David Boaz

The Securities and Exchange Commission is investigating “political intelligence” firms that promise to give investors advance word of what Congress and regulators may do next. A continuing Washington Post investigation reports:

Antonia Ferrier, a spokeswoman for [Sen. Orrin] Hatch, said the senator is aware that his staff participates in such events [as an investor phone call on Medicare and private insurers, organized by a Washington consulting firm] and that communicating with these types of groups is not unusual given the technical nature of the issues the committee handles.

“Staff members meet with stakeholders on every side of an issue as a means of better crafting policy solutions,” Ferrier said. “What information they share is the same information that Senator Hatch shares in an open and transparent way with his constituents. Senator Hatch has a zero-tolerance policy for anyone who would take advantage of privileged information, and he’s confident that no one on his staff has done that.”

This is just one more inevitable facet of the system we live under. As long as the federal government spends trillions of dollars, and reallocates more trillions through taxes and regulation, and issues bans and mandates on everything from contraception to local speed limits, you’re going to see a lot of money spent to control how those decisions are made. Which includes spending money to find out what the decisions will be, in order to make appropriate investment choices. 

In a review of five books on the Soviet police state, David Satter notes this prophetic volume:

Landmarks

By Nikolai Berdyaev, et. al (1909)

The year was 1909. Terrorists were murdering not only czarist ministers but provincial officials and police. It was in this atmosphere that “Landmarks” was published in Moscow. The contributors, all of them Russian Orthodox believers, called on the intelligentsia to reject materialist moral relativism and return to religion as a means of grounding the individual. Their essays, with stunning foresight, described all of the characteristics of the coming Soviet state. The religious philosopher Nikolai Berdyaev explained the roots of its contempt for the individual. He said that the revolutionary intelligentsia hungered for a universal theory but was only prepared to accept one that justified their social aspirations. This meant the denial of man’s absolute significance and the total subordination of spiritual values to social goals. Bogdan Kistyakovsky wrote that the intelligentsia’s predilection for formalism and bureaucracy and its faith in the omnipotence of rules were the makings of a police state. A hundred years later these essays are still among the best arguments ever made against revolutionary fanaticism, political “correctness” and the drive to create “heaven on earth.”

Sounds like a book I should have heard of before now. 

In last Sunday’s Washington Post, Jennifer Rubin wrote that Republicans must move beyond their adoration of Ronald Reagan and recognize, among other modernizations, that

America will not return to the pre-New Deal era. Limited government, not small government, must be the aim. That requires low taxes, not taxes that never increase.

She wants Republicans to give up “the pledge” and be willing to raise taxes if that’s the prudent thing in any circumstance.

Republicans and conservatives and libertarians who don’t want to follow her advice could find some historical support just a few inches away on the same page of the “Outlook” section. Reviewer Walter Isaacson quotes this line from a new book on the origins of the Boston Tea Party and the American Revolution, Bunker Hill by Nathaniel Philbrick:

Rather than propose a means of raising revenue that they deemed fair, the colonials were more than happy to direct their considerable energies toward opposing whatever plan the British ministry put forward.

That is, the American revolutionaries didn’t feel obligated to help the British government raise all the money it wanted. They were satisfied to oppose what they regarded as unwarranted taxation.

Tax resistance: an American tradition since 1773. Or 1767. Or 1687.

Danny Hakim of the New York Times tells us how state government works under Andrew Cuomo, in an in-depth investigation of the Empire State Development Corporation:

New York State’s economic development agency created a new position last June, and then found a candidate to fill it: a young man named Willard Younger, who had just graduated from Colgate University with a degree in classics and religion. He became a special projects associate, at a salary of $45,000 a year, according to state personnel records.

His father, Stephen P. Younger, is a lawyer and power broker in legal circles who was a member of one of Gov. Andrew M. Cuomo’s transition teams. He has also donated $26,000 to Mr. Cuomo’s campaigns over the years, disclosure records show.

The next month, the agency hired 23-year-old Andrew Moelis, a University of Pennsylvania graduate, for another new position, strategic planning associate, at a salary of $75,000 a year.

Shortly before Mr. Moelis’s first day of work, his father, Ron Moelis, a prominent real estate developer, gave $25,000 to Mr. Cuomo’s re-election campaign, according to the records.

Check out the return on investment available to political donations: give $25,000, get $75,000 within a year. I wonder if any of Mr. Moelis’s real estate developments offered such an ROI. As I wrote many years ago in the Wall Street Journal:

Business people know that you have to invest to make money. Businesses invest in factories, labor, research and development, marketing, and all the other processes that bring goods to consumers and, they hope, lead to profits. They also invest in political processes that may yield profits.

If more money can be made by investing in Washington than by drilling another oil well, money will be spent there….

Every dollar spent by the federal government ends up in someone’s pocket as a salary, a transfer payment, a subsidy, a purchase or a loan. But there are other valuable services available, too: regulations that eliminate or hamstring your competitors, for instance, or a tax provision that induces consumers to purchase your product.

But “jobs for the boys” can also be a way to reward political supporters. And if it’s a job for your own boy, so much the better.

Agencies like this can also be very helpful to a politician with larger ambitions:

Empire State has also hired friends of Mr. Cuomo who may help form his political brain trust should he decide to run for president in 2016.

James P. Rubin, a former State Department spokesman, was hired at the agency in 2011 as counselor on competitiveness and international affairs, with a salary of $150,000 a year. Mr. Rubin’s appointment was seen by political consultants as a move by Mr. Cuomo to add a foreign policy hand to his stable.

Empire State hired 49 people in the first 20 months of the Cuomo administration, according to personnel records obtained by The Times. Nearly a third were the governor’s political associates, donors and friends, or their relatives, the records and interviews show.

At least seven of the new hires with connections were placed in newly created positions.

We hear a lot about austerity in government today. We hear that “state and local government coffers [are] empty.” We hear that spending has been “cut to the bone.” I’d say that the Empire State Development Corporation would be a good place to save the New York taxpayers $741.8 million this year.

In At the Brink, economist John Lott argues that the Obama administration’s policies are destroying what has been a health care system that has been the envy of the world. Furthermore, Obama inherited a severe recession, but the spectacular “stimulus” spending with which Obama launched his presidency not only has failed to help the economy—it has poisoned it, slowing the recovery. His positions on regulations and taxes have also harmed the economy.

But the Obama administration’s legacy isn’t just going to be on health care and the economy, Lott says. For example, another long-lasting legacy will be on people’s ability to defend themselves with guns. The administration’s appointments to the courts, as well as federal actions and its unprecedented push for states to adopt gun control, will reduce gun ownership and endanger lives. Join us for a spirited critique of President Obama and his policies.

The Establishment is very concerned this morning that the representatives of the people have resisted demands for stricter gun control measures. The president calls it “shameful.” The New York Times editorial board intones, “The Senate Fails America.” Dana Milbank of the Washington Post deplores a lack of “courage” on Capitol Hill, though some might think it takes courage to defy the overwhelming drumbeat of the national media.

Whatever the merits and popularity of the specific measures that went down to defeat in the Senate on Wednesday, I think the Establishment fails to appreciate the depth of American support for the Second Amendment. NPR and other media have lately noted a growing libertarian trend in American politics. That’s not just about taxes, Obamacare, marijuana, and marriage equality. It also involves gun rights. After each high-profile shooting, support for gun control rises. But it tends to fall again in short order, as public opinion reverts to the baseline of strong support for gun rights.

I was struck by this poll graphic in the Washington Post on Wednesday. Despite the virtually unanimous support for stricter gun control in the national media, along with other opinion shapers such as Hollywood and the universities, and despite the mass shootings that have received so much attention in our modern world of 24-hour news channels, Americans are becoming more convinced that guns make your family safer. 

 

The fact is, America is a country fundamentally shaped by libertarian values and attitudes. Our libertarian values helped to create the Constitution and the Bill of Rights, and those documents in turn shape our thinking about freedom and the limited powers of government. In their book It Didn’t Happen Here: Why Socialism Failed in the United States, Seymour Martin Lipset and Gary Marx write, “The American ideology, stemming from the [American] Revolution, can be subsumed in five words: antistatism, laissez-faire, individualism, populism, and egalitarianism.” If political scientists Herbert McClosky and John Zaller are right that “[t]he principle here is that every person is free to act as he pleases, so long as his exercise of freedom does not violate the equal rights of others,” then we can expect Americans to cling to their gun rights for a long time.

The New Republic’s daily email this morning asks, “Who killed gun control?” Who? The Americans.

Covering the budget fight and President Obama’s tepid and misleading budget proposal, NPR’s Scott Horsley reported this morning on opposition from the left:

We saw sort of the counterweight to the Tea Party on the right yesterday … protesting  outside the White House.

Big rally against budget constraints, eh? Like the Tea Party rallies such as this one?

Well, not exactly like the Tea Party rallies. According to various news stories, the rally was supported by numerous groups, including the AFL-CIO, MoveOn.org, the National Organization for Women, Progressive Change Campaign Committee, Democracy for America, and National Committee to Preserve Social Security and Medicare. Speakers included Sen. Bernie Sanders, liberal activist (and brother of former presidential candidate Howard Dean) Jim Dean, and at least two members of Congress. 

And here’s how the AP reported the results:

Liberal lawmakers from Congress and a coalition of like-minded groups rallied outside the White House on Tuesday, voicing frustration at the Democratic president they say has let them down by proposing cuts to Medicare and Social Security.

“If they vote to cut Social Security, they may not be returning to Washington,” Sanders told about 100 people who gathered with signs that read “No Chained CPI” and “We earned our Social Security.”

I’m not sure the president should have too much confidence in this “counterweight to the Tea Party.”

A headline in Roll Call, the newspaper and website that has been “the source for news on Capitol Hill since 1955,” over an article by long-time journalist and editor David Hawkings, reads

D.C. Could Take Lessons From Hartford on Gun Control Deal

What’s the lesson? That when legislators buckle down and work hard, they can pass “the strongest gun control law in the nation.”

This reflects two articles of faith that seem to be devoutly held by mainstream journalists:

1. Passing laws is good. Passing more laws is better. The purpose of a legislative body is to pass laws.

2. Gun control is good.

On the first point, just consider the large number of stories, especially this past December and January, on “the least productive Congress in history.” The assumption is that “productivity” for Congress is passing laws—laws that in most cases will raise taxes, raise spending, increase regulation, and/or intrude the federal government into more aspects of our lives. 

As for gun control, the enthusiasm of the national media for such measures is pretty obvious. I was struck by NPR’s hourly news roundup last week, which began: 

More than 100 days after the shootings in Newtown, Connnecticut, that killed a total of 28 people including 20 elementary school students, Congress has still not passed new gun registration legislation.

“What are they waiting for?” the news anchor implies. I suppose the news report could have begun:

Just five years after the Supreme Court ruled that the Second Amendment protects the individual’s right to bear arms, members of Congress are seeking to pass gun control legislation.

But I’m not holding my breath. It’s just a reminder that the language used even in straight news stories can frame the issue in the minds of readers and listeners.

When I read in my local paper, the Sun Gazette (published in Washington’s Virginia suburbs), that the Arlington County Board was planning to raise property taxes, I prepared the chart below. It shows how my own property taxes have risen since I bought a house in 1997 (with my first tax bill, in 1998, set at 100). I had the following letter published this week in the Sun Gazette: 

[Arlington] County Board members are discussing raising the real estate tax rate by 5 cents. The Sun Gazette on Feb. 28 published a chart showing that the proposed rate was actually higher in 2000 and 2001. But what you didn’t show was the soaring level of real estate assessments. Property taxes are much higher than they were a decade ago. My first Arlington tax bill was in 1998. My 2012 bill was more than double the 1998 rate–about a 127-percent increase. I think that’s true for most Arlington homeowners. It’s not easy to find past budgets on the county government’s Web site, but I would assume that the county’s revenue has gone up approximately as much. So Arlington isn’t hurting for revenue; it’s just itching to raise spending even faster than tax revenue rises. The Sun Gazette quoted County Board member Libby Garvey saying that a 5-cent tax hike is “a very good compromise.” Not for taxpayers, it isn’t.

This pattern happens in many states and localities, of course: they spend money freely in good times, then run into trouble when the economy or the housing boom slows down. As Chris Edwards told a reporter in 2009, states during the preceding years had “repeated the same mistakes they made in the late ’90s, assuming the good times were going to last forever.” And when the money stops rolling in, they don’t want to cut back–so they decide to raise taxes to keep their revenue and spending at the high levels they reached during the boom.