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CBO: Tangled Web of Welfare Programs Creates High Tax Rates on Participants – Article by Charles Hughes

CBO: Tangled Web of Welfare Programs Creates High Tax Rates on Participants – Article by Charles Hughes

The New Renaissance HatCharles Hughes

The dozens of different programs that form our tangled welfare system often impose high effective marginal tax rates that make it harder for low-income people to transition out of these programs and lift of those programs and into the middle class. As the people in these programs enter the workforce, get a promotion, or work more hours, they can lose a significant portion of those earnings through reduced benefits and increased taxes. A new report from the Congressional Budget Office (CBO) illustrates this predicament: many households hovering around the poverty level face steeper effective marginal tax rates than even the highest earners. These prohibitively high tax rates can discourage work and limit their prospects, ultimately making them less likely to escape poverty.

Marginal Tax Rates at the Median and 90th Percentiles by Earnings Group, 2016


Source: Congressional Budget Office, “Effective Marginal Tax Rates for Low- and Moderate-Income Workers in 2016,” November 19, 2015.

Note: Figure created using Tableau. 

CBO’s analysis looks at the range of effective marginal tax rates households face at different levels of income. The median marginal tax rate for households just above the poverty level is almost 34 percent, the highest for any income level. Some households that receive larger benefits or higher state taxes have even higher effective rates: 10 percent of households just above the poverty line face a marginal rate higher than 65 percent. For each additional dollar earned in this range, these households would lose almost two-thirds to taxes or lost benefits. The comparable rate for the highest earners, households above 400 percent of the poverty level, is only 43.4 percent. If anything this analysis might understate how steep the effective marginal rates are for some households. CBO only considers the combined effect of income taxes, payroll taxes, SNAP and ACA exchange subsidies, so households that participate in other programs like TANF or housing assistance could face even higher rates. These results mirror some of Cato’s past work investigating the issues and trade-offs involved with these welfare programs.

The nature of the welfare system contributes to the prevalence of these poverty traps. A House and Ways Human Resources Subcommittee recently held a hearing on issue and released a chart illustrating the complex, labyrinthine nature of the welfare system.

WM-Welfare-Chart-AR-amendment-110215-jpegClick on the image for a full-sized view.

New programs were grafted onto the existing system over time, each intended to address a perceived problem afflicting people in poverty, but they can interact in ways that can deter people from striving to create a better life for their families. That’s part of the reason the status quo system, which the Government Accountability Office estimates spends $742 billion at the federal level each year, has achieved such lackluster results to date.

While these shortcomings would seem to indicate that the welfare system is in need of reform, this tangled web has proved resistant to change. One of the last major reforms happened in 1996, when Temporary Assistance for Needy Families (TANF) replaced Aid to Families with Dependent Children (AFDC). Even that reform only addressed one strand of the dozens that make up our tangled system, so while it might have improved that one aspect the larger flaws with the welfare system as a whole have to some extent continued unabated. Even within this one strand there has been little discussion of reform in the past two decades, TANF hasn’t even been properly reauthorized since the Deficit Reduction Act of 2005, it is usually thrown into short-term continuing resolutions or broader omnibus appropriations acts that do not incorporate any meaningful attempts to address the program’s problems. Absent comprehensive, the flawed current system will continue to fall short even as the government funnels hundreds of billions of dollars into it each year.

If the federal government is going to finance a welfare system, it should foster an environment that encourages work and makes it easier for participants to transition out of these programs as they strive to create a better life. The current system falls far short in that regard and needs comprehensive reforms.

Charles Hughes is a research associate at the Cato Institute, where he focuses on federal budget policy, poverty, entitlement reform, and general economics.  Originally from Texas, Hughes joined Cato in 2011 after graduating from the University of Chicago with degrees in Economics and Public Policy.

This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

Greece Today, America Tomorrow? – Article by Ron Paul

Greece Today, America Tomorrow? – Article by Ron Paul

The New Renaissance HatRon Paul
July 14, 2015

The drama over Greece’s financial crisis continues to dominate the headlines. As this column is being written, a deal may have been reached providing Greece with yet another bailout if the Greek government adopts new “austerity” measures. The deal will allow all sides to brag about how they came together to save the Greek economy and the European Monetary Union. However, this deal is merely a Band-Aid, not a permanent fix to Greece’s problems. So another crisis is inevitable.

The Greek crisis provides a look into what awaits us unless we stop overspending on warfare and welfare and restore a sound monetary system. While most commentators have focused on Greece’s welfare state, much of Greece’s deficit was caused by excessive military spending. Even as its economy collapses and the government makes (minor) cuts in welfare spending, Greece’s military budget remains among the largest in the European Union.

Despite all the handwringing over how the phony sequestration cuts have weakened America’s defenses, the United States military budget remains larger than the combined budgets of the world’s next 15 highest spending militaries. Little, if any, of the military budget is spent defending the American people from foreign threats. Instead, the American government wastes billions of dollars on an imperial foreign policy that makes Americans less safe. America will never get its fiscal house in order until we change our foreign policy and stop wasting trillions on unnecessary and unconstitutional wars.

Excessive military spending is not the sole cause of America’s problems. Like Greece, America suffers from excessive welfare and entitlement spending. Reducing military spending and corporate welfare will allow the government to transition away from the welfare state without hurting those dependent on government programs. Supporting an orderly transition away from the welfare state should not be confused with denying the need to reduce welfare and entitlement spending.

On reason Greece has been forced to seek bailouts from its EU partners is that Greece ceded control over its currency when it joined the European Union. In contrast, the dollar’s status as the world’s reserve currency is the main reason the US has been able to run up huge deficits without suffering a major economic crisis. The need for the Federal Reserve to monetize ever-increasing levels of government spending will eventually create hyperinflation, which will lead to increasing threats to the dollar’s status. China and Russia are already moving away from using the dollar in international transactions. It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.

Despite the clear dangers of staying on our recent course, Congress continues to increase spending. The only real debate between the two parties is over whether we should spend more on welfare or warfare. It is easy to blame the politicians for our current dilemma. But the politicians are responding to demands from the people for greater spending. Too many Americans believe they have a moral right to government support. This entitlement mentally is just as common, if not more so, among the corporate welfare queens of the militarily-industrial complex, the big banks, and the crony capitalists as it is among lower-income Americans.

Congress will only reverse course when a critical mass of people reject the entitlement mentality and understand that the government is incapable of running the world, running our lives, and running the economy. Therefore, those of us who know the truth must spread the ideas of, and grow the movement for, limited government, free markets, sound money, and peace.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Ex-Im Bank is Welfare for the One Percent – Article by Ron Paul

Ex-Im Bank is Welfare for the One Percent – Article by Ron Paul

The New Renaissance Hat
Ron Paul
June 1, 2015

This month Congress will consider whether to renew the charter of the Export-Import Bank (Ex-Im Bank). Ex-Im Bank is a New Deal-era federal program that uses taxpayer funds to subsidize the exports of American businesses. Foreign businesses, including state-owned corporations, also benefit from Ex-Im Bank. One country that has benefited from $1.5 billion of Ex-Im Bank loans is Russia. Venezuela, Pakistan, and China have also benefited from Ex-Im Bank loans.With Ex-Im Bank’s track record of supporting countries that supposedly represent a threat to the US, one might expect neoconservatives, hawkish liberals, and other supporters of foreign intervention to be leading the effort to kill Ex-Im Bank. Yet, in an act of hypocrisy remarkable even by DC standards, many hawkish politicians, journalists, and foreign policy experts oppose ending Ex-Im Bank.

This seeming contradiction may be explained by the fact that Ex-Im Bank’s primary beneficiaries include some of America’s biggest and most politically powerful corporations. Many of Ex-Im Bank’s beneficiaries are also part of the industrial half of the military-industrial complex. These corporations are also major funders of think tanks and publications promoting an interventionist foreign policy.

Ex-Im Bank apologists claim that the bank primarily benefits small business. A look at the facts tells a different story. For example, in fiscal year 2014, 70 percent of the loans guaranteed by Ex-Im Bank’s largest program went to Caterpillar, which is hardly a small business.

Boeing, which is also no one’s idea of a small business, is the leading recipient of Ex-Im Bank aid. In fiscal year 2014 alone, Ex-Im Bank devoted 40 percent of its budget — $8.1 billion — to projects aiding Boeing. No wonder Ex-Im Bank is often called “Boeing’s bank.”

Taking money from working Americans, small businesses, and entrepreneurs to subsidize the exports of large corporations is the most indefensible form of redistribution. Yet many who criticize welfare for the poor on moral and constitutional grounds do not raise any objections to welfare for the rich.

Ex-Im Bank’s supporters claim that ending Ex-Im Bank would deprive Americans of all the jobs and economic growth created by the recipients of Ex-Im Bank aid. This claim is a version of the economic fallacy of that which is not seen. The products exported and the people employed by businesses benefiting from Ex-Im Bank are visible to all. But what is not seen are the products that would have been manufactured, the businesses that would have been started, and the jobs that would have been created had the funds given to Ex-Im Bank been left in the hands of consumers.

Another flawed justification for Ex-Im Bank is that it funds projects that could not attract private sector funding. This is true, but it is actually an argument for shutting down Ex-Im Bank. By funding projects that cannot obtain funding from private investors, Ex-Im Bank causes an inefficient allocation of scarce resources. These inefficiencies distort the market and reduce the average American’s standard of living.

Some Ex-Im Bank supporters claim that Ex-Im Bank promotes free trade. Like all other defenses of Ex-Im Bank, this claim is rooted in economic fallacy. True free trade involves the peaceful, voluntary exchange of goods across borders — not forcing taxpayers to subsidize the exports of politically powerful companies.

Ex-Im Bank distorts the market and reduces the average American’s standard of living in order to increase the power of the federal government and enrich politically powerful corporations. Congress should resist pressure from the crony capitalist lobby and allow Ex-Im Bank’s charter to expire at the end of the month. Shutting down Ex-Im Bank would improve our economy and benefit most Americans. It is time to kick Boeing and all other corporate welfare queens off the dole.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Charity, Compulsion, and Conditionality – Video by G. Stolyarov II

Charity, Compulsion, and Conditionality – Video by G. Stolyarov II

Libertarians’ opposition to coercive redistribution of wealth does not mean that they are opposed to charitable giving that improves people’s lives.

In this video, Mr. Stolyarov analyzes why private charities are more effective in benefiting their intended recipients than programs which involve coercive redistribution of wealth. Paradoxically, it is the extreme conditionality of many coercive welfare programs that leads them to be less effective than the voluntary decisions of diverse individuals and organizations.


– “The Costs of Public Income Redistribution and Private Charity” – James Rolph Edwards – Journal of Libertarian Studies – Summer 2007
In Our Hands: A Plan To Replace The Welfare State (2006) – Book by Charles Murray

The Paradox of Public Assistance – Article by David J. Hebert

The Paradox of Public Assistance – Article by David J. Hebert

The New Renaissance Hat
David J. Hebert
January 26, 2014

Let’s put ideology aside for a moment. One might not think it’s morally or politically justifiable to take from one person in order to help another. But for now, let’s ask another question: Does it help?

A lot of people see the existence of “poverty amid plenty,” wherein a few people have acquired a lot of wealth while the overwhelming majority struggles to make ends meet. The standard call is to provide some means of transferring those resources from the haves to the have-nots, either through a progressive tax policy or via some direct transfer program.

The problem with these policies is obviously not in their stated goals. Who could argue against the desire to help people? Nor is it, entirely, the coercive nature of redistribution. The real problem comes in the ability of welfare advocates to actually reduce poverty in an effective and long-lasting manner.

World Coyne

In his latest book, Doing Bad by Doing Good, Chris Coyne discusses problems with delivering effective humanitarian aid to other countries. Coyne identifies two potential problems: the planner’s problem and the incentive problem.

Briefly, the planner’s problem refers to the impossibility of people outside of a society actually to possess the information required to assist in fostering continued economic development. The incentive problem refers to the idea that the planners may face perverse incentives to go ahead and do something that the planner’s problem suggests is impossible to start with.

These points are all well and good, and should be well received at least by readers of this publication. But I think we can go further to urge that the problems Coyne identifies apply equally to issues related to domestic intervention.


The people who advocate most strongly for poverty relief programs are not, in fact, people who are poor. Rather, they are people who are typically either politicians seeking reelection or wealthy people who have some overwhelming desire to do something (usually they want to get other people to give them money to do something). They are not poor, but rather they simply do not like seeing poor people suffer and feel some desire to help. However, because they are not poor themselves, they have absolutely no idea what it is that poor people actually want.

Do they want shelter, clothing, and food? Yes. Do they want education, hygiene, and employment? Of course. But in what order, how much, and of what type? In a world of scarcity, the answers to these questions are of crucial importance if we are to find ways to help the most people as quickly and effectively as possible. And yet, the answers to these questions are wholly unknowable to outside observers.

Similarly, and perhaps more importantly, the incentive problem that the planners face also applies to domestic intervention. Politicians are people who, just like us, are primarily concerned with helping themselves. Given their position, what is in their interest might sometimes in be the interest of the “general public” (providing genuine public goods, the rule of law, etc.) but as James Buchanan and Gordon Tullock rightfully point out in their groundbreaking book, The Calculus of Consent, this is not guaranteed to be true at all times and in all cases. In fact, it may be the case that as a direct result of political involvement, incentives may direct their behavior in ways that enrich concentrated interests and impoverish poor people even more.

The War on Poverty

One answer is that the disparity might be much, much worse without government intervention—that is, the rich would be even richer and the poor would be even poorer. But another possibility is that the war on poverty directly contributes to a burgeoning underclass. How can we adjudicate between these positions?

On the surface, giving people aid seems like a straightforward proposition. We observe people suffering and then send resources to them to alleviate that suffering. On the other hand, as Buchanan pointed out in 1975, we run into problems in which the aid designed to alleviate poverty actually perpetuates it, creating dependency. This dependency, in turn, means that an increasing number of people derive the majority of their income from aid.

Paid to Be Poor

That some of the poor get most of their income from the government is not to argue that welfare recipients are lazy or don’t wish to work. Rather it suggests that the incentives they face may make them reluctant to accept employment opportunities at offered wages. We can think through this proposition logically: Suppose I offer you $240 per week in financial aid while you are between jobs. You would be receiving that money for zero hours of work per week. Being an honest person, you go out and look for work, eventually finding a job that pays you $8 per hour, or $320 per week working full time. Should you take that job?

On the one hand, you would receive more money by taking that job than you would by accepting the aid. However, economics teaches us the value in thinking at the margin. Doing so reveals that you would only receive an additional $120 per week in exchange for your 40 hours of work. In other words, taking into account your opportunity cost, you would really only be earning $3 per hour! While I certainly cannot speak for everyone, I feel reasonably confident in saying that few people in this country value their time at only $3 per hour. Realizing this, it is no puzzle why people receiving aid tend to stay unemployed for so long. The Cato Institute recently published a study offering evidence of the work versus welfare trade-off, which can be found here.

Politics and Perquisites

Now that we understand why domestic aid programs may lead to the perpetuation of poverty among the poor, we’re ready to discuss how they may lead to the enrichment of the already wealthy. When politicians decide to try to do something about an issue, one of the first things that they do is convene special hearings about the issue. Here, they call upon the testimonies of experts to try to figure out (1) what can be done and then (2) how best to do it.

The problem here is that the very people who are best equipped to detail how to solve the problem will typically explain that they themselves (or the people that they represent) are in fact the best to solve the problem and should be awarded the contract to solve the problem. We see this in government all the time. Take, for example, the company that was placed in charge of rebuilding Iraq after the US invasion in 2006: Halliburton, which was formerly run by then-Vice President Dick Cheney. Is it any wonder why this company was awarded these contracts? Kwame Kilpatrick, when he was mayor of Detroit, would routinely award offices and several perks to his friends and family members. Don’t forget about the legendary William Tweed, better known as “Boss Tweed.” The point here is not that all politicians are corrupt, but that knowing a politician who is in a position to award perks puts you in good stead to be the recipient of largesse. And, of course, if that’s true, you have very good reasons to create incentives for the politician to steer favors in your direction. It is the nature of politics.

What to Do

Evidencing the failure of domestic aid to help combat poverty, Abigail Hall has an excellent article, forthcoming in the Journal of Private Enterprise, detailing the failure of the Appalachian Regional Commission. This line of research might lead one to the sobering conclusion that there is little that can be done to alleviate the suffering of the poor. Nothing could be further from the truth, however.

We can take away a couple of things from this type of work:

1) The limits of what can be directly achieved through political means of alleviating poverty; and

2) The idea that the expansion of opportunity ultimately drives economic growth and helps the poor.

Rather than focusing on giving poor people the resources to live well, we should instead focus on removing the barriers that prevent people from discovering ways to be productive. Doing so would not only provide them with the tools to lift themselves out of poverty, but would also provide the basis of dignity.

David Hebert is a Ph.D. student in economics at George Mason University. His research interests include public finance and property rights.

This article was originally published by The Foundation for Economic Education.
Headed Toward the 11th-Hour Compromise – Article by Ron Paul

Headed Toward the 11th-Hour Compromise – Article by Ron Paul

The New Renaissance Hat
Ron Paul
December 14, 2012

As the year draws to an end, America faces yet another Congressionally manufactured crisis which will likely end in yet another 11th hour compromise, resulting in more federal-government growth touted as “saving” the economy.  While cutting taxes is always a good idea, setting up a ticking time bomb with a sunset provision, as the Bush tax cuts did, is terrible policy.  Congress should have just cut taxes.  But instead, we have a crisis that is sure not to go to waste.

The hysteria surrounding the January 1 deadline for the Budget Control Act’s spending cuts and expiration of the Bush tax cuts seems all too familiar.  Even the language is predictably hysterical: if the federal government reduces planned spending increases by even a tiny amount, the economy will go over a “fiscal cliff.”  This is nonsense.

This rhetoric is based on the belief that federal spending sustains the economy, when in fact the opposite is true.  Every dollar the federal government spends is a dollar taken from consumers, businessmen, or investors. Reducing spending can only help the economy by putting money back in the hands of ordinary Americans.  Politicians who claim to support the free market and the lower and middle class should take this to heart.

The reality is, however, that neither Republicans nor Democrats are serious about cutting spending. Even though U.S. military spending is exponentially larger than any other country and is notorious for its inefficiency and cost overruns, Republicans cannot seem to stomach even one penny of cuts to the Pentagon’s budget.  This is unfortunate, because this is the easiest, most obvious place to start getting spending under control.  The military-industrial complex and unconstitutional overseas military interventions should be the first place we look for budget cuts.

Similarly, Democrats are digging in their heels on not cutting any welfare or entitlement spending and instead propose to fix the deficit by raising taxes on the rich, even though the U.S. Government already has a progressive tax code and the rich already pay more than their fair share. Furthermore, these higher taxes would fall on small-business owners, investors, and entrepreneurs—in other words, the source of economic growth and new jobs!

The truth is that there is no excuse for federal spending being as high as it is, nor for taxes being as high as they are.  Even the God of the Old Testament only asked for 10% as a tithe and offering, and Americans revolted against the King of England for taxes that amounted to less than five percent.  Yet so many people today complain about “loopholes” for the rich that lower their actual tax rate to “only” 13% in some instances.  Even that is a criminal amount to pay for a wasteful, abusive, unconstitutional government.

We are indeed headed to a fiscal cliff and have been long before this latest hysteria cropped up.  But it is not cuts to spending or reduced federal-government “revenue” that will send us over the cliff, it is continued federal-government spending that will.  Until the federal government limits itself to its Constitutionally-mandated role, spending and taxation will remain out of control.

Look for a “bipartisan” compromise in late December, with Republicans giving in to tax increases and settling for phony spending cuts that actually grow the federal government, and Democrats caving on defense cuts in exchange for tax increases.  This is how the federal government has always grown: both sides will sacrifice their pro-liberty, small-government stances in certain areas in order to grow the federal government where they prefer.

Liberty always loses in the 11th hour.

Representative Ron Paul (R – TX), MD, was a three-time Republican candidate for U. S. President. See his Congressional webpage and his official campaign website

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.

Why Mitt Romney Will Not Benefit Liberty – Stolyarov’s Response to Steele – Part 2 – Article by G. Stolyarov II

Why Mitt Romney Will Not Benefit Liberty – Stolyarov’s Response to Steele – Part 2 – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 25, 2012

Here, I continue my exchange with Dr. Charles Steele regarding the 2012 U.S. Presidential election and the question of whether either Barack Obama or Mitt Romney have any merit as candidates or whether one can be preferred to the other. In “The Imperative of Libertarian Rejection of the Two-Party Trap”, I addressed the question of whether it can be morally legitimate to vote for a lesser evil, and concluded that it is not – particularly where a fundamentally dishonest and deceptive ticket such as Romney/Ryan is concerned. (Readers can also see the aforementioned article for a list of links to the previous installments of this exchange.) Here, I respond to Part 2 of Dr. Steele’s previous response: “Romney v. Obama: Tweedledum and Tweedledee?”.

I will first say that I have no intention of defending Barack Obama or claiming that his second term would not be “as bad” as Dr. Steele portrays. Barack Obama has, in many ways, been responsible for a massive growth of the American police and surveillance state, as well as an expansion of militaristic interventionism abroad. His economic policies have, likewise, been highly damaging to liberty and prosperity alike. Drone attacks on innocents, molestation at the airports, an escalating War on Drugs, persecution of whistleblowers, attempts to conflate Wikileaks with crime and terrorism, health-insurance mandates, bailouts and subsidies to political cronies, inflationary monetary policy, reckless deficit-spending fiscal policy, support for draconian “cybersecurity” legislation that would fundamentally curtail Internet freedom and subject billions of individual communications to monitoring by error-prone algorithms, continuing maintenance of CIA torture facilities (a.k.a. “black sites”) abroad, and the “audacity” to insists that the President of the United States has the authority to assassinate any American citizen abroad, or indefinitely detain any American citizen in the United States, based on his mere say-so – all that (and more along similar lines!) has been the legacy of Obama’s first term. I have absolutely no intention of defending Obama – except in cases where the accusations against him are simply factually untrue, or where his administration happens to have stumbled upon a decent and reasonable policy.

One important question to ask is, “Why has Mitt Romney not emphasized virtually any of the above tremendous harms of the Obama administration?” At the Free and Equal Third-Party  Debate, all four of the participants (Gary Johnson, Jill Stein, Rocky Anderson, and Virgil Goode) had scathing criticisms of Obama’s administration in some (or, in the case of Gary Johnson, most) of the areas mentioned above. Ron Paul’s criticisms of Obama were similarly severe, and similarly on target. The perceptive observer, then, is left to wonder why Mitt Romney’s campaign completely ignores the actual harms caused by Obama during his first term and instead focuses on criticisms that are trivial at best or disingenuous and dishonest at worst. Is it, perhaps, that Romney would himself perpetrate the travesties discussed above, and perhaps intensify them? Is it, perhaps, that Romney’s political base actually insists that he attack Obama for not being “tough” enough with regard to certain military engagements and infringements on civil liberties?  (One must remember that Romney himself stated during the Republican debates that he would have signed the indefinite-detention provision of the NDAA. Furthermore, Romney expressed strong support for SOPA and the Protect IP Act before reversing his stance once it became apparent that continued endorsement of these bills would be politically ruinous.)

Rather than defend Obama or contrast him favorably to Romney, I will respond to each of Dr. Steele’s points by following a general theme: that Mitt Romney is cut from the same cloth as Obama policy-wise, and is even worse personality-wise. Obama, for all of his erroneous and dangerous views and actions, at least seems to have an ideological system that he endeavors to realize, however imperfectly and however subject to political maneuvering and backtracking. Romney, on the other hand, seems beholden to no principles. David Javerbaum has aptly characterized Romney as engaging in “quantum politics” – e.g., “Mitt Romney will feel every possible way about an issue until the moment he is asked about it, at which point the many feelings decohere into the single answer most likely to please the asker.”

This, then, can be seen as my response to Dr. Steele’s point regarding the “general vision” of the two candidates. Dr. Steele wrote that “This presidential election is not so much a choice between Mr. Romney and Mr. Obama as it is between two competing visions of the role of government.” I respond that the two parties do not represent competing visions, because the Republicans – by nominating Mitt Romney – have shown that they do not represent any vision whatsoever, or at the very least that their “vision” is a blank to be filled by the expediencies of the day. A left-progressive vision, however erroneous or even dangerous in some respects, is at least relatively predictable – though even many left-progressives (e.g., Rocky Anderson of the Justice Party) are themselves disgusted at the course the Obama administration have taken and strike me as a lot more honest and at least capable of doing good in certain areas (e.g., civil liberties), as compared to either the Democratic or the Republican establishments.

I certainly do not see in Romney/Ryan or the Republican establishment the barest shred of “the view that government is limited by the rights of the individual, and that most of civilization is built by free people acting in the market.” Romney’s incessant ads in Nevada about how he opposes Barack Obama’s “threats” to Social Security and Medicare are a case in point; he is just another establishment campaigner who tells various segments of the electorate what they want to hear, and portrays his rival as a terrible menace. But more importantly, the Republican establishment has shown that it not only cares little for individual rights in theory – but it is ready to trample upon them in practice, through the fraudulent and sometimes violent manner in which supporters of Gary Johnson and Ron Paul were effectively disenfranchised during the nominating process and – at the Republican National Convention – were met with a “rule change” (adopted over the loud objections of the delegates) that will effectively bar grassroots delegate selection in perpetuity. The Republican Party, by preventing even their previously most ardent grassroots supporters from rising to positions of prominence in future elections, has closed itself off from any connection with individuals or the free market. It has become the party of oligarchic elites – the party of crony corporatism and entrenched political favoritism. To be sure, the Republican Party does need its “useful idiots” to mobilize mass fervor against the Democrats and win elections. Hence, the Republican establishment fails to quell xenophobic, theocratic, and racist bigotries (e.g., the oft-repeated claims that Obama is an atheist Muslim who was not born in the United States). Even though the Republican elites are too intelligent to fall for such nonsense themselves, they are too callously manipulative and devoid of principles to discourage sentiments that may be politically useful to them.

Dr. Steele writes that “conservatives are far more skeptical of government than are progressives” – but this refers to a conservative movement that was perhaps of this sort some thirty years ago during the Reagan era (in rhetoric at least), but not at all today. While Dr. Steele asserts that “the Republican Party is the party of skepticism about government”, the Republican Party gave us unprecedented expansions of federal-government power during the George W. Bush era. Indeed, a principal observation regarding  the Obama administration’s deleterious effects for liberty is that Obama has built upon the foundation that George W. Bush created, with few material departures. Today’s Republican Party is a mix of neoconservatism, theoconservatism, crony corporatism, and pop-conservatism. Libertarianism is not a material component of the Republican agenda – other than occasional lip service to libertarians during election years – just to get their vote. Every election season, the Republican Party courts libertarians, and every time it has electoral success, it simply discards any pretense at pursuing even a quasi-libertarian agenda. When was the last time that a Republican victory has brought about any policy shifts in a remotely libertarian direction?  In the face of such repeated bait-and-switch tactics, how many times does it take to learn not to fall for them again? How many times do good libertarians need to be deceived by entrenched political elites who have no intention of diminishing the scope of their power?

Dr. Steele contrasts the Democratic and Republican platforms, but even the shreds of pro-liberty sentiment in the Republican platform were hard-won from the establishment by the tireless activity of Ron Paul’s supporters on various Republican committees. These friends of liberty were faced with procedural manipulations and threats from the establishment for attempting to introduce pro-liberty platform planks, and it is certainly salutary that they succeeded. But they were able to plant a few saplings of liberty into extremely hostile soil. The Republican establishment will never accept libertarians and will try, at every turn, to undo these hard-won gains. Attempting to accommodate the Republican establishment will turn libertarians into mere tools for specific establishment aims – as exemplified by the case of Rand Paul, who was largely ignored by Romney after achieving the useful (to Romney) goal of splitting the Ron Paul movement by endorsing Romney. Rand Paul was merely given a speech at the Republican National Convention – but that was largely it in terms of his “gains” from the endorsement. The liberty movement certainly did not gain even that much, as no policy victories were won by Rand Paul’s action. Another potential approach, that of overruling the establishment and “taking over” the party, has become close to impossible after the National Convention, and so the only reasonable course of action left to libertarians is to abandon any connection to the Republican Party and act entirely outside of its confines.

On the matter of free speech, Dr. Steele writes about the threat of Jim McGovern’s proposed “People’s Rights Amendment”, which would overturn the Supreme Court’s Citizens United decision. While this proposed amendment is certainly problematic, I do not see a direct connection between it and Barack Obama. Certainly, some high-profile Democrats support it, but that is no guarantee that it would pass or that Obama would endorse it if he received a second term. As an analogy, numerous Republicans have voiced support for overturning the Supreme Court’s Roe v. Wade decision on abortion (including through the means of “right to life” Constitutional amendments – and Republican candidates for President have often endorsed this course of action far more vocally than Obama has ever commented on the Citizens United decision. Yet Republicans elected to office are virtually powerless to do anything about Roe v. Wade, due to the vestiges of the separation of powers that remain. There are dire ways in which free speech is being eroded in the United States, but campaign finance is one of the least concerning areas in this respect. I am far more disturbed by the violent suppression of peaceful political protests (e.g., the pepper-spraying incident at University of California Davis in November 2011, for which the University has now offered to generously compensate the victims), as well as the overarching surveillance state which is emerging due to the domestic “War on Terror”. Internet monitoring of the sort contemplated by CISPA and the National Security Agency’s planned data center in Utah would surely have a chilling effect on free expression online. Likewise, the intimidation and harassment that some of Romney’s supporters have directed at supporters of Ron Paul and Gary Johnson certainly are not helping the cause of free speech. As someone who personally experienced such attacks, I would certainly not trust the attackers’ candidate of choice with safeguarding my rights under the First Amendment.

Dr. Steele is also concerned about the purported Democratic opposition to the right to bear arms under the Second Amendment. Yet the right to bear arms is one area in which liberty has actually made progress over the past decade – and this progress has largely been untouched by Obama during his first term in office. While the Democratic platform may call for some restrictions on gun ownership, even this language is mild compared to the rhetoric of the gun-control movement in the 20th century (particularly prior to the decline of crime rates in the 1990s).  Due to Supreme Court decisions such as Heller and concealed-carry laws in various states, widespread gun ownership has been subject to fewer legal restrictions in recent times, coinciding with the continued drop in rates of violent crime. This recognition that liberalization of gun laws did not lead to crime increases, combined with the extreme strength of interest groups such as the National Rifle Association, should keep at bay any attempts to limit Second Amendment rights at the federal level – no matter which party controls the Presidency. The greatest threat to gun-ownership rights remains at the local level, particularly at educational institutions that attempt to impose “gun-free” zones where not even teachers and administrators can bring weapons that could deter potential shooters and immediately disable any who are not deterred.

Regarding PPACA/Obamacare/federal Romneycare, Dr. Steele responds to my argument that Romney would not veto it by stating that “the PPACA is much hated by the Republican base (for that matter the majority of Americans dislike it).  A repeal would be extremely popular.  It’s simply incredible to think that a President Romney would defy his party and practically 100% of his supporters in order to save Barack Obama’s hallmark program. “ Dr. Steele “can’t imagine anything else he could do that would make him more likely to lose the GOP nomination in 2016.” This assumes, however, that the political base matters to Republicans like Romney to any greater extent than as vessels for whipping up sentiment and winning elections. It is much more likely that the Republican Party strategists will rely on the perceived political amnesia of the masses and will hope that the public in 2016 will have forgotten any promises to repeal PPACA. Romney has already anticipated this behavior and publicly backtracked on his promise to repeal PPACA and stated that there are many portions that he would retain. Most likely, the worst part of PPACA – the individual mandate – which Obama initially opposed but was persuaded by politically powerful health insurers to include, will be among the parts that Romney – being the representative of corporate cronyism that he is – will retain. It is true that Romney might support some partial reforms to PPACA, but if the individual mandate remains, then these reforms would amount to a mere reorientation of PPACA in an even more corporatist direction, rather than a repeal or a movement toward a more free-market outcome. Under Romney, there might be fewer requirements and restrictions regarding the behavior of health insurers – but, in the status quo, those mandates and restrictions largely have the effect of partially (and, in the fashion of Mises’s “dynamic of interventionism”, with severe unintended negative consequences) compensating for the pernicious effects of the individual mandate. A Romney-style amended PPACA might simply enable health insurers to exploit their new captive clientele with few limitations or checks.

Dr. Steele writes that “it’s not clear that Romneycare and Obamacare really are the same thing, despite a similar basic framework. The Massachusetts bill signed by Romney was different from that which was implemented.  Romney used his line item veto on a number of the more draconian parts of the bill.  The Democratic legislature overrode these vetoes, and the bill was implemented by a Democratic governor who further altered it.  Furthermore, at the time Romney signed the bill, the situation in Massachusetts insurance markets was far worse than perhaps anywhere else in the United States.  In this context, Romneycare – at least Romney’s version of it – was arguably an improvement over the status quo in Massachusetts.  Thus when Romney argues that the reform might have been right for Massachusetts but not for America in general, he’s not necessarily being disingenuous.”

The best way to determine how similar or different Romneycare is from Obamacare is to consult the economist who designed both, Jonathan Gruber, who recently stated regarding the individual mandates of the two systems in particular, that “They are very similar […] They aren’t the same exact mandate, but they have the same basic structure.” Because the individual mandate is by far the most pernicious part of PPACA, this is enough of a similarity to make Obamacare and Romneycare fundamentally more alike than not. It is also appropriate to consider the statements made by Romney. As is typical with Romney, he vacillates on the matter of whether Obamacare does or does not resemble Romneycare, but he did praise Obama for incorporating elements of Romneycare into PPACA. In April 2012, Romney even explicitly praised the individual mandate! The distinctions that Romney makes are that (1) Romney’s plan was state-based rather than federal (as if he had a choice as Governor of Massachusetts – and besides, bad ideas have to start somewhere, and Massachusetts was Gruber’s training ground), (2) that Romney’s plan did not raise taxes (which is false; Alex Seitz-Wald points out that the penalties for failing to purchase insurance, which the Supreme Court has now ruled to be taxes, were higher under Romneycare), (3) that Romney’s plan did not cut Medicare (again, a defense of the Medicare status quo on Romney’s part), and (4) that Romney’s plan did not include price controls (but Massachusetts does impose price controls now, as Ben Domenech points out – and this may have been Romneycare’s logical evolution).

Dr. Steele also writes regarding the possibility that Obama would appoint “democratic constitutionalist” justices to the Supreme Court, which would result in the spread of “the notion that our Constititutional rights should not be considered “absolute” sense, but rather subject to international norms.” Dr. Steele believes that “Romney is unlikely to draw from this crowd, and far more likely to draw from judges with at least some sympathy for the new federalism.” While I certainly prefer the interpretation which Dr. Steele calls the “new federalism” over “democratic constitutionalism”, I see this particular clash of interpretations as too many steps removed from the outcome of a Presidential election. To be sure, the President may appoint Supreme Court justices, but that is all. How the justices subsequently rule is out of the President’s hands. Indeed, it was the George W. Bush appointee John Roberts who cast the deciding vote to uphold the constitutionality of PPACA’s individual mandate. The 2005 Kelo v. City of New London eminent-domain decision was joined by George H. W. Bush appointee David Souter and Ronald Reagan appointee Anthony Kennedy. And, as I previously pointed out, the Florence v. Board of Chosen Freeholders decision of April 2012 was entirely the doing of the “conservative” bloc (including Anthony Kennedy). If the “new federalism” of these judges considers strip searches without criminal suspicion or material risk posed by the individual being searched to be constitutional, then perhaps it is not that strong of a safeguard of our liberties after all. But largely, my point is that any given Supreme Court justice is too much of an unknown quantity upon appointment for one to be able to make any decisions regarding the appointer on the basis of whom he might potentially, conceivably appoint – that is, if a vacancy appears in the first place and if the Senate would confirm that appointment.

Regarding which candidate is more anti-entrepreneur, Dr. Steele writes that “Mr. Stolyarov suggests that Romney is anti-entrepreneur in practice, but it is small entrepreneurs who are most hurt by regulation.  Large established firms have teams of lawyers and accountants and frequently can benefit from gaming the rules; in practice, Obama is a greater threat to entrepreneurship.” But it is precisely the large established firms that will be explicitly favored by a Romney administration – as evidenced by Romney’s support for the various bailouts and “stimulus” plans of 2008-2009. (Incidentally, it was Romney who said during the first Romney-Obama debate that “You couldn’t have people opening up banks in their — in their garage and making loans.” This is clearly a statement of opposition to small entrepreneurship and an expression of desire to protect entrenched large financial firms from competition by innovative startups.) The only difference between Obama and Romney is that, while Obama supports subsidies to “alternative” businesses (and financial firms), Romney supports subsidies to “traditional” businesses (and financial firms) – combined with a heavy dose of mercantilist protectionism (evidenced by numerous Romney campaign flyers sent out in Nevada about how Obama is allegedly “selling out” the United States to China by endorsing foreign-made products). Romney is the candidate of politically connected Wall Street firms and large banks (who also hedge their bets by donating large amounts of money to the Democratic Party). If he is elected, these entities will be free to continue to enrich themselves at taxpayers’ expense, while socializing their losses. Bailouts and labyrinthine federal rules are key to the continuation of this exploitation of taxpayers by connected financial firms – and Romney is virtually certain to encourage the proliferation of such measures.

Dr. Steele writes that “Romney and Ryan have been willing to put forward the idea that entitlement programs as they exist are unsustainable and must be radically restructured.  Obama assures us this won’t happen.” Yet it is Romney/Ryan whose ads continually denounce Obama for “threatening” Social Security and Medicare and promise that Romney/Ryan will not take those benefits away but will rather “strengthen” those programs. Gary Johnson, when observing the first Romney-Obama debate, repeatedly pointed out that the two candidates were in competition regarding who could make more extravagant promises to preserve Medicare. I agree that the federal entitlement programs are unsustainable, but Romney, like Obama, is happy to argue for their perpetual existence as a way of gaining votes in the short term – at the expense of long-term prudence.

On taxation, Dr. Steele writes that “Obama has stated a clear preference for increases in marginal rates on higher income earners, higher corporate taxes, and an increasing number of tax breaks, this last for purposes of social engineering (a.k.a. buying votes).  Romney has endorsed a reduction in marginal rates and a broadening on the base by eliminating deductions and exemptions.  The latter approach reduces the economic distortions of taxation and also returns it to the purpose of collecting revenue, rather than shaping citizens’ behavior to match politicians’ goals.” While I certainly do not support Obama’s approach (or any tax increases at all), it is not at all clear that Romney’s approach is preferable – especially since, as Dr. Steele acknowledges, we do not know quite what it entails, and Romney keeps contradicting himself regarding its contents. What we do know for certain, though, is that Romney’s planned massive increases to military spending are mathematically irreconcilable with any sensible fiscal policy or any description of Romney’s tax plan. If fiscal responsibility is to be the deciding issue of this election, then Obama might even be preferable to Romney because while Obama’s budget plan aims to increase military spending very slightly, Romney’s plan would lead it to skyrocket. Ultimately, unsustainable foreign entanglements have led to the United States’ budget surplus from the late 1990s turning into a massive deficit. Without significantly curtailing American military spending and engagements abroad, resolving the current fiscal mess is impossible. The Economist points out that, more generally, Romney’s statements are mathematically incoherent, and his tax plan, as publicly presented, would not be able to solve the United States’ fiscal problems without significant tax increases on middle-income-earners.

Dr. Steele concluded his essay with some thoughtful caveats, and I would also like to mention a few of my own, though they cannot be said to arise from any virtues on Romney’s part. First, a Romney victory could galvanize Democrats to behave in a manner more reminiscent of the George W. Bush era, during which many of them actually opposed American foreign entanglements and expressed outrage at violations of civil liberties. As Glenn Greenwald points out, Obama’s election has led many of Obama’s supporters to become blind to the administration’s abuses of civil liberties at home and abroad. Perhaps, if the Democrats again become the party of the opposition, the old civil-liberties sentiments could be revived and strengthened (even if only to be used as a tool of political convenience against the Republicans). Second, Romney and Obama might both be mere figureheads of a larger political establishment: the “bipartisan” consensus – implemented by a federal bureaucracy whose operations do not shift due to a change in leadership, and existing to serve elites whose real power arises from connections and does not depend on particular formal titles. If this is the case, then Obama’s or Romney’s individual presence or influence in office might not amount to much at all. Therefore, the outcomes in terms of policy might be the same irrespective of which one of them wins. Third, interestingly enough, a similar irrelevance might be anticipated if Dr. Steele is correct in stating that “If elections and political processes do anything in this regard [expanding liberty], it will be simply to respond to and formalize advances made by civil society.” In that case, a politician who seeks to retain office would have little choice but to succumb to the pressures of civil society sooner or later, and the party in power does not matter so much, except possibly with regard to the timing and tone of that acquiescence. (An example of this is the recent initially reluctant but subsequently strong expression of support for legalized same-sex marriage by Barack Obama, who originally campaigned against it, but whose hand was essentially forced by the public discourse of the issue.)

Yet, with all this said, I can anticipate one major harm of a Romney victory that might outweigh all possible incidental benefits. That harm is the normalization of lying in American politics. As I discussed above and in Part 1 of my response, Romney is a different breed of politician, in that he does not have a shred of consistency on virtually any issue – and is willing to lie even when lying is not necessary to gain him political advantage. A Romney victory would convey a clear signal to the electorate and to political pundits and strategists that facts do not matter and honesty does not matter in politics. Of course it is true that many politicians today make false promises and selectively portray the truth; Romney is far from the first. But the overt factual falsehoods stated by Romney and Ryan are a different and more egregious sort of lies from the false promises, vague generalities, and dissembling characteristic of more “traditional” American politicians. A Romney victory would complete the transformation of American elections into reality shows with much rhetoric and fanfare, but no substance; it would finalize the disconnect between the basis for the people’s decisions in electing a candidate and the actual policies that candidate implements (based, presumably, on consideration of more reliable and accurate information than the nonsense disseminated on the campaign trail). A Romney victory would cement the unfortunate conviction of many on the political Right in the United States that they are entitled not just to their own opinions, but also to their own facts (which may, in Orwellian fashion, morph into their diametrical opposites based on the political agenda du jour). I am reminded here of Mises’s discussion in Human Action of the errors of polylogism. A Romney victory would create a peculiar sort of “Republican logic” or “conservative logic” that employs “Republican facts” or “conservative facts” that differ from the objective facts which, well, happen to be true. Already, the derision aimed at fact-checking organizations by many on the Right today foreshadows this unfortunate possibility – which would render the entire conservative movement (and any libertarians who ally with it) a historical irrelevancy and laughingstock, but not before it inflicts tremendous human suffering in the manner of virtually every major polylogist movement in history.

This brings me to the last point of discussion with Dr. Steele, the matter (discussed in the comments of my Part 1) of whether the Romney campaign has misrepresented the Obama administration’s approach to work requirements for welfare eligibility. I note that this is a matter on which a wide spectrum of sources are unanimous – including The Washington Post (which leans Republican), ABC News, and NPR. PolitiFact (which also leans rightward) has called the Romney campaign’s statements on this matter “pants on fire” lies.

Dr. Steele writes that “Robert Rector, one of the authors of the original reform act, has given a detailed and careful argument for why he considers the move by Obama’s HHS move a gutting of the requirements.” It seems that Rector actually originated the claim that the HHS memorandum of July 12, 2012, would “gut” welfare reform. This is his blog post of the same day, making that claim. It is clear that, akin to the dynamics of the game of “telephone”, the Romney campaign took Rector’s statements and exaggerated them further to claim that Obama’s administration has already “announced a plan to gut welfare reform by dropping work requirements” – when in fact no such plan has been made,  no waivers of any nature have been requested or granted, and the HHS memorandum specifically cautioned against dropping work requirements. Rector (unlike the Romney campaign) at least provides some details for his interpretation, but it appears to be one remote hypothetical possibility among many, at best, and it is at odds with the explicit statements of the Obama administration that work requirements will not be dropped. Another of the authors of the TANF program, Ron Haskins, stated to NPR that “There’s no plausible scenario under which it [the HHS memorandum] really constitutes a serious attack on welfare reform.” The NPR article perceptively observes: “So why continue beating this drum? Partly because people believe it.” This is a prominent illustration of the cynical and manipulative conduct of the Romney campaign. Facts do not matter to Romney and Ryan; the public appeal of any particular message – even if it is factually false – does.

Dr. Steele also writes that GAO has declared that contrary to what the Obama administration has argued, HHS has overstepped its bounds in this matter and by law must submit the proposed changes to Congress.” Yet the GAO letter does not comment on the practical effects of the HHS’s waiver authority on work requirements. It simply states that the HHS’s attempts to exercise such authority constitute a “rule” under the Administrative Procedures Act, and that this “rule” must be submitted to Congress for its approval. Perhaps it must. Yet this is not, per se, support for the contention that Obama has “gutted” welfare work requirements.

Furthermore, the American Conservative Union article linked by Dr. Steele states that “No state has submitted a waiver request. Nor have any been approved. The GAO report has effectively blocked all Sebelius-led changes to TANF work requirements, but what would have it have done [sic]? The specific changes would vary from state to state, depending on whether a state requests a waiver and whether HHS approves the proposed new methods.“ This is precisely the opposite of the Romney campaign’s contention that the Obama administration “gutted” welfare work requirements. First, no actual waivers have even been granted, so any “gutting” is hypothetical only. Second, if any waivers are to be granted, the specific changes would vary by state and would largely depend on what a particular state requests. Again, it is entirely unwarranted to leap from the ability of a state to request a waiver of certain specific methods to the presupposition that the waiver would entail an elimination of work requirements altogether (which elimination is contrary to federal law in any case).

To conclude, I reiterate my question of why Romney is even emphasizing this non-issue so strongly – when there is a myriad of actual atrocious infringements of liberty by the Obama administration which could be used to legitimately denounce Obama’s first term? The only reason that suggests itself is that Romney would commit more of the same infringements, and any differences with Obama are superficial only.

Illiberal Belief #5: Charity Must Be Enforced – Article by Bradley Doucet

Illiberal Belief #5: Charity Must Be Enforced – Article by Bradley Doucet

The New Renaissance Hat
Bradley Doucet
October 13, 2012
Some people feel that charity must be enforced and administered through government welfare programs because private charity would not suffice to meet the needs of the destitute and desperate. If people are not forced to give up half of their salaries to ensure a caring society, then they won’t do it and we will be left with a dog-eat-dog world in which the needy are left to suffer and die in the streets.It is undoubtedly true that very few people would give up anywhere in the neighbourhood of half of their earnings if they were not forced to do so. What is not true is that society as we know it would crumble as a result. Instead, it would flourish. Allowing people to keep more (dare we dream: all?) of their earnings would be a great incentive for people to work harder, because the extra effort would be fully rewarded. On the flipside, knowing that they will not be automatically taken care of is a great incentive for the unemployed who are able but unwilling to work to get off their butts already. As for those recipients of welfare programs who are truly unable to care for themselves, they would be able to rely on the voluntary charity of a society that will be even wealthier than the one we have right now and whose productive members will not feel that they “already gave at the office” to the tune of half of their earnings. There is simply no grounds for believing that the bulk of humanity is so uncaring as to let the truly needy suffer and die when helping them is readily within their reach.

Bradley Doucet is Le Quebecois Libré‘s English Editor. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also writes for The New Individualist, an Objectivist magazine published by The Atlas Society, and sings.
Review of Mark Krikorian’s “The New Case Against Immigration: Both Legal and Illegal” – Article by Daniel Griswold

Review of Mark Krikorian’s “The New Case Against Immigration: Both Legal and Illegal” – Article by Daniel Griswold

The New Renaissance Hat
Daniel Griswold
August 3, 2012
Published by: Sentinel • Year: 2008 • Price: $25.95 hardcover and e-book • Pages: 304

In his new book Mark Krikorian of the Center for Immigration Studies argues that immigration may have been good for America a century ago but not today—not because the immigrants have changed but because our nation has changed.

That’s an interesting thesis, but as the book unfolds, the arguments sound more and more familiar. Krikorian argues that immigrants at current numbers can’t be assimilated and that “mass immigration” jeopardizes national sovereignty and security, our quality of life, our jobs, wages, and wallets.

Despite his avowed goodwill toward immigrants, Krikorian’s book is a polemic written to paint immigration in the worst possible light. The word immigration hardly ever appears without the modifier “mass” before it, even though the immigration rate today is far lower than a century ago. He dismisses efforts in Congress to legalize low-skilled immigration as “amnesty” legislation, even though the proposals would have imposed fines, probation, and security checks. He also ignores important findings in the immigration literature for the sake of advancing his argument.

Krikorian’s worries about assimilation are nothing new and carry no more weight today than similar worries about the Italians, Poles, Irish, and Germans in past eras. Government promotion of multiculturalism and bilingual education don’t help assimilation, but they are not the insurmountable hurdles that Krikorian paints: Studies show second- and third-generation immigrants are almost all fluent in English.

The book is at its xenophobic worst in the chapters on sovereignty and security. Krikorian warns that “Mexico City is moving to being, in effect, a second federal government that American mayors and governors must answer to . . . becoming a permanent participant in the day-to-day business of governance, [exercising] joint dominion” over American territory. As evidence for “this assault on American sovereignty” he mostly just musters quotes from Mexican officials urging the U.S. government to reform its immigration system.

That’s only the beginning. While just about everybody recognizes that radical Islam is the most likely source of future terrorist activity against the United States, Krikorian is eager to bring every immigrant group under equal suspicion. In a section titled “Future Wars,” the author manages to slander millions of normal, peaceful, hardworking immigrants from China, Korea, and Colombia. “Though the nearly 700,000 Korean immigrants here came from South Korea, there can be little doubt that the Communist regime in the north has a network of agents already in place among them,” he writes, casting unwarranted suspicion on the corner grocer in Brooklyn and the worshippers at the Korean Central Presbyterian Church down the road from where I live in northern Virginia. In the same vein, Krikorian writes, “War with China is by no means a certainty, but it is clearly possible, and the nearly 1.9 million Chinese immigrants throughout the United States, including a major presence in high-tech industries, represent a deep sea for Beijing’s fish to swim in.” Is this really a valid argument for turning away immigrants such as Taiwan-born Jerry Wang, cofounder of Yahoo!, or Beijing-born Liang Qiao, the Iowa-based coach of the American Olympic gymnast Shawn Johnson?

Turning to jobs and wages, Krikorian sounds like a class-warfare “liberal.” “Mass immigration affects society as a whole by swelling the ranks of the poor, thinning out the middle class, and transferring wealth to the already wealthy,” he asserts. The facts say otherwise. Studies show that immigration benefits the large majority of Americans, not just the wealthy. The middle class has not been thinning out but moving up: The shares of households earning below $35,000 a year and between $35,000 and $100,000 have both declined in the past 20 years as the share earning above $100,000 has grown. Fewer Americans were living under the poverty line in 2006 than in 1994, and the poverty rate has actually been trending down in the past 15 years—a time of robust immigration.

It is true that low-skilled immigrants consume more in government services than they pay in taxes, as Krikorian argues at length. But he dismisses the practicality of limiting access to welfare while glossing over the fact that the average immigrant and his or her descendents generate a sizeable net fiscal surplus for the government.

In the final chapter Krikorian advocates deep cuts in legal immigration and a sweeping crackdown on illegal immigration. Among his preferred coercive tools would be a national database of all U.S. workers, native and immigrant alike; uniform national ID documents; enlisting local law enforcement officers in pursuit of illegal immigrants; and even barring private property owners from renting to people without the right documents.

There are plenty of thoughtful questions to be considered when it comes to the role of immigration in a free, modern, and globally connected society. Unfortunately, this book brings nothing new to the discussion.

Daniel Griswold is director of the Center for Trade Policy Studies at the Cato Institute.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Thoughts on James Sterba’s “Liberty and Welfare” – Article by G. Stolyarov II

Thoughts on James Sterba’s “Liberty and Welfare” – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
April 14, 2012

In “Liberty and Welfare” (2007), James P. Sterba of the University of Notre Dame makes an argument that a libertarian society, grounded in the principle of classical enlightened egoism, would be consistent with a government-organized system of welfare, or redistribution of wealth from wealthier to poorer members of the society. There are some areas where I am in agreement with Sterba’s premises, and some areas of difference.

Sterba’s argument, essentially, is that enlightened self-interest renders it legitimate for a person to take the property of another in certain “conflict situations” – cases where doing so would save that person’s life (or not doing so would endanger that person’s life).  I acknowledge that there may be cases where it is legitimate to violate the property right of another in order to save one’s life – but only to the extent actually necessary to save one’s life and only if proper compensation is made afterward. For instance, suppose Person X is ejected from a burning airplane onto the vast estate of Person Y, a wealthy landowner with plenty of fruit orchards. Person Y is an absentee landowner, and is not able to give permission, and it would take Person X several days on foot to leave Person Y’s land. In my view, Person X can legitimately eat some of Person Y’s fruit so as to survive his journey. However, the proper course of action after Person X has returned to his normal life would be for him to contact Person Y and ask whether Person Y desires to be compensated for the fruit that was taken. There is, at that point, a likelihood that Person Y would be generous and overlook the incident, recognizing Person X’s need to survive. But, if this does not happen, Person X could offer Person Y a reasonable payment for the fruit. It is unlikely that Person Y would, for instance, turn down a payment that is several times the fruit’s market value.

As the loss of life is irreversible, while loss of many kinds of property can be undone through adequate compensation, in true emergency situations, it may be justified for someone else’s property to be put to use in truly saving an individual’s life. But this can only be carried out if confined to true emergencies, if done with minimal interference, and if adequate reparations are made afterward.

That being said, what I am referring to are true emergency situations – which are, by definition, acute events that subside after the cause of the emergency has passed. An ongoing situation where one person or a group of people appropriate the belongings of others without the consent of those others is not a justifiable position within a truly free society. Sterba’s paper borders on implying that there exists some group right for “the poor” to expropriate “the rich” without regard for the circumstances of specific individuals having either of these designations or for whether individuals called “the poor” could, in fact, manage to survive without such expropriation. If there is a way not to take another’s property without his consent and to still preserve human life, then that is the course of action that should be pursued.

Ultimately, Sterba’s argument leads to the support of some manner of redistributionist welfare system. Such a system may indeed be justified in an unfree or semi-free society, where artificial political privileges result in a non-meritocratic distribution of wealth – and where, for instance, inefficient and customer-unfriendly firms can achieve market dominance or incompetent individuals can come to control vast resources. The overall level of wealth in such societies is lower compared to a libertarian society, and there may be many “worthy poor” in such societies, who are poor for none of their fault and despite earnest efforts at improving their position. Indeed, the United States at present, with its massive levels of involuntary unemployment resulting from an economic bubble inflated by the Federal Reserve, could be considered to exist in such conditions. Thinkers such as Sheldon Richman have argued that, in such situations, welfare systems can be seen as secondary or “band-aid” interventions to mask or mitigate some of the harmful effects of the primary interventions (e.g., corporate subsidies, barriers to entry into markets, and laws that limit innovation and progress). While the secondary interventions bring their own unintended negative consequences, a national government that only practiced the primary interventions (which benefit and enrich a favored and politically connected elite) would be much worse in its effects. The only aspects of the secondary interventions that might be justified are those aspects that would undo some of the harms of the primary interventions and more closely approximate a meritocratic, individualistic, market-driven outcome.

I contrast “band-aid” welfare measures in a mixed economy – which could be justified – with redistribution of wealth by a government in an otherwise libertarian society – which would not be justified. Such redistribution of wealth would infringe on the justly earned property of numerous individuals, simply because they belong to some arbitrarily designated category (e.g., “the rich” – as defined by some artificial threshold). In a libertarian society, occasional emergencies might arise whereby one or a few people might legitimately avail themselves of the property of another, but only if they compensate the owner fairly afterward. But, by definition, such emergency treatment cannot apply across the board and as a systematic, ongoing matter. Furthermore, unlike the emergency treatment I described, a welfare system by definition redistributes wealth from some people to others, and does not compensate the people whose wealth has been redistributed. In a fully libertarian society, where all wealth is acquired based on the principles of merit and consent, such redistribution would be unjustified and harmful. It would, further, be unnecessary, as practically all people would be massively more prosperous than the majority of people are in today’s Western societies.