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

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.
. Klein with Harika Anna Barlett, "Left Out: A Critique of Paul Krugman Based on a Comprehensive Account of his New York Times

ral liberalizations/privatizations.
eral liberalizations.

ral privatizations.
ve Account of his New York Times Columns, 1997 thru 2006," Econ Journal Watch 5(1) (January 2008). The journal website is www.
2008). The journal website is www.econjournalwatch.org.
The Federal Liberalizations Most Worth Discussing in the Economic Report of the President, According to 11 GMU Economists                                     For liberalization, at least mildly
                                                                                                                                                                                        No Discussion
                                                                                                                                                              Against liberalization, at least mildly
                                                            Paul addressed; 1=favors
Rank Liberalization of Federal Government Regulation Score: N=notKrugman Quotationsliberalization; -1=favors intervention; 0=addressed but no significant leaning
1st    Diminish trade restrictions (tariffs and quotas).                    1 "You could argue that the question whether to grant China ''permanent normal trade relations,'' or P.N.T.R., is mainly a pr
                                                                              Let me spare you the usual economist's sermon on the virtues of free trade, except to say this: although old fallacies abo
                                                                              The costs that tariffs and import quotas impose on domestic consumers almost always exceed the gains they provide to
                                                                              "... economists long ago concluded that import restrictions are the wrong way to deal with domestic problems. Such prob
                                                                              "The U.S. labor movement ... . Probably its leaders don't even admit to themselves that their increasingly vociferous oppo
                                                                              "Everyone knows about Mr. Nader's furious opposition to global trade agreements. But it is less well known that he was e
2nd                                                                         1 AGAINST farm subsidies: "As a group, red states pay considerably less in taxes than the federal government spends wit
       Phase down all agricultural subsidies and liberalize agricultural regulations.
3rd                                                                         N "Two
       Reduce FDA regulations on pharmaceuticals, devices, and information. sectors of the global food industry grew rapidly in the late 1990's. The products of one have been extensively tested
                                                                              "But what we really should be asking is whether FEMA's decline and fall is unique, or part of a larger pattern. What other
4th                                                                       0.5 “Antitrust dilemmas: Even restrictions.
       Lighten the Federal Trade Commission and Department of Justice’s anti-trust enforcement and high-tech companies are not supposed to engage in old-fashioned monopolization; and last ye
                                                                              “Monopoly per se, however, is no sin in the tech sector. On the contrary, the prospect or at least the hope of future mark
                                                                              "Why doesn't the government instead imitate the breakup of AT&T, with a ''vertical'' division of Microsoft that creates mult
                                                                              "In my last column I offered a metaphor: a baron who controls two castles along the Rhine, and extracts tolls from passin
                                                                              "What do these stories have in common? In each case conventional economic analysis of costs and benefits has been b
                                                                              "Monopoly is inherent in the logic of network externalities: the normal life cycle of new industries will be one in which an i
                                                                              When the European Commission indicated it was likely to block the proposed merger between General Electric and Hon
                                                                              "These restrictions mean that AOL Time Warner's future profits will depend on whether it really is able to deliver the prom
5th    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 stun
                                                                              "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 hav
                                                                              "a rigid belief that markets are always superior to government programs -- a belief that ignores basic economics as well a
                                                                              “The most crucial benefit, employment-based health insurance, has been in rapid decline since 2000. The important ques
6th    Repeal legal restrictions on competitive delivery of mail.           N No significant policy discussion on this issue
7th                                                                         N No significant policy the drug laws.
       Decrease the size of the Drug Enforcement Administration in conjunction with liberalizing discussion on this issue
8th                                                                         N No significant Bank discussion on 1970 that
       Repeal the expansion of money laundering laws held within the Patriot Act and the policy Secrecy act ofthis issue require some businesses to keep tabs on customers and report activity to
9th    Revisit Sarbanes-Oxley regulations.                                 -1 "The Sarbanes-Oxley Act created the new board to replace the accounting industry's previous, spectacularly ineffectual s
                                                                              "''I would suggest to you that the single most important innovation shaping [America's] capital market was the idea of gen
10th                                                                        N No significant policy discussion on this issue
       Liberalize the control or enforcement of equal opportunity/anti-discrimination in employment.
11th   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
                                                                              "Administration officials claim that the S.E.C. can still do its job with a much smaller budget. But the S.E.C. is ludicrous
                                                                              "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 corp
                                                                              would do something unprecedented: It will try to impose accounting
                                                                              standardsunchecked crony capitalism will have destroyed faith in our financial markets. ... It's obvious what the Democra
                                                                              "Years of substantially stricter than those required by the federal
                                                                              government.corporate accounting isn't a reports atissue;value, S.&P. will
                                                                              "Honesty in Instead of taking corporate left-right face it's about protecting all investors from exploitation by insiders. By
                                                                              correct the numbers to eliminate what it considers the inappropriate details -- about tricky accounting, stock options, lo
                                                                              "The current crisis in American capitalism isn't just about the specific
                                                                              "The Enron ''one-time'' expenses, story of fund earnings and, above all,
                                                                              treatment ofdebacle is not just the pension a company that failed; it is the story of a system that failed. And the system d
                                                                              stock options -- a major part of incredible speed, our perception of the world and of ourselves changed. It seemed that bef
                                                                              "It was a shocking event. With executive compensation that, according
                                                                              "Oh, and standards, somehow isn't a business expense. S.&P.'s
                                                                              to federal about that corrupt county attorney: last year it seemed, for a while, that corporate scandals -- and the obvious e
                                                                              estimatewrong with backdatingthe 500options?companies slashes aspect, but the main point is the bait-and-switch. Th
                                                                              "What's of ''core earnings'' for stock largest There's a tax evasion
12th   Diminish union privileges.                                          -1 reported profits by an astonishing 25 percent. wage increases in industries like autos and steel; today only one private
                                                                              "In the late 70's powerful unions extracted huge
                                                                              "The does S.&P. -- along with every right to feel that American workers
                                                                              Why U.S. labor movement hasWarren Buffett, Alan Greenspan and just have gotten a raw deal. By standard measures, t
                                                                              about every serious financial economist -- think that current accounting its work force to 40 percent part-time from 20 pe
                                                                              "... Wal-Mart executives have told them the company wants to transform
                                                                              "Sure enough, the rich have seen their incomes soar, while working Americans have seen few if any gains.... it seems lik
                                                                              standards require a drastic overhaul? And if such an overhaul is
                                                                              "Finally, while we can have an interesting discussion S.&P. think that
                                                                              needed, why doesn't the government do it? Why doesabout questions like the role of unions in wage inequality, or the role
13th   Reduce or abolish the minimum wage.                                    "Can anything be itself?
                                                                           -1 it must do the job done to spread the benefits of a growing economy more widely? Of course. A good start would be to in
                                                                              To see the absurdity of the current rules,haves andstock options. Anlack of concern for everyone else, was evident even i
                                                                              "The G.O.P. obsession with helping the consider have-mores, and
                                                                              executive is given can right to purchase shares of the company's stock, the role of unions in wage inequality, or the role
                                                                              "Finally, while we the have an interesting discussion about questions like
                                                                              at a fixed price, of normal trade relations If the stock rises, door remains open to countries with sufficiently democratic reg
                                                                              "the opponents some time in the future. ... assure us, the he buys at
                                                                              "But before you denounce falls, he doesn't exercise the option. At
                                                                              bargain prices. If the stock(or applaud) happiness research as leftist propaganda, be aware that it also cuts the other way
14th   Reduce FCC telecommunications regulations.                             "For most of the last 50 at best, he makes lot it for granted that media
                                                                           -1 worst, he loses nothing; years, public policyatookof money. Nice work if bias was a potential problem. There were, after
                                                                              youin economic terms the telecommunications network resembles not a highway but the railroad industry of the robber-b
                                                                              "... can get it.
                                                                              Yet according to federal accounting standards, such deals don't cost
                                                                              employers anything, as long as the guaranteed price isn't below the
15th                                                                           programs.
       Reduce federal aid to institutions of higher education and researchN No significant policy discussion on this issue
16th                                                                         -1 security.
       Liberalize Department of Homeland Security regulations on air-travel "Does anyone remember the fight over federalizing airport security? Even after 9/11, the administration and conservative m
                                                                                 "Something is amiss with our political philosophy: we are a nation that is unwilling to pay the price of public safety. In ret
                                                                                 "Study after study has urged the federalization of airport security, for pretty much the same reasons city governments tak
17th                                                                          N No significant policy oil industries.
       Decrease the Department of Energy’s subsidies for research and development in gas anddiscussion on this issue
18th                                                                          N "… traffic really has gotten much worse over the last few years. … there is a growing disconnect between private incentiv
       Reduce federal involvement of urban transit (subsidies and restrictions) in cities across the nation.
19th                                                                         place the essential problem was that
       Reduce the energy efficiency requirements and regulations put in -1 "... by the Department of Energy. Europeans got fed up with America's unwillingness to reduce its emission of greenhou
                                                                                 "The most obvious thing is to prevent another dangerous surge in oil consumption. And it so happens that conservation p
20th                                                                         -1 "... the Federal Energy Regulatory Commission, which is supposed gas.
       Decrease the Federal Energy Regulatory Commission’s regulations on hydro-electric dams and interstate transmission of electricity and to act as the nation's watchdog over the energy indu
                                                                                 "There is a theoretical case for a deregulated electricity market. But
                                                                                 "And if such was strangely it's now clear, requires at least three
                                                                                 makingFERC a market work, ineffective during the California crisis, what can we expect from other agencies? Across the
                                                                                 preconditions. First,from George W. Bush on down, offered California nothing but sermons on the virtues of the free mark
                                                                                 "... federal officials, it requires a robust transmission system, yet the
                                                                                 recent blackout made it clear that we have now created a system in the Federal Energy Regulatory Commission, may ha
                                                                                 "It's not easy to top Marie Antoinette, but Curtis Hebert, chairman of
21st                                                                          N No significant has clear responsibility for the
                                                                                 OSHA.
       Decrease the extent of health and safety regulations put in place by which nobody policy discussion on this issuetransmission network.
22nd                                                                             No significant of the Comptroller of Currency.
       Liberalize banking regulations and therefore reduce the responsibilities of the Officepolicy discussion on this issue
                                                                              N Second, it needs a watchdog agency with adequate powers to prevent
23rd                                                                             “… punish price manipulation; FERC received … those powers. Third,
       Liberalize immigration controls (let more people into the country). 0 anda surprising number of the letters Idoesn't haveinsisted, vehemently, that the real culprit behind urban sprawl was pop
                                                                                 "... watchdog must not be an agent history, and grateful that
                                                                                 thatI'm proud of America's immigrant of the very companies it'sthe door was open when my grandparents fled Russia. In o
                                                                                 supposed to be policing. Enough said. and illegal immigration; it's between high-skilled and low-skilled immigrants. High
                                                                                 "... the crucial divide isn't between legal
24th   Liberalize the Consumer Product Safety Commission.                        "Mr. Nader virtues of free markets as much as anyone. But the 1960's,
                                                                              N I admire thedid not begin as an extremist. On the contrary: ingiven what when he made his reputation, the striking thing
                                                                                 "Or consider another example, one closer to lets the my home, in particular. When my arthritis stopped responding to ov
                                                                                 we've seen so far, any state government that home -- federal
25th                                                                         with fuel economy standards set by the Department of Transportation.
                                                                                 "On Wednesday the Senate voted down a plain crazy." (9/2/2003)
       Phase out regulations that force vehicle manufacturers to comply -1 government prod it into deregulation is just proposal by John Kerry and John McCain to raise mileage standards on autom
                                                                                 "The most obvious thing is to prevent another dangerous surge in oil consumption. And it so happens that conservation p
26th                                                                          N industry.
       Decrease federal involvement and regulation in the maritime shippingNo significant policy discussion on this issue
27th                                                                           savings banks and savings and loan this issue
       Eliminate regulations pertaining to thrift institutions, which include N No significant policy discussion onassociations.
28th   Liberalize FAA regulations on airline safety.                          N No significant policy discussion on this issue
29th                                                                          N No significant policy discussion on this issue
       Reduce regulation of marine fisheries by shifting to a system of individual fishing quotas (IFQs).
30th                                                                           EPA.
       Liberalize pollution and environmental controls/enforcement by the 0 "There is evident demoralization at the E.P.A., where the hazardous-waste ombudsman recently joined a parade of officia
                                                                                 "Last week the Bush administration announced new rules that would effectively scrap ''new source review,'' a crucial com
                                                                                 "Some of my friends are in despair. They fear that by the time the political pendulum swings, the damage will be irrepara
31st   Liberalize food and safety controls by the Department of Agriculture. No significant policy discussion on this issue
                                                                              N
32nd                                                                          N with the way policy discussion on this issue
       Lighten the Federal Acquisition Regulations. These regulations deal No significant the government obtains goods and services as well as requirements on contractors for selling to the govern
33rd                                                                          N No significant policy discussion on this issue
       Phase down the federal forest and rangeland research that deals with fisheries, endangered resources, invasive species, and other biological resources.
34th   Liberalize gun control policies.                                       N No significant policy discussion on this issue
35th                                                                          for motor vehicles, along with a reduction issue
       Decrease the Department of Transportation’s safety requirements N No significant policy discussion on thisin the Department’s regulation of anti-theft devices, promotion of safety devices an
 s 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.
   fallacies 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 w
 ey 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 a
ms. 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 eff
 ciferous 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
 that 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
 nt spends 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 o
 sively 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
n. 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 Adminis
n; 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
 f future 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 po
 creates 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 s
 s from 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,
 s has 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, a
  in 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 mak
ctric 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 t
 iver 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.
 tion, 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 f
 on't, 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 effectiv
mics as well as experience -- stands in the way of rational thinking about what should replace it." (11/14/05)
mportant 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 -- w



y ineffectual 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 wan
he idea 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 mi

 t nothing 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 (w
 . is ludicrously 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 th

olicing 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 Bus
 the 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 c
 y insiders. 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 in
 ck options, 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 t
  the 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
emed 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
 the 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
 nd-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 s
 y one private-sector worker in ten is unionized, and the unions that remain are shadows of their former selves." (1/26/2000)
d 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 be
me 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 stayi
 . it 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, b
 ity, 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 la
would 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
evident 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 dis
 ity, 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 la
 emocratic 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
 the 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 wor
 re 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 misusin
   the 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
conservative 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 securi
 safety. 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
vernments 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 anot

 ivate 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
n of 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, a
onservation 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 cons
  energy 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. B

  Across 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 litt
 he 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 manipu
 ssion, 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 powe


 rawl 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
d Russia. 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 immig
migrants. 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
striking 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 lastin
 ponding 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 Pf
 rds 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. Wha
onservation 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 cons




 rade 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
   crucial 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 atte
 ll be 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
n I support 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 th
 ss productive 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
 s, but the steel and sugar industries know exactly what they're getting. (5/24/2002)
will be far less 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.''
 t, James 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
 rican companies 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 M
 rica to the 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 eco
 ation, testing 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 se
and Drug 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 ap
  le future.'' 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 po
 me monopoly 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 sore
 . By contrast, 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 in
ke things 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
nd now ordered, 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 J
se money 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 attem
but it is true 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 vo
  ing more benign. The price of good mergers is eternal vigilance." (1/14/01)
ntage, is 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
ng. To get 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

 ining benefits -- 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 a



 rms ... don'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 believ
es, then in 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 w

ts in dividends (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." (4/5/2
he companies 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

er Enron, 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 opt
hey back off on corporate reform -- which they will." (11/8/2002)
 ating American 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.
 it. Asked about 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 me
  shareholders, 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 se
  lking about 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 manag
 tly parried: 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 f
The moral 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 .

een largely 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
 orkers from 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 tim
minimum wage, but things like the shift in Labor Department policy from protection of worker rights to tacit support for union-busting." (8/18/2006)
age hostage to large tax cuts for giant estates -- have relentlessly favored the interests of a tiny, wealthy minority against everyone else." (9/8/2006)
m acknowledging 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 Amer
  wage, which disproportionately affects African-American workers, and which he has allowed to fall to its lowest real level since 1955." (7/24/2006)
age hostage to large tax cuts for giant estates -- have relentlessly favored the interests of a tiny, wealthy minority against everyone else." (9/8/2006)
 developing 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
e lowest-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 unemploymen
 rred from 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
 bused it. 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 ful
n national 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 cyn
ely terrorist 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 gua
been added 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 th

 e that 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 m
mestic product, 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 anywher
s. One major 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 expen
 oing to happen. 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)

and they show little inclination to make trouble for their once and future employers." (9/27/2002)
hey were 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 p
 ution to 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 yea


 n movement 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 l
 ation, and 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. econ
st. True, there 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 reasonab
 tic, it left 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
  tried to 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 ris
e than that. 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 politician
s. One major 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 expen




his way: ''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 a
ne who pays 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
 the defenders 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 regulat
 he idea that by 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
 erous world. Yet 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

 income people.'' 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 p
  clear. Given the 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 l
imilar fears led 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 individua
s clear that in economic 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 n
proval. ... One 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 -- whic
er the delay in 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 adminis
 rary monopoly power is justified if it is the reward for innovation. It's 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
rowth will be sorely disappointed. The 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
 xpropriation of 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 prof
 ownership might 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
onvinced Judge 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
  legitimate attempt 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)
uld lower their 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. To put the G.E.-Honeywell affair in context … it con

 . save money by 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
 ways the solution." (4/11/05)

 ovides as good 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)



 ow hard to believe 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?
 Enron. So will 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 n

hey can't." (4/5/2000)
 expands the S.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

ecutive stock options from reported profits." (7/2/2002)

 of U.S. markets." (5/21/2002)
 ously had no meaning 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 accoun
ht that such a separation 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
 n, but had managed 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
malfeasance and 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,
 a political issue ... 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.'' W

 e, public schools 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
 Once upon a time 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 t


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


ts, that any labor protection that does not price developing countries out of world markets will be deemed inadequate." (5/10/2000)
 ra unemployment 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)
pposing points 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 opinio
 ory. They are 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 se
n. Ideological cynicism 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
  food. These guardians 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. Las
  Georgia, put 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 thousa

 gged with ever 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. ...S
on't have anywhere 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 w
cy at minor expense, 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 o



ould have been 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 determ
the past two years 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, mai


bout the alleged linkage between immigration and urban sprawl is a popular theme. Like so much of what the anti-globalization activists say, these complaints are mostly but not entirely off base. The grain of
  to the U.S. economy 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
 though reasonable 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
 r some credit for 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
outweighed its risks. 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)
   making politicians 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 efficie
cy at minor expense, 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 o




e, eventually, if 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
n omen. I hope I'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 m
smantling regulation." (11/8/2002)
 implausible. But it 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 d
tional economics (by 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

 n the pursuit of political 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
ould regard as a living 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. ...
 atus as individuals. ... 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 qui
e heartland has no special 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 pr
  business -- which attempts 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
 the Bush administration 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)
 icrosoft too.) It's 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)
drive prices down to 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 tha
d that kind of profit-destroying 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
nly one of several competing 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 downstrea
s that the way to ensure 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 shoul

context … it contradicts 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. Br

rest. The result is a system 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




 weren't sincere? What'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 lo
xtreme, was by no means 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 t


er of auditors has fallen 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 uncollec




comes to accounting procedures.'' 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
 it depends on a set of institutions -- many of them provided by the government -- that limit the potential for insider abuse. These institutions include modern accounting rules, independent auditors, securities
ignificance of the Enron 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 t
  by Eliot Spitzer, the 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
 rporate reform.'' Well, 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 ever

class ... . But if I were 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 tow
that these days the people 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 th




00)
rly between opinion 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 abol
 ly, the Internet seemed 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 g
ood, why not? " (9/5/2005)
 be that way. Last year 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 scre
anes to kill thousands 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 th

 other people. ...Suppose 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 subur
s living room on wheels 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
roduce too little oil, too 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)



 s evident determination 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 d
 to the large, mainly out-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


base. The grain of truth 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 risin
 me of native-born Americans 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 -
s. And immigrants increase 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 s
been avoided." (7/23/2000)

 e over fuel efficiency 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 turn
roduce too little oil, too 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)




n-dollar free pass." (4/26/2002)
s in a big policy mistake 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
 , Deng Xiaoping didn't decide 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 realized that their export-led, market-dr
nese factories and Indian call centers aren't irrational. Addressing those fears isn't protectionist. On the contrary, it's an essential part of any realistic political strategy in support of world trade. That's why the

Congress, not the White House -- was, like the claim that he was just upholding the law, a weak (and characteristic) effort to shift the blame. (Am I the only one who thinks of this as the 'Johnny did it!' admin
 workers here. ... 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 affluent. And the labor movement -- whos
te profit he is quite willing to prevent desperately poor nations from selling their goods in U.S. markets, prevent patients from getting drugs that might give them a decent life and prevent a moderate who gets
 ntial domestic programs are under assault, a small minority of heavily subsidized Americans should feel that they are entitled to even more aid." (5/7/2002)
pplements can, if misused, be quite dangerous. ... But a 1994 law specifically exempts supplements from almost all federal regulation, including the need to report adverse effects. ... You might expect activis

2//2000)
ary monopoly that lasts until something dramatically better comes along. True, Microsoft was not content with winning one tournament; it clearly used its operating-system dominance to get a head start in o
  uniform standard that allows many kinds of software to interact freely. Even if you believe that Bill Gates and associates deserve to be punished, it's important to think these things through. Let's hope we're
 for the downstream applications like Office; after all, rivals to Office survive even now, and would probably do much better once Office lost its home-court advantage. But remember that the objective of antitrus
overnments should try to judge on other criteria who will do the most good with those rights, even if this involves an implicit multibillion-dollar handout of taxpayer money. Now in both cases the opponents of c

 te investment. Broadly speaking, this view is right. (Conventional wisdom usually is.) There are, however, exceptions to the rule, and antitrust policy is one of those exceptions. In today's world, no company

 per patient. Not surprisingly, hundreds of thousands of veterans have switched from private physicians to the V.A. The commander of the American Legion has proposed letting elderly vets spend their Medic




voters, as they look at their shrunken 401(k)'s, remember the false promises of summer." (10/8/2002)
ess, never mind the reality. Still, that's exactly the kind of thing that accounting standards are supposed to prevent. What allowed our corporate emperors to hide their nakedness was a combination of poorly


a year in uncollected taxes, mainly because high-income taxpayers believe they can get away with tax evasion. So starving the I.R.S. isn't about saving money, it's about protecting affluent tax cheats. Simila




ainst profits, and reforms that would make it harder to carry out such scams, such as not allowing accountants to take consulting fees from the same firms they audit. ... Accounting issues are technical eno
 ditors, securities and financial market regulation, and prohibitions against insider trading.... Enron's byzantine network of 3,000 subsidiaries and partnerships -- one for every seven employees -- made a mock
iled business is that much of a story. Think of it this way: The business of most Americans is business, and Enron already ranks as one of the biggest business scandals in history. There have been other bi
enough, it quickly settled on terms that amount to a gentle slap on the wrist. William Galvin, secretary of the commonwealth of Massachusetts -- who is investigating Putnam, which is based in Boston -- sum
 tell me that everything 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)

 m even more toward the interests of the affluent. And the labor movement -- whose influence is far less today than it was even 20 years ago -- is in no position to reverse the political tide. So what's a labor le
 n protected by the National Labor Relations Act, which bars employers from firing workers for engaging in union activities. For a long time the law was effective: workers were reasonably well protected agains




doctrine was abolished in 1987. Restrictions on ownership have been steadily loosened, and it seems likely that next year the Federal Communications Commission will abolish many of the restrictions that r
 fertile breeding ground for libertarian ideology, with many techies asserting that they needed neither help nor regulation from Washington. But the wide-open, competitive world of the dial-up Internet depended
e, the people screening your bags are paid about $15 an hour plus benefits, and they get extensive training. Why didn't the United States take equal care? The answer is that in Europe, airport security is trea
uspects that if the U.S. Army didn't already exist, he would oppose its creation -- maybe he would argue that state militias, assisted by a few independent contractors (that is, companies of mercenaries) cou

e in distant suburbs and drive long distances -- and that would be their right. But as it stands, driving in Atlanta -- and to a lesser degree in every other American metropolitan area -- is in effect heavily subsidi
on suggests that it should actually be much easier for the United States to reduce its energy consumption and carbon dioxide emissions than it is for Europe. High taxes on fuel have already induced Europe




ke a parent who doesn't 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, 'I robbed the liquor store.' " (5/10/2002)
 ns of consumers and taxpayers to a handful of large companies, still sound like a crazy leftist idea? ... But if I were a power producer, I would be more worried about my long-run prospects in a California enr


merged by a rising tide of malls, highways and McMansions. And since some of the faces behind the wheel or the fake Palladian window are brown, it's all too natural to blame them for the trend. Obviously I
 by immigration -- especially immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supply of less-skilled labor, driving down the
providing these services. All of these effects, except for the gains for the immigrants themselves, are fairly small. ...... what really worries me isn't the narrow economics -- it's the political economy, the effec


an operative turned Enron lobbyist, in a memo last April. He proposed selling the administration's drill-and-burn energy plan by painting conservationists as ''eat your peas'' types, who want to take away our c




as that over time, as old facilities closed down, strict rules would become the norm. What happened instead was predictable: In order to keep their exemptions, polluting industries poured money into existing
ort-led, market-driven growth was delivering something Maoism never could. And post-Deng China -- for all its ham-handed repression -- has become a far freer, more open society than anyone could have ima
e. That's why the Nelson Report, a strongly free-trade newsletter on international affairs, recently had kind words for John Kerry. It suggested that he is basically a free trader who understands that ''without so

nny did it!' administration?) The real reason, presumably, was that direct help to the industry would be an explicit budget item, while the costs of protectionism -- though far larger -- are mostly hidden. In addi
movement -- whose influence is far less today than it was even 20 years ago -- is in no position to reverse the political tide. So what's a labor leader to do? Choose a fight that he might be able to win: a fight t
 derate who gets along with business from becoming president." (7/23/2000)

ght expect activist pressure to change that law. But if the bulletin boards at natural product stores near my home are any indication, the people whom one might expect to campaign against an industry that


 a head start in other competitions. Microsoft didn't sabotage competing software -- I happen to be a Netscape surfer and a WordPerfect writer, and they work just fine in Windows -- but it did make sure that
 Let's hope we're not about to cut off our own noses to spite Microsoft's face." (4/26/2000)
bjective of antitrust policy is to help consumers, not disgruntled rivals. The idea that the proposed breakup would undermine the dominance of Windows seems much less compelling. And if Windows remains
 e opponents of conventional economic reasoning might be right. But on the other hand they might be utterly wrong -- that is, instead of offsetting the well-understood conventional costs of their proposals with

rld, no company can compete effectively unless it can operate freely on both sides of the Atlantic -- which it can do only with a green light from antitrust authorities in both the United States and Europe. The

spend their Medicare benefits at V.A. facilities, which would lead to better medical care and large government savings. Instead, the Bush administration has restricted access to the V.A. system, ... they won




 bination of poorly crafted standards, which I wrote about last week, and compliant auditors. Major accounting firms were all too happy to be deceived by corporate smoke and mirrors, as long as they got lucr


ax cheats. Similarly, top officials don't really believe that the S.E.C. can do its job with less money; the whole point is to prevent the agency from doing its job." (10/2/2002)




are technical enough to confuse many juries; expensive lawyers make the most of that confusion; and if all else fails, big-name executives have friends in high places who protect them. ... But the Harken sto
 s -- made a mockery both of accounting rules and of rules against insider trading. Not incidentally, the network also allowed the company to evade taxes in four of the last five years. And Enron executives kn
 ave been other big, admired companies that failed; there have been other companies that turned out to be largely fraudulent. But I can't think of another case in which the most admired company turned out to
d in Boston -- summed it up: ''They're not interested in exposing wrongdoing; they're interested in giving comfort to the industry.''" (11/18/2003)


 what's a labor leader to do? Choose a fight that he might be able to win: a fight to limit imports that compete with the workers he represents. Voters might not see protection as a direct threat to their pocket
 protected against employer intimidation, and the union movement flourished. In the 1970's, however, employers began a successful campaign to roll back unions. This campaign depended on routine violatio




restrictions that remain -- quite possibly even allowing major networks to buy each other. And the informal rule against blatantly partisan reporting has also gone away -- at least as long as you are partisan in
nternet depended on the very government regulation so many Internet enthusiasts decried. Local phone service is a natural monopoly, and in an unregulated world local phone monopolies would probably ins
ort security is treated as a law-enforcement issue and paid for by either the airport or the national government. In the United States, however, airport security is paid for by the airlines; not surprisingly, they sp
 mercenaries) could do the job. And Mr. Barr is by no means exceptional in his views. Congressional Republican leaders have declared themselves dead set against any proposal to federalize airport security

 ct heavily subsidized, because people don't have to pay for the costs they impose on others. Which brings us back to the administration's energy policy. George W. Bush, according to Mr. Fleischer, ''believe
y induced Europeans to do the easy conservation steps; in America, where gasoline is literally cheaper than (bottled) water, we haven't even tried. ... we're not talking about an overall tax increase, that any ne




 (5/10/2002)
n a California enraged over the huge profits earned by Texas-based companies than I would be in a state where the generators and their friends in Washington, instead of squeezing out every last dollar, had h


end. Obviously I don't feel the same way; I am one of those people who feel that immigration is a good thing -- most of all for the immigrants, but good for America too. To some extent this position rests on m
driving down the wages of the worst-paid Americans. ...That's why it's intellectually dishonest to say, as President Bush does, that immigrants do ''jobs that Americans will not do.'' The willingness of Americ
onomy, the effects of having a disenfranchised labor force. Imagine, for a moment, a future in which America becomes like Kuwait or Dubai, a country where a large fraction of the work force consists of illega


o take away our creature comforts. Sure enough, opponents portrayed a modest proposal, which would have set a 36-mile-per-gallon standard 13 years from now, as an immediate threat to the American way




oney into existing facilities rather than build new ones. In an attempt to close this loophole, the Environmental Protection Agency began requiring companies that invested in existing facilities to demonstrate
ne could have imagined 25 years ago, mainly because all-out totalitarianism and a market economy don't mix. You don't have to be a disciple of Friedrich Hayek to believe that free markets and a free society
 s that ''without some kind of political safety valve, Congress may yet be stampeded into protectionism, which benefits no one. … we need more jobs. U.S. employment is at least four million short of where it

y hidden. In addition to being bad economics, the steel tariffs are terrible diplomacy. Our staunchest allies are outraged: Britain's prime minister, Tony Blair, pronounced the move ''unwarranted, unacceptable
e to win: a fight to limit imports that compete with the workers he represents. Voters might not see protection as a direct threat to their pocketbooks (though it is). The payoff may be limited -- the arithmetic


 an industry that is reckless with people's health -- people who are ready and willing to march against multinational corporations -- are among the dietary supplement industry's most enthusiastic customers.


 make sure that the easiest choice for consumers was to use the stuff bundled with Windows, and most people did just that. But there is no evidence that any of this has inflicted any harm on consumers so

Windows remains dominant -- if the upstream baron still controls a crucial choke point -- then the breakup would still be a bad thing for consumers; a baron who controls only one castle has less incentive to h
eir proposals with unconventional benefits, they may be compounding them with unconventional costs. The truth is that we don't know very much about what promotes innovation, and even some of what we t

and Europe. The result is that instead of eroding the power of those authorities, globalization has extended their reach: American regulators can block European mergers, and vice versa. Second, this case in

tem, ... they won't let vets on Medicare buy into the V.A. system, not because they believe this policy initiative would fail, but because they're afraid it would succeed. ... On one side, then, the administration




g as they got lucrative consulting contracts. Time for reform? Not according to some people. Today the Senate Banking Committee is scheduled to take up a bill drafted by Paul Sarbanes, the committee's ch




ut the Harken story still has more to teach us, because the S.E.C. investigation into Mr. Bush's stock sale is a perfect illustration of why his tough talk won't scare well-connected malefactors. Mr. Bush claim
 on executives knew what they were doing. A letter last August from an Enron vice president to the chairman, Kenneth Lay, described how shell companies with names like Condor and Raptor were used to c
 any turned out to be a fraud. So even if the story turns out just to be about Enron, it has been an object lesson in how appearances can deceive. And I don't think this is just a story about one company. ...N



at to their pocketbooks (though it is). The payoff may be limited -- the arithmetic suggests that even a total ban on manufactured imports from third-world countries would raise blue-collar wages no more than
on routine violation of labor law: experts estimate that by 1980 employers were illegally firing at least one out of every 20 workers who voted for a union. But employers rarely faced serious consequences for t




ou are partisan in the right direction. The F.C.C. says that the old rules are no longer necessary because the marketplace has changed. According to the official line, new media -- first cable television, then t
ould probably insist that you use their dial-up service. The reason you have a choice is that they are required to act as common carriers, allowing independent service providers to use their lines. A few years
prisingly, they spend as little as possible. Don't blame them -- the fault lies in ourselves, for depending on private companies to do a job that properly belongs in the public domain. There have been many pro
e airport security, on the grounds that it would create a new federal bureaucracy -- they have even denounced federalization as ''socialism.'' And they have reportedly told the Bush administration that they wo

Fleischer, ''believes that the American people are very wise and that, given the right incentives, they will . . . make their own right determinations about how much they can conserve. . . .'' Unctuousness aside
 ease, that any new tax on carbon could and should be offset by tax cuts elsewhere. In America's current political universe there are too many people who believe that the only good tax is a dead tax for any s




y last dollar, had helped craft a reasonable transition plan to get the state through a difficult time. If Mr. Hebert is immovable, and if legislation co-sponsored by Senator Smith doesn't force his hand, California


osition rests on mundane economic arguments. Foreign-born talent has been crucial in this country's technology boom, and plays a large role in many less glamorous industries too. (For some reason all the
gness of Americans to do a job depends on how much that job pays -- and the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants. Finally, modern Am
consists of illegal immigrants or foreigners on temporary visas -- and neither group has the right to vote. Surely this would be a betrayal of our democratic ideals, of government of the people, by the people. M


he American way of life. Trent Lott displayed a photo of a tiny 70-mile-per-gallon European compact and declared, ''I don't want every American to have to drive this car.'' And senators who are indifferent to th




s to demonstrate that they were merely doing maintenance, rather than creating new capacity that was supposed to face stricter regulation. Everyone agrees that this was an awkward fix. ... But in the early
 nd a free society have some affinity, and that the world has become more democratic over the last two decades partly because it has also become more market-oriented." (5/10/2000)
 short of where it should be. Imports and outsourcing didn't cause that shortfall, but if the job gap doesn't start closing soon, protectionist pressures will become irresistible. …And in the longer run, we need u

ed, unacceptable and wrong.'' Even before the steel verdict, the United States was developing a reputation for hypocrisy -- ready and willing to criticize others for failing to live up to their responsibilities, but un
-- the arithmetic suggests that even a total ban on manufactured imports from third-world countries would raise blue-collar wages no more than 3 or 4 percent -- but who's counting? And if the target is unattra


astic customers. The products are ''natural,'' so they must be O.K. Then there is genetically modified, or GM, food, which has not been shown to do any harm but arouses furious opposition, especially in Eur


on consumers so far. Microsoft does not charge high prices or sell poor-quality products, and for most people the standardization of icons, commands and so on has probably been a plus. This means that th

ess incentive to hold down tolls than one who controls the whole stretch of river, even if there are several downstream barons. But suppose that slicing Microsoft at the waist does lead to a true competition a
ome of what we think we know may not be true. For example, advocates of the breakup of Microsoft like to point to the breakup of AT&T, which everyone thinks was purely positive in its effects on innovation.

 ond, this case inverts traditional roles. Until recently, only the U.S. seemed to take antitrust policy seriously. Europeans might have U.S.-style legislation on the books, but they often seemed to feel that ca

the administration and its allies in Congress oppose expanding the best health care system in America, even though that expansion would save taxpayer dollars, because they're afraid that allowing a succes




he committee's chairman, that would take some modest steps toward accounting and auditing reform. The bill has been endorsed by some of the most respected names in finance -- people like Paul Volcker




 s. Mr. Bush claims that he was ''vetted'' by the S.E.C. In fact, the agency's investigation was peculiarly perfunctory. It somehow decided that Mr. Bush's perfectly timed stock sale did not reflect inside inform
or were used to create fictitious profits, and quoted one manager as saying, ''We are such a crooked company.'' The accounting firm of Arthur Andersen was told of these concerns. Yet it gave Enron a free p
ne company. ...Now the story looks vastly darker. People didn't deceive themselves; they were deceived. It's true that Enron got a lot of mileage out of the same kind of new-economy jargon that fed the dot-c



ges no more than 3 or 4 percent -- but who's counting? And if the target is unattractive enough -- if it is, say, a nasty regime in China -- labor's limited but not negligible lobbying power just might pull off a vict
nsequences for their lawbreaking, thanks to America's political shift to the right. And now that the shift to the right has gone even further, political appointees are seeking to remove whatever protection for wo




 television, then the Internet -- have given the public access to a diversity of news sources, eliminating the need for public guidelines. But is this really true? Cable television has greatly expanded the range o
nes. A few years ago everyone expected the same story to unfold in broadband. The Telecommunications Act of 1996 was supposed to create a highly competitive broadband industry. But it was a botched jo
e been many proposals over the years to put the job in the right hands. For example, in 1997 Robert Crandall, chairman of American Airlines, proposed a national nonprofit corporation to handle airport securi
tion that they would prefer no airport security bill to one that creates any new federal functions. The story here is bigger than airport security. What's now clear, in case you had any doubts, is that America's

ctuousness aside, he has a point. Right now, however, our system doesn't give people the right incentives. So you might imagine that an administration seriously concerned about the nation's future would giv
dead tax for any such proposal to be accepted. ... In other words, the ultimate reason that the climate talks failed, that global warming will go unchecked, is the power of America's vitriolic anti-tax right.... It's




s hand, California and its neighbors Oregon and Washington may have to try a ''buyers' cartel'' -- that is, agree on a maximum price that their states will pay. This might allow an end run around the obstinacy


me reason all the gas stations around here seem to be run by Sikhs.) And one can make a good case that demography -- the perils of a low birth rate -- is a key factor in the economic malaise of Japan and
inally, modern America is a welfare state, even if our social safety net has more holes in it than it should -- and low-skill immigrants threaten to unravel that safety net. Basic decency requires that we provide
 by the people. Moreover, a political system in which many workers don't count is likely to ignore workers' interests: it's likely to have a weak social safety net and to spend too little on services like health ca


e indifferent to the air pollution that kills thousands of Americans each year got all weepy at the prospect -- rejected by serious analysts -- that making cars more efficient would lead to more traffic fatalities.




 But in the early years of the Clean Air Act, environmentalists didn't trust market solutions enough to endorse cap-and-trade. By the time they changed their minds, it was too late. Polluters had lost interest
er run, we need universal health insurance. Social justice aside, it would be a lot easier to make the case for free trade and free markets in general if, like every other major advanced country, we had a syste

onsibilities, but unwilling to live up to its own. Now that our free-trade rhetoric has proved empty, who will listen to our preaching?" (3/8/2002)
e target is unattractive enough -- if it is, say, a nasty regime in China -- labor's limited but not negligible lobbying power just might pull off a victory. In other words, it's understandable that labor has decided th


especially in Europe. ... GM food has not really caught fire as an issue in the U.S.; but the sociology of the anti-GM movement here is utterly familiar to anyone who tracks our own anti-globalization moveme


his means that the real dispute about Microsoft's role is about the putative impact of its strategy on the future -- on innovation, on the range and prices of products that will be available in years to come. The

ue competition among operating systems, that once Powerpoint runs on Linux, the dominance of Windows will fade away. There is still a puzzling question: if your objective is to introduce competition in ope
cts on innovation. It's a bad parallel in many ways, but still it is interesting to notice that next-generation telecommunications is not yet a hot issue in the United States, because thanks to the fragmentation

ed to feel that cartels, like extramarital affairs, were nothing to worry about as long as the participants were discreet -- and they were scornful toward puritanical Americans who insisted on enforcing the letter

allowing a successful government program to expand would undermine their antigovernment crusade and displease powerful business lobbies. On the other side, ideology and fealty to interest groups make th




ike Paul Volcker, the great former Fed chairman, and John Bogle, the famed investor. But Senator Phil Gramm, throwing his weight behind an all-out lobbying effort by the accounting industry, has made it cl




 lect inside information without interviewing him, or any other members of Harken's board. Maybe top officials at the S.E.C. felt they already knew enough about Mr. Bush: his father, the president, had appoin
ve Enron a free pass, and shredded documents when questions arose. The regulators were nowhere to be seen, partly because politicians with personal ties to Enron, like Senator Phil Gramm, took care to
that fed the dot-com bubble -- for example, former C.E.O. Jeffrey Skilling liked to say that the company was ''virtually integrated.'' But despite the high-tech veneer, the structure appeared solid: Enron wasn't



ght pull off a victory. In other words, it's understandable that labor has decided that it must try to help American workers by denying opportunity to even needier workers abroad -- while, of course, denying tha
protection for workers' rights that the labor relations law still provides." (10/6/2006)




nded the range of available entertainment, but has had far less broadening effect on news coverage. There are now five major sources of TV news, rather than three, but this increase is arguably more than off
was a botched job; the promised competition never materialized. ... And that's probably the way it will stay. The political will to fix the 1996 act, to create in broadband the kind of freewheeling environment th
dle airport security. But such proposals went nowhere. They were too much at odds with the spirit of the times, which was all about shrinking the role of government, not expanding it. And the spirit of the tim
s that America's hard right is simply fanatical -- there is literally nothing that will persuade these people to accept the need for increased federal spending. And we're not talking about some isolated fringe; w

 s future would give a high priority to getting those incentives right -- to making Americans take into account the costs their actions impose on other Americans. Oh, never mind. Cost -- economic and environm
nti-tax right.... It's nice to fantasize that if George W. Bush ends up in the White House he might try to heal the wounds of his dubious triumph by, among other things, taking on his own party over environme




nd the obstinacy of Mr. Hebert, and the indifference of his superiors. But a FERC-imposed price cap is the right way to go." (4/15/2001)


 ise of Japan and some European countries; America's openness to immigration is one of the things protecting us from that fate. And I have my own cultural prejudices. Isn't the immigrant experience part of w
es that we provide immigrants, once they're here, with essential health care, education for their children, and more. As the Swiss writer Max Frisch wrote about his own country's experience with immigration,
ces like health care and education. This isn't idle speculation. Countries with high immigration tend, other things equal, to have less generous welfare states than those with low immigration. U.S. cities with e


 traffic fatalities. The surprise, though, is that this dishonest anti-conservationism got crucial support from the United Auto Workers. There's no good reason to think that higher efficiency standards would act




had lost interest in improving the way the emission-control system works, figuring that in a political scene increasingly dominated both by money and by conservative ideology they could buy themselves the
 , we had a system in which workers kept their health coverage even when they happened to lose their jobs. The point is that free trade is politically viable only if it's backed by effective job creation measures


or has decided that it must try to help American workers by denying opportunity to even needier workers abroad -- while, of course, denying that it is doing any such thing. If I were a labor leader I would proba


alization movement. ... throughout those many centuries the vast majority of people lived at the edge of starvation; only very recently has a decent life become available to more than a tiny elite. And that dec


 rs to come. The anti-Microsoft case goes like this: Bill Gates and his henchmen have created an environment in which innovators know that they will not receive their just reward. Invent a better digital mouse

 ompetition in operating systems, why not introduce competition in operating systems? That is, why not follow the advice of a number of Microsoft critics -- like Robert Litan of the Brookings Institution, who a
 e fragmentation of our cellular system we are lagging well behind Europe and Japan in mobile phone technology. And that fragmentation is in part a legacy of the AT&T breakup. My point is not that it is wron

nforcing the letter of the law. Lately, however, Europe has gotten serious about antitrust, giving the competition commissioner broad powers to block mergers and investigate allegations of anticompetitive beh

st groups make them willing to waste billions subsidizing private H.M.O.'s. Remember that contrast the next time you hear some conservative going on about excessive spending on entitlements, and declarin




 y, has made it clear that he will try to kill the bill. I'd like to be nonpartisan here -- really I would. And there are indeed Democrats who have gotten large contributions from accounting firms. But the current ef




 dent, had appointed a good friend as S.E.C. chairman. And the general counsel, who would normally make decisions about legal action, had previously been George W. Bush's personal lawyer -- he negotia
mm, took care to exempt Enron from regulation. ...Yet all the evidence suggests that the Bush administration doesn't get it. On the contrary, until the latest revelations it was moving in the wrong direction. Ha
 d: Enron wasn't a profitless dot-com, run by crazy kids. It seemed to be a company with a proven track record. Its executives seemed to be smart but solid, personable men. It seemed to be a company with



 urse, denying that it is doing any such thing. If I were a labor leader I would probably be a protectionist too. But to understand this political strategy, even to accept its inevitability, is not to approve. Those wh




 bly more than offset by other trends. For one thing, the influence of print news has continued its long decline; for another, all five sources of TV news are now divisions of large conglomerates -- you get your n
ng environment that many Internet users still take for granted, has evaporated. Last March the F.C.C. used linguistic trickery -- defining cable Internet access as an ''information service'' rather than as telecom
e spirit of the times was definitely against anything that looked like an increase in government spending, unless it was explicitly military. If you look at the sad history of precautions not taken, again and aga
solated fringe; we're talking about the men who control the Congressional Republican Party -- and seem, once again, to be in control of the White House." (10/10/2001)

omic and environmental -- is no object when you're defending a blessed lifestyle, especially if it means burning more fossil fuels." (5/13/2001)
y over environmental issues. But quite aside from his oil-industry connections and his dismal environmental record in Texas, Mr. Bush has said he is not convinced that the scientific evidence for global warm




perience part of what this country is all about? Without immigrant families climbing the social ladder, what would become of the American dream?” (5/23/2001)
with immigration, ''We wanted a labor force, but human beings came.'' Unfortunately, low-skill immigrants don't pay enough taxes to cover the cost of the benefits they receive. Worse yet, immigration penaliz
U.S. cities with ethnically diverse populations -- often the result of immigration -- tend to have worse public services than those with more homogeneous populations. Of course, America isn't Dubai. But we're


ndards would actually cost any automobile worker jobs; certainly fighting a modest mileage increase phased over 15 years shouldn't be a priority for the union's members. But as with the Teamsters and ANW




y themselves the right to spew at will. And so it has turned out. ... Aside from cynicism (which has been an almost infallible guide to administration environmental policy so far), how do I reach that conclusion
eation measures and a strong domestic social safety net.(2/27/2004)


 der I would probably be a protectionist too. But to understand this political strategy, even to accept its inevitability, is not to approve. Those who would like easy moral certainties -- which means all of us -- w


ite. And that decent life is made possible by applied science and technology -- including modern agriculture, which relies crucially on chemicals that developing countries cannot afford. Now, finally, genetic m


ter digital mousetrap, and you know that either you sell out to Microsoft -- which puts a ceiling on your potential return -- or you will soon find yourself facing competition from a free Microsoft mousetrap bund

Institution, who argues that any solution that leaves Windows intact is no solution at all -- and break Microsoft into three or four parts, an applications company and several rival sellers of Windows?... The on
not that it is wrong to consider the impact of policy on innovation; it is that because the determinants of innovation are not well understood, clever advocates can invoke technological progress as an all-purpo

ticompetitive behavior. Mr. Monti, an American-trained university professor who assumed that office in 1999, has used those powers aggressively. General Electric and Honeywell are by no means the first co

ents, and declaring that we need to cut back on Medicare and Medicaid benefits." (9/4/2006)




But the current effort to prevent any meaningful accounting reform is explicitly a Republican initiative, one directed from the very top: The New York Times reports that Mr. Gramm is ''working closely with the B




yer -- he negotiated the purchase of the Texas Rangers. I am not making this up. Most corporate wrongdoers won't be quite as well connected as the young Mr. Bush; but like him, they will expect, and prob
ong direction. Harvey Pitt, the new chairman of the Securities and Exchange Commission, made his reputation as a lawyer who represented accounting firms -- including Andersen -- in struggles to maintain
e a company with a great work ethos, a sense of mutual loyalty. Then it came apart at the seems. So now what? At the moment, demands for reform are scattershot and confused. Some people want new ru



pprove. Those who would like easy moral certainties -- which means all of us -- wish that it were simpler, that corporate greed were the only enemy, that people like Mr. Hoffa were standing up for the rights o




s -- you get your news from AOLTimeWarnerGeneralElectricDisneyWestinghouseNewsCorp. And the Internet is a fine thing for policy wonks and news junkies -- anyone can now read Canadian and British ne
 r than as telecommunications -- to exempt cable companies from the requirement to act as common carriers. The commission will probably make a similar ruling on DSL service, which runs over lines owned
n, again and again sums of money that now look trivial were the sticking point. Back in 1996 a government advisory committee on airline security recommended spending $1 billion per year -- about $2 per pa



e for global warming warrants policy action." (11/29/2000)




migration penalizes governments that act humanely. ...... And the political threat that low-skill immigration poses to the welfare state is more serious than the fiscal threat... Realistically, we'll need to reduce
 Dubai. But we're moving in that direction. As of 2002, according to the Urban Institute, 14 percent of U.S. workers, and 20 percent of low-wage workers, were immigrants. Only a third of these immigrant wor


amsters and ANWR drilling, fighting conservation gave the union's leadership an opportunity to look powerful; the appearance, not the reality, was what mattered. You may find it hard to believe that such cruc




h that conclusion? Here's one reason: If a cap-and-trade system is just around the corner, why not wait and introduce the whole system at once? As the E.P.A. press release last week correctly declares, ''u
eans all of us -- wish that it were simpler, that corporate greed were the only enemy, that people like Mr. Hoffa were standing up for the rights of workers everywhere. It's hard for liberals to admit that the U.S.


 finally, genetic modification -- which can substitute for some of the expensive chemicals used in the West -- offers a hope of escape. And what is the response of the supposed friends of the poor? The same


 mousetrap bundled with Windows. So shackling or breaking up Microsoft -- and making it clear that the same will happen to any company that tries the same kind of power play -- will accelerate progress b

ndows?... The only explanation I can give of Justice's half-measures is political: fear that a straightforward proposal to slice up the operating-system market would seem too radical. So the plan is to achieve t
 s as an all-purpose justification for whatever policy they favor. In times past the case against Microsoft might have been overtly populist, with Rooseveltian tirades against ''malefactors of great wealth.'' But th

means the first companies to find Mr. Monti blocking what they thought was a done deal. Was Mr. Monti right to block this particular deal? It's a complicated issue. Let's just say that the case against this m




closely with the Bush administration'' in his efforts to block the Sarbanes bill. Let me repeat what I said last time: Honesty in corporate accounting isn't a left-right issue; it's about protecting all investors from




 expect, and probably receive, kid-glove treatment. In an interesting parallel, today's S.E.C., which claims to be investigating the highly questionable accounting at Halliburton that turned a loss into a reported
ggles to maintain auditor independence. Now we've seen what Andersen did with that independence. The truth is that key institutions that underpin our economic system have been corrupted. The only questi
eople want new rules for 401(k) plans; some want new rules for accountants; some want campaign finance reform; some want a return to regulation. These seem like unrelated agendas, but I think they have



up for the rights of workers everywhere. It's hard for liberals to admit that the U.S. labor movement, with its noble tradition, is now working against the interests of most of the world's poor. But it is." (5/21/200




 an and British newspapers, or download policy analyses from think tanks. But most people have neither the time nor the inclination. Realistically, the Net does little to reduce the influence of the big five sour
  over lines owned by your local phone company. The result will be a system in which most families and businesses will have no more choice about how to reach cyberspace than a typical 19th-century farme
-- about $2 per passenger -- on improvements. The panel rejected the idea of a special airport tax to pay for these improvements, arguing that since this was a national security issue, the money should come




e'll need to reduce the inflow of low-skill immigrants. Mainly that means better controls on illegal immigration. But the harsh anti-immigration legislation passed by the House, which has led to huge protests -
se immigrant workers were naturalized citizens. So we already have a large disenfranchised work force, and it's growing rapidly. The goal of immigration reform should be to reverse that trend. ... I'm all in favo


ve that such crucial decisions are driven by such petty concerns, that an alliance between showboating union leaders and ''drive 100 and freeze a Yankee'' conservatives could do so much damage to our nat




ectly declares, ''under the Clear Skies Initiative, NSR [new source review] would no longer be necessary.'' But then why did polluters so badly want an immediate end to such review before a new system cou
mit that the U.S. labor movement, with its noble tradition, is now working against the interests of most of the world's poor. But it is." (5/21/2000)


e poor? The same as their response to the new opportunities for job- and income-creating exports offered by growing global trade: horror at the thought of change, romantic rhapsodizing about the virtues of th


erate progress by ending the climate of fear. The anti-anti-Microsoft case does not deny that there is some truth to that story, but asserts that taking punitive action will be the worse of two evils because it w

an is to achieve the same result by stealth and indirection. But half-measures in economic policy have a way of being worse than a clear decision either way. This plan could produce the worst of both worlds
at wealth.'' But these days we're supposed to approve of entrepreneurs who get rich. … In short, the promise of technological benefits has become the universal policy justification. Does a proposal seem to c

se against this merger is similar to the case for breaking up Microsoft, though it seems a lot weaker. On the other hand, you don't need as strong an argument to block a merger as you do to break up a goin




all investors from exploitation by insiders. By blocking reform of a broken system, the Bush administration is favoring the interests of a tiny corporate oligarchy over those of everyone else. One final thought:




ss into a reported profit, has yet to interview the C.E.O. at the time -- Dick Cheney. The bottom line is that in the last week any hopes you might have had that Mr. Bush would make a break from his past an
. The only question that remains is how far and how high the corruption extends." (1/18/2002)
 think they have a common theme: They're all about ending an era of laxity, in which nobody asked hard questions as long as everything looked O.K. That era is now over. The political speculation right now



t it is." (5/21/2000)




f the big five sources. In short, we have a situation rife with conflicts of interest. The handful of organizations that supply most people with their news have major commercial interests that inevitably tempt the
9th-century farmer had about which railroad would carry his grain. There were and are alternatives. We could have restored competition by breaking up the broadband industry, restricting local phone and cab
oney should come out of general tax revenues. But officials at the Office of Management and Budget warned that the committee had ''unrealistic expectations regarding the outlook of discretionary funds'' -- th




o huge protests -- legislation that would, among other things, make it a criminal act to provide an illegal immigrant with medical care -- is simply immoral. Meanwhile, Mr. Bush's plan for a ''guest worker'' prog
 . ... I'm all in favor of one provision: offering those already here a possible route to permanent residency and citizenship. Since we aren't going to deport more than 10 million people, we need to integrate thos


amage to our nation's future. But if that's what you think, you do not know with how little wisdom the world is governed." (3/15/2002)




new system could be put in place? And why was the administration willing to accept lots of bad press for a clearly anti-environmental move, if it was seriously planning to impose new controls in the next yea
t the virtues of the traditional life. Hence the strange asymmetry between the treatment of dietary supplements -- which often do real harm, but are ''natural'' -- and GM foods, which can do enormous good, bu


evils because it will create a different, and worse, climate of fear -- fear that success itself will be punished. Today Microsoft, tomorrow Intel and eventually (as soon as somebody figures out what it does) Cis

rst of both worlds: it could place a chill on investment even while raising prices and creating system incompatibilities. So here's a plea for clarity: If the court determines that Microsoft's sins warrant dismantli
oposal seem to cost taxpayers billions or raise prices to consumers? Never mind -- it will promote innovation! And maybe it will; or maybe in the 21st century, technology, not patriotism, has become the last

 break up a going concern. We're in a gray area, with the precise shade of gray a matter of opinion. Even if you disagree with Mr. Monti's opinion, however, his sincerity is not in doubt. The best answer to th




ne final thought: This isn't just a question of treating American investors fairly. Like the Asian nations before their crisis, the United States relies heavily on inflows of foreign capital, inflows that depend on int




 from his past and champion desperately needed corporate reform have been dashed. Mr. Bush is not a real reformer; he just plays one on TV." (7/12/2002)

ulation right now focuses on who will take the blame for what happened. I admit it: that's a very interesting question. But I suspect that for those who are not directly implicated -- and most politicians won't be




 vitably tempt them to slant their coverage, and more generally to be deferential to the ruling party. ... For the time being, blatant media bias is still limited by old rules and old norms of behavior. But soon the
al phone and cable companies to the business of selling space on their lines to independent Internet service providers. Or we could have accepted limited competition, and regulated Internet providers the way
onary funds'' -- that is, don't expect politicians to come up with the money. And they didn't. This is an issue that goes well beyond terrorism. Last year Laurie Garrett, the author of ''The Coming Plague,'' follow




uest worker'' program is clearly designed by and for corporate interests, who'd love to have a low-wage work force that couldn't vote. Not only is it deeply un-American; it does nothing to reduce the adverse eff
 to integrate those people into our society. But I'm puzzled by the plan to create a permanent guest-worker program, one that would admit 400,000 more workers a year (and you know that business interests




ls in the next year or two? The obvious answer is that both the polluters and top administration officials know that Clear Skies is, figuratively and literally, a smokescreen. Here's another reason: As long as n
 ormous good, but are ''unnatural.'' Too bad that the wretched of the earth will, as usual, pay the price for the fantasies of the affluent." (3/22/2000)


what it does) Cisco. And oh yes, if Amazon ever does start to justify investor expectations, the Justice Department will step in to make sure that it doesn't. So slamming Microsoft will actually place a chill on

warrant dismantling of its Windows monopoly, then so be it. But let's not try to break Windows while pretending we aren't." (4/30/2000)
 become the last refuge of a scoundrel." (6/11/2000)

best answer to those who claim that this is really a protectionist ploy is Mr. Monti's track record: he has repeatedly shown himself willing to oppose the demands of powerful European interest groups. Why w




hat depend on international faith in the integrity of U.S. markets. The Bush administration may believe that investors have nowhere else to go, that the money will keep coming even if we don't reform. That's w




oliticians won't be -- what will matter is not what they did but what they do. Do they act as if they get it -- that they understand that the old laxity is no longer acceptable? Clearly, Dick Cheney doesn't get it: H




ior. But soon the rules will be abolished, and the norms are eroding before our eyes. Do the conflicts of interest of our highly concentrated media constitute a threat to democracy? I've reported; you decide."
providers the way we used to regulate AT&T. But right now we seem to be heading for a system without either effective competition or regulation. Worse yet, the F.C.C. has been steadily lifting restrictions on
ng Plague,'' followed up with a chilling book titled ''Betrayal of Trust: The Collapse of Global Public Health.'' The story she tells is ominously similar to that of airport security: a crucial but unglamorous piece o




ce the adverse effect of immigration on wages. And because guest workers would face the prospect of deportation after a few years, they would have no incentive to become integrated into our society. What
 usiness interests would immediately start lobbying for an increase in that number). Isn't institutionalizing a disenfranchised work force a big step away from democracy? For a hard-line economic conservative




son: As long as new source review was in effect, the regulated industries had an interest in fundamental reform; a sensible cap-and-trade system could have both reduced pollution and increased profits. But n
Liberalizations Count of Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no sig
Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or ag




N
(blank)
Grand Total
Total
  10
   2
   1
   2
  20

  35
                                Total



(blank)   0




     N                     20




     1            2




    0.5       1




     0            2




     -1               10



          0           5    10                   15   20   25

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


                                         Operations
Rank Privatization of Federal Government Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or agains
1st    Disaster insurance (make private and eliminate any subsidy)
                                                       -1

2nd    U.S. Postal Service (along with liberalization of entry)
                                                           N
3rd    Amtrak                                              N
4th    Social Security accounts (even if only a small percentage of pay-ins)
                                                          -1




5th    Space exploration (NASA)                         N
6th    Power and electric infrastructure                -1



7th    All job training and workforce assistance programs
                                                        N
8th    Disaster response agencies                       -1




9th    Water infrastructure (excluding natural channels and rivers)
                                                          N
10th   Federal loan programs                              N
11th   Management of the Bureau of Land Management’s public land (262 million acres of land and 300 million acres of subsurface mineral resources)
                                                          N
12th   USDA Forest Service land (155 national forests containing 190 million acres)
                                                          N
13th   Corrections and prison systems                     N
14th   Federal Deposit Insurance Corporation              N
15th   Air traffic control                                N
16th   Payroll processing                                 N
17th   National Park Service land (79.3 million publicly owned acres which include national monuments, historic trails, lakeshores, recreation areas, and national parks)
                                                          N
18th   Recycling centers                                  N
19th   The provision of immunization services             N
20th   Highways, parking, and bridges                     N
21st   Patent and Trademark Office                        N
22nd   Federal libraries                                  N
cussing 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 check
        "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 S
        "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 t
        "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 o
        "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
        “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 c
        "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 wh
        "... 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 econom
        "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 cor
        "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 b
        "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
        "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 thi
        "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 tw
        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
        "Some commentators haveraises questionsthe Columbia disaster is more than a setback warning about the dangers theplacing spacefaith in markets. … In fact, textbook right. ... I say this withthat it
        "California's … experience suggested that about deregulation. And more broadly, it is a -- that it marks the end of of whole blind shuttle program. Let's hope they're economics suggests regre
        failureweek the get-go. Indeed, manned space flight in general has turned out to be a bust. The key it more or less official: the electricityhas beenthe Golden State is partly It has advanced the caus
        "Last from a report by the Independent System Operator, which runs California's power grid, made word here is ''manned.'' Space flight crisis in a huge boon to mankind. the result of market man
        "California's power crisis isn't just Space flight has investors, a lot to improve life here on Earth, as space-based systems help us track a tale communicate with -- of an ill-conceived deregulation
        through space-based observation. about misguided also done too excited by the new economy to maintain the old infrastructure. It's alsostorms,of misguided policy one another, even find out where
        Yet almost all the payoff from space travel, scientific and practical, has come from unmanned vehicles and satellites. Yes, astronauts fitted the Hubble telescope with new eyeglasses; but that asid
        No significant policy discussion on this issue
        extension of the cold war. After the Soviet Union dropped out of the space race, we stopped visiting the moon. But why do we still send people into orbit? ... The sad truth is that for many years NA
        "...the private sector .can't rebuild not get intoon itstoday.The an opengoes beyondthe only real purpose of the Internationalinfrastructure, which only us agovernment can provide. Rebuilding is also blo
        to invent reasons to . . but let's the region that own. It's reason secret that the need for flood protection and basic Space Station is to give the reason to keep flying space shuttles.
        Does day since Katrina brings more evidence of the lethal ineptitude of federal officials. ... Experts say that we will 72 hours after a natural disaster are the crucial and back again. At prompt act
        "Eachthat mean people should never again go into space? Of course not. Technology marches on: someday the first have a cost-effective way to get people into orbitwindow during whichthat point it
        "But what we really should be asking is whether FEMA's decline and fall into space, part of a larger pattern. much to do -- is a dead end. " (2/4/2003)
        approach -- using hugely expensive rockets to launch a handful of people is unique, orwhere they have nothingWhat other government functions have been crippled by politicization, cronyism and/or
        "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 administra
        "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 reconstructio
        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
 he administration has done almost nothing to make good on last year's promises." "A recent article in The National Journal describes a Kafkaesque situation in which devastated towns and parishes seeking




 deas about valuation, today's stock prices look very high. So would investing in stocks now be a classic case of bad timing? ... If you think that stocks are currently overpriced, this proposal sounds like a re
 ystem is in imminent danger of collapse, that we must destroy Social Security in order to save it." (12/7/2004)
 e, there is no room for any genuine compromise. When it comes to privatization, just say no." (3/1/2005)
are even having a hard time pretending that they want to strengthen Social Security, not dismantle it. At one of Senator Rick Santorum's recent town-hall meetings promoting privatization, college Republicans
ucracies, while the private sector is always lean and efficient. But when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less th
he Bush plan would have transformed Social Security from a social insurance program into a mutual fund, with nothing except a name in common with the system F.D.R. created." (8/15/2005)
 vatizers don't kill it. And many Wal-Mart employees already rely on Medicaid to pay for health care, especially for their children. ... The attack on the safety net is motivated by ideology, not popular demand
be slower. Which brings us to the privatizers' Catch-22. They can rescue their happy vision for stock returns by claiming that the Social Security actuaries are vastly underestimating future economic growth.
sevelt. ... since private accounts would do nothing to improve Social Security's finances ... there would be large benefit cuts ... under Mr. Bush's plan, workers with private accounts that fared poorly would find
a nest egg. It's a loan.'' For years, privatizers -- including Mr. Bush -- have claimed that people would do better with private accounts than with traditional Social Security even if they played it safe and invested
 conomic assumptions underlying most projections for Social Security make that impossible. The Social Security projections that say the trust fund will be exhausted by 2042 assume that economic growth
  system's finances, and that it would lead to a dangerous increase 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 Secur

wer companies an incentive to invest. And so you could argue that no public intervention is warranted -- indeed, that the caps that still place an upper limit on electricity prices only worsen the problem, that w
 easy, almost irresistible, for each individual company to manipulate 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 v
 tech sector -- overestimating the demand for its services -- was severely punished, the error of the California power companies -- underestimating the demand for their product -- has been richly rewarded. Yo

 they aren't sure whether their customers and workers will return, 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
nge paralysis'' set in among Bush administration officials, who debated lines of authority while thousands died. What caused that paralysis? President Bush certainly failed his test. After 9/11, all the country
 other agencies suffering from some version of the FEMA syndrome. ... Yesterday The Independent, the British newspaper, published an interview about the environmental aftermath of Katrina with Hugh Kau
s reports that Department of Housing and Urban Development officials initially announced plans to issue rent vouchers, then backed off after meeting with White House aides. As the article notes, the adminis
h cronyism and privatization. But he didn't. FEMA remains a demoralized organization, unable to replenish its ranks: it currently has fewer than 84 percent of its authorized personnel." (8/28/2006)
towns and parishes seeking federal funds have been told to jump through complex hoops, spending time and money they don't have on things like proving that felled trees were actually knocked down by Kat




is proposal sounds like a recipe for disaster: it will encourage workers to buy stocks at exactly the wrong time -- eventually leading to an even worse Social Security crisis, as the government finds itself unde


tization, college Republicans began chanting, ''Hey hey, ho ho, Social Security's got to go.'' But before the anti-privatization forces assume that winning the rational arguments is enough, they need to read M
  toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are around 20 times as high. And that's a typical number for privatized systems. These fees cut sharply into the r
" (8/15/2005)
eology, not popular demand. The public isn't taken with the vision of an ''ownership society''; it seems to want more, not less, social insurance." (5/13/2005)
ng future economic growth. But in that case, we don't need to worry about Social Security's future: if the economy grows fast enough to generate a rate of return that makes privatization work, it will also yield
s that fared poorly would find themselves destitute. Why expose workers to that much risk? Ideology. ... social insurance programs whose purpose, above all, is to protect Americans against the extreme eco
y played it safe and invested in U.S. government bonds (which yield 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 gover
 ume that economic growth will slow as baby boomers leave the work force. The actuaries predict that economic growth, which averaged 3.4 percent per year over the last 75 years, will average only 1.9 perc
un financing of Social Security with the case for private accounts parallels the three-card-monte technique the Bush administration used to link terrorism to the Iraq war. Speeches about Iraq invariably include

 worsen the problem, that we should rely on market competition to solve the crisis. But how competitive is the electricity market? What makes California's power crisis politically explosive is the suspicion th
at they are either saints or very bad businessmen, because they would have been passing up an obvious opportunity to increase their profits. ... the Federal Energy Regulatory Commission, which is suppose
as been richly rewarded. You don't have to be a raving populist to think that there is something wrong with that, and you don't have to be a conspiracy theorist to wonder whether there are some perverse ince

  and basic amenities." (12/9/2005)
st. After 9/11, all the country really needed from him was a speech. This 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 pe
 th of Katrina with Hugh Kaufman, a senior policy analyst in the agency's Office of Solid Waste and Emergency Response, whom one suspects is planning to join the exodus. ''The budget has been cut,'' he s
he article notes, the administration has ''repeatedly sought to cut or limit'' the existing housing voucher program. This suggests that what administration officials fear isn't that housing vouchers would fail, but
nel." (8/28/2006)
tually knocked down by Katrina, only to face demands for even more paperwork. Apologists for the administration will doubtless claim that blame for the lack of progress rests not with Mr. Bush, but with the




 government finds itself under intense pressure to bail out the baby boomers. ... But suppose that it is right, and that current stock valuations are in fact reasonable. Does this then validate Mr. Bush's plan? A


 nough, they need to read Mr. Frank. The message of Mr. Frank's book is that the right has been able to win elections, despite the fact that its economic policies hurt workers, by portraying itself as the defen
se fees cut sharply into the returns individuals can expect on their accounts. In Britain, which has had a privatized system since the days of Margaret Thatcher, alarm over the large fees charged by some inv


tization work, it will also yield a bonanza of payroll tax revenue that will keep the current system sound for generations to come. Alternatively, privatizers can unhappily admit that future stock returns will be m
 ans against the extreme economic insecurity that prevailed before the New Deal. 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 som
your private account in government bonds, you would face benefit cuts equal 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 in
 s, will average only 1.9 percent over the next 75 years. In the long run, profits 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 tha
s about Iraq invariably included references to 9/11, leading much of the public to believe that invading Iraq somehow meant taking the war to the terrorists. When pressed, war supporters would admit they lack

explosive is the suspicion that it's not just about inadequate capacity, but also about artificially inflated prices. How might market manipulation work? … a large producer could actually increase its profits by
mmission, which is supposed to act as the nation's watchdog over the energy industry, lately seems more like a lapdog. I was particularly struck with the report that FERC's staff found that California's power
here are some perverse incentives when an industry dominated by a few 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


onsequence of Mr. Bush's personal inadequacy; it was a consequence of ideological hostility to the very idea of using government to serve the public good. For 25 years the right has been denigrating the pub
e budget has been cut,'' he said, ''and inept political hacks have been put in key positions.'' That sounds familiar, and given what we've learned over the last two weeks there's no reason to doubt that characte
 ing vouchers would fail, but that they would succeed -- and that this success would undermine the administration's ongoing efforts to cut back housing aid. So here's the key to understanding post-Katrina po
 with Mr. Bush, but with the inherent inefficiency of government bureaucracies. That's the great thing about being an antigovernment conservative: even when you fail at the task of governing, you can claim vi




n validate Mr. Bush's plan? Alas, no. You see, those high returns cited by Mr. Bush -- the returns that are supposed to produce huge gains for workers free to make their own investment decisions -- are wha


portraying itself as the defender of mainstream values against a malevolent cultural elite. The right ''mobilizes voters with explosive social issues, summoning public outrage which it then marries to pro-busin
e fees charged by some investment companies eventually led government regulators to impose a ''charge cap.'' Even so, fees continue to take a large bite out of British retirement savings. …Then there's the


 uture stock returns will be much lower than they have been claiming. But without those high returns, the arithmetic of their schemes collapses. It really is that stark: any growth projection that would permit t
 ..it's foolish to imagine some sort of widely acceptable compromise with Mr. Bush about Social Security. Moderates and liberals want to preserve the America F.D.R. built. Mr. Bush and the ideological mov
y to get ahead would be to invest in risky assets like stocks, and hope for higher yields. But if the investment went wrong and you earned less than 3 percent after inflation, your benefit cuts would leave you p
have to keep rising faster than profits, decade after decade. The price-earnings ratio -- the value of a company's stock, divided by its profits -- is widely used to assess whether a stock is overvalued or underv
porters would admit they lacked evidence of any significant links between Iraq and Al Qaeda, let alone any Iraqi role in 9/11 -- yet in their next sentence it would be 9/11 and Saddam, together again. Similarly

tually increase its profits by inventing technical problems that shut down some of its generators, thereby driving up the price it gets on its remaining output. … you have to wonder why the deregulators didn't
found that California's power companies ''had the potential to exercise market power,'' but could not conclude that they had actually used that power.... What FERC could do is impose a temporary cap on w
ed on the belief that we had transcended the old limitations -- in the age of the Internet we no longer had to worry about the generation and transmission bottlenecks that had always prevented a workable fre


has been denigrating the public sector, telling us that government is always the problem, not the solution. Why should we be surprised that when we needed a government solution, it wasn't forthcoming? ... I
eason to doubt that characterization -- or to disregard his warning of an environmental cover-up in progress. ... The point is that Katrina should serve as a wakeup call, not just about FEMA, but about the exec
nderstanding post-Katrina policy: Mr. Bush can't avoid helping Katrina's victims, but he doesn't want to legitimize institutions that help the needy, like the housing voucher program. As a result, his administra
 governing, you can claim vindication for your ideology." (8/28/2006)




 stment decisions -- are what stock investors got during an era in which people were very leery of stocks, and hence prices were low compared with earnings. Now that people are no longer so nervous, prices


 it then marries to pro-business economic policies. Cultural anger is marshaled to achieve economic ends.'' In Mr. Frank's view, this is a confidence trick: politicians like Mr. Santorum trumpet their defense o
 savings. …Then there's the issue of poverty among the elderly. Privatizers who laud the Chilean system never mention that it has yet to deliver on its promise to reduce government spending. More than 20 y


rojection that would permit the stock returns the privatizers need to make their schemes work would put Social Security solidly in the black. And I suspect that at least some privatizers know that. Mr. Baker
ush and the ideological movement he leads ... want to destroy it." (2/8/2005)
enefit cuts would leave you poorer than if you had never opened that private account. So people are expected to take a loan from the government and use it to buy stocks, and if that turns out to have been a
tock is overvalued or undervalued. Historically, that ratio averaged about 14. Today it's about 20. Where would it have to go to yield a 6.5 percent rate of return? I asked Dean Baker, of the Center for Econom
am, together again. Similarly, calls for privatization invariably begin with ominous warnings about Social Security's financial future. When pressed, administration officials admit that private accounts would do

 why the deregulators didn't worry about this, why they didn't ask seemingly obvious questions about whether the market they proposed to create would really work as advertised. And maybe that is the broad
 pose a temporary cap on wholesale prices. This would limit the financial damage to California -- the state government is currently spending more than a billion dollars a month to subsidize electricity purchas
ays prevented a workable free market in electricity, that had made regulation necessary to prevent abuses of market power. Now California has learned to its cost -- $8 billion and counting -- that those old lim


n, it wasn't forthcoming? ... Ideological cynicism 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 d
 ut FEMA, but about the executive branch as a whole. Everything I know suggests that it's in a sorry state -- that an administration which doesn't treat governing seriously has created two, three, many FEMA
m. As a result, his administration refuses to use those institutions, even when they are the best way to provide victims with aid." (10/3/2005)
 no longer so nervous, prices are much higher compared with earnings -- and the higher the price you pay for an asset, the lower the rate of return on your investment. (Duh.) So the rate of return on stock inv


orum trumpet their defense of traditional values, but their true loyalty is to elitist economic policies. ''Vote to stop abortion; receive a rollback in capital gains taxes. Vote to stand tall against terrorists; receive
ent spending. More than 20 years after the system was created, the government is still pouring in money. Why? Because, as a Federal Reserve study puts it, the Chilean government must ''provide subsidies


atizers know that. Mr. Baker has devised a test he calls ''no economist left behind'': he challenges economists to make a projection of economic growth, dividends and capital gains that will yield a 6.5 percen

hat turns out to have been a mistake -- well, too bad. Experts usually tell people to plan for their retirement by investing in a mix of stocks and bonds. They disapprove strongly of speculation on margin: borro
er, of the Center for Economic and Policy Research, to help me out with that calculation (there are some technical details I won't get into). Here's what we found: by 2050, the price-earnings ratio would have t
 t private accounts would do nothing to improve that financial future. Yet in the next sentence, they once again link privatization to the problem posed by an aging population. And so it was with Mr. Greenspa

 And maybe that is the broader lesson of the debacle: Don't rush into a market solution when there are serious questions about whether the market will work. Both economic analysis and British experience s
subsidize electricity purchases. And in a market where ''exercise of market power'' is a major factor, a wholesale price cap might actually increase supplies, because power companies would no longer have a
counting -- that those old limitations still apply." (12/31/2000)


on't believe government can do any good, why not? Which brings us to the Federal Emergency Management Agency. In my last column, I asked whether the Bush administration had destroyed FEMA's effec
 ted two, three, many FEMA's." (9/12/2005)
 e rate of return on stock investments made now will probably be much lower than the returns people got in the past. ... And that means that the proposition that individual investors can expect to do a lot bett


 all against terrorists; receive Social Security privatization.'' But it keeps working. And this week we saw Mr. Frank's thesis acted out so crudely that it was as if someone had deliberately staged it. The right w
ment must ''provide subsidies for workers failing to accumulate enough capital to provide a minimum pension.'' In other words, privatization would have condemned many retirees to dire poverty, and the governm


 s that will yield a 6.5 percent rate of return over 75 years. Not one economist who supports privatization has been willing to take the test. But the offer still stands." (2/2/2005)

 speculation on margin: borrowing to buy stocks. Yet Mr. Bush wants tens of millions of Americans to do exactly that." (2/4/2005)
 e-earnings ratio would have to rise to about 70. By 2060, it would have to be more than 100. In other words, to believe in a privatization-friendly rate of return, you have to believe that half a century from now, t
 so it was with Mr. Greenspan. He painted a dark (and seriously exaggerated) picture of the demographic problem, and said that what we need is a ''fully funded'' system. He then conceded that Bush-style pri

 ysis and British experience should have rung warning bells about California's deregulation scheme; but those warnings were ignored -- just as similar warnings are being ignored by enthusiasts for market solu
 anies would no longer have an incentive to withhold electricity to drive up its price. But it's not going to happen. Blame knee-jerk free-market ideology, or the political influence of the power companies (many o




 had destroyed FEMA's effectiveness. Now we know the answer. … the undermining of FEMA began as soon as President Bush took office. Instead of choosing a professional with expertise in responses to
s can expect to do a lot better than the Social Security Administration -- so much better that we can wave away concerns about increased risk -- evaporates. So Mr. Bush can defend himself against the cha


berately staged it. The right wants to dismantle Social Security, a successful program that is a pillar of stability for working Americans. AARP stands in the way. So without a moment's hesitation, the usual
dire poverty, and the government stepped back in to save them. The same thing is happening in Britain. Its Pensions Commission warns that those who think Mrs. Thatcher's privatization solved the pension




at half a century from now, the average stock will be priced like technology stocks at the height of the Internet bubble -- and that stock prices will nonetheless keep on rising. Social Security privatizers usual
onceded that Bush-style privatization would do nothing to improve the system's funding. But privatization ''as a general model,'' he said, ''has in it the seeds of developing full funding by its very nature.'' Nice m

  enthusiasts for market solutions for everything from prescription drug coverage to education." (12/10/2000).
 e power companies (many of which are based in, yes, Texas). Whatever the reason, it is hard to imagine an administration less likely to be sympathetic to California's plight than the one currently in power."




h expertise in responses to disaster to head the agency, Mr. Bush appointed Joseph Allbaugh, a close political confidant. Mr. Allbaugh quickly began trying to scale back some of FEMA's preparedness prog
fend himself against the charge of bad timing by arguing that stocks are not overvalued, that their high prices are justified because people no longer demand traditionally high rates of return. But how can he th


ment's hesitation, the usual suspects declared that this organization of staid seniors is actually an anti-soldier, pro-gay-marriage leftist front." (2/25/2005)
atization solved the pension problem are living in a ''fool's paradise.'' A lot of additional government spending will be required to avoid the return of widespread poverty among the elderly -- a problem that Britain




al 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 profits; t
ng by its very nature.'' Nice metaphor, but what does it mean? Clearly, he was trying to create the impression of links where none exist. Mr. Greenspan went on to concede that the opponents of privatization


 the one currently in power." (3/25/01)




f FEMA's preparedness programs. … the failed response to Katrina shows that we are less ready to cope with a terrorist attack today than we were four years ago. But the downgrading of FEMA continued,
s of return. But how can he then assume that people will nonetheless get those traditional high returns -- and use that assumption as the basis for a huge policy initiative?" (5/17/2000)




erly -- a problem that Britain, like the U.S., thought it had solved. … 20 years from now, an American version of Britain's commission will warn that big additional government spending is needed to avert a loo




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." (2/1/2005)
e opponents of privatization are right to worry about the huge borrowing that Bush-style privatization would entail. Privatizers claim that financial markets won't be disturbed by all that borrowing because the




grading of FEMA continued, with the appointment of Michael Brown as Mr. Allbaugh's successor. … That contempt, as I've said, reflects a general hostility to the role of government as a force for good. And A
000)




ding is needed to avert a looming surge in poverty among retirees. So the Bush administration wants to scrap a retirement system that works, and can be made financially sound for generations to come with




 /2005)
that borrowing because the Bush plan prescribes offsetting cuts in guaranteed benefits for the workers who open private accounts. Mr. Greenspan, who does know a thing or two about markets, put his finger




nt as a force for good. And Americans living along the Gulf Coast have now reaped the consequences of that hostility. The administration has always tried to treat 9/11 purely as a lesson about good versus e
for generations to come with modest reforms. Instead, it wants to buy into failure, emulating systems that, when tried elsewhere, have neither saved money nor protected the elderly from poverty.” (12/17/04)




about markets, put his finger on the reason why those prospective future benefit cuts wouldn't offset current borrowing in the eyes of investors: ''Well, the problem is that you cannot commit future Congresses




 lesson about good versus evil. But disasters must be coped with, even if they aren't caused by evildoers. Now we have another deadly lesson in why we need an effective government, and why dedicated pub
rly from poverty.” (12/17/04)




ot commit future Congresses to stay with that.'' Yet the chairman managed to avoid admitting the obvious -- that borrowing on the scale the Bush plan requires would substantially increase the risk of a financ




ment, and why dedicated public servants deserve our respect. Will we listen?" (9/5/2005)
increase the risk of a financial crisis. And the headlines didn't emphasize his concession that crucial critiques of the Bush plan are right. As he surely intended, the headlines emphasized his support for priv
phasized his support for privatization." (2/18/2005)
Privatizations Count of Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no sign
Score: N=not addressed; 1=favors liberalization; -1=favors intervention; 0=addressed but no significant leaning for or ag

N
(blank)
Grand Total
Total
   4
  18

  22
                              Total




(blank)   0




     N                        18




     -1       4




          0   2   4   6   8           10      12   14   16   18   20

                                      Total

				
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