Sunday, November 20, 2016

Courting the Libertarian Vote

In the 2012 and 2016 elections, I saw a lot of noise being made about the third-party voters being “spoilers.” As in, we weirdos who voted Libertarian (or Green or Constitution) obviously owe our vote to one of the major parties. If the margin of victory is smaller than the third party vote, that automatically means we “spoiled” the election for you.

So you think we’re spoilers? Fine, we’re spoilers. I’ll entertain that notion for the sake of argument, putting aside the fact that third-party votes pull from both parties and ignoring the fact that many people who vote third-party would never vote for a major party anyway. Suppose we spoiled the election for you. Maybe that’s the point. You can’t count on our vote. You have to do something to earn it.

So move your party platform to attract us. There are ways to do this without going “full libertarian.” I’ll try to outline some second-best policies that major parties could adopt. Mostly these are common-sense reforms that anyone who wants a well-functioning government should want, libertarian or not.


The regulatory state is a huge drag on our economy. Reams and reams of new regulations are issued every year, and the cost of complying with them is enormous. Entrepreneurs need to be able to start businesses without worrying that some bureaucrat with a checklist is going to shut them down. This doesn’t necessarily mean “zero regulation,” but we should at least start cost-benefit testing new regulations, prospectively and retrospectively. No matter how sensible a proposed piece of regulation sounds, the possibility that it doesn’t actually benefit the customer should be entertained by its proponents. Some objective tests of efficacy should be set out ahead of time, and any new rule that fails to pass such tests should be dropped after some pre-determined date. All new regulations should have to be ratified by the legislature.

I get the feeling that leftists are incapable of even perceiving this as a problem. And conservatives like to chant free-market slogans but don’t do anything about the regulatory morass once they're actually in power. This needs to change. Even progressives should be against regulation that costs too much. Stop posturing and dig into the actual numbers. The efficacy of any given regulation is an empirical question and should be treated as such.

Capital Taxation

Slash taxes on capital, probably all the way to zero. They just don’t raise that much revenue, and they don’t succeed in redistributing from capitalists to workers . Once again, stop posturing yourself as “pro-worker” or “anti-corporation” and get practical. A “tax on capital” that in reality falls on the workers is bad for the workers. Tax incidence is a thing. Learn how it works and adjust your policies accordingly. Whatever amount of revenue you think we need to raise, at least try to raise it in the way that causes the least amount of economic distortions.

Simplify the Tax Code

Progressives tend to hear “simplify the tax code” as a euphemism for “make taxation more regressive” or “slash the overall rates.” But that’s a total non sequitur. A simplification can be revenue neutral, or can even increase revenue, and the final product can be as progressive or regressive as we want. There are far too many deductions and too many ways for rich people to game the tax code. This causes economic distortions as people seek such deductions, and it sucks too many of our brightest minds into the field of tax accounting. A simplified tax code would get rid of such distortions and free up those minds to do something productive for society. Ideally you could do your taxes on a single note-card.

One suggestion I've heard for tax reform is: "Let one group of people set up the overall structure of the tax code with the actual rates blank, and let another group fill in the blanks." As in, determine what is taxed (income or consumption?), where the brackets are (at $15/50/80k/year? Or how about at $20/60/100/250k/year?), what deductions to give (a charitable deduction? housing/daycare/medical deductions?), and *after* all this is done let some other group fill in the tax rates. You could end up with a simpler tax code where nobody's ox actually gets gored. Or, just as well, where everyone's ox gets equally gored. 

Drug Policy

Adopt the legalization of cannabis as your party’s platform. That’s where public opinion is going, and that is where the nation at large is going. There is no sense playing rear-guard here; just beat a full retreat and put a bad policy to rest. For the other drugs, at least decriminalize if you’re dodgy about full legalization. Or here's a "safe" option for legalization: we legalize everything, but only the government can distribute certain drugs in austere, boring state-run pharmacies staffed by disapproving scolds. People are getting their drugs anyway; at least in the world of a state-run drug trade, the drugs would be clean. And under some form of legalization or decriminalization, we could implement some form of “harm reduction.” It would be possible to have official needle exchanges, safe injection facilities, and chemical tests that ensure the drug user is taking what they think they are taking. People worry (needlessly in my opinion) that legalization would open up the flood gates and we’d see a massive surge in new drug problems. Total legalization is the first best policy, but some of these second-best policies would at least be better than what we have now, and I think they are politically palatable. Finally, put an end to the senseless, brutal police raids on the residences of suspected drug dealers. Whether you're on board with legalization or not, these obscenely violent raids shock the conscience. They quite often happen to completely innocent families. People subjected to these raids are needlessly terrified, sometimes even killed. 

Criminal Justice

See “Drug Policy” above. Also, get serious about punishing bad cops. Some police officers are wrongly smeared for legitimate acts of self-defense, but there are no doubt some problem officers. Be willing to admit that someone with a history of credible complaints against him shouldn’t be an officer, and don’t automatically jump to the defense of the police when a scandal happens. We should be holding these people to a higher standard than we do for the average citizen, not a lower one.

Do away with minimum sentencing. Yes, there are going to be some bone-headed judges who make baffling sentencing decisions. But injecting the democratic politics into sentencing has been a disaster. As voters, people tend to beat their chests and adopt a “tough-on-crime” mindset. The very same people, when seeing individual cases, tend to prefer sentences shorter than the legal minimum. Stop allowing the political process to constrain the range of options available to judges.

LGBT Issues

Support equality under the law for LGBT issues. Support the recognition of same-sex marriages and oppose official discrimination based on LGBT status. That’s all you have to do. You can privately disapprove, but don’t let your private opinion color your politics. If I don't have much to say here, it's because this one is so easy. Public opinion is on the side of the LGBT community. Where it's not there yet, it's trending fast. You're not going to see a backslide on this one, so be realistic and get on the right side of history.

Get Real About Entitlement Spending and Public Pensions

The underfunded liability for Medicare and Social Security are obscene. Laurence Kotlikoff (who officially ran for president  in the 2016 election!) suggests that the fiscal gap, the net present value of liabilities minus revenue, is over $200 trillion.  That’s about three years’ worth of the entire world’s GDP. It’s about twelve years of US GDP. There is no way to actually raise the revenue to pay for these entitlements. You’d end up on the other side of the Laffer curve if you tried. This isn’t a call to abolish the welfare state. It’s a call to be good stewards of the welfare state, and that requires acknowledging and pointing out its flaws.

See also this podcast with Joshua Rauh on public pensions. “If you aggregate up all of the systems in the country, you get to kind of $1-to-1-and-a-quarter trillion dollars of unfunded pension liabilities…We're used to thinking about a trillion dollars as being about $9000 per U.S. household.” He goes on to explain that this $1 trillion is an underestimate, because the liabilities are discounted at a ridiculous 8% interest rate.

People who like a generous welfare state need to acknowledge that a problem exists. We also need to recognized that our public employees have been promised money that doesn’t exist. Some of these promises will need to be repudiated. It can be any combination of things. Means-testing for benefits, for example. Perhaps everyone takes a hair-cut on their promised payouts. Increase the retirement age, at least for people who are a decade or so away from retirement and have time to adjust. Switch from “defined benefits” to “defined contribution” plans, where the retirement account is a buildup of savings and interest earned on those savings. Force governments to account for future liabilities properly by using the risk-free rate of interest rather than the absurd 8% they’ve been using. If you want a giant redistributive welfare state, you need to at least start being good stewards of it.

Welfare Reform

Many means-tested programs cause their recipients to face very high marginal tax rates. Obviously this discourages work. If I only get to keep 20 cents on each additional dollar I earn, I’m not going to work as hard as if I can keep 80 or 100 cents. Sometimes the benefits phase out too steeply (perhaps because the base benefit is too high), such that people see very high implicit tax rates. Acknowledge that this is a problem, and when you hear this argument, stop responding with “So you just think welfare recipients are lazy?!” No, they’re not lazy, they are rational human beings responding reasonably to the very bad incentives they’ve been given. Once again, this isn’t a call to abolish the welfare state, just to acknowledge one of its serious flaws.


Before discussing illegal immigration, we should first define what legal immigration policy ought to be. We currently have somewhere in the range of 700k to 1 million new immigrants each year. We should seriously consider doubling that. After specifying the acceptable level of *legal* immigration, we can talk about what to do about illegal immigrants. For some reason, discussion of immigration is dominated by talk about illegal immigrants. If we get *legal* immigration right, illegal immigration could well become a non-issue. Even if the notion of open borders worries you, there is a lot of space between open borders and current policy, and a lot of leeway to be choosy about who gets to become an American. There are a lot of people in the world who desperately want to become Americans, and many of them would be fine Americans by any reasonable person's standard. Let’s allow them in.

Trade Policy

Drop the fetish for manufacturing. Manufacturing employment in this country declined mainly due to automation, not because of globalization. See this great post by Scott Sumner, or read Paul Krugman’s excellent Pop Internationalism for the details on this. No amount of coddling American factory workers, no amount of “protective” tariffs or import quotas, will bring manufacturing employment back to its former level. Some of those factory jobs are gone forever. Also, stop bashing Chinese and Mexican factory workers for something that isn't even their fault. 

This is getting long. I didn't even touch education, healthcare, foreign policy, labor market regulations, or a host of other issues where the major parties are profoundly mistaken. There is quite a lot more to say, but I'm afraid that discussing education or health policy reform will step on too many toes and poison an otherwise viable coalition. Those arguments are perhaps for another post. I hope this post as written hasn’t slain any sacred cows. I hope it’s clear that I’m not trying to make anyone a libertarian with this post, just trying to find some possibilities for a consensus. Even if you don’t want to dismantle the parts of the state that libertarians object to, you should *at least* want to make those parts of government work better. In that vein, libertarian criticisms of government are pretty much accurate and there’s a lot to learn from them. I think if the Democrats or Republicans got serious about some of these reforms, they could start to attract some of the libertarian vote. Or they can just keep hectoring us and insisting that we owe them our vote no matter what they do. We can look at recent history to see how well that strategy has worked.

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