Topic: Government and Politics

Will Specter Turn Left?

I offer some evidence in today’s Chicago Tribune:

Last week, Pennsylvania Sen. Arlen Specter was one of the most liberal Republicans in the Senate. Today, he’s the most conservative Democrat….

But party-switchers often change their votes as well as their labels.

The day after Republicans won control of the Senate in 1994, Sen. Richard Shelby of Alabama switched to the Republican Party. He had been a relatively conservative Democrat and had high-profile conflicts with President Bill Clinton, so the switch wasn’t a great surprise. But observers might be surprised to look back at what happened to Shelby’s voting record. According to the American Conservative Union, for eight years Shelby’s conservative voting percentage had ranged between 43 and 76. Even in 1994, as Shelby often found himself opposing the Clinton administration, the ACU gave him only a 55. But from 1995 to 2000, his ACU rating only once dipped below 90, and he scored a perfectly conservative 100 in 2000 and 2001….

In 2001, Sen. Jim Jeffords of Vermont left the Republican Party and became an independent. Conservatives said he was actually voting like a liberal Democrat. But that wasn’t quite right. Since he entered the Senate in 1989, his average ACU rating had been 27 – definitely the most liberal Republican, but not Ted Kennedy country. His ADA average was 58 – liberal for a Republican, but a long way from Vermont Democrat Pat Leahy. After the switch, Jeffords’ ACU rating started falling like GOP approval ratings: from 40 in 1999 to 29 in the year of the switch to 6, 10, 4, 8 and 4 during the rest of his tenure.

Specter says he won’t become a party-line Democrat, any more than he’s been a reliable Republican vote. But the evidence from previous party-switchers is that his votes will end up much more in line with his new party.

Love the Cards, Hate the Card Issuers

God hates the sin but loves the sinner, we are told.  Americans have a similar attitude towards credit cards.  They love the cards but hate the card issuers.

Naturally, President Barack Obama has picked up on this sentiment and wants the credit card companies to be “fair.”  Reports the Washington Post:

The Obama administration yesterday called for an end to unfair credit card industry practices such as retroactive interest rate increases for any reason, late-fee traps that penalize borrowers with weekend or middle-of-the-day deadlines and teaser rates that last less than six months.

In a written statement released by the Treasury Department, the administration outlined practices it would like Congress to reform as it considers two bills that would crack down on the industry. One proposal would force card companies to apply payments above the minimum amount to the highest interest rate debt. To crack down on over-limit fees, the administration would also like Congress to require card companies to get customers’ permission to set up accounts so transactions over the limit can still be processed.

There are lots of reasons to criticize the practices of  credit card companies, but many of the rules are simply mechanisms to charge riskier borrowers more.  If you pay off your bill every month, you don’t pay the extra fees and interest.  If you are more disorganized, short on cash, or both, you pay more. 

Higher charges make it possible to provide more credit to more people.  Of course, politicians believe in the latter but not the former.  Banks should provide credit cards, make loans, and issue mortgages to everyone, irrespective of credit standing, at rates akin to those charged Bill Gates.  Anything more is viewed as a variant of “predatory” lending deserving condemnation.

Maybe it would be best for some people not to buy so much on credit, but that isn’t – at least so far – the government’s decision.  However, it would be more honest if government branded people with the Scarlet C and banned them from borrowing than prohibiting companies from charging higher rates and fees to reflect higher credit risks.

The credit card debate is stranger than most in Washington.  Listening to critics you’d think that the card companies were dragooning people off the streets, forcing them at gunpoint to sign up for cards, and demanding that they spend money else their children will be kidnapped and sold into slavery.  Precisely who was forced to accept and use these terrible cards with their terrible terms?  No one.

Instead of posturing as defenders of the body politic, crusading politicians should, as my friend Don Boudreaux of George Mason University suggested,  give up their day jobs and start credit card companies.   These entrepreneurs then could offer consumers better cards with less onerous terms, making everyone better off.

Any takers?

The Stimulus Feeding Frenzy

Billions and billions of dollars! Get yours today!

I’ve written before about the massive lobbying game in Washington to get your own special interests written into the stimulus and budget bills. And about the efforts to pressure governments into spending that money NOW.

Today a friend sent me a new piece of the incredible expanding stimulus economy. A publishing company has created a new newsletter on how to keep up with “ever-changing opportunities and the complex requirements to apply for them” – The Money for Main Street Monitor. Yes, for only $229 a year, with this special offer, you can keep up with the lucrative and ever-changing “new stimulus funding opportunities.”

I’m omitting the specifics so as not to give this parasitical industry any more publicity, but here’s the text of the email advertisement:

Dear Nonprofit Professional,

Billions of dollars from the Obama stimulus plan are becoming available daily for funding thousands of new state, local and nonprofit programs!

And while it’s extremely time consuming and difficult to keep up with the ever-changing opportunities and the complex requirements to apply for them, we can help make that task easier than you’d imagine.

That’s why [the company] is proud to introduce our newest and much-needed online service: The Money for Main Street Monitor.

Just click on or cut and paste the following link into your Web browser to take advantage of a special one-week offer on this continuously updated service:

Continuous Stimulus Funding Updates

While we have diligently kept our readers up to date on the billions of dollars in funding coming from the Obama stimulus package, many tell us they need much more coverage!

Consequently, we have assigned a team of experienced Washington, DC-based editors to focus exclusively on new stimulus funding opportunities for health care, family services, education, mental health, disabilities and substance abuse programs, housing and community development!<

Through continuously updated articles, subscribers to this new online service will be kept up to date on the latest funding opportunities as soon as they emerge. And with our online format, subscribers will have access to our user-friendly search tools to instantly find the funding opportunities most suited for their organizations!

Plus, our updates – unlike those on government Web sites – are in plain English and easy to find.  And, we’ve included a wealth of grant-writing tips designed to help your organization get its share of stimulus funding!

We know how important it is for every organization to watch their dollars closely these days, and we’re doing are best to help. That’s why we are offering you a specially reduced rate for this much-needed publication, The Money for Main Street Monitor.

Just click on or cut and paste the following link into your Web browser to find out more about this special one-week offer:

Or you can call in your order toll free at 1-800-[GET OTHER PEOPLE’S MONEY].

This isn’t the only company making such offers. Lobbyists, consultants, newsletter publishers, and others will be making money this year guiding their clients to the pot of gold at the end of the stimulus. But in economic terms, all this effort is deadweight loss. Instead of devoting time and talent and resources to the production of real economic value, these people are being lured into the parasite economy, jockeying for money extracted from productive workers and businesses and redistributed by a Washington bureaucracy and the lobbyists that revolve around it.

Cato Unbound Update

This month’s issue of Cato Unbound has drawn an extraordinarily hostile response from a couple of mainstream online publications. Writing at Salon, Michael Lind inferred, mistakenly, that our interest in Seasteading and other radical libertarian projects was due to our disappointment that Republicans lost in the 2008 election. Because this issue was my idea, I feel I can speak effectively to the charge.

As I see things, it was basically impossible to cast either John McCain or Barack Obama as a libertarian. Neither of them shared the policy goals of the Cato Institute to any appreciable degree. Speaking as a private individual, I didn’t vote for either of them, and I don’t regret my choice. I found both Democrats and Republicans profoundly unappealing this election cycle.

This issue of Cato Unbound was motivated solely by my desire to see one particularly radical branch of libertarianism publicly confront its critics. I wanted to see how well it could hold up. Whether it stood or fell, the issue would have served its purpose. Electoral politics had nothing to do with it.

As our disclaimer makes clear, Cato Unbound doesn’t necessarily reflect the opinions of the Cato Institute. No endorsement is implied. Instead, we strive to present ideas and arguments that will be interesting to libertarians and also, if possible, to the general public.

Sometimes this means soliciting opinions that are very, very far from the American mainstream, and also far from our own views. It was a proud day for me when a prominent climate change blog suggested that Hell had frozen over – because the Cato Institute had published a piece by Joseph Romm. But that’s just the kind of place that Cato Unbound has always tried to be. We court controversy.

Some of Lind’s harshest barbs were reserved for contributor Peter Thiel, and for his suggestion that, demographically speaking, women have tended to oppose libertarian policies:

According to Thiel, one problem with democracy is that women have the right to vote:

Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of ‘capitalist democracy’ into an oxymoron.

What could more beautifully illustrate the pubescent male nerd mentality of the libertarian than Thiel’s combination of misogyny with the denial of aging and death? We had a nice John Galt libertarian paradise in this country, until girls came along and messed it up!

Thiel continues:

In our time, the great task for libertarians is to find an escape from politics in all its forms – from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called ‘social democracy.’

After considering the possible mass migration (if that is not a contradiction in terms) of libertarians to cyberspace and outer space, he opts for Fantasy Island:

The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism. For this reason, all of us must wish Patri Friedman the very best in his extraordinary experiment.

Here’s an idea. Thiel could use his leverage as a donor to combine the Seasteading Institute with the Methuselah Foundation and create a make-believe island where girls aren’t allowed to vote and where nobody ever has to grow up. Call it Neverland. It would be easy for libertarian refugees from the United States and the occasional neo-Confederate to find it. Second star to the right, and straight on till morning.

Emphasis added. Owen Thomas at Gawker jumped to about the same conclusion, but with even more ad hominem.

Yet Thiel’s claim is not that women should be denied the vote. He writes only that women have tended to favor policies and candidates he opposes, and which he thinks are bad for the country. This seems – to my mind at least – regrettable, but also generally true. Thiel might have chosen his words more carefully, but it’s still quite a logical leap from what he actually wrote to demanding the end of women’s suffrage. Of course women should be able to vote. It’s ridiculous to suggest otherwise. We libertarians just need to do a better job of convincing them that voting in favor of individual liberty and free markets are the best choices they can make.

Consider that a Democrat might complain that white evangelical Christians don’t support enough Democrats, and that this works out badly for the country. No one would ever conclude that Democrats want to take away the votes of white evangelical Christians. We would all figure that they are just confronting a failure of practical politics, and perhaps trying to do better at realizing their particular vision of the world. That’s what Thiel was doing too, albeit not via electoral politics. Something about libertarians, however, seems to demand that some people read us as uncharitably as possible.

Seasteading proposes to create a demonstration of how a libertarian society might work. Its proponents believe that if it works, everyone will be drawn to it, including women. Will they succeed? I have some serious doubts, to be honest.

That’s why I set up this issue of Cato Unbound, and why I think the discussion has been valuable.

The Politics of Budget-Cutting

helicopterIn Washington, the symbolic almost always trumps the substantive.  Thus, legislators complain, for good reason, about pork and earmarks, which ran about $35 billion at their maximum, and ignore entitlements, which entail some $100 trillion in unfunded liabilities.

So it is with President Obama.  He continues the endless bailouts, which cumulatively now run around $13 trillion.  He proposed a $3.6 trillion budget and will leave us with a $1.4 trillion deficit next year–and nearly $5 trillion in additional debt on top of the massive deficits already projected over the coming decade.  But he asked his Cabinet officers to chop $100 million in administrative expenses.

And he says he doesn’t need a new helicopter.  Fiscal responsibility in action.

Alas, the helicopter, while costing billions, isn’t an easy budget target.

Reports the New York Times:

At a Washington conference on fiscal responsibility in February, President Obama tried to set the tone by saying he did not need the new costly presidential helicopters that had been ordered by the Bush administration.

“The helicopter I have now seems perfectly adequate to me,” he said to laughter. On a more serious note, he added, “I think it is an example of the procurement process gone amok. And we’re going to have to fix it.”

But the president is learning that in the world of defense contracting, frugality can be expensive. Some lawmakers and military experts warn that his effort to avoid wasting billions of dollars could end up doing just that.

The administration’s plan to halt the $13 billion helicopter program, announced this month, will leave the government with little to show for the $3.2 billion it has spent since the Bush administration set out to create a futuristic craft that could fend off terrorist attacks and resist the electromagnetic effects of a nuclear blast.

Critics say the Pentagon would also spend at least $200 million in termination fees and perhaps hundreds of millions to extend the life of today’s aging fleet. As a result, several influential lawmakers and defense analysts are now calling for a compromise that would salvage a simpler version of the helicopter that is already being tested.

They say it could be a more palatable alternative in tough economic times than seeking new bids for a more advanced craft, which has proved difficult to develop.

No wonder Washington is known as a place where everything about government is permanent.  Once you start spending money on a program, it becomes extremely hard to stop.  Part of that is the political dynamic of interest groups, the problem so well dissected by the Public Choice economists.  And part of it is legal and procedural.  Contracts are let, cancellation fees are due.  It’s bad to waste money on a gold-plated helicopter.  It seems even worse to waste money developing a gold-plated helicopter, and then getting nothing at all by canceling it.

There is, however, an amazingly simple solution, of which Congress and the president apparently are not aware.

Don’t spend the money in the first place.  Eschew new programs.  Say no to special interests.  Let taxpayers keep more of their own money.

This approach would seem to make sense at any time.  But especially today, with the federal government facing a deficit approaching $2 trillion in 2009.

Didn’t Nancy Reagan lecture us to “just say no”?  We should invite her back for a return tour of Washington, only she should talk about federal spending this time.