David Boaz

At the Guardian I point out that "Liberal journalists are combing the back roads of America looking for evidence of the resurgent racism being generated by the prospect of a black man becoming president. The striking thing is how little they've turned up." Despite headlines like "Ugly reception for Obama" and "Racist attacks on Obama growing more heated," the journalists have had to go to Danville, Va., and the Arkansas-Missouri border to find a few individual instances of racist attacks. Nothing like what the Catholic JFK faced in 1960.

Racist attacks on Barack Obama are few and far between, but that hasn't stopped the media from sensationalising them

Liberal journalists are combing the back roads of America looking for evidence of the resurgent racism being generated by the prospect of a black man becoming president. The striking thing is how little they've turned up in a country of 300m people with plenty of racial conflict in its history.

Here's how the Associated Press led a roundup story on Friday: "Race, an inescapable but explosive issue on which both presidential candidates have tread carefully if not tried to ignore, is increasingly popping up as it's becoming more likely the country will elect its first black president."

But since they couldn't find anything coming from John McCain, Sarah Palin or any of their staff or surrogates that would justify such a claim, the first evidence cited was that Democratic congressmen John Murtha and John Lewis had accused Barack Obama's opponents of racism.

Eventually the AP story got around to citing the evidence of racism directed toward Obama that its vast nationwide reporting staff had turned up:

• In San Bernardino County, California, the October newsletter of the Chaffey Community Republican Women, Federated, showed Obama's face on a phoney $10 government food stamp coupon adorned with a watermelon, ribs and a bucket of fried chicken. Diane Fedele, president of the group, apologised and she had no racist intent: "It was just food to me. It didn't mean anything else." The state GOP denounced the newsletter.

• In Nevada, Colorado and Michigan, TV ads show a clip of [the Rev Jeremiah] Wright declaring "God damn America!" in a sermon. "How can we forget these hateful sermons from Obama's pastor for over 20 years?" says one ad by the Our Country Deserves Better PAC, a Sacramento, California-based group that was formed to campaign against Obama.

• In Danville, Virginia, The Voice, a local newspaper, published a column by McCain's Buchanan County campaign chairman, Bobby May, that mocked an Obama administration. It said he would change the national anthem to the "Black National Anthem" while mandating that churches teach black liberation theology. Also, it said Obama would appoint Al Sharpton and Jesse Jackson to the Cabinet and put prominent blacks like Oprah Winfrey on currency. McCain's campaign dropped May from his job.

• In West Plains, Missouri, a remote town of 10,000 people near the Arkansas border, a prominent highway sign by an unknown creator shows a turban-wearing cartoon caricature of Obama, with an exaggerated smile, full lips and oversized teeth. It says: "Barack 'Hussein' Obama equals more abortions, same-sex marriages, taxes, gun regulations."

So what do we have here? One unknown group in Sacramento has run some ads reminding voters that Obama's decades-long pastor and spiritual adviser is pretty radical. The fact that Wright is black doesn't make that a racist argument. If McCain had sat in the pew for 20 years listening to a pastor who said, say, that "the pagans, and the abortionists, and the feminists, and the gays and the lesbians are responsible for the 9/11 attacks because they caused God to withdraw his protection for America," you can bet that would be an issue.

Otherwise, the AP has found three individuals in remote towns who have directed racial slurs at the first black candidate with a real chance to be president. That's pretty remarkable. We've made great progress since the civil rights revolution, but who would have guessed there'd be so little backlash?

That won't stop journalists from looking for it, though. Google "Obama racism", and you'll find hits like "Racism is the only reason Obama might lose" (because of course the most liberal Democrat in the Senate would be a shoo-in otherwise) and "Racist attacks on Obama growing more heated" (yes, on white supremacist and neo-Nazi websites) and "Racist Obama effigy hung in Ohio" (yes, one guy in rural Ohio hung a white-sheeted ghost labelled "Obama" in his yard, and his white neighbours are appalled).

On the web Sunday we got the headline "'Socialist', 'Muslim' – Ugly reception for Obama", who campaigned in the Cape Fear BBQ and Chicken in Fayetteville, North Carolina. But in fact it appears that there was just one woman who shouted "socialist" at him and also told a reporter that she suspected he was a "closet Muslim". The other white diners told her to quiet down and be civil. Reporters descended on her, though, and she did manage to direct a slur at General Colin Powell, who had endorsed Obama that morning: She called him "a Rino, R-I-N-O, Republican In Name Only".

Compared to the level of open anti-Catholic bias against John Kennedy in 1960, racism in the 2008 campaign is a dog that didn't bark.

New York mayor Michael Bloomberg, who spent $158 million on his two elections, now thinks he should stay in office despite the city's two-term limit. So far it's much cheaper--he's just pressuring all the civic groups and charities in town that have received donations from him, or from the taxpayers, to get themselves down to City Hall and testify to his indispensability in a time of financial crisis. The voters have twice endorsed term limits, but the mayor doesn't see any need to ask them again; he wants the City Council to overrule the voters. Of course, as Nicole Gelinas of the Manhattan Institute has shown, New York's revenues have risen 41 percent under Bloomberg, while he has jacked up spending even faster, so it's not clear why he's the man you need in a financial crisis. But the striking thing about the plutocrat mayor is the way he's using his personal wealth--and the city's tax dollars--to pressure people to support his bid to stay in office. The New York Times reports:

The mayor and his top aides have asked leaders of organizations that receive his largess to express their support for his third-term bid by testifying during public hearings and by personally appealing to undecided members of the City Council. ... The requests have put the groups in an unusual and uncomfortable position, several employees of the groups said. City Hall has not made any explicit threats, they said, but city officials have extraordinary leverage over the groups’ finances. Many have received hundreds of thousands of dollars from Mr. Bloomberg’s philanthropic giving and millions of dollars from city contracts overseen by his staff.

Sounds like a lot of overlap between his personal philanthropy and the city's own spending, and the Times doesn't seem to find anything odd about that aspect of the story. And then the New York Post found that the mayor's tax-funded "slush fund" was being enlisted in the campaign, too:

Read more...

That seems to be the question on the cover of every magazine this week. It's also the headline of the lead editorial in today's Washington Post. But the subhead might surprise you.

Is Capitalism Dead? The market that failed was not exactly free.

The editors begin:

As financial panic spread across the globe and governments scrambled to contain the damage, reality seemed to announce the doom of U.S.-style free markets and President Bush's ideology. But this is wrong in two ways. The deregulation of U.S. financial markets did not reflect only the narrow ideology of a particular party or administration. And the problem with the U.S. economy, more than lack of regulation, has been government's failure to control systemic risks that government itself helped to create. We are not witnessing a crisis of the free market but a crisis of distorted markets.

And they go on to note:

We'll never know how this newly liberated financial sector might have performed on a playing field designed by Adam Smith. That's because government interventions of all kinds, from the defense budget to farm supports, shaped the business environment. No subsidy would prove more fateful than the massive federal commitment to residential real estate — from the mortgage interest tax deduction to Fannie Mae and Freddie Mac to the Federal Reserve's low interest rates under Mr. Greenspan. Unregulated derivatives known as credit-default swaps did accentuate the boom in mortgage-based investments, by allowing investors to transfer risk rather than setting aside cash reserves. But government helped make mortgages a purportedly sure thing in the first place. Home prices seemed to stand on a solid floor built by Washington. Government support for housing was well-intentioned: Homeownership is a worthy goal. But when government favors a particular economic activity, however validly, it must seek countervailing control to ensure the sustainable use of public resources. This is why banks must meet capital requirements in return for federal deposit insurance. Congress did not apply this sound principle to Fannie Mae and Freddie Mac; they were allowed to engage in profitable but increasingly risky activities with an implicit government guarantee. The result was that taxpayers had to assume more than $5 trillion of their obligations. Contrast U.S. experience with that of Canada, where there is no mortgage interest deduction and the law requires insurance on any mortgage over 80 percent of a home's purchase price. Delinquency rates at Canada's seven largest banks are near historic lows. The new capitalist model that emerges from this crisis must operate according to more consistent principles. The Fed should set interest rates with the long-run value of the dollar in mind. Government must be more selective about manipulating markets; over the long term, business works best when it is subject to market discipline alone. In those cases — and there will and should be some — in which government intervenes on behalf of social goals, its support must be counterbalanced with taxpayer protections and regulation. Government-sponsored, upside-only capitalism is the kind that's in crisis today, and we say: Good riddance.

That's not quite what I'd have written. But the ending does remind me of the conclusion of my blog post a week ago:

...if this crisis leads us to question “American-style capitalism” — the kind in which a central monetary authority manipulates money and credit, the central government taxes and redistributes $3 trillion a year, huge government-sponsored enterprises create a taxpayer-backed duopoly in the mortgage business, tax laws encourage excessive use of debt financing, and government pressures banks to make bad loans — well, it might be a good thing to reconsider that “American-style capitalism.”

Dropping in the polls and running out of time, John McCain has finally gone on the offensive against Barack Obama on core Republican values that appeal to libertarians, conservatives, and Reagan Democrats. In his Saturday radio address he seized on Joe the Plumber's question to candidate Obama:

My opponent's answer showed that economic recovery isn't even his top priority. His goal, as Senator Obama put it, is to "spread the wealth around." You see, he believes in redistributing wealth, not in policies that help us all make more of it. Joe, in his plainspoken way, said this sounded a lot like socialism. And a lot of Americans are thinking along those same lines. In the best case, "spreading the wealth around" is a familiar idea from the American left. And that kind of class warfare sure doesn't sound like a "new kind of politics." This would also explain some big problems with my opponent's claim that he will cut income taxes for 95 percent of Americans. You might ask: How do you cut income taxes for 95 percent of Americans, when more than 40 percent pay no income taxes right now? How do you reduce the number zero? Well, that's the key to Barack Obama's whole plan: Since you can't reduce taxes on those who pay zero, the government will write them all checks called a tax credit. And the Treasury will cover those checks by taxing other people, including a lot of folks just like Joe. In other words, Barack Obama's tax plan would convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington. I suppose when you've voted against lowering taxes 94 times, as Senator Obama has done, a new definition of the term "tax credit" comes in handy. At least in Europe, the Socialist leaders who so admire my opponent are upfront about their objectives. They use real numbers and honest language. And we should demand equal candor from Senator Obama. Raising taxes on some in order to give checks to others is not a tax cut it's just another government giveaway.

That just might remind lots of voters why they don't like to elect Democrats. Of course, it might work better if the Republicans hadn't raised spending more than a trillion dollars. And if the current Republican administration hadn't just nationalized the banks. And if McCain himself didn't have a health care "tax credit" that also means that "the government will write them all checks."

At the Al Smith Dinner, Barack Obama said, "I feel right at home here because it's often been said that I share the politics of Alfred E. Smith and the ears of Alfred E. Newman." That's the best news I've heard all year. Because Al Smith was not only America's most visible opponent of our first version of Prohibition, he was a leading critic of Franklin Roosevelt's New Deal. Indeed, he was a founder of the American Liberty League, the leading organization in opposition to the New Deal. As David Pietrusza wrote in Reason, the Liberty League grew out of the earlier organization Americans Against the Prohibition Amendment. And, he said,

In summing up the League’s philosophy, liberal author George Wolfskill (The Revolt of the Conservatives) outlined a remarkably coherent libertarian position. They believed, he said, that the New Deal was a threat to the Constitution and represented a danger of tyranny via centralization; that it was based on coercion, deceit, and false economic principles: that recovery was in fact retarded by government intervention; that government agricultural controls were “a cure worse than the disease”; that the New Deal combined aspects of socialist and fascist economic systems; that private enterprise was being damaged; that deficit financing and high spending threatened the nation with inflation; and that the banking community was now under the political control of the federal government.

So if Barack Obama indeed shares the ideas of Al Smith, maybe as president he'll take on our current version of Prohibition, and get the government out of the banking community, and start to undo the unconstitutional excesses of the federal government that have merely accelerated from FDR to Bush and Cheney. We can only hope.

Some years ago I wrote an article titled "The Gun behind the Law." (Not online, but it appears in The Politics of Freedom.) It began with a photograph of 50 or so helmeted policemen storming the doors of a large and institutional building. As it turned out, the photograph depicted a bank nationalization in Peru during the first and disastrously leftist presidency of Alan Garcia. I noted that the Peruvians were helping us understand the real import of the term "bank nationalization": "What really occurred there is that some people forced other people to give up their property at the point of a gun....As the bankers of Peru have learned, every law is en­forced at the point of a gun." And I noted that things are very different here: "When we Americans hear the words 'bank nationalization,' we are apt to imagine a piece of paper being signed by a bank president and a deputy assistant treasury secretary." Well, I was a little off. It was actually nine bank presidents and the secretary himself. But the general scene was right:

The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.

"They weren't allowed to negotiate. Mr. Paulson requested that each of them sign. It was for their own good and the good of the country, he said, according to a person in the room." At least one banker objected. "But by 6:30, all nine chief executives had signed — setting in motion the largest government intervention in the American banking system since the Depression." And all without any need for armed police takeovers of the banks. Nice and peaceful like. And no doubt some of the bankers were just delighted to get billions of dollars from the taxpayers. For those who didn't want to be working for the government, the points I made in that long-ago article are still valid:

The gun is evident in the picture [from Peru], but it is no less real when an American is forced to give up his property by a law or regulation. Such commonly used terms as “national economic policy,” “social regulation,” “revenue enhancement,” “profamily legislation,” and “minimum-wage law” all obscure the simple fact that some people are forcing others to do as they’re told. But Peru is not the United States, it will be said; our government would never send riot troops to take over a bank. That is largely because it wouldn’t have to—Americans don’t resist the demands of government. What would happen if they did?... If more Americans decided to ignore absurd, special-interest, and counterproductive laws, it would soon be apparent that physical force lies behind the Federal Register. Does anyone believe that Americans would pay a large percentage of their income to the federal government if not for the ultimate threat of imprisonment and violence? As the bankers of Peru have learned, every law is enforced at the point of a gun—a fact we should carefully consider when we are tempted to conclude that some perceived problem should be solved by enacting a law.

Harold Meyerson in the Washington Post has a column titled "Gods That Failed." He's referring to a famous book:

In 1949, a number of famous writers, among them Arthur Koestler, André Gide, Richard Wright, Stephen Spender and Ignazio Silone, wrote essays explaining why they were no longer communists. The essays were collected in a volume entitled "The God That Failed."

And then he makes this analogy: "Today, conservative intellectuals might want to consider writing a tome on the failure of their own beloved deity, unregulated capitalism. " Where to begin? Certainly we haven't had any unregulated capitalism lately. As I put it the other day, the kind of capitalism that has encountered the current crisis is "the kind in which a central monetary authority manipulates money and credit, the central government taxes and redistributes $3 trillion a year, huge government-sponsored enterprises create a taxpayer-backed duopoly in the mortgage business, tax laws encourage excessive use of debt financing, and government pressures banks to make bad loans." As for conservative intellectuals, some of them may wish for some form of "unregulated capitalism," though plenty of them -- from Russell Kirk to David Brooks and Michael Gerson and that Arkansas Aristotle, Mike Huckabee -- have been pretty darn skeptical about capitalism. But whatever the more free-market conservatives may have dreamed of, they didn't get laissez-faire. Nor did they ever make capitalism their deity, the way communists truly did make the workers' state their god. But let's think about the comparison that Meyerson is making. Some intellectuals once supported communism, and that failed. Some intellectuals, we'll concede for the moment, were just as enraptured with capitalism; and that system, too, in Meyerson's view, has failed. Are these equivalent failures? Communism's failure involved Stalin's terror-famine in Ukraine, the Gulag, the deportation of the Kulaks, the Katyn Forest massacre, Mao's Cultural Revolution, Che Guevara's executions in Havana, the flight of the boat people from Vietnam, Pol Pot's mass slaughter -- a total death toll of 94 million people, according to the Black Book of Communism. Prominent American leftists -- from Lillian Hellman and Dalton Trumbo and lots of other writers to Alger Hiss of the State Department and FDR speechwriter Michael Straight, who became the publisher of The New Republic -- were members of the party that did these things. And that party had total control in the countries that it ruled. There were no opposition parties, no filibusters, no election-related maneuverings that prevented the party in power from getting what it wanted. What the Communist Party wanted, it got. Communism in practice was communist theory made real. In the United States, on the other hand, economic and political outcomes are always the result of jockeying between parties and interest groups. So even if Ronald Reagan and his advisers wanted to give Americans "unregulated capitalism," they had to deal with Tip O'Neill and the Democrats, and with critics in the media, and with many other players. As these forces played out, in the late 1970s and early 1980s some deregulation did occur, along with some tax-cutting. And indeed there was some financial deregulation in the Clinton years as well. And what is the "failure," as Meyerson puts it, of this semi-deregulated capitalism? Does it involve mass starvation? Does it involve terror-famines? Does it involve millions of deaths? No, so far it involves a sharp decline in the stock market from record levels. Taking 1980 as the starting point for Meyerson's nightmare vision of "unregulated capitalism," here's what has happened to the S&P 500. It's had some dips, but it still reflects vast wealth creation, and vast increases in the assets of our IRAs and 401(k)s. (click for larger version) The "failure" of capitalism and the failure of communism are not morally equivalent, and Meyerson should be embarrassed to even imply such a comparison.

The Chicago Tribune quotes me this morning on issues the candidates aren't talking about and may not anticipate. It's true that issues are likely to arise in the next four years that no one anticipates today. But there are also some issues that are pretty easy to identify that the candidates aren't being pressed to talk about. Some of those include:

• The proper role and scope of the federal government. Both candidates have a laundry list of things they want the federal government to do, and maybe they could each mention something they don’t want it to do. But what’s the framework behind their policy choices? What should government do? What should be left to state and local governments, and what should be left to the non-coercive sectors of society? What’s the proper and/or constitutional role and scope of the federal government?

• The looming entitlements crisis. Entitlements are already about 40 percent of the federal budget. In 20 years they may double as a share of national income. Can we afford that? Do we want a tax burden that high? Do we want that many people dependent on a check from the federal government? Do we have the nerve to say that transfer payments should be cut? Tough choices that nobody wants to confront, partly because each politician hopes that the problem won’t explode until he leaves the scene.

• We now have 2.5 million people in prison. Isn't that something to talk about? Should they all they be there? Some 400,000 of them are nonviolent drug offenders. A million arrests don’t stop people from using drugs, and meanwhile the war on drugs costs us some $40 billion a year, increases crime rates, destroys poor neighborhoods, makes criminals out of lots of peaceful people, engenders civil liberties abuses, and funds the Taliban and other nefarious groups abroad.

On the campaign trail, reports MSNBC, Sarah Palin is telling audiences Barack Obama would raise taxes and expand the federal government. Her punch line:

"America, we just cannot afford another big spender in the White House."

That's for sure.