Palin vs. Obama on Reform and Ethics

Sen. John McCain shocked the chattering class by picking Alaska Gov. Sarah Palin to share the GOP ticket. Commentators on the left and right offered predictable talking points about the selection, depending on their ideology.

But the libertarian reaction has been mixed, for good reason. Palin has an encouraging record on reform, but she must own up to a few notable blemishes on spending and tax issues. On balance, though, libertarians have much to admire about Palin’s tendency toward small government, especially compared to Sens. Barack Obama and Joe Biden, who rarely encountered a government program or tax hike they didn’t like.

Palin has branded herself a crusader against corruption in the GOP establishment in Alaska. In 2006, Palin crushed corrupt GOP governor Frank Murkowski 51 to 19 percent in a three-way primary. One of her first acts as governor was to sell the state jet on eBay for $2.7 million. She also made waves by passing ethics reform legislation.

“In her short time in state office, she has repeatedly thwarted [Sen. Ted] Stevens’s and [Rep. Don] Young’s interests and, at times, challenged their candidates — including their children,” The Washington Post noted.

In 2004, she joined a Democratic representative in filing an ethics complaint against Republican Attorney General Gregg Renkes over a trade deal. Renkes resigned.

As a Murkowski-appointee to the Alaska’s Oil and Gas Conservation Commission, Palin went after fellow commissioner Randy Ruedrich, also chairman of the state GOP, charging him with doing political business on state time. That investigation led to his resignation and a $12,000 fine. Quick: name one member of Chicago’s Democratic machine that Barack Obama took down along his rapid ascent to the U.S. Senate.

Palin also endorsed Lt. Gov. Sean Parnell to challenge Young, who is under investigation for secretly steering a $10 million earmark to a campaign contributor in Florida, in this year’s GOP primary (Young leads by about 150 votes, with thousands of ballots yet to be counted).

Parnell visited Young’s D.C. office in October 2006. Parnell said Young erupted with a ten-minute tirade about Palin, calling her a “crystal figure” and said he was “going to crush her,” according to a New Republic story.

The main chink in Palin’s reform armor lies in the so-called Troopergate scandal, which is being investigated by the Alaska legislature. While this dings Palin’s ethical image a bit, it could also garner her sympathy from the independent women she’s trying to court.

Palin says she told the public safety commissioner that state trooper Mike Wooten, her sister’s ex-husband, was abusive and committed other violations. The commissioner, Walt Monegan, says Palin never told him outright to fire the trooper, but that her aides pressured him.

Palin said Wooten made a phone call threatening her father, saying, “I will kill him. He’ll eat a [expletive] lead bullet, I’ll shoot him,” if her father got an attorney to help [her sister],” according to newspaper accounts.

Wooten was reprimanded for violating nearly a dozen laws and departmental policies since December 2001. Perhaps most strangely, he’s accused of Tasering Palin’s nephew.

In contrast, Obama’s record as a state senator in Illinois hardly represents reform. He spent eight years cozying up to the Chicago machine and failed to challenge status quo politics there.

Emil Jones, president of the Illinois senate and Gov. Rod Blagojevich’s enforcer, was Obama’s mentor. Obama often points to an ethics bill he “sponsored” in 1998 to bolster his reform and bipartisan credentials. The ethics bill allows Jones to retire next year and convert $578,000 (the amount he had in his account in 1998 minus income taxes) to his personal bank account. That’s not change you can believe in, it’s change Jones can bank on.

Obama’s bill barred fundraising on state property and blocked lobbyists from giving gifts to legislators. It did not, however, end the pay-to-play system of patronage championed by another Obama associate — Tony Rezko. Don’t blame Obama, though. He didn’t actually write the law, as reported by author David Freddoso:

“[Obama] was not the one to propose the ethics bill in the Illinois senate. He was not even a cosponsor until the day it passed. Five months after the ethics bill was introduced, and more than one month after it reached the senate, Obama was invited by Emil Jones to become its chief Democratic cosponsor. As David Mendell writes in Obama: From Promise to Power, former Rep. Abner Mikva convinced Jones to let Obama handle the legislation. Sen. Dick Klemm (D.) was removed as chief cosponsor and replaced by Obama on May 22, 1998 — the very day the bill passed.”

Obama has had a mixed record of reform in the U.S. Senate. He declined to seek earmarks this year. In past years, he has released his earmark requests. He worked on the Democrats’ ethics legislation in 2007, which required disclosure of earmark sponsors but balked at further reforms; earmark requests are still secret. Despite Obama’s lofty talk about bipartisanship, he and McCain furiously clashed on ethics reform, and Obama was used by Senate leaders as a hatchet man to hammer Republicans on corruption.

Sorry about the length of these posts, but considering Palin’s unknown status I figured it was warranted. Also, as a matter of full disclosure, I volunteered for the McCain campaign during the GOP primary.

Sarah Palin vs. Mark Sanford

Why did McCain pick the governor of Alaska instead of the governor of South Carolina? Sarah Palin may well be generating more instant buzz than Mark Sanford would have. But much of it is negative, as people discuss whether someone who has been governor of a very small state for less than two years is ready to be a heartbeat away from making national security decisions. Even the devout conservative Ramesh Ponnuru of National Review can’t avert his eyes from the problem: “Palin has been governor for about two minutes. Thanks to McCain’s decision, Palin could be commander-in-chief next year. That may strike people as a reckless choice; it strikes me that way. And McCain’s age raised the stakes on this issue.”

Mark Sanford was a congressman for six years, where he served on the International Relations Committee as well as the Joint Economic Committee. Palin has been governor of 670,000 people for about 18 months, while Sanford has served for five and a half years as governor of a state with 4.3 million people. Like Palin, Sanford is a social and economic conservative. He has taken on the Republican establishment in his state government and has a strong record on both school choice and pork-barrel spending. He has four children and a modern political wife who worked on Wall Street for six years and has managed his campaigns.

So what advantage does Palin bring to the McCain campaign that Sanford wouldn’t? Well, she’s a woman. Pure identity politics, the sort of thing Republicans deplore but often practice.

Bill Kristol says that the difference between Palin and Obama is that the Democrats are running an inexperienced guy for president, while the inexperienced Republican would only be vice president. A fair point. But as McCain himself has said, his age guarantees greater scrutiny of whether his vice presidential candidate is, as the saying goes, “ready on day one to lead.” (When I Googled that phrase, Google asked me if I meant “ready one day one to lead.” Maybe she will be, one day.)

McCain likes to talk about his 95-year-old mother. But his father died at 70 and his grandfather at 61, so his age is a real concern.

Mark Sanford would have been an experienced executive who has already dealt with national and international issues and a great next leader of the Republican party. Sarah Palin? We’ll see.

Palin: Uninspiring Tax Policy Record

On tax policy, Alaska governor Sarah Palin has a rather uninspiring, albeit brief, record. The following is some information gleaned from State Tax Notes.

Palin supported and signed into law a $1.5 billion tax increase on oil companies in the form of higher severance taxes. One rule of thumb is that higher taxes cause less investment. Sure enough, State Tax Notes reported (January 7): “After ACES was passed, ConocoPhillips, Alaska’s most active oil exploration company and one of the top three producers, announced it was canceling plans to build a diesel fuel refinery at the Kuparuk oil field. ConocoPhillips blamed the cancellation on passage of ACES [the new tax]. The refinery would have allowed the company to produce low-sulfur diesel fuel onsite for its vehicles and other uses on the North Slope, rather than haul the fuel there from existing refineries.”

There are good reasons for an oil-rich state to tax oil production, but a fiscal conservative would usually use any tax increase to reduce taxes elsewhere. Perhaps I’m missing something, but I see no evidence that Palin offered any major tax cuts. She did propose sending $1.2 billion of state oil revenues to individuals and utility companies in the form of monthly payments to reduce energy bills, but that sounds like welfare to me, not tax cuts.

Palin has offered a few narrow or minor tax breaks, including:

  • A tax credit for film production in the state, offering about $20 million per year in breaks.
  • A cut in an annual business license fee from $100 to $25 (the legislature went half way to $50).
  • A one-year suspension of the state fuel tax to save taxpayers about $40 million.
  • A repeal of tire taxes to save taxpayers $2 million.
  • A tax credit for commercial salmon harvesting to save taxpayers about $2 million.

That’s about it.

Two More Companies Escape UK Tax Net

Very few nations make the mistake of taxing business income earned in other jurisdictions. This policy, known as worldwide taxation, makes it difficult for a nation’s companies to compete in global markets — particularly if the government also has a high corporate tax rate.

The United States unfortunately is guilty of both a high tax rate and worldwide taxation, as is the United Kingdom. The difference between the U.S. and UK, however, is that British companies at least have the freedom to redomicile in places with better tax law.

And that is exactly what is happening, as reported by

The trickle of firms renouncing their residency in the UK for tax purposes has now increased to a steady stream after two more companies revealed plans to relocate their corporate HQs offshore. On Thursday, Charter, the London-based engineering group, announced proposals to change its corporate structure involving the creation of a new holding company in Jersey, to be called Charter International PLC, but with its head office and tax residence in the Republic of Ireland. While the company will remain listed on the London Stock Exchange, its new corporate HQ will move to Dublin. …The move is seen as further evidence of … increasing dissatisfaction with the international tax regime compared with jurisdictions such as Ireland, and especially the Treasury’s plans to impose tax on foreign profits to discourage multinationals to send profits to low-tax jurisdictions to avoid UK corporate tax.

…Meanwhile, Regus, the world’s largest provider of services office space, has revealed plans to shift its corporate headquarters from the UK to Luxembourg in what appears to be another tax-related relocation. Like Charter, it has also decided to form a holding company in Jersey.

…These announcements have come hot on the heels of news that fund firm Henderson is to defect for tax reasons, capping another bad week for the under-fire government of Prime Minister Gordon Brown which has copped much flak recently over its dithering over tax policy and its desperation to raise new revenues amid a weak economy. Lloyd’s of London insurer Brit Insurance has also confirmed that “it is actively considering the issue of tax domicile.” …Earlier in the year, Shire, the pharmaceutical firm, and United Business Media, both announced plans to redomicile in Ireland.

First Woman

Sarah Palin may be the first woman to serve as vice president, and she would now have to be considered the most likely candidate to be America’s first woman president. But she won’t be the first woman to receive an electoral vote. That title goes to — anyone, anyone? That’s right — everyone knows that the first woman to receive an electoral vote was Geraldine Ferraro, running mate of Walter Mondale in 1984.

But no. Everyone is wrong. The actual first woman to receive an electoral vote was Tonie Nathan, the Libertarian vice presidential nominee in 1976. Nathan was a radio/television producer in Eugene, Oregon, when she attended the first presidential nominating convention of the Libertarian Party in 1972. She was selected to run for vice president with presidential candidate John Hospers, chairman of the philosophy department at the University of Southern California.  Although the ticket received only 3,671 official votes, Virginia elector Roger L. MacBride chose to vote for Hospers and Nathan rather than Nixon and Agnew.

Find out more about Tonie Nathan — and the man she ran with and the man who cast his electoral vote for her — in the comprehensive new Encyclopedia of Libertarianism, which will be unveiled at next week.

My Hope Was for Change

I really dislike political speeches, and the “bigger” the speech, the worse. More faux earnestness. More lofty rhetoric about “pulling together to realize the American dream.” More heartstring-pullers about “a man I met in [insert heartland state here] who has played by the rules, but who is on the brink of losing his house because this year’s crop was destroyed by a plague of locusts and his job at the vacuum-tube factory was off-shored to Bangladesh.” You know what I mean.

Despite this, last night I was torn. I really didn’t want to listen to Barack Obama’s speech — Logical Neal had read lots of Obama’s issue positions and didn’t see anything that struck him as the least bit new — but Optimist Neal said surely there must be something to all this talk of “change.” So I tuned in.

Stupid Optimist Neal!

There wasn’t a thing in last night’s spectacle that didn’t come right out of the shopworn (but, of course, not open-shop!) Democratic tool bag and Big Book of Clichéd Political Speeches. Demonizing corporations and “the rich”; assuming that “caring” is synonymous with “more government”; pronouncing that all of this is what it really means to be American — it was all there!

Now, I know that no one reads what I have to say to get my take on pure politics. I’m an education guy! Fortunately, I can make my point by sticking with what I know. Obama’s rhetorical exploitation of education and “the children” was his tired speech in microcosm:

  • Demonize opponent because he hasn’t proposed new programs — you know, because Washington spends nothing on student aid — to send kids to college?


“I don’t believe that Senator McCain doesn’t care what’s going on in the lives of Americans. I just think he doesn’t know…How else could he offer a health care plan that would actually tax people’s benefits, or an education plan that would do nothing to help families pay for college…”

  • Talk like kids aren’t getting a decent education because government hasn’t done enough?


“Ours is a promise that says government cannot solve all our problems, but what it should do is that which we cannot do for ourselves, protect us from harm and provide every child a decent education…”


Oh, and promise to pay teachers—your most important foot soldiers and powerful lobby—more?

Check on that, too!

“I’ll invest in early childhood education. I’ll recruit an army of new teachers, and pay them higher salaries and give them more support. And in exchange, I’ll ask for higher standards and more accountability. And we will keep our promise to every young American — if you commit to serving your community or your country, we will make sure you can afford a college education.

I won’t go on. I’m sure you get the point. There’s nothing new — there’s no “change” — with Obama. There’s just the same old promise that whatever your problem, government will solve it, and there’s just another reminder that I should never, ever, listen to Optimist Neal.