AEI » Latest Content American Enterprise Institute: Freedom, Opportunity, Enterprise Sun, 25 Jan 2015 20:47:15 +0000 en-US hourly 1 The school choice journey: A conversation featuring US Senator Tim Scott Tue, 06 Jan 2015 22:15:02 +0000 If you have trouble registering, please contact

The impact of school choice in America is about more than improved student test scores. School choice has the potential to inspire political activism among low- and moderate-income parents and families. In their thought-provoking new book, “The School Choice Journey: School Vouchers and the Empowerment of Urban Families” (Palgrave Macmillan, 2014), researchers Thomas Stewart and Patrick Wolf track the experiences of families participating in the DC Opportunity Scholarship Program, the first federally funded school voucher program based in the District of Columbia. They find that parents look to several factors when choosing a school for their child, and the impacts of school choice on parents and families go far beyond anything that can be measured by a standardized test.

We welcome you to join us at AEI during School Choice Week as US Senator Tim Scott (R-SC), Stewart, and Wolf discuss “The School Choice Journey” and why promoting school choice is important to expanding the range of education opportunities for every student in the United States, regardless of zip code.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

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Texas, the ‘great American job machine,’ is solely responsible for the +1.2M net US job increase since 2007 Fri, 23 Jan 2015 23:30:59 +0000 ...]]]> texasjobs1

The Texas Workforce Commission released state employment data today for the month of December, and job growth in the Lone Star State continues to lead, and in fact carry the nation’s improving labor market as the chart above shows. Here are some highlights of the December employment report for Texas:

1. Texas ended the year with the state’s largest ever year-over-year payroll gain with the eye-popping addition of 457,900 new jobs between December 2013 and December 2014. That’s more than 1,700 new payroll jobs that were added every business day last year in the Lone Star State, and 220 new jobs every business hour or almost 4 new jobs added every minute!

2. In just the last month of December, which marked the 51st consecutive month of employment growth, Texas added 45,700 new payroll jobs, which was more than 2,000 jobs every business day, almost 260 jobs every hour, and more than 4 new jobs every minute! The strong job growth in December brought the state’s jobless rate down to 4.6%, the lowest Texas unemployment rate since May 2008.

3. Total December employment in the Lone Star State reached a new record high of 12.45 million workers (11.783 million nonfarm payroll jobs and another 667,000 self-employed and farm workers), which was above the December 2007 level by 1,444,290 jobs (and by 13.1%), see chart above. In contrast, total employment at the end of the year in the rest of the country (US minus Texas) still remained 275,290 jobs below the pre-recession, December 2007 level (see chart above).

It’s a pretty impressive story of how job creation in just one state – Texas – is solely responsible for the 1.169 million net increase in total US employment (+1,444,290 Texas jobs minus the 275,290 non-Texas job loss) in the seven year period between the start of the Great Recession in December 2007 and December 2014. The other 49 states and the District of Columbia together employ about 275,000 fewer Americans than at the start of the recession seven years ago, while the Lone Star State has added more than 1.25 million payroll jobs and more than 190,000 non-payroll jobs (primarily self-employed and farm workers).

And while the oil and gas boom has certainly contributed to making Texas the nation’s No. 1 job creating state by far, the job gains in the Lone Star State have been pretty broadly based across many different sectors and industries. In percentage terms, the 11.5% payroll job gain in the “mining and logging” sector led the state’s 11 industries for job growth last year as that sector added 4,900 new jobs in 2014. An even greater absolute number of new jobs – 47,500 – were added in the state’s booming construction industry, which grew by 7.7% last year. As one example that highlights the construction boom in Texas, there were more permits for single-family homes issued last year through November in just one Texas city – Houston (34,566) – than in the entire state of California (34,035) over the same period. Other sectors with job growth last year above the state’s average payroll increase of 4% include financial activities (+5.1% and +34,800 new jobs) and professional and business services (+5.8% and +85,800 new jobs).

Bottom Line: Texas clearly deserves the title of America’s “economic miracle state.” It’s the most important energy-producing state in the US, and now produces so much crude oil that the state’s daily production of more than 3 million barrels represents more than 37% of the nation’s crude oil and would rank the Lone Star State as the world’s sixth largest oil producer as a separate country. Along with the gusher of shale oil and gas in Texas has come a gusher of more than 1.44 million new jobs since the start of the Great Recession, while the rest of the US hasn’t even yet recovered all of the non-Texas jobs lost during the recession, and employs 275,000 fewer people than in December 2007. Without the strong support of the Texas job machine and without the economic stimulus of the perfectly-timed shale revolution, the Great Recession would have been much longer and more severe, and the current US economic recovery and job market would be much weaker than it is today. Simply put, “Saudi Texas” is the shining star of The Great American Shale Boom, and the American state at the forefront of the US economic recovery.

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Analyzing the Single Point of Entry Strategy: Kupiec & Wallison on the Federalist Society Fri, 23 Jan 2015 22:01:50 +0000 ]]> 0 Event transcript: A Congressional roadmap for rebuilding our nation’s military Fri, 23 Jan 2015 22:00:59 +0000 AMERICAN ENTERPRISE INSTITUTE






10:00 AM – 11:00 AM



JIM TALENT: Welcome everybody. I’m Jim Talent, a senior fellow at the American Enterprise Institute and former senator from Missouri. It’s a great pleasure to be emceeing this event, which means I’ll introduce our honored guest and then have an opportunity to chat with him for a couple of minutes before we take your questions. So be thinking of those questions and when you ask them please wait for the microphone, identify yourself, and then make certain you’re asking a question rather than making a statement and we’d all appreciate that.

It was very encouraging for me personally when this gentleman, as expected, took over the House Armed Services Committee in this Congress. His predecessor did a great job fighting for the capabilities of America’s armed forces in a very difficult time. And it is a difficult time for the United States and for our military. And one of the encouraging things is to have our guest today in a position of such influence.

Mac Thornberry went into the Congress 20 years ago, in 1995, two years after I went in. Sometimes you spot somebody when they’re new and you recognize that they are capable of and will make a tremendous contribution to the nation’s interest over time because of their judgment, their integrity, their willingness to work, and their charity, their understanding that Congress is a place of people with different views. You have to understand how to persuade people on their terms about what’s important for the country.

And this is the man we have with us today. I’m not going to praise him too much because it will just embarrass him, but it’s wonderful that he’s chairing the Armed Services Committee. It’s gracious of him to be willing to make remarks and to share his time with us today. And without any further ado, I’ll introduce my friend and the new chairman of the House Armed Services Committee Mac Thornberry. (Applause.)

REPRESENTATIVE MAC THORNBERRY (R-TX): Well, thank you, Jim, and I appreciate your words and I appreciate you and your colleagues here at AEI hosting us today and as well all of you all’s contributions to the national debate on national security.

You know, being selected by my colleagues to chair the Armed Services Committee is certainly a great honor, but it’s also a great responsibility. The first and I believe foremost job of the federal government is to defend the country and our people. And Congress has a unique and irreplaceable role in carrying out that duty.

When I walk into our main committee room and see the portraits of some of the former chairmen in there, I find myself wishing for a little Harry Potter magic because if you’ll remember, at Hogwarts, the headmaster could consult with his predecessors by talking to their portraits. Unfortunately, I haven’t found any of them who will talk back to me yet, but I’m still hoping. And I’m certainly honored to join their ranks.

But I’m also sobered by the challenges ahead, for I don’t believe that any of my predecessors faced such a wide array of complex national security challenges as we face today. From the renewed aggression of major nuclear powers to grappling with new domains of warfare to failed states, terrorism, horrible diseases, the list of security challenges is certainly long.

The head of the British defense staff, General Sir Nick Houghton, said last month that the world is becoming a more dangerous, less certain, less predictable, and more unstable place. And I don’t know of many people who would disagree with him about that. The dangers are swirling around out there, what Macaulay called the red whirlwind, and Americans and American interests are, inevitably, swept up into it.

We know that Americans are uneasy. A poll in November found that 78 percent felt the threats to our security are increasing and 60 percent felt that we are less secure than we were a year ago. I suspect that in the last few days, after Paris, those numbers are even higher.

I mentioned those committee portraits. One of them is of Chairman Carl Vinson. As you all may remember, Vinson’s tenure in Congress was long, about 50 years. He came in with the Springfield rifle and he left with the ICBM. He has an aircraft carrier and our main committee hearing room named after him. Admiral Nimitz said that Vinson forgot more about the Navy than most Admirals will ever know. So, needless to say, if any of those pictures do start talking back to me, I hope it’s his.

But in the 1930s, a time when threats were large and budgets were tight, Vinson took up the cause of naval modernization. The New Deal and social spending dominated the budget. And although the threats from Germany and Japan were increasing, defense dollars were pretty scarce. But Vinson insisted on buying new ships. We’re a maritime nation, and a maritime nation needs a modern navy, he believed. And so after a tough fight, he got his way.

So in the 1930s, three large ship-hulls were laid down. And those three ships became the carriers Enterprise, Hornet, and Yorktown, which sank four Japanese carriers at the Battle of Midway, the turning point of the Pacific. Three thousand Japanese soldiers, I mean sailors, were killed that day, but it could have been 3,000 Americans if it had gone the other way. So when I talk about the job being somewhat sobering, that’s part of what I’m thinking about.

If Vinson were here today, he might find a very familiar political landscape and very similar frustrations. The deliberate ignorance of danger, the want of strategic forethought, infinite demands to spend money elsewhere, all part of the rhythms that Churchill called mournfully the endless repetitions of history.

Fortunately, for the Battle of Midway, Congress got it right. That doesn’t mean Congress always gets it right. The Congress – I mean the country — paid a heavy price in the early days of World War II and in Korea, and you might even argue on 9/11, because our national leaders did not see, or chose to ignore, approaching dangers.

Congress consists of 535 human beings from all over the country, from all walks of life, with all our accumulated talents and all our faults. So what is this imperfect body’s proper role when it comes to national defense? Well, in the Constitutional Convention, the Founders gave certain powers to Congress, which they viewed as the branch closest to the people.

James Madison said that these powers ought to exist without limitation because it’s impossible to foresee or define the extent of variety of national exigencies. In Article I, Section 8 of the Constitution, at least six specific duties were placed on the House and Senate related to national security. And through those authorities, Congress determines the size, shape, and soul of our military.

The president, then, determines how to use it. Madison also wrote that security against foreign danger is one of the primitive objects of civil society. “It is an avowed and essential object of the American Union.” That fundamental object hadn’t changed in 200 years. But, of course, the way we meet that objective has to change.

The 76th Congress worried about Japan and Germany. The 37th Congress dealt with the Southern rebellion and the suspension of habeas corpus. Maybe the 13th Congress had it the worst. King George burned down their offices. But in our time, Congress has had to deal with a blend of all of those things.

The thought of the Capitol burning, as it did in 1812, was pretty remote for two centuries. But only the courage of passengers on United Flight 93 prevented it from happening again on 9/11, and only good intelligence and law enforcement stopped a plot just within the past few days.

We may not have the same habeas debate, but we sure struggle with the right balance of privacy and security. We don’t have Imperial Japan and Nazi Germany, but we have a resurgent Russia and a rising China. Through all these repetitions of history, the 114th Congress has the same obligation as the first Congress, and that is to build a military capable of defending the country.

It’s not clear that everybody understands our constitutional system. Congress is sometimes criticized for exercising our proper role in defense. For example, some of you have heard that Congress is forcing the Army to buy tanks that it doesn’t want because of some donor, or some lobbyists, or some parochial interest.

Well, here’s the reality. We made a judgment call. There’s one plant in the country left that makes tanks. The Army said that foreign sales would be able to keep that plant occupied until 2019, when they needed it to refurbish our own tanks. So the House and Senate Appropriations Committee, the House and Senate Armed Services Committee, went through all of the arguments and believed that their math didn’t add up. So we decided to start upgrading our tanks earlier than the Army had planned to make sure that the plant stayed open, to make sure that the trained workforce stayed engaged, and tanks would get fielded sooner. Now, some may differ on the wisdom of that particular decision, but there is a reasonable, logical national security argument for it. And it turns out, just last month, the U.S. Army sent 100 M-1 Abrams tanks back to Europe in response to the Ukraine crisis. Maybe that’s some evidence that we made the right call.

Obviously, Congress has been criticized for other decisions. One year, the Air Force wanted to discontinue the Global Hawk and rely instead on the 50-year-old U-2. The next year, they proposed exactly the reverse. They asked to retire the A-10, and then, a few months later sent it to fly attack missions in Iraq and Syria.

The Navy included no money in this year’s budget to begin to refuel the George Washington, a carrier with 25 years of service life left. And the Pentagon has repeatedly asked Congress for another round of base closures when GAO tells us that we have not yet broken even from the last round, which was 10 years ago.

Now, in all of these instances, Congress on a bipartisan basis disagreed with the administration’s request. And that’s exactly the way the Founding Fathers intended our system to work. Sometimes the Pentagon is penny-wise, pound-foolish. Sometimes the Pentagon can be parochial. Sometimes the White House tries to cut military spending to put money in other parts of the budget. And sometimes their priorities are just wrong.

It was Congress that forced the Pentagon to buy the Predator. They didn’t want it. Pilots don’t really like pilotless aircraft. It was counter-cultural. But I don’t know of many people who would reverse that decision today. Is Congress sometimes parochial? Of course. Each of us has a responsibility to represent the interest of our district or our state interests because if we don’t, no one else will.

Does Congress sometimes make the wrong call? Absolutely. But, please, don’t fall into, what was said in another context, the soft bigotry of low expectations. The Constitution gives Congress the responsibility to raise and support, provide and maintain military capability. Congress can and has in the past risen to meet the historical moment. And that’s what you and the American people should expect us to do today, even if the president does not always rise to the moment in carrying out his constitutional duties.

Some people expect lawmakers to just cut the check and don’t ask too many questions. But Congress should not give any president a blank check, and Congress should not be a rubber stamp. It’s the branch of government most responsible for the character and contours of our military. And that includes its organization and structure. It was Congress that created the War Department in 1789. It was Congress that reorganized it into the Department of Defense in 1947. And it was Congress that restructured the services under Goldwater-Nichols.

Speaker Sam Rayburn said, too many people mistake the deliberations of Congress for its decisions. And I admit that the deliberations that lead up to a bill like Goldwater-Nichols can sometimes be pretty messy. But as the complexity of our security challenges grows, so does the necessity of Congress fully living up to our responsibilities under the Constitution and playing our part to defend the country.

Doing our constitutional duty also helps connect our people with national policies. A CSIS study more than 10 years ago entitled “Beyond Goldwater-Nichols” has always struck a chord with me because they said that Congress is the place where ideas become national policies and commitments. Having that messy, frustrating debate in Congress changes the Clinton policy for this or the Bush policy for that into the nation’s policy.

Congress is the indispensable link to the American people, they wrote, the connective tissue between our national leaders and policies. Well, to be that connective tissue, we in Congress have to do our job. And a big part of that job is building the military capability we need to deal with the threats we can see, but also for the volatile, unpredictable world that we all live in. That requires the United States to have a military that is both strong and agile. And I think we’ve got a lot of work to do on both fronts.

Last Thursday at the Republican retreat, former British Prime Minister Tony Blair was there. He repeated the advice he has given the United States for a couple of years now, which was just be strong. Don’t worry about whether people around the world love you, he said. What the world needs is for America to be strong, and I think he’s exactly right.

Of course, to be strong, we’ve got to stop the slide in defense budgets. That has reduced our base defense spending 21 percent since 2010. Two weeks ago, on “Fox News Sunday,” Chris Wallace asked General Dempsey if at some point the resources would be cut so much that you’d have to say, we can no longer defend this country from the threats we face? Dempsey replied, quote, “Yes, absolutely. And I think it’s called sequestration.”

Now, I can sit here all day and recite facts and figures about sequestration, from the plummeting readiness levels, the long lines of equipment in disrepair, the jets that aren’t flying, the soldiers that aren’t practicing at the rifle range. But really the problem with sequestration is about a lot more than facts and statistics. It’s about whether we have the capability to do what the nation needs and the times demand. It’s also very much about the increased danger that comes to our people from diminished training, aging equipment, and a tempo of operations that stretches them and their families just too far. It has to be fixed.

Even without sequestration, we have to make good decisions on our investments in people and on technology. Our people, of course, are our most valuable asset. We’ll soon get the report of the Military Compensation and Realignment Modernization Commission. We need a comprehensive look, I think, at the whole benefit structure rather than try to nickel-and-dime our service members to death year after year as the administration has proposed. But I’m going to be looking not just at the financial impacts of that study, but especially about how it affects our ability to recruit and retain the best our country has to offer because that’s the key to our future.

We have to improve our acquisition system to get more value out of the money we spend on both goods and services. In 1952, the Navy issued a requirement for a lightweight fighter. Two years later, the first A-4 Skyhawk flew. Four years later, the first A-4 squadron was operational. And we built nearly 3,000 of them. Now, compare that to the F-22.

In 1981, the Air Force established a requirement for 750 Advanced Tactical Fighters. It wasn’t until 2005, 24 years later, that the F-22 was first introduced. And instead of 750 of them, we bought 195. If Boeing can field a new commercial airliner in five years, if Ford can take a car from design to production in 24 months, then there’s absolutely no reason that the Pentagon should take two decades to put a new fighter into service. Things have to change.

We have an unfortunate tendency to fix organizational problems with more organization. And I’ve seen estimates that show nearly a third of the acquisition budget goes to overhead costs. This system is so gummed up it’s a wonder sometimes that anything ever comes out the other end. But to have a military that is both strong and agile means that we can’t tolerate the delays and cost overruns that have plagued our procurement system.

A lack of agility means that vital technology doesn’t get to the troops in a timely way, which has the potential to jeopardize their mission, but almost certainly increases the risks to their lives. I’m pretty optimistic that working with Undersecretary Kendall we can find a way to thin out regulations, simplify procurement while increasing accountability for program performance. But it won’t be easy, and it sure won’t be quick.

Agility also requires organizational structure that can adapt to meet new challenges and organizational culture that promotes learning and thinking. In his autobiography, Dr. Edward Teller writes, the substance with the greatest inertia known to man is the human brain, and the only substance more inert is the collection of human brains found in a large organization such as a military service or the faculty of a university. Well, maybe he could say that, but with the speed of change we confront, we can’t afford inertia or failing to learn and adapt. And we certainly can’t tolerate organizations that stifle learning and adaptation.

Colonel John Boyd, a reformer who understood the Pentagon and its flaws, warned that complexity causes commanders to be captured by their own internal dynamics, preventing them from adapting to changing circumstances. Look, it goes without saying there are many good people in the Department of Defense doing good work with good results, but too many of them are captured or have their work captured by the accumulation of regulations and bureaucratic processes imposed by Congress and administrations over the years.

This issue has to be a major focus of our congressional oversight. That oversight’s going to be fair, aggressive, and thorough as the people’s and the taxpayers’ voice on national security. That’s exactly as the Framers intended.

Part of our job is to update our oversight to fit the kinds of threats we face and the kinds of operations we need to protect the country today. I think we have made a good start with new oversight of cyber operations and of sensitive military operations that go on around the world, but we have more work to do. And we have to ensure our oversight is not just focused on the capillaries, but is looking at the big trends that define our world and our security.

Of course, that’s not a new problem. President Lincoln once asked for a report on a newly developed rifle. When the report arrived, Lincoln took one look at the thick binder and said, if I send a man to buy a horse for me, I expect that man to tell me the horse’s points, not how many hairs he has in his tail. Well, sometimes, as you know, Congress contributes to this problem of too much effort for too little results. So we’re going to be looking at ourselves and the reports we require, too.

But history and common sense tells us that Congress has the indispensable role in reforming the Pentagon. Without us, it will not happen. And as long as I’m privileged to hold this job, defense reform will be a priority – not for its own sake, but for the sake of ensuring that our military is as prepared as possible for the wide array of threats that we face today and the unknown security challenges which will confront us tomorrow. We’ll focus on reforms that take us closer to an efficient, effective, accountable Department of Defense with military capability that is both strong and agile.

Great powers and especially great military powers that fail to adapt to shifting realities are relegated to history. That’s been true from the Greeks and the Romans to the Soviets. Updating and strengthening the role Congress plays in national defense, really restoring the role that Congress was always intended to play in national defense, will assist in rebuilding our military and rejuvenating America’s role in the world.

At one time, it was said that the sun never set on the British Empire. Today, the sun never sets on the security challenges facing the United States of America. And in meeting those challenges, the American soldier never goes to bed. Our challenge in Congress is to fulfill the roles and responsibilities the Constitution places on our shoulders with the courage, dedication, intelligence, commitment to service just as our military personnel carry out their jobs every single day.

Ken Towery is one of the most amazing men I’ve ever met. Later winning a Pulitzer Prize, he was a prisoner of war in – held by the Japanese in World War II. In one of his columns, he wrote, as we have said many times in these columns, not all men are called upon to respond to battlefield conditions. But all men and women will face many, many situations where courage and duty and responsibility are required, and where the true measure of their worth is how well they respond to those challenges.

In all of the noise and clatter of our day, in this age of social media and endless news cycles, it’s easy to get distracted from what’s important. But we can’t afford to be distracted. The world is simply too dangerous. Providing for the common defense is the fundamental obligation of government and it’s the most important job we have. I’ll work every single day to see that Congress fulfills that role with the courage and duty and sense of responsibility that is faithful to the Founders, faithful to the amazing men and women who serve our country in the military, and also faithful to those generations yet to come.

Thank you. (Applause.)

SEN. TALENT: Thank you. (Off mic.) We’re going to chat for 15 minutes and then we’re going to go to your questions. And I will attempt to be brief and give you plenty of time to answer.

You discussed in your remarks the role of Congress in, as the Constitution says, raising and supporting the armies of the United States and providing and maintaining the navies. Of course, they didn’t mention an Air Force in 1787 for understandable reasons. And you know from your experience – I know from mine – that the members and senators who serve on the HASC and the SASC pretty thoroughly familiar, as they should be, with these issues.

You mentioned there’re 535 members total, though. The other ones, you know, they deal with health care and education and those kinds of issues day-to-day, all the time. Do you think that they’re as familiar as they need to be with military issues? What can be done – I’m not blaming them – but what can be done institutionally to raise a greater awareness of these issues among the other members and senators?

REP. THORNBERRY: There’s no question that other members are not as familiar as they should be with these issues. And I think that’s part of what we face today. As I mentioned, with such a wide array of complex threats, it’s just not as simple as it used to be to understand all of the different sorts of challenges we have.

But I think it’s absolutely true, we’ve got to put a greater emphasis in our overall gatherings on national security. So it was terrific, for example, last week to have Tony Blair come and talk largely about the U.S. role in the world and how important that was. Members looked to members of the Armed Services Committee, you know, for the details of readiness levels and personnel and so forth. But we’ve got to do a better job in not just, you know, spouting statistics, but in helping other members of Congress understand, not only what’s happening, but why it’s important, how it matters. And that’s on our shoulders.

SEN. TALENT: To them and their constituents.

REP. THORNBERRY: Yeah and to our country.

SEN. TALENT: And you remember and I remember what a challenge it is when you’re new in the committee to absorb and understand the lexicon that the Pentagon uses, and I think a lot of members find that very difficult. You also noted that Carl Vinson, really on his initiative, made certain that we laid the hulls for the aircraft carriers, which turned out to be vitally necessary. And if he hadn’t done that, we wouldn’t have had them. So is there a capability that you in particular are concerned we need to have and may not have in the future if we don’t take some different – is there a particular thing – I know there’s a lot of priorities. Is there anything that you are particularly concerned about?

REP. THORNBERRY: Several things come to mind. One is, back to his point, just the sheer number of ships you have is a big deal because that is U.S. presence around the world. And the administration has proposed retiring a number of ships in recent years, arguing that, well, modern ships are more capable than old ones. Well, that may be true, but they can still just be at one place at one time. So just there is an importance to the quantity of things – ships and other things.

I worry about the capabilities for new domains of warfare, outer space. We have tremendous capability in cyberspace. We don’t have the laws and policies to make use of that capability.

And the last one I’ll mention is I continue to be very concerned about biological threats, and it’s not that we don’t have some capability in the country but we’re really on different tracks. DOD and HHS are not working well together, and yet a biological threat could really be devastating. And I’m afraid we’re not doing what we need to in that area either.

SEN. TALENT: I’m glad you’re conscious of that. I actually co-chaired a commission with Bob Graham from Florida on WMD terrorism and we focused on the bio-threat. It was – it was a real concern that we had.


SEN. TALENT: And on the number of ships, I wonder if you recall a hearing where Ike Skelton addressed the whole quality versus quantity issue, and they were talking about we didn’t need as many ships because of the quality and the capabilities of those we had. And he said, well, I’ve got an idea: why don’t we just have a Navy with one ship that can do everything?

REP. THORNBERRY: One super-ship.

SEN. TALENT: I think Ike made a really good point there. OK.

I’d love to know your thinking about this because it was – you talked about institutional issues here with the Congress so let’s talk about another institutional issue: the chiefs, OK? And they have to – it’s a difficult line for them to walk. They’re in a chain of command, and it’s their responsibility, obviously, to acquiesce and salute and attempt to execute administration decisions. They have a competing – or a concurrent and sometimes competing responsibility to give the Congress and in particular the HASC and SASC their best and most honest professional judgment about the issues that they confront. And I think we all sympathize that that’s difficult for them sometimes.

Is there a message you, at the beginning of your tenure, might want to send to the chiefs in that regard?

REP. THORNBERRY: Well, it would be, we expect you to shoot straight with us. I don’t think we – it is fair to expect them to become advocates for our positions, especially if they contradict the president’s. But we have to have the information.

And it is – as you point out, their obligation is not just to the president, but it’s to the country, and that includes Congress in its key role in providing for the military, which is part of the reason I think we’ve gotten a little out of kilter when we talk about Congress and national security. And one of the reasons I thought it’s important to start out by reminding everybody just how central Congress is in carrying out those duties. And if the chiefs are reminded, so much the better.

SEN. TALENT: Yeah. I really appreciated your references to the Constitution. And I know you’re aware of another constitutional provision that bears on this, the powers granted in Article One of the Constitution to the Congress are permissive. You don’t have to have a bankruptcy code, right?


SEN. TALENT: But Article Four says the United States shall protect the states from invasion, the one mandatory function.

REP. THORNBERRY: Which takes on all sorts of new implications given what Texas faced, for example, last summer. It may have been an invasion of minors, but still, thousands of people streaming across our border presented all sorts of challenges. And it’s the federal government’s responsibility, absolutely, to deal with that.

SEN. TALENT: There’s definitely a national – a direction national security component to that issue.

REP. THORNBERRY: Absolutely.

SEN. TALENT: All right. I want to just – and then I’m going to open this up for questions. I want to get into – a little bit into acquisition reform. And your words couldn’t have been more important. They’re true in that, and I especially appreciated the sentence, you don’t fix organizational problems with more organization. Well, hurrah for you in saying that.

So do you want to share with us – and I know you’re going to hold hearings and you don’t want to prejudge the outcome – what things you may be thinking of as the right path to acquisition reform?

And I’ll give as a jumping off point, if you want to take it, the National Defense Panel’s recommendations over the years that we really discipline ourselves to trying to design and develop platforms that we can design and develop in at most five to seven years, and then, spirally, you know, evolve them over time. You mentioned A-4 and F-16 is like that. But don’t be restricted to that.

REP. THORNBERRY: No. I think that’s a great point. As you know, Chairman McKeon asked me to start trying to coordinate this effort last year. And so, we have gotten a tremendous amount of very valuable input from people in the system, from industry, from a variety of folks that have looked at this over the years.

I haven’t found anybody who says, OK, it’s all fine; don’t worry about it; this is not really a problem. What I have found are people kind of like you that say, OK, this has been tried before, and it usually gets worse. So why are you going to make it better, and there’s that sort of skepticism.

So I think what we’ll – in the spring, I will probably put some proposals out there, ask for people’s feedback, and then, the idea would be maybe they would be incorporated into this year’s NDAA. But a really important point is, to me, there is not going to be a 2,000-page bill that solves acquisition. It does not exist. Nobody is that smart.

What we will do is, first, try to do no harm; secondly, try to make some things a little bit better, and then, next year, try to make some more things better, and the next year, try to make some more things better, and keep after it, as I say, as long as I have this job.

But your point about the NDP I think raises another point. This is not just about legislation or even about regulations. It’s also about how we conduct oversight of these programs. So Congress can help make sure that there is not the kinds of requirements creep that has delayed and resulted in cost overruns over the year. So part of it is how we do our job in budgeting and in oversight, not just in putting out a new regulation or repealing some regulations.

And, again, you’re not – in the best of circumstances, you’re not just going to fix acquisition, but it’s just – the world is moving too fast for us to be satisfied with the pace of acquisition, the pace of fielding technology today. I mean, that’s one – I’m sorry. I get carried away about this as you can tell.

SEN. TALENT: Please.

REP. THORNBERRY: That’s why you get folks who are deployed overseas who take their cell phones with them, you know, because what you can go buy at the Verizon store is a whole lot better than what you’ll get and sometimes issued. So we’ve got a lot of work to do but it’s really important.

SEN. TALENT: I really appreciate your emphasis on accountability. And former Secretary of Navy John Lehman, who you know well, and John was as responsible as anybody for building up the number of ships in the Navy in the ’80s, and he constantly emphasized accountability within a tight chain of command within that department.

REP. THORNBERRY: And that’s what you’ve got to have because – I mean, the problem now is if you want to hold somebody accountable for a program that’s gone off the rails, who do you hold accountable? There are so many people who are a part of the decision making, who can at least slow things down or change it that it’s hard to know who to hold accountable. We’ve got to do better than that.

SEN. TALENT: And with accountability goes responsibility and authority too.


SEN. TALENT: And I think the program managers and the chiefs and service secretaries would be pleased to know that your oversight is going to exacting but supportive for those who exercise – make those kinds of decisions. OK.

I don’t want to hog the chairman, so let’s open this up for question. And, remember, you need to wait until we get a microphone and then give us your name. Yeah, go ahead. Sidney.

Q: Chairman, Sydney Freedberg, Breaking Defense. You mentioned a couple of times reports, repeals. Quite a few people – General Punaro, Sean Stackley have said that the first thing Congress used to do on acquisition reform is repeal some of the layers of organization that have been added to actually go back and cut away things. You mentioned that as are both arrows in the quiver but how big a piece of what you’re considering is that? How high on the agenda is just going through the law and striking stuff out as opposed to rewriting or adding?

REP. THORNBERRY: Well, there’s a couple of parts. As I mentioned, Secretary Kendall has been working with us to identify duplicative, overlapping regulations that either he can thin out or working together we can thin out. And so that process is going well and is pretty far along. And then taking some additional steps will require us acting to change or repeal some laws.

I don’t know how far we can go until we see what the market can bear. That’s part of the reason we’re not going to just throw out an acquisition package and try to get it through the committee in a short timeframe. I want to hear feedback.

And so that back and forth discussion, hopefully, not just this year, but in years to come, will help us get back towards that accountability that Jim and I were just talking about because, remember – I mean, it’s not about bureaucracy. It’s not about just organizations. It is about who has the authority, and then, can you hold them accountable for the exercise of that authority. And that’s the goal we’ve got to move toward.

SEN. TALENT: Yes, sir.

Q: Thank you, Mr. Chairman. Otto Kreisher with Sea Power magazine. You emphasized basically funding within the DOD, the military needs for funding, sequestration is the problem. Are you proposing some kind of repeal of sequestration? And do you intend to do it only on defense? You’ve seen the Democrats’ response already, Bernie Sanders saying that you’re not ever going to get, you know, an increase in defense spending unless you also do something on the domestic side. What’s the solution to sequestration that you see?

REP. THORNBERRY: Yeah. Well, I guess my primary point is it has to be fixed. Now, that fix has got to pass the House of Representatives, it’s got to pass the Senate, and it’s got to be signed into law by the president. So what that means is the Armed Services Committee alone cannot fix it. You’ve got to have 218 and 60 and one to get it done. So I don’t know that anybody has a magic formula to do that or else it would be done by now.

But yet, I think it’s really important for us, as Jim and I were talking, to help all our members understand the damage that has been done, and, actually, the way that it is more expensive in a lot of respects to operate under sequestration, the inability to plan, et cetera, so what it costs us.

I really believe there is – that most Republicans and most Democrats in the House and the Senate agree that sequestration for defense needs to be fixed. What there is not agreement upon is exactly how to fix it. And, again, whatever can pass the House and pass the Senate and get signed into law by the president, I think I’m for.

SEN. TALENT: I think it’s very relevant because the greater the sense of urgency, the greater the understanding of the problem that the average member and senator has, the greater the sense of urgency to fix it and the greater possibility of coming to the kind of agreement you’re talking about.

REP. THORNBERRY: Yeah. The challenge is our military, you know, bends over backwards to get the mission done. And so what you don’t see is the delayed maintenance, the training that doesn’t happen, et cetera. It’s a little harder to quantify, harder to see. That’s what we have to help people understand.

SEN. TALENT: We go to that lady in the back on the aisle there.

Q: Hi. My name is Erica McCann with the IT Alliance for Public Sector. We’re a division of ITI. And I just wanted to thank you for your leadership over the past year bringing the Armed Services Committees together to look at acquisition reform.

One of the things that we found is one of the hardest nuts to crack so far is on appropriations in funding in order to enable faster, more agile IT acquisitions at the department.

So I was wondering, how are you starting to look at that process? Where do you see flexibilities? And have you started to engage the appropriations folks to start talking about ways to enable faster IT acquisitions?

REP. THORNBERRY: Sure. We’ve absolutely been discussing with the appropriations folks, not only acquisition reform but everything that we’re interested in. I really don’t think there has been a time that I’ve seen in the last 20 years where there has been closer collaboration between the Armed Services Committee and the Defense Appropriation Subcommittee. And I think that’s only going to get stronger. And Rodney and I are determined to make it so.

I think – you mentioned IT acquisition. That presents special challenges. There have been some folks who say, OK, we need just a separate authority or a separate way to procure IT, and then you start looking, OK, exactly what is IT? Well, it’s integral to most everything we buy so it’s pretty hard to segregate it out, and yet, you have that area that changes so rapidly and makes it difficult, especially for the current procurement system, to keep up with technology to field the best for our folks.

So I think there are some authorities we’re looking at, and, hopefully, some things we can – some brush we can clear away to improve it. Again, there is not a magic answer here. What we can do is hopefully make it better than it is now and then keep working to make it better, better. And IT is going to be a key focus of how we try to gauge that.


Q: Thank you. Sandra Erwin with National Defense. Mr. Chairman, I wanted to ask you about some of these budget priorities that you said that the Pentagon is wrong about, like funding more tanks, ships, and retiring airplanes that you don’t believe should be retired. The Pentagon says some – (inaudible) – readiness.

So what kind of budget maneuvering is going to have to take place to be able to fund what Congress believes is important but also what the readiness that the Pentagon believes they need? Thank you.

REP. THORNBERRY: Well, I think this gets back somewhat to the discussion we were having just a few minutes ago. So under sequestration with those reductions, and, again, 21 percent in real terms in the base budget, that’s how much has been cut since 2010, and that has to have an impact.

Now, part of the rest of the story is, as those of us in Congress I think look at the world, we’re saying, we don’t know that we want to give up the A-10 or the ability to have tanks or the 25 years left on the George Washington. Is there a cost to preserving that option this year? Sure. But it just adds I think a sense of urgency that we’ve got to get this overall budget on a more reasonable footing.

And, then, are there going to be difficult choices, systems that have to be retired? Of course. But with the volatility that we’ve seen in defense budgets and so forth and with the volatility in the world situation, most of us want to be pretty careful about giving things away because it’s going to be really hard to give them back.

And my key thing in my mind is, when it comes to BRAC, I mentioned, you know, 10 years, and GAO says we have not yet broken even from the last BRAC. So it’s going to cost money. And the rest of the story is, if we give up a base, give up a training range, then it’s gone forever. And are we sure – have we thought enough about our role in the world, the kind of military capability it needs to fulfill that role, and what sort of bases then are needed for that military capability? Have we worked our way through the steps so that someday we won’t come and say, man, I wish I had that training range back? That’s part of that same sort of caution about giving things up that someday you may regret in such a volatile world?

SEN. TALENT: The National Defense Panel was very supportive of that analysis because, as you know, we recommended that the department really come up with a real long-term plan. And until you have a sound long-term plan about what force structure you’re going to need, you don’t want to give up a bunch of bases and then have to rebuild them again down the road.

REP. THORNBERRY: Well, and we’re not going to have a place to rebuild some of the –

SEN. TALENT: That’s right.

REP. THORNBERRY: Particularly ranges and so forth are very valuable in this country. And so it would be hard to reconstitute them if we give them up.

SEN. TALENT: In the context of not giving things away, do you want just a brief comment about industrial base issues, because you mentioned – obviously, you’re focusing on acquisition reform. One of the keys to that is being able to compete these programs, which means you have to have a reasonably robust industrial base. Do you want to make a comment on that?

REP. THORNBERRY: Yeah. Well, I think those are some of the hardest issues we face and will face. I mean, I mentioned the tank example. What if we decided that it was just not worth the money to put into that plant because we didn’t really need it today? And it closed. We lose the capability. We’ve got to pay a lot more to reconstitute it or else we’ve got to go buy it from foreign sources.

And, unfortunately, we’re facing that sort of situation in a lot of different areas, where we’ve got to decide whether to put money into something that we may not need right now, just to preserve the capability of having it domestically. And I think those are going to present some of the most difficult challenges or decisions for us, for the country going forward.

SEN. TALENT: Yes, Tom.

Q: Good morning, Mr. Thornberry. Tom Donnelly from AEI. Thanks for joining us and honoring us with a very thoughtful speech which sets me up for an opportunity to let you make a headline that will destroy all of your hard work so far.

And I’d like to ask a question about the politics of the defense budget in the new Republican Congress. And those are larger majority – largest majority in a long time for Republicans in the House. And really the first hurdle for this year is the budget resolution, if you’re trying to undo sequestration. And last year’s projection, the number for 2016 and last year’s budget resolution included a pretty substantial increase in the defense top line. Since then, the world has gotten scarier and American interests more at risk.

Let me ask you a very narrow question if I may: A, would you accept anything less than the figure specified in the last year’s budget resolution, which I believe is $541 billion? B, do you think that’s enough? And, C, how do you think your colleagues in the Republican Caucus will respond to this proposition?

SEN. TALENT: Before you answer, Mr. Chairman, everybody here has been very good about not making long statements before their question, except one of our AEI scholars who could not resist the temptation to do so. Nevertheless, if you want to graciously answer it, I’ll leave that to you.

REP. THORNBERRY: Who at one time worked on the House Armed Services Committee.


REP. THORNBERRY: So he’s got a double –

SEN. TALENT: That’s the connection.

REP. THORNBERRY: Yeah. Maybe. One of the things I’ve learned and I believe is be really careful about drawing red lines because if you draw a red line and then you don’t live up to it, your credibility goes down. And if you think about what’s happening around the world as far as the United States and our credibility, the stories that we’ve seen this weekend about, well, maybe Assad can stay after all, it says something about our credibility, our ability to have influence in the world.

And so I take that lesson and say – I’m not going to say, not one dime less because one dime less would still be, you know, a whole lot better than a lot less.

So I don’t know that there is a magic number that has to be, but, clearly, there has to be some relief from this – what is a real cut. If you take inflation into account, defense spending, base defense spending will go from 521 to 515 under the sequestration caps for 2016. That’s a real cut. And, as you mentioned, the world is getting more dangerous.

The other thing, just to keep in mind that it made me think of it in your question is when you asked voters just before the last November election, you know, what’s most important to you, what’s going to determine your vote, number one was jobs and the economy, number two was national security. So, as all of these things – as I say, the red whirlwind swirling around the world of terrorism and the other things, this is very high on voters’ minds, on their concerns, and that translates through, I think, to their elected representatives. We just have to be able to talk together enough to find the path forward.

And I want to emphasize that has to include the president of the United States. It’s not enough to set up there and throw tomatoes. He’s got to engage in a reasonable conversation about how we get from here to there that can pass the House, pass the Senate, and get his signature.


Q: Hi. Scott Maucione with Inside the Pentagon. The OCO budget has been increasingly criticized as a slush fund for the executive branch. Do you plan on trying to get the executive branch to transition some of those funds into the base budget in the near future?

REP. THORNBERRY: Well, we’ve been working on that to not make up for base budget deficiencies in OCO, but to move those programs over to the base budget so that OCO can be used for its intended design, and that is the funding of current operations that are happening around the world.

What you hear some people say is, well, it doesn’t really matter about these low sequestration caps. You all are talking about, we’ll just make up for the difference in OCO. That’s not a good way to run a railroad. It’s not a way that enables managers to plan. As I mentioned, it costs more to do things that way. And it does not reassure the world about our commitment to our allies and to our country’s interest. So it’s not a good way to go.

And so I hope we can move things into the base budget, understanding that you still need OCO for operations that you don’t expect or even that you do expect, and the pace of those operations is accelerating, obviously.

Q: Hi. Megan Eckstein with Defense Daily. On acquisition reform, you and Secretary Kendall seem to be very much in line with your priorities for how to go about your reform. I was wondering if you’ve spoken to Senator McCain about his perspectives. He obviously has very serious concerns about acquisition. And to what extent will you be partnering versus maybe taking different approaches in trying to combine?

REP. THORNBERRY: We have spoken about it several times. And I think acquisition reform is going to be very high on his list of priorities, just as it is very high on my list of priorities. So I am very optimistic that with Senator McCain’s emphasis and our emphasis in the House, with presumably Secretary Carter and then Under Secretary Kendall, we’re going to have a group of folks who really want to get things done, folks in both parties on Capitol Hill.

So that’s part of the reason I’m fairly optimistic. Just don’t expect everything to be solved in a single bound. It doesn’t work that way. And it’s dangerous to try. So we just need to take it step by step.

SEN. TALENT: OK. I think we have time for two more so I’m going to go here and then back over there. So this gentleman here.

Q: Dan Beyeler, the Elwood Group. Thanks very much for your leadership. What can industry – this is a practical question – what can industry do to support your goals and build trust with the Department of Defense? We need to reverse the adversarial environment that exists today. What could we and industry do to support you?

REP. THORNBERRY: Well, industry has already done a lot. And I will continue to rely on industry a lot as we work our way through some of these reform proposals because that is an issue that comes up a fair amount. I’ve had people in industry tell me, look, we could give them a much better deal but they won’t talk to us.
Well, I mean, there are certain ethical guidelines that make sense but we’ve all seen swinging pendulums that go too far and end up doing at least as much harm as they do benefit.

So that’s part of the reason I emphasize so much greater flexibility, simplification with accountability on the part government, and I think if you have that, that empowers them to not be so cautious about having these exchanges with industry, because if you look back in history, the United States is really unique in the world at the partnership between government and industry that provides for our military capability. And any – the extent to which there is tension in that relationship or that those ties are frayed, it makes it harder for us to defend the country.

Now, again, we don’t want, you know, sweetheart deals and revolving – whatever all of those terms are that you get into there, but we ought to do what makes sense. And what makes sense is having – allowing, encouraging really in an ethical construct that exchange between government and industry.

SEN. TALENT: All right. One final question here.

Q: Hi. Thanks. Maggie Ybarra, Washington Times. The FY-’12 NDAA puts restrictions on reimbursement funds to Pakistan. Under that guidance, Pakistan has to meet certain counter-terrorism goals before it can obtain those funds, and it’s DOD’s job to certify that Pakistan met those goals. In FY-’13 and FY-’14, DOD waived that certification.

What are your thoughts on Pakistan not living up to congressional requirements, DOD’s decision to give Pakistan a pass, and do you foresee any tweaks to legislative language in FY-’16 on this topic?

SEN. TALENT: Did you get that?

REP. THORNBERRY: I think I got the gist. Yeah. A little hard to hear. Obviously, we have goals that we want Pakistan to achieve. And it is just as clear that Pakistan plays an important role in helping provide for our troops in Afghanistan, in fighting the al Qaeda corps and other terrorist groups that are in the Afghan-Pakistan region.

So, needless to say, it’s a balance, how much carrot, how much stick best achieves the desired results? I’ve got to say, I appreciate the military operations they have undertaken in the FATA. It has put pressure in an area where there hasn’t been a lot of military pressure before. And I think all of us – our hearts, you know, just break with the sort of school shooting terrorism that they endured. We imagine something like that potentially happening elsewhere.

So they’re a partner. It’s been an up and down relationship, but we want to use the right combination of carrots and sticks to get to the best place, and that has to be evaluated step by step as we go.

SEN. TALENT: Very well. Thank you again, Mr. Chairman, for your great service and your remarks and your willingness to answer questions. And thanks to all of you for being here today.

REP. THORNBERRY: Thanks for having me. (Applause.)


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End Obamacare, and people could die. That’s okay Fri, 23 Jan 2015 21:59:59 +0000 Say conservatives have their way with Obamacare, and the Supreme Court deals it a death blow or a Republican president repeals it in 2017. Some people who got health insurance as a result of the Affordable Care Act may lose it. In which case, liberals like to say, some of Obamacare’s beneficiaries may die.

During the health-care debates of 2009, Rep. Alan Grayson (D-Fla.) brought a poster on the House floor: “The Republican Health Care Plan: Die Quickly.” In the summer of 2012, when Obamacare was threatened by a presidential election, writer Jonathan Alter argued that “repeal equals death. People will die in the United States if Obamacare is repealed.” Columnist Jonathan Chait wrote recently that those who may die are victims of ideology — “collateral damage” incurred in conservatives’ pursuit “of a larger goal.” If these are the stakes, many liberals argue, then ending Obamacare is immoral.

This article appeared in The Washington Post on January 23, 2015. It will be published here on January 30, 2015. Click here to read the full article.

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The media are making college rape culture worse Fri, 23 Jan 2015 19:28:23 +0000 ...]]]> The frenzy over college sexual assault now sweeping the nation was triggered by a specific event.

In 2010, a small team of investigative journalists published a report revealing, so they claimed, an epidemic of college rape. The report was a jumble of highly selective reporting and dubious statistics, as we shall see. But the reporters spread the news far and wide and no one thought to question their accuracy.

Federal officials were electrified by the findings and launched a draconian crusade. The term “rape culture,” previously limited to gender-theory seminars, slowly found its way into the national lexicon.

Before long, otherwise sensible people came to believe that Yale, Swarthmore, and the University of Michigan were among the most dangerous places on earth for young women. Dozens of falsely accused young men were subjected to kangaroo court proceedings and expelled from college. By 2014, the panic produced outbursts of fanaticism—a young woman carried a mattress around Columbia in an attempt to expel a classmate who was found not responsible for sexually assaulting her.

Students demanded trigger warnings in classes at Harvard Law School. An angry mob vandalized the house of a falsely accused University of Virginia fraternity.

And it all began in 2010. That year, reporters at National Public Radio teamed up with the left-leaning journalism organization Center for Public Integrity (CPI) to produce and promote a 104-page “investigative reporting series” (PDF) entitled “Sexual Assault on Campus: A Frustrating Search for Justice.” (Full disclosure: The Daily Beast is an occasional publishing partner of CPI’s.)

The executive director of CPI, Bill Buzenberg, summed up the plight of millions of young women on campus in a single word: “Nightmare.” According to the report, serial predators are roaming free on college campuses. The occasional victim who finds the courage to report her attack is unlikely to secure justice. More often than not, she will be “re-victimized” by invasive, humiliating, and futile proceedings.

Should she turn to the Office for Civil Rights, the federal agency responsible for monitoring the Title IX equity law, she is likely to be thwarted once again. The report depicts the OCR as a lazy, feckless watchdog that “leaves students at risk.”Exhibit A is the story of Laura Dunn.

On the evening of April 4, 2004, according to the NPR/CPI version of events, Dunn, then a freshman and member of the crew team at the University of Wisconsin, consumed so many raspberry vodkas at a crew party that the student-bartenders refused her more drinks. She left with two young men she trusted from her team. They planned to go to another party, but decided to make a quick stop at one of the men’s apartment. According to Dunn, once they arrived, her teammates raped her as she fell in and out of consciousness. For many months, she tried to dismiss the evening as a “just a mistake.” Still, she couldn’t sleep, she lost weight, she dropped out of crew.

Fifteen months later, Dunn attended a philosophy class where the professor was discussing how rape is a weapon of war. The professor suddenly stopped the lecture, turned to the students, and told them she knew many of her students had been raped, and she assured them they could do something about it. A tearful Laura Dunn toldNPR’s Joseph Shapiro what happened next. “The moment that lecture let out,” she said, “I walked across to the dean of students’ office and I reported that day.” She also reported the alleged rape to the campus police.

The investigation did not go well for Dunn. Because she reported the assault nearly a year-and-a-half after the event, one of the men had already graduated. The other insisted the encounter had been consensual, and since there were no witnesses or evidence, both the police and the university dropped the case.

Dunn felt betrayed. Not only did her attackers go unpunished, the university failed to protect her from retaliation for filing the charge. According to Dunn, while the case was under investigation, she ran into the remaining attacker at a fraternity party, who frightened her with a violent outburst and a warning: “My parents are Harvard attorneys. You won’t win.”

Determined to fight an egregious injustice, she filed a Title IX sexual discrimination complaint with the Office for Civil Rights. Dunn accused the University of Wisconsin of multiple violations, including subjecting her to a hostile environment and failing to provide a “prompt and equitable resolution” of her case.

But in 2008, four years after the original incident, she received an 18-page letter (PDF) from the Department of Education with the verdict: “Based on its investigation, OCR determined that there is insufficient evidence to substantiate the allegations made in the complaint.”

Dunn was stunned to find the OCR siding with the university. “The message they are sending victims,” she told the NPR/CPI team, “is that sexual assault is not something they take seriously.”

The NPR/CPI report created a sensation. There had been news stories about campus rape before, but never by such a distinguished team of investigators. The findings were widely and uncritically reported and won multiple journalism prizes, including a Peabody Award (known as the Pulitzer Prize for radio), as well as the Robert F. Kennedy Award for Justice and Human Rights Reporting and the Dart Award for Excellence in Coverage of Trauma. But the greatest triumph wasdescribed by Laura Dunn on her website: “The most important result of all this was that the U.S. Department of Education paid attention.”

Russlynn Ali, a little-known Education Department official, was galvanized by the NPR/CPI findings. And she was singularly situated to act. As the newly appointed assistant secretary for civil rights and head of the OCR, she was in charge of enforcing Title IX. When the NPR/CPI team presented her with the Dunn case and other findings, Ali promised action: “We will use all of the tools at our disposal including… withholding federal funds… to ensure that women are free from sexual violence.”

Secretary Ali made good on her word. On April 4, 2011, she sent her now-famousDear Colleague letter to colleges across the nation providing detailed guidelines on the draconian steps colleges should take to fight what she called a “plague” of sexual violence. Ali’s letter advised schools to determine guilt by the lowest standard—a preponderance of evidence. And it instructed them to take measures to minimize the burdens on complainants, but didn’t say a word about the rights of the accused.

Ali’s Dear Colleague letter was announced at a special ceremony in Durham, New Hampshire. Both Vice President Joe Biden and Education Secretary Arne Duncan were present. So was Laura Dunn, who had been invited as a VIP guest of Biden. The date of the Dear Colleague letter had a special significance. April 4 is the anniversary of Dunn’s alleged assault in 2004. As she would tell The Christian Science Monitor, “It was my justice.”

The Dear Colleague letter created havoc, but before describing that havoc, let’s check some facts. Dunn agreed to make her records public as a condition of being a part of the NPR/CPI investigation. The 18-page letter (PDF) she received from the OCR is publicly available. It gives a detailed summary of notes taken by University of Wisconsin deans as well as the local police detective. As freelance reporter Derek Rose has pointed out, it tells a very different story from the one we heard from Shapiro on NPR’s Morning Edition or from the CPI report.

To wit: When Dunn first spoke to the dean (15 months after the alleged rape), she said that “a portion of the sexual encounter was consensual.” (p.5) A few days later when she spoke to a campus police detective, Dunn said twice that she did not remember being raped by one of the men (the one still on campus). She found out about it only when the men told her what happened the next day (p.6). She also told the detective that in the months after the alleged rape that she went—twice—to one of the men’s residence, where they engaged in consensual “physical contact.”

On one of these occasions both of the alleged assailants were at the apartment and they all watched television together. (p.6) None of these details were mentioned in the NPR/CPI report.

The anomalies continue. The NPR/CPI team faulted the University of Wisconsin staff for dragging the case out for nine months—enough time for an “enraged encounter” (as related above) between the accuser and one of the accused men. According to the CPI team, when Dunn ran into the young man at a fraternity party, he stalked and threatened her. But Dunn told the police detective that she had initiated the encounter and when he walked away, she followed him into another room because she “knew he wanted to talk to her.” She also admitted she had hugged him. No mention of threats. (p. 7).

The young man’s version comports with the police report, but he adds that when Dunn approached him, he was alarmed, pulled away, and told her he was afraid she would fabricate more lies. When Dunn started to scream and cry, he fled. (p.8)

The NPR/CPI report gives the impression that the university violated federal law by taking nine months to resolve Dunn’s complaint. But according to the OCR letter, Dunn herself delayed the process by insisting the official assigned to review her case be replaced. Dunn found her to be too “adversarial and accusing.” Not only that, she was Hispanic. As Dunn explained to University officials, her own mother was Hispanic, and she was experiencing “transference of tensions.” The Hispanic official recused herself and a new investigator took over. (p.10)

These details do not prove that Dunn’s teammates did not assault her. And it is possible the deans and investigators at her university failed her in some way. But the case is far murkier than the NPR/CPI team let on. Anyone listening to NPR’sMorning Edition on Feb. 24, 2010, not only heard the sanitized version of the Dunn case, they also heard a “chilling” statistic: “A study funded by the U.S. Department of Justice estimates that one out of five college women will be sexually assaulted.”

This comes from the 2007 Campus Sexual Assault Study (PDF), commissioned by the National Institute of Justice. But as critics have noted, it was based on an online survey, with a low response rate, vaguely worded questions, and a non-representative sample of college women.

The best study available at the time of the NPR/CPI report was the Bureau of Justice Statistics’ 2003 Violent Victimization of College Students (PDF) report, which shows that approximately one in 40 college women is a victim of rape or sexual assault over the course of four years (assault includes verbal threats as well as unwanted sexual grabbing and fondling). More recent BJS data suggest the figure to be 1 in 53—far too many, but a long way from one in five. And, according to the BJS, 80 percent of these victims never report the crime.

That is a genuine problem we need to address. Instead, NPR and CPI diverted attention to a phantom rape epidemic encompassing 20 percent of female college students.

The NPR/CPI team not only exaggerated the number of victims, it promoted the idea that any male undergraduate implicated in a campus sexual assault is likely to be an incorrigible repeat offender. On March 4, 2010, a little more than a week after the initial report on Laura Dunn’s case, NPR’s Morning Edition ran a segment entitled Myths That Make It Hard to Stop College Rape. Steve Inskeep and Joseph Shapiro told listeners about new research that “may cause people to rethink what they believe about sexual assault on college campuses.”

They were referring to the work of David Lisak and a co-author—who concluded that college officials are dangerously wrong when they assume that young men deemed guilty of sexual assault by a campus disciplinary committee are decent young men who made a mistake because of too much alcohol or miscommunication.

These are not individuals who need some counseling, stern warnings, or temporary probation, Lisak warned. “These are predators,” he said on NPR. For a 2002 study (PDF) on campus rapists, Lisak analyzed questionnaires distributed to male passersby in a busy pedestrian area at the UMass Boston campus. Those who returned them—1,882 over a period of seven years—were paid $3 or $4.

One hundred and twenty—or 1 in 16—admitted to committing acts that met the legal definition of rape or attempted rape. More than half of this group admitted to raping more than once and also confessed to crimes such as choking an intimate partner, deliberately burning a child, or forcing a child to perform oral sex.

In her excellent critique of Lisak’s study, Slate’s Emily Yoffe points out that the participants were hardly typical. Most college students are age 18 to 24. Lisak’s subjects were 18 to 71. UMass Boston is an urban commuter school with no campus housing and a four-year graduation rate of 15 percent. Lisak admitted to Yoffe that his study probably needed to be replicated on a more traditional campus.

I taught philosophy at UMass Boston in the early 1980s. Things may be different today, but at that time most of my students were adults with full-time jobs, and more than a few had been in jail.

Their crimes, however, were more in the direction of bar fights and stealing cars—not sociopathic predation. Because Lisak’s results are based on a non-random, self-selected sample of students, we cannot be sure of their relevance—even to UMass Boston.

I contacted two of the lead reporters, Kristen Lombardi (CPI) and Joseph Shapiro (NPR), to hear their side of the story. I first asked Lombardi why her report so confidently asserts the much-disputed one-in-five sexual assault number. She agreed the figure was controversial, but she said it was not critical to the report. She recalled it coming up only once—and that was in the introduction, written by someone who did not do the reporting. In fact the statistic appears five times in the report and is used strategically to establish the urgency and scope of the campus assault crisis.

When I inquired about the report’s account of the Dunn case, she assured me it had been thoroughly fact-checked. But shouldn’t readers have known about the complications—such as Dunn’s further sexual and social encounters with her alleged rapists? Lombardi seemed to be unfamiliar with the contents of the OCR letter, and explained that she had not written that part of the report. She suggested I call her colleague Kristin Jones—the author of the section on Laura Dunn.

Jones had read the OCR letter, but she didn’t think Dunn’s subsequent consensual encounters with her alleged attackers were worth mentioning.

She had heard from “people who are experts” that victims are often in shock and they sometimes try to feign normalcy by continuing to socialize with their attackers. She could not recall any names of the experts, but in a follow-up email, she suggested I contact David Lisak. I did, but so far he has not replied to my queries.

I also attempted to speak with Joseph Shapiro at NPR but he declined in a polite email: “Our policy is to let the stories speak for themselves.”

NPR and the Center for Public Integrity are well-respected news organizations. They were alerting Secretary Ali to a catastrophe: Millions of women were sexually assaulted by ruthless criminals, and both college officials and the Office for Civil Rights were frustrating their quest for justice.

The secretary was already planning to make changes in OCR protocols for campus assault cases. But once these reporters presented her with their nightmare scenario, nothing short of drastic action would do. As Kristen Lombardi would later tell a reporter, “Since the Center for Public Integrity series ran, OCR is much more aggressive.”

The aggression came in the form of Ali’s Dear Colleague letter of April 4, 2011, which created a national sensation. Colleges rushed to meet the new requirements. They revamped their disciplinary committees and hired Title IX officers to run programs with Orwellian sounding names like the Office for Sexual and Gender-Based Dispute Resolution. Political leaders, including President Obama, Sen. Kirsten Gillibrand, and Sen. Claire McCaskill propagated the one-in-five statistic and demanded action. Soon a dizzying number of sexual assault task forces, listening sessions, tool kits, commission reports, and laws materialized.

Journalists such as Vox’s Ezra Klein joined the frenzy. Mesmerized by the one in five statistic, Klein defended harsh campus policies that he acknowledged would punish the innocent. Men, he said, “need to feel the cold spike of fear when they begin a sexual encounter.” Jonathan Chait spoke for civil libertarians everywhere when he questioned Klein’s endorsement of false convictions as a strategy: “This is a conception of justice totally removed from the liberal tradition.”

By 2014, OCR was investigating 90 colleges for possible Title IX violations in their handling of sexual assault complaints. Campuses were in full panic mode—with calls for censorship and trigger warnings for sensitive material. At last count, 56 young men found responsible for sexual misconduct were suing their schools, alleging that they were denied due process and fair treatment in star chamber proceedings.

When Rolling Stone published its apocryphal article about a sadistic and premeditated fraternity gang rape at the University of Virginia, many who should have known better took it seriously. It was a Gothic fantasy nurtured by specious statistics, poorly designed studies, and panic. The writers and editors at Rolling Stone are to blame for publishing the story. But it was the investigative journalists at NPR and the Center for Public Integrity who made it all seem real.

“Let me say this respectfully and with as much clarity as I can: you do not know my work.” Those are the words of an anonymous student affairs officer in an open letter published by Inside Higher Ed soon after he received the Dear Colleagueletter. The frustrated official is addressing both Secretary Ali and the NPR/CPI journalists who inspired her. He and his colleagues have to cope with ambiguous “she said/he said” cases like Laura Dunn’s every day. The cases he manages, said the official, are “enormously complex, full of truths, lies, reversals, angry parents, hungry lawyers, and empowered supporters.”

Before Ali’s Dear Colleague letter, clearly criminal cases were typically turned over to the police. Campus officials are not detectives. They cannot adjudicate felony rapes any more than they can murder cases. But for confusing, volatile, evidence-free cases like Dunn’s, the old system allowed school officials to deploy their skills as educators or counselors—they might send the young men for alcohol counseling, or put them on social probation.

The Dear Colleague letter tacitly assumes the truth of Lisak’s predator theory. So it rules discretion out of order and mandates strict legal procedures and harsh punishments. The Inside Higher Ed author says he wrote anonymously because, in the current environment, to protest the new rules publicly invites charges of being “soft on sexual assault” by the media and by victims’ rights groups. It could also provoke an investigation by the OCR. The writer protests that the voices of reasonable and experienced professionals have been left out of the debate.

But Laura Dunn’s voice is fully present. Not only was she Biden’s honored guest at the April 4, 2011 event releasing the Dear Colleague letter, she would later serve on a White House Task Force on Sexual Assault and be recognized for her advocacy on the U.S. Senate floor. In April of 2013, Dunn and Lombardi were guests on Diane Rehm show.

When asked about her assault, Dunn changed her story yet again. The 15-month delay had become “about half a year.” Her sudden realization that she had been a raped no longer took place in a class with a feminist professor talking about rape as a weapon of war, but rather in an “amazing educational program on campus that talked about alcohol-facilitated sexual assault.”

Dunn now runs SurvJustice, an advocacy group for rape survivors. She was one of the experts cited in the Rolling Stone UVA rape story. After the tale unraveled andRolling Stone issued an apology, Dunn defended the original story and denounced doubters as “rape denialists.”

The journalists at NPR and CPI painted a false picture of campus life. That picture inspired Ali to take aggressive action, which created havoc in the media, at the White House and in Congress, and on campuses across America. In the current environment, anyone critical of the new sexual assault policies risks being denounced as a sexual assault enabler. Large numbers of professors, deans, and college presidents are privately dismayed by the OCR zealotry—but most have run for cover.

An honorable exception exists in the 28 Harvard Law School professors who issued a statement on October 15 challenging the moral and legal foundations of the OCR policies.

They noted that in a free and democratic society the goal is not to do everything possible to eliminate all traces of what can be characterized as sexual abuse. The goal must be to address sexual abuse while at the same time respecting the rights of the accused as well as the privacy and autonomy of romantic relationships.

One of the signatories, Elizabeth Bartholet, an expert on civil rights and family law as well as a feminist, made a powerful “have-you-no-shame Senator” observation: “I believe that history will demonstrate the federal government’s position to be wrong, that our society will look back on this time as a moment of madness.”

Rape crisis activists believe this madness serves a worthy purpose: It dramatizes a real problem. Whatever the numbers, far too many women are being harmed. As Ezra Klein says, “Ugly problems don’t always have pretty solutions.”But this is exactly wrong. We know from objective research, and some of us know from experience, that sexual assault, although not epidemic, is a serious problem on campus, and victims too often suffer in silence.

But hysteria over a rape culture sheds no light and produces no solutions. Panic breeds chaos and mob justice. It claims innocent victims, undermines social trust, and distracts attention from genuine cases of abuse.

“Pity, wrath, heroism, filled them, but the power of putting two and two together was annihilated.” These words are from E.M. Forster’s 1924 novel A Passage to India. He is describing the panic among “good citizens” following a highly dubious rape accusation. But he could have been talking about the current hysteria over the campus “rape culture.” The frenzy will die down when the stories of the falsely accused become too much for the public to bear.

Eventually the Assistant Secretary for Civil Rights, the President, Senators Gillibrand and McCaskill, and even the Ezra Kleins of this world will recover the ability to add two plus two. But our detour into madness might never have happened had those investigative journalists at NPR and the Center for Public Integrity resisted their “nightmare” narrative and just reported the truth.

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In US-India’s defense: Pivoting the strategic partnership forward Fri, 23 Jan 2015 19:21:42 +0000 On January 26, Barack Obama will become the first U.S. president to preside as chief guest at India’s 65th Republic Day anniversary – an invitation usually extended to India’s closest diplomatic allies. But what is more important is Prime Minister Narendra Modi’s shift away from India’s outdated foreign policy of “nonalignment” toward a sharper strategic focus. Modi’s move signals that India is no longer afraid to show a more strategic U.S.-India partnership is in India’s national interest. Making for strong symbolism, Obama will witness the celebration of India’s democratic constitution and military might, and likely sign on to a renewal of a ten-year pact to expand defense and security ties.

Signed in 2005, the expiring defense agreement committed to expanding defense trade, technology transfers, coproduction, and collaboration on counterterrorism, security and stability. Today, India conducts more joint military exercises with the United States than with any other country; defense sales shot up from zero in 2008 to $9 billion last year resulting in the United States displacing Russia as India’s biggest supplier.

The U.S.-India defense relationship started on a tough footing even after the end of the 1998 U.S.-imposed nuclear test sanctions on India. India harks back to U.S. failures to approve licenses for military spare parts – for instance, the U.S. decision to halt the engine supply for India’s Shivalik-class stealth warships in 2009 – and remains reluctant to trust America’s reliability in times of need. Aiming to fix that, the United States removed restrictions on technology sharing with India to deepen trust and cooperation. However, Indian firms went for the lowest bidder and removed the U.S.-made F-16 and FA-18 jets from their combat aircraft competition in 2011, reducing geostrategic leverage with the United States just when it offered a chance to mend ties.

So how can this time be different? The 2005 agreement lacked strategic focus and failed to transform the relationship from a simple arms trade into a seamless, committed, partnership. But, unlike India’s former Prime Minister Manmohan Singh, Modi seems game to put India’s national interest and shared interests with the United States ahead of past grievances. The invitation to Obama is a case in point. In the face of rising security threats – Chinese incursions into Indian territory, Pakistan’s sporadic border firing along the Line of Control, the expansion of al Qaeda and the Islamic State of Iraq and Syria (ISIS) – Modi aims to bolster India’s military might. The two countries are bound together by common interests like containing China’s growing power, post-U.S. withdrawal coordination in Afghanistan, and the need for maritime security in Asia. Modi must remember that a deeper defense relationship can bring long-term mutual gain. By doing more business with India, the United States can help marry Modi’s priorities of military modernization and fixing India’s sclerotic defense industry. In turn, India can provide more business to American defense companies and prove to be America’s strategic, democratic, counterweight in Asia.

Here are three areas that Modi should focus on to deepen the U.S.-India defense relationship from the Indian side.

The full text of this article is available on

Hemal Shah is a research associate for India studies at the American Enterprise Institute in Washington, DC. She tweets @hemalshah_7.

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File this under ‘Economic Studies the Media Will Ignore’ Fri, 23 Jan 2015 19:08:51 +0000 Government spending multipliers in good times and in bad: Evidence from US historical data” by Valerie Ramey and Sarah Zubairy:

What is the multiplier on government purchases? The policy debates during the Great Recession have led to an outpouring of research on this question and there is still a lack of consensus among economists. Most studies using aggregate post-WWII data have found estimates of modest multipliers, often below unity. If multipliers are indeed this low, they suggest that increases in government purchases are unlikely to stimulate private activity and that fiscal consolidations that involve spending decreases are unlikely to do much harm to the private sector.

Our findings suggest that there is no evidence that fiscal multipliers differ by the amount of slack in the economy or the degree of monetary accommodation. These results imply that, contrary to recent conjecture, government spending multipliers were not necessarily higher than average during the Great Recession. Our estimates imply that government spending during WWII lifted the economy out of the Great Depression, not because multipliers were so large, but because the amount of government spending was so great.

Maybe this helps explain why the US recovery was only half as fast as Team Obama predicted. Anyway, I am sure this study will end the debate about fiscal stimulus the way this study ended the debate about the minimum wage. By the way, what Ramey and Zubairy find syncs nicely with new research by Alberto Alesina that suggests austerity measures “based upon cuts in spending are much less costly, in terms of output losses, than those based upon tax increases.” (Note, however, those spending cuts are still negative for growth. No “cut to grow” usually.)

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Promoting human rights and democratic reforms in Cuba Fri, 23 Jan 2015 18:01:58 +0000 Those of us who are critics of President Obama’s new initiatives on Cuba do not oppose them because we hope he’s wrong, but because we know he’s wrong.

We know that the single biggest obstacle to economic and political freedom in Cuba for 55 years has been and still is the Castro regime.  We know that a courageous, quiet, Christian, Oswaldo Payá, who sought a plebiscite under the rules of Castro’s own constitution, was killed when police ran his car off the road in southeastern Cuba in July 2012.

We know that an American aid worker, Alan Gross, who tried simply to offer Cuba’s small Jewish community Internet access on the island was held hostage for five years for his efforts.  We know that while the Obama administration was holding its secret talks with Havana, the Castro government arrested more than 9,000 dissidents, independent journalists, human rights activists, and other political opponents.

So, yes, we know better than to expect anything positive from making unilateral concessions to a dictatorship.  And frankly, President Obama should know better, too.

From Nixon, to Ford, to Carter, to Clinton—several of Obama’s predecessors eagerly sought to normalize ties with Havana.  However, none of them saw utter capitulation to an implacable anti-American dictatorship as being in the national interest, until Obama.  President Reagan and the two Bush Administrations each adopted new measures to reach out to the Cuban people—through Radio and TV Martí and through direct support to independent Cubans.

No U.S. president, until now, thought it was a good idea to resuscitate the Castro regime or to arrange a soft-landing for the dictatorship.

The issue for our consideration today is not whether to impose sanctions on Cuba, but when and how to lift them.  Do we do so unilaterally, and risk helping the regime that systematically denies political and economic freedom?  Or, do we reserve normal relations for a post-Castro transition, so that we can use them as a lever to induce broad, profound, and irreversible reforms that will effectively liberate the Cuban people?

Inexplicably, President Obama chose the latter course.

I hasten to add that this is not a partisan debate.  There is a strong bipartisan consensus in Congress that normal relations with Cuba should be reserved for a regime that is moving toward democracy.  Although, President Obama is moving quickly to forfeit a good part of that leverage by normalizing diplomatic ties, he can expect robust opposition to his plan to lift the economic embargo on Cuba.

One central misconception is that the so-called Helms-Burton Act “codifies” the embargo.  As a matter of fact, Title II of that Act, drafted originally by Democratic Senator Robert Menendez, is a formula for establishing normal trade and even U.S. aid to Cuba to a post-Castro Cuba.  The law merely anticipates that a more friendly transitional government in Cuba frees all political prisoners; respects political freedoms; dismantles the police state; and commits to holding fair elections within 18 months.  In addition, the law expects a new government to at least make public commitments to establishing independent courts and honoring internationally recognized human rights and labor rights.

The Inter-American Democratic Charter, signed on September 11, 2001, sets even more detailed benchmarks for all 34 members of the Organization of American States.  These are not draconian requirements.  The trouble is, Cuba is the only country in the Western Hemisphere today that cannot meet any of them.  Is the President doing the people of Cuba any favors by saying that their rights don’t matter— because he’s in a hurry to trade with the bankrupt government of Cuba?

Tragically, although President Obama’s new approach is being touted as an historic shift in U.S.-Cuba relations, all of the measures implemented thus far, serve to reinforce the status quo—legitimizing and benefiting a regime that has a 55-year track record of opposing change.

For example, “purposeful travel” to Cuba is a good thing.  I made an invaluable visit there in 1998 that acquainted me with the stifling repression and its impact on the Cuban people.  The new Obama regulations make it easier to travel to Cuba to visit family members or for other broad purposes.  The concern is that U.S. tourism would represent a windfall to Cuba’s hospitality sector—all of which is co-owned by the regime and most of which benefits the military and security apparatus.

Other new regulations—liberalizing cash transfers in support of families, small-farmers and humanitarian projects, and allowing U.S. telecommunications companies to offer services and even invest in Cuba—should have been used to leverage reforms.  Until that happens, the regime will continue to vacuum up remittances and shake down U.S. companies while restricting benefits to the Cuban people.

Accepting that this is not what the President intended, he must get serious about engaging the 11 million people of Cuba, rather than trying to placate the regime that torments them.  Unfortunately, the President has yet to offer a meaningful strategy for supporting real change in Cuba.

For example, I believe that the President should dispatch a high-profile, personal envoy to key Latin American, Caribbean, and European capitals to explain how the United States proposes to help Cubans other than Castro.  President Obama should invite his counterparts to join him in explaining their own efforts at the Summit of the Americas in Panama in April.

Surely, these neighbors can agree to call on Cuban authorities to liberate all political prisoners and cease arbitrary harassment and detentions of its critics; allow people to exercise their political liberties, as detailed in the Inter-American Democratic Charter; commit to supervised elections as soon as possible; allow unfettered access to the media and the Internet; allow the Inter-American Human Rights Commission to visit and to establish a permanent office to monitor conditions; and give the International Committee of the Red Cross access to inspect Cuban prisons and jails.

In the five weeks since President Obama’s momentous decision on diplomatic relations, the Castro regime has arrested more Cuban dissidents—even several of those freed in their deal with Obama; demanded the end of the embargo; demanded termination of the Cuban Adjustment Act, under which Cuban refugees are paroled into our territory; and demanded that Cuba before removed from the list of terrorist states.

Also, in the last month, the number of Cubans climbing on to rickety rafts fleeing their country has more than doubled.  It seems that they know what to expect from a regime that has been emboldened by Washington’s weakness.  And, as my colleague José Cárdenas has said, they are voting with their oars.

All of this is entirely predictable.  Those who know the intransigent nature of the Castro regime expect no meaningful steps toward liberalization of any kind—particularly because it already has been handed a major victory in exchange for doing nothing.

The normalization of diplomatic relations will have very little positive impact on the lives of Cubans, unless President Obama now rallies other countries to press for economic and political change.  If he fails to do follow up with a vigorous pro-democracy campaign and fails to incorporate authentic Cuban voices into the ongoing dialogue process, his new approach on Cuba will be exposed as an amateurish blunder that prolonged the Castro dictatorship and accomplished little else.

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Two examples of how ‘competition breeds competence’ Fri, 23 Jan 2015 16:59:55 +0000 ...]]]> When government agencies or heavily regulated industries are insulated from market competition, the incentives to offer better service and lower prices, along with the incentives to innovate, upgrade and improve are either significantly weakened or non-existent. But when faced unexpectedly with some market competition, it’s amazing how the normally sclerotic, anti-consumer and unresponsive government agencies or protected industries can suddenly become responsive and consumer-friendly. Here are two examples:

1. The Kelston Toll Road in the UK. I reported last August on CD that an entrepreneurial UK grandfather built a 400-yard private toll in just ten days that allowed drivers to bypass a 14-mile construction detour. A landslide last February closed a road between the towns of Bristol and Bath and construction was originally scheduled to take until last Christmas to complete. The private owner was therefore expecting toll revenue through December to cover his $500,000 in construction and repair costs, along with the cost of staffing a toll both 24 hours each day, and hopefully generate some profit for his entrepreneurial efforts.

But the local government, possibly unhappy with the competition from the private toll road, suddenly made an emergency decision to spend an extra $1 million to speed up the road construction project, which was completed six weeks ahead of schedule in mid-November. Now the toll road entrepreneur and his wife are upset and have accused the local government of trying to bankrupt him with the early opening of the road five weeks ahead of schedule. And perhaps the road construction would have been completed early even without the private toll road, but it seems pretty likely that the presence of competition from the private toll road may have imposed some additional incentives that changed the normal “we don’t care, we don’t have to” attitude of the local civil servants (who often are neither very “civil nor “servile”).

2. Big Taxi vs. Uber. After being protected from competition for generations by government regulations that restrict the number of traditional taxis in most major cities like New York, Chicago and LA, the “taxi cartel” has recently come under competitive pressure from new ride-sharing services like Uber and Lyft that offer consumers a transportation alternative to taxis at lower prices and with better, faster service. Suddenly, the traditional, sleepy taxi industry is being forced to act and think more competitively in response to the upstart ride-sharing services, which is behavior that is completely alien to an industry that never faced the discipline of market competition before. For example, the LA Times is reporting that:

All taxicab drivers in Los Angeles will be required to use mobile apps similar to Uber and Lyft by this summer, according to a measure passed by the Los Angeles Taxicab Commission this week.

The order, passed on a 5-0 vote, requires every driver and cab to sign onto a city-certified “e-hail” app by Aug. 20 or face a $200-a-day fine. The move is seen as a way to make taxicab companies more competitive with rideshare apps such as Uber and Lyft.

Los Angeles cab companies reported a 21% drop in taxi trips in the first half of 2014 compared with the same period the previous year, the steepest drop on record. Cab companies largely attribute the drop to the popularity of app-based ride services.

William Rouse, general manager of Yellow Cab of Los Angeles, says his company has utilized a mobile app for several years. The app, Curb, allows riders to hail and track a cab, provide payment and rate drivers. “If our industry is ever going to get a chance to move passengers from Uber back to taxis, each one of these companies should have an app,” Rouse told The Times. “It’s a shame that the city had to mandate it in order for this to happen.”

Last summer, ABC News reported that:

Meet the new secret weapon to get a leg up in the cutthroat competition among cabbies — charm school. Taxi drivers in Washington state are getting lessons that they hope will give them an edge against startups such as Lyft and Uber. About 170 taxicab operators paid $60 out of their pockets for a four-hour training session to learn about topics including customer satisfaction and developing relationships with institutional clients.

Pretty amazing how the taxi cartel is suddenly starting to change the way it operates now that its drivers are facing intense market competition/discipline from Uber and Lyft.

Bottom Line: Perry’s Law says that “competition breeds competence.” These two cases above help to illustrate that principle, and provide examples of how direct, ruthless, even cutthroat competition is often the most effective form of regulation, and provides the intense discipline that forces firms to maximize their responsiveness to consumers. To maximize the competence of producers and suppliers, we have to maximize competition, and to maximize competition we usually need to reduce the government barriers to market competition like occupational licensing and artificially restricting the number of taxis that are allowed to operate in a city. In other words, we need to move away from the ubiquitous crony capitalism that protects well-organized, well-funded, concentrated groups of producers like the taxi cartel, barbers, funeral home operators, and sugar farmers from market competition. Government regulation typically reduces competition, which then reduces the competence of producers, and reduces their willingness to serve consumers and the public interest, which make us worse off. I say the more market competition the better, for consumers and for the human race. As Bastiat pointed out in 1850:

Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.

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Deflationary spirals Fri, 23 Jan 2015 16:59:14 +0000 Here is the question: What do European Central Bank President Mario Draghi and New England Patriots Coach Bill Belichick have in common? Answer: Both are worried about deflationary spirals.

In prices, the dangerous unanchoring of inflation expectations accompanied by the emergence of actual deflation in a number of European countries has led to deflation headlines that have raised the risk of a deflation spiral. In football, the allegation that Belichick-sanctioned, spin-enhancing football deflation occurred during the Patriots’ AFC Championship victory last Sunday has produced deflation headlines in the sports pages. The former problem is far more threatening to the global economy than the latter problem. But until the Feb. 2 Super Bowl game is played, the football deflation spiral issue will receive more front page media attention.

This article appeared in US News & World Report on January 23rd, 2015. It will be published here on January 30th, 2015.

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