Topic: Government and Politics

Farm Fibs

My toddlers have recently been having fun with the phrase “liar, liar, pants on fire.” I’d like to set them loose on the farm bill debate in Congress. 

Take a comment today in a Michigan news source by Rep. Timothy Walberg, a member of the House Agriculture Committee: “We want our food cheap, and we’ve become used to that, and that’s where the farm bill comes in. It guarantees cheap and plentiful food.”

But numerous farm programs raise food prices. I’ll give you three: milksugar and related products such as chocolate, and infant formula. And don’t forget about federal ethanol policies, which are pushing up prices for corn and derived products. 

Heck, Why Not Just Burn Him At The Stake?

Just when you thought partisan idiocy in Washington couldn’t get any worse, the House voted last night to cut off the salary of Andrew Biggs, the new Deputy Commissioner of Social Security. No one doubts Biggs’ qualifications for this position. But his sin is having supported proposals to allow younger workers to privately invest a portion of their Social Security taxes through individual accounts. Apparently holding a position that Democrats disagree with is now so abhorrent that it disqualifies you from public office.

Get Rid of the Surgeon General’s Office

The Surgeons General have been in the news recently, complaining that they are forced to follow the policies of the Presidents who give them their appointments (gee, what a radical notion). But the real question is why this national-nanny position still exists. As argued in a column for National Review Online, the office of Surgeon General should be retired:

When the position of surgeon general, then called supervising surgeon, was first created in 1781, the appointee actually had something tangible to do. … Since then, the duties of the surgeon general have been demoted so many times he’d barely be a buck private if his title kept up with the changes. In 1968 President Lyndon Johnson took away the responsibility of overseeing the PHS and made the position of surgeon general into one of a glorified adviser who is answerable to the assistant secretary to the secretary of Health and Human Services. … The position of surgeon general today has become mostly one of a bully pulpit to serve as a federally funded advocate for various health causes… Today, the office has a budget of $3 million and the surgeon general is paid close to $200,000 annually. However they have little or no authority to coordinate the federal government’s public health activities. This coordination is already being done by more than 50 different federal offices. …to save the taxpayers’ money, to eliminate yet another unneeded voice in the health-care cacophony, to free up a uniform for the local high school’s Pirates of Penzance performance and to save C-SPAN viewers from any more surgeon-general alumni reunion tours like last week’s hearings — eliminate the Office of Surgeon General today.

Taxpayers Lose Again

In Maryland, as in many other states, legislators have to wait a year before becoming lobbyists.  The idea is to put some distance between being a member of the legislature and turning around and immediately lobbying your colleagues. Maybe it helps to reduce the impression that some legislators are thinking about their next job as they make legislative decisions.

So how can Sen. P. J. Hogan go directly from the State Senate to a cushy job as the chief lobbyist for Maryland’s university system? Because “the one-year prohibition on legislators lobbying state officials does not apply to someone moving from one state post to another.”

So if you want to lobby for the private sector, for businesses or unions or environmentalists, you have to wait a year to alleviate any appearance of impropriety. But if you want to lobby on behalf of the government itself, you can use your contacts immediately, before they get cold and distant. Indeed, you’d have to wait a year to lobby on behalf of a taxpayers group, but you can start lobbying against the taxpayers the next day. Just another way that government stacks the deck against taxpayer interests.

A Perverse Burst of Honesty from Europe

European elitists want to create a bureaucratic super-state, but their efforts to further centralize power in Brussels are complicated by the fact that voters generally are opposed to the loss of national sovereignty. In an effort to circumvent these voters and avoid holding referenda, the proposed European constitution has been cosmetically modified and is now being called a treaty. Every so often, however, a politician blurts out the truth and admits (apologies to Hans Christian Andersen) that the Emperor has no clothes.

As reported by the EU Observer, an Italian minister who was closely involved in the drafting process has acknowledged that the text of the constitution/treaty was deliberately made unreadable in order to keep voters from understanding the radical changes that are being proposed. Mr Amato deserves credit for telling the truth, but his admission also is a sign that Europe’s elite have utter disdain for public opinion:

The new EU reform treaty text was deliberately made unreadable for citizens to avoid calls for referendum, one of the central figures in the treaty drafting process has said. Speaking at a meeting of the Centre for European Reform in London on Thursday (12 July) former Italian prime minister Giuliano Amato said: “They [EU leaders] decided that the document should be unreadable. If it is unreadable, it is not constitutional, that was the sort of perception”. …Mr Amato, who is now minister of the interior in Italy, has been a central figure in all stages of the year-long process of writing a new constitution for
Europe. He was vice-president and leader of the socialists in the Convention, the body that wrote the first constitution-draft in 2002-2003 under the leadership of former French president Giscard d’Estaing. …Following two years of ‘reflection’ Mr Amato headed the 16-strong group of politicians which prepared a simplified version of the document. Unofficially known as the “Amato Group” the group stripped the rejected constitution of its constitutional elements - including the article on the EU’s symbols. But the main elements of the original constitution were kept in. …”This is an extraordinary admission from someone who has been close to the negotiations on the EU treaty”, said Open Europe director Neil O’Brien. “The idea of just changing the name of the Constitution and pretending that it is just another complex treaty shows a total contempt for voters.”

Economics and Values

A recent NYT article has roiled the economics blogosphere by spotlighting several prominent economists who ostensibly challenge the “fundamental assumptions” of their field. A snippet:

“Economists can’t pretend that the consensus for free markets and free trade that existed 30 years ago is still here,” said Robert B. Reich, a public policy professor at Berkeley who served in President Bill Clinton’s cabinet.

Part of the reason is the growing income inequality and dislocation that global markets and a revolution in communications have helped create. Economists who question the free-market theories “want to speak to the reality of our time,” Mr. Reich said.

The article references some interesting material, including Alan Blinder’s criticism of offshoring and David Card’s provocative work ($) with Alan Krueger on employment and the minimum wage. However, contrary to its tone, the article is not (for the most part, anyway) about disagreements in economics — it’s about disagreements over values.

Consider, for instance, this bit from Blinder’s recent Washington Post op-ed:

And if the jobs do move offshore, displaced American workers may lose not only their jobs but also their pensions and health insurance. These people can be forgiven if they have doubts about the virtues of globalization.

We economists assure folks that things will be all right in the end. Both Americans and Indians will be better off. I think that’s right. The basic principles of free trade that Adam Smith and David Ricardo taught us two centuries ago remain valid today: Just like people, nations benefit by specializing in the tasks they do best and trading with other nations for the rest.

Blinder does not dispute (and indeed endorses) the economic orthodoxy that trade materially benefits participants. Instead, he notes that a change in trading partners produces both winners (the new trading partners) and losers (displaced partners), and that change can often be painful for the loser — a notion that most all economists would endorse.

Given this economic analysis, Blinder offers a values judgment: the United States should implement public policies to aid displaced workers caught in such change (but he expressly eschews protectionist measures that would prohibit change). Libertarians may disagree with Blinder’s policy proposals (perhaps on the grounds that such policies are not appropriate for limited government, or are economically inefficient, or would create perverse incentives and unintended consequences). But this disagreement is not about economics, it’s about competing values (e.g., limited government is preferable; economic inefficiency is undesirable, perverse incentives and unintended consequences are to be avoided).

Like “hard” science, economics is a non-normative field that attempts to determine certain types of relationships — in this case, economic ones (e.g., what is a minimum wage’s effect on employment; what market power effects result from industry regulation?) — and use those determinations to predict the future. Economic analysis often leads to policy recommendations, but those recommendations are the product of value judgments: Should the well-being of one group of workers (e.g., domestic, unionized, members of a particular group) be promoted over another? Should the harm experienced by displaced workers be mitigated, and if so, how?

From a policymaking perspective, it is useful to distinguish what part of economic policy is about economics and what part is about values. Economic analysis of U.S. farm subsidies and trade protections reveals their effect on farmer and consumer behavior, but good policy ultimately comes from answering such values questions as whether the tradeoff of higher consumer food prices for higher producer revenues is acceptable, or whether ag subsidies are a good use of the public fisc.  Or, concerning Prof. Reich’s comment above about income inequality, good policy would come from answering the values question of whether it is a problem that some people are rich or, instead, that some people are poor.

All of this is not to say that we should not question whether neat, simple economic theory plays out cleanly in this messy, complicated world. The debate ($) over Card & Krueger’s minimum wage findings is one of the most interesting in economics, and the burgeoning field of behavioral economics is reinvigorating long-simmering questions about the rationality of market actors — though those questions may not support the values judgments that the apostates and heterodoxoi presume. But I would argue that economics is not so different from the hard sciences — the core tenets are quite solid (though revolution does occur). What remains (appropriately) shaky is a pluralistic society’s attempts to apply its many values (as well as its hopes, fears, grievances, immediate concerns, and political aspirations), to economic phenomena.