Archives: 11/2010

On the Moral Dimension of the Election

Today POLITICO Arena asks:

Would a staff shakeup — and potentially Cabinet — help the White House and congressional Democrats recover ahead of the 2012 elections?

My response:

If the president’s press conference yesterday is any indication, it’s going to take far more than a White House shakeup for Mr. Obama and congressional Democrats to recover ahead of the 2012 elections. In several ways, the president was asked point blank whether he still resisted “the notion that voters rejected the policy choices [he] made.” His answer? Voters “are not satisfied with the outcomes.” And again: “they’re deeply dissatisfied with the pace of our economic recovery.”
 
Time and again, he declined to draw the connection between his policies and those outcomes, a connection that voters saw plainly. Not all did, to be sure. In fact, it’s instructive to look at two states where Obama’s vision still reigns, California and New York — two “failed states,” if I may draw from the nomenclature of foreign affairs. Still in denial, a good part of the electorate in those states continues to vote for the very people and policies that have driven their welfare states into near bankruptcy, with taxpayers fleeing as tax takers flood in.
 
That points to a matter that has been too little noticed after Tuesday’s electoral results. This election was all about the economy we’re told, by the president (“there is no doubt that people’s number-one concern is the economy”), and especially by administration apologists anxious to shift responsibility to the condition Obama inherited. Yes, the economy weighed heavily in the outcome. But underneath that concern, and far more important, is the moral dimension of our economic condition. States, and a nation, that spend more than they have, that promise more than they can deliver, that impose debts on future generations, and that restrain freedom and sap initiative in the collective pursuit of ends that many reject are behaving irresponsibly and immorally. We are suffocating today under massively irresponsible government. It is that message to which this administration is tone deaf.

The Real Job Starts Now

Tea Partiers are celebrating the biggest swing against the incumbent party in the House of Representatives since 1938.

It always feels great to win an election. But the real job for fiscal conservatives and smaller-government advocates starts now.

The usual pattern is that after the election the voters and the activists go back to their normal lives, but the organized interests redouble their efforts to influence policymakers. That’s part of concentrated benefits and diffuse costs, which we talk a lot about here. People who want something from government organize PACs, hire lobbyists, fly to Washington, make phone calls, make political contributions, take senators to dinner, and otherwise “know no rest by day or night” (in the words of economist Vilfredo Pareto) in their effort to get their hands on taxpayers’ money. Meanwhile, it’s not in the interest of any taxpayer to become informed and seek to exert influence on each particular spending bill.

Tea Partiers must change that pattern. They must keep up the pressure on Congress and state legislators. They must demand actual performance, not just promises. And they must also seek to change the attitudes of the American people. It’s not enough to favor small government in principle; more voters have to agree to give up their own subsidies and benefits. There’s some evidence that Tea Partiers know this. As Jonathan Rauch wrote recently in National Journal:

But, tea partiers say, if you think moving votes and passing bills are what they are really all about, you have not taken the full measure of their ambition. No, the real point is to change the country’s political culture, bending it back toward the self-reliant, liberty-guarding instincts of the Founders’ era. Winning key congressional seats won’t do that, nor will endorsing candidates. “If you just tell people to vote but you don’t talk about the underlying principles,” [Tea Party Patriots coordinator Jenny Beth] Martin says, “you just have to do it again and again and again, in every election.”

… One hears again, there, echoes of leftist movements. Raise consciousness. Change hearts, not just votes. Attack corruption in society, not just on Capitol Hill. In America, right-wing movements have tended to focus on taking over politics, left-wing ones on changing the culture. Like its leftist precursors, the Tea Party Patriots thinks of itself as a social movement, not a political one.

As George Washington said in his first inaugural address, “The preservation of the sacred fire of liberty, and the destiny of the Republican model of Government, are justly considered, perhaps, as deeply, as finally, staked on the experiment entrusted to the hands of the American people.” We have a chance in the next two years to demonstrate that republican government can still work rather than spiraling downward into endless debt and depression.

And of course Congress has a big job facing it, too, especially the newly Republican House. To capitalize on their victory, the Republicans must demonstrate to the voters that they’re serious — finally — about more freedom and less government. They destroyed the Reaganite Republican brand during the Bush years. And it’s harder to rebuild a brand than to destroy it. But the backlash against the Obama-Reid-Pelosi big-government agenda has given them another chance.

House Republicans should keep these goals in mind:

Get serious about spending. Annual federal spending rose by a trillion dollars under President Bush — before the gusher of spending when the financial crisis hit. Bush became the biggest spender since LBJ, but he didn’t hold that title long. Spending is now twice as large as when Bush became president, and annual deficits are over a trillion dollars. This is Greek-style fiscal policy. All Republicans have been promising to get spending under control, but they have adamantly avoided specifics. Now the rubber meets the road. The House of Representatives must find real cuts that will reduce overall spending and lead to a balanced budget. The Cato Institute has produced the gold standard for budget cuts in its full-page newspaper ads, in this analysis of the military budget, and at DownsizingGovernment.org. But there are other lists of cuts from the Heritage Foundation and jointly from the National Taxpayers Union and Ralph Nader’s Public Interest Research Group (PIRG). Or they could just start by cutting out the $1.8 trillion in spending this year that exceeds what we spent the year George W. Bush took office.

Start rolling back the health care overhaul. The voters didn’t like Obamacare when it passed. Contrary to lots of predictions, they still don’t like it. Republicans pledged to repeal it. They should keep their promise to the voters. But of course the Senate and the president aren’t likely to go along with a repeal bill. So the House should refuse to appropriate money to implement the provisions of the bill and prohibit the Department of Health and Human Services from spending any money to implement the worst provisions of the bill, especially the individual mandate.

Stop the looming tax increase. Under current law, taxes on capital gains, dividends, and everyone’s income will rise on January 1. Congress needs to block this looming tax increase, preferably in any lame duck session and otherwise in early January. The prospect of higher taxes will discourage spending and especially investment.

Take a hard look at the wars in Iraq and Afghanistan. We’ve been fighting in Afghanistan for nine years and in Iraq for seven. Newspapers in August featured pictures of American soldiers leaving Iraq and officers proclaiming ”A truly historic end to seven years of war.” But as Patrick Henry said, “Gentlemen may cry ‘Peace! Peace!’ — but there is no peace.” Not as long as we have 50,000 troops in a divided and war-torn land. As for Afghanistan, we long ago removed the Taliban government. It’s time to convene hearings and ask what we expect to accomplish in either country for the further expenditure of men and money.

Take a similar hard look at the war on drugs. To drug warriors, nine years is a blink of an eye. They’ve been at it since 1914. And thanks to their efforts, only 119 million Americans have used illegal drugs, and only 22 million Americans use them at least once a month. Meanwhile, the violence generated by prohibition is wracking our closest neighbor and spilling over the border to the American Southwest.  A new Cato study estimates that legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. Of these savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government. The report also estimates that drug legalization would yield tax revenue of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco. If it can’t just end this failed policy, Congress should appoint a blue-ribbon commission to study alternatives to prohibition.

Stand up to the special interests. As noted, the moment the polls close, the organized interest groups descend on the new members of Congress. From PHRMA to farmers, from oil companies to Social Security/Medicare lobbyists, everybody wants to pay off a campaign debt and take a senator to a game at the Verizon Center. Republicans — and Democrats — need to show some republican virtue and resist these organized interest groups. And that includes one of the biggest interest groups: your home district. With trillion-dollar deficits as far as the eye can see, it is a dereliction of duty to say “I’m going to Washington to cut spending and to fund important roads and parks here in my district.” The country’s overriding interest at this point is to reduce spending, the deficit, and the national debt. And that means keeping a comfortable distance between lobbyists and the public trough. One tactic might be for the House to pass a continuing resolution to fund agencies at 90 percent of current spending, thus bypassing the notoriously porcine appropriations subcommittees. Another tactic is to listen to the Tea Partiers: Remember your principles, act like a citizen-legislator, do the right thing and go home.

Avoid social issues. When the Bush Republicans spent too much time on issues like the gay marriage ban and the Terri Schiavo intervention, they alienated suburban and professional women, college graduates, young people, libertarians, and independents (overlapping groups, of course).  And they lost two elections. After 2008 they seem to have learned their lesson. Even in the face of several states instituting marriage equality, Republicans kept their focus squarely on overspending, health care, and big-government overreach — issues that united opponents of the Obama agenda. They shouldn’t blow it now. They should stick to the economic issues that won them the 2010 election and avoid the divisive social issues that cost them the 2006 and 2008 elections.

Respect the Constitution. The Tea Party Patriots, the largest network of the thoroughly decentralized Tea Party movement, says its core principles are “Fiscal Responsibility, Constitutionally Limited Government and Free Markets.” In the last NBC News/Wall Street Journal poll before the election, a plurality (41 percent) of Republicans ranked a “return to the principles of the U.S. Constitution” as the top or No. 2 message they hoped to send. Much of what Congress passes these days, notably including the mandate to require individuals to purchase health insurance, exceeds the powers granted to Congress under the Constitution. As the Cato Handbook for Policymakers recommends, Congress should pass no laws without first consulting the Constitution for proper authority and then debating that question on the floors of the House and Senate.

This is a time of great opportunity for advocates of individual freedom, free markets, and limited government.  To paraphrase Hubert Humphrey’s great speech of 1948, the time has arrived for America to get out of the shadow of overweening government and to walk forthrightly into the bright sunshine of personal and economic freedom. Congress can start that process, but it will need support and pressure from lovers of liberty outside Washington.

Prop 19, Employment at Will, and Social Peace

Writing at CNN, my colleague Jeffrey Miron puts his finger on one reason for the disappointing defeat of California’s Prop 19:

Prop 19 failed also because it overreached. One feature attempted to protect the “rights” of employees who get fired or disciplined for using marijuana, including a provision that employers could only discipline marijuana use that “actually impairs job performance.” That is a much higher bar than required by current policy.

Like so many other developments in employment law in recent years, this would have chipped away at the basic principle of employment at will, which holds that in the absence of a contract specifying otherwise, either party to an employment relation may end that relation at any time for any reason or for no reason at all.

It was no doubt inevitable that the proposition would fare poorly among self-identified conservatives and older voters. But the “users’ rights” provisions were enough to raise doubts even among liberty-minded thinkers like David Henderson, who predicted that by signaling hostility toward freedom of association, such provisions would “make the drug-legalization hill even steeper.”

Marijuana of course remains illegal under federal law, which means that its consumption would at one and the same time have been 1) protected under employment-discrimination rules, and 2) illegal and subject to prison sentences. If this paradox seems vaguely familiar, maybe it’s because not that many years ago – before the Supreme Court’s 2003 decision in Lawrence v. Texas – there were localities where consenting homosexual conduct was simultaneously protected under one set of laws, and unlawful under another. Indeed, there were more than a few advocacy groups that worked to promote the new controls over employer decisionmaking and yet never troubled themselves to work for repeal of the still-on-the-books anti-gay prohibitions. If the goal is to achieve social peace, however, rather than wage constant culture war on each other, you’d think the “leave people alone” message would hold more appeal than the “fall in line or you’ll hear from our lawyers” message.

Jeffrey Miron surmises, no doubt rightly, that the problem of undislodgeable tenured stoners in the workplace would be more the exception than the rule. Yet it’s worth noting that the issue has already arisen in various lawsuits in which workers with a doctor’s note recommending marijuana use have contested firings. Lawyers have also eagerly cobbled together suits over related issues, as with this class action noted less than two years ago at my other website, Overlawyered:

Starbucks’s job application asked prospective baristas if they’d been convicted of a crime in the past seven years and added for “CALIFORNIA APPLICANTS ONLY”, at the end, that minor marijuana possession convictions more than two years old didn’t have to be disclosed, in accord with a state law along those lines. Entrepreneurial lawyers then tried to steam-press $26 million or so out of the coffee chain on the following theory: that the clarification was placed too far down the application after the original question; that Starbucks had therefore violated the California Labor Code; and that each and every Starbucks job applicant in California since June 2004, perhaps 135,000 persons, was owed $200 in statutory damages regardless of whether they had suffered any harm. Per John Sullivan of the Civil Justice Association of California, the lawyers also took the position that “it didn’t matter that two of the three job applicants who signed on as named plaintiffs testified in court that they read the entire application and knew they didn’t have to mention a marijuana conviction (which neither had anyway!)” The court refused to certify the class and made the following observations (courtesy CJAC blog):

* “There are better ways to filter out impermissible questions on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants. Plaintiffs’ strained efforts to use the marijuana reform legislation to recover millions of dollars from Starbucks gives a bizarre new dimension to the every day expressions ‘coffee joint’ and ‘coffee pot.’”… “The civil justice system is not well-served by turning Starbucks into a Daddy Warbucks.”

Ilya Somin at Volokh Conspiracy notes that “the case against the War on Drugs and other ‘morals’ regulations is very similar to the standard conservative critique of economic regulation.” But if a much-needed rollback of morals regulation is made the excuse for an expansion of economic regulation, there may be grounds to wonder whether the goal is truly freedom at all.

ObamaCare Takes a Shellacking

It wasn’t just the party of ObamaCare or its champion that took a “shellacking” at the polls yesterday.  The law took a shellacking as well.  One pollster reports:

This election was a clear signal that voters do not want President Obama’s health care plan.  Nearly half (45%) of voters say their vote was a message to oppose the President’s plan….

Arizona and Oklahoma passed constitutional amendments designed to block ObamaCare’s individual mandate.  Many new governors either plan to join the 22 states already challenging ObamaCare in court, or to block its implementation in other ways.  Congressional Republicans appear determined to use every tool in their arsenal to repeal it.

President Obama is striking a conciliatory note, saying he is open to “tweaks:”

If the Republicans have ideas for how to improve our healthcare system, if they want to suggest modifications that would deliver faster, more effective reform… I am happy to consider some of those ideas.

There is room to doubt his sincerity.  The Washington Post has reported that when President Obama begins a sentence with, Let me be clear, it is “a signal that what follows will be anything but.”  Obama has likewise claimed open-mindedness and flexibility when his behavior exhibited the opposite qualities.  (Remember how last year’s White House summit on health care was all about gathering “the best ideas.”)

Yet with a firm conviction that facts and science and argument still matter, I resubmit to President Obama this Cato Policy Analysis: Yes, Mr. President: A Free Market Can Fix Health Care.  In fact, a free market is the only thing that will.  But a reasonably free market is impossible with ObamaCare still on the books.

I doubt the president will read it.  But Republicans should.  They seem pretty solid on Repeal.  They’re weaker on Replace.

Ballot Initiatives Provide Underappreciated Election-Night Victories

Last week, I highlighted nine ballot initiatives that were worth watching because of their policy implications and/or their role is showing whether voters wanted more or less freedom. The results, by and large, are very encouraging. Let’s take a look at the results of those nine votes, as well as a few additional key initiatives.

1. The big spenders wanted to impose an income tax in the state of Washington, and they even had support from too-rich-to-care Bill Gates. The good news is that this initiative got slaughtered by a nearly two-to-one margin.  I was worried about this initiative since crazy  Oregon voters approved higher tax rates earlier this year. In a further bit of good news, Washington voters also approved a supermajority requirement for tax increases by a similar margin.

2. Nevada voters had a chance to vote on eminent domain abuse. This is an initiative that I mischaracterized in my original post. The language made it sound like it was designed to protect private property, but it actually was proposed by the political elite to weaken a property rights initiative that the voters previously had imposed. Fortunately, Nevada voters did not share my naiveté and the effort to weaken eminent domain protections was decisively rejected.  This is important, of course, because of the Supreme Court’s reprehensible Kelo decision.

3. California voters were predictably disappointing. They rejected the initiative to legalize marijuana, thus missing an opportunity to adopt a more sensible approach to victimless crimes. The crazy voters from the Golden State also kept in place a suicidal global warming scheme that is driving jobs out of the state. The only silver lining in California’s dark cloud is that voters did approve a supermajority requirement for certain revenue increases.

4. Nearly 90 percent of voters in Kansas approved an initiative to remove any ambiguity about whether individuals have the right to keep and bear arms. Let that be a warning to those imperialist Canadians, just in case they’re plotting an invasion.

5. Arizona voters had a chance to give their opinion on Obamacare. Not surprisingly, they were not big fans, with more than 55 percent of them supporting an initiative in favor of individual choice in health care. A similar initiative was approved by an even greater margin in Oklahoma. Shifting back to Arizona, voters also strongly rejected racial and sexual discrimination by government, but they narrowly failed to approve medical marijuana.

6. Shifting to the local level, San Francisco, one of the craziest cities in America rejected a proposal to require bureaucrats to make meaningful contributions to support their bloated pension and health benefits. On the other hand, voters did approve a proposal to ban people from sleeping on sidewalks. Who knew that was a big issue?

7. Sticking with the ever-amusing Golden State, voters unfortunately eliminated the requirement for a two-thirds vote in the legislature to approve a budget, thus making it even easier for politicians to increase the burden of government spending. The state almost certainly is already on a path to bankruptcy, and this result will probably hasten its fiscal demise. Hopefully, the new GOP majority in the House of Representatives will say no when soon-to-be Governor Brown comes asking for a bailout.

8. The entire political establishment in Massachusetts was united in its opposition to an initiative to to roll back the sales tax from 6.25 percent to 3 percent, and they were sucessful. But 43 percent of voters approved, so maybe there’s some tiny sliver of hope for the Bay State.

9. Louisiana voters approved an initiative to require a two-thirds vote to approve any expansion of taxpayer-financed benefits for government employees. With 65 percent of voters saying yes to this proposal, this is a good sign that the bureaucrat gravy train may finally be slowing down.

At the risk of giving a grade, I think voters generally did a good job when asked to directly make decisions. I give them a solid B.

Election Results in School Choice States

While most of the election punditry to date has been focused at the national level, major gains by Republicans in states that already have k-12 education tax credits or school vouchers could lead to the expansion of such programs or the passage of new ones. To see where the action might lie, I offer the chart below, showing post-election party control of the legislative and executive branches of government in school choice states (the height of each bar represents degree of control, with the height of the executive branch = 100%). The states are sorted by the number of branches of government that changed hands (represented on the chart by the yellow circles, which correspond to the axis on the right).

There might be gridlock at the national level, but at the state level we may see some interesting school choice developments over the next 2+ years.

What the 2010 Election Will Mean for Trade

One of the many implications of yesterday’s election is that the new Congress will likely be more friendly toward trade-expanding agreements and less inclined to raise trade barriers.

Trade was not a deciding factor in the election, despite efforts by a number of incumbent Democrats to make it so. Many House and Senate contests were peppered with ads accusing an opponent of favoring trade agreements that gave away U.S. jobs to China. It was a stock line in President Obama’s stump speeches that Republicans favored tax breaks for U.S. companies that ship jobs overseas (a charge I dismantled in an op-ed last week). Yet on Election Day the trade-skeptical rhetoric and ads did not save Democratic seats.

Republicans Pat Toomey, Rob Portman, and Mark Kirk all won Senate seats in the industrial heartland yesterday (Pennsylvania, Ohio, and Illinois, respectively) and all three voted in favor of major trade agreements during their time in the U.S. House. None of them ran away from their records on trade.

The key change for trade policy will be the switch of the House to Republican control in January. Democratic House leaders were generally hostile to trade agreements during their four-year tenure, refusing to allow a vote on the Colombia trade agreement in 2008 even after President Bush submitted it to Congress while allowing a vote this fall on a bill to raise tariffs against imports from China.

In contrast, the incoming GOP House leaders, presumptive Speaker John Boehner of Ohio, Majority Leader Eric Cantor of Virginia, and Ways and Means Committee Chair David Camp of Michigan, have all voted more than two-thirds of the time for lower trade barriers, according to Cato’s trade vote data base. The trade-hostile influence of organized labor, so prominent the past four years, will be greatly diminished.

The new Congress will be more likely to consider and pass pending trade agreements with South Korea, Colombia, and Panama. The Obama administration has endorsed all three in the abstract, but has done little to actually push Congress to approve them. These three agreements offer an opportunity for the White House to work with the new Congress in a bipartisan way to promote exports and deepen ties with friendly nations.

The news is not all positive on the trade front. A more Republican-weighted Congress will probably not be much different when it comes to rewriting the farm bill in 2012. Republicans have shown themselves to be similar to Democrats in supporting subsidies and trade barriers to benefit certain farm sectors such as sugar, rice, cotton, and corn. And Republicans are far more inclined that Democrats to support the failed, 50-year-old trade and travel embargo against Cuba.