“Phosphorus And Freedom”: The Libertarian Fantasy
In the latest Times Magazine, Robert Draper profiled youngish libertarians — roughly speaking, people who combine free-market economics with permissive social views — and asked whether we might be heading for a “libertarian moment.” Well, probably not. Polling suggests that young Americans tend, if anything, to be more supportive of the case for a bigger government than their elders. But I’d like to ask a different question: Is libertarian economics at all realistic?
The answer is no. And the reason can be summed up in one word: phosphorus.
As you’ve probably heard, the City of Toledo recently warned its residents not to drink the water. Why? Contamination from toxic algae blooms in Lake Erie, largely caused by the runoff of phosphorus from farms.
When I read about that, it rang a bell. Last week many Republican heavy hitters spoke at a conference sponsored by the blog Red State — and I remembered an antigovernment rant a few years back from Erick Erickson, the blog’s founder. Mr. Erickson suggested that oppressive government regulation had reached the point where citizens might want to “march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp.” And the source of his rage? A ban on phosphates in dishwasher detergent. After all, why would government officials want to do such a thing?
An aside: The states bordering Lake Erie banned or sharply limited phosphates in detergent long ago, temporarily bringing the lake back from the brink. But farming has so far evaded effective controls, so the lake is dying again, and it will take more government intervention to save it.
The point is that before you rage against unwarranted government interference in your life, you might want to ask why the government is interfering. Often — not always, of course, but far more often than the free-market faithful would have you believe — there is, in fact, a good reason for the government to get involved. Pollution controls are the simplest example, but not unique.
Smart libertarians have always realized that there are problems free markets alone can’t solve — but their alternatives to government tend to be implausible. For example, Milton Friedman famously called for the abolition of the Food and Drug Administration. But in that case, how would consumers know whether their food and drugs were safe? His answer was to rely on tort law. Corporations, he claimed, would have the incentive not to poison people because of the threat of lawsuits.
So, do you believe that would be enough? Really? And, of course, people who denounce big government also tend to call for tort reform and attack trial lawyers.
More commonly, self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is. We’re living in an Ayn Rand novel, they insist. (No, we aren’t.) We have more than a hundred different welfare programs, they tell us, which are wasting vast sums on bureaucracy rather than helping the poor. (No, we don’t, and no, they aren’t.)
I’m often struck, incidentally, by the way antigovernment clichés can trump everyday experience. Talk about the role of government, and you invariably have people saying things along the lines of, “Do you want everything run like the D.M.V.?” Experience varies — but my encounters with New Jersey’s Motor Vehicle Commission have generally been fairly good (better than dealing with insurance or cable companies), and I’m sure many libertarians would, if they were honest, admit that their own D.M.V. dealings weren’t too bad. But they go for the legend, not the fact.
Libertarians also tend to engage in projection. They don’t want to believe that there are problems whose solution requires government action, so they tend to assume that others similarly engage in motivated reasoning to serve their political agenda — that anyone who worries about, say, environmental issues is engaged in scare tactics to further a big-government agenda. Paul Ryan, the chairman of the House Budget Committee, doesn’t just think we’re living out the plot of “Atlas Shrugged”; he asserts that all the fuss over climate change is just “an excuse to grow government.”
As I said at the beginning, you shouldn’t believe talk of a rising libertarian tide; despite America’s growing social liberalism, real power on the right still rests with the traditional alliance between plutocrats and preachers. But libertarian visions of an unregulated economy do play a significant role in political debate, so it’s important to understand that these visions are mirages. Of course some government interventions are unnecessary and unwise. But the idea that we have a vastly bigger and more intrusive government than we need is a foolish fantasy.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 10, 2014
“Short-Term Pain Isn’t A Problem”: How Republicans Are Heightening The Contradictions
Congress is going on recess at the end of this week, and they’ll be doing it without a bill to address the large number of Central American children showing up at the southern border—John Boehner couldn’t even come up with a bill that would pass his house after Ted Cruz convinced House conservatives to oppose it. On that issue, on the Affordable Care Act, and on other issues as well, we may be seeing the rise of a particular strategy on the right—sometimes gripping part of the GOP, and sometimes all of it—that can be traced back to that noted conservative Vladimir Lenin. I speak of “heightening the contradictions,” the idea that you have to intentionally make conditions even more miserable than they are, so the people rise up and cast off the illegitimate rulers and replace them with you and your allies. Then the work of building a paradise can begin.
In the end, the House GOP leadership wanted a bill that contained a small amount of money to actually address the problem, made a policy change Republicans want (expediting deportations of Central American children), and did some things that don’t address the problem at all (like beefing up border security, which is irrelevant since these kids are happily turning themselves in). But the conservatives wanted to attach a provision to the bill that would also undo the Deferred Action for Childhood Arrivals (DACA) program, under which “dreamers” who have been in the U.S. since before 2007 can stay under certain conditions.
As Cruz and his allies knew quite well, while the broader GOP bill faced an uncertain fate in the Senate, a bill that had DACA repeal attached to it had zero chance of passing there. So what was the point? It may be that they were thinking along the same lines as conservative wise man Bill Kristol, who today told Republicans to pass nothing and let Barack Obama take the blame:
If the GOP does nothing, and if Republicans explain that there’s no point acting due to the recalcitrance of the president to deal with the policies that are causing the crisis, the focus will be on the president. Republican incumbents won’t have problematic legislation to defend or questions to answer about what further compromises they’ll make. Republican challengers won’t have to defend or attack GOP legislation. Instead, the focus can be on the president—on his refusal to enforce the immigration law, on the effect of his unwise and arbitrary executive actions in 2012, on his pending rash and illegal further executive acts in 2014, and on his refusal to deal with the real legal and policy problems causing the border crisis.
Hooray! Sure, the crisis that they’re allegedly so angry about would continue unabated. But what’s that next to a little political difficulty for Barack Obama?
Something quite similar is happening on the Affordable Care Act. The phrase you now hear from everyone on the right is that the law will “collapse under its own weight,” which is a way of saying that even though there’s been nothing but good news lately about how the law is going, it’s so awful that it will inevitably cause such horrible suffering that everyone will come to agree with us that it must be repealed. “I think it’s going to collapse under its own weight in time,” says Paul Ryan. “Obamacare will collapse under its own weight,” writes Phil Gramm in the Wall Street Journal. “Eventually, all this is going to collapse around them,” says Rep. Marsha Blackburn about the law.
That “collapse” is a fantasy that will never happen, but let’s take them at their word when they say it will. While they never get specific about what the collapse will look like, by definition it would be disastrous for millions of Americans. Would they lose their insurance coverage, or be unable to get treatment for serious medical conditions? It would have to be something like that to constitute a “collapse.” And the Republican position isn’t, “This collapse is coming, so we’d better work hard to make sure it doesn’t and insulate vulnerable Americans from its effects.” Instead, their position is, “This collapse is coming, so we’ll just wait until the nightmare of suffering and death plays itself out, after which we’ll be there to offer our as-yet-undetermined health care alternative.”
The Halbig lawsuit that Republicans are all guffawing about was nothing if not an effort to heighten the contradictions and accelerate the collapse. If it succeeds, insurance subsidies will be taken away from Americans in 36 states, making coverage unaffordable for millions. Republicans won’t say explicitly that this is the outcome they desire, but it’s the only reason to file the lawsuit in the first place. And of course, if the disaster of those millions losing coverage was something Republicans wanted to forestall, they could do it in an afternoon. Just pass a short bill making clear that subsidies apply in every state, and the problem would be solved. But that, of course, wouldn’t heighten the contradictions.
This idea has its limits—for instance, Congress is probably going to pass some short-term fix for the highway trust fund before tomorrow. But that’s because it would be harder for Republicans to escape blame for the consequences when all those construction projects start shutting down. If there’s any way at all for Obama can take the fall on an issue, they’ll do it.
To be sure, there is a certain logic at work here. Like every political party, today’s Republicans believe that if they were in complete control, their preferred policies would be so glorious and work so well that the total of suffering in the country would be reduced to microscopic levels. So some increased suffering in the short term is tolerable if it helps us get closer to that future nirvana. That’s of some reassurance, right?
By: Paul Waldman, Contributing Editor, The American Prospect, July 31, 2014
“Beliefs, Facts And Money”: Conservative Delusions About Inflation
On Sunday The Times published an article by the political scientist Brendan Nyhan about a troubling aspect of the current American scene — the stark partisan divide over issues that should be simply factual, like whether the planet is warming or evolution happened. It’s common to attribute such divisions to ignorance, but as Mr. Nyhan points out, the divide is actually worse among those who are seemingly better informed about the issues.
The problem, in other words, isn’t ignorance; it’s wishful thinking. Confronted with a conflict between evidence and what they want to believe for political and/or religious reasons, many people reject the evidence. And knowing more about the issues widens the divide, because the well informed have a clearer view of which evidence they need to reject to sustain their belief system.
As you might guess, after reading Mr. Nyhan I found myself thinking about the similar state of affairs when it comes to economics, monetary economics in particular.
Some background: On the eve of the Great Recession, many conservative pundits and commentators — and quite a few economists — had a worldview that combined faith in free markets with disdain for government. Such people were briefly rocked back on their heels by the revelation that the “bubbleheads” who warned about housing were right, and the further revelation that unregulated financial markets are dangerously unstable. But they quickly rallied, declaring that the financial crisis was somehow the fault of liberals — and that the great danger now facing the economy came not from the crisis but from the efforts of policy makers to limit the damage.
Above all, there were many dire warnings about the evils of “printing money.” For example, in May 2009 an editorial in The Wall Street Journal warned that both interest rates and inflation were set to surge “now that Congress and the Federal Reserve have flooded the world with dollars.” In 2010 a virtual Who’s Who of conservative economists and pundits sent an open letter to Ben Bernanke warning that his policies risked “currency debasement and inflation.” Prominent politicians like Representative Paul Ryan joined the chorus.
Reality, however, declined to cooperate. Although the Fed continued on its expansionary course — its balance sheet has grown to more than $4 trillion, up fivefold since the start of the crisis — inflation stayed low. For the most part, the funds the Fed injected into the economy simply piled up either in bank reserves or in cash holdings by individuals — which was exactly what economists on the other side of the divide had predicted would happen.
Needless to say, it’s not the first time a politically appealing economic doctrine has been proved wrong by events. So those who got it wrong went back to the drawing board, right? Hahahahaha.
In fact, hardly any of the people who predicted runaway inflation have acknowledged that they were wrong, and that the error suggests something amiss with their approach. Some have offered lame excuses; some, following in the footsteps of climate-change deniers, have gone down the conspiracy-theory rabbit hole, claiming that we really do have soaring inflation, but the government is lying about the numbers (and by the way, we’re not talking about random bloggers or something; we’re talking about famous Harvard professors.) Mainly, though, the currency-debasement crowd just keeps repeating the same lines, ignoring its utter failure in prognostication.
You might wonder why monetary theory gets treated like evolution or climate change. Isn’t the question of how to manage the money supply a technical issue, not a matter of theological doctrine?
Well, it turns out that money is indeed a kind of theological issue. Many on the right are hostile to any kind of government activism, seeing it as the thin edge of the wedge — if you concede that the Fed can sometimes help the economy by creating “fiat money,” the next thing you know liberals will confiscate your wealth and give it to the 47 percent. Also, let’s not forget that quite a few influential conservatives, including Mr. Ryan, draw their inspiration from Ayn Rand novels in which the gold standard takes on essentially sacred status.
And if you look at the internal dynamics of the Republican Party, it’s obvious that the currency-debasement, return-to-gold faction has been gaining strength even as its predictions keep failing.
Can anything reverse this descent into dogma? A few conservative intellectuals have been trying to persuade their movement to embrace monetary activism, but they’re ever more marginalized. And that’s just what Mr. Nyhan’s article would lead us to expect. When faith — including faith-based economics — meets evidence, evidence doesn’t stand a chance.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 6, 2014
“Fake Political Outrage Is The Real V.A. Scandal”: Voters Should Blame Hypocrites And Deficit Hawks In Washington
Since the Afghanistan war began in 2001, over 2,700 veterans have taken their own lives. Data from the Department of Veterans Affairs showed that in 2010 alone, 22 veterans committed suicide each day — that’s another wounded warrior gone every 65 minutes. Luckily for Army Reserve veteran Kye Hardy of Ashland, Kentucky, who served for a year in Afghanistan’s Helmand Province, none of the soldiers he fought alongside have taken that drastic step yet.
“I was lucky to join a unit of men who knew how to keep younger veteran soldiers safe even after coming home,” Hardy said. “I don’t go a week without calling or receiving a call from someone I deployed with just to chat for a bit.”
Hardy, an E-4 specialist, is diagnosed with muscle damage and potential spinal damage, and qualifies for VA services. However, the years-long backlog has kept him from applying, as he wants those with more serious injuries to get the treatment they’ve been waiting for rather than adding to the backlog. Hardy doesn’t believe politicians’ outrage over the VA backlog is genuine. Rather than the resignation of top VA officials like the recent exit of General Shinseki and a continued top-down bureaucratic structure, Hardy instead wants to see a more community-based, veteran-led approach to VA services.
“Wounded warriors who are on disability for the remainder of their lives oftentimes have serious trouble readjusting to civilian life,” Hardy said. “[They] seem to improve when they’re communicating with other veterans.”
However, the Republicans feigning the most concern for veterans are the ones most at fault for the crisis in veterans’ health care. Paul Ryan, author of three separate GOP-approved budget plans that severely cut VA services, has made no bones about his plans to privatize Medicare and turn it into a voucher system. He’s also called for changes in VA services that would cut off care for 1.3 million vets. Outrage over the VA scandal could also be manipulated by Ryan and his ilk to force a similar privatization over veterans’ health care.
The extreme rightists who control the House of Representatives don’t want to privatize the VA to help veterans – if the Republican majority truly cared about veterans, they wouldn’t have repeatedly voted against bills providing jobs, homes, and health care to veterans and their families. The budget deal that Ryan and Senator Patty Murray approved last year cut veterans’ pensions by $6 billion. The GOP actually wants to see the VA fail to score more political points.
By continuously cutting VA services, the far-right wants to reinforce their anti-government narrative by cementing the idea into people’s heads that government is bloated and inefficient, and that private companies unaccountable to voters should seize control of public assets. This is why GOP leaders in Congress don’t seem to mind that the approval rating of Congress has slipped consistently in the polls – they’re counting on voters to blame the president and his party in the months before the next Congressional elections. They’re also counting on voters to grow increasingly mistrustful of government and public services in general.
When Republicans held the White House between 2000 and 2008, they demanded that everyone stand with the troops that they sent overseas to fight a costly war waged on false premises. As President Bush stated, Americans could either stand with the president and his war or be considered sympathizers with the enemy. But now that troops have left Iraq and are soon to be leaving Afghanistan, veterans coming home with multiple physical and mental health issues have been left by the Republican-led House and a relentlessly-filibustering Senate minority to fend for themselves. It’s similar to the GOP’s belief in fighting for children while they’re still growing fetuses in a womb, but cutting off their Medicaid, WIC, and food stamps once they’re born. They’re pro-war, but anti-vets. They’re pro-life, but anti-children.
The American public must not allow themselves to be fooled by the GOP’s blustering over the VA backlog. It’s certainly a tragedy that 40 vets died while waiting for health care in Phoenix, but instead of blaming overworked and underpaid medical staff and an administration dealing with an uncooperative Congress that’s trying its best to make the government fail the people, voters should blame hypocrites and deficit hawks in Washington who have allowed a longtime crisis to turn into a scandal. When someone runs for office on a platform of cutting government services to pieces, it shouldn’t be a surprise to anyone that government services under their leadership have been cut to pieces.
By: Carl Gibson, The Huffington Post Blog, June 2, 2014; (This article originally appeared on Reader Supported News.)
“The Midterm Manifesto”: Senate Republicans Want The GOP To Make All Sorts Of Promises It Can’t Keep
Senate Republicans may be about to make the same mistake they often do when attempting to outline a platform: proposing policies that are impossible to implement.
Politico reports that a bloc of Senate Republicans, led by Lindsey Graham, “is agitating for party leaders to unveil a policy manifesto” that would explain to voters what the GOP would do if it took the majority in the midterm elections. This is yet another sign that the Republican Party realizes it needs a new political strategy, now that Obamacare has rebounded. A new “Contract With America”—the party’s midterm platform in 1994, on which this 2014 manifesto would be modeled—could prove successful at the polls.
But as a governing strategy, this manifesto will only make legislating more difficult if the GOP takes the Senate. That’s because Republicans have a bad habit of overpromising.
In 2012, Mitt Romney promised a mathematically impossible tax-reform plan to lower all rates by 20 percent and cut the corporate rate, making up the revenue by closing unspecified tax preferences. When House Ways and Means Chairman Dave Camp released his tax reform plan in February, he attempted to cut rates and consolidate the tax code, but struggled to make up the lost revenue, eventually creating a top rate of 35 percent, implementing a bank tax, and taxing a percentage of capital gains as ordinary income. Republicans predictably ran away from Camp’s reasonable plan.
Marco Rubio has proposed reforming the federal government’s antipoverty system. But his plan is mathematically impossible: He proposes increasing benefits for childless workers, keeping them unchanged for everyone else, and not increasing the deficit. He has yet to release legislative language for the plan, but those three goals are irreconcilable.
It’s hard to imagine what Senate Republicans could unite behind that would appeal to most of the party. If tax reform ends up in a Senate Republican policy manifesto, it will only reinforce the impossible Republican standard of drastically lowering rates and eliminating tax preferences to avoid increasing the deficit. This is exactly what Representative Paul Ryan did in his budget this year, where he reiterated his support for two tax brackets with rates at 10 and 25 percent. Camp tried to do that, but came up short. The dual-rate structure simply doesn’t raise enough revenue. As the likely replacement for Camp as chair of Ways and Means, Ryan now has made tax reform very hard to accomplish.
Undoubtedly, the midterm manifesto would propose replacing Obamacare—but replace it with what? Senators Tom Coburn, Richard Burr and Orrin Hatch unveiled the Patient CARE Act in January, which actually had a lot in common with Obamacare. It didn’t earn much support among the GOP for that reason. What plan could Senate Republicans unite behind that does more than just repeal Obamacare?
Will the platform contain a balanced budget amendment, as Newt Gingrich and House Republicans included in their “Contract with America”? Republicans would face stiff Democratic opposition to such an amendment, but the GOP may also have to answer how they would close budget deficits if the amendment somehow became law. They certainly wouldn’t increase revenue. Instead, it would require even steeper spending cuts—$1.2 trillion more than even Paul Ryan envisioned in his budget. The Ryan budget already takes such a huge cut from programs for low-income Americans that it is hard to see how another $1.2 trillion in cuts wouldn’t need to come from defense spending or Social Security. Those are two areas Republicans don’t want to touch.
All this speculation may be moot. Minority Leader Mitch McConnell has yet to offer an opinion on the proposed manifesto, according to Politico, while John Cornyn, the Senate minority whip, argued against it. “Even if we have a good election, President Obama is still going to be president,” Cornyn said. “I don’t think we should be in the business of overpromising.”
If only the party took that advice more often.
By: Danny Vinik, The New Republic, May 27, 2014
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