President Obama delivered an interesting inaugural speech yesterday. His theme was responsibility, a theme that provides a useful frame for his administration.

The individual versus the collective: Americans generally affirm individual or personal responsibility for one’s life. To be an adult – to put aside childish things - means taking responsibility for one’s actions and outcomes. Yet language permits another possibility. “We” can take responsibility for this outcome or that injustice. Putting aside childish things means taking collective responsibility through government action. In this view, emphasizing the individual suggests a childish selfishness that should be overcome. Obama seems to be about both kinds of responsibility right now. But extending state control over society vitiates personal responsibility. The new president will have to choose between the two.

The rule of law versus charisma: In a free society, individuals associate together through consent within a set of impersonal rules enforced by an impartial judiciary. Societies may also be ruled by charismatic leaders who are thought to have special powers granted by divine favor or by other means. Charismatic authority undermines both individual and collective responsibility. No one need do anything: the special man will say the magic words and everything will change for the better. Moreover, charismatic men with special powers should not be restrained by mere laws. They are above such restraints and must be so to do their work.

Consequences versus absolute ends: In an ethic of responsibility, leaders and followers look to consequences in acting politically. President Obama alluded to an ethic of responsibility yesterday. We want a government that works; programs that do not work will be ended. The thought is admirable, the reality unpromising. Ronald Reagan eliminated two federal programs, one of which was a training program that worsened the lot of its clients. Reagan was thought to have a mandate to cut back government. Obama was elected for many reasons, none of which were constraining the federal government. More than a few of his followers expect he will, as he put it yesterday, “remake the world.” Those who set out to remake the world rarely notice the immediate consequences of their crusade. After all, the benefits of bringing heaven to earth will more than overcome the costs of the crusade.

Obama’s modest demeanor suggests an understanding of his own limitations.  If that is true, he may turn out to be more a politician and less a priest, a president content to live within the laws and achieve marginal changes in public policy.

But I wonder. Living in Washington, DC, I have recently had reason to recall Samuel Johnson’s remark about Shakespeare: “In his plays, there are no heroes, only men.” Obama seems to be telling a different story, a tale about charismatic heroes and utopian aspirations. When the talking stops and the doing begins, one question will be answered: Do Americans really want to live out a play where there are no men, only heroes?

A Government That “Works,” but for Whom?

In his inaugural address yesterday, President Obama tried to step around the central question of whether the federal government has grown too big and powerful:

The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.

Even in skirting the question, President Obama has in effect come down on the side of bigger government. His statement assumes that government programs will be central to creating jobs and providing health care and retirement security. For every problem confronting American families, it is just a question of finding the right program that “works.” He leaves off the table the very real possibility that government intervention has made each of those problems more difficult for Americans to solve, and that the answer really is a smaller role for government.

The other open question is who decides if a government program “works.” President Obama has wrapped himself in the mantle of change, yet as a candidate he endorsed the 2008 farm bill. The existing U.S. policy of production subsidies and import tariffs, a policy that has remained essentially unchanged for 75 years, arguably “works” for a small number of relatively well-off sugar, dairy, corn, rice, and cotton farmers. But for the vast majority of Americans, the farm bill delivers higher and more volatile prices at the store, billions of dollars a year in additional government spending, higher cost for U.S. businesses, a degraded environment, and a harder slog out of poverty for millions of farmers in less developed countries. [You can go here to find Cato research on how farm programs have failed to work in our national interest.]

If Senator and candidate Obama could not see the need to end our failed farm policies, it is hard to imagine many if any other programs that will come to an end under his administration.

For more on how scrapping farm subsidies would be a good first step toward removing failed government programs, watch this video:


Bush’s Gift to Obama: A More Powerful State

Friends of freedom, the Constitution, and limited government have plenty of reasons to deplore the past eight years. But in case you thought we might get some relief now, this Washington Post article from inauguration morning will change your mind. One of the points it makes – as some of us warned during the past few years – is that powers claimed by one president are left in the hands of the next, even though the first president’s supporters might have less confidence in his successor’s integrity and wisdom. So here’s the government that President Bush and the Republicans have turned over to President Obama and the Democrats:

Barack Obama takes office today with a realistic prospect of joining the ranks of history’s most powerful presidents….

Historians, recent White House officials and senior members of the incoming team expressed broad agreement that Obama begins his term in command of an office that is at or near its historic zenith….

The federal government itself is a far more potent instrument, in its breadth and depth of command over national life, than it has ever been before. Largely in response to the threat of terrorism, the Bush years and President Bill Clinton’s two terms saw “an incredible period of state-building that’s unrivaled in American history except by the creation of the national security state in the 1940s and ’50s,” said Jack Balkin, a professor of constitutional law at Yale whose blog, Balkinization, is often cited by members of the Obama team.

By necessity or design, and most often by passive acquiescence, Congress and the courts have let presidents do most of the steering of the new and expanded institutions that govern finance, commerce, communications, travel, energy production and especially intelligence gathering. When there were struggles for dominance among the three branches, most of them ended with lopsided victories for the executive.

The legislative power to declare war and ratify treaties, for example, has been deeply eroded by the practice of presidents to launch military operations on their own and to make major international commitments – such as December’s “status of forces” pact with Iraq – by “executive agreement” rather than by treaty requiring a two-thirds Senate vote. After lengthy controversy over warrantless domestic surveillance in the Bush administration, Congress authorized the program without obtaining any details about what, exactly, is collected and how it is used.

“Really, in the last 80 years we’ve seen a gradual, and at times not gradual, concentration of power in the executive office,” said William P. Marshall, who served as deputy White House counsel under Clinton….

Even in its first iteration, the government’s $700 billion expenditure to shore up U.S. financial systems will rival the roughly $1 trillion a year in “discretionary” federal spending – the portion of the budget, not including interest on loans and mandatory benefits such as Social Security, that is negotiated each year between the White House and Congress. Obama, who told The Post last week that he must “go big” in response to “the biggest emergency since World War II,” has spoken elliptically of the prospect that the cost could double.

Congress, the principal power of which is thought to be control of the national purse, has made little pretense of managing these vast expenditures. It will fall to Obama and his subordinates to decide winners and losers in the banking, financial services, automobile and other major industries, a span of control that dwarfs President Harry S. Truman’s attempt to seize control of steel production.

We don’t know yet whether President Obama will prove to be FDR or Jimmy Carter. But it’s clear that the freedom movement faces challenges that aren’t going away.

Terrorism References in Obama’s Inaugural Address: Two Outta Three Ain’t Bad

With the Cato counterterrorism strategy conference recently concluded, I listened to President Obama’s speech with a keen ear for his treatment of terrorism. My early conclusion was that he communicated well two out of three times, which ain’t bad.

Communications about terrorism are important. Done badly, they can inspire fear and overreaction on the part of the U.S. populace and government - doing terrorists’ work for them. They can also aid in recruitment and support for terrorists by exalting terrorism and terrorist leaders to audiences that are physically and ideologically nearby to terrorists.

Done well, communications about terrorism can suppress fear and overreaction and render terrorism less attractive to potential supporters, would-be’s, and wannabe’s. Ultimately, smart communications and disciplined responses can dissipate the value of terrorism as a tool to use against us.

I was disappointed by a line very early in the speech: “Our nation is at war, against a far-reaching network of violence and hatred.”

I don’t think there is any sensible way to interpret this other than as references to the “War on Terror” and Al-Qaeda. It’s a handy recruitment aid for Al-Qaeda to have the new U.S. President signal that it Al-Qaeda is in his head. People who don’t like the United States were drawn to Al-Qaeda by that line.

It is good to avoid the actual phrase “War on Terror,” of course, but the problem is not with the phrase alone. It is with the notion that war is the correct metaphor, and with the implication that military action or militarism is the best response to terrorism. In fact, military responses are almost always going to be overreaction.

Next quote: “… we have chosen hope over fear …”

It’s easy to disregard this small line, and it’s only an oblique reference to terrorism, but it’s an important one because it’s part of repeated pledge President Obama made in the campaign to put aside fear. He should follow up on the promise by avoiding terrorism fear-mongering himself and by policing his administration against it. Thumbs-up.

Final quote, and a big winner: “[F]or those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.”

I regret that he raised terrorism again because of the benefit it gives terrorists (knowing that they are in his head). But if it is going to be raised, I can’t think of a better way to do so - no reference to any specific group, just a declaration to anyone considering terrorism: You will lose.

His statement of U.S. indomitability is powerful. While discouraging terrorists, he gave the domestic audience needed confidence. Come what may, terrorism cannot defeat us.

During the Q&A on the first panel of Cato’s conference (Real, MP3), Ambassador Robert Hutchings stated his wish that the Bush Administration had issued messages of “indomitability, not revenge” in the aftermath of 9/11. The Obama Administration has to “gradually and carefully walk us back” from the approach the Bush Administration took, said Hutchings, and this statement from President Obama seems like a very good start.

So a qualified “good job” on communications about terrorism in President Obama’s inaugural address. We’ll hope for better in the future, and we’ll look forward to the Obama administration’s counterterrorism strategy, including its terrorism communications strategy.

Humble Hegemony?

Obama’s inaugural address had a sprinkling of foreign policy realism:

[Earlier generations] knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

Sounds like John Quincy Adams or Reinhold Niebuhr. You’d almost think the President supports a strategy of restraint.

Unfortunately, that sentence came just after this:

And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

A nation tempered by humility and restraint would not presume to lead every person in the world.

Government’s Broken Promise

I don’t make it a habit of reading New York Times editorials, but I gave in to temptation when I saw the title of today’s words of wisdom from the Times: “Government’s Promise.”

The editorial leads off:

When he accepted his party’s nomination last year, Barack Obama repudiated the “you’re on your own” ethos that had come to define the government’s relationship to the people.

With total federal, state, and local government spending as a percentage of GDP trending toward 40%, up from 30% at the beginning of the decade, how can the Times possibly suggest that a “you’re on your own” ethos has defined the government’s relationship to the people?  Americans can’t even go to the bathroom without the government interfering with that most intimate of human activities.

The Times continues:

He [Obama] said government cannot do everything, but he promised one that would do what individuals cannot do for themselves: “protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”

I’ll leave it to Cato’s national security experts to decide whether the government does a good job of protecting us from harm, but as an individual I’d be much more capable of protecting myself and my family were it not for government  gun restrictions.

Provide every child a decent education?  Utopian dreaming is fine until reality forces one to recognize that every child will never receive a decent education so long as federal and state bureaucrats, in conjunction with government-protected unions, rule the education roost.  See Cato’s education experts for more.

Clean water?  A 2005 Government Accountability Office (GAO) counted 27 different federal agencies providing financial support for domestic freshwater activities.  Twenty-seven.

Safe toys?  Once again, sounds nice.  But parents who entrust the nanny-state with the protection of their children do so at their own risk.  China, not exactly an example of a minimalist state, offers a good lesson.  Poor Zheng Xiaoyu – if only you had been an American bureaucrat you’d probably now be making six-figures as a K-street lobbyist.

Individuals can’t invest in new roads and new science and technology without the guiding hand – and bottomless pockets – of Uncle Sam?  A couple weeks ago I provided an example of how politicians allocate capital (taxes, i.e., confiscated capital) when building roads.  And if it were not for the government I wouldn’t be able to create this post on a computer and broadcast it over the internet while listening to music on my iPod?  I will admit that one Donna Gamble probably wouldn’t have gotten a cool Waverunner and big-screen television were it not for the National Science Foundation.

OECD Admits High Personal and Corporate Tax Rates Hurt Prosperity

There’s additional evidence that the OECD is a two-headed entity. While the Committee on Fiscal Affairs persecutes low-tax jurisdictions as part of its anti-tax competition jihad, the economists at the Paris-based bureaucracy have published a new study showing that high tax rates on personal and corporate income reduce productivity and entrepreneurship:

Taxes can have an effect on countries’ material living standards by affecting the determinants of GDP per capita – labour, capital and productivity. For instance, by distorting factor prices and returns to market activities, they can alter households’ labour supply decisions and incentives to enrol in higher education, as well as firms’ incentives to invest and to hire employees, and thus, lead to an inefficient allocation of factor inputs and lower productivity. …The findings of this paper suggest that taxes have an adverse effect on industry-level investment. In particular, corporate taxes reduce investment by increasing the user cost of capital. …The paper finds new evidence that both personal and corporate income taxes have a negative effect on productivity. …High top marginal personal income tax rates are found to impede long-run productivity working through the channel of entrepreneurial activity and this effect is estimated to be stronger the higher the entrepreneurial activity is in an industry. …The results also support the assumption that social security contributions have a negative influence on TFP and that this effect is more pronounced in industries that are characterised by high labour intensity.