Tuesday, March 31, 2009


Via David Freddoso, an interesting column by Joel Berg, executive director of the New York City Coalition Against Hunger and great beneficiary of government funding, attacking the mechanism of private charity. There's a lot to go over in that column, but let's look at this point (emphasis added):

Second, voluntary private charity is a less equitable way to solve community problems. While many people assume that the rich amass their wealth on their own, the truth is that their business interests are almost always aided by public efforts such as roads, bridges and ports through which they ship their goods or public schools that educate their workforces. Given that even the wealthiest benefit greatly from this modern "public commons," it is wrong to give them unilateral power to decide whether their taxpayer-subsidized donations should go to, say, well-heeled operas or lavish care of pets rather than to organizations that meet more pressing communal needs.

It is fashionable these days to say that "the community," not government, should solve social problems. Yet no nonprofit leader, myself included, was elected by the community as a whole. Elected officials, whether we like them or not, are picked by voting citizens. In America, the government is the most legitimate voice of the entire community.

The bolded paragraph seems somewhat befuddling to me. First of all, as I've mentioned before, there can be something rather troubling about the identification of government and the community. Secondly, Berg makes an telling switch into the rhetoric of collectivist voices. It is far from clear to me that we should only view the "community" as a monolithic entity. A "community" is in fact comprised of a huge array of voices and not only voices but bodies, too. Each individual certainly has the right to speak in his or her own voice on his or her own behalf. Our private, individual voices themselves do much good for the community---as loving parents, friends, artists, teachers, builders, and so forth. They do not achieve their legitimacy (in a true sense) from the government. A society in which the only charity and good works are those of the government is one of either tyranny or bloody anarchy. Our daily kindnesses and acts of good will keep our society and government functioning. Our community has many voices; our nation has many communities. To try to nullify this variety, to rest legitimacy only in the majority of votes, is to begin to undo the underpinnings of a free society and to pervert our senses of charity.

UPDATE: Welcome Protein Wisdom readers! You might also be interested in this post on Arnold Schwarzenegger and the role of principles in politics.

Monday, March 30, 2009

"Progressive" Redistributionist Watch

Matt Yglesias brings out the claws for those nefarious fat cats:
Some people, as I understand it, just don’t think inequality is a problem. But for the egalitarians among us, I’ve never really understood the view that obscene executive compensation is an issue that absolutely positively certainly must only be addressed through the indirect Rube Goldberg-esque method of changing corporate governance rules. What if we had a 95 percent marginal tax rate on income over $10 million? What dire consequences would flow from this? Perhaps a certain outflow of top-flight baseball talent to Japan. But I don’t see this leading to any kind of economic calamity. Producers of certain classes of supply-constrained luxury goods would lose out as their prices go down. But my strong suspicion is that at the end of the day most of the super-rich would ultimately find it a relief to get off the treadmill of status-competition and the not-quite-so-rich would be thrilled to see their betters cut down to size.
An economic policy based on its appeal to cultural resentments---what could go wrong?

Granted, the US has had very high marginal tax rates before (with top federal income taxes reaching 94% during WWII and 91% through much of the 1950s), though changes in the tax code (including rules for exemptions, etc.) may make it a little harder to compare the rates of then to now. But I think we need to be careful about going along with the notion that our economy would be more egalitarian if only our government could intervene to a radical extent. We also need to be wary of the temptation to think that one person will be better off only if another person becomes poorer.

A government with the power to implement complete economic "equality" (defined not as a freedom to pursue wealth but a limitation on wealth) by fiat is a government that, in practice, will prove to be deeply inegalitarian. Concentrating that much power in the hands of a few will lead to radical distortions of the market and significant displays of political corruption. The Soviet Union, for all its limitations on private wealth, was a far less egalitarian place than the United States. One of the reasons for using a "indirect Rube Goldberg-esque method of changing corporate governance rules" is that these rules offer a way of arriving at more egalitarian outcomes through encouraging specific channelings of private, decentralized interests. Regulation rather than dictation can lead to an economic system with more freedom, more productivity, and more equality.

Tuesday, March 17, 2009

2010: Damaged Democratic Governors?

Following on this post by Soren Dayton about Governor Deval Patrick (D) of Massachusetts, who currently enjoys a 28% approval rating (with 48% disapproving), I went to SurveyUSA to check out the approval ratings of other Democratic governors elected in 2006 (many of whom may be up for reelection in 2010). The numbers aren't very promising for them. (Numbers are Approval/Disapproval; astrerisks denote governors who will not be running in 2010)
Chet Culver (IA) 46/47
Jim Doyle (WI) 40/55
David Patterson (NY) 30/66
Bill Richardson* (NM) 41/53
Ted Kulongoski* (OR) 38/52

Meanwhile, a poll in Michigan shows Republican candidates leading the likely Democratic candidate for governor in 2010. Dem. Gov. Ted Strickland of Ohio (facing a 2010 race) still has a healthy approval rating of 56%, but it has fallen 7 points from a month ago.

A number of Republican governor numbers are holding up. Jodi Rell of Connecticutt has a 75% approval rating; Charlie Crist (FL) was, as of a month ago, at 67% approval; Bob Riley (AL), who's term-limited out of office in 2011, stands at a 64% approval rating. Tim Pawlenty of MN, who had a very close election in 2006, still has a net positive approval rating (48-44), but it's below the 50% mark.

While some GOP numbers aren't so good (yes, I'm looking at you, Arnold and Gov. Carcieri [RI]), a lot of Democratic numbers in a variety of states are low and seem to be sinking. If the GOP can recruit some top-notch talent, it has a good chance of picking up some governorships in 2010.

Thursday, March 5, 2009

Cap-and-Trade Policy

The Detroit News slams the Obama administration's cap-and-trade proposal as a "giant economic dagger aimed at the nation's heartland."

President Barack Obama's proposed cap-and-trade system on greenhouse gas emissions is a giant economic dagger aimed at the nation's heartland -- particularly Michigan. It is a multibillion-dollar tax hike on everything that Michigan does, including making things, driving cars and burning coal.

The president is asking for a system of government limits on carbon emissions. The right to emit carbon would be auctioned off to generate revenue for more government spending programs.

The president's budget projects receipts totaling $646 billion through 2019 from the sale of these greenhouse gas permits.

The goal, according to the president's budget outline, is to reduce greenhouse gas emissions such as carbon dioxide to 14 percent below 2005 levels by 2020.

Doing so will drive up the cost of nearly everything and will amount to a major tax increase for American consumers.

Such a tax will hit the Midwest particularly hard, which is why House Minority Leader John A. Boehner, R-Ohio, told the New York Times, "let's just be honest and call it a carbon tax that will increase taxes on all Americans who drive a car, who have a job, who turn on a light switch, pure and simple."

The carbon tax will be paid by energy companies, manufacturers and public utilities, who will pass the cost on to their consumers. Michigan will be especially targeted. It gets 60 percent of its electric power from coal plants, and the state's economy is still reliant on heavy manufacturing such as car and truck assembly and auto parts production.

Michigan will lose as carbon tax money is shifted to states with a greater presence of high-tech and service businesses.

The proposed tax would take effect in 2012 and has the very real potential to throw the nation back into recession, if indeed the expected recovery has arrived by then. It's impossible to raise costs for such basics as manufacturing and energy production by more than half a trillion dollars over a decade and not have the effects felt across the economy.

Not only would many variants of a cap-and-trade program increase government's power to choose economic winners and redistribute wealth---they could also disadvantage US manufacturing. Why would a manufacturing company, facing newly onerous carbon taxes, decide to green its factory when it could merely close up shop and open a new factory in a country such as the People's Republic of China, say, or India where there is no such tax? A poorly designed cap-and-trade system would put another finger on the scale in opposition to US industry.

There seem a few ways of coping with this problem. Here are a few:
  1. Do not have a cap-and-trade policy.
  2. Create various global agreements, which would put binding fees on all nations.
  3. Offer manufacturing rebates to local industries.
  4. Place "carbon tariffs" on imports from countries without a carbon tax system.
  5. Put in place various subsidies/investments so that areas hit hardest by these taxes could transition to new industries.
  6. Have cap-and-trade and do nothing to cope with the industrial fallout.
All of these routes have their own complications. All of these---with the exception of 1---increase government intervention in the economy. 2 seems at the moment to be a very difficult aim for cap-and-trade. 3 opens up a huge can of worms for who would get rebates. 4 would probably run afoul of WTO rules, could risk inspiring a trade war, and may smack too much of "protectionism" for supposed "free-traders." 5 may offer some comfort to more manufacturing-based regions but may not stop certain forms of deindustrialization. 6 would also not help industrialization and would provide no other economic relief, either.

Cap-and-trade and other carbon tax proposals will necessarily involve questions of US trade policy. There is a political opportunity here as well as political peril. At its worst, cap-and-trade could prove to be a massive patronage system for those in power, a destroyer of US industry, a reducer of living standards across the board, an excuse for the invasive government management of our daily lives, a non-entity in terms of environmental protection, and an exercise in ideology that fails to meet the demands of practice.

A party which can prove itself an advocate for a responsible industrial policy could go a long way toward establishing a political base in the Midwest and in other areas. Republicans especially could burnish their middle-class credentials by asking piercing questions about how to balance industrial growth and environmental legislation. The GOP would do well to emphasize the economic dangers of ill-thought carbon proposals. Cap-and-trade could be an area where questions of government intervention in the economy overlap with middle class economic anxieties in a way favorable to Republicans.

Monday, March 2, 2009

Dangerous Elisions

In the midst of his take-down of Rush Limbaugh, Rod Dreher offers an interesting moment of syntax (emphasis mine):
Let me tell you who we conservatives are: We love people. [Applause] When we look out over the United States of America, when we are anywhere, when we see a group of people, such as this or anywhere, we see Americans. We see human beings. We don't see groups. We don't see victims. We don't see people we want to exploit. What we see -- what we see is potential. We do not look out across the country and see the average American, the person that makes this country work. We do not see that person with contempt. We don't think that person doesn't have what it takes. We believe that person can be the best he or she wants to be if certain things are just removed from their path like onerous taxes, regulations and too much government.

This is a comforting lie. It is Rousseau conservatism: the idea that man is born innocent, but corrupted by society, or government. Remove the chains of government, and man will return to his natural, good state, which is one of limitless possibility. This denies two bedrock truths of philosophical conservatism, which are that 1) human nature is fallen, and 2) man must learn to live within limits. A conservatism that is not founded on a conscious recognition of those two truths is a false conservatism, and has a shaky foundation from which to criticize liberal utopianism.

While perhaps there is a trace of utopian sentiment in this passage quoted from Limbaugh, the idea that certain government regulations can stifle individual achievement is hardly a Rousseauian idea. Limbaugh's statement is also hardly one of a radical Rousseauian anarchist. He is not attacking all forms of government but merely "onerous taxes, regulations, and too much government."

Moreover, there is a huge distinction between society and government. Society involves the complex of our daily interactions and habits; government is but a single institution of society. Most (if not all) conservative and all authentically liberal political philosophies depend upon recognizing that distinction between government and society. It is quite possible to criticize the extent of government power and to still acknowledge human limitations. Indeed, it would seem as though an acknowledgment of human limits could very easily align with the support of political and economic liberty. (This alignment was itself one of the principles of the American Founders.)