The Mad hatter’s Tea Party – A rebuttal to Libertarianism

Obama is increasingly starting to look like another Jimmy Carter, good in principle, but the last things Americans want is smart guys who are all “logical” and stuff. No these tea(bagging) partiers want people who are as mad as themselves, i.e. nuttier than a granola bar. Many want “definitely not married to a gay guy” Bachmann, “bubbl’in” Perry or Ron Paul as president. But what exactly are the Tea Party’s policies? Aside from superlatives and patriotism and silly idiotic things about birth certs, gun rights and abortions (there’s been scant to no real change in the laws regarding the latter two for decades) I don’t hear a lot.

Both Parties? Define “both”!
Tea partiers say they aren’t a party as such but represent members from “both” parties. But what they don’t say is that the “both” refers to the more extreme elements of the Libertarian and Republican parties. It occurs to me that this policy vacuum within the Tea Party is being taken over by the Libertarians (or “underpants gnomes”) and they’re leader Ron Paul. Now while you’d have to commend him for saying something’s that needed to be said (speaking out against the patriot act, voting against the Iraq war, etc, though I would note he’s gone rather quiet on these issues since joining the Tea party), but it’s the other things coming out of his mouth, that have me worried. Furthermore, identifying problems and highlighting the hypocritical behaviour of the US government is sort of like shooting fish in a barrel. Coming up with coherent polices to solve these problems that will actually work and not do more harm than good – that’s the hard part! Furthermore, its getting such polices through the snake pit of Congress intact, as Obama has shown, is the really tricky bit.

But it all begs the question: who’s in the Tea Party is crazier, Bachmann? Perry? or Ron Paul and his underpants gnomes? I would argue that the libertarians and Ron Paul are actually the people in the Tea party whose sanity should really be the one under scrutiny. I would caution that this is going to be a long post. The libertertarians, Ron and Rand Paul being some of the worst offenders, have thrown up a lot of crazy stuff over the years which need’s reputing point by point.

Big government? We can’t afford it!
Libertarians point out that America’s deficit spending is unsustainable, and they are right. Even the US GAO (see video here and here) agrees with this assessment. Keep it up and eventually the US will go bankrupt (sometime between 2030 and 2040 mandatory spending will exceed government revenues), most likely taking the British economy down with it and possibly half the rest of the world too. Indeed I’ve written several articles about this issue (see here and here) to hammer home that very point.

But it takes two too tango! Governments get into debt by taxing too little and spending too much. Now in all likelihood I reckon it’s a bit of both, but to the libertarians it’s been caused purely by governments taxing and borrowing too much.

But are they right? Well if they are right, then logically the countries most committed to the “tax & spend like a sailor on shore leave” Kenyesian model should be the ones in the worst financial state with the biggest deficits and highest levels of debt. The Scandinavians states, Norway, Finland, Sweden and Denmark have some of the world’s highest taxes and most bloated public services (thanks to following the so-called “Nordic Model”). And what is the state of their finances? Pretty good actually; Finland with debts equal to 50% of GDP (against nearly 130% for Greece and 92% for the US) a budget in surplus, Norway 54% wt a surplus again, Sweden 42% wt a current budget deficit of 7%, and Denmark 42% of GDP. Now I wouldn’t say everything is rosy in the Scandinavian garden (we’ll discuss that another day!), but clearly these economies are in a far more healthy state than the UK, USA, Greece or Ireland all of whom went for the neo-liberal economic model instead. Indeed its interesting to note that the one Scandinavian country that took the neo-liberal economic route, Iceland up till the 2007 crash, is the very one that’s in trouble!

Another bugbear of Libertarians is government orientated “Central Planning” (say that again in a dark forbidding Boris Karloff sounding voice) and all its evils. Libertarians argue that it is centrally planned economies such as the US under the democrats (whoa! there’s a plan!! Can we see this plan by any chance? I’m sorting hoping this isn’t it) that perform much worse in the long run than those economies that trust to the “magic of the market”. Again, let’s put this claim to the test. Those countries that allowed the markets and the banks to rule the roost (that would be us!) are the very ones in trouble, while the centrally planned economies, such as China (which still puts out those commie 5 year plans can’t get more “central planning” than that!) or India or Brazil, are booming!

In short the facts suggest that if anything Libertarians have everything ass backwards (we should tax and centrally plan more not less!). I would counter that actually it’s more a case that their simplistic, politically naive and fantasy driven world view simply cannot cope with the day to day realities of real world politics, cultural factors and economics. Suffice to say the devil’s in the detail!

Big government get off our backs!…wait is that pink slip for me?
In short what the Tea partiers, don’t seem to acknowledge is that solving the US deficit is going to involve either raising taxes to European levels (as America has European levels of public spending) or drastically cutting public spending or a bit of both. Again they inevitably favour tax cuts and major cuts in public spending to “get big government off of our backs”. What’s the largest piece of discretionary spending in the US budget? ……The Military budget (18% of total government spending!)…..a large proportion of whose employee’s are registered Republicans! Add in the various contractors to the military, a host of corporate welfare programs the US government sponsors (I discuss these a little further here), not to mention farm subsidies, road building contracts, Medicare/Medicaid (again, both basically a massive subsidy to the pharmaceuticals industry) Cut these and you’d find that a lot of Tea partiers and libertarians will be out of a job!

For example, I happened to be looking up Colorado Springs (the very heart land of the tea party) the other day and I noticed a statistic which showed that 25% of jobs in the county are directly linked to “big government” in some way including 8 out of the top 10 employers in the city! Consider also Colorado’s farmers (many of which are large ranch’s owned by the better off) receive $316 million in federal subsidies, that represent’s unsustainable farming methods and a frankly ridiculous farm subsidy systems. And if there’s any Tea bagging plumbers from Colorado (or elsewhere) reading this who say “well I don’t work for Uncle Sam nor do I get any farm subsidies” and how well do you think you’re business would do if +25% of you’re customers suddenly lost their jobs and moved out of the state? Indeed its interesting to note that many right wing leaning states (and in particular the states where the Tea Party is popular like Colorado, Arizona, Kansas, Idaho, Utah etc.) are “welfare queens” (graph on that here), in that they take in more money from Uncle Sam than they pay out in tax! These states would be utterly hammered by Libertarian policies. So much so that they’d probably undergo severe population loss, as without the Federal gravy train effectively subsidising the local economy many residents would have to move out of these states to look for work.

So given how unpopular such policies would be if any Tea Partiers did their sums (fortunately for the Tea Party candidates maths doesn’t seem to be its supporters strong point), it is unsurprising that instead Ron Paul proposes to cut “non essential” things like International development aid, (just under 1% of the total US federal budget), much of which is recycled back to the US companies mentioned above). While 70% goes to US “allies” for “strategic” reasons, the rest of the development aid goes towards various important projects helping the very poorest people on the planet (so he’s basically advocating taking the bread out of the mouths of starving people).

Another favourite target of Ron Paul is the US department of Education (1.3% of the US federal budget in 2010) which he proposes to shut down as well as privatising all public schools (suppose it makes perfect sense to someone who home schools their kids or sends them to an exclusive private school). Most working class Americans simply can’t afford private tuition, and one of the key things schools do in a society is to get the Wee’ins out from under the parent’s feet so that they can get to work. So this would have an immediate and rather negative effect on the economy, i.e. more people on welfare (cancelling out any savings), less people working, never mind the long term effects of American education and literacy rates declining (so bang goes the knowledge economy). And of course there’s the effect on democracy itself. An essential feature of democracy is that is that it requires a well educated and literate populace to keep government in check. If education standards slip further in America then literally democracy itself will be at risk. Does Ron Paul seriously suggest we should sacrifice democracy before his altar to the free market gods?

Ron Paul also want to get rid of the Department of Energy (less than 1% of the US federal budget, would the last one out please turn off the lights….for the entire country!). Granted, post-deregulation by Bush the US DoE is sort of a bloated organisation which no one seems to able to work out what it’s supposed to be doing. However, energy is so critical to a society’s needs, the fact America like the rest of the world will likely face a major crisis this century related to peak oil and climate change, something that will inevitably push energy policy up to the top of the political agenda (if’s not already there, anyone really believe the Iraq war had nothing to do with oil?). All of this points to a need for a strengthened and revitalised DoE, else the sort of new energy infrastructure the US desperately needs will never get built.

Indeed its interesting to note the reasons why the department of energy was founded. It was set up because of the 1970’s oil shocks to coordinate federal energy policy. Also before the US government began “central planning” on this issue (in the 1900’s), energy supplies in the US (with a similar trend in other countries) were erratic and prone to major fluctuations (both in terms of reliability and price) depending on where you were and the current energy situation in a particular area. This was the era of “robber baron” cartels such Rockefeller’s standard oil. Environmental pollution and exploitation of workers (many of them poor recently arrived immigrants) was practially routine. Does Ron Paul really think it would be wise to return to this era on the verge of a global energy crisis?

Other targets in Ron Paul’s sights include the IRS (so people can cheat on they’re taxes without fear….ya that’ll solve the deficit!) and ironically enough the department of Commerce (well given that after a year or two of Tea party/Libertarians in power there won’t be much commerce being done in the US anymore this mightn’t be such a bad idea!). Oh, and Ron Paul also wants to reinstate the gold standard and allow people to keep and trade other commodities as units of currency. Again given that his policies will probably destroy the US economy and render the dollar worthless, it’s probably not a bad idea on reflection!

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