On NPR, Mara Liasson tells Melissa Block that we're in a "libertarian moment" in politics:
BLOCK: And Ron Paul appears to be running. Again, he got a lot of devoted followers on the Internet last time during the 2008 bid, not so many votes in the primary. So this time around, is he a significant addition to the Republican field or more of an asterisk?
LIASSON: Well, I don't think he's a huge factor in terms of the nomination. In the 2008 GOP primary, he got only about 6 percent of the Republican vote. However, as you said, he does have a devoted following, lots of libertarian-leaning young people. He can raise millions of dollars online in a single day in one of his famous money bombs. So he brings energy to the party, and the Republican Party base seems to have caught up to him on the issues.
The GOP is in a real libertarian moment right now, and Paul has always been all about the debt and the deficit and taxes and spending. You could call him the godfather of the Tea Party.
Of course, Paul may have to split the libertarian Republican vote with former two-term governor Gary Johnson. Johnson also was "a Tea Partier when tea-partying wasn’t cool," according to the Capitol Report of New Mexico. He vetoed 750 bills in eight years, not counting line-item vetoes. And since today's libertarian moment goes beyond spending and health care to include rising support for gay marriage and marijuana legalization, Johnson might be better positioned to ride that wave and attract younger and independent voters.
Footnote: Two weeks ago NPR speculated about an Ayn Rand moment building from the financial crisis to the opening of Atlas Shrugged.
To put it mildly, the Federal Reserve has a dismal track record. It bears significant responsibility for almost every major economic upheaval of the past 100 years, including the Great Depression, the 1970s stagflation, and the recent financial crisis. Perhaps the most damning statistic is that the dollar has lost 95 percent of its value since the central bank was created.
Notwithstanding its poor performance, the Federal Reserve seems to get more power over time. But rather than rewarding the central bank for debasing the currency and causing instability, perhaps it's time to contemplate alternatives. This new video from the Center for Freedom and Prosperity dives into that issue, exposing the Fed's poor track record, explaining how central banking evolved, and mentioning possible alternatives.
This video is the first installment of a multi-part series on monetary policy. Subsequent videos will examine possible alternatives to monopoly central banks, including a gold standard, free banking, and monetary rules to limit the Fed's discretion.
As they say, stay tuned.
On his "700 Club" program this week, Christian Coalition founder Pat Robertson endorsed the decriminalization of marijuana. He says, "We’ve got to take a look at what we’re considering crimes. I’m not exactly for the use of drugs, don’t get me wrong, but I just believe that criminalizing marijuana, criminalizing the possession of a few ounces of pot, that kinda thing it’s just, it’s costing us a fortune and it’s ruining young people. Young people go into prisons, they go in as youths and come out as hardened criminals. That’s not a good thing.” Check out the video:
Robertson's comments come a few days after other conservatives, including Ed Meese and Gov. Rick Perry, have joined to encourage new conservative thinking about who should go to jail. Now far be it from me to recommend any policy on the grounds that it's endorsed by Pat Robertson. But I do have this question for Republican members of Congress: Do you really want to be to the right of Pat Robertson on the issue of marijuana prohibition?
Related: For an interesting look at how socially and economically conservative different Republican presidential candidates are, check out this graphic by Ben Adler at Newsweek. There's actually some surprising consistency. Mike Huckabee is the least libertarian candidate on economic issues, and exceeded only by Rick Santorum in his un-libertarianism on social issues. Gary Johnson and Ron Paul are most libertarian on both economic and social issues.
Now that Ron Paul has gained the chairmanship of the Subcommittee on Domestic Monetary Policy, the spin has begun that this victory will be an empty one. Some even suggest that libertarians should be, and are, opposed to Paul.
I have to admit I was a bit surprised when Dave Weigel of Slate placed me in that category. While I expressed concern regarding Paul's communications skills, the fact is that while he isn't the best choice in Congress to take on the Fed, he is the only choice. Any other Congressman would simply continue to ignore the long history of failure associated with the Fed. Had Dave presented a fuller picture of our conversation, that would have been clear.
Back to the question at hand, Paul will ultimately be good for monetary policy because he will actually bring some oversight to the Fed, which has been sorely lacking. Under the current Democrat Chair Mel Watt, this subcommittee has held a total of five hearings all Congress, and none of them were actually on monetary policy. Two of these hearings weren't even on areas under the jurisdiction of the Federal Reserve. Republicans have not done much better when they were previously in charge.
Much has been made of a recent Bloomberg poll showing that a majority of Americans want the Fed either abolished or reined in. While that poll offers hope, those of us who ultimately want to end the Fed, should remember that only 16 % wanted the Fed abolished. While 39% want the Fed to be more accountable, that does not constitute ending the Fed. What Ron Paul can most accomplish over the next two years is helping to educate that 39% on why minor tweaks will not make the Fed accountable.
Some have suggested that Ron Paul does not present the right face for taking on the Fed. But the fact remains that if not Paul, who? Given that Paul is about the only one in Congress willing to fight this fight, he merits support, even if that support is occasionally critical.
With Republicans taking control of the House in January, long-time Federal Reserve critic Rep. Ron Paul is in line to take over chairmanship of the House Financial Service Committee's Subcommittee on Domestic Monetary Policy and Technology. This is the subcommittee with direct oversight of the Federal Reserve.
The thought of having some actual oversight of the Fed is apparently making Wall Street and the rest of the banking industry nervous. Recent disclosures of Fed lending to foreign banks and Wall Street did not help the public image of either Wall Street or the Fed. With Congressman Paul pushing for a full audit of the Fed, it is likely even dirtier secrets of the Fed may come to light.
So where have the Fed and Wall Street turned for protection? According to Bloomberg, the Fed's new protector might be incoming House Speaker John Boehner. Next week, House Republicans meet to select their committee and subcommittee chairs. Bloomberg sources report that, at the request of the major banks, Boehner is looking for avenues to either deny Paul that subcommittee chair or to restrict his ability to oversee the Fed.
While I always expected the House Republicans to eventually revert back to their old ways, I did think they'd at least wait until 2011. I believe this will be a real test of Boehner: Does he choose to rein in Ron Paul or rein in the Federal Reserve?
Joshua Green writes in the Atlantic, after discussing the Austrian economists' views in 1929 on what to do about the not-yet-great depression:
Herbert Hoover’s Treasury secretary, Andrew Mellon, offered similar counsel, famously urging Hoover to “liquidate” and “purge the rottenness out of the system.” But this failed to stop the catastrophe.
That's true. And you know, here's a general rule: Absolutely nothing that a treasury secretary says to a president will affect the real economy if the president ignores his advice and does something else.
Hoover didn't cut federal spending, he doubled it. He established the Reconstruction Finance Corporation. He propped up wages and prices. Indeed, he launched the New Deal. And Green is right: In the face of these policies, Mellon's memos to Hoover failed to stop the catastrophe.
The rest of the article, about Ron Paul as "The Tea Party's Brain," is pretty interesting.
As the fall elections approach, two factions within the congressional GOP have emerged. The first faction, which generally controls the Republican leadership, is short-term oriented and just wants to return the GOP to power in Congress. Riding the wave of voter discontent over the government’s finances is a means to an end -- the end being power.
The second, and considerably smaller faction, is more ideas driven and views the upcoming election as an opportunity to push for substantive governmental reforms. Whereas the “power first faction” offers platitudes about smaller government, the “ideas first faction” isn’t afraid to offer relatively bold suggestions for confronting the federal government’s unsustainable spending.
The ideas first faction is willing to publicly recognize that runaway entitlement spending must be reigned in and offer solutions to address the problem. Representatives Ron Paul, Michelle Bachmann, and Paul Ryan, for example, aren’t shying away from advocating a phase-out of the current Social Security system, which is headed for bankruptcy. In contrast, the power first faction lambasted Democrats for wanting to “cut Medicare” during the recent legislative battle over Obamacare.
In Ryan’s case, he has given the power first faction heartburn by pushing his “Roadmap for America’s Future,” which confronts the entitlement crisis head-on. Although Ryan’s Roadmap is not the ideal from a limited government standpoint, it’s a credible offering with ideas worth discussing. Even though the Ryan plan has received some favorable notice by the mainstream media, the power first faction would probably prefer Paul and his Roadmap went away.
From the Washington Post:
Of the 178 Republicans in the House, 13 have signed on with Ryan as co-sponsors.
Ryan's proposals have created a bind for GOP leaders, who spent much of last year attacking the Democrats' health-care legislation for its measures to trim Medicare costs. House Minority Leader John A. Boehner (R-Ohio) has alternately praised Ryan and emphasized that his ideas are not those of the party.
Ryan has not helped to make it easy for his leaders. He is a loyal Republican, but he is also perhaps the GOP's leading intellectual in Congress and occasionally seems to forget that he is a politician himself.
At a recent appearance touting the Roadmap at the left-leaning Brookings Institution, someone asked Ryan why more conservatives weren't behind his budget plan. “They're talking to their pollsters,” Ryan answered, “and their pollsters are saying, ‘Stay away from this. We're going to win an election.’”
His remarks illustrate the tension among Republicans over their fall agenda. Some strategists say the GOP should focus on attacking the Democrats; others want the party to offer a detailed governing plan.
Ryan’s ideas can be contrasted with those of the House Republican Conference Committee, which is a key power first organization. The HRCC just released a platitude-filled August recess packet for Republican House members to recite in talking to their constituents. Entitled “Treading Boldly,” the cover prominently features Teddy Roosevelt, which should immediately send chills down the spines of anyone believing in limited government.
The document is not “bold.” Take for example the five proposals to “Reduce the Size of Government”:
- Freeze Congress’ Budget. This has populist appeal but does virtually nothing to reduce the size of government. The legislative branch will spend approximately $5.4 billion this year. That’s less than the federal government spends in a day.
- Stop the Expansion of the Federal Bureaucracy. The document notes that federal civilian employment has risen under Obama. We’ve criticized this expansion and advocated freezing or cutting employee compensation to generate some savings, but merely stopping the bureaucracy’s expansion is not bold.
- Eliminate Unnecessary or Duplicative Programs. This proposal is so vacuous that even House Speaker Nancy Pelosi supports it. If the GOP isn’t willing to name a dozen or so substantial “unnecessary” programs to eliminate, then this promise can’t be taken seriously.
- Hold Weekly Votes to Cut Spending. Fine idea. But the House Republican leadership’s new YouCut initiative hasn’t offered up many substantive cuts. For example, offering up Mohair subsidies for cutting would only save $1 million. The GOP’s weekly vote to cut would be more credible if big money farm subsidies, like those for corn or cotton, were put on the table.
- Audit the Government for Ways to Save. Yawn. Isn’t that what the $600 million Government Accountability Office does? The document says “Congress should initiate a review of every federal program and provide strict oversight to uncover and eliminate waste and duplication.” Nothing says “not serious” like calling for the federal government to eliminate “waste.” Waste comes part and parcel with a nearly $4 trillion government that can spend other’s people money on pretty much anything it wants to.
To be fair, there are sound proposals contained in the document such as privatizing Fannie Mae and Freddie Mac. But on the issue of entitlements, the HRCC punts:
The current budget process focuses only on about 40 percent of the budget and just the near-term – usually the next twelve months. We know that we have significant medium and long-term fiscal challenges fueled by the demographic changes in our country. The Government Accountability Office estimates that we have $76 trillion in unfunded liabilities. Rather than simply ignoring these challenges, Congress should reform its budget process to ensure that Congress begins making the decisions that are necessary to update our entitlement programs to secure them for today’s seniors and save them for future generations.
Had the Republicans not swept into office in 1994 on a promise to reduce government only to make it bigger, the power first faction’s “trust us” argument might be more credible. However, given that it already views the GOP’s ideas first faction as skunks at the party, voters who are expecting a new Republican congressional majority to downsize government might not want to hold their breath.