Edmund Burke, Conservatism, and Free Markets

In a recent piece by Samuel Gregg of the Acton Institute, he discusses the turn against free markets by some conservatives.  This issue is part of the ever increasing divide among those who traditionally align with the conservative movement broadly speaking, and those that seem to succumb to the ever increasing role of government regulating the economy.

“Conservatism emphasizes the benefits of permanency, order, tradition, and strong and rooted communities,” states Gregg.  Thus, the disruptions in markets that we’ve experienced in recent years has jilted some free market traditionalists.

Enter Edmund Burke, as Gregg reminds us.  Burke is not one who is often touted when trying to defend conservative free market principles (at least from an economic perspective), but his defense of economic liberty is one that conservatives should reclaim.

Burke defended a limited role of government, one that functions only in the areas of providing public goods (defense, security, protection of property rights).  Also, he argued that the national government should stay out of local affairs, and welfare functions should be “undertaken by non-state entities.”

It seems that many conservatives today have forgotten these principles.  When trying to solve the most pressing economic (and social) problems of the day, conservatives quickly seek Federal government solutions.  They would do well to take a step back and (re)learn from this 18th Century Irish Statesmen.

Thoughts from Moldova: Foreign Policy and American Exceptionalism

I am currently in the Republic of Moldova speaking at a conference on the theme of the U.S. Presidential Election, and it’s interesting to reflect upon the U.S. political process from Eastern Europe in a place where democracy is new and struggling.  The Moldovan government today is a democracy born out of the collapse of the Soviet Union approximately twenty years ago, and it is a place where the communist party still has significant influence.

The U.S. has a significant presence here with a vibrant embassy community, USAID workers, Peace Corps volunteers, and many NGO’s working to support democracy and economic development.  What comes to mind as I look back to America is thinking about the presence of the U.S. throughout the world and the U.S. foreign policy more broadly.  In the final debate between President Obama and Governor Romney, there was a brief discussion of America’s role in the world and the distinctive view of each candidate came to light.

Political Scientist Seymour Martin Lipset wrote about American exceptionalism calling American “the first new nation,” one wholly independent and free.  This idea of America as exceptional has never been rooted in arrogance or the need to promote our particular culture or behaviors.  Exceptionalism is rooted in the belief that America is unique based on the ideals of liberty, freedom, and the nature of man.  Thus, America has much to offer the world and our foreign policy should reflect these ideals.  Yet, this exceptionalism seems to be lost on the current president.

Governor Romney proposed that America’s role in the world should reflect this idea of exceptionalism, and he criticized President Obama’s Middle East “apology tour” shortly after Obama took office.  While the president argued that he was not traveling around the world apologizing for U.S. foreign policy, the posture of his view of America’s role in the world is a distortion of the excpetionalism America offers.

In Moldova, it is very clear that America is exceptional.  Exceptional in offering the world, and Eastern Europe in particular, a model of freedom and what it means to live in a society where the relationship between the citizen and government is one where the citizen can participate without fear and one where the common man has a voice.  There is no fault in this exceptionalism…no reason for apologies…no reason to diminish America’s role in the world.  This exceptionalism leads to America’s vibrant role in the world today.  This role is powerful in promoting democracy in places where people are not free or where people still live under the cloud of government corruption.  In Eastern Europe America’s exceptionalism is essential for training both the citizens of this part of the world and their leaders in how to develop accountability for actions, transparency in governing, and freedom to voice dissent and new ideas.  This role is changing the face of a part of the world where corruption, bribery, and institutional breakdown is a constant struggle.

American foreign policy should continue to provide bold leadership in the world today.  This role is not intended to shift cultural values or change the nature of the informal arrangements among citizens of a particular country.  Yet, American exceptionalism is a powerful influence for freedom and liberty throughout the world, and this role of American foreign policy must continue for decades to come.

Energy Policy – Hope v. Change

During the presidential debate on Tuesday night, President Obama and Governor Romney struggled at times to give any substantive policy specifics.  We often hear platitudes which correctly speak to the ideological differences of each party, but there is often limited discussion on real policy differences in these debate formats.

Yet, in Tuesday’s debate we did hear specifics In terms of energy policy and the real policy differences highlight the economics of hope versus change.  Romney clearly wants to build the pipeline from Canada to the Golf Coast, and Obama blocked approval of this pipeline.  Romney wants to drill for more oil in North America, increase permits for companies to drill off the coast of Alaska and the eastern seaboard, and expand coal mining expanding the resources America is richly endowed with.  The president’s policy is full of hope…hope for alternative energy to take off and “lead us to energy independence.”

Billions of taxpayer dollars have been invested in green technology, from wind to solar to electric automobiles (see the Chevy Volt), yet much of these dollars are being used to (attempt to) shift market incentives and the president is learning that artificial incentives do not change behavior.  The costs are still simply too high for consumers to purchase electric vehicles or solar power for their home.  Thus, the hope of green energy is not a policy that leads to change.  In fact, the outcome is a failure to invest in traditional energy resources and subsequently higher prices for gasoline, in particular.

A new energy policy agenda is needed, and this policy should be based on reducing regulations and a strategy to find and extract oil that is located in the North America.  This will ultimately change the scope of energy dependence on foreign sources, and it will move the decision on investment choices for energy to the market (where it should be).

Recap: Catch my flat tax podcast on Coffee & Markets

The guys over at Coffee & Markets were kind enough to have me on their show for a recent discussion on the flat tax.  Play it online or download the podcast to listen later. Check it out at RedState’s website: http://www.redstate.com/2012/09/18/how-would-a-flat-tax-impact-the-middle-class/.

And while you’re at it, be sure to follow Coffee & Markets on Twitter @CoffeeandMarket and the Helms Center @HelmsCenter.

Runaway Spending

Despite the rhetoric espoused by both party’s during their respective conventions, the Republicans must continually challenge Mr. Obama on the fundamental problem of unsustainable government spending.  Every time a Romney-Ryan policy is criticized, the runaway freight train of Obama spending should be part of the rebuttal.

When the Obama administration claims that the Romney-Ryan Medicare plan will harm the elderly (which is a distortion because those over 55 can keep Medicare as is), the response should be “what do you plan to do about a budget that is 1 trillion dollars in the hole this year?”  Raising taxes on the wealthy is not a viable policy option to solve this spending problem.

Image

As the chart above demonstrates, the trend shows government borrows approximately 45 cents of every dollar it spends.  This level of imbalance is not only unprecedented historically during peacetime, but it is a problem that more tax revenue cannot solve.  Even when considering one of the most punitive tax increase proposal by the democrats in the House of Representatives, a tax on the wealthy making $1 million or more a year (both income and capital gains tax increases) would actually raise $40 billion to $50 billion a year which is only about 3% of the annual federal deficit.  This increase in revenue is barring an absence of any negative effects on economic growth, which is no certainty when taxes are raised on those who drive economic activity.

The U.S. government has a major spending problem, and both the candidates and the American people need to start acknowledging the disastrous path we are on.