Sanctimony

Post image for Kicking off Human Achievement Hour 2014

Annually since 2009, my colleague Michelle Minton has organized a celebration of economic liberty for one hour at the end of March, known as Human Achievement Hour. (See here, here, here, and here.) This year, the holiday falls on Saturday, March 29, from between 8:30 – 9:30 p.m. in your respective time zone.

Observing Human Achievement Hour is about paying tribute to the human innovations that have allowed people around the globe to live better, fuller lives, while also defending the basic human right to use energy to improve the quality of life of all people.

To be precise, Human Achievement Hour is a cheerful response to the depressing alarmism of modern environmentalism. The gloomy greens propagate a message that virtually all economic development  is evil, because it necessarily despoils pristine ecology. We give ascendancy to mankind, and readily recognize that the surest path to both human and environmental well-being is wealth creation. The latter, in turn, is most efficiently engendered by markets unfettered by political meddling.

Is this materialistic? Y-E-S!

The editors at Ad Busters and Mother Jones may experience self-loathing whenever they buy a pair of sneakers, but not me. And I sleep well at night and have no problem looking in the mirror, because I know that material preoccupations are inherent to a vibrant market economy, which, again, is the essential mechanism of human development. Put simply, I am an unabashed materialist, insofar as schools and hospitals are filled with materials.

Throughout this week, in order to celebrate the 5th anniversary of Human Achievement Hour, other CEI colleagues will post blogs on OpenMarket, paying homage to various human achievements, including 3-D printing, driverless cars, and bionic eyes. Cool, cool stuff.

How can you celebrate?

  • In fact, Human Achievement Hour isn’t the only holiday observed on Saturday March 29, from 8:30-9:30 p.m. Contemporaneously, the World Wide Fund for Nature sponsors “Earth Hour,” which is an event where participants symbolically renounce the environmental impacts of modern technology by turning off their lights for an hour. While Earth Hour supporters may suggest rolling brown-outs in India are desirable, we respectfully disagree, and view reliable electricity as one human achievement people can celebrate. To this end, you can take part in Human Achievement Hour by keeping your lights on for one hour.
  • You can also celebrate by chatting with friends or family on your telephone or computer, watching the news on TV, listening to music, or even taking a shower thanks to indoor plumbing.
  • Share how you are celebrating by tweeting about the human achievement that makes your life easier @ceidotorg and use #HAH2014.

About Human Achievement Hour (HAH): Human Achievement Hour is about paying tribute to the human innovations that allow people around the globe to live better, fuller lives, while also defending the basic human right to use energy to improve the quality of life of all people. Human Achievement Hour is the counter argument to Earth Hour, and promotes looking to technology and innovation to help solve environmental problems instead of reverting to the “dark ages,” by symbolically refusing to use electricity for an hour.

Post image for Driving the Market out of the Marketplace of Ideas

Senator Elizabeth Warren’s recent letter to financial services companies demanding they disclose their contribution to public policy groups continues a troubling new development in the campaign against business participation in the public square. Along with Senator Dick Durbin’s letter this summer to more than 300 companies affiliated with the American Legislative Exchange Council (ALEC) demanding they explain their views on ALEC’s “Stand Your Ground” model legislation, anti-business groups increasingly seek to drive business out of the marketplace of ideas through shame and intimidation campaigns. Through legislation, public campaigns, and shareholder activism, groups hostile to business’s political activity now seek to isolate business and hinder its ability to defend itself against the regulatory state.

Disclosure proponents bring an apparently powerful one-two punch in favor of disclosure. Groups like the Center for Political Accountability argue that secret political spending by corporations exposes investors to legal, political, and reputational risks, which justifies mandatory disclosure rules. And on the other side of the relationship, critics like Public Citizen and the Center for Media and Democracy argue that business funding of public policy groups constitutes a conflict of interest for them.

Both these arguments, however, are mistaken. Consider the interest investors purportedly have in disclosure. In a highly mixed economy, corporations must engage in public policy debates over subjects such as anti-trust, intellectual property, environmental regulation, and numerous others as part of their fiduciary obligations to shareholders. Disclosure of this spending would not only be a costly legal expense to firms—it also may be unnecessary. Individual and institutional investors do not necessarily have an informational advantage over managers and boards of directors to identify political risks facing the company or public policy groups with common objectives to the firm. Firms might want to disclose for fear of shakedowns or political attacks. But a fair accounting of the risks must also include the risks from disclosure itself. Disclosure would undoubtedly invite shame campaigns and attacks on company brands by anti-corporate or other hostile organizations.

While firms should be free to weigh the costs and benefits of disclosure, they should not bow to disclosure rules from fear or curtail their political involvement as a consequence of disclosure. The challenges presented by a mixed economy to business profitability require more engagement with the public policy and political worlds.

Public policy groups and think tanks, for their part, risk the accusation of a “conflict of interest” for engaging with or raising money from the business community. There is certainly a risk of false or misleading research when one party stands to benefit from the outcome of research. But unlike candidates for political office, public policy groups can reward their donors at most by producing white papers or false research. Concerns about conflicts of interest also underestimate the degree to which peer scrutiny and a think tank’s long-term reputation of depend on integrity in scholarship. Within the public policy world, think tanks constantly evaluate one another to expose erroneous and misleading research, and public policy groups risk loss of public credibility should they engage in quid-pro-quo corruption.

At the same time, greater collaboration between business and free market public policy groups is necessary on principled grounds. Business participation in the research process helps public policy groups better document the unseen harms of regulated industries from direct costs of performance and technology standards, uncertainty, and compliance. The experience and research of firms could provide a powerful new perspective on the impact of policies on the ability of companies to innovate, expand, and create value for customers.

Limited working alliances between public policy groups and businesses are essential to the preservation and expansion of economic liberty. On the one side, public policy groups must do more to advance a positive role for business in a market economy by documenting how cronyism doesn’t pay. On the other hand, business needs intellectual allies to help it fend off political interference in a mixed economy fraught with political dangers.

At a time when anti-business groups seek to hamper businesses’ engagement with the public policy world, the case for businesses to find allies and partnerships has never been stronger. Neither business nor the free market public policy world can afford to remain aloof from the other when law and culture threatens to cleave them apart.

Post image for CEI Podcast for November 22, 2013: Daniel Hannan on Inventing Freedom

Have a listen here.

Daniel Hannan is a member of the European Parliament, representing South East England. He discusses his latest book, Inventing Freedom: How the English-Speaking Peoples Made the Modern World. He argues that “What raised the English-speaking peoples to greatness was not a magical property in their DNA, nor a special richness in their earth, nor yet an advantage in military technology, but their political and legal institutions.”

Post image for Some Genuine Vindictiveness in Park Closings

The Washington Times story on the attempted forced shut down of the Pisgah Inn on the Blue Ridge Parkway in North Carolina may provide some insight into the attitudes of the National Park Service in shutting down private concessionaires on federal lands that still have open access for the public.

NPS chief spokesman said: “NPS [is]a single entity….We do not believe it is appropriate or feasible to have some parts of the system open while other parts are closed to the public.”

If other words, if we suffer, you suffer. Appears to be some genuine vindictiveness there.

Perhaps NPS is worried that if the public sees how well the private concessionaires are running campgrounds, picnic areas, hotels, stores, bookshops and properties such as the Claude Moore Colonial Farm in McLean, Va., which was closed even though it takes no federal money and has no federal employees — they might begin to wonder why we don’t simply privatize all the National Parks and National Forests. Where is the constitutional authority for the Feds to raise trees and own campgrounds anyway?  And there is certainly nothing inherently unique or difficult about these things that make it so the private sector cannot do them. Indeed, the private sector does them much better. Ask your local timber company when was the last time it let forests die from insects, beetles or disease or burn down in catastrophic wildfires.

And perhaps instead of Republicans introducing bills to provide lost pay to furloughed non-essential Federal employees, they should provide for reimbursement for forcibly closed private concessionaires. With the money to come form budgets of NPS and USFS.

Have a listen here.

Deirdre McCloskey, a distinguished economic historian and author of many books, including The Rhetoric of Economics, The Bourgeois Virtues, and Bourgeois Dignity, will receive CEI’s Julian Simon Memorial Award on June 20 at CEI’s annual dinner. CEI Founder and Chairman Fred Smith talks about how McCloskey’s work embodies the same joie de vivre and optimistic spirit that animated Simon’s thought.

Post image for Answering Michael Lind’s Question: Why Is No Country Libertarian?

Last week at Salon, Michael Lind raised a question he thinks “libertarians can’t answer,” namely, “If your approach is so great, why hasn’t any country anywhere in the world ever tried it?” He elaborates:

Why are there no libertarian countries? If libertarians are correct in claiming that they understand how best to organize a modern society, how is it that not a single country in the world in the early twenty-first century is organized along libertarian lines?

Lind regards the non-existence of a libertarian country as a slam-dunk refutation of libertarianism. “If socialism is discredited by the failure of communist regimes in the real world,” he asks, “why isn’t libertarianism discredited by the absence of any libertarian regimes in the real world?”

Maybe because when political communities adopt libertarian institutions, principles, and policies such as property rights, freedom of speech and association, freedom of contract, free trade, and legislative checks and balances, the results are generally good, and when communities adopt antithetical institutions and policies the results are generally bad.

Reflecting on those big-picture realities, one is led to the ideal of a society of free and responsible individuals. The ideal is a polestar that helps direct our aim. But that is all. I don’t know a single libertarian who thinks that, if we just keep pushing, some day we will all live in Libertaria.

Why are there no full-blown libertarian regimes in the real world? The answer to this question is so obvious it’s a wonder Lind hasn’t thought of it. Libertarians have actually explicated it in detail. It’s called public choice theory.

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In The Washington Post, Allan Sloan points out that while President Obama wants to cap American citizens’ IRAs at $3 million or substantially less—discouraging saving and investment in the process—Obama’s own-taxpayer-subsidized retirement benefits are worth more than twice as much, a generous $6.6 million. A sweet pension for me, but not for thee, seems to be Obama’s thinking.  Discussing the president’s “proposal to limit the value of 401(k)s, pensions and other tax-favored retirement accounts to about $3.4 million” (or much less, as interest rates rise), Sloan notes that Obama want “to limit savers’ tax-favored accounts to only about half the value of what he stands to get from his post-presidential package. Based on numbers from Vanguard Annuity Access, I value his package at more than $6.6 million. . . .And that doesn’t include [his] IRA  . . . Or the $18,000 (plus cost of living) a year he will get at age 62 for his service in the Illinois Senate.”

He also notes that “the point at which Obama wants to eliminate the ability of you and your employer to deduct contributions to your retirement account isn’t actually the $3.4 million in his budget proposal—that’s just an estimate. The real number is how much a couple age 62 would have to pay for an annuity that yields $205,000 a year. That $3.4 million—which applies to the combined values of your pension and retirement accounts—is subject to a sharp downward change in the future because annuity issuers charge significantly less for an annuity when interest rates are higher than they do today, with rates at rock-bottom levels.”

Obama has discouraged saving in other ways, such as raising taxes on capital gains and dividends, imposing a new Obamacare tax on investment income, and by giving costly bailouts to irresponsible people who, despite ample incomes, saved so little money that they could not “afford” more than a tiny downpayment, and thus ended up with negative equity on their home later on due to declines in the value of their home, qualifying them for the bailouts that certain favored underwater mortgage borrowers have received.

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Reflecting on Thatcher’s recent passing, Warren Brookes Fellow Matthew Melchiorre and I explore that theme in today’s American Spectator:

In pursuing what she described as an “enterprise society,” Thatcher revolutionized politics on both the right and the left. In fact, her policies were so popular with the working class its support for the Conservative Party was 51 percent higher than normal during her term, according to our calculations of polling data. Thatcher’s restoration of the Conservative Party as a credible alternative to Labour gave Tony Blair no choice but to re-brand Labour into the more market-oriented “New Labour” to win national elections again.

What can today’s Republicans learn from comparing Thatcher’s legacy with their own? The GOP’s failure to match tax cuts with spending cuts hasn’t worked — in the economy or at the ballot box. A better approach to encourage entrepreneurship would be to make real spending cuts, lighten regulation to free up access to credit, and restore government finances through a simpler tax code instead of higher rates.

Thatcher certainly earned her nickname, the Iron Lady. It is a shame that, across the board, today’s politicians are made of much more malleable material. Read the whole thing here.

Have a listen here.

CPAC, the Conservative Political Action Conference, is the largest annual event of its kind. It is also one of the most controversial, due to its exclusion of gay conservative groups such as GOProud. CEI hosted a widely publicized panel discussion at CPAC, titled “A Rainbow on the Right: Growing the Coalition, Bringing Tolerance Out of the Closet.” CEI Founder and Chairman Fred Smith, who moderated the panel, reflects on the importance of inclusiveness.

Post image for Minnesota’s 300% Alcohol Tax Hike Will Hurt Consumers And Businesses

Politicians love to sell alcohol tax hikes as pennies on the drink that won’t really hurt anyone’s pocketbook, while helping to pay for the burden that drinkers put on the rest of society, as they did in Minnesota this week, when lawmakers there introduced a proposal to increase the state excise tax on alcohol by at least 300 percent.

These arguments are deceptive. The cost estimates used by politicians to increase taxes are usually misleading and grossly inflated. Worse, these seemingly small increases in the cost of alcohol will have significantly harmful effects on Minnesota businesses and consumers, and potentially reduce state tax revenue as businesses close and consumers cross the border to buy cheaper alcohol in neighboring states.

According to a 2011 Minnesota Institute of Public Health (MIPH) study commissioned by the Minnesota Department of Health, alcohol use costs the state $5.07 billion a year. That number is far greater than the $296 million in revenue collected each year from alcohol taxes, but a closer look at the study shows that the majority of the “costs” aren’t paid by the state at all. Most of those costs, such as the $3.71 billion in productivity loss, lost wages, absenteeism, and premature death, are borne by individual and arguably their families and employers, not taxpayers. As is often the case, government researchers are conflating private costs with public, or social, costs.

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