David R. Henderson  

Notes from the Monterey Tea Party

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On April 15, I went to one of the few demonstrations I've ever been to: the Monterey, California Tea party. I didn't know what to expect. It happened on what seemed like the coldest day of the year. The temperature was 50 degrees but a ferocious wind made it feel like the high 30s. So I went in my ski jacket, the first time this year that I've felt the need to wear it. The turnout was quite high: I would put it at 500 people. What was refreshing was that there was a wide range of ages and people seemed to having a genuinely good time. There were too many American flags for my taste but the high point was the signs, mostly homemade and carrying a wide range of slogans. My "End the War. Cut Taxes" sign was the only antiwar sign in the crowd, but the looks I got were more quizzical than hostile.

Part of what helped the press see it as a libertarian event was my friend Lawrence Samuels, who set up a literature table and handed out hundreds of buttons, dozens of posters, and scores of his new book.

I wondered how the press would report it, but I was pleased when I found out the reporter for the Monterey County Herald was Larry Parsons. In conversations with him, I've sensed that he's what's now called a "liberal," but you can't tell that from his reporting. When he covered a campaign to raise the county sales tax a few years ago and our small group of libertarians, conservatives, and assorted low taxers fought it off, he covered us fairly. (I've written about this here, here, and here.) Sure enough, he did a good job. What was best about his report is that he captured the fun people were having. He also gave prominence to the libertarian side.

At one point, I was talking to Dee, a woman whose Republican women's group I had given a talk to a few years earlier. She told me that Obama was messing up on Iran and I told her why I didn't think Iran was a threat to the U.S. But I was getting nowhere and so I changed the subject. I looked across the street at a counter-demonstration. Among the demonstrators were two men holding signs saying, "End Corporate Welfare." "Look, Dee," I said, "those two guys are against the bailout." She started to say "no" and then said, "Oh, yeah, I see what you mean." A few people around us got a good laugh.

That evening, a reporter from the Salinas Californian called me at home and he gave me a softball question that allowed me to point out why the Tea Party had given me hope. He said, "The demonstrators on the other side said that they didn't understand your side's upset because Obama is cutting taxes for 95 percent of people. How do you answer that?"

I answered, "First, Obama has already broken his campaign promise not to raise taxes "a dime" for people with income under $200,000. He signed a bill two months ago raising the federal tax on cigarettes by 62 cents a pack. Second, what many of these protestors are upset about is the huge increase in government spending. As Milton Friedman often pointed out, the real measure of taxes is not what the government calls taxes but what government spends. Government spending is financed by current taxes, future taxes, or inflation." The reporter used the Milton Friedman line.


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COMMENTS (59 to date)
Brandon Robison writes:

I contemplated attending, but decided not to after hearing news reports that the Las Vegas rally had reached somewhere between 2000-2500 people. Any event with that many people sounds like a traffic nightmare.

More importantly, though, I saw it as more of a Republican, anti-Obama rally than as an anti-tax rally. If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?

It seems the only real difference is that now we have Obama in office. Not that I think Obama's a good guy or anything. I just saw yesterday's event as a *Republican* event, and I don't think they're any better.

Mike Moffatt writes:

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

Seconded. Would like to hear an answer to this.

J writes:

Seconded. Would like to hear an answer to this.

Perhaps I'm being my naive, but I will try to explain it by using the words of someone more qualified and eloquent than I:

".....and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government....."

No one is talking revoluton, yet. No one is talking about slitting throats ala Mencken, yet. No one is talking about instituting new government, yet. But as anyone familiar with economics knows, it's all about the margin. And it seems that for a large group of people, the benefits of the proposed marginal increase in government is less than the cost. Hence the protests.

needle writes:

agree, these events should have been heavily populated with those that complained about the spending during the last 8 years as well as those that object to the present levels.

JP writes:

I agree with what J wrote above. Also, in my own case and that of a lot of other libertarians, I couldn't stand Bush and the ridiculous spending of his Republican Congresses. If there had been tea parties during his administration, I would have attended them. The ongoing and proposed spending of the current administration and Congress is the same only more so.

Unit writes:

Obama hasn't spent as much as Bush yet, he could still do the right thing. If only more people who voted for him stopped supporting him blindly and started going to more Tea Parties...

J Cortez writes:

I couldn't go to any tea party due to my schedule, but I would guess it's for the best. It's very hard for me to be around the pro-war/anti-civil liberties people. Too many spew much of the neo-con republican party line, a total lie that they accept as truth.

Reports of other tea parties across the country made a few sound like they had been co-opted by republican party hacks for their own political purposes. Still, in the end, I think these tea parties are a good thing. They give a chance to more libertarian minded people (with way more patience than I) to talk to others and spread the message. Hopefully, a few people had their minds changed.

Funny that the other reporter at the end didn't use your quote in entirety. Why would he? Sadly, unlike the first reporter in your story some don't care about fairness. They think: "Whatever you do, do not paint your political favorite in a bad light."

Bob Murphy writes:

David,

How much did Dick Armey pay you to attend the festivities?

Joshua Lyle writes:

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

My estimation is that they've been slowly being alienated, but not enough to betray what they subconsciously feel to be tribal affiliations with other people and groups that make up what is generally regarded as the American right. Now we're seeing those ties get rebuilt -- just after Move-On lead a minor skirmish with the Blue Dogs. Alliances are shifting, grinding, even. In part, the tea parties are the rituals of this process.

David R. Henderson writes:

Brandon Robison and Mike Moffat ask:

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

It's a good question. But if you really want to know the answer, you can't stay at home and not talk to them. You need to ask them. I can't answer the question fully because I talked to only a few people. But just by observing the crowd, I would say that a fair number were in college or were starting out in their first jobs and were not thinking about these issues. I guess we could hold it against them that they didn't protest Bush's and Congress's spending. Also, though, I think maybe some of them understand that there's a big difference between annual deficits of a few hundred billion and annual deficits of close to a trillion.

Beyond that, I agree with what I think Brandon Robison, though not Mike Moffat, thought of as a rhetorical question. It's shameful that so many of them sat while Bush fiddled and bombed. That's why I carried the poster I did--to do my little bit to start changing that. It's also why, on a conservative talk show that morning, I emphasized the connection between war and spending and criticized the Republicans for war, spending, torture, and surveillance.

El Presidente writes:

David,

Very good use of Friedman. Well quoted, appropriate, and insightful. I'm pleasantly surprised they ran it.

Jim writes:

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

That's because they weren't really anti-tax/spending, and aren't even now. My experience at the local tea party was that was that the speakers were all republican/neocon shills talking out of both sides of their mouths by denouncing deficit spending while cheerleading the war, (particularly the imminent expansion of operations around Somalia). It wasn't even a question of "where were you the past eight years?"; these people are still talking about CONTINUED expansion of the warfare state, chanting "USA, USA!", and preaching national greatness. Full speed ahead and damn the deficits.

The flip side of this is the dramatic fall off we've seen in support for the peace movement among establishment liberals. Just as deficits are only a problem for the right when a Democrat is in office, war is only a problem for the left when Republicans are running the show. The hypocrisy of both left and right is just astounding.

guthrie writes:

David,

Don't you teach at the Navy's Post-graduate school there in Monterey? Do you or anyone else find this profoundly ironic given your libertarian anti-war stance? (not that such opinions disqualify you at all, just to be clear)

Mike Moffatt writes:

"That's because they weren't really anti-tax/spending, and aren't even now."

That'd be my guess.

Serious question - what was the last Republican administration that didn't increase government spending?

My guess would be Coolidge (but it's just a guess) - I don't see how you can make a case for Eisenhower, Nixon, Ford, Reagan (despite the myth), Bush I or Bush II.

Maniel writes:

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

My family was campaigning for Ron Paul.

David R. Henderson writes:

Three things to note:

1. Mike Moffat shows by his second comment that he ignored my answer to his first comment. Although I agree with his comment about Republican presidents--all since Coolidege have been dismal--he uses the word "they" to talk about a disparate group of people.
2. Guthrie asks about my teaching at the Naval Postgraduate School. I took a position there during 1984 when the Cold War was on and I believed in the Cold War. BTW, I shouldn't have and because of the influence of the late Roy Childs, my own belief in the Cold War was fraying. The big turning point for me was when Bush I invaded Panama. Having been at a military school for a quarter of a century, I started reading more about foreign policy and have come more and more to a strong non-interventionist view. My reasoning is similar to Hayek's. See, for example, http://antiwar.com/henderson/?articleid=13628. I guess it's ironic. But the way I see it, I'm one of the few people at the school who believes in the Department of Defense rather than in the Department of Offense.
3. El Presidente, thank you.

Best,

David

Wes Sprouse writes:

There were more than a few events that took place before the colonists drafted the Declaration of Independence. They finally reached the tipping point. And that is what I see happening now. People are reaching that tipping point and realizing “Hey, I either get involved or watch my country go down the tubes.” Bush or Obama. Carter or Clinton. A Republican majority in congress or a Democrat majority. Who cares. Big government is big government.

By the way, David, how many American flags would be to your taste?

David R. Henderson writes:

Dear Wes,
You asked, "By the way, David, how many American flags would be to your taste?" Offhand, I would say, for a crowd of 500, fewer than 10.
Best,
David

David R. Henderson writes:

Dear Wes,
Oh, and by the way, I agree with what you said in your first paragraph.
Best,
David

MikeL writes:

Dear David,
Thank you for actually _responding_ to questions posed by your readers. I wish your colleagues here at EconLog would follow your example.

MikeL writes:

PS, I see you made it in the pictures too, David. And with your Anti-war/Anti-tax sign. Good on you.

See image on rh side:
http://www.thecalifornian.com/article/20090416/NEWS01/904160301&referrer=FRONTPAGECAROUSEL

Boonton writes:

I answered, "First, Obama has already broken his campaign promise not to raise taxes "a dime" for people with income under $200,000. He signed a bill two months ago raising the federal tax on cigarettes by 62 cents a pack

The payroll tax cut alone is $400 per worker or $800 per couple. To cancel that out a person would have to smoke 645 packs per year which works out to 1.76 packs per day. Even the heavy smokers I know don't exceed 1 1/2 packs a day.

On the income side, the bottom tax bracket is 10% which was scheduled to go to 15% by the Bill Bush signed (in other words a Bush tax increase). Obama, I believed stoped that. So that applied to the first $6K of taxable income....so 5% of $6K is $300 which translates into 483 packs per year or 1.33 per day.

By this alone in order for a person making under $250K per year to be worse off tax wise by Obama's policies he would need to have a habit that exceeded 3 packs per day. If he wanted to buy a house, though, the $8K tax credit could buy him another 13.58 packs a day for a year. [Of course we could also ask if a tax on an optional activity like smoking should be considered along the same lines as a tax on a not-so-optional activity like making a living]

Look if you want to say spending increases mean tax increases down the line then go ahead. But try not to lie, even to yourself. So far people under $200K are doing better tax wise in most cases (most meaning almost all).

Now if you're going to use the Friedman line of thinking, you have a really confusing message problem. Since borrowing means you have to pay back more in the long run (due to interest), the $0.62 a pack should be looked at as a tax cut. Why? Because $0.62 paid today means $0.70, $0.80, or whatever not paid tomorrow in principle and interest. But that would also mean $400 less in payroll taxes today is a tax hike because that will eventually mean $500 or $600 in spending. That would turn Bush's tax cuts into tax hikes...which in a very real sense they are/were. From your description, though, I doubt one out of a hundred of your fellow Tea Partiers were thinking along these lines.

Mike Moffatt writes:

Well, since you asked for a response.

"But if you really want to know the answer, you can't stay at home and not talk to them. You need to ask them."

You're forgetting about the concept of 'revealed preference'. You have to examine what people do, not what they say. The fact 'they' were not protesting under Bush but *are* protesting under Obama says more than words ever can.

And sure, many of them are young. But the Bush administration ended 4 months ago. How much have they aged in that time?

We can realize, as Alex Tabarrok pointed out yesterday, that "partisanship biases perceptions of the economy." I would place a healthy wager that the majority of the people at these protests earnestly believe spending when down, not up, under Reagan.

Yes, perhaps 1-2% of the people at these rallies are not Republican partisans. I'll be generous and up it to 5%. My comments on 'they' represent the 95% who are.

guthrie writes:

I second MikeL!

And thank you for your clarification, it is helpful (though I hope I was clear in that I was in no way impugning your position!).

I just have this image of a bunch of Marine or Seal officers (never having been in the Marines or Navy myself) in your class and having to listen! I'm sure you don't use your bully pulpit like that and I'm sure there's a lot of diversity in the officer ranks, but I dunno... I find it ironic and interesting.

Wes Sprouse writes:

David,

I am quite curious as to why the American flags are distasteful to you. Not looking to judge, but to understand.

David R. Henderson writes:

To MikeL, Boonton, and Mike Moffat,

MikeL: Thanks on both. I totally missed the picture and have now printed it out for my bulletin board.
Re answering questions, my favorite part of giving public speeches and of teaching is the Q&A and the back and forth.

Boonton: Touche on all points, although I hadn't known about the 10/15 bracket issue and will have to check that. Do you have a cite? Nice numerate analysis wit the cigarette tax. I should stick to the Friedman point plus the points I've made in earlier posts about how destructive it is to keep tax rates high but reduce tax rates with rebates.

Mike Moffat: Nothing I said above takes away from the fact that I appreciate your blog and your thinking.

Best,
David

RL writes:

Two points, David:

1. I hope your sign said, "End the WarS..." not "End the War..."

2. "What was refreshing was that there was a wide range of ages and people seemed to having a genuinely good time."

I have to say I find this saddening, not refreshing. I don't think libertarians gain anything if April 15th becomes another July 4th: "On July 4th, we get together and have a genuinely good time celebrating our freedom. On April 15th we get together and have a genuinely good time opposing taxes and big government." I'd rather the people have been seething with anger than having a genuinely good time. I don't think the revolutionaries in Boston did what they did to have a genuinely good time.

Mike Moffatt writes:

"Nothing I said above takes away from the fact that I appreciate your blog and your thinking."

And I appreciate yours!

And to clarify, I have nothing against Republicans or protests per se. It's more mindless partisanship that gets to me. When the Democrats fall out of power and start protesting the very same things they did while Obama was in office, I will say the same thing.

RL writes:

Booton: People who smoke and are unemployed are within the set of people who have an income of $250,000 or less. They have seen their cigarette taxes increase and gain none of the compensating benefits you mention. Since the unemployed are a growing number and since those who smoke are in lower socioeconomic classes that are hit hard by unemployment, it seems there's a growing group of people who, under Obama, are paying more in taxes and making less than $250K/yr. So it seems David Henderson's point stands.

STEVE writes:

I was and am a George Bush supporter and am all for these anti-tax rallys. I supported many of his programs but were agains almost every economic policy from the increased tariffs on steel and other imports, increase in medicare drug benefits, no child left behind, his bailout of the banks, amnesty for illegal alliens. I was willing to accept $100B - $200B annual deficits but not the TARP bailouts. Republicans in general are much more willing to take on their own versus Democrats who will put up with whatever a person with a D behind theri name does

David R. Henderson writes:

To Guthrie and Wes.

Guthrie: First, thanks. Second, I think I'm pretty gentle with them. I ease into my views on foreign policy after having (hopefully) built trust on other issues. You're right about diversity. We had some amazing discussions less than a month after 9/11, discussions that don't fit on this blog but that I probably will write about on antiwar.com.
I've never liked the term "bully pulpit" because of the "bully" word. My best discussions of foreign policy with the students, with the exception mentioned above and one other exception I wrote about

http://antiwar.com/henderson/?articleid=8795

are one on one.

Wes Sprouse: I didn't mean to imply that the flags are distasteful. If I had meant that, then the optimal number in my view would have been zero. When I moved to this country in 1972, I found the flag beautiful. Aesthetically, I still do. It's just that it stands for a mix of good and bad and a large number of flags typically makes me think of the bad for the same reason that some of the commenters above are skeptical of the tea party: the package deal.

JP writes:

If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?

If the government is too big and is spending too much, isn't it good that people protest against those things? Even if they're motivated in part by their disapproval of the party in power, don't we want people to express disapproval of excessive government?

MikeL writes:

As usual, Anthony Gregory makes great points, in this case with regards to these "conservative" tax protesters. Worth the read.

David R. Henderson writes:

I just read the Anthony Gregory piece that MikeL recommends. I second his endorsement.

Boonton writes:

Boonton: Touche on all points, although I hadn't known about the 10/15 bracket issue and will have to check that. Do you have a cite? Nice numerate analysis wit the cigarette tax. I should stick to the Friedman point plus the points I've made in earlier posts about how destructive it is to keep tax rates high but reduce tax rates with rebates.

Thank you! On the tax cut, I've found it very surprising how tricky it is to get a good resource. You'd think that someone would make a side by side chart "before stimulus/after" but no such easy luck.

The payroll tax cut I confirmed on http://money.cnn.com/2009/03/31/pf/taxes/making_work_pay_credit

On the brackets, look at http://forums.blackbaud.com/forums/t/11177.aspx it seems to be saying (comment on 3/20/9 2:52 PM) The amount is $7,180....maybe that's the inflation adjustment...we are economists here so let's agree to always tolerate rounding off to easy numbers like $6K.

On the Friedman point, you def. have a better argument but you should face up to the fact that the Republicans do have this idea that 'deficits don't matter'. They saw deficits during Bush and Reagan, they saw that the world didn't blow up and have assumed they don't really cause anything all that bad so go ahead and cut, cut, cut taxes and don't worry too much about spending (or make a big deal over trivial portions of spending that serve ideological purposes). The Tea Party, IMO, would have had more credibility if it recognized this fact and confronted it directly. I didn't see that or hear it, though. There's always merit in people participating in the conversation but let's face it, this wasn't the Concord Coalition. The Tea Partiers made a devil's bargain. They sold their souls to the establishment to gain the free promotion from Fox News, talk radio and the GOP establishment more concerned about finding something, anything, to counter Obama's popularity (chill out GOPers, take a little time to at least get your act somewhat together...there's still some time till the next serious election)

From a rhetorial perspective the Friedman idea is very confusing. Tax cuts have to be treated as tax increases and vice versa. If that was really the focus of the protests then it would be better to make the message *only* about spending. But how many people want to wave around signs that say "Hike my Mom's Medicaid co-pay"? And if you just want to do spending you have to ditch all the tax symbolism (April 15, the Boston Tea Party etc.)

Are the Tea Parties really making a libertarian stand or simply hyping entitlements for the upper middle class in the form of lower taxes but continued services that ease the burdens of their aged parents, children and retirement? This may be a bit unfair but a person could make a good case this was just a tantrum & performance art from ACORN for white people.

RL
Booton: People who smoke and are unemployed are within the set of people who have an income of $250,000 or less.

I believe the first $2500 of unemployment benefits are exempted from taxes. So just say the unemployed guy is in the 15% bracket, that's $375 or 604 packs of smokes....(and if he earned any income during the year he would get the lower bracket benefit too). I'm not saying its impossible to find someone who earns less than $250K who is nonetheless worse off taxwise because of their smoking habit....the fact is the population of such people sounds pretty small and if you are low income consuming such mega-amounts of packs you're probably best off rooting for any type of massive health care subsidy.

*(BTW, if you want to get all lawyerly Obama said people who earned under $250K a year....you can argue that he was talking about earners meaning people who have jobs or at least are trying to have jobs if they are unemployed. Yes if you're paying for your deadbeat 30 year old son who lives in your basement and smokes....he indeed has a tax increase. But you technically get a bonus in that his incentive to go and get a job is now a bit higher)*

sourcreamus writes:

Some of these comments remind me of the single woman who said, "Some day my prince will come, and when he does he is going to pay for making me wait."
Hundreds of thousands of people protesting government spending is a huge opportunity for libertarianism. Don't try to make the perfect the enemy of the good. The more converts the better. Maybe the backlash from Obama's spending will discredit reckless spending the way the backlash from Iraq has discredited interventionism.

MikeL writes:

I don't attend rallies anymore. Not after seeing how ineffective the anti-war rallies of the earlier part of Bush's first term were. There were hundreds of thousands of people turning out and look where we are today: still deeply involved in two dismal occupations with no end in sight. It's enough to make one very cynical about the long term prospects for freedom and liberty. So, I prefer to spend my time getting educated and talking one-on-one with friends and family.

Mike Moffatt writes:

"If the government is too big and is spending too much, isn't it good that people protest against those things?"

Well, consider the empirical evidence. Republicans are constantly complaining about high spending levels while Democrats are in office. However, every single Republican president since the 1920s has made government bigger.

Consider the Carter administration, when we saw huge backlash against high taxes, we saw the rise of Orange County Conservatism, etc. etc. But what happened during the Reagan administration? Massive spending hikes.

The only piece of evidence I can see that would support your position is the 1994 midterm elections.

I would be more than happy to place a rather large wager, though, that government spending, in real terms, will go up, not down, during the next Republican presidential administation, just as it did under Eisenhower, Nixon, Ford, Reagan, Bush I and Bush II.

JP writes:

Well, consider the empirical evidence. Republicans are constantly complaining about high spending levels while Democrats are in office. However, every single Republican president since the 1920s has made government bigger.

I certainly don't think Republican politicians are the answer. My point was that, if someone is protesting something that I think is bad, I'm glad that they're protesting it even if I don't agree with a lot of other things they have in mind. (For example, I'm glad that many Catholics oppose the death penalty, even though I disagree with the Vatican on just about everything else.)

Mike Moffatt writes:

"I certainly don't think Republican politicians are the answer. My point was that, if someone is protesting something that I think is bad, I'm glad that they're protesting it even if I don't agree with a lot of other things they have in mind."

But what if the protests lead to your desired outcome being *less* likely (which is what the evidence suggests). Is it still valuable then?

Tim Fowler writes:

RE: "If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

Its more about spending than taxes (since spending eventually results in taxes), but to the extent its about taxes, Bush cut taxes.

Bush increased spending a lot. Obama is continuing and expanding on that trend. A 2nd president in a row, increasing problems by a lot gives you a bigger problem than if just one president does it. Bush increased spending to over $3tril, first budget increases spending to over three and a half trillion, and by the time's he's done maybe over four trillion, perhaps well over. The second figure is more of a problem than the first. Three and a half or four is worse than 3.1. Also resentment was building up over Bush's spending but many people aren't naturally prone to protest. It took some time, and Obama's almost immediate reversal of his promise of a net spending cut, to bring out the protests.

Beyond that the protests aren't just about taxes and spending in general, but also all the bailouts. They started under Bush, but its not like they have been around a long time.

Mike - re: "Well, consider the empirical evidence. Republicans are constantly complaining about high spending levels while Democrats are in office. However, every single Republican president since the 1920s has made government bigger."

1 - That's not a response to the point you quote and set up your comment as a response to. Its an argument against Republicans but not an argument against or a real response to - "If the government is too big and is spending too much, isn't it good that people protest against those things?"

2 - Every single Republican has made government bigger, so has every single Democrat (with the possible exception of Truman, who became president during WWII, and left office after a demobilization)

3 - The majority of the increased spending results from increased spending on entitlements almost all of which where enacted when a Democrat was president (OTOH Bush did add the drug program.

4 - You have to consider the party in charge in congress as well, where the Democrats often controlled both houses, and usually controlled at least one.

Mike Moffatt writes:

"If the government is too big and is spending too much, isn't it good that people protest against those things?"

Again, I ask - where is the evidence that this produced any positive benefit?

"You have to consider the party in charge in congress as well, where the Democrats often controlled both houses, and usually controlled at least one."

Then let's do that. Compare 1992-93 spending to 2001-04. Who comes out smelling better?

JP writes:

Again, I ask - where is the evidence that this produced any positive benefit?

Peaceful protesters should be criticized because there's no evidence that their protests have produced benefits?

Mike Moffatt writes:

"Peaceful protesters should be criticized because there's no evidence that their protests have produced benefits?"

Absolutely! Particularly if, in fact, they made the situation worse, not better. If a company loses 5 million dollars a year, changes CEOs, then loses 15 million dollars a year, ceteris paribus, criticizing the CEO would appear to be justified.

JP writes:

Absolutely! Particularly if, in fact, they made the situation worse, not better. If a company loses 5 million dollars a year, changes CEOs, then loses 15 million dollars a year, ceteris paribus, criticizing the CEO would appear to be justified.

But ex ante nobody knows whether the new CEO will be worse. Your logic would counsel that no one should protest unless they can be certain that any resulting change would be for the better -- which is never the case.

You seem to be saying, if I understand correctly, that it *is* the case when a Democrat is president, because Democratic administrations are always more fiscally responsible than Republican administrations. But, first, even if that has been true for years, we can't be confident that it will continue to be true. And, second, people like myself don't care about which party is in control -- the message we're trying to have heard is, For heaven's sake, Mr. Obama and Congress, consider the magnitude of what you are doing! Consider the consequences!

Mike Moffatt writes:

"Your logic would counsel that no one should protest unless they can be certain that any resulting change would be for the better -- which is never the case."

Fair enough. My point was rather that Republicans *always* complain and protest about government spending when a Democrat is President, and in my lifetime they always make the situation worse. So it's ex-post, not ex-ante. But it's possible maybe this time will be different.

And sure, you can blame it on a Democrat congress. Clinton 93-94, Reagan and Carter all had to deal with Dem control of Congress. Of the three, which President had the highest spending? Reagan.

"the message we're trying to have heard is, For heaven's sake, Mr. Obama and Congress, consider the magnitude of what you are doing! Consider the consequences!"

And why should Obama listen? Consider the source of the message (almost all partisan Republicans, with you as an exception) and what's happened over the last 40 years. It's like Charlie Sheen promoting abstinence or Keith Richards telling college students to "Say No to Drugs". Like Bernie Madoff teaching a business ethics course. Like.. well... you get the picture.

JP writes:

And why should Obama listen? Consider the source of the message (almost all partisan Republicans, with you as an exception) and what's happened over the last 40 years.

My own gut sense is that there was a not insignificant number of people at the tea parties who were not partisan Republicans. But there's no way to know for sure.

Mike Moffatt writes:

"My own gut sense is that there was a not insignificant number of people at the tea parties who were not partisan Republicans. "

Fair enough. My gut sense is that it's 98% Republicans, but if you're right then my criticism is misplaced.

And many Libertarians do have a pretty legitimate beef - after criticizing the high spending ways of 8 years of Bush rule, we now have someone in office who may increase spending at an even faster rate.

Yancey Ward writes:

At the moment, these "Tea Parties" are toothless, however, this isn't always going to be true. Many of the commenters above asked where these peoaple were the previous 8 years, and I will tell you this- they were the people that nearly derailed the TARP last autumn- a Bush Administration proposal.

There is a building backlash against the reckless government spending at all levels, and this is going to reach a crescendo in the next two years as states and localities fail to readjust property taxes downward to reflect the falling values of real estate. You haven't seen anything yet. The tax revolt will start at the lowest levels of government and spread upward. Politicians that mock this will find themselves out of power in short order.

Jacob Oost writes:

Amazing how the Lew Rockwell-style libertarians seem to have such a poor understanding of these tea parties and the people who attend them.

Anyway, to answer the big question, Republicans, conservatives, and libertarians made a marginal choice to support the GOP for as long as it was preferable to the other options (if a third-party is non-viable at the ballot box, that makes it less preferable even if its policies are more preferable), all the while grumbling about "compassionate conservatism" and all of the spending (and hence, future tax increases) it brings.

But when such massive spending hits all at once, and all for left-wing social spending, pork projects, corporate welfare, etc., rather than for something at least arguably defensible like defense spending, it is the straw that breaks the camel's back. There is nothing unusual about this phenomenon. Thinking that people behave categorically rather than marginally confuses the issue though. Imagine if every fart you've ever whiffed was in the same room with you, all at once. That's what these bailouts have been.

FWIW, Republicans and conservatives have been ringing the phones off the hook to complain to GOP politicians and part wonks about these bailouts since Bush got them started.

To the Obamabots who don't get it, who ask "what are they complaining about? They are getting a rebate, and we're just going to return to Clinton levels of taxation." First off, you cannot fund the entire federal government off the backs of a tiny minority of the population without expecting it to affect their economic output, and hence the economic output of the nation as a whole. Big spending by definition means big taxes, and merely promising today that it won't fall on me doesn't fool me, because I'm not stupid. I *will* pay for this, if not in the form of direct taxes, then indirect ones in the form of higher prices and lower wages.

The Cupboard Is Bare writes:

The rally I attended seemed to go off message a lot. They would rev people up with talk of 9-11 and the war in Iraq.

I had hoped for more libertarians, but it felt like a Republican pep rally. I stood there thinking that this was why Republicans lost the election.

Babinich writes:

David,

Any comment on Bruce Bartlett's piece?

http://www.forbes.com/2009/04/16/tax-tea-party-opinions-columnists-protest.html

"If these people were really anti-tax (and/or anti-spending), where have they been for the past several years?"

All it takes is for someone or something to tap into a latent anxiety.

Why is rallying the public for a cause regardless of Barlett's case (the sins of the past, that being excessive spending, cannot continue into the future Mr. Bartlett) so terrible on this issue?

POTUS uses this technique all the time (banning greenhouse gases, greater stake in Wall Street, greater stake in Motown, pushing to unionize Charter schools, etc...)

No, I am not equating the Tea Party to the issues POTUS raises. It's clear the Tea Parties are effective otherwise MSM would not be out in force trying to discredit them.

Boonton writes:

Tim

Its more about spending than taxes (since spending eventually results in taxes), but to the extent its about taxes, Bush cut taxes.

The fact is the majority of the messages and symbolism were about taxes first and spending second. Supply sidism is still very popular in the Republican Party so it is not an unwarranted assumption that their agenda is low taxes big deficit. As Cheney said 'deficits don't matter'. Say what you will about Keynesian but at least its workings do lead to the conclusion that sometimes deficits can be bad.

The other fact remains that tax cuts to create a deficit have been all but proven NOT to work to cut gov't. The 'starve the beast' idea was clearly shredded by Bush's terms. Leave aside the idea was grossly irresponsibility and undemocratic to begin with (I'll force my kids to make spending cuts in gov't by leaving them with a massive debt). We are now at the point where those advocating cutting gov't spending dramatically should not be taken seriously if they can't signal that they are actually talking about cutting spending dramatically in the REAL WORLD, not just 'in principle' or 'down the line' or 'when the time comes'.

As I said, get these people to hold up signs saying "Cut mom's medicare", "No COI for dad's Social Security" and see if you get as many to come.

The Snob writes:

Aside from the fact that many Republicans were unhappy with the GOP's spend-frenzy (c.f. reduced turnout in 2006), there are salient differences between the Bush and Obama spending/deficit plans.

The deficits from Obama's plans could easily be double or more the size of W's. That's not a trivial difference.

Also, where the spending increases and deficits come from will be different and the differences matter. A lot of Bush's spending increases went to defense. Defense is the one major category of spending that has over time seen large cuts, such as the post-Cold War base closings and the reduction in force size. Carter and Clinton presided over net reductions in military spending and Obama likely will as well.

Likewise, aside from the prescription drug benefit (which I agree isn't trivial), Bush's spending increases were mostly organic growth of existing departments and programs. If W allowed the government to grow fatter, Obama is seeking to redefine government flab as national muscle.

I think Obama's plans represent a shift in thinking that is more structurally dangerous in the long term. Though the damage done to the GOP brand by the binge of 2002-2006 is quite bad because it deprives us of a credible opposition. That is the big reason why I feel a 1994-style comeback still seems far-fetched.

Jacob Oost writes:

The GOP will have such a comeback but I don't see it happening until 2012 at the very earliest. 2014 more likely.

David R. Henderson writes:

I think The Snob puts it well.

Jacob Oost writes:

Correct me if I'm wrong, but isn't the "Obama tax cut" of $400 merely an advance on next years refund, and not an actual tax cut at all?

Boonton writes:

Jacob,

From what I read on the CNN Money article the answer is no. The tax cut might expire but you aren't getting hit with more taxes in April 2010 because withholding went down in 2009. From what I understand, withholding was decreased to get the money flowing now for stimulus purposes.

I find it kind of amazing that for all the bluster about the stimulus package, there is a lack of good resources out there detailing tax changes exactly. Perhaps I'm missing something but changes to withholding and tax brackets impact everyone with a job. This, IMO, is much more relevant than trying to document every road project the stimulus bill does yet it seems no one on either side has much available unless you want to read the raw language of the bill.

A lot of Bush's spending increases went to defense. Defense is the one major category of spending that has over time seen large cuts, such as the post-Cold War base closings and the reduction in force size. Carter and Clinton presided over net reductions in military spending and Obama likely will as well.

Per http://www.gpoaccess.gov/eop/2009/B80.xls

1992 Total Outleys $1.381.6T National Defense $298.4B

2000 Outlays $1,789.2T National Defense $294.4B


2008 est. Outlays $2,978.7 National Defense $624.1

Roughly total outlays increased $1,189.5 while defense increased only $329.7....not even a third of the increase. Which is pretty impressive considering this includes the post 9/11 surge as well as the Iraq-Afghanistan war AND the 2008 estimate was done in October...presumably before any bailouts.

Doing a quick converstion for inflation: http://www.westegg.com/inflation/infl.cgi

1992 Outlays becomes $2094.77 Defense $452.43
2000 Outlays becomes $2215.96 Defense $364.62

If you have any evidence that spending increases during the Bush years were due to Defense for anything but a nearly trivial portion of the increase please feel free to present it.

At the moment Obama has proposed a slight increase in military spending (the numbers I heard are in the low $500's so I'm going to assume the difference is due to lower operational costs in Iraq).

Tim Fowler writes:

Boonton -

Supply sidism is still very popular in the Republican Party so it is not an unwarranted assumption that their agenda is low taxes big deficit.

Supply sidism ≠ support for large deficits.

As for what people are protesting, well there where a lot of different people, and each person could have been protesting multiple things. Some would be focusing on specific proposed tax increases, or a general belief that Obama's going to raise taxes, some may be protesting the taxes they believe will come because of the spending (and thus would be opponents of large deficits not supporters).

As for "deficits don't matter, that wasn't an idea that ever grabbed a lot of support. Also the deficits under Obama will be much larger, so even if the belief is deficits of $X, or Y percent of GDP don't matter, that doesn't mean the person doesn't think deficits several times as large don't matter.

Personally I'd never say "deficits don't matter" but I didn't care as much about them when they where smaller in the past. Reagan's peak deficits and Bush's deficits got large enough for me to care, but they are both small compared to Obama's.

The other fact remains that tax cuts to create a deficit have been all but proven NOT to work to cut gov't. The 'starve the beast' idea was clearly shredded by Bush's terms.

Not really. If there was more revenue, spending may have been increased even faster, so there may have been a "starve the beast" effect. Also an idea doesn't have to always work to ever work. Still the Bush years are evidence that the idea wasn't as strong as some people represent it as being.

Leave aside the idea was grossly irresponsibility and undemocratic to begin with (I'll force my kids to make spending cuts in gov't by leaving them with a massive debt).

If that's undemocratic, than entitlement programs are undemocratic. After all they will force program cuts or tax increases in future years. Personally I think the "undemocratic" charge is rather silly in both cases. Not that "democratic" automatically implies "good idea".

We are now at the point where those advocating cutting gov't spending dramatically should not be taken seriously if they can't signal that they are actually talking about cutting spending dramatically in the REAL WORLD, not just 'in principle' or 'down the line' or 'when the time comes'.

Plenty of people are about cutting spending in "the REAL WORLD", many more are at least about not increasing spending so much. But both are very politically difficult, esp. now, but really at almost any time.

As I said, get these people to hold up signs saying "Cut mom's medicare", "No COI for dad's Social Security" and see if you get as many to come.

"Reform Social Security", "Reign in the exploding costs of entitlements" etc. are ideas supported by many people.

The cost of entitlements is large and problematic now, but the real problem is the future. If we can restrain increases there will be no need to slash the budgets at any point. If we don't start restraining increases soon, then we will either slash spending in the future, or impose crippling taxes, or both.

----

I agree with "The Snob", and with David Henderson when he says "I think The Snob puts it well.", except that Boonton has a point that while defense increased by a larger percentage under Bush than non-defense spending, the majority of dollars in the increase where for things other than defense and national security costs even if you define them rather broadly (say the defense budget, VA, part of the DoE, the CIA, the NSA, the Department of Homeland Security, and perhaps more)

The real long term problem is entitlements. Even defense (the next biggest category) is smaller now and likely much smaller in the future.

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