From the desk of Jane Galt:

More on Reagan

There's this puzzling contribution from William Saletan, titled What Reagan Got Wrong. What he got wrong, apparently, is the meaning of liberty:

"There's a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts."

That was the money quote in Ronald Reagan's farewell address nine days before he left the White House in January 1989. It crystallized his philosophy. I call it Reagan's Law.

This is what Reagan did best: He clarified the clash of ideas. He forced people to take sides. If you agreed with him, you were conservative. If you didn't, you weren't.

Do you buy Reagan's Law? That depends on two related questions. First, do you define liberty as the right to do things, or the ability to take advantage of that right? If liberty is the right to make a decent living or attend a good school, then getting government out of the way will suffice. But if liberty is the ability to make a decent living or attend a good school, then getting government out of the way isn't enough. In fact, government expansion, in the form of student loans or job training, may be necessary.

But it is Saletan who appears confused, not Reagan. What he is describing is not liberty; it is security. Security is also valuable and good, but it is not the same thing as liberty.

This promiscuous appropriating of words and redefining them is rather Orwellian. Saletan seems unwilling to admit he prefers one to the other; nor has he taken the many risk of fighting, as the libertarians and socialists are, to declare that one or the other has the sacred status of a right. Instead, he redefines them so as to obviate the need for argument: security and liberty are not two competing goods that we have to trade off against each other; security is liberty, doncha see. Indeed, this makes argument about the relative merits of security and liberty impossible; we are reduced to quibbling about dictionary definitions.

These are the tactics of Newspeak: make revolution unthinkable by making it impossible to communicate contrary thoughts. And the tactics of an oily politician: you can claim to be for anything, as long as you get to write your own definition of the things you claim to stand for. ("When I said I was for increasing defense spending, I meant on domestic gun control programmes") It's good debating tactics, but bad public discourse.

From the desk of Jane Galt:

Question of the day

And now for the pedestrian political implications:

Does it help or hurt Kerry that Reagan died the day before the 60th anniversary of D-Day?

Help, in the sense that it rolled two events which sucked oxygen from the Kerry campaign into one . . .

. . . or hurt, in the sense that it rolled D-Day, Bush, and Ronald Reagan into one metaphorical package for media consumption?

Discuss.

From the desk of Jane Galt:

What, exactly, was Reagan's legacy?

I saw some Republican on television yesterday -- I think it was Grover Norquist, saying that Reagan was great because when he took office, unemployment was 10% and interest rates were sky-high, and when he left office everything was boom-a-riffic. This is every bit as fine a bit of data mining as Democrats who make similar claims for Clinton -- the economy sucked when he took office, and was booming when he left. When Clinton took office, the economy was already recovering from a recession; when he left, it was sliding into another one. That's luck, not talent. (Rubinomics buffs, peace out. I'll deal with you later.) Similarly, high unemployment and interest rates under Reagan were not because Democrats Had Been Driving the Economy Into the Ground Until the Grownups Took Over. High inflation was the result of a dozen years of bad fiscal and monetary policy under two Republicans -- Nixon and Ford -- and two Democrats -- Johnson and Carter -- that was brought under control only when Paul Volcker, the Carter-appointed head of the Federal Reserve, jammed interest rates up to national-heart-attack levels and left them there until inflationary expectations were well and truly tamed. Reagan had nothing to do with unemployment and interest rates falling; that was the invevitable result of a drastic monetary tightening finally working its way through the economy.

While we're here, can we put to bed the oft-quoted supply side factoid that you can tell budget deficits have no effect on interest rates because interest rates fell under Reagan, even though the budget deficit expanded? Interest rates fell because once inflationary expectations were overcome, the natural interest rate for the US was well below the 20% it reached at the start of Reagan's presidency. But they might have fallen even farther without the budget deficits.

(Then again, they might not. As far as I can tell, there's no evidence that budget deficits have a significant effect on interest rates. One can theorise that it should, and indeed the theories make a great deal of sense. It's just that you can't find any actual good data to support them in the Real World. This is one of the major sources of my scepticism about Rubinomics.)

So Reagan didn't fix the economy singlehanded by employing the magic of the Marginal Income Tax Rate Reduction. And he did leave us with some whopping big deficits. So what good did he do?

To my mind, the single greatest achievement of Reagan's presidency was tax reform--not marginal rate reduction, but the simplification of the tax code. (For more on my quixotic crusade for tax simplification, please click here and here.)

When Reagan came into office, top marginal tax rates were, IIRC, around 70%. Only no one actually paid 70%, except for poor people unfortunate enough to win cars on The Price is Right, because the tax code had more loopholes than a sneaker factory. The Effective Tax Rate, otherwise known as What People Actually Pay, wasn't really much different from what it is now.

This was an enormous waste, for every time you add another loophole, you add another host of people spending time and money chasing that loophole.

Let's say that there's a tax loophole that's worth $1,000 to you, and you have an hourly pay rate of $20 an hour. How much time and/or money will you spend chasing that loophole? Rationally, up to $999, or 50 hours of your time, or some combination thereof that sums to a combined value of $999. That's time and money that could have been spent inventing a cure for cancer, or a really good low-calorie ice cream, or just kicking back somewhere you enjoy a lot more than the accountant's office.

Now multiply this by thousands of loopholes and millions of citizens, and you get some idea of how much valuable time and money we threw away trying to provide a tax break for every man, woman and housepet in the nation.

And actually, the problem was even worse than that, because there's an entire large, expensive lobbying industry devoted to generating more loopholes. And the more there are, the easier it is for lobbyists to get a few more passed . . . they just fade into the vast thicket of rules that's already there.

These loopholes reduced the transparency of the tax code, induced huge amounts of wasteful tax-avoiding activity, and increased risk, because it was harder and harder to know what was legal and what wasn't. And in 1986, the Reagan administration waded into that thicket of red tape with a pair of turbo-charged pruning shears. We ended up with a tax code where the ostensible marginal tax rate was much closer to the effective tax rate of most people, and people were able, nay required, to spend more time earning money and less time trying to keep a hold of it once they had. This was an Unqualified Good Thing.

(Not for everyone. No tax change is good for everyone. A lot of people, for example, who had bought valuable money-losing real estate for the shelter, suddenly found themselves with a lot of worthless, money-losing real estate when their tax write-off went away. Hello, S&L; crisis. Nonetheless, for the economy, it was an Unqualified Good Thing)

Oh, it was not a perfect legacy. It wasn't as sweeping as some people, like, say, me, would have liked; there were a lot of silly deductions left in, like the home mortgage interest deduction. And the Clinton administration and their accomplices in congress did their best to undo his good work, by introducing thousands of new loopholes. Though, recognizing that loopholes are damaging to the economy and the cohesion of civil society, they did at least try to mitigate the damage: they stopped calling them "loopholes" and instead referred to them as "targeted tax cuts".

By forcing a showdown with the air traffic controllers union, Reagan helped forestall the sorts of public employee quiet riots common in Europe whenever the government suggests that maybe eight weeks vacation and retirement at 55 are quite generous enough already.

He advanced the deregulation begun under Carter, which wasn't always good for the regulated companies, but was great for those of us who remember the rotary telephones and extortionate long distance rates of Ma Bell.

He helped bring down the Soviet Union. Oh, I agree with liberals that he didn't do it singlehandedly, but hey, Communism and Soviet imperialism really sucked, so isn't advancing its demise by fifteen years a pretty damn worthy accomplishment? Plus he had the guts to tell Gorbachev to tear down the Berlin wall, which was more than any of his predecessors had done.

And he pulled us out of the doldrums of the 1970's. He got the country to stop taking Europe's word for it that we were a bunch of rubes and know-nothings, fit for nothing except Continental security guard.

Plus, he made a bunch of movies. All in all, I think it likely that he'll be remembered alongside Roosevelt as one of the two greatest president's in the twentieth century. And they'll be remembered that way not because of the events they presided over, but because they recognized an evil empire when they saw it, and they led the country into battle against it.

We should all be able to claim so much.

From the desk of Jane Galt:

Welcome to the family

My cousin's gorgeous new son, Griffin Arthur Kelleher, now has his very own blog. Cutest baby ever? We report, you decide.

From the desk of Jane Galt:

Thought for the day

I posted this in the comments to another post, but I liked it so much that I thought I'd post it on the main page as well.

Thought for the day: Being a libertarian means that you never have to say you're sorry -- since you never, ever get anyone elected.

From the desk of Jane Galt:

Breaking news

Looks like the first Enron prosecution to make it to trial may have just blown up courtesy of Andrew Fastow. Could it be a little well-timed revenge for the court's nixing his wife's plea agreement? Or were the prosecutors trying to pull a fast one? Enquiring minds want to know!

From the desk of Jane Galt:

Toodle-oo, Tenet

So George Tenet has resigned "for personal reasons". Of course, no one ever gets fired any more; they just resign for personal reasons, usually to "spend more time with my family".

Or, as one colleague put it, "to spend more time with my family complaining about getting fired."

From the desk of Jane Galt:

What to think about the Chalabi scandal?

I mean, other than that the Bush administration associated itself with someone who wasn't exactly helping the cause in Iraq? Because we knew that before the Iran brou-ha-ha.

Something's been bothering me about the Iran story, though. Richard Perle puts his finger on it in this article in the New York Times:

"The whole thing hinges on the idea that the Baghdad station chief of the MOIS commits one of the most amazing trade craft errors I've ever heard of," Mr. Perle said, referring to Iran's Ministry of Intelligence and Security. He said it defied belief that a seasoned intelligence operative would disclose a conversation with Mr. Chalabi using the same communications channel that he had just been warned was compromised.

"You have to believe that the station chief blew a gift from the gods because of rank incompetence," Mr. Perle said. "I don't believe it, and I don't think any other serious intelligence professional would either."

Now, of course, Mr Perle is in full ass-covering mode, since his reputation will take a terrible shellacking from this Chalabi disaster. Still, he has a point. For the station chief to have told his superiors that their secure channel was possibly compromised -- over the compromised channel -- would be, to put it mildly, one of the most amazingly boneheaded acts ever conceived.

Not that government employees haven't historically been some of the prime sources of stunningly original, amazingly boneheaded moves. Still, it makes me wonder. Because if I were Iranian intelligence, and I wanted to

a) Check out my suspicions that the Americans were reading my traffic

b) Get rid of Ahmed Chalabi

. . . it strikes me that sending a transmission along the lines of the one we intercepted would be a smashing way to accomplish both goals.

In which case, I think that makes us the idiots.

From the desk of Jane Galt:

Fun fact of the day

Guess who lags the US in curbing toxic emissions? No, really, you'll never guess. It's Canada. Crazy, huh?

From the desk of Jane Galt:

Why I haven't been blogging or responding to my email

Well, first I went on vacation, to visit my grandparents in the far reaches of Red America, where internet connections are rarer than hen's teeth or members of the Democratic party.

Then I got the flu.

Now, thanks to the magic of Dayquil, and its dark sister, Nyquil, I'm getting better. But I have a whole lot of work to catch up on.

I'm not too busy, however, to take notice of Howell Raines' piece in the Guardian. His self-trumped rage against the White Male Power Structure seems to have morphed into rage against the Non-Howell-Raines Power structure. His piece dispenses political advice to John Kerry with the same visionary political instincts that led him to run 43 pieces in the New York Times on the protests against the Augusta National Country Club for its refusal to admit women--more than one piece per protester. Uncle Howell's wise counsel:

1) When, after telling Tim Russert on Meet the Press that he had never called Vietnam soldiers war criminals, Tim Russert confronted him with a 1972 clip of himself calling vietnam soldiers war criminals, John Kerry should not have "crawfished"

He should have said: "Tim, what you see in that video clip is a young man fresh from the battlefield and incandescent with the horror he saw. I mourned deeply for my comrades who were killed and maimed. I felt moral conflict, as many of our soldiers and sailors did, about the civilian casualties all around us. I felt angry that our national leaders had put us into a war without an exit strategy or a way of defining victory.

"Those are the feelings aroused in me today when I see our young men and women dying in Iraq. I am older and I hope wiser and as the nominee of my party I have an obligation to use less colourful language. But my desire for a government that is both strong and wise in the use of that strength - that calls upon its young for necessary sacrifice, but does not gamble needlessly with their lives - is as deep today as it was then. I have seen the face of battle when it was my duty. That will make me a president who understands the cost of conflict, the need for judgment that balances our military power, the need for honesty with the American people about what we know and don't know about where and when to go after terrorists ..." And so on and so on.

This is very good advice, if John Kerry had had six months and the assistance of Howell Raines to compose his response. But since John Kerry was right there, and had to answer right then, in the haze of shock immediately following his being whacked upside the head with his own fib, this is not very useful.

2) Kerry should tell voters that he's a Clinton-style, New Democrat type, and then when he gets into office, he should raise the hell out of taxes, especially on the rich, so that he can redistribute all their money down the income ladder. Which is a great plan, because voters and the Republicans who control the House and the Senate never notice things like that.

3) Kerry should dodge questions whenever possible by answering the question he'd like to answer, rather than the one he's asked.

This is brilliant stuff--the kind of keen political thinking that makes legends. I mean, Americans, especially the kind who aren't already smart enough to be Kerry-voting liberals--they're so dumb they don't even subscribe to the New York Times. It stands to reason that they won't catch on when Kerry's asked "What do you think about the Partial Birth Abortion ruling?" and he answers, as Uncle Howell suggests, "Here's my plan for getting us out of Iraq and defeating terrorism," and "Here's my plan for making sure you're not sick and poor in your old age." . . . and pulls the same stunt "over and over again, no matter what question is asked of him." Also, they believe that "getting us out of Iraq and defeating terrorism" and "making sure you're not sick and poor in your old age" are sufficiently easy to accomplish that John Kerry can swing the job singlehandedly.

But then, I suppose that everything's easy, as long as you're not blinded by Republican avarice and racism.

From the desk of Mindles H. Dreck:

Ouch! That's gotta hurt.

"My posterior's been fact-checked and I won't be able to sit down for a week"

click picture

From the desk of Jane Galt:

Obesity suits march on: a dieter is suing Atkins for giving him arteriosclerosis.

From the desk of Jane Galt:

Still on track

The economy grew at 4.4% last quarter, faster than originally estimated.

This is great news for us; the recovery is still going strong, and jobs, which have been slower to recover than even the 1990's "jobless recovery", seem finally to be coming back. Now if we don't get a nasty shock from a popped housing bubble, we'll be in very good shape.

Of course, it's not great news for all Americans. There has to be some consternation in Kerrystan right now . . .

From the desk of Mindles H. Dreck:

Failure to subsidize my speech

Heard on DeadAir America last night:

David L. Robb, the author of this book said, that the Pentagon's policy of assisting with movies (lending equipment, etc.) on the condition of substantial editorial control is 'clearly unconstitutional' - a violation of first amendment rights. Garofalo and Seder suggested it was grounds for a movie-viewer class action! Think of all the war movies we didn't get to see!*

While the Pentagon's editorial policies seem silly, I can't imagine forcing them to assist ALL films. This is transforming a negative right (freedom from interference with free speech) into a positive right. Do we have a right to assistance from the Pentagon with our film actively trashing the Pentagon?

I'm interested to know legal bloggers' (calling Professor Volokh?) opinion on Robb's claim. It seems relevant to the issue what (or how) the Pentagon charges for its assistance, but that was not clear from the discussion.

UPDATE: There are a few interesting objections in the comments. First of all, several commenters think "substantial editorial control" is not accurate. Perhaps. Taken at face value, what Robb describes constitutes editorial control in my book. For instance, changing the Top Gun love interest to a civilian, not allowing sailors to swear and re-writing scenes to avoid depiction of a war crime. Again, I think The Defense Department's position is defensible, but that is 'substantial editorial control' in my book. 'Silly'? Well, the first two examples above seem pretty silly to me. Silly isn't illegal or unconstitutional, it's just what bureaucracies do so well.

In other news, Garofalo and Seder compared various members of the administration to Nazis, etc. They remain interesting, like the Osbournes are interesting, but unfunny. I do keep listening, for reasons difficult to explain. I guess I get a kick out of hyper-partisan rhetoric. As anti-Howard Stern listeners famously told a pollster - 'to see what he'll do next'.

*What are the damages?

From the desk of Mindles H. Dreck:

It's either demand or supply....

Omar has some very normal looking pictures from Baghdad and observes that the market for construction materials is tight.