Editor’s note: Below is the video of economist Steve Moore’s speech at the David Horowitz Freedom Center’s 2013 West Coast Retreat. The event was held February 22nd-24th at the Terranea Resort in Palos Verdes, California. A transcript of the lecture follows.
Steve Moore: All right. I want to talk a little bit about the sequester and the economy. Joe, if you wouldn’t mind putting up some of these slides I want to show you? Let me start with this, on the sequester.
And I want to simply say that what is going on now with respect to the overheated rhetoric is like nothing that I have ever seen in the 25 years I’ve been in Washington. In fact, what you’ve seen in the last couple weeks is just a prelude to one of the greatest, the most massive propaganda campaign by the Left you’re ever going to see — planes falling from the sky, prisons opening up, school children not having schools to go to, not being immunized — on and on and on and on.
I was really annoyed this morning, I read the front page of the Los Angeles Times. Here’s what they say about the sequester — each side had expected cooler heads to prevail, assuming the other would set aside its political preferences and compromise to prevent the economic problems that are widely expected from a sudden reduction in the flow of federal funds. If the sequester goes through, some economists believe this will lead to 750,000 lost jobs.
Now, ladies and gentlemen, this is bull crap. This is the most outrageous lie. And you know, I’ve got to say this — of all the things I’ve done in my life, one of the things that I’m most proud of is that twice a year, when I would go to San Francisco, I would have dinner with the great Milton Friedman, who was the greatest economist the last hundred years.
And I’ll never forget my last dinner with him. He was 96 years old. He and Rose were just such an adorable couple, and there’d just be four or five of us having dinner. And I remember the last thing I asked him, the last dinner we had — I said — Milton, if you could wave your wand and we could do three things to reenergize the American economy, what would you do? And he said, without hesitation — first, free trade. Number two, he said, was school choice. As most of you know, this was something he dedicated the later years of his life to. And he said — the third thing we have to do to make the economy grow faster is to cut government spending. And I said — well, Milton, by how much? And he said — Steve, by as much as possible.
And I thought that was an incredibly insightful insight given the fact of where we are today, where everyone is talking about the fact that all these government spending cuts are going to hurt the economy.
Now, look, I listened to the congressman this morning, I agree entirely with him. I am for a strong defense. I do think, by the way — I lived in the shadows of the Pentagon — I believe there’s enormous amount of waste in the Pentagon. And I think we can cut out the waste without cutting the bone.
But you know, I’m going to state this point very succinctly — government spending cuts are good for the company; they’re not bad for the economy. And it’s just very — let me just give you some statistics on this that demonstrate this point. I looked through the last 75 years, I just went through the historical tables of the federal budget. Just wanted to give you some historical numbers. In 1946, after World War II ended, the government spending as a share of GDP, and at the peak of World War II, was about 45 percent of our GDP. So almost half of everything we were spending during the war years was government, obviously, to win the war.
Government spending as a share of GDP went from 45 percent of GDP in 1946 to 19 percent of GDP by 1948. Isn’t that an amazing thing? We cut government spending by almost 30 percent of GDP, well over 100 times greater than the cut that they’re talking about that’s supposed to take place on March 1st.
And yet, what happened to the US economy in the post-World War II years? The economy actually boomed. This was something that totally shocked the Keynesians. Because one of the things that was going on during the war years was that all these Keynesian economists — the same people who are saying this today — were saying — oh, my God, the economy’s going to go into a second Great Depression once the war is over and we don’t have all this government spending. And in fact, just the opposite happened.
The same thing if you look at what happened under President Reagan. President Regan cut government spending from about 23 percent of GDP to 20 percent of GDP, even with the increases in military spending. And the economy went through its greatest boom in the last 75 years.
And I would make the case this actually happened under Bill Clinton and Newt Gingrich. If you look at what happened to government spending in the 1990s, we saw a dramatic reduction in government spending. Government spending fell by about four percentage points of GDP. And the economy went through an incredible boom in that era, too.
Now, let’s put this in perspective. We’re talking about somewhere in the neighborhood of $75 billion of spending cuts. $75 billion of spending cuts is somewhere in the neighborhood of about half a percentage point of GDP. This is nothing. This is nothing. And the idea that this is going to torpedo the economy, I think, is very wrongheaded.
Point number two — I want to mention something about Obamacare. Because one of the reasons I think we’ve gotten off track as a movement is we have stopped talking about Obamacare and what a dreadful law this is, and the dramatically negative impact this is going to have not just on our economy but also on our health.
And it’s interesting, I was looking — if you look at the 2010 election, as you know, this was, as the congressman said this morning, one of the great elections for the conservative movement in history. What was the number-one issue in the 2010 election? It was Obamacare. There’s no question about it. The number-one issue that Americans had on their mind when they went to the polls in 2010 was this dreadful healthcare bill.
You know, in 2012, the polls show that Obamacare was even less popular by 2012 than it was in 2010, but it wasn’t an issue. Why? Why wasn’t it an issue? Because the Republicans had stopped talking about it. Right? In fact, I saw a poll — Kellyanne Conway showed me a poll that one third of Americans had thought that Obamacare had already been repealed. They thought it’d been repealed. Why? Because Republicans never talked about it.
One of the things we need to do as a movement — every single sentence that comes out of Republicans’ mouths — especially this next week, as the sequester approaches — is to say of course, the first thing — whatever the question is — you know, Democrats are so much more disciplined than we are — whatever the question is, the first answer to whatever question it is every Republican politician is asked, the answer should be — of course, the first thing we have to do is repeal Obamacare. Right? They should do that in a very disciplined manner.
By the way, I have a piece in the Journal, if you haven’t seen the weekend education that came out yesterday. We looked at the impact that Obamacare is having on hiring, and it is really scary. We talked to, literally, scores of people who own Dunkin Donuts and Burger Kings and McDonalds. And these are people on the front line of the economy — Red Lobster Restaurants and so on. And what they are saying is because of the Obamacare law, they will not hire a 50th worker. Because if you hire over 50 workers, you get affected by this law. So we call these people 49ers. You’re going to see businesses across America that are capping their — in fact, it’s already happening — they are capping their employment at 49.
But there’s another part of this story — that the law also says that if you hire someone for over 30 hours a week, that worker is considered a full-time employee. And if you have over 50 employees, you have to provide health insurance for that person.
And so what all of these businessmen and -women are telling us is, guess what? They are going to start hiring workers for only 28, 29 hours a week, and they’re not going to hire people for 30 hours a week. This is a big problem for our economy. If you look at the employment statistics over the last five years, there are now eight million to 10 million Americans that are what we call involuntary part-time jobs. They can’t find a full-time job. Obamacare is going to make that significantly worse.
Just one quick story — I gave a talk a couple weeks ago to the International Franchise Association. These are people who own these franchise restaurants. And one of the things that — after I gave my speech, these two guys came up to me, and they said, you know, they both live in Houston. And one of them owns Wendy’s restaurants and the other one owns Burger Kings. You know what they do now? They have a job-sharing arrangement where the workers work 20 hours a week at the Burger King, and they go across the street and they work 20 hours at the Wendy’s.
I mean, you know, we applaud that. But that is a terrible thing for America — you can’t hire full-time people.
Last thing — I wanted to show you the other big cancer. Some of you have seen this. This is just showing you what happened with the American economy. Look, the big thing that happened in the American economy over the last 50 years was Reagan. Right? Reagan turned the economy around. You can see what happened in the stock market from the dreadful ’70s.
By the way, another talking point that our movement does not make enough is, Barack Obama says, over and over and over again — every speech he gives, he says — I inherited the worst economic crisis since the Great Depression. Right? We’ve all heard him say that a thousand times. It is not true. Ronald Reagan inherited the worst economic crisis since the Great Depression, you can see that.
How many of you remember 20 percent mortgage interest rates? Remember that? And 14 percent inflation? And you can see that on this scale. And look at what happened when we changed directions from Jimmy Carter to Reagan — we saw the biggest economic growth spurt in American history.
If you’ll show the next chart — some of you have seen this before. I always show this chart because I think it’s the — and I gave this exact presentation two weeks ago to the House Republican Conference at the retreat, and they were blown away by this. The blue line is the top income tax rate in the United States. You can see we went from 70 to 50 to 28 percent in the 1980s under Reagan. So we’re now about half of where we were in the 1970s. Look at the red line. Look at the red line. This is the share of taxes paid by the richest one percent. Isn’t this an amazing chart? The lower the tax rates have gone, the higher the share of taxes paid by the rich.
I mean, it’s an amazing thing. I wish Tim Geithner and Joe Biden and Barack Obama were sitting right there, I could show this to them, because they just don’t have their tray tables in the upright and locked position when it comes to this stuff.
And look at this. Mr. President, with all due respect, if you want to get more tax revenues out of rich people, cut their tax rates, don’t lower them. If you show the next one — I mean, I’m sorry if you’ve seen me recite this before, but it’s my favorite quote from recent modern American history. John F. Kennedy said — it is a paradoxical truth that tax rates are too high today and tax revenues are too low. And the soundest way to raise the revenues in the long run is to cut the rates now.
How many Democrats in Washington today believe that? They want to raise the rate to 40, 50, 60 percent. I just want to show you one last chart. By the way, go back for one second.
This is what’s happened to our monetary supply. I know this is kind of a boring subject. But ladies and gentlemen, look at the money creation that has happened at the Fed. I mean, this is an abomination. We have seen a more than doubling in the amount of dollars in the American economy over the last five years. A lot of the enormous debt that has been issued over the last five years under the last year of Bush and the first four years of Obama has been financed, ladies and gentlemen, by the Federal Reserve printing money and buying up the debt. This is what we call monetizing the debt. It’s what Argentina, Bolivia, Mexico and other countries do when they get in trouble.
I would make the case to you this story doesn’t have a happy ending. And by the way, the Fed is now very well engaged in QE3.
But the last chart I’m going to show you is the next one. And this is just a very interesting one for people to ponder. This is showing what happened to interest rates over the last 50, 60 years. You can see what happens. Reagan comes in when we have the 20 percent mortgage interest rates. And then, over the next 30 years, you see this very steady and healthy decline in interest rates — so much so today, though, that we have interest rates now — a 10-year Treasury bill is selling at a 1.8 percent interest rate.
Now, this is — I would make the case that this is not a sign of economic health. This particularly low interest rate is a sign of economic weakness. And here is why. When you look at that 1.8 percent interest rate on the 10-year Treasury bill, what that is telling you, ladies and gentlemen, is that — what is the inflation rate in the American economy today? The inflation rate is running somewhere at about two and a half percent. What that means is — and by the way, we as economists used to believe that this was an impossibility. What this is telling you, ladies and gentlemen, is we have negative real interest rates in the American economy today.
For the non-economists in this room, let me make this very simple. What this is saying is that everyone in this room, everyone around the country, is buying a 10-year Treasury bond from the United States government. And the United States government is promising us, in 10 years’ time, they’re going to pay us back less money than we lent to them. Now, ladies and gentlemen, that is psychotic behavior, right? Why would anybody do that? Why would we lend the government money, and they’re going to give us back less money 10 years from now? Anybody know the answer to that question?
It’s fear, exactly. It’s that four-letter F-word. Fear. This is the last point I’m going to make, and then I’ll turn it over to the rest. The overriding sentiment in this American economy today, what is holding back what should be a vibrant expansion — my lord, this economy’s been in a five-year depression, thanks to Obama — the only thing that is holding back our economy is fear. And why is there such widespread fear?
And by the way, I would add, it’s fear and risk aversion. Everybody is totally risk averse. You have American businesses that are holding onto $1 trillion to $1.5 trillion of capital that’s sitting on their balance sheet that is not getting re-injected into the economy. And I would submit to you, ladies and gentlemen, the reason that is happening is because of the person we’ve elected to the White House. This man is so anti-business, so anti-growth, so antithetical to all of the ideas that we believe in.
You know, I wrote this piece in the Journal about a year ago called “Reaganomics vs. Obamanomics.” There’s no comparison — both Presidents took over during an economic crisis. At this stage of the Reagan expansion, the US economy grew at 6.8 percent, 6.8 percent. We’re growing at negative right now.
That is why our ideas triumph, that is why we have to — the last thing I told the Republicans at that retreat two weeks ago, I said — look, we as conservatives don’t expect you to win every fight. We know you are against a very formidable opponent and enemy. But we do expect this — fight, fight, fight for Republican principles and conservative principles.
John Lott: I was in Colorado this last week, at the invitation of several state representatives there. And the big talk was about how just over the previous few days the Obama Administration had been calling up individual members of the Democrats in the state House there to kind of twist their arms to go and vote for gun control bills that were there. It’s the first time I’ve heard of where the White House will call up a state representative someplace, threaten to get somebody to run against them in a state House primary next year if they vote the wrong way on a bill, or to campaign for them if they vote the right way. And my understanding is the White House — in particular, Vice President Biden, making the calls — was able to get seven members of the Democrats in the state House to switch their votes. And it was enough to get the four gun control bills that they had up there being passed.
And the irony is some of these bills were things like making you have a pay a fee for buying a gun. And one of the amendments that the Republicans put up was to have an exemption for poor people so they didn’t have to pay the fee. But the Democrats voted all together, as a result of this pressure, to make sure that there’d be these fees even for poor people buying guns.
So anyway, as I said, it’s the first time I think I’ve heard — maybe Steve or somebody else has heard — a White House getting involved so heavily. And this is the type of lobbying you do for a member of Congress, not for somebody in the state House in a state passing a state bill. But it’s my understanding, they so want these gun control bills to pass, not only because they want them passed, but also because they’re going to use them to go and fight for the federal legislation, saying — look, even a relatively pro-gun state like Colorado is adopting all the bills that the President wants to have passed at the national level.
So one of the things, I guess, I’ve stopped getting amazed by is just how dishonest the Obama Administration is with using numbers and what have you. And the gun debate is actually no different. I’m just going to focus on the one part of the debate that seems to be — they seem to think most likely will pass, and that’s these background checks, the so-called universal background checks.
And there are two claims that have been the central arguments that the Obama Administration has made. The first one has been that 40 percent of gun sales don’t go through background checks. And the second one has been that about 1.7 million prohibited individuals are prevented from buying guns because of the Brady Act. Both of the claims are completely false. And it just has to do with kind of obvious changes in language that I think anybody should be able to understand.
But you can see the President, for example, on the 40 percent point said — but it’s hard to enforce the law when as many as 40 percent of all gun purchases are conducted without a background check, that’s not safe. Biden — I mean, I could give you a couple dozen US senators who’ve made the same types of arguments.
Now, here’s the deal. If you push them, what they’re referring to is a 1997 study by the National Institute of Justice during the Clinton Administration. And it was a small survey of about 251 purchases of guns over a three-year period from 1991 to 1994. And what that survey said was that 36 percent of all transfers of guns were done without background checks.
So there’s a huge difference between talking about transfers and talking about sales. The vast majority of transfers fall into gifts and inheritances. For some reason, I don’t think it would have quite the impact if the President had said — look, there’s a lot of parents giving gifts to their sons of guns, and we really need to crack down on them.
But in fact, almost all of the inheritances and all of the gifts are within family gifts and transfers. And then, of course, they rounded up the 36 percent to 40 percent — that’s minor.
But the thing is, the Brady Act, the federal background checks, didn’t even go into effect until February 28th, 1994. So most of this period of time, almost 80 percent of the period, covers times when the federal Brady Act, with the federal background checks, wasn’t in effect.
And it’s even worse than that. I mean, I could go on about the problems with it. But if you were to just take this survey, and look at just sales, the way the President uses the term, it’s about 13 percent of sales would not — you know, again, most of this pre-Brady — would not have been going through federally licensed dealers. I think if you adjust some other things, you would be talking about a number that would be, at highest, in the low single digits. And I’d be happy to go through that.
There are a lot of other problems with this. One of the big problems is we’ve had a huge change in the number of federally licensed dealers. If you go back to ’92, ’93, there are about 284,000 dealers. By the end of the Clinton Administration, you’re down to about 100,000. The reason why that’s important is that almost all that 180,000 that were eliminated were so-called kitchen table dealers, who would go and sell guns from their house or at a gun show or something. And surveys that I’ve done talking to those dealers from that period of time indicates that, you know, it’s not like they’d have a sign or tell anybody that they were federally licensed dealers. And the survey was merely asking buyers whether they thought they were dealing with licensed dealers, not whether they actually were or not. And I think if you corrected that, it would adjust the numbers even further.
And you can see for the inheritances — about 93 percent of the gifted guns were within family, about 91 percent of the inherited guns were within family.
Now, what about this other claim? President Obama says over the last 14 years it’s kept 1.5 million of the wrong people from getting their hands on guns. Senator Schumer said background checks have “blocked 1.7 prohibited individuals from buying a gun.” Senator Leahy, others I could go through. And again, it’s just a big change in the language here. Rather than saying prohibited individuals who were prevented from buying a gun, what they really should’ve said is that there were 1.7 million initial denials.
And I think the way to think about that a little bit is — you may remember, the late Senator Ted Kennedy was on the no-fly list five times. Apparently, there’s somebody who they really wanted to stop from flying who had the same name, Ted Kennedy. And would we count — so those were what I would call initial denials in terms of flying. He later flew. But would we want to count those five times that Senator Kennedy was stopped from flying as five times we stopped a terrorist from flying? I presume not. I presume the President wouldn’t use that type of terminology. But yet, he uses that exact terminology when he’s describing gun purchases.
And the reason why it’s so dramatically wrong is that when you actually go through the annual reports for the [nix] system, what you find is that it looks like about — you can’t tell precisely because they go out of their way to make things vague — but it looks like about 95 percent or so of these initial denials are false positives.
So why is that important? Well, the reason why it’s important is for the vast majority of these initial denials, it may simply be an inconvenience. You know, they’re stopped for months from being able to buy a gun. But for some significant portion — it’s small; I’m not going to say it’s large — for some portion of that 1.7 million, being stopped for months being able to buy a gun could be a significant risk to their safety. They may be individuals who are stalked or threatened and feel the need to be able to go and get a hold of a gun quickly for self defense, and they’re being stopped from doing that.
What you really need to compare is the number of criminals who are stopped from buying guns versus the number of law-abiding citizens who are being prevented from being able to get access to a gun relatively quickly. And I think when you look at these numbers, it’s pretty lopsided.
You can look at the numbers for 2010. I could go through the whole list, but there were basically 62 cases that were referred for prosecution. Prosecutors declined to go forward with 18 of those. Thirteen resulted in guilty pleas or verdicts.
But that’s not the end of the problem. Because there’s another number that’s about five to seven times larger than these initial denials each year which are just delays, which are not instant checks. They’re about — a lot of checks go through in two hours; those are classified as instant checks. But about five to seven percent of all the purchases take longer than that — almost all of those take three days. And even a three-day delay for this very large number of individuals can have some impact on safety. My research shows that a delay of that long is associated with about a two percent increase in rape rates and about a two percent increase in aggravated assaults against women. Again, it’s not a huge number. But it’s showing that the net effect of these types of provisions actually are to hurt safety.
So there’s one question I just want people to ask and think about. And that is — can you name one place in the world that’s banned guns that’s seen murder rates fall? I can’t find it. Every place that we have crime data, both before and after a ban, we see murder rates go up by at least some and, many times, very dramatic increases.
I think Americans have some familiarity with what happened in Washington, DC and Chicago. They may not know the magnitude of the changes that were involved there. But usually people on the other side will say — well, those weren’t fair tests — that unless you go — because they’ll concede that murder rates and violent crime rates soared after the bans, but they’ll say the problem was you didn’t have the ban everyplace, that as long as criminals could go and get guns from Maryland or Virginia, or from the rest of Illinois, or from Indiana, that’s the type of thing that’s going to happen. You’re going to have those bad effects.
I don’t really think that explains it. The fact that they could get those guns from those other places to begin with — it may explain why murder rates didn’t fall, but it’s not going to explain why a ban caused a big increase in murder rates in those places. And besides, you can look around the world. And I’ll just show you, if we have time, some graphs from places that — even island nations, where the entire island adopts a ban, no neighbors to go and blame — you see the same phenomenon in increased murder rates. You see that happen time after time.
And finally, I would just say, if they really believed that murder rates were going to go up after the bans, it would’ve been nice if they’d kind of let us in on that before they passed the bans. And I could go — you know, when DC and Chicago had the Supreme Court cases, there was long quotes — I’ll give you 30 pages of quotes about people predicting disasters afterwards.
Now, I want to point out — there’s one huge difference between DC and Chicago in terms of the Heller and McDonald Supreme Court cases. Both of them struck down the gun bans. That really hasn’t been that important. Because the new rules that have placed are so restrictive, you literally only have a few thousand people in either DC or Chicago that have been able to qualify for getting a handgun, and those tend to be fairly wealthy people. And my research shows it’s basically the poor minorities who benefit the most from owning guns. And they have almost zero change in their handgun ownership after those bans have been struck down, because it costs so much money to go through the process.
The big change for DC, though, is that prior to the Heller case, it was a felony to use a long gun defensively. It was a five-year felony to actually chamber a bullet in either a rifle or to put a shotgun shell in a shotgun. When the Supreme Court struck down the handgun ban, said — look, if we’re going to let the law stand that it’s going to be a felony to actually load the gun, then it doesn’t do any good to say people have a right to self defense. And so they struck down the gun law.
The reason why that’s important for DC is that in 2008 you had about 72,000 adults in the city who were licensed and registered to own long guns in the city who now — all the sudden, about a quarter of the adult population, who are now instantly able to go and use those guns for self defense when it would’ve been a felony for them to have done it just before the Supreme Court case.
Anyway, just to show you some things — there’s lots of ways I could go and show you the crime rates. One simple way for DC is just to say — look, how did DC rank among the top 50 largest cities? Prior to the ban, DC ranked around 20th or so. After the ban, in the 30 years, it was either number one or number two in terms of murder rates, half the time; two thirds of the time it was in the top four. Nothing remotely similar to that prior to the ban.
Another way to do it is just to take the average for DC’s murder rate relative to the other 50 largest cities. Prior to the ban, which went into effect in February ’77, the murder rate was falling. Afterwards, it rose. You can see it bouncing around 40 to 60, finally about 80 percent higher when you get about 13 years afterwards. When you get a little bit farther than that, it shoots up even higher — there’s about four years when there was a crack cocaine epidemic, and that helps explain it. I think because individuals weren’t able to defend themselves, the crack cocaine epidemic hit DC worse than others, but we can talk about it. But even after the crack cocaine epidemic, DC’s murder rate relative to the other ones was very high.
Now, I just want to show you something really quickly here. And that is what’s happened after we changed the laws in DC, and particularly this quarter of the population that’s now able to use guns defensively. I just have the first seven months of the year. I could do it over the whole year if you wanted to, but just the part of the year — because in ’08, the law was only in effect for the first seven months, we just want to compare the first seven months. So it’s ’07, ’08, ’09, 2010, 2011, 2012.
In the last seven months that the ban and the gun lock laws were in place, you had 107 murders, homicide. In ’09 it was 82, in ’10 it was 70, in 2011 it was 62, and this last year it was 51. That’s a 52 percent drop in murder rates after the change that was there. Violent crime rates have fallen across the board.
And there are about five interesting things I could tell you here, but I’ll just tell you one. This is a phenomenon I’ve seen generally. And that is, when civilians are allowed to own guns, gun crimes fall more than non-gun crimes. If you look at robberies without guns, it was essentially flat. Robberies with guns fell by 11 percent. Aggravated assaults without guns fell by four percent; aggravated assaults with guns fell by about 31 percent. And you can see Chicago — its murder rates were falling relative to other cities prior to its ban, rising afterwards.
And this is for England. You can see it was flat, rising afterwards. And then it fell here after about seven years. And the reason why that did is because there was about a 20 percent increase in the number of police officers right at that period of time; it had nothing to do with the delayed effect from the ban.
Here’s Ireland. You can see the huge increase in murder rates right after the ban occurred there. This is for Jamaica. And I could go on.
But anyway, I’ll just mention one other quick fact. And that is, if you look at all these multiple-victim public shootings in the United States since at least 1950, with just two exceptions, all these multiple-victim public shootings are taking place where guns are banned.
Look at the “Batman” movie theater shooting this last summer. There were seven movie theaters within a 20-minute drive to the killer’s apartment that were showing the premiere of the “Batman” movie. The killer didn’t go to the movie theater that was closest to his home — there was one that was only 1.2 miles away. He didn’t go to the movie theater which advertises itself prominently as having the largest auditoriums by far in the state of Colorado. You’d think if he wanted to kill a lot of people on a premiere night, that would be a great place to go. Instead, he went to the single movie theater that had posted signs banning permit-concealed handguns.
And that’s what we see time after time in these mall shootings or other things, where these killers have multiple venues to choose from — they keep on choosing the one place where the potential victims aren’t able to go and defend themselves.
We’re going to do healthcare in a second when we get up. Okay.
So it’s basically the destruction of what’s been the best healthcare system in the world. You know, we can look and see things like pharmaceutical companies shutting down entire research divisions or hollowing out the ones that are remaining. You can look at things like the 20 percent increase in health insurance premium costs from January 2011 to the end of this last year. If you take the Bureau of Labor Statistics Consumer Price Index, which adjusts for quality, healthcare insurance premiums were actually falling from the end of 2007 to 2010, up until they got to the point where the Obamacare regulations started kicking in. And you can see the huge increase that’s occurred since then.
But probably the biggest problem that’s going to happen is just kind of the end of private insurance as we know it in January. And one of the big things is that we have two sets of rules that are just going to pretty much end it fairly quickly, I think. One is the changes in preexisting conditions. Essentially, there’s going to be nothing that the insurance companies can do to kind of penalize you or make you pay in any way for preexisting conditions, or even waiting for benefits from it.
And the second thing is we’re told that there are going to be these penalties if you don’t have insurance. There are two things about it. One is these penalties are very small. If you’re talking about somebody who’s making $50,000 in 2016, it’s going to be about $1,600. If you’re making 100,000, it’s going to be about 2,900. The cost for the cheapest individual insurance plan in 2016 is going to be about $7,100, so there’s a big gap there.
But even then, the big problem is the IRS has no enforcement rules for making you pay even those amounts of money. The things that they can normally do for making you pay if you’re in arrears on taxes — things like imposing liens, seizing assets, freezing bank accounts, charging civil or criminal penalties — they’re explicitly forbidden from doing that in the Obamacare legislation. The only thing they can do to make you pay even these relatively modest fines is — if you have paid too much in taxes and are supposed to get a rebate, then they can hold your rebate. But you can fix that by just reducing your withholdings.
And the way to think about this is it’s going to be like — if you could wait until you got into a car accident before you got car insurance, and then as soon as you got the car fixed you dropped the car insurance again, what would happen to the car insurance market? The price of car insurance would essentially be the price of fixing the car each time. You’ll have some people who are going to feel bad that they’re somehow abusing the system by waiting to get insurance until they’re sick. But after awhile, they’re going to feel like schmucks. Because they’re going to be paying — you know, if you’re talking about family insurance, the difference is going to be like $10,000 a year or so that they could save by simply waiting until they got sick to go and buy the insurance.
And as more and more people take advantage of that, the remaining health insurance prices are going to rise, and you’re going to eventually force even these individuals who are trying to do the right thing, not trying to game the system, of eventually dropping it.
The other thing is, what are we giving up here? And I’ll just give you briefly something here. Often people think about healthcare in terms of life expectancy. That’s not really the right way to look at it. Because there’s so many things that individuals do, like obesity — Americans take a lot of risk in terms of driving accidents, things like that. But there’s not much healthcare can go and do and try to solve.
The right way to look at the problem and say if you’re sick, what’s your probability of living, let’s say, five years with cancer, or some other types of disease? And the bottom line is if you’re sick, the country you will have wanted to be in in the past was the United States. And there’s no doubt about that.
I just have some numbers here for cancer. This is for data from 2000-2002. This is the survivor rate for the United States for prostate, melanoma, breast, uterine cancer, colorectal cancer and so on. And you can see the huge differences on average between the survivor rate in the United States and the survivor rate in Europe for having these different types of cancers, the five-year survival rate. If you have any of these types of cancers, the country you would want to be in in order to get cures has been the United States.
The other thing just to look at a little bit is — if you look at the polls, Americans have personally loved their own healthcare that they’ve been receiving. The reason why they’ve been upset with healthcare generally in the country has been the perception that the uninsured haven’t been well taken care of. This is just a survey from 2007 from USA Today. And you can see here that 89 percent of Americans were personally happy with their healthcare. Ninety-three percent of those who had recently been seriously ill were satisfied. Ninety-five percent of those who had suffered chronic illness were satisfied. But only 44 percent were satisfied with the overall quality.
The amazing thing is that the uninsured were generally happy with the quality of the healthcare that they were receiving. Even the uninsured who had been ill were generally happy. Sixty-two percent of the uninsured were satisfied with the quality of their healthcare. And if you look at people who are both uninsured and very dissatisfied, that’s only about two percent of Americans.
Since I think, because of the disaster that I described to begin with we’re going to be moving very quickly to a single-payer plan, I just thought I’d compare the United States with Canada. And it turns out, by most measures, Americans who are insured are extremely happy. But the Americans who are uninsured are about as happy with the quality of healthcare that they receive as Canadians are with theirs.
And you can break it down in terms of your ability — you know, the quality of care, your ability to get an appointment with the doctor, ability to see top-quality medical specialists, how satisfied are you to get the most sophisticated medical treatments. The uninsured in America, by all those criteria, are almost exactly as happy as the Canadians are with their healthcare.
Thank you very much for your time.
William Voegeli: Brother Greenfield has directed me to address the question of how eight years of the Obama presidency will change the scope of the welfare state in general and federal entitlement programs in particular.
I assume that all of you woke up this morning already quite conversant with the grim economic implications of that trajectory. You know more than you did even then, now, thanks to Stephen Moore. So I would like to focus instead on the political implications, specifically the risks of the growing welfare state to the American experiment in self-government.
The liberal project, now in its second century, rejects the idea that democracy is inherently precarious, that fear permeates our founding documents, especially the Federalist Papers. But liberals have dismissed it as an overwrought excuse to prevent government from enacting an endless list of social improvements. Thus, the cure for the ailments of democracy is more democracy, according to the philosopher John Dewey.
The political scientist Harvey Mansfield has a bracing explanation for why James Madison was right and Dewey was wrong on this point. Good, small-d democrats think democracy can be good, Mansfield wrote. And when they see it as not, they take responsibility for reforming it. To do this, they must think that good government as a standard is above democracy. They must not think that government is automatically good merely by being democratic, as this belief can make them both fanatic in their zeal for democracy and complacent as to its behavior.
Good government encompasses many things. But one of them is always that government pays its bills. In order to do so, it must align the benefits it promises to people with the burdens it imposes on them. Establishing and maintaining that alignment obligates political leaders not to indulge but to disabuse citizens of the fantasy that generous benefits are compatible with insignificant burdens.
Barack Obama seemed to acknowledge, at a high level of abstraction, the importance of such discipline when he said in 2007 that to reach out to citizens who’ve lost trust in their government but want to believe again, it was imperative for the Democratic Party to tell the American people what they need to hear instead of what they want to hear. So far, so good.
By the fall of 2008, however, Obama was telling voters something that sounded much more like what they wanted to hear than what they needed to hear. Specifically, candidate Obama made what he called a firm pledge two months before the election — no family making less than $250,000 a year will see any form of tax increase under my administration, he said. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.
Well, the problem with exempting 97 percent of American households from any federal tax increase is that it makes it impossible to pay for the expensive obligations that were baked in the cake when President Obama took office in 2009, much less the expensive obligations that government has taken on since then, Obamacare chief among them.
But don’t take my word for it. The New Republic magazine’s Timothy Noah, a zealot for income redistribution, wrote in 2012 that — if Obama does not relent and seeks tax increases on the middle class, the President “can forget about achieving meaningful deficit reduction.” After winning reelection, the term-limited President had the opportunity of a lifetime to tell the people what they needed to hear instead of what they wanted to hear. With the Fiscal Cliff deal, however, he responded by making his reckless campaign promise of 2008 even more reckless, agreeing to exempt not 97 percent of Americans from federal tax increases, but something more like 99.5 percent.
Now, this approach could be fiscally sound, leaving aside all questions of its economic impacts and justice, if the President and his party would advocate, or at least tolerate, recalibrating Social Security and Medicare and other entitlement programs, and federal spending generally, until those outlays could be sustained by revenues from a tax system that takes more money only from a sliver of the population. But of course, they haven’t done that.
And so, America’s current majority party opposes the tax increases that would make their spending plans work and opposes the spending cuts that would make their tax system work. That a party could embrace such imbecilities while winning more elections than it loses justifies the fears of 1787 that self-government is fated to traverse thin ice forever.
The economic and governmental threats that come from liberalism in practice proceed from essential features of liberalism in theory, ones which guarantee that the new era of responsibility President Obama promised in his first inaugural address will always remain beyond the horizon. Assert, as liberals have for 80 years, that people have rights to social welfare benefits, and we cannot be shocked when demands for those rights routinely exceed the resources made available to satisfy them.
Conservatives believe that rights are what they are. Liberals believe that rights are what we say they are, that they change over time as we interpret new circumstances. Franklin Roosevelt said in 1932 — the task of statesmanship has always been the redefinition of civil rights in terms of a changing and growing social order. By 1944, FDR felt that the social order had changed and grown to the point where the 18th century roster of rights, such as freedom of speech, freedom of the press and trial by jury, had proven inadequate to, in his words, assuring us equality in the pursuit of happiness. In his State of the Union address that year, FDR proclaimed a second Bill of Rights which included the right to a useful job, a decent home, adequate medical care and a good education. Though his list was extensive, FDR left the door ajar by stipulating that the second Bill of Rights included “these and similar rights.”
Indeed. In 1943, one of the New Deal alphabet soup agencies, the National Resources Planning Board, had urged recognition of its own honor roll of social welfare rights, including the right to rest, recreation and adventure.
Such pie-in-the-sky promises either mean nothing or mean a lot, including things that are ominous. Conservatives think markets are efficient and productive but favor limited government for the more fundamental reason that the only alternative to it is government that’s unlimited, unlimited with respect to both the ends it pursues and the means it employs.
Though disappointed at the 2012 elections, conservatives still believe that electoral democracy deserves to be politically determinative. It does not follow, however, that we are compelled to respect democratic outcomes as metaphysically dispositive. If 51 percent of the voters endorse the proposition that two plus two equals seven — which is a rough summary of last November’s results as they pertain to fiscal policy — those of us still convinced that two plus two equals four have been rebuked but not refuted.
The conservative mission to sustain our experiment in self-government by discerning and resisting democracy’s self-destructive tendencies remains. Patriotism and republicanism — two sides of the same American coin — require prosecuting that mission with all the intelligence and determination we can summon. In the arenas of policy and politics, there are many things we can do, including many we have yet to do often or well enough.
There are, however, only so many things we can do. Conservatives cannot guarantee victory — as Winston Churchill said — amidst graver challenges, but only deserve victory. We will deserve and hope to achieve victory by taking with the utmost seriousness our duty to transmit the republic founded in the 18th century to Americans of centuries to come so that they may join the honored ranks of those who have defended and preserved it.
Michael Walsh: One of my favorite figures from gangland history — I’m kind of a historian of gangland, which is why I now write about politics — comes from Chicago, lesser-known gangster named Murray the Camel Humphreys. Murray the Camel Humphreys has the distinction — at a time when the Irish, the Italians and the Jews ran the rackets in America — of being the only Welsh gangster in American history.
So a dubious claim to fame. But he did say one thing that’s so important that we need to remember as we head into the excitement of the second term of Barack Hussein Obama. Murray said, talking to reporters — if you ever have to cock a gun in a man’s face, be sure you kill him. Because if you don’t, the next day he’s going to come back and kill you.
And that was the ethos of gangland, that was the ethos of the Capone mob, that was the ethos of the Chicago political establishment. And it’s still their ethos. We have to understand where they come from in order to be able to fight them.
So we’ve heard the word “fight.” Steve said it. Senator Sessions and I were talking about it the other day. I think we all agree — we don’t mind losing; we do mind not fighting. We want our guys out there, in the arena combating, with a clear understanding of the nature of the enemy, which is not a word I’m afraid to use — and how we can beat them, which — I’ll give you some suggestions at the end of my little talk — and what they want to do with us.
Because the first thing you need to know is that everything that’s happening to you today is on purpose. They mean it. They have waited for this moment since 1965.
Now, David Horowitz and I go back to the ’60s together. We know these guys. I’ve watched this movie for 45 years. And this is the moment they have been waiting for all their lives. They think that in Barack Obama they’ve found the perfect avatar to create the world that they dreamed of in 1965, the free speech movement at Berkeley with the revolutions of 1968. This is their time, this is their moment. I believe the President even said that. Take him at his word.
In other words, we are in a fight. And how do you fight? Well, one of my heroes is a good Irish Catholic — Archbishop John Hughes, in the 19th century. 1844 John Hughes, the first Irish-born archbishop of New York — the first archbishop of New York born in Ireland — was faced with a nativist threat to Old St. Patrick’s Cathedral, which is down on Mott Street. And the nativists were threatening to come and burn down the church because of all the anti-Irish sentiment in New York City at the time. And the Archbishop went and gathered a couple hundred paddies with pitchforks and torches and clubs and knives, and whatever other weapons they could get. And he said to the nativists — if you touch a brick on this church, we will burn your city down. Have a nice day. Guess what? No trouble at St. Patrick’s Cathedral.
Later on, President Lincoln sent Archbishop Hughes to London during the Civil War with a message for the English, who, as you know, were thinking about coming into the war on the side of the South, certainly supporting the South because of the cotton and the need for cotton in the mills of England. And Archbishop Hughes said — you really need to stay out of the American Civil War. The English said — why? And he said — because if you don’t, and if you try to raise troops in Ireland to come and fight, you will have so much trouble with the Irish community in America it’s not worth your while to try it. And the English, oddly enough, agreed with Archbishop Hughes and did not come into the Civil War on the side of the Confederacy.
That’s fighting. You must — now, I grew up in the Marine Corps, so naturally I would think this way — that you must meet force with force. And you must know the nature of your enemy, and you must be able to call your enemy by his name, because he calls you an enemy. Why is this always a one-way street? Right? Why do we get punched, and they just punch away? Why don’t we fight?
I want to read you something really quick that I wrote the night of the election in 2008, on National Review Online, where I’m usually on the corner Monday through Friday. We got this — this was after the defeat was clear — the old fashioned way — we earned it. The other side took the fight to us, and we never took the fight to the other side. Honorable campaigns are for losers.
Another point — age matters.
Thank you. McCain ran an honorable campaign because he never really understood in his heart that the other guy had no intention of doing the same thing. So he didn’t get Obama’s generation or David Axelrod’s. Obama would lie about public financing, “oppose gay marriage,” but also oppose Proposition 8 and never see it as morally contradictory. The world McCain understood and operated in — and I would say now, by extension, the entire GOP establishment — is vanishing, and tonight is visible evidence.
And finally, understand once and for all the old media is part of the Democratic Party now. Ignore it. Never send Michele Bachmann onto “Hardball” again. You all remember how she got cut up so badly by Chris Matthews. Never send Sarah to play nice with Katie. We need to develop and create our own workarounds — Fox, talk radio, NRO, et cetera; and use them. Don’t play by their rules — make your own. And that’s what we absolutely must do.
Now, as you know, in Hollywood, we have a super-top secret — oh, gee, maybe I shouldn’t — yes, a super-top secret organization of Hollywood conservatives. And as one of the ones who’s pretty much out of the closet, I sometimes meet with the new kids. And they say — well, you know, when we feel pressure, what should we do? What should we do with all those lefties? And I say — oh, it’s simple, just punch them in the face.
Well, not physically, unless you, of course, want to. But punch them in the face metaphorically. Representative Gohmert was talking about bullies. That’s how you deal with bullies. You punch them in the face, you break their nose, and then that’s usually the end of the problem. The Democrats are our bullies. And we continually don’t punch them in the face.
Let’s face it — the Democratic Party, as I like to say, is a criminal organization masquerading as a political party. It’s always been that way. Let’s go over a little bit of the history, shall we? It’s the party of segregation — of slavery, segregation, secularism, sedition. It’s antithetical to everything we believe as patriotic Americans. As someone just said, patriotic Americans, Republicans — two sides of the same coin — I think Bill said that.
They stand in opposition. Well, let’s put it this way — you can argue that Aaron Burr, who was the founder of Tammany Hall — the first Vice President for President Jefferson — was in a sense the first Democrat — what did he do? Oh yeah, he murdered one of the Founding Fathers! I mean, this is a great start to a political party!
During the Tammany Hall reign — which I’m proud as an Irishman was mostly an Irish criminal organization, but it was also the Democratic machine in New York, and of course elsewhere around the country — George Washington Plunkitt — who didn’t write a book, but there’s a book called “Plunkitt of Tammany Hall,” which distills all the wisdom of Plunkitt and the Irish gangsters who ran New York City machine politics — said — what’s the Constitution among friends? And this is their attitude to the Constitution, and it remains their attitude to the Constitution to this day. The only thing I’m surprised about, having been through all this since 1965, is that their loathing for the Constitution is now so out and so proud.
You heard someone mention Professor Seidman’s attack on the Constitution, which was in the New York Times. They’re now — they’re swarming. They really feel this is their moment. I think that’s the most important thing for you to take away today is that they are at their zenith. And they can’t wait to finish the job, which is to crush you.
Therefore, a couple years ago, I wrote, under my pseudonym, David Kahane, who’s a crazy lefty 30-something screenwriter in Hollywood who has a column in the National Review and manages to get every single thing wrong — I had him write a book called “Rules for Radical Conservatives.” And I’m often asked — what should we do? So let me just give you the 10 rules, and we can kick them around later on if we like.
Here they are. First rule — know your enemy, his intentions and his weapons; and use them against him. I got some blowback on this when I wrote this book, and I was being interviewed here and there. And they said — Mike, Dave, or whatever your name is, are you saying we should actually stoop to the tactics of the Left? And I said — you’re goddamned right, we should.
If you don’t play by their rules, you’re going to lose.
I saw a note on something I wrote or somebody wrote, saying — in World War II — as you may know, if any of you had fathers fighting World War II — in the Pacific theater, it was as brutal a war as we’ve ever fought. Our side took heads, took scalps, gouged out Japanese eyes, cut their teeth out, wore them in necklaces around their neck, wore skulls on their belts. Came home, never talked about it again. An old man wrote in, and he said — we didn’t make the rules in the Pacific theater; the Japanese did. We just played by the same rules.
Now, that’s a really brutal thing. Well, (inaudible) we can’t (inaudible), you know — we bought the [meme] that conflict avoidance is the most important thing in life. It’s not. Fighting back is.
So start by using their own tools against them. Become what you behold. Be like them. Just believe what we believe. The culture is the message, so seize it.
As you know, I worked for Andrew Breitbart, the late Andrew Breitbart, the anniversary of whose death is coming up on March 1st. And we created the Big Journalism website. And Andrew was — as a Hollywood guy, as an LA guy, was obsessed with seizing the culture. It’s very important. Ben’s talked about it, other people have talked about it — terribly important. Send your kids to Hollywood, make them novelists. Don’t make them all go into business school. Come on, guys, we need some reinforcements out here on the West Coast.
Rule number four — get on offense, and stay on offense — take no prisoners. No prisoners, don’t be nice to them. I like to distill this rule down to the phrase — treat them with exactly the amount of respect they treat you — none.
Rule number five — let the dismantling begin. To all the congress people here, we will believe you’re going to cut the budget when we see wreckers balls outside the Commerce Department and the Education Department, and you tear those buildings down.
Until then, we don’t believe you.
At all times, think constitutionally. If they’re going to make the Constitution their whipping boy, let’s defend the Constitution.
Rule number seven — adapt the time-honored conservative message for a new kind of America, a new kind of American. That has to do with immigration. That’s a whole other thing. But let’s believe in our own country and the power of America to transform what used to be foreigners into Americans. They did it for the Irish, they did it for the Italians, they did it for the Jews. We can do it for the Mexicans, we can do it for everybody else who comes here. Believe in your own country.
Rule number eight — I love the anecdote about Speaker Boehner –
– get better officers.
Rule number nine — never stop fighting till the fight is done, a great David Mamet line from “The Untouchables.”
Rule number 10 — you all know it — the fight’s never over. Let’s fight!
Steve Moore: You know, I’ve been speaking at these conferences now for at least three or four years in a row. And I keep making this wrong prediction. So as an economist, I’ll admit I was wrong. Every conference for the last four years I’ve predicted that interest rates are going to go up, and they keep going down. And it’s interesting — anybody know the last time interest rates were this low? The Great Depression. The Great Depression. And gold didn’t do all that well in the Great Depression, either.
I think that I’m going to stick with my wrong prediction. If you guys are nice enough to have me back, one year from now or five years from now, or 10 years from now, I’ll bet anybody $100 in this room — any and all takers — that interest rates will be higher, inflation will be higher, and gold price will be higher. Anybody want to take me up on that?
So I just think that — and by the way, if I’m right about that, one of the reasons this fiscal situation is so dangerous is — the only thing that’s even holding us up right now is — who’s the biggest debtor in the world? Who is the biggest beneficiary of these low interest rates? Uncle Sam, right? And if we — just to give you a sense of how much trouble we’re in — if I’m right and interest rates start to rise, even if we, let’s say, have a 200- to 300-basis point increase in interest rates, which would only bring the rates back to a normal range — you know what, every 100-basis point increase in interest rates raises the 10-year deficit by $1 trillion. So a 300-basis point increase in interest rates raises the debt by another $3 trillion on top of all the money we’ve got.
I want to make one other quick point — I know we’re running out of time. But I want to make one optimistic point. And this is a point I meant to make before, and I ran out of time. The one really positive thing that’s going on in America, that I think is something we should all keep an eye on, is the red state-blue state divide. To just cover this in a minute and a half — the red states in this election got redder; the blue states in America got bluer. And now what you are seeing, to cut to the chase, is — I believe in the next 10 years, every Southern state is going to eliminate its state income tax. So you are going to have an entire region of the country that is going to be income tax free. Think about that.
By the way, there are five states right now in the South that are already looking this year at eliminating their income tax — being like Texas, being like Florida, being like Tennessee. If that happens — and by the way, all the states in the South are for right-to-work. States like California, my home state of Illinois, New York, Rhode Island, Massachusetts — those are all non-right-to-work states. What you are going to see, I think, over the next two, five, 10 years, is a continued very rapid migration of capital workers and jobs out of states like California.
And by the way, how do you screw up this state? I mean, really.
This is such — I mean, I’ve had such a great time here this weekend. And what an incredible place California is. Only politicians could screw this place up.
And so I do think this is going to force — this is the ingeniousness of our federal system, right, that we have 50 laboratories of experimentation. And what is going to happen as a consequence of this is it’s going to force states like Massachusetts, New York, Rhode Island, California to change or die. I really believe that. And the one other thing I’d invest in right now is real estate in no-income tax states, because that’s where everybody is headed.
John Lott: Well, I wanted to answer Michael’s question. I guess I trust markets [a fair amount]. I would just look at the long-term bonds, and they seem to indicate very little belief that inflation’s going to be picking up there.
You know, the monetary base, obviously, has shown the big increase that Steve’s shown. But if you look at broader measures of money supply, like M2 or whatever, there’s been relatively little change that goes on there.
And, you know, I do agree with the quote that Steve brought up to begin with, particularly about Milton Friedman. And Friedman used to — of course, tells you how long ago this quote was — but he used to say he’d rather have a budget of $500 billion than, let’s say, have a trillion without any taxes and have it all financed by deficit. Because his argument was, you know, kind of the total spending there is telling you what the total tax burden is ultimately going to be, whether it’s going to be now or in the future, the deficit really just says the taxes are in the future versus now. And it’s the total taxes that are going to determine the incentive to go and invest in work that people have.
And finally, I just want to pick up on one thing that Steve just said about the red and blue state divide. One of the reasons why I think Democrats feel so strongly about gun issues is — you know, it’s kind of like gun owners are to the Republicans, or NRA, as the unions are to Democrats in terms of getting people out to go and work on campaigns. And they’re willing to go and look at these things in a long-term thing there.
And I think one of the reasons why they’ll do things like put taxes on people able to own guns is that they think — if I can discourage people from owning guns in the future, I’m going to go and make it — it’s going to be weakening one of the important Republican bases that are there.
But anyway, thanks very much. Trying to turn the red states bluer, I guess, over time.
Steve Moore: By the way, the way they’re going to try to do that — this is the Left’s strategy is to federalize everything, so that the distinctions between the states — that’s why they’ve done — what are they doing with Obamacare on Medicaid? They’re basically bribing every state to join this system, even though in the long run it’s probably going to be a bad deal. I mean, if you’re a Republican governor, it’s very hard to pass up 95 percent of the costs that are going to be picked up by Uncle Sam. And that’s why we have to resist this federal impulse to federalize everything, which is part of that strategy, right?
William Voegeli: Let me address the very good question about liberals’ intentions, whether they’re benign or malign, the liberal worldview.
The word “compassion,” etymologically, means to suffer together. Now, together is not the same as identically. If I’m walking down the street and see a man with a sign that says “I haven’t eaten for three days,” I feel bad. But I don’t feel hungry, I feel sorrow and agitation. And I have, as a result, in a strange way, a sort of self-interested, or at least a self-regarding, motive for putting a dollar in his cup. When I do so, I proceed down the street feeling better, feeling less bad.
I think the problem with the politics of compassion, the problem with the liberal agenda and worldview, is that this business of alleviating the bad feelings the compassionate, those who behold suffering, have unfortunately does not necessarily have to do — is not necessarily tightly connected to the sufferer’s improvement of their situation. And so you have the roster of failure, as you mentioned — things like affirmative action and the welfare state — that have all managed to make the purported beneficiaries worse off, but have done so at the time of making the purported benefactors feeling — I’m a good person, I’m a nice guy. I support nice things.
When various disasters happen, such as the Newtown shootings, or the Lehman Brothers crash of 2008, the cry goes up — the government has to do something. But the problem isn’t that the government isn’t doing enough things; the problem is that the government isn’t accomplishing enough things.
And it’s not accomplishing enough things because it has no rational disciplined alignment between its objectives and its mechanisms, so that what we need is not to endlessly broaden the government agenda, so that we’ll feel better about having done something — whether or not we’ve accomplished something — what we need is a more thoughtful and disciplined awareness of what the government can and cannot do and confine it to a limited number of things that it can do well, and insist that it do them well, rather than tolerate a system where the government miraculously manages to be simultaneously overbearing and ineffectual.
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