Topic: General

“Libertarian Democrats”?

Blue-Team Blogfather Daily Kos has posted an ode to the “Libertarian Democrat,” a creature he sees as the possible salvation of the party:

A Libertarian Dem rejects government efforts to intrude in our bedrooms and churches. A Libertarian Dem rejects government “Big Brother” efforts, such as the NSA spying of tens of millions of Americans. A Libertarian Dem rejects efforts to strip away rights enumerated in the Bill of Rights – from the First Amendment to the 10th. And yes, that includes the 2nd Amendment and the right to bear arms.

That’s the part traditional libertarians will like best. The rest, not so much. The “libertarianism” Kos describes checks its antistatism at the door, emphasizes economic security and fears corporate power as much as state power. Though judging by Kos’s legal blogger “Pericles,” who I should thank for his or her very kind write-up of “Power Surge,” libertarians and Libertarian Democrats have some common ground on constitutional issues. See “Cato vs. Caesar.”

Does the Libertarian Democrat exist? It’s doubtful, though Kos has a few examples, including the impressive James Webb, Vietnam war hero, former Secretary of the Navy, and current Democratic challenger to Virginia Senator George Allen. But then the Libertarian Republican has been an elusive creature of late as well, judging by the GOP’s constitutional amendment fetish. The last time the flag-burning amendment came up for a vote in the House, only an even dozen Republicans voted against it, and only a couple of those could reasonably be described as “libertarian.” Neither party is a reliable friend of liberty, but any effort to move either party in the right direction ought to be applauded.

The Democratic party is quite unlikely to evolve in the direction Kos’s post suggests. But if it did, for all its flaws, it would still beat “Big Government Conservatism” any day of the week.

Death and Taxes: The Revenue Is Uncertain

The Senate votes on estate tax repeal tomorrow. Nothing gets the political emotions flowing more than “tax cuts for the rich.” The Washington Post’s Harold Meyerson recently called repeal “estate tax lunacy,” for example. But let’s look at a few points made by the Washington Post in an editorial yesterday, which opposed repeal.

1) The Post says that the revenue loss from repeal would be too large—$776 billion over 10 years starting in 2012. But that’s less than two percent of expected revenues during those years. Besides the Congressional Budget Office says that under current law the estate tax will raise $45 billion in 2012 rising to $67 billion in 2016. Thus, the Post’s figure looks exaggerated. The source appears to be the left-wing Center on Budget and Policy Priorities. Harvard’s Greg Mankiw looks at the revenue impact of estate tax repeal in his blog.

2) Under estate tax repeal, the current tax exclusion of unrealized capital gains at death would be partly ended. Thus, the government’s revenue loss under repeal would be partly offset by rising capital gains tax revenue, as I discuss in my new bulletin.

The Post says that “Congress’s Joint Committee on Taxation has analyzed this claim [about the capital gains offset] and found it empty.” Actually, it’s a huge mystery what the JCT includes in its estate tax estimates, or any of its estimates. JCT’s official estimates have a huge impact on the debate over tax policy, yet its methods and assumptions are highly secret. The public cannot find out how the JCT is dealing with capital gains in its estimates. Even members of Congress usually can’t find out how the JCT comes to its sometimes suspicious-looking numbers.

As Mankiw and other experts have noted, estate tax repeal might not lose the government any money at all, but the JCT says repeal would lose the government $290 billion over 10 years (2006-2015). It’s absurd that Congress is making a crucial decision on tax policy tomorrow, yet we cannot have an open discussion regarding the budget impact with the taxpayer-funded experts employed by Congress.

Note that the Heritage Foundation recently published an excellent book on the issue of JCT secrecy

Bloviating about “Boutique” Fuels

The House Energy & Commerce Committee held a hearing today on the subject of “boutique” fuels. Republicans are positively obsessed with this matter, convinced beyond sanity or reason that gasoline prices are high in large part because EPA is tolerating a large number of different gasoline blends around the country.

Ed Murphy, group director for downstream and industry operations at the American Petroleum Institute, gamely tried to introduce a bit of economic rationality into this debate. While there are certainly reasons to decry the proliferation of gasoline blends around the country, the recent run-up of gasoline prices has nothing to do with them. His testimony, however, apparently failed to impress Republicans according to the trade pub Greenwire.

Now, if EPA were making gasoline more expensive, I’m sure API would be the first bunch to say so. The fact that they are not speaks volumes. That is, it speaks volumes only to those interested in listening. Beating up on Greens is more important to the GOP than beating up on high prices. Having even a scintilla of evidence to back up their charges is apparently irrelevent.

Hey Baby

Did you know that last year, Paris was a much more popular girls’ name than Britney? Or that Madison was the 3rd most popular girls’ name, while Jefferson was only ranked 628th among boys’ names? Or that 179 baby boys were actually named Baby?

More importantly, do you care about any of this? I sure don’t, but the government does.

As Senator Tom Coburn points out, the Social Security Administration, wastes significant time and money compiling this report on popular baby names.

Senator Coburn astutely jests, “Increasing one’s web traffic doesn’t seem to be in the Constitutional charter of the Social Security program. Your tax dollars hard at work, indeed.”

Should We Criminalize OPEC?

Well, should we? An increasing number of Congressmen seem to think so. Last year, Sen. Mike DeWine (R-OH) introduced the “No Oil Producing and Exporting Cartels Act” (S. 555), aka “NOPEC,” which would make oil-producing and exporting cartels abroad illegal. Although the bill went nowhere, supporters have tried repeatedly to attach it to energy legislation moving through the House and Senate. The idea was last spotted when Sen. Arlen Specter (R-PA) embraced elements of the bill in his relatively unhinged “Oil and Gas Antitrust Act of 2006” (S. 2557), and the trade press is full of reports that the next GOP energy bill might well include NOPEC in its legislative basket of economic buffoonery.

You might think that imposing U.S. antitrust law on foreign, state-owned companies that (with the exception of CITGO) operate nowhere near U.S. borders is such a crackpot idea that only an American politician could entertain such a thing with a straight face. You would be wrong. The other day, Ariel Cohen and William Schirano at the Heritage Foundation gave NOPEC an enthusiastic thumbs-up. “If Congress is serious about alleviating the price-gouging that contributes to high gas prices,” they wrote, “it ought to begin by allowing the federal government to sue OPEC.”

The temptation is to simply ignore nonsense like this. But nonsense like this (particularly on the energy front) is increasingly the coin of the legislative realm. So let’s do what its proponents have obviously not done and give the idea a few moments of thought.

First, the obvious question arises—exactly how would the U.S. government enforce such a law? After all, I rather doubt that Saudi Arabia, Kuwait, Iran, Venezuela, et al will quickly disband the cartel in a panic once Uncle Sam deems their club illegal under U.S. law. “You and who’s army?!” is the natural response we might expect. Given that no army would be on the way to stamp out such illegal activity, which leaves trade sanctions or nothing. The former would be counterproductive while the latter would be embarrassing.

Next, exactly what gives the Congress the right to impose U.S. economic regulations on companies that aren’t doing business in the United States? Do all national governments have this right, or only the United States? If the former, what’s to prevent Saudi Arabia from declaring it illegal for U.S. banks to charge interest on loans (an activity ostensibly banned in many Islamic countries)? If the latter, then it’s a naked statement that U.S. policy is premised upon the idea that the biggest guy on the playground makes the rules for everyone else whether they like it or not—might makes right. And if so, then wouldn’t those forced against their will to live under U.S. law rightly argue that subjects of governmental power ought to have a right to vote about the laws they are compelled to live under? Or is that a right that only applies for some and not others?

Finally, there’s an economic principle of real importance at stake. To wit, who should have the final say over how much of a product or service is delivered by a commercial enterprise; the owners or the customers? If the latter, then companies are merely slaves of the state, dictated to produce as much as the public wants regardless of business considerations. Does the Heritage Foundation really want to plant their flag on that proposition?

One might argue that the state can prohibit price fixing and collusion without prohibiting companies from having the final say over their own production schedules absent coordination between firms. But there are a large number of oil economists who maintain that OPEC is not really a cartel at all—it’s simply a vehicle through which Saudi Arabia unilaterally exercises power over the market—and that collusion within OPEC is not particularly meaningful. If so, then NOPEC would have little effect even if by some miracle it could be enforced.

Even so, what if OPEC countries preferred to constrain production so that sufficient reserves would be available down the road when they would presumably be more valuable? In that case, production restraint might simply be another form of national savings. Should the U.S. Congress be in the business of declaring such trade-offs between present and future revenues “illegal”?

Sure, it would be wonderful if private companies owned oil reserves, not national governments. And it would be nice from the consumers’ point of view if those companies produced as many barrels of crude as a normal profit would allow. And it would be wonderful if OPEC disappeared tomorrow. But Congress’ ability to translate those wishes into reality as far as foreign petroleum operations are concerned is probably nonexistent.

The best we can do is to refuse to help the Cartel or its members in the course of their enterprise. Sending the Texas Rangers or some such after them would render us an international joke.

Universal Preschool Goes Down in CA

Congratulations to California voters for keeping their preschools from becoming, well, like the rest of their schools.

Despite being the brainchild of famous director Rob Reiner, and having the support of many other Hollywood types, yesterday roughly 60 percent of California voters turned down Proposition 82, which would have provided “universal” (read: “government”) preschool for all state 4-year-olds.

In the past, such a touchy-feely proposal probably would have flown through the polls. But California voters might be wising up to the fact that “warm and fuzzy” doesn’t necessarily mean “good.” From the San Jose Mercury News:

Many San Jose area voters took their skepticism about the measure to the polls.

“Prop. 82 sounded really good, but the more I looked at it, the more I realized it was subject to shenanigans,” said David Yomtov, a San Jose resident who said he voted against it.

To read all about the political shenanigans and wheeling-and-dealing behind Proposition 82, check out the work of Lisa Snell at the Reason Public Policy Institute, who started fighting the good fight against Reiner’s initiative almost the moment it was introduced.

They Don’t Make Trade Associations Like They Used To

For those of us who tire of witnessing British Petroleum apologize for being in the oil business, or roll our eyes over Chevron PR campaigns dedicated to telling us how we can and should buy less of their product, it may seem that it was always thus. But it was not. Check out this 1956 short film produced by the American Petroleum Institute. Now THAT’S what a self-confident, take-no-guff industry looks like. Someone should tell “Big Oil” to take it’s thumb out of it’s mouth and start defending their right to exist.