Wednesday, July 22, 2009

Intimidator in Chief: Bullying CBO

Bullying CBO. WSJ Editorial
Intimidator in Chief
WSJ, Jul 23, 2009

The Washington Post recently ran a story quoting Democrats as bragging that President Obama has deliberately patterned his legislative strategy after LBJ’s, circa 1965.This may explain the treatment of Douglas Elmendorf, the director of the supposedly nonpartisan Congressional Budget Office who last week told Congress that you can’t “save” money on health care by having government insure everyone.

For that bit of truth-telling, he was first excoriated by Senate Majority Leader Harry Reid. Then he was summoned, er, invited to the White House for an extraordinary and inappropriate meeting Monday with President Obama and a phalanx of economic and health-care advisers.

Writing on his blog after news of the meeting became public, Mr. Elmendorf diplomatically noted that “The President asked me and outside experts for our views about achieving cost savings in health reform.” No doubt he did. But Mr. Elmendorf, a Democrat, will also have received the message that continuing apostasy will not be good for his future political career.

As Douglas Holtz-Eakin, the Republican who ran CBO from 2003 to 2005, put it, “The only appearance could be that they’re leaning on him. CBO was created for Congress, for independent analysis. The White House did him [Elmendorf] a terrible disservice.” On second thought, perhaps we’re being unfair to LBJ, whose method was a combination of muscle and flattery. Mr. Obama learned his methods in Chicago.

DLC: More Growth, Less Gridlock: Toward a New Trade Agenda

More Growth, Less Gridlock: Toward a New Trade Agenda. By Edward Gresser
DLC Policy Report, July 20, 2009

Editor's Note: The full text of this report is available in PDF format.

Executive Summary

Trade policy has made little progress over the last decade. Since 2000, the U.S. has reached no major multilateral trade agreement and has left its own trade regime static. The WTO's Doha Round has been stalled for years, and in the Bush era trade debates devolved into a series of emotional arguments over a free-trade agreement program that touches only a small fraction of America's trade and has had little impact on growth, employment or national security.

President Obama has a chance for a fresh start, and in most ways his global-economy policy has in most ways started out very well. The administration has taken a strong line against the revival of protectionism, which, as history has taught us, would otherwise pose a threat to recovery from the financial crisis. Policymakers have worked with Congress to ease public anxieties through a major expansion of Trade Adjustment Assistance (TAA), and the White House has embraced an ambitious Strategic and Economic Dialogue with China on macroeconomics, climate change and security policy. Focus is now turning toward legislation that would upgrade the Food and Drug Administration's (FDA) inspection systems.

Trade liberalization has been slower to show progress. This reflects the fact that the trade agenda Obama inherited contributes much less than trade policy could to his new administration's main economic and foreign policy goals.

Over the next year, the administration needs first to clear the decks, and then shift the trade agenda to one that directly supports its top objectives: recovery from crisis, improved relations with the world generally and Muslim states in particular, and developing new, high-tech sources for America's future growth, innovation and high-wage employment. As the Obama administration works to pull the nation out of its economic crisis, trade policy should accordingly work to spur growth by promoting innovative new industries and clean technologies at home, and by supporting the globe's poorest citizens and reconciliation with the Muslim world.

Today's agenda has three big problems:

Archaic Tariffs: First, the U.S. trade regime contains archaic tariffs that fail to protect jobs, but are very effective at obstructing growth and job creation in poor countries and large majority-Muslim states. In so doing, the incumbent tariff regime conflicts with America's development and security goals. To date, the administration has not proposed any major overhaul.

Stalled Free Trade Agreements: Second, the Free Trade Agreement (FTA) program that has dominated trade debate for the last decade is delivering only modest results for the U.S. and poor results for our partners, while creating intense discord. The FTA program's effectiveness seems to be waning anyway, as companies value the flexibility of global supply chains more than the tariff benefits they receive through compliance with FTA rules of origin.

The Doha Hurdle: Third, the intense focus on agriculture in the Doha Round of the World Trade Organization (WTO), though a good idea in its own right, has not led to multilateral trade progress on farm trade reform, but has nevertheless blocked potential progress on larger industrial sectors.

The administration and its chief trade negotiator, U.S. Trade Representative Ron Kirk, face a daunting challenge in clearing the decks of the agenda they inherited. Over the next year, Kirk should work to pass the remaining three free trade agreements (with Panama, Korea and Colombia) and then shelve efforts to promote additional FTAs for the time being. Meanwhile negotiators should make a major effort to conclude the Doha Round.

Once the decks are cleared, the administration should center trade policy on a new agenda that does more for American economic and national security. This new agenda would include:

Tariff Reform: Providing broad tariff waivers for the low-income countries and large majority-Muslim states now excluded from the FTA network and other, more ambitious preference programs.

Broad, Sectoral Agreements: Concluding WTO "sectoral" agreements among the world's major economies (though not necessarily all WTO members) covering goods and services in the big new industries likely to be the sources of growth, innovation and job creation for the United States in the next decade, including information and media industries, health technology and services, clean energy and environmental technologies.

Regional Initiatives: Promoting regional initiatives with Europe and Asia, which should be focused not on existing disputes or regulatory issues, but on issues likely to emerge in the next decade: the treatment of nanotechnology, biotechnology, privacy and other technologically driven issues. Additionally, or alternatively, the Obama administration should work to rationalize the existing fragmented FTA networks in Latin America and the Pacific.

Download the full report

Ed Gresser is a Senior Fellow and Director of the DLC's Global Economy Project.

Delivery of US Assistance to Aid Pakistan's Crisis Response

Delivery of U.S. Assistance to Aid Pakistan's Crisis Response
Bureau of Public Affairs, Office of the Spokesman, Washington, DC, July 22, 2009

Special Representative for Afghanistan and Pakistan Richard C. Holbrooke announced today that $165 million in U.S. funds are being committed to programs for humanitarian relief, early recovery, and long-term reconstruction efforts to support the internally displaced in Pakistan. The distribution of these previously pledged funds will boost the capacity of critical programs to meet the changing needs of displaced families in Pakistan.

The $165 million will be channeled both to meet the ongoing needs of displaced persons, located in camps and in host communities, and also to address the needs of families as they return to rebuild their homes and communities in the North-West Frontier Province (NWFP) of Pakistan.


· $45 million will be provided by the U.S. Agency for International Development (USAID) to support locally driven rehabilitation of basic infrastructure, including: water systems; health facilities; schools; roads; and bridges – maximizing the use of local labor and resources.

· $30 million will be contributed by USAID for small-scale infrastructure and community development grants for displaced families in NWFP.

· $25 million will be provided by USAID to give families resources needed to rebuild their homes and livelihood. This will be facilitated through community-driven, quick-impact cash-for-work programs in areas of reconstruction and return. This could include removal of rubble and rehabilitation of irrigation systems in conflict-affected areas. As part of this assistance, USAID will support Pakistani government efforts to rebuild public buildings and facilitate the return of civil servants.

· $23 million will be contributed to the UN High Commissioner for Refugees (UNHCR) from the State Department’s Bureau for Refugees, Population and Migration (PRM) for humanitarian relief and managing the voluntary return of displaced families to their homes. This includes providing emergency shelter and non-food items to camps managed by UNHCR, as well as to displaced families in host communities. It also includes protecting children from violence and reuniting unaccompanied children with their parents, and funding facilitated transportation to assist the Pakistani authorities to support the return of displaced people to their homes.

· $20 million will be provided by USAID to rebuild education infrastructure across Dir, Swat, and Buner. More than 315 schools in NWFP have been damaged or destroyed due to the Taliban insurgency, and nearly 4,000 more are serving as informal camps for approximately 200,000 internally displaced persons.

· $12 million will be contributed to the International Committee of the Red Cross (ICRC), from the State Department’s bureau for refugees, to be used for humanitarian operations and assistance for returning families as they rebuild their lives. This includes support for operations that assist displaced families in host communities and in camps run by the Pakistan Red Crescent Society/ICRC, help for those who need to trace their family members, and provision of aid to people living in conflict-affected areas.

· $10 million will be provided by USAID’s Office of Foreign Disaster Assistance (OFDA) for immediate livelihood and agriculture programs, mobile health clinics in Buner and Swat, and cash-for-work activities. As part of this assistance, OFDA will provide tool kits valued at approximately $2 million, which will be distributed through the International Organization for Migration (IOM) and will include supplies such as shovels, pickaxes, and hammers.

Much of this money was included in the Obama Administration’s supplemental appropriation for Pakistan last month, and the new disbursements will enable UNHCR, ICRC, IOM and other courageous relief organizations to more effectively and expeditiously serve the Pakistani people.

In addition to new programs from existing financial commitments, the State Department will provide a new grant of nearly $1 million that will allow the Pakistani government to work with U.S. and Pakistani telecom companies to deploy an SMS-text messaging system designed to help displaced families obtain critical information from the government, international relief agencies, and local community members.

Today’s announcement is a further indication of the American people’s commitment to support the Pakistani people in their time of need. Since May 2009, the Obama Administration has committed more than $320 million to the Pakistani people to help them respond to this crisis. In addition to its own contributions, the U.S. Government has also actively encouraged financial contributions from other countries.

PRN: 2009/764


Arrogance. By John Stossel
RealClearpolitics, July 22, 2009

It's crazy for a group of mere mortals to try to design 15 percent of the U.S. economy. It's even crazier to do it by August.

Yet that is what some members of Congress presume to do. They intend, as the New York Times puts it, "to reinvent the nation's health care system".

Let that sink in. A handful of people who probably never even ran a small business actually think they can reinvent the health care system.

Politicians and bureaucrats clearly have no idea how complicated markets are. Every day people make countless tradeoffs, in all areas of life, based on subjective value judgments and personal information as they delicately balance their interests, needs and wants. Who is in a better position than they to tailor those choices to best serve their purposes? Yet the politicians believe they can plan the medical market the way you plan a birthday party.

Leave aside how much power the state would have to exercise over us to run the medical system. Suffice it say that if government attempts to control our total medical spending, sooner or later, it will have to control us.

Also leave aside the inevitable huge cost of any such program. The administration estimates $1.5 trillion over 10 years with no increase in the deficit. But no one should take that seriously. When it comes to projecting future costs, these guys may as well be reading chicken entrails. In 1965, hospitalization coverage under Medicare was projected to cost $9 billion by 1990. The actual price tag was $66 billion.

The sober Congressional Budget Office debunked the reformers' cost projections. Trust us, Obama says. "At the end of the day, we'll have significant cost controls," presidential adviser David Axelrod said. Give me a break.

Now focus on the spectacle of that handful of men and women daring to think they can design the medical marketplace. They would empower an even smaller group to determine -- for millions of diverse Americans -- which medical treatments are worthy and at what price.

How do these arrogant, presumptuous politicians believe they can know enough to plan for the rest of us? Who do they think they are? Under cover of helping uninsured people get medical care, they live out their megalomaniacal social-engineering fantasies -- putting our physical and economic health at risk in the process.

Will the American people say "Enough!"?

I fear not, based on the comments on my blog. When I argued last week that medical insurance makes people indifferent to costs, I got comments like: "I guess the 47 million people who don't have health care should just die, right, John?" "You will always be a shill for corporate America."

Like the politicians, most people are oblivious to F.A. Hayek's insight that the critical information needed to run an economy -- or even 15 percent of one -- doesn't exist in any one place where it is accessible to central planners. Instead, it is scattered piecemeal among millions of people. All those people put together are far wiser and better informed than Congress could ever be. Only markets -- private property, free exchange and the price system -- can put this knowledge at the disposal of entrepreneurs and consumers, ensuring the system will serve the people and not just the political class.

This is no less true for medical care than for food, clothing and shelter. It is profit-seeking entrepreneurship that gave us birth control pills, robot limbs, Lasik surgery and so many other good things that make our lives longer and more pain free.

To the extent the politicians ignore this, they are the enemy of our well-being. The belief that they can take care of us is rank superstition.

Who will save us from these despots? What Adam Smith said about the economic planner applies here, too: The politician who tries to design the medical marketplace would "assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it."

Copyright 2009, Creators Syndicate Inc.