Liberty Law Talk

This next edition of Liberty Law Talk features a discussion with Paul Kengor, co-editor with Jeffrey Chidester, of a new volume titled Reagan’s Legacy in a World Transformed that explores the incredible presidency and continuing impact of Ronald Reagan.

Peter Schuck comes to Liberty Law Talk to discuss Why Government Fails So Often. Like James Buckley and John DiIulio, Schuck doesn’t have much good news for the large majority of Americans who are disgusted with the performance of the federal government and its ability to devise and execute policies. Schuck notes that in April 2013, only 28% of Americans had a favorable opinion of the federal government. Many have tried to explain this phenomenon with various government affirming answers, but Schuck is forthright in the book and this interview when he states that the best answer is that the “federal government does in fact perform poorly in a vast range of domestic programs.” One problem, among many, is that the bar to federal action is now so low. They can’t stop helping us. When problems erupt: corrupt corporations, national security fears, financial crises, deficiencies in private healthcare, etc., the answer is massive statutes (Sarbanes Oxley, the Patriot Act, Dodd Frank, Obamacare), and even larger amounts of regulatory production and agencies to enforce them. Little consideration is given, Schuck notes, to questions of how markets will react to the regulations, how accurate the information is that policy-makers have relied on in shaping policy, and how credible and manageable the final product will be to those who will use it. Timeless problems of how centralization and knowledge impede effectively implementing the policies are rarely considered. Compounding this problem, Schuck  says, is Congress itself, which is largely willing to push the real questions of statutory guidance onto the federal bureaucracy. This discussion with Schuck also explores what he calls policy successes which are characterized by government not attempting to reshape markets and persons, but merely opening a legal door to goods for which there was pent up demand. Schuck remains a believer in the need for a large federal government, but notes that the way to competency and effectiveness isn’t likely to be found without substantial reforms in policy-making.

Frequent contributor Greg Weiner speaks with Richard Reinsch about his latest book, American Burke: The Uncommon Liberalism of Daniel Patrick Moynihan, arguing that Moynihan’s liberalism combined a “stubborn optimism” in what government could and should do with a profound sense of limitations on “how it should attempt to do it.”

John Tamny comes to Liberty Law Talk to discuss his excellent new book Popular Economics. Many will recall the first time they read Hazlitt’s Economics in One Lesson. That book’s clear prose and striking examples provided a foundational introduction to free markets. But, as is often true, our practices are better than our theories. We instinctively grasp economics in our daily habits and choices but misunderstand the conditions and principles that support economic growth. Americans are confused about inequality, trade deficits, antitrust policy, fiscal policy, minimum wage, job creation, etc, despite pursuing their own economic self-interest without much thought. Dispelling such confusion is John Tamny whose work will become the Hazlitt of our day. Using examples from the Rolling Stones to illustrate the folly of taxing capital gains, why common antitrust theories were exposed by the FTC’s blocking of the merger of Blockbuster and Movie Gallery just as Netflix was making both companies obsolete, and demonstrating why the explanations of the 2008 Financial Crisis strain to avoid the obvious factor of currency devaluation, Tamny gives us free market lessons that we can’t not know. Enjoy the interview and buy the book!

FDR observed that “The process of collective bargaining . . . cannot be transplanted into the public service.” What does it mean for taxpayers if government workers organize into unions and engage in collective bargaining arrangements? What actually checks and balances their desires for greater pay and benefits? Politicians? Engaged citizens? Will dutiful public servants voluntarily restrain their appetites for the public good? To ask these questions is to answer them with a wry smile. This episode of Liberty Law Talk with Professor Daniel DiSalvo on his new book, Government Against Itself, focuses on the dramatic growth of public sector unions in America. Legislatively created by states in the 1960s and 1970s, the rise of these unions has occurred without much public comment or notice. That changed with the 2008 financial crisis that exposed the fiscal weight these unions were imposing on states and localities, themselves struggling to meet their basic obligations. Our guest doesn’t have much good news for those who believe in limited government. Public unions have contributed to unfunded pension liability for state and local government to the tune of $3.2 trillion or 21% of GDP. And this figure doesn’t include healthcare costs, estimated to be another $1 trillion. Crucially, DiSalvo stresses, government services, so greatly needed by the working class, languish because the primary need in many public budgets is to fill the growing salary, pension, and benefit needs of union members. In short, fundamental government work can’t be performed with anything like fiscal efficiency under the model of service that public sector unions create. DiSalvo has the horrid details in this informative conversation on the past, present, and future of public sector unions in America’s states and localities.

This edition of Liberty Law Talk discusses with the Wall Street Journal’s Bret Stephens his recent book, America in Retreat. Stephens argues that an America which declines to engage globally with its military is accepting a false promise of peace at the expense of rising disorder. The introduction chapter is entitled “The World’s Policeman” where Stephens quotes President Barack Obama’s proclamation in a 2013 speech: “We should not be the world’s policeman.” Similarly, Rand Paul states that “America’s mission should always be to keep the peace, not police the world.” “This book,” says Stephens, “is my response to that argument.” Our conversation focuses on the foreign policy choices that America should make by considering the factors that must be weighed and analyzed to make those decisions. Here, we disagree on foreign policy and strategy. If we believe, as Stephens argues, that “No great power can treat foreign policy as a spectator sport and hope to remain a great power,” then what, exactly, will that require? What are the ends that we seek, and what are the means at our disposal for pursuing a particular course? Why is a certain regional or national disorder in a part of the world America’s problem to remedy? How is that determination made? While there is plenty of discussion on foreign policy here, Stephens also notes the strength of America. To Stephens’ credit he argues against the declinist talk we’ve seen take hold in recent thinking on America’s future. He marshals important data and tantalizing anecdotes that indicates something very much the opposite. Stephens observes the ways that elites from supposedly rising nations like China keep connecting their fortunes and their families to America. What do they know about us and about their own country that we choose to forget or ignore in our bemoaning of America? This conversation reminds us that for America decline is very much a choice. We can and should choose the better course.

Paul Nolette comes to Liberty Law Talk to discuss his book Federalism on Trial, which demonstrates how state attorneys general quietly became significant national policymakers. What was once a rather staid position in state government has become the source of entirely new regimes of conduct impressed on companies and industries. Incredible evidence of this legal revolution can be seen in the Master Settlement Agreement with the tobacco industry, which, courtesy of the attorneys general, sent $200 billion to the states and negotiated an entirely new cartel for the industry without a single vote in Congress. While some attorneys general have challenged key pieces of the Obama administration’s regulatory agenda, mostly what has occurred the past few decades is a bipartisan pro-regulatory agenda. In short, Nolette’s work indicates that we have been governed by a band of roving bandits who “bargain in the shadow of the law.” Under threat of investigations, lawsuits, and legal fees, companies and entire industries have accepted regulatory codes that, in many cases, were rejected by legislatures or not implemented by agencies. Not to worry, we discuss how State AGs pick up the slack, as it were, and make law in the gaps of accountability. That’s power, but it’s rule over and above the law. We have Paul to thank for helping us get perspective on this disordered regulatory situation.

If there was any hope left that a Putin-led Russia might still transition to a democracy with a stable rule of law and truly independent civil society, Karen Dawisha’s Hayek Book Prize nominated Putin’s Kleptocracy would seem to have squashed it. Indeed, Dawisha argues that Putin basically rules through and with a criminal conspiracy whose goals are to “control privatization, restrict democracy, and return to Russia to Great Power (if not superpower) status.” She cites as powerful evidence the penalties imposed by the United States in April 2014 following the Russian invasion of Crimea. The American government didn’t primarily target Russia in its sovereign capacity, but instead issued asset freezes and travel bans on government elites connected to Putin. The best way to hurt the Russian regime was to issue private restrictions on many of its high-ranking officials. Our knowledge of Putin largely owes to his clamp-down on journalists, speech, and protest rights that has grown worse over time, leading to widespread public resistance in 2011. By most accounts, Putin’s presidential win in 2012 has only led to an increase in repression of dissenting citizens. Dawisha discusses that this pattern of rule began early in Putin’s political career. Putin began assembling his power base when he was deputy to the mayor of St. Petersburg. Here, he found a calling of sorts in his active management of power in St. Petersburg by allying with business, security, and political elites. He took these groups’ interests with him to Moscow in 1996 where he led the Federal Security Service. Called to Moscow for precisely his capacity to manage interests, Dawisha argues that “Putin and his circle sought to create an authoritarian regime ruled by a close-knit cabal with embedded interests, plans, and capabilities, who used democracy for decoration rather than direction.” In the midst of Russian weakness in the 1990s, Dawisha discusses her documentation of Putin’s association with ex-KGB and former Communist Party politicians who believed in ‘revanche.’ They prepared for the moment of restoring Russian power, enlarging their wealth, and increasing their political power which was made possible with Putin’s presidential victory in 2000. And Dawisha observes that from the moment of Putin’s electoral triumph, “Russia ceased to be a place where democratic dreamers could flourish.” Dawisha’s account of Putin also involves his “pleonexia” or nearly insatiable need for expensive personal items. Robert Kraft, owner of the New England Patriots, found this out the hard way in 2005, when Putin tried on Kraft’s first Super Bowl ring, encrusted with 4 carats of diamonds. Putin wouldn’t return it and departed the room, ignoring Kraft’s repeated demands to give it back. President Bush told Kraft that it would be better, foreign relations and all, if he stopped talking about it, and acknowledge that he had gifted it to Putin.

This episode of Liberty Law Talk welcomes a truly gregarious man of public administration, John DiIulio, on his new book, Bring Back the Bureaucrats. That title might well lead to a collective sigh filling the air; however, DiIulio argues that we’re dishonest about the federal government in two significant ways: (1) The federal government spends lavishly, but we borrow it from the wealth of future generations rather than tax ourselves. (2) We actually administer most federal government programs not with federal bureaucrats but with a host of intermediaries: nonprofit entities, for-profit companies, state and local government employees that DiIulio refers to as “government by proxy.” The number of federal bureaucrats hasn’t increased since 1960 while federal spending has ballooned. State and local government employees have increased dramatically in large part, DiIulio notes, to administer federal programs at their level. As a result, DiIulio argues that this government by proxy is another lie that lets us have big government but without actually seeing and feeling it. In the process, the feds have made many state and local government employees their agents while similarly corrupting the nonprofit sector, making it dependent on government for its revenues. The effects can be seen in incompetent and mismanaged government agencies, the proxies constantly lobbying for more money, with evident manifestations of stupidity visible in the daily headlines. And so we can disagree with DiIulio. Will hiring federal bureaucrats with the intention that they must administer their own programs result in more limited, transparent, and accountable government? We might wonder how, exactly, is anything as large and monstrous as the federal government ever going to work well and accomplish its objectives efficiently? The nature of the case seems to augur against such a possibility. But DiIulio is here pointing to another discomfiting part of our government. We might dismiss his remedy but probably not his diagnosis.

Did you know that Adam Smith’s The Theory of Moral Sentiments  can change your life? In essays on self-knowledge, happiness, virtue, being loved and being lovely, making the world a better place, and most importantly, fame and self-deception, Russ Roberts’ new book on Smith explores why the 18th century Scottish philosopher has the cure for the denizen of late modernity. The man mostly known for articulating in The Wealth of Nations how nations become rich and how they impoverish themselves also wrote eloquently on why we want to be loved and why we struggle with being lovely. In short, Smith soberly reminds that we easily deceive ourselves as to just how lovely we are. We want fame and wealth, Smith says, but does this conduce to our happiness? At the heart of our conduct, of knowing how to hit true north with our actions, is the impartial spectator according to Smith. This spectator, Smith says, “is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who . . . calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it.” Roberts observes that this spectator is the community itself, reminding us of how small we are, of the humility that we easily forget. This is the problem we face in living well. How do we stand up in relation to the spectator? But is this also Smith’s problem? We discuss what problems are introduced here with Smith’s impartial spectator. Does it have the objective capacity to chasten us if its standards are of the community? What if the community itself is bad? There is also what is commonly referred to as the Adam Smith problem, which Roberts invites us to consider. How does the Smith of self-interest, of the commercial society that we see in The Wealth of Nations, reconcile its passions with the sobriety of life that he recommends in The Theory of Moral Sentiments?