Brink Lindsey’s post, triggered by Jerry Taylor’s controversial critique of conservative talk radio at National Review online, is part of a much‐needed debate about the changes needed to create more fertile soil for limited‐government — a task that is especially difficult given the GOP’s decade‐long embrace of statist economic policy.
But in the spirit of friendly disagreement, the problem is not Rush Limbaugh and Sean Hannity. Talk radio, after all, existed when Republicans were riding high and promoting small government in the 1990s.
The real problem is that today’s GOP politicians are unwilling to even pretend that they believe in limited government. In such an environment, it is hardly a surprise that anti‐tax and anti‐spending voters decide that talk show hosts are de facto national leaders.
This does not mean that Rush Limbaugh is always right or that Sean Hannity never engages in demagoguery. But I suspect if any of us had to be live on the air three hours every day and support our families by attracting an audience, our efforts to be entertaining might result in an occasional mistake — either factually or rhetorically. Heck, when I had to be on the air for just one hour each day in the mid‐1990s for the fledgling conservative television network created by the late Paul Weyrich, I’m sure I had more than my share of errors.
This being said, I agree with Brink’s main points about conservatism being adrift. How come there were no tea parties when Bush was expanding the burden of government? Why didn’t conservative think tanks rebel when Bush increased the power of the federal government? Where were the supposedly conservative members of the House and Senate when Bush was pushing through pork‐filled transportation bills, corrupt farm bills, a no‐bureaucrat‐left‐behind education bill, and a massive entitlement expansion?
I sometimes wonder if the re‐emergence of another Reagan would make a difference, but Brink (and Posner, et al) offer compelling reasons to believe that the problems are much deeper.
In the latest issue of Forbes, Cornell University economist Robert H. Frank is pushing “A Tax Even Libertarians Can Love.” I hope he wasn’t counting on this libertarian’s support.
What he advocates is “replacing the income tax with a progressive tax on spending. ...A family's income minus its savings is its consumption, and that amount minus a large standard deduction -- say, $30,000 a year for a family of four -- would be its taxable consumption. ...Rates would start low, perhaps 20%, then rise gradually with total consumption. ...With savings tax-exempt, top marginal tax rates on consumption would have to be significantly higher than current top rates on income.”
His concept of “significantly higher” includes tax rates of 100-200% on marginal income that isn’t saved. This is about minimizing affluence, not maximizing revenues. There is ample evidence from Emmanuel Saez and others that the amount of reported income drops sharply as marginal tax rates rise above 25-30% (and even less on capital gains).
In his 2007 book, Falling Behind: How Rising Inequality Harms the Middle Class, Frank suggests marginal tax rates of 50% above $220,000 and rising to 200%. Since seniors (like me) commonly finance retirement from past savings, Frank’s tax scheme amounts to rapid confiscation of past savings.
For young people, Frank’s tax can’t possibly encourage savings because it discourages earning any income in the first place. Consumption is, after all, the motive for both earning and saving. The prospect of facing future consumption taxes of 50-200% would surely discourage saving much, because the rewards from invested savings (namely, future consumption) would be subjected to such prohibitive tax brackets. Under this steeply progressive tax on unsaved income, any income exempt from taxes today would be subject to brutal taxes whenever folks wanted to buy anything of value, like a car or house, or to retire on their accumulated savings.
I’ve read conflicting reports on how focused last week’s tea parties were on the anti‐tax and spend message. It does appear there were confused folks who thought the protests were platforms for nationalism, war, and partisan anti‐Obama rants. But I’m not buying the completely dismissive tone taken by some pundits who viewed the events as simply being pro‐GOP rallies fueled by Fox News.
A boisterous crowd in Greenville, SC saw right through Republican Congressman Gresham Barrett’s transparent attempt to curry their favor heading into his 2010 campaign for governor of the Palmetto State:
Frankly, I can’t believe the guy made it through the five minute speech given the level of heckling and booing. Regardless of what one thinks of the crowd’s behavior, they deserve credit for knowing that Congressman Barrett voted for the TARP bailout and thus had no business faking solidarity with them, let alone speaking at the event.
There hasn’t been much here on the Cato blog about the Tea Parties this week, so I thought I should write a bit about them.
A number of sources report around 750 individual events across the country, from small towns to big cities. Hundreds of thousands of people attended.
Many if not the vast majority of these people do not go to protests or even political rallies. My parents, who sent along the pictures below of the large rally in Cincinnati, do not do big crowds or political events. Neither do many of their friends. But they were there.
The general tenor and talk were non‐partisan — people are angry at both political parties for many of the same reasons: spending, growth of government, and the ever‐expanding reach of federal involvement in every aspect of our lives.
It’s not just the first months of the Obama presidency that produced this reaction among normal citizens who have never before come out for political protests. The frustration on display has been building for years under Republican control. The last sad gasp of the Bush administration bailouts and the explosion of previously inconceivable spending under a Democrat‐controlled government have simply pushed many common citizens well past passivity.
It’s not about party. It’s about freedom and responsibility.
These Tea Parties won’t change anything, but they are an ominous sign for our political class and a heartening one for the future. Citizens are drawing strength and encouragement from the events that could translate into voting and political action that brings real change, not just a doubling‐down on failed policy.
Hope springs eternal …
One of the great things about Ron Paul’s presidential campaign was its cross‐ideological appeal. Libertarians, free‐market conservatives, and antiwar young people all found his candidacy appealing. As someone who has despaired for years about the split between free‐marketers and civil libertarians, who ought to be part of the same broad freedom movement, I looked forward to seeing that combination continue. So here’s a suggestion.
President Obama’s frightening tax‐spend‐and‐take‐over‐private‐businesses policies are re‐energizing a free‐enterprise constituency that had been depressed and dispirited by the reality of a Republican government giving us bigger, more expensive government for eight years. Cato’s full‐page newspaper ads against the “stimulus” bill generated much enthusiasm and media discussion. CNBC’s Rick Santelli and South Carolina governor Mark Sanford have become folk heroes for speaking out against Obama’s economic policies. Now there are anti‐tax “tea parties” planned in more than 300 cities. The growing resistance to Obama’s spending agenda is encouraging.
But meanwhile, where’s the antiwar movement? President Obama rose to power on the basis of his early opposition to the Iraq war and his promise to end it. Now he has doubled down on the war in Afghanistan and has promised to keep the war in Iraq going for another 19 months, after which we will have 50,000 American troops in Iraq for as far as the eye can see. If McCain had proposed this sort of minor tweaking of the Bush policy, I think we’d see antiwar rallies in 300 cities. Calling the antiwar movement!
So here’s my suggestion. Some libertarian group — which may or may exist already; the Internet makes it amazingly easy to organize a new group at a moment’s notice — should start a campaign to unite the antitax and antiwar constituencies with a simple message:
Stop the War, Stop the Spending
Or maybe it should be “Stop the Wars, Stop the Spending.” But it would pick up on Ron Paul’s appeal with his TV ads in which he said, “I’m the only presidential candidate who’ll bring our troops home from Iraq immediately and stop wasteful government spending.” Millions of Americans are tired of the war and worried about soaring federal spending. Somebody should give them a rallying point.