Finding common ground between liberals and libertarians

Despite similar sounding names, liberals and libertarians are often at odds with each other. While the former favors a large welfare state and government intervention in the economy, the latter are loath to acknowledge any legitimate role for government. But as Bruce Bartlett points out, there may be more common ground than most think:

"On the surface, there would appear to be potential for an alliance. Libertarians tend to be liberal on social issues, favoring such things as gay marriage and drug legalization; and also liberal on defense and foreign policy, opposing the wars in Iraq and Afghanistan, and opposing torture and restrictions on civil liberties in the name of national security.

But libertarians are conservative on economic policy--favoring a free market with virtually no government intervention except the enforcement of contracts, and no government spending or taxes except those to pay for a very minimal police force and military.

Libertarians' views on social policy and national defense make them sympathetic to the Democrats, while their views on economic policy tend to align them with the Republicans. If one views social, defense and economic policy as having roughly equal weight, it would seem, therefore, that most libertarians should be Democrats. In fact, almost none are. Those that don't belong to the dysfunctional Libertarian Party are, by and large, Republicans."

Of course, Bartlett shows that these three areas do not have equal weight, as libertarians tend to emphasize economic freedom over all else.

For Bartlett, the dialogue between liberals and libertarians should involve each side conceding a little ground to the other:

"...many of the liberals persuasively argued that the pool of freedom isn't fixed such that if government takes more, then there is necessarily less for the people. Many government interventions expand freedom. A good example would be the Civil Rights Act of 1964. It was opposed by libertarians like Barry Goldwater as an unconstitutional infringement on states' rights. Yet it was obvious that African Americans were suffering tremendously at the hands of state and local governments. If the federal government didn't step in to redress these crimes, who else would?

...In return, liberals can learn something important about economics from libertarians. Liberals often turn to government to solve social problems simply because that is their default position. But often, there are private-sector alternatives that may in fact be superior. The rich diversity of America's states and localities shows there are many different ways of dealing with social problems that don't necessarily require more government."

"Liberalism", very broadly defined, is about promoting individual liberty and equality. But there are large differences within the philosophy. For modern American liberals, "equality" means a narrower distribution of incomes; for libertarians, "equality" means that everyone is free to pursue their economic interest, accepting a wide variation in individual outcomes.

Personally, I often find myself torn between these political views. I do favor a limited scope for government intervention, focused on expanding freedom rather than promoting traditional cultural institutions or engaging in social engineering.

Government should play a robust role in helping to alleviate freedom-reducing inequities in society; but we should also willingly acknowledge when government interventions in the economy privilege the few over the many, including regressive tax policies such as the mortgage interest deduction or the tax exemption on employer-provided health insurance. This is akin to Ed Glaeser's "libertarian progressivism", which is skeptical of certain government interventions because they favor the privileged over the poor.

Perhaps the key is avoiding falling in love with one's ideology. A dialogue between liberals and libertarians would involve the former admitting their great protagonist (government) is not always the best tool to enhance freedom, while the latter would admit that their great antagonist (government) sometimes is the best tool for enhancing freedom.

(HT: Mark Thoma)

Some perspective on and from Sotomayor

According to today's New York Times coverage, upon joining the Federal District Court in Manhattan in 1992, the newly nominated Supreme Court Judge Sonia Sotomayor reportedly told journalists, "The cases that shake the world don’t come along every day. But the world of the litigants is shaken by the existence of their case, and I don’t lose sight of that, either."

This sound byte comforts me, as it indicates Sotomayer's capacity for constructive empathy. Psychologist Carl Rogers defines empathy as "To perceive the internal frame of reference of another with accuracy and with the emotional components and meanings which pertain thereto as if one were the person, but without ever losing the 'as if' condition." [source]

Taking the idea of empathy - and its importance as a quality in a good, constructive judge - one step further is anthropologist Edward Twitchell Hall Jr. who explains that there is a individual perception that colors every experience: "experience as it is perceived through one set of culturally patterned sensory screens is quite different from experience perceived through another." [source] Therefore suggesting that only one that is empathetic enough to consider the perspective of the litigants will be capable of understanding the experiences, choices and decisions of the parties as well. I look forward to seeing Sotomayer put this sense into practice in the country's highest court.

Lat-Chino Culture in Nicaragua

“Comidas Rapidas China,” the sign reads. Chinese Fast Food.

The restaurant is situated across the street from various foods stalls and eateries specializing in local Nicaraguan fare: nacatamal, mondongo, pupusas, gallopinto.The Chinese restaurant in the city of Masaya, Nicaragua is yet another example of Chinese influences in this Latin American country.


As the Western hemisphere’s second poorest nation, Nicaragua is a prime location for selling affordable goods– the type China has the capacity to produce en masse.

This is more more than an importation of goods, there is a cultural component, a reframing of what “Chinese” means to Nicaraguans. Another example of this is found in these plantains.


This common Latin American snack was produced in Nicaragua, but is branded as Cantonese rather than as their Latin roots.

Just as “Made in America” is synonymous with high quality and dependable, “Made in China” is coming to mean affordable and familiar. Rather than the perceived imperialistic commercial (and political) practices of the United States throughout the history of Nicaragua, China is branding itself as a culturally-sensitive commercial partner.




It’s hard to say all that from a bag of chips. One last example of this Chinese remarketing is the Asian Cultural Center. This recently built institution is yet another of the cultural exchange between China and Nicaragua. The murals surrounding the facility incorparate iconography from both countries as further evidence of the growing Lat-Chino relations and culture.

Got a light? Ask the FDA...

It's pretty difficult for me to muster any compassion for the tobacco industry, so I welcomed the news this week that Congress has announced pending plans to regulate the manufacturing of cigarettes and other tobacco products as well as prohibit tobacco companies from marketing "light" cigarettes.

Followers of this issue will know that the marketing of light cigarettes has been under legal scrutiny since a 2006 decision that banned labels such as "low tar" and "light.” Yesterday, Washington DC's Court of Appeals upheld that ’06 ruling, but protests from Altria, the parent company of Philip Morris, British American Tobacco, Lorillard Tobacco, RJ Reynolds Tobacco, and Brown & Williamson Tobacco may see the issue resurface in the Supreme Court.

Over the last 50 years the percentage of adults in our country who smoke has more than halved (About 20% of the US adult population continues to smoke), smoking has been banned from most public places across the country and cigarette manufacturers have been mandated to donate money to anti-smoking campaigns and cessation aids. It’s not difficult to see the momentum behind regulating marketing and allowing the Food and Drug Administration to rule on what can truly be called ‘light.’

But there is a larger, stickier issue that has yet to be addressed as directly and it faces me each time I go to the grocery store. There are hundreds of other products that are labeled or marketed as “light” or “eco-friendly” that have minimal or no regulatory oversight. Should the government test which sour cream is better for me and stick a government label on the package?

It begs the question where does rhetoric and marketing end and regulation and consumer protection begin? Some claims are more scrutinized than others in out culture. Diet aids, over-the-counter medicines and vitamin supplements must do as they say on the label. However, no one is policing the fact that nearly every diner in New York was recently voted the best or that cereal types have been “Kid-tested, mother-approved.” What does that really mean?

As advertisements infiltrate our search engine results, blogs, movies and TV shows and daily speech, every buyer needs to...well, caveat emptor.

Should we welcome the new climate bill?

After years of denial and feet-dragging, the US Congress may finally begin to deal with climate change. The Waxman-Markey bill now before Congress calls for a cap on carbon emissions, with tradable emissions permits distributed to industry. More energy efficient firms can sell their permits to less efficient firms, producing a financial incentive to reduce emissions.

"Cap and Trade" is not the only policy option out there. Many scholars have advocated a simple tax on carbon emissions.

On the surface, there's no theoretical reason for a carbon tax to be any better or worse than a cap and trade system. Both systems put a price on carbon emissions, which should lead to lower carbon emissions. But some people are worried about the process of permit distribution, which opens the door to political bribes, or as economists call it "rent seeking". Greg Mankiw puts it like this:

"Economists recognize that a cap-and-trade system is equivalent to a tax on carbon emissions with the tax revenue rebated to existing carbon emitters, such as energy companies. That is, 'Cap-and-trade = Carbon tax + Corporate welfare'."

However, not everyone is so down on the cap and trade plan. For Paul Krugman, cap and trade is a workable second-best strategy, which is more politically palatable to powerful groups weary of climate change legislation:

"...handing out emission permits does, in effect, transfer wealth from taxpayers to industry. So if you had your heart set on a clean program, without major political payoffs, Waxman-Markey is a disappointment.

Still, the bill represents major action to limit climate change. As the Center for American Progress has pointed out, by 2020 the legislation would have the same effect on global warming as taking 500 million cars off the road. And by all accounts, this bill has a real chance of becoming law in the near future.

So opponents of the proposed legislation have to ask themselves whether they’re making the perfect the enemy of the good. I think they are."

In my mind, the real debate is over which is worse: the dangers from climate change or the dangers from political corruption. If the only way to get a climate change bill passed is to risk some rent-seeking, then it may be worth the cost. If, however, your biggest concern is economic efficiency, then the downside risk of the Waxman-Markey bill is more than you're willing to pay.

Lies, damn lies, refuted by statistics

According to the early reviews, Selena Robert's new book paints a rather unflattering picture of Yankees' third-baseman Alex Rodriguez. Aside from accusing A-Rod of having taken steroids since high school, Roberts alleges that Rodriguez and other opposing players tipped pitches during blow-outs; knowing what pitches were coming, they could improve their statistics.

Unfortunately, Roberts has little more than anonymous sources to support her story. So baseball statisticians had to delve into past seasons in order to find evidence of A-Rod's malfeasance. The stats cast doubt on Robert's allegations:

"If a tipping conspiracy were in place, one would expect that Rodriguez and rival middle infielders in games he played to have hit better in low-leverage situations than in high-leverage ones. Using a fairly loose definition of high leverage as a L.I. above 1.5 and low leverage as below 0.7, the data provide a resounding answer: either no tipping was going on or it was pathetically ineffective.

Contrary to his reputation as a choker, Rodriguez was actually at his best when the game was on the line as a Ranger. According to data compiled by Sean Forman of Baseball-Reference.com, his combined on-base and slugging percentages (O.P.S.) from 2001 to 2003 was 1.076 in high-leverage situations, compared with 1.017 for medium leverage and .982 in low leverage. Opposing second basemen and shortstops showed the same pattern. They registered an .899 O.P.S. when leverage was high, .825 when it was middling, and .817 when it was low. Unless Rodriguez’s behavior was even more nefarious — tipping only when it mattered most — the numbers give no reason to believe he was involved.

Using a more stringent definition of blowouts yields the same result. In plate appearances in which the teams were separated by seven runs or more, Rodriguez mustered just a .851 O.P.S., compared with 1.021 when the margin was six or fewer runs. His middle infield counterparts compiled a .744 mark in the laughers and .840 the rest of the time."

Of course, we should not mistake absence of evidence for evidence of absence. It is possible that A-Rod tipped pitches on rare occasions; rare enough that one or two extra home-runs wouldn't show up in this kind of analysis. But this does provide strong evidence against the possibility that this kind of behavior was widespread. That conclusion may not restore our collective innocence, but it's nice to know.

The buck stops somewhere else (try Treasury... or the Fed)

Tyler Cowen says that Congress has opted out of much of the economic crisis. That might not be a bad move on their part:

While Congressional leaders are consulted on the major policies, Congress is keeping its distance, perhaps to minimize voter outrage. This way, Congress can claim credit if a recovery comes, but deny responsibility if the price tag ends up higher than advertised or if banks seem to be receiving unfair benefits from the government.

Of course, while this may be a smart decision for Congress, it might have serious consequences for economic policy in the future:

A Congress that won’t accept much responsibility for the financial bailouts, for example, is unlikely to rise to the occasion when the time comes to make tough decisions on the budget...

On any single policy, the abdication of Congressional responsibility may not be a problem. Sometimes it is good to let the technocrats have their way. In the longer run, though, the United States requires a Congress courageous enough to accept responsibility for potentially unpopular policies. We are moving further away from that every day.

Most economic models typically assume that government will follow some optimal policy. But in reality government is subject to incentives, and in this case Congress doesn't have much reason to get too involved in this crisis. This is why the Federal Reserve (and much of the bureaucracy) is insulated from political pressure: there are tough decisions to be made and no one up for re-election wants to make them.

As Cowen points out, the danger comes about when the elected body doesn't have to make the tough decisions. When the time comes and they have to address the budget deficit--or whether to nationalize part of the banking sector--they won't have built up political capital by leveling with the public about what needs to be done and what can be done.

It may be time for Congress to bite the bullet and, well, actually do something.

Trying not to oversell it

Wouldn't it be great if "green jobs" could simultaneously end the recession and prevent global warming? Of course it would. But before you sit down to your free lunch, Paul Krugman reminds us that it's not quite that simple:

"...limiting emissions would have its costs. As a card-carrying economist, I cringe when 'green economy' enthusiasts insist that protecting the environment would be all gain, no pain."

UCLA economist Matthew Kahn explains why most economists feel this way:

"Many of these ideas are very much worth pursuing for environmental reasons. But it’s doubtful they offer a double dividend of helping to jump-start the economy. For one thing, the global financial crisis is fundamentally about different issues: the popping of housing and credit bubbles from St. Petersburg to San Francisco, the associated implosion of a highly leveraged international banking sector, and the resulting fallout on real economies. These pressing problems won’t be solved by switching to hydrogen-powered cars or installing solar panels on every roof.

Second, let’s be honest: Anti-carbon regulations will simultaneously create and destroy jobs. Take the United States: Given the country’s current reliance on cheap, coal-fired power plants, carbon caps will translate into higher electricity prices. (How much higher remains an open question.) Older manufacturing firms—especially in energy-intensive industries such as petroleum and coal products, paper, cement, and primary metals—will face higher costs of doing business, and this may lead them to shut down or seek international locations where electricity prices are lower and carbon regulation is less stringent.

In the long run, a little creative destruction will likely be a good thing. The same regulations that might kill jobs in smokestack industries will act to stimulate a host of new manufacturing opportunities, ranging from energy-efficient household appliances to solar panels to energy-efficient vehicles. Even former U.S. Vice President Dick Cheney might consider buying a fuel-efficient vehicle if gas prices rose enough.

But don’t count on clean technology to pull us out of the doldrums. The green revolution won’t happen overnight."

The obvious, but important lesson to remember here is that tradeoffs are everywhere. A "green revolution" is a long-term project, and in the mean time investments in alternative energy divert investment from other projects.

But it's not all bad news. Just because green policies aren't free, we can still afford them:

"Even with stringent limits, says the M.I.T. group, Americans would consume only 2 percent less in 2050 than they would have in the absence of emission limits. That would still leave room for a large rise in the standard of living, shaving only one-twentieth of a percentage point off the average annual growth rate."

So while there are no free lunches in life, there are some cheap meals, if you know where to look.