Cato Media Updates

Tear Down This Wall … between the U.S. and Cuba

Thu, 19 Nov 2009 06:00:00 -0600

Ian Vásquez, director, Center for Global Liberty and Prosperity:

The decades-old U.S. embargo against Cuba has failed to promote any kind of reform or respect for human rights within Cuba. It should be ended, but we should not expect that doing so will lead to meaningful democratic change.

The true practical advantage of lifting the embargo would be to eliminate one of the regime's favorite excuses for the failures of its own policies. Ending the embargo would also restore the rights of Americans to trade with and travel to a country that does not pose a security threat to the United States.

Short of a full suspension of economic sanctions against Cuba, the most effective U.S. measure to promote positive change on the island is an end to the travel embargo. An increase in hundreds of thousands of U.S. visitors to Cuba would inevitably establish new relations, independent of the Cuban state, between American and Cuban citizens. That would also include the spread of informal economic activity that would further make ordinary Cubans less dependent on the state.

On balance, an end to the travel embargo would favor the spread of liberty in Cuba, though significant change won't come unless and until the Cuban regime itself changes policies.

Don't Buy $849B Price Tag for Reid Bill

Thu, 19 Nov 2009 06:00:00 -0600

Michael D. Tanner, senior fellow:

We shouldn't get too excited about the selected leaks that suggest this bill will cost just $849 billion and actually trim the budget deficit. If history is any guide –judging by CBO scoring of the House bill and the earlier Senate Finance Committee bill – we can expect a host of accounting gimmicks to hide the bill's true costs.

For example, it's already apparent that this bill doesn't include the $200 billion needed for the so-called 'doc fix' to avoid a 21 percent cut in Medicare reimbursements next year. Nor does this 'score' include costs shifted onto individuals, businesses, and state governments. Until we see the actual bill language and the full CBO report we have nothing except a bill that is going to cost Americans a whole lot of money.

Frank Bill Will Politicize Bailouts, Not Eliminate Them

Tue, 17 Nov 2009 06:00:00 -0600

Mark A. Calabria, director of financial regulation studies:

Instead of eliminating the Federal Reserve's ability to bail out companies deemed "too big to fail," the proposal now under consideration by Chairman Barney Franks's committee will extend those powers to any company. Although we are told that now "debt holders will be on the line" rather than the taxpayer, the truth is that there was already the ability to impose losses on debt holders, either via FDIC receivership or a bankruptcy court.
The problem hasn't been an inability to impose losses, it has been an unwillingness. The Frank proposal does nothing to change that, continuing the Fed's discretion to decide whom to bail out and how to bail them out. So while Rep. Frank, as well as President Obama, claims his framework will protect the taxpayer and eliminate the need for bailouts, nothing could be further from the truth

The Frank-Obama plan all but guarantees that the resolution of large firms will be dictated by politics, rather than rule of law. The plan would allow a political body to decide which contracts to honor and whom gets paid first. Contracts and legal precedent will be abandoned for the whims of politics, making the pricing of debt and equities securities more complex and less efficient, raising the cost of capital with a resulting reduction in economic activity.

Where's Obama's "Change" on Asia Policy?

Thu, 12 Nov 2009 06:00:00 -0600

Doug Bandow, senior fellow:

The agenda for President Obama's Asia trip appears mainly focused on reinforcing the status quo--namely, Washington's Cold War-era security ties.

The U.S. will remain engaged in East Asia. But America is losing its ability--and any need--to preserve military hegemony in the region. President Obama should use his visit to begin moving the region into a new era of less dependence on Washington.

The recent naval clash between South and North Korea demonstrates that potential conflicts remain. However, without any link to a global competitor like the Soviet Union, such regional instability poses little threat to the U.S. The Obama administration should pursue a transformational agenda, emphasizing economic integration while promoting military detachment.

The most important relationship for the U.S. in the 21st century will be between the existing superpower and the potential superpower. Washington should strengthen economic and trade ties with China, including addressing irresponsible U.S. fiscal practices. The U.S. also needs to forge a cooperative relationship on difficult regional issues, such as North Korea, while speaking frankly about human rights violations.

The president should treat Japan as a full partner, which means shifting to genuinely mutual security ties. Rather than merely adjust its controversial Status of Forces Agreement, Washington should withdraw its garrisons from Japanese soil, turning defense responsibility for Japan over to Tokyo. The U.S. also should work to calm Japan's neighbors as Tokyo takes on greater responsibility for East Asian security.

Although Washington should engage North Korea over its nuclear program, the U.S. should allow the Republic of Korea to lead the nonproliferation effort. The South is able to deter North Korean adventurism and has the most at stake in maintaining a peaceful peninsula. America should engage the North directly while informing Pyongyang that full international integration requires the participation of China, Japan and Russia as well.

Want More Jobs, Mr. President? Butt Out of the Economy

Thu, 12 Nov 2009 06:00:00 -0600

Chris Edwards, director of tax policy studies:

When in doubt, hold a summit.

President Obama wondered aloud from a White House podium this morning why the economy is so shaky and unemployment keeps rising above his advisors' projections. His own agenda of higher health care and energy costs, higher taxes on corporations, and more labor regulations is a logical place to look first.

While government spending might be providing a short-term "sugar high" for the economy, U.S. private business investment remains in recession, and without new buildings and machines businesses are not hiring workers. At the December summit, the administration should explore cutting the costs of private investment by major reforms to the corporate income tax. That policy should be paired with steep cuts in government spending to reduce deficits and ease fears in capital markets about the banana republic financial mess in Washington.

Duncan's Race to Nowhere

Thu, 12 Nov 2009 06:00:00 -0600

Neal McCluskey, associate director of the Center for Educational Freedom:

This should really be called the Over the Top Fund. The guidelines for the program should please no one, because they are simultaneously too weak and too much. They are too weak because they don't require states to actually do anything of substance. They are too much because they boil down to indiscriminate spending and a drastic federal overreach.

Have plans for reform? Sure. Break down a few barriers that could stand in the way of reform? That's in there, too.

But the money is a one-shot deal—once paper promises are accepted and the money delivered, it's over.

Mostly this plan, while not requiring any real reform, pushes an unprecedented centralization of education power. It calls for state data systems to track students from pre-kindergarten to college graduation. It calls for states to sign onto "common"—meaning federal—standards. It tries to dictate state budgets. In other words, it does exactly what's been wrong with American education for decades: centralize power in the hands of ever more distant, unaccountable bureaucrats rather than leaving it with the communities, and especially parents, the schools are supposed to serve. And it does it with bigger and bigger gobs of federal taxpayer money.

Andrew J. Coulson, director of the Center for Educational Freedom:

Race to the Top is a system that stimulates competition between the states to produce results that the customer (Secretary Duncan) wants, using financial incentives. Déjà vu, anyone?

It's as though Arne Duncan recognizes the merits of free market forces, but rather than faithfully reproducing them in the field of education, he's decided to give us his own reimagining of them.

Here's the problem. There is already 25 years worth of scientific research comparing real free education markets to traditional public school systems. It overwhelmingly finds that markets do a better job of serving families. But we have no evidence at all that Secretary Duncan's newly invented system will do anyone any good.

So why go to all this trouble to reinvent the wheel, when the secretary's own Department of Education has found that an ongoing federal private school choice program—which gets much closer to a genuine education marketplace—is raising students' reading ability by two grade levels after just 3 years of participation?

Sacrificing the Economy for Climate Change

Tue, 03 Nov 2009 06:00:00 -0600

Patrick J. Michaels, senior fellow in environmental studies:

Newspapers covering the Boxer-Kerry climate bill are reporting that the legislation suddenly faces long odds in the U.S. Senate.

That may be an understatement. Why should the U.S. Senate vote into law a bill that, even if followed by the industrialized nations who adopted the failed Kyoto Protocol, would only reduce global temperature a mere seven percent? Why should they risk their seats when this climate measure would cost untold trillions of dollars and condemn future generations to a reduced standard of living, with no appreciable environmental gain?

Key senators know that global warming science is hardly "settled." New reports are appearing regularly in science journals showing that primitive computer models have overestimated global warming, and that economic growth—and, indeed, human life expectancy—is highly correlated with our current mix of energy technologies. Carbon dioxide emissions in 2009 will be far beneath those of last year for one reason only: economic decline.

It is a mystery why the Obama administration and leaders in Congress would push ahead with the Boxer-Kerry measure. Why would the voting public swallow this bitter and pointless medicine now, as jobless totals mount and homes are foreclosed?

Election Day: A Test for Democrats

Tue, 03 Nov 2009 06:00:00 -0600

Michael D. Tanner, senior fellow:

If Republicans make significant gains in statewide and special elections today, it will be a shot across the bow to Democrats in marginal districts, warning that Americans are deeply troubled by the rapid growth of government under the Obama administration.

Will Democrats like Tom Perriello of Virginia be able to support a “robust public option” as part of a health care package if Republicans sweep to victory in Virginia? If Republicans win or even come close in a deeply "blue" state like New Jersey, will representatives like John Adler think twice about a climate bill that would make energy costs go up in an already weak economy?

Democrats were already deeply divided over health care reform and climate legislation. The results from today's election are unlikely to make their path any easier.

John Samples, director, Center for Representative Government:

Whatever their outcomes, the elections today in Virginia, New York, and New Jersey reflect poorly on the Obama administration. One year ago, Obama won Virginia convincingly. Now all Democrats running statewide seem likely to lose, perhaps by large margins. Democratic governor Jon Corzine may pull through in New Jersey, but the fact that he might lose in such a heavily blue state suggests how far public sentiment has swung against his party and its national leader. The New York election tells us less about national party trends than about struggles within the GOP. Still, a conservative Republican victory in upstate New York would suggest Democratic weakness rather than strength.

Other signs agree with the portents of these elections. Obama's job approval dropped more in the third quarter of 2009 than it had for any other president over the last half century. A solid majority of Americans believe the nation is "on the wrong track." Support in public opinion for Democrats in Congress has dropped steeply.

All in all, the evidence suggests the Obama administration might be on the same path that led the Clinton presidency to the election of 1994. But there is an important difference: In 1994, the public had some faith in the alternative to Clinton and the Democrats in Congress. In 2009, the public still has doubts about the Republican alternative to Pelosi and Obama. Those doubts came from the failings of the Bush administration. Until the Republicans reject the ideas that led to those failings – Big Government at home and crusades for democracy abroad – they will remain a second best alternative to Democrats that the public distrusts.

Election Outcome Won't Stabilize Kabul

Mon, 02 Nov 2009 06:00:00 -0600

Malou Innocent, foreign policy analyst:

President Karzai's "victory" in the Afghan presidential election does little to increase the legitimacy of the government in Kabul. A necessary condition for a successful counterinsurgency campaign--the current American strategy--is the legitimacy of the Afghan government. Sadly, there will not be a legitimate central government for some time to come.

Pervasive corruption is contributing to illegitimacy, collapse of public confidence in the government, and to the resurgence of the Taliban. Reports that President Karzai's brother is taking payments from the CIA do not help. The U.S. government works at cross purposes when it attempts to install a "legitimate" centralized government, wags a sanctimonious finger when elections are riddled with pervasive levels of fraud and vote-fixing, and then goes behind the backs of millions of Afghans by having a close working relationship with the brother of the re-elected President.

Unfortunately, the U.S. has assisted and sponsored a corrupt, illegitimate, and slightly autocratic regime while purporting to advance the values of freedom and democracy. The entire rationale for the presence of the U.S. and its allies in Afghanistan rests on democracy, stability, and winning hearts and minds. These goals may not even be realistic, let alone achievable in the near future.

The Obama administration should keep in mind that defeating a large-scale insurgency and creating a legitimate central government in Kabul is not critical to keeping America safe. Counterinsurgency is both the most expensive option for the U.S. and the one least likely to succeed. Defeating al Qaeda is a must, but sending more troops to Afghanistan is neither a necessary nor sufficient condition to achieve that objective.

NAEP Scores Are In But Not Up

Thu, 29 Oct 2009 06:00:00 -0500

Neal McCluskey, associate director of the Center for Educational Freedom:

Today's report, "Mapping State Proficiency Standards Onto NAEP Scores: 2005-2007" makes one thing very clear: Government control of education has put us on a road to failure. And no, national academic standards are not going to get us where we need to go.

According to the report, almost no state has set its "proficiency" levels on par with those of the National Assessment of Educational Progress (NAEP), the so-called "Nation's Report Card." Indeed, most have set them at or below NAEP's "basic" level. Moreover, while some states that changed their standards between 2005 and 2007 appeared to make them somewhat tougher, most did not. Indeed, in 8th grade reading all seven states that changed their assessments lowered their expectations, and in 8th grade mathematics nine of twelve states dropped their bars.

Some will argue that this demonstrates an obvious need for national curricular standards. But that is the opposite of the report's clear implication: Politicians and bureaucrats will always do what's in their best interest – keep standards low and easy to meet – and will do so as long as politics, not parental choice, is how educators are supposed to be held accountable.

Rather than continuing to drive headlong toward national standards -- the ultimate destination of the pothole-ridden, deadly, government schooling road – we need to exit right now. We need to take education power away from government and give it to parents. Only then will we be on a highway to the excellent education we want.

Congress Hurting Diplomatic Progress with Iran

Thu, 29 Oct 2009 06:00:00 -0500

Justin Logan, associate director of foreign policy studies:

Congress seems determined to diminish the already low chances of a diplomatic solution to Iran's nuclear program.

In addition to pushing forward with unilateral sanctions on Iran, Congress has now drawn up a bill stating that Washington "is wholly capable, willing, and ready to use military force to prevent Iran from obtaining or developing a nuclear weapons capability" and calling on the Pentagon to provide Congress with a sketch of available military options against Iran.

This bill will do two things: diminish the prospect of a diplomatic resolution to the problem, and burnish its supporters' nationalist credentials in the upcoming 2010 election. Unfortunately, Congress appears more interested in using the Iran issue as a domestic political football than it does in providing assistance to the Obama administration.

The Islamic Republic is a poor, weak country that lives in a rough neighborhood, has terrible relations with the world's largest power, and recently suffered heavy blows to its legitimacy. These are the realities that underlie Iranian diplomacy on the nuclear issue. Skittishness and erratic behavior is to be expected. The best way to help the process forward would be to keep the political temperature low, which could help lower Iran's threat perception and make it more receptive to diplomatic solutions.

Feds Giveth Jobs & Cars, Then Taketh Away Again

Thu, 29 Oct 2009 06:00:00 -0500

Tad DeHaven, budget analyst:

The bad news this morning on the impact of both the federal stimulus and the Cash for Clunkers program should not come as a surprise to anyone who has paid attention to the history of government intervention in the economy.

New data that the jobs created by the stimulus have been overstated by thousands is compelling, but it's really a secondary issue. The primary issue is that the government cannot "create" anything without hurting something else. To "create" jobs, the government must first extract wealth from the economy via taxation, or raise the money by issuing debt. Regardless of whether the burden is borne by present or future taxpayers, the result is the same: job creation and economic growth is inhibited.

At the same time the government is taking undeserved credit for "creating jobs," a new analysis of the Cash for Clunkers program by Edmunds.com shows that most cars bought with taxpayer help would have been purchased anyhow. The same analysis finds the post-Clunker car sales would have been higher in the absence of the program, which proves that the program merely altered the timing of auto purchases.

Once again, the government claims to have "created" economic growth, but the reality is that Cash for Clunkers had no positive long-term effect and actually destroyed wealth in the process.

Right now businesses and entrepreneurs are hesitant to make investments or add new workers because they're worried about what Washington's interventions could mean for their bottom lines. The potential for higher taxes, health care mandates, and costly climate change legislation are all being cited by businesspeople as reasons why further investment or hiring is on hold. Unless this "regime uncertainty" subsides, the U.S. economy could be in for sluggish growth for a long time to come.

Can't Achieve Public Option Without Deception

Thu, 29 Oct 2009 06:00:00 -0500

Michael F. Cannon, director of health policy studies:

Nearly every claim that House Democrats make about their bill is a deception.

Broader Medicaid eligibility does not reduce costs; it shifts costs to the poor through paltry access and low-quality care. The bill would not cost $900 billion; it would cost more than $2 trillion. The bill would not reduce the deficit; it would expand the deficit by creating new government health programs, which always cost more than projected. The cuts to Medicare and Medicaid will never happen because Congress will negate them later, just as Congress is currently trying to negate the 'standard growth rate' cuts to Medicare physician payments. Finally, the bill would force taxpayers to fund abortions and would insure undocumented aliens.

Where's a death panel when you need one?

Michael D. Tanner, senior fellow:

Speaker Pelosi is set to unveil a health care bill today including yet another version of the so-called public option. This one would let providers "negotiate" reimbursement rates with the government-run program.

That's the health care equivalent of negotiating with Tony Soprano.

But regardless of how much lipstick they put on this pig, it still is a government takeover of the health care system that would all but eliminate private insurance and force millions of Americans into a government-run system. Apparently the House leadership has decided that if at first you can't get the votes by being honest about your true intentions, lie, lie, again.

Hate Crime Law Kills One Bird with Two Stones

Wed, 28 Oct 2009 06:00:00 -0500

Tim Lynch, director, Project on Criminal Justice:

The hate crime measure President Obama will sign into law today will be—and should be—challenged in the courts as an unconstitutional overreach of federal power.

In 2000, the Supreme Court struck down the Violence Against Women Act in United States v. Morrison, finding that Congress had overstepped its authority under the Commerce Clause. The new hate crime law will be invalidated for similar reasons.

In the meantime, the law will not prevent any violent crime from happening. Any depraved criminal who is prepared to murder another human being or commit arson is not going to suddenly drop his plan because the president approves new legislation. And hate crimes laws take the government too close to the notion of "thought crimes," because investigators will now have to dig into peoples' lives in order to gather "evidence" to prove the bias element in a court of law. That sort of investigative work is unnecessary because all violent acts are already against the law. This measure is about identity politics, not crime-fighting.

More Hot Air for the Home Ownership Bubble

Tue, 27 Oct 2009 06:00:00 -0500

Mark A. Calabria, director of financial regulation studies:

Rather than seeing the financial and mortgage crisis as the result of a housing bubble, Washington continues to believe it was the correction in house prices that was the problem. The politically obvious and simple solution: blow lots of hot air back into that bubble. Sadly, this is another "solution" that looks great in the short run, but is costly in the long run.

The proponents of the tax credit believe we need to replace the decline in speculative demand for housing...with yes, new speculative demand for housing. This analysis could not be more flawed. The tax credit largely acts to keep housing prices from falling further. However, that is how markets are supposed to clear in an environment of excess supply. If there's too much housing, the way to address that is to allow housing prices to fall, which attracts buyers back into the market.

We should also recognize that the tax credit does not help the buyer—it helps the seller, by allowing the seller to charge that much more for the price of the home.

Perhaps the worst impact of this policy is that it encourages the continued building of homes, only adding to the over-supply, which itself will protract and extend the recession. Witness the recent news that housing starts in the U.S. just hit a nine-month high. While these levels are still low in historic terms, and housing inventories are declining, we still have an excess of housing. The damage done by creating a false floor to housing prices is that builders don't respond to inventory, they respond to prices, and as long as there is a positive gap between prices and construction costs, builders will build. The tax credit only serves to widen that gap between prices and construction costs.

The central flaw in the thinking behind the tax credit proposal is its assumption that we need to re-inflate the housing bubble. The previous level of housing demand, from say 2003 to 2006, was not driven by fundamentals. There had to be a correction in the housing market. Our choices are to either absorb that correction quickly and move on, or to prolong that correction, maybe even making it worse, by trying to create a false floor to the market.

Happy 8th Anniversary, Patriot Act

Mon, 26 Oct 2009 06:00:00 -0500

Julian Sanchez, research fellow:

We've now had eight years to assess the effects of the sprawling USA PATRIOT Act, passed with extraordinary haste in the panic-stricken aftermath of 9/11.

It has become clear in the interim that, as civil libertarians feared at the time, several of the law's provisions lacked adequate checks to protect innocent Americans from sweeping government surveillance. With the benefit of hindsight, we can see that our past intelligence failures were not the result of insufficient spying power. We can also see, from a steady stream of reports from both the press and government watchdogs, that diluting the civil liberties safeguards put in place after the rampant abuses of the Nixon era has only invited new abuses. As Congress debates the reauthorization of several key Patriot provisions, our representatives now have an opportunity to strike a more careful balance, and put to rest the misguided notion that our civil liberties are a security risk.

Unfortunately, President Obama—a critic of his predecessor's surveillance excesses—appears loath to surrender powers he once condemned. His administration has sought to kill all but the most cosmetic reform proposals. The easy course for legislators will be to surrender to inertia and fearmongering, but if they are serious about protecting Americans' privacy and freedom, a thorough overhaul of the burgeoning post-9/11 surveillance state is the only truly patriotic act.

Obama Faces Chilly Reception to Warming Goals

Fri, 23 Oct 2009 06:00:00 -0500

Patrick J. Michaels, senior fellow in environmental studies:

President Obama's renewed push for cap-and-trade legislation is absolutely the wrong move at the wrong time, in terms of both policy and politics.

For one thing, lawmakers in his own party won't be able to stomach it at this point. Everybody seems to forget that the ire in town hall meetings over the summer really began over climate policy. There wasn't even a health care bill to be mad about until well into August, and the public was already up in arms over this administration's aggressive and intrusive policy direction. Obama is putting his friends in Congress on a path that will make 1994 seem like a day at the beach.

With Obama's initiatives already having added trillions to our deficit, cap-and-trade would impose an additional cost of over $10 trillion on the U.S. economy. At the same time, it will do nothing about our climate. The president knows that even if every nation that has committed to the Kyoto Protocol adopted cap-and-trade, only 7 percent of the warming predicted by the United Nations would be prevented. The president also knows that planetary temperatures haven't warmed a bit in the last 14 years, and that the extreme forecasts that provide support for extreme legislation are failing, even as he speaks about warming in this very chilly autumn.

'Consumer Protections' Achieve the Opposite

Thu, 22 Oct 2009 06:00:00 -0500

Mark A. Calabria, director of financial regulation studies:

On the Consumer Financial Protection Agency Act of 2009:

Perhaps this proposal's greatest flaw is that it will do nothing to avoid the next financial crisis and would not have avoided the current crisis.

The housing bubble was driven by a lack of equity on the part of borrowers, coupled with a speculative bubble in housing and increased unemployment resulting from the bursting bubble. Nothing in this proposal would require borrowers to actually have "skin in the game." In fact, the proposal would increase the chance of future bubbles by allowing borrowers to keep the upside of speculative credit activity, while pushing even more of the downside risk onto others.

The proposal also begins a dangerous new precedent for legislation: the agency's activities would not be funded by appropriations, as is, say, the Consumer Product Safety Commission. It would be largely funded by the Federal Reserve's balance sheet. This will eliminate any accountability of the agency to the American public, just as the Fed's bailouts have lacked transparency and accountability.

The new agency would have almost unlimited power to decide which industries and products are covered, with the exception that products offered by Wall Street—the very Wall Street at the center of the financial crisis—would not be covered and would continue to be regulated by the Securities and Exchange Commission (SEC).

On the Expedited CARD Reform for Consumers Act of 2009:

Credit cards allow the un- or under-employed to spend now out of future expected income, which is key during a financial downturn. But the credit "reform" proposal under consideration would have the effect of limiting credit solely to the financially stable, leaving those most in need outside of our formal financial system. This would force needier households to borrow from less efficient, and often more costly, sources, such as friends and family, or pawn-shops and loan sharks. The trend in recent months of households shifting away from mortgage debt to credit card debt has been essential in allowing households to maintain spending in the face of declining home values; absent such spending, our economy would be in even worse shape.

Of course, financial contracts are like any other form of contract: they should not be allowed to abrogated by courts merely on the basis of politics.

Net Neutrality Regs: Still Unnecessary

Thu, 22 Oct 2009 06:00:00 -0500

Timothy B. Lee, adjunct scholar:

When Congress was first considering network neutrality regulations in 2006, pro-regulation activists insisted that neutrality rules were critical to preserve the open Internet. Congress chose not to enact regulations, and three years later the Internet is as open and competitive as ever.

Enacting regulations is no more urgent today than it was then. And there's a real risk that new regulations will tie the Internet up in red tape and limit future innovation. This danger is especially severe in the wireless sector, where technologies and business models continue to evolve rapidly.

Afghan Runoff Election Will Not Create Legitimacy

Tue, 20 Oct 2009 06:00:00 -0500

Malou Innocent, foreign policy analyst:

In Afghanistan, whether a second-round presidential election takes place or not, the fact remains there will not be a legitimate central government for some time to come.

Long-term success in counterinsurgency--the current U.S. strategy--depends on the legitimacy of the host nation's government. But from the lowliest traffic policeman to the highest levels of parliament, Afghanistan is full of corruption and graft. This pervasive corruption is contributing to the collapse of public confidence in the government and to the resurgence of the Taliban.

Neither defeating a large-scale insurgency, nor creating a legitimate central government in Kabul, is critical to keeping America safe. Counterinsurgency is both the most expensive option for the U.S. and the one least likely to succeed, so it makes little sense for the Obama administration to continue on this path.

Proponents of counterinsurgency, many of whom support the infusion of 40,000 more U.S. troops to Afghanistan, need to come clean on the total cost of that strategy and start answering difficult questions. Is Afghanistan's corrupt central government worth fighting and dying for? How many hundreds of billions of dollars will America spend? How many U.S. and NATO soldiers will lose their lives? And is Afghanistan the most crucial place in the world for America to expend those resources?

Even if America were to commit several hundred thousand troops, decades of its time, and untold billions of dollars to Afghanistan, success would hardly be guaranteed and al Qaeda would simply shift its presence to other regions of the world. In this respect, it appears the current debate over Afghanistan has been an inadequate examination of core assumptions.

An Outbreak of Scruples on Health Reform Budgeting?

Mon, 19 Oct 2009 06:00:00 -0500

Michael D. Tanner, senior fellow:

The Democratic leadership in Congress may finally have pushed the budgetary dishonesty around health care reform too far for even its own members to swallow.

Principled Democrats like Kent Conrad of North Dakota are refusing to support the leadership's proposal to deficit-finance a nearly $250 billion fix to Medicare reimbursements. Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi want to keep the change to Medicare's "sustainable growth formula" separate from the main health care reform bill in order to pretend that the health care bill is deficit-neutral. But the reaction from more honest, fiscally responsible Democrats only underscores the difficulties that the leadership faces in trying to put together a health care bill that satisfies both liberals' demands for expanded coverage and moderates' demand for fiscal sanity.

Michael F. Cannon, director of health policy studies:

The Senate leadership has long been a lost cause in terms of budgetary discipline. But at least House Democrats were, until recently, honest enough to include the cost of the nearly $250 billion bump in Medicare physician payments in their health care reform legislation.

Unfortunately, House Democrats have since decided that dishonesty is the better strategy. They, like their Senate counterparts, now plan to strip that additional Medicare spending out of health "reform" and enact it separately. (Democrats are already trying to exempt that spending from pay-as-you-go rules, making it easier for them to expand our record federal deficits.) Why enact it separately? Because excising that spending from the "reform" legislation reduces the cost of health "reform"! That and the other fibs in the Senate's reform bill hide more than half of the measure's true cost—which any serious reading would put at closer to $2 trillion.

The only good news may be this: if the dishonest budget gimmick succeeds, then Congress will have "fixed" Medicare's physician payments. Absent that "must pass" legislation, the Democrats health care takeover would lose momentum, and would have to stand on its own merit. That would be good for the Republic, though not for the legislation.

The 'Stimulus Jobs' Oxymoron

Thu, 15 Oct 2009 06:00:00 -0500

Tad DeHaven, Budget Analyst:

The release of jobs figures from the president's "stimulus" effort is little more than political theater. Regardless of how many jobs the government claims to create, the economic facts are that the government cannot create anything without destroying something else in the process. An untold number of current and future jobs will disappear or never be created because of the wealth extracted from the economy to pay for the stimulus scheme.

Whether the burden to pay for the government’s interventions are borne by current taxpayers or assumed by future generations stuck with the consequent debt, the end result is a relatively lower standard of living. Yesterday, the president stated, "We're going to continue to explore each and every avenue that I can think of that will lead to job creation and economic growth." Here’s an idea: rescind the remaining “stimulus” money and begin the process of downsizing the federal government, which fostered this economic downturn to begin with.

Health Care Bill Creates National ID Program

Mon, 12 Oct 2009 06:00:00 -0500

Jim Harper, director of information policy studies:

Thanks to the push for a more transparent Congress, we’re getting a better look at what new health care regulations might shape up to be. Alas, not a very good look: with weak justifications, the Senate Finance Committee is working on a strange “plain language” description of the bill, and apparently not planning to read or release the final language.

I’ve found something worth noting, though, in each of the bill versions I’ve seen. The Senate Finance Committee’s Rube Goldberg plan for health care in America has a provision establishing paragraph talking about “Eligibility Verification.”

If you want to access the “state exchanges” or collect the federal tax credits created by the bill, your eligibility will have to be verified. Here’s what it says:

Eligibility Verification. In order to prevent illegal immigrants from accessing the state exchanges or obtaining federal health care tax credits, the Chairman‘s Mark requires verification of the following personal data. Name, social security number, and date of birth will be verified with Social Security Administration (SSA) data. For individuals claiming to be U.S. citizens, if the claim of citizenship is consistent with SSA data then the claim will be considered substantiated. For individuals who do not claim to be U.S. citizens but claim to be lawfully present in the United States, if the claim of lawful presence is consistent with Department of Homeland Security (DHS) data then the claim will be considered substantiated. Individuals whose status is expected to expire in less than a year are not allowed to obtain the tax credit. Individuals whose claims of citizenship or lawful status cannot be verified with federal data must be allowed substantial opportunity to provide documentation or correct federal data related to their case that supports their contention.

Translation: Every American who wants to access a “state exchange” or get the tax credits in the bill would have to submit data about themselves to the Social Security Administration or Department of Homeland Security for verification. If you don’t do it, no exchanges or tax credits. If your data doesn’t match, no exchanges or tax credits, unless you can convince SSA or DHS bureaucrats that you are who you say you are.

If you’re one of the millions of people about whom the Social Security Administration has bad data, plan to spend long hours waiting in line to plead with indifferent federal bureaucrats for health care access. When attacks and complications on the verification system break down, they’ll move to “strengthen” the system. Get ready to dig up your birth certificate—they’ll want to scan it into their computers—plan to be photographed and fingerprinted, and get ready to stand in line for your national ID card.

For Obama, Peace in the Morning, War in the Afternoon

Fri, 09 Oct 2009 06:00:00 -0500

Ted Galen Carpenter, vice president for defense and foreign policy studies:

Hours after thanking the world for the Nobel Peace Prize this morning, President Obama will gather with his war advisors to ponder sending 40,000 more troops into a country where our national security objectives are unclear at best.

Instead of embracing General McChrystal's proposal for a substantial increase in the U.S. military presence--or even adopting a "McChrystal-Light" strategy--the Obama administration should begin a phased withdrawal of troops over the next 18 months, retaining only a small military footprint relying on special forces personnel. Otherwise, America will be entangled for years--or decades--in pursuit of unattainable goals.

We need to "define success down" in Afghanistan. That means abandoning any notion of transforming ethnically fractured, pre-industrial Afghanistan into a modern, cohesive nation state. It also means reversing the drift in Washington's strategy over the past eight years that has gradually made the Taliban (a parochial Pashtun insurgent movement), rather than al Qaeda, America's primary enemy in Afghanistan. A more modest and realistic strategy means even abandoning the goal of a definitive victory over al Qaeda itself.

Instead, we need to treat the terrorist threat that al Qaeda poses as a chronic, but manageable, security problem. Foreign policy, like domestic politics, is the art of the possible. Containing and weakening al Qaeda may be possible, but sustaining a large-scale, long-term occupation of Afghanistan and creating a modern, democratic country is not.

The Real Cost of the Baucus Bill: $2 Trillion+

Thu, 08 Oct 2009 06:00:00 -0500

Michael D. Tanner, senior fellow:

The CBO scoring makes it clear that the Baucus bill's reduction in future budget deficits comes not from controlling government spending or reducing health care costs, but because of a rapid escalation in tax revenues. The bill imposes a 40 percent excise tax on health-insurance plans that offer benefits in excess of $8,000 for an individual plan and $21,000 for a family plan. Insurers would almost certainly pass this tax on to consumers via higher premiums. As inflation pushes insurance premiums higher in coming years, more and more middle-class families would find themselves caught up in the tax.

In fact, overall, the tax increases in the bill are more than double the amount of deficit reduction. This isn't a health care efficiency bill or a cost containment bill. It is a tax and spend bill, pure and simple.

Michael F. Cannon, director of health policy studies:

The CBO score of the Baucus bill is like a mystery novel with the last 50 pages missing. It fails to reveal both the full cost of the bill and the budget gimmicks that Mr. Baucus uses to hide that cost.

The Baucus bill will not reduce the deficit, and it would ultimately cost taxpayers more than $2 trillion—just like every other bill Congress has produced so far.

The biggest gimmick employed by the bill is that its individual mandate pushes more than half of the legislation's cost off-budget, and onto businesses and individuals who will have to shoulder that burden. A real-world parallel already exists in the Massachusetts health care plan, where private-sector mandates account for 60 percent of the cost. In 1994, CBO counted those mandated private payments in the federal budget, and it helped kill the Clinton health plan. This time around, Democrats were very careful to craft their mandates so that they just barely avoided having the CBO include those payments in the federal budget. But the CBO's decision does not change the fact that those private-sector mandates are part of the cost of this bill.

The second-biggest gimmick is assuming that Congress will let the "Sustainable Growth Rate" cuts in Medicare physician payments to occur. Starting in 2003, Congress has repeatedly blocked those cuts, and there is no reason to think that Congress will behave any differently in the future. So yes, provided that the sun rises in the West, the Baucus bill would reduce the federal deficit.

Behind the CBO’s Baucus Bill Score

Wed, 07 Oct 2009 06:00:00 -0500

Michael D. Tanner, senior fellow:

This is moderation? Although the bill being considered by the Senate Finance Committee is being hailed as a model of moderation and bipartisanship (one Republican may even vote for it), it still represents a government takeover of the health care system.

Start with the price tag. While the top line numbers from the CBO suggest that the bill would cost less than $900 billion over 10 years, and actually reduce future deficits by $81 billion, those numbers fail to tell the whole story. For example, the bill relies on Medicare "savings" that Congress keeps refusing to make. Specifically, Medicare has long been ordered to cut 21 percent from what it pays health care providers—yet, each year since 2003, for reasons both good and bad, Congress has voted to defer the cuts. Does anyone else really think that Congress is simply going to slash payments to doctors and hospitals by 21 percent across the board?

In addition, this bill would still give the government the power to force most Americans to purchase insurance, allow the government to dictate what benefits insurance should offer, and interfere with how doctors practice medicine.

All this, and it would still leave 25 million Americans uninsured.

Eight Years Later, Coherence Still Eludes U.S. Afghanistan Policy

Wed, 07 Oct 2009 06:00:00 -0500

Malou Innocent, foreign policy analyst:

After the better part of a decade, the United States' military effort in Afghanistan still suffers from a lack of clearly defined objectives. In pondering his next moves in the region, President Obama needs to turn back to some basic, but still unanswered questions: Who is the enemy? What are the objectives? Is counterinsurgency meant to achieve the goal of counterterrorism (beating al Qaeda), state-building (bringing stability and democracy to Afghanistan), or both? What would "victory" in Afghanistan even look like? And how will the war stay won, after the United States leaves?

Many critics of the war are confusing the most important question when it comes to the eight-year campaign in Afghanistan: not whether the war is winnable, but whether the mission constitutes a vital national security interest. From that perspective the current open-ended strategy fails.

Success in Afghanistan would hardly be guaranteed even if President Obama were to commit several hundred thousand troops and decades of armed nation-building. And in the unlikely event that we forged a stable Afghanistan, al Qaeda might simply reposition its presence into other regions of the world. It is well past time for the United States to adapt means to ends. Rather than an indefinite military mission with large numbers of U.S. troops, U.S. strategy should focus on assisting and training Afghan forces in order to limit that country's future dependence on foreign troops for security.

Committing still more U.S. personnel to Afghanistan undermines the already weak authority of Afghan leaders, interferes with the ability to deal with other security challenges, and pulls the U.S. deeper into a bloody and protracted guerilla war with no end in sight.

Diminishing School Violence By Increasing School Choice

Wed, 07 Oct 2009 06:00:00 -0500

Adam B. Schaeffer, policy analyst, Center for Educational Freedom:

Attorney General Eric Holder and Education Secretary Arne Duncan are both right: No child should have to fear violence every day just through the simple act of going to school.

Officials propose complicated and expensive reforms of highly dubious value to address problems of violence and criminal activity in public schools. But there is a better, proven way to mitigate these problems: embrace polices that give parents more of a say in where their children go to school, such as education tax credits.

All families should have the option of choosing a safe school for their child. According to the National Center for Educational Statistics, students in public schools are more than four times as likely as their private school peers to avoid certain places at school for fear of attack or harm. A safe environment should not be available only to the privileged.

If policymakers like Holder and Duncan are serious about lessening kids' exposure to fear and violence, they should promote universal access to smaller, safer, independent schools.

Senators Still Buying Votes with Nation's Defense Budget

Wed, 07 Oct 2009 06:00:00 -0500

Christopher A. Preble, director of foreign policy studies:

By funding a number of programs and weapon systems that the Pentagon does not want, and the troops do not need, members of Congress have elevated parochial interests above U.S. security. The approval of a $626 billion FY 2010 defense appropriation bill shows the Senate has shirked its responsibility to rein in the nation's bloated military budget. The FY 2010 defense authorization conference report will not look much better.

The appropriations bill includes an extra $2.5 billion for the C-17 cargo plane and $1.7 billion for a destroyer that Defense Secretary Robert Gates and the Pentagon do not want. The Senate did omit funding for the alternate F-35 engine, but it appears conferees on the authorization bill will approve $560 million for the project, making it likely funding will slip into the final appropriations bill when the House and Senate work out the differences in each version. Unfortunately, these decisions come at the expense of the troops in the field: $2.4 billion has been cut from the Pentagon's requested operations and maintenance budget.

On the upside, Senators should be congratulated for turning back repeated attempts to provide additional funding for the F-22. They properly nixed a new presidential helicopter. The president and Secretary Gates deserve credit for opposing these wasteful and unnecessary programs, and members of Congress appropriately followed their lead.

Beyond the F-22 and C-17, beyond individual engines or ships, we need a renewed emphasis on cost containment in military procurement. A 2008 GAO report found that 95 major systems had exceeded their original cost estimates by a total $295 billion during the period between 2001 and 2007. Congress effectively paved the way for a continuation of this wasteful status quo by overruling Secretary Gates on several important decisions.

Gates continues to push for sensible procurement reforms, but genuine cost containment is likely only within an environment of shrinking defense budgets. Under that alternate scenario, defense contractors who are best able to meet stringent cost and quality standards will win the privilege of providing our military with the necessary tools, but at far less expense to the taxpayers. And those who cannot will have to find other business.

Cato on Upcoming Supreme Court Cases

Fri, 02 Oct 2009 06:00:00 -0500

Ilya Shapiro, senior fellow and editor-in-chief of Cato Supreme Court Review:

Continuing its trend from this past term, the Court has further front-loaded its caseload with 56 arguments on its docket before the term has even started. Fortunately, unlike last year, we'll see many blockbuster cases, including:

The applicability of the Second Amendment to the States;
First Amendment challenges to national park monuments and a statute criminalizing the depiction of animal cruelty;
an Eighth Amendment challenge to life sentences for juveniles;
a potential revisiting of Miranda rights;
federalism concerns over legislation regarding the civil commitment of "sexually dangerous" persons;
a separation-of-powers dispute concerning the agency enforcing Sarbanes-Oxley;
judicial takings of beachfront property;
the "reasonableness" of mutual fund managers' compensation.

Perhaps more importantly, we also have a new justice and, as Justice White often said, a new justice makes a new Court. While Sonia Sotomayor's confirmation was never in any serious doubt, she faced strong criticism on issues ranging from property rights and the use of foreign law in constitutional interpretation to the Ricci firefighters case and the "wise Latina" speeches that led people to question her commitment to judicial objectivity. Only time will tell what kind of justice Sotomayor will be now that she is unfettered from higher court precedent and the first term is not necessarily indicative. Key questions for the new Court's dynamics are whether Sotomayor will challenge Justice Scalia intellectually and whether she will antagonize Justice Kennedy and thus push him to the right. We've already seen her make waves at the Citizens United, campaign finance reargumen by questioning the scope of corporations' constitutional rights, so it could be that she will decline to follow Justice Alito's example and jump right into the Court's rhetorical battles.

Smoke, Mirrors and Hot Air on Climate Change

Thu, 01 Oct 2009 06:00:00 -0500

Patrick J. Michaels, senior fellow in environmental studies:

The Environmental Protection Agency has just announced its first regulation of greenhouse gas emissions from large emitters such as power plants and major manufacturers. While giving no specifics, administrator Lisa Jackson announced that any permits for new or upgraded facilities will be required to use so-called "best available technology" with regard to emissions of carbon dioxide and other "greenhouse" gases.

While this is EPA's first foray into industrial greenhouse-gas regulation, it will not be its last. And while industry cannot be happy, the Senate is probably relieved, as it struggles with cap-and-trade legislation.

Sens. John Kerry and Barbara Boxer have co-sponsored the rollout of a measure that has stricter near-term emissions reductions that the Waxman-Markey bill that squeaked through the House on June 26. The bill is, as they say, a dog that won't hunt.

Boxer-Kerry imposes emissions cuts in 2020 that are 18 percent larger than in Waxman-Markey, the bill that actually sparked the first angry town-hall meetings. By 2050, it has the same target, which allows the same level of carbon dioxide emissions as the average American in 1867. There is simply no known suite of technologies that can accomplish this while preserving the current standard of living.

Boxer-Kerry will begin with emissions reductions in the next three years. That won't be hard, because the current economic downturn, the most severe in decades, is likely to reduce 2009 emissions by 9 percent from the 2005 level, according to projections by the Environmental Information Agency. Imagine the state of the economy with the 83 percent reduction required by 2050.

There are too many Democratic senators from energy-producing states that will not vote to cut off debate, which requires 60 votes. It's likely only two Republicans will vote for this, leaving it far short. As shown by today's action, emissions regulations are likely to default to Environmental Protection Agency, laying the onus on President Obama, rather than on 33 senators up for re-election next fall.

In any case, the recent announcement by China that they will continue to grow their emissions dramatically means that neither Boxer-Kerry or the EPA will do anything significant about global warming."

Sixty Years On, China Has Prosperity, Still Needs Freedom

Thu, 01 Oct 2009 06:00:00 -0500

James A. Dorn, vice president for academic affairs:

China's rise from an isolated state-controlled economy in 1949 to the world's third largest economy with a vibrant nonstate sector is something to celebrate on the 60th anniversary of the founding of the People's Republic of China.

Under Deng Xiaoping, China's transition from plan to market began in earnest in December 1978. For more than 30 years now, China has gradually removed barriers to a market system and increased opportunities for voluntary exchanges. Special economic zones, the end of communal farming, the rise of township and village enterprises, and the massive increase in foreign trade have enabled millions of people to lift themselves out of abject poverty.

Economic freedom has increased personal freedom, but the Chinese Communist Party has no intention of giving up its monopoly on power. China's future will depend to a large extent on the path of political reform. Further strengthening of private property rights, including land rights, would create new wealth and a growing voice for limiting the power of government. It is doubtful that in another 60 years there will be single-party rule in China.

Public Option Falls Off Runaway Health Care Train

Wed, 30 Sep 2009 06:00:00 -0500

Michael D. Tanner, senior fellow:

The cacophony surrounding whether or not a public option should or will be added to the Senate Finance Committee health care reform bill should not disguise the fact that this would still be a bad bill with or without the so-called public option. This is still a bill that would make Americans pay more through higher taxes, debt, and premiums, while letting the government dictate some of the most important, personal, and private decisions in people's lives. A few less cars, but it's still a train wreck.

Limited Options in Dealing with Iran

Mon, 28 Sep 2009 06:00:00 -0500

Christopher A. Preble, director of foreign policy studies:

The revelation last week of a second secret Iranian nuclear facility, and Iran's test firings over the weekend of its short and medium range missiles, bring a new sense of urgency to the long-scheduled talks between Iran and the P-5 + 1 beginning on Thursday in Geneva. Many in Washington hope that a new round of tough sanctions, supported by all of the major powers including Russia and China, might finally convince the Iranians to abandon their nuclear program.

Such hopes are naive. Even multilateral sanctions have an uneven track record, at best. It is difficult to convince a regime to reverse itself when a very high-profile initiative hangs in the balance, and Iran's nuclear program clearly qualifies. It is particularly unrealistic given that the many years of economic and diplomatic pressure exerted on Tehran by the U.S. government have only emboldened the regime and marginalized reformers and democracy advocates, who are cast by the regime as lackeys of the United States and the West.

But whereas sanctions are likely to fail, war with Iran would be even worse. As Secretary Gates admitted on Sunday, air strikes against Iranian nuclear facilities would merely degrade and perhaps delay, not eliminate, Iran's program. Such attacks would inevitably result in civilian casualties, allowing Ahmadinejad to rally public support for his weak regime. What's more, the likelihood of escalation following a military attack--which could take the form of asymmetric attacks in the Persian Gulf region, and terrorism worldwide--is not a risk worth taking.

The Iranian government must be convinced that it does not need nuclear weapons to deter attacks against the regime. It is likely to push for an indigenous nuclear-enrichment program for matters of national pride, as well as national interest. The Obama administration should therefore offer to end Washington's diplomatic and economic isolation of Iran, and should end all efforts to overthrow the government in Tehran, in exchange for Iran's pledge to forswear a nuclear weapons program, and to allow free and unfettered access to international inspectors to ensure that its peaceful nuclear program is not diverted for military purposes.

While such an offer might ultimately be rejected by the Iranians, thereby revealing their intentions, it is a realistic option--superior to both the stalemate of feckless economic pressure and the horrible ramifications of war.

Cato Institute scholars comment on the vital issues surrounding the G-20 summit that begins Thursday in Pittsburgh

Thu, 24 Sep 2009 06:00:00 -0500

Ian Vásquez, director, Center for Global Liberty and Prosperity:

"Realistic expectations" should be the watchwords for the G-20 this week. If the G-8 could not effectively tackle major world problems, there is little reason to think this even more diverse and unwieldy summit can do so.

The G-20 is made up of a group of rich countries who disagree on leading issues, and a diverse group of developing countries with disparate interests. The agenda is so broad—countries will deal with a set of complex issues including global warming, international financial regulation, trade, aid to poor nations, and reform of the International Monetary Fund—as to make it of little practical use.

Reality also undermines the idea that the G-20 was needed to coordinate macroeconomic responses to the global financial crisis. By the time the G-20 last met in April in response to the crisis, countries had already responded to the crisis on their own and global markets had already hit bottom and had begun recovering. A coordinated exit now also makes little sense since economic conditions vary widely within the G-20. Some countries have high unemployment, some do not; some have low or negative growth, some have maintained high growth; some countries are still seeing deflation, some have worrisome inflation.

The G-20 is a political forum in which we should not invest too many expectations. Were G-20 members to declare their commitment to free trade, we should be pleased with the result.

Daniel Griswold, director, Center for Trade Policy Studies:

World leaders should have one objective at the G-20 summit: keeping the global economy open for business. The summit needs to produce more than lofty statements.

The developed nations, led by the United States, must renounce any further backsliding toward trade protectionism. They should pledge to reduce remaining trade barriers against agricultural products and other goods of special importance to developing countries. The developing countries, meanwhile, should announce steps to open their markets further to manufactured products and services trade to stimulate growth and modernization. All participants should renew their commitment to conclude a comprehensive trade agreement at the World Trade Organization ministerial meeting later this year.

The world economy cannot recover without a rebound in trade, and trade cannot thrive if governments are raising tariff and non-tariff barriers. The most important task of G-20 leaders in Pittsburgh this week will be to return the global economy to the path of openness and expanding trade.

Daniel J. Ikenson, associate director, Center for Trade Policy Studies:

I'm always skeptical when world leaders convene for the purpose of achieving consensus about how to address some global "problem." When politicians with oversized egos don their imaginary capes to battle foes both real and imagined, expect more regulation, more government, less economic growth, and less liberty.

Rising protectionism is a legitimate concern. However, new pledges to avoid protectionist measures are unnecessary. Instead, G-20 leaders should agree to have a crash course on the global economy. They should lock themselves in a Pittsburgh conference room and learn, once and for all, that trade cannot be characterized as an "us" versus "them" proposition or as "our" producers against "their" producers.

In our globalized economy, the definition of a "domestic" company is elusive. The factory floor has broken through its walls and now spans borders and oceans so that citizens in Asia and North America, for example, typically collaborate, through global production and supply chains, from product conception to consumption. Under this set-up, trade barriers represent huge costs to business, workers, and consumers, primarily in the countries implementing them.

The largest American steel company, Arcelor-Mittal, is majority Indian-owned with headquarters in Luxembourg. The largest German steel company, Thyssen-Krupp, is completing a $3.7 billion green field investment in Alabama to produce carbon and stainless steel. Approximately 50 percent of the value of U.S. imports from China is actually Chinese value-added. The rest comprises materials and labor from other countries.

These huge increases in cross-border investment and the proliferation of global supply chains should be enough to convince policymakers that protectionism is, as they say, so last century.

Swaminathan S. Anklesaria Aiyar, research fellow, Center for Global Liberty and Prosperity:

Countries at the G-20 summit at Pittsburgh should focus on:

supporting free trade;
devising individual exit packages from the global economic stimulus; and
opposing irrational caps on the carbon emissions of developing countries.

The U.S. has levied import duties on Chinese exports of tires and steel tubes, despite its promise at the last G-20 summit to refrain from protectionist acts. Many other countries, including developing countries, have imposed anti-dumping curbs of dubious merit. All countries need to rein in protectionist impulses and support free trade.

The last G-20 summit agreed on a coordinated global fiscal and monetary stimulus. Some politicians now propose a coordinated exit from the stimulus, as the recession is ending. This makes no sense, because rates of inflation, growth and unemployment vary dramatically across countries. Countries with higher growth and inflation rates should exit much earlier than those with falling GDP and prices.

The coming Copenhagen conference in December is also on the G-20 agenda. The U.S. seeks emission reductions from developing countries with per capita emissions are tiny. The G-20 should accept the Indian proposal that developing countries should pledge never to exceed the per capita emissions of developed countries. Developed countries should pledge to avoid trade sanctions on developing countries that refuse to accept such caps.

Curb Your Enthusiasm: Americans Should Not Expect Much from Obama's Visit to the UN

Wed, 23 Sep 2009 06:00:00 -0500

Christopher A. Preble, director of foreign policy studies:

President Barack Obama's address to the United Nations General Assembly on Wednesday, and his chairing of the UN Security Council on Thursday, is a grand attempt to tell the world--after eight years of George W. Bush--that the United States will no longer go it alone.

President Obama has a very difficult task, however, if he expects to invest the United Nations with renewed credibility. The UN is a weak and fractured institution, whose limited power and authority has been steadily undermined by a progression of U.S. presidents, both Democrats and Republicans. We should not forget that President Bill Clinton explicitly circumvented the UN Security Council when he chose to intervene militarily in Kosovo in 1999. Clinton's evasion of the UNSC established a precedent for future military intervention that the Bush administration happily capitalized upon to send troops into Iraq in 2003.

Susan Rice, our current UN ambassador, endorsed this approach in 2006 when she called for U.S. military action against Sudan. Prior UN approval of such a mission was unlikely, but ultimately unnecessary, Rice argued at the time, because of the precedent set by President Clinton in Kosovo.

For American policymakers who have demonstrated such disdain for the UN in the past to now profess great respect for the institution should not surprise us. The UN is only as relevant as the member states wish it to be. In areas of common concern, the desire to cooperate and compromise may temporarily trump concerns over protecting state sovereignty and preserving freedom of action to deal with urgent security threats. In most cases, however, we can expect the member states, with the United States in the lead, to pursue policies that they believe (not always correctly, as we learned in Iraq) will advance their security. And if the UN weakly sanctions such actions after the fact, or refuses to do so, that will only reveal its irrelevance.

The Baucus "Bill": Some Good, Some Bad, Some Ugly

Wed, 16 Sep 2009 06:00:00 -0500

Michael D. Tanner, senior fellow:

Sen. Baucus and his fellow "Gang of Six" negotiators have labored mightily and brought forth a mouse—a steroid-enhanced, misshapen mouse, but a mouse nonetheless. In fact, despite months of work, Sen. Baucus has not actually produced a bill, but a 223-page summary of what he hopes a bill will contain. Unfortunately, without seeing actual legislative language, many questions still remain.

Here is some of what we know and don't know:

The Good:

The plan drops the idea of a government-run "public option" in favor of co-ops. Government involvement with these co-ops would essentially be limited to providing start-up grants. The co-ops are unlikely to have much, if any, impact on the cost or availability of health insurance, but are far preferable to a government run plan.

The plan takes the first tentative steps toward allowing people to purchase health insurance across state lines. It would allow states to establish interstate compacts for insurance purchasing beginning in 2015. It would also allow insurers to develop national products that could be sold in any state. National plans would be exempt from state mandated benefits. This doesn't go far enough, and risks simply transferring regulation and mandates from the state to the regional or national level, but a first read suggests it is a step in the right direction.

The Bad:

The plan would force states to increase Medicaid eligibility to individuals at 133 percent of the poverty level, and to enroll single, childless adults. The federal government would pick up some of the increased cost; states would be responsible for at least some of the increase, a provision that will undoubtedly strain already tight state budgets.

While the employer mandate is much watered-down, it is still there. The Baucus plan has no specific requirement for employers to provide insurance. But any employer who fails to do so would have to pay the cost of all subsidies that the government provides his or her workers to help them pay for insurance on their own, up to $400 per worker. Since it will ultimately be the worker who pays the mandate's cost, through reduced compensation or reduced employment, the government will be giving the worker a subsidy with one hand, and taking it back with the other.

The bill would cut payments to the Medicare Advantage program. In response, many insurers may stop participating in the program, while others could increase the premiums they charge seniors. Millions of seniors will likely be forced off their current plan and back into traditional Medicare.

The Ugly

The Baucus plan contains a heavily punitive individual mandate, a requirement that every American purchase a government-designed minimum insurance package. Failure to comply would result in a fine that could run as high as $3,800 for a family of four. Moreover, the mandate may not apply just to those without insurance today. While the summary says that those with "grandfathered" plans would not have to change their current plan to satisfy the mandate, it is vague about what qualifies as "grandfathered." The summary also says that employer-provided plans would have to be changed within five years to comply with new insurance regulations, and that "grandfathered" plans would not be eligible for any subsidies. It is unclear, therefore, whether people will be able to keep their current plans.

The Baucus plan imposes a 35 percent excise tax on health insurance plans that offer benefits in excess of $8,000. Insurers would almost certainly pass this tax on to consumers in the form of higher premiums. Roughly half of Americans, mostly middle-class, would be impacted. There are also "fees" on prescription drug companies, medical device manufacturers, and clinical laboratories. This is simply a way of hiding taxes, and will result in higher health care costs that will be passed on to consumers.

No More Troops for Afghanistan

Wed, 16 Sep 2009 06:00:00 -0500

Malou Innocent, foreign policy analyst:

As public support for the war in Afghanistan hits an all-time low, Joint Chiefs Chairman Mike Mullen has endorsed an increase in U.S. forces there. But President Obama should strongly resist any calls to add more troops. The U.S. and NATO military presence of roughly 110,000 troops is more than enough to carry out the focused mission of training Afghan forces. Committing still more troops would only weaken the authority of Afghan leaders and undermine the U.S.'s ability to deal with security challenges elsewhere in the world.

The Senate hearings this week on Afghanistan are displaying the increased skepticism among many top lawmakers toward a war that is rapidly losing public support. At a Senate Armed Service Committee hearing, Graham asked Mullen, "Do you understand you've got one more shot back home?" alluding to polls showing most Americans oppose the war and oppose sending more troops. "Do you understand that?"

Sadly, a common view among policymakers and defense officials is that if America pours in enough time and resources--possibly hundreds of thousands of troops for another 12 to 14 years--Washington could really turn Afghanistan around.

But while military leaders like Gen. Stanley McChrystal say a new strategy must be forged to "earn the support of the [Afghan] people," Washington does not even have the support of the American people. The U.S. does not have the patience, cultural knowledge or legitimacy to transform what is a deeply divided, poverty-stricken, tribal-based society into a self-sufficient, non-corrupt, and stable electoral democracy. And even if Americans did commit several hundred thousand troops and pursued decades of armed nation-building, success would hardly be guaranteed, especially in a country notoriously suspicious of outsiders and largely devoid of central authority.

The U.S. and its allies must instead narrow their objectives. A long-term, large-scale presence is not necessary to disrupt al Qaeda, and going after the group does not require Washington to pacify the entire country. Denying a sanctuary to terrorists that seek to attack the U.S. can be done through aerial surveillance, retaining covert operatives for discrete operations against specific targets, and ongoing intelligence-sharing with countries in the region. Overall, remaining in Afghanistan is more likely to tarnish America's reputation and undermine U.S. security than would withdrawal.

Obama Roils Trade Cauldron, Burns U.S. Industry

Mon, 14 Sep 2009 06:00:00 -0500

Daniel J. Ikenson, associate director, Center for Trade Policy Studies:

Unsurprisingly, several market indicators are down this morning on news that China will protest an Obama administration move to impose a 35 percent tariff on tires imported from that country.

President Obama's calculated decision to impose the duty on Chinese tires might score him points with Big Labor, but it no doubt will carry significant costs for U.S. interests. The consequences for other links in the domestic tire supply chain—distributors, wholesalers, retailers, industrial users like automakers and consumers—could be severe, as the absence of Chinese-made tires raises costs and prices, and curtails demand in the United States for replacement tires.

And at a broader and more permanent level, all U.S. credibility on matters of international trade policy is now spent.

Back in April, President Obama pledged before other world leaders at the G-20 summit in London that his government would avoid new protectionist measures, as the global economy was struggling to emerge from recession. Clearly, the tire decision abrogates that pledge and gives cover to other governments that have been restrained, thus far, from protecting their own domestic industries for political purposes.

And though the Chinese are not technically permitted to retaliate for Obama's tire tariff, respect for international trade rules seems to be receding. U.S. exporters across the agricultural and manufacturing spectrum are worried that they will be targeted—a concern that is validated by China's announcement this weekend of investigations into U.S. auto and poultry exports.

Imposing the tire tariff might appear to benefit the president politically, but that personal benefit will be fleeting and will come at an enormous cost to U.S. interests. In that regard, the tire decision will be considered a watershed in international trade policy.

Financial System Needs Less Regulation,

Mon, 14 Sep 2009 06:00:00 -0500

Mark A. Calabria, director of financial regulation studies:

While there is no doubt our financial system is in need of financial reform, the plan articulated by President Obama on Wall Street today would make bailouts a permanent feature of the regulatory landscape. Rather than ending "too big to fail," the president wants us to believe that with additional discretion and power, the same Federal Reserve that missed the boat last time will save us next time.

The truth is that the President's plan would permanently put the "too big to fail" tag on a small, select group of companies. These companies would see their funding costs decline, allowing them to gain market-share at the expense of their rivals, making these firms even larger. Greater concentration in our financial services industry is the last thing we need, yet the Obama plan all but guarantees it.

Obama also chooses myths over facts. The president claims that de-regulation and competition among regulators caused the crisis. The facts could not be more different. Those institutions at the center of the crisis—Fannie Mae, Freddie Mac, Bear Stearns, Lehman—could not "choose their regulator," as the president put it.

The president's plan chooses convenient targets and protects entrenched interests, rather than address the true underlying causes of the crisis. At no time have we heard the president discuss the expansionary monetary policies that helped fuel the bubble. Nor has the president talked about the global imbalances—the global savings glut that poured surplus savings from the rest of the world into the U.S. But then the president appears to hope that loose monetary policy and continued American consumption funded by China will get him out of his own political problems with the economy. It is especially striking that the President makes little mention of the housing bubble, as if it was only the bust that was the problem.

Without real reform—fixing Fannie and Freddie, scaling back the massive subsidies for leverage in our tax code, loose monetary policy—it will only be a matter of time before the next crisis hits. If we implement the President's plan, we will, however, guarantee that the next crisis will be even larger and severe than the current one.

News Release: U.S. Is World's Sixth-freest Economy, Yearly Study Says

Mon, 14 Sep 2009 06:00:00 -0500

WASHINGTON -- The United States is the sixth-freest economy in the world, according to yearly rankings released today by the Cato Institute and the Canada-based Fraser Institute.

The same report concludes that economic freedom worldwide will decline in the short term, as governments move to respond to the global recession with new spending measures and regulations.

The U.S.'s overall freedom score changed negligibly compared to last year, according to the criteria used by the annual Economic Freedom of the World. But the U.S. trend this decade has been one of steady decline in economic freedom, with the United States having ranked second freest economy in the world in the year 2000. The decline has occurred because of a deterioration in the legal and property rights score and because of increases in government spending and regulation.

Hong Kong retained the top spot as the world's freest economy, a position it has held since the report was first issued in the mid-1990s.

"The report's findings -- that economic freedom is strongly related to prosperity, growth and improvements in human well-being -- are especially important at time when countries around the world are making changes in spending and regulatory policies that affect the long term," said Ian Vasquez, director of the Cato Institute's Center for Global Liberty and Prosperity.

This year's report also includes new research that examines the likely impact of the global recession on levels of economic freedom. It suggests that the short-term response of governments to the global economic downturn will almost certainly reduce economic freedom, but that this need not be the case over a longer time frame. Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg show that several countries that have experienced financial crises have moved toward greater economic freedom in subsequent years.

The study looked at banking turmoil that took place in Norway and Sweden during the 1990s and found that although economic freedom may decline in the short term in response to crises, over a longer time, economic freedom had a tendency to increase after a banking emergency. In the case of Norway and Sweden, the banking crisis did not distract these countries from continuing with their market-based reform policies

The Economic Freedom of the World report uses 42 different measures to create an index ranking countries around the world based on policies that encourage economic freedom. Economic freedom is measured in five different areas: (1) size of government; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labor and business. The 2009 report ranks 141 nations representing 95 percent of the world's population using data from 2007, the most recent year for which comprehensive data available.

In this year's main index, Hong Kong's rating for economic freedom is 8.97 out of 10. The other top scorers are: Singapore (8.66), New Zealand (8.30), Switzerland (8.19), Chile (8.14), United States (8.06), Ireland (7.98), Canada (7.91), Australia tied with the United Kingdom (7.89), and Estonia (7.81).

Several countries have substantially increased their ratings and improved their relative levels of economic freedom during the past decade. Estonia has increased by nearly 2.0 since 1995 and it is now one of the freest economies in the world, ranking 11th overall. Lithuania and Latvia have increased their ratings by similar magnitudes since 1995 and their 2007 ratings are now greater than 7.0. The ratings of Cyprus, Hungary, Kuwait, and Korea have also improved substantially and their ratings are now 7.25 or more. Two African economies, Ghana and Zambia, have become substantially freer with ratings of 6.97 and 7.16, respectively.

But not all of the news is good. Economic freedom is regressing in several other countries. The rating of Zimbabwe has fallen by 3.18 while Argentina has declined by 0.80 since 1995. During the same period, the ratings for Malaysia and the Philippines have also fallen. Since 2000, the rating of Venezuela has declined by more than 1.5, down to 4.07. During the same period, Nepal's rating dropped to 5.18 from 5.62.

Economic Freedom of the World: 2009 Annual Report is authored by Professor James Gwartney, who holds the Gus A. Stavros Eminent Scholar Chair at Florida State University, and Robert Lawson, Associate Professor of Finance at Auburn University.

Coast Guard Scares Capital Senseless on 9-11

Fri, 11 Sep 2009 06:00:00 -0500

Jim Harper, director of information policy studies:

The "scare" produced by Coast Guard exercises on the Potomac today illustrates how sensitive the country remains to terror fears. Despite improved rhetoric and the promise of sensible, strategic counterterrorism, the Obama administration has yet to give the country confidence in its security. It has not articulated its counterterrorism plan and it has not created or implemented a terrorism communications plan. Unlike health care and education, these are responsibilities of the federal chief executive.

The fact that this could possibly have transpired on the anniversary of 9/11 amplifies the absurdity of the incident.

Without a strategy and communications plan in place, the administration will be at a loss to keep the nation on an even keel if and when any future terror incident occurs. The Obama administration must plan, and must be seen as having planned, if it is to prevent any future terrorism event from needlessly harming the country with panicky overreaction.

News Release: Selection Committee Announced for the 2010 Milton Friedman Prize for Advancing Liberty

Fri, 11 Sep 2009 06:00:00 -0500

The Cato Institute today announced the international committee to select the fifth recipient of the Milton Friedman Prize for Advancing Liberty, a $500,000 biennial award presented to an individual for achievement in promoting freedom and individual liberty. The Friedman Prize award is made possible through contributions specifically for that purpose. Since the Prize's inception in 2002, $2 million has been awarded. The Cato Institute has also announced that nominations for the 2010 prize are now being accepted. Members of the public are able make nominations online here.

Committee members this year are: Charles Koch, CEO of the largest privately held company in the world, Koch Industries of Wichita, Kansas; Fareed Zakaria, editor of Newsweek International and an ABC News commentator; Samuel Brittan, economic commentator for the Financial Times; noted commentator Mary Anastasia O'Grady of the Wall Street Journal; Gurcharan Das, former CEO of Proctor & Gamble, India, and author of the acclaimed book India Unbound; Edward H. Crane, president and founder of the Cato Institute; and Karen Horn, director of the Institut der deutschen Wirtschaft and one of the leading voices of classical liberalism in Germany.

The late Nobel laureate Milton Friedman agreed in 2001 to lend his name to the prize, which has become the leading international award for acknowledging contributions to the promotion of individual liberty. In a statement at the time he said: "Those of us who were fortunate enough to live and be raised in a reasonably free society tend to underestimate the importance of freedom. We tend to take it for granted. It has made us in the West more complacent, so having a prize emphasizing liberty is extremely important." Dr. Friedman died in 2006.

The first recipient of the Friedman Prize was the late British economist Peter Bauer, who received the prize in 2002. He was followed by the Peruvian scholar and author Hernando de Soto in 2004; the former Estonian prime minister Mart Laar in 2006; and Yon Goicoechea, leader of the pro-democracy student movement in Venezuela, in 2008.

The selection committee members for the 2010 prize are:

Edward H. Crane
President and Founder
Cato Institute

Samuel Brittan
Economic Commentator
Financial Times

Gurcharan Das
Former CEO of Procter & Gamble India
Author of India Unbound

Charles G. Koch
Chairman and CEO
Koch Industries Inc

Karen Horn
Director, Berlin Office
Institut der deutschen Wirtschaft
Germany

Mary Anastasia O'Grady
Member, Editorial Board
The Wall Street Journal

Fareed Zakaria
Editor
Newsweek International

The prizewinner will be announced in April and the award will be presented at the Milton Friedman Prize for Advancing Liberty Biennial Dinner on May 13, 2010 at the Washington Hilton, Washington, D.C.

Hey Obama, Leave Those Kids Alone

Wed, 02 Sep 2009 06:00:00 -0500

Neal McCluskey, associate director of the Center for Educational Freedom:

It's one thing for a president to encourage all kids to work hard and stay in school – that's a reasonable use of the bully pulpit. It's another thing entirely, however, to have the U.S. Department of Education send detailed instructions to public schools nationwide on how to glorify the president and the presidency, and push them to drive social change. Frighteningly, this is what President Obama has done.

In anticipation of the president's planned September 8 address to students nationwide, Secretary of Education Arne Duncan sent a letter and detailed "classroom activities" to schools with all sorts of troubling buzzwords and guidance. In his letter, Duncan asserts that the work of educators is "critical to…our social progress." It's a statement that strongly suggests – as many educators have held and continue to hold – that it is the job of public schools to impose values, often collectivist, on students.

The fear that this might be the case is reinforced by classroom activities for pre-K-6 students that encourages children to make posters setting out "community and country" goals. Perhaps even more frightening is the lesson schools are pushed to teach that it is important to listen to "the President and other elected officials." Possibly most distressing of all, though, is guidance that appears explicitly designed to glorify both the presidency and President Obama himself, encouraging schools to prepare for the speech "by reading books about presidents and Barack Obama." And schools are told to ask students how president Obama will "inspire" them in his speech before he gives it, and how they were inspired after Obama has spoken.

This is very disturbing, making crystal clear the huge dangers of government controlling education. Ultimately, politicians will use power over education to indoctrinate children, something completely antithetical to a free society. And this is just the starkest manifestation of the inherent problem with government control of education. Every day free people are pitted against one another in defense of their freedom and basic values because they all have to support a single system of government schools. Evolution vs. creationism. Prayer in school. Books with offensive material in schools libraries. Decisions over whose history will be taught, and whose won't. The curtailment of freedom goes on and on when government takes everyone's money and provides schools with it. Which is why the only system of learning compatible with a truly free society is a system of school choice – public education, not schooling – in which the public assures that all people can access education, but parents are free to choose their children's schools, and educators are free to educate how they wish.

Don't Raise Troop Levels in Afghanistan

Tue, 01 Sep 2009 06:00:00 -0500

Malou Innocent, foreign policy analyst:

This morning's column by esteemed journalist George Will reminds us that American public sentiment has turned starkly against an open-ended military commitment in Afghanistan—just in time for the Obama administration to tell us troop levels there should be raised indefinitely.

Over the past year, the mission in Afghanistan has shifted from the limited goal of taking down al Qaeda to a much broader population-centric counterinsurgency approach. Now we are being told that America must protect the villages of Afghanistan. Why? Beltway orthodoxy tells us that because extremists will emerge in this ungoverned part of the world and attack the United States, America must forcibly stabilize, liberalize, and democratize Afghanistan.

For one thing, there's reason to doubt whether state failure or poor governance in itself poses a threat. For another, the United States does not have the resources or the legitimacy to transform what is a deeply divided, poverty–stricken, tribal-based society into a self-sufficient, non-corrupt, stable electoral democracy. Such an endeavor would require a multi-decade commitment—with no assurance of success—that could never be accomplished within costs acceptable to the American public.

The U.S. and NATO military presence will exceed 100,000 troops by this fall, which is more than enough troops to carry out the focused mission of training Afghan forces.

As the war in Afghanistan rages on, Obama should be skeptical of any suggestions that the defeat of Al Qaeda depends upon a massive troop presence. The majority of successes scored against Al Qaeda have not relied on large numbers of U.S. troops. Intelligence sharing and close cooperation with foreign law enforcement and intelligence agencies have done more to round up suspected terrorists than blunt military force.

Committing still more troops to Afghanistan would only weaken the authority of Afghan leaders, undermine our ability to deal with other security challenges, and pull us deeper into a bloody, protracted, and possibly unwinnable guerilla war.

U.S.-Japan Ties After Tokyo's Political Earthquake

Mon, 31 Aug 2009 06:00:00 -0500

Doug Bandow, senior fellow:

For but one 11-month period, the Liberal Democratic Party has ruled Japan for the last 54 years. During that time the U.S.-Japan alliance has been a mainstay for both countries. But the newly victorious Democratic Party of Japan is likely to change the bilateral relationship, perhaps significantly.

In August 1945 Japan was disarmed and occupied. Article 9 of the U.S.-drafted constitution even barred creation of a military. The unstated political corollary was that Washington would be responsible for Japan’s defense.

But this arrangement quickly became obsolete as the Cold War deepened. Despite sustained U.S. pressure, punctuated by growing fear of China and North Korea, Tokyo has only modestly increased its support for U.S. military operations and allowed Japanese defense spending to languish.

The DJP advocates a more “independent” international course and a more “equal” alliance. What that means in practice is unclear, but the new government likely will be less willing to back U.S. military operations and more determined to revise the status of forces agreement and adjust American deployments in Okinawa. More dramatic changes are possible.

U.S. government officials still hope to preserve the status quo. However, it is time for Washington to initiate changes in the relationship. Marginal adjustments are not nearly enough. Japan possesses the world’s second largest economy and should take over responsibility for its own defense, as well as promoting stability throughout the region.

Washington should begin a phased withdrawal of its 47,000 military personnel stationed in Japan, while negotiating to replace the existing formal security guarantee with an agreement for less formal security cooperation, including intelligence sharing and emergency base access. The U.S. also should press Tokyo and other democratic states in the region to work through the lingering issues growing out of World War II and create a cooperative framework to promote peace and stability throughout East Asia.

The dramatic DJP victory in Sunday’s election is an opportunity as well as a challenge for the U.S. Washington should take the lead in revising a defense relationship created in a different age and made obsolete by the end of the Cold War.

Embracing Bushonomics, Obama Re-appoints Bernanke

Tue, 25 Aug 2009 06:00:00 -0500

Mark A. Calabria, director of financial regulation studies:

In re-appointing Bernanke to another four year term as Fed chairman, President Obama completes his embrace of bailouts, easy money and deficits as the defining characteristics of his economic agenda.

Bernanke, along with Secretary Geithner (then New York Fed president) were the prime movers behind the bailouts of AIG and Bear Stearns. Rather than "saving capitalism," these bailouts only spread panic at considerable cost to the taxpayer. As evidenced in his "financial reform" proposal, Obama does not see bailouts as the problem, but instead believes an expanded Fed is the solution to all that is wrong with the financial sector. Bernanke also played a central role as the Fed governor most in favor of easy money in the aftermath of the dot-com bubble–a policy that directly contributed to the housing bubble. And rather than take steps to offset the "global savings glut" forcing down rates, Bernanke used it as a rationale for inaction.

Perhaps worse than Bush and Obama's rewarding of failure in the private sector via bailouts is the continued rewarding of failure in the public sector. The actors at institutions such as the Federal Reserve bear considerable responsibility for the current state of the economy. Re-appointing Bernanke sends the worst possible message to both the American public and to government in general: not only will failure be tolerated, it will be rewarded.

Mexico Decriminalizes Drugs, U.S. Should Follow

Fri, 21 Aug 2009 06:00:00 -0500

Tim Lynch, director, Project on Criminal Justice:

Policymakers in Washington are losing their grip on international drug policy. For many years Washington was able to pressure other countries into taking the hard line, criminal approach to drugs. Now, despite Washington's objections, more and more countries are moving in the direction of liberalization and decriminalization.

Portugal led the way by decriminalizing all drugs in 2001 and now Mexico has taken a step in the same direction. Skeptics said there would be a spike in use and then a public health crisis. That has not happened.

As a result, policymakers in Europe and Latin America are increasingly willing to move away from the drug prohibition model. The Obama administration should welcome, not oppose, this trend.

Juan Carlos Hidalgo, project coordinator for Latin America:

The decision by the Mexican government to decriminalize the consumption of small amount of drugs constitutes a step in the right direction after decades of failed policy. It is in line with efforts by other Latin American leaders and governments who are increasingly skeptical of Washington’s prohibitionist drug policies.

The wisdom of the war on drugs is being challenged by countries whose stability and institutions are threatened by drug-related violence and corruption. President Obama promised to listen to Latin Americans. This is the best place to start.