Washington’s Range of Policy Options

Ezra Klein writes in the Washington Post that congressional Republicans have moved to the right on such issues as health care, stimulus spending, and a carbon tax, forcing Democrats to move to the center to find common ground. And thus:

If you imagine a policy spectrum that that goes from 1-10 in which 1 is the most liberal policy, 10 is the most conservative policy, and 5 is that middle zone that used to hold both moderate Democrats and Republicans, the basic shape of American politics today is that the Obama administration can and will get Democrats to agree to anything ranging from 1 to 7.5 and Republicans will reject anything that’s not an 8, 9, or 10. The result, as I’ve written before, is that President Obama’s record makes him look like a moderate Republicans from the late-90s.

His argument is that Mitt Romney and Newt Gingrich used to support “the basic architecture of the Affordable Care Act,” John McCain (R-AZ) supported a cap-and-trade bill, George W. Bush pushed a stimulus bill in 2008—but now Republicans don’t want to support any of those policies. So, he says, Democrats have moved to the right, away from what they really want, like single-payer health care, command-and-control environmental regulation, and no cuts to entitlements plus massive new spending. He says that leads to center-right policy.

But another way to look at it is this: on his scale of 1 to 10, where 1 represents bigger government and 10 represents smaller government, what’s happening? Is government getting bigger or smaller? Take health care: if 1 represents national health care and 10 represents a free market in health care, then surely with income tax preferences for health insurance, Medicare, the prescription drug benefit, and government paying for more than half of all health care, we were at least at 5 by 2009. Everybody from Michael Cannon to Joe Biden thinks Obamacare is a BFD on the road to total government control of medicine. So let’s say it put us at 3 or 4.

You can see the same pattern in the other issues Klein discusses. Carbon tax, cap and trade, stimulus spending—they all make government bigger than it is now. So when Republicans endorse any of those policies, they are playing on bigger-government territory. Now, Republicans say they’re not going to do that any more. So Klein’s complaint is not really that Republicans are insisting on “8, 9, or 10” policies; they’re just no longer proposing policies in the 3 and 4 range, hoping that Democrats will agree to make government only a little bigger, rather than way bigger. Sounds like maybe the debate is moving back toward the 50-yard line, instead of taking place entirely in Democratic territory.

Note: Klein talked only about economic issues, so I’ve done the same. There’s a clear trend in a liberal/libertarian direction on social issues such as marriage and marijuana. And Republicans who propose further restricting immigration or getting involved in yet another Mideast war are hardly advocates of small government. This analysis deals only with fiscal, regulatory, and entitlements issues.

Posted on May 28, 2013  Posted to Cato@Liberty

Washington Booms during Slowest Recovery

Continuing our ongoing series on the wealth of Washington, we bring you the lead story in Friday’s “Mansion” section of the Wall Street Journal:

WSJ DC Boomtown

The Journal reports:

As other American cities have been buffeted by an uneven economy, Washington’s property market has been buoyed two forces specific to the capital city: a surge of federal contractors and a rising tide of government spending. The result: what real-estate agents and developers are calling an unprecedented real-estate surge.

Yes, a rising tide of government spending may be bad for the American economy, but it’s great for the Washington area.

Washington is wealthy and getting wealthier, despite history’s slowest recovery in most of the country. As we’ve said here before, this of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. 

Money spent in Washington is taken from the people who produced it all over America. Washington produces little real value on its own. National defense and courts are essential to our freedom and prosperity, but that’s a small part of what the federal government does these days. Most federal activity involves taking money from some people, giving it to others and keeping a big chunk as a transaction fee.

Every business and interest group in society has an office in Washington devoted to getting some of the $3.6 trillion federal budget for itself: senior citizens, farmers, veterans, teachers, social workers, oil companies, labor unions - you name it. The massive spending increases of the Bush-Obama years have created a lot of well-off people in Washington. New regulatory burdens, notably from Obamacare, are also generating jobs in the lobbying and regulatory compliance business.

Walk down K Street, the heart of Washington’s lobbying industry, and look at the directory in any office building. They’re full of lobbyists and associations that are in Washington, for one reason: because, as Willie Sutton said about why he robbed banks, “That’s where the money is.”

The wonder is why the taxpayers put up with it.

Posted on May 25, 2013  Posted to Cato@Liberty

Government on the Friends and Family Plan

In his stirring speech to the 1984 Democratic National Convention, then-New York governor Mario Cuomo used an extended metaphor of the whole nation as a family. So maybe it should come as no surprise to discover that his son, current New York governor Andrew Cuomo, uses the New York State government as a jobs program for his friends and their families. The Empire State Development Corporation in particular is chock-full of his donors and friends, and their young sons–not to mention Cuomo’s political advisers.

He’s not alone in spending (other people’s) money to help family and friends. The Washington Post reported in December on the family-friendly atmosphere at the Metropolitan Washington Airports Authority:

Meet the Kulle family: mom Helen, daughter Ann Kulle-Helms, son-in-law Douglas Helms, son Albert, daughter-in-law Michele Kulle and Michele’s brother, Jeffrey Thacker.

They all worked for the Metropolitan Washington Airports Authority. All at the same time.

One MWAA board member, 

who has had at least three relatives, including a daughter-in-law, work at the agency, said family members are employed frequently, particularly among board members.

“If you ask a third of those folks, their relatives work there,” he said. “I never thought that we were doing anything wrong.”

“This is a government town and an agency town,” Crawford said. “If there’s a possibility that you can hire a relative … it was the norm.”

And yesterday the Post reported that MWAA isn’t just for family, it’s for friends, too. Two old friends, one at MWAA, the other at the D.C. Office of Aging, hired each other’s children and friends and issued numerous contracts and grants to companies run by relatives and friends.

At MWAA, government is truly one big family.

And today comes this touching story from Alabama:

Rep. Jo Bonner, R-Ala., will resign from Congress later this year to take a job at the University of Alabama, CQ Roll Call has confirmed…

He will take on the newly created position of vice chancellor of government relations and economic development…

Bonner’s sister, Judy Bonner, is president of the University of Alabama in Tuscaloosa.

It bears repeating: “The vice chancellor job is a newly created position in the UA system.”

Anything for family.

Posted on May 24, 2013  Posted to Cato@Liberty

The Art of Persuasion

The newest posting at Libertarianism.org is a 1979 speech by Nathaniel Branden, from the largest-ever convention of the Libertarian Party, titled “What Happens When the Libertarian Movement Begins to Succeed?” Alas, it’s audio-only, unlike all the classic videos at Libertarianism.org. But it’s still vintage Branden, and quite interesting. The site’s multimedia editor, Evan Banks, drew my attention to this part of the speech (starting around 22:22) that I think has a lot of relevance to the work we do at Cato and the attempts at persuasion by libertarians generally:

So it becomes very interesting to ask ourselves – and obviously I don’t wish to imply this applies to all of us, it doesn’t – but these are trends to watch for in ourselves and in our colleagues. So it becomes interesting to ask ourselves: Okay, suppose that I or my friends or my colleagues, while genuinely believing in these ideals, at the same time have this unrecognized negative self-concept of which Branden speaks. That means that my self-sabotaging behavior wouldn’t happen on a conscious level, but it would happen. How would it happen? What kinds of mistakes might we make?
Well, for example, suppose that you’re talking with people that don’t already share your views, and yet you believe your views have evidence and reason to support them. Now, if you really believe that you’re in this to win; to see your ideas prevail, then you give a lot of thought to how to become a good communicator, how to reach human minds, how to appeal to human intelligence. What do you do if you’re really in it to keep proving that you’re a heroic–but doomed–martyr? What do you do if your deepest belief [about people that don’t already share your views] is, “You’re never going to get it. You’re hopelessly corrupt. I may be one of the two or three last moral people on Earth. What am I doing at this party anyway?”
You engage in a lot of flaming rhetoric – you talk about statists, you talk about looters, you talk about parasites in contexts where you KNOW this language is Greek to your listener. Why should you care, your dialogue isn’t directed to him anyway – it’s directed to the spectator – you watching you being a hero. HE knows what you mean – don’t get confused over the fact that your listeners don’t, the show isn’t for them anyway.


So, one of the signs that we want to look out for, and one of the most important signs, happens in how we approach communication. Are we really out to reach human beings? Are we really out to build a bridge to somebody whose context may be very different from our own? Do we still remember that a lot of what we now regard as self-evident once upon a time wasn’t self-evident? Or do we walk into a conversation on the premise: I’ll give you one chance, after which you’re irredeemably evil?
You see, that could be called a communication problem, but I think it would be too superficial to describe it in that manner. I would call it a “phony image” problem: you’re not in it to win, you’re not in it to persuade, you’re not in it to convince, you’re not in it to reach out and touch another human mind; you’re out to make yourself out as the lowly unappreciated misunderstood heroic martyr you always knew you were, ever since your mother gave more attention to your brother.
Perhaps communication is one of the chief areas where this problem manifests. Another example in the area of communication, it occurs to me, is libertarians who cannot seem to come off the level of extreme generality. Once they have made up their mind that – for example – welfare programs are inappropriate or improper, and ultimately immoral, that’s the end of the conversation. They’re not interested in dealing with the perfectly natural questions that perfectly civilized decent people are going to ask next about the very real problems of people in our particular world. They don’t think in terms of responsible answers, they don’t think in terms of voluntary solutions, they don’t think in terms of developing highly concrete, highly specific libertarian alternatives. 
Why don’t they? Because they never believed they could persuade anyway. To invest that much thinking you have to really think you could make a difference. To do your homework, to master the subject, to know how to argue beyond the very general level you have to really believe you can make a difference.
What if you don’t, BUT you want to play in the game? You climb up on your white horse, confine [yourself] to generalities, and curse those who aren’t convinced. 
Good advice! Meanwhile, find plenty of videos – from Hayek, Friedman, Rand, Rothbard, and more – at Libertarianism.org, along with George Smith’s weekly column on libertarian thought, the Free Thoughts blog, and four impressive reading lists – at the ever-expanding Libertarianism.org.

Posted on May 22, 2013  Posted to Cato@Liberty

Virginia Republican Candidates Not Joining 21st Century

Last week I reported that 40 percent of Virginia Republicans – and 56 percent of independents – now support gay marriage. But on Saturday the Virginia GOP nominated three statewide candidates whose views on homosexuality and marriage equality range from unwavering opposition to bigoted to insane

Gubernatorial nominee Ken Cuccinelli came out swinging against the “extremist” label in his convention acceptance speech:

“When did it become extreme to protect children from predators and human traffickers?” Cuccinelli asked. “When did it become extreme to guard our Constitution from overreach? When did it become extreme to secure the freedom of the wrongly convicted? And when did it become extreme to ask government to spend a little less so our economy can grow?”

Like Gov. Bob McDonnell four years ago, Cuccinelli will try to focus on jobs and the economy in his race against big-government crony capitalist Terry McAuliffe. But there’s a reason that a report by the Republican National Committee found that voters see the GOP as “scary,” “narrow minded,” and “out of touch” – and the Virginia Republican ticket is part of that reason.

Posted on May 20, 2013  Posted to Cato@Liberty

The Rising Cost of Labor — a Triumph for Capitalism

Articles on page A7 and A8 of Saturday’s Wall Street Journal, about rising wages in China and France, confirm something that I learned from Julian Simon. As the Journal reported:

The 14% wage rise for private-sector workers in 2012, reported by China’s National Bureau of Statistics on Friday, represented an acceleration from 12.3% in 2011.


With high labor costs eating into his bottom line, Mr. Madec uses frozen ingredients—and even complete main courses—for the dishes served at Les Templiers…. a steady increase in labor costs and food prices has fueled an unexpected phenomenon: Many restaurants can no longer afford to prepare meals from fresh ingredients in their own kitchens.

And what’s the lesson I learned from Julian Simon? As I wrote in Libertarianism: A Primer,

Over the long run, in real terms, the only price that consistently seems to rise is the price of human labor.  Looking back a hundred years or so, we see that prices of goods–from wheat to oil to computers–have fallen, while the real wage rate has quintupled in 50 years.  The only thing getting more scarce in economic terms, that is, relative to all other factors, is people.


Posted on May 19, 2013  Posted to Cato@Liberty

Republicans Slowly Catch Up to the 21st Century

Public opinion on gay marriage has changed a lot in recent years, perhaps more rapidly than on any other major issue. Yet as Jonathan Rauch noted last year, one demographic group has resisted that change: Republicans. As he wrote:

In moving as decisively as they have on gay rights, the Democrats are following the country….

But the dissenters have not vanished. Rather, they have holed up inside the Republican Party. According to polling by the Pew Research Center, two-thirds of Democrats and almost 60 percent of independents call same-sex relations morally acceptable; only a bit over a third of Republicans agree. White evangelicals, in particular, are unique among major demographic and religious categories (including Catholics) in their fierce disapproval of homosexuality, and these days the vast majority of them (70 percent, according to Pew) are Republican or lean Republican.

To put the matter bluntly, the Republican Party is becoming an isolated bastion of anti-gay sentiment. That is not because Republicans and conservatives are immune to the general trend toward acceptance of homosexuality. It is because the trend is slower among Republicans.

But in today’s Washington Post there’s some interesting evidence of movement among Republicans. A strong majority of voters in Virginia, a state that passed a gay marriage ban in 2006, and 40 percent of Republicans now say “it should be legal for gay couples to get married.” Note the changes from 2006 in this Post graphic:

Washington Post graphic

Note especially that column in the lower right. How has public opinion in Virginia changed since the 2006 amendment vote? Support for gay marriage (or opposition to a ban) has risen by 13 points. Independents are up only 3 points. Democrats are up by 7 points, perhaps because of the endorsement of President Obama. And Republican support is up 25 points.

Last year, I called the sudden silence of Republican leaders on gay marriage “the sound of social change.” It looks like they knew which way the wind was blowing in their own base.

Posted on May 16, 2013  Posted to Cato@Liberty

Scandals Keep Eroding Our Faith in Benevolent Government

George Will, Michael Gerson, and our own Gene Healy are among the columnists who reminded us – in the wake of the IRS and AP snooping scandals – of President Obama’s stirring words just two days before the IRS story broke:

Unfortunately, you’ve grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity. .?.?. They’ll warn that tyranny is always lurking just around the corner. You should reject these voices.

No road to serfdom here. Just us folks working together, to protect ourselves from sneaky reporters and organized taxpayers.

And now lots of people are noting that a series of scandals in government just might undermine people’s faith in government. John Dickerson of Slate writes:

The Obama administration is doing a far better job making the case for conservatism than Mitt Romney, Mitch McConnell, or John Boehner ever did. Showing is always better than telling, and when the government overreaches in so many ways it gives support to the conservative argument about the inherently rapacious nature of government….

Conservatives argue that the more government you have, the more opportunities you will have for it to grow out of control.

And Paul Begala, the Bill Clinton operative, notes:

This hurts the Obama Administration more than similar issues hurt the Bush administration because a central underpinning of the progressive philosophy is a belief in the efficacy of government. In the main almost all of the Obama agenda requires expanding folks’ faith in government, and these issues erode that faith.

“Faith in government” indeed. To paraphrase Oscar Wilde, putting your faith in government is, like a second marriage, a triumph of hope over experience.

But most particularly this week I’m reminded of Murray Rothbard’s comment in 1975 about what the era of Vietnam, Watergate, and stagflation had done to trust in government:

Twenty years ago, the historian Cecelia Kenyon, writing of the Anti-Federalist opponents of the adoption of the U.S. Constitution, chided them for being “men of little faith” – little faith, that is, in a strong central government. It is hard to think of anyone having such unexamined faith in government today.

Another 38 years later, it should be even more difficult to retain such faith.

Posted on May 16, 2013  Posted to Cato@Liberty

Big Sugar Tries to Protect Its Sweet Deal from “Big Candy”

We’ve written about the outrageous sugar import quotas here many times. And Chris Edwards wrote in March about the American Sugar Alliance’s ad in the Washington Post titled “Big Candy’s Greed.” But we couldn’t link to the ad because for some reason the American Sugar Alliance has not chosen to put a version of the ad on its website. But the Alliance ran its expensive quarter-page ad in the Post last week, so we’re now able to provide the public service of making it available online.

Note that what candy producers and other sugar users want is to be allowed to buy sugar from the world’s most efficient producers at world market prices—just like every company in a free market. This protectionist nonsense “Big Candy” is fighting has been going on for decades. In 1985, the Wall Street Journal and then the New York Times reported that the Reagan administration had slapped emergency quotas on “edible preparations” such as jams, candies, and glazes—and even imported frozen pizzas from Israel—lest American companies import such products for the purpose of extracting the sugar from them. Apparently it might have been cheaper to import pizzas, squeeze the tiny amount of sugar out of them, and throw away the rest of the pizza than to buy sugar at U.S. producers’ protected prices.

As Chris Edwards noted, a critic of Big Sugar quoted in this article summarized the sad reality of sugar growers: “They are unlike any other industry in Florida in that they aren’t in the agricultural business, they are in the corporate welfare business.” 

Please enjoy “Big Candy’s Greed,” brought to you by the coddled, protected, price-supported, politically active U.S. sugar industry:

Big Sugar Ad

Posted on May 15, 2013  Posted to Cato@Liberty

Is This the Libertarian Moment?

In 2008 Nick Gillespie and Matt Welch hailed a “libertarian moment,” encompassing everything from the Internet to the collapse of “legacy” industries and legacy entitlement programs. I’ve used the same term here, when NPR talked about Ron Paul and when polls showed rising support for smaller government, gay marriage, and drug legalization.

But suddenly, today, everyone seems to see a libertarian moment. Driving in to work, I got so tired of the smug self-satisfaction on public radio’s pledge drive, I switched to the vigorously right-wing Chris Plante Show just in time to hear Plante say, “This is a great day for libertarianism” in regard to the abuse-of-power stories dominating the mainstream media.

And then, mirabile dictu, I got to the office, opened the Washington Post, and found today’s column by Michael Gerson. Now, as he says in today’s column, Gerson is “conspicuously not a libertarian.” Indeed, he is the most vociferously anti-libertarian columnist in contemporary punditry. And yet his column today is titled (in the print paper):

Making libertarians of us all

Man, you’ve got to abuse power something awful to make Michael Gerson start thinking libertarian. So thanks, IRS and Justice Department!

And now that the Obama administration’s abuse of power has got our attentioncan we broaden our focus to take in health care mandates, recess appointments, campus speech regulations, the anti-constitutional Independent Payment Advisory Board, similar extra-legislative bodies in Dodd-Frank, the expropriation of Chrysler creditors, and illegal wars? 

Posted on May 14, 2013  Posted to Cato@Liberty

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