Freedom Line Blog

In an excellent commentary in today’s Wall Street Journal, AEI visiting fellow and Entropy Economics LLC president Bret Swanson debunks “the two central contentions of ‘net neutrality’ fans, including President Obama, who want the Federal Communications Commission to regulate the Internet as a public utility.”  Specifically, the myths of “lagging U.S. broadband and the specter of content blocking.”

Swanson proceeds to demonstrate that neither of those rationalizations for net neutrality or regulation of Internet service under laws enacted in the 1930s is true:

…the U.S. generates far more traffic per capita and per Internet user than any other major nation save South Korea, which is a vertical metropolis and thus easy to wire with fiber optics.  U.S. traffic per capita is 2.1 times that of Japan and 2.7 that of Western Europe.  Several years ago, U.S. and Canadian traffic measures were similar, but today the U.S. has raced ahead by 25%.  The U.S. lead is similar in traffic per Internet user, which tends to reflect how intensely people use broadband and mobile connections.  The U.S. outdoes its closest European rival, the U.K. by 57%.  The U.S. outdoes all of Western Europe – the best comparison in terms of geography, population and economic development – by a factor of 2.5.”

He also rebuts the claim that U.S. broadband is comparatively slow or more expensive, and concludes that there’s no “problem” demanding an Obama Administration “fix”:

The U.S., with 4% of the world’s population, has 10% of its Internet users, 25% of its broadband investment and 32% of its consumer Internet traffic.  The U.S. policy of Internet freedom has worked.  Why does Washington want to intervene in a thriving market?”

It’s a good question, and an excellent piece.

Standard and Poor’s spooked markets and sent news rooms scrambling today with its decision to downgrade the long-term outlook for the U.S.’s credit rating to “negative” from “stable.”  In a statement released this morning, the ratings agency wrote:

Because the U.S. has, relative to its ‘AAA’ peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.

We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns.

The White House swiftly responded, calling the decision a “political judgment” with which it disagrees. 

Really?  The national debt is more than $14 trillion and climbing.  The federal government borrows more than 40 cents for every dollar it spends.  Entitlement spending is spiraling out of control.  And last week, the federal government was within minutes of shutting down because President Obama and Congressional leaders were haggling over what ended up being a paltry few hundred million dollars in spending cuts from this year’s projected $1.65 trillion deficit. 

While the credit outlook downgrade is being reported as a surprise, it shouldn’t surprise anyone. All S&P has done is acknowledge the obvious.  Let’s hope President Obama and Congressional leaders get serious about doing the same.

When every opposition group voted down his austerity budget earlier this week, Portugal’s prime minister resigned.  Now, the European Union is preparing to bail out a third member nation in just over a year.  (The other two are Greece and Ireland.)

While the Portuguese mess probably won’t have an immediate fiscal impact on the United States, the EU’s crisis of federalism could soon be felt over here.

States like Illinois and California are teetering on the edge of insolvency after spending like a bunch of reckless European countries.  Because of the EU’s shared currency and the effects a default would have on the rest of the federation, the EU feels pressed into covering the costs of some members’ excess.

The same thinking seems likely to migrate across the Atlantic.  Members of Congress are mulling options like bankruptcy for failing state governments, though that risks undermining state sovereignty.  Also, bailouts run the risk of prolonging hard decisions, as well as deepening the dependency of states on the feds.

There are no easy answers, but there are some necessary decisions.  Time will tell if those in Sacramento and Springfield can come to better resolutions that the parliament in Lisbon.

This week, the Battelle Memorial Institute reported that China will surpass Japan in 2011 as the second-largest spender on research and development, spending $154 billion to Japan’s $144 billion.  An interesting milestone, perhaps, but that should be kept in its proper perspective.  Specifically, that the United States still spends well over twice as much on R&D – over $405 billion in 2011.  That’s significantly more than China and Japan combined.

This isn’t merely esoteric or trivial.  To the contrary, it’s important to keep in mind at a time when naysayers here and around the globe question America’s continuing leadership role, and threaten to undermine American preeminence via regulations such as “Net Neutrality” and other big-government “solutions” in search of imaginary problems.

If a carload of Crip gang members shot up a Los Angeles Police Department bus killing 46 officers, every gang member involved would be convicted of murder and given the death penalty.  They wouldn’t be fined and given a stern warning.

So, why can’t that law enforcement approach be applied to rogue governments like North Korea who was identified as sinking a South Korean warship, an act that killed 46 South Korean sailors?  After all, “cop killers” are singled out for particularly harsh penalties precisely because they target the guardians of law, order, peace, and safety.  How can the mass murder of 46 military personnel aboard a sovereign nation’s vessel be any less of an attack on a nation’s security?

Sadly, that isn’t the tenor coming from South Korean officials and their allies.  They sound like they’re more interested in meaningless United Nations resolutions and economic sanctions.

The South’s president is vowing to “take strong resolute countermeasures against North Korea and make it admit its wrongdoing through strong international cooperation.”  Such cooperation includes calling the North’s attack “inexcusable” (Japan) and an “act of aggression” (USA), which are only slightly bolder than China’s declaration that the event is “unfortunate.”

The truly unfortunate reality is that we live in a world where terrorist groups and governments slaughter innocents under the guise of fictitious provocations, while so-called civilized societies let those who volunteer to defend their safety suffer the consequences of enlightened restraint.

The Christian Science Monitor reports that the Organization of the Islamic Council (OIC) is pushing members of the United Nations Human Rights Council (UNHRC) to approve of a proposed treaty to limit religiously offensive language or speech. Since the United States is now a member of the UNHRC, the proposal offers President Barack Obama yet another chance to see if engagement will lead to better results than confrontation.

The United States under Barack Obama recently joined the UNHRC, maligned for years as the mouthpiece for countries that are themselves flagrant human rights abusers. A “new” council formed in 2006. President Obama’s hope is that as an engaged member, the US can further reform – and its own interests. This case will test his theory.

Consider the wording put forth by Pakistan, written on behalf of the OIC. It proposes “legal prohibition of publication of material that negatively stereotypes, insults or uses offensive language” on matters regarded by religious followers as “sacred or inherent to their dignity as human beings.”

This gives broad latitude to governments to decide what’s offensive. Countries such as Pakistan already have national blasphemy laws, but a global treaty would give them international cover to suppress minority religious groups with the excuse that these groups offend mainstream beliefs.”