Ideological Battles and GOP Politics: Will 2008 Mirror 1964?

I recently read William Middendorf’s A Glorious Disaster: Goldwater’s Presidential Campaign and the Origins of the Conservative Movement, which provides an interesting behind-the-scenes look at Barry Goldwater’s 1964 presidential run. While the book focuses primarily on campaign strategy, it is impossible to ignore the bigger picture — that is, the many parallels that exist between Goldwater’s era and today.
 
For instance, the Republican Party of the early 1960s faced an ideological struggle between small-government and big-government conservatives that closely mirrors the GOP infighting we have witnessed in the past few years.

Middendorf’s book notes a 1965 newspaper column by Goldwater in which he lashes out at a newly formed liberal Republican group that “is roughly dedicated to the proposition that the best way to be a Republican is to be a frugal or efficient Democrat, to follow the same philosophy, advocate the same bureaucratic solutions, but promise to do it better or for a few cents less.”

Similarly, in his forthcoming book, Leviathan on the Right, Michael Tanner notes how roughly four decades later, the GOP is embroiled in essentially the same fight:  

Goldwater and Reagan-style conservatism is increasingly being supplanted by a new trend in conservative thought, which might loosely be termed big-government conservatism. This type of conservatism believes in a strong and activist government that intervenes in many areas of our lives, from dealing with issues such as poverty or health care to protecting the cultural institutions of our society. Increasingly it has come to resemble contemporary liberalism in its means, if not its ends.

While Middendorf does not really address current politics in his book, the 1964 election appears to share some odd similarities with the 2008 race. In ’64, the frontrunners for the GOP nomination included a maverick senator from Arizona (Goldwater), a governor named Romney (George of Michigan) and a moderate executive from New York (Nelson Rockefeller).  The early front runners in 2008 are once again a maverick senator from Arizona (John McCain), a governor named Romney (George’s son, Mitt of Massachusetts) and a moderate executive from New York (Rudy Giuliani). Of course, in 1964 Goldwater won the nomination and was trounced in the general election by President Lyndon B. Johnson.   

While I’m not sure he’s a proper heir to the limited government legacy of Goldwater, McCain is arguably the frontrunner for the ’08 GOP nomination. And it might well be time for the senator from Arizona to take note of the failures of his predecessor’s campaign. Goldwater made his fair share of blunders during the campaign, but in the end he was beaten handily primarily because the general public believed his foreign policy views were too hawkish and could lead America into World War III — not because he espoused a reduction in the size and scope of the federal government. If McCain fails to learn from history, his success in the general election may mirror that of Goldwater.

Venezuela: Plus ça Change, Plus C’est la Même Chose

Hugo Chavez came one step closer to becoming a full-fledged dictator last night, as “Venezuelan lawmakers gave initial approval to a bill granting … [him] the power to rule by decree for 18 months so that he can impose sweeping economic, social and political change.” The vote in the National Assembly was unanimous — as befits a budding communist country.

Not that Chavez’s powers were much constrained prior to yesterday, but his soon-to-be official recognition as Venezuela’s dictator serves as an important reminder that state control of the economy and dictatorship go hand in hand.

Since the collapse of the Soviet empire, many defenders of socialism have argued that dictators, including Mao, Stalin, and Pol Pot, were aberrations; they took Marx’s ideas in the wrong direction. They claim that nationalization of the means of production (call it communism, socialism, or Marxism) and democracy can be compatible. In The Road to Serfdom, Hayek showed that it cannot. Some 50 years later, Hayek’s argument holds. Every socialist regime tends toward authoritarianism of some sort.

Chavez reminds us of the anti-democratic nature of socialism. As such, he is turning into a major embarrassment for many on the Left who supported him. Unfortunately, what the proponents of socialism again and again fail to realize is that it is the message, not the messenger, that is embarrassing.

Irony, in the Alanis Morissette Sense

Here’s a nice book-end to Chris Edwards’ recent post — and the flurry of controversy — about federal compensation reaching precisely double the national average: 

Tax Prof Blog (via Volokh) notes that federal employees owe $2.8 billion in taxes. Tax Prof lists and compares the “scofflaw” rates of different agencies and departments, with the U.S. Commission on Civil Rights coming in just shy of 10 percent.

But Tell Us What You Really Think of the NCLB, Matt

Matt Ladner, VP for research at the Arizona-based Goldwater Institute, has some harsh words for the No Child Left Behind Act:

The latest incarnation, in fact, represents yet another step in the long sad history of ineffectually throwing money at public schools. NCLB is headed for the ash-heap of failed education reforms. The only question at this point is how expensive of a failure it will become.

Is Charles Murray’s Ceiling Their Fate?

Writing in this week’s Wall Street Journal, IQ expert Charles Murray argues that “Our ability to improve the academic accomplishment of students in the lower half of the distribution of intelligence is severely limited.”

In one sense, he is almost certainly correct. No matter how much we improve the quality of schooling, there will always be intellectual pursuits that are beyond the reach of not just half the population, but beyond the overwhelming majority of us. He gives the example that he himself cannot follow proofs in the American Journal of Mathematics — not because he knows too little, but because he is not smart enough. Charles, I’m with you. After perusing this paper on “The Equivalence Problem and Rigidity for Hypersurfaces Embedded into Hyperquadrics,” I am prepared to agree with the now-discontinued Teen-Talk Barbie: ”[Abstract] math is hard.”

But in another sense, I suggest that Charles is mistaken. It is likely that a significantly improved education system could raise the academic achievement of all students substantially above their current levels. There are numerous examples of this happening, both anecdotally and in the research literature.

On the anecdotal front, recall star calculus teacher Jaime Escalante, and how he put LA’s Garfield High School on the map in the 1980s by constructing a math department that was truly top notch. So many of Escalante’s low-income Hispanic students started taking and passing AP calculus courses (more, at one point, than at Beverly Hills High School) that the program’s overseers insisted on a re-test (his students did remarkably well once again).

Are we to believe that the only children whose grasp of mathematics was greatly improved by Escalante’s instruction were those with above-average IQs? That seems unlikely. It would be hard to argue that calculus is as prohibitively difficult, when well taught, as “hypersurfaces embedded into hyperquadrics.”

On the empirical research front, consider the wealth of international studies comparing student achievement in parent-driven, competitive market schools with the achievement of similar students in bureaucratically-run, non-competitive schools. Are these academic advantages, which are sometimes substantial, concentrated only among those with 100+ IQs? Again, there is no reason to think so.

The problem, as I see it, with Murray’s argument is simply that he is assuming the “ceiling” on academic achievement is lower that it is actually likely to be. This may be due to the fact that, at present, the education system through which 90 percent of American students pass is badly designed, and consistently fails to raise students up to their full potential.

It is also worth noting that Charles makes no mention in this particular piece about the benefits of an improved K-12 education system for brighter students. Surely they deserve the opportunity to fulfill their intellectual potentials just as much as children on the left side of the bell curve.

In short, a better school system could do a lot of kids an awful lot of good.

Two Reasons Why an Individual Mandate Will Not Solve the Free-Rider Problem

The idea that government should compel people to purchase health insurance is gaining traction among Republicans and Democrats.  The idea is called an “individual mandate,” because it would require individuals to purchase coverage (as opposed to a mandate that requires employers to provide coverage to their workers).  Former Massachusetts Gov. Mitt Romney (R) put that idea into effect in the Bay State.  California Gov. Arnold Schwarzenegger proposes to do so in the Golden State.  A number of other states are considering it.

What makes the idea attractive is the fact that many people obtain health care but don’t pay for it.  Unless health care providers can (1) collect from, (2) avoid, or (3) deny care to those people (which in many cases is illegal), the costs must fall on someone else.  Thus, the reasoning goes, decreeing that everyone must obtain health insurance would solve that “free-rider” problem.

But there are two important reasons why it will not:

  1. There would still be people without health insurance.  Many will not obey the decree.  California mandates that all drivers must carry auto insurance, yet according to the Insurance Research Council, 25 percent of California motorists are uninsured.  In fact, the share of uninsured motorists is higher than the share of residents without health insurance (18 percent).  Even with a mandate, there will be uninsured people who free-ride at others’ expense.
  2. Free-riding by people with health insurance.  According to research by the Urban Institute’s Jack Hadley and John Holahan, people who have health coverage account for at least 30 percent of uncompensated care delivered to the non-elderly.  Since uncompensated care accounts for just 4 percent of health spending, a mandate could affect at most 2.8 percent of spending.

So an individual mandate could solve at most two-thirds of a very small problem, but chances are it would do even less good than that.

That small benefit must be balanced against the costs.  According to The New Republic’s Jonathan Cohn, who is generally sympathetic, “individual mandates … require substantial government intervention in the free market.”  Government must monitor yet one more aspect of the citizens’ lives.  It must define what qualifies as health insurance, which is an invitation to the sort of special-interest rent-seeking that has made health insurance unaffordable for so many.  It must tax some citizens to subsidize those who cannot afford coverage.  A final cost of such mandates is that rather than solve the much larger problem of moral hazard, they actually make that problem worse. 

An individual mandate would not fix our broken health care system.  It would simply pump more money into that system. 

What is interesting, then, is this.  Journalists and left-ish policy wonks explode when special interests try to line their own pockets by supporting, say, ineffective weapons systems.  But where is the outrage when this or that group seeks to do the same thing with ineffective health care proposals?

How Large are Federal Oil Subsidies?

Yesterday, I co-authored an op-ed with Peter Van Doren on the Democrats’ energy bill scheduled for a vote today in the House.  The bill is advertised as an exercise to eliminate the subsidies going to “Big Oil” and to use that money instead to subsidize renewable energy (the fact that “Big Oil” is also in the renewable energy business and will simply find that the federal checks are going to different corporate in-boxes has apparently not occurred to anyone, but I digress).  But did the Democrats wipe out all the subsidies, or did they leave some big subsidies behind?

A lot of people think that the Democrats left a lot of money on the table.  Today in the Christian Science Monitor, for example, economist Doug Koplow argues that the biggest subsidy left untouched by Pelosi & Co. relates to the military protection of oil producing facilities and shipping lanes abroad, a mission which costs the taxpayer at least $19 billion a year. 

While the Ds certainly were less than thorough in their anti-oil-subsidy crusade, I’m not so sure that the subsidies are anywhere near as large as many people think.

Quantifying the national security costs associated with ensuring the safe and reliable delivery of foreign oil is difficult.  The Congressional Research Service estimated in 1997 that those costs may be anywhere between $0.5-65 billion, or 1.5 cents to 30 cents per gallon for motor fuel from the Persian Gulf.  Agreement about the extent of the military’s “oil mission” is difficult because military and foreign policy expenditures are generally tasked with multiple missions and objectives, and oil security is simply one mission of many.  Analysts disagree about how to divide those missions into budgetary terms. 

Debate about the size of the U.S. military’s oil mission and related foreign policy expenses, however, is not particularly relevant to a discussion about whether and to what extent oil companies are subsidized by this kind of thing.  From an economic perspective, the key question is whether an elimination of U.S. military and foreign aid expenditures dedicated to “the oil mission” would result in (a) greater corporate expenditures to secure oil from abroad, and/or (b) an increase in the price of oil, and, if so, how much?  That is the true measure of the subsidy if it indeed exists.  That’s because, if the oil mission provides no value to multinational oil companies or oil consumers - as I maintain - than it is not a subsidy.  Measuring the subsidy by the amount of money government spends on the oil mission is at best a measure of how much politicians believe the national security externalities might be.  Political assessments may or may not be accurate.            

To be sure, if the termination of the American “oil mission” implied the termination of all military, police, and court services in the region, petroleum extraction investments would become more risky, extraction of oil might decrease, and prices would increase.  But remember that oil companies in the Middle-East are creatures of government.  So the question is really whether Middle-East governments would produce less oil because the United States ended its oil-related military mission and foreign aid.  Or would oil producing states provide – or pay others to provide – military services to replace those previously provided by the United States?           

I strongly suspect that a cessation of U.S. security assistance would be replaced by security expenditures from other parties.  First, oil producers will provide for their own security needs as long as the cost of doing so results in greater profits than equivalent investments could yield.  Because Middle-Eastern governments typically have nothing of value to trade except oil, they must secure and sell oil to remain viable.  Second, given that their economies are so heavily dependent upon oil revenues, Middle-Eastern governments have even more incentive than we do to worry about the security of production facilities, ports, and sea lanes.  

In short, whatever security our presence provides (and many analysts think that our presence actually reduces security) could be provided by other parties were the United States to withdraw.  The fact that Saudi Arabia and Kuwait paid for 55 percent of the cost of Operation Desert Storm suggests that keeping the Straits of Hormuz free of trouble is certainly within their means.  The same argument applies to Al Qaeda threats to oil production facilities.           

If oil regimes paid for their own military protection and the protection of their own shipping lanes, would U.S. Middle-East military expenditures really go down?  The answer might very well be “no” for two very different reasons.  First, the U.S. Middle-East military presence stems from our implicit commitment to defend Israel as well as the region from Islamic fundamentalism, and those missions would not likely end simply because Arab oil regimes paid for their own economic security needs.  Second, bureaucratic and congressional inertia might leave military expenditures constant regardless of Israeli or petroleum defense needs.              

Thus, U.S. ”oil mission” should not be viewed as a subsidy that lowers oil prices below what they otherwise would be.  Instead, the expenditures are a taxpayer-financed gift to oil regimes and the Israeli government that has little, if any, effect on oil prices or corporate profits.  Now, I’d be happy to see the oil mission go, but “Big Oil” won’t be any poorer for it.