Month: November 2006

Protectionism or Principle?

Sen. Harry Reid has an interesting stance on the recently passed anti-gambling bill, as the gambling lobby prepares to reverse its fortunes with one of Nevada’s senators as Senate Majority Leader:

“I have said on many occasions that I don’t believe in Internet gambling,” Reid said in a meeting with reporters, adding he’d be open to looking at the results of a study on it.

“I know that people say it can be controlled, I just have extreme doubts that it can be. But I’ll be happy to look at the study. I’m not going to turn my head and say never, never.”

We could get to the underlying principle of liberty, in which consenting adults spend their money as they see fit, in a way that harms only themselves, if even that. Since Senator Reid doesn’t believe in Internet gambling, the unprincipled moral position is correct. Wonderful, but rather than asking for studies that suggest Internet gambling isn’t bad, Senator Reid should produce the studies that convinced him that it is bad. Perhaps something a little more compelling than extreme doubts.

I don’t expect a fruitful two years ahead for liberty.

This has to be satirical.

I didn’t get to blog this yesterday, but it’s still worth a mention. It’s always wise to check your assumptions when promoting an idea, especially when that idea is that deficits are wonderful:

A reporter once asked President Reagan if he had anything to say in defense of his deficits. “No” answered Reagan, “they’re big enough to defend themselves.” Liberals howled, and conservatives chuckled, but no one questioned the premise of the question: that deficits are inherently a bad thing. The argument has always about whether the bad thing called deficits are too large and whether they will ever be paid off, not whether they can actually be good for our country. For the record the answers are: no, they’re not too big (see attached chart); no, they will never be paid off, and yes, they can be a good thing.

I actually like the premise of the question, because deficits involve politicians playing with other people’s money. Considering some of those other people haven’t been born yet, caution and responsibility seem to be key. But that’s not the flawed assumption I’m concerned with in this essay.

When strong nations go to war, they borrow money. Weak nations, not so much. That’s because strong nations usually win, and winning nations usually repay their creditors. Rich and successful people don’t have any problem getting someone to loan them money. The same holds for wealthy and successful nations. That’s why, historically, the interest rate of a nation’s bonds is a pretty good inverse indicator of investor confidence in the war effort. The more trouble investors see on the horizon, the more compensation they demand for the added risk.
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This is the way the world works, some might say, but is it right? What about the children? Is it really fair for them to shoulder the burden of our wars? Heck yeah, it’s fair. Number one, they won’t be children when they start to share the burden of the national debt. Number two, they benefit.

Here’s the flawed assumption. The author expresses a selfish belief that we can have anything we want, and as long as the country survives, the children should just shut up. We’re wise, or at least rich. That’s enough, right?

The author concludes:

Defense is a sort of infrastructure, too. It provides benefits for future generations, just like roads and bridges do. Is it some kind of rip-off that my kid’s future tax bills will include interest payments from the war against Jihadists? Not if we win.

Good grief. Of course defense is vital, and the benefits of maintaining a strong nation carry over beyond just the immediate expenditure. (An assumption with some danger, but I can accept it.) No sane person believes that government shouldn’t protect its people. Defense is a legitimate expense for any government and should be made to the point that the nation remains safe. But that does not give a free pass for rampant spending elsewhere at the expense of future generations.

Look at the federal budget. The bulk of expenditures are in entitlements (Social Security, Medicare, etc.), not defense. To ignore these and believe that the war on Jihadists somehow excuses annual deficits of hundreds of billions of dollars is absurd. Eventually, the interest will absorb the entire budget, so the government will need further resources. At what point does this stop? (Hint: It begins with bank and ends with ruptcy.)

If the author wanted to make a case that the national debt is good, and shouldn’t be paid off, we can talk. He’d still be wrong, I believe, but there might be a case. But the deficit? Ridiculous. There is more than just interest rate signaling involved. Namely, interest payments.

If we want to do something for the children, we need to teach them economics. And the author of this essay should be last in line for the job.

Reform is an option.

I’ve been here before with Robert Samuelson, but it’s important to hammer at this point whenever it appears:

On domestic policy, Democrats have few big opportunities. This creates a dilemma. They can either concentrate on symbolic acts (the minimum wage, the drug benefit) that sharpen their differences with Republicans. Or they can find less controversial matters, where cooperation seems possible, to advertise their fitness to govern and their credentials as centrists. It will be difficult to do both. There’s only one solace — the Republicans face the same dilemma.

I agree that implementing changes won’t be as easy as Democrats might hope. That’s not the issue. When we start resorting to “less controversial,” we come up with non-solutions to real problems. In the context of current politics, of course, because controversy and arguing can and should lead to better solutions. But Congress is dysfunctional and poorly suited to reform.

I’m splitting principle-based hairs on what Democrats should focus on. That brings me to Mr. Samuelson’s (repeat) mistake. Notice in his conclusion that he offers only two choices, symbolic acts or centrist compromises. There is no discussion that maybe Congress shouldn’t be spending the way it spends on what it spends. Why? I’m willing to consider that I’m wrong, but there are alternative viewpoints separate from the Democrat versus Republican debate.

Cooperation, and all that.

In the Interest of Full Disclosure

In yesterday’s post about Robert Rubin’s suggested tax increase, I forgot to mention that I voted for Clinton in ’92 (and ’96, for what it’s worth) and supported the tax increases. My acceptance of tax increases as the viable solution was naive, based in economic ignorance, but my basic fiscal philosophy was still there. The budget should be balanced. In surplus, actually, since we need to pay the debt, as well. But my understanding of what the government should be spending has changed, based on knowledge and reading the Constitution.

All of this is a prime reason why economics education should be mandatory in school. Before I’d taken any economics classes, political marketing influenced my economics understanding. Today, economics influences my political understanding. I’ve always been a libertarian, for my commitment to liberty has always been my fundamental philosophy. In the past I naively ignored how crucial economic liberty is to individual liberty.

If I’d been aware in ’92, I doubt I would’ve voted for Clinton in that election. I doubt I would’ve voted for Bush, although history has been kind to my recollection of his presidency. But I wouldn’t vote Democrat. Yes, I’ve voted Democrat in the last two elections, but I’ve been trying to find the best way to defeat the nonsense of the last five years or so. I desperately want to vote for a libertarian candidate, but Virginia politics isn’t keen on nominating libertarians. As such, it’s highly unlikely that a Democrat will get my vote in the near future because I don’t think they’ll change. If I have to vote for myself, I will. I’ll even be eligible for president in ’08.

In other words, cut spending to fix our fiscal crisis. Increased redistribution through taxes on “the rich” reduces liberty for all, which will not work in the long-term for a nation that strives for prosperity.

“It’s simply beyond words. It’s incalculable.”¹

I love “name the team” contests. This time, the Phillies were involved, as their AAA team is moving from Scranton/Wilkes-Barre, Pa. to Allentown, Pa. in 2008. The new team name, when it begins play? The Lehigh Valley IronPigs.

It’s being roundly booed throughout the Phillies phlogosphere, which is not so surprising. The name IS a little stupid. But, and this is coming from someone who proudly owns a Batavia Muckdogs t-shirt, I absolutely cannot wait until I can buy an IronPigs t-shirt. I’m positively giddy at the prospect. I know that marketing to nimrods like me is a primary reason for these “name the team” contests, but I don’t care.

Say it with me: Go IronPigs!

¹ I mentioned Scranton, so what would this post be without a quote from The Office.

The Central Planner’s Recipe Book

I’ve generally liked his shows in the past, but Jamie Oliver should stick to cooking:

The Essex, England-born chef started cooking at age 8 at his parents’ hotel before his first book and television series, “The Naked Chef,” made him famous at the age of 21 in several countries and spurred more books and shows.

Oliver said U.S. politicians should “stop being so subservient” to “junk food companies” and that the country should cut down on junk and fatty foods, which would help reduce future health costs.
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Oliver said clearer government guidelines were needed, such as New York City Mayor Michael Bloomberg’s recent proposal for a near ban on artificial trans fat in restaurant food.

“The junk food companies have got more resources than the government and more money to spend on poxy lawyers so I completely admire and condone the mayor for doing it,” he said.

I’ve said my bit about trans-fat already, and that should suffice here for how I feel about Mr. Oliver’s statist opinion. That doesn’t mean I think kids should eat junk food, of course, but that’s a decision best left to parents. As his experience in England shows, some parents prefer their children to have “junk” food. We can think they’re idiots all we want (and I do, a little), but they’re going to win. Which is why the statists want to use the coercive power of government.

Rather than being anti-liberty, which they are, they could go to a more fundamental, and dare I suggest cost-saving, solution to the actual problem. Allow for school choice. The market would sort this out, with parents opting for whatever dietary preference they wish for their children. If there’s really a demand, parents will seek it out. Now, they’re stuck with what the government offers through its schools.

But that’s wishful thinking, because I clearly don’t care about the children.

“This is like déjà vu all over again.”

How to learn nothing:

That was fast. A mere two days after Democrats capture Congress claiming they wouldn’t raise taxes, former Treasury Secretary Robert Rubin tells them they should do so anyway.

“You cannot solve the nation’s fiscal problems without increased revenues,” declared Mr. Rubin, the Democratic Party’s leading economic spokesman, in a speech last Thursday. He also took a crack at economic forecasting by noting that “I think if you were to increase taxes right now, you would have probably about zero negative effect on the economy.” The economics and politics here are worth parsing.

It’s premature to assume that this is The Path&#153 for the next two years because much political wrangling has to happen before we see this implemented. My reaction is more exasperation than anything, which is to say that this is not “buyer’s remorse.” I’ve said many times that a (massive) spending cut is the way to fix our fiscal crisis. But politicians aren’t to be trusted, so I reasonably expected this. Democrats can’t comprehend that spending is too high rather than revenues tax receipts are too low. They’re stupid.¹

Aside from the ridiculous notion that Mr. Rubin believes tax increases would have zero negative effect on the economy, Mr. Rubin seems to be misreading the results of the Democratic victory last week. This is not 1992, when then-candidate Clinton ran on the promise to raise taxes. Everyone knew it was coming with a Clinton victory and still he won. However right or wrong the decision was, its inevitability was obvious. Clinton had the political capital to “encourage” Congress to increase taxes.

The 2006 election signaled no such preference from voters. Democrats could be expected to misinterpret their victory, as its lack of political leadership and foresight has been evident for many years. So, again, I think no one will be surprised if the 110th Congress attempts a tax increase. But they should not be surprised when they find themselves on the outside looking in at control of the 111th Congress.

The rest of the Opinion Journal editorial is reasonable, although it glosses over the deficit considerably more than it should.

¹ As further evidence:

“The middle class is being squeezed,” Mr. Reid said. “Squeezed. The rich are getting richer; the poor are getting poorer. We must do something about education. We must do something to relieve the tax burden on the middle class.”

It doesn’t take a genius to decipher that.

Meeting Customer Needs Mislabeled As Excessive Choice

This article, titled “When Fewer Choices Mean Bigger Returns,” is not geared to me, for I like choices and the research involved¹ in some of them. However, it’s refreshing that at least there is no request for someone outside the private marketplace to limit choices. Consider:

This point came rushing back to me the other day when I heard a radio commercial for Wal-Mart in which the company boasted about how small its selection of HDTVs was. The spot wasn’t apologizing for Wal-Mart’s lack of selection, nor was it saying the fact that Wal-Mart carried fewer options than the competition didn’t matter. The commercial actually touted the fact that Wal-Mart had improved the HDTV buying process by limiting its selection to only the most popular models.

The author appreciates this because he is overwhelmed with the number of available HDTV choices. Fair enough. If you’re content with the small selection Wal-Mart offers, you’re being catered to perfectly. I don’t prefer that method, because I know that the right possibility for me might be something I’m not aware exists. So this is not a chore:

If they can go to Wal-Mart and choose from a handful models that will do the job just fine for the average person, they will be happier than if they are required to sort through 40 or 50 models at Best Buy or Circuit City.

Again, I find this article useful in that it only makes the case that a business may meet its customers’ needs by doing some of the work for them. Free enterprise doesn’t have to mean every person has to try 500 brands of toothpaste. Where the author’s thinking is dangerous, though, is that “required to sort through 40 or 50 models” is an excuse for central planners to argue that too much choice is bad.

No one is required to do any research, of course. But if I like research and want to buy a TV that few people buy, there’s still a market. I may pay more for Best Buy to stock that model, but if it’s worth it to me, I’ll pay and Best Buy will make a profit. Whether or not that’s likely is subjective, but I am the person best-suited to being the decider.

¹ Ask Danielle how true this statement is.

Who needs facts when you can hate instead?

I’ll give this guy credit for chutzpah, if not integrity:

Lawmakers in Massachusetts, the only state where same-sex marriage is legal, dealt what appeared to be a fatal blow Thursday to a proposed constitutional amendment to ban it.
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Kris Mineau, president of the Massachusetts Family Institute, which sponsored the amendment, called the recess vote a “travesty,” and, waving a copy of the State Constitution, said the legislators had “just said that it’s irrelevant.”

I’m not sure Mr. Mineau understands the absurdity of him saying that legislators believe the State Constitution is irrelevant. Maybe he should sit down and have a think on that for a bit.

A few other instructive points:

The measure had been expected by both sides to gain easily the 50 votes required from the 200 legislators as the first step toward making same-sex marriages illegal.

As Kip pointed out, 50 votes out of 200 are required for a constitutional amendment to end up on the ballot because a citizens’ group proposed it? Huh? THAT is the form of democracy people want me to respect? No.

Gov. Mitt Romney, a Republican who opposes same-sex marriage, said the vote was a “triumph of arrogance over democracy.” He said that he would “explore any alternatives” to try to force a vote, but that “my options are limited.”

I’m sure exploring any alternatives couldn’t be considered activist. Gov. Romney is a conservative, after all. Only the liberals do that. Oh, wait while I smack my forehead. Activist depends on the outcome, not the action.

But the fact that the amendment had enough supporters to pass the first 50-vote round indicated that the issue of same-sex marriage remains divisive three years after the state’s highest court ruled that such marriages were constitutional in Massachusetts. More than 8,000 same-sex couples have since married.

Having enough votes to meet a 25% requirement does not, of itself, indicate that the issue remains divisive.

Polls have generally found that just more than half of the citizens surveyed supported same-sex marriage, but about the same number wanted the constitutional amendment to come before voters.

Big deal. The test should be more stringent than whether or not citizens want it. Reducing rights should never be put to a vote.

Final Thoughts: Election 2006

First, I need to admit that I was wrong about voter sentiment and willingness to vote in Democrats out Republicans. But I’m not a professional prognosticator, so it just proves that I can be an amateur idiot. Go, me! At least it’ll inform my future thinking, which is a small victory.

I did get the result I wanted, which is the chance for gridlock. For most races, I don’t think we have cause to celebrate, though, as much as we have a chance to regroup and start anew. I imagine that will be squandered, so I haven’t engaged in any gloating, save one race. With the inevitable concession out of the way, I’m laughing hysterically at James Webb’s defeat of Sen. George Allen. Few candidates in recent memory deserved to go from presidential contender to unemployed in three short months more than Sen. Allen. Good riddance. So, Sen. Allen: Ha-ha!

Looking ahead, I’m not making a prediction, but the tossing around of bipartisanship already leaves me thinking that the big government proponents on both sides of the aisle will form an alliance. Wonderful. Is any politician capable of paying attention?

For example, from Robert Novak:

Republican leaders are still in denial in the wake of their crushing defeat. They blame individual losing candidates for failing to prepare themselves for the election. In contrast, the private reaction by the candidates was anger at President Bush and his political team.

The candidates should look in the mirror as much as they should look toward President Bush. Yes, he’s reckless, but he only has Constitutional control over one branch. Many of the Republican candidates tossed aside on Tuesday had control of their own and they bowed at President Bush’s feet at almost every opportunity. Once a politician, always a politician. If they can’t figure that out, they’ll never achieve the permanent majority they thought they had in 1994. Nor should they.

The money quote from George Will’s column states this well:

The country remains receptive to conservatism. That doctrine — were it to become constraining on, rather than merely avowed by, congressional Republicans — can be their bridge back from the wilderness.

It’s too early to talk about, but I think 2008 is up for grabs. Thankfully. Will either party put common sense ahead of party ideology and a lust for power? I doubt it, but the next two years should be different, at least, if not exactly fun.