20 April 2010

Today’s Tabbloid
PERSONAL NEWS FOR [email protected]

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Georgia’s Tax Reform Package Students Have the Right to Free

Better Than Perdue’s Original Speech, Too [Cato at Liberty]
APR 19, 2010 03:11P.M.
Idea [Americans for Tax
By admin
Reform]
APR 19, 2010 05:09P.M. A northern Texas school district attempted to banish all religious
expression from its schools by prohibiting virtually all non-verbal
It looks as if Georgia taxpayers are finally in the clear. Last week, the student speech in any school-related context. Officials used this broad
House and Senate both passed an amended version of HB 1055, a mixed policy to promote an anti-religious orthodoxy and root out any and all
bag of tax increases and tax cuts that ATR ultimately (... religious speech. The Supreme Court made clear, however, in its seminal
school speech case, Tinker v. Des Moines Independent Community
School District, that students enjoy First Amendment rights, and that
core political and religious speech cannot be suppressed without showing
FISCALLY CONSERVATIVE BLOG FEEDS that the speech will “materially and substantially disrupt” the
educational process.
2+2 = 5: Why Many Tax
Here, the Fifth Circuit upheld all of the district’s regulations and found
Revenue Estimates Are Wrong that Tinker did not supply the relevant legal standard. It instead applied
the intermediate scrutiny “time, place, and manner” test of United States
[Americans for Tax Reform] v. O’Brien. At issue is whether the school district’s speech policy should
APR 19, 2010 03:24P.M. be evaluated under Tinker’s “substantial disruption” standard or under
O’Brien’s intermediate scrutiny.
A revenue calculator is supposed to…calculate revenue, right? Well, the
Marin Institute’s tax revenue calculator accurately considers excise tax Cato, joined by three groups that promote religious liberty, filed a brief
rates, sales tax rates, consumptio... asking the Supreme Court to take up the case because the Fifth Circuit’s
approach permits schools to enforce sweeping speech codes by which
virtually all speech may be prohibited. Permitting a wholesale content-
and viewpoint-neutral ban on all speech or a form of speech as an
alternative to the Tinker standard will result in the erosion and eventual
elimination of student speech rights.

The name of the case is Morgan v. Plano Independent School District;

the Court will likely decide by the end of June whether to hear the case
this fall.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

FISCALLY CONSERVATIVE BLOG FEEDS Libertarians are emerging as a force within U.S. politics.
While political leaders such as Sarah Palin and Mike
Libertarians, Independents, and Huckabee and media stars like Glenn Beck and Rush
Limbaugh are icons to a “conservative base,” it is not yet clear
Tea Parties [Cato at Liberty] what political leaders might represent these libertarian
APR 19, 2010 03:03P.M. voters.

By David Boaz But with candidates working to capitalize on voter angst in

the 2010 midterms, there are sure to be many politicians
David Kirby and I have an op-ed in today’s Politico on libertarians as the angling to lead this libertarian vote.
“leading edge” of the independent vote:
Meanwhile, a new Politico/TargetPoint poll of people who attended the
Who are these centrist, independent-minded voters who April 15 Tea Party in Washington found “two camps” there: “one that’s
swung the elections in Virginia, New Jersey and libertarian-minded and largely indifferent to hot-button values issues
Massachusetts to Republican candidates and are likely to be and another that’s culturally conservative and equally concerned about
crucial in races this fall?… social and fiscal issues.” They also found a difference in intensity: “Asked
to rate their level of anger about 22 issues on a scale of one (not angry at
Libertarians seem to be a leading indicator of this trend in all) to five (extremely angry), the issue that drew the most anger: the
centrist, independent-minded voters, based on an analysis of growing national debt. The least: courts granting same-sex couples the
many years of polling data. We estimate that libertarians right to marry. Twenty-four percent said they’re ‘not at all’ upset about
compose from 14 percent to 23 percent of voters nationally. gay marriage.”
They are among the few real swing voters in U.S. politics.
A recent CBS/New York Times poll found “Tea Party supporters” more
We note that libertarian voters started to swing against the Republicans conservative than Americans in general on gay marriage. We may be
in 2004, before most Republicans did. Then independents swung hard to seeing a difference between people who say they like the Tea Parties and
the Democrats in 2006 and 2008. By 2008, though, libertarian voters those who actually turn out for Tea Party rallies, or possibly Tea Partiers
had apparently recoiled against the prospect of an Obama-Pelosi-Reid in the Washington area are more socially liberal than they are in other
government at a time of financial crisis. By November 2009 and January regions.
2010, a majority of independents had followed the libertarians in turning
against the Democrats’ big-government agenda. We go on to say: In particular, the Politico/TargetPoint poll used some of the
same questions, drawn from the Gallup Poll and other surveys, that
So, if many of these centrist, independent voters are indeed Kirby and I have used to identify libertarians in our “libertarian vote”
libertarians, why aren’t libertarians better recognized? studies. Here’s the analysis from TargetPoint (emphases added):

First, the word “libertarian” is still unfamiliar — even to many IDEOLOGY

who hold “fiscally conservative, socially liberal” views.
Pollsters rarely use it…. The Tea Party is, unsurprisingly, for small-government and
cuts to taxes and spending; but there is a clear split when it
Second, libertarian voters have traditionally been less likely comes to government promotion of moral values.
to organize.
• Overwhelming majorities of 88% and 81% say
In the past three years, however, libertarians have become a government is trying to do too many things best left to
more visible, organized force in politics — particularly as individuals and businesses, and that government
campaigns move online. Ron Paul’s campaign demonstrated should cut taxes and spending, respectively. But in
that libertarians can organize and raise large sums of money terms of values, Tea Party attendees are split right down
on the Internet. the middle. A slim majority of 51% say “Government
should not promote any particular set of values”, versus
Meanwhile, tea party protests showed that libertarian- 46% that say “Government should promote traditional
inspired anger can boil over into spontaneous, nationwide family values in our society.”
rallies. On Sept. 12, 2009, more than 100,000 people
marched on Washington to protest federal spending and the • We can compare these to Gallup data collected in
growth of government — many carrying nerdy, libertarian- September of 2009: nationally, 57% said government
inspired signs such as “I Am John Galt,” referring to the was doing too much (among Republicans it was 80%),
protagonist of Ayn Rand’s “Atlas Shrugged.” while 53% said government should promote traditional
values (among Republicans it was 67%). So the Tea

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

Party is actually more conservative than FISCALLY CONSERVATIVE BLOG FEEDS

national Republicans when it comes to the size
and role of government, but less conservative Is Rep. Luis Gutierrez Pro-
than national Republicans in terms of
government promotion of traditional values. National ID? [Cato at Liberty]
APR 19, 2010 03:01P.M.
• Indeed, combining the responses to some of these
questions is a revealing ideological exercise: 43% of By Jim Harper
attendees said government is doing too much
AND that government should promote There are many interesting facets to this story in the Chicago
traditional values, a distinctly conservative Tribune—among them Rep. Luis Gutierrez’ signal that he might support
view; 42% said government is doing too much having a U.S. national ID.
AND that government should NOT promote any
particular set of values, an ideological view used by “We need to know who’s working in the United States, and we need to
the Cato Institute as an indicator of libertarianism make it easy,” Gutierrez told the paper, referring to the push to create a
(currently 23% of all Americans fit into this category). national ID in immigration reform legislation Congress may consider
this year.
• This split between a libertarian Tea Party and a socially
conservative Tea Party is reinforced when we consider The story also describes how a UPS worker nearly lost her job because
the combination of all three ideological questions we the name she was using—her married name—doesn’t match up with
asked, questions on the size and role of government, the Social Security Administration records. I discussed how electronic
role of traditional values, and the dynamic between employment eligibility verification would plunge Americans into an
taxes and spending. If we count the number of times a identity-bureaucracy morass in my paper, “Franz Kafka’s Solution to
respondent gave the “conservative” answer Illegal Immigration.”
(government should do less, it should promote
traditional values, and cut taxes and spending), 40% of Expect much more Kafkaesque identity bureaucracy—and greater
Tea Party attendees gave the conservative government control of your life—if a national ID is part of immigration
answer all three times, and 42% gave the reform. When you find out that your papers aren’t in order and that
conservative answer only two times. Those that you’ve been denied access to work, housing, financial services, and
gave only two conservative responses were health care, one of the Washington deal-makers you have to thank may
most likely to defect on the role of traditional be Luis Gutierrez.
values.

Anticipating criticisms, let me note that no survey is definitive, and few

survey questions are definitive. It’s possible that some respondents FISCALLY CONSERVATIVE BLOG FEEDS
would say “government should do more to solve our country’s problems”
meaning that it should be cutting waste and reducing the national debt. Florida Would Gain $2.52
And some people might understand “government should promote
traditional values” to mean traditional values like self-reliance, thrift, billion From Offshore Drilling
and standing on your own too feet. But overall, I think these questions
help us to separate broadly libertarian responses from conservatives and [Americans for Tax Reform]
(social-democratic) liberals. And this poll suggests that Tea Partiers are APR 19, 2010 01:40P.M.
not just conservative Republicans. At least some of them are more
libertarian. Politicians trying to appeal to them should keep that in WASHINGTON, D.C. –With Florida facing a predicted $6.0 billion
mind. shortfall and 12.2 percent unemployment, Americans for Tax Reform
continues to urge President Obama, Congress, and state elected of...

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

FISCALLY CONSERVATIVE BLOG FEEDS was amended to effectively build into the legal order for a standard pen
register, which records data about calls or e-mails made and
The Latest ‘Intelligence Gap’ received, language mirroring a legal demand for subscriber records
known as a 2703(d) order in the criminal context. Law enforcement
[Cato at Liberty‘Intelligence routinely uses that combination of a 2703(d) plus a pen register to get
location tracking information for cell phones. But the evidentiary
Gap’] standard for getting a 2703(d) order is (very) slightly higher than the
APR 19, 2010 01:02P.M. standard for a pen register alone, and federal law prohibits the use of a
pen register alone to gather location data. So there might be a question
By Julian Sanchez about whether FISA pen registers alone can be used for cell phone
location tracking purposes.
Stop me if you think you’ve heard this one before. The Washington Post
reports that the National Security Agency has halted domestic collection Alternatively, given that Internet communications aren’t just “metadata”
of some type of communications metadata—the details are predictably and “content” but rather a whole series of layers containing different
fuzzy, though I’ve got a guess—in order to allay the concerns of the secret types of information, there could be a question about just how far down
FISA Court that the NSA’s activity might not be technically permissible “metadata” goes. This might be especially tricky for protocols where
under the Foreign Intelligence Surveillance Act. Naturally, there’s the quite a lot of information about the content of the
requisite quote from the anonymous concerned intel official: communication—which is supposed to require a full probable cause
warrant—can be gleaned from sophisticated analysis of the size and
“This is a basic tool we used to have, and it’s now gone,” said timing of packets in the stream.
one intelligence official familiar with the impasse. “Every day,
every week that goes by, there’s just one more week of These are, of course, blind guesses. What’s disturbing is how much blind
information that we’re not collecting. You sit there and say, guessing the FISA court itself may be doing. The new hiatus, the Post
‘This is unbelievable that we have this gap.’” tells us via an anonymous source, came about when the FISA Court “got
a little bit more of an understanding”of what the NSA was up to. Their
I want to take claims like these with due gravity, but I can’t anymore. enhanced understanding concerns data that NSA has been getting with
Because we’ve heard them again and again over the past decade, and the court’s approval for “several years,” according to the Post. And there
they’ve proven to be bogus every time. We were told that the civil you have the real “intelligence gap” in modern surveillance: We have a
liberties restrictions built into pre-9/11 surveillance law kept the FBI Court going through a pantomime of oversight over thousands of highly
from searching “20th hijacker” Zacarias Moussaoui’s laptop—but a technologically sophisticated interception programs, but it may take a
bipartisan Senate panel found it wasn’t true. We were told limits on few years for them to really understand what they’ve been signing off on.
National Security Letters were FBI delaying agents seeking vital records
in their investigations—but the delay turned out to have been We’ll understand still less about the rationale for any “technical fix” to
manufactured by the FBI itself. Most recently, we were warned that the FISA that Congress might approve, if they deign to go that route. But
FISA Court had somehow imposed a requirement that a warrant be we’ll be reassured that it’s very important, necessary to keep us safe from
obtained in order to intercept purely foreign telephone calls that were the terrorist hordes, and nothing worth bothering our pretty heads
traveling through U.S. wires. Anyone who understood the FISA law about.
realized that this couldn’t possibly be right—and as Justice Department
officials finally admitted under pressure, that wasn’t true either. But this
time there’s a really real for serious “intelligence gap” and we’ll all be
blown up by scary terrorists any minute if it’s not fixed? Pull the other
one.

That said, Republicans are claiming the problem requires a mere

“technical fix” to FISA, so we should at least be able to get a rough sense
of what the issue is, if Congress actually decides to act. Democrats, by
contrast, appear to think NSA can “address the court’s concerns without
resorting to legislation.” The word “resort” here seems depressingly apt:
They’ll ask for a legislative tweak if there’s absolutely no way to
shoehorn what they want to do into the statute through clever lawyering
in an ex parte proceeding in front of a highly deferential court, but it’s a
last resort.

As for what the problem might be, I can think of a couple of possibilities
off the top of my head. A few years back, the FISA pen register provision

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Peterson (Finally) Changes His I think we may have located the

Tune [Cato at Liberty] problem... [Americans for Tax
APR 19, 2010 12:46P.M.
Reform]
By Sallie James APR 19, 2010 11:10A.M.

I’ve written before about Rep. Collin Peterson’s (D, MN) disdain for the You know how we at ATR have been scratching our heads trying to work
World Trade Organization, and its rulings against U.S. farm programs. out why-oh-why, despite all the evidence saying it’s a bad idea, and it
However, in launching his 2012 Farm Bill listening tour, the Brownfield isn’t working, the Administration continues down a path of ...
blog reports that he sees that perhaps some changes might be necessary
after all. And, lo and behold, he cites the WTO rulings as the reason:

One of the key issues [in the 2012 Farm Bill] will be what to FISCALLY CONSERVATIVE BLOG FEEDS
do about the way that cotton farmers are subsidized. The
committee’s chairman, Rep. Collin Peterson, D-Minn., said Washington Rakes in the Money
today that the cotton program will have to be overhauled in
the wake of Brazil’s successful challenge to the subsidies at [Cato at Liberty]
the World Trade Organization. The Obama administration APR 19, 2010 10:45A.M.
agreed to change the program in a deal to avert retaliation
against U.S. exports to Brazil. [link added] By David Boaz

Subsidies for cotton currently mirror those for corn, The Washington Post launches a new weekly today, Capital Business,
soybeans, wheat and other commodities, but there’s no covering business in the Washington area. The cover of the first edition
reason why they have to be the same for each crop in the is striking:
future, said Peterson. “In the past we’ve tried to have a one-
size-fits-all approach, but maybe that’s not the case in the
future. I’m willing to consider that,” he said. “If we don’t
address it, we may be back in the soup again with
potential retaliation issues.” [emphasis mine]

Finally, the penny drops.

FISCALLY CONSERVATIVE BLOG FEEDS

ATR on Flash Report on

Feinstein’s Regulatory Overkill
Bill [Americans for Tax Reform]
APR 19, 2010 12:11P.M. As the cover line exults, “There’s a wave of government money headed
our way — bringing opportunities in health care, green energy,
Taxpayers may have voiced their frustrations over taxation and cybersecurity and education.” Of course, it’s not actually “government
government spending last week, but that is not preventing some money” — it’s money taxed or borrowed from those who produce it in the
lawmakers on Capitol Hill from actively pursuing efforts to grow the 50 states and then sprinkled liberally around the Washington area,
Nanny... which now contains 6 of the 10 richest counties in America.

If the Capital Business cover image had a few more arms, it would look
like the logo for this year’s Cato University, “Confronting Grasping
Government“:

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

specifically for part-time work or part-time positions that

lead to full-time work. Rep. Diane Watson, D-Calif., said she
was concerned that part-time workers might not be treated
fairly or could be excluded from collective bargaining
agreements.

Lawmakers insisted repeatedly that even as the Postal Service

confronts harsh financial realities, the agency must take into
consideration the jobs of postal workers. “I’m hopeful this
committee will find a way to deal with it that preserves the
good faith that the people who serve the U.S. Postal Service
have a right to expect,” said Rep. Dennis Kucinich, D-Ohio.

These members might want to read the Government Accountability

Office’s latest report on the USPS, which called the mail monopoly’s
business model “not viable.” Union labor is part of the problem. The
average postal employee earns $83,000 a year in total compensation and
85 percent of its workforce is covered by collective bargaining
agreements. Labor accounts for 80 percent of the USPS’s cost structure.

FISCALLY CONSERVATIVE BLOG FEEDS The GAO cites the following as reasons why USPS labor costs are so
high:
The Postal Service’s Union
• The USPS covers a higher proportion of employee premiums for
Problem [Cato at Liberty] health care and life insurance than most other federal agencies,
APR 19, 2010 08:35A.M. which is impressive because it’s hard to be more generous than
federal agencies.
By Tad DeHaven
• USPS workers participate in the federal workers’ compensation
Comments from members of the House Oversight and Government program, which generally provides larger benefits than the private
Reform Committee at a recent hearing on the U.S. Postal Service’s woes sector. And instead of retiring when eligible, USPS workers can
indicate they don’t appreciate the USPS’s union problem. Postmaster stay on the “more generous” workers’ compensation rolls.
General John Potter went before the committee to make his case for
restructuring the postal operation, including greater labor flexibility. • Collective bargaining agreements limit the amount of part-time
and contract workers the USPS can use to fit its workload needs,
From GovExec.com: and they limit managers from assigning work to employees outside
of their crafts. The latter explains why you get stuck waiting in line
“You have to find people meaningful work, or no matter how at the post office while other postal employees seemingly oblivious
compassionate you are, you’re not doing them any favors,” to customers’ needs go about doing less important tasks.
said Rep. Darrell Issa, R-Calif., the ranking member of the
House Oversight and Government Reform Committee, • Most postal employees are protected by “no-layoff” provisions, and
criticizing holding rooms where underemployed postal the USPS must let go lower-cost part-time and temporary
workers wait until there are tasks for them to perform. “How employees before it can lay off a full-time worker not covered by a
many billions of dollars would have been saved if you’d no-layoff provision.
aggressively right-sized the force before you came to us and
said you want to go from six days [of mail delivery] to five?” • If the collective bargaining process reaches binding arbitration,
there is no statutory requirement for the USPS’s financial
Congressman Issa should be informed that it is union rules that prevent condition to be considered. This is like making the decision
postal management from laying off underemployed postal workers and whether or not to go fishing, but not taking into consideration the
having to put them in holding rooms. fact that the boat has holes in its bottom.

Issa told Potter during his opening statement that the Postal The fact that Postmaster Potter has to go to Congress to plead for help to
Service has “more or less a third more people than you need,” make business decisions points to a fundamental problem. Government-
but he said it “is not really acceptable” to convert full-time run businesses are necessarily hamstrung by the whims of politicians,
jobs to part-time positions, unless applicants are looking who often only have a vague understanding of economics and business.

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Today’s Tabbloid PERSONAL NEWS FOR [email protected] 20 April 2010

If FedEx or UPS had to get congressional permission to manage its

workforce, both would collapse. As mail volume falls, that’s where the
USPS is headed unless we privatize it and deregulate postal markets.

FISCALLY CONSERVATIVE BLOG FEEDS

Lehman’s Failure Taught Us

Nothing [Cato at Liberty]
APR 19, 2010 08:33A.M.

By Mark A. Calabria

Several commentators have reacted to Senator McConnell’s floor

statement regarding the Dodd bill as a defense of “doing nothing”. And
accordingly argue that such a position would be, in the words of Simon
Johnson, both dangerous and irresponsible. This familiar canard is
based upon the oft repeated assertion that the failure of Lehman proved
that we cannot simply let large financial companies enter bankruptcy.

The simple, but important, fact is that we have no idea what would have
happened had we let AIG and Bear go into bankruptcy proceedings. Nor
do we know what would have happened if Lehman had been saved.
Macroeconomics does not have the luxury of running natural
experiments to determine the impact of a corporate failure. Scholars
have an obligation to accurately reflect the uncertainties in the debate.
Those that assert Lehman proved anything, are being at best
disingenuous, and at worst, dishonest.

Let us, however, put forth a few things we do know:

1. We know none of Lehman’s counterparties failed as a result of

Lehman’s failures. Just as we know none of AIG’’s counterparties
would have failed if they did not get 100 cents on the dollar from
their CDS positions. So where exactly is the proof of contagion?

2. We know we had a nasty housing bubble. We were going to lose

millions of jobs in construction and real estate regardless of what
we did. We knew financial institutions heavily invested in housing
would suffer. How exactly would saving Lehman have prevented
any of that?

The debate over ending bailouts and too-big-to-fail will not progress, we
will not learn a thing, if we let simple, empty assertion pass as fact. Much
of the public remains angry at Washington because those responsible,
such as Bernanke and Geithner, have never laid out a believable or
plausible narrative for the bailouts. It always comes back to “panic.” If
we are ever to hope to return to being a country governed by the rule of
law, rather than the whims of men, then we need a lot more of an
explanation than “panic.”