Tag: federal government

“If You’re Not Having Fun Advocating for Freedom, You’re Doing it Wrong!”

The health care debate has catalyzed a wonderful national clash of cultures centering on freedom versus control. Here’s one example that’s both complex and delightful.

Progressive site TalkingPointsMemo ran a story yesterday about a man named “Chris” who carried a rifle outside an event in Phoenix at which President Obama appeared. “We will forcefully resist people imposing their will on us through the strength of the majority with a vote,” Chris said.

To many TPM readers, this kind of thing is self-evidently shocking and wrong: Carrying a weapon is inherently threatening, Second Amendment notwithstanding. And vowing to resist the properly expressed will of the majority—isn’t that an outrageous denial of our democratic values?

Well, … No. Our constitution specifically denies force to democratic outcomes that impinge on freedom of speech and religion, on bearing arms, and on the security of our persons, houses, papers, and effects, to name a few. Our constitution also tightly circumscribed the powers of the federal government. Those restrictions were breached without abiding the supermajority requirements of Article V, alas.

There are many nuances in this clash of cultures, and it’s fascinating to watch the battle for credibility. One ugly issue is preempted rather handily by the fact that Chris is African-American.

Next question, taken up by CNN: Was the interview staged? Hell, yeah! says Chris’ interviewer. And they know each other—big deal.

Finally, they were laughing and having a good time. Isn’t this serious? Yes, it is serious, says Chris’ interviewer, but “If you’re not having fun advocating for freedom, you’re doing it wrong!”

It’s a great line—friendly, in-your-face advocacy that might just succeed in familiarizing more Americans with the idea of living as truly free people.

Today Talking Points Memo is charging that the man who interviewed Chris was a prominent defender of a militia group in the 90s, some members of which were convicted of crimes. I know nothing of the truth or falsity of this charge, and I had never heard of the militia group, the interviewer, or his organization before today.

This struggle over credibility is all part of the battle between freedom and control that is playing itself out right now. It’s an exciting time, and a chance for many more Americans to learn about liberty and the people who live it.

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Stimulus and Boondoggles

The New York Times has a story on some of the more controversial ways in which state and local government are using so-called federal “stimulus” dollars.  If anything, it provides some interesting background on the history of the word boondoggle (not surprisingly, it entered the American lexicon during the New Deal).  The gist of the piece is that one person’s boondoggle is another person’s…turtle crossing…skateboard park…or airport for an island in Alaska with 170 people on it.  One New Dealer found this out decades ago:

Robert D. Leighninger Jr., a sociologist who wrote “Long-Range Public Investment: The Forgotten Legacy of the New Deal” (South Carolina University Press, 2007), recounted the story of a Works Progress Administration official in Arizona who went off in search of boondoggles, and discovered that the towns he visited seemed to like their own projects but questioned those of their neighbors.  “I’ve been hunting all over the state for one, but everywhere I go I’m told it’s in the next county,” the official was quoted as saying in a 1936 newspaper article. “So far I haven’t been able to catch up with a real, live one.”

Naturally, that attitude is alive and well today.  I know more than a few folks in central Pennsylvania who thought Alaska’s “Bridge to Nowhere” was a waste of their federal taxpayer dollars but the “Road to Nowhere” in their own backyard was other people’s money well spent.  Of course the folks in central Pennsylvania don’t like being taxed by the federal government to pay for a bridge in Alaska – they don’t benefit, but bear a portion of the cost.  And that’s a fundamental problem with federal subsidization of activities that are – at most – the proper domain of state and local government.

Set aside the fact that the Constitution never intended for the federal government to make such expenditures.  While any of these controversial parochial projects will technically have benefits, sound economic decision-making would seek to optimize those benefits versus the costs.  In the politicized world of the congressional sausage factory, costs scarcely factor into the equation given that the burden is borne by million of taxpayers spread out across the country.  Therefore, I think the few in Congress who crusade against these perceived boondoggles should spend more time trying to educate their colleagues (don’t laugh) and the public on the need to limit the federal government’s ability to spend the money in the first place.

For more on the problems with the federal subsidization of state and local government, please see this Cato Policy Analysis from my colleague Chris Edwards.

Co-ops: A ‘Public Option’ By Another Name

Politico reports that the so-called “public option” provision could be dropped from the highly controversial health care bill currently being debated throughout the country:

President Barack Obama and his top aides are signaling that they’re prepared to drop a government insurance option from a final health-reform deal if that’s what’s needed to strike a compromise on Obama’s top legislative priority…. Obama and his aides continue to emphasize having some competitor to private insurers, perhaps nonprofit insurance cooperatives, but they are using stronger language to downplay the importance that it be a government plan.

As I have said before, establishing health insurance co-operatives is a poor alternative to the public option plan. Opponents of a government takeover of the health care system should not be fooled.

Government-run health care is government-run health care no matter what you call it.

The health care “co-op” approach now embraced by the Obama administration will still give the federal government control over one-sixth of the U.S. economy, with a government-appointed board, taxpayer funding, and with bureaucrats setting premiums, benefits, and operating rules.

Plus, it won’t be a true co-op, like rural electrical co-ops or your local health-food store — owned and controlled by its workers and the people who use its services. Under the government plan, the members wouldn’t choose its officers — the president would.

The real issue has never been the “public option” on its own. The issue is whether the government will take over the U.S. health care system, controlling many of our most important, personal, and private decisions. Even without a public option, the bills in Congress would make Americans pay higher taxes and higher premiums, while government bureaucrats determine what insurance benefits they must have and, ultimately, what care they can receive.

Obamacare was a bad idea with an explicit “public option.” It is still a bad idea without one.

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Bailouts Could Hit $24 Trillion?

ABC News reports:

“The total potential federal government support could reach up to $23.7 trillion,” says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government’s efforts to fix the financial system.

Yes, $23.7 trillion.

“The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just $1 trillion – $23.7 trillion is a staggering figure.”

Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could.

At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.

We used to complain that George W. Bush had increased spending by ONE TRILLION DOLLARS in seven years. Who could have even imagined new government commitments of $24 trillion in mere months? These promises could make the implosion of Fannie Mae and Freddie Mac look like a lemonade stand closing.

America Suffers When Washington Wins

The Washington Post has a “feel-good” story about how the huge expansion in the federal government has created a relatively strong job market in the D.C. area.

The story mentions that the federal workforce will expand by another 200,000 during the Obama years. Yet at no point does the author bother to mention (or perhaps even understand) that all these new bureaucrats are financed by draining resources from the productive sector of the economy.

A sample:

They came in droves wearing dark suits and carrying résumés yesterday — some lined up for a block in the hot sun waiting for the doors to open — to the only employer in this dismal economy hiring by the thousands: the federal government.
More than 6,000 people jammed into the National Building Museum in Washington to apply for openings at 75 agencies, including the departments of Treasury, Homeland Security, Justice, Veterans Affairs and Energy. 

[I]n the government, added [an applicant from] Silver Spring, “you get stability, you get great benefits and [an opportunity] to move up and progress in your job.” The federal government represents about one-third of the Washington region’s $401 billion economy. Some analysts said they think the ramp-up in federal hiring and spending will help the area emerge from the recession before most other metropolitan regions. From May 2008 to May 2009, the region lost 55,000 jobs. But during that same period, nearly 20,000 jobs were created, mainly in the federal government and federal contracting sector. 

…The Partnership for Public Service, a nonprofit that sponsored the job fair and is surveying federal agencies to determine their staffing needs, estimates that the government will hire about 600,000 people over the next four years, as many as 120,000 of whom would work in the Washington region. The federal workforce, currently at 1.9 million, is expected to grow to about 2.1 million during the Obama administration, according to the Partnership for Public Service. That is comparable to the staffing level during the Johnson administration’s Great Society programs of the 1960s.

Trapped Inside the Mime’s Box

Kevin Carey, policy director at the think tank Education Sector, asserts that when it comes to higher education libertarians are boxed in, unable to find a solution to out-of-control college costs that won’t violate at least one, basic libertarian principle:

This puts libertarians in somewhat of a box. On the one hand, they tend to be hostile toward the tens of billions of public dollars that flow into colleges every year. The more colleges cost, the greater the claim on the average citizen’s hard-earned money and thus reduction in their precious liberty etc., etc.

But the best way to bend down the long-term higher education cost curve and thus reduce government spending is to increase government regulation in the form of mandatory reporting. So it’s a pick your poison situation for the Cato folks — would you rather have Big Brother’s hand in your wallet or his eye on your business? You really can’t avoid both.

Now, I don’t want to seem obnoxious about this. After all, in the same piece that produced this quote, Carey notes that “while my politics are pretty far from Cato’s and I often think they’re wrong, they tend to be wrong in interesting ways.” I thank him for that (I think), though I should note that the impetus for his piece is a paper that comes from the John William Pope Center – the same paper I discuss here – not from Cato. So it might not even be Cato that Carey finds interesting. Regardless, here’s my potentially obnoxious-sounding reply:

Without even discussing the extremely dubious assumption that more regulation will lead to lower college costs, wouldn’t the best, most direct way to “reduce government spending” obviously be to, well, reduce, or even stop, government spending?

Of course it would, and that is the obvious solution for libertarians! It would get Big Brother out of our wallets and kill whatever justification subsidies might give him to gaze into our business. And it wouldn’t just make libertarians feel better – the benefits would accrue to almost everyone. If students and donors, rather than taxpayers, were to cover much more of colleges’ costs, taxpayers would save money, colleges would be unable to charge as much as they currently do, and schools would have to focus much more on their customers and patrons.

So there is no either-more-regulation-or-higher-costs box. Indeed, the only box that libertarians could possibly be trapped in is a mime’s box – a purely illusory one that someone has to really, really want to believe in for it to have any sort of existence at all. 

Having broken free of the invisible, intangible box, let me address one other thing that Carey brought up both in the discussion held at Cato, and his latest commentary:

The problem is that colleges aren’t just going to unilaterally release lots of new information on their own. Nor would it help matters much if they did; for data to matter it has to be standardized in a way that allows for comparison. That’s why companies report one set of quarterly financial results to the SEC, not 50 different sets to each state. Given that higher education is a national market this leads to a similar national solution: The federal government should compel colleges to release much more information about success as a condition of receiving direct or indirect federal aid.

The idea that a market that happens to be national in scope somehow requires federal control is both very common, and very inaccurate, simply equating “national” with “federal” and moving on from there. Even worse, though, is the even more basic assumption that to get something good, or just standardized, government control is required.

Whether it’s McDonald’s or Ruth’s Chris, an item on the menu in Beverly Hills is going to be essentially the same as in New York City. Why? Not because Washington says it must be, but because that keeps the customers coming. Or consider the QWERTY keyboard: It became the national standard by free-market, not government, forces. And how about the Model T, which was driven by Americans from Maine to San Diego? It was standardized not because the federal government said “this is a national car, so we must make it the national standard,” but because one company produced it and it was freely chosen by customers from sea to shining sea. And how do we choose automobiles today? Not by going to some federal report on what a car should be (though perhaps that day is coming) but, often, by consulting such trade mags as Road and Track.

Clearly, we don’t need government to set standards or inform consumers – markets will do those things themselves. But that markets will set their own standards is just part of the story. Sometimes – indeed, almost all of the time – you simply don’t want a single standard: Vegetarians don’t want a great steak. Many people would rather click than type. The English major fascinated by Chaucer doesn’t need a cyclotron. The working mom often doesn’t want the same education as the parentally funded 18-year-old.

And then there is the gigantic – but usually ignored – problem of government failure: Government regulation and standardization is very costly. It can be used to crush the opponents of the politically well-connected rather than advance the common good. It can have crippling unintended consequences. And, as former Dickinson College president, Clinton-era Department of Education assistant secretary, and current George Mason University professor A. Lee Fritschler made clear at the discussion of the Pope Center’s paper, it also simply fails – a lot. Indeed, based on his experience at the Department of Education, Fritschler is adamant that the feds are simply incapable of effectively regulating higher education.

So once again, Carey sees a mime’s box. This time, though, it’s not one he imagines entrapping libertarians, but one he thinks Washington can drop on the ivory tower to make it work right. It’s a different box, but just as illusory.

Congress Abolishes Health Care Scarcity?

Reading the New York Times’s coverage of a Senate committee’s recent vote on health care legislation, I was struck by the following statement from Sen. Dodd:

If you don’t have health insurance, this bill is for you,” said Senator Christopher J. Dodd, Democrat of Connecticut, who presided over more than three weeks of grueling committee sessions. “It stops insurance companies from denying coverage based on pre-existing conditions. It guarantees that you’ll be able to find an insurance plan that works for you, including a public health insurance option if you want it.”

The bill would also help people who have insurance, Mr. Dodd said, because “it eliminates annual and lifetime caps on coverage and ensures that your out-of-pocket costs will never exceed your ability to pay.”

A basic understanding of economics should tell you this can’t be right. The federal government and the insurance industry have limited resources; the demand for health care is potentially unlimited. Therefore, no conceivable legislation can ensure that the demand for health care will never exceed the resources available to pay for it. All legislation can do is to shift who controls the allocation of scarce health care dollars—in this case away from patients and insurance companies and toward the federal government. Reasonable people can disagree about whether that’s an improvement, but it’s disingenuous to pretend that any legislation could “eliminate” caps on coverage or “ensure” that health care wants will never outstrip our ability to pay for them.

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