Sunday, January 31, 2010

Free Trade and Fair Trade -- Playing to Play vs. Playing to Win

Have you been to Seoul? Have you been to China? If you are a free trade absolutist, you should certainly go there and check it out. Go to an electronics store. Try to find car dealerships. You may come back with a different perspective on what we call “free trade.” Just as one example, when I was last in Seoul I went to the biggest electronics store, it’s really more like a mall, in the city, called Yongsan. The salient fact about Yongsan was that the first two floors were reserved for Korean products only. To find the American (or Japanese) electronics, you had to go upstairs and find the special store. Unbelievable. They’re not doing that for customers’ sakes. They’re not doing that to make themselves more money. The only possible reason a retail store would do that is because the government told them too. That’s just the beginning.

The situation is that we are engaged in one way free trade where Asian countries can export anything they want to us and we can export a token amount to them. They wind up with lots of money and we wind up with lots of debt. Good deal? Bodes well? I’m not so sure.

How did we get here? Three factors.
- First, economic textbooks indicate that if two countries have free trade they can each do what they are good at and everyone will wind up better off. Example: France is good at making wine. England is good at making sweaters. The English and the French will both be better off if the French focus on making great wine, the English focus on making great sweaters and they trade back and forth. Everyone will have both great sweaters and great wine! Makes sense.
- The second factor is that for some time we have managed our trade policy toward Asia to be a sort of Marshall Plan for Asia. It was important to us that Japan prosper after World War II. It was important to us that South Korea, which was basically agricultural prior to the Korean War (the industrial center was in the North), prosper. More recently, we were very eager to see China prosper on the theory that prosperity would make them more like us and make them like us more.
- The third factor is that Americans want to play fair. We don’t want to cheat. We have in fact an abiding sense of guilt toward poor foreigners and we don’t want to exploit them because, after all, we are so rich. Well, on this score, friends, I can tell you right now that we should get over it. These guys are plenty rich and they have no interest in being fair. They are interested in being rich and their politics and policies are appropriately attuned to that objective. They are playing to win. We are playing to play, or perhaps even playing to lose.

The economic theory makes a lot of sense on paper. However, reality is more complicated and the correct response to the theory is not to be a free trade absolutist. There are many prosperous countries that do not have free trade, including our Asian partners and our European partners. In fact the Asian protectionist, or mercantilist, economies seem to have become much wealthier while they have closed domestic markets. Obviously Smoot-Hawley or no Smoot-Hawley, managed trade obviously can succeed.

In the early 50’s our Marshall Plan policy made a lot of sense. Japan’s GNP in 1951 was 4.3% of the US economy, comparable to the Netherlands or Argentina today. It was reasonable to suppose that the great American economy could tolerate a few small one sided trade relationships for the sake of international stability. Well today things are different and these huge inflows of foreign goods are getting stuck in our craw. It is too much to continue.

Today’s huge trade imbalances of hundreds of billions of dollars per year are an order of magnitude bigger than they were ten years ago. It is creating unpredictable volatility in our currency and economy and it is unsustainable. It is upsetting US industries and workers in ways that, if they were part of the normal vicissitudes of international markets, might be tolerable but as part of a deliberate international strategy are not tolerable.
Now China is restricting contracts with the Chinese government to companies with “indigenous innovation, which means that the intellectual property behind products or services they are buying must be owned by Chinese companies. This is an $85 billion market China just closed off from US competition. As Rick Larsen (D-WA), co-chairman of the US-China Working Group recently said: “”When it comes to protectionism, we’re minor league players when you look at what China is doing.” (Good article here.)

A more longstanding and fundamental problem with our Asian trade relationships concerns intellectual property. This is an area where the United States makes big money internationally -- software, movies, games and technology -- and it is increasingly the focus of our economy. Piracy is rampant in Korea dn China. And coincidentally, this is one aspect of life in China that the Chinese government despite its firm control over so many aspects of life in China can do nothing about. Copying of US software of all kinds in China and Korea is rampant and it benefits those governments to keep it so. Aside from failing to protect against piracy, Korea and China explicitly regulate and limit the distribution of US movies in their countries.

A Microsoft CEO Steve Balmer recently said on CNBC, “Intellectual property protection in China is very, very bad -- abysmal. It’s almost not fair. We’re buying a lot of goods from China but the things that US companies can sell -- pharmaceutical products, media software -- …is not getting paid for in China.” It’s almost not fair??

This is working well for China and Korea in particular. China is getting rich. They are building their cities. Korea is using its protected home markets to build up manufacturers like Hyundai and Samsung so they can take on international markets. Our Marshall Plan has worked in one respect -- our Asian trading partners are rich now -- but it is worth mentioning that it has not worked in another respect. It has not made them more like us. Specifically China has not become more democratic because they have engaged in international trade and more of their citizens have become affluent.

We have to discontinue our Marshall Plan policies toward Asia and demand policies that create balanced and sustainable trade relationships. This should be the policy of the Republican Party.

Don't Get Overconfident Because of Scott Brown

In the aftermath of Scott Brown’s victory in Massachusetts, many Republicans are tempted to forget 2008 and blame our recent defeats on a stroke of economic bad luck and/or on John McCain. But it would be short-sighted to miss the opportunity to learn from our recent failures. Scott Brown or no Scott Brown, the Democratic Party still easily controls both houses of Congress and we lost the last Presidential election by a wide margin. Our recent success is something like kicking a field goal at the end of the first half so that we can run into the locker room behind by only three touchdowns! We’ve got a long way to go and we still have some things to fix. The field goal feels good, but let’s not get ahead of ourselves. If we do not make changes to our platform or (if you will accept a business metaphor in the same paragraph as a sports metaphor) to our “product,” I believe we will sustain our momentum.

Even a successful party, like a successful team, has to occasionally learn a new play. When parties succeed in a major way, they often instinctively stick with their winning play until it stops succeeding, and then some. The time for the Republican Party to learn a new play is now. The Democratic Party went through a similar experience not long ago and they have emerged much stronger. Let’s look at that.

The Democratic Party had a great run for a while in the post war era. They took control of the House of Representatives in 1955 and held on for more than 20 years. Not only had they won World War II and ended the depression, but by 1970 it was clear that they had also been on the right side of the Civil Rights issue. So the exultant, proud Democratic Party kept banging away on the same themes. Throughout the 1960-1980 period and into the 1980’s, the Democratic Party tried to pass a civil rights bill and a pro-union bill in every legislative session. In the beginning the electorate responded. But in the end, the need for those programs resonated less. “Civil rights,” for instance, evolved from fundamental civil rights to affirmative action, which simply conferred privileges on groups that were voting for Democrats. By the late 70’s, the Democratic Party was doing the same thing it had done for a while but times were a changing and there were new problems to solve. The Party was no longer in step with the people. Carter lost 15 seats in mid-term election of Carter’s first (and only) term and in 1980 he started a major Democratic Presidential losing streak.

The Democratic Presidential losing streak did not end until a reformer with a new paradigm-shifting perspective was nominated; I am of course referring to Bill Clinton in 1992. But until the very end there were old timers who still believed that the key to the Democratic Party’s national success was more civil rights and more pro-union legislation. There are some who remain today, which is the nature of paradigms.

Bill Clinton, by modernizing the platform of the Party, saved it and helped it grow. The Democratic Party needed him, even though some felt he had let them down by embracing welfare reform in his first State of the Union Address and by signing The Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Three members of the Clinton Administration resigned in protest when Clinton signed the Welfare bill but it made the Democratic Party much stronger and more attuned to the people. Clinton got an albatross off the Democratic Party's back. It could again lay claim to being a responsible governing party.

The Republican Party has its special play that has worked well (at least on the Presidential level) at least since Ronald Reagan. Abortion, gun rights, Christianity, low taxes, a strong defense, free trade, law and order and fiscal conservatism have been the key planks. I would argue, and have argued, that three issues need to be re-examined to maximize our future success: abortion, fiscal conservatism and free trade. This is a good time to make a change and get a few albatrosses off our backs.

Abortion
Abortion as a political issue is a loser. It is mere theater. It does more to excite democrats and drive off moderates than it does to excite Republicans; it is mere theater because the odds of the federal government moving away from Roe v. Wade or seriously moving off the three month rule articulated in that decision are zero. So abortion is a great way to volunteer for defeat. See my complete analysis of the issue here.

Inconsistent Fiscal Conservatism
It’s not that I think fiscal conservatism is bad; it’s that we need to become more credible on this issue. Financially, Republican candidates always say we want lower taxes, higher military spending and balanced budgets. This position I believe has come to lack credibility. What always happens is that we cut taxes, raise military spending and fail to cut domestic spending. Then deficits rise. Reagan and Bush II let the deficits rise. Bush I raised taxes. None of our recent presidents succeeded in doing what we like to say we want to do. When we controlled Congress it didn’t happen either. So our credibility on this issue is not strong, and to some extent I think McCain paid the price for this. After the Bush tax cuts (and deficits), I just don’t think people were interested in hearing someone with the same line on taxes and deficits.

Here’s how government economics work in a nutshell. Military spending goes up every year faster than the rate of US economic growth. Social Security and medical spending go up every year faster than the rate of US economic growth. The rest of the budget is the tail of the dog. So almost by definition the government’s percent of GDP goes up over time. Therefore, either taxes have to go up every year or the deficit does. It’s as simple as that!

Taxes can’t go to 100%, and taxes are a disincentive to work and grow the economy. So we are right to want to hold taxes low. But I think where we need to improve our credibility is in defining the areas where we intend to save money. What will it be? Military spending or Social Security/Medicare? That is too big a question to answer here, but for now I will just say that it is credible to say that we are going to cut taxes and cut Medicare and reduce military spending but is not credible to say that we are going to cut taxes and cut nothing.

Free Trade
My next post will be on free trade but I would argue that right now our position is one of free trade absolutism and that this is blind to the realities of international trade that are morphing and distorting our economy in potentially dangerous ways. This issue is not the #1 determinant of votes, but it is ultimately very important for the economy. More in my next post.

Tuesday, January 26, 2010

A Republican Approach to Governing

The Obama healthcare effort suffered from two process problems. First, the goal was unclear. Second, it tried to do too much at once.

If I may direct your attention to the New York Times editorial of October 18, 2009, “The Public Plan, Continued.” The editorial advocates for the “public option,” the creation of a new government-run health insurance company. In the first paragraph, the editorial advocates for the public option because it will “inject more competition into insurance markets, hold down the cost of insurance policies, and save money for the federal budget.” Putting aside the absurd reasoning later in the piece, with which I will not trouble you, the key is that in October 2009 the New York Times was selling Obamacare primarily as a cost cutting move. In September 2009, Obama had focused his message on getting insurance for 30 million uninsured people. So what is it? Medical care for the poor? Cost cuts for everyone? If cost cuts are the goal, how much are we cutting? If we're helping the poor is our goal to reduce the number of uninsured to zero? What are we doing here?

If you are going to launch an initiative, you must have a clearly articulated goal. Otherwise, you cannot sell it and you cannot know whether you are successfully achieving your goal. You cannot be effective.

Trying to create one single, perfect, comprehensive solution to a problem is typical of an intellectual. I like intellectuals but they are often bad managers. Anyone with experience with major businesses can tell you that the best way to solve a big problem is to disaggregate it into a bunch of small, manageable problems and start solving the easiest ones first. Among other things, this is a humble approach that admits we cannot be sure, despite the careful planning of however many well trained and compensated MBAs and analysts, what the effects of initiatives will be. What we know is that we will learn from experience -- in fact we are confident that in some ways we will be wrong. Therefore in business we make one small bet at a time rather than one huge bet all at once. The Republicans recommended exactly such a “low hanging fruit” approach to healthcare, proposing to begin any set of reforms with some manageable, reversible experiments. As Lamar Alexander said recently from the floor of the Senate, “Human experience has always taught that enough small steps in the right direction is one good way to get you where you want to go and also a good way to avoid many unexpected and unpleasant consequences.”

Similarly, in governance, we should follow four principles to form a Republican style of governance:
- Focus on things we can accomplish that will yield tangible results.
- Be clear about what our goals are
- Approach problems humbly. Launch incremental, step by step programs. We will reverse programs that don't work. We will double down on programs that do work.
- Look back and be vocally self-critical if we fail to achieve our goals

Such a style would provide a healthy contrast with the Obama administration’s first year.

6 things the Republican Party needs to give up

This is my big opportunity to lose friends. But sometimes people need tough love. This is one of those times. Here are four things Republicans need to get away from in stump speeches:

Overdoing it with Christianity
I am a Christian. I go to church every Sunday. Love it. I often whistle “Praise God from whom all blessings flow,” which is a beautiful melody and is true. But our nation does not require you to be religious or to follow any particular religion. It may excite a few to talk about restoring the United States as a “Christian nation” but it hurts the party and perhaps the unity of the nation. It is simply unwelcoming. If we want to get things done, we have to stop using this rhetoric. The United States was designed to be friendly to people of all religions. Let’s keep it that way.

Abortion
Roe v. Wade is a poorly reasoned opinion. No doubt. It is dangerous to allow judges to find new fundamental rights in the “penumbra of the Bill of Rights.” That’s called a one man Constitutional Convention. But at this point the three month rule is a settled compromise. Bush tried to stack the court with pro-lifers and it didn’t work out. It is unrealistic to believe it will work out next time and if it did it would be the greatest gift we could ever give the Democrats. I am not pro-abortion but we need to let this one lie because it is not going to change. At this point it is just a polarizing waste of time. If you are a Republican candidate and you launch into a harangue about abortion what you are saying is "I would like to waste some time now on an emotional issue in hopes of distracting you from the real issues in this campaign." Just get a sign and hold it up during the abortion part of your speech. Note by the way that Scott Brown handled abortion exactly as I am recommending.

I am not saying we should not speak out against partial birth or other late term abortions. But we should not get the Democratic Party excited with rhetoric about banning abortions altogether. To do so, we give them too much without getting anything. Moreover, it is true that eliminating that three month window will lead to a large number of illegal abortions. Just because you illegalize something doesn’t mean it stops. It just changes the economics of it.

Reducing taxes without cuts
For 30 years now we have been saying we were going to cut taxes, raise military spending and balance the budget. Hmmm… Something is missing there. Oh, yes. Cutting spending. We don’t actually ever get around to doing that even when we control Congress, so we don’t ever actually balance the budget. Republicans will protest that when we cut taxes we will increase revenue. Really? Well that didn't close the budget gap for Reagan, Bush or Bush II so can you explain why it is going to work next time? People do not believe this anymore. After running on this rhetoric for 30 years, the party has lost credibility on this issue.

If the party is going to run on lower taxes (and I heartily recommend that we do), it must specify where we are cutting. People know empty rhetoric when they see it. John McCain paid the price for towing the debunked party line on this issue.

Anti-intellectualism
Democratic leaders are too intellectual for their own good. They are fond of elaborate mental marzipans, often get lost in a forest of theories about Marxism or Global Warming and emerge with horrible ideas. Which is great -- as Napoleon said, “never interrupt your opponent when he is in the middle of making a mistake.”

However, we have to drop the anti-intellectual vibe if we want to be a major party, especially if we want to have any success on the coasts. You can’t have a major political party devoid of ideas and without any sort of intellectual leadership. I guarantee you that we will be marginalized if all the smart people are playing for the other team.

Reagan didn’t come off as particularly highfalutin, but he was driven by important ideas. Bush II was different. He was unintellectual in the manner of someone who just doesn’t get it and who doesn't really have ideas. That’s not good. The party crossed a line in the third TV debate among Republican primary candidates for President in 2000. The candidates were asked what political philosopher influenced them most. Steve Forbes said John Locke. That is the best possible answer for a Republican. George Bush said Jesus. Hey, it got him elected but, friends, that is the road to perdition. I love Jesus but he is not a political philosopher. He was a religious leader. If you say Jesus is your favorite political philosopher it is because you do not know what political philosophy is. It is like saying Jesus is your favorite dentist. When we embraced someone because he could get votes, even though he was clearly an intellectual midget, we made a bargain with the Devil. We’re paying the price now.

Now Sarah Palin…don’t get me started. Count me out of the “Sarah Palin” wing of the Republican Party. That’s just cynical.

Being generally out of it
Hey candidates, how about this? Stop having your secretary print your emails. If you don’t know how to turn on a computer, you should not be part of the country’s leadership. Period. Because, yes, it is that important to our future. Sorry. If we put John McCain up again against a guy who seems with it and uses a blackberry, we’re toast. Computer illiterate people cannot get jobs in the private sector. How do you expect voters under 50 to respect them? They won’t.

Flag Waving
I get it. You like America. Me too. But all this excessive, almost defensive posturing around patriotic symbols is overdoing it and it makes us look like idiots or children or idiotic children maybe. Yes I understand that one of the fundamental differences between Democrats and Republicans has to do with pride in country, but you can overemphasize patriotic symbolism and if we do, we look like we’re trying to distract from substantive discussions with cheap theatrics and basing our party on a set of cultural codes instead of substantive perspectives on issues. That’s bad.

After the next few years, the party needs to appear substantial. So let’s not overdo the patriotic theatrics or any other symbolism.

Summary: The 6 perspectives that make you a Republican

The purpose of the last 6 posts was to explain the fundamental starting point of the Republican perspective and to lay the groundwork for specific policy discussions. It is helpful for Republicans to debate and agree on our fundamental perspectives as there has been a bit of confusion of late. I hope it might also be helpful for anyone wondering whether they are more naturally a Republican or Democrat.

The 6 fundamental perspectives that distinguish a Republican from a Democrat are these:
- Individualism
- Freedom
- Pragmatism
- Family
- Pride
- Optimism

I hope I have helped to show how critical these traits are for the future success of our great country.

What is a Republican VI: Optimism

Republicans basically believe we can have a bright future ahead of us so long as we do not get in its way. Technology will continue to transform our lives in positive ways. Success and opportunity will improve our cities. Entrepreneurialism and free trade will help us succeed globally.

Democrats have a tendency to be pessimistic and to believe that the world is going to end if the government does not step in. In the 70s, the Democrats were worried about global cooling and expected -- I am referring to Democratic leaders like Ted Kennedy, Tip O’Neil and Howard Metzenbaum here as well as thinkers like Paul Ehrlich -- that American cities were in permanent decline, Japan was going to take over the business world and we had to back down militarily in the face of the all powerful Soviet Union. These were all wrong and we should all learn from the fact that the Democratic Party made bad, overly pessimistic predictions for so long.

I cannot explain why these tendencies of mind exist but they are very real. I think it is best to have optimistic leaders who believe we can do well. If you don’t think you can do well, you can’t.

As a postlude, it's interesting to note that Republicans are happier than Democrats. See the Pew Survey data here. :)

What is a Republican V: Pride

Nobody’s perfect. But Americans have good reason to be proud of their country. Our nation provides a goodly, even a unique, portion of wealth, fairness and rule of law to its 300 million+ people, leads the world in business and technical innovation, and generously supports freedom, security and democracy around the world. Historically we have been a beacon of freedom and individual rights.

Yes we have sinned too. Slavery was bad, Jim Crow was bad, Native Americans have often been treated unfairly and Vietnam turned out to be a bad idea. We have made a lot of progress in the last century with respect to fairness to all races (and both genders). But to throw away the baby with the bathwater -- to believe that America is bad because of its shortcomings -- is foolish and demonstrates a complete lack of perspective on both history and contemporary comparative government.

Democrats do not agree. Let’s not quibble. You know and I know that every person you have met who has gone into a long and sanctimonious tirade about how awful America is has been a Liberal Democrat. Am I wrong? Every Spartacus Youth League, Howard Zinn-quoting oddball who continually disparages the United States is a Liberal Democrat. Everyone who gets uncomfortable with saluting the flag or with any show of patriotism is a hyper-sophisticated Liberal Democrat, and everyone who has burned an American flag has been a Liberal Democrat. Michelle Obama said it when her husband was nominated for President of the United States: “For the first time in my adult lifetime, I'm proud of my country.” This was not by any means an exceptional view, or a flub. It is the common perspective of the Democratic party.

It seems intellectually clever, like you’re the smart, wised up kid in class, to excoriate the United States. But it is ignorant and childish. Anyone who is being intellectually honest should agree that the United States is a force for good and that we have much to be proud of. It is easy for the Democrats to find a candidate who can claim to be patriotic and who perhaps even is patriotic. But we should bear in mind that when we elect a candidate they bring all of their cronies and fellow travelers with them to populate the bureaucracy and the courts. And when we populate our bureaucracy and courts with people who are fundamentally skeptical of the United States, its uniqueness and its quality, we take risks we should not be taking.

What is a Republican IV: Family

Preserving the opportunity for people to have a fairly traditional family life, if that’s what they want, is a high priority for Republicans. You should be able to have kids and send them to scouts and soccer and celebrate your holidays all living together with a fire in the hearth. People may not choose to do this -- of course -- but it should be possible, and if we make it more achievable we’ve made the world a better place.

While it would be unfair to say that Democrats oppose family life, of course, they have higher priorities. They do not get up in the morning focusing on how to make traditional family life easier to attain. Instead, they are typically caught up in an elaborate theory to save the world and in doing so (or typically, in not doing so) Democrats often promote programs that reduce incentives for married poor couples to stay together or generally make things harder for parents to live a traditional life and bring up their children in a safe environment.

The Democratic disconnect with traditional life is why the Democratic Party often fails among blue collar voters. Liberals are so out of touch with this issue that they are mystified when it loses them votes. They write puzzled books about it (e.g., What’s the Matter With Kansas). Maybe I shouldn’t be writing about it publicly?

What is a Republican III: Pragmatism vs. Idealism

“Man is not a thing -- not something to be used merely as a means: he must always in all his actions be regarded as an end in himself.” -- Immanuel Kant

Republicans are skeptics. They are often students of history, and have often learned hard lessons from history. Republicans believe in common sense. They are pragmatic. They mostly care about what works. If you are into Myers-Briggs personality types, Republicans are detail oriented S’s while Democrats are idea oriented N’s. Many engineers and business people -- and a lot of just down to Earth people! -- become Republicans.

There is nothing more attractive to Liberal Democrats on the other hand than an elaborate theory such as Marxism or Global Warming. Many intellectuals therefore become Liberal Democrats. Moreover, and I think this is related, Democrats will often embrace policies that “feel right” even if they don’t work. Having one’s “heart in the right place” is, in practice, a defense for anything in Democrat thinking. Often people who are very emotional but not very rigorous -- many celebrities are in this camp -- become Democrats. Democrats are heady, and often they’re emotional, but they are not as practical as Republicans.

Examples:
i. Democrats are inclined to create large-scale, complex solutions to problems. These solutions usually involve creating a large new government program and supporting agency. Republicans on the other hand want to solve problems incrementally, one improvement at a time, without overinvesting in a huge infrastructure. Democrats can spin up a vision for a large, complex governmental system in no time. It’s literally what they like to do. Lamar Alexander's recent article on healthcare captures this distinction perfectly.

ii. In foreign policy, Republicans want to be strong first, and then be nice. Democrats want to be nice to everyone and “make friends.” Historically, being strong gets better results than being nice. Carter tried making friends with Russia and it didn’t work. Obama has tried to befriend Russia and Iran and it hasn’t worked. He projected an image that was interpreted as weakness by Iran. This represents the triumph of an emotional approach instead of a time tested, practical approach.

iii. In evaluating thinkers and politicians, Democrats are very forgiving to people who make huge mistakes but whose hearts were in theory in the right place. Ted Kennedy and his Congressional colleagues Howard Metzenbaum and Tip O’Neill in the 70’s were horrible predictors of policies that would move America forward, throwing their lot in with an economic vision of American defeat and economic doom. Paul Ehrlich and the Club of Rome made absurd predictions in the late 60’s about the global economy. Economist Lester Thurow made useless predictions about Japan and the global economy in the 80s. All are lionized today and all are very securely part of the democratic pantheon.

iv. The pragmatism/idealism difference can perhaps be observed most starkly in the very different reactions of American thinkers to Marxism. Liberals love -- well, they loved -- Marxism. It is an elaborate, complex theory that has its heart in the right place. Does it work well? No. Does it deprive people of freedoms and impoverish nations? Well, yes, but its heart is in the right place and it has a certain intellectual appeal. That was for many years enough for many Democrats.

Skepticism is good. We should be skeptical about giving any individual too much power. We should be skeptical about trying to solve problems with huge, complex solutions rather than practical detailed improvements. We should be skeptical about elaborate new theories that do not seem to fit with common sense -- because the reality is that they come and go. Marxism didn’t work. Idealism is dangerous. Nazis were idealists. Stalin was an idealist. We should never turn away from a common sense, pragmatic style in devising policy. Republican skepticism, because it was skeptical about Marxism, saved America. It will save America again.

Monday, January 25, 2010

What is a Republican II: Freedom v. Risk Management

Milton Friedman said: “There are still intellectuals who believe that concentrated power is a force for good so long as it is in the hands of men of good will. I’m waiting for the day when we reject socialism, communism and all other varieties of collectivism; when [we] realize that a security blanket isn’t worth the surrender of our individual freedom.”

Forced to choose, Republicans make freedom their first priority. Forced to choose, Liberals make risk reduction their first priority. A Republican administration will not ignore risk reduction and a Democratic administration will not ignore freedom, but when the chips are down they will choose risk reduction every time. This should be a very easy way to understand whether you should naturally be a Democrat or Republican.

The freedom vs. risk management issue is closely related to the paternalism vs. individualism issue but it’s different. They do share a root cause, which is that Republicans look at society as a collection of individuals (or at most a collection of families) and think about policies in terms of how they impact the individual life whereas Democrats look at society as a single mass or as a collection of large groups -- races and classes or, more broadly, oppressed vs. oppressors. They abstract away the impact of policies on individuals and focus analyze the impact of societal change in terms of the mass, collective impact. If aggregate utility is increased by a given policy, Democrats will favor it even if it reduces freedoms for individuals.

The Republican view is better because we all live lives as individuals, not as some sort of collective mass, and because giving up freedom is a slippery slope. You can only give it up once.

Specific examples in life --

Taxes. Retaining and controlling the money you earn is an important freedom. It allows you to express your preferences in your life and determine your own fate.

Safety regulation. Republicans want you to do what you want unless it really imperils society. It’s your life and you are a grown up. Democrats want you to trust him or her with your decisions; they will make great decisions for the betterment of everyone. Would you like to have a wood burning fire in your home? Well that’s too bad. Would you like to smoke a cigarette in your home? Too bad. Would you occasionally like to be able to ride your motorcycle -- acknowledging that you are taking risks -- without your helmet? Well that is too bad.

Other regulation
. Another example involves regulations designed to control you for your own good. Have you ever had a politician determine that all new houses in a neighborhood have to have large front porches because they believe it will make everyone chat more? That person, I guarantee, was a Liberal Democrat. Does it matter if some people don’t want large front porches? Well, too bad for them.
When you embrace liberalism you trade your freedom for whatever security society can give you. You accept a child-like state. Republicans are not inclined to do so.
None of the founders would understand the degree of regulation we have today.

"They that can give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." -- Benjamin Franklin

"I would rather be exposed to the inconveniencies attending too much liberty than those attending too small a degree of it." --Thomas Jefferson

Sunday, January 24, 2010

What is a Republican I: Paternalism vs. Individualism

There are a number of polls one can find online that will place you on the political spectrum by asking you questions about various temporary issues, but fundamentally it comes down to a few major inclinations. One is Paternalism vs. Individualism.

Democrats are naturally inclined to solve everyone’s problems. Republicans want to create the conditions under which people can solve their own problems. You’ve heard it I’m sure -- “if you give a man a fish, you feed him for a day; if you teach a man to fish, you feed him for life.” The Democrats are fundamentally inclined to pass out fish. Republicans are inclined to teach people to fish. As it turns out, teaching people to fish works better.

On a closely related point, it has been the goal of Democrats for decades to make of America a new Europe. Republicans have wanted to make a greater America that is still uniquely American. There is a difference. Simply put, liberty and individual rights are central to the American way of thinking. They are part of the European way of thinking too, but anyone who has spent time in Europe can tell you that Europeans have become much more interested in reducing risk than in individual rights. In Europe, peevish and petty regulations frequently trample freedoms. In America, less so (but more so if we're not observant).

A classic American wants to be self-determining, sui generis, to find his or her own way and to pay his own way. To an American, the government is useful but is not there to guarantee success. The majority of French 18-25 year olds want to be fonctionnaires, which is French for “government bureaucrat.” That’s not something Americans can relate to. It’s not a detail. It is central to the American character. Jefferson articulated three inalienable rights in the Declaration of Independence, “life, liberty and the pursuit of happiness.” He did not include “happiness” itself as a right, but merely its pursuit. There is a major difference there. Perhaps Louis Armstrong captured the essence of what an American man wants in “Hello Brother”:

A man wants to work...for his pay
A man wants a place...in the sun
A man wants a gal proud to say
That she’ll become his lovin’ wife
He wants a chance to give his kids a better life
Well hello ah.... hello brother


Americans don’t want the government to give them a better life. They want to work and to be able to earn a better life, to claim it as their own. Americans want the wind to run through their hair as they ride their Harley down the open highway toward a great future of their own making. There is risk, but there is also opportunity. Americans and conservatives would not give up the risk if it meant giving up the opportunity, but Europeans have, and American liberals would. P.J. O’Rourke offends Europeans and delights Americans when he says “America wasn't founded so that we could all be better. America was founded so we could all be anything we damned well pleased.”

So there are differences between Americans and Europeans. These differences can predictably be observed in Europe-loving liberals and America-loving conservatives.

I will end with a quote from Alexis de Tocqueville: “Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”

Yes there is one :)

Let me just say up front -- Democrats aren’t all bad; Republicans aren’t all good (or all bad). I don’t think anyone participating in the political process does so primarily because they are evil or corrupt. I hope it’s not boring to be all moderate and reasonable about things, but that’s how I am. There are people who think their political opponents are evil. I think they are indulging in a little fantasy to make politics more fun (like people who put money on football or Tabasco on eggs). But as I see it, at a high level most people in the mainstream of American politics share similar goals. If it’s more fun for you to believe that everyone you oppose is evil, go ahead but that’s too bad for you and perhaps too bad for the country too.

That said, there are differences between Republicans and Democrats, and they wind up being important if we want to actually achieve things. I think I can show you that in many respects the Republican approach has been, and can in the future be, more effective than the Democratic approach.

I write as a Seattleite. Seattle has been for some time isolated from one of the most original strains of thought in American politics and has missed some opportunities because of it. Seattleites have been shut off from a healthy political debate and from ideas that could have helped Seattle. This lack of competition is partly why Seattle has wound up with such a mediocre set of politicians (yes Jim McDermott, I am talking about you).

I am not alone in thinking that Republicans have been the party of ideas for a while. Barack Obama said in 2008 that “Republicans were the party of ideas for a pretty long chunk of time there over the last ten, fifteen years, in the sense that they were challenging conventional wisdom.” That’s true. The Democratic Party had very few new ideas between the Great Society and, well, quite recently. The Republican Party has had a lot of new ideas that are in step with the world as it has been evolving.

As an aside, I don’t know how so many smart people stayed loyal to the Democratic Party from about 1978-1992 when it was fairly evident that they were defending a dead ideology and fighting the future (confirmed by their ultimate abandonment of 90% of everything they were advocating). Who knows what they were thinking? The genius of Bill Clinton was that he jettisoned many of the party planks that were past their prime. One thing you can say for Bill is that he knows a political loser when he sees one and he saved his party.

Republicanism in Seattle has to be different from Republicanism in certain other parts of the country. The kind of Republicanism that can work in Seattle is, fortunately, the kind of Republicanism that works for me, but I also believe it is the only kind of Republicanism that will remain relevant in the United States 20 years from now. It is focused on using the latest ideas to solve societal problems and while maintaining our economic strength, giving everyone opportunity, and preserving the environment.

Let’s see if we can find some common ground and some new ideas.