David Boaz

I decided to give a young colleague a post-graduate course in political science and economics — P. J. O’Rourke’s books Parliament of Whores and Eat the Rich. So I went to my local Barnes & Noble to search for them. Not in Current Affairs. Not in Economics. No separate section called Politics. I decided to try Borders. But first — to avoid yet more driving around — I went online to see if my local Borders stores had them in stock. (An excellent innovation that Barnes & Noble should copy, for customers who like to look at the actual book before buying it, or who don’t do their Christmas shopping far enough in advance to shop online.) Sure enough, they did, in a couple of stores just blocks from the Cato Institute. Checking to see where in the store I would find them, I discovered that they would both be shelved under “Humor–Humorous Writing.” Oh, right, I thought, they’re not books on economics or current affairs, they’re humor.

Yes, P.J. is one of the funniest writers around. But what people often miss when they talk about his humor is what a good reporter and what an insightful analyst he is. Parliament of Whores is a very funny book, but it’s also a very perceptive analysis of politics in a late 20^th century democracy. And if you read Eat the Rich, you’ll learn more about how countries get rich—and why they don’t – than in a whole year of econ at most colleges. In fact, I’ve decided that the best answer to the question “What’s the best book to start learning economics?” is Eat the Rich.

On page 1, P. J. starts with the right question: “Why do some places prosper and thrive while others just suck?” Supply-and-demand curves are all well and good, but what we really want to know is how not to be mired in poverty. He writes that he tried returning to his college economics texts but quickly remembered why he hated them at the time–though he does attempt, for instance, to explain comparative advantage in terms of John Grisham and Courtney Love. Instead he decided to visit economically successful and unsuccessful societies and try to figure out what make them work or not work. So he headed off to Sweden, Hong Kong, Albania, Cuba, Tanzania, Russia, China, and Wall Street.

In Tanzania he gapes at the magnificent natural beauty and the appalling human poverty. Why is Tanzania so poor? he asks people, and he gets a variety of answers. One answer, he notes, is that Tanzania is actually not poor by the standards of human history; it has a life expectancy about that of the United States in 1920, which is a lot better than humans in 1720, or 1220, or 20. But, he finally concludes, the real answer is the collective “ujamaa” policies pursued by the sainted post-colonial leader Julius Nyerere. The answer is “ujaama—they planned it. They planned it, and we paid for it. Rich countries underwrote Tanzanian economic idiocy.”

From Tanzania P. J. moves on to Hong Kong, where he finds “the best contemporary example of laissez-faire….The British colonial government turned Hong Kong into an economic miracle by doing nothing.”

You could do worse than to take a semester-long course on political economy where the texts are Eat the Rich and Parliament of Whores. So, bookstore owners, leave them in the Humorous Writing section for sure, but also put copies in the Economics, Politics, and Current Affairs sections.

Hillary Clinton’s Christmas-weekend TV ad shows her sitting at her famous couch wrapping presents. They’ve all got tags — reading “Alternative Energy,” “Middle Class Tax Breaks,” “Universal Health Care,” and “Universal Pre-K.” (Also “Bring Troops Home,” but she’s already made clear that that box is empty.) I’d embed the video here, but you’d think it was a Club for Growth parody, so instead I’ll link directly to her campaign website.

Hillary actually sees herself as Santa Claus, handing out presents to the voters. Except, as my colleague Justin Logan notes, instead of putting together the toys at the North Pole with her elves, she’ll just take our toys, wrap them up, and then give them back to us after taking her cut and then pretend that it’s a great act of beneficence.

I complained once about teenagers interviewed by Parade magazine who “seemed to regard the new president as a combination of Superman, Santa Claus, and Mother Teresa.” But they were teenagers, not 60-year-old presidential candidates. Only one of the teens interviewed had an adult understanding of where government benefits come from. “I worked every day last summer,” he told Parade, “repairing and setting up cattle fences, from 8 a.m. to 5 p.m. in very hot weather. I got a good tan, but other than that it wasn’t worth it — just to have the government take a third of my money and have it go to someone I don’t even know who didn’t earn it in the first place. Do something about taxes.” He’s old enough to vote now. If only he were old enough to run for president.

The Russian government’s monthly propaganda insert in the Washington Post includes this headline today:

The Man with the Plan/President Putin Has Got the Nation’s Future Mapped Out

It reminded me of an article I wrote a few years ago with the same title, “The Man with the Plan.” (In Liberty, July 1996, or you can read it in my forthcoming book The Politics of Freedom.) I was writing about Clinton adviser Ira Magaziner, whose various planning schemes, while scary, are certainly not as bad as the ones that have been tried in Russia over the past century. Though this idea, expressed by presidential candidate Bill Clinton on the campaign trail in 1992, might come close:

We ought to begin by doing something simple. We ought to say right now, we ought to have a national inventory of the capacity of . . . every manufacturing plant in the United States: every airplane plant, every small business subcontractor, everybody working in defense.

We ought to know what the inventory is, what the skills of the work force are and match it against the kind of things we have to produce in the next twenty years and then we have to decide how to get from there to there. From what we have to what we need to do.

Five-year plans not having planned out so well, Clinton and Magaziner decided the problem was their short-term focus. Whether Bill or Hillary, Putin or Magaziner, when I hear the phrase “the man (or woman) with the plan,” I think of Adam Smith:

The man of system, on the contrary, is apt to be very wise in his own conceit, and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests or the strong prejudices which may oppose it: he seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

A front-page story in the Wall Street Journal features this chart:

It shows, as the Washington Post bannered after the 2006 election, that evangelicals moved a bit away from the Republicans in 2006. Indeed, there was a 7-point decline in the Republican margin among evangelicals.

But if you want to see a real shift, the Post and the Journal could run this chart:

In other words, among libertarians, the margin for Republican House candidates dropped from 47 to 8 points, a 39-point swing. The libertarian vote is about the same size as the religious right vote measured in exit polls, and it is subject to swings more than three times as large. Strategists in both parties should take note.

Parade magazine frets:

In the current U.S. Congress, women account for only 16.3% of the members: 16 of 100 in the Senate and 71 of 435 in the House of Representatives. Eighty-four nations have a greater percentage of female legislators than the U.S., including our neighbors Mexico and Canada, as well as Rwanda, Vietnam and Cuba.

It’s not exactly clear that legislatures with more women produce better government. So why, then, as Parade notes, does the United States demand that emerging democracies have gender quotas that we would never accept in our own politics?

After the overthrow of the Taliban in Afghanistan and of Saddam Hussein in Iraq, the United States made sure that when those two countries held elections, 25% of the seats in their legislatures would be reserved for women.

Sen. Joseph Lieberman, the 2000 Democratic nominee for vice president, has endorsed Republican Sen. John McCain for president. It’s a coup for McCain, struggling to reignite his once frontrunning campaign. And looking over the rest of the field, libertarian voters might even conclude that McCain has a pretty good record on a lot of economic issues.

But the Lieberman endorsement will remind those libertarian voters of all the positions that pushed them away from McCain in the first place. Lieberman and McCain are perhaps the two leading supporters of the Iraq war in the Senate. They are coauthors of a bill to impose costly new regulations to fight global warming. They both support restrictions on political speech.

As I’ve noted before, some Republicans think no issue matters except doubling down on the floundering war effort, so they consider Lieberman an ally, even a man who should be a heartbeat from the Oval Office in the next Republican administration. But you have to ignore Lieberman’s entire career to see him as an ally of conservatives.

As Robert Novak pointed out back when Republicans were endorsing Lieberman for reelection,

Lieberman followed the liberal line in opposing oil drilling in ANWR, Bush tax cuts, overtime pay reform, the energy bill, and bans on partial-birth abortion and same-sex marriage. Similarly, he voted in support of Roe vs. Wade and for banning assault weapons and bunker buster bombs. His only two pro-Bush votes were to fund the Iraq war and support missile defense (duplicating Sen. Hillary Clinton’s course on both).

Lieberman’s most recent ratings by the American Conservative Union were 7 percent in 2003, zero in 2004 and 8 percent in 2005.

I actually agree with him on a couple of those votes, though I wouldn’t expect that conservatives would. The National Taxpayers Union said that he voted with taxpayers 9 percent of the time in 2005, worse than Chris Dodd or Barbara Boxer. Maybe because of all the Republican love in 2006, he soared to a 15 percent rating.

In a previous speech, Lieberman called for a tax increase so that we could continue the war without “squeezing important domestic programs, as we have been doing”–his view of a period during which federal spending rose by one trillion dollars:

During the Second World War, our government raised taxes and we spent as much as 30 percent of our Gross Domestic Product to defeat fascism and Nazism. During the war in Korea, we raised taxes and spent fourteen percent of GDP on our military…Today, in the midst of a war against a brutal enemy in a dangerous world, we have cut taxes and are spending less than five percent of GDP to support our military…It is not an acceptable answer to push the sacrifice of this war against terrorism onto our children and grandchildren through deficit spending, as we have been doing. And it is not an acceptable answer to pay the costs of this war by squeezing important domestic programs, as we have been doing.

Lieberman may help McCain with Republican hawks, but he’s not likely to help with New Hampshire’s growing contingent of disaffected libertarian, centrist, and independent voters, the ones who swung the state firmly into the blue zone last fall.

I have some thoughts in last Tuesday’s New Hampshire Union Leader about Senator Clinton, Mayor Giuliani, and the use and abuse of power:

Clinton, always eager to wield power on behalf of her vision of the public good, has just endorsed new government mandates on health care and energy along with a $50 billion spending program for global AIDS. Meanwhile, revelations about Giuliani’s secretive use of New York City police and his refusal to allow the city comptroller to audit his security spending reflect his lifelong affinity for using and abusing power.

Clinton calls herself a “government junkie.” She says, “There is no such thing as other people’s children” and promises to work on “redefining who we are as human beings in the post-modern age.”…

Giuliani seems much less committed to any particular vision of government’s role. Rather, throughout his career Giuliani has displayed an authoritarian streak that is deeply troubling in a potential President who would assume executive powers vastly expanded by President Bush….

Giuliani wants power concentrated in whatever position he holds at the time, and Clinton wants the federal government to have vast powers to do good as she sees it. Not a happy choice for the voters in a free country.

Ed Morrissey at Captain’s Quarters writes, “In the first five years of his presidency, Bush could barely find his veto pen. Now, however, freed of the burden of defending a free-spending Republican Congress, Bush has discovered his inner Reagan.”

Maybe the veto pen really was lost for years, and it just turned up in the White House Book Room.

America shouldn't try to correct its record-high trade imbalance with China by rushing to increase exports

As US Treasury secretary Henry Paulson meets in Beijing with Chinese vice-premier Wu Yi to discuss the US-China trade balance, the US commerce department has just released its monthly report on the widening trade deficit. Journalists report this in hand-wringing terms that consistently reflect little understanding of real economics. "Oh no, imports from China are up," blares my radio. "The only solution is to increase American exports to China."

And that's supposed to be the free-trade position, a counter to the argument for tariffs or other coercive measures to prevent China from forcing its products on innocent American consumers. (I'm omitting the safety and health problems with Chinese products for now, as we heard the same economic complaints when Japan was the biggest non-white exporter to the US. Somehow we've never worried so much about imports from Canada, the UK and Germany.)

But this whole framework is misguided. Twenty-four years ago in the Cato Journal, the economist Ronald Krieger explained (comment beginning on page 667) the difference between the economist's and the non-economist's views of trade. The economist believes that "The purpose of economic activity is to enhance the wellbeing of individual consumers and households." And, therefore, "Imports are the benefit for which exports are the cost." Imports are the things we want - clothing, televisions, cars, software, ideas - and exports are what we have to trade in order to get them. (I see that Tim Worstall made the same point just last month on Comment is Free in response to the German foreign minister.)

Adam Smith wrote in 1776: "Nothing can be more absurd than this whole doctrine of the balance of trade." When two parties trade, each expects to gain. It doesn't matter whether they live in different neighbourhoods, different states or different nations. Each of us seeks to give away as little of our own wealth as possible to get as much possible from others. And as consumers pursue their wellbeing, trade will inevitably balance, though monthly statistics will offer many "imbalances" to raise alarms about. Secretary Paulson shouldn't worry too much about increasing exports, and he definitely shouldn't pressure the Chinese to send American consumers fewer products.