Category: Government

Opinions tell us what, exactly, about policy?

From Friday:

In the [New York Times/CBS News] poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002.

Although the public mood has been darkening since the early days of the war in Iraq, it has taken a new turn for the worse in the last few months, as the economy has seemed to slip into recession. There is now nearly a national consensus that the country faces significant problems.

So fascinating, and yet, so very likely irrelevant. Having an opinion is fine, but it’s only useful if that opinion is founded on facts. If it’s based on an idea that we’re suffering partly because the government spends more than it receives, fine. If it’s based on an idea that the mortgage situation in America is partly because some borrowers risked more than they could afford, fine. But those don’t seem to be the case.

In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.

How perverse does a person’s thinking have to be to decide that the warm glow of political happiness is more important than results? I’m looking very much in the direction of people laughing today at this story.

Of course, this isn’t an endorsement of what the government’s done recently. A good bit of our trouble is at least an indirect result of government policy. Artificially low interest rates aren’t a good idea. Attempts to squash a signal of imbalance possess a distinct head-in-the-sand mentality. The mortgage interest tax deduction isn’t a good idea because it distorts behavior. Perhaps that’s favorable, but maybe not. My decision to buy a house was a natural step in where I was in my life in 2005, but the potential deduction fit with my increase in income. It did not tip the decision, but I included it in my analysis.

Finally, this:

“What I learned from economics is that the market is not always going to be a happy place,” Sandi Heller, who works at the University of Colorado and is also studying for a master’s degree in business there, said in a follow-up interview. If the government steps in to help out, said Ms. Heller, 43, it could encourage banks to take more foolish risks.

“There are a million and one better ways for the government to spend that money,” she said.

This unquestioning acceptance that the government should have our money, that the only question open is how to spend it, is irrational and damaging. There is only one better way for the government to “spend” almost every dollar it spends: return them to the people who earned them. Or, in the case of the pending Free Money, don’t take out loans in our name and tell us we’re richer. And in the future, stop spending and stop taxing. Let me decide what I deem worthy of my money. I want you to do the same.

Other than those objections, this poll is useful.

Quote of the Day: Yesterday Edition

Megan McCardle sums up the libertarianism approach to governing:

“It won’t work” is the easiest prediction to get right; almost nothing does. The thought process that tells you something probably won’t work is not always a good way to figure out what will, even if you were right for the right reasons, as I agree lots of people were. That’s why libertarians have a great track record at predicting which government programs will fail (almost all of them) and a lousy track record at designing ones that do work.

But libertarians are generally smart enough to realize that we aren’t qualified to design a government program. (No one is, libertarian or not.) The prediction guides the desire not to plan. There are government plans, of course, unless one moves beyond a minarchist approach into anarcho-capitalism. And they will most likely not work as planned. We are smart but we are not the next Nostradamus. We remember that our first objective is the maximization of individual liberty. Thus, we seek to limit government to the barest necessity, to wreck as little as possible.

If one bad capitalist indicts capitalism, one bad pundit indicts punditry.

I (obviously) haven’t read everything written on the Fed’s Bear Stearns intervention. No need. Today’s column from E.J. Dionne is the most intellectually dishonest piece possible, relying on a skewed, limited set of the facts. There’s too much to excerpt and comment on to fully highlight its idiocy, but this is close to a summation:

But in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument — when it works. But the free market is just that: an instrument, not a principle.

Dionne mistakenly assumes that the American economy is a free market. It is among the freest on Earth, but it is not free. The free market is a principle. The American economy is an instrument.

It is an instrument for Wall Street tycoons who like corporate welfare. It is also an instrument for people like Dionne:

So now the bailouts [ed. note: this isn’t a “bailout”] begin, and Wall Street usefully might feel a bit of gratitude, perhaps by being willing to have the wealthy foot some of the bill or to acknowledge that while its denizens were getting rich, a lot of Americans were losing jobs and health insurance. I’m waiting.

If the “wealthy” who will be “asked” to foot some of the bill had no financial interest in (i.e. shares) or transactions with Bear Stearns, why is it her responsibility to pay more for the Fed’s actions? As a response to corporate welfare not benefiting her? And what if she already acknowledges that a lot of Americans were losing jobs and health insurance? Not that acknowledging that matters to anything; why does it matter?

Believing welfare is a dangerous policy for government is a principled stance. Believing that corporate welfare is a dangerous policy for government is a stance that serves as an ideological instrument for further regulating the American economy away from the free market.

Can we frame the debate objectively?

In response to this Will Wilkinson entry and this Kerry Howley entry on the liberty arguments for (economics) and against (morality) legalized prostitution, Ross Douthat goes off the rails with a strange question of how prostitution as sex work differs from molestation and incest. It’s as ridiculous as it sounds. Read Mr. Wilkinson’s response, with all the obvious goodness such a question demands.

Instead, I want to focus on this one sentence from Mr. Douthat’s entry:

If you think that sex, by virtue of being bound up not only culturally but biologically with emotional attachment on the one hand and reproduction on the other, is a unique kind of physical act, one that’s intimate by its very nature in a way that, say, preparing dinner isn’t, then it makes sense to assign a hierarchy of moral value (and moral stigma) to different kinds of sexual activity – most likely with monogamy at the top, serial monogamy somewhat lower, promiscuity lower still, and activities that treat sex as a commodity to be bought and sold somewhere near the bottom.

Of course it makes sense to assign that hierarchy if that’s what you think. But not everyone thinks that. Perpetuating individual liberty demands more than caving to a squishy notion of universal disdain for an activity. Even, and perhaps especially, when one finds activities at the bottom of that hierarchy morally repugnant.

The validity of arguing for the legalization of prostitution does not hinge on the moral argument with regard to selling sex. It is acceptable to believe that an activity is morally unacceptable, yet to acknowledge that two consenting adults may engage in that activity because they are not harming others. Or more precisely, if they are harming anyone, it is only themselves, voluntarily. That question of liberty is at the core of this debate, not the moral defensibility of prostitution.

Free to engage and should engage are different concepts. Ms. Howley and Mr. Wilkinson argue only the former. This (implicitly) injects into the debate the truth that all tastes and preferences are subjective. It sets such subjectivity aside and leaves the legal question only to evidence of objective harm.

For fairness, Mr. Douthat posits in an earlier entry that sex work is by definition self-abuse, justifying a legal prohibition. The posts he responds to in the above links address that argument.

**********

Of course, since it’s apparently okay to ask questions unrelated to the topic, let me ask a question: Why is it automatically self-harm worthy of prohibition for an individual to sell sex, even when it’s voluntarily sold, yet it’s reasonable to permit parents to surgically alter the genitals of their healthy sons – who may or may not approve of such permanent, physical alteration – as Mr. Douthat suggested last year in defense of infant circumcision?

The answer to how one person can hold two incongruent opinions rather obviously rests in a willingness to use personal, subjective tastes and preferences to inform the legal code of a diverse, secular, civil society. It’s the same central planner impulse that resides in every individual who seeks to dictate which freedoms are abhorrent.

Since I’m off on the tangent, in that entry, Mr. Douthat states:

Proponents, like myself, point out that even saying the word smegma is really disgusting. Again, I think we pretty much win the debate right there, without even getting into the whole HIV question.

I get the tongue-in-cheek nature of the comment, whether he meant it or not. I think he did because I think he views circumcision as inconsequential. (Remember subjective tastes and preferences?) But any understanding of human biology demonstrates the stupidity of such an argument. Female genitals produce smegma, as well. We do not cut female minors for that reason. Or, more to the point, we do not permit parents to cut their daughters just because they, the parents, are disgusted by the mere mention of the word. We manage to find the correct reasoning to prohibit that. But for males, parents can use only the mere mention of smegma as an excuse to cut. Or they can reject even that reason and order it because it’s fun to check “yes” on the consent form. The law is based on our conditioned beliefs rather than facts.

Just as it is with prostitution.

Triumph of the Big Government Advocates

Writing about OPEC’s rise to actual cartel power, Robert Samuelson writes this sentence about one of America’s short-comings.

We have steadfastly rejected higher gasoline taxes to curb unnecessary driving and strengthen demand for fuel-efficient vehicles (better to tax ourselves than let foreigners tax us through higher prices).

First, higher prices are not a “tax”, they are the result of supply and demand. As Mr. Samuelson points out throughout his essay, world demand is growing. OPEC has control of a large segment of supply. But OPEC does not have the ability to make us pay its prices. Why didn’t he just alter the sentence and write “better to tax ourselves than let foreigners gouge us through higher prices”? It would’ve been as economically (in)correct.

More importantly, the purpose of a tax on gasoline should never be to limit “unnecessary” driving. Unnecessary to whom? If I go to the store to browse for merchandise I have no intention of buying today, is that unnecessary? If a parent drives his child around to help the child fall asleep, is that unnecessary? If a teenager drives his date around aimlessly for an extra half hour so they can talk longer, is that unnecessary?

Taxes to achieve subjective ideals is ideology, not valid public policy. The only purpose for a tax – a user fee – is to rectify the negative externalities from the taxed activity. Carbon emission is an externality. Fifteen cents more for a gallon of gasoline from higher demand is not an externality.

The price of a gallon of gasoline should be the result of market forces. Either people value driving or they value money. But each consumer is the only legitimate decision-maker on that choice.

Legislators are politicians, not statesmen.

On Saturday I attended a town hall meeting given by my Congressman, Rep. Tom Davis. I’ve written in the past about how much I despise his service in Congress. On every political issue, he’s been wrong, choosing party over country. Throw in a dose of moral posturing on steroids in baseball and there’s little to redeem years of wasted opportunities to stand for what is right rather than what is right-wing. It’s been a frustrating mess living in Virginia’s 11th district.

That said, I would consider voting for not despising the man I encountered Saturday. He was honest, explaining the politics of different situations facing the nation. Some of them I already knew, like the stimulus package. Some of them I hadn’t thought about in as much depth, such as whether or not anyone running for president will pull troops out of Iraq. (I’d assumed no, given the current inaction from Democrats. Rep. Davis said as much.) He had smart comments on the false hope of the economic stimulus package, as well as an honest assessment of the (non-)viability of our entitlements regime. He was thoughtful on immigration, if ultimately misguided, in my opinion. But he had an intellectual depth that I respect.

I just wish he’d shown this when it mattered, not after he had nothing to lose because he’s retiring. The time to act occurs before deepening the problem you wish to address, not after.

“Do as I command, not as I say or do.”

As usual, Kip has the correct take on a news item. In this case, the House Oversight and Government Reform Committee is interrogating three CEOs without any clear reason why a committee created to investigate the government is investigating private market individuals. But politicians are involved, so there you go. I recommend Kip’s entry in its entirety.

I’m frustrated by something within the hearings:

Lawmakers confronted corporate executives Friday about how they managed to take home hundreds of millions of dollars in compensation while their companies were taking a financial nosedive from the subprime mortgage crisis.

“It seems that CEOs hit the lottery when their companies collapse,” House Oversight and Government Reform Committee Chairman Henry Waxman, D-Calif., said at the opening of the hearing. “Any reasonable relation between their compensation and the interests of their shareholders appears to have broken down.”
…

Waxman noted that [Countrywide Financial Corp. CEO Angelo] Mozilo received more than $120 million in compensation and sales of Countrywide stock last year while that company recorded losses of $1.6 billion. Merrill Lynch lost $10 billion in 2007, but [CEO Stanley] O’Neal got a $161 million retirement package.

I’m sure there’s an explanation for this. Not being a shareholder of any of the companies involved, I do not care what they are. And neither should Congress. Perhaps this matters?

CBO estimates that the government recorded a deficit of $262 billion during the first five months of fiscal year 2008, compared with a shortfall of $162 billion recorded in the same period last year.

Why isn’t our CEO, President Bush, hauled before Congress to explain his failure to veto excess (and illegitimate) spending? It couldn’t have anything to do with Congress being the body that sends those spending bills to his desk, could it? I’m sure it’s also defensible to send free money to Americans, as long as Congress prints borrows sends a large chunk but divides it among many Americans rather than concentrating it in a few hands. It’s also defensible to pay it to people who didn’t “earn” a refund by actually paying any taxes. At least the CEOs performed a task, however (incorrectly) one wishes to judge the results.

This is another reason why I am not a political partisan. None of them are competent at anything other than struggling for power. I don’t admire that, and I’ll never follow it blindly.

Root for individual liberty and America will succeed.

I fully expect to vote for myself in November, if I bother to vote at all. But just for fun, I’m researching some of the Libertarian Party candidates. On my first look – in this case, Wayne Allen Root – I’m not so thrilled. Consider some of his positions:

I support the Line Item Veto. I will push relentlessly and tirelessly to make this a crucial part of the President’s arsenal to fight the deficit, cut waste, and balance the budget.

Saying how he intends to achieve this is important, since it explains his understanding of the government process. However, he does not say how he intends to do this, so I will not assume his preferred path for achieving this. But I will suggest Article 1, Section 7 of the United States Constitution as a starting point:

Every bill which shall have passed the House of Representatives and the Senate, shall, before it become a law, be presented to the President of the United States; if he approve he shall sign it, but if not he shall return it, with his objections to that House in which it shall have originated, who shall enter the objections at large on their journal, and proceed to reconsider it.

This requires the President to address each bill in its entirety. He may not isolate the pieces he likes from the pieces he detests. The only valid approach to the line item veto is a Constitutional amendment.

My preference on this is simple. The Congress should narrow the focus of bills it presents to the President for approval. A defense bill shouldn’t have education issues attached, for example. The President should reject every bill that doesn’t meet this test until Congress begins legislating in this manner. This isn’t perfect because Congress gets leeway in how narrow it defines a topic, but it is an immediate solution.

Next, Mr. Root offers this:

I support gay rights and civil unions. Gay marriage however is not a federal issue. It is a States’ Rights issue only.

This raises two problems. First, the 16th Amendment forbids the states from denying “to any person within its jurisdiction the equal protection of the laws.” Marriage, as a civil contract, is an individual right to enter into a voluntary agreement. It is not a group right belonging to two people. Such an idea is absurd, given our understanding of individual liberty, but it also assumes that two people share a right before they meet. Whoever you will marry shares this right with you. That’s ridiculous. Defining the individual right to contract down from the right to enter into a contract with another competent, willing individual to a right to enter into a contract with another competent, willing, opposite-sex individual is anti-individual liberty. That incorrectly achieves equal at the expense of liberty.

Second, states rights appears multiple times in Mr. Root’s positions. No government has rights. Governments have powers. These powers are granted from the people, not because the government has a legitimate claim to them, but because the people trade some amount of liberty in exchange for specific outcomes. I trade my “right” to harm to protect my right to remain free from harm. Government does not grant rights. It protects inherent rights.

In other words, it is little consolation to be oppressed by my neighbors through my state/local government instead of my countrymen in another state through our federal government. This sort of nonsense appears multiple times in Mr. Root’s positions. It’s the same fallacy made by Ron Paul in too many of his positions. (Remember, Ron Paul is not a libertarian.)

Here’s one last position from Mr. Root:

I support the separation of church and state. However I also believe in tolerance for rights of religious Americans too. I believe in school prayer, God in our pledge of allegiance and on our currency. To remove these religious symbols would be to deny the rights and freedoms of religious Americans. I would also protect the rights of those who do not believe in God or religion to not participate in any public prayer or religious activities.

This is troubling. Removing these religious symbols from the private sphere would be to deny the rights and freedoms of religious Americans. To remove them from the public sphere denies nothing.

School prayer is fine, in a private school. That is not what is up for debate. Arguing otherwise suggests dubious integrity. Mention of God in our pledge of allegiance, as legislated by Congress, is problematic. We do not have a private currency, and the government actively seeks to stamp out such efforts, so “In God We Trust” on U.S. currency is a violation of the First Amendment. While the latter two are minor in scope, if not principle, none of the three are valid in government as public requirements. They have nothing to do with tolerance for individual rights.

I do not wish to suggest that there is a libertarian purity test based on policy recommendations. I don’t; I think that fallacy is counter-productive. However, I think there is a valid libertarian purity test on thought process. If Mr. Root argues for legislation to grant the line item veto, he ignores the Constitution’s text. Where Mr. Root argues for states’ rights, he misses the point of individual liberty and government of, for, and by the people. Where Mr. Root argues to overlook Congressional indifference to the First Amendment in favor of “tolerance”, he abandons the reasoning for a Constitution. None of these positions rely on libertarian principles, which is a valid criteria for judging a candidates credentials.

To clarify, the big libertarian test right now seems to be Iraq. Most libertarians agree that our experiment in Iraq is a mistake. It is a preemptive war without justification based in national security. Unlike Afghanistan, a legitimate war of self-defense, Iraq carried no such immediate threats to U.S. security.

I agree with that analysis. I also think there are libertarians who disagree. I don’t mean “people who (mistakenly) call themselves libertarians” disagree. For example, Timothy Sandefur supports the war in Iraq on national security grounds. I disagree with his conclusion from the facts, but he is basing his support on his intellectually-considered conclusion within the framework of libertarian principles of self-defense. It’s okay to disagree with him. Such debate pushes us to a better conclusion, in general. But it would be idiotic to suggest that he is not a libertarian because of this policy recommendation.

As another example, I’m clearly against any circumcision of a child that isn’t based in an immediate medical need. That is a libertarian position focused on the individual’s right to keep his foreskin (i.e. his property) and his right to remain free from harm. Freedom of/from religion is also an individual right, with the child having a claim equal to his parents. It is an invalid excuse. There can be no libertarian disagreement on this.

When there is a medical issue, there can be a disagreement on whether that medical issue requires circumcision rather than some less invasive treatment. The answer requires judgment. I would seek out those less invasive treatments for a child before resorting to circumcision. I think ethics demand all parents and medical personnel do the same. But proxy consent in the face of legitimate medical issues for a legally incompetent individual is valid in libertarian principle, even when it leads to child circumcision.

The likelihood of having the perfect candidate without running for office myself is almost non-existent. Ultimately, the best we can hope for is a candidate who process information
through the correct filters. It’s too much to expect the same conclusion on every issue. It’s reasonable to expect the same respect for individual rights.

House Votes to Shift the Deck Chairs

I’m hard-pressed to imagine a scenario in which simplifying the tax structure is bad. Although this legislation would only achieve it on the front-end, replacing simplification with complication elsewhere, the front-end suggestion is good.

The House of Representatives brushed aside threats of a White House veto yesterday and voted 236 to 182 in favor of an $18 billion tax package that would rescind a tax break for the five biggest oil companies and use the revenue to boost incentives for wind and solar energy and energy efficiency.

There is no reason for Congress to pick winners and losers by giving tax breaks. (Again, redirecting those breaks to favored groups is not a principled stance by Congress.) As always, Congress is horribly short-sighted and unaware of unintended consequences.

The Bush administration, Republican lawmakers and big oil companies condemned the bill, which they said would raise fuel prices for consumers, discourage oil and gas exploration in the United States and unfairly discriminate against a single industry while other manufacturers continue to enjoy tax breaks.

Of course fuel prices will go up. If I could find a reason not to be cynical, I’d ignore the probability that members of Congress want this to happen so they have a continuation of one of their favorite targets to bully in populist, economically-ignorant rants. But I’m cynical, so I think they know this. How else to explain the nonsense my local Fox affiliate bombarded me with last night in claiming that a gallon of gasoline could rise to the “outrageous” price of $4. Adjectives require more than one data point.

That the price of a gallon of gas already includes – inefficiently – the $18 billion cost of the existing tax break. Removing inefficient tax breaks would push the price of gas (closer) to its true market price. That’s problematic?

On the second point, profit alone should encourage or discourage oil and gas exploration. Let the market figure out the details. The ongoing results will also work to push for alternative energy without requiring shifting tax breaks from one group to another. And, no, arguing that one industry will get tax breaks does not justify giving them to another.

Competition is better than government fiat.

Lance Ulanoff, writing in PC Magazine, explains why he was wrong on who would win the Blu-ray/HD-DVD battle.

I finally figured out why I was so dead wrong about the HD DVD versus Blu-ray format war. I should have analyzed the sides—Sony and Toshiba—not as two countries going to war, but as opponents in a close-quarters boxing match. Had I done so, I would have properly assessed each of the technology’s assets and deficits.

Mr. Ulanoff was wrong in prognosticating consumer technology for a magazine. No harm, no foul. We all make judgments, whether we commit them to print or not, that turn out wrong. We’re all human.

Remember that every time a central planner comes along and tells us confidently why we should choose X (with money taken from taxpayers) and outlaw Y.