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Benghazi goes from Unfortunate to Unconscionable October 28, 2012

Posted by federalist in Government.
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Until now I had thought the September 11 Benghazi (Libya) incident in which 4 Americans were killed was essentially unfortunate.

Granted, the American Executive’s response in subsequent days gave plenty of fodder to anyone doubting the Obama administration’s political principles.

But the fact that a Libyan militia was able to overwhelm an American consulate and kill an ambassador and three other American operatives represents, at face value, an honest failure assess and address the security situation.

The reality we are learning is far more damning.  CIA contractors, including at least two former Navy SEALs, were manning a fortified CIA installation a mile from the consulate.  At least one report now indicates they asked for military backup and for permission to launch a rescue of the consulate.  Those requests were denied by the CIA.  Ignoring orders to “stand down” a team of those operators left the CIA “Annex,” rescued those remaining at the consulate, and recovered the body of one of the two Americans killed there.

Before the night was over, the CIA installation itself came under attack.  Among its defenses were veteran warriors, heavy machine guns, and a laser designator trained on an enemy mortar squad.  They were in constant contact with the chain of command, including calling in the coordinates of enemy forces to allow drone or off-shore fire missions.  It was a mortar that killed two more Americans that night — 7 hours after the attack on the consulate began.  During this time, continued requests for military support were denied.

Defense Secretary Leon Panetta complains about “Monday-morning quarterbacking” as we learn that refusals for support came from his level, if not the White House itself.

Given the military resources in the region, the duration of the attack, and the communication channels that remained open throughout the incident, the failure of the military leaders to unleash prompt and decisive support is unconscionable.  Failing to prepare is unfortunate and perhaps even incompetent.  This failure to respond is reprehensible.

(One saving grace is that the military leader responsible for sending reinforcements, General Ham of AfriCON, may have actually ignored orders to wait.  If true, the rumor follows that he was immediately relieved of command, which would elevate the actions of the top civilian leadership to what I consider to be criminal negligence: When a General orders a rescue mission there is no second-guessing that.  Higher-ups can “Monday-morning quarterback” that and end his career after the fact, but AFAIK relieving a General on the spot for green-lighting an isolated rescue effort in an overt conflict is unprecedented.)

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Sometimes ‘Nothing’ Is Better Than ‘Something’ – Part II October 26, 2012

Posted by federalist in Government, Uncategorized.
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One might use the title of this post as “the moral of government.”

Inspired by Michael Boskin’s essay today, which expounds on the argument:

Government failures are as pervasive as market failures…. The potential for such failures grows as government grows.

Why pay to do when others will pay you? – Part II September 5, 2012

Posted by federalist in Government Spending.
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Government seems to have a penchant for paying for services that could be provided for free, or even for revenue.

My first example of this was Air Marshals (“Why Pay Air Marshals When Others Would Pay To Do the Job?”), but I believe there are many more examples waiting to be discovered.

Today’s example comes from the NSSF:

TWO MUNICIPAL DEER-CONTROL PROGRAMS CONTRAST SHARPLY . . . Two news reports show a marked difference in cost between municipalities managing deer with commercial sharp shooters or doing it with hunters and, at the same time, providing recreational opportunities to its citizens. A hunter-participation program in Bernards Township, N.J., has seen car-deer collisions in the township drop from 289 in 2000-01 to a record low of 89 in 2011-12. Total expenses for the coordinated sportsmen hunting program that culled 357 deer in 2011-12 were $20,747, averaging out to $58 per deer. In contrast, Solon, Ohio, implemented a commercial sharp shooter program at a cost to taxpayers of $183,353. Some 300 deer were culled, at an average cost of $611.18.

Bemusing: ATF regulations on producing alcohol as onerous as for firearms August 16, 2012

Posted by federalist in Regulation, RKBA.
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Well almost. Until 2005 distillers even needed to pay a Special Occupational Tax (SOT) — just like manufacturers and dealers of NFA items like machineguns.

However the government, through the ATF, is still very serious about regulating and taxing the distillation of alcohol. Their FAQ effectively says, “Don’t try this at home:”

You may not produce spirits for beverage purposes without paying taxes and without prior approval of paperwork to operate a distilled spirits plant.  [See 26 U.S.C. 5601 & 5602 for some of the criminal penalties.]  There are numerous requirements that must be met that also make it impractical to produce spirits for personal or beverage use.  Some of these requirements are paying special tax, filing an extensive application, filing a bond, providing adequate equipment to measure spirits, providing suitable tanks and pipelines, providing a separate building (other than a dwelling) and maintaining detailed records, and filing reports.  All of these requirements are listed in 27 CFR Part 19. Spirits may be produced for non-beverage purposes for fuel use only without payment of tax, but you also must file an application, receive TTB’s approval, and follow requirements, such as constructionuse, records and reports.

The Truth About Food and Drug Expiration Dates July 25, 2012

Posted by federalist in Healthcare, Markets, Regulation.
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The FDA colludes with food and drug manufacturers to maintain a twisted myth about food and drug longevity. For example, here’s an FDA “Consumer Update” in which a pharmacist emphatically warns people not to use drugs after their expiration dates.

But how are expiration dates set, and what happens when drugs “expire”? A great article by Laurie Cohen in the 2000-03-29 WSJ investigated these questions. Key discoveries:

  1. Manufacturers can set expirations as short as they want.  It appears that they mostly choose dates to optimize the turnover of inventory.  I.e., they don’t want their products sitting in stores or medicine cabinets for 10 years, even if they’re good for that long.  They’d rather stamp a date a year or two out, forcing retailers and encouraging consumers to buy “fresh” replacements.
  2. Pharmacies typically mark dispensed drugs with a 1-year date of expiration, without regard to the expiration date of their supply.
  3. Military tests have determined that most drugs are safe and potent for years after their marked expiration dates.
  4. Storage conditions have a dramatic effect on food and drug longevity.  In general, the lower the exposure to heat, moisture, oxygen, and light, the longer they last.
  5. Most drugs begin to “decay” from the moment they are manufactured.  The risk of consuming old drugs is not that they will be dangerous, but rather that they will be less effective than fresh drugs.  E.g., an old 100mg pill might be only as therapeutic as 90mg of  a new pill.

For a lot of drugs “reduced potency” is not a reason to discard them.  Perhaps the most outrageous piece of this conspiracy:

[P]oor countries — under urging from the World Health Organization — often reject drug-company donations of much-needed medicines if they are within a year of their expiration dates.

Here’s why we need teachers, firefighters, and police officers June 13, 2012

Posted by federalist in Government, Unions.
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The Obama campaign extends the following invitation:

Mitt Romney thinks we can afford to cut jobs for teachers, firefighters, and police officers—so let’s help him see why our communities and our economy can’t afford that.

Share a story about how a teacher, firefighter, or police officer has made a difference in your life.

Here goes:

My wife and I have college degrees. Our fathers, now in their sixties, have advanced degrees. We’re all working year-round in for-profit endeavors to maintain a secure middle-class lifestyle, and to build savings to support us in a future in which we may not be able to work to provide for our needs.

Teachers in our public school district get annual salary and benefits totaling well into six figures for working 35-hour weeks 8 months a year. They “retire” as early as age 55 and collect government-guaranteed pension and health benefits for the rest of their life. Our local police officers can retire in their forties with full pensions and benefits.

Watching these “public servants” gorging at the public trough has made me hate government and the union cartels that exploit it. As you might say: Our communities and our economy can’t afford teachers and police on these terms.

On the plus side: My community is served by volunteer fire companies. Just goes to show that you don’t need government to do everything — even to provide public services.

Lazy Law: BATFE edition January 4, 2012

Posted by federalist in Regulation, RKBA.
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It is unfair for ATF to hold individuals to a standard that they cannot articulate themselves.

In a prime example of Lazy Law, the Washington Times describes how the ATF hurts the firearms industry with capricious, secret, and at times contradictory bureaucratic rulings on what manufacturers can build. The Bureau issues approvals for products that it can arbitrarily revoke at any time without compensation to those who lose money as a result.

Lazy Law Update December 12, 2011

Posted by federalist in Regulation.
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During a long story on one example, the WSJ offers this update on the proliferation of laws, rules, and prosecutorial power I call Lazy Law:

Today, there are an estimated 4,500 federal crimes on the books, a significant increase from the three in the Constitution (treason, piracy and counterfeiting). There is an additional, and much larger, number of regulations written to enforce the laws. …

Many of these federal infractions are now easier to prosecute than in the past because of a weakening in a bedrock doctrine of Anglo-American jurisprudence: the principle of mens rea, or “guilty mind,” which holds that a person shouldn’t be convicted if he hasn’t shown an intent to do something wrong.

QOTD: “Corporations” Too Powerful? March 23, 2011

Posted by federalist in Government.
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Max Hensley to the WSJ:

I’m not afraid of corporations. They don’t have men with guns enforcing the collective will of the rent seekers, parasites and zealots who animate the government.

The Reality of Public Sector Unions March 1, 2011

Posted by federalist in Government, Unions.
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Collective bargaining in the public sector is less a negotiation than a conspiracy to steal money from taxpayers.

That’s from James Taranto’s excellent review of the arguments against public sector unions.

Clay Johnson ofers an excellent summary in a WSJ letter yesterday:

The public sector is not a free market, it is a government-imposed monopoly. The final “customer” has no choice or alternative. There is no outside competition, and we all must buy the product.

There cannot be a legitimate collective bargaining negotiation without the discipline of a free customer able to say no. If we must have public-sector monopolies, we should require that they provide maximum value to the taxpayer at minimum cost. They may always join us in the private sector if they wish to freely negotiate a better alternative.

Indeed, private unions can drive their business into bankruptcy. (Or at least they could before the federal government got into the business of bailing out private companies.) Public unions, no matter how greedy, only drive their employers to raise taxes.

Charter Cities — Better Than the Free State Project February 3, 2011

Posted by federalist in Federalism, Government, Markets.
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The United States of America was supposed to be a federation of independent states. If the Federal government hadn’t so overstepped its constitutional bounds we would presently have a great experiment in which fifty States were free to test different polities, and some measure of competition between them would over time lead to and preserve good government. Sadly, owing to Federal overreach the States have been left with less power and freedom to shape their polities, so the Great Experiment has become a Modest Experiment: States still compete for citizens and businesses through tax and regulatory policies1. But no matter where you go you’re subject to the same Federal government that controls nearly 20% of GDP and whose regulatory power dwarfs that left to the States.

The Free State Project was an effort begun a decade ago to focus the political power of a large number of libertarians on a single State (ultimately choosing New Hampshire) where they would, as citizens, work to incrementally free the State from unconstitutional Federal rule.

Recently, “Tenthers” (so named for the Tenth Amendment) have been working more broadly to restore State rights under the Constitution.

But to me nothing beats the idea of a “Charter City” as promoted by Paul Romer: This would be a territory cut free from its donor government, governed only by its own charter. The Charter City would have its authority guaranteed by a strong and stable third party — Hong Kong under British administration was an example of this. Like free trade zones and for-profit states a charter city in a relatively unfree or poorly governed region of the world would expect to attract extraordinary investment, leading to exceptional growth and prosperity, which would hopefully be contagious to its neighbors.


1 The Mercatus Center has an excellent analysis of the current differences between states in its 2009 publication Freedom in the 50 States.

How to Pick the Regulators January 22, 2011

Posted by federalist in Regulation.
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Paul Rubin explains why deregulation under Obama is not likely to happen, based on his years as a deregulator for Reagan:

The permanent staffs of the agencies were always interested in more regulation, either because of self-selection or because promotions and power increase in a larger agency. It also helped that we deregulators (generally economists) were not usually interested in permanent government positions, because reducing the power of the agency is a sure way to make enemies.

(For an excellent book on this problem pick up James Wilson’s Bureaucracy.)

It sounds like the executive branch needs something analogous to jury duty, where top regulators are pulled from industry. To the degree that their industry affiliations present a conflict of interest in deregulation, at least they will counterbalance the permanent regulatory staffs’ asymmetric interest in increased regulation.

One particular example recently brought to mind is Richard Bookstaber: A veteran of the finance industry who more than a year ago accepted a role as Senior Policy Advisor in the SEC’s Division of Risk, Strategy and Financial Innovation. (I was reminded of him because the uncannily prescient book he published four years ago is apparently still being plagiarized.)

Government’s New Standards for Regulation January 18, 2011

Posted by federalist in Regulation.
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WSJ today printed a promising essay by President Obama outlining his administration’s new approach to regulation. Granted, in government it’s a long way from good principles to good practice. And it’s hard even to draw coherent principles from the meandering examples in his essay. The strongest theme seems to be ‘balancing the costs and benefits of regulation,’ which works well when those costs and benefits are objectively assessed, but poorly when the Precautionary Principle takes over.

Nevertheless, we’re in for a treat if government regulation “… means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices.”

Sometimes ‘Nothing’ Is Better Than ‘Something’ January 11, 2011

Posted by federalist in Government.
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I opted out of commercial air travel long before the We Won’t Fly campaign. After all, the Precautionary Principle went to work right after 9/11 with the establishment of the Transportation Stupidity Administration (TSA).

Wes Benedict, paraphrasing Congressman Rush Holt, summarizes the problem:

Something bad happens. People demand Congress do “something” about it. Congress comes up with “something.” And so “something” gets implemented, even if it doesn’t do any good, because in the minds of Congress and the voters, “something” is better than nothing.

People, when it comes to government, “nothing” is usually better than “something.”

QOTD: Public Unions December 13, 2010

Posted by federalist in Government, Pensions, Unions.
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Governor Tim Pawlenty in today’s WSJ:

The moral case for unions—protecting working families from exploitation—does not apply to public employment. Government employees today are among the most protected, well-paid employees in the country. Ironically, public-sector unions have become the exploiters, and working families once again need someone to stand up for them.

An editorial provides supporting information:

Twelve states including North Carolina and Virginia don’t allow government workers collective bargaining rights, and another 12 allow it only for some unions. These states by and large have managed to hold down their pension liabilities better than have those where public employee unions essentially run the government—see Illinois, New Jersey and California.

The Overreactions of Crowds June 22, 2010

Posted by federalist in Regulation.
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Speaking recently of the regulatory reaction to the Flash Crash I observed, “In the aftermath of a crisis or accident crowds have an unfortunate tendency to build momentum behind overwrought and foolish responses.”

The WSJ, in discussing regulatory reactions to the Gulf oil spill, notes that this problem has been generally referred to as the “precautionary principle.”

This principle holds that government should attempt to prevent any risk—regardless of the costs involved, however minor the benefits and even without understanding what those risks really are.

In practice such irrational “precautionary” behavior tends to accompany public panics, which themselves seem to be a product of the mass media’s success in fomenting mass hysteria. In any case, the WSJ cites Cass Sunstein as an expert on the problem:

Formerly of the University of Chicago and Harvard, and now the regulatory czar in the White House budget office, Mr. Sunstein calls the precautionary principle “incoherent” and “paralyzing,” as he put it in an essay in the journal Daedalus two years ago.

“Precautions cannot be taken against all risks,” Mr. Sunstein elaborated in his 2005 monograph Laws of Fear, “not for the important but less interesting reason that resources are limited, but simply because efforts to redress any set of risks might produce risks of their own.”

Mr. Sunstein’s insight is that there are risks on all sides of a question—doing nothing can be dangerous, but acting might be more dangerous—so the only rational way to judge regulation is to quantify the costs and benefits. If the Food and Drug Administration took a harder line in approving new medicines, it might protect the public from a future thalidomide disaster. But it could also deprive the public of cures for disease or expose it to serious peril, like having no recourse in a pandemic.

Farm Subsidies Plumb New Depths May 21, 2010

Posted by federalist in Diplomacy, Economic Policy, Government Spending, Markets, Special Interests, Uncategorized.
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Commodity farmers are a tenacious special interest, and the federal government seems to have no shame in pandering to them.

The Obama administration would rather subsidize foreign farmers than reduce domestic subsidies that violate our trade agreements:

Rather than reduce the U.S. subsidies to American cotton farmers that are the cause of the trade fight, the Administration is proposing that U.S. taxpayers also compensate Brazilian cotton farmers for the harm done by the U.S. subsidies. Thus the absurd U.S. cotton program would dip into the Commodity Credit Corporation to pay what is a bribe to Brazil so it won’t retaliate.

Are Government and Union Employees Overpaid? May 12, 2010

Posted by federalist in Government Spending, Human Markets, Special Interests, Uncategorized, Unions.
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In a free market the concept of an “overpaid employee” is not a serious concern: If employment contracts are voluntary, and employers pay wages from their own resources, then it is hard to argue that any employee is overpaid, since evidently his employer believes he is worth his cost.

Union and government employees break this link. Unionized government employees seem to be a double-whammy! Updating a trend that has been increasingly evident, Gary Shilling explains:

Years ago, there was an informal “social contract”—public employees generally received lower wages than private-sector workers, and in return they got earlier retirement and generous pensions, allowing them to catch up. That arrangement has long since gone by the boards. The result is a remarkable trend. State and local government employees for years have received pay increases in excess of inflation, and BLS figures show they now have wages that are 34% higher on average than in the private sector.

Of course, unions vociferously deny any such assessments. But I don’t think we need to get into comparative statistical arguments to prove that union employees are overpaid. The labor market itself gives us two simple tests:

  • Do union employees voluntarily quit their jobs at rates significantly lower than similar non-union employees?
  • Are there significantly more qualified applicants for new union jobs than for similar private-sector jobs?

If the answer to either or these questions is yes (and it does appear to be so), then the market has spoken: Union employees are relatively overcompensated. Their excess rents come at the expense of employers, customers, and labor market competitors.

What’s the Justification for the Prompt Global Strike Program? April 27, 2010

Posted by federalist in Government Spending, Open Questions, Uncategorized.
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The White House requested $250MM for research next year into hypersonic engines that could support a “Prompt Global Strike” (PGS) weapon system later this decade. Air Force General Chilton explains the need for PGS as follows:

Today we can present some conventional options to the president to strike a target anywhere on the globe that range from 96 hours to maybe four, five, six hours. If the president wants to act faster than that, the only thing we have that goes faster is a nuclear response.

Now I think hypersonic engines are as cool as the next geek, but PGS is going to consume many billions of dollars to produce a capability that we have had for half a century: Intercontinental ballistic missiles (ICBMs) can reach any point on earth in under an hour. Yes, today they may all be tipped with nuclear warheads. But it would be a lot cheaper to recommission ICBMs with precision conventional warheads than to build a maneuvering hypersonic cruise missile. And the proposed PGS doesn’t solve any of the strategic problems posed by conventional ICBMs: Russia and China are already protesting that PGS is as destabilizing as our strategic nuclear arsenal.

“Seniors Living on Fixed Incomes” March 14, 2010

Posted by federalist in Government Spending, Pensions, Retirement.
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“Senior citizens living on fixed incomes” is a common refrain of the powerful pensioners’ special interest groups, and it seems to never go rebutted. It’s practically the slogan of The Most Selfish Generation: The Baby Boomers who are willing to pile debt upon their children and grandchildren in order to enjoy 30+ years of healthy and unproductive “retirement.”

For the record: None of us working citizens has unlimited income, and unlike retirees we don’t have guaranteed fixed incomes from the federal government in the form of social security, medicare, and (in many cases) government-backed pensions. Nor do we have disposable time that we could devote to earning extra income to make up a shortfall, as do retirees.