Month: February 2014

How Libertarians Ought to Think about the Constitution

I’m deeply grateful to Timothy Sandefur for causing me to change my mind about the constitutionality of secession. I used to believe that secession is permissible under the Constitution, and that the forcible suppression of an attempt to secede doesn’t negate the right to secede (see this and this, for example). I still believe that secession is permissible, but for a wholly different reason, to which I’ll come in due course.

My story begins with a post at Sandefur’s blog, Freespace, in which he writes:

[I] once believed that secession was legally justified. I thought slavery was evil, of course; that much is obvious. But I had read the Kentucky Resolutions, and that persuaded me that the Constitution is basically a treaty among sovereign states, who retain the right to leave the union if they want. It’s like a club, right? If you’re in a club, and you decide to leave the club, you should be free to go—even if you choose to do that for an immoral reason, right?

Then I started delving into these issues. I read The Federalist Papers, particularly number 15. I read Lincoln’s July 4, 1861, address to Congress. I read the Lincoln-Douglas Debates. I read Calhoun’s speeches and Douglass’ speeches and the Webster-Hayne debate. I read John Marshall’s decisions. I read Madison, and especially the debate between Madison and Henry at Richmond. And I read the arguments of other scholars—Jaffa, McCoy, Banning, Amar, Farber. These things changed my mind. Turns out it’s not a club. And it turns out slavery can’t be considered a separate question. (“P.S.: A word to my libertarian friends who think secession is constitutional,” Freespace, January 28, 2014)

The last link in the quoted text points to a piece by Sandefur that appeared in Reason Papers several years ago: “How Libertarians Ought to Think about the U.S. Civil War” (Vol. 28, Spring 2006, pp. 61-83). There, Sandefur quotes several writers who had a hand in the drafting and ratification of the Constitution (James Madison, James Wilson, Alexander Hamilton, and John Marshall), and says this:

These sources reveal how well understood was the central fact that the Constitution was a government of the whole people of the United States, not a league or treaty of states in their corporate capacities, as the compact theory would have it. Contrary to Calhoun’s later claim that “the States, when they formed and ratified the Constitution, were distinct, independent, and sovereign communities,”30 the reality is that, in Marshall’s words, federal sovereignty

proceeds directly from the people; is ‘ordained and established’ in the name of the people. . . . It required not the affirmance, and could not be negatived, by the State governments. The constitution, when thus adopted, was of complete obligation, and bound the State sovereignties. . . . The government of the Union, then . . . is, emphatically, and truly, a government of the people. In form and in substance it emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefit . . . . [T]he government of the Union, though limited in its powers, is supreme within its sphere of action.31

… The federal government is directly vested with sovereignty of the whole people of the United States. Secession is not, therefore, like a person who chooses to cancel his membership in a club—because the states are not in the “club” to begin with. Only “We the People” are members of the federal club, and only the “people” which created it can change it, by altering the contours of that “people” through amendment, or a new Constitutional Convention. So, while the whole people may allow a state out of the union, or may even dissolve the Constitution entirely, a state cannot claim on its own the authority to withdraw from the union. Lincoln put it with dry understatement when he noted that advocates of secession were “not partial to that power which made the Constitution, and speaks from the preamble, calling itself ‘We, the People.’”33

These sources reveal that in 1787, both the Federalists and Anti-Federalists recognized that the U. S. Constitution was just that—a constitution for a nation, not a league of sovereign states. And, if these sources are not enough, as Akhil Reed Amar points out, “no major proponent of the Constitution sought to win over states’ rightists by conceding that states could unilaterally nullify or secede in the event of perceived national abuses. The Federalists’ silence is especially impressive because such a concession might have dramatically improved the document’s ratification prospects in several states.”34 “[I]f a more explicit guard against misconstruction was not provided,” wrote Madison in 1831, “it is explained . . . by the entire absence of apprehension that it could be necessary.”35 …

… We have seen that the nature of federal sovereignty under the Constitution makes unilateral secession illegal. Since the Constitution is a law binding the People, and not a league of states, states have no authority to intervene between the people and the national government. If the people of a state wish to leave the union, they may not do so unilaterally, but must obtain the agreement of their fellow citizens—or they must rebel in a legitimate act of revolution. (pp. 70-74, emphasis added)

There’s more, but the quoted passages seem to cover the main points of Sandefur’s case against the constitutionality of secession.

It’s my understanding that the Constitution — if it is law — is not just law, but positive law: “statutory man-made law, as compared to ‘natural law’ which is purportedly based on universally accepted moral principles.” Sandefur’s rejection of secession as a contravention of the Constitution therefore strikes me as odd, inasmuch as Sandefur disdains legal positivism. (Just search his site, and you’ll see.)

This led me to the possibility that the Constitution isn’t “real” law, but just a legal mechanism through which state actors can impose their will on citizens. For enlightenment, I turned to Lysander Spooner, whose The Unconstitutionality of Slavery (1860) is cited in Sandefur’s paper (p. 63). Why would an anarchist and believer in natural law, as Spooner was, care a whit about the authority of the Constitution? After all, Spooner’s No Treason (1867) opens with this:

The Constitution has no inherent authority or obligation. It has no authority or obligation at all, unless as a contract between man and man. And it does not so much as even purport to be a contract between persons now existing. It purports, at most, to be only a contract between persons living eighty years ago. And it can be supposed to have been a contract then only between persons who had already come to years of discretion, so as to be competent to make reasonable and obligatory contracts. Furthermore, we know, historically, that only a small portion even of the people then existing were consulted on the subject, or asked, or permitted to express either their consent or dissent in any formal manner. Those persons, if any, who did give their consent formally, are all dead now. Most of them have been dead forty, fifty, sixty, or seventy years. And the constitution, so far as it was their contract, died with them. They had no natural power or right to make it obligatory upon their children. It is not only plainly impossible, in the nature of things, that they could bind their posterity, but they did not even attempt to bind them. That is to say, the instrument does not purport to be an agreement between any body but “the people” then existing; nor does it, either expressly or impliedly, assert any right, power, or disposition, on their part, to bind anybody but themselves. Let us see. Its language is:

We, the people of the United States (that is, the people then existing in the United States), in order to form a more perfect union, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

It is plain, in the first place, that this language, as an agreement, purports to be only what it at most really was, viz., a contract between the people then existing; and, of necessity, binding, as a contract, only upon those then existing. In the second place, the language neither expresses nor implies that they had any right or power, to bind their “posterity” to live under it. It does not say that their “posterity” will, shall, or must live under it. It only says, in effect, that their hopes and motives in adopting it were that it might prove useful to their posterity, as well as to themselves, by promoting their union, safety, tranquillity, liberty, etc.

Note well Spooner’s description of the Constitution as a contract (i.e., a compact) — entered into by certain persons at a certain time, for certain purposes. This suggests a possibility not entertained in Sandefur’s Reason Papers essay, namely, that the Constitution is neither a compact between States (as sovereign entities) nor a law adopted by “the people,” but a contract entered into by a fraction of the populace that became binding on the whole populace through state power.

I’ll return to that possibility after I explain how Spooner could defer to the very Constitution that he clearly disdained. The answer is found in Chapter II of The Unconstitutionality of Slavery:

Taking it for granted that it has now been shown that no rule of civil conduct, that is inconsistent with the natural rights of men, can be rightfully established by government, or consequently be made obligatory as law, either upon the people, or upon judicial tribunals—let us now proceed to test the legality of slavery by those written constitutions of government, which judicial tribunals actually recognize as authoritative.

In making this examination, however, I shall not insist upon the principle of the preceding chapter, that there can be no law contrary to natural right; but shall admit, for the sake of the argument, that there may be such laws. I shall only claim that in the interpretation of all statutes and constitutions, the ordinary legal rules of interpretation be observed. The most important of these rules, and the one to which it will be necessary constantly to refer, is the one that all language must be construed “strictly” in favor of natural right. The rule is laid down by the Supreme Court of the United States in these words, to wit:

“Where rights are infringed, where fundamental principles are overthrown, where the general system of the laws is departed from, the legislative intention must be expressed with irresistible clearness, to induce a court of justice to suppose a design to effect such objects.” [United States vs. Fisher, 2 Cranch, 390.]

It will probably appear from this examination of the written constitutions, that slavery neither has, nor ever had any constitutional existence in this country; that it has always been a mere abuse, sustained, in the first instance, merely by the common consent of the strongest party, without any law on the subject, and, in the second place, by a few unconstitutional enactments, made in defiance of the plainest provisions of their fundamental law.

Translation: The Constitution is a fact. State actors have the power to enforce it. The text of the Constitution doesn’t authorize slavery. Slavery is against natural law. Therefore, it accords with natural law to enforce the Constitution against slavery.

What is natural law? Here’s Spooner, writing in Chapter I of the Unconstitutionality of Slavery:

The true and general meaning of it, is that natural, permanent, unalterable principle, which governs any particular thing or class of things. The principle is strictly a natural one; and the term applies to every natural principle, whether mental, moral or physical. Thus we speak of the laws of mind; meaning thereby those natural, universal and necessary principles, according to which mind acts, or by which it is governed. We speak too of the moral law; which is merely an universal principle of moral obligation, that arises out of the nature of men, and their relations to each other, and to other things—and is consequently as unalterable as the nature of men. And it is solely because it is unalterable in its nature, and universal in its application, that it is denominated law. If it were changeable, partial or arbitrary, it would be no law. Thus we speak of physical laws; of the laws, for instance, that govern the solar system; of the laws of motion, the laws of gravitation, the laws of light, &c., &c.—Also the laws that govern the vegetable and animal kingdoms, in all their various departments: among which laws may be named, for example, the one that like produces like. Unless the operation of this principle were uniform, universal and necessary, it would be no law.

Law, then, applied to any object or thing whatever, signifies a natural, unalterable, universal principle, governing such object or thing. Any rule, not existing in the nature of things, or that is not permanent, universal and inflexible in its application, is no law, according to any correct definition of the term law.

What, then, is that natural, universal, impartial and inflexible principle, which, under all circumstances, necessarily fixes, determines, defines and governs the civil rights of men? Those rights of person, property, &c., which one human being has, as against other human beings?

I shall define it to be simply the rule, principle, obligation or requirement of natural justice.

This rule, principle, obligation or requirement of natural justice, has its origin in the natural rights of individuals, results necessarily from them, keeps them ever in view as its end and purpose, secures their enjoyment, and forbids their violation. It also secures all those acquisitions of property, privilege and claim, which men have a natural right to make by labor and contract.

Such is the true meaning of the term law, as applied to the civil rights of men.

Spooner goes on and on, but never defines natural law concretely. Natural law, like natural rights, arises from human coexistence, and does not precede it. But Spooner — like most theorists who address natural law and natural rights — treats them as if they were eternal, free-standing Platonic ideals or mysterious essences. Those less inclined to mysticism, like Sandefur, strive vainly to find natural rights in the workings of human evolution. (Aside: Sandefur and I have gone several rounds on the issue of natural rights: here, here, here, here, and here; see also this.)

If there is any kind of natural law, it is the Golden Rule:

I call the Golden Rule a natural law because it’s neither a logical construct (e.g., the “given-if-then” formulation discussed in the preceding post) nor a state-imposed one. Its long history and widespread observance (if only vestigial) suggest that it embodies an understanding that arises from the similar experiences of human beings across time and place. The resulting behavioral convention, the ethic of reciprocity, arises from observations about the effects of one’s behavior on that of others and mutual agreement (tacit or otherwise) to reciprocate preferred behavior, in the service of self-interest and empathy. That is to say, the convention is a consequence of the observed and anticipated benefits of adhering to it.

Is this a recipe for chaotic moral relativism? No. Later, in the post just quoted, I note that there’s a common, cross-national, cross-cultural, and cross-religious interpretation of the Golden Rule which comes down to this:

  • Killing is wrong, except in self-defense. (Capital punishment is just that: punishment. It’s also a deterrent to murder. It isn’t “murder,” muddle-headed defenders of baby-murder to the contrary notwithstanding.)
  • Various kinds of unauthorized “taking” are wrong, including theft (outright and through deception). (This explains popular resistance to government “taking,” especially when it’s done on behalf of private parties. The view that it’s all right to borrow money from a bank and not repay it arises from the mistaken beliefs that (a) it’s not tantamount to theft and (b) it harms no one because banks can “afford it.”)
  • Libel and slander are wrong because they are “takings” by word instead of deed.
  • It is wrong to turn spouse against spouse, child against parent, or friend against friend. (And yet, such things are commonly portrayed in books, films, and plays as if they are normal occurrences, often desirable ones. And it seems to me that reality increasingly mimics “art.”)
  • It is right to be pleasant and kind to others, even under provocation, because “a mild answer breaks wrath: but a harsh word stirs up fury” (Proverbs 15:1).
  • Charity is a virtue, but it should begin at home, where the need is most certain and the good deed is most likely to have its intended effect.

What does all of this mean for secession? Here it is, from the beginning and by the numbers:

1. The Constitution was a contract, but not a contract between “the people.” It was a contract drawn by a small fraction of the populace of twelve States, and put into effect by a small fraction of the populace of nine States. Its purpose, in good part, was to promote the interests of many of the Framers, who cloaked those interests in the glowing rhetoric of the Preamble (“We the People,” etc.). The other four of the original thirteen States could have remained beyond the reach of the Constitution, and would have done so but for the ratifying acts of small fractions of their populations. (With the exception of Texas, formerly a sovereign republic, States later admitted weren’t independent entities, but were carved out of territory controlled by the government of the United States. Figuratively, they were admitted to the union at the point of a gun.)

2. Despite their status as “representatives of the people,” the various fractions of the populace that drafted and ratified the Constitituion had no moral authority to bind all of their peers, and certainly no moral authority to bind future generations. (Representative government is simply an alternative to other types of top-down governance, such as an absolute monarchy or a police state, not a substitute for spontaneous order. At the most, a minimal, “night watchman” state is required for the emergence and preservation of beneficial spontaneous order, wherein social norms enforce the tenets of the Golden Rule.)

3. The Constitution was and is binding only in the way that a debt to a gangster who demands “protection money” is binding. It was and is binding because state actors have the power to enforce it, as they see fit to interpret it. (One need look no further than the very early dispute between Hamilton and Madison about the meaning of the General Welfare Clause for a relevant and crucial example of interpretative differences.)

4. The Constitution contains provisions that can be and sometimes have been applied to advance liberty. But such applications have depended on the aims and whims of those then in positions of power.

5. It is convenient to appeal to the Constitution in the cause of liberty, as Spooner did, but that doesn’t change the fact that the Constitution was not and never will be a law enacted by “the people” of the United States or any State thereof.

6. Any person and any government in the United States may therefore, in principle, reject the statutes, executive orders, and judicial holdings of the United States government (or any government) as non-binding.

7. Secession is one legitimate form of rejection, though the preceding discussion clearly implies that secession by a State government is morally binding only on those who assent to the act of secession.

8. An  act of secession may be put down — through legal process or force of arms — but that doesn’t alter the (limited) legitimacy of the act.

9. Given the preceding, any act of secession is no less legitimate than was the adoption of the Constitution.

10. The legitimacy of an act of secession isn’t colored by its proximate cause, whether that cause is a desire to preserve slavery, or to escape oppressive taxation and regulation by the central government, or to live in a civil society that is governed by the Golden Rule. The proximate cause must be evaluated on its own merits, or lack thereof.

I close by quoting from an earlier post of mine:

[G]overnmental acts and decrees have stealthily expanded and centralized government’s power, and in the process have usurped social norms [the civilizing products of spontaneous order]. The expansion and centralization of power occurred in spite of the specific limits placed on the central government by the original Constitution and the Tenth Amendment. These encroachments on liberty are morally illegitimate because their piecemeal adoption has robbed Americans of voice and mooted the exit option. And so, liberty-loving Americans have discovered — too late, like the proverbial frog in the pot of water — that they are impotent captives in their own land.

Voice is now so muted by “settled law” (e.g., “entitlements,” privileged treatment for some, almost-absolute control of commerce) that there a vanishingly small possibility of restoring constitutional government without violence. Exit is now mainly an option for the extremely wealthy among us. (More power to them.) For the rest of us, there is no realistic escape from illegitimate government-made law, given that the rest of the world (with a few distant exceptions) is similarly corrupt….

Having been subjected to a superficially benign form of slavery by our central government, we must look to civil society and civil disobedience for morally legitimate law….

When government fails to protect civil society — and especially when government destroys it — civil disobedience is in order. If civil disobedience fails, more drastic measures are called for:

When I see the worsening degeneracy in our politicians, our media, our educators, and our intelligentsia, I can’t help wondering if the day may yet come when the only thing that can save this country is a military coup. (Thomas Sowell, writing at National Review Online, May 1, 2007)

In Jefferson’s version,

when wrongs are pressed because it is believed they will be borne, resistance becomes morality.

The Constitution may be a legal fiction, but — as I’ve said — it’s a useful fiction when its promises of liberty can be redeemed.

That’s how this libertarian (conservative) thinks about the Constitution.

Mass (Economic) Hysteria: Income Inequality and Related Themes

It seems as though everyone’s talking and writing about stagnant wages, growing income inequality, gender discrimination in pay, concentration of wealth, no/less/too-little upward mobility, shrinking middle class, foreclosure of opportunity, end of the American Dream, higher mortality rates (due to income inequality), and on and on and on. (Insert exclamation marks to heighten the sense of outrage.)

All of these complaints — which emanate from the left and resound loudly in the media — presuppose the existence of several Platonic ideals; for example: correct wage levels, correct degrees of income and wealth inequality, correct rates of upward (and downward) mobility, an actually identifiable and permanent middle class, a measurable and optimum amount of opportunity, a definition of the American Dream that is more than pablum, and on and on.

All such ideals, of course, exist only in the minds of those who complain about stagnant wages, etc. But no matter — any excuse for further government intervention in the economy will do. And further government intervention will only harm those persons whom it is meant to help, by further reducing the rate of economic growth.

But nothing daunts true believers — Paul Krugman, Brad DeLong, Joseph Stiglitz, and their ilk — who always want government to “do something.” Their preachings bolster the pro-government-spending biases of most pundits and a large fraction of politicians. One aim of the true believers is to shape the fickle mood of the general public and garner support for government action.

Anyway, the various manifestations of economic hysteria listed in the opening paragraph can be met with logic and facts — and often are. (See the list of readings at the bottom of this post.) It’s unlikely that logic and facts will sway those who are emotionally committed to the exaction of redistributive justice, and who have no interest in its infeasibility, high costs, and perverse consequences. But until that lucky day when legitimate government is restored to the United States, its defenders must rely on logic and facts.

Consider income inequality. Not only is there inequality — which should be unsurprising, given inequality of ability, ambition, etc. — but there is supposedly a growing gap between America’s “haves” and “have-nots.” A do-gooder would leave it at that. Not being one of them, I’ll ask the questions that they’re unwilling/afraid/too-jejune to ask:

  1. What is a have? Is it someone/a household whose income exceeds the median for all persons/households? Is in the top 20 percent of all such incomes? The top 5 percent? The top 1 percent? The top 0.1 percent? (Pick your favorite point along the continuous curves in the graphs here.)
  2. Or is a have defined by his/her/its wealth? And, if so, how? (See preceding bullet.)
  3. Do haves “rig the game” so that they are, in effect, stealing from have-nots?
  4. If haves are clever and determined enough to do that, isn’t it likely that they’d still be haves without “rigging the game”?
  5. Is one’s economic status a permanent thing, or do people in fact move up and down the economic ladder during their lifetimes?
  6. Are the have-nots of today — who, mostly, aren’t the have-nots of yesteryear — really worse off than their predecessors, or are they really better off?
  7. Are they worse off relatively?
  8. Will tomorrow’s have-nots be better off if the haves are deprived of income/wealth through redistributive actions taken by government?
  9. Or will redistributive actions simply make haves worse off and less likely to do the things that make have-nots better off (e.g., give huge sums to charity, invest in growth-producing investments)?

Questions 1 and 2 are unanswerable; the distinction between a have and a have-not is purely arbitrary. (It has been said, with some accuracy, that a rich person is someone who has more more money than you.) The answers to the other questions are: (3) only to the extent that some of them are aided by government through perverse regulations favored by do-gooders; (4) yes; (5) not permanent, plenty of movement; (6) better-off absolutely than earlier have-nots; (7) probably about the same, relatively, but they’re mostly different people; (8) worse off; (9) yes, redistributive actions make have-nots worse off by hindering economic growth. (For more, see the list of readings, below.)

Before signing off, I want to say a bit more about haves, have-nots, rigging the game, and hypocritical politicians:

Most of the haves — given their ambition, intelligence, and particular skillswould succeed famously, even without rigging the game in their favor. In any event, government does most of the rigging — mainly to “protect” the have-nots from “ruthless” operators. For example, there’s licensing and regulatory barriers to entry to high-paying professions, such as the creation and trading of financial instruments, doctoring, lawyering, and making licensed, patented drugs. The entire left-leaning entertainment industry thrives on government-granted copyrights

In free markets, there would be no rigging, or it wouldn’t last long because the high profits generated by rigging would entice competition. So, if you want to blame rigging for the advantages enjoyed by the haves, blame their cronies in government, many of whom make a career of crying (all the way to the bank) about inequality. (Relevant aside: It is no coincidence that in 2012, five of the top-six counties in median household income were in the D.C. area.)

Isn’t is strange that most of the pissing and moaning about inequality emanates from people who are either in high-income brackets or whose political rank enables them to live as if they were? (Obama, Biden, and members of Congress, I’m looking at you.) Isn’t it evident that the pissing and moaning results mainly from economic illiteracy, guilt, and political opportunism? It should be evident, unless you’re a complete naïf of the kind who still believes in the tooth fairy and free lunches.

I must add that I have yet to meet a pro-equality “liberal” who pays more taxes than demanded of him by the IRS, opens his house to the homeless, or associates with the unwashed masses. As Victor Davis Hanson observes, there are no (true) socialists among the powerful and affluent lefties who spout egalitarian slogans.

I’ve addressed income inequality and related matters in several posts, including “The Last(?) Word about Income Inequality,” “Taxing the Rich,” “More about Taxing the Rich,” “In Defense of the 1%,” and “Progressive Taxation Is Alive and Well in the U.S. of A,” “How High Should Taxes Be?,” and “Some Inconvenient Facts about Income Inequality.” (See also the links embedded in and appended to those posts.)

There’s much more on the web. The following is a small sample of the vast trove of reasoned, fact-filled writings that leftists ignore because they prefer myths to facts.

Income inequality, wealth inequality, and economic mobility
Diana Furchtgott-Roth, “The Myth of Increasing Income Inequality,” The Manhattan Institute, Issues 2012, March 2012
James Pethokoukis, “Obama’s Fact-Challenged Inequality Speech,” AEIdeas, July 26, 2013
James Pethokoukis, “3 Charts That Show What’s Really Going On with Economic Mobility in the U.S.,” AEIdeas, December 12, 2013
James Pethokoukis, “If All You Know about Income Inequality Is This Famous Chart, You Really Don’t Know Much,” AEIdeas, December 23, 2013
Don Boudreaux, “Questions about and for Those People Obsessed with Income Inequality,” Cafe Hayek, December 24, 2013
Raj Chetty, et al., “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility,” Working Paper 19844, National Bureau of Economic Research, January 2014 (related: N. Gregory Mankiw, “How Much Income Inequality Is Explained by Varying Parental Resources?,” Greg Mankiw’s Blog, January 24, 2014)
John Goodman, “Myths about Inequality,” John Goodman’s Health Policy Blog, January 15, 2014
Thomas Sowell, “Fact-Free Liberals (parts I, II, and III),” creators.com, January 21, 2014
James Pethokoukis, “Does Obama Know That Wealth Inequality Is Lower Now Than 25 Years Ago?,” AEIdeas, January 21, 2014
Ironman, “Debunking Income Inequality Theory,” Political Calculations, January 23, 2014
David Harsanyi, “State of the Union: Maybe You’re Not As Screwed As They Think You Are,” The Federalist, January 27, 2014
David Henderson, “Why Income Mobility Is Larger in the Middle,” EconLog, February 10, 2014
Linda Gorman, “More Accurate Measures Suggest Declining Income Inequality [not that it matters, one way or the other],” John Goodman’s Health Policy Blog, March 14, 2014
Mark R. Rank, “From Rags to Riches to Rags,” The New York Times, April 18, 2014

Executive pay, the “undeserving” rich, and the “1%”
James Pethokoukis, “Stunning New Study Dismantles Obama’s ‘1% vs. 99%’ Inequality Argument,” AEIdeas, August 16, 2013
James Pethokoukis, “Why Steven Kaplan Says Brad DeLong Is Wrong about CEO Pay, the Superstar Theory, and Income Inequality,” AEIdeas, August 19, 2013
James Pethokoukis, “Why the Much-Hyped Oxfam Study on Global Inequality Is Misleading,” AEIdeas, January 21, 2014
Don Boudreaux, “Deidre McClosky on Oxfam’s Calculation of World Wealth ‘Distribution’,” Cafe Hayek, January 27, 2014
Walter E. Williams, “Politics of Hate and Envy,” creators.com, January 29, 2014
Robert J. Samuelson, “Myth-Making about Economic Inequality,” RealClearPolitics, February 3, 2014
N. Gregory Mankiw, “Yes, the Wealthy Can Be Deserving,” The New York Times, February 15, 2014
N. Gregory Mankiw, “CEO’s Are Paid for Performance,” Greg Mankiw’s Blog, February 17, 2014
Mark J. Perry, “‘Rich America Is Not the ‘Idle Rich’, but rather a Working America, an Educated America, and a Married America,” Carpe Diem, February 19, 2014

Rigging the system: “our” government at work
Bruce Yandle, “Bootleggers and Baptists,” Regulation, May/June 1983
Bruce Yandle “Bootleggers and Baptists in Retrospect,” Regulation, Fall 1999
Richard K. Vedder, “Federal Government Has Declared War on Work,” Commentary Articles, The Independent Institute, January 20, 2014

The effect of assortative mating on household income
Henry Harpending, “Class, Caste, and Genes,” West Hunter, January 13, 2012
Henry Harpending and Gregory Cochran, “Assortative Mating, Class, and Caste,” manuscript, December 1, 2013
Jeremy Greenwood et al., “Marry Your Like: Assortative Mating and Income Inequality,” Population Studies Center, University of Pennsylvania, January 12, 2014
Ironman, “In Which We’re Vindicated. Again.,” Political Calculations, January 28, 2014

The non-war on the middle class, women, and blacks
Mark J. Perry, “Yes, the Middle Class Has Been Disappearing, but They Haven’t Fallen into the Lower Class, They’ve Risen into the Upper Class,” Carpe Diem, July 12, 2013
Steve Sailer, “Breakthrough Study: Poor Blacks Tend to Stay Poor, Black,” Vdare.com, July 24, 2013
John B. Taylor, “The Weak Recovery Explains Rising Inequality, Not Vice Versa,” WSJ.com, September 9, 2013
John B. Taylor, “My Take on the Middle-Out View,” Economics One, September 9, 2013
James Bessen, “No, Technology Isn’t Going to Destroy the Middle Class,” The Washington Post, October 21, 2013
Bryan Caplan, “Is Average Over? Two Equivocal Graphs,” EconLog, January 4, 2014
N. Gregory Mankiw, “Does Income Inequality Increase Mortality?,” Greg Mankiw’s Blog, January 29, 2014
Christina Hoff Sommers, “No, Women Don’t Make Less Money Than Men,” The Daily Beast, February 1, 2014

Modern Liberalism as Wishful Thinking

TheFreedictionary.com defines wishful thinking as “the erroneous belief that one’s wishes are in accordance with reality.” There’s a lot of wishful thinking going on, and it’s harmful to liberty and prosperity. I’m referring to the wishful thinking that characterizes modern liberalism, which is more properly called left-statism verging on despotism.

The dysfunctional manifestations of left-statism are too many to enumerate, let alone to detail in a single post. Obamacare is merely a current dysfunctional manifestation. It has many predecessors and will have many successors, unless constitutional government can somehow be restored in the United States. Some of the manifestations take the form of laws, executive decrees, and judicial holdings. Others reflect “big ideas” that give rise to illogical and ill-founded laws, decrees, and holdings.

Without further ado …

REGULATION WORKS

I wrote an entire post about “Regulation as Wishful Thinking.” The underlying theme is that regulators (and those who support regulation) believe that they can fine-tune economic and social behavior to achieve optimal (or at least better) outcomes than the one produced by free markets. If one paragraph sums up the effects of regulation, it’s this one:

Regulation is counterproductive for several reasons. First, it curtails positive externalities [the satisfaction of consumers’ wants that is forgone due to regulatory restraints on market activity]…. The other reasons, on which I expand below, are that regulation cannot be contained to “good causes,” nor can it be tailored to do good without doing harm. These objections might be dismissed as trivial if regulatory overkill were rare and relatively costless, but it is pervasive, extremely costly its own right, and a major contributor to the economic devastation that has been wrought by the regulatory-welfare state.

Read the whole thing for the details of the argument and the evidence of the devastation. For a jarring example, see John Goodman, “FDA Regulations Kill,” John Goodman’s Health Policy Blog, February 18, 2014.

Wish: Regulation improves social and economic outcomes.

Reality: Regulation restricts the ability of people to pursue their lawful interests, and thereby harms them socially and economically.

Bottom line: Regulation is harmful, because it substitutes the judgments of “technocrats” for the decentralized knowledge of millions of citizens. Its economic cost is more than 10 percent of GDP — and it leads to unnecessary loss of life.

TAXES ARE GOOD

Consider the intuitive and also well-documented relationship between taxes and economic activity. See, for example, Christina D. and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,”  Working Paper 13264, National Bureau of Economic Research, July 2007; and William McBride, “What Is the Evidence on Taxes and Growth?,” Tax Foundation, December 18, 2012. One must bend over backward to concoct a theory which says that a rise in taxes will not reduce the rate of economic output or the growth of that rate. But such theories are propounded because their proponents favor higher taxes for two closely related reasons: more taxes enable more government spending, and more government spending usually means “social” spending. (One reason that “liberals” are against defense spending — or more of it — is that it absorbs money that could go into “social” programs.)

Wish: Higher taxes don’t reduce GDP or the rate of economic growth.

Reality: Higher taxes do reduce GDP and the rate of economic growth.

Bottom line: Higher taxes (and more government) actually harm the poor (among others) by reducing economic activity and, thereby, reducing employment. As it turns out, the effect is substantial.

THE MINIMUM WAGE HELPS LOW-SKILL WORKERS

There are economists who support the minimum wage, not necessarily because of the economic soundness of the minimum wage, but because they just like the idea that (some) low-wage workers will make more because of it. Some of those economists have even produced studies which purport to show that a minimum wage has a “small” effect on the employment of low-wage workers. As if “small” were of no consequence to those who are unable to find and keep low-wage jobs because of the minimum wage. Well, the minimum wage — and its more overtly political twin, the “living wage” — do harm low-wage workers. And that’s that. See Linda Gorman, “Minimum Wages,” The Concise Encyclopedia of Economics at The Library of Economics and Liberty. For the latest, see James Pethokoukis, “CBO: The $10.10 Minimum Wage Would Cost 500,000 Jobs, With Most Benefits Going to Non-Poor,” AEIdeas, February 18, 2014.

Wish: Government can help low-skill workers by forcing employers to pay them more.

Reality: Minimum wages and “living wages” result in less employment among low-wage workers.

Bottom line: Those who are in most need of employment, and for whom the private sector would provide employment (other things being the same), are deprived of employment by well-meaning but economically wrong-headed minimum-wage and “living wage” laws.

CAPITAL PUNISHMENT DOESN’T DETER MURDER

What about capital punishment? A paper from 1973, just a year after the U.S. Supreme Court’s decision in Furman v. Georgia effectively outlawed capital punishment, offers an exhaustive statistical analysis of the deterrent effect of capital punishment. See Isaac Ehrlich, “The Deterrent Effect of Capital Punishment: A Question of Life and Death,” Working Paper No. 18, Center for Economic Analysis of Human Institutions, National Bureau of Economic Analysis, November 1973. The author’s conclusion:

[A]n additional execution per year over the period in question [1933-1969] may have resulted, on average, in 7 or 8 fewer murders.

Later:

Previous investigations … have developed evidence used to unequivocally deny the existence of any deterrent or preventive effects of capital punishment. This evidence stems by and large from what amounts to informal tests of the sign of the simple correlation between the legal status of the death penalty and the murder rate across states and over time in a few states. Studies performing these tests have not considered systematically the actual enforcement of the death penalty, which may be a far more important factor affecting offenders’ behavior than the legal status of the penalty. Moreover, these studies have generally ignored other parameters characterizing law enforcement activity against murder, such as the probabilities o± apprehension and conviction, which appear to be systematically related to the probability of punishment by execution.

In my words:

Capital punishment is the capstone of a system of justice that used to work quite well in this country because it was certain and harsh. There must be a hierarchy of certain penalties for crime, and that hierarchy must culminate in the ultimate penalty if criminals and potential criminals are to believe that crime will be punished.

Since the reinstatement of the death penalty in 1976 (Gregg v. Georgia), with restrictions, capital punishment has become less swift and less sure than it had been. There were 1,359 executions in 1976-2013, an average of 36 a year, as against 4,863 in 1930-1972, an average of 113 a year. That is, the rate of executions has dropped by two-thirds from its pre-Furman rate. The drop in the execution rate notwithstanding, the deterrent effect of capital punishment remained strong, at least through 2000. See Hashem Dezhbaksh, Paul Robin, and Joanna Shepherd, “Does capital punishment have a deterrent effect? New evidence from post-moratorium panel data,” American Law and Economics Review 5(2): 344–376 (available in pdf format here. The authors argue that each execution deters eighteen murders, a number that reflects the larger population of the U.S. during the period covered by their analysis. It’s hard to read the two papers cited here and believe that capital punishment doesn’t deter homicide — unless you want to believe it.

Altogether, the more “humane” treatment of murderers since 1976 has cost 600 to 1,400 lives every year, or 23,000 to 53,000 lives in the past 38 years.

Wish: Capital-punishment is nothing more than murder by the state, and (non sequitur) it doesn’t deter murder, anyway.

Reality: Capital punishment is punishment, and when it is administered surely and swiftly it does deter murder.

Bottom line: Perhaps more than 50,000 murders would have been prevented if the rate of executions hadn’t been slowed drastically following the 1972-1976 moratorium on capital punishment.

MORE GUNS MEAN MORE CRIME

There’s a twisted consistency between opposition to capital punishment and support of stringent measures to control the availability of firearms. Both positions tip the scales in favor of predators and away from peaceful citizens.

To favor gun control is to engage in wishful thinking at its best (or worst). Why? Because to favor gun control is to favor the criminal over the law-abiding citizen. But according to wishful thinkers, stringent gun control would lead to a reduction violent crimes. As with the other kinds of wishful thinking addressed here, it just ain’t so.

John Lott‘s More Guns, Less Crime is the elephant in the room, and can’t be ignored. In that book, the article on which it’s based, and other books, Lott argues that allowing adults to own or carry guns leads to a significant reduction in crime. Lott’s work was controversial — some called it incendiary. Not surprisingly, many academics opened fire on it, picking and poking at Lott’s data and methods. I say not surprisingly because — in case it has escaped your attention — academics tend to be (wishful-thinking) leftists.

To save time and space, I fast-forward to a paper by Don B. Kates and Gary Mauser, “Would Banning Firearms Reduce Murder and Suicide?,” first published in Harvard’s Journal of Public Law and Policy (Vol. 30, No. 2, 2007, pp. 649-694). Here are some relevant excerpts:

There are now 40 states where qualified citizens can obtain such a handgun permit.28 As a result, the number of U.S. citizens allowed to carry concealed handguns in shopping malls, on the street, and in their cars has grown to 3.5 million men and women.29 Economists John Lott and David Mustard have suggested that these new laws contributed to the drop in homicide and violent crime rates. Based on 25 years of correlated statistics from all of the more than 3,000 American counties, Lott and Mustard conclude that adoption of these statutes has deterred criminals from confrontation crime and caused murder and violent crime to fall faster in states that adopted this policy than in states that did not.30 (op. cit., p. 658)

Footnote 30 reads, in relevant part:

This conclusion is vehemently rejected by antigun advocates and academics who oppose armed self‐defense. See, e.g., Albert W. Alschuler, Two Guns, Four Guns, Six Guns, More Guns: Does Arming the Public Reduce Crime?, 31 VAL. U. L. REV. 365, 366 (1997); Ian Ayres & John J. Donohue III, Shooting Down the ‘More Guns, Less Crime’ Hypothesis, 55 STAN. L. REV. 1193, 1197 (2003); Dan A. Black & Daniel S. Nagin, Do Right‐to‐Carry Laws Deter Violent Crime?, 27 J. LEGAL STUD. 209, 209 (1998); Franklin Zimring & Gordon Hawkins, Concealed Handguns: The Counterfeit Deterrent, RESPONSIVE COMMUNITY, Spring 1997, at 46; Daniel W. Webster, The Claims That Right‐to‐Carry Laws Reduce Violent Crime Are Unsubstantiated (Johns Hopkins Center for Gun Policy and Research, 1997). Several critics have now replicated Lott’s work using additional or different data, additional control variables, or new or different statistical techniques they deem superior to those Lott used. Interestingly, the replications all confirm Lott’s general conclusions; some even find that Lott underestimated the crime‐reductive effects of allowing good citizens to carry concealed guns. See Jeffrey A. Miron, Violence, Guns, and Drugs: A Cross‐Country Analysis, 44 J.L. & ECON. 615 (2001); David B. Mustard, The Impact of Gun Laws on Police Deaths, 44 J.L. & ECON. 635 (2001); John R. Lott, Jr. & John E. Whitley, Safe‐Storage Gun Laws: Accidental Deaths, Suicides, and Crime, 44 J.L. & ECON. 659 (2001); Thomas B. Marvell, The Impact of Banning Juvenile Gun Possession, 44 J.L. & ECON. 691 (2001); Jeffrey S. Parker, Guns, Crime, and Academics: Some Reflections on the Gun Control Debate, 44 J.L. & ECON. 715 (2001); Bruce L. Benson & Brent D. Mast, Privately Produced General Deterrence, 44 J.L. & ECON. 725 (2001); David E. Olson & Michael D. Maltz, Right‐to‐Carry Concealed Weapon Laws and Homicide in Large U.S. Counties: The Effect on Weapon Types, Victim Characteristics, and Victim‐Offender Relationships, 44 J.L. & ECON. 747 (2001); Florenz Plassmann & T. Nicolaus Tideman, Does the Right to Carry Concealed Handguns Deter Countable Crimes? Only a Count Analysis Can Say, 44 J.L. & ECON. 771 (2001); Carlisle E. Moody, Testing for the Effects of Concealed Weapons Laws: Specification Errors and Robustness, 44 J.L. & ECON. 799 (2001); see also Florenz Plassman & John Whitley, Confirming ‘More Guns, Less Crime,’ 55 STAN. L. REV. 1313, 1316 (2003). In 2003, Lott reiterated and extended his findings, which were subsequently endorsed by three Nobel laureates. See JOHN R. LOTT, JR., THE BIAS AGAINST GUNS (2003). (op. cit., pp. 658-9, emphasis added)

There are so many gems in the article that it is hard to stop quoting it. I should say “read the whole thing,” but I’ll succumb to temptation and quote a few choice passages here, and many more in the note at the bottom of this post (footnote numbers omitted for ease of reading):

[A study by Hans Toch and Alan J. Lizotte shows that] “data on firearms ownership by constabulary area in England,” like data from the United States, show “a negative correlation,” that is, “where firearms are most dense violent crime rates are lowest, and where guns are least dense violent crime rates are highest.” (p. 653)

A second misconception about the relationship between firearms and violence attributes Europe’s generally low homicide rates to stringent gun control. That attribution cannot be accurate since murder in Europe was at an all‐time low before the gun controls were introduced. (p. 653-4)

[T]wo recent studies are pertinent. In 2004, the U.S. National Academy of Sciences released its evaluation from a review of 253 journal articles, 99 books, 43 government publications, and some original empirical research. It failed to identify any gun control that had reduced violent crime, suicide, or gun accidents. The same conclusion was reached in 2003 by the U.S. Centers for Disease Control’s review of then extant studies. (p. 654)

In the late 1990s, England moved from stringent controls to a complete ban of all handguns and many types of long guns. Hundreds of thousands of guns were confiscated from those owners law‐abiding enough to turn them in to authorities. Without suggesting this caused violence, the ban’s ineffectiveness was such that by the year 2000 violent crime had so increased that England and Wales had Europe’s highest violent crime rate, far surpassing even the United States. (p. 655)

[A]doption of state laws permitting millions of qualified citizens to carry guns has not resulted in more murder or violent crime in these states. Rather, adoption of these statutes has been followed by very significant reductions in murder and violence in these states. (p. 659)

[T]he determinants of murder and suicide are basic social, economic, and cultural factors, not the prevalence of some form of deadly mechanism. In this connection, recall that the American jurisdictions which have the highest violent crime rates are precisely those with the most stringent gun controls. (p. 663)

More than 100 million handguns are owned in the United States84 primarily for self‐defense, and 3.5 million people have permits to carry concealed handguns for protection. Recent analysis reveals “a great deal of self‐defensive use of firearms” in the United States, “in fact, more defensive gun uses [by victims] than crimes committed with firearms.” It is little wonder that the

National Institute of Justice surveys among prison inmates find that large percentages report that their fear that a victim might be armed deterred them from confrontation crimes. “[T]he felons most frightened ‘about confronting an armed victim’ were those from states with the greatest relative number of privately owned firearms.” Conversely, robbery
is highest in states that most restrict gun ownership.

Concomitantly, a series of studies by John Lott and his coauthor David Mustard conclude that the issuance of millions of permits to carry concealed handguns is associated with drastic declines in American homicide rates. (p. 671)

Per capita, African‐American murder rates are much higher than the murder rate for whites. If more guns equal more death, and fewer guns equal less, one might assume gun ownership is higher among African‐ Americans than among whites, but in fact African‐ American gun ownership is markedly lower than white gun ownership. (p. 676)

The reason fewer guns among ordinary African‐Americans does not lead to fewer murders is because that paucity does not translate to fewer guns for the aberrant minority who do murder. The correlation of very high murder rates with low gun ownership in African‐American communities simply does not bear out the notion that disarming the populace as a whole will disarm and prevent murder by potential murderers. (p. 678)

In sum, the data for the decades since the end of World War II also fails to bear out the more guns equal more death mantra. The per capita accumulated stock of guns has increased, yet there has been no correspondingly consistent increase in either total violence or gun violence. The evidence is consistent with the hypothesis that gun possession levels have little impact on violence rates. (p. 685)

Wish: Gun-control (or confiscation) will reduce violent crime.

Reality: More guns, no more crime. Crime is a product of underlying social and economic factors that vary from nation to nation, region to region, and socio-economic group to socio-economic group.

Bottom line: The desire to limit or eliminate private ownership of firearms reflects a distaste for weapons and an irrational reaction to relatively rare but horrific instances of gun violence. But the effect of limiting or eliminating private ownership is to disarm law-abiding citizens and encourage crime against them.

THE LIST GOES ON …

If the list of leftist delusions isn’t infinite, it’s certainly very long. For example, there’s wishful thinking about peace, about gender discrimination, about racial equality, about crime, about income inequality, about society, about social welfare, and about the pseudo-scientific religion of global warming.

Why so many delusions? To those who believe — despite the evidence — that persons of the “liberal” (i.e., left-statist) persuasion are smarter or more rational than persons of the right, I commend my own best-selling post, “Intelligence, Personality, Politics, and Happiness,” and two articles by James Lindgren, “Who Fears Science?“and “Who Believes That Astrology Is Scientific?” (The answers may surprise you, though they shouldn’t, now that you’ve read this far.)

To wrap up this long post, I simply urge you to peruse some of my “Favorite Posts,” especially the posts under these headings:

It’s best to start with the newer posts at the bottom of each section, and work up to earlier ones, which often are referenced or incorporated in later posts.

__________
More quotations from “Would Banning Firearms Reduce Murder and Suicide?.”

Since at least 1965, the false assertion that the United States has the industrialized world’s highest murder rate has been an artifact of politically motivated Soviet minimization designed to hide the true homicide rates. Since well before that date, the Soviet Union possessed extremely stringent gun controls that were effectuated by a police state apparatus providing stringent enforcement. So successful was that regime that few Russian civilians now have firearms and very few murders involve them. Yet, manifest success in keeping its people disarmed did not prevent the Soviet Union from having far and away the highest murder rate in the developed world.6 (pp. 650-1)

Luxembourg, where handguns are totally banned and ownership of any kind of gun is minimal, had a murder rate nine times higher than Germany [with 30 guns per 100 persons] in 2002. (p. 652)

[D]espite constant and substantially increasing gun ownership, the United States saw progressive and dramatic reductions in criminal violence in the 1990s. On the other hand, the same time period in the United Kingdom saw a constant and dramatic increase in violent crime to which England’s response was ever‐more drastic gun control including, eventually, banning and confiscating all handguns and many types of long guns. Nevertheless, criminal violence rampantly increased so that by 2000 England surpassed the United States to become one of the developed world’s most violence‐ridden nations. (p. 656)

[V]iolent crime, and homicide in particular, has plummeted in the United States over the past 15 years. The fall in the American crime rate is even more impressive when compared with the rest of the world. In 18 of the 25 countries surveyed by the British Home Office, violent crime increased during the 1990s. This contrast should induce thoughtful people to wonder what happened in those nations, and to question policies based on the notion that introducing increasingly more restrictive firearm ownership laws reduces violent crime. (p. 660)

The “more guns equal more death” mantra seems plausible only when viewed through the rubric that murders mostly involve ordinary people who kill because they have access to a firearm when they get angry. If this were true, murder might well increase where people have ready access to firearms, but the available data provides no such correlation. Nations and areas with more guns per capita do not have higher murder rates than those with fewer guns per capita. (pp. 665-6)

[R]educing gun ownership by the law‐abiding citizenry— the only ones who obey gun laws—does not reduce violence or murder. The result is that high crime nations that ban guns to reduce crime end up having both high crime and stringent gun laws, while it appears that low crime nations that do not significantly restrict guns continue to have low violence rates. (p. 672)

A recent study of all counties in the United States has again demonstrated the lack of relationship between the prevalence of firearms and homicide. (p. 686)

Some Inconvenient Facts about Income Inequality

Follow these three links at Census.gov and you’ll find Table P-28, Educational Attainment—Workers 18 Years Old and Over by Mean Earnings, Age and Sex. (Similar tables are available, but the numbers reported in P-28 are based on a consistent definition of educational attainment.) Drawing on Table P-28, I constructed the following statistics for 1992 and 2012, which are years with similar rates of growth in GDP per capita (2.19 percent and 2.05 percent, respectively):

Employment earnings and 20-year changes in earnings

Men and women are separated because it’s a fact of life that — on average — they don’t earn the same incomes. This isn’t a matter of discrimination, but of differences in education (discipline as well as level of attainment), occupation, experience, and hours worked. (See, for example, “No, Women Don’t Make Less Money Than Men,” The Daily Beast, February 2, 2014.)

Tables 1, 2, 4, and 5 show something that should surprise no one: income rises with age (a proxy for experience) and level of education. This is a key fact that is never mentioned in the usual blather about income inequality. (There is, of course, a drop in real earnings among persons 65 and older, which reflects the fact that most persons in that age bracket have retired or shifted to part-time work.)

Tables 3 and 6 are especially interesting for what they reveal about changes in real income between 1992 and 2012 for cohorts at various levels of educational attainment. For example, the real earnings of men with a 9th grade education who were 18-24 years old in 1992 had risen by 94 percent 20 years later, when they were in the 35-44 age bracket.

Among the male cohorts under the age of 65 in 2012, only one (of  24) experienced a decline in real earnings. Male cohorts in the 35-54 age range show impressive rises in real income between 1992 and 2012. Among women, no cohort below age 65 experienced a drop in real income between 1992 and 2012; and most experienced a healthy increase.

Of course, some persons who worked full-time in 2012 earned less in that year than they did as full-time workers in 1992. But it’s evident that those 20 years were good for almost everyone. Otherwise, the numbers wouldn’t look as good as they do. In addition to the evidence of tables 3 and 6, consider this:  average real earnings rose by 24 percent between 1992 and 2012. (So much for wage stagnation.)

Tables 3 and 6 indicate that persons high levels of educational attainment have done better than persons at the low end of the educational ladder. That’s simply a fact of economic life, not the result of a conspiracy. It reflects the ever-increasing demand for highly technical goods and services — from nanosurgery to Google glass. In 2012, there were 1.7 million, 8.3 million, and 17.1 million persons in the top 1-, 5-, and 10-percent income brackets. Such large numbers are hardly the stuff of conspiracies.

What about the distribution of incomes? (Note to the uninitiated: Incomes aren’t “distributed,” they’re earned. “Distribution,” in this context, is shorthand for frequency distribution, a statistical term. Unfortunately, too many people interpret “distribution” as a reference to a mysterious and conspiratorial doling out of a big pie in the sky.) Taking into account the number of persons represented in each age-education group, I constructed these distributions for 1992 and 2012:

Mean income by percentile, 2012 vs 1992

The two curves have almost the same Gini coefficient: 0.239 for 1992, 0.242 for 2012. That is to say, the distribution of average incomes (taking men and women together) wasn’t any less equal in 2012 than it was in 1992.

The details for 2012 are in the next table. (Professional degrees include MD, JD, DDS, DVM, and similarly occupation-specific advanced degrees; doctorates include PhD and EdD.) The mean is $46,615; the median, $42,250.

Mean income by percentile, sex, education, age - 2012

And don’t forget, these numbers include part-timers as well as full-timers; college students as well as high-school dropouts; and a large contingent of under-educated (and probably not very bright) oldsters. These numbers don’t include the many sources of income and income-in-kind represented in the “social safety net”: unemployment compensation, disability benefits, survivors’ benefits, food stamps, Social Security, Medicare, Medicaid, and on and on.

Note to Obama and friends: Go peddle your phony stories about income inequality where they’ll be appreciated — Tsarist Russia, for example.

*     *      *

Related posts:
Why We Deserve What We Earn
Who Decides Who’s Deserving?
The Main Causes of Prosperity
Why Class Warfare Is Bad for Everyone
Fighting Myths with Facts
Debunking More Myths of Income Inequality
Ten Commandments of Economics
More Commandments of Economics
On Income Inequality
The Causes of Economic Growth
The Last(?) Word about Income Inequality
Status, Spite, Envy, and Income Redistribution
The Causes of Economic Growth
A Short Course in Economics
Addendum to a Short Course in Economics
The Price of Government
Does the Minimum Wage Increase Unemployment?
The Price of Government Redux
The Mega-Depression
The Real Burden of Government
Toward a Risk-Free Economy
Enough of “Social Welfare”
A True Flat Tax
Taxing the Rich
More about Taxing the Rich
In Defense of the 1%
Lay My (Regulatory) Burden Down
The Burden of Government
How High Should Taxes Be?
The 80-20 Rule, Illustrated
Economics: A Survey (also here)
Estimating the Rahn Curve: Or, How Government Spending Inhibits Economic Growth
Progressive Taxation Is Alive and Well in the U.S. of A.

Discounting in the Public Sector

This post is an adaptation of an article that I wrote 25 years ago. It appeared in the May-June 1989 issue of Program Manager, a magazine published in 1972-2003 by the Defense Systems Management College and its successor, the Defense Acquisition University. Several years before the article appeared, I had begun to question the soundness of the federal government’s official policy about discounting. which is stated in Circular A-94, issued by the Office of Management and Budget, Executive Office of the President.

The point of this post is to refute the case for discounting in benefit-cost or cost-effectiveness analyses of government projects. Part of my argument against discounting is made in “Discounting and ‘Libertarian Paternalism’.” This post makes a more complete case against the use of discounting in analyses of government projects.

DISCOUNTING: WHY AND WHY NOT

Discounting is a valid exercise in the evaluation of personal and business alternatives. A business, for example, will use discounting to compare alternative investments in new equipment; for example:

Implementation of project A will cost $1 million a year in years 1-5; project A will yield an annual net cash flow of $1 million in years 6-15.

Implementation of B will cost $1.5 million a year in years 1-4; B will yield $1.1 million a year in years 5-15.

Instead of undertaking either project, the firm could purchase equally risky bonds with a yield of 5 percent.

Should the firm undertake project A or project B? Discounting reveals the answer (though, for the sake of simplicity, I’m omitting risk, uncertainty, taxes, and inflation): The net present value of A, discounted at 5 percent, is $1.72 million; of B, $4.34 million. B is the preferred alternative, all other things being equal.

This result would seem backwards to a person who is used to thinking in terms of gross numbers, irrespective of the timing of outlays and returns. For example, A costs $5 million and returns $1 million a year (20 percent) when it’s up and running; whereas, B costs $6 million and returns $1.1 million a year (18.33 percent) when it’s up and running. Thus an analysis that omits timing would favor project A. But timing is important. Even though B costs more than A, B yields a greater return, and sooner (by a year). Over the relevant time span, the extra year and extra annual return of $0.1 million make B the more profitable alternative.

However, the result is sensitive to the selection of a discount rate and time horizon, both of which are judgment calls. A range of discount rates and time horizons would be chosen, to see if the preference for B is robust or weak. If A is judged less risky than B, it would be appropriate to apply a lower discount rate to A than to B. If A is likely to have a longer productive life than B (less likely to become obsolete, for example), the time horizon for A would be longer than for B.

Discounting makes sense in the private sector, despite the sensitivity of results to changes in assumptions about costs, returns, discount rate, and time horizon. For one thing, the discount rate — however uncertain — is relevant to the decision-maker; it represents the rate of return that the decision-maker could earn if he chose not to undertake project A or project B. It is his discount rate, not one chosen arbitrarily for him by someone else. For another thing, the returns (such as they turn out to be) belong to the decision-maker. When all is said and done, he (or the principal for whom he is acting) will choose a course of action that is meant to maximize his wealth or his profits. Accordingly, different decision-makers, in different circumstances, will use discount rates and time horizons appropriate to their circumstances. Discounting isn’t a one-size-fits-all procedure.

That said, it doesn’t make sense if to discount if you’re analyzing alternative projects for a government decision-maker. Why not?

1. Government is funded (ultimately) by taxes. Taxpayers have myriad discount rates. The use of a particular rate to represent a (fictional) “social” rate amounts to gross presumption.

2. Further, there’s usually a misalignment of costs and benefits. Those who bear the costs (taxpayers) aren’t likely to reap the benefits in proportion to the costs they bear. Discounting doesn’t apply when X bears the costs and Y reaps the benefits.

3. Given (1) and (2), the proponent of discounting will resort to the use of an internal rate of return (e.g., cost reductions generated by maintenance projects that can then be applied to investments in new weapon systems). The use of an internal rate of return turns out to be a horse-before-the cart proposition: the correct choice determines the discount rate; the discount rate doesn’t determine the correct choice.

Now, for the details.

THE FICTIONAL “SOCIAL” DISCOUNT RATE

The academic justification for discounting the costs of alternative government projects goes like this:

The appropriate rate of discount for public projects is one which measures the social opportunity cost. The decision to devote resources to investment in a public project means … that these resources will become unavailable for use by the private sector. And this transfer should be undertaken whenever a potential project available to the government offers social benefits greater than the loss sustained by removing these resources from the private sector. The social rate of discount, then, must be chosen in such a way that it leads to a positive number for the evaluated net benefits of a public project if and only if its gross benefits exceed its opportunity costs in the private sector. (William J. Baumol, “On the Social Rate of Discount,” American Economic Review, September 1968, pp. 789-90)

In mathematical notation:

[NPV(public benefits) > NPV(private costs)] → Undertake public project

In the next section I’ll address the almost-certain misalignment of benefits and costs.  Here, I’ll assume for the sake of argument that benefits flow only to those taxpayers who foot the bill for a public (i.e., government) project, and do so in perfect proportion to the taxes levied on each of them. Would that unlikely condition justify the public project?

Consider this example:

There is a two-person economy consisting of Adam and Eve.

If a public project is undertaken, both will be taxed the same amount and both will receive the same benefits.

Taxes are levied in year 1; benefits are received in year 2.

Adam’s discount rate is 5 percent; Eve’s discount rate is 10 percent. That is, Eve has a “high” time-preference, relative to Adam; she places more emphasis on the present, as against the future.

The public decision-maker uses a discount rate of 7.5 percent.

The dollar value of the benefits accruing to Adam and Eve can be estimated.

The net present value of the sum of those benefits exceeds the net present value of the sum of the costs borne by Adam and Eve.

Nevertheless, Eve is probably made worse off by the undertaking of the public project. Adam is probably made better off, but at Eve’s expense. Why? Let’s say that Adam and Eve each pay $100 in taxes in year 1, and that the public project breaks even (returns exactly 7.5 percent), so that each of them receives $107.50 worth of benefits in year 2. Adam, given his 5 percent discount rate, would have been made whole with benefits of $105 in year 2, so he gains $2.50. Eve, on the other hand, would have been made whole with benefits of $110 in year 2, so she loses $2.50.

All of that assumes, of course, that both Adam and Eve place any value on the benefits delivered by the public project, let alone the same value. How does the government decision-maker know what value Adam and Eve place on the benefits delivered by his project? He doesn’t; he’s just a presumptuous fellow who wants to spend Adam and Eve’s money to satisfy his own sense of how things should be.

THE MISALIGNMENT OF COSTS AND BENEFITS

Professor Baumol admits that “no optimal [social discount] rate exists” (op. cit., p. 798). Actually, no “social” discount rate exists, except in the minds of arrogant economists and government officials.

How does “society” benefit if Adam is made happy at Eve’s expense? It doesn’t, because there’s no such thing as a social-welfare function, that is, a collective degree of happiness (or unhappiness) in which Adam’s gain somehow cancels Eve’s loss.

It only gets worse in the usual case, where the benefits from a government program do not flow to taxpayers in proportion to the taxes that they pay. It would be a major miracle if benefits were somehow aligned perfectly or even passably well with tax payments, especially given progressive tax rates and deliberately regressive benefit payments (e.g., Social Security, Medicare, Medicaid, housing subsidies, food stamps).

With millions of taxpayers and non-taxpayers in the mix — each with his own discount rate, and each receiving benefits (or not) that are disproportionate to the taxes that he pays — how can anyone say with a straight face that any government project can be justified by applying a “social” discount rate to its benefits and costs?

THE IRRELEVANT INTERNAL RATE OF RETURN

Given the foregoing, insurmountable objections, the die-hard defender of public-sector discounting hops on his deus ex machina: the internal rate of return. One such die-hard is Richard Thaler (also a notorious paternalist and purported libertarian), who essayed his views in “Discounting and Fiscal Constraints: Why Discounting is Always Right” (Center for Naval Analyses, Professional Paper 257, August 1979).

In Thaler’s simplified version of reality, a government decision-maker (manager) faces a choice between two projects that would deliver equal effectiveness (benefits). Specifically, the manager must choose between project A, at a cost of $200 in year 1, and equally-effective project B, at a cost of $205 in year 2 (op. cit., pp. 1-2). Thaler continues:

A [government] manager . . . cannot earn bank interest on funds withheld for a year. . . .  However, there will generally exist other ways for the manager to “invest” funds which are available. Examples include cost-saving expenditures, conservation measures, and preventive maintenance. These kinds of expenditures, if they have positive rates of return, permit a manager to invest money just as if he were putting the money in a savings account.

. . . Suppose a thorough analysis of cost-saving alternatives reveals that [in year 2] a maintenance project will be required at a cost of $215. Call this project D. Alternatively the project can be done [in year 1] (at the same level of effectiveness) for only $200. Call this project C. All of the options are displayed in table 1.

Discounting in the public sector_table 1

(op. cit., pp. 3-4)

Thaler believes that his example clinches the argument for discounting because the choice of project B (an expenditure of $205 in year 2) enables the manager to undertake project C in year 1, and thereby to “save” $10 in year 2.

Thaler’s “proof” is deeply flawed, as discussed in “Discounting and ‘Libertarian Paternalism’.” I’ll focus here on the essential emptiness of Thaler’s argument:

1. Even granting the availability of cost-reduction measures, their payoffs will vary widely. Thaler conveniently conjures projects C and D, with costs of $200 and $215 in years 1 and 2, respectively. He could just have well conjured a project D with a cost of $205 in year 2 — throwing A + D into a tie with B + C — or a project D with a cost of $203 in year 2 — causing A + D to look better than B + C.

2. In other words, the “correct” discount rate depends on the options available to a specific manager of a specific government activity. Yet Thaler insists on the application of a uniform discount rate by all government managers (op. cit., p. 6). By Thaler’s own example, such a practice could lead a manager to choose the wrong option.

3. To put it another way, the analyst should consider the specific options that are available to a specific manager, by constructing packages of projects that would cost the about the same in every year. Having done so (and assuming away a great deal of uncertainty about the costs and benefits of the options), the manager can then choose the package that delivers the most bang for the buck — when the bang is needed, in his judgment. There is no need to apply a discount rate. The relevant (and idiosyncratic) “discount rate” is a product of the correct choice, not a determinant of it.

FINAL WORDS ABOUT THE FUTILITY OF DISCOUNTING FOR GOVERNMENT DECISION-MAKING

Even if there were such a thing as a “social” discount rate, and even if the costs and benefits of government programs were well aligned, discounting would be an inadvisable practice in analysis for government decision-making. If a decision is to depend on the application of a particular discount rate, there must be great certainty about the future costs and benefits of alternative courses of action. But there seldom is (see “Analysis for Government Decision-Making: Demi-Science, Hemi-Demi-Science, and Sophistry“). The practice of discounting simply fosters an illusion of certainty — a potentially dangerous illusion, in the case of national defense.

O Tempora O Mores!

I was exceedingly irritated by a rah-rah piece about “affordable housing” in today’s edition of the local rag. The piece was early intended to promote subsidies that would enable low-income persons to live in mixed-income areas, that is, in the vicinity of persons with higher incomes. The writer of the piece advanced some (admittedly) not-very-convincing sociological arguments for mixed-income neighborhoods, including cost-benefit studies that purport to show that the benefits of subsidized housing outweigh the costs. He failed to mention, of course, that the persons who subsidize “affordable housing” for low-income persons are not the persons who benefit from it. Nor did he make much of the obvious fact that as people earn more, they generally prefer to live among persons with similar earnings, and not among people who earn a lot less.

But what people actually want doesn’t matter in the end, because what counts is what do-gooders want and what government can compel in the name of doing good, don’t you see? That’s why the gauleiters of our fair city persist in the subsidization of low-income housing in mixed-income areas.

In any event, the article led me to think about the many ways in which social norms have changed for the worse since the days of my Midwestern upbringing in the 1940s and 1950s. For one thing, the idea that people should work, save, and pay for their own housing — as I did and my parents did — seems to have gone to the great graveyard of quaint ideas. That graveyard is populated by such formerly vital notions as these:

Behavior is shaped by social norms, like those listed here. The norms are rooted in the Ten Commandments and time-tested codes of behavior. The norms aren’t altered willy-nilly in accordance with the wishes of “activists,” as amplified through the megaphone of the mass media.

Rules of grammar serve the useful purpose of enabling people to understand each other easily. The flouting of grammatical rules in everyday conversation is a sign of ignorance and ill-breeding, not originality.

Dead, white, European males produced some of the greatest works of art, music, literature, philosophy, science, and political theory. Those dead, white, European males are to be celebrated for their accomplishments, not derided just because they are dead or were not black/brown/tan, female, of confused gender, or inhabitants of non-European places.

Marriage is a union of man and women.

Marriage comes before children. This is not because people are pure at heart, but because it is the responsible way to start life together and to ensure that one’s children enjoy a stable, nurturing home life.

Marriage is until “death do us part.” Divorce is a recourse of last resort, not an easy way out of marital and familial responsibilities or the first recourse when one spouse disappoints or angers the other.

Children are disciplined — sometimes spanked — when they do wrong. They aren’t given long, boring, incomprehensible lectures about why they’re doing wrong. Why not? Because they usually know they’re doing wrong and are just trying to see what they can get away with.

Gentlemen don’t swear in front of ladies, and ladies don’t swear in front of gentlemen; discourse is therefore more likely to be rational, and certainly more bearable to those within earshot.

A person’s “space” is respected, as long as person is being respectful of others. A person’s space is not invaded by a loud conversation of no interest to anyone but the conversant.

A person grows old gracefully and doesn’t subject others to the sight of flabby, wrinkled tattoos (unless you were a sailor who has one tattoo on one arm). (This may seem like a nit-pick, but the epidemic of tattooing is symptomatic of the loud, brash, self-centered, faddish culture that now commands center stage in much of America.)

Drugs are taken for the treatment of actual illnesses, not for recreational purposes.

Income is earned, not “distributed.” Persons who earn a lot of money are to be respected. If you envy them to the point of wanting to take their money, you’re a pinko-commie-socialist (no joke).

Welfare is a gift that one accepts as a last resort, it is not a right or an entitlement, and it is not bestowed on persons with convenient disabilities

A man holds a door open for a woman out of courtesy, and he does the same for anyone who is obviously weaker than he is, or laden with packages

Sexism (though it isn’t called that) is nothing more than the understanding — shared by men and women — that women are members of a different sex (the only different one); are usually weaker than men; are endowed with different brain chemistry and physical skills than men (still a fact); and enjoy discreet admiration (flirting) if they’re passably good-looking, or better. Women who reject those propositions — and who try to enforce modes of behavior that assume differently — are embittered and twisted.

A mother who devotes time and effort to the making of a good home and the proper rearing of her children is a pillar of civilized society. Her life is to be celebrated, not condemned as “a waste.”

Homosexuality is a rare, aberrant kind of behavior. (And this is before AIDS proved it to be aberrant.) It’s certainly not a “lifestyle” to be celebrated and shoved down the throats of all who object to it.

Privacy is a constrained right. It doesn’t trump moral obligations, among which are the obligations to refrain from spreading a deadly disease and to preserve innocent life.

Addiction isn’t a disease; it’s a surmountable failing.

Envy is an unsavory and unseemly state of mind; a person should better himself instead of tearing others down.

Justice is for victims. Victims are persons to whom actual harm has been done by way of fraud, theft, bodily harm, murder, and suchlike. A person with a serious disease or handicap isn’t a victim, nor is a person with a drinking or drug problem.

Justice is a dish best served hot, so that would-be criminals can connect the dots between crime and punishment. Swift and sure punishment is the best deterrent of crime. Capital punishment is the ultimate deterrent because an executed killer can’t kill again.

Peace is the result of preparedness for war; lack of preparedness invites war.

The list isn’t exhaustive, but it’s certainly representative. The themes are few and simple: self-reliance, respect for others, respect for tradition, and the defense of society from predators foreign and domestic. The result is liberty: A regime of mutually beneficial coexistence based on trust.

Whence the now-dominant leftist schemes and themes, like “affordable housing” and “the undeserving rich” (a.k.a. “the 1%” and “the 0.1%”), which have replaced the dominant mores of old? Leftist ideas, like the poor, have always been with us, but their political ascendancy arises from the indoctrination mills known as the mainstream media and educational institutions. This is from an article by Graham Cunningham:

“[R]eality” as reflected in the big “old” media is—notwithstanding the relatively recent uncorking of (mainly U.S. based) conservative voices in the “new” media—still overwhelmingly liberal…. And the old media—a virtual Fifth Estate—is still a very big wild wood of seductive liberal myth and folklore. The “staccato signals of constant information” appear, in large part, to be apolitical, making them all the more persuasive. But such is the relentless focus of conservative intellectual discourse on a current affairs agenda that conservatives—never mind liberals—often cannot see the wood for the trees. It is a wood with tangled roots deep in early 20th century socialist intellectual soil. Its filigree branches have since grown and spread into every corner of 21st century public consciousness.

… As someone whose own working life has, at various times, brought me into close contact, not only with schools, colleges, and universities but also local government, the architectural profession, and the British NHS, I can attest that soft-left prejudices prevail in all of these. So the educational incubation of the professional, business, and mandarin classes is another part of the story of the rise of politically correct, middle-class, liberal orthodoxy.

It has also long been true that a great majority of school teachers will be Democrats/Labour Party voters. In varying degree they are likely to emerge from their teacher training with a soft-left baggage ranging from old-fashioned vaguely collectivist economic assumptions and Dickensian sentimental notions (like something called “The Working Class” being perennially victim of something called “The Rich”) to various newer relativist “liberation” and victimhood theologies. Plus a sympathetic take on various kinds of “anti-something-or-other” and “eco” militancy….

[T]he much more potent influence is that everyone born since the Second World War—university educated or not—will have spent a large part of their leisure time in Media Land—a virtual parallel universe, rich in sublimated myth and fairytale. Now Media Land is not some Orwellian Big-Brother conspiracy. It is in itself, too diffuse and anarchic to be a place of didactic political bias per se. Its quintessential characteristic is, rather, that it allows you—without any great effort on your part—to sustain the illusion that you know, and are entitled to have an opinion about, all manner of things beyond your direct experience. It is from these intangible, ego-flattering, seductive characteristics that its mind-bending power flows.

It is the great oracle from which we absorb not just “The News” (intrinsically an editorial semi-fiction anyway) but also the good-guy/bad-guy narratives of film and television drama, the satirical talking-heads panel show, the “shocking” lid-lifting documentary etc. So it is that—drip by drip—the public’s imagination becomes accustomed to the notion that the apparently law-abiding, white, middle-class dwellers in suburbia—though they may not in reality always be the one who have actually “done” the murder—nevertheless do have a dark side to their supposedly smug existence and their desk job in the City—which must, by the way, axiomatically be ignoble, venal and soul destroying. Whereas the violent teenage gangster turns out to have the soul of a poet buried under all those years of oppression. And the lardy, welfare-cheating couch-potato turns out to be quite a sound bloke underneath it all and good fun too. And anyone who takes to the streets in a “protest”—never mind how ignorant and bloody-minded—instantly becomes a hero whilst the target of the “protest” is instantly a villain. And so it is too that the alleged misdeeds of supposedly smug political and business elites are ruthlessly exposed and then wittily sent-up by even more smug, smartly-pants TV “personalities” whose own elite lifestyles remain relatively out of the media spotlight….

And then there is “The News”. Whilst the current affairs output of the mainstream media is not uniformly politically biased per se, it does often have the same entrenched undercurrents as the rest. Underpinning all the day-to-day news ephemera are some enduring fairytales that are both highly seductive and at the same time so diffuse as to be almost subconscious. A major example is the one in which some big bad wolf (maybe “The Government” or “Big Business”)—and definitely not you personally—is either to blame for all your problems in life or has failed to solve them for you. You—a member of “the great mass of ordinary decent people”—are a victim of some or other system or institution. Another (almost certainly subconscious) fairytale is the one in which—by the simple device of espousing “progressive” liberal attitudes—you can carry on with your (and your family’s) own personal pursuit of happiness, just like before but now with the added bonus of feeling that you—unlike those nasty “Right-wingers”—are on the side of the angels. Now that is a really seductive one! …

It is also worth noting that, quite apart from any questions of political bias as such, “The News”, with its inevitable editorial selectivity can—at least in the minds of the uncurious and suggestible—actually help to spread ignorance dressed up as illusory knowledge….

… Having so many alternative gadgets to play with, [members of the post-internet generation] are less and less likely to watch [TV] and especially “The News” and “Current Affairs”. But overall, the power of the Media-Academia Complex is likely to remain undiminished for a very long time to come. Its power comes ultimately from the illusion it creates that you can sit back and soak up all you need to “know” about the big wide world without actually having to be all that curious about it. (“How the Left Was Won,” The Imaginative Conservative, February 2014)

The 1940s and 1950s weren’t idyllic, by any means — but no era ever is, except in gauzy hindsight. There was more poverty and racism then than now. But the economy would be even more robust today, absent the incursions of the regulatory-welfare state. And racism would have declined in time, with less of the lingering resentment that was a foreseeable result of government’s heavy-handed “equality” policies. Simply enforcing existing laws so that blacks enjoyed equal treatment would have been enough.

The undoing of traditional mores began in earnest in the 1960s, with a frontal assault on traditional morality and the misguided expansion of the regulatory-welfare state. The unraveling continues to this day. Traditional morality is notable in its neglect; social cohesion is almost non-existent, except where the bonds of religion and ethnicity remain strong. The social fabric that once bound vast swaths of America has rotted — and is almost certainly beyond repair.

If Hillary Clinton possessed an ounce of intellectual honesty, she would justifiably call the great unraveling a vast, left-wing conspiracy. As Cunningham suggests, it is to some extent an unwitting conspiracy of smug, like-minded persons. But it is nevertheless a broad-based, often concerted, and nihilistic effort to undermine the foundations of morality — and economic progress.

*     *     *

Related reading:
Dwight Longnecker, “Modern Marriage – Revolution or Regression?,” The Imaginative Conservative, February 14, 2014

Related posts:
PC Madness
Why Not Marry Your Pet?
Stuff White (Liberal Yuppie) People Like
“Men’s Health”
I’ve Got a LIttle List
See also the preceding post, and the many posts listed at the bottom.

The Fall and Rise of American Empire

Most Americans don’t like the idea of empire. It smacks of power, which is comforting and enriching when you have it, though few like to admit it. In short, empire can be a good thing. Lawrence W. Reed opens “The Fall of the Republic” with this:

For nearly five centuries, Res Publica Romana—the Roman Republic—bestowed upon the world a previously unseen degree of respect for individual rights and the rule of law. When the republic expired, the world would not see those wondrous achievements again on a comparable scale for a thousand years.

Reed summarizes the decline and fall of Rome:

The Roman Republic died a death of a thousand cuts. Or, to borrow from another, well-known parable: The heat below the pot in which the proverbial frog was boiled started out as a mere flicker of a flame, then rose gradually until it was too late for the frog to escape. Indeed, for a brief time, he enjoyed a nice warm bath….

Writers from the first centuries B.C. and A.D. offered useful insights to the decline. Polybius predicted that politicians would pander to the masses, leading to the mob rule of an unrestrained democracy. The constitution, he surmised, could not survive when that happened. Sallust bemoaned the erosion of morals and character and the rise of personal power lust. Livy, Plutarch, and Cato expressed similar sentiments. To the moment of his assassination, Cicero defended the Republic against the assaults of the early dictators because he knew they would transform Rome into a tyrannical despotism.

Ultimately, the collapse of the political order of republican Rome has its origins in three developments that took root in the second century B.C., then blossomed by the end of the first. One was foreign adventure. The second was the welfare state. The third was a sacrifice of constitutional norms and the rule of law to the demands of the other two.

The American equivalent of the Roman Republic didn’t last nearly as long — only about a century, from the Spanish-American War of 1898 through 1991, which marked the end of the Cold War and victory in the Gulf War. The relative peace and prosperity of the next several years masked America’s underlying decline, which has since became evident in the military, political, and economic events of the 21st century.

The causes and symptoms of America’s decline bear a strong resemblance to the decline of Rome. Let’s start with foreign adventure. By the end of 1991, America’s influence in the world seemed assured, given collapse of the USSR and the easy victory over Iraq in response to Saddam Hussein’s grab of Kuwait. But those two events proved to be the American Empire’s last gasp.

The dust had barely settled on the Gulf War when Somalia joined the list of post-World War II military misadventures, namely, the Korean War, the Vietnam War, the lame response to the bombing of Marine barracks in Lebanon, and the jurisprudential reaction to the 1993 bombing of the World Trade Center. (Some would argue that America’s entry into World War I was also a misadventure because of the imperial origins and tragic aftermath of the peace, namely, the rise of totalitarianism. But, at least, World War I ended decisively and in a clear-cut victory for America’s side — a victory that wouldn’t have been possible without the intervention of American forces.) The seeming disinclination of American leaders to stay the course and to wreak vengeance was duly noted in Osama bin Laden’s 1996 fatwa against the United States. As if to endorse that view, the 1998 bombings of U.S. embassies in Africa were met with ineffectual missile strikes.

And then came 9/11, and in its wake the wars in Afghanistan and Iraq. Both were cast in the mold of Korea and Vietnam: not enough firepower, not enough willpower. Barack Obama’s subsequent foreign policy misadventures and general retreat from effective leadership have only cemented America’s place as a declining, feckless, no-longer-fearsome power. Whence Obama’s fecklessness? Some argue that it is evidence of a deliberate effort to debase the United States.

So much for military misadventures. Let us turn to the growth of the welfare state and the sacrifice of constitutional norms. These go hand-in-hand, and both began before America’s military misadventures after World War II.

Consider the judicial betrayal of the constitutional scheme of limited government, and of order and traditional morality. There is no way, in the course of a blog post, to assess the full scope of the betrayal, in which the U.S. Supreme Court was a willing co-conspirator. Some examples will have to do:

Home Building & Loan Association v. Blaisdell (1933) allowed governmental suspension of creditors’ remedies (i.e., foreclosure), thus undermining contractual relationships.

National Labor Relations Board v. Jones & Laughlin Steel Corporation (1937) validated the Wagner Act, which vastly expanded the ability of labor unions to extort employers, to restrict commerce, and to fatten the paychecks of union members at the expense of everyone else.

Helvering v. Davis (1937) found Social Security to be constitutional, despite the plain words of Article I, Section 8 (the enumerated powers of Congress).

Wickard v. Filburn (1942) gave Congress unlimited power to regulate anything remotely connected with interstate commerce.

Miranda v. Arizona (1966) stigmatized and hindered the efforts of police to protect the public. On the basis of “intuitive empiricism” (i.e., judicial guesswork), Miranda imposed an overly broad interpretation of the Fifth Amendment. (A subsequent empirical analysis suggests that Miranda was unwisely decided.)

Griggs v. Duke Power Company (1971) enshrined disparate impact as evidence of racial discrimination, and put the burden of proof on the accused employer.

Lemon v. Kurtzman (1971) gave judges an easy way (the “Lemon test”) to rule against any government action that might incidentally benefit religion.

Roe v. Wade (1973) authorized murder in the name of privacy.

Goss v. Lopez (1975) made it more difficult for school authorities to discipline disruptive and destructive behavior, and (in my view) established — beyond hope of reversal — the interference of the central government in matters that ought to be handled and disposed of locally.

Coker v. Georgia (1977) outlawed the death penalty in cases of rape, thus contributing to the erosion of the death penalty as a serious deterrent to the commission of heinous crimes and a just penalty for same.

Tennessee Valley authority v. Hill (1978) gave the snail darter — and as a result, all kinds of critters — precedence over human beings, under the Endangered Species Act.

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) vastly increased the power of regulatory agencies by decreeing “deference” toward rules made in the absence of specific congressional authorization, as long as the rules are “reasonable.”

Garcia v. San Antonio Metropolitan Transit Authority (1985) confirmed the hollowness of the Tenth Amendment and the States’ ability to exercise any power without the permission of the central government.

Kelo v. City of New London (2005) affirmed the right of any government in the United States to seize anyone’s property, at any time, for any use — even non-governmental.

National Federation of Independent Business v. Sebelius (2012) granted the federal government power to tax anyone for any purpose, even for not doing something.

Hollingsworth v. Perry (2013) left standing a federal district court judge’s self-serving declaration that California’s duly adopted ban on same-sex “marriage” was unconstitutional, thus opening the door to similar holdings by other federal judges about other States’ duly adopted bans on same-sex “marriage.”

The judiciary didn’t instigate the vast expansion of the regulatory-welfare state and the overthrow of social norms, but the judiciary abetted them.

What does the regulatory-welfare state amount to? Huge federal welfare schemes, including but not limited to Social Security, Medicare, and Medicaid; the addition of nine cabinet-level departments to the executive branch in the preceding 100 years; the creation of the cabinet-level Environmental Protection Agency (EPA); the delegation of legislative power to the EPA and other federal agencies, and ensuing accretion of rules made and enforced by those agencies; and the pervasive centralization of power in Washington, “thanks” to judicial misfeasance of the kinds listed above, and to political sleight-of-hand (e.g., “cooperative” federal-State programs like Medicare, and grants of “federal” money — i.e., taxpayers’ money — to State and local governments).

As for constitutional norms, the courts of the United States have become perversely “libertarian.” They seem driven to overturn long-standing, time-tested behavioral norms that guide individuals toward peaceful, constructive coexistence with their compatriots. Thus the “right” to an abortion in the first trimester, based on a non-existent general right of privacy, has become the right to kill a nearly born and newly born child. The “right” to practice sodomy has become an obligation to purvey goods and services to those who practice sodomy, regardless of one’s personal views about the practice. The “right” of a male student of confused gender to use the girl’s bathroom in a Maine school threatens to evolve into the “right” to walk into any damn bathroom at any time, regardless of one’s actual gender. And on and on, down the slippery slope and into unreason, barbarity, and oppression.

Where stands the Empire today? Clearly, America has less influence in the world than it had just after World War II and even after the Gulf War. What a joke it is when the American president must be rescued from the consequences of his own (possibly deliberate) haplessness by Russia’s leader, when Iran plays rope-a-dope with Obama in the matter of nuclear weapons, and when China flexes its new-found and growing military muscle without drawing a serious response from the U.S.

American power abroad could be restored in fairly short order, given the will to do so. But the hollowing out of America’s liberty and prosperity — which began in earnest with the New Deal — threatens to be permanent, given the decades-long transformation of the nation’s legal and bureaucratic infrastructure. Government — mainly the central government — now exerts financial control over 40 percent of the economy (here, see first graph), and arguably exerts regulatory control over almost all of it.

That control has long since passed from the elected “representatives” of the people to technocrats who are bent on dictating how Americans’ conduct their lives and earn their livelihoods. Thus:

In an FDA office building in suburban Maryland, the bureaucrats gather over coffee to draft rules meant to squeeze the trans fat out of snack foods.

Four blocks from the White House, in an EPA conference room: more bureaucrats, more meetings, more drafting of rules, these aimed at forcing industrialists to spend billions cutting carbon to fend off global warming.

Congress? Who needs Congress?

Americans heard President Barack Obama declare this week that he intends to bypass the gridlocked Hill to get things done on his own. What they didn’t hear: just how far he’s actually pushing his executive authority.

An in-depth examination of the administration’s actions and plans, agency by agency, regulation by regulation, reveals an executive power play that’s broad and bold — and intensely ambitious. Far more than he let on in the State of the Union, the president has marshaled the tools of his office to advance policies, many unabashedly liberal, that push deep into everyday life for tens of millions of Americans.

He wants to change how power plants operate. And what we buy for lunch. How we travel to work. And how our kids learn math. How our gasoline is formulated. How we light our aquariums.

Already, the president’s team has enacted 300 economically significant regulations, far more than Bill Clinton, George W. Bush or Ronald Reagan did in comparable periods. Some of those rules are driven by the Affordable Care Act and Dodd-Frank banking reform, the two big laws Obama pushed through Congress early in his first term, when he had Democratic majorities in both houses. But there is far more.

Follow the link and read the rest, if you have the stomach for it.

The Empire lives, but it’s a different Empire than the one that enjoyed its last hurrah in the early 1990s. The Empire now exists not to make Americans safe and prosperous, but to dominate Americans in the name of overblown and non-existent threats (e.g., sexism, racism, endangered species, global warming), out of ersatz compassion, and with the aim of attaining the impossible: equality for all. Well, equality for all but that minority of minorities — the hard-working, tax-paying, straight, white person of European or Asian descent who minds his own business and not everyone else’s. If you are one of those, and religious as well, you are a particular object of persecution and prosecution.

In sum, a new Empire has arisen on America’s shores. If it had a motto, it would be* “trillions for the regulatory-welfare state and its clients, but not enough for defense.”

*     *     *

Related reading:
Bill Gertz, “Putin’s July 4th Message,” The Washington Free Beacon, July 6, 2012
Dean Cheng, “South China Sea: China Drops a Bombshell,” The Foundry, July 7, 2012
Walter Russell Mead and staff, “Putin Tells His Ambassadors: The West Is All Washed Up,” The American Interest, July 9, 2012
Erica Ritz, “Troubling? Putin Oversees Largest Nuclear Tests since the Cold War,” The Blaze, October 20, 2012
Norman Podhoretz, “Obama’s Successful Foreign Failure,” WSJ.com, September 8, 2013
Melanie Phillips, “Putin Checkmates America,” Melanie’s Blog, September 15, 2013
Walter Russell Mead (and staff), “Mixed Messages from Washington Confuse Allies,” The American Interest, December 3, 2013
Lawrence W. Reed, “The Fall of the Republic,” The Freeman, January 8, 2014
doriangrey1, “The Iranian Rope-a-Dope,” The Wilderness of Mirrors, January 20, 2014
Bill Vallicella, “The Decline of the West: How Long Can We Last?,” Maverick Philosopher, January 21, 2014
Adam Garfinkle, “Obama’s Middle East Recessional” in four parts (here, here, here, here), The American Interest, January 21, 2014
Victor Davis Hanson, “Obama’s Recessional,” RealClearPolitics, January 22, 2014
Elise Cooper, “Barack Obama’s Foreign Policy: An Utter Failure,” American Thinker, January 26, 2014
Dan Roberts, “White House Warns Obama Ready to ‘Bypass on 2014 Agenda,” The Guardian, January 26, 2014
Alexander Boltin, “Cruz: Putin Plays Chess, Obama Plays Checkers on Foreign Policy,” The Hill, January 28, 2014
Stephanie Simon, “Obama’s Power Play,” Politico, January 31, 2014
Tom Blumer, “Is It Over and We Just Don’t Know It? Have We Lost Our Founders’ Government?,” PJ Media, February 10, 2014
Victor Davis Hanson, “An Orwellian Nation of Obamathink,” Jewish World Review, February 13, 2014
Angelo M. Codevilla, “Do We Deserve the Constitution of 2014?,” Library of Law and Liberty, February 16, 2014
Richard Winchester, “Left-Wing Totalitarianism in America,” American Thinker, February 17, 2014

Related posts:
The Near-Victory of Communism
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The Left
Our Enemy, the State
“Intellectuals and Society”: A Review
The Left’s Agenda
Rating America’s Wars
Transnationalism and National Defense
The Left and Its Delusions
The Destruction of Society in the Name of “Society”
September 20, 2001: Hillary Clinton Signals the End of “Unity”
The War on Terror, As It Should Have Been Fought
The Spoiled Children of Capitalism
Politics, Sophistry, and the Academy
Subsidizing the Enemies of Liberty
Well-Founded Pessimism
Defense as an Investment in Liberty and Prosperity
Liberty and Society
Tolerance on the Left
America: Past, Present, and Future
The Barbarians within and the State of the Union
Estimating the Rahn Curve: Or, How Government Spending Inhibits Economic Growth
America’s Financial Crisis Is Now
The World Turned Upside Down
“We the People” and Big Government
The Culture War
Defense Spending: One More Time
Parsing Political Philosophy (II)
__________
* A mockery of the words of Robert Goodloe Harper, who as a member of the U.S. House of Representatives in 1797, said “Millions for defense, but not one cent for tribute.” The remark was occasioned by a demand from France for tribute (a bribe) in exchange for the release of American ships that had been seized by the French.

Facts about Presidents

I’ve added a new page, “Facts about Presidents.” It’s meant to be a handy source for readers who are interested in such things as the age of a president upon taking office, the length of time lived after leaving office, place of birth, religious affiliation, and more.

There you will find the birth names of the presidents, many of which differ from the names by which they are known. For example, no president to date has been known as a “Junior,” yet nine were and are a “Junior” (in fact if not in name) and two others — Obams and Clinton — are entitled to letter suffixes: II and III, respectively. In sum, 11 of the 43 men who served as president were named after their fathers, which suggests that a key source of political ambition is a felt need to “prove” oneself. There is further evidence for that hypothesis: Three presidents not entitled to a post-nominal suffix also felt the need to at least equal the achievements of their fathers and grandfather: John Quincy Adams, son of John Adams; Benjamin Harrison, grandson of William Henry Harrison; and George W. Bush, son of George H.W. Bush.

Did you know that John F. Kennedy — who became president on January 20, 1961 — was 26.62 years younger than his predecessor, Dwight D. Eisenhower? That’s the largest age drop on record, and you’ll find the numbers in the second part of the three-part table of facts. Another factoid from the same part of the table: The largest age jump occurred on January 20, 1981, when James E. Carter was replaced by Ronald W. Reagan, who was 13.65 older than Carter.

Name changes? Several. Grant and Eisenhower ended up with different first and middle names than the ones they were born with. Adoptees Ford and Clinton ended up with different last names, and Ford’s was changed completely. Cleveland, Wilson, and Coolidge didn’t go by the first names given them at birth, preferring their more distinctive — and now old-fashioned — middle names.

Speaking of middle names, the first eight presidents had none. Theodore Roosevelt (president 1901-9) was the last president to lack one, though Harry Truman’s was just letter S.

There’s much more. Enjoy!