Rally ‘Round the Flag, Liberals

Stars and Stripes

 

Writing in the Washington Post, Kate Cohen says, Let the extreme right have the “Betsy Ross flag,” and “the left wing can just take back that boring ordinary flag we all use every day.” Why would anyone want the Betsy Ross flag, she asks:

I mean, honestly, if you’re into the Betsy Ross flag, I assume it’s because America was great back in 1777, when only white male landowners could vote and slavery was legal in all 13 colonies.

Well, I can’t speak for the extreme right. But speaking as an American history major and a lover of America’s libertarian roots, that’s not how I see it. I think the flag with 13 stars and 13 stripes represents the people who launched the first great national liberation movement to throw off their distant imperial overlords and did so with the argument that all men were created equal, endowed with the inalienable rights of life, liberty, and the pursuit of happiness. True, that promise was very imperfectly realized, and is still imperfect, but we’ve made progress in ensuring that all people are equal in the eyes of the law, with their rights guaranteed and protected. And that Declaration served as a guidestar for that progress. As Andy Craig wrote last week on July 4, those words were used by Frederick Douglass and Abraham Lincoln and Martin Luther King Jr. to challenge the nation to make good on its promissory note. And by the feminists at Seneca Falls to insist that “all men” must include women, too. And he could have added, by the advocates of equal liberty for gay people.

That’s not a flag that liberals – people who believe that the role of government is to protect everyone’s rights and freedom – should give up.

And by the way, people who don’t believe that all people are created equal? They shouldn’t fly the flag of the American Revolution. There are plenty of flags of monarchic, theocratic, ethnic, fascist, or communist states to choose from.

Posted on July 12, 2019  Posted to Cato@Liberty

David Boaz discusses Rep. Justin Amash and what role he plays in the modern libertarian movement on NPR’s Morning Edition

Posted on July 12, 2019  Posted to Cato@Liberty

RIP Ross Perot, the Billionaire Who Ran for President

Ross Perot, the billionaire entrepreneur who in 1992 became the most successful independent or third-party presidential candidate since Theodore Roosevelt in 1912, has died at 89.

Many people say that Perot, running on an anti-deficit platform, cost President George H. W. Bush reelection. I don’t think so. The most impressive political prediction I ever made was around June 1992, when I saw a poll that showed Bill Clinton running third behind Perot and Bush (it was probably the Gallup Poll shown here, with Perot 39, Bush 31, and Clinton 25). I told colleagues then, “This poll shows that Clinton will win, because third-party candidates always fade and the most important number in this poll is that only 31 percent of voters want to reelect the president.” Clinton would have won a majority if voters hadn’t had a third option.

Perot has some obvious similarities with President Trump – a businessman with no political experience, who opposed free trade and the recent Gulf War, promised to go to Washington to “take out the trash and clean out the barn,” had a predilection for conspiracy theories, and was enough of a celebrity to announce his candidacy on Larry King’s popular CNN show. However, his big issue was the $4 trillion national debt – those were the good old days! – and the deficits being run up by both parties. And instead of insulting tweets and ranting speeches, Perot’s stock in trade was 30-minute television ads full of charts and graphs, backed up by a 50-page economic plan promising cuts in domestic spending and tax hikes on high incomes and gasoline.

Perot was reported to have spent $65 million of his own money on his campaign (the Democratic and Republican candidates got $55 million each in taxpayer money in exchange for pledges by the candidates to limit direct campaign contributions, but they still managed to raise about $60 million each in “soft money”). In one sense, Perot’s campaign was a perverse result of federal campaign finance regulations. The Federal Election Campaign Act severely restricted how much money one could contribute to a campaign – unless you were the candidate. You could spend as much of your own money on your own campaign as you wanted. So the only way that Perot could spend $65 million (he tossed around suggestions of spending $100 million) was to run for president himself. But maybe the country would have been better off if he had been able to donate that money to, say, the well-respected Sen. Warren Rudman of Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act fame. Similarly, maybe it would have made more sense for Steve Forbes to donate $38 million to supply-side evangelist Rep. Jack Kemp in 1996 rather than to run himself. 

Ross Perot did have one positive impact on American politics. He made spending, deficits, and debt a real political issue, and that surely played a role – along with the booming economy – in bringing down deficits during the Clinton administration.

Perot also demonstrated that it’s extremely difficult to run an even modestly successful presidential campaign outside the two major parties unless you are both a billionaire and a celebrity.

Posted on July 9, 2019  Posted to Cato@Liberty

David Boaz discusses the 2020 election on Sinclair Broadcast Group

Posted on July 8, 2019  Posted to Cato@Liberty

Lee Iacocca, RIP

It is advised to speak no ill of the dead. So I don’t. I just add a bit of context to the headlines calling Lee Iacocca “the man who saved Chrysler.” With a hat tip to David Henderson, who dug up Cato Policy Analysis no. 4, from 1980, which David wrote. The title was “A Step Toward Feudalism: The Chrysler Bailout,” and here’s some of what he wrote:

Since the summer of 1979, Chrysler executives have sought a federal subsidy to save their company from possible bankruptcy, and they appear to be near their goal. (Because the subsidy Congress passed December 21, 1979, will be given only if Chrysler receives private financing and reduces employees’ wages, whether the company will get the subsidy is uncertain at this writing.) They have talked throughout their negotiations with the government as if a bankruptcy would necessarily cause them to shut down, but if Chrysler went bankrupt it would agree with its creditors on a future repayment scheme and could survive and even thrive. The company’s survival would depend on whether projected revenues exceeded or fell short of projected costs. However, Chrysler executives have talked as if the company would necessarily fail, and therefore I will take them at their word and assume that it will indeed go out of business if the government does not subsidize it.

Should the U.S. government let Chrysler fail? Let’s reword the question: Should the government force taxpayers to subsidize a company whose products do not meet the market test? The answer becomes clear: No. Why should taxpayers have to pay to keep a firm in business? As consumers and producers, they have shown that they do not want to keep it going. Consumers are not willing to pay enough for Chrysler’s products to cover the company’s costs; producers — including suppliers to Chrysler and Chrysler employees — are not willing to sell their goods and services at a cost below Chrysler’s projected revenues. Consumers and producers have spoken, and that should be the end of it.

Chrysler executives reply that if the company fails their workers will be unemployed and their suppliers will lose business and lay people off. But surely this unemployment of resources cannot last long: if this were a likely prospect, Chrysler would not be in its present bind. Precisely because the resources have higher-valued alternate uses, Chrysler cannot afford to pay them out of projected revenues. Other potential users of the resources are willing to pay more than Chrysler can. The cost of a resource is its value in the highest-valued alternate use, and therefore to say that Chrysler’s costs exceed its revenues is to say that Chrysler resources are worth more elsewhere.

Henderson pondered the political economy implications of the bailout:

If Chrysler receives the subsidy, its executives will soon learn that the man who pays the piper calls the tune. They will find that some of their business decisions require the approval of a federal official. Then, if they do not object (and how can they?), they will find more decisions subject to government approval. There will even be a push to have the federal government receive shares in Chrysler in return for the subsidy. John Kenneth Galbraith has started this offensive already. He asks in a letter to the Wall Street Journal (August 13, 1979) “… if as taxpayers we are to invest one billion dollars in Chrysler, could we not be accorded an appropriate equity or ownership position? This is thought a reasonable claim by people who are putting up capital.”

And that’s not all. The executives will find themselves on much weaker ground fighting off increases in government power that hurt them. They cannot use moral arguments (no one would take them seriously) or arguments of any other kind against big government. John Kenneth Galbraith makes this point in the same letter: “Could we not,” he says, “ask that all corporations and corporate executives that approve or acquiesce by their silence in this expansive new public activity, refrain most scrupulously from any more of this criticism of big government.” If Chrysler receives the subsidy, one more barrier to the growth of government will have crumbled.  

Read the whole thing.

Special bonus: In 1979 I worked for a group of free-market business leaders, the Council for a Competitive Economy. The New York Times reported on our campaign against the Chrysler bailout.

Posted on July 3, 2019  Posted to Cato@Liberty

Milan Is the Latest Olympic Loser

The headlines say that Milan and Cortina d’Ampezzo, Italy, have been awarded the 2026 Winter Olympics. Ten years from now Italians may look back on today as a disaster. 

More and more cities are realizing that Olympic games are glamorous but not economically sound. I made that point four years ago when Boston withdrew its bid to host the 2024 Summer Olympics:

The [Boston] critics knew something that the Olympic enthusiasts tried to forget: Megaprojects like the Olympics are enormously expensive, always over budget, and disruptive. They leave cities with unused stadiums and other waste.

E.M. Swift, who covered the Olympics for Sports Illustrated for more than 30 years, wrote on the Cognoscenti blog a few years ago that Olympic budgets “always soar.”

“Montreal is the poster child for cost overruns, running a whopping 796 percent over budget in 1976, accumulating a deficit that took 30 years to repay. In 1996 the Atlanta Games came in 147 percent over budget. Sydney was 90 percent over its projected budget in 2000. And the 
Athens Games cost $12.8 billion, 60 percent over what the government projected.”

Bent Flyvbjerg of Oxford University, the world’s leading expert on megaprojects, and his co-author Allison Stewart found that Olympic Games differ from other such large projects in two ways: They always exceed their budgets, and the cost overruns are significantly larger than other megaprojects. Adjusted for inflation, the average cost overrun for an Olympics is 179 percent.

After the 2016 Summer Olympics in Rio de Janeiro, sports columnist Nancy Armour wrote in USA Today, “The legacy of the Rio Olympics is a farce.” She continued:

The closing ceremony was six months ago Tuesday, and already several of the venues are abandoned and falling apart. The Olympic Park is a ghost town, the lights have been turned off at the Maracana and the athlete village sits empty…. the billions that were wasted, the venues that so quickly became white elephants, the crippling bills for a city and country already struggling to make ends meet…

Columnist Anne Applebaum predicted in 2014 that future Olympics would likely be held only in “authoritarian countries where the voters’ views will not be taken into account” — such as the two bidders for the 2022 Winter Olympics, Beijing and Almaty, Kazakhstan. Her prediction seemed to be borne out a year later when the people of Boston revolted against the city’s establishment – business leaders, construction companies, university presidents, the mayor, etc. – and forced the city to withdraw its bid for the 2024 summer games. Since then, however, Applebaum’s faith in democracy seems to have been too high, as upcoming games will be held in Tokyo, Paris, Milan, and Los Angeles (along with China).

In Cato Policy Report, Flyvbjerg examined “the ‘iron law of megaprojects’: over budget, over time, over and over again.” The Olympics are glamorous, and nobody does glamour better than Milan, but they’re not the road to prosperity. 

Posted on June 24, 2019  Posted to Cato@Liberty

Justin Amash and His Opponents

Rep. Justin Amash (R-MI) is the most libertarian member of Congress. His view of his role in Congress is deeply rooted in his commitment to the Constitution. Amash told the New York Times in 2011, “I follow a set of principles, I follow the Constitution. And that’s what I base my votes on. Limited government, economic freedom and individual liberty.”

Amash has a remarkable knack for drawing opponents who are ignorant or dismissive of the Constitution. His 2014 primary opponent, Brian Ellis, strikingly dismissed Amash’s principled, constitutional stand: “He’s got his explanations for why he’s voted, but I don’t really care. I’m a businessman, I look at the bottom line. If something is unconstitutional, we have a court system that looks at that.” 

Most members of Congress vote for unconstitutional bills. Few of them make it an explicit campaign promise.

And now, just today, one of his pro-Trump challengers in next year’s primary, Tom Norton, “passed out press releases calling on the House to expel Amash for allegedly failing to represent constituents in a district that backed Trump.”

Needless to say, Congress does not and would not expel a member for such a reason. Not that it matters, in 2016 Amash carried his district by 22 points while Trump had a 9-point margin.

Meanwhile, here’s an article on Amash’s differences with Sen. Rand Paul (R-KY) on what libertarians should think about the behavior described in the Mueller Report.  

Posted on June 14, 2019  Posted to Cato@Liberty

Memorial Day Thoughts

Benjamin Franklin said, “There never was a good war or a bad peace.” Given Franklin’s leadership in the struggle for American independence, we can infer that he did not think that there never was a war that was necessary, or a war that was worth its cost. But he reminds us that even necessary wars have terrible costs.

I thought about Franklin when I read an eloquent column on the meaning of Memorial Day by the novelist Mark Helprin, who is also a senior fellow at the Claremont Institute. He lamented:

Though if by and large we ignore the debt we owe to those who fell at Saratoga, Antietam, the Marne, the Pointe du Hoc, and a thousand other places and more, our lives and everything we value are the ledger in which it is indelibly recorded.

It’s a worthy sentiment, one heard frequently in Memorial Day addresses, and we do indeed owe our lives and our pursuit of happiness to the freedom that America’s soldiers have sometimes had to defend.

But I can’t help wondering: Have all of America’s wars have been necessary to American freedom? Helprin mentioned the Second Battle of the Marne, the great turning point of World War I and the first battle in which Americans started experiencing the enormous casualties that Europeans had been facing for nearly four years. The problem is that World War I was a catastrophe, a foolish and unnecessary war, a war of European potentates that both England and the United States could have stayed out of but that became indeed a World War, the Great War. In our own country, the war gave us economic planning, conscription, nationalization of the railroads, a sedition act, confiscatory income tax rates, and prohibition. Internationally, World War I and its conclusion led directly to the Bolshevik revolution, the rise of National Socialism, World War II, and the Cold War. World War I was the worst mistake of the 20th century, the mistake that set in motion all the tragedies of the century. The deaths of those who fell at the Marne are all the more tragic when we reflect that they did not in fact serve to protect our lives and all that we value.

Did the wars in Vietnam and Iraq protect American lives and liberties? In 2015 Republican presidential contender Jeb Bush said that discussing whether the Iraq war was a mistake “does a disservice to a lot of people who sacrificed a lot.” It’s understandable that an aspiring commander-in-chief would want to spare the feelings of those who lost a loved one in Iraq. But surely it’s more important that a commander-in-chief ask tough questions about when it’s advisable to go to war, a point voters should keep in mind over the next 18 months.

In my book The Libertarian Mind, I wrote about the effects of war: not just death on a large scale but the destruction of families, businesses, and civil society. And thus:

War cannot be avoided at all costs, but it should be avoided wherever possible. Proposals to involve the United States—or any government—in foreign conflict should be treated with great skepticism….We should understand the consequences of war for our entire social order and thus go to war only when absolutely necessary.

On this weekend we should mourn those who went to war, such as my father, who planned and participated in the liberation of Europe, and his brother who was lost off the coast of Normandy, and we should resolve not to risk American lives in the future except when our vital national interests are at stake.

Posted on May 24, 2019  Posted to Cato@Liberty

California’s High-Speed Train Has Done a Lot More Good for Big Consultants than for Taxpayers or Riders

The ongoing saga of California’s high-speed bullet train may end up being as classic a story of Democratic politicians’ hubris as the Solyndra debacle. The difference is that the bullet train is still going – well, not the train itself, but the taxpayer spending on the planning – despite some optimism earlier this year that Gov. Gavin Newsom was going to put the project out of its misery. A Los Angeles Times story last week by Ralph Vartabedian is a deep dive on the consulting companies that have been intimately involved in the whole process. Here’s the most revealing nugget:

The rail authority’s consultants are hardly household names, but they are politically powerful and made major contributions to support the 2008 political campaign for the bullet train bond. They have staffed their ranks with former high-level bureaucrats, and their former executives have occupied key government posts….

The consultants, however, have played a key role in the political success of the project. Along with labor unions, consultants helped fund the campaign for the $9-billion bond that is paying everybody’s salaries, including their own.

Engineering and construction firms contributed $837,000 to the bond campaign, second only to the $1.6 million spent by various unions, according to a Times review of campaign filings. WSP put $107,000 into the campaign. There was no organized opposition to the bond measure. It passed with 52.7% support, but its popularity has dropped in public opinion polls ever since.

The consultants continue to provide political muscle for the project. A revolving door provides lucrative job opportunities for state and federal officials to enter higher-paying private jobs.

The firms and the unions that expected to profit from building the rail line paid for the campaign to persuade voters to approve the bond issue that would commit taxpayers to the project. And the consultants move in and out of government to make sure the project – if not any actual train – stays on track. Political scientists write about an “iron triangle” of government agencies that handle a particular issue or project, special interests that benefit from it, and legislative committees that oversee it. The flow of personnel – the “revolving door” – is part of that cozy process.

So how’s all that coziness working out for California taxpayers? Here’s the basic story:

When California shifted its bullet train plan into high gear in 2008, it had just 10 employees to manage and oversee design of the largest public construction project in state history.

Consultants assured the state there was little reason to hire hundreds or thousands of in-house engineers and rail experts, because the consultants could handle the heavy work themselves and save California money. It would take them only 12 years to bore under mountains, bridge rivers and build 520 miles of rail bed — all at a cost of just $33 billion….

But significant portions of this work have been flawed or mismanaged, according to records reviewed by The Times and interviews with dozens of people involved in the project. Despite repeated warnings since 2010 about weaknesses in its staffing, the rail authority believed it could reduce overall costs by relying on consultants and avoiding a large permanent workforce. But that strategy has failed to keep project costs from soaring. Ten years after voters approved it, the project is $44 billion over budget and 13 years behind schedule.

And here’s a typical example of economic analyses of stadiums, convention centers, mass transit, and other megaprojects:

At one time, Cambridge Systematics, the consultant that developed ridership models, estimated that more than 90 million people would ride the trains every year, based on an overly optimistic assumption that 90% of motorists along the route would switch to trains, said David Brownstone, a UC Irvine economics professor who reviewed the work of consultants that provided ridership estimates.

“Once we pointed out all the problems, they lowered it to 25 million and characterized it as a minor change,” he said. “Calling that a minor adjustment was a flat-out lie. The mistakes were obvious and crude.”

In Brownstone’s opinion, the rail authority didn’t question the calculations because high ridership estimates supported its revenue projections.

“Some of these consultants will tell you whatever you want to hear for a fee,” Brownstone said.

This Wednesday the rail authority plans to send the legislature “a detailed plan on building a partial operating system from Bakersfield to Merced for $16 billion to $18 billion.” You can drive from Bakersfield to Merced in 2.5 hours according to Google Maps. You can already take a train for $27 that covers the distance in two hours and 45 minutes, and the consultants promise that the high-speed train would cut that by 45 minutes. And all for only God-knows-how-many billions of dollars.

At only $535 million in unpaid taxpayer loans, Solyndra looks like a bargain.

Posted on April 29, 2019  Posted to Cato@Liberty

David Boaz discusses libertarianism on the Seen and the Unseen podcast

Posted on April 22, 2019  Posted to Cato@Liberty

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