Categories
Economics

Speech

(given September 13th at and event with Larry Sharpe)

Hello All.  My name is Michael Madrid and I’m running for US Congress as the Libertarian candidate against Jerrold Nadler.  I hope everyone is having a great 2020.  We are certainly living in interesting times.

Interesting times like 2020, I’ve found, are not naturally conducive to running for office as a Libertarian.  We’re accused of being like Atheists in a foxhole and suddenly finding the religion of government handouts.  While this is not actually true, it is the optimistic take.  The other take is that we ignore the clarion call of DO SOMETHING, and mutter under our breath something like just let the market work.  Unadorned, this message seems cold, passing the buck, dereliction of duty almost.  We need to change this perception, to embellish this message to show that yes we Libertarians care very about the well-being of society, and it is precisely because we care that we want the government to do less.  Only then, can we make the case against those who want to radically increase government involvement in our lives. Only then can we convince people that yes we want universal healthcare, but not medicare for all, and yes we want to prevent climate change, but don’t think the Green New Deal can possibly achieve that.

We are a can-do nation, and when there’s a serious problem, we expect people of authority to step up. and who has more authority than the government? As we know therein lies the problem.  

Even under the best of circumstances, with the best intentions, power is easily misapplied.  I’ll give an example from a situation where many of us have some power, though we often feel powerless, and that is parenting.

The second time I took my twins ice skating was when they were six. They had enjoyed it the previous year so I figured they’d be fine after a short refresher. My son Julius was fine. My daughter Isabela wasn’t.

For whatever reason, she just couldn’t find her balance. I told her to take it slow. I held onto her. We went along the barrier. I reminded her how well she skated last time and now that she’s a year older and more co-ordinated so she should be fine. Logic sometimes works on six-year-olds, certainly more than on Twitter certainly, but not this time!

The more I talked, the more we got frustrated. Here was my child, for whom I’ll do anything, in distress, and somehow I can’t help her. She won’t let me help her. Do I yell at her? Do I make her sit in the corner and watch Julius and me until her attitude improves?  How draconian am I gonna have to get?

I skated away. It felt irresponsible, yet I realized no good could come from staying. So I skated away and hoped for divine intervention. And it came.  Intervention at least.   As it turned out, I didn’t need the supernatural, just some 8-year-olds! In the short time it took me to do a lap, a group of kids saw Isa crying and huddled around her. By my second lap, they had taken her under their wing. By the third lap, it was off to the races.

The lesson here is that even with authority and the best of intentions, there is no guarantee that you can do any good.  But maybe someone else can. As Barack Obama said in his 2009 inauguration speech, “it has been the risk-takers, the doers, the makers of things — some celebrated, but more often men and women obscure in their labor — who have carried us up the long rugged path towards prosperity and freedom”.  I’d like to add 8-year olds to that list.

When the government doesn’t skate away, we get examples like Helen Chu.  She’s the infectious disease expert who had been swabbing people for flu in January when the US had its first covid case.  She wanted to repurpose her swabs for COVID and tried desperately to get approval from the CDC and other authorities, but couldn’t.  On February 25th she went ahead anyway and confirmed what she feared: covid was widespread.  Even then, the CDC refused to skate away and approve her tests, instead championing its own, contaminated test.  This delayed our testing efforts by weeks.

In 1980, the MTA was forced to skate away because of a transit strike. Enterprising individuals filled the gap by providing dollar vans.  Even after the strike, the vans persisted because they offer faster, cheaper, more flexible service.  To this day they cost $2, 75 cents less than MTA buses, and ARE the transit system in areas the MTA doesn’t run.  As the MTA faces a huge budget shortfall, we should consider whether it makes sense for it to skate away from buses altogether.

If there are any silver linings to the COVID crisis, it has convinced government to skate away from restricting telemedicine, from requiring out-of-state and foreign health care providers to get re-licensed, and from restricting hospitals ability to expand, to name just a few.  Hopefully, there’s no going back and this will allow enterprising firms and individuals to provide better healthcare post-crisis.

We must cherish these examples, add to them, and always have at the ready so that the message is not that we Libertarians don’t care, but that we urge restraint because we truly want better outcomes.

We can further bolster our case by pointing out the harm that results when government doesn’t skate away.  If you’re talking to a big government fan, ask their opinion on the military budget and foreign wars, corporate welfare, PPP, or the drug war and the prison system it engenders.

This gets into another part of the message. We have shown how even when the government is virtuous and selfless, it’s often not in a position to do the right thing.  But government decision-makers are never selfless.  

Why?  Because people are self-interested and special interests will always try to insinuate themselves into the most well-meaning of legislation, which is why we continue to get fleeced by military contractor, and prison operators, and all the big business who profited off of PPP. Unless legislation is simple, transparent and focused, the chance of passing something that won’t get subverted is slim.

If someone tries to tell you that capitalism has made government self-interested, ask them to rewatch the Chernobyl series. One of the most poignant scenes is when the plant owner is discussing the test which leads to the explosion.  He’s imploring the plant manager to run the test so he can finally get people off his back, and he offers the incentive of a better position. quid pro quo.  The manager accepts and we know what happens next.  Expecting your socio-economic system to get people to stop being self-interested is not gonna work any more than conversion therapy.  You cannot make people into something fundamentally they are not.  If you try, the behavior will just go black-market — with dire results.

Aren’t businesspeople self-interested, greedy even?  And since business requires profit above and beyond its cost, isn’t that something which is always going to make things more expensive than need be?

Yes, business people are greedy, like all humans.  The beauty of markets, which we need to yell from the rooftops, is that if we ruthlessly cherish competition, and prevent cronyism from rigging the rules, self-interest is beneficial.

Competition means that if I try to raise prices, my competitors will undercut me.  It means if I want to increase my profit, my only options are to offer a more appealing product or cut my costs.  We see this wherever competition is allowed.  If we were here 100 years ago, we’d probably be talking about food prices, which were 20% of household budgets back then.  We don’t, because markets solved food production, food is ubiquitous and costs have fallen.

This doesn’t happen with big expensive government programs, where bad outcomes lead to calls for ever greater funding.

The message I have presented so far has been one of subtraction.

There are a few policies where I think we need to add as well as subtract. I will highlight the one I feel most important. But I think you will see that even though we are adding something, the end result will be much simpler government than we have today.

That policy is basic income.  We live in a very disruptive world, and the type of market-based capitalism we espouse disrupts jobs and careers even without a pandemic.  Basic income allows those disrupted the chance to get back on their feet. Done properly, it can be paid for by replacing existing programs and will result in a radical simplification of the way we do safety net, where currently we have literally hundreds of need-based federal and state programs.  It also helps us argue against restrictions that hold back markets.  When people clamor for ever higher minimum wages which as we know at some point leads to job loss, we can say not necessary because we have basic income.  When people clamor for more subsidies because the coal miners or the farmer are gonna starve, we can say nope, they’re covered by a basic income. And when special interests clamor for $2 trillion of PPP and airline bailouts. Sorry, basic income.

I know there are some in our community who view basic income with suspicion.  I’d like them to carefully consider the arguments I’ve just given.  It was arguments like these which had led Libertarian economist such as Friedman and Hayek to support basic income.

Even if you don’t believe basic income as a final destination, consider that we are on a ship going in the wrong direction towards ever more government.  This is a simplification that clearly is going in the right direction and has been gaining appeal in an electorate that otherwise often regards us as crazy anarcho-capitalists.  We need to win over that wider group if we are to turn the ships around.  Once we’re headed in the right direction it will become much clearer whether basic income is an optimal endpoint or a step to an even better place.  And that’s why I think it should be part of our message, along with skating away, and why I think it rounds out my platform as I campaign to Simplify government. 

I didn’t enter this campaign expecting to win. But I do want to make a point, and help articulate a message we can build on. I spend a lot of time out on the streets campaigning and talking to people. Even in my deep blue district, where there is a bias towards big government, many people realize things have gotten too complicated. They are ready for something new. I have talked on a couple of Yang Gang podcasts — the reception has also been wow, these ideas make a lot of sense. But key to getting them there been stepping back from proposals like M4H and Green New Deal, and stressing that yes we want the same goals, it’s just our approach is different. If we can show people that their concerns are front and center when we say smaller government, when we say Simplify , we’ll have a lot of converts.

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