In their 1977 book, “Democracy in Deficit,” economists James Buchanan and Richard Wagner traced the intellectual roots of the rise in postwar federal budget deficits to John Maynard Keynes’s macroeconomic principles, developed in the 1930s.
Keynesianism persuaded policy makers of the benefit of beefed-up government spending via greater deficit spending, and it is largely faulted for the increase in deficits before 1980 but not for the deficit surge thereafter. Deficits over recent decades have evolved into a distorted form of Keynesianism, which the president now proudly touts as “Bidenomics.”
By explaining how deficit spending could abate recessions, Keynes gave it a laudable fiscal purpose not previously recognized. His theories also reduced the political costs of increased spending by spreading the tax burden to unfranchised future voters via federal debt.
“Democracy in Deficit” led to an unrecognized insight: Prior to the advent of Keynesianism, the “balanced-budget norm” held sway. Political prudence mandated that deficits be offset by surpluses in following years. Even Franklin D. Roosevelt raised tax rates in 1935 to lower his deficits—hardly a Keynesian remedy for a depression.
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From George W. Bush on, every president has rediscovered the political value of Keynesianism under the banner of George Gilder’s catchphrase “emergency socialism.” They rationalized unconstrained federal spending as a remedy for existential crises, which early Keynesians never considered because of their focus on recessions. Presidents Bush and Obama justified their hundreds of billions in deficits on the grounds that the world was on the brink of financial collapse. Presidents Trump and Biden rationalized their trillion-dollar deficits as a necessary corrective to a public-health crisis.
George Will is correct: “New York’s rent laws are a gross violation of property rights.” A slice:
In an amicus brief challenging the RSL, the Manhattan Institute and Cato Institute note that New York City’s micromanaging of rental property degrades owners’ rights “to a far greater degree” than did a 1975 California “emergency” law that the court struck down in 2021. This law compelled owners of agricultural properties to permit labor unions, four times a year, 30-day periods of access, for up to three hours a day, for the purpose of soliciting the support of employees. The court affirmed the owner’s property right to exclude.
With policies like those under RSL, politicians can effect indirect wealth transfers without directly voting for them. As Justice Antonin Scalia said of many such transfers, they are “achieved ‘off budget,’ with relative invisibility and thus relative immunity from normal democratic processes.” Such “off budget” financing of public policy is disguised taxation. And it is the taking of private property, which constitutionally requires “just compensation.”
An Institute for Justice amicus brief in the New York City case notes an unsurprising fact: “Rent-control laws have been shown to reduce a city’s housing supply by double-digit percentages.” Artificially suppressing monetary demands for something, and thereby decreasing the incentive to provide that something, is a recipe for getting less of it.
The economic illiteracy of politicians who defend New York City’s RSL regime is an affliction that city voters should correct. Stopping the regime’s gross violation of property rights — affirming the Constitution’s taking clause — is the Supreme Court’s duty.
Ira Stoll exposes ProPublica‘s shamefully biased “reporting” about Justice Clarence Thomas. A slice:
The outlet obtained a photograph of Justice Thomas with documentary filmmaker Ken Burns. It said Michael Bloomberg, the former mayor of New York, was at an event Justice Thomas attended. It presents photographic evidence of that too, though it doesn’t note Mr. Bloomberg’s presence in the caption. And it said Justice Thomas had attended a 2018 event of Stand Together, a network founded by libertarian businessman Charles Koch.
What ProPublica doesn’t say in its 4,500-word piece is that Mr. Burns has described Mr. Trump as “Hitleresque” and “the greatest threat to American democracy since the Second World War.” It doesn’t say that Mr. Bloomberg has called Mr. Trump a “carnival barking clown” and sought the nomination to challenge him in 2020. It doesn’t say that the Koch network is reportedly spending tens of millions to defeat Mr. Trump in 2024.
Why leave all that out? Because ProPublica wants you to think Justice Thomas is in the tank for Mr. Trump. In April it complained: “Thomas’ approach to ethics has already attracted public attention. Last year, Thomas didn’t recuse himself from cases that touched on the involvement of his wife, Ginni, in efforts to overturn the 2020 presidential election.”
“Biden Is NOT the Country’s CEO.”
David Beito applauds the 1939 Frank Capra movie, Mr. Smith Goes to Washington.
“CEO: ‘I’m the One Who Paid the Tariffs. China Did Not.'” – so reports Eric Boehm.
Prasad and [Adam] Cifu described the “act now, data later” mindset so common in medicine and in life today: “We have a problem; we need a solution. We hear the mantra every day. We need to solve this problem now. Ten minutes ago. Yesterday. It is not just in medicine but everywhere.” This mindset, adopted by millions of Americans, is behind every ill-conceived practice instituted during COVID and also behind the increasingly destructive rush to “green energy.”
Steve Hanke tweets out this pointed observation by my late, great colleague Walter Williams: (HT Jay Bhattacharya)
“A caged canary is safe but not free.” – Walter Williams
