Will the Blue Dogs Ever Bite? by David Boaz

We've written more than once about the Democratic "Blue Dogs" and the lack of any actual evidence for their supposed fiscal conservatism. Now Merrill Mathews in The Wall Street Journal tells the sad story of the Blue Dogs in the Obama era. They call in the journalists, and they moan and complain about their concerns over the deficit and rising federal spending. And when the rubber meets the road, what happens?
•?The State Children’s Health Insurance Program (SCHIP). One of the first things the Democratic leadership wanted the newly inaugurated President Obama to sign was a huge expansion of SCHIP. Democrats have been trying to pass the expansion for over a year, with some bipartisan support. President George W. Bush vetoed the legislation twice, and Congress sustained his veto both times by a hair. SCHIP was created for low-income uninsured children not eligible for Medicaid. Under the old bill, children whose family incomes were 200% of the federal poverty level were covered. With the new bill, Democrats increased funding to cover children whose family incomes are up to 300% of the federal poverty level—or $66,000 a year for a family of four. The Bush administration and most conservatives thought it should remain at 200%. Did the Blue Dogs agree? Only two voted against the expansion. •?The $787 billion stimulus. The next major spending package was Mr. Obama’s stimulus bill. Not one House Republican voted for the bill. The Blue Dogs? Only 10 of 52 voted against it. •?President Obama’s 2010 federal budget. In April, Congress took a vote on the president’s $3.5 trillion budget for 2010—by far the biggest spending package in history. Again, not one House Republican voted for the bill, but only 14 Blue Dogs joined them in opposition.
Matthews says the health care bill is the Blue Dogs' last chance to show that they actually do care whether the federal government spends us into bankruptcy.

Posted on July 30, 2009  Posted to Cato@Liberty

More Evidence on the Turning Tide by David Boaz

america-store_2065_6501360I wrote recently about the anti-Obama T-shirts on display at Washington's Dulles Airport. This week I can report that at the Baltimore/Washington International Thurgood Marshall Airport, there are big cut-outs of Barack and Michelle Obama. But they're standing by a display of shirts reading "Don't Blame Me, I Voted for McCain and Palin" and another reading "NOPE (with the Obama campaign logo) -- keep the change." The times they are a-changin'. In the interest of full disclosure, I should note that out in the real America, the airports of Albuquerque and San Diego, there are no T-shirts on display for or against any politician. It's like they don't think Americans care about politicians.

Posted on July 29, 2009  Posted to Cato@Liberty

Brainstorming for (Your) Dollars by David Boaz

The Wall Street Journal reports [$]:
President Barack Obama's health-care plan is in jeopardy because of serious concerns that costs will spin out of control. As much as anyone, it's White House budget director Peter Orszag's job to save it... After his TV appearances, he went straight to the Senate Finance Committee, where he spent three hours with committee aides brainstorming about how to pay for the trillion-dollar legislation. At one point, they flipped through the tax code, looking for ideas.
Note, of course, that finding new sources of tax revenue doesn't do anything about cost concerns. But for those "fiscal conservatives" who worry more about the deficit than about the government ending up with all our money, new revenue to match new spending may alleviate their concerns. (By the way, this WSJ article also has interesting vignettes about Orszag's encounters with libertarian writer Virginia Postrel and my former colleague Andrew Biggs.) For a review of some of the ideas Orszag and his friends have found as they flipped through the tax code — such a charming metaphor for the reality of the ruling class looking for opportunities to extract more of the money we earn — click here.

Posted on July 25, 2009  Posted to Cato@Liberty

Reporting the Minimum Wage by David Boaz

Economists generally agree that minimum wage laws tend to put low-skilled workers out of work. (Even economists who support minimum wage laws for reasons of politics or "justice" don't really argue that the laws don't raise unemployment.) But that message hasn't really reached journalists. Today's stories on the mandated rise in the minimum wage take one of two forms: Assuming that the raise is "good news" for low-paid workers, or quoting one economist on each side. The latter is certainly better, but it does convey the sense that "economists disagree about the effects of minimum wage laws," which doesn't really reflect the state of economic knowledge. NPR used both versions. Some of its hourly newscasts led with "The minimum wage hike  means 70 cents more per hour for low-income workers." But some also noted, "That's supposed to be good news for low-income workers, but economists disagree about whether it will help or hurt the economy." NPR did a somewhat balanced story yesterday.  Many journalists went with the easy, mostly wrong, "good news" approach, as these headlines and first sentences illustrate:
  • ABC News: Relief for Workers at Bottom: Minimum Wage Goes Up
  • Time: With the U.S. trillions of dollars in the hole, 70 cents an hour sounds like chump change. But it's a big boost for the millions of workers who earn that much extra as of July 24.
  • Philadelphia Inquirer: Minimum-wage workers to get a pay bump today
  • WFMY (Greensboro, NC): Starting today, minimum wage workers will see extra cash in their pay checks.
  • News on 6 (Tulsa): Thousands of Oklahoma workers will receive a pay raise on Friday when a new federal minimum wage takes effect.
But some did at least acknowledge the controversy:
  • APMinimum wage hike could threaten low earners' jobs
  • USA Today: The third minimum wage increase in three years, effective Friday, is a moneymaker and a money-taker: Millions of workers soon will see pumped-up paychecks, while many already-struggling businesses face the burden of increased payroll costs.
  • CNN: Minimum wage hike: More money or fewer jobs?/On Friday the federal minimum wage jumps to $7.25 an hour from $6.55. Economists differ as to whether that will hurt or help low-income workers.
  • Kansas City Star: The federal minimum wage rises today from $6.55 to $7.25 an hour, bringing with it controversy about whether the increase is good or bad for the economy.
The New York Times gets the prize for its stark decline in economic understanding. Its editorial today begins, in a triumph of hope over economic reasoning:

Posted on July 24, 2009  Posted to Cato@Liberty

Obama’s Press Conference: Rush to Judgment by David Boaz

At the Politico I write:
It's easy to find, as Gallup just did, that majorities of the public want everything -- guaranteed health insurance, that covers all possible problems, that lets you choose your own doctor and the treatments you need, that lets you keep your current plan -- and they want it cheap. Or they're OK with letting someone else pay. So when President Obama promises health care that does all those things, he can find a receptive audience. Still, when you ask people whether they really believe the federal government can provide more health care to more people, and save money in the process, most of them don't. And that's the problem Obama faces. And the reason he's so insistent on doing it NOW is that he fears that the longer people mull that conundrum, the more they will realize the unlikelihood of a vast new federal program bringing down the cost of anything. Obama also said that his administration "inherited an enormous deficit....have not reduced it as much as we need to and we would like to." That's a half-truth at best. The Bush administration and the Republican Congress spent like drunken sailors. But driving the deficit into the stratosphere is Obama's decision. If he thought the deficit was too high, he didn't have to push a $787 billion stimulus bill and a $3.6 trillion budget. If he thinks the effects of the stimulus are worth the enormous, unprecedented, unimagined deficits, then let him stand up and say so instead of pretending that he's been trying to "reduce it."

Posted on July 23, 2009  Posted to Cato@Liberty

Ad Campaign for Real Health Care Reform by David Boaz

Check your local paper today for Cato's full-page ad about a better health care reform solution: "freedom. Freedom to choose your doctor and health plan. Freedom to spend your health care dollars as you choose. Freedom to make your own medical decisions. Freedom to keep a health plan you are satisfied with." It's running today in the New York Times, the Washington Post, the Washington Times, the Chicago Tribune, and the Los Angeles Times. Or find the ad here, along with radio ads as well. These ads aren't cheap, so please consider making a contribution to support Cato's health care reform efforts.

Posted on July 23, 2009  Posted to Cato@Liberty

Taxpayer-Funded Lobbying by David Boaz

There's lots of outrage in the blogosphere over revelations that some of the biggest recipients of the federal government's $700 billion TARP bailout have been spending money on lobbyists. Good point. It's bad enough to have our tax money taken and given to banks whose mistakes should have caused them to fail. It's adding insult to injury when they use our money -- or some "other" money; money is fungible -- to lobby our representatives in Congress, perhaps for even more money. Get taxpayers' money, hire lobbyists, get more taxpayers' money. Nice work if you can get it. But the outrage about the banks' lobbying is a bit late. As far back as 1985, Cato published a book, Destroying Democracy: How Government Funds Partisan Politics, that exposed how billions of taxpayers' dollars were used to subsidize organizations with a political agenda, mostly groups that lobbied and organized for bigger government and more spending. The book led off with this quotation from Thomas Jefferson's Virginia Statute of Religious Liberty: "To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical." The book noted that the National Council of Senior Citizens had received more than $150 million in taxpayers' money in four years. A more recent report estimated that AARP had received over a billion dollars in taxpayer funding. Both groups, of course, lobby incessantly for more spending on Social Security and Medicare. The Heritage Foundation reported in 1995, "Each year, the American taxpayers provide more than $39 billion in grants to organizations which may use the money to advance their political agendas." In 1999 Peter Samuel and Randal O'Toole found that EPA was a major funder of groups lobbying for "smart growth." So these groups were pushing a policy agenda on the federal government, but the government itself was paying the groups to lobby it. Taxpayers shouldn't be forced to pay for the very lobbying that seeks to suck more dollars out of the taxpayers. But then, taxpayers shouldn't be forced to subsidize banks, car companies, senior citizen groups, environmentalist lobbies, labor unions, or other private organizations in the first place.

Posted on July 23, 2009  Posted to Cato@Liberty

Bailouts Could Hit $24 Trillion? by David Boaz

ABC News reports:
"The total potential federal government support could reach up to $23.7 trillion," says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government's efforts to fix the financial system. Yes, $23.7 trillion. "The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn't even imaginable," said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. "If you spent a million dollars a day going back to the birth of Christ, that wouldn't even come close to just $1 trillion -- $23.7 trillion is a staggering figure." Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could. At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.
We used to complain that George W. Bush had increased spending by ONE TRILLION DOLLARS in seven years. Who could have even imagined new government commitments of $24 trillion in mere months? These promises could make the implosion of Fannie Mae and Freddie Mac look like a lemonade stand closing.

Posted on July 20, 2009  Posted to Cato@Liberty

Soaring Sales for “Road to Serfdom” by David Boaz

Cato's new staff writer, Aaron Powell, told me he had recently seen two people on the Washington Metro reading The Road to Serfdom by F. A. Hayek. That prompted me to check the sales figures for Road to Serfdom at Nielsen's Bookscan. And whattaya know? Sales have increased this year at an even faster pace than sales of Atlas Shrugged. (Atlas sells 10 times as many copies, but the percentage increase over last year is less.) So far this year the most popular edition of Road to Serfdom has sold 11,000 copies. That compares with 3,000 copies at the same point last year. That's a 263 percent increase for those of you keeping score at home. Why? Well, no doubt huge new government spending programs and attempts to massively expand the welfare state send people looking for classic literature that makes the case for liberty and limited government. But what the Marxists call the "objective conditions" can always use a bit of help. And indeed, just as I found in investigating the sales bump for Atlas Shrugged, it looks like an op-ed in the Wall Street Journal was instrumental in boosting the sales of The Road to Serfdom. On February 4, former House Majority Leader Dick Armey, now chairman of Freedomworks, published an op-ed in the Journal titled "Washington Could Use Less Keynes and More Hayek." Sales of Road to Serfdom, which were in the low hundreds each week since the beginning of 2009, more than doubled over the next four weeks. It seems likely that Armey's op-ed caused the new interest. Armey didn't actually mention The Road to Serfdom -- he just talked about Hayek and his ideas generally -- but when you go looking for Hayek, you're going to find his most popular book. So maybe we could attribute the sales bump instead to David Henderson's review of The Road to Serfdom -- titled "Still Relevant--Perhaps More So" -- in the Spring issue of Regulation. But the Wall Street Journal does have a larger circulation. Update: This item has been edited to remove proprietary information.

Posted on July 20, 2009  Posted to Cato@Liberty

Remembering the Good Old Days by David Boaz

Actress and former Miss America Vanessa Williams reminisces on NPR about the long car trips her family used to take "when gas was like 30 cents a gallon, and my parents would complain that it was going up to 35 cents." No wonder families could take car trips then. But wait a minute. Williams was born in 1963. So let's say she's remembering family trips from about 1970-75. This chart from the Department of Energy does show that retail gasoline prices were around 35 cents a gallon at the beginning of that period, going above 50 cents by 1975. But adjusted for inflation, that was more like $1.50 in 2000 dollars. And as Jerry Taylor and Peter Van Doren show (click on the chart to enlarge), the price then was about $3.00 adjusted for inflation and changes in disposable per capita income — just about what it is now. So Williams's memory was correct — gas was about 35 cents when her family went on trips. But the implication that those were the good old days of cheap gas isn't quite right. In terms of the family budget, gas costs about the same now as it did then. Julian Simon used to write about how people have been deploring the lost "good old days" since ancient times. Sometimes he quoted the columnist and Algonquin Round Table regular  Franklin Pierce Adams: “Nothing is more responsible for the good old days than a bad memory.”

Posted on July 19, 2009  Posted to Cato@Liberty

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