Month: March 2009

“Get Out of the Way” is a valid choice.

Like most Robert Samuelson columns, I like significant portions and despise the rest. Usually I like his analysis and despise his proposals. The former rests on economics. The latter rests on government. Yesterday’s column is no different. His conclusion, which is the sanity:

All this is telling. The administration and Congress, though pledging to restore economic growth, care more about protecting foreclosure victims and promoting homeownership among the young and poor. Politics trumps economics.

That is spot-on. But his proposal is that the Obama administration and Congress are trying wrong sort of political interference in the economy. He suggests this:

The simplest way is to bribe prospective buyers not to wait. For example: Give them a 10 percent tax credit, up to $15,000, on the purchase of a new home. Anyone who bought a $150,000 home would get a $15,000 tax break. The credit would expire in a year. Waiting would be costly. Buyers would delay only if they thought home prices would drop as much or more.

The $15,000 tax break is problematic on its own. But the 1 year expiration date shows the true problem. This proposal is an attempt to manipulate the market into preferred behavior now, believing that the possible short-term boost will not result in a long-term letdown. But purchasing a home is not a spur-of-the-moment decision. Treating it that way politically and financially is a large reason we’re in our current mess. There are consequences of this behavior. For example, if artificially rising home prices encourages more people to attempt to sell their homes, are we better off?

Somehow, we need to cut bloated inventories (13 months of supply for unsold new homes), curb falling prices and stimulate new construction. …

In the short term, I doubt we can manipulate two of those at the same time. But cutting bloated inventories and stimulating new construction are mutually exclusive as concurrent political strategies. I vote against trying to cheat on either, but considering them demonstrates only a desire to promote home ownership over renting. Home ownership is not the valid choice for everyone, so this still places politics over economics.

Ron Paul is still not a libertarian.

Too many libertarians pounced on the promise of having a libertarian candidate for president. Hence, Rep. Ron Paul generated significant support from libertarians last year. He still receives many kudos. Unfortunately, Ron Paul is not a libertarian. The few labeling him as such harms us all. Yesterday Andrew Sullivan linked to a story about Rep. Paul with this introduction:

Even libertarians get their pork:

The story:

Rep. Ron Paul vehemently denounced the $410 billion catch-all spending bill approved last week by the House of Representatives.

But although the libertarian-leaning Republican from Lake Jackson cast a vote against the massive spending measure, his fingerprints were on some of the earmarks that helped inflate its cost.

Paul played a role in obtaining 22 earmarks worth $96.1 million, which led the Houston congressional delegation, according to a Houston Chronicle analysis of more than 8,500 congressionally mandated projects inserted into the bill. His earmarks included repair projects to the Galveston Seawall damaged by Hurricane Ike and the Gulf Intracoastal Waterway.

Rep. Paul is touted as Dr. No because he votes against what he believes to be beyond the legitimate powers of the federal government. That would earn my endorsement, except he behaves without principles. Yes, that money is going to be spent somewhere else if Rep. Paul doesn’t request it for his district. That does not mean he has to request it. He requests it, repeatedly, because he figures it might as well go to his district. His actions legitimize the illegitimate expansion of the federal government. He harms the credibility of libertarianism as a political philosophy.

This reminds me of something I posted early last year when the Ron Paul newsletter mess was in the news. It’s a quote from Wirkman Virkkala:It is an odd thing, trying to be a civilized person in the libertarian movement — or in modern society. You have to keep some independence of mind. You cannot allow yourself to become part of any cult. For all the leaders will betray you. All the prophets will prove false. All the gems will prove brummagem.

As libertarians do we really need to keep repeating this lesson? Shouldn’t we understand this by now?

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More from the Houston Chronicle article:

Earmarks, said Rep. Ted Poe, R-Humble, “allow lawmakers to have a say in how taxpayer dollars (are) spent.” His nine earmarks included $712,500 to mitigate airport noise at George Bush Intercontinental Airport.

“It is in the best interest of the taxpayers,” Poe said, “to have their member of Congress secure funding for local projects than to leave it up to unaccountable and un-elected bureaucrats in Washington.”

It is in the best interest of the taxpayers to have them make their own funding decisions for projects they endorse and deem necessary. Don’t act pious because you redistributed my money rather than a bureaucrat. Taking my money and giving it to someone else is still taking my money. Why should I pay to repair the Galveston Seawall, which is more than 1,400 miles from my home?

Prior Ted Poe nonsense here and here.

Capitalism improves. Social engineering punishes.

In yesterday’s Washington Post, E.J. Dionne wrote a column around this idea:

The central issue in American politics now is whether the country should reverse a three-decade-long trend of rising inequality in incomes and wealth.

Politicians will say lots of things in the coming weeks, but they should be pushed relentlessly to address the bottom-line question: Do they believe that a fairer distribution of capitalism’s bounty is essential to repairing a sick economy? Everything else is a subsidiary issue.

Apparently we can’t ask whether or not our current and prior attempts to achieve a “fairer” distribution of capitalism’s bounty contributed to our sick economy. Not that we have capitalism in the way that Dionne wishes to imply. The failings of a mixed economy do not prove that it’s time to toss the capitalism from the mix. Making that case requires a bit more than tossing around the undefined, subjective word fair and pretending that the argument is won.

As Dionne continues:

“Over the past two or three decades, the top 1 percent of Americans have experienced a dramatic increase from 10 percent to more than 20 percent in the share of national income that’s accruing to them,” said Peter Orszag, Obama’s budget director. Now, he said, was their time “to pitch in a bit more.”

Is there more direct proof that liberals view the rich as the nation’s piggy bank than claiming it’s time for the top 1 percent “to pitch in a bit more”? Does Orszag mean the top 1 percent who paid 39.89% of all federal income taxes in 2006? Dionne is saying that it’s okay to increase the existing unfairness in the tax code because the disparity in income at the extremes is unacceptable to his sense of fairness. He must ignore the question of whether or not the alleged victims of the unfairness of capitalism’s bounty are better off than they were in the past. He concludes:

Do we want to be a moderately more equal country or not? This is the question Obama has put before the nation. Let’s debate it without the distracting rhetorical sideshows designed to obscure the stakes in the coming battle.

I would ask something different: Do we want to be a more productive country or not? Does everybody gain, even if the distribution is “unfair”, or do we harm some to improve others in the short-term? Dionne has the wrong preference.