Archive for December, 2011

Bill Moyers – No Choir Boy

Interesting post on the Chronicle of Higher Education’s blog by one participant in the “skirmish” between Mark Bauerlein and Bill Moyers concerning the latter’s (well-known?) dirty tricks.  Here is one segment:

The skirmish began when I cited current discussions in early 2009 of a dirty trick Moyers had played while serving in LBJ’s administration, specifically, a search for any homosexual scandal among Barry Goldwater’s staff. The act certainly undermined Moyers’ persona as a figure of conscience and justice, a character he had successfully presented in many years of television work.

See here for the whole thing.  BTW, Moyers is yet another mark against PBS.

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Many political scientists believe, following Mr. Dooley, that the Supreme Court is impacted by election results and public opinion.* For example, Roy Fleming and Dan Wood find in an American Journal of Political Science piece “that public opinion directly affects decisions by individual members of the Court.”  Moreover, they “show that the result holds across various issue areas, is not restricted to only a few justices, and that the justices’ responses are relatively quick with a lag of only one term.”** Likewise, Kevin McGuire and James Stimson in the Journal of Politics show that “public opinion is a powerful influence on the decisions of the Supreme Court.”

Of course, the extent to which such external influences matter is vigorously debated and these findings only represent half of the debate.  Nonetheless, it does make me wonder whether a Romney victory in the Republican nomination contest will send some signal to the Supreme Court that they will take into account when they determine the constitutionality of ObamaCare.  In particular, will Justices Kennedy, Roberts, and Alito – all of whom may be less motivated by personal preferences and jurisprudential arguments than their peers – be more open to voting in favor of ObamaCare given the signal that a Romney victory sends about the salience of the issue among even its putative detractors in the Republican primary voting pool?  Consistent with the literature cited above, a Romney victory may give these justices some sense that a positive vote will not impair the Court’s standing in the public since Romney himself did not suffer extensively from his support for a similar plan at the state level.

A Romney nomination could be an important signal in this way since a potential marginal Court member may be concerned about supporting ObamaCare in the face of a pretty solid majority opposed to that legislation (again, assuming that public opinion influences how justices think and behave).  Seems like yet another possible reason for Republican voters to vote for an alternative to Romney (and to a lesser extent, Gingrich, who supported RomneyCare until very recently).         

* In an amusing piece that can be accessed here, a group of political scientists show that Supreme Court justices have also bet on election results! BTW, note the not so subtle political bias of the writers. I wonder if such banter from conservatives would so easily slide through the review process of even this relatively less serious academic journal.

** Roy B. Flemming and B. Dan Wood.  “The Public and the Supreme Court: Individual Justice Responsiveness to American Policy Moods.” American Journal of Political Science   Vol. 41, No. 2 (Apr., 1997), pp. 468-498.

*** Kevin T. McGuire and James A. Stimson.  “The Least Dangerous Branch Revisited: New Evidence on Supreme Court Responsiveness to Public Preferences”   The Journal of Politics , Vol. 66, No. 4 (Nov., 2004), pp. 1018-1035.

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2011 Surprises

It has been an odd year. As I look back at my journal entries from the beginning of the year, I reflected on some of the surprising events of the past twelve months.


Domestic Politics

  • The retirement of Barney Frank (I would have bet that they would have had to carry him out in a box decades from now)
  • The weakness of the Republican field for the Presidency (given the poor economy and the President’s low approval ratings, one might have expected far more).
    • Relatedly, the resurrection of Newt Gingrich (consulting historian and futurist) and Herman (“Imagine There’s No Pizza”) Cain
  • The tragic attempt to assassination Gabby Giffords and the stunning strength she revealed in her recovery
    • Relatedly, the failure of Democrats to use this event to frame the case for additional gun controls.
  • The Congressional Republicans ability to raise to an art form the snatching of defeat from the jaws of victory (Case 1: the extension of the payroll tax cut)
  • The fact that President Obama would stop idolizing Franklin Roosevelt and begin idolizing the vile Teddy Roosevelt


International Politics

  • The Arab Spring and the collapse of the Gaddafi regime
  • The drawdown in Iraq (who would have guessed that we remembered how to end wars)
  • The expansive use of drones and the deafening silence over their use to execute US citizens
  • The Orwellian term “kinetic engagement” and the media’s willingness to swallow it.


  • The actual retirement of Brett Favre (who would have guessed that this time was for real)
  • The Packers winning the Super Bowl (as a Wisconsin native, I always expect the Packers to fail)
  • The collapse of the Colts
  • Tim Tebow (yawn)

I am sure I missed a few big surprises. Any serious omissions?

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Former governor of New Mexico Gary Johnson is still running for President but has bolted the Republican Party for the Libertarian Party.  If Johnson is running for the sake of principles rather than ego or other self-interested motivations, this decision is a wee-bit premature. 

Sure, Johnson was treated horribly by the Republican establishment and the media.  And if he gets the LP nomination and hurts the Republican candidate in an important Electoral College state, the GOP has no one to blame but itself for not treating him well enough to keep him in the tent.

However, Johnson doesn’t even know yet who the Republican nominee will be and whether he’d actually prefer Obama to that candidate – since he will not win the White House, will almost certainly siphon off more GOP voters than Democrats*, and thus potentially throw a close election to Obama (see Ralph Nader 2000 in Florida for one recent case – though this is a lot less solid than what you might think if Dartmouth and UCLA profs Michael Herron and Jeffrey Lewis are right about the pair-wise preferences of Nader voters). 

The siphoning effect is likely to be highest if the Republican Party nominates someone perceived to be more statist like Newt Gingrich or Mitt Romney and lowest if the party selects John Huntsman or Ron Paul (indeed, the LP vote share might plummet in the latter case).  Now I could see someone like Johnson not really caring whether you get the candidate of RomneyCare or President ObamaCare.  But would Johnson really like to hurt a Paul or Huntsman candidacy?  If he were the marginal voter, would he really pick Obama over either of those two – or even Romney given what is at stake (hello, Supreme Court seats)?  And if he wouldn’t do that as the counterfactual marginal voter, why would he want to have that potential effect as a candidate? 

Of course, it is very likely that Gingrich or Romney will get the Republican nod and so Johnson might just be gearing up for that eventuality.  But I would have liked him to let things play out a bit before throwing his hat back in the ring.  Indeed, I would have liked to have seen him depart the race while endorsing Huntsman or Paul rather than bolting the party.  This would have helped his views/positions in the current fight within the Republican Party and given him an opportunity to move the ball in the right direction within a future Republican presidency should his candidate (say Huntsman) win.

I suppose an LP libertarian or Johnson himself could argue that his candidacy will be more high-profile than most LP nominees and could cause the eventual Republican nominee to position himself in a way to combat the siphoning effect.  In other words, he could make the Republican nominee pay attention to libertarian issues.  But I’m doubtful that this will be the case in any meaningful sense for policy outcomes (even if campaign rhetoric changes marginally) and thus worry that the risk of swinging the election is more likely than any real reward.

A couple of other things about Johnson’s decision:

1.  Johnson noted in his campaign launch e-mail that he opposes “expensive foreign wars in places like Libya and Afghanistan.”  However, as I noted a while back, he isn’t pure when it comes to advocating foolish, other-regarding military interventions.  In particular, he supported the recent US military intervention in central Africa and suggested he might consider it wise/just in the case of Sudan as well.  I guess these aren’t ruled out because they aren’t expensive (?!) – which is hard to say ahead of time given the possibilities of blowback and the almost inevitability of mission creep.  

2.  Johnson is a pro-choice libertarian and noted this as one of his key policy positions.  As I argued earlier, a libertarian need not be pro-choice (or pro-life) by definition and thus many libertarians will be turned off by Johnson’s position (which may suggest less siphoning than you might get otherwise).     

3.   Johnson notes, “I support marriage equality for gay Americans as required by the Constitution.”  What does he mean by this, and does this make him a libertarian centralizer as opposed to an advocate of more thoroughgoing federalism as a bulwark for liberty and the principle of subsidiarity? And regardless of whether marriage equality is the right position, is it indeed required by the Constitution?

*Along with other data, David Boaz and David Kirby show the Republican-leaning nature of libertarians by noting that in 2008, John McCain outpolled Barack Obama by 71 to 27 percent among libertarians.

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David Brooks has an interesting piece in today’s NYT (I must admit, he has written more than a few fine columns this year).  He notes that the Obama administration assumed office drawing on parallels to the Great Depression and FDR. It has since abandoned this historical analog and turned, instead, to the Progressive Era. The remainder of the column argues quite persuasively that there are few useful parallels to be found here.

A teaser:

One hundred years ago, we had libertarian economics but conservative values. Today we have oligarchic economics and libertarian moral values — a bad combination.

In sum, in the progressive era, the country was young and vibrant. The job was to impose economic order. Today, the country is middle-aged but self-indulgent. Bad habits have accumulated. Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.

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A career in the toilet

Noticed the following groundbreaking story from The Hill today:

Rep. Laura Richardson (D-Calif.) has proposed legislation that would let fire stations around the country apply for grants of up to $100,000 to build women’s restrooms, showers and changing facilities.

The Fairness in Restrooms Existing in Stations (FIRE Stations) Act, H.R. 3753, says these grants would help promote gender equity in fire houses. The findings of the legislation says most were built with a “single-gender workforce” in mind, that 50 percent of all fire departments do not have any women employees, and that women make up just 3.7 percent of all firefighters.

One has to wonder about the Congresswoman’s sense of priorities.  Really, she wants this to be her issue.  This is what Congress should be spending time debating, since there aren’t more pressing problems?  It is barely worth my time to even mention, and I’m not being paid by the citizens of California to represent them in Congress.

But, more importantly (and I doubt something that has never for a second entered the Congresswoman’s mind): why is this a federal issue?  The US federal government should concentrate on what kind of bathrooms municipalities have for their public service employees?

How does a member of Congress have the luxury of spending time on this kind of crap?  Well, when your district voted almost 80% for Barak Obama in 2008, you don’t have to worry about Republicans.  Or, for that matter, common sense.

[Sidenote: In November, the House Ethics Committee, composed of five Democrats and five Republicans, voted unanimously to investigate Richardson related to possible illegal use of staffers.  She responded that she is being targeted because she is African-American.  Even Californians deserve better than this.]

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Christmas Story Politics

It is difficult to be surprised anymore when you see politics seep into every nook and cranny of our lives.  However, it was still a bit jarring when my wife showed me a Christmas children’s story that revolves around politics. 

The book in question is David Davis’ Librarian’s Night Before Christmas.  I highly recommend against indoctrinating your children with this tract – though the author certainly has to be credited with entrepreneurialism (of the worst kind) by writing a book that librarians all around the country were probably falling over themselves to buy.

The book begins with a public librarian shelving and mending books on overtime since “the powers that be” cut the library’s staffing budget (the horror).  Of course, the saintly librarian cheerily fulfills the public’s needs anyway (what public servant doesn’t?) and then wonders if the love of “great books” has “come to an end” (as if the classics aren’t available anywhere else, not to mention that the great books section of contemporary public libraries is a tiny fraction of their collections). 

Well, fortunately, Santa arrives and saves the day as he and his elves resupply the library with classics such as Hawthorne and Austen as well as children’s books and romance novels.  Of course, Santa also chides “a censor, who wished some books gone” (forgetting of course that even those who typically want to prevent libraries from buying certain books with public funds aren’t arguing for censorship).  Saint Nick, alas, has no way to deal with the problem of the “book-budget cutters” “Cause if they could read, they just read Ayn Rand” (since only a knuckle-dragging idiot would want to limit public expenditures on libraries)!  Then Santa takes off calling for people to do a good deed and teach others to read.                  

There is one virtue of the book: it mocks politicians for pork-barrel spending.  However, there is no realization that a lot of library spending is really just middle and upper class welfare.  In particular, public libraries fund private entertainment and research – so is it really that much more noble than typical pork barrel spending?  In the case of this book, Santa doesn’t deliver non-fiction books or government documents that would educate citizens about government – and thus could be justified within a classical liberal framework.  Instead, Santa delivered romances for one of the citizens, Molly McNast.  Isn’t this kind of targeted private entertainment what the library would have done with public funds if it hadn’t been for the nasty budget-cutters?  And can this really be a proper end of our tax dollars (remembering that they are coerced, not volunteered)?

I think a classical liberal could justify the existence of public libraries that function as repositories of government documents and contain basic books on government, history, philosophy, economics, and history.  These would be justified on the grounds that a democracy requires a citizenry that has the basic knowledge requisite to be self-governing.  Much of this could now be provided by a few computer terminals hooked up to the web.  In the same way that publicly funded education can be justified, a robust children’s section could also be warranted so as to encourage basic skills formation (though the library should be colocated with a local publicly funded school so as to avoid double spending). 

However, I see no way, consistent with a free society, to justify the majority of what is contained in our public libraries today.  These places are filled with rows of fiction (romances, horror, etc), trashy magazine, and even DVDs of recent blockbuster films!  There certainly isn’t a market failure argument for why these should be publicly provided – only a welfare argument that can’t fly in a truly free society.  Indeed, the paternalist variant of welfare statism might insist that the public provide only those things that raise up the least well-off rather than pandering to baser tastes such as Fabio-adorned romance novels, Cosmopolitan magazine, and morally questionable movies such as Natural Born Killers.   Unfortunately, library collections today are decidedly low brow while sometimes even lacking that which could be justified in a free society.

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Ron Paul

While the WSJ is attacking Paul’s foreign policy (see Grover’s post), the NYT has an interesting piece by Timothy Egan entitled “Soldiers’ Choice.”

Money quote:

This year, Paul has 10 times the individual donations — totaling $113,739 — from the military as does Mitt Romney. And he has a hundred times more than Newt Gingrich, who sat out the Vietnam War with college deferments and now promises he would strike foes at the slightest provocation.

What seems, at first blush, counterintuitive makes more sense upon further review. There’s a long tradition of military people being attracted to politicians with Paul’s strict interpretation of the Constitution.

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In the contemporary American political scene, “conservative” attacks on those critical of American foreign policy are “dog bites man” kinds of stories since they happen so often and so reflexively on the Right (as we saw last week with National Review).  But this one by Dorothy Rabinowitz is particularly bad and is reminiscent of the kind of nasty attacks that “isolationists” (who are properly called advocates of “restraint,” “strategic independence,” or “off-shore balancers”) have frequently been subjected to by the foreign policy establishment over the last half century.  Here is Rabinowitz at her lowest:

One [Paul] who is the best-known of our homegrown propagandists for our chief enemies in the world. One who has made himself a leading spokesman for, and recycler of, the long and familiar litany of charges that point to the United States as a leading agent of evil and injustice, the militarist victimizer of millions who want only to live in peace.

And just to make sure we get it, she repeats herself with this:

It seemed improbable that the best-known of American propagandists for our enemies could be near the top of the pack in the Iowa contest, but there it is.

Too bad she doesn’t actually engage his arguments in a serious fashion.  Then we’d have a real debate on foreign policy.  Better to just cast aspersions and suggest he is a Fifth Columnist, I suppose.  What really ticks me off is that Paul is a veteran who, according to Wikipedia, “served as a flight surgeon in the United States Air Force from 1963 until 1968.”  I wonder what Rabinowitz’ favored candidates were doing for their country when they were young men?!

Sad to see since I frequently enjoyed seeing Rabinowitz on some of the Wall Street Journal editorial shows on cable when I was a younger man.

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George Will v. Newt Gingrich

George Will is just getting better with age.  Below are some nuggets from his excellent column today skewering Newt Gingrich’s recent thoughts on the courts.  I recommend the whole piece.  As we’ve noted before on Pileus, Gingrich is no consistent friend of liberty.  In a pair-wise comparison, Romney is almost certainly the lesser of two evils (and I use that term not quite literally but not entirely figuratively either). 

Our readers seem to agree given the result of this Pileus poll.  

I just can’t believe that those who would like to see a big yellow Ryder truck at the White House have these two guys at the top of the polls to choose from – and that Romney is likely to emerge as the “sensible” alternative!!!  The Republican Party has really failed conservatives and libertarians in their ranks.  It is extremely unlikely that there will be a brokered convention; it is usually just a fantasy of political nerds.  But that would be one way to get someone on the ticket who isn’t currently in the race.  And given the rules on delegates, every vote for someone other than Romney or Gingrich makes this one-in-a-million possibility more likely.  But even if that led to a Romney win anyway, such a result would make it more likely we could see a “Secretary of the Treasury Ron Paul” or something even better (since even I would have mixed feelings about Paul in that position).  But remember, a brokered convention is a fantasy with a capital F.  Still, institutions matter…and the delegate rules this year make for some interesting possibilities in terms of pre-election coalition building.

On to the quotations from Will:

Judicial deference to majorities can, however, be a dereliction of the judicial duty to oppose actions irreconcilable with constitutional limits on what majorities may do. Gingrich’s campaign against courts repudiates contemporary conservatism’s core commitment to limited government.  [snip]

Gingrich’s unsurprising descent into sinister radicalism — intimidation of courts — is redundant evidence that he is not merely the least conservative candidate, he is thoroughly anti-conservative. He disdains the central conservative virtue, prudence, and exemplifies progressivism’s defining attribute — impatience with impediments to the political branches’ wielding of untrammeled power. He exalts the will of the majority of the moment, at least as he, tribune of the vox populi, interprets it.

UPDATE: Here is a piece on NR that came out today on the delegate rules and the possibility of a brokered convention.  Possible but still not likely.

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Last year I recommended giving a donation in a loved one’s name to a non-profit institution dedicated to the fight for liberty in lieu of a normal present.  Please consider doing so again since these places rely on donations to help them stay afloat.  All of the following institutions are certainly worthy of your hard-earned money and will spend it wisely for the cause of freedom:

1. The Fund for American Studies

Given its sponsorship of Pileus and many other great programs, this is a no-brainer! But I’m anything but an unbiased observer, so caveat emptor.  TFAS does a wonderful job helping young people understand the importance of individual liberty, the rule of law, and free markets.  Its talented staff is committed to the principles and values that made America such a great place and one worth fighting to save today.  TFAS also recognizes the importance of spreading the good word of freedom to foreign students who are American in spirit! 

2. The Cato Institute

One of the key pillars of the libertarian movement. It does great work and has top shelf intellectuals on staff. If you care about libertarian ideas getting attention in the imperial capital, this is the place to support. Cato is particularly important for keeping alive the anti-interventionist tradition in foreign policy. I can’t think of another place in Washington that howls so articulately against the misguided policies preferred by the American foreign policy establishment.  Plus Cato Vice President Christopher Preble was our first guest blogger at Pileus (see here, here, here, here, here, and here).

3. The Institute for Justice

The IJ is the ACLU for folks who respect the entire range of freedoms and understand that economic freedom and personal freedom are not unconnected. It might be the most effective libertarian institution in the country.

4. Foundation for Individual Rights in Education (FIRE)

From everything I’ve read, FIRE does a great job making sure that educational institutions respect individual rights on campus. Students and professors can be bullied by universities, but FIRE exists to make sure that universities remain free-fire zones for rational inquiry.

5. Property and Environment Research Center (PERC)

I came to know PERC back when it was called the Political Economy Research Center. Regardless of the name, PERC is a great resource for those interested in liberty and the environment. These folks know that property rights and markets are critical to a truly sustainable world.

6. Institute for Humane Studies

Introduces and cultivates ideas central to a free society among young people interested in liberty.

* Note that there are certainly more than six great liberty-friendly institutions that I could recommend. However, other than TFAS, I wanted to avoid specifically mentioning ones with which I have a current contractual relationship so as to avoid any suggestion of impropriety. Like most libertarians interested in public policy work, I have been involved with Cato but am not currently on its payroll.

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There has been more than a few groans in response to President Obama’s comments in an interview with 60 minutes. In response to a question regarding his performance thus far, the President stated:

“The issue here is not going be a list of accomplishments. As you said yourself, Steve, you know, I would put our legislative and foreign-policy accomplishments in our first two years against any president—with the possible exceptions of Johnson, FDR and Lincoln—just in terms of what we’ve gotten done in modern history. But, you know, but when it comes to the economy, we’ve got a lot more work to do.”

The editors at 60 Minutes must have had a comparable response, one imagines, since they chose to edit the question out of their segment, only posting it on line (you can watch it here). The WSJ’s take on the President’s claims is worth reading

Whether one approves of the President’s agenda or not, one must admit that there have been some significant accomplishments (beyond winning the Nobel Peace Prize). Whether they will stand the test of time remains an open question. But could anyone other than Mr. Obama conclude that these accomplishments would place him among the top 4 presidents in US history?

One can only imagine that a second term will elevate him above FDR, Johnson and Lincoln. It only took three years to eclipse the likes of Washington, Jefferson, Madison, Jackson, Teddy Roosevelt, Woodrow Wilson, Harry Truman, and Ronald Reagan, to name but a few.

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Ron Paul is still surging. I have an article forthcoming in the next issue of The American Conservative forecasting the New Hampshire primary and the role that participants in the Free State Project and other libertarian activists may play therein. At the time I wrote the article, I made the fairly bold forecast that Paul will score between 15 and 30 percent, likely closer to the former number. That forecast is now looking less and less bold.

Two polls today show Paul in the lead in Iowa: PPP has him at 23%, three percentage points beyond Romney, and Insider Advantage has him at 24%, six percentage points over Mitt. Meanwhile, PPP‘s poll of New Hampshire has Paul at 19%, good for second place behind favorite son Romney. CNN/Opinion Research puts Paul at a record-high 14% nationally, while Gallup has him at a record high for their polls, 11%.

If Paul wins Iowa, which looks like at least a 50-50 proposition right now, then all bets are off in New Hampshire. The conventional wisdom is that a Paul win hurts Gingrich and helps Romney, but if Paul can use a win in Iowa to put a scare into Romney in New Hampshire, where Romney has always been expected to run away with it, Romney comes out badly bruised as well. Mainstream commentators are finally waking up to the possibility that Paul could win Iowa and New Hampshire. Right now, I’d put the probability of that occurrence at somewhere around 15%, but if it happens, it would be an earthquake.

Incidentally, the cross-tabs on these polls are enlightening. In the PPP poll of New Hampshire, Paul’s support among those who are strongly committed is 21%, indicating his firmer base. (Romney, however, is at 41% among firmly committed voters, implying he may be able to limit damages from an Iowa loss.) Paul is viewed overwhelmingly favorably in New Hampshire (53-38), which talking heads tell us is not the case most other places. Paul is the second choice of 49% of Gary Johnson supporters (who pulls in 1% himself), 30% of Michele Bachmann supporters, and 25% of Jon Huntsman supporters. Since Huntsman is doing well in New Hampshire, this seems to confirm my suspicion that to a certain degree he and Paul are struggling over a similar pool of voters. Paul is also the second preference of 23% of Romney voters, indicating the degree to which Paul’s appeal has broadened to moderates and independents. A final point of interest is that Paul is leading the field with 28% among those who view foreign policy or national security as the most important issue in the election.

Paul’s path to victory in New Hampshire, it would seem, would require a win in Iowa and an unexpectedly poor finish for Romney. If Romney’s core supporters started to drift away, Paul and Huntsman could expect to benefit.

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The House seems ready to vote down the Senate bill extending the payroll tax cut for two months while requiring the President to decide on the Keystone XL oil pipeline within 60 days (see coverage here and here). The bill—apparently negotiated with the Speaker’s blessings—seemed to be a strategic coup. Passed (89-10) by a bipartisan majority in the Senate, it seems to work against the dominant narrative of the Republican obstructionism. By extending payroll tax cuts for two months, it would limit the GOP=Grinch meme that will undoubtedly fill the airways. By forcing a decision on the pipeline, it will force the administration to alienate one of its two core constituents: organized labor (which strongly supports the pipeline) and environmentalists (who strongly oppose it). The president wanted to delay a decision until after the election to avoid having to reinforce fissures in his support base.

The House GOP rank-and-file wants a one-year extension to take the issue off of the table until after the elections. At the same time, it wants it paid for via spending cuts rather than tax increases. Speaker Boehner, who supported the Senate bill, seems once again incapable of reigning in the rank-and-file.

There is a strong case to be made against extending the payroll tax cut. Our entitlement programs are already on life support; cutting the flow of revenues will only hasten their collapse. And given the need to reduce the size of the deficit, there is a strong case for spending cuts.

Good politics often makes bad policy. But the political benefits of the Senate bill appear too good to pass up.

Or am I missing something?

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I am no fan of the ‘Occupy Wall Street’ movement, which one or two libertarians notwithstanding, is a gathering of the ‘usual suspects’ on the reactionary left. That said the one virtue of this so-called ‘movement’ has been the attention it has focused on ‘structured inequality’. Most people do not care about the massive inequality between J.K Rowling or the late Steve Jobs and themselves or your average street cleaner but they do care that there may be a self-perpetuating elite (especially in the banking sector) which disproportionately influences the political system and reproduces the current power structure.

Broadly speaking there are two views on how to deal with this inequality. The OWS brigade along with the more mainstream left believe that greater regulation, more political control of markets and higher taxes on the wealthy will rebalance the system, breaking up the existing power structure. They fail miserably however to explain why the wealthy won’t use their current power to find ways of manipulating this increased intervention via continuous rent seeking. Adding yet more interventions and taxes which discourage the formation of new fortunes will simply provide additional opportunities for the current elite to avoid the ‘creative destruction’ characteristic of un-fettered market competition. The Classical Liberal/ Libertarian solution, by contrast, is to dis-empower the interventionist apparatus that enables the wealthy to shelter behind bail-outs and protective barriers of various sorts. Yet, Libertarians also fail to explain why those who benefit from the status quo would give up their privileges in order to return to a genuinely free market model.

In the final analysis, both the leftist and the Libertarian/free market ‘solutions’ to ‘structured inequality’ require a fundamental shift in the climate of public opinion such that the relevant institutional changes can be implemented in spite of opposition from the ruling elite. It is here that the Libertarian solution though unlikely in the current climate, seems much more plausible to me. Once the interventionist state is dismantled it will be very difficult for any individual or group to propose new interventions because it will be glaringly obvious to the general population that special privileges are being sought. The leftist alternative, by contrast, does not propose to dismantle the apparatus of government power but to make sure that ‘the right people’ are in charge of it and the ‘right interventions’ are in place. Yet, it is precisely because voters find it so difficult to tell the difference between ‘good’ and ‘bad’ interventions and between ‘good’ and ‘bad’ politicians that affords the opportunity for rent seekers and crony capitalists to create ‘structured inequality’. The Libertarian model requires no such competence from voters because it dis-empowers the very apparatus of organised coercion that every would-be rent seeker wants and always will want, to control.

Merry Christmas

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Well worth a look, here.  Picture 128 is very tough to handle – made me want to leap up, hug my children, and be thankful that they are alive and well in bed.  But I think those of us who are not pacifists mustn’t shy away from the reality that there are horrible consequences of even justly begun wars fought as carefully as contemporary war has been.

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Rhetoric in the public square often lacks integrity.  To me, nothing is more grating than calling coercion a right.  Unfortunately, this is done all the time (usually by those on the left).

An op-ed in the New York Times today is a classic example.  The headline is “Crippling the Right to Organize” by Stanford law professor, William B. Gould IV.  The essence of his argument is that “three decades of Republican resistance to [the FRLB constitutes] an unwillingness to recognize the fundamental right of workers to band together, if they wish, to seek better pay and working conditions.”

I would challenge Gould to come up with even a single example of a Republican politician who has ever challenged the right of workers (or anyone else) to organize and seek better pay (or whatever else they want).

You see, Gould is not talking about the rights of workers at all.  What he is talking about is the use of state powers to compel employers to participate in collective bargaining, whether they want to or not.  Indeed, most of federal labor law isn’t about rights, it is about coercion.  It is about the loss of freedom of contract, not a gain in anyone’s rights.

When I have a right it implies a duty of my fellow citizens.  My right to speak includes the duty of others not to prohibit my speaking when I do so in a way that respects others’ rights.  It doesn’t, however, obligate others to listen to me, to facilitate my speaking, to allow me to speak (or camp out out) on private property without permission, to obstruct public right-of-ways or in any other manner restrict the rights of others.  Many OWS folks have been to college but failed to learn anything in the process about rights—even as they are screaming about them.

Similarly, my right to organize and associate with whomever I wish for whatever cause I wish does not obligate anyone to pay attention to my organization.  If, for instance, I organize people who play fantasy football to get ESPN to change its options for fantasy leagues, this does not obligate ESPN to listen to my organization.  Of course, they may want to, just as firms may want to bargain collectively with workers.  But my Constitutional right of free association is not abridged because people don’t recognize my association.

[Incidentally, right-to-work laws that prohibit employers from reaching agreements that require union membership for employees are almost as as noxious as those that mandate collective bargaining with unions in the first place.  The firm should have the same right to hire only unionized workers as it does to hire non-unionized workers.]

Perhaps collective bargaining laws make sense on utilitarian grounds.  But those advocating such should be honest enough to admit it.  They should say, “I want to use coercive state power to force companies to bargain collectively because such a policy would be in the public interest.”

Of course this isn’t a good argument, but at least it is an intellectually honest one.  It doesn’t abuse the notion of rights in a way that cheapens the very meaning of the word.

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Wanted to let our friends and readers know that our fellow blogger Jim Otteson will be on Judge Andrew Napolitano’s television show on the Fox Business Network called “FreedomWatch.” It airs nightly at 8pm eastern. Tonight Napolitano will be airing, for the first of three times, his 2011 year-end special called “The Year in Liberty.”  Jim was one of the main guests for the show, appearing in four segments.  I hope you’ll watch and let us know how Jim did!  If he fails to mention Pileus, I understandBut I’ll be really disappointed if he doesn’t mention Adam Smith!

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Honoring Christopher Hitchens

Writer and critic Christopher Hitchens is dead – as everyone who “opened” the internets this morning knows.  I’ve seen a bunch of tributes that seem a bit ill-fitting though certainly kind and highlighting the many positives of his career.  But wouldn’t a Hitchens-style tribute look at things a bit more honestly – and even be critical and contrarian to a fault?  This is the man who wrote a scathing critique of Mother Theresa!  So in honor of Hitchens, a few criticisms to go along with all of the positive things others have said:

1.  It is hard for me to criticize someone too heavily for a life honestly chosen in which the person accepts all of the responsibility and costs of his/her behavior.  But let’s face it, Hitchens was indulgent to a fault who may even have brought about his own premature annihilation through excessive drinking and smoking (assuming he had the squamous cell carcinoma form of esophageal cancer which is strongly linked with such indulgences – though to be fair his father also died of the disease and thus I assume genetics could be involved).  Self-destructive behavior is hard to praise even if freely chosen.

2.  Hitchens supported the Iraq War.  Indeed, he was a cheerleader for liberal interventionism and spent a great deal of time post-9/11 defending what can only properly be called a form of imperialism.  Although he was right to hammer some of the sloppy-thinking anti-interventionists, Hitchens displayed a bit too much casualness about the costs of breaking eggs to make an omelette in Iraq and elsewhere.  This shouldn’t be surprising for someone who was a Socialist, Marxist, and Trotskyite – only disavowing the first late in his life.  Christopher Hitchens – if he was talking about his opponents rather than his allies – might say something over the top about his active support for a war that led to the death of over 4,000 American troops and well over 100,000 Iraqi deaths (many of whom were innocent civilians) like: “Hitchens has blood on his hands.”

3.  Hitchens had a dogmatic faith in atheism that was a bit too intellectually certain for any true skeptic or Socratic thinker.  It was also illiberal as Damon Linker masterfully discussed here in the New Republic (and see here for more on the subject).  As Linker put it in one passage: “the atheism of Dawkins, Dennett, Harris, and Hitchens is a brutally intolerant, proselytizing faith, out to rack up conversions.”

4.  One can learn a lot about a man by knowing his heroes.  Unfortunately for Hitch, they were often people like Che Guevara – whom he considered “a role model” of sorts and whom he cut a lot more slack (even into adulthood) than he did much better human beings like Mother Theresa.  Intellectually, Marx and Trotsky were key.  Enough said there?

5.  Hitchens has been praised greatly for his erudite literary criticism.  And yes, he wrote a lot of wonderful pieces in that realm.  However, his batting average might have been only a bit over the Mendoza line.  Even when relatively healthy, some of his Atlantic pieces were unreadable and suggested a need for serious editorial intervention.  Moreover – and I suppose this is only a point about style – I disliked the personal nature of some of these pieces; I simply prefer reviews and opinion pieces to be more formal though editors more and more seem to want a personal touch and so we all cave a bit.  Nonetheless, it seemed, like his drinking and smoking, to be a bit self-indulgent.


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I had an interesting conversation recently about what were the three or four best all-time readings on political economy. If you could read, or have others read, only a handful of relatively short things, what would they be? That question is surprisingly challenging. Here are the suggestions of my interlocutors:

1. F. A. Hayek’s 1945 “The Use of Knowledge in Society.”

2. Frederic Bastiat’s 1850 “What Is Seen and What Is Unseen.”

Specifically on the topic of property, the suggestion was:

3. David Schmidtz’s 1994 essay, “The Institution of Property.” (This essay has been published in revised form in Schmidtz’s Person, Polis, Planet: Essays in Applied Philosophy (Oxford, 2008).)

I agree that the above articles are canonical, central contributions to the field. They should be included in any “Introduction to Political Economy” syllabus. What else should be included? I will post separately more detailed thoughts about this, including seminal works that challenge the broadly classical liberal worldview. But for now let me list a handful of suggestions.

First, I feel compelled to add something from among David Hume’s essays. He has so many, it is difficult to choose. Perhaps these two together:

4, 5. Hume’s “Of the Rise and Progress of the Arts and Sciences” and “Of Public Credit” (both available here).

I might also add two essays that, though coming from opposite ends of the political spectrum, come to remarkably—and, I think, frighteningly—similar conclusions:

6, 7. Albert Jay Nock’s 1939 essay, “The Criminality of the State“; and V. I. Lenin’s July 11, 1919 lecture delivered at the Sverdlov University under the name, “The State.”

A different list might include books and other longer formats. Keeping with the spirit of this list, however, what else would you include?

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By now, most readers have likely been to the pages of National Review to read the rejection of Gingrich. A far better appraisal can be found at Reason, in a piece by Jacob Sullum entitled “Not Newt: If you’re looking for a profligate authoritarian, Gingrich is your man.”

Whereas National Review case seems a bit thin, Sullum’s is developed in far greater detail and ends with a powerful punch:

Constitutional issues aside, Gingrich’s tendency to think government should subsidize whatever strikes his fancy, whether it’s extraterrestrial colonies, prescription drugs, or alternative energy sources, does not inspire confidence in his alleged fiscal conservatism. On that point the most damning comment I’ve seen recently came from New York Times columnist David Brooks. Last week Brooks, a “national greatness” conservative who believes “energetic government is good for its own sake,” wrote that Gingrich “has no Hayekian modesty to restrain his faith in statist endeavor” and therefore “loves government more than I do.” Yikes.

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National Review was well-known during Buckley’s tenure for taking out the hatchet against those parts of the anti-New Deal coalition he deemed unacceptable.  Most egregiously, NR slandered Ayn Rand horribly when Whittaker Chambers argued: “From almost any page of Atlas Shrugged, a voice can be heard, from painful necessity, commanding: ‘To a gas chamber — go!'”  And this to a supreme individualist who was also a Jewish woman and a refugee of Soviet communism!  Not a shining moment for NR.

Well, that hatchet has been taken off the wall yet again at the flagship journal of American conservatism.  Here is National Review slandering Ron Paul and his supporters last night in an otherwise useful piece warning conservatives from embracing Gingrich:

Representative Paul’s recent re-dabbling in vile conspiracy theories about September 11 are a reminder that the excesses of the movement he leads are actually its essence.

Are you kidding?  The essence of the Paulista movement.  Really?

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Because We Care

With the holiday season in full swing, a couple of health-related items worth thinking about and acting on for better living:

1.  Remember to hand over the keys.  The NHTSA recently released the following drunk-driving data from 2010 (in the US):  “Deaths in crashes involving drunk drivers dropped 4.9 percent in 2010, taking 10,228 lives compared to 10,759 in 2009.”   The good news is that the rate declined to the lowest level since 1949.  The bad news is that too many individuals acted so irresponsibly with their freedom that they violated the ultimate property right of others – the right to life.  So please remember that while libertarians should certainly enjoy their sauce if that is their thing, they shouldn’t risk the lives of others by getting behind the wheel on public-access roads.  Crash on the couch, hand over the keys, or wait out the alcohol in your bloodstream before hitting the road.  Acting irresponsibly only gives the Nanny-staters ammunition for their powerful guns.

2.  30 Minutes!  Mens sana in corpore sano.  So think about doing something active for at least 30 minutes a day.  I’ve been much too inactive over the last two years and have suffered the consequences.  Don’t let inactivity bite you too!

And btw, I have mixed feelings about scolds.  But positive individual and social change is better pushed through argument/information and approbation/disapprobation than the state – and it won’t leave us alone if we fail to live responsibly (matter of fact, it won’t leave us alone if we do live responsibly, but let’s not give it more ammo!).

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Was going to put this in the comments to my 1964 post but it got long enough to add as a new post.  Caveat: it should be read in the spirit of someone very much sympathetic to Paul and many of his policy preferences (especially on foreign policy).

The only scenario for Ron Paul becoming President – which I touched on in the previous post – would be him somehow getting the nomination and then something going absolutely wrong in the country/world such that the public votes him in out of desperation as a vote for change.  FDR was mainstream in 1932 but almost anyone the Democrats ran against Hoover was going to win and have the opportunity to reshape American politics during the crisis.  Paul would need a similar atmosphere in order to prevail against a still personally popular President Obama.

Absent that, I just don’t see Paul’s philosophy and policy views appealing to a plurality of the country.  And while I’ve previously discussed the utter importance of macrovariables, I just don’t see those things (as currently constituted) overcoming the problems that would confront a real outlier like Paul.  Obama will have millions and millions of dollars to throw at Paul, and the liberal press will have a field day with his views/past associations once he is seen as a real threat to their views rather than a curiosity (and a curiosity that could derail real Republican threats to their guy).  Together the administration and the media will be able to scare moderate voters away from Paul and into the warm comfort of the status quo.

Moreover, even in the scenario where Paul gets the nomination, don’t the powers that be in Washington Republicanland run a 3rd party challenge that throws the election to Obama no matter what?  Can we really imagine that neocons and the liberal Republicans wouldn’t try to mount such a campaign?  Rudy or Bloomberg, for example?  Heck, guys like David Brooks have been quite positive about Obama anyway, so it wouldn’t take that much to push “moderates” like him into his court as the “prudential” and “conservative” alternative to the “dangerous” “radicalism” and “isolationism” of Paul.

I just see a Paul Presidency as a libertarian fantasy.  But I’d love to be proven wrong given the current possibility of a Newt Romney presidency or Obama the Sequel (with bonus Supreme Court nominees).  But count me as someone who wishes that Paul had pushed his supporters and political oxygen towards someone like Huntsman (who isn’t perfect either).

Of course, Daniels was the real opportunity for liberty-loving Republicans.  So sad…

UPDATE: By the way, since strategic voting isn’t really possible in large-scale elections, don’t feel bad about voting expressively for Paul or any other candidate who “can’t win”
since you won’t be the marginal voter anyway.

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Since the East Asian financial crisis of the late 1990s, a consensus among even free-market economists has been developing: financial liberalization for developing countries usually don’t make sense. The financial crisis of 2008 and the ongoing Eurozone crisis have only fortified this consensus. The mainstream economic position seems to be that, at least for developing countries with smaller markets and poorly trained regulators, restrictions on capital account transactions in liquid portfolio assets often make sense.

Even the usually reliably free-market, pro-globalization economist Jagdish Bhagwati writes in his popular book, In Defense of Globalization, that the East Asian financial crisis

…was a product of hasty and imprudent financial liberalization, almost always under foreign pressure, allowing free international flows of short-term capital without adequate attention to the potentially potent downside of such globalization. There has been no shortage of excuses and strained explanations blaming the victims… [T]he motivation underlying these specious explanations is a desire to continue to maintain ideological positions in favor of a policy of free capital flows or to escape responsibility for playing a central role in pushing for… gung-ho international financial capitalism. (199-200)

Strong words! And then there’s this (more…)

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1964 or 1800?

A new poll out of Iowa suggests that Ron Paul could win the upcoming caucus there and that Gingrich is losing support amongst conservatives in the state.  So says this story while various other polls also show Paul’s strength in Iowa.  Even the New York Times is in on the Paul-mania, with a Ross Douthat column on the “Ron Paul Rising” theme.  Indeed, this piece is beautifully written (HT: my main man on the main line) and contains this gem:

Should Iowa really come down to Paul versus Gingrich, the clash will make for a fascinating contrast. Physically, neither man resembles a classic presidential candidate (especially compared to Romney and Perry) but for completely different reasons. Paul is all bone and sinew and nervous energy – an Ichabod Crane or a Jack Sprat, hunched and herky-jerky in too-large suits. Gingrich is broad and self-assured and faintly decadent, with a Cheshire Cat’s face and a body that looks like it’s ready for its toga.

Has anyone ever described Gingrich this well?  In one sentence, Douthat tells us so much with so little.  Masterful.  Worth reading the rest, including this insightful point that well-describes why so many libertarians love Ron Paul:

Paul, for all his crankishness, is the kind of conservative that Tea Partiers want to believe themselves to be: Deeply principled, impressively consistent, a foe of big government in nearly all its forms (the Department of Defense very much included), a man of ideas rather than of party.

Now I think the chance of Ron Paul winning the nomination is higher than a meteoroid hitting the earth or Bruce Willis landing on one to save the planet – but not a lot more.  His principled “conservative” positions scare liberal Republicans and irritate crony capitalists.  His foreign policy views anger neoconservatives, Israel supporters, and many in uniform.  Although pro-life and ethically conservative, he isn’t exactly the candidate of choice for “theocons” and their allies.  Moreover, party insiders dismiss Paul given his lack of “electability” and possible negative effects on the rest of the ballot.   

When the powers in the Republican party imagine Paul on the ticket they see Goldwater, less than 40% of the popular vote, and an electoral wipeout.   But is this the correct analogy?  Might 1800 be more accurate?  In that election, Jefferson and the Democratic-Republicans swept aside the Federalists and ushered in the Revolution of 1800. 

Well, I don’t really think so.  We aren’t going to see a party realignment or a serious turn towards libertarianism.  Our political culture, as presently constituted, simply cannot sustain such a path even if Paul could capture the throne Presidency.  Many Americans fear big government in some sense as Marc noted yesterday, but they also love particular big government programs and many are generally afraid to be free as economist James Buchanan so eloquently stated in this seminal paper.  Moreover, federal institutions constrain the ability of the President in so many ways as Obama has found out. 

Yet a President Paul would be able to make significant changes – ironically enough due to the very patterns of post-WWII executive empowerment that he disdains.  For example, President Paul could radically change our foreign policy and military posture around the globe.  I can’t imagine any Libyan, Ugandan, or Iraq adventures under Paul.  Nor would we see an expansion of NATO to include McCain favorite Georgia or any other country so critical to the security of our island-continent (sarcasm alert).  Indeed, a reduction of our foreign presence would be a lot more likely!  In trade policy, we’d see him use a renewed (assuming Republican control in Congress) fast-track authority to speed along trade liberalization (and all of the benefits that flow from freer trade).

Well, one could only dream….It wouldn’t be 1800 overall but it certainly would be a revolution in foreign policy.  And imagine the scenario where Paul is nominated and the economy tanks even further (perhaps spurred on by a European crisis).  At that point, the ABO vote might be large enough to elect even a radical like Paul.  Again, one could only dream….

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Coda I on Barney Frank

With Barney Frank readying for retirement, I’m sure we’ll see lots of puff pieces about his “contributions” to our country.  My guess is that these salutes won’t emphasize his supremely negative role in the present housing mess and financial crisis.  Here is an older piece by Jeff Jacoby of the Boston Globe that captures the government’s (and Frank’s) contributions:

While the mortgage crisis convulsing Wall Street has its share of private-sector culprits — many of whom have been learning lately just how pitiless the private sector’s discipline can be — they weren’t the ones who “got us into this mess.” Barney Frank’s talking points notwithstanding, mortgage lenders didn’t wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so  – or else. [snip]

His [Frank's] fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that “these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.” When the White House warned of “systemic risk for our financial system” unless the mortgage giants were curbed, Frank complainedthat the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the “systemic risk” is apparent to all, Frank blithely declares: “The private sector got us into this mess.” Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.

In Coda II on Frank, I’ll discuss one of his more positive contributions.

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If one were to base one’s world view on the MSM coverage of the Occupy movement, one would have to conclude that a growing percentage of Americans fear big business and are looking to the government for a solution. The new Gallup Poll suggests otherwise.

According to the poll, “the 64% of Americans who say big government will be the biggest threat to the country is just one percentage point shy of the record high, while the 26% who say big business is down from the 32% recorded during the recession.”

One might assume that all of this is good news for Ron Paul, the GOP candidate who has devoted the past several decades to making a powerful case against leviathan, and bad news for those who have promoted state expansion.

One might assume…

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From one of our readers and frequent commenters in response to Marc’s post on the economy in uncharted waters:

The problem with both analyses [discussed in Marc's post] is that they treat the economy like a clockwork. If you tighten this spring or replace this gear or lube it there, then the whole thing will work better. That’s not a good metaphor and an even lousier basis for prescribing policy.

A better metaphor for the economy would be some kind of primitive, multicellular sea organism, like a sea sponge or a coral (my wife and I have grown coral). The only thing you can do to encourage a coral to grow is provide clean water at the right temperature and the correct light for a certain number of hours a day. After that all you can do is wait. If you do anything else to the environment of a coral you will kill it.

So what government actions make up the clean water at the right temperature for the right number of days?  Could it be Adam Smith’s “peace, easy taxes, and a tolerable administration of justice”?  Or should we add to this from Milton Friedman’s list of functions government should perform: define the rules of the game and property rights, prevent monopoly and overcome market failures, provide a stable monetary framework, and “relieve acute misery and distress”?    

Anything else?  Or anything that shouldn’t be there?

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Edward Luce, FT, provides an interesting argument on the many ways in which the current economic challenges in the US are going to be difficult (if not impossible) to solve. He illustrates his argument with some rather painful statistics in “Can America regain most dynamic labor market mantle?”

  • The unemployment rate would be 11 percent today (not 8.6 percent) if those who have become “discouraged” and dropped out of the labor force were still counted.
  •  At the current rate of job creation, it will take 78 months to recovery the pre-recession job levels, compared with the 6 months in took to recover from the 1982 recession, the 15 months it took to recover from the 1991 recession, and the 39 months it took to recover from the 2001 recession.

Paul Krugman wrote a column for the Sunday NYT (“Depression and Democracy”) that declared the current economic conditions in the US and Europe to be tantamount to depression. He writes:

“It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.”

Krugman’s piece focuses on the political implications for Europe, but his argument has clear implications for the US. Unsurprisingly, his core claim seems to be that all of this could have been avoided had policymakers embraced stimulus instead of austerity.

Luce, in contrast, provides a far more interesting argument that engages long-term structural changes in the US economy. Although there is a case to be made for educational reform, fiscal stabilizers, and infrastructural investments, he concludes with a rather suggestive quote from former budget director Peter Orzag:

 “The truth is that we don’t know how to fix the US labour market – we are in uncharted territory…It would help to spend more on retraining and on infrastructure and to have a more rational immigration system. But these wouldn’t fundamentally transform the situation for the middle class … It is not yet clear what, if anything, could.”

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I like Ross

A smart column on smarts.  Worth a read.

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I’m not sure yet what the right answer to this question is.  But my guess is that most people who think Justice Kagan should recuse herself would also like to see ObamaCare (due to the individual mandate) declared unconstitutional.  Likewise, most of those who vehemently deny that there are any possible grounds for recusal probably support ObamaCare and believe it to be constitutional.  Therefore, it was noteworthy to see a recent Slate piece by an ObamaCare supporter who believes that Justice Kagan ought to recuse herself from the case even though he thinks such a move would make it more likely that his position on the case will lose.  From its author, law professor Eric Segall:

The Supreme Court is increasingly seen as a partisan political institution making political decisions instead of a true court deciding cases under the law. Justice Kagan has a golden moment to display that at least one Supreme Court justice has integrity and character that exceed her party loyalty and political past. If she sees herself as a political official who, because of the office she occupies, gets to cast an important vote on an issue that may decide an election, she should stay on the case. But, if she views herself as a judge of law who is obligated to approach legal issues objectively and open-mindedly without regard to partisan political outcomes, she ought to step aside. Nothing less than the integrity of the Supreme Court is at stake.

UPDATE: See this piece by the always insightful Jonathan Adler on Scalia and Thomas attending a Federalist Society dinner with Obamacare “challengers” – and “supporters.”

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Democrats are always saying that most millionaires would love to pay more taxes.  Especially the billionaire variety like Buffett or Soros.  NPR just did a story saying that taxes are irrelevant to millionaire behavior.  Here is an example:

“If my taxes go up, I have slightly less disposable income, yes,” said Burger, co-owner of CSS International Holdings, a global infrastructure contractor. “But that has nothing to do with what my business does. What my business does is based on the contracts that it wins and the demand for its services.”

So, all of you millionaires apparently need some guidance on how to get what you want.  Here are some instructions:

  1. Form a Facebook group where you can all join up together and share thoughts about how you love the government and everything it does.  This will help you get motivated.  (Since taxes are irrelevant to you, it will take a little motivation to remember to think about them.  Sort of like contributing to NPR.  You could even have NPR help you do a fund drive to remind your fellow millionaires that they have all this money that they would be happy to donate to the government; they just, well, forgot, being busy exploiting the working class and all.)
  2. Create a PayPal account where y’all can make your contributions.  Heck, one of you probably owns PayPal, so it will be easy.
  3. Have Warren call up his buddy Geitner and say, “Hey, Timmy, a bunch of us über-rich got tired of complaining about how we are undertaxed and don’t have much else to do with our extra money, so we made a little fund for you.  Enjoy!”

See, so simple.  It just takes a little coordination.  You won’t even have to spend any more time doing interviews with journalists about how you’d love to pay more taxes because they are irrelevant to your business decision making.  And you don’t have to donate any more money to Democrats—just cut out the middle man and donate straight to the government!  It is much more efficient that way.

Oh, by the way, I forgot step four:

4.  Until you have actually done steps 1-3, shut up!



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For the first time in history, Britain has vetoed a new EU treaty. The purpose of the treaty was to impose tough new limits on budget deficits of member states. David Cameron argues that the new treaty would open the door to new financial regulations that would disadvantage Britain. His move is likely to prove popular in the UK, where a bare majority of voters with an opinion on the question favors leaving the EU altogether. The Europhiles at The Economist, however, are unimpressed. The remaining EU members appear headed for a new treaty technically outside the auspices of the European Union (however, there are obstacles, as Britain will likely insist that no EU resources be used for the new institutions).

From a strictly economic point of view, however, it was always unclear why Britain and other non-eurozone member states needed to be part of the treaty. Large budget deficits in Britain no more threaten the euro’s stability than do large budget deficits in Sweden or the United States. The European Central Bank has no reason to monetize British debt, and while British default – a highly unlikely prospect to begin with – would surely harm the European financial system, the ECB presumably would intervene in such an event by supporting financial institutions within Eurozone countries. As ever, the construction of new economic-policy powers for EU institutions is about politics: building a political-economic bloc with stronger economic bargaining power. Pay attention to Sarkozy.

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I have avoided commenting lately on Krugman’s tiresome rantings because almost every column of his is limited to some combination of the following:  1) Republicans are evil; 2) The economy needs more government spending; 3) People who don’t agree with 1 or 2 are either stupid or evil (probably both).

Today’s column, though, takes his willful economic malpractice to new lows.  He starts out describing how every Republican candidate is just a version of Gordon Gekko of Wall Street fame (see theme 1 above).  His target then becomes focused on Mitt Romeny, particularly the activities of his former business, Bain Capital.

Bain Capital would perform leveraged buy-outs of companies, increase their value, and then sell them.  Krugman’s characterization calls up not only Gordon Gekko but also Richard Gere’s Edward Louis (before he was transformed by Julia Roberts in Pretty Woman).  These financiers don’t create things.  They own them.  And sell them.  Bad people, you see.

The malpractice comes in not by noting that the leveraged buyout industry often cuts jobs from companies they take over.  In fact, it is not hard to believe the direct effects of their actions cause job losses (according to Krugman, jobs are never “eliminated” or “reduced” but always “destroyed.”).  But what of the indirect effects? That’s where the value-added of being trained in economics should come in handy.   Schumpeter brought the idea of creative destruction to the forefront of understanding economic growth, but the kernal of that idea goes way back to Adam Smith.  Of course Krugman knows this.  He knows a lot of things he won’t say.

As I’ve argued before, there is no guarantee that growth will produce more jobs or better wages.  As the economy is transformed again and again, the value of labor (compared to capital and technology) may fall.  Most technical innovations improve the marginal productivity of labor and capital, so it is not certain that  more labor will be necessarily be used as technology drives growth.  But it usually does.  Over a century the US and other countries went from a labor market dominated by agriculture to a manufacturing economy to an information/service economy.  Even with that transformation, real earnings have risen and employment has steadily increased.  During the period Romney was “destroying” jobs at Bain capital, job growth continued to escalate.  The question is not whether companies subject to leverage buyouts experience net job gains or losses (I imagine it is the latter).  The question is what other jobs are created as wealth in the economy is created?  In short, what are the indirect effects?

The identical logic applies in the case of foreign trade.  Jobs that are eliminated due to competition from foreign producers are replaced as people have more real income due to the cheaper foreign goods and, consequently, their demand for domestic and foreign goods rises, creating job growth.

The political problem with creative destruction is that creative destruction gets on the news more often than efficiency-induced job growth.  Layoffs tend to come in bulk, hundreds or thousands at a time.  These layoffs make for easy headlines and easy villains.  But hiring usually occurs one job at a time, not en masse.  And they occur in very different places.  When industries are made more efficient, the job growth created will not usually be in that industry; it will be scattered across the array of industries that see higher demand because of increased wealth.

It is easy for the media to show pictures of corporate tycoons callously issuing pink slips to workers.  It is the job of the demagogue to show only that image and to exploit it for political gain.  It is the job of the economist to remind people that such an image tells only part of the story.

So what does that make Paul Krugman?

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Investing Wisely?

A report released by the Public Campaign examines 30 top corporations. Some key findings:

  • Despite making combined profits totally $164 billion in that three-year period, the 30 companies combined received tax rebates totaling nearly $11 billion.
  • Altogether, these companies spent nearly half a billion dollars ($476 million) over three years to lobby Congress—that’s about $400,000 each day, including weekends.
  • In the three-year period beginning in 2009 through most of 2011, these large firms spent over $22 million altogether on federal campaigns.

The full report (available here) seems pitched to the OWS/99 percenters. But it should be of interest to anyone concerned with corporate welfare, crony capitalism, and the sloppy corporatism that has flourished in the US regardless of partisan control of our national institutions.

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Back during the Bush pseudo-scandal of firing all the US attorneys, my grad school friend Kyle Sampson (he of the “loyal Bushies” fame) appeared in a large picture on the front page of the New York Times with his arm to the square.  I remember saying to a colleague, “that is not how I would want to make my one appearance on the front page of the Times.” [Of course Kyle is a smart, ambitious guy who might make it to the front page again].

This is my new standard for how I don't want to spend my moment in the sun (photo credit: some dude at the Times who needs a better job)

But now, courtesy of a feature column on today’s Times web site, I have a new way I wouldn’t want to spend my 15 Minutes of Fame–with my head in the toilet bowel.

Sally Carle looks like she is probably  a lovely woman, though it is a little hard to tell, given that we can’t really see her.  Here is a snippet from the accompanying Times story.

“Sabrina Cusin, who runs a high-end cleaning service called (no kidding) New York’s Little Elves, is currently dealing with the annual flood of holiday deep-cleaning jobs. And with the neurotic customer demands that inevitably come with it.

We have people who say, ‘I only want you to bring new mops, sponges, brooms and unopened fluids,’ ” she said. “What can I say? Some people never wear underpants twice.  One woman insisted on new vacuums. I drew the line. So she went out and bought two Mieles.”

That doesn’t sound so unreasonable to Nancy Bock. Ms. Bock, a spokeswoman for the American Cleaning Institute, said there was nothing outrageous about insisting on virgin machines and supplies. Not if it offers “the certainty that the product is the one that was originally poured into that bottle and that nobody else’s sponge has touched the lip.”

After all, she added, “What’s extreme?”

Maybe if you need to ask, you already have a problem?

So, I’m thinking we should open up a new penal colony somewhere.  It would be a nice place, maybe decorated by Martha Stewart and cleaned by the Little Elves of New York.  In addition to the hyper tidy, we could send the principal who recently suspended the the 9-year-old boy on charges of sexual harassment for telling a classmate that their teacher was “cute” and the high school official in Massachusetts who called back a state-championship-winning-touchdown on a kid (on his birthday, no less!) who raised his left arm in the air for a second while running for the goal-line.

Then the rest of us could live in peace without having to deal with people who won’t wear their underpants twice.  We could send them Grover Norquist as colonial governor.  He’d run a tight ship.

[Insider note: This post is dedicated to Tara, who appreciates potty humor.]

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In recent weeks I once again had the privilege of teaching Plato’s Gorgias, and again I find it not only a wonderful teaching tool, but as profound a comment on what is wrong with politics — anywhere and anytime — as I have seen. Plato contrasts the work of the rhetorician, who specializes in motivational speaking (we might say) — and whom he likens in crucial respect to dictators — with “educators.” Educators too try to motivate people through speech, but there is a crucial difference: in teaching (Plato says) the process is regulated by regard for the truth; not so in rhetoric. One can be persuaded of what is false as well as what is true, whereas (on his definition of teaching) one can be taught only the truth.

We might think of the contrast in terms of ranking of preferences. Given that I am trying to persuade someone of some idea (call it p), and p might be either true or false, here is how the two practices reflect my ranking of outcomes:

1. I persuade you of p, and p
2. I persuade of you p, and not-p
3. I don’t persuade you of p, and not-p
4. I don’t persuade you of p, and p

What matters is really not the second half of each of these preference orderings; what matters is that I prefer the outcome in which I persuade you regardless of the truth of what I persuade you of. Contrast that with education:

1. I persuade you of p, and p.
2. I don’t persuade you of p, and not-p
3. I don’t persuade you of p, and p
4. I persuade you of p, and not-p

Here the worst case is the one in which I induce a false belief in you; the second-best outcome for the rhetorician is the worst for the educator. That difference makes all the difference in the respective practices and in those who engage in them.

The practice of politics is built, essentially, on rhetoric rather than education. The process of acquiring and exercising political power involves only at the margins the truth of the persuasion it engages in. It values successful persuasion systematically over truth, and we see that effect carried out systematically over both electioneering practices and in legislation (where public choice explains the sorry disconnect between professed values and legal/political results). The disconnect is endemic, and corrosive to human social life. Decent people regulate their speech and conduct with each other to a considerable degree (not perfectly, of course) with the truth, or anyway what they take to be the truth. In general, if you tell me something, I ascribe to you the belief that that something is true. Not so in politics, where the incentives to acquire and exercise power over other people is the currency of the practice. It is, as Plato pointed out, just what dictators do, only in different form.

Perhaps there is no alternative to politics in human social life. I am not sure that is so, but it might be true. But whether it is or not, we ought not to be surprised when it turns out to be the cesspool of deception, mischaracterization, and falsehood that it inevitably turns out to be. That of course does not preclude people who retain decent preferences for the truth from participating in politics. It is both surprising and pleasant to discover when this is so, especially because such people are headed upstream at every moment of their political careers; the incentives of politics systematically point the wrong direction. It is always a pleasant surprise when truth emerges, and when it does it is testimony to the basic human social propensity to seek and speak truth. No place else in human life is that propensity so challenged as it is in politics. But we’ve had no excuse since Plato for expecting anything else.

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My immigration policy is generally of the type: “sure, come on over” (though maybe not all at once).   But here is variant I would like to adopt immediately:

Any foreigner who works/has worked for the US military can automatically immigrate to the US whenever he/she wants to (well, as long as they are not terrorists or have in some other way committed crimes against the US or its citizens).

I got this idea from reading a description of the situation of Afghani citizens who have been interpreting for US troops, often risking their lives in the process.  They face probable torture or death if the Taliban gets hold of them.   Apparently, there have been 2,630 Afghanis working for the US who have applied for a visa, yet not a single one has been issued yet.  It should be easy–automatic, even–to get one of these visas.

Writing in “Political Diary” (wsj.com, subscription only), Anne Jolis writes:

Other than safety from the Taliban, what exactly do the Afghans want with U.S. residency? Most say they would come right back to Afghanistan. “If the U.S. would want me in the Army, I’d do it, I’d join — I like helping the Americans,” says Zekrullah.

Walli nods in agreement. “I just want to start my life, work hard. The first thing I’d do would be to keep translating for the Americans, join the Army if that were possible.”

Even 40-year-old Mohammad of Helmand Province, who has been interpreting for Americans for three-and-a-half years, says he’d seek to continue his U.S. military service: “I’d come back to Afghanistan and keep doing this,” he says. “The difference is that I’d know I could then go to America and be safe.”

This touched me, not only as something we ought to be doing, but as a testament of the decency and hard work of our troops.  In making foreign policy, where discussions are often just about power and interests, we sometimes forget that there are good guys and bad guys and that it usually isn’t hard to tell the difference.

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Teaching the 1%

And some days I’m really glad my children aren’t going to Harvard:

Harvard faculty hold teach-in

Professors from Harvard University, Boston College, and New York University will gather at the Harvard Science Center on Wednesday afternoon for a 4½-hour public “teach in” in support of the Occupy Wall Street movement.

(From the Chronicle of Higher Education)

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