Category Archives: The Welfare State

Jeb Bush, Greece Crisis, and How to Help the Workers

Jeb Bush Hillary Clinton barb

That week where you’ve obliterated all previous fundraising records and amassed a campaign war chest of $114 million, but get yourself into trouble for saying other people need to work harder.

Oh you don’t have weeks like that?

Jeb Bush did.

…[W]e have to be a lot more productive. Workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and through their productivity gain more income for their families. That’s the only way we are going to get out of this rut that we’re in.

Hillary Clinton Jeb Bush barb

Bush has clarified he did not mean full time workers needed to put in more hours, but that people looking for more work need to be able to find it. That has not stopped the campaign of newly revealed political mastermind Hillary Clinton from sending some well-aimed Twitter barbs Bush’s direction.

I have an idea.

Let’s ask Greece.

Greece is currently in the end stages of a long social experiment in massive, unprofitable jobs programs, political graft, and crony capitalism. In addition to soul-sucking tax rates, Greece also ran up colossal debt during the loose lending years of the pre-2008 boom.

Podesta Bush barbNow Greece’s foreign debt is 177% of its GDP. Its unfunded liabilities are 875%. Its unemployment rate is more than 25%, and its labor participation rate 53%.

Despite taking in 50% of GDP in taxes, its government does not earn enough to fund its basic functions. And because Greece is incapable of paying its debts, no one is particularly interested in lending it any more money.

Its national railroad loses $4 million a day. Its citizens receive free university educations, but there are no jobs waiting for those who graduate. As a result, many of its best and brightest have already fled the country.

Its banks have been closed for two weeks and no one can take more than €60 per day out of the ATMs (which due to a shortage of €20 bills results in an effective limit of €50).

Hey, I have an idea, John Podesta. Let’s just pay them more!

Greeks agree! They rejected by a decisive margin a proposal for paying back all that debt that allowed their free university education, their jobs-program national railroad, their jobs-program schools and their generous early-retirement pension programs.

Tellingly, Greek’s hard left Prime Minister Alexis Tsipras almost immediately turned around and offered the same concessions anyway.

“The ‘No’ in the referendum appears to be turning into a ‘Yes’ from Tsipras,” Commerzbank analyst Markus Koch said.

Even Tsipras has seen the writing on the wall, glimpsed the final stages of a national government that has run out of other people’s money.

What does a government do when it doesn’t “earn” enough (in taxes) to fund its basic functions, much less make payments against its overwhelming debt, and cannot find new lenders to keep that financial house of cards standing?

Not work more hours! That would be mean.

Jeb Bush mean.

Well, Greece could just default. Of course, it won’t get any more loans after that, so it would have to live within its means: only spend what its citizens can afford to pay in taxes.

That’s mean too!

They could go off the Euro and print as much as their own currency as they want. At least one economist has argued that periphery Euro-nations like Greece have been harmed by the monetary policies of the European Central Bank, and that non-Eurozone nations able to set their own monetary policies fared better during the financial crises that began in 2008.

Moving to the drachma, however, is not without its difficulties. The drachma will fall in value against the euro. The more drachmas “printed” to service the debt, the more its will fall. Greece will still face the problem of wary lenders and having to live within its means.

Printing currency to service debt or grow an economy has limitations.

Perhaps Greeks could raise taxes. On the rich, natch.

But Greeks already face punishing tax rates. In addition to paying 22-45% in income taxes and another 44% in payroll taxes, they also pay a 23% VAT.

Why even look for a job?

It turns out Bush v.3.0 might be onto something.

His focus on “hours” was regrettable only because over the long run, advances in technology, innovation and specialization should theoretically allow increases in labor outputs without corresponding increases in hours worked. But he was right that the only way to increase the wealth of a nation is to increase the outputs of labor.

Simply infusing money into a system is not sufficient.

Don’t believe it? Imagine sitting on a virgin planet with all of Earth’s gold in the cargo hold of your space ship. Or being castaway on an uninhabited island with a duffle bag full of bank notes.

Are you rich?

It is not currency that makes people wealthy, but the outputs of labor that can be purchased with that currency. Increasing the available currency relative to the outputs of labor only precipitates a rise in prices (while real wages lag).

So what would it look like for the Greeks to be more productive? Half-clad single mothers chained in mines as sweat drips down their faces and IMF overlords crack whips over their heads? Children toiling in sweat shops as flies buzz around their demoralized brows?

No.

It means getting rid of the entrenched bureaucracy, bloated government, and corrupt police and political regimes that keep investors from making investments that result in jobs that allow people to work more hours. It means lowering the effective 90% tax rate individuals pay so that working those hours is remunerative. It means fewer cartels and licensing requirements that keep would-be entrepreneur sidelined leaving no jobs for all those free university graduates. It means getting rid of the minimum wage and price controls that prevent the economy from responding to supply and demand.

I’m not sure the Greeks have the political will for any of the foregoing, or whether the ECB/IMF negotiators have the imagination to focus on the necessary fundamental reforms to the Greek economy. Without them though, there is no way out of the morass. More loans in the lean years cannot help a country that overspends in the fat years.

Interestingly, even as the Eurozone debates Greece’s future, here across the pond, the national campaign spokesperson for Ted Cruz also took a swipe at Jeb Bush:

“It would seem to me that Gov[ernor] Bush would want to avoid the kind of comments that led voters to believe that Governor Romney was out of touch with the economic struggles many Americans are facing. The problem is not that Americans aren’t working hard enough. It is that the Washington cartel of career politicians, special interests and lobbyists have rigged the game against them.”

Paging the Syriza party, paging party of Syriza.

The Greeks don’t need higher taxes, more austerity or more bailouts. What they need is a functioning economy.

Sarah Baker is a libertarian, attorney and writer. She lives in Montana with her daughter and a house full of pets.

Sorry To Disappoint, But Getting Government Out Of Marriage Is A Fantasy

marriage.p

In the wake of the Supreme Court’s decision making gay marriage legal in all 50 states, the rally cry of many libertarians and conservatives is to get government out of marriage. Presidential candidate and Kentucky Senator Rand Paul wrote an op-ed suggesting just that. While that’s a tempting proposition, it’s probably not possible without a major overhaul of everything from government benefits to nearly the entire civil and family legal code.

Let’s start on the Federal level. The Christian Science Monitor had an article that describes all the various benefits and rights that are granted as a result of marital status.

The sheer volume of benefits offered to married Americans may make it difficult for the United States to disentangle itself from the “marriage business.” In the US, there are 1,138 benefits, rights and protections granted under legal marital status, based on federal law, according to the Human Rights Campaign. Benefits of marriage extend to areas of Social Security, tax law, immigration, employee benefits for federal workers, and health coverage to name a few.

Unless we repeal or modify every single one of these programs and rights, simply eliminating marriage will create new legal nightmares.

Jason Kuznicki of the Cato Institute found that while decoupling the Federal tax code from marriage is a good idea, there are many aspects of marriage related law that serve a valuable function in a free society. Among those are:

  • Ability to sponsor spouses for immigration visas.
  • The presumption of legitimacy that make child custody matters much easier for married couples.

When you look at the state and local level, the argument for “getting government out of marriage” falls apart even more. Here are just some of the other benefits and rights that marriage provides:

  • Spousal immunity from giving testimony against each other.
  • Enrollment on a spouse’s insurance plan and other benefits.
  • Automatic right of visitation in a hospital or the right to make medical decisions as next of kin.
  • Can be held responsible for spouse’s debt.
  • Right of automatic inheritance if spouse dies.
  • The right to file joint petitions for adoption.

To get “government out of marriage” is a fantasy because it takes away an efficient way to handle civil and family matters. However, there is an alternative that libertarians and conservatives can support, which is a separation of civil and religious marriage. All references to “marriage” in the law can and should be replaced with “civil marriage.”

For legal purposes, only a civil marriage is required to access the spousal benefits and rights. That is granted by a marriage license issued by state governments and all that is simply signing a piece of paper and having it signed off on. All the state is doing is recording the marriage. It is not passing judgment on the wisdom of the ceremony. If they want an actual ceremony, they can pay more money for one.

A religious marriage is simply what it sounds like, a marriage performed by a minister or clergy and not merely signed off on by a bureaucrat. Those could be done by combining the religious ceremony and the minister signs off on it, just as done today or it can be done outside the religious ceremony.

Since it is impossible to “get government out of marriage”, libertarians and conservatives should concentrate on separating civil marriage from religious marriage.

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at The Hayride.com and Rare. You can also find me over at the R Street Institute.

Donald Trump: Corporatist Bully (Re-post)

I originally wrote the following post in the very early days of the 2012 presidential campaign. At the time, Donald Trump was threatening to enter the race but decided not to do so. A little over four years later, Trump has decided to run in an already very crowded 2016 Republican primary. I have friends and family members who are intrigued (who ought to know better) with the Donald. The reason I decided to re-publish this post is to remind readers why a President Donald Trump would be no friend of limited government or liberty.

I do not like Donald Trump. I don’t dislike him because of his wealth; he probably earned most of his wealth honestly. Some dislike Trump because he is a self promoter. I don’t dislike Trump for this reason either. Many successful individuals are great at self promotion and developing a successful brand (a very good attribute to have to have a successful political campaign).

No, the reason I really dislike Donald Trump – even putting aside his becoming the new face of the Birther movement in recent weeks, his support of the auto bailouts, raising taxes, his anti-free trade proposal that would place a 25% tariff on all Chinese products, and his support for single payer universal healthcare – is quite simply that he is a corporatist bully.

For those who don’t quite understand the difference between a capitalist and a corporatist, I highly encourage you to read Brad’s post “Mercantilism, Fascism, Corporatism — And Capitalism.” This distinction is an important one. Donald Trump is the poster child for what many on the Left as a greedy capitalist; a caricature of everything that is wrong with capitalism as preached by the Ralph Naders and Michael Moores of the world.

But those of us who know better know that Donald Trump isn’t a capitalist at all but a corporatist. Trump doesn’t try to work within a framework of a free market as a true capitalist would, but like far too many businessmen, he uses his wealth and influence to encourage the government to work on his behalf to his advantage (and at the expense of anyone else who would dare get in his way).

In the early 1990’s, an elderly widow by the name of Vera Coking was in the way. Coking’s home that she had lived in for 30 years was on a plot of land that the Donald coveted. The Donald wanted the property so he could add a limousine parking area to one of his Atlantic City casinos. When Coking turned down his $1 million offer to buy the property, the Donald decided to enlist the help of his goons on the New Jersey Casino Reinvestment Authority. In 1994, these government thugs filed a lawsuit to take Coking’s property for $251,000 and gave her 90 days to leave her property (if she were to stay beyond the 90 days, men in uniforms with guns would forcibly remove her from her home).

Fortunately, Coking’s case gained enough media publicity to gain the attention and help of The Institute for Justice (think a more libertarian ACLU with a focus on property rights). With the IJ’s help, Coking was able to keep her property. In 1998, a judge made a decision that turned out to be final finding that the Donald’s limousine parking area was not a “public use.”

John Stossel confronted the Donald about his failed attempts to take the widow’s home away; he reprinted this exchange in his book Give Me A Break on pages 152 and 153:

Donald Trump: Do you want to live in a city where you can’t build roads or highways or have access to hospitals? Condemnation is a necessary evil.

John Stossel: But we’re not talking about a hospital. This is a building a rich guy finds ugly.

Donald Trump: You’re talking about at the tip of this city, lies a little group of terrible, terrible tenements – just terrible stuff, tenement housing.

John Stossel: So what!

Donald Trump: So what?…Atlantic City does a lot less business, and senior citizens get a lot less money and a lot less taxes and a lot less this and that.

Earlier in the book (page 25) Stossel gives his impressions of this confrontational interview:

Donald Trump was offended when I called him a bully for trying to force an old lady out of her house to make more room for his Atlantic City casino. After the interview, the producer stayed behind to pack up our equipment. Trump came back into the room, puffed himself up, and started blustering, “Nobody talks to me that way!”

Well, someone should.

Had this case taken place after Kelo, the Donald may well have prevailed. In the wake of the Kelo decision, Neil Cavuto interviewed the Donald on Fox News (7/19/05) to get his reaction.

Trump:

I happen to agree with [the Kelo decision] 100 percent, not that I would want to use it. But the fact is, if you have a person living in an area that’s not even necessarily a good area, and government, whether it’s local or whatever, government wants to build a tremendous economic development, where a lot of people are going to be put to work and make area that’s not good into a good area, and move the person that’s living there into a better place — now, I know it might not be their choice — but move the person to a better place and yet create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Donald Trump is not one who respects property rights (other than his own). “Tremendous economic development” and “jobs” are great reasons to employ the full police power of government to take away someone’s property in the Donald’s world view.

I shudder to think of what a Donald Trump presidency would look like. Imagine the Donald with control of our CIA and our military. The Donald doesn’t have any problem using force to get what the Donald wants.

Now consider President Trump with a vacancy on the U.S. Supreme Court. What sort of Justice would he appoint? Most likely one who would view Kelo quite favorably.

This bully, Donald Trump is the guy who is polling second place in some early Republican primary polls? Wake the hell up Republicans!

Misunderstanding Law, Government, and Society

GovernmentIsForceMost people… At least most people in modern western democracies… Seem to have a fundamental and unconscious assumption about the nature of law and government, that goes something like this:

 

 

 

Law and government, are or should be, the expression of the will of the majority, for the purpose of making collective decisions, taking collective actions, fixing problems and righting wrongs.

If I gave that definition to most people as what government “should” be, or even what it is, I’d guess they would agree.

But that’s not what law and government are at all. In fact, that notion of the nature of law and government, is not only wrong, it is extremely harmful.

What are law and government?

Government, is the instrument of collective delegation of the legitimate initiation and use of force against others.

Law, is the body of rules by which that force is administered and applied.

The only legitimate purpose for which, is to secure and protect the rights of individuals governed by them.

So, what’s the other thing, and why is this a problem?

The other definition, is more properly that of society (as distinct from culture).

Government is NOT Society, and Society, is NOT Government

This conflation of government, and society, is a very serious social and political problem because those who hold it… and I firmly believe it’s a large majority… believe that law and government, should be used for “doing what’s good, and stopping what’s bad”.

They naturally wish to see government do what they think is right, or best, and stop that which they think is wrong, harmful, or wasteful… And not just in areas where force should be applied.

They conflate “legal” with “good” and “illegal” with “bad”, and try to make laws against things which they think are bad, or mandating things which they think are good.

They often even conflate “legal” or “attempting to make legal” with “approving and supporting”, and “dissapproving and opposing” with “illegal” or “attempting to make illegal”.

This is incredibly harmful

We have allowed… even encouraged people… to deeply hold the fundamental notion, that they get to vote on other peoples opinions, choices, and behavior; and if their “side” wins the vote, that it is legitimate to make those things legal or illegal.

It also means that these people automatically and reflexively try to solve personal, moral, social, or societal problems, with government and law, when it is entirely inappropriate, even harmful, to attempt to do so. Most of those problems cannot be solved by the use of force;, or at best can only be solved inefficiently, ineffectively, and while violating the rights of others.

In encouraging this misapprehension, we have in fact made the personal, the political, and the political, the personal.

How do we stop the harm?

We must correct this critical error in peoples fundamental apprehension of law and government.

People need to understand, at the most fundamental level, that government is force, and that law is how that force is directed and administered. No more, no less.

If we don’t correct this misapprehension, then we will continue to simply seesaw back and forth between majoritarian tyrannies, as social changes dictate.

Rights will continue to be violated and abrogated as the opinions of society fluctuate.

The favored, will continue to be privileged over the disfavored at the expense of the disfavored’s rights, until the pendulum swings again and the roles are reversed.

Yes, I realize, that is largely how it has always been… But never has law and government had such a depth and breath, had so great a reach into our personal lives, as it does today, and this unfortunately shows no sign of receding.

The absurdity of this reach… and overreach… is finally becoming apparent to many people, on all ideological “sides”; be it the “war on drugs”, the “war on terror”, privacy and surveillance, or gay marriage and wedding cakes.

So, we have to take action, now

Use this growing awareness of the overreach, to help people understand.

We have to show people these aren’t just outlying excesses. That they result from the way we think of, look at, and attempt to use, government.

We have to get people to understand, that if they can say “there ought to be a law”, and then get a law made banning something that they don’t like; then their worst enemy, can get a law made banning something they love.

We have to return to the notion that fundamental rights matter, and that the only legitimate purpose of law, and government, is to protect those fundamental rights.

Everything else?

That’s up to individuals, and to society as a whole, NOT GOVERNMENT.

Voluntary collective action. If it’s really what people want, then they’ll work for it, without the threat of force. If it’s not really what they want, then we shouldn’t be forcing people to do it.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Yes, There Really Are Two Americas. Look At How Different The South Is

sss4

This year marks the 150th anniversary of the end of the War Between the States. The Northern states, fighting to preserve the Union and (later) to end slavery, defeated the Southern states in a war that resulted in over 600,000 dead.

The war all but ended the concept of state soverignty as the question of secession was decided on the battlefield. The war also gave birth to concept of American nationalism as Americans began to consider themselves as American before being a citizen of their state.

However, America is probably now divided more than it has been in decades. The nation seems to be hopelessly gridlocked politically. Meanwhile, the culture wars are in full swing with social justice warriors going to war against traditionalists and libertarians. There really are two Americas.

What explains the division? I argue that culture and region probably provide the best clues to the division of America.

The Economist had an excellent article earlier this month describing how the South is still culturally different from the rest of the country. Why is that the case?

 

The dividing line is actually religion.

Religion is a better explanation of southern exceptionalism. The civil war divided most of America’s Protestant sects, says Mark Noll of the University of Notre Dame. Both the Presbyterian and Methodist churches split into northern branches, which opposed slavery, and southern branches, which did not. Even after slavery ended, theological divisions persisted. In the north, which saw mass immigration from all over the world in the decades after the war, Protestant churches had to find some accommodation with Jews, Catholics and, eventually, non-believers.

 

 

In the South the share of those born outside America (which was low to begin with) actually fell after the civil war. New migrants moved west or north but rarely south. Because of this, southern churches could hold more traditional views without challenge. Those tented revival meetings that were such a feature of southern Protestantism were not intended to win converts so much as to purify and strengthen beliefs that were already there.

 

 

The Southern Baptist movement, which is strongly associated with the “values voters” who favour the Republicans, has its origins in support for slavery. Southern Baptists have long since updated their views on race, as the many black Southern Baptist pastors attest, but the movement’s social conservatism endures. And southerners are unusually observant: Utah is the only non-southern state where church attendance is as high as in Dixie.

 

 

Southerners are also known for being fiercely individualistic. As the rest of America becomes more secular, it should be no surprise that the region still strongly believes in the Protestant work ethic and tends to be more supportive of limited government. They’re also willing to forgo a large portion of the safety net because religious charities will largely step up and fill the role.

Another interesting thing about Southern culture is how it tends to leave its mark on surrounding cultures. There are reasons why in particular heavily Catholic south Louisiana, pre-dominately Catholic Hispanics in Texas, and the Catholic Cuban-American community in Miami are more conservative than Catholics in New England and the Midwest. Those Southern values of individualism, hard work, personal responsibility and family values have rubbed off on those communities.

Here’s an interesting map from The Economist article.

Courtesy: The Economist

Courtesy: The Economist

A lot of the orange on the map corresponds to the red state/ blue state maps on presidential elections. The more secular states tend to vote Democratic while the more religious states vote Republican. The views on abortion and gay marriage also tend to align with religious viewpoints.

As you can see, America is deeply divided between a more religious and ironically more individualistic South and Midwest and the more secular coasts. Could the differences between these two Americas lead to secession and civil war? Who knows.

Now, I don’t believe you have to be religious to be moral and that all religious people are moral. But I do believe that a free society only survives when it’s populated by a moral people. The purpose of this post is not to pass judgement on anyone’s religious beliefs.

Let me close with something. We have quite a few non-religious and atheist contributors here who believe in free markets and secular values. I value them all and I’m proud to call them friends. I also know they’re the exception, rather than the rule among secularists. Most atheists generally lean to the left and conservative and libertarian atheists tend to be the exception than the norm.

Here’s an exit question: do you think many secularists replace religion with a belief in the state and social justice and that’s why they’re hostile to limited government? Let us know in the comments.

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at The Hayride.com and Rare. You can also find me over at the R Street Institute.
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