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									To the reader: This Excel file constitutes Appendix 3 of the following article: Daniel B. Klein with Harika Anna Barlett, "Left Out:

This Excel contains the investigation of Krugman’s treatment of 57 potential federal liberalizations/privatizations.
The "Liberalization" worksheet contains the analysis and scoring on 35 potential federal liberalizations. The "Privatization" worksheet contains the analysis and scoring on 22 potential federal privatizations.

arika Anna Barlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of his New York Times Columns, 1997 thru 20

alizations/privatizations.

Times Columns, 1997 thru 2006," Econ Journal Watch 5(1) (January 2008). The journal website is www.econjournalwatch.org.

urnalwatch.org.

The Federal Liberalizations Most Worth Discussing in the Economic Report of the President , According to 11 GMU Economists Rank Liberalization of Federal Government Regulation
1st Diminish trade restrictions (tariffs and quotas).

For liberalization, at least mildly Against liberalization, at No Discussion least mildly

Score: N=notKrugman Quotations liberalization; -1=favors intervention; 0=addressed but no significant leaning for or Paul addressed; 1=favors

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1 "You could argue that the question whether to grant China ''permanent normal trade relations,'' or P.N.T.R., is mainly a proce Let me spare you the usual economist's sermon on the virtues of free trade, except to say this: although old fallacies about in The costs that tariffs and import quotas impose on domestic consumers almost always exceed the gains they provide to dom "... economists long ago concluded that import restrictions are the wrong way to deal with domestic problems. Such problem "The U.S. labor movement ... . Probably its leaders don't even admit to themselves that their increasingly vociferous oppositi "Everyone knows about Mr. Nader's furious opposition to global trade agreements. But it is less well known that he was equa Phase down all agricultural subsidies and liberalize agricultural regulations. 1 AGAINST farm subsidies: "As a group, red states pay considerably less in taxes than the federal government spends within Reduce FDA regulations on pharmaceuticals, devices, and information. N "Two sectors of the global food industry grew rapidly in the late 1990's. The products of one have been extensively tested, w "But what we really should be asking is whether FEMA's decline and fall is unique, or part of a larger pattern. What other gov Lighten the Federal Trade Commission and Department of Justice’s anti-trust enforcement and restrictions.companies are not supposed to engage in old-fashioned monopolization; and last year a 0.5 “Antitrust dilemmas: Even high-tech “Monopoly per se, however, is no sin in the tech sector. On the contrary, the prospect or at least the hope of future market d "Why doesn't the government instead imitate the breakup of AT&T, with a ''vertical'' division of Microsoft that creates multiple "In my last column I offered a metaphor: a baron who controls two castles along the Rhine, and extracts tolls from passing tr "What do these stories have in common? In each case conventional economic analysis of costs and benefits has been brush "Monopoly is inherent in the logic of network externalities: the normal life cycle of new industries will be one in which an initia When the European Commission indicated it was likely to block the proposed merger between General Electric and Honeyw "These restrictions mean that AOL Time Warner's future profits will depend on whether it really is able to deliver the promise Reduce regulations on healthcare facilities and professionals. -1 "Let me tell you about two government-financed health care programs. One, the Veterans Health Administration, is a stunnin "if we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to "a rigid belief that markets are always superior to government programs -- a belief that ignores basic economics as well as e “The most crucial benefit, employment-based health insurance, has been in rapid decline since 2000. The important question Repeal legal restrictions on competitive delivery of mail. N No significant policy discussion on this issue Decrease the size of the Drug Enforcement Administration in conjunction with liberalizing the drug laws. this issue N No significant policy discussion on Repeal the expansion of money laundering laws held within the Patriot No significant policy discussion on this that require some businesses to keep tabs on customers and report activity to the fed N Act and the Bank Secrecy act of 1970 issue Revisit Sarbanes-Oxley regulations. -1 "The Sarbanes-Oxley Act created the new board to replace the accounting industry's previous, spectacularly ineffectual self"''I would suggest to you that the single most important innovation shaping [America's] capital market was the idea of genera Liberalize the control or enforcement of equal opportunity/anti-discrimination in employment. N No significant policy discussion on this issue Liberalize the SEC control of financial markets. -1 "At the very least, surely, we should impose limits on margin buying; I admit to being completely baffled that nothing has bee "Administration officials claim that the S.E.C. can still do its job with a much smaller budget. But the S.E.C. is ludicrously und "Standard & Poor's, the private bond rating agency, announced that it "Arthur Levitt, Bill Clinton's choice to head the Securities and Exchange Commission, crusaded for better policing of corpora "Years of unchecked crony capitalism will have destroyed faith in our financial markets. ... It's obvious what the Democrats s "Honesty in corporate accounting isn't a left-right issue; it's about protecting all investors from exploitation by insiders. By blo "The current crisis in American capitalism isn't just about the specific details -- about tricky accounting, stock options, loans t "The Enron debacle is not just the story of a company that failed; it is the story of a system that failed. And the system didn't "It was a shocking event. With incredible speed, our perception of the world and of ourselves changed. It seemed that before "Oh, and about that corrupt county attorney: last year it seemed, for a while, that corporate scandals -- and the obvious effor "What's wrong with backdating stock options? There's a tax evasion aspect, but the main point is the bait-and-switch. The pu Diminish union privileges. -1 "In the late 70's powerful unions extracted huge wage increases in industries like autos and steel; today only one private-sec "The U.S. labor movement has every right to feel that American workers have gotten a raw deal. By standard measures, the "... Wal-Mart executives have told them the company wants to transform its work force to 40 percent part-time from 20 perce "Sure enough, the rich have seen their incomes soar, while working Americans have seen few if any gains.... it seems likely "Finally, while we can have an interesting discussion about questions like the role of unions in wage inequality, or the role of Reduce or abolish the minimum wage. -1 "Can anything be done to spread the benefits of a growing economy more widely? Of course. A good start would be to increa "The G.O.P. obsession with helping the haves and have-mores, and lack of concern for everyone else, was evident even in M "Finally, while we can have an interesting discussion about questions like the role of unions in wage inequality, or the role of "the opponents of normal trade relations ... assure us, the door remains open to countries with sufficiently democratic regime "But before you denounce (or applaud) happiness research as leftist propaganda, be aware that it also cuts the other way. F Reduce FCC telecommunications regulations. -1 "For most of the last 50 years, public policy took it for granted that media bias was a potential problem. There were, after all,

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"... in economic terms the telecommunications network resembles not a highway but the railroad industry of the robber-baron Reduce federal aid to institutions of higher education and research programs. N No significant policy discussion on this issue Liberalize Department of Homeland Security regulations on air-travel security. -1 "Does anyone remember the fight over federalizing airport security? Even after 9/11, the administration and conservative me "Something is amiss with our political philosophy: we are a nation that is unwilling to pay the price of public safety. In retrosp "Study after study has urged the federalization of airport security, for pretty much the same reasons city governments take re Decrease the Department of Energy’s subsidies for research and development in gas and oil industries. this issue N No significant policy discussion on Reduce federal involvement of urban transit (subsidies and restrictions) in traffic across thegotten much worse over the last few years. … there is a growing disconnect between private incentives N "… cities really has nation. Reduce the energy efficiency requirements and regulations put in place by the Department of Energy. -1 "... the essential problem was that Europeans got fed up with America's unwillingness to reduce its emission of greenhouse g "The most obvious thing is to prevent another dangerous surge in oil consumption. And it so happens that conservation polic Decrease the Federal Energy Regulatory Commission’s regulations -1 "... the Federal dams and interstateCommission, which is supposed to act as the nation's watchdog over the energy industry, on hydro-electric Energy Regulatory transmission of electricity and gas. "There is a theoretical case for a deregulated electricity market. But "And if FERC was strangely ineffective during the California crisis, what can we expect from other agencies? Across the gov "... federal officials, from George W. Bush on down, offered California nothing but sermons on the virtues of the free market. "It's not easy to top Marie Antoinette, but Curtis Hebert, chairman of the Federal Energy Regulatory Commission, may have Decrease the extent of health and safety regulations put in place by N No significant policy discussion on this issue OSHA. Liberalize banking regulations and therefore reduce the responsibilitiesNo the Office of the Comptroller on Currency. N of significant policy discussion of this issue Liberalize immigration controls (let more people into the country). 0 “… a surprising number of the letters I received … insisted, vehemently, that the real culprit behind urban sprawl was popula "... I'm proud of America's immigrant history, and grateful that the door was open when my grandparents fled Russia. In othe "... the crucial divide isn't between legal and illegal immigration; it's between high-skilled and low-skilled immigrants. High-sk Liberalize the Consumer Product Safety Commission. N "Mr. Nader did not begin as an extremist. On the contrary: in the 1960's, when he made his reputation, the striking thing abou "Or consider another example, one closer to home -- my home, in particular. When my arthritis stopped responding to over-t Phase out regulations that force vehicle manufacturers to comply with fuel economy standards set by the down a proposal by John Kerry and John McCain to raise mileage standards on automob -1 "On Wednesday the Senate voted Department of Transportation. "The most obvious thing is to prevent another dangerous surge in oil consumption. And it so happens that conservation polic Decrease federal involvement and regulation in the maritime shipping industry. N No significant policy discussion on this issue Eliminate regulations pertaining to thrift institutions, which include savings significant policy discussion on this issue N No banks and savings and loan associations. Liberalize FAA regulations on airline safety. N No significant policy discussion on this issue Reduce regulation of marine fisheries by shifting to a system of individual fishing quotas (IFQs). N No significant policy discussion on this issue Liberalize pollution and environmental controls/enforcement by the EPA. 0 "There is evident demoralization at the E.P.A., where the hazardous-waste ombudsman recently joined a parade of officials r "Last week the Bush administration announced new rules that would effectively scrap ''new source review,'' a crucial compon "Some of my friends are in despair. They fear that by the time the political pendulum swings, the damage will be irreparable. Liberalize food and safety controls by the Department of Agriculture.N No significant policy discussion on this issue Lighten the Federal Acquisition Regulations. These regulations dealN No the way the government obtainsthis issue services as well as requirements on contractors for selling to the government with significant policy discussion on goods and Phase down the federal forest and rangeland research that deals with fisheries, endangered resources, invasive species, and other biological resources. N No significant policy discussion on this issue Liberalize gun control policies. N No significant policy discussion on this issue Decrease the Department of Transportation’s safety requirements for motor vehicles,policy discussion on this issue N No significant along with a reduction in the Department’s regulation of anti-theft devices, promotion of safety devices and sa

mainly a procedural issue. The United States won't be reducing any existing trade barriers; all the concessions in terms of opening markets will come from the Chinese side. ... The reason I support P.N.T.R. -- not lacies about international trade have been making a comeback lately (yes, Senator Charles Schumer, that means you), it is as true as ever that the U.S. economy would be poorer and less productive if we turned o provide to domestic producers. Nonetheless, if we didn't have trade agreements, protectionism would usually win. Consumers don't realize that they are hurt by steel tariffs or sugar quotas, but the steel and sugar i Such problems should, instead, be dealt with at the source -- in this case, by having the government take over at least some of those liabilities. Trying to mitigate the problem with tariffs will be far less effective, and erous opposition to imports is, in effect, an effort to improve the condition of American workers by denying opportunity to workers in the rest of the world. But when the Teamsters' president, James P. Hoffa, declare t he was equally adamant in opposing a bill removing barriers to Africa's exports -- a move that Africans themselves welcomed, but which Mr. Nader denounced because of his fear that African companies would b pends within their borders; blue states pay considerably more. Over all, with the immense subsidies the heartland receives from the rest of the country, blue America subsidizes red America to the tune of $90 billio vely tested, without any evidence of harm. Those of the other are known to pose big health risks -- but nobody knows how big, because lobbying by the industry has blocked effective regulation, testing and even re What other government functions have been crippled by politicization, cronyism and/or the departure of experienced professionals? How many FEMA's are there? ... What about the Food and Drug Administration? and last year a report on the industry by the technology magazine Red Herring declared that ''three vendors -- JDS Uniphase, SDL, and E-Tek -- own their market now and for the foreseeable future.'' When you rea ture market dominance is what drives the whole enterprise. Consider Amazon.com: it has been able to build a business only because people believe that it will eventually have at least some monopoly power. If the eates multiple sellers of Windows (so-called ''baby Bills'')? The answer is that Microsoft is not AT&T. Each baby Bell was left with a clearly defined piece of the former company's business. By contrast, if several co om passing traffic. The Justice Department proposal is like letting the baron keep one castle, while giving the other to his nephew. That metaphor suggests that such a breakup would make things worse, with two r as been brushed aside, in favor of guesses about the effects of policy on technological innovation. In the case of the Microsoft decision, textbook economics says that a breakup of the kind now ordered, aside from which an initial field of competitors is brutally winnowed until only one major player remains. Indeed, investors are counting on this process: since everyone now knows that you have to lose money to make money, c and Honeywell, American politicians from George W. Bush on down cried foul, with some alleging that the decision was politically motivated. They're almost certainly wrong about that, but it is true that the E.C.'s er the promised synergies; being big won't be its own reward. ... If a merger is about enhancing market power, it should either be blocked or subjected to restrictions that turn it into something more benign. The pric n, is a stunning success -- but the administration and Republicans in Congress refuse to build on that success, because it doesn't fit their conservative agenda. The other, Medicare Advantage, is a clear failure, bu , we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning. To get effective reform s as well as experience -- stands in the way of rational thinking about what should replace it." (11/14/05) ortant question now, however, is whether we're finally going to try to do something about the big disconnect. Wages may be difficult to raise, but we won't know until we try. And as for declining benefits -- well, ever

effectual self-regulation. Since the purpose of the board is to restore investor confidence, it's crucial that its head be someone forceful, with unquestioned integrity. ... The big accounting firms ... don't want pension dea of generally accepted accounting principles.'' So declared Lawrence Summers, then deputy secretary of the Treasury, in a 1998 speech. Mr. Summers urged troubled Asian economies, then in the middle of a

thing has been done over the past year, as margin debt has soared. And it's now past time to take a serious look at other proposals, like that of subsidizing the creation of futures markets in dividends (which could udicrously underfinanced: staff lawyers and accountants are paid half what they could get in the private sector, usually find themselves heavily outnumbered by the legal departments of the companies they investig

ng of corporate accounting -- though he was often stymied by the power of lobbyists. George W. Bush replaced him with Harvey Pitt, who promised a ''kinder and gentler'' S.E.C. Even after Enron, the Bush admini Democrats should stand for: Above all, they should be the defenders of ordinary Americans against the power of our burgeoning plutocracy. That means hammering the Republicans as they back off on corporate siders. By blocking reform of a broken system, the Bush administration is favoring the interests of a tiny corporate oligarchy over those of everyone else. ... This isn't just a question of treating American investors fa ptions, loans to executives, and so on. It's about the way the game has been rigged on behalf of insiders. ... Yet everything Mr. Bush has said and done lately shows that he doesn't get it. Asked about the Aloha Pe system didn't fail through carelessness or laziness; it was corrupted. ...We usually take the viability of the modern corporation, in which professional managers look after the interests of shareholders, for granted. B ed that before we had lived in a kind of blind innocence, with no sense of the real dangers that lurked. Now we had experienced a rude awakening, which changed everything. No, I'm not talking about Sept. 11; I'm obvious efforts by the administration and some members of Congress to head off any close scrutiny of executive evildoers -- would become a major political issue. But the threat was deftly parried: a few perp walk switch. The public was told that gigantic executive paychecks were rewards for exceptional performance, but in practice executives were lavishly paid simply for showing up at the office. The moral of the story is th ne private-sector worker in ten is unionized, and the unions that remain are shadows of their former selves." (1/26/2000) measures, the real take-home pay of blue-collar workers is lower now than it was a quarter-century ago. You can quibble with the statistics, but without question blue-collar workers have been largely left behind by from 20 percent." Another leaked Wal-Mart memo describes a plan to impose wage caps, so that long-term employees won't get raises. And the company is taking other steps to keep workers from staying too lon seems likely that government policies have played a big role in America's growing economic polarization -- not just easily measured policies like tax rates for the rich and the level of the minimum wage, but things or the role of lax regulation in exploding C.E.O. pay, there is no question that the policies of the current majority party -- a party that has held a much-needed increase in the minimum wage hostage to large tax cut ld be to increase the minimum wage, which in real terms is at its lowest level in half a century. ... Sometimes I even feel sorry for these people and their apologists, who are prevented from acknowledging that ineq dent even in Mr. Bush's speech to the N.A.A.C.P. Mr. Bush never mentioned wages, which have been falling behind inflation for most workers. And he certainly didn't mention the minimum wage, which disproporti or the role of lax regulation in exploding C.E.O. pay, there is no question that the policies of the current majority party -- a party that has held a much-needed increase in the minimum wage hostage to large tax cut ocratic regimes and with adequate labor protection. Give us a decent government in China, they say, one that lets labor unions organize, and we'll open up the door. But few people in the developing world -- or for e other way. For example, how do you feel about the ''living wage'' movement, which in effect wants a large increase in the minimum wage? That would certainly increase the incomes of the lowest-paid workers; bu were, after all, only three national networks, a limited number of radio licenses and only one or two newspapers in many cities. How could those who controlled major news outlets be deterred from misusing their po

e robber-baron era -- that is, before it faced effective competition from trucking. And railroads eventually faced tough regulation, for good reason: they had a lot of market power, and often abused it. Yet the people

nservative members of Congress tried to keep airport security in the hands of private companies. They were more worried about adding federal employees than about closing a deadly hole in national security. Of c ety. In retrospect, our national neglect of airport security boggles the mind. We've known for many years that America was a target of terrorists. And every expert warned that the most likely terrorist plots would inv nments take responsibility for firefighting. Maybe we don't expect airport security personnel to put their lives on the line, but we do place our lives in their hands. To that list of reasons has been added another: the n

ate incentives and public consequences. 
 When you or I decide to drive during ''congested time'' -- what we used to call ''rush hour,'' but which now lasts about six hours every day -- we make that congestion a bit w greenhouse gases, even though it is the world's prime source of such gases. Why is the United States such a big emitter? Energy use tends to be more or less proportional to gross domestic product, and we hav servation policies would be politically easier to implement now than at any time in recent memory. We've just had a vivid reminder of the dangers of dependence on Middle East oil supplies. One major conservation ergy industry, lately seems more like a lapdog. ... What FERC could do is impose a temporary cap on wholesale prices. This would limit the financial damage to California... But it's not going to happen. Blame kne

cross the government, from the Interior Department and the Forest Service to the Environmental Protection Agency, former lobbyists for the regulated industries now hold key positions -- and they show little inclina e free market. The Federal Energy Regulatory Commission, which is supposed to police these things, found no evidence of foul play. Essentially, FERC asked energy companies whether they were manipulating th on, may have pulled it off. Even free-market Republican lawmakers, like Senator Gordon Smith of Oregon, have accepted the idea that temporary price caps are a necessary part of the solution to the power crisis i

wl was population growth, and that therefore it was all because of immigration. … On casual observation I would say that the anti-immigration movement today is where the anti-globalization movement was a coup ussia. In other words, I'm instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration fr ants. High-skilled immigrants -- say, software engineers from South Asia -- are, by any criterion I can think of, good for America. But the effects of low-skilled immigration are mixed at best. True, there are large be ing thing about Mr. Nader was his relative moderation. Fashionable radicals were preaching revolution; he was demanding safer cars. And because his radicalism was practical and realistic, it left a lasting legacy: ding to over-the-counter remedies, I brought it back under control with a new regime that included the anti-inflammatory drug Feldene. But Mr. Nader's organization Public Citizen not only tried to block Pfizer's intro s on automobiles. The outcome came as no surprise, but what does it mean? Was it yet another victory for special interests at the expense of the national interest? No, it was much worse than that. What prevailed servation policies would be politically easier to implement now than at any time in recent memory. We've just had a vivid reminder of the dangers of dependence on Middle East oil supplies. One major conservation

de of officials resigning in protest. Staff members feel that they have no backing from their political superiors. Eric Schaeffer, who recently resigned as the chief of civil enforcement, put it this way: ''The E.P.A. is in rucial component of our current system of air pollution control. This action, which not incidentally will be worth billions to some major campaign contributors, comes as no surprise to anyone who pays attention to w e irreparable. … And most important of all, environmental neglect will have gone past the point of no return. … It's obvious what the Democrats should stand for: Above all, they should be the defenders of ordinary

rt P.N.T.R. -- not with a completely clear conscience, but because the alternatives seem so much worse -- is that I remember what the world was like a couple of decades ago. .... The idea that by the year 2000 W tive if we turned our back on world markets. Furthermore, if the United States were to turn protectionist, other countries would follow. The result would be a less hopeful, more dangerous world. Yet it's bad econom steel and sugar industries know exactly what they're getting. (5/24/2002) ess effective, and will impose a lot of collateral damage. As one harsh critic of the administration's action declared, tariffs ''are nothing more than taxes that hurt low- and moderate-income people.'' Oh, sorry -- tha s P. Hoffa, declares, as he did on this page not long ago, that ''American workers should not be asked to compete with foreigners who are not paid a living wage,'' the implications are clear. Given the low productivi mpanies would be ''run into the ground by multinational corporations moving into local economies.'' (Most African countries would be delighted to attract a bit of foreign investment.) Similar fears led Mr. Nader to co e tune of $90 billion or so each year. Add in the hidden subsidies, like below-cost provision of water for irrigation, nearly free use of federal land for grazing and so on, and it becomes clear that in economic terms A sting and even reporting. One of these sectors faces passionate public opposition, which may soon drive it entirely out of business, while the other basks in a warm glow of public approval. ... One sector is the diet Administration? Serious questions have been raised about the agency's coziness with drug companies, and the agency's top official in charge of women's health issues resigned over the delay in approving Plan B e.'' When you realize that JDS acquired E-Tek at the end of last month, you start to wonder. But on the other hand, JDS and SDL are both genuinely innovative companies; and temporary monopoly power is justifie poly power. If the invisible hand works too well, and competition from other Internet booksellers keeps Amazon's margins near zero forever, the stockholders who have financed its growth will be sorely disappointe trast, if several companies were given the right to sell Windows, their competition would probably drive the price of the operating system almost to nothing; this would amount to an expropriation of intellectual prop worse, with two robber barons instead of one levying tolls on those who pass by. Why, then, does Justice think otherwise? ... If this is true, then putting the castles under separate ownership might loosen the cont dered, aside from disrupting the firm itself, will actually exacerbate the problem of monopoly power, raising prices and increasing market distortions. But Justice has argued -- and convinced Judge Jackson -- that y to make money, and acts on that knowledge, only the eventual prospect of big monopoly profits can justify the prices now being paid for money-losing tech stocks. When does the legitimate attempt to capitalize o ue that the E.C.'s case against the merger is far from watertight. Mario Monti, Europe's competition referee, may have made a bad call on this play. 
 Nonetheless, our politicians should lower their voices. Mr. Monti e benign. The price of good mergers is eternal vigilance." (1/14/01) a clear failure, but it's expanding rapidly thanks to large subsidies the administration rammed through Congress in 2003. ... The long-term relationship with patients also lets the V.A. save money by investing heavil et effective reform, however, we'll need to shed some preconceptions -- in particular, the ideologically driven belief that government is always the problem and market competition is always the solution." (4/11/05)

nefits -- well, every other advanced country manages to provide everyone with health insurance, while spending less on health care than we do. The big disconnect, in other words, provides as good an argument a

on't want pension fund chief John Biggs to lead the new accounting board because they fear he might actually force the industry to shape up. ... This isn't just about Mr. Biggs; it's now hard to believe that any cred n the middle of a disastrous financial crisis, to emulate American-style ''transparency and disclosure.'' Now America has its own problems with corporate accounting, exemplified by Enron. So will we follow our own

nds (which could help ground stock prices in reality). When things are going well there is a strong tendency to suppose that financial markets can take care of themselves. Well, they can't." (4/5/2000) nies they investigate, and often must do their own typing and copying. Officials say there are investigations that they should pursue but can't for lack of resources. And the new law expands the S.E.C.'s responsibil

the Bush administration steadfastly opposed any significant accounting reforms. For example, it rejected calls from the likes of Warren Buffett to require deduction of the cost of executive stock options from repor k off on corporate reform -- which they will." (11/8/2002) erican investors fairly. Like the Asian nations before their crisis, the United States relies heavily on inflows of foreign capital, inflows that depend on international faith in the integrity of U.S. markets." (5/21/2002) bout the Aloha Petroleum deal at his former company Harken Energy -- in which big profits were recorded on a sale that was paid for by the company itself, a transaction that obviously had no meaning except as a ers, for granted. But as economists since Adam Smith have warned, a separation between ownership and management opens the possibility of insider abuse. Indeed, Smith thought that such a separation was a ba bout Sept. 11; I'm talking about the Enron scandal. ...The Enron scandal, on the other hand, clearly was about us. It told us things about ourselves that we probably should have known, but had managed not to see d: a few perp walks created the appearance of reform, a new S.E.C. chairman replaced the lamentable Harvey Pitt, and then we were in effect told to stop worrying about corporate malfeasance and focus on the im of the story is that we still haven't come to grips with the epidemic of corporate misgovernance revealed four years ago by the Enron and WorldCom scandals, then drowned out as a political issue ... And there's n

ely left behind by the nation's economic growth. And far from fighting this inequality in rewards, policy has in general reinforced it: taxes have become less rather than more progressive, public schools for those who m staying too long: in some stores, according to workers, ''managers have suddenly barred older employees with back or leg problems from sitting on stools.'' It's a brutal strategy. Once upon a time a company tha wage, but things like the shift in Labor Department policy from protection of worker rights to tacit support for union-busting." (8/18/2006) ge to large tax cuts for giant estates -- have relentlessly favored the interests of a tiny, wealthy minority against everyone else." (9/8/2006) wledging that inequality is a problem by both their political philosophy and their dependence on financial support from the wealthy. That leaves them no choice but to keep insisting that ordinary Americans -- who ha which disproportionately affects African-American workers, and which he has allowed to fall to its lowest real level since 1955." (7/24/2006) ge to large tax cuts for giant estates -- have relentlessly favored the interests of a tiny, wealthy minority against everyone else." (9/8/2006) ng world -- or for that matter in Washington -- think that such assurances are sincere; they believe that anything short of political perfection will be used as an excuse to block exports, that any labor protection that -paid workers; but it would also surely have at least some adverse effect on the number of jobs available. You may think that a price worth paying -- but the equations say that the extra unemployment would be a v misusing their position? The answer was a combination of regulation and informal guidelines. The ''fairness doctrine'' forced broadcast media to give comparable representation to opposing points of view. Restrict

t. Yet the people making choices today about the future of the Internet -- above all Michael Powell, chairman of the Federal Communications Commission -- seem unaware of this history. They are full of enthusiasm

onal security. Of course, the attempt to keep airport security private wasn't just about philosophy; it was also an attempt to protect private interests. But that's not really a contradiction. Ideological cynicism about go st plots would involve commercial airlines. Yet airports throughout the United States rely on security personnel who are paid about $6 an hour, less than they could earn serving fast food. These guardians of our liv ded another: the need to share sensitive information about potential terrorists. Did recent events finally persuade the doubters? Not a chance. Representative Bob Barr, Republican of Georgia, put it this way: ''To m

congestion a bit worse, and thereby impose a cost on all the other people who are trying to get somewhere. ... despite billions spent on highway construction, the roads have been clogged with ever more cars... Do duct, and we have the biggest economy. But that's not the whole story: We release about twice as much carbon dioxide per capita as other advanced countries, even though we don't have anywhere near twice the ajor conservation step -- closing the loophole that exempts S.U.V.'s from mileage standards -- would be easy to justify. And new technologies that promise much higher fuel efficiency at minor expense, like hybrid ppen. Blame knee-jerk free-market ideology, or the political influence of the power companies (many of which are based in, yes, Texas)." (3/25/01)

show little inclination to make trouble for their once and future employers." (9/27/2002) e manipulating the market. ''Who, us?'' they replied -- and that was that. My favorite FERC study found that power companies had the ability to exercise ''market power,'' and that it would have been profitable for th the power crisis in the Western United States. But last week Mr. Hebert, who has the authority to impose such caps, rejected the idea once again. ... California's electricity bill over the past two years will amount to

ment was a couple of years before Seattle: not yet large enough to be a political force to be reckoned with, but quite possibly on its way to achieving critical mass. And complaints about the alleged linkage between nd immigration from Mexico in particular. If people like me are going to respond effectively to anti-immigrant demagogues, we have to acknowledge those facts. First, the net benefits to the U.S. economy from imm here are large benefits for the low-skilled migrants, who may find even a minimum-wage U.S. job a big step up. Immigration also raises the total income of native-born Americans, although reasonable estimates su a lasting legacy: our tradition of consumer activism, a tradition that rightly honors Mr. Nader as its founding father, makes this country a better place. One might even give Mr. Nader some credit for our current pro block Pfizer's introduction of Feldene in the 1980's; it also tried to get it banned in 1995, despite what was by then a firm consensus among medical experts that the drug's benefits outweighed its risks. If you look f t. What prevailed Wednesday was an alliance between conservatives who hate the very idea of conservation, on one side, and union leaders trying to demonstrate their influence by making politicians jump. It's the ajor conservation step -- closing the loophole that exempts S.U.V.'s from mileage standards -- would be easy to justify. And new technologies that promise much higher fuel efficiency at minor expense, like hybrid

''The E.P.A. is in the back seat, or maybe even riding the bumper, and the energy industry is having a field day.'' So what's actually on offer is a modest new pollution initiative, maybe, eventually, if and when the a ays attention to which way the wind is blowing (from west to east, mainly -- that is, states that vote Democratic are conveniently downwind). But this isn't just a policy change, it's an omen. I hope I'm wrong, but it's nders of ordinary Americans against the power of our burgeoning plutocracy. ... It means defending the environment against the administration's sly, behind-the-scenes program of dismantling regulation." (11/8/20

the year 2000 Western ideas -- not just the ideology of the free market, but the principle of liberal democracy -- would have spread farther than ever before would have seemed implausible. But it happened, largely et it's bad economics to pretend that free trade is good for everyone, all the time. ''Trade often produces losers as well as winners,'' declares the best-selling textbook in international economics (by Maurice Obstfel

'' Oh, sorry -- that wasn't an administration critic. That's what Robert Zoellick, Mr. Bush's trade representative, said a few weeks before his master decided that protectionism in the pursuit of political advantage is n he low productivity of workers in third-world countries, their nations' lack of infrastructure and general lag in development, to insist that such workers be paid what Americans would regard as a living wage is to ins d Mr. Nader to condemn South Africa's new Constitution, the one that ended apartheid, because -- like the laws of every market economy -- it grants corporations some legal status as individuals. ... Mr. Nader now conomic terms America's rural heartland is our version of southern Italy: a region whose inhabitants are largely supported by aid from their more productive compatriots. ... The heartland has no special claim to re sector is the dietary supplement business -- the people who sell you ephedra to lose weight, melatonin to help you sleep, and so on. The other is the genetically modified food business -- which attempts to add ge approving Plan B, the morning-after pill, accusing the agency's head of overruling the professional staff on political grounds. ... You could say that these are all cases in which the Bush administration hasn't worrie ly power is justified if it is the reward for innovation. 
 a judgment call; but if you ask me, the regulators should leave JDS/ SDL alone. (On the other hand, I've said that about Microsoft too.) It's a brave new world It's sorely disappointed. 
 point is that we're not in Kansas anymore -- that is, technology markets cannot function like the market for wheat, in which many competing suppliers drive prices down to the cost of produ The f intellectual property rights. Maybe you think that Microsoft deserves that fate; but it is not a precedent to set lightly. And we might also mention that precisely in order to avoid that kind of profit-destroying competit t loosen the control of both castle lords over passing traffic. Over time Windows would become only one of several competing operating systems, and Office would become only one of several competing office sui e Jackson -- that these conventional costs are outweighed by what it expects to be increased incentives to innovate. In the case of telecom licenses, textbook economics says that the way to ensure efficient use of mpt to capitalize on victory in a competitive race become an illegal abuse of market power? So far, nobody has laid down the ground rules." (1/16/2000) voices. Mr. Monti is one of the good guys in today's global economy. He should not be made the target of attempts at political intimidation. 
 put the G.E.-Honeywell affair in context … it contradicts not one but th To

y investing heavily in preventive medicine, an area in which the private sector -- which makes money by treating the sick, not by keeping people healthy -- has shown little interest. The result is a system that achiev ution." (4/11/05)

od an argument as you could possibly want for a smart, bold populism. All we need now are some smart, bold populist politicians.” (9/1/2006)

eve that any credible reformer will be offered the job, or accept it if offered. And that's grim news. ... What will happen when the public realizes that summer promises of reform weren't sincere? What's amazing is t we follow our own advice? Will we provide investors with the facts they need to make informed decisions? Probably not. And that's bad news, because Enron's case, though extreme, was by no means unique. ... T

E.C.'s responsibilities. So what's going on? Here's a parallel. Since 1995 Congress has systematically forced the Internal Revenue Service to shrink its operations; the number of auditors has fallen by 28 percent. Y

ptions from reported profits." (7/2/2002)

s." (5/21/2002) aning except as a way to inflate reported earnings -- he responded, ''There was an honest difference of opinion. . . . sometimes things aren't exactly black-and-white when it comes to accounting procedures.'' And h paration was a bad idea, except in a handful of businesses. But you can't run a modern economy with family-owned companies and partnerships. So capitalism as we know it depends on a set of institutions -- man anaged not to see. I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society. Quite a few people have belittled the significance of the Enron affair -- not ju nd focus on the imminent threat from Saddam's W.M.D. Now history is repeating itself. The S.E.C. ignored warnings about mutual fund abuses, and had to be forced into action by Eliot Spitzer, the New York attorn e ... And there's no reason to believe that the problem has been solved. Three years ago, Warren Buffett declared that reining in runaway executive pay was the ''acid test of corporate reform.'' Well, executive com

ools for those who can't afford to live in the right places have gotten worse, and so on. A well-meaning economist can give you a list of things that might help America's working class ... . But if I were a labor leader me a company that treated its workers this badly would have made itself a prime target for union organizers. But Wal-Mart doesn't have to worry about that, because it knows that these days the people who are sup

mericans -- who have, in fact, been bypassed by economic growth -- just don't understand how well they're doing.” (7/14/2006)

or protection that does not price developing countries out of world markets will be deemed inadequate." (5/10/2000) ment would be a very bad thing for those who lose their jobs, while a higher wage would make only a small difference to the happiness of those who remain employed." (3/29/2000) s of view. Restrictions on ownership maintained a diversity of voices. And there was a general expectation that major news outlets would stay above the fray, distinguishing clearly between opinion and news report

full of enthusiasm for the wonders of deregulation, dismissive of concerns about market power. And meanwhile tomorrow's robber barons are fortifying their castles. Until recently, the Internet seemed the very em

ynicism about government easily morphs into a readiness to treat government spending as a way to reward your friends. After all, if you don't believe government can do any good, why not? " (9/5/2005) uardians of our lives receive only a few hours of training, and more than 90 percent of the people screening bags have been on the job for less than six months. It didn't have to be that way. Last year a report by the it this way: ''To me as a conservative, I look at a problem and ask, Is this a federal function?'' Think about that for a minute. Terrorists board planes in Boston, and use those planes to kill thousands of innocent peo

er more cars... Do the arithmetic and you find that each individual's decision to commute by car in Atlanta imposes congestion costs of $3,500 per year, or $14 per workday, on other people. ...
 Suppose for a mome ere near twice their per capita G.D.P. The main reason for that disparity is that we have much lower taxes on fuel, especially gasoline. The image of the American filling up his living room on wheels with dollar-a-ga ense, like hybrid gas-electric cars, are already available. All we need is some leadership. Will the Bush administration drop its fixation on drilling in the Arctic -- which would produce too little oil, too late to make an

n profitable for them to do so, but that there was no evidence that they actually had. Those power executives must be swell guys! ... These memos came to light despite FERC's evident determination to see no ev ars will amount to almost $2,000 for every man, woman, and child in the state. And most of that won't represent increased costs of production: it will represent windfall profits to the large, mainly out-of-state compa

d linkage between immigration and urban sprawl is a popular theme. 
 so much of what the anti-globalization activists say, these complaints are mostly but not entirely off base. The grain of truth in the argumen Like conomy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no m able estimates suggest that these gains amount to no more than a fraction of 1 percent. But low-skilled immigration depresses the wages of less-skilled native-born Americans. And immigrants increase the deman or our current prosperity: if Japan had shared our healthy distrust of claims that what is good for General Motors is good for America, its current economic morass might have been avoided." (7/23/2000) isks. If you look for a unifying theme in all these causes, it seems to be not consumer protection but general hostility toward corporations." (7/23/2000) cians jump. It's the same alliance that, last summer, led the House to support drilling in the Arctic National Wildlife Refuge (ANWR) by a surprisingly large margin. ... The debate over fuel efficiency played out accor ense, like hybrid gas-electric cars, are already available. All we need is some leadership. Will the Bush administration drop its fixation on drilling in the Arctic -- which would produce too little oil, too late to make an

f and when the administration gets around to it. Don't you know there's a war on? And meanwhile the big polluters get what they paid for in campaign contributions: a multibillion-dollar free pass." (4/26/2002) 'm wrong, but it's likely that last week's announcement marks the beginning of a new era of environmental degradation. Some background: The origin of new source review lies in a big policy mistake 30 years ago ulation." (11/8/2002)

happened, largely because governments in the developing world became aware of how well some countries had done by opening themselves to the world market. After all, Deng Xiaoping didn't decide to liberalize y Maurice Obstfeld and yours truly). The accelerated pace of globalization means more losers as well as more winners; workers' fears that they will lose their jobs to Chinese factories and Indian call centers aren't

cal advantage is no vice. If Mr. Bush really felt he had to do something for the steel industry, why not address the legacy costs? His excuse -- that such action is up to Congress, not the White House -- was, like the ng wage is to insist that they price themselves out of their jobs. And that is no accident: any policy that didn't price those workers out of the market would offer no relief to workers here. ... in America today the left, ... Mr. Nader now apparently believes that whatever is good for General Motors, or Pfizer, or any corporation, must be bad for the world. To block opportunities for corporate profit he is quite willing to prevent desp pecial claim to represent the ''real America.'' And the blue states have a right to ask why, at a time when the federal government has plunged back into deficit, when essential domestic programs are under assault, ttempts to add genes to natural crops that confer resistance to pests, increased nutritional value and other useful features. ... There is extensive evidence that dietary supplements can, if misused, be quite dangero tion hasn't worried about degrading the quality of a government agency because it doesn't really believe in the agency's mission." (9/12/2005) a brave new world that has such mergers in it; and we should give that new world a chance to evolve before we start to place it under too many old-economy strictures.” (7/12//2000) the cost of producing one more bushel. High-tech competition naturally and necessarily looks like a series of winner-take-all tournaments, in which ''all'' means a temporary monopoly that lasts until something dram stroying competition, rival baby Bills would surely try to differentiate their products, possibly leading to loss of the one undisputed advantage of Microsoft's dominance: a uniform standard that allows many kinds of mpeting office suites. Now one question is whether separating the two pieces of the company would really eliminate the monopoly power of each piece. This is plausible for the downstream applications like Office; re efficient use of a scarce resource is to sell rights to that resource to the highest bidders. But Mr. Negroponte and the French government have argued instead that governments should try to judge on other criter

cts not one but three pieces of conventional wisdom. 
 First, the conventional view is that globalization weakens governments, because it forces them to compete for private investment. Broadly speaking, this view i

ystem that achieves higher customer satisfaction than the private sector, higher quality of care by a number of measures and lower mortality rates -- at much lower cost per patient. Not surprisingly, hundreds of th

hat's amazing is that the enemies of reform felt free to take off their masks even before the election. One can only hope that the media report what's happening, and that voters, as they look at their shrunken 401(k eans unique. ... The point here isn't that top executives are overpaid, though they surely are; it's that the way they are paid rewards them for creating the illusion of success, never mind the reality. Still, that's exactl

n by 28 percent. Yet it's clear that giving the I.R.S. more money would actually reduce the federal budget deficit; the agency estimates that it loses at least $30 billion a year in uncollected taxes, mainly because hig

rocedures.'' And he still opposes both reforms that would reduce the incentives for corporate scams, such as requiring companies to count executive stock options against profits, and reforms that would make it ha nstitutions -- many of them provided by the government -- that limit the potential for insider abuse. These institutions include modern accounting rules, independent auditors, securities and financial market regulatio nron affair -- not just Treasury Secretary Paul O'Neill, with his unfortunate remark about how ''companies come and companies go,'' but commentators who don't think a failed business is that much of a story. Think e New York attorney general. Having finally brought a fraud suit against Putnam Investments, the S.E.C. was in a position to set a standard for future prosecutions; sure enough, it quickly settled on terms that amou ell, executive compensation, which fell briefly after the Enron and WorldCom scandals, has shot right back up. So we're still waiting for serious corporate reform. And don't tell me that everything must be O.K. beca

re a labor leader, I would sneer at my professorial naivete. ... in America today the left, such as it is, has its hands full holding back efforts to tilt the tax-and-benefit system even more toward the interests of the aff eople who are supposed to enforce labor laws are on the side of the employers, not the workers. Since 1935, U.S. workers considering whether to join a union have been protected by the National Labor Relations A

and news reporting. The system didn't always work, but it did set some limits. Over the past 15 years, however, much of that system has been dismantled. The fairness doctrine was abolished in 1987. Restriction

emed the very embodiment of the free-market ideal -- a place where thousands of service providers competed, where anyone could visit any site. And the tech sector was a fertile breeding ground for libertarian ide

ear a report by the General Accounting Office castigated the state of U.S. airport security, comparing it unfavorably with the systems of other advanced nations. In Europe, the people screening your bags are paid ds of innocent people in New York -- and Mr. Barr still can't see why airport security is a federal function? What would convince him that a federal role is warranted? One suspects that if the U.S. Army didn't already

ppose for a moment that anyone who chose to commute by car in Atlanta actually had to pay $14 per day for the privilege. No doubt some people would still choose to live in distant suburbs and drive long distance s with dollar-a-gallon gasoline while his European counterpart carefully spoons precious petrol into his mini is a caricature, but gets at an essential truth. This comparison suggests that it should actually be much e o late to make any difference -- and realize that conservation isn't just a ''sign of personal virtue'' but a way to make the world more stable?" (11/18/2001)

tion to see no evil. (We now know that the Bush administration in effect allowed Enron to choose the commission's members.) As one California official put it: ''FERC is like a parent who doesn't want to believe the ut-of-state companies that own the power plants. Does the idea of a temporary cap on wholesale prices, which would limit this huge transfer of wealth from tens of millions of consumers and taxpayers to a handful

th in the argument is that other things being the same, a growing population means more houses, more cars and hence more sprawl. … farms and traditional towns submerged by a rising tide of malls, highways a mericans by no more than a fraction of 1 percent. Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration -- especially immigration f crease the demand for public services, including health care and education. Estimates indicate that low-skilled immigrants don't pay enough in taxes to cover the cost of providing these services. All of these effects

played out according to the same script. Conservative opponents of higher mileage standards followed closely the guidelines laid down by Ed Gillespie, the top Republican operative turned Enron lobbyist, in a me o late to make any difference -- and realize that conservation isn't just a ''sign of personal virtue'' but a way to make the world more stable?" (11/18/2001)

(4/26/2002) ake 30 years ago. The original Clean Air Act imposed strict rules on new sources of pollution, but it grandfathered existing power plants, refineries and so on. The idea was that over time, as old facilities closed dow

ecide to liberalize China's economy because he was a nice guy, or a secret admirer of Adam Smith; he looked at Taiwan and South Korea and all centers aren't irrational. Addressing those fears isn't protectionist. On the contrary, it's an essential part of any rea

se -- was, like the claim that he was just upholding the law, a weak (and characteristic) effort to shift th ca today the left, such as it is, has its hands full holding back efforts to tilt the tax-and-benefit system eve g to prevent desperately poor nations from selling their goods in U.S. markets, prevent patients from getting drugs that might re under assault, a small minority of heavily subsidized Americans should feel that they are entitled to even more aid." (5/7/ be quite dangerous. ... But a 1994 law specifically exempts supplements from almost all federal regulation, including the nee

til something dramatically better comes along. 
 True, Microsoft was not content with winning one tournament; it clearly used its ope ws many kinds of software to interact freely. Even if you believe that Bill Gates and associates deserve to be tions like Office; after all, rivals to Office survive even now, and would probably do much better once Office lost its home-court advant ge on other criteria who will do the most good with those rights, even if this involves an implicit multibillion-dollar handout of taxpa

eaking, this view is right. (Conventional wisdom usually is.) There are, however, exceptions to the rule, and antitrust policy is o

y, hundreds of thousands of veterans have switched from private physicians to the V.A. The commander of the American Legion ha

r shrunken 401(k)'s, remember the false promises of summer." (10/8/2002) Still, that's exactly the kind of thing that accounting standards are supposed to prevent. What allowed our corporate emperors to hid

Enemies Of Reform)

ainly because high-income taxpayers believe they can get away with tax evasion. So starving the I.R.S. isn't about sa

would make it harder to carry out such scams, such as not allowing accountants to take consulting fees from the same firms th al market regulation, and prohibitions against insider trading.... Enron's byzantine network of 3,000 subsidiaries and partnerships h of a story. Think of it this way: The business of most Americans is business, and Enron already ranks as one of the biggest busi n terms that amount to a gentle slap on the wrist. William Galvin, secretary of the commonwealth of Massachusetts -- who is investiga must be O.K. because stocks have been rising lately. Remember, they rose even faster in the 1990's -- and the 1920's." (10/20/2006

nterests of the affluent. And the labor movement -- whose influence is far less today than it was even 20 years ago Labor Relations Act, which bars employers from firing workers for engaging in union activities. For a long time the law was effective: workers

1987. Restrictions on ownership have been steadily loosened, and it seems likely that next year the Federal Communications Commissio

for libertarian ideology, with many techies asserting that they needed neither help nor regulation from Washington. But the wide-open

ur bags are paid about $15 an hour plus benefits, and they get extensive training. Why didn't the United States take rmy didn't already exist, he would oppose its creation -- maybe he would argue that state militias, assisted by

rive long distances -- and that would be their right. But as it stands, driving in Atlanta -- and to a lesser degree in every other Am ctually be much easier for the United States to reduce its energy consumption and carbon dioxide emissions than it is for Europe. High

want to believe their teenager has gone bad. The memos are significant because they are like finding a diary in the kid's backpack saying, yers to a handful of large companies, still sound like a crazy leftist idea? ... But if I were a power producer, I would be more

malls, highways and McMansions. And since some of the faces behind the wheel or the fake Palladian window are brown, it's all too natu ally immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supp ll of these effects, except for the gains for the immigrants themselves, are fairly small. ...... what really worries me

lobbyist, in a memo last April. He proposed selling the administration's drill-and-burn energy plan by painting conservationists as ''eat

cilities closed down, strict rules would become the norm. What happened instead was predictable: In order to keep their e

Liberalizations Count of Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or against lib -1 0 0.5 1 N (blank) Grand Total

dressed but no significant leaning for or against liberalization Total 10 2 1 2 20 35

Total

(blank)

N

20

1

2

0.5

1

0

2

-1

10

0

5

10
Total

15

20

25

The Federal Privatizations Most Worth Discussing in the Economic Report of the President , According to 11 GMU Economists

Rank Privatization of Federal Government Operations Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or against libera
1st 2nd 3rd 4th Disaster insurance (make private and eliminate any subsidy) -1 U.S. Postal Service (along with liberalization of entry) N Amtrak N Social Security accounts (even if only a small percentage of pay-ins) -1

5th 6th

Space exploration (NASA) Power and electric infrastructure

N -1

7th 8th

All job training and workforce assistance programs N Disaster response agencies -1

9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd

Water infrastructure (excluding natural channels and rivers) N Federal loan programs N Management of the Bureau of Land Management’sN public land (262 million acres of land and 300 million acres of subsurface mineral resources) USDA Forest Service land (155 national forests containing 190 million acres) N Corrections and prison systems N Federal Deposit Insurance Corporation N Air traffic control N Payroll processing N National Park Service land (79.3 million publicly owned acres which include national monuments, historic trails, lakeshores, recreation areas, and national parks) N Recycling centers N The provision of immunization services N Highways, parking, and bridges N Patent and Trademark Office N Federal libraries N

ussing in the Economic Report of the President , According to 11 GMU Economists
For privatization, at least mildly Against privatization, at least mildly

Paul Krugman Columns and Quotes

"The first Louisiana homeowners finally received checks under a federally financed program just three days ago. Mississippi, which has a similar program, has sent out only about two dozen checks so fa "And it should be a matter of intense national shame that Mr. Bush has quietly abandoned his fine promises to New Orleans and the rest of the Gulf Coast." (11/6/2006) No significant policy discussion on this issue No significant policy discussion on this issue "Historically, investors who bought stocks have earned much higher returns than the Social Security Administration, which buys only government bonds. Inevitably, then, many would-be saviors of Social "Privatizing Social Security -- replacing the current system, in whole or in part, with personal investment accounts -- won't do anything to strengthen the system's finances. If anything, it will make things w "The important thing to remember is why the right wants privatization. The drive to create private accounts isn't about finding a way to strengthen Social Security; it's about finding a way to phase out a sy "The Cato Institute and the Heritage Foundation have spent decades campaigning for privatization. Yet they weren't ready to answer even the most obvious questions about how it would work -- like how “As the Bush administration tries to persuade America to convert Social Security into a giant 401(k), we can learn a lot from other countries that have already gone down that road. … Decades of conserv "the nation's most successful government program… Mr. Bush's privatization drive flopped so badly that the topic has almost disappeared from national discussion. …it's important to remember what Mr "... the public safety net F.D.R. and L.B.J. created is more important than ever, now that workers in the world's richest nation can no longer count on the private sector to provide them with economic sec "Social Security privatizers usually defend their bullishness by saying that stock investors earned high returns in the past. But stocks are much more expensive than they used to be, relative to corporate "President Bush isn't trying to reform Social Security. He isn't even trying to ''partially privatize'' it. His plan is, in essence, to dismantle the program, replacing it with a system that may be social but does "If you put part of your payroll taxes into a personal account, your future benefits will be reduced by an amount equivalent to the amount you would have had to repay if you had borrowed the money at a "To get a 6.5 percent rate of return, you need capital gains: if dividends yield 3 percent, stock prices have to rise 3.5 percent per year after inflation. That doesn't sound too unreasonable if you're thinking "On Wednesday Mr. Greenspan endorsed Social Security privatization. ... he offered no justification at all. ... Mr. Greenspan offered no excuse for supporting privatization. In fact, he agreed with two of th No discussion of privatizing NASA. He is AGAINST manned space programs. Claims that for many years NASA has struggled to invent reasons to put people into space, but manned space travel is extremely expensive, andquestions need to allocate resources to areas in which machinesaboutdo the work: "Some commentators have suggested fact, textbook economics suggests that it's actu "California's … experience raises we don't about deregulation. And more broadly, it is a warning can the dangers of placing blind faith in markets. … In that the Columbia disaster is more "Last week a report by the Independent System Operator, which runs California's power grid, made it more or less official: the electricity crisis in the Golden State is partly the result of market manipulatio "California's power crisis isn't just about misguided investors, too excited by the new economy to maintain the old infrastructure. It's also a tale of misguided policy -- of an ill-conceived deregulation plan No significant policy discussion on this issue "...the private sector can't rebuild the region on its own. The reason goes beyond the need for flood protection and basic infrastructure, which only the government can provide. Rebuilding is also blocked "Each day since Katrina brings more evidence of the lethal ineptitude of federal officials. ... Experts say that the first 72 hours after a natural disaster are the crucial window during which prompt action ca "But what we really should be asking is whether FEMA's decline and fall is unique, or part of a larger pattern. What other government functions have been crippled by politicization, cronyism and/or the d "These days, both conservatives and liberals agree that public housing projects are a bad idea, and that housing vouchers -- which help the poor pay rent -- are much better. ... As for the administration's "But bureaucracies don't have to be this inefficient. The failure to get moving on reconstruction reflects lack of leadership at the top. … How many people can even name the supposed reconstruction ''cz No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue No significant policy discussion on this issue

dozen checks so far." "... allocating money and actually using it for reconstruction are two different things, and so far the administration has done almost nothing to make good on last year's promises." "A recent a

be saviors of Social Security believe that stocks are the answer to the system's problems. But if you use conventional ideas about valuation, today's stock prices look very high. So would investing in stocks now be it will make things worse. Nonetheless, the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save ay to phase out a system that conservatives have always regarded as illegitimate. And as long as that is what's at stake, there is no room for any genuine compromise. When it comes to privatization, just say no." uld work -- like how benefits could be maintained for older Americans without a dangerous increase in debt. Privatizers are even having a hard time pretending that they want to strengthen Social Security, not dism Decades of conservative marketing have convinced Americans that government programs always create bloated bureaucracies, while the private sector is always lean and efficient. But when it comes to retiremen remember what Mr. Bush tried to get away with. 
 Mr. Bush came to bury Social Security, not to save it. Over time, the Bush plan would have transformed Social Security from a social insurance program into a m … with economic security. When they reach 65, most Wal-Mart employees will rely heavily on Social Security -- if the privatizers don't kill it. And many Wal-Mart employees already rely on Medicaid to pay for health elative to corporate profits; that means lower dividends per dollar of share value. And economic growth is expected to be slower. Which brings us to the privatizers' Catch-22. They can rescue their happy vision for y be social but doesn't provide security. And the goal, as with his tax cuts, is to undermine the legacy of Franklin Roosevelt. ... since private accounts would do nothing to improve Social Security's finances ... there wed the money at a real interest rate of 3 percent. Peter Orszag of the Brookings Institution got it exactly right: ''It's not a nest egg. It's a loan.'' For years, privatizers -- including Mr. Bush -- have claimed that people ble if you're thinking only a few years ahead. But privatizers need that high rate of return for 75 years or more. And the economic assumptions underlying most projections for Social Security make that impossible. agreed with two of the main critiques of the administration's plan: that it would do nothing to improve the Social Security system's finances, and that it would lead to a dangerous increase in debt. Yet he still came o

uggests that it's actually a good thing that electricity prices skyrocket when supply runs short: that's what gives the power companies an incentive to invest. And so you could argue that no public intervention is warr f market manipulation by power generators. … The generators didn't have to conspire: the logic of the situation made it easy, almost irresistible, for each individual company to manipulate the market. In fact, to bel d deregulation plan gone very wrong. One indication of how badly deregulation has misfired is this: while the error of the tech sector -- overestimating the demand for its services -- was severely punished, the error

ding is also blocked by a vicious circle of uncertainty. Business owners are reluctant to return to the gulf region because they aren't sure whether their customers and workers will return, too. And families are reluct ch prompt action can save many lives. Yet action after Katrina was anything but prompt. Newsweek reports that a ''strange paralysis'' set in among Bush administration officials, who debated lines of authority while onyism and/or the departure of experienced professionals? How many FEMA's are there? Unfortunately, it's easy to find other agencies suffering from some version of the FEMA syndrome. ... Yesterday The Indep the administration's odd insistence on providing public housing instead of relying on the market, The Los Angeles Times reports that Department of Housing and Urban Development officials initially announced pla d reconstruction ''czar''? ... Mr. Bush could have tried to fix FEMA, the agency whose effectiveness he destroyed through cronyism and privatization. But he didn't. FEMA remains a demoralized organization, unabl

year's promises." "A recent article in The National Journal describes a Kafkaesque situation in which devastated towns and parishes seeking federal funds have been told to jump through complex hoops, spending

uld investing in stocks now be a classic case of bad timing? ... If you think that stocks are currently overpriced, this proposal sounds like a recipe for disaster: it will encourage workers to buy stocks at exactly the w cial Security in order to save it." (12/7/2004) to privatization, just say no." (3/1/2005) then Social Security, not dismantle it. At one of Senator Rick Santorum's recent town-hall meetings promoting privatization, college Republicans began chanting, ''Hey hey, ho ho, Social Security's got to go.'' But b ut when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are a al insurance program into a mutual fund, with nothing except a name in common with the system F.D.R. created." (8/15/2005) on Medicaid to pay for health care, especially for their children. ... The attack on the safety net is motivated by ideology, not popular demand. The public isn't taken with the vision of an ''ownership society''; it seems rescue their happy vision for stock returns by claiming that the Social Security actuaries are vastly underestimating future economic growth. But in that case, we don't need to worry about Social Security's future: i al Security's finances ... there would be large benefit cuts ... under Mr. Bush's plan, workers with private accounts that fared poorly would find themselves destitute. Why expose workers to that much risk? Ideology. h -- have claimed that people would do better with private accounts than with traditional Social Security even if they played it safe and invested in U.S. government bonds (which yield 3 percent after inflation). But curity make that impossible. The Social Security projections that say the trust fund will be exhausted by 2042 assume that economic growth will slow as baby boomers leave the work force. The actuaries predict th se in debt. Yet he still came out in favor of the idea. Let me make a detour here. The way privatizers link the long-run financing of Social Security with the case for private accounts parallels the three-card-monte te

no public intervention is warranted -- indeed, that the caps that still place an upper limit on electricity prices only worsen the problem, that we should rely on market competition to solve the crisis. 
 how compet But ate the market. In fact, to believe that the generators didn't engage in market manipulation, you have to believe that they are either saints or very bad businessmen, because they would have been passing up an o severely punished, the error of the California power companies -- underestimating the demand for their product -- has been richly rewarded. You don't have to be a raving populist to think that there is something w

n, too. And families are reluctant to return because they aren't sure whether businesses will be there to provide jobs and basic amenities." (12/9/2005) ebated lines of authority while thousands died. What caused that paralysis? President Bush certainly failed his test. After 9/11, all the country really needed from him was a speech. This time it needed action -- and ome. ... Yesterday The Independent, the British newspaper, published an interview about the environmental aftermath of Katrina with Hugh Kaufman, a senior policy analyst in the agency's Office of Solid Waste an fficials initially announced plans to issue rent vouchers, then backed off after meeting with White House aides. As the article notes, the administration has ''repeatedly sought to cut or limit'' the existing housing vou moralized organization, unable to replenish its ranks: it currently has fewer than 84 percent of its authorized personnel." (8/28/2006)

gh complex hoops, spending time and money they don't have on things like proving that felled trees were actually knocked down by Katrina, only to face demands for even more paperwork. Apologists for the adm

o buy stocks at exactly the wrong time -- eventually leading to an even worse Social Security crisis, as the government finds itself under intense pressure to bail out the baby boomers. ... But suppose that it is right

al Security's got to go.'' But before the anti-privatization forces assume that winning the rational arguments is enough, they need to read Mr. Frank. The message of Mr. Frank's book is that the right has been able t tem, management fees are around 20 times as high. And that's a typical number for privatized systems. 
 These fees cut sharply into the returns individuals can expect on their accounts. In Britain, which has had a

'ownership society''; it seems to want more, not less, social insurance." (5/13/2005) out Social Security's future: if the economy grows fast enough to generate a rate of return that makes privatization work, it will also yield a bonanza of payroll tax revenue that will keep the current system sound for s to that much risk? Ideology. ... social insurance programs whose purpose, above all, is to protect Americans against the extreme economic insecurity that prevailed before the New Deal. The hard right has never 3 percent after inflation). But the official at the briefing made it clear that his boss was fibbing: if you invested your private account in government bonds, you would face benefit cuts equal in value to your investmen orce. The actuaries predict that economic growth, which averaged 3.4 percent per year over the last 75 years, will average only 1.9 percent over the next 75 years. In the long run, profits grow at the same rate as t llels the three-card-monte technique the Bush administration used to link terrorism to the Iraq war. Speeches about Iraq invariably included references to 9/11, leading much of the public to believe that invading Ira

e the crisis. 
 how competitive is the electricity market? What makes California's power crisis politically explosive is the suspicion that it's not just about inadequate capacity, but also about artificially inflated price But d have been passing up an obvious opportunity to increase their profits. ... the Federal Energy Regulatory Commission, which is supposed to act as the nation's watchdog over the energy industry, lately seems mo hink that there is something wrong with that, and you don't have to be a conspiracy theorist to wonder whether there are some perverse incentives when an industry dominated by a few large players finds it hugely

s time it needed action -- and he didn't deliver. But the federal government's lethal ineptitude wasn't just a consequence of Mr. Bush's personal inadequacy; it was a consequence of ideological hostility to the very i cy's Office of Solid Waste and Emergency Response, whom one suspects is planning to join the exodus. ''The budget has been cut,'' he said, ''and inept political hacks have been put in key positions.'' That sound mit'' the existing housing voucher program. This suggests that what administration officials fear isn't that housing vouchers would fail, but that they would succeed -- and that this success would undermine the adm

work. Apologists for the administration will doubtless claim that blame for the lack of progress rests not with Mr. Bush, but with the inherent inefficiency of government bureaucracies. That's the great thing about be

... But suppose that it is right, and that current stock valuations are in fact reasonable. Does this then validate Mr. Bush's plan? Alas, no. You see, those high returns cited by Mr. Bush -- the returns that are suppos

that the right has been able to win elections, despite the fact that its economic policies hurt workers, by portraying itself as the defender of mainstream values against a malevolent cultural elite. The right ''mobilizes s. In Britain, which has had a privatized system since the days of Margaret Thatcher, alarm over the large fees charged by some investment companies eventually led government regulators to impose a ''charge ca

the current system sound for generations to come. Alternatively, privatizers can unhappily admit that future stock returns will be much lower than they have been claiming. But without those high returns, the arithm eal. The hard right has never forgiven F.D.R. (and later L.B.J.) for his efforts to reduce that insecurity ...it's foolish to imagine some sort of widely acceptable compromise with Mr. Bush about Social Security. Moder al in value to your investment, so you would be no better off than under the current system. The only way to get ahead would be to invest in risky assets like stocks, and hope for higher yields. But if the investment ts grow at the same rate as the economy. So to get that 6.5 percent rate of return, stock prices would have to keep rising faster than profits, decade after decade. The price-earnings ratio -- the value of a company ic to believe that invading Iraq somehow meant taking the war to the terrorists. When pressed, war supporters would admit they lacked evidence of any significant links between Iraq and Al Qaeda, let alone any Ira

about artificially inflated prices. 
 How might market manipulation work? … a large producer could actually increase its profits by inventing technical problems that shut down some of its generators, thereby driving u gy industry, lately seems more like a lapdog. I was particularly struck with the report that FERC's staff found that California's power companies ''had the potential to exercise market power,'' but could not conclude large players finds it hugely profitable not to invest. ... let me just point out that deregulation, too, was based on the belief that we had transcended the old limitations -- in the age of the Internet we no longer had to

ological hostility to the very idea of using government to serve the public good. For 25 years the right has been denigrating the public sector, telling us that government is always the problem, not the solution. Why n key positions.'' That sounds familiar, and given what we've learned over the last two weeks there's no reason to doubt that characterization -- or to disregard his warning of an environmental cover-up in progress ss would undermine the administration's ongoing efforts to cut back housing aid. So here's the key to understanding post-Katrina policy: Mr. Bush can't avoid helping Katrina's victims, but he doesn't want to legitim

hat's the great thing about being an antigovernment conservative: even when you fail at the task of governing

-- the returns that are supposed to produce huge gains for workers free to make their own inve

ural elite. The right ''mobilizes voters with explosive social issues, summoning public outrage which i lators to impose a ''charge cap.'' Even so, fees continue to take a large bite out of British retirement savings. …T

hose high returns, the arithmetic of their schemes collapses. It really is that stark: any about Social Security. Moderates and liberals want to preserve the America F.D.R. buil yields. But if the investment went wrong and you earned less than 3 percent a tio -- the value of a company's stock, divided by its profits -- is widely used to assess whet nd Al Qaeda, let alone any Iraqi role in 9/11 -- yet in their next sentence it would be 9/11

generators, thereby driving up the price it gets on its remaining output. 
 you have … wer,'' but could not conclude that they had actually used that power.... What FERC could do is imp Internet we no longer had to worry about the generation and transmission bottlenecks

oblem, not the solution. Why should we be surprised that when we needed a government solu mental cover-up in progress. ... The point is that Katrina should serve as a wakeup call, not just about FEMA, b but he doesn't want to legitimize institutions that help the needy, like the housing voucher pro

Privatizations Count of Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or against lib -1 N (blank) Grand Total

ressed but no significant leaning for or against liberalization Total 4 18 22

Total

(blank)

N

18

-1

4

0

2

4

6

8

10
Total

12

14

16

18

20


								
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