Tuesday, August 17, 2010

The Tea Party Manifesto

That's the title of a nice article by Dick Armey and Matt Kibbe in today's WSJ. I've long been a fan of Dick Armey's ever since I met him at one of Jude Wanniski's fabulous Polyconomics conferences some 15 years ago. Not only is he a smart economist and strong believer in free markets and limited government, he's also just a really nice guy. He proved that last point when, as he asked if he might join us at the breakfast table, he offered to bring my wife some coffee. He didn't do that to buy our vote, he did it because it was the right thing to do. And he was the House Majority Leader at the time, if memory serves.

Armey and Kibbe are leading figures behind Freedomworks, a good place to go if you want some informed and well-organized information about what the Tea Party stands for. Here are some excerpts from the article, which I'm sure isn't as good as Armey and Kibbe's new book, Give Us Liberty, which was released today.

Our community is built on the Trader Principle: We associate by mutual consent, to further shared goals of restoring fiscal responsibility and constitutionally limited government. 
Decentralization, not top-down hierarchy, is the best way to maximize the contributions of people and their personal knowledge. Let the leaders be the activists who have the best knowledge of local personalities and issues. 
[The Tea Party] ...demands fiscal policies that limit government, restrain spending, promote market reforms in health care—and oppose ObamaCare, tax hikes and cap-and-trade restrictions that will kill job creation and stunt economic growth. 
The tea party movement is not seeking a junior partnership with the Republican Party, but a hostile takeover of it.
The American values of individual freedom, fiscal responsibility and limited government bind the ranks of our movement. That makes the tea party better than a political party.
I think this is all very powerful stuff, obviously, since it has already shaken up the political status quo in both parties. It's a fresh approach to politics, because it focuses almost exclusively on fiscal issues. As far as social issues, it is limited to an emphasis on individual liberty, which if interpreted correctly can be a very big tent covering folks of many religious and moral persuasions.


Colin said...

I hope you are right about the social issues part, because it's very depressing to me that in the midst of the country essentially being broke and the economy sputtering along that Republicans are most exercised about the 14th amendment and a mosque in NYC. We need to focus on things that matter, such as the deficit, the absurd tax code, social security running in the red this year, the looming disaster that is Obamacare, etc. etc.

Benjamin Cole said...

I hope the Tea Party can overcome the new tradtion of right-wing militarism and occupationism.

Ron Paul predated the Tea Party, and he is one smart hombre. These are the sentiment of Ron Paul, R-TX, libertarian:

"Many of my colleagues argue that Congress cannot put a price on our sacred national security, and I agree that the strong, unequivocal defense of our country is a top priority. There comes a time, however, when we must take stock of what our blank checks to the military–industrial complex accomplish for us, and where the true threats to American citizens lie.

The smokescreen debate over earmarks demonstrates how we have lost perspective when it comes to military spending. Earmarks constitute about $11 billion of the latest budget. This sounds like a lot of money, and it is, but it is a drop in the bucket compared to the $708 billion spent by the Pentagon this year to expand our worldwide military presence. The total expenditures to maintain our world empire is approximately $1 trillion annually, which is roughly what the entire federal budget was in 1990!

We spend more on defense than the rest of the world combined, and far more than we spent during the Cold War. These expenditures in many cases foment resentment that does not make us safer, but instead makes us a target. We referee and arm conflicts the world over, and have troops in some 140 countries with over 700 military bases.

With this enormous amount of money and energy spent on efforts that have nothing to do with the security of the United States, when the time comes to defend American soil, we will be too involved in other adventures to do so.

There is nothing conservative about spending money we don’t have simply because that spending is for defense. No enemy can harm us in the way we are harming ourselves, namely bankrupting the nation and destroying our own currency. The former Soviet Union did not implode because it was attacked; it imploded because it was broke. We cannot improve our economy if we refuse to examine all major outlays, including so-called defense spending."

Sadly, the few Tea Party candidates who address military spending seem all in favor of even more of it.

I much want to vote for a pro-business, reduced military candidate--they are no-see-ums.

Brian H said...

I went to FreedomWorks and signed on - great suggestion - thanks!

Anonymous said...
This comment has been removed by a blog administrator.
Public Library said...

I am reading the 'The Ethics of Money Production'. If you want to understand what is wrong in this country and what needs addressing, understand money production. The book highlights the myths, fallacies, and bold face lies told to support the belief we need a money printing central bank.

Sadly, the Tea Party is a right-wing disguise. Similar to the current right, they simply support limited government in some areas, while expanded government in others is a.ok. They are not really small government folk per se.

Benj you understand this deep down.

The problem begins and ends with the Federal Reserve. There is no need for printed money backed by military force rather than market determined mediums of exchange. The fallacies hold no economic weight.

There has never been a doubt that if we had a choice as a society, we would prefer to trade silver, copper, gold, or whatever was agreed upon instead of paper claims on zero assets. Without the force of law backing paper, paper mediums of exchange never sprung-up and flourished on their own. Think about that.

We have gave up our fundamental right to choose when we let paper money reign supreme. Until you readdress the Fed, the rest is simply irrelevant.

Scott Grannis said...

Public: I won't argue that the Fed is the best way for us to have our money. The Fed has made some grievous errors in recent decades, and they appear to be engaged in yet another. Libertarians have long argued that the private sector could do a better job at creating a sound currency, and I have no problems with that. But our problems do not begin and end with the Fed. We need to rein in the spending in Washington and we need to shrink the size and power of our federal government. Big time.

Benjamin Cole said...

Public Library-

I sure enjoy reading your posts.
I have to admit, I am scared to go sans FDIC, Fed and SEC.

(And thanks for recognizing that I am not a leftie. I wholeheartedly support ratcheting back of social programs, and elimination of HUD and Dep't of Ed, for starters).

There is the reality of "animal spirits." People get emotional, invest accordingly, even in perfect free markets.

I am scared this human aspect of emotion leads to busts--an then we need some artifical mechanism to right the ship again.

Also, is there a major country anywhere that does not have a central bank-fed set-up?

But again, it may be my timidity speaking....

Public Library said...


I agree 1000% the fiscal spending needs reigning in big time. You will never hear me argue against it. However, the reason I believe the Fed is the ultimate culprit is because without money printing, the profligate spending has a very finite existence.

When using physical assets to fund wars and deficits, you truly sacrifice something in exchange. You truly make a decision between this or that and democracy holds-up very well under the pressure.

However, if you enable the banks to print endless amounts of paper, the ability for the fiscal authority to go hog wild is infinite. And the decision between this or that is never made. Sacrifices are made on another mans clock.

Benj, the irony of the central bank is they believe they can outwit the populace with money printing or extraction during times of economic stress. Somehow their divine insight can overcome the irrational behavior of people at the micro level. However, there is no such evidence to suggest they are effective at all.

In fact, evidence suggest to the contrary. People change expectations more quickly than a central bank can implement said policies.

I recommend reading up on sound money policy. It is nice to debunk many of the myths about the necessity for endless money printing.

John said...


I sympathize with a lot of what you are saying. Like Scott says the Fed is not perfect, and we can all talk about what would be. However from my perch I have to deal with what IS and act accordingly. The Fed is with us and it will not go away in our lifetimes.

If one believes we are doomed unless it is liquidated and disbanded one might as well prepare the celler with foodstuffs, guns, ammunition, and small denomination gold coins.

Many are...and have....but not me.

Public Library said...


If the Fed keeps printing money, we will end up like Rome. You can only debase the currency so much before it becomes completely worthless.

We are well on our way and it can definitely occur in our lifetimes. Is it the end of the world. Absolutely not, but you might want a few physicals around when the smoke clears.

John said...


Let me know when you are ready to buy TBT. I've been wanting to for weeks but it keeps falling (TBT= 2X 20 yr treasury bonds).

This fear and flight to treasuries reminds me somewhat of the fall '08 - spring '09 period. I got some of the best values in my investing life then...and we are setting it up again in my opinion.

Shorting the treasury bond may be a good way for those who believe the currency will soon be (virtually) worthless to profit.

If anyone has ideas on timing, chirp up.

Public Library said...

TBT and TYO. However, times are far different than 2008. I expect a much more long and drawn out process than some cataclysmic shakeout.

You already received the once in a lifetime opportunity. The next decade or two will sort out the winners and losers.

John said...


Fair enough.

The next ten to twenty years will tell.