Archive for June, 2010

All indications are that the Democrats are going to take a beating in November.   So, in a few short months, we should make a return to one of my favorite policy-making environments: Gridlock!  This will frustrate many, but it will make me so happy.

What economic decision makers (I’m talking about people who make things and hire people, not the pointy-heads in DC who don’t actually produce anything but hot air) need in tough times, more than anything else, is stability.  A Democratic President and a divided (probably Republican) Congress is a strong prescription for nothing happening that decision makers can depend on.  Yayyyy!

I’m looking forward to returning to the era of the most successful Republican president since, well, probably ever.  That would be Bill Clinton, of course.  The signature policy successes of the Clinton Era were 1. NAFTA; 2. Balancing the Budget; 3. Welfare reform.   Name a Republican president who has done better at instituting Republican economic policies.  No one beats Bill Clinton.  If you look at long-term graphs of government expenditures and revenues, the “Reagan Revolution” is mostly a fantasy (sorry, no more graphs today).  Clintonian triangulation actually got us somewhere in key areas.  Because of gridlock, he wasn’t able pursue the leftist policies his wife wanted him to.

So, the Obamanistas were right after all.  We now have hope I can believe in.

[Please note that I'm referring to economic policy defined rather narrowly.  Democratic presidents, including Obama, remain a huge threat to the Constitution.]


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Regulation Redux

Financial reform continues to make its way through the legislative sausage maker as conferees desperately seek to meet the administration’s July 4th deadline. As noted in earlier postings, the body created by Congress to investigate the causes of the crisis as a means of informing the legislative process continues to hold hearings in hopes of reporting to Congress in December…some five months from now. If one believed that major regulatory change should be informed by reasoned analysis, this disjunction might prove to be a source of concern.


  • The conference committee was reconvened to kill the $20 billion tax on big banks, tapping TARP instead. Passage remains in doubt.
  • WaPo editorial decries a little noticed provision in the financial reform legislation: “the permanent increase in the size of bank accounts eligible for federal deposit insurance from $100,000 to $250,000–retroactive to Jan. 1, 2008. It’s a bailout for a relative handful of well-off customers that may also increase risks in the U.S. banking system.” In some 2,000 pages, one can only wonder how many more surprises are awaiting discovery (assuming anyone bothers to read the 2,000 pages).
  • David Weidner (Market Watch) provides useful discussion of 10 missteps of financial reform (the list could be extended, as he well admits).
  • The Left is getting restless and may not prove willing to support the legislation in its current form, as Miles Mogulescu suggests at the Huffington Post.

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Good monetary policy.  Bad monetary policy.  Good presidents.  Bad presidents.  Good regulations.  Bad regulations.  Special interests.  Corruption. Malfeasance.  Ineptitude.  War.

The graph shows a history of US business cylces since 1929 (but missing the slight uptick that will occur for 2010).  Really.  They are there.  Look real hard.  You can see ‘em.


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This is the first installment in a series on the tensions within both libertarian thought and the libertarian movement.  Today I will focus on abortion – though, as I will explain below, this might seem an odd choice of topics for this series if you spend a lot of time around many movement libertarians.


Listening to or reading the works of many movement libertarians, you would think that there was an unambiguous libertarian position on abortion.  Namely, that libertarians are by definition pro-choice.  Indeed, I have been told repeatedly by such libertarians that “we”  have to be against laws restricting the ability of women to seek an abortion.  More frequently, this position is just assumed during any conversation that touches the subject.

Thus it was with no surprise that I read Michael Moynihan, on Reason magazine’s website, recently stating unequivocally:  “I have very libertarian views on abortion”  (I’m not picking on Moynihan, he just provided the umpteenth example of such talk by movement libertarians).*  As it is clear here, Moynihan and others who say such things believe that there is a libertarian stance on the subject – on par with the libertarian view on, say, forced enslavement or income tax withholding (just joking about that last one — and btw, thanks Uncle Miltie for that “innovation”!).   

This represents either a serious misunderstanding of libertarianism or an overly broad conception of it that goes beyond politics.  Libertarianism – in the “statist” way I define it - is not opposed to any law restricting what an individual can do.  Properly understood, it is a thin political theory that sanctions only those laws that relate to the fundamental protection of an individual’s property rights, broadly understood (either because individuals have natural rights or because of a rule-utilitarian position that generates such rights). 

Therefore, in the area of abortion, all hangs on the definition of when life begins, whether an unborn child/fetus has rights or when it gains them, and therefore when a life warrants protection by the state.  As a limited theory of politics, libertarianism cannot answer these questions and thus really has little to say on its own about whether abortion should be legal or illegal.  We as individual libertarians can only answer these questions by importing exogenous ethical or scientific theories.   

Therefore, libertarianism is properly ecumenical on abortion.  While this is admittedly too black and white, one could argue that if you think life exists/rights inhere at conception, as a libertarian you should favor at least some level of government protecting the rights of the unborn.  If you think life exists/rights inhere at birth, as a libertarian you should be opposed to laws restricting acccess to abortion.  But both arguments are good libertarian arguments once you import your understanding of when an individual life begins/gains rights.  And thus we should not be surprised that there are libertarians on both sides of the issue.  So while the Reason crowd seems to be more pro-choice, Ron Paul is pro-life and there is a group called Libertarians for Life.  However, pro-lifers are underrepresented among movement libertarians in my experience.

So please stop saying that there is a libertarian position on abortion – whether you are pro-life or pro-choice, pro-abortion or anti-choice, or anything else for that matter.   

*  And you’ll see by the comments on Moynihan’s post that non-movement libertarians frequently disagree.

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“Let A Thousand Nations Bloom” is a blog loosely associated with the Seasteading Institute (well, at least, Patri Friedman is a contributor). This week, in the runup to Independence Day (which we all know is a superior term to “Fourth of July,” right?), they are blogging about secession. Each day has a different theme, and today’s is the optimal size of nations. There’s actually a substantial economics literature from the late 1990s and early 2000s on this question, but Brad Taylor questions whether there really is such a thing as an optimal nation size, arguing that different public goods are best provided at different scales and scopes.

At any rate, check it out – and I am planning to add some of my reactions ere long.

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Recovery Summer

The Recovery Summer is well underway.

  • Vice President Biden sought to rally the troops in the Milwaukee stop of his Recovery Summer tour by noting: “there’s no possibility to restore 8 million jobs lost in the Great Recession.”
  • Today, a  sharp drop in the Conference Board’s Consumer Confidence Index have sent markets into a triple-digit loss.
  • Paul Krugman (New York Times) opines “We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression [following the Panic of 1873] than the much more severe Great Depression.”
  • The National Journal reports that in public opinion, “the cement is hardening.” Based on its Congressional Connection poll, “the sputtering economy, the unchecked oil spill in the Gulf of Mexico, two wars and a rough-and-tumble campaign season continue to take a toll on the public’s confidence in the government.”


  • As Congress pushes forward with the most significant financial reforms since the Great Depression, Dan Alamariu at Foreign Policy predicts “The reforms currently debated in Congress represent only the opening salvo of a larger reform process that will take years to complete and whose outcome will be both unexpected and more stringent on financials than the currently debated legislation.”
  • The White House continues to push ahead with discussions on climate change policy with a meeting scheduled for today. The Hill reports: “Tuesday’s meeting with Obama may lay the groundwork for Reid to craft a legislative strategy for trying to get 60 votes this year on an energy and climate plan.”

Although Krugman draws analogies between 2010 and 1933, things feel a bit more like 1937.

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I hope not.  Here’s one writer’s negative reply.  I hope he’s right.

Update: Dan McCarthy is less positive about the future of the book.

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I probably shouldn’t be surprised, but I still am. The New York Times unsigned editorial opposing the Supreme Court decision overturning the Chicago gun ban is one of the most poorly reasoned editorials I’ve ever read. Two excerpts:

Once again, the court’s conservative majority imposed its selective reading of American history, citing the country’s violent separation from Britain and the battles over slavery as proof that the authors of the Constitution and its later amendments considered gun ownership a fundamental right. The court’s members ignored the present-day reality of Chicago, where 258 public school students were shot last school year — 32 fatally.

Mayors and state lawmakers will have to use all of that room and keep adopting the most restrictive possible gun laws — to protect the lives of Americans and aid the work of law enforcement officials. [emphasis added]

Really? Are liberals still arguing that because the U.S. has a lot of gun violence, gun bans work? How about one shred of peer-reviewed social science showing that any of the myriad state and local regulations of firearms have actually had a robust negative influence on violent crime rates? Is the NYT stuck in a 1994 time warp?

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One hears periodically that our culture, the Western or American culture, is “exhausted.” This is alleged to be an indicator that it is on its way out. Symptoms of cultural exhaustion disease include the inability or unwillingness (or both) of the culture’s members to defend it, to take pride in it, or even bother to understand it; the tendency to make excuses for it or to feel embarrassed for it; and the tendency to focus on its shortcomings, even to experience Schadenfreude when it suffers a comeuppance.

A lot of that has been going on for some time with respect to Western culture and American culture. Jacques Barzun, for example, argued a few years ago that our culture has completed its cycle “from dawn to decadence.” That might be one factor explaining the “culture wars” that pit the defenders of the culture against its perceived enemies—some of which are active, but most of which are merely passive and apathetic. It is also part of the Marc Steyn-esque narrative that has the West finally succumbing, from lethargy and ennervation if not exhaustion, to more robust cultures like Islam.

But there is another phenomenon that is related but distinct: cultural confusion. Cultural confusion results from a growing lack of consensus about what is proper or appropriate in given circumstances. If people get the idea that there are no society-wide or community-wide standards of behavior and comportment that one really ought to follow, not because one might otherwise be punished but because it is simply the right thing to do, cultural confusion can result: There seems to be no answer to many of life’s daily questions of manners, etiquette, and propriety. People might come to conclude that more or less anything goes in the service of people’s individual preferences—as a former professor of mine put it, “you should do whatever you can get away with.” Although this kind of freedom may gratify and serve the individual in the moment, it threatens social order in the long run.

Let me give an example. I recently attended the commencement of my son from middle school. It was held in the school gymnasium; the principal, the superintendant, and lots of family and friends were there. The students were there too, of course, all in their gowns, and the entire ceremony was videotaped for posterity. One striking feature was the attire of the people who attended. For the adult men, the range went from some wearing suits and ties to others wearing shorts, t-shirts, and flip-flops—and everything in between.

My own preference runs rather more toward the former end of the spectrum, on the view that important and formal occasions require formal dress. But put my, and your, preference aside for the moment, and consider that the sheer size of the range of acceptability means, in effect, that there is no consensus, no joint or shared culture, bringing people into community on this issue. We were all there for the same general purpose, but our widely disparate views about what was appropriate indicates, I think, a kind of cultural confusion.

A second example. Consider people’s complete uncertainty about what children should call adults. Everyone from my college-aged students to high school students to middle-school students: they have no idea whether they should call me by my first name, by “Mr. —,” by “Dr. —,” or by “Professor —.” This confusion besets the adults as well. I have been introduced by parents to their children by my first name and by various honorifics. Often parents and young people feel a latent sense of guilt at their uncertainty—as if they somehow think they should know what to do in this case, and maybe they think they the more formal is appropriate, but it’s uncomfortable and they lack the confidence to assert themselves. The result is often that they call me nothing. They say simply “hey” when they see me, or they do not address me at all.

Perhaps these are trifling examples, but they may be indicative of a more pervasive uncertainty and diffidence in what our culture is and in what we are. Principles of propriety are the scaffolding that give the edifice of society its shape and its strength. Because they are given and because people can rely on them, it gives people a feeling of social unity and a calming confidence that they are part of a sympathetic group.

Adam Smith and Edmund Burke articulated the importance of consensus about these “trifling” matters. In many ways it is not the big moral issues that matter to common life. Abortion, euthanasia, and the death penalty may occupy our attention in philosophy class, but the daily graces of life are what we experience, and when we meet with harmony, concord, and sympathy about these graces, it enables both community and a comforting assurance of some solidity in an otherwise turbulent world. When, by contrast, we meet with every reaction under the sun, with little hope or expectation of agreement, then we have cultural confusion and the low-level but real anxiety, and thus detachment, this can cause.

There is no policy recommendation that follows from this. If I am right, the joy of shared community and the pleasure of mutual sympathy of sentiments (to coin a phrase) that make life so much more humane and pleasant, can come only from concerted widespread individual action. No top-down policy can succeed. But there might be a hypothetical imperative here: If you care about contributing to and maintaining a mutually sustaining and vivifying community, then be confident in its culture. You have little lose, but potentially a great deal to gain. Everyone else stands to gain too.

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I just returned from the seventh annual Porcupine Freedom Festival in Lancaster, N.H. (see the Daily Caller profile here). PorcFest is the annual summer event of the Free State Project (the New Hampshire Liberty Forum is the FSP’s winter event). Unlike the Liberty Forum, the emphasis at PorcFest is on community building and socializing rather than speakers and formal discussions, but there are a few speakers every year. This year, Gary Johnson, former governor of New Mexico and founder of the Our America Initiative, was the concluding speaker. For the anti-political anarchists, there were also speakers like podcaster-author Stefan Molyneux and tax rebel Larken Rose. Radio host Ernie Hancock, who invented the “Ron Paul Revolution” logo, was also there.

PorcFest 2010 ComicThere’s a good bit of speculation around Gary Johnson as the possible “Ron Paul of 2012.” A libertarian-leaning Republican, Johnson vetoed 750 bills as governor (not counting line-item vetoes), never raised taxes, favors withdrawing from Iraq and Afghanistan, and advocates the legalization of marijuana. Unfortunately, his name recognition in the general population is very low, and he hasn’t cultivated as many constituencies as Paul, such as the John Birch Society. However, he does not suffer from some of the drawbacks that Paul did, such as the quirky advocacy of the gold standard and the “blowback” theory of 9/11 that gave him such trouble in the debates. (For what it’s worth, I agree with both Paul’s position that the government should withdraw more or less entirely from currency and banking markets and the argument that U.S. foreign policy was one of the causes of bin Laden’s attacks on the U.S.) As a speaker, Johnson might not be considered “dynamic,” but he is more direct and to-the-point than Paul, who tends to wax philosophical (not that there’s anything wrong with that). His personality is easy-going and straightforward, unlike most politicians I’ve met, who as a class lean rather toward “blowhard.”

I also spoke with a reporter from The New Republic, who asked me mostly about Johnson’s fanbase in the libertarian campoutgroup and chances in New Hampshire should he decide to run in 2012. If Johnson were to run, I think he would enjoy near-unanimous support among Free Staters who engage the political process, just as Paul did. Now, Paul has been around a lot longer, and it’s difficult to imagine that Johnson would enjoy quite the sheer enthusiasm and cult following that Paul did – but with Ron Paul’s blessing and full-throated support, he should be able to do just as well in raising money. If, as I suspect, he also does better among mainstream Republicans, he could do pretty well in terms of vote share. He has two terms of executive experience, unlike Paul and many other potential candidates for the nomination, and the party should be in a relatively libertarian mood by then. Tea Party types are politically homeless right now; while they tend to support either Sarah Palin or Ron Paul, there’s also a consensus among conservatives that neither of these would be an effective candidate in the general election. Johnson could expect to receive vociferous attacks from neoconservatives and hawks in general, but my sense is that their standing in the Republican base has declined. By 2012, Afghanistan and Iraq will be firmly Obama’s wars, and if both wars are still ongoing then (a fairly good bet), then many more libertarians who initially supported Afghanistan (like myself), will turn quite a bit more skeptical.

Turning to the title of this post, I’ll mention a few things about the state of play in New Hampshire. By reports that I’ve gotten, 27 or 2821-28 Free Staters are running for state office this year, including the four who won last time. (By “Free Staters” I’m referring purely to people who have moved to New Hampshire from elsewhere; there are many more local allies in and seeking office.) Most of them are running as Republicans, but several as Democrats. The feeling among most political observers is that Republicans are favored to take back both houses of the legislature. The conservative Democratic governor, John Lynch, is also looking vulnerable for the first time since his election in 2004. Republican candidate Jack Kimball (one of several) gave a short speech at PorcFest; he seems to be a down-the-line conservative, but the issues he emphasized were 10th Amendment state sovereignty and strong support for the 2nd Amendment. Lynch has also been primaried by a very strongly liberal representative, Tim Robertson (several people of sober mind have characterized Robertson as “virtually a communist”), who is upset at Lynch’s veto of medical marijuana. Robertson has no chance in the primary, but his candidacy points up the cracks in the NH Dems’ base.

One interesting story cropped up on the newswires this past week that relates in more ways than one to the FSP. A husband and wife who are Houston Libertarian Party activists were harassed by police, in part because of a pill that dropped onto the seat (a prescription medication). In most states, you can be prosecuted for having any prescription medicine outside its original container unless a registered physician or nurse put it there (including those pill boxes!), and in some states it’s a felony. The linked story reports that the victims are considering moving to New Hampshire as part of the Free State Project. It turns out that this plan of theirs would make sense for more reasons than one. Representative Joel Winters, who moved from Florida, authored a bill that removed such penalties in New Hampshire, and it was passed by the legislature and signed into law. Just one example among many of policy changes that have happened in New Hampshire due to the work of Free Staters…


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For a Realist in international relations (folks who stress structural variables like relative power as the most important causes of outcomes in the international system), Stephen Walt spends a lot of time worrying about how the rest of the world views the United States.  Here is his most recent example: 

I was disappointed when the United States got eliminated in the soccer World Cup, but also relieved. Having the world’s most powerful country eliminate the last team from the host continent would not have endeared the United States to anyone.

The tendency of Realists to get all concerned about the U.S.’s standing abroad has diminished significantly since Bush left the White House.  But it is perplexing why they cared all that much in the first place given their general view of what makes the world go around (which suggests it was actually caused by partisanship/Bush-hatred rather than flowing from a serious, integrated, and theoretically-grounded position).

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The memorials for Byrd are proliferating. My favorite—and in my estimate—the only one worth reading, comes from  Andrew Sullivan, who simply notes:

Speak no ill of the dead? Well, let me simply say that the racist, populist, larcenous bigot of a Senator – a man who robbed the American tax-payer to pave his state with baubles and bribes – is not going to be much mourned in these parts.

Nicely stated!

While Mr. Sullivan is both succinct and accurate, the  “Conscience of the Senate” is nonetheless being mourned, one suspects, because of his opposition to the Bush administration.

Witness the DailyKos:

With a career that spanned more than half a century, there is much to be said about Byrd’s actions and accomplishments—both good and bad—but  what many most appreciate about him was his fierce opposition to the war in Iraq

Yes…I recall some “bad” in there somewhere. What might it have been?

As one might expect, other memorials begin with Byrd’s youthful indiscretions (ah yes, when he rose to be a recruiter in the WV KKK…an “Exalted Cyclops”) but then quickly make the case for redemption.

Paul Begala at the Daily Beast not only dismisses the early indiscretions but finds an opportunity to take a shot at Reagan:

Yes, there was the one-year flirtation with the Ku Klux Klan in the 1940’s—a stain that marked him for life—and his opposition to the Civil Rights Act of 1964. Critics on the right properly excoriate him for those historic mistakes. But they ignore Ronald Reagan’s youthful support of one-world government and the Gipper’s strong opposition to the Civil Rights Act, the Voting Rights Act and the Fair Housing Act, too.

Just checking, but I don’t remember the Gipper as framing his opposition with terms like “race mongrels” and referring (post-youthful indiscretion) to African Americans as being “a throwback to the blackest specimen from the wilds.”

In the end, I fear I should have ended with the quote from Andrew Sullivan. What more can be said?

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One of my guns - Smith and Wesson M&P 9mm


I’m not a constitutional lawyer, but today’s Supreme Court decision in McDonald v. Chicago sounds like a big deal in the history of jurisprudence.  In short, it incorporates the 2nd Amendment via the 14th Amendment so that it applies to the states.  Without having had a chance to read all the way through the case, this should be a big victory for gun-rights advocates.  My worry, though, is that the Court has allowed some wiggle room for states and localities to operate against what the decision affirms: individuals have “a right to keep and bear arms for self-defense.” 

Update: A very measured take from the libgressive Lawyers, Guns, & Money blog.  And I think this is the most interesting part of the post: “another data point for the [sic] my belief that whatever the conventional wisdom Thomas is a more principled and substantively interesting justice than Scalia.” 

Update II: Damon Root at Reason on Thomas and the privileges or immunities aspect of the decision.

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The Soul of the Senate

"Sen. Byrd has set a new standard for taxpayer-funded narcissism by convincing the West Virginia Legislature to erect a statue of himself in the state Capitol. The statue's completion violates state law prohibiting statues of government officials until they have been dead for half a century." Citizens Against Government Waste

The nation has lost a great statesman and parliamentarian. Senator Byrd was the  longest-serving Senator in US history.   No one knows where Robert Byrd first discovered his leadership skills (likely it was during the halcyon days of old when he rose in the ranks to serve as Exalted Cyclops in the Ku Klux Klan). Of course, it would be unfair to tar and feather the “Soul of the Senate” based on his youthful indiscretions in the KKK.  As he clearly noted in his autobiography (Robert Byrd: Child of the Appalachian Coalfields), he renounced the KKK at the tender age of 25. As Michael Grunwald notes in a review of Byrd’s autobiography, he fails to account for subsequent statements on things like the desegregated military (e.g., correspondence where he declared that he would never fight “with a Negro by my side. Rather I should die a thousand times, and see Old Glory trampled in the dirt never to rise again, than to see this beloved land of ours become degraded by race mongrels”). Ah yes…a man of principles.

If Robert C. Byrd stood for any principle, it was the principle of pork (as the Soul of the Senate once stated so eloquently: “you might as well slap my wife as take away my highway money”).  Citizens Against Government Waste has some interesting statistics on Byrd’s achievements (e.g., between 1991 and 2008, Senator Byrd delivered $3.3 billion in pork to West Virginia).  Fortunately, we do not have to worry about finding a suitable memorial for Senator Byrd. We can simply visit those he created for himself. An incomplete list (thanks to Citizens Against Public Waste) includes:

  • Robert C. Byrd Locks and Damn
  • Robert C. Byrd  Green Bank Telescope
  • Robert C. Byrd Drive, from Beckley to Sophia (Byrd’s hometown)
  • Robert C. Byrd National Technology Transfer Center at Wheeling Jesuit University
  • Robert C. Byrd Highway
  • Robert C. Byrd Federal Correctional Institution
  • Robert C. Byrd High School
  • Robert C. Byrd Freeway
  • Robert C. Byrd Center for Hospitality and Tourism
  • Robert C. Byrd Science Center
  • Robert C. Byrd Health Sciences Center of West Virginia
  • Robert C. Byrd Cancer Research Center
  • Robert C. Byrd Technology Center at Alderson-Broaddus College
  • Robert C. Byrd Hardwood Technologies Center, near Princeton
  • Robert C. Byrd Bridge between Huntington and Chesapeake, Ohio
  • Robert C. Byrd addition to the lodge at Oglebay Park, Wheeling
  • Robert C. Byrd Community Center, Pine Grove
  • Robert C. Byrd Honors Scholarships
  • Robert C. Byrd Expressway, U.S. 52 near Weirton
  • Robert C. Byrd Institute in Charleston
  • Robert C. Byrd Institute for Advanced Flexible Manufacturing
  • Robert C. Byrd Visitor Center at Harpers Ferry National Historic Park
  • Robert C. Byrd Federal Courthouse
  • Robert C. Byrd Academic and Technology Center
  • Robert C. Byrd United Technical Center
  • Robert C. Byrd Federal Building (there are two)
  • Robert C. Byrd Hilltop Office Complex
  • Robert C. Byrd Library and Robert C. Byrd Learning Resource Center
  • Robert C. Byrd Rural Health Center
  • Robert C. Byrd Clinical Addition to the veteran’s hospital in Huntington
  • Robert C. Byrd Industrial Park, Hardy County
  • Robert C. Byrd Scholastic Recognition Award
  • Robert C. Byrd Community Center in the naval station, Sugar Grove
  • Robert C. Byrd Clinic at the West Virginia School of Osteopathic Medicine
  • Robert C. Byrd Biotechnology Science Center at Marshall University

R.I.P., Senator Robert Carlyle Byrd (November 20, 1917 – June 28, 2010)

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Garet Garrett in The People’s Pottage (1953):

In a revolutionary situation mistakes and failures are not what they seem. They are scaffolding. Error is not repealed. It is compounded by a longer law, by more decrees and regulations, by further extensions of the administrative hand. As deLawd said in The Green Pastures, that when you have passed a miracle you have to pass another one to take care of it, so it was with the New Deal. Every miracle it passed, whether it went right or wrong, had one result. Executive power over the social and economic life of the nation was increased.

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It was nice to see Tony Woodlief (over at McArdle’s blog) take on the cult of happiness.  Happiness is surely a good, but it makes me unhappy to see people seemingly exalt it above all else – and this appears to be an especially strong current in a certain type of libertarian.

This gives me a chance to advertise my coming Pileus series on tensions within libertarianism and the libertarian movement.

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… because the U.S. soccer team lost to Ghana 2-1 in extra time.  

I spent the day thinking about monetary policy, so I missed what was surely a splendid match.   

Given it would have been fun to see the U.S. win the World Cup and have the Europeans collectively check into a mental ward in response, I’m sorry to hear the U.S. team is out.  But not real sorry, as U.S. losses in such events help prevent soccer from cutting into the focus on baseball in the zero-sum world of sports programming and indirectly help keep our best young athletes from choosing to play soccer instead of sports I like to watch.

In more important news to Red Sox Nation, Dustin Pedroia broke a bone in his foot and is out for 6-8 weeks.

Update: Mock soccer, soccer-gods retaliate: Clay Buchholz injured too!

Update II: Now Victor Martinez is injured!  Fortuna is not smiling on the Red Sox this week!  And yet they are still in the race.

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Many libertarians voted for Obama - or had a pair-wise preference for him – in order to prevent (or express disdain for) a McCain presidency and all that might mean (for example, the neoconservative agenda – especially in foreign policy).  They also hoped that some time in the wilderness would be good for the Republican party and serve as appropriate punishment for its big government conservatism turn (This hope has been somewhat borne-out).  In terms of the latter, Alex Tabarrok argued:

Lack of power is no guarantee of virtue but Republicans are a far better – more libertarian – party out-of-power than they are in power. When in the wilderness, Republicans turn naturally to a critique of power and they ratchet up libertarian rhetoric about free trade, free enterprise, abuse of government power and even the defense of civil liberties.  We can hope that new leaders will arise in this libertarian milieu.   

But given what has occurred over the last year and a half, is McCain starting to look a lot better every day?  Or is the country still going to be better off in the long-term despite electing Obama (given we avoided McCain and Obama’s leftist governance could lead to a resurgence of a more libertarian Republican Party)? 

Of course, individual voting is strategically irrational, so don’t feel guilty if you regret voting for Obama. 

But if you could go back in time and be the marginal voter between Obama and McCain (as if this could ever happen in a large-scale election, let alone one in a system in which anything near a close decision would be litigated), what would you do?

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This today from the WSJ:

Federal Deposit Insurance Corp. Chairman Sheila Bair said bank regulators would have the tools they need to banish “too big to fail” institutions from the financial landscape once a Wall Street overhaul bill becomes law.

…Ms. Bair said that new powers allowing regulators to seize and liquidate failing institutions would act like a threat hovering over the financial industry, deterring firms from growing too large or reckless.

This is a kind of a nuclear bomb that you hope you never have to use,” Ms. Bair said. “The fact that it’s there, I think, is going to be important. And if we have to use it, we will.”

So I now have this mental image of a nuclear bomb “hovering” over Wall Street waiting for some bureaucrat to hit the ignition.  Like we don’t have enough to be worried about with this bill already!


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Damian Paletta (WSJ) has a summary of the conference committee’s final agreement on the new financial regulations.

There is nothing all that surprising here: expansion of regulation (with a few politically expedient exemptions and some revenue sweeteners).

Rep. Jeb Hensarling (R., Texas) is quoted in the above story as saying: “My guess is there are three unintended consequences on every page of this bill.”  My guess is that the good congressman is understating things. But even if he isn’t, at almost 2,000 pages—pages that, if experience proves true, have never been read—that is a lot of unintended consequences.

Let us recall that in May 2009, Congress passed legislation to create a  Financial Crisis Inquiry Commission “to examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The commission was given broad investigative powers and is still holding hearings (indeed, it is scheduled to hold hearings next week on the role of derivatives in the financial crisis, where it will question witnesses from American International Group, Inc., Goldman Sachs Group, Inc., the U.S. Commodity Futures Trading Commission, the Office of Thrift Supervision, and the New York State Insurance Department).

Congress directed the commission to submit its report and specific findings on December 15, 2010. Presumably, this report could prove useful in making sense of the financial crisis and designing a new regulatory architecture. That is, it could prove useful if one believed that Congress and the administration were intent on good policy rather than good politics. But as is so often the case, politically established timetables trump careful deliberation.

Senator Dodd is quoted in the above story as saying: “This is about as important as it gets, because it deals with every single aspect of our lives.” Indeed, one measure of its importance is that Congress decided to act before it had allowed the experts it appointed to do the heavy intellectual work to complete their mission.

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General McChrystal

My quick reactions (written yesterday but held for various reasons) to the news that COMISAF has been relieved:

1.  Although it is sad to see a warrior like General McChrystal end his career this way, the silver lining is that President Obama’s move strongly buttresses civilian dominance in civil-military relations.  This is appropriate for a liberal republic in which the military is the clear agent that must be subservient to civilian control and show due deference and respect to its principals/principles.

2.  Replacing General McChrystal with General Petraeus is smart strategically and smart politically.

General Petraeus is extremely competent, and if you want to go with a full-blown COIN strategy a la FM 3-24, he’s the right person for the job (which is not to say that this, as practiced, is the best way to fight and win in Afghanistan).

As for the politics, Obama accomplishes a number of things.  First, he shows himself to be an assertive, in-charge leader who swiftly defended the principle of civilian control in the face of McChrystal’s inadvertant (I assume) challenge.  After his lame performance last week on BP, the President also gets to look presidential and show the vigor of his office at a time in which for both personal and structural reasons, he hasn’t looked so good.  Second, President Obama gets to partially reframe the Afghan narrative (after just doing so last year by firing General McKiernan and putting McChrystal in charge) – but this time he puts a general in charge who is the most popular man in uniform today.  This will inspire some confidence at a time in which popular dissent over the conflict has been increasing.

There is one part of this that is risky politically.  If President Obama sees General Petraeus as a possible threat to run against him in 2012, then this appointment could cut either way.  On the one hand, it could neutralize Petraeus by keeping him busy and off the chicken dinner circuit in the U.S.  Moreover, if the war continues to go south, then it could put a dent in Petreaus’ armor.  On the other hand, if Petraeus again rides to the rescue overseas, the American economy continues to flounder, and Petraeus decides he wants to ride in on horseback, Obama will have handed his opponent yet another claim for superior executive leadership.

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I was struck yesterday by a reader’s comment on David Brooks’ recent column.  Self-identified “liberal” Elizabeth Fuller of Peterborough, NH gave a defense of leftist politics that was articulate, if not persuasive.   Among other things, she said:

We love government not because it is always good, but because it is our only hope.

Really?  Government is the only thing we have to hope in?  Not our churches, our families, our neighbors, our work colleagues, our clubs and associations, ourselves?  No, just government.

Fuller’s point is basically that life is hard and unfair for many hard-working people, and government can help.  Fair enough.  But what she doesn’t seem to get is that the more government steps in to fulfill the traditions of churches, families, neighbors, colleagues, clubs and associations, the less people feel a moral obligation to others, the less they have the ability to help others because of high taxes, and the less they feel a personal responsibility to provide for themselves.   She and many other leftists see government providing hope.  I see the heavy boots of government stamping out hope, as well as faith and charity and the social bonds that connect people together and lead them to depend upon themselves and upon one another.

I was told a story a few years ago about a situation in Finland where a religious group was doing a service project that involved cleaning up some public space to make it more usable and attractive.  Some local citizens were angered because they felt that this volunteer effort might take away jobs from government workers.

Most libertarians (except for the anarchist whack-jobs) see a vital and necessary role for a strong but limited government.  We don’t hate government.  We just hate it when government stomps out our humanity.

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I’m trying to maintain an open mind about soccer.  Still not a fan, but I can try not to dispirit those who are (and the US is advancing, so I can show my nationalistic fervor).

But the downside of all this soccer coverage is that it is crowding out the sport of kings, the king of sports: Tennis!  More than that, Wimbledon!

As I’m writing this there is a historic match going on.  Two relatively unknowns (Isner and Mahut) are in the fifth set and the score is 55-54!  They have been playing for over 9 hours.  This is (by far!) the longest match in history.

One thing I love about tennis is there is no gaming the clock, no stalling, no waiting things out.  You have to win more games than the other guy.  Baseball also has this feature.

Its now 56-56.  Amazing!

Addendum: Final Score is 70-68 for the American, John Isner.  Isner, by the way, is 6 ft. 9 in. tall and weighs about 250.  He is a power forward playing tennis.  It will be interesting to follow his future.

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In 1995 Paul Light published an interesting book entitled Thickening Government, which highlighted the explosion of management/professional positions in government–both vertically (the number of levels of management) and horizontally (the number of positions at each level).

In the academy we have seen the same kind of thickening, which I suspect is a primary culprit behind tuition costs that rise far faster than inflation.  This graph (sorry it is fuzzy; see here for a crisper version) shows the increase in the number of positions at universities between 1976 and 2005.  The number of part-time and temporary faculty increased sharply, but they are pretty much slave labor and cost very little (I’m not saying this is a good thing!).  The number of “non-professional full-time” employees (those people who push the brooms and do the other real work on campus) increased only 20%.  Tenured and tenure-track faculty increased only 17%.

The explosion came in terms of administrators and “non-faculty professionals” (NFPs).  Sometimes these positions can be described as “faculty support” (especially in terms of research administration), but more often than not they are just layers of administration and bureaucracy whose main function seems to be trying to stop faculty from doing their jobs.  I don’t have numbers, but my sense is that NFPs are expensive.  They earn not only professional salaries, but they have powerful computers, big offices (with nice couches but no books), and fancy cell phones strapped on their belts.

Tenure-track faculty have done OK (but not great) in terms of salaries, teaching loads, etc., but we haven’t done well in increasing our political base.  As the NFP class grows, we are likely to see an ever dwindling influence of faculty on campus governance.

If these people had a few more books in their offices, I’d be less nervous.

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This week, House and Senate conferees are working out the details in what will likely be the most significant financial regulatory reform in some time. Should the new Consumer Financial Protection Bureau be housed in the Fed? Should the Volcker rule be universally applied? Should banks really be required to spin off their derivative activities? These are important issues and, in some cases, reform may be justified regardless of whether it actually addresses the causes of the financial collapse.

But what if the House and Senate have simply failed to understand the underlying problem? What if they have allowed politically-defined timetables to force premature closure, resulting in regulatory changes that will not have the intended impact?

A piece by Binyamin Appelbaum and Sewell Chan  published in the New York Times on May 2, entitled “Senate Financial Bill Misguided, Some Academics Say,” should have attracted more attention than it did.

The lead paragraph: “As Democrats close in on their goal of overhauling the nation’s financial regulations, several prominent experts say that the legislation does not even address the right problems, leaving the financial system vulnerable to another major crisis.” The piece continues: “A diverse group of critics… say the legislation focuses on the precipitators of the recent crisis, like abusive mortgage lending, rather than the mechanisms by which the crisis spread.”

Some attention is given to Gary Gorton ( I have discussed his book, Slapped by the Invisible Hand, in a previous posting). In a presentation to the U.S. Financial Crisis Inquiry Commission, Gorton summarized his argument as follows (his entire testimony can be downloaded here, along with additional testimony):

  • As traditional banking became unprofitable in the 1980s, due to competition from, most importantly, money market mutual funds and junk bonds, securitization developed. Regulation Q that limited the interest rate on bank deposits was lifted, as well. Bank funding became much more expensive. Banks could no longer afford to hold passive cash flows on their balance sheets. Securitization is an efficient, cheaper, way to fund the traditional banking system. Securitization became sizable.
  • The amount of money under management by institutional investors has grown enormously. These investors and non‐financial firms have a need for a short‐term, safe, interest‐earning, transaction account like demand deposits: repo [repurchase agreements]. Repo also grew enormously, and came to use securitization as an important source of collateral.
  • Repo is money. It was counted in M3 by the Federal Reserve System, until M3 was discontinued in 2006. But, like other privately‐created bank money, it is vulnerable to a shock, which may cause depositors to rationally withdraw en masse, an event which the banking system – in this case the shadow banking system—cannot withstand alone. Forced by the withdrawals to sell assets, bond prices plummeted and firms failed or were bailed out with government money.
  • In a bank panic, banks are forced to sell assets, which causes prices to go down, reflecting the large amounts being dumped on the market. Fire sales cause losses. The fundamentals of subprime were not bad enough by themselves to have created trillions in losses globally. The mechanism of the panic triggers the fire sales. As a matter of policy, such firm failures should not be caused by fire sales.
  • The crisis was not a one‐time, unique, event. The problem is structural. The explanation for the crisis lies in the structure of private transaction securities that are created by banks. This structure, while very important for the economy, is subject to periodic panics if there are shocks that cause concerns about counterparty default. There have been banking panics throughout U.S. history, with private bank notes, with demand deposits, and now with repo. The economy needs banks and banking. But bank liabilities have a vulnerability.

Returning to the New York Times piece, the authors write: “Gorton…said the financial system would remain vulnerable to panics because the legislation would not improve the reliability of the markets where lenders get money, by issuing short-term debt called commercial paper or loans called repurchase agreements or ‘repos.’ … ‘It is unfortunate if we end up repeating history,’ Professor Gorton said. ‘It’s basically tragic that we can’t understand the importance of this issue.’

I find Gorton’s case compelling, although there are additional dimensions to the collapse that need to be explored. Moreover, there are the larger public choice problems and the difficulties inherent in engaging in social engineering via the political manipulation of credit markets).

The New York Times piece, which I strongly recommend to readers interested in understanding the debates, ends on a sober note: “critics point to the words of Nicholas F. Brady, a former Treasury secretary who led the bipartisan investigation into the 1987 stock market crash: ‘You can’t fix what you can’t explain.’”

Does anyone believe that the hard intellectual work of understanding the financial collapse has been completed (note: The Financial Crisis Inquiry Commission created by Congress, is not even scheduled to report its findings until December 2010) Does anyone believe that what we have learned thus far has informed the legislative debates?

By now it has become axiomatic that we should never let a good crisis go to waste. But what if moving rapidly to capitalize on the current crisis does nothing to prevent (or even worse, increases the likelihood of) a future crisis?

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Although I don’t remember their arguments well, leftists used to throw around charges quite frequently that Bush/Cheney abused the power of the Presidency to further their agenda.   I think most concerns were in the area of law enforcement and civil liberties.  I would probably agree with some of those arguments (if I remembered them better).

But it seems that President Obama is regularly using the power of the Presidency in a variety of extra-Constitutional ways.   One could argue that buying a controlling interest in corporations is outside the scope of the Executive, as is setting terms of compensation for corporate executives.  But even more troubling are his actions in wake of the oil spill.  Ordering a corporation to establish a multi-billion dollar compensation fund has no basis in Constitutional powers, nor does an order to halt legal drilling in the Gulf absent clear evidence of wrong-doing (how is this different from searching people’s homes or arresting people without probable cause?).

A federal judge in New Orleans just issued an injunction against Obama’s drilling moratorium.  Although I’m nervous about future problems with deep sea wells, I’m also worried about the large economic destruction done by Obama’s moratorium (Governor Haley Barbour is probably right in claiming that the damage done by the moratorium is larger than the damage done by the oil spill) and even more worried about the precedent that a President can shut down entire industries without some sort of due process.

The Congress has long abused its regulatory authority and the Court has effectively allowed the commerce clause of the Constitution to obliterate the contract clause.  But at least Congress has some minimal authority to regulate commerce.  Where does the President derive his authority to make such sweeping intrusions into the private sector?

Apparently abuse of power is of no concern to the left if that power is being used to abuse profit-making corporations.  Perhaps if the shareholders and workers in the oil industry were residents of Guantanamo the left would be concerned about their rights.

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In the third and final installment of this series (part 1 here, part 2 here), I investigate the truth of that hackneyed Margaret Mead quotation, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”

Is that really true when it comes to libertarians? To recap, in parts 1 and 2 of this series, I investigated whether votes for Ron Paul, per capita donations to Ron Paul, Libertarian presidential votes in 1996-2004, and Libertarian presidential votes in 2008 all correlate together at the state level. If they do consistently track together across the states, that fact implies that there is some underlying factor explaining all of them. It turns out that they do correlate together rather strongly, and I interpret the extracted common factor as the size of the liberty bloc in each state. So the question is – does this liberty bloc have any real influence on politics, or does its minority status doom it to irrelevance?

To test the political influence of libertarians, I model state respect for individual freedom as a function of libertarian constituency, liberal constituency, political institutions, and some demographic controls. In short, I’m trying to find out whether states with more libertarians are freer. The standard and most plausible way to interpret a correlation between state ideology and policy is causal: libertarians influence the political process in their states. It is also possible that libertarians tend to move to states that are freer to begin with, but most of us are not that footloose. Many of us end up stuck in places like New York. (Cough.)

The dependent variable in this regression model is state-level freedom, including both economic and personal freedom, as measured by the “Ruger-Sorens Index” (RSI) in our study “Freedom in the 50 States.” However, I’m going to use the latest and greatest data that haven’t been published yet (next version of the study coming out in January). This is the regression equation:

“Unionization” is the percentage of workers covered by collective bargaining contracts in 1977 (I chose an early year because freedom can have reciprocal effects on unionization), “PctBlack” is the percentage of the state population that is black (the reason for including this variable is to capture well-known “racial threat” dynamics, whereby whites in states that have larger black populations are more racist), and “LegProf” is legislative professionalism, a technical term for how similar a state legislature is to Congress in terms of salary, staff, and session length. I expect states with more union members and racists to be less free, and states with well-paid legislators, large legislative staffs, and long sessions to be less free. Both the “liberal” and “libertarian” variables (defined in part 2 of this series) have been rescaled from 0 to 1.

Here are the results:

Regression with robust standard errors                 Number of obs =      50
F(  6,    43) =   23.16
Prob > F      =  0.0000
R-squared     =  0.7344
Root MSE      =  .11918

|               Robust
freedom     |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]
libertarian |   .1731908   .0760284     2.28   0.028     .0198649    .3265167
liberal     |   .5440847   .2185759     2.49   0.017     .1032845    .9848849
liberalsq   |  -.8819435   .1994393    -4.42   0.000    -1.284151   -.4797358
union77     |   -.010695   .0028045    -3.81   0.000    -.0163508   -.0050391
estbkpct    |  -.0055999   .0019713    -2.84   0.007    -.0095754   -.0016244
legprof     |    -.37702   .1805852    -2.09   0.043    -.7412048   -.0128351
_cons       |   .9625205   .0842816    11.42   0.000     .7925504    1.132491

All my hypotheses are confirmed, and most interestingly, we see that states with more libertarians are freer. The effect of liberalism on freedom is less clear from a quick look at the table, so a plot will be more effective. Here is how liberalism affects freedom, when all other variables are set to their means:

So a little bit of liberalism might help, but a lot really hurts. Incidentally, I also tried including urbanization rate and percentage religious/Christian/evangelical, but none of those variables had any effect on freedom. The common perception among libertarians that more urbanized areas are less free is simply not true, once you control for things like unionization and liberal ideology.

To conclude, then, libertarians do make a difference, though not as much as liberals and conservatives make. If Idaho had only as many libertarians as Illinois, it would no longer be the fifth-freest state in the country; instead, it would be only about as free as Florida, Iowa, or North Dakota, slotting in at #11. If it had only as many libertarians as the least libertarian state, Mississippi, Idaho would be very close to Utah, around #20.


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The first step toward real reform at MMA has been taken: the Minerals Management Service has been renamed Bureau of Ocean Energy Management, Regulation and Enforcement. As a piece in Marine Log notes: “Perhaps realizing that BOEMRE is not only an unwieldy acronym, but one that would likely be pronounced by most of us as “bummer,” the Department of the Interior is calling the newly renamed entity BOE.”


Now that we have a strategy for change, lets apply it to the great recession job making machine in this, the worst economy since the depression recovery summer.

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Secretary of State Hillary Clinton announced in Ecuador last week that the Obama Administration plans to commence legal proceedings against the State of Arizona to invalidate its recently enacted SB 1070. The new law directs state and local law enforcement officers and agencies to enforce federal immigration law by detaining or reporting persons giving rise to a “reasonable suspicion” of being in violation of it. The announcement was a surprise, not only because of who made it and where she made it, but also because of when she made it. Since Arizona SB 1070 becomes effective on July 29, any lawsuit announced now against implementation is premature or, as we lawyers put it, not “ripe.” Unless the Justice Department can envision no constitutional manner by which the law can be implemented, the contemplated lawsuit must be one that challenges the constitutionality of the law on its face. In other words, the Justice Department must be asserting that the statute is unconstitutional as written, rather than unconstitutional as implemented or enforced. But is there a legal basis for a facial challenge to the law?

A review of the statute leaves little reason to believe that a facial challenge to the law stands much chance of success. Federal law specifically empowers state and local law enforcement officials to enforce it; indeed, it often mandates enforcement of federal law by state and local officials. SB 1070 merely directs state and local officials to enforce federal immigration law when they have a “reasonable suspicion” that a person might be in violation of federal immigration law. It might be fashionable to imagine the horror scenarios of police officers asking anyone with Hispanic or Native American features or surnames to produce their “papers.” The law, however, does not, on its face, direct police to do so. Nor does it confer upon them unfettered discretion in its enforcement.

What the law does require is the application of a standard with which law enforcement is intimately familiar, namely, the “reasonable suspicion” standard. It is the same standard applied in numerous settings. Police are experienced at having to articulate the basis upon which they formed a reasonable suspicion. They have to be, because any proceeding flowing from their reasonable suspicion will require them to recite the facts upon which it was formed. The test of reasonableness is a “third-party,” objective standard; it does not reside within the subjective control of the officer applying it. In other words, a judge or magistrate will determine whether the suspicion was indeed reasonable, and the officer making the determination must persuade the judge that, given the facts of the case, it was.

While one can imagine a “parade of horribles” in the application of this law, it is much easier to envision the patently constitutional implementation of it. Consider, for example, what is likely to be the most common way in which the law will be administered. An Arizona law enforcement officer notices a traffic violation and conducts a traffic stop. When, as is standard, the officer requests the driver’s license and vehicle registration, the failure to produce these documents could give rise to a “reasonable suspicion” that the driver is without legal authorization to be in the United States.

To be sure, there may be many reasons why someone may be without a driver’s license. Dispositive proof beyond a reasonable doubt is not, however, required for a police officer to form a reasonable suspicion. Nor should it be. As a society, we want police to investigate when they suspect a crime. We want police to be able to search for evidence of surreptitious criminal activity when they have reason to suspect it, not merely to escort criminals who brazenly offer proof of open and notorious crimes. Indeed, a reading of the statute appears to direct otherwise unwilling officers and agencies to cease turning a “blind eye” toward the presence of illegal aliens when encountered. SB 1070 effectively outlaws “sanctuary cities” in Arizona.

Arizona law enforcement officials are reportedly undergoing training on how to constitutionally implement the law. It is quite possible that the Justice Department has monitored the substance of this training, and is anticipatorily crafting a lawsuit to challenge the law’s implementation. If the announcement now, before the law has taken effect, is indicative of the intention to mount a facial challenge, it may be more of a political move than a legal one. But would it be considered a good political move if such a lawsuit fails? Would a successful defense of the statute encourage Texas, Colorado, California, or other states to follow Arizona’s lead?

There may be many reasons to disagree with the policy choices underlying SB 1070, including, for example, the fact that the statute appears to criminalize the “day labor markets” that form in the parking lots of home improvement centers. However imprudent the policy underlying SB 1070 might be, a politically motivated lawsuit might prove more imprudent.


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Note:  This is the fourth in an ongoing series of posts on NIB (Natural is Better) ideology.  See here for the previous posts in this series: 123. More to come.

For years, economic historian Robert Fogel has been using a version of this picture in class and in various research articles.  Though one might quibble with a feature or two of the graph, it tells a powerful story of the history of humanity.  For millennia, human population was relatively stable and limited, and human life was, to quote Hobbes, “solitary, poor, nasty, brutish, and short.”  High mortality among infants, children and adults was the norm; plagues, pestilence, and famine were frequent; and humans could do very, very little about any of it.  We were more or less completely subject to the environment.

Hobbes was making a statement about man in his “natural” state in the political sense of that term (I’ll leave it to my philosopher colleagues to delve more into that), but his description, written well before most of the tremendous growth in the human population would occur, was an apt description of how mankind fared for most of its natural history.  Out of the Enlightenment (which would come after Hobbes) came  a set of economic, political, and scientific ideas that generated a new world completely unknowable by anyone coming before.  Humanity began to gain a measure of control over its environment and its condition, and that control led to the population explosion.

For many in the modern world the term “population explosion” has a negative connotation, indicating a lack of control and a movement beyond the carrying capacity of the earth.  Yet in the past century alone, life expectancy has nearly doubled; health is better across the world; literacy, education and the arts are widespread;  the environment is much cleaner and healthier in many (not all) ways than it was previously; and vast numbers of people live in freedom, prosperity and comfort (though vast numbers still do not–though their lack of prosperity has nothing to do with the earth’s carrying capacity).  In all likelihood, our descendents a century from now will look back at our day wondering how we lived in such poverty as they enjoy unimaginable prosperity.

The story told by this graph is the greatest human accomplishment of all time.   Yet human progress has always had enemies of one sort or another, people Virginia Postrel refers to as “Enemies of the Future.”    Fools attack democratic capitalism as the cause of poverty rather than the most successful anti-poverty tool ever developed.   They claim a concern for the earth, with precious little appreciation that human beings are the “ultimate resource,” as the late Julian Simon taught.

It is true that the disaster in the Gulf reveals our myopia, our hubris, our institutional failings.  But we need to be careful not to listen to the enemies of the future in moving forward.   Population is a simple metric for the success of a species.  The story of this graph is magnificent, not alarming.   A rejection of continuing human progress in controlling our environment is to accept that the natural hell described by Hobbes is desirable.


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With summer upon us and all that implies…vacations, yard work, etc…I wanted to call your attention to several recent posts here at Pileus that you may have missed:

Sven Wilson’s interesting series on “Natural is Better” here, here, and here

Jason Sorens’ erudite two-part discussion of the size of the Liberty Bloc here and here.

Jim Otteson’s measured view on judging others here.

Marc Eisner on the role of capitalism in producing peaceful relations in Israel here.

Marcus Cole on Elena Kagan here.

And thank you to Christopher Preble of the Cato Institute for his fine guest blogging on foreign policy: here, here, here, here, here, and here.  It was an honor to have you as our first guest blogger – and you are welcome at Pileus anytime!

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This week should be remarkably interesting for those following the financial reform legislation.  Among the big issues on the table include the so-called derivatives “push out” (forcing banks to spin off their derivative trading activities) and the “Volcker rule” that would prohibit proprietary trading at banks. Silla Brush (the Hill) has a quick summary of the work that remains to be done and how the interests are lining up.

Shock of the day: Banking Lobbyists are Making a Run at Reform Measures. Eric Dash and Nelson Schwartz (New York Times) report that “the banking industry is mounting an 11th-hour end run.” Primary focus: the Volcker rule. There are several alternatives being floated and Dash and Schwartz nicely delineate them.

Are these provisions going to survive? Hillary Canada (WSJ) provides one indicator: Citigroup is planning to raise more than $3 billion for private equity and hedge funds via Citi Capital Advisors, its alternatives arm. And as the Times reports, JP Morgan Chase is moving ahead with talks to acquire a Brazilian alternative investment fund manager, Gávea Investimentos. Is this irrational exuberance or a rational calculation that past investments in Congress will yield the projected returns?

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Happy Father’s Day II

I really like Marc’s post celebrating his dad on Father’s Day.  He’s a good son and an even better dad! 

But I’m not a big fan of Father’s Day or Mother’s Day for two main reasons: 

First, I really dislike the commercialization of these holidays.  And don’t even get me started on Christmas.* 

Second, we should honor our parents every day by the ways in which we behave, the lives we make, and in how we regularly treat those who gave us life.**  So, if you thought it was a good idea to take your dad out for brunch today, it is probably a good idea to do it on lots of different Sundays throughout the year.  If it was a good idea to call your father today to profess your love and respect, yesterday was probably a good day to do that too (memento mori).  So I certainly hope you celebrated your father today (assuming he deserved it) – but also give him a call on that chilly Thursday in November that reminds you of the great times you had playing football as a kid or offer to take care of him next week when he needs it since he took care of you as a child when you needed it. 

That all being said, the holiday is a healthy reminder for us to do better at fulfilling our filial duties.  So I give it at least one cheer.      

As for my dad, let me just honor him with one small story (I hope my memory is accurate) that reminds me of how he did his duty as a father and taught by his example the importance of doing what is right even at your own expense.  So there we were in the bottom of the last inning in the town Little League championship game.  My dad had been pressed into duty to umpire the game when the scheduled ump did not show.  The opposing team was up to bat, down at least one run, with men on base and a chance to win the game despite having two outs.  The batter hit the ball and there was ultimately a play at the plate and literally a cloud of dust.  It was a very, very close play.  My dad at first signaled with his arms extended ruling safe while calling out (or was it vice versa?), and then definitively ruled safe.  He easily could have called the runner out (especially given his initial mixed ruling), and his son would have won the championship.  But he stood by his convictions that the runner was safe and our team was sent home with a loss.  Naturally our manager complained vociferously, the crowd was angry, and my teammates badmouthed my dad.  And of course I was disappointed that we lost the championship.  But if he had done the thing that favored his son in the narrowest of senses, a worthless trophy would be collecting dust in my his basement.  But he did the right thing and made what I have no doubt was the right call, and I learned good lessons about sticking up for yourself in the face of much criticism and doing justice even when it is not in your narrow self-interest to do so (and even when you can get away with doing the wrong thing).  Thanks Dad!               

*  Best holidays: 1) Thanksgiving; 2) Patriots Day; 3) July 4th; 4) Opening Day (it should be a holiday); BTW, this obviously excludes personal holidays like your kids’ birthdays or your wedding anniversary.  Those are clearly important days – though my caveats above apply to those days as well.    

** I think I’m doing ok overall with some real room for improvement in area 3.  As for whether I deserve to be feted on Father’s Day, that I’m not so sure of!  I have some serious improvements to make in the year ahead.

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A bit late, but trying to keep this feature alive.

Adam Smith.  The Wealth of NationsVol II, Book 5, Chapter 1:

“The abuses which sometimes creep into the local and provincial adminstration of a local and provincial revenue, how enormous soever they may appear, are in reality, however, almost always very trifling, in comparison of those which commonly take place in the administration and expenditure of the revenue of a great empire.  They are, besides, much more easily corrected.”

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Happy Fathers’ Day

A happy fathers’ day greeting to all of our readers who are fathers (and a reminder to reflect on the impact that your father had in your life).

I was quite fortunate. Unlike most guys, I was blessed with a father who always seemed to be the smartest guy I knew, the strongest guy I knew, and the guy who would always know how to fix anything that broke.  Although my dear Dad is now in his seventies, I have no doubt that he could beat me arm wrestling and run circles around me in a debate.

My dear Dad didn’t just tell me what it meant to be a man—he showed me on a daily basis. Anything I learned about honor—about what it meant to live a life of integrity, to fear God, to embrace an ethos of honesty and goals that were greater than myself—I learned through his daily examples. And all of this was combined with a well developed sense of humor.

I only hope that my two sons view me as I view my father.

Good work, Dad! Happy Fathers’ Day and thank you for a job well done.

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I’m such a short-term pessimist right now about the state of the economy that I fear my biases lead me to too easily believe assessments like this - so am I wrong?  HT: Mankiw.

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Stanford University professor John Taylor, of “Taylor Rule” fame, gave a thought-provoking speech at the NBER Macro Annual Meeting in May that is well worth your attention.  Taylor is certainly no hack, so his views must be confronted as we assess the causes of the current financial crisis and the government’s responses to it.

This speech will be particularly instructive for those who think that the financial crisis was largely caused by greed-induced mistakes in the private sector and/or that the government needed to take strong action after the crisis started to avoid what Taylor calls “Great Depression 2.0″ (you know who you are, my old friend!).

Here are Arnold Kling’s thoughts on Taylor’s speech over at EconLog.

And I bet Professor Eisner will have something for us in the comments.

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Since we have a number of Pileus readers in Australasia, I’d like to invite them to give us their thoughts on the state of liberty in Australia and New Zealand.  I look forward to reading their comments and discussing the future of liberty in those places as well.  Who knows, another decade or two like the last one and the Free State (as in subnational unit in the American system) Project might need to turn literally into the Free State (as in country) Project!  Or maybe they will need to sign up for the FSP and move to New Hampshire to find some hope for liberty!

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From Matt Welch:

The thing eight consecutive presidents have failed to adequately communicate is that ENERGY IS HARD. Yucky oil and Dickensian coal are just stubbornly cheap compared to everything else (particularly, though not only, because the liability for extraction accidents and other environmental damages are not properly priced).

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The Economist, which supported Barack Obama enthusiastically in his election campaign, has issued a shot across his bow. Frankly, I think the whole politics of the BP fiasco reflects the tendency of humans to think that everything that goes wrong requires someone to blame. Is BP really worse than all the other oil companies? And would Obama be trying so hard to look “tough” if people didn’t think it was the job of the U.S. President to stop a deep-sea oil leak?

The oil spill should teach us something about public policy. If we want these things never to happen, we should shut down deep-sea oil drilling. But if we allow it, accidents – bad, perhaps unfixable ones – sometimes will happen. (And yes, the liability cap may have made these accidents more likely.) Many Americans seem to be unwilling to accept that these tradeoffs exist, perhaps because if they did, they’d have to give themselves some share of the blame for this disaster.

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