Politics

IPI resident scholar Dr. Merrill Matthews appeared on CGTN’s The Heat to discuss this week’s Democratic presidential debates.

Identifying moderate and former Vice President Joe Biden as both the leader in the debates and as the biggest threat to President Donald Trump, Matthews said, “I still think many Democrats are more on the moderate side and haven’t bought into the far-left proposals expressed by so many of the presidential candidates.”

What did we learn from four hours of 20 Democratic presidential candidates vying for camera time and voter interest? 

1. According to the candidates, apparently the greatest existential threat to America (after Donald Trump) is the large corporations that employ millions of Americans. 

2. Several candidates want to boldly open the door to socialized medicine now; the others want to sneak it in through the back door...

It's pretty clear by now that the Trump administration's favorite way to put pressure on another country to accomplish some political goal is to threaten and impose tariffs. 

In fact, tariffs have become an all-purpose foreign policy tool for the Trump administration. China's theft of IP and unfair business practices? Tariffs. China's supposed currency manipulation? Tariffs. China's trade surplus with the United States? Tariffs.

The US steel industry not doing great? Tariffs.

And now, trying to get Mexico to do more to stem the flow of migrants into the US? Well, tariffs, of course.

Now, the common retort to criticism of tariffs is something along the lines of "Well, at least he's doing something!" Or, "Don't you think we should do something about China's IP theft\China's currency manipulation\hordes of illegal immigrants from Mexico?"

Well, yes, actually. I DO think the president should be addressing all of those things, and I'm glad he is. I just don't think tariffs are the only or the best tool to accomplish those purposes. There are other tools in the quiver besides tariffs.

I thought I was already cynical enough. I guess I was wrong.

Over the years I’ve seen elected Republican politicians telling voters about how strongly they stood for “free-market principles” and then vote in ways that are completely contrary to those principles. I’ve seen it so many times that I didn’t think I could be surprised.

But I was wrong.

After sending out my 29 tweets on local control, which were all theory, I sent out these 14 specific implications of coming to understand that local control is a false doctrine:

That was all theory. Now, implications (1/14) #txlege

The state can limit the ability of municipalities to tax, including property taxes and sales taxes (2/14) #txlege

I'm working on a paper in which I lay out all my arguments against the idea that local control is some kind of sacred government principle, and that states have no right to pre-empt local governments from doing pretty much whatever they want to do.

I had hoped to have the paper done before the start of Texas' special legislative session, but I had hoped to have it finished before the start of Texas' regular legislative session back in January, too, and that didn't happen either.

So I decided to post some of the most important points last night in a series of Twitter posts. But since Twitter must be the stupidest platform for lengthy, organized arguments, I'm posting them here in this blog as well.

This post contains the 29 tweets that lay out the general argument. In a second post I'll list the 14 additional tweets that lay out some implications of the argument.

1. [begin local control rant] #txlege

“Reimportation” of prescription drugs is back as an issue, but only because Democrats seek to distract from the effort to repeal and replace Obamcare, according to Politico. By importation we refer to the ability of American consumers to buy their prescription drugs from overseas rather than from domestic sources, and particularly to large-scale importation, such as US drug distributors sourcing their drugs from overseas.

There has always been some cross-border traffic on pharmaceuticals, as drug prices in Canada can be cheaper than in the US. But the Medicare Part D prescription drug benefit, which came into effect in 2006, has significantly reduced this traffic by making prescription drugs available to seniors at more affordable prices.

There’s a reason why such importation is illegal today under most circumstances, and that’s because of safety. The rate of counterfeit drugs in other countries is staggering, and the only way to keep the counterfeit problem from infecting the US drug supply is through the rigorous inspection and supply-chain regime maintained by the FDA. And the FDA has repeatedly told Congress that it cannot guarantee the safety of drugs entering the US from other countries such as Canada, since it does not inspect those facilities. And when the FDA has been permitted to inspect overseas facilities, the results haven’t been encouraging, such as the extensive and discouraging history of the FDA with Indian pharmaceutical manufacturer Ranbaxy.

Some on the free-market side of the political spectrum argue that importation of prescription drugs is simply a matter of “free-trade,” which at least up until the last few months has been a persuasive argument when presented to Republicans. But, as professor Richard Epstein notes in an IPI publication noted below, importation of prescription drugs is actually a perversion of free trade, in that it rewards other countries for their price controls and socialized medicine systems, rewards them for their disregard for the patents of American drug companies, and would likely create shortages of much needed drugs in poor countries as their drug supply was diverted back to the US.

One of the tidbits contained in the just-released intelligence report about Russian interference in the US election is a section on other Russian propaganda activities, such as Russia’s propagandizing against fracking in the US.

The report says:

RT runs anti-fracking programming, highlighting environmental issues and the impacts on public health. This is likely reflective of the Russian Government’s concern about the impact of fracking and US natural gas production on the global energy market and the potential challenges to Gazprom’s profitability.

This hit close to home for me. In 2014, when my nearby city of Denton was voting on a ban against fracking within city limits, I got very involved. Two of the most vocal and ubiquitous leaders of the fracking ban were UNT professor Adam Briggle and a truly unhinged Twitter activist who goes by the name @TXSharon.

Both Briggle and @TXSharon appeared in interviews on RT regarding the Denton fracking ban. These interviews were used to promote the ban and to give credibility to these otherwise non-credible activists. Here’s Briggle on RT, and here is @TXSharon on RT.

Of course, the story of the Denton fracking ban is fairly well-known. Despite efforts by IPI and many others, it passed on the strength of voting by college students and professors, but was overturned by the Texas legislature before it even had a chance to lose in court. And the city of Denton eventually overturned it.

We said at the time that these activists were willingly allowing themselves to be used as tools of Russia in its attempts to discourage fracking in the US, and we were right.

I was honored to learn this morning that The Village Voice had included me in their listing of the "10 Worst Rightblogger Ideas of 2016."

Here’s a link to the piece, and here’s the money quote:

“Local control is not a trump card that allows municipalities to restrict economic freedom,” declaimed Tom Giovanetti at the Institute for Policy Innovation. Get outta here with this “consent of the governed” bullshit — we’re talking about money!

The macro context here is what Village Voice views as those nutjob libertarians and their insistence on economic freedom, and the micro context is the debate over cities like Austin, Texas regulating Uber out of the city. Village Voice sees this as democracy in action, of course, while I see it as the tyranny of the majority infringing on the economic freedom of the average guy.

Now, I’m being a bit tongue-in-cheek here, of course, but since you know a man by his enemies, I’m delighted that the lefties at the Village Voice find my arguments to be ridiculous.

In a few weeks we have another policy change coming out of Washington—this time new regulations on money market funds—that seems almost intentionally designed to cause harm to the private sector and to slow economic growth. I’m starting to wonder whether this is simply more Big Government incompetence or something more insidious?

I tend to attribute most failures of government to ineptitude rather than conspiracy. There’s no reason to think the average government employee is any wiser or more knowledgeable than the average person in the private sector—in fact, there’s every reason to believe otherwise, since various federal protections make it harder to weed out incompetent federal employees.

But suppose for a moment that I am wrong—that at the highest levels of the most important federal agencies, there are actually devilishly clever people playing the game several moves ahead of the rest of us. Making moves that are vital to the survival of their most cherished and most useful institution—the federal government—regardless of the impact on the American people.

That scenario might be more probable or less probable, depending on your degree of cynicism, but it hinges on a defensible premise—that the interests of the federal government and the interests of the American people are NOT the same thing. The federal government is not a proxy for the country. As Ronald Reagan said in his first inaugural address, “We are a nation that has a government—not the other way around.” It’s said that the smartest thing the Devil ever did was convince people he didn’t exist. Well, the smartest thing the federal government ever did was convince the American people that its interests are their interests. The truth is, the federal government is the most powerful special interest in America.

So if you’re the federal government, what is your greatest threat? Not war or terrorism, because war and terrorism have proven to be windfalls for federal government growth. Almost certainly the single most important institutional concern of the federal government today is managing its own debt, which has risen to an unimaginable $19.4 trillion dollars. Interest alone on the debt is now one of the largest line items in the federal budget, and so servicing its debt and avoiding insolvency is as important to the federal government as it would be to any business or household.