Tag: Washington Post

The King’s Speech

His Royal Highness Prince Charles, who lives, well, like a king, off wealth that his ancestors stole, appears at a Washington Post conference to tell his still-recalcitrant former subjects to change their economic system. As befitting a hereditary aristocrat, coming from a long line of people used to issuing orders, with little interest in spontaneous order or actual economic growth, he finds an

urgent need for … the willingness of all aspects of society — the public, private and NGO [non-governmental organizations] sectors, large corporations and small organizations — to work together to build an economic model built upon resilience and diversity.

Sure thing, guv’nor, we’ll get right on that.

Journalism and Generality

The media makes it hard for ordinary people to be libertarians. In large part, this is because journalism is in the business of selling panic—panic about terrorism, panic about drugs, panic about food, panic about pornography, panic about our health care system. If it’s not an emergency, it’s not news. To the lazy journalist, everything becomes an emergency—and emergencies always—always—demand state action.

The media makes things hard for the would-be libertarian in other ways, too. Consider this story from today’s Washington Post, about… well, it’s hard to say, actually:

Senate Democrats unveiled a plan Tuesday to save $21 billion over the next decade by eliminating tax breaks for the nation’s five biggest oil companies, a move designed to counter Republican demands to control the soaring national debt without new taxes.

With the proposal, Democrats sought to reframe the debate over debt reduction to include fresh revenue as well as sharp cuts in spending. For the first time, Democratic leaders suggested an equal split between spending cuts and new taxes — “50-50,” said Senate Majority Leader Harry M. Reid (Nev.).

That represents a larger share for taxes than has been proposed by either President Obama or the bipartisan commission he appointed to recommend how to cut the national debt.

So far, the Democratic tax agenda is focused on ending subsidies for big oil companies, a hugely popular proposal involving what Democrats see as a prime example of wasteful giveaways in the tax code. By raising the issue, Democrats are trying to force Republicans either to drop their rigid stance against new taxes or to defend taxpayer subsidies for some of the world’s most profitable corporations, including Ex­xon Mobil, Shell, BP, Chevron and ConocoPhillips.

The proposal came in response to remarks Tuesday by House Speaker John A. Boehner (R-Ohio), who said raising taxes is “off the table.” A day earlier, he gave a speech demanding more than $2 trillion in spending cuts in exchange for GOP support for an increase in the legal limit on government borrowing through the end of next year.

Where am I confused, you ask? On almost everything a libertarian ought to care about. I’ll explain.

One of the key aspects of any good law is generality—that is, equality before the law. As F. A. Hayek put it:

[T]hough government has to administer means which have been put at its disposal (including the services of all those whom it has hired to carry out its instructions), this does not mean that it should similarly administer the efforts of private citizens. What distinguishes a free from an unfree society is that in the former each individual has a recognized private sphere clearly distinct from the public sphere, and the private individual cannot be ordered about but is expected to obey only the rules which are equally applicable to all….

The general, abstract rules, which are laws in the substantive sense, are… essentially long-term measures, referring to yet unnkown cases and containing no references to particular persons, places, or objects. Such laws must always be prospective, never retrospective, in their effect (The Constitution of Liberty, chapter 14, section 2).

Now, with every passing day our government stomps all over this generality requirement again and again, chiefly in the economic sphere. But is it doing so on the front page of today’s Washington Post? That’s a good question.

I can think of lots of ways we might deny a tax break to a certain five oil corporations. Some are decidedly better than others in their generality. Consider the following, ranked from least general to most:

  1. “The corporations known as Ex­xon Mobil, Shell, BP, Chevron and ConocoPhillips are hereby denied tax break X. All others still qualify, or not, as they did before.”
  2. “Oil corporations with an annual revenue above $198 billion are denied tax break X.”
  3. “We find that tax break X itself is lacking in generality. It is hereby repealed, and the overall corporate tax rate is increased accordingly.”

Which one are they proposing? From the story’s first paragraph, we could easily conclude that it was (1). Many people on the left would be happy with (1), because big corporations are anathema to them, and everything they do is evil, and punishing them—generality be damned—is just great.

But then, it could also be (2), and this measure is somewhat more general, even if ConocoPhillips—the smallest company on the list—just so happens to have an annual revenue of $198.655 billion. As Hayek noted, “[C]lassification in abstract terms can always be carried to the point at which, in fact, the class singled out consists only of particular known persons or even a single individual” (ibid., section 4). Hypocrisy is the tribute vice pays to virtue.

And finally, there’s (3), clearly the winner in terms of generality. Is that in fact the proposal being discussed by members of Congress? Or is it still more general than that—something perhaps as described by my colleagues Jerry Taylor and Peter Van Doren earlier this month?

Last week President Barack Obama responded to rising public anger over soaring gasoline prices by banging the drums for the elimination of various tax breaks enjoyed by the oil and gas industry…

[L]et the record show that President Obama is right… about these tax breaks. They make the economy less — not more — efficient and do nothing to reduce prices at the pump.

Rigging the tax code to make investments in manufacturing artificially more attractive than investments in something else is an enterprise designed to harm non-manufacturers for the benefit of … manufacturers. Conservatives who want government to leave markets alone have no business throwing their political bodies in front of this tax break. If their political rhetoric means anything, they would see the president’s bid and raise him by calling for total repeal of this tax break for everyone, not just for oil and gas companies.

If only we were so lucky! Getting back to the Post, we learn much later in the story—in the fifteenth paragraph —that the congressional proposal “would close several long-standing tax loopholes, yielding roughly $2 billion a year in savings to be applied to lowering the deficit. It would affect only the five largest oil companies, excluding smaller producers.”

This is confusing to the point of deception. Does it really “close” a loophole to take a few entities and exclude them from the prior exclusion from the tax? By my understanding, it makes the law less general, more convoluted and more arbitrary, than it was before. Close the loophole—or just don’t close it, I think a Hayek might say. Don’t make companies play human Tetris to figure out whether they aren’t not un-disincluded.

One day I think people will look back on our era—from roughly the civil rights movement to the present—and marvel. They will be amazed at how, while the law grew much more general regarding many non-economic matters, it became increasingly partial and favoritist when it came to running a business. At times our journalism and even our language seemed blind to this contradictory development, which only encouraged it. Even thinking about the generality of our laws is made difficult when it’s just not a topic on the national media’s radar.

But equality before the law should apply, well, equally. Shouldn’t it?

Political Trends and Gun Control Politics

From today’s Washington Post:

During his campaign, Obama supported reintroducing the lapsed assault weapon ban, promised to eliminate an amendment requiring the FBI to destroy records of gun buyers’ background checks and advocated closing the gun-show loophole. Since taking office, the president has done none of that, and before the midterm elections, he shelved a proposal requiring gun dealers to report bulk sales of high-powered semiautomatic rifles. In his State of the Union address, just weeks after the Giffords shooting in January, Obama made no mention of guns. … Other leading Democrats, even those traditionally willing to offer full-throated support for gun-control efforts, have grown surprisingly less vocal as they take on more of a national role.

The Dems have lost enthusiasm for gun control.  No question.  But seems to me that media interest is also a big factor here.  When the news media turned from Gabrielle Giffords to Libya, that’s where Obama went next.

For related Cato work, go here and here.

“The Largest Annual Spending Cut in Our History”?

In this week’s Britannica column, I look at the claims being made for the budget cuts in the weekend deal:

“The largest annual spending cut in our history,” President Obama said. Speaker of the House John Boehner called it the “largest real dollar spending cut in American history.” Saturday’s front-page, upper-right headline in the Washington Post proclaimed:

BIGGEST CUTS
IN U.S. HISTORY

The story went on to say that Obama “said the cuts would be painful but necessary.”

NPR’s Andrea Seabrook reported, “The Republicans got big, big cuts.”

And are they?

Please. It’s a cut of $38 billion in a budget of $3,819 billion. That’s 1 percent. That’s a rounding error in federal budgeting….

That same budget table shows that federal spending fell from $92.7 billion in 1945 to $55.2 billion in 1946, to $34.5 billion in 1947, and to $29.8 billion in 1948 (and all without any of the job losses that we’re told would result from modest reductions today). Check out also the drop in spending from 1919 to 1922, even larger in percentage terms….

The fundamental point here is that federal spending rose by more than a trillion dollars during Bush’s first seven years, and then by almost another trillion in barely three fiscal years. And then we had a titanic battle over whether to trim $38 billion.

The idea that the Democrats “have shown that they heard the message that government spends too much” or that the Republicans—the party that increased federal spending by a trillion dollars while nobody was looking during the Bush years—have “imposed a small-government agenda on Washington” is ludicrous.

Read it all here.

One Step Forward, One Step Back

This weekend I opened The Washington Post to find the editors arguing that Congress should cut federal subsidies to the Corporation for Public Broadcasting, the Institute of Peace, and the National Endowment of the Arts, and George F. Will arguing that Congress should preserve federal subsidies to Teach for America.

Weird.

My Favorite Constitutional Right

Both the Washington Post and NPR refer to the Tenth Amendment as a “tea party favorite.” I would have thought that tea partiers – and most of the rest of us – liked all 10 of the Bill of Rights, and indeed the rest of the Constitution as well. Now, sure, I guess if the ACLU could publish (in the 1970s or 1980s) the poster below, an “illustrated guide to the Bill of Rights” featuring only the First, Fourth, Fifth, Sixth, Eighth amendments (and only parts of those), along with the Fourteenth, Fifteenth, and Nineteenth amendments, which are not part of the Bill of Rights – well, then, I guess the Tea Party is entitled to have its own favorite parts of the Bill of Rights. But then, it was NPR and the Washington Post, not tea partiers, who suggested that the Tenth Amendment was perhaps uniquely a “tea party favorite.” I would urge the ACLU, the Tea Party, and all other Americans who care about freedom to consider the entire Constitution a “favorite.” Of course, the Tenth Amendment is pretty crucial, reminding policymakers that the federal government does not have any powers not delegated to it in the Constitution.

The Real Scandal of Farm Subsidies

When the Washington Post published a story in 2007 about how dead farmers had received farm subsidies to the tune of over $1bn, most people were horrified (even “farm subsidy moderate” Rand Paul thought they should go!). Although the article made clear that “most estates are allowed to collect farm payments for up to two years after an owner’s death,” and that the payments weren’t necessarily fraudulent, outrage ensued.

But a follow-up investigation by the USDA has found that all but about $1 million of the payments were completely above board. From the Associated Press:

A 2007 report that the federal government had paid $1.1 billion in subsidies to dead farmers sparked an outcry and has been frequently cited by critics who considered the payments a blatant example of wasteful spending. But a follow-up that found no fraud and determined nearly all the subsidies paid on behalf of dead farmers in recent years were proper has received little attention.

According to the U.S. Department of Agriculture’s Farm Service Agency, just a little over $1 million out of the billions of dollars paid in subsidies in 2009 went to estates or business entities that weren’t entitled to them.

Very little money is going to individuals who have not earned that money. Very little is being paid in error because a farmer has passed away,” FSA Administrator Jonathan Coppess told The Associated Press. [emphasis mine]

Don’t you just love how Mr Coppess uses the word “earned” there?

That’s the real scandal of farm subsidies, readers. Not that they are fraudulent (although that is of course an outrage), but that they are, for the most part, perfectly legal.