The Tangled Web Woven

The Tangled Web Woven

Not long ago, the technology industry kept Washington, DC, at arms-length, believing that the industry simply needed to keep innovating, and that Washington simply needed to stay out of the way. Books were written and congressional testimony given that repeated the thought over and over. T.J. Rodgers, founder, president, CEO, and a director of Cypress Semiconductor Corporation, argued in 2000, “We CEOs are constantly told to stop sitting on the political sidelines; recognize the value of ‘industry-government partnerships’; and become donors, lobbyists, and recipients of subsidies. We could make no bigger mistake than to ‘normalize relations with Congress and the White House.’”  Fifteen years ago, to the extent there was interaction between the tech industry and policymakers, it was largely via pan-technology sector industry trade associations. What a difference a few years can make. As new technologies develop—or even just “new” concepts, such as the “Internet of Things”—government has been eager to jump in and start “watching with interest” or outright regulating. Instead of letting innovation flourish, addressing real concerns only as they actually happen, government has increasingly designed solutions for which there are still no problems. By the time “solutions” are proposed, technology has moved on to its next innovation. But bureaucratic hubris imposes the new rules anyway. Government continued its predictable, if wrong-headed path, but the IT industry changed. Broad-based IT trade associations looking out for the entire technology ecosystem and representing both large and small companies have dwindled. Niche representation is the new normal. At the same time various technology companies began to ask the government for favors, seeking advantages in the marketplace and erecting barriers...
Washington Arrests Foreign Soccer Officials as It Sanctions the World

Washington Arrests Foreign Soccer Officials as It Sanctions the World

It’s hard not to feel satisfaction at the indictment of soccer officials for apparently corrupting the globe’s Beautiful Game—soccer in America but football to most of the world. Yet emotional satisfaction is a bad basis for government policy. While the U.S. is not the only nation to assert extraterritorial jurisdiction, it does so more often and more broadly than anyone else. Moreover, punishing foreigners creates future risks. Someday Americans might get indicted by other nations for “crimes” committed in the U.S. How did Washington become the world’s policeman and prosecutor in the case of soccer? The sport remains a modest phenomenon in America. Most of the alleged crimes involve foreigners acting overseas. The impact in the U.S. is less than that on almost every other nation on earth, since virtually everywhere the sport commands greater loyalty from a larger percentage of the population. Nevertheless, some of the criminal acts took place in America and the corruption affected interstate (and foreign) commerce, the boilerplate justification used by Uncle Sam for regulating most everything. As American power has grown, so has Washington’s willingness to apply its laws to the rest of the world. Washington has routinely abducted foreigners overseas for drug offenses. Perhaps the most extreme example was the 1989 invasion of Panama, after which ousted dictator Manuel Noriega was transported to America and convicted of violating U.S. drug laws. Even more problematic has been the Justice Department crusade to turn foreign banks into arms of the IRS. The U.S. has gone after Swiss banks with the greatest enthusiasm, paying informants, filing criminal prosecutions, and imposing multi-billion dollar fines for accepting...
Unfunded Liabilities – Smoke and Mirrors?

Unfunded Liabilities – Smoke and Mirrors?

Recently, I was on a television program with two very prominent local politicians, and the subject of unfunded liabilities came up. We know that actuaries have looked at the Employer-Union Health Benefits Trust Fund, or EUTF, and have found that the plan is “unfunded” by a staggering amount, as in over $18 billion. One of the politicians spoke of the unfunded liability dismissively, like it was an imaginary number. Smoke and mirrors. So I thought I would spend some time talking about what actually goes into this “unfunded liability” calculation. Pension funds and benefit plans have income and expenses, like most of us. We gather the bills on our desk that we happen to have, take out our checkbook to pay them with the money we have at the moment, and then, hopefully, we have money that is left over. This is called a “pay as you go” system, and the money left over is our “cash balance.” The problem with this system is that it only considers what is due, or on hand, at the moment and does not consider the future. To get a better picture of financial condition, benefit funds, insurance companies, and others with large obligations payable in the future try to predict the future. A benefit fund, for example, might not have to pay anything out currently, but if people have been promised health care benefits between the time they retire and the time they die, then it’s possible to estimate who is likely to retire, who is going to draw benefits, how much benefits are going to be drawn, when the benefits are...
Repeal, Not Reform, Is Necessary for the Bloated Welfare State

Repeal, Not Reform, Is Necessary for the Bloated Welfare State

The United States is effectively bankrupt. Economist Laurence Kotlikoff figures the United States faces unfunded liabilities in excess of $200 trillion. Only transforming or eliminating such programs would save the republic. The Left likes to paint conservatives as radical destroyers of the welfare state. Instead, some on the Right have made peace with expansive government. Particularly notable is the movement of “reform conservatism,” or the so-called “reformicons” who, noted Reason’s Shikha Dalmia, “have ended up with a mix of old and new liberal ideas that thoroughly scale back the right’s long-running commitment to free markets and limited government.” The point is not that attempts to improve the functioning of bloated, inefficient programs are bad. But they are inadequate. Yes, government costs too much. Government also does too much. The worst “reform conservatism” idea is to manipulate the state to support a particular “conservative” vision. For instance, Dalmia points out that some reformicons want to use the state to strengthen institutions which they favor. Dalmia noted that Utah’s Sen. Mike Lee has criticized conservatives who “have abandoned words like ‘together,’ ‘compassion,’ and ‘community’.” Although he warned against overreliance on the state, he still wants to use it for his own ends. Reformicon intellectuals and politicians argue for an expended Earned Income Tax Credit for singles and increased deductions for dependents and tax credits for parents who stay at home. Some reformicons want more taxes on the wealthy, new employee-oriented public transportation, and a preference for borrowing over deficit reduction. Senators Lee and Marco Rubio have introduced the “Economic Growth and Family Fairness Tax Reform Plan.” It offers some corporate and...
Grassroot Testimony on Audit of Use of Outside Counsel

Grassroot Testimony on Audit of Use of Outside Counsel

March 24, 2015   To: House Committee on Judiciary Rep. Karl Rhoads, Chair Rep. Joy A. San Buenaventura, Vice Chair   From: Grassroot Institute of Hawaii President Keli’i Akina, Ph.D.   RE: HCR 207 — REQUESTING AN AUDIT OF ALL STATE DEPARTMENTS AND AGENCIES UTILIZING STATE FUNDS FOR OUTSIDE COUNSEL.   Dear Chair and Committee Members: The Grassroot Institute of Hawaii would like to offer its comments on HCR 207, which requests an audit of all state agencies and departments that have used state monies for the hiring of private legal counsel. The fundamental principles of transparency and government accountability make this resolution not only admirable, but necessary. As the text of the resolution notes, the Office of the Attorney General should be the first opinion sought in matters of law involving state actors. If taxpayer funds are used to seek out other legal expertise or representation, it is important that we know that those funds have been used responsibly. Parties that rely on state funds–like HART, the Office of Hawaiian Affairs, or the Department of Education–have used outside counsel in a number of ways, and not always in view of pending litigation. An audit would not only provide a clearer picture of how state funds are being spent, but it will also allow the Office of the Attorney General to identify and weigh issues of importance to the state requiring legal action. Therefore, this resolution should incorporate any use of state monies for the hiring of private counsel. This is an important step towards creating more efficient and accountable government. Thank you for the opportunity to submit our...