Limits of Social Compact Theory

The social compact is the modern theory of government that underlies all liberal democratic regimes. This theory has its origins in the thought of Thomas Hobbes, who argued that in the state of nature there is no natural government. Because the state of nature is the state of war, people leave in perpetual fear for their self-preservation. To get out of this state of war, the people get together and form civil government to create a peaceful order.

Without entering into a debate on John Locke, Locke also believed that in the state of nature life was "nasty, brutish and short." In contrast to Hobbes, however, Locke believed that all governments received their power from the consent of the people. Without consent there was no just government.

This theory is the main justification for the revolution against the King of England. The King was trying to tax the people without their consent and was thus ruling as a tyrant.

Many consider the American regime to be based solely on this premise of the "social contract." It does, however, have two main draw backs.

1) It precludes the need for a founding. If you take the Hobbesian teaching to its extreme, all one needs to do to form civil society it get people in a room and hatch out a contract. Nowhere is there any mention in Hobbes' account for the need of a "founding," in the classical sense
2) It relies solely on a utilitarian or self-interested theory of government. While this theory has its advantages it also has its limitations. The drawback here is that if people rely solely on self-interest, their consent will always contain a "but not in this case" clause. For instance, if the goal of the regime is self-preservation, why should I lay down my life for the sake of my country? This in and of itself shows the drawback of the Hobbesian thesis.

After the Articles of Confederation were in operation for a number of years, a number of founders recognized this flaw in the social compact theory and saught a solution. Their solution was published in the Federalist Papers (Madison, Hamilton, and Jay) and contains the following premise

1) A founding is necessary to a republican regime. You cannot rely solely on enlightened self-interest
2) The union needs perpetual upkeeping. It will not survive on its own without the proper mechanisms and people.

To solve this problem, the authors of the Federalist went back to the classical understanding of "founding" and to the thought of Montesque. Their solution was a constitution that was to be revered and a separation of powers doctrine that would keep the federal governemnt from ovvereaching.

Thus, to call the American founding completely Lockean or completely modern is missing the bigger picture. While the American founding contains many Lockean elements, it also recognises the limits and the drawbacks of Locke's thesis.


NRO's economic fallacy

Mark Krikorian, from National Review online, made the following statement:

Kerry's call Friday for increasing the federal minimum wage to $7 brought to mind last week's Pew Hispanic Center's report, which found that nearly three in 10 new jobs have gone to non-citizens. Conservatives have always objected to minimum wage hikes, raising the specter of widespread unemployment of low-skill workers who aren't productive enough to make it worth paying them the higher wage. But many of the same opponents of the minimum wage also tell us that we need to have immigrants because the economy is creating low-wage jobs that Americans don't want. The logic is circular -- we mustn't eliminate low-skill jobs by raising the minimum wage, but we have to import foreign labor to fill the low-wage jobs that the economy is creating.

This statement is wrong. Lets get to the heart of the matter

1) The minimum wage laws will increase unemployment among unskilled workers...good
2) Lower wage jobs tend to go to more immigrants because they cannot command high wage jobs in the economy...good
3)Therefore, we should clamp down on immigration because it would increase the price of non-skilled jobs...ummmmm no

That's nonsense pure and simple!

If you clamp down on immigration and the wage rates of unskilled labor raises, you are increasing the opportunity cost of keeping your business here relative to moving it offshore. Eventually, businesses which employ low skilled workers will outsource these jobs, creating the same unemployment that the minimum wage law would do.

This is a fairly simple and elementary mistake to make.

Non Sequitor Economic Thinking

It has come to my attention that there are some out there who are ashamed of our economy. According to their analysis, the countries of Europe have a more "equitable" and "fair" economy. For instance, Europe retains capitalism while providing essential services such as health care and welfare. America, in their opinion, leaves the poor to rot.

This view is greatly mistaken for the following reasons.

1) Europe's welfare state has severely slowed their economic growth. Economists are forecasting Europe to grow at a collective 1.5% while America is forecasted to grow at 4-4.5% (depending on how bad you think the oil situation is). Europe has a much higher rate of natural unemployment than the United States does (8-12% in some countries while the US is at 5-5.5%)

2) WHile Europe has a vast social safety net, that net is becoming almost unaffordable. France and Germany have broken the agreement to keep their budgets balanced within 3% of GDP and are being killed by their social service programs. For instance, France had to get rid of their inflation adjusted living wage law because it is killing the private sector. They are going to let inflation kill it off. Likewise, France had to repeal their 35 hour limit on the work week law because it is likewise destroying private enterprise

3) Health Care in Canada and in many European countries is becoming inefficient. In Canada, the average wait for an MRI or a heart bypass is close to 6 months.

This is not to say that America is perfect or that no reform is needed. But when we do choose to reform sectors of our economy, like the Health care sector, we should do so keeping in mind that we want to improve our system WHILE avoiding the pitfalls of the reforms in Canada, Britain, and to a certain extent Germany.

Why do these people continuing to whine and moan then?....

Because the reforms that would have the best chance at success are market orientated reforms that would vest more control in the people than the government. Their opposition stems from an ideological presupposition against freedom of the individual.


Was Tolkien a socialist?

I just had a discussion over what type of economic system J.R.R. Tolkien adhered to. Some have read and heard that Tolkien fits closest to the socialist economic system, defined as the state controlling the means of production. This intepretation of Tolkien is incorrect.

The most comprehensive study on Tolkien's philosophy was given by Dr. Bradley Birzer of Hillsdale College. If you would like to read the whole article, copy and past this link:


Tolkien hated socialism because socialism held to a degrading, materialistic, and a mechanistic outlook on human nature. It sought to subordinate man to the state and destroy man's God given freedom. The best condemnation of Socialism in the text comes from a conversation between Gandalf and Saruman. The conversation begins when Saruman attempts to enlist Gandalf in his quest to replace Saruman. Saruman argues that since the old world is gone and the middle world is changing, they need the "power" to "order things as we see fit, for the ends that only the wise can see." Gandalf immediately sees through this saying "this sounds like the words of the enemy." For Tolkien, good intentions are not enough to insure a successful outcomes. Tyranny will not bring about human happiness. Socialism, because it is tyrannical, will ultimately degrade man and destroy humanity, whatever its initial desires were. Tolkien has also said in other works that the Dark Lord Sauron originally started off benevolent, only seeking power to make the world a better place. But his need for absolute power eventually corrupted him, turning him into a being consumed by evil.

Tolkien will go down as one of the most important writers of the 20th century. His insights on human nature are so profound as to make his contemporaries seem childish.


Strauss and Machiavelli

One of the interesting things I learned today was over where the break with classical philosophy began. Most people claim that Descarte was the founder of Modern Philosophy, but today it was pointed out that a good case can be made that Machiavelli was actually the one who broke with the classics first.

Leo Strauss points out in the "Three waves of modernity" that Machiavelli was the first to "get there"

Machiavelli is the first one to critize the ancients for "building to high," arguing that the perfect regime of Plato was an impossible fiction. Likewise, he was the first to challenge the notion that the conquest of nature was impossible claiming that it was so long as one follows reason.

This "first wave" of modernity, as Strauss calls it, was completed in the fields of science by Bacon and Descarte and with politics in Hobbes and Locke.

The second wave of modernity began under Rousseau, who rejected the "commercialism" that Hobbes and Locke expounded. In place of this, Rousseau laid down the principles of "historicism," which would later gain their full theoretical justification in Hegal and Kant.

Nietzche and Heidegger bring about the last wave of modernity when they come face to face with the implications of historicism. They righly point out that historicism is nihilistic, offering no grounds for human morality or purpose. Thus life is reduced to the "will to power," where the only question philosophers need to ask is "whose got the power?"

How does Strauss respond to this? He basically argues that pre-modern philosophy was better than modern philosophy, a claim conpletely contrary to modern day conventional wisdom. Machiavelli, Strauss asserts, is attacking a straw man because the ancients never claimed that the perfect city was possible. In fact, Strauss argued that Plato's Republic was a direct refutation of the perfect regime.

Harry Jaffa joined the discussion with pointing out that, in his opinion, there are only two people to understand Machiavelli correctly and to also reject him: Strauss and Shakespheare.

One other point: Jaffa claimed that one can know the "essence" of God but not the "existence" of God. I asked him if he was making a linguistic error, since Aquinas asserts exactly the opposite. He claims that he was not. According to him, it is easy to grasp the concept of God ("reason unaffected by passion") without being able to grasp his existence, a claim that must be a leap of faith (or calculated risk). He finished by saying that he thought he came up with a better "demonstration" of God than Thomas Aquinas, a claim I will have to read more about before I pass judgment. In my opinion, Aquinas' "demonstrations" are self-evident and common sense.


Declaration of Independence

Today was my first official day in the Publius fellowship, which means that the declaration of independence would be on the agenda for the day. One of the interesting things I learned today about the declaration is what the meaning of "self-evident" and "all men are created equal" are.

For the founders, self-evident meant that the proposition they were going to make had intrinsic validity. This means that it could not be denied without saying some sort of contradiction.

The example used in class was the Aristotelian phrase "man is by nature a rational animal." This phrase is self-evident because the predicate "rational animal" is contained within the noun "man." In order to understand what a rational animal is, you need to understand man. Thus it is like saying "A is A." ie (Man is rational animal)

From this premise the founders claimed that all men were created equal (all men are rational animals). Being that they are rational, they are entitled to certain inaleable rights.

The counter-argument to this goes something like this:

Claiming that nature provides us with a code by which to live by is making a category mistake. It is confusing "what is" with "what ought to be". This is the classic is/ought and fact/value distinction that is at the heart of that thing that goes by the name of post-modernism.

But isn't this claim simply absurd. When the post-modernist is telling me that nature provides no rational basis for morality, isn't he telling me to accept an ought (ie, isn't he saying that you ought to conclude by nature that nature provides no rational basis for morality). Tell me if I am wrong, but isn't this a contradiction in terms.

Likewise, the fact/value distinction falls under the same trap. They claim that all the "facts" lead to the conclusion that all values are relative. Well isn't this a violation of the fact/value distinction they are trying to force me to accept.

I think the best (and most concise) answer to this is provided by Ralf McInerny

"A feature of natural law precepts, according to Thomas Aquinas, is that they are self evident (or non-gainsayable). The only defense of them is indirect, by convicting the one denying them of incoherence and inconsistency because he most invoke what he is in the process of denying....

Plato and Aristotle took very seriously the position of Protagoras according to which what is true for me is true for me and what is true for you is true for you. In their different ways, the two giants of Greek philosophy displayed the incoherence of the claim and its reliance for intelligibility on the very principles it would deny."

Book review: Reaction to my paper was generally positive with a lot of good constructive criticism to help improve it. Hopefully I will be able to produce something worthy of merit when all is said and done.

Will post more for tomm



Reagan's economic Legacy

I think this statement by Arnold Kling is fair:

I believe that President Reagan made a positive difference for the economy. However, unlike most analysts, I do not focus on his tax cuts. Instead, I think that Reagan's main contributions were on energy policy, tax reform, and resisting government expansion.

President Reagan's energy policy was to lift price controls and trust the market to take care of OPEC. In doing so, he ignored conventional wisdom at the time. I believe this took even more courage than standing by Paul Volcker, and even today it is difficult to find a politician who appreciates Oil Econ 101.

President Reagan's other big achievement was tax reform -- not the tax cuts of 1981 but the reform of 1986 which flattened the tax structure, eliminated loopholes, and removed some of the disincentive toward saving that plagues our tax system. Unfortunately, the tax system moved in the opposite direction under President Clinton, which is one reason that I believe that Clinton is over-rated on economics.

On the welfare state, President Reagan's record is mixed. He did not touch the "third rail" of Social Security, so he brought about no significant long-term reduction in government's role in the economy. A major examination of Social Security during the Reagan Administration resulted only in a large payroll tax increase that improved the system's financial condition but left its fundamental character unchanged.

However, nearly every other recent President has sought an expansion of the welfare state -- Nixon's enlargement of Social Security, Clinton's attempt at national health care, and George W. Bush's Leave No Educrat Behind and prescription drug benefit programs. So I give Reagan credit for simply holding the line, particularly since unlike George W. Bush, President Reagan had to contend with a Democratic Congress.

I would also add that Reagan's determination to advocate free enterprise went a long way towards making it a credible policy for the long run. Furthermore, while Reagan did not get the overhaul in social security he wanted, he did make the system solvent for a much greater period of time, which gives current and future presidents the opportunity to complete the reforms.


Ronald Reagan and the Cold War

For some reason, some ideologues refuse to give any credit to Ronald Reagan for helping to win the Cold War. While they have a legitimate point that claims that "Reagan won the Cold War" unfairly diminish the roles that other presidents had in prosecuting the war (specifically Truman and Eisenhower), you must give Reagan credit where credit was due.

What Truman and Eisenhower did during the respective presidencies were instrumental in winning the Cold war, there is no doubt about that. But Ronald Reagan ran on the principle that the Soviet Union contained fundamental flaws, was weak because of them, and with enough pressure would collapse under the wait of it.

Some revionist historians make the claim ex post facto that: since the Soviet Union collapsed, that means it would have inevitably collapsed. This formulation is too cute by half. The correct formulation is that Since the Soviet Union collapsed, it must have been possible for it to collapse.

As the scholar on International Relations Michael McFaul notes in response to someone who makes this claim,

No, I disagree because I think just as I said there was an alternative response to SDI back in '83, there was also an alternative response to the crisis that the Soviet Union faced in '85. And Gorbachev chose a strategy of reform that ultimately created the space for it to collapse. I think the Soviet Union could be here today had another set of characters came to power. And that's where Reagan comes in and in a way that I think you put in your book--I think you have some very nice quotes from Reagan. The one where he says we're going to spend them in to history I think is wrong, but the one where he says we're going to roll back communism and we have superior ideas, that part of the story I think gets underplayed because we can measure GDP, it's very difficult to trace ideas. And in my book about the Soviet Union, that's where the ideas that we can be in a different world, those took hold with Gorbachev and with the people of Russia.

I find myself in complete agreement with this ( although I would probably give a little bit more credit to the military buildup). In essence, Reagan pressured the Soviets with the following
1) A strong military buildup coupled with
2) the Reagan doctrine to aid anti-communist insurgents with the assumption that
3) This would pressure the communists into negotiations we would dictate because they
4) could not compete with us economically.

The sum total of the pressure Reagan put on the Soviets forced them into negotiations whereby The Soviet Union was pressured into reforms it could not sustain because of its weakness.

While it is rightly unfair to claim that "Reagan won the Cold War" all by himself, you must give him credit as a brilliant stategic leader who saw and opportunity and acted successfully on it. Because of this, the world owes him a debt of gratitude.

Federalism and Separation of Powers

I recently discovered that there seems to be a confusion between what federalism is and what the separation of powers is. The distinction is simple, but very important to understand.

Federalism is the division of powers between the federal government and the state governments. Federalism (as the founders understood it) means that the federal government retains certain powers (specifically those articulated in Article 1 Section 8 of the Constitution) while the state retains others. For instance, the Federal government has the right to coin money and provide for national defense. The states are forbidden from doing this. On the other hand, Separation of powers is the system of checks and balances put in place within the federal government. Primarily, these checks and balances were put in place to prevent the federal government from overreaching and to make it function smoothly.

Our system puts limitations of these checks and balances (Presidential veto, for instance) but these limitations are in place to service separation of powers, not to override it.


Deficit and Tax Cuts

It took about a day before the Liberals started attacking the Reagan agenda. The one attack that really pissed me off was the following from the respected economist J. Bradford Delong (one of Clinton's economic advisors)

The economic policy the neoconservatives handed him was a disaster: the tax cuts made America a more unequal place, and the deficits slowed economic growth in the 1980s significantly--as even Larry Lindsey's numbers show. The best you can say about social policy is that it was a tremendous waste: a lot of misery could have been prevented had not fears of alienating the base kept the Reagan administration from reacting swiftly and intelligently to the coming of AIDS.

I am sorry, but this is just ridiculuos and totally out of line. Like a typical closed minded individual, he is narrowing his focus and then pronouncing judgments within that narrow range of probing.

He starts his diatribe with an assault on the tax cuts, which is pretty scary when you think about it. Does he really wish to maintain that 70% tax rates on top income earners with no indexing to inflation wasn't a serious problem to be dealt with? Are you kidding me? To martial evidence to support this assertion, I call upon another liberal economist: Paul Krugman.

The tax rate on the top bracket and what we're finding is that if that moves back and forth between 28%-40% which is roughly the range we're talking about, it doesn't seem to matter very much for the economy

Well J, the tax rate in 1980 was 70%, which was a clear market distortion. The other problem you seem to have with Reagan is purely value laden. Reagan believed that government was too big and too overreaching in its purpose. He also believed in a strong stance against the soviets, a policy success you give him very little credit for. Reagan came into office with 3 goals: to lower taxes, to buildup the military to help speed along the demise of the evil empire, and to balance the budget. As the W. Post obituary states, he sacrificed the latter to accomplish the former. The deficit and debt may have significantly increased and it may have adversely impacted growth (the extent of which I do not want to pronounce, since you do not link to any sources), but it was considered a price worth paying to defeat the soviet empire.

In the long term, the deficits did not turn out to be as bad as they seemed at the time. Policy moves by the Bush I administration, the Clinton Administration, and a deadlocked congress helped to balance the budget (through spending decreases and minor tax increases).

The real reason that you do not like Ronald Reagan is that he is a conservative, someone whose philosophy is different from yours. Admit this at the outset and then make your analysis.


David Brooks and Political Parties

David Brooks has an intereting column out today in the NY Times. You can read it here:


His main contention is that people mainly "inherit" their parties either from family or from society. This is true enough. Most people are democrats because their family or town is democratic. A good illustration of this is the famous dictum that: I was born into the Catholic Church and the Democratic Party.

His next major point is that people mold their philosophy to fit their party. People do not choose to be a republican or a democrat because they favor limited government or a strong centralized state, they become a democrat or a republican and then adhere to its principles.

I do not wish to dispute Brooks on this point. But I would like to mention the great benefit that political parties bring to this Republic. It is true that the founders did not anticipate the political parties. Yet it is my contention that political parties fit pretty well within the federalist scheme that Hamilton and Madison articulated in the Federalist Papers. In Federalist 10, Madison states that greatest cure to the diseases of Republican governments is to

The other point of difference is, the greater number of citizens and extent of territory which may be brought within the compass of republican than of democratic government; and it is this circumstance principally which renders factious combinations less to be dreaded in the former than in the latter. The smaller the society, the fewer probably will be the distinct parties and interests composing it; the fewer the distinct parties and interests, the more frequently will a majority be found of the same party; and the smaller the number of individuals composing a majority, and the smaller the compass within which they are placed, the more easily will they concert and execute their plans of oppression. Extend the sphere, and you take in a greater variety of parties and interests; you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens; or if such a common motive exists, it will be more difficult for all who feel it to discover their own strength, and to act in unison with each other. Besides other impediments, it may be remarked that, where there is a consciousness of unjust or dishonorable purposes, communication is always checked by distrust in proportion to the number whose concurrence is necessary.

Madison claims that the problem with Republican forms of governments is faction. Factions are groups, whether a majority or minority that are united by passion or interest against the interests of the rights of the people or the common good. Because republican governments have elections, factions will vote their way into office and distribute benefits accordingly.

In order to get Republican government to work, a cure for the problem of faction has to be found. Madison proposes the following solutions

1) To create a legislative body where the views of the people (factions) must be passed through (Madison later expands on his theory of the legislature to include bicameralism, with one large body and one smaller body to constantly check eachother)

2) To extend the sphere of the republic, making it large.
3) To create free commerce within this large republic to prevent large factions from even forming.

Madison's argument has proven correct. A large commercial republic prevents serious factions from even forming. In smaller countries torn by civil war and despots, there is usually very few commercial opportunities and it is very easy to form a faction. This does not exist in America. We have thousands of different careers and opportunities available to us. Thus, warring factions are prevented from even forming.

But it is here where political parties come into play. The greatest challenge to Madison's formulation came from John Calhoun, who claimed that this formulation would lead to logrolling. If a faction could not gain a majority through honest debate they would attempt to do so through building a coalition. Calhoun is right but he is missing the bigger picture. It is here where the advantage of the 2 party system is seen.

The two political parties are basically loose coalitions of various factions who come together to form a working majority. While the republicans tend to be the party of limited government, there are many smaller factions within this working coalition that disagree on a lot of things: there are libertarians, social conservatives, neoconservatives, business interests, religious interests, etc. Likewise the Democrats are also a loose coalition of people who generally favor a larger government: environmental interests, consumer interests, labor intersts, some religious interests, etc.

In order for either party to gain a working majority, they must elect someone who is not extreme and comes across as fairly moderate. This in and of itself prevents extremism from even forming. It doesn't mean you will never get someone who is decidedly towards one side of the spectrum (LBJ and Ronald Reagan), but it does moderate it. Notice how stable our government has been in the past 100 years. Whenever reform gains a strong sentiment around the world, we always elect someone who is much less extreme than other countries do. Likewise, today, the democratic candidate has to distance himself from the extremists in his party in order to have a chance at gaining a working coalition. John Kerry has to come up with a plan for WINNING the war on terrorism or else he will lose the election.

I know that during this election season there is going to be a lot of yelling and screaming about how the two party system is destroying our way of life. But keep the above in mind whenever someone says it. Then, you can quietly chuckle at them.

Note: I am in no way implying that Brooks disagrees with anything I said. His article merely provided me with an attempt to articulate this view.


Pope Statement

The Pope made the following interesting comment today:

"Rights are at times reduced to self-centered demands: the growth of prostitution and pornography in the name of adult choice, the acceptance of abortion in the name of women's rights, the approval of same sex unions in the name of homosexual rights,"

He said this with regards to current American culture and he couldn't be more correct. In today's culture, everyone is treated as an "autonomous individual" responsible to no one but themselves. When they demand rights, it is always with complete regards to their own self-centered narcissism. Never is the question asked: "What is the life that I as a human should live?"

Those of us who understand the moral depravity of contemporary culture have to figure out a way to overcome this problem. My idea is educational. No one in schools today read Plato, Aristotle, Cicero, or are asked to wrestle with the Political thought of the founding fathers. Rather, they are taught to make as much money and gain as much material possession as they can possibly find. Rarely is it suggested that they should sit back and reflect on life. This much change if America is to resource itself to the country it has the potential to be.

Job Growth

Here are the latest job growth numbers: http://news.myway.com/top/article/id/44113|top|06-04-2004::08:45|reuters.html

It looks like the Fed is going to move sooner rather than later in raising interest rates. This is also probably good new for President Bush as it will deflect criticism from him on the economy (which is very strong right now)

Great Peggy Noonan Thought

Peggy Noonan has always been one of most favorite writers. Here is an outstanding exposition of the hypocrisy of modern leftism:

I want to make sure I understand. If you smoke a cigarette on a beach in modern America you are harming the innocent. If you have a baby scraped from your womb, you are protecting your freedom. If you sell a pack of cigarettes to a 12-year-old boy you can be jailed, fined and sent to Guantanamo Bay with the other killers. If you sell a pack of contraceptives to a 12 year old boy in modern America you are socially responsible citizen.

For reasons that call for an essay of their own, and as we all know, the banners of cigarettes are on and of the left, and the resisters of the banners are on the right. Once the banners of liquor were of the right and its legalizers of the left. The banners of drugs were on the right and the legalizers on the left.

Why did the left change its stance on what it calls personal freedom regarding cigarettes and cigars? What was the logic? And please, if you are on the left, would you answer this question for me? How come the only organ the left insists be chaste is the lung? What is this pulmocentrism? Why are lungs so special? Why can't you endanger your own lungs? Why don't you care as much about livers? Don't the Democrats have a liver lobby?

I don't know guys, why don't you tell me?

Abortion and Andrew Sullivan

The folllowing really annoyed me from Andrew Sullivan:

So allowing women to choose to seek an abortion is now a "hard left" position? And encouraging gay couples to have stable relationships is "hard left"? And being deeply concerned about racism and sexism is "hard left"?

Huh? Sullivan is comparing abortion to being "concerned about racism and sexim." How can you compare the two? The former involves destroying a developing human life (and yes the unborn baby IS a human). The other involves an unreasonable bigoted denial of the dignity of another human being. In fact, one can easily make the point that if one is to be against racism and sexim, then the logical conclusion is that they should also be against abortion.

I know plenty of people who recognize the evil of abortion AND also support many "progressive" causes such as gay marriage. Why does Sullivan feel the need to conflate the various issues?

Harry Potter

I just got back from seeing Harry Potter and the Prisoner of Askaban. I liked it.

Under the new direction of Alfonso Cuoron, the movie "looked" better. Camera angles were interesting and the lighting gave the feeling that you really were inside of a "witches brew." (You know what I mean).

I suspect that some may be dissapointed and find the movie slow. The movie does seem to drag a bit at times, but not enough to hinder my overall enjoyment of it. Emma Thompson who played a crazy fortune teller and Gary Oldman who played the misunderstand Sirius Black gave brilliant performances for their relatively short roles.

Since I am going away next week, I will probably not be seeing a lot of movies. Spiderman 2, however, is one movie that I will try to make an exception for.


Hawkish Kerry

The National Review has an excellent summary on the recent rightward shift John Kerry is taking.


I like this quote:

The end result is that Kerry has ended up selling himself as what John Hillen, director of the Program on National Security at the Foreign Policy Research Institute, calls, "Bush Lite...a set of light, stylistic differences."

This is actually smart on Kerry's part. He is doing exactly what he needs to do, he is moving to the center and attempting to outflank Bush on the war effort. Notice that there is no more "Quagmire" crap coming out of the Democratic leader.

This quote is also good:

"In the long term, a Kerry administration would be not that radically different from the Bush administration," Boot said. "Anyone expecting a different set of core tenets of American foreign policy is going to be inevitably disappointed."

Phhhhhhhhhhhhhhhhhhhhhhhhh to the Anti-liberation activists.

Christianity and Economics

I am reprinting a quote from Professor Bainbridge as it appears on mirrorofjustice.com:

To be sure, Christians are called to a higher standard of behavior than that of fallen man. If the purpose of economic analysis is to predict how people will respond to changes in legal rules, however, can we assume Christian behavior by the masses of a secular and God-less society? No realistic social order can assume “heroic or even consistently virtuous behavior” by its citizens. A realistic social order therefore must be designed around principles that fall short of Christian ideals. In particular, the rules must not be defined in ways that effectively require every citizen to be a practicing Christian. Christian visions of Justice therefore cannot determine the rules of economic order. Instead, legal rules and predictions about human behavior must assume the fallen state of Man, which is precisely what I have tried to suggest Economic Man permits us to do.

This sounds thoroughly Augustinian to me and is something I have always found attractive. For Augustine, the distinction between the city of man and the city of God is a real one. Man, because he is an imperfect creature with original sin, will never be able to attain the City of God on earth absent of God. A similar sentiment is echoed, albiet in a Pagan way, by Sopochiles in Antignone. Creon does not realize the limit of his power (and refuses to submit to natural law) and thus causes a great and terrible tragedy.

When Catholics engage in civil discourse, they must recognize that whatever system man will approve, it will contain flaws and aspects which are undesirable. Democratic Republicanism is a flawed system. Likewise, Capitalism is also flawed. Yet Both are the best systems man has come up with to deal with man qua man, that is man as he exists in his total being, and not some idealistic illusion.

Reforming entitlements

A paper by Laurence Kotlikoff has stimulated my attention. In it, he calls for a massive overhaul of social security and medicare, something that everyone knows needs to be done. To those that deny we need to do something, he posts a chart from the American Enterprise Institute that shows what typs of tax hikes we will need to pay for the entirety of these benefits.

Increase in Federal Income Taxes: 69%
INcrease in Payroll Taxes: 95%
Cut Federal Purchases: 106%
Cut Social Security and Medicare: 45%

The alternative to this is to propose serious reform to these systems, which would include privatising the two systems to disciple costs (but still keep equity).

He is right. But towards the end he notes that he would also repeal the Bush Tax Cuts so as to pay for the other 9 trillion dollars in debt that will be left over (mind you, there is about 50 trillion in debt to cut).

I would probably propose more spending cuts (GET RID OF THE POST OFFICE!), but Bush could use this to his advantage if he is re-elected. He could use income taxes as a bargaining chip to force fundamental reform in the two systems. It may not be enough, but it could help.

I am always for lower taxes, but I realize that if something is not done to fix these programs then I am going to have to pay much higher taxes than I would if we reformed the system now.

If Bush is able to do this, then he can claim the following
1) Weathered a recession
2) a terrorist attack
3) corporate scandal
4) and dealt aggressively with the terrorist threat

Not bad in my estimation.


Cutting spending

I really do believe that many contemporary liberals just do not want to see any cuts in spending. For instance, TNR is having a fit over the idea that the Bush tax cut was a good way to stimulate the economy. Their main argument is that the tax cut could have been designed to help poorer workers such that it could have been temporary and had similar benefits. This would have greatly reduced the long term budget implications of the tax cut.

Perhaps the tax cut could have been designed better, I will concede that point. But there are other reasons a permanent decrease in the tax rates are a good thing. All else being equal, lower tax rates are good for long term economic growth. It is not a coincidence that America grows much faster than European countries: we have lower taxes and less burdensome regulations than they do. The writers at TNR will probably respond that this is flawed because it ignores the long term budget implications of the current tax cut, which will raise interest rates mitigating the effects of the tax cut. This is true. If nothing is done then the budget deficit will eventually drive up interest rates. But for me, this is a call to decrease spending, not for raising taxes. So far Bush has accomplished one half of the agenda, he has cut taxes. Unfortunately, he has not reigned in domestic spending. Spending must be contained and welfare programs must be reformed to fix the long term fiscal solvency of the country.

As I mentioned below, one last retort to this idea is to claim that the government needs to step in and pay for health care insurance. I agree that some sort of government sponsered catastrophic health insurance program needs to be implemented. But this must be coupled with market reforms. A combination of efficient pooling and catastrophic health insurance coverage will go a long way to mitigating this problem. How will we pay for it? Well, for one, we can repeal this prescription drug benefit and redesign it to help the poor and not simply everyone. We can cut wasteful spending that is inefficient and bureacratic. The states should get involved and help out as well. And if this is not enough then we can talk about repealing segments of the tax cut.

But we should not be blind opponents to permanent decreases in the tax rates. Conservatives recognize that welfare, while necessary and useful, is not to be deified and can be dangerous. Furthermore, we know that if money stays in the hands of the politicians, it will be spent. There is no denying this. TNR and conservatives should be having a constructive dialogue on how to compromise on these two divergent political viewpoints.

I guess I am a neoconservative

Neoconservatism is considered uncouth on both the right and the left. The left considers neoconservatives to be warmongering nuts hellbent on taking over the world. Those on the right agree with this conclusion yet also add that neoconservatives are also closet liberals in disguise.

Yet from reading Irving Kristol's "Reflections of a Neoconservative" for my Publius fellowship, I can't help but agree with almost everything he says.

First, he argues that "Neoconservatism...is reformationalist...It tries to reach beyond contemporary liberalism in the way that lal reformations, religious or political, do---by a return to the original sources of liberal vision and liberal energy so as to correct the warped version of liberalism that is today's orthodoxy.

In other words, neoconservatives are those who try and preserve the liberal American society by correcting the defects inherit within it. I always thought this to be my political position. I am interested in trascending contemporary liberalism and correcting where it is wrong and preserving that which is good.

Kristol goes on to lay out several common characteristics inherit to neoconservatism.

1) It is a current of thought provoked by dissillusionment with contemporary liberalism
2) It is a philisophical-political impulse rather than a literary political impulse (ie more realistic than idealistic)
3) Its philisophic roots are to be found mainly in classical---that is premodern--political philosophy. According to Kristol, many neocons respect Leo Strauss, although some consider him to wary of modernity. Neocons tend to admire Aristotle, respect Locke, and distruct Rousseau
4) Neocons don't diefy the liberal order, they just realize that it is the best of all possible alternatives for a fallen world
5) They believe in a primarily market economy as necesseary but not sufficient to a stable secure society
6) Economic growth is vital to the stability of the political order, but it is not a god to be worshipped
7) There exists a conservative welfare state that can be brought into existence that can promote efficiency and equity without falling into the trap that welfare has previousely fallen into
8) Neocons consider family and religion to be vital to a decent society.

I really have nothing else to add, but to merely say that he is dead on in point number 7. For instance, one can support the concept of social security in a way that encourages individual initiative. Likewise, one can also support health care reform without also advocating a single-payer system.

I guess this makes me a neoconservative then.

Permanent vs. Temporary Tax Cuts

As a general rule of thumb, always be skeptical when someone advocates a temporary tax cut. Economic theory states that permanent tax cuts are much more effective than temporary tax cuts. Milton Friedman's consumption hyptothesis states, and has ample evidence to support it, that transitory changes in tax rates have little impact on current fiscal decisions.

With this in mind, I want to fisk one critique from Jonathan Chait. He remarks that:

The first is that, in some cases, you actually get more bang for your buck in the short term with a temporary tax cut than with a permanent one. The most obvious example is a tax cut designed to stimulate business spending. If this tax cut were permanent, then businesses wouldn't bother altering the timing of their spending, since it would make no difference, from a tax standpoint, whether they spent the money now or later. It's only if the tax cut expired in, say, a year that they'd have to move quickly to get their benefits.

Actually, that is not the case. As the American Enterprise Institute puts it:

Short-term investment tax breaks, in contrast, have little effect on decisions to undertake long-term investments, and often waste resources by benefiting investments that were already in the pipeline.

Perhaps the tax cut could have been skewed a bit more towards the middle class. But income taxes are so progressive that if any permanent cut in income taxes was to be undertaken, it was inevitably going to skew towards wealthy Americans.

Denying ideology

Oftentimes when debates over public policy are undertaken, each side fails to reveal the ideology or belief system underlying their particular policy. The following quote from The New Republic is an excellent example of this:

"As Brad DeLong, Peter Orszag, and Bob Greenstein noted in a recent letter to TNR, the revenue loss due to tax cuts over the next 75 years is three times the Social Security deficit during that same period"

Assuming that this statement is true, my response is: so what. Part of the conservative mentality is that the federal government is not going to spend this money as wisely as it should. For instance, conservatives have long argued that there are substantial problems with welfare and that cuts in spending are necessary to mitigate these problems. If the federal government is in control of this money, they will spend it. On the other hand, if the money is in the hands of private enterprise, it will be used to increase long term growth.

Now that does not mean that we should have no welfare, that was never the argument. But the point of fact is that we can reform social security and medicare in such a way so as we can solve the problem without having to repeal the tax cut and give congress more money to waste. Delong does not agree with this philosophy, he is a liberal that believes the government should use this money to create a more proactive welfare system. That is fine, but he should realize that conservatives do not entirely share this philosophy and thus are not as worried about the revenue loss (in fact, it may actually be a good thing!)

One legitimate criticism to this viewpoint is that the federal government does need this money to do an important function that it is currently not doing: providing equitable health care.

My response to this is that we can reform our health care system while also avoiding the perils of a command and control health care system ala Canada. Such a system is bureacratic and inefficient and not something that we need to have in this country.

As an alternative to this, I am interested in hearing more about the idea that Delong himself presents: make catastrophic health insurance mandatory via some sort of government subsidy.


"But now the Kerry campaign has dusted off and brought forward a very clever idea from Brandeis's Stuart Altman to not eliminate but at least diminish the magnitude of these two ways that market-based health-care reforms self-destruct. The idea? Have the government take its task of social insurance seriously, and reinsure private insurers and HMOs: construct a 'premium rebate' pool to pay annual health-care bills over $50,000. This greatly diminishes the cost to insurers and HMOs of covering the really sick. The cost of treating the really sick will then be on the taxpayer rather than on the insurance-purchasing consumer. Insurance rates will fall. And the incentive for the young without many assets to go naked and uninsured will diminish as well."

Bush can adopt something along these lines, it's not really a liberal/conservative issue here.


Liberal academy

Liberal blogger states the following:

Yes, it's true that when you raise the intellectual bar high, as serious universities do, you get fewer right-wing kooks, but that simply doesn't mean there is political indoctrination going on at universities. The fact that the U.S. has moved farther to the right during the same time period when the universities have allegedly moved to the left ought to be taken as empirical confirmation of that point. For other plausible anecdotal evidence, see the discussion here.

He is missing the point. My opinion on the liberal bias in the academy is that it depends on what field one is in. For instance, WHILE the country has been moving to the right in the past 20 years, those departments that deal with majors people use in the real world: like economics, accounting, finance, and to a much lesser extent the sciences have also been moving to the right.

30 years ago economists believed in command and control and strong economic planning, both of which are strong staples of the "liberal" agenda. Today that is no longer the case. The broad consensus among economists is that private property, free enterprise, and free trade are all vital to the economic growth of a country. There are still plenty of liberals in my field. But they are much less radical than other professors (say in philosophy or in "critical studies"). So, in the end, it depends on what he means by "allegedly moved to the left". Those majors that attract liberals, like socialogy and certain segments of philosophy (the post-modernists) for example, remained liberals. Other majors moved with the country. What this professor is seeing is a small rightward shift in the ideology of the campus (liberal minded economists arguing for free trade? AHHHH, he says). Then when someone comes along and says "the academy is very liberal" he screams bloody murder.

(By the way, my political science department had a couple of highly intelligent conservatives. I know there are 2 and I think there are 3 or 4.)

PS-It doesn't help his point that he has to berate his opponents "as right wing kooks" and imply that they are stupid. He is a philosophy professor and should know and avoid an ad hominum when he sees it.