A Wall Street Journal Column Understates the Size of U.S. Manufacturing
The Wall Street Journal’s December 1 “Ahead of the Tape” column, by Kelly Evans, says “manufacturing is a relatively small part of the economy; It employs about 9% of the work force and accounts for about the same percentage of GDP.” Actually, manufacturing accounts for about 12 percent of nominal GDP. But that, too, is misleading.
Chicago Fed economist William Strauss explains why neither U.S. manufacturing’s share of employment nor its share of GDP captures the actual strength of manufacturing:
Between 1950 and 2007 (prior to the severe recession), manufacturing output was just over 600% higher while over the same period growth in real GDP of the U.S. was only a slightly lesser 560%. Yet, the manufacturing share of GDP declined markedly over this period as measured in current dollar value of output. In 1950, the manufacturing share of the U.S. economy amounted to 27% of nominal GDP, but by 2007 it had fallen to 12.1%. How did a sector that experienced growth at a faster pace than the overall economy become a smaller part of the overall economy? The answer again is productivity growth. The greater efficiency of the manufacturing sector afforded either a slower price increase or an outright decline in the prices of this sector’s goods. As one example, inflation (as measured by the Consumer Price Index) averaged 3.7% between 1980 and 2009, while at the same time the rise in prices for new vehicles averaged 1.7%. So while the number (and quality) of manufactured goods had been rising over time, their relative value compared with the output of other sectors did not keep pace. This allowed manufactured goods to be less costly to consumers and led to the manufacturing sector’s declining share of GDP.
Those who imagine “we don’t make anything anymore,” as Donald Trump claims, don’t grasp the magnitude of America’s industrial productivity gains.
In reality, the U.S. is by far the world’s largest manufacturer, with China trailing by 22 percent according to U.N. data for 2008 and arguably much more when we’re not in recession.
On Happiness
The financial crisis and global warming have reinforced an age-old criticism of our traditional ways of measuring wealth, and a number of alternative indexes have been proposed that would instead measure people’s well-being and environmental sustainability.
There are problems with using GDP. It involves an incredible amount of guesswork; and even if it were perfect, it would be bizarre to use production of goods and services as the only yardstick to evaluate our societies. But finding problems is one thing; it is something completely different to find an alternative that is better. Any sort of well-being index would require agreement on what well-being is, and there is a risk that governments would be tempted to find a one-size-fits-all standard and try to make us all wear it.
In a new paper I examine some of the proposed alternatives and they all beg the question about well-being by defining it as the result of the particular kinds of policies that they happen to prefer. Bhutan’s famous National Happiness Index, for example, defines it partly as a strong, traditional culture, and has used it to oppress minorities. And the Commission on the Measurement of Economic Performance and Social Progress, created by French president Nicolas Sarkozy and led by economist Joseph Stiglitz, selectively chooses measures to show that France is richer in relation to the United States than it would otherwise be.
The advantage of GDP is precisely what it has often been criticized for — that it is a narrow and value-free measure. It does not even try to define well-being, and so fits liberal, pluralistic societies in which people have different interests, preferences and attitudes toward well-being. It tells us what we can do, but not what we should do; and since it measures what we can do, it also correlates with most of the things most people want from life: better health, longer lives, less poverty and even happiness. The latest research shows not only that people in rich countries are happier but also that countries grow happier as they become richer.
Read the paper here. Read Will Wilkinson’s Policy Analysis on happiness research here.
Robert H. Frank’s Non-argument for Higher Tax Rates
In The New York Times, Robert H. Frank of Cornell University repeated his perpetual argument that high tax rates on the rich do no harm to demand (not supply) because the rich can just draw down savings, year after year, to pay more taxes yet maintain a showy lifestyle. Then he resorts to the old trick of asserting there is no “credible” evidence that tax disincentives and distortions have any ill effects on the economy.
Frank asks, rhetorically, if an increase in top tax rates might reduce economic growth. And he replies, “There’s no credible evidence that it would.” This is a timeworn trick among people too intellectually lazy to look for a single academic study or statistical fact.
As I have shown before, Mr. Frank has a history of abusing bogus statistics culled from dubious sources.
To simply assert “there’s no credible evidence,” however, is much worse than distorting the facts.
It amounts to claiming that he has the ability and the right to suppress facts not to his liking.
Over the past year I have repeatedly cited several major studies showing that pushing the highest marginal tax rates even higher is extremely dangerous to economic growth; Stanford economist Michael Boskin lists half a dozen of them in his latest Wall Street Journal op-ed.
For Mr. Frank to assert that such studies are not “credible” simply reveals his own inability to find credible evidence to support his own untenable position.
The President’s Fiscal Commission: It’s a Start
Today POLITICO Arena asks
Will implementing President Obama’s Fiscal Commission recommendations require that everyone take a hit?
My response (with tax insights from Jagadeesh Gokhale):
President Obama’s Fiscal Commission Report offers a useful start in reducing our budget deficits and national debt, but it hardly goes far enough. As several of my Cato colleagues have just noted here, here, here, and here, the report recognizes, to its credit, that our corporate income tax structure puts U.S. corporations at a considerable competitive disadvantage against their foreign competitors. And the report keeps military spending cuts on the table, even if there is much more to be cut. Yet by proposing a reduction in government spending from 24.3 percent of GDP today to 21.8 percent over the next 15 years — total federal spending as recently as 2000 was just 18.4 percent of GDP – it plays the old Washington game of calling a slower increase than previously projected a “cut.”
As for taxes, this report should be read in the context of a powerful argument in last Friday’s Wall Street Journal to the effect that over the past six decades, tax revenues as a percentage of GDP have averaged just under 19 percent, regardless of the top marginal personal income tax rate or whether taxes were cut or raised. What this suggests is that low tax rates spur income growth to leave the government’s revenues undiminished over the long-term. High tax rates do the opposite. It doesn’t take a large leap of faith to believe that this effect would be stronger for those who earn more and pay more in taxes. Indeed, among high earners are the nation’s business leaders – innovators who create new products and jobs – who would respond positively to the growth opportunity provided by a stable, low-tax-rate environment. So those who believe that we help ourselves by more heavily taxing the rich need to ask themselves whether it might not be better to cut rates and keep them stable instead. Wouldn’t that promote a robust economy and lift all boats – with the government continuing to generate 19 percent in revenues?
None of this has anything to do, of course, with whether our current out-of-control federal government is constitutionally authorized to do all it is doing. But it’s a start toward returning the government to within its constitutional limits. Had those limits been respected – as the Framers understood, unlike New Deal progressives — we wouldn’t be in this mess.
Virginia Obamacare Lawsuit Dismissed
No, not the lawsuit brought by Virginia Attorney General Ken Cuccinelli (in which Cato has been filing amicus briefs), but rather one brought by Jerry Falwell’s Liberty University. Most notably, the district judge found the individual mandate to be a lawful exercise of Congress’s powers under the Commerce Clause because
individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market…. Far from ‘inactivity,’ by choosing to forgo insurance, Plaintiffs are making an economic decision to try to pay for health care services later, out of pocket, rather than now, through the purchase of insurance. As Congress found, the total incidence of these economic decisions has a substantial impact on the national market for health care by collectively shifting billions of dollars on to other market participants and driving up the prices of insurance policies.
This analysis echoes that of the Michigan judge who granted the government’s motion to dismiss the Thomas More Legal Center’s lawsuit in October – and is fatally flawed because everything is an “economic decision” that “substantially affects the national market” in something. If that’s the rationale upon which the Supreme Court ultimately upholds Obamacare, then we are left quite literally with no principled limits on federal power. Something tells me it won’t be so simple, however, even if the forces of darkness big, “self-checking” government prevail.
Nevertheless, the White House blog is understandably delighted with such rulings, trumpeting yesterday’s decision as yet another on an inexorable and inevitable march to the full vindication of an unprecedented assertion of federal power. (Question: Was nobody there paying attention to what voters said about all that November 2?)
In any event, as I said in a recent blog post and op-ed, nobody should yet declare victory or concede defeat. There will be many, many rulings yet, both at the trial court level and on appeal. This will not end until the Supreme Court rules, most likely in June 2012. But if you’re keeping track, the next major event is a December 16 summary judgment hearing in Pensacola in the Florida-led 20-state lawsuit — and we should also soon see a final ruling from the Cuccinelli case right before or after Christmas. Expect the White House to be a bit less chipper about these events.
Overwrought On START
It is unclear whether New Strategic Arms Reduction Treaty (START) will make it to the Senate floor this year or if there are 67 votes for it if it does. According to the White House and arms control boosters, that uncertainty endangers us all by leaving Russia’s nuclear arsenal unmonitored and undermining our non-proliferation agenda. According to pundits, New START’s failure to pass in the lame-duck would be a grievous political wound for Obama adminstration, which is struggling to buy enough Republican votes for ratification.
In an op-ed out today on the National Interest‘s website, Owen Cote and I say this talk is mostly hot air. New START just isn’t that big a deal. We write:
[New START] would provide minor increases in intelligence and Russian goodwill. But passing it means handing taxpayers a substantial new tab on top of what we already pay for our bloated nuclear weapons complex. And rather than reducing the arsenal’s size and cost, the treaty props it up…. The real impact of New START is distraction. By faking a drawdown, the treaty keeps Americans from noticing that deterring our enemies requires nothing like the force structure we plan to retain.
Bright Spots in Fiscal Commission Report
President Obama’s Fiscal Commission has produced a serious and sobering analysis of the government’s budget mess, and it provides some of the needed solutions. Three of the report’s main themes are on target: the need to make government leaner, the need to cut business taxes to generate economic growth, and the need to impose tighter budget rules to discipline spending.
The report rejects the view of many Democratic leaders that the welfare state built over the last 80 years must be defended against any and all budget cuts. “Every aspect of the discretionary budget must be scrutinized, no agency can be off limits, and no program that spends too much or achieves too little can be spared. The federal government can and must adapt to the 21st century by transforming itself into a leaner and more efficient operation.” How lean the government should be, and how many agencies to eliminate, will be the central fiscal debate in coming years. Downsizing government is the order of the day.
The report recognizes the need to spur economic growth, particularly by cutting the corporate tax rate. “The corporate income tax, meanwhile, hurts America’s ability to compete… statutory rates in the U.S. are significantly higher than the average for industrialized countries … and our method of taxing foreign income is outside the norm…. the current system puts U.S. corporations at a competitive disadvantage against their foreign competitors.” The report recommends cutting the 35 percent federal corporate tax rate to 28 percent or less to respond to the Global Tax Revolution and to “make America the best place to start a business and create jobs.”
Finally, the report suggests that Congress impose new procedures to enforce budget restraint. However, the rules suggested by the commission are complex and not tight enough. It would be simpler and more powerful to impose a cap on overall federal spending. For example, a law could require that the government’s overall budget not grow faster than general inflation each year else the president would sequester spending across-the-board. Such a cap would be easy for the public to understand and enforce.
In sum, the report provides a useful menu of reform options that incoming members of a more conservative Congress can pursue next year. We need bigger spending cuts than the commission has laid out—as I’ve outlined in this balanced-budget plan—but the commission deserves credit for spurring a national discussion on how to downsize the federal government.
Deficit Reduction Commission Says Military Spending Can and Must be Cut
President Obama’s Fiscal Commission’s report is out and they have wisely kept military spending on the table. Having not seen the accompanying list of specific cuts, it seems that rather than micromanage DoD’s decisions with respect to which weapons systems to cut or keep, the commissioners have laid down a different marker: find the cuts that make sense, but understand that the business-as-usual of the past decade is over.
The report fixes on a number of spending cuts and reforms that Benjamin Friedman and I call for in the Cato Policy Analysis “Budgetary Savings from Military Restraint” including cuts to the civilian workforce (see recommendation 1.10.4). They also hold fast to the proposition that all spending must be on the table, and reject out of hand the notion that military spending must be held sacrosanct. This is bad news for the “defending defense” crowd.
I am not going to comment on the Commission’s other proposals with respect to taxes, social security, health care, etc. As for specific military spending cuts, this report is less detailed than the preliminary report issued a few weeks ago by Co-chairs Bowles and Simpson. It is appropriate, however, to task the Department of Defense with identifying additional savings (as they do in recommendation 1.11). Responsible cuts can be made if the Pentagon and the White House adopt a strategy of restraint, one that husbands American resources, focuses on a few core missions vital to U.S. national security, and requires other countries to take primary responsibility for their defense.
Washington’s Dishonest Budget Math
The Chairmen of President Obama’s Fiscal Commission have a new draft proposal that is filled, according to Reuters, with “sharp spending and benefit cuts.”
That’s music to my ears, so I quickly flipped to the back of the report in hopes of finding hard numbers showing that the federal government will be smaller in future years.
Much to my chagrin, it turns out that the federal government will increase by about $1.5 trillion between 2010 and 2020 according to the Commission’s numbers. Here’s a chart based on the data from page 57.
As I explain in the video below, this disconnect between supposed spending cuts and actual spending increases is the result of politicians creating a system where a spending increase can be called a “spending cut” if outlays don’t climb as fast as previously planned. This “baseline” or “current services” budgeting is a great gimmick for the politicians since they can simultaneously give more money to special interest groups while also telling voters that they are cutting the budget.
This does not mean that the folks at the Fiscal Commission are being deliberately dishonest. This process has been in use for decades and many budget wonks routinely rely on this common practice without giving any thought to whether it misleads voters.
And there are good reasons to collect “current services” data. Those numbers tell lawmakers how much spending has to increase if they, for instance, leave entitlement programs on autopilot (i.e., more senior citizens automatically leading to more Social Security spending).
Nonetheless, the debate about federal budget policy should be honest. If the Fiscal Commission thinks spending should increase at about twice the rate of inflation, and they want higher taxes to finance that spending growth, they should openly argue for that position. And if the hard left wants spending to increase three times faster than inflation, as it has during the era of Bush-Obama profligacy, they should openly make the case for why America should be more like France.
Still Not Serious About Cutting Spending
The howls of outrage that have greeted the report of the bipartisan National Commission on Fiscal Responsibility and Reform shows two things: 1) most Democrats have no interest in reducing the size and cost of government; and 2) few Republicans are actually serious about it.
From the initial reaction, one would think that the Commission has slashed government to the bone, throwing the elderly, poor and sick into the street. In reality, the Commission report is far from a radical document. It proposes a reduction in government spending from 24.3 percent of GDP today to 21.8 percent over the next 15 years. That’s a start. But as recently as 2000 total federal spending was just 18.4 percent of GDP — and people were hardly dying in the streets during the Clinton years.
In fact, the Commission doesn’t actually “cut” federal spending. Under the Commission’s proposal, it would rise from roughly $3.5 trillion today to more than $5 trillion by 2020. So, under the terrible “cuts” that the Commission is recommending, federal spending would still increase faster than inflation. This is the old Washington game of calling a slower increase than previously projected a “cut.”
But Democrats appear unwilling to support even this modest slowing in the growth of government. Instead they call for simply raising taxes to support a virtually unlimited amount of federal spending. Republicans, meanwhile, talk about reducing government, but fall back on bromides about reducing waste, fraud, and abuse when faced with the need to make specific cuts.
If we were serious about reducing the size, cost and intrusiveness of government, we should roll back spending to Clinton-era levels. (My colleague Chris Edwards has shown how that can be done.) That would eliminate the need for the tax increases that the commission proposes.
Alas, we still await political leadership with that amount of courage.
The CPSC’s Defective New Complaints Database
We are told constantly that government can play a beneficial role in the marketplace by taking steps to make sure consumers are more fully informed about the risks of the goods and services they use. But what happens when the government itself helps spread health and safety information that is false or misleading? That question came up recently in the controversy over New York City’s misleading nutrition-scare ad campaign, and it now comes up again in a controversy over a new database of complaints about consumer products sponsored by the federal Consumer Product Safety Commission (CPSC).
As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a “publicly available consumer product safety information database” compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:
…[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits “even if a manufacturer has already provided evidence the claim is inaccurate,” as noted by Carter Wood of the National Association of Manufacturers’ “Shopfloor” blog….
Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the “official” CPSC website as [support for] their theories that a product in question caused vast harm. “The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company,” said [Commissioner Nancy] Nord.
Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: “under the majority’s approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to ‘salt’ the database, from those of actual consumers with firsthand experience with a product.” Commissioner Northup has published posts criticizing the regulations for their definitions of who can submit a report, who counts as a consumer, and who counts as a public safety entity.
For those interested in reading further, Rick Woldenberg, a leading private critic of the law who blogs at AmendTheCPSIA.com, has critically commented on the politics of the proposal here, here, here, here, and here. More coverage: ShopFloor with followups here and here, New York Times, Sean Wajert/Mass Tort Defense. I’ve been blogging for the past two years at my website Overlawyered about the wider problems with the CPSIA law, including its effects on books published before 1985, thrift stores, natural wooden toys, ballpoint pens, bicycles, plush animals, Irish dance costumes, rocks used in science class and many more. Most of these problems remain unresolved thanks to the inflexible wording of the law as well as, sometimes, the unsympathetic attitude of the commission majority. I’ve heard that bringing overdue investigative oversight to the ongoing CPSIA disaster is shaping up as a priority for many incoming lawmakers on the (newly Republican-led) House Energy and Commerce Committee, whose outgoing chair, California Democrat Henry Waxman, is closely identified with the law and its consumer-group backers.
Rep. Kingston’s Spending Cut Plan
An indicator of the incoming House Republican majority’s seriousness about cutting spending will be which members the party selects to head the various committees.
Many of the members in line to chair committees leave a lot to be desired from a limited government perspective (see here and here). In particular, the top candidates in line to chair the critical House Appropriations Committee, Reps. Jerry Lewis (R-Calif.) and Hal Rogers (R-Ky.), are about as inspiring as re-heated meatloaf when it comes to their potential for pushing serious spending reforms.
According to the Wall Street Journal, appropriator Jack Kingston (R-Ga.), is eyeing the chairman’s gavel even though he’s only fifth in line in terms of seniority. Kingston has put together a spending restraint plan in PowerPoint for consideration by the 26 member Republican Steering Committee, which will decide on committee chairs.
Although the Journal notes that Kingston is “no spending virgin,” there is a lot to like about his plan, which is promisingly entitled “Changing the Culture: A New Vision for the House Appropriations Committee.”
Here are my thoughts on the plan’s contents:
- One slide shows a list of “Big Stuff” and places at the top “State Addiction to the Federal Government.” The language is perfect and indicates that Kingston recognizes that federal aid to the states is a significant issue that needs to be addressed. Reinstituting “fiscal federalism” is one of the chief principles of reform addressed on the Downsizing Government website.
- The same slide acknowledges the trillion dollar cost of the wars in Afghanistan and Iraq. This inclusion perhaps signals that Kingston is prepared to get serious about reining in defense spending, unlike many Republicans.
- Kingston proposes new spending caps that would work to eventually reduce total federal spending to 18 percent of GDP. He notes that “This approach would require Congress to focus on the actual problem of spending, as opposed to deficits, which are a symptom.” Only interest on the debt would be off limits from sequestration should Congress fail to adhere to the spending caps.
- Kingston calls federal grants “the new earmarks” and singles out the $7.2 billion broadband grant program for criticism, noting that it “pay[s] companies to do what they would do on their own.” As I recently explained, eliminating earmarks but keeping the federal grant programs that fund the same activities would amount to a Pyrrhic victory.
- Kingston calls for more “budget hawks” on the appropriations committee, and singles out spending reformer Rep. Jeff Flake (R-Ariz.) for inclusion on the committee. He also calls for getting “members off subcommittees in which they are unable to take hard votes.” Amen. If Republicans want to cut spending, then they need to put members on the committees who will actually vote to do it.
The Journal explains that the GOP leadership, in particular incoming House Speaker John Boehner, had better take Kingston’s candidacy seriously:
Officially, committee chairs are selected by the 26 or so person GOP Steering Committee, but Mr. Boehner has five votes on the panel and he can block anyone from getting the nod. A Steering Committee decision can be overturned by a vote of the full GOP House conference, and the leadership should worry that selecting someone like Mr. Rogers could lead to a rank-and-file revolt.
Republicans claim to be the party of fiscal probity and that they’ve learned from their demise in 2006. Mr. Kingston’s proposals are the kind of creative thinking that Republicans are going to need to carry out the principles and agenda they say they believe in.
When tea party voters helped give the Republicans a second chance at reining in government spending, they didn’t have in mind re-heated meatloaf – they want steak. Boehner and the House GOP leadership would be wise to oblige, or else these voters might dine elsewhere in 2012.
Warner Brothers Distributes “The Cartel”
Early this year, when I heard that Paramount had picked up the education documentary “Waiting for Superman” after its award winning appearance at the Sundance Film Festival, I was honestly surprised. The film is not kind to the status quo education monopoly in this country, and Hollywood does not have a history of indicting that system as a whole. But its director was an Obama-supporting, “Inconvenient Truth” shooting Democrat who perhaps, I thought, had made the message palatable to the Left Coast establishment. It didn’t necessarily portend a fundamental change in Hollywood’s tastes.
But that was months ago. Times change. Yesterday I learned from Bob Bowdon, director of the brutally candid education expose “The Cartel” that his film has been picked up for distribution by Warner Brothers Studios. It’s now available not just for sale but instant viewing on Amazon.com.
Remember 2010. It’s the year Americans finally started to tear down education’s Berlin Wall.
Everything Old Is New Again
With America in trouble, I’ve been pleased to see some fresh, innovative thinking emanating from Washington. What can brighten the country’s future?
- Anne Applebaum proposes that
Institutions should do what they are good at. And the expansion of NATO is one of the few true post-Cold-War foreign-policy success stories…
We could continue that process. The stakes are lower — 2010 is not 1990, and the countries outside NATO are poorer and more turbulent than even those that have recently joined. Nevertheless, the very existence of a credible Western military alliance remains — yes, really — an encouragement to others on Europe’s borders. This is a uniquely propitious moment. Right now there is a pro-Western government in Moldova; Ukraine’s geopolitics are up in the air; elections are due to take place in Belarus in December. We in the West might have gone sour on ourselves, but Europeans on our borders still find us magnetically attractive. But we will only remain so if we try.
- David “National Greatness Conservatism” Brooks thinks he’s found the solution: a “national greatness agenda” and a new political movement—maybe a third party!—whose “goal will be unapologetic: preserving American pre-eminence.” This movement could seek to “end the mortgage deduction and tax employer health care plans and raise capital gains taxes and cut benefits for affluent seniors.”
- Meanwhile, the Republican Party seems to think what the country needs is a good jolt of religion-infused nationalism.
With this sort of fresh, innovative thinking, maybe we can’t miss!
WikiLeaks, the Law, and Common Sense
With the third WikiLeaks dump now before us, and more promised down the road, two questions that arise are whether prosecutions of those responsible are possible and what can be done to better protect classified material. Neither question admits of easy answers. One can start, however, by noting that overclassification is a perennial problem in government, and correcting that problem would go far toward more open government better able to protect classified material.
That said, whether in families or foreign affairs, confidences are necessary, and the need to keep those confidences is inescapable.
Accordingly, one can say with certainty that any government official who knowingly downloaded and then released classified documents to a person unauthorized to see or possess them, as Private First Class Bradley Manning is alleged to have done, can be prosecuted under any number of federal statutes. With respect to someone like WikiLeaks founder Julian Assange, however, the issues are more complex. Attorney General Eric Holder has said that the Justice and Defense Departments are conducting a criminal investigation, presumably under the Espionage Act of 1917. That is a vague statute that may be broad enough to enable the president, under his foreign affairs powers, to go after someone who disseminates such documents. But it has rarely been used, and never against a publisher.
The larger question, however, is how all of this was allowed to happen. Speaking from personal experience, during two brief stints at the State and Justice Departments during the Reagan administration I held a Top Secret clearance, which gave me access to highly classified materials. At that time, however, just to see those materials we had to go to the inner sanctums at State and Justice—areas that were shielded from any kind of eavesdropping—and then the materials were brought to us by agents who stayed with us while we read them. In light of that experience, I find it incredible that a young Army PFC could download this material and go undetected for long enough to disseminate it and boast about it afterward. More than anything else, this is one more government failure. Heads should roll, but mostly the heads of those who enabled so lax a system to exist.
Wikileaks Sheds Light on Government Ineptitude
For years I have told anybody who would listen how U.S. efforts to stabilize Afghanistan contribute to Pakistan’s slow-motion collapse. Well it appears that my take on the situation was not so over-the-top. Amid some 250,000 confidential diplomatic cables released by online whistleblower Wikileaks, former U.S. ambassador to Pakistan Anne W. Patterson warned in cable traffic that U.S. policy in South Asia “risks destabilizing the Pakistani state, alienating both the civilian government and the military leadership, and provoking a broader governance crisis without finally achieving the goal.”
On one level, this cable underscores what a disaster American foreign policy has become. But on another level, the leak of this and other cables strikes me as completely odd and slightly scary. How did Pfc. Bradley Manning, who stands accused of stealing the classified files from Siprnet and handing them to Wikileaks founder Julian Assange, obtain access to these files in the first place? How does a young, low-level Army intelligence analyst gain access to a computer with hundreds of thousands of classified documents from all over the world?
After 9/11, the government made an effort to link up separate archives of government information. In theory, anyone in the State Department or the U.S. military can access these archives if he has: (1) a computer connected to Siprnet, and (2) a “secret” security clearance. As Manning told a fellow hacker: “I would come in with music on a CD-RW labeled with something like ‘Lady Gaga’ … erase the music … then write a compressed split file. No one suspected a thing… [I] listened and lip-synched to Lady Gaga’s ‘Telephone’ while exfiltrating possibly the largest data spillage in American history.” Manning said he “had unprecedented access to classified networks 14 hours a day 7 days a week for 8+ months.”
I’m all for less government secrecy, particularly when U.S. officials are doing bizarre things like tabulating the biometric data of various UN officials, the heads of other international institutions, and African heads of state. That these supposedly “confidential” communications were so easily leaked highlights the appalling ineptitude of our unwieldy national security bureaucracy. Indeed, the phenomenon of Wikileaks says as much about government policy as it does about government incompetence.
No, Senator Durbin, Earmarks Are Not Transparent
This morning the full Senate voted down a proposed rule that would have barred earmarks for the next two years. Part of the reason? Earmarks are transparent.
Here’s Senator Dick Durbin (D-Ill.), quoted in a Hill article:
There is full disclosure in my office of every single request for an appropriation. We then ask those who have made the requests to have a full disclaimer of their involvement in the appropriation, so it’s there for the public record. This kind of transparency is virtually unprecedented.
Senator Durbin doesn’t know transparency. Take a look at Senator Durbin’s earmark disclosures. Yes, you can read through them, one by one. But can you make a list of recipients? Can you add up the totals? Can you search for common words in the brief explanations for each earmark? Can you make a map showing where recipients of Senator Durbin’s requests are?
No, no, no, and no.
That’s because Senator Durbin puts his request disclosures out as scanned PDFs. Someone on his staff takes a letter and puts it on a scanner, making a PDF document of the image. Then the staffer posts that image on the senator’s web site. It’s totally useless if you want to use the data for anything. Notably, Senator Durbin doesn’t even include the addresses of his earmark recipients.
Voters Recognize U.S. Military Spending Tops Other Countries
That is the headline of a press release announcing the results of a recent Rasmussen poll. The survey of likely voters finds that 58 percent recognize that the United States spends more on its military than any other country in the world.
The headline writers have obviously taken this as a positive. I think one can just as easily spin it in the other direction. It is deeply disturbing that 19 percent of Americans think that some country spends more than us, and that another 24 percent are unsure.
I don’t think this is just a reflection of my recent penchant for finding the dark lining in every silver cloud. If I were a professor teaching a course in U.S. military history, I’d be distressed if 19 percent of my students thought that Robert E. Lee was victorious at the battle of Gettysburg, and that another 24 percent weren’t sure. If 19 percent of students in a basic economics course thought that the price of something rises when demand falls and supply increases, and another 24 didn’t know, that would be a problem. Likely voters are presumably more interested in policy than registered voters or the generic American adult. Even among this modestly self-selected group, it would be unrealistic to expect that 100 percent would have a clear understanding of some basic facts. But 58 percent is a failing score, even by the most generous standards.
The respondents could be excused for their ignorance or confusion if someone was arguing the contrary. But no one is. The fact that we have an enormous military budget — far larger than any other country, or combination of countries — is the public policy equivalent of the sun rising in the east. Even the hawks calling for additional increases in Pentagon spending (on top of a DoD budget that has grown more than 86 percent in real terms over the past 13 years) don’t dispute the fact that we currently spend more than anyone else. On the contrary, all experts agree that we spend much more than number two (China), and most calculate that 300 million Americans spend nearly as much on our military as do all other citizens of the world combined. (More than 44 percent of the world total, according to conservative estimates that likely overstate China and Russia’s actual spending.)
So while some might be encouraged that only 19 percent of likely voters think that some country spends more than us, and that another 24 percent aren’t sure, I am not. It suggests that I have a lot more work to do.
Social Security Disability Benefits Unsustainable
The disability insurance component of Social Security was created in 1956 to provide income support to individuals aged 50 to 64 who were permanently disabled. As is typical with government programs, eligibility and benefits were greatly expanded over the subsequent decades.
SSDI, which is funded through a 1.8 percent payroll tax on all workers, was recently described by the Congressional Budget Office as “not financially sustainable.” The following chart shows that SSDI benefit payments have soared 119 percent since 1995 in real or inflation-adjusted terms:
“Public Schools Have to Take Everyone…
…and don’t privilege the wealthy who can pay for special access.” Well, no — those are two great myths exploded in this piece about Chicago’s public schools. Remember the article next time you hear that school choice is unacceptable because it keeps everyone from having equal access to great schools.
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