"Coming next: The Clinton Center for Honesty and the Paris Hilton Center for Modesty."

Leave it to David Boaz on Cato:

"Bush’s Chutzpah Institute

Posted by David Boaz

The president who launched our longest war, arrogated more power to the executive than ever before, increased federal spending by a trillion dollars, pushed for the biggest expansion of entitlements since Lyndon Johnson, further nationalized education, tried to nationalize marriage, and held Americans in jail without access to a lawyer or a judge has found a theme for his presidential library: freedom.

The George W. Bush Presidential Center will include a “Freedom Institute” focused on a broad portfolio of topics, including the expansion of democracy abroad and education reforms of the kind Bush implemented during his presidency, according to organizers.

Coming next: The Clinton Center for Honesty and the Paris Hilton Center for Modesty."

I cannot improve on that riposte.

"He would be quite safe, she said, if he went “heavily disguised as a human being.”

David Boaz on Helen Suzman on Cato:

"Helen Suzman, R.I.P.

Posted by David Boaz

Helen Suzman, the longtime leader of the parliamentary opposition to apartheid, has died at 91. The Times of London writes:

Helen Suzman had a special place in South African history, being generally recognised as the most effective parliamentary fighter against apartheid policies.

For 13 years - from 1961 to 1974 - she was the sole representative in Parliament of the liberal Progressive Party, forerunner of the Democratic Party.

In South Africa they knew the difference between liberals and leftists. Plenty of leftists and communists opposed the National Party and its apartheid system. But so did liberals like Suzman, people committed to human rights, freedom of thought, and a market economy. She did not forget her liberalism when apartheid finally fell and the African National Congress came to power. She continued to speak out against repressive policies and the Thabo Mbeki government’s continuing support for Robert Mugabe.

I loved reading about her quick wit in parliamentary debates. She sent the minister of law and order a postcard from the Soviet Union, saying, “You would like it here. Lots of law and order.” Once she told a government minister to go into the black townships and see their appalling conditions for himself. He would be quite safe, she said, if he went “heavily disguised as a human being.”( WELL PLAYED ) In a famous exchange a certain minister shouted: “You put these questions just to embarrass South Africa overseas.” To which she coolly replied: “It is not my questions that embarrass South Africa – it is your answers.”( NICE ) When an Afrikaner in Parliament sneered at her Jewish roots and asked what her ancestors were doing when his were bringing the Bible to the “savages,” she snapped, ”They were writing the Bible.”( HEAR HEAR )

In 1989 Helen Suzman was a Distinguished Lecturer at the Cato Institute. See a picture on page 55 of this very large pdf of our 25-Year Annual Report. Her remarks were reprinted in Cato Policy Report and then in Toward Liberty, our compilation of essays from our first 25 years, and can be read here.

On the first day of the new year, the world has lost one of its great champions of freedom. May she inspire many more."

"So take it away, Tom and Arlo: I’m Changing My Name to Bank Holding Company."

David Boaz with an amusing post. It's good to see that he hasn't imploded from this increase in Government and paeans to Government Involvement in the economy. Of course, he must have known that the Investor Class didn't really buy into the Free Market:

"I’m Changing My Name to Bank Holding Company

Posted by David Boaz

It was a Merry Christmas for GMAC, which learned on Christmas Eve that the Federal Reserve had approved its application to become a bank holding company. That gives GMAC “access to new sources of funding, including a potential infusion of taxpayer dollars from the Treasury Department and loans from the Fed itself,” as the Washington Post explains. Of course, that’s on top of the $13 billion that General Motors itself has been granted as a short-term bailout until a bigger bailout can be arranged.

GMAC isn’t the only company that has suddenly become a “bank holding company” in order to cash in on the $700 billion financial bailout. Late one night in November, American Express was granted the same privilege. Not to mention Morgan Stanley, Goldman Sachs, CIT…

Maybe it’s time for a new version of Tom Paxton’s classic song “I’m Changing My Name to Chrysler,” sung here by Arlo Guthrie: “When they hand a million grand out, I’ll be standing with my hand out.” Of course, there’s already been a new version, “I’m Changing My Name to Fannie Mae,” sung here by Arlo and here by Paxton. Besides the name of the company, they had to make a few other changes in the lyrics, like “When they hand a trillion grand out, I’ll be standing with my hand out.”

Now, an update:

"You can say that rent-seeking is an unfortunately inevitable by-product of having the government do good"

Here's an excellent post by David Boaz on Will's post:

"Rent-seeking, economists call it–using the government to get privileges, such as a grant, a subsidy, a tariff, or a restriction on one’s competition. It’s one of those things we free-marketers rail against all the time, in papers on free trade, corporate welfare, government spending, and virtually every other activity of the modern state. More broadly, we point out, as Will did, that it’s impossible to have nonpolitical allocation of trillions of dollars of taxpayers’ money handed out by government. If you don’t want the powerful to lobby and manipulate in order to get their share of the money, then leave it in the marketplace. If you put it in the hands of politicians, expect political allocation."

I agree with this. My disagreement with David would probably be that I believe it to be inevitable that we will have some of this, as long as people pay taxes, and there is any government at all. That's what I call Political Economy and Politics.

"And it’s not just corporate welfare. All the elements of the liberal interventionist state are both product and generator of rent-seeking. You can say that rent-seeking is an unfortunately inevitable by-product of having the government do good. But to want a $3 trillion federal government with vast regulatory powers that isn’t awash in rent-seeking is, as Milton Friedman wrote, like saying “I would like to have a cat, provided it barked.” Cats meow, and government money flows to those with political power."

Here I agree with David as well. I want a government that is much smaller, although I am not an anarchist or believer in just a military, or some such fantasy. But I think that there needs to be a road map to getting to this smaller state, based on Politics and Political Economy. In other words, a map of the U.S., not Middle Earth, however much we, okay, I, would like to live in The Shire. That's my disagreement. It's practical, not theoretical.

More On Arbitrary, Inefficient, And Creative Destruction

I want to return to Krauthammer's post which David Boaz references, because I feel that I can make a clearer point about it:

"First, the arbitrariness. Where do you stop? Once you’ve gone beyond the financial sector, every struggling industry will make a claim on the federal treasury. What are the grounds for saying yes or no?

The criteria will inevitably be arbitrary and political. The money will flow preferentially to industries with lines to Capitol Hill and the White House. To the companies heavily concentrated in the districts of committee chairmen. To clout. Is this not precisely the kind of lobby-driven policymaking that Obama ran against?"

See, what makes him think that time began with the financial sector? It never occurs to him that anything preceded TARP, say. So that, TARP itself appears arbitrary, stupid, and based on cronyism, as I've listed these qualities myself. So, the first question is: Was TARP itself arbitrary? Was it created ex nihilo? Does the word bara figure into its wording? Or is it on a continuum of government actions, and needs to be analyzed as such? It isn't enough to declare, "Let's begin with TARP".

Now, one way to create at least the semblance of a principle out of TARP is to say something like the following: We declare that we will intervene when the financial sector is in trouble, because it's more important than any other sector. Fine. What's the financial sector? How does it work? And you can't mean by it something as vague as that it's banks, loans, etc. How about just giving me your explanation of how Lehman failed, and why the markets reacted as they did. I'm not asking you to blind me with science or be Willem Buiter, but you have to show me at least that you've some real idea of why TARP was necessary and how it was supposed to work. Otherwise, you're not really in a position to judge if it's more important than the automotive industry or not.

My disagreement with Krauthammer is not about the importance of principles and reasons in these decisions to intervene, I simply believe that TARP itself was abitrary, stupid, and reeked of cronyism, or, at the very least, since I'm in the finacial sector, I damn well know how important it is. There's nothing wrong with his worries, only about his analysis of the current crisis.

Consider this post:

"Sunday, October 19, 2008

"It's all very Rube Goldberg-esque,"

A great post by Peter Whoriskey and Zachary A. Goldfarb in the Washington Post called "Financial Rescues Can Set Off New Problems":

"Every action the government takes has cascading effects on the market, and they're not always easy to predict," said Jim Vogel, an analyst at FTN Financial. "The government has to have time to catch up."

Follow the bouncing ball of unintended consequences.

"Further into the future, some economists predict even more profound consequences from today's interventions.

By fostering the belief the government will rush to the rescue whenever a major financial institution begins to falter, federal officials may be creating what many economists call a "moral hazard." That is, those institutions may be more willing to undertake risky investments.

"It's all very Rube Goldberg-esque," said William O'Donnell, the head of U.S. interest rate strategy at UBS, referring to the cartoonist famed for devices that work in indirect and convoluted means. "You're never quite sure what any one action will do."

Really. Who'd of thought it?"

The real question is the following: Given how TARP has been planned, marketed, and implemented, can one make a case for intervening in the automobile industry based on this precedent? I say that there is. I'm not saying that it's conclusive. There are good reasons to oppose it, but the case is far enough along that it needs to be argued out, and there is a viable argument for such intervention. It is not as Krauthammer and Boaz have argued. They haven't risen above the level of worries and nostrums to approach anything amounting to analyis. For example, at least compare this case to other similar government loans.

Okay, here's his second point:

"Second is the sheer inefficiency. Saving Detroit means saving it from bankruptcy. As we have seen with the airlines, bankruptcy can allow operations to continue while helping to shed fatally unsupportable obligations. For Detroit, this means release from ruinous wage deals with their astronomical benefits (the hourly cost of a Big Three worker: $73; of an American worker for Toyota: $48), massive pension obligations and unworkable work rules such as "job banks," a euphemism for paying vast numbers of employees not to work.

The point of the Democratic bailout is to protect the unions by preventing this kind of restructuring. Which will guarantee the continued failure of these companies, but now they will burn tens of billions of taxpayer dollars. It's the ultimate in lemon socialism."

Okay. Here it is clear that some businesses do survive bankruptcy. So, he seems to be claiming that the government intervention will keep the employees from the onerous terms of bankruptcy. This is a factual question. It isn't a question of principle. I have demands that I would include in any government intervention. Absent them, I would agree, they'll have to declare bankruptcy. But that's an argument about the conditions of the bailout, not whether one would favor a bailout or not. So, Krauthammer could be correct, but it's not obviously so.

"Democrats are suggesting, however, an even more ambitious reason to nationalize. Once the government owns Detroit, it can remake it. The euphemism here is "retool" Detroit to make cars for the coming green economy.

Liberals have always wanted the auto companies to produce the kind of cars they insist everyone should drive: small, light, green and cute. Now they will have the power to do it.

In World War II, government had the auto companies turning out tanks. Now they would be made to turn out hybrids. The difference is that, in the middle of a world war, tanks have a buyer. Will hybrids? One of the reasons Detroit is in such difficulty is that consumers have been resisting the smaller, less powerful, less safe cars forced on the industry by fuel-efficiency mandates. Now Detroit would be forced to make even more of them."

Now, I have no idea about this, and neither does he. For all I know, such a plan might work. To argue that it's not possible is beyond his knowledge. Time will tell, but it doesn't seem obviously unworkable, compared, say, to what auto makers have been doing up until the present. An idea stands or falls on its own. To argue otherwise, is poisoning the well, and fallacious. You can't simply say that it some people in congress favor it it's hopeless. Well, you can, but it's fallacious.

"Republican minimalism -- saving the credit-issuing utilities -- certainly risks not doing enough. But the Democratic drift toward massive industrial policy threatens to grow into the guaranteed inefficiencies of command-economy maximalism."

Slippery Slope Arguments are fallacious, as are Historically Inevitable Arguments, otherwise Marx would have actually been a scientist of history, but he wasn't, because there's no such beast.

Finally, one point about Brooks and Creative Destruction. This phrase has as much explanatory power as Effective Regulation. It's what we're looking for. Destruction might or might not turn out to be creative in a particular instance, and that is what actually occurs in the world. By and large, the ebb and flow of businesses does seem to work, but that platutude does excuse one from actually analyzing the case before you.

Some fires are indeed creative destruction, necessary for the proper maintenance of the natural world. Sadly, some are not. To walk to a fire, any fire, and proclaim aloud Creative Destruction, is pretty silly. So is claiming that same nostrum about the death of any particular business. Busineese do not all fail for the same simplistic reasons.

"First, the arbitrariness. Where do you stop?": In Politics, It Would Be Where You Agree To Stop

Here's an earlier post defending a bailout:

Sometimes posts are unintentionally humorous, especially when they're way behind the curve, or, have a view of human agency, and the politics based upon it, that is laughably theoretical. Here's an example from David Boaz on Cato:

"There have been plenty of criticisms here of neoconservatism and “national greatness conservatism,” but two of the occasional targets, Charles Krauthammer and David Brooks, have just published devastating critiques of the auto industry bailout. Here’s Krauthammer in the Washington Post:

First, the arbitrariness. Where do you stop? Once you’ve gone beyond the financial sector, every struggling industry will make a claim on the federal treasury. What are the grounds for saying yes or no?

The criteria will inevitably be arbitrary and political. The money will flow preferentially to industries with lines to Capitol Hill and the White House. To the companies heavily concentrated in the districts of committee chairmen. To clout. Is this not precisely the kind of lobby-driven policymaking that Obama ran against?"

The arbitrary gate was sauntered through quite a while back down the road. For one thing, these financial sector arguments are not obvious. Then, there have been so many changes of plan recently that arbitrary is a generous description, compared to say, oh, I don't know, frantic, say. There are a myriad of reasons that one could object to either the course of the bailout or even it's need on. I know that when people rank priorities in their own mind, they then seem obvious, but they aren't. In any case, politically you are into the realm of the arbitrary now, which means the power of constituencies matter. Oddly, in a democracy, if you spend money in one area, others are able to suggest that it would have been better spent in another. In other words, there's a kind of organic logic to the ebb and flow of politics in a representative democracy, that entails that the arbitrary knife cuts both ways, either we should stop now before it goes too far, or you cannot stop now because it will look arbitrary, stupid, and smack of cronyism, and , unless you're God, you will be suspect of having all of those human faults. To not understand the difference between politics and political theory, or economics and political economy, seems to be the common malady of pundits today. Here, for example, instead of running on about the reasons for this or that, as if you're writing a poorly thought out treatise, you should be surveying the political landscape and assessing whether or not, or, if so, you should compromise on the auto bailout to actually ease the political pressure for more spending. But no. You fancy yourself Kant, not a politician.

"Second is the sheer inefficiency. Saving Detroit means saving it from bankruptcy. As we have seen with the airlines, bankruptcy can allow operations to continue while helping to shed fatally unsupportable obligations. For Detroit, this means release from ruinous wage deals with their astronomical benefits (the hourly cost of a Big Three worker: $73; of an American worker for Toyota: $48), massive pension obligations and unworkable work rules such as “job banks,” a euphemism for paying vast numbers of employees not to work.

The point of the Democratic bailout is to protect the unions by preventing this kind of restructuring. Which will guarantee the continued failure of these companies, but now they will burn tens of billions of taxpayer dollars. It’s the ultimate in lemon socialism."

In political economy, efficiency is only one variable. It can be trumped by ethical, political, even theological reasons. Besides, in a free market sense, if employers agreed to terms that were ruinous, astronomical, and massive, that's their right. They own the place. All a free market generally tries to do is limit the damage of businesses going out of business, as thousands do every year, to the things actually owned by the proprietor. There's no guarantee of sagacity involved. I'm constantly amazed how teleology creeps in to every kind of explanation. In general there is more efficiency in the private sector as opposed to the public sector, but it is actually an empirical question that needs to be answered each time. Otherwise, it constitutes an object of faith. In this case, one can surely wonder whether or not bailing out the automakers is worthwhile, but there are more reasons to be considered than arbitrary, which was a wash at best, and efficiency, which, while probably true, needs to be measured. After all, these banking and automakers, such paragons of wisdom and virtue, were in the private sector. You need a little more evidence to prove to me that they're any smarter than people in government, but be my guest.

"Democrats are suggesting, however, an even more ambitious reason to nationalize. Once the government owns Detroit, it can remake it. The euphemism here is “retool” Detroit to make cars for the coming green economy.

Liberals have always wanted the auto companies to produce the kind of cars they insist everyone should drive: small, light, green and cute. Now they will have the power to do it."

Is it an a priori assumption that they're going to be wrong? What if it turns out to be efficient? What then? Oops. Didn't see that in my models or theories? This isn't a mechanistic realm of argument, although so many people think it is. There is good reason to believe that they will make a pig's breakfast of it, but you don't know that. How could you? Otherwise, you'd be investing in cars and be a billionaire. After all, you already know what's going to work. I wish I could see the future so clearly.

"And David Brooks in the New York Times:

This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

It is all a reminder that the biggest threat to a healthy economy is not the socialists of campaign lore. It’s C.E.O.’s. It’s politically powerful crony capitalists who use their influence to create a stagnant corporate welfare state."

Hear, hear. The intellectual case for the bailout–if there was one–surely can’t survive these two clear and analytical critiques in the nation’s most influential newspapers. But then, protectionism couldn’t survive the analytical critique of Adam Smith in 1776, and yet it persists."

I've read Adam Smith. Believe me, he understood the difference between economics and political economy. Creative Destruction. That means some businesses go out of business, and other businesses are created. That's it. Calling it Creative Destruction reifies a simple description into a mechanical principle. Not. Once again, once reified, it takes on a teleological quality, outside the ken of human agency. Everyone will be glad to know that if the earth were desroyed today, it would simply be a matter, from the point of the physical universe, of creative destruction. Some planets are created, some are destroyed. That's the beauty of it. I hope everyone will get some solace from that.

There is some truth to the precedent point, but for the fact that this question exists in time, which is a continuum, and there have already been precedents. It's as if by putting his foot down, Brooks can say, " It all begins here!". Sorry, you're not that powerful. The automaker's bailout exists on a continuum of precedents. No analysis can prove fruitful without comprehending that simple fact. I've already made that point. That's the difference between politics and political theory.

Finally, God save us from slippery slope arguments. They're fallacious. In order for them to work, the two terms in the deduction need to be indistinguishable. Got that. You can't tell them apart. Period. The organic logic I'm describing is not mathematical or mechanistic, but akin to the flow of actual discourse as opposed to linguistic theory. You have to be in it to understand it, it cannot be reduced metamathematically, or to another abstract language. Such reductions aid our understanding, but do not comprehend it.

So, here's an example of organic logic. Contrary to what has been put forth, that, if we allow this auto bailout, the world will be bailed out like a mechanical process, it might work in exactly the opposite way by being the compromise that allows the opposition to agree with you and settle here, in this place, for now. And the reason that this can happen, is because, unlike a mechanical process, this one involves human agency, which is in no sense mechanical.

So, let's recap:

1) Arbitrary: True, but where on continuum? Cuts both ways.
2) Efficiency: Empirical matter. Must be explained. Not a priori.
3) Moral Considerations
4) Political Considerations

My own opinion:
1) At least as intelligent as TARP
2) Probably true, but not certain
3) In this case, given TARP, this seems a worthwhile bailout
4) More likely to end avalanche than continue it, but, if the avalanche continues, more of the blame lies with TARP and how it has been handled and presented

Doesn't this involve qualifying principles? Yes, that's what makes it politics, as opposed to political theory.

“Firms see this as a potential gold mine,

David Boaz makes my point about lobbying and TARP on Cato:

"The Washington Post reports:

[There is] an army of accountants, financial advisers, asset managers, lobbyists and others descending on Washington as part of the government’s attempts to rescue the economy and bail out industries.

Big consulting firms like PriceWaterhouseCoopers and Ernst & Young have booked extended-stay apartments and blocks of hotel rooms. Out-of-town financial experts are scouting for office space, expecting to lease it for several months as they help do work for Treasury and others.

Commercial real estate brokerage companies have pulled lawyers and salesmen who usually put together deals on downtown offices to work out loans and foreclose on properties. Some have dubbed themselves the “TARP team” after the Treasury’s Troubled Asset Relief Program created to sort through assets.

“Everything from the policies, the regulations, to the money and the contracts to do the work will be emanating out of Washington, so people want to be here,” [lawyer Larry] Wolk said. “Wall Street has moved to K Street.”

National crises often provide a stimulus to the Washington economy….

“Firms see this as a potential gold mine,” said Anirban Basu, an economist and chief executive of Sage Policy Group in Baltimore. "

This post of mine was when?

Saturday, October 4, 2008

Problems With The Bailout

From the NY Times article "For Treasury Dept., Now Comes Hard Part of Bailout", I see the following problems with the plan as envisaged:

1) Possible conflicts of interest with the administrators of the plan.

2) Overpaying for assets.

3) Doesn't do enough to ease credit markets or makes it worse.

4) When the assets are eventually sold, there is a huge and unanticipated loss.

5) Lobbying by hedge funds, etc.

Are there others?

Posted by Don at 10:51 AM

Notice point 5.

"Fifty-nine percent of voters call themselves “fiscally conservative and socially liberal"

David Boaz is one of my favorite people, as is Greg Mankiw. He also says some interesting things:

"Lots of independents — as well as voters who identify with one of the major parties — hold broadly libertarian, or “fiscally conservative and socially liberal,” views. A lot of those voters moved from voting Republican to voting Democratic between 2000 and 2006, and it looks like they did so again this year."

So why is being a libertarian Democrat so strange a concept?

"If Obama governs as a centrist, he may make it very difficult for the Republicans to recover. But a candidate in either party who presented himself as a product of the social freedom of the Sixties and the economic freedom of the Eighties would be tapping into a market that both parties have yet to nail down.'

I suppose that I believe that this is where President Obama will be going, as well as the Democratic Party.

Here's an important difference between David and Greg and myself:

I don't feel that Paul Krugman, Robert Kuttner, Robert Reich, Lawrence Summers, Alan Blinder, are wildly different than me on economics. I believe that, even in cases that they disagree with me, they would listen to me, and understand my points. That's enough to be in a party that on all other issues, I generally agree with, and am often more "leftist", in some cases, than the average Democrat.

There's a realignment going on, and I think that more people with libertarian leanings will be joining me, without ever knowing about me, of course.

"Howard Baker famously called Ronald Reagan’s tax cuts a “riverboat gamble"

I'm worried about David Boaz having a meltdown himself:

"And if you tax Americans to bail out as many Americans as we’re now talking about helping, eventually you’re going to be taxing people to bail themselves out. In fact, the government is likely to borrow some of the money and have the Federal Reserve create more of it. That process seems to be under way, as Greg Mankiw and Jeff Hummel have discussed. How can that astounding and unprecedented increase in the monetary base not lead to inflation, even hyperinflation? We’ve already decided to tax the prudent and thrifty to bail out the imprudent and irresponsible. Now the prudent may face a danger even worse than taxes: inflation that erodes their hard-earned savings."

The only good news is that the government guarantees are going to prove to be not acceptable going forward. For the time being David, you might want to take a riverboat ride and enjoy the view and relax. That Old Man Bailout is going to keep rolling along.

Boaz On The End Of Capitalism

David Boaz on the end of capitalism:

"Of course, if this crisis leads us to question “American-style capitalism” — the kind in which a central monetary authority manipulates money and credit, the central government taxes and redistributes $3 trillion a year, huge government-sponsored enterprises create a taxpayer-backed duopoly in the mortgage business, tax laws encourage excessive use of debt financing, and government pressures banks to make bad loans — well, it might be a good thing to reconsider that “American-style capitalism”.

I agree.

GOP Loves Debt In Case You Didn't Know

David Boaz finds the Bush record a bit lacking:

"So it must be a great disappointment to Goldwater Republicans to discover this story that got almost no notice this week:

With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.

It’s the biggest increase under any president in U.S history."

You've got to love the GOP. When they don't walk the walk, they really don't walk the walk.

Libertarian Democrats, Let's Go!

Here's my comment from Startin's post:

"I have started a blog about being a libertarian Democrat, called The Libertarian Democrat Point Of View. Oddly, I got two positive responses from libertarians, David Boaz and Jesse Young, but nothing from Democrats. I agree with everything you say, the Democratic party is the best choice we have now as libertarians, and our mission is to make our case to Democrats in a way that guarantees that their core values are compatible with ours. I started the blog because this idea was posited by Kos in 2006, but seemed to go nowhere. The libertarian Democrat needs to set forth a clear set of ideas that appeals to Democrats and will bring more people into the party. We can also appeal to moderates, many of which share our core ideals. For me, the way to reduce government is to provide a real and meaningful social net for the needy, and growing our economy in such a way that fewer and fewer people are needy. This takes government intervention in the short run, but a growing economy that can raise the living standards of people at the bottom is the only way to go. The current Republican party doesn't get this at all, as David Frum recently pointed out. On social issues, we already have a lot of agreement. Let's get going!"

Startin himself made some very cogent replies to various liberal questions, so everyone should read through the comments.

The only way to answer critics from within the party and without is to try and develop a relatively consistent set of principles and ideas, and defend them cogently over time.

Reply To Jesse Walker On Being A Libertarian Democrat

Before dealing with current issues, I want to address an article David Boaz recommended. It's called "How To Be A Half-Decent Democrat" by Jesse Walker. It's a terrific piece, and it was written in direct response to the article by Moulitsas. However, it does not really address the issue of being a libertarian Democrat. The piece suggests that the Democratic party follow through on various libertarian friendly themes, such as being against the Patriot Act, etc.

I take the point, but that is the basic idea of being a libertarian Democrat. In other words, the libertarian Democrat is a Democrat who would like to see more libertarian friendly ideas advanced in the Democratic party. The agenda Walker sets out does include many ideas that we would do well to incorporate into the Democratic policy discussion. The lack of success in being a half-decent Democrat is what the libertarian Democrat is devoted to changing.

So, again, there will be fundamental disagreements between libertarians and libertarian Democrats, as well the divide between people who support a political party and those who don't and those who support another party. Nevertheless, it would be a good idea for libertarians to encourage the libertarian Democrat agenda, which is in a party that might actually be able to put some of these ideas into action.

Boaz On Biden: Yes, But...

David Boaz has a fair critique of Sen. Biden and property rights. I like the choice of Biden, but admit I like if for pragmatic and strategic reasons. I also enjoy Sen. Biden personally, even though he is no libertarian Democrat.

Let me be clear. If you belong to a major political party, you are accepting the fact that you are part of a large coalition, many parts of which you don't agree with. Hence, my opinion about Sen. Biden. So, it is not a lethal critique of the libertarian Democrat position to know that many Democrats don't find such a position agreeable. The question is whether the cause of liberty can be advanced within the Democratic party, which I obviously believe it can.