to discover that the United States actually has the most progressive tax system of all the major industrialized democracies. The OECD measured the ratio of percentage of taxes paid to percentage of market income for the top 10 percent of earners in 24 countries. Total market income is far larger than total taxes paid, so even if the ratio is above 1, this is not saying this population pays more in taxes than they earn; it is saying that the share of taxes they pay is greater than the share of income they earn. In this report the U.S. came out on top, with the share of taxes paid equaling 135 percent of the share of income earned, far ahead of such “progressive” countries as France (110 percent), Denmark (102 percent), and Sweden (100 percent). We think of the European countries as having progressive tax systems because they have such high taxes on the rich. But we forget that they have high taxes on everyone else too. In addition, they rely heavily on value-added taxes, which are highly regressive. In 2011, nearly 18 percent of Europe’s tax receipts, on average, came from value-added taxes — as much as 30 percent in Lithuania. Nor should we forget that the United States has a higher corporate tax rate than any of our European rivals. A serious debate about tax reform is long overdue. But any such debate will require a few more facts — and a bit less class warfare. Michael Tanner is a senior fellow at the Cato Institute and the author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Title:Fed Can Print Money, But It Can't Print Jobs
Date:Wed, 16 Apr 2014 09:10 EDT
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Description:Alan Reynolds We have all been watching a long mystery with no ending: What the Federal Reserve governors are trying to do, how they intend to do it and why they imagine their efforts will work. The key questions boil down to two: (1) What target should the Fed aim at, and (2) what policy instruments should it use to hit that target? The Fed’s only explicit target — an unemployment rate of 6.5% — was shrewdly discarded as “outdated” as that target grew near. Actually, the idea of focusing on unemployment is outdated, since it presumes that high unemployment guarantees low inflation — as though stagflation in 1975 or 1982 could not have happened. Why not simply target inflation? Ben Bernanke advocated inflation targeting before 2002, when he became Fed chairman. On Nov. 21, 2002, he gave a speech warning that inflation was too low, threatening deflation. Today, as in 2002 or 1998, many are again warning that inflation is too low — just 1.1% last year when gauged by the deflator for personal-consumption expenditures (PCE), or 1.5% over the past 12 months, according to the March consumer price index. But the trouble with basing future policy on past inflation news is that inflation is always lower before it moves higher. PCE inflation rates of 0.8% in 1998 and 1.3% in 2002, for example, were followed by 2% inflation in 2003, 2.4% in 2004, and 2.9% in 2005. “In the end, economic growth depends on incentives to expand and improve labor and capital.” Many other central banks do set inflation targets, but the Fed encourages the popular delusion that central bankers, like central planners, possess the knowledge and skill to boost real economic growth and employment. Fed officials thus speak of their “dual mandate” to promote growth of the economy and jobs while keeping an eye on inflation. Prominent economists of all stripes have proposed that the Fed should focus instead on keeping the growth of nominal GDP (NGDP) growing at a steady rate. But growth of NGDP is simply the inflation rate added to the real GDP growth rate. So how does an NGDP target differ from a dual mandate? The graph above shows that before 2010, the Fed moved the federal funds rate up whenever nominal GDP growth picked up, and also reduced the fed funds rate when it slowed. The Fed often reacted to NGDP data with a lag — easing most aggressively in 1993 and 2003, long after recessions in 1990 and 2001. If the Fed reacted more promptly, how is an nominal GDP target supposed to work? A typical proposal, from James Pethokoukis at the American Enterprise Institute, is for the Fed to keep nominal GDP growing at a steady rate of 5%. But trying to keep NGDP growing at a 5% pace means inflation would have to speed up during recessions and decline in booms. If real GDP grew by 7.2%, as it did in 1984, the Fed would have to find some way to engineer a 2.2% deflation to wrestle NGDP down to 5%. If real GDP fell by 3.1%, as it did in 2009, the Fed would have to foster 8.1% inflation to push NGDP up to 5%. This is easier said than done. And why would anyone want to do it? If we had experimented with a 5% NGDP target in the past, it would mean that from 1983 to 2000, the Fed should have tightened policy more aggressively than it did during every single year but 1991. Yet those were years of strong economic growth and declining inflation. Far from being an “easy money” period, the federal funds rate was 3.6 percentage points higher than inflation. Swings in nominal GDP growth can be erratic, partly because of inventory cycles, foreign trade disruptions and government-spending spikes outside the Fed’s control. If the Fed decided to react to nominal GDP gyrations, then consumers, firms and investors might react badly to good news in quarterly GDP reports, anticipating that high rates must follow even ephemeral spurts in real growth. News of any possibility of exceeding the 5% speed limit would be a strong incentive for investors to panic and for consumers and retailers to stockpile durable goods before interest rates go up. If the Fed raised interest rates whenever nominal GDP exceeded 5%, they might just cut off the peaks in real GDP and leave the valleys. Monetary policy is far more effective in getting people to postpone spending than borrowing when they have good reasons to save. We know that the Fed has the power to crush real GDP — look at what happened after the fed funds rate hit 19% in January 1981. But we do not know if Fed policy could or should induce over-leveraged families and firms to spend income they don’t have. The currently fashionable fascination with a 5% (or higher) growth target for NGDP is that it suggests the Fed should have eased more than it did in every year since 2007. Yet it’s hard to imagine the Fed trying any harder than it has to stimulate demand after 2008. The fed funds rate has been more than a percentage point below the inflation rate for years. Annual growth of the M2 money supply from 2008 to 2013 was a brisk 6.7%. The problem with Fed policy has not been the target but the instruments used to hit the target. You can’t hit a bull’s-eye with a shotgun or a squirt gun. And you can’t hit two targets (inflation and unemployment) with just one gun. Adding more billions to excess bank reserves does nothing to encourage more bank lending, because banks have been unconstrained by reserves for years. Bank lending is far more constrained by regulations. To the extent that Fed efforts reduced interest rates for the private sector (rather than just for Uncle Sam), such lower interest rates may have raised the demand for loans, but they also reduced the supply. Bond yields did not rise when the Fed bought fewer bonds, raising doubts that QE even accomplished its goal of twisting (flattening) the yield curve. If it did succeed in flattening the yield curve, a flatter curve is normally associated with slower nominal growth, because banks borrow short and lend long. And super-low interest rates directly reduced the incomes of those, including seniors, holding liquid assets for security. At the moment, neither an inflation target nor a nominal GDP target suggest that the Fed needs to discourage the growth of money or credit — regardless of how much unemployment falls as people drop out of the labor force. If and when inflation and nominal GDP targets send conflicting messages, however, inflation is the one that matters. It can never be a matter of indifference whether the growth of NGDP consists of rapid real growth with little inflation (as in 1998), or rapid inflation with negative real growth (as in 1982). In the end, economic growth depends on incentives to expand and improve labor and capital. Sustained economic progress has essentially nothing to do with central banking so long as inflation is held in check. The Fed can print bank reserves, but it can’t print jobs. Alan Reynolds is a senior fellow with the Cato Institute.

Title:Ready to Join the International Community?
Date:Wed, 16 Apr 2014 08:49 EDT
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Description:Doug Bandow The United Nations Human Rights Council angered Iran by renewing the mandate of monitor Ahmed Shaheed, who has criticized Tehran’s abuses. His work remains vital as long as Iran violates its citizens’ most basic rights. At the same time nuclear negotiations continue. Dealing with Tehran could turn into the Obama administration’s greatest foreign policy success or another disaster. If the interim Geneva agreement leads to permanent denuclearization of the Islamic Republic of Iran, President Barack Obama can claim an achievement nonpareil. If the effort collapses, he will look dangerously naïve. Everything depends on whether Tehran, and not just President Hassan Rouhani, is serious. No surprise, many analysts — and more importantly, paladins of Capitol Hill — remain skeptical. And that doubt has fueled efforts to impose new sanctions, which would impede if not kill efforts to reach a final accord. If Iran is serious about joining the community of nations, it should demonstrate that commitment in practical ways. One of the most important symbols of Iranian irresponsibility today is its ruthless persecution of religious minorities. Many authoritarian regimes suppress political opponents — the one shared value among governments worldwide is staying in power. Far fewer seek to suppress the most basic exercise of human conscience. With an overwhelming Muslim majority, roughly 90 percent Shia, Iranian institutions will inevitably have an Islamic character. The government should not fear allowing those of other faiths to worship and live freely. There would be no more powerful reassurance for other nations of Tehran’s good intentions than for the Iranian authorities to respect religious liberty. The most celebrated case of persecution today is Saeed Abedini, an American citizen born in Iran and sentenced to eight years in prison last year for “undermining national security” by the Iranian government. The idea that the 33-year-old father of two threatens the regime is ludicrous. A Muslim convert to Christianity, he had been arrested and released on prior trips. His “crime” in Tehran’s view apparently was aiding house churches. He went to Iran in 2012 to set up an orphanage, with the government’s approval. Since then he was abused and tortured while held at Iran’s notorious Evin prison, and then transferred to Rajai Shahr prison, which may be even more dangerous. President Obama called for Abedini’s release. President Rouhani responded that he could not “interfere in the judicial process,” but left hope that the government might be able to “assist.” Unfortunately, Abedini is merely the symbol of broader religious repression. As adherents of a historic faith recognized by the constitution, Christians nominally are free to worship. But that right is highly constrained, as Iran has emerged as one of the globe’s worst persecutors. For instance, Tehran makes the World Watch List from Open Doors USA and the Hall of Shame from International Christian Concern. The European organization Human Rights Without Frontiers reported that Iran is one of the five top prison states for religious prisoners. The U.S. Commission on International Religious Freedom (USCIRF) has routinely labeled Tehran as a Country as Particular Concern. The Commission’s 2013 report concluded: “The government of Iran continues to engage in systematic, ongoing, and egregious violations of religious freedom, including prolonged detention, torture, and executions based primarily or entirely upon the religion of the accused.” In its latest religious liberty report the State Department noted that Iran’s “constitution and other laws and policies do not protect religious freedom, and in practice, the government severely restricted religious freedom.” “Iran should stop persecuting religious minorities.” Tehran’s brutal persecution has been getting worse. The International Campaign for Human Rights in Iran published a report on religious persecution last year, which noted that “In 2005, coinciding roughly with the election of President Mahmoud Ahmadinejad, the Iranian government ramped up its repression of Christian house churches, Persian-language Protestant churches, and converts. It has further intensified its efforts since 2010.” USCIRF reported that “since the disputed 2009 elections, religious freedom conditions in Iran have regressed to a point not seen since the early days of the Islamic revolution. Killings, arrests, and physical abuse of detainees have increased, including for religious minorities and Muslims who dissent or express views perceived as threatening the legitimacy of the government.” Mohabat News pointed to another increase in repression since 2011: “Many Christians, especially newly converted Christians, have faced imprisonment, pressure and harassment in the past few years.” ICHRI also focused on persecution of converts, who face not only government prosecution, but even more commonly “what are widely considered to be extrajudicial killings.” State concentrated on 2012, when “The government’s respect for religious freedom declined during the year.” Tehran increasingly was “charging religious and ethnic minorities with moharebeh (enmity against God), ‘anti-Islamic propaganda,’ or vague national security crimes for their religious activities.” Increasingly religious faith is being treated as a political threat. Said Indiana University Professor Jamsheed Choksy: “Most of the several hundred imprisoned members of religious minorities stand charged with threatening ‘national security’ and some even face capital punishment at the hands of revolutionary tribunals.” ICHRI explained that such charges sometimes were used as a substitute for apostasy, to lessen foreign criticism. Even the United Nations has criticized Iran for its pervasive repression, last year releasing a highly critical report from Ahmed Shaheed, the Special Rapporteur on Human Rights. He pointed to “widespread systemic and systematic violations of human rights.” Religious minorities are at particular risk, facing “discrimination in law and/or in practice. This includes various levels of intimidation, arrest and detention.” Currently the regime appears to be most concerned about conversions. Christians traditionally were minorities, especially Armenians and Assyrians, who speak a different language. However, the number of converts is increasing. HRWF reported that charges against those arrested last year included “conversion from Islam to Christianity, encouraging the conversion to Christianity of other Muslims, and propaganda against the regime by promoting Christianity as missionaries.” Since converts are denied government permits to operate churches, they tend to form home congregations, which are targeted by the authorities. The government also has focused on Farsi-language services at Christian churches, on the theory that they draw converts from Islam. Katrina Lantos Swett, who chairs the UCIRF, recently declared: “Conditions are at levels not seen since the early years of the revolution.” During last year’s Iranian presidential campaign the regime closed the country’s largest Farsi-language church, Central Assemblies of God Church in Tehran. Mohabat recently reported that Tehran’s St. Peter Church has told Farsi-speakers that is must drop its Farsi-language services. George Wood of the U.S. Assemblies of God was quoted by the Conservative New Service explaining that shutting down Farsi programs “would essentially remove all open witness of the gospel of Christ in the country.” Persecution today reflects both law and practice. Iran is a theocratic state whose laws are to be based on “Islamic criteria.” The constitution formally accords “full respect” to Christians, Jews, and Zoroastrians, who are allowed to worship “within the limits of the law.” Proselytizing and converting are barred, however. Moreover, according to the State Department, Jews are “regularly vilified” and the government “regularly arrests members of the Zoroastrian and Christian communities for practicing their religion.” Far worse is the treatment of other groups, such as Baha’is and other Muslims, including Sufis, Sunnis, and non-conformist Shia. The first are considered to be apostates. Atheists also are punished for “enmity against God.” Explained State, “The government prohibits Baha’is from teaching and practicing their faith and subjects them to many forms of discrimination not faced by members of other religions groups.” Sunnis face double jeopardy since many are ethnic minorities, such as Arabs and Kurds. Even dissenting Muslim clerics, according to USCIRF, are “intimidated, harassed, and detained.” Government hostility encourages private discrimination as well. Said State: “The government’s campaign against non-Shias created an atmosphere of impunity allowing other elements of society to harass religious minorities.” ICHRI reported that Christians “face systematic discrimination in almost all walks of life.” Every faith community is at substantial risk. Iran’s Jewish community is small, perhaps 25,000, but under President Mahmoud Ahmadinejad suffered through official anti-Semitism and Holocaust denial. President Rouhani has abandoned such rhetorical excesses, even wishing the Jewish community a happy Rosh Hashanah. But the hostile atmosphere runs deep. After the 1979 revolution, nearly a score of Jews were executed for alleged spying. In 2000 ten were convicted of spying for America and Israel in what appeared to be a fantasy plot. Christians also suffer. In 1990 Rev. Hossein Soodmand was executed for apostasy because he had converted from Islam three decades before. Four years later another Christian was sentenced to death on the same charges, though freed in response to international protests. However, Bishop Haik Hovsepian Mehr, who spoke out in the case, was murdered; his killer or killers were never identified. Persecution, though more through imprisonment than execution, has been rising since then, apparently for several reasons. Barnabas Aid concluded that the regime fears “the number of Iranian Muslims turning to Christ.” Kiri Kankhwende of Christian Solidarity Worldwide believed the regime saw non-Muslim beliefs “as a challenge to the very state itself.” Iranian officials also cite contacts with foreign-backed groups, as did ICHRI, which reported that the government’s campaign reflected the belief “that the house church movement is linked to ‘Western powers’ and ‘Zionists’ who are waging a soft war against the regime.” These fears have led to raids on established churches and home congregations, threats against and arrests of leaders and worshipers, and punishment for drinking communion wine. Hundreds of Christians were detained in the last two or three years, with an increase in frequency as last year’s election approached. ICHRI reported that “Christian detainees are often denied due process and basic rights. They are held in prolonged detention without formal charges, trials are held without access to counsel, or, if there is counsel, without access to court files, and ill treatment is common during detention.” Not everyone receives a lengthy term in prison. The International Campaign explained: “Most Christians arrested by authorities are eventually released, often with heavy bails. However, in many cases the investigations are never closed, nor are charges, if there are any, dismissed.” Thus, the threat of prosecution remains. Moreover, a number have been imprisoned, many of whose cases are detailed by ICHRI. Saeed Abedini is not the only high profile Christian prisoner. Convert Youcef Nadarkhani was arrested in 2009, sentenced to death, retried and acquitted, released, rearrested, and released early last year. His wife was sentenced to life imprisonment for apostasy and then released. Also officially recognized is Zoroastrianism, which predates both Christianity and Islam and has fewer than 100,000 followers. Yet adherents are monitored and treated as national security threats. Explained Choksy: “Like members of the Christian, Jewish and Baha’i minorities, Zoroastrian activists who protest the theocracy’s excesses are sent to Tehran’s notorious Evin prison on charges of sedition.” Lacking even a modicum of legal protection are Baha’is. Last year Supreme Leader Ayatollah Ali Khameini issued a fatwa calling Baha’is “deviant and misguided.” Thousands have been arrested since 1979. Heiner Bielefeldt, the UN Special Rapporteur on Freedom of Religion and Belief, called Iran’s treatment of Baha’is as among the most “extreme manifestations of religious intolerance and persecution.” Several Baha’i leaders arrested in 2008 are serving 20-year sentences. Kamran Hashemi reported in the Guardian: “Baha’i-owned shops are sealed or burned to the ground, cemeteries are desecrated, homes are raided and property is confiscated.” Perhaps the only way to receive worse treatment would be to declare oneself an atheist. The Shia regime also targets Sunni Muslims, who are prevented from building their own mosque or using rental facilities. Sunni clerics also have been arrested; believers, including university students, have been sentenced to death for proselytizing. The government also has destroyed worship places for Sufis and imprisoned individual believers. The situation for religious minorities in Iran is dire. The U.S. government has little direct leverage, having already applied targeted Tehran with economic sanctions over its presumed nuclear ambitions. However, Washington (and the Europeans) could indicate to Iran that a deal is more likely if it quiets Western skeptics. Reversing Iran’s recent policy of religious intolerance would offer an important signal. In fact, public pressure works. UN Special Rappoteur Shaheed reported last year that “At least a dozen lives were saved because of the intervention of international opinion.” ICHRI attributed Youcef Nadarkhani’s release “to international pressure.” Encouraging Tehran to respect the freedom of conscience of its citizens might even more effectively come from the most fervent advocates of engagement. How to best resist proposals for new Western sanctions? Ask Tehran to accept religious dissent. Candidate Rouhani promised to issue a “civil rights charter,” which sounded promising. However, his proposed legislation fails to adequately protect human rights. Today he needs to address those who doubt the Iranian authorities are genuinely committed to a new approach to international affairs. To prove they are, Tehran should release Rev. Abedini, pardon imprisoned Baha’is, allow Sufis and Sunnis to worship, and more. “The international community is watching,” observed Dwight Bashir, deputy director of USCIRF. Iran should act accordingly. Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).

Title:Speech on Public College Campuses Liberated in One State
Date:Wed, 16 Apr 2014 05:20 EDT
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Description:Nat Hentoff On April 4, Virginia Gov. Terry McAuliffe signed into law a bill unanimously passed by the House of Delegates and the Senate, which turns outdoor areas on the state’s public college and university campuses into what the Foundation for Individual Rights in Education, or FIRE, calls “public forums.” In other words, student speech will not be limited to the tiny “free speech zones” that, as FIRE documents, restrict student speech in “1 in 6 of America’s 400 top colleges” in this land of the free and home of the brave. This is America? In these places of higher learning? As Greg Lukianoff, president of FIRE, keeps revealing, these tightly squeezed campus speech zones often result in “banishing student protests, leafleting and other basic expression (political or otherwise) to tiny areas far away from the students the speech is intended to reach” (“Virginia Legislature to Campuses: Down With Free Speech (Zones)!” Greg Lukianoff, Huffington Post, April 7). Of course, FIRE was deeply involved in this historic unleashing of Virginia students’ First Amendment rights. But what about the state’s private colleges and universities? The pressure will now be on them, too, to allow their students to be fully American by speaking freely on those campuses. It’s important to emphasize that, as FIRE does while it now goes on to give the First Amendment a home on other college campuses, “restricting student speech to tiny ‘free speech zones’ diminishes the quality of debate and discussion on campus by preventing expression from reaching its target audience” (“Virginia Bans Unconstitutional Campus ‘Free Speech Zones,’” www.thefire.org, April 7). “Often, institutions that maintain these restrictive policies also employ burdensome permitting schemes that require students to obtain administrative permission days or even weeks before being allowed to speak their minds. “Even worse, many of these policies grant campus administrators unfettered discretion to deny applications based on the viewpoint or content of the speakers’ intended message.” Are students on those campuses learning to be active, knowledgeable participants in this self-governing republic? Virginia’s law, which FIRE is determined to extend to other states’ schools where it’s needed, “prohibits public institutions of higher education from imposing restrictions on the time, place and manner of student speech that occurs in the outdoor areas of the institution’s campus and is protected by the First Amendment to the United States Constitution …” However, there are restrictions. Watch for these exceptions, because they’re why FIRE always stays on and protects its victories: “the restrictions (i) are reasonable, (ii) are justified without reference to the content of the regulated speech, (iii) are narrowly tailored to serve a significant governmental interest, and (iv) leave open ample alternative channels for communication of the information” (from the State Council of Higher Education for Virginia, www.schev.edu). Meanwhile, FIRE will keep an eye on administrators at the University of Virginia, and so will its student members there, to make sure the law remains whole. In the history of this nation, no other organization has come close to FIRE in working to safeguard the individual constitutional liberties of college students of all backgrounds and beliefs. That’s why, almost from its inception, I’ve been on the Advisory Council of FIRE. Because I’m aware of all it does, I know FIRE doesn’t need my advice, so what I do is spread the word of its record of liberty, which would have made James Madison joyous. According to FIRE’s website, the organization is a “nonprofit educational foundation … (whose) mission is to defend and sustain individual rights at America’s colleges and universities. These rights include freedom of speech, legal equality, due process, religious liberty, and sanctity of conscience – the essential qualities of individual liberty and dignity.” It should also be noted that FIRE represents no political party – just the American people. In a pamphlet on college speech codes, FIRE says it’s “been fighting for student and faculty rights since 1999, and we’ve been very successful in doing so. Since our founding, FIRE has won over 190 public victories at more than 135 colleges and universities that have a total enrollment of nearly three million students. “FIRE is directly responsible for changing over 90 unconstitutional or repressive policies affecting more than 1.9 million students” (“Challenging Your College’s Speech Code,” www.thefire.org). All along, I’ve been hoping FIRE would also move the First Amendment into high schools. That is beginning to happen, as I’ll report on how this liberation of students and faculties brings the living Bill of Rights into those schools. And I yearn to live long enough to also see FIRE reach elementary-age students, teaching them how to be authentic Americans. Next week, with the aid of Joe Cohn, FIRE’s Legislative and Policy Director (who testified before both houses of Virginia’s General Assembly in support of the state’s campus free speech law), I will report on the organization’s involvement in another historic U.S. state decision: In 2013, “North Carolina Governor Pat McCrory signed a bill granting public university students in the state facing non-academic disciplinary charges the right to an attorney” (“North Carolina Becomes First State to Guarantee College Students’ Right to Attorney,” www.thefire.org, Aug. 23, 2013). Explained FIRE Senior Vice President Robert Shibley: “Students across America are regularly tried in campus courts for serious offenses like theft, harassment, and even rape. Being labeled a felon and kicked out by your college carries serious, life-altering consequences. “Because the stakes are so high, students should have the benefit of an attorney to ensure the hearing is conducted fairly and by the rules.” So we have two firsts in the nation! Did you know about this law in North Carolina? Did you know the First Amendment is now flying high across many of Virginia’s college and university campuses? Where are the media? Nat Hentoff is a nationally renowned authority on the First Amendment and the Bill of Rights. He is a member of the Reporters Committee for Freedom of the Press, and the Cato Institute, where he is a senior fellow.

Title:Justice Stevens Is Right: Good or Bad, Death Penalty Is Constitutional
Date:Tue, 15 Apr 2014 09:27 EDT
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Description:Ilya Shapiro Justice John Paul Stevens has been getting lots of attention lately for his views on the Second Amendment—he still doesn’t like the individual right to keep and bear arms, and would amend the Constitution to get rid of it—but it’s his views on the death penalty that have provoked the more troubling reaction. Here’s the back-story: Justice Stevens has published a book, Six Amendments: How and Why We Should Change the Constitution. Three of these amendments are structural: (1) requiring state officials to enforce federal law; (2) eliminating state sovereign immunity; and (3) doing away with political gerrymandering. The other three are from the populist-progressive playbook: (4) the aforementioned Second Amendment tweak (which doesn’t make sense as drafted); (5) allowing Congress and state legislatures to censor political speech limit the money people can spend on election campaigns; and (6) outlawing the death penalty. The Atlantic’s Andrew Cohen latched onto this last one, lamenting that Stevens is: a man who consistently upheld capital convictions and the death penalty itself for over 35 years, who helped send hundreds of men and women to their deaths by failing to hold state officials accountable for constitutional violations during capital trials, who more recently endorsed dubious lethal injection standards because he did not want to buck up against court precedent, now wants the Eighth Amendment to read this way, with five new words added: “…nor cruel and unusual punishments such as the death penalty inflicted.” (The reference to lethal-injection standards relates to the 2008 case of Baze v. Rees, which upheld Kentucky’s particular method of execution. Stevens concurred in that ruling but wrote separately to question “the justification for the death penalty itself.”) Now, I don’t have any particular ax to grind regarding the death penalty as a policy matter—it’s probably warranted for serious crimes, but there are real problems with the way our justice system administers it—but as a question of law, it’s hard to argue that it’s always unconstitutional. The Fifth Amendment references “capital” crimes and outlaws putting someone’s “life” in jeopardy twice for the same crime, and both the Fifth and Fourteenth Amendments protect against being deprived of “life” without due process of law. “Too many commentators conflate that with which they agree with that which the constitution requires.” To be sure, the Eighth Amendment does prohibit “cruel and unusual punishments,” but that just means that the death penalty can’t be applied in a particularly inhumane way (for example, vivisection). Moreover, debates over the death penalty almost always occur in the context of state criminal law, over which the federal government has little authority. Yes, there’s a federal criminal code—much of which is itself of dubious constitutional authority given the outlandish reading courts have given Congress’s power to regulate interstate commerce—but it imposes capital punishment exceedingly rarely (three times in the last 50 years, not counting military justice). All the highest-profile Supreme Court cases thus force the justices to consider whether a state’s imposition of the ultimate punishment is “cruel or unusual,” not whether the death penalty is unconstitutional altogether. So if you want to abolish the death penalty, you either have to go state-by-state—18 states have done away with it, 6 since 2007—or, as Justice Stevens suggests, you have to amend the Constitution. But just because someone, even a Supreme Court justice, concludes that the death penalty is a bad idea, or immoral, or otherwise inappropriate, doesn’t make it unconstitutional. There can certainly be bad policies that are constitutional—or, for that matter, good policies that are unconstitutional. Indeed, given that it’s my wont to label legislation and government action as unconstitutional, I’m frequently asked if there are any policies I like that I nevertheless think violate our founding charter. It’s a hard question, given that the Constitution is fundamentally a classical liberal, or libertarian, document, which fits with my political philosophy. Nevertheless, my top two examples are environmental regulation—properly conceived; it’s inefficient to have a tort-law based system of regulating pollution that crosses state lines—and federal tort reform. But regardless of my personal views, too many commentators conflate that with which they agree with that which the constitution requires. Justice Stevens, even if he errs in his understanding of the right to armed self-defense and shouldn’t be proposing amendments, gets that right. Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review. Follow him on Twitter.

Title:Abusive Civil Asset-Forfeiture Laws
Date:Mon, 14 Apr 2014 09:18 EDT
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Description:Richard W. Rahn Do you think the Internal Revenue Service and other government agencies should have the right to seize your assets, including your bank accounts, when you have not been convicted of wrongdoing? The fact is, the IRS and other government agencies do this all of the time, and often without even a formal accusation of wrongdoing. Anyone who is awake knows that the IRS has been politicized — and thus critics of the administration live in fear that their property will be taken for the mere act of speaking out against the government. The American Founding Fathers well understood that if the government was given too much power, it would almost certainly abuse it. Unfortunately, the elaborate system of checks and balances they devised has been steadily eroded by weak-kneed and intellectually bankrupt judges, members of Congress and presidents over the past two centuries, and thus, the United States increasingly resembles an authoritarian state rather than a republic that protects individual liberties. “Government seizure of property without due process should cease.” The government has always been able to seize private property that was used to perpetrate a crime or produced by a crime. Under the Constitution, every American has the right to be considered innocent until proven guilty. Thus, in criminal cases, the government has to convince a judge and jury beyond a reasonable doubt that a crime has been committed. Under civil asset-forfeiture laws, no such proof is required — and, as a result, many innocent people have had their property taken by agents of the federal government. As people become increasingly aware of the abuses, individual citizens and organizations formed to protect individual liberty are fighting back and beginning to win some cases. There was the widely publicized case of Terry Dehko and his daughter, who had owned a supermarket in Fraser, Mich., since 1978. The IRS seized their entire bank account of more than $35,000 in April 2013, without arguing before a court of law that the Dehkos had committed a crime. In fact, they had committed no crime. Fortunately, the Dehkos were able to enlist the help of the Institute for Justice, a civil-liberties law firm that works on the behalf of individuals. After a year of expensive litigation, the government did return their money. Institute for Justice lawyers have noted that the “federal civil forfeiture law features an appalling lack of due process: It empowers the government to seize private property from Americans without ever charging, let alone convicting, them of a crime.” “Perversely, the government then pockets the proceeds while providing no prompt way to get a court to review the procedure.” Originally, the civil forfeiture laws were passed to make it easier for the government to stop drug traffickers, money launderers and tax evaders. As always, agents of the government, rather than being careful and judicious in the use of their new powers, quickly abused them. As Lord Acton warned, “Power tends to corrupt, and absolute power corrupts absolutely”. Consequently, Americans are left with a situation where government agents can seize private property (while often benefiting directly or indirectly from the seizure), where the citizen is given no due process, and where government agents have used their powers to take revenge or harass their political opponents. If the government seizes your bank account, where do you get the money to hire a lawyer to defend yourself? The Institute for Justice and others have called for reforms, including allowing property owners subject to civil forfeiture to have speedy access for a prompt trial before a judge, having the presumption of innocence until proven guilty, and to reduce conflicts of interest, making sure seized assets are separated from the budgets of law enforcement. While such changes would surely be an improvement, they still leave too much power in the hands of IRS and other federal agents. The tax code has grown to such an extent that no one person in the IRS or outside of government can fully understand it — so whether one is in compliance is increasingly subjective and vague. Often incomprehensible law (which characterizes both the tax code and anti-money laundering laws and regulations) administered by politicized government agencies will result in abuse. The only real solution to protect the rights of the individual is to either repeal the income tax and anti-money laundering laws, or repeal all the civil asset-forfeiture laws, including the right of the IRS to seize bank accounts. Some on both the right and the left will scream that repeal of civil forfeiture will make the job of the crime fighter and tax collector more difficult, which it will. However, the alternative is for innocent citizens to live in fear of their assets being seized by overzealous, politicized or corrupt government agents. Losing some tax revenue and having a few money launderers go free is a small price to pay for keeping our civil liberties. Richard Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

Title:Deputizing Everyone Isn't Producing Results against Terrorism, but Officials Keep Trying
Date:Mon, 14 Apr 2014 09:10 EDT
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Description:Gene Healy “If you see something, send something.” That’s the slogan for Ohio Homeland Security officials’ spiffy new “Safer Ohio” smartphone app, whose release coincides with the one-year anniversary of the Boston Marathon bombings. It’s “Ohio’s multi-function mobile public safety tool,” the department brags; concerned citizens can use it to snap and submit camera phone pics of anything that raises their hackles, thereby “report[ing] suspicious activity directly to the state’s round the clock public safety intelligence analysts.” “The campaign for citizen vigilance seems to have done little besides generate an atmosphere of perpetual, low-level anxiety and excuses for official harassment.” The instructional video that goes with the app is, well, instructive. What kinds of potential perils do Buckeye State bureaucrats want flagged for follow-up? The video provides an example: a picture of what looks like a man-purse lying on the carpet next to an office filing cabinet. “You can send just a message,” the robotic voiceover intones, or text a photo; “Either way, analysts will follow up on every tip.” No wonder they’re there around the clock. Remember Operation TIPS? That was the Bush administration’s 2002 “Terrorism Information and Prevention System,” a scheme to assemble a legion of volunteer citizen-informants drawn from the ranks of mail carriers, utility employees and others with special opportunities to observe and report. The resulting public outcry led Congress to bar the program later that year, in the bill creating the Homeland Security Department. But Homeland Security officials at the federal, state and local levels have apparently concluded that TIPS’s basic concept is sound — so long as you deputize everyone. We’ve had more than 10 years’ experience with “if you see something, say something,” and the results are nothing to write home about. The brainchild of a now-defunct ad agency, the campaign started in New York City, with posters urging straphangers to phone in tips. By 2008, the Metropolitan Transit Authority was running ads boasting that “last year, 1,944 New Yorkers saw something and said something.” Campaign-inspired calls had resulted in 18 arrests over two years, none terrorism-related. By 2010, DHS wanted a piece of the inaction, securing a license to take the campaign federal, with then-DHS Secretary Janet Napolitano’s stern monotone echoing through the Washington Metro and Walmarts nationwide. The Kentucky Office of Homeland Security, which launched its own smartphone app in 2011, offers tips on “Recognizing Suspicious Activity”: it can include “trying not to be noticed” or “avoiding eye contact.” It’s “not a hard science,” they admit, but take a crack at it. There’s no indication that any of these programs have worked any better than the original campaign in New York. As Ohio State University political scientist John Mueller notes, his “examination of all known terrorism cases since 9/11 that have targeted the United States suggests that the ‘If You See Something, Say Something’ campaign has never been relevant.” That doesn’t mean it’s been costless. The problem is one of “too many ‘dots,’” as the Congressional Research Service puts it; the “challenge” with suspicious-activity reporting is that it can “result in an avalanche of largely irrelevant or duplicative data while diverting the police from more productive law enforcement activities.” Worse still, the “say (or send) something” crusade has resulted in government databases filled with “suspicious activity reports” describing constitutionally protected activity like protesting “excessive force by law enforcement.” As Mueller puts it, such programs have had little benefit save perhaps the dubious one of ”bolstering support for homeland-security spending by continually reminding an edgy public that terrorism might still be out there.” The campaign for citizen vigilance that began in the subways and is now migrating to our iPhones seems to have done little besides generate an atmosphere of perpetual, low-level anxiety and excuses for official harassment. That’s the sort of threat we could stand to be more vigilant about. Gene Healy, a Washington Examiner columnist, is vice president at the Cato Institute and author of The Cult of the Presidency.

Title:Gujarat Is India's Top State in Economic Freedom
Date:Sun, 13 Apr 2014 09:02 EDT
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Description:Swaminathan S. Anklesaria Aiyar Does Narendra Modi actually have a great Gujarat model, or just well packaged hype? Critics say that Gujarat has grown fast, but some others have grown faster. The Raghuram Rajan Committee on development indicators says Gujarat’s social indicators are just middling. Looking at children of class 3-5 who can do subtraction, Gujarat has declined from 22nd among 28 states in 2006 to 23rd in 2012. However, economist Arvind Panagariya argues that Gujarat has made substantial social progress under Modi, starting from a low base. “EFSI and other studies show that Gujarat has good governance.” Forget this debate. Neither growth nor social indicators are accurate measures of Modi’s main election plank — good governance. Measuring governance is difficult, and hence neglected by statisticians. Yet it’s all-important. One annual report has long provided indicators of governance. This is Economic Freedom of the States of India (EFSI), written by Bibek Debroy, Laveesh Bhandari and me. The 2013 EFSI report shows Gujarat has been No. 1 in economic freedom for the last three years, widening its lead over others. On a scale from 0 to 1, its overall freedom score has improved from 0.46 to 0.65. Tamil Nadu comes a distant second with 0.54. Economic freedom is not identical to good governance. But lack of economic freedom typically means poor governance — a jungle of rules and obfuscating bureaucrats that promote corruption, delay and harassment. This hits everybody from farmers and consumers to industrialists and transporters. What exactly is economic freedom? EFSI uses a methodology adapted from Economic Freedom of the World, an annual publication of the Fraser Institute. Data for Indian states is not available on many issues. So, EFSI limits itself to 20 indicators of the size and efficiency of state governments, their legal structure and property rights, and regulation of labour and business. Many of these indicators directly measure governance — the proportion of stolen property recovered; proportion of judicial vacancies; proportion of violent crimes; proportion of investigations completed by police and of cases completed by the courts; and the pendency rate of corruption cases. The list is by no means comprehensive, but provides strong clues. Gujarat is the best state in pendency of corruption cases, and in the proportion of non-violent crime. It is close to the top in completion of police investigations. It scores poorly in judicial vacancies and recovery of stolen property. Its quality of government spending is high: it has the lowest ratio of administrative GDP to total GDP. Spending is focused on infrastructure rather than staff. Modi’s repeated state election victories show that his approach produces high voter satisfaction. Gujarat is not a classical free-market state. It has large, expanding public sector companies, and substantial taxes on capital and commodities. It has many subsidies, though fewer than in other states. Still, business thrives in its business-friendly climate. One businessman told me that in Tamil Nadu, it took six months and several visits (and payments) to ministries for industrial approval. But in Gujarat, the ministry concerned called him the day before his appointment, asking for details of his proposal. Next day, he found the bureaucracy had in advance prepared plans of possible locations for his project, and settled the matter on the spot. This was unthinkable elsewhere, and showed both efficiency and honesty. Corruption has not disappeared in Gujarat, but is muted. Modi’s Jyotigram scheme provides 24/7 electricity for rural households, plus reliable power at fixed times for tubewells. This explains why Gujarat has India’s fastest agricultural growth (10%/year for a decade, say economists Gulati and Shah). Indian agriculture is crippled by regulations, but Gulati shows that Gujarat has the highest agricultural freedom among states. Modi charges farmers for power, and so all his three state power companies are profitable. By contrast, power companies in other states with free rural power have accumulated losses of almost Rs 200,000 crore. Critics accuse him of giving cheap land to favoured industrialists. But state and national governments the world over use such sops to attract industries. Unlike most politicians, Modi has clearly not enriched himself. Good governance includes communal peace. So, the 2002 Muslim killings reflect terribly on Modi. For some, it puts him beyond the pale. But since 2002 the state has been peaceful. In 2011-12 , Gujarat had the lowest Muslim rural poverty rate among all states. Its overall poverty rate for Muslims (11.4%) was far lower than for Hindus (17.6%). This was also true of six other states, so Gujarat is not unique in this. In sum, EFSI and other studies show that Gujarat has good governance. It has social and communal flaws. But it is India’s top state in economic and agricultural freedom. That’s not hype. Swaminathan S. Anklesaria Aiyar is a research fellow at the Cato Institute with a special focus on India and Asia.

Title:The NSA's Heartbleed Problem Is the Problem with the NSA
Date:Sat, 12 Apr 2014 13:29 EDT
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Description:Julian Sanchez The American intelligence community is forcefully denying reports that the National Security Agency has long known about the Heartbleed bug, a catastrophic vulnerability inside one of the most widely-used encryption protocols upon which we rely every day to secure our web communications. But the denial itself serves as a reminder that NSA’s two fundamental missions — one defensive, one offensive — are fundamentally incompatible, and that they can’t both be handled credibly by the same government agency. In case you’ve spent the past week under a rock, Heartbleed is the name security researchers have given to a subtle but serious bug in OpenSSL, a popular version of the Transport Layer Security (TLS) protocol — successor to the earlier Secure Sockets Layer (SSL) — that safeguards Internet traffic from prying eyes. When you log in to your online banking account or webmail service, the little lock icon that appears in your browser means SSL/TLS is scrambling the data to keep aspiring eavesdroppers away from your personal information. But an update to OpenSSL rolled out over two years ago contained a bug that would allow a hacker to trick sites into leaking information — including not only user passwords, but the master encryption keys used to secure all the site’s traffic and verify that you’re actually connected to MyBank.com rather than an impostor. “The NSA’s two fundamental missions — one defensive, one offensive — are fundamentally incompatible.” It’s exactly the kind of bug you’d expect NSA to be on the lookout for, since documents leaked by Edward Snowden confirm that the agency has long been engaged in an “aggressive, multi-pronged effort to break widely used Internet encryption technologies”. In fact, that effort appears to have yielded a major breakthrough against SSL/TLS way back in 2010, two years before the Heartbleed bug was introduced — a revelation that sparked a flurry of speculation among encryption experts, who wondered what hidden flaw the agency had found in the protocol so essential to the Internet’s security. On Friday, Bloomberg News reported that Heartbleed had indeed been added to NSA’s arsenal almost immediately after the bug appeared, citing two anonymous sources “familiar with the matter”. Within hours, the intelligence community’s issued an unusually straightforward denial, free from the weasely language intelligence officials sometimes employ to almost-but-not-quite deny allegations. As the statement pointed out, the federal government itself “relies on OpenSSL to protect the privacy of users of government websites and other online services.” If NSA had found such a serious security hole, the agency would have disclosed it, officials asserted. Moreover, the White House has recently “reinvigorated” the “Vulnerabilities Equities Process” designed to ensure that newly-discovered exploits aren’t kept secret any longer than is absolutely necessary for vital intelligence purposes. As Indiana University cybersecurity expert Fred Cate points out, however, the intelligence community’s track record of misleading statements about its capabilities means even such a seemingly unambiguous denial has been greeted with some skepticism. And even if we take that denial at face value when it comes to Heartbleed, reports of NSA’s 2010 “breakthrough” suggest they may be sitting on other, still-undisclosed vulnerabilities. Here, however, is the really crucial point to recognize: NSA doesn’t need to have known about Heartbleed all along to take advantage of it. The agency’s recently-disclosed minimization procedures permit “retention of all communications that are enciphered.” In other words, when NSA encounters encryption it can’t crack, it’s allowed to — and apparently does — vacuum up all that scrambled traffic and store it indefinitely, in hopes of finding a way to break into it months or years in the future. As security experts recently confirmed, Heartbleed can be used to steal a site’s master encryption keys — keys that would suddenly enable anyone with a huge database of encrypted traffic to unlock it, at least for the vast majority of sites that don’t practice what’s known as “forward security”, regularly generating new keys as a safeguard against retroactive exposure. If NSA moved quickly enough — as dedicated spies are supposed to — the agency could have exploited the bug to steal those keys before most sites got around to fixing the bug, gaining access to a vast treasure trove of stored traffic. That creates a huge dilemma for private sector security experts. Normally, when they discover a vulnerability of this magnitude, they want to give their colleagues a discreet heads-up before going public, ensuring that the techies at major sites have a few days to patch the hole before the whole world learns about it. The geeks at NSA’s massive Information Assurance Directorate — the part of the agency tasked with protecting secrets and improving security — very much want to be in that loop. But they’re part of an organization that’s also dedicated to stealing secrets and breaking security. And security companies have been burned by cooperation with NSA before: the influential firm RSA trusted the agency to help them improve one of their popular security tools, only to discover via another set of Snowden documents that the spies had schemed to weaken the software instead. Giving NSA advance warning of Heartbleed could help the agency protect all those government systems that were relying on OpenSSL to protect user data — but it also would aid them in exploiting the bug to compromise privacy and security on a massive scale in the window before the fix was widely deployed. Little wonder, then, that the President’s Review Group on Intelligence and Communications Technologies — informally known as the Surveillance Review Group — dedicated a large section of its recent report, Liberty and Security in a Changing World, to this basic tension. “NSA now has multiple missions and mandates, some of which are blurred, inherently conflicting, or both,” the Review Group wrote. “Fundamentally NSA is and should be a foreign intelligence organization” rather than “an information assurance organization.” Because Internet security depends on trust and cooperation between researchers, the mission of a security-breaking agency is fundamentally incompatible with that of a security-protecting agency. It’s time to spin off NSA’s “defense” division from the “offense” team. It’s time to create an organization that’s fully devoted to safeguarding the security of Internet users — even if that might make life harder for government hackers. Julian Sanchez is a research fellow at the Cato Institute.

Title:Ten Ways the Income Tax Harms Civil Liberties
Date:Fri, 11 Apr 2014 11:29 EDT
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Description:Chris Edwards The Internal Revenue Service scandal over the targeting of conservative groups has highlighted the agency’s power to obstruct our political freedoms. Filing taxes every April also drives home how the government reduces our freedom. Chief Justice John Marshall famously observed in 1819 that “the power to tax involves the power to destroy.” That’s true of any tax, but the massive federal income tax harms civil liberties much more than is necessary to raise the needed funds. “Congress should pursue major tax reforms that not only unshackle the economy but also expand our civil liberties.” Some members of Congress have been talking about tax reform. But their efforts so far have been accounting-driven exercises that simply tweak the monstrous code. Instead, Congress should pursue major tax reforms that not only unshackle the economy but also expand our civil liberties. Here are 10 freedom-crushing aspects of the income tax that policymakers should tackle: 1. Complexity and Ambiguity. Certainty in the law is a bulwark against arbitrary and abusive government. But there is no certainty under the income tax because it has an inherently complex base that is shot full of loopholes. Many studies have found that citizens, tax professionals, and the IRS all commit a large number of errors on their tax calculations. Looking at these studies, Professor David Vance of Rutgers University recently concluded that “the tax code is so complex that it is unconstitutionally vague,” likely violating due process under the Fifth Amendment. 2. Huge Size and Instability. Citizens are required to know the laws and comply with them. Yet federal tax rules are massive in scope and constantly changing. Tax laws, regulations, and related rules span 74,608 pages, according to CCH Inc. The number of pages has more than tripled since President Jimmy Carter called the tax system “a disgrace to the human race.” CCH estimates that there have been almost 5,000 changes to the federal tax code over the last decade. 3. Vertical Inequality. Although equality under the law is a bedrock American principle, the income tax treats citizens very unequally. Vertical inequality means different tax burdens on citizens of different incomes. For example, households earning between $100,000 and $500,000 pay an average income tax rate two and a half times higher than those earning between $50,000 and $100,000. Such inequities violate the spirit of equal protection under the Constitution. 4. Horizontal Inequality. Even people with similar incomes are treated unequally by the many exemptions, deductions, credits of the income tax. For example, the tax differences between homeowners and renters with the same incomes can be thousands of dollars because of the mortgage interest deduction. 5. Lack of Privacy. The income tax generates a large invasion of our privacy. The IRS gains access to mortgage records, credit card data, bank records, college tuition data, medical expenses, and much else. The broad IRS authority to obtain records without court supervision was referred to by the Supreme Court in 1964 as “a power of inquisition.” A huge and growing problem with the IRS amassing all this data is identity theft. The IRS has had to assign more than 3,000 agents to deal with this crime. 6. Denial of Due Process. In addition to the tax code’s complexity, the Fifth Amendment right to due process is ignored in other respects under the income tax. Due process requires that government provide accused citizens a clear notice of a claim against them and allow them a hearing before executing enforcement action. But the IRS engages in many summary judgments, and enforces them prior to any judicial determinations. 7. Shifting the Burden of Proof. For non-criminal tax cases — the vast majority of cases — the tax code reverses the age-old common law principle that the burden of proof rests with the accuser. Except in some narrow circumstances, the IRS does not have to prove the correctness of its determinations. When the IRS makes erroneous assessments — as it often does — citizens carry the burden to prove that they are wrong. 8. No Trial by Jury in Tax Court. Despite Sixth and Seventh Amendment guarantees of trial by jury, the federal tax system sidesteps such protections. To contest an IRS tax calculation prior to assessment, one must file a petition in the U.S. Tax Court. But since this is an administrative court, not an Article III court, no jury trial is required. To obtain a jury trial and related rights for civil tax cases, one must file suit in a U.S. District Court. But before that can happen, the alleged tax, penalties, and interest must be paid in full. 9. Unreasonable Searches and Seizures. In most situations, the Fourth Amendment guarantees that, before the government can search private property and seize records, it must demonstrate to a court that there is probable cause to believe that lawless conduct exists. However, the IRS’s summons authority under tax code section 7602 allows it to obtain records of every description from any person without showing probable cause and without a court order. In recent years, there has also been a big expansion in information reporting required by the IRS and in its computer searching for personal records. 10. Forced Self-Incrimination. The requirement to file tax returns under penalty of perjury operates to invalidate the Fifth Amendment protection against self-incrimination. Citizens face a legal dilemma. On the one hand, refusing to file a return would expose a citizen to prosecution for failure to file. On the other hand, disclosing information sought in tax returns constitutes a waiver of Fifth Amendment protections. The IRS can and does release that information to federal, state, and local agencies for both tax and non-tax law enforcement purposes. What should Congress do about all this? The first thing should be to greatly cut the government’s size to reduce its rapacious demand for our money. The next thing should be to proceed with a pro-growth and pro-freedom tax overhaul, which optimally means scrapping the income tax altogether in favor of a low-rate, consumption-based tax system. Chris Edwards is editor of www.DownsizingGovernment.org at the Cato Institute.

Title:Three Things You Don't Know about Money in Politics
Date:Fri, 11 Apr 2014 11:23 EDT
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Description:Trevor Burrus Many are angry after the Supreme Court’s decision last week in McCutcheon v. FEC, which struck down the limit on how much someone can contribute in total to all candidates combined. In the current political climate, few things seem to inflame the passions like the ominous specter of “money in politics.” There are also few areas where people are more misinformed. Here are three truths about campaign spending that may calm some nerves. Campaign spending increases voter knowledge. “Money in politics elicits ire, but rarely does that ire come with understanding.” This may seem counter-intuitive, but imagine a world where contribution limits to candidates were set at $50, or even $100. It would take a long time to amass enough money to run just a single ad telling voters your name and ideals. Challenging an incumbent under those conditions would be nearly impossible. This is one reason why incumbents tend to like campaign finance laws. Moreover, many studies have shown that ads increase voter knowledge, interest, and even turnout. One study concluded that “exposure to campaign advertising can produce citizens who are more interested in a given election, have more to say about the candidates, are more familiar with who is running, and are ultimately more likely to vote.” Money doesn’t buy elections. Money is important in elections, particularly when challenging an entrenched incumbent with name recognition and media presence. For a House candidate, the first $500,000 or so is absolutely crucial. After that, the returns diminish sharply, and each next dollar spent is worth less than the last. However, dumping massive amounts of cash into an election certainly does not guarantee victory. Take former eBay CEO Meg Whitman, who spent $144 million of her own money only to lose the California gubernatorial race to Jerry Brown. Or conservative donor Sheldon Adelson, who spent $42 million in 2012 backing nine candidates with only one of them winning. Or the Koch brothers, who spent $33.5 million on ads attacking Obama, and we know how that turned out. True, the higher-spending candidate usually wins the election, but did he/she winbecause of the money? That’s a more difficult question. Donors like to back winners, and they will often give to candidates just because they think they will win. This is especially true when low contribution limits make it difficult for a single donor to make a big difference in the outcome. Rather than giving a small amount to someone who will lose anyway, they give to the leading candidate. Candidates in safe districts, districts where the margin of victory all but ensures that one party will win, still get donations. According to election guru Nate Silver, the number of landside districts has doubled since 1992. There are now 242 of them. Candidates who oppose the entrenched party or incumbent receive very few donations and party support, thus essentially ensuring that, in those 242 districts, the “bigger spending” candidate will win. But it is the demographics and gerrymandering that cause those victories, not the spending. Political opinions do not significantly correlate with wealth. Although it seems to be a common and fervently held belief, wealth and socioeconomic status do not effectively predict political beliefs. There are poor Democrats and rich Democrats, same as Republicans. For every Sheldon Adelson there’s a George Soros. For every Charles Koch there’s a Warren Buffett. There is nothing inherent about having money that makes someone a Republican. However, over the past two election cycles, heavy spenders backing GOP candidates have garnered much of the hatred and headlines. But it is easy to imagine a world where pronounced Democratic dissatisfaction with a Republican president creates a fundraising bonanza for Democrats. In fact, we saw that when Obama broke fundraising records in 2008. In one recent Gallup poll, the top 1% are 33% self-identified as Republicans and 26% self-identified as Democrats, a slight, but not a strong, tilt toward Republicans. If we include the leanings of independents, the Gallup poll found that 57% of the “nation’s wealthiest” associate themselves with the GOP. This slight lean towards self-identified Republicans, however, is difficult to disentangle from the fact that people in general are far more likely to self-associate as conservative rather than liberal. People apparently just don’t like to call themselves liberals. In terms of policy preferences, however, it’s long been known that there is little difference along the socioeconomic spectrum in support for policies that are arguably in the self-interest of either the poor or the rich. There is no evidence that shows that freeing up campaign spending will inevitably create policies that prefer the wealthy. Many think this is naive because “obviously” our policies prefer the wealthy, despite the fact that 70% of federal spending goes to the poor and middle class and the richest 10% pay 53% of all federal income taxes. If the debate is just about what policies benefit the poor or rich, then we’re back to the same policy debates that have been going on for decades but couching them in discussions about money in politics. Money in politics elicits ire, but rarely does that ire come with understanding. Blaming money in politics for perceived policy failures also provides a convenient explanation for why the world doesn’t align with your policy preferences. Thus, many people believe that stopping political spending and shutting up “outside influences” is the best way to create desired policy change. This motivation should be seen for what it is: censorship. The First Amendment exists to protect political speech of all types, including, and especially, “wrong” speech. You can disagree with what someone says but still defend to the death his right to say it, even if it is Sheldon Adelson. Trevor Burrus is a Research Fellow at the Cato Institute’s Center for Constitutional Studies.

Title:Whistleblowers Need Protection
Date:Fri, 11 Apr 2014 09:23 EDT
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Description:Doug Bandow Zimbabwe’s Robert Mugabe is a corrupt authoritarian. The United Nations is a wasteful, inefficient organization that tolerates corrupt authoritarians. Unfortunately, the two don’t make beautiful music together. Not everyone at the U.N. is corrupt. One hero is Georges Tadonki, a Cameroonian who for a time headed the U.N. Office for the Coordination of Humanitarian Affairs in Zimbabwe. The others are three judges in a United Nations Dispute Tribunal who, last year, ruled for Tadonki in a suit against the international organization. Soon we will find out if members of a U.N. appeals panel possess equal courage. That ruling is expected soon with rumors circulating that these judges might reverse course and absolve the organization of misconduct. “Something is very wrong with the U.N.” In 2008, President Robert Mugabe, who took power in 1980, and ZANU-PF, the ruling party, were employing violent intimidation to preserve their control. At the time Tadonki had been on station for six years and predicted epidemics of both cholera and violence. Journalist Peta Thornycroft interviewed Tadonki at the time, concluding that the OCHA official was unafraid to speak the truth, making him “another kind of U.N. voice — one that I was not used to in Zimbabwe.” Unfortunately, U.N. country chief Agostinho Zacarias apparently was a more traditional international bureaucrat and dismissed Tadonki’s warnings. By the end of the year 100,000 people had been infected with cholera and thousands had died. During the election campaigns hundreds also had been killed by government thugs, who succeeded in derailing democracy. In April 2008, Tadonki warned U.N. headquarters that the country team was “not prepared to face the consequences of an emergency silently in the making” and hesitantly “responded to acts of political violence.” Zacarias denied the charges as Zimbabwe descended into deadly chaos. Naturally, no good deed went unpunished. After extended discord between the two U.N. officials, Tadonki was fired in January 2009. There was little doubt that the action was retaliation for being right and embarrassing Zacarias — who now serves the U.N. in South Africa. The controversy demonstrates that something is very wrong with the U.N. system. Observed writer Armin Rosen: “This case involves more than just a single U.N. bureaucrat enjoying a disturbingly close relationship with one of the most oppressive governments on earth. The U.N. system also actively abetted a toxic organizational status quo in Zimbabwe, even when it meant ruining the career of an employee who the [review U.N.] tribunal found to be a talented humanitarian professional and a courageous whistleblower — and even if it meant putting thousands of Zimbabweans’ lives in danger.” Tadonki decided to fight, though he had to ask the international law firm Amsterdam & Peroff to handle the litigation on a pro bono basis. Last year, the U.N. Dispute Tribunal based in Kenya heard his case, and Judges Vinod Boolell, Nkemdilim Izuako and Goolam Merran issued their 104-page judgment. They concluded “that the applicant was not, at all material times, treated fairly and in accordance with due process, equity and the core values of the Charter of the Organization” and that OCHA management ignored the U.N.’s “humanitarian values.” The tribunal ordered the U.N. to apologize for its misbehavior, investigate the mistreatment of Tadonki, hold his superiors accountable for their misconduct, cover Tadonki’s litigation costs, pay past salary through the judgment date, and provide $50,000 in “moral damages for the extreme emotional distress and physical harm suffered by the applicant.” Explained the judges: “This case has brought to light not only managerial ineptitude and highhanded conduct but also bad faith from the top management of OCHA. This mismanagement and bad faith were compounded by a sheer sense of injustice against the applicant who was hounded right from the beginning.” Perhaps even worse was the larger environment in which this misconduct occurred. Observed the tribunal: “There was a humanitarian drama unfolding, and people were dying. Part of the population had been abandoned and subjected to repression. The issue between Tadonki and Zacarias was to what extent these humanitarian concerns should be exposed and addressed and the risk that there was of infuriating the Mugabe government.” The tribunal’s conclusion is devastating: “The political agenda that RC/HC Zacarias was engaged in with the Government of Zimbabwe far outweighed any humanitarian concerns that OCHA may have had.” Of course, “The U.N. and Zacarias’s chief responsibility should have been to Zimbabwe’s embattled civilian population. Instead, both failed to live up to their obligations — even as they were conspiring against someone who had exceeded them.” But the final resolution depends on the appellate process, which is approaching its decision. Hopefully, Georges Tadonki and the three tribunal judges are not the only U.N. officials willing to do what’s right, irrespective of cost. Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan.


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