Tag: welfare state

Immigration II: On the Substance of the Matter

Responding to my immigration post this morning, my colleagues Dan Griswold and Jason Kuznicki have focused on the single short paragraph that touched on the substance of the matter. (The question before me, posed by Politico Arena, concerned mainly the political implications of the new Arizona law, given the latest Pew Research Center poll on the issue.) I quite agree with both that we’ve never had full control of our southern border (or any border, for that matter), but as Dan has noted elsewhere, when we had a guest-worker program in place, illegal immigration dropped by 95 percent – no small drop. And illegal, not legal, immigration is the issue before us. And Dan is right too that we’ve thrown a lot of enforcement at the problem in recent years, to limited avail, so it’s not true that Congress hasn’t done anything. What it has done, however, hasn’t addressed the real problem, the underlying substantive law, as Dan has often written.

I’m struck, though, by Jason’s unqualified comment that he can’t say he shares my views on immigration.” Really? I did say, I believe, that Congress needs to address the problem, including with a guest-worker program. And I also said that “It hardly needs saying that a welfare state, in the age of terrorism, cannot have open borders.” I can’t imagine anyone disagreeing with that.

Concerning both the welfare state and terrorism, Jason points to “remedies” at the far end of the problem. He writes, for example, that our welfare state is going broke anyway, and “compared to the damage being done by native-born U.S. citizens and their cursedly long lifespans, the immigrants’ overall effects are quite small.” (I won’t take that “cursedly long lifespan” point personally.) True, but in places where the welfare state issues are concentrated, like border-state emergency rooms and schools, that long-term national perspective isn’t the issue. Yes, getting the government out of health care and education might ameliorate those localized problems (that question’s for another day), but we can’t always wait for more remote problems to be solved before we address more immediate ones.

And that goes for Jason’s terrorism point, too. He writes: “Without the black market in drugs, we’d have a lot less to fear from terrorists, particularly on our southern border.” I’m all for legalizing recreational drugs. But I was alluding to Islamic terrorists, not narco-terrorists, when I spoke of getting control of our borders. Legalizing drugs (again, a more remote remedy) might have some effect on the coffers of Islamic terrorists, but it would hardly solve the terrorism problem. As long as that problem exists, we need border control. Let’s remember, for example, that it was an alert border agent who thwarted the would-be LAX bomber.

Getting Serious about Immigration

Today Politico Arena asks:

Does the level of support for Arizona’s  immigration law demonstrate that immigration can be a potent campaign issue in the 2010 midterms?

My response:

Few national issues produce more heat and less light than immigration, as the reaction to Arizona’s recent legislation on the subject demonstrates. And with nearly three-quarters of Americans now saying they approve of allowing police to ask for documents, according to the latest Pew Research Center poll, and the Arizona law’s approval-disapproval rating at nearly 2 to 1, it’s hard to imagine that immigration will not be a factor in the coming elections.

The issues surrounding the immigration debate – criminal, economic, social – are often complex, and not always clear. But the underlying issue is clear: We no longer control our southern border, and Congress seems unable or unwilling to do anything about it. It hardly needs saying that a welfare state, in the age of terrorism, cannot have open borders. If the failure to control is partly a function of our substantive law – the absence of a serious guest-worker program, for example – then that needs to be corrected. But it needs to be done in concert with serious enforcement.

Yet what was President Obama’s response to the Arizona law, which at bottom was a call to Washington to do something? It was to ask the Justice Department to look for any legal problems in the law and to respond accordingly. It was to play the presumed political card, that is, rather than to address the underlying issue, which he’d promised to do during his campaign for the presidency. Well if the Pew numbers are any indication, this “master politician” may have once again, as with ObamaCare, misread his mandate and the public mood. For a growing number of Americans, as recent elections have shown, November can’t come soon enough.

What’s a Libertarian?

In a new episode of Stossel,  Cato’s David Boaz and Jeffrey Miron join a panel of experts to discuss where libertarians stand on a host of major issues facing the nation today.  They tackle libertarian views on war, abortion, the welfare state, gay rights and more.

Watch the videos below for a full re-cap.

The first video covers the so-called culture wars, including gay marriage, abortion and immigration:

More videos after the jump.

In the second video they discuss the role of government in providing aid to the poor:

In the third video, the panelists discuss libertarian views of war. Should the United States leave Afghanistan and Iraq? What should we do about Iran? Watch:

If you’re hungry for more, the segment is a great supplement to David Boaz’s timeless book, Libertarianism: A Primer and Jeffrey Miron’s forthcoming book Libertarianism: From A to Z.

A Post-Health Care Realignment?

From Franklin Delano Roosevelt’s New Deal to Joe Biden’s Big F-ing Deal, progressives have led a consistent and largely successful campaign to expand the size and scope of the federal government. Now, Matt Yglesias suggests, it’s time to take a victory lap and call it a day:

For the past 65-70 years—and especially for the past 30 years since the end of the civil rights argument—American politics has been dominated by controversy over the size and scope of the welfare state. Today, that argument is largely over with liberals having largely won. […] The crux of the matter is that progressive efforts to expand the size of the welfare state are basically done. There are big items still on the progressive agenda. But they don’t really involve substantial new expenditures. Instead, you’re looking at carbon pricing, financial regulatory reform, and immigration reform as the medium-term agenda. Most broadly, questions about how to boost growth, how to deliver public services effectively, and about the appropriate balance of social investment between children and the elderly will take center stage. This will probably lead to some realigning of political coalitions. Liberal proponents of reduced trade barriers and increased immigration flows will likely feel emboldened about pushing that agenda, since the policy environment is getting substantially more redistributive and does much more to mitigate risk. Advocates of things like more and better preschooling are going to find themselves competing for funds primarily with the claims made by seniors.

I’d like to believe this is true, though I can’t say I’m persuaded. It seems at least as likely that, consistent with the historical pattern, the new status quo will simply be redefined as the “center,” and proposals to further augment the welfare state will move from the fringe to the mainstream of opinion on the left.

That said, it’s hardly unheard of for a political victory to yield the kind of medium-term realignment Yglesias is talking about. The end of the Cold War destabilized the Reagan-era conservative coalition by essentially taking off the table a central—and in some cases the only—point of agreement among diverse interest groups. Less dramatically, the passage of welfare reform in the 90s substantially reduced the political salience of welfare policy. The experience of countries like Canada and the United Kingdom, moreover, suggests that if Obamacare isn’t substantially rolled back fairly soon, it’s likely to become a political “given” that both parties take for granted. Libertarians, of course, have long lamented this political dynamic: Government programs create constituencies, and become extraordinarily difficult to cut or eliminate, even if they were highly controversial at their inceptions.

We don’t have to be happy about this pattern, but it is worth thinking about how it might alter the political landscape a few years down the line.  One possibility, as I suggest above, is that it will just shift the mainstream of political discourse to the left. But as libertarians have also long been at pains to point out, the left-right model of politics, with its roots in the seating protocols of the 18th century French assembly, conceals the multidimensional complexity of politics. There’s no intrinsic commonality between, say, “left” positions on taxation, foreign policy, and reproductive rights—the label here doesn’t reflect an underlying ideological coherence so much as the contingent requirements of assembling a viable political coalition at a particular time and place.  If an issue that many members of one coalition considered especially morally urgent is, practically speaking, taken off the table, the shape of the coalitions going forward depends largely on the issues that rise to salience. Libertarians are perhaps especially conscious of this precisely because we tend to take turns being more disgusted with one or another party—usually whichever holds power at a given moment.

The $64,000 question, of course, is what comes next. As 9/11 and the War on Terror reminded us, the central political issues of an era are often dictated by fundamentally unpredictable events. But some of the obvious current candidates are notable for the way they cut across the current partisan divide. In my own wheelhouse—privacy and surveillance issues—Republicans have lately been univocal in their support of expanded powers for the intelligence community, with plenty of help from hawkish Democrats. Given their fondness for invoking the specter of soviet totalitarian states, I’ve hoped that the folks mobilizing under the banner of the Tea Party might begin pushing back on the burgeoning surveillance state. Thus far I’ve hoped in vain, but if that coalition outlasts our current disputes, one can imagine it becoming an issue for them in 2011 as parts of the Patriot Act once again come up for reauthorization, or in 2012 when the FISA Amendments Act is due to sunset. In the past, the same issues have made strange bedfellows of the ACLU and the ACU, of Ron Paul Republicans and FireDogLake Democrats.  Obama has pledged to take up comprehensive immigration reform during his term, and there too significant constituencies within each party fall on opposite sides of the issue.

Further out than that it’s hard to predict. But more generally, the possibility that I find interesting is that—against a background of technologies that have radically reduced the barriers to rapid, fluid, and distributed group formation and mobilization—the protracted health care fight, the economic crisis, and the explosion of federal spending have created an array of potent political communities outside the party-centered coalitions. They’ve already shown they’re capable of surprising alliances—think Jane Hamsher and Grover Norquist.  Suppose Yglesias is at least this far correct: The next set of political battles are likely to be fought along a different value dimension than was health care reform. Precisely because these groups formed outside the party-centered coalitions, and assuming they outlast the controversies that catalyzed their creation, it’s hard to predict which way they’ll move on tomorrow’s controversies. It’s entirely possible that there are latent and dispersed constituencies for policy change outside the bipartisan mainstream who have now, crucially, been connected: Any overlap on orthogonal value dimensions within or between the new groups won’t necessarily be evident until the relevant values are triggered by a high-visibility policy debate.  Still, it’s reason to expect that the next decade of American politics may be even more turbulent and surprising than the last one.

Why Is Obama Trying to Make America More Like Sweden when Swedes Are Trying to Be Less Like Sweden?

In this new video from the Center for Freedom and Prosperity, a Swedish economics student makes three important points.

  1. Sweden became a rich nation in the late 1800s and first half of the 1900s by relying a free markets and small government.
  2.  

  3. Growth deteriorated beginning in the 1970s after the imposition of high tax rates and a big increase in the burden of government spending.
  4. For the last 20 years, Swedish lawmakers have been trying to restore prosperity by lowering tax rates and adopting pro-market policies.

So if Swedes have learned from their mistakes and are now trying to reduce the size and scope of government, why are American politicians determined to repeat those mistakes? This is something to keep in mind with a looming vote on a giant expansion of the welfare state.

Son of the Stimulus

Like the sequel to a horror film, the politicians in Washington just passed another stimulus proposal. Only this time, they’re calling it a “jobs bill” in hopes that a different name will yield a better result.

But if past performance is any indicator of future results, this is bad news for taxpayers. By every possible measure, the first stimulus was a flop. But don’t take my word for it. Instead, look at what the White House said would happen.

The Administration early last year said that doing nothing would mean an unemployment rate of nine percent. Spending $787 billion, they said, was necessary to keep the unemployment rate at eight percent instead.

So what happened? As millions of Americans can painfully attest, the jobless rate actually climbed to 10 percent, a full percentage point higher than Obama claimed it would be if no bill was passed.

The President and his people also are arguing that the so-called stimulus is responsible for two million jobs. Yet according to the Department of Labor, total employment has dropped significantly – by more than three million – since the so-called stimulus was adopted. The White House wants us to believe this sow’s ear is really a silk purse by claiming that the economy actually would have lost more than five million jobs without all the new pork-barrel spending. This is the infamous “jobs saved or created” number. The advantage of this approach is that there are no objective benchmarks. Unemployment could climb to 15 percent, but Obama’s people can always say there would be two million fewer jobs without all the added government spending.

To be fair, this does not mean that Obama’s supposed stimulus caused unemployment to jump to 10 percent. In all likelihood, a big jump in unemployment was probably going to occur regardless of whether politicians squandered another $787 billion. The White House was foolish to make specific predictions that now can be used to discredit the stimulus, but it’s also true that Obama inherited a mess – and that mess seems to be worse than most people thought.

Moreover, it takes time for an Administration to implement changes and impact the economy’s performance. Reagan took office in early 1981 during an economic crisis, for instance, and it took about two years for his policies to rejuvenate the economy. It certainly seems fair to also give Obama time to get the economy moving again.

That being said, there is little reason to expect good results for Obama in the future. Reagan reversed the big-government policies of his predecessor. Obama, by contrast, is continuing Bush’s big-government approach. Heck, the only real difference in their economic policies is that Bush was a borrow-and-spender and Obama is a borrow-and-tax-and-spender.

This raises an interesting question: Since last year’s stimulus was a flop, isn’t the Administration making a big mistake by doing the same thing all over again?

The President’s people actually are being very clever. Recessions don’t last forever. Indeed, the average downturn lasts only about one year. And since the recession began back in late 2007, it’s quite likely that the economic recovery already has begun (the National Bureau of Economic Research is the organization that eventually will announce when the recession officially ended).

So let’s consider the political incentives for the Administration. Last year’s stimulus is seen as a flop. So as the economy recovers this year, it will be difficult for Obama to claim that this was because of a pork-filled spending bill adopted early last year. But with the passing of a supposed jobs bill, that puts them in a position to take credit for a recovery that was already happening anyway.

That may be smart politics, but it’s not good economics. The issue has never been whether the economy would climb out of recession. The real challenge is whether the economy will enjoy good growth once the recovery begins. Unfortunately, the Obama Administration policies of bigger government – combined with the Bush Administration policies of bigger government – will permanently lower the baseline growth of the United States.

If America becomes a big-government welfare state like France, then it’s quite likely that we will suffer from French-style stagnation and lower living standards.

Europe: Either Bismarck or the Euro, but Not Both

The Maastricht Treaty requires countries in the eurozone not to exceed a public debt of 60% of GDP. Well, now almost all of them have an official debt exceeding that ceiling. But the situation is immensely worse because European states also have huge, and largely hidden, unfunded liabilities arising from their pension and health systems. According to a 2009 study by my colleague Jagadeesh Gokhale, the true debt of the 25 European countries is, on average, 434% of GDP. And the treaties that underpin European integration do not say a word about such debt.

Greece’s true debt is 875% of GDP and its current problems are just the first act of the coming fiscal bankruptcy of Europe. In my 2004 essay “Will the Pension Time Bomb Sink the Euro?”, I concluded that Europe would end up facing a critical crossroads: either leave the Euro or abandon the Bismarckian welfare state paradigm. As it turns out, the DNA of the pay-as-you-go system allows for political manipulation and the consequent inflation of pension and health “rights.” This, exacerbated by falling fertility rates and increasing life expectancy, will lead to increasing fiscal deficits, unpayable debt, state insolvency, defaults, covert age wars, and the failure of the Eurozone project.

The welfare state has really become an arbitrary “entitlement state,” where everyone uses the state to rob someone else, and politicians from the right and the left play the transfer game to win elections. This crisis may serve to reveal the true nature and enormous flaws of the welfare state. Sooner or later, Europe will have to dismantle it and move toward a paradigm of personal responsability – that is, a system of personal accounts for pensions, health and unemployment benefits.