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Bush and McCain are Extreme Libertarians:

So says Paul Krugman: "What we really need is a government that works, because it's run by people who understand that sometimes government is the solution, after all. And that seems to be something undreamed of in either Mr. Bush's or Mr. McCain's philosophy."

After eight years of "no child left behind," Medicare expansion, aid to Africa for AIDS, drug warring, abstinence education, nation-building in Iraq and Afghanistan, and so forth and so on, and more of the same promised by McCain, the better question is, is there any problem that Bush and McCain DON'T think government should solve?

I take those who think that the modern Republican Party is an outpost of radical libertarianism about as seriously as those who think that the Democracts are getting ready to shoot the kulaks.

EIDE_Interface (mail):
Look, Krugman has been off his rocker for about 10 years at least. He's in the same Andrew Sullivan la-la land.
9.1.2008 8:10pm
NYU JD:
EIDE--

Until this weekend, I'd have agreed with you. After this weekend, even Krugman isn't quite as far removed from the world of the sane as Sullivan.
9.1.2008 8:16pm
armchairpunter:
I'd like Krugman to produce a list of situations where he believes that government isn't the solution.
9.1.2008 8:16pm
DavidBernstein (mail):
What does it take to get fired as a NY Times columnist? Or put another way, is there any amount of nonsense one can spout that will get one fired? (The only one they've fired to my knowledge was John Tierney, who was the most sensible.)
9.1.2008 8:20pm
mf24 (mail):
What does it take to get fired as a NY Times columnist? ... the most sensible.)
I believe you just answered your own question.
9.1.2008 8:26pm
byomtov (mail):
What does it take to get fired as a NY Times columnist? Or put another way, is there any amount of nonsense one can spout that will get one fired?

Apparently not, since Brooks and Kristol are still there. Too easy.
9.1.2008 8:34pm
loki13 (mail):
Here's what I think would be the extended analysis:

1. Propose big government program.

2. Enact big government program.

3. Staff big program with incompetents (like FEMA) or use rules to make sure BGP uses rules to cause it to function inefficiently (see Medicare expansion, which, as a bonus, is a huge payout to BigPharma). Preferably, do both.

4. Proceed to run against big government for electoral advantage.

I think Krugman would argue that step 5 would be to then dismantle the government programs because you've 'shown' they cannot work, but the Bush Administration was never interested in getting to that step.
9.1.2008 8:38pm
Jim Hu:
I get the feeling that a lot of people have no clue about what libertarians are.
9.1.2008 8:40pm
Quick Question:
Why are you opposed to funding to combat AIDS in Africa, Prof. Bernstein?
9.1.2008 8:48pm
loki13 (mail):
Actually, Jim Hu, this is a common theme among some; the belief in "starving the beast". Lower taxes, create new programs, run them poorly, force hard choices, get rid of lots of the government.

I think it's an intellectually dishonest way of claiming to be for tax cuts and increasing spending, but there you go.

(BTW, a tax cut without an equal cut in spending is not a tax cut, it is a tax shift.)
9.1.2008 8:50pm
Jon Roland (mail) (www):
What does the subject line have to do with what Krugman is saying in his op-ed?

More interesting is the next op-ed by Bill Kristol, on Sarah Palin:


I spent an afternoon with Palin a little over a year ago in Juneau, and have followed her career pretty closely ever since. I think she can pull it off. I’m not the only one. The day after the V.P. announcement, I spoke with an old friend, James Muller, chairman of the political science department at the University of Alaska, Anchorage. He said that Palin “has been underestimated over and over again. She took on the party and state establishments here in Alaska, and left them reeling. She’s a very good campaigner, a quick study and a fighter.”

Muller called particular attention to her successes in passing an increase to the oil production tax and facilitating the future construction of a huge natural gas pipeline. “At first the oil companies thought she was naïve, and they’d have their way. Instead she faced them down and forced them to compromise on her terms.”
9.1.2008 8:50pm
cvt:
Krugman doesn't exactly say that Bush and McCain are libertarians. Also, his main factual assertion, that FEMA is a useless pile of shit, is correct. It's just his explanation -- that hostility to government is the cause -- that he gets wrong. That part of the column is dumb, but otherwise it makes some interesting points about how useless FEMA still is.
9.1.2008 9:00pm
Hoosier:
Paul Krugman?

He played the messy guy on the "Odd Couple," right?
9.1.2008 9:02pm
db (mail):
exactly how many programs have been abolished since the new deal because they didnt work .000001 per cet0 that's about as sensible a theory as claiming that the dems are trying to limit govt so the people will rise up and demand new programs.
9.1.2008 9:03pm
EH (mail):
I think she can pull it off.

Groan. Then again, ain't Kristol one of them government abolitionists as described above?
9.1.2008 9:11pm
Sam H (mail):
"...sometimes government is the solution"

Certainly. Things like The Center for Disease Control clearly need to be done by government. On the other hand, we don't need the government mandating that every kid does "Service"
9.1.2008 9:18pm
Jonathan H. Adler (mail) (www):
You mean the kulaks are safe? Now you tell me!
9.1.2008 9:18pm
DavidBernstein (mail):
Actually, Jim Hu, this is a common theme among some; the belief in "starving the beast". Lower taxes, create new programs, run them poorly, force hard choices, get rid of lots of the government.
So let me get the straight. The theory is that the Republicans will massively increase the size of government, but do so incompetently. They will then expect people to turn not against the Republicans, but against the government, resulting in ultimately a contraction in the size of government. That's pure idiocy.
9.1.2008 9:19pm
DavidBernstein (mail):
"(see Medicare expansion, which, as a bonus, is a huge payout to BigPharma)."

I've yet to see anyone coherently explain why Medicare expansion, which they oppose because it was done by Bush, is a payoff to "BigPharma," but Medicare itself is not a payoff to "BigMedicine."
9.1.2008 9:20pm
byomtov (mail):
Bill Kristol thinks Palin can pull it off.

There's a surprise.
9.1.2008 9:22pm
Trevor Morrison (mail):
I ask the following question non-rhetorically, which is to say that I don't know the answer but would like to:

If President Bush's support for government "aid to Africa for AIDS" exposes him as an un-libertarian supporter of big government, what is the libertarian solution to the problem?
9.1.2008 9:23pm
David M. Nieporent (www):
Groan. Then again, ain't Kristol one of them government abolitionists as described above?
As described above, in the sense of not being one but being falsely accused by Krugman of being one? Yes. Kristol is a neoconservative; neoconservatives have never been about small government. Another name for the neoconservative movement is "big government conservatives" or "New Deal conservatives."

The New York Times doesn't believe in having small government even on the opinion pages (with the exception of the aforementioned Tierney). To quote Reason, their Op/Ed columnists now have big government liberals (Krugman, Herbert), big government moderates (Friedman, Kristoff), and big government conservatives (Brooks, Kristol).
9.1.2008 9:28pm
loki13 (mail):
DB,

You're right. It is pure idiocy. Clearly, your desire to score a point influenced your reading of what I wrote.

1. It is not my idea.

2. It has been used to justify the concurrent lowering of taxes with the expansion of government programs. That, of course, is pure idiocy. Which, amazingly enough, is why the 'starving the beast' idea is pure idiocy as well. See also "deficits don't matter".

As to the payoffs to BigPharma, a guarantee that the government would now pay for a large number of prescriptions would artificially increase demand (as much as health care has an elastic demand curve). That would be good enough, except that at the same time, they guaranteed they would pay market rates and NOT negotiate for bulk rates for the pharmaceuticals, thereby lowering the price with their market power. Increased demand, artificially high price, WOW! I am somewhat incredulous you didn't know about this.
9.1.2008 9:30pm
Dan M.:
Well, apparently Palin IS somewhat of a Libertarian according to libertarianrepublican.blogspot.com.

She also apparently was a member of the Alaskan Independence Party (which seems to have been founded by the same guy who started their libertarian party) before strategically switching to Republican to run for mayor.

DailyKOS is freaking out about the "radical" message she sent to the AIP's convention this year where she expressed support for their involvement in the political process and support for their belief in small government and personal freedom.
9.1.2008 9:33pm
DavidBernstein (mail):
I'm not taking any position on U.S. government aid to Africa to AIDs, nor do I want, as Trevor invites, to get into a debate about "what does libertarianism do about collective action problems that may have significant externalities," or perhaps "where does libertarianism stand on humanitarian issues that seemingly can only be resolved by government."
I'm only pointing out that if Bush actually had the extreme anti-government sentiment attributed to him by Krugman, he wouldn't have advocated a huge increase in aid to Africa, far beyond what the more "liberal" Clinton Administration advocated.
9.1.2008 9:33pm
David M. Nieporent (www):
Loki, "starve the beast" is about cutting taxes. It is not about expanding government. That wouldn't make any sense. It's about cutting them until government can't be afforded, and needs to be cut. Expanding government would be counterproductive.
9.1.2008 9:36pm
DavidBernstein (mail):
I didn't say it was your idea, just that the idea is idiotic. And while I've heard of "starve the beast," I don't think you can find any quotes supporting Krugman's idea of "starve the beast while massively increasing its responsibilities."

As for Medicare, for many years, the program paid the market rate for doctors' services, just as now it is paying market rate for Pharmaceuticals. So remind me why Medicare wasn't a payoff to "BigMedicine."



You're right. It is pure idiocy. Clearly, your desire to score a point influenced your reading of what I wrote.

1. It is not my idea.

2. It has been used to justify the concurrent lowering of taxes with the expansion of government programs. That, of course, is pure idiocy. Which, amazingly enough, is why the 'starving the beast' idea is pure idiocy as well. See also "deficits don't matter".

As to the payoffs to BigPharma, a guarantee that the government would now pay for a large number of prescriptions would artificially increase demand (as much as health care has an elastic demand curve). That would be good enough, except that at the same time, they guaranteed they would pay market rates and NOT negotiate for bulk rates for the pharmaceuticals, thereby lowering the price with their market power. Increased demand, artificially high price, WOW! I am somewhat incredulous you didn't know about this.
9.1.2008 9:36pm
MarkField (mail):

So let me get the straight. The theory is that the Republicans will massively increase the size of government, but do so incompetently. They will then expect people to turn not against the Republicans, but against the government, resulting in ultimately a contraction in the size of government. That's pure idiocy


How else can you explain George Bush?
9.1.2008 9:36pm
loki13 (mail):
DB,

You're kidding, right? Everyone knows that medicare reimburses doctors and hospitals according to a rate system (set by the CMMS). This has the practical effect of price controls. Medicare Part D, OTOH, is not even permitted to bargain with the pharmaceutical companies (unlike other agencies). The VA, to use one example, pays significantly less (more than 50% less) for drugs than drugs bought under MPD even though there would be much greater bargaining power.
9.1.2008 9:45pm
DavidBernstein (mail):
(1) he actually believes in expanding the government
or
(2) he expanded it because Karl Rove told him this was the way to get a new majority

and

(3) government has acted as incompetent as usual, but Republican failings get blamed on their alleged hatred of government, while Democratic failings get blamed on the Republicans preventing them from spending "enough" money.
9.1.2008 9:45pm
DavidBernstein (mail):
DB,

You're kidding, right? Everyone knows that medicare reimburses doctors and hospitals according to a rate system (set by the CMMS). This has the practical effect of price controls
That's now. For many years, Medicare reimbursed hospitals on a "cost plus" basis, and I believe paid physicians their normal rates. Physician income certainly went up dramatically in the 60s and 70s thanks to Medicare. So, was Medicare a big payoff to "Big Medicine" or not?
9.1.2008 9:47pm
DavidBernsten (mail):
Wikipedia confirms that physician fees were initially based on physician charges, with some limits, but physicians could then bill patients for the excess.
9.1.2008 9:49pm
loki13 (mail):
As for your quote, how about a whole paper on the intellectual underpinning of increasing the budget deficit while decreasing taxes leading to "starving the beast".

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=589283

There are numerous quotes. You can google them yourself, because after the medicare bit, I am having trouble believe in OK's good faith command. If you cannot see that there is a disconnect between those who follow a starve the beast strategy, lower taxes, and increase spending, I'm not sure what to tell you, unless you acknowledge that are attempting to force a crisis that they believe will result in lower government spending (given preferences of taxpayers for services and taxes).
9.1.2008 9:54pm
JosephSlater (mail):
The interesting thing about Kristol's article was that he essentially argued that prior to the Palin pick, McCain was losing. Something he never suggested himself prior to the Palin pick.
9.1.2008 9:56pm
Trevor Morrison (mail):
That's too bad, David. Or at least it's too bad for me. I'd genuinely like to know what libertarians think about problems like AIDS in Africa, and I figured that, since an apparent libertarian raised it on a blog full of apparent libertarians, this would be as good a place as any to raise the question. After all, if Bush's support for government aid in this context counts as a data point pointing away from libertarianism, presumably a true libertarian would prefer that the government do something else. (If that presumption isn't right, then it would appear the issue has no libertarian valence one way or the other, in which case it has no place in your laundry list since it's irrelevant to the issue you've raised.)

But hey, it's a free-ish country, so you're free to maintain silence on the issue.
9.1.2008 9:59pm
loki13 (mail):

I'm sorry, I was talking about the world as it exists now, not as it may have existed in the 60s. Yes, MPD was a giveaway; you have not disputed this. I don't know enough about medicare 'back in the day' to tell you, and it doesn't really matter as to whether MPD was a giveaway to BigPharma. Not what I was talking about, and I'm not a big fan of shifting the terms and times of a discussion.
9.1.2008 10:00pm
Roger Sweeny (mail):
How else can you explain George Bush?

I suggest this:

"Well, while small government might be nice, people don't vote for you unless you spend money on things they like. Oh, and if you cut their taxes, too. So spend more and cut taxes. That's what the press reports. And if we don't do it, the Democrats just will [see the Obama campaign]. Then we'll be out on our asses.

"But making the programs actually run? That's a thankless task that takes all too much effort."
9.1.2008 10:07pm
David M. Nieporent (www):
Loki,

1) I have no idea what on earth you think a psychology paper has to do with anything.

2) Decreasing taxes does increase the budget deficit, at least where we are on the Laffer curve. It's not "increasing the budget deficit while decreasing taxes"; these are the same thing. Increasing the budget is not part of any conservative strategy.
9.1.2008 10:08pm
David M. Nieporent (www):
That's too bad, David. Or at least it's too bad for me. I'd genuinely like to know what libertarians think about problems like AIDS in Africa,
Libertarians think that anybody who is concerned about this problem ought to give money to organizations that combat problems like AIDS in Africa.
9.1.2008 10:09pm
loki13 (mail):
The psychology paper explains that it might be a prudent strategy to increase the budget deficit to unsustainable levels, given the marginal utility preferences of individuals, they are more likely in the future to cut services than to lose the tax cuts. If you had looked at it, you'd realize this.

Yes, lowering taxes raises the budget deficit. So does increased spending. So if you lower taxes AND increase spending, you get a mammoth deficit, which forces a crisis, which forces hard choices, and (hopefully, to some) starving the beast. I have to assume you just like to argue, because I know you're not this dense.

As for not being a conservative position; then Bush (II), Reagan, and McCain are not conservatives? Words lose their meanings.
9.1.2008 10:15pm
bc (mail):
The reason the Grey Lady is swinging her big guns around to aim at Libertarianism is Sarah Palin. Plain bullets in a frontal assault will bounce off her, and like "The Mysterians", their usual weapons will only make her stronger. Only the most elliptic and subtle attacks will do. "She's a Libertarian" will probably stick, so let's start with "Libertarians are bad", and go from there.
9.1.2008 10:16pm
Passing By:
What does the subject line have to do with what Krugman is saying in his op-ed?
Nothing. But it appears to be written at a tenth grade level, and you're always taking a gamble that you'll be misunderstood if you write above the eighth grade level.
9.1.2008 10:18pm
DavidBernsten (mail):
Loki, I know certain people sometimes have trouble with the concept that a "tax cut" and an "increase in government spending" are not the same thing, but they're not. The starve the beast strategy, such as it is, is not about increasing short-term government spending. Indeed, everyone knows that it's virtually impossible to get rid of a federal program once it's established, so you'd have to be a moron to puruse an "increase government spending now to decrease it later" strategy.

As for Medicare, my sole point is that the prescription drug program follows a reimbursement strategy just like the original Medicare program, yet Democratic partisans who claim that the former is a "giveaway" will never, ever, concede that the latter was.

Trevor, let's discuss sometime over coffee, I have two classes tomorrow! My general reaction is that I personally wouldn't find gov't spending on African aids especially objectionable, but that such spending is bound to be a low priority, since its direct beneficiaries don't vote. So, a government with the power to do that will inevitably have and use the power to do many, many more destructive things, so I'd withhold the power to begin with, short of having a constitutional guarantee that things like AIDS spending won"t come at the price of atrocities like federal farm programs that help millions starve
9.1.2008 10:19pm
David M. Nieporent (www):
The psychology paper explains that it might be a prudent strategy to increase the budget deficit to unsustainable levels, given the marginal utility preferences of individuals, they are more likely in the future to cut services than to lose the tax cuts. If you had looked at it, you'd realize this.
I did look at it; I read the whole thing, just to try to figure out why you were bringing it up.

What on earth does "might be a prudent strategy" have to do with what "starving the beast" actually refers to?
9.1.2008 10:27pm
David M. Nieporent (www):
Yes, lowering taxes raises the budget deficit. So does increased spending. So if you lower taxes AND increase spending, you get a mammoth deficit, which forces a crisis, which forces hard choices, and (hopefully, to some) starving the beast. I have to assume you just like to argue, because I know you're not this dense.
But the purpose of starving the beast is to reduce spending. So increasing spending is counterproductive. Yes, it increases deficits, but that just gets you back to where you were before.

As for not being a conservative position; then Bush (II), Reagan, and McCain are not conservatives? Words lose their meanings.
They're politicians. The number one goal (and number two goal, and number three goal, and numbers 4-100 goals) of politicians is to get reelected, not to pursue an ideological program.
9.1.2008 10:32pm
loki13 (mail):
DB,

Sometimes, I think you outsmart yourself. I wasn't around when Medicare worked the way you claim it did; I know how it works now. It is not a giveaway, instead, it acts as a price control on the medical market (which, given your leanings, you might have a problem with anyway). I do know a massive amount of pork when I see it, and that was MPD. Simply allowing them to bargain like the VA or *any other market actor* would have dramatically decreased the cost of the program. I don't know what most partisans say about the old system of Medicare; I guess I don't have my 1960s talking points (they may have been stolen by Abbie Hoffman).

I have no idea why you're having trouble following the logic (which, again I think is *pure idiocy*) that underpins the following thought:

1. Decrease taxes.
2. Increase spending.
3. Budget deficit rises.
4. Crisis occurs when 3 is unsustainable.
5. Voters prefer to cut services than raise taxes (see the ssrn paper). This has the effect of starving the beast.

What the Bush Administration did that was different than the usual STB was the insertion of step 2, for electoral reasons (voters like services, like free pharmaceuticals, and industries that pay for campaigns like increased govt. spending as well). I don't think they ever really concerned themselves with 4&5. But it gave them intellectual cover- any rational person would know that (ssrn paper aside) sometimes voters will raise taxes, not cut services. They also know that govt. programs, once started, are hard to end. And finally, they knew that the day of reckoning would come after this administration left office. But that's the theory.
9.1.2008 10:44pm
NI:
Trevor, I don't want to hijack this thread by changing the subject to AIDS aid to Africa, but to briefly answer your question: A person who is arguing libertarianism on principle would say that Africa is not the American taxpayers' problem, period, end of discussion. Someone arguing it on practical grounds (i.e., government programs tend not to work) would point out that the reasons AIDS has taken off in Africa are mostly the fault of the Africans themselves and until they fix them, government aid won't get the root of the problem. Those problems include a misogynistic culture in which males simply refuse to use condoms and practice birth control, religious fundamentalism (African bishops almost uniformly teach that condom use is sinful and have been known to publicly burn them), and government corruption in which the kleptocrats running most of Africa simply steal aid money.
9.1.2008 10:52pm
Alan K. Henderson (mail) (www):
Spending taxpayer money like a drunken teenager in Cancun on Spring Break with the parents' credit cards makes you a libertarian?

Infringing First Amendment speech/press rights and calling it "campaign finance reform" makes you a libertarian?

That's too surreal for me. I'm gonna read some Lewis Carroll.
9.1.2008 10:55pm
DavidBernstein (mail):
Because it makes no sense to first do number 2, just so you can MAYBE get to number 5, which would just be a reversal of number 2. If you can't follow that, I give up.

I have no idea why you're having trouble following the logic (which, again I think is *pure idiocy*) that underpins the following thought:

1. Decrease taxes.
2. Increase spending.
3. Budget deficit rises.
4. Crisis occurs when 3 is unsustainable.
5. Voters prefer to cut services than raise taxes (see the ssrn paper). This has the effect of starving the beast.
9.1.2008 11:06pm
name:
I don't think Krugman can fairly be read to say that Bush and co. are libertarians, just that they have a cynical view of government, in which they use their power to appoint their cronies to political positions and to reward spoils to their donors, rather than to try to solve the country's problems.

You may not agree, but the past 8 years have certainly provided a lot of evidence to support that view.
9.1.2008 11:08pm
DavidBernstein (mail):
(and if the idea is that a "crisis" would lead to lower spending than before #1, there is actually no reason to believe that. crises tend to lead to more gov't, not less. See Higgs, Crisis and Leviathan. Again, you may find people who say, let's keep spending stable while cutting taxes, and eventually spending will be cut, but you (or Krugman) can't find anyone who will say, "raise spending, cut taxes, create crisis, then hopefully cut spending."
9.1.2008 11:08pm
loki13 (mail):
DB,

For the last time, I *don't believe it works*. Do the repeated references to *pure idiocy* not clue you in? But given the presence of STB proponents in the administration, and given their observed actions, why are you acting surprised?

IOW, if a subset of proponents of STB believe that budget deficits (and crises, see the Laffer Institute) can help force the cuts to the government, why is it a surprise to you that the ideologically driven can twist this to focus simply on increasing the deficit (by tax cuts and increased spending) to do the same?
9.1.2008 11:18pm
DavidBernstein (mail):
First, I don't think there are "STB" proponents in the Bush Administration.

But for the last time, increasing government spending is not starving the beast, it's "Fattening the best."

IOW, if a subset of proponents of STB believe that budget deficits (and crises, see the Laffer Institute) can help force the cuts to the government, why is it a surprise to you that the ideologically driven can twist this to focus simply on increasing the deficit (by tax cuts and increased spending) to do the same?
BECAUSE IF YOU INCREASE SPENDING IN YEAR A, JUST TO DECREASE IT IN YEAR M, AT BEST YOU ARE BACK WHERE YOU STARTED!!!!!
9.1.2008 11:33pm
DavidBernstein (mail):
Now that I've got my frustrations out by "yelling," I will ask you to identify a single Republican individual who has argued that the Republican strategy should be to increase spending now, because that will lead to decreased spending later. I assure you, such a person does not exist, and, if he did, he wouldn't be a libertarian ideologue, but a Republican hack trying to justify short-term increases in spending to buy votes.
9.1.2008 11:36pm
David Warner:
Loki13,

"Sometimes, I think you outsmart yourself."

Sometimes, yes, you do. This, Loki, for you, is one of those times.

Starve the beast never included the "increase spending" step. That one is courtesy of Rove's vision of unending majorities and Laura's whispers in the ear.

For some insight into where "starve the beast" began, see here.

The moral of the story is that the beast doesn't starve, it just eats the next generation.
9.1.2008 11:36pm
TGGP (mail) (www):
Don't forget the "ownership society" ACORN-Fannie Mae love-fest that resulted in the housing fiasco.

I thought DB favored the Iraq war (and Randy "anarchist" Barnett more famously did), guess you're not a libertarian!
9.1.2008 11:37pm
Brooks Lyman (mail):
Two comments:

1) I believe that Stalin starved the Kulaks to death. Ammo is expensive. Are the wingnuts suggesting that the Democrats might actually spend some of our tax dollars to make the Kulaks' deaths a bit more merciful?

2) One of the problems with big government solutions to problems is that sometimes they don't understand the problems and so come up with solutions which are wrong or wasteful (or both). It has been suggested that the African "AIDS epidemic" is in large part the result of using HIV/AIDS tests that, while inexpensive, give a false positive on many other diseases that are endemic to Africa, with the result that medical resources and foreign aid are in many cases aimed at the wrong disease, and that money spent on eradicating Malaria and other common tropical diseases (which generally is far more efficacious) will save many more lives than concentrating our aid efforts on AIDS. I would like to think that people like Dr. Albert Schweitzer would have seen through this problem and spoken up.
9.1.2008 11:38pm
Johnn:
Prof. Morrison's responsed: "if Bush's support for government aid in this context counts as a data point pointing away from libertarianism, presumably a true libertarian would prefer that the government do something else. (If that presumption isn't right, then it would appear the issue has no libertarian valence one way or the other, in which case it has no place in your laundry list since it's irrelevant to the issue you've raised.)"

While I have talked with enough people to know that there is no "true libertarian" position, I believe that the most consistant response to the question of what a libertarian would prefer the governement to do is: "nothing." There is in fact a place on Professor Bernstein's "laundry list" and it is relevant to the issue of whether the Republican party acts consistantly with libertarian principles becauuse taking money from individuals and spending it is governemnt action, and governement action is what libertarians are primarily concerned with.

Judging from Morrison's review of Professor Barnett's book in the Cornell Law Review a few years back, I don't think he understands libertarianism or the arguments in favor of constitutionally limited government, so that may explain why his response (at least to me) fails to see how libertarianism is concerned with spending money in Africa.
9.1.2008 11:53pm
loki13 (mail):
DB,

I'm glad you feel better (really). However, not believing that there are those who argued for starving the beast within the Bush Administration is pure, um, revisionism. Push himself argued for the tax cuts by saying it would put Congress in a "fiscal straightjacket". Glenn Hubbard defended the actions of the administration on this basis as well. Then came the spending, and the "deficits don't matter".

We know the following:

1. The existence of "STB" as such a cornerstone of conservative thought that it was thought as self-evident by serious conservative thinkers (google the phrase on lexis search), and invoked by the President and his leading economic advisers to justify the tax cuts.

2. The concurrent, although later, rise in the belief that budget crises can cause a choice that will benefit tax cuts to the detriment of services, given individuals marginal utility (with some research being done by groups, incl. the paper I sent you to).

3. A sudden rise in spending, done for purely cynical reasons, as I outlined above, but now given plausible (and wrong) intellectual cover.

It's three card monte- now increased government spending is starve the beast, get it? And everyone falls into line.

I don't understand why this concept is so hard for you; that you understand it doesn't work is unsurprising, because it doesn't. That you are surprised that the administration used it as a justification . . . eh.
9.2.2008 12:27am
TDPerkins (mail):

(BTW, a tax cut without an equal cut in spending is not a tax cut, it is a tax shift.)


Not neccessarily. It is just as likely to be a future spending cut--or more precisely--tax monies, without taxes being increased, go to debt service and payment of principle.

Since tax revenues do seem to be going up as taxes are lowered, I think our taxes are no where near the peak of the Laffer curve.

And I have no idea why we even want to be at the peak when government should be as small as possible, and when in doubt, I'd rather err on the side of shrinking it.

Yours, TDP, ml, msl, &pfpp
9.2.2008 12:36am
Smokey:
loki13:

All those posts! Sorry you lack a life. But by all means, keep posting!

My schadenfreude drinks them like nectar.
9.2.2008 12:41am
Trevor Morrison (mail):
Thanks to those who have responded (including especially David, since he kicked this whole thing off) with their versions of what a libertarian administration ought to do re AIDS in Africa.

A comments section like this is obviously not the place to plumb the full depths of an issue like this, but I'll note that David does not appear to embrace, or at least not necessarily to embrace, what others have suggested is the simple libertarian solution -- that is, do nothing. That's because, as David seems to appreciate, collective action problems with hugely damaging externalities present special challenges for the libertarian position. And to me (an admitted nonlibertarian), that's what makes this an interesting and vexing question for the libertarian.

As for Johnn's charming claim that my review of Barnett suggests I don't understand libertarianism or the arguments in favor of constitutionally limited government, I'm happy leaving it to others to decide whether they agree. I myself did not find it difficult to grasp the arguments presented in Barnett's very fine book, and I don't think his response to my review really alleged misunderstanding. Sometimes people disagree even when they understand each other's claims. But whatever. We're now far afield of David's original post, and I don't want to divert things any further.
9.2.2008 12:45am
David M. Nieporent (www):
For the last time, I *don't believe it works*. Do the repeated references to *pure idiocy* not clue you in? But given the presence of STB proponents in the administration, and given their observed actions, why are you acting surprised?
1) There are no STB proponents in the Bush administration.
2) For the last time, STB doesn't mean something you think it should mean. It refers to something specific, and it's not what you're saying.
9.2.2008 1:01am
Shelby (mail):
Re African AIDS and libertarian solutions, I suspect the answer is the standard libertarian one: do individually or through voluntary associations what some people propose the government should do. Rather than channeling $10 billion through taxpayer-funded government organizations, seek out those NGOs that you think are best addressing the problem(s), and give them money and input. If none are doing a good enough job, get together with knowledgeable people and start a new one.

On this issue, at least, there's nothing special about US government dollars vs any other resources.
9.2.2008 1:13am
Clastrenster:
Not very familiar with Paul Krugman until reading this post, I looked into the article at hand. Though I can't speak to his other writings, it appears as though the original poster did not read the article, which was about the displacement of government with personality (referring to the awkward co-appearance of Bush and McCain in New Orleans awaiting disaster, instead of a well thought out response infrastructure that would work for places, say, just outside of New Orleans, too). That seemed a fine point, no?
9.2.2008 1:39am
Brian K (mail):
Decreasing taxes does increase the budget deficit, at least where we are on the Laffer curve.

this is what liberals tend to argue. conservatives, on the other hand, have been arguing for at least as long as i've been reading this blog that decreasing taxes actually increases net revenue, which would in effect decrease the budget deficit.
9.2.2008 2:03am
TokyoTom (mail):
David, while I think you may be right that Krugman wrongly seems to think that the Bush administration is a "we hate big government" crowd, presumably you've notice that the Republican party has and still does run against "big government", even though they've done a great job of pumping it up and directing the pork to friends?
9.2.2008 2:07am
Psalm91 (mail):
"So let me get the straight. The theory is that the Republicans will massively increase the size of government, but do so incompetently. They will then expect people to turn not against the Republicans, but against the government, resulting in ultimately a contraction in the size of government. That's pure idiocy."

No, it's called privatization, and it is has been very profitable for the cronies of the current administration, along with the other beneficiaries of the "Chicago Boys" "economic miracles". KBR and Blackwater, et al would never prosper is a competitive market economy.
9.2.2008 2:36am
David M. Nieporent (www):
No, it's called privatization,
No, it isn't. Privatization involves, you know, privatizing things. Not spending government money.
9.2.2008 4:21am
tsotha:

David, while I think you may be right that Krugman wrongly seems to think that the Bush administration is a "we hate big government" crowd, presumably you've notice that the Republican party has and still does run against "big government", even though they've done a great job of pumping it up and directing the pork to friends?


This is true. While there is a substantial portion of the electorate that would like to vote for smaller government, the Republican Congress from 2000-2006, along with Bush, have severely damaged the party's credibility on that point. On the other hand, it's unlikely they'll even come close to spending what Obama plans to spend.

I would suggest another possibility for "how to explain Bush". I think he was willing to trade anything away for support from Congress on the war. He clearly felt success in Iraq was more important than whatever damage a bloated budget would cause. Leaving aside the question of whether the whole adventure was a good idea, he may have been right.
9.2.2008 7:52am
SeaDrive:

That would be good enough, except that at the same time, they guaranteed they would pay market rates and NOT negotiate for bulk rates for the pharmaceuticals, thereby lowering the price with their market power.


I don't defend this aspect of Part D, but it is widely misunderstood. The idea was the Part D would be a privatized program. All the benefits are paid by insurance companies, and they can and do negotiate pharmaceutical prices. It's not a matter of paying whatever Big Pharma asks for. In addition, the insurers have a lot of latitude in which drugs they include and exclude from their formularies which gives them some leverage in their negotiations.

On AIDS programs in Africa, the Bush administration has a mixed record. They have promised a lot, but put near-fatal restrictions on how the money could be spent. As a result, they have not delivered the amount promised.

This is a curious thread. It's morphed at least three times from one topic to another.
9.2.2008 10:19am
loki13 (mail):
DB says there are no proponents of STB in the Bush administration. I gave him an example, and here's the full quote:

"so we have the tax relief plan, which is important for fiscal stimulus, coupled with Social Security being off limits except for -- except for emergency. That now provides a new kind -- a fiscal straightjacket for Congress. And that's good for the taxpayers, and it's incredibly positive news if you're worried about a federal government that has been growing at a dramatic pace over the past eight years and it has been."

That would be, uh, President Bush. I think he's a member of the Bush Administration. You can find the rest (I am sure).

This is why it's frustrating having a conversation with you- if i'm writing about Medicare Part D, you talk about Medicare generally. Then you shift to Medicare . . . in the 60s (without mentioning it). If I try to show the actions of people, you want their words. If I write about their words, you want their actions. If both, you ignore it. I am fully aware of what STB means; what I was trying to show was that the novel intellectual justification used by the current administration was *pure idiocy*. We both agree it isn't starving the beast.


I dunno Smokey- I go through long periods of time (months) with no comments. You?
9.2.2008 10:40am
A.W. (mail):
So, um, national defense is unlibertarian?

Of course your big point, that krugman's characterization is idiotic, is correct. but there is nothing unlibertarian about the liberation of iraq and afghanistan, or trying to make them into countries we don't have to invade again.
9.2.2008 11:24am
loki13 (mail):
A.W.

Yeah, libertarians were all for the invasion of Iraq. Heh.
9.2.2008 11:40am
karl newman (mail):
I know many won't want to hear it, but Obama will end up being more Libertarian than McCain-Bush. If you look at Abortion which is an extremely personal decision; choice is the Libertarian view. Domestic spying = bush/mccain, not very libertarian. The deficit with huge interest payments to come - not very Libertarian. Plus, GDP grows 9% higher per 4-year Democratic term vs. Republican. If supporting people who make 500K or more/year is Libertarian, then I stand corrected.
9.2.2008 11:43am
SATA_Interface:
To explain the Medicare angle (in support of DB's position): When it was enacted, the hospitals and doctors did not have a schedule of rates that Medicare enforced. It resulted in Medicare being deliberately overbilled to pay for more beds in hospitals or larger boats for doctors.

The patients didn't care as they were disconnected from being a healthcare consumer; the hospitals and doctors saw a sweet govt trough to feed from; and the Medicare officials were comfortable with not worrying about the budget being cut ever.

Any politician that voted against Medicare enlargements or proposed cuts were beset by senior citizen advocacy groups, and several lost elections based on the Medicare Part C position for catastrophic coverage.

The Medicare A/B was finally reformed to its current state where a schedule of rates apply to procedures, and the patient gets billed for a percentage of the cost. That kept the hospitals from adding excessive wings onto the building when no demand existed for an empty bed, and the doctors were forced to pass any inflated costs above the medicare rate onto the patient, which then led the patients to be consumers and move to less-expensive doctors - a market based price control. Some doctors won't even take Medicare due to that price control with the schedule.

Now I have not been able to dig into all of part D's particulars, but from what I've studied thus far, DB is correct. It is structured like the "old" Medicare where there is no govt-as-single-payer price control, and the "market" of the pharma oligarchs sets the price vs a schedule of rates. We already walked down that old road, and to get everyone on board with the massive entitlement at the cost of taxpayers, we sweetened the pot to pharma by giving them anything they wanted in terms of pricing. That was a deliberate choice when drafting the law.
9.2.2008 12:27pm
loki13 (mail):
SATA-

1. There's a difference between setting rates and allowing the government to purchase in bulk. That the government is prohibited, under the current law, from even negotiating like any other market participant is a travesty, and a giveaway.

2. When DB first brought up Medicare, I was unaware of what he was talking about, as he didn't cabin it to back 'in the day'. I am fairly knowledgeable about some topics, but when someone want to discuss Medicare policy, I don't normally default to how it was in the 60s or some other past period of time I wasn't even around for.

3. I would have preferred that no MPD was passed rather than the version that made it through.

4. As to your point about it being structured like the old Medicare; you are incorrect. There is a difference in markets between goods and services. Moreover, you cannot negotiate bulk rates for services (generally); hence the price schedules were instituted for overall medicare*. There was a perfectly good model for the pharmaceutical purchases- the way the VA was doing it.

*As an example- you cannot get a discount for 500 open heart surgeries. You can, however, estimate how much one should cost, and then base payment on that. This is decidedly different when you're talking about pharmaceuticals, especially when the products are often substitutes.
9.2.2008 12:44pm
SATA_Interface:
Loki, my point still stands. It was a giveaway to not set any sort of price control on the medications; either in negotiating bulk rates as the single payer, or forcing a specific cost schedule on a pill and it's off-brand cousin or generic versions.

The service concept is not decidedly different from the product. I need a pill; I need a surgery. Who controls how much each costs? The taxpayer via the govt, myself as the patient, or the supplier of service/product? It's a tug of war between the three, and all 3 are holding the rope to some extent. The old system had the supplier pulling, the taxpayer being dragged on the ground, and the patient not holding the rope at all. The new MPD system is quite similar in concept; there's a little more consumerism but not much.

Original medicare was structured that way for a very long time. It's a poster child for entitlement reform as a result and an example of how important consumerism is for the end-user. A welfare system where there's no emphasis on personal accountability in order to continue receiving benefits is a failure. A reformed MPD would be a very useful product for people relying on pharmaceuticals that fall outside the normal coverages of employer plans.
9.2.2008 1:06pm
loki13 (mail):
SATA-

Yes, but it's a debate about apples and oranges. I can guess that the original medicare debate was very different, because I know that health care costs as a general matter, and as percentage of GDP, were very different when it was enacted. I don't know any more than that, because I'm not really up on the legislative debates of every program enacted since 1930.

I do know what medical costs look like now. I do know what medicare looks like now. I do know what the VA prescription drug program looks like now. I do know that MPD was a boondoggle, and that has nothing to do with medicare back in the day (unless the argument is that everything we've learned since then has no bearing on today).

You are still unclear on the difference between goods and services. Under the negotiation plan, the producer still has a say in the price. They just cannot set an artificially high price. Should government pay wholesale, or retail? The pricing mechanism is different for services; while the government could, theoretically, set schedules for pharmaceuticals, they cannot bargain in bulk for services outside of common procedures in institutional settings.
9.2.2008 1:20pm
TGGP (mail) (www):
Is health care unlibertarian? It is when government is involved.

Some libertarians are anarchists and want to abolish the state in its entirety. Others are minarchists who think a minimal state is necessary. I fall into the latter camp although I am more extreme in that I favor the Articles of Confederation (or something even more decentralized and minimal) over the Constitution and militia rather than standing army for defense. A long time ago classical liberals like Bastiat regarded the military as basically parasitical and Herbert Spencer said he had no sympathy for those who hired themselves out to kill and got killed on the field of battle, but most don't go in for that sort of thing these days. Regardless of how the defense is provided, it has to actually be defense to pass the minarchist muster. Using the military to do social work like in Venezuela is right out. So is starting wars with other countries that haven't attacked you, occupying them and creating a new government. Libertarians don't think "The government should do this because it would be good", they think "What is the minimal amount of governing we can achieve?".
9.2.2008 2:27pm
roystgnr (mail):
[Right out] is starting wars with other countries that haven't attacked you, occupying them and creating a new government.

Is it? Libertarians are generally just fine with sending men with guns to capture and imprison a kidnapper; the same principle should apply whether the guy has two hostages, two hundred, or the entire country he's a dictator of.

I was against invading Iraq, but I didn't see any fundamental libertarian ethical principles at stake, just the worry that Bush seemed to be lying about his motivations and the pragmatic concern that we were likely to cause more damage than we would prevent. The elder George Bush knew he wasn't capable of fixing Iraq, but unfortunately one of the current President Bush's limitations is the inability to recognize his own limitations.
9.2.2008 4:12pm
wolfefan (mail):
hi -

thanks for the discussion. I looked up "starve the beast" on wikipedia and found a note regarding an article (which I haven't read) which may relate to the discussion...

"Some empirical evidence shows that such a strategy (STB) may be counterproductive, with lower taxes corresponding to higher spending. An October 2007 study by Christina D. Romer and David H. Romer of the National Bureau of Economic Research found: "[...] no support for the hypothesis that tax cuts restrain government spending; indeed, [the findings] suggest that tax cuts may actually increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases."[5]"

Here's the formal citation:

^ Christina D. Romer, David H. Romer. "Do Tax Cuts Starve the Beast: The Effect of Tax Changes on Government Spending. National Bureau of Economic Research. Working Paper No. 13548. October 2007.

and here's the link from wikipedia:

http://www.nber.org/papers/w13548
9.2.2008 6:01pm
Smokey:
*As an example- you cannot get a discount for 500 open heart surgeries.
Sure you can. It's called "negotiating," and it works wherever a financial transaction is involved. Doesn't matter if it's buying a fleet of cars, dealing with a group of dentists, or heart surgery in an HMO.

When laser eye surgery first came out, the cost was over $10,000. Now it's less than one-tenth that -- despite huge medical cost inflation in other subsidized procedures since laser surgery first appeared.

The huge cost reduction in laser eye surgery is due entirely to marketplace competition. Health plans don't cover eye correction surgery. The government doesn't subsidize it. So marketplace competition forces the price drastically lower.

See, competition works. Libs don't believe that, but it's true. Government subsidies are anti-competitive, über-expensive, and they force costs to rise, not fall. And gov't healthcare -- the most ridiculous extreme -- would bring about the most expensive medicine of all, along with declining quality.

Anyone who still believes, against all evidence, that the suffocating bureaucracy that would accompany and envelope such a giant program wouldn't continue to grow exponentially, probably also believes in the Tooth Fairy, Santa, and that Uncle Joe Stalin only did what had to be done.

There is no substitute for marketplace competition.
9.2.2008 7:52pm