Monday, December 19, 2011

Jeb Bush Flatlines in the WSJ

Jeb Bush seems to be trying to set himself up as the candidate people wish had run for the Republican nomination. It's a "Don't pay any attention to what I did as governor (or what my brother and father did as Presidents, or what my grandfather did as a Senator) - I've discovered Ron Paul and libertarianism, and regret "succumbing" to the temptation to "do something" about economic problems.

The short version is that Jeb has supposedly been moved by Ron Paul's allusion to "The right to rise" as a "core concept of economic freedom", and as a result wants to free businesses of regulation and to free individuals from any form of government assistance.
We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.
You know, like being born to a family that has been fabulously wealthy and politically connected for more than a century. The sort of fortunate birth that many people confuse with qualification for public office, but that's apparently something we are now supposed to celebrate rather than regret in the wake of a duopoly of increasingly disastrous Bush presidencies. (Anybody wanna go for a trifecta?)

The primary target of Jeb's editorial is regulation, which he tells us "abridge our own economic freedoms". He paints with an incredibly broad brush, but fails to identify any actual regulation that he sees as harmful, or to identify any actual harm. I don't think that's because he could not identify a regulation in which the costs and benefits were out of balance. I suspect that it's because to do so would reveal that this is penny ante stuff - that he could not identify any significant impediments to big business arising from regulation and that people would very easily identify the need for the regulations he specifically described even if agreeing that they should be modified.

It is fair to say that regulation of business impairs the ability of small businesses to enter highly regulated markets, and to compete with larger businesses that have legal departments that allow them to navigate or bypass regulation. But it's also fair to observe that as much as businesses rail against regulation, they recognize that complexity can be their friend - a clear regulation must be obeyed, while labyrinthine regulations are inevitably full of loopholes. Simple regulation also doesn't serve as a barrier to entry, while complexity may deter competitors from entering their markets. A similar phenomenon can be seen with newer high tech companies complaining about patents as a barrier to their success, and then not seeming so bothered by them after they build their own catalog of patents to use to threaten or negotiate with competitors.

But Jeb is speaking about personal freedom, and he provides no link between the regulation of businesses and the freedom of individuals. Having supposedly been inspired by Ron Paul, perhaps he has been listening to some of Paul's inanities on libertarian markets. As much as a certain faction of right-winger would like to pretend otherwise, history's lesson is clear: In the absence of regulation, business and wealth run roughshod over individual rights and freedoms.

Jeb offers some stump speech-style rhetorical questions,
Have we lost faith in the free-market system of entrepreneurial capitalism? Are we no longer willing to place our trust in the creative chaos unleashed by millions of people pursuing their own best economic interests?
If you succumb to the temptation to answer the questions, they're easily revealed as simplistic and inane. But that's not the point. Jeb is suggesting that there's a horrible "other" at work in our government that is out to undermine "entrepreneurial capitalism" and individual economic freedom and, implicitly, that it's men like him who are the answer... that is, now that they're out of power and no longer "succumb" to the temptation to pass the regulations that they would not dream of passing if they are returned to power.

When Jeb says, "We see an industry dying and we demand it be saved," I expect that he's speaking of the domestic auto industry, more specifically of GM and Chrysler, that both his brother and President Obama thought necessary to save within the context of a massive economic meltdown. Except the auto industry was not going to fail - just two of the three domestic manufacturers. Do you believe for a second that, had Jeb been President, he would have stepped back and allowed GM to collapse rather than providing funding to keep it afloat while pushing it through a structured bankruptcy? I suppose he could be referring to the financial industry, as that industry might have collapsed pretty much in its entirety had it not been bailed out by the government, but the chance of President Jeb not stepping in with a bailout package would have been zero percent. Let's be real. The "right to fail" is an individual right, and provides a context in which Jeb would have no difficulty distinguishing large corporations from real people.

I liked this line:
The right to rise does not require a libertarian utopia to exist.
Have you ever paused to wonder what a libertarian utopia would look like? Were you to smoke opium you might dream up something along the lines of Ron Paul's fantasy:
The regulations are much tougher in a free market, because you cannot commit fraud, you cannot steal, you cannot hurt people, and the failure has come that government wouldn't enforce this. In the Industrial Revolution there was a collusion and you could pollute and they got away with it. But in a true free market in a libertarian society you can't do that. You have to be responsible. So the regulations would be tougher.
I once heard a sarcastic, but much more likely vision of a libertarian utopia: anarchy with lawyers. You only have rights to the extent that you can privately enforce them, meaning that you need lawyers and money (or guns) on your side to prevail. Once you start allowing the government to regulate such things as what you do with the toxic sludge you dump on your own land, such that it doesn't leach into the groundwater or create toxic runoff onto neighboring parcels, you're creating the "collusion" that Ron Paul assures us will only serve to ensure that the polluter will get away with it, or the "loss of personal freedom" that Jeb implies will inevitably arise from the regulation of industry.

Jeb, as a politician, saw his party cater to the legal drug dealers of his state - pain clinics that rake in millions of dollars legally selling pain medications to addicts from around the country - and failed to pass legislation that would have created a state system for tracking the prescription of scheduled medications. Such a database is an imperfect tool, but is one that can help the state track both doctor shopping by patients and the doctors who are most obviously selling prescriptions as opposed to practicing medicine. Perhaps, having seen the "folly" of such regulation, Jeb has come to believe that people should have the freedom to get intoxicated on the substance of their choice. More realistically, he came to understand that it's sometimes the most immoral, most repugnant businesses who have the deepest pockets for lobbyists and to find ways to buy off government officials who might otherwise limit their harmful practices.

Within that context, I have a difficult time not being cynical about Jeb's call for "Rules that sunset so they can be eliminated or adjusted as conditions change". The non-cynical interpretation is that he's proposing that we test how regulations work in practice and only renew them if they work as planned, and return benefits that exceed their cost. The cynical interpretation is that if you set a sunset period of, let's say, four years, every four years you get to return to the trough to be fed by the industry's lobbyists.

Meanwhile we are to pretend that regulations are never revisited, that nobody ever looks at costs and benefits, and that nobody can figure out how they work. Great hyperbole, and like any good lie containing a kernel of truth, but a lie nonetheless. Sure, there's always an element of uncertainty in the creation and passage of new regulations, and there are always regulations that continue long after their original goals are fulfilled. But it's absurd to pretend that industry doesn't figure out how to operate in a regulated environment, that its lobbyists are not consistently working to amend or revoke unwanted regulations, and that some of the zombie regulations live on because they benefit an industry, directly or indirectly subsidizing certain activities and operations. We can also easily look back on episodes of deregulation and see direct, negative consequences on industries, public welfare and the economy. For example, although Jeb would probably prefer that we not recall his brother Neil, whose reputation was shattered by his role in the Savings & Loan debacle, or how the more recent financial industry collapse was a repeat of the S&L collapse, on steroids, but it would take a fool to not see how deregulation played a significant role in both financial disasters.

With no apology for his hyperbole, Jeb tells us the horrors that will inevitably come from regulation:
We either can go down the road we are on, a road where the individual is allowed to succeed only so much before being punished with ruinous taxation, where commerce ignores government action at its own peril, and where the state decides how a massive share of the economy's resources should be spent.
You might believe from Jeb's first statement that, since his father was in the West Wing and Oval Office, taxes have been on the rise. But then there are those nasty facts - taxes went down significantly under big brother G.W., and have again been reduced under President Obama. If Jeb wants us to believe that we're on an inescapable downward spiral of regulation that can lead to nothing but higher taxes, the facts have a cruel way of raining on his parade. Now it is fair to say that our course is unsustainable - that the damage the G.W. Bush years, with their unfunded wars, entitlements and tax cuts, bloated budgets, stagnant wages and out-of-control spending did to the economy leaves us with no choice but to raise taxes. But none of that has a whit to do with regulation. And, as a good Republican, Jeb prefers to pretend that we can magic away all of that harm by eliminating regulations and cutting entitlements.

I'm not sure when we were last in a world in which commerce could avoid paying attention to government action. It appears that Jeb is unfamiliar with the U.S. Constitution and how it empowers the federal government to regulate interstate commerce, or how that regulation has facilitated commerce between the states. Or how he can be unaware that treaties and negotiations have facilitated commerce between nations. Even so-called "free trade" agreements are a form of regulation, not deregulation - rules and policies that both sides must follow in order to avoid tariffs. You don't believe me? Read NAFTA and... in a few hours, or perhaps tomorrow, when you're done, come back and explain to me how little it regulates.

As for Jeb's concern that the state "decides how a massive share of the economy's resources should be spent", well, let's take a look at the budget. The biggest expenditures are for Social Security and the military. Social Security is an insurance program, perhaps a redistribution of wealth but not the government deciding how the money is to be spent - the government may write the check but, as a beneficiary, you're free to spend your check as you please. (The same is true for income security programs such as unemployment). So is Jeb railing against military spending? Unquestionably, the government controls how every penny of the military budget is spent. But we know what would happen if we were to directly ask Jeb about military spending as the state deciding how a massive amount of money should be spent - we would get a word salad that boils down to "That's different."

But I'm (cough) beating around the bush. Jeb is talking about medical spending, and is implying that the Affordable Care Act's shifting around of the deck chairs on the Titanic amounts to deciding how the nation's healthcare dollars are spent. Never mind that for most people there will be no discernible difference between their health care or health insurance expenditures before and after 2014, or that the plan pushes money into the hands of private health insurance companies. Never mind that if "free markets" inevitably brought the efficiencies that people like Jeb promise, we would already have the cheapest, most accessible health care system in the world, while instead we have the highest costs in the world without a corresponding level of access or performance. Never mind that the ACA at least attempts to reign in medical inflation, and that without corrective action the present system will collapse.

The alternative to Jeb's imaginary parade of horribles is the "return" to a world that exists only in his imagination:
Or we can return to the road we once knew and which has served us well: a road where individuals acting freely and with little restraint are able to pursue fortune and prosperity as they see fit, a road where the government's role is not to shape the marketplace but to help prepare its citizens to prosper from it.
Would that be a road through which the son of a millionaire can become a millionaire Senator, and have a millionaire son who becomes President, and have a millionaire grandson who despite a track record of non-achievement can also become President while his more accomplished (but still not all that impressive) brother can become a governor who obviously hopes to also become President? Because the road is a lot tougher for the rest of us, and the Horatio Alger myth remains a myth. Jeb speaks of choice between "the straight line promised by the statists" (an allusion, perhaps, to equality?) that turns out to be "a flat line" and "the jagged line of economic freedom" (where you and I have our ups and downs, while brothers like Tripper and Tumbler - the Secret Service code names Jeb and George respectively earned as they staggered through their drunken young adulthood - emerge from their wastrel youth float into adulthood, buoyed by an inherited name, family fortune and political connections... but in fairness, Jeb did let us know, up front, that we need to let people enjoy "the fruits of... good luck".

So let's pretend that a return to the era of the robber barons, the age in which the Bush family fortune was first accumulated, will be an era of equal opportunity, of a rising middle class. Let's ignore that the greatest innovations in the world's history occurred in no small part through public-private partnerships of the modern era - NASA, ARPAnet, the Manhattan Project, military technology, etc. - and pretend that we would be better off in the era of child labor, violent union-busting, rampant inequality, and corrupt government. Because it would appear that to Jeb Bush, those are the good old days. Make the pie lower.

For the diminishing number of people who still believe that a new candidate can enter the Republican primaries and save the party from Mitt, sorry, it won't be Jeb. It's far too late for that. So why emerge from the woodwork now? To attempt to position himself as relevant and, should the economy stagnate for another four years, to point back on his essay with an "I told you so". Why offer an essay that is so lightweight, weakly reasoned, devoid of examples? For the same reason - in the event that the economy turns around, by leaving the meat off of the bones he's not making any statements that his future opponents might use against him.

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