Reason.tv (and Europe) aptly reminds us that a government shutdown won’t exactly halt the wheels of government. Enjoy!
I talked to Dan Mitchell this week on why the standard narratives about government shutdowns are largely myth.
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Reason.tv (and Europe) aptly reminds us that a government shutdown won’t exactly halt the wheels of government. Enjoy!
I talked to Dan Mitchell this week on why the standard narratives about government shutdowns are largely myth.
The angry Left has been calling for President Obama to fire Jeffrey Immelt from his position as head of the President’s Council on Jobs and Competitiveness. I think that would be a good idea, but for different reasons.
Sen. Russ Feingold, Moveon.Org, and the regular scribes at the Huffington Post see Immelt, the chairman and CEO of General Electric, as unfit to advise the president because GE invests some of its resources abroad and, despite worldwide profits of $14.2 billion, paid no taxes in 2010. No illegalities are alleged, mind you; GE — like every other U.S. multinational — responds to incentives, including those resulting from tax policy and regulations concocted in Washington.
But there are more substantive reasons for why Immelt is unfit to advise the president. In particular, GE is a major player in several industries that President Obama has been promoting as part of his administration’s cocksure embrace of industrial policy. With over $100 billion in direct subsidies and tax credits already devoted to “green technology,” President Obama is convinced that America’s economic future depends on the ability of U.S. firms to compete and succeed in the solar panel, wind harnessing, battery, and other energy storage technologies. Concerning those industries, the president said: “Countries like China are moving even faster… I’m not going to settle for a situation where the United States comes in second place or third place or fourth place in what will be the most important economic engine of the future.”
Well, just yesterday GE announced plans to open the largest solar panel production facility in the United States, which nicely complements its role as the largest U.S. producer of wind turbines (and one of the largest in the world). The 2011 Economic Report of the President describes the taxpayer largesse devoted to subsidizing these green industries:
[T]he Recovery Act directed over $90 billion in public investment and tax incentives to increasing renewable energy sources such as wind and solar power, weatherizing homes, and boosting R&D for new technologies. Looking forward, the President has proposed a Federal Clean Energy Standard to double the share of electricity produced by clean sources to 80 percent by 2035, a substantial commitment to cleaner transportation infrastructure, and has increased investments in energy efficiency and clean energy R&D.
And Box 6.2 on page 129 of the 2011 ERP conveniently breaks out those subsidies by specific industry, most of which are spaces in which GE competes.
Tim Carney gave his impressions of this budding relationship between GE and the Obama administration in the DC Examiner last July:
First, there’s the policy overlap: Obama wants cap-and-trade, GE wants cap-and-trade. Obama subsidizes embryonic stem-cell research, GE launches an embryonic stem-cell business. Obama calls for rail subsidies, GE hires Linda Daschle [wife of former South Dakota Senator and Obama confidante Tom Dachle] as a rail lobbyist. Obama gives a speeeh, GE employee Chris Matthews feels a thrill up his leg. I could go on.
And Carney does go on in a December 2009 Examiner piece:
Look at any major Obama policy initiative — healthcare reform, climate-change regulation, embryonic stem-cell research, infrastructure stimulus, electrical transmission smart-grids — and you’ll find GE has set up shop, angling for a way to pocket government handouts, gain business through mandates, or profit from government regulation.
One month after President Obama proposed subsidizing high-speed rail because, in his words, “everybody stands to benefit,” the head of GE’s Transportation division proclaimed, “GE has the know-how and the manufacturing base to develop the next generation of high-speed passenger locomotives. We are ready to partner with the federal government and Amtrak to make high-speed rail a reality.”
About the optics of these related events, Carney writes: “This was typical — an Obama policy pronouncement in close conjunction with a GE business initiative. It happens across all sectors of the economy and in all corners of GE’s sprawling enterprise.” And he goes on to list other examples.
Jeff Immelt should step down as head of the President’s Council on Jobs and Competitiveness because there is simply no avoiding a conflict of interest. Even if he recommends courses of action to the president that don’t advance GE’s bottom line, it’s hard to see how that wouldn’t be an abrogation of his fiduciary responsibility to GE’s shareholders.
But more troubling is that Immelt and the president appear to be two peas in a pod when it comes to faith in government-directed industrial policy. Immelt admires the German model of industrial policy because the Germans believe in “government and business working as a pack.” He admires China’s “incredible unanimity of purpose from top to bottom.” And days after Obama’s inauguration, Immelt wrote to shareholders:
[W]e are going through more than a cycle. The global economy, and capitalism, will be “reset” in several important ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.
Citizens of a country that owes so much of its unmatched economic success to innovation and entrepreneurship and an absence of heavy-handed top-down mandates should be wary of the changes the presdient and Mr. Immelt are fostering.
House Democratic Whip Steny Hoyer says “you can’t negotiate on the basis that one side gives 100 percent and the other side gives zero.” Good point. So let’s see: The budget is $836 billion higher than it was in President Bush’s last full fiscal year. The chart below the jump shows how much the House Republicans want to cut from that massive increase. Seems like if both sides — say, the Obama administration and the taxpayers — each give 50 percent, we’d cut the budget by $418 billion, half the recent increase.
Today POLITICO Arena asks:
Will there be a budget deal? And has Obama shown himself to be a capable leader throughout this budget impasse?
My response:
Will there be a budget agreement? Who knows. Has Obama shown himself to be a capable leader in this budget battle? Please. One thing is clear, though: It’s beyond rich for Democrats to blame Republicans for this budget impasse.
Let’s remember that we’re talking about the budget for the fiscal year that began last October, which should have been passed well before then — when Democrats held the White House and both chambers of Congress by wide margins. In all that time, however, they couldn’t pass even one appropriations bill. Why? Because they were trying to game the November elections.
Well they lost those elections — big time. Yet even in the lame-duck session, when they still held all the cards, they couldn’t pass a budget. Now they blame the Republicans? For listening to the voters? What do they think those elections were about? Chopped liver?
Josh Blackman, my sometimes co-author, who is the president of the Harlan Institute (with which I too am associated) and czar — his title, not mine — of FantasySCOTUS.net, has co-authored a fascinating article that analyzes an information market he created to predict Supreme Court cases.
During the October 2009 Supreme Court term (last year), the 5,000 members of FantasySCOTUS.net made over 11,000 predictions for the 81 cases decided. Based on this data, FantasySCOTUS accurately predicted a majority of the cases and the top-ranked experts predicted over 75% of the cases correctly. FantasySCOTUS even has a Prediction Tracker to provide real-time predictions as to how the Supreme Court will decide.
Josh’s article is an absolute must-read for anyone who follows the Court closely and tries to figure out what “The Nine” will do. While I myself haven’t had the time to participate in FantasySCOTUS, perhaps I should go there every now and again to be better able to answer (the very common) media questions of how cases turn out.
The government of China finally confirmed that it has detained the artist Ai Weiwei. Meanwhile, Evan Osnos writes from Beijing for the New Yorker about China’s “Big Chill”:
Step by step—so quietly, in fact, that the full facts of it can be startling—China has embarked on the most intense crackdown on free expression in years. Overshadowed by news elsewhere in recent weeks, China has been rounding up writers, lawyers, and activists since mid-February, when calls began to circulate for protests inspired by those in the Middle East and North Africa. By now the contours are clear: according to a count by Chinese Human Rights Defenders, an advocacy group, the government has “criminally detained 26 individuals, disappeared more than 30, and put more than 200 under soft detention.”
Indeed, everywhere I turn today, there’s news about Chinese censorship and fear of dissent, of ideas, of art, of words like “luxury.” The Washington Post has a major article on Bob Dylan’s concert Wednesday night in Beijing. Dylan, the troubadour of the peace movement and the Sixties and civil rights, in the capital of the world’s largest Communist party-state. How’d that go? Ask Keith Richburg, whose Post article is titled “The times they are a‑censored”:
Rock music icon Bob Dylan avoided controversy Wednesday in his first-ever appearance in Communist-led China, eschewing the 1960s protest anthems that defined a generation and sticking to a song list that government censors say they preapproved, before a crowd of about 5,000 people in a Soviet-era stadium.
Keeping with his custom, Dylan never spoke to the crowd other than to introduce his five-member band in his raspy voice. And his set list – which mixed some of his newer songs alongside classics made unrecognizable by altered tempos — was devoid of any numbers that might carry even the whiff of anti-government overtones.
In Taiwan on Sunday, opening this spring Asian tour, Dylan played “Desolation Row” as the eighth song in his set and ended with an encore performance of “Blowin’ in the Wind,” whose lyrics became synonymous with the antiwar and civil rights protest movements.
But in China, where the censors from the government’s Culture Ministry carefully vet every line of a song before determining whether a foreign act can play here, those two songs disappeared from the repertoire. In Beijing, Dylan sang “Love Sick” in the place of “Desolation Row,” and he ended his nearly two-hour set with the innocent-sounding “Forever Young.”
There was no “Times They Are a‑Changin’ ” in China. And definitely no “Chimes of Freedom.”
Meanwhile, NPR reports that Beijing has banned words such as “luxury,” “supreme,” “regal,” and “high-class” on billboards:
The city’s new rules state that ads must not glorify “hedonism, feudal emperors, heavenly imperial nobility” or anything vulgar, according to the Global Times newspaper. They also should not violate “spiritual construction” standards or worship foreign products — leading some to believe the campaign could be targeting foreign luxury goods.
“The truth is that the party has very clearly started what is very clearly a campaign against ostentation in China,” says David Wolf of Wolf Group Asia, a communications advisory agency. “There is a pushback against things Western. And there is the desire to see those Western things take a lesser role in the development of Chinese culture.”…
China Daily reports that the campaign is aimed at protecting social harmony, quoting a sociologist who says advertisements that promote the belief that “wealth is dignity” could upset low-income residents.
Now there’s some good old-fashioned communist thinking! Of course, communists with the courage of their convictions would ban the products, not just the ad copy. But it’s nice to see the old values survive.
In some ways the government’s confirmation that it has detained Ai Weiwei is the most chilling indication of the new climate. It came in an editorial in Global Times, a vigorous presenter of the government line. Just listen to the combative language:
Ai Weiwei likes to do something “others dare not do.” He has been close to the red line of Chinese law.…
The West ignored the complexity of China’s running judicial environment and the characteristics of Ai Weiwei’s individual behavior. They simply described it as China’s “human rights suppression.”
“Human rights” have really become the paint of Western politicians and the media, with which they are wiping off the fact in this world.
“Human rights” are seen as incompatible things with China’s great economic and social progress by the West. It is really a big joke. Chinese livelihood is developing, the public opinion no longer follows the same pattern all the time and “social justice” has been widely discussed. Can these be denied? The experience of Ai Weiwei and other mavericks cannot be placed on the same scale as China’s human rights development and progress.
As I’ve written before, China faces a dilemma. They have opened up their economy and reaped huge benefits, perhaps the largest advance in human well-being in the history of the world — as the editors of Global Times defiantly argue. But if China wants to become known as a center of innovation and progress, not just a military superpower or a manufacturer, it will need to open further. Investors want to put money into a country with the rule of law. Creative people want to live in a country that allows them to read, write, think, and act freely.
Way back in 1979, David Ramsay Steele, author of From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation, wrote about the changes beginning in China. He quoted authors in the official Beijing Review who were explaining that China would adopt the good aspects of the West–technology, innovation, entrepreneurship–without adopting its liberal values. “We should do better than the Japanese,” the authors wrote. “They have learnt from the United States not only computer science but also strip-tease. For us it is a matter of acquiring the best of the developed capitalist countries while rejecting their philosophy.” But, Steele replied, countries like China have a choice. “You play the game of catallaxy, or you do not play it. If you do not play it, you remain wretched. But if you play it, you must play it. You want computer science? Then you have to put up with strip-tease.”
How much freedom can China’s rulers tolerate? How much repression will its citizens tolerate? How many ambitious, creative Chinese will leave the world’s largest market to find more creative freedom elsewhere? These may be the most important questions in the world over the next generation.