January 2012

Slandering the Tea Parties

by Hans Bader on April 16, 2009 · 5 comments

in Bailout Watch, Economy, Politics as Usual, Sanctimony, Stimulus to Nowhere

The “tea party” protests against out-of-control government spending have been very clear in identifying what wasteful spending they object to. One example is Obama’s $800 billion stimulus package, which was falsely sold to the public as needed to prevent “irreversible decline,” but which the Congressional Budget Office repeatedly pointed out would actually cut the size of the economy “in the long run.” Another example is the Obama Administration’s mortgage bailout, which would benefit even high-income people with modest mortgages (see the “I can’t afford your mortgage” sign).

But the protesters are frequently criticized by journalists like Andrew Sullivan for supposedly offering no solutions or constructive suggestions.

For having the temerity to protest Administration lies and out-of-control spending, the protesters have been called “despicable” by a liberal Congresswoman, and attacked in the left-wing blogosphere in the most vicious language as “redneck, racist Republicons” and as “a bunch of white old people and rednecks” who “got together and tried to start a revolution…to drive the Fascist/Communist n****r out of the White House and stop the fags from stealing their children.”

As a Harvard-educated, arugula-eating, urban dweller whose office hosted the end of the Washington tea party, I find these claims baffling. I am certainly not afraid of my Asian, black, and Hispanic relatives, my French-born wife, or the gay neighbor whose children play with my daughter.

Andrew Sullivan derides the tea parties as “opposition to the Obama administration’s spending plans, manned by people who made no serious objections to George W. Bush’s.”

I did too make “serious objections to George W. Bush’s” spending plans. I condemned his costly prescription-drug entitlement in the Washington Times, and repeatedly condemned the $160 billion Bush “stimulus rebates” in 2008. I publicly called his $700 billion Wall Street “bailout bill dangerous, inflationary, unnecessary, and unconstitutional.” And I condemned his multibillion dollar auto bailout.

And contrary to Sullivan’s claims, I do indeed have a “constructive and specific argument about how . . . to reduce spending and debt and borrowing” — cancel the wasteful $800 billion stimulus package, most of which has not been spent yet, and may cause inflation when it finally is.

D.C. Tea Party and the 1,000,000 Teabags

by Richard Morrison on April 16, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=4Bour14qOiE 285 234]

Well, the Feds at least banned an “amusement tax”

by Wayne Crews on April 16, 2009

in Economy, Odds & Ends

An aberration that’s a somewhat happy update to yesterdays sad “Tax Poem.” The excerpt from BNA’s Electronic Commerce & Law Report says it all:

Federal Court Bars Chicago From Collecting Amusement Tax From Online Ticket Resellers: The U.S. District Court for the Northern District of Illinois has ruled that the City of Chicago lacked the authority under state law to require StubHub Inc.—a nationwide Web site where parties buy and sell tickets to events—to collect and remit the city’s 8 percent amusement tax. Case name is Chicago v. StubHub. Subscription required.

Chris Horner on Renewable Fuels and Corporate Welfare

by Richard Morrison on April 15, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=iARSO30KAks 285 234]

Regulated Out of Work

by Angela Logomasini on April 15, 2009 · 1 comment

in Environment

CEI has highlighted the fact that poorly drafted drinking water regulations do more harm than good. In particular, the that greatly increased the stringency of the drinking water rule for arsenic promised no real benefits, but its high cost hurts communities and individuals. It forces communities to abandon important things–like the purchase of fire trucks or more useful upgrades to infrastructure–to pay for a rule that does nothing for them. The rule allows drinking water to contain no more than 10 parts per billion of arsenic. Prior to that, water could contain up to 50 parts per billion. The 50 ppb standard had been in place in the U.S. for decades and there is no evidence of it ever causing a public health problem.

A story in the Star Tribune in Minneapolis St. Paul shows how adverse effects of such needlessly onerous standard can spill over into other areas. In this case, a meat plant had to shut its doors, putting 200 people out of work because their water exceeded EPA’s standard by 8 parts per billion. EPA can’t show that the Clinton era its standard won’t save a soul, but we do know that economic hard times hurt many.

Horse Racing As A Public Good?

by Marc Scribner on April 15, 2009 · 2 comments

in Bailout Watch, Economy, Odds & Ends, Politics as Usual, Zeitgeist

Maryland politicians really have their hands full as the legislative session draws to a close. Instead of focusing on their state’s looming long-term budget crisis, the Maryland General Assembly and Governor Martin O’Malley spent yesterday working on a far more important issue: authorizing the use of public resources to seize and operate the Preakness Stakes.

The owner of the Preakness and its Pimlico race track, Magna Entertainment, is currently in federal bankruptcy.  Last week, a Baltimore Sun editorial compared the oh-so-dire situation to the 1984 Baltimore Colts’ move to Indianapolis (in part precipitated by the city’s threat of eminent domain condemnation), when the city attempted and failed to seize the team through eminent domain a day after it had already left for Indiana.

The presumption seems to be that municipalities and states are somehow entitled to their sports teams and facilities, regardless of current ownership and market conditions, and that spending public money on such ventures is beneficial to the local economy. But one need only look at neighboring Washington, DC’s ongoing depressing experience with the billion dollar Nationals Park/Navy Yard debacle to get a handle on how ridiculous this line of thought is. Unfortunately, given the current “stimulus” culture, this probably won’t be the last time a government decides to initiate eminent domain or subsidize development for the purpose of “saving sports.”

(H/T Baltimore History Examiner)

1,000,000 Tea Bags Find a Home

by Cord Blomquist on April 15, 2009 · 2 comments

in Features, Zeitgeist

The good folks from MillionTeaBags.org dropped by CEI today after the Park Service told them that while they had a perfectly legal permit to demonstrate in LaFayette Park today, that they hadn’t specifically asked if they could display the 1 million bags of tea they had trucked in.  It’s tougher to have a tea party these days—regulations and permits were not a part of the first one.

Thankfully, some of these tea partiers were friends of CEI.

So the tea bags—at least a portion of them—were stacked to the ceiling in our conference room.  Each bag of tea represented the donation of someone to the project, meaning that over a million Americans are sick and tired of being treated like Nancy Pelosi, Harry Reid, and Barack Obama’s ATM.

The photo-op still happened, though not as dramatic as if it were surrounded by the protesters in the park.

Hopefully, the lessons learned about the labyrinthian rules of protests in DC—there are dozens of agencies that govern public spaces in this city—allow for an even bigger protest to occur soon.

I heard whispers of 5 million bags making their way to DC in the near future…

teabags

The Liberal War on Science

by Hans Bader on April 15, 2009 · 1 comment

in Agriculture, Economy, Environment, Global Warming, International, Legal, Nano & Biotech, Personal Liberty, Politics as Usual, Precaution & Risk, Stimulus to Nowhere

Christina Hoff Sommers writes about a looming liberal war on science. Based on a campaign promise Obama made to feminist groups in October 2008, Sommers foresees the Obama Administration moving to artificially cap male enrollment in math and science classes to achieve gender proportionality — the way that Title IX currently caps male participation in intercollegiate athletics. The result could be a substantial reduction in the number of scientists graduating from America’s colleges and universities.

Critics have long argued that the Title IX cap is in tension with the Supreme Court’s warnings against proportional representation. In a ruling by Justice Sandra Day O’Connor, the Supreme Court said that it is “completely unrealistic” to argue that women and minorities should be represented in each field or activity “in lockstep proportion to their representation in the local population.” (See Richmond v. J.A. Croson Co. (1989)). In an earlier ruling, Justice O’Connor noted that it is “unrealistic to assume that unlawful discrimination is the sole cause of people failing to gravitate to jobs and employers in accord with the laws of chance.” (See Watson v. Fort Worth Bank & Trust Co. (1988)).

But the Title IX athletics regulation mandates proportional representation. It contains three alternatives for compliance, but two of them are illusory in the long run. The first way (and only permanent way) to comply is to adopt a quota that artificially caps male participation. The second and third ways, which are only short-term fixes, involve continuous expansion of participation by, or satisfaction of all desire to compete by, the “underrepresented” sex. In a world of finite resources, these latter two ways can only work for a short period of time. I used to work at the agency, the Office for Civil Rights, that administers this regulation, and I think that it would be a mistake to apply standards designed for allocating resources among all-male and all-female sports teams to the very different context of math and science classes, which are coed.

But this is not an Administration that is very good with math and numbers. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office says it will actually cut the size of the economy in the long run. His budgets don’t add up, either, piling up $9.3 trillion in red ink, and breaking his promises to enact a “net spending cut” and not raise taxes on people making less than $250,000 a year.

Some liberal publications are suspicious of scientific advances. The agronomist Norman Borlaug, who pioneered the Green Revolution, saved perhaps a billion lives in the Third World by developing high-yield, disease-resistant crops through biotechnology. For this, he received the Nobel Peace Prize, the Presidential Medal of Freedom, and the Congressional Medal of Honor. For this, he was smeared in the liberal magazine The Nation, which has an irrational phobia of biotechnology and genetic engineering, as being “the biggest killer of all.”

Similarly, the Danish researcher Bjorn Lomborg was demonized and investigated after accurately pointing out that global warming is less of a threat to human health than AIDS and malnutrition.

DC Tea Party Draws Big Crowd in Pouring Rain

by Christine Hall on April 15, 2009

in Agenda for Congress, Bailout Watch, Bureaucrash, CEI Projects, Coalitions & Outreach, Economy, Stimulus to Nowhere

Hundreds of people turned out in the pouring rain for Washington, DC’s Tea Party – one of many tax protest events taking place around the U.S. today. A sea of multi-colored umbrellas filled Lafayette Park, which is situated near the White House. Many protesters made a family day of the outing, carrying homemade signs expressing outrage at the unprecedented government bailouts of the banking and auto industries over the past year, along with the high level of government spending to which taxpayers are now committed to paying back. Check out some photos of the event on CEI’s flickr account.

We Wouldn’t Have Teaparties If It Wasn’t For Rentseeking

by Iain Murray on April 15, 2009 · 3 comments

in Culture, Deregulate to Stimulate, Economy, International, Legal, Regulation, Stimulus to Nowhere, Trade, Zeitgeist

Those who say we tried the free market and it failed should research the history of the Boston Tea Party a little.  We didn’t even have a free market in the 18th century, a period referred to in British history as The Whig Supremacy.  Here’s the background; and to prove that there is nothing new under the sun, it involves company rent-seeking, market distortion, bailouts and stealth taxes.

As early as 1698, the English Parliament awarded the East India Company the monopoly on tea importation into England.  In return the Company paid Parliament a 25% ad valorem tax on the tea imported.  Now, at this stage the Company was not allowed to import tea to the American colonies, so it sold the tea it had imported into England on to other merchants, who sold it in the colonies.  So even at this stage, government was distorting the tea market, by granting a monopoly to a rent-seeking company in return for revenue.

The result should be obvious.  Dutch merchants, paying no tax, were able to undercut the East India Company by exporting tea directly from Holland.  This meant smugglers made a fortune importing the cheaper tea into the colonies and England as well.  The result was that the rentseeker actually suffered.  Now, did government take the simple route and abolish the monopoly and tax, allowing the free market to operate? Of course not.  They complicated matters further.

The Indemnity Act 1767 lowered the tax on tea consumed in Britain, and refunded the tax paid on tea imported to the colonies.  Government, however, needed to replace its lost revenues, and so was passed the infamous Townshend Revenue Act 1767, which levied taxes on all sorts of imports into the colonies.  And so began the dispute about whether or not the British Parliament had the right to tax Americans.  And the smuggling problem remained.

This time, as well as buying black market tea, the colonists organized boycotts and non-importation agreements.  The popular pressure forced Parliament to repeal the Townshend taxes in 1770 – except for the tea tax, which by this time had taken on a symbolic importance of Parliamentary supremacy.

This is where things get really complicated.  In 1772, the Indemnity Act 1767 expired (ah, for the days when British Acts had sunset clauses), thereby eliminating the full refund of the 25% tax on tea exported to the colonies.  A new Act reduced the refund to three fifths, restored some other taxes repealed in 1767 and kept the Townshend tax in place.  Result: a government-imposed increase in the price of tea and a consequent collapse in tea sales.  The East India Company faced ruin – it needed a bailout!

Then as now, the correct bailout solution would have been to remove the government-imposed barriers to business, and let the East India Company sells its teas competitively (and this was what the Company asked for).  To an extent, this was what happened.  The Tea Act 1773 dropped the ban on the Company selling tea to America directly, so removing the middlemen and lowering prices, and restored the full refund of the 25% British tax.  This enabled the Company at long last to sell tea cheaper than the smugglers.

But the Townshend duty remained, an affront to Americans and a symbol to the British government.  Realizing the problem, the East India Company arranged for it to be paid in London or otherwise hidden.  It was, in effect, an early Stealth Tax.

What happened next is well known – the Boston Tea Party was a protest against British usurpation of American liberties, not high taxes (as they had been reduced by the Tea Act 1773).  Yet it was all the result of unnecessary government intervention in the market because some bright spark thought that it would be good for a company to have an income stream guaranteed by government.

In short, if we’d had a genuinely free market in tea in the 1700s, the tensions that led to the American Revolution would have been significantly reduced.

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