David Boaz

Maggie Mahar asks a good question in Sunday's Washington Post:

If you're a progressive like me, and you're upset by the Stupak amendment, which bars federally subsidized insurance from covering abortions, consider this: What if we had a single-payer health-care system and someone like Jeb Bush or Sarah Palin were running the country?

She worries that if Republicans were in charge of government-run health care, they might not stop with abortion. They might try to limit government-paid access to birth control, fertility treatments, or end-of-life care. They might even (gasp) try to require co-pays to get people to take some responsibility for their health-care decisions. She goes on:

I strongly support increasing our government's involvement in the health-care system by including a public option in the reform package. I believe that if Congress passes legislation that includes a public option, that option will be stronger than many pundits suggest. Such a plan could help lower costs while lifting the quality of care, and would provide serious competition to private insurers. But I'm also wary that in four or eight years, someone else -- someone less sympathetic to my views -- may be in the White House. And conservatives could once again control Congress. So I am relieved that we don't seem to be headed toward a single-payer system. We simply cannot count on "good government" overseeing our health care. One never knows who the American people will choose to elect. As a progressive, I have been stunned by the people's pick more than once in the past 30 years. Democracy offers choices but makes no promises. So I want to hedge my bets. I want alternative insurance options, especially from nonprofits such as Kaiser Permanente. And I don't want to find myself locked into an insurance plan run by conservatives -- or Democrats -- who feel they have a right to impose their religious beliefs on my access to care.

It's a good point. I made the same point a week ago in the Philadelphia Inquirer:

If you still have warm feelings toward Obama and his good intentions, ask yourself this: Will you feel comfortable one day when the appointees of President Romney or President Palin are exercising unconstitutional, unauthorized, unreviewable authority to restructure the economy the way they see fit?

And Bob Levy made the same point to Republicans when they were in power:

advocates of expanded executive power remind civil libertarians that President Bush is an honorable man who understands that the Constitution is made of more than tissue paper. That argument is simply not persuasive - even to those who fervently share its underlying premise. The policies that are put in place by this administration are precedent-setting. Bush supporters need to reflect on the same powers in the hands of his predecessor or his successors.

Indeed, because Republicans are often known as the Stupid Party, and not without reason, I tried to warn them about giving more power to the government while President Clinton was in office:

Let's not forget that if, say, Coats's Maternity Shelter Act were implemented next year, Donna Shalala, the secretary of health and human services, would be charged with implementing it. She might appoint HUD assistant secretary Andrew Cuomo to run it, or maybe unemployed ex-congressman Mel Reynolds, or maybe just some Harvard professor who thinks single motherhood is a viable lifestyle option for poor young women. One reason conservatives shouldn't set up well-intentioned government programs is that they won't always be in power to run them.

But they never listen. When the Republicans were in power, they brushed aside reminders that some day a Democratic president would be exercising the vast powers that Bush was accumulating in the White House. And when Democrats are in power, they ignore the risks of giving more power to a federal government that will one day be run by conservatives. And then both sides are appalled by the uses that are made of those powers when that day comes. I guess that's why the first section of The Libertarian Reader is titled "Skepticism about Power."

Former President George W. Bush

said Thursday that America must resist the "temptation" to allow the government to take over the private sector, taking a subtle shot at his Democratic successor by warning that too much state intervention and protectionism will squelch the economic recovery... "As the world recovers, we will face a temptation to replace the risk-and-reward model of the private sector with the blunt instruments of government spending and control. History shows that the greater threat to prosperity is not too little government involvement, but too much," said Mr. Bush.

Um, what? The president who

• expanded federal spending by more than a trillion dollars a year, before his disastrous last hundred days
• federalized education
• laid out "a smorgasbord of handouts and subsidies for virtually every energy lobby in Washington."
• protected the steel, agriculture, and textile industries from foreign competition
• backed farm bills with lavish subsidies for producers
• created the biggest new entitlement since Lyndon Johnson
• bailed out Bear Stearns, Fannie Mae, Freddie Mac, AIG, Bank of America, Citigroup, and dozens of other banks
• provided government support for mortgages, credit cards, auto loans and other consumer debt, and
• bailed out Chrysler and General Motors in direct defiance of Congress's refusal to do so

now says that his successor is about to "replace the risk-and-reward model of the private sector" with "too much government involvement"? Shouldn't President Bush be doing penance in a monastery somewhere, rather than embarrass the free-market cause by pretending that he wasn't the biggest-government president in decades?

Today's episode of "Hagar the Horrible" could be an epigraph for the new Fall 2009 issue of Cato Journal. This issue includes Greek economists Michael Mitsopoulos and Theodore Pelagidis on "Vikings in Greece: Kleptocratic Interest Groups in a Closed, Rent-Seeking Economy" as well as Peter Leeson, author of The Invisible Hook: The Hidden Economics of Pirates, writing (with David Skarbek) on the effects of foreign aid. As for taxes, well, editor Jim Dorn has assembled a number of useful papers:

• Andrew T. Young on taxing, spending, and "fiscal illusion"
• Michael J. New on the "starve the beast" hypothesis
• Alan Reynolds on Paul Krugman's misunderstanding of the monetary and fiscal lessons of the Great Depression and Japan's lost decade

And on the general rapaciousness of the state, don't miss Jason Kuznicki's careful review of government racial discrimination from the end of Reconstruction until the civil rights movement.

My "Freedom in Crisis" speech, which has gotten some compliments as I've delivered it in various venues, is now available on the web, complete with accompanying Powerpoint illustrations. Find it also on the Cato site here. And a partial transcript (pdf) was printed in Cato's Letter. (Get a free subscription to Cato's Letter here.) And to hear speeches like this live, watch for details on the next Cato University, July 25-30, 2010, in San Diego.

The distinguished Harvard economist Richard N. Cooper, former president of the Federal Reserve Bank of Boston, praises Johan Norberg's Financial Fiasco: How America's Infatuation With Homeownership and Easy Money Created the Economic Crisis in Foreign Affairs:

The economic crisis of 2008-9 will no doubt spawn dozens of books. Here are two good early ones.... Norberg, a knowledgeable Swede, provides a much more detailed account of the broader events of 2007-9, from the useful perspective of a non-American. He finds plenty of blame with all the major players in the U.S. financial system: politicians, who thoughtlessly pushed homeownership on thousands who could not afford it; mortgage loan originators, who relaxed credit standards; securitizers, who packaged poor-quality mortgage loans as though these were conventional loans; the Securities and Exchange Commission, which endowed the leading rating agencies with oligopoly powers; the rating agencies, which knowingly overrated securitized mortgages and their derivatives; and investors, who let the ratings substitute for due diligence. Senior management in large parts of the financial community lacked an attribute essential to any well-functioning financial market: integrity. But solutions, Norberg warns, do not lie in greater regulation or public ownership. Politicians and bureaucrats are not immune from the "short-termism" that plagues private firms.

The other book he praises, by the way, is Paul Krugman's The Return of Depression Economics. And oddly, his list of Norberg's villains doesn't include one implied in the title: the Federal Reserve Bank, which issued the "easy money" that allowed the boom to happen. Purchase Financial Fiasco here or on Kindle.

In the Obama era, the slippery slope has gone vertical. Instead of "eventually," the feared extensions of government power come immediately. When President Obama decided to convert George W. Bush's bailout of General Motors Corp. and Chrysler L.L.C. into effective government ownership, critics warned that this could lead to political intrusion into the management of automobile companies, with decisions being made for political instead of economic reasons. The companies would get less efficient. The government might try to preserve jobs or engage in political grandstanding rather than build sound companies that serve consumers - eventually. But there was no "eventually" about it. Before he had even secured government control, Obama fired the chief executive officer of General Motors. He decided what the ownership structure of the companies should be. He insisted that the companies build "clean cars" rather than cars that consumers want to buy. And as soon as a deal was concluded, members of Congress started trying to block the closing of inefficient dealerships and to require the companies to buy their palladium in Montana, use unionized trucking companies, remove mercury from scrapped cars, and so on. Politics reared its ugly head in the first moments of government control. Now we have the federal government's unprecedented intrusions into executive-pay decisions at seven bailed-out banks and automobile companies.... Read more at today's Philadelphia Inquirer.

The Democrats who still control the Virginia State Senate (which wasn't on the ballot this week) say they want to work with the new Republican governor.

"I won't be like the House Republicans were, where anything they propose is bad," said Senate Majority Leader Richard L. Saslaw (D-Fairfax), who like many Democrats says the GOP-led House obstructed the agenda of Gov. Timothy M. Kaine (D). "If there are areas where we can work things out, I'm ready, willing and able, and so is my caucus."

But not so fast:

But asked about certain key pieces of McDonnell's agenda, Saslaw demurred. Selling state-run liquor stores to raise money for transportation, for instance, would sacrifice the annual revenue the stores provide to schools and other purposes, Saslaw said. The Senate's education committee remains opposed to changing state laws to allow more charter schools, another McDonnell proposal, he said.

No to bipartisan cooperation, no to competition, yes to hoary monopolies. Is that really the rock on which the Democrats want to make their stand as the country's "implicit libertarian synthesis" yields a “libertarian moment”?

New York mayor Michael Bloomberg has been elected to a third term, despite the two-term limits that New Yorkers voted for twice. His biggest challenge was persuading the City Council to overrule the voters, but he managed that trick thanks to his absolute mastery of money and politics in the Big Apple. And on election day, even his $100 million campaign barely overcame popular anger over the repeal of term limits. Personally, I wish the Council had just given Bloomberg another term. Don’t get rid of term limits. Just do like the Romans used to do in an emergency. Name Bloomberg “dictator,” an extraconstitutional position with extraordinary authority but limited duration. Then you keep the rules, you just make an exception. And I’m sure Bloomberg would be willing to be addressed as Dictator for the duration of the emergency powers. Instead, Bloomberg used his money and connections to get the Council to allow all the city officeholders to serve three terms, instead of the two that the people had twice voted for. He said it was because of the financial crisis -- just as Rudolph Giuliani had suggested that the city shouldn't elect a new mayor in the aftermath of 9/11. Of course, as Nicole Gelinas of the Manhattan Institute has shown, New York’s revenues rose 41 percent between 2000 and 2007, while spending increased even faster, so it’s not clear why he’s the man you need in a financial crisis. But the plutocrat mayor used his personal wealth -- and the city’s tax dollars -- to pressure people to support his bid to stay in office. Last year the New York Times reported:

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:

Mayor Bloomberg showered cash on key City Council members with the power to kill a term-limits extension bill in the last year. Members of the council’s Government Operations Committee have received millions from Hizzoner’s slush fund, a once-secret pot of taxpayer money the mayor doles out to favored lawmakers for their pet causes…. Five members of the committee secured $3.1 million from the $5.3 million stash in Bloomberg’s 2008 budget. Only three other council members received funds from the mayor in the last year.

And the New York Daily News noted that everyone working for Bloomberg at the City Council hearings is on Mayor Mike’s payroll one way or another:

There was the mayor’s legal counsel and the city’s corporation counsel, both paid with tax dollars, testifying that Bloomberg can and should get another term. There were aides from the mayor’s Community Assistance Unit, who rounded up pro-Bloomberg speakers from the community and religious and civic groups they work with all day long – many of which thrive on city grants. There were the dozens of “Ready, Willing and Able” guys from the Doe Fund, which gets funding from the city – and used its vans to bring people to the hearing.

That's why -- to return to my Roman theme -- union boss Dennis Rivera came to praise Bloomberg, not to bury him, at a recent campaign event. Hail Bloomberg, Magister Populi, Magister Urbi.

Last night -- a Monday night, the eve of a hotly contested gubernatorial election in Virginia -- there were at least three interesting events for libertarians in the Washington area:

• Reason.tv held an event to launch "Radicals for Capitalism," a new series of videos celebrating Ayn Rand's continuing influence.
• The Future of Freedom Foundation and the George Mason University Economics Society sponsored a lecture by Lawrence W. Reed, president of the Foundation for Economic Education, at GMU.
• And here at the Cato Institute, an overflow crowd gathered to watch a new film, The Soviet Story, which the Economist called "the most powerful antidote yet to the sanitisation of the past."

It's got to be a sign of growth and health if the libertarian movement is offering three excellent programs on one Monday night in one area. But what's an overscheduled libertarian to do?

"When Kathy Patterson learned about Thursday's D.C. Council hearing, during which Chairman Vincent C. Gray and Schools Chancellor Michelle A. Rhee pelted each other with accusations of law-breaking and secret meetings, she had one immediate reaction," reports the Washington Post.

"Here we go again," said Patterson, a former council member and chairwoman of its education committee. It looked as if another attempt at public school reform was disintegrating in a hail of recriminations and rhetoric.

Casey Lartigue wrote about the decades-long efforts to improve the D.C. schools for Cato back in 2002.