Campaign Finance Regulation without Romance

Candidates are in hot pursuit of the party nominations and eventually the presidency. That means they are defining enemies, inducing fear, and offering voters hope — that their enemies will be punished and their fears relieved.

The rhetoric of campaign finance regulation is replete with such  enemies — the special interests, “Big Money,” the rich and so on — and one set of friends, “reformers.” Barack Obama has been especially skillful practicing this politics of fear to pave the way for additional restrictions on money in politics.

However, the reality of campaign finance regulation is a lot different from the rhetoric, and the 2008 campaign has already brought an exemplar of regulation absent romance.

Unity08 is an organization that tried to put together a “centrist, bi-partisan approach to the solving of our nation’s problems and the possibility of an independent, unity ticket for the presidency.” Unity08 sought to be a movement first and a third party with a candidate, second. I use the past tense here because a posted letter to their supporters suggests their effort has come to an end.

Unity08’s analysis of the reasons for their failure merits attention. They now lack enough members or money to go on. The two are interdependent: more members generate more money and vice versa. The Unity08 leaders think a lack of money posed the biggest obstacle:

The Federal Election Commission … has taken the position that we are subject to their jurisdiction … and, therefore, that we are limited to $5000 contributions from individuals (even though the Democrat and Republican Parties are able to receive $25,000 from individuals). Needless to say, this position by the FEC effectively limited our fundraising potential, especially in the crucial early going when we needed substantial money fast to get on with ballot access and the publicity necessary to build our membership. We were caught in a peculiar catch-22; we wanted to break the dependence on big money by getting lots of small contributions from millions of members, but needed some up-front big money to help generate the millions of members to make the small contributions. And the FEC (in effect, an arm of the parties) didn’t let that happen.

The need for large donations to build fundraising capacity was first discovered by the best political science book you never heard of. Contribution limits complicate political organizing by outsiders and thereby stabilize the status quo and benefit those who hold power.

Campaign finance regulations are sold as a panacea for all that ails Americans. They are said to foster competition, prevent corruption, and purify political speech. The Unity08 leaders have found out the truth about such regulations. Such rules are largely created to stifle electoral competition to help out one party or the other, or — as in this case — to permit both parties to stifle a third alternative. Such regulations don’t outlaw competition; they do establish arcane rules that discriminate against outsiders like Unity08.

When a candidate starts demonizing Big Money, remember Unity08 and the reality its leaders discovered, too late for their cause.

Ron Paul’s Ugly Newsletters

For the past few months most libertarians have been pleased to see Ron Paul achieving unexpected success with his presidential campaign’s message of ending the Iraq war, abolishing the federal income tax, establishing sound money, and restoring the Constitution. Sure, some of us didn’t like his talk about closing the borders and his conspiratorial view of a North-South highway. But the main themes of his campaign, the ones that generated the multi-million-dollar online fundraising spectaculars and the youthful “Ron Paul Revolution,” were classic libertarian issues. It was particularly gratifying to see a presidential candidate tie the antiwar position to a belief in a strictly limited federal government.

And so it’s understandable that over the past few months a lot of people have been asking why writers at the Cato Institute seemed to display a lack of interest in or enthusiasm for the Paul campaign. Well, now you know. We had never seen the newsletters that have recently come to light, and I for one was surprised at just how vile they turned out to be. But we knew the company Ron Paul had been keeping, and we feared that they would have tied him to some reprehensible ideas far from the principles we hold.

Ron Paul says he didn’t write these newsletters, and I take him at his word. They don’t sound like him. In my infrequent personal encounters and in his public appearances, I’ve never heard him say anything racist or homophobic (halting and uncomfortable on gay issues, like a lot of 72-year-old conservatives, but not hateful). But he selected the people who did write those things, and he put his name on the otherwise unsigned newsletters, and he raised campaign funds from the mailing list that those newsletters created. And he would have us believe that things that “do not represent what I believe or have ever believed” appeared in his newsletter for years and years without his knowledge. Assuming Ron Paul in fact did not write those letters, people close to him did. His associates conceived, wrote, edited, and mailed those words. His closest associates over many years know who created those publications. If they truly admire Ron Paul, if they think he is being unfairly tarnished with words he did not write, they should come forward, take responsibility for their words, and explain how they kept Ron Paul in the dark for years about the words that appeared every month in newsletters with “Ron Paul” in the title.

Paul says he didn’t write the letters, that he denounces the words that appeared in them, that he was unaware for decades of what 100,000 people were receiving every month from him. That’s an odd claim on which to run for president: I didn’t know what my closest associates were doing over my signature, so give me responsibility for the federal government.

But of course Ron Paul isn’t running for president. He’s not going to be president, he’s not going to be the Republican nominee for president, and he never hoped to be. He got into the race to advance ideas—the ideas of peace, constitutional government, and freedom. Succeeding beyond his wildest dreams, he became the most visible so-called “libertarian” in America. And now he and his associates have slimed the noble cause of liberty and limited government.

Mutterings about the past mistakes of the New Republic or the ideological agenda of author James Kirchick are beside the point. Maybe Bob Woodward didn’t like Quakers; the corruption he uncovered in the Nixon administration was still a fact, and that’s all that mattered. Ron Paul’s most visible defenders have denounced Kirchick as a “pimply-faced youth”—so much for their previous enthusiasm about all the young people sleeping on floors for the Paul campaign—and a neoconservative. But they have not denied the facts he reported. Those words appeared in newsletters under his name. And, notably, they have not dared to defend or even quote the actual words that Kirchick reported. Even those who vociferously defend Ron Paul and viciously denounce Kirchick, perhaps even those who wrote the words originally, are apparently unwilling to quote and defend the actual words that appeared over Ron Paul’s signature.

Those words are not libertarian words. Maybe they reflect “paleoconservative” ideas, though they’re not the language of Burke or even Kirk. But libertarianism is a philosophy of individualism, tolerance, and liberty. As Ayn Rand wrote, “Racism is the lowest, most crudely primitive form of collectivism.” Making sweeping, bigoted claims about all blacks, all homosexuals, or any other group is indeed a crudely primitive collectivism.

Libertarians should make it clear that the people who wrote those things are not our comrades, not part of our movement, not part of the tradition of John Locke, Adam Smith, John Stuart Mill, William Lloyd Garrison, Frederick Douglass, Ludwig von Mises, F. A. Hayek, Ayn Rand, Milton Friedman, and Robert Nozick. Shame on them.

Energy Price Controls in China

From our “never thought I’d live to see the day file,” Chinese Prime Minister Wen Jiabao announced yesterday that China would freeze energy prices as a means of combating inflation and appeasing public anger over escalating fuel prices. Well, been there, done that. If past is prologue, don’t expect a happy ending to this story.

Catching Flak for RomneyCare

Over at The Corner, Jonathan Adler is discussing the health care reforms Mitt Romney signed into law while governor of Massachusetts with an advisor to Romney’s presidential campaign. 

The Romney advisor claims: “The fact is that since healthcare reform was passed just over a year ago, the number of uninsured and the price of the average individual market health insurance policy in MA have decreased substantially.”  He may be right about the uninsured, but that’s a terrible measure of success.  Health insurance does not equal access to medicine, and access to medicine does not equal health.  Regarding the second claim, here’s what I wrote in September:

The Boston Globe truth-squads a similar claim and finds the reduction in premiums came from factors like political pressure, restrictions on access to providers, and greater pooling — not deregulation. Moreover, political pressure cannot last, while pooling raises someone else’s premiums to compensate. Overall, premiums under the Massachusetts law came in at more than projected. And premiums in Massachusetts are growing at 8-12 percent per year, compared to 6-8 percent for the rest of the country. Romney may not be responsible for that trend, but does anyone but Romney claim he has done anything to temper it?

Looking back on that, it occurs to me that the restrictions on access to providers part probably was deregulation.  The Romney plan did repeal the Commonwealth’s any-willing-provider law.  On balance, however, the plan increased regulation.  The rest of that paragraph stands.

The Romney advisor writes: “Critics like Mr. Tanner [my Cato colleague] want to condemn the reforms as a failure just three days after the individual mandate has gone into effect.”  Actually, all Tanner has done is make a few predictions about the ill effects of the plan, plus predict that the plan would fail to achieve Romney’s stated goal of universal coverage.  Last time I checked, all of Tanner’s predictions had come true.

Finally, the advisor rather cynically argues: “bear in mind that any implementation hiccups are primarily the responsibility of the current (Patrick) Administration.  If there are cost overruns, inefficiencies, etc., it’s very hard to blame someone who’s not in power to do anything about it anymore.”  And if a bank security guard dynamites the safe, it’s very hard to blame him for the looting that occurs after his shift is over.  

Adler responds ably: ”If a government program is only good when controlled by the ‘right’ people, then it is not a good government program.”

Pot vs. Kettle

As you may know, Tuesday marked the No Child Left Behind Act’s sixth birthday. At best, it was approached with mixed emotions, like a person’s 50th—it’s a nice milestone, but everything is starting to ache and will almost certainly just get worse. So while President Bush headed to sweet home Chicago to cut cake and blow up balloons for his signature domestic achievement, Senator Edward Kennedy—a crucial NCLB proponent in 2001—wrote a somewhat doleful op-ed in the Washington Post about the once promising law’s problems, a judge resurrected a lawsuit challenging NCLB as an unfunded mandate, and people with sense called for the law’s demise.

Yesterday, Secretary of Education Margaret Spellings spoke at the National Press Club in an effort to keep whatever joyful NCLB partying there might have been going. I won’t rehash most of what she said, but want to focus on one part in particular, and encourage you to read her whole speech to see if it doesn’t fully illustrate the point I’m about to make.

Here’s what she said toward the end of her talk:

We are hearing all kinds of rhetoric from the campaign trail: proposals to “scrap” NCLB, to “overhaul” the law, or to “turn around” education in just three years. As a parent, taxpayer, and voter I want more than a sound bite or quick fix. I want someone who recognizes that NCLB has sparked a more sophisticated dialogue that’s driving real improvement for all students. We have to ask, which comes first, politics or kids? No Child Left Behind is not just a catchy phrase. It’s a statement about who we are, and what kind of country we want to be.

Spellings makes a very important point here, one that I have made ad nauseum: Government control of education is almost always driven by political, not educational, concerns, which is why we spend tons of money on education and get almost no positive return on it. But if Spellings truly recognizes and believes this, how can she continue to support NCLB or any other government control of education? After all, as long as government controls schooling, politicians will control it, guaranteeing that politics, not kids, will almost always come first.

The answer, of course, is that Spellings and her boss are politicians; government provides their jobs and their identities, and they are just as interested in quick fixes and whatever works best for them politically as any other of their ilk. Spellings’ speech, with all its lovely, inspirational—but ultimately empty and deceptive—platitudes, illustrates this brilliantly, as does the politically unbeatable name of her beloved law. I mean, if you’re against No Child Left Behind you want to leave kids behind, right?

NCLB, like everything else run by government, is by its very nature politicized. That’s why we need to stop listening to any and all politicians who promise to fix education through more government, and demand the one thing that will actually rip away paralyzing politics: Getting government out of education.

Training Economic Illiterates in France and Germany

A fascinating Foreign Policy article explores the anti-capitalist propaganda that is force-fed to students in France and Germany. Recalling the glorification of the New Deal that I was exposed to during my younger years and the environmental nonsense my kids deal with (even in private schools!) on a frequent basis, I know American students also get some statist misinformation, but the article makes it appear that American textbooks are written by Friedman, Hayek, and Mises compared to what passes for economic education in Europe:

Millions of children are being raised on prejudice and disinformation. Educated in schools that teach a skewed ideology, they are exposed to a dogma that runs counter to core beliefs shared by many other Western countries. …Just as schools teach a historical narrative, they also pass on “truths” about capitalism, the welfare state, and other economic principles that a society considers self-evident. In both France and Germany, for instance, schools have helped ingrain a serious aversion to capitalism. In one 2005 poll, just 36 percent of French citizens said they supported the free-enterprise system, the only one of 22 countries polled that showed minority support for this cornerstone of global commerce. In Germany, meanwhile, support for socialist ideals is running at all-time highs—47 percent in 2007 versus 36 percent in 1991.

Many of these popular attitudes can be traced to state-mandated curricula in schools. It is there that economic lessons are taught that diverge substantially from the market-based principles on which the Western model is based. The phenomenon may hardly be unique to Europe, but in few places is it more obvious than in France and Germany. A biased view of economics feeds into many of the world’s most vexing problems, from the growth of populism to the global rise of anti-American, anti-capitalist attitudes.

The past 20 years have “doubled wealth, doubled unemployment, poverty, and exclusion, whose ill effects constitute the background for a profound social malaise,” the text continues. Because the 21st century begins with “an awareness of the limits to growth and the risks posed to humanity [by economic growth],” any future prosperity “depends on the regulation of capitalism on a planetary scale.” Capitalism itself is described at various points in the text as “brutal,” “savage,” “neoliberal,” and “American.” This agitprop was published in 2005, not in 1972. When French students are not getting this kind of wildly biased commentary on the destruction wreaked by capitalism, they are learning that economic progress is also the root cause of social ills. …Germans teach their young people a similar economic narrative, with a slightly different emphasis. The focus is on instilling the corporatist and collectivist traditions of the German system.

Bosses and company owners show up in caricatures and illustrations as idle, cigar-smoking plutocrats, sometimes linked to child labor, Internet fraud, cell-phone addiction, alcoholism, and, of course, undeserved layoffs. The successful, modern entrepreneur is virtually nowhere to be found. German students will be well-versed in many subjects upon graduation; one topic they will know particularly well is their rights as welfare recipients.

The not-so-subtle subtext? Jobs are a right to be demanded from the government. The same chapter also details various welfare programs.

Like many French and German books, this text suggests students learn more by contacting the antiglobalization group Attac, best known for organizing messy protests at the annual G-8 summits. One might expect Europeans to view the world through a slightly left-of-center, social-democratic lens. The surprise is the intensity and depth of the anti-market bias being taught in Europe’s schools. Students learn that private companies destroy jobs while government policy creates them. Employers exploit while the state protects. Free markets offer chaos while government regulation brings order.

…training the next generation of citizens to be prejudiced against being enterprising and productive is…foolhardy. …If countries like France and Germany hope to get their nations on a new economic track, they might start paying more attention to what their kids are learning in the classroom.

More Statism from Sarkozy

France’s President is supposed to be a conservative, but most of his proposed policies are designed to increase the size and burden of government. The latest example is a proposal for more taxes - including levies on the Internet - to finance France’s government-run television network. Perhaps this is the French version of compassionate conservatism? Tax-News.com reports:

French President Nicolas Sarkozy, in a speech on Tuesday, unveiled new proposals for an internet-based tax, as part of a range of new levies to fund France’s state broadcasters. …Sarkozy outlined plans [for] a tax on internet connections, mobile phone usage and a levy on the advertising revenues of commercial television stations. Sarkozy promised that any tax on internet users would be “infinitesimal”, but his idea is controversial, and some observers see the plan as taxing the new media to help fund the old. France would also stand out as one of the only countries to raise revenues from taxing internet access, something which other governments have so far shied away from.