17 July 2009

Today’s Tabbloid
PERSONAL NEWS FOR lgn@[Link]

FISCALLY CONSERVATIVE BLOG FEEDS Compared with Uncle Sam.” Typically, Higgs doesn’t mince words when
it comes to comparisons between private and public Ponzi schemes:
Slight Correction to My DC Per
Madoff, in contrast to the government, carried out his fraud
Pupil Spending Figure [Cato at in a civilized way: he merely misrepresented what he was
doing, purporting to invest his clients’ money and to obtain a
Liberty] high rate of return on these investments. People dealt with
JUL 16, 2009 05:52P.M. him voluntarily. Those who suspected something was fishy
did not do business with him, and some people went so far as
In my IBD piece today I gave total per pupil spending in DC as $29,000 to give substantial information to the SEC to show that
per pupil. That was based on an official k-12 audited enrollment count of Madoff’s business had to be fraudulent (which information
44,681, which I was told by a district official included the special the SEC ignored for years on end, of course).
needs students placed by the district in private schools. It turns out this
was not the case, so we have to add in the special needs students to arrive The leaders of the U.S. government have carried out their
at the total enrollment figure. Unfortunately, I wasn’t able to get that Social Security fraud—essentially a Ponzi scheme, in
enrollment correction into the IBD in time for publication. Its impact on substance exactly the same as Madoff’s scheme—since 1935. .
per pupil spending is not large, however. . . The U.S. government, however, does not bother to claim
any prowess in investing the money it forces people to
The grand total audited enrollment was 48,353 students. From that we surrender to its scheme. It admits that the ‘client’s’ return is
have to subtract 997 students in adult education programs and 1,498 now close to zero (varying a bit according to the client’s age
students in preschool programs who are not covered by my k-12 budget and other factors). Nor does it carry out its admitted Ponzi
calculations. That leaves us with a k-12 audited enrollment of 45,858. scheme in a civilized way. Not only is participation in the
Dividing that in to the District of Columbia’s $1.3 billion k-12 scheme involuntary, but the government threatens violence
education budget yields a per pupil spending figure of about $28,000. against anyone who fails to participate as it commands him.
Thus, the government operates its Ponzi scheme in a
markedly more thuggish manner than Bernie would ever
have dreamed of. He might have been a crook, but he was not
FISCALLY CONSERVATIVE BLOG FEEDS a thug.

Bernie Madoff and Government

Fraud [Cato at Liberty] FISCALLY CONSERVATIVE BLOG FEEDS
JUL 16, 2009 04:51P.M.
Obama Is Right to Stare Down
In an op-ed Chris Edwards and I wrote for National Review Online
yesterday, we shed light on the $100 billion or more in government Congress Over the F-22 [Cato at
subsidies pilfered by recipients through fraud and abuse:
Liberty]
Every year, criminals and cheats pilfer over $100 billion — JUL 16, 2009 03:57P.M.
that’s $40 billion more than Bernie Madoff scammed off his
investors — in federal benefits to which they are not legally If Congress votes to build even more F-22s in the 2010 Defense
entitled. Medicare, Medicaid, food stamps, refundable tax Authorization bill, it will be a sad example of parochial interests
credits, and many other programs are targets for looting. overriding our nation’s security. The move would defy the wishes of the
Pentagon and Defense Secretary Gates, who have wisely called for the
Chris and I focused on fraud and abuse perpetrated by the recipients of program to come to an end.
taxpayer largesse, and Bernie Madoff made for a good comparison. But
as the great economist and Cato adjunct scholar Robert Higgs also The Raptor’s whopping price tag—$356 million per aircraft counting
pointed out yesterday, “Bernie Madoff Was Only a Petty Crook costs over the life of the program— and its poor air-to-ground

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

capabilities always undermined the case for building more than the 187 education cost curve and thus reduce government spending is
already programmed. to increase government regulation in the form of mandatory
reporting. So it’s a pick your poison situation for the Cato
In the past week, Congress has learned more about the F-22’s poor folks — would you rather have Big Brother’s hand in your
maintenance record, which has driven the operating costs to more than wallet or his eye on your business? You really can’t avoid
$44,000 per hour of flying, which is well above those of any comparable both.
fighter. And, of course, the plane hasn’t seen action over either Iraq or
Afghanistan, and likely never will. Now, I don’t want to seem obnoxious about this. After all, in the same
piece that produced this quote, Carey notes that “while my politics are
If Obama is serious about getting a handle on the enormous federal pretty far from Cato’s and I often think they’re wrong, they tend to be
budget deficit, confronting Congress over the clear wastefulness of the F- wrong in interesting ways.” I thank him for that (I think), though I
22 is certainly a good place to start. should note that the impetus for his piece is a paper that comes from the
John William Pope Center – the same paper I discuss here – not from
Cato. So it might not even be Cato that Carey finds interesting.
Regardless, here’s my potentially obnoxious-sounding reply:
FISCALLY CONSERVATIVE BLOG FEEDS
Without even discussing the extremely dubious assumption that more
Trapped Inside the Mime’s Box regulation will lead to lower college costs, wouldn’t the best, most direct
way to “reduce government spending” obviously be to, well, reduce, or
[Cato at Liberty] even stop, government spending?
JUL 16, 2009 03:14P.M.
Of course it would, and that is the obvious solution for libertarians! It
would get Big Brother out of our wallets and kill whatever justification
subsidies might give him to gaze into our business. And it wouldn’t just
make libertarians feel better – the benefits would accrue to almost
everyone. If students and donors, rather than taxpayers, were to cover
much more of colleges’ costs, taxpayers would save money, colleges
would be unable to charge as much as they currently do, and schools
would have to focus much more on their customers and patrons.

So there is no either-more-regulation-or-higher-costs box. Indeed, the

only box that libertarians could possibly be trapped in is a mime’s box –
a purely illusory one that someone has to really, really want to believe in
for it to have any sort of existence at all.

Having broken free of the invisible, intangible box, let me address one
other thing that Carey brought up both in the discussion held at Cato,
and his latest commentary:

The problem is that colleges aren’t just going to unilaterally

release lots of new information on their own. Nor would it
Kevin Carey, policy director at the think tank Education Sector, asserts help matters much if they did; for data to matter it has to be
that when it comes to higher education libertarians are boxed in, unable standardized in a way that allows for comparison. That’s why
to find a solution to out-of-control college costs that won’t violate at least companies report one set of quarterly financial results to the
one, basic libertarian principle: SEC, not 50 different sets to each state. Given that higher
education is a national market this leads to a similar national
This puts libertarians in somewhat of a box. On the one hand, solution: The federal government should compel colleges to
they tend to be hostile toward the tens of billions of public release much more information about success as a condition
dollars that flow into colleges every year. The more colleges of receiving direct or indirect federal aid.
cost, the greater the claim on the average citizen’s hard-
earned money and thus reduction in their precious liberty The idea that a market that happens to be national in scope somehow
etc., etc. requires federal control is both very common, and very inaccurate,
simply equating “national” with “federal” and moving on from
But the best way to bend down the long-term higher there. Even worse, though, is the even more basic assumption that to get
something good, or just standardized, government control is required.

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

Whether it’s McDonald’s or Ruth’s Chris, an item on the menu in Beverly

Hills is going to be essentially the same as in New York City. Why? Not
because Washington says it must be, but because that keeps the
customers coming. Or consider the QWERTY keyboard: It became the
national standard by free-market, not government, forces. And how
about the Model T, which was driven by Americans from Maine to San
Diego? It was standardized not because the federal government said “this
is a national car, so we must make it the national standard,” but because
one company produced it and it was freely chosen by customers from sea
to shining sea. And how do we choose automobiles today? Not by going
to some federal report on what a car should be (though perhaps that day
is coming) but, often, by consulting such trade mags as Road and Track. …and what it would look like under the House Democrats’ health care
plan:
Clearly, we don’t need government to set standards or inform consumers
– markets will do those things themselves. But that markets will set their
own standards is just part of the story. Sometimes – indeed, almost all of
the time – you simply don’t want a single standard: Vegetarians don’t
want a great steak. Many people would rather click than type. The
English major fascinated by Chaucer doesn’t need a cyclotron. The
working mom often doesn’t want the same education as the parentally
funded 18-year-old.

And then there is the gigantic – but usually ignored – problem of

government failure: Government regulation and standardization is very
costly. It can be used to crush the opponents of the politically well-
connected rather than advance the common good. It can have crippling
unintended consequences. And, as former Dickinson College president,
Clinton-era Department of Education assistant secretary, and current
George Mason University professor A. Lee Fritschler made clear at the
discussion of the Pope Center’s paper, it also simply fails – a lot. Indeed,
based on his experience at the Department of Education, Fritschler is
adamant that the feds are simply incapable of effectively regulating
higher education. FISCALLY CONSERVATIVE BLOG FEEDS

So once again, Carey sees a mime’s box. This time, though, it’s not one he CBO: Democrats Bend Health
imagines entrapping libertarians, but one he thinks Washington can
drop on the ivory tower to make it work right. It’s a different box, but Care Cost Curve — in the Wrong
just as illusory.
Direction [Cato at Liberty— in
the Wrong Direction]
FISCALLY CONSERVATIVE BLOG FEEDS JUL 16, 2009 01:09P.M.

More Health Care Charts! [Cato This is too good. Directly from the ABC News blog post, “CBO Sees No
Federal Cost Savings in Dem Health Plans:”
at Liberty]
JUL 16, 2009 01:10P.M. Here’s a blow to President Obama and Democrats pressing
health care reform.
The U.S. Chamber of Commerce has two charts showing what health care
regulation looks like now… One of the main arguments made by the President and others
for investing in health reform now is that it will save the
federal government money in the long run by containing
costs.

Turns out that may not be the case, according to Doug

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

Elmendorf, director of the nonpartisan Congressional Budget if you don’t have development you have terrorists, and as
Office. Obama informed the New Yorker, ‘If you have ungoverned
spaces, they become havens for terrorists.’
Answering questions from Democrat Kent Conrad of North
Dakota at a hearing of the Senate Budget Committee today, These connections are global: in Obama’s words, ‘our security
Elmendorf said CBO does not see health care cost savings in and prosperity depend on the security and prosperity of
either of the partisan Democratic bills currently in Congress. others.’ Or, as a British foreign minister recently rephrased it,
‘our security depends on their development.’ Indeed, at times
Conrad: Dr. Elmendorf, I am going to really put you on the it seems that all these activities – building a state, defeating
spot because we are in the middle of this health care debate, the Taliban, defeating al-Qaida and eliminating poverty – are
but it is critically important that we get this right. Everyone the same activity. The new US army and marine corps
has said, virtually everyone, that bending the cost curve counter-insurgency doctrine sounds like a World Bank policy
over time is critically important and one of the key goals of document, replete with commitments to the rule of law,
this entire effort. From what you have seen from the economic development, governance, state-building and
products of the committees that have reported, do you see a human rights. In Obama’s words, ‘security and humanitarian
successful effort being mounted to bend the long-term cost concerns are all part of one project.’
curve?
This policy rests on misleading ideas about moral obligation,
Elmendorf: No, Mr. Chairman. In the legislation that our capacity, the strength of our adversaries, the threat posed
has been reported we do not see the sort of by Afghanistan, the relations between our different
fundamental changes that would be necessary to objectives, and the value of a state…
reduce the trajectory of federal health spending by a
significant amount. And on the contrary, the Stewart’s prognosis is at once dispiriting and fortifying. On the one hand,
legislation significantly expands the federal “it is unlikely that we will be able to defeat the Taliban.” More sharply,
responsibility for health care costs. “30 years of investment might allow its army, police, civil service and
economy to approach the levels of Pakistan. But Osama bin Laden is in
Formatting in original. Pakistan, not Afghanistan.” On the other, “the Taliban are very unlikely
to take over Afghanistan as a whole.” Why not?

It would require far fewer international troops and planes

FISCALLY CONSERVATIVE BLOG FEEDS than we have today to make it very difficult for the Taliban to
gather a conventional army as they did in 1996 and drive
Rory Stewart on the Deep tanks and artillery up the main road to Kabul.

Confusion Underpinning Our Even if – as seems most unlikely – the Taliban were to take
the capital, it is not clear how much of a threat this would
Afghanistan Strategy [Cato at pose to US or European national security. Would they repeat
their error of providing a safe haven to al-Qaida? And how
Liberty] safe would this safe haven be? They could give al-Qaida land
JUL 16, 2009 01:06P.M. for a camp but how would they defend it against predators or
US special forces? And does al-Qaida still require large
Rory Stewart has a terrific piece in the London Review of Books arguing terrorist training camps to organise attacks? Could they not
that Beltway foreign-policy thinkers are “minimising differences between plan in Hamburg and train at flight schools in Florida; or
cultures, exaggerating our fears, aggrandising our ambitions, inflating a meet in Bradford and build morale on an adventure training
sense of moral obligations and power, and confusing our goals” when it course in Wales?
comes to Afghanistan:
So what on earth are we doing? “No politician wants to be perceived to
Policymakers perceive Afghanistan through the categories of have underestimated, or failed to address, a terrorist threat; or to write
counter-terrorism, counter-insurgency, state-building and off the ‘blood and treasure’ that we have sunk into Afghanistan; or to
economic development. These categories are so closely linked admit defeat. Americans are particularly unwilling to believe that
that you can put them in almost any sequence or problems are insoluble; Obama’s motto is not ‘no we can’t;’ soldiers are
combination. You need to defeat the Taliban to build a state not trained to admit defeat or to say a mission is impossible.”
and you need to build a state to defeat the Taliban. There
cannot be security without development, or development
without security. If you have the Taliban you have terrorists,

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

A Better Way to Reform Health Schwartz: CDT Remains True to

Care [Cato at Liberty] Principles [Cato at Liberty]
JUL 16, 2009 12:57P.M. JUL 16, 2009 11:35A.M.

From my oped in today’s Investor’s Business Daily: Ari Schwartz asked me to post this response to my post from earlier
today:
As it turns out, “universal coverage” may not be so inevitable
after all. Much to the chagrin (and apparent surprise) of Jim,
President Obama and congressional Democrats, squabbling
has erupted in earnest over who will spring for the exorbitant Thank you for offering me the opportunity to respond to your post
cost. today.

Fortunately, Obama has an exit strategy: “If there is a way of As always, I take your criticism of me and CDT seriously. However, I
getting this done where we’re driving down costs and people think that this time, in suggesting that CDT has no principles, you are
are getting health insurance at an affordable rate, and have letting your strong biases get in the way of offering Cato’s blog-reading
choice of doctor, have flexibility in terms of their plans, and public some of the facts.
we could do that entirely through the market, I’d be happy to
do it that way.” 1) CDT does not support a National ID system. Our testimony makes it
clear that we believe that PASS ID prevents the creation of a National
Well, there is a way: Let individuals control their health care ID system — which is the opposite of creating one.
dollars, and free them to choose from a wide variety of health
plans and providers. If Congress takes those steps, innovation 2) The fact that CDT and Cato disagree on this issue does not mean that
and market competition will make health care better, more CDT is unprincipled. CDT takes the issue of principles very seriously, as
affordable, and more secure. all civil liberties groups must.

Our first concern is always to remain true to these principles. Staying

effective in Washington as a consensus-builder and doing so is a
FISCALLY CONSERVATIVE BLOG FEEDS constant source of internal and external discussion at CDT. As you
know, we are always willing to engage in private or public
In Which I Liken Wal-Mart to conversations with individuals who believe that we have not remained
true to these principles — as you seem to in this instance. I believe that
Josef Stalin [Cato at Liberty] we can have a better dialog if we begin the discussion there.
JUL 16, 2009 12:50P.M.
Thanks,
Well, kinda. Ari

In this oped for Kaiser Health News, I explain how the deals that the
Obama administration has struck with (some) drug companies, Wal-
Mart, and (some) hospitals are “the same old Washington game of FISCALLY CONSERVATIVE BLOG FEEDS
bribes, backroom deals, profiteering and protectionism — and a
harbinger of what health care will look like if the president’s reforms Thursday’s Daily News [The
succeed.”
Club for Growth]
JUL 16, 2009 11:29A.M.

THE DAILY NEWS Level The Playing Field For All Americans - Chris
Chocola, IBD Terrifying 57% Tax Looms on NY’s Biggest Earners - New
York Post Health Care: It’s Not An Option - IBD Editorial The Health
Care Reform Bill in Its Own Words - Jeff Dircksen, NTU Wrong Health
Reform Will Hurt Economy - Keith Hennessey, Politico A Very
Unhealthy Health Bill - Diana Furchtgott-Roth, RCM Paulson Admits
Pressuring Bank of America - Matthew Jaffe, ABC News How Many

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

Millionaires Did Your City Lose? - Robert Frank, WSJ Al Gore and FISCALLY CONSERVATIVE BLOG FEEDS
Friends Create Climate of McCarthyism - Bjorn Lomborg, RCP The New
Stars of the Blogosphere - Kelly Evans, WSJ Social Security Administration
Bureaucrats Have a Party…and
FISCALLY CONSERVATIVE BLOG FEEDS Taxpayers Pick Up a $700,000
Obama Adulation [The Club for Tab [Cato at Liberty…and
Growth] Taxpayers Pick Up a $700,000
JUL 16, 2009 11:25A.M.
Tab]
JUL 16, 2009 10:55A.M.

With so much money being squandered in Washington, $700,000 does

not even rise to the level of an asterisk. But when that much money is
FISCALLY CONSERVATIVE BLOG FEEDS being wasted so that senior bureaucrats from the Social Security
Administration can enjoy a party (oops, a training session) at a four-star
JEC/GOP Chart of House resort in Arizona, it becomes a symbol of Washington profligacy. Kudos
to ABC News for running a story on this travesty. Make sure to watch the
Democrats’ Health Plan [Cato at embedded video of bureaucrats “reducing stress” at your expense:

Liberty] . . . nearly 700 executives from the Social Security

JUL 16, 2009 11:00A.M. Administration (SSA) gathered for a lavish three-day
conference in Phoenix, AZ last week, costing taxpayers about
I was on the Glenn Beck Show yesterday… $700,000. . . . The conference, which included a performance
by a motivational dance company that was captured on tape
…talking about this rendering of the House Democrats’ 1,018-page by Phoenix affiliate ABC15, was held at the Arizona Biltmore,
health care plan: a hotel described as the “Jewel of the Desert” with an oasis of
39 acres of lush gardens, swimming pools and a golf course.
SSA executives were invited to join in the dancing.

FISCALLY CONSERVATIVE BLOG FEEDS

Sotomayor Playing Out the

Clock [Cato at Liberty]
JUL 16, 2009 10:38A.M.

As she began to do more and more yesterday, the nominee has started
today’s hearings with a series of painfully drawn-out non-answers to
Senator Kyl’s questions.

Kyl is pointing out the conflict between Sotomayor’s claim that in Ricci
she was simply following precedent and the Supreme Court’s finding that
there was no precedent on point—and so Sotomayor’s panel summary
That’s you all the way on the left, and your doctor/hospital all the way on
disposition was improper.
the right.

Sotomayor’s responses have ranged from explaining again the

What could be simpler? procedural posture of the case, to references to irrelevant background
cases (not binding precedent), to recounting en banc voting procedures
in the Second Circuit. It is clear that, even as the Republicans reload and

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

regroup at every break and recess, Sotomayor has been counseled to talk FISCALLY CONSERVATIVE BLOG FEEDS
and talk—again, in an excruciatingly slow rate—without really saying
anything. Back to the Bad Old Days of
CP Townhall
High Marginal Tax Rates [Cato
at Liberty]
JUL 16, 2009 09:03A.M.
FISCALLY CONSERVATIVE BLOG FEEDS
As Mike Tanner has written, the health care bill means a big tax hike —
Congress Abolishes Health Care indeed, a lot of tax hikes. It also means a reversal of one of President
Ronald Reagan’s great achievements, bringing down the top marginal
Scarcity? [Cato at Liberty] income tax rate.
JUL 16, 2009 09:05A.M.
Reports the Washington Times:
Reading the New York Times’s coverage of a Senate committee’s recent
vote on health care legislation, I was struck by the following statement Small-business owners are warning that the economy would
from Sen. Dodd: suffer under a health care bill proposed by House Democrats,
which would drive tax rates for high-income taxpayers to
If you don’t have health insurance, this bill is for you,” said levels not seen since before President Reagan’s tax reform of
Senator Christopher J. Dodd, Democrat of Connecticut, who 1986.
presided over more than three weeks of grueling committee
sessions. “It stops insurance companies from denying The top federal income tax rate, which Mr. Reagan and a
coverage based on pre-existing conditions. It guarantees that bipartisan Congress lowered from 50 percent to 28 percent,
you’ll be able to find an insurance plan that works for you, would reach 45 percent in 2011 if Congress and President
including a public health insurance option if you want it.” Obama enact the surtaxes that are part of the health care
reform plan that House Democrats announced Tuesday.
The bill would also help people who have insurance, Mr.
Dodd said, because “it eliminates annual and lifetime caps on Small-business owners, who would take a direct hit from the
coverage and ensures that your out-of-pocket costs will never surtaxes, expressed dismay over the proposal, saying it would
exceed your ability to pay.” force them to curtail hiring and reduce wages amid the worst
recession in a generation.
A basic understanding of economics should tell you this can’t be right.
The federal government and the insurance industry have limited “If they institute a 5 percent surtax on income, it will have a
resources; the demand for health care is potentially unlimited. severe impact on small businesses that are already hurting,”
Therefore, no conceivable legislation can ensure that the demand for said Michael Fredrich, whose Wisconsin company, MCM
health care will never exceed the resources available to pay for it. All Composites, molds plastic parts.
legislation can do is to shift who controls the allocation of scarce health
care dollars—in this case away from patients and insurance companies “We run maybe three days a week, sometimes four days a
and toward the federal government. Reasonable people can disagree week, sometimes zero days,” he said. “I can tell you that at
about whether that’s an improvement, but it’s disingenuous to pretend some point, people … running a small business are just going
that any legislation could “eliminate” caps on coverage or “ensure” that to say, ‘To hell with it.’ “
health care wants will never outstrip our ability to pay for them.
Individuals tend to focus on their tax burden. After all, our overall tax
bill reflects the amount of money we lose as legislators speed about the
country allegedly “serving” us while promoting their own political ends.

Marginal tax rates more directly affect decisions on saving, investment,

business formation, work effort, job creation, and more. Even
politicians not enamored of the “rich,” whatever that term means, should
recognize that we all benefit from an economic system which encourages
entrepreneurship.

Proponents of big tax hikes might want to recall Aesop’s Fable, The
Goose that Laid the Golden Eggs. Wreck the economy, and the health

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

care system will crash too. recognize on Colonel Sanders. His lapel doesn’t carry the
standard-issue flag pin but a bronze bust of his dog, Chip.
The Belgian tervuren won it in a dog show.

FISCALLY CONSERVATIVE BLOG FEEDS O’Toole routinely hikes and bikes dozens of miles, and he
proudly announces that he has never driven a car to work.
We Can No Longer Afford an Far from living on a luxurious Virginia manor, he left his last
Oregon town when it added a third stoplight.
Education Monopoly [Cato at
Now, from his home computer in Camp Sherman, Ore.,
Liberty] population 300, O’Toole rails against smart-growth policies
JUL 16, 2009 08:59A.M. as money sponges that never calm traffic, fill seats on trains,
or help the environment.
In an IBD op-ed today, I point out that we’re spending twice as much per
pupil as we did in 1970, despite no improvement in achievement at the The story ends with Randal on his way to a conference in Las Vegas,
end of high school and a decline in the graduation rate over that same which I also attended. There in the 80-degree early morning heat, he
period. biked 50 miles each morning, on a folding bicycle that he could fit into a
suitcase – and still got back to the hotel in time to fix my Powerpoint
What difference does that make? If public schools had just managed not before my speech. He’s a Renaissance man.
to get any less efficient over the past 40 years, we’d be saving $300
billion annually.

Our education monopoly is a luxury we can no longer afford. When the FISCALLY CONSERVATIVE BLOG FEEDS
economy was booming, it didn’t matter that it cost us more and more
every year for the same or even inferior results. These days, it’s becoming Review of the Big REAL ID
imperative that we find ways for our education system to enjoy the same
relentless increases in efficiency that we take for granted in every other Hearing [Cato at Liberty]
field. JUL 16, 2009 08:50A.M.

This, for instance, would be a good start. The Senate Homeland Security and Governmental Affairs Committee
held a hearing yesterday on the REAL ID Act and the REAL ID revival
Economic urgency isn’t the only good reason to bring education back bill, known as PASS ID. I attended and want to share with you some
within the free enterprise system, but when the school monopoly starts highlights.
bringing entire states to their financial knees, it’s certainly one we should
take seriously. Good News!

Little good came from the hearing, as it was primarily focused on how to
get the states and people to accept a national ID. But there is some good
FISCALLY CONSERVATIVE BLOG FEEDS news.

Randal O’Toole Takes on Smart First, Department of Homeland Security Secretary Janet Napolitano
declared REAL ID dead (much as I did in my testimony two-plus years
Growth in the NYT [Cato at ago). “DOA” is how she referred to it.

Liberty] She also said that no state will be in compliance with REAL ID by the
JUL 16, 2009 08:52A.M. current December 31, 2009 deadline. This is important because a lot of
people think that states doing anything about the security of drivers’
The New York Times has a long profile today of Cato’s Randal O’Toole, licenses and ID cards are complying with REAL ID.
scourge of urban planners.
Another highlight was the commentary of Senator Roland Burris (D-IL).
But O’Toole doesn’t fit the portrait of a corporate advocate. He is a beleaguered outsider to the Senate and evidently wasn’t coached
On visits to Capitol Hill, he blends in as a middle-aged, on the talking points around REAL ID and PASS ID. So he flat out asked
middle-height man in a dark suit — but his beard gives him why we shouldn’t just have “a national ID.”
away, its shaggy twists seemingly fitting for a forest dweller.
He wears a string tie that most Americans would only Senator Susan Collins’ (R-ME) nervous smile was particularly noticeable

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

when Burris asked why the emperor had no clothes. No one was security benefits. Assumes? He and his staff apparently haven’t
supposed to talk about national IDs at this hearing! But that’s what PASS familiarized themselves with the level of national security that a national
ID is. ID would create, taking into account the counterattacks and
complications of such a system.
REAL ID and PASS ID are two versions of the same national ID system,
and nobody is denying it. That’s good news because the effort to rebrand Five years after the vaunted 9/11 Commission report - and the three-
REAL ID through PASS ID has failed. quarters of a page it devoted to identity security - Senator Lieberman,
the chairman of a committee dealing with domestic security, has yet to
A Fake Crisis look into the merits.

Some other issue-framing is worth pointing out. Chairman Lieberman In case Senator Lieberman needs some help . . .
and Secretary Napolitano took pains to point out the importance of
acting on PASS ID soon, claiming that the TSA would have to seriously I’m So Sick of the 9/11 Commission Report!
inconvenience travelers with secondary searches at the end of the year if
nothing was done. Speaking of the 9/11 Commission, it has been five years since that report
came out, and people continue to parrot the line that REAL ID was a
But this is the same “crisis” that the DHS navigated a little over a year “key 9/11 Commission recommendation.”
ago. States across the country were refusing to implement REAL ID. The
DHS Secretary rattled his saber about inconveniencing travelers. And the The 9/11 Commission dedicated three-quarters of a page to the question
DHS Secretary ended up giving all states a deadline extension. Secretary of identity security, out of 400+ substantive pages. Its entire treatment
Napolitano will do the same thing if PASS ID fails - saber-rattling of the subject is on page 390.
included. There is no crisis.
The 9/11 Commission did not articulate how a national ID system would
Vermont Governor Jim Douglas Supports a National ID defeat future terror attacks. It did not even articulate how a national ID
would have defeated the 9/11 attacks had it been in place. A minor shift
As I noted above, PASS ID is a national ID, just like REAL ID. in behavior by the 9/11 attackers, such as using their passports to board
planes, would have defeated REAL ID and PASS ID, were we somehow
By testifying in support of PASS ID, Vermont governor Jim Douglas (R) allowed “do-overs.”
put himself on record as supporting a U.S. national ID. He can pretend
it’s not a national ID, of course, and he did his best to paper over the We are not allowed “do-overs,” and the problem we face is not 9/11, but
issue when Senator Burris asked about it. But Governor Douglas securing against current and future threats - including people who might
supports a national ID. shift their behavior in light of security measures we take.

There was a time when Republicans stood for resisting federal incursions These shifts in behavior might include taking a few extra steps to get the
on state power. In the 104th Congress, the Senate Judiciary Committee documentation they need, for access to the country or targets. These
had a subcommittee that focused on federalism and the preservation of shifts in behavior might include attacking targets that do not require
state power (the Subcommittee on the Constitution, Federalism, and documentation. Identity-based security is a Maginot Line.
Property Rights). But the National Governors Association, with Douglas
at the helm, is now in the process of negotiating the sale of state power The 9/11 Commission report was written at a time when little research
over driver licensing and identification policy to the federal government. on identity-based security had been done. It was written by fallible
humans who knew little about identity-based security, and who got it
Rampant Security Ignorance wrong. The report is not a religious text.

The reason why he supports this national ID law, Governor Douglas said, The report did say something important, though: “For terrorists, travel
is that he, like every governor, “is a security governor.” documents are as important as weapons”! (page 384) It’s a terrific turn
of phrase because it shuts down the logic centers in the brain - eek,
With so many Senators and panelists conjuring security and the 9/11 terrorists! - and ends the discussion.
Commission report, it would be a delight if someone actually examined
the security benefits of a national ID. The information is there for them. The “travel documents” the report was talking about, though, were
Again, my testimony to the committee two years ago supplied at least passports and visas, not drivers’ licenses and birth certificates - the
some. Then, I said, “Implementation of REAL ID would impose more things foreign terrorists use to get into the country. If we’re going to turn
costs on our society than it would provide in security or other benefits,” the driver’s license into an internal passport - and TSA checkpoints are
and I articulated how and why a national ID fails to secure. the beginning of such a policy - then perhaps these are travel documents.
Just, please, Secretary Napolitano, train your TSA agents to not say,
But Senator Lieberman said he “assumes” REAL ID provides national “Your papers, please.”

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Today’s Tabbloid PERSONAL NEWS FOR lgn@[Link] 17 July 2009

Even as to international travel documents, though, the 9/11 Commission fig leaf obliged to wear a fig leaf himself.
got it wrong. Weapons are the only things as important as weapons. And
the 9/11 terrorists didn’t actually use weapons any more substantial than And this is the unexpected bad news from the hearing. The Center for
box cutters. They “weaponized” a non-weapon. (Security is complicated, Democracy and Technology unequivocally supports having a national ID
you see.) in the United States.

Denying terrorists travel documents, drivers’ licenses, and IDs simply Many would find this inexplicable, but it’s not. Though the people who
presents them some inconveniences - such as using people with no work at CDT personally want very much to do the right thing, there are
record of terrorism. Seventeen of nineteen 9/11 attackers were unknown no principles to the organization beside compromise and having a seat at
to U.S. officials as threats, so it’s obviously not that much of an the table (neither of which are actually principles, of course).
inconvenience.
CDT plays a wonderful convening role on many issues, and the name of
Evading identity-based security is so easy. People do it all the time. And the organization implies that it reconciles technology programs with
it won’t stop under anyone’s version of a national ID. But the 9/11 fundamental societal values. But here it has given political cover to the
Commission said . . . ! push for a national ID in the United States. One can’t help wondering if
there is anything that would cause CDT to push back from the table and
Something New to Worry About say No.

Much of the national ID battle happens at the federal level with these
national ID laws, of course, but it’s important to realize that federal
officials, state officials, companies, and non-profit groups are working to
knit together a cradle-to-grave national ID system no matter what
happens with REAL ID and PASS ID.

Here’s one worth highlighting: Thirteen states apparently are already

scanning, or have scanned, their birth certificates into databases for use
in the national ID system. The effort is being led by the National
Association for Public Health Statistics and Information Systems in
Silver Spring, Maryland. This group will undoubtedly have access to your
private health information should federal e-health records be
implemented, so you might want to familiarize yourself with them.

Is your state one of them? How many copies of your birth certificate can
be found in how many places around the country? You might want to ask
your state legislators about that. The future of this effort is to collect
biometrics at birth, of course. This is a privacy problem.

But maybe all the privacy concerns have been taken care of. The
proponents of REAL/PASS ID found themselves a fig leaf on that score.

Token Cover on Privacy Issues

Ari Schwartz from the Center for Democracy and Technology testified in
favor of PASS ID. (Senator Akaka noted in his opening statement that
CDT endorses PASS ID.)

He characterized opponents of REAL/PASS ID as wanting to “do

nothing.” It’s a classic ploy - but cheaper than we’re used to seeing from
Ari and CDT - to mischaracterize opponents as wanting to “do nothing.”
As Ari knows well, I have advocated endlessly for a diverse and
competitive identification and credentialing system that would provide
all the security ID systems can, without government surveillance.

But Ari testified imaginatively about how PASS ID makes a national ID

okay. He has concerns with it, of course, yadda yadda yadda - the privacy

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