Scott Sumner  

Libertarians have nowhere to turn

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In my view neither major political party has libertarian inclinations. That's not to say that there aren't a few individual party members who lean slightly libertarian. Senator Rand Paul is obviously more libertarian that Donald Trump, and Senator Ron Wyden is obviously more libertarian that Hillary Clinton. But both parties are firmly in the "big government" camp.

When I point this out to conservatives they often insist that I should be a Republican, as that party is more pro-small government than the Democrats. When I point out that the size and scope of government grew much more under Bush than Clinton, they wave away this objection, "That's the old GOP, the Tea Party has injected new libertarian instincts into the Party." Sorry, but I just don't see it.

Today we learned that the GOP has caved again, producing a budget full of spending and special interest tax cuts that bust the budget cap agreed to just a few years ago, balloon the deficit and make the tax code even more complex and inefficient.

"The end product here is just cleaning the barn; it's a disaster," Brat said of the spending and tax deal. "We're breaking our pledge on the budget caps to the American people, we've lost fiscal discipline, and we're throwing it all on the next generation."

But in the same breath, Brat praised Ryan: "Not only is he saying the right things, he is lining it up to do the right things ... and then leadership can't hijack the budget at the end of the year and throw the kitchen sink, which we just did."


So once again libertarians were suckers for GOP sweet talk about "small government", but next year will be different. We promise.

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I'm slightly more sympathetic to the progressives who insist that I should really be a Democrat. They tell me "After all, you are rational. You believe in evolution and support carbon taxes and redistribution and think money was too tight during the Great Recession. You are pro-immigration and skeptical of the idea that America is an 'exceptional' nation, which must police the world." Those are all good arguments, but then I start obsessing about economics. After all, I am an economist.

When Obamacare was passed I thought the bill was more of a missed opportunity than a complete disaster. And that's because I thought the US health care system was already pretty much a complete disaster, wasting massive amounts of money on treatments of doubtful utility. Full of regulations that grossly distorted the system. And by far the worst distortion was the massive subsidy that the government provides to company-sponsored health insurance, which cuts the cost of health insurance to consumers by roughly 40%.

My progressive friends pointed out that Obamacare did contain one very important type of cost control, the so-called "Cadillac tax" on expensive health insurance. Because this tax was not fully indexed to health care inflation, it would gradually squeeze costs over time. I was skeptical; pointing out that the tax was delayed many years into the future. If they were really serious about this idea, then why not implement it much sooner, not after President Obama would be out of office?

And now we read that my skepticism was justified.

The tax break package would cost about $650 billion and extend around 50 credits for businesses and individuals while also delaying until 2017 a tax on medical device manufacturers. The approximately $1.1 trillion appropriations package would fund the government for the remainder of fiscal 2016 and contains a two-year delay of the Affordable Care Act's so-called Cadillac Tax on expensive employer-sponsored health care plans as well as a delay of a tax on health insurance plan purchases.

The one good policy reform in Obamacare has been delayed for another 2 years. Does anyone seriously believe that it will then be implemented?

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And by the way, this delay could not have happened without substantial GOP support, which pretty much proves that their opposition to Obamacare was not motivated by free market principles, but rather greed and selfishness---they didn't want their tax money providing health insurance for the poor. That's a defensible opinion, but I wish they had been honest about their motives.

HT: Tyler Cowen


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COMMENTS (21 to date)
BZ writes:

The most effective thing we can do is vote for the Libertarian Party candidates.

Follow me here.

The trick is to send two signals:
1. That small-l libertarian money and support exists and is available.
2. That that support will only go to someone actually WILLING to shrink the state.

Some libertarians opt-out of the system. This is a bad idea because it fails to send signal #1. Some libertarians support changing the Rs or Ds from within, but more importantly, support the Rs and Ds when they don't get their way. This fails to send signal #2.

So, when it comes to countable, tangible, signaling, you just can't beat the LP.

Harold Cockerill writes:

There is one party in power in America, The Spending Party. It has a Democrat branch and a Republican branch. The only difference between the branches is what the money gets wasted on and the slight difference in speed at which we rush towards the cliff.

Over the years I was fooled into thinking the Republican branch was serious about restraining the growth of government so I dutifully cast my vote for them. It took a long, long time but I have finally seen the error of my ways. I apologize to everyone for being so foolish.

Levi Russell writes:

If you think Democrats don't want global US military intervention, you're kidding yourself.

DaleB_in_AZ writes:

BZ, I completely agree with you. Sadly, every time I talk to a libertarian-leaning person who is registered (and voting) as an R (or rarely, D), their response is usually a "lesser-of-two-evils" argument, i.e., the "other" major party candidate would be worse. I point out that voting for the lesser of two evils still means that you are voting for evil.

Nothing will change until ANY third party starts collecting more than 5% of the vote on a regular basis. Most elections are won or lost by about that margin. So when any other party starts collecting more than the margin of victory, then (and only then) will we see any substantial change from the twin parties that collectively hold a monopoly today.

A famous Libertarian once said "Republicans are like 900-number phone sex lines: they ask what you want, say how much they want it too, and tell you how good it's going to be. But in the end, it cost more than you expected, it wasn't as good as the real thing, and you realize they are never coming over."

BZ writes:

@DaleB_in_AZ
They regularly can and do get those numbers in almost every race they enter. But they almost never get those numbers in elections for Governor or President. I have no idea why.

James writes:

"And by the way, this delay could not have happened without substantial GOP support, which pretty much proves that their opposition to Obamacare was not motivated by free market principles, but rather greed and selfishness---they didn't want their tax money providing health insurance for the poor."

You have a low standard of proof. I have no interest in defending the Republicans or any other political party, but I'm happy to criticise weak reasoning. Your error is one that I normally see among Democrats: when Republicans do something they don't like, they attribute it to greed at the expense of the poor.

There are plenty of plausible explanations for Republican willingess to postpone the tax on Cadillac plans. Maybe they oppose that tax because the tax itself is contrary to free market principles. Maybe they have principled free market reasons to be against some people's ta money tax money paying for other people's insurance. Maybe they see delyaing of a tax as a sort of a tax cut and count it as a win. Maybe it's just logrolling and they want to go along with the Democrats in hopes of gaining cooperation later.

Or maybe they outright hate the poor. But who cares about their motives. If they implement their policies for bad reasons, that's their problem to live with. If they implement bad policies, that's your problem and my problem to live with.

Scott Sumner writes:

Everyone, FWIW, I voted Libertarian in past elections.

Levi, I completely agree with you, I'm just describing what some people tell me. And Clinton is worse than Obama.

James, Again and again I see the GOP supporting welfare for their groups; farmers, big business, retired people, and opposing it for the poor. After a while it becomes pretty obvious what is going on.

You said:

"There are plenty of plausible explanations for Republican willingness to postpone the tax on Cadillac plans. Maybe they oppose that tax because the tax itself is contrary to free market principles."

I don't consider stupidity to be much of an excuse at this level. They're in Congress. McCain ran for President on this issue, if the Republicans in Congress still don't understand the issue they shouldn't be there.

You said:

"Or maybe they outright hate the poor. But who cares about their motives. If they implement their policies for bad reasons, that's their problem to live with. If they implement bad policies, that's your problem and my problem to live with."

Very good point. I was just letting off steam.

Michael Byrnes writes:

This post is exactly right.

On their Vox podcast, either Yglesias or Ezra Klein made the point that this move sort of strengthens Obamacare: makes the bill friendlier to insurers, unions, and medical device manufacturers, so those groups are likely to be supportive of the law as a whole.

I think the GOP likes having Obamacare around - as a Democratic bogeyman that they can rail against during their efforts to fundraise. If they ever actually repealed it, they wuld have to provide some sort of alternative and whatever they did would be a GOP bogeyman that the Democrats could rail against during their fundraising.

Brian Donohue writes:

Another excellent post.

I don't think Republicans support postponing the Cadillac tax-- the constituency that benefits from this consists almost entirely of union employees, most of whom work for the government and vote Democratic-- it was just part of the quid pro quo.

Here's where I think the rubber meets the road: the debt ceiling. Both parties hate it, and economists almost universally disparage the idea.

But as a taxpayer, I feel like this is the only leverage I have, the only mechanism to force the two parties, from time to time, to DO THEIR JOB and actually make choices like the rest of us have to do every single day.

Tom Jackson writes:

"Senator Rand Paul is obviously more libertarian that Donald Trump, and Senator Ron Wyden is obviously more libertarian that Hillary Clinton. But both parties are firmly in the "big government" camp."

I think the most important point is that both men are outliers in their parties. Wyden did a great job of highlighting how CISA had been inserted into the omnibus spending bill, and everyone ignored him — "everyone" including members of his own party.

I'd feel that I had to vote for Paul or Wyden if I lived in Oregon or Kentucky. I live in Ohio, however, where one of my senators, Sherrod Brown, actually put out a press release bragging that he helped postpone the Cadillac tax.

Antischiff writes:

Those who want third parties to do well are dreaming most election cycles. Our first-past-the post system insures that third party vote percentages of even 3% are rare anomalies. Usually, one or both parties integrate third party movements. Had Ron Paul run as an independent, he might have been able to do enough damage to Republicans to have some leverage, but he didn't bother because he knows how difficult it is to get on the ballots of all 50 states and be included in Presidential debates, etc. The Libertarian Party never even makes a splash.

Antischiff writes:

Scott,

For you, I think it makes the most sense to be a Democrat. You strike me as a supply-side liberal. People like you need to educate a party that is rather extremely economically illiterate, though no more so than the Republicans. Each party has members with numerous pet economic fallacies.

Both parties have significant portions that are economic nationalists, having problems with free trade and immigration. Both parties are also extremely anti-science on some issues. However, your values seem to match those of Democrats, and Democrats in my experience are somewhat more open to persuasion than Republicans. That being said, it's not easy getting the idea that nuclear power is a good thing to many Democrats.

So, your work is cut out for you. It could take a generation or two to see a significant difference from the efforts of those of your ilk.

I'm sure you've noticed, however, that socialist parties around the world have sometimes had the most success to bringing about free market reforms. I'm obviously not referring to many current failing socialist movements in Latin America.

Hans writes:

Mr Sumner, show me two good
workable federal governmental
unit program and shall become
a statist?

Quant writes:

I agree with much of this but think there's more of a difference, in the other direction, than Scott.

http://www.nationalreview.com/article/428793/democrats-and-totalitarianism-2016

Maximum Liberty writes:

As background, my viewpoint is that there is often little to differentiate the parties nationally, but often something to differentiate their candidates locally. For that reason, I generally don't vote Libertarian Party (despite being waaaay out there on the libertarian scale) because that's a wasted vote.

I know that many believe that all votes are wasted votes, and that would certainly be true of the Presidential general election in my state, which will vote 60-40 along partisan lines. But I've seen some elections where the margin of victory was very small. Sometimes it was was few votes, or a few hundred votes. Quite often, it was a percentage that was less than the percent of votes cast for the Libertarian Party candidate. The business side of my brain says that suggests an arbitrage opportunity.

That part of my brain suggests a membership organization called something like the Libertarian Voters Block. It would not put up its own candidates. Instead, it would, in both the primaries and the general elections, endorse the candidate who is willing to fully commit to a limited set of libertarian initiatives. These would generally not be the big issues of the day. Instead, we would promise our votes -- as a block -- for small- and medium-sized reforms that matter. The Block would invite declared candidates to commit to whatever they would be willing to support off of a menu of very specific reforms. By committing to it, they agree to sponsor it and vote for it (including in every parliamentary procedure). The candidate with the most points gets the Block's support. Candidates who later renege are excluded from the next election's balloting, and get a permanent reduction in their points. Candidates don't have to agree with the philosophy underlying the menu. Call it transaction politics without the implication of bribery.

Members would agree to only two things: (a) pay a membership fee to cover running costs and (b) vote the way the Block says to, even if they don't like the candidate. Members who want would have some way to give structured input into what the menu is and providing confirmation that candidates complied with or reneged on their promises.

I anticipate that the Block would categorize menu items as small, medium, and large, with more points for bigger reforms. But the key is not to pick things that are so large that they become ideological statements; if that were the case, we'd just pick the most libertarian candidate, who would then lose. Instead, we want things so far down in details that mainstream politicians can commit to them without ideological problems with their base supporters. So, for example, ending ethanol subsidies would be a good medium-sized reform. A formulation along the lines of "repeal X" would probably end up being easier to enforce than modifying programs. (For example, I would think that a program to turn publicly owned highways into privately owned toll roads would be too complicated to police effectively.) In fact, anything that has small, concentrated support is a good target.

I anticipate that the Block's "menu" would have at least two "pages" or dimensions: one economic and another social. Ideally, it should also have one for foreign policy, but that seems really hard to turn into menu items. ("Don't bomb Country X"? How would you know to put that on there in advance?)

Initially, the Block would have to start national, but it would probably have much more success at the state level, where a few hundred votes can swing a lot of elections.

Anyway, I'd sign up if someone created it.

LD Bottorff writes:

You believe in evolution and support carbon taxes and redistribution and think money was too tight during the Great Recession. You are pro-immigration
I didn't know that evolution was a serious political issue.
It isn't clear to me that the Democrats plan to support carbon taxes except as a supplement to existing taxes.
I wasn't aware of any libertarian support for redistribution. If the government isn't smart enough to figure out when to wage war, which drugs should be legalized or when a woman should have an abortion, why is the government smart enough to figure out how wealth and income should be distributed?
Did any candidate run on the position that money was too tight during the Great Recession?
Immigration is an issue where there is a great deal of difference between Republicans. Some want immigration reform. Others just want existing laws enforced. Just what is the Democratic position on immigration? I honestly don't know. If I thought that the Democratic Party was honestly supportive of more immigration, I might consider voting for them.
With regard to government growth during the Bush years, if the Democrats really took the position that government grew too much during the GW Bush years and they promised to roll it back, then I would vote Democratic.

Max has the right idea. Instead of Libertarians voting as a party, they should form a lobby.

Floccina writes:

Libertarians have nowhere to turn but to Gary Johnson.

wonkhoya writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Khodge writes:

To Maximum Liberty's point, academic economists love to conflate national politics with state politics. There is a clear and unmistakable difference in states with strong libertarian tendencies, even visible nationally. Seriously, do you really think California would have the same government if the Republicans had a real and consistent say there?

By the time most of the states have a voice in the presidential race, only strong, established, "mainstream" politicians remain.

Thomas Sewell writes:

Libertarian is a minority political view in the US. For the budget, 95 R voted against vs. 18 D in the house and 26 vs. 6 in the Senate. Not much of the D opposition was based on not wanting to grow government, while almost all the much larger R opposition was.

Again, we're still a minority, even in the R party, but our influence there is much larger and has been growing lately. To say there is no difference between the parties is clearly contradicted by the vote totals.

Let me put it this way, there are dozens more Republican elected Congressman who are libertarian than there are from the Libertarian Party.

Just because we haven't won the fight yet doesn't mean we should stop fighting the most effective way possible. The Communists were a minority of the Dems for a long time and never totally took over, but they won the ideological battle within that party to the point where listening to the D debates the only thing they might argue with is potential opposition to giving Putin everything he wants.

So don't confuse losing a major battle with not having an army any more. We're still outnumbered and mostly losing, but much less so than 10-15 years ago.

Benjamin Cole writes:

The GOP is in love with the largest component of federal agency spending: "national security". 1 trillion dollars a year is eaten up by the Department of Defense, Department of Homeland Security, the VA, the black budget, in debt.

The Donks are hopeless too.

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