Tag: liberty

Shifting Gears: The Way Forward

The Trump administration accomplished many good things and many bad things (especially in the trade and foreign policy areas). Trump himself belongs in jail in my opinion. Hopefully, with the new Biden administration we can turn our attention to policy issues and stop calling our policy opponents nasty names. We must state the positive case for why our policy views are more appropriate–why they are better for our country. These are the sorts of public debates that we have been missing for a while and to which we should return.

One of our most fundamental principles is America’s commitment to equal treatment under the law for everyone regardless of race, religion, sexual orientation, or preferred hair style. Equal treatment is extended to everyone whether they or their ancestors came from Asia, Europe, Africa or Ireland (yes, even Ireland). We have never fully measured up to this principle, but it remains, and should remain, the objective to which we continually strive. It means that our accomplishments and “place” in society largely reflect our own talents and efforts. We are a nation of individual liberty. We are free (to a large extent) to make our own decisions. Our policy disputes often concern where to draw the line between what we decide for ourselves and what the government decides for us. My blog last week on our response to Covid-19 provides an example: https://wcoats.blog/2021/03/06/the-unnecessary-fight-over-covid-19/

Equity (equal outcomes) was the fundamental principle of the Soviet Union, though its outcomes fell far short of the principle. Between these extremes of equity (communism/socialism) and equality (equal treatment under the law) is our actual world of governments with more intrusive or less intrusive rules and dictates on our behalf, with broader or narrower social safety nets, etc.  America continues to debate where and how to set these boundary’s, but one of our great strengths, and a source of our broadly shared affluence, is undertaking the debate from the side of (and with the presumption of) self-reliance (with family and friends) and equality under the law.

The distinction between equity and equality is sharply contrasted in the following WSJ oped.

THE  WALL  STREET  JOURNAL.

Friday,  March  5,  2021.

Section A, Page 17, Column 1

‘Equity’ Is a Mandate to Discriminate

The new buzzword tries to hide the aim of throwing out the American principle of equality under the law.

By Charles Lipson


On his first day as president, Joe Biden issued an “Executive Order on Advancing Racial Equity and Support for Underserved Communities.” Mr. Biden’s cabinet nominees must now explain whether this commitment to “equity” means they intend to abolish “equal treatment under law.” Their answers are a confused mess.

Arkansas Sen. Tom Cotton raised the question explicitly in confirmation hearings. Attorney General-designate Merrick Garland responded: “I think discrimination is morally wrong. Absolutely.” Marcia Fudge, slated to run Housing and Urban Development, gave a much different answer. “Just to be clear,” Mr. Cotton asked, “it sounds like racial equity means treating people differently based on their race. Is that correct?”

Ms. Fudge’s responded: “Not based on race, but it could be based on economics, it could be based on the history of discrimination that has existed for a long time.” Ms. Fudge’s candid response tracks that of Kamala Harris’s tweet and video, posted before the election and viewed 6.4 million times: “There’s a big difference between equality and equity.”

Ms. Harris and Ms. Fudge are right. There is a big difference. It’s the difference between equal treatment and equal outcomes. Equality means equal treatment, unbiased competition and impartially judged outcomes. Equity means equal outcomes, achieved if necessary by unequal treatment, biased competition and preferential judging.

Those who push for equity have hidden these crucial differences for a reason. They aren’t merely unpopular; they challenge America’s bedrock principle that people should be treated equally and judged as individuals, not as members of groups.

The demand for equal outcomes contradicts a millennium of Anglo-Saxon law and political evolution. It undermines the Enlightenment principle of equal treatment for individuals of different social rank and religion. America’s Founders drew on those roots when they declared independence, saying it was “self-evident” that “all men are created equal.”

That heritage, along with the lack of a hereditary aristocracy, is why claims for equal treatment are so deeply rooted in U.S. history. It is why radical claims for unequal treatment must be carefully buried in word salads praising equity and social justice.

Hidden, too, are the extensive measures that would be needed to achieve equal outcomes. Only a powerful central government could impose the intensive—and expensive—programs of social intervention, ideological re-education and economic redistribution. Only an intrusive bureaucracy could specify the rules for every business, public institution and civic organization. Those unhappy implications are why advocates of equity are so determined to hide what the term really means.

Americans have demanded that all levels of government stop giving special treatment to the rich and powerful. That is simply a demand for equality. Likewise, they recognize that equal treatment should begin early, such as with adequate funding for K-12 students.

Since the New Deal, most Americans have supported some form of social safety net for the poor and disadvantaged. But this safety net doesn’t demand that out-of-work coal miners receive the same income as those who are working. The debate has always been about how extensive the safety net should be and how long it should last for each recipient. There is broad agreement that no worker should be laid off because of his race, gender or religion. Again, that is a demand for equal treatment.

What we are seeing now is different. It is the claim that the unfair treatment of previous generations or perhaps a disadvantaged childhood entitles one to special consideration today as an adult or young adult. Most Americans, who are both generous and pragmatic, have been willing to extend some of these benefits, at the margins and for limited periods. They don’t want to turn these concessions into large, permanent entitlement programs, giving substantially different treatment to different groups, even if those groups have suffered historical wrongs.

One measure of how unpopular these unequal programs are is how often their proponents need to rename them. “Quotas” were restyled as “affirmative action.” The goal was still to give special benefits to some groups to achieve desired outcomes. Now “affirmative action” has also become toxic, rejected most recently by voters in deep-blue California. Hence, the new name, “equity.”

Instead of making their case openly and honestly, advocates of equity twist and turn to avoid revealing their radical goal of re-engineering society through coercion. If the results fall short, as they inevitably would, the remedy is obvious: more money, more rules and more indoctrination. Why not tell us who will receive these special benefits and for how long? At whose expense? Who will administer these programs? Who will judge whether the outcomes are fair enough? When will it all end?

Since the ultimate goal is achieving equal outcomes, these evasions raise the hardest question of all. Isn’t equity just a new brand name for the oldest program of achieving equal outcomes? Its name is socialism.

Mr. Lipson is a professor emeritus of political science at the University of Chicago, where he founded the Program on International Politics, Economics, and Security.

Socialism as seen by Millennials

“Seventy percent of millennials in a new poll say that they are somewhat or extremely likely to vote for a socialist candidate.” “70-percent-of-millennials-say-theyd-vote-for-a-socialist”  That, and the current lead of Bernie Sanders, a self-proclaimed Socialist, for the Presidential nomination of the Democratic Party, means that those of us who believe that capitalism is the foundation of our freedom and prosperity have a job to do to convince millennials that they are wrong about Socialism.  If Sanders wins the Democratic Party’s nomination, which I doubt, his long history of support for Soviet communism will be marched out by the Republicans. “Bernie Sanders support of communism is a moral failing”  As recently as a few days ago, Sanders was praising Fidel Castro. “Bernie-sanders-didnt-mention-the-dark-side-of-education-in-castros-cuba”  Sanders is not even a registered Democrat. But my concern is that so many millennials (born between 1981 and 1996) and Gen Z’s (born between 1995 and 2015) are attracted to Socialism. We need to convince them that it will not deliver the better society that they think it will.

We need to start with the recognition that these new generations, like all of their predecessors, want to do the “right thing.” “The-search-of-purpose”  They are searching for how best to address the deficiencies of life in America today. While dire poverty has been reduced from over 90% to less than 10% by capitalism, there is still that 10%.  Adult literacy has been at 99% for a few decades but the quality of public school education has been declining.  Only half of elementary school students in California are proficient in English (i.e., performed at grade level). “California-school-test-scores-2019”  And so on. The question is how to address these problems? What should we do to further improve our lives economically and culturally? Should we increase the role of government in directing resources and making our decisions or reduce it or adjust it? Do we need more Socialism or more Capitalism?

In 1919 the “Old Bolsheviks,” Nikolai Bukharin and Evgeny Preobrazhensky, wrote in the widely read The ABC of Communism, that the communist society is “an organized society,” based on a detailed, precisely calculated plan, which includes the “assignment” of labor to the various branches of production.  As for distribution, according to these eminent Bolshevik economists, all products will be delivered to communal warehouses, and the members of society will draw them out in accordance with their self-defined needs.  I urge my young friends to read the fuller account in Ralph Raico’s  “Marxist-dreams-and-soviet-realities”

The theoretical and historical/empirical cases against Socialism are overwhelming, at least to those of us who lived through the cold war and the decline and fall of the Soviet Union in the early 1990’s and the Israeli kibbutzim more gradually in the 1960s through 1980s.  Cuba, North Korea and Venezuela provide contemporary examples.  Sanders and many millennials reject these examples (sort of) as reflecting the bad luck of state capture by bad guys (I am not aware of any bad girl examples). But the centralization of the power to direct businesses and people that is the essence of Socialism, is a natural and powerful magnet for bad guys.  No socialist regime has escaped the opportunities and temptations to favor its friends and relatives with government contracts or protections from the horrors of competition. “Crony capitalism”  Venezuela is a particularly shocking example of the rapid deterioration of one of South America’s wealthiest countries.

Sanders often points to the Scandinavian countries as examples of the softer democratic Socialism he now says he has in mind.  But he is fifty years out of date. The experiment with “democratic socialism” by, for example, Sweden in the 1960s and 70s was a failure and abandoned in recent decades. “Bernie Sanders’s Scandinavian fantasy”

Socialism has failed historically because it lacks incentives (financial rewards) for hard work and the development of better mouse traps, provides incentives for corruption, and is really hard to “get right.”  National Socialism (Nazism) and other versions of socialism involved top down control over many aspects of society.  But the central allocation of resources and decisions about what we may and may not do–central planning–suffers from serious informational challenges even when made by smart and totally honest people. Friedrich Hayek had much to say about the importance of prices in a market economy for providing critical, decentralized information on people’s preferences and thus on the optimal allocation of resources. “The Road to Serfdom”

But we are not likely win over the younger generations to capitalism just on the bases that it has given us standards of material well-being and individual freedom unimaginable several hundred years ago.  We also need, I think, to defend its moral superiority while offering promising remedies to its remaining deficiencies.

The morality of capitalism rests, in my view, in its capacity to give us, and to protect, our ownership of the fruits of our own labor. This means also the freedom to decide how to live.  It is a system in which we bear the primary responsibility for our own decisions and actions and their consequences.  It is a system that flourishes in a culture of trust and mutual caring and thus encourages such values. It is a system that rewards and thus encourages virtuous behavior. The top down, central planning, central control of socialism tends to have the opposite effect.  A common saying in the Soviet Union (USSR), while it still existed, was that “They pretend to pay us, and we pretend to work.”

America was unique in its time (exceptional) in establishing a constitution and government in which the people gave up limited authority to their government to protect their property and liberty, rather than, as with the Magna Carta, the sovereign giving up some of its authority to the people.  See American Exceptionalism.  In the personal freedom this provided and the accompanying responsibilities it imposed, Americans flourished in every sense of the word more than most. Those who fall behind or floundered were not ignored.  It was a country of free and virtuous people and as Thomas Jefferson said at the end of his presidency in 1809: “the sole depository of the sacred fire of freedom and self-government.”[1]  Seymour Martin Lipset in the middle of the 1990s used the concept of this exceptionalism to explain “why the United States is the only industrialized country which does not have a significant socialist movement or Labor party.…”  I would hate to see that change.

Countries differ in the balance of personal freedom and security (safety net, police, army) they seek. But in the most successful ones the provision by the government of security is limited and well targeted to minimize its infringements on personal freedom.  Here are my earlier thoughts on improving the government’s role in and contribution to an orderly free market, capitalist system: “My-political-platform-for-the-nation-2017”

Let me end with a quote from Winston Churchill to drive my point home: “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”  Indeed, Capitalism has its flaws, but Socialism has no success stories that we should strive to emulate. The way to move forward is to repair the flaws in a Capitalistic free market society.

[1] Quoted in Tucker and Hendrickson, Empire of Liberty p 7; see John P. Foley, ed. The Jeffersonian cyclopedia (1900).

In Defense of Vultures

They clean up the mess beside the road that has been left there to rot. It is not a pleasant sight but who can really object to the service these birds perform. Actually, the vultures I want to defend are not the feathered ones but the even uglier, so called, bottom- feeders, who take advantage of asset fire sales.

I am trying to find words to explain the stupidity of the attack on people who swoop in to buy things when their prices are depressed, that will not be insulting to the intelligence of non economist. I think that every one understands that if the demand for something increases its price will go up (or not fall as far). A so-called fire sale is when someone, often a company facing bankruptcy, is forced to liquidate some or all of its assets in order to pay its bills. The forced sale often pushes the price of the asset below its true long run value (to the extent anyone knows what that is). Bottom feeders step in and buy when they think the price has fallen to or below that long run value. If they are right, they will make money in the long run when the price of the asset recovers. Are they doing a bad thing? If we some how could keep them out of the market, what would happen to the price of the asset being sold under duress? It would fall further, of course! If you think that these vultures are exploiting distressed sellers, you are free to offer a higher price.

The attack on Payday lenders, so called because borrowers use an upcoming paycheck as collateral, is a bit more subtle. Interest fees on these emergency loans are very high, as these risky borrowers don’t qualify for normal bank loans. According to the Washington Post “Each loan comes with steep fees. The CFPB found that payday borrowers pay a median $15 in fees for every $100 they borrow, amounting to an annual percentage rate of 391 percent on a median loan of $350.” The new Consumer Financial Protection Bureau (CFPB) has just proposed “sweeping new rules” that will limit their use. As with restrictions on vulture investors (which fortunately have not been proposed by the administration), restricting access to payday loans would force such borrowers to seek out loans with still worse terms or suffer the consequences of no loan. If you think that payday lenders are exploiting their customers, you are free to lend to them at better terms.

However, restrictions on payday loans have a big brother, paternalistic purpose. The argument is that these emergency borrowers can’t be trusted to use the money responsibly. “The agency found that about 80 percent of payday loans are rolled over into a repeat loan, causing fees to pile up for borrowers. Roughly 45 percent of payday customers take out at least four loans in a row.” http://wapo.st/1sPFODl   It is appropriate to take away the freedom of choice from people judged mentally or emotionally incapable of exorcising that judgment in their own best interest. The power to do this is potentially dangerous and should only be used sparingly and with careful judicial guidelines and oversight. Dangerously our government has pushed this boundary far beyond what can be justified in a free society. Big brother has grown fat.

A further step in the direction of ever more intrusive government are the new rules issued by the Obama administration that would require investment advisors to put the interests of their clients above their own. “Trade groups representing businesses, Wall Street firms and other financial professionals joined forces to file a legal challenge against a new rule from the Obama administration that would restrict the advice brokers and advisers can offer to retirement savers…. The groups are attempting to block a rule announced by the Labor Department in April that created a higher standard for the investment advice offered to retirement savers. The new regulations require brokers selling investments for retirement accounts to put their clients’ interest ahead of their own.” http://wapo.st/1TM6gVj

Putting the interests of investors above those of their advisors is a perfectly good standard. It is what I, and most people, expect from their financial advisors. The questionable self-interest of the trade groups opposing it is obvious. It doesn’t follow that every good practice should be made a legal requirement enforced by the government, which is the direction we have been going in recent decades resulting in thousands and thousands of pages of regulations in almost every area of economic activity. Markets tend to adopt good practice on their own.

Investment advisors who give the best advice from their clients point of view (rather than investments that might pay the advisors the highest commissions) are certainly more desirable to investors. The marketing issue is how to know and insure that that is the standard followed by a particular advisor. If such a standard is written into your contract with your investment advisor—something she would surely proudly advertise—you would have the legal basis to sue if that standard were violated.

Private markets don’t have the best solutions to all problems of product quality but they do have the best solutions in an ever-changing technical world for most of them when given the chance.

The Abuse of Civil Forfeiture

The price of liberty is eternal vigilance

We need to repeat this warning twice every day. Today’s example comes from a three-part series in The Washington Post on the use and abuse of civil forfeiture by the police. Our free press is an essential pillar of our liberty.

The police, whose job is to protect us and enforce the law, can catch criminals more easily if they can freely search our private properties (our homes, cars, email, etc). It is more difficult to get away with unwanted crimes in a totalitarian state than in a liberal democracy that respects privacy as an important protection against the abuse of state power. We have wisely chosen not to live in a totalitarian state and have struck a balance between privacy and state/police intrusiveness that favors privacy. This makes it more difficult for the police to find criminals, but reduces the number of innocent citizens falsely accused. This is the way we like it, and we need to remain vigilant to keep it that way.

We also understand the importance of incentives for influencing and motivating behavior. If we want to encourage more of a particular activity, rewarding it financially can be effective. If those who find stolen (or illegally earned) money get to keep some of it, more will be found. That is what bounty hunting was (is) all about. But what if those finding the money are also given the authority to judge its legality? That would constitute a clear-cut conflict of interest. A bounty hunter could increase his financial take by declaring money illegal in questionable cases without due process to protect the innocent.

Our sacred principle of “innocent until proven guilty” is being undermined by the civil forfeiture of private property by police who are allowed to keep part of what they take. “Civil forfeiture is the government power to take property suspected of involvement in a crime. Unlike criminal forfeiture—used to take the ill-gotten gains of criminal activity after a criminal conviction—with civil forfeiture, police can take property without so much as charging the owner with any wrongdoing.” http://www.ij.org/inequitablejustice

“Cash seizures can be made under state or federal civil law. One of the primary ways police departments are able to seize money and share in the proceeds at the federal level is through a long-standing Justice Department civil asset forfeiture program known as Equitable Sharing. Asset forfeiture is an extraordinarily powerful law enforcement tool that allows the government to take cash and property without pressing criminal charges and then requires the owners to prove their possessions were legally acquired.” http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/

The practice of “equitable sharing” encourages police to circumvent state laws on civil forfeiture in order to share in the proceeds of property confiscated under federal law. This financial incentive encourages the police to seize more private property but suffers from an unacceptable conflict of interest. The results, as revealed in The Washington Post’s three article series, can be ugly. We should not be surprised, but we should be indignant.

Here is one of many examples: “Mandrel Stuart, a 35-year-old African American owner of a small barbecue restaurant in Staunton, Va., was stunned when police took $17,550 from him during a stop in 2012 for a minor traffic infraction on Interstate 66 in Fairfax. He rejected a settlement with the government for half of his money and demanded a jury trial. He eventually got his money back but lost his business because he didn’t have the cash to pay his overhead.
“I paid taxes on that money. I worked for that money,” Stuart said. “Why should I give them my money?”” http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/

“Last year, equitable-sharing agreements funneled $600 million to police budgets. Clearly, with the size of the federal Asset Forfeiture Fund exceeding $2 billion in 2013, civil forfeiture is big business for the government.” http://www.washingtonpost.com/opinions/tim-walberg-an-end-to-the-abuse-of-civil-forfeiture/2014/09/04/e7b9d07a-3395-11e4-9e92-0899b306bbea_story.html

“The Post found:
• There have been 61,998 cash seizures made on highways and elsewhere since 9/11 without search warrants or indictments through the Equitable Sharing Program, totaling more than $2.5 billion. State and local authorities kept more than $1.7 billion of that while Justice, Homeland Security and other federal agencies received $800 million. Half of the seizures were below $8,800.
• Only a sixth of the seizures were legally challenged, in part because of the costs of legal action against the government. But in 41 percent of cases — 4,455 — where there was a challenge, the government agreed to return money. The appeals process took more than a year in 40 percent of those cases and often required owners of the cash to sign agreements not to sue police over the seizures.
• Hundreds of state and local departments and drug task forces appear to rely on seized cash, despite a federal ban on the money to pay salaries or otherwise support budgets. The Post found that 298 departments and 210 task forces have seized the equivalent of 20 percent or more of their annual budgets since 2008.

“Since 2001, police have seized $2.5 billion in cash from people who were never charged with a crime.”  http://www.washingtonpost.com/blogs/wonkblog/wp/2014/09/08/civil-asset-forfeitures-more-than-double-under-obama/

This has gone much too far for the health of our Republic.

Keep it limited and keep it simple

The first and second rules of good government

The price of liberty is eternal vigilance. We can never remind ourselves of this fact too often. As I have written many times, government by its very nature is a slippery slope. We need government and we need good and efficient government for a number of things that only governments can provide. But it is in the very nature of government that it naturally expands its scope and power unless prevented from doing so – over and over again. It is also in its very nature that it is relatively inefficient and slow moving because of the need for cumbersome checks and balances. Private enterprises are disciplined by the market (their need to profitably satisfy consumers). Governments are more difficult to monitor and keep honest. But we need them so some (hopefully limited and enumerated things) are properly assigned to government.

Government is especially difficult to keep in check the more it intrudes into activities in and of the private sector. This is a good reason for resisting such extensions in the first place. The repeated cycles of corrupting our tax code with special breaks for special groups provides but one example of the danger. After pretty much cleaning up the income tax in 1986, special interest favors gradually crept back in until now it is again a total mess. Economists continue to debate the best approach to taxation (see my summary: The-principles-of-tax-reform in the Cayman Financial Review July 2013), but they are generally agreed that a broad tax base with low or flat marginal rates is the most neutral (least distorting of the economy), efficient, and fair way to raise the money to pay for what the government does. In short, special tax brakes for specially groups are generally bad (watch a few episodes of the Netflex series House of Cards to get a feel for the problem).

I was brought back to this topic by a recent Washington Post article on proposals by Senator Ron Wyden, the new Chairman of the Senate Finance Committee to restore all kinds of special favors to the tax code, basically ignoring the recent, laudable efforts of the House Ways and Means Committee, lead by Representative David Camp, to remove them and clean up our scandalous income tax law. “Senator to revive array of tax breaks”/2014/03/26/. Once a favor (tax break or subsidy) is extended to a special interest group it has a much stronger interest in defending it than the rest of us (the general tax payers) have in fighting it to take it away.

A few of Wydern’s proposals tell you all you need to know (once again, think House of Cards): “Sen. Ron Wyden (D-Ore.) plans Monday to unveil a proposal to temporarily extend the breaks, which include such popular policies as a credit for corporate research and development, an incentive for commuters who use mass transit and a special deduction for sales tax in states such as Florida and Texas, which do not tax income.

“Democratic aides said Wyden plans to ask the committee to vote separately on some of the more controversial provisions. For instance, senators will be asked whether to revive a much-maligned break to promote development at NASCAR racetracks, as well as a credit for the purchase of electric motorcycles and golf carts that barely survived a 2012 effort to weed out special-interest provisions.

“However, Democratic aides expect the entire list of temporary tax policies — known as “tax extenders” — to emerge intact from the committee, adding nearly $50 billion to this year’s budget deficit.”

Arizona and Religious and Personal Liberty

A successful society balances the interests of individuals and society. In the area of personal liberty and public tolerance, all low hanging fruits (all win – win policies) have been picked. Thus remaining discussions of the best boundary between the sphere of private belief and behavior and social behavior involve trade offs that are more difficult to evaluate. This is illustrated by the recent controversy in Arizona over the bill just vetoed by Arizona Governor Jan Brewer that would have allowed businesses to deny service to gay and lesbian customers on religious grounds.

The point I want to make here (yet again) is that our society functions best when it favors persuasion over coercion (voluntary action over legal compulsion). Should a professional photographer who objects to same sex marriage be required by law to accept business from a same sex couple to photo graph their wedding? My first reaction to this question was why in the world would the couple at issue want to give their business to a bigot. Examples of my earlier discussions of such issues are: https://wcoats.wordpress.com/2013/08/30/liberty-and-the-overly-prescriptive-state/  https://wcoats.wordpress.com/2010/04/18/when-values-clash/

I abhor prejudice of any sort both on moral and on economic efficiency grounds. People should be judged on the basis of factors relevant to the situation. A job applicant should be judged on the basis of whether she has the best qualifications for that particular job, rather than whether she is Irish, Ghanaian, Muslim, Christian or Korean (though if the job is to wait on tables in a Korean restaurant, being Korean might be relevant). I strongly believe that it is more effective to persuade people of this view than to legislate it (just as I think persuading teenagers and others of the dangers of some drugs would be more effective than has been our very costly and damaging War on Drugs). For one thing businesses that express their prejudices in the market place pay a price in the form of less qualified, more expensive employees and/or fewer customers.

I am obviously a bit out of the mainstream on this as I shared Senator Barry Goldwater’s reservations about the 1964 Civil Rights Act’s restrictions on the right of “public” business to choose their customers (especially Title II on public accommodations). I prefer, both for philosophical and pragmatic reasons, the legal approach taken with regard to the Boy Scouts of American. As a “private” organization they are entitled to whatever membership criteria they want. Public discussion and evolving attitudes is gradually leading them to amend their membership requirements, which now allow gay boys to join. This is a better way to bring about that result in my view in our very heterogeneous society.

That said, if we must have laws against discrimination, gays and lesbians surely must be given equal protection under those laws.  E. J. Dionne makes some good points in today’s Post: “Arizona’s anti-gay bill hurts religious people” Washington Post /2014/02/26/

Liberty and the Overly Prescriptive State

Few things reveal a person’s views on liberty more than their attitude toward the right of others to say or do things they disagree with. The First Amendment to the Constitution of the United States protects our right of free speech and assembly, later interpreted to include the right of association. “The NSA Unravels a Civil Rights Era Win”/2013/08/29/ None of these rights is absolute (yelling fire in a theater, etc), but where we as a society draw the line has a great deal to do with how successfully our diverse citizens will live together in harmony and freedom.

The latest example of the imposition of the state into what should be private issues of belief is California’s ban on health practitioners “offering psychotherapy aimed a making gay youth straight.” The U.S. Court of Appeals for the 9th Circuit in San Francisco ruled that the law does not violate the free speech rights of licensed counselors and patients seeking treatment.” “US Court Upholds First in Nation Law Banning Gay to Straight Therapy for Minors”/2013/08/29/

Conversion therapy is a scientifically documented scam, but if its practitioners believe in it, it is not a deliberate fraud (maybe they do and many they don’t). We are freer, and live in greater harmony the more we allow people to pursue and experiment with their own beliefs. This includes things the rest of us might think are silly. Such freedom, when exercised within a strong set of moral values, also tends to move society more quickly to a more virtuous level. The caveat is that in allowing people to live according to their own creed, they must do no real harm to others.  Even the “doing no harm to others” standard is subject to discussion and can moved a bit this way or that – toward more freedom or less. In the case of the California law against conversion therapy, the law was aimed at protecting minors from harm inflicted by such therapy and we have rightly been quicker to protect minors than others. In short, drawing an appropriate line between private rights and state intervention is a serious and not particularly easy undertaking.

Those of you who are lucky enough to be Facebook friends of Jonathan Rauch, author of “Denial” and currently a contributing editor of the National Journal and The Atlantic, and a guest scholar at the Brookings Institute, have access to a very thoughtful discussion of the freedom of conscience, association and speech and equal protection of the law. In comments to one of Jonathan’s postings, Charlotte Allen, Tom Palmer, and Walter Olson, Walt Becker (a pseudonym), David Dalton and others explore the interface between the freedom of association and equal protection of the law in the context of same sex marriage. In such discussions it is critical for those of us who defend the importance and morality of liberty to clearly distinguish what we individually believe is right and good from what is or should be allowed under the law. The law should allow people to make their own stupid mistakes.

In reaction to slavery and Jim Crow laws, which legally discriminated against blacks, America has gone well beyond repealing such legislation and has adopted a range of anti-discrimination laws limiting the ability of “public” businesses to choose their employees and customers. These anti-discrimination laws are now increasingly being extended to GLBTs (Gays, Lesbians, Bisexuals and Transgenders). Personal beliefs and preferences, whether we agree with or respect them or not, thus confront state interference in our personal choices and behavior. Doctors, who do not believe in abortion, are required to perform them. Companies whose owners do not believe in contraception are forced to provide health insurance and condoms to employees wanting them. A New Mexico photographer and baker are sued for refusing to provide their services to a same-sex wedding ceremony.

Equal treatment in the law was put aside for Affirmative Action giving preference to blacks in some cases on what was meant to be a temporary basis until the damage of earlier negative discrimination could be reversed. The Supreme Court has now started to roll back such preferences. In the above Facebook debate, Charlotte, who has trouble accepting marriage equality for same-sex couples, takes a more libertarian position on other areas of state imposed morality when she says “Why can’t we give people the freedom to set the parameters of their own commercial transactions?” The optimal balance shifts over time and I doubt that we have it anyway.

The government, which is often a lagging reflection of public sentiment, has been one of the last to extend equal treatment to same sex couples. Pure profit motive led corporate American to move ahead several decades ago to extend “marriage” benefits to employee partners of whatever sex. They did so in order to attract the best employees without regard to their color, religious beliefs, or sexual orientation. Discrimination has an economic cost.

No church should be required to marry anyone they don’t want to or don’t believe would be consistent with their beliefs. Allowing same-sex couples to receive a marriage license and the legal benefits that come with it from the State, which is surely required by the principle of equal protection of the law, does not and should not obligate any church to do so. I think that the treatment of the Boy Scouts of American set the right example.  As a private club the law allowed them to exclude gay boys from membership if they wanted to. However, evolving social understanding and attitudes and deeper reflection by Boy Scout leaders are slowly leading the Boy Scouts to change this policy. Getting the balance right will never be easy, but I prefer to error on the side of personal freedom rather than government dictated morality.

Are We Becoming A Nation of Cowards?

“No nation can preserve its freedom in the midst of continual warfare.”

James Madison, April 20, 1795

Osama Bin Laden’s vendetta against the United States grew out of his anger over our stationing American troops in his home country of Saudi Arabia. Imagine for a moment what might be his most cost efficient weapons for hurting the U.S.  What might give him the biggest bang for the buck? Shutting 19 American Embassies and related diplomatic facilities in the Middle East for at least a week on the basis of intercepted communications between al-Qaeda leader Ayman al Zawahiri in Pakistan and Nasser al-Wuhayshi, who heads the al-Qaeda franchise in the Arabian peninsula, would be high on the list. Such reactions to intel, which could well be a deliberate planted by clever Arabs, must have the ghost of Bin Laden laughing hysterically (if it is possible to imagine Bin Laden laughing at all).

I still carry in my travel bag a nail clipper missing the little nail file that a Miami airport guard broke off as a potentially dangerous carry on weapon not too long after 9/11. It has taken 12 years for our government (the Orwellian named Department of Homeland Security) to figure out a way for me to board planes without taking out my computer and taking off my belt and shoes. At least the perpetual alert status of code Orange has been dropped.

These are minor inconveniences compared to the cost and danger of the billions and billions of dollars spent by NSA and others to invade our privacy (for our own good, of course) in order to better search for needles in hay stacks that might detect plots to harm us (such as the Boston marathon bombings—Upps). We are assured that these data will never be searched by a rogue bureaucrat looking for dirt on political enemies. We are reassured because our political leaders never lie to us.  For example, when National Intelligence director James Clapper informed a Senate Intelligence Committee last March that the government was not “wittingly” collecting information on millions of Americans, he later justified the lie by saying that it was the least dishonest statement he was comfortable making.

Gregory Johnsen, an expert on Yemen at Princeton, recently noted the unrealistic and dangerous expectations of the American public (at least as our government sees or would like to see them):“Unfortunately the way we in the US have talked about the terror threat as a society AQAP [Al-Qaeda in the Arabian Peninsula] doesn’t have to be particularly good or even successful to constitute a serious threat.  As a society we in the US seem to have a zero-tolerance approach to terrorism instead of weighing its risks against other potential threats.  In such an environment any threat from AQAP could be considered serious.” (reported by Foreign Policy Magazine)

I am not one to see conspiracies everywhere, but this latest scare is a nice distraction for recent revelations of potentially dangerous and at a minimum wastefully expensive government over reaches in the name of keeping us safe (Snowden’s NSA and other revelations). This mornings Washington Post has two op-ed pieces on this subject that you should read. The first by Eugene Robinson, “The New Al-Qaeda Menace” /2013/08/05/, is correct in my view. The second (just below it) by Juan Zarate and Thomas Sanderson,  “Adapting to Terrorism 2.0”,  is down right scary. George Orwell’s big brother could not have made the case better for bigger and more intrusive government for our own good. Are they deliberately trying to destroy our liberties or are they over zealot fools. Probably the latter.

Over the centuries our young men and ladies have risked and often lost their lives to keep us free. How ironic that in the name of keeping us secure our liberties are being increasingly eroded and threatened. It is worth reading a more extensive excerpt from James Madison’s prescient April 20, 1795 “Political Observations” quoted above:

“Of all the enemies of true liberty, war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other.

“War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few.

“In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people.

“The same malignant aspect in republicanism may be traced in the inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and in the degeneracy of manner and of morals, engendered in both.

“No nation can preserve its freedom in the midst of continual warfare.

“War is in fact the true nurse of executive aggrandizement. In war, a physical force is to be created; and it is the executive will, which is to direct it.

“In war, the public treasuries are to be unlocked; and it is the executive hand which is to dispense them.

“In war, the honors and emoluments of office are to be multiplied; and it is the executive patronage under which they are to be enjoyed; and it is the executive brow they are to encircle.

“The strongest passions and most dangerous weaknesses of the human breast; ambition, avarice, vanity, the honorable or venal love of fame, are all in conspiracy against the desire and duty of peace.”

–James Madison, from “Political Observations,” April 20, 1795 in Letters and Other Writings of James Madison, Volume IV, page 491.

Our Unsupportable Empire

Most of you are grudgingly aware that the U.S. government has promised us more than we want to or can easily pay for.  China is no longer willing to fill the gap knowing that we will not be capable of repaying it.  This is on top of the existing national debt from past borrowing to cover the government’s current and past spending in excess of its revenue of $16 trillion, about the same as the United States’ total annual output.  These numbers pale in comparison with the government’s unfunded commitments (those not covered by the revenue expected from existing tax laws and user charges) to future retirees and recipients of medical care (social security, medicare and Medicaid). The present value of the revenue short fall to pay for these future commitments (the government’s unfunded liabilities) is currently around $50 trillion for an astonishing total debt of around $66 trillion, which is larger than the total annual output of the world per year.

Naturally, these promises must be pared back because they can’t be paid for. To some extent a healthy, growing economy will also increase our capacity (lighten the burden) to pay for them but by itself growth will not be enough. This is one, but only one, of the reasons that we also need to reconsider our military promises around the world, while reducing and reorienting our military budget and modestly increasing our diplomatic (State Department) expenditures.

Our promise to provide security to most of the world suffers from the same moral hazard as does an overly generous welfare state.  Incentives matter. When access to welfare is easy and the level of support is generous, more people will choose it over taking a job that doesn’t interest them much.  When President Bill Clinton signed “The Personal Responsibility and Work Opportunity Reconciliation Act of 1996” (PRWORA) on August 22, 1996 (with strong Republican support), he fulfilled his campaign pledge to “end welfare as we have come to know it.” The law ended welfare as an entitlement by introducing tighter conditions for receiving it. Welfare costs dropped following adoption of the law. “A broad consensus now holds that welfare reform was certainly not a disaster–and that it may, in fact, have worked much as its designers had hoped.”[1] While some people remain skeptical, Sweden’s welfare reforms of the last two decades have demonstrated very similar results.[2]

The United States spends more on its military than the next 14 largest military spenders combined (China, Russia, UK, France, Japan, Saudi Arabia, India, Germany, Brazil, Italy, South Korea, Australia, Canada, and Turkey). We are policing/protecting most of the world. This has two negative effects. The first, similar to chronic welfare recipients, is that other nations spend less on their own defense, taking a free ride on the United States’ ability to keep the world safe for everyone else. The second is that by diverting so much of our productive resources into the military, we reduce the resources available for developing and strengthening our economy. It is our powerful economy that underlies our influence in the world as much, if not more, than our military power. Moreover, our military might is made possible by our economic power. So we need to get the balance right. I urge you to read David Ignatius’ recent discussion of this issue in The Washington Post, (“The foreign policy debate we should be having”, Oct 21, 2012, page A15)

But there are more reasons that our military adventurism and spending should be reduced and more resources given to diplomacy. Our national security and the freedoms America was founded to establish and protect will be strengthened as a result.

American hegemony rests largely on our economic and military power, but also on widespread respect for the American way of life (our respect for human freedom and dignity and our prosperity). Our efforts to promote democracy via military interventions have generally not gone well.  The talents and spirit of enterprise that have served us so well at home have not generally contributed to success in building new democratic nations where we have militarily intervened. Books like Joseph Heller’s, Catch 22 (about WWII) and movies like Robert Altman’s Mash (about Viet Nam) entertainingly introduced us to the bureaucratic problems of fighting and/or governing in foreign lands. We have the best trained and most well equipped military history has ever known, but it has failed for the last ten years to win in Afghanistan, which is now the longest war in American history. Our powerful military is not good at nation building, nor should we expect it to be. The military is not the right tool for promoting the values we believe in around the world. That is a job for diplomacy (with our powerful military well in the background).

We have been more successful at promoting our values and our economic interests through our promotion of and participation in international organizations like the International Monetary Fund, the World Bank, and the World Trade Organization and a wide range of international agreements and cooperation that facilitate free trade, and capital movements, and that extend the protection of property and human rights internationally. These organizations and agreements have developed the international legal frameworks for telecommunications, patents, financial and product standards, etc. that underlie the explosion of globalization that has dramatically raised the standard of living for much of the world’s population.

Rajiv Chandrasekaran, has written an excellent exposition of our military efforts in Afghanistan, which I urge you to read “Afghan security forces rapid expansion comes at a cost as readiness lags” (The Washington Post, Oct 21, 2012, page 1). Every few years America’s military strategy has changed: from counter terrorism, to counter insurgency, to building and training (and equipping) an Afghan National Army and Afghan National Police. As each approach fails, the Joint Chief’s extract the lessons learned and try a new one until it fails. In recent years, our military commanders have correctly emphasized the fact that “success” cannot be achieved by the military alone (it amazes me that anyone could have thought so – no wonder they are so eager to start wars).

But those are far from the only reasons for reducing our military footprint and budget. I believe in keeping government relatively small and encumbered with the organizational and political checks and balances meant to replace the role of competition in the private sector in bending self-interest to the public good. People are influenced by their self-interest whether they are in government or the private sector. However, in the private sector success comes from serving the needs of others in the market. This exerts a strong incentive on individual behavior. (Dishonesty can exist in either sector and can only be addressed by embracing appropriate moral standards and consistent punishment of breaches of those standards) In place of market discipline (acceptance or rejection), government must rely more on checks and balances to ensure that government officials behave as intended and they can only go so far to keep government honest and impartial in serving the public. The power of the government to coerce, and the expenditure of large sums of money by the government create enormous temptations for personal gain by those in positions of power in the government. The bigger government gets the more difficult it is to prevent some in government from yielding to the temptations to direct its power and money to their own good rather than the general good.

The firms in our large and important military support industry (Lockheed Martin, Boeing, Northrup Grumman, General Dynamics, Raytheon, Halliburton, United Technologies, Computer Sciences, BAE Systems, General Electric, Bechtel, and Honeywell International, to name a few), do not have a disinterested view about the most appropriate and cost-effective military technology the defense budget should provide for. The millions of dollars they spend attempting to influence the choices of the services and congress are, in a sense, “honest” efforts to promote their self-interested view of what best serves our national security. The growing behemoth of the industrial military complex of which Eisenhower warned us over fifty years ago now both defends and threatens our liberties. See my earlier comments on Ike’s famous farewell address: http://dailycaller.com/2011/01/17/ikes-farewell-address-fifty-years-on/

The risks of the misallocation of our resources and waste are directly related to the size of our military (and government more generally). The boundary between honest differences of opinion over the best military equipment and systems and simple cronyism is fuzzy.  Consider, for example, the recent award of a large contract to build 100,000 homes in war-torn Iraq to HillStone International, a newcomer in the business of home building. When its president David Richter was asked how the newcomer swung such a big deal, he replied that it really helps to have “the brother of the vice president as a partner” (James Biden).[3] It would not be fair to disqualify bidders because they are friends or relatives of high government officials (As Afghan President Karzai’s brother Mahmoud said to us with regard to the shares of Kabul Bank given to him by its founders. The Bank is now in receivership as the result of the bank lending 95% of its deposits to its shareholders), but how can you tell what is merit and what is cronyism?

My point is that the defense budget needs to be on the table when our elected officials finally confront the cuts that must be made to the government’s expenditures to save the country. Defense spending needs to be cut not just because we can’t afford it, but also because our oversized military is weakening our economic base on which both our military and our political power in the world rest. And perhaps most important of all, over reliance on military power to the exclusion of diplomacy has actually weakened our security and standing in the world.

[1] The New Republic, editorial September 4, 2006, page 7.

[2] The Economist, “Sweden: The New Model” October 13, 2012.