Cato Connects: Election 2014

Cato’s David Boaz and John Samples evaluate the 2014 elections and prospects for a more libertarian public policy in the coming years.

Posted on November 5, 2014  Posted to Cato@Liberty

Is There a Libertarian Vote?

The Gallup Poll has a new estimate of the number of libertarians in the American electorate. In their 2014 Gallup Governance Survey they find that 24 percent of respondents can be characterized as libertarians (as compared to 27 percent conservative, 21 percent liberal, and 18 percent populist).

For more than 20 years now, the Gallup Poll has been using two questions to categorize respondents by ideology:

Some people think the government is trying to do too many things that should be left to individuals and businesses. Others think that government should do more to solve our country’s problems. Which comes closer to your own view?

Some people think the government should promote traditional values in our society. Others think the government should not favor any particular set of values. Which comes closer to your own view?

Here’s a graphic depiction of the number of respondents who gave libertarian answers to both questions in the Bush-Obama years: 

Gallup Governance libertarians

Libertarians, who disagree with both Democrats and Republicans on major issues, have not been reliable voters for either party. They generally tend to vote Republican by about a two to one majority. But as David Kirby and I wrote in our 2010 study, “The Libertarian Vote in the Age of Obama”:

In 2004 libertarians swung away from Bush, anticipating the Democratic victories of 2006. In 2008, according to new data in this paper, libertarians voted against Barack Obama. Libertarians seem to be a lead indicator of trends in centrist, independent-minded voters. If libertarians continue to lead the independents away from Obama, Democrats will lose 2010 midterm elections they would otherwise win.

And of course the Democrats did have a bad 2010. If libertarian-leaning voters react against Obamacare, overregulation, endless wars, and the surveillance state, then Democrats are likely to have a bad 2014 as well. But Republican positions on immigration, gay marriage, and marijuana push libertarian voters, especially millennial libertarians away; that might account for the surprisingly weak showing of many Republicans in polls in a year when President Obama is unpopular and the economy remains dismal.

Read more about the libertarian vote in our original study or in our 2012 ebook.

Hat tip to Lydia Saad for the data and to Derek Lee and David Dewhurst for the chart.

Posted on November 2, 2014  Posted to Cato@Liberty

Big Money in Politics?

As we hear the usual frenzied concern about big money in politics, Cecilia Kang and Matea Gold offer an interesting fact in today’s Washington Post:

Total political advertising in 2014 is expected to reach a record $2.4 billion, up $100 million from four years ago, according to estimates by the Kantar Media research firm.

That sounds like a lot of money. But the first thing I notice is that the increase from 2010 is only about half the rate of inflation. Given the increasing scope of government, it might be surprising that the increase has been so minimal. But divided government may have caused some potential donors to see fewer opportunities and/or risks in the next couple of years.

The Institute for Justice offers another timely way to look at the magnitude of political spending:

Money in politics, from Institute for Justice

Posted on November 1, 2014  Posted to Cato@Liberty

Attorneys General Aim at New Targets, Who Respond as Expected

The New York Times launches a series of investigative reports on corporate lobbying of state attorneys general. But you have to read fairly far down in the story to find the “nut graf” on why this is happening now. Radley Balko summed it up in a tweet: “As prosecutors get increasingly powerful, lobbyists will increasingly spend money to try to influence them.” And the article does note that: 

A robust industry of lobbyists and lawyers has blossomed as attorneys general have joined to conduct multistate investigations and pushed into areas as diverse as securities fraud and Internet crimes….

The increased focus on state attorneys general by corporate interests has a simple explanation: to guard against legal exposure, potentially in the billions of dollars, for corporations that become targets of the state investigations.

It can be traced back two decades, when more than 40 state attorneys general joined to challenge the tobacco industry, an inquiry that resulted in a historic $206 billion settlement.

Microsoft became the target of a similar multistate attack, accused of engaging in an anticompetitive scheme by bundling its Internet Explorer with the Windows operating system. Then came the pharmaceutical industry, accused of improperly marketing drugs, and, more recently, the financial services industry, in a case that resulted in a $25 billion settlementin 2012 with the nation’s five largest mortgage servicing companies.

The trend accelerated as attorneys general — particularly Democrats — began hiring outside law firms to conduct investigations and sue corporations on a contingency basis.

I wrote about this 30 years ago in the Wall Street Journal, citing Hayek’s assessment from 40 years before that:

Nobel laureate F.A. Hayek explained the process 40 years ago in his prophetic book The Road to Serfdom: “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.”

As the size and power of government increase, we can expect more of society’s resources to be directed toward influencing government.

Those who work to increase the size, scope, and power of government need to recognize: This is the business you have chosen. If you want the federal government to tax (and borrow) and transfer – and reallocate through prosecution – $3.8 trillion a year, if you want it to supply Americans with housing and health care and school lunches and retirement security and local bike paths, then you have to accept that such programs come with incentive problems, politicization, corruption, and waste. And that special interests will find ways to influence such momentous decisions, no matter what lobbying restrictions and campaign finance regulations are passed.

Posted on October 29, 2014  Posted to Cato@Liberty

It Was Fifty Years Ago Today

Fifty years ago today, the actor Ronald Reagan gave a nationally televised speech on behalf of the Republican presidential nominee, Senator Barry Goldwater. It came to be known to Reagan fans as “The Speech” and launched his own, more successful political career.

And a very libertarian speech it was: 

This idea that government was beholden to the people, that it had no other source of power is still the newest, most unique idea in all the long history of man’s relation to man. This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down. Up to man’s age-old dream – the maximum of individual freedom consistent with order – or down to the ant heap of totalitarianism. Regardless of their sincerity, their humanitarian motives, those who would sacrifice freedom for security have embarked on this downward path. Plutarch warned, “The real destroyer of the liberties of the people is he who spreads among them bounties, donations and benefits.”

The Founding Fathers knew a government can’t control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose.

Video versions of the speech here.

For libertarians, Reagan had his faults. But he was an eloquent spokesman for a traditional American philosophy of individualism, self-reliance, and free enterprise at home and abroad, and words matter. They change the climate of opinion, and they inspire people trapped in illiberal societies. And these days, when people claiming the Reagan mantle push for wars or military involvement in Iraq, Iran, Syria, and other danger spots, we remember that Reagan challenged the Soviet Union mostly in the realm of ideas; he used military force only sparingly. George W. Bush, whom some call “Reagan’s true political heir,” increased federal spending by more than a trillion dollars even before the financial crisis. We watch the antigay crusading of today’s conservative Republicans and remember that Reagan publicly opposed the early antigay Briggs Initiative of 1978 (featured in the movie Milk).

And in those moments libertarians are tempted to paraphrase the theme song of All in the Family and say, “Mister, we could use a man like Ronald Reagan again.”

Would that the current assault on economic freedom would turn up another presidential candidate with Reagan’s values and talents. More on Reagan here and here. 

Posted on October 27, 2014  Posted to Cato@Liberty

OMB Director Sets a Low Bar for Deficit Reform

Jonathan House reported [$] in the Wall Street Journal:

The U.S. government’s budget deficit narrowed in its 2014 fiscal year to its lowest level in six years, as an improving economy boosted tax revenues.

The annual deficit for fiscal year 2014 fell 29% to $483.35 billion, the Treasury Department said Wednesday… the lowest deficit since 2008. …

The 2014 deficit fell to 2.8% of the country’s gross domestic product, the broadest measure of economic output. This measure, preferred by economists because it offers greater context, was at its lowest level since the fiscal year ending Sept. 30, 2007.

“This is not only a reduction of the deficit, it’s also a return to fiscal normalcy,” said White House budget director Shaun Donovan.

The Obama administration’s definition of “fiscal normalcy” is a deficit just under half a trillion dollars, larger than in any year before 2009.

The national debt, which was about $5.7 trillion when George W. Bush entered office and $11 trillion when he turned the White House over to Barack Obama, is now at just a shade under $18 trillion. And the director of the Office of Management and Budget declares that a “return to fiscal normalcy.” Where is Warren Harding now that we need him? 

But hold on, there’s more: Donovan also noted that the federal government has abandoned its “harmful excessive budget austerity.” So we can expect more spending, and more deficits, and more debt, in the years to come.

Posted on October 21, 2014  Posted to Cato@Liberty

Cato Policy Forum and Luncheon 2014

John Allison will discuss “The Philosophical Fight for the Future of America”—the battle of ideas and morality between Progressive collectivism and free market capitalism that will define the future well being of America. These divergent world views are not reconcilable and lead to radically different public policy outcomes. Cato’s president will examine the threat posed by the proliferation of statist ideas, as well as ways to increase public understanding of the merits of individual liberty and limited government.

Next, Michael Cannon will discuss the important Halbig v. Burwell decision—a ruling that could lead to the ultimate repeal of Obamacare. In the landmark decision, the D.C. Circuit ruled the president has no authority to tax, borrow, and spend tens of billions of dollars to mask from consumers in 36 states the true cost of the Patient Protection and Affordable Care Act’s overpriced health insurance. If the court’s ruling stands, millions of Americans will feel the full cost of their Obamacare coverage and will demand that Congress reopen and possibly repeal the law.

Finally, David Boaz will discuss the future for freedom in America. From the rapid rise to prominence of first-term Senator Rand Paul to the state-level movements to legalize gay marriage and marijuana, the philosophy of fiscal conservatism, social liberalism, and restrained foreign policy seems to be gaining currency in American politics. In light of recent setbacks for individual liberty, Cato’s executive vice president will discuss how we can get back on the path to freedom, free markets, limited government, and peace at this auspicious “libertarian moment.”

Posted on October 16, 2014  Posted to Cato@Liberty

Libertarian Choices in Colorado

Karen Tumulty asks in the Washington Post

what label do you put on the political philosophy of a state that one year would legalize marijuana for recreational use and the next year recall two state senators who voted for stricter gun laws?

Readers of this blog might have an answer. So, it turns out, does Sen. Mark Udall:

“We’re a libertarian state — small ‘l’ — when it comes to privacy issues, issues of reproductive freedom, gun ownership, who you worship, who you spend your life with,” Udall said. “We’re a pro-environment state. We self-identify with environmentalists more than any other state in the nation. But we’re also very pro-business.”

So now those small-l libertarian voters will have to decide whether they prefer a not-so-libertarian Democrat, a not-so-libertarian Republican, or a big-L Libertarian.

Read more on libertarian voters, especially in the Mountain West.

Posted on October 15, 2014  Posted to Cato@Liberty

Les Miserables in Hong Kong

As the police move in to tear down the barricades built by the protesters in Hong Kong, I am reminded of scenes from the musical “Les Miserables,” and of this song:

Do you hear the people sing?
Singing the song of angry men?
It is the music of the people
Who will not be slaves again!

Will you join in our crusade?
Who will be strong and stand with me?
Beyond the barricade
Is there a world you long to see?

Then join in the fight
That will give you the right to be free!

I hope that the students of Hong Kong will be more successful than the French students were in June 1832. This time, of course, the whole world is watching, and that may make some difference.

Posted on October 15, 2014  Posted to Cato@Liberty

In Big Government, Breaking Up Is Always Hard to Do

Hewlett-Packard, the nation’s ninth-largest manufacturing company, is splitting itself into two companies. Executives say the company’s units are just too different to be managed in the same way.

Think about that. Hewlett-Packard is a very big company, with annual sales of about $115 billion. It’s nowhere near as big as the U.S. government, though, which will spend almost $4 trillion this year. It’s not even as big as the state governments of New York and California, which spent $132 billion and $215 billion, respectively, in 2011.

Those governments are engaged in far more disparate lines of work, and yet their executives never seem to downsize, spin off noncore businesses, close down non-performing units, or split into smaller, more manageable entities. Do corporate executives know something that political officials don’t?

Bureaucrats know how to add programs, but not to subtract them.”

Hewlett-Packard isn’t alone. Two weeks ago, eBay announced it would spin off its PayPal division.

Lots of large companies have decided to split up because they have become too large and diverse to be managed efficiently. ITT and AT&T both did that in 1995. Viacom and CBS split in 2006, as did Time-Warner and AOL in 2008 and Rupert Murdoch’s News Corp. in 2012.

However, this never seems to happen in government, which just keeps on growing and adding new programs.

One reason that government grows too big is what Milton and Rose Friedman called “the tyranny of the status quo.” That is, when a new government program is proposed, it’s often the subject of heated debate. (At least if we’re talking about big programs, such as farm subsidies or Medicare. Plenty of smaller programs get slipped into the budget with little or no debate, and some of them get pretty big after a few years. “Emergency” measures, such as the Patriot Act of 2001 and the 2009 stimulus bill, may pass with little real deliberation.) Once it has passed, debate over the program virtually ceases.

After that, Congress just considers every year how much to increase its budget. There’s no longer any debate about whether the program should exist. Reforms like zero-based budgeting and sunset laws are supposed to counter this problem, but they haven’t had much effect.

When the federal government moved to shut down the Civil Aeronautics Board in 1979, it found that there were no guidelines for terminating a government agency. It just never happens. President Clinton’s “reinventing government” project said, “The federal government seems unable to abandon the obsolete. It knows how to add, but not to subtract.” You could search any president’s budget for a long time and not find a proposal to eliminate a program.

One element of the tyranny of the status quo is what Washingtonians call the Iron Triangle, which protects every agency and program. The Iron Triangle consists of the congressional committee or subcommittee that oversees the program, the bureaucrats who administer it, and the special interests that benefit from it. There’s a revolving door between these groups: A congressional staffer writes a regulation, then he goes over to the executive branch to administer it, then he moves to the private sector and makes big bucks lobbying his former colleagues on behalf of the regulated interest group. Or a corporate lobbyist makes contributions to members of Congress in order to get a new regulatory agency created, after which he’s appointed to the board of the agency — because who else understands the problem so well?

Corporations face a different test; namely, the bottom line, as decided by consumers. Companies that don’t constantly improve their ability to satisfy consumers will lose out in the marketplace. Particular products or divisions may fall out of favor. The incumbent management may be so flawed that a board of directors will decide to sell the division and let new management make changes.

Of course, companies sometimes merge or buy other companies as well. Managers constantly seek to find the best combination of resources to meet consumer demand. So far this year, companies around the world have made just over $2 trillion worth of mergers and acquisitions. Meanwhile, they have also sold or spun off $1.6 trillion worth of subsidiaries and business lines, according to The Wall Street Journal. Investors are getting more aggressive in demanding that firms “right-size” themselves, whether that means expanding, shrinking or rearranging their lines of business. Global markets are fast-paced, and managers are constantly challenged to keep up with changing consumer demand and improvements by competitors.

Very little of that happens in government, which just keeps on adding new projects — from retirement plans to child care to the Iraq war to the Transportation Security Administration to the Wall Street bailout to municipal golf courses — and hardly ever shuts them down. If corporate managers and investors with their own money at stake find that businesses can get too big to be run effectively, can it really be possible for Congress and 2 million federal bureaucrats to effectively manage a $4 trillion government — to say nothing of a $17 trillion economy?

Posted on October 14, 2014  Posted to Cato@Liberty

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