7 April 2010

Today’s Tabbloid
PERSONAL NEWS FOR [email protected]

FISCALLY CONSERVATIVE BLOG FEEDS

Unions and State Government

Management [Cato at Liberty]
APR 06, 2010 10:38P.M.

By Chris Edwards

State and local governments that have high levels of unionization have a
harder time efficiently managing their finances and other aspects of their
operations. At least, that’s my argument. The other day, I showed that
states with higher levels of debt had higher levels of unionization. The
statistical correlation was very strong.

Today, let’s look at the quality of state management, as measured by a

major report by the Pew Center on the States. The Pew report gave letter
grades to the 50 state governments for management of finances,
employees, infrastructure, and information. Pew also provided an overall
state score. FISCALLY CONSERVATIVE BLOG FEEDS

I’ve converted the Pew overall state government management scores to On Net Neutrality Regulation:
numbers from 1 to 10 and plotted them against state unionization rates
(“10″ is the best management score). The chart below shows that as the Suppose Free Press Called a
share of a state workforce that is unionized grows, the overall quality of
state management falls, as measure by the Pew scores. The chart shows Crisis and Nobody Noticed?…
the raw data in blue dots and the statistically fitted line in pink.
[Cato at Liberty…]
The bottom line: public-sector unionization is not a good idea, as it APR 06, 2010 10:29P.M.
apparently leads to lower-quality government management and to higher
debt levels. As such, I’ve argued that collective bargaining in state and By Jim Harper
local government workforces should be banned.
In the wake of today’s ruling in the D.C. Circuit that the FCC had
(Details: R-square at 0.12 indicates that unionization explains only a exceeded its authority in attempting to regulate access to the Internet, I
small share of management quality, but the F statistic at 6.3 and the t- did a number of radio interviews and a radio debate with Derek Turner
stat on the management variable of -2.5 indicate that the regression is of Free Press, a leading advocate of Internet regulation.
quite strongly statistically significant. Note that the unionization variable
is the union share in state and local governments, but the Pew data The debate was a brief, fair exchange of views. I was struck, though, to
regards only the states. Thus, I’m assuming that my unionization hear Turner refer to the situation as a “crisis.” Sure enough, in a Free
variable is a reasonable proxy for state-level unionization. Thanks for Press release, Turner says three times that the ruling creates a “crisis.”
data help from Amy Mandler )
Recall that in 2007 Comcast degraded the service it provided to a tiny
group of customers using a bandwidth-hogging protocol called
BitTorrent. Recall also that before the FCC acted, Comcast had stopped
doing this, relenting to customer complaints, negative attention in news
stories, and such.

In the wake of the D.C. Circuit ruling and the crisis it has created,

1
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 7 April 2010

Internet users can expect the following changes to their Internet service: first use” policy would have assisted in this endeavor. The Obama
None. administration chose instead to split the difference between
conservatives who favor an expanded role for nuclear weapons and
Wow. With crises like these, who needs tranquility? liberals who anticipate their complete elimination.

“As a result of this decision, the FCC has virtually no power to stop The NPR’s middle ground stance on first use has elicited most of the
Comcast from blocking Web sites,” the release intones. media’s attention, but the role that the U.S. military plays around the
world — a role highlighted by the NPR’s repeated reassurances that our
That would be worrisome, though still not quite a crisis—except that allies and partners will be covered by the U.S. security umbrella —
Comcast would be undercutting its own business by doing that. Did you deserves even greater scrutiny. Two decades after the fall of the Soviet
know also that no federal regulation bars people from burning their Union, the United States continues to carry the burden for security in
furniture in the backyard? That’s the same kind of problem. Europe and East Asia. The costs of this burden are growing, but the NPR
merely sets the stage for the continuation of this worrisome trend.
As Tim Lee points out in his paper, “The Durable Internet,” consumer
pressures are likely in almost all cases to rein in undesirable ISP
practices. Computer scientist Lee presents examples of how ownership
of communications platforms does not imply control. If an ISP persists FISCALLY CONSERVATIVE BLOG FEEDS
in maintaining a harmful practice contrary to consumer demand—and
consumers can’t express their desires by switching to another Arkansas Tax Returns - with
service—we can talk then. The focus should be on increasing competition
by freeing up spectrum and removing regulatory barriers. smiley emotions! [Americans
In the meantime, this “crisis” has me slightly drowsy and eager to go for Tax Reform]
outside and enjoy the spring sunshine. APR 06, 2010 02:05P.M.

The American Principles Project has made a rather ... interesting...

discovery about the Arkansas income tax return form: Look closer: See it
FISCALLY CONSERVATIVE BLOG FEEDS now? The Arkansas income tax return has happy and sa...

Nuclear Posture Review Signals

Business as Usual [Cato at FISCALLY CONSERVATIVE BLOG FEEDS

Liberty] On Tonight’s Kudlow Report

APR 06, 2010 02:51P.M.
[Larry Kudlow’s Money
By Christopher Preble
Politic$]
On balance, the Obama administration’s Nuclear Posture Review (PDF) APR 06, 2010 01:16P.M.
signals more continuity than change. The review wisely clarifies the
limited but essential role that nuclear weapons play in safeguarding U.S.
national security through deterrence. Unfortunately, it fails to set the
stage for dramatic and necessary changes to a bloated and outdated force
structure because it reaffirms the U.S. commitment to other countries
that imposes a huge burden on our military and on U.S. taxpayers.

The document anticipates that conventional weapons — namely a

forward U.S. troop presence and ballistic missile defenses — will take on
a greater share of the deterrence burden as the importance of nuclear
This evening at 7pm ET:
weapons recede. This is a costly proposition at a time when U.S. military
spending is already at a post-World War II high.
WEST VIRGINIA COAL MINE TRAGEDY UPDATE
CNBC chief Washington correspondent John Harwood reports.
Stronger leadership is essential to reining in the entire nuclear weapons
enterprise — the warheads and delivery platforms, as well as the
INSIDE THE FED: LACKER’S ECONOMIC OPTIMISM
laboratories and bureaucracies that support them. A more emphatic “no

2
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 7 April 2010

CNBC senior economics reporter Steve Liesman reports. badly and telling Comcast not to do that again. Today the U.S. Court of
Appeals for the D.C. Circuit concluded that the FCC exceeded its
ARE WE WALKING INTO A BOOM NO ONE SEES? authority and reversed the FCC’s order against Comcast.

- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager The court’s decision marks another turning point in the debate over
- Peter Navarro, “The Coming China Wars” Author; University Of whether the federal government should regulate Internet access services.
California - Irvine Business Professor What’s entertaining about it is that the problem was solved two years ago
by market processes—sophisticated Internet users, a watchdog press,
TAX ATTACK: BRITISH TAX RATE advocacy groups, and interested consumers communicating with one
A 50% tax rate on high earners in UK goes into effect today - America another over the Internet.
beware?
The next step will be for advocates to run to Congress, asking it to give
- Dan Mitchell, CATO Institute Senior Fellow the FCC authority to fix the problems of two years ago. But slow-moving,
- Robert Guest, The Economist Washington Correspondent and technologically unsophisticated bureaucrats do not know better than
Lexington columnist consumers and technologists how to run the Internet. The FCC’s “net
neutrality” hopes are nothing more than public utility regulation for
BAILOUT NATION: UNION PENSIONS broadband. If they get that authority, your online experience will be a
little more like dealing with the water company or the electric company
- Diana Furchtgott-Roth, director of the Center for Employment Policy at and a little less like using the Internet.
the Hudson Institute; former chief economist, Dept of Labor
- Teresa Ghilarducci, The New School for Social Research Economics As I’ve noted before, Tim Lee’s is the definitive paper. The Internet is far
Professor more durable than regulators and advocates imagine. And regulators are
far less capable of neutrally arbitrating what’s in the public interest than
TAX FREEDOM DAY COUNTDOWN most people realize.
- Kail Padgitt, Ph.D , Tax Foundation Staff Economist
The FCC doesn’t have authority to regulate the Internet. Congress and
Please join us. The Kudlow Report. 7pm ET. CNBC. the president shouldn’t give it that authority.

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

The FCC Doesn’t Have What’s a Libertarian? [Cato at

Authority to Regulate the Liberty]
APR 06, 2010 11:53A.M.
Internet–and Shouldn’t [Cato at
By David Boaz
Liberty–and Shouldn’t]
APR 06, 2010 01:04P.M. That’s the question that John Stossel will be asking Thursday night to a
motley collection of guests, including P. J. O’Rourke, Andrew
By Jim Harper Napolitano, Jeffrey Miron, and me. Tune in the Fox Business Network at
8:00 p.m. ET.
In the fall of 2007, word emerged that Comcast had degraded the
Internet traffic of some customers, whose use of a protocol called It repeats many times, as noted here, but you know, it’s like the NCAA
BitTorrent interfered with other Comcast customers’ Internet access. championship: you don’t want to watch the repeat on ESPN Classic, you
want to watch it live with everyone else for the collective experience. So
Comcast handled it badly, and sites like TechLiberationFront covered the be there at 8:00 Thursday.
“Comcast Kerfuffle” extensively. Consumers prefer unfiltered access to
the Internet. Or of course you could just read Libertarianism: A Primer and The
Libertarian Reader.
By springtime, Comcast had sorted things out and made a deal with
BitTorrent to develop a neutral traffic-management protocol.

Four months later, the FCC weighed in, finding that Comcast had acted

3
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 7 April 2010

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Tuesday Links [Cato at Liberty] Scozzafava is Writing a Book

APR 06, 2010 10:51A.M.
[The Club for Growth]
By Chris Moody APR 06, 2010 09:59A.M.

• How to make tax law more fair and efficient. RINO

• Gene Healy: Why terrorism isn’t an existential threat: “It’s worth

remembering that terrorism has always been a weapon of the weak
— and it usually fails” FISCALLY CONSERVATIVE BLOG FEEDS

• Was the Iraq War worth it? Malou Innocent: “Don’t believe the Two Special Elections to Watch
hype. The Iraq war remains a mistake of mammoth proportions.
And Iraq’s election represents a pyrrhic victory, as the economic, [The Club for Growth]
political, and moral costs of the occupation far outweigh any APR 06, 2010 09:40A.M.
benefits.”
The POLITICO and May 22 (HI-01).
• Doug Bandow on the problem with international alliances:
“Washington collects alliances like people collect Facebook friends.
…Contrary to the U.S. government’s current practice, America
needs fewer allies. Washington should no longer act as the world’s FISCALLY CONSERVATIVE BLOG FEEDS
9-1-1 number.”
Congress Is Hurdle to USPS
• Podcast: “Forestalling Foreclosures Redux” featuring Mark A.
Calabria. Reforms [Cato at Liberty]
APR 06, 2010 08:39A.M.

By Tad DeHaven
FISCALLY CONSERVATIVE BLOG FEEDS
National Journal reports that two key policymakers don’t support the
And Now a Word From Larry U.S. Postal Service’s desire to eliminate Saturday mail delivery. House
Financial Services Appropriations Subcommittee Chairman Jose Serrano
Kudlow [The Club for Growth] (D-NY) says he’ll be working with USPS management and the postal
APR 06, 2010 10:22A.M. unions to avoid service cuts. And House Oversight and Government
Reform Federal Workforce Subcommittee ranking member Jason
Larry offers up some cautionary advice about the latest jobs number. s Chaffetz (R-UT) announced that he too opposes the move.
my point? Credibility. Conservative credibility.
Chaffetz intends to introduce legislation that would instead eliminate
twelve delivery days a year. Twelve days? With the USPS facing $238
billion in losses over the next ten years, it’s hard to understand why the
Republican congressman is fiddling around with such small changes.

From the article:

Chaffetz said he is concerned that if the Postal Service cuts

Saturday deliveries, it could end up hurting itself in the long
run by creating an opening for private delivery companies.
“You have got to serve your customers, or somebody else will
come in and do it for you,” he said.

What private delivery companies? UPS and FedEx are allowed to

compete with the USPS on express mail delivery, but the USPS has a
government-granted monopoly on regular mail. In pointing out that the

4
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 7 April 2010

USPS’s reduction in services isn’t good for customers, Chaffetz FISCALLY CONSERVATIVE BLOG FEEDS
unintentionally make the cases for opening up the mails to competition
from private providers. Play Ball! But Not With
“The challenge for the Postal Service is to become more Taxpayer Money [Cato at
relevant to people’s lives,” he said. “They have been cutting
back … and I applaud them for that. The Postal Service is also Liberty]
one of the few things highlighted in U.S. Constitution. APR 06, 2010 08:35A.M.
They’ve got to figure out ways to cut and make it more
relevant.” By Ilya Shapiro

Mr. Chaffetz: The Constitution gives the federal government the power As we enjoy the opening week of the new baseball season, we should
“to establish Post Offices and post Roads.” It doesn’t say the government reflect on the dastardly organization that spends too much money and
has to have a monopoly over the provision of mail. Nor does it say that raises the price of baseball for everyone.
Congress must perform this service. Today, there are better private
options. No, it’s not the New York Yankees: it’s the United States government.

The reality is that the USPS is bleeding red ink because it is becoming You see, as discussed in this recent New York Times op-ed, the price of
less relevant to people’s lives because of electronic communication. baseball has increased all across the Major Leagues because of the tax
Surely Rep. Chaffetz doesn’t want the government’s mail monopolist write-off (read: subsidy) that businesses get to treat clients and
involved in electronic correspondence to make it more “relevant”? employees to ball games:

A story out of Finland demonstrates why that would be a bad idea. There are many reasons for the price explosion, but a critical
Finland’s state-owned postal service is testing a cost-cutting idea that factor has been the ability of businesses to write off tickets as
would have it open mail, scan it, and then send an electronic copy to a entertainment expenses — essentially a huge, and wholly
digital mailbox. The original mail would then be sealed up and physically unnecessary, government subsidy.
delivered, but delivery would only be done twice a week. Fins are rightly
concerned about their civil liberties being violated by the government These deductions have led to higher ticket prices in two ways.
viewing their private correspondence. On the demand side, they have fueled competition for scarce
seats, with business taxpayers bidding in part with dollars
The underlying idea behind the Finnish experiment is nonetheless they save through the deductions.
sound. In a competitive market for mail delivery, electronic scanning and
transmittal would be a more cost-effective — and thus perhaps profitable While baseball parks built in the 1960s and before held as
— way of getting people their mail. This could be especially appealing for many as 56,000 seats, the modern trend is toward smaller-
costly-to-deliver rural areas, which proponents of the USPS often cite as capacity parks, with a higher percentage of total space
a reason why mail privatization is untenable. dedicated to skyboxes. The new Yankee Stadium, the only
major-league park built since 2000 with more than 44,000
seats, has 3,000 fewer seats than its 1923 predecessor but
almost three times as many skybox suites.

Of course, libertarians support low general taxes for a variety of reasons,

but targeted tax breaks for luxury items pad the pockets of billionaire
sports team owners, give a discount to companies showing off their
“generosity” to clients, and generally distort the economy, all at a cost to
taxpayers (including those who aren’t even baseball fans).

Boo! America’s national pastime of baseball should not be corrupted by

national and state governments’ parochial pastime of corporate welfare.

For more in-depth analysis on the business of sports, read anything by

Andrew Zimbalist or Home Team by my former professor Michael
Danielson. (Danielson taught a great class on the political economy of
sports; my classmates who thought it would be a gut were in for a rude
awakening.)

5
Today’s Tabbloid PERSONAL NEWS FOR [email protected] 7 April 2010

H/T: Above the Law