Posts tagged ‘new deal’

Soviet Spy Harry Dexter White

I thought this was an interesting article on Harry Dexter White, an important American architect of the post-war monetary system who spied for the Soviets for over a decade.  The one disconnect I had was this:

Over the course of 11 years, beginning in the mid-1930s, White acted as a Soviet mole, giving the Soviets secret information and advice on how to negotiate with the Roosevelt administration and advocating for them during internal policy debates. White was arguably more important to Soviet intelligence than Alger Hiss, the U.S. State Department official who was the most famous spy of the early Cold War.

The truth about White's actions has been clear for at least 15 years now, yet historians remain deeply divided over his intentions and his legacy, puzzled by the chasm between White's public views on political economy, which were mainstream progressive and Keynesian, and his clandestine behavior on behalf of the Soviets. Until recently, the White case has resembled a murder mystery with witnesses and a weapon but no clear motive.

Only in academia could folks see a "chasm" between admiration for the Soviets and an American progressive who grew up a supporter of Robert La Follette and later of the New Deal.  The problem, I think, is that White seems to have shared the gauzy positive view of Soviet economic progress and success that was also rooted deeply in American academia (not to mention the NY Times).  I don't know what the academic situation is like today, but as recently as 1983, for example, I had a professor at Princeton who went nuts at the mere mention of Hannah Arendt's name, apparently for the crime of lumping Stalin's communism in with Hitler's fascism as two sides of the same totalitarian coin.

Modern Serfdom

The well of government absurdity is simply bottomless

In this case, the USDA imposed on the [raisin farming] Hornes a “marketing order” demanding that they turn over 47% of their crop without compensation.  The order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market.  The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.

I have seen estimates that a Medieval serf had to pay between 30 and 70 percent of his crop to his master.  The RAC seems to be right in line with these numbers.

The New Deal and Black Ghettoization

I have been watching the old PBS documentary series (in that Ken Burns style but I don't think by Ken Burns) and found this an interesting story of government policy fail that I had never heard much about.  Much like segregated train and bus service, racial redlining that is commonly blamed on private enterprise in fact began as government policy

Government policies began in the 1930s with the New Deal's Federal Mortgage and Loans Program. The government, along with banks and insurance programs, undertook a policy to lower the value of urban housing in order to create a market for the single-family residences they built outside the city.

The Home Owners' Loan Corporation, a federal government initiative established during the early years of the New Deal went into Brooklyn and mapped the population of all 66 neighborhoods in the Borough, block by block, noting on their maps the location of the residence of every black, Latino, Jewish, Italian, Irish, and Polish family they could find. Then they assigned ratings to each neighborhood based on its ethnic makeup. They distributed the demographic maps to banks and held the banks to a certain standard when loaning money for homes and rental. If the ratings went down, the value of housing property went down.

From the perspective of a white city dweller, nothing that you had done personally had altered the value of your home, and your neighborhood had not changed either. The decline in your property's value came simply because, unless the people who wanted to move to your neighborhood were black, the banks would no longer lend people the money needed to move there. And, because of this government initiative, the more black people moved into your neighborhood, the more the value of your property fell.

The Home Owners' Loan Corporation finished their work in the 1940s. In the 1930s when it started, black Brooklynites were the least physically segregated group in the borough. By 1950 they were the most segregated group; all were concentrated in the Bedford-Stuyvesant neighborhood, which became the largest black ghetto in the United States. After the Home Owners Loan Corp began working with local banks in Brooklyn, it worked with them in Manhattan, the Bronx, and Queens.

The state also got involved in redlining. (Initially, redlining literally meant the physical process of drawing on maps red lines through neighborhoods that were to be refused loans and insurance policies based on income or race. Redlining has come to mean, more generally, refusing to serve a particular neighborhood because of income or race.) State officials created their own map of Brooklyn. They too mapped out the city block by block. But this time they looked for only black and Latino individuals.

The academics interviewed in the series argued that nearly every black ghetto in the country was created in the 1930's by this program.

It's Constitutional Because We Really, Really Want It

The game the Left is playing with the Supreme Court is interesting.  Their argument going into last week's Supreme Court frackas boiled down either to, "this is really needed so it must be Constitutional" or something like "we thought the Federal government could do anything."  By the way, while I find the latter depressing and it should be wrong, I can understand after decisions like Raich why one might come to that conclusion.

After getting pummeled in court this week, the Left has a couple of new takes.  The first is that while their side's lawyers did not offer any good arguments, particularly vis a vis limiting principles, it's the Court's obligation to do it for them.  The second is an interesting sort of brinksmanship.  It says that this is so big, so massive, so important a legislation, that the Supreme Court basically does not have the cojones to overturn it on a 5-4.  The extreme example of this argument, which I am seeing more and more, is that its so big a piece of legislation that it is wrong for the Supreme Court to overturn it whatever the vote, the implication being that Constitutional muster can be passed merely by making legislation comprehensive enough.

Kevin Drum has been taking both these tacks, and included this gem in one post:

So what will the court do? If they don't want a rerun of the 1930s, which did a lot of damage to the court's prestige, but they do want to put firmer limits on Congress's interstate commerce power, the answer is: find a limiting principle of their own. But find one that puts Obamacare just barely on the constitutional side of their new principle. This would avoid a firestorm of criticism about the court's legitimacy — that they're acting as legislators instead of judges — but it would satisfy their urge to hand down a landmark decision that puts firm limits on further expansion of congressional power. Liberals would be so relieved that Obamacare survived that they'd probably accept the new rules without too much fuss, and conservatives, though disappointed, would be thrilled at the idea that the court had finally set down clear limits on Congress's interstate commerce power.

You can see both arguments here - the proposition that the Court owes it to the defense attorney to make up a better argument for him, as well as the notion that the stakes are too high to overturn the legislation.

By the way, maybe I just went to some right-wing fascist school, but I sure don't remember any discussion of a loss of prestige by the Court as they overruled large swaths of the New Deal, particularly since their decisions were pretty consistent with past precedent.  I always considered it was FDR who lost prestige with this authoritarian impulse to pack the Court to get the Constitutional answer he wanted.  And taking the 1930's as an example, it sure seems both Left and Right are wildly hypocritical and inconsistent on when they are in favor and against Court activism.

Life of the Libertarian

From John Hasnas via Matt Welch:

Libertarians spend their lives accurately predicting the future effects of government policy. Their predictions are accurate because they are derived from Hayek's insights into the limitations of human knowledge, from the recognition that the people who comprise the government respond to incentives just like anyone else and are not magically transformed to selfless agents of the good merely by accepting government employment, from the awareness that for government to provide a benefit to some, it must first take it from others, and from the knowledge that politicians cannot repeal the laws of economics. For the same reason, their predictions are usually negative and utterly inconsistent with the utopian wishful-thinking that lies at the heart of virtually all contemporary political advocacy. And because no one likes to hear that he cannot have his cake and eat it too or be told that his good intentions cannot be translated into reality either by waving a magic wand or by passing legislation, these predictions are greeted not merely with disbelief, but with derision. [...]

If you'd like a taste of what it feels like to be a libertarian, try telling people that the incoming Obama Administration is advocating precisely those aspects of FDR's New Deal that prolonged the great depression for a decade; that propping up failed and failing ventures with government money in order to save jobs in the present merely shifts resources from relatively more to relatively less productive uses, impedes the corrective process, undermines the economic growth necessary for recovery, and increases unemployment in the long term; and that any "economic" stimulus package will inexorably be made to serve political rather than economic ends, and see what kind of reaction you get. And trust me, it won't feel any better five or ten years from now when everything you have just said has been proven true and Obama, like FDR, is nonetheless revered as the savior of the country.

Sizing the Bailout

From here and here:

cumbarchartbailout

I haven't checked these numbers, and they are supposed to be all in real dollars, but YMMV.

So we are going to spend 33% of GDP to avoid a recesion, when the worst recession in history (the Great Depression) had a peak-to-trough GDP loss of about 20%.

Update: This chart is obviously based on a lower estimate.  But it does give one pause when considering the "bailout all due to US laissez faire."

sovereign_2

Prediction Market at Work?

Today, GoDaddy signed a new long-term sponsorship deal with Danica Patrick, Indy car driver most famous for, uh, having ovaries.  The article says that this new deal was signed well ahead of the expiration of the old deal later this year.

I am struck by the fact that this deal was inked just days before the Indy 500, the winning of which would greatly increase Patrick's value.  I wonder if this is based on some kind of insider knowledge by GoDaddy of Patrick's chances of winning this weekend.

Immigration and Welfare

Well, I should be skiing right this moment, but my son woke up barfing this morning, making it a perfect 15 of the last 15 family trips where one of my kids has gotten sick. 

But the ski lodge is nice, and the wireless works great, and Q&O has a very interesting post on immigration and welfare.

High unemployment among immigrants is of course not confined to just
Sweden or Scandinavia. Throughout Europe, governments have found that
well-intentioned social insurance policies can lead to lasting welfare
dependence, especially among immigrants. Belgium is the European
country with the highest difference in employment rates between the
foreign-born and natives. The images of burning cars in the suburbs of
Paris that were broadcast around the world illustrate the kind of
social and economic problems France is facing with its restive
immigrant population.

Given the high barriers to entry, many
immigrants in Europe no longer start accumulating essential language
and labor market skills. This is in stark contrast with the situation
across the Atlantic. For example, in 2000, Iranians in the U.S. had a
family income that was 42% above the U.S. average. The income of
Iranian immigrants in Sweden, however, was 39% below the country's
average.

Lots of interesting stuff there.  Which reminds me of something I wrote years ago:

In the 1930's, and continuing to this day, something changed
radically in the theory of government in this country that would cause
immigration to be severely limited and that would lead to much of the
current immigration debate.  With the New Deal, and later with the
Great Society and many other intervening pieces of legislation, we
began creating what I call non-right rights.  These newly described
"rights" were different from the ones I enumerated above.  Rather than
existing prior to government, and requiring at most the protection of
government, these new rights sprang forth from the government itself
and could only exist in the context of having a government.  These
non-right rights have multiplied throughout the years, and include
things like the "right" to a minimum wage, to health care, to a
pension, to education, to leisure time, to paid family leave, to
affordable housing, to public transportation, to cheap gasoline, etc.
etc. ad infinitum....

These non-right rights all share one thing in common:  They require
the coercive power of the government to work.  They require that the
government take the product of one person's labor and give it to
someone else.  They require that the government force individuals to
make decisions in certain ways that they might not have of their own
free will. 

And since these non-right rights spring form and depend on
government, suddenly citizenship matters in the provision of these
rights.  The government already bankrupts itself trying to provide all
these non-right rights to its citizens  -- just as a practical matter,
it can't afford to provide them to an unlimited number of new
entrants.  It was as if for 150 years we had been running a very
successful party, attracting more and more guests each year.  The party
had a cash bar, so everyone had to pay their own way, and some people
had to go home thirsty but most had a good time.  Then, suddenly, for
whatever reasons, the long-time party guests decided they didn't like
the cash bar and banned it, making all drinks free.  But they quickly
learned that they had to lock the front doors, because they couldn't
afford to give free drinks to everyone who showed up.  After a while,
with the door locked and all the same people at the party, the whole
thing suddenly got kind of dull.

When Did We Start to Fear Speech?

I feel like it is time for one of those unpopular libertarian rants that piss everyone off.   As with the last time this issue came up, I just don't understand what we fear so much letting Iranian dictator Amadinejad speak on American soil.  I am absolutely all for letting people put themselves on the record in the clearest possible way.  McQ over at Q&O is a smart guy I often agree with, but his core assumption seems to be that an invitation from Columbia University somehow confers some legitimacy on an otherwise egregious world leader.  How?  I am not sure the Columbia name even confers much legitimacy on its faculty.  The only thing the decision communicates to me is that Columbia, the university that didn't allow presentation of the Mohammad cartoons and that allows speakers to be manhandled off the stage, is deeply confused about speech issues on campus.

Information is always useful.  Would I have allowed Hitler to speak in the US in the 1930's?  Hell yes!  I wish he had gone on a 20-city speaking tour.  Hitler couldn't help but telegraph his true intentions every time he spoke.  Hell, he wrote it all down in a book if people would have paid attention.  But what if he didn't?  What if he convinced all America he was peaceful?  Even then it would have been useful.  Intelligent media (if there are any left) could then compare and contrast what he said at home vs. what he said in the US, much like a few folks do with Muslim clerics, comparing their English and Arabic speeches.  Further, folks would have immediately seen Hitler was lying in September of 1939, and, knowing Americans, they would have been more pissed off at him for being lied to.  Further, it would be fabulous to have quotes form Mussolini, touring eastern US cities, praising the New Deal and the NRA, much of which was modeled on his program in Italy.

What about, as Roger Simon asks:

I have a question for the Columbia crowd, since Holocaust deniers are
welcome, would you allow a speaker in favor of a return to black
slavery? I hope not. Well, that's how I feel about Holocaust deniers.

Absolutely I would.  If there was a prominent person who advocated the return to black slavery, I would want that person on the record in public.  I would love to listen to see what kind of supporters he thought he had, and, perhaps more importantly, to see who reacted favorably to him.   You have to pull these guys up into the sunlight and show the world how distasteful they are.

Update:

During the 1930s, "one of the things we really lacked in this country
was sufficient contact with Nazis to realize what they are up to," said
Harvey Silverglate, a prominent civil rights attorney who has sharply
criticized higher education for failing to support free speech on
campus. The notion "that you're going to take really awful people and
not listen to them is really suicidal for any society."

Meet the New Boss

I am reading a fabulous book called "The Rise and Fall of Society" by Frank Chodorov.  It was apparently first published in 1959 and has been republished recently by the Mises Institute.  Here is an early bit I particularly liked:

One indication of how far the integration [between state and society] has gone is the disappearance of any discussion of the State qua State -- a discussion that engaged the best minds of the eighteenth and nineteenth centuries.  The inadequacies of a particular regime, or its personnel, are under constant attack, but there is no faultfinding with the institution itself.  The State is all right, by common agreement, and it would work perfectly well if the "right" people were at its helm.

His next line is clearly aimed at his conservative contemporaries

It does not occur to most critics of the New Deal that all its deficiencies are inherent in any State, under anybody's guidance, or that when the political establishment garners enough power a demagogue will sprout.

I offered up similar observations here, though aimed at the left, who at the time were the minority opposition party:

I am reminded of all this because the technocrats that built our
regulatory state are starting to see the danger of what they created.
A public school system was great as long as it was teaching the right
things and its indoctrinational excesses were in a leftish direction.
Now, however, we can see the panic.  The left is freaked that some red
state school districts may start teaching creationism or intelligent
design.  And you can hear the lament - how did we let Bush and these
conservative idiots take control of the beautiful machine we built?  My
answer is that you shouldn't have built the machine in the first place
- it always falls into the wrong hands.  Maybe its time for me to again invite the left to reconsider school choice.

Today, via Instapundit, comes this story about the GAO audit of the decision by the FDA to not allow the plan B morning after pill to be sold over the counter.
And, knock me over with a feather, it appears that the decision was
political, based on a conservative administration's opposition to
abortion.  And again the technocrats on the left are freaked.  Well,
what did you expect?  You applauded the Clinton FDA's politically
motivated ban on breast implants as a sop to NOW and the trial
lawyers.  In
establishing the FDA, it was you on the left that established the
principal, contradictory to the left's own stand on abortion, that the
government does indeed trump the individual on decision making for
their own body
  (other thoughts here).
Again we hear the lament that the game was great until these
conservative yahoos took over.  No, it wasn't.  It was unjust to scheme
to control other people's lives, and just plain stupid to expect that
the machinery of control you created would never fall into your
political enemy's hands.

Revisiting the New Deal. Finally.

By this definition of "not normal", I am not normal either.  I share with Tabarrok the strong sense that the New Deal (combined with shockingly stupid use of Wilson's Federal Reserve and of course rampant scorched-earth protectionism) extended rather than shortened the Great Depression. 

Imagine, increasing the power of
unions to strike and raise wages during a time of mass strikes and mass
unemployment. Imagine thinking that cartelizing whole industries
thereby raising prices and reducing output could improve the economy.
Not everything Roosevelt did was counterproductive - he did end
prohibition (although in order to raise taxes) - but plenty was and
worst of all was the uncertainty created by Roosevelt's vicious attacks
on business.

One of the things I think we have done historically is understate the true degree to which Roosevelt showed himself willing to take the country down the road to socialism, or more accurately, Mussolini-style fascism. Via David Gordon:

Roosevelt never had much
use for Hitler, but Mussolini was another matter. "'I don't mind
telling you in confidence,' FDR remarked to a White House
correspondent, 'that I am keeping in fairly close touch with that
admirable Italian gentleman'" (p. 31). Rexford Tugwell, a leading
adviser to the president, had difficulty containing his enthusiasm for
Mussolini's program to modernize Italy: "It's the cleanest "¦ most
efficiently operating piece of social machinery I've ever seen. It
makes me envious" (p. 32, quoting Tugwell).

Why did these
contemporaries sees an affinity between Roosevelt and the two leading
European dictators, while most people today view them as polar
opposites? People read history backwards: they project the fierce
antagonisms of World War II, when America battled the Axis, to an
earlier period. At the time, what impressed many observers, including
as we have seen the principal actors themselves, was a new style of
leadership common to America, Germany, and Italy.

Once more we must avoid a
common misconception. Because of the ruthless crimes of Hitler and his
Italian ally, it is mistakenly assumed that the dictators were for the
most part hated and feared by the people they ruled. Quite the
contrary, they were in those pre-war years the objects of considerable
adulation. A leader who embodied the spirit of the people had
superseded the old bureaucratic apparatus of government.

If you don't believe me, it is probably because you are not familiar with the National Recover Act (NRA) -- the famous "blue eagle".  This program was the very heart of Roosevelt's vision for the American economy, a vision of cartelized industries managed by government planners. (via Sheldon Richman of the Concise Encyclopedia of Economics):

The image of a strong
leader taking direct charge of an economy during hard times fascinated
observers abroad. Italy was one of the places that Franklin Roosevelt
looked to for ideas in 1933. Roosevelt's National Recovery Act (NRA)
attempted to cartelize the American economy just as Mussolini had
cartelized Italy's. Under the NRA Roosevelt established industry-wide
boards with the power to set and enforce prices, wages, and other terms
of employment, production, and distribution for all companies in an
industry. Through the Agricultural Adjustment Act the government
exercised similar control over farmers. Interestingly, Mussolini viewed
Roosevelt's New Deal as "boldly... interventionist in the field of
economics." Hitler's nazism also shared many features with Italian
fascism, including the syndicalist front. Nazism, too, featured
complete government control of industry, agriculture, finance, and
investment.

And further, from John Flynn's The Roosevelt Myth via Anthony Gregory:

[Mussolini] organized each trade or industrial group or professional
group into a state-supervised trade association. He called it a
corporative. These corporatives operated under state supervision and
could plan production, quality, prices, distribution, labor standards,
etc. The NRA provided that in America each industry should be organized
into a federally supervised trade association. It was not called a
corporative. It was called a Code Authority. But it was essentially the
same thing. These code authorities could regulate production,
quantities, qualities, prices, distribution methods, etc., under the
supervision of the NRA. This was fascism. The anti-trust laws forbade
such organizations. Roosevelt had denounced Hoover for not enforcing
these laws sufficiently. Now he suspended them and compelled men to
combine.

And read this to see the downright creepy Soviet-style propaganda Roosevelt used to promote the NRA.  One example:

A hundred thousand schoolchildren
clustered on Boston Common and were led in an oath administered by
Mayor James Michael Curley: "I promise as a good American citizen to do
my part for the NRA. I will buy only where the Blue Eagle flies."

The fact that the worst of the NRA was dumped by the Supreme Court, and eventually by FDR under pressure, cause us to forget what businessmen in the 1930's were seeing.  The unprecedented fall in asset prices in the early thirties would normally have started to attract capital, at least from the bottom-fishers.  But any reasonable observer at that time would have seen the US government on a path to controlling wages, prices, capacity, etc  -- not an environment conducive to investment.  In fact, under Roosevelt's NRA industry cartels, its not clear that private industrial investment was even legal without the approval of the Code Authority for that industry.

People look back fondly and give credit to the CCC and large public works programs for our recovery, but in fact these programs were necessary because FDR's New Deal, and particularly the NRA, made private investment dry up.

Postscript:  By the way, questioning the greatness of the New Deal is one of those issues that will get you labeled a wacko almost as fast as being a climate change skepticHere is Janice Rogers Brown getting slammed for questioning the New Deal.

Immigration and Statism

Dale Franks at QandO, quoting some from John Derbyshire, raise a key question that certainly has always concerned me as a pro-immigration libertarian:

As to why I think libertarians are nuts to favor mass uncontrolled
immigration from the third world: I think they are nuts because their
enthusiasm on this matter is suicidal to their cause. Their ideological
passion is blinding them to a rather obvious fact: that libertarianism
is a peculiarly American doctrine, with very little appeal to the
huddled masses of the third world. If libertarianism implies mass
third-world immigration, then it is self-destroying. Libertarianism is
simply not attractive either to illiterate peasants from mercantilist
Latin American states, or to East Asians with traditions of
imperial-bureaucratic paternalism, or to the products of Middle Eastern
Muslim theocracies.

In other words, by open immigration, are we letting in waves of people from statist traditions that will drive the US further away from an open, liberal society.  This worries me from time to time, enough that I don't have a fully crafted response that I consider definitive.  However, I want to offer some initial thoughts.  Before I do, here are two background points:

  1. I think the freedom to move to another country, take a job there, buy property, live there, etc. is a basic individual right that should not be limited to the accident of not having been born originally in that country.  Freedom of association is a right of all human beings, not merely a result of citizenship.  I go into these arguments in much more detail here.
  2. Note that immigrant status and citizen status are two different things.  Immigrant means that you are present in a country but not a citizen.  As an immigrant, I believe you should be able to own property, accept employment, and most of the other things you and I do every day.  However, immigrants don't vote.  Only the narrow class of people called citizens may vote, and there is some process where over time immigrants can meet some hurdles and become citizens.  The key problem for a libertarian, which I think Dale Franks would agree with, is "which status must you be to get government handouts?"  My view is that only citizens should get most handouts, like welfare and food stamps and such, though immigrants should have access to things like infrastructure (highways) and emergency services.  It is when one argues that any immigrant should have access to all this stuff that the whole immigration picture becomes a total mess.

With those couple of things in mind, here are my thoughts on the issue Franks raises:

  • The US is not made up primarily of Scots and Dutch, two areas that can legitimately claim to have strong liberal traditions.  Most of our past immigration has come from Ireland and Germany and Scandinavia and Eastern Europe.  None of these areas particularly have a liberal tradition, and many were nationalistic-militaristic-paternalistic governments.  Also, we may forget it today, but when countries like Ireland where a large source of our immigration in the 19th century, they were a third world country at the time.  Just look at Vietnam -- it has one of the worst traditions I can think of, but as a class Vietnamese immigrants tend to be capitalist tigers.
  • Depending on how one counts it, US citizens are already 65%-85% statist anyway, so I am not sure immigration is going to change the mix negatively.  In other words, the statist train has already sailed.  In fact, statism has flourished in this country from 1930-1980 during exactly the same period of time we were most restrictionist in immigration.  Sure, correlation is not causation, but certainly you can't prove to me that restrictionist immigration slows statism in any way. 
  • Much of the statist economic policies in this country were launched by Wilson and Roosevelt, from two of the more blue-blooded families in America.  Now this may not mean much.  What I don't know, because I don't know enough history of the period, is this:  Did support for New Deal (and more extreme socialist NRA-type policies) come disproportionately from new immigrants?  My sense is exactly the opposite, that in fact some New Deal policies like the minimum wage were aimed by nativists at circumscribing the opportunities of immigrants.
  • In effect, the author is advocating that we limit the freedom of movement and property ownership of people not born in the US because we are afraid that these new entrants into our country will bring political pressure to undermine individual rights.  I think that is a legitimate fear, but if I accept that argument, I don't know why I would not also have to accept the argument that we should take away the freedom of speech from people who argue for limitations of individual rights.  In both cases, we are giving political access to people who want to undermine our basic liberties.  My conclusion:  I can't go there in either case.  I refuse to put a political test on the exercise of individual rights, even for people with really bad politics.
  • A well-crafted welfare regime would make the problem a lot better.  I am not so unrealistic to expect the welfare state to go away tomorrow, but I do think that the political will can be mustered to deny substantial benefits to new non-citizen immigrants.  Which way we go on this will decide whether we can open up immigration.  If welfare handouts to immigrants are limited, then new immigrants will tend to self-select towards those looking to work hard and take risks to make it on their own.  This will mitigate the author's concern, and is in fact how we have maintained our culture of liberality through a history that was dominated mostly by open rather than closed immigration.  If welfare handouts are generous to new immigrants, then immigrants will self-select to people looking to live off the state.  If we insist on the latter, then I guess I will agree that immigration needs to be limited (though there is an even better reason for doing so in that we will, in that case, surely bankrupt ourselves.)

New New Deal Programs?

Hit and Run, trying to make a different point, quoted this statement from Harold Meyerson (my emphasis added):

But the new growth of selective libertarianism in the Democratic ranks
is hardly going to be the main source of controversy in coming party
debates. More likely, that debate will pit those who think retraining
is the answer to our more layoff-prone society (that's the Bob Rubin
solution) against those who think that retraining needs to be
supplemented by, for instance, publicly funded alternative energy
programs that would generate millions of jobs
(that's the solution of a
number of union leaders, and one that I favor as well). The latter
position is clearly more in the New Deal liberal mode, but Rubin's is
hardly libertarian.

Do serious people actually favor publicly funded alternative energy programs of the scale that would employ millions of people?  Note that since the total civilian labor force is approximately 150 million people, he is talking about a program encompassing several percent of the US workforce.  I am supposed to be on vacation this week, but here are a couple of random thoughts:

  • A huge government make-work program seems to be an odd response to an increase in employment volatility, which is how the problem is framed, even by Meyerson.  He calls it our "layoff-prone society."  I don't accept that this is necessarily a bad thing, but even if it is, a jobs program does not solve it.  Our unemployment today is at a low level (less than 5%) so that the problem, if it exists at all, has to be volatility, not the absolute size of employment.  So a jobs program helps, how?
  • I will confess a big government-funded jobs program would reduce employment risk in one way:  once someone is hired by the government, whether it be a teacher or bureaucrat,  it is impossible short of a felony conviction to fire them, no matter how horribly destructively incompetent they are.  So anyone hired by this new job program would have a job for life, I guess, though at an enormous dead-weight-loss of the overall economy.
  • The current economy hovers near full employment.  That means that millions of people sucked by the government into an alternative energy program would be pulled out of areas the market currently says is the most productive place for them.  Unless the government has identified a massive market inefficiency, such a program will net reduce the productivity and output of the economy.  Remember -- these millions of people are likely employed somewhere else today, so those places they are employed either have to scale back or pay more for labor.
  • Does anyone really think the government is going to make the right technology and investment choices in such a program?  It will take about 47 seconds before the investment process is politicized and spending is handed out as pork to valued supporters in key Congressional districts. (just look at ethanol and the Midwest Archer Daniels Midland lobby). Remember, the government has been pouring all its investment and subsidies and regulations (e.g. zero emissions requirements) into plug-in electric cars, which still are not there technologically.  In the mean time, the market has latched onto hybrids, a technology actually opposed at first by government energy czars in places like California (because they were not zero emissions).  Hybrids have done more to reduce automotive fuel consumption than any of the technologies, from plug-ins to fuel cells, that the US government has supported in any big way.

Postscript:  Yes, I know plug-in hybrids may be here soon, but batteries are apparently still not where they should be.  I would love to have a plug-in hybrid.  Note, of course, a plug-in hybrid is very very different from a straight electric car, which was the choice of the bureaucrats.  Also, I know that some areas have started to subsidize hybrids, for example by allowing their use by one passenger in the car-pool lane.  These are late-to-the-party efforts to claim some government credit for a private market trend already in progress.

Update:  In fact, today's SJ($) brings us a relevent example:

[Former Airbus CEO] Mr. Streiff talked of moving production jobs between
partner countries, running Airbus like a business. For the first time,
there was talk of apportioning work on the basis of competitiveness,
not national entitlement. There were hints that Airbus should emulate
Boeing with major risk-sharing partnerships, looking beyond Europe for
new product development resources and production sites. He even
committed the ultimate sin"”publicly admitting that Airbus had fallen
over a decade behind Boeing in new product development.

In his exit statement, Mr. Streiff said, "I
progressively came to the conviction that the mode of corporate
governance at Airbus didn't allow for the success of my plan." In other
words, the now former CEO implies, he was blocked by people who like
the status quo. So who would be happy with the status quo when the
situation is degenerating with each day? Well, any government official
who wants governments to stay in charge of the economy. The last thing
they want to see is private sector cash reinventing the fruit of their
state-directed industrial policy.

For the best clue to this dysfunction, consider
France's finance minister, Thierry Breton. He recently told reporters
that Airbus is a "European success," but vowed to "defend this model."
Now why would a model need defending if it were successful?

Airbus was created when European governments
orchestrated their economies, creating new national and continental
champions according to politicians' whims. As far as industrial policy
goes, Airbus was a no-brainer: The jetliner industry offers guaranteed
growth rates and extremely high barriers to entry. Take some legacy
industrial assets, insert government cash, find some talented sales
people, and watch it go. Every other European industrial
scheme"”shipbuilding, cars, Concorde"”obliterated value. Airbus was the
only state-supported success. Unfortunately, Europe's politicians
forgot a crucial fact: Airbus succeeded despite government industrial
policy, not because of it. In fact, this government interference has
created some serious trouble.

Look at the Airbus record: a series of moderate
successes (A300/310, 330), one huge home run (A319/320/321), and some
lamentable but forgivable near misses (A340, A340-500/600). But with
the full support and connivance of parent governments, they launched a
spine-breaking disaster, the superjumbo. Without the A380, Airbus would
still be a tremendous success. Instead, they've got a serious
industrial crisis, right in the middle of the best jetliner market in
years. Mr. Breton's "model" of state-guided industries is alchemy in
reverse: spinning gold into straw.

New Deal and Fascism

On a number of occasions, I have pointed to the strong echos of Italian-style fascism in Roosevelt's New Deal, particularly in the National Recovery Act, which was practically a copy of Mussolini's political-economic model.  David Gordon reviews a new book called the Three New Deals which delves deeper into this parallel development on matters of state control of the economy between Roosevelt, Hitler, and Mussolini.

Roosevelt never had much
use for Hitler, but Mussolini was another matter. "'I don't mind
telling you in confidence,' FDR remarked to a White House
correspondent, 'that I am keeping in fairly close touch with that
admirable Italian gentleman'" (p. 31). Rexford Tugwell, a leading
adviser to the president, had difficulty containing his enthusiasm for
Mussolini's program to modernize Italy: "It's the cleanest "¦ most
efficiently operating piece of social machinery I've ever seen. It
makes me envious" (p. 32, quoting Tugwell).

Why did these
contemporaries sees an affinity between Roosevelt and the two leading
European dictators, while most people today view them as polar
opposites? People read history backwards: they project the fierce
antagonisms of World War II, when America battled the Axis, to an
earlier period. At the time, what impressed many observers, including
as we have seen the principal actors themselves, was a new style of
leadership common to America, Germany, and Italy.

Once more we must avoid a
common misconception. Because of the ruthless crimes of Hitler and his
Italian ally, it is mistakenly assumed that the dictators were for the
most part hated and feared by the people they ruled. Quite the
contrary, they were in those pre-war years the objects of considerable
adulation. A leader who embodied the spirit of the people had
superseded the old bureaucratic apparatus of government.

He also gives us a good hint as to why so many people on the left today are trying to find way to paint the American economy as somehow broken or at some historical low point:

He concludes the book by recalling John T. Flynn's great book of 1944, As We Go Marching.

Flynn, comparing the New Deal with fascism, foresaw a problem that still faces us today.

But willingly or
unwillingly, Flynn argued, the New Deal had put itself into the
position of needing a state of permanent crisis or, indeed, permanent
war to justify its social interventions. "It is born in crisis, lives
on crises, and cannot survive the era of crisis"¦.

Don't Fix Immigration, Fix the Welfare State

Brian Doherty of Reason observes:

The solution to the legal crisis immigration represents won't come through
immigration law itself, which again and again has proven itself useless at
fully stemming the irresistible tides of human desire for a better life. No
matter how much money is spent or how the law is jiggered, it is not immigration
policy that has created unnecessary tears and strains in America's social
order. Rather, the welfare state is at the root of any legitimate claim that
immigration (legal or illegal) is an assault on the American nation. (There
are plenty of illegitimate complaints, based merely on distaste for
the often-imaginary hell of running into Spanish-speaking people in
day-to-day life or seeing some flag not of your nation, but such complaints
are not worthy of consideration.)...

The free market, as it usually does, has created a system of mutually
satisfactory interdependence, all of us serving each other and helping each
other get what we want. The welfare state, in all its manifestations from
medical care to schooling to pure giveaways, creates a negative sum game in
which resources are forcibly redistributed making some a problem, or a
perceived potential problem, to others, and allowing demagogues to obsess
over precious "public" resources scarfed up by the invading Other.

As long as that system is around to breed resentment and anger"”as well
as counter-resentment and counter-anger such as that seen in the streets of
L.A. of late"”immigration will continue as a political crisis, no matter
how many repeat cycles of jiggering with immigration law, or protesting it,
we go through.

California's
Proposition 187,
attempting to limit the provision of government services to illegal
immigrants, was indeed, whatever the motives of its supporters, in spirit on
the right track to a world where any immigrant ought to be, and can be,
welcome; one where they are pure contributors at the same time to their own
well-being and to everyone else's as well. It's the only permanent and just
solution to the immigration conundrum. But it involves a significant
reduction in federal power, money, and authority, rather than an expansion
of it. Strangely, it's a no-go in today's Washington.

I wrote a similar essay on how the New Deal changed our views on immigration.

Immigration, Individual Rights, and the New Deal

Until recently, I have never really been a passionate participant in the immigration debate;  however, living here in Arizona, it is virtually impossible to avoid this discussion.  One observation I can make with some confidence is that, like most political debates, few of the participants seem to have opinions that are grounded in a consistent philosophy (rather than just a pragmatic collection of political points of view, as discussed here).  As a result, rather than quoting stats on illegal border crossings or the number of Al Qaeda operatives supposedly running around the Arizona desert, I thought I would try to lay out the philosophical argument for immigration.

Individual Rights Don't Come From the Government
Like the founders of this country, I believe that our individual rights exist by the very fact of our existance as thinking human beings, and that these rights are not the gift of kings or congressmen.  Rights do not flow to us from government, but in fact governments are formed by men as an artificial construct to help us protect those rights, and well-constructed governments, like ours, are carefully limited in their powers to avoid stifling the rights we have inherently as human beings.

Do you see where this is going?  The individual rights we hold dear are our rights as human beings, NOT as citizens.  They flow from our very existence, not from our government. As human beings, we have the right to assemble with whomever we want and to speak our minds.  We have the right to live free of force or physical coercion from other men.  We have the right to make mutually beneficial arrangements with other men, arrangements that might involve exchanging goods, purchasing shelter, or paying another man an agreed upon rate for his work.  We have these rights and more in nature, and have therefore chosen to form governments not to be the source of these rights (for they already existed in advance of governments) but to provide protection of these rights against other men who might try to violate these rights through force or fraud.

So Citizenship Shouldn't Determine What Rights You Have
These rights of speech and assembly and commerce and property shouldn't, therefore, be contingent on "citizenship".  I should be able, equally, to contract for service from David in New Jersey or Lars in Sweden.  David or Lars, who are equally human beings,  have the equal right to buy my property, if we can agree to terms.  If he wants to get away from cold winters in Sweden, Lars can contract with a private airline to fly here, contract with another person to rent an apartment or buy housing, contract with a third person to provide his services in exchange for wages.  But Lars can't do all these things today, and is excluded from these transactions just because he was born over some geographic line?  To say that Lars or any other "foreign" resident has less of a right to engage in these decisions, behaviors, and transactions than a person born in the US is to imply that the US government is somehow the source of the right to pursue these activities, WHICH IT IS NOT.

In fact, when the US government was first formed, there was no differentiation between a "citizen" and "someone who dwells within our borders" - they were basically one in the same.  It is only since then that we have made a distinction.  I can accept that there can be some minimum residence requirements to vote in elections and perform certain government duties, but again these are functions associated with this artificial construct called "government".  There should not be, nor is there any particular philosophical basis for, limiting the rights of association, speech, or commerce based on residency or citizenship, since these rights pre-date the government and the formation of border.

New "Non-Right Rights" Are Killing Immigration
In fact, until the 1930's, the US was generally (though not perfectly) open to immigration, because we accepted the premise that someone who was born beyond our borders had no less right to find their fortune in this country than someone born in Boston or New York.  I won't rehash the history of immigration nor its importance to the building of this country, because I don't want to slip from the philosophical to the pragmatic in my arguments for immigration.

In the 1930's, and continuing to this day, something changed radically in the theory of government in this country that would cause immigration to be severely limited and that would lead to much of the current immigration debate.  With the New Deal, and later with the Great Society and many other intervening pieces of legislation, we began creating what I call non-right rights.  These newly described "rights" were different from the ones I enumerated above.  Rather than existing prior to government, and requiring at most the protection of government, these new rights sprang forth from the government itself and could only exist in the context of having a government.  These non-right rights have multiplied throughout the years, and include things like the "right" to a minimum wage, to health care, to a pension, to education, to leisure time, to paid family leave, to affordable housing, to public transportation, to cheap gasoline, etc. etc. ad infinitum.

Here is a great test to see if something is really a right, vs. one of these fake rights.  Ask yourself, "can I have this right on a desert island".  Speech?  Have at it.  Assembly?  Sure, if there is anyone or things to assemble with?  Property?  Absolutely -- if you convert some palm trees with your mind and labor into a shelter, that's your home.  Health care?  Uh, how?  Who is going to provide it?  And if someone could provide it, who is going to force them to provide it if they don't want to.  Ditto education.  Ditto a pension.

These non-right rights all share one thing in common:  They require the coercive power of the government to work.  They require that the government take the product of one person's labor and give it to someone else.  They require that the government force individuals to make decisions in certain ways that they might not have of their own free will. 

And since these non-right rights spring form and depend on government, suddenly citizenship matters in the provision of these rights.  The government already bankrupts itself trying to provide all these non-right rights to its citizens  -- just as a practical matter, it can't afford to provide them to an unlimited number of new entrants.  It was as if for 150 years we had been running a very successful party, attracting more and more guests each year.  The party had a cash bar, so everyone had to pay their own way, and some people had to go home thirsty but most had a good time.  Then, suddenly, for whatever reasons, the long-time party guests decided they didn't like the cash bar and banned it, making all drinks free.  But they quickly learned that they had to lock the front doors, because they couldn't afford to give free drinks to everyone who showed up.  After a while, with the door locked and all the same people at the party, the whole thing suddenly got kind of dull.

Today, we find ourselves in political gridlock over immigration.  The left, which generally supports immigration, has a lot at stake in not admitting that the new non-right rights are somehow subordinate to fundamental individual rights, and so insist new immigrants receive the full range of government services, thus making immigration prohibitively expensive.  The right, whether through xenophobia or just poor civics, tends to assume that non-citizens have no rights whatsoever, whether it be the "right" to health care or the more fundamental right, say, to habeas corpus.

A Not-so-Modest Proposal
So what would I do?  Well, this is blogging, so I am not really obligated to come up with a plan, I can just complain.  After all, Howard Dean said "Right now it's not our job to give out specifics", so why should I have to?  But, I will take a shot at it anyway:

  1. Anyone may enter or reside in the US. The government may prevent entry of a very short list of terrorists and criminals at the border, but everyone else is welcome to come and stay as long as they want for whatever reason.  Anyone may buy property in the US, regardless or citizenship or residency.  Anyone in the US may trade with anyone in the world on the same terms they trade with their next door neighbor.
  2. The US government is obligated to protect the individual rights, particularly those in the Bill of Rights, of all people physically present in our borders, citizen or not.  The government may also define a certain number of core emergency services (e.g. fire, police, trauma care) to which all residents, citizens or not, have equal access.
  3. Certain government functions, including voting and holding office, may require formal "citizenship".  Citizenship should be easier to achieve, based mainly on some minimum residency period, and can be denied after this residency only for a few limited reasons (e.g. convicted of a felony).  The government may set no quotas or numerical limits on new citizenships.
  4. All people present in the US pay the same taxes in the same way.  A non-citizen or even a short term visitor pays sales taxes on purchases and income taxes on income earned while present in the US just like anyone else.  Note that this is not radical - I am a citizen and resident of Arizona but other states like California tax me on income earned in that state and purchases made in that state.
  5. While I would like to eliminate much of the welfare state altogether, I won't address that today (Don't underestimate, though, how damaging the welfare state and the
    highly regulated economy can be to immigrants, and the problem that can
    cause, as demonstrated today in France)  For purposes of this plan I will merely state that the non-right right type government services should be divided into two pools:  Services only available to citizens and services available to those who are paying into the system. 
    • The first category might include pure handouts, like Welfare, farm subsidies, and public housing.  This category can even include public policy decision like "allowing squatters or vagrancy on public lands", since this is an effective subsidy as well in the form of public housing. 
    • The second include services like public transportation or unemployment insurance -- if the individual is paying the fair (for example, the employer is paying her unemployment premiums) then they should have access to the service.  Social Security is a tough beast to classify - I would put it in the "Citizen" category as currently structured, but would gladly put it in the "available to everyone" category if SS could be restructured to better match contributions with benefits, as in a private account system.

That's enough for now.  I wrote more on immigration here.

Postscript-  And please don't tell me that a government's job is to "defend its borders".  Its not.  A government's job is to defend its citizens and residents.  There are times that this job may literally require defending the borders (e.g. France in 1940) but that clever misrepresentation of the role of government is the linguistic trick immigration opponents use to justify all sorts of semi-fascist actions, like building this happy little wall in Nogales:

Nogaleswall_1

Which seems awfully reminiscent of this wall in Berlin:

 Berlinwall

Compare Berlin and Nogales.  What is the fundamental principle that makes preventing the movement of people one-way across a border one of the worst human rights violations in the last century, but preventing them from moving the other way across a border is a fine policy with bi-partisan support here in Arizona?

Technorati Tags:  , ,
,

Fascism and the Philadelphia Eagles

Living for many years in Dallas, including the three-Superbowl period in the mid-eighties, it was nearly impossible not to jump on the Dallas Cowboy bandwagon.  And, part and parcel (Parcell?) of being a Cowboys fan was hating those NFL east franchises the Giants, Redskins, and the Eagles (the Cardinals were also in the division, but were such a joke that they were not even worth hating, which is ironic since they are now my team here in Phoenix).

When we were driving up to Princeton reunions from Washington DC, my old roommate Brink Lindsey pointed out to me, as we passed the new Philadelphia stadium, that the Eagles were named in the 1930's after the blue eagle of the National Recovery Administration, or NRA.

I found this hard to believe, that anyone would name a sports franchise after one of the worst pieces of legislation in American history, but it seems to be true.  Apparently, naming the team the eagles was part of a larger soviet-style propaganda program:

For a while, there was no escaping the bird. Towns all over the country got on the Blue Eagle bandwagon. A hundred thousand schoolchildren clustered on Boston Common and were led in an oath administered by Mayor James Michael Curley: "I promise as a good American citizen to do my part for the NRA. I will buy only where the Blue Eagle flies." In San Francisco, 8,000 schoolchildren were dragooned into showing their
allegiance by forming themselves into a human Blue Eagle on the outfield in Seals Stadium. In Cleveland, 35,000 enthusiasts gathered in the public square to cheer the unveiling of the Blue Eagle flag while city officials proclaimed the "end of the depression." In Memphis, 125,000 people watched another 50,000 march in the city's traditional Christmas parade; on the final float Santa Claus sat resplendent upon a big Blue Eagle, from which perch he threw candy to children. In a New
Orleans park, NRA celebrants erected an enormous pyramid on which were inscribed the names of more than 7,000 people and businesses who had taken the pledge; on top of the pyramid was a nine-foot eagle made of blue lights, while red and white bulbs spelled out "We Do Our Part." In Philadelphia, citizens were soon cheering for a new professional football team whose name was inspired by the general's icon: the Philadelphia Eagles. In Roanoke, North Carolina, "Shanghai Mickey" offered Blue Eagle tattoos for a mere 50 cents. In Atlantic City, beauty contestants had the Blue Eagle stamped on their thighs.

What's next?  Should we rename the Red Sox the Boston Alien and Sedition Acts?  How about having the Chicago Smoot-Hawley Tariffs?

By the way, for those who are not familiar, the National Industrial Recovery Act of 1933 that formed the NRA was the centerpiece of Roosevelt's New Deal, and was modeled on Mussolini's fascism in Italy (via Sheldon Richman of the Concise Encyclopedia of Economics):

The image of a strong leader taking direct charge of an economy during hard times fascinated observers abroad. Italy was one of the places that Franklin Roosevelt looked to for ideas in 1933. Roosevelt's National Recovery Act (NRA) attempted to cartelize the American economy just as Mussolini had cartelized Italy's. Under the NRA Roosevelt established industry-wide boards with the power to set and enforce prices, wages, and other terms of employment, production, and distribution for all companies in an industry. Through the Agricultural Adjustment Act the government exercised similar control over farmers. Interestingly, Mussolini viewed Roosevelt's New Deal as "boldly... interventionist in the field of economics." Hitler's nazism also shared many features with Italian fascism, including the syndicalist front. Nazism, too, featured complete government control of industry, agriculture, finance, and investment.

And further, from John Flynn's The Roosevelt Myth via Anthony Gregory:

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc. The NRA provided that in America each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. But it was essentially the same thing. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. This was fascism. The anti-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now he suspended them and compelled men to combine.

If you are not familiar with the NRA, you need to be if you are going to come to a conclusion about the New Deal and just how statist FDR's aspirations were.  Henry Hazlitt has a long evaluation here. In the end, the NRA was struck down by the Supreme Court, and never revived in large part because it was a disaster for the economy.  Many blame the NRA for strangling the recovery that began in 1933-34 and thus extending the depression. Parts of the law (collective bargaining, minimum wage) were incorporated in other later legislation, but the core concept of organizing industrial cartels with government backing to run industries and set prices, wages, and production levels died, fortunately.

By the way, the countries today that I know of that most closely adhere to the assumptions of the NRA are France and Germany, who expelled the fascists in the forties only to eventually adopt most of their corporatist economics.

I Guess I am an Extremist

I have not really had the time to do the research to form an opinion about Bush's judicial nominees, and the MSM is not very helpful in its coverage on the issue.  I wrote here that the judiciary has started to overreach of late, legislating from the bench to advance an agenda generally supported by the Democrats.  I don't know the candidates well enough to decide if these proposed judges are conservative activists who want to legislate from the bench but for conservative ends, or if they represent a first shot at reversing extra-constitutional judicial activism (which I would support).

However, I may have started to develop an favorable opinion on a couple of judges, based on what I have learned from their detractors.

Take this example, from a NY Times editorial, March 6, 2005.  In disparaging how extremist Bush judge nominees are, they use the example of:

Janice
Rogers Brown, who has disparaged the New Deal as ''our socialist
revolution.''

Woe is me, I must be an extremist.  First, the New Deal was clearly a "revolution", in that it was one of two events (the other being the Civil War) in the last 200 years that fundamentally changed the role of the federal government in what was a massive reinterpretation of the Constitution.  But was it socialist?  We can argue about whether the New Deal legacy that reaches us today is socialist or not- many quite normal non-extremist folks would argue yes and many similarly rational folks would argue no.

However, arguing the nature of the New Deal from what programs reach us today leaves out a lot of the picture.  Much of the New Deal was voided by the Supreme Court.  While some was re-passed later once FDR had a chance to remold the court with his own (for the time) extremist ideologues, some of the most socialist-statist-fascist legislation never was reinstituted.

The most dramatic of these institutions that fortunately were left on the cutting room floor was the National Industrial Recovery Act, or NRA.  Roosevelt actually modeled the NRA on Mussolini's fascism in Italy, so I guess it might be more correct to call it fascist rather than socialist but in practice, I can't ever tell those two apart.*

The image of a strong
leader taking direct charge of an economy during hard times fascinated
observers abroad. Italy was one of the places that Franklin Roosevelt
looked to for ideas in 1933. Roosevelt's National Recovery Act (NRA)
attempted to cartelize the American economy just as Mussolini had
cartelized Italy's. Under the NRA Roosevelt established industry-wide
boards with the power to set and enforce prices, wages, and other terms
of employment, production, and distribution for all companies in an
industry. Through the Agricultural Adjustment Act the government
exercised similar control over farmers. Interestingly, Mussolini viewed
Roosevelt's New Deal as "boldly... interventionist in the field of
economics." Hitler's nazism also shared many features with Italian
fascism, including the syndicalist front. Nazism, too, featured
complete government control of industry, agriculture, finance, and
investment.

If you are not familiar with the NRA, you need to be if you are going to come to a conclusion about the New Deal and just how statist FDR's aspirations were.  The actual text of the act is hereHenry Hazlitt has a long evaluation here.  In the end, the NRA was scrapped in large part because it was a disaster for the economy.  Many blame the NRA for strangling the recovery that began in 1933-34 and thus extending the depression.  Parts of the law (collective bargaining, minimum wage) were incorporated in other later legislation, but the core concept of organizing industrial cartels with government backing to run industries and set prices, wages, and production levels died, fortunately.

Update:  More here.  Mr. Gregory quotes John Flynn's The Roosevelt Myth:

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and
could plan production, quality, prices, distribution, labor standards,
etc. The NRA provided that in America each industry should be organized
into a federally supervised trade association. It was not called a
corporative. It was called a Code Authority. But it was essentially the
same thing. These code authorities could regulate production,
quantities, qualities, prices, distribution methods, etc., under the
supervision of the NRA. This was fascism. The anti-trust laws forbade
such organizations. Roosevelt had denounced Hoover for not enforcing
these laws sufficiently. Now he suspended them and compelled men to
combine.

*  I disagree with people who want to argue that socialism is freedom but without property rights while fascism is property rights without other freedoms.  Neither of these conditions are stable, and both converge to the same destination of suffocating statism, just with different starting points and different people in charge.  One of the things that drive libertarians nuts is being presented with a grade school civics book that has a linear political spectrum with fascism on one end and communism on the other.  Are those really my only two choices? 

 

Its Time to End Licensing of Broadcast Media

Television and Radio have always had a very different regulatory regime than any other type of media.  Unlike, say, newspapers or cable TV companies or satellite providers, television and radio companies have to get and continue to renew licenses and are expected operate in the public interest, whatever the heck that is.  TV and radio stations get access to what has become very valuable bandwidth for free, the only cost being that they have to give regulators what amounts to a veto over their content.  Because of this regulatory structure, you get goofy stuff like this:

The Federal Communications Commission's enforcement bureau has asked NBC for tapes of the opening ceremony of the Summer Olympics, apparently in response to one or more indecency complaints.

Its fun to laugh at this stuff, and it drives me crazy, but at the end of the day the problem is not the FCC or Bush or red states or fundamentalists.  The problem is the first-amendment defying concept that the Feds should have any say in media content.  Period.  The FCC is actually in a difficult spot - by law, they have to enforce decency standards, but when they do so, they look like moralistic thugs.

I do not know the history here, but for some reason the US government, perhaps because it was in the throws of the socialist/fascist New Deal era, abandoned all of its traditional and successful models for allocating a newly discovered or accessible resource (in this case, parts of the spectrum) in favor of this public service liscencing approach.  I can think of at least three different models that the US government has used in similar circumstances and that have all worked much better:

  • The Homestead Act:  This established the principal of being the first to stake out and improve a resource (in this case parcels of land) in allocating government lands in the west.  Perhaps the best piece of legislation in the history of the country.    Could have easily followed this principle in the broadcast spectrum - an individual or company would have to broadcast continuously on a certain frequency for 2 years to gain permanent ownership
  • Mining Law: In some ways similar to the Homestead act, again it grants ownership of a resource to people who add value to it (in the case of mining, to the people who prospected for it and discovered it).
  • Outright Sales:  The government does this all the time, including land sales, mineral lease sales (e.g. offshore oil) and more recently cell phone spectrum sales.

Lets end this regulatory structure now:

  1. Grant all current licensees ownership of the spectrum they are currently using.  Drop all content-related regulation. 
  2. There are many non-licensed outlaw low-power stations operating.  Create a set of homestead requirements that they can get access to their bandwidth if they meet certain requirements within a certain time frame
  3. Acknowledge that technology today allows more of the spectrum to be used than channel spacing of the 1950's allowed.  Open up more of the holes in the spectrum for use.
  4. Sell the newly available spectrum