18 December 2009

Today’s Tabbloid
PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Vague Laws Defy the Rule of More Sightings of Libertarian

Law [Cato at Liberty] Voters [Cato at Liberty]
DEC 17, 2009 11:07P.M. DEC 17, 2009 11:05P.M.

By Ilya Shapiro By David Boaz

Following Enron’s downfall, the federal government charged company Michael Petrilli created a stir with his Wall Street Journal op-ed, “Whole
CEO Jeffrey Skilling with “honest services fraud” connected to the Foods Republicans,” on Monday. He noted that the American electorate
alleged manipulation of Enron’s market value (and other securities includes more college graduates every year, and in 2008 the Republican
irregularities). This charge — also at issue in two other cases before the nominee for president lost the college-educated vote for the first time
Court this term — is based on a statute which says, in its entirety: “For since the 1970s. Republicans need to stop sneering at the “arugula vote”
the purposes of this chapter, the term ‘scheme or artifice to defraud’ and start appealing to educated, progressive voters:
includes a scheme or artifice to deprive another of the intangible right of
honest services.” What’s needed is a full-fledged effort to cultivate “Whole
Foods Republicans”—independent-minded voters who
Skilling was convicted, and his conviction was upheld by the Fifth embrace a progressive lifestyle but not progressive politics….
Circuit. The Supreme Court agreed to review the application of the
“honest services fraud” statute to Skilling (as well as the issue of What makes these voters potential Republicans is that,
potential jury bias stemming from pretrial publicity in Houston). Cato, lifestyle choices aside, they view big government with great
joined by the Pacific Legal Foundation, filed an amicus brief supporting suspicion. There’s no law that someone who enjoys organic
neither party, arguing simply that vague statutes such as the one at issue food, rides his bike to work, or wants a diverse school for his
here offend due process. kids must also believe that the federal government should
take over the health-care system or waste money on
We take no position on whether Skilling committed a crime, or even the thousands of social programs with no evidence of
crime at issue here (whatever that may be). Instead, we argue that the effectiveness….
Court should clarify that the constitutional prohibition on vague laws
protects sophisticated and unsophisticated defendants alike in the realm Even more important is the party’s message on divisive social
of economic regulation, as well as in criminal law. The due process issues. When some Republicans use homophobic language,
requirements of fair warning and definiteness apply equally in the express thinly disguised contempt toward immigrants, or
contexts of white collar business crimes, business torts, and civil ridicule heartfelt concerns for the environment, they affront
regulations. the values of the educated class. And they lose votes they
otherwise ought to win.
Vague laws involve three basic dangers: First, they may harm the
innocent by failing to warn of the offense. Second, they encourage These voters are part of the “libertarian vote” that David Kirby and I
arbitrary and discriminatory enforcement because vague laws delegate have been exploring. Libertarian voters tend to be more educated than
enforcement and statutory interpretation to individual government average (see “The Libertarian Vote,” table 11, page 17), and they can be
officials. Third, because citizens will take extra precautions to avoid described as “fiscally conservative and socially liberal.” It’s good to know
violating the law, vague laws inhibit our individual freedom. other people are noticing them, and we hope that soon candidates and
consultants will take note. For those who are still dubious, the day after
For more on this issue, see Tim Lynch’s posts here and here, Gene the Wall Street Journal column, the Washington Post published this
Healy’s op-ed, or the related policy forum and podcast. letter:

When I read House Minority Leader John Boehner’s

Washington Forum commentary about the GOP’s thoughts
on economic policy and job creation — as compared with that

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of the Obama administration [“A better plan for jobs,” Dec. are.
11] — I wanted to cheer. I am concerned about America’s
increase in debt and think that the health reform plan is Even Max Baucus admits that not a single senator
interventionist and has no hope of reforming health care. understands the Reid bill.

But I can’t cheer. Because I apparently can’t be a Republican Our federalist system, the separation of powers, our
— limited government, fiscal conservative — unless I am also bicameral national legislature, six-year terms for Senators,
willing to vote for “pure conservative” candidates a la the staggered Senate elections, and the Senate’s procedural rules
purity test being proposed to the Republican National all exist precisely to prevent what Reid is trying to do: ram a
Committee: pro-life, anti-gay marriage, draconian sweeping piece of legislation through Congress without due
immigration policies [“A party both united and divided,” consideration.
front page, Nov. 30]. These are policies I refuse to support.

So, whom do I vote for next year?

FISCALLY CONSERVATIVE BLOG FEEDS
Kathy Rondon, Falls Church
Jim DeMint = American Hero
I don’t know if Ms. Rondon shops at Whole Foods, but she’s definitely a
part of the “libertarian vote.” Republicans wondering why they lost in [The Club for Growth]
2006 and 2008, and Democrats worrying about slipping poll numbers DEC 17, 2009 04:18P.M.
during 2009, should take a look at the libertarian slice of the electorate.
If Harry Reid and the Democrats are going to get their health care bill, it
won s in it.

FISCALLY CONSERVATIVE BLOG FEEDS

Our System of Government FISCALLY CONSERVATIVE BLOG FEEDS

Exists to Prevent This Kind of Tax Hike Commission [Cato at

Thing [Cato at Liberty] Liberty]
DEC 17, 2009 11:01P.M. DEC 17, 2009 02:06P.M.

By Michael F. Cannon By Chris Edwards

The Hill’s Congress Blog asks, “Will the Senate pass a health care reform The Senate Homeland Security and Government Affairs Committee is
bill before it adjourns for the year?” holding hearings today focused on Senator Kent Conrad (D-ND) and
Judd Gregg’s (R-NH) idea to set up a special Task Force to draft a
I answer: deficit-reduction plan. The plan would get fast-tracked through Congress
for a vote and “everything would be on the table.”
It’s not looking good – nor should it.
For taxpayers, this idea creates the threat of large tax increases on top of
The Reid bill becomes less popular with each passing day. (So all the other tax increases being discussed in Congress. While the
too does President Obama’s handling of health care.) senators supporting a Task Force express valid concerns about the
government’s exploding debt, the plan could launch a drive to impose a
CBS News is reporting that Reid wants to hold a vote before European-style value-added tax in America.
Christmas because he doesn’t want senators to go home and
hear from their constituents. In theory, such a Task Force could come up with some meaty and long-
overdue cuts to the federal budget. But nine of the senators co-
Reid has been systematically suppressing a complete cost sponsoring the Conrad-Gregg Task Force, including Conrad, voted in
estimate of his bill. favor of the massive spending bill passed by the Senate on Sunday, which
increased appropriations by 10 percent in a single year.
Reid’s manager’s amendment will make unknown, countless,
and dramatic changes to that 2,074-page bill – and Reid In calling for deficit reduction, Senator Conrad says that “it is no longer
wants to vote on it before anyone knows what those changes enough for Congress to simply talk about reform; it is time for action and

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leadership.” But Senator Conrad certainly hasn’t shown reform public schools to the voucher program. This would mean that taxpayers
leadership on farm subsidies. So until he and his colleagues start would not see savings in the first couple of years, but after that the
restraining their own spending appetites, it’s safe to assume District would be able to offer taxpayers generous tax cuts while also
that ”everything on the table” really just means a sneaky, under-the-table offering kids significantly better learning opportunities.
tax increase.
Surely the details of such a deal could be hammered out by experienced
politicians and negotiators. Because, really, the status quo is insane. Why
keep paying $28,000 for a worse education than the voucher program is
FISCALLY CONSERVATIVE BLOG FEEDS providing for $6,600? That is sheer madness.

DC Vouchers Solved? Generous

Severance for Displaced FISCALLY CONSERVATIVE BLOG FEEDS

Workers [Cato at Liberty] A Civil Liberties Roundup [Cato

DEC 17, 2009 02:03P.M.
at Liberty]
By Andrew J. Coulson DEC 17, 2009 01:13P.M.

Colbert King argues that DC should continue the opportunity By Tim Lynch
scholarships private school choice program on its own dime, instead of
complaining that Congress is killing it off. He starts off with a refreshing Here are some interesting new items on the web:
dose of realpolitik: “It should come as no surprise that Democratic
congressional leaders are effectively killing the program. They, and their • Cato Senior Fellow Nat Hentoff is interviewed by John W.
union allies, didn’t like it in the first place.” Too true. This is what Whitehead of the Rutherford Institute. Nat says “Obama has little,
disgusts many Americans about politics, but hey, that’s the reality. if any, principles except to aggrandize and make himself more and
more important.” And “Obama is possibly the most dangerous and
But then he seems to descend into uncharacteristic naivete with this: destructive president we have ever had.” Go here for the full
interview.
If the city likes vouchers so much, why shouldn’t the District
bear the cost? The answer is as clear as it may be • Cato adjunct scholar Harvey Silverglate is blogging this week over
embarrassing to voucher proponents: D.C. lawmakers don’t at the Volokh Conspiracy on his new book, Three Felonies a Day.
want to ask their constituents to shoulder the program’s
expense. • Cato Adjunct Scholar Marie Gryphon, who is also a Senior Fellow
with the Manhattan Institute, has just put out a new paper, It’s a
That is NOT the answer. DC lawmakers are familiar with DC’s budget. Crime: Flaws in Federal Statutes That Punish Regular
DC’s FY 2009 budget, as I show in this Excel spreadsheet file, allocated Businesspeople.
$28,167 per pupil for k-12 schooling. And the average voucher amount
is not $7,500, as King claims. That’s the maximum. The average is • Cato Media Fellow Radley Balko takes a look at the pathetic
$6,620 – one quarter of what the district is spending on k-12 machinations in the Chicago Police Department. Reminds me of
schooling. So operating the voucher program entirely out of the District the proud boast from a patronage worker in the political machine:
of Columbia’s own budget would not cost a dime. And if expanded, it “Chicago ain’t ready for reform!”
would save DC tens of millions, if not hundreds of millions, of dollars.
Good stuff here. For more Cato scholarship, go here.
So DC lawmakers are most certainly NOT afraid of asking constituents to
pay for it — it would more than pay for itself. What DC lawmakers must
be afraid of is that DC schools have become a massive jobs program
instead of an educational program. They must fear that if the voucher
program were expanded it would put many non-teaching staff out of
work — including perhaps some of their own supporters.

Well how about a realpolitik solution to that problem: offer displaced

workers 18 months of severance pay at something like 75% of their
current salary. That would give them plenty of time to find other work,
and it could be paid for from the savings of students migrating from

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Whip (Health Care) Inflation Thursday Links [Cato at

Now? [Cato at Liberty] Liberty]
DEC 17, 2009 12:52P.M. DEC 17, 2009 12:27P.M.

By Alan Reynolds By Chris Moody

During the runaway inflations of 1974 and 1979, Presidents Ford and • Helping out the “Wall Street fat cats:” Bankers are responding to
Carter suggested that inflation was caused by the profligacy of American the incentives generated by the economic policies of the Treasury
households. President Ford’s infamous “Whip Inflation Now” speech, for and the Federal Reserve.
example, said, “Here is what we must do, what each and every one of you
can do: To help increase food and lower prices, grow more and waste • How charter schools can save states big education dollars.
less; to help save scarce fuel in the energy crisis, drive less, heat less.”
• Doug Bandow: “Congress has spent the country blind, inflated a
Much of the recent discussion of health care costs likewise treats this as a disastrous housing bubble, subsidized every special interest with a
problem caused by a demonic private insurance industry, and therefore letterhead and lobbyist, and created a wasteful, incompetent
requiring such “reforms” as expanding Medicaid to the non-poor and bureaucracy that fills Washington. But now, legislators want to
Medicare to the non-old. take a break from all their good work and save college football.”

The facts are quite different, as shown in “The Evolution of Medical • In case you missed it last week, watch Cato’s Jerry Taylor on the
Spending Risk” by Jonathan Gruber of MIT and Helen Levy of the premier episode of Stossel.
University of Michigan, in the latest Journal of Economic Perspectives.
• Podcast: “Urban Planners Romanticize Immobility“
Gruber and Levy calculate that real private health care spending per
person (in 2007 dollars) “increased from about $700 to $3,500 between
1960 and 2007, a five-fold increase.” They note that “private out-of-
pocket spending has not quite doubled.” Yet “government health FISCALLY CONSERVATIVE BLOG FEEDS
spending over the same period . . . increased from about $250 to
$3,5000, a 13-fold increase.” Should Helicopter Ben
In fairness, the quality of health care has been hugely improved since Withdraw His Name? [Larry
1960. And prices of physician services (which are often incorrectly
compared with the overall consumer price index) have risen no faster Kudlow’s Money Politic$]
than prices of non-medical services. DEC 17, 2009 12:22P.M.

In any case, President Obama’s claim that the pace of total public and Helicopter Ben Bernanke passed the Senate Banking Committee vote on
private spending on health care could somehow be “contained” by his reconfirmation. But he passed by 16 to 7. Most of the Republicans
greatly increasing government spending clearly flunks 3rd grade voted against Bernanke, as did one Democrat, Sen. Jeff Merkley of
arithmetic. Oregon. The reconfirmation now goes to the floor of the Senate, where
it’s going to be held up for a while as Sen. Jim DeMint and others insist
Unless the hidden agenda is to impose draconian wage and price that the GAO Fed audit be voted on before Bernanke’s final vote.
controls and political rationing on health care providers, all the
rhetorical pretense about proposed health care legislation being a way to That audit, by the way, would reveal the Fed’s FOMC policy discussions
hold down overall spending on health care is like saying the solution to after six months, rather than the current-law five years. This is a good
chronic drunkeness is more booze. thing. More prompt disclosure. The public has a right to know, especially
since Bernanke (as Alan Greenspan’s right-hand man) was instrumental
in creating the easy-money housing and energy bubble that sank the
economy, and since Bernanke (as Fed chairman) has provided
unbelievable, ultra-easy, free-money, zero interest rates for too long.

Even with the recent modest corrections, rising gold and the declining
dollar tell the story that Bernanke knows how to ease but not how to
tighten. The emergency is long past, but he is still operating an

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emergency policy of ultra-easy, excess-dollar creation. FISCALLY CONSERVATIVE BLOG FEEDS

Aside from the fact that Bernanke doesn’t look at gold or the dollar as Forecast for Copenhagen:
price signals to guide his policy, we have witnessed a complete reversal
of the Fed’s intellectual framework. By that I mean, for 20 years or so, Cloudy with a Large Chance of
first under Paul Volcker and then during Alan Greenspan’s first three
terms, the Fed argued that the tax-cut effects of low inflation would spur Nothing [Cato at Liberty]
economic growth and low unemployment. This period lasted roughly DEC 17, 2009 11:51A.M.
from the early 1980s until the end of the century. But since Bernanke
came on the scene, the sound-money, stable-dollar argument has By Patrick J. Michaels
disappeared.
The big UN climate conference at Copenhagen is supposed to produce a
For most of this decade, the Fed has been fighting unemployment by new schedule for greenhouse gas emissions reductions, as the 1997
pumping in easy money. And it keeps telling us this will not cause Kyoto Protocol ends in 2012.
inflation. With the CPI hitting nearly 5 percent in 2006 and almost 6
percent in 2008, Bernanke was dead wrong. And the fact remains that In fact, Copenhagen in 2009 is beginning to look a lot like Kyoto in 1997.
more money creation from the Fed produces inflation — not jobs or long- Back then, the two-week conference was “deadlocked” as it drew to a
term economic growth. close, with a major split between the United States and Europe.
President Clinton had committed the U.S. to a relatively innocuous
Bernanke sees deflation and depression threats everywhere. That’s one target of holding U.S. emissions of carbon dioxide constant, while the EU
of his biggest problems. He cut his academic teeth on studying the wanted much more costly reductions.
Depression, which seems to have blinded him from the modern use of
sophisticated financial-market signals in our new, globalized, high-tech, Vice President Gore jetted in near the end of the scheduled conference,
rapid-information world. and instructed the U.S. negotiators to be “more flexible.” The meeting
was extended for days, and suddenly we agreed to reduce our CO2
So I think Bernanke’s reconfirmation could be in trouble on the Senate emissions seven percent below 1990 levels from 2008 to 2012. For the
floor. I’m going to bet that most of the 40 Republicans will vote against record, we’re currently emitting about 17 percent above 1990 levels,
him, and that they will be joined by a number of Democrats. If Bernanke though that number may drop a couple of percentage points in 2009 due
were to be opposed by as many as 35 or 40 votes, it would substantially to the recent economic malaise.
undermine his credibility.
The fact that emissions and economic growth are highly correlated
Bernanke’s term extends to the end of January. I wonder if he realizes wasn’t lost on the Senate, which never ratified Kyoto.
just how much opposition he may have. Unless he thinks he can garner a
truly bipartisan vote in the weeks ahead, I wonder if he should consider This time around, President Obama will descend upon Copenhagen on
withdrawing his name. the conference’s last scheduled day, December 18. He’ll be plenty
flexible, which is pretty easy to do when nothing you say legally commits
the U.S. to anything. That’s because what comes out of Denmark will
either be an extension of Kyoto (not ratified), or a new protocol (with no
hope of garnering the 67 Senate votes needed for ratification).

Nonetheless there will be a great pronouncement whenever Copenhagen

ends. The betting is that the Chinese and the Indians, who have
steadfastly refused to agree to reduce their overall emissions, will agree
to some vague targets thanks to a bribe courtesy of U.S. taxpayers. Of
course, that agreement will be contingent upon them actually getting the
loot, which seems pretty unlikely given the upcoming election.

So, the more things change, the more they stay the same. The UN is
going to announce a breakthrough, world-saving agreement with no real
buy-in from the Chinese and Indians and no chance of approval by our
Senate.

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FISCALLY CONSERVATIVE BLOG FEEDS

222 Economists Oppose

Stimulus And More Spending
[The Club for Growth]
DEC 17, 2009 11:46A.M.

Organized by House GOP Challenge won.

FISCALLY CONSERVATIVE BLOG FEEDS

Is Greece’s Fiscal Crisis Caused

by too Much Spending or too
Little Revenue? [Cato at
FISCALLY CONSERVATIVE BLOG FEEDS
Liberty]
DEC 17, 2009 11:43A.M. Colbert Report on PATRIOT &
By Daniel J. Mitchell Private Spying [Cato at Liberty]
DEC 17, 2009 11:34A.M.
It’s been a rough couple of weeks for Greece, which has been battered by
rumors of government default. Interest rates have been climbing, as By Julian Sanchez
investors are nervous about state finances, and the country’s debt rating
has been downgraded. Stephen Colbert tackles both Obama’s flip-flop on the PATRIOT Act
(”When presidents take office they learn a secret… Unlimited power is
Not surprisingly, Greek politicians are dealing with the crisis in large awesome!“) and the private sector’s complicity in the growth of the
part by further increasing the tax burden. One particularly horrible idea surveillance state—drawing heavily on the invaluable work of Chris
is a 90 percent tax on bank bonus payments. I don’t know if lawmakers Soghoian.
in Athens have heard of the Laffer Curve, but they’re about to get a real-
world lesson that will teach them how punitive tax rates lead to less The Colbert Report Mon – Thurs 11:30pm / 10:30c The Word –
revenue. Spyvate Sector www.colbertnation.com Colbert Report Full
Episodes Political Humor U.S. Speedskating
For those who wonder how Greece got into this mess, here’s a quick
chart I put together, based on OECD fiscal data. Don’t be bsurprised if
America has a similar chart in about 10 years.

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FISCALLY CONSERVATIVE BLOG FEEDS

FISCALLY CONSERVATIVE BLOG FEEDS
On CNBC’s Kudlow Report
Thursday’s Daily News [The
Tonight [Larry Kudlow’s Money
Club for Growth]
Politic$] DEC 17, 2009 11:15A.M.
DEC 17, 2009 11:19A.M.
Larry Kudlow says this is Obamanomics at its worst. The health care bill
is scary, says Senator Tom Coburn. Cato reports on a Hayek vs Keynes
rap song. Stay classy, Chuck Schumer! The Boston Globe has a 2009
review in pictures - Part I, II, and III.

FISCALLY CONSERVATIVE BLOG FEEDS

This evening at 7pm ET:

National Standardizers Just
BERNANKE SQUEAKS THROUGH SENATE BANKING
Can’t Win [Cato at Liberty]
DEC 17, 2009 11:07A.M.
COMMITTEE
CNBC’s Hampton Pearson reports from Washington.
By Neal McCluskey

Also…Sen. Jim Bunning (R-KY) member of the Senate Banking

I’ve been fretting for some time over the growing push for national
Committee will join us.
curricular standards, standards that would be de facto federal and,
whether adopted voluntarily by states or imposed by Washington, end up
CAN YOU BANK ON BERNANKE?
being worthless mush with yet more billions of dollars sunk into
Gold; dollar; jobs debate
them. The primary thing that has kept me optimistic is that, in the end,
few people can ever agree on what standards should include, which has
*Steve Liesman, CNBC senior economics reporter
defeated national standards thrusts in the past.
*Arthur Laffer, Chief Investment Officer, Laffer Investments; Fmr.
Reagan Economic Advisor
So far, the Common Core State Standards Initiative – a joint National
Governors Association/Council of Chief State School Officers venture
CITI RAISES BILLIONS TO REPAY TARP
that is all-but-officially backed by Washington — has avoided being
Should Glass-Steagall be reinstated?
ripped apart by educationists and plain ol’ citizens angry about who’s
writing the standards and what they include. But that’s largely because
*Peter Wallison, Sr fellow at the American Enterprise Institute; Former
the CCSSI hasn’t actually produced any standards yet. Other, that
Reagan Official; Fmr. Treasury Dept. General Counsel
is, than general, end of K-12, “college and career readiness” standards
that say very little.
LARRY’S ECONOMIC UPDATE
FedEx’s Fred Smith optimistic on U.S. economy; leading indicators up
Of course, standards that say next to nothing are still standards, and that
again; Philly Fed, etc
is starting to draw fire to the CCSSI. Case in point, a new post on Jay P.
Greene’s blog by former Bush II education officials–and tough standards
WHY ARE HEALTH CARE STOCKS BOOMING?
guys–Williamson Evers and Ze’ev Wurman. They are heartily
unimpressed by what CCSSI has produced, and think its already time to
*Dave Shove, BMO Capital Markets Sr. Healthcare analyst
start assembling a new standards-setting consortium:
*Vince Farrell, CNBC Contributor/Soleil Securities Chief Investment
Officer
The new consortium would endeavor to create better and
more rigorous academic standards than those of the CCSSI….
CAN GOLF SURVIVE WITHOUT TIGER?
CNBC’s Darren Rovell reports.
Drab and mediocre national standards will retard the efforts
of advanced states like Massachusetts and reduce academic
Please join us. The Kudlow Report. 7pm ET. CNBC.
expectations for students in all states.

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Yes, it is late in the game. But this should not be an excuse for all your hard standards work.
us to accept the inferior standards that at present seem to be
coming from the rushed effort of CCSSO and NGA. In a democratically-controlled, government schooling system, it
is almost always tails they win, heads we lose for the standards-and-
Evers and Wurman’s piece is an encouraging sign that perhaps once accountability crowd. This is why these well-intentioned folks need to
more national standards efforts will be torn apart by fighting give up on government schooling and get fully behind the only education
factions and spare us the ultimate centralization of an education system system that aligns all the incentives correctly: school choice.
already hopelessly crippled by centralized, political control.
Unfortunately, the post also gives cause for continuing concern, Choice lets parents choose schools with curricula that they want, not
illustrating that the “standards and accountability” crowd still what everyone in society can agree on, establishing the conditions for
hasn’t learned a fundamental lesson: that democratically-controlled coherence and rigor. Choice pushes politicians, with their overriding
government schools are almost completely incapable of having rich, political concerns, out of the education driver’s seat and replaces them
strict standards. with parents. Finally, choice lets real accountability reign by
forcing educators to respond quickly and effectively to their customers if
Evers and Wurman’s piece offers evidence aplenty for why this is. For they want to get paid. In other words, in stark contrast to government
instance, the authors theorize that a major reason the CCSSI schooling , school choice is inherently designed to work, not fail.
standards appear doomed to shallowness is that the Obama
administration has made adopting them a key component for states to
qualify for federal “Race-to-the-Top” money, and states have to at
least say they’ll adopt the standards in the next month or so to compete. FISCALLY CONSERVATIVE BLOG FEEDS
In other words, as is constantly the case, what might be educationally
beneficial is taking a distant back seat to what is politically important: The Art of Foreign Policy
for the administration, to appear to be pushing “change,” and for state
politicians to grab federal ducats. Political calculus is once again Punditry [Cato at Liberty]
taking huge precedence over, well, the teaching of calculus, because DEC 17, 2009 11:01A.M.
the school system is controlled by politicians. We should expect nothing
else. By Justin Logan

Here’s another example of the kind of reality-challenged thinking that is Foreign Policy magazine performs an important public service,
all too common among standards-and-accountabilty crusaders: publishing a compendium of the “top 10 worst predictions for 2009.” My
favorite?
CCSSI’s timeline calls for supplementing its “college and
career readiness” standards with grade-by-grade K-12 “If we do nothing, I can guarantee you that within a decade,
standards, with the entire effort to be finished by “early a communist Chinese regime that hates democracy and sees
2010.” This schedule is supposed to include drafting, review, America as its primary enemy will dominate the tiny
and public comment. As anyone who had to do such a task country of Panama, and thus dominate the Panama Canal,
knows, such a process for a single state takes many months, one of the world‘s most important strategic points.“
and CCSSI’s timeline raises deep concerns about whether the
public and the states can provide in-depth feedback on those —Rep. Dana Rohrabacher (R-Calif.), Dec. 7, 1999
standards–and, more important, whether standards that are
of high quality can possibly emerge from the non-transparent Rohrabacher made this alarming prediction during a debate
process CCSSI is using. on the U.S. handover of the Panama Canal. His fellow hawk,
retired Adm. Thomas Moorer, even warned that China could
Evers and Wurman assert that if standards are going to be of “high sneak missiles into Panama and use the country as a staging
quality” the process of drafting them must be transparent. But the only ground for an attack on the United States. Well,
hope for drafting rigorous, coherent standards is actually to keep the Rohrabacher’s decade ran out this December, and all remains
process totally opaque. quiet on the Panamanian front. As for China, the United
States is now its largest trading partner.
Phonics or whole language? Calculators or no calculators? Evolution or
creationism? Great men or social movements? Transparent
standardizers must either take a stand on these and countless other
hugely divisive questions and watch support for standards crumble, or
avoid them and render the standards worthless. Of course, don’t set
standards transparently and every interest group excluded from the
cabal will object mightily to whatever comes out, again likely destroying

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In 1992, the Los Angeles Times ran an article outlining the

dynamics of the “predictions” segment of the popular
“McLaughlin Group” TV program. Michael Kinsley, who had
been a panelist on the program, admitted

“When I was doing the show, I was much more interested in

coming up with an interesting prediction than in coming up
with one that was true. There’s no penalty for being wrong,
but there is a penalty for being boring. …Prognosticators have
known for centuries that people only remember what you got
right. They don’t remember what you got wrong.”

Foreign-policy analysis works in much the same way. Errant

predictions are quickly forgotten. It is the interesting
predictions that the media want, and unfortunately
Flowers and Chocolates? interesting predictions in the context of foreign policy often
mean predictions of unprovoked foreign attacks, geopolitical
The point here isn’t to poke fun at Rohrabacher, or any of the other chaos, and a long queue of bogeymen waiting to threaten us.
predictors featured on the FP list. Rather, it’s to point out that predicting (By contrast, after a given policy is enacted, its proponents
the future is really hard. And as Ben Friedman and I have harped on, have to spin it in a positive light, as in Iraq.) Meanwhile, it is
you just can’t aspire to any predictive competence without sound theory the person with the quickest wit and the pithiest one-
to guide you. In order to judge that if we do (or don’t do) X, Y will liner–not the deepest understanding–who winds up with the
happen, you need a theory connecting X to Y. So looking back at our responsibility of informing the American electorate about
predictions, and comparing them to the results of our policies, is a useful foreign-policy decisions.
way to test the theories on which we based our policies in the first place.
So it’s very good to see that Foreign Policy has interest in holding
Putting falsifiable predictions out there is a collective action problem, everyone’s feet to the fire. John Mueller does a similar service in The
though: If I start offering nothing but precise point-predictions about Atomic Obsession, pointing out the many predictions of doom,
what will or won’t happen if we start a war with Iran, or how big the apocalypse and general disaster that have characterized both the
defense budget will get, or anything else, I’m going to get a lot of things hawkish establishment and the leftish arms-control clique.
wrong. And if everyone else keeps offering vapid, non-falsifiable rhetoric,
I stand to look like a real jackass while everyone can hide behind the fog If this sort of exercise becomes common, though, watch for foreign-
of common-use language. As I wrote in the National Interest a while policy commentators not to develop a growing sense of modesty about
back: their predictive power, but rather to take greater care in avoiding
falsifiable statements altogether.
Foreign-policy analysts have an incredibly difficult task: to
make predictions about the future based on particular policy
choices in Washington. These difficulties extend into the
world of intelligence, as well. The CIA issues reports with
impossibly ambitious titles like “Mapping the Global Future”,
as if anyone could actually do that. The father of American
strategic analysis, Sherman Kent, grappled with these
difficulties in his days at OSS and CIA. When Kent finally
grew tired of the vapid language used for making predictions,
such as “good chance of”, “real likelihood that” and the like,
he ordered his analysts to start putting odds on their
assessments. When a colleague complained that Kent was
“turning us into the biggest bookie shop in town”, Kent
replied that he’d “rather be a bookie than a [expletive] poet.”

Actually, though, it’s worse than this. As I wrote in the American

Conservative, there’s basically no endogenous mechanism to hold
irresponsible predictors accountable:

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 18 December 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Obama on Health Care: Half Promises, Promises [Cato at

Right [Cato at Liberty] Liberty]
DEC 17, 2009 10:48A.M. DEC 17, 2009 10:17A.M.

By Michael D. Tanner By Michael F. Cannon

President Obama gave what seems like his thousandth exclusive health National Journal headline: “Obama Signs Spending Bill, Promises
care interview last night, this one to ABC News’s Charles Gibson. In Future Restraint.”
trying to sell his health care plan, the president warned that if Congress
does not pass legislation controlling health care costs, the federal Now where have I heard that before?
government “will go bankrupt.” He also warned that unless health care is
reformed, “your premiums will go up.”

The president is absolutely correct about that. The only problem is that, FISCALLY CONSERVATIVE BLOG FEEDS
according to the president’s own chief health care actuary, the bills that
Congress is now considering do nothing to restrain either federal health It’s Official: Death Tax Rate Will
care spending or total health care costs. In fact, Rick Foster, chief actuary
at the Center for Medicare and Medicaid Services (CMS) says that if be 0% in 2010 [The Club for
Congress passes the bill now before the Senate, health care spending will
actually increase by $234 billion more over the next 10 years than if we Growth]
did nothing. DEC 17, 2009 10:10A.M.

And, according to the Congressional Budget Office, the congressional The Senate acknowledged yesterday that they won s say 45%, then they
bills do little or nothing to reduce the growth in insurance premiums. will make it retroactive to January 1. So we should celebrate the news
Even if a bill passes, premiums will roughly double by 2016, and keep that the Death Tax rate is going to zero next year, but remain loudly
rising after that. But for millions of Americans the bill will actually make opposed to resurrecting it.
things worse. According to CBO, the Senate bill would actually increase
insurance premiums by 10-13 percent for Americans who buy their
insurance through the non-group market, that is those who don’t receive
insurance from their employer. Those 10-13 percent increases are over FISCALLY CONSERVATIVE BLOG FEEDS
and above the increases that would occur if we did nothing.
The Consequences of
On the other hand, if the president were really serious about controlling
health care costs and lowering premiums, he wouldn’t need to spend Regulation [Cato at Liberty]
trillions of dollars and take over one-sixth of the US economy; he could DEC 17, 2009 08:59A.M.
try some of the ideas written about here, and here, and here.
By David Boaz

The city of Alexandria, Virginia, passed a law in 2005 to require that

each cab respond to two dispatch calls every day. WAMU reports on the
results:

Says [driver Chaudhry] Ahmed, “If they’re going to do this

kind of stuff, then for sure we’ll be out of business and
standing in line at the unemployment office.”

Alexandria created the rule back in 2005 to prevent taxi

drivers from spending all their time picking up fares at hotels
and the airport. Since that time, one company has
closed because it couldn’t meet the requirement and another
has been put on probation. But Transportation Chief Bob
Garback says the city doesn’t want to shut anybody down:

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 18 December 2009

“Our objective is just to make sure that we have reasonable Gee, thanks, Mitt.
taxi service here. Shutting companies down doesn’t really
serve that purpose.”

Alexandria didn’t want to shut companies down. Someone just had an FISCALLY CONSERVATIVE BLOG FEEDS
idea and decided to codify it, without much thought as to where cab
drivers actually find passengers, how much it costs to respond to New HUD Same as Old [Cato at
dispatches, and so on.
Liberty]
No doubt most regulators and legislators don’t want to shut companies DEC 17, 2009 08:55A.M.
down. But special interests and activists and irate citizens press their
ideas, and policymakers respond. It always seems like a good idea at the By Tad DeHaven
time: guarantee every worker a minimum wage, put a cap on rising rents,
or make sure that banks lend money to borrowers who can’t really afford U.S. Department of Housing and Urban Development Secretary Shaun
a house. And then when low-skilled workers become too expensive to Donovan recently gave a speech in New York in which he spoke of a “new
hire, or builders decide they can’t make a profit on new apartment direction in housing.” If there’s one constant with cabinet secretaries, it’s
houses, or millions of mortgage holders are unable to make their that they all promise that their department will be new and improved.
payments — well, “Our objective was just to do something reasonable. The following are a few of Donovan’s lines that deserve comment.
We never intended to screw up the workings of the market and
cause firm closings, unemployment, apartment shortages, or a wave of The Federal Housing Administration is providing another
defaults.” But that’s the result of throwing a monkey wrench into the critical bridge to economic stability…And with nearly half of
economy. first-time buyers using FHA loans, it is clear that the FHA has
been central to recovery.

Thanks to his predecessor, Alphonso Jackson, who was “absolutely

FISCALLY CONSERVATIVE BLOG FEEDS emphatic about winning back our share of the market,” the FHA’s
willingness to pick up the subprime lending slack when the housing
Health Reform: Blame Mitt bubble burst has opened the door for a potentially huge taxpayer bailout.
In fact, the government hasn’t just come to dominate the housing finance
[Cato at Liberty] market — it practically is the housing finance market. Thus, there are
DEC 17, 2009 08:57A.M. plenty of doubts as to whether the housing “recovery” Donovan speaks of
is sustainable without the government crutch.
By Michael D. Tanner
In crisis comes enormous opportunity for change — as Rahm
If — and it is still a big “if — Democrats pass a health bill, that bill will Emanuel says, ‘a crisis is a terrible thing to waste.’ Ensuring
owe as much to former Massachusetts governor Mitt Romney as to we don’t starts with getting the government back into the
Nancy Pelosi and Harry Reid. In fact, with the so-called “public option” business of building and preserving affordable housing.
out of the Senate health bill, the final product increasingly looks like the Homeownership is incredibly important. But if this crisis has
failed Massachusetts experiment. Consider that the final bill will likely taught us anything, it’s that it is long past time we had a
include: balanced, comprehensive national housing policy – one that
supports homeownership, but also provides affordable rental
• An individual mandate opportunities, and ensures nobody falls through the cracks.

• A weak employer-mandate Like his boss, Donovan’s use of the word “change” is just a euphemism
for bigger government. His contention that the government needs to get
• An Exchange (Connector) “back” into affordable housing is laughable. When did it leave?

• Middle-class subsidies This crisis has illustrated that only the Federal government
has the scale and mechanisms to deal effectively with some of
• Insurance regulation (already in place in Massachusetts before the forces that caused it.
Romney’s reforms)
It was the federal government’s “scale and mechanisms” that helped
As to why this will be a disaster for American taxpayers, workers, and cause the crisis! Only powerful institutions with national “scale” such as
patients, I’ve written about it here, and my colleague Michael Cannon the Federal Reserve, Fannie and Freddie, and HUD had the power and
has covered it here and here. potential to create such a nation-wide bubble, bust, and recession.

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 18 December 2009

Donovan wants the arsonist to put out the fire. All that said, there are a couple of areas where Walker and I agree. For
one, he writes:
The Federal government can be a key partner in helping
communities foster the kinds of synergies between housing, More importantly, I don’t think something as important as
education, public safety, and health you’ve helped nurture at regulation should be written to trick the CBO. It should be
the neighborhood level. written to produce the best heath care system possible, not
the best looking CBO score possible.
Words like “synergy”, “nurture”, and “foster” are vacuous bureaucratic
rhetoric. They are supposed to imply that the federal government can Hear, hear. Yet congressional Democrats have been doing just that,
turn decaying urban centers into utopias with gobs of taxpayer money gaming the CBO’s rules to hide the implicit subsidies their legislation
and bureaucratic meddling. That’s just bunk. would provide to large private insurance companies.

In my recent paper on three decades of scandals, mismanagement, and For another, he and I both agree that that legislation is little more than a
policy failures at HUD, I show that little has changed at HUD other than bailout of large private insurance companies and would be worse than
the individuals occupying the throne. The history of Shaun Donovan’s doing nothing.
tenure is yet to be written, but his speech makes me pessimistic.
My question for Walker, and for Howard Dean, and for Markos
Moulitsas is: will they join me in calling for the Senate to obtain a CBO
cost estimate of the off-budget part of the insurance-industry bailout
FISCALLY CONSERVATIVE BLOG FEEDS (i.e., the individual and employer mandates)? Do they think Senate
Majority Leader Harry Reid should at least be up front with his base
Strange Bedfellows? [Cato at about what he’s asking them to swallow? Do they think that We, the
People deserve to know the whole truth about this bill?
Liberty]
DEC 17, 2009 08:52A.M.

By Michael F. Cannon FISCALLY CONSERVATIVE BLOG FEEDS

Jon Walker at FireDogLake says I’ve got the wrong smoking gun: New Study: Hadley Center and
The smoking gun was a manual put out by the CBO in CRU Apparently Cherry-picked
May…It spelled out exactly how much regulation was “too
much” regulation. It explained what was the magical Russia’s Climate Data [Cato at
threshold that would cause [CBO director] Doug Elmendorf
to declare some private market part of the government Liberty]
budget. Now, I’m angry about this for different reasons than DEC 17, 2009 08:47A.M.
the Cato Institute. I think it is insane that there could be any
level of regulation that would make the private market part of By Andrei Illarionov
the federal budget. Either the money is going through the
federal treasury or it is not. I don’t think the the CBO director Yesterday, the Moscow-based Institute of Economic Analysis (IEA), of
should have the power to see gray areas on this issue…There which I am President, issued a study (in Russian), “How Warming Is
is no real logic to it, he simply decided what he thought was Being Made: The Case of Russia.” The report, prepared by IEA director
enough regulation to make something part of the budget. Natalya Pivovarova, suggests that the Hadley Center for Climate Change
based at the headquarters of the British Meteorological Office in Exeter
To be sure, Walker and I have different ideas when it comes to (1) health (Devon, England) and the Climate Research Unit of the University of
care reform. (Not that you asked, but here are my ideas.) We likewise East Anglia (CRU) in Norwich (England) apparently cherry-picked
disagree that (2) the CBO’s May 27 paper was the smoking gun. That Russian climate data.
paper laid out the CBO’s (vague) criteria for including “private” financial
transactions in the federal budget (and I duly linked to it in my ‘smoking The IEA report shows that Russian meteorological-station data in the
gun’ post). But the December 13 memo is the first documented instance last 130 years did not substantiate the rate of warming on Russian
of Democrats gaming those criteria. And I disagree that (3) this was all territory suggested by the Hadley Climate Research Unit Temperature
Elmendorf’s decision, (4) the federal budget should reflect only money (HadCRUT) database, which has now been partially released.
that passes through the Treasury (instead of all the money that the feds
control), and (5) there’s no logic behind the CBO’s criteria. IEA analysts point out that Russian meteorological stations cover most
of the country’s territory, while the HadCRUT used data from only 25%

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 18 December 2009

of such stations in their calculations. Over 40% of Russian territory was FISCALLY CONSERVATIVE BLOG FEEDS
not included in their global temperature calculations even though there
was no lack of meteorological stations and observations. The data of Time for a New Glass-Steagall?
stations located in areas not listed in the HadCRUT survey often shows
slight cooling or no substantial warming in the second part of the 20th [Larry Kudlow’s Money
century and the early 21st century.
Politic$]
The HadCRUT database includes specific stations providing shorter DEC 17, 2009 07:27A.M.
observations and incomplete data highlighting the warming process,
rather than stations providing longer and uninterrupted observations Sen. John McCain (R., Ariz.) thinks so. We spoke last night on The
not demonstrating significant warming. On the whole, HadCRUT Kudlow Report.
specialists use the incomplete findings of meteorological stations far
more often than those providing complete observations. IEA analysts
found that the climatologists used the data of stations located in large
populated centers that are influenced by the “urban heat effect” more
frequently than the unbiased data from the stations located in less
populated places.

The IEA authors calculated that the scale of actual warming for the
Russian territory in 1877-1998 was probably exaggerated by 0.64°C.
Since Russia accounts for 12.5% of the world’s land mass, such an
exaggeration for Russia alone should have an impact on the IPCC claim
that the global temperature in the last century has risen by 0.76°C.

If similar procedures have been used for processing climate data from
other national data sources, the impact on the rate of change in global
temperature would be considerable.

The IEA report concludes that it is necessary to recalculate all global

temperature data in order to assess the real rate of temperature change
during the last century. Global temperature data will have to be modified
because the calculations used by Copenhagen Conference on Climate
Change analysts are based on HadCRUT research.

FISCALLY CONSERVATIVE BLOG FEEDS

Gov. Heineman Urges Nelson to

Vote Against Health Care Bill
[The Club for Growth]
DEC 17, 2009 08:40A.M.

Here

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