<img src="http://www.anchorrising.com/images/anchorrising.jpg" border="0" vspace="0" hspace="0">

The Substance of the UAE Port Deal Uproar

Carroll Andrew Morse

I am trying to keep an open mind, but I find the Bush administration�s defense of allowing a state run enterprise of the United Arab Emirates (Dubai Ports World), to purchase control of operations of six major American ports to be deeply unsatisfying. The emerging conventional wisdom -- the deal is acceptable on substance, but has been mismanaged politically -- is too forgiving towards the administration, excusing a lack of strategic vision that extends beyond politics.

Contrast the administration's handling of the Dubai Ports World deal, which impacts physical objects that cross the border, with its handling of electronic communications that cross the border. Several months ago, the public learned that the Bush administration had established a National Security Agency program for monitoring international telephone traffic. The administration justified this program because the country was at war, developing a doctrine of heightened Presidential power -- based on heightened Presidential responsibility -- created by the nexus of the President's Constitutional power and the Congressional Authorization to Use Military Force.

Yet when it came to the port deal, the idea of heightened executive power and heightened executive responsibility in this time of war suddenly vanished. Incongruously, the public learned that less scrutiny than usual had been applied to the official evaluation of the Dubai Ports World sale. The Associated Press describes a few provisions, usually standard, that were waived in this specific case...

In approving the purchase, the administration chose not to require Dubai Ports to keep copies of its business records on U.S. soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate requests by the government.

Outside legal experts said such obligations are routinely attached to U.S. approvals of foreign sales in other industries.

The administration tried to assure Americans that this was not a problem. The government of the United Arab Emirates had signed the proper, formal anti-terrorist paperwork and the current leadership of the UAE was an ally. The President tried making the case that having a UAE-based company running American ports was not any different from having a UK-based company running American ports�

Bush said he was struck by the fact that people were not concerned about port security when a British company was running the port operation, but they felt differently about an Arab company at the helm. He said the United Arab Emirates was a valuable partner in the war in terror.

It has all reeked of a pre-September 11 approach to foreign affairs. The key assumption of America�s post-Cold War but pre-September 11 foreign policy was that the domestic nature of other countries didn't matter, so long as our leaders got along with their leaders and their commercial elites made good business partners. Part of the everything that changed on September 11, many of us thought, was that the US had learned the limits of such a stark foreign policy. Economic and commercial ties, by themselves, could not be trusted to promote an international environment that enchanced American security.

The fact that business isn't everything in foreign policy doesn't mean that the port deal should be disallowed. It does mean that the President has to explain how this business deal squares with the ideals-based foreign policy framework he has sought to establish. It will be fatal to his program if the President is viewed as someone who preaches democracy to his domestic audience, but talks about "just business" when dealing with foreign elites.

The President must explain how this is more than just a good deal with the UAE at this specific moment. He must make the case that this is part of a larger program where, ultimately, the US expects to have a much greater effect on the UAE than the UAE will have on the US. And if such a statement cannot be made because of fears that it would kill the deal, then the Bush administration has to ask itself what the UAE's long term interest in this venture really is.

7:32 AM | Comments (14)

February 23, 2006

Race

Being Out of Line... as a General Practice

Justin Katz

One is almost tempted to decry insensitivity on Governor Carcieri's part, for making veiled references to the intelligence of his detractors:

I have made it clear to Steve that, as government officials, we should always avoid using sarcastic language that may be subject to misinterpretation.

But then one realizes that surely the governor understands that, more often than not, it hasn't been an inability to understand Steve Kass's recently controversial comments, but an unwillingness to understand them. If that's the case, perhaps we should be decrying the governor's own unwillingness to call the race baiters on their tricks.

Although, one can hardly blame him for a lack of forthrightness when responding to the dishonest flames of others. After all, David Quiroa — a Newport GOP "leader" — played loose with reckless absolutes (which I've bolded) in his public comment about Carcieri's budget-cut-related plan to end free healthcare for illegal immigrants:

It's quite clear that Governor Carcieri has absolutely no regard for the well-being of all children. ... It's truly sad to have a Governor who is insensitive to all minorities.

And of course, it was Quiroa who introduced the specter of plantations (which is apparently how he would characterize the 47 states that do not pay for illegals' healthcare).

Not being a lawyer, I can only question whether such statements — plainly offered as unsubstantiated fact — are worthy of a defamation lawsuit. Probably not. Presumably Quiroa has had occasion to research the matter previously, considering that this is not his first careless and offensive contribution to the social evil of racial divisiveness:

He said the raid on the Narragansetts had brought to memory the beatings and killings of Indians by the Guatemalan military in his country during the civil war in the '70s and '80s.

According to Gordon Duke, in a June 9, 2005, letter to the Cranston Herald, Quiroa also played a role in an illegal immigrant funding "shakedown" of Cranston City Council member Aram Garabedian, which culminated in a church-basement meeting that:

... was actually a pro-Laffey, anti-Garabedian fiasco. Juan Garcia opened the meeting in Spanish, praising Mayor Laffey, as though the mayor walks on water, and denounced Aram Garabedian as though he was �Satan� himself. Following the praised remarks were the home video of Mayor Laffey�s trip to the Mexico-U.S. border � an attempt to incite the emotions of the 100-person audience.

In a column in which he introduces Quiroa as a native Guatemalan who "works for Cranston's senior services agency [and] hopes to draw Republican primary support for Laffey among Latinos," Charles Bakst asked Commerce Secretary Carlos Gutierrez "what the Republican message is to" Rhode Island Latinos. What it ought to be is that the RIGOP will never require them to sublimate their intelligence to identity politics — that they will be treated as autonomous individuals who can be trusted, because they are equally citizens (when applicable) and equally human (always), to seek honest and fair communication in the midst of misunderstanding.

The sad realization, though, is that there just may be too many people who are happy with our society's pathological handling of race. Too many individuals who like to be the object of handouts and pandering. Too many groups — understandably self-conscious in the larger society — who like excuses to band together. Too many minority "leaders" who like seeing their names in the news. Too many politicians who like having issues that generate predictable and easily manipulable responses.

Such is the dynamic that ultimately squeezes murder out of political opposition and global conflagrations, replete with fatalities, out of political cartoons.

10:53 PM | Comments (21)

Hypocrisy

Jonah Goldberg offers these words on the destruction of the Askariya mosque, a sacred Shiite mosque in Iraq:

But where are the protests in London and Denmark and Pakistan (other than the anti-American ones) denouncing the destruction of the shrine in Iraq? You judge people by what they do. Is blowing up Mosques and Holy Shrines not as offensive to mainstream Muslims as doodling cartoons in Denmark? No? Prove it.

10:07 AM | Comments (5)

Civil Liberties

Who Speaks for Free Speech in New England?

Carroll Andrew Morse

In a Washington Post op-ed, William Bennett and Alan Dershowitz (yes, you read that pairing right) state an obvious but important point about the response of Western media elites to the Dutch cartoons depicting the image of Mohammed that have sparked riots in the Europe, the Middle East, and Africa�

So far as we can tell, a new, twin policy from the mainstream media has been promulgated: (a) If a group is strong enough in its reaction to a story or caricature, the press will refrain from printing that story or caricature, and (b) if the group is pandered to by the mainstream media, the media then will go through elaborate contortions and defenses to justify its abdication of duty. At bottom, this is an unacceptable form of not-so-benign bigotry, representing a higher expectation from Christians and Jews than from Muslims.

The authors single out the Boston Globe for its selective defense of the practice of self-censorship�

The Boston Globe, speaking for many other outlets, editorialized: "[N]ewspapers ought to refrain from publishing offensive caricatures of Mohammed in the name of the ultimate Enlightenment value: tolerance."

But as for caricatures depicting Jews in the most medievally horrific stereotypes, or Christians as fanatics on any given issue, the mainstream press seems to hold no such value. And in the matter of disclosing classified information in wartime, the press competes for the scoop when it believes the public interest warrants it.

Rhode Islanders can take pride in the fact that their state's major daily, the Providence Journal, is not a media outlet whom the Globe spoke for. Here is an excerpt from the Projo February 5 editorial on the cartoon controversy�

Well, we dislike disparagement of religious figures, too. Still, in fervently supporting the right to free expression, we do so even when it offends people, including us�

The West's values of freedom of speech and tolerance clash with the totalitarianism of Islamists. In the West, ideas are put to the test of debate; Islamic fundamentalists condemn speech they don't like, and seek to tightly control thought. Unwilling to brook dissent, they see no hypocrisy in raging against insults to Muslims while applauding cartoons that vilify Jews or Christians, of which there are many in the press of Islamic countries.

The West must not cower before such extremists. We must continue to respect and defend the rights of the individual. This is a culture war worth fighting.

9:02 AM

The Pokanoket Tribe is Anti-Gaming

Carroll Andrew Morse

White Eagle Deer, the President and spokesman of the Pokanoket Tribe of the Wampanoag Nation, has contacted me to inform me that, contrary to my earlier speculation, the official stance of the Pokanoket Tribe is one of opposition to gaming, and that House bill 7326, which would grant the tribe state recognition, is not related to any effort to build a casino in Rhode Island�

I am happy to confirm that the Pokanoket Tribe is Anti-Gaming.

There is confusion at times as to who is who but the bill H7236, JOINT RESOLUTION GIVING STATE RECOGNITION FOR THE POKANOKET TRIBE OF THE WAMPANOAG NATION, Introduced By: Representatives Gallison, Anguilla, Malik, Pacheco, and San Bento is ours. We have a long standing relationship with our local communities and have always stated this position on gaming openly.

8:19 AM

February 22, 2006

Discussing the Laffey Plan to Remedy High Drug Costs, Part 2

Carroll Andrew Morse

The next two problem/solution pairs proposed in Steve Laffey's plan to remedy high drug costs concern different aspects of the problem of regulation. (The first two problem/solution pairs are discussed here) .

1. The first issue is the relationship between the pharmaceutical industry and the Food and Drug Administration...

Today's Problem: FDA regulates drugs foremost on financial interest--not consumer safety (i.e. Vioxx)
Laffey's Solution: Eliminate fees for FDA approval and ban experts with financial ties on drug advisory committees.

In 1992, the Federal Government implemented a "user fee" system where drug companies pay the government to help provide the resources needed for drug testing.

The problem with a user fee system is not conscious corruption. The problem is the nature of government bureaucracy and its incentive structure. In the private sector, success is measured in terms of a profit. In government, where there is no profit, we foolish humans still need some way to score our successes and failures. In public bureaucracy, management often measures its success in terms of its ability to increase its budget allocation. (An article in the Spring 2002 issue of the Cato Institute journal Regulation, mostly supportive of the user-fee system, agrees with this principle).

Once user-fees are built into the system, pressure inevitably builds on the government to push as many drugs through the testing process as possible in order to collect as much fee money as possible. It is certainly plausible that the 1.56% increase in drug recalls between 1993-1996 and the 5.35% increase in drug recalls between 1997-2001 reported by the Journal of the American Medical Association (via the Christian Science Monitor) is related, in part, to the bureaucracy's tendency to act, not evilly, but shortsightedly, thus warranting some re-examination of the practice of user-fees.

2. A second reform proposal focuses on the issue of patent law...

Today's Problem: Generic drugs are priced 20%-80% below brand names drugs, but comprise on 10% of total drug sales.
Laffey's Solution: Increase generic drug distribution by closing drug loopholes, ending anti-competitive payoffs and adjusting effective patent life.

A patent is supposed to be a deal that benefits both innovators and the public. An innovator gets rewarded for his work by having and exclusive period to market and/or license his product. In return for granting a period of exclusivity, the public learns the details of the innovation and, after the patent expires, is allowed to build upon those innovations.

Unfortunately, patent law's current structure and enforcement is not consistent with its purpose. As soon as the generic drug maker notifies the Food and Drug administration that it is preparing to produce a generic version of drug about to enter the public domain, the brand name manufacturer can sue for a 30-month extension. In that period (and because of the sorry state of patent scrutiny in this country) they can attempt repatenting their original product, triggering other delays. Here's an example from reporting from PBS' Newshour with Jim Leherer showing how current law allows frivolous patents to stifle the purpose of the patent process...

What brand name manufacturers have done in some instances is go back and file new patents on those same drugs, some of them frivolous patents. In one instance, for example, a company suddenly went back and decided to patent the brown bottle that the cancer drug came in, because it said this brown bottle will preserve the potency of this drug. So it filed that patent anew. That triggered another 30-month stay.

Other provisions in patent law encourage generic drug producers to sue brand-name producers in an attempt to shorten the lives of patents. A provision in the law allowing a generic drug producer an 180-day period of exclusivity after winning a patent-shortening suit caused an explosion in litigation starting in the 1980s. Robert Goldberg, Director of the Manhattan Institute Center for Medical Progress, explains the effect that this has had...

During the 1980s only two percent of generic drugs tried to cut patent life short as a way to approval. Today over 20 percent of all generic drugs now enter the market through legal attacks on patent life. And generic firms are attacking as soon as a drug hits the market -- with multiple challenges of the same patent in many cases. No wonder generic companies such as Barr Labs make most of their money not from selling medicines but from suing drug companies and settling cases.

The Laffey plan would address these problems by simplifying patent law. Drug companies would not get an automatic 30-month extension on their patents. And to make sure that the get fully rewarded for their innovation, Mayor Laffey suggests reforming the law so that the clock on pharmaceutical patent doesn't start until the drug actually hits the market.

Clearer and simpler patent law would have a positive effect of creating a stable, non-litigious playing field for the production of both brand name and generic drugs.

7:51 PM | Comments (15)

Port Debate Update

Carroll Andrew Morse

1. Writing in National Review Online, Mansoor Ijaz provides some recent facts consistent with Marc�s experience that the United Arab Emirates are in the top tier of the world�s port-operators�

As Jim Robbins noted Tuesday, in December 2004, Dubai was the first Middle East government to accept the U.S. Container Security Initiative as policy to screen all containers for security hazards before heading to America. In May 2005, Dubai signed an agreement with the U.S. Department of Energy to prevent nuclear materials from passing through its ports. It also installed radiation-detecting equipment � evidence of a commitment to invest in technology. In October 2005, the UAE Central Bank directed banks and financial institutions in the country to tighten their internal systems and controls in their fight against money laundering and terrorist financing.

2. Writing in National Review Online�s Corner, Cliff May, another hard-nosed security hawk ala Frank Gaffney, would like to learn a bit more about the deal, but doesn�t see an obvious red flag�

While it can�t hurt to study this deal a little more thoroughly (which would be a face-saving measure for all concerned), it is not obvious that national security will be compromised by giving the UAE a green light,

�but also reminds people that there are increased vulnerabilities inherent in having a foreign country manage your ports�

Suppose a British firm manages the ports�And one day he gets a phone call telling him there are certain documents he will deliver to a specific location or his wife and children back in Devon will be toast. You think that wouldn�t pose a security risk?

3. James Lileks sums up my visceral feelings, as well as, I suspect, the visceral feelings of many others on this issue pretty well�

The average American�s reaction to handing port control over to the UAE is instinctively negative, and for good reason. There are two basic reactions: We can�t do this ourselves? and We should trust them, why?�

Wanting port control to remain in American hands is not a matter of Arabiaphobia, any more than selling Boeing to China means you harbor deep hatred of Asians. Some things ought to be left in local hands. It seems absurd to have to make that argument in the first place. The UAE is not exactly stuffed stem to stern with pro-American individuals; the idea that the emirs will stand foursquare against infiltration by those who have ulterior motives is the sort of wishful thinking that makes buildings fall and cities empty. I�m not worried that some evil emir is putting a pinky to his monocled eye, and saying Mwah! at last I have them where I want them! I�m worried about the guy who�s three steps down the management branch handing off a job to a brother who trusts some guys who have some sympathies with some guys who hang around some rather energetic fellows who attend that one mosque where the guy talks about jihad 24/7, and somehow someone gets a job somewhere that makes it easier for something to happen.

UPDATE:

Also writing in National Review Online, Frank Gaffney stands by his original position.

3:39 PM | Comments (4)

Discussing the Laffey Plan to Remedy High Drug Costs, Part 1

Carroll Andrew Morse

The most difficult part of Steve Laffey's campaign platform for the traditional Republican base to swallow (so to speak) has been his promise to "fight the big drug companies". On Monday, Mayor Laffey laid out in detail his plan to remedy high drug costs. (Katherine Gregg and Jim Baron both provide good tastes of the overall flavor of the presentation in their reporting in the Projo and the Pawtucket Times, respectively).

Mayor Laffey summarizes his program in terms of six problems with six solutions. The first two problem/solution pairs are based on the assumption that pharmaceutical industry advertising creates an "artificial" demand that keeps drug prices high...

Today's Problem: Direct-to-Consumer advertising can inflate the need for brand name drugs and lead to inappropriate prescribing.
Laffey's Solution: Re-instate pre-1997 FDA disclosure requirements (for full-disclosure of ALL side effects).

Today's Problem: Drug companies are spending more dollars on "Me-too" drugs that don't improve America's health.
Laffey's Solution: Require new brand name drugs to be superior than current drugs (or no patent!)

Here are some general concerns about this set of solutions.

1. Certainly advertising is influential (after enough TV-ads, people will actually consider voting for Matt Brown for the Senate!) but prescription drugs, by being "prescription", are already supposed to involve a layer of protection between advertiser and consumer. They can only be sold after being prescribed by a doctor. In theory, doctors' judgements shouldn't be swayed by slick advertising campaigns.

If there is a problem with advertiser created demand, doesn't a large measure of the problem have to reside with the doctors who are writing the prescriptions? Also, if advertising is this powerful (and profitable), then why haven't generic drug makers developed their own advertising campaigns announcing that their drugs are just as good as brand name drugs to increase the demand for generic products?

2. The focus on "me-too" drugs -- drugs that have a different enough chemical composition to get their own patent, but serve the same function as a previous drug (the less perjorative term used to describe them is "follow-on" drugs) -- raises some specific concerns. The argument against follow-ons is that they inflate drug prices by discouraging people from purchasing cheaper generic drugs after the latest-greatest brand names hit the market.

Not everyone, however, agrees that follow-ons, because they have the same function as their parents, are all bad. The first argument for follow-ons is that they are necessary for providing treatment to patients who cannot use the orginal due to allergies or side-effects. (John Calfee of the American Enterprise Institute makes this argument). The second argument is good, solid economics. In theory, follow-ons ultimately drive prices down by making negotiation with drug companies possible by increasing the supply of drug options available for treating a particular problem. Too much regulation against follow-ons would restrict supply of available treatments, ultimately driving prices up. (Malcom Gladwell argues this position in the October 25, 2004 issue of the New Yorker).

Have all of the possible consequences of increasing the regulatory burden on developing follow-on drugs been given their due diligence?

Up Next: Some very sensible suggestions in the Laffey Plan on FDA & Patent Reform...

9:02 AM | Comments (2)

February 21, 2006

Education

Tom Coyne's Very Specific Education Reform Proposals

Carroll Andrew Morse

In a Projo letter to the editor, Robert Walsh, executive director of the National Education Association in Rhode Island, criticized a Tom Coyne op-ed on education in Rhode Island for not offering solutions...

Tom Coyne ("Answer in Rhode Island is not more spending," Commentary, Feb. 12) made numerous assumptions about my views on education spending, entitlement programs, and taxation in Rhode Island, and then proceeded to argue against those assumptions. He offers many criticisms, and few solutions, to the challenges facing Rhode Island.

At the RI Policy Analysis website, Coyne has responded with a specific set of proposals...

Start by saving money through the use of a single state health insurance plan for teachers and putting RIPTA in charge of scheduling out of district transportation.
Use these funds for (a) more in-class room materials; (b) merit pay for the best teachers; and (c) shoring up the teachers crumbling pension system.
Institute a common state teachers contract with a longer school year and longer school day.
Restore management rights to school principals so they can pursue innovations that are appropriate for the students they serve.
Reform our current system for classifying children as "learning disabled" as recommended in the late Rep. Paul Sherlock�s report to the General Assembly.
Make it easier for experienced mid-career people to teach in areas where they are needed, like math and science.
Lift the ban on charter schools.
Strengthen Rhode Island�s academic standards, and require that students demonstrate proficiency as a graduation requirement.

9:15 PM | Comments (17)

RE: I�m with Hillary Clinton on This One�

Marc Comtois

Perhaps it's my maritime background--one in which I've seen the near complete disappearance of a genuine U.S. maritime industry--, or perhaps its the fact that I've been to the UAE and seen that the U.S. Navy sees fit to rely on its safe and reliable port (as well as one in Bahrain) as a base for operations in the Persian Gulf, but I'm neither surprised nor quite so ready to be upset (at least yet) over this deal. James Carafano represents my wait-and-see approach:

Foreign companies already own most of the maritime infrastructure that sustains American trade � the ships, the containers, the material-handling equipment, and the facilities being sold to the Dubai company. It's a little late now to start worrying about outsourcing seaborne trade, but congressional hearings could serve to clear the air.

Sure security is important. That�s why after 9/11, America led the effort to establish the International Ship and Port Security code that every country that trades with and operates in the United States has to comply with. And compliance isn�t optional�it is checked by the U.S. Coast Guard. And the security screening for the ships, people, and cargo that comes into the United States is not done by the owners of the ships and the ports, but by the Coast Guard and Customs and Border Protection, both parts of the Homeland Security department. Likewise overall security for the port is coordinated by the captain of the port, a Coast Guard officer.

What happens when one foreign-owned company sells a U.S. port service to another foreign-owned company. Not much. Virtually all the company employees at the ports are U.S. citizens. The Dubai firm is a holding company that will likely play no role in managing the U.S. facilities. Likewise, the company is owned by the government, a government that is an ally of the United States and recognizes that al Qaeda is as much a threat to them as it is to us. They are spending billions to buy these facilities because they think it�s a crackerjack investment that will keep making money for them long after the oil runs out. The odds that they have any interest in seeing their facilities become a gateway for terrorist into the United States are slim. But in the interest of national security, we will be best served by getting all the facts on the table.

1:45 PM | Comments (11)

Recentering Conservatism Around Virtue

Marc Comtois

I've mentioned the "Crunchy Con" idea before, and now it's chief proponent--Rod Dreher--has a book out on it and NRO is hosting a forum in which various conservatives will discuss and debate the book. I suspect that many will focus on the seeming incongruity (or stereotype-defying) idea of granola-eating, eco-conscious, art-loving conservatives, but the main focus should be on Dreher's central thesis, which he summarizes:

Crunchy Cons main premise is that something has gone wrong with the conservative movement in this country. We have become too fixated on materialism and consumerism, at the expense of the family and, in turn, the moral character of society. As E. F. Schumacher said, "the essence of civilization is not in a multiplication of wants but in the purification of human character." The book calls for a reinterpretation of and return to the kind of traditionalist conservatism espoused by Russell Kirk and others, a conservatism that put culture and cultural renewal � as distinct from economics � at the heart of the conservative mission.

Dreher's thesis exposes a tension between "traditional" conservatives and "libertarian" conservatives. Touchstone's David Mills further highlights the difference:

...a traditionalist conservative or any other Christian might not think some version of libertarian economics superior to the alternatives. But he doesn't begin with a primary allegiance to "freedom" � an infinitely elastic idea � rather than virtue as a social good. He begins with virtue and all it represents and makes his economic decisions by its principles and on most matters, on which traditionalist principle does not direct one to any particular policy, prudentially. He might well advocate what the libertarian would consider "statist restraint."

It will be interesting to track the forthcoming debate. (By the way, Justin saw this one coming about a year ago).

12:30 PM | Comments (2)

Education

Gary S. Ezovski: Better schools -- Tie teacher pay to family income

Gary Ezovski, Chairman of the North Smithfield School Committee, offers these thoughts in a recent ProJo editorial:

I can comfortably say that I have yet to hear a suggestion that will solve the schools-budget challenge in our community or throughout the state...
The business of education is nearly 80-percent labor. Payroll and benefits are where we need to make a difference. The real issue is that our cost of labor is among America's highest, and not one suggestion has been made to take that issue by the horns. We must take control of the single largest cost in education.

Let's do what the Education Partnership has talked about and change the balance away from union control to what serves the interests of students. Let's tackle three critical areas of salary and benefits on a statewide basis.

Most commonly, between 40 and 70 percent of teachers in each district are at their contract's top step. The total cost of salary for top-step teachers statewide may be our single largest payment in education. Beyond that, these salaries are the driver for all others in the system, since they are the metric to which the others move.

For anyone who has been involved in a Rhode Island teacher-contract negotiation, it is plain that the negotiations constantly surround how the negotiating district compares with all other districts in the state.

Why did Coventry set the top-step target for so many years? Whatever the reason, the paradigm must change. How do we do that? Waiting for 36 school districts to do it is not sensible.

Rhode Island has the ability to act as if it already were one school district. Legislative action is needed to limit top-step teacher compensation.

That can be done by connecting top-step pay with average Rhode Island family income and state aid to education. If a community's top-step teacher salary exceeds, say, 1.3 times the Rhode Island average family income of a baseline year, then the district's distribution of aid for education should be reduced by the same percentage of the excess.

At the same time, we must immediately freeze and ultimately set a timeline to eliminate lanes -- extra pay for teachers' levels of education -- and longevity payments as a means of hidden supplements.

Two other issues that are a constant source of challenge in contract negotiations for all municipal employees (teachers, fire, police, DPW, and city hall) are health care and sick time. Each of these must be streamlined to a single statewide program. We must stop purchasing health care as a result of what might be as many as 200 different collective-bargaining negotiations programs in our 39 cities and towns. Our small state can establish one program to establish fairness for employees and affordability for taxpayers.

The program established very recently for the Cranston Teamsters unit should be studied as a model to follow. Even the retirement provisions should be equalized. Should one community grant health care for life while another provides nothing? Wouldn't one statewide program streamline the local negotiations process and create cost-efficiency for all taxpayers? Should a community that displays self-control have to pay the bill for waste in those that spend gratuitously?

Sick time also requires a single solution to stop senseless disparity between groups within the same town and around the state. We need legislative action to create a sensible program for all municipal employees that allows no more than six to eight days per year, coupled with mandatory employee participation in temporary-disability insurance (TDI), plus an employer-provided long-term-disability insurance product.

Beyond creating uniformity, such a program could increase attendance, decrease use of substitutes (which will improve student achievement), and eliminate career-end golden parachutes, while also creating a respectable benefit for employees that includes reasonable short-term coverage and valuable disaster protection. Wouldn't that be better for employees and the taxpayers?

In short, I believe that we can create reasonable controls and guidelines for our 39 cities and towns and our 36 school districts without a statewide contract or a statewide school district. With good controls, we can keep government close to its people, prevent waste in gluttonous districts, and sustain the resources for redistribution of our current dollars to districts that can use them efficiently to improve student achievement.

If you have suggestions to fine-tune or expand on these ideas, please send them to me, at gezovski@lincolnenv.com, to your state senators and representatives, by logging on to www.rilin.state.ri.us, or to Governor Carcieri, at rigov@gov.state.ri.us.

A very thoughtful editorial, indeed. Let our elected officials hear from you.

For more information on public education issues here in Rhode Island, check out the various writings at the bottom of this posting.

9:31 AM

Is it fair to freeze property taxes only for senior citizens?

One of the local East Greenwich newspapers published an article last week about a proposed property tax freeze for seniors. The other local paper carried the story here and the ProJo story is here.

The real story is that property taxes are too high in Rhode Island and nobody is talking about changing the underlying drivers which result in a tax burden that hurts all working families and retirees. With that in mind, here is a expanded version of an email I sent over the weekend to the East Greenwich Town Council:

I want to thank the East Greenwich Town Council for the fiscally prudent manner in which they have been managing the use of our hard-earned tax dollars.
The purpose of this letter is to address the current proposal to assist our seniors via a property tax freeze.

Seniors are an integral part of our community in many ways, including a link to our heritage. None of us wants them to be forced out of their homes. I agree that rising property taxes, together with rising energy and medical expenses, can create a genuine financial burden.

I was disappointed that the news stories about such a freeze did not focus any of the angst on the underlying cause of property tax increases at rates greater than the income growth rates of our seniors: the expensive terms of our union contracts, especially the teachers' union contract which is such a large percentage of the total town budget.

If you stop and think about how this problem arose, things are out of whack. The NEA union put a stranglehold on our School Committee and, with work-to-rule, used our kids as pawns to extort outrageous contract terms: 9-13% annual salary increases for job steps 1-9, only 4-6% health insurance premium co-payments or $5,000 annual cash payments for not using the school's health insurance program, and rich pension benefits. Unfortunately, I don't recall seniors mobilizing over the terms of that contract when it could still be affected for the better. Instead, they now show up at Town Council meetings and ask for relief from something over which the Town Council has no direct control. Our seniors � and the entire community � passed up an opportunity to make a real difference earlier.

There will be a future opportunity for seniors and the Town Council to jointly exert pressure on the NEA when the next contract is up for negotiation and I hope they will do it. The need for tangible pressure is a genuine one and that is the point where all of us can exert real financial leverage.

As to the issue at hand, I am troubled by the idea of using age as the sole factor in determining eligibility for a tax freeze. A freeze would assist some seniors, like Frank Woods, who genuinely need the help. That said, here is what troubles me: There are some wealthy seniors who don't need the help. There are also some single moms who need the help but are disqualified based on their age. Furthermore, providing a tax freeze benefit to all seniors amounts to an incremental tax increase to all non seniors, including those single moms who can least afford it. Providing a wealthy senior with a tax break at the expense of a single mom seems unfair - and that would happen under a tax freeze for seniors only.

There would be another effect: A tax freeze benefit, awarded selectively, would begin to polarize our community into subgroups who then have an increased incentive to clamor for more government intervention and benefits. Why shouldn't all of the economically disadvantaged mobilize? Or childless couples and single adults who pay taxes to fund our schools while never having children to send through the public schools? Or families who pay similar taxes while also separately paying tuition for their children to attend parochial or other private schools? The last thing East Greenwich needs is to begin morphing into a bunch of special interest groups, with each trying to drink more water from the government trough - no matter how genuine some of their needs might be.

Another concern about a tax freeze - as with most government programs - is the inability to forecast accurately its future costs. There is an endless list of government programs which have exceeded their original cost estimates and few, if any, programs which came in under their initial estimates. For example, read about the cost of Coventry's tax freeze program, which have totaled nearly $5 million in the first five years - after costs were originally forecasted to be minimal. It would be irresponsible to burden future generations of East Greenwich taxpayers with such a unfunded liability.

A tax deferral is preferable to a tax freeze because the deferral eliminates a related, albeit unspoken and potentially insidious, side effect of a tax freeze: Under a tax freeze, current taxpayers pay higher taxes in what amounts to a wealth transfer from themselves to the heirs of our seniors. That wealth transfer is also unfair.

Here is one possible way to resolve this dilemma: The Town Council could offer a tax freeze to residents based on a means test. I personally think it is a massive invasion of people's privacy to show tax return data to any more government agencies. Plus it would require the Town Council to determine which level of income qualified for assistance, a non trivial decision certain to be fraught with politics and difficult to implement without knowing all the town residents' financial data. In addition, it would be an administrative burden for town staff. For all these reasons, I believe this approach just wouldn't work.

Another alternative is to set the allowable increase for the school budget at a level so that seniors (and all residents) do not see their standard of living decline due to taxes going up faster than their incomes. That would be a contentious approach although the resulting cuts in school programs would certainly bring community focus to the core problem: How our already high taxes are adversely affected by many teachers getting 9-13 percent annual salary increases, 4 percent health insurance premium co-payments or $5,000 annual cash payouts, plus retroactive pay for time when they consciously decided to stiff our kids � all while our seniors struggle to make ends meet and while leaving few funds for new and innovative academic programs that benefit our children. Perhaps leadership from the Town Council could convince the community to put enough pressure on the NEA and force a re-opening of contract negotiations.

These thoughts lead me back to a general conclusion that there is no easy way to do a tax freeze unless it is for everyone. And that leads us back to the financial terms of our major union contracts which drive our heavy tax burden.

This is a "teaching moment" for our town leaders. I would encourage the Town Council to educate residents on the financial impact of 4% versus 20% health insurance premium co-payments, $5,000 cash payouts, changing the health insurance carrier from Blue Cross Blue Shield to United, 3% versus 9-13% annual salary increases, retroactive pay, and pension payments. I would bet that analysis would show tax increases going from unacceptable to tolerable if public sector union employees lived just like the rest of us, the people who pay their salaries and benefits.

Many seniors in East Greenwich are facing a genuine financial crisis that could result in them having to sell their homes. This is unfortunate and unfair. But it is a tax burden that is also unkind to a 41-year-old single mom struggling to make ends meet or a 55-year-old man who just lost his job. And all of these unfortunate situations are, yet again, another price we pay for having the fourth-highest state/local tax burden (see Table 6 on page 13 of this Tax Foundation report) in the United States.

At some point, the citizens of Rhode Island are going to rebel against the purveyors of economic fiction who destroy the ability of many working families and retirees to live the American Dream. The only open question is how many lives will be wrecked financially before the public sector unions are blocked from causing further havoc.

8:57 AM

National Politics

John Fund on United States of Big Labor

From the February 17 edition of the Wall Street Journal's Political Diary (available for a fee):

Remember that three-day mass transit strike that paralyzed New York City over the Christmas holidays? Apparently the drama isn't over. Since then, transit workers have narrowly rejected the contract their leadership accepted to end the strike. The union is now hoping to start new talks in a desperate effort to avoid binding arbitration that would probably result in a less generous contract being imposed on them.
But an even more important fight for the union leadership now concerns the threatened loss of its ability to automatically collect dues from members. Unions that violate New York state law barring public-employee unions from striking face losing the right to require these automatic paycheck deductions. "Dues checkoff is absolutely indispensable," labor law professor David Gregory told the New York Times. "If dues are suspended, frozen or sequestered, that's a radical move. It would fundamentally cripple the union." He noted that dues account for 87% of the union's $23 million in annual revenue.

A very similar issue explains why California public-employee unions spent over $120 million last year to defeat Governor Arnold Schwarzenegger's set of voter initiatives to reform California politics. A centerpiece of the governor's effort was a proposal to require the unions to seek written permission from their members before spending a portion of their dues on politics. "At the heart of the union's ability to extract concessions from government employers is their unlimited ability to spend union dues money on political retribution against elected officials," notes former teacher union official Myron Lieberman. "That issue is at the heart of most failures to improve the performance of government."

New York's transit union was once before denied the right to automatically collect dues money from its members after a bitter 1980 transit strike. But the courts restored its privileges after it presented evidence that it would be bankrupt without the cash infusions that automatic payroll deductions brought in. Given the chaos and costs last December's strike caused New York, here's hoping the courts view any such appeal for sympathy this time with a more jaundiced eye.

8:50 AM

I�m with Hillary Clinton on This One�

Carroll Andrew Morse

�but it�s Frank Gaffney who really convinces me. A group of Senators, including Senator Clinton, and now the Republican Governors of Maryland and New York, are opposing a plan to let a state-owned enterprise of the United Arab Emirates take over operation of 6 major American shipping ports.

Mr. Gaffey, President of the Center for Security Policy and former Assistant Secretary of Defense in the Reagan Administration (full bio here) who has rock-solid credentials in national security matters, no interest in electoral grandstanding, nor an interest in embarrassing the President for political reasons, explains the details of how this deal came to be and why it is a bad idea...

The federal bureaucracy has made a strategic mistake that threatens to cost the president dearly. The question is not whether last week's ill-advised decision by the secretive Committee on Foreign Investment in the United States (known by its acronym, CFIUS, pronounced syphius) will be undone. Rather, the question is: By whom -- and at what political cost to Mr. Bush?

In the latest of a series of approvals of questionable foreign takeovers of American interests, CFIUS has given the green light to a company owned by the United Arab Emirates (UAE) to acquire contracts to manage port facilities in New York, Newark, Philadelphia, Baltimore, Miami and New Orleans�.

A case can be made it is a mistake to have foreign entities responsible for any aspect of such ports, including managing their docks, stevedore operations and terminals. After all, that duty affords abundant opportunities to insinuate personnel and/or shipping containers that can pose a threat to this country. Even though the company in question may not be directly responsible for port security, at least some of their employees have to be read in on the relevant plans, potentially compromising the latter irreparably.

8:25 AM

February 20, 2006

...Continued from the previous post.

How the Most Boring Law Ever Determines the Shape of American Healthcare, Part 2

Carroll Andrew Morse

Health insurers saw in the Employee Retirement Income Security Act of 1974 (ERISA) an incentive to sell as much insurance through employers as possible, because ERISA insulated them from any liability greater than the actual costs of treatments.

This aspect of the law was the key factor in making employer-based insurance the only health insurance product sold in America at reasonable prices. Under the protection of ERISA, insurers could include pre-care utilization review in employee sponsored health-plans as a way to control their costs. Pre-ERISA, pre-care utilization review was a risky proposition for an insurer. An insurer could be held responsible for complications (like death) following from a refusal to provide treatment.

ERISA changed this. Insurance companies working through employers could be held responsible for nothing more than the cost of a treatment denied. If an HMO improperly denied someone a $1,000 treatment, that individual could sue to obtain the $1,000, but not for consequences and complications caused by failure to have received treatment in a timely fashion. And because of the strict preemption rules, individual states could not pass laws that held insurers operating within their jurisdictions to any higher standard; this principle was most recently reaffirmed in the case of Aetna Health v. Davila (2004).

Given the risk-reducing advantages it provided to healthcare plans provided through an employer, ERISA motivated health insurance companies to get out of the business of selling insurance directly to individuals, and to sell health insurance only through employers.

ERISA may be the single most enervating factor in America's healthcare debate. More than any other single factor, through its removal of personal healthcare decisions to a remote court system, the weak remedies it mandates for major harm caused, and its general incomprehensibility, ERISA creates the perception that problems with healthcare delivery in this country are the result of intractable, impersonal forces that can only be solved with big-government solutions.

But ERISA is not an uncontrollable, unstoppable force of nature. It is just a badly written and poorly interpreted 30-year old law. The reasonable first step in fixing healthcare delivery in this country is not creating more bureaucracy and regulation to support the problems created by ERISA, but to remove health insurance from ERISA enitrely.

8:58 AM | Comments (1)

How the Most Boring Law Ever Determines the Shape of American Healthcare, Part 1

Carroll Andrew Morse

Rhode Island is one of several states where a bill pending in the state legislature would, if passed, impose penalties on large companies that do not spend a specified amount on employee health insurance (House bill 6917). In Maryland, such a requirement has already been passed into law, but is being challenged on the grounds that the Federal government prohibits any state regulation of employer-sponsored healthcare plans. OpinionJournal summarized the case last week...

The Maryland statute required employers with more than 10,000 employees to spend at least 8% of its payroll on health care. Only one company fit the bill: Wal-Mart....

The good news is that the judiciary isn't likely to let such legal gerrymandering stand. The [Retail Industry Leaders Association] argues that both laws run afoul of the Employee Retirement Income Security Act of 1974, widely known as Erisa. One of Erisa's goals was to create a system in which nationwide employers could offer workers uniform benefits, free of conflicting state mandates...

The legal term is that ERISA "preempts" any state regulation of employer-sponsored benefit plans. In the case of District of Columbia v. Greater Washington Board of Trade (1992), a case involving a law similar to the Maryland and Rhode Island laws (and cited in a letter prepared for the Maryland Chamber of Commerce explaining how ERISA limits the regulation options available to state legislatures), the United States Supreme Court explained how very broad the scope of ERISA preemption is...

ERISA sets out a comprehensive system for the federal regulation of private employee benefit plans, including both pension plans and welfare plans. A "welfare plan" is defined in �3 of ERISA to include, inter alia, any "plan, fund, or program" maintained for the purpose of providing medical or other health benefits for employees or their beneficiaries "through the purchase of insurance or otherwise."...

ERISA's pre-emption provision assures that federal regulation of covered plans will be exclusive. Section 514(a) provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA.

The original focus of ERISA was not on health insurance, but on pension plans. The bankruptcy of the Studebaker automobile manufacturing company, which left thousands of employees unable to collect pension benefits they had earned, motivated legislative action on benefit regulation. The primary goal of ERISA was to apply strengthened reporting and funding rules to employer-sponsored benefit plans, reducing the likelihood that such plans would go bankrupt in the future.

To encourage businesses to continue to offer their employees benefit plans under the tougher regulations, ERISA gave employers two major breaks (in addition to tax-breaks) in the regulatory regime that it created. One was this idea of preempting any state laws. Large multi-state companies would not have to worry about operating under different regulations in different states. Secondly, ERISA reduced the risk involved in offering a benefit plan by limiting damages in benefit-related lawsuits to the exact amount of a benefit owed. If a company failed to pay out $1,000 it owed to an employee, the employee could sue for that $1,000, but not for any additional harm caused by the failure to recieve the $1,000 at the proper time.

Health insurers saw in ERISA a giant loophole that could be exploited to their advantage....

8:05 AM

February 17, 2006

Conflating Conservative with Republican

Marc Comtois

Jonah Goldberg offers a reminder that Republicans and conservative is not the same thing.

Republicans and conservatives aren't the same thing. This distinction seems lost on lots of people, including cable television bark-show bookers and partisan Democrats and Republicans alike. To a principled conservative, it is bad news when the Democrats lurch to the left, even if it makes the Democrats less likely to win elections. Why? Because when the Democrats move left, so do the Republicans.

In American politics, when one party moves left or right, the political center of gravity moves that way too. Bill Clinton, whatever his flaws, moved his party to the right. His triangulation infuriated Republicans because it is always vexing when someone steals your lunch. Democrats despise Bush's compassionate conservatism for similar reasons. A Republican president promising to "leave no child behind" annoys Democrats as much as Clinton's denouncing of Sista Soulja irked Republicans. When the Bush presidency is over, it will be more obvious in hindsight how much he moved the GOP to the left � by making the nanny state bipartisan.

It all boils down to what matters to you most. As a conservative, the extent I root for the GOP depends entirely on how successful it is in moving the political climate of the country toward fiscal restraint, limited government, and cultural decency. Single-issue voters understand this point best: Pro-lifers would dearly love to break the GOP monopoly on opposing abortion, just as abortion-rights supporters dream of the day when both parties are pro-choice. Many conservatives, including yours truly, would have agonized over a choice between a reliably pro-war Democrat and George W. Bush in 2004, particularly if judicial appointments weren't so important.

This is a point that Chafee supporting commenters (such as those commenting on this post) are either missing or understand well-enough to try to redefine "real" conservatism as whatever reflects Sen. Chafee's policy positions.

12:00 PM | Comments (1)

Senator Lincoln Chafee, the Concord Coalition, Fiscal Conservatives, and Deficit Hawks

Carroll Andrew Morse

In yesterday's National Review Online, Senator Lincoln Chafee's campaign manager Ian Lang defended his candidate's record on economic issues...

[Senator Chafee] has also twice been designated the Senate�s �most fiscally responsible� member by the Concord Coalition for his support of a Pay-As-You-Go approach to federal spending and for his efforts to eliminate the deficit. Up here in Rhode Island, those are the kinds of values we associate with Republicans: they are in favor of individual freedoms, they promote economic development, and they never support deficit growth.

Though the Concord Coalition gives Senator Chafee very high marks, other organizations that rate Congressmen and Senators on taxation, budget, and spending issues -- like the National Taxpayers' Union, or Americans for Tax Reform -- consistently rank Senator Chafee in the middle of the pack, better than the most profligate Democrats, but worse than almost all other Republicans.

The differences come from different choices of priorities. There are three factors involved in evaluating fiscal policy; tax rates, spending outlays, and the size of the deficit. The Concord Coalition and Senator Chafee say that cutting the deficit is the top priority. The Concord Coalition says that, for long-term deficit reduction, entitlements must be brought under control. This is not a radical position. Republican Senate Majority Leader Bill Frist basically said the same thing last week at CPAC...

Q: Are there any issues you�d like to see Senator Chafee evolve on?

Senator Bill Frist: I need all Republicans to recognize that we need to tighten our belts like all other Americans are doing and have to do. We need to cut out the wasteful Washington spending. It is something we are committed to do and something that we will do. I would ask that all Republicans, including Senator Chafee, help me voice that entitlement reform has got to be brought back out to our agenda, because young people today are going to pay a heavy price. Their future is being mortgaged on our entitlement programs. It doesn�t mean cut them, but slow the growth, and if we do that, we can guarantee a future of prosperity for all Americans.

So if Bill Frist and the Concord Coalition, who declare Senator Chafee to be their favorite member, agree, then what's the problem?

The problem is that Senator Chafee and the Concord Coalition are "deficit hawks" but not "fiscal conservatives". Senator Chafee and the Concord Coalition operate from the decidedly non-conservative positions that 1) the expensive, inefficient, and bureaucratic government entitlement programs in existence today are the preferred methods for providing retirement and healthcare benefits, and 2) that these programs can be indefinitely sustained in their current form by tinkering with benefit schedules and adjustments and, of course, by keeping tax rates high.

Unfortunately, they seem to discount concerns that high tax-rates have a negative impact on economic growth (Mr. Lang, after all, claims that Senator Chafee's views are consistent with those who want "to promote economic development", despite the Senator's frequent opposition to tax-cuts) and resist considering creative mesaures for reform -- like voluntary, individual social security accounts -- that have the potential to permanently lower inefficient government spending.

Finally, while we are on the subject of tax-policy, one section of Mr. Lang's letter provides a too-incomplete description of reality...

Since he became mayor, [Steve] Laffey has raised taxes a whopping 20 percent � hiking the average Cranston homeowner�s tax bill by $1,000 three short years ago, while also increasing government spending.

At about the same time that Mayor Laffey was dealing with the budget issues in Cranston that Mr. Lang refers to, Senator Chafee was fighting in Congress to impose a Federal tax burden on the country that was hundreds of dollars more per-household than the President wanted. Why, at this time, was it OK for Senator Chafee to favor high tax rates, but not OK for Mayor Laffey?

8:05 AM | Comments (10)

February 16, 2006

RE: Chafee's Response to National Review

Marc Comtois

Thanks to Don for pointing out the Chafee campaign's response to the National Review endorsement of Mayor Laffey. To be equitable, here is the text of the letter:

I read with amusement National Review Online�s recent endorsement of Cranston, Rhode Island Mayor Stephen Laffey as a �conservative� in his GOP challenge to Sen. Lincoln Chafee.

For anyone with even a cursory knowledge of Mr. Laffey�s record, the idea of describing him as you did as a tax cutting, pro-life conservative is just plain ludicrous.

Since he became mayor, Laffey has raised taxes a whopping 20 percent � hiking the average Cranston homeowner�s tax bill by $1,000 three short years ago, while also increasing government spending. In fact under Laffey Cranston taxpayer dollars were spent on among other things; an increase in the number of employees in the Mayor�s office, money to soundproof the walls of his own office, and a new luxury SUV for him to drive.

NRO also overlooked the fact that Laffey has consistently flip-flopped on his views on abortion. Laffey says one thing when he talks with editorial boards in Washington, but when meeting with potential voters he has offered just about everything except a clear answer. Just this fall Laffey said that while he was �pro-life� he considered Roe v. Wade �settled law� so �let it go.� Even more puzzling, when asked whose position on choice he most admired, Laffey stated he believes Hillary Clinton offers a reasonable position!

In contrast, Senator Chafee represents a winning blend of fiscal conservatism, traditional Republican values, and progressive ideals. He has a strong pro-business and pro-economic growth record as reflected by his recent endorsement by the U.S. Chamber of Commerce. He has also twice been designated the Senate�s �most fiscally responsible� member by the Concord Coalition for his support of a Pay-As-You-Go approach to federal spending and for his efforts to eliminate the deficit. Up here in Rhode Island, those are the kinds of values we associate with Republicans: they are in favor of individual freedoms, they promote economic development, and they never support deficit growth. The only fact that NRO seemed to grasp and that recent polls reflect is that a Laffey win in a primary would likely ensure a Democratic victory in November.

In their zeal to denounce Sen. Chafee, it would appear that the editors of National Review have instead been sold a bill of goods. While Mr. Laffey may be a smooth talker, when criticizing Senator Chafee's opposition to deficit-creating tax cuts, the Mayor�s own record is one of lust for revenue-generating property tax increases.

It is clear that Laffey is no conservative. But don�t take my word for it, take Laffey�s. In a September 16, 2005 story in the Providence Journal, Laffey himself admitted, that �when you say the word �conservative,� I don�t even know what that means.�

Ian Lang
Campaign Manger
Chafee for Senate
Warwick, Rhode Island

11:30 AM | Comments (42)

Chafee Campaign Responds to National Review Endorsement of Laffey

Senator Lincoln Chafee's campaign responds on National Review Online to the National Review's endorsement of Cranston Mayor Steve Laffey's campaign to replace Chafee, as reported earlier by Marc.

9:41 AM | Comments (11)

The Apprentice: Johnston

Carroll Andrew Morse

According to an article in today�s Projo by Katherine Gregg and Arthur Kimball-Stanley, interest in building a casino on the site of the Johnston Landfill is not originating with an Indian tribe, but with Donald Trump�

Yesterday, James B. Perry, president and CEO of Trump Entertainment Resorts, came to town to launch what he described as a campaign to persuade Rhode Island lawmakers to set the terms and tax rate themselves and then allow competitive bidding for a single casino-operating license.

Asked why The Donald would zero in on Johnston...Perry said: "There are three reasons. "Number one: great market in New England. Number two: available land. Number three: great access."

He said the Trump organization -- and its Rhode Island development partner, David H. Nunes -- also took their cue from recent comments by high-placed lawmakers that led them to believe the legislature is again open to the recommendation made in 2003 by a House gambling study commission for competitive bidding.

Where the constitutional amendment necessary to legalize gambling in Rhode Island fits into the Trump organization�s plans; they think it will be easy to pass, they would concentrate on passing an amendment in the early stages of the project, they are willing to gamble that showing serious interest in building a casino will make an amendment easier to pass, etc. is not yet clear.

7:59 AM

February 15, 2006

Eminent Domain Bills Before the Legislature

Carroll Andrew Morse

There are now at least three bills before the Rhode Island House that would either ban or regulate the government�s ability to use its power of eminent domain to take private property and give it to a new owner to increase a tax base and/or promote economic development.

1. The first version, House bill 6725, introduced by Representative Matthew McHugh (D-Charlestown/New Shoreham/South Kingstown/Westerly), is a straightforward ban on state or local government use of eminent domain to...

...acquire private residential property and then transfer it to a private developer for the purpose of improving tax revenue, expanding the tax base or for the sole purpose of promoting economic development.

H6725 is almost identical to the eminent domain reform ordinance introduced by Cranston Mayor Steve Laffey at the local level.

2. The second version, House bill 7151; introduced by Representatives James Davey (R-Cranston), Carol Mumford (R-Cranston/Scituate), John Loughlin (R-Little Compton/Portsmouth/Tiverton), John Savage (R-East Providence), and David Caprio (D-Narragansett/South Kingstown) takes H6725 and tries to close any loopholes, e.g. explicitly applying the law to �quasi-public corporations, boards, [and] authorities�, banning takings not just of "private residential property", but of any property, specifically banning takings for the purpose of �private retail office, commercial, industrial, or residential development�, etc. H7151 also introduces an exception for public utilities.

3. The third version, House bill 7350; introduced by Representatives Brian Patrick Kennedy (D-Hopkinton/Westerly), Peter Lewiss (D-Westerly), Elaine Coderre (D-Pawtucket), William San Bento (D-North Providence/Pawtucket), and Peter Kilmartin (D-Pawtucket) says that before the government seizes property to promote economic development, it must prepare a report first. OK, it also says that 150% of market value must be paid to displaced homeowners. Still, H7350 locks into law the principle that the government can take private property from one owner and give it to another to foster economic development.

Don�t let Rhode Island legislators get away with claiming that support for H7350 is support for real eminent domain reform.

9:35 PM | Comments (1)

Education

Make Unofficial School Choice Into the Real Thing

Carroll Andrew Morse

I stand behind my original solution to the problem posed by Providence residents like Maria Hernandez who send their children to school in Cranston. Instead of focusing on action against Ms. Hernandez, Cranston Mayor Steve Laffey should take the battle directly to the real source of the problem -- the Providence school system. Mayor Laffey should find a case involving a Providence resident currently attending school in Cranston and send Providence a bill for $4,000 -- the approximate amount of state-aid per-student in Rhode Island -- to cover the partial cost of that student.

The deal will be that Cranston will keep the student if Providence is willing to spend its state education aid in Cranston to help a Providence resident. If Providence is unwilling to help its own in this way, then the student will be returned to the Providence school system; then let Providence make the argument that children should be forced to go to bad schools even when other options are available.

Yes, I know that $4,000 doesn't cover the full cost of educating a student in Cranston, so this ad-hoc arrangement may not be sustainable indefintiely into the future. To make sure that proper precedents are set, Cranston would announce that this is a one-year deal only unless Rhode Island lays the foundation for a statewide school choice program by the beginning of the next school year.

8:02 AM | Comments (13)

February 14, 2006

Casino Connections?

Carroll Andrew Morse

1. State Representatives Raymond Gallison (D-Bristol/Portsmouth), Fausto Anguilla (D-Bristol/Warren), Jan Malik (D-Barrington/Warren), Edwin Pacheco (D-Burrillville/Glocester), and William San Bento (D-North Providence/Pawtucket) have introduced a bill to the Rhode Island House titled a �Joint Resolution Giving State Recognition for the Pokanoket Tribe of the Wampanoag Nation� (House Bill 7236).

2. The Chief of the the Pokanoket Wampanoags has, in the past, expressed an interest in becomming involved in building a casino in Rhode Island. Here is Jim Baron from the March 26, 2002 issue of the Kent County Times�

Asserting that "no single Indian tribe in Rhode Island should enjoy any advantage over the other in their desire to build a casino," two Wampanoag officials say they support a special commission to study gaming in Rhode Island, the same one vigorously resisted by the Narragansett Indians�

Chief Wilfred "Eagle Heart" Greene of the Seaconke Wampanoag Tribe and Chief Linda "Wild Fire" Elderkin-Degnan of The Pokanoket\Wampanoag Federation issued a joint press release Monday in favor of the Fox commission�.

Chief Elderkin-Degnan, who called the House study commission "a positive and significant first step in addressing the casino gaming issue," said that the House Finance Committee "has a responsibility to ensure any proposed casino gaming includes all Native American tribes in Rhode Island."

3. David Nunes, who recently pitched the idea of a casino to the Johnston Town Council, was the �project manager� for the Aquinnah Wampanoags in their efforts to build a casino on Martha�s Vineyard.

Could it be the Pokanoket Wampanoags who are interested in building the �Being Surrounded by Solid Waste Doesn�t Mean You Can�t Have Good Clean Fun� casino on the site of the Johnston Landfill?

8:47 PM | Comments (4)

Froma Harrop on Health Savings Accounts

Carroll Andrew Morse

In a column in Sunday�s Projo, Froma Harrop expressed opposition to the idea of health savings accounts, at least as proposed by President Bush�.

Bush's new HSA is actually a rocket-powered tax shelter dressed up as a sweet little program to help the uninsured. It would also undermine the traditional health coverage now offered by employers. (More on that in a minute.) And in case anyone still cares about deficits, it would cost the Treasury $156 billion in lost tax revenues over 10 years -- more than wiping out any savings Bush hopes to achieve with his cuts in projected Medicare spending.

1. The column�s emphasis illustrates why the country is not moving towards a national consensus on the issue of healthcare delivery. Liberal reformers focus almost exclusively on covering the uninsured. However, many people with health insurance have serious concerns of their own about the existing system, concerns like the fact that they have little control over what is and what is not covered, that changes in coverage are presented to employees in a take-the-whole-plan-or-leave-it fashion, that they may not be able to keep their current doctor if their employer changes insurance companies (which an employer might do without consulting their employees), etc.

To liberals (like Ms. Harrop) these concerns are secondary. Their overriding issue has become locking into law the power of remote collective entities -- either government or big corporations -- to regulate and control healthcare delivery decisions�

Like 401(k)s, the proposed HSAs could save money for employers while transferring the cost and risk of providing what was once an expected benefit onto the workers.

In other words, because some people want to surrender their freedom to distant bureaucracies, everyone�s freedom to make decisions about their own healthcare delivery should be curtailed in order to reduce "risk".

2. Ms. Harrop seems to take the distressingly common liberal position that taxes are good things in-and-of themselves.�

Bush's HSA proposal is a wedding cake of tax credits piled on top of tax deductions. And unprecedented in the annals of tax breaks, this one would tax neither the earnings going into the accounts nor the withdrawals coming out. This is unlike 401(k) plans, in which people contribute pre-tax dollars into accounts but pay taxes on the money they withdraw.

There is no mention of why this �unprecedented� tax cut is bad in terms of its impact on healthcare delivery, just the implication that a new way to cut taxes must be something undesirable.

Say you need medical services that cost $2,000, and you want to pay your healthcare provider directly. How much money do you need to pay for the medical services to be received? Under the "unprecedented" Bush plan, the answer is $2,000, if the money passes through an HSA. Ms. Harrop takes the position that to pay for $2,000 of medical services, you should pay the $2,000 to healthcare provider plus taxes to the government for the right to use your healthcare money where you need it.

3. The analysis of benefits that Ms. Harrop relies on borders on propagandistic. The Bush plan gives people both a tax-credit on the amount deposited into an HSA and tax-deduction from their gross adjusted income. Ms. Harrop, quoting a Center on Budget and Policy Priorities study, says�

The center figures that for a family making $180,000, a $1,000 contribution into an HSA would reap a $433 tax subsidy. If that family makes $15,000, the subsidy would total only $153 -- and that's assuming that a tax credit is made refundable. Otherwise, it would be zero.

The $280 difference comes strictly from the deduction, not the credit. Everybody gets the same $153 tax-credit for $1,000 deposited into an HSA. The person making $15,000, however, gets no reduction in taxes paid on his adjusted gross income becasue he is in the 0% tax-bracket, i.e. he is paying no Federal income tax that can be reduced. The person making $180,000 gets to take $1,000 off of his gross adjusted income, resulting in $280 in savings in the 28% tax-bracket.

This kind of cheap-shot leads one to wonder if the rest of the analysis in the study is of the same dubious quality. It is obfuscating to favor a progressive income tax, then claim that any tax dedution is a �tax-cut for the rich� because it has a bigger impact on the people who are paying more under the progressive structure. Of course, CBPP and/or Froma Harrop could resolve this intellectual difficulty by coming out in favor of a flat-tax, where everyone pays the same percentage regardless of income.

8:49 AM | Comments (6)

Froma Harrop on the Dutch Cartoons

Carroll Andrew Morse

Let�s commend Projo columnist Froma Harrop for her defense of the principle of free speech, for not accepting conventional liberal wisdom about the source of Islamist grievances against the West, and for putting some actual policy options on the table in response to the Dutch cartoon riots�

The conflagration over a cartoon in a Danish newspaper greatly clarifies things, especially for Europe. It used to be commonplace that a flawed American foreign policy was the root of most Muslim unhappiness. Now the poster children for peace-loving Continentals -- Denmark and Norway -- are having their embassies torched across the Muslim world. In police states where people get shot for holding up the wrong sign, crowds are given free rein to smash up European consulates and Christian churches. The puppet masters have big agendas. And for them, stirring anger against the West does have its uses�.

Want to end the violence?...Tell the various strongmen, sheiks and clerics that they may no longer partake of the pleasures and comforts of the West while inciting the masses at home. Henceforth, Saudi princes may not come to the great medical centers of Berlin or Boston to have their cancer treated. The militant mullahs can't send their children to private schools in England. The men who cultivate anti-West paranoia among their impoverished masses may not own villas on the Cote d'Azur. And their wives may no longer shop on the Via Veneto�.

Westerners must be clear that we establish our own rules about what's acceptable in our own countries -- and that the job of defusing the crazed masses belongs squarely with their manipulators. The West, after all, can make life a lot less pleasant for the puppeteers.

8:47 AM | Comments (4)

February 13, 2006

National Politics

When a Republican is Really a Democrat

Mac Owens

It's been a while since I posted. This piece ran on NRO today. The topic is the decision by my good friend, Jim Webb, to seek the Democratic nomination for the US Senate from Virginia. I think this is a blow to the Republicans. Then it occurred to me. Maybe I can convince Jim to move to RI and run as a Dem against Chafee.

http://www.nationalreview.com/owens/owens200602130816.asp

National Review Online

Mackubin Thomas Owens

NRO Contributing Editor

February 13, 2006, 8:16 a.m.

Webb Loss

A potential challenge to George Allen is a challenge to the Republican party.

In the 1980s, many Democrats, put off by the perceived left-wing shift of their party, voted Republican for the first time in their lives. These were the "Reagan Democrats," and they contributed to the most significant political realignment in the United States since FDR and the New Deal. The Democratic "solid South" cracked, and political pundits began to argue that projected demographic shifts would give the Republican party an "electoral lock" in presidential elections. It took longer on the legislative side, but in 1994, the Republicans gained control of both Houses of Congress for the first time (with one short exception) since the 1930s.

Meanwhile, the Democratic party went into decline. Since FDR, the central idea of the Democrats has been that the government's job is to adjudicate the distribution of resources among competing claimants. Over the past couple of decades, the Democratic party has taken this to its logical conclusion, treating the United States not as a community of individuals, but as an array of groups whose demands must be met.

As the Alito hearings demonstrated, Democrats have eschewed rhetoric as a means of persuading the electorate, preferring instead to grandstand in an effort to appease the left-wing interest-groups that constitute the base of the Democratic party. The party's only hope for returning to power is to throw off the shackles imposed by Moveon.org, the Daily Kos, People for the American Way, NARAL, and the like.

We may soon see if this is possible. My friend Jim Webb announced last week that he will seek the Democratic nomination for the U.S. Senate from Virginia. If he wins the Democratic primary, he will challenge the incumbent, Republican George Allen.

Republicans should worry. Webb is an impressive man. He is a 1968 graduate of the U.S. Naval Academy. As a Marine officer in Vietnam, he led an infantry platoon and company, was wounded twice, and was awarded the Navy Cross (second only to the Medal of Honor as a recognition of valor) and the Silver Star. After he was medically retired from the Marine Corps, he attended Georgetown Law School and later served as counsel to the House Veterans Committee. He is the author of six novels, including Fields of Fire, the best novel there is about Vietnam. During the Reagan administration, he served as an assistant secretary of Defense and secretary of the Navy. Combine his virtues with the fact that Virginia is one of the few states where a conservative Democrat might win, and, if Webb prevails in the Democratic primary, Senator Allen is likely to be in for the fight of his life.

What most endeared Webb to me and many others who served in Vietnam was his unflinching defense of Vietnam veterans against the slanderous charges that have been leveled against them: dopehead, baby-killer, war criminal...you remember. Webb is the man who time and again stood on the front lines of the culture war that still rages between those who served during the Vietnam era and those who didn't, a culture war that played a major role in the recent election. He could always be counted on to stand up to the elites who peddled falsehoods about Vietnam veterans. Ironically, these slanders were most at home in the Democratic party, whose nomination Jim now seeks.

What happened? Why does a man who served in the Reagan administration now embrace the very party that, since Vietnam, has denigrated the martial virtues he epitomizes? Part of it is his opposition to the war in Iraq. Webb is no knee-jerk Bush hater, and his opposition to the Iraq war is based on strategic considerations � he is concerned that by committing such a large force there for an extended period of time we have weakened ourselves in the long run against a rising China.

More to the point, though, is his growing anger at the Bush administration for what he sees as a McNamara-like disregard for military advice, and even worse, a tendency on the part of too many Republicans and conservatives who did not serve in the military to attack the service of veterans like Jack Murtha who oppose the war. Webb's New York Times op-ed of January 18, "Purple Heartbreakers," was a clear harbinger of his break with the Republican party. There he wrote:

[I]n recent years extremist Republican operatives have inverted a longstanding principle: that our combat veterans be accorded a place of honor in political circles. This trend began with the ugly insinuations leveled at Senator John McCain during the 2000 Republican primaries and continued with the slurs against Senators Max Cleland and John Kerry, and now Mr. Murtha.

The political tactic of playing up the soldiers on the battlefield while tearing down the reputations of veterans who oppose them could eventually cost the Republicans dearly. It may be one reason that a preponderance of the Iraq war veterans who have thus far decided to run for office are doing so as Democrats.

Both Jim and I have taken Kerry to task for what he said after the war (readers of National Review and NRO may have noticed that I wrote some 14 articles on Kerry's antics after the war), but both of us were troubled by the attack on his service. I cringed during the Republican convention in 2004 when some genius came up with the idea of mocking John Kerry by circulating band-aids in the shape of Purple Hearts. This seemed to me to be a real case of tonedeafness.

Jim will be a formidable candidate. I already know a number of Virginia Republicans who are inclined to vote for him because of what they (rightly) perceive as his sterling character. It will be interesting to see what happens if he wins (assuredly not a foregone conclusion, given Allen's real strengths). Somehow I can't see him hanging out with Teddy Kennedy, Barbara Boxer, Chuck Schumer, or John Kerry, whose hand Jim once refused to shake. And the idea of Harry Reid bending Jim to conform to his will makes me laugh. When Webb abruptly resigned as secretary of the Navy in 1988 after clashes with Defense Secretary Frank Carlucci, he remarked to reporters, "It's no secret that I'm not a person who wears a bridle well."

Let us hope that Webb's move from the Republican party to the Democrats does not adumbrate a major cultural shift that would deal a major blow to the former: the loss of the "Scots-Irish," a group that Webb described in his 2005 book, Born Fighting (which I had the good fortune to review for National Review). In Born Fighting, Webb wrote:

[The Scots-Irish shape our culture] more in the abstract power of emotion than through the argumentative force of law. In their insistent individualism they are not likely to put an ethnic label on themselves when they debate societal issues. Some of them don't even know their ethnic label, and some who do know don't particularly care. They don't go for group-identity politics any more than they like to join a union. Two hundred years ago the mountains built a fierce and uncomplaining self-reliance into an already hardened people. To them, joining a group and putting themselves at the mercy of someone else's collectivist judgment makes about as much sense as letting the government take their guns. And nobody is going to get their guns.

In my review I remarked that these are the "red state" voters. They are family-oriented, take morality seriously, go to church, join the military, and listen to country music. They strongly believe that no man is obligated to obey the edicts of a government that violates his moral conscience. They once formed the bedrock of the Democratic party � from Andrew Jackson until Vietnam � but have been moving to the GOP ever since. In a recent Wall Street Journal article, Webb called the Scots-Irish in America the "the secret GOP weapon."

But the Republicans cannot take this group for granted. Commenting on a statement that Howard Dean made during the Democratic primaries, Charles Krauthammer opined that Dean was campaigning for the "white trash vote" by pandering to the "rebel-yelling racist redneck." In the Wall Street Journal, Webb called this "the most vicious ethnic slur of the presidential campaign," noting dryly that Krauthammer "has never complained about this ethnic group when it has marched off to fight the wars he wishes upon us." Jim and I disagree on a number of topics � the Iraq war being an obvious instance � but the Republicans can't afford to lose such people.

� Mackubin Thomas Owens is an associate dean of academics and a professor of national-security affairs at the Naval War College in Newport, R.I. He is writing a history of U.S. civil-military relations.

12:34 PM | Comments (1)

February 12, 2006

Taxation

Rhode Island Welfare Statistics

Carroll Andrew Morse

An evening version of a Scott Mayerowitz story on Governor Donald Carcieri�s proposed 2007 budget from last week's Projo contained this interesting passage�

Carcieri plans to start counting time spent on welfare in other states against a lifetime limit here. There is no national database of who has been on welfare in what state. Rhode Island officials plan on asking welfare applicants for more information about where they have been and what public assistance they received. They also hope to verify some of this information with other states. The bulk of Rhode Island�s welfare recipients come from Massachusetts, Puerto Rico, New York, Florida, Connecticut, and New Jersey.

Three questions�
1. Exactly how much, in terms of number of people and amount spent, constitutes �the bulk�? (And exactly how many of them are from Florida? And are the people from Florida moving up here for the weather?)
2. How long do you have to have lived in Rhode Island before you are no longer considered as being from another state?
3. In how many other states, is it common for �the bulk� of welfare recipients to come from a state other than the state where they are receiving their benefits?

UPDATE:

The fabulously named AuH20Republican suggests that the article might mean that�

The majority of welfare recipients who moved to RI from other states came from those 6 states.

To eliminate any ambiguity, I contacted Scott Mayerowitz, who indicated that the AuH20Republican interpretation was the proper one.

I'll see if I can nail down some specific numbers in the near future.

11:37 PM | Comments (2)

February 11, 2006

Other Impressions of CPAC

Carroll Andrew Morse

WASHINGTON D.C. � I�m getting ready to fly back to Rhode Island, hopefully ahead of the snowstorm�

Mary Katharine Ham�s posts (here and here) on Hugh Hewitt�s website provide a good jumping off point for finding other reporting and impressions of CPAC.

12:15 PM | Comments (4)

Congressman Mike Pence on United Nations Reform

Carroll Andrew Morse

WASHINGTON D.C. � Mike Pence is one of the authors and the primary sponsors of the �tough� version of United Nations reform currently under consideration by Congress. During a question-and-answer session with Congressman Pence, I had the chance to ask him if he believes that United Nations reform will pass this year.

Congressman Pence thinks that there will be United Nations reform this year, partially through legislation, and partially through the tenacious efforts of John Bolton. Pence characterized the House UN reform bill as setting a timeline for reforms that the United Nations has already embraced on issues like accounting, transparency, and human rights.

Congressman Pence believes that the US must use the power of the purse to implement UN reform with teeth and that his bill does that. He hasn�t seen the latest iteration of the Senate bill, but the Congressman believes that the House and Senate will come together to pass a tough reform bill.

According to Congressman Pence, the UN has �consistently been an utter failure in its core mission, which was to bring the free nations of the world together to confront tyranny in a collective way� evidenced most dramatically by the unwillingness of the UN to follow through on sixteen separate resolutions throughout the 1990s; "it wasn�t that diplomacy failed, it wasn�t that America failed, it was the United Nations that failed".

Congressman Pence believes that if these reforms are not achieved, then the US needs to "seriously consider putting our heads together with the other nations of the earth that are committed to freedom and consider a new forum for the twenty-first century" � a forum that won�t spend "an enormous amount of time trying to tie down this great nation".

11:46 AM

Meet Greg Parke, Candidate for U.S. Senate in Vermont

Carroll Andrew Morse

WASHINGTON D.C. -- Greg Parke is running as a Republican for Senate seat being vacated by Jim Jeffords in Vermont. He is running in a contested Republican primary where the winner will likely face Socialist Bernie Sanders in the general election. Always interested in talking to New England conservatives, I took the opportunity to ask Mr. Parke a few questions.

I asked Mr. Parke why he believes (as we at Anchor Rising do) that there is a bigger audience for conservatism in New England than most of the nation realizes.

Mr. Parke answered by using the example of the 2000 elections for state office in Vermont. There was a 34 seat turnover in the Vermont House of Representatives and Republicans almost won control of the Senate after Howard Dean and the state legislature passed civil unions. Unfortunately, the Republican party leadership squandered their mandate by not taking social issues seriously and, as a result, they lost seats in 2002 and 2004, losing their majority in the House and dropping from 14 to 6 (out of 30) seats in the Senate.

According to Mr. Parke, in race after race, you could find Democrats who lost their seats to Republicans in 2000, but won them back while receiving about the same vote totals they had received in the elections they had lost, because the conservative base didn�t turn out to vote, because they felt abandoned by the party. Mr. Parke used the words �discouraged, disgruntled� to describe the attitude of conservative voters towards the Republican Party leadership.

I then asked Mr. Parke what issues he is running on in his campaign for the United States Senate.

Mr. Parke, a former fighter pilot, diplomat, and Middle Eastern policy analyst with the Pentagon, replied that defense is a natural issue for him and, more importantly, that Bernie Sanders is very weak and out-of-synch with Vermonters on defense issues. According to Mr. Parke, Congressman Sanders� voting record on defense is not good; he has voted against body armor and improved medical benefits for the troops, has a poor record on veterans� issues and, in the 1990s, when the Clinton administration wanted to cut the intelligence budget, Congressman Sanders wanted even bigger cuts than the administration wanted.

Mr. Parke believes Vermonters take defense issues very seriously and that they understand that the Senate is lot different from the House; he has heard many people tell him that they voted for Mr. Sanders for the house, but don't feel that Mr. Sanders is appropriate for the Senate.

8:43 AM | Comments (5)

February 10, 2006

Bill Frist on Lincoln Chafee (and Running for President)

Carroll Andrew Morse

WASHINGTON D.C. -- Senate Republican Majority leader Bill Frist stopped by Blogger�s Alley this afternoon to answer a few questions. It was not I who asked the first question about Senator Chafee�

Q: Why should Republicans support Senator Chafee in his re-election after he would not even vote for President Bush in the last election?

Senator Bill Frist: Senator Chafee is a colleague. He is a Republican. It is a big tent, the Republican party. He is a principled man and a man of integrity. Senator Chafee being a Republican means that we, in part, are in majority control of the United States Senate and that our leadership is Republican in terms of the majority leader, the whip, the conference director and the policy chairman.

Q: Are there any issues you�d like to see Senator Chafee evolve on?

BF: I need all Republicans to recognize that we need to tighten our belts like all other Americans are doing and have to do. We need to cut out the wasteful Washington spending. It is something we are committed to do and something that we will do. I would ask that all Republicans, including Senator Chafee, help me voice that entitlement reform has got to be brought back out to our agenda, because young people today are going to pay a heavy price. Their future is being mortgaged on our entitlement programs. It doesn�t mean cut them, but slow the growth, and if we do that, we can guarantee a future of prosperity for all Americans.

Q: Are you running for President?

BF: I will fulfill my commitment on term limits. It�s rare for politicians to do what they say, I know, but after 12 years I�m going back to Nashville to live in the house I grew up in with same values that my family instilled in me, and then I�ll decide whether or not I�m going to go back to heart surgery or be a medical missionary�

(dramatic pause)

�or do something else in public service.

6:03 PM | Comments (7)

Best Non-Inflammatory Ann Coulter Line

Carroll Andrew Morse

WASHINGTON D.C. -- "Conservatives are the ones who favor the real constitution and not the director's cut favored by the Democrats".

Coulter's message boils down to warning Republicans that it would be folly for them to abandon their principles and run a pro-choice Republican because they believe it's the only way to beat Hilary Clinton.

4:23 PM | Comments (6)

Condi for Prez!

Carroll Andrew Morse

WASHINGTON D.C. -- I had a quick opportunity to talk to Jessie Jane Duff, who is leading the movement to draft Condoleezza Rice to run for President of the United States. I asked if she believed that Dr. Rice could win in Rhode Island. She answered that Dr. Rice could defeat any Democrat.

I asked if Dr. Rice could beat Rudy Guiliani in a primary in Rhode Island. Ms. Duff answered that it would be a piece of cake, but that Mr. Guiliani would be a fine vice-presidential nominee.

4:00 PM | Comments (2)

The Future of the United Nations

Carroll Andrew Morse

WASHINGTON D.C. -- The debate I atteneded on whether the U.S. should either reform or just withdraw from the UN was disappointing. Jeff Gayner of "Americans for Sovereignty" made the usual (and compelling) arguments for full US withdrawal -- the UN is corrupt, the UN tries to impose rules that go beyond what our government would allow itself to do, the UN takes hypocrisy to new heights by putting countries like Sudan on the human rights commission etc. He said the UN should be replaced with a comunity of democracies (he didn't use that exact phrase, but that was the general idea) and went as far as to endorse Congressman Ron Paul's bill that has the US withdrawing from the UN and telling the UN to move their offices somewhere else.

Unfortunately, the person representing the other position in the debate, Jon Utley of "Conservatives for Peace", made very superficial arguments in defense of the UN -- the UN gives the US legitimacy and legality -- without elaborating or offering that any reform was needed at all. He tried to explain that the oil-for-food corruption was the fault of the Clinton administration for want to keep sanctions in place against Iraq.

Tell me, are there UNiks out there that the UN itself must absolutely be saved, or would a brand new organization, without the UN's historical baggage, be sufficient?

1:52 PM

Vice-President Cheney Talks About the Future, Part 4

Carroll Andrew Morse

WASHINGTON D.C. -- 4. The Vice-President was unapologetic about the NSA warrantless surveillance program. And he was very clear on one factual point. Only calls where one end was outside of the United States were monitored. This, I believe, is the substantive fact that will make this a non-issue.

The fourth amendment bars "unreasonable searches and seizures". A different standard of reasonableness -- in the law and in people's minds -- applies to what crosses national borders than to what stays within the borders. A reasonable search of person who is crossing the border from Mexico or Canada would not be considered a reasonable search of someone traveling between Warwick and East Greenwich. The same distinction can be applied to electronic communication.

If the Democrats stick with their "the war in Iraq was a mistake" line, but aggressively push the idea that warrantless surveillance of parties outside of the United States should be forbidden, then they are arguing that the United States shouldn't be active in promoting the rights of average people trapped under totalitarian governments trying to go about normal lives, but should actively apply the protections of the American Constitution to non-citizens outside of the United who may be plotting terrorists acts.

Isn't this an example of the famed Democratic incoherence on foreign policy?

10:14 AM | Comments (1)

Vice-President Cheney Talks About the Future, Part 3

Carroll Andrew Morse

WASHINGTON D.C. -- 3. The good news is that energy policy occupied a prominent place in the Vice-President's remarks. The bad news is that the supposition from earlier in the week seemed to be borne out; solar and wind were not presented as significant alternatives.

The components of energy policy mentioned by Vice-President Cheney were expanding refining capacity, increasing production from domestic oil sources (including ANWR) and certain alternative forms of energy -- hydrogen fuel cells, clean coal and -- brace yourself, Bountyhunter, and take heart, John_b -- ethanol.

9:24 AM | Comments (1)

Vice-President Cheney Talks About the Future, Part 2

Carroll Andrew Morse

WASHINGTON D.C. � 2. Vice-President Cheney pointed out what economic and revenue-collection data from the past few years have made obvious, cutting tax rates does not imply cutting tax revenues. If you create a tax-environment that encourages growth, you can collect more revenue than by trying to take a bigger chunk out of a stagnant environment. And there is a plan to take this argument beyond the realm of rhetoric; the administration plans to create new division in the Treasury Department to conduct more dynamic analyses of tax-policy.

I sense lots of blogging about the exciting differences between different dynamic revenue models coming in the near future!

9:11 AM

Vice-President Cheney Talks About the Future, Part 1

Carroll Andrew Morse

WASHINGTON D.C. -- Vice-President Richard Cheney delivered his address at CPAC last night. The Vice-President�s remarks made clear what conservative beliefs are on a number of big issues and how they will mesh with Republican electoral strategy heading into the 2006 elections -- and beyond. The next few posts (time-wise, which means scroll up, not down) will explain the details�

1. Social Security reform is not dead. It has just been moved to the long-term list of goals rather than the short-term list.

I draw this inference from a single line in the Vice-President�s speech. At the very beginning speech, before he discussed tax-cuts, energy policy, or the War on Terror, he very conspicuously thanked �Students for Saving Social Security� for participating in the conference. This was the only issue group attending the conference (and there are a lot of them here) that he acknowledged directly.

Conservatives are beginning a drive to explain to the young�uns that Social Security can�t be there for them in the future its current form and to get them active in thinking about what the alternatives are. This may not pay any electoral dividends immediately, but unless the Democrats come up with a better plan than pay-more-to receive-less, Social Security could become an effective Republican issue far into the future.

8:54 AM

February 9, 2006

Lunch with Stephen Schwartz

Carroll Andrew Morse

WASHINGTON D.C. -- Thanks to Rocco DiPippo and Michael Calderon, I had the opportunity to have lunch with Stephen Schwartz, Executive Director of the Center for Islamic Pluralism and a regular contributor to the Weekly Standard.

Mr. Schwartz, an expert on the history of Islam, can make a convincing case that the idea of an absolute prohibition on images of the Prophet in Islamic law is a myth. He believes that our media and political elites need to learn more details of Muslim beliefs and traditions so that they won�t readily support policies favored only by fringe groups with odd interpretations of their own history who seek to expand their power at the expense of everyone else.

Mr. Schwartz will make these arguments in rich historical detail in an upcoming Weekly Standard article.

5:49 PM | Comments (8)

Free Market Think Tank in RI?

Carroll Andrew Morse

WASHINGTON D.C. � Did you know that Rhode Island is one of only seven states in the U.S. without a free-market think tank? If anyone is interested in starting one (Tom Coyne, call your office), the State Policy Network would like to help you get started.

Tonya Barr from SPN said that the most important part of starting a think tank is finding people who are interested in starting one.

12:09 PM | Comments (4)

What�s the Difference Between an Agreement and a Treaty?

Carroll Andrew Morse

WASHINGTON D.C. -- Congressman Tom Tancredo, talking on a panel about immigration issues, made the following point that I had had been previously unaware of. Why are �free trade agreements� agreements and not treaties?

Tancredo�s answer is that if they were treaties, they would require 2/3 approval of the Senate to be ratified, and thus would never pass.

Is this another example of George Will�s creeping expansion of government power when it serves government interests?

11:35 AM | Comments (3)

George Will: Rhode Island is a Potential Hotbed of Conservatism

Carroll Andrew Morse

WASHINGTON D.C � Well, that�s not precisely what he said. However, George F. Will laid out six ideas in his opening lecture at CPAC that he believes should define conservatism into the future�

Win elections to secure the Federal judiciary.
Prevent a growing dependency on government that creates perverse incentives.
Stop the lawless attack on American success, e.g. Maryland imposing taxes on Walmart to fund a state healhcare program.
Battle the politics of condescension. Trust the American people to be able to choose their own schools, their health care through health-savings accounts, their own retirement plans, etc.
Remember that conservatives will not always control the executive branch of government; don't support unreasonable expansions of government power. Will pointedly used the example that the Congressional authorization to use force in Afghanistan did not change surveillance law regading warrants.
In foreign policy, conservative skepticism about government should extend to a skepticism about our ability to remake turbulent societies

We can relibably say that George Will says represents mainstream conservative thinking. I frequently read and here that Rhode Island is a "liberal" state, so local politicians cannot win here if they identify themselves as conservative. My question is this -- what is there in Will's conservatism that the political establishment feels can never appeal to Rhode Islanders?

Points 2, 3, and 4, in particular, are very relevant to the future of Rhode Island. If these ideas are immediately rejected, where else will alternatives to policies of higher taxes and more spending on ineffective programs be found?

11:24 AM | Comments (3)

Site-Related Announcements

Anchor Rising Live at CPAC!

Carroll Andrew Morse

WASHINGTON D.C. -- I am blogging this morning from the site of the 33rd annual Conservative Political Action Conference. I'll be spending the next 2 1/2 days learning about the issues, arguments, and people that will be shaping our national politics and will try to represent Rhode Island well to the rest of the country.

I post anything interesting I learn as soon as I can...

9:13 AM

February 8, 2006

Evans - Novak Political Report: Laffey leads Chafee

Marc Comtois

Laffey supporter The Club for Growth passes this news from the Evans-Novak Political Report on its blog (UPDATE: Thanks to Reconcilable Differences for the link to a free version of the full E-N report.):

Republicans in Rhode Island say that Sen. Chafee had given private assurances that he would be supporting the Alito Supreme Court nomination. His reversal on this issue drew a public rebuke from his most reluctant supporter, popular Gov. Don Carcieri (R), and endangers him in his primary race against Cranston Mayor Stephen Laffey (R). Laffey must now be considered the narrow frontrunner in the Republican Senate primary after crossing the $1-million mark and outraising Chafee in individual contributions for the quarter.

Chafee maintains a two-to-one cash advantage after beating Laffey with PAC money and making himself a $330,000 campaign loan. But he may need a lot more than that to survive. Another negative for him on the Alito issue is the fact that it is probably impossible for him to win a Republican primary in Rhode Island without significant support from the state's large Italian population.

Rhode Island's primary doesn't happen until September. If he sees the writing on the wall, Chafee could well choose to run as an independent.

It would make sense, it is Rhode Island's largest voting bloc, after all.

7:15 PM | Comments (12)

Poll: Chafee's Lead Over Dems Narrows III

Carroll Andrew Morse

I think the clearest interpretation of the February 2006 Brown University/Taubman Center Senate poll results comes not from comparing them to the September 2005 poll, but to the June 2005 poll.

1. When you compare this poll results to the results from June, Matt Brown appears to be the only candidate building support amongst the general population, going from 29% to 36% against Senator Chafee, and 40% to 47% versus Mayor Laffey. Chafee and Laffey each lost 6% versus Brown, while in any matchup involving Sheldon Whitehouse; Whitehouse, Chafee, and Laffey all show losses between 1% and 3%.

2. The number of most concern to the Laffey campaign should not be the gap between himself and his Democratic challengers, but the fact that his support has been flat, or worse, since he announced his candidacy. Again, comparing to June 2005, Laffey has gone from 30% to 24% versus Brown (probably involving a real loss) and from 32% to 29% against Whitehouse (possibly involving a strong degree of statistical fluctuation; Whitehouse doesn�t show a matching gain.)

The counter-argument, which is legitimate, is that Mayor Laffey cannot assume victory in the primary before campaigning for the general election. Still, I think the message here is while Mayor Laffey�s ground campaign may be strong, the air-campaign (broadcast media) so far hasn�t been convincing to independent Rhode Islanders.

3. The Chafee campaign�s problem, on the other hand, is the closing gap between himself and Matt Brown. Chafee only leads Brown by 2%, within the poll�s margin of error. If Chafee falls behind, I don�t see how the he can mount an effective come-from-behind general election candidacy. The "I�ll keep the Senate in Republican hands" message won�t work in the general and the �I�ll bring lots of pork back to Rhode Island� is not going to be popular this election cycle. Once he falls behind one or both of the Democrats, what does Senator Chafee campaign on to regain the lead?

6:31 PM | Comments (9)

Re: Poll: Chafee Lead over Dems Narrows, but.....

Carroll Andrew Morse

Earlier this morning, I called Professor Darrell West, Director of the Taubman Center for Public Policy at Brown University, and asked why Rhode Island Republican Primary Senate results were not included in the February 2006 State Survey. Professor West answered that it is too hard to predict where independents will go.

If you look back at 2002, there were about 240,000 ballots cast for Governor in the general election, while only 25,000 people voted in the contested Republican Gubernatorial primary. That means the poll sample of 785 probably contains around 80-90 likely Republican primary voters.

To have any chance at all of giving an accurate snapshot of the race, the Brown University pollsters would have to figure out some way to identify independents likely to vote in a Republcan primary (when many independents themselves probabaly haven't decided which primary they're going to vote in!) and then conduct a second poll to get a big enough sample of Republicans + Republican-voting independents.

6:24 PM

The Kelo Decision: When Private Property Rights are Eroded, Our Freedom is Diminished
Rediscovering Proper Judicial Reasoning
Relinking Constitutional Law & Jurisprudence to the Constitution
"The Supreme Court Has Converted Itself From a Legal Institution to a Political One"
How Original Intent Does Not Equal Conservative Judicial Activism
Are You an Originalist?
Judicial Activism: Commandeering the Public Debate & Violating the Founding Principles of America
Orrin Hatch: Don't Overstate "Advise and Consent"
Senator Santorum: Judicial Activism is Destroying Traditional Morality
"Restoration of Judicial Restraint Assists the Restoration of Good Will, Because Democratic Governance Gives Everyone Their Say"
The Ginsburg Precedent
Senator Schumer's Double Standard
Playing the Religious Bigotry Card, Again
Nothing But a Fishing Expedition
How the Left Blurs the Distinction Between Judging & Politicking
What is the Federalist Society?
U.S. Constitution: "No religious test shall ever be required as a qualification to any office or public trust"
The Religious Bigotry Continues...In Full View, For All To See
Judicial Restraint 101
A Conservative View of American Politics Today
Stuart Taylor on Judge Alito
Reflecting on Justice Alito's Confirmation Hearings: Not All Law is Politics in Robes
Elaborating Further on the Constitutional Principle of Federalism

Poll: Chafee Lead over Dems Narrows, but.....

Marc Comtois

Brown pollster Darrell West has a new poll out that includes a curious omission (thanks to George Conway for the heads-up). But I'll get to that later. First, the stats:

U.S. Sen. Lincoln Chafee is locked in a close race with Democrats Sheldon Whitehouse and Matt Brown in the Senate general election, according to a new statewide survey conducted by researchers at Brown University.

The survey was conducted Feb. 4-6, 2006, at Brown University by Darrell M. West, director of the A. Alfred Taubman Center for Public Policy and American Institutions and the John Hazen White Sr. Public Opinion Laboratory. It is based on a statewide random sample of 785 registered voters in Rhode Island. Overall, the poll had a margin of error of about plus or minus 3.5 percentage points.

If the general election were held today, Chafee has an advantage of 40 to 34 percent over Whitehouse (compared to his lead of 38 to 25 percent in September). If Brown is the Democratic nominee, Chafee�s lead is 38 to 36 percent (compared to 41 to 18 percent in September).

If the Republican nominee were Cranston Mayor Stephen Laffey, Whitehouse is ahead by 44 to 29 percent (up from the 35 to 25 percent lead Whitehouse had in September). If the nominees were Laffey and Brown, Brown has an advantage of 47 to 24 percent over Laffey (up from 30 to 26 percent in September).

On the face of it, the poll lends credence to the theory that Sen. Chafee is the only Republican that can win, even if his numbers are slipping. But a careful reading of the poll shows no numbers on the Republican primary, ie; Laffey v. Chafee. Why not? That's what George asked me in an email and he wondered if it was because there weren't enough Republicans in the sample to give accurate data. Here is my response:

Darrell West has a habit of underpolling Republican support. In 2002, he had a neck and neck race between now-RI Gov. Carcieri (R) and Myrth York (D). Carcieri ended up winning by around 10 pts. This does call into question his methodology (when, where does he poll?) Southern RI is more Republican than northern (around Providence) for instance. I suspect you are correct: he couldn't get enough Republicans to provide an adequate sample. Note how small his sample is in the Democrat race of Langevin v. Lawless. For such a Democrat state, that seems small, even if it is for only one district. Another factor is the large number of unaffiliated voters in the state. That's about all I can think of.

Upon further review, I understated the gap in West's polling of the governor's race in 2002. In October of 2002, he had York ahead of Carcieri, 41% to 34% with 25% undecided. Gov. Carcieri won 55% to 45%. In essence, perhaps his methodology tends to lead West to consistently undersample Republicans. I'm no pollster, I don't know. Setting that aside, it clearly shows that Mayor Laffey has his work cut out in appealling to the average RI voter, the amount of undecided can make a difference. Here are the actual political questions asked in the poll:

Survey Questions and Responses
If the Democratic primary for U.S. Senate were held today, would you vote for: 31% Matt Brown, 0% Carl Sheeler, 25% Sheldon Whitehouse, 44% don't know or no answer (based on 323 voters who say they are very likely to vote in this year�s Democratic primary)

If the Democratic primary for U.S. Congress were held today, would you vote for: 58% James Langevin, 14% Jennifer Lawless, 28% don't know or no answer (based on 160 voters who say they are very likely to vote in this year�s Democratic primary in the second congressional district)

If the Democratic primary for secretary of state were held today, would you vote for: 24% Ralph Mollis, 5% Guillaume de Ramel, 71% don't know or no answer (based on 323 voters who say they are very likely to vote in this year�s Democratic primary)

If the U.S. Senate election were held today, would you vote for: 38% Republican Lincoln Chafee, 36% Democrat Matt Brown, 26% don�t know or no answer

If the U.S. Senate election were held today, would you vote for: 40% Republican Lincoln Chafee, 34% Democrat Sheldon Whitehouse, 26% don�t know or no answer

If the U.S. Senate election were held today, would you vote for: 24% Republican Stephen Laffey, 47% Democrat Matt Brown, 29% don�t know or no answer

If the U.S. Senate election were held today, would you vote for: 29% Republican Stephen Laffey, 44% Democrat Sheldon Whitehouse, 27% don�t know or no answer

If the governor�s election were held today, would you vote for: 46% Republican Don Carcieri, 35% Democrat Charles Fogarty, 19% don�t know or no answer

If the lieutenant governor�s election were held today, would you vote for: 16% Republican Kernan King, 41% Democrat Elizabeth Roberts, 43% don't know or no answer

If the attorney general�s election were held today, would you vote for: 18% Republican William Harsch, 59% Democrat Patrick Lynch, 23% don't know or no answer.

1:15 PM | Comments (5)

February 7, 2006

Judiciary

Moving Beyond Loyalty to the Rule of Law Mixes Law & Politics

Donald B. Hawthorne

One of the most powerful long-term benefits of the Senate hearings for Chief Justice Roberts and Justice Alito was that the American people were reintroduced to the proper and limited role of the judiciary as envisioned by our Founders. In other words, conservatives were not simply seeking to confirm judges who will be activists - albeit conservative ones - from the bench.

This proper role for judges was discussed last year when Terry Eastland wrote an editorial entitled Chief Justice Roberts: The distinction between law and politics that the Judiciary Democrats do not respect lies at the heart of Roberts's approach to judging, in which he said:

On the final day of the Roberts hearings, Sen. Richard J. Durbin of Illinois tried one last time: "If you've made one point many times over...the course of the last three days," he told the judge, "it is that as a judge you will be loyal and faithful to the process of law, to the rule of law." But "beyond loyalty to the process of law," he asked Roberts, "how do you view [the] law when it comes to expanding our personal freedom?...That's what I've been asking."
And so, in various ways, had Durbin's Democratic colleagues been asking about such matters--ones "beyond loyalty" to the rule of law. In response to Durbin, Roberts stuck to the point he had indeed made "many times over." Reframing the senator's question so as to reach the core issue, Roberts said, "Somebody asked me, you know, 'Are you going to be on the side of the little guy?' And you obviously want to give an immediate answer. But as you reflect on it, if the Constitution says that the little guy should win, the little guy is going to win in court before me. But if the Constitution says that the big guy should win, well, then the big guy is going to win, because my obligation is to the Constitution. That's the oath. The oath that a judge takes is not that 'I'll look out for particular interests.'...The oath is to uphold the Constitution and laws of the United States, and that's what I would do."

That exchange crystallized the fundamental difference between John Roberts and the eight Democrats on the Senate Judiciary Committee. The Democrats believe a good judge will move "beyond loyalty" to the rule of law, if necessary, and seek to advance certain political outcomes--in Durbin's question, the expansion of personal freedom. Roberts dissents: He believes a good judge will distinguish between law and politics and stick resolutely to the law, regardless of the result...

As for just how Roberts will go about interpreting the law--and thus carrying out his oath--his testimony last week confirmed his earlier observation that he does not have "an overarching judicial philosophy."...

There is unease among some conservatives as to how Chief Justice Roberts will turn out. Yet it must be said that Roberts has made emphatically clear his view that a judge must be restrained by the law--the rules, principles, customs, practices, and understandings that define it--and must not allow the law to be infused with the judge's own political views and personal values. In other words, the distinction between law and politics that the Judiciary Democrats do not respect lies at the heart of Roberts's approach to judging...

Roberts took care on numerous occasions to emphasize the importance of the distinction between law and politics as it relates to judging. For example, in response to Lindsey Graham's question about what the judge regarded as the biggest threats to the rule of law today, Roberts identified only one threat--the "tendency on behalf of some judges to take . . . [their] authority and extend it into areas where they're going beyond the interpretation of the Constitution, where they're making the law"--the province of elected officials. He observed: "Judges have to recognize that their role is a limited one. That is the basis of their legitimacy. I've said it before and I'll just repeat myself: The Framers were not the sort of people, having fought a revolution to get the right of self-government, to sit down and say, 'Let's take all the difficult issues before us and let's have the judges decide them.' That would have been the farthest thing from their mind."

The failure of the Judiciary Democrats to applaud comments like these, their evident desire to have justices and judges who go beyond any loyalty to the rule of law to advance "progressive" visions, demonstrates how far their party has traveled since the middle of the past century, when Justices Robert Jackson and Felix Frankfurter still sat on the Court. Jackson (whom Roberts admires, by the way) and Frankfurter sought to preserve the judiciary "in its established but limited place in American politics," wrote Arthur M. Schlesinger Jr. in 1947. But Hugo Black and William O. Douglas aimed to settle particular cases, Schlesinger said, "in accordance with their own social preconceptions"--such that, as a Yale law professor of that era said, "the less favored in life [would] be the more favored in law." By the end of the Warren Court, political judging had become the norm for most Democrats. So it has been ever since, and so it is today that a nominee committed to judicial restraint like Roberts received the reception he did from the law firm of Leahy, Kennedy, Feinstein, Biden, Schumer, Feingold, and Durbin...

As a small contribution to the public debate, here are some previous postings on the Supreme Court nomination process, with an emphasis on the proper role of the judiciary, and certain other major judicial issues:

Here are two examples of how the Left views the same issues:

"We Are Going To Go To War Over This"
Viewing the Supreme Court Nomination Battle From the Far Left

Here are other postings on this site about the related issue of the judicial filibuster debate:

The Filibuster...Continued
The Injustice of Smearing A Fellow American For Political Gain
The Senate Judicial Filibuster: Power Politics & Religious Bigotry
Mac Owen's open letter to Senator Chaffee
Senator Mitch McConnell on the Judicial Filibuster
The Foolish Fourteen: An editorial by the former Dean of BU's Law School
A Power Line overview of the filibuster debate
Revisiting the Case for Janice Rogers Brown

All posting on the judiciary at Anchor Rising can be found here.

11:19 PM

Taxation

Guess What? Supply-Side Economic Policies Work...Again

Lawrence Kudlow writes about the latest positive economic news in The Silence of the Good News: An explosive jobs report and Bush says nothing? What�s up?:

Economic pessimists have had a field day ever since GDP was reported a week ago at only 1.1 percent for the fourth quarter. But the latest jobs report released on Friday blew them out of the water. Including revisions, January employment is a huge 317,000 above the initial December level. In fact, over the past three months, non-farm payrolls have increased an average 229,000 per month. That�s explosive. We�re on pace for another 2 million jobs in 2006, following gains of 2 million in 2004 and 2005. Wages are also picking up steam, and with gasoline prices falling, consumer purchasing power and retail sales are climbing.
So the question for the Bush Administration is this: What are you waiting for?

As soon as the breakout employment news was released, Salesman-in-Chief George W. Bush should have been in the Rose Garden giving it air time. He should have declared that jobs have continued to grow big time while the unemployment rate has fallen � all the way down to 4.7 percent. He then could have used this optimistic data to build his already strong case for extending the tax cuts on dividends and capital gains. These 2003 tax cuts, along with lower income taxes, are a good reason why jobs numbers are strong and the economy is prosperous.

What are they waiting for?

In his State of the Union message, Bush noted that recent tax relief has left $880 billion in the hands of American workers, investors, small businesses, and families � money that has been used to help produce more than four years of uninterrupted economic growth. People will spend their money more wisely than government will.

Bush ought to keep this drumbeat up. On Friday, the drums were deafeningly silent.

The latest numbers from the Congressional Budget Office show a clear supply-side effect where lower tax rates and higher after-tax rewards for work and investment have expanded the economy and created a huge surge of tax collections. Dan Clifton of the American Shareholders Association first reported that actual revenues from the lower capital-gains tax rate came in $46 billion higher over the last three fiscal years and $62 billion higher over the last three calendar years than congressional estimates. The Laffer curve is alive and well...

Good news is all over this still very new year. The "January effect" � the traditional January stock market rally that follows the traditional December sell-off � was the best since 1999. Same-store retail sales in January beat all projections with a 5.2 percent yearly gain. Car sales have had a nice comeback. And consumer confidence has now increased for three straight months.

Even wages are coming online. According to the Bureau of Labor Statistics, average weekly earnings are up 3.6 percent year-on-year. That�s the best since 2000. Then there�s the personal-income proxy derived from hours worked multiplied by wages. This measure registered a 6 percent gain in the year ending January, way up from 4.5 percent last October. With retail gasoline prices coming down 23 percent last fall, from $3.07 to $2.36, real wages are on the rise.

Pessimists can obsess about a mild housing slowdown, but expanding businesses and jobs are throwing off plenty of income. If only the president would jump on all this positive economic data, the pessimists would be exposed as data-deprived, hyperbolic, and just plain wrong. More, by truly seizing the economic moment, he would strengthen his case for tax-cut extensions. Right now, he doesn�t yet have the votes in the Senate. The battle must be joined...

If there is no turnaround, overspending and headline deficits will politically crowd out the vital tax-cut extensions that are so necessary to investor, business, and consumer confidence.

The supply-side economic growth plan is working. But the governing GOP coalition must close the circle on budget restraint. Economic growth and Republican political longevity depend on it. The president must do his part by turning up the volume on the good-news economic data.

A Wall Street Journal editorial entitled Tastes Great, More Filling (available for a fee) talks about further good news resulting from supply-side economic policies:

...As part of President Bush's 2003 investment tax cut package, the capital gains tax rate was reduced to 15% from 20%. Opponents predicted, as ever, that this would reduce tax revenue.
Not even close. Here's what actually happened. This 25% reduction in the tax penalty on stock and other asset sales triggered a doubling of capital gains realizations, to $539 billion in 2005 from $269 billion in 2002. One influence was the increase in stock values over that time, thanks in part to the higher after-tax return on capital induced by the tax cuts.

But another cause for the windfall was almost certainly the "unlocking" effect from investors selling their existing asset holdings in order to realize some of their profits and pay taxes at the lower rate. They could then turn around and buy new assets, hoping for higher rates of return. This "unlocking" promotes the efficiency of capital markets by redirecting investment into new and higher value-added companies.

It also yields a windfall for the Treasury. In 2002, the year before the tax cut, capital gains tax liabilities were $49 billion at the 20% rate. They rose slightly to $51 billion in 2003, then surged to $71 billion in 2004, and were estimated by CBO to have reached $80 billion last year -- all paid at the lower 15% rate. In short, the lower rate yielded more revenue.

The CBO also found that total tax collections from all "non-withheld tax receipts" -- typically, non-salaried income -- surged by 32%. Dividend tax payments are undoubtedly a big part of that jackpot. Since 2003 when Congress cut the tax rate on dividends paid out to shareholders to 15% from 39.6% (the top income tax rate that was also reduced to 35%), dividend payouts by American companies have roughly tripled. The government gets 15% of those larger payouts, which sure beats 35% of nothing.

None of this is good news for the Rubinomics crowd, who predicted deficit doom from the tax cuts...

All of which means that Senate Republicans would be wise for their own revenue sake to vote quickly to extend the 15% dividend and capital gains rates through 2010 from 2008, as the House has already done. Letting the rates increase would cause tax receipts to decline. Even better, Republicans should vote to make the rates permanent...

Another Wall Street Journal editorial, Look Who's Working (available also for a fee), comments further on the favorable economic news and how the mainstream media won't tell the full story to the American people:

...The economy seems to have begun 2006 with a roar.
Ford's announcement last week that it will lay off 30,000 workers was seized upon by the media as evidence that America is caught in a spiral of industrial decline. We'll be surprised if the news of a 4.7% unemployment rate, the lowest in 4 1/2 years, gets half the attention that the auto layoffs did. In any case, since the Bush investment tax cuts took hold in May of 2003, just under five million jobs have materialized...

Yesterday's report also confirms that America is creating more than 30,000 new jobs, mostly in new-age industries, every week. Real wages are higher now than at the peak of the 1990s boom. This is no burger-flipper economy. You also won't hear much about the fact that the black unemployment rate in America has tumbled in the past three years to 8.9% from 11.5%. Hispanics have seen their jobless rate dip to 5.8% -- nearly their lowest rate ever. Many Latino immigrants are filling employment demand at a record pace, suggesting that these newcomers are assimilating into the labor force fluidly and filling vital economic niches.

And so the American jobs machine rolls on. Will the critics now concede that the 2003 tax cuts were not just "giveaways to the rich?"

You can read more about supply-side economics in these two postings:

Economics 101: Never Underestimate the Incentive Power of Marginal Tax Cuts
Celebrating Reaganomics, 25 years later

11:10 PM

Energy

Energy Numbers, Part 2

Carroll Andrew Morse

Some of the numbers in the White House's description of the Advanced Energy Initiative worry me. It seems, judging by the amount spent, that a serious effort is being made with respect to coal and hydrogen fuel cell vehicles...

The President's Coal Research Initiative. Coal provides more than half of the Nation's electricity supply, and America has enough coal to last more than 200 years. As part of the National Energy Policy, the President committed $2 billion over 10 years to speed up research in the use of clean coal technologies to generate electricity while meeting environmental regulations at low cost.

The Hydrogen Fuel Initiative. In his 2003 State of the Union address, President Bush announced a $1.2 billion Hydrogen Fuel Initiative to develop technology for commercially viable hydrogen-powered fuel cells...

However, in other areas, the amounts being spent lead me to believe that the efforts are little more than symbolic...

The President's Solar America Initiative. The 2007 Budget will propose a new $148 million Solar America Initiative -- an increase of $65 million over FY06 -- to accelerate the development of semiconductor materials that convert sunlight directly to electricity...

Expanding Clean Energy from Wind. The 2007 Budget includes $44 million for wind energy research -- a $5 million increase over FY06 levels. This will help improve the efficiency and lower the costs of new wind technologies for use in low-speed wind environments...

The Biorefinery Initiative. To achieve greater use of "homegrown" renewable fuels in the United States, advanced technologies need to be perfected to make fuel ethanol from cellulosic (plant fiber) biomass, which is now discarded as waste. The President's 2007 Budget will include $150 million -- a $59 million increase over FY06 -- to help develop bio-based transportation fuels from agricultural waste products, such as wood chips, stalks, or switch grass...

Developing More Efficient Vehicles. ...Advanced battery technologies offer the potential to significantly reduce oil consumption in the near-term. The 2007 Budget includes $30 million -- a $6.7 million increase over FY06 -- to speed up the development of this battery technology and extend the range of these vehicles....

I know money doesn't solve all research problems. But money does allow the solvable problems to be solved a whole lot faster.

Now, think in terms of other numbers you've seen associated with the Federal budget. $148,000,000 on Solar power -- which could benefit the whole country -- is only about 2/3 of what the Federal government was going to spend on a single bridge in Alaska (and now that money is just being given to the Alaska state legislature). $44,000,000 for wind energy research? That's less than what was earmarked in the highway bill for constructing bike paths and buying up land to limit growth near route 95 within the State of Rhode Island alone.

The relative amounts allocated in this "major" initiative imply one or more of the following...
1. The administration is not serious about promoting these programs. These are token sums, intended mainly to score political points by making it look like the government is doing something.
2. Things like wind and solar and biofuels have no immediate future on the scale that the country needs. In other words, if wind or solar could solve our energy problems soon, wouldn't the government pouring the same amount of money into them that we are about to pour into buying digital-to-analog TV converters ($3,000,000,000) for everyone in the country?
3. The alternative energy problem is not really a research problem anymore. We already know how to make good windmills, and solar cells, and biofuels, and there's not a whole lot more to be done. The real problem, now, is disseminating the technology and bringing products to market.

My fear is that the problem is a combination of 1 & 3. Reducing regulation and supporting businesses that will build and sell the new technologies are what need attention, but talking about reducing regulation is not sexy enough to score political points, so the government spends most of its effort (and our dollars) on funding a few, high profile, but low practical reward projects.

6:48 PM | Comments (6)

Mainstream Media

A Note of Praise for Senator Chafee

Carroll Andrew Morse

After a session of yesterday's Senate wiretap hearings, Paul Mirengoff of Power Line asked a couple of tough questions to Senators Edward Kennedy and Richard Durbin. Rather than answering the questions, Senator Durbin responded by asking who Mirengeroff was working for. Pajamas Media has the video, Stephen Spruiell has a transcript. I'd be remiss if I didn't let the blogosphere know that not all elected officeholders share Senator Durbin's attitude.

A few weeks ago, I attended a press briefing following Senator Lincoln Chafee's meeting with Rhode Islanders for Judge Alito (here is the post that resulted). The "press pool" turned out to be rather small, a reporter from the Projo and myself.

I identified myself as being from a local political weblog called Anchor Rising. I am not sure if the Senator and his staff were familiar with Anchor Rising's content, but whatever the answer, no one questioned my credentials or my right to be there and Senator Chafee answered the two questions I asked with the same seriousness he afforded the questions asked by the professional journalist in attendance.

I hope that more of our elected officials follow Senator Chafee's example in this matter and find a way to welcome new media into the means they use to keep the public informed.

6:19 PM | Comments (3)

Liberalism

More on the Religion of Liberal Fundamentalism

Jonah Goldberg, in The New-Time Religion: Liberalism and its problems (available for a fee) offers this commentary:

Liberalism today has two maladies...The first...American liberalism is intellectually exhausted, or �bookless,� as New Republic editor-in-chief Martin Peretz recently called it. The second...Modern liberalism has taken on the trappings of a religion.
This second diagnosis runs counter to the reigning clich�s about the GOP�s becoming the party of theocracy. While it�s true that the Republican party and the conservative movement are invested in the agenda of religious groups, conservatism maintains a far clearer separation of religious and political impulses than liberalism, which often conflates the two into a single ideology. Like many spiritual movements, liberalism emphasizes deeds and ideals over ideas. As a result, when liberals gather there�s a revivalist spirit in the air, with plenty of talk about fighting the forces of evil and testifying about good deeds done...

It was the philosopher Eric Voegelin who...decried the liberal impulse as an attempt to...create a heaven on earth. The often spiritual nature of the environmental movement; the quasi-messianic treatment of Martin Luther King Jr.; Bill Clinton�s invocation of "covenants" with the American people; Hillary Clinton�s hibernating "politics of meaning,"...all of these are examples of what Voegelin would describe as the neo-Gnostic effort to make the hereafter simply here.

This is all the inevitable consequence of a political movement that deliberately turned its back on philosophy and its own intellectual history. A movement without ideas must be driven by something, and if ideas and principles aren�t it, what�s left is a stew of emotional and quasi-religious notions about "doing good."...

Liberals tend to deride conservatism for its faith in dogma. But the reality is that liberal dogma is settled while conservative dogma remains a work in progress. Indeed, the great debate of modern conservatism � crudely described as libertarianism versus conservatism, or freedom versus virtue � remains as unsettled today as it was when Frank Meyer coined the term "fusionism."...

Liberals had their own fusionist debate during the first three decades of the 20th century. American reformers envied Europe�s statist solutions to the "social problem."...

Liberals succeeded in jettisoning the historical baggage of liberalism by wielding the razor of Pragmatism, a "philosophy and a psychology perfectly tailored to progressive needs," writes Eric Goldman in his classic Rendezvous with Destiny. William James described his philosophy as an attitude of "looking away from first things, principles, 'categories,' supposed necessities; and of looking towards last things, fruits, consequences, facts."...

Some liberals understood the dangers of this approach early on. "The real trouble with us reformers," lamented J. Allen Smith, a leading progressive intellectual, "is that we made reform a crusade against standards. Well, we smashed them all and now neither we nor anybody else have anything left." But the anti-dogmatism of the Pragmatists won out and became unquestioned dogma for generations of liberals...

Of course, an ideology of anti-dogmatism isn�t less ideological than other worldviews; it�s merely harder to defend consistently, which is why many liberals choose not to try. Ever since Michael Dukakis insisted that voters should value his "competence" over Republican "ideology," Democratic politicians have been saying they don�t believe in "labels" � never mind extolling anything like a coherent political philosophy. But, as Bertrand Russell warned, the Pragmatic approach leaves its adherents no easily articulated principles for action other than power, preferences, and irrational "feelings."...

...it is an article of faith for liberals that they are right, they just need to update the evangelization effort by speaking in the vernacular a bit more...

And this is where the Janus faces of liberalism meet. William James invented Pragmatism to accommodate the belief that Darwin killed God; with it, religious truth became whatever believers willed. Liberalism therefore puts government in God�s throne to the extent that it believes that, as a matter of principle, no challenge is beyond the reach of Leviathan. From Woodrow Wilson on, central to the new liberals� project was to create, in Arnold�s words, a "religion of government," where the old dogma of a limited state with defined powers would be rendered obsolete in favor of an "organic" state and an oracular "living constitution."...

Here are three related postings:

"It Is Liberalism That Is Now Bookless And Dying"
Liberal Fundamentalism, Revisited
Rediscovering Civility and Purpose in America's Public Discourse

5:26 PM

Chafee, the NRSC, Etc.

Marc Comtois

George Conway over at Reconcilable Differences continues to focus national attention on the RI GOP primary and has some good stuff. Last night, he discovered that the NRSC continues its campaign of taking down stories on its web site that contain anti-Chafee comments. He also pointed to another NRSC pro-Chafee story that could use some commenting (wink wink). I wonder what would happen if anti-Chafee/pro-Laffey opinions continued to be expressed in the comments section of those stories? (BTW, George has also preserved many of the since-removed comments in this PDF).

In the meantime, a letter to the editor in today's ProJo exhibits the problem that Sen. Chafee is having by continuing to show indecisiveness and a lack of conviction:

For years, Sen. Lincoln Chafee has tiptoed between appeasing the radical wing of the Republican Party and maintaining his electability at home. However, with the Bush-Rove stranglehold over party discipline, Senator Chafee has lost his so-called independence. Rather, he has become better known for ruffling feathers in early opposition to Republican initiatives, but ultimately capitulating.

When it matters, Senator Chafee is nowhere to be found. His so-called conscience vote against Supreme Court nominee Samuel Alito was just a hollow gesture, aimed at mitigating his election-year vulnerability in an overwhelmingly liberal state.

Mr. Chafee may have taken a "stand" this time, but he has too often been on the wrong side when his vote could really have made a difference.

Sounds like the same arguments we've been making, but from the other side of the ideological spectrum.

Meanwhile, despite Sen. Chafee's apparent belief that "moderate" and liberal (Democrat) voters will vote for him in the GOP primary, the tightening race on the Democratic side can do nothing but hurt his chances. And while Sen. Chafee "hems and haws" and hopes that the NRSC can continue to carry his water, Mayor Laffey continues to be out front in his campaign against pork barrel spending.

10:30 AM | Comments (11)

Energy

Energy Numbers, Part 1

Carroll Andrew Morse

On this week's 10 News Conference on WJAR-TV, Jim Taricani observed that promises to increase American energy independence are made year after year, but that there never seems to be adequate follow through. One reason for this, I believe, is that people (including myself) don't really know what is possible. To help separate what is not being done because of unsolved technical problems from what is not being done because of a lack of political will, I pulled a few proposed numbers together to serve as a basis for discussion...

1. President George W. Bush offered some macro-scale goals for reducing America's foreign oil consumption in his State of the Union...

Breakthroughs...will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.

However, the day after the speech, Kevin G. Hall of Knight-Ridder Newspapers reported that the Secretary of Energy had already backed off of the President's remarks...

"This was purely an example," Energy Secretary Samuel Bodman said.

He said the broad goal is to displace foreign oil imports, from anywhere, with domestic alternatives. He acknowledged oil is a freely traded commodity bought and sold globally by private firms. Consequently, it would be very difficult to reduce imports from any single region, especially the most oil-rich region on Earth.

So, lets drop the "Middle East" part from the equation, and just focus on foreign oil imports. Is a 75% reduction in foreign oil imports to the United States by 2025 a feasible goal? If not, how much of a reduction would be reasonable by 2025?

2. Senator Lincoln Chafee has offered a target of his own (in conjunction with other Senators) focusing on overall consumption, not source-of-supply. Here is Senator Chafee in his response to the State of the Union...

I have joined with 11 other senators to introduce a bipartisan measure to reduce oil consumption by 2.5 million barrels per day within a decade, and by 2031 reduce oil consumption in the United States by half.

Is a 50% reduction in total oil consumption by 2031 a feasible goal? (And, is that a true reduction total oil-consumption, or oil-consumption per capita, projecting for the effects of 25 years of population growth?) If a 50% reduction in consumption by some metric is not feasible by 2031, then how much is?

3. Steve Laffey has approached energy policy with a different philosophy. He appears less interested in a central planning model, where the government declares what the ideal amount of oil consumption is and, instead, looks at what other countries have been able to do with alternative energy production. Here are some figures from Laffey's energy policy presentation...

Germany: Wind & solar now 10% of nation�s electricity and going to 20% by 2020.

Denmark: 20% of Denmark�s electricity is wind power; total installed wind power is greater than 3,000 megawatts.

Europe: Utilizes 35,000 megawatts of wind...Compare this to only 7,000 megawatts of wind used by the U.S.

Mayor Laffey believes that America is not getting as much of its energy from alternative sources as Europe is because our government's policies are out of synch with the needs of innovators and early adopters.

Mayor Laffey wants to extend a tax-credit available to producers of renewable power from 2 years to 20 years and increase the tax-credit amounts for purchases of hybrid vehicles and alternative home-energy systems. Is it reasonable to believe that changing the tax-code to lower barriers-to-entry can create a boom in alternative energy production? If not, what else needs to be done to spur the development of oil alternatives?

8:54 AM | Comments (6)

Former Centrist, Now Liberal Matt Brown Pulling Even with Always Liberal Sheldon Whitehouse?

Carroll Andrew Morse

If Jim Baron of the Pawtucket Times thinks these numbers are worth reporting, then I am willing to accept that they have some meaning...

U.S. Senate candidate Matt Brown says a new poll shows he has caught up with and passed his Democratic primary opponent Sheldon Whitehouse.

The poll of 502 likely Democratic primary voters conducted by telephone on Feb. 1 and 2 shows Brown with a 38-36 percent lead over Whitehouse in the three-way contest. Nowhere does the poll mention the third candidate, Carl Sheeler, although he is counted as "other" and is credited with 3 percent support.

However, I won't go as far as to endorse the statement below until I see the Brown University poll results scheduled for release later this month...

"A chapter of this campaign has closed," [Matt Brown Campaign Spokesman Matt Burgess] declared. "Sheldon Whitehouse had an opportunity to end it. If he had taken a strong stand on the issues and campaigned aggressively, he might have been able to end the campaign early" using his upper hand in name recognition.

7:45 AM | Comments (2)

Energy

Finding New Sources of Energy: Contrasting How Free Markets Allocate Economic Resources Without the Perverse Outcomes Generated by Government Meddling in the Marketplace

An earlier posting, Government Makes Us Pay Higher Gasoline Prices, offered another example of the perverse economic incentives that arise when the government meddles in the marketplace, violating our Founders' guidance about the importance of limited government.

Another posting, Government Meddling Creates Marketplace Distortions, Increasing Long-Term Costs, makes it clear that a meddlesome government can wreck havoc in other important areas of our lives like health care.

Returning to the issue of energy, do you recall how Congress worked itself up in the Fall of 2005 over allegations of "excessive profits" by the oil companies? How they brought oil company executives in for a public grilling?

As the current tensions with Iran are expected to continue, the price of oil is unlikely to decrease and that means the issue of oil industry profits will be with us for a while.

Once again, the public story about "high" oil industry profits masks another perversion created by government meddling in the energy marketplace. Scott Hodges and Jonathan Williams wrote about this in Who Profits at the Pump? Our government, for one:

Over the past quarter century, oil companies directly sent more than $2.2 trillion in taxes, adjusted for inflation, to state and federal governments � three times what they collectively earned in profits over the same time period. Yet some politicians say this is not enough and are proposing a new �windfall profits� tax to raise billions more for federal coffers.
Of course, as most economists agree, corporations don�t pay taxes, people do. Folks like us will really pay those new taxes, either through higher prices at the gas pump or through lower returns in our 401(k)s. Smaller profits for companies means smaller returns for our retirement funds.

...At a minimum, both politicians and the media are guilty of biting the hand that feeds them and, perhaps, a bit of hypocrisy: Oil companies hand over more than $35 million per year to newspapers for advertising, while the government profits far more from each gallon of gas sold than do the oil companies.

Today, Americans pay an average of 45.9 cents in taxes per gallon of gas. The federal gas tax is 18.4 cents per gallon while the average state and local tax is 27.5 cents. These taxes pumped more than $54 billion into federal and state coffers last year alone. Diesel taxes totaled $9 billion more.

Almost all gas taxes are levied at a flat rate per gallon, regardless of whether a gallon of gas costs $1.49, $2.49, or $3.49. So while industry profits go through booms and busts, government profits grow steadily larger.

While politicians decry large corporate profits, those profits generate large corporate income-tax payments. We estimate that over the past 25 years, the major domestic oil companies paid about $518 billion in corporate income taxes to Uncle Sam and state governments. Oil companies pay billions more to governments in off-shore royalties, severance taxes, property taxes, and payroll taxes � and the list goes on.

The last time this country experimented with a windfall profits tax was in the 1980s. Back then, the tax depressed the domestic oil industry, increased our reliance on foreign oil, and failed to raise a fraction of the revenue forecasted...

Because it receives so much tax revenue from this one industry, the government is subject to the same risk as any parasitic organism: If it eats too much it will kill the host...

Check out the graph in the referenced article for a visual on taxes paid by the oil companies.

So exactly what level of profitability constitutes "windfall profits"? Since most people have no clue what the actual rate of profitability (profits per dollar of sales) is for the oil industry, clarifying that basic information is a crucial first step toward having a rational debate.

Picking the starting and ending dates for calculating such rates of profitability can greatly influence the answers. The three studies highlighted below cover different periods of time and provide some sense of perspective.

First, ConocoPhillips offers these insights into the rate of oil industry profits:

An industry-wide study in the late 1990s [1997-1999] showed that oil industry profits amounted to an estimated 7.3 cents on each gallon sold...A multitude of factors can affect an individual oil company's profit on gasoline sales. Profitability factors include the efficiency of the firm's refining, distribution and marketing system, as well as its source of raw material. In times of rising oil prices, companies that own and produce a considerable portion of the crude oil used in their refineries may benefit more than other companies that must purchase most or all of their supplies on the open market...

The article also contains a graphic, based on a 2005 U.S. Department of Energy study, which notes that the cost drivers at the gas pump are affected by crude oil (53%), government taxes (20%), refining (18%), and distribution (including pipelines and trucks) & marketing (including service stations) (9%).

Second, this study of oil industry profitability, using Business Week data and based only on Q3 2005 peak profits when the price of oil was quite high, shows that even then the industry profitability of 8.2 cents on the sales dollar was both not significantly higher than the American industry average of 6.8 cents on the dollar and was below the profitability rates for 9 other major industries.

Third, scrolling down the ConocoPhillips link above shows that the 5-year average profitability during 2000-2005 for the oil industry was 5.8 cents on the dollar versus an average of 5.5 cents for all industries.

In other words, oil industry profits are not all that dissimilar from other industries in America. And that does not equal windfall profits.

Furthermore, the oil industry is fraught with high levels of technical risks and geopolitical risks which the marketplace typically rewards by providing higher rates of profitability. What makes the industry so risky? Developing new sources of energy involves lots of capital, long lead times, and high failure rates. These facts mean the industry is plowing some of the cash generated as current accounting profits back into long-term capital projects required to develop such sources. While these investments typically only show up in later years as expenses which reduce profits, that does not mean the cash is not being spent now. Any windfall profits tax would mean less current cash to invest in developing new energy sources.

(As an aside, with all the controversy about lobbying these days, this article notes how even a windfall profits tax bill could be twisted in the legislative process:

Even if the tax passes, though, it's not clear how much money it would raise. Companies could deduct the cost of exploration, investment in refineries or in alternative sources of energy, so they might never have to pay any "windfall" tax.

It is yet another example of how perverse government incentives can distort economic behaviors and outcomes.)

The free market is capable of allocating resources more efficiently. As the hysteria built last year in Washington, D. C. about oil company profits, John Tamny offered thoughts on The Boon of Big Oil Profits: Lawmakers must understand that cheaper fuel is on the horizon, describing how free markets allocate economic resources with an effectiveness never achieved by government:

Last week�s news that ExxonMobil had achieved record profits predictably elicited negative responses from special-interest groups and politicians. Anna Aurilio, legislative director at Public Interest Research Group, said "oil companies are making profit hand over fist as consumers are suffering."...
...the political class is at least publicly choosing to misread this very positive news. That ExxonMobil is presently thriving means it is successfully doing its part to help ease today�s oil shortage. Subpar earnings would logically be of greater concern to politicians given that low earnings would indicate big oil�s indifference to today�s high prices, and market belief that the problem cannot be solved.

But ExxonMobil�s profits, and the rise in its stock price since oil hit a low of $10 in 1998, indicates very clearly that the markets are aggressively solving the existing oil shortage through the reallocation of investment toward the oil industry. To stifle or tax earnings would be to distort the process by which expensive oil will in time become cheaper.

Back in 1980, in the midst of the last era of expensive oil, oil companies represented 28 percent of the S&P 500�s value. This investment boom stimulated exploration and led to an oil "glut" in the 1980s and �90s. In this new environment, cheaper oil and lower oil-company profits meant that investment moved elsewhere, and with this asset redeployment, oil-company share of the S&P 500 fell to 7 percent. The latter number arguably foretold today�s energy prices to the extent that they�re a demand, as opposed to a weak-dollar, phenomenon.

Notably, oil companies now comprise 10 percent of the S&P�s value, and the number will presumably rise as oil companies report earnings and are subsequently rewarded with higher valuations. This change in the S&P�s makeup heralds cheaper oil in the future.

Also, record profits attract imitators and innovators. Canadian oil company Suncor Energy is an example of innovation at work. It has devised a way to extract crude from oil sands, and the consensus is that this process will greatly expand the amount of proven reserves around the world. Happily, investors have rewarded Suncor; its stock is up 400 percent over the last five years, a timeframe in which the Dow has been flat while the S&P 500 and Nasdaq have been down.

Returning to the political response in Washington, leaders on both sides of the aisle will hopefully realize that they�re on the wrong side of the oil issue. Rather than calling oil executives to the carpet when they�re making "too" much money, they should instead celebrate the ability of markets to apportion investment properly such that scarcity is dealt with effectively.

Tar Sands Make Canada Energy Powerhouse is a specific example of what can happen when the government doesn't meddle in the marketplace:

Canada has become an energy powerhouse by separating petroleum from sand. Oil sands � also called tar sands � are found in an area almost half the size of Colorado spread across central Alberta, 240 miles northeast of Edmonton. The deposits account for roughly half of Canada's crude oil output, or about 1 million barrels of oil a day.
Canada estimates the sands will yield as much as 175 billion barrels of oil, making it second only to Saudi Arabia in crude oil reserves and enough to satisfy U.S. demand for at least a generation.

A group of congressional staffers recently toured Alberta, eager to learn whether the unusual oil industry here can somehow serve as a model for oil shale production in Utah, Colorado and Wyoming.

"If they can do it, we in Utah can do it," said Sen. Orrin Hatch, R-Utah. "Unconventional fuels like tar sands and oil shale are the real thing."

Unconventional oil � petroleum in any form other than the familiar fluid � has sat on the sidelines of the oil industry for decades. The major source of unconventional oil in the U.S. is shale, but all sources are getting a new look.

"Unconventional was a key word for 'uneconomic' in the past," said Tom Ahlbrandt, world energy project chief for the U.S. Geological Survey in Denver. "They are clearly not uneconomic any more."

Altogether, oil from oil sand costs somewhere between $15 and $20 a barrel to produce � on average, at least a few dollars more than pumping liquid oil.

But with oil prices above $60 a barrel and technological breakthroughs making it easier to harvest oil from sand, business is booming. Jones said the only thing keeping companies from expanding even faster is a shortage of skilled labor and the right equipment.

The free market does solve many problems and it is certainly more effective at creating sustainable economic value than the government. Isn't it interesting, though, how many people still think that turning to the government for solutions is the best or only way? One counter-argument to that position is highlighted here.

In a Wall Street Journal editorial entitled The Upside of the Oil Curse (available for a fee), Marc Sumerlin offers additional perspective on why it is important to resolve successfully the policy issue of reducing our dependence on foreign oil imports, how the pricing mechanism in the market can drive that outcome in the long-term, and how limited government actions could incent the marketplace in the short-term to accelerate the realization of the positive long-term benefits of the price mechanism:

Of all the long-term challenges facing the country, none touches as many areas of our national life as energy, particularly our dependence on a variety of unstable oil-exporting nations. It impacts our global competitiveness, our environmental policy and our foreign policy, both in the Middle East and in our own hemisphere. Moreover, our nation's major strategic competitor, China, is responding to a similar challenge by acquiring global energy assets and targeting its foreign policy on befriending a variety of oil exporters.
...history shows us that the price mechanism is not the problem. Though it has downsides, particularly in the short run, it beats every alternative. And in the long run the price mechanism is a major part of the solution to our energy challenge.

The history of the '70s and early '80s also explains the advantages of the price mechanism to both energy efficiency and the environment. The most rapid gains in energy efficiency in the U.S. took place when prices were very high. In fact, a sharp break in the energy intensity of the American economy appears to have occurred in 1973, the year of the first price spike. Prior to that date, the energy intensity of the economy was fairly stable, declining at just 0.4% per year. Since that date, the amount of energy needed to produce each real dollar of GDP has fallen by 50%, a decline of 2% per year. Unfortunately, the pace of progress slowed after prices dropped markedly in 1986.

Today, we are again seeing the positive incentive effects of high oil prices. The recent run-up has encouraged a new class of entrepreneurs and scientists to search for technological solutions. Nanotechnology is improving battery life, which will make hybrids cars and solar electricity more realistic. Historically costly alternative fuels like ethanol are suddenly looking practical, especially with advances in biotechnology and new processing technologies. A look to Latin America shows that rapid change can happen faster than commonly thought. Over the last three years in Brazil, the share of new car sales that can run on high-content ethanol fuel has risen from 4% to 67%. Its sugarcane-based ethanol is priced competitively with gasoline.

There is little doubt that technology and innovation, along with steps toward conservation, will ultimately solve the oil supply problem. But given the instability in the countries northwest of the Strait of Hormuz...it's less certain that this will come before an economy-crippling crisis.

It is here where Sumerlin proposes a government policy that, if done well (can this really occur?), could create the proper incentives in the marketplace:

Capital flows into new technologies and domestic production would be stronger if investors had more certainty about their potential return...Domestic oil producers, venture capitalists and entrepreneurs don't know whether the price of oil in the next decade will justify the costs of investments they must make today in new technologies and new production techniques...
Ironically, the best way to cap the upside to the oil price is to encourage new energy producing technologies by limiting the potential downside to the price...

The U.S. government could approximate a guarantee by taxing oil imports (and other petroleum products) dollar for dollar when the world oil price falls below $35...This policy has several advantages to our policies after the last energy price shock. It provides more certainty to private sector investors, which can provide a powerful multiplier to investment. It is likely to be used infrequently given the rapid development of Asia -- yet the plan still provides an incentive effect.

He also notes that this incentive-laden approach eliminates any reason for politicians and government bureaucrats to attempt to identify the best energy solutions independent of market forces:

The tax is neutral on how we move toward independence -- everything from domestic tar sand production to hydrogen to solar power would have an equal chance to succeed. New alternative technologies would lower carbon emissions without the drawbacks associated with hyper-complex worldwide regulatory schemes. Politically, the tax would be spread more evenly than the gas tax, since home heating oil used in the Northeast would be included as well as the gasoline used in the West. Finally, this policy would allow a reduction in inefficient regulations and subsidies that try to pick winners among competing technologies.
...the policy would increase the number of competitors oil companies face. Others would argue this is government interference with the market. True, but oil consumption comes with many externalities, from pollution to geopolitical concessions to the military expenditures needed to protect global supplies. Incorporating externalities into the price can increase efficiency. Others would object that this is a potential tax increase. If the tax were to kick in though, much of the burden would fall on foreign producers, especially if OPEC has pricing power. Even if the U.S. were in a period of economic weakness, the Congress could assure that consumers were held harmless by reducing another federal tax.

Allies...would benefit substantially from lower U.S. oil consumption when world prices fell and also from lower global pollution...the loudest cries would come from foreign oil producers, some of which are also important allies. But economic history teaches us that dependency on oil is harmful to the producers as well. The so-called "oil curse" has fostered corruption and made it hard for non-energy businesses to develop in these nations...

All Americans would be better off if our nation's economic, foreign and environmental policies are freed from dependence on unstable sources of oil. Our competitors abroad, and our enemies, doubt that we have the will to make such a break...

There is little evidence to suggest that such an effective public policy could be implemented successfully or, if done well upfront, could avoid the subsequent manipulations which adversely alter the incentives. Nonetheless, given the increasing risks with Iran and Venezuela as well as issues with Saudi Arabia, it would be worthwhile to debate publicly whether such a policy could provide a short-term bridge for our country when the risks of an energy supply disruption are highest to where the long-term power of the free market pricing mechanism could lead us to energy independence.

As additional reading material, Inviting a More Balanced Debate About America's Energy Policy provides further background on broad energy industry issues while all energy postings on this blog site, which can be found here, provide even more information on a variety of relevant energy policy issues.

12:11 AM

February 6, 2006

Civil Liberties

The Coercive Role of Government

D. W. MacKenzie wrote in the October 2002 issue of The Freeman: Ideas on Liberty, the monthly publication of the Foundation for Economic Education, about the coercive role of government:

I am government...
Coercion is both my vocation and my avocation; it is in my very nature to compel others to do that which they otherwise would not do. My nature should then be of great concern to you as I impinge on your liberty. My nature affects your life profoundly. Indeed, there is little in your life that escapes my grasp. I am also a mystery to many. Some see me as benevolent, though I murdered 119 million people in the twentieth century. Some see me as omniscient, though I face an insurmountable knowledge problem in trying to comprehend the society I seek to control. Some see me as an absolute necessity, though people have lived in societies without me. But those whom I use seldom recognize any of this. These naive convictions grant me an unwarranted place in society. These misconceptions have imposed great hardships on ordinary people, though they have served an elite of rulers well...

I benefit few at the expense of the many. Small groups organize easily, and large ones do not. Hence if I serve any interests other than those of actual rulers, I serve narrow interests. I grant monopoly privileges to influential industrialists and trade associations. I do this with tariffs and import restrictions that hobble foreign competitors. I do this with regulations that place burdens on new businesses. I do this with licensing laws that restrict access to professions. Of course, these interests pay me to get what they want. Sometimes they pay me simply to leave them alone.

My form is difficult to comprehend as well. I am vast and complex. No one can fathom me in all my complexity. I comprise a gargantuan array of agencies, statutes and regulations, and discretionary policies. No one would have the time or the intellectual capacity to know me fully even if he were to try. There is little point in trying anyway. One person can do nothing to me. No significant election has ever turned on a single vote, so voters have no obvious incentive to learn about me...

I am responsible for all the worst unnatural tragedies and unnecessary burdens that mankind has endured. Yet it seems that no one knows how to stop me. How can this be? My true nature is not easy to discern. When tragedy strikes, I am called into action. If I raise taxes to fund the effort to deal with crises, all can see my costs clearly. If I instead expand my authority to conscript resources, I hide my true costs, thus causing many to overestimate the net benefit of my actions. This instills unduly favorable beliefs about me in many minds.

...There have been successful efforts to restrain me for extended periods of time...In such places, people have prospered. But I have often succeeded in making strong comebacks. Some seek to limit my power with constitutional rules. However, there are strong reasons to doubt the efficacy of these rules. Persons who have power to enforce constitutional rules also have the power to flout them.

Why then do I ever fail?...There must be an answer, because I do sometimes falter...my failures are relatively uncommon. As difficult as the issues here are, they are vitally important to you because the continued success of free societies hinges on them. What is more important to you than that?

And here is why America's Founding was different, even though we have lost our way in recent decades.

10:47 PM

Judiciary

Elaborating Further on the Constitutional Principle of Federalism

Discussing the recent Supreme Court decision on Oregon's assisted suicide law, the Wall Street Journal editorial entitled Federalism, a la Carte (available for a fee) states:

Supreme Court watchers can be forgiven if they thought they were in a Twilight Zone episode yesterday as they read the 6-3 opinion upholding Oregon's assisted-suicide law against attempted federal encroachment. The High Court's liberal wing, joined by Sandra Day O'Connor and Anthony Kennedy, has suddenly discovered the Constitutional virtues of federalism.
Meanwhile, Justices Antonin Scalia and Clarence Thomas, along with Chief Justice John Roberts, argue in favor of the broad grant of federal power that the Attorney General was seeking in Gonzales v. Oregon. Count us with the federalists in this one, even if they are of the born-again variety.

The case concerned the Bush Administration's attempt to use the 1970 Controlled Substances Act to invalidate an Oregon statute passed in the 1990s that has allowed about 200 state residents to kill themselves with a doctor-assisted barbiturate cocktail. The state's voters have twice endorsed the statute in referendums. But former Attorney General John Ashcroft tried to block the statute on grounds that the drugs the state allowed to be used for the suicide had been abused under federal law.

Writing for the majority, Justice Kennedy unloads a paean to states' rights worthy of the folks at the Cato Institute. [See page 6 here.] The federal statute "manifests no intent to regulate the practice of medicine generally," he writes, and such "silence is understandable given the structure and limitations of federalism, which allow the States 'great latitude under their police powers to legislate to the protection of the lives, limbs, health, comfort, and quiet of all persons.'"

That sounds good to us, since a policy on assisted suicide is profoundly about health and local police powers. We don't favor assisted suicide as a policy, especially as evidence has grown about the way it has been abused to become euthanasia in Europe. But in the American system, there's no good reason that Washington should be able to trump states' rights in the matter.

...The Court's majority holds that the federal law in question did not give the Attorney General the authority to determine what constitutes "legitimate medical practice" for the entire country, but was something for the states to decide.

In his characteristically caustic dissent [see page 34 in above link], Justice Scalia zeroes in on the word "legitimate," and says it is a "naked value judgment" for the Court to decide that somehow the AG lacks such authority because the case involves a practice (suicide) the liberals presumably endorse. And he has a point, insofar as Justice Kennedy's opinion jumps through logical hoops to square this decision with so many of its previous cases upholding federal power against the states...

In his own brief dissent [see page 59 in above link], Justice Thomas cuts to the heart of the hypocrisy, pointing out that a mere seven months ago five of the six Justices in the majority in Oregon found broad federal authority under the same Controlled Substances Act to forbid the growth of medical marijuana, overruling a California law permitting the practice in Gonzales v. Raich.

Justice Thomas had argued for a more-limited federal authority in Raich, but in Oregon he seems to have cast what amounts to a protest vote for the minority. "I agree with limiting the applications of the CSA in a manner consistent with the principles of federalism and our constitutional structure," Justice Thomas writes. "But that is now water over the dam." In other words, he's not about to join the Court's liberals in ignoring their own precedents simply to get to their favored policy conclusion.

We sympathize with Justice Thomas's suggestion that this is another case of results-oriented jurisprudence in federalist drag. But then again, even liberals come to the right conclusion once in a while. And if this case has led them to have greater respect for state prerogatives on profound cultural issues that ought to be settled by voters, rather than judges, so much the better for our democracy.

...Results-oriented jurisprudence isn't any more admirable from the right than it is from the left.

In a subsequent letter to the editor (also available for a fee), Roger Pilon of the Cato Institute responds to the above reference to the Cato Institute and offers a clarification about the difference between federalism and states' rights:

In an otherwise excellent editorial commending the Supreme Court for rejecting a federal challenge to Oregon's Death With Dignity Act...you write that "Justice Kennedy unloads a paean to states' rights worthy of the folks at the Cato Institute."
We appreciate the ink, of course, but pause simply to note that "federalism" is not quite the same as "states' rights." Rather, it is at bottom about dual sovereignty concerning enumerated and thus limited powers -- and hence about pitting power against power for the sake, ideally, of liberty. The sad history surrounding "states' rights" points to the difficulty often of achieving that ideal. But more often federalism, or dual sovereignty, affords liberties unavailable in a unitary system, as the Oregon case illustrates. Thus, we stand rather less for states' rights than for federalism, a principle at the heart of the Constitution.

Mark Moller of the Cato Institute offers further commentary on the case, with particular attention to Justice Thomas' dissenting opinion.

8:42 PM

Judiciary

Reflecting on Justice Alito's Confirmation Hearings: Not All Law is Politics in Robes

In a January 14 Wall Street Journal article entitled Not All Law is Politics in Robes (available for a fee), Jonathan Adler offers these comments:

...Sen. Joseph Biden suggested in frustration that the Senate scrap confirmation hearings and simply debate the nominee's decisions as if they were considering legislation.
Mr. Biden's remarks are symptomatic of a larger problem: the assumption that judicial nominees are politicians with policy views that they will -- and should -- impose from the bench. This assumption is most brazenly made when interest groups characterize nominees as "for" or "against" specific policies...

This is not an entirely new phenomenon...Yet the scale of activist involvement in judicial nominations today is unprecedented...It doesn't hurt, too, that a high-profile campaign to block (or support) a Supreme Court nominee is an effective way to raise funds.

For most groups, opposition to Judge Alito is purely result-oriented...

Journalists have also treated judicial nominees like political candidates. Several media outlets conducted quantitative analyses of Judge Alito's decisions, detailing how often he held "for" or "against" a given side. Instead of analyzing his reasoning, and the extent to which it adhered to or departed from applicable precedent, the analyses tallied his opinions based upon their results...These analyses, in turn, were relied upon by senators seeking to tar Judge Alito as "for" or "against" given causes.

Setting aside the methodological problems...such analyses are not particularly probative of judicial fitness...The relevant question is not who won or lost but whether the judge applied the law in a neutral and consistent manner...

Viewing judges as life-tenured politicians who get to impose their own policy preferences furthers the downward spiral of judicial politicization. To be sure, judges themselves are not blameless. The Supreme Court's willingness to inject itself into controversies traditionally resolved by the political branches of government only encourages interest groups to devote resources to shaping the federal bench.

Reversing the trend will be difficult. In today's political climate, to say that the judiciary should not resolve an issue is itself viewed as taking a side. Ironically, the same senators who worry that Judge Alito shows insufficient respect for the political branches are aghast that he might leave some thorny issues for the elected branches to sort out...

...Judge Alito stressed that the process of judging -- the exercise of judgment rather than will -- is more important than a specific result. His testimony was a forthright reminder that not all law is politics in robes...

Which is why Wendy Long wrote the following in Justice Alito: What It Means:

The confirmation of Justice Alito is a great moment for the country for two reasons.
One: the triumph of quality. We have a new Justice with outstanding qualifications and experience, proving that the demagogues of the liberal left can no longer 'Bork' such outstanding nominees. The process is still nasty, and the demagogues still try their hardest, but the partisan judicial filibuster has failed...it is clear that his attackers are the real extremists.

Two: the triumph of the philosophy of judicial restraint. Americans are appreciating the virtue of judicial modesty and respect for democracy in our courts. The last few years, Americans have grown increasingly frustrated with out-of-control judges imposing a leftist agenda on them through judicial activism...Justices like Chief Justice Roberts and Justice Alito hold the promise of greater faithfulness to the Constitution and the laws enacted by the people through their elected representatives. Today, a significant step has been taken in restoring American self-government.

7:55 PM

Personal Notes

Quotes

Donald B. Hawthorne

One of those periodic clean-up efforts at home led to the discovery of some random quotes which I had been collecting. Here they are:

From a description of Carroll Quigley's The Evolution of Civilizations in the Liberty Fund Catalog:

The Evolution of Civilizations is a comprehensive and perceptive look at the factors behind the rise and fall of civilizations.
Quigley defines a civilization as "a producing society with an instrument of expansion." A civilization's decline is not inevitable but occurs when its instrument of expansion is transformed into an institution - that is, when social arrangements that meet real social needs are transformed into social institutions serving their own purposes regardless of real social needs.

From Lee Edwards in the book entitled Educating for Liberty: The First Half-Century of the Intercollegiate Studies Institute:

It is the duty of ISI to remind conservatives that in politics there are no permanent victories or defeats, only permanent things like wisdom, courage, prudence, and justice.

From Richard Epstein in his book entitled Skepticism and Freedom: A Modern Case for Classical Liberalism:

Legal and political institutions can take us only so far...There is no automatic safeguard against the scourges of totalitarianism. All that we can hope to do is improve the odds, and toward that end the most powerful bulwark is a determined citizenry that internalizes the basic lessons of human history.

From Michael Potemra in the July 14, 2003 edition of National Review:

Those lessons are clear enough - "private property and limited government" - but they are not self-enforcing. Their survival depends, as does much else, on human virtue.

From James Bowman in the the June 2004 edition of Crisis Magazine:

The debate - if you can call it that - about gay marriage is not really about gays but about marriage. What kind of thing is it? Those who take a sacramental view of the matter are horrified at the idea of gay marriage not because of "homophobia" but because it represents the culmination of the process of desacralization that began with the liberalization of restrictions on divorce...If two people pledging a union "until death do us part" is now a mere mockery of words that used to mean something but are now never uttered without the tacit stipulation, "or until I get tired of you," why shouldn't the mockery be extended further to make the two people of the same sex?
Far better, it seems to me, to get the law out of the "marriage" business altogether, since there is no more marriage anyway. Why not pass "civil unions" legislation and make it apply to all domestic partnerships, hetero- or homosexual? True, we would have to bite the bullet and accept that it's worth the huge increase in business to divorce - or de-unioning - lawyers just to underline our commitment to equal rights, especially "the right to happiness." But that's the price we must pay for our attachment to the doctrine of true psychic reality and, with it, the belief that feelings matter more than loyalty in marriage...

From Charles Krauthammer's June 2004 article entitled The Clinton Legacy:

Clinton's autobiography, appearing as it does in such close conjunction to the national remembrance of Reagan, invites the inevitable comparison.
The contrast is obvious.

Reagan was the hedgehog who knew - and did - a few very large things: fighting and winning the Cold War, reviving the economy, and beginning a fundamental restructuring of the welfare state.

Clinton was the fox. He knew - and accomplished - small things. His autobiography is a perfect reflection of that - a wild mishmash of remembrance, anecdote, appointment calendar and political payback. This themeless pudding of a million small things is just what you would expect from a president who once gave a Saturday radio address on school uniforms.

From George Will (unfortunately my notes say pages 366-367 but don't give the source):

An ancient Greek poet said, "The fox knows many things but the hedgehog knows one big thing."...But Reagan is much more of a hedgehog than a fox. He knows a few simple, powerful things. He understands the economy of leadership...He knows it is necessary to have a few priorities, a few themes. He knows how often - again, the peculiar patience of politics - you must repeat them when building a following. He knows what Dr. Johnson knew - that people more often need to be reminded than informed...Rhetoric is a systematic eloquence. At its best, it does not induce irrationality. Rather it leavens reason, fusing passion to persuasion. Rhetoric has been critical to Reagan's presidency.

From former Congressman J. C. Watts in the January 24, 2006 edition of the Wall Street Journal's Political Diary:

I can confidently say I saw this train coming years ago. The arrogance factor among some [Congressional] leaders, members and their staffs who were smitten with power and arrogance was starting to run amok even six years ago. By the way, if there are ever term limits on members of Congress, we might consider term limits on staff as well. It's all about access to power, and that access morphs quickly into greed.

From George Santayana's book entitled The Life of Reason, Volume 1:

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it. In the first stage of life the mind is frivolous and easily distracted, it misses progress by failing in consecutiveness and persistence. This is the condition of children and barbarians, in which instinct has learned nothing from experience.

6:56 PM | TrackBack (0)

It Would Be Wonderfully Amusing, If It Were Not So Completely Irritating & Insulting

I received a fund-raising letter last week from Senator Lincoln Chafee. Here is the paragraph to which my response vacillated between irritation and utter amusement at its words and tone:

My opponent in the Republican primary, Stephen Laffey, is preparing to run a negative campaign because the only way he can win is to attack me. You see, his divisive, confrontational approach has led to acrimony and costly law suits, but little in real results for the City of Cranston. He can't run on his record so he's going to attack mine.

Tone deaf. Chafee apparently doesn't understand that Laffey need not attack him. All Laffey has to do is speak up about what he believes in and the stark contrast with Chafee cannot be missed. Simply pathetic.

Here is to voting for change.

6:41 PM | Comments (10)

National Review: "Dump Chafee," Choose Laffey

Marc Comtois

It's news when the editors of a major conservative/Republican publication endorse a candidate. As such, I think it worthwhile to post the editorial in its entirety for the benefit of Anchor Rising readers.

"I want to support President Bush's choice to the Supreme Court," said Sen. Lincoln Chafee of Rhode Island on January 30. "The president did win the election."

It was a bizarre statement because Chafee not only refused to support Bush's most recent choice for the Supreme Court � he was the single Republican to oppose the confirmation of Samuel Alito � but also refused to support Bush's reelection in 2004. On Election Day, he wrote in the name of Bush's father, in "symbolic protest" of the current president's positions on abortion, gay marriage, oil drilling, tax cuts, and Iraq.

One wonders: Why is Chafee a Republican at all? The senator appears none too sure himself. In 2004, when USA Today asked whether he'd consider switching parties, Chafee replied, "I'm not ruling it out."

The life of a Rhode Island Republican certainly is not an easy one � John Kerry won the state by 21 points. It would be unreasonable to expect Chafee to earn a 100-percent rating from the American Conservative Union. Yet his lifetime score of 41 percent is pathetic. No Republican senator, including Pennsylvania's Arlen Specter, ranks lower. In December, the Boston Globe observed that Chafee's "liberal positions would be well-suited for a centrist Democrat." True enough � except that several centrist Democrats actually supported Alito, putting them to the right of Chafee on one of the most important votes they will cast this year.

Lincoln Almond, the former governor who appointed Chafee to the Senate in 1999 � and a Republican who knows how to win elections in Rhode Island � said that he was "disappointed" in the senator's decision to oppose Alito. Indeed, Republicans in the Ocean State ought to be so thoroughly disappointed in Chafee by now that they refuse to vote for him this year.

The argument that conservatives should support Chafee rests entirely on the assumption that he's the only Republican who can win in Rhode Island. This logic may be what has led the National Republican Senatorial Committee to continue throwing resources behind him. The assumption may or may not be true, but, whatever the case, it is far from clear that the GOP � to say nothing of conservatives � gains anything from Chafee's continued presence in the Senate. When votes really matter, he can't be counted on. Positions such as the one he took on Alito allow Democrats and the media to speak of "bipartisan opposition" to the Bush administration. And if the GOP's majority ever depended on Chafee alone, there's every reason to believe he'd bolt the party, just as James Jeffords of Vermont did in 2001.
There is an alternative. Steven Laffey, the Republican mayor of Cranston, is running against Chafee in the September primary. His underdog campaign has shown both pluck and promise. Laffey has a track record of winning Democratic votes: That's the only way he could have been elected two times as mayor of Cranston, a city of about 80,000 residents, most of them Democrats. But on key issues, Laffey is a conservative: He supports tax cuts and the war in Iraq, opposes corporate welfare and other forms of wasteful spending, and is pro-life. The Club for Growth has decided to back him. His campaign has unfortunately chosen to bash "Big Oil" in some of its early advertising � but, as we said, it's difficult to be a Republican in Rhode Island.

Even if Laffey were to win the primary but lose the general election, beating Chafee would send a helpful message to the kind of Republican who thinks Chafee's "independence" is something to admire and emulate. (Susan Collins and Olympia Snowe of Maine come to mind.) That message: that Republican voters will not be taken for granted just because they are in the minority in their state. Then there's the tantalizing possibility that Laffey might actually win both the primary and the general election. It's a chance worth taking. What do conservatives have to lose? The worst possible outcome is only that Rhode Islanders will trade a virtual Democrat for a real one.

9:45 AM | Comments (6)

February 5, 2006

Senator Chafee on 10 News Conference: Segment 4

Carroll Andrew Morse

Here is a brief summary of Senator Lincoln Chafee�s February 5 appearance on the WJAR-TV (Channel 10) public affairs program 10 News Conference (Sundays, 6:30 am)�

Jim Taricani asks about Steve Laffey�s criticism of Chafee over Alito. Is he concerned that he could lose the primary?
Senator Lincoln Chafee answers that Mayor Laffey is the Democrats� favorite person. Chafee says his key to winning is high turnout and unaffiliated voters.

Bill Rappleye asks if that means winning requires convincing non-Republicans to vote in the Republican primary.
Chafee answers that he�s not giving up on anyone, and that he represents core Republican values, like civil liberties and strong environmentalism. Chafee acknowledges that Republican voters are mad at him.

Rappleye asks if the President has offered assisstance.
Chafee replies that he�s offered to help.

Rappleye asks if he wants the President to come to RI.
Chafee replies that he�s not hypocritical. He doesn�t want the President to come if he doesn�t support the President's agenda. McCain might come in support of Chafee, however.

Finally, the panel asks about the Senator�s legislative style.
Chafee answers that he is definitely less confrontational than Steve Laffey, and works hard to bring people to together. When asked for example of this, he cited the �Gang of 14� deal on filibusters and judges that had prevented �the shutdown of the Senate�.

8:33 AM | Comments (6)

Senator Chafee on 10 News Conference: Segment 3

Carroll Andrew Morse

Here is a brief summary of Senator Lincoln Chafee�s February 5 appearance on the WJAR-TV (Channel 10) public affairs program 10 News Conference (Sundays, 6:30 am)�

Jim Taricani asks about the �addicted to oil� line in the President�s State of the Union. Something similar is mentioned every year. Does Congress have the political will to really do something this time?
Senator Lincoln Chafee thinks there was more emphasis and more priority this year. The first step is raising the milage standards on cars, but the standards are voted down in Congress each year. The administration doesn't support raising mileage standards.

Bill Rappleye asks if the rhetoric matches reality.
Chafee answers that it may be changing.

Taricani asks if there will be real change on mileage standards.
Chafee: �Time will tell.�

Taricani asks what specifically has the Senator done on energy policy.
Chafee answers that he has sponsored legislation that would help reduce oil consumption, mentions ethanol.

Rappleye asks if the Senator�s antagonism of the White House makes it difficult for him to get his bills through.
Chafee replies that it�s a misconception that he doesn�t get along with the Republicans in the White House or Congress. The highway bill and the base closing commission show how well he works with other Republicans. During the time of the Alito Confirmation, other Republicans were asking what they could do to help him in RI, specifically mentions John McCain in this context.

Taricani asks about contact with administration during the Alito hearing. Did they give a wink that it was OK to vote against Alito?
Chafee: No. The administration wanted 100% Repubican support, especially to avoid the "bipartisan opposition to Judge Alito" meme.

Rappleye asks about the pressure brought to bear.
Chafee answers that they were concerned about potential impact on the primary.

Rappleye asked who specifically talked to the Senator.
Chafee answers that Elizabeth Dole and Andrew Card tried getting him in line.

Rappleye asks if the NRSC threatened to withhold funding.
Chafee: Not the NRSC, but some donors have.

8:05 AM | Comments (1)

Senator Chafee on 10 News Conference: Segment 2

Carroll Andrew Morse

Here is a brief summary of Senator Lincoln Chafee�s February 5 appearance on the WJAR-TV (Channel 10) public affairs program 10 News Conference (Sundays, 6:30 am)�

Jim Taricani asks about the �eavesdropping without a warrant� program. The New York Times revealed the program to the public. Should the NYT be required to give up their sources.
Senator Lincoln Chafee answers no, that�s what newpapers do.

Taricani asks even if it damaged the war-on-terror.
Chafee answers that he doesn�t believe that it did.

Bill Rappleye directly asks how the Senator feels about the surveillance program.
Chafee answers that we need to be very careful in war time. Under various WWI acts, 800 people were detained. We must remember that we're fighting to protect our liberties.

Taricani points out that polls show most Americans agree with the surveillance program. Shouldn�t the government have some latitude in this? Rappleye adds particulary when overseas communication is involved.
Chafee answers that the �Law is the law�. Post-September 11, Congress has changed laws addressing surveillance, and warrants are still required.

Rappleye asks if we should end wiretapping.
Chafee answers �or change the law�.

Taricani asks doesn�t FISA have provisions for warrantless surveillance.
Chafee: Then why work outside of FISA?

Taricani asks if President Bush is a threat to the civil liberties of Americans.
Chafee answers that some curtailing of civil liberties during WWI was popular. We have to be careful with civil liberties, and we have now have cases where American citizens have been detained for 3 years.

Taricani asks about the rendition of prisoners to foreign countries.
Chafee answers that all Americans should be following the Hamdi and Padilla cases closely.

7:35 AM

Senator Lincoln Chafee on 10 News Conference: Segment 1

Carroll Andrew Morse

Here is a brief summary of Senator Lincoln Chafee�s February 5 appearance on the WJAR-TV (Channel 10) public affairs program 10 News Conference (Sundays, 6:30 am)�

Jim Taricani asks about the Alito nomination, why come out against after it was obvious he would be approved?
Senator Lincoln Chafee answers it was obvious all along that any President Bush nominee who did well at the hearing would go through because of the Republican 55 vote-majority in the Senate.

Taricani asks why it took so long to decide, given Alito�s pro-life leanings.
Chafee answers that the behavior of Supreme Court Justices is hard to predict. David Souter, for example, originally opposed by pro-choice people has voted pro-choice. The nominee's testimony must be examined carefully.

Taricani asks about the the Projo's "Lincoln Hamlet" editorial.
Chafee answers that his decision came only 2 business days after Senator Reed�s decision.

Bill Rappleye asks why vote against Alito, when you�ve voted for 13 pro-life judges.
Chafee answers 1) the Supreme Court is different and 2) Alito was replacing Sandra Day O�Connor, whereas John Roberts replaced William Rehnquist. The �health of the mother� exception in abortion cases is headed for the Supreme Court, and Alito may be a critical vote in these cases.

7:13 AM

February 4, 2006

R.I. mayor defies GOP in Senate bid

NRSC Delete's Anti-Chafee Comments

Marc Comtois

I recently posted about the angry comments being expressed by conservative Republicans in the "comments" section of an anti-Laffey story that was promoted by the National Republican Senatorial Committee on behalf of Sen. Chafee. Apparently, rather than deal head-on with discontent being expressed by their conservative base, the NRSC has instead "bravely" decided to remove the original story and the 100+ anti-Chafee comments associated with it. (Thanks to commenter "ballottra" for the heads up).

The original story was released around Dec. 19 (if memory serves) and now it is gone from the list of news releases. It seems it is the only such story removed. Thankfully, I have preserved a few of the comments in post I mentioned before.

However, the NRSCs attempt to CENSOR the legitimate grievences of GOP members concerned with the NRSCs actions in the Laffey/Chafee race were poorly implemented. Though the story and old comments are gone, new comments can still be be made here. I respectfully request that conservatives do so. I wouldn't be surprised if the NRSC eventually figures it out and takes even this meager avenue of protest away. If so, we will have to come up with another way to convey our displeasure.

Finally, a question: Does the NRSC actually believe it willl be able to issue pro-Chafee press releases with an open comments section without getting anti-Chafee comments?

For what it's worth, here are a couple stories being promoted on the NRSC website concerning the RI Senate race that seem appropriate venues for commentary...

GOP Leaders Rally Around Chafee

10:45 AM | Comments (3)

Casino on the Johnston Landfill?

Carroll Andrew Morse

Arthur Kimball-Stanley reports in today's Projo that a casino developer is interested in building a casino on or near the site of the Johnston Landfill (will the hook be "The Stinkiest Casino in the East"? How about "Johnston: A Place for Solid Waste and Clean Fun")...

The casino project pitched for [Johnston] Thursday night includes a 27-hole golf course and an upscale hotel, town officials who heard the presentation said yesterday....

Town Councilman Ernest F. Pitochelli said developer David H. Nunes, representing a company called Ajax Ventures, presented the possibility of building a casino resort on or near the industrial park built by the Rhode Island Resource Recovery Corporation, which operates the state Central Landfill "His reason for being there," Pitochelli said, "was that he wanted the council to work with the company to help get the people to vote in favor of a casino in town."

Mr. Nunes refused to disclose the name of the company he and Ajax Ventures represent. However, unless there's some uber-Machievellian machinations going on, it's pretty clear that this effort is not associated with the efforts of Harrah's or the Narragansett Indian Tribe...

Harrah's shouldn't have a monopoly on developing a casino in Rhode Island, Nunes said, and that is why he is talking to Johnston officials. "There is potential for competition in building a casino in Rhode Island," Nunes said yesterday, "and we're looking for a receptive community."

Nunes would not discuss anything about the company he represents, refusing even to name it. "We're going to see if this jells, if it gets legs, and then we'll pursue it," he said.

There is no mention of whether any Indian tribe is involved, or what an Ajax-associated Constitutional amendment would look like, and whether it would simply legalize gambling in Rhode Island, or try to carve out a state-run monopoly for one company.

Finally, the article mentions a recent poll taken showing strong public support for a casino in Johnston...

Nunes told the council that the company he represents is interested in Johnston because of its location, Russo said. Also, a pollconducted by an unnamed Oregon company indicated that town residents were more supportive of such a proposal than were the residents in any of the other area communities polled, Nunes said.

Gerard Scotti, a town resident who answered the poll, said the questions were skewed to reflect positively on the casino. He said most of the questions referred to the financial problems that the town faces, and asked whether residents would mind having a casino contribute to the town's coffers.

In the spirit of public responsiveness that casino developers always seem to be touting, let's ask them to add one more question to any poll about establishing a casino...

If a destination casino were built in RI, would it be better if it contributed 25% of its profits or 60% of its profits went to the state for the purposes of improving education and providing tax-relief?

8:37 AM | Comments (3)

February 3, 2006

Beacon Mutual Revisited

Marc Comtois

I've tried to keep my eye on Beacon Mutual's bid to privatize--and thus remove government oversight--and have posted a couple times (here & here) on why I'm not sure it's a good idea. The Governor isn't too keen on it either. In short, BM is a government-funded entity that was created to serve a specific purpose--underwriting Workman's Comp. for small businesses-- and the move to privatize doesn't seem like it would be beneficial for RI employers. With no State oversight, BM would be allowed to make their own rules. For example, they could set different standards for different companies depending on (let's just say) whether or not one of the BM board members happens to own that company. That was a hypothetical until yesterday (read-on).

Meanwhile, Beacon Mutual has already created a private company--on its own--in anticipation of receiving the go-ahead to expand out of state. Their stated goal for such a move is to cover the employees of RI businesses who work outside of RI. Sounds relatively benign, but as my previous posts indicate, there are questions regarding whether or not there may be some alterior motives.

Despite these concerns, the BM move from public to private has already been approved by the RI Senate. And while the ProJo tries to undersell the brewing controversy (notice the headline and especially the "lead") by pointing out that an independent audit determined there is no wrongdoing going on at BM, the real story is that there wasn't enough information provided by former Manpower Pres. Sheldon Sollosy--who also served as the BM Chairman--to come to any conclusion.

Sollosy has resigned as BM Chairman as it appears that he took advantage of that position to help him get a break on insurance rates for his business, Manpower, Inc. He did this by simply not providing the correct information on payroll figures to BM auditors. They, in turn, did not take appropriate action as outlined by the bylaws.

Finally, Governor Carcieri recieved and is publicizing a letter from a BM board member who is in disagreement with the actions of the majority of her fellow members. Dan Yorke (who has been all over this) has the letter as well as some more information regarding Sollosy.

It's a little complicated, but if you're interested, read the items to which I linked. The question is: is it a proper--or wise--use of tax-payer dollars to allow this public-to-private move? How much will the individual board members benefit from this maneuver? What are their motives and--in light of the Sollosy resignation--can they be trusted?

I'm not well-versed in the financial world (Don H.?), so I'd be interested to see if anyone thinks there's any "there, there."

4:30 PM | Comments (2)

Conservatives Smack the NRSC

Marc Comtois

A couple days ago I mentioned the dissonance occurring over at the Nat'l Republican Senatorial Committee website regarding their support for Sen. Chafee. In particular, I pointed to a story from December in which they tried to make Sen. Chafee out to be more conservative than Mayor Steve Laffey.

I also suggested reading the comments section of the story to get a flavor of how angered people were for the NRSCs support of Sen. Chafee--especially in the wake of his "No" vote against Justice Alito. Yesterday, George Conway at the Reconcilable Differences blog (hosted by National Review Online) also called attention to the same story over at the NRSC. With such national exposure, the comments selection ballooned...and things aren't going so well for Sen. Chafee or the NRSC. In short, many of the commenters claim that they will be sending money directly to candidates because they don't feel as if they can trust the national organization to stick to conservative/Republican principles. Read on for a sampling of just the most recent entries....

First, I'll start with someone willing to put his name out there:

Hello NRSC:
I am a native Rhode Islander (Newport) and I am appalled by the support that you are giving to Senator Chafee. What does it take to get support from you folks, total and complete disloyalty to the Republican President? Maybe the next thing you will do is send money and support to another one of President Bush's strongest supporters ------ Ted Kennedy? I have never been so totally disgusted by your fawning support and encourgement to someone as disloyal as Senator Chafee. He is a DEMOCRAT in Republican clothing.

However, I would like to thank you for offering me this time to vent my anger and, well, I don't think you should call me for any financial support this year. I will be sending most of my financial contributions this year to my very deserving alma mater------ Tulane University. Tulane will certainly put my money to much better us than you ever could.

Harshly,
David Bethune
Still Loyal, if a quite upset Republican
Newport, Rhode Island

The rest are mostly anonymous, and a couple comenters (I think) have been around these parts.

"I have observed Chaffee's [sic] performance in the Senate and find no resemblance between him and a conservative. I will no longer donate money to the party, only to specific candidates because I can't trust the party to see that the support goes to the right person. How the national leadership of this party can support such a contrarian personality is beyond comprehension. Laffey may not be all that I would like, but he certainly is more of a conservative than Chaffee [sic] and more worthy of national party support." -- Magnus

"Proper criticism of Laffey's use of tax increases to balance the Cranston budget would require far more detail about the situation he inherited on taking office and the limitations imposed on him by the liberal state legislature.

Any such criticism is almost totally irrelevant, however, when assessing whether to support Laffey or Chafee for the U.S. Senate. It�s a completely different role, and comparing Laffey's platform positions against Chafee's voting record, Laffey wins hands down in terms of faithfulness to the Reagan archetype.

You know what else isn�t a cornerstone of the Reagan legacy? Publicly announcing before a presidential election that you, a Republican Senator, do not support and are not voting for your own party�s candidate. I also doubt that the Gipper would look favorably on Chafee�s opposition to the Alito nomination. But for some bizarre reason, Lincoln Chafee can freely violate the 11th Commandment, and pretty much oppose every other major conservative program put forward in the Senate, and yet never has to worry about losing the support of the NRSC.

Get a clue already. Conservatives would rather see the GOP run a principled candidate and risk losing rather than continuing to put up with a fickle RINO who constantly undermines his own party. Dump Chafee!" -- Fletch

"I won't send another dime to a Republican organization until they stop supporting Democrats like Chaffee. He needs purged from the party. Period. Laffey CAN'T be worse. Chaffee didn't even vote for our President for goodness sakes.

He's worthless. Don't necessarily work against him, but what have the Reps gotten for their money? We are better off without people like him." -- octagon999

"Wise up NRSC. No $$ till you step down from your cynical support of this uber-RINO." -- Bradmaui

"Talk about poor timing - not five minutes after I donated to NRSC, I received information about Chafee vs. Laffey and regretted my donation. I have requested a refund. I should hope that the NRSCs goal is to put conservatives in office who are interested in advancing the country and the conservative cause, not just in keeping life-time incumbents!

I want my money back so I can contribute directly to Laffey's campaign fund. If he turns out to be another RINO, then he should get thrown out, too!!" -- TroyL

"I will also have to add myself and my husband to the list of no more money to the party, only SPECIFIC REPUBLICAN candidates, until we start policing our own ranks. If Chafee gets reelected and switches his party affiliation, I wonder what you will have to say for yourself then. Shame on you NRSC." -- packy

"I have no idea why everyone is so upset. Lincoln Chaffee is the greatest Republican since Jim Jeffords!

Oh. Oops." -- Der Tommissar

"It has been my custom in the past to contribute what I can, which is not as much as I would like.

This year my contribution will go directly to Steve Laffey.

How you can support a liberal Democrat in Republican's clothing against Steve is beyond me. Steve may have his flaws, but they pale when compared to the incumbent disgrace to the name of our party's greatest president." -- JimT

"Senator Chafee's decision to vote against Samuel Alito's nomination is reason enough to pull him, but even if it were not Chafee has provided many other reasons over the years. Is it even clear that he would vote for Republican control of the Senate if it came down to him alone? The NRSC need not actively oppose him, but it should not actively support him." -- Hunter

"I too will cease donating to the NRSC until they start supporting real republicans and not RINOs like Chaffee.
The earlier comment about Jim Jeffords was quite illuminating. And supporting Arlen Specter over Pat Toomey was another mistake.
I will instead donate selectively to conservative, republican incumbents or challengers, either directly or through the Club for Growth." -- Bruce McDonald

"have contributed some not inconsiderable amounts of money over the years to Republican candidates and causes, but more to conservative ones. I am thus on every solicitation list there is. I will never, ever give another penny to any national Repubublican organization that supports candidates like Lincoln Chafee, who is a despicable hypocrite and a dedicated enemy of every principle I stand for. When will these morons at the NRSC get the message? Chafee and his ilk are the classic New York Times Republicans, who are "moderate" [read liberal] and, of course, therefore condemned to the polite, loyal minority, and thus allowed access to the best parties on the West Side and the Vineyard. Get these types out now." -- comitatus

"Sen. Dole, what can you possibly be thinking? I have two words for you: Jim Jeffords (I-DNC).

In 2000, Jim Jeffords was struggling for re-election. He implored the GOP to (1) flood his campaign with badly needed money through the RNC and NRSC, and (2) vote to renew the Northeast Dairy Compact (something they were not inclined to do) so he would have something to show for the previous six years. In exchange, he would remember who kept him where he is, and vote accordingly. His fellow GOP senators ignored their better judgment and did both.

On May 24, 2001, less than seven months after his successful re-elction, he ditched the party in a fit of pique, caucused with the Democrats, and made Tom Daschle the new majority leader with a 50-49-1 majority. Not to leave it at that, he also refused to return a dime of the money both the party and his Republican constituents had sent him while he ran on the GOP line.

Now, five years later, after having fought tooth and nail to regain and strengthen their majority, the GOP and Senator Dole are setting themselves up for yet another backstabbing by yet another New England RINO. Does anybody really think Lincoln Chafee will show any more gratitude than Jeffords did for having his fat pulled out of the fire? Better to cut bait and support a real Republican; as the saying goes, "Fool me once, shame on you..."

...it does merit adding that the NRSC doesn't endear itself any further to the rank and file by using its official site to dump on Steve Laffey. Folks, start making overtures to the Mayor while you still can; he won't always be receptive, especially if you maintain your present course.

(Needless to say, neither will we...and you need us more than you need Lincoln Chafee.)" -- Goober

"At a time when Republican governors control 9 of the 19 "blue states" (Massachusetts, New York, California, Rhode Island, Vermont, Maryland, Hawaii, etc.) there is no excuse that "a Republican simply cannot win" without taking unprincipled and damaging positions.

Shame, shame for taking an active role in opposing Steve Laffey. This is beyond ridiculous." -- slowpitch

"You guys aren't doing yourselves any favors by ignoring this page. It's a dangerous thing to let angry people vent while you jam your thumbs in your ears and sing, "LA LA LA LA!" Don't open an avenue of communication if you're going to blow off the feedback you get from it.

I'm good and riled. And I'm in Providence." -- ballottra

7:30 AM | Comments (8)

Taxation

What's in a Tax Reform?

Don Roach

RI House Leaders unwrapped a slew of tax reforms entitled the "Taxpayer Relief Act of 2006." Here are the bullet points of the nine-point proposal:

Personal Income Tax Reduction: Instead of the current rate of 9.9% of their federal taxable income, which is then subject to adjustments, deductions, and tax credits, taxpayers could elect to pay 7.5% of their Adjusted Gross Income (AGI), but without any of the reductions. Over the course of five years, the flat rate would be gradually reduced to 5.5% to make it closer to the rate that taxpayers would owe if they lived in Massachusetts.
Sales Tax Holiday: This proposal would institute a sales tax holiday weekend on August 12 and 13, 2006.
Comprehensive Sales Tax Review: A new study commission would aggressively investigate the state sales tax and whether some changes to it are necessary.
Increase Earned Income Tax Credit: The refund that low- and moderate-income taxpayers could get as a result of the earned income credit on their state income tax returns would go up.
Energy Star Tax Break: This proposal would institute a weeklong sales tax holiday in March 2007 for any item under $2,500 that carries the federally designated "Energy Star" label for energy efficiency.
Car Tax Phase-out Acceleration: The phase-out of the auto excise tax would continue, but with changes that would get more relief to taxpayers sooner.
Property Tax Relief: The refundable income tax credit that elderly, disabled, and qualified low-income residents receive under the property tax "circuit breaker" law would increase.
Transparent Income Tax: The Tax Administrator would be required to submit recommendations for a Rhode Island Personal Income Tax Code that would include tax rates, income brackets, and personal exemptions.
Create New Department of Revenue: A new Department of Revenue's sole purpose would be to collect taxes and tax data. House leaders believe this department is necessary to provide the state with a continuous review of the tax structure so lawmakers can stay on top of trends and changes and keep Rhode Island's tax laws competitive with those of other states. Rhode Island is the only state in New England without such a department.

With this type of tax reform, how do house leaders propose to pay ever-increasing social service programs or state pensions? I'm all for reducing income and sales taxes, and especially making the overly burdensome car tax moribund at a more rapid pace. However, tax reform cannot come without review of various state programs/expenditures.

Lastly, has House Speaker Murphy been attending conservative economic theory classes? I ask because he says:

The ultimate goal is to put more money directly into people's pockets both by giving relief to those who need it and by making Rhode Island a more attractive place for businesses that will provide high-paying jobs for more Rhode Islanders.

5:03 AM | Comments (5)

February 2, 2006

Economy

Finding Brian C. Jones' Outrage

Carroll Andrew Morse

Brian C. Jones of the Providence Phoenix is troubled by the lack of anger in response to the recent layoffs announced by Ford Motor Company�

As the Ford �restructuring� announcement was unfolding this week, I read the Associated Press stories on the Internet, digested the New York Times� substantial package, viewed PBS� long discussion on the NewsHour with Jim Lehrer, and listened dutifully to National Public Radio�s programming, including bits of On Point, Tom Ashbrook�s always-remarkable morning program�.

Nobody�s really mad, it seems, just resigned�.What I wanted to hear from somebody, somewhere � from a factory worker, an academic, even a Wall Street analyst � is that this is an emergency, both for the economy and the American soul.

Instead, there was preposterous babble, including some analyst�s observation that there is nothing wrong, in fact, with auto-building in America: The jobs lost by the Big Three are being absorbed by the Toyota, Honda, and other foreign produces � which are expanding their American factories. And if you are an investor looking for a good stock market buy in the industry, log onto the Internet or call your broker and buy shares of those companies; who cares where they have their corporate headquarters? There are no losers.

This is simply crap.

American conservatives, believe it or not, share at least one part of Jones� concern. Right-leaning commentators use the uncomplimentary term "post-patriotic business elites" to describe business leaders who believe that it doesn�t matter who owns the auto factories, or any other factories, so as long they keep pumping out their products. If you prefer a more colorful but less descriptive term, call them "Republican Marxists" who believe that economic forces are all that matter and that it doesn�t matter how much foreign companies own in America, so long as competent managers stay properly focused on their bottom lines.

If you accept that post-patriotic elitism is a problem, you have the answer to this question asked by Jones�

Where is a note of concern � that these jobs have defined the American way of life? Where is any note of respect for what unionized autoworkers have represented as a standard to be honored and emulated? Instead, what respect they�re accorded is put in sort of a museum-like context, describing autoworkers as being like some Indian tribe that had it good on the prairie long ago, but times change and so what?

Respect for unions is absent because of a sense that it is not just management who has entered their post-patriotic phase. Union leadership seems to have gone PP on the country too. In the same way that business leaders can put their company�s profits before patriotism, union leadership seems to put its narrow interests before any concern for America as a whole.

In fact, union leaders seem to have other things on their minds than even the good of their members. Here is pollster John Zogby on the subject of how well union leaders represent their workers�

I asked voters whether the AFL-CIO spoke for them when they went to the polls. The answers produced a real surprise: Among unionized likely voters, just 27% said the AFL-CIO spoke for them all or most of the time.

If union workers don�t believe that union leadership representing their interests, then how is it reasonable to expect non-union Americans to associate protecting unions with protecting America�s best interests?

I realize that this unfairly blames union workers for the errors of union management. But if you can�t trust the union to look out for you because they�re too busy with their own political agenda, and you can�t trust management to look out for you because they�re just trying to maximize profits (and taxpayers can�t trust public-sector unions because they're just trying to grab as much of the budget as possible), then the result is a world of every-man-for-himself. And once people have bought into an every-man-for-himself ethic, it�s hard to get them outraged over what happens to anybody else.

That�s why, contrary to Jones� opinion, outrage is not the first step to fixing the problems he sees. The changes that Jones wants, a focus on helping others receive "good products and fair wages", cannot begin until people view life in terms larger than their own narrow economic self-interest. Too many members of our post-patriotic commercial elites and our post-patriotic union leadership are doing nothing to help build any such wider vision.

6:27 PM | Comments (9)

Patrick Conley's Flawed Gambling Arguments

Carroll Andrew Morse

There are, at the very least, two major problems with yesterday�s Patrick T. Conley op-ed in the Projo on the subject of gambling. The first is his disingenuous description of a casino�

A lottery operator does not wager or hazard his own property against that of others. The lottery operator is neutral and earns revenue by taking a portion of the ticket sales. The lottery operator is not itself a contender for the prize.

Casino gambling, on the other hand, is a banking game, in which the operator has a fund, or "bank," against which everybody has a right to bet, the bank being responsible for paying all the funds. The casino banker competes against the players, taking on all comers, paying all winners, and collecting from all losers.

Mr. Conley implies that the house hazards its own property against that of others, that the casino is taking some sort of risk. It is not. Allow me to amend Mr. Conley's description and add some detail necessary for understanding how a casino works�

Casino gambling, on the other hand, is a banking game, in which the operator has a fund, or "bank," against which everybody has a right to bet, the bank being responsible for paying all the funds. The casino banker rigs the gaming rules to guarantee that there will always be more losers than winners, then competes against the players, taking on all comers, paying all winners, and collecting from all losers.

The casino gets to set the odds so that it always wins in the end. There is no "hazard" to the casino operator.

Second, Mr. Conley tries to rally support by appealing to the surly libertarian streak that exists in Rhode Islanders by labeling the state�s current involvement with gambling as socialist�

By insisting that the state be a casino banker, rather than a mere regulatory broker, the court, in effect, is demanding the establishment of socialized gaming.

This too is disingenuous. Current proposals for bringing casino gambling to Rhode Island would place casino gambling in RI under the control of a private monopoly. Using the government to create a private monopoly and to barr competitors from entering the market is every bit as socialistic as direct government control.

If Mr. Conley, or any other Rhode Islander really favors gaming, but not socialized gaming, a simple solution is possible. Intoduce an constitutional amendment that legalizes gambling in RI without giving any party exclusive rights to own or operate a casino.

7:49 AM | Comments (2)

February 1, 2006

Judiciary

Re: That's Our Chafee

Carroll Andrew Morse

On Monday evening, Justin wrote�

I've been a little surprised at the intense interest in Senator Chafee's vote on [Samuel] Alito. From conservatives' standpoint, the only intriguing turn of events would have been a "yes" vote on the nomination and the questions that it would have raised about whether Chafee might make further efforts to court us.

Speaking as one conservative who was very interested in the nomination of Justice Alito, let me try to explain my (ultimately dashed) hopes.

I had held out hope � false hope, it turns out � that Senator Chafee was an unwitting prisoner inside of the liberal echo chamber. If the Senator is surrounded by typical Rhode Island politcos, then the Senator must usually be surrounded by people who blame the weakness of Rhode Island�s Republican party on the Republican association with conservatism and are thus unwilling to advance conservative ideas and policies.

Was it unreasonable to believe that Senator Chafee�s liberal voting record was, to some degree, the result of a lack of interaction with conservative ideas? A week ago I would have said not necessarily. Justin, I believe, would have replied "you�re kidding yourself" -- and been right.

The Alito nomination was too big to be contained inside of the echo chamber. To many conservatives, Supreme Court nominations are the #1 issue for electing a President. Conservative Rhode Islanders met with the Senator and made their case for confirming Alito; outside voices made their way past the usual filters. And with Samuel Alito clearly qualified to sit on the Supreme Court, the discussion would move right to constitutional issues, to ideas about the role of the courts, and to ideas about the role of government in general. Maybe Senator Chafee would gain a fresh perspective on some important ideas he tended to too quickly dismiss.

On one side, there was a Supreme Court nominee who had a commanding knowledge of the law, a record of adherence to precedent, and who had been praised by every law clerk he had ever employed and every judge he had ever served with. On the other side, there was little more than the usual boilerplate liberal shrieking.

Ultimately, the boilerplate mattered more to Senator Chafee than any real ideas. All that really mattered was contemporary liberalism�s visceral fear of change, manifest in a desire to forever freeze abortion law in its 1973 form, no dissent tolerated. To avoid appearing to have applied a litmus test, Senator Chafee tried repeating some other liberal boilerplate, that he may well believe to be meaningful.

But the repetition was disingenuous. On the issue of the environment, the fact Judge Alito does not believe that the interstate commerce clause is an unlimited grant of power to Congress was strectched by the Senator to become a threat the environment. And on the issue of executive power, what Judge Alito had said was so non-controversial, the Senator had to misquote it to make it sound controversial.

Now, I don't see how it's reasonable to ever expect anything different from Senator Chafee. The Senator can always be counted on to dismiss whatever honest debate the right brings to a problem and, instead, base his decisions on the loudest hysterics coming from the left.

7:38 PM | Comments (8)

Move Over Senator

Marc Comtois

Thinking aloud over at The Corner, Ramesh Ponnuru asks, "What do conservatives gain if Chafee wins?" But first he makes a case for conservative retribution against Sen. Chafee:

The more I think about it, the more important it seems to me that Steve Laffey beat him in the Rhode Island Senate primary.

None of the Republicans who voted against Bork in 1987, and none of the Democrats who voted against Thomas in 1991, paid any price. (It was the pro-Thomas senators who suffered: Democrat Alan Dixon lost a primary to Carol Moseley-Braun, and Arlen Specter had a tough general election.) If Chafee loses, it will make it harder for Snowe and Collins to vote against a qualified conservative in the next Supreme Court fight.

What do conservatives gain if Chafee wins? The hope that he would vote to keep Senate Republicans in the majority if it came down to him. We don't know that he would vote that way; and it's not clear that nominal control of the Senate matters all that much. Even if Laffey went on to lose the general election, taking out Chafee looks like a good move to me.

As some of you may have realized, I've basically come to that conclusion myself, though not from any desire for retributive action against Senator Chafee.

In a response to a critique of my post regarding where Sen. Chafee has differed from conservatives, I explained why I have decided that it's time to send Sen. Chafee on his way. I think it's proper for me to summarize my reasoning in a "regular" post so readers (and my fellow Anchor Rising contributors) can see where I stand on the Laffey/Chafee race.

Anchor Rising is a conservative blog, not a Republican blog. I am a registered Republican, but I'm a conservative first. I am more concerned with growing the conservative movement within the state than I am with keeping a liberal Republican in national office merely for the false promise of "goodies" for my state.

It is a political reality that the home for conservatives is the GOP. Unfortunately, Sen. Chafee--the face of the RIGOP at the national level--has shown time and again that he is most comfortable being a liberal Republican. In fact, it's as if he revels in the attention he accrues for being a Republican wildcard. His position as the only Republican in our congressional delegation has given both he and his supporters considerable power--both direct and indirect--within the State GOP, especially at the top of the state GOP hierarchy.

Additionally, though there are many leaders within the RIGOP who are more conservative than Sen. Chafee (such as Governor Carcieri), these leaders have chosen to be "pragmatists" and "grin and bear it" as Sen. Chafee routinely votes against the interests of his President and the interests of the majority of the Party he calls "home." They are understandably reluctant to break Ronald Reagan's 11th Commandment ("Never speak ill of another Republican"; the same cannot be said for the NRSC), especially in a state with such a small GOP contingent. But the willingness of the RIGOP to accept whatever Senator Chafee does for the sake of having a seat at the national GOP's table is starving their own conservative base.

The Alito confirmation vote is the most recent and stark example of how much Sen. Chafee differs from even his fellow liberal/moderate Republicans like Maine Senator Olympia Snowe. He was the only Republican to vote against confirmation of Justice Alito, a nominee of a President of his own party. Yes, the GOP is a "big tent" party--but Sen. Chafee usually isn't in the tent when the Main Event is in the center ring!

Eventually, the RI GOP--whether from the "bottom up" or the "top down"--has to make a decision: Continue being satisfied with the status quo and the shenanigans of our "independent" Senator, or send the sort of message that is long overdue. Currently, Mayor Steven Laffey is the vehicle through which conservative members of the RIGOP can best make such a statement. Mayor Laffey isn't a "perfect" conservative (if such a thing exists), but he is undeniably more conservative than Sen. Chafee. At the least, he will support President Bush on the big issues like the War in Iraq. I am not condoning some sort of ideological purity within the RIGOP, nor am I naive enough to believe such a thing is achievable. All I desire is that the RIGOP begin to reflect the predominant ideals of the majority of its members, from the top on down.

Regardless of whether or not Sen. Chafee has a better chance than Mayor Laffey of winning the general election is not as important as how the nomination of each effects the structure of the RIGOP. If--as Tip O'Neill said, "All politics is local"--then it's time for RIGOP to concern ourselves with our own backyard. Party building requires its members to be inspired, something that has been sorely lacking within the GOP. Inspiration requires leadership, but it also requires that the members "buy-in" to a message in which the truly believe. Even if Mayor Laffey should win the primary, but lose the general election, few can doubt that his views are more in line with the majority of the RIGOP.

Many say that RI is a "liberal" state, and that having a liberal Republican is the best that we can do. That is both pessimistic and defeatist. Conservatives have to realize that there is no law stating hat RI will always be "liberal." We are not consigned to some permanent fate. We have the ability to change Rhode Island, but only through optimism and hard work will we be successful.

After 1964, Barry Goldwater was considered a fringe candidate who had led the nascent national conservative movement to a fiery death. In 1980, Ronald Reagan proved them wrong. In between 1964 and 1980, Reagan and others led a grassroots movement that spread the conservative message throughout the nation. Unfortunately, with the exception of a brief period during the 1980s, that message has been forgotten in Rhode Island. It is past time that Rhode Island conservatives rectify that situation. The first step is to change the attitude and direction of the RIGOP. So long as we continue to derive inspiration from our conservative ideals and values--and don't accept vague promises of maintaining our little slice of the political pie--we can be confident in our attempt to fundamentally change the Rhode Island Republican Party. Change has to start somewhere and sometime: Why not here, why not now?

3:45 PM | Comments (19)

Liberalism

Sen. Kerry, Thank You

Marc Comtois

Sen. Kerry, thank you for keeping such a high profile. Whether it be instigating a doomed-to-fail filibuster of Justice Alito from the slopes of a Swiss ski resort or claiming that "53 percent of our children don't graduate from high school" or "The average American struggles to find time to take care of families, working two or three jobs... " (emphasis mine), you make it easy for us to point out the intellectual bankruptcy of so many on the Left. On the face of it, no one can possibly believe that less than half of our students graduate from high school. Also, as an "average American" who happens to know a lot of other "average Americans," I can tell you that none work "two or three jobs" to make ends meet. But that's OK, such incessant carping reveals your politics-of-demogoguery for what it is. Thanks! (Oh, and please do run for President in 2008.)

12:15 PM