Archives: 12/2006

Gerson’s “Vision Thing”

How can the G.O.P. get its groove back?  Michael Gerson, former speechwriter and top policy advisor to President Bush, has an idea: purge the small-government conservatives.  As he puts it in the current issue of Newsweek, “any political movement that elevates abstract antigovernment ideology above human needs is hardly conservative, and unlikely to win.” 

As Justin Logan has pointed out in this space before, Gerson finds the “small government” aspect of conservatism “morally empty.”  Gerson expands on that theme here:

As antigovernment conservatives seek to purify the Republican Party, it is reasonable to ask if the purest among them are conservatives at all. The combination of disdain for government, a reflexive preference for markets and an unbalanced emphasis on individual choice is usually called libertarianism. The old conservatives had some concerns about that creed, which Russell Kirk called “an ideology of universal selfishness.” Conservatives have generally taught that the health of society is determined by the health of institutions: families, neighborhoods, schools, congregations. Unfettered individualism can loosen those bonds, while government can act to strengthen them. By this standard, good public policies—from incentives to charitable giving, to imposing minimal standards on inner-city schools—are not apostasy; they are a thoroughly orthodox, conservative commitment to the common good.

Campaigning on the size of government in 2008, while opponents talk about health care, education and poverty, will seem, and be, procedural, small-minded, cold and uninspired. The moral stakes are even higher. What does antigovernment conservatism offer to inner-city neighborhoods where violence is common and families are rare? Nothing. What achievement would it contribute to racial healing and the unity of our country? No achievement at all. Anti-government conservatism turns out to be a strange kind of idealism—an idealism that strangles mercy.

A speechwriter’s job is to make the president talk pretty; it’s generally a bad idea to give him a policymaking role.  Yet Gerson had one in the Bush White House.  “He might have had more influence than any White House staffer who wasn’t chief of staff or national security adviser,” according to Bill Kristol.  As the Washington Post reported upon Gerson’s departure last summer: 

He was a formulator of the Bush doctrine making the spread of democracy the fundamental goal of U.S. foreign policy, a policy hailed as revolutionary by some and criticized as unrealistic by others. He led a personal crusade to make unprecedented multibillion-dollar investments in fighting AIDS, malaria and poverty around the globe. He became one of the few voices pressing for a more aggressive policy to stop genocide in Darfur, even as critics complained of U.S. inaction.

This is the Gerson vision: armed uplift abroad, compassionate statism at home, and boundless generosity with other people’s blood and treasure.  If you think the problem with American foreign policy is that it hasn’t been ambitious enough in the last five years, if you think the problem with the Great Society was that there wasn’t enough hymn-singing, then it may be for you.  But for those of us who favor limited, constitutional government, Gerson’s views are instructive.  That a man with such contempt for small-government conservatives had the ear of the president explains a lot about the wreckage that surrounds us.

Kings, Dukes and Earls

Here’s a gem about officialdom from The Adventures of Huckleberry Finn.

Excerpt:

I read to Jim about kings and dukes and earls, and how they called each other “your majesty” and “your grace” and “your lordship,” instead of mister.  Jim’s eyes bugged out, he was so interested.

“I didn’t know dey was so many of ‘em, he said.  “I ain’t heard about none, but old King Solomon, and dem kings in a pack of cards.  How much pay do a king get?”

“Why they can have just as much as they want.  Everything belongs to them.”

“Ain’t dat gay?  And what have dey got to do, Huck?”

“Why nothing! How you do talk. They just lazy around.”

“Is dat so?”

“Of course it is.  They just lazy around—except maybe when they go to war.”

Topics:

The Pentagon Is Not Reporting the Good News from Iraq

The Pentagon said yesterday that violence in Iraq soared this fall to its highest level on record and acknowledged that anti-U.S. fighters have achieved a “strategic success” by unleashing a spiral of sectarian killings by Sunni and Shiite death squads that threatens Iraq’s political institutions.

In its most pessimistic report yet on progress in Iraq, the Pentagon described a nation listing toward civil war, with violence at record highs of 959 attacks per week, declining public confidence in government and “little progress” toward political reconciliation.

The Washington Post

Milton Friedman Days

The Loudoun County, Virginia Board of Supervisors is meeting today to pass a resolution recognizing Milton Friedman’s contributions to the nation and to the principle of human liberty – and they are naming July 31st, his birthday, Milton Friedman day.  Interestingly, the University of Chicago and others have designated January 29, 2007 as Milton Friedman Day.

As someone who was very fond of Milton, and committed to the same ideals, all I can say is: two down, 363 to go.

Topics:

Republicans and the Libertarian Voters

Writers in both National Review and the New Republic have dismissed David Kirby’s and my warning that Republicans are losing libertarian voters by noting that President Bush’s percentage of the vote went up in 2004 even though he lost libertarian votes. Thus, Ramesh Ponnuru and Jonathan Chait say, losing libertarian votes is no problem for the Republicans.

In National Review, Ponnuru writes:

The electorate as a whole swung toward Bush during those years: He increased his percentage of the overall vote from 48 to 51. Libertarians swung one way; the remaining 85 percent of the electorate swung the other way, and swung far enough to overwhelm the libertarians.

In the New Republic Chait agrees:

Boaz and Kirby …stress that President Bush’s share of the libertarian vote dropped precipitously between 2000 and 2004. But, during that time, Bush’s total share of the vote rose by almost 3 percent.

It’s true enough that Bush increased his percentage of the total vote even as libertarians were swinging away from him. But Chait and Ponnuru would have us believe that Bush succeeded because his policies alienated libertarians and appealed to a larger group of non-libertarian voters. But what policies would those be? Did he achieve re-election on the strength of the war in Iraq? His massive over-spending and prescription drug entitlement? His support for the gay marriage amendment? Not likely. (For a discussion of state marriage amendments and the 2004 vote, see here.)

Indeed, the large question about 2004 is why a president with a strong economy won only 51 percent of the vote, 6 points behind what economic models of presidential elections predicted. The biggest answer is the war in Iraq, which was increasingly unpopular by November 2004 and which likely turned off both libertarians and other independent and centrist voters.

Meanwhile, along with the economy, what accounted for Bush’s gains from 2000 to 2004?

It’s terrorism, stupid. The most important number in the 2004 exit polls was this: 58 percent of respondents said they trusted Bush to handle terrorism, while only 40 percent trusted Kerry. You can’t win a post-9/11 election if only 40 percent of voters trust you to protect them against terrorists; people may not have been happy with the war in Iraq, but many of them thought terrorism was the bigger issue. Indeed, our study found that libertarian-leaning voters who cited “terrorism” as the most important issue in 2004 voted heavily for Bush, while those who cited some other issue gave a majority of their votes to Kerry.

And of course, our post-election 2006 data found that libertarians again gave Democrats a larger share of their votes than they had historically done. And this time it did cost the Republicans. Independents–many of them libertarian-minded–turned sharply away from Republican candidates. Disgruntled libertarians probably cost the Republicans congressional seats in New Hampshire, Montana, Arizona, and Colorado, Nevada, and Iowa, and possibly also in Florida, Ohio, and Pennsylvania.

If Republicans can’t win New Hampshire and the Mountain West, they can’t win a national majority. And they can’t win those states without libertarian votes. This may be good news for Democrat Chait. But Ponnuru should worry about it.

Antidumping Reformers Rejoice

Antidumping policy moves incrementally in the right direction only on rare occasions.  In that regard, last week was nothing short of historic.  In addition to the U.S. International Trade Commission deviating from its conventional script and revoking 15 longstanding antidumping measures on key steel products (described here), the Office of the U.S. Trade Representative announced to Congress the administration’s decision to implement a critical change to the Commerce Department’s antidumping calculation methodology, which, if implemented in good faith, will likely reduce the incidence and disruptive impact of antidumping measures henceforth. 

In response to a series of rulings from the dispute settlement body of the World Trade Organization, which found a U.S. methodological practice known as “zeroing” to violate Article 2.4.2 of the WTO’s Antidumping Agreement, Commerce decided (albeit, grudgingly) to change it’s policy.  I have described zeroing and its impact in a few previous papers and in this blog post, but here’s a brief summary.

In a typical antidumping investigation, the sales and cost data of each foreign company under investigation are subject to a series of calculations before the bottom line “dumping margin” is produced.  Usually, the Commerce Department calculates average net prices for each product (i.e., widget model 1, widget model 2, etc.) sold in the U.S. and home markets.  The average U.S. and average home market prices of widget model 1 are compared, the average prices of widget model 2 are compared, and so on.  In some cases there may be few comparisons, and in others there may be hundred or even thousands of comparisons.  Some of those comparisons may generate positive dumping margins (when average home market price exceeds average U.S. price) and some may generate negative dumping margins (when U.S. price is higher).

Commerce then calculates from all of these model-specific comparisons an overall weighted-average dumping margin.  But before calculating the overall average, Commerce tinkers with the mathematics by zeroing.  Zeroing refers to the practice of assigning a value of zero to all of the comparisons that generate a negative dumping margin.  Only after zeroing does Commerce calculate the average dumping margin.  So, in other words, zeroing precludes the negatively dumped sales from having the proper impact on the “average” dumping margin.  Thus, if 99 of 100 comparisons generate large negative dumping margins and 1 of 100 produces a positive dumping margin, zeroing ensures that the average dumping margin calculated is positive.  Pretty fair, huh?

In research that Brink Lindsey and I conducted a few years ago, we found that zeroing is highly distorting.  In a sample of 18 actual antidumping determinations, we found that calculated dumping margins would have been on average 86% lower had zeroing not been employed.  Five of those 18 cases would have resulted in the cases being dropped, and antidumping measures never having been imposed.  So the change in policy is laudable and potentially very significant. 

I say “potentially” because zeroing reform remains incomplete.  The policy change announced last week pertains to zeroing in what are called average-to-average comparisons.  In some cases, the Commerce Department compares average prices to transaction-specific prices and in others it compares transaction-specific to transaction-specific prices.  It is possible that Commerce will use these methodologies more frequently now and continue to zero (at least until zeroing under these comparison methodologies is found in violation of our WTO commitments as well).

And there is one other possible obstacle on the road to implementing this change: Congress.  Although zeroing is not mandated by law, the practice has been in use for a very long time.  Cases have been heard in the Court of International Trade and the Court of Appeals for the Federal Circuit concerning the question of whether zeroing is even permitted under the statute.  Both courts have ruled that zeroing is a permissible interpretation of the statue, which has been taken by some in Congress to mean, wrongly, that zeroing is a requirement of the statute. 

Congress, which is bipartisan in its broad support of a strong (i.e., menacing and unfair) antidumping law, may seek a fight with the administration over the propriety of changing the zeroing practice without input from the legislative branch.  But, by and large, last week’s zeroing announcement was another rare victory for antidumping reform.