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Ideas Still Matter

At Stumbling on the Truth Cliff Asness points to the opportunities Trump missed at the first debate inBusinessman, Defend Thyself:

Much has been made of “fact checking” this election cycle. Not enough focus has been put on “idea checking.” Unfortunately for free-market conservatives and libertarians, we can’t count on the Republican nominee to articulate why progressive economic ideas are so often so wrong. There were many frustrating examples in the first debate of Donald Trump failing even to challenge Hillary Clinton’s obvious conceptual whoppers. Worse, when Trump did attempt a defense, he often cast free enterprise and business in a negative light. Trump simply can’t—or won’t, because it’s not what he truly believes—combat the falsehoods of progressivism, or honestly and skillfully defend free enterprise and business in general.

Throughout the debate, Clinton advanced numerous “four Pinocchio” economic stories. Trump repeatedly failed to call her on them, or to represent the free market, or even the business community, remotely well. Every time this type of chance is missed, more voters are lost to the falsehoods of ever-bigger government, anti-business hysteria, and class warfare. That we have a Democratic nominee who is overtly hostile to economic liberty is, sadly, not surprising. That we have a Republican nominee who is incapable or unwilling to argue for freedom and the prosperity it brings is something worse.


By being either unable or unwilling to stand up for the ideas of the Constitution or free market capitalism, Trump allowed the bad ideas of Clinton to go unanswered, giving them credence.  This inability to articulate principles and understanding has cost him the support of the thinkers on the right and in the middle, and ultimately the election.

Ideas do matter much more than the populist rhetoric and reality show theatrics.

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Used Car Economics

Kevin Williamson’s Welcome to the Paradise of the Real was written over two years ago and I still refer it to readers.Sneaky Inflation is equal to that piece in bringing sound economic thought to bear on current issues with an engaging style.  Both pieces are in National Review.

An excerpt from Sneaky Inflation:

The interaction between competition and innovation has two parts: Competition is a spur to innovation that produces gains in productivity, and it also is the mechanism by which those gains are passed along to consumers rather than kept by producers in the form of higher profits. Contrary to what you might assume, there is a fair amount of innovation in non-competitive sectors, though a great deal of it consists of simply adapting advances in more competitive sectors to less competitive ones, for example the spread of information technology to university offices. Because higher education is not very competitive (it is dominated by government schools that will lose little if any revenue if a dissatisfied student — which is to say, a customer — decides to go elsewhere), you would expect to see gains in productivity consumed by university administration (in the form of higher salaries, bigger staffs, and larger budgets) rather than passed on to students in the form of lower tuition or to taxpayers in the form of lower subsidies.

The pattern repeats itself with housing, albeit in a more complicated, Rube Goldbergian fashion: The federal government has for decades been ensuring “liquidity” in the mortgage business by buying up securitized mortgages through government-sponsored enterprises such as Fannie Mae and Freddie Mac, indirectly subsidizing mortgage lenders to keep down interest rates, and using a splendid variety of carrots and sticks to keep credit standards as wobbly as Hillary Rodham Clinton on a 77-degree day. That’s the oldest used-car-dealer trick in the book: Don’t let the customer think about the total cost of the purchase, but keep the mark focused on the monthly payment. I once knew a used-car dealer who estimated that he’d made more than $50,000 on one ten-year-old 280Z he’d sold to a dozen different bums and repossessed a dozen times. That’s a fine way to run a used-car dealership, but perhaps not the world’s largest national economy.

Notice: While highly regulated industries such as health care and those with a very large government footprint such as education have seen prices skyrocket, the price of a computer has declined by an average of 18 percent a year since 1990, while the price of a television has dropped by 12 percent a year.

But that’s just technological innovation, right? We say that as though technological innovation were a force of nature, as though it were something that just happened. But that isn’t the case. Without robust competition — meaning real consumer choice, something that is largely absent from education and health care — there is less incentive for innovation, and still less incentive to pass along any savings to consumers.

An excellent article. I strongly recommend  reading in full.

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Redefining Liberty

I attended a Hillsdale College Free Market Forum in Atlanta last week. I was able to meet Don Boudreaux from Café Hayek, one of my daily go to blogs, and Ronald Pestritto, a history professor at Hillsdale.

Ron authored three books on my bookshelf: American Progressivism: a Reader, Woodrow Wilson and the Roots of Modern Liberalism, and Woodrow Wilson: The Essential Political Writings .  They are an excellent window into the origins of the Progressive movement.

In an address on the Principles of the Entitlement State, he spoke of the redefinition of liberty by Franklin Roosevelt in his Commonwealth Club Address in 1932.  FDR spoke of the transition of the United States from its founding due to the settlement of the continent and the industrial revolution.  This is consistent with Woodrow Wilson who found principles embedded in the Constitution to be contingent on the times and unsuitable for modern political life.

The framers saw liberty as a natural right which preceded the government, and that the citizens instituted government to protect those rights.  With liberty perceived to be  threatened by a new economic order FDR sought power for the government to protect individuals from threats to their liberty from sources other than the government such as the powerful business trusts.  Instead of a protector of liberty the government could grant liberties due to its power.  The more power the government had the more liberties it could bestow. This innocent sounding transition from the protector to the grantor of rights was used to justify the growth in power of the government that characterized the Progressive movement.

George Will characterized the Progressive pivot as the point where liberty was superseded by majoritarian democracy in his essay in National Affairs, The Limits of Majority Rule. Pestritto contends that perhaps it is more accurate to say that liberty was redefined by FDR to require the power of the state to do more than protect pre-existing natural rights.

The outcome of a century of growing Federal Power in the name of Progressivism and the evolution of the entitlement and regulatory state allows us to see the dangers of uncontrolled government power and the wisdom of the original principles of limited government power.  Would the original Progressives have approved of the expansion of government to its current size and power?

William Voegeli in Never Enough mirrored Pestritto’s examination of the redefinition of language by FDR:

“According to Sidney Milkis, “FDR’s deft reinterpretation of the American constitutional tradition” gave “legitimacy to progressive principles by embedding them in the language of constitutionalism and interpreting them as an expansion rather than a subversion of the natural rights tradition.” Significantly, FDR conveyed this orientation by enthusiastically embracing “liberalism” as the designation for the New Deal’s philosophy, sending the term “progressivism,” with its clearly implied critique of the American founding, into a long exile. To do so he wrested “liberalism” away from the defenders of limited government, who acceded unhappily to calling themselves “conservatives.”


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The Silver Lining from a Fractured Tea Party

From Erick Erickson at The Resurgent, The Tea Party is Dead. Good Riddance

The tea party began through common cause and it died because too many of its members failed at discernment and, as a result, were betrayed from within and from without only then to grow too angry for anyone to ever want to join their cause except the fringe. One silver lining of the movement was that it found a Republican Party of old white men and left it with younger, more diverse officials. The old white men did not back Allen West, Nikki Haley, Marco Rubio, Ted Cruz, Tim Scott, and others. But the tea party movement did in its early days. Because of the tea party, for the first time since the Civil War, the congressional district wherein Fort Sumter resides had a black congressman and an Indian-American Governor. That congressman is now South Carolina’s Senator and that Governor may be a future Presidential contender. The group portrayed as racist by the media in 2009 and 2010 broadened the color spectrum of the GOP. That is worth remembering.


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Idea Checking

At Stumbling on the Truth Cliff Asness points to the opportunities Trump missed at the first debate in Businessman, Defend Thyself:

The next Clinton statement was truly bizarre. “Trickle down did not work,” she said. “It got us into the mess we were in 2008-2009.” We can all debate “trickle down” economics—including my view that it’s a good marketing line for statists but doesn’t represent what small-government advocates actually propose, or what they think happens when taxes are lowered on everyone, not just the “rich.” But, few think that a main cause of the global financial crisis was the Bush tax cuts. The Left thinks that it was Wall Street and deregulation (mostly they blame Bill Clinton’s deregulation, by the way). The Right thinks that it was too-loose monetary policy and misguided federal housing incentives warping the real-estate market. Let the debate rage on. But few, other than Clinton, seem to believe that the only cause worth citing is “trickle-down economics.” Again, Trump didn’t say a word to clarify (or make her clarify) this bizarre and intentionally divisive political accusation.


I recall how ignorant that statement sounded when she made, but it is still swallowed by the left. As Asness noted in the beginning of his post we need “idea” checking more than “fact” checking.