David Boaz

It's enviro vs. enviro in Washington's most "progressive" suburb, Takoma Park. Indeed, the Washington Post reports, "a potentially bough-breaking debate between sun-worshipers and tree-huggers." That is, which is more environmentally desirable, solar power or tree cover?

The modest gray house in Takoma Park was nearly perfect, from Patrick Earle's staunchly environmentalist point of view. It was small enough for wood-stove heating, faced the right way for good solar exposure and, most important, was in a liberal suburb that embraces all things ecological. Or almost all. When Earle and his wife, Shannon, recently sought to add solar panels to the house, which they have been turning into a sustainability showplace, the couple discovered that Takoma Park values something even more than new energy technologies: big, old trees. When they applied to cut down a partially rotten 50-foot silver maple that overshadowed their roof, the Earles ran into one of the nation's strictest tree-protection ordinances. Under the law, the town arborist would approve removing the maple only if the couple agreed to pay $4,000 into a city tree-replacement fund or plant 23 saplings on their own.

So now the rival environmentalists are squaring off in front of the city council:

Takoma Park City Council members, who are considering revising the 1983 tree-protection law, listened Monday night as otherwise like-minded activists vied to claim the green high ground. Tree partisans hailed the benefits of the leafy canopy that shades 59 percent of the town: Trees absorb carbon, take up stormwater, control erosion and provide natural cooling.... Solar advocates at the hearing said that they are tree lovers, too, but that scientific studies support the idea of poking select holes in the tree cover to let a little sun power through.

Being an environmentalist homeowner can become a full-time job:

But even some veteran solar users don't like the idea of trading trees for panels. Mike Tidwell, founder of the Chesapeake Climate Action Network, installed solar panels on his Takoma Park house 10 years ago. As the trees have grown, the panels' effectiveness has diminished, and Tidwell now buys wind power credits to supplement them. Still, he said, "I don't believe you should cut down trees for solar." Rather, he thinks neighbors should work together to place shared panels on the sunniest roofs.

The city's "official arborist" turned down Earle's application to tear down one rotting tree to accommodate his solar panels. Now the council is debating the issue.

The Earles' council member, Josh Wright, said he was sympathetic to their plight. He said it should remain hard to cut down a tree, but he'd like to see a break for people installing solar power. Wright also wants all homeowners to get credit for trees they may have planted in the years before they remove a tree.

It all sounds very complicated. And who knows what the right answer is? Or if there is a right answer? Or if the right answer might change next year? And that's where property rights come in.  They allocate both jurisdiction and liability over scarce resources, like roofs, trees, and access to sunlight.  A little "law and economics" can help to understand the Takoma Park Tree Tussle.  Nobel Laureate in Economics Ronald Coase, who just turned 100, brought law and economics together to study the way that people externalize costs (make others pay for them) or internalize them (take them into account when making decisions).  When property rights are well defined and legally secure, and rights can be exchanged at low cost, resources will be directed to their most highly valued use.  In fact, the initial allocation of property rights doesn't affect the allocation of resources, if the transfers are freely and easily negotiable. That, unfortunately, is no longer the case in Takoma Park, where instead of a fairly straightforward transaction (facilitated by a purchase), there is a tussle over ill-defined rights and obligations that have little or no legal security, in a very expensive and costly process of negotiation that will almost certainly consume more wood pulp for memos than is contained in the tree in question.  Well-defined and legally secure property rights save us the rather substantial trouble of sitting down like the Takoma Park City Council and trying to judge the advisability of every proposed purchase, all the while consuming large amounts of paper and exuding large amount of hot air.

A new report says that traffic congestion is worse, and the American Public Transportation Association urges Congress to . . . spend more money on public transportation. Cato senior fellow Randal O'Toole has been challenging the received wisdom on traffic and mass transit for years. See his book Gridlock: Why We're Stuck in Traffic and What to Do About It, and lots of other studies. In November he debated the head of the American Public Transportation Association at a Cato Policy Forum:

From a New York Times report on NBC's interview:

Former Vice President Dick Cheney . . .  said President Obama is likely to be a one-term president because his policies are unpopular with the public. “His overall approach to expanding the size of government, expanding the deficit, and giving more and more authority and power to the government over the private sector,” Mr. Cheney said in an interview with Jamie Gangel for NBC News. “Those are all weaknesses, as I look at Barack Obama. And I think he’ll be a one term President."

I recall the Bush-Cheney administration also came under criticism for "expanding the size of government, expanding the deficit, and giving more and more authority and power to the government," and it didn't prevent him from being reelected.

Bruce Reed, who has served as chief domestic policy adviser to President Clinton, CEO of the Democratic Leadership Council, and executive director of President Obama's deficit-cutting commission, has been named chief of staff to Vice President Biden. In 2004 Bruce Reed joined Ron Suskind and David Frum at a Cato Policy Forum on "wonks vs. hacks." Video here. In 2006 he joined Markos Moulitsas, Harold Meyerson, and Nick Gillespie in an online debate at Cato Unbound titled "Should Libertarians Vote Democrat?"

On Saturday, inspired by Fareed Zakaria's writings on "illiberal democracy," I expressed concerns about the prospect of quick elections in Tunisia, a country that has not had a free press, an independent judiciary, or other elements of liberalism. Khelil Bouarrouj, a Tunisian-American libertarian, thinks I am overly pessimistic. Here's what he wrote me:

While Tunisia has never been a true democracy, the largely educated middle class in the nation is well-learned when it comes to the principles of a free society. The regime's authoritarianism does not speak for the courageous Tunisian lawyers, activists and students; along with the general professional class. Tunisians know what a free press looks like. They've seen it around the world when they travel and social networks have served as a dissident channel. And let me add without hyperbole that on Saturday Tunisians awoke to a free press. The usually propagandistic state television changed its logo (which was a regime ensign) and became a voice for free debate with call-ins from average Tunisians. The private media was hosting panel discussions and it was stunning: people have shaken off the fear, and educated journalists and other civil society individuals were openly debating and discussing a whole host of issues. The newspapers that were published that morning ceased with self-censorship, and their coverage and editorials became free forums. A casual reader and observer of the press/media would conclude that it is dominated by a liberal social class with strong democratic values and articulation. In short, the past absence of an institutionalized free press does not mean that Tunisians do not understand the merit of free debate and differing voices. They always have and needed only the opportunity to breathe, which they have now seized. This lesson, I believe, applies to democracy as well. The fact is that liberal social norms have been ingrained in Tunisian culture: a secular state, equal rights for women, higher education, religious tolerance, etc. I do not state this as a patriot, who has certainly been emotionally moved in recent days, but as an observer who has numerous family and friends in the nation and been engaged in countless political discussions. The images of the protesters themselves tell a story. Unlike in other Arab nations, the opposition was not uncouth Islamists but a liberal middle class and students. The demonstrations at colleges had Arab youth spell out the word freedom (which was widely evoked during the month), and this was not just a slogan but a genuinely understood ideal. The nation is ready to be a true democracy and truly entrench democratic values. The cultural ethos is already democratic and this is what led to the protests, defining their voice and even the demand that the transition government adhere to the very letter of the constitution. After the president fled, the prime minister took over but Tunisian lawyers immediately declared it unconstitutional (as it was), along with buzzing messages on Facebook by the newly energized populace, and within hours the premier handed power to the speaker of the parliament according to the constitution. The high court has declared that elections shall be held in 60 days per the constitution as well. Tunisians wanted to start off right with respect for the rule of law. And that's just it: this nation has been democratic at heart; the recipe for democracy if you will, and the rule of law is understood, respected by Tunisians and had been upheld even under the past regime with the obvious exception of the corrupt and now dethroned ruling elite. Tunisians precisely threw them out because of their repressive rule and flagrant abuse of the law. And the fact is that the people are so committed to a free, democratic Tunisia and the rule of law that they did not acquiesce to an unconstitutional transfer of power, even though they had achieved their main objective of expelling the president and the premier was going to reign solely as a temporary president until elections are held. Again: people wanted to start a new dawn without compromise on the rule of law. It is no trivial matter that even in the excitement and shock of victory people still thought about the constitutional provision and demanded it be respected. One may have believed that the people would have been elated and surfeit to achieve a monumental victory, unprecedented in the Arab world for a popular revolt to bring down an Arab tyrant, and not bothered with a provision, which would appear to be minor in context of the historic day and new beginning, and which is ultimately inconsequential since the caretaker would leave after elections. But they were not, and that speaks volumes. I have been glued to Facebook updates, the best pulse of the nation right now, and after the premier assumed power Tunisians immediately noted that this is unconstitutional and began to demand his removal. Tunisians wanted the constitution to be respected from Day One and it was the people who made it happen, again. On Facebook, the sentiment is unanimous: a clean break with the ruling party, respect for the rule of law, free and fair elections, and upholding the constitution. After such a dear victory, the widely heard pronouncement is that the people will not be complacent and are ready and willing to eagerly guard their rights and see to it that a democracy worthy of its name will be planted in Tunisia. After Friday, the Tunisia people have earned with great sacrifice their freedom, and the people are determined that their God-given rights shall not slip an inch and are closely watching the transition as the proverbial vanguards of liberty, and the people will see to it that their hope will be made concrete. The nation is ready and while no democracy is perfect and all democracies are often in a state of oscillation, Tunisia is the best bet and hope for the Arab world's first real liberal democracy. And I believe it will be a model for the rest of the region.

In the wake of President Zine el-Abidine Ben Ali's abdication in Tunisia on Friday, both President Obama and Secretary of State Hillary Rodham Clinton stressed the need for quick elections in a country that has never known democracy, freedom of the press, or the rule of law:

Secretary of State Hillary Rodham Clinton . . .  reacted Friday to Ben Ali's departure with a statement condemning government violence against protesters and calling for free elections. "We look to the Tunisian government to build a stronger foundation for Tunisia's future with economic, social and political reforms," she said. . . . President Obama condemned the use of violence against the protesters and urged the government to hold elections that "reflect the true will and aspirations" of Tunisians.

I'm reminded of Fareed Zakaria's concerns about the blithe promotion of elections in his article "The Rise of Illiberal Democracy" (pdf; later expanded into a book, The Future of Freedom: Illiberal Democracy at Home and Abroad):

...for almost a century in the West, democracy has meant liberal democracy—a political system marked not only by free and fair elections, but also by the rule of law, a separation of powers, and the protection of basic liberties of speech, assembly, religion, and property. In fact, this latter bundle of freedoms—what might be termed constitutional liberalism—is theoretically different and historically distinct from democracy. As the political scientist Philippe Schmitter has pointed out, “Liberalism, either as a conception of political liberty, or as a doctrine about economic policy, may have coincided with the rise of democracy. But it has never been immutably or unambiguously linked to its practice.” Today the two strands of liberal democracy, interwoven in the Western political fabric, are coming apart in the rest of the world. Democracy is flourishing; constitutional liberalism is not.... Constitutional liberalism, on the other hand, is not about the procedures for selecting government, but rather government’s goals. It refers to the tradition, deep in Western history, that seeks to protect an individual’s autonomy and dignity against coercion, whatever the source—state, church, or society. The term marries two closely connected ideas. It is liberal because it draws on the philosophical strain, beginning with the Greeks, that emphasizes individual liberty. It is constitutional because it rests on the tradition, beginning with the Romans, of the rule of law.... Since 1945 Western governments have, for the most part, embodied both democracy and constitutional liberalism. Thus it is difficult to imagine the two apart, in the form of either illiberal democracy or liberal autocracy. In fact both have existed in the past and persist in the present. Until the twentieth century, most countries in Western Europe were liberal autocracies or, at best, semi-democracies. The franchise was tightly restricted, and elected legislatures had little power.... Only in the late 1940s did most Western countries become full-fledged democracies, with universal adult suffrage. But one hundred years earlier, by the late 1840s, most of them had adopted important aspects of constitutional liberalism—the rule of law, private property rights, and increasingly, separated powers and free speech and assembly. For much of modern history, what characterized governments in Europe and North America, and differentiated them from those around the world, was not democracy but constitutional liberalism. The “Western model” is best symbolized not by the mass plebiscite but the impartial judge.... It is odd that the United States is so often the advocate of elections and plebiscitary democracy abroad. What is distinctive about the American system is not how democratic it is but rather how undemocratic it is, placing as it does multiple constraints on electoral majorities.... While it is easy to impose elections on a country, it is more difficult to push constitutional liberalism on a society. The process of genuine liberalization and democratization is gradual and long-term, in which an election is only one step. Without appropriate preparation, it might even be a false step.... Today, in the face of a spreading virus of illiberalism, the most useful role that the international community, and most importantly the United States, can play is—instead of searching for new lands to democratize and new places to hold elections—to consolidate democracy where it has taken root and to encourage the gradual development of constitutional liberalism across the globe. Democracy without constitutional liberalism is not simply inadequate, but dangerous, bringing with it the erosion of liberty, the abuse of power, ethnic divisions, and even war.

Let's hope that the new leaders and the newly active citizens of Tunisia focus on developing freedom of the press, civil liberties, the rule of law, and constitutional limits on the power of government--including economic policies (pdf) more conducive to growth and progress--even as they move toward holding elections.

"Faced with rising international food prices," Steven Mufson writes in the Washington Post, "governments around the world are cooking up measures to protect domestic supplies and keep a lid on prices at home." Instead of export bans, subsidies, and price controls, governments might better consider the role of their central banks in creating money out of thin air and causing price inflation. Cato senior fellow Gerald P. O'Driscoll, Jr., made that point at the blog ThinkMarkets:

“Prices Soar on Crop Woes” reads the headline in today’s Wall Street Journal. Global output of key crops such as corn, soybeans and wheat is down, and their prices are up, respectively, 94%, 51% and 80% from June lows. Today’s PPI report has wholesale prices up 1.1% in December after rising 0.8% in November. The Journal reminds us that in 2008 high food prices sparked riots around the world. Meanwhile Fed officials tell us they don’t expect inflation.  It is not an issue of expecting inflation, but of observing it here and now.  The Fed prefers, of course, to look at “core” inflation rates, which are much lower. A former Fed colleague explained to me the central bank does so on the theory that people do not need to drive to work and can stop eating. In our global economy, easy US monetary policy has thus far mainly affected commodity prices (including now food), real-estate in Asia and now broader price measures in Asia. It is implausible that the US would remain unaffected. Food, energy and clothing prices are all rising. I don’t think many households are presently gripped with a fear of deflation. In the Mises/Hayek theory of economic fluctuations, the transmission of monetary shocks works through producer prices and incomes, and only later consumer prices. No measure of consumer prices, and certainly not a subset of consumer prices, is an adequate gauge of inflation.

(For another take on rising food prices, you can read the views of Paul Krugman and Lester Brown, who say that at last -- at last! -- we really are running into those "binding resource constraints" that Brown has been predicting for his entire life and that will finally require us to start living at Chinese levels.)

Advocates of limited government often worry about how to maintain republican government and freedom if a substantial portion of the population don't pay taxes and are net beneficiaries of government largesse. Lately, it seems like a lot of the advocates of bigger government and higher taxes don't pay their own taxes -- like Tom Daschle, Timothy Geithner, Eleanor Holmes Norton, Charles Rangel, Al Franken, Governor David Paterson’s top aide, Democratic National Convention staffers, Al Sharpton, and so on. Now the Washington Post has found another one:

Since joining the D.C. Council two years ago, Michael A. Brown has become the chief advocate for raising taxes on the city's wealthiest residents, arguing that those who earn at least $250,000 a year are not paying their share. Yet Brown and his wife have failed to pay the property taxes on a Chevy Chase home assessed at $1.4 million, according to public records. Brown, who earns more than $300,000 a year, owes the District $14,263 for property taxes, the records show.

I guess it's easy to support higher taxes if you don't intend to pay them. But I suggest that Brown bite the bullet, recruit Daschle, Franken, Norton, and their colleagues, and form a new organization:

Non-Taxpayers for a Tax Hike

Virginia governor Bob McDonnell must be a Bush Republican. The Washington Post reports today:

Virginia Gov. Robert F. McDonnell plans a massive spending campaign that he said would unclog state roads, award thousands more college degrees and spur job creation, part of an aggressive legislative agenda he is expected to roll out this week. McDonnell (R) will press lawmakers to approve a series of statewide projects he said would be paid in part through Virginia's $403 million budget surplus, $337 million in higher-than-expected tax revenue, and $192 million generated through cuts and savings.... He plans to borrow nearly $3 billion over the next three years.

That doesn't sound like the agenda of a Reagan Republican or a Tea Party Republican. It sounds a lot like the program of George W. Bush, the biggest-spending president between LBJ and, well, the president who followed Bush. Of course, McDonnell might also be called a George Allen Republican. Allen, who served as governor of Virginia from 1994 through 1997, has a reputation as a staunch conservative. But he earned a grade of 40 on the Cato Institute's Fiscal Policy Report Card. McDonnell seems to be headed for a similar grade.

Cato senior fellow Johan Norberg, author of In Defense of Global Capitalism and Financial Fiasco, has the cover story in this week's issue of The Spectator, the eminent 182-year-old British weekly. Titled "The great debt bubble of 2011," it warns that governments are repeating their mistakes of the past decade:

There is a broad consensus that the financial crisis of 2007 was at least in part a result of record-low interest rates, huge deficits and large-scale credit-financed consumption. Today, governments across the world are trying to solve the crisis — by means of record-low interest rates, huge deficits and large-scale credit-financed consumption. This time, they are also using more novel means of creating easy money: bank bailouts, stimulus packages and quantitative easing.

After discussing the soaring debt burdens of European countries, Norberg writes:

At this point, it is traditional to say: thank God for those roaring economics in East Asia, India and Brazil. But how real is their remarkable growth? Look closely, and even this may be in part a result of artificial stimulus. India’s and Brazil’s growth is financed by short-term capital from abroad: money that could disappear overnight. Easy money always ends up somewhere. The last time it was in property, this time it is in emerging markets (and often in the property markets of emerging markets).... Aside from the foreign capital inflows, China had its own stimulus package, as big as America’s. Beijing has printed yuan and pushed banks and local governments to spend like drunken Keynesians. Absurdly, China’s money supply is now larger than America’s, even though its economy is a third of the size. We can see the results of this stimulus in stock market prices and in new roads, bridges and housing complexes all over the country.

Happy New Year! And watch for more on incipient bubbles in the January-February issue of Cato Policy Report.