Archives: 05/2012

Why the Worst Get on Top

Susan Stamberg reports on Martha Gellhorn, “one of the first great female war correspondents,” whose marriage to Ernest Hemingway is being dramatized by HBO next week. Gellhorn had a healthy skepticism toward power:

In 1983, a British TV interviewer posed this loaded question to Gellhorn, then 75 and still gorgeous: “I.F. Stone once described governments as comprised entirely of liars and nothing they say should ever be believed.”

The response was a typical no-holds-barred Gellhorn opinion: “Quite right. And Tolstoy once said governments are a collection of men who do violence to the rest of us. Between Izzy Stone and Tolstoy, you’ve got it about right.”

The title of this post is of course a chapter title from Hayek’s The Road to Serfdom.

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Flimflammery at the Top

Today POLITICO Arena asks:

Should Dems stop Bain Capital attacks?

My response:

Should Dems stop Bain Capital attacks? Absolutely not, not when they illustrate the utter ignorance of those who make them about how markets work; or worse, the administration’s true underlying agenda – more centralized management of the economy, as with ObamaCare and so much else this administration has foist upon us in just three and a half years.

Politically, of course, the attacks are designed to distract attention from Obama’s dismal economic record. But that won’t last forever, especially if the Romney campaign seizes the opportunity afforded by the attacks as a teaching opportunity. Flimflammery, Obama’s stock in trade, can last only so long. The defenses of Bain Capital that have come from Cory Booker and others are a sign that its end is near as the spotlight shifts to Obama.

PPI Considers Ex-Im Debate ‘Senseless’

What is the proper role of government in a free society? That is not an unreasonable question to debate in the public square – and to revisit with great frequency. Our era of $4 trillion federal budgets, debt-to-GDP ratios above 100 percent, and policymakers betting big on particular industries – even particular firms (check the WH visitor’s log) – renders that question all the more urgent.

Apparently, the Progressive Policy Institute disagrees. Last week, PPI’s managing director for policy and strategy condescendingly characterized the “protracted battle over the reauthorization of the Export-Import Bank” as “senseless,” as though the serious questions raised about Ex-Im’s operations, raison d’etre, costs, and externalities were simply unworthy.  

But on what grounds is it senseless to ask Ex-Im apologists to explain why that boondoggle is not corporate welfare that puts taxpayers and “unchosen” businesses at risk? Why is it senseless to force a debate on the merits of earmarking $140 billion for the benefit of a select few companies, when in the “mother of all budget battles” that transpired last year, only $38 billion was cut? Why is it not appropriate to raise questions about the sustainability of a subsidy race that effectively outsources U.S. policy to Beijing or Brussels?

Debate is illuminating.  It can be reinforcing and it can raise fresh doubts.  And it is essential to the eternal vigilance we must exercise to protect our liberties.  Unfortunately, at least one scholar at PPI is so convinced that the questions raised in the debate over Ex-Im are so irrelevant that she recommends a much longer reauthorization period (5, 10, or 15 years) to avoid debate in the future.  

Progressives tend to have an abiding faith in the goodness of government, but this proposal would make a dictator blush. 

Obamacare’s Constitutional Defects, First Amendment Division

On May 11, the Department of Health & Human Services finalized rules requiring insurers to tell any of their customers who get premium rebates this summer that the windfall comes courtesy of Obamacare.  Here’s the official required language:  “This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act-the health reform law.”

Given that Obamacare is already increasing costs for most patients – insured or otherwise – I wonder who the lucky few will be who get a chance to read the government’s prose.  Moreover, it’s a bit rich to create this “language mandate” when HHS Secretary Kathleen Sebelius had earlier advised insurance companies not to speak against Obamacare’s cost-increasing features.  As the Competitive Enterprise Institute’s Hans Bader put it:

Obama’s HHS secretary sought to gag insurers that disclosed how Obamacare’s mandates are increasing the cost of health insurance, even though such speech is clearly protected by the First Amendment, telling them if they did so, they could be excluded from health insurance exchanges. Prior to that, the Obama administration attempted to gag insurers from disclosing how Obamacare harms Medicare Advantage participants, drawing criticism from First Amendment experts like UCLA law professor Eugene Volokh, the author of two First Amendment textbooks.

Beyond the unseemliness of it all, however, there’s also a constitutional problem:  The government can’t require people to make politicized statements, whether that’s “Live Free or Die” on license plate or the labeling of consumer products where the labels aren’t justified on fraud-prevention or public health grounds.  See some other examples and legal analysis in Bader’s post at CEI’s blog.

The bottom line is that just like the First Amendment stops the government from censoring speech, it stops it from forcing speech.  And just like there’s no “health care is unique” exception to the Commerce Clause, there isn’t one to the First Amendment.

Is Congress Doomed?

Maybe not. I have just published an essay at the Liberty Fund’s Liberty Forum on the fall and rise of Congress since 1960.

The essay takes off from James Burnham’s book of that year, Congress and the American Tradition. Burnham was what today would be called a paleo-conservative (despite having been a Trotskyite in the 1940s). He distrusted the executive branch and foresaw an imperial presidency more than a decade before that term became au courant. Burnham saw Congress as the center of the American way of governing and lamented its decline since 1932.

My essay drew responses from Herman Belz and John Marini.

How to Recognize a Government Contractor, or a Federal Takeover

Here’s a poor, unsuccessful letter I sent to the editor of the Washington Post:

GOP stalls on insurance marketplaces” [May 12] reports that “the conservative firm Leavitt Partners…is working with a number of states on their plans” to create the government bureaucracies that the new health care law calls insurance “exchanges.”

The article should have informed readers that this “conservative firm” (whatever that means) is a for-profit government contractor that makes money by helping states create those exchanges, and is acting against the advice of the nation’s leading conservative think tank. The Heritage Foundation counsels states not to create exchanges, and to send all related funds back to Washington.

Finally, the article claims states can avoid a “federal takeover” by creating an exchange. On the contrary, the law requires state-run exchanges to obey all federal edicts, just as a federal exchange would. The federal takeover has already happened. States that create their own exchanges merely pay for the privilege of losing their sovereignty.

The Making and Breaking of Education Policy

Matt Ladner does a good job of explaining how his beliefs shape his education policy recommendations. It’s a quality that he shares with Horace Mann, who persuaded the people of Massachusetts to adopt a fully tax-funded state school system based on his own beliefs about how a just society should educate its children.

More than a century and a half later, we are still struggling to replace Mann’s unresponsive, divisive, ineffective, wasteful, and often cruel system with one that actually works. So, as we reflect on exactly what to replace Mann’s system with, we have to ask: how did he get it so very, very wrong, and how can we avoid the same fate?

I suggest that Mann’s great mistake was to base his policy recommendations on his belief system. To avoid sentencing future generations to a similarly dysfunctional education, we must base our conclusions on a broad and systematic analysis of the evidence. We should study school systems historically and internationally to understand what works, what doesn’t, and why. We should make predictions about how different policies will unfold and then try to test those predictions empirically. We should observe how different policies play out across states rather than rushing to homogenize them before their effects can be compared.

At least that seems to me our greatest hope of avoiding Mann’s tragic mistake. And if the policy conclusions we reach do not happen to be the easiest to implement, we can take comfort in the fact that Mann succeeded in promoting a system that had no basis in reason or evidence despite strong and longstanding opposition. If a radical bad idea could triumph, why not a radical good one?