“America must move off a permanent war footing,” said Barack Obama in his fifth mockery of the State Of The Union address. He coupled these words with a commitment to “keep strengthening our defenses” at home – meaning enhancing the very “homeland security” measures that are the essence of that war footing. Then, confronting popular outrage against the most serious of those permanent war measures, namely the NSA’s collection of ordinary Americans’ electronic communications, Obama cunningly pledged only to enhance confidence in them, having made clear elsewhere that he would not alter their substance. Continue Reading →
Liberty Law Blog
So the Motor City, through its emergency manager, has submitted to its numerous creditors a plan—still under wraps for now—to deal with its $18 billion debt. It’ll be interesting to learn what they propose to do about investors (screw ‘em, but how badly?); about pension costs; and about the city’s huge unfunded health costs. (Fearless prediction: a transfer of those costs to the feds, either through Medicaid or an ACA Exchange, will have to be part of any deal.) It will also be interesting to see just how the city proposes to pay its obligations going forward. That’s not just a numbers game; it’s about confidence. Not to be rude or anything but the city has proven to a certainty that it cannot govern itself. Who’s to say that once it emerges from Chapter 9, it won’t go back to fun and games?
In closely related news, State Budget Solutions has just issued its fourth annual report on state debts. Total debts clock in at an estimated $5.1 trillion, of which $3.9 trillion consists of unfunded pension obligations. (That number is based on market-value accounting; for reasons explained by Andrew G. Biggs here, that’s the right way to go about this.) Some states are in much worse shape than others; the report has the breakdown and the gory details.
The upside, in a manner of speaking, is that the eye-glazing numbers are becoming real and comprehensible. Here is AEI’s Mark J. Warshawsky in RealClearMarkets:
Two problems have become increasingly apparent and immediate: the legacy obligations promised to retirees and workers just about to retire, and the funding and nature of retirement benefits being accrued now and in the future by younger and future state and local government workers. The first problem is larger in size and concern because those retirees and long-service workers are legitimately worried that their retirement benefits promised by fiscally challenged sponsors and backed by severely underfunded plans are now highly uncertain and unsustainable and subject to arbitrary and chaotic cuts in the bankruptcy and political processes operating today. Moreover, many of these retirees, again owing to poor past choices by their representatives and employers, are not even covered by Social Security, and therefore extremely exposed to risks in retirement.
Loose translation: the wolf is at the door. You can fiddle with long-term plans and benefits for future employees all you want—the liquidity and solvency problems are here, now. What’s the answer?
One solution would be to offer these retirees and older workers a lump-sum payment representing a significant, but not necessarily full, share of the actuarial value of their promised benefits.
Yank this stuff off the states’ books and let the annuities be managed by outfits that know what they’re doing.
I’m not at all sure that this idea will fly, politically speaking. But then, what’s the alternative? What is being discussed, Warshawsky darkly notes, is a federal bailout either through Social Security or the Pension Benefit Guaranty Corporation—both of which, for what little it may be worth, also have solvency issues.
A year or so ago I would have said, “that can’t possibly happen.” I’d still bet against it, but I am no longer so confident.
I am grateful for to Peter Lawler for his interesting comment on my post. I agree with much of it. My focus in The State of Our Liberty—an implicit response to the State of the Union– was on the effects our government is having on liberty, which I think are generally not happy. Lawler believes, and I do as well, that technological developments may nevertheless help foster liberty.
Indeed, I am even somewhat more optimistic than Lawler in this regard, because I do not believe technology poses as much risk to equality as he appears to think. As I have written on this blog, technological innovation helps equality in important respects, because innovations create a pool of cheap and free goods that everyone soon enjoys. Middle class people and the very rich have more equal lives today than did the middle class and very rich in previous times, because both spend an increasing amount of time on the internet and their experience there is not dissimilar. And innovations like smart phones go down the income scale much more rapidly than do previous innovations like refrigerators.
Moreover, the social media of today equips a much broader group of people to spend a large part of their lives writing and otherwise expressing themselves through blogs and even Facebook postings. As Clive Thompson has written in his excellent book, Smarter than You Think, the personal creativity enabled by social media dwarfs that of the letter writing of old. Thus, I do not agree that even a robotic future will relegate people to lives of passive entertainment, which appears to be the view Peter Lawler ascribes to Tyler Cowen. They will be able to follow their passions in ways that are inexpensive and largely free. Continue Reading →
- A New Birth of the Old Freedom: David Upham in our Books feature this week reviews Gerard Magliocca’s new biography of John Bingham and his Fourteenth Amendment:
As to Magliocca’s second claim—the revolutionary character of the Amendment—the evidence that he presents is flatly contradictory. As far as Bingham was concerned, the Amendment served to renew and restore, and not overthrow, the Framers’ Constitution. While Magliocca concludes that Bingham and his colleagues “created” a “new multiracial Republic,” many Republicans, including Bingham, had always believed that the Republic was multiracial and had rejected Taney’s holding in Dred Scott in favor of the common law rule of birthright citizenship. For them, the Citizenship Clause was merely declaratory, corrective of erroneous interpretation.
As to the rest of section 1, Bingham repeatedly insisted that the Amendment was not revolutionary; it would not take away any rights from the states, but would merely provide new security for the old rights of citizens and persons.
- Scott Sumner @EconLib looks into the secret world of Keynesians:
When you read Keynesian blogs you get the impression that Keynesians think their model has been somehow confirmed by the events of the last few years. And yet figuring out what their model actually predicts can be maddeningly difficult, like nailing jello to the wall.
- Don’t miss this Fed-Soc Podcast on reforming the FISA Court.
- Charlotte Allen revisits the neighborhood the Kelo decision destroyed.
- Meanwhile, Back in America: Peggy Noonan’s Friday column hits the mark:
The State of the Union was a spectacle of delusion and self-congratulation in which a Congress nobody likes rose to cheer a president nobody really likes. . . . This year’s innovation was the Parade of Hacks. It used to be the networks only showed the president walking down the aisle after his presence was dramatically announced. Now every cabinet-level officeholder marches in, shaking hands and high-fiving with breathless congressmen. And why not? No matter how bland and banal they may look, they do have the power to destroy your life—to declare the house you just built as in violation of EPA wetland regulations, to pull your kid’s school placement, to define your medical coverage out of existence. So by all means attention must be paid and faces seen.
I watched at home and thought: They hate it. They being the people . . . But you look at the polls at how people view Washington—one, in October, had almost 9 in 10 disapproving—and you watch a kabuki-like event like this and you know the distance, the psychic, emotional and experiential distance, between Washington and America, between the people and their federal government, is not only real but, actually, carries dangers. History will make more of the distance than we do. Someday in the future we will see it most vividly when a truly bad thing happens and the people suddenly need to trust what Washington says, and will not, to everyone’s loss.
I appreciate John McGinnis’s account of the state of our liberty. He’s right that by some objective measures liberty is on the decline. But, a consistent individualist might say, liberty is on the march when it comes to same-sex marriage, legalized marijuana, and the general front of “lifestyle liberty.” Continue Reading →
In the past, I have blogged about both of these issues, and so I thought I would report some updates on them. First, the FDA is finally getting around to allowing additional college students access to the vaccine for meningitis B.
Ten months after a potentially deadly meningitis type B infection struck American college campuses, the federal government is finally getting around to making life-saving vaccines available to students at the affected schools.
Students at the University of California, Santa Barbara will have access to a vaccine broadly used to prevent the disease throughout the industrialized world, within “several weeks,” the Centers for Disease Control and Prevention claims, hopefully bringing one of the U.S. regulatory state’s most shameful chapters to a conclusion.
However soon the vaccines arrive in Santa Barbara, it will be too late for Aaron Loy, an 18-year-old freshman lacrosse player who underwent a double amputation after contracting meningitis B in November, more than eight months after the first case of the bacterial infection was isolated at Princeton University, 2,500 miles to the east. Loy is one of a dozen students who came down with the disease that kills, on average, 10 percent of those who contract it. Continue Reading →
One of the great advantages of the ever-increasing plethora of rights conferred upon us by government (except that of keeping the product of our own labor) is that it requires lawyers to adjudicate between them when they conflict, as they so often do. It prevents unemployment among the ever-increasing number of lawyers: and you have only to consider the career of Robespierre to know where the disgruntlement of lawyers may lead. Continue Reading →
The state of our liberty provides the best measure of the state of our union, at least in times of relative peace. It was liberty, after all, that our union was meant to secure. And the news here is not happy. Our economic liberty is on the decline as measured by the annual Heritage report. We have fallen out of the top ten of the nations with greatest freedom to create, trade and keep the fruits of our labor. While Congress had made some cuts in discretionary spending, the entitlement state is on track to take an ever greater share of GDP. And civil liberties have hardly been advanced by the systematic snooping of the NSA.
But beyond these objective indicia, there are deeper signs of trouble for our culture of freedom. The bailout of Wall Street suggested that the government protects the financiers and the one percent. This action in turn has energized the forces of envy that are always just below the surface in a democracy. The election of Bill DiBlasio as Mayor of New York on a theme of two cities shows that the movement is taking virulent political form.
Some might argue that Tea Party shows that the founding spirit of Don’t Tread on Me is alive and well. Continue Reading →
My colleague at the University of San Diego, Matt Zwolinski, has done some great work on libertarianism. He is the founder of the Bleeding Heart Libertarian Blog and has been doing work on drawing out what might be termed left wing conclusions from liberarianism. Back in the day, when I used to work on libertarian theory, I was very interested in this side of things, often wondering whether unjust actions by the government might justify transfers to the poor.
Matt recently wrote a piece seeking to explore the justifications of a guaranteed minimum income, and now he has written a follow up that seeks to justify it based on a republican conception of liberty and on Hayek’s writings.
Matt explores Hayek’s idea of liberty and coercion. In Hayek’s view, your employer does not coerce by demanding certain terms of employment, even pretty intrusive terms, so long as you have alternative places of employment available to you.
Matt, however, doesn’t believe this argument will always work:
But even if market competition is often a good check against private dominance, there is no good economic reason to believe that it will always be sufficient. Can we really dismiss the possibility that hard economic times, combined with an excess supply of labor and a small number of employers, will leave some employers with considerable market power over their workers? Are we really willing to say that each and every one of the outrages documented by Bertram et al. [involving harsh condition on employees] is the product of workers’ free choice, rather than (what they appear to be) something imposed on workers against their will by those who wield power over them?
If libertarians are concerned to protect the freedom of all, and not just the freedom of most, we will want some mechanism that catches those who fall through the cracks left by imperfect market competition. We will want, too, some mechanism for protecting individuals whose economic vulnerability renders them vulnerable to domination outside the marketplace – the woman, for example, who stays with her abusive husband because she lacks the financial resources to support herself without him.
Cases such as these point the way to a freedom-based case for a Basic Income Guarantee, of the sort that Hayek might very well have had in mind. A basic income gives people an option – to exit the labor market, to relocate to a more competitive market, to invest in training, to take an entrepreneurial risk, and so on. And the existence of that option allows them to escape subjection to the will of others.
I have various concerns about this argument. First, I wonder how poor someone needs to be in order to be subject to such domination. For example, if they could find another job, but at a considerably lower wage, would that subject them to domination, even if that wage turned out to be greater than others in their society or greater than the average person living in Mexico? Person A may find intolerable a situation that person B lives in and finds acceptable.
My main concern, though, relates to the number of people who are in this situation of being dominated relative to the number of people who would receive the minimum income. My guess is that most jobs do not involve intrusive or unattractive conditions and that only a relatively small subset of them are the result of the absence of alternatives. Matt does not deny that this might very well be the case.
If there are very few in this situation, then is it proper to impose a tax on everyone to fund a program that will prevent coercion of very few? One might argue that it is improper, because the tax itself is a form of coercion and will be imposed on everyone. Still, I suppose that Matt might respond, as Hayek often did, that so long as the tax is a general one, its most harmful aspects as coercion will be neutralized. But I am not sure that this is an adequate answer when so much of the fund goes to people who are not really subject to domination.
In the end, when one looks at a guaranteed minimum income, its most obvious and greatest effect is not to protect people from coercion of the sort Matt identifies, but instead to provide income to people who are in poverty. That is the dominant effect of the program and that is the main reason why I believe Hayek supported it. It just seems like the tail wagging the dog to attempt to justify it as preventing the kind of coercion Matt discusses.
Many Americans believe that the Fourteenth Amendment created “birthright citizenship.” By this logic, any person born on U.S. soil is an American citizen. That is an interpretation, and not the most natural one, of the phrase, “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”
The key question is what does the phrase, “subject to the jurisdiction thereof” mean? The prevailing view, at least in our political class, and among activists, is that it means subject to any jurisdiction. Hence most Americans, even lawyers who ought to know better, think that the children of people who came to America on tourist visas, or no visa at all, are American citizens. Continue Reading →