Whole Foods Republicans. Brilliant!

Whole Foods Republicans. The line in Tuesday’s Wall Street Journal by Michael Petrilli of Stanford University’s Hoover Institution is simply brilliant. Here’s an significant chunk of what he wrote:

        ...yes, many shop at Whole Foods, which has become a symbol of progressive affluence but is also a good example of the free enterprise system at work. (Not to mention that its founder is a well-known libertarian who took to these pages to excoriate ObamaCare as inimical to market principles.)

        What makes these voters potential Republicans is that, lifestyle choices aside, they view big government with great suspicion. There's no law that someone who enjoys organic food, rides his bike to work, or wants a diverse school for his kids must also believe that the federal government should take over the health-care system or waste money on thousands of social programs with no evidence of effectiveness. Nor do highly educated people have to agree that a strong national defense is harmful to the cause of peace and international cooperation.

Actually, I’m more of a Central Market Republican, but the difference is probably slight. As such, it’s almost personally embarrassing to me that I didn’t think of this first. John Mackey may not be on the party rolls per se, but as his writings show, he’s very much one of us—and his headquarters is literally right down the street from me.

Much of the rest of Petrilli’s column is about a dangerous anti-intellectual streak within the party as a whole, so to get firmly on his side, I’ll now dive right in. This year’s Nobel Peace Prize was so silly that it probably ended any remaining significance that award had, but the Prize in the Economic Sciences is quite apt here. Oliver Williamson and Elinor Ostrom won for their separate-but-related work in the New Institutional Economics. Ostrom's selection was particularly salient for the cause of human freedom. As I recently wrote elsewhere, in work dating back to her PhD dissertation in political science in 1965, Ostrom has focused on explaining how, contrary to Garret Hardin’s infamous assertion, the commons is actually usually not a tragedy. Rather, her meticulous research into thousands of case studies showed how self-governance by users of common resources quite frequently works, and why it doesn’t when it doesn’t.

That’s a long way from the bossy nanny-statism of the Obamanista crowd in Washington. The collective approach doesn’t require the “public option,” much less the public instruction that thou shalt carry insurance for this-that-and-the-other-thing, or diktats over what terms your mortgage must carry. A little nudging might be tolerable, even useful, as our Tory colleagues in the UK might agree, but commandeering the command heights of what could be the most dynamic sectors of the economy—health care, finance, and the new automotive business—just plain isn’t.

So what does this mean in Central Texas? Travis County has tended, over the past few years, to elect not just Democrats to office, but Democrats with no meaningful sense of the value of taxpayers’ money. Is there any other way to explain how Capital Metro manages to cover just 17 percent of its budget with actual fares from paying customers? Note that this outfit then decided that it needed to add trains that don’t run, much less run on time.

So how did they manage to pull that over on the taxpayers? A great part of the trouble here in Central Texas lies with the lack of credibility that the local GOP has with those Whole Foods Republicans—we are perceived not as offering more sensible ways to manage the commons, but as simply saying ‘no’ to whatever the locally dominant party proposes. That has worked for a long time in Texas’ 14th federal congressional district, but it’s not likely ever going to work around Austin. (Someone tell the governor that he didn’t do us any favors vetoing the three-foot bicycle safety bill.) To take control here, we need the hard work of politics: public dialogue, policy development, and campaign strategy relevant to an electorate that can be shown the benefit of conservative approaches to conservation, and smart ideas about management of public assets.

Across the United States, support for the Obamanistas is plummeting—but without better ideas, we’re so far short on picking up the gains. Simply put, we need Whole Foods Republicans running for office.

Taking on crankiness one statewide election at a time.

Ken Mercer, the Republican incumbent in seat #5 on the State Board of Education, sent out a message this morning laying into his primary challenger Tim Tuggey, a law firm partner and a former chairman of San Antonio’s transit board. This message, in particular, bears some analysis and commentary. In laying in, Ken lays out two major grievances:

Tim Tuggey gives money to Democrats. Ken specifically takes issue with Tim’s donations to Democrat politicians and organizations over the past few years, with personal checks to federal representative Chet Edwards, Texas senator Kirk Watson, and the federal Democrat Senatorial Campaign Committee. Ken has a reasonable question to ask there, and could do so in that debate that he has requested. That said, I might already have an answer to this below. Read on.

Tim Tuggey is a “lawyer-lobbyist.” Ken doesn’t like lawyers much—heck, even lawyers make lawyer jokes—but he really doesn’t like lobbyists. So Ken writes that

        Conservative Republicans agree that a 'lawyer-lobbyist' should never run for public office. In our 2010 debates, I will call on Mr. Tuggey (and his supporters) to share and debate his bizarre definition of "Conservative."

I’ll first recommend that any sitting member of the Texas Board of Education learn the conventions of English capitalization. That’s conservative, as he’s using it in that sentence. (If Ken’s native language were Spanish, I might cut him some slack, but I’m fairly certain that’s not the case.) For guidance, I recommend consulting section 7.19 of the Chicago Manual of Style, 14th edition. (I’d send him to the 15th edition, but I’ve so far been too cheap to update my library.)

Still, as a Republican who’s also a pretty conservative guy, I’d like to know just why lobbyists shouldn’t ever run for office. Section 27 of Article 1 of the Texas Constitution—our Bill of Rights—guarantees that

        The citizens shall have the right, in a peaceable manner, to assemble together for their common good; and apply to those invested with the powers of government for redress of grievances or other purposes, by petition, address or remonstrance.

Those of us who live in Austin can easily go in person to yell at those so invested. Those in Texarkana or El Paso have a longer drive ahead of them. Moreover, if lots of people around the state have the same grievance, it may just be economically efficient to organize into an interest group, and to hire someone to do that grieving for them. It might even make sense to hire a lawyer to do it—lawyers usually know something about how government actually works, and they frequently look good in suits. So there should be no surprise that we have lawyers and lobbyists in Texas (like in almost every decently-governed country in the world), and that some of those lawyers and lobbyists are (gasp) lawyer-lobbyists. Thus, we actually do need these lawyers and lobbyists, and I can’t think of any legitimate profession whose members in Texas are prohibited from public office. Maybe Ken can help us out with that. He’s on the Board of Education, after all.

That gets me back to the issue of those donations to Democrats. I haven’t spoken with Tim about that, but I might wonder as well. It’s just possible that some of his clients are Democrats. That wouldn’t be shocking—some of my clients are Democrats, and I’m neither a lawyer nor generally a lobbyist. Heck, I even have friends who are Democrats. So maybe Chet or Kirk or someone on the DSCC shook Tim down. I don’t know, but Ken can ask that question if he wants.

So Tim gives money to Democrats, and he might be the useful butt of lawyer jokes. All the same, I still have more than sufficient reason for endorsing his candidacy in the primary:

Ken Mercer is a crank. Ken is a creationist, and he has been wasting a lot of the board’s time with fights over the specific language of educational standards that are never going to find their way into a classroom. That’s right—never. That’s because the vast majority of Texas public school teachers aren’t so stupid as to recycle logical fallacies about Piltdown Man. Intelligent design is an important concept, but when I was in high school, I got my theology in theology class, and my biology in biology class. Texas public schools don’t generally teach theology (no surprise there), so discussions of this issue should be pretty limited.

Crankiness is eccentricity taken to obsession over a single subject. Ken would do better trying to assert a link between vaccines and autism, or extolling the economic merits of a gold standard. Those are lame ideas short of theory and evidence as well, but at least they’re objectively provable. His cranky creationist rants don’t belong on the board, and as such, neither does he. If we Republicans are going to continue to thrash the Democrats across Texas—including rolling into Travis County—we need officeholders with some intelligence and design behind their viewpoints and policies. And that’s why we need Tim Tuggey.

On running anti-vaccination nonsense out of the Party

As I wrote in my last column, that meeting of the Travis County Republican Party last month was entertaining and enlightening, though not for the reasons that every speaker might have hoped. Talking publicly, I noted, is a good way of cajoling your friends in the silent majority into collective action. Leaving an open microphones with one faction too long can have a different effect, and one that we need to correct.

In addition to the gold standard diatribe—with that surreal moment in which one of the anarcho-libertarians started reading in Maoist fashion from some book by Ron Paul—we also suffered through a 20 minute lecture on the dangers of widespread vaccination. This was the report, it was characterized, of the coalitions committee, which was trying to forge alliances with a number of anti-vaccination groups. Most of the report was a recitation of the two-page backgrounder on the topic (which I’m not reproducing here in full only because I don’t have an electronic copy). The whole episode led to the lodging of a point of order, as at least one of us assembled had the sense that we were listening to recycled John Birch Society propaganda from the 1950s.

But rather than just name-calling, I should get to the substance of the backgrounder. The intellectual case for the assault on widespread vaccination programs rested on four “Select References from the Peer-Reviewed Medical Research Literature,” which I’ve slightly reformatted here for readability and consistency:

• Russell L. Blaylock (2008a), “The Truth Behind the Vaccine Cover-up,” Medical Veritas 5, pp. 1714-1726
• Russell L. Blaylock (2008b), “Review. The danger of excessive vaccination during brain development: the case for a link to Austism Spectrum Disorders (ASD),” Medical Veritas 5, pp. 1727-1741.
• M.S. Petrik, M.C. Wong, R.C. Tabata, R.F. Garry, and C.A. Shaw, “Aluminum adjuvant linked to Gulf War illness induces motor neuton death in mice,” Neuromolecular Medicine 9(1), pp. 83-100
• Russell L. Blaylock (2003), “Interaction of Cytokines, Excitotoxins, and Reactive Nitrogen and Oxygen Species in Austism Spectrum Disorders,” Journal of the American Nutraceutical Association 6(4), pp. 15-32

Ah, The Truth—it’s out there, Scully, is it not? We should immediately wonder about any journal named Medical Veritas. We should also immediately be concerned that most of the case is based on the writings of one Russell L. Blaylock, whose reputation we don’t know. The journal Neuromolecular Medicine is at least published by Springer Verlag, but the article on something about aluminum is not obviously connected to the issue of vaccinations; since the references weren’t footnoted, we really can’t have any idea.

Indeed, I checked with a polymath colleague who happens to be a PhD epidemiologist and the director of the public health program at Michigan State University. As a former military intelligence officer, he also runs the critical thinking skills course for FBI intelligence at Quantico. As he put it,

        Your initial impressions are correct. The Medical Veritas site is bunk dressed up to look 'academic.' The claimed association between vaccines and autism spectrum disorder has been well debunked. These folks get bogged down in confirmation bias and not appreciating that correlation is NOT causality. The second site is difficult for me to properly assess as I know almost nothing about these topics. However, I can find no serious publications in JAMA or NEJM that even reference them.

I did manage to find a single article in the Journal of the American Medical Association (JAMA) that referenced a single article in the ‘Nutraceuticals’ publication, but that’s not an encouraging count.

I am far less an expert on vaccination, but I do know crankiness when I see it. Mass vaccination programs have wiped out diseases that used to wipe out millions. Remember smallpox? If you don’t remember it personally, you can thank vaccination programs for that. And thus, this has got to stop. Our efforts to move Travis County from the Blue to the Purple and then to the Red will founder if we can’t remove this kind of nonsense from our platform.

Why a little monetary economics does and doesn't matter in Travis County, Texas

Last night’s meeting of the Travis County Republican Party was delightful for lots of reasons: the Obama jokes, the weird presentation about vaccines, and the update on the impending demise of ACORN. For me, though, most invigorating was the discussion of monetary policy, not for what it accomplished, but for what it signaled. Talking publicly, I am increasingly discovering, is a good way of cajoling your friends in the silent majority into collective action.

The party, that is, was considering a resolution of support for two bills before the federal congress, collectively termed the “Federal Reserve Transparency Act”. I wasn’t thrilled with any of it (and more on that later), but at least offered a motion to strike the first paragraph:

Whereas, throughout its nearly 100-year history, the Federal Reserve System has presided over a significant decline in the value of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power.

What was the problem? It’s simple: if you think that a 95% decline in the value of the dollar over 95 years is a problem, then you haven’t worked out the math, I explained. I had worked out the math, and told the room that the implied rate of inflation was just 3.26 percent over that near-century. Not bad performance over such a long haul, compared to other central banks, the brainlessness of Fed policy in the 1930s and 1970s excepted.

This led to howls of indignation from a few of the cryptolibertarians in the room. This resolution, after all, really wasn’t for them about accountability. It was about their general dislike of central banking and the supposed evils of fiat currency. Zero percent inflation, one of them asserted, was the only worthy goal, and the only way to achieve that was on a gold standard.

Uh, no. Not even close. It isn’t possible on a gold standard, and even if it were, it wouldn’t be good. To paraphrase Edmund Burke, that which is not possible is not desirable, so that which is neither, shouldn’t much be contemplated. If you still think so, then you missed most of your introductory macroeconomics class. So here goes the lesson, which I provided in brief last night.

Sustained Inflation is not the problem; unexpected inflation is the problem. If sustained inflation is moderate, but anticipated, then our collective rational expectation of such allows us all to plan for it. The concept of rational expectations is a big deal: one Robert Lucas of the University of Chicago got a free trip to Stockholm in 1995 for working out how it affects macroeonomics. Contracts get indexed and investors raise their expectations, demanding more cash in the future than otherwise. In the end, sustained low inflation is only a problem for someone who thinks that his mattress is a suitable investment vehicle. Most all of us are beyond that, so we all make out fine.

Deflation is a much more problematic than (expected, low) inflation. Labor costs may be sticky, so it's easier to cut real pay by simply forgoing a nominal pay increase than to tell staff that “you’re all getting a three percent pay cut—but don’t worry, it’s just a nominal cut.” Try that one at a site organized by the United Auto Workers. More generally, tolerance of deflation can be very problematic. As Milton Friedman and Anna Schwartz pointed out in their Monetary History of the United States, the recession of 1929 turned into the depression of 1931 in large part because of the Federal Reserve’s inaction. As demand dropped sharply, the board continued to pursue a tight money policy, fearing the ills of so-called “speculators,” when it should have been easing short-term credit to encourage investment in technically successful sectors. As Barry Eichengreen argued in his book Golden Fetters: The Gold Standard and the Great Depression, 1919-1939, this was largely due to slavish adherence in the US and France to the gold standard. Countries that dropped it early recovered economically much faster.

Aiming for low inflation is a widely accepted aim amongst central bankers everywhere. If you’re still wondering why Ben Bernanke is so vigilant about the possibility of deflation, you could read his book too. We call the idea the Bernanke Doctrine today, but it’s almost globally accepted amongst monetary economists that central banks have two main roles: guarding against both deflation generally, and unexpected spikes in positive inflation. While this isn't part of the law governing the federal reserve, it's now de facto practice, and opposed in Congress basically only by Ron Paul and Bernie Sanders. (Isn’t that a combination?) It is even the legally defined aim of the European Central Bank, which may say something about the Euro’s long term potential as a reserve currency. (I may just start collecting those cute little coins.)

So, what’s the alternative to fiat money? Average inflation determined by the rate of gold mining. If you still think that central bankers are somehow the problem, consider the mechanics of the ballyhooed alternative. Remember William Jennings Bryan and the silver standard talk of the 1890s? That was a big deal at the time because the global supply of gold was growing more slowly than the global economy as a whole. That is, the money supply itself (as so many countries were on a gold standard) was growing more slowly, and thus year-on-year deflation of about 2 percent in the US had set in. Farmers’ debts in the US were denominated in nominal dollars, so their real interest payments were increasing year-on-year. One can imagine why they were torqued. Then, in 1896, gold was discovered in the Transvaal, the money supply started growing again, and inflation resumed at a rate of about 2 percent per annum. So, under a gold standard, the long-run money supply is determined by the pace of gold mining in the world, and today, this substantially occurs in South Africa and Russia. [I thank Brad Delong of the University of California at Berkeley for this observation. I don’t often find things to thank him for, but this is one.] But heck, if you’re content to let monetary policy be determined in the capitals of one-party states masquerading as democracies, then go for it.

And just for a sanity check, how many currency areas have gold standards? None. That's right: zero. No one does this. If you think that it’s a good idea, you have a very high empirical and theoretical hill to climb.

All this argument aside, the motion failed, by about 24-37, after which I was the lone person in the room to vote against the entire resolution. I was asked afterwards why, and gave too explanations, either of which would be sufficient. First, if one did want an audit of the Federal Reserve Board, the so-called Government Accountability Office is not the organization to provide it. I was delighted a few years back when the name was changed from Accounting to Accountability, because accountancy really isn’t what it does. I can’t imagine that group trying to audit bank books. But if that’s not scary enough, consider the outcome of having, as one of the fed-haters in the room recommended, the currency controlled directly by the federal congress. [Eek!] That’s universally taught as a the worst possibly idea, as it subjects technical debate on the volume of money to the payola and horse-trading of politics. That sort of thing might be suitable in Zimbabwe, but certainly not in any decently governed country—and it isn’t.

Of course, there’s a bigger question as to why the county party is debating federal monetary policy. If Texas were a fully independent republic again, we’d have to deal with this. As Mark Wynne of the Dallas Federal Reserve Bank observed on the eve of European monetary union in 1999, the economy of Texas differs significantly from that of the other 53 states and territories, and as such, there is some reason to want a Texas dollar. If we had one, it sure wouldn’t be backed by gold, but we don’t have one (at least not yet).

In short, we should be spending our time crafting and publicizing policies over which Texans (and particularly central Texans) have near-term control, and avoiding talking loudly about stuff that’s outside our expertise. We can be conservatives and win elections. We just can’t do it if were cranks.