Libertarianism and Big Business: A Dissent by David Boaz

The March-April issue of Cato Policy Report featured a discussion among Timothy Carney, Uwe Reinhardt, and Ross Douthat of Carney's book Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. The tenor of the discussion was reflected in the title, "Big Business, Big Government, and Libertarian Populism." Richard L. Gordon, a distinguished economist emeritus at Pennsylvania State University and a Cato adjunct scholar, took strong issue with all three commenters and sent us the following rebuttal, which we're pleased to publish here:
The March/April Cato Policy Report covered a January 2010 Cato Book Forum on Timothy P. Carney’s Obamanomics. Carney summarized his book and there were responses from Uwe Reinhardt, a Professor at Princeton noted for advocacy of strong government intervention in health care, and Ross Douthat, a (first-year) New York Times columnist, a self-styled conservative who (from scanning his columns) seems a weak one. The result was three tirades about how big business runs government. It is surprising in the twenty-first century to see outside of, movies, and television dramas such naïve attacks on the power of big business. This is not the libertarianism that I know. However, superficially plausible dominance theories are too convenient not to revive frequently, regardless of enormous refutations. Thus, some key, familiar points need recollection. The charge of big-business dominance has at least three flaws. First, it is a myth. Politicians created the massive growth of government with more input from intellectuals than from business executives. Second, it reverses causation; government ensnares industry. Third, it is absurd since big business, however defined, consists of diverse, often conflicting companies. Read more...

Posted on April 20, 2010  Posted to Cato@Liberty

Libertarians, Independents, and Tea Parties by David Boaz

David Kirby and I have an op-ed in today's Politico on libertarians as the "leading edge" of the independent vote:
Who are these centrist, independent-minded voters who swung the elections in Virginia, New Jersey and Massachusetts to Republican candidates and are likely to be crucial in races this fall?... Libertarians seem to be a leading indicator of this trend in centrist, independent-minded voters, based on an analysis of many years of polling data. We estimate that libertarians compose from 14 percent to 23 percent of voters nationally. They are among the few real swing voters in U.S. politics.
We note that libertarian voters started to swing against the Republicans in 2004, before most Republicans did. Then independents swung hard to the Democrats in 2006 and 2008. By 2008, though, libertarian voters had apparently recoiled against the prospect of an Obama-Pelosi-Reid government at a time of financial crisis. By November 2009 and January 2010, a majority of independents had followed the libertarians in turning against the Democrats' big-government agenda. We go on to say:
So, if many of these centrist, independent voters are indeed libertarians, why aren’t libertarians better recognized? First, the word “libertarian” is still unfamiliar — even to many who hold “fiscally conservative, socially liberal” views. Pollsters rarely use it.... Second, libertarian voters have traditionally been less likely to organize. In the past three years, however, libertarians have become a more visible, organized force in politics — particularly as campaigns move online. Ron Paul’s campaign demonstrated that libertarians can organize and raise large sums of money on the Internet. Meanwhile, tea party protests showed that libertarian-inspired anger can boil over into spontaneous, nationwide rallies. On Sept. 12, 2009, more than 100,000 people marched on Washington to protest federal spending and the growth of government — many carrying nerdy, libertarian-inspired signs such as “I Am John Galt,” referring to the protagonist of Ayn Rand’s “Atlas Shrugged.” Libertarians are emerging as a force within U.S. politics. While political leaders such as Sarah Palin and Mike Huckabee and media stars like Glenn Beck and Rush Limbaugh are icons to a “conservative base,” it is not yet clear what political leaders might represent these libertarian voters. But with candidates working to capitalize on voter angst in the 2010 midterms, there are sure to be many politicians angling to lead this libertarian vote.
Meanwhile, a new Politico/TargetPoint poll of people who attended the April 15 Tea Party in Washington found "two camps" there: "one that’s libertarian-minded and largely indifferent to hot-button values issues and another that’s culturally conservative and equally concerned about social and fiscal issues." They also found a difference in intensity: "Asked to rate their level of anger about 22 issues on a scale of one (not angry at all) to five (extremely angry), the issue that drew the most anger: the growing national debt. The least: courts granting same-sex couples the right to marry. Twenty-four percent said they’re 'not at all' upset about gay marriage." A recent CBS/New York Times poll found "Tea Party supporters" more conservative than Americans in general on gay marriage. We may be seeing a difference between people who say they like the Tea Parties and those who actually turn out for Tea Party rallies, or possibly Tea Partiers in the Washington area are more socially liberal than they are in other regions. In particular, the Politico/TargetPoint poll used some of the same questions, drawn from the Gallup Poll and other surveys, that Kirby and I have used to identify libertarians in our "libertarian vote" studies. Here's the analysis from TargetPoint (emphases added):
IDEOLOGY The Tea Party is, unsurprisingly, for small-government and cuts to taxes and spending; but there is a clear split when it comes to government promotion of moral values.
  • Overwhelming majorities of 88% and 81% say government is trying to do too many things best left to individuals and businesses, and that government should cut taxes and spending, respectively. But in terms of values, Tea Party attendees are split right down the middle. A slim majority of 51% say “Government should not promote any particular set of values”, versus 46% that say “Government should promote traditional family values in our society.”
  • We can compare these to Gallup data collected in September of 2009: nationally, 57% said government was doing too much (among Republicans it was 80%), while 53% said government should promote traditional values (among Republicans it was 67%). So the Tea Party is actually more conservative than national Republicans when it comes to the size and role of government, but less conservative than national Republicans in terms of government promotion of traditional values.
  • Indeed, combining the responses to some of these questions is a revealing ideological exercise: 43% of attendees said government is doing too much AND that government should promote traditional values, a distinctly conservative view; 42% said government is doing too much AND that government should NOT promote any particular set of values, an ideological view used by the Cato Institute as an indicator of libertarianism (currently 23% of all Americans fit into this category).
  • This split between a libertarian Tea Party and a socially conservative Tea Party is reinforced when we consider the combination of all three ideological questions we asked, questions on the size and role of government, the role of traditional values, and the dynamic between taxes and spending. If we count the number of times a respondent gave the “conservative” answer (government should do less, it should promote traditional values, and cut taxes and spending), 40% of Tea Party attendees gave the conservative answer all three times, and 42% gave the conservative answer only two times. Those that gave only two conservative responses were most likely to defect on the role of traditional values.
Anticipating criticisms, let me note that no survey is definitive, and few survey questions are definitive. It's possible that some respondents would say "government should do more to solve our country's problems" meaning that it should be cutting waste and reducing the national debt. And some people might understand "government should promote traditional values" to mean traditional values like self-reliance, thrift, and standing on your own too feet. But overall, I think these questions help us to separate broadly libertarian responses from conservatives and (social-democratic) liberals. And this poll suggests that Tea Partiers are not just conservative Republicans. At least some of them are more libertarian. Politicians trying to appeal to them should keep that in mind.

Posted on April 19, 2010  Posted to Cato@Liberty

Washington Rakes in the Money by David Boaz

The Washington Post launches a new weekly today, Capital Business, covering business in the Washington area. The cover of the first edition is striking: As the cover line exults, "There's a wave of government money headed our way -- bringing opportunities in health care, green energy, cybersecurity and education." Of course, it's not actually "government money" -- it's money taxed or borrowed from those who produce it in the 50 states and then sprinkled liberally around the Washington area, which now contains 6 of the 10 richest counties in America. If the Capital Business cover image had a few more arms, it would look like the logo for this year's Cato University, "Confronting Grasping Government":

Posted on April 19, 2010  Posted to Cato@Liberty

Robert McCartney’s Love Affair with Government by David Boaz

Washington Post columnist Robert McCartney says he "differ[s] strenuously with the [Tea Party] protesters on about 95 percent of the issues." Considering that the closest thing to an official center of the Tea Party movement, the Tea Party Patriots network, says that it seeks "public policy consistent with our three core values of Fiscal Responsibility, Constitutionally Limited Government and Free Markets," that's disappointing to hear.  McCartney does allow as how
I found that I agreed heartily with the tea partiers on what is perhaps their single biggest concern: that America's swelling government debt seriously threatens our long-term prosperity.
I part ways with the tea party on how to solve the problem. They want only to slash government. I'd be willing to raise taxes as part of the deal.
"Willing"? Actually, raising taxes is sort of an idee fixe for McCartney. After 27 years shaping the local news coverage at the Post as a writer and editor, he became a columnist in June 2009. Since then, he's written many times about the urgency of raising taxes: Converting Fairfax County into a city only makes sense "if it's used to raise taxes to get more money for roads." (July 5) Democratic gubernatorial candidate Creigh Deeds should just be honest and "Propose to raise taxes to fix the roads. Yes, you read that correctly. Raise taxes" because "The public sector needs to expand." (August 9) "Deeds is willing to raise taxes for transportation, while McDonnell isn't, and some kind of tax increase is the only way to do the job." (September 18) One observer of Gov. Robert McDonnell's inaugural address (whattaya know, Deeds's willingness to raise taxes yielded him a whopping 41 percent of the vote)  "predicted that McDonnell would have to raise taxes to pay for transportation despite promises not to do so. 'There is no other choice,' Bhandari said." (January 17)  The region must come up with another $850 million a year in revenue for its costly, poorly run subway system. (January 21) As I wrote in response to his August 9 column on the need for a larger public sector in Virginia:
Virginia’s state budget doubled between 1996 and 2006, from $17 billion to $34 billion. And the governor’s office estimated last December that the state would spend $37 billion in 2009 and $37.6 billion in 2010. Thanks to the recession, and to the state’s habit of spending during good years as if the party would never end, those numbers may drop slightly. But even with the current shortfalls, the budget’s gone up by $20 billion in the past 14 years, and they can’t find enough to fix the roads? What have they spent that extra $20 billion on?
Unfortunately, it is a constant frustration to McCartney and his Post colleagues that, as economist Gregory Clark bemoaned that same day in a Post guest column, “The United States was founded, essentially, on resistance to taxes, and to this day, an aversion to the grasping hand of the state seems fundamental to the American psyche.” But their typically American resistance to tax increases isn't the only thing that bothers McCartney about the Tea Partiers. He also notes, "Some participants had far-out views. I heard proposals to repeal the progressive income tax, abolish the Federal Reserve Board and privatize the U.S. Postal Service." It seems like McCartney just never met a government agency he didn't love. But his definition of "far-out" is open to challenge. Massachusetts, arguably the most liberal state in the union, narrowly defeated a proposal to repeal the state income tax in 2002, so maybe that idea is not so far-out once you get beyond the Beltway. And there are Nobel laureates who want to abolish the Fed. As for privatizing the postal service, well, he's got a point there. If we privatized the postal service, as a few backwater countries like Germany and Japan have done, the next thing you know, people would want to privatize the phone company. And then where would we be? (P.S.: McCartney also writes, "The tea party has been called an heir of Alabama's segregationist governor George Wallace. It certainly shares his anti-government worldview, if not his aggressive racism." This is just a smear. McCartney acknowledges that he didn't find any racism at the Tea Party he attended. I doubt that most of the Tea Partiers even know who George Wallace was. And I'm not sure McCartney does, either, as Wallace was certainly not "anti-government" in any coherent way. He was a big-spending, "soak the rich" populist, both as governor and as presidential candidate.)

Posted on April 18, 2010  Posted to Cato@Liberty

Are Libertarians Anti-Government? by David Boaz

The term "anti-government" is getting tossed around a lot these days, and used rather indiscriminately to describe libertarians, libertarian-ish Tea Partiers, hate groups, and violent individuals (not to mention opponents of specific leaders and regimes in countries around the world). That's a pretty wide spectrum, and journalists and politicians ought to be more careful with their language. In the meantime, I'm republishing here a Cato Policy Report editorial that I published in 1998: --------------  For the past several years, especially since the Oklahoma City bombing, the national media have focused a lot of attention on “anti-government” extremists. Libertarians, who are critical of a great deal that government does, have unfortunately but perhaps understandably been tossed into the “anti-government” camp by many journalists. There are two problems with this identification. The first and most obvious is that many of the so-called anti-government groups are racist or violent or both, and being identified with them verges on libel. The second and ultimately more important problem is that libertarians are not, in any serious sense, “anti-government.” It’s understandable that journalists might refer to people who often criticize both incumbent officeholders and government programs as “anti-government,” but the term is misleading. A government is a set of institutions through which we adjudicate our disputes, defend our rights, and provide for certain common needs. It derives its authority, at some level and in some way, from the consent of the governed. Libertarians want people to be able to live peacefully together in civil society. Cooperation is better than coercion. Peaceful coexistence and voluntary cooperation require an institution to protect us from outside threats, deter or punish criminals, and settle the disputes that will inevitably arise among neighbors—a government, in short. Thus, to criticize a wide range of the activities undertaken by federal and state governments—from Social Security to drug prohibition to out-of-control taxation—is not to be “anti-government.” It is simply to insist that what we want is a limited government that attends to its necessary and proper functions. But if libertarians are not “anti-government,” then how do we describe the kind of government that libertarians support? One formulation found in the media is that “libertarians support weak government.” That has a certain appeal. But consider a prominent case of “weak government.” Numerous reports have told us recently about the weakness of the Russian government. Not only does it have trouble raising taxes and paying its still numerous employees, it has trouble deterring or punishing criminals. It is in fact too weak to carry out its legitimate functions. The Russian government is a failure on two counts: it is massive, clumsy, overextended, and virtually unconstrained in scope, yet too weak to perform its essential job. (Residents of many American cities may find that description a bit too close for comfort.) Read more...

Posted on April 16, 2010  Posted to Cato@Liberty

George Will on Judicial Activism by David Boaz

George Will offers conservatives a useful reminder about "judicial activism" and what the Supreme Court ought to be doing:
Conservatives spoiling for a fight should watch their language. The recent decision most dismaying to them was Kelo (2005), wherein the court upheld the constitutionality of a city government using its eminent domain power to seize property for the spurious "public use" of transferring it to wealthier interests who will pay higher taxes to the seizing government. Conservatives wish the court had been less deferential to elected local governments. (Stevens later expressed regret for his part in the Kelo ruling.) The recent decision most pleasing to conservatives was this year's Citizens United, wherein the court overturned part of the McCain-Feingold campaign finance law. The four liberal justices deplored the conservatives' refusal to defer to Congress's expertise in regulating political speech. So conservatives should rethink their rhetoric about "judicial activism." The proper question is: Will the nominee be actively enough engaged in protecting liberty from depredations perpetrated by popular sovereignty?

Posted on April 15, 2010  Posted to Cato@Liberty

Waking Up at Last by David Boaz

Tony Blankley, former press secretary to Speaker of the House Newt Gingrich, exults in the Washington Times that Americans are waking up "to our heritage of freedom" and to the abuse of the Constitution:
All the following acts have suddenly awakened Americans to their Constitution: (1) The nationalization of car companies and banks; (2) the subordination of the car companies' legal bondholders to union bosses; (3) the creation of trillion-dollar slush funds (the stimulus package) used for, among other purposes, the corrupt purchase of congressional votes; (4) the mandating of individual health insurance purchase against the will of Americans; (5) the attempt to have Obamacare "deemed" to have been enacted, rather than actually publicly voted on by Congress. Amazingly, spontaneously, Americans are educating themselves about the details of our Constitution.
He's absolutely right. All those actions do raise serious questions about whether there are still any constitutional limitations on government, which is to say, whether the Constitution is still in effect, questions that Roger Pilon also raised this week in the Christian Science Monitor. But it would be even better if Americans had noticed the threats to constitutional government a bit earlier, if not during the New Deal or the Great Society, then perhaps during the past decade when, as Gene Healy and Tim Lynch wrote in 2006:
Unfortunately, far from defending the Constitution, President Bush has repeatedly sought to strip out the limits the document places on federal power. In its official legal briefs and public actions, the Bush administration has advanced a view of federal power that is astonishingly broad, a view that includes
  • a federal government empowered to regulate core political speech—and restrict it greatly when it counts the most: in the days before a federal election;
  • a president who cannot be restrained, through validly enacted statutes, from pursuing any tactic he believes to be effective in the war on terror;
  • a president who has the inherent constitutional authority to designate American citizens suspected of terrorist activity as "enemy combatants," strip them of any constitutional protection, and lock them up without charges for the duration of the war on terror— in other words, perhaps forever; and
  • a federal government with the power to supervise virtually every aspect of American life, from kindergarten, to marriage, to the grave.
President Bush's constitutional vision is, in short, sharply at odds with the text, history, and structure of our Constitution, which authorizes a government of limited powers.
But better late than never, and we join Tony Blankley in hoping that the Constitution's limits on the powers of the federal government will once again be an issue in American politics and governance.

Posted on April 14, 2010  Posted to Cato@Liberty

Can Romney Lead the Fight against ObamaCare? by David Boaz

Both the Wall Street Journal and the New York Times have just run major stories on presidential candidate Mitt Romney's difficulties in getting people to understand the difference between his Massachusetts universal-health-care plan, which featured an individual mandate, subsidies, and forbidding insurance companies to deny coverage for preexisting conditions, and the Obama-Reid-Pelosi plan, which features an individual mandate, subsidies, and forbidding insurance companies to deny coverage for preexisting conditions. President Obama is putting Romney on the spot by telling Matt Lauer that his bill is similar to Romney's. Daniel Gross of Newsweek recommends that Obama hire Romney -- someone who has management experience, no current job, and "relevant experience in implementing a large-scale health-care reform program, ideally one that involved using an individual mandate and the private insurance system to attain near-universal health insurance" -- to run ObamaCare. As Romney attacks the Obama bill as an unconstitutional "government takeover," he makes two basic arguments in defending his own plan: First, that the Massachusetts law was passed on a bipartisan basis, hardly a substantive defense. Second, that his was a state plan, not a federal intrusion on state authority. He also offered a "conservative" defense of the individual mandate:
But he did so by adopting a more GOP-friendly vocabulary, declaring it a matter of "personal responsibility" for all people to buy into insurance pools so that "free riders" without insurance can't stick taxpayers with their hospital bills. "We are a party and a movement of personal responsibility," he said at a book signing in Manchester. He invoked the same idea at the college, calling it a "conservative bedrock principle."
That's a point that Stuart Butler of the Heritage Foundation made as far back as 1992, but most conservatives didn't embrace the argument. And they've strongly opposed the mandate in the Obama bill. Conservatives have campaigned for more than a year against the Obama health care bill, with its mandate, subsidies, and insurance regulations. Now they are backing "Repeal It!" efforts and lawsuits to have it declared unconstitutional. Yet such conservative leaders as Rush Limbaugh and the editors of National Review endorsed Mitt Romney, the man who wrote the prototype for ObamaCare, in 2008. Romney is leading Republican polls for the 2012 nomination. Romney just won the straw poll at the Southern Republican Leadership Council (with only 24 percent, to be sure, and just 1 vote ahead of Rep. Ron Paul). Can the Republican effort to defeat President Obama and repeal ObamaCare really be led by the first American political leader to impose a health care mandate on citizens?

Posted on April 12, 2010  Posted to Cato@Liberty

Court Reporting by David Boaz

A North Korean newspaper gushes over a new biography of Dear Leader Kim Jong-Il:
Like many reporters, the biographer describes Mr. Kim in these pages as cool, charismatic, slightly detached: an autodidact with a lawyer’s analytical intelligence and a novelist’s empathetic temperament; an idealist who is also a pragmatist; a politician inclined to be methodical and cautious in his decision making [with] inclination to listen and engage other people.
Oh, wait. In all my cutting and pasting, I transposed some words. This is actually Michiko Kakutani's New York Times review of David Remnick's biography of President Obama. My bad.

Posted on April 11, 2010  Posted to Cato@Liberty

Up from Slavery, Continued by David Boaz

Jacob "Bumper" Hornberger has posted a gracious response to my article "Up from Slavery, " which among other things criticized his essay "Liberal Delusions about Freedom." It's a pleasure to engage in intelligent and civil debate with another committed libertarian. Hornberger says that he should have mentioned the "tragic exception" of slavery in writing about American freedom in the 19th century, and he links to many articles where he did so. I am glad to know that the article I criticized was an exception. Still, I'm not sure that parenthetical asides, as in this first linked article, quite suffice:
With exceptions (slavery being the worst), during the first 150 years of America's history, people were free to live their lives in any way they chose as long as their actions did not entail violence or fraud against others.
Slavery was not just an exception. It was the foundation of the Southern economy. Slaves made up 19 percent of the population at the beginning of the 19th century -- about 50 percent of the Southern population -- and there were four million Americans held in chains in 1860. And of course, one might also note the exclusion of women not just from voting but from property ownership in the early 19th century. So that means that only about 40 percent of "people" were free to live their lives as they chose in the pre-Civil War era. Hornberger goes on to posit a more plausible golden age, 1880:
Let’s consider, say, the year 1880. Here was a society in which people were free to keep everything they earned, because there was no income tax. They were also free to decide what to do with their own money—spend it, save it, invest it, donate it, or whatever. People were generally free to engage in occupations and professions without a license or permit. There were few federal economic regulations and regulatory agencies. No Social Security, Medicare, Medicaid, welfare, bailouts, or so-called stimulus plans. No IRS. No Departments of Education, Energy, Agriculture, Commerce, and Labor. No EPA and OSHA. No Federal Reserve. No drug laws. Few systems of public schooling. No immigration controls. No federal minimum-wage laws or price controls. A monetary system based on gold and silver coins rather than paper money. No slavery. No CIA. No FBI. No torture or cruel or unusual punishments. No renditions. No overseas military empire. No military-industrial complex. As a libertarian, as far as I’m concerned, that’s a society that is pretty darned golden.

Posted on April 9, 2010  Posted to Cato@Liberty

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