Government Spending



Elephant Talk

One important item you missed for the new congressional agenda ("Capitol Ideas," Feb.) is income-tax reform. Dick Armey (R-Tex.) has a flat-rate tax proposal of 17 percent, with a personal deduction of around $13,000. Another Texas Republican, Bill Archer, would go even further and replace the income tax with a broad-based tax on consumption. Meanwhile, Richard Gephardt (D-Mo.) has his own plan with a lower rate for low incomes (10-11 percent) and a higher, unspecified rate for "the rich."

It would be incredibly invigorating if Congress actually passes a low and simple tax-rate system, giving millions of dollars back to beleaguered taxpayers, and unleashing a new economic renaissance. Let's hope they have the foresight to do it.

Brent J. Bielema
Fulton, IL

Democrats, New and Old

In his otherwise cogent prescription for a new Democratic Party ("The Center Folds," Feb.), Joel Kotkin never gets around to spelling out a pocketbook issue that would connect with young, high-tech workers.

One way for Democrats to get on the correct side of a money issue for both middle-income working families and the young would be to attack payroll taxes, the 7.51 percent Social Security levy in particular. This is an area where Republicans intend on doing nothing despite the prospect that the system will not last past 2010 as it is currently constituted.

Newt Gingrich himself knows that the system is doomed but has made the political calculation that it is better to do nothing for now. Back in 1982 he talked about replacing the system with a private one and in 1986 floated the idea of replacing the payroll tax with a dedicated VAT. By 1990, he was loath to sign onto the Wallop-DeLay plan (which would have cut both payroll taxes and capital gains taxes) at a time when it was the only tax-cut plan which broke out of the pay-as-you-go straitjacket. In short, Gingrich and the GOP have abandoned the field.

The fact that Chile privatized its Social Security system with great success even provides an opportunity for those fact-finding trips to a developing country that Democrats seem to love. But from all indications, anything outside the purview of labor unions holds little appeal for today's Democratic Party.

Jeff A. Taylor
Gaithersburg, MD

Space Debris?

While I agree with the general thrust of T.J. Rodgers's "Technology Traps," (Feb.) and have admired his writing in the past, there are misconceptions, egregious accounting errors, and clear misstatements of fact in his discussion of the federal space program.

First of all, it is Boeing and McDonnell Douglas, not Boeing and Lockheed, who have teamed for the next reusable launch system, though Lockheed, as well as other companies, is expected to compete for it.

Second, contrary to confused reports by the general media, this launcher will not be a Shuttle II. Some elements within NASA might like it to be, but the immediate intent of the program is to build a relatively low-cost (not multibillion-dollar) X-vehicle similar to the X-15—an experimental launcher that will prove out the technologies necessary for a new generation of launch systems to dramatically reduce the cost of space access.

It is expected that these technologies will then be incorporated into an operational system that will be developed with private funding. If the perceived market for this operational vehicle is primarily NASA, then it will indeed become a Shuttle II (and will likely not occur).

On the other hand, if it is designed to satisfy new and growing commercial markets (e.g. low-earth-orbit communications, and my own business, space tourism), then its design will be driven by these market requirements, and it will have much more resemblance in its operations to an airliner than to the shuttle. In either case, any multibillion-dollar investment decision will be based on the demand for launch services, and the money will come from the capital market, not the taxpayer.

Such a program is more in the tradition of the original National Advisory Committee on Aeronautics (NACA), the agency that, with its labs, wind tunnels, and experimental aircraft, provided many of the core technologies that made our nation the leader in military and commercial aviation throughout this century, before it evolved into the present NASA in 1958. While far from ideal, it is a refreshing change from the current disastrous policy of having NASA attempt to develop the operational vehicle and run the airline.

Finally, Mr. Rodgers's discussion of space-based semiconductor manufacturing cannot pass without comment. Accepting for the sake of argument his figure of $500 million for a space shuttle flight (a number which is in continuous dispute), his article would imply first that an entire flight must be dedicated to the purpose of growing gallium arsenide crystals and second, that five such dedicated flights were actually authorized and flown.

Both of these statements are clearly nonsense. Such an experiment would be only one of many on a given flight, probably occurring in the mid-deck of the Orbiter, with the major purpose of the mission determined by the many tons of payload in the payload bay itself, such as a satellite or Spacelab. To charge the entire cost of one, or five, flights to a single mid-deck experiment is, to be as charitable as possible, faulty bookkeeping. But this is what has to be done to come up with a figure of $100 million per wafer. This is surely high by a couple of orders of magnitude. I have no idea what the basis is for his stated eventual cost of $10,000 per wafer—this would depend upon, among other things, the success of the commercial reusable launcher described above in bringing down launch costs. He may be correct that gallium arsenide chip production is not an economically viable space manufacturing business, but he offers little useful information here in making such a determination.

Rand Simberg
Interglobal Space Lines Inc.
Redondo Beach, CA

T.J. Rodgers replies: I do not believe any taxpayers' money should go toward "Space Shuttle II" or the "X-vehicle." In the real, non-NASA world, the investment of even a few million dollars typically requires a precise business plan. If Mr. Simberg wants billions of dollars to go into the "space tourism" business, let him find a sucker other than Uncle Sam.

I agree that my applying the full cost of a shuttle flight to the gallium arsenide wafer experiment is bad accounting. But the experiment was one of the primary objectives of that flight. And the gallium arsenide experiment was carried out on a special second space vehicle deployed from the shuttle. The stated $10,000 per wafer manufacturing cost came directly from the group performing the experiment. From my own gallium arsenide work, I know the $10,000 figure is unacceptable—and probably unachievable, based on NASA's financial track record.

Ratings War

Rick Henderson's trend on congressional ratings from the Council for Citizens Against Government Waste (CCAGW) ("Grade Inflation?," Jan.), implied that the 1994 numbers were "fixed" in favor of Democrats. In particular, Dan Mitchell of the Heritage Foundation claimed that CCAGW was "naive or simplistic" with its ratings and clearly had in mind improving Democrats' scores. His false characterization of the ratings must extend to the bipartisan co-chairmen of the Congressional Grace Caucus, along with the Republican and Democratic Senatorial and Congressional Campaign Committees, all of whom reviewed the ratings prior to their publication.

Mitchell's charges and your article are outrageous and absurd, especially when your reporter appropriately stated that: "The gap between Democrats and Republicans is fairly consistent with those in earlier sessions of Congress." Then, he went on to fabricate a story where none exists.

CCAGW has but one objective, and it has not changed in the past decade: to urge the passage of legislation to end wasteful spending. Because congressional ratings reflect both the shifting composition of Congress and an ever-changing tapestry of legislation, it would be highly irregular if honestly nonpartisan ratings showed no anomalies. In fact, I am downright suspicious of groups claiming to be nonpartisan, yet which consistently follow a "party line." There are plenty of those thinly disguised groups in Washington, which determine the outcome before the game is played. CCAGW is not, and will never be, one of them.

There are good reasons why the National Service and the National Competitiveness Acts were not rated—they were not on CCAGW's agenda at the beginning of the 103rd Congress, and we don't ambush members without telling them in advance about rated votes. Regarding the House rule vote on congressional compliance, we didn't rate it because it would have only applied to the House for one session. The second vote would have permanently changed the law and was the real substantive vote.

I hope that REASON will not tilt at political windmills for pseudo-control of agendas, but rather work doubly hard to ensure that conservatives and anti-spending groups work together to assure a genuinely positive change in American politics to save our children and grandchildren from a crippling debt they can never hope to repay.

That is our agenda. Please do not let petty political control guide your thinking and evaluation. Too many depend on your reasoned independence.

J. Peter Grace
Citizens Against Government Waste
Washington, D.C.

Rick Henderson replies: Mr. Grace's credentials as an vocal opponent of excessive government spending and regulation are unassailable. Unfortunately, his impassioned defense of CCAGW's rating of the 103rd Congress still leaves some questions unanswered. For instance, the group's decision not to rate votes on the national-service program—one of the few specific, big-ticket initiatives Bill Clinton consistently promoted throughout his campaign—is curious, to say the least. And Mr. Grace made no attempt to justify CCAGW's decision to include unanimous or near-unanimous votes in its ratings scheme. As my story pointed out, unanimous votes say nothing about the behavior of individual legislators, unless the group conducting the ratings wants to boost everyone's score.

Mr. Grace says CCAGW decides which votes it will rate at the beginning of the session. The votes it actually rated suggest much more flexible criteria than that. It rated the Penny-Kasich spending-cuts package, an important measure, to be sure—but Penny-Kasich was crafted in the fall of 1993, 10 months into the session. Indeed, 24 of the 37 House votes rated were either on rules or on amendments to other bills, many of which were never dreamed of until long after the session began.

Mr. Grace says CCAGW takes great pride in being nonpartisan, which is indeed an attribute too few organizations in Washington value. But can CCAGW best fulfill its mission by not offending Democrats or by pointing out which members of Congress most effectively attack government waste?

Bell Ringing

Tom Hazlett's article ("Ding Dong," Jan.) about The Bell Curve was fair, given the fact that it was (as he stated) based on the article by Richard Herrnstein and Charles Murray in The New Republic. However, the issue of the relationship of race and intelligence is just one segment of The Bell Curve. (Indeed, I feel that the authors did themselves no good by writing that essay, which was focused primarily on race.)

The thrust of the book is much broader, and its message is of importance to people concerned about liberty. Essentially the authors argue that intelligence is more important in coping with life's problems than many of us have thought. Second, because the United States is a meritocracy, people are being sorted, more and more, by intelligence. That is, in recent decades, many bright people have gone to college (that wasn't always the case) and the brightest of the bright are going to elite colleges. There they marry other members of what Herrnstein and Murray call "the cognitive elite," and they enter professions in which they interact primarily with other members of the elite. As a result, over the past few decades, very smart people, more than ever before, have acquired power, affluence, and prestige.

The problem that Herrnstein and Murray warn against is that the people in this power elite then try to make life difficult for the average person and especially difficult for people whose cognitive ability is quite limited. For example, they institute zoning rules that make it hard to build homes and regulations that make it hard to start small businesses, and they create government intervention programs that discourage marriage.

As the less-advantaged classes find life more and more difficult and sink into counterproductive behavior, the power elite isolates itself more and more. As time goes on, this elite becomes "increasingly frightened of and hostile toward the recipients of the welfare state," say Herrnstein and Murray. "The current symbol of this phenomenon is the gated community, secure behind its wall and guardposts." The authors anticipate that the result will be "an expanded welfare state for the underclass that also keeps it out from underfoot." They call it the custodial state and describe it as a "high-tech and more lavish version of the Indian reservation."

This is a chilling vision of the future. It has little or nothing to do with race, and its message is something to which those of us who believe in freedom should pay substantial attention.

Jane S. Shaw
Political Economy Research Center
Bozeman, MT

Unlike many other reviewers of The Bell Curve, Tom Hazlett seems to admit that he has not read the book and is basing his comments on The New Republic article. That is truly unfortunate because Charles Murray, I believe, did himself a big disservice by publishing that piece. The New Republic article draws inordinate attention to the racial aspects of The Bell Curve and also introduces this peculiar idea of conservative multiculturalism.

On the other hand, some discussion of race was inevitable. The book addresses public policy on matters of social pathology and shows how those pathologies are correlated with intelligence. Because the policies are themselves so heavily "race-loaded," the diversion into race and ethnicity could not really be avoided.

Mr. Hazlett raises an interesting point about the ethnic aspects to the heritability of IQ by pointing out that the races themselves are not clearly identified and are subject to a huge amount of genetic dynamism. Interestingly, that has also been a response from some of my left-leaning friends and colleagues. Even Stephen Jay Gould has stated, quite correctly, that race is an anthropological abstraction. When The Bell Curve was first published, the response from the left was, among other things, that the book encourages group thinking. Now, I am hearing that there are really no groups at all. This is truly hilarious.

The left has created and been practicing identity politics (based on its own constituencies' preferred groupings) for quite a while. Now it chooses to attack The Bell Curve for group thinking and for the idea of "groups" altogether. If The Bell Curve has the effect of invalidating group think, it will have achieved an epic success. I am not, however, optimistic. The left's capacity for cognitive dissonance (i.e. hypocrisy) is unbounded. When it comes to sucking at the public trough—that is, using the political process to redistribute wealth and interfere with private parties' associational freedoms—the "group" will always be clearly visible and well defined.

David West
Encino, CA

Mr. Hazlett replies: It is curious that Charles Murray would publish a summary of his book in so visible an outlet, and not do justice to his own work. In excusing the summary and defending the book, neither Mr. West nor Ms. Shaw touches my basic criticism: The research developed in The Bell Curve has nothing interesting or hopeful to say about public policy.

Ms. Shaw's suggestion that this book teaches us that "intelligence is more important in coping with life's problems than we thought," reminds me that I have actually heard Dr. Murray tell reporters that one conclusion from his Bell Curve research is that our programs for unwed teenage mothers must be devised for people with relatively low IQs. What a marvelous breakthrough to find that the girls getting pregnant in junior and senior high school are not at the top of their class.

Still, I wonder: Does it take an IQ study to unveil the consumer-welfare hazards of zoning restrictions? This issue is more directly confronted by economic research on the advantages inflicted by the affluent on the less affluent. To traipse through the IQ debate is to take an analytical detour thousands of miles longer than the 10-minute ride to economic truth which the zoning laws require.

The debate cruises right through the racial IQ quagmire. Why go there? It must startle those who say that The Bell Curve involves only one chapter on racial IQs (including Dr. Murray) that this one modest little topic comes to dominate the debate—as laid out in Charles Murray's own summary in The New Republic. To abstract from this huge ugly issue is to ask, "Other than that, Mrs. Lincoln…."

The idea that the distribution of income is becoming more skewed due to cognitive differences has long been known and agreed to by analysts all across the political spectrum. Making it a matter of IQ differences, and linking this form of intelligence so strongly to genetic inheritance, is a dubious proposition which actually takes us backwards. It increases what individuals do not control and decreases what we expect people to achieve. More ominously, it steer us straight into the leftist folderol that sees group development as the proper way to view social science and social policy. Mr. West has good reason to be embarrassed about Murray's Bell Curve essay in The New Republic. Given Charles's previous work of such outstanding quality, it is a tragedy. But it is incorrect for Mr. West to dismiss the article as a marketing error. Give The Bell Curve's author credit for honestly putting forth what his IQ analysis means for public policy: an intellectual cul-de-sac of racial IQs and "conservative multiculturalism."

Arresting Question

In the December 1994 issue, Nick Gillespie claims that one-third of all boys in this country will be arrested before 18 ("Arrested Development"). That's pretty difficult to believe! Could you please provide some support for this statistic?

Michael Freed
Inglewood, CA

Mr. Gillespie replies: The one-third figure in fact applies to urban areas. "Somewhere between 30 to 40 percent of all boys growing up in urban areas in the United States will be arrested before their eighteenth birthday," writes Peter W. Greenwood in the recently published collection, Crime. The figure for all boys, according to a 1986 National Academy of Sciences study, is 27 percent.


In the April editorial, "Artistic Licenses," the author of a New Republic article supporting PBS was misindentified. The article was by Robert Wright.