He’s No Libertarian

Dana Milbank of the Washington Post warns readers that "Rick Perry is no libertarian." Good point. Now if only the Post had warned voters about Barack Obama back in 2007. And alas, Milbank could be kept busy for the next few weeks writing about presidential candidates who are "no libertarian."

Posted on August 31, 2011  Posted to Cato@Liberty

How Judges Protect Liberty

In my Encyclopedia Britannica column this week, I take a look at "the responsibility of judges to strike down laws, regulations, and executive and legislative actions that exceed the authorized powers of government, violate individual rights, or fail to adhere to the rules of due process." Certainly they don't always live up to those expectations, as Robert A. Levy and William Mellor wrote in The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom The column might have been more timely last summer, when Judge Andrew Napolitano concluded one of his Freedom Watch programs on the Fox Business Channel by hailing four federal judges who had courageously and correctly struck down state and federal laws:
  • Judge Martin L. C. Feldman, who blocked President Obama’s moratorium on oil drilling in the Gulf of Mexico;
  • Judge Susan Bolton, who blocked Arizona’s restrictive immigration law;
  • Judge Henry Hudson, who refused to dismiss Virginia’s challenge to the health care mandate; and
  • Judge Vaughn Walker, who struck down California’s Proposition 8 banning gay marriage.
That was a good summer for judicial protection of liberty. But as I note, there have been more examples this year, reminding us of James Madison's predictions that independent judges would be "an impenetrable bulwark against every assumption of power in the legislative or executive."

Posted on August 30, 2011  Posted to Cato@Liberty

Stop the Madness, President Calderon

The Wall Street Journal covers a single day in Mexico's drug war, a day on which 25 people died in separate incidents. The summary paragraphs tell a story of failure:
Since President Felipe Calderón took office in December 2006, declaring war on traffickers, roughly 43,000 people have been killed in drug-related homicides here, according to government figures and newspaper estimates. The pace of killings is escalating. More than half the dead, 22,000, were killed in the past 18 months, a rate of one every 35 minutes.... Mexico's murder rate has more than doubled, to 22 deaths per 100,000 residents in 2010, in just four years, a period that parallels the drug war. Before that, it had been falling steadily. In the U.S. the murder rate is about 5 per 100,000.
This policy is not working. President Calderon, I beseech you, in the bowels of Christ, think it possible you may be mistaken. Read the advice of President Fox's foreign minister or this discussion by Cato's Ted Galen Carpenter. American policymakers should also recognize that this crisis threatens us -- and that we can help to end it.

Posted on August 29, 2011  Posted to Cato@Liberty

Hurricane Irene as Economic Stimulus

Oh, dear. Oh, dear. No matter how many times economists debunk the broken window fallacy, not a natural disaster goes by that journalists don't try to cheer us up by saying "at least it will stimulate economic growth." This time it's Josh Boak (no relation!), the economics reporter (!) at Politico, who was "educated at Princeton and Columbia." And Sunday afternoon he posted this story:
Irene: An economic blow or boost?
The power outages and shuttered airports may stop the engines of commerce for several days, but Hurricane Irene might have provided some short-term economic stimulus as billions of dollars will likely be spent to repair the damage to the East Coast over the weekend. Cumberland Advisors Chairman David Kotok saw the storm as likely jolting employment in construction, an industry paralyzed by the bursting of the real estate bubble in 2008.

“We are now upping our estimate of fourth-quarter GDP in the U.S. economy,” he said in an email Sunday. “Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily.”

Kotok expects GDP growth — which limped along at less than a percentage point for the first half of the year — to exceed 2 percent in the last three months of the year and potentially reach 3 percent. Mark Merritt, president of crisis-management consulting firm Witt Associates, said the hurricane should provide a bump in economic activity over the next few months. “After a disaster, there’s always a definite short-term increase,” Merritt said. “There will be furniture bought, homes repaired, new carpet, new flooring, all the things affected by flooding.”
The story quotes no economist, who might have pointed out that the destruction of homes, businesses, and other property cannot actually be good for the economy. As economist Sandy Ikeda summed it up last year, the argument is that "paying $100 to replace a broken window somehow creates more prosperity than having an intact window and spending that $100 on something else." He goes on to ask, as many economists have: If destruction is so good for an economy, why wait for a hurricane or a bombing raid? Why not just bomb your own cities? As Frederic Bastiat explained the "broken window fallacy," a boy breaks a shop window. Villagers gather around and deplore the boy’s vandalism. But then one of the more sophisticated townspeople, perhaps one who has been to college and read Keynes, says, “Maybe the boy isn’t so destructive after all. Now the shopkeeper will have to buy a new window. The glassmaker will then have money to buy a table. The furniture maker will be able to hire an assistant or buy a new suit. And so on. The boy has actually benefited our town!” But as Bastiat noted, “Your theory stops at what is seen. It does not take account of what is not seen.” If the shopkeeper has to buy a new window, then he can’t hire a delivery boy or buy a new suit. Money is shuffled around, but it isn’t created. And indeed, wealth has been destroyed. The village now has one less window than it did, and it must spend resources to get back to the position it was in before the window broke. As Bastiat said, “Society loses the value of objects unnecessarily destroyed.” In the comic strip "Pearls Before Swine," the nefarious Rat used the destruction-as-stimulus argument to defend his client's blowing up downtown: But that's a comic strip. Journalists should do better. Please, call one of these economists. They can tell you that destruction is destructive. When property is destroyed, people have less wealth. The money they had been saving for a new business or a new computer or a college education, now they have to spend it on rebuilding what they had. That is not "a bump in economic activity."

Posted on August 28, 2011  Posted to Cato@Liberty

The Kennedy View of Wealth

In a column bemoaning Ayn Rand's influence in America, Kathleen Kennedy Townsend writes:
I also see a moral issue with Ayn Rand's insistence that all of us, CEOs included, should be totally free of the ties that bind. I especially disagree when it comes to CEOs. As I wrote here a few months ago, the wealthy have a special responsibility. Much will be asked of those to whom much has been given. Participating in government and civic life, serving in war, helping the less fortunate, and--yes--paying a fair share of taxes are inescapable responsibilities for all Americans, especially for those who have realized the American dream that inspires us all. (emphasis added)
I hear this idea a lot, and of course it can be traced to the words of Jesus: "For unto whomsoever much is given, of him shall be much required." (King James Version, Luke 12:48) But something struck me in its being quoted by Kathleen Kennedy Townsend. Much has been given to her, and to her relatives. And thus wealth has always seemed to her something that falls like manna from heaven. Townsend is the granddaughter of Joseph P. Kennedy and of coal magnate George Skakel. Wikipedia sums up the charmed life her grandparents' wealth gave her:
Townsend was born in Greenwich, Connecticut....She spent most of her childhood in McLean, Virginia and attended Stone Ridge School in nearby Bethesda, Maryland. She graduated from The Putney School in Vermont. She attended Radcliffe College (which later became part of Harvard University), receiving her bachelor's degree in history and literature with honors in 1974.
It's a wonderful life. To her and her family, much was given -- by the hard work of an earlier generation. But most CEOs are not given anything. They have to create wealth. The ones who get the richest, the entrepreneurs, typically work very hard for years. They invent things -- cars, copying processes, software systems, computers, business practices. Sam Walton became fabulously wealthy by delivering mundane items a few pennies cheaper to tens of millions of people, Ray Kroc by standardizing the cheap and efficient delivery of reliable hamburgers. Sure, some CEOs inherit their jobs, but they still have to work to update their products and keep up with the competition. A person who makes money doesn't feel that "much has been given" to him, though rich Americans do nevertheless give a great deal to charity. Perhaps we might change Kennedy Townsend's mantra to
To those from whom we have received much -- the incredible standard of living that investors and businesspeople have helped us all to achieve -- much gratitude is owed.  And if they also devote some of their own wealth to charitable endeavors, they are doubly beneficent.

Posted on August 24, 2011  Posted to Cato@Liberty

Paternalism and Parks

Or, as Timothy Egan titles it at the New York Times: "Nature Without the Nanny State." After reporting on a higher level of deaths this year at Yosemite, and an increased level of warnings and lawsuits, Egan notes:
My experience, purely anecdotal, is that the more rangers try to bring the nanny state to public lands, the more careless, and dependent, people become.
That point might have broader application than national parks.

Posted on August 23, 2011  Posted to Cato@Liberty

Is It ‘Well Worth the Money’?

A former congressional page tells the Washington Post that the recently ended page program was "well worth the money." At the Encyclopedia Britannica Blog, I note:
Well, it would be, wouldn’t it? For those who benefited from it, it is indeed well worth the money. But, as with all government programs, the beneficiaries weren’t paying for it. Did the program do the taxpayers much good? Yes, in the days when members of Congress needed a way to get documents to one another, the page program may well have been an efficient use of resources. But times change; technology has eliminated a lot of jobs in the private sector, and there’s no reason to think it shouldn’t have the same impact in the public sector. Cynics point out that pages were mostly the children of people with good political connections. And then they make better connections: The writer who thought the program was “well worth the money” now runs a company that boasts of having made more than 500 million political robocalls over the past 30 years. So we all owe something to the page program!
Much more on the problem of concentrated benefits and diffuse costs, some appalling examples, and a suggestion as to how we might determine whether each government program is "well worth the money."

Posted on August 22, 2011  Posted to Cato@Liberty

Anarchists for Big Government

Three months ago I wrote a long, thoughtful (ahem) critique of the Washington Post's use of the word "anarchists" to describe people outraged at the possibility that governments might finally be forced "to cut social benefits and slash public payrolls." "Odd anarchists," I harrumphed, who "object to the state reducing its size, scope, and power." Today, Michael Cannon made the same point to many more people in a few pithy sentences on the Post's letters page:
Anne Applebaum informed us that “the anarchists in Athens wanted more government spending” [“The smartphone riots?” op-ed, Aug. 11]. Which is it? Were they anarchists, who want no government? Or were they statists, who want more government?
The lesson? Write letters to the editor. People read them. Meanwhile, two other letter-writers on the same page complain that the Post should not reveal how our tax dollars are spent, lest the masses turn against Washington. I disagree.

Posted on August 20, 2011  Posted to Cato@Liberty

Libertarianism’s Cross-Cutting Appeal

NPR's Ari Shapiro reports from New Hampshire on Ron Paul, including this heart-warming story:
Robin and Tom Jacubic are husband and wife who had sat on opposite ends of the political spectrum for years. "I was for Ned Lamont because he was anti-war," says Robin, "and when the Democrats took over in 2006, nobody did anything to stop the war, so I found Dr. Paul from there." "He is the only one in the Republican race that knows what he's doing, knows what he's saying and has the answers," adds her conservative husband. After a decade of married life supporting opposing political candidates, "We found each other in libertarianism," says Robin.
For more on fiscally conservative, socially liberal voters, read "The Libertarian Vote."

Posted on August 19, 2011  Posted to Cato@Liberty

Why Is the Tappan Zee Bridge in the Wrong Place?

David Kestenbaum of NPR Planet Money reports this morning:
You would never look at a map of the Hudson River, point to the spot where the Tappan Zee Bridge is, and say, "Put the bridge here!" The Tappan Zee crosses one of the widest points on the Hudson — the bridge is more than three miles long. And if you go just a few miles south, the river gets much narrower. As you might expect, it would have been cheaper and easier to build the bridge across the narrower spot on the river.
Was there in fact a good engineering reason to put the bridge there, one that escaped the notice of the NPR reporter? Was there a good economic reason, perhaps avoiding expensive property confiscations? Well, it won't surprise readers of Cato-at-Liberty to discover that the bridge is in the wrong place because it made money for the State of New York:
If the bridge had been built just a bit south of its current location — that is, if it had been built across a narrower stretch of the river — it would have been in the territory that belonged to the Port Authority. As a result, the Port Authority — not the State of New York — would have gotten the revenue from tolls on the bridge. And [Gov. Thomas E.] Dewey needed that toll revenue to fund the rest of the Thruway.
Now the bridge needs repairs, which will cost more because the bridge is three miles long, instead of one mile long as it could have been. In Libertarianism: A Primer (page 199), I cited the work of the Italian fiscal theorist Amilcare Puviani, who asked, If a government were trying to squeeze as much money as possible out of its population, what would it do? He came up with 11 tactics, from inflation and borrowing to extraordinary budget complexity. I wonder if "placing a bridge in an inefficient place so that we get the tolls instead of another government" is covered by one of his strategies.

Posted on August 19, 2011  Posted to Cato@Liberty

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