Saturday, August 27, 2011

Ron Paul: Too Crazy for Your Consideration?

The last week has been filled with all sorts of left/right punditry examining the issue of a Ron Paul presidency. Now, for the record, I am not a Ron Paul booster, I like some of the things he has to say, but I think from a purely Libertarian perspective Gary Johnson is far more appealing and interesting. That being said I find it interesting that both the conservatives and the progressives think Ron Paul and his ideas would be the worst thing that ever happened to the country. If nothing else that should get the people’s attention, and maybe get them realizing the stranglehold these two groups have on American politics really needs to come to an end.
The conservatives have been frothing themselves up over at the American Spectator about the horror that could come from a Paul presidency, mostly landing on the notion that as President he may not want to bomb the piss out of every tin-plated dictator anytime, anywhere, no questions asked or congressional approval needed. This goes to the point of Libertarians being isolationists and not fit to lead Empire America as the Neo-Con (which somehow in these screeds has become an anti-Semitic term?) “adults” see fit. Isolationists is of course used as a convenient debate stifling term, for to be an isolationist means you would have let the Nazis or the Commies take over the world. There is no room in their world for the fact that $700 Billion defense budgets are unsustainable, or that questioning the need, utility or cost effectiveness of certain military expenditures isn’t unpatriotic, it is common sense. If we pulled out of our bases in Europe do they honestly believe the Russians would come crashing across the borders? Who, what and more importantly where would we be fighting a massive land war that necessitates us keeping such a large military force at the ready? There are all sorts of hoots and hollers that if the U.S. retreats from its role as world policeman that the Chinese will step into the vacuum. So we must therefore maintain this massive military presence all around the world, drawing more and more of our budget (much of it borrowed from the Chinese), in order to counteract Chinese “influence” in the world? If we keep this up they will be able to easily spread their influence after we go bankrupt. What will we do then?
The progressive set has been asking itself if a Ron Paul who strongly believes in civil liberties, more so than Obama, would be a fair trade-off on other issues. The answer of course is a resounding no. They go on and on about the end of civil rights and abortion rights and the “kooky” ideas he has about the economy and the state. This whole line of questioning for progressives was a non-starter to begin with, for Paul’s position on civil liberties is interlinked and grounded in the unacceptable and dangerous propositions they continue to list, a Federal government whose power is actually limited. Progressives can not, outside of the realm of civil liberties, envision a limited government, for that does not allow for all the wonderful positive things government can do. It does not matter what Paul’s position is on any near and dear issue, the fact that he is not on team big government disqualifies him from any consideration. Progressives have been upset with Obama for not being “progressive“ enough, and some are calling for a primary challenge from the left. This more than anything should highlight their irrelevance. Pushing, against popular opinion for a greater and grander left-ward agenda resulted in the 2010 midterm outcome, and they don’t see or acknowledge that. If Obama were to stand up and run on bigger government, more and deeper regulation, unions for everyone and single payer healthcare you would have a situation in which even Michele Bachman could squeak out a win. There is no room for compromise in the hardcore progressive agenda, so even bringing up the “what ifs” of a Paul presidency doesn’t even rank as an academic exercise.
For the American people not thoroughly entrenched in either the conservative or progressive camps this should all be very enlightening. There is a lot of talk about gridlock and incivility in Washington, but each side of our perpetual dichotomy claims the solution is giving their side complete power, no talk of compromise or a change of direction. Understanding you can not, in a country this large and diverse, always get your way 100% of the time should be the starting point. Some of Paul’s positions are unique, some may even be “kooky”, but they certainly deserve some consideration. The weight of the office and the realities of the times always modify what presidents end up doing in office as compared to their campaign promises. Obama promised quite a bit, and progressives are unhappy about how little was actually delivered, and that is always the way things go. A Paul presidency, focused on rolling back elements of the state, would annoy both sides of the spectrum, and if they could convince the American people it was the wrong track, then he would face a backlash in his midterm elections, the same way Obama did. The reason Paul does well in polling is that he is preaching a different gospel, one in which government is not the be all and end all, and the reason so many of the other candidates are trying to skirt his line (while trying to maintain a toehold with the traditional conservatives) is that it is an appealing proposition to many people. Will he prevail in the primaries? Probably not. Could he be elected president? Why not? Continuing on with the fiction that you can perpetually patrol the world without thought to cost and rain down bombs without consequences should seem crazy in today’s environment. Beating the drum of Big Government, that it can and should perpetually grow and solve all problems of everyone everywhere (whether they want your help or not) should be the kooky proposition. The pundits want Paul to be ignored, because there is a chance that people might see through the relative insanity of the hardcore left/right and go in a different direction, which would be very, very bad for them. If we can minimize the impact of these ideologues on each side in selecting our candidates and our policies then the American people might actually be the better for the effort, and if nothing else it is good that we are talking about it for once.

Monday, August 15, 2011

“Were You Born This Stupid or is it Something You’ve Worked at Your Whole Life?”

I have been called a lot of things, most unrepeatable, but rarely stupid. It seems as though I must be. I have always seen myself as somewhat of a Libertarian. I have questioned the notion of the state knowing best my whole life. When I was getting my Master’s degree this became a somewhat problematic position. I had one professor with whom I would have knock down drag outs with over the unquestionable orthodoxy of the Progressive model of the State. I enjoyed the intellectual challenge of the conversation, but would always find frustration in the lack of willingness to concede a point I thought well defended. I knew there were differing ways to look at the world, I had been influenced by the writings of so many, but those seemed to be ignored as possible solutions to the problems at hand. Well, it seems after all these years that it was me and not them. This last few weeks has brought about a flourish of punditry about just how inane everyone of the limited government persuasion actually is. To hear it told Americans “live in a dream world where their success is their own” never acknowledging that we would have nothing without big, bold government central planning. We are intellectual primitives who reject modern economics” in the face of the undisputable wisdom of John Maynard. It seems to defy any possible logic that the middle class does not “flock to progressives, who are supposed to have their interests in mind.”  Most offensive of all, the notion that our Ivy League Super Nerd Bureaucrat Betters need to be more sensitive, keeping in mind how the Jocks and Cheerleaders made them feel in High School while they lord over the now dejected failures of the late teen hierarchy.  All of these tirades work of the central premise that they are righteously correct in their assumption of the world, their plan is the only possible solution, and those of use that disagree are either uneducated or willfully ignorant to the facts.  When your starting position is “you’re just stupid” you are going to have a difficult time convincing anyone to listen to the rest of your argument, especially when there are valid counter-positions they are attempting to shout down.
The need for a huge Keynesian spending spree to get the economy moving is on the front burner of most every Progressive publication and economist.  For these people, the orthodox notion of deficit funded stimulus is unquestionable.  It is simply the only course of action, and to disagree is mere corporate funded evil shenanigan.  That is what we teach in the schools after all.  It makes it seem the counter points were developed on the back of a cocktail napkin, while drinking, in some backwoods dive.  Last time I looked there were people like von Mises, Hayek and Friedman who disagreed with Keynes on an academic and practical policy level.  Not really uneducated corporate dupes.  The refrain that we are all just ignorant of the facts and the necessity keeps getting louder as the rest of the world ignores them just the same.  Strange that every Industrialized country, International Regulatory body and private ratings agency have all come to the same conclusion that spending and debt must be addressed despite what all the “smart” people are saying.  We keep hearing about the danger of repeating 1937, as if everyone else is completely unaware it ever occurred.  Is it not possible that they have actually examined the issue and found that these are different circumstances?  Maybe they are aware that quite a few things happened in 1937, and simply pointing to the spending cuts as the only cause of that recession is an attempt to reinforce an argument.  Could it be that taking little snap shots of history and trying to make a 2+2 equation without addressing how things might be different this time around, does not make for a sound policy?  The political ideology, from both side, bleeds through their talking points about the proper economic policy course.  Saying “we’re right, and you’re stupid, just do as we say” so that it becomes improper to question methodology or efficacy smacks of autocratic rule. 
Many will also take this historical telescope to their grander policy objectives, using it to shout down those who disagree.  The favorite is to look at the post-war boom and say “see what we accomplished, the birth of the middle class, the grand infrastructure, the social safety net.  Trust in us and government to deliver it all back to you.”  My first response is always the same when I see these arguments: Isn’t possible those years were the outlier, and you cannot recreate the incredibly unique conditions that allowed all that to happen?  Look at the years 1946 to 1976 and what do you see?  In the most general terms you have 20% of the planet with its combined industry and working age population almost completely destroyed and a serious need to rebuild.  Another 60% of the planet is thrust into a post-colonial world, with little of what they need to pull their population out of what is essentially an early Iron-Age agrarian society.  Who stands alone in this world to provide what everyone needs?  The United States, with a huge idle workforce, a rationing starved populace with a 25% savings rate ready to spend and invest, and a massive natural resource base ready to be turned into the things the world needed.  The U.S. flourished for thirty years under these conditions, but what ended it, what started to change?  In the 1970s you see the wheels come off, the time of stagflation, and the American economy ground to a halt under taxation and regulation, The U.S. was faced with new competition, especially from Japan.  What allowed the U.S. to rebound from that situation?  Deregulation, started under the Carter administration, begins to make America more competitive, and it continues with more deregulation and structural tax changes under Reagan.  For those who would call for a return to the post-war policies I would like to see some explanation of how exactly this country would compete in a global marketplace with 40% unionization and the government constantly spending well over 20% of GDP year after year.  What exactly will we produce?  Is the object of the exercise to have a European model where half the populace works for the government providing services to the other half?  This is not to say that America is over  or that it is hopeless, but it is to say standard policy prescriptions will probably not work, and there needs to be a discussion of a new model.
Now, the Libertarian will be lambasted by Republicans and Democrats, but you can tell that both sides are becoming more and more leery of losing some of their market share of the electorate.  When it comes to wanting to limit the power and scope of government, the name calling can get pretty nasty.  The Progressives will pull out all the stops, reinforcing the idea of the ignorant or the heartless; leaving Grandma on the corner to starve or turning us all over to the corporations, the little 8 year old lads working 23 hours a day in the salt mines.  These are all relatively dishonest attempts to short-circuit debate about real problems.  There are anarchists out there who wish to do away with the local fire department, some of them call themselves Libertarians, so all Libertarians are crazy lunatics, and should not be allowed to discuss important grown up things like Social Security.  The object of the exercise, for most, is not to eliminate a government program or service just because it is provided by government.  It is seeing waste, inefficiency or lack of efficacy for a given thing, and questioning the way it is delivered or its general utility.  Be it local trash collection, public school, Medicare or Social Security, there are legitimate questions about how well these services are delivered by government, and if it is found that resources are being wasted, why not question the delivery method?  To keep things perpetually locked in their traditional form, even if a different and more efficient method has been developed, simply because that is the way it has always been done, seems pretty crazy.  We are told this is what we do, it’s the way it has always been done, and you are just ignorant for not excepting it.  This is intellectually insulting.  Social Security is a promise that was made, we keep hearing that one.  The promise was made by people who died before my parents were born, but I am expected to march along, accepting it as the only possible policy, and not allowed to opt out of it (unless, of course I work for the government).  I am then expected to tell my children that this is the only “right” way to think and not to question the orthodoxy.  There are always calls for greater democracy in our system, yet when segments of the population try to make their voices heard, it is somehow the wrong choice, and they need to be “properly” educated so as not to question the status quo. 
While the case is continually made that all of this “small-government” stuff is the result of “astro-turfing” by evil and nefarious mustache twirling corporate super-villains, there are actual people out there who believe this on their own.  They are not all ignorant neophytes upset that they are not the cool popular kid on campus anymore.  Many are people who have had to try to run businesses under at least three levels of government regulation.  Many are people who see the stories about waste and inefficiency on the part of the Federal Government and wonder why it perpetuates.  When you tell people that Medicare needs to be fixed because we have no idea how much is flushed away in “fraud, waste and abuse”, it does not inspire a great deal of confidence that government will then be able to solve the problem.  If you tell people they must buy health insurance even if they do not want to, for the good of the whole, you are going to get some push back, and it is not because they are silly little people who don’t get the big picture.  They get the picture just fine.  Many people simply believe that things have gone too far, newer generations find real wisdom in the idea of limiting government power and standing up to say they exist independently of the state, not simply for it's benefit.  Just because older generations were willing to cede some things in this regard does not mean that the latter ones are never allowed to revisit the issue.  That is the wonderful thing about our system, it can grow and adopt to ever changing circumstances, roll with the flow as it were.  Intransigence and near religious devotion to orthodox thinking, even in the face of unique circumstances and a changing world verges on ignorance, which should bring us back full circle to ask: Who is the stupid one here?

Friday, August 12, 2011

Jobs, Jobs and More Jobs: The Government to the Rescue

Now that the debt crisis is behind us everyone is going to concentrate on creating jobs and jump starting the economy, after a short little five week break. The refrain is going to be the same: one side will say we need to “invest” in infrastructure to get the economy moving, the other will say we need to cut taxes to spur businesses to hire. Neither will get all that they want, it will be the other sides fault nothing is happening fast enough, and nothing much will change.
It is estimated that this country needs a Trillion dollars in infrastructure “investment” which of course under the present model would require borrowing or printing more money. Now, roads and airports are great things, and we should not have to worry about bridges collapsing under us, but there probably won’t be a big payout to this investment in terms of the overall economy. We hear how we need a jobs program like the Depression era WPA to get people back to work and kick the economy into gear by spurring demand. While the debate will rage whether those programs did anything to help the economy, what we have to realize is that it is not 1934 anymore. The problems arise in how the government spends on and manages projects today. Right off the bat, if the estimate is for a Trillion dollars, then you can be sure that the final tab will be $1.25 to $1.5 Trillion. Top down administration and giveaways to the home town crowd will always bring about serious cost overruns. If you take the Trillion dollar figure as set in stone, you would still have to realize how much would be overspent on these projects, blunting any real economic impact. Davis-Bacon prevailing union wage rules, “buy American” provisions and compliance with a myriad of Federal regulations overseen by dozens of overlapping agencies will ensure that the taxpayer pays the absolute most they possibly could for any given project. Which is the better investment: spend $100 million to build one bridge under Federal guidelines or build two bridges for the same amount without them? Are we of the opinion that the states are so hopelessly incompetent that they can not build a bridge or a road that properly serves their economy and communities without total Federal control and oversight? You saw the relative incompetence of Federal thinking in the Stimulus Bill that was initially supposed to get us working again. The President thinks it is a big laugh now, the notion of “shovel ready projects” but it shows the problem of Federal policy and planning in this regard. A “shovel ready project” in their little universe would presuppose that states and municipalities all over the country have a notion to say build a bridge, yet no money to actually build it. In the hope that Big Momma Government might someday show up and pay for this project they went ahead and: commissioned a feasibility study, an economic impact survey, an environmental impact survey, a soil survey, a general engineering survey, a right-of-way study, proceeded with public comment and taking of lands, hired engineers and architects to design said bridge, all at a cost of tens if not hundreds of thousands of dollars, and then shelved it for the day the check showed up. All of these things take months to complete, and all of the hoops must be cleared in the right order. Compliance with regulation is incredibly costly, with most large firms holding a full time staff to simply ensure that all the paperwork is in order. While this is a job, it is a job that adds nothing to the value of the work for the man-hours expended. The other difference between then and now is the mobility of people. The old projects brought people to where the work was needed. Today there will be attempts to target projects to revitalize dying communities. There will be competition to get project X or Y into one area or the other in the hopes that a factory town that has lost 50% of its population will be reborn. The project will go to the most powerful and influential Representative’s district, with no real guarantee that it is the best project for the best area. This is essentially attempting to hold back the tide with a teaspoon. There are economic realities that caused factories to shutter in these communities that won’t be changed by a road, a railhead or broadband internet. Many people have a deep seated attachment to their communities and want to stay, but we need to ask if this is a proper “investment” of the tax payers money. If the object is to get the economy rolling again, and invest in the country’s future you can not just throw money about with the Federal Government usual favor based abandon and rigid top down controls.
For the Republicans the refrain is also the same - tax cuts. Taxes are a problem, but they will as usual focus on the wrong aspect. Passing out tax breaks and subsidies to the usual rent-seekers will not get the economy rolling. This country faces a competition problem, externally and internally. Capital is incredibly fluid now, and it is going to move towards the best investment. Companies are sitting on Trillions of dollars, not hiring people, because they have stripped themselves down to the bare bones and are competing. They are not going to hire anyone in the present environment because they are unsure about the future. And why would you hire in this environment? Why would banks make loans for expansion so long as they can borrow money for free from the Fed and turn around and buy interest bearing government debt with that money? The tax breaks and loopholes that many corporations use to their advantage should be closed, but not until the tax rate structure has changed. Everyone is aware we can not compete with a top rate of 35%, hence the tax breaks and subsidies government has passed out. Simply ending the breaks and saying now pay 35% will cause the complete collapse of the system. Providing further tax cuts to companies with low tax liability will also not get anything moving. There needs to be a structural change to the system that allows entrepreneurs to flourish with less competition stifling regulation and an end to targeted subsidies that benefit the well connected, even if it is at the expense of the old firms that are sitting on the sidelines. If the object of the exercise is to get people working again, then we should be concentrating on what will get companies hiring and individuals to take the risk of starting a new business, not just a rehash of the same old playbook.
The government throwing money around for short term construction projects or passing out a tax break to the usual suspect multi-nationals isn’t the answer for this problem. If we hope to extricate ourselves from our present dilemmas we need to revamp the system. Spending, taxes and regulations need to be thoroughly examined to find what is the best combination for creating actual growth. Being fluid and open to other solutions should be the order of the day. Religious, unequivocal devotion to “your” sides orthodox thinking about how to solve what everyone admits is a unique problem would seem to be the crazy proposition.

Friday, August 5, 2011

John Kerry: You So Crazy!

Today John Kerry, the esteemed Senator from Massachusetts, said that the media needs to exercise a little responsibility and not give equal time to the Tea Party and their fringe views. My favorite quote is “"It doesn't deserve the same credit as a legitimate idea about what you do”. You know what, I love it. Given that the latest Gallup Poll has only 21% of the electorate self-identifying themselves a Liberal we could really clear up the airwaves if the media was going to act as a proper clearing house for who gets equal time on the airwaves. Imagine if every time Nancy Pelosi walked up to the podium the media just got up, turned off the cameras and said “nah, she doesn’t have any legitimate idea about what to do”. Would Guy Smiley be all for that? Saying that we are never, ever going to allow entitlement spending to be touched is just as insane as anything that has come out of the Tea Party. 46% of survey respondents claimed they did not support the recent debt deal as opposed to the 39% that supported it, and 50% of self-identified independents didn’t like it as compared to 33% for it. What is the fringe notion here? What Americans, and the world at this point, want to see is Federal Spending and debt brought under control, and they almost universally understand that it is going to entail reducing spending in the long term, which this debt deal does not address.
The problem of course lies in what it means to cut government spending. People, when asked, will say things like “cut foreign aid” or “end tax breaks to oil companies”, well they might as well advocate the government stop buying toilet paper and pencils as a cost saving measure. People have to realize that reform is going to involve changing what they expect from our government. It is going to mean at some point affecting the monthly checks people are planning on in the future. It means your company’s juicy defense contract for that airplane the DOD does not want is going to have to go away. If we can ever get out of Iraq and Afghanistan, without starting a new war (or invading Libya on the way home from Iraq) we might be able to get some real Defense cuts, though the Legislators and constituencies are already lining up to ensure that does not happen. Entitlement reform and breaking the cost curve of medical spending have to be the next thing. Defiantly standing in front of the cameras saying Social Security, Medicare and Medicaid will never be touched and allowed to grow till they absorb the entire budget at the expense of all other things is crazy, and if the media doesn’t portray it as such, then hopefully the American electorate will at the polls.

Tuesday, August 2, 2011

Debt Ceiling Compromise: The End of the World as We Know It?

The comments coming in the wake of the debt ceiling bill are starting to verge on ridiculous. For the Left it seems that “cutting” government spending will cause a depression, spike unemployment, send the elderly and the poor to an early grave by way of starvation, destroy the middle class, end the welfare state and social safety net and on and on and on. For the Right it seems even the notion of not spending as much as possible on a huge military spread across the world at a cost of 5% or more of GDP will lead to the immediate downfall of America, we will no longer be “secure” don’t you know. At the same time there are those who are bending over backwards to pat themselves on the back for the grand compromise of “slashing” the deficit while saving Social Security and Medicaid. All of this hyperbole, leading to dozens of different conclusions about the outcome, and what is it all about? $22 Billion next year. And this is not a cut, the government is going to spend $22 Billion less next year than it planned to do, and that is a deficit reduction that will either destroy or save the Republic, depending on who is doing the talking. The Federal government spends $400 Million an hour. $22 Billion is less than three days worth of spending. How exactly does this do anything to anybody? We will also have a special blue ribbon super-committee that will try and find another Trillion or so over the next 10 years to cut, while we rack up another 5 to 7 Trillion dollars in debt over and above the $14 Trillion we already have. What in the world will our fearless leaders cut?
If you examine the laughable $22 Billion in “cuts” we will have next year you see that the automatic increases in some areas will just be smaller than what they would have been. No structural changes to what government does or how it does it. Everything will be exactly the same, just spending, in total, less than 1% then they would have. Every year the Government Accountability Office publishes reports on the waste, mismanagement and duplication of government programs. Last year (
here) the GAO found that the Federal government made $125 Billion in improper payments, and that $48 Billion of that was in Medicare. These numbers for the most part exclude the Department of Defense which does not track the possibility of improper payments in over half of everything it does, because they are just so darn good at accounting. So mull on that little nugget for a moment. The government is aware of the fact that they made $124 Billion in improper payments, and this number does not really take into account fraudulent payments for Medicare, just improper ones. $48 Billion in Medicare improper payments is twice as much as they are planning on saving next year. In their ridiculous 10 year window that is over $500 Billion (taking into account an incremental increase if nothing is done) and looking at the year to year increases in “improper” payments across the entire government that seem to continue unabated you are talking about the government flushing away well north of a Trillion dollars over the next decade. No one in this debate ever stood up and said “hey lets end this right now, today”. Billions and billions will continue to be flushed away in this manner. The government will also waste time and effort with duplicated efforts by various government agencies (here), and we aren’t planning on addressing this either. Somehow Libertarians are out of their tree for questioning the scope or the need of many government programs, yet this is what our government administration looks like right now. And even if you were to take efforts to end all these improper payment and duplicated efforts we would still be over budget. Defense, Social Security, Medicare and Medicaid, these are the things that are running us to ruin. If we can’t seriously address these things, the size, scope, management and utility of these programs and spending by the government, then there is no hope of surviving the problem