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Archive for September, 2010

Chart of the Day

From Cato@Liberty.

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According to the AP, Congress is set to pass a law that would mandate standards equalizing the volume of programming and television commercials.  Specifically: 

Legislation to turn down the volume on loud TV commercials that send couch potatoes diving for their remote controls looks like it’ll soon become law.  The Senate late Wednesday unanimously passed a bill to require television stations and cable companies to implement industry standards capping the volume of commercials and equalizing the volume between ads and other programming.

I’m no fan of the regulatory state, and I don’t think the government should regulate how television stations and cable companies run their affairs.  If we don’t like the annoying volume differential between commercials and regular programming, we can stop watching those channels, stop purchasing products advertised in this way, or complain.  Or you can get even more radical (as I have done) and watch television shows late on Netflix, commercial free!  In other words, we can hope to effect change by exit or voice.   

However, such attempts run into stiff resistance due to the collective action problem – hence the allure of government (in other words, coercive) approaches.   

Although I’m not a fan of using the coercive power of the state, the equalization of volume seems to be a Pareto optimal move - unless we really think that advertisers or consumers benefit from such an annoyance (I would guess that it turns us off as much as invites us to buy products – but I’m no expert on marketing and don’t have the data in front of me to confirm or infirm my guess).  Therefore, this probably isn’t the worst thing the state could do.  Moreover, if such tinkering takes up Congress’ time and energy, it gives that august body marginally less time and energy to do really harmful things!

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Like many other people, I was underwhelmed by the recently released Republican “Pledge to America.” Longwinded, wishy-washy, and mostly tinkering on the edges.

I am not a member of the Republican Party (or any other party), and I am indeed one of those who fails to much difference of substance between the two major parties—at least on fiscal issues. There are differences on social issues, but, as I have argued before, those issues pale in importance to the fiscal reckoning that looms before us.

I am not alone in thinking this. In fact, I believe this cluster of fiscal concerns constitutes the core of what animates the Tea Party. It is what explains why they oppose some candidates, including some Republicans, and why they favor others, including some independents. Their surging influence gives me some hope that we might finally address this issue, and it is why I welcome their contribution.

But I am not here to defend the Tea Party qua party either. I want us to get our fiscal house in order—now. To that end, I humbly offer what I believe would be a winning, and indeed inspiring, agenda for an ambitious group of politicians.

Call it “The Principles of American Renewal”:

1. No new taxes of any kind.

2. No new spending of any kind.

3. An immediate, across-the-board 5% reduction in the budgets of every department, agency, bureau, institute, and program currently operated under the auspices of the federal government. That includes both “discretionary” spending and “mandatory” spending budget items.

4. Do the same next year, and then freeze all spending levels there unless a super-majority of both houses of Congress approves otherwise.

That’s it. It’s not much, but I think it has considerable virtues.

First, it does not require us to argue about which agencies, offices, etc. should be cut and which should not—cut them all, with proportionate equality.

Second, no one can claim, at least not credibly, that there is not at least 9.75% of fat (what two years of 5% cuts amount to) to cut in every single line of budget in the federal government.

The 2010 federal budget (October 2009–September 2010) entails spending $3.55 trillion dollars. So this policy would entail a 2011 budget of approximately $3.37 trillion, and a 2012 budget of approximately $3.20 trillion—a savings, after two years, of some $350 billion, bringing federal spending down to what it was all the way back in . . . 2008. Is anyone willing to claim that the federal government was just not spending enough in 2008?

Third, if Daniel Mitchell is correct (H/T Roger Ream), a policy like this would rapidly balance the annual budget, and it would be a good first step toward addressing our longer-term national debt.

Fourth, there are many, many households and business who have had to make similar adjustments. Many of them indeed have gone completely under and wish they only had to make a 9.75% adjustment over two years. So this pledge could enable its supporters to claim that they understand our economic difficulties and are willing to do their part.

There would be some obstacles, of course. This policy would require reform in some entitlement regulations, and special-interest groups would complain about their funding decreasing. But politicians could insulate themselves from the worst of the complaints by claiming, truthfully, that their hands are tied by the need for across-the-board reductions; no one is being singled out for special treatment.

A pledge to support a program like that, backed up with, perhaps, a promise to resign if a candidate voted otherwise, would, I preduct, be a winning one. If enough people got elected on it, it might also actually do some good in Washington, making it a win for the rest of us as well.

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Jonah Goldberg on education policy:

But is there another major area of American public policy that is more screwed up and more completely the fault of one ideological side [than education]? Which party do the teachers’ unions support overwhelmingly? What is the ideological outlook of the bureaucrats at the Department of Education? Which party claims it “cares” more about education and demagogues any attempt by the other party to reform it? Who has controlled the large inner city school systems for generations? What is the ideological orientation of the ed school racket? Whose preferred teaching methods have been funded and whose have been ridiculed?

Read more here: Liberalism’s greatest failure?. His post (like many on NRO) could be labeled as partisan ranting.

But it is also ranting that tells the truth.

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Kwame Anthony Appiah has a neat thought-provoking piece in the Washington Post that discusses what currently tolerated practices are likely to meet with future moral condemnation.  He argues that there are “three signs that a particular practice is destined for future condemnation”:

First, people have already heard the arguments against the practice. The case against slavery didn’t emerge in a blinding moment of moral clarity, for instance; it had been around for centuries.

Second, defenders of the custom tend not to offer moral counterarguments but instead invoke tradition, human nature or necessity. (As in, “We’ve always had slaves, and how could we grow cotton without them?”)

And third, supporters engage in what one might call strategic ignorance, avoiding truths that might force them to face the evils in which they’re complicit. Those who ate the sugar or wore the cotton that the slaves grew simply didn’t think about what made those goods possible. That’s why abolitionists sought to direct attention toward the conditions of the Middle Passage, through detailed illustrations of slave ships and horrifying stories of the suffering below decks.

Appiah proceeds to argue that the following meet this standard: our prison system, how we treat the elderly and the environment, and industrial meat production.  Ross Douthat and Will Wilkinson respond in kind – Douthat nominates abortion; Wilkinson, the nation-state system.

Tyler Cowen counters by asking “which practices currently considered to be outrageous will make a moral comeback in the court of public opinion.”

My nominee of a currently tolerated practice that will be seen as less and less morally acceptable is voluntary male circumcision.  It is a painful (some might say barbarous) ritual practice that has few proven health benefits (the most important of which, possible reduction of the risk of STD/AIDS acquisition, can be controlled through safe sex practices such as monogamy) and some serious potential medical side-effects.  Thus it is not surprising that the American Academy of Pediatrics does not recommend routine neonatal and has stated that “the procedure is not essential to the child’s current well-being.”  Moreover, male circumcision may diminish sexual pleasure in adult males and their female partners.  In the West, it is largely a product of the Victorian Era’s misguided sexual puritanism.

Circumcision (btw, Will W., this is not my personal hobby-horse) also fits Appiah’s standards quite well.  First, the arguments against circumcision are out there and growing.  Indeed, according to my wife’s OB/GYN, people on the coasts are engaging in the practice less frequently while the Midwest has been less comfortable with these changing sentiments.  Even more importantly, people are more aware of the barbarism of female genital mutilation (FGM) – and this compels people to think about male circumcision.  Indeed, my growing awareness of FGM was a contributing factor that led me to think seriously and more carefully about our own cultural practices and ultimately to decide not to circumcise my sons.

Second, defenders of the custom certainly use tradition to defend the practice (as in “My Dad is circumcised, I’m circumcised, so I’ll circumcise my kid”) or make a claim to necessity (“we need to do this to prevent the spread of STDs” – even though there are many other avenues to reduce the risk).

Third, supporters certainly engage in “strategic ignorance” – indeed, most people I’ve discussed this with never even give it a thought, and if they do, it is due to the pangs of possible regret as they watch their son go under the knife just after entering the world.

So, I predict that (absent new compelling evidence of serious health benefits) voluntary male circumcision will be seen in the future as a strange ritual of the less enlightened past.

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Many people (including me) take the ever increasing growth in government expenditures as a basic article of faith.   Over the 20th century, we had about a 23-fold increase in real GDP, but a 200-fold increase in real government expenditures.  In other words, from 1900-2000, federal expenditures grew at a rate nearly 10 times the growth rate of the economy.  This growth happened in surges.  In 1929 it was 2.9% of GDP, by 1939 it was 9.2%.  WWII and the Cold War brought more defense spending, and all federal spending has increased steadily since then.

One might expect that such an increase would have been accompanied by vast increases in the number of federal employees.   During some periods this obviously happened.  What I didn’t realize until I was looking at some figures today is that the growth in the civilian workforce federal workforce has, for the past several decades, not increased by that much.  According to the Factbook produced by OPM, the federal civilian workforce was 2.708 million in 2000 and 2.700 million in 2006.  According to another source, the Executive Branch employment (excluding postal workers) was slightly less in 2005 than it was in 1965 (and down 17% from the peak in 1990).

So government is expanding rapidly, but the government workforce hasn’t done so for quite some time.  What is going on?  The same Factbook gives part of the answer.  Over that same period from 2000-2006, the annual “base salaries” of federal civilian employees rose, in nominal terms, from $46,784 to $66,372–an increase of over 16% after adjusting for inflation.  This was not a demographic effect, since the average length of service actually declined slightly over that period.  Benefits, which are on top of the base, went up by even higher percentages, as did payments for health and retirement benefits for retired employees.

This six-year increase is a short period of time.  Trends like these over long periods lead to very big differences.  A swath of recent news stories has documented that public-sector employees get paid more than private sector employees, especially when benefits are added in.   These data suggest that gap is likely to grow.

If we think of “the government” as, loosely, the people who work in the government, then we have a clear and troubling story here.  Rent-seeking behavior by many interests have led to increased expenditures on those interests over the decades (since the Founding, actually).  This continues more or less unabated.  But while the scope of government is ever-increasing, the people in the government have stopped expanding the federal work force (it might have gone up given the surge in recent spending, but I don’t have data easily at hand on that question).  Instead, they have chosen to sharply increase their wages and benefits rather that spend increased funds on personnel that might actually improve the performance of government.  Furthermore,  because the expenditures per employee ratio has gone up considerably, the average influence of each federal employee is increasing as well.

As far as overall budget problems go, the federal payroll is nowhere near the problem that entitlements and defense spending are.  But we are talking about hundreds of billions per year in payments and, more important, a bureaucratic machine that is eating itself alive from the inside.  Elected officials have a relatively hard time raising their own salaries and benefits, but the bureaucrats who work for them have been largely immune from public scrutiny in this regard.

The outrageous bonuses and salaries paid to Wall Street fat cats from funds loaned by the government caused a lot of public anger (though directed at the wrong thing: the bailouts — which were absolutely necessary).  Compared to the regular fleecing of the taxpayer by the public employee unions in this country, the Wall Street bonuses are a pittance.

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It has long been commonplace to assert that income inequality has been rising in the U.S. since the 1970s. Following Marc’s post about Robert Reich’s book and my reply to Roderick Long’s argument for moral concern about inequality, I thought readers might be interested in a debate going on at the Economist over new data on U.S. income inequality. Will Wilkinson points up new research showing that the rise in income inequality has been overstated significantly due to the fact that prices for the goods that lower-income consumers disproportionately buy have fallen relative to other goods. He also offers another argument for lack of concern about income inequality as such:

To find that American income inequality has been overestimated is not to find that America’s institutions are closer to some moral ideal than we had thought. Were America’s highest marginal income tax rate a little higher, that would do nothing to reform America’s penal system, to moderate America’s nation-building habit, to reform its de facto apartheid public-school system, or to improve its vicious treatment of undocumented immigrants. Inequality is indeed a frequent side-effect of injustice, but it is benighted to fixate on symptoms to the neglect of the disease. The more time wasted arguing about relatively meaningless abstractions like country-level income inequality, the less is devoted to addressing what ought to be the sources of American shame.

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Myths of the Fall

I often disagree with Robert Reich, but nonetheless find his arguments quite interesting. From what I gather, his forthcoming book (After Shock) is going to situate the financial collapse and the troubled recovery in a longer record of declining wages (a product of the decline of manufacturing) and growing inequality (a product of these declines and changes in tax policy). I have not read the book, but I have heard Mr. Reich speculate that the decline in the savings rate and the growing levels of indebtedness resulted from the disjunction between expectations of improving levels of consumption and the stagnation of real wages for much of the population. There is likely much to this argument, although the fully developed argument would have to take a host of additional factors into account.

Having heard Mr. Reich on NPR the other evening, I dropped by his blog to see if I could find a written version of his argument. No such luck. However, I came upon his critique of the Republican Pledge in an posting entitled “Republican Economics as Social Darwinism.” Let me quote:

John Boehner, the Republican House leader who will become Speaker if Democrats lose control of the House in the upcoming midterms, recently offered his solution to the current economic crisis: “Liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate. It will purge the rottenness out of the system. People will work harder, lead a more moral life.”

Actually, those weren’t Boehner’s words. They were uttered by Herbert Hoover’s treasury secretary, millionaire industrialist Andrew Mellon, after the Great Crash of 1929.

But they might as well have been Boehner’s because Hoover’s and Mellon’s means of purging the rottenness was by doing exactly what Boehner and his colleagues are now calling for: shrink government, cut the federal deficit, reduce the national debt, and balance the budget.

And we all know what happened after 1929, at least until FDR reversed course.

I remain somewhat stunned that the standard issue story of the Great Depression and the Hoover administration continue to find an audience.  It is not as if the data is hard to find. One can go to the OMB’s Historical Tables (Table 1.1 ) and discover the following:

  • 1929: the federal government ran a surplus of $732 million
  • 1930: the federal government ran a surplus of $738 million
  • 1931: the federal government ran a deficit of $462 million
  • 1932: the federal government ran a deficit of $2.7 billion. In dollar terms, this was larger than the deficit in FDR’s first year in office ($2.6 billion)

Compare:

Reich’s claim: The Hoover administration’s response to depression was “shrink government, cut the federal deficit, reduce the national debt, and balance the budget.”

and…

The OMB’s data: As a percentage of GDP (Table 1.2), the deficit incurred during Hoover’s last year in office was 4 percent of GDP. During the decade of the 1930s,  the federal government would run higher deficits in 1933 (4.5 percent of GDP), 1934 (5.9 percent of GDP), and 1936 (5.5 percent of GDP). But its deficits would be the same as Hoover’s last year in 1935, and smaller in 1937 (2.5 percent GDP), 1938 (.1 percent GDP) and 1939 (3.2 percent GDP).

To compare Hoover’s 1932 spending record to more recent years, a deficit of 4 percent of GDP was greater than the US government incurrent from any time from 1993 through 2008. It ballooned to 9.9 percent of GDP (2009) and is estimated to hit 10.6 percent this year (2010).

The Republican Pledge suggests that we can move to a balanced budget via reductions in discretionary spending and an extension of tax cuts, with no serious discussion of entitlements (another myth worth rejecting).

I wonder if we can have serious discussions of large economic policy questions when we work with inaccurate caricatures of the past. The Left tells a story of Hoover and Mellon, champions of laissez faire, heartlessly shrinking the government in the wake of the depression and Roosevelt riding in on a white horse to save the nation’s economy.  The Right tells a story—equally inaccurate—of Great Society social engineers inflating the size of government until Ronald Reagan rode into town, explained that government was the problem, not the solution, and reduced the size and role of government, unleashing the marvels of the market and the private sector.

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According to the Las Vegas Review-Journal, Democratic Senate Majority Leader Harry Reid, under a tough re-election challenge from Republican Sharron Angle, is running ads slamming Angle for opposing health insurance mandates. Angle was one of two state senators to vote against mandated coverage of colonoscopies and correctly argued that these mandates drive up costs for everyone. Angle is right on the economics, but this is a hard one to explain to voters. Let’s hope a courageous adherence to principle wins the day, but I’m not holding my breath.

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From George Will’s recent column on gender politics: “At Bryn Mawr, 4 percent of 2010 graduates majored in chemistry, 2 percent in computer science. At Smith, half of 1 percent were physics majors; 1.4 percent majored in computer science. In 2009 at Barnard, one third of 1 percent majored in physics and astronomy.”

But does he cherry pick the data?  What is the percentage of physics majors at Bryn Mawr (it is apparently about 3%)?  Chemistry majors at Smith?  Chemistry and computer science at Barnard?  Should these numbers be surprising for liberal arts schools?  And what do they actually tell us (and do they tell us what Will thinks they tell us)?

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The Financial Times has an interesting piece and photo essay on Kennesaw, Georgia, where gun ownership is legally required. 

Naturally, I disagree with any law forcing individuals to purchase something from the private sector – whether it is health insurance or a gun.  However, as laws go, this is pretty harmless since it is not enforced and there are numerous exceptions.  What I do like about it is that it represents a certain spiritedness that is lacking in so many other places.  As the author points out, “This is not just about gun rights, but about independence; it is about a desire to keep the government in check.” 

Of course, that spiritedness is improperly channeled here – as, unfortunately, is often the case with so many conservative Americans.  The answer to the state overreaching in one place isn’t to extend it in another.  But this is the sort of sentiment, that if properly channeled, can help forestall further erosion of our liberties – and if we are real lucky, perhaps even some restoration.  Of course, this assumes that people actually desire to be free, something that wiser minds than my own have questioned.    

(BTW, given that the Confederate cause shows up more than once in this piece on Kennesaw, it is worth noting the following: As a Yankee, a libertarian, and someone absolutely opposed to slavery and racism, I don’t share the respect for the Confederacy so often seen in the American South by even those who profess some love of liberty.  While I understand that the Confederate flag, for some, represents opposition to the federal government, I really wish that modern day “rebels” would seek out a more positive symbol of their resistance [some suggestions are posted here, including one wisely adopted by the Tea Party Movement].  For libertarians, there is so much to dislike about the CSA and so many better models of resistance.  As David Beito and Charles Nuckolls rightly conclude: “If the Confederate multiculturalists believe in liberty, as many of them assert, they will stop waving the Confederate Battle Flag, abandon the cause of a nation state that championed an unforgivable violation of inalienable rights, and embrace the rich American heritage of individualism.”).

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More on Inequality

Fellow blogger Jason Sorens recently asked whether we should care about inequality - and argued in the negative while stressing that we should care more about poverty and market power imbalances.

But even if we do care about inequality, it still begs the questions of what causes inequality and how to deal with it.  Enter economist Daron Acemoglu (and his frequent co-author James Robinson).  Noting that the average citizen in the United States is a lot more prosperous than the average citizens of various developing countries, he proceeds to explain how the differences can largely be explained by the very different institutional arrangements in these places.  As Acemoglu argues, “Inequality is not predetermined. Nations are not like children — they are not born rich or poor. Their governments make them that way.”  Therefore, the surest way to deal with global inequality (and poverty) is to reform the governments of these places.  

Not exactly a new argument – and much easier said than done.   But Acemoglu’s argument is an important corrective to the rather enabling (and popular) stories of geographic, meteorological, and ecological determinism told by people like Jared Diamond.  Government is a critical variable in economic development and even though (as Smith reminds us) there is a lot of ruin in a nation, poorly conceived (or worse, well-planned parasitic) institutional design/policies can have huge ramifications for the long-run wealth of a country.  Just ask the people of Santa Cruz County, Arizona and Nogales, Mexico!    

That all being said, I think institutionalists – especially economists - are too quick to dismiss cultural variables when discussing economic outcomes.  We don’t have to retreat to Weber’s old “Protestant Ethic” argument (or Montesquieu’s nastier argument about the laziness of those who live in warm climates) to remember that institutions - even if really, really important in their independent effects – don’t emerge out of the ether but may reflect the cultures in which they emerge or that culture has an important mediating effect on the impact of institutions themselves.  Moreover, one could argue that the extent of personal virtue of those who inhabit higher office or the relative barbarism/gentility of society also have the potential to make or ruin a nation. 

Nonetheless, we should take heed of Acemoglu’s counsel, and I look forward to more of his work and that of his co-author Robinson..

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The Only Issues

I mentioned in a previous post that we as a nation face two problems that are far and away the most pressing and menacing, and that almost every other problem—even all the rest combined—barely amount to a hill of beans in comparison. Those problems are: (1) our public debt, at the federal, state, and local levels; and (2) geopolitical instability and aggression. I think we need to address those two problems before we worry about anything else. And we must address them like grown-ups, who understand there is an external world with realities that we must face, not as intellectual children who believe that wishes, words, hopes, or dreams can make all of reality’s hard edges and all the world’s bad men go away.

Laurence Kotlikoff, professor of economics at Boston University, now tells us that the first problem is even worse than I feared. According to his recent arresting essay in Bloomberg, “The U.S. is bankrupt.” Using CBO data, Kotlikoff calculates the net present value of the United States debt to be $202,000,000,000,000. That is two hundred and two trillion dollars.

That is approximately $673,333.33 for every man, woman, and child in the United States.

That is approximately $2.7 million for every family of four.

And that is not considering the debt that each individual, or each family, has incurred on its own. So if you have a mortgage on your house, car, or boat, or if you have student loans or credit card bills, you have to put that on top of the debt the government has created for you.

Kotlikoff says the only ways out of our almost unimaginably bad fiscal nightmare—which is, in reality, he says, worse than that of Greece—are (a) immediate and permanent doubling of taxation at all levels; (b) radical, drastic, and immediate slashing of federal obligations (on the order of defaulting on Social Security, Medicare, and Medicaid completely); or (c) massive priting of money to “pay” the bills, leading to corresponding massive inflation. He predicts a combination of all three.

A fourth option he neglects to mention is (d), an aggressive policy of imperialism, whereby we conquer lands and territories, claim their assets, and use those assets to pay off our debt.

You don’t think (d) is possible . . . do you? Well, whether you do or not, it’s going to be some combination of those four. There are no other options.

We have been living in a fiscal fairy tale for a long time. The unprecedented wealth to which America’s political and economic institutions have given rise have also enabled us to develop and nurture a juvenile worldview of unreality, where wealth, production, goods, services, peace, and leisure are all naturally occurring features of the world—instead of fragile historical anomalies that must be carefully and diligently and continually maintained. Our wealth has allowed us to adopt adolescent economic theories that are the intellectual equivalents of “milk comes from the grocery store” and “money comes from the bank.”

At some point, adults are going to have to begin acting once again like adults, and do the equivalent of cutting up the credit cards. It is nice and fun and oh-so-freeing to live as if we had no responsibilities, as if someone somewhere else were taking care of things, as if we could act like children our whole lives. But we can’t. After decades of pretending we could, the real world is now crashing back down us with a vengeance.

Some are beginning to realize the gruesome reality we face. Koltikoff, for one, is sounding the tocsin; he is not the only one. But if his numbers are right—if they are even close to being right—it might well be too late.

Time to buy gold?

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For those looking to start the weekend early, a video of Stephen Colbert’s opening statement (before his congressional testimony).

On the one hand, one might see this as troublesome. After all, Congress has not been able to come to a resolution on the Bush tax cuts; it has not yet passed a single spending bill for the upcoming fiscal year.  There is no evidence that any of this will interfere with the desire to return home and begin doing the people’s work seeking reelection.

On the other hand, as long as members of Congress are watching Mr. Colbert, they can’t cause any serious trouble. As a fan of the Colbert show, I highly recommend this link.

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Should We Care About Inequality?

Left-libertarian market anarchist Roderick Long argues that worrying about socioeconomic inequality as such does not count as envy. He gives some examples in support of the position, including a utility that will shut off service to a non-paying customer, while a customer can’t shut off payment to a utility with poor service, and a tenant who has to agree to broad provisions in a rental contract.

Long believes that these sorts of problems are ultimately the result of government intervention, but Bryan Caplan responds that existing markets don’t really work in such an anti-consumer way, and that to the extent that government gets involved currently, they often tilt things away from producers. Long’s response to Caplan is here. I may be the closest thing to a left-libertarian on this blog, but I tend to agree with Caplan that left-libertarians “make mountains of mole-hills, then implausibly blame government for mountain-making.” I recall a conversation I had with a minor landlord in the Boston area a few years ago, and he detailed all the ways in which government makes it possible for someone to live rent-free on his property more or less indefinitely – and there is a certain group of tenants who routinely take advantage.

(more…)

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I have noted before that the contemporary GOP seemed to be AWOL in the war of ideas, citing John Boehner’s recent remarks in Cleveland as exhibit A. Now it appears that the GOP is attempting to shake its recent label as the “Party of No” by releasing a 20 page document entitled A Pledge to America (draft text here) presenting a host of reforms that a Republican controlled Congress would pursue (see a brief overview at Politico).

This certainly is an improvement over the overly general statements of the past. There are some interesting ideas here and I think the electorate is well served when parties provide a unified front and make commitments to relatively specific proposals.  I am concerned that the Pledge promises to reduce the deficit largely through caps on non-security related discretionary spending (everyone knows that the engine of growth is and will be entitlement spending). And on entitlement spending, the Pledge is overly vague:

Reform the Budget Process to Focus on Long-Term Challenges: We will make the decisions that are necessary to protect our entitlement programs for today’s seniors and future generations. That means requiring a full accounting of Social Security, Medicare, and Medicaid, setting benchmarks for these programs and reviewing then regularly and preventing the expansion of unfunded liabilities (p. 11).

I suppose in an electoral season, this is about the best that one can hope for. Anything more specific would give rise to a geriatric revolt.

There are a number of promised reforms in process, including allowing members of any party to offer amendments on any bill that would reduce spending.  Assuming that parties are procedural cartels that control access to the agenda (see Cox and McCubbins, Setting the Agenda) and given the recent history when the GOP as majority party used rules rather ruthlessly to control business in Congress (see Hacker and Pierson, Off Center), I can’t imagine that this promise will be realized.

There are a few nods to social conservatives (e.g., “We pledge to honor families, traditional marriage, life, and the private and faith-based organizations that form the core of our American values” in the preamble). But this document seems to be driven by fiscal conservatives with hopes of appealing to the Tea Party independents.

Undoubtedly, few will read the Pledge (it is far too convenient to listen to the talking heads spinning a document that they too have never read). But I recommend it to Pileus readers and look forward to any reactions.

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While my fellow Pilei debate the role that moderate Republicans can play in a future return to fiscal sobriety, libertarian law prof Randy Barnett considers whether, with respect to the PPACA, it even matters. What are the chances that the Supreme Court strikes down the individual mandate, including potentially the entire bill, which lacks a severability clause? Barnett argues that the individual mandate contradicts existing Supreme Court thinking on the “necessary and proper” clause, and that the mandate represents a legally unprecedented “commandeering of the people” by the federal government. If the health care bill remains unpopular by the time the case reaches the Supreme Court, he muses, there may well be five votes to strike it down.

HT: Hit & Run.

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The talk about how Republicans are really no different than Democrats is very tiresome.  I won’t tire our readers more with a long discussion.  But let me just give one illustration.

The “Paycheck Fairness Bill” is still alive in Congress and still has  possibility of passing.  This is a terrible, awful, horrible, despicable, stupid bill based on egregious and intentional misunderstanding of wage statistics.   As Christine Hoff Summers writes today in the New York Times:

The Paycheck Fairness bill would set women against men, empower trial lawyers and activists, perpetuate falsehoods about the status of women in the workplace and create havoc in a precarious job market. It is 1970s-style gender-war feminism for a society that should be celebrating its success in substantially, if not yet completely, overcoming sex-based workplace discrimination.

To put it simply, in a Republican Congress, this bill would never see the light of day, nor would Card Check, the attempt to wipe out secret ballots in union elections.

It’s not that Republicans are the guardians of virtue, protectors of liberty, or wise stewards of the public purse.  Far from it.  But these terrible, awful, horrible, despicable, stupid bills are pretty much the Hallmark of the national Democratic party.

So, I need to stop sounding like the spokesperson for the NRC.  But enough already with the two parties are equally bad crap.

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We have had some discussion on the curious case of Christine O’Donnell (here), and on the apparently dwindling advantage Republicans are enjoying over Democrats as we transition from primaries to the general election (here).

For the record, I am not a member of any political party. I am, moreover, repelled by arguments that people should vote for a party’s candidate because . . . he is the party’s candidate. I have no interest serving any party simply for the sake of serving the party. I want the right principles advanced, whoever, and from what party soever, the person should come who supports those principles.

I think George Washington was right when he said, in his 1796 Farewell Address, that political parties “are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.” He went on to argue:

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.

What Washington called “the spirit of party” was, he argued, “inseparable from our nature, having its root in the strongest passions of the human mind”—namely, the tribal passion to separate the world into “we” vs. “they,” into rival and competing groups. This spirit can then easily become a desire to see “our side” win, regardless of whether our side is better than “their side” and regardless of the issues at stake or the facts of the matter.

I think this spirit of party is behind the attacks on O’Donnell from Republicans. Karl Rove is on a one-man wrecking-ball mission, it seems, to destroy her candidacy (here are more videos than you’ll be able to stomach of him attacking her), and Charles Krauthammer has joined the fray. Rove beats the drum on her dabbling in witchcraft and on “financial questions” in her past, but I think that is blowing smoke. What really angers him is that he thinks she won’t win; if she doesn’t, it would leave one more seat in the Democrats’ hands. Krauthammer has the same objection: What O’Donnell’s supporters are missing is “the point that what’s at stake here is control of the Senate.”

Right. We want our guys to be in control, not the other team’s guys. Perhaps Rove or Krauthammer would like to explain what exactly their party did during the eight years of its occupancy in the White House that should endear itself to citizens concerned about our most pressing issues now? I think there are two huge, looming, and ominous issues facing the country over the next several years, issues that dwarf all the others: (1) our spiraling-out-of-control fiscal situation, at the federal, state, and local levels; and (2) growing geopolitical instability and aggression.

Perhaps Republicans, or some of them at any rate, have awakened to the first issue, but, with a few exceptions, establishment Republicans’ recent conversion to the religion of fiscal conservatism does not inspire confidence. Democrats, for their part, seem willing to pretend the first issue doesn’t exist. And neither party is offering a coherent and plausible plan to deal with the second issue.

One reason the Tea Party has been able to exercise such astonishing influence is precisely that it is not beholden to any party. They want fiscal conservatives who will commit to the principle of constitutionally limited government. As they have now shown, they are perfectly happy to campaign against Republicans who are unwilling to discipline themselves according to that principle.

In this I think the members of the Tea Party are heeding Washington’s counsel. Washington predicted that parties could come to see their own survival and interests as being more important than the interests of the constituents or country they served. When that happens, Washington, argued, tyranny will result. Whatever else is true of the unorganized, decentralized, raucous, and motley Tea Party supporters, they seem to understand the dangers of the spirit of party, and they are moving to oppose it.

For that, I think they should be applauded, not vilified.

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The health care reforms were designed to expand coverage and “bend the cost curve.” Did no one suspect that insurers would muster a proactive response to changes in policy?

In Connecticut: “Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons.” This same story is playing out across the country.

The reforms prevent insurance companies from denying individual policies for children with preexisting conditions. In Colorado:

at least six major companies — including Anthem, Aetna, Cigna, and Humana — have said they will stop writing new policies for individual children” in Colorado. The companies “blamed health reform mandates taking effect Thursday requiring companies that write such policies as of that date to also cover sick children up to age 19,” the paper said.

Much of this seems quite predictable. One wonders what other changes the next few years will witness as the provisions of the reforms are enacted.

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This Time Will Be Different?

The new Gallup generic ballot for Congress shows that things are tightening as the midterm elections approach. In August, Republicans enjoyed an unprecedented 49% to 43% lead. As of today, the lead has dwindled to 46% to 45%. Assuming that the change in the polls is accurate, what explains the tightening numbers? Certainly, the Democrats have done nothing in the last month to show that they are any more capable of governing than they were in August. The economy remains mired in a sluggish recovery and the largest legislative accomplishment of the past two years—health care reform—remains unpopular.

Democrats have made the case that the Republicans have no positive agenda. They are simply the “party of No.” They have made the case that a vote for the GOP would be tantamount to a return to the Bush years. Republicans have countered these claims by… And this is the problem.

For decades it appeared that the Left had lost the war of ideas.  The Right, in contrast, seemed ready to make the intellectual case for bold changes in public policy in areas ranging from education to trade. In 2000, candidate Bush promised to cut taxes and reduce the size of government to 16 percent of GDP. This would be combined with the promotion of further trade liberalization, deregulation, and a host of market-based reforms including social security privatization and school choice. In the end, under unified Republican control, all that remained were tax cuts. When combined with expanded entitlements, the final product was a growing debt and an expansion of government from 18.2 percent of GDP to 21.7 percent of GDP.

Can Republicans expect to offer a credible alternative to the Democrats—can they make a credible claim that this time will be different—without making an assertive intellectual argument in support of a positive agenda?

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The tea party afterglow

My colleague Jim has posted (see below) that Christine O’Donnell may be a nutcase, but she will likely be a reliable deficit hawk. Sounds good.

Stephen Spruiell at NRO makes the case against O’Donnell’s Democratic opponent, Chris Coons, as a “reliable down-the-line, tick-the-box, reliable vote for President Obama and the Democratic leadership.”  Sounds terrible.

Both their points would be worth making if O’Donnell had any chance of actually winning.   The good Republicans of Delaware decided to ignore the basic fact of the election:  they live in Delaware.

Oh well, I hope the tea partiers and other O’Donnell supporters enjoy the warm afterglow of their victory.  In a few months Coons will be setting up shop and voting in a way that makes former Senator Joe Biden look like a Republican.  Yes, the tea partiers have socked it to the “establishment.”  But now — like the family of the girl who marries the drunken louse of a boyfriend because he is soooo cute — we will all have to pay the price.  Thanks a lot.

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So about a decade ago Christine O’Donnell somehow got on the vile Bill Maher’s “Politically Incorrect” and claimed that while in high school—yes, high school—she had “dabbled into witchcraft.” You can see the “Politically Incorrect” clip here.

Now, you don’t have to be Cal Lightman to realize, on watching that clip, that she’s making it up. She’s lying, or at least greatly exaggerating, for effect. At the time of her appearance on the show she was in the thick of justifying and glorifying her transition from Catholicism to evangelical Christianity, and one can easily understand the strong rhetorical pull of saying “I was among the worst of the sinners before I came to see the light.” She’s all but admitted as much, saying yesterday, “Bill [Maher] wanted ratings; I gave him ratings.”

Did she know people calling themselves witches? Who knows, but probably. Did she “hang out” with any of them? Again, who knows, but probably. I’m just not impressed. There are people in my kids’ high school right now claiming to believe all sorts of ridiculous and juvenile things, almost all of it for effect. (Don’t you remember high school?)

O’Donnell has also claimed that she went through a period in college when she drank heavily and engaged in promiscuous sex, before she became an evangelical; and she has recently downplayed the witchcraft comments by asking rhetorically whether others too “hung out with questionable folks in high school.” Several in the media are calling her to the carpet on this issue, including Karl Rove of all people. (Who would have thought that Karl Rove would suddenly become a darling of the mainstream media?) But she needs to ‘come clean’ on (legal, I might add) things she may or may not have done in high school? Please.

Throughout her campaign, O’Donnell has claimed that her priorities are addressing the national debt, reducing taxes and spending, and repealing ObamaCare. I think voters should vote for her (or not) based on whether they support those priorities. The incessant speculation and discussion of her personal religious or sexual beliefs is relevant only if she is being elected a philosopher-queen. I realize that many people in Washington, DC, as well as other parts of the country, do indeed apparently have the view that they are electing rulers rather than constitutionally limited representatives. But that is not what her job is supposed to be, and it is not what she herself apparently believes her job will be.

Besides, does anyone really suppose that she would have the weirdest religious or sexual beliefs in Congress? Can anyone argue that her judgment—questionable though it may be—would be the most questionable in Congress? Do I really need to rehearse the roster of crooks, scoundrels, and reprobates who already hold positions in Congress?

We have trillions of dollars of debt, and it is not only increasing but its rate of increase is increasing. Sorry, but that is way, way more important to me than O’Donnell’s teenage views on witchcraft, or, for that matter, her views from a decade ago on masturbation.

I wish someone would cast a spell over the members of Congress convincing them that the next program they create, the next agency or institute or bureau or center or division or department or council or committee they create, the next increase in spending they approve, or the next restriction on peaceful exchange among consenting adults they endorse would lead to the instantaneous public exposure of all of their own misdeeds, improprieties, wrongdoings, and grave lapses in judgment.

Until then, I’ll take a former witchcraft-dabbler who is a deficit hawk if my only alternative is another reveler in further indebting this and further generations or another philosopher-king who believes he is more competent to run my life than I am.

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A little while back, I had a short post on the sad death of a 13-year-old motorcyclist and promoted the idea that the state has a critical interest in protecting children from the foolishness of their parents.  This, to me, is one of the central holes in classical liberal thought, that rational, autonomous adults just appear on the scene ready to seek their self-interest and have their liberty protected by the state.  Though I’m no expert, it seems to me that liberal philosophers have mostly neglected the problem of protecting children before they become rational adults.

On the other hand, nothing is so dear to us — and thus for libertarians an area of our lives where state intervention is so unwelcome– as our children.  Having the right to raise our kids with minimal state interference is a closely gaurded civil liberty.  To be secure in our persons and our homes extends naturally to holding our children close and protecting them from outside forces that may try to hurt them, forces that include the state, its laws and agents.  My niece recently had a blood clot in her leg that, within just a few hours, became over three feet long.  As a doctor friend told me, once the blood starts clotting, it spreads quickly as blood in the vein is exposed to the clot, causing it to clot as well.  This image of a rapidly spreading clot reminded me of the spread of government regulation.  It start’s small, but quickly takes over the entire vessel.

Yet I’m still unwilling to leave parents entirely to their own devices.  At the risk of sounding like Hillary Clinton, the village helps raise the child and has a keen interest in the child.  We could defend this position on communitarian grounds, but that is entirely unnecessary, since liberal grounds are entirely sufficient.   The child’s right to life starts when it starts to live.  No coherent moral theory places any right by anyone else above that right to live, except in the case where the child’s life poses a serious threat to others (as happens occasionally during pregnancy).  Children are by nature dependent beings, a dependence which changes only minimally at birth and which continues for many years.  Children may have many other rights prior to adulthood, but certainly their right to exist is paramount and unassailable.

An unavoidable part of life is risk.  As a general principle we expect parents to manage this risk.  Not everyone will make the same decisions.  Earlier I asked what is the acceptable level of risk children can be exposed to before the state becomes involved.    To me, the answer can only come from some kind of utilitarian calculation, though I’m not sure what kind.  Taking the kids in the car is a risky activity where the benefits seem to justify the risk; putting the kids in a race car do not.  Swimming with the kids is reasonable; high water rafting is not (I’ve changed my views on this).  Taking the kids on an airplane is worth it; letting them go hangliding is not.  Taking them hunting is worth it; letting them shoot without close supervision is not.

The level of risk is part of this calculation, but the less important part.  There are likely inappropriate activities for kids that involve a level of risk that is not high relative to ordinary risks, like driving down the freeway.  But the key is the benefit from these activities.  Society has the right — indeed the duty –  to set the bounds and parameters regarding what types of benefits justify risks.  Does something like football pass the test?  My guess would be that a technocratic answer would be “NO.”  But a democratic answer will likely be “YES.” As a general rule, I think we have to live with the democratic solution, not the technocratic one, though most regulatory schemes involve a combination.

People who let their young kids drive high-speed motorcyles might get great happiness from this activity, as probably do their kids.  I don’t care.  Is this this same kind of paternalism that libertarians usually hate?  Yes.  But kids rely on the state to be paternalistic when their parents are not sufficiently so.  We should NOT accept promoting child welfare as a justification for every paternalistic policy that do-gooders might think of.  But we should at the least take reasonable measures to keep our kids alive.  And by “our kids” I mean my kids and your kids.  What right do I have to interfere in your parenting? That is not the point.  The point is that your child has every right for me to interfere.

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Ezra Klein of the Washington Post says this about Washington programs:

A $787 billion stimulus? Yes, it was too small. But everything Washington does is always too small.

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The headlines are ablaze with news about the new poverty statistics released by the Census  Bureau.  As Carol Morello notes in the lead to a front page story in today’s Washington Post

In the second year of a brutal recession, the ranks of the American poor soared to their highest level in half a century and millions more are barely avoiding falling below the poverty line, the Census Bureau reported Thursday.

About 44 million Americans – one in seven – lived last year in homes in which the income was below the poverty level, which is about $22,000 for a family of four. That is the largest number of people since the census began tracking poverty 51 years ago.

Is anyone surprised that a deep recession and slow recovery increases the prevalence of poverty? The reactions to the news were predictable. The Obama administration noted that things could be worse: “Because of the Recovery Act and many other programs providing tax relief and income support to a majority of working families – and especially those most in need – millions of Americans were kept out of poverty last year.” And Michael D. Tanner of the Cato Institute noted things are worse: “We’re spending more money fighting poverty than ever before, yet poverty is up. Clearly, we’re doing something wrong.”

Indeed…we are doing a lot wrong.

Obviously, there are many ways to frame the poverty statistics. One compelling story involves race. Another involves family structure. A third involves age. Let’s give consider each briefly, drawing on the Census Bureau report, Income, Poverty, and Health Insurance Coverage in the United States.

Race. Table B-1 provides some striking figures that should give anyone pause. Yes, the overall poverty rate for 2009 was 14.3 percent. But there was incredible variation by race.

  • White non-hispanic poverty rate: 9.4 percent
  • Asian poverty rate: 12.5 percent
  • Hispanic poverty rate: 25.3 percent
  • Black poverty rate: 25.8 percent

It is important to note that the poverty rate for blacks (and Hispanics) has always been a multiple of that for whites. In 2000, after a prolonged economic expansion, the rate fell to a historic low of 21.4 percent. In sharp contrast, the poverty rate for whites has been below 10 percent every year since 1973 except the 1982-84 period. Similarly, blacks and Hispanics have routinely faced double-digit unemployment rates whereas whites have lived largely in a full-employment economy.

We could also tell a story about family structure. We know that there has been a growth in the prevalence of female-headed households with no husband present. One does not have to channel Focus on the Family and present a moral critique.  Even if the gap between male and female salaries is falling (see the above report, page 11), one only needs to accept  that two incomes are better than one.

  • The 2009 poverty rate for “families with female householder, no husband present” was 32.5 percent, roughly 2.3 times as great as the overall poverty rate.
  • Even after the long expansion of the 1990s, the poverty rate for female-headed households was 28.5 percent (approximately twice the level that attracted headlines today)

Of course, the combination of race and family structure is particularly significant. In 2009, black, female-headed households had a poverty rate of 39.7 percent. Hispanic female-headed households had a poverty rate of 40.6 percent

Age. One might also develop a story about age cohorts.  The Census Bureau report (Table B-2) provides a striking picture of this success.  In 1959, the poverty rate for those over 65 was 35.2 percent. It fell steadily over the next several decades from 25.3 percent (1969) to 15.2 percent (1979) to 11.4 percent (1989) and 9.7 percent (1999), reaching a historic low of 8.9 percent in 2009.

In sharp contrast, consider the poverty rate for children. In 1959, the poverty rate for those under 18 was 27.3 percent. It fell significantly in the next decade to 14 percent (1969). Then it increased to 16.4 percent (1979) and 19.6 percent (1989), before declining somewhat to 17.1 percent (1999) and 20.7 percent in 2009.

As we know, our largest entitlement programs provide large transfers to the elderly, who effectively mobilize to secure benefits. These transfers have had a remarkable impact in reducing the poverty rates. The figures for children likely reflect a number of factors, including changes in family structure (see above). But there is evidence that for every dollar that the US government transfers per child, it transfers $8.12 per elderly citizen. Much as one might expect, these decisions carry significant consequences.

There are undoubtedly other stories to tell. For example, one might focus on the decline of manufacturing (as Pat Buchanan might note) and the lack of high-wage service-sector jobs for those with lower levels of educational attainment. We might focus on the failure of public education in the US, particularly as it serves African American and Hispanic communities. In the end, the poverty statistics reflect the complex interplay of a host of factors.

As Tanner notes: “Clearly, we are doing something wrong.”

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Big Government’s Latest Expose

Think what you will of Andrew Breitbart as a person, but there’s no question that his Big Government site has succeeded in exposing the dirty underbelly of D.C. politics in a way that the mainstream media appear afraid to touch. The Eleanor Holmes Norton audio recording, in which she solicits a contribution from a lobbyist while mentioning her work in the committee “in your sector” and her “surprise” at not having previously received a contribution, is apparently genuine, as she is now trying to spin the practice of shaking down lobbyists as “standard.” For political scientists who study interest-group politics, it is now conventional wisdom that politicians are just as “entrepreneurial” as lobbyists, seeking out contributions backed by implicit threat of legal retribution. But the dirty reality of the practice needs to be aired out in public as much as possible.

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If you’ve read Robert Heinlein’s science fiction novel Starship Troopers (not the terrible movie better known for its mixed-gender shower scene than its cinematic quality), you may remember that in his fictional world the right to vote is granted to only those who have served the state.  Military service, in particular, won veterans the vote. 

Fortunately, such a regime is not a real possibility here in the U.S.  But along comes a well-intentioned plan to allow military members under 21 to drink at certain spots on base. 

According to Stars and Stripes:

Rep. Jack Kingston, R-Ga., introduced legislation recently which would allow servicemembers as young as 18 to enjoy alcoholic drinks at restaurants or clubs on any stateside military base. The bill would not allow anyone under 21 to buy carry-out cases of beer from base stores or allow younger troops to keep beer in their barracks.  This isn’t the first time the idea has surfaced. Several states have pitched lowering their drinking ages to reward troops for their service. Kingston told the Florida Times-Union that military leaders have backed the idea in private, and he thinks the movement could gather wider support. 

Although I’m sympathetic to the idea that it is silly to allow men and women to go risk their lives in places like Afghanistan while denying them a well-deserved and satisfying brew, I think this policy is ill-suited to a liberal democracy.  In such a regime, the military is supposed to be subservient to civilians and not placed above them in any legal way (unrelated to their job as managers and applicators of violence).  This policy would, contrary to this norm, create an invidious distinction that suggests those who serve have a greater claim to certain rights than others and would only increase the notion widely held in the military that they are superior to other citizens. 

Fortunately, the idea is likely to go nowhere, like mixed-gender submarines and showers.  This is especially the case since the latter-day prohibitionist group, Mothers Against Drunk Driving, has “blocked such moves in the past.”

A better policy would allow states to decide on their own when to allow young adults to drink.  If we are going to have a national policy (which we effectively have given how the federal government has attached strings to highway funds), how about simultaneously lowering the drinking age and raising the age at which one can vote and join the military (given what we know about brain development)?  Or as I’ve said earlier, how about having a graduated drinking age like states have with driving — you can drink beer and wine at age 18 but not hard liquor (though this could just cause people to drink more beer to achieve the same desired result, just less efficiently)? Or if we don’t think 18 and 19 years olds can handle a beer in their hand, maybe we shouldn’t let them hold a ballot or M-16 either (and thus we can just raise the age for voting and military service to 20 or 21?).  The current drinking regime is not optimal – so let’s allow states to experiment with different policies.

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I used to read Andrew Sullivan pretty religiously….before he started to become absolutely fixated on a few subjects and grew quite boring.  I still checked his site out on occasion until he started to engage in weird (and offensive) Sarah Palin conspiracy theories, and I haven’t been back since.  Despite only reading half the Welch-Sullivan debate on TARP (so I won’t comment on the merits of that particular scuffle), I did want to share Matt Welch’s (of Reason) sensible argument against Sullivan-esque “pragmatism.”  I’ve had to deploy a similar argument in the past, so I naturally loved his admittedly funnier version (which one could also employ against David Brooks too):

While I don’t begrudge Sullivan or anyone else adapting their political and economic views to changing circumstances (or even just for the hell of it), I’d find the arguments a lot more persuasive if he (and they) dropped the pretense that it’s only their opponents who are being ideological in any given debate. Do-something mentality, “pragmatism,” and deference to power can all be just as ideological as libertarianism, even if they don’t have their own seven-syllable descriptors and bad taste in prog-rock. More pressing to the matter at hand, they can be wrong, and they usually hold the power. It’s gonna take more than the absence of bread lines to make me believe this particular P.R. campaign.

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Ideas and the Right

It is said with much confidence lately that the so-called “Right” is bereft of ideas, especially compared to the twenty year period from, say 1962-1982.  There is something to the relative part of the argument – but that is because the earlier period was so rich with proposals and ideas to lay out a new course following the (sorta) decline of the New Deal consensus.  However, that does not mean that there aren’t a lot of interesting and thoughtful ideas bubbling up on the Right.  In other words, in absolute terms, ideas aren’t dead amongst conservatives and libertarians. 

Case in point - the first 10 minutes of my day.  I started by seeing and reading (in establishment sources) an innovative proposal by Randy Barnett and William Howell (the Speaker of the Virginia House of Delegates) to invigorate federalism and increase democracy by enacting a constitutional amendment to give the states the right to repeal federal laws or regulations.  Then I saw a new policy paper that explains the problem with mandating derivatives and proposes the use of an auction mechanism instead.  And I hope I can find some time this weekend to look at Rep. Paul Ryan’s “A Roadmap for America’s Future.”  I’m sure another ten minutes would produce other examples since my morning today wasn’t all that atypical from other days perusing the landscape of ideas on the Right.

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Dan Ariely describes an experiment in which he and colleague solicited essays from four websites dedicated to helping students cheat, paying between $150 and $216 for each. The essays were for a hypothetical social psychology class. All four essays were terrible — real F-quality material even if the student weren’t caught. Richly, two of the essays themselves were plagiarized from other sources, but the websites would not refund their money.

He concludes, “I think that the technological revolution has not yet solved students’ problems.  They still have no other option but to actually work on their papers (or maybe get help in the old fashioned way and copy from friends).  But I do worry about the existence of essay mills and the signal that they send to our students.”

It strikes me that this particular technology will probably never come. The reason is that the students most interested in buying their essays online are going to be the worst students. They’re probably not going to know the difference between a good essay and a poor one, and they probably aren’t even conscientious enough to review thoroughly the essay they receive. This is one market in which we professors can be thankful for the problem of asymmetric information.

HT: Steve Saideman

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Sara Murray (Wall Street Journal) has an interesting piece, “Obstacle to Deficit Cutting: A Nation on Entitlements.” The lead paragraphs lay out the problem:

Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.

At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

This should come as no surprise. We are in a deep and prolonged recession and one would expect a greater reliance on unemployment, Medicaid, TANF, and food stamps. But there is also a long-term trend in entitlements that is being driven by demographics and changes in policy (e.g., the recently passed healthcare reforms that will extend subsidies to another 19 million Americans by 2019).  As Murray correctly notes: “despite occasional bouts of belt-tightening in Washington and bursts of discussion about restraining big government, the trend toward more Americans receiving government benefits of one sort or another has continued for more than 70 years—and shows no sign of abating.”

Payments to individuals—a budget category that includes all federal benefit programs plus retirement benefits for federal workers—will cost $2.4 trillion this year, up 79%, adjusted for inflation, from a decade earlier when the economy was stronger. That represents 64.3% of all federal outlays, the highest percentage in the 70 years the government has been measuring it. The figure was 46.7% in 1990 and 26.2% in 1960.

Data presented in the article reveals that US households claim a far smaller share of their after-tax income from government (9.4 percent) than do other nations (e.g., the OECD average appears to be around 20 percent). Obviously, demand for government services varies widely across nations and nations with different levels of social provision do just fine. The real problem seems to be that the US has developed a greater demand for entitlements while retaining its historical aversion to taxation.

There were times in the recent past when elected officials could paper over this demand for high levels of spending and low levels of taxation by simply claiming, in the words of Dick Cheney, that “deficits don’t matter.” But after almost two years of the Obama administration, the GOP is stepping into the 2010 midterms and the 2012 presidential election with a different message: deficits and debt do, in fact, matter.

After the polls close, one wonders whether elected officials will have the will to follow through in reducing spending and/or increasing revenues to prove that fiscal responsibility is more than a convenient campaign theme. Regardless of the technical justification, the political electoral costs could be significant. I could issue my own predictions (and who would be surprised).

Regardless, the Murray piece is worth your time.

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In the 2008 Election, Obama beat McCain in Delaware by 25 percentage points.   Delaware is a blue state.  It is always going to be a blue state.  Any Republican who is going to maintain office in Delaware is going to have to be a centrist candidate who appeals to independents and conservative Democrats.

It can be safely said that Christine O’Donnell is not such a candidate.  She is surging in the polls and has the endorsement of Tea Partiers.  It looks like she might upend moderate Mike Castle in the Republican primary, who at least has a whisper of a hope in winning and maintaining a US Senate seat in Delaware.   Even in this anti-Democratic year, O’Donnell has little chance of winning this year, and zero chance of maintaining the seat without an ideological transformation (either by her or the state).

So conservative Republicans in Delaware  have to decide whether they want to make a statement or whether they want to have a chance of gaining this seat in one of the few chances they will ever have to do so.  Conservatives are giddy about their chances across the country with good cause.  But anyone with a drop of sense knows this election isn’t about conservatives taking over the hearts and minds of the country.  Our nation is one that voted two years ago for Barak Obama.  Republicans in control of the Congress are not going to make the ordinary voter much happier about her government than the Democrats do right now.  In short, it ain’t gonna last!  10 years from now the Tea Party will be a distant memory, much as Ross Perot’s Whatever that Was Called Party from the 1990s.

So conservatives (and right-libertarians) are going to have to decide whether to vote with their heads or their hearts, to vote strategically or passionately.  Of course I’m well aware the dilemma here.  A single voter has no discernible effect on the outcome, so why not vote with your passion?  I can’t resolve here the disconnect between group strategy and individual incentives, other than to say that, as a  group, conservatives in Delaware are completely nuts if they vote for O’Donnell.

I’m not a paid political hack for Castle, would probably much prefer O’Donnell to Castle if I had the choice, and  know little about Delaware.  But I can interpret a 25 point advantage.  So, my Delaware friends, you live in a blue state.  Deal with it and don’t be idiots.

The logic is obvious, but I’m not optimistic.

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Economics Meets Nashville

While I prefer the Rap-Economics nexus, Merle Hazard offers up some fine country tunes about economics here

HT: Mankiw

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As you may remember, President Obama instigated no small amount of controversy last year over his campaign speech to school children celebrating himself hard work.  The most disgusting part of the whole thing, though, was the recommended teaching materials put out by the Department of Education that originally included asking students to write letters “about what they can do to help the president.”  The ultimate version was not much better, including lesson plans that are a bit much.  For example, one suggested that teachers “build background knowledge about the President of the United States and his speech by reading books about presidents and Barack Obama.”  Can you say “cult of the presidency“?

In a short video posted here, Gene Healy and Neal McCluskey discuss why this particular speech was problematic. 

I’m of two minds on the basic matter of whether presidents and other politicians should address school children.  It is certainly good for children when prominent and upstanding members of the community (pretty sure most politicians don’t meet both halves of this standard, but I’ll give the current president the benefit of the doubt) encourage and model appropriate and exemplary behavior.  

However, I am deeply troubled by the way in which politics creeps into every nook and cranny of our world, leaving little space for us to breathe the fresh air of private life.  This would include temporal space, namely childhood. 

Therefore, I have a problem with the idea of having the President invade the (relatively) innocent realm of our grade schools to give speeches that are bound to be political or politicized (or alternatively trite and thus serving no function) no matter who is in the White House.  So in the final analysis, I guess I’d prefer that presidents stick to adult messaging (or better yet, turn away from the “rhetorical presidency” model altogether) and leave behavior modeling to parents and others in the community.  At the least, this type of activity should be reserved for middle and high school audiences as children in these grades are able to appropriately analyze such speeches in a thoughtful and critical fashion.  When pre-K through 5th graders are included, such speeches ring of indoctrination of the worst kind. 

I bring this up a year later because President Obama is set to deliver another school speech this week.  I found out about it when my child – a kindergartener – came home with this (see below) note asking whether the child has my permission to attend the address (at least the school asked, which it doesn’t – I’m sure - when they indoctrinate children with the new environmental religion):

 

Despite my dislike of such political events, is it really best for my child to bar him/her from participation?  Isn’t is pretty likely that the content of the speech - especially in an election year – will be pretty harmless?  Moreover, do I want the teachers and administrators to treat my child differently if they are offended by my decision?  Is it really worth it?  On the other hand, do I really want the school to think it can get away with teaching whatever it wants without any pushback from parents like me who have to hold their nose (because the cost of alternatives where I live is too great) just to send their kids to public schools in the first place?

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Another bizarre case of town government versus the property owner.

DEKALB COUNTY, Ga. — DeKalb County is suing a local farmer for growing too many vegetables, but he said he will fight the charges in the ongoing battle neighbors call “Cabbagegate.”

Fig trees, broccoli and cabbages are among the many greens that line the soil on Steve Miller’s more than two acres in Clarkston, who said he has spent fifteen years growing crops to give away and sell at local farmers markets.

For my own, briefer and less stressful encounter with town government, see here, here, and here.

HT: Our esteemed ringleader, Grover Cleveland.

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Tomorrow my current and future states of residence are holding primaries. In New York the Republican gubernatorial contest has generated quite a lot of controversy, even though the nominee is likely to lose to Andrew Cuomo, while I’ve heard almost nothing about the special senatorial contest, even though that nominee has a fair shot at unseating Kirsten Gillibrand. (There’s also a regular senatorial election that incumbent Chuck Schumer is a shoo-in to win, but the special election for the other seat should be much closer.) The top two Republican candidates for governor are downstate politician Rick Lazio, who lost to Hillary Clinton a few years ago, and Western New York developer Carl Paladino, who has tried to assume the “Tea Party” label. Paladino, however, is no libertarian, arguing for the use of eminent domain to stop the Park 51 mosque and for state-provided (voluntary) collective housing for welfare recipients. Recently he has been cosying up to the political establishment, causing even Tea Party types to despair of him. The Libertarians will run a candidate in the general election. Democratic nominee Andrew Cuomo has made some noises about budget and labor law reform, but my default rule is always to vote against attorneys general. In the Republican senate campaign, economist David Malpass seems like the least bad option from a libertarian point of view.

(more…)

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Grover’s post about the 17 potential presidential hopefuls presents former Speaker New Gingrich as a member of the A-team.  Newt has always been a source of entertainment (remember the tyrannosaurus skull he had moved from the Smithsonian to the Speaker’s Office).   Now that he has ratcheted up his interviews and speeches (undoubtedly as a effort to move to the top of the A-team), we are again being graced with his unique observations. A few lines from a recent interview with National Review is attracting a fair amount of attention (e.g., see Sam Stein’s piece in today’s Huffington Post):

“What if [Obama] is so outside our comprehension, that only if you understand Kenyan, anti-colonial behavior, can you begin to piece together [his actions]?” Gingrich asks. “That is the most accurate, predictive model for his behavior.”

“This is a person who is fundamentally out of touch with how the world works, who happened to have played a wonderful con, as a result of which he is now president,” Gingrich tells us.

“Keynan anti-colonial behavior?” Ah yes, the Mau Mau, secret societies, blood oaths, violent machete attacks.

All of this led me to reach to my book shelf to get my hands around the 1995 classic Newt Gingrich, To Renew America. Here Newt presented the core argument for the contract with America. Part of his discussion is on the merits of privatizing space exploration. Yes, yes… privatization is good. But Newt’s expansive mind often moves toward dimensions that many of us  would miss. Consider the following quote from page 192:

I believe that space tourism will be a common fact of life during the adulthood of children born this year, that honeymoons in space will be the vogue by 2020. Imagine weightlessness and its effects and you will understand some of the attractions.

Whether Newt’s imagination turns to the Mau Mau uprising (one can see him pondering whether Obama would seek to make Mashujaa Day a national holiday in the United States) or all the interesting sexual positions one could sample without the constraints imposed by gravity, we know two things for certain: his imagination is fertile and his capacity for self-censorship is limited.

Let the political season begin.

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Paul Bedard of U.S. News and World Report lists 17 potential Presidential hopefuls on the Republican side.  John Bolton…. are you kidding?  And aside from the neocons and some over at National Review, do conservatives really “adore” him?   

A bit too early to do serious horserace stuff.  Is it me, or does Daniels stand out from this crowd?  More admittedly too early Republican nominee chatter forthcoming…

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Quote of the day

From Ol_Roy (whoever that is):

Koran burning canceled. Bible burning, flag burning, decapitations on internet, women stoning, bombings, terrorism proceed as scheduled.

(HT: Jim Geraghty)

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