- The Washington Times - Sunday, January 26, 2003

CATO HANDBOOK FOR108TH CONGRESS
By 41 Cato Fellows
Cato Institute, $25, 683 pages
REVIEWED BY WILLIAM H. PETERSON


Via 66 chapters written by 41 Cato think-tankers, here are sharp public policy thoughts on a broad spectrum of issues from tax reform to the federal budget to globalization to confronting terror to threats to civil liberties to the environment and to a lot more. Public policy recommendations are all in a libertarian-limited state mode, as may be surmised from the back-cover blurb of the Washington Post's soup-to-nuts agenda "to dramatically restrict the power of the federal government."
In fact, Edward H. Crane and David Boaz, respectively Cato's president and executive vice president, take pundits Francis "The End of History" Fukuyama and columnist George Will to task for prematurely proclaiming the "fall" of limited-government libertarianism in view of September 11. Mr. Crane and Mr. Boaz note that conventional wisdom seems to have forgotten the Ronald Reagan wisdom that government is the problem and not the solution. The two think-tank executives track opinion polls suggesting that overall public trust in government, so high in the post-September 11era, faded in 2002.
Cato's senior fellow in constitutional studies Robert A. Levy finds serious flaws in antitrust policy. He holds that antitrust law is inadvertently pro-monopoly, that it is mainly wielded by business rivals and their allies in the political arena, not by aggrieved consumers. Yet ironically it is the consumers who rule the dynamic marketplace, not the producers.
Mr. Levy cites Microsoft as a firm wrongfully branded a monopoly, and holds consumers can upend any product, any competitor. "Just ask WordPerfect or Lotus or IBM," he writes. He concludes that antitrust is bad law and bad economics, that Congress ought to chuck it and let competition and consumers take over.
Mr. Levy teams up with Cato fellow Gene Healy to strengthen the Second Amendment by restoring the right to bear arms. They applaud research by American Enterprise Institute scholar John R. Lott Jr. who finds the 31 states with concealed-carry handgun laws effectively deter crime. They quote Mr. Lott's finding that "the reductions in violent crime are greatest in the most crime prone, most urban areas. Women, the elderly and blacks gained by far the most from this ability to protect themselves.." And they hail the Airline Pilots Association for wanting armed pilots in the cockpits, as do Congress and the public. Airlines are opposed out of fear of trial lawyers.
Cato's foreign and defense policy recommendations are in the vein of Washington's 1796 farewell remarks to avoid "foreign entanglements" while enjoying free and open trade with all. So Cato would pass legislation requiring the withdrawal of all U.S. troops stationed in Europe by 2005. It would also end the international war on drugs and lift U.S. trade barriers to any and all goods of developing countries, including coca-producing countries like Colombia and Afghanistan.
Cato scholar Doug Bandow wants the United States to pull its military forces out of Saudi Arabia and sees its "oil weapon" as a myth. He endorses as shrewd defense policy drilling in the U.S. outer continental shelf and in those 15,000 acres with almost certain proven oil reserves in the 19.6 million acres of the Arctic National Wildlife Reserve. In like manner, he urges that we bring our troops home from South Korea and Japan and even reduce our "defense presence around Wake Island, Guam, and Hawaii" while still remaining "the globe's strongest military power."
Cato's Brink Lindsey reminds his readers that free trade is but a form of consumer sovereignty or nothing more than the reach of free markets across foreign boundaries. He sees the idea that exports are good and imports bad as the root of the mercantilist fallacy and protectionist thinking. He cites the U.S. International Trade Commission as naming the 10 most consumer-costly U.S. trade barriers as those on textiles and apparel, domestic maritime transport (Jones Act), sugar, dairy products, footwear, frozen fruits, fruit juices, and vegetables, ball and roller bearings, watches, clocks, watch cases and parts, table and kitchenware, and costume jewelry.
Similarly, Cato stands foursquare for international tax competition. Cato scholar Veronique de Rugy argues that just as individual citizens are free to choose where to live, work, invest, and shop, taking into account various state and local tax climates, so businesses should have the same rights to respond to differences in capital taxes by reallocating mobile capital income to lower-tax countries.
Ms. de Rugy names the European Union and the Organization for Economic Cooperation at the forefront of global efforts to stifle tax havens such as Bermuda and the Cayman Islands. She sees a big part of the problem as the excessively high and obtuse U.S. corporate and capital tax rates. As she quotes then Treasury Secretary Paul O'Neill: "If the IRS code disadvantages U.S. companies competing in the global markets, then we should address the anti-competitive provisions in the Code."
Hear, hear.

William H. Peterson is a contributing editor to Foundation for Economic Education's "Ideas on Liberty" and an adjunct scholar at the Heritage Foundation.



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