Topic: Political Philosophy

Fight Moral Panics — With Beer!

In the UK and here at home, brewers have increasingly been producing specialty beers with the alcohol content of wine. Naturally, it’s time for a moral panic:

The new breed of bitters, with their intense flavours and alcohol contents of up to 12 per cent, are the work of young brewing entrepreneurs trying capture the attention — and cash — of lager-guzzling twentysomethings.

Beer writers and aficionados have welcomed the speciality bottles, which can contain 10 times as much hops as a traditional pint, as a necessary revitalisation of a market dominated by corporate giants turning out similar 4 per cent brown bitters.

But alcohol campaigners have complained that drinkers may be unaware of the strength of the new products, a single 330ml bottle of which is enough to make an adult exceed their daily recommended alcohol intake.

In January the Portman Group, the alcohol industry watchdog, ruled the brashest exponent of the movement, BrewDog brewery in Aberdeen, had broken its code on responsible marketing for its Speed Ball beer, named after the cocktail of cocaine and heroin which killed the actor John Belushi, star of The Blues Brothers.

Despite the group rejecting complaints against three of BrewDog’s other beers, Punk IPA, Rip Tide and Hop Rocker, its managing director, James Watt, accused Portman of being “outdated” and “out of touch”. He did, however, concede that his company had been provocative. “We thought we would give them something worth banning us for,” he said.

Good for them.

Note the comically low, and comically named, “recommended daily alcohol intake,” which would apparently forbid splitting a standard bottle of wine with another drinker. (Is there any better way to drink wine?) Incidentally, today’s 750 mL bottle derives from the “fifth,” or fifth of a gallon, which in the good old barrel-chested days of yore may well have been a single-serving portion.

It’s fascinating how the narrative of moral panic just keeps getting recycled, as if journalists only ever had this one idea in their heads. Is it their fault, or is it the watchdog groups? A question worth asking.

Either way, it works like this: Someone does something faux-provocative, often as a marketing stunt (to beer connoisseurs, brews with 12% alcohol are a fine old tradition, not a terrible new menace). But a group of Very Concerned People takes it all quite seriously and issues a worried press release. An interview is set up. The young are always invoked, as are previous moral panics. Anxious stories are written. Entirely fake concerns arise. (Hops, for example, don’t intoxicate, and strong hop flavors incline one to drink less beer, not more.)

If a moral panic keeps up for long enough, the legislators will get called in, because it’s their job to protect us naive ordinary folk from the dangers of the world. Maybe something will be done about it, or maybe not. Either way, the average member of the public goes away worried, which is just what the Very Concerned People want. They feed on worry.

They hope for a perpetual climate of worry, a feeling of unease that will carry over from this issue to the next one and to the one after that. It makes what they do — taking away freedoms — that much easier. It’s our job, as freedom-loving citizens, to deny them this perpetual undercurrent of worry. And if we can do it while drinking beer, then so much the better.

Taxpayer Financing of Campaigns Returns

Taxpayer financing of congressional campaigns has returned.

Yesterday Senators Richard Durbin (D-IL) and Arlen Specter (R-PA) introduced a modified version of their public financing bill first proposed in 2007, now as then called the Fair Elections Now Act (FENA).  The older version included “free media vouchers” and discounted ad rates for television; the new model focuses more on small contributions and matching funds from the federal treasury.

These bills to finance campaigns with government revenue are often introduced in Congress and rarely make any headway, much less pass either chamber.  Their perennial failure is not difficult to understand. Members are interested in campaign finance regulations that make it more difficult for challengers to raise money.  They are not interested in giving candidates federal revenue to run against incumbents. Members are especially unwilling to fund campaigns because the public takes a dim view of  using taxes in this way.

FENA tries to avoid public opposition by creating the appearance that taxpayers do not actually fund this scheme.

As Politico reports:

In the Senate version, the public money would come from assessing the country’s largest government contractors with a small surcharge… In the House, the money would come from the sale of broadcast spectrum.

But the question should be asked: if public financing of campaigns will actually achieve all the great things claimed by its proponents, shouldn’t the public be asked to pay the bill? After all, the public can expect to receive the promised benefits. Why should the bill be financed by government contractors and the sale of public assets?

We know the answer to these questions. Durbin and Specter have to obscure the role of taxes in these schemes because the public would oppose the bill if taxpayers were on the hook for the funding. Yet the senators obscure rather than eliminate the role of the taxpayer who will have to pay higher levies to fund more expensive government contracts or to replace the money that might have been obtained from the sale of the spectrum.  Once the FENA lunch turns out not to be free, will voters feel like paying the tab?

The rationale for the new program also merits attention. In the past, advocates of taxpayer financing argued that private financing of campaigns corrupted representation, policymaking, and the general political culture.  Replacing private contributions with public financing would, it was claimed, remove private interests and end corruption.  That rationale appealed to most of the supporters of  public financing; they tend toward the left politically and had little trouble believing the Republicans running Congress – all of them – were corrupt.  But 2006 brought the Democrats back to power, and general claims of corruption no longer fit the background assumptions of both powerful legislators and supporters of public financing. So we now hear little about corruption and a lot about how FENA will free up legislators to “tend to the people’s business.”

Will “tending to the people’s business” be enough to convince Americans to spend tax dollars funding congressional campaigns at a time of record public sector deficits brought about by reckless spending on bailouts and much else?

The question answers itself.

How Progressive Are You?

I’m two weeks late coming to this, but the “Democratic Wing of the Democratic Party” Obama Administration Farm Team Center for American Progress has developed a quiz aiming to answer the question, “How Progressive Are You?“  The quiz asks you to rank, on a 10-point scale, how much you agree with 40 different statements.  Now, I won’t quibble here with the misuse of the word “progressive” – having debased the term “liberal” (which in any other country pretty much means what Cato supports), the Left moves on to its next target – but the quiz highlights the false dichotomy between “progressive” and “conservative.” 

The fallacy of this linear political spectrum forces people to wring their hands and call themselves “socially liberal, fiscally conservative” – does anyone call themselves “fiscally liberal” even if they are? – or “moderate” (no firm views on anything, huh?) or anything else that adds no descriptive meaning to a political discussion.  Where do you put a Jim Webb?  A Reagan Democrat?  A Ross Perot voter?  A gay Republican?  A deficit hawk versus a supply-sider?  Let alone Crunchy Cons, Purple Americans, Wal-Mart Republicans, South Park Conservatives, NASCAR dads, soccer moms, and, oh yes, libertarians. 

And the statements the quiz asks you to evaluate are just weird.  I mean, yes, “Lower taxes are generally a good thing” (I paraphrase) gets you somewhere, but what does “Talking with rogue nations such as Iran or with state-sponsored terrorist groups is naive and only gives them legitimacy” get you?  Or “America has taken too large a role in solving the world’s problems and should focus more at home”?  What is the “progressive” response to these statements?  The “conservative” one?  I think I know what the Bush response and the Obama response would be to the first one, but how does either fit into any particular ideology? 

The Institute for Humane Studies at least gives you a two-dimensional quiz, so you can see how much government intervention you want in economic and social affairs (the “progressive” view presumably being lots of intervention in the economy, none on social issues).  And IHS poses classical debates in political philosophy rather than thinly veiled leading questions relating to current affairs.  

In any event, when you finish the quiz, it tells you your score and that the average score for Americans is 209.5.  How do they get this number?  A selectively biased survey of people who frequent the CAP website would surely score much higher on the progressive scale.  No, it’s based on a “National Study of Values and Beliefs.”  Well, ok, but, again, if those are the types of questions you ask people – or, even worse, the quiz designers code the survey responses – I’m not sure how much I care about the result.   (Incidentally, the survey reveals that “the potential for true progressive governance is greater than at any point in decades.”  Great, that’s either a banal formulation of the fact that Democrats have retaken the political branches or a self-serving conclusion.  Or both.)

In case anyone cares, I scored 100 out of 400, which makes me “very conservative.”  I suppose that won’t come as a surprise to my “progressive” friends, but then I’m always talking to them about how bad the bailouts/stimuli are for the economy, how we should actually follow the Constitution, etc.  All the folks who over the years have called me a libertine or hedonist, however, will not be amused to learn that I’m actually one of them…

Selective Taxation Is Tyranny

The House of Representatives has passed a 90 percent tax on the bonuses paid to AIG employees, seemingly forgetting President Obama’s admonition “that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment.”

Everybody’s angry. But anger doesn’t make good law. And there are real questions about both the wisdom and the legality of such legislation. Bloggers like Conor Clarke, Megan McArdle, and Eugene Volokh have asked if the bonus tax is legal or constitutional. And thank goodness for bloggers who ask the questions that members of Congress and print journalists seem to ignore!

The bloggers wonder if after-the-fact taxes on specific people violate the constitutional ban on bills of attainder and ex post facto laws. (Ex post facto = after the fact.) Good questions indeed. But they should go further and ask, Are laws like this tyrannical? Ex post facto legislation isn’t just bad because it’s unconstitutional. It’s unconstitutional because it’s bad. (Nate Silver did raise these broader questions, arguing that the bonus tax bill was like the congressional intervention into the Terri Schiavo case: quite possibly legal and constitutional, but “it represented a gross overreach of the chamber’s authority, and ultimately undermined, at least a little bit, the rule of law.”)

Harvard law professor Laurence Tribe tells Conor Clarke, “It would not be terribly difficult to structure a tax, even one that approached a rate of 100%, levied on some or all of the bonuses already handed out (or to be handed out in the future) by AIG and other recipients of federal bailout funds so that the tax would survive bill of attainder clause challenge. …The fact that the individuals subject to the tax in its retroactive application would in principle be readily identifiable would not suffice to doom the tax either from a bill of attainder perspective or from a due process perspective.”

Which led liberal blogger Kevin Drum to this conclusion:

it looks like the answer here is simple: even though the purpose of this tax would pretty clearly be punitive with extreme prejudice, we need to carefully pretend that it’s not.  And we need to make sure the legislative history shows that it’s not (it should be “manifestly regulatory and fiscal” Tribe says).

Considering that the rage of the anti-bonus army is being egged on by New York Post headlines such as “Not So Fast You Greedy Bastards” and “Tax the Damn Bonuses to Hell,” it might be tough to persuade a judge that this was “regulatory and fiscal,” not punitive, legislation.

The rule of law requires that like people be treated alike and that people know what the law is so that they can plan their lives in accord with the law. In this case, a law is being passed to impose taxes on a particular, politically unpopular group. That is a tyrannical abuse of Congress’s powers. And in addition, it is retroactive legislation, changing the law upon which AIG and its employees had relied. As James Madison wrote in Federalist 62, “It will be of little avail to the people, that the laws are made by men of their own choice, if the laws … undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow.”

Selective taxation is tyranny. Ex post facto legislation violates the spirit of the liberal order, even if a particular piece of legislation can be “structured” to pass constitutional muster.

The Stimulus Bill, Rebranded

A while back I noted that the administration had helpfully developed a special symbol to brand its wonderful stimulus program.  The purpose is to ensure that the people will be eternally grateful and thus will reward the president with their votes, er, no, that would be partisan and run contrary to everything the new administration stands for.  The purpose is to educate people about what the government is doing on their behalf.

As one would expect, with a symbol so ridiculous have come some wonderful parodies.  Several focus on what is being done to the taxpayers.  There’s even a funny poster to go along with some other entries.

The strongest defense of individual liberty today is going to come from entrepreneurial activists around the country like these, who have harnessed the power of ridicule, not politicians on Capitol Hill who, after voting for bloated federal budgets for years, now claim to realize that government spending is a bad thing.  The latter are “the summer soldier and sunshine patriot” who Thomas Paine spoke of back in 1776.  It is up to the rest of us to carry the heaviest burden of the battle for liberty.  The the fight is worth it as the price of freedom always has been high.  As Paine noted in “The Crisis”:   “it would be strange indeed if so celestial an article as freedom should not be highly rated.”

Your Apropos-of-Nothing Observation of the Day

Fun with juxtaposed quotes:

Durkheim taught that in religious worship, society adores its own camouflaged image. In a nationalist age, societies worship themselves brazenly and openly, spurning the camouflage.

-Ernest Gellner, Nations and Nationalism (Ithaca, NY: Cornell University Press, 1983), p. 56.

and

Addressing Congress [in 2003], Bush declared that “the course of this war is not known, yet its outcome is certain. Freedom and fear, justice and cruelty, have always been at war, and we know that God is not neutral between them.” A form of religious nationalism permeated the whole address. Bush took words from a hymn, “There’s Power in the Blood,” to refer to the “power, wonder-working power,” of “the goodness and idealism and faith of the American people” — words which in the hymn are used of the lamb, Jesus Christ.

-Anatol Lieven, America Right or Wrong: An Anatomy of American Nationalism (Oxford: Oxford University Press, 2004), p. 128.

Crazy as I thought those days were at the time, the more you think about it, the crazier they seem. You’d think American Christians would have found this sort of thing mindblowingly offensive. Yet, they sort of seem to have dug it.

Nationalism. Powerful stuff.

Time to Think about the Gold Standard?

Back in 2007, presidential candidate Ron Paul generated a lot of talk, especially among libertarians, about monetary policy, the Federal Reserve, and the gold standard. As a longtime believer in sound money, I was surprised to discover how many smart young libertarians thought that talk of the gold standard was nutty. And perhaps more surprised to discover that they thought it was unnecessary now that the problem of central banking had been solved. As two of them wrote when I asked about their objections,

“The gold standard is the solution to no actual problem that is of concern to anyone. I think it’s a mistake to take a relatively professional and independent central bank for granted, but we have one. Inflation is low and predictable. The monetary climate is stable and amenable to savings and investment, etc.”

“What’s the beef with the Fed?  By my estimation, it’s been one of the most effective, restrained government agencies over the last twenty five years.  They’ve dramatically reduced the volatility of the business cycle while achieving low, reasonably constant inflation.” 

Well. How’s that confidence in central banking looking now? I’m reminded of Murray Rothbard’s comment in 1975 about what the era of Vietnam, Watergate, and stagflation had done to trust in government:

Twenty years ago, the historian Cecelia Kenyon, writing of the Anti-Federalist opponents of the adoption of the U.S. Constitution, chided them for being “men of little faith” – little faith, that is, in a strong central government. It is hard to think of anyone having such unexamined faith in government today.

Partly in response to such criticisms of the gold standard, in February 2008 Cato published a paper by Professor Lawrence H. White, “Is the Gold Standard Still the Gold Standard among Monetary Systems?” White argued:

The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration.

In a study covering many decades in a large sample of countries, Federal Reserve Bank economists found that “money growth and inflation are higher” under fiat standards than under gold and silver standards.

A gold standard does not guarantee perfect steadiness in the growth of the money supply, but historical comparison shows that it has provided more moderate and steadier money growth in practice than the present-day alternative, politically empowering a central banking committee to determine growth in the stock of fiat money. From the perspective of limiting money growth appropriately, the gold standard is far from a crazy idea.

And he quoted a devastating line from an essay (p. 104) by Peter Bernholz:

A study of about 30 currencies shows that there has not been a single case of a currency freely manipulated by its government or central bank since 1700 which enjoyed price stability for at least 30 years running.

In February 2008 White’s study didn’t get much attention. Most people still thought the Greenspan-Bernanke Fed was doing a great job, so why talk about alternatives to fiat money? But now, after the crash of 2008 and the growing realization that Dow 14000 was the product of a cheap-money boom that led to the inevitable bust, maybe it’s time to think about the gold standard or other constraints on politicized money creation.