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Archive for January 1st, 2011

Walter Williams explains why politicians and bureaucrats shouldn’t have the power to tell us what we’re allowed to buy.

At first blush, the mercantilists’ call for “free trade but fair trade” sounds reasonable. After all, who can be against fairness? Giving the idea just a bit of thought suggests that fairness as a guide for public policy lays the groundwork for tyranny. …Last summer, I purchased a 2010 LS 460 Lexus, through a U.S. intermediary, from a Japanese producer for $70,000. Here’s my question to you: Was that a fair or unfair trade? I was free to keep my $70,000 or purchase the car. The Japanese producer was free to keep his Lexus or sell me the car. …The exchange occurred because I saw myself as being better off and so did the Japanese producer. I think it was both free and fair trade, and I’d like an American mercantilist to explain to me how it wasn’t. Mercantilists have absolutely no argument when we recognize that trade is mostly between individuals. Mercantilists pretend that trade occurs between nations such as U.S. trading with England or Japan to appeal to our jingoism. …That’s nonsense. Trade occurs between individuals in one country, through intermediaries, with individuals in another country. Who might protest that my trade with the Lexus manufacturer was unfair? If you said an American car manufacturer and their union workers, go to the head of the class. …it’s never American consumers who complain about cheaper prices. It’s always American producers and their unions who do the complaining. That ought to tell us something.

The only thing I would add is that protectionists and free traders should unite in a campaign to get rid of misguided government policies that make it more difficult for American companies to create jobs and produce goods in America. America’s punitive corporate tax rate, for instance, should be dramatically lowered.

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Republicans did a terrible job last time they were in power. The created a new entitlement program for prescription drugs. They further centralized education with the no-bureaucrat-left-behind legislation. They undid the positive reforms of the 1990s with central-planning subsidies and controls for agriculture. And they became earmark junkies as part of their votes to massively increase the burden of government spending.

Republicans say they’ve learned their lessons, and I’m sure many of the new Tea Party-oriented members genuinely want to expand freedom and prosperity for the American people, but it’s always wise to be skeptical when dealing with politicians.

If the GOPers really want to do the right thing and demonstrate their new-found commitment to liberty and sound governance, they should make – and keep – the following New Year’s resolutions. To keep it simple, realistic, and achievable, we have only six resolutions. Three resolutions deal with public policy and three resolutions are about resisting the seductive corruption that is so ubiquitous on Capitol Hill.

The three policy resolutions list things that House Republicans could adopt. That doesn’t mean they will make it through the Senate or get approved by the President. These are ideas that Republicans can pursue to show they are serious about doing what’s right for the country.

1. Limit the overall growth of government spending. America is in a fiscal mess because federal government spending has more than doubled since Bill Clinton left office. Bush was a big spender. Obama is a big spender. And Republicans and Democrats on Capitol Hill have been big spenders. Now that we’re in a deep hole, the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield very good results. The key to fiscal responsibility is making sure the productive sector of the economy grows faster than the burden of government spending.

2. Repeal Obamacare, but understand that much more needs to happen to fix the health care system. It is a certainty that the House GOP will vote to repeal Obamacare as one of their first acts, but that will be a symbolic step since Harry Reid’s Senate obviously won’t consider such a step. Republicans, however, can use the discussion as an opportunity to educate themselves and the American people about how government intervention crippled the healthcare system even before Obamacare was enacted.

3. Push for real tax reform by lowering tax rates and curtailing tax distortions. One of the pleasant surprises of 2010 was the decision, by both Obama’s Fiscal Commission and the Domenici-Rivlin Task Force, to endorse lower tax rates and fewer tax loopholes. Both groups also wanted a higher tax burden, so the overall packages were not acceptable, but it nonetheless is remarkable that they rejected Obama’s approach of class-warfare taxation based on higher tax rates. Surely the House GOP can take the good parts of those plans and push even farther and take a big step toward a flat tax.

Most of us understandably pay attention to the big policy issues, such as the ones covered by the three previous resolutions. But if we want better policy, it’s also important to change the culture on Capitol Hill. If Republicans abide by these three resolutions, they would be comparatively immune to the routine corruption that is so common in Washington.

1. Don’t succumb to bribery by accepting campaign cash to push policies that hurt America. It’s not against the law to get contributions in exchange for earmarks and other special-interest favors, but it would be criminal behavior anyplace other than Washington. An overwhelming percentage of lawmakers presumably know that things such as ethanol subsidies are terrible public policy, but they get enacted because the agribusiness industry doles out contributions to politicians from both parties. The same is true of earmarks. If the GOP swore off this corrupt process, the result would be better policy.

2. Don’t put the interests of your committee above the interests of the nation. It is very common for lawmakers to strongly identify with the committees on which they sit. This is why Republican appropriators often side with Democrats to defend earmarks and other types of wasteful spending. Similarly, Republicans on the committee dealing with education are more likely to be bad on that issue than other members of the GOP caucus. And Republicans on the transportation committee are worse on those issues than their colleagues. Committee term limits would help, but the only permanent solution is for attitudes to change.

3. Take the Constitution seriously. Members of Congress take an oath of office to uphold the Constitution, and the GOP specifically has announced that they want all legislation to include an explanation of why it is consistent with the Constitution. That’s great news, but only if Republicans are serious. But does anyone think that the GOP is ready to bar any legislation funding the Departments of Education, Energy, Agriculture, and Housing and Urban Development? None of these bureaucracies should exist according to the Constitution. So if the GOP is going to do its job, they need to treat the Constitution as more than a political talking point.

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