Gerry Connolly (D-VA-11) is Fiscally Reckless

Over the past few weeks, I've received a number of snazzy glossy flyers--booklets, really--from the office of Congressman Gerry Connolly (D-Fairfax, VA) touting his fiscally conservative bonafides. His campaign site make similar claims with issues section including headings of "Fighting Wasteful Spending and Budget Deficits" and "Holding the Line on Taxes."

[Begin tangent: The flyers, by the way, apparently meet the guidelines of the House Franking Commission, the congressional body that oversees mailings from representatives to the people they represent to make sure they're constituent service rather than campaign materials. They're obviously campaign materials--I've only received them this summer, despite being "represented" by Mr. Connolly since January 3, 2009. Just another example of the incumbent protection scheme our leaders have established. For our own good, of course. End tangent]

So I wondered, just how fiscally responsible is Mr. Connolly? Let's look at his votes on the big issues. Did he come down on the side of taxpayers? ("No" means he voted "yes," that is, not fiscally responsible.)
- The failed "stimulus" bill: no and no.
- The spendthrift Fiscal Year 2010 Budget Resolution: no, no, and no.
- Cap-and-tax: no.
- A toothless pay-go (touted in his mailers): sure. A decent pay-go: no.
- EFCA, the union payback: no vote, but Connolly is a cosponsor.
- Obamacare: no, no, no.
- The "Homestar Energy Retrofit Act" boondoggle: no.
- "Deeming" the Fiscal Year 2011 budget passed instead of actually passing a budget: no.
- The teacher union bailout: no.
- A resolution to prevent Congress from passing major legislation during a post-election lame duck session, once the voters have rejected the Obama-Reid-Pelosi radical agenda: well, it wasn't a recorded vote, but no.

Want something more rigorous and systematic? Fine. In the first session of the 111th Congress, Gerry Connolly scored a grade of "F" on the National Taxpayers Union congressional report card with a whopping 6%.

Let's face it: glossy flyers notwithstanding, Gerry Connolly is not being responsible with taxpayer dollars. To my fellow residents of Virginia's 11th congressional district, let's encourage him to make a career change after November 2nd.

Putting the "Auto" in Automobile

"Civilization advances by extending the number of important operations which we can perform without thinking about them."
- A. N. Whitehead (in F.A. Hayek, The Constitution of Liberty)

A little more than a year ago, my friend and colleague Randal O'Toole sent me a draft of a paper he was working on with a section on driverless cars. Although it didn't make the final cut of that paper, it got a full chapter in his excellent new book, Gridlock: Why We're Stuck in Traffic and What to Do About It. Initially skeptical, I've since become mildly obsessed.

In summary, it is now possible for cars to drive themselves under certain conditions. Adaptive cruise control, lane keep, and self-parking options already exist in a variety of higher end cars. As the technology improves, hardware and software become cheaper, and the public becomes more aware of the possibilities, it's becoming hard to envision a future without autos on autopilot.

Why should I care, you ask?

Lower pollution. Less congestion. Less of a need to increase expensive lane miles of roads, which means less construction. Less time on the road; more time for everything else. Using the commute or other driving to do something fun or productive. Less stress. Less road rage.

Increased mobility for the elderly, the young, and the handicapped. Getting drunks home safely (for themselves and everyone else on the road). No more teen-texting-crash tragedies. An end to driver error from distraction or fatigue. The list goes on.

Even as technical demonstrations proceed, the concept seems to be getting more attention in the press. Erik Morris over at the NYT Freakonomics blog has twice waxed enthusiastic (with promises of more to come), and it's been picked up in a variety of news articles throughout the country.

In addition to the links above, check out this Capitol Hill briefing we did with Volkswagen's Director of Research, Randal's WSJ piece "Taking the Driver Out of the Car," or just Google it.

"Anyone who fights for the future, lives in it today."
- Ayn Rand (The Romantic Manifesto)

If only.

Constitutional Reform Needed Soon

It's been almost four months since I last blogged, courtesy of a rather heavy reading list for the final lap of grad school.

Twenty books and many discussions later, my grasp of constitutional economics has never been better. In a nutshell, constitutional economics has to do with how the basic rules of governance lead to different political and economic outcomes. The basic challenge is to escape anarchy or despotism by establishing the protective (military, police, courts) and productive (basic infrastructure, environmental protection, monetary policy) functions while constraining the ability of political actors to use the power of the state to redistribute. As it turns out, no advanced country seems to have figured out how to constrain redistribution very well.

In thinking about these issues, I've come to a few tentative conclusions. Politics as usual hasn't been very successful at limiting government. It looks like we need to think about constitutional reforms, such as
- Term limits (5 terms House, 2 terms Senate)
- Spending limits (inflation + population growth)
- Balanced budget requirements (spending = revenue two years before)
- Prohibition on new debt issue
- Two-year budgeting (budget odd years, oversight even years)
- Zero-base budgeting (all programs reconsidered each time)
- Periodic automatic program sunsets (without congressional reapproval, they go away)
- Putting all implicit debts (unfunded Social Security, Medicare, Medicaid, and pension liabilities) on the official annual budget

All of these are aimed at limiting the discretion of politicians. They're our employees, after all, so why do we let them get away with acting like our masters? Government doesn't give us meaning, it's just an instrument to accomplish those necessary things that cannot by provided by voluntary action.

Forcing government to live within its means would stop the intergenerational theft that has run rampant for the last eighty years and force politicians to make choices about priorities. It would also make it easier to say 'no' to the special interests.

How these reforms could be implemented is unclear. But unless Greece's situation looks like fun, we better figure it out soon.

What Kind of Labor Market Do You Support?

If you live in the DC area and ever wondered whether the businesses you patronize have unionized workforces, here's the link for you. It lists the "companies represented by UFCW [United Food and Commercial Workers] Local 400."

You can find the UCFW affiliate in your area at http://www.ufcw.org/.

The phrase "companies represented by UFCW Local X" strikes me as pretty misleading. They may represent some workers, but certainly not customers, suppliers, management, or shareholders (as Ben Stein calls them, "widows and orphans").

Anyway, I was interested to find out that several places I shop are unionized--CVS, Macy's, and Safeway--and others--Walmart, Whole Foods, Target, Wegman's, among many more--presumably are not.

Whatever your preferences, it's good to know.

P.S. Incidentally, a report from the Bureau of Labor Statistics last week noted that public employees made up a greater share of union membership than private sector workers in 2009--the first year that's ever happened. Federal, state, and local government workers were 37.4% unionized (7.9 million workers), while only 7.2% (7.4 million) private sector workers belonged to unions. Apparently union membership hasn't been this low since 1900.

P.P.S. Also, the new Cato Journal seeks to answer the question, "Are unions good for America?" I haven't had a chance to dig in yet, but it looks like an interesting read.

Checks and Balances Are Back

With the just-declared victory of Republican Scott Brown in Massachusetts, checks and balances have finally been restored after a year of Democratic dominance in Washington. And that means the pace of their big spending, big government agenda will slow down dramatically.

Not that unified Republican control several years ago was a picnic. Those years brought us massive federal encroachment into K-12 education, a major expansion of an already unsustainable entitlement program, corruption, continued government meddling in all variety of personal matters, a bloody and expensive war of choice, a spending explosion, and the abandonment of the limited government (aka freedom) agenda that was supposed to be the heart and soul of the conservative movement.

But Democratic control has--in only one year--brought an escalation of the war in Afghanistan, the continuation of Bush-era violations of civil liberties and opaque budget processes, even greater recklessness with our fiscal future, the attempted nationalization of our health care system, increasing the burden of taxes and regulations, and pushing a pork-laden energy bill that even greens have rejected.

This country is better served when checks and balances exist, as when Clinton was balanced by a Republican House from 1995 to 2001. Sure, the internal tensions within the Democrat caucus provided some impediments, but at the end of the day, leadership has an awful lot of clout and can force (and has forced) much down the throats of the rank and file.

This should serve as a wake up call. As Gerald Seib pointed out on WSJ today, Americans' political preferences have stayed remarkably constant over the years. A successful governing agenda is not one that tacks hard to the left or right, but one that is essentially a free market, socially tolerant agenda of "live and let live."

The Democrats still hold the White House, 256 of 435 House seats, and 59 seats in the Senate. But at least the filibuster is back.

If this is a harbinger of things to come, November will be very, very interesting. Stay tuned.

America Subsidizes European Welfare States

Late last week a hearty debate broke out in the blogosphere regarding whether Americans or Europeans have a higher standard of living. Paul Krugman started it, and Greg Mankiw, Dan Mitchell, and many others responded.

Krugman argued that European economies are no less dynamic than America's and standards of living are comparable even though social welfare spending is higher. Mitchell explodes the idea that Europeans and Americans are similarly wealthy--average American consumption is much higher--while Mankiw suggests a number of factors that may account for the differences in per capita consumption and unemployment.

My own humble contribution is merely to point out that the U.S. subsidizes Europe (and others) in at least two significant ways: defense spending and medical innovation.

In a recent paper on medical innovation published by the Cato Institute, Glen Whitman and Raymond Raad point out that America leads the world in three of four general categories of innovation--basic science, diagnostics, and therapeutics--while the fourth category of business model innovation lacks sufficient data to draw clear conclusions.

Politicians and pundits often argue that we'll fall behind if innovations don't take place here. Not so. Once an invention happens, those who have carried none of the burden of its development--the diversion of resources from production to research, the costs of many dead-ends, and the risks of failure--can take as much advantage of it as those who sacrificed for it. It's the classic free rider problem: most of the beneficiaries carry virtually none of the cost. Clearly, expanding the frontiers of knowledge and productivity is necessary for continued progress, but the costs and benefits are not evenly distributed.

And so it is with healthcare and other sectors where American innovation predominates. America's disturbing distorted health care system at least provides incentives for individuals and organizations to develop better ways of treating illnesses and promoting wellness. U.S. taxpayers and consumers foot the research bill, and Europeans and the rest of the world benefit from the disproportionately American advances.

U.S. subsidies to Europe (and Japan, South Korea, Australia, and many other places) also take the form of our picking up some of the tab for their defense. According to the CIA World Factbook, the U.S. significantly outspends most European nations in terms of percentage of GDP, and that's with a higher per capita GDP, as noted above.

For those that spend a greater share of domestic output--Macedonia, Turkey, Bosnia and Herzegovina, and Greece--I have three words by way of explanation: location, location, location.

Here are the big six: UK (2.40%), France (2.60%), Spain (1.20%), Italy (1.80%), Germany (1.50%), and Poland (1.71%). None of them are even close to the U.S.

If those are the levels that they think are appropriate given their threat environment, fine, but that seems unlikely. The United States are bordered by two gigantic oceans and two weak and friendly nations and haven't been invaded by a foreign power since the 19th century. Europe is proximate to the Middle East and Africa and has a history of continent-wide wars.

And one suspects that Europeans rightly view the 78,000 U.S troops stationed there and ongoing commitments to the NATO alliance as a signal that they don't need to fully fund their defense needs. The U.S. will be there to bail them out.

Needing to spend less on their defense permits them to spend more on social services. It's that simple.

Even if Krugman were correct about similar standards of living in Western Europe and the United States, the fact remains that the U.S. is massively subsidizing the European welfare state through our defense umbrella of that continent and by producing a disproportionately high share of the world's innovation (especially medical) here. Absent those subsidies, Europe's current 'generosity' would be unsustainable.

Dear NYT: Yes, Health Care Coverage Should Differ

"Should someone in Idaho or Nevada have significantly different health care coverage from someone in Massachusetts? That, essentially, is one of the biggest questions Congress will be wrestling with as it tries to meld House and Senate bills into a single law to revamp the nation's health care system," the New York Times reports.

Yes. And so should my neighbors, my friends, and my coworkers. Our health insurance coverage (or lack thereof) practices ought to be individual decisions consistent with our particular values and preferences.

There's no good reason for politicians, bureaucrats, or, for that matter, employers to make these decisions: none of them can adequately cater to individual wants and needs. The market isn't perfect either, but it's far better and keeps improving.