A must read for every Conservative/Libertarian

The linked article is, IMO, an important read for all of us in the think tank/free market movement. I’ve often started feeble attempts to write a nearly exact commentary, and thankfully, some one wrote it for me.

It encompasses many of the things I’ve attempted to communicate in various debates/discussions with colleagues at Heartland and out on the Free Market Rubber Chicken circuit. It applies to libertarians as much as conservatives.

MODERNIZING CONSERVATISM cogently lays out exactly why the conservative movement is heading toward rough waters.

While I don’t agree with every aspect of prescribed remedies, the need for a reformation of the movement is 100% accurate, IMO.

Some titillating excerpts…

“Long-term evidence indicates that the starve-the-beast strategy not only fails, but may make the problem of unrestrained spending growth worse, suggesting that a “serve the check” strategy might be a more effective means of curbing the growth of government spending. The simple explanation for this seeming paradox is that the starve-the-beast strategy currently allows Americans to receive a dollar in government services while only having to pay 60 cents for it.”

The “no new taxes, ever, for ever and ever, Amen” is actually driving the nation into the dirt. Every dime of debt, deficit spending, and borrowing, is a tax of some sort. We may have reached the point where stopping a tax increase while increasing spending leaves America worse off than before.

My prescription has always been a tax swap combined with an entitlement swap. This is, of course, too obscene for the followers of Grover Norquist to countenance.

Too bad. Grover and the left are both wrong. We need some revenue increases to buy off the left to enact real entitlement reform, and they need to understand that failure to transform (not “reform”) Medicare, Medicaid, and Social Security are imperative. Absent some compromise, the US fades as a premier nation.


“While the activists and political strategists must think and act in terms of victory as a practical matter, conservative and liberal intellectual leaders should not. There are three dominant political facts of our age that conservative thinkers (and also liberals) need to acknowledge. The first is the plain fact that neither ideological camp will ever defeat the other so decisively as to be able to govern without the consent of the other side. This is not merely my political judgment; it is sewn into the nature of America’s basic institutions and political culture.”

If you can’t accept the above paragraph, then you may as well skip the article. You are mistaken to do so, of course, but you may well be beyond the reach of reason. We aren’t going back to 1910, 1880, or 1789, and no, the Articles of Confederation were NOT superior to the Constitution.

I believe the article can (and perhaps, should) be taken into account in terms of reformulating some strategies in the free market movement. Even if you believe in the ability to get back to a “First Way” fundamentalism, the only possibility would be to accept, and implement, the direction Hayward is pointing.

15 thoughts on “A must read for every Conservative/Libertarian”

  1. This is a sensible take in regard to the politics of the US as things are now. But the implication is that the best we can get is some compromise in the middle between what conservatives are willing to tax, spend, and borrow, and what liberals would like to do in those regards. What if there just isn’t enough money to support that compromise level? Liberals tend to either raise taxes above the rational maximum sustainable level, or borrow, or both (or inflate, which is doing the same by stealth), while continuing to grow expenditures, past the point of no return. We can watch what happens next going on in Europe right now.

    The only way we might make things work is by radically decentralizing these decisions. Liberals can have their zones of social democracy but we will not bail them out if they can’t make them work. Social democracy works better on a small scale in any event – – Denmark works much better than France. Even within similar cultures, Uruguay works better than Argentina.

    However, any kind of compromise will be a big fight. Liberals always want the whole enchilada.

  2. James,

    I would start by saying that there isn’t enough money to sustain the current level, so moving to a compromise, even if unsustainable, is an improvement over the current scheme.

    Further, I am not arguing in favor of capitulation to the left. (though I know that Hayward and I will be accused of same)

    My position is, in my view, one of strength, as we hold the whip hand. They need our productivity for their vision to succeed. Therefore, I envision a compromise where WE win the “whole enchilada.”

    Of course, I reject a return to 1789 as the definition of a “win.” To me, winning means that we individualize the welfare state (vouchers for education, accounts for Soc. Sec. and medical care) while capping the growth rate of government. (a Balance Budget Amendment is small beer compared to Constitutionally capping every government entity to inflation + population growth)

    I view this “individualization” of the welfare state as the decentralization you speak of.

    My primary reason for supporting and promoting this article is that I’m 100% convinced that “starve the beast” Norquistism has failed miserably. Something new is in order.

  3. This may be the explanation for Pat Toomey’s support of “Revenue increases” in the deficit committee. It has enraged conservatives like Hugh Hewitt but has seemed reasonable to me. Of course, the Democrats have rejected it, which I suspect was the intention. On days when I am optimistic, I believe that the American voter “gets it” and the socialists are headed for a whipping next year. Then I think about California.

  4. “The first is the plain fact that neither ideological camp will ever defeat the other so decisively as to be able to govern without the consent of the other side.”

    I would thought this was false on the face of it. Where since the New Deal has the Left been delivered disastrous defeats (note the plural–I can think one) that reversed their gains and caused them to give up on achieving some goal? Where as for the alleged “right” or “conservatives,” they seem to say “‘no, no, no,’ then ‘I was for it all along.'”

    Unless the Supreme Court reverses the expansion of the Commerce Clause and the Left concedes, yup, we wrong, I’ll pretend to side with the winning side: the people who admire Castro, Ortega, and Chavez; who hang Mao ornaments on their Christmas trees; who hate Christians and Jews and want them out of the Holy Land and out of the public sphere; who advocate for mass murder and advise presidents; etc.

    ““Long-term evidence indicates that the starve-the-beast strategy not only fails…”

    Short-term, too as anyone who lived in California under Brown-Reagan-Brown knew.

    “They need our productivity for their vision to succeed.”

    Only in the long run. Soviet hell lasted for several generations despite this fact, and it can happen here: that the Left so crushed humanity and decency that America is irrevocably severed from its liberties.

  5. If I understand what Bruno is saying correctly, the USA is going to hell, the only real question is whether it’s going to be in a handbasket or a rocket sled.

    Well, thanks for cheering me up!

  6. It’s certainly true that “starve the beast” has been the proverbial, abject failure. As long as deficit spending is an option, then reducing taxes will not limit spending. Otherwise, the author seems to be of the opinion that conservatism must kill itself and become liberalism-lite. David Brooks might write the foreword to the book.

  7. Bruno said,

    My prescription has always been a tax swap combined with an entitlement swap.

    That prescription has never been filled. There have been plenty of tax increases but no spending cuts.

    This is, of course, too obscene for the followers of Grover Norquist to countenance.

    The followers of Norquist understand that there is always an agreement to raise taxes in exchange for spending cuts. They also recognize that the tax increases always occur and the spending cuts never do.

    If folks want to be taken seriously on fiscal issues they have to understand and explain that there have been no spending cuts.

    They need to understand that advocating for tax increases in exchange for spending cuts is an unpleasant combination of historical ignorance, policy naivete and political gullibility.

    Something the “followers” of Norquist understand that too many “conservative” policy “realists” don’t.

    Washington’s Never-Ending Scam of Fake Spending Cuts

    But, as you can imagine, things are never what they seem in Babylon on the Potomac. As I’ve repeatedly noted, a spending cut means something different for politicians than it does for those of us in the real world.

  8. Bruno, I am just afraid that we will end up with spending and debt levels above what we have now. Any sustainable net reduction will be a substantial victory.

    However, there is one fundamental truth in this article that does need to be understood. If a clear, unambiguous social-conservative platform is placed before the American people, they will reject it by something like 60 to 40, maybe more. This is also true of a clear, unambiguous libertarian platform, or a clear, unambiguous left-liberal platform. Last Saturday’s debate was disturbing, as everybody seemed to be competing on the grounds of who is purest, not on who could actually accomplish the most meaningful progress in the right direction. The increasing “big sort” or bubble-like nature of current American society is giving people the illusion that most Americans share their fundamental beliefs, because most of the people they listen to do.

    I am working toward something different: a framework based on America as it actually is rather than as we would like it to be in our dreams, in which we can create a tolerable national economic framework and foreign policy, and in which we can decentralize enough so that people can shape their immediate surroundings more to their liking. For various reasons too detailed to summarize here I think that this is most practically done by territorial decentralization.

  9. Duracomm,

    You make an interesting point that deserves to be addressed.

    First, I view a slowing of the rate of spending to be a positive development, and slowing gov. spending to BELOW the rate of GDP growth will accomplish our goal.

    Second, I tire of the whiny argument that “we always lose these swaps, so we can’t engage in them.” The fact is that the Tea Party has provided the GOP with enough of a backbone to force a) slowing the growth of spending, and b) forcing automatic cuts if agreement isn’t reached.

    We won two rounds this year, IMO.

    I’m fully aware of the shell games and tricks played by the DC elites in both parties, and that these “wins” are less than they appear. The fact is things are slowly turning in our favor.

    Third, Grover is a total failure, and here is why. Winning tax battles with out winning spending battles is a loss. Deficits must be dealt with by either a) future tax increases , b) inflation/printing, which is an indirect tax, or debt, which is, again, a future tax increase.

    Grover wins battles, but only has set the stage for losing the war. In my view, the entire free market movement has blown it big time by focusing on taxes instead of spending.

    To be sure, 30 fat years of growth and innovation have lulled too many of us into thinking the “debt doesn’t matter.” This is only true if economic growth outpaces the growth of debt. We have just hit that wall, and MUST cut spending. Hence my view that now is the time to force the necessary cuts in entitlements and possibly cap the growth of government.

    “Caving” on a tax increase to gain real structural tax and entitlement reforms is a no-brainer. A serious public policy intellectual wouldn’t even think twice about the positive values of such a trade.

    I concede that a “good” trade is much more difficult to actually win than it is to theorize, but I also point out that the risk of trying is much lower than the risk of the status quo, where tax increases will be forced politically in any event.

    I argue that we should play to win, as “playing not to lose” is, and has been, to the detriment of our culture.

  10. MK,

    I would welcome the opportunity to tell Hugh Hewitt and Grover Norquist that every dime of deficit spending is an eventual tax. Given that eventual taxes require interest payments (another eventual tax), taxing now can be potentially less damaging that taxing later.

    {Pausing to allow exploding heads to reconstitute}

    Given that Grover/Hugh are smart people, they would respond with two cogent points. First, they would argue that returning the economy to a growth path would potentially allow for debt growth to fall below economic growth, which I would concede is a sustainable scenario.

    Here is the problem. Even with the Reagan, Clinton/Gingrich, and Bush “booms,” the off the books entitlement debt growth dwarfed the nominal “sustainable” debt growth of those years. Further, I’m convinced that our obscene tax system cannot generate necessary revenues under any scenario. We are toast if we keep this tax system. Too few pay, and we are too reliant on the top 5% to fill the coffers.

    Second, Grover/Hugh would argue that tax increases never go to lower the deficit, they only go to spend more. This is true, and it is up to negotiators like Ryan and Rubio to change that dynamic.

    This brings me back to why this was an important piece for Hayward to write. We have no choice but to win the political battle for a) transforming entitlements, and b) getting a new and better tax system. We cannot win that battle if we cling to Grover/GOP/Think Tank “no taxes ever” dogma.

    To do so is to guarantee we get the taxes anyway, with no reforms.

  11. Bruno, true, but even if you slow down the rate of descent into a debt hole that’s too deep to dig your (collective) way out of, the act in itself could doom any hope of actual recovery for a number of reasons:

    1) Statists/leftists (the format category including many Republicans) would see this as capitulation on the part of the fiscally conservative and could then (probably successfully) block any further attempts at reform on the basis that “we’ve done enough already”. All you’ve managed to achieve is buying some time.
    2) Having delayed the inevitable collapse, the sense that “something must be done” may quickly fade even among those who see that something must be done. Perhaps enough so to ultimately doom the effort to resolve the situation.
    3) Give statists/leftists an inch and they’ll take a mile. Dishonestly, if necessary.
    4) Even if this plan could allow you to reach some kind of equilibrium, it may be a pretty miserable equilibrium. You need to swing the other way: to growth, to prosperity. It’s hard to do that by compromising with the people who, in a few short years have caused the debt to explode and the economy to crater.

    In short, my feeling is that compromise may be a short-term win but a medium- and long-term loss.

    There may be no solution that doesn’t involve compromise. Which may mean there’s no good solution at all. Or perhaps I am wrong. I hope so.

  12. Its only part of the approach

    The missing side is to cut the Scope of Federal Government
    When Government does less, it needs less money.
    And the private sector is free-er to make more money, and therefore more taxes

    “LIBERATE THE FREE MARKET” !!!!!!!!!!!!!!

    See also
    “If the authoritarian anarchists (which, weird as it may be, is what they are) insist on using the language of occupation, so be it.
    That means the rest of us can use the parallel language of liberation. When the police clear out occupations, we should refer to the event as the liberation of those spaces.
    We don’t need America’s cities to be “occupied” by law-breaking extremists. We need America’s cities to be liberated……”

  13. Small government vs. big government is a typical U.S. (and slightly less so UK and Australian) fixation. Most of the world is rather concerned about good government vs. bad government.

    The artilcle is mostly about alternative ways to strive for a “small government”. It recognizes and ignores at once that the majority does want the New Deal and Great Society instututions and does not want a minimal government that does not help those in peril.

    The article also neglects the problem that not only reaching the desired conditions is difficult, but it’s also questionable if the desired conditions lead to the desired outcome without additional measures (regulation).

    The ratio between CEO pay and worker pay grew from 30:1 40 years ago to in excess of 300:1 today. The middle class is being exploited by a more powerful minority (and I don’t mean social security recipients). These are outcomes that will persist without ‘welfare state’ programs.
    The economy needs to offer enough decently paid jobs and the government needs to regulate against market failures if a small government shall reach a desirable social outcome.

    The problem is of course that many New Deal/Great Society programs ARE effectively counters to market failures (such as market failure adverse selection in the insurance business).

    The core problem of conservatives is that there’s a disconnect between way and objective. Abstinence programs against teen pregnancies are a typical example. Almost everyone agrees that teen pregnancies are unfortunate in modern education-dependent societies. Abstinence does not work, though; the effect is even opposite.
    The feedback check that should ensure that failures are discarded and better means preferred is somehow broken due to an overemphasis on ideology and simplification.

  14. @Bruno Behrend:

    “I’m convinced that our obscene tax system cannot generate necessary revenues under any scenario. We are toast if we keep this tax system. Too few pay, and we are too reliant on the top 5% to fill the coffers.”

    You do realise that

    a) Almost all pay taxes or contribute otherwise to public revenues? Even those who do not pay federal income taxes do pay state taxes etc.

    b) The reliance on the rich as taxpayers has developed because of their disproportionate share of national income?

    c) Those who pay less than they receive are actually really poor and cannot pay more? They need better-paid jobs (or even any job) first, before they can pay more taxes (and then they’d do it with the given tax system, too).

    Let’s face it; you parrot Republican talking points of the last few months.

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