On Banning Commenters

Anchor Rising's policy on deleting comments and banning commenters is being turned up a notch. If you're commenting on this Web site, you're doing so to advance a conversation. Some of you are using comments as an outlet for political spin... and that's alright, too. But when the comment sections get to the point that contributors dread rhetoric for which their posts are providing platforms, things have gone too far.

Ultimately, all we ask is civility, a measure that has apparently been too loose thus far. As of now, obvious logical fallacies bearing offensive insinuations will no longer be tolerated. Example:

... you must be that special type of guy who catches his wife sleeping around but pretends that nothing happened instead of throwing her out. ...

Unless you enjoy seeing your no-good wife sleeping around with other guys....

I'm well aware that some will argue that such rhetoric stays on the fair side of debate, and in some contexts, I might agree. In the context of this Web site, however, we've unlimited latitude to decide the tone that we believe to be most consistent with our goals. In lieu of the work of installing a registration system — which may scare away many a valuable commenter — and of ceasing comments altogether, an increasingly strict (as needed) editorial policy seems like a reasonable approach.

Of course, sincere explanations — and apologies, if necessary — can lead to unbanishment.

The RI GOP's Big Tent Must Be for Sleeping

On gut impulse, I attended the Republican Party's convention last night. Given how busy I am, it turned out to be a huge mistake. I'll put it this way: the Rhode Island Republican Party is so dull that it can suck the excitement right out of Steve Laffey. When members of the party are inclined to lean over into the press box to empathize about boredom — even expressing astonishment that Dan Yorke, who didn't "have to be here," had cared enough to show up — you know there's a problem.

For one thing, the pacing of the thing was horrible. Granted that conventions involve a bit of process, such as the delegates voting for nominees, but they also ought to stir the base and create buzz in the media. I had to leave during the governor's acceptance speech just after nine o'clock (and I'm sure Andrew will post on any subsequent excitement), but the only bit of political theatre that I saw came when Lincoln Chafee — he of the scripted hand gestures — finished his acceptance speech and John McCain's voice suddenly blared over the speakers while a parade of Chafee supporters marched around the delegates. Of course, with magnificent symbolism, there was a mass exodus of the Chafee people thereafter. Those looking to Chafee to build the party more broadly in the state, it seems, would do well to look elsewhere.

Most notable, though, was the absense of the pot-stirring opposition. Dennis Michaud, running for governor, had some signs hanging from the balconies, but he didn't even bother (or manage) to find somebody to nominate him for party endorsement. (According to Scott MacKay and Elizabeth Gudrais, Michaud appeared early on, but made his exit.)

Worse, Steve Laffey's boycott of the event apparently carried over to his supporters, and like charade-candidate Michaud, he failed even to be nominated. A rumored Laffey-crowd walk-out didn't materialize. With the only mention of his name being those made in nomination speeches for other candidates, Laffey might as well have been a member of a different party.

And that, to my mind, is why Laffey was the big disappointment of the evening, especially in contrast to the life that he brought to the convention a couple of years ago. Effective rebels find ways to highlight imbalances and injustices; they don't assist in masking them by allowing themselves to be made irrelevant. If Laffey were truly the RI GOP's subversive hope, he'd have at least found a way to stoke the doubts that those bored Republicans have in the party as currently constituted. As it was, we would have been better off staying home. And as it is, Republicans in this state will continue to need, as Chafee put it, "the votes of independents and Democrats to win." Perhaps they should be invited to the conventions, as well.

ADDENDUM:
I do have some photos and video that I'll try to add later.

Laffey and Chafee on Yorke Show

{NB: This started as a brief re-cap of Mayor Steve Laffey's amicable return to the Dan Yorke show. Subsequently, State GOP Party official Chuck Newton and Senator Lincoln Chafee appeared.}

Cranston Mayor Steve Laffey and WPRO's Dan Yorke have buried the hatchet, hence, Laffey was on Yorke's show today to discuss the Senate race and why he would not be attending what he considers to be tonight's "fixed" RI GOP convention.

For the first time that I've heard, Laffey took on the accusation that he wasn't "senatorial" enough. He stated that if being "Senatorial" meant hanging out with Robert Byrd and doing nothing, then he never would be "Senatorial." He said that he's a reformer and that the actions of the Senate show that things need to be shaken up and that he plans on doing just that.

From there, he also explained that he wanted to shake the hold that the Old Line members have on the State GOP. He said they're happy with the scraps they get from the Democrats, don't want to rock the boat (and just want to collect fees for services) and they didn't want to win. He than offered that, "Luckily those people are old and are dying." He said that he's interested in building the State Party anew, from the ground up. Finally, he noted that Cranston was the only place that has seen a growth in GOP registrations in Rhode Island. He also that Governor Carcieri was not part of the Old Guard and affirmed his support for the Governor and his agenda.

Chances are that Yorke will have the audio somewhere here, eventually.

UPDATE: Chuck Newton of the RI GOP called in after Laffey and was on. When asked about Mayor Laffey skipping the convention, Newton stated that they'd been trying convince Laffey to attend. Newton observed that Laffey has been "bragging" about being the only real Republican and then he is stiffing the GOP convention. According to Newton, politics is about process and the convention
is part of that process.

Yorke offered that perhaps Laffey was afraid of getting "his head handed to him." To this, Newton mentioned that someone had pointed out that at the straw poll in Newport a few weeks ago, Laffey didn't show up at, but he won. Thus, Newton didn't know if a fear of losing was keeping Laffey away.

Newton also believes that an endorsement of Chafee is not a "slam dunk." Though he did assert that the Laffey campaign hasn't been focusing on convincing the delegates of the state central committee to vote for him.

SIDE NOTE: By the way, I'm awaiting the Mea Culpas from those who stated that Sen. Chafee would be running as an Independent. (Just stirring the pot).

UPDATE II: Senator Chafee spoke with Yorke on the air during the 5 O'Clock hour and offered two basic themes. His primary point was that he was the only electable Republican vs. Whitehouse, especially since Mayor Laffey enjoys nearly 100% name recognition and still polls 30 points lower than Whitehouse. Secondarily, Chafee believes that Laffey is being disrespectful to the GOP by not showing up at the convention.

Bill Harsch to File Ethics Complaint Against Patrick Lynch

The Associated Press (via the Projo's 7-to-7 blog) is reporting on Rhode Island Attorney General Patrick Lynch’s acceptance of campaign contributions from a lawyer representing the DuPont Corporation at around the time that the lawyer and Lynch were negotiating Dupont's release from any liability in the Rhode Island lead paint trial…

Attorney General Patrick Lynch accepted campaign contributions from the chief negotiator for DuPont Co. at the same time he was in talks with the company to drop it from the state's landmark lawsuit against former lead paint companies, according to documents obtained by The Associated Press.

Attorney Bernard Nash, who represented DuPont, negotiated the deal reached with the state in June 2005 to drop it from the lawsuit in exchange for DuPont donating about $12.5 million to three charities. Campaign documents filed with the state show that both before and after the settlement was reached, Nash contributed at least $1,500 to Lynch's campaign committee...

The deal with DuPont dismissed the company from the lawsuit in exchange for its donations to the Children's Health Forum, a nonprofit group that works to prevent lead poisoning, Brown University Medical School and the Dana-Farber/Brigham and Women's Cancer Center in Boston.

Nash first made contact with Lynch's office to work out a deal for DuPont in 2003, according to court documents related to the lead paint case. Depositions from January of Lynch and his chief of staff, Leonard Lopes, show Nash was DuPont's primary contact with the Attorney General's Office as the deal was negotiated. The deal was announced June 30, 2005.

Documents filed by Lynch's campaign with the state Board of Elections show Nash gave Lynch donations totaling at least $1,500.

The first, for $500, was on June 30, 2004. On Dec. 20, 2005, Nash gave Lynch's campaign $1,000, the maximum individual political donation allowed in Rhode Island per calendar year.

The executive director of one of the charities whom DuPont agreed to donate to in return for being dropped from the suit also gave a contribution to the Lynch campaign...

According to campaign records, Lynch also accepted a $250 donation from Olivia Morgan, executive director of the Children's Health Forum, which stands to receive millions of dollars from DuPont's deal with the state. Her donation was recorded Dec. 20, 2005, about six months after the settlement was reached.

According to the AP, Bill Harsch intends today to file an ethics complaint concerning the questionable contributions ...

The campaign of Bill Harsch, Lynch's Republican challenger in this year's elections, planned to file a complaint today with the state Ethics Commission, alleging conflict of interest and influence peddling, Harsch told the AP.

Media and Citizen Responsibility during Wartime

In response to the decision by the New York Times (and other newspapers) to reveal the details of the U.S. Government’s Terrorist Finance Tracking Program, the House of Representatives will today debate the following resolution…

Resolved, that the House of Representatives –

(1) supports efforts to identify, track, and pursue suspected foreign terrorists and their financial supporters by tracking terrorist money flows and uncovering terrorist networks here and abroad, including through the use of the Terrorist Finance Tracking Program;

(2) finds that the Terrorist Finance Tracking Program has been conducted in accordance with all applicable laws, regulations, and Executive Orders, that appropriate safeguards and reviews have been initiated to protect individual civil liberties, and that Congress has been appropriately informed and consulted for the duration of the Program and will continue its oversight of the Program;

(3) condemns the unauthorized disclosure of classified information by those persons responsible and expresses concern that the disclosure may endanger the lives of American citizens, including members of the Armed Forces, as well as individuals and organizations that support United States efforts; and

(4) expects the cooperation of all news media organizations in protecting the lives of Americans and the capability of the government to identify, disrupt, and capture terrorists by not disclosing classified intelligence programs such as the Terrorist Finance Tracking Program.

Hugh Hewitt thinks the resolution is too vague…

The House resolution that will be debated tomorrow may be accompanied by blunt words in the floor debate, but its language is the language of indecision and purposelessness. It doesn't name the New York Times and the Los Angeles Times, so it isn't directed at them. It is a half-measure in a time when Americans in the military are asked to give their full measure. I don't think I could vote for it.

Tomorrow's vote is instead a choice on what the House might have said and what it did say. And what it proposes to say is a half measure. It should be defeated, and the leadership should bring forward a resolution that let's its "yes" be "yes" and its "no" be "no."

What do Anchor Rising’s readers think; too soft, too hard, or just right?

Governor Carcieri and the Cutting Edge of Constitutional Jurisprudence

Well we’re on the subject of campaign finance reform (see the comments in the post below), it should be noted that Governor Donald Carcieri’s most recent veto has placed him on the right side of the U.S Supreme Court’s interpretation of the First Amendment. Scott Mayerowitz describes the campaign finance bill vetoed by Governor Carcieri in today's Projo…

Governor Carcieri vetoed legislation that would have changed campaign-finance laws -- limiting each political party to donating $25,000 to a "group" of candidates during a calendar year.

Current law allows parties to give up to $25,000 to each candidate. This bill would have capped party contributions to candidates at $1,000.

According to the Supreme Court’s decision in Randall v. Sorrell (2006), issued just this Monday, Governor Carcieri vetoed a bill that was clearly unconstitutional.

In Randall (“the Vermont Campaign Finance Law Case”), the court overturned the Vermont legislature’s attempt to impose very strict limits on state election campaign donations and expenditures. In a 6-3 decision, the Court ruled 1) that “well-established precedent makes clear that the expenditure limits violate the First Amendment” and 2) that the “low maximum levels and other restrictions” embodied in the Vermont law “impose burdens upon First Amendment interests that…are disproportionately severe”.

One of the “other restrictions” considered by the Court involved contributions made by political parties. The court held specifically that it is unconstitutional to place contribution limits on parties that are no greater than the limits on individuals…

Act 64’s insistence that political parties abide by exactly the same low contribution limits that apply to other contributors threatens harm to a particularly important political right, the right to associate in a political party….

We recognize that we have previously upheld limits on contributions from political parties to candidates, in particular the federal limits on coordinated party spending….But the contribution limits at issue in Colorado II were far less problematic, for they were significantly higher than Act 64’s limits….they were much higher than the federal limits on contributions from individuals to candidates, thereby reflecting an effort by Congress to balance (1) the need to allow individuals to participate in the political process by contributing to political parties that help elect candidates with (2) the need to prevent the use of political parties “to circumvent contribution limits that apply to individuals.”….Act 64, by placing identical limits upon contributions to candidates, whether made by an individual or by a political party, gives to the former consideration no weight at all.

We consequently agree with the District Court that the Act’s contribution limits “would reduce the voice of political parties” in Vermont to a “whisper.”….And we count the special party-related harms that Act 64 threatens as a further factor weighing against the constitutional validity of the contribution limits.

Governor Carcieri’s veto illustrates the strength of the separation of powers system; when one branch of government -- in this case the Rhode Island legislature -- tries to impose limits on a guaranteed right, there exist other co-equal branches of government who can stop it from happening.

Rhode Island Senators Vote Against Flag Burning Ban

Both Senator Reed and Senator Chafee voted against the Flag Burning Amendment (story), which failed by one vote. Senator Chafee, Senator Mitch McConnell of Kentucky and Robert Bennett of Utah were the only Republicans who voted against the Amendment.

UPDATE: Andrew emailed me to say it was worth noting that Langevin voted for the House version and Kennedy against.

The Brown University June Poll is Out

The latest Brown University Poll of Rhode Island voters conducted by Darrell West and the Taubman Center for Public Policy has been released. Here’s the horserace news concerning the Governor’s and Senate races…

• (U.S. Senate) Sheldon Whitehouse 38%, Lincoln Chafee: 37% Undecided 25%, or
• (U.S. Senate) Sheldon Whitehouse 55%, Steve Laffey 25%, Undecided: 20%
• (Governor) Don Carcieri: 44%, Charlie Fogarty: 39%, Undecided: 17%

To my mind, there’s one big surprise in the results, concerning the vote on a casino…

• (Amending the state constitution to allow a gambling casino in West Warwick) 39% favor, 52% oppose, 9% undecided

Maybe state Representative and casino supporter Tim Williamson can turn the tide on this one with an ad campaign along the lines of “Vote for the Casino, or else I’ll Shove Your Head Through a Glass Window”.

Bill Harsch on What's Wrong with the Public Utilities Commission and the Attorney General

National Grid is overcharging its Rhode Island customers. In a May filing with the Public Utilities Commission, National Grid estimated they would be collecting $48,400,000 more than was needed to pay for electricity by the end of 2006. (Think of the amount of money involved this way: in the space of a year, National Grid will suck about 1/2 of the proposed casino license fee out of the Rhode Island economy).

As Rhode Island Attorney General Candidate Bill Harsch explained in a public briefing last week, the sequence of events in response to the overcharges show that neither the Public Utilities Commission nor the current Attorney General are upholding their legal responsibilities to protect Rhode Island citizens from the problems inherent in utility monopolies...

• The law is clear that the duty of the PUC with respect to electric carriers is to make sure that electricity rates accurately reflect production and transmission costs. Yet the Public Utilities Commission has invoked a mysterious “price stability” doctrine to justify keeping electric rates high. On what authority is the PUC going beyond the bounds of the law to mandate higher than necessary electric rates? When did the job of the PUC become protecting a monopoly carrier from market fluctuations, instead of protecting individuals from the danger of a monopoly fixing prices?
• The rate cut proposed by the PUC does not provide adequate relief to Rhode Island ratepayers. According to National Grid's March filing, a reduction to a 9.4¢ per-kWh rate would have reconciled $31,900,000 in overcharges. This means that the current reduction to a 9.6¢ per-kWh rate can erase only a fraction of the now-projected $48,400,000 in overcharges. Mr. Harsch believes (and he has the law on his side) that rates should be lowered to reconcile the entire amount overcharged.
• When National Grid asked for a rate increase in 2005, the PUC called for a series of public hearings within two weeks of the initial filings. When National Grid asked to lower rates this year, the PUC issued its recommendation against lowering rates without holding any hearings dedicated to the subject. Where was the opportunity for public participation in the process?
• Finally, where has the Attorney General been through this? By law, the AG is notified of rate filings. The docket for the rate increases that occurred in 2005 makes note of his participation, but there is no record of his participation in the 2006 rate-lowering/“price stability” process. When National Grid renegged on their proposal to lower rates, even as they conceded they were still overcharging, why didn’t the Attorney General intervene to demand that the law be followed?

Since the Attorney General has taken no action in response to the odd (dare I say collusive?) actions of National Grid and the Public Utilities Commission with respect to electric rates, Bill Harsch intends to file an action on behalf of National Grid ratepayers, seeking to lower rates to a level that reconciles the full $48,400,000 in projected overcharges...

Former Chairman of the Public Utilities Commission and Attorney General Candidate Bill Harsch today announced his intent to file a complaint with the PUC to reduce Rhode Island’s electric utility rates.

“In the absence of an effective Attorney General and with the summer cooling season fast approaching, I am taking the initiative to argue for a reduction in Rhode Island’s soaring electricity rates in front of the Public Utilities Commission,” Harsch said….

Next week, I will be joined in my effort by former Special Assistant Attorney General Richard Crowell whose experience in rate cases is well-established and highly respected.

It is my hope that by taking this step, we will be sending a clear message to the people of Rhode Island that there is someone willing to stand up and fight for their interests. It is my hope that we will be triumphant.”

Bill Harsch: "In the absence of an effective Attorney General�I am taking the initiative to argue for a reduction in Rhode Island�s soaring electricity rates in front of the Public Utilities Commission"

Suppose the electric company offered you a rate cut. Would you answer...

• "Yes, I'll take it", or
• "No thank you, I'd prefer that my rates be stable instead of low".

Bill Harsch, candidate for Rhode Island Attorney General, wants you to know that this question is not a hypothetical one, because the State of Rhode Island has determined that people prefer "stable" rates to low rates and no one is advocating otherwise.

In mid-2005, National Grid was making a Standard Offer of 6.2¢ per-kilowatt-hour (kWh) of electricity to its customers. Because of rising fuel costs, National Grid determined that a rate increase was necessary, made the appropriate filings, and received permission from the Public Utilities Commission to raise rates to 10.0¢ per-kWh beginning January 1, 2006.

National Grid and the PUC, however, overestimated how much fuel costs would rise. By the end of March 2006, it was obvious that millions of dollars more were being collected from customers each month than was needed to pay for electricity. To reconcile the overcharges, National Grid asked the Rhode Island Public Utilities Commission on March 31 of this year for permission to lower its rates.

On your behalf, the Public Utilities Commission initially answered don't bother -- keep your rates high if you want.

Here are the details. On March 31, National Grid sent a letter to the Public Utilities Commission stating that the utility expected to collect $31,900,000 more from ratepayers by the end of 2006 than was needed to cover costs and that the Standard Offer to electricity customers should be reduced from 10.0¢ to 9.4¢ per-kWh to reconcile the overcharges. But before the PUC took any action, National Grid revised its estimate. In an April 21 letter, National Grid said, due to changes in fuel costs, they had revised their year-end overcharge projection to $14,600,000 and that a reconciliation would only require dropping the Standard Offer to 9.7¢ per kWh.

Four days later, the Public Utilities Commission -- without holding any public hearings dedicated to the subject -- issued a recommendation in response to National Grid's filing. The PUC's recommendation was that no reduction in electricity rates occur, despite the projected overcharges. The PUC based its decision on a doctrine of price stability...

If price stability is the objective, then a prudent course of action may be to defer any action on the standard offer price at this time and continue to monitor the fuel markets and their effect on the underlying cost to serve the standard offer customer base. Another month or so of market information would be helpful in assessing what type of rate effects might occur in 2007 from a price reduction in 2006.

However, on May 31, National Grid revised upward its estimate of how badly it was overcharging its customers. Now, National Grid projected that, if rates were held constant, $48,400,000 more would be collected from ratepayers by the end of 2006 than would spent on electricity. But despite the fact that the projected over-charges to Rhode Island customers were 50% higher than in their March estimate, National Grid now parroted the PUC line, withdrawing its rate lowering request and declaring that the price changes were too difficult to follow, so rates should just be kept high, regardless of actual costs...

The Company believes that, given the difficulty of predicting the reconciliation balance with a reasonable degree of accuracy by more than two or three months, the best course of action at this time is to maintain a stable Standard Offer Service rate at the current level. We will continue to monitor fuel prices and their affect on both the projected and actual Standard Offer reconciliation balance.

Eventually, in June, in light of the electricity overcharges now averaging $100 per-ratepaying household (and because, I suspect, of the attention being brought to the problem by Bill Harsch) the PUC recommended a modest lowering rates to 9.6¢ per kWh starting on July 1.

Mr. Harsch does not believe this to be sufficient...

In Defense of Darrell West, or the Theory of the Surly New England Independent, Part 2

Comparing the history of Darrell West's Brown University pre-election polls to actual election results, it's hard to find strong evidence of the phenomena of undecided voters breaking in favor of the challenger that has been documented in other places. To explain why an incumbent factor is not consistently seen in Rhode Island’s highest profile statewide elections, I propose the existence, in substantial numbers, of a class of Rhode Island voters that we can call “surly New England independents”.

Consider Myrth York’s numbers -- not just the percentages, but her absolute numbers of votes received. In 1994, York received 157,361 votes for governor. In 2002, she actually received about 7,000 votes fewer (and not because of lower turnout; Don Carcieri’s vote total was about 10,000 more than Lincoln Almond’s in 1994). In 1998, her total was even less, but turnout in general was down that year.

York, despite a decade of campaigning for governor, clearly never broadened her appeal beyond her initial 1994 base of support. Now, given this fact, which scenario do you think more likely. A) Bunches of independents and/or undecideds suddenly realized, in the last month of the 2002 campaign, that Myrth York was the same candidate she had always been and her Republican opponent was a better alternative. Or B) bunches of independents and/or undecideds were strongly disinclined, all through the 2002 election cycle, to vote for the same person they had already voted against twice, yet still told the pollsters they were “undecided”. I think B) is more likely (making Darrell West's and Victor Profughi's jobs all the more difficult).

I’m not suggesting that respondents intentionally deceive pollsters, but that there exists in Rhode Island a large number of surly independents who take the “I vote for the best candidates, be they Republicans or Democrats, incumbents or challengers” meme more seriously than most and who stay open to the possiblity of voting for any candidate deep into the election cycle. They may strongly lean towards one of the candidates, but since they believe it is their civic duty to consider all available information before casting a vote, they consider themselves to be “undecided” until they have heard the entire campaign.

The existence of surly independents explains, for example, why the Reed-Tingle result from ’02 bucks the conventional wisdom regarding incumbents. Most voters had never heard of Bob Tingle before the campaign. Still, the surly independents did their duty as independents, stayed open to the possibility of voting for either party through the campaign, and waited to hear Tingle’s message. When they didn’t hear a message (Tingle’s ability to get his message out was hampered by serious underfunding), many voted for Reed.

How the existence of surly independents might affect the current Senate race is difficult to predict, but the impact of surly independents is clearly being seen in the the current race for Governor of Rhode Island.

There are two phenomena difficult to explain in the Governor's race. 1) What spurred the sudden closing of the poll numbers between Gov. Carcieri and Lt. Gov Fogarty while politics was proceding business as usual in Rhode Island? 2) How does an incumbent Governor only get 44% support for re-election in the same Rhode Island College poll that shows him with 54% favorability rating?

The answer, I submit, lies in the existence of the surly New England independents. With election season underway, the independents have opened themselves up to the possibility of voting for either candidate -- even if they are strongly likely to vote the same way they did four years ago (is it pure coincidence that the Governor's 54% approval rating is the same as his 2002 percentage of the vote?).

Here's my prediction: As the Gubernatorial campaign moves forward, Lieutenant Governor Fogarty's penchant for giving mushy answers of “I’ll study that” or “maybe” in response to even the most basic questions about reforming Rhode Island’s taxation, spending and education policies will not play well with the surly independents. They will re-confirm their reasoning of why they voted for Governor Carcieri and the final election result will contain a break in undecideds, relative to the final Brown poll, that is slightly-to-strongly in Governor Carcieri's favor.

In Defense of Darrell West, or the Theory of the Surly New England Independent, Part 1

In anticipation of the release of June’s Brown University(*) poll on the upcoming November elections, I compared past Gubernatorial and Senate election results to the corresponding Brown poll taken closest to the election date. I was curious to see if evidence of the current conventional wisdom -- that in races involving incumbents, undecided voters tend to “break” in favor of the challenger -- existed.

Three Rhode Island Gubernatorial or Senate races since 1994 have involved full-term incumbents seeking re-election. In none of these cases did undecideds (as measured by the Brown results) break in favor of the challenger...

• During the 1994 U.S. Senate race, the September poll showed incumbent John Chafee leading challenger Linda Kushner 55%-24%. Undecided voters broke relatively evenly, with Chafee winning the election 65%-35%.
• During the 1998 Governor's race, the September poll showed incumbent Lincoln Almond leading challenger Myrth York 41%-35% (with only 13% undecided, due mostly to the presence of Robert Healey). In the actual election, undecideds broke slightly in favor of Almond, giving him a 51%-42% victory over York.
• During the 2002 U.S. Senate race, the October poll showed incumbent Jack Reed leading challenger Robert Tingle 61%-14%. Undecideds broke in favor of Reed, giving him a 78%-22% victory.

A fourth race involving an incumbent who had received a late-term appointment to his seat did exhibit a break in undecided voters towards the challenger...

• During the 2000 U.S. Senate race, the October poll showed incumbent Lincoln Chafee leading challenger Robert Weygand 52%-28%. Undecideds broke in favor of Weygand, though Chafee still won a comfortable 57%-41% victory.

There have also been three Gubernatorial or Senate races involving no incumbent since 1994...

• In the 1994 Governor’s race, the September Brown Unversity poll showed Lincoln Almond in a dead heat with Myrth York 38%-37%, with 21% undecided. Undecideds broke slightly in favor of Almond, but enough to give him the 47%-43% victory (Robert Healey picking up 9%).
• In the 1996 U.S. Senate race, the September poll showed Jack Reed with a 49%-32% lead over Nancy Mayer. In the actual election, undecideds broke in favor of Reed, giving him a 63%-35% victory.
• And, of course (in the only case where the Brown poll got the final result wrong) the October poll showed Myrth York leading Don Carcieri by a 41%-34% margin. In the election, undecideds broke for Carcieri by a large enough margin to give him a 54%-45% victory.

There’s at least one technical issue affecting poll accuracy that goes beyond the scope of the data presented: making accurate “likely voter” adjustments. Despite this large X-factor, it's still possible to draw a few conclusions.

First, there's no obvious ideological bias in the Brown University result set. In the three cases where undecideds split evenly, (John Chafee, both Almond/York races), everyone’s support was understated about equally. In three cases (Reed in ’96 and ‘02, Weygand in ‘00) eventual Democratic support was understated and in one case (Carcieri in ’02) eventual Republican support was understated.

Second, the results suggest a necessary refinement to the idea that undecideds not supporting an incumbent are likely to vote for a challenger. In Almond/York II, for instance, the controlling dynamic was probably as much "if I didn't vote for her before, why would I vote for her now?" as it was a referrendum on the incumbent. The number of undecideds that a challenger picks up is likely inversely proportional to how well-known the challenger is going into the election.

Third, most interestingly, there may be a factor called the phenomena of the surly New England independent in play here...

(*)The Brown University poll is conducted by Brown University Political Science Professor Darrell West, Director of the Taubman Center for Public Policy and the John Hazen White Sr. Public Opinion Laboratory. I mention this in full detail because 1) I believe in giving full credit where credit is due and 2) because I would never think of slighting the fine contributions the Whites have made to the civic culture in Rhode Island, especially when John Hazen White Jr. might be looking in innovate directions to find for moderators for a series of political debates.

Deluded America

Extending the discussion that began with Worse Than Even Moral Equivalence, Diana West writes about Deluded America:

...a quotation by Churchill on the subject of war. Specifically, what happens to a civilized society when it goes to war with a barbarous one...what I remember as being the main point was that if the civilized society is to prevail over the barbarous one, it will necessarily and tragically be degraded by the experience as a vital cost of victory. Partly, this is because civilized war tactics are apt to fail against barbarous war tactics, thus requiring civilized society to break the "rules" if it is to survive a true death struggle. It is also because the clash itself — the act of engaging with the barbarous society — forces civilization to confront, repel and also internalize previously unimagined depredations. This is degrading, too...

The question is, did bombing Dresden to defeat Hitler or dropping two nuclear bombs to force Japan to stop fighting make the Allies into barbarians?

I think most people would still say of course not and argue that such destructive measures were necessary to save civilization itself — and certainly thousands of mainly American and Allied lives. But if this argument continues to carry the day, it's because we still view that historic period from its own perspective. We view it from a perspective in which Allied lives — our fathers, husbands, brothers and sons — counted for more than Axis lives, even those of women and children.

How quaint. That is, this is not at all how we think anymore. If we still valued our own men more than the enemy and the "civilians" they hide among — and now I'm talking about the war in Iraq — our tactics would be totally different, and, not incidentally, infinitely more successful. We would drop bombs on city blocks, for example, and not waste men in dangerous house-to-house searches. We would destroy enemy sanctuaries in Syria and Iran and not disarm "insurgents" at perilous checkpoints in hostile Iraqi strongholds.

In the 21st century, however, there is something that our society values more than our own lives — and more than the survival of civilization itself. That something may be described as the kind of moral superiority that comes from a good wallow in Abu Ghraib, Haditha, CIA interrogations or Guantanamo Bay. Morally superior people — Western elites — never "humiliate" prisoners, never kill civilians, never torture or incarcerate jihadists. Indeed, they would like to kill, I mean, prosecute, or at least tie the hands of, anyone who does. This, of course, only enhances their own moral superiority. But it doesn't win wars. And it won't save civilization.

Why not? Because such smugness masks a massive moral paralysis. The morally superior (read: paralyzed) don't really take sides, don't really believe one culture is qualitatively better or worse than the other. They don't even believe one culture is just plain different from the other. Only in this atmosphere of politically correct and perpetually adolescent non-judgmentalism could anyone believe, for example, that compelling, forcing or torturing a jihadist terrorist to get information to save a city undermines our "values" in any way. It undermines nothing — except the jihad.

Do such tactics diminish our inviolate sanctimony? You bet. But so what? The alternative is to follow our precious rules and hope the barbarians will leave us alone, or, perhaps, not deal with us too harshly. Fond hope. Consider the 21st-century return of (I still can't quite believe it) beheadings. The first French Republic aside, who on God's modern green earth ever imagined a head being hacked off the human body before we were confronted with Islamic jihad? Civilization itself is forever dimmed — again.

Pfc. Kristian Menchaca and Pfc. Thomas Tucker, RIP.

ADDENDUM:

Diana West has more in It's an Islamic jihad, stupid:

Discussing the "war on terror" has been endlessly awkward. Terror -- like a blitzkrieg, sneak-attack or disinformation -- is a tactic, not an enemy. But in our politically-correct era, we dwell on the tactic, never defining the enemy...but don't describe him as an Islamic jihadist in the age-old tradition of Islamic jihadis going back to Muhammad. Such historical precision might be hurtful and insensitive, and we wouldn't want that.

Indeed, as a matter of American foreign policy, we don't want that. Better to keep things vague and indirect...Once upon a time, We the People were crass enough to have repelled a German blitzkrieg, defied Japanese sneak attack, and even, some of us, combated Soviet disinformation. Now, We the Peoples are "enlightened" to the point where we send armies out for years to fight generic "terror" -- no matter how specifically Islamic that it is.

There are many reasons why this matters, not least of which is that, without understanding the religious nature of jihad (holy war), along with its sister institution of dhimmitude (inferior status of non-Muslims under Islam), there can be no triumph over jihad and no avoiding dhimmitude. There can also be no understanding of the religiously rooted attitudes toward jihad movements among even non-violent Muslims, generally ranging from a tacit ambivalence to wild adulation.

Even as we fight our war against "terror," we simultaneously fight against any such understanding. Maybe the reason goes beyond reflexive PC manners. Maybe the West simply doesn't want an "enemy" at all; maybe we simply want to safeguard ourselves against "terror." Maybe our elites believe that, in targeting only terror, the enemy will learn to like us, and terror will go away.

This mindset may explain why the United States exhausts itself trying to disclaim a connection between Islam and jihad, opening Islamic centers on U.S. military bases (most recently at Quantico at the behest of a Wahhabi-educated cleric). Thus, as Paul Sperry writes at frontpagemag.com, "facilitating the study of the holy texts the enemy uses, heretically or not, as their manual of war"; treating those same holy texts reverentially by military order at Guantanamo Bay; and even sending in the Marines to donate prayer rugs to an Iraqi mosque.

Such tactics suggest we no longer seek a military triumph over Islamic jihad -- if we ever did. Had we prosecuted such a war, it would be over by now. The president would have directed the military to eradicate, freeze or neutralize jihadi threats where they exist...

But no. Such a war on terror long ago gave way to the Struggle to Make Everyone Think We're Swell. In this no-win fight, we must watch what we say...And we must watch what we do...In a war in which an interrogation could save a city, we rewrite our interrogation rules to make sure that it won't. "If this debate were limited to what's best for interrogation purposes, the decision (about whether to soften interrogation techniques) would be pretty easy," a senior Defense Department official told The New York Times. "But then you have to look at what we lose diplomatically.'"

Why? What are we, Liechtenstein? We sure act like it. The Washington Times' Tony Blankley recently noted the defeatism in America's about-face with jihadist Iran -- the looming front in the war. By offering non-military nuclear technology or else threatening non-military sanctions, the Bush administration seems to have acquiesced to what Blankley describes as "the only 'respectable' position" among both European and American elites: namely, "the absolute exclusion of a military option."

If true, this would mean that the already inadequately titled "war on terror" would no longer refer to "war" at all. And that would leave only...

ADDENDUM II:

Israel offers an appropriate and, by American standards, politically incorrect alternative approach for dealing with Islamic jihadists:

Israel will work to ensure the Hamas-led government falls if a soldier kidnapped by Palestinian militants is not released alive, a high-ranking security official said.

"We will make sure that the Hamas government ceases to operate if the kidnapped soldier is not returned to us alive," the source told AFP...

The Senate's Vacuous War Debate

In addition to rejecting John Kerry's hard deadline for withdrawing from Iraq, the Senate on Thursday also voted on an Iraq proposal sponsored by Democratic Senators Jack Reed and Carl Levin. The Reed-Levin amendment was a non-binding resolution that called on the President to begin withdrawing troops from Iraq by the end of this year and to submit estimates for further withdrawals beyond 2006, but established no final deadline for completing a withdrawal. The amendment failed by a vote of 39-60.

I am not sure what the public gained through the "debate" of this proposal.

Reed-Levin would not have mandated -- nor even suggested -- any change in the President's current Iraq policy. Here's what the resolution asked of the President...

(D) the President should--

(i) expedite the transition of United States forces in Iraq to a limited presence and mission of training Iraqi security forces, providing logistic support of Iraqi security forces, protecting United States infrastructure and personnel, and participating in targeted counterterrorism activities;

(ii) after consultation with the Government of Iraq, begin the phased redeployment of United States forces from Iraq this year; and

(iii) submit to Congress a plan by the end of 2006 with estimated dates for the continued phased redeployment of United States forces from Iraq, with the understanding that unexpected contingencies may arise;

(2) during and after the phased redeployment of United States forces from Iraq, the United States will need to sustain a nonmilitary effort to actively support reconstruction, governance, and a durable political solution in Iraq; and

(3) the President should carefully assess the impact that ongoing United States military operations in Iraq are having on the capability of the United States Government to conduct an effective counterterrorism campaign to defeat the broader global terrorist networks that threaten the United States.

Yet according to the June 9 International Herald Tribune, the beginnings of withdrawal from Iraq, to occur this year, are already planned...

The subject of future troop levels is certain to be an important part of President George W. Bush's two-day war cabinet meeting, which will start Monday at Camp David in Maryland. Senior U.S. commanders in Iraq will join the meeting by a video link.

In preparation, military planners in Iraq and at the Pentagon have been refining troop-rotation proposals that, in the best case, would reduce levels to between 110,000 to 120,000 troops by the end of December, from current levels of about 130,000, administration and military officials said.

So suppose the President brings home 15,000 troops by Christmas and announces tentative plans to withdraw more troops after that. That meets conditions spelled out in the Reed-Levin amendment; how then has the amendment altered the US war plan?

Most Republicans, rightly, voted against this proposal because it would have made American policy look weaker than it actually is. Passage of the amendment would have created a perception that any forthcoming withdrawal of American troops from Iraq was the result of American division and inconstancy and not of the consideration of the facts on the ground.

Forcing a vote on this kind of resolution shows that the Democrats do not understand how critical avoiding an unnecessary perception of weakness is to a deterrence-based defense policy. There is no advantage in focusing on low-substance but high-profile atmospherics that make an existing policy look weaker than it is. And it is neither good military strategy (because it boosts enemy morale) nor good political strategy (because it reduces the room that domestic hawks have to compromise) to make considered political/military decisions look like purely military retreats.

Centracchio Running for GOP LT. Governor Slot

Confirming reports from the ProJo 7to7 Blog and NBC10 's Bill Rappleye, Major General Reginald Centracchio, former Adjutant General of the RI National Guard, confirmed that he was entering the GOP primary for Lt. Gov. on the air with Dan Yorke this afternoon. Centracchio had previously said he wasn't going to run. He also told Yorke that he asked the other GOP candidate, Kerry King, to step aside. Apparently King wasn't very happy. (No Kidding!)

Yorke asked Centracchio "who came to you" and asked you to run. Centracchio first said his family and then friends and then stated that no GOP political players had a part. He also said he notified Gov. Almond yesterday.

UPDATE: Yorke spoke with Chuck Newton from the State GOP for reaction. Newton said that he thought it was "terrific" because it energizes all within the party. When asked if the party would ask King to run for General Treasurer instead, Newton said it's possible but no such talks have been held. When pressed, Newton proffered the line that each candidate was his own man. He also implied that some in the GOP were excited by Centracchio's entrance into the race, while others had a different view. In short, he continued to toe the line that it would energize the party. (He also hinted that another Republican would be making a bid against Patrick Kennedy).

UPDATE II: Yorke also spoke to Kerry King. King said he's not bowing out and that he's going to win. He related that he told Centracchio that "You've got to be kidding" when Centracchio called King last week to tell him he was entering the race. King also said that Centracchio told him he had the support of "the Governor." Governor Carcieri called King and told him he had his support. Then Centracchio called King again and said he's out. Then, after this past weekend, rumors began floating that Centracchio was going to jump in after all. King characterized Centracchio's back-and-forth as not showing leadership but opportunism.

Yorke asked King if anyone had asked him to back out from the State GOP or if they had asked him to run for some other office. King said "no."He said that, like Nathanael Greene, he had been keeping his powder dry and that his organization has been out raising money for the stretch run. Now he's ready to fight a tough campaign.

Sheldon Whitehouse Lurches Beyond the Democratic Mainstream

According to his television ads, Rhode Island Senate candidate Sheldon Whitehouse wants American troops to leave Iraq "by the end this year".

On Thursday, the U.S. Senate rejected a measure sponsored by Senator John Kerry that would have required most American troops to leave Iraq by mid-2007 by a vote of 13-86.

The overwhelming margin of defeat of the amendment shows how far outside of the mainstream Sheldon Whitehouse is. His ideas on Iraq lie outside not just the national mainstream, but far to the left of the conensus of the national Democratic party. Is a candidate who promotes the foreign policy ideas of the radical fringe really a suitable representative of the citizens of Rhode Island?

Worse Than Even Moral Equivalence

Yesterday's Best of the Web from the Wall Street Journal offers this story:

Horrific news out of Iraq, where two U.S. soldiers, Pfc. Kristian Menchaca and Thomas Tucker, were either killed or captured and later killed in an enemy attack Friday. Their bodies were found Monday, CNN reports, "mutilated and booby-trapped":

The bodies also had been desecrated and a visual identification was impossible--part of the reason DNA testing was being conducted to verify their identities, the sources said...

Not only were the bodies booby-trapped, but homemade bombs also lined the road leading to the victims, an apparent effort to complicate recovery efforts and target recovery teams, the sources said.

To most of us, this is a reminder of the depravity of our enemies. But blogress Jeralyn Merritt sees it as a reminder of America's sins:

Violence begets violence. Inhumanity and cruelty bring more of the same. The whole world is watching and we don't have the right to claim the moral high ground so long as those responsible for the abuses at Guantanamo and detention facilities in Iraq and Afghanistan go unpunished, the policies stand uncorrected and the Pentagon continues to prevent the media from learning the facts first-hand.

The always excitable Andrew Sullivan similarly laments "the cycle of depravity and defeat."

This rhetoric about "cycles" appears to reflect a theory of moral equivalence, but in fact it is something else. After all, if the two sides were morally equivalent, one could apply this reasoning in reverse--excusing, for example, the alleged massacre at Haditha on the ground that it was "provoked" by a bombing that killed a U.S. serviceman--and hey, violence begets violence.

But America's critics never make this argument, and its defenders seldom do. That is because it is understood that America knows better. If it is true that U.S. Marines murdered civilians in cold blood at Haditha, the other side's brutality does not excuse it. Only the enemy's evil acts are thought to be explained away by ours.

Implicit in the "cycle" theory, then, is the premise that the enemy is innocent--not in the sense of having done nothing wrong, but in the sense of not knowing any better. The enemy lacks the knowledge of good and evil--or, to put it in theological terms, he is free of original sin.

America ought to hold itself to a high moral standard, of course, but blaming the other side's depraved acts on our own (real and imagined) moral imperfections is a dangerous form of vanity.

But they claim to support the troops and don't want anyone to question their patriotism.

Latest RIC Poll Shows Tight Races

Here are the results from the latest RIC poll (actual polling questions and results in this PDF) and here is the ProJo story. Here are some of the results:

GOVERNOR
Carcieri 44%
Fogerty 39%
Undecided 17%

SENATE (Scenario "A")
Chafee 43%
Whitehouse 40%
Undecided 17%

SENATE (Scenario "B")
Whitehouse 58%
Laffey 27%
Undecided 16%

CASINO
Yes 48%
No 47%
Undecided 4%
Won't Vote 2%

Now you all can begin talking about why this does or doesn't matter.

UPDATE: In the comments section, "Greg" makes a good point about the Legislature's approval ratings and I think it's worth mentioning. The poll asks:

How much of the time do you think you can trust each of the following to do what is right– just about
always, most of the time, only some of the time, or almost never.

Here are the results broken down by Total Positive or Total Negative (I left out the "I don't know"s).

The state legislature
Total Positive: 20%
Total Negative: 75%

Your state legislator
Total Positive: 33%
Total Negative: 56%

Governor Carcieri
Total Positive: 54%
Total Negative: 42%

We often hear how people don't approve of the State Legislature as a whole, but usually like the job "their guy" is doing. These numbers seem to counter that argument. Additionally, the Governor is easily more popular than the General Assembly. It's also interesting that the Governor's approval rating is 10 points higher than the amount of people who said they were going to vote for him (54% vs. 44%). As always, looking at poll internals can reveal inconsistencies.

UPDATE II: RIC has just released some more poll information that shows that the GOP primary race between Laffey and Chafee is neck and neck.

If the September primary for the U.S. Senate election were held today, 39 percent of voters would support Chafee while 38 percent would back Laffey, if half of those voting in the primary are Republicans and the other half unaffiliated voters. One in four likely primary voters say they are undecided.

Among men, Laffey leads Chafee by 44 to 34 percent, while Chafee’s lead among women is only 37 to 35 percent. Regionally, Chafee appears to be strongest in Providence (73 to 27 percent), western Rhode Island (43 to 21 percent), and in the East Bay (44 to 33 percent). Laffey is strongest in Blackstone Valley (50 to 40 percent), Newport County (46 to 23 percent), and in the Providence suburbs south of the city (39 to 31 percent). Among age groupings, Chafee is strongest with voters older than 64 (49 to 37 percent), while Laffey’s greatest strength comes from voters 39 or younger (55 to 33).

According to the survey, the key to the primary outcome will be the number of unaffiliated and Republican voters coming out on election day. Chafee betters Laffey by 49 to 31 percent among unaffiliated voters but the incumbent loses to his challenger with Republicans (Laffey, 45 percent; Chafee, 28 percent). If 50 percent or more of those who turn out for the Republican primary are unaffiliated voters, Chafee wins; if more than half are Republicans Laffey comes out ahead.

The director of the poll, Victor Profughi, was on with Dan Yorke (audio here) and explained the various scenarios they used to come up with somewhat reliable polling numbers.

Of note is the head-to-head numbers among registered Republicans in which Laffey beats Chafee 45% to 28%. If RI didn't have an open primary system, Sen. Chafee would be in serious trouble.

Contra Michaud: Governor and House "Get Along" on Budget

One of the central lines of Dennis Michaud's criticism of Governor Carcieri is that he has a poor relationship with the General Assembly (Remember: "He's a fighter, I'm a lover."). Any follower of contemporary Rhode Island politics would probably agree, but that doesn't mean that tough-minded negotiating on both sides can't yield positive results. In short, there is no logical link between KUMBAYA circles and fiscal sanity. Rhode Island still has a ways to go, but it appears as if the Governor's managed to extract some concessions out of the House (and, yes, vice versa).

"I believe that my fundamental principle, which is that we have to live within our means, has finally begun to sink in," Carcieri said yesterday as he praised the House budget, which raises spending 4.9 percent.

Is that a responsible increase when inflation rose only 2.5 percent last year?

"I would like to see it lower," the governor said, "but to get a budget that everybody can agree to, you've got to compromise on some things."

House Finance Committee Chairman Steven M. Costantino, D-Providence, added: "This was a budget of shared priorities in a lot of cases. Were there some philosophical disagreements? Yes. But ultimately I think we worked through a budget."

In fact, things were so cordial between the House and the governor's office that Carcieri's chief of staff Jeffrey M. Grybowski celebrated the budget's passage in the speaker's office Monday night with Costantino and House Majority Leader Gordon D. Fox, D-Providence.

The budget includes several issues that Carcieri and Democratic lawmakers can take credit for in November.

Take the car tax.

Carcieri had proposed raising the exemption from the first $5,000 in value to $5,500. Lawmakers went to $6,000.

The same can be said about local school aid.

Carcieri increased school funding by $20 million. Lawmakers added another $13.3 million, although some communities saw less under their plan than Carcieri had proposed. But in the end, both parties can take credit for more school aid, which in political circles translates into "property tax relief."

"I bet you have to go back to the late '90s to see a local-aid package as large as this," Carcieri said yesterday.

Lawmakers restored many of the cuts Carcieri made in welfare and subsidized health care for the poor, but did end up going along with a few of his reductions. The legislators can campaign that they helped the poor while Carcieri can take credit for "reforming" part of the system.

"They came not as far as I might like to see," the governor said, "but they came quite a ways toward what we wanted to accomplish."

For years we have seen the slow, inexorable power of incrementalism on the part of traditionally Democratic constituents who rely on--and demand--tax revenue taken from the wallets and pocketbooks of average Rhode Islanders. This week we've seen property tax reform coming from the Senate side and a Budget compromise--that includes tax reductions--coming from the House side. Perhaps this is the beginning of a slow (I won't say inexorable!) move in the other direction.

In an election year, even Democrats see the wisdom of letting the taxpayers keep more of their own money. These are positive developments. However, we still need to keep the pressure on. Should all of this legislation pass, we still need to make sure that the legislature doesn't try to take away these tax breaks next year. Re-electing Governor Carcieri would go a long way in ensuring that won't happen.

Why Mr. Straight Talk is Straight No More

A quote reported by Charles Bakst in yesterday’s Projo from Senator John McCain shows how Mr. Straight Talk has sadly morphed into Mr. Blatant Hypocrisy…

McCain joined in denouncing the Club for Growth's strident advertising effort: "I don't think that that's exactly what American politics should be all about, and why don't we have a little less of the negative and a little more of the positive?"

This is shameless. Via the campaign speech regulations he has shepherded through Congress, Senator McCain has done as much to tilt campaign discourse towards the negative as has any living American.

Under the McCain-Feingold rules, civic groups that run ads in favor of candidates they support are under the constant threat of having their efforts declared “illegally coordinated electioneering communications”. The resulting possibility of endless litigation has had a chilling effect on positive advertising.

There are, on the other hand, no limits on how much money can be spent on ads run by civic groups that discuss why a particular candidate is no good, so long as no explicit message to vote for or against anyone is conveyed. That's why third party ads often include a message suggesting that you call a candidate’s office to voice your displeasure; the contact-the-candidate message establishes that the ad has a primary purpose other than suggesting who people should vote for.

So if Senator McCain wants to blame someone for the absence of positive third-party campaign ads, he should look first into the mirror. He cerainly should not treat the public as utterly ignorant of the effects that his law has had on political discourse in this country. The Senator's weak civil liberties position on this issue is a large part of why he has no shot at the Republican Presidential nomination in 2008.

Senate Passes Property Tax Reform Bill

With a vote of 36-0, the State Senate passed a bill that would slow down and then limit the amount that a community could raise property taxes in any given year.

The bill would lower the maximum annual increase to a community's tax levy from the current 5.5 percent to 4 percent gradually, starting in fiscal 2008 and reaching 4 percent in 2013.

Rather than imposing a 4-percent cap immediately, [Senate Majority Leader M. Teresa] Paiva Weed said she chose the gradual cap to give cities and towns time to adjust. When Massachusetts capped local tax increases at 2.5 percent, she said, "a dramatic decrease overnight did have a negative impact on municipal services."

There were quite a few changes made from the original proposal, including:

...a provision instructing judges to consider the caps in deciding whether to allow school committees to seek a higher appropriation than they receive from a city or town council.

The bill would apply the same percentage caps to school-spending increases as it would to tax levy increases....

Another amendment would excuse school committees from including state and federal aid in computing compliance with the cap....

The bill contains an exemption from the cap in four cases:

if a city or town experiences a loss in revenues other than property taxes, such as state aid or gambling revenues,

if a city's or town's health-insurance costs, retirement contributions or utility expenditures rise at a rate more than three times the cap specified for that year,

if a city or town experiences debt-service costs that exceed the prior year's costs by a percentage greater than the cap specified for that year,

if a city or town "experiences substantial growth in its tax base as the result of major new construction which necessitates either significant infrastructure or school housing expenditures . . . or a significant increase in the need for essential municipal services."

The original bill would have required a special election, paid for by the state, to override the cap in those circumstances. The bill, as passed, instead requires a supermajority vote -- four fifths of the full membership -- of the city or town council.

The Governor supports the measure, but it's still up in the air as to whether or not the House will take it up. I'm betting against that happening. Nonetheless, kudos to Sen. Paiva Weed and the Senate for making the attempt.

Just a Note: Giuliani Endorses Chafee

I'm sure everyone will let me know if I missed this already, but included in his new website "Solutions America", Rudy Giuliani has a section for those Republicans he has endorsed. For Rhode Island, he has endorsed Lincoln Chafee, which really isn't a big surprise. But perhaps the bigger point is the whole concept of this website. Why have it? Apparently, the "Solutions America" organization has been around since 1998. Nonetheless, the effort to publicize the website launch seems to be a clear indication that Giuliani is engaged in some base-building for an '08 Presidential run.

How the Legislature's Education-Aid Plan Will Affect Your City or Town

According to today's Projo, The Rhode Island House has approved a flat 4.8% increase in education aid for all Rhode Island cities and towns. Because Rhode Island distributes state education aid very unevenly, this plan gives generous increases to some communities while basically ignoring others.

For example, in 2006 Barrington received $727 per-student in state education aid. At the other end of the scale, the Providence school system received $6,632 per student. Applying these base figures to the legislature's flat funding formula, the Providence school system will get an an additional $318 per student next year, while the Barrington school system will receive only an additional $35 per student.

Here is the complete list of aid increases, based on the 4.8% figure and last year’s aid totals, as well as the amount of education aid communities gained or lost relative to Governor Carcieri's original budget proposal…

	Per-Pupil Increase in FY2007 Education Aid (Approved by House)	Total Increase in FY2007 Education Aid (Approved by House)	Change in FY2007 Education Aid (Relative to the Governor's Proposal)
Central Falls	$531	$1,983,387	+$1,968,138
Providence	$318	$8,882,407	+$4,991,967
Pawtucket	$317	$3,061,659	+$1,971,915
Woonsocket	$315	$2,181,873	+$1,700,547
Bristol/Warren	$255	$938,638	+$469,450
West Warwick	$244	$935,998	+$462,986
Burrillville	$244	$631,241	+$241,179
East Providence	$192	$1,225,477	+$471,546
Newport	$191	$540,157	+$211,633
Glocester	$186	$147,166	+$53,278
Chariho	$176	$679,136	+$160,132
Foster	$176	$64,862	+$37,645
North Providence	$174	$605,976	+$138,848
Middletown	$174	$480,676	+$70,989
Exeter/WGreenwich	$157	$346,906	+$265,615
Coventry	$157	$919,263	+$167,409
Foster/Glocester	$155	$262,378	+$87,161
Johnston	$152	$499,858	+$9,680
Cranston	$145	$1,629,295	+$319,644
Warwick	$144	$1,722,942	+$251,705
Tiverton	$122	$271,636	+$34,507
North Kingstown	$119	$548,854	-$25,329
South Kingstown	$114	$477,543	-$90,167
Cumberland	$114	$607,430	+$56,152
North Smithfield	$110	$221,575	+$31,491
Smithfield	$97	$263,194	-$55,602
Portsmouth	$93	$286,197	-$326,063
Lincoln	$93	$339,105	-$141,466
Scituate	$86	$156,019	-$68,215
Westerly	$84	$313,353	-$219,169
Narragansett	$52	$86,873	-$195,126
LittleCompton	$52	$16,888	-$28,161
Jamestown	$45	$24,357	-$55,242
East Greenwich	$36	$89,282	-$229,292
Barrington	$35	$119,036	-$307,683
New Shoreham	$32	$4,870	-$29,339

According to a Michael P. McKinney article also in today’s Projo, Barrington residents would like to know why the state government seems so hostile to assisting education in their town…

A dismayed Barrington Town Council approved a resolution last night expressing frustration with House lawmakers' "unprecedented last-minute" changes in school aid to more than a dozen communities and asking the legislature to provide those towns with an analysis that supported the decision to cut.

Schools Supt. Ralph A. Malafronte said that in a dozen years as superintendent, he had never seen a House committee drop the aid below the governor's level.

The answer to Barrington’s question is that, somewhere along the line, the Rhode Island legislature adopted the philosophy that the major function of state government was to redistribute resources from smaller cities and towns to the urban core. The justification of why towns are less entitled to state support of their municipal institutions is unclear.

Two last points. With so much money being distributed so inequitably through the state funding system, the fundamental question of the fairness of forcing people to contribute money to bureaucracies they have no control over cannot be reasonably ignored. Though all Rhode Island residents help pay 2/3 of the education costs in cities like Providence, Pawtucket, and Woonsocket, most of those Rhode Islanders have zero say, through a school committee or city council, in how those school systems are run. That’s taxation without representation. If education is to be funded on a statewide basis, students should be allowed access to any school in the state via a public school choice program.

Second, when you look over the numbers on how the capitol core gained education funding the expense of other Rhode Island communities, don't forget the recent vote on the no-bid casino deal. Maybe the members of the Providence and Pawtucket delegations who supported the no-bid deal did so because they figured that the extra revenue that would come from a competitive bidding process wasn't necessary for their communities -- they could just take what they want from Rhode Island’s smaller cities and towns instead!

Illegal Immigration: What is at stake & where do we go from here?

This morning's publication of an Open Letter about immigration by leading conservatives prompted me to re-read a draft posting I had last edited on May 26. Here is that late-May posting:

Now that we have the Senate and House going into conference with the objective of negotiating a final bill out of two very different bills, it is worth taking a step back and asking ourselves: What are the big issues in this illegal immigration debate? In other words, what policies and values are at stake as those negotiations begin and where should we go from here?

Let me begin with an analogy:

Think back to when you were in elementary school. Remember the occasional kid who would not play by the rules? Now, in most cases, peer pressure corrected their aberrant behavior. But sometimes it did not. And, without the presence of teachers or school aides to adjudicate the situation, a bully could get away with uncivilized behavior and disrupt the peaceful actions of kids who were simply trying to play by the rules.

Now recall how you felt if you or your friends were taken advantage of: The bully was being unfair. Playing fair - by playing by the rules - is a key principle of American life. It is why we don't like cheaters - in school, on the ball field, in business or in politics.

Whether we will play fair with illegal immigration concerns defines the core issue of this debate.

What the American people get - and many of the Washington politicians from both parties do not get - is that we understand this Senate bill is amnesty for lawbreakers. For corporate lawbreakers and for illegal alien lawbreakers. This bill rewards all of them for breaking the law by relieving them of any consequences for their past illegal actions. And it is no less troubling that the structural incentives of the bill will ensure future behaviors are equally reprehensible. All of this is unfair and wrong.

The Senate bill fails to codify a sense of fair play - aka the rule-of-law in legal terms - into public policies that enhance our ability to live together peacefully as a society. It is actually worse than that because it makes future societal conflict more likely.

These initial points also clarify what are NOT the big issues here. This is not about being racist or hating minorities, no matter how hard some amnesty advocates will push that shtick. All you have to do is read the postings on this blogsite, from well before the illegal immigration issue moved front-and-center, to know that many of us who are agitated about illegal immigration come from families that marched with and were outspokenly supportive of the noble cause led by Martin Luther King, Jr. And because this is a rule-of-law issue, it is also not a civil rights issue.

The American people see through all the moral preening by various parties and have cut to the heart of the matter. Under the status quo, they observe:

The government passes laws they have no intention of enforcing and grants benefits to people who have not earned them.

Businesses are willing to break the law in order to get cheap labor and increase their profits.

Unions are looking for easy marks to recruit for membership, thereby increasing their power.

Both political parties are willing to ignore serious and unresolved policy issues so they can maximize their chances of attracting more Hispanics to their respective parties.

Radicals - like many who organized the May 1 rallies - are promoting an anti-American vision of separatist identity politics completely disconnected from the Founding principles of our country.

Mexico is in political disarray, has an economy that does not generate enough jobs, and threatens to sue our country just for protecting our border.

Illegal immigrants (and many of their advocates) are effectively saying "I am here so deal it with it on my terms."

Broadly speaking, there are national security, economic and cultural issues at stake here and none is being addressed with any rigor. The American people understand that a failure to deal effectively with any of the three issues diminishes the quality of our country's life - and could even threaten its existence over time.

There are three specific policy issues at the center of this debate:

American sovereignty: Will we set our own laws about immigration as a country or will we let illegal aliens or foreign countries drive our laws?

Rule of law: Will we enforce fairly the laws on our books, thereby ensuring a consistent - and not corrupt - application of those laws?

Assimilation - Becoming an American citizen is an honor, not a right. We want all citizens to share that sense of honor. So, what does it mean to be an American citizen and how will immigrants be taught American history and the uniqueness of the American experiment in ordered liberty?

So where do we go from here? I would suggest several key points:

We need to transform immigration processes from dishonest to honest practices. The only way we will get to that point is if we first skewer the moral preeners and drive the debate to a focus on both the 3 broad issues (national security, economic, cultural) and the 3 specific policy issues (American sovereignty, rule-of-law, assimilation) mentioned above.

There is a consensus about the need for enforcement, both at the border and with employer compliance. We should begin there and do that right.

There is not a consensus on what to do next and the worst thing we can do is force another law onto the books that either makes no sense or will not be enforced. There is an analogy with the abortion issue. This country became polarized because the Supreme Court acted in a way that pre-empted a national debate from occurring, from allowing a broad consensus to develop. In its current form, this Senate bill is likely to lead to a similar outcome. The issues won't go away; the passions will not diminish. But the debate will be stopped dead in its tracks and that will only polarize the country. There is much to discuss and we should conduct a reasoned debate at the national level about immigration issues - such as how to deal with the existing illegal aliens in our country, guest worker strategies, and so forth. If we did that, a national consensus would emerge. None of us would likely prefer every outcome but the odds are we could find a way to policies that are generally acceptable to most Americans.

My personal hope is that a more limited bill comes out of conference and we can then conduct a thoughtful public debate on how best to do the right thing and keep America strong. We owe nothing less to our children and to the future of America.

For more readings on the topic, there have been numerous recent postings on Anchor Rising about immigration. Several key ones include:

Identifying Four Core Issues Underlying the Immigration Debate
More Misguided Thinking From RIFuture & State Legislators on Illegal Immigration
Does The Rule Of Law & A Sense Of Fair Play Matter Anymore? The Debate About In-State Tuitions For Illegal Immigrants
Jennifer Roback Morse: Further Clarifying What is at Stake in the Illegal Immigration Debate

Other recent postings on Anchor Rising include:

Why is Congress Discriminating Against Educated Legal Immigrants?
More Links on Immigration Issue
Asleep at the Border
Senate Rejects Securing the Borders while Supporting Increased Presidential Power
Senator Reed Votes For Open Borders
Senator Grassley's Top 10 Flaws in Immigration Bill
Senator Sessions' Senate Floor Speech on Illegal Immigration Bill
The Senate Passes an Illegal Immigration Amnesty Bill, But Lacks The Courage To Call It What It Is
The Department of Homeland Insecurity and Consular ID Cards
More Thoughts on the Senate Immigration Bill
The Pence Immigration Compromise: Yes to Guest Workers, No to Amnesty
The Department of Homeland Insecurity and Consular ID Cards

In addition, another series of previous postings contain information about recent events in the public debate about illegal immigration and can be found in Parts I, II, III, IV, V, and VI.

Where I've Been Walking

Over on Dust in the Light: "A Life Begins" offers some explanation for my relative lack of literary activity in recent months.

Happy Father's Day!

Happy Father's Day to all the Dads out there!

I am fortunate to have a great Dad, about whom I wrote this last year. He is still going strong one year later. Happy Father's Day, Dad!

National Review Online has several interesting articles on the role of fathers:

Indispensable: Fathers and their day
The Father Effect: It can't be replaced
Husband's Day: Your children will thank you

Hope each of you Dads out there have a great day!

Happy Father's Day!

Happy Father's Day to all the Dads out there!

I am fortunate to have a great Dad, about whom I wrote this last year. He is still going strong one year later. Happy Father's Day, Dad!

National Review Online has several interesting articles on the role of fathers:

Indispensable: Fathers and their day
The Father Effect: It can't be replaced
Husband's Day: Your children will thank you

Hope each of you Dads out there have a great day!

Rediscovering Civil Society, Part I: Mediating Structures and the Dilemmas of the Welfare State

To Empower People: From State to Civil Society was a book published in 1996 and edited by Michael Novak. It is a group of essays which take a retrospective look at the policy recommendations contained in a 1977 book by Peter Berger and Richard John Neuhaus entitled To Empower People: The Role of Mediating Structures in Public Policy .

The first chapter of the original 1977 book defines some structural challenges we face in today's society and offers a policy framework for solving some of those problems:

Two seemingly contradictory tendencies are evident in current thinking about public policy in America. First, there is a continuing desire for the services provided by the welfare state...The second tendency is one of strong animus against government, bureaucracy, and bigness as such...

...we suggest that the modern welfare state is here to stay...but that alternative mechanisms are possible to provide welfare-state services.

The current anti-government, anti-bigness mood is not irrational. Complaints about impersonality, unresponsiveness, and excessive interference, as well as the perception of rising costs and deteriorating services - these are based upon empirical and widespread experience...At the same time there is widespread public support for publicly addressing major problems of our society in relieving poverty, in education, health care, and housing, and in a host of other human needs...

...The alternatives proposed here...can solve some problems...become the basis of far-reaching innovations in public policy, perhaps of a new paradigm...

The basic concept is that of what we are calling mediating structures...defined as those institutions standing between the individual in his private life and the large institutions of public life.

Modernization brings about a historically unprecedented dichotomy between public and private life. The most important large institution in the ordering of modern society is the modern state...In addition, there are the large economic conglomerates of capitalistic enterprise, big labor, and the growing bureaucracies that administer wide sectors of the society, such as in education...All these institutions we call the megastructures.

Then there is that modern phenomenon called private life...

For the individual in modern society, life is an ongoing migration between these two spheres, public and private. The megastructures are typically alienating, that is, they are not helpful in providing meaning and identity for individual existence. Meaning, fulfillment, and personal identity are to be realized in the private sphere. While the two spheres interact in many ways, in private life the individual is left very much to his own devices, and thus is uncertain and anxious...

The dichotomy poses a double crisis. It is a crisis for the individual who must carry on a balancing act between the demands of the two spheres. It is a political crisis because the megastructures (notably the state) come to be devoid of personal meaning and are therefore viewed as unreal or even malignant...Many who handle it more successfully than most have access to institutions that mediate between the two spheres. Such institutions have a private face, giving private life a measure of stability, and they have a public face, transferring meaning and value to the megastructure. Thus, mediating structures alleviate each facet of the double crisis of modern society...

Our focus is on four such mediating structures - neighborhood, family, church, and voluntary association. This is by no means an exhaustive list...

Without institutionally reliable processes of mediation, the political order becomes detached from the values and realities of individual life. Deprived of its moral foundation, the political order is "delegitimized." When that happens, the political order must be secured by coercion rather than by consent. And when that happens, democracy disappears.

The attractiveness of totalitarianism...is that it overcomes the dichotomy of private and public existence by imposing on life one comprehensive order of meaning...

Democracy is "handicapped" by being more vulnerable to the erosion of meaning in its institutions...That is why mediation is so crucial to democracy. Such mediation cannot be sporadic and occasional; it must be institutionalized in structures. The structures we have chosen to study have demonstrated a great capacity for adapting and innovating under changing conditions. Most important, they exist where people are, and that is where sound public policy should always begin...

The understanding of mediating structures is sympathetic to Edmund Burke's well-known claim: "To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle...of public affections." And it is sympathetic to..de Tocqueville's conclusion...[about] Americans: "In democratic countries the science of association is the mother of science; the progress of all the rest depends upon the progress it has made."...

...Emile Durkheim describes the "tempest" of modernization sweeping away the "little aggregations" in which people formerly found community, leaving only the state on the one hand and a mass of individuals...on the other...Today Robert Nisbet has most persuasively argued that the loss of community threatens the future of American democracy...

...Liberalism...has tended to be blind to the political (as distinct from private) functions of mediating structures. The main features of liberalism...is a commitment to government action toward greater social justice within the existing system...Liberalism's blindness to mediating structures can be traced to its Enlightenment roots. Enlightenment thought is abstract, universalistic...The concrete particularities of mediating structures find an inhospitable soil in the liberal garden. There the great concern is for the individual ("the rights of man") and for a just public order, but anything "in between" is viewed as irrelevant, or even an obstacle, to the rational ordering of society...

American liberalism has been vigorous in the defense of the private rights of individuals, and has tended to dismiss the argument that private behavior can have public consequences. Private rights are frequently defended against mediating structures...Similarly, American liberals are virtually faultless in their commitment to the religious liberty of individuals. But the libert to be defended is always that of privatized religion. Supported by a very narrow understanding of the separation of church and state, liberals are typically hostile to the claim that institutional religion might have public rights and public functions...liberalism has a hard time coming to terms with the alienating effects of the abstract structures it has multiplied since the New Deal. This may be the Achilles heel of the liberal state today.

The left, understood as some version of the socialist vision, has been less blind to the problem of mediation...The weakness of the left, however, is its exclusive or nearly exclusive focus on the capitalist economy as the source of this evil, when in fact the alienation of the socialist states...are much more severe than those of the capitalist states...

On the right...we also find little that is helpful...Both the old faith in the market and the new faith in government share the abstract thought patterns of the Enlightenment...today's conservatism typically exhibits the weakness of the left in reverse: it is highly sensitive to the alienations of big government, but blind to the analogous effects of big business...

The argument of this essay...can be subsumed under three propositions. The first proposition is analytical: Mediating structures are essential for a vital democratic society. The other two are broad programmatic recommendations: Public policy should protect and foster mediating structures, and Wherever possible, public policy should utilize mediating structures for the realization of social purposes...

The analytical proposition assumes that mediating structures are the value-generating and value-maintaining agencies in society. Without them, values become another function of the megastructures, notably of the state, and this is a hallmark of totalitarianism. In the totalitarian case, the individual becomes the object rather than the subject of the value-propagating processes of society.

The two programmatic propositions are, respectively, minimalist and maximalist. Minimally, public policy should cease and desist from damaging mediating structures....

The maximalist proposition ("utilize mediating structures") is much the riskier...there is a real danger that such structures might be "co-opted" by the government in a too eager embrace that would destroy the very distinctiveness of their function...

It should be noted that these propositions differ from superficially similar propositions aimed at decentralizing governmental functions. Decentralization is limited to what can be done within governmental structures; we are concerned with the structures that stand between government and the individual...

The theme is empowerment. One of the most debilitating results of modernization is a feeling of powerlessness in the face of institutions controlled by those whom we do not know and whose values we often do not share...The mediating structures under discussion here are the principal expressions of the real values and the real needs of people in our society. They are, for the most part, the people-sized institutions. Public policy should recognize, respect, and, where possible, empower these institutions...

Upper-income people already have ways to resist the encroachment of megastructures...Poor people have this power to a much lesser degree. The paradigm of mediating structures aims at empowering poor people to do the things that the more affluent can already do, aims at spreading the power around a bit more - and to do so where it matters, in people's control over their own lives...

Michael Novak has these words to say in the Introduction to the 1996 book:

One reason for the widespread acceptance of the Berger-Neuhaus approach may be as follows. In modern political thought, two tersm have until recently tended to dominate discourse: the individual and the nation-state...these terms are modern arrivals on the stage of history. But these terms apply...only to the two extremes of social life, excluding the "thickest" parts of social living in between.

The rise of the nation-state came about as heretofore separate petty kingdoms were brought to unity in new and larger national units, as in Germany and Italy in the nineteenth century...Almost as if in echo, there arose, as well, the sharp awareness among more and more individuals...that each is an atomic, lonely, and poignantly vulnerable individual...

Never before had nationalism...exercised so broad and highly organized an appeal upon human hearts. Never before had individuals felt so detached from kin and neighbors. Until recent generations, most loyalties had been local, feudal, personal...rather than abstract, legal and systematized in the new modern style of rationalized bureaucracies, conscripted armies, and impersonal welfare dependencies...

The Arrangement of the New Edition

...the idea of mediating institutions...[is] much easier to talk about...than actually find ways of realizing it, especially through the agencies of government...

...Mediating structures...do not at all fit the patterns of bureaucratic rationality. They require a more prudential, case-by-case form of reasoning...

In recent years...under the pressure of the new "rights regime," distant authorities began indeed to drive out local control and thus to crush these local "mediating structures."...the pressure brought by certain progressive elites to nationalize formerly local institutions and...to do so with the full weight of a new interpretation of the law...

...even the great philanthropic foundations, once thought of as an "independent sector," have slowly been drawn into an indecent liaison with government...foundations have frequently been co-opted by the seductive techniques of governmental agencies...

...The concept of mediating structures is not a simple one, since mediating structures come in all shapes, sizes, and forms, and their relations to the larger society, and even to government, are many and various. This concept is closely related to three others powerful in the world of ideas today: the principle of subsidiarity, the law of association, and civil society...

...We think that the political party that best makes mediating structures the North Star of a new bipartisan agenda will dominate practical politics for the next fifty years. Those who cherish the preeminence of the little platoons and associative networks of civil society over the bureaucratic state are more deeply rooted in the original ground and genius of the American experiment...

...it is never wise to let the perfect become the enemy of the good. It is also unwise to trust the state excessively. And it is usually prudent to place your bet on human liberty. Men are not angels, and on this earth we will never create an earthly paradise...the approach to public policy through mediating structures is not paradise, but only a significant and more humane alternative to the tangle of pathologies our nation now experiences...

Democrats Crossing the Line

According to this morning's ProJo:

More than 14,500 Rhode Island Democrats have switched their voter affiliations within the past six months to participate in the Sept. 12 Republican primary, a figure that experts say will probably help incumbent Sen. Lincoln D. Chafee in his campaign against Cranston Mayor Stephen P. Laffey.

State elections records compiled by the secretary of state's office show that 13,596 Democrats switched their affiliations to independent -- or unaffiliated in the state's political argot -- which would make them eligible to vote in the primary. An additional 987 Democrats switched to Republican, thus making them eligible to vote in the GOP primary.

That's quite a number, especially given the historic turnout of a GOP primary. I wonder if all of the switching has to do with the Laffey / Chafee race, though. Governor Carcieri does face a primary challenger this fall, too, and many believe that traditionally Democrat labor unions are quietly behind Michaud's candidacy. Let's not forget that. I'm also not so sure that all of this party switching augers as well for Sen. Chafee as most of the experts believe.

I would bet that many Democrats simply don't think that Laffey can win state wide. So, they believe that by disaffiliating and voting in the GOP primary they can kill the two biggest GOP birds with one stone. Should Laffey and Michaud win, Democrats no doubt believe that both Whitehouse and Fogerty would roll to general election wins. Of course, any such forecasting doesn't take into account that the vast majority of independent RI voters may not appreciate the genius of such political calculations.

Property Tax Cap Sticking Points

Lowering the acceptable rate of annual property tax increases is a good idea. (I wonder why our Democrat dominated general assembly is tackling this now...Oh yeah, it's an election year). Senator Teresa Paiva Weed (D-Newport) is leading the charge in the effort.

Currently, communities are prohibited from raising their tax levy by more than 5.5 percent in any given year. Paiva Weed's bill would start lowering that rate to 5.25 percent in fiscal year 2008 and dropping another quarter percentage point each year until the cap hits 4 percent in 2013...The bill would also limit school committees from proposing budgets to their city and town councils that exceed the same caps.

The story notes that there are ways to circumvent the cap such as in the case of a population boom and the resulting need for more government infrastructure. Now for the concerns.

One of the largest is due to the fact that School Committees operate independently of most city and town governments and--under the Caruolo Act--they can go to court to get the appropriation dollars they want, even if the money isn't in the city budget. One solution offered would be to increase state aid to education. That could make sense, but that would probably have to be part of a different piece of legislation that would deal with consolidating education administration at the state level.

Finally, the NEA's Robert Walsh offered a good, pragmatic "what if," saying that "theoretically, communities might raise taxes by the maximum allowed each year just to 'maintain their flexibility in years that are aberrations.'"

Another Example of Government Failure

Some news events do not require commentary. This is one such news event.

Paul Caron, the Charles Hartsock Professor of Law at the University of Cincinnati College of Law writes about how the IRS to Refund $15 Billion of Telephone Taxes to Consumers:

The Treasury Department and IRS announced this morning that after losing in five circuit courts of appeals, the Government is throwing in the towel and will no longer seek to enforce the 3% excise tax on long-distance telephone calls enacted during the Spanish-American War of 1898 as a "luxury" tax on wealthy Americans who owned telephones. The IRS will will issue $15 billion in refunds to consumers for long-distance telephone service taxes paid over the past three years:

No immediate action is required by taxpayers.

Refunds will be a part of 2006 tax returns filed in 2007.

Refund claims will cover all excise tax paid on long-distance service over the last three years (time allowed given statute of limitations).

Interest will be paid on refunds.

The IRS is working on a simplified method for individuals to use to claim a refund on their 2006 tax returns.

Refunds will not include tax paid on local telephone service, which was not involved in the litigation.

Makes you just shake your head, doesn't it?

The Economics of Prices

Walter Williams writes about Economics of prices:

Here's what one reader wrote: "Williams, I can understand how the destruction of Hurricane Katrina and Middle East political uncertainty can jack up gasoline prices. But it's price-gouging for the oil companies to raise the price of all the gasoline already bought and stored before the crisis."...Such allegations reflect a misunderstanding of how prices are determined.

Let's start off with an example. Say you owned a small 10-pound inventory of coffee that you purchased for $3 a pound. Each week you'd sell me a pound for $3.25. Suppose a freeze in Brazil destroyed half of its coffee crop, causing the world price of coffee to immediately rise to $5 a pound. You still have coffee that you purchased before the jump in prices. When I stop by to buy another pound of coffee from you, how much will you charge me? I'm betting that you're going to charge me at least $5 a pound. Why? Because that's today's cost to replace your inventory.

Historical costs do not determine prices; what economists call opportunity costs do. Of course, you'd have every right not to be a "price-gouger" and continue to charge me $3.25 a pound. I'd buy your entire inventory and sell it at today's price of $5 a pound and make a killing.

If you were really enthusiastic about not being a "price-gouger," I'd have another proposition. You might own a house that you purchased for $55,000 in 1960 that you put on the market for a half-million dollars. I'd simply accuse you of price-gouging and demand that you sell me the house for what you paid for it, maybe adding on a bit for inflation since 1960. I'm betting you'd say, "Williams, if I sold you my house for what I paid for it in 1960, how will I be able to pay today's prices for a house to live in?"

If there's any conspiracy involved in today's high gasoline prices, it's a conspiracy of cowardice and stupidity by the U.S. Congress...

Because of costly regulations and political restrictions, U.S. nuclear energy production is a fraction of what it might be...

...If Congress mandated that CEOs work for zero pay, gasoline prices would fall by less than a penny. If Congress mandated that oil companies earn zero profit, gasoline prices might fall by 10 cents; of course, we'd have to worry about gasoline availability next year.

CEOs tend to be cowards when dealing with politicians and environmental extremists...

American Policy Towards War and Peace in the Middle East, Part 3

Finally, the House of Representatives today approved a non-binding resolution declaring “the United States will prevail in the Global War on Terror”. The resolution, which passed by a margin of 256-153 with most Democrats voting against, rejects a set timetable for withdrawing American forces from Iraq. Reuters (again via the Washington Post) explains the Democratic rationale for voting no…

In the House, many Democrats called the Republican resolution a sham that tried to connect the Iraq war with the September 11 attacks, even though no such links have been established.

The nonbinding resolution that has no force of law declares that the United States will prevail in the war on terrorism and declares that it is not in the national interest to "set an arbitrary date to withdraw or redeploy U.S. forces" from Iraq.

House Democratic Leader Nancy Pelosi of California called it "an affirmation of the president's failed policy in Iraq."

I suspect if these findings had been removed…

Whereas by early 2003 Saddam Hussein and his criminal, Ba'athist regime in Iraq, which had supported terrorists, constituted a threat against global peace and security and was in violation of mandatory United Nations Security Council Resolutions;

Whereas the mission of the United States and its Coalition partners, having removed Saddam Hussein and his regime from power, is to establish a sovereign, free, secure, and united Iraq at peace with its neighbors;

Whereas the terrorists have declared Iraq to be the central front in their war against all who oppose their ideology;

...as well as these "action" items (action in quotes because they're part of a non-binding resolution)...

Resolved, That the House of Representatives—

(3) declares that it is not in the national security interest of the United States to set an arbitrary date for the withdrawal or redeployment of United States Armed Forces from Iraq;

(4) declares that the United States is committed to the completion of the mission to create a sovereign, free, secure, and united Iraq;

...then the resolution would have been non-controversial.

Representatives Patrick Kennedy and James Langevin both voted against the resolution.

American Policy Towards War and Peace in the Middle East, Part 2

Senators Lincoln Chafee and Jack Reed both voted against an amendment to the National Defense Authorization Act introduced by Senator Rick Santorum that would have extended existing trade sanctions on Iran…

United States sanctions, controls, and regulations with respect to Iran…(relating to exports and certain other transactions with Iran) shall remain in effect until the President certifies to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate that the Government of Iran has verifiably dismantled its weapons of mass destruction programs,

...and would have supported democratic reform in Iran…

Congress declares that it should be the policy of the United States--

(1) to support efforts by the people of Iran to exercise self-determination over the form of government of their country; and

(2) to actively support a national referendum in Iran with oversight by international observers and monitors to certify the integrity and fairness of the referendum…

(a) Authorization.--The President is authorized, notwithstanding any other provision of law, to provide financial and political assistance (including the award of grants) to foreign and domestic individuals, organizations, and entities that support democracy and the promotion of democracy in Iran. Such assistance may include the award of grants to eligible independent pro-democracy radio and television broadcasting organizations that broadcast into Iran.

The amendment failed by a vote of 46-53. Both of Rhode Island's Senators voted for a more concise alternative, introduced by Senator Joseph Biden, that endorsed resolving the continuing conflict with Iran through diplomatic efforts...

-- Congress --

(1) endorses the policy of the United States, announced May 31, 2006, to achieve a successful diplomatic outcome, in coordination with leading members of the international community, with respect to the threat posed by the efforts of the Iranian regime to acquire a capability to produce nuclear weapons;

(2) calls on Iran to suspend fully and verifiably its enrichment and reprocessing activities, cooperate fully with the International Atomic Energy Agency, and enter into negotiations, including with the United States, pursuant to the package presented to Iran by the High Representative of the European Union; and

(3) urges the President and the Secretary of State to keep Congress fully and currently informed about the progress of this vital diplomatic initiative.

The Biden amendment passed by a vote of 99-0.

American Policy Towards War and Peace in the Middle East, Part 1

The United States Senate has overwhelmingly rejected an amendment to the National Defense Authorization Act that would have required most American troops to be withdrawn from Iraq by the end of the year. Here’s the full text of the failed amendment…

(1) SCHEDULE FOR WITHDRAWAL.--The President shall reach an agreement as soon as possible with the Government of Iraq on a schedule for the withdrawal of United States combat troops from Iraq by December 31, 2006, leaving only forces that are critical to completing the mission of standing up Iraqi security forces.

(2) CONSULTATION WITH CONGRESS REQUIRED.--The President shall consult with Congress regarding such schedule and shall present such withdrawal agreement to Congress immediately upon the completion of the agreement.

(3) MAINTENANCE OF OVER-THE-HORIZON TROOP PRESENCE.--The President should maintain an over-the-horizon troop presence to prosecute the war on terror and protect regional security interests.

(b) Iraq Summit.--The President should convene a summit as soon as possible that includes the leaders of the Government of Iraq, leaders of the governments of each country bordering Iraq, representatives of the Arab League, the Secretary General of the North Atlantic Treaty Organization, representatives of the European Union, and leaders of the governments of each permanent member of the United Nations Security Council, for the purpose of reaching a comprehensive political agreement for Iraq that addresses fundamental issues including federalism, oil revenues, the militias, security guarantees, reconstruction, economic assistance, and border security.

The amendment failed by a vote of 93-6. Senators Lincoln Chafee and Jack Reed both voted against.

However, Reuters, via the Washington Post, suggests that the debate on this is not yet over…

With Democrats blasting Republicans for the maneuver, the Senate overwhelmingly voted to put aside the measure which allows Kerry to bring it up again next week for full debate.

A large group of Senate Democrats also was working on an amendment to the defense policy bill for a troop withdrawal starting this year, but without a deadline for completion.

Gotta love those wacky Senate rules of procedure....

The Department of Homeland Insecurity and Consular ID Cards

One follow-up item from the immigration discussion from last week: The Washington Times reported this week on a patriotic American who voluntarily red-teamed access procedures at the Department of Homeland Security...

The Department of Homeland Security allowed a man to enter its headquarters last week using a fake Matricula Consular card as identification…

Bruce DeCell, a retired New York City police officer, used his phony card -- which lists his place of birth as "Tijuana, B.C." and his address as "123 Fraud Blvd." on an incorrectly spelled "Staton Island, N.Y." -- to enter the building Wednesday for a meeting with DHS officials.

Mr. DeCell said he has had the card for four years and has used it again and again to board airliners and enter government buildings, without being turned down once. But he said he was surprised that DHS, the agency in charge of determining secure IDs, accepted it.

Unfortunately, a change in policy won’t fix this problem. According to the Times article, Federal rules already “say the Mexican-issued card is not valid ID at government buildings”.

I think the lessons here are 1) that widespread acceptance, leading to widespread proliferation, of consular IDs is probably not a good idea and 2) that the lifeless, bureaucratic approach of DHS towards American security is probably not a good idea either.

Laffey Responds to the Latest Chafee Ads

The Laffey campaign has responded to the Chafee campaign's latest round of broadcast advertising, going as far as to say that the Chafee campaign is "putting forth utter lies against his primary opponent Mayor Steve Laffey in an attempt to save his political career from impending disaster".

The Laffey campaign takes extreme exception to three claims made by the Chafee campaign. The first two are made in Chafee TV ads...

1. Laffey swore to fight special interests. Instead he gave a city vendor a secret no-bid contract in exchange for thousands in campaign contributions.

Citing a Providence Journal article from November 19, 2005 as support, the Laffey campaign details why they believe the use of the terms "secret" and "no-bid" is not accurate...

• The City of Cranston engaged in two projects with Nestor Traffic Systems. It is unclear which one Senator Chafee is referring to, but either way, he has his facts all wrong.
  
• The first project was a contract the City of Cranston signed with Nestor Traffic Systems to test a system that measures the speed of passing cars in May of 2005. This contract was never a secret. In fact, Mayor Laffey held a press conference on May 8, 2005 announcing the contract. The Providence Journal was there and reported on it on May 9th, as well as multiple news stations.
  
• The city did not require a bid because it was a mere $10 contract for a trial phase only. Had the City of Cranston decided to use the technology, it would have put the program out to bid for a long-term contract.
  
• The second project occurred in June of 2005, when the City of Cranston awarded a bid to Nestor Traffic Systems for red light cameras AFTER the project went out to bid and Nestor was the lowest bidder. Nestor was awarded the bid by the Board of Contract and Purchase, which Mayor Laffey does not control.

Furthermore, the Chafee campaign has not presented evidence of a quid-pro-quo between Nestor and anyone in Cranston city government to support the "in exchange" claim. If we are to assume something unseemly is going on anytime government contractors make contributions to a campaign, should we apply the same standard to Federal elected officials also? For instance, if a Senator announces that a Federal contract for millions of dollars is being given to a corporation that will be doing work in his state, and then the Senator receives a campaign contribution from that corporation, should that contribution automatically be assumed to be tainted? I think that that's much too harsh a standard.

The second TV-ad complaint concerns Mayor Laffey's spending record in Cranston. Senator Chafee's ad says...

2. Stephen Laffey campaigned to cut spending, but once elected he increased spending nearly 20%.

As the Laffey campaign points out, in terms of percentage increase, the spending records of Lincoln Chafee and Steve Laffey over their first four years in office as Mayors are very similar. According to the sources cited in the Laffey press release, plus a few others (list)...

• Cranston went from a budget of $186,000,000 the year before Mayor Laffey took over in Cranston to a budget of $226,200,000 in his fourth year as Mayor. That's an increase of $40,200,000 or 21.6%. Warwick went from a budget of $145,000,000 to a budget of $175,000,000 in Mayor Chafee's first four years in office, an increase of 20.6%
• The increases in non-school department spending are also roughly similar. Cranston's non-school department budget went from about $90,500,000 in 2003 to $102,400,000 proposed for FY2007, an increase of 11.6%. Warwick went from $72,000,000 to $79,500,000, an increase of 10.4%
• Warwick, however, already had a budget surplus when Lincoln Chafee took over as Mayor. Cranston was on the verge of bankruptcy when Steve Laffey came into office.

So ultimately, when the Chafee folks argue "look what he does, not what he says" in their negative ads, aren't they arguing a non-sequitur -- don't vote for the challenger, because he has the same record that our incumbent does!

The third complaint by the Laffey campaign is...

3. In his radio ad, Senator Chafee claims he supported the attack against the Taliban.

Marc has already discussed the substance of this claim...

It is incorrect to simply state that Sen. Chafee didn't support attacking the Taliban: he eventually did, even if with reservation. The fact is that Sen. Chafee did support the action and it is not correct to imply--as the Laffey ad does--that Sen. Chafee never supported attacking the Taliban.

The Laffey campaign's subsequent defense of their ad rests on the reluctance of Sen. Chafee to make a firm decision. To my mind, this defense of the actual ad is actually more compelling and (yes) truthful than the original.

The figures on the Warwick budget during Mayor Chafee's first four years in office were taken from a June 9, 1992 Projo article by Elizabeth Rau...

City Council members last night approved a $145 million budget that will require no tax increase next year, but they delayed voting on a substantial cost-cutting measure that enabled them to freeze the tax rate.

Although school officials and parents had pleaded with the council during a hearing on Saturday to give the schools more than the $73 million allocated by Donovan, no additional money was budgeted last night,

...and a June 21, 1996 Projo article by Tony DePaul...

Anticipating that the council might challenge the overall veto, Chafee also used his line-item veto to strike out every line in the council's version of the budget, except for the school appropriation of $ 95.5 million.

Chafee contends that because the council did not override his veto by midnight June 15 - the state deadline for local budget approval - his original $ 175 million budget automatically became law.

The figures on the Cranston budget during Mayor Laffey's first four years in office were taken from a March 27, 2003 Projo article by Scott Mayerowitz...

[Mayor Laffey] urged his audience to attend Monday night's City Council meeting, at which he will submit a $191-million budget that would increase overall spending by nearly $5 million, or 2.5 percent. He has characterized his budget as $11 million short of what would be needed unless fundamental spending changes are made. (This year, the School Department's budget was frozen at the prior year's level, about $95.5 million,

...and from a May 10, 2006 Projo article by Zachary Mider...

The council considered no major changes to Mayor Stephen P. Laffey's $226.2-million budget proposal for the fiscal year that begins July 1, instead shuffling money among minor accounts and debating salary adjustments for a few administrators.

Laffey's budget provides $123.8 million for the School Department, a $8.4-million increase but less than the School Committee requested.

State Policy Primers

Budget Primers:

Ian Donnis lays out the big picture, and the arguments being made on all sides, in this week’s Providence Phoenix.

(Hmmm. Donnis’ article mentions that the state needs to close a $243,000,000 shortfall. Scott Mayerowitz’s Projo article from Tuesday mentions that the RI House wants to increase state spending by 4.9%. Can you do both at the same time? The answer either lies in the question of a) what a shortfall is defined relative to or b) a shortfall defined in terms of one state account, i.e. general revenues, that can be hidden by borrowing money from another account.)

Scott Mayerowitz discusses how the budget is not yet a done deal, and what the outstanding issues are, in today’s Projo.

Jim Baron also provides some detail about what the Governor does and does not like about the budget in the Pawtucket Times.

Healthcare Primers:

Ian Donnis discusses the "fair share" health care legislation pending in the Rhode Island House in the Providence Phoenix…

Elizabeth Gudrais discusses the “seven-bill legislative health-care package” also pending in the legislature in today’s Projo.

No One is Above the Law, Except for Employees of the Rhode Island Court System

Over at the RI Law Journal, Jon Pincince points out something odd about the reacton to the Projo’s inquiries about $42 million in assessed but unpaid fines. The Projo asked for a list, mandated by law, of who hadn't paid the fines they owe…

The Journal has been asking the courts since March how much in fines from the last six years is outstanding and who hasn't paid. Court officials initially rejected the request, saying the law doesn't require the release of such information.

Actually, the law does require the information to be released. Mr. Pincince points us to the relevant section of Rhode Island law…

Notwithstanding any other provision of law, the director of the finance section on a quarterly basis shall prepare a list of the persons who owe court imposed or court related fees, fines, court costs, assessments, charges and/or any other monetary obligations which have been unpaid for a period in excess of ninety (90) days from the date that any such amounts were due…

Any such list prepared by the director of finance shall be available to the public for inspection and shall be published by the director of the finance on the website that is maintained by the courts. Provided, however, that any such list prepared by the director shall not include any individuals social security number.

However, according to the Projo, the courts have not been complying…

State law currently requires the judiciary to produce a list four times a year of all the people who have outstanding fines in the Superior and District courts and the Traffic Tribunal. The list was supposed to include names, addresses and the amounts owed. The information was also required to be posted on a court Web site. The courts have never generated such a list or posted it online.

Rhode Island Court Administrator Joseph Baxter told the Projo that the disclosure law was not being obeyed because “the courts” thought it was unconstitutional. However, that opinion has never been rendered in any case heard in the RI Court system. Mr. Pincince asks at what point being employee of the court system came to mean that you get to pick and choose which laws you will obey…

Can employees of the Rhode Island judiciary disregard a statute that mandates certain action when “the courts” believe the statute is unconstitutional? While this issue has been discussed in terms of whether “the courts” have complied with the law and whether “the courts” believe the law is constitutional, the statute speaks in terms of requiring the “director of the finance section” to prepare the list of persons who owe fines and to publish that list on a web site maintained by the courts. It seems to me that the director of the finance section would have two options: (1) comply with the law, or (2) challenge the law in the courts. Instead, the director of finance, or someone higher up in the judiciary’s chain of command, made an unofficial, out-of-court determination that the law is unconstitutional and need not be complied with.

The courts aren’t the only branch that has been acting weirdly here. Members of the House Judiciary Committee also initially tried to protect the identities of people who haven’t paid their fines, though the move ultimately failed. Again, from the Projo story…

The original version of the bill voted on yesterday, sponsored by Judiciary Committee Chairman Donald J. Lally Jr., D-Wakefield, and filed May 18, would have eliminated disclosure requirements or limited them to Traffic Tribunal fines.

The revised version, which the committee passed, put them back in, requiring the courts to prepare a quarterly list of people who have owed fines for more than 90 days, are not part of a court-ordered payment plan and are not appealing the fines.

Given that the reporting of fines is a fairly innocuous requirement, it’s hard not to wonder about who Mr. Baxter and the sponsors of the original legislation that would have ended the disclosure requirement are trying to protect.

The Michaud Collaboration Method

Justin already referred to the position paper sent out by the Dennis Michaud campaign. The linchpin to many of Michaud's positions seems to be not so much what he'd do differently than Governor Carcieri, but that it is his belief that he will be better able to bring people together. He really puts a premium on "collaboration." The truth is, I agree with many of Michaud's goals and can appreciate his desire to bring people together. However, I think it is either naivete or a large dollop of hubris for him to believe that somehow he would manage to succeed where so many others have failed. Let me give some examples.

For instance, in stating his position on education, Michaud suggests

Collaborating with educators, organized labor, the executive branch and legislative assembly to improve education

For more specifics, follow the above link to the actual document. In short, this plan doesn't much differ from some of the things the Governor has tried. Thus, we are left to believe that, somehow, Michaud will be able to convince educators, labor leaders and legislators to support the establishment of more charter schools (again, read the document), something they have vehemently opposed in the past. How is he going to get them on board?

Michaud also addresses labor issues by saying he wants to

establish a collaborative dialogue with organized labor...

I'm sure, as history has shown, that organized labor will be very open to reducing their benefits just because Prof. Michaud asked them to.

On health care:

I will implement a collaborative approach with health care professionals, insurance professionals, organized labor, business, and General Assembly to come up with new innovative solutions...

Michaud also wants to be bipartisan when it comes to tax policy by

Creating a bipartisan commission that incorporates members of the business community, the general assembly, the executive branch, organized labor, academia/economists and civic groups to address state taxation policies...

In Prof. Michaud's world, collaboration and the formation of bipartisan commissions automatically leads to the solutions he seeks. It's really that simple. We all know that Governor Carcieri never attempted to sit down and deal openly and honestly with some of these same people, right?

Of course, the belief that through collaboration and dialogue all things can be solved is a common conceit held by most of those found in faculty lounges across the country. They are wise and informed on many and sundry theoretical problems and are also able to formulate brilliant and theoretical solutions to the world's problems.

However, the world of hardball RI politics is not theoretical and the players have some very real motivations and desires. They don't always mean or do what they say. Any given solution thought up by Prof. Michaud will be viewed by some entity (unions, Democrats) as a threat to its power or well-being. What then?

What if in the course of your dialogue you discover that one or more of the entities won't budge? Do you push them and risk a break down in your collaboration and risk being accused of being undiplomatic? Do you try to outlast them and hope they come around, which risks a perpetually inconclusive "outcome?" Do you keep talking for its own sake? Do you give them almost all they want and claim victory over their token concessions on one or two points?

Missing in this list is the course so often taken by Governor Carcieri: taking the issues directly to the people and working with those who will work with him honestly and above the board. This also means calling attention to the intransigence of those with whom he has tried and failed to deal. This is the only path to real reform: bring bold solutions to the table and call attention to those blocking reform. Of course, to Prof. Michaud, that's just being "mean."

Pay No Attention to that Shrinking Deficit Behind the Curtain!

Unless your top budgetary priority is high tax rates, there’s good short-term news regarding the Federal budget deficit being reported in the Investor’s Business Daily (h/t Instapundit). The Federal deficit may be cut in half this year…

Aided by surging tax receipts, President Bush may make good on his pledge to cut the deficit in half in 2006 -- three years early.

The 2006 deficit through May was $227 billion, down from $273 billion at this time last year. Spending is up $130 billion, or 7.9%…

With the economy topping $13 trillion this year, a $270 billion deficit would equal less than 2.1% of GDP, easily beating the president's 2.25% goal. Bush made his vow when the White House had a dour 2004 deficit forecast of 4.5% of GDP, or $521 billion. The actual '04 deficit came in at $412 billion, or 3.5% of GDP, before falling to $318 billion, or 2.6% of GDP, in 2005.

A CBO analysis last week noted that withheld individual income and payroll taxes are up 7.6% from a year ago, with the gains picking up in recent months…

Corporate income taxes are up about 30% from last year's pace.

However, the long term trend is not so rosy. Larger deficits are likely in the future, unless there is reform in automatic entitlement growth…

Long-term growth in Social Security, Medicare and Medicaid "threaten to force either European-style tax increases, unprecedented spending cuts or unprecedented debt," said Heritage Foundation budget expert Brian Riedl. "There's no growing out of the long-term budget problems."

Heritage sees an $800 billion deficit in 2016, assuming tax cuts are extended and spending stays on its present course. If the economy and tax receipts continue to outperform, the deficit would still be at least $600 billion, Riedl said.

He noted Congress has been more disciplined about discretionary spending lately. But that saves a mere $10 billion a year, he said.

"Are You Conservative?"

Arnold Kling has a few questions regarding whether or not "you" are conservative. Here they are:

1. Do you believe that bringing children into the world is a very serious responsibility for the parents?

2. Do you believe that the flaws and imperfections of human beings are reflected in government?

3. Do you believe that it is better to try to accumulate wealth for retirement or to rely on a pension?

4. Do you believe that your health is your responsibility?

5. Do you believe that education is more important than public schools?

6. Do you believe that the world would be better off if more countries were like America, or not?

Follow the link for Kling's answers to each question. However, here's Kling's central thesis, which gives you a hint at the sort of answers he has to each question:

What is distinctive about liberals is their belief that they are the only people who can exercise freedom with responsibility. They believe that a paternalistic government can make better decisions for those who not in the elite.

Kling doesn't just take the liberal, "elitist" mindset to task, either. The paternalistic attitude as exhibited by the Bush administration in such matters as No Child Left Behind or Medicare Drug program also fosters government growth. We need look no further than the fraud, waste and abuse that ocurred under the mantle of Hurricane Katrina "aid" for further proof.

The short answer to the question, "Are you conservative?" is dictated by whether or not you believe in an expansive or conservative use of government to "solve" people's problems.

Dennis Michaud, A Candidate of Convenience

Attaching a typo-rife position paper, Megan Boben — apparently the press secretary for Republican candidate for governor Dennis Michaud — emailed me to point out Charles Bakst's "great job accurately representing Michaud's positions." I'm sure more time with that piece would reveal a wealth of interesting quirks, but this one jumps out at me:

VOTER INITIATIVE: "It's bad." The Assembly should thrash out issues instead of voters being able to force them onto the ballot. Wealthy people or corporate interests "could literally highjack the voters."

This position is mostly noteworthy when contrasted with the following "Current News" from Michaud's campaign Web site:

Dennis is extremely excited that the state legislature has decided to allow the citizens of Rhode Island to vote on the Casino issue. If the people decide that they want a casino to help secure the future of Rhode Island, as Governor, Candidate Michaud looks forward to helping the project come to fruition.

I suppose one is meant to conclude (wink, wink) that Michaud is, specifically, "extremely excited" that the wealthy people and corporate interests who back the casino will have their opportunity to "literally highjack the voters." Of course, between the lines of the following from the Bakst column, one gets the sense that it may be the GOP primary that is hijacked first:

LOBBYING: Lt. Gov. Charlie Fogarty, Democratic candidate for governor, proposes that lobbyists have to report every contact -- you know, meetings, phone calls, e-mails -- they have with legislators and other top government decision-makers. "It sounds like a good idea to me," says Michaud.

Touting the good ideas of a potential general election opponent from another party is, to say the least, a suspicious political slip — especially when presented in conjunction with an ostensible position paper that makes repeated and nakedly political accusations against a primary opponent. I was going to joke that Michaud's campaign slogan of "we can do better" would best be directed at his campaign staff, but I suppose it all depends on what, exactly, his campaign is trying to do.

First Look at the Rhode Island Budget

Details about the budget that the House Finance Committee approved today are starting to trickle out. These details are from the Associated Press via WJAR-TV.

I think that the most current numbers mean that the state must come up with about $250,000,000 in budget cuts…

[In February] the state was facing a $300 million budget deficit by the end of next year…

Since then, the state's financial picture has improved. Budget officials announced in May that the state had $57 million more than expected.

The House budget contains at least one small step towards welfare reform…

Carcieri had proposed reducing the time on welfare from 60 to 30 months. The House would not reduce the total time, but would count time spent on other state's welfare programs toward the 60 month cap. The plan would allow welfare recipients to count some education and training toward their work requirements.

A compromise has been arrived at concerning state health insurance for the children of illegal immigrants…

Under the plan, immigrant children would have to enroll in the state's health-insurance program for the poor by the end of the year. After that, no new noncitizens would be allowed to enroll, even if they are in the United States legally.

And the House leadership's flat tax as well as the Governor’s phaseout of the car tax are both present…

Both the governor's and the House budget plans include some tax relief, such as a lowering of the car tax.

The House plan includes a flat income tax that would benefit the state's richest residents. Rhode Island now taxes people in the highest income bracket at 9.9 percent after deductions. Under the plan, taxpayers would have the option of paying an 8 percent flat tax that allows no deductions.

UPDATE:

Scott Mayerowitz of the Projo reports on a few more budget details…

I guess an overall cut in spending is not (actuarily) necessary…

The tax and spending plan for the coming year -- only unveiled today -- raises spending by 4.9 percent.

The budget assumes a reduction in the number of state employees…

The Democratic lawmakers chose not to reduce state employee benefits, as the Republican governor had proposed, but left it up to the Carcieri’s staff to somehow reduce the workforce enough to save $36.5 million…

Lawmakers balked at implementing a number of changes to the state’s personnel system that Carcieri had pushed for, saying that most benefits were protected by union contracts. Carcieri’s proposals were aimed at letting some of the more senior workers to retire. Instead, lawmakers raised their estimates about turnover and how long a position would remain vacant.

And another reasonable welfare reform appears ready to be implemented…

Carcieri also wanted to strip benefits from parents who don't comply with their employment and training plans after three months, down from 18 months. Lawmakers chose to go for six months.

A Question for Peter Kilmartin and John Patrick Shanley, Among Others

Usually when the Rhode Island legislature does something to exclude the general public from the lawmaking process, it comes up with some phony, superficial explanation of why it must be done. The public can’t have voter initiative because it would give undue influence to special interests; non-binding ballot questions can’t be placed on the ballot because they violate separation of powers, etc.

So what’s the phony explanation for why the details of a six billion dollar-plus budget must be presented and voted on all within the span of about four hours, after lobbyists have had full access to the process, but no information has been given to the public? As Scott Mayerowitz reports in the Projo…

Sometime this afternoon, or maybe early this evening, Democratic lawmakers will unveil their $6.6-billion budget for the coming year.

But what's in it is anybody's guess.

For weeks, top lawmakers have huddled behind closed doors hammering out the details and negotiating with lobbyists.

Those talks continued into the night yesterday. Elected officials from both the House and the Senate refused to say anything.

The real reason for the secrecy, of course, is that Rhode Island's Democratic party fears a debate on the role of government and what it might reveal about why Rhode Island is mired in deficits while most other states are running surpluses. The Democrats keep as much information as they can away from the public in an attempt to stifle the civic discussion that might lead to creative solutions to our society’s challenges. They prefer to stay in their comfort zone of treating the process of government as nothing more than handing money to their favored interest groups, a comfort zone that has no place for discussing ideas with the public.

The Rhode Island Legislature Fails to Reform Eminent Domain

Two different versions of eminent domain have been passed by the Rhode Island legislature, one by the Senate, one by the House. Sadly, neither bill clearly limits the power claimed by the state government to seize private homes and give them away to new owners who promise to increase the tax-value of the seized property.

The House passed eminent domain legislation (H6739A) officially introduced by Representative Charlene Lima. (The version of the bill passed by the House bears no resemblance to the bill introduced by Representative Lima this past January. This is not a bad thing in and of itself; her original bill was not very good either). Here's the full text of H6739A as passed...

(a) Notwithstanding any provision of law to the contrary, no public corporation, municipality, quasi-state agency, state agency, or any political subdivision thereof, shall exercise their power of eminent domain to acquire private property for the purpose of conferring a private benefit or use for a particular private entity.

(b) Nothing in this chapter shall abrogate or diminish the provisions of Chapters 31 and 32 of Title 45.

There are at least two problems with the House bill (beyond the part (b) exception, which basically says that the government reserves the right to seize homes in areas determined to be blighted). The first problem with H6739A is its ambiguity as to whether it even addresses the core controversy surrounding eminent domain for economic development. If a tax-revenue increase is the expressed reason for the taking of a private home, does this mean the purpose of the taking goes sufficiently beyond "conferring a private benefit" to a point where H6739A does not apply? Why wasn't the clearer language proposed in other bills prohibiting the use of eminent domain for "transfer to a person, nongovernmental entity, public-private partnership, corporation or other business entity" approved instead?

The second problem with H6739A was pointed out by Representative Nick Gorham on the House floor; the meaning of "use for a particular private entity" is not well defined. Suppose eminent domain seizures are proposed that would give seized property to a shopping mall developer. Since a shopping mall will be used by more than a "particular" private entity -- multiple shop owners as well as private citizens would "use" the facility -- does H6739A apply or not?

I am not sure of the answers to these questions. They would have to be decided in court, which means that H6739A keeps us right where we are at the present moment, where the right combination of lawyers and city councils and economic redevelopment authorities can throw someone of out their home raise by making arguments about increased tax revenues to a sympathetic panel of judges.

The Senate bill (S2155A), much longer and more precise, looks nothing like the House bill. However, S2155A also fails to protect Rhode Island citizens from the possibility of losing their homes to economic development seizures. The clause supposedly limiting the power of the state to use eminent domain for economic development begins as follows...

No entity subject to the provisions of the chapter shall exercise eminent powers to acquire any property for economic development purposes unless it has explicit authority to do so and unless it conforms to the provisions of this section.

Red flag right away. The "unless" clause pre-supposes that the government intends to continue asserting its right to use eminent domain for economic development.

The biggest problem with S2155A, however, is not what is there, but what is not. The original version of S2155 contained strong, clear and explicit protection for homeowners...

The entity shall not take by eminent domain property for economic development purposes that is significantly residential and is not in substantial violation of applicable state laws and regulations and/or municipal ordinances and codes, regulations governing land use or occupancy at the time of the proposal of the development plan for development, but may acquire such property in accordance with the development plan for a negotiated, mutually agreed on price.

This existence of this strong "shall not" clause in the original bill led me to label the original incarnation of S2155 as one of the "good" eminent domain reform bills. Unfortunately, the Senate was sure to strip the unambiguous protection for "significantly residential" property out of the bill before passing it.

Now, all S2155A says is that the government has to have a written plan before throwing someone out of their home in the name of economic development and that the government must give an owner being evicted some time to sell the home first. This may be the most offensive part of the new "improved" S2155A; how much will someone be able to get for a home on the open market once it's under the cloud of being seized by the state?

With ample opportunity to protect the interests of the people, the Rhode Island legislature chose to protect the government's broad power to seize your home instead. To see the better eminent domain reforms the legislature decided not to implement, check out the text of Senate bill S2408 and House bill H7151.

The Tides of Values

PROEM:
I wrote the following piece for publication in the closing months of 2004. As these things happen, it was never published, but never actually rejected. In the intervening months, I've periodically looked for it online — as if I'd posted it somewhere — so it seemed prudent to go ahead and do so now.

---

Whether or not "moral values" were the decisive factor in this year's election, pervasive acceptance that they are the opposition's domain seems to have stung some liberals deeply. The Democrats have long been marketed as the party for good deeds done by proxy. As University of Connecticut professor emeritus William D'Antonio phrased it, in his Boston Globe defense of "Massachusetts liberals," "The money they have invested in their future is known more popularly as taxes."

The moral heft that some public-dime philanthropists attribute to taxation has granted the flow of federal funds a central place in the dark fantasies into which such people have recently retreated in their wounded vanity. They are discovering the great flaw of a strategy that makes a social-investment advisor out of a republican democracy.

The blue states, those that voted for John Kerry, contribute more to the federal coffers, but that money disproportionately ends up in the red states, those that voted for George Bush. As long as the priorities of the former group defined the national agenda, however, this relationship hasn't attracted much attention. Perhaps those liberals who noticed it thought the political leverage garnered through dependency was part of their investment.

But with the decisive reelection of a hated regime, coastal Democrats fear that the "segment of the country that pays for the federal government is now being governed by the people who don't pay for the federal government." The partisan who decried that state of affaires on The McLaughlin Group, Lawrence O'Donnell, believes that its continuation will generate "a serious discussion of secession over the next 20 years."

Unfortunately for the budding rebels of the coasts, some of the evidence doesn't quite fit their complaint. For example, it's true that dense populations tend to vote in the Democrats' favor; hence the idea that the blue/red gap means that the tax dollars of wealthy urbanites are being funneled to rustic fundamentalists. On the local county level, however, population correlates with federal expenditures. Consequently, expenditures also correlate with party affiliation. In fact, the distribution of those dollars appears to be the better predictor of Democrats' success.

Consider New Jersey, to which the Tax Foundation attributes the "'blessing' of being the [top] state that gives far more than it receives." Using 2003 data, the average Kerry county in New Jersey has 181% the population of the average Bush county, but it receives 211% the federal largesse, according to the Census Bureau. In a state that receives back only 57¢ per federal tax dollar collected, each resident of Kerry territory accounts for $5,917 in federal expenditures, while each resident of Bush country accounts for $5,086.

Suspicions of a similar situation in Illinois led the aptly named blogger Sensible Mom to hypothesize that red counties "are contributing more to and demanding less of the federal government than the blue counties." And as it turns out, in her state, Kerry-voting counties include 53% of citizens but claim 60% of distributed federal dollars. That disparate distribution of the 73¢ that the state gets back per tax dollar translates into $6,011 for each blue county resident, compared with $4,526 for each red county resident.

Even in Mississippi, where Kerry counties are home to only 32% of the population, they claim 39% of federal expenditures. Per person, the blue sections of this red state take $8,082 from the national tax pool, while the red sections take only $6,675. As for New Mexico, which is opposite New Jersey on the Tax Foundation's list, the $1.99 that the feds return for each tax dollar accumulates to $9,517 per Kerry county citizen and $8,773 per Bush county citizen. In this case, the difference would be much greater if it weren't for almost $2 billion in non-defense procurement dollars pouring into Los Alamos county, which President Bush won with 52% of the vote.

The dramatic skew in Los Alamos raises an intriguing question: who actually gets the money? Lawrence O'Donnell claimed that "ninety percent of the red states are welfare client states of the federal government." But the Los Alamos National Laboratory and its $2.2 billion budget (FY04) are managed by the University of California, the public higher education system of the nearest blue state.

Alternately, consider the locally focused federal charity of Section 8 housing. The nation's two richest states, Connecticut and New Jersey, receive $126 and $106 per capita for Section 8, respectively. The nation's two poorest states, Mississippi and Arkansas, receive $54 and $53 per capita. For the navy blue states of Rhode Island and Massachusetts, the numbers are $178 and $200. Obviously, housing is more expensive in the coastal states, but again: who gets the money? The needy may manage to put roofs over their heads — in homes that don't necessarily vary qualitatively no matter the area's political color. However, the cash goes into the bank accounts and investment portfolios of landlords and property owners.

Number-crunching aside, blue-state conservatives have reason to suspect that the tides of money aren't their liberal neighbors' most significant concern. Just as there are blue hands out for federal dollars in red states, there are voters in the blue states who aren't interested in outsourcing good deeds and the provision of hope to politicians and bureaucrats. His second time on the presidential ballot, W. increased his percentage of votes in 48 states, after all. In fact, Karl Rove has noted that the Bush vote in Rhode Island increased at more than twice the national rate.

Potential secessionists might be surprised how many loyalists are in their midst. (Indeed, the more they rant, the more there will be.) Beneath the confusion of liberals' clamorous dominance on their home turf, it might actually be the case that the people who really pay for the federal government are at last being governed by sympathizers from that distant land in which "moral values" are not merely a catch phrase to be spun.

ADDENDUM:
Reader AuH2ORepublican corrected me regarding the number of states in which Bush increased his vote (see comments section). Honestly, I don't recall my source for that statistic, but I've modified the text.

The War Against Wind Power Continues

The Washington Post follows up on the Chicago Tribune story about how Congress’s attempt to kill the Cape Wind project has derailed at least 12 other wind-power projects located in the Midwest…

More than 130 wind turbines are proposed for the hilltops of central Wisconsin, but that project and at least 11 others have been halted by the Defense Department as it studies whether the projects could interfere with military radar.

Wind farm developers, Midwestern legislators and environmentalists say the farms pose no risk, noting that there are already numerous wind farms operating in military radar areas. They say a renewable, domestic source of energy such as wind is crucial to energy security and independence. They say their wind turbines are victims of the ongoing dispute between Cape Cod residents and developers of the proposed Cape Wind farm in Nantucket Sound.

The Defense Department study was put in the 2006 Defense Authorization Act -- inserted, say wind farm developers, by senators who want to block Cape Wind.

"This legislation was intended to derail Cape Wind, but it had a boomerang effect and affected a lot of projects around the country," said Michael Skelly of Horizon Wind Energy, a Texas company constructing the country's largest wind farm near Bloomington, Ill.

This spring, facilities in the works in North Dakota, South Dakota, Illinois and Wisconsin received "proposed hazard" letters from the Federal Aviation Administration saying the projects must be halted pending the Defense Department study.

Previewing a Democratic House Majority: Hold on to your Wallet

The very first thing Rhode Island Congressman Patrick Kennedy talks about in the biographical section of his official Congressional website is his work on the House Appropriations Committee...

Patrick J. Kennedy is serving his sixth term in Congress as the representative from the First District of Rhode Island.

Kennedy was appointed to the House Appropriations Committee in December 1998, but requested a leave of absence in order to fulfill a two-year term as the chairman of the Democratic Congressional Campaign Committee. With the term completed, Kennedy now sits on the powerful panel which has authority over all of the federal government's discretionary spending. As part of his Appropriations duties, Kennedy sits on the Subcommittees on Labor, Health and Human Services, and Education, and on Commerce, Justice, State, and Judiciary.

I hope that Congressman Kennedy considers the national interest in his work on the Appropriations Committee, something that his Appropriations Committee colleague Jim Moran of Virginia apparently believes to be largely unnecessary. This is how Congressman Moran, in the Arlington Sun-Gazette, talks about his plans for the future if the Democrats retake a majority in the House...

Moran, D-8th, told those attending the Arlington County Democratic Committee's annual Jefferson-Jackson Day dinner on June 9 that while he in theory might oppose the fiscal irresponsibility of "earmarks" - funneling money to projects in a member of Congress's district - he understands the value they have to constituents.

"When I become chairman [of a House appropriations subcommittee], I'm going to earmark the sh** out of it," Moran buoyantly told a crowd of 450 attending the event.

Is Congressman Moran speaking only for himself here, or expressing the philosophy shared by all Congressional Democrats? I've contacted Congressman Kennedy's office to try to find out.

Remember Congressman Moran when Democrats make their arguments for why taxes must be rasied. It's not that more money is needed to address real needs; it's that Congressional chairmen want to take control of more of your money in order to bolster their power.

The Pence Immigration Compromise: Yes to Guest Workers, No to Amnesty

The discussion in the previous post about the possibility of separating support for a foreign-citizen guest worker program from support for granting amnesty to current illegal immigrants, vis-a-vis the Rhode Island Senate campaign, turns out to be very timely indeed. (Once again, Anchor Rising -- and its commenters -- bring you the details of our nation's most important policy debates before government decisions become faits-accomplis.

In direct response to the immigration package recently approved by the Senate, Congressman Mike Pence of Inidiana has proposed a compromise, outlined in Sunday’s OpinionJournal, that says yes to guest workers but no to amnesty...

This bill is tough on border security and tough on employers who hire illegal aliens. It will include a guest worker program -- but it will not include an amnesty (nor require a huge new government bureaucracy to administer the program). I believe this legislation is a strong alternative to the amnesty plan passed by the Senate…

To strengthen border security and toughen enforcement of exisiting immigration law, Congressman Pence proposes implementing the enforcement-first immigration bill passed last December by the House of Representatives...

Since immigration reform must begin by securing our border, my plan incorporates the Border Protection, Antiterrorism and Illegal Immigration Control Act, already passed by the House, in its entirety, with only minor changes. Thus my plan will add port-of-entry inspectors, end the policy of "catch and release," put to use American technology such as unmanned aerial vehicles, require a security fence to be built across our southern border, and require the Secretary of Homeland Security to certify that all these border security measures are substantially completed before any new guest worker program would begin....

My immigration bill includes strict employer enforcement. It does so by incorporating the employer-enforcement provisions contained in the House-passed Border Protection bill. Thus, there will be established a nationwide electronic employment-verification system through which employers will confirm the legality of each prospective and current employee.

Next, Congressman Pence proposes implementing a guest-worker program, once the border has been secured. In the Congressman's version of a guest worker program, citizens of other countries would meet with potential employers and apply for the appropriate visa while outside of the borders of the US…

Private worker-placement agencies -- "Ellis Island Centers" -- would be licensed by the federal government to match guest workers with jobs that employers cannot fill with American workers. These agencies will match guest workers with jobs, perform health screening, fingerprint them, and convey the appropriate information to the FBI and Homeland Security so that a background check can be performed. Once this is done, the guest worker would be provided with a visa issued by the State Department. The whole process will take a matter of one week, or less.

My immigration reform plan does not favor illegal immigrants. Anyone may apply for a guest-worker visa at the new Ellis Island Centers; indeed, the plan may actually work to the advantage of applicants who have never violated our immigration laws, since guest-worker visas will be issued only outside the U.S.

And third, well, technically, there is no third. If the first two parts of his program are implemented, Congressman Pence does not believe it necessary to offer general amnesty towards any current illegal immigrants, nor to place guest workers on an automatic “path to citizenship”...

After six years, a guest worker must decide whether to return home or seek citizenship. But he will do so under the normal rules and regulations of our naturalization laws. There is no path to citizenship in my bill.

Congressman Pence is very well respected within conservative and Republican circles. The fact that he is promoting a guest-worker program suggests that the concept probably has enough support amongst House Republicans to pass, meaning that the debate betwen the House and the Senate over immigration policy now boils down to two straightforward questions...

1. Should the US secure its border before proceding with any programs -- be they guest woker programs or an amensty offers -- that change the visa status of current illegal immigrants, or should it procede with those programs whether or not the border is secure?
2. Should the US offer a "general amesty" to illegal immigrants currently here -- i.e. allow citizens of other countries currently here illegally to immediately participate in guest worker and/or naturalization programs -- or should the US offer instead what is properly called "exit amnesty", allowing foreign nationals illegally within the US today to participate in future legal immigration programs, so long as they voluntarily leave the US first?

Chafee and Laffey on Immigration

Senator Lincoln Chafee's campaign is accusing Steve Laffey of offering "contradictory positions" on immigration policy...

In an article in the Washington newspaper, The Hill, Steve Laffey announced that he would have opposed the recent immigration bill, despite the fact that it has been supported by President Bush and leading Republicans in the Senate. In The Hill and other publications, Steve Laffey has offered contradictory positions on this contentious issue.

Senator Chafee's criticism of Mayor Laffey's immigration stance breaks down into two parts.

1. The Chafee campaign is critical of Mayor Laffey’s 2005 decision to have the City of Cranston accept ID cards issued by the Mexican and Guatemalan governments as valid identification...

In April of 2005, Laffey announced that the City of Cranston would begin accepting an identification cards issued by embassies for the nations of Mexico and Guatemala, used extensively by illegal immigrants in the US that helps them obtain drivers licenses and government services.

According to the April 2005 Projo article cited by the Chafee campaign, the knock against consular identification cards is that they can be too easily forged...

In 2003, officials at the Federal Bureau of Investigation and at the Homeland Security Department have testified before Congress that the cards, if fraudulently obtained, can be used to gain access to other documentation -- such as U.S. drivers' licenses. There have been several failed attempts in Congress to enact a nationwide ban on the cards.

The Chafee camapign believes acceptance of consular ID is not consistent with a position of "strict" immigration enforcement.

In the aforementioned Hill article, Laffey campaign spokeswoman Nachama Soloveichik defends Mayor Laffey's decision…

Soloveichik pointed out that the Justice Department has permitted the use of the cards, and she said they can be useful for temporary legal immigrants and also for police identifying illegal immigrants.

2. The second charge made by the Chafee campaign is that Mayor Laffey has “flip-flopped” his position on the rules that should exist for naturalizing (or not naturalizing) illegal immigrants currently in the US…

Laffey now claims that he would not extend citizenship to illegal immigrants

The “now” implies that Mayor Laffey has changed his position. However, the references provided don’t sustain this charge. Creation of a “guest worker” program for foreign nationals and setting naturalization rules for guest workers are distinct and separable issues. That Mayor Laffey has been consistent in his support of a guest worker program is not contested, while his position towards naturalizing guest workers, or any other illegal aliens, is not addressed in either reference from 2005 cited by the Chafee camp as contradicting the 2006 Hill article.

3. The Hill article also provides us with Mayor Laffey’s criticism of Senator Chafee’s immigration record…

In Rhode Island, Republican primary challenger Steve Laffey has singled out Chafee for being the only Republican to vote for an amendment to the immigration bill that would have allowed 12 million illegal immigrants to remain in the country and streamlined the legalization process.

The amendment that Senator Chafee voted for would have done away with the 3-tier Martinez-Hagel compromise(*) at the heart of the Senate immigration bill and 1) granted immediate amnesty to illegal immigrants in the U.S. as of January 1, 2006 and 2) placed illegal immigrants in the U.S. as of January 1, 2006 on an immediate path to citizenship.

Mayor Laffey also criticized Senator Chafee for his vote against another amendment regarding social security that failed by just one vote...

[Mayor Laffey] said Chafee’s votes on that amendment and against another amendment, which would have prevented legalized immigrants from collecting Social Security benefits for work they did as illegal immigrants, show just how far left Chafee has shifted.

Laffey spokeswoman Nachama Soloveichik said Laffey would have voted against the overall bill.

In response, Chafee campaign spokesman Ian Lang defends the Senator's overall record on immigration…

Chafee spokesman Ian Lang countered by noting that Chafee’s stance on immigration is similar to President Bush’s and that the final bill makes the legalization process sufficiently difficult.

Given that Mayor Laffey is on record opposing the current Senate immigration bill, but also supports creation of a guest-worker program, it would be useful to know how the Mayor believes the current bill needs to be changed to be made into good law.

(*)The "Martinez-Hagel compromise" is the name for the provision of the Senate immigration bill which, if made into law, 1) will make illegal immigrants who have been in the US for 5 or more years eligible for immediate amnesty 2) will make illegal immigrants who have been in the United States between 2 and 5 years eligible for amensty if they first return to a legal point of entry into the US and 3) require illegal immigrants who have been here for less than 2 years to leave the country before qualifying for any "guest worker" program.

The Noonan-Bakst Resonance

Here’s Peggy Noonan in today’s OpinionJournal talking about Republicans, Democrats and taxes...

Democrats use complexity as a thing to hide behind when they talk about taxes. Republicans can say, and can mean, "I hate taxes and will cut them." Democrats can't say that, because they don't hate taxes and in fact will raise them. Though they will not say it. They will say, "Tax cuts on the top 10% of income earners are nonprogressive and unhelpful, and I will cut their tax cut, or hike their taxes, and in turn make commensurate cuts on the taxes of the most deserving lower income taxpayers, though not in a way that will negatively impact the deficit."

When voters hear this they know exactly what it means: We will raise taxes.

And here's Charles Bakst in today's Projo describing what may be a specific instance of Ms. Noonan's general principle…

[Lincoln] Chafee opposed Mr. Bush's tax cuts. [Sheldon] Whitehouse's advertising calls for repeal of the "Bush tax cuts for the rich." [Steve] Laffey said the cuts are "very good for America," and if Whitehouse "thinks higher taxes are better, let him put forth that message." Ditto, he said, for Chafee.

Laffey wants to debate the tax cuts with these guys.

Any takers among the candidates and TV stations?

Donald Carcieri for Governor of Rhode Island: An Agenda for the Future

As his formal campaign announcement yesterday, Rhode Island Governor Donald Carcieri presented his agenda for a second term in office…

• Continuing “to reduce taxes and limit spending by continuing to make government more efficient.”
  
• Enacting “constitutional limits on taxes and spending.”
  
• Giving Rhode Islanders “a stronger voice in their government through voter initiative.”
  
• Reducing health care costs and insuring more Rhode Islanders “by enacting health care reform and implementing my Select Care plan”.
  
• Implementing “the 5 point energy plan I put together months ago.”
  
• Making “wind power and renewable energy a reality in our state.”
  
• Improving student performance and giving “our children the skills they need to get good jobs by implementing my education plan giving parents real choices and repealing the moratorium on charter schools.”

Donald Carcieri for Governor of Rhode Island: “I am doing everything I know how to control spending and make Rhode Island affordable for the average Rhode Islander”

As his formal campaign announcement yesterday, Donald Carcieri discussed what he considers to be some of his biggest accomplishments as Governor of Rhode Island over the past four years...

• ”Rhode Island is outperforming every New England state in job growth. We’ve created over 15,000 net new jobs, and we’re on track to reach my 20,000 job goal.”
  
• ”We are experiencing the largest building boom in Rhode Island’s history. Today, over 7 billion dollars are being invested in the Ocean State.”
  
• ”Over the last 5 years, Rhode Island experienced the 6th highest personal income growth of any state in the country. We now rank 13th highest in the nation.”
  
• ”We are doing so well, Standard & Poor’s increased our credit rating and said that Rhode Island and New Hampshire have the most positive outlooks in all of New England.”
  
• ”The Big Audit has been a big success. Through the hard work of our own state employees -- not consultants or high-paid outsiders -- we will save taxpayers over 250 million dollars by the end next year. We will have saved over a half-a-billion dollars by 2010.”
  
• ”We got separation of powers done and it is being implemented.”
  
• ”Corruption is being rooted out and reform is underway at Blue Cross, Roger Williams Hospital and Beacon Mutual.”
  
• "With the phase out of the car tax, property taxes are being reduced. Because of this reform, 32,000 Rhode Island vehicles have been dropped from our tax rolls in the last year. I plan to completely eliminate the car tax in the next 5 years."
  
• ”The capital gains tax is being phased out.”
  
• ”I’ve budgeted a sales tax holiday to match Massachusetts’.”
  
• ”There is lots of good news on the education front. Scores are rising, schools are improving, rigorous standards are being set and renewed emphasis on math and science and technology is underway right now. Our public charter schools are thriving and educating more children than ever before in our state.”
  
• ”And I promised we’d take down the old Jamestown Bridge.”

"Abu Musab al-Zarqawi killed in air raid"

Associated Press story here...

Abu Musab al-Zarqawi, al-Qaida's leader in Iraq who led a bloody campaign of suicide bombings and kidnappings, has been killed in an airstrike, U.S. and Iraqi officials said Thursday. It was a long-sought victory in the war in Iraq.

Al-Zarqawi and seven aides were killed Wednesday evening in a remote area 30 miles northeast of Baghdad in the volatile province of Diyala, just east of the provincial capital of Baqouba, Prime Minister Nouri al-Maliki. said.

Al-Qaida confirms here (h/t Kathryn Jean Lopez) taking the concept of declaring victory, no matter the circumstance, to a whole new level...

"We want to give you the joyous news of the martyrdom of the mujahed sheik Abu Musab al-Zarqawi," said the statement, signed by "Abu Abdel- Rahman al-Iraqi," identified as the deputy "emir" or leader of al- Qaida in Iraq.

"The death of our leaders is life for us. It will only increase our persistence in continuing holy war so that the word of God will be supreme," it said.

President Bush's statement here...

Now Zarqawi has met his end, and this violent man will never murder again. Iraqis can be justly proud of their new government and its early steps to improve their security. And Americans can be enormously proud of the men and women of our armed forces, who worked tirelessly with their Iraqi counterparts to track down this brutal terrorist and put him out of business.

The operation against Zarqawi was conducted with courage and professionalism by the finest military in the world. Coalition and Iraqi forces persevered through years of near misses and false leads, and they never gave up. Last night their persistence and determination were rewarded. On behalf of all Americans, I congratulate our troops on this remarkable achievement.

AND the Iraqi government has filled the posts of interior minister, defense minister, and national security minister. Details here.

Will the Senate Vote to Create a Racial Registry in Hawaii?

About three decades ago, the state of Hawaii decided it could ignore the 15th Amendment to the US Constitution...

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

To administer programs intended to benefit "native" Hawaiians, a 1978 constitutional convention in Hawaii created a public body called the "Office of Hawaiian Affairs" (OHA). The OHA was to be managed by a nine member board of trustees chosen by statewide elections. Not all citizens of Hawaii, however, were eligible to vote for trustees. Anyone not a "descendant of the aboriginal peoples inhabiting the Hawaiian Islands" was barred from voting in an OHA election (and from running for an OHA seat).

In 2000, the U.S. Supreme Court held that denying citizens the right to vote because of their racial ancestry violated the 15th Amendment (Rice v. Cayetano [2000]). Cribbing Martin Luther King, the Court issued a reminder that people should be judged on their character and not their race...

The ancestral inquiry mandated by the State implicates the same grave concerns as a classification specifying a particular race by name. One of the principal reasons race is treated as a forbidden classification is that it demeans the dignity and worth of a person to be judged by ancestry instead of by his or her own merit and essential qualities. An inquiry into ancestral lines is not consistent with respect based on the unique personality each of us possesses, a respect the Constitution itself secures in its concern for persons and citizens.

Now, through his sponsorship of the Native Hawaiian Government Reorganization Act, Senator Daniel Akaka of Hawaii is spearheading a move to circumvent the 15th Amendment and set up racially exclusive governance in Hawaii by recognizing native Hawaiians as an Indian tribe. Amazingly, in what is purportedly the twenty-first century, the first action mandated by Senator Akaka's Reorganization Act is the creation of a government commission charged with classifying and registering American citizens according to race...

The Commission shall--

(A) prepare and maintain a roll of the adult members of the Native Hawaiian community who elect to participate in the reorganization of the Native Hawaiian governing entity; and

(B) certify that each of the adult members of the Native Hawaiian community proposed for inclusion on the roll meets the definition of Native Hawaiian in section 3(10).

Maybe after the racial registry is created, the commission can follow-up by handing out badges to non-Hawaiians, so people won't get confused about who's who.

This bill is being considered by the Senate this week. Let's hope our Senators have the wisdom to vote against establishing racial registration and racially exclusive government within the borders of the United States of America.

Economic Thoughts, Part XVII: What Does "Social Justice" Mean?

This posting is Part XVII in a series of postings about economic thoughts.

The study of economics is important because economic truths directly influence outcomes in our society. People of good will want our society to be a just one. What constitutes a just society? That question is far too broad for any single posting. Nonetheless, Michael Novak offers a compelling explanation in response to a question frequently asked these days - What does "social justice" mean?

The trouble with "social justice" begins with the very meaning of the term. [Nobel Laureate Friedrich] Hayek points out that whole books and treatises have been written about social justice without ever offering a definition of it...The vagueness seems indispensable. The minute one begins to define social justice, one runs into embarrassing intellectual difficulties. It becomes, most often, a term of art whose operational meaning is, "We need a law against that." In other words, it becomes an instrument of ideological intimidation, for the purpose of gaining the power of legal coercion.

Hayek points out another defect of twentieth-century theories of social justice. Most authors assert that they use it to designate a virtue (a moral virtue, by their account). But most of the descriptions they attach to it appertain to impersonal states of affairs..."high unemployment" or "inequality of incomes" or "lack of a living wage" are cited as instances of "social injustice." Hayek goes to the heart of the matter: social justice is either a virtue or it is not. If it is, it can properly be ascribed only to the reflective and deliberate acts of individual persons. Most who use the term, however, ascribe it not to individuals but to social systems. They use "social justice" to denote a regulative principle of order; again, their focus is not virtue but power...

Curiously, however, the demand for the term "social justice" did not arise until modern times, in which more complex societies operate by impersonal rules applied with equal force to all under "the rule of law."

The birth of the concept of social justice coincided with two other shifts in human consciousness: the "death of God" and the rise of the ideal of the command economy. When God "died," people began to trust a conceit of reason and its inflated ambition to do what even God had not deigned to do: construct a just social order. The divinization of reason found its extension in the command economy; reason (that is, science) would command and humankind would collectively follow. The death of God, the rise of science, and the command economy yielded "scientific socialism." Where reason would rule, the intellectuals would rule. (Or so some thought. Actually, the lovers of power would rule.)

From this line of reasoning it follows that "social justice" would have its natural end in a command economy in which individuals are told what to do, so that it would always be possible to identify those in charge and to hold them responsible. This notion presupposes that people are guided by specific external directions rather than internalized, personal rules of just conduct. It further implies that no individual should be held responsible for his relative position. To assert that he is responsible would be "blaming the victim." It is the function of "social justice" to blame somebody else, to blame the system, to blame those who (mythically) "control" it. As Leszek Kolakowski wrote in his magisterial history of communism, the fundamental paradigm of Communist ideology is guaranteed to have wide appeal: you suffer; your suffering is caused by powerful others; these oppressors must be destroyed...

We are not wrong, Hayek concedes, in perceiving that the effects of the individual choices and open processes of a free society are not distributed according to a recognizable principle of justice. The meritorious are sometimes tragically unlucky; the evil prosper; good ideas don't pan out, and sometimes those who backed them, however noble their vision, lose their shirts. But a system that values both trial-and-error and free choice is in no position to guarantee outcomes in advance. Furthermore, no one individual (and certainly no politburo or congressional committee or political party) can design rules that would treat each person according to his merit or even his need. No one has sufficient knowledge of all relevant personal details, and as Kant writes, no general rule has a grip fine enough to grasp them.

Hayek made a sharp distinction, however, between those failures of justice that involve breaking agreed-upon rules of fairness and those that consist in results that no one designed, foresaw, or commanded. The first sort of failure earned his severe moral condemnation. No one should break the rules; freedom imposes high moral responsibilities. The second, insofar as it springs from no willful or deliberate act, seemed to him not a moral matter but an inescapable feature of all societies and of nature itself. When labeling unfortunate results as "social injustices" leads to an attack upon the free society, with the aim of moving it toward a command society, Hayek strenuously opposes the term. The historical records of the command economies of Nazism and communism justify his revulsion at that way of thinking...

Careless thinkers forget that justice is by definition social. Such carelessness becomes positively destructive when the term "social" no longer describes the product of the virtuous actions of many individuals, but rather the utopian goal toward which all institutions and all individuals are "made in the utmost degree to converge" by coercion. In that case, the "social" in "social justice" refers to something that emerges not organically and spontaneously from the rule-abiding behavior of free individuals, but rather from an abstract ideal imposed from above...

There has to be a better way, a deeper and more proper way to think about "social justice" that is consistent with the great principles of the American Founding. Michael Novak goes on to develop such a definition of social justice:

Social justice rightly understood is a specific habit of justice that is "social" in two senses. First, the skills it requires are those of inspiring, working with, and organizing others to accomplish together a work of justice. These are the elementary skills of civil society, through which free citizens exercise self-government by doing for themselves (that is, without turning to government) what needs to be done. Citizens who take part commonly explain their efforts as attempts to "give back" for all that they have received from the free society, or to meet the obligations of free citizens to think and act for themselves. The fact that this activity is carried out with others is one reason for designating it as a specific type of justice; it requires a broader range of social skills than do acts of individual justice.

The second characteristic of "social justice rightly understood" is that it aims at the good of the city, not at the good of one agent only. Citizens may band together, as in pioneer days, to put up a school or build a bridge. They may get together in the modern city to hold a bake sale for some charitable cause, to repair a playground, to clean up the environment, or for a million other purposes that their social imaginations might lead them to. Hence the second sense in which this habit of justice is "social": its object, as well as its form, primarily involves the good of others.

One happy characteristic of this definition of the virtue of social justice is that it is ideologically neutral. It is as open to people on the left as on the right or in the center. Its field of activity may be literary, scientific, religious, political, economic, cultural, athletic, and so on, across the whole spectrum of human social activities. The virtue of social justice allows for people of good will to reach different...even opposing...practical judgments about the material content of the common good (ends) and how to get there (means). Such differences are the stuff of politics.

We must rule out any use of "social justice" that does not attach to the habits (that is, virtues) of individuals. Social justice is a virtue, an attribute of individuals, or it is a fraud. And if Tocqueville is right that "the principle of association is the first law of democracy," then social justice is the first virtue of democracy, for it is the habit of putting the principle of association into daily practice. Neglect of it, Hayek wrote, has moral consequences:

It is one of the greatest weaknesses of our time that we lack the patience and faith to build up voluntary organizations for purposes which we value highly, and immediately ask the government to bring about by coercion (or with means raised by coercion) anything that appears as desirable to large numbers. Yet nothing can have a more deadening effect on real participation by the citizens than if government, instead of merely providing the essential framework of spontaneous growth, becomes monolithic and takes charge of the provision for all needs, which can be provided for only by the common effort of many.

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality
Part XV: Consequences of Price Controls
Part XVI: The Ethics of Redistribution

Economic Thoughts, Part XVII: What Does "Social Justice" Mean?

This posting is Part XVII in a series of postings about economic thoughts.

The study of economics is important because economic truths directly influence outcomes in our society. People of good will want our society to be a just one. What constitutes a just society? That question is far too broad for any single posting. Nonetheless, Michael Novak offers a compelling explanation in response to a question frequently asked these days - What does "social justice" mean?

The trouble with "social justice" begins with the very meaning of the term. [Nobel Laureate Friedrich] Hayek points out that whole books and treatises have been written about social justice without ever offering a definition of it...The vagueness seems indispensable. The minute one begins to define social justice, one runs into embarrassing intellectual difficulties. It becomes, most often, a term of art whose operational meaning is, "We need a law against that." In other words, it becomes an instrument of ideological intimidation, for the purpose of gaining the power of legal coercion.

Hayek points out another defect of twentieth–century theories of social justice. Most authors assert that they use it to designate a virtue (a moral virtue, by their account). But most of the descriptions they attach to it appertain to impersonal states of affairs—"high unemployment" or "inequality of incomes" or "lack of a living wage" are cited as instances of "social injustice." Hayek goes to the heart of the matter: social justice is either a virtue or it is not. If it is, it can properly be ascribed only to the reflective and deliberate acts of individual persons. Most who use the term, however, ascribe it not to individuals but to social systems. They use "social justice" to denote a regulative principle of order; again, their focus is not virtue but power...

Curiously, however, the demand for the term "social justice" did not arise until modern times, in which more complex societies operate by impersonal rules applied with equal force to all under "the rule of law."

The birth of the concept of social justice coincided with two other shifts in human consciousness: the "death of God" and the rise of the ideal of the command economy. When God "died," people began to trust a conceit of reason and its inflated ambition to do what even God had not deigned to do: construct a just social order. The divinization of reason found its extension in the command economy; reason (that is, science) would command and humankind would collectively follow. The death of God, the rise of science, and the command economy yielded "scientific socialism." Where reason would rule, the intellectuals would rule. (Or so some thought. Actually, the lovers of power would rule.)

From this line of reasoning it follows that "social justice" would have its natural end in a command economy in which individuals are told what to do, so that it would always be possible to identify those in charge and to hold them responsible. This notion presupposes that people are guided by specific external directions rather than internalized, personal rules of just conduct. It further implies that no individual should be held responsible for his relative position. To assert that he is responsible would be "blaming the victim." It is the function of "social justice" to blame somebody else, to blame the system, to blame those who (mythically) "control" it. As Leszek Kolakowski wrote in his magisterial history of communism, the fundamental paradigm of Communist ideology is guaranteed to have wide appeal: you suffer; your suffering is caused by powerful others; these oppressors must be destroyed...

We are not wrong, Hayek concedes, in perceiving that the effects of the individual choices and open processes of a free society are not distributed according to a recognizable principle of justice. The meritorious are sometimes tragically unlucky; the evil prosper; good ideas don’t pan out, and sometimes those who backed them, however noble their vision, lose their shirts. But a system that values both trial–and–error and free choice is in no position to guarantee outcomes in advance. Furthermore, no one individual (and certainly no politburo or congressional committee or political party) can design rules that would treat each person according to his merit or even his need. No one has sufficient knowledge of all relevant personal details, and as Kant writes, no general rule has a grip fine enough to grasp them.

Hayek made a sharp distinction, however, between those failures of justice that involve breaking agreed–upon rules of fairness and those that consist in results that no one designed, foresaw, or commanded. The first sort of failure earned his severe moral condemnation. No one should break the rules; freedom imposes high moral responsibilities. The second, insofar as it springs from no willful or deliberate act, seemed to him not a moral matter but an inescapable feature of all societies and of nature itself. When labeling unfortunate results as "social injustices" leads to an attack upon the free society, with the aim of moving it toward a command society, Hayek strenuously opposes the term. The historical records of the command economies of Nazism and communism justify his revulsion at that way of thinking...

Careless thinkers forget that justice is by definition social. Such carelessness becomes positively destructive when the term "social" no longer describes the product of the virtuous actions of many individuals, but rather the utopian goal toward which all institutions and all individuals are "made in the utmost degree to converge" by coercion. In that case, the "social" in "social justice" refers to something that emerges not organically and spontaneously from the rule–abiding behavior of free individuals, but rather from an abstract ideal imposed from above...

There has to be a better way, a deeper and more proper way to think about "social justice" that is consistent with the great principles of the American Founding. Michael Novak goes on to develop such a definition of social justice:

Social justice rightly understood is a specific habit of justice that is "social" in two senses. First, the skills it requires are those of inspiring, working with, and organizing others to accomplish together a work of justice. These are the elementary skills of civil society, through which free citizens exercise self–government by doing for themselves (that is, without turning to government) what needs to be done. Citizens who take part commonly explain their efforts as attempts to "give back" for all that they have received from the free society, or to meet the obligations of free citizens to think and act for themselves. The fact that this activity is carried out with others is one reason for designating it as a specific type of justice; it requires a broader range of social skills than do acts of individual justice.

The second characteristic of "social justice rightly understood" is that it aims at the good of the city, not at the good of one agent only. Citizens may band together, as in pioneer days, to put up a school or build a bridge. They may get together in the modern city to hold a bake sale for some charitable cause, to repair a playground, to clean up the environment, or for a million other purposes that their social imaginations might lead them to. Hence the second sense in which this habit of justice is "social": its object, as well as its form, primarily involves the good of others.

One happy characteristic of this definition of the virtue of social justice is that it is ideologically neutral. It is as open to people on the left as on the right or in the center. Its field of activity may be literary, scientific, religious, political, economic, cultural, athletic, and so on, across the whole spectrum of human social activities. The virtue of social justice allows for people of good will to reach different—even opposing—practical judgments about the material content of the common good (ends) and how to get there (means). Such differences are the stuff of politics.

We must rule out any use of "social justice" that does not attach to the habits (that is, virtues) of individuals. Social justice is a virtue, an attribute of individuals, or it is a fraud. And if Tocqueville is right that "the principle of association is the first law of democracy," then social justice is the first virtue of democracy, for it is the habit of putting the principle of association into daily practice. Neglect of it, Hayek wrote, has moral consequences:

It is one of the greatest weaknesses of our time that we lack the patience and faith to build up voluntary organizations for purposes which we value highly, and immediately ask the government to bring about by coercion (or with means raised by coercion) anything that appears as desirable to large numbers. Yet nothing can have a more deadening effect on real participation by the citizens than if government, instead of merely providing the essential framework of spontaneous growth, becomes monolithic and takes charge of the provision for all needs, which can be provided for only by the common effort of many.

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality
Part XV: Consequences of Price Controls
Part XVI: The Ethics of Redistribution

AG Patrick Lynch Using Public Staff to Fight a Personal Fine

Rhode Island Attorney General Patrick Lynch has been fined twice by Judge Michael A. Silverstein for remarks he has made related to the state's lead paint trial. As Peter B. Lord reports in the Projo, the Judge has been clear that he is fining Patrick Lynch personally, and not the Office of the Attorney General…

Attorney General Patrick C. Lynch, in a highly unusual action, was ordered to pay an additional $10,000 personal fine yesterday for making critical comments about three corporations after a jury found that they created a public nuisance with their lead-based paints.

Judge Michael A. Silverstein imposed the fine yesterday as a result of a second instance in which he found Lynch in contempt of court rules prohibiting lawyers from criticizing each other publicly during the trial.

On the first occasion, Silverstein fined Lynch $5,000, also to be paid with his own funds.

Despite this fact, Lynch has directed staffers in the Attorney General’s office to handle the appeal…

Lynch plans to appeal both fines to the state Supreme Court. His staff argued in hearings that the judge's sanctions violated Lynch's First Amendment rights to free speech.

Bill Harsch, Republican candidate for Attorney General, thinks the public should (in addition to getting a new Attorney General) get back any money used for Lynch’s defense...

I am calling for an immediate halt to Patrick Lynch using taxpayer money and the resources of his office to fund his personal appeals and defense against these sanctions. I am also calling for the State’s Auditor General’s office to perform an outside audit detailing the expenses incurred by taxpayers to date for all time, materials and expenses associated with his appeals and for a full and complete reimbursement to the taxpayers for any expenses they have incurred to date. There is also the question as to whether or not he has violated a state law for using his office inappropriately for his personal defense.

For Patrick Lynch to ignore the judge by repeatedly violating the rules of the court and then to nonchalantly fund his defense with taxpayers money goes far beyond arrogance and speaks to what little respect he has for the public, the judge and the law itself.

Is John McCain a "Pro-Bill of Rights" Republican?

Senator John McCain is coming to Rhode Island to stump for Senator Lincoln Chafee. Senator Chafee describes himself as a “pro-Bill of Rights Republican”, while Senator McCain is less keen on the importance of the Bill of Rights.

Would you classify the following statement as "pro-Bill of Rights"…

I would rather have a country safe from terrorism than one where quote First Amendment rights are being respected that has become vulnerable.

Then what do you think of this one…

I would rather have a clean government than one where quote First Amendment rights are being respected that has become corrupt.

The second statement is a direct quote from Senator McCain.

I would have hoped that Senator Chafee was accepting Senator McCain’s support in spite of rather than because of his troubling record on limiting political speech, but that does not appear to be the case. The Chafee camapaign’s announcement of Senator McCain’s appearance touts Senator McCain’s campaign campaign finance reform “achievements”…

U.S. Senator John McCain will be the honored guest at a Summer Picnic held on June 17th at the Exeter, RI home of U.S. Senator Lincoln Chafee and his wife Stephanie.

Senator McCain chairs the Senate Committee on Indian Affairs, and serves on the Armed Services, and Commerce, Science, and Transportation Committees. Senator McCain ran for President in 2000. In the Senate, McCain has successfully overseen important campaign finance reforms and has been a fierce deficit hawk.

In the words of Federal Election Commision chairman Bradley Smith, Senator McCain's campaign finance reforms have created a legal regime where the average American gets “less protection talking about your congressman than for Internet pornography sites or burning a cross outside a church or topless dancing."

Those interested in handicapping the 2008 Presidential race should be aware that Senator McCain’s record concerning the limitation of political speech is going to be as big a problem for him as the “religious right” or immigration policy when it comes to surviving the Republican primary process.

Economic Thoughts, Part XVI: The Ethics of Redistribution

This posting is Part XVI in a series of postings about economic thoughts.

Robert Nisbet once said: "Only Hayek has rivaled Bertrand de Jouvenel in demonstrating why redistributionism in the democracies inexorably results in the atrophy of personal responsibility and the hypertrophy of bureaucracy and the centralized state instead of in relief to the hapless minorities it is pledged to serve." So what are some of the ethical issues that arise out of redistributionist public policies?

In the Introduction to Bertrand de Jouvenel's book, The Ethics of Redistribution, John Gray writes:

Bertrand de Jouvenel's study in the ethics of redistribution is distinctive, in the first instance, because it focuses precisely on the morality of redistribution and not on its side effects on incentives...[it] embodies a fundamental challenge to the values expressed in redistributionist thought...[he] is concerned with the impact on individual liberty and on cultural life of redistribution rather than with its effects on productivity...

Gray continues:

...he is careful to distinguish redistributionism from other, superficially similar doctrines...he shows clearly how it differs from agrarian egalitarianism...redistributionism is not socialism...

De Jouvenel makes another fundamental distinction within redistributionism itself. Modern redistributionism encompasses two wholly disparate elements: the belief that government should be centrally involved in the relief of poverty, and the belief that economic inequality is itself unjust or evil...

...He develops an important empirical criticism of egalitarian redistributionism when he observes that the resources needed to support a subsistence minimum cannot be derived solely, or even primarily, from taxation of the rich. Such resources must be extracted from the middle class, who are also the beneficiaries of income-transfer schemes...[such] transfer schemes [are] extremely complex and sometimes regressive...

Redistributionist policy is condemned by de Jouvenel, in addition, for undermining the sense of personal responsibility. It does this by transferring authority for crucial life-decisions from the individuals who make them to the State. By catering for all the basic needs of the individual, the State leaves him with authority only in the sphere of determining how to spend his pocket money...

For de Jouvenel, however, the most profound result of redistributionist policy is the impetus it gives to the baleful process of centralization. If the state confiscates high incomes and imposes penal rates of taxation on savings and investment, the state must take over the saving and investment activities that private individuals are no longer able to undertake. If, because of the confiscation of higher incomes, there are important social and cultural activities that can no longer be sustained privately, such as provision for high culture and the arts, then once again the state must assume responsibility for such activities through a program of subsidy. Inevitably, the state comes to exercise an ever-increasing degree of control over them. The consequence of redistributionist policy, accordingly, is the curtailment of private initiative in many spheres of social life, the destruction of the man of independent means, and the weakening of civil society...

...Insofar as it is the creation of redistributionist ideology, the modern welfare state is not defensible by reference to any coherent set of principles or purposes. It has not significantly alleviated poverty but has instead substantially institutionalized it...And Hayek's conjecture...that the redistributionist state is bound to be an expansionist state, like de Jouvenel's earlier warning, has been increasingly borne out by events...

...Nozick...like de Jouvenel...shows, first, that the attempt to impose an approved pattern on the social distribution of goods requires continuous interference with individual liberty, since gifts and free exchange will constantly subvert the pattern...

Redistributionist policy embodies an abstract or false individualism in which the intermediary institutions that are the indispensable matrix of individuality are neglected or suppressed. It is especially hostile to the institution that is the cornerstone of civil society - the family...

It is in the more recent work of Hayek that de Jouvenel's analysis is most strikingly paralleled. In the second volume of his trilogy Law, Legislation and Liberty, entitled The Mirage of Social Justice...Hayek's first and perhaps most radically original thesis is that no government or central authority can know enough to be able to realize or impose the preferred distributional pattern...Whatever the distributional principles, the knowledge needed to implement them is, except in a few limiting cases, so dispersed throughout society and so often in tacit or practical form that it is usually impossible for government to collect it in any usable form. This irretrievable dispersion or division of knowledge in society erects an insuperable epistemic barrier to the realization of virtually all contemporary distributivist conceptions...

There is a second strand of argument in that strengthens de Jouvenel's case against redistribution. This is the claim that, even were the government able to acquire the knowledge needed to implement its preferred distributional principles, there exists no consensus in society as to how the different principles are to be weighted when they come into conflict with one another...Because of such inevitable conflicts among its constitutive values, redistributionism cannot fail to spawn bureaucracies with wide discretionary powers. But the large margin of discretionary authority exercised by the apparatus of redistribution is difficult to reconcile with the institution of the rule of law that is one of the foundations of a free society.

There is a final strand in Hayek's argument that links it with the analyses of de Jouvenel by James Buchanan. This is the proposition that, in the absence of any principled justification of redistributional policy, it is best theorized in terms of its beneficiaries. Redistributionism then comes to be intelligible as a system of ideas whose function is to legitimate the interests of expansionist bureaucracies and, in general, to insulate well-established interest groups from the negative side-effects of economic change. Redistributionism thus emerges, at last, as the conservative ideology of the interventionist state and its client groups...

de Jouvenel himself writes:

Redistribution and the scandal of poverty

What has now come to the fore, as against the ideal of fair rewards and brotherly love, is the ideal of more equal consumption. It may be regarded as compounded of two convictions: one, that it is good and necessary to remove want and that the surplus of some should be sacrificed to the urgent needs of others; and two, that inequality of means between the several members of a society is bad in itself and should be more or less radically removed.

The two ideas are not logically related. The first rests squarely upon the Christian idea of brotherhood. Man is his brother's keeper...[and] has a moral obligation to help the unfortunate, an obligation that rests most heavily, though not exclusively, upon the most fortunate. There is, on the other hand, no prima facie evidence for the current contention that justice demands near equality of material conditions. Justice means proportion. The individualist is entitled to hold that justice demands individual rewards proportionate to individual endeavors...It seems therefore reasonable to deny simultaneously that our present society is just and that justice is to be achieved by the equalization of incomes.

It is, however, a loose modern habit to call "just" whatever is thought emotionally desirable. Attention was legitimately called in the nineteenth century to the sorry condition of the laboring classes...The idea of proportion then came to be applied to the relation between needs and resources...

The first feeling was almost the only one at work in the early stage of redistributionism. The second has almost gained the upper hand in the latter stage...

At all times the revelation of poverty has come as a shock to the chosen few: It has impelled them to regard their personal extravagance with a sense of guilt, has driven them to distribute their riches and to mingle with the poor. In every case one knows of in the past, this has been associated with a religious experience...

However, in our century the feeling that has assailed not merely a few spirits but practically all the members of the leading classes has been of a different kind...While the discovery of poverty, coupled with an assumption of the impossibility of removing it, had formerly brought about a revulsion against riches, this time a deep-rooted appreciation of wordly goods, coupled with a sense of power, caused an onslaught on poverty itself. Riches had been a scandal in the face of poverty; now poverty was a scandal in the face of riches...The increasing goodness of civilization, the increasing power of man, were to be finally demonstrated by the eradication of poverty.

Thus, charity and pride went hand in hand...Thus, redistribution was sped on its way by a feeling, or pattern of feelings...

The notions of relief and of lifting working-class standards merged

We must, however, note that redistribution appears as a novelty only in contrast to the practices immediately preceding it and in the choice of its agent, the State...

The more redistribution, the more power to the State

Already, when stressing the loss of investment capital which would result from a redistribution of incomes, we found that the necessary counterpart of lopping off the tops of higher incomes was the diversion by the State from these incomes of as much, or almost as much, as they used to pour into investment; the assumption which followed logically was that the State would take care of investment: a great function, a great responsibility, and a great power.

Now we find that by making it impossible for individuals to support cultural activities out of their shrunken incomes, we have developed upon the State another great function, another great power.

It then follows that the State finances, and therefore chooses, investments; and that it finances cultural activities and must thenceforth choose which it supports...the State must support literature and the arts either as buyer or as provider of beneficia to the producers, or in both capacities.

This is a rather disquieting thought. How quickly this State mastery follows upon measures of redistribution we can judge by the enormous progress toward such mastery which has already followed from limited redistribution...

A redistribution of power from individuals to the State

Our examination of the redistributionist ideal in theory and practice has led us gradually away from our initial contrast between rich and poor toward quite another contrast - that between individuals on the one hand, and the State and minor corporate bodies on the other.

Pure redistribution would merely transfer income from the richer to the poorer. This could conceivably be achieved by a simple reverse-tax or subsidy handed to the recipients of lower incomes from the proceeds of a special tax on higher incomes. But this is not the procedure that has prevailed. The State sets up as trustee...and doles out services and benefits. In order to avoid the creation of a "protected class," a discrimination fatal to political equality, the tendency has been to extend the benefits and services upward to all members of society...

The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State...

Redistribution incidental to centralization?

In our exploration, we have found ourselves repeatedly coming across centralization as the major implication of redistributionist policies...Thus, the consequence of redistribution is to expand the State's role. And conversely...the expansion of the State's takings is made acceptable only by measures of redistribution.

We then may well wonder which of these two closely linked phenomena is predominant: whether it is redistribution or centralization. We may ask ourselves whether what we are dealing with is not a political even more than a social phenomenon. This political phenomenon consists in the demolition of the class enjoying "independent means" and in the massing of means in the hands of managers. This results in a transfer of power from individuals to officials, who tend to constitute a new ruling class as against that which is being destroyed...

This leads the observer to wonder how far the demand for equality is directed against inequality itself and is thus a fundamental demand, and how far it is directed against a certain set of "unequals" and is thus an unconscious move in a change of elites...

Part XVII to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality
Part XV: Consequences of Price Controls

Economic Thoughts, Part XVI: The Ethics of Redistribution

This posting is Part XVI in a series of postings about economic thoughts.

Robert Nisbet once said: "Only Hayek has rivaled Bertrand de Jouvenel in demonstrating why redistributionism in the democracies inexorably results in the atrophy of personal responsibility and the hypertrophy of bureaucracy and the centralized state instead of in relief to the hapless minorities it is pledged to serve." So what are some of the ethical issues that arise out of redistributionist public policies?

In the Introduction to Bertrand de Jouvenel's book, The Ethics of Redistribution, John Gray writes:

Bertrand de Jouvenel's study in the ethics of redistribution is distinctive, in the first instance, because it focuses precisely on the morality of redistribution and not on its side effects on incentives...[it] embodies a fundamental challenge to the values expressed in redistributionist thought...[he] is concerned with the impact on individual liberty and on cultural life of redistribution rather than with its effects on productivity...

Gray continues:

...he is careful to distinguish redistributionism from other, superficially similar doctrines...he shows clearly how it differs from agrarian egalitarianism...redistributionism is not socialism...

De Jouvenel makes another fundamental distinction within redistributionism itself. Modern redistributionism encompasses two wholly disparate elements: the belief that government should be centrally involved in the relief of poverty, and the belief that economic inequality is itself unjust or evil...

...He develops an important empirical criticism of egalitarian redistributionism when he observes that the resources needed to support a subsistence minimum cannot be derived solely, or even primarily, from taxation of the rich. Such resources must be extracted from the middle class, who are also the beneficiaries of income-transfer schemes...[such] transfer schemes [are] extremely complex and sometimes regressive...

Redistributionist policy is condemned by de Jouvenel, in addition, for undermining the sense of personal responsibility. It does this by transferring authority for crucial life-decisions from the individuals who make them to the State. By catering for all the basic needs of the individual, the State leaves him with authority only in the sphere of determining how to spend his pocket money...

For de Jouvenel, however, the most profound result of redistributionist policy is the impetus it gives to the baleful process of centralization. If the state confiscates high incomes and imposes penal rates of taxation on savings and investment, the state must take over the saving and investment activities that private individuals are no longer able to undertake. If, because of the confiscation of higher incomes, there are important social and cultural activities that can no longer be sustained privately, such as provision for high culture and the arts, then once again the state must assume responsibility for such activities through a program of subsidy. Inevitably, the state comes to exercise an ever-increasing degree of control over them. The consequence of redistributionist policy, accordingly, is the curtailment of private initiative in many spheres of social life, the destruction of the man of independent means, and the weakening of civil society...

...Insofar as it is the creation of redistributionist ideology, the modern welfare state is not defensible by reference to any coherent set of principles or purposes. It has not significantly alleviated poverty but has instead substantially institutionalized it...And Hayek's conjecture...that the redistributionist state is bound to be an expansionist state, like de Jouvenel's earlier warning, has been increasingly borne out by events...

...Nozick...like de Jouvenel...shows, first, that the attempt to impose an approved pattern on the social distribution of goods requires continuous interference with individual liberty, since gifts and free exchange will constantly subvert the pattern...

Redistributionist policy embodies an abstract or false individualism in which the intermediary institutions that are the indispensable matrix of individuality are neglected or suppressed. It is especially hostile to the institution that is the cornerstone of civil society - the family...

It is in the more recent work of Hayek that de Jouvenel's analysis is most strikingly paralleled. In the second volume of his trilogy Law, Legislation and Liberty, entitled The Mirage of Social Justice...Hayek's first and perhaps most radically original thesis is that no government or central authority can know enough to be able to realize or impose the preferred distributional pattern...Whatever the distributional principles, the knowledge needed to implement them is, except in a few limiting cases, so dispersed throughout society and so often in tacit or practical form that it is usually impossible for government to collect it in any usable form. This irretrievable dispersion or division of knowledge in society erects an insuperable epistemic barrier to the realization of virtually all contemporary distributivist conceptions...

There is a second strand of argument in that strengthens de Jouvenel's case against redistribution. This is the claim that, even were the government able to acquire the knowledge needed to implement its preferred distributional principles, there exists no consensus in society as to how the different principles are to be weighted when they come into conflict with one another...Because of such inevitable conflicts among its constitutive values, redistributionism cannot fail to spawn bureaucracies with wide discretionary powers. But the large margin of discretionary authority exercised by the apparatus of redistribution is difficult to reconcile with the institution of the rule of law that is one of the foundations of a free society.

There is a final strand in Hayek's argument that links it with the analyses of de Jouvenel by James Buchanan. This is the proposition that, in the absence of any principled justification of redistributional policy, it is best theorized in terms of its beneficiaries. Redistributionism then comes to be intelligible as a system of ideas whose function is to legitimate the interests of expansionist bureaucracies and, in general, to insulate well-established interest groups from the negative side-effects of economic change. Redistributionism thus emerges, at last, as the conservative ideology of the interventionist state and its client groups...

de Jouvenel himself writes:

Redistribution and the scandal of poverty

What has now come to the fore, as against the ideal of fair rewards and brotherly love, is the ideal of more equal consumption. It may be regarded as compounded of two convictions: one, that it is good and necessary to remove want and that the surplus of some should be sacrificed to the urgent needs of others; and two, that inequality of means between the several members of a society is bad in itself and should be more or less radically removed.

The two ideas are not logically related. The first rests squarely upon the Christian idea of brotherhood. Man is his brother's keeper...[and] has a moral obligation to help the unfortunate, an obligation that rests most heavily, though not exclusively, upon the most fortunate. There is, on the other hand, no prima facie evidence for the current contention that justice demands near equality of material conditions. Justice means proportion. The individualist is entitled to hold that justice demands individual rewards proportionate to individual endeavors...It seems therefore reasonable to deny simultaneously that our present society is just and that justice is to be achieved by the equalization of incomes.

It is, however, a loose modern habit to call "just" whatever is thought emotionally desirable. Attention was legitimately called in the nineteenth century to the sorry condition of the laboring classes...The idea of proportion then came to be applied to the relation between needs and resources...

The first feeling was almost the only one at work in the early stage of redistributionism. The second has almost gained the upper hand in the latter stage...

At all times the revelation of poverty has come as a shock to the chosen few: It has impelled them to regard their personal extravagance with a sense of guilt, has driven them to distribute their riches and to mingle with the poor. In every case one knows of in the past, this has been associated with a religious experience...

However, in our century the feeling that has assailed not merely a few spirits but practically all the members of the leading classes has been of a different kind...While the discovery of poverty, coupled with an assumption of the impossibility of removing it, had formerly brought about a revulsion against riches, this time a deep-rooted appreciation of wordly goods, coupled with a sense of power, caused an onslaught on poverty itself. Riches had been a scandal in the face of poverty; now poverty was a scandal in the face of riches...The increasing goodness of civilization, the increasing power of man, were to be finally demonstrated by the eradication of poverty.

Thus, charity and pride went hand in hand...Thus, redistribution was sped on its way by a feeling, or pattern of feelings...

The notions of relief and of lifting working-class standards merged

We must, however, note that redistribution appears as a novelty only in contrast to the practices immediately preceding it and in the choice of its agent, the State...

The more redistribution, the more power to the State

Already, when stressing the loss of investment capital which would result from a redistribution of incomes, we found that the necessary counterpart of lopping off the tops of higher incomes was the diversion by the State from these incomes of as much, or almost as much, as they used to pour into investment; the assumption which followed logically was that the State would take care of investment: a great function, a great responsibility, and a great power.

Now we find that by making it impossible for individuals to support cultural activities out of their shrunken incomes, we have developed upon the State another great function, another great power.

It then follows that the State finances, and therefore chooses, investments; and that it finances cultural activities and must thenceforth choose which it supports...the State must support literature and the arts either as buyer or as provider of beneficia to the producers, or in both capacities.

This is a rather disquieting thought. How quickly this State mastery follows upon measures of redistribution we can judge by the enormous progress toward such mastery which has already followed from limited redistribution...

A redistribution of power from individuals to the State

Our examination of the redistributionist ideal in theory and practice has led us gradually away from our initial contrast between rich and poor toward quite another contrast - that between individuals on the one hand, and the State and minor corporate bodies on the other.

Pure redistribution would merely transfer income from the richer to the poorer. This could conceivably be achieved by a simple reverse-tax or subsidy handed to the recipients of lower incomes from the proceeds of a special tax on higher incomes. But this is not the procedure that has prevailed. The State sets up as trustee...and doles out services and benefits. In order to avoid the creation of a "protected class," a discrimination fatal to political equality, the tendency has been to extend the benefits and services upward to all members of society...

The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State...

Redistribution incidental to centralization?

In our exploration, we have found ourselves repeatedly coming across centralization as the major implication of redistributionist policies...Thus, the consequence of redistribution is to expand the State's role. And conversely...the expansion of the State's takings is made acceptable only by measures of redistribution.

We then may well wonder which of these two closely linked phenomena is predominant: whether it is redistribution or centralization. We may ask ourselves whether what we are dealing with is not a political even more than a social phenomenon. This political phenomenon consists in the demolition of the class enjoying "independent means" and in the massing of means in the hands of managers. This results in a transfer of power from individuals to officials, who tend to constitute a new ruling class as against that which is being destroyed...

This leads the observer to wonder how far the demand for equality is directed against inequality itself and is thus a fundamental demand, and how far it is directed against a certain set of "unequals" and is thus an unconscious move in a change of elites...

Part XVII to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality
Part XV: Consequences of Price Controls

Progressives Against Science Education

Rhode Island is ranked sixth amongst the six New England states in science education, and has not shown any improvement in the last five years. Here's the Projo's Jennifer D. Jordan on the subject...

Rhode Island's science scores have not improved in the past five years, even as lawmakers and educators begin to place more emphasis on this critical subject.

The state continues to trail the five other New England states and is stuck in the middle of the pack nationally, according to the latest results of standardized science tests.

Governor Donald Carcieri wants to address this problem head-on. He has proposed a number of initiatives aimed at improving science education in Rhode Island. They include establishing a statewide science curriculum, introducing innovative programs like Physics First and Project Inner Space, and providing more funding for the professional development of science teachers (list, from the RI 2007 Budget Executive Summary, page 38).

However, the Emergency Campaign for Rhode Island's Priorities, which claims the endorsement of the many of Rhode Island's powerful special interest groups, wants to eliminate the Governor's science education initiatives from the 2007 budget (h/t Kmareka).

ECRIP believes that that science education should be cut from the budget in order to pay for Rhode Island's already generous social service programs. Here's their list of science education initiatives they would like to see cut...

Postpone New Spending: "Inspiring Excellence in Technology, Engineering and Mathematics" teacher training program, Physics First, Project "Inner Space" and the hiring of new Science Project Manager

ECRIP claims that eliminating science education from the budget would save Rhode Island $3,700,000, but tallying up the programs they've named appears to yield only about $2M in cuts. However, if ECRIP's numbers are off, I'm sure they will have no trouble finding more education funding to cut, as the priority of ECRIP seems to be cutting education to pay for welfare.

UPDATE:

I just noticed that ECRIP lists the "National Education Assoc., RI" as one of their "endorsers" on the memo that outlines the plan for eliminating funding for science education. Is the NEA really on board with this part of the proposal?

The following programs are Governor Carcieri's proposed improvements to science education in Rhode Island. The Emergency Campaign for Rhode Island's Priorities wants to cut programs 2 through 6 to avoid rather than reform any aspect of Rhode Island's social services spending.

1. Creating SMART Classrooms and the Center for STEM Education Excellence

• The Governor proposes that a $15.0 of long-term financing be secured to upgrade teacher training programs and better prepare the State's teachers to inspire Rhode Island schoolchildren to excel in science, technology, engineering, and mathematics. Specifically, the bond will transform classes at Rhode Island College (RIC) and URI into SMART classrooms with integrated audio-visual technology and wireless network access; create the Center for Excellence in Science, Technology, Engineering, and Math (STEM) Education at RIC; and expand the State's K-12 Comprehensive Education Information System to add more districts and include fiscal data.

2. Establish a Statewide Science Curriculum

• The Governor proposes to appropriate $200,000 in the FY 2007 budget to establish a statewide science curriculum. The curriculum would be developed by RIDE and aligned with the State's new Grade Span Expectation as called for by the Governor's Blue Ribbon Panel on Math and Science Education.

3. Physics First Pilot Program

• The Governor recommends $425,000 in FY 2007 to provide physics texts and laboratory equipment for the five high schools participating in the Physics First program. This program reverses the traditional high school science curriculum and teaches physics in the freshman year followed by micro-scale chemistry and biology.

4. Project Inner Space Initiative

• In the FY 2007 budget, the Governor proposes the appropriation of $240,000 to bring "real time" oceanographic research conducted by Dr. Bob Ballard directly into Rhode Island's middle and high schools. This initiative will link Professor Ballard's work with science taught at six secondary schools.

5. Professional Development

• The Governor proposes $850,000 in the FY 2007 budget to fund professional development activities in mathematics and science for all teachers, but particularly elementary school teachers. Of this total, $100,000 will be used to expand the Physics First pilot program.

6. Project Management

• The FY 2007 budget includes $120,000 to hire a program manager to report on the State's progress to the PreK-16 Council and coordinate the Blue Ribbon Panel on Math & Science Education's recommendations with RIDE, the Board of Governors for Higher Education, and the business community.

Remembering President Reagan

President Ronald Reagan died two years ago today.

As a reminder of his leadership, here is an excerpt from his January 1989 Farewell Address as he left the Presidency:

...And in all of that time I won a nickname, "The Great Communicator." But I never thought it was my style or the words I used that made a difference: it was the content. I wasn't a great communicator, but I communicated great things, and they didn't spring full bloom from my brow, they came from the heart of a great nation--from our experience, our wisdom, and our belief in the principles that have guided us for two centuries. They called it the Reagan revolution. Well, I'll accept that, but for me it always seemed more like the great rediscovery, a rediscovery of our values and our common sense.

Common sense told us that when you put a big tax on something, the people will produce less of it. So, we cut the people's tax rates, and the people produced more than ever before. The economy bloomed like a plant that had been cut back and could now grow quicker and stronger. Our economic program brought about the longest peacetime expansion in our history: real family income up, the poverty rate down, entrepreneurship booming, and an explosion in research and new technology. We're exporting more than ever because American industry became more competitive, and at the same time, we summoned the national will to knock down protectionist walls abroad instead of erecting them at home.

Common sense also told us that to preserve the peace, we'd have to become strong again after years of weakness and confusion. So, we rebuilt our defenses, and this New Year we toasted the new peacefulness around the globe. Not only have the superpowers actually begun to reduce their stockpiles of nuclear weapons--and hope for even more progress is bright--but the regional conflicts that rack the globe are also beginning to cease...

The lesson of all this was, of course, that because we're a great nation, our challenges seem complex. It will always be this way. But as long as we remember our first principles and believe in ourselves, the future will always be ours. And something else we learned: Once you begin a great movement, there's no telling where it will end. We meant to change a nation, and instead, we changed a world.

Countries across the globe are turning to free markets and free speech and turning away from the ideologies of the past. For them, the great rediscovery of the 1980's has been that, lo and behold, the moral way of government is the practical way of government: Democracy, the profoundly good, is also the profoundly productive...

Ours was the first revolution in the history of mankind that truly reversed the course of government, and with three little words: "We the People." "We the People" tell the government what to do; it doesn't tell us. "We the People" are the driver; the government is the car. And we decide where it should go, and by what route, and how fast. Almost all the world's constitutions are documents in which governments tell the people what their privileges are. Our Constitution is a document in which "We the People" tell the government what it is allowed to do. "We the People" are free. This belief has been the underlying basis for everything I've tried to do these past 8 years.

But back in the 1960's, when I began, it seemed to me that we'd begun reversing the order of things--that through more and more rules and regulations and confiscatory taxes, the government was taking more of our money, more of our options, and more of our freedom. I went into politics in part to put up my hand and say, "Stop." I was a citizen politician, and it seemed the right thing for a citizen to do.

I think we have stopped a lot of what needed stopping. And I hope we have once again reminded people that man is not free unless government is limited. There's a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts...

Finally, there is a great tradition of warnings in Presidential farewells, and I've got one that's been on my mind for some time. But oddly enough, it starts with one of the things I'm proudest of in the past 8 years: the resurgence of national pride that I called the new patriotism. This national feeling is good, but it won't count for much, and it won't last unless it's grounded in thoughtfulness and knowledge.

An informed patriotism is what we want. And are we doing a good enough job teaching our children what America is and what she represents in the long history of the world? Those of us who are over 35 or so years of age grew up in a different America. We were taught, very directly, what it means to be an American. And we absorbed, almost in the air, a love of country and an appreciation of its institutions. If you didn't get these things from your family, you got them from the neighborhood, from the father down the street who fought in Korea or the family who lost someone at Anzio. Or you could get a sense of patriotism from school. And if all else failed, you could get a sense of patriotism from the popular culture. The movies celebrated democratic values and implicitly reinforced the idea that America was special. TV was like that, too, through the mid-sixties.

But now, we're about to enter the nineties, and some things have changed. Younger parents aren't sure that an unambivalent appreciation of America is the right thing to teach modern children. And as for those who create the popular culture, well-grounded patriotism is no longer the style. Our spirit is back, but we haven't reinstitutionalized it. We've got to do a better job of getting across that America is freedom--freedom of speech, freedom of religion, freedom of enterprise. And freedom is special and rare. It's fragile; it needs [protection].

So, we've got to teach history based not on what's in fashion but what's important--why the Pilgrims came here, who Jimmy Doolittle was, and what those 30 seconds over Tokyo meant. You know, 4 years ago on the 40th anniversary of D-Day, I read a letter from a young woman writing to her late father, who'd fought on Omaha Beach. Her name was Lisa Zanatta Henn, and she said, "We will always remember, we will never forget what the boys of Normandy did." Well, let's help her keep her word. If we forget what we did, we won't know who we are. I'm warning of an eradication of the American memory that could result, ultimately, in an erosion of the American spirit. Let's start with some basics: more attention to American history and a greater emphasis on civic ritual.

And let me offer lesson number one about America: All great change in America begins at the dinner table. So, tomorrow night in the kitchen, I hope the talking begins. And children, if your parents haven't been teaching you what it means to be an American, let 'em know and nail 'em on it. That would be a very American thing to do.

And that's about all I have to say tonight, except for one thing. The past few days when I've been at that window upstairs, I've thought a bit of the "shining city upon a hill." The phrase comes from John Winthrop, who wrote it to describe the America he imagined. What he imagined was important because he was an early Pilgrim, an early freedom man. He journeyed here on what today we'd call a little wooden boat; and like the other Pilgrims, he was looking for a home that would be free. I've spoken of the shining city all my political life, but I don't know if I ever quite communicated what I saw when I said it. But in my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.

And how stands the city on this winter night? More prosperous, more secure, and happier than it was 8 years ago. But more than that: After 200 years, two centuries, she still stands strong and true on the granite ridge, and her glow has held steady no matter what storm. And she's still a beacon, still a magnet for all who must have freedom, for all the pilgrims from all the lost places who are hurtling through the darkness, toward home.

We've done our part. And as I walk off into the city streets, a final word to the men and women of the Reagan revolution, the men and women across America who for 8 years did the work that brought America back. My friends: We did it. We weren't just marking time. We made a difference. We made the city stronger, we made the city freer, and we left her in good hands. All in all, not bad, not bad at all.

And so, goodbye, God bless you, and God bless the United States of America.

And, from 1992, President Reagan said:

And whatever else history may say about me when I'm gone, I hope it will record that I appealed to your best hopes, not your worst fears, to your confidence rather than your doubts. My dream is that you will travel the road ahead with liberty's lamp guiding your steps and opportunity's arm steadying your way. My fondest hope for each one of you -- and especially for young people -- is that you will love your country, not for her power or wealth, but for her selflessness and her idealism. May each of you have the heart to conceive, the understanding to direct, and the hand to execute works that will make the world a little better for your having been here. May all of you as Americans never forget your heroic origins, never fail to seek divine guidance, and never lose your natural, God-given optimism. And finally, my fellow Americans, may every dawn be a great new beginning for America and every evening bring us closer to that shining city upon a hill.

He was truly a great man.

Thoughts on the Law & Social Order

As a child, did you ever make up a new game and spend time trying to define the rules of that game? If so, did you ever end up fighting with your friends because, after you started playing the game, something unplanned happened and conflict broke out? After the conflict broke out, did you find that you could work it out with certain friends - without having to write down an entirely new set of rules? That your ability to work things out informally was only possible if you shared common values with the friends - and the others likely ceased being your friends after that? In retrospect, did you ever look back and realize that there was no way to anticipate every possible outcome, to write out explicit rules to cover all outcomes?

Okay, maybe not. Which is probably why you didn't go to law school later in life.

But, it is a relevant analogy as we extend the concept to a broader societal level. Unfortunately, we have devolved to the point where we frequently turn to government every time there is a problem and request new legislation to "fix" it. Never mind that the new law may be in conflict with existing laws. Never mind that the laws are frequently written with vague language and then turned over to faceless, nameless, unelected and unaccountable bureaucrats for rule-making from afar. Never mind that rule-making from afar only allows rigid rules that must apply uniformly to everyone and offer no subtlety of application that can occur at the local level where there is personal knowledge of what is needed and what will work. Never mind that societal changes may obviate the need for the legislation but the regulations will continue on regardless. Never mind that trying to legislate every issue increasingly eliminates the freedom to apply judgment to different situations, no two of which will be identical.

In that context, two recent comments on The Corner by Jonah Goldberg and Andy McCarthy offered a thoughtful perspective on how increasingly explicit laws adversely impact our social order.

Jonah Goldberg makes the first comments:

My understanding of the Hayekian social order is that life is complex but that the public, written, law should be clear. Bright lines are necessary to illuminate clear principles. It is in the shadows of these bright lines that hidden law operates. We have clear laws - and ethics - against doctors killing patients, but most of us understand that in the outer-reaches of the real world, there will be situations where the rules should be bent or even broken. But we don't then change the law to make the rare case the norm. It may sometimes be morally necessary to look the other way when a cop smacks someone, a desperate man steals something, a doctor kills a hopelessly suffering patient, but we don't rescind the laws against police brutality, theft, or - until recently - euthanasia, in response.

Andy McCarthy then offers some profound observations:

The awful thing about the hyper-lawyered society we are becoming is that there is less and less hidden law. The hidden law is where judgment, discretion and common sense reign. It's like the referee who you only notice when there's a bad call. We only think about it when there is some blunder or atrocity, but these are the rarest of aberrations.

Traditional law assumed a society's values are shared and that people will act accordingly even when there is not a precise regulation telling them what to do. When a screw-up (or worse) happened, we assumed the person - not the regulatory system - was at fault. Modern rule by lawyers, to the contrary, assumes the aberration is the rule and must be explicitly regulated against. It figures that if we account for every possibility, we won't need to trust individual judgment anymore - the system will save us from ourselves. It's what makes bureaucrats say: "What's the big deal about making the competent, honorable 99.9 percent of troops go through sensitivity training because of something screwy done by the other .01 percent?" - a .01 percent, by the way, which will do the something screwy no matter how many hours of values training you make them endure.

Rogues will be rogues no matter what the rules are. But rule by lawyers doesn't see it that way. One Nixon gets you 30 years of FISA - on the seeming assumption that if only we'd had FISA, Nixon would never have happened. Meantime, the fact is that we are simply not smart enough to anticipate every contingency and every technological development. So your one-size-fits-all FISA, in addition to being irrelevant if there is ever another Nixon, turns out also to be inadequate when email, cellphones and al Qaeda come along.

That's modern law: politically correct, unresponsive, and unreal.

Thoughts on the Law & Social Order

As a child, did you ever make up a new game and spend time trying to define the rules of that game? If so, did you ever end up fighting with your friends because, after you started playing the game, something unplanned happened and conflict broke out? After the conflict broke out, did you find that you could work it out with certain friends - without having to write down an entirely new set of rules? That your ability to work things out informally was only possible if you shared common values with the friends - and the others likely ceased being your friends after that? In retrospect, did you ever look back and realize that there was no way to anticipate every possible outcome, to write out explicit rules to cover all outcomes?

Okay, maybe not. Which is probably why you didn't go to law school later in life.

But, it is a relevant analogy as we extend the concept to a broader societal level. Unfortunately, we have devolved to the point where we frequently turn to government every time there is a problem and request new legislation to "fix" it. Never mind that the new law may be in conflict with existing laws. Never mind that the laws are frequently written with vague language and then turned over to faceless, nameless, unelected and unaccountable bureaucrats for rule-making from afar. Never mind that rule-making from afar only allows rigid rules that must apply uniformly to everyone and offer no subtlety of application that can occur at the local level where there is personal knowledge of what is needed and what will work. Never mind that societal changes may obviate the need for the legislation but the regulations will continue on regardless. Never mind that trying to legislate every issue increasingly eliminates the freedom to apply judgment to different situations, no two of which will be identical.

In that context, two recent comments on The Corner by Jonah Goldberg and Andy McCarthy offered a thoughtful perspective on how increasingly explicit laws adversely impact our social order.

Jonah Goldberg makes the first comments:

My understanding of the Hayekian social order is that life is complex but that the public, written, law should be clear. Bright lines are necessary to illuminate clear principles. It is in the shadows of these bright lines that hidden law operates. We have clear laws — and ethics — against doctors killing patients, but most of us understand that in the outer-reaches of the real world, there will be situations where the rules should be bent or even broken. But we don't then change the law to make the rare case the norm. It may sometimes be morally necessary to look the other way when a cop smacks someone, a desperate man steals something, a doctor kills a hopelessly suffering patient, but we don't rescind the laws against police brutality, theft, or — until recently — euthanasia, in response.

Andy McCarthy then offers some profound observations:

The awful thing about the hyper-lawyered society we are becoming is that there is less and less hidden law. The hidden law is where judgment, discretion and common sense reign. It's like the referee who you only notice when there's a bad call. We only think about it when there is some blunder or atrocity, but these are the rarest of aberrations.

Traditional law assumed a society's values are shared and that people will act accordingly even when there is not a precise regulation telling them what to do. When a screw-up (or worse) happened, we assumed the person — not the regulatory system — was at fault. Modern rule by lawyers, to the contrary, assumes the aberration is the rule and must be explicitly regulated against. It figures that if we account for every possibility, we won't need to trust individual judgment anymore — the system will save us from ourselves. It's what makes bureaucrats say: "What's the big deal about making the competent, honorable 99.9 percent of troops go through sensitivity training because of something screwy done by the other .01 percent?" — a .01 percent, by the way, which will do the something screwy no matter how many hours of values training you make them endure.

Rogues will be rogues no matter what the rules are. But rule by lawyers doesn't see it that way. One Nixon gets you 30 years of FISA — on the seeming assumption that if only we'd had FISA, Nixon would never have happened. Meantime, the fact is that we are simply not smart enough to anticipate every contingency and every technological development. So your one-size-fits-all FISA, in addition to being irrelevant if there is ever another Nixon, turns out also to be inadequate when email, cellphones and al Qaeda come along.

That's modern law: politically correct, unresponsive, and unreal.

Economic Thoughts, Part XV: Consequences of Price Controls

This posting is Part XV in a series of postings about economic thoughts.

The excerpts in this posting are taken from Thomas Sowell's book Basic Economics: A Citizens Guide to the Economy and addresses the many consequences of price controls - both ceilings and floors:

To understand the effects of price controls, it is necessary to understand how prices rise and fall in a free market. There is nothing esoteric about it, but it is important to be very clear about what happens. Prices rise because the amount demanded exceeds the amount supplied at existing prices. Prices fall because the amount supplied exceeds the amount demanded at existing prices. The first case is called a "shortage" and the second is called a "surplus" - but both depend on existing prices.

PRICE CEILINGS AND SHORTAGES

When there is a "shortage" of a product, there is not necessarily any less of it, either absolutely or relative to the number of consumers...

Demand Under Rent Control

Some people who would normally not be renting their own apartments...were enabled by the artificially low prices created by rent control to move out and into their own apartments. These artificially low prices also caused others to seek larger apartments than they would ordinarily be living in or to live alone when they would otherwise have to share...More tenants seeking both more apartments and larger apartments created a shortage, even though there was not any greater physical scarcity of housing relative to the population. When rent control ended, the housing shortage quickly disappeared. As rents rose in a free market, some childless couples living in four-bedroom apartments decided they could live in two-bedroom apartments. Some late teenagers decided that they could continue living with mom and dad a little longer, until their pay rose enough for them to afford their own apartments...The net result was that families looking for a place to stay found more places available...

In the normal course of events, people's demand for housing space changes over a lifetime...In this way, a society's total stock of housing is shared and circulated among people according to their individual demands at different stages of their lives.

The individuals themselves do not do this out of a sense of cooperation, but because of the prices - rents in this case - which confront them...

Given the crucial role of prices in this process, suppression of the process by rent control laws leaves elderly people with little incentive to vacate apartments that they would normally vacate...the chronic housing shortages which accompany rent control greatly increase the time and effort required to search for a new and smaller apartment, while reducing the financial reward for finding one. In short, rent control reduces the rate of housing turnover...

Supply Under Rent Control

Rent control has effects on supply as well as on demand...[fewer] new building[s] are built...

...fewer people are willing to rent to others after the rents are kept artificially low by law...

...landlords provide less maintenance and repair under rent control, since the housing shortage makes it unnecessary for them to maintain the appearance of their premises in order to attract tenants. Studies of rent control...have found rent-controlled housing to be deteriorated far more often than non-rent-controlled housing...

...a policy intended to make housing affordable for the poor has had the net effect of shifting resources toward housing affordable only by the affluent or the rich, since luxury housing is often exempt from rent control...this illustrates the crucial importance of making a distinction between intentions and consequences. Economic policies need to be analyzed in terms of the incentives they create, rather than the hopes that inspired them...

Even when rent control applies to apartment buildings where the landlord does not live, eventually the point may be reached where the whole building becomes sufficiently unprofitable that it is simply abandoned. In New York City, for example, many buildings buildings have been abandoned after their owners found it impossible to collect enough rent to cover the costs of services that they are legally required to provide, such as heat and hot water. Such owners have simply disappeared, in order to escape the legal consequences...

...It has been estimated that there are at least four times as many abandoned housing units in New York City as there are homeless people living on the streets there. Homelessness is not due to a physical scarcity of housing, but to a price-related shortage, which is painfully real nonetheless.

Such inefficiency in the allocation of resources means that people are sleeping outdoors on the pavement on cold winter nights - some dying of exposure - while the means of housing them already exist, but are not being used because of laws designed to make housing "affordable."...It also illustrates that the goal of a law - "affordable housing," in this case - is far less important than its actual consequences...

The Politics of Rent Control

Politically, rent control is often a big success, however many serious economic and social problems it creates. Politicians know that there are always more tenants than landlords and more people who do not understand economics than people who do...

Where rent control laws apply on a blanket basis to all housing in existence as of the time the law goes into effect, luxurious housing becomes low-rent housing...after the passage of time makes clear that no new housing is likely to be built unless it is exempted from rent control, such exemptions or relaxations of rent control for new housing mean that even new apartments that are very modest in size and quality may rent for far more than older, more spacious and more luxurious apartments that are still under rent control...

Ironically, cities with strong rent control laws...tend to end up with higher average rents than cities without rent control. Where such laws apply only to rents below some specified level, presumably to protect the poor, builders then have incentives to build only apartments luxurious enough to be above the rent-control level...Not surprisingly, homelessness tends to be greater in cities with rent control...

Scarcity Versus Shortage

...just as there can be a shortage without any greater physical scarcity, so there can be a greater physical scarcity without any shortage...

The usual function of prices in directing goods and resources to where they are most in demand no longer operates under price controls...

But price control prevents buyers and sellers from making mutually advantageous transactions on terms different from those specified in the law.

Black Markets

Bolder and less scrupulous buyers and sellers make mutually advantageous transactions outside the law. Price controls almost invariably produce black markets, where prices are not only higher than the legally permitted prices, but also higher than they would be in a free market, since the legal risks must also be compensated. While small-scale black markets may function in secrecy, large-scale black markets usually require bribes to officials to look the other way...

PRICE FLOORS AND SURPLUSES

...a price set above the free market level tends to cause more to be supplied than demanded, creating a surplus...it is often lost sight of in the swirl of more complex events and more politically popular beliefs.

One of the classic examples of a lower limit to prices imposed by government have been agricultural price-support programs. As often happens, a real but transient problem led to the establishment of enduring government programs, which long outlived the conditions that initially caused them to be created.

Among the many tragedies of the Great Depression of the 1930s was the fact that many farmers simply could not make enough money from the sale of their crops to pay their bills. The prices of farm products fell much more drastically than the prices of the things that farmers had to buy...the federal government sought to restore "parity" between agriculture and other sectors of the economy by intervening to keep farm prices from falling so sharply.

The intervention took various forms. One approach was to reduce by law the anount of various crops that could be grown and sold...Such arrangements continued for decades after the poverty of the Great Depression was replaced by the prosperity of the boom following World War II.

These indirect methods of keeping prices artificially high were only part of the story. The key factor in keeping farm prices artificially higher than they would have been under free market supply and demand was the government's willingness to buy up the surplus created by its control of prices...

Price control in the form of a "floor" under prices...produced [dramatic] surpluses...

During the Great Depression...agricultural price support programs led to vast amounts of food being deliberately destroyed at a time when malnutrition was a serious problem in the United States and hunger marches were taking place in cities across the country...

Still there was a food surplus. A surplus, like a shortage, is a price phenomenon. A surplus does not mean that there is some excess relative to the people. There was not "too much" food relative to the population during the Great Depression. The people simply did not have enough money to buy everything that was produced at the artifically high prices set by the government...

...The countries of the European Union spent $39 billion in direct subsidies in 2002, and their consumers spent twice as much in the inflated food prices created by these agricultural programs. Meanwhile, the surplus food was sold below cost on the world market, driving down prices that Third World farmers could get for their produce. In all these countries, not only the government but also the consumers are paying for agricultural price-support programs - the government directly in payments to farmers and storage companies, the consumers in inflated food prices. As of 2001, American consumers were paying $1.9 billion a year in artificially higher prices for products containing sugar and the government was paying $1.4 billion per month just to store the surplus sugar. Meanwhile, the New York Times reported that sugar producers were "big donors to both Republicans and Democrats" and that the costly sugar price support program had "bipartisan support."

In 2002, the U.S. Congress passed a farm subsidy bill that was estimated to cost the average American family more than $4,000 over the next decade in taxes and inflated food prices...In the nations of the European Union, the prices of lamb, butter, and sugar are all more than twice as high as their world market prices. As a writer for the Wall Street Journal put it, every cow in the European Union gets more subsidies per day than most Africans have to live on.

Although the original rationale for the American price-support programs was to save family farms, in practice more of the money went to big agricultural corporations...Most of the money from the 2002 bipartisan farm bill will likewise go to the wealthiest 10 percent of farmers - including David Rockefeller, Ted Turner, and a dozen companies on the Fortune 500 list...

What is crucial from the standpoint of understanding the role of prices in the economy is that persistent shortages are as much a result of keeping prices artificially high as persistent shortages are of keeping prices artificially low. Nor were losses simply the sums of money extracted from the taxpayers or the consumers for the benefit of agricultural corporations and farmers. These are internal transfers within a nation, which do not directly reduce the total wealth of the country. The real losses to the country as a whole come from the misallocation of scarce resources which have alternative uses...

...Poor people, who spend an especially high percentage of their income on food, are forced to pay far more than necessary to get the amount of food they receive, leaving them with less money for other things. Those on food stamps are able to buy less food with those stamps when food prices are artificially inflated. From a purely economic standpoint, it is working at cross purposes to subsidize farmers by forcing food prices up and then subsidize some consumers by bringing down their particular costs of food with subsidies...However, from a political standpoint, it makes perfect sense to gain the support of two different sets of voters...

Even when agricultural subsidies and price controls originated during hard times as a humanitarian measure, they have persisted long past those times because they developed an organized constituency which threatened to create political trouble if these subsidies and controls were removed or even reduced...

QUALITY DETERIORATION

One of the reasons for the political success of price controls is that part of their costs are concealed. Even the visible shortages do not tell the whole story. Quality deterioration...has been common with many other products and services whose prices have been kept artificially low by government fiat.

One of the fundamental problems of price control is defining just what it is whose price is being controlled...

...there is less incentive to maintain high quality when everything will sell anyway during a shortage...

The priorities which prices automatically cause individuals to consider are among the first casualties of price controls...

THE POLITICS OF PRICE CONTROLS

Simple as basic economic principles may be, their ramifications can be quite complex...However, even this basic level of economics is seldom understood by the public, which often demands political "solutions" that turn out to make matters worse...

...In an era of democratic politics,...actions would require either a public familiar with basic economics or political leaders willing to risk their careers to do what needed to be done. It is hard to know which is less likely.

Part XVI to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality

Economic Thoughts, Part XV: Consequences of Price Controls

This posting is Part XV in a series of postings about economic thoughts.

The excerpts in this posting are taken from Thomas Sowell's book Basic Economics: A Citizens Guide to the Economy and addresses the many consequences of price controls - both ceilings and floors:

To understand the effects of price controls, it is necessary to understand how prices rise and fall in a free market. There is nothing esoteric about it, but it is important to be very clear about what happens. Prices rise because the amount demanded exceeds the amount supplied at existing prices. Prices fall because the amount supplied exceeds the amount demanded at existing prices. The first case is called a "shortage" and the second is called a "surplus" - but both depend on existing prices.

PRICE CEILINGS AND SHORTAGES

When there is a "shortage" of a product, there is not necessarily any less of it, either absolutely or relative to the number of consumers...

Demand Under Rent Control

Some people who would normally not be renting their own apartments...were enabled by the artificially low prices created by rent control to move out and into their own apartments. These artificially low prices also caused others to seek larger apartments than they would ordinarily be living in or to live alone when they would otherwise have to share...More tenants seeking both more apartments and larger apartments created a shortage, even though there was not any greater physical scarcity of housing relative to the population. When rent control ended, the housing shortage quickly disappeared. As rents rose in a free market, some childless couples living in four-bedroom apartments decided they could live in two-bedroom apartments. Some late teenagers decided that they could continue living with mom and dad a little longer, until their pay rose enough for them to afford their own apartments...The net result was that families looking for a place to stay found more places available...

In the normal course of events, people's demand for housing space changes over a lifetime...In this way, a society's total stock of housing is shared and circulated among people according to their individual demands at different stages of their lives.

The individuals themselves do not do this out of a sense of cooperation, but because of the prices - rents in this case - which confront them...

Given the crucial role of prices in this process, suppression of the process by rent control laws leaves elderly people with little incentive to vacate apartments that they would normally vacate...the chronic housing shortages which accompany rent control greatly increase the time and effort required to search for a new and smaller apartment, while reducing the financial reward for finding one. In short, rent control reduces the rate of housing turnover...

Supply Under Rent Control

Rent control has effects on supply as well as on demand...[fewer] new building[s] are built...

...fewer people are willing to rent to others after the rents are kept artificially low by law...

...landlords provide less maintenance and repair under rent control, since the housing shortage makes it unnecessary for them to maintain the appearance of their premises in order to attract tenants. Studies of rent control...have found rent-controlled housing to be deteriorated far more often than non-rent-controlled housing...

...a policy intended to make housing affordable for the poor has had the net effect of shifting resources toward housing affordable only by the affluent or the rich, since luxury housing is often exempt from rent control...this illustrates the crucial importance of making a distinction between intentions and consequences. Economic policies need to be analyzed in terms of the incentives they create, rather than the hopes that inspired them...

Even when rent control applies to apartment buildings where the landlord does not live, eventually the point may be reached where the whole building becomes sufficiently unprofitable that it is simply abandoned. In New York City, for example, many buildings buildings have been abandoned after their owners found it impossible to collect enough rent to cover the costs of services that they are legally required to provide, such as heat and hot water. Such owners have simply disappeared, in order to escape the legal consequences...

...It has been estimated that there are at least four times as many abandoned housing units in New York City as there are homeless people living on the streets there. Homelessness is not due to a physical scarcity of housing, but to a price-related shortage, which is painfully real nonetheless.

Such inefficiency in the allocation of resources means that people are sleeping outdoors on the pavement on cold winter nights - some dying of exposure - while the means of housing them already exist, but are not being used because of laws designed to make housing "affordable."...It also illustrates that the goal of a law - "affordable housing," in this case - is far less important than its actual consequences...

The Politics of Rent Control

Politically, rent control is often a big success, however many serious economic and social problems it creates. Politicians know that there are always more tenants than landlords and more people who do not understand economics than people who do...

Where rent control laws apply on a blanket basis to all housing in existence as of the time the law goes into effect, luxurious housing becomes low-rent housing...after the passage of time makes clear that no new housing is likely to be built unless it is exempted from rent control, such exemptions or relaxations of rent control for new housing mean that even new apartments that are very modest in size and quality may rent for far more than older, more spacious and more luxurious apartments that are still under rent control...

Ironically, cities with strong rent control laws...tend to end up with higher average rents than cities without rent control. Where such laws apply only to rents below some specified level, presumably to protect the poor, builders then have incentives to build only apartments luxurious enough to be above the rent-control level...Not surprisingly, homelessness tends to be greater in cities with rent control...

Scarcity Versus Shortage

...just as there can be a shortage without any greater physical scarcity, so there can be a greater physical scarcity without any shortage...

The usual function of prices in directing goods and resources to where they are most in demand no longer operates under price controls...

But price control prevents buyers and sellers from making mutually advantageous transactions on terms different from those specified in the law.

Black Markets

Bolder and less scrupulous buyers and sellers make mutually advantageous transactions outside the law. Price controls almost invariably produce black markets, where prices are not only higher than the legally permitted prices, but also higher than they would be in a free market, since the legal risks must also be compensated. While small-scale black markets may function in secrecy, large-scale black markets usually require bribes to officials to look the other way...

PRICE FLOORS AND SURPLUSES

...a price set above the free market level tends to cause more to be supplied than demanded, creating a surplus...it is often lost sight of in the swirl of more complex events and more politically popular beliefs.

One of the classic examples of a lower limit to prices imposed by government have been agricultural price-support programs. As often happens, a real but transient problem led to the establishment of enduring government programs, which long outlived the conditions that initially caused them to be created.

Among the many tragedies of the Great Depression of the 1930s was the fact that many farmers simply could not make enough money from the sale of their crops to pay their bills. The prices of farm products fell much more drastically than the prices of the things that farmers had to buy...the federal government sought to restore "parity" between agriculture and other sectors of the economy by intervening to keep farm prices from falling so sharply.

The intervention took various forms. One approach was to reduce by law the anount of various crops that could be grown and sold...Such arrangements continued for decades after the poverty of the Great Depression was replaced by the prosperity of the boom following World War II.

These indirect methods of keeping prices artificially high were only part of the story. The key factor in keeping farm prices artificially higher than they would have been under free market supply and demand was the government's willingness to buy up the surplus created by its control of prices...

Price control in the form of a "floor" under prices...produced [dramatic] surpluses...

During the Great Depression...agricultural price support programs led to vast amounts of food being deliberately destroyed at a time when malnutrition was a serious problem in the United States and hunger marches were taking place in cities across the country...

Still there was a food surplus. A surplus, like a shortage, is a price phenomenon. A surplus does not mean that there is some excess relative to the people. There was not "too much" food relative to the population during the Great Depression. The people simply did not have enough money to buy everything that was produced at the artifically high prices set by the government...

...The countries of the European Union spent $39 billion in direct subsidies in 2002, and their consumers spent twice as much in the inflated food prices created by these agricultural programs. Meanwhile, the surplus food was sold below cost on the world market, driving down prices that Third World farmers could get for their produce. In all these countries, not only the government but also the consumers are paying for agricultural price-support programs - the government directly in payments to farmers and storage companies, the consumers in inflated food prices. As of 2001, American consumers were paying $1.9 billion a year in artificially higher prices for products containing sugar and the government was paying $1.4 billion per month just to store the surplus sugar. Meanwhile, the New York Times reported that sugar producers were "big donors to both Republicans and Democrats" and that the costly sugar price support program had "bipartisan support."

In 2002, the U.S. Congress passed a farm subsidy bill that was estimated to cost the average American family more than $4,000 over the next decade in taxes and inflated food prices...In the nations of the European Union, the prices of lamb, butter, and sugar are all more than twice as high as their world market prices. As a writer for the Wall Street Journal put it, every cow in the European Union gets more subsidies per day than most Africans have to live on.

Although the original rationale for the American price-support programs was to save family farms, in practice more of the money went to big agricultural corporations...Most of the money from the 2002 bipartisan farm bill will likewise go to the wealthiest 10 percent of farmers - including David Rockefeller, Ted Turner, and a dozen companies on the Fortune 500 list...

What is crucial from the standpoint of understanding the role of prices in the economy is that persistent shortages are as much a result of keeping prices artificially high as persistent shortages are of keeping prices artificially low. Nor were losses simply the sums of money extracted from the taxpayers or the consumers for the benefit of agricultural corporations and farmers. These are internal transfers within a nation, which do not directly reduce the total wealth of the country. The real losses to the country as a whole come from the misallocation of scarce resources which have alternative uses...

...Poor people, who spend an especially high percentage of their income on food, are forced to pay far more than necessary to get the amount of food they receive, leaving them with less money for other things. Those on food stamps are able to buy less food with those stamps when food prices are artificially inflated. From a purely economic standpoint, it is working at cross purposes to subsidize farmers by forcing food prices up and then subsidize some consumers by bringing down their particular costs of food with subsidies...However, from a political standpoint, it makes perfect sense to gain the support of two different sets of voters...

Even when agricultural subsidies and price controls originated during hard times as a humanitarian measure, they have persisted long past those times because they developed an organized constituency which threatened to create political trouble if these subsidies and controls were removed or even reduced...

QUALITY DETERIORATION

One of the reasons for the political success of price controls is that part of their costs are concealed. Even the visible shortages do not tell the whole story. Quality deterioration...has been common with many other products and services whose prices have been kept artificially low by government fiat.

One of the fundamental problems of price control is defining just what it is whose price is being controlled...

...there is less incentive to maintain high quality when everything will sell anyway during a shortage...

The priorities which prices automatically cause individuals to consider are among the first casualties of price controls...

THE POLITICS OF PRICE CONTROLS

Simple as basic economic principles may be, their ramifications can be quite complex...However, even this basic level of economics is seldom understood by the public, which often demands political "solutions" that turn out to make matters worse...

...In an era of democratic politics,...actions would require either a public familiar with basic economics or political leaders willing to risk their careers to do what needed to be done. It is hard to know which is less likely.

Part XVI to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act
Part XIV: On Equality

New Political Group Emerges

Today's "Political Scene" in the ProJo announced the formation of a new organization: the Citizen's Foundation of Rhode Island. According to the ProJo story:

The group's Web site...outlines a four-item platform that purports to uphold the interests of the business community: limits on tax and spending increases, as in a bill supported by the Rhode Island Public Expenditure Council in this year's legislative session; voter initiative; reforming public education, and "open, honest and accountable decision-making at all levels of government."

I've poked around the group's website and find much that is appealing, especially their declaration that they're in it for the long haul.

CFRI has undertaken a multi-year, multi-election approach to creating significant change in Rhode Island’s legislature over the next few election cycles. It provides an opportunity for Rhode Island’s businesspeople and citizens to join together in a common effort to support legislative candidates of merit.

In addition to setting up their own PAC, the CFRI is using some familiar resources:

* RIPEC has agreed to provide research, policy analysis and policy development and analytical support services to CFRI and its candidates.

* CFRI utilizes the Education Partnership for consultation in educational issues and policy.

* CFRI utilizes RI Policy Analysis for statistical research.

Covering War, and Also Ignoring It

Last week, Projo columnist Bob Kerr wrote about the disproportionate attention given to journalists killed or wounded in the war zone in Iraq. His point is not that journalists receive too much attention, but that regular soldiers receive too little...

A television news crew gets hit by a car bomb. And the war in Iraq gets moved to the front page.

The explosion, during another bloody day in Baghdad, killed CBS cameraman Paul Douglas and soundman James Brolan. It seriously injured reporter Kimberly Dozier.

And, oh, by the way, an American soldier was also killed in the blast. His or her name was not included in the story. This war, this horrible muddle, continues its strange and frustrating presence on the fringe of public awareness. The birth of the child of two vapid celebrities will claim far more attention than the death of thousands in a war gone brutally out of control.

Capt. James A. Funkhouser was the soldier killed alongside the journalists.

Kerr offers two explanations for what he believes to be underreporting of events in Iraq. First, he believes that war coverage is being improperly "controlled" by the American military...

[Dozier] has pushed the war news into higher visibility by becoming part of it.

She has done it while covering the war in the masterfully controlled way that has allowed the military to keep so much of the carnage out of public view....

Horror stories occasionally slip through the control net, but it will be a long, long time before we know all there is to know.

Second, Kerr suggests that dangers inherent in a war zone place a limit on the ability of journalists to fully report on what is important...

We don't see reporters moving around Iraq as reporters moved around Vietnam. We see the war in very narrow focus. It is partly because of imbedding, partly because the country is so terrifyingly unpredictable. There is apparently no place totally secure, no place where murder and kidnapping are not a possibility.

If, as Kerr speculates, American "control" of journalists is as serious a problem limiting the scope of war reporting as is the nature of war itself, then a conflict without the "controlling" American presence should receive more complete coverage, right?

So how then is the dearth of coverage of a war like the current civil war in the Congo, where the US has no "control" of any sort, explained? As Time magazine describes in its coverage of "The Deadliest War in the World"...

Simmering conflict in Congo has killed 4 million people since 1998, yet few choose to cover the story. Time looks at a forgotten nation -- and what's needed to prevent the deaths of millions more.

A key difference between Iraq and the Congo, of course, is that Americans are fighting and dying in Iraq, but not in the Congo. But is that the full extent of the discussion? Does the lack of American involvement in a war, no matter how brutal, justify not covering it? This result of this version of blood-and-soil nationalistic thinking runs counter to the reasonable rule-of-thumb laid out by Kerr at the start of his column -- out-of-control wars deserve more coverage than "the birth of the child of two vapid celebrities". By this standard, the civil war in the Congo should defintiely receive more coverage than it does. That it doesn't has nothing to do with any supposed military "control" of journalists. Bob Kerr needs to look beyond blaming-America's-military-first to explain why violent conflict doesn't always get the scale of coverage it merits.

One final point: a widespread willingness to ignore national-scale violence, so long as Americans are not involved is what makes the position of withdraw-from-Iraq and damn-the-consequences held by politicians like Carl Sheeler and Sheldon Whitehouse so deeply unsatisfying. The idea of making violence in Iraq easier to ignore, because once America is no longer directly involved, Iraq won't get very much coverage, is not a sound basis for American foreign policy.

Oppressor of America

Well, after extensive efforts since the company devoured Fleet, Bank of America has finally succeeded in persuading me to take my business elsewhere. From several varieties of inconvenience to an extremely unpleasant job fair to the fees (my God, the fees!), the behemoth has finally overcome the natural inertia against changing banks.

The company's corporate approach to handling customers was consolidated for me in a single policy that I discovered a number of months ago: if a customer should write checks for more money than is in his checking account, the bank offers the service of automatically transferring the funds from his savings account. Charging a fee for such a thing is fair — it is the customer's error, after all, and one that a bank understandably discourages — but Bank of America takes the fee out of the checking account, without automatically transferring that amount as part of the service.

During a particularly hectic time last year, when I simply had to handle my finances on autopilot, I fell into a cycle of not transferring sufficient funds to cover the fees that were automatically being withdrawn from my checking account, and those fees piled up. When I called to complain, the bank did forgive a handful of them, but my awareness that somebody within the organization had made the decision to arrange fees in such a way as to trip up busy customers left me resolved to, at some future date, quit the bank. Now that I've discovered another policy having to do with numbers of transactions that conflicts with a banking strategy that I've followed since I was fourteen, I won't delay any longer.

In fact, the entirely different feel that I've gotten from Bank of America than from any of my previous banks makes me wary of financial trends toward automation. It used to be mainly on general principle that I preferred to handle each paycheck and bill — so as not to lose touch with the flow of my money. But now I think automatic deposits and withdrawals may represent a much more insidious trend. How much higher the barrier is to changing banks when doing so requires one to recall and then figure out how to change bank information with any number of third parties!

I fear that movement toward the ideal of convenience — not just in finance — may lead to a more oppressive corporate culture, as each company becomes akin to a monopoly of its own client base.

Economic Thoughts, Part XIV: On Equality

This posting is Part XIV in a series of postings about economic thoughts.

Milton and Rose Friedman, in Chapter 5 of their 1979 book, Free to Choose: A Personal Statement, discuss the issue of equality:

...In the early decades of the Republic, equality meant equality before God; liberty meant liberty to shape one's own life. The obvious conflict between the Declaration of Independence and the institution of slavery occupied the center of the stage. That conflict was finally resolved by the Civil War. The debate then moved to a different level. Equality came more and more to be interpreted as "equality of opportunity" in the sense that no one should be prevented by arbitrary obstacles from using his capacities to pursue his own objectives. That is still its dominant meaning to most citizens of the United States.

Neither equality before God nor equality of opportunity presented any conflict with liberty to shape one's own life. Quite the opposite. Equality and liberty were two faces of the same basic value...

A very different meaning of equality has emerged in the United States in recent decades...equality of outcome...Equality of outcome is in clear conflict with liberty. The attempt to promote it has been a major source of bigger and bigger government, and of government-imposed restrictions of our liberty.

EQUALITY BEFORE GOD

...the clue to what Thomas Jefferson and his contemporaries meant by equal is in the next phrase of the Declaration - "endowed by their Creator with certain unalienable rights; that among these are Life, Liberty, and the pursuit of Happiness." Men were equal before God. Each person is precious in and of himself. He has unalienable rights, rights that no one else is entitled to invade. He is entitled to serve his own purposes and not to be treated simply as an instrument to promote someone else's purposes�

Equality before God - personal equality - is important precisely because people are not identical. Their different values, their different tastes, their different capacities will lead them to want to lead very different lives. Personal equality requires respect for their right to do so...Jefferson had no doubt that some men were superior to others, that there was an elite. But that did not give them the right to rule others.

If an elite did not have the right to impose its will on others, neither did any other group, even a majority...Government was established to protect that right - from fellow citizens and from external threat - not to give a majority unbridled rule...

...Alexis de Tocqueville...saw equality, not majority rule, as the outstanding characteristic of America. "In America," he wrote,

the aristocratic element has always been feeble from its birth...

America, then, exhibits in her social state a most extraordinary phenomenon. Men are there seen on a greater equality in point of fortune and intellect, or, in other words, more equal in their strength, than in any other country of the world, or in any age of which history has preserved the remembrance.

EQUALITY OF OPPORTUNITY

...Like personal equality, equality of opportunity is not to be interpreted literally. Its real meaning is perhaps best expressed by the French expression dating from the French Revolution: Une carriere ouverte aux les talents - a career open to talents. No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person - only his abilities.

On this interpretation, equality of opportunity simply spells out in more detail the meaning of personal equality, of equality before the law...

Like every ideal, equality of opportunity is incapable of being fully realized...The very concept of a "melting pot" reflected the goal of equality of opportunity...

The priority given to equality of opportunity in the hierarchy of values generally accepted by the public after the Civil War is manifested particularly in economic policy. The catchwords were free enterprise, competition, laissez-faire. Everyone was free to go into any business, follow any occupation, buy any property, subject only to the agreement of the other parties to the transaction. Each was to have the opportunity to reap the benefits if he succeeded, to suffer the costs if he failed. There were to be no arbitrary obstacles. Performance, not birth, religion, or nationality, was the touchstone.

One corollary was the development of what many who regarded themselves as the cultural elite sneered at as vulgar materialism...As Tocqueville pointed out, this emphasis reflected the unwillingness of the community to accept the traditional criteria in feudal and aristocratic societies, namely birth and parentage. Performance was the obvious alternative, and the accumulation of wealth was the most readily available measure of performance.

Another corollary, of course, was an enormous release of human energy that made America an increasingly productive and dynamic society in which social mobility was an everyday reality. Still another, perhaps surprisingly, was an explosion in charitable activity. This explosion was made possible by the rapid growth in wealth...

...in the economic sphere as elsewhere, practice did not always conform to the ideal. Government was kept to a minor role; no major obstacles to enterprise were erected, and by the end of the nineteenth century, positive government measures, especially the Sherman Anti-Trust Law, were adopted to eliminate private barriers to competition. But extralegal arrangements continued to interfere with the freedom of individuals to enter various businesses or professions, and social practices unquestionably gave special advantages to persons born in the "right" families, of the "right" color, and practicing the "right" religion. However, the rapid rise in the economic and social position of various less privileged groups demonstrates that these obstacles were by no means insurmountable�

EQUALITY OF OUTCOME

That different concept, equality of outcome, has been gaining ground in this [20th] century...In some intellectual circles the desirability of equality of outcome has become an article of religious faith...

For this concept, as for the other two, "equal" is not to be interpreted literally as "identical."...

This concept of equality differs radically from the other two. Government measures that promote personal equality or equality of opportunity enhance liberty; government measures to achieve "fair shares for all" reduce liberty. If what people get is to be determined by "fairness," who is to decide what is "fair"?..."Fairness" is not an objectively determined concept once it departs from identity. "Fairness," like "needs," is in the eye of the beholder. If all are to have "fair shares," someone or some group of people must decide what shares are fair - and they must be able to impose their decisions on others, taking from those who have more than their "fair" share and giving to those who have less. Are those who make and impose such decisions equal to those for whom they decide? Are we not in George Orwell's Animal Farm, where "all animals are equal, but some animals are more equal than others"?

In addition, if what people get is determined by "fairness" and not by what they produce, where are the "prizes" to come from? What incentive is there to work and produce? How is it to be decided who is to be the doctor, who the lawyer, who the garbage collector, who the street sweeper? What assures that people will accept the roles assigned to them and perform those roles in accordance with their abilities? Clearly, only force or the threat of force will do.

The key point is not merely that practice will depart from the ideal...The point is rather that there is a fundamental conflict between the ideal of "fair shares" or of its precursor, "to each according to his needs," and the of personal liberty. This conflict has plagued every attempt to make equality of outcome the overriding principle of social organization. The end result has invariably been a state of terror...And even terror has not equalized outcomes. In every case, wide inequality persists by any criterion; inequality between the rulers and the ruled, not only in power, but also in material standards of life...

...dissatisfaction has mounted with every additional attempt to implement equality of outcome.

Much of the moral fervor behind the drive for equality of outcome comes from the widespread belief that it is not fair that some children should have a great advantage over others simply because they happen to have wealthy parents. Of course it is not fair. However, unfairness can take many forms. It can take the form of the inheritance of property...it can also take the form of the inheritance of talent...The inheritance of property can be interfered with more readily than the inheritance of talent. But from an ethical point of view, is there any difference between the two? Yet many people resent the inheritance of property but not the inheritance of talent...

The ethical issues involved are subtle and complex. They are not to be resolved by such simplistic formulas as "fair shares for all."...

Life is not fair. It is tempting to believe that government can rectify what nature has spawned. But it is also important to recognize how much we benefit from the very unfairness we deplore...

...What kind of world would it be if everyone were a duplicate of everyone else?...

Still another facet of this complex issue of fairness can be illustrated by considering a game of chance...The people who choose to play may start the evening with equal piles of chips, but as the play progresses, those piles will become unequal. By the end of the evening, some will be big winners, others big losers. In the name of the ideal of equality, should the winners be required to repay the losers?...would they come back again to play if they knew that whatever happened, they'd end up exactly where they started?

This example has a great deal more to do with the real world than one might at first suppose. Every day each of us makes decisions that involve taking a chance...Each time the question is, who is to decide what chances we take? That in turn depends on who bears the consequences of the decision. If we bear the consequences, we can make the decision. But if someone else bears the consequences, should we or will we be permitted to make the decision?...

The system under which people make their own choices - and bear most of the consequences of their decisions - is the system that has prevailed for most of our history. It is the system that gave the Henry Fords, the Thomas Alva Edisons, the George Eastmans, the John D. Rockefellers, the James Cash Penneys the incentive to transform our society over the past two centuries. It is the system that gave other people an incentive to furnish venture capital to finance the risky enterprises that these ambitious inventors and captains of industry overtook. Of course, there were many losers along the way - probably more losers than winners...But for the most part they went in with their eyes open. They knew they were taking chances. And win or lose, society as a whole benefited from their willingness to take a chance.

The fortunes that this system produced came overwhelmingly from developing new products or services, or new ways of producing products or services, or of distributing them widely. The resulting addition to the wealth of the community as a whole, to the well-being of the masses of the people, amounted to many times the wealth accumulated by the innovators...Moreover, in many cases the private fortunes were largely devoted in the end to the benefit of society. The Rockefeller, Ford and Carnegie foundations were only the most prominent...

There is no inconsistency between a free market system and the pursuit of broad social and cultural goals, or between a free market system and compassion for the less fortunate, whether the compassion takes the form, as it did in the nineteenth century, of private charitable activity, or, as it has done increasingly in the twentieth, of assistance through government - provided that in both cases it is an expression of desire to help others. There is all the difference in the world, however, between two kinds of assistance through government that seem superficially similar: first, 90 percent of us agreeing to impose taxes on ourselves in order to help the bottom 10 percent, and second, 80 percent voting to impose taxes on the top 10 percent to help the bottom 10 percent...The first may be wise or unwise, an effective or ineffective way to help the disadvantaged - but it is consistent with belief in both equality of opportunity and liberty. The second seeks equality of outcome and is entirely antithetical to liberty.

WHO FAVORS EQUALITY OF OUTCOME?

There is little support for the goals of equality of outcome despite the extent to which it has become almost an article of religious faith among intellectuals and despite its prominence in the speeches of politicians...

For intellectuals, the clearest evidence is their failure to practice what so many of them preach. Equality of outcome can be promoted on a do-it-yourself basis. First, decide exactly what you mean by equality. Do you want to achieve equality within the United States? In a selected group of countries as a whole? In the world as a whole? Is equality to be judged in terms of income per person? Per family? Per year? Per decade? Per lifetime? Income in the form of money alone? Or including such non-monetary items as the rental value of an owned home; food grown for one's own use; services rendered by members of the family not employed for money, notably the housewife? How are physical and mental handicaps or advantages to be allowed for?...

What Irving Kristol has called the "new class" - government bureaucrats, academics whose research is supported by government funds or who are employed in government-financed "think-tanks," staffs of the many so-called "general interest" or "public policy" groups, journalists and others in the communications industry - are among the most ardent preachers of the doctrine of equality...The members of the new class are in general among the highest paid persons in the community. And for many among them, preaching equality and promoting or administering the resulting legislation has proved an effective means of achieving such high incomes...

...On another level compulsion would change matters drastically: the kind of society that would emerge if such acts of redistribution were voluntary is altogether different - and, by our standards, infinitely preferable - to the kind that would emerge if redistribution were compulsory...

CONSEQUENCES OF EGALITARIAN POLICIES

[In discussing British domestic policy since World War II]...Measure after measure has been adopted designed to take from the rich and give to the poor...There has been a vast redistribution of wealth, but the end result is not an equitable distribution.

Instead, new classes of privileged have been created to replace or supplant the old; the bureaucrats, secure in their jobs...the trade unions that profess to represent the most downtrodden workers but in fact consist of the highest paid laborers in the land - the aristocrats of the labor movement; and the new millionaires - people who have been cleverest at finding ways around the laws, rules, the regulations...A vast reshuffling of income and wealth, yes; greater equality, hardly.

The drive for equality in Britain failed, not because the wrong policies were adopted...not because they were badly administered...not because the wrong people administered them...The drive for equality failed for a much more fundamental reason. It went against one of the most basic instincts of all human beings. In the words of Adam Smith, "The uniform, constant, and uninterrupted effort of every man to better his condition" - and, one may add, the condition of his children and his children's children. Smith, of course, meant not merely material well-being...He had a much broader concept in mind, one that included all of the values by which men judge their success...

When the law interferes with people's pursuit of their own values, they will try to find a way around. They will evade the law, they will break the law, or they will leave the country. Few of us believe in a moral code that justifies forcing people to give up much of what they produce to finance payments to persons they do not know for purposes they may not approve of. When the law contradicts what most people regard as moral and proper, they will break the law...Only fear of punishment, not a sense of justice and morality, will lead people to obey the law.

When people start to break one set of laws, the lack of respect for the law inevitably spreads to all laws, even those that everyone regards as moral and proper...

In addition, that drive for equality has driven out of Britain some of its ablest, best-trained, most vigorous citizens...Finally, who can doubt the effect that the drive for equality has had on efficiency and productivity?...

CAPITALISM AND EQUALITY

Everywhere in the world there are gross inequities of income and wealth...

In the past century a myth has grown up that free market capitalism...increases such inequalities, that it is a system under which the rich exploit the poor.

Nothing could be further from the truth. Wherever the free market has been permitted to operate, wherever anything approaching equality of opportunity has existed, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate...

Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant relatively little to the wealthy [as they could afford many comforts]...These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful...

CONCLUSION

A society that puts equality...ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.

On the other hand, a society that puts freedom first will...end up with both greater freedom and greater equality. Though a by-product of freedom, greater equality is not an accident. A free society releases the energies and abilities of people to pursue their own objectives. It prevents some people from arbitrarily suppressing others. It does not prevent some people achieving positions of privilege, but so long as freedom is maintained, it prevents those positions of privilege from becoming institutionalized; they are subject to continued attack by other able, ambitious people. Freedom means diversity but also mobility. It preserves the opportunity for today's disadvantaged to become tomorrow's privileged and, in the process, enables almost everyone, from top to bottom, to enjoy a fuller and richer life.

An earlier posting offers yet more thoughts on equality and inequality.

Part XV to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act

Economic Thoughts, Part XIV: On Equality

This posting is Part XIV in a series of postings about economic thoughts.

Milton and Rose Friedman, in Chapter 5 of their 1979 book, Free to Choose: A Personal Statement, discuss the issue of equality:

…In the early decades of the Republic, equality meant equality before God; liberty meant liberty to shape one’s own life. The obvious conflict between the Declaration of Independence and the institution of slavery occupied the center of the stage. That conflict was finally resolved by the Civil War. The debate then moved to a different level. Equality came more and more to be interpreted as "equality of opportunity" in the sense that no one should be prevented by arbitrary obstacles from using his capacities to pursue his own objectives. That is still its dominant meaning to most citizens of the United States.

Neither equality before God nor equality of opportunity presented any conflict with liberty to shape one’s own life. Quite the opposite. Equality and liberty were two faces of the same basic value…

A very different meaning of equality has emerged in the United States in recent decades – equality of outcome…Equality of outcome is in clear conflict with liberty. The attempt to promote it has been a major source of bigger and bigger government, and of government-imposed restrictions of our liberty.

EQUALITY BEFORE GOD

…The clue to what Thomas Jefferson and his contemporaries meant by equal is in the next phrase of the Declaration – "endowed by their Creator with certain unalienable rights; that among these are Life, Liberty, and the pursuit of Happiness." Men were equal before God. Each person is precious in and of himself. He has unalienable rights, rights that no one else is entitled to invade. He is entitled to serve his own purposes and not to be treated simply as an instrument to promote someone else’s purposes…

Equality before God – personal equality – is important precisely because people are not identical. Their different values, their different tastes, their different capacities will lead them to want to lead very different lives. Personal equality requires respect for their right to do so…Jefferson had no doubt that some men were superior to others, that there was an elite. But that did not give them the right to rule others.

If an elite did not have the right to impose its will on others, neither did any other group, even a majority…Government was established to protect that right – from fellow citizens and from external threat – not to give a majority unbridled rule…

…Alexis de Tocqueville…saw equality, not majority rule, as the outstanding characteristic of America. "In America," he wrote,

the aristocratic element has always been feeble from its birth…

America, then, exhibits in her social state a most extraordinary phenomenon. Men are there seen on a greater equality in point of fortune and intellect, or, in other words, more equal in their strength, than in any other country of the world, or in any age of which history has preserved the remembrance.

EQUALITY OF OPPORTUNITY

…Like personal equality, equality of opportunity is not to be interpreted literally. Its real meaning is perhaps best expressed by the French expression dating from the French Revolution: Une carriere ouverte aux les talents – a career open to talents. No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person – only his abilities.

On this interpretation, equality of opportunity simply spells out in more detail the meaning of personal equality, of equality before the law…

Like every ideal, equality of opportunity is incapable of being fully realized…The very concept of a "melting pot" reflected the goal of equality of opportunity…

The priority given to equality of opportunity in the hierarchy of values generally accepted by the public after the Civil War is manifested particularly in economic policy. The catchwords were free enterprise, competition, laissez-faire. Everyone was free to go into any business, follow any occupation, buy any property, subject only to the agreement of the other parties to the transaction. Each was to have the opportunity to reap the benefits if he succeeded, to suffer the costs if he failed. There were to be no arbitrary obstacles. Performance, not birth, religion, or nationality, was the touchstone.

One corollary was the development of what many who regarded themselves as the cultural elite sneered at as vulgar materialism…As Tocqueville pointed out, this emphasis reflected the unwillingness of the community to accept the traditional criteria in feudal and aristocratic societies, namely birth and parentage. Performance was the obvious alternative, and the accumulation of wealth was the most readily available measure of performance.

Another corollary, of course, was an enormous release of human energy that made America an increasingly productive and dynamic society in which social mobility was an everyday reality. Still another, perhaps surprisingly, was an explosion in charitable activity. This explosion was made possible by the rapid growth in wealth…

…in the economic sphere as elsewhere, practice did not always conform to the ideal. Government was kept to a minor role; no major obstacles to enterprise were erected, and by the end of the nineteenth century, positive government measures, especially the Sherman Anti-Trust Law, were adopted to eliminate private barriers to competition. But extralegal arrangements continued to interfere with the freedom of individuals to enter various businesses or professions, and social practices unquestionably gave special advantages to persons born in the "right" families, of the "right" color, and practicing the "right" religion. However, the rapid rise in the economic and social position of various less privileged groups demonstrates that these obstacles were by no means insurmountable…

EQUALITY OF OUTCOME

That different concept, equality of outcome, has been gaining ground in this [20th] century…In some intellectual circles the desirability of equality of outcome has become an article of religious faith…

For this concept, as for the other two, "equal" is not to be interpreted literally as "identical."…

This concept of equality differs radically from the other two. Government measures that promote personal equality or equality of opportunity enhance liberty; government measures to achieve "fair shares for all" reduce liberty. If what people get is to be determined by "fairness," who is to decide what is "fair"?..."Fairness" is not an objectively determined concept once it departs from identity. "Fairness," like "needs," is in the eye of the beholder. If all are to have "fair shares," someone or some group of people must decide what shares are fair – and they must be able to impose their decisions on others, taking from those who have more than their "fair" share and giving to those who have less. Are those who make and impose such decisions equal to those for whom they decide? Are we not in George Orwell’s Animal Farm, where "all animals are equal, but some animals are more equal than others"?

In addition, if what people get is determined by "fairness" and not by what they produce, where are the "prizes" to come from? What incentive is there to work and produce? How is it to be decided who is to be the doctor, who the lawyer, who the garbage collector, who the street sweeper? What assures that people will accept the roles assigned to them and perform those roles in accordance with their abilities? Clearly, only force or the threat of force will do.

The key point is not merely that practice will depart from the ideal…The point is rather that there is a fundamental conflict between the ideal of "fair shares" or of its precursor, "to each according to his needs," and the of personal liberty. This conflict has plagued every attempt to make equality of outcome the overriding principle of social organization. The end result has invariably been a state of terror…And even terror has not equalized outcomes. In every case, wide inequality persists by any criterion; inequality between the rulers and the ruled, not only in power, but also in material standards of life…

…dissatisfaction has mounted with every additional attempt to implement equality of outcome.

Much of the moral fervor behind the drive for equality of outcome comes from the widespread belief that it is not fair that some children should have a great advantage over others simply because they happen to have wealthy parents. Of course it is not fair. However, unfairness can take many forms. It can take the form of the inheritance of property…it can also take the form of the inheritance of talent…The inheritance of property can be interfered with more readily than the inheritance of talent. But from an ethical point of view, is there any difference between the two? Yet many people resent the inheritance of property but not the inheritance of talent…

The ethical issues involved are subtle and complex. They are not to be resolved by such simplistic formulas as "fair shares for all."…

Life is not fair. It is tempting to believe that government can rectify what nature has spawned. But it is also important to recognize how much we benefit from the very unfairness we deplore…

…What kind of world would it be if everyone were a duplicate of everyone else?...

Still another facet of this complex issue of fairness can be illustrated by considering a game of chance…The people who choose to play may start the evening with equal piles of chips, but as the play progresses, those piles will become unequal. By the end of the evening, some will be big winners, others big losers. In the name of the ideal of equality, should the winners be required to repay the losers?...would they come back again to play if they knew that whatever happened, they’d end up exactly where they started?

This example has a great deal more to do with the real world than one might at first suppose. Every day each of us makes decisions that involve taking a chance…Each time the question is, who is to decide what chances we take? That in turn depends on who bears the consequences of the decision. If we bear the consequences, we can make the decision. But if someone else bears the consequences, should we or will we be permitted to make the decision?...

The system under which people make their own choices – and bear most of the consequences of their decisions – is the system that has prevailed for most of our history. It is the system that gave the Henry Fords, the Thomas Alva Edisons, the George Eastmans, the John D. Rockefellers, the James Cash Penneys the incentive to transform our society over the past two centuries. It is the system that gave other people an incentive to furnish venture capital to finance the risky enterprises that these ambitious inventors and captains of industry overtook. Of course, there were many losers along the way – probably more losers than winners…But for the most part they went in with their eyes open. They knew they were taking chances. And win or lose, society as a whole benefited from their willingness to take a chance.

The fortunes that this system produced came overwhelmingly from developing new products or services, or new ways of producing products or services, or of distributing them widely. The resulting addition to the wealth of the community as a whole, to the well-being of the masses of the people, amounted to many times the wealth accumulated by the innovators…Moreover, in many cases the private fortunes were largely devoted in the end to the benefit of society. The Rockefeller, Ford and Carnegie foundations were only the most prominent…

There is no inconsistency between a free market system and the pursuit of broad social and cultural goals, or between a free market system and compassion for the less fortunate, whether the compassion takes the form, as it did in the nineteenth century, of private charitable activity, or, as it has done increasingly in the twentieth, of assistance through government – provided that in both cases it is an expression of desire to help others. There is all the difference in the world, however, between two kinds of assistance through government that seem superficially similar: first, 90 percent of us agreeing to impose taxes on ourselves in order to help the bottom 10 percent, and second, 80 percent voting to impose taxes on the top 10 percent to help the bottom 10 percent…The first may be wise or unwise, an effective or ineffective way to help the disadvantaged – but it is consistent with belief in both equality of opportunity and liberty. The second seeks equality of outcome and is entirely antithetical to liberty.

WHO FAVORS EQUALITY OF OUTCOME?

There is little support for the goals of equality of outcome despite the extent to which it has become almost an article of religious faith among intellectuals and despite its prominence in the speeches of politicians…

For intellectuals, the clearest evidence is their failure to practice what so many of them preach. Equality of outcome can be promoted on a do-it-yourself basis. First, decide exactly what you mean by equality. Do you want to achieve equality within the United States? In a selected group of countries as a whole? In the world as a whole? Is equality to be judged in terms of income per person? Per family? Per year? Per decade? Per lifetime? Income in the form of money alone? Or including such non-monetary items as the rental value of an owned home; food grown for one’s own use; services rendered by members of the family not employed for money, notably the housewife? How are physical and mental handicaps or advantages to be allowed for?...

What Irving Kristol has called the "new class" – government bureaucrats, academics whose research is supported by government funds or who are employed in government-financed "think-tanks," staffs of the many so-called "general interest" or "public policy" groups, journalists and others in the communications industry – are among the most ardent preachers of the doctrine of equality…The members of the new class are in general among the highest paid persons in the community. And for many among them, preaching equality and promoting or administering the resulting legislation has proved an effective means of achieving such high incomes…

…On another level compulsion would change matters drastically: the kind of society that would emerge if such acts of redistribution were voluntary is altogether different – and, by our standards, infinitely preferable – to the kind that would emerge if redistribution were compulsory…

CONSEQUENCES OF EGALITARIAN POLICIES

[In discussing British domestic policy since World War II]…Measure after measure has been adopted designed to take from the rich and give to the poor…There has been a vast redistribution of wealth, but the end result is not an equitable distribution.

Instead, new classes of privileged have been created to replace or supplant the old; the bureaucrats, secure in their jobs…the trade unions that profess to represent the most downtrodden workers but in fact consist of the highest paid laborers in the land – the aristocrats of the labor movement; and the new millionaires – people who have been cleverest at finding ways around the laws, rules, the regulations…A vast reshuffling of income and wealth, yes; greater equity, hardly.

The drive for equality in Britain failed, not because the wrong policies were adopted…not because they were badly administered…not because the wrong people administered them…The drive for equality failed for a much more fundamental reason. It went against one of the most basic instincts of all human beings. In the words of Adam Smith, "The uniform, constant, and uninterrupted effort of every man to better his condition" – and, one may add, the condition of his children and his children’s children. Smith, of course, meant not merely material well-being…He had a much broader concept in mind, one that included all of the values by which men judge their success…

When the law interferes with people’s pursuit of their own values, they will try to find a way around. They will evade the law, they will break the law, or they will leave the country. Few of us believe in a moral code that justifies forcing people to give up much of what they produce to finance payments to persons they do not know for purposes they may not approve of. When the law contradicts what most people regard as moral and proper, they will break the law…Only fear of punishment, not a sense of justice and morality, will lead people to obey the law.

When people start to break one set of laws, the lack of respect for the law inevitably spreads to all laws, even those that everyone regards as moral and proper…

In addition, that drive for equality has driven out of Britain some of its ablest, best-trained, most vigorous citizens…Finally, who can doubt the effect that the drive for equality has had on efficiency and productivity?...

CAPITALISM AND EQUALITY

Everywhere in the world there are gross inequities of income and wealth…

In the past century a myth has grown up that free market capitalism…increases such inequalities, that it is a system under which the rich exploit the poor.

Nothing could be further from the truth. Wherever the free market has been permitted to operate, wherever anything approaching equality of opportunity has existed, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate…

Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant relatively little to the wealthy [as they could afford many comforts]…These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful…

CONCLUSION

A society that puts equality…ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.

On the other hand, a society that puts freedom first will…end up with both greater freedom and greater equality. Though a by-product of freedom, greater equality is not an accident. A free society releases the energies and abilities of people to pursue their own objectives. It prevents some people from arbitrarily suppressing others. It does not prevent some people achieving positions of privilege, but so long as freedom is maintained, it prevents those positions of privilege from becoming institutionalized; they are subject to continued attack by other able, ambitious people. Freedom means diversity but also mobility. It preserves the opportunity for today’s disadvantaged to become tomorrow’s privileged and, in the process, enables almost everyone, from top to bottom, to enjoy a fuller and richer life.

An earlier posting offers yet more thoughts on equality and inequality.

Part XV to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work
Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act

In the Land of the Short-Sighted, the Long-Sighted Man Is...

The Providence Journal (which, to build an incidental point on Andrew's previous post, Matt Jerzyk believes to be too conservative) continues its support for same-sex marriage:

Time, however, may be on his side. Despite various state drives to ban same-sex marriage during the 2004 elections, it appears that the idea of such unions is gaining acceptance. Society is better off when any two adults can make a commitment to care for each other. And more and more Americans believe that sexual orientation should not bar anyone from enjoying the rights accorded by marriage.

In that spirit, we extend best wishes to Attleboro's most prominent newlyweds -- and to all who may be exchanging vows in a new bridal season, regardless of sex.

Those who've followed this debate for awhile will spot the (probably unintential) revealing of the chute down the slippery slope: If society "is better off when any two adults can make a commitment to care for each other" — the Projo's gender-free paraphrase for marriage's purpose — why can't those two adults be related? Why, for that matter, must it only consist of two adults?

One final question: can the thinking behind an editorial position be both short-sighted and blind?

Anchor Rising on Newsmakers this Sunday

I will be appearing on WPRI-TV's (Channel 12) Newsmakers program this Sunday at 6:30 AM (rebroadcast on WNAC-TV [Channel 64]) Sunday at 10 AM) along with Matthew Jerzyk of RI Future, host Steve Aveson and panelist Ian Donnis discussing the nature of political blogging.

Disclaimer: Since the subject is blogs-as-media, viewers should prepare themselves to witness the amazing spectacle of Mr. Jerzyk and I offering our perspectives without any left-versus-right fireworks.

Economic Thoughts, Part XIII: It is Individuals - Not the Society, Government or Market - Who Think and Act

This posting is Part XIII in a series of postings about economic thoughts.

Professor Don Boudreaux of George Mason University, who hails from New Orleans, recently published an article entitled Triumph of the Individual at Tech Central Station in which he discusses Nobel Laureate Friederich Hayek's contribution to our understanding about how it is individuals - not government or markets - that make things happen in any society:

...Hayek spent most of his career watching the worship of power supplant the love of liberty. Nazism and Stalinism were the two most grotesque forms of this power-worship, but as Hayek warned in his most famous book, The Road to Serfdom (1944), even milder forms are surprisingly dangerous.

...the source of Hayek's fundamental contributions to our understanding of society comes from the method of doing social theory that he learned from [Austrian economists Carl Menger and Ludwig von Mises].

This method is one of rigorous adherence to the tenets of "methodological individualism" -- a fancy name for recognizing that the only units in society who think and act are individual persons. Society doesn't think or act; the market doesn't think or act; the United States government doesn't think or act. Only individuals think and act...

Whatever the topic -- war, economic growth, government regulation -- the only way to achieve genuine understanding of what's going on is to trace all actions back to the individuals who take them. The fact that individuals often act in concert -- say, as voters -- still requires those of us seeking to understand the outcomes of elections to understand the incentives and the constraints that confront the individuals who make up these groups.

Failure to be a consistent methodological individualist leads to misunderstanding. Consider, for example, that politicians and pundits frequently go on about how "we as a nation" did this, or how "we as a nation" must not do that.

"We" who make up the American nation number 300 million people, each with our own preferences, beliefs, and expectations. It's only an illusion that "we" act -- or can act -- as one. It's no less an illusion that "we" act when government acts in our name.

Should "we as a nation" rebuild New Orleans? Asked this question unawares, the typical person says "Yes." But the student of Hayek responds that a city can be rebuilt only by individuals. Success at such efforts might require the concerted actions of many individuals. But understanding this fact, the Hayekian is instantly aware that successful rebuilding efforts must give each individual an incentive to rebuild -- must give each individual appropriate knowledge to perform his part of the rebuilding task effectively -- must give each individual the information and ability necessary to coordinate actions with those of countless other individuals.

The Hayekian also understands that the individuals who make up government are spending other people's money for yet other people's benefit. So these officials lack both the incentives and the knowledge to spend this money wisely.

...The Hayekian isn't misled by romantic talk of "we as a nation" rebuilding New Orleans (or doing any other task) because the Hayekian never forgets that only individuals choose and act -- and that the market is the only means of harnessing individual knowledge and effort for the greater good.

Part XIV to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work

Economic Thoughts, Part XIII: It is Individuals - Not the Society, Government or Market - Who Think & Act

This posting is Part XIII in a series of postings about economic thoughts.

Professor Don Boudreaux of George Mason University, who hails from New Orleans, recently published an article entitled Triumph of the Individual at Tech Central Station in which he discusses Nobel Laureate Friederich Hayek's contribution to our understanding about how it is individuals - not government or markets - that make things happen in any society:

…Hayek spent most of his career watching the worship of power supplant the love of liberty. Nazism and Stalinism were the two most grotesque forms of this power-worship, but as Hayek warned in his most famous book, The Road to Serfdom (1944), even milder forms are surprisingly dangerous.

…the source of Hayek's fundamental contributions to our understanding of society comes from the method of doing social theory that he learned from [Austrian economists Carl Menger and Ludwig von Mises].

This method is one of rigorous adherence to the tenets of "methodological individualism" -- a fancy name for recognizing that the only units in society who think and act are individual persons. Society doesn't think or act; the market doesn't think or act; the United States government doesn't think or act. Only individuals think and act…

Whatever the topic -- war, economic growth, government regulation -- the only way to achieve genuine understanding of what's going on is to trace all actions back to the individuals who take them. The fact that individuals often act in concert -- say, as voters -- still requires those of us seeking to understand the outcomes of elections to understand the incentives and the constraints that confront the individuals who make up these groups.

Failure to be a consistent methodological individualist leads to misunderstanding. Consider, for example, that politicians and pundits frequently go on about how "we as a nation" did this, or how "we as a nation" must not do that.

"We" who make up the American nation number 300 million people, each with our own preferences, beliefs, and expectations. It's only an illusion that "we" act -- or can act -- as one. It's no less an illusion that "we" act when government acts in our name.

Should "we as a nation" rebuild New Orleans? Asked this question unawares, the typical person says "Yes." But the student of Hayek responds that a city can be rebuilt only by individuals. Success at such efforts might require the concerted actions of many individuals. But understanding this fact, the Hayekian is instantly aware that successful rebuilding efforts must give each individual an incentive to rebuild -- must give each individual appropriate knowledge to perform his part of the rebuilding task effectively -- must give each individual the information and ability necessary to coordinate actions with those of countless other individuals.

The Hayekian also understands that the individuals who make up government are spending other people's money for yet other people's benefit. So these officials lack both the incentives and the knowledge to spend this money wisely.

…The Hayekian isn't misled by romantic talk of "we as a nation" rebuilding New Orleans (or doing any other task) because the Hayekian never forgets that only individuals choose and act -- and that the market is the only means of harnessing individual knowledge and effort for the greater good.

Part XIV to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices
Part XII: I, Pencil - A Story about the Free Market at Work

Laffey Claims Chafee Didn't Support Action in Afghanistan

Mayor Laffey is running a new radio ad that states that, in the aftermath of 9/11, Sen. Chafee did not support attacking the Taliban in Afghanistan. Sen. Chafee disputes that claim and can point to his September 14, 2001 affirmative vote for authorizing Military force against those who attacked the U.S. on 9/11. The Chafee campaign has asked Laffey to pull the ad. The Laffey campaign has refused.

The Laffey camp defends its decision with the claim that their ad is refering to Sen. Chafee's initial objection to the use of military force against the Taliban. Further, they contend, given that Sen. Chafee did eventually support the action, his shifting position on Afghanistan provides an example of how reluctant Sen. Chafee is to make a decision on even fundamental matters.

As proof, the Laffey campaign is citing a ProJo story (fee required) from September 21, 2001. In it, the ProJo reported that Senator Chafee:

...balked at endorsing a punishing strike on the Taliban in the event that it fails to cooperate in the hunt for the terrorists. "In anything we do, we've got to take the long-term view. There are a lot of people that would like to be on our side that can't," Chafee said.

Further, on October 8, 2001, the Projo reported (fee req'd) that

The three Democrats in Rhode Island's Washington delegation yesterday lined up solidly behind President [Bush]'s decision to launch a military reprisal against Osama bin Laden and the ruling Taliban in Afghanistan, but Republican Sen. Lincoln Chafee declined comment on the attacks.

The attitudes of [Jack Reed], Kennedy and [James Langevin] were in line with the prevailing mood in Washington...

The next day (fee req'd), Sen. Chafee finally offered tepid--and worried--support for attacking the Taliban

Sen. Lincoln D. Chafee, the lone Republican in Rhode Island's Washington delegation, said yesterday that he supports President Bush's decision to bomb Taliban targets in Afghanistan, but worries the military action will inflame anti-American opinion in other countries.

Chafee said he was waiting until he received more information and did not make statements until yesterday.

Finally, this story from December 2001 further supports the Laffey campaign's contention that Sen. Chafee was reluctant to pursue aggressive action in Afghanistan. In fact, Senator Chafee admits as much himself:

Senator Lincoln Chafee indicated today that he may have been wrong in his early doubts about the war in Afghanistan. Appearing on the WJAR-TV show "10 News Conference", Chafee said, "It is easy to admit when I am wrong. I could have been wrong on this" referring to the war. "I was apprehensive about going into Afghanistan" based on the unsuccessful Russian experience there. "We had not had success in our recent skirmishes in the area," he argued. "I came up through the Vietnam period. I have seen this country dragged through a bloody morass."

It is incorrect to simply state that Sen. Chafee didn't support attacking the Taliban: he eventually did, even if with reservation. The fact is that Sen. Chafee did support the action and it is not correct to imply--as the Laffey ad does--that Sen. Chafee never supported attacking the Taliban.

The Laffey campaign's subsequent defense of their ad rests on the reluctance of Sen. Chafee to make a firm decision. To my mind, this defense of the actual ad is actually more compelling and (yes) truthful than the original. As such, I would think that an ad that systematically presented the facts as listed above as proof of Sen. Chafee's pattern of always "considering" a tough issue and only making up his mind once his decision is essentially irrelevant (re: Alito) would have been just as effective and would have insulated the Laffey campaign from criticism. But then again, I'm no political consultant.

The Michaud Agenda

Here’s Dennis Michaud’s 4 point Gubernatorial campaign agenda, straight from the Dennis Michaud for Governor website…

• Economic Growth
• Tax Relief
• Quality Jobs
• State Aid for Public Education

First question: If Mr. Michaud intends to provide both meaningful tax-relief and increased state aid for education, what programs does he intend to cut? Or does his entire "economic growth" program consist of his support for a no-bid casino deal for West Warwick?

Forgetful Montalbano

So, Senate President Joseph Montalbano forgot to report to the state Ethics Commission that his law firm did work for the town of West Warwick. Somehow he did manage to remember to report his work for at least 6 other towns. Imagine that, of all of the towns to not report.... A strange coincidence? In truth, I can't believe that someone as savvy as Montalbano would purposedly leave out such info. If he did it on purpose, he had to know the sort of eyebrow raising it would cause if such a coverup was discovered. Then again, who knows what he--or any legislator--thinks he can get away with given the insulated culture that exists in the State House.

Club for Growth Poll Has Chafee and Laffey Tied

According to John E. Mulligan in the Projo…

The conservative Club for Growth has released highlights of a poll that shows Sen. Lincoln D. Chafee in a statistical dead heat with his Republican primary challenger, Stephen P. Laffey.

Here are the numbers...

• Sample size: 300, 84% Republican, 16% Independent
• Statistical Margin of Error: 5.66%
• Basic Result: Chafee 45.7%, Laffey 44.3%
• Chafee Favorability: 45% Favorable/51% Unfavorable
• Laffey Favorability: 52% Favorable/27% Unfavorable

Here are the reactions…

Chafee campaign spokesman Ian Lang said the poll shows the senator ``in a strong position to win the primary, despite being hammered'' by ads financed by the Club for Growth. Lang called the poll ``a best-case scenario'' for Laffey because the sample had a high proportion of Republicans.

…and…

Laffey's campaign said in a statement, ``There are good polls and bad polls, and we don't pay much attention to any of them.''

Here Comes Anti-Chafee/Anti-Whitehouse Ad #1

The Laffey campaign has released its newest television ads. One is biographical and talks about Mayor Laffey's achievements as Mayor of Cranston. The other is a negative ad that makes the claim that Lincoln Chafee and Sheldon Whitehouse “agree on all the issues, taxes, spending [and] national security”. The ad goes on to say that Senator Chafee and Whitehouse are “addicted to special interest money. Whitehouse has taken $150,000, Chafee over $600,000”.

The dollar amounts presumably refer to the amount of money that Senator Chafee and former Attorney General Whitehouse have taken from political action committees. Data collected by the Federal Election Commission (current as of the last filing deadline) shows that Senator Chafee has received contributions from a mixture of business, labor, and ideological PACs and that Sheldon Whitehouse has taken the great bulk of his PAC contributions from either labor unions or from other Democratic politicians, with money from a few businesses and law-firms thrown in. The FEC website also lists that Steve Laffey has taken a total of $5,500 in contributions from two PACs, in addition to a number of in-kind contributions from the Club for Growth.

As long as candidates 1) are not manipulating the system to collect more money than is legally allowed 2) are not taking money from fringe groups and 3) are not taking money from groups diametrically opposed to their stated issue positions, I am disinclined to make much of an issue out of where campaign contributions come from, when I can discuss actual issues instead. I don't think that Lincoln Chafee, Steve Laffey, or Sheldon Whitehouse will change their issue positions because someone offers them a donation. The form of modern campaign fundraising is determined more by the maze of "reform" laws currently in place and not by any novel strategy on the part of candidates.

But the Chafee/Whitehouse comparison made in Laffey's ad goes right to the heart of the issue troubling many of Rhode Island's Republican voters. Are there any issues that Senator Chafee would like to talk about where he can meaningfully distinguish himself from a very liberal Democrat?

Economic Thoughts, Part XII: I, Pencil - A Story about the Free Market at Work

This posting is Part XII in a series of postings about economic thoughts.

Years ago, Leonard E. Read of the Foundation for Economic Education wrote a now-famous story entitled I, Pencil. The story describes how, in the production of something as simple as a pencil, the free market naturally brings together many different physical materials and people's efforts to meet a consumer need:

I am a lead pencil - the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.

Writing is both my vocation and my avocation; that's all I do.

You may wonder why I should write a genealogy. Well, to begin with, my story is interesting. And, next, I am a mystery - more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This supercilious attitude relegates me to the level of the commonplace. This is a species of the grievous error in which mankind cannot too long persist without peril. For, the wise G. K. Chesterton observed, "We are perishing for want of wonder, not for want of wonders."

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me - no, that's too much to ask of anyone - if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because - well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year.

Pick me up and look me over. What do you see? Not much meets the eye - there's some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.

Innumerable Antecedents

Just as you cannot trace your family tree back very far, so is it impossible for me to name and explain all my antecedents. But I would like to suggest enough of them to impress upon you the richness and complexity of my background...

In the next part of the article, the author then describes the efforts of the numerous parties who are involved in producing a pencil. The complexity is striking.

What does all this tell us about how a free marketplace can work? The author continues:

No One Knows

Does anyone wish to challenge my earlier assertion that no single person on the face of this earth knows how to make me?

Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. Now, you may say that I go too far in relating the picker of a coffee berry in far off Brazil and food growers elsewhere to my creation; that this is an extreme position. I shall stand by my claim. There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how. Neither the miner nor the logger can be dispensed with, any more than can the chemist at the factory or the worker in the oil field--paraffin being a by-product of petroleum.

Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me. Each one wants me less, perhaps, than does a child in the first grade. Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

No Master Mind

There is a fact still more astounding: The absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work. This is the mystery to which I earlier referred.

It has been said that "'only God can make a tree.'" Why do we agree with this? Isn't it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies--millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

The above is what I meant when writing, "If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing." For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand--that is, in the absence of governmental or any other coercive master-minding - then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

Once government has had a monopoly of a creative activity such, for instance, as the delivery of the mails, most individuals will believe that the mails could not be efficiently delivered by men acting freely. And here is the reason: Each one acknowledges that he himself doesn't know how to do all the things incident to mail delivery. He also recognizes that no other individual could do it. These assumptions are correct. No individual possesses enough know-how to perform a nation's mail delivery any more than any individual possesses enough know-how to make a pencil. Now, in the absence of faith in free people - in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity - the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental "master-minding."

Testimony Galore

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it's all about us and on every hand. Mail delivery is exceedingly simple when compared, for instance, to the making of an automobile or a calculating machine or a grain combine or a milling machine or to tens of thousands of other things. Delivery? Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second; they deliver an event visually and in motion to any person's home when it is happening; they deliver 150 passengers from Seattle to Baltimore in less than four hours; they deliver gas from Texas to one's range or furnace in New York at unbelievably low rates and without subsidy; they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard - halfway around the world - for less money than the government charges for delivering a one-ounce letter across the street!

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

Part XIII to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices

Economic Thoughts, Part XII: I, Pencil - A Story about the Free Market at Work

This posting is Part XII in a series of postings about economic thoughts.

Years ago, Leonard E. Read of the Foundation for Economic Education wrote a now-famous story entitled I, Pencil. The story describes how, in the production of something as simple as a pencil, the free market naturally brings together many different physical materials and people's efforts to meet a consumer need:

I am a lead pencil — the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.

Writing is both my vocation and my avocation; that's all I do.

You may wonder why I should write a genealogy. Well, to begin with, my story is interesting. And, next, I am a mystery — more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This supercilious attitude relegates me to the level of the commonplace. This is a species of the grievous error in which mankind cannot too long persist without peril. For, the wise G. K. Chesterton observed, "We are perishing for want of wonder, not for want of wonders."

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me — no, that's too much to ask of anyone — if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because — well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year.

Pick me up and look me over. What do you see? Not much meets the eye — there's some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.

Innumerable Antecedents

Just as you cannot trace your family tree back very far, so is it impossible for me to name and explain all my antecedents. But I would like to suggest enough of them to impress upon you the richness and complexity of my background...

In the next part of the article, the author then describes the efforts of the numerous parties who are involved in producing a pencil. The complexity is striking.

What does all this tell us about how a free marketplace can work? The author continues:

No One Knows

Does anyone wish to challenge my earlier assertion that no single person on the face of this earth knows how to make me?

Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. Now, you may say that I go too far in relating the picker of a coffee berry in far off Brazil and food growers elsewhere to my creation; that this is an extreme position. I shall stand by my claim. There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how. Neither the miner nor the logger can be dispensed with, any more than can the chemist at the factory or the worker in the oil field--paraffin being a by-product of petroleum.

Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me. Each one wants me less, perhaps, than does a child in the first grade. Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

No Master Mind

There is a fact still more astounding: The absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work. This is the mystery to which I earlier referred.

It has been said that "'only God can make a tree.'" Why do we agree with this? Isn't it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies--millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

The above is what I meant when writing, "If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing." For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand--that is, in the absence of governmental or any other coercive master-minding — then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

Once government has had a monopoly of a creative activity such, for instance, as the delivery of the mails, most individuals will believe that the mails could not be efficiently delivered by men acting freely. And here is the reason: Each one acknowledges that he himself doesn't know how to do all the things incident to mail delivery. He also recognizes that no other individual could do it. These assumptions are correct. No individual possesses enough know-how to perform a nation's mail delivery any more than any individual possesses enough know-how to make a pencil. Now, in the absence of faith in free people — in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity — the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental "master-minding."

Testimony Galore

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it's all about us and on every hand. Mail delivery is exceedingly simple when compared, for instance, to the making of an automobile or a calculating machine or a grain combine or a milling machine or to tens of thousands of other things. Delivery? Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second; they deliver an event visually and in motion to any person's home when it is happening; they deliver 150 passengers from Seattle to Baltimore in less than four hours; they deliver gas from Texas to one's range or furnace in New York at unbelievably low rates and without subsidy; they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard — halfway around the world — for less money than the government charges for delivering a one-ounce letter across the street!

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

Part XIII to follow...

For previous postings on Economic Thoughts, refer to:

Part I: What is Economics?
Part II: Myths About Markets
Part III: Why Policy Goals are Trumped by Incentives They Create & the Role of Knowledge in Economics
Part IV: The Abuse of Reason, Fallacies & Dangers of Centralized Planning, Prices & Knowledge, and Understanding Limitations
Part V: The Relationship Between Economic Freedom and Political Freedom
Part VI: More on the Relationship Between Economic Freedom and Political Freedom
Part VII: The Role of Government in a Free Society
Part VIII: The Unspoken, But Very Real, Incentives That Drive Governmental Actions
Part IX: More on the Coercive Role of Government
Part X: The Power of the Market
Part XI: Prices