Barack Obama

Tim Carney on Rick Perry: There’s a Difference Between “Pro-Business” and “Pro-Market”

by Ryan Young on August 18, 2011 · 1 comment

in Economy, Politics as Usual

Washington Examiner columnist (and former CEI Warren Brookes Fellow) Tim Carney has a must-read column today on Texas Governor Rick Perry’s economic policies. They appear suspiciously similar to Bush and Obama’s policies:

“I’m a pro-business governor — I don’t make any apologies about it,” Rick Perry told the crowds in Iowa this week. He’s right, but we can get more specific. Perry is pro-Merck, pro-Boeing, pro-Mesa Wind, pro-Texas Instruments, pro-Convergen, and pro-dozens of businesses that donate to his campaigns and hire his aides as lobbyists.

Perry promises to “get Americans back to work,” but his policies — from backroom drug company giveaways to green energy subsidies — eerily mirror the unseemly big business-big government collusion that has characterized President Obama’s presidency. Judging by his record in Texas, Perrynomics might just be low-tax Obamanomics.

Pro-business politicians are a dime a dozen. What the economy needs to recover are more pro-market politicians. Instead of putting their thumbs on the competitive scales to favor one business or another, Congress and the president should allow an open, competitive market process.

That means the rules of the game would be both clear and few; they would also be consistently enforced. Unlike politicians, markets respect no special interest. If they did, no company would bother with a Washington office.

Consumers do a much better job of picking winners and losers than politicians with campaigning and fundraising on the brain. They should be allowed to try it sometime.

What a shame that few politicians are likely to admit that; such is the curse of “do-something” bias.

CEI Podcast for April 14, 2011: Avoiding a Government Shutdown

by Ryan Young on April 14, 2011

in Economy, Podcast

Have a listen here.

Warren Brookes Journalism Fellow Kathryn Ciano analyzes the Continuing Resolution passed by the House today that will keep the federal government open for another six months. She also looks at proposals from President Obama and Rep. Paul Ryan to reduce the budget deficit over the next decade.

America Doesn’t Need More College Graduates at Taxpayer Expense

by Hans Bader on March 20, 2011

in Economy, Employment, International

President Obama says that “the best economic policy is one that produces more college graduates.” No doubt this is best for colleges, which have been able to increase tuition faster than inflation, year after year, secure in the knowledge that they can rake in ever-rising government subsidies and skyrocketing tuition. Students have little choice but to pay inflated tuition bills to the education industrial-complex, as they vie with each other for scarce entry-level jobs by acquiring ever more degrees that show their ability to jump through hoops and master difficult (but largely useless) skills.

But is this educational arms race really good for America?

Does America really need 8,000 waiters with doctoral or professional degrees? Do 5,057 janitors really need their advanced degrees? Millions of Americans already have useless college degrees.

[click to continue…]

TSA Shuts Door on Private Airport Screening Program That Exposed TSA’s Inefficiency

by Hans Bader on January 30, 2011 · 7 comments

in Labor, Mobility, Precaution & Risk, Regulation

The Transportation Security Administration has shut the door on a private airport screening program that was making the inefficient agency look bad by outperforming it in safety, innovation, and customer satisfaction. The TSA’s action was praised by a liberal union that expects to unionize the TSA, the American Federation of Government Employees. Its head, John Gage, applauded the Obama administration for requiring a “federalized” government “work force.”

The exemption allowing outsourcing to private screeners was originally created in the aftermath of the September 11 terror attacks, when Congress and the Bush administration foolishly nationalized American airport security and created the TSA. While the screeners would be provided by private contractors, they would still be paid for by the TSA and be required to follow the same procedures as TSA-employed screeners.

Previously, the Screening Partnership Program allowed airports to replace government screeners with private contractors. 16 airports did so. “But on Friday, the TSA denied an application by Springfield-Branson Airport in Missouri to privatize its checkpoint workforce, and in a statement,” TSA head John “Pistole indicated other applications likewise will be denied.” The TSA’s head said he did not see any “clear or substantial advantage” to the TSA in allowing additional airports to use private screeners, although he said that the few other airports that already use private screeners will be allowed to continue to do so.

Florida Congressman John Mica (R), chairman of the House Transportation and Infrastructure Committee, criticized the TSA’s decision. “It’s unimaginable that TSA would suspend the most successfully performing passenger screening program we’ve had over the last decade,”Mica said Friday night. “Nearly every positive security innovation since the beginning of TSA has come from the contractor screening program,” Mica said.  Supporters of private screening say it is easier to discipline and replace under-performing private screeners than government ones.

Earlier, the TSA retaliated against a veteran pilot who exposed the TSA’s security failures, taking away whistleblower Chris Liu’s credentials and firearm.

The Obama administration is now seeking to unionize the TSA, even though the TSA was originally forbidden to unionize due to security concerns. Unlike the TSA’s current head, all past TSA administrators have recognized that collective bargaining and union work rules are inconsistent with the flexibility needed to protect public safety and adapt quickly to changes in terrorist tactics. (Undercover agents have managed to slip bombs past TSA screeners, and the TSA is even less effective at detecting them than the private security firms it replaced after 9/11). The AFGE union predicted on January 21 that voting to unionize the TSA will begin by mid-March.

The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.

Bush’s Third Term Continues

by Ryan Young on January 26, 2011

in Economy, Personal Liberty, Sanctimony

President Obama’s policies are remarkably similar to President Bush’s. Most of their differences are in matters of degree, not principle. Both presidents believe in expanding federal involvement in health care, education, energy, you name it. Both grew regulation, spending and deficits at tremendous rates. Even their foreign policy is almost identical.

Over at the Daily Caller, I analyze last night’s State of the Union address (I also live-blogged it here) and find it wanting. There are some real stretches of logic:

In 1957, the Soviet Union launched a satellite into space. Therefore, taxpayers should give more money to politically favored corporations. This is not a rigorous line of thought. But it was typical of yesterday’s State of the Union address.

It wasn’t all bad, though:

There was some good in yesterday’s speech. The president would like to lower corporate tax rates. After Japan’s recent rate cuts, America now has the highest corporate tax rate in the developed world — nearly 40 percent in most states. This is not the way to encourage businesses to invest in America.

I wish the president had spent a little more time on the rate cut. He could have explained to the country and his party that businesses don’t actually pay corporate taxes. That’s because businesses pass on their costs. Consumers — you and I — foot the bill.

Read the whole thing here.

Obama State of the Union Flunks Fact Check; More Wasteful Spending and “A Million Points of Trite”

by Hans Bader on January 26, 2011

in Economy, Employment, Politics as Usual

The Associated Press fact-checked Obama’s State of the Union address last night, and found it to be misleading in many ways: “The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other.” Michelle Malkin panned Obama’s call for even more rapid increases in education spending, calling it “Cash for Education Clunkers.” Neil McCluskey responded with an op-ed entitled, “For the Nation’s Sake, Cut Education Spending.” I earlier discussed the President’s proposed spending increases, noting that learning and studying have declined in America’s universities even as education spending has exploded, and that ever-more costly college educations aren’t yielding better jobs or economic growth.

Obama talked a lot about the need for more government “investment,” a euphemism for spending on pet projects favored by liberals. Professor Jacobson called Obama’s address “a million points of trite” for all the recycled talking points it contained. Even the liberal Robert Scheer called the speech “platitudinous hogwash.”

Image credit: Robert Couse-Baker’s flickr photostream.

Thoughts on the State of the Union and Education in America

by Hans Bader on January 25, 2011

in Culture, Economy, Employment, Politics as Usual, Zeitgeist

In the Washington Examiner, I discuss some of the president’s anticipated proposals in his State of the Union address today. The president is expected to call for even more increases in education spending. That might not be a good idea, judging from the recent book Academically Adrift. George Leef, of the Pope Center for Higher Education Policy, argues in the New York Times that rising college attendance rates have led to “lower academic standards” as colleges cater to marginal students who are interested in getting paper credentials, not learning. Leef says that due to “the mistaken notion that the country needs to have far more people going through college, the federal government is making it easier for students to borrow the money for it. Consequently, we will lure more marginal students into college, further increasing the pressure to lower standards. It has been accurately said that college is the new high school; the way we are going, soon it will be the new middle school.”

FCC Net Neutrality: Some Networks are More Neutral than Others

by Grant Babcock on December 22, 2010

in Regulation, Tech & Telecom

I often have trouble explaining exactly what the problem is with the government mandating net neutrality. Luckily President Obama’s statement on the FCC’s recent decision on the matter has done most of the work for me — I just have to help him be more explicit about a few things. Words in brackets are my additions.

Today’s decision [by FCC bureaucrats] will help preserve the free and open nature of the Internet [as defined by the government] while encouraging innovation [as directed by the government], protecting consumer choice [as circumscribed by the government], and defending free speech [as approved by the government].   Throughout this process, parties on all sides of this issue – from consumer groups to technology companies to broadband providers – came together to make their voices heard. [In fact, the government always listens to the people's complaints, even when it isn't politically expedient.] This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation. [Because no one will innovate, the economy won't grow, and no jobs will be created unless we, the government, have an overall strategy to make sure that all those things happen.]

I am reminded of a one-liner I once heard about Apple Computer: “Apple offers the best in user-friendliness. User-friendliness, of course, is defined as ‘what Steve Jobs thinks you should find intuitive.’” That’s basically the problem with net neutrality. Sure, a lot of it makes a lot of sense. That doesn’t mean it makes sense for everyone, nor that it will continue to make sense indefinitely. The tech sector evolves by the minute. The FCC? More like a decade. Codifying a certain type of content delivery strikes me as the height of folly, and has led to stagnation in the telecom sector in the past — no one talks fondly of the “Ma Bell” era. So why do so many people want to head back that way?

It seems to me that the likely result of mandatory net neutrality will not be a vibrant, free Internet, but instead a politicized mess where instead of treating all types of traffic equally, it will be the case that some types of network traffic are — to borrow Orwell’s well-known phrase — more equal than others.

For more on network neutrality, check out my colleague Ryan Radia’s piece, “Video: The Open Internet and Lessons from the Ma Bell Era,” and from the Progress and Freedom Foundation’s Berin Szoka and Adam Thierer, check out “Just say no to Ma Bell-era Net neutrality regulation.”

Crony Capitalism, the TSA, and Insider Trading

by Alex Schibuola on November 23, 2010 · 1 comment

in Odds & Ends

An additional dollar of resources that government uses means one less dollar of resources for the private sector. The private sector’s use of resources must satisfy consumers’ wants. If they don’t, businesses won’t make profits. A government’s use of resources however makes no guarantee about satisfying consumers’ wants.

Take for example, the video game and movie series Resident Evil. It’s about an evil corporation that produces an army of cannibalistic zombie warriors. My willingness to pay for cannibalistic zombie warriors is $0. I imagine most people share my unwillingness to pay. Quite frankly I’d rather have a beer, or a million other goods. All those resources used to produce zombies (scientists, security guards, cement and equipment, etc.) become unavailable to satisfy my preferences for an additional beer or other wants.

So who on earth is willing to pay for cannibalistic zombie warriors? Governments are. If the zombie warrior example is to extreme for you just consider the following government waste of resources: Amtrak, bridges-to-nowhere, nuclear missiles, your DMV, the TSA’s full body scanners, etc. No single human is willing to pay for them so no business is willing waste resources to produce them.

But if a government can take resources from people (taxes) and spend it as politicians choose, businesses can avoid producing to satisfy consumer wants. Rather, by making the right political campaign contributions, businesses can avoid satisfying consumers and just get contracts from government. All of a sudden insider trading by politicians becomes a lucrative trade and crony capitalism reigns supreme.

The TSA full-body scanners are a particularly egregious case of this. George W. Bush’s former Homeland Security Secretary, Michael Chertoff has a personal financial stake in the production of full body scanners produced by Rapiscan Systems (a subsidiary of OSI Systems). Notably, the CEO of OSI Systems recently joined President Barack Obama on the recent trip to India. No doubt it was a great opportunity to convince Obama of the “necessity” of full-body scanners in the ironic battle to protect freedom.

OSI’s 10-Q statement reports that “Revenues for the Security division for the three months ended September 30, 2010, increased $3.8 million, or 8%, to $51.1 million, from $47.3 million for the comparable prior year period. The increase was attributable to… a $8.1 million increase in people screening equipment as a result of wider adoption of body scanners…”

If OSI Systems is representative of the crony capitalist industry, you can see here how much better crony capitalist firms (see blue line) are performing relative to the S&P 500 (see red line).

The President, as leader of the executive branch of government, is supposed to protect and defend the Constitution of the United States, which (via the Fourth Amendment) protects Americans from government searches and seizures without probable cause. I consider TSA searches to violate this.

Any economist will tell you that incentives matter. If current and former executive branch members have a personal, financial incentives regarding issues (especially ones that contradict the Bill of Rights/Constitution) they’ll be more likely to shirk their sworn duty to defend and protect the Constitution.

Foreign Money is Not the Problem

by Ryan Young on October 13, 2010

in Personal Liberty, Politics as Usual

President Obama caused a stir recently by declaring that the Chamber of Commerce, which is running ads critical of his policies, is funded with foreign money.

It’s a weak criticism. And not just because the amount of foreign money involved is trivial. Or because labor unions and other political groups across the spectrum also accept small amounts of foreign money.

President Obama seems to be saying that people are smart enough to know whether or not a candidate or a political party is bamboozling them in their campaign ads. But people suddenly lose their wits when an outside group, or — gasp! — someone from another country does the exact same thing. That kind of cognitive dissonance must be difficult to live with.

Because arguments against foreign money in politics are so weak, people who use those arguments are either ill-informed or lying.

Lying is much more likely in this case. If your own arguments are weak, a common tactic is to distract your audience and hope they don’t notice. It works more often than not. Here, President Obama is taking advantage of the fact that almost all people suffer from anti-foreign bias. Not racism. Anti-foreign bias. They’re different. And pandering to that bias can be extremely useful politically.

Why does such a cheap tactic work? It’s because anti-foreign bias is in our DNA. Our hunter-gatherer ancestors lived in small bands. Anybody outside that band was a very real threat to steal food, clothing, or potential mates. So people learned to be wary of outsiders. It was good for one’s life expectancy.

As tribes became villages, towns, cities, and now nations, the number of people we consider insiders has grown. And we treat outsiders much better than we used to. Trade is more common than war in most places. But most people are still instinctively leery of outsiders. It is our nature.

That’s why it’s disappointing to see President Obama so cynically play that card. Clearly he and the Chamber of Commerce prefer different policies. It would be nice to see the president engage the Chamber at a higher level than the ad hominem.

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