Monthly Archives: April 2011

Former Governor Gary Johnson Announces Candidacy For President

The field of candidates for the GOP nomination for President got a little more palatable to libertarians today when former New Mexico Governor Gary Johnson announced his candidacy for President at an event in New Hampshire:

Gary Johnson is running for president.

The former New Mexico governor — who favors legalizing marijuana — on Thursday skipped the step of an exploratory committee, saying bluntly on Twitter: “I am running for president.”

That coincided with a speech in front of the New Hampshire statehouse, which made Johnson the first Republican to launch an official presidential campaign. On his new campaign website, Johnson positions himself as “The People’s President,” laying out libertarian-leaning stances on deficit reduction, education, taxes and drug policy.

The campaign went live with a website almost immediately after Johnson began speaking this morning, and his Issues page will give you an idea of just how different Johnson is from most of the other likely candidates on the GOP side:

Gary’s track record speaks volumes.

He has been an outspoken advocate for efficient government, lower taxes, winning the war on drug abuse, protection of civil liberties, revitalization of the economy and promoting entrepreneurship and privatization.

As Governor of New Mexico, Johnson was known for his common-sense business approach to governing. He eliminated New Mexico’s budget deficit, cut the rate of growth in state government in half and privatized half of the state prisons.

Johnson isn’t likely to be the only libertarian-leaning Republican throwing his hat in the ring. It’s becoming rather apparent that Texas Congressman Ron Paul, who became an unlikely superstar during the 2008 campaign will throw his hat in the ring once again. If that happens, then Paul and Johnson would be essentially competing for the same voters and, as Slate’s David Weigel notes, Johnson would need to find a way to differentiate himself from Paul, who is not viewed very favorably by Republicans outside of his own followers.

Personally, I think Johnson is a better standard bearer for libertarian-leaning Republicans than Ron Paul for a whole host of  reasons. For one thing, he’s younger, which is no small thing when you’re talking about a Presidential campaign. While he was able to hold large rallies on college campuses across the country, Ron Paul didn’t seem to have much enthusiasm in 2008 for the kind of retail politics that you have to engage in when you’re running for President.

The other thing that differentiates Johnson from Paul is that Johnson doesn’t come with any baggage. The topic of Ron Paul’s support from extremist, racist, groups and the long history of the newsletter that he published in between his two stints in Congress were frequently discussed here during the 2008 campaign and they were, I think, one of the reasons that Paul wasn’t taken seriously outside of his energetic circle of supporters, many of whom behaved in a way that quite frankly was an embarrassment to the guy they were supporting. Johnson has none of that. Instead he has a successful business career and eight years as a Republican Governor in a state that, at the time, still leaned Democratic. He vetoed more bills than any other Governor. He came out in favor of marijuana legalization while he was in office. Heck, the guy climbed Mount Everest. That all makes for a compelling media story, all without the weird Ron Paul like baggage.

There’s no doubt that Johnson has an uphill fight ahead of him. His name recognition among likely Republican voters is in the teens, and his name hasn’t been included in most recent polls, although that’s likely to change now. However, he’s got a unique message and a solid record. Keep an eye on this guy.

Here’s the video of today’s announcement:

Tu Quoque

A glib question has made the rounds of right-wing blogs over the last two years, asking “Where has the anti-war movement gone?” Megan McArdle uses the question today to introduce a potential answer.

As for me, I rarely bring up such trivialities, because the response you usually get from a leftist is “yeah, well why didn’t you guys on the right care about deficits and spending when Bush was in office?”

Despite the fact that I did care, the question stands.

Is the left hypocritical to care about ending the war until one of their own is in the White House? Yes. Is the right hypocritical to stay silent about the Bush/Republican spending and now throw a fit when a Democrat is in the White House? Yes. Is it doubly hypocritical to call out your opponents for behavior that you’ve just spent 8 years emulating? Yes. It’s a logical fallacy known as a tu quoque, but the question still stands; pointing out your opponents hypocrisy doesn’t excuse your own.

McArdle quotes a post from an antiwar activist who interviewed an academic researcher who has published on this topic. And I think the point is highly instructive:

“As long as voters remain highly polarized along party lines,” he responded by e-mail, “self-identified Democrats are unlikely to protest against Obama’s policies, even if they disagree with some of them strongly. A sudden end to the era of partisan polarization seems highly unlikely. So I would say that it is a very good bet that Obama will not confront large left-wing demonstrations. Of course, LBJ faced large left-wing demonstrations, but the party system was not polarized back then in the way that it is today.”

The same dynamics apply to the Tea Party: “Our analysis implies that the Tea Party will have a lower degree of organization and success in 2012 than it did in 2010. Because the Republicans won the House and made gains in the Senate, Tea Party activists feel much less threatened today than they did a year ago. So, while the Tea Party will obviously be around in 2012 — and it will likely factor into the Republican presidential contest — our analysis suggests that the Tea Party will not generate the same level of enthusiasm next year as it did last year.”

I disagree with his point about the Tea Party, though, as the “public face” of the government is invariably the Presidency, and that will continue through 2012 — including very contentious negotiations over budget matters and a Senate still in Democratic hands. However, should Obama be voted out of office and Republicans take over government, I believe no level of spending or debt will keep the Tea Party’s activism fully fueled.

I don’t play this “gotcha” game because I understand that it’s all deeply rooted in human tribal tendencies. We divide the world into “us vs. them”, and rationalize away the bad things “our guy” does because there must have been a good reason for it, while impugning the motives of what “their guy” does because he’s obviously got ulterior motives. Libertarians, IMHO, are a bit more naturally attuned to see this behavior for what it is, because almost everyone in the world is a “them” politically to us. However, try criticizing Ron Paul, or the Liberty Dollar, or suggesting that Atlas Shrugged might not be a great and insightful movie*, and watch the knives come out as you become a “them”.

Rather we should accept that this tendency exists, so that we can try to guard against it in our own hearts. The answer to being called out for hypocrisy shouldn’t be to point out that your opponents are also hypocritical as if it’s an excuse — it should be to evaluate your own hypocrisy and stamp it out — even if the means you’ll need to go against “your party” to do so.

What’s The Problem, Revenue Or Spending?

I got into it a bit over at Drum’s place, where commenters are arguing that the S&P is a bunch of GOP plants because of the negative outlook report. Given that I spent some time analyzing historical revenue & spending tables with a calculator to generate one of my comments, I wanted to expand on it here.

The CBO expects GDP to grow from $14.9T in 2011 to $22.5T in 2020, an annual growth rate of over 4%, and expects deficits as a percentage of GDP to return to more sustainable levels slightly north 3%. This, of course, assumes the Medicare “Doc Fix” actually goes into effect, and all the temporary stimulus and the extension of Bush tax rates expire at the end of 2011 and 2012, respectively. I suspect it’s unlikely all three events occur. In addition, they assume that rates of growth in discretionary spending programs track inflation, while discretionary spending growth has averaged well above this (7.5%) over the last decade. (Note — it’s unclear in this data set whether the overall spending numbers, i.e. overall GDP, are inflation-adjusted. I assume so if they are calculating a 4% growth rate, unless they are projecting inflation less than 1.5% per year over the course of the decade.)

The S&P says the US debt outlook is ugly and not expected to improve. The S&P considers 4% growth to be their optimistic scenario, and doesn’t see long-term deficits even optimistically to drop below 4%:

In our baseline macroeconomic scenario of near 3% annual real growth, we expect the general government deficit to decline gradually but remain slightly higher than 6% of GDP in 2013. As a result, net general government debt would reach 84% of GDP by 2013. In our macroeconomic forecast’s optimistic scenario (assuming near 4% annual real growth), the fiscal deficit would fall to 4.6% of GDP by 2013, but the U.S.’s net general government debt would still rise to almost 80% of GDP by 2013. In our pessimistic scenario (a mild, one-year double-dip recession in 2012), the deficit would be 9.1%, while net debt would surpass 90% by 2013. Even in our optimistic scenario, we believe the U.S.’s fiscal profile would be less robust than those of other ‘AAA’ rated sovereigns by 2013.

As an example, I ran some numbers on Real US GDP values from 1969->2010, and calculated a compound annual growth rate for the general economy of around 2.79% (Note — I’m not 100% sure of the validity of my data set there, so if someone in the comments wants to check my work, feel free). I think a baseline of 4% GDP growth is wildly optimistic at this point, unless we experience a technology-based productivity shift on par with that we experienced in the 1990’s. I can’t say I see where that change would come from, but then again if I could see where that change may happen, I’d be spending my time investing in it rather than blogging!

Even with those assumptions, where does spending fall historically? Even at these rosy projections, it never falls under 22% of GDP (on par with the highest spending the country has seen since WWII), and those rosy projections came in January 2010. A year later, in January 2011, the CBO outlook got worse. It now shows spending never falling under 23% of GDP during the decade 2011-2020. Historically, spending has not exceeded 23% of GDP for a single year between 1946 and 2008.

For comparison, the stretch of 1996 to 2007 — a subset in those years being the only period of my lifetime where the US gov’t had run a surplus — government spending never exceeded 20% of GDP. We certainly had a negative GDP shock in 2009, and some stimulus programs to go with it, but that doesn’t explain why government should jump by more than 3% of GDP for the decade following.

Where has revenue been over the last few decades? Well, for the years 1991-2000, during which time we suffered one mild recession followed by the tech bubble, total government revenue averaged 18.75% of GDP. For the years 2001-2010, where we dealt with the tech bubble collapse followed by the subprime bubble and then crash, total government revenue averaged 17.07% of GDP. A sizeable drop, to be sure (the worst spots being 2009 & 2010, where the financial crash slammed revenue below 15% of GDP). But fundamentally not that far out of line with historical precedent.

The CBO projections for revenue — assuming the expiration of all the temporary tax stimulus programs at the end of 2011 and the expiration of Bush tax rates at the end of 2012, have revenue exceeding 20% of GDP for the latter half of the decade — which has only occurred since WWII in the years 1952 and 2000. Their projections show tax revenues sustaining well above historical norms as a percentage of GDP, and assuming Real GDP even somewhat approximates their projections, revenues that will be at inflation-adjusted levels well higher than the nation has ever seen.

So where is the problem, on the revenue side or on the spending side? Well, revenue in both percentage of GDP and in inflation-adjusted dollar amounts will be well above historical norms, assuming “optimistic” revenue numbers for the government (expiration of Bush tax rates). Yet spending will still outclass revenue by over 3% of GDP per year with no end in sight. Even if we rescind the Bush tax cuts, pushing revenue to a level this nation has NEVER seen outside of WWII, we’re still unable to pay for the government our Congress demands, because those demands reach sustained levels never seen in the nation’s history with the exception of WWII.

The S&P is right. We have no plan to get our fiscal house in order, and given that we’re adding onto debt levels (public debt held as a percent of GDP) that are well beyond those of other sovereign AAA-rated bonds, one wonders how they can continue to justify our rating. This is a nightmare scenario unlike this country has probably ever seen, and if it doesn’t get addressed, we may be seeing the end of America as we know it.

Revenue is NOT the problem. We need to fix the spending.

Quote Of The Day

In my post on alternate voting systems, I called the Republicans and Democrats the “beast with two asses”, making an allusion to the old “making the beast with two backs” euphemism for sex. However, I think I’ve got an, ahem, more colorful example that works better:

American democracy is a threesome where the Republicans and Democrats are fingercuffing the American People.

YMMV — Insert “eiffel towering” if it’s your preferred innuendo.

TLP Contributor Stephen Gordon Injured In Car Accident

Via Jason Pye, I’m passing along news that many of you may already be aware of:

Stephen Gordon, a very good friend of mine and fellow libertarian, was involved in a serious car accident on Tuesday evening in his hometown of Hartselle, Alabama. From what I’ve been told, a truck crossed over into his lane and hit him head on, causing his car to flip. In addition to Steve’s lungs collapsing, he suffered broken ribs and a broken ankle. He was airlifted to a hospital in Huntsville and is in critical, but stable condition. The good news is his prognosis is positive.

I know I speak for everyone at The Liberty Papers when I say that we pass along our thoughts and prayers for Steve’s recovery.

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