Washington Prospers While America Suffers
Unemployment in the heartland may be high and incomes may be stagnating in most of the nation, but Washington, DC, continues to be an oasis of prosperity as more of the nation’s resources get consumed by government. The latest evidence comes from the Washington Post, which reports on the federal government’s insatiable demand for more real estate.
Evidence of the federal government’s growing influence on Washington area commercial real estate is illustrated in big deals it is working on both sides of the table: auctioning a 127,000-square-foot Bethesda building previously occupied by the National Institutes of Health and moving to snatch up vast spaces in buildings on the private market that have been vacant for months. The General Services Administration is seeking to unload the 10-story building that the NIH vacated in 2002 when it consolidated offices into other buildings in Bethesda. The recommended opening bid for the online auction, which runs from April 30 to July 2, is $14 million. At the same time, federal leasing activity is expanding, according to Jones Lang LaSalle, the real estate firm representing the government. The government signed deals for 750,000 square feet of space in the District in the first quarter of 2010, compared with 670,000 square feet in the city for all of 2009.
It’s hard to pick out the most depressing part of the article. Signing leases for more space in the first quarter of 2010 than in all of 2009 might be at the top of the list. That is presumably a good (and discouraging) measure of the growth of government. But for those who enjoy reading about incompetence and inefficiency, the government’s eight-year (and counting) project to sell one office building may be at the top of the pile.
The GSA decided to sell the 46-year-old former NIH building at 7550 Wisconsin Ave. in Bethesda eight years ago. “We have a process we have to go through before we sell a building. We have to offer it to homeless housing, to local government,” said Bob Peck, commissioner for the GSA’s Public Buildings Service.
More discouraging factoids include a six-figure increase in the number of bureaucrats (just in the DC area), and the fact that the government is going to squander huge amounts of money on green renovations, which will require taxpayers to cough up lots of money for the contractors doing the work and for five-year leases (which probably means ten, knowing the sloth-like pace of government work) so the bureaucrats can be housed elsewhere during the work.
Expansion of the government’s role in the nation’s financial markets, increased defense spending and the new health-care law are driving its demand for more space. The government is expected to increase its Washington area payroll by as many as 100,000, according to Partnership for Public Service, a nonprofit group that helps the federal government find workers. “The government spent 2009 planning for the growth. We’re going to see the growth materialize in 2010,” said Scott Homa, research manager for Jones Lang LaSalle. The government also is overhauling many of its buildings, making them energy efficient. As a result, several agencies will need to lease space in the commercial market for five years or so during renovations.
Bush, Rove, and Limited Government
Conservatives Craig Shirley and Don Devine write in the Sunday Washington Post that Karl Rove’s memoir wrongly depicts Rove and President George W. Bush as conservatives. “Big-government conservatives,” maybe, Shirley and Devine say. But not actual conservatives. After all,
From William F. Buckley Jr. to Barry Goldwater to Ronald Reagan, the creators of the modern conservative movement always taught that excessive concentration of power in government leads inevitably to corruption and the diminution of personal freedoms….
Modern American conservatism has roots in the ideas of philosopher John Locke, the founding fathers and the notion that humans’ natural state is freedom.
But Bush? He imposed strict new federal regulations on local schools and massive new costs through his prescription drug entitlement. Not to mention
steel tariffs, the creation of the Department of Homeland Security, the McCain-Feingold campaign finance law, a massive agricultural subsidy bill, and other spending and regulatory moves by the Bush administration that tilted power toward Washington and away from individuals and states.
All too true. And a point made many times by Cato Institute analysts. But Shirley and Devine could have gone further. Policies that “tilted power toward Washington”? How about the attempt to nationalize marriage law, for 200 years a matter reserved to the states? Or the Republican legislation to move the Schiavo family’s tragedy out of Florida courts and into federal court? Or they could have mentioned an administration with a vision of the Constitution that included “a president who cannot be restrained, through validly enacted statutes, from pursuing any tactic he believes to be effective in the war on terror; [and] who has the inherent constitutional authority to designate American citizens suspected of terrorist activity as ‘enemy combatants,’ strip them of any constitutional protection, and lock them up without charges for the duration of the war on terror— in other words, perhaps forever.”
The Post gave Shirley and Devine only half a page — far too little to enumerate all of the Bush administration’s assaults on limited, constitutional government. But they’ve done a service in reminding conservatives that this was no conservative administration.
Regulation and the Knowledge Problem
Glenn Reynolds, a law professor at the University of Tennessee but better known as Instapundit, writes in the Washington Examiner that the controversy over big corporations’ reporting the impact of the new health care legislation on their tax bills illustrates the “Knowledge Problem” identified by Nobel laureate F. A. Hayek in “The Use of Knowledge in Society” and other writings. Hayek pointed out that the information needed to run an economy doesn’t exist in any one database or agency. It is scattered among millions of people and made available to others by means of the price system. Planning and regulation do away with the information embodied in prices and try to improve on market outcomes by making use of far less information.
Reynolds writes, “Recent events suggest that it’s not just the economy that regulators don’t understand well enough — it’s also their own regulations.”
The United States Code — containing federal statutory law — is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117 pages long and composes 226 volumes.
No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can’t be aware of all the real-world complications it’s producing, it can’t even understand the legal and regulatory implications of what it’s doing.
The new health care bill is going to increase the tax burden on large corporations that provide prescription drug benefits for their retirees. Companies are required by Generally Accepted Accounting Principles and Securities and Exchange Commission regulations to report any adverse changes in their expected tax liabilities. So several companies did so, producing headlines that weren’t favorable to Obamacare. Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, is summoning the CEOs of those companies to a show trial in Washington to intimidate other CEOs from announcing the costs of Obamacare — at least until after the election.
Regulations interacting with each other with unanticipated effects — that’s the topic Jeffrey Friedman wrote about recently in Cato Policy Report, with regard to the financial crisis:
You may think that the government caused the financial crisis. But you don’t know the half of it. And neither does the government….
The regulators seem to have been as ignorant of the implications of the relevant regulations as the bankers were….
Omniscience cannot be expected of human beings. One really would have had to be a god to master the millions of pages in the Federal Register — not to mention the pages of the Register’s state, local, and now international counterparts — so one could pick out the specific group of regulations, issued in different fields over the course of decades, that would end up conspiring to create the greatest banking crisis since the Great Depression. This storm may have been perfect, therefore, but it may not prove to be rare. New regulations are bound to interact unexpectedly with old ones if the regulators, being human, are ignorant of the old ones and of their effects….
This premise would be questionable enough even if we started with a blank legal slate. But we don’t. And there is no conceivable way that we, the people — or our agents in government — can know how to solve the problems of modern societies when our efforts have, in fact, been preceded by generations of previous efforts that have littered the ground with a tangle of rules so thick that we can’t possibly know what they all say, let alone how they might interact to create another perfect storm.
In substance, there is a striking similarity between social democracy and the most utopian socialism. Whether through piecemeal regulation or central planning, both systems share the conceit that modern societies are so legible that the causes of their problems yield easily to inspection. Social democracy rests on the premise that when something goes wrong, somebody — whether the voter, the legislator, or the specialist regulator — will know what to do about it. This is less ambitious than the premise that central planners will know what to do about everything all at once, but it is no different in principle.
Filed under: Finance, Banking & Monetary Policy; General; Government and Politics; Political Philosophy
Sorry — Ravitch Not Ridiculous
In a fit of pique, I intemperately suggested in the title of my last post that the content of Diane Ravitch’s recent Washington Post op-ed was ridiculous. That was over the top: As is obvious, I disagree with Ravitch on school choice, and my review of her latest book makes clear that I am dubious about her various policy prescriptions. But, heck, we agree on much about what ails the No Child Left Behind Act, and her thoughts on choice are hardly on the fringe. So even though I think her choice critiques very wrong, one’s opinions can be thought wrong by me without qualifying as ridiculous.
That said, we do still need to talk about such things as federal teacher-quality demands…
More Ravitch Ridiculousness
Great post by Chris Edwards responding to historian Diane Ravitch’s op-ed in today’s Washington Post. For a good ripping apart of Ravitch’s reality-free thinking from an education-policy standpoint, check out my review of her new book over at School Reform News.
Oh, and let’s please get something straight: Ravitch has never been the one-time “strong supporter” of school choice she claims to have been. Sadly, this claim seems designed mainly to make it appear that she’s had some sort of serious “come (back) to public schools” moment. But as she writes in her new book, she had never really given much thought to choice until she joined the George H.W. Bush administration in 1991, and then she just tried to cram it into her “worldview.”
“The issue of choice had never really been important to me,” she writes, “but I found myself trying to incorporate the arguments for choice into my own worldview.”
Does this sound either like a strong supporter of choice, or someone who had really thought choice through and understood why and how it would work? Nope, and that comes right through in her simplistic conclusion that because really limited choice like charter schools and tiny voucher programs don’t make huge differences, all choice should be abandoned.
Weekend Links
- A video challenge: Cato legal scholar Ilya Shapiro says he will debate whether Obamacare is constitutional “anytime, anyplace.”
- Not a pretty picture: The economic consequences of imposing more trade sanctions on Chinese imports.
- Real education reform: Unleash the freedoms and incentives of the marketplace so that children can thrive and benefit from teaching methods that fit their unique needs and abilities.
- Taking a second look at the Swiss model: Switzerland manages to run a smaller government as a share of gross domestic product than the United States and most other countries while providing a higher level of service, security, prosperity and freedom. How does it do that?
- Podcast: “Obamacare’s Unconstitutional Coercion,” featuring Robert A. Levy.
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- The U.S. Postal Service wants to drop Saturday mail delivery to save money. Here’s a better idea: give Americans the freedom to choose the mail services they want by repealing the USPS monopoly.
- Obama’s latest mortgage bailout plan will expose the Federal Housing Administration to more risk.
- Unemployed college grads are using food stamps to purchase organic food at high-end grocers like Whole Foods.
- Obama’s crackdown on improper payments made by government programs probably won’t help taxpayers.
- Congress needs more legislators like William Proxmire who was willing to stand up to his colleagues and special interests when it came to cutting wasteful programs.
I’m Sick of Central Planners
Education scholar Diane Ravitch has an op-ed in today’s Washington Post arguing that the nation needs to change course on K-12 education.
Ravitch was a supporter of the No Child Left Behind Act, but now she says “we wasted eight years with the ‘measure and punish’ strategy of NCLB.”
So central planning of the nation’s schools from Washington didn’t work under George W. Bush, but now Ravitch has a whole bunch of new central planning ideas for the schools. She uses the phrases “we need” and “we must” repeatedly, implying that we should impose new national rules of her choosing on all the schools.
She says: ”Everyone agrees that good education requires good teachers. To get good teachers, states should insist — and the federal government should demand — that all new teachers have a major in the subject they expect to teach…”
In the column, Ravitch laments the unexpected negative consequences of NCLB, but she seems not to realize that the new policies she advocates would probably also have negative consequences. Wouldn’t demands that teachers have certain degrees push up teaching costs at a time when schools are already complaining that their budgets are stretched tight? Wouldn’t her mandate cause schools to substitute teachers with paper qualifications but poor teaching skills for other teachers who have better teaching skills? Is having a degree in a specific subject more important than teachers having qualities such as empathy, patience, and love of learning?
I don’t know the answer to those questions, and I’m not an education expert. But I do know that the experts often disagree on the best teaching methods and that the established educational wisdom is always evolving. For that reason, one-size-fits-all decrees from Washington make absolutely no sense. So why should Ravitch impose her judgment regarding teacher qualifications on all 100,000 or so public schools in America?
Let’s let the nation’s schools in their local communites try new approaches, learn from each other, and move the ball forward as they see fit. And let’s encourage folks like Ravitch to run for her local school board if she has ideas about schooling that she wants to experiment with.
Filed under: Education and Child Policy; Government and Politics
More on the (Un)Constitutionality of Obamacare
Earlier this week, I reacted to reports that the University of Washington couldn’t find any legal scholars willing to question Obamacare’s constitutionality by issuing a challenge: I will debate the constitutional merits of Obamacare against anyone, anytime, anywhere (as long as the sponsoring group/individual covers my travel expenses). Here’s a video version of my challenge:
Cato adjunct scholars Dave Kopel and Ilya Somin, blogging at the Volokh Conspiracy, go into much greater depth on the myth of an expert consensus.
And if you’re tired of hearing the debate about the debate and want to hear the latest on why the individual mandate is unconstitutional, listen to my colleague (and Cato’s chairman) Bob Levy’s podcast.
Filed under: Government and Politics; Law and Civil Liberties
Journalists Condemn Attack on the Free Press in Ecuador
On Monday I wrote about an Ecuadorian court’s sentencing of Emilio Palacio, editor of the opinion section of El Universo, to three years in jail. Since then, the Inter-American Commission on Human Rights (IACHR) has expressed “profound concern” about the prison sentence for Palacio, and the Inter-American Press Association (IAPA) and Reporters Without Borders (RSF) have strongly condemned it.
Op-ed writers from leading national newspapers have signed a statement condemning the court’s decision. This statement was published in El Comercio, El Universo, Diario HOY and La Hora. So far 47 columnists have signed on. See an updated list here of those of us who express our solidarity with the accused journalist.
Filed under: International Economics and Development; Law and Civil Liberties
The Most Fitting Tribute to Jaime Escalante
Jaime Escalante, the brilliant teacher immortalized in the 1988 film Stand and Deliver, died this week at the age of 79. I write today in the Wall Street Journal about his incredible achievements and the scandalous way that he was treated by the American education system.
I argue that the most fitting tribute we can offer Escalante is to ensure that, in the future, other great educators are recognized and rewarded for their service, and helped to reach a mass audience of pupils instead of being demoted and pushed out of the system, as he was.
Constitution, Schmonstitution — The Law Is What I Say It Is
The health care debate has illuminated how little regard many members of Congress have for the U.S. Constitution.
First, Rep. Alcee Hastings (D-FL) said, “There ain’t no rules here… When the deal goes down … we make ‘em up as we go along.”
Then, House Judiciary Committee chairman John Conyers (D-MI) claimed that the Constitution’s non-existent “Good and Welfare clause” grants Congress the power to compel Americans to purchase health insurance.
Now, Rep. Phil Hare (D-IL) admits he doesn’t really care whether the Constitution grants Congress that power:
Off-camera: Where in the Constitution…
Rep. Hare: I don’t worry about the Constitution on this, to be honest.
Off-camera: [Laughter.] Jackpot, brother.
Rep. Hare: What I care more about — I care more about the people that are dying every day that don’t have health insurance.
Off-camera: You care more about that than the U.S. Constitution that you swore to uphold!
Rep. Hare: I believe that it says we have the right to life, liberty, and the pursuit of happiness. Now you tell me…
Off-camera: That’s the Declaration of Independence.
Rep. Hare: It doesn’t matter to me. Either one…
[Lots of childish sniping.]
Off-camera: Where in the Constitution does it give you the authority to…
Rep. Hare: I don’t know. I don’t know.
Off-camera: That’s what I thought.
Of course, that doesn’t really capture how annoying both the congressman and his interrogators are. So here’s the video:
Filed under: Government and Politics; Health, Welfare & Entitlements
1994 Watch
The CBS News Poll reports that President Obama’s approval rating has dropped to its lowest point (of that poll) of 44 percent. Also, his work on the health care law might be a contributing factor. Onlly 34 percent approved of his performance on health care while 55 percent disapproved.
At the end of March 1994, Bill Clinton enjoyed a 51 percent approval rating.
Two caveats: First, other factors besides presidential approval affect the outcomes of mid-term congressional elections. Second, Clinton’s approval rating dropped like a stone in September and October of 1994. He ended up in the mid-40s by election day. In other words, Clinton ended up where Obama is now. Obama’s approval rating could rise between now and November.
Insecurity Cameras
Nearly half of the security cameras in the New York City subway system don’t work. That may seem like cause for alarm, and it may be from a financial standpoint — NYC isn’t getting a lot of return on its investment.
From a broader security standpoint, I don’t find this particularly disturbing. As the article points out, crime is down as ridership increases. Reducing the number of police officers on patrol in the subway (as NYC is doing) is more likely to facilitate increased criminality. A camera can catch many things on film, but the presence of law enforcement officers provides intangible benefits that technology cannot. The would-be Millenium Bomber was stopped by a border patrol agent who interviewed him and thought that something was “hinky” about his behavior. That hinkiness involved explosives, and the plot was foiled. Cameras don’t spot “hinky” like people can.
Security expert Bruce Schneier has been talking about this on his blog (emphasis on the Dubai assassination), and provides a fuller discussion of security cameras in this article on CNN.com:
If universal surveillance were the answer, lots of us would have moved to the former East Germany. If surveillance cameras were the answer, camera-happy London, with something like 500,000 of them at a cost of $700 million, would be the safest city on the planet.
We didn’t, and it isn’t, because surveillance and surveillance cameras don’t make us safer. The money spent on cameras in London, and in cities across America, could be much better spent on actual policing.
Security cameras have not proven a great deterrent to crime or terrorism. The attacks on September 11th and the London commuter bombings were not stopped by pre-attack footage of the perpetrators’ activities. Creating a surveillance state may make some people feel safer, but the resources can be better used elsewhere.
The Threat that Guam Will Capsize
At least when it comes to economic matters, a way of framing the question whether market regulation or government regulation should predominate is to ask which system—markets or government—can better allocate resources.
Many people assume that elected officials, their staffs, and bureaucracies in the executive branch have superior information and thus better capability of organizing society’s affairs. There are many smart, well-informed people in government doing their best at just that task.
But evidence of their fallibility is sometimes made available. Such is in the video that follows, in which a member of Congress worries—in apparent seriousness—whether the island of Guam might capsize.
If it seems cruel to tout, or unfair to generalize from this to the weakness of government generally, fine. But think of the cruelties large and small in government officials’ dominion over the lives of others.
Perhaps some will recognize in this video that governments are run by imperfect people just like businesses are. This is part of the reason why the promises that issue from Capitol Hill so often go unfulfilled while people acting on their own behalfs generally organize their affairs well.
State Secrets, Courts, and NSA’s Illegal Wiretapping
As Tim Lynch notes, Judge Vaughn Walker has ruled in favor of the now-defunct Al-Haramain Islamic Foundation—unique among the many litigants who have tried to challenge the Bush-era program of warrantless wiretapping by the National Security Agency because they actually had evidence, in the form of a document accidentally delivered to foundation lawyers by the government itself, that their personnel had been targeted for eavesdropping.
Other efforts to get a court to review the program’s legality had been caught in a kind of catch-22: Plaintiffs who merely feared that their calls might be subject to NSA filtering and interception lacked standing to sue, because they couldn’t show a specific, concrete injury resulting from the program.
But, of course, information about exactly who has been wiretapped is a closely guarded state secret. So closely guarded, in fact, that the Justice Department was able to force the return of the document that exposed the wiretapping of Al-Haramain, and then get it barred from the court’s consideration as a “secret” even after it had been disclosed. (Contrast, incidentally, the Supreme Court’s jurisprudence on individual privacy rights, which often denies any legitimate expectation of privacy in information once revealed to a third party.) Al-Haramain finally prevailed because they were ultimately able to assemble evidence from the public record showing they’d been wiretapped, and the government declined to produce anything resembling a warrant for that surveillance.
If you read over the actual opinion, however it may seem a little anticlimactic—as though something is missing. The ruling concludes that there’s prima facie evidence that Al-Haramain and their lawyers were wiretapped, that the government has failed to produce a warrant, and that this violates the Foreign Intelligence Surveillance Act. But of course, there was never any question about that. Not even the most strident apologists for the NSA program denied that it contravened FISA; rather, they offered a series of rationalizations for why the president was entitled to disregard a federal statute.
The Great Writ
The BBC has put together an interesting documentary on the writ of habeas corpus, a legal concept most people have heard of, but too few understand and appreciate. You can stream it here.
We should not forget that President Bush and the coterie of lawyers around him tried to advance a theory of executive power that would have made the writ of habeas corpus worthless. I hasten to add that President Obama has not really disavowed Bush’s claims and so the danger to the great writ has not passed just because Bush has left office.
Related video clip of former Attorney General Alberto Gonzalez here. Related Cato work here, here, and here.
Obama Knows the Drill
President Obama should be credited—albeit cautiously—for his announcement yesterday that he will open some U.S. coastal waters to offshore oil drilling. The fact that this is an interesting political reversal on Obama’s part has been treated extensively elsewhere. But what of the substance of the president’s drilling proposal?
I and other free-market advocates have spoken for years of the potential energy benefits of allowing this drilling, so I won’t devote too much space to repeating myself. The best encapsulation of my own thinking on the subject is this piece I wrote for the LA Times in 2008.
A few points worth adding:
Obama’s press conference at Andrews Air Force Base yesterday did indicate a welcome new direction for U.S. energy policy. But in an absolutely perfect world, the government would not be in the business of allocating scarce resources—in this case, the offshore oil fields—to competing user groups. The market would play that role.
Hence, the best policy would be to divest this land via auction and allow environmentalists, recreationalists and preservationists to compete with oil and gas companies for the rights to those resources.
It is not at all inconceivable to me that those opposed to drilling, whatever their reasons, might well out-bid extraction industries for rights to some of these fields. Unfortunately, there seems to be limited political support for privatization, so President Obama’s initiative is probably better than the status quo.
We need to remember, however, that if governments could intelligently allocate scarce resources across the economy without recourse to market information or institutions, then the North Korean economy would work swimmingly.
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