The lead story
in today's Washington Post
— above the economy, above the election — is a warning that the Bush administration may deregulate something before it leaves office. Here's the online headline and subhead:
White House Makes a Last Push to Deregulate
New regulations, which would weaken rules aimed at protecting consumers and environment, could be difficult for next president to undo.
The story begins:
The White House is working to enact a wide array of federal regulations, many of which would weaken government rules aimed at protecting consumers and the environment, before President Bush leaves office in January.
The new rules would be among the most controversial deregulatory steps of the Bush era and could be difficult for his successor to undo. Some would ease or lift constraints on private industry....
Once such rules take effect, they typically can be undone only through a laborious new regulatory proceeding, including lengthy periods of public comment, drafting and mandated reanalysis.
OK, that's news. A fair story. Although of course the reporter quotes no economist critical of regulation — just a couple of White House flacks and a business lobbyist — though he does quote at least three pro-regulation "public interest" activists issuing dire warnings of impending doom.
But I was curious: Did the Post
run a prominent story a few days before the 2000 election about the Clinton administration's push to impose sweeping regulations before they left office? You know the answer: of course they didn't. Before election day, according to a Nexis search, there was one reference at the tail end of the jump of a Post
story in the Business section to the Mercatus Center's
Midnight Regulations website. So they knew about the problem — Mercatus was publicizing it, and the Houston Chronicle
ran a front-page story — but the Post
didn't think voters needed to know.
Even though, as today's story mentions after the jump,
[T]he last-minute rush appears to involve fewer regulations than Bush's predecessor, Bill Clinton, approved at the end of his tenure. ...
"Through the end of the Clinton administration, we were working like crazy to get as many regulations out as possible," said Donald R. Arbuckle, who retired in 2006 after 25 years as an OMB official.
Maybe they didn't quite grasp the problem back in 2000. We'll see whether there are such stories toward the end of the Obama administration in the Post
— and on Diane Rehm
, and on ABC News
, and in the New York Daily News
, and all the other places that are very concerned about "midnight deregulation."
Is Barack Obama a socialist? That's the question Cato adjunct scholar Don Boudreaux asks
in one of the last paper editions of the Christian Science Monitor
. Not really, he concludes. But
Anyone who speaks glibly of "spreading the wealth around" sees wealth not as resulting chiefly from individual effort, initiative, and risk-taking, but from great social forces beyond any private producer's control....This "socialism-lite," however, is as specious as is classic socialism. And its insidious nature makes it even more dangerous. Across Europe, this "mild" form of socialism acts as a parasitic ideology that has slowly drained entrepreneurial energy – and freedoms – from its free-market host.
So why does he say that Obama is not a socialist? Well, after all,
"Socialism" originally meant government ownership of the major means of production and finance, such as land, coal mines, steel mills, automobile factories, and banks.
And no American politician would favor that, right? Oh, right.
"There's no logical end to it," Cato Senior Fellow Gerald P. O'Driscoll Jr. said to Neil Cavuto
on Fox Business. He's talking about the incredible expanding bailouts. It started with Bear Stearns in March and then homebuilders
in April. Then Fannie Mae and Freddie Mac in September, and after that the deluge. AIG, announced at $85 billion but quietly increased to $123 billion
so far, and the $700 billion centerpiece and then money market funds and then bank nationalizations and an increase in the federal guarantee to bank depositors. Where will it stop?
Friday's papers noted that the head of the FDIC said that the federal government might start guaranteeing home mortgages. On Saturday we learned that insurance companies want to get a piece of the money. Yesterday the Treasury said that automobile companies--which already got their own $25 billion program--might also be eligible for the general "financial rescue plan," and their success might encourage other industries to try to get in on it.
As I noted before
, Congress is talking about “a second economic stimulus package
, totaling $50 billion in the form of money for infrastructure projects, relief for state governments struggling with rising Medicaid costs, home heating assistance for the Northeast and upper Midwest, and disaster relief for the Gulf Coast and the Midwestern flood zone.” And Transportation Secretary Mary Peters wants "an $8 billion infusion"
for the federal highway trust fund.
Where does all this money come from? The total cost is hard to estimate, because we don't know how many of these guarantees will actually result in payments. But some analysts are talking about a total bill of $2-3 trillion
. Given the underestimate on the cost of the Iraq war, we shouldn't have confidence in any claims that it will be less. So where does the money come from? Even Obama doesn't want to raise taxes that much. And if you tax Americans to bail out as many Americans as we're now talking about helping, eventually you're going to be taxing people to bail themselves out. In fact, the government is likely to borrow some of the money and have the Federal Reserve create more of it. That process seems to be under way, as Greg Mankiw
and Jeff Hummel
have discussed. How can that astounding and unprecedented increase in the monetary base not lead to inflation, even hyperinflation? We've already decided to tax the prudent and thrifty to bail out the imprudent and irresponsible. Now the prudent may face a danger even worse than taxes: inflation that erodes their hard-earned savings.
Howard Baker famously called Ronald Reagan's tax cuts a "riverboat gamble." This is more like a "Celebrity Solstice gamble
David Friedman will talk about his new book, Future Imperfect: Technology and Freedom in an Uncertain World
, at a Cato Book Forum
next Thursday, November 6.
Speaking at Google and to the San Francisco Chronicle
, he describes his thinking this way:
"There are no brakes available. ... If it can be done, it will be done," he said at an event that was recorded and posted on YouTube. "So the interesting thing to me is not what should you stop but how do you adapt." ...
"I've got three different technologies that could wipe out the species," said Friedman, a self-professed libertarian who is certain that neither politics nor central planning will avert a possible bad technological outcome.
"I am much more worried about the government making the wrong response and doing damage than I am about the government not protecting me," said Friedman, adding: "It's a mistake to think of the world as if there was somebody in charge. There's never been anybody in charge."
David Friedman has been one of the most interesting libertarian thinkers for more than 30 years, since he published his book The Machinery of Freedom
. Don't miss his take on the future of technology and freedom. Sign up here.
New York governor David Paterson's top aide, Charles J. O'Byrne, has been forced to resign after revelations that he failed to pay his federal and state income taxes for five years. He owed some $300,000.
His attorney, Richard Kestenbaum, explained that O'Byrne suffered from "non-filer syndrome,"
which "causes them not to be able to file their tax returns." A spokesman for the governor, however, said he has not actually been diagnosed with what she called "late-filers syndrome."
We often note that you could have read it in Cato Institute publications before it hit the mainstream media. In this case, we hate to think that O'Byrne and his lawyer might have gotten the idea from us.
But in fact you can find it in law journals
as far back as 1994.
If this syndrome ever gets listed in the Diagnostic and Statistical Manual of Mental Disorders
, it's going to be more popular than ADD.
According to the New York Times,
Sen. John McCain
stepped up his criticism of the Bush administration by pounding the lectern and demanding that the government support his plan to buy troubled mortgages from homeowners. “And why isn’t the Treasury secretary ordering them to do that?” Mr. McCain asked.
And then he went on:
“We finally learned what Senator Obama’s economic goal is. As he told Joe the Plumber in Ohio, he wants to, quote, ‘spread the wealth around.’ He believes in redistributing the wealth, not in policies that grow our economy and create jobs and opportunities for all Americans. Senator Obama is more interested in controlling who gets your piece of the pie than he is in growing the pie.”
“Socialist!” someone in the crowd yelled.
Presumably the listener yelled "Socialist!" after McCain's gibe at Obama's "spread the wealth" plan, but it's possible that the writing was a little sloppy and the charge actually came in response to McCain's demand that the federal government buy up mortgages.
Robert Zoellick tells the presidential candidates
to aspire to be "a 21st-century FDR" because "A World in Crisis Means A Chance for Greatness." A new New Deal, a new Bretton Woods, a new multilateralism--holy cow, the president has it in his power to make the world over again. Poor Bill Clinton, who reportedly
told friends after 9/11 that he was frustrated that he never got such a great defining crisis to deal with. Now another
president is going to get a chance to knock some heads together and have historians call him great.
But what is Zoellick thinking, urging Barack Obama and John McCain to reach for greatness? Aren't these two candidates megalomaniacal enough? McCain, who thinks that only corruption could explain anyone disagreeing with his position at any given moment, was a childhood admirer of Napoleon and now names the imperialist, meddlesome Teddy Roosevelt as his presidential model. And Obama of course said on the day he secured the Democratic nomination for president
that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth. This was the moment—this was the time—when we came together to remake this great nation.
Don't give these guys any more ambition than they have now. The cult of the presidency
is quite enough already.
The New York City Council has gone along with Mayor Michael Bloomberg's urgent and high-pressured request that it overrule two votes of the people and allow him to serve another term. The council's joint project with the mayor to ignore the will of the people puts me in mind of Bertolt Brecht's famous poem on the East German government, The Solution:
After the uprising of the 17th June
The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee
Stating that the people
Had forfeited the confidence of the government
And could win it back only
By redoubled efforts. Would it not be easier
In that case for the government
To dissolve the people
And elect another?
Citizens for Responsible Politics are wringing their hands
over the fact that Americans may spend $5.3 billion on political campaigns this year. (And it's not all the Obama campaign!) $5.3 billion.
So let's see . . . the federal government just spent $700 billion on a bailout of Wall Street. Or maybe it's $2.25 trillion, or $3 trillion,
in the eventual total cost of the financial bailouts. And we've spent $600 billion--or maybe a trillion, or maybe $4 trillion--on the Iraq war.
And so little things like a $25 billion bailout for the automobile industry become accounting errors. Meanwhile, under President Bush annual federal spending has soared past $2 trillion and past $3 trillion.
And with all this money available in Washington, people have only spent $5.3 billion this year to get a piece of it? What's wrong with them? Political scientists from Gordon Tullock to Stephen Ansolabehere
have pondered this question. Tim Harford says
it's not easy to get politicians to do what you want even when you spend money on them, and that's why people spend so little.
But $5.3 billion to elect a president and 468 members of Congress? That's less than we'll spend on potato chips
NPR reports this morning that the FBI is trying to find out whether the cause of the financial crisis was "simply greed, or whether laws were broken."
Perhaps both institutions are just not attuned to the problem of misguided laws and bad institutions