December 8, 1999

First Tobacco, Now Guns
Making Money, Raising Prices
Red Panama
McCain Aims at Defense Budget

First Tobacco, Now Guns

The White House and the Department of Housing and Urban Development said yesterday that housing authorities around the country plan to file a class action lawsuit against gun makers. The suit will accuse the gun manufacturers of marketing and selling weapons irresponsibly, allowing their product to fall into the hands of criminals. They are also accused of failing to make firearms as safe as possible. The administration is throwing its weight behind suits filed by more than two dozen cities against gun companies in the hope that a far-reaching settlement might be achieved, said Housing Secretary Andrew M. Cuomo and Bruce Reed, President Clinton's domestic-policy adviser.

When governments use the judiciary to recover "damages," the courts intrude on the regulatory and revenue responsibilities of legislatures, write Michael I. Krauss and Robert A. Levy in their commentary, "So Sue Them, Sue Them." Doug Bandow agrees in "Social Engineering by Legal Brief," writing that "if you can't send in bureaucrats, you can send in lawyers. That seems to be the new strategy of the social engineers."

Making Money, Raising Prices

The U.S. Postal Service made a $363 million profit in fiscal 1999, the fifth consecutive year that the post office has finished in the black, officials announced yesterday. Although mail volume continues to rise, it has not grown as fast as officials had hoped. That factor, combined with increased labor costs and other expenses, means the Postal Service will seek to raise the price of stamps in 2001, officials said.

In The Cato Handbook for Congress section on the Postal Service (pdf), Edward L. Hudgins recommends that Congress privatize the Postal Service and end its monopoly. "The prices of goods and services drop when markets force suppliers become more efficient," Hudgins rites. "Yet the price for first-class mail has not gone down. Stamp prices have risen nine times since 1973, from 8 cents to 32 cents today." In "America's Post Office Challenges The Digital Age," Richard W. Rahn writes, "Try to think of good reasons why the U.S. Postal Service should be a government-owned monopoly. In reality, there are none."

Red Panama?

As the handover of the Panama Canal nears, many still worry about Chinese companies taking over operations at both ends of the canal. "If we do nothing, I can guarantee you that within a decade, a communist Chinese regime that hates democracy and sees America as its primary enemy will dominate the tiny country of Panama, and thus dominate the Panama Canal, one of the world's most important strategic points," said Rep. Dana Rohrabacher (R-Calif.) yesterday at a House Committee on Banking and Financial Services subcommittee hearing on the issue.

In his commentary "Ghosts of the Cold War," Ivan Eland writes that "allegations that China is undermining U.S. security by attempting to gain control of shipping through the strategic Panama Canal is preposterous." Eland also hosted the Cato policy forum "Is China a Threat to the Panama Canal?" which is available on RealVideo.

McCain Aims at Defense Budget

Arizona Sen. John McCain used a Pearl Harbor Day speech yesterday to vow that, if elected, he would cut expensive weapons systems and spend more money on better trained and higher paid military personnel. McCain chided both parties for misdirecting "scarce defense dollars" to fund "Cold War weapons systems and programs that have no necessary use," while forcing 12,000 enlisted personnel to accept food stamps to feed their families. McCain's cuts would include the C-130 troop transport aircraft, the B-2 "Stealth" bomber, and the Seawolf submarine.

In "Kill Defense Pork," Doug Bandow writes, "Republicans and Democrats alike claim to support fiscal responsibility, but you wouldn't know it from the defense budget." He goes on to note that despite cash shortage complaints by the Pentagon, "the defense budget, adjusted for inflation, remains at the level of 1980, when there was a Cold War, Soviet Union, and Warsaw Pact."