Unhealthy Snacks: Your Tax Dollars at Work

Politicians from Mike Huckabee to Michael Bloomberg to Michelle Obama have been hectoring Americans about their eating habits. (What is it about the name "Michael," anyway, that seems to encourage paternalism and nanny-state politics? Well, it turns out that "Michael" comes from a Hebrew name meaning "Who is like God?" Maybe Michaels just get the idea that they are.) But meanwhile, I was struck by this report buried in a Washington Post story titled "Obama showering Ohio with attention and money":
[A] company making potato chips and other snack food about 100 miles from Cleveland . . . has received three Small Business Administration loans totaling $3.9 million since Obama took office, along with a $2 million loan during the Bush administration. In August, the agency’s head, Karen Mills, toured his facility for the launch of a kit that allows people to flavor their own gourmet potato chips. Last year, Biden singled him out in a speech near Cleveland.
So while the first lady stumps for healthy eating, administration appointees heap praise---and millions of tax dollars---on a company making potato chips. I think we should stop giving subsidies to all businesses and let them compete in a free market. But examples like this might lead even advocates of subsidies to wonder if this makes sense.

Posted on September 28, 2012  Posted to Cato@Liberty

Michael Gerson’s Pimply Adolescence

Michael Gerson, the former Bush speechwriter who gave us big-government conservatism and is now the #2 neocon columnist at the Washington Post, writes more about libertarianism than any other writer of such prominence. That would be great if he understood it, or could represent libertarianism fairly in his criticisms. Over the past few years he has denounced libertarianism as “morally empty,” “anti-government,” “a scandal,” “an idealism that strangles mercy,” guilty of “selfishness,” “rigid ideology,” and “rigorous ideological coldness.” And here's today's entry:
A few libertarians have wanted this fight [Mitt Romney's reference to 47 percent of Americans being "dependent on government"] ever since they read “Atlas Shrugged” as pimply adolescents. ... Republican politicians could turn to Burkean conservatism, with its emphasis on the “little platoons” of civil society. They could reflect on the Catholic tradition of subsidiarity, and solidarity with the poor. They could draw inspiration from Tory evangelical social reformers such as William Wilberforce or Lord Shaftesbury. Or they could just read Abraham Lincoln, who stood for “an unfettered start, and a fair chance, in the race of life.” Instead they mouth libertarian nonsense, unable to even describe some of the largest challenges of our time.
Well, let's see here. Burke's little platoons get a whole chapter in Charles Murray's libertarian book In Pursuit: Of Happiness and Good Government and a good bit of attention in this Cato essay based on it. They're people, not governments. The Catholic principle of subsidiarity, as explained by Pope Pius IX in Quadragesimo Anno, holds that "Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do." Which sounds pretty libertarian to me. And it doesn't seem to recommend turning local schools and individual marriages over to the federal government, as Messrs. Bush and Gerson endeavored to do. Libertarianism is a philosophy of individual rights, civil society, and limited government. Those may be unfamiliar concepts to Mr. Gerson, but he really should, you know, read a book before presuming to criticize them. I wonder what Gerson read when he was a pimply adolescent. Maybe the Bible, Burke, and Lincoln? Does he think that those ideas can be dismissed by referring to their readers as "pimply adolescents"? Is that what passes for conservative argument these days? And why oh why can't the Washington Post add a libertarian columnist to its array of lefties, welfare liberals, conservatives and neocons?

Posted on September 21, 2012  Posted to Cato@Liberty

It’s Roy Childs Week!

Over at Libertarianism.org, we're celebrating our old friend Roy Childs, once the anarchist enfant terrible of the mostly Objectivist libertarian movement, later a Cato foreign policy analyst, editor of Libertarian Review, and editorial director of Laissez Faire Books. Libertarianism.org has published its first ebook, Anarchism and Justice, a collection of Roy's essays on anarchism available in book form for the first time. And they're posting never-before-seen videos, including this one on the history of the libertarian movement from the Cato Summer Seminar in Political Economy: Today I posted my own reminiscences about Roy at the Libertarianism.org blog, Free Thoughts:
When I got involved in the tiny libertarian movement back in the early 1970s, I had the impression that its two leading intellectuals were Murray Rothbard and the much younger Roy Childs. Rand, Mises, and Hayek were out there as great thinkers; Milton Friedman was regarded with some skepticism as a “Chicagoite”; but the fledgling movement seemed centered around Rothbard and Childs.... In two stints as editor of Libertarian Review and as editor of Laissez Faire Books, Roy brought his keen insight and radical vision to a dazzling range of topics: the nature of rights, neoconservatism, foreign policy, Third World land reform, Iran, Ayn Rand’s influence on libertarianism, and much more. He seemed to have read everything and to know how it fit into his overall worldview. And he knew everybody. What fun it would be to read his correspondence – or better yet, listen to his phone calls – with Rothbard, Friedman, Nathaniel Branden, Barbara Branden, Thomas Szasz, and Robert Nozick. You can read his formal interviews with some of those people in the Libertarian Review archives....
Watch for more videos this week.

Posted on September 19, 2012  Posted to Cato@Liberty

Johan Norberg on PBS

Cato senior fellow Johan Norberg hosts a documentary, "Europe's Debt: America's Crisis?" being seen on PBS stations over the next few weeks. The Free to Choose Network, which produced the film, describes it this way:
Four investigative reports, shot on location in Greece, Brussels, California and Washington DC, highlight this in depth examination of Europe’s current debt crisis and its connection to the U.S. economy.  Narrated by Swedish author Johan Norberg, and George Mason University professor, Don Boudreaux, the investigative reports ask:  “Where did Europe go wrong” and “is the United States now repeating the same mistakes?”
Participants include Cato friends Jacob Mchangama and Tanja Stumberger, as well as such key players as former comptroller general David Walker, former European Commissioner Frits Bolkestein, and Ann Johnson, mayor of Stockton, California. "Europe's Debt: America's Crisis?" airs on Washington's channel 32 Tuesday night at 10. For other broadcasts, from Boston to San Francisco, check the listings here. And for more perspectives on this topic, check out Cato's upcoming conference, "Europe's Crisis and the Welfare State: Lessons for the United States," on October 10.

Posted on September 17, 2012  Posted to Cato@Liberty

Paul Ryan, Deficits, and Smaller Government

NPR notes on Sunday that Rep. Paul Ryan's voting record in Congress calls into question his image as a deficit hawk. But they emphasize Alice Rivlin's explanation:
I think you have to distinguish deficit hawk from small-government conservative. I think of him as a man committed to a smaller government that has less of a role in people's lives. He really believes that: that the government does too much. And he thinks taxes should be less.
Rivlin and Douglas Holtz-Eakin are correct to distinguish between mere deficit hawks and philosophical advocates of smaller government. But it's not clear that Ryan's voting record supports that theory either:
FOR the No Child Left Behind Act (2001) FOR the Iraq war (2002) FOR the Medicare prescription drug entitlement (2003) FOR Head Start reauthorization (2007) FOR Economic Stimulus Act (January 2008) FOR extending unemployment benefits (2008) FOR TARP (2008) FOR GM/Chrysler bailout (2008) FOR $192 billion anti-recession spending bill (2009)
To be sure, Ryan speaks eloquently about smaller government. And he certainly supports smaller government -- at least in terms of federal spending on non-military programs -- than President Obama and Vice President Biden, who never met a government spending program they didn't love. And of course we know that members of Congress tend to support the positions of their party. But he still needs to work to get his actions in line with his rhetoric.  

Posted on September 10, 2012  Posted to Cato@Liberty

Ronald Hamowy, RIP

The Cato Institute regrets to announce the passing of Ronald Hamowy, distinguished intellectual historian, Cato Fellow in Social Thought, and editor of The Encyclopedia of Libertarianism. Ronald died Saturday at the age of 75, after a long series of health problems. His friend Steve Cox, editor of Liberty magazine, has an informative and touching remembrance:
He was one of the libertarian movement’s most important and vital scholars. An historian of the 18th century, he was known for his impeccable standards of research and writing. To discerning researchers of the Enlightenment — left, right, or center — his word was law. If there was a scholarly myth or illusion, he was the one who was trusted to puncture it. He was the person who meticulously set things straight. Many times, when I have mentioned his name in an academic conversation, the reply has been, “Ronald Hamowy! You know him?!” For libertarians, Ronald will always be recognized as a bright star of the post-World War II generation — but unlike many other grand old men of this or that era, he never became a Grand Old Man. He retained to the end his youthful joy and sense of first discovery. To him, any new fact — or any old movie, viewed on his constant friend, Turner Classics — was a pleasure to be greeted as if it were the first one in the universe. Even when ensconced as chairman of an august intellectual conference, Ronald let his eyes sparkle and his mouth crinkle with laughter, and with some little Count Basie-like verbal gesture he set the whole house laughing with his infectious wit.
Ronald managed to meet and study with many of the great liberal and libertarian thinkers of the 20th century. As Brian Doherty notes in Radicals for Capitalism, he went to grade school with economist George Reisman, who introduced him to high school friends Ralph Raico and Robert Hessen, both future historians. He attended Ludwig von Mises's New York University colloquium in the 1950s and became  a lifelong friend of Murray Rothbard. He went to the University of Chicago for graduate school and studied under F. A. Hayek and then did post-graduate work at Oxford under Isaiah Berlin. At Chicago he co-edited the legendary New Individualist Review, one of the earliest libertarian journals. Ronald’s works include The Scottish Enlightenment and the Theory of Spontaneous Order (University of Southern Illinois Press, 1987), Canadian Medicine: A Study in Restricted Entry (Fraser Institute, 1984), Dealing with Drugs: Consequences of Government Control (edited, Lexington Books, 1987), The Political Sociology of Freedom: Adam Ferguson and F. A. Hayek (Edward Elgar, 2005), and Government and Public Health in America (Edward Elgar, 2007). His last project was editing the definitive edition of Hayek's The Constitution of Liberty (University of Chicago Press, 2011). When that book was published, he presented it at a Cato Institute panel featuring Bruce Caldwell, Richard Epstein, and George Soros. He also edited a scholarly edition of Cato's Letters, for which the Cato Institute is named, for Liberty Fund. His magnificent achievement, The Encyclopedia of Libertarianism, belongs on the bookshelf of every libertarian and everyone with an interest in political philosophies. More at Wikipedia and in Stephen Cox's tribute. RIP.

Posted on September 9, 2012  Posted to Cato@Liberty

Is Government like Immigrants?

In his speech last night, President Obama listed a lot of groups of people whom we shouldn't blame for "all our problems":
We don’t think the government can solve all our problems. But we don’t think that the government is the source of all our problems, any more than are welfare recipients, or corporations, or unions, or immigrants, or gays, or any other group we’re told to blame for our troubles.
He's right to discourage scapegoating. But there's a category error here. Government is not just a group of people distinguished by their place of birth, or sexual orientation, or economic organization. Government is defined by its power to use force to achieve its purposes. Gays and immigrants don't have such power. Neither do corporations or unions or welfare recipients. No one blames governments for "all our problems." Indeed, libertarians should be the first to remember, as Dr. Johnson told us,
How small, of all that human hearts endure, That part which laws or kings can cause or cure!
But the introduction of force into human relationships does cause many problems. Taxes reduce incentives and distort decisions, not to mention limiting our freedom. Government spending likewise distorts economic decisions. Government regulation impels people to expend resources in ways that don't best serve consumer desires. Central bank manipulation of the money supply introduces massive distortions into economic decisionmaking, often bringing about cycles of boom and bust. Drug prohibition, conscription, tariffs, punitive taxes, the exclusion of people from social and economic life on the basis of their race or gender or religion or sexual orientation---a large part of the activities of modern governments do cause many of our problems. So President Obama is right to warn us against blaming our problems on "any other group," just as President Clinton was right to warn us in his own acceptance speech 20 years ago not to blame "them---Them, the minorities. Them, the liberals. Them, the poor. Them, the homeless. Them, the people with disabilities. Them, the gays." But blaming government is not equivalent to that kind of scapegoating. When we "blame government," we're doing two things:
1. We're pointing to specific policies that caused problems such as the financial crisis or prohibition-related crime or failing public schools. 2. We're blaming the process of government, which necessarily involves coercion, predation, politicization, the diversion of resources to less-valued uses, and thus a reduced standard of living.
That's not scapegoating. It's analysis. It's economics, history, political theory, and sociology.

Posted on September 7, 2012  Posted to Cato@Liberty

Clinton vs. Obama

Over the weekend I stumbled upon C-SPAN's broadcast of Bill Clinton's 1992 speech accepting the Democratic nomination for president, and I remembered how he seemed like a "different kind of Democrat" at the time. As I started watching, I heard Clinton saying:
The most important family policy, urban policy, labor policy, minority policy, and foreign policy America can have is an expanding entrepreneurial economy of high-wage, high-skilled jobs ... Soviet communism has collapsed and our values—freedom, democracy, individual rights, free enterprise—they have triumphed all around the world.
And then he got into the meat of the "new Democrat" message:
To turn our rhetoric into reality we've got to change the way government does business, fundamentally. Until we do, we'll continue to pour billions of dollars down the drain. The Republicans have campaigned against big government for a generation, but have you noticed? They've run this big government for a generation and they haven't changed a thing. They don't want to fix government; they still want to campaign against it, and that's all. But, my fellow Democrats, its time for us to realize we've got some changing to do too. There is not a program in government for every problem, and if we want to use government to help people, we have got to make it work again.... Now, I don't have all the answers, but I do know the old ways don't work. Trickledown economics has sure failed. And big bureaucracies, both private and public, they've failed too. That's why we need a new approach to government, a government that offers more empowerment and less entitlement. More choices for young people in the schools they attend- in the public schools they attend. And more choices for the elderly and for people with disabilities and the long-term care they receive. A government that is leaner, not meaner; a government that expands opportunity, not bureaucracy; a government that understands that jobs must come from growth in a vibrant and vital system of free enterprise.
He made his famous promise to "end welfare as we know it." That's not President Obama's style. He's not that kind of Democrat. He doesn't talk about free enterprise as an American value, not even when speaking of freedom to students in China. Search for "free enterprise" on the White House website, and the first hit is to his famous "You didn't build that" speech in Roanoke—which doesn't include the word "enterprise," or the word "free." He doesn't say that big bureaucracies have failed, or that we need more choice in education and health care. Which presumably means Bill Clinton will have to write a different speech when he nominates President Obama for reelection on Wednesday night. Now don't get me wrong. There was plenty of old-fashioned Democratic liberalism in Clinton's 1992 speech. He talked about "what all of us must give to our Nation," which fits well with Obama's view. He denounced outsourcing, he proclaimed that "health care is a right," he promised billions in new federal spending and lots of programs. He even deplored polarization and "the stereotypes that blind us," reminding us that today's complaints about polarization are nothing new. And I was struck by the way he delivered that complaint. He said that "for too long politicians have told the most of us that are doing all right that what's really wrong with America is the rest of us—them." And he elaborated:
Them, the minorities. Them, the liberals. Them, the poor. Them, the homeless. Them, the people with disabilities. Them, the gays.
All good points. Too much stereotyping. Too much polarization. Too much partisanship. Except that his list of stereotypes was very partisan. What about "Them, the conservatives"? "Them, the rich"? Aren't those polarizing stereotypes too? You'd think a different kind of Democrat would have deplored all the stereotypes that politicians use to divide people. David Maraniss writes in today's Washington Post that "on most of the big issues, there is little or no space between [Clinton and Obama] as pragmatic liberals." Maybe so, but in his campaign—and in his response to a midterm electoral rebuke—Clinton certainly gave voters the impression that he was a "different kind of Democrat," one who appreciated the limits of government and the virtues of free enterprise. This week he'll presumably have to give a full-throated defense of a president who never said that the era of big government is over, who increased the food stamp rolls by 14 million after Clinton reduced them by 11 million, who increased the national debt by $5 trillion compared to $1.6 trillion in the Clinton years. No doubt he'll do a great job.

Posted on September 4, 2012  Posted to Cato@Liberty

Labor Day and Labor Progress

David Henderson offers some excerpts from Stanley Lebergott's article, "Wages and Working Conditions," for The Fortune Encyclopedia of Economics, now the 1st edition ofThe Concise Encyclopedia of Economics. They seem especially relevant for Labor Day:
Surely the single most fundamental working condition is the chance of death on the job. In every society workers are killed or injured in the process of production. While occupational deaths are comparatively rare overall in the United States today, they still occur with some regularity in ocean fishing, the construction of giant bridges and skyscrapers, and a few other activities. For all United States workers the number of fatalities per dollar of real (inflation-adjusted) GNP dropped by 96 percent between 1900 and 1979. Back in 1900 half of all worker deaths occurred in two industries--coal mining and railroading. But between 1900 and 1979 fatality rates per ton of coal mined and per ton-mile of freight carried fell by 97 percent. This spectacular change in worker safety resulted from a combination of forces that include safer production technologies, union demands, improved medical procedures and antibiotics, workmen's compensation laws, and litigation. Ranking the individual importance of these factors is difficult and probably would mean little. Together, they reflected a growing conviction on the part of the American people that the economy was productive enough to afford such change. What's more, the United States made far more progress in the workplace than it did in the hospital. Even though inflation-adjusted medical expenditures tripled from 1950 to 1970 and increased by 74 percent from 1975 to 1988, the nation's death rate declined in neither period. But industry succeeded in lowering its death rate, both by spending to improve health on the job and by discovering, developing, and adopting ways to save lives.
And how about women?
By 1981 (the latest date available), women's kitchen work had been cut about twenty hours a week, according to national time-budget studies from Michigan's Institute of Survey Research. That reduction came about because families bought more restaurant meals, more canned, frozen, and prepared foods, and acquired an arsenal of electric appliances. Women also spent fewer hours washing and ironing clothes and cleaning house. Fewer hours of work in the home had little impact on women's labor force participation rate until the great increase after 1950.
And, on real wages:
By 1980 real earnings of American nonfarm workers were about four times as great as in 1900. Government taxes took away an increasing share of the worker's paycheck. What remained, however, helped transform the American standard of living. In 1900 only a handful earned enough to enjoy such expensive luxuries as piped water, hot water, indoor toilets, electricity, and separate rooms for each child. But by 1990 workers' earnings had made such items commonplace. Moreover, most Americans now have radios, TVs, automobiles, and medical care that no millionaire in 1900 could possibly have obtained.
And why was there so much progress in real wages and working conditions?
The fundamental cause of this increase in the standard of living was the increase in productivity. What caused that increase? The tremendous changes in Korea, Hong Kong, and Singapore since World War II demonstrate how tenuous is the connection between productivity and such factors as sitting in classrooms, natural resources, previous history, or racial origins. Increased productivity depends more on national attitudes and on free markets, in the United States as in Hong Kong and Singapore. Output per hour worked in the United States, which already led the world in 1900, tripled from 1900 to 1990. Companies competed away much of that cost savings via lower prices, thus benefiting consumers. (Nearly all of these consumers, of course, were in workers' families.) Workers also benefited directly from higher wages on the job.

Posted on September 2, 2012  Posted to Cato@Liberty

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