Is The Gary Johnson Campaign Libertarian Enough?

There have been a number of assaults from libertarians on the Gary Johnson campaign, alleging that it is behaving in an un-libertarian manner.  I think these people mean well, and they're clearly very principled individuals, but I don't think they see the full picture.  In this post I'm going to go through a few of the attacks on the Gary Johnson campaign by libertarians and try to show them that they should chill out.

Gary Johnson Accepts Public Funding
Many libertarians have found it ironic that a libertarian, that opposes public funding for most anything, would accept public funding for elections.  And they find it especially distasteful that he's sued the government for funds that it promised but has not delivered.  I, myself, don't think that public funding for elections would exist in a perfect world, but we go into the elections with the government we have not the government we wish we had (to paraphrase a certain Secretary of Defense).  The Republicans and Democrats get tens of millions from the government, I don't see why we shouldn't fight for the few hundred thousand that their formulas legally allow us to have.  I don't think unilateral disarmament is a good idea.  I don't see why we should be expected to walk into their backyard and play their rigged game with both hands tied behind our back.

And I don't even think that this is that bad.  The funds don't come from coercive taxation, they come from the $3 check off box that appears on individual income tax returns.  So I don't think the people complaining about this particular problem have a deep understanding of the situation or they wouldn't have anything to complain about in the first place.

But even if the money did come from coercive taxation, there's nothing wrong with a libertarian accepting public funding.  Let me cite the great libertarian Walter Block here, who argues that not only is it allowable for a libertarian to take money from the government, it is a positive virtue.  It's relieving the government of ill-gotten gains.  It's re-appropriation of stolen loot.  Ayn Rand (in her book Atlas Shrugged) has argued this point too.  And Murray Rothbard has as well.

We don't have to eschew use of the roads just because the government built them.  We don't have to avoid public schools and public parks.  It is not necessary for us all to become martyrs.

Gary Johnson Supports the Fair Tax
A lot of complaints that I see around all the time in libertarian circles are aimed the fact that Gary Johnson supports the "Fair Tax."  These people certainly mean well, but I think they're missing the point.  The point is that the Fair Tax would be an improvement over the current tax system, not that it would usher in utopia.

Milton Friedman said, and I completely agree, that it is necessary to have more than just a vision of the utopia:  we have to have positive proposals that bring us closer to utopia, proposals that get us from here to there.  The Fair Tax is one of those proposals.

The IRS infringes on personal liberty every day by spying on people's income to figure out their taxes.  And it puts people through hell trying to squeeze a few dollars out of them.  Getting rid of the IRS is a huge step for liberty all by itself even if taxes remained the same.  And the Fair Tax does that.

But even ignoring that point, some taxes are worse than others (more on that in a future post).  Some taxes are more harmful to growth than others.  The Fair Tax gets rid of the most harmful taxes, such as the corporate income tax and the capital gains tax.  This is a huge step.

Consumption taxes are the least bad taxes, so if we're going to have a tax (which really isn't up for debate in America today) a consumption tax is the way to go.  Once we get that, then we can argue for lowering the rate and eventually ending federal taxation.  And when people see what they're paying in taxes every time they go to the store, don't you think they'll be a little bit more open to lowering those taxes?  I do. 

I think we need to keep in mind that every revolution in history has, in some way, been a marginal revolution.  Small steps are important.  We should have a vision of the utopia, but we can't stop there.  We also need to focus on how to get from here to there.

Gary Johnson Brought An Anti-Trust Suit Against The Debate Commission
So, in case you didn't hear about this one, the Gary Johnson campaign brought an anti-trust lawsuit against the Commission on Presidential Debates (read it here).  Some libertarians think this is un-libertarian because libertarians oppose anti-trust regulation.

Personally, I think it's hilarious.  It's a perfect illustration of the absurdity of anti-trust.  A lot of libertarians who have read through the suit say it's ridiculous, but I don't think it's any more ridiculous than most anti-trust lawsuits.  It's almost to anti-trust what Bastiat's petition from the candle makers was to trade tariffs and quotas.

I want to see them defend this law while keeping Gary Johnson out of the debates (which is what we all know will happen anyway).  Why don't they have to play by their own ridiculous rules?  Again, why are we expected to walk into their backyard and play their rigged game with both hands tied behind our back?  If it brings up a discussion on the absurdity of anti-trust, then good.  And if it gets him in the debates, that would also be good.  Then maybe we'll win and then we can repeal the anti-trust laws.

Abortion

I promised in a previous post that I would address the issue of the abortion.  It's a tough issue for libertarians to deal with, and it is one that takes more than just libertarian theory to justify an opinion on. It turns out that somewhere between 30% and 40% of libertarians identify as pro-life, and somewhere between 60% and 70% of libertarians identify as pro-choice.  Here's what I think about it.

Where I Stand
I consider myself very pro-life but I also support an exception for rape and in the situation where the life of the mother is in danger.  This is my reasoning:

Imagine I invite you to come up with me in my airplane.  We reach 40,000 feet and we get in an argument.  I tell you to leave my plane.  You would, of course, protest: "You can't force me out of the airplane here!  It's not safe!  You brought me up here, into this dangerous situation, you have the obligation to do your best to bring me to safety!"  I think your outrage would be justified, and I believe the same analysis is applicable to abortion.  There is an obligation on the part of the mother and father (at least as far as he is able, without violating the rights of the mother), to do their best to bring the baby into the safe situation of birth.  It was by their voluntary actions that the baby is in a dangerous situation and therefore there is an implicit contract committing them to work, as much as they are reasonably able, towards a safe birth.

However, a situation where the mother's life is in danger presents a problem.  Someone must decide what the best course of action is based on the risk and potential consequences. Since the baby is not capable of making that assessment, the mother (hopefully with input from the father) is the only other logical choice. Sometimes life presents us with two bad choices and all we can do is try to decide on the one which is least bad.

In the case where the mother was raped she was not voluntarily involved in the act that produced the baby and therefore I don't think she should be forced to live with the consequences.  I would personally have great respect for a woman who chose to carry her rapists baby, but I do not believe the state should force her to.  However, if she did choose to abort I believe the rapist should be charged with manslaughter as well as rape.

The other exception that is widely accepted is in cases of incest.  I do not understand the argument for making an exception in these circumstances.  It seems to me like that exception was only made to protect a few members of the elite from embarrassment.  But if someone has a good case to make, based on personal property rights, I'm open to it.  I just don't see it right now.* 


Pro-Choice Libertarians
When does a a fetus acquire rights?  Some rights in our society, like the right to buy certain products, are reserved until the fetus has been born and reached age 18 or 21.  Some rights, such as the right to property and the right to free speech, are acquired much earlier.  How about the right to one's own body?  There is no objective way, that I can see, of determining the point at which a fetus acquires that right.  It's all a huge grey area.  Personally, my conscience tells me that we should err on the side of  not potentially killing millions of small, defenseless human beings.  But I have to acknowledge that if you are thoroughly convinced that a fetus is just a part of the pregnant woman, and has no rights of its own (much like your liver has no rights of its own), then libertarian theory says you should be pro-choice.  I respect the opinion of people who take a principled pro-choice position based on that, even though I disagree with them.

But there are also really bad reasons to be a pro-choice libertarian.

Some libertarians, like Jeff Miron in his otherwise excellent book "Libertarianism A to Z,"  make a utilitarian argument, saying that even if you think the fetus is a person, we might as well have legal abortions because abortions will happen anyway and they'll be more safe when they're legal.  It's basically the same as one of the many arguments you'll hear libertarians make against the war on drugs, just with a little different spin on it.  I think that is a hideous and ghastly way of thinking.  Based on that reasoning you could also say that rape should be legal so that it could be performed in a doctors office, where it's set up to be safe and not transfer any STDs or get anyone an unwanted pregnancy.  It might be safer for the rapist, but it's still a violent invasion of the rights of the victim, and that's why it's illegal.  That's the point of government, in the mind of a libertarian:  To protect individual rights.  In the case of legal abortion, it may be safer for the mother, but it's clearly a violent invasion of the rights of the child.  He's being killed!

 
There's also the argument that we need to keep population in check to save the environment, conserve resources, and save tax dollars.  You usually find arguments like this on the economically illiterate left, but occasionally you'll run across it in libertarian circles as well.  I don't buy it one bit.  I would argue that the world benefits much more from more children than it is harmed. The biggest scarcity that exists in the world is ideas. More people mean more ideas and more prosperity.  And kids don't just consume stuff. They'll eventually grow up and produce things, and they'll even pay taxes to cover the government services they use. Every dollar they eventually earn in a market economy means that they provided someone with something that they valued more than their dollar.

Ultimately, a society that sacrifices the future generation for good times in the present (whether that is through inflation, the national debt, or mass abortions) cannot be a growing and thriving society.  Whether or not you're pro-life, I think we should all realize that abortion is nothing to be celebrated.


*You could say, "Most cases of incest are rape." That's fine, but incest is not necessarily rape.  If there is a rapist, he should be charged and not let off the hook just to avoid family embarrassment.  This is a human life we're talking about, after all!  And if it is consensual then there is no logical reason I can see for an exception.

Leonard Read's "Anything That's Peaceful"

Leonard Read may have been one of the most important, yet largely unknown, figures in modern libertarian history.  After failing in business in Michigan, he moved to California and became involved with the local Chamber of Commerce.  He moved up the ranks of the US Chamber of Commerce, and was eventually promoted to director of the Los Angeles Chamber of Commerce.  He was a vocal opponent of FDR's New Deal.  In order to combat what he saw as a lack of understanding of economic principles among the public, which he saw as the cause of the growing move towards socialism, he founded the Foundation for Economic Education, or FEE.

Through FEE, Leonard Read became instrumental in connecting great libertarian, or classical liberal, thinkers and also instrumental in connecting common folks who were interested in these sorts of ideas with the material of these great thinkers.  And if that weren't enough, Leonard Read also wrote nearly 30 books in defense of free enterprise and limited government.  Probably his most famous was his essay "I, Pencil" in which he illustrates how the free market price system promotes cooperation, and how without it even the manufacture of such a trivial $0.10 pencil would be extraordinarily difficult if not impossible.  Milton Friedman famously borrowed the concept of this essay for his 1980 TV series "Free to Choose."

After reading this famous essay, and watching a very inspiring youtube video on how to best advance liberty (more on that in a future blog), I decided the next book I read should be one by Leonard Read.  I chose "Anything That's Peaceful," which he authored in 1964, because it happens to be the only one in print by the Mises Institute at the moment (although they have the pdf's of many more). 

Read begins this book by briefly deriving and expressing what he supposes to be the purpose of life:  To continue evolving one's knowledge and consciousness in order to become more like the "infinite consciousness" (God).  I don't often read books in search of the meaning of life, and I certainly didn't expect to find it expressed in a book about political philosophy, but I'm glad Read included it.  I think it says a lot about Read, as well as the libertarian movement.  Supporters of the free market are often derided as "greedy" and "materialistic" by proponents of the various socialist ideologies.  But I think the reality is much different.  It is the Marxists and socialists who look only at what is material and measurable.  Supporters of the free market, from Adam Smith to Charles Murray, try to understand and treat the "whole man" (as Barry Goldwater called it in his book "Conscience of a Conservative"), including not just his material circumstances and his animal instincts, but also his creative and spiritual aspects as well.

Moving on from his ambitious premise, Read moves uses the next few chapters to explain the folly of socialism.  He first explains that, behind the curtain of rational and scientific planners and benevolent overlords, it is only violence that holds up the socialist state.  It is men with guns commanding others, without guns, to do as they are told upon pain of death.  He demonstrates how even the most trivial law, backed up nominally by the most trivial fine, will ultimately lead to a man with a gun coming to your house to shoot you if you absolutely refuse to recognize the law.  He gives a couple of humorous, but tragic, real world examples to back up his demonstration.  And Read goes on to further demonstrate that socialism does not allow for creative solutions to human wants, harms the individual by removing his sense of self-responsibility (what Read argues is "the very essence of his being"), and does not produce products and labor which are the most valuable to the consumer because transactions take place only under duress.

The thesis of this book is that any peaceful activity should be allowed to take place, and only violent or fraudulent activity should be punished by government.  It is a total rejection of the "mixed economy" we have today (and really have had, in some form or another, back even to our founding).  In order to prove his thesis, Read spends the final five chapters of the book taking on two of the largest socialist enterprises in our mixed economy:  the post office and public education.

I really enjoy reading books by libertarians from this period of history.  I'm not sure what it is about them.  It might be the style and voice (they had a slightly different vocabulary, and a common literary reference point that, thankfully or unfortunately, we don't really have today).  It might also be the fact that they were being ideologically besieged from all sides; the fact that they were losing their grasp on liberty with alarming speed, and they were losing the arguments in the mind of the public.  The New Deal and the Great Society were the great socialist enterprises which came into being in the US around this time, but overseas as well you saw the rise of National Socialism and Communism. Even in largely capitalist countries you had governments moving in to nationalize this industry or that industry, to forcibly unionize people, and so on.  That had to have had an effect on the writers from this era. 

Today, fortunately, it is very rare to find someone who actually thinks that a state-run society can produce more or better products than a competitive capitalist market.  We still have to deal with those who wish to do good with other people's forcibly taken money, but only a few nuts suggest that the oil industry, for example, should be nationalized.  Or the car industry. Or most other industries.  The thought today is largely that there are a few exceptional industries (such as education, transportation, first class mail delivery, and a few others such as healthcare) that may be better run by the government, and many more that need to be "regulated," but wholesale socialism is largely rejected.

As a Christian and a minarchist, Leonard Read comes at libertarianism from a very similar place as I do.  I've downloaded a few more of his books, and I look forward to reading them.

Energy Independence Is Economic Suicide

Every single American politician seems to promise energy independence.  When they don't deliver (as they inevitably won't), they get knocked for not following through on their promise.  I, for one, am very glad that they don't proceed down that path.  It's certainly possible to free ourselves from foreign oil, but it would be extremely expensive, not free. It wouldn't even be intelligent.  In fact, given current market conditions, it would be economic suicide. It would be Smoot-Hawley times 100.

What am I talking about?  Let's have a little thought experiment.

Imagine that we had a machine that could, with very little energy, transform 14 bushels of corn grown in Iowa into 1 barrel of oil. Since America is very good at producing corn but not currently all that good at producing oil, we would regard this as a fantastic invention! Well what if I told you we already have this invention, but it isn't a technological one, it's an economic one. One that the great economist Milton Friedman talked about frequently:  free trade.

We send Saudi Arabia, Venezuela, and Canada our corn and they send us back barrels of oil.

Do we really want to break this marvelous invention, which transforms things we don't need but are very good at producing into things we do need and are very bad at producing, just so that we can claim to be "self-sufficient?" We could certainly survive, but our standard of living would go down dramatically because many of our workers, and much of our capital, would have to be diverted from efficiently producing corn (and other things we are good at making) into inefficiently producing energy.

Take this whole problem down a few levels, down to the family level.  Nearly every family in the United States relies on trade with other families in order to meet their basic needs.  In the old days this may not have been quite as true.  My Grandmother, for instance, lived in a sod hovel in Montana for part of her life.  Her family built that hovel.  Her family grew most of the food they ate, they drew their own water out of a well, and they made most of the clothes that they wore.

They were very self-sufficient, and many would consider that a good thing.  But in reality that family was very good at doing some things and very bad at doing others.  Perhaps the father of that family was very good at farming but only an OK carpenter.  Perhaps the mother of that family was very good at washing clothes but only a passable seamstress.  Judging by the fact that they lived in a sod hovel, it is unlikely anyone in that family was a very good home builder.  The reality is that even that family would be better off if they could produce lots of what they were good at producing, in this case probably crops, and trade for things that they were not so good at producing.  And, indeed, they must have traded for some things because it would be impossible for my great-grandfather to, for example, construct all of his own tools:  to mine the ore out of the ground, refine it, and hammer it into shovels, plows, and hoes all by himself.

A family is better off spending most of their time doing the things it does well, and trading for the things that it does not do well.  Today most families take that to an extreme.  Some might have a member who is a very good secretary but no one who is very good at making shoes, so they trade their time as a secretary for shoes.  Some may have a member who is a very good plumber but no one who is a very good dentist, so they trade their time plumbing for the dentist’s time fixing teeth.  Nearly all of us trade some specialized skill for even the basic necessities of life.  Our food.  Our house.  Our utilities.  This strategy, what economists call “specialization,” has lead to an enormous increase in living standards as each person shifts into his or her most productive activity.

The same principle applies to a nation.  We cannot be good at everything, and even if we were we would want to spend our time doing only the things we do best and trading for the other things we want.  At one point we were the best country in the world at producing oil.  But over the years we have exhausted the oil which was very easy to get in Texas and West Virginia.  Today most of the easiest oil to collect is in other countries.   We should do what we’re best at and allow those other countries to do what they're best at.  This would bring prosperity to every country as each is allowed to shift into their most productive activities.

It is often said that we need to become energy independent so that we won't have to fight all of these wars for oil.  I don't accept that argument in the slightest.  If we're fighting these wars over oil, we're shooting ourselves in the foot.  It would be far more ethical, by all moral traditions of the world that I am aware of, to spend an extra trillion dollars on oil in a decade than to spend an extra trillion dollars occupying a country for a decade.  But I don't even think I have to rely on moral arguments to make this case, because these wars have not driven the cost of oil down, they've driven it up.  Wars, it has been famously said, do only two things:  Kill people, and break things.  In this case we've broken the oil infrastructure of Iraq making their oil more expensive.  Additionally, we've crippled the finance sector of Iran,  one of the worlds most oil rich countries, with all of our sanctions and made it much more expensive for them to upgrade their oil infrastructure and bring oil prices down.

Ultimately, these oil-rich countries will charge as much as the market will bear for their oil, and we'll charge as much as the market will bear for our products.  There's nothing wrong with that.  It's just the free market in action.  You can protest, and whine about the OPEC cartel, but OPEC has been just about as effective as any other cartel which hasn't been enforced by the threat of violence (which is to say, not very effective).

In my opinion we would all be better served if our government brought the troops home, stopped meddling in the internal politics of the Arab states, and cultivated a strong trading relationship with whatever government those people end up with. I suppose you could write me off as an “isolationist” but it seems to me that those who would advocate shutting off our country to trade in certain products or advocate large taxes, tariffs, or subsidies in the name of “self-sufficiency” or “energy independence” are the ones who are truly “isolationist.”

Gary Johnson's "Seven Principles of Good Government"

Over a year ago, I think, I donated $100 to Libertarian party presidential candidate Gary Johnson's "Our America Initiative" for the promise of receiving a copy of his forthcoming book when it was published.  It was slated to be released in the summer of 2011.  I was beginning to feel like I would never see it when a small, nondescript package arrived at my door a couple weeks ago bearing the Our America Initiative logo.  I opened it up and found not just a copy of Gary Johnson's book, but a signed copy of his book.  Yay!

The book itself is very short, 152 small pages with large type and dozens of pictures.  The first six chapters explain Johnson's life story, and the final seven are each short essays on one of his principles of good government.  The book is filled with anecdotes from his time in business, government, and competing as an athlete.  If you've ever listened to one of Gary's speeches, or heard any extended interviews with him, you've probably heard at least a few of them already.  (Very few were new to me, but I devour pretty much all the news on him and his campaign that's out there.)

Gary Johnson was the governor of New Mexico for 8 years.  He ran a self-funded campaign as a complete outsider to politics, only having introduced himself to the Republican party a few weeks before entering the race for governor.  He ended up winning the very close primary, and then went on to win the general election to become New Mexico's 29th governor.

During his time in office, Governor Johnson was wildly successful at keeping the state's budget under control, and at keeping state bureaucrats out of the way of the private sector.  He vetoed 750 bills during his time in office (more than all the other governors in the country combined during that time) and ended up leaving New Mexico with a budget surplus.  During his time in office the state's public sector workforce shrank by about 1,200 jobs, while the private sector workforce grew by more than 20,000 jobs.  He cut taxes 14 times and never allowed a single tax to be increased during his 8 years as governor.  

Prior to his time as governor, Johnson was a construction entrepreneur who started a one-man handyman business and grew it into one of the largest construction firms in his state.  He gives several anecdotes in his book about how hard work paid off for him, how just showing up on time and doing what you're asked to do (or maybe a little bit more than what you're asked to do) was the key to his success in business.

These are Gary Johnson's seven principles of good government, which the last half of his book explains:

• become reality based
• always be honest and tell the truth
• always do what is right and fair
• determine a goal and set a plan for reaching it
• make sure everyone who should know your goal, does
• acknowledge mistakes immediately
• love what you're doing; if you don't, find something else to do

In my opinion, these aren't just principles for good government, they're principles for a good and productive life.

The principle that I think had the biggest impact on me, as Gary explained it, was his principle of always being honest and telling the truth.  He explains how he was not always honest with his wife, Dee, when he was governor (and even before that).  Not that he kept huge secrets from her, but he told her "white lies" sometimes because it was easier than telling the truth.  Eventually he and his wife had grown far apart because he had not been totally honest and because the "white lies" compounded.  They ended up getting a divorce, and not long after that his now ex-wife died suddenly from hypertensive cardiovascular disease.  He still says he's guilt-ridden because of his actions that, in part, led to the divorce.  It's a great warning for all of us who might think that telling a little "white lie" today might be easier than telling the truth.  In the end, it probably won't be.

Overall, I found this book to be a good, quick read.  It clearly doesn't have the meat of books written by previous libertarian presidential (and vice-presidential) candidates, probably because Gary Johnson is not a philosophical and rhetorical heavyweight, but it's packed with the life experiences of someone who has been to the promised land and fought hard to implement libertarian ideas.  In the unlikely event that Gary Johnson actually makes it into the White House, I think it would be like the second (third?) coming of Grover Cleveland: An honest, incorruptible President who believes firmly in the rights of the individual.

Drug Testing Welfare Applicants

The other day I got involved in a little bit of a discussion on facebook on the issue of drug testing welfare applicants.  I tried, as always, to be respectful of everyone involved but the friend of mine who originally started the thread ended up un-friending me (which is too bad, but I didn't really know him anyway, and I didn't ever ask to be his friend in the first place, he was just some random guy from high school who had decided to send me a friend request) so my input got cut short.  I figured I might as well follow up on this blog.  Here's how the exchange went:

The Cost-Benefit Case
As you can see, the reason I don't think drug testing welfare applicants is a good idea is because it's a waste of money.  Florida pioneered this strategy and ended up losing $45,780 (not including attorneys fees, court fees and the thousands of hours of staff time it took to implement this policy).  On top of that, there is a strong suspicion at Gov. Rick Scott just pushed this measure because he has ties to the drug testing company "Solantic."  So, really, this whole thing reeks of corruption and graft.  Sure, it sounds plausible.  Who would defend giving money to drug addicts?  But the fact is it cost an extra $118,140 over and above what Floridians were paying for welfare already, drug addicts and all, to screen the applicant pool and knock the cost down by $72,360.  Clearly the cost exceeds the benefit, and from a consequentialist standpoint the policy should be rejected.

The Constitutional Case
The ACLU has argued that drug testing welfare applicants is unconstitutional because it violates the 4th Amendment to the Constitution, which prohibits unreasonable searches.  As I stated in the facebook thread, I don't buy that line of argument.  The 4th Amendment's protection against unreasonable searches, as I see it, applies to situations where a citizen is just minding his own business and the government decides to come in and search him or his property without cause.  In this case, it seems to me that the citizen is going to the government to apply for welfare, and the government is just making sure the applicant passes the criteria it has set up for the program.

I am willing to admit it's a bit of a gray area, and I'm not comfortable making that constitutional case too forcefully.  For example, based on my line of reasoning you could say, "Kyle, when you use government roads voluntarily, does that mean the government has a right to search your car as a condition of driving on them?"  I would be very uncomfortable answering yes to that question.  I think that a program could be setup that would search every car on the road and be constitutional, but the government would need to have checkpoints at every driveway, or the exit of every neighborhood, or the entrance of every freeway, so that there was no "reasonable expectation of privacy" (the legal test established in Katz v. United States to determine whether an unwarranted search is constitutional or not) when driving on government roads.  I think a program that actually passed that constitutional test would cost trillions in enforcement costs and lost productivity for absolutely no benefit whatsoever, but it would be constitutional.

Rather than comparing drug testing of welfare applicants to random searches on the highway, I would compare it to admissions at a public university.  To be admitted to a public university you need to meet certain requirements:  GPA, SAT scores, and perhaps extracurricular activities.  You provide this information when you apply for government colleges, just as you would for private colleges, so that the government can screen the applicant pool.  That's more what I see going on here.

Of course, just because something is constitutional doesn't mean it's a good idea.  Just look at the post office, which is specifically authorized in Article 1 Section 8 of the Constitution.

Should The Applicants Pay?
In Joe's parting shot, he said that he thought the applicants should pay for the drug tests instead of the government.  That's a fair enough sentiment, I suppose, but it wouldn't make a lot of difference.  It's just an accounting gimmick that doesn't change how resources are actually used.  If applicants end up passing the drug test and getting welfare, as 98% of them will, they will end up recouping their losses from the welfare benefits.  So really what you're doing when you make the applicants pay for drug testing is reducing welfare benefits. 

You might think I'd be in favor of reducing welfare benefits.  Well, I am, but this isn't reducing welfare benefits, it's just shifting the welfare benefits around.  What do I mean?  You do cut benefits to the welfare beneficiaries, but the money saved is now going to drug testing companies for make-work jobs that we've already determined are useless.  It's now just corporate welfare instead of social welfare.

In the final analysis, if welfare applicants don't have to pay for the drug tests it's just a pointless increase in government spending.  If welfare applicants are made to pay for the drug tests social welfare spending is transformed into corporate welfare for some lucky drug testing companies.  It makes no difference.  It's a shell game.

Senator Mike Crapo (R-ID) and the US Sugar Program

In the interest of keeping tabs on one of the senators representing my neck of the woods, I am one of the 187 people who subscribe to the youtube channel of Senator Mike Crapo (R-ID).  In general, he's a pretty free market type.  He's consistently rated as one of the more conservative (although not anywhere near the most conservative) US Senators, and he is easily the most conservative US Senator from "Cascadia" (loosely defined as WA, OR, ID, and BC Canada).  He's a frequent guest on CNBC and the other financial networks since he holds a lot of sway in some very important financial committees.

I usually wish he'd go much further than he does, but I generally like what I hear from him when it comes to the budget and the economy.  So imagine my surprise on Wednesday afternoon when I checked my youtube subscriptions and found this atrocity waiting for me:

Senator Crapo has never been someone I would describe as one of my "political heroes," but I was reasonably confident I could at least trust him to have a rudimentary grasp of economics and tow the free market line at least when it came to Washington DC's most egregious debacles.  Apparently I was wrong.

So what, you ask, is the US Sugar Program, and why is Senator Crapo's support of it so disappointing?

The US Sugar Program was one of the programs started by FDR during the Great Depression to elevate the price of sugar.  The theory then was that farm prices were collapsing, and elevating them above the market price would "fix" the economy.  Of course that didn't work (for reasons you can discover for yourself in Henry Hazlitt's classic book "Economics in One Lesson" if you don't understand them already), and most of the programs eventually expired.  For example, we somehow realized that slaughtering pigs as a "cure" for low pork prices was utterly counterproductive.  But the US Sugar Program has remained a fixture.

The program works to inflate US sugar prices by restricting imports of sugar and setting a floor under sugar prices by buying surplus sugar production.  According to the Heritage Foundation US sugar prices have been elevated by 49% over the world price, as of May 2012, because of the restrictions on imports.  These elevated prices are undoubtedly good for sugar producers, but what about the food processing industries that use sugar?  Not so much.  In fact, it's the main reason that the US candy industry has been on the decline.  Economist Dan Griswold, of the Cato Institute, has documented in his book "Mad About Trade" that candy companies like Hershey's, Brachs and Kraft have closed dozens of candy manufacturing plants in the US over the past decade or two and moved production to countries like Canada and Mexico because the sugar price in those countries is much closer to the world price.  So, in essence, Senators like the "Honorable" Mr. Crapo have decided that the US would rather have jobs producing and stockpiling sugar nobody wants (12 pounds of surplus sugar per American each year according to Mr. Crapo himself!) than high wage jobs manufacturing candy products that the market is actually demanding.  And he has been willing to take your money and pay more than $2 billion over the past 10 years just to warehouse all of this excess sugar.

Incidentally, the US should probably not even be producing sugar at all.  Brazil can produce a pound of sugar for roughly 1/3 the price it costs US farmers to produce it.  So it's no wonder sugar producers pay for more than 34% of US farm lobbying, and 54% of it's Political Action Committee donations, despite producing less than 2% of the value of  all US crops.  I think every American should be outraged that these people are ripping you off and Senator Crapo is helping them do it.  Morally it's as if the US sugar producers paid Mr. Crapo to kidnap and beat up sugar consumers that refused to pay the elevated prices or bought from foreign sellers.  The only difference is that we call him an "Honorable" Senator instead of a gangster, and he uses the police instead of mob soldiers.

But what really irritates me is not that he's complicit in ripping us off, but that he's using completely backwards economic reasoning to do it.  It wouldn't be so bad if Mr. Crapo were on a committee overseeing some tiny corner of the economy or focusing on foreign policy or something like that, but this guy is on the committees overseeing banking and the financial sector.  He's even the ranking member on the "Subcommittee on Securities, Insurance, and Investment!"  It is unbelievable that a person in his position would tell us with a straight face that price floors theoretically create shortages, and act like it's a great vindication of this particular price floor that it has instead created a massive surplus (just as Econ 101 predicts it should).

One last unintended consequence of this boneheaded policy (combined with the ridiculous US corn subsidies), that the Libertarian Party presidential nominee Gov. Gary Johnson sometimes talks about, is that US food processing companies end up putting high-fructose corn syrup into their products instead of using sugar.  Now I'm not an expert on the health ramifications of this, but apparently that's not the greatest thing for Americans' health.  Some have argued it's a major contributor to obesity in the US.

So basically, this policy is leaving Americans fat, broke, and unemployed.  We've known how bad these policies are at least since the days of Fredrick Bastiat and Adam Smith, and yet they still continue to pop up and even thrive because of the support of economically illiterate politicians like Mr. Crapo.  Here's to hoping American/Cascadian politicians eventually come to their senses.  I won't hold my breath in anticipation.