Topic: Government and Politics

Public Choice in Action

The Washington Post ran a story today that could be a case study in a Public Choice textbook, “Maverick Costco CEO Joins Push to Raise Minimum Wage.”

The chief executive of Costco Wholesale, the nation’s largest wholesale club, yesterday became the most prominent member of a new organization of business owners and executives pressing Congress to approve an increase in the federal minimum wage.

Wow, Costco’s Jim Sinegal must be a really moral and public-spirited CEO. Sinegal “said he signed onto the effort because he thinks a higher minimum wage would be good for the nation’s economy as well as its workers.” The CEO explained: “The more people make, the better lives they’re going to have and the better consumers they’re going to be… It’s going to provide better jobs and better wages.”

Who does Sinegal think he is fooling? His real aim is to use the government to squash any low-end competition. 

Costco, of Issaquah, Wash., would suffer no direct impact from a higher minimum wage because its lowest-paid employees now make about $11 an hour, Sinegal said, adding that the average worker in the company’s 504 stores in the United States makes $17 an hour.

Running for Preacher

In the unlikely event he gets elected president, would former Arkansas governor Mike Huckabee hector the country to death about cutting carbs?  Maybe, but he seems to have an even more ambitious goal than slimming us down.  As he put it on Meet the Press Sunday:

I think America needs positive, optimistic leadership to kind of turn this country around, to see a revival of our national soul.

Really: is our national soul in such a parlous state that its last, best hope is… Mike Huckabee?  I thought it was the Left that was supposed to believe America was in decline. 

More to the point, even if there was such a thing as a “national soul,” tending to it is not part of the president’s job.  In the taciturn and businesslike language of the Constitution’s Article II, you won’t find anything making the president our national pontiff–any more than you’ll find the language that supposedly makes him Supreme Warlord of the Earth.   

This isn’t just a complaint about the Republican party, or the Religious Right, or even about religion in politics.  I’m not sure Hillary Clinton was talking about religion in her ”politics of meaning” speech diagnosing America’s “sleeping sickness of the soul,” our deep existential angst stemming from our inability to redefine “who we are as human beings in this postmodern age.”  I’m not sure what she was talking about, but whatever it is, it doesn’t sound like something bold executive action can or should fix. 

And Barack Obama’s “Audacity of Hope” isn’t a specifically religious concept.  Instead, judging by his 2004 Democratic Convention keynote speech, it seems to refer to the continuing promise of redemption through presidential politics.  Belief in that ideal would require a leap of faith far beyond anything demanded by the world’s major religions.

Reviving our “national soul,” healing our spiritual malaise, unifying the metatext and subtext of our postmodern age–none of this is the president’s business.  He or she is a constitutional officer, charged with faithful execution of the laws.   

Former Senator Phil Gramm’s 1996 run for the G.O.P. nomination was a colossal bellyflop, but he had at least one moment of glory.  Pushed by Focus on the Family’s James Dobson to talk up values issues on the campaign, Gramm snarled: “I’m not running for preacher.  I’m running for president.”  How many of today’s candidates can tell the difference? 

Competition among Cantons Boosting Swiss Competitiveness

Federalism is a marvelous structure, both because it allows preferences for different policies to be satisfied and because it creates competition among units of government. While federalism has been somewhat eroded in the United States, it still exists and presumably is one of the reasons why America is relatively prosperous (thanks to a less oppressive level of government). Switzerland is an even bigger success story. The central government represents less than one-third of total government (as compared to two-thirds in the US), and the concomitant competition between cantons has helped control the size of government. And as a Swiss news report indicates, this has generated big benefits for the Swiss economy:

Zurich is poised for a further influx of foreign firms and workers after the relocation of Kraft Foods’ European headquarters and the expansion of Google this year. The moves earlier this month from the two United States giants offer further evidence that the region offers prime conditions for companies, according to the Greater Zurich Area relocation service. …”The relocation of headquarters and the nice growth of Google that we have seen in the last couple of months shows that we have very good basic conditions in the region,” commented Greater Zurich Area chief executive Willi Meier. …A more controversial lure for foreign companies is the low corporate tax rates offered by many cantons in Switzerland. …The competition among cantons to set the lowest business tax was intensified at the beginning of last year when Obwalden slashed its rates to a Swiss low of just 6.6 per cent. Obwalden attracted 376 new firms in the first 11 months of 2006, three times more than in the previous year. But Meier insists the Zurich region is not afraid of the increased competition. “The tax competition among Swiss cantons makes Switzerland as a whole more competitive on an international basis. Kraft has chosen Zurich despite the fact that we don’t have the lowest tax rate in Switzerland, but on an international scale its still a very competitive rate,” he said. 

Lower Tax Rates Yielding More Tax Revenue

The capital gains tax should not be reduced to give more money to the government. Instead, the tax should be abolished since it is a punitive form of double-taxation on income that is invested. Nonetheless, it is worth noting that the government is collecting more money at a lower tax rate. Because there are many factors that influence economic performance, this does not necessarily mean that the lower rate is “paying for itself,” but it certainly indicates that there is a supply-side effect. As the Wall Street Journal explains, the bean-counters at the Joint Committee on Taxation failed to predict this result: 

Data released last week from the Congressional Budget Office confirm that the tax cuts of 2003 keep soaking the rich, especially on their capital gains. CBO and Congress’s Joint Tax Committee originally estimated that reducing the capital gains rate to 15% from 20% would cost the Treasury $5.4 billion from 2003-2006. Whoops. Actual revenues exceeded expectations by 68%, creating a $133 billion revenue bonanza for the feds. CBO’s original forecast for 2006 was for $57 billion in capital gains revenues, but actual receipts were $110 billion. This surprise windfall is one reason the budget deficit is also far lower than CBO predicted. The lower capital gains tax has raised stock values by raising the after-tax return on capital investment. It has also given stock owners a greater incentive to sell their shares, and then reinvest the proceeds, because the tax penalty on these transactions is lower. …The 2003 rate cut liberated hundreds of billions of dollars of capital for new investment. By the way, the National Venture Capital Association reports that venture capitalists invested $25.5 billion in 2006, the biggest burst of dealmaking since the stock market bubble burst in 2000. This is seed money for new companies and new jobs that will lift future tax revenues.

Jeb vs. W

Reading the Washington Post write-up of Gov. Jeb Bush’s speech to the National Review Conservative Summit, you have to wonder just what he’s saying. The Post reports:

Jeb Bush delivered yesterday in Washington a resounding endorsement of conservative principles, bringing his audience repeatedly to its feet.

In his lunchtime remarks to the Conservative Summit, Bush struck every conservative chord, blaming Republicans’ defeat in November on the party’s abandonment of tenets including limited government and fiscal restraint….

He added, “If the promise of pork and more programs is the way Republicans think they’ll regain the majority, then they’ve got a problem.”

Jeb said he was talking about the Republican Congress, and Kathryn Jean Lopez of National Review noted that he offered

a vigorous defense of his brother. Bush, at the beginning of his lunch speech, directed comments to the press gathered, noting emphatically: “I’m not going to criticize the president of the United States.” Among other accomplishments, Bush noted, “I like Justice Roberts. I like Justice Alito…” and tax cuts. He would also go on to defend the president’s immigration policy.

But who’s he kidding? President Bush sponsored most of those “more programs,” and in six years he hasn’t vetoed a single piece of pork or a bloated entitlement bill or a new spending program. And if Jeb thinks “we lost…because we rejected the conservative philosophy in this country,” he must realize that his brother has set the agenda for Republicans over the past six years almost as firmly as Putin has set Russia’s agenda. If Republicans turned their back on limited-government conservatism, it’s because the White House told them to. Not that congressional leaders were blameless — and on Social Security reform, they did decide to resist Bush’s one good idea — but it was President Bush and his White House staff who inspired, enticed, threatened, bullied, and bully-pulpited Republicans into passing the No Child Left Behind Act, the biggest expansion of entitlements in 40 years, and other big-government schemes.

This isn’t a dynastic country, and we shouldn’t elect a president whose brother (or husband) just served in the same office. But maybe Jeb could do like royals and nobles in the Old World sometimes do — give up their title or family name and enter politics as just plain Tony. (Believe me, once voters hear Jeb discuss public policy with facts and complete sentences, they’ll quickly forget that he’s supposed to be the president’s brother.) As John Ellis, the successful two-term governor of Florida, Jeb would instantly be the mainstream-conservative candidate for president.

But actual supporters of limited government should limit their enthusiasm. Although Jeb seems to have convinced conservatives that he’s much more committed to spending restraint than W — and he did veto some $2 billion in spending over eight years — his real record is much more like his brother’s. According to the Cato Institute’s Fiscal Policy Report Card on America’s Governors (pdf), he presided over “explosive growth in state spending.” Indeed, in the latest report card, only 10 governors had worse ratings on spending restraint, though — again like his brother — Jeb scored much higher on tax cutting. Federal spending is up 50 percent in six years; Florida’s spending was up 52 percent in eight years, and Jeb wasn’t fighting two foreign wars.

But at least he gives a good speech.

Why Fight Educational Freedom?

As reactions to Why We Fight: How Public Schools Cause Social Conflict have started coming in, a few recurring objections have emerged to letting parents choose schools that comport with their values. Andrew Coulson, in an excellent post, responds to the arguments of one group in particular: defenders of evolution-only biology instruction. I won’t focus on that camp since Andrew handles them so deftly, and because many of their objections are really just specific examples of the more general complaints I’m going to tackle.

Unfortunately, many of the broadsides launched against Why We Fight employ what I’ll call the “boogeyman gambit”: attacking the entire notion of school choice on the grounds that some parents might choose fringe schools. As Red State Rabble contends:

Cato’s solution to Balkanization? Balkanize the schools. A Christian fundamentalists school here, a Muslim Madrassa there. Hey, there might even be enough money left for a school with a science department somewhere. 

These kinds of attacks are easy, and all too often effective, frighteningly suggesting without any support that somehow the nation will explode with maniacal kooks if we stop forcing people to fund public schools and let them go to institutions of their choice. Give people educational freedom, we’re supposed fear, and the name “Bob Jones” will replace “Horace Mann” on schools across the country.

Right.

Were such fringe groups truly the great threat Red State Rabble makes them out to be, then their schools would already swamp the nation. Parents are, after all, allowed to send their children to private schools as things stand now. Yet with very few exceptions, we hear little or nothing about a threat from private education. Which leaves two possibilities: either the malevolent hordes that Red State Rabble envisions going wild with school choice don’t actually exist, or they’re not so zealous that they’d be willing to part with private school tuition to indoctrinate their kids. Sure, we’re supposed to believe, they’re single-minded fanatics about their causes, but not so much that they’d sacrifice money for them!

Another frequent objection to letting parents choose their kids’ schools is that American children need to be steeped in a shared worldview, lest they be in constant combat as adults. This arose as a major line of argument in a Free Republic discussion about Why We Fight, and is very similar to the “Americanization” mission given to industrial-era public schools, where immigrant students were taught to reject the customs and values of their parents’ lands — and often their parents themselves — and adopt the values political elites deemed proper.

Now, if one were willing to accept a system that would, by definition, quash any thoughts not officially sanctioned, then in theory one would be okay with a public schooling system intended to force uniform thought. In the context of an otherwise free society, however, getting such a system to work is impossible, because it would require that incredibly diverse and constantly combative adults create and run an education system that somehow produces uniform and placid graduates. It’s no more realistic than hoping a tornado will drop houses in a more perfect line than it found them.

The practical result of our trying to make uniformity out of diversity has, of course, been constant conflict, as Why We Fight makes clear. Moreover, there is another by-product of this process that no one mentions when they weave scenarios about choice producing schools steeped in ignorance: our schools right now teach very little, especially in the most contentious areas like evolution and history, because they want to avoid conflict.

When it comes to teaching the origins of life, for instance, while evolution stalwarts might think they have the upper-hand because courts have regularly ruled in their favor, the reality on the ground is often that, courts or no courts, teachers dodge evolution. As the New York Times reported in February 2005:

Dr. Eugenie Scott, executive director of the National Center for Science Education, said she heard “all the time” from teachers who did not teach evolution “because it’s just too much trouble.”

“Or their principals tell them, ‘We just don’t have time to teach everything so let’s leave out the things that will cause us problems,’ ” she said.

So here’s what happens when evolution supporters fight to the political death to keep dissenters’ tax dollars in the public schools: Neither evolutionists nor creationists get what they want. It ends like a dispute between children, with someone taking their ball home and no one getting to play.

As one can imagine, because it potentially involves the stories of every group ever on Earth, history instruction often ends up even more denuded than science, thanks to the controversy-avoidance instinct. As Diane Ravitch explains in great detail in The Language Police, history textbooks — and, as a result, history classes — have been rendered utterly barren by the need to pass muster in highly contentious, politicized textbook adoption processes. The result is that nothing very critical ever gets said about any group, and students do not learn anything interesting or meaningful about history. The entire subject, it seems, has taken its ball and gone home.

Which brings us to the fundamental problems with the anti-choice arguments thrown at Why We Fight: they ignore the utter failure of the system we have now, and rest on baseless scare tactics. Choice opponents, however, can only ignore the very real consequences of not having choice for so long. Pretty soon, parents on all sides of the public school wars will unite around just two things: exhaustion with the all the fighting, and demands for school choice.    

Boston Tea Party? REAL ID Party!

Our nation has many gentle rivalries. As a northern California native, I have always known that I’m slightly superior to our friends in So Cal. (LA-LA land’s ignorance of our disdain validates it wonderfully, by the way.)

Maine people have a similar feeling toward their neighbors in Massachusetts (even while they root for Boston’s professional sports teams). This is among the things I enjoyed discovering this week as I traveled to the far northeast for some lively discussion of the REAL ID Act.

On a panel I was privileged to join at a community center in Augusta Wednesday night, George Smith, executive director of the Maine Sportsmen’s Alliance, stood to share his opinion of our national ID law and what Maine should do about it. A Norman Rockwell painting come to life, he spoke with all the directness (and accent) of a lifelong Mainer. Summarizing, his message was this: They had their Boston Tea Party. Let’s have a REAL ID Party!

All the spirit and independence that makes me so proud of Americans — without sparing that family rivalry for even a minute!

The result of George’s work — along with the Maine Civil Liberties Union and a bipartisan consensus of the state’s political leaders — was near unanimous passage of a state resolution refusing to implement REAL ID. Maine is now the first state to reject the REAL ID Act, and the tide against the bill is beginning to run. 

(For some equally stirring rhetoric in defense of liberty and against a national ID, here’s New Hampshire Representative Neal Kurk (R-Weare) on the REAL ID Act last year. New Hampshire is one of many states likely to join Maine in rejecting a national ID.)

I have tried to supply the intellectual arguments for rejecting a national ID in my book, Identity Crisis: How Identification is Overused and Misunderstood. I was pleased to offer Smith and a number of Maine’s political leaders copies of the book.