Stories by Fred Bauer

Fred Bauer is a writer from New England.  He blogs at A Certain Enthusiasm.

Ratings Agencies Want to See Bush Tax Cuts Lapse

July 26th, 2011 at 11:58 pm 79 Comments

The suggestion that the US needs to cut $4 trillion in projected debt over the next ten years in order to avoid a downgrade in its debt rating, posed here in an S&P report, has gained significant traction among many on the right. Erick Erickson, when he’s not denying “absolution” to the falsely faithful in the GOP, has emphasized this cut of $4 trillion as crucial to avoid a downgrade.

However, digging into the S&P report reveals some details that might be more problematic for many seeming “deficit hawks.” Though this report does suggest that $4 trillion in cuts/increased revenue over the next ten years would be enough to keep an AAA rating, it also says that its baseline for savings assumes the expiration of the Bush tax cuts in 2012. Will many of these “deficit hawks” abandon those tax cuts in order to appease S&P and keep an AAA rating?


Payback’s a Bitch

July 23rd, 2011 at 1:26 pm 43 Comments

Consider this scenario: President Palin (or Romney or Perry or Pawlenty or whoever) is sworn in with great jubilation among movement conservatives in January 2013. Voter distaste with Democrats also led to the crushing defeat for Democratic Congressional incumbents, leaving Republicans with hefty majorities in the House and Senate. In a paroxysm of celebration, Republicans pass the Ryan budget, slashing taxes and putting major reforms in Medicare years down the road. However, the growth promised by advocates of this budget does not materialize, and (as the budget estimates) the federal government runs huge deficits for the first two years of the new president’s term. Frustrated with a series of broken economic promises, voters turn Republicans out in massive numbers in the 2014 midterms. Though Republicans cling to a narrow majority in the Senate, they are wiped out in the House, and an exultant Nancy Pelosi reclaims the title of Speaker.

In passing the Ryan budget, Congress also upped the debt ceiling by a trillion or so, but perpetual deficits mean that the ceiling is coming awfully close, and federal spending is due to break it in early August 2015. So now, in May, the president must go on bended knee to Speaker Pelosi, who demands tax increases as the price for her caucus supporting an increase in the debt ceiling.


The Balanced Budget Amendment Fails the Policy Test

July 19th, 2011 at 9:22 am 12 Comments

Many on the right seem to believe that the balanced budget amendment, while a good idea, may face an uphill climb in terms of being enacted. I think, however, there are considerable reasons to doubt whether this amendment has merit as a policy aim.

The principle of having a balanced budget is a worthy one. Fiscal prudence and discipline are important for any authentic conservatism, but the methods to achieve the end of a fiscally sustainable government also deserve some scrutiny.


How the GOP Benefits From a “Constitutional Option”

July 6th, 2011 at 4:02 pm 5 Comments

As Matt Yglesias suggests, one of the big reasons for the left bringing up the “Constitutional option,” in which the president would override the debt ceiling by invoking the Fourteenth Amendment, is as a bargaining position: it gives the White House the opportunity to say to Republican negotiators that it doesn’t need them and has other options if they refuse to vote to raise the debt ceiling.

It’s pretty clear why the “Constitutional option” could be good partisan politics for Democrats. If the debt ceiling stands and government budgets run into it, we could enter a period of intense economic turmoil. That turmoil could sink the president’s chances of reelection (that is, if he doesn’t successfully deflect blame to the Republicans for the debt-ceiling fiasco). By giving the president leverage, this “option” can also allow him to parry cuts that he or his allies find unfavorable.

However, the “Constitutional option” may also be a partisan opportunity for Congressional Republicans. One of the many dirty little secrets of the current debt-ceiling talks is the fact that many Capitol Hill Republicans are quite glad to have trillions more in national debt. The GOP has voted for budgetary measures that would bust the debt ceiling. Moreover, the Ryan budget, backed by the overwhelming majority of Congressional Republicans, adds trillions to the debt and places most of the savings (some of which are premised on fantastic economic numbers) many years down the road.

But while Republican members of Congress have de facto embraced more debt, they also face a grassroots element and certain self-anointed tribunes of the conservative “movement” who increasingly believe that any vote to increase the debt ceiling is a sign of fiscal capitulation. Many Republicans thus find themselves between the rock of fiscal reality and the hard place of political positioning.

The “Constitutional option” offers the GOP an escape hatch. If Obama used this option, the GOP could keep on voting for massive deficit spending while also not making the politically hard vote about the debt ceiling. Obama’s exercise of the “Constitutional option” would also give Republicans an opportunity to rail against an “out of control” executive branch while not forcing them to do anything to rein in this executive.

The leaders of both parties certainly want the debt ceiling to be raised, but they are trying to find the least politically damaging way to do it. Republicans and Democrats may find that the “Constitutional option” is the easiest way of doing so.

Of course, the use of this “option” would very likely be a ticket to a Constitutional nightmareland and could set up a further corroding of our federal institutions and national consensus. The use of this option may be good partisanship for both parties, but it seems bad politics for the nation as a whole. It would be far better for Congressional leaders to hammer out some compromise that would allow the United States to meet its fiscal obligations over the short and long terms.

Originally Posted at A Certain Enthusiasm.

Remember America’s Potential in Hard Times

July 4th, 2011 at 12:02 pm 10 Comments

It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force. If there be any truth in the remark, the crisis at which we are arrived may with propriety be regarded as the era in which that decision is to be made; and a wrong election of the part we shall act may, in this view, deserve to be considered as the general misfortune of mankind.

—Alexander Hamilton, Federalist No. 1

When Alexander Hamilton wrote those words, the citizens of a fledgling republic faced great challenges: significant debts, the aftermath of a great war, internal divisions, and a seemingly crippled government. Yet the Founders chose engagement rather than alienation and laid the foundations for a great civilization.

It would have been easier for them, perhaps, to have turned on each other.Rather than doing the hard work of drafting the Constitution, they might have rested content with blaming internal political adversaries for all political problems. Instead of negotiation and compromise, they might have drunk deep of vitriol. And, even as the ship of state sunk, a few lucky partisans could have rejoiced at having the last swallow of air.

But they didn’t do so. The Founders chose toil and struggle and deliberation over the cheap narcotic of blame. Wrath over taxation may have started the Revolution, but reason, temperance, and conciliation won the republic. The Founders did not regard government as the enemy; they instead sought to recast government to fulfill a broader vision for civilization.

The legacy of their achievements has come down to us, distilled into the annual festival of the Fourth of July. Why do we celebrate this Fourth? Is it merely a time to rest upon our laurels? To clap ourselves on the back once a year with the comforting pablum that ours is the greatest nation in the history of the world? If so, it is a day of mere self-indulgence. The Founders of this nation did not spend all their time proclaiming the greatness of their land.They did great things to make this a great republic.

In part, we celebrate the Fourth to commemorate the work of our predecessors. There were many sacrifices, failures, and triumphs. We, of course, honor those who have given through military service, and we also remember the labors of great statesmen—such as the Founders, Clay, Webster, Lincoln, Roosevelt, Eisenhower, and others. We think of those who worked to change the course of this nation’s politics, such as Douglass and Anthony and King, as well as those whose enterprises have added to the vigor of our nation—from Emerson to Faulkner, Edison to Salk. Yet we celebrate more than gilt-edged names; we rejoice, too, in the millions of dreams, labors, victories, and struggles of countless private citizens. Those who came to these shores, from the Pilgrims to the present day, who reached from the Atlantic to the Pacific to settle this land, who raised families and factories and houses, who sacrificed and strove and searched—they too have woven the fabric of this nation.

But the Fourth of July is not merely a retrospective holiday. We should also use this moment to reflect on the challenges facing the current republic. Our present trials are legion, as perhaps they always seem. Yet the intensity of these days seems to suggest a nation caught with anxiety about the prospect of its decline.

The power of “reflection and choice” for which Hamilton spoke is counterposed to that of irritation and resentment. Make no mistake: Americans have much to be angry—or at least concerned—about. The new millennium has not been an easy one for this American republic. The pillars of American self-identity have been attacked, including electoral legitimacy, national security, economic success, and sense of freedom.

November of 2000 inaugurated this new era of anxiety, with the most contentious presidential election in well over a century. Whoever had triumphed after election day would have been tainted in some way. George W. Bush, the man who did win, inherited a recession that has since blossomed into a long-term economic stagnation.

The terrorist attacks of September 11, 2001 crystallized the sense of a national identity under attack. The World Trade Center—symbol of American cosmopolitanism, modernity, and economic ambition—and the Pentagon—emblem of the American military order that plays such a role in world affairs—were both attacked by that quintessentially American invention: the airplane. The enemies of Western liberalism and wealth used the very instruments of that civilization to bring it down. For a moment, it seemed as though the nation would rally in response to this challenge—that politics would find a new direction, that the civic compact would be reinforced, that a shock of this trial would rejuvenate our democratic energies. Yet soon enough, this vital force was confronted with a deluge of glib pessimism, alienation, cynicism, and despair. Missteps in the lead up and aftermath of the ousting of Saddam Hussein, continuing challenges in Afghanistan, geopolitical turmoil, and fraught debates about coping with postmodern terrorism have deepened our public disagreements and, in many cases, called into question the capacities of the governing elite. The new homeland security state has had many excesses and numerous missteps. Even as our nation has faced new challenges of terrorism, it has also faced an international order morphing into something (what remains to be determined) at an accelerating pace.

Meanwhile, the economy stumbled along throughout much of the 2000s, fed by the thin gruel of skyrocketing debt, until it nearly fell off the precipice into oblivion during the meltdown of late 2008. Our nation’s finances have not yet collapsed, but growth over the past decade has been slower than at any other period in recent memory and unemployment remains at unusually high levels.The wages of the vast majority of Americans have stagnated even as the wealth of the richest has increased. The present administration came in with great promises, many of which have been broken, discounted, or forgotten.Its economic plans in particular have fallen far short of its own expectations (though the economic plans of the Bush administration ultimately disappointed many as well). Under the prevailing economic conditions of the past few years, our government finances are headed to ruin.

Precisely where our government was supposed to be the strongest, its flaws proved most glaring. The failures of the broader governing class were evident by 2008, though this class has remained mostly untouched by the effects of this failure.

The political pendulum has swung back and forth over the past decade, with increasing ferocity: drifting to the Republicans in 2002 and 2004, hard to Democrats in 2006 and 2008, and back with a vengeance to the Republicans in 2010. As the sense of national frustration has deepened over the past decade, the sense of urgency for each newly-empowered party has heightened. Barack Obama in 2008 was supposed to right the excesses of the Bush administration and restore the sound footing of the economic order and point the way to a brighter America. The Republicans in 2010 were supposed to right the excesses of the Obama administration and restore the sound footing of the economic order and point the way to a brighter America. The similarity here is in more than syntax.

Many partisan orthodoxies have failed, and new paths need to be found. This failure of conventional wisdom has opened up a vacuum in the public space.Scapegoating has rushed to fill it. We live in a time of many scapegoats: the rich, the unions, heartland bigots, the ruling class, faux free marketeers, crypto-socialists, Christianists, atheists, Republicans, Democrats, conservatives, progressives, anarcho-capitalists, statists, and on and on and on. The brain tires at the mere thought of that endless list of endless calumnies, and the body politic is no less exhausted by them.

In a two-party country, it is easy to see why politics has a tendency to focus on assailing one’s opponents: the ballot box is a zero-sum game, and a decline in the other party means a victory for one’s own. But societies as a whole are not themselves zero-sum. The enrichment of one’s neighbors does not imply one’s own impoverishment, nor does one’s own gain in wealth consign others to poverty. The promise of capitalism is, in part, the promise of cooperative enrichment. But there is a dire flip side to this sunny proposition—just as a community can cooperatively become richer, so too can it become poorer.

America cannot afford to cannibalize itself, as citizen turns against citizen.The crucial failure of scapegoating is in its obsession with the fate of a part in order to distract from the fate of the whole. What debilitates our country is not the fact that a union worker (in the private or the public sector) gets fair pay and good benefits; far more problematic is the fact that so many jobs have decreasing pay and winnowing benefits. Honest wealth honestly acquired should be thought of as a value to this republic and not as an injustice. Those with whom we disagree need not be enemies or existential threats to the foundation of the republic.

Instead of indulging in self-destructive antagonisms, we must enter a period of renewing reform. These reforms may have their share of pain, but we ought to use our reason to ensure that this pain is as fairly and as efficiently distributed as possible.

The strength of America comes in part from its faith in its people and in its ability to renew itself. Those who chose to come to America, from whom many of us descend, were willing to embrace change. Those who founded this nation believed in the capacities of a fresh republic, one that would be in accord with the principles of liberty. The American free market is premised on the belief in the broader wisdom of American society (at least compared to that of central planners).

The power of this nation also comes from its striving after the ideal. However troubled their actual enterprise may have been, the Puritans did not rest content with the flawed nature of man but reached for some higher city. The great ideals of the Declaration and Constitution show the ambition of the Founders to use the instruments of government in order to effect a revolution in human life. The abolitionists of the nineteenth century and civil rights warriors of the twentieth often staked their lives on the principle that our nation could go forward and wash away the stains of false bigotry and institutionalized oppression. Great accomplishments have been made not by defeatism but by perseverance and flexibility.

We have inherited both a great nation and a great government. The gleam of the potential of this government, the fruit of centuries of toil, has not, to my eyes at least, dimmed with time. Let us move from thinking of government as the enemy or as a weapon against our private enemies to thinking of it instead as a tool for advancing the greater causes of this republic: life, liberty, and the pursuit of happiness. Government is not the only tool for advancing these causes, but human society is necessarily political, so any approach that would realize these causes must consider the case of government. That very faith in the American people also applies to those citizens who are servants of this American republic; we can have faith that, somehow, politics can go forward, however recalcitrantly, in the direction of virtue.

Realizing government as a tool for advancing those purposes outlined in the Declaration need not be an endorsement in an endlessly expansive government; at times, government can be the best tool by restraining its power, by not involving itself, by not intervening in the ebullience of the private life of this republic. The rights we have may not ultimately derive from government, but government often has a role in guaranteeing these rights. There is, as ever, a careful balancing act here, but many carefully laid bricks help constitute the foundation of this republic.

There comes a time in great societies when their vital force fails. Rome’s citizens chose empire over self-discipline. The German commonwealths, a European flower of learning, diversity, and literature, succumbed to the martial and recriminative temptations of the Kaiser and the Third Reich. Our own nation nearly dissolved in the cataclysm known as the Civil War.

Yet, with great perseverance, our republic survived and broke the yoke of slavery that had weighed so heavily for so many years. Great trials can recast us and renew us—if we have the will to face them. We can either accept a bitter decline or take up the challenges of the day.

Let us not be distracted and let us not despair. The faith of the Revolution was fed by the belief that our problems are tractable. Even if we cannot solve all the challenges this nation or liberal government in general faces, we can at least cope with them.

Let the United States still be, as Benjamin Franklin hoped, the republic of the rising sun. Rather than chewing over the resentments of the past, we should instead seek the triumphs of the future. Now is not the time to surrender to resentment or despair or petty hate. Now is not the time to accept deflecting blame as victory. Now is not the moment to forswear the potential of these United States.

We can still engage in enterprises of reason and merit. However old or frail our hands, we can still reach. Rather than being dirges or complacent ditties, the songs of the Fourth of July can still call us to our higher purposes of fellowship, happiness, liberty, and virtue.

Originally Posted at A Certain Enthusiasm.

Free Trade Isn’t A Cure-All

June 10th, 2011 at 10:48 am 5 Comments

The American economy has entered a period of turmoil unlike any it has seen in decades.

The solutions, to me at least, do not seem radically easy or clear, but the first step in finding a solution is to clarify our language in talking/thinking about the problem. If we are serious about finding ways of addressing some of the serious structural problems of the economy, we must be willing to offer a thoroughgoing analysis of the whole economic order.

The trends of “globalization” have had a huge impact on the American economy in the past 20 years. Yet I think there have been some confusions in our contemporary discussions of globalization, so here are a few (mildly polemical) challenges to contemporary assumptions, focusing on trade and manufacturing policies.

The decline of manufacturing is not like the decline of agriculture. The shrinking manufacturing sector is often mistakenly analogized to the drastic drop in the number of Americans working in agriculture from 1870 to 1950. The current trade deficit, driven by manufactured goods, disproves that analogy. The story of the Industrial Revolution in America is not the replacement of agriculture by manufacturing but the incorporation of agriculture into a new, broader economy. Throughout industrialization, Americans still produced enough food to feed themselves and those in other nations.

For the most part, we still do produce enough food to do so. The number of Americans working in agriculture has declined drastically, but, due to increases in productivity, the output has only increased. While it is true that productivity has increased in manufacturing and that automation has cut down on the number of needed factory jobs (the US still does produce a lot), such an increase in efficiency does not tell the whole story of the decline of American industry: if it did, we would still be producing huge quantities of shoes, computers, tools, and countless other items. The fact that factories are closing down while our trade deficit has skyrocketed over the past 20 years is a sign of how different the fates of manufacturing and agriculture have been.

We do not live in an era of free trade (or: cheap imports do not equal free trade.) Some of those who criticize the reigning trade hegemony counterpose “fair trade” to the dominant “free trade.” This criticism is mis-aimed. We may not have “fair trade,” but we certainly don’t have “free trade,” either.

The current global trade order is not free trade but actually a species of neo-mercantilism. Many developed nations have opened up their economies to an influx of goods from poorer, often autocratic, mercantilist countries. Most importantly for the case of “free trade,” there is often a great disparity in openness between trading partners. These disparities are especially stark for the United States. U.S. policymakers have in a variety of ways unilaterally opened up the American market while allowing other countries to stack the deck against U.S.0 businesses and workers.

We are told that this flood of imports is “free trade” when, in fact, numerous barriers are put up against American products.

Consider our relationship with the People’s Republic of China, our second-largest trading partner. It would be a stretch to declare that this relationship is “free trade.” The PRC manipulates its currency as a de facto tariff against U.S. goods — and piles further outright tariffs on US goods. The price of entry into the Chinese market is often, in part, a joint-venture agreement, in which a foreign company provides intellectual property and other advanced technologies while local Chinese contacts supply workers and land for factories.

Mandating that businesses open up factories in a nation in order to have access to it is not exactly classical free trade.

These agreements are very often deleterious to U.S. workers and U.S. companies. The office-supply manufacturer Fellowes, for example, opened up a joint-venture manufacturing facility in the PRC. For a few years, this factory led to some considerable profits for Fellowes.

In  2010, this stream of profit came to a sudden end, when Fellowes’s Chinese partner moved to take possession of the facility:

The dramatic moment was in early August, 2010, when Zhou, under the aegis of Shinri, blocked the gates of the joint venture facility with security guards and trucks, preventing people from going in and goods going out, effectively shutting down production. Shinri expelled and confined the managers, moved funds from the joint venture to a Shinri-controlled bank account, sent packing the 1,600 joint venture employees, and at night, drove a truck into the facility and stole Fellowes-owned injection molding tools, some of them weighing several tons.

Fellowes’s former partner now has taken possession of millions of dollars of equipment and technological know-how—all without paying a cent (or a yuan) for it. The Chinese government appears to be giving cover to what many would consider theft. Fellowes is but one of many companies that have had their investments and technologies confiscated by the politically connected of the PRC. Without a basic respect for property rights, there can be no capitalistic free trade.

Trade policy does not happen in a vacuum. In part to cope with the throes of industrialization, the United States passed various worker and consumer protections in the twentieth century: regulations for environmental protections, worker safety, wages, and other areas. When the U.S. economy was bounded by tariffs, these regulations helped ensure that an increase in industrial production went along with an increase in the standards of society. However, in our new era of neo-mercantilist globalism, the role of these standards has become considerably more troubled for U.S. workers.

Consider the case of environmental standards.

As the decades have gone on, our environmental standards have become increasingly invasive and onerous. Government more and more regulates chemical usage, energy sources, waste disposal, land use, and other aspects of environmental production that affect industrial policy. The presumed beneficiary of these regulations is the public at large through the protection of the environment. Our laws tell companies that, if you manufacture in the U.S.A., you must face numerous obligations and pay increased costs due to all these regulations. Our trade policies, however, tell those very same companies that, if they manufacture their products abroad, they need not worry about any U.S. environmental or worker regulations.

One might wonder how the environment is helped when U.S. policies incentivize heavy industry leaving a country with some environmental regulations (such as the U.S.A. or many European countries) and going to a country with far fewer (such as the PRC or India).

I recognize that economic prosperity is often correlated with an increase in environmental protections, so a wealthier India may eventually introduce further environmental protections. But there seems to be an often radical disproportion between how politicians talk about environmental policies and what our trade policies actually encourage. The debate over “global warming” reveals this disproportion at the height of its absurdity.

In the name of “global warming,” the federal government has banned the classical incandescent lightbulb in order to cut down on carbon emissions; meanwhile, through trade policies, it has encouraged a gross increase in carbon emissions through encouraging manufacturing to move to nations with radically less efficient and more polluting forms of industrial production.

“Global warming” advocates often stress that the world is at a tipping point for carbon emissions and forecast the deaths of potentially hundreds of millions of people if carbon patterns do not change right now. Many of these same advocates, however, seem to see no problem with the continued destruction of American manufacturing.

A “cap-and-trade” scheme or carbon tax, without any attention to broader global industrial questions, would do little for American employment or lower carbon emissions. If environmentalism is more than NIMBYism and self-righteousness, we need to consider the effects of our current trade policies upon domestic policies.

To acknowledge (or to wonder about) the limits of neo-mercantilist globalism is not to embrace isolationism; on the contrary, this kind of critique opens up further ways of engaging with the broader community of nations. It would be foolish to turn our economic or political backs on the world, and a tariff war would very likely create more problems than it would solve.

But it would equally foolish to allow our thinking to be frozen by hazy myths and knee-jerk assumptions.

The theory of free trade does have much of value to it. Under the right conditions, trade between nations does lead to a rising tide for all boats. There have also been many benefits to the current neo-mercantilist order, though some of the implicit tensions of this order have risen to the surface during the last few years of economic turmoil.

Yet, living within this order, the United States must find ways to renew its competitive edge and successfully compete with mercantilist powers. It might also, with its allies, consider how best to revise this order so that it better advances the ideals of freedom and prosperity.

Originally published at A Certain Enthusiasm.

Romney’s Mediscare Defense

June 1st, 2011 at 12:23 pm 6 Comments

Democrats seem to have latched onto an electoral strategy for the 2012 campaign. With an economic slump that is the worst in many a decade, ballooning deficits, the Obamacare debacle, a foreign policy that has not exactly met campaign promises, and a restless populace, Obama and his allies have hit on a three-syllable campaign slogan: Medicare.

The congressional special election in NY-26, a rout for Republicans in a GOP-heavy district, has only fueled Democratic speculation that they can ride Mediscare tactics to victory in 2012. (Yes, a faux-Tea Partier in the race may have influenced the results, but Republican Jane Corwin was leading in polling before Democrat Kathy Hochul went full Mediscare.)

In a striking turn of events, Mitt Romney may find Romneycare more of an electoral advantage than a headache: this legislation could insulate him from Mediscare tactics. Many other Republican candidates (such as Michele Bachmann) voted in favor of Paul Ryan’s budget or have endorsed it; Tim Pawlenty has quibbled with the budget but has said he would sign it under certain conditions. While Romney has said that he is “on the same page” as Ryan, he has not endorsed Ryan’s budget and has said that he will propose his own plan for Medicare reform.

The fact that, under Romney’s watch, Massachusetts implemented a set of health-care policies that gives coverage to over 98% of state residents can protect him from the charge that he wants to finance more tax cuts by leaving seniors out in the cold. By not having endorsed Ryan’s plan, Romney can agree with it in the spirit of market reforms without having to defend its particulars.

This combination could blunt one of the Democrats’ biggest knives. Imagine the following exchange from a presidential debate in the fall of 2012:

Barack Obama: The Ryan budget, overwhelmingly backed by Congressional Republicans, would end Medicare as we know it for all those under 55, who would be left with vouchers to purchase insurance from private companies. These vouchers would only rise in value at the rate of inflation, and health-care costs have risen faster than inflation for decades. Governor Romney and the Republicans want to end our nation’s decades-long commitment to care for the elderly. They would hold our seniors hostage to the whims of private insurance companies.

Mitt Romney: Mr. President, while I have my differences with the Ryan budget, let’s face the facts. When I was governor of Massachusetts, I crafted legislation that ensured health-care coverage for over 98% of state residents. I worked across the aisle with Republicans and Democrats to forge a compromise to expand health-care to all citizens of the Commonwealth. While this compromise was not perfect and cannot be completely adapted to the federal level, it was a step in the right direction of accountability and fairness. Rather then putting health-care under central government control, it unleashed the power of the market to expand health-care access.

Under your health-care proposal, Mr. President, over $500 billion will be cut from Medicare over the next decade. Under your plan, Mr. President, a fifteen-member panel will set price controls for Medicare. Your plan forces a one-size-fits-all mandate model on all fifty states. You’re already cutting Medicare. My record shows that I have not and I will not expand health-care coverage by taking away from our seniors. I believe that market-oriented reforms can eliminate waste and cut soaring costs while also improving care.

Romneycare can give Romney cover to push for market-oriented reforms. If he is a crypto-socialist, as some of his detractors allege, he can’t also be an anarcho-capitalist ready to kill off grannie. Romney can attack Obamacare’s cuts to Medicare while also deflecting the charge that he is a heartless Medicare-cutter himself. Moreover, Romney can distinguish between Obamacare and his own health-care reforms: on Medicare cuts, the federal mandate, centralized government control, and other features.

As only Nixon could go to China, perhaps Romney is uniquely positioned to advance market reforms of Medicare.

(Disclaimer: the debate over entitlement reforms is quickly evolving, so the dynamic noted here might not be found even a few months from now.)

Originally posted at A Certain Enthusiasm.

Admit it, GOP: Ryan’s Budget Isn’t Perfect

May 25th, 2011 at 1:49 pm 18 Comments

(NB: This is not addressed to any specific individuals. I also believe that supporters of the Ryan budget have every right to make their case as strongly as they can. This more addresses a particular mood.)

Maybe it’s me, but some of the intra-right debate about the Ryan budget is sounding increasingly like the debate over Christine O’Donnell in 2010: focusing more on sending a message than on advancing conservative goals.

A couple preliminary facts: the Ryan budget has NO chance of passing until 2013, and, at the moment, it is not very popular.

Knowing both of those facts
, the House Republican caucus decided to vote overwhelmingly in favor of this measure. Fair enough. Leadership had its reasons. Many House members walked the plank on this vote, and that gamble may prove to be helpful for conservatives shaping the debate in the future. That die is already cast.

House Republicans and the Republican establishment may feel the need to circle the wagons to defend that vote. That is also fair or at least understandable.

But what is dangerous is a crusade against any Republican who dares to criticize the Ryan budget. That budget is not perfect, to say the least. The Republican and conservative causes are not strengthened by an attempt to enforce a petty ideological orthodoxy (the Bush years suffered from this tendency toward uniformity).

Republicans derided Democrats for forcing through Obamacare, an ambitious, radical measure with weak popular support. Democrats and progressives twisted countless arms to impose their vision on an unenthusiastic America. The backlash from this measure helped sink Democrats across the country. Republicans should not fall into the same trap, especially for a measure that will never become law until, potentially, after the next election.

The number one electoral goal for Republicans at the moment should be putting forward the most credible, competent, and electable conservative candidates possible—not (forgive me, Mr. Chairman) fighting and dying on the hill of the Ryan “roadmap.” Passing the Ryan budget may be part of the victory for free-market conservatives, but we should not fetishize a single piece of legislation to the detriment of all else.

For those who believe that there is an entitlements crisis—no, a national emergency—that needs to be stopped RIGHT NOW!!!!—forget about the Ryan budget. It would add trillions of dollars to the debt in the next few years. Its major reforms for Medicare would not be substantially felt for well over a decade; Medicare as we know it would continue for everyone who is over 55 by the time it passes, and, for a while after that, the majority of people on Medicare would have the old-school variant.

If we are at fiscal/entitlements Armageddon, the Ryan budget is a failure. If we are not at that point, this budget may be more helpful. Under either circumstance, there is no need for such strident denunciations of those who would dare to criticize it.

Scott Brown voting in favor of the Ryan budget on the Senate floor in 2011 will do absolutely nothing to advance the cause of fiscal conservatism; indeed, voting for it may hurt that cause, since such a vote could very well hurt Brown’s chances of reelection. Though Newt Gingrich may have used inopportune language in criticizing Ryan’s “roadmap,” he is well within his rights to suggest the limitations of this plan.

Any Republican presidential candidate (or any Republican candidate at all) who wishes to distance himself or herself from the Ryan budget and propose entitlement reforms of his or her own has every right to do so. And this critique should not be necessarily confused with a forfeiture of all conservative principles. If the Ryan budget is so important for a GOP presidential candidate, then Ryan himself should run for the White House.

Sending a message to show that you’re “serious” about fiscal reform is the mere hysteria of Washington kabuki. Reducing unhelpful spending and cutting the deficit and reforming derelict programs—those are the things that really advance fiscal conservatism.

Oh, and back to Christine O’Donnell: she lost big, and Senator Chris Coons is highly unlikely ever to vote for anything closely resembling the Ryan budget. The emphasis should be less on attacking Republicans for daring to dissent and more on persuading those dissenters and the public at large why the Ryan budget is a good idea (as Ryan aims to do here). Turning one’s back on RINO traitors may be a cathartic move, but it does little to advance real conservatism. When conservatism becomes the politics of rage and exclusion, it loses; when it becomes the politics of hope and engagement, it wins.

Originally posted at A Certain Enthusiasm.

GOP Picks the Wrong Spending Fight

May 16th, 2011 at 8:20 am 8 Comments

One might note within many ostensibly conservative discussions about the debt ceiling a strain that comes far more from Leon Trotsky than from Edmund Burke. One of the principal tenets of Burkean conservatism is the importance of avoiding Armageddon: crises are best held at arms’ length, and revolution should be the measure of last resort.

Not raising the debt ceiling now could very likely be Armageddon: it would immediately force the government to spend no more than it took in in taxes. In 2010, tax revenue covered not even 60% of federal spending, so over 40% of the federal budget would have to be cut NOW to make up for it. Unemployment benefits–ended. Air Force jets–grounded. You need heart surgery, grandma? Maybe next year.

Not raising the debt ceiling would not necessarily lead to defaulting on the debt: the US could still make its interest payments. However, some prominent Republicans are now suggesting that even defaulting on the debt wouldn’t be that bad. Since the election of George Washington, the federal government has never defaulted. Is it really worth throwing that legacy away to make a political point? Defaulting on the debt would very likely lead to higher interest rates and make the debts of private individuals as well as those of many governments even more onerous. An outright default could wreak havoc on the domestic and global financial systems.

Such an outcome could be a sure way to reduce the Republican party to the party of the 30% and make it radioactive for years to come.

And that political price would be by far the least problematic result of that scenario for allies of traditional liberty and conservatism. Deficit spending may perhaps be an important reason why we have not seen turmoil in the streets a la Greece, Egypt, and the waning days of the Roman republic. In terms of employment, this is the worst economy since the Great Depression. The social safety net is being strained in extraordinary ways, and the sudden cuts required by not raising the debt ceiling could be the equivalent of cutting it away. With those cuts to institutions that people have built their lives around (such as Social Security), a huge cross-section of this nation could erupt in rage.

Mob outrage is almost the polar opposite of classical American conservatism, and, if we did come to such public turmoil, there is no guarantee that the result would be a more economically free society.

One realizes that much of the debate over the debt ceiling is an exercise in partisan cynicism. Every Democrat opposed raising the debt ceiling in 2006, while almost every Republican (including the leading opponents of raising the debt ceiling) supported the raise in 2006. Meanwhile, almost every single House Republican has de facto pledged to raise the debt ceiling by voting for the Ryan budget, which gives us trillions of dollars in more debt over the next few years. House and Senate Republicans overwhelmingly backed nearly a trillion dollars in tax cuts and stimulus spending at the end of 2010. The premise of those tax cuts and stimulus spending was that they would push the economy along, even though those measures will, in the short term at least, add to the debt. By their votes, Congressional Republicans have declared that this nation can handle more debt.

The whole debate over raising the debt ceiling is also, in part, a game of chicken: Republicans want to force more spending concessions and potential entitlement “reforms” from Democrats. But something of the complexity of entitlement reform is perhaps the last thing that should be rushed; Republicans should not want entitlement reform to replicate Obamacare (and other measures), when Congress is voting on unread and uncomprehended bills.

Ironically for authentic opponents of debt, not raising the debt ceiling and defaulting on the debt could make the federal debt that much worse. One of the driving forces for federal debt over the past few years has been the poor economy: the economic slow-down, with its resulting decrease in tax revenue and encouragement of government spending on unemployment benefits and so forth, is probably the single biggest contributing factor to our current deficit. The poor economy is an immediate dagger aimed at the fiscal heart of this nation.

In order to keep from hitting the debt ceiling, Republican leaders may find it wise to offer their support for a relatively small increase of the debt ceiling (say a few hundred billion or even a trillion dollars). Classical conservatism teaches that, sometimes, if you can succeed in delaying a crisis enough, your prudence can ensure that there will be no crisis at all. Sometimes that strategy fails (witness the Civil War), but it can often succeed. And even if delay fails, sometimes that delay allows you time to gather your forces to help you cope with the eventual crisis; at least the Civil War didn’t happen until the Union was strong enough to weather such a war. Many of the trappings of the current federal government are sustainable, especially with modest long-term reforms. The long-term fiscal situation of the nation may be somewhat scary, but it can be improved. Kicking the can down the road isn’t always a bad thing, not if it gives you time to solve the problem. From a classical conservative perspective, inciting a crisis now in order to avoid a potential crisis in the future may be a bad trade.

Originally published at A Certain Enthusiasm.

Can Mitt Move Beyond Romneycare?

May 11th, 2011 at 8:13 am 37 Comments

It’s perhaps hard not to feel some sympathy for the situation Mitt Romney has found himself in. By the close of the 2008 Republican primary, he was seen as the standard-bearer of conservatism, picking up the support of the likes of Ann Coulter and Jim DeMint. Yet now, he finds himself attacked as a lefty RINO and utter traitor to the conservative cause—for Romneycare, a measure he backed in 2006. Romney’s record as governor did not change from 2008 to 2011 (he stopped being governor in 2007), but the perception of the conservative commentariat has. Notoriously derided as a flip-flopper, Romney has now found that some in the right-leaning punditocracy have flip-flopped on him. And these attacks on Romney emphasize not merely how the partisan optics have changed since 2008, which they have, but often criticize his politics on a much deeper, ideological level.

The Massachusetts health-care law has become an albatross around the neck of the man who could maybe almost be the Republican front-runner. The passage of Obamacare made health-care reform a central litmus-test issue for grassroots conservatives. The fact that the Obama White House boasts of similarities between Romney’s reforms and Obamacare is not going to endear Republicans to Romney.

From the perspective of free-market conservatism, the reforms Romney sponsored have not been a resounding success. The rate of health-care uninsurance in the Bay State has dropped significantly, which is good (over 98% of the Commonwealth has health insurance). Wait times have potentially increased a little, though trends for longer delays for receiving care were in place before Romneycare passed. But costs are exploding. Romney’s Democratic successor, Deval Patrick, is now looking to create a regulatory infrastructure to control insurance rates (and thereby doctor pay) as a way of coping with these skyrocketing bills. With unchecked Democratic power in Massachusetts, further state control of health-care delivery may be only just around the corner. Unless further reforms are made, Romney’s health-care reform may prove to be quite the shot in the arm for private health-care in Massachusetts: a lethal injection.

So Romney’s big speech on Thursday may prove to be a necessary but also somewhat desperate gamble. Faced with the (perhaps unfair) public perception that he is an opportunist who will shift in whatever direction may benefit him the most, Romney seems to have decided that he cannot utterly repudiate the Massachusetts health-care law. The fact that he has spent so many years defending these reforms would give a repudiation now an especially high political price.

Either a total defense of Romneycare or a total repudiation of it could damage his image in the eyes of grassroots conservatives and potential swing voters. Successfully resolving the health-care issue could help scrape away some of the veneer of artificiality so many voters have doubts about while also burnishing his conservative bona fides. Here are some thoughts about what Romney might want to achieve politically in this address:

Make clear the distance from Obamacare: Romney may attack Obamacare as inefficient, destructive, problematic, and so forth, but he should particularly emphasize those features of it (such as the 50-state mandate) that differ from the Massachusetts reforms. Attacking Obamacare is bound to win applause from righties. But Romney’s attacks will ring hollow if he has not posed enough plausible distance between his policies in Massachusetts and those of Obama.

Build on the strengths of Romneycare: There are some positive, free-market features of the Massachusetts health-care law, which the Heritage Foundation praised. Romney could tout those.

Show technical expertise: The ability to maneuver through complex bureaucracies will be key for any potential Republican administration. Romney has a wealth of experience in running large organizations and a considerable proficiency with the details of policy. His speech on Thursday can showcase those skills. This speech doesn’t have to be—and probably shouldn’t be—a total wonkfest, but a suggestion of Romney’s wonky tendencies would play to his strengths as a credible, center-right technocrat.

Move the debate forward: This is perhaps the most important political objective for the speech. If Romneycare dominates his Republican primary narrative (including both his campaign and what is said about his campaign), Romney loses. Game over. In this speech, Romney needs to change the topic to present a forward-looking approach to federal health-care reform (which he looks likely to do). Romney knows that even the all-out repeal of Obamacare will not be enough for our nation’s health-care system, which does need reform. Moreover, every serious Republican candidate is probably going to talk about repealing Obamacare. By focusing on a specific set of policies for a way forward, Romney can distinguish his candidacy from the rest of the pack. For his political survival, Romney must make this campaign about the future.

Moreover, the right does need creative ways of trying to reform the health-care system to make it more affordable and efficient. Such a tangled web of government/non-profit/for profit institutions has been set up that any reform will have to be as careful as possible to avoid any drastic and unpleasant unintended consequences. By focusing on the future of health-care reform (both for the private market and for Medicare, Medicaid, and other government programs), Romney can keep the past from sucking all the air out of present debates.

This could be a pivotal speech for Romney. If Romney can prove his viability on the health-care issue, he could start to solidify a core of support. If he cannot resolve the public perception of his health-care policies, he may find himself limping along and find the path to the nomination that much harder. Moments of testing can make or break a candidacy, and this may be one such moment.

Originally published at A Certain Enthusiasm.