Libertarians Need to Keep Out the Crazy

The libertarian movement needs to police itself.

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In this column, I have previously written about "reform  conservatism," and today the spotlight is going to be on the most explicitly libertarian conservatives who want to see the Republican Party change. Their plan is called "libertarian populism," and it holds some promise if libertarians can make sure they don't let the fringe define their politics.

The basic idea: Republicans have become too supportive of "big business" and have allowed large corporations to use big government to stifle competition and make life unfair for the little guy. This does free markets a disservice and also does Republicans a disservice when they claim to support free markets in theory, but fail in practice. (One example they like to cite is of giant banks that benefit from government regulations.)

The "populist" angle seeks to rebrand libertarianism away from the Ayn Rand flavor it has recently developed: no longer a philosophy for the cream of the economic crop, libertarianism can now be used to help everyone, particularly those in the struggling American middle class.

Tim Carney has a list of some libertarian populist proposals, and some of them are very good. Cut the payroll tax? Yes! Less restrictions on food trucks? Sure! These should become part of the GOP economic package.

[Read the U.S. News debate: Is the GOP's Problem in its Strategies or its Policies?]

Now, I am not sure if this is enough to rebrand the whole Republican party (see Will Wilkinson here on that), but with libertarians part of the Republican party's big tent, it is important to take their best insights and apply them.

So I implore advocates of libertarian populism: can you please do some internal policing to make sure we get some "good libertarians" pushing these policies instead of the "bad libertarians"?

For those of us outside of the libertarian camp, it sometimes looks like there are some libertarians who aim to apply free market policies to achieve broad prosperity in society, and then there are libertarians who promote disreputable economics and racially tinged history. These are the divisions that stand out to me, as someone who is not part of the libertarian fold:

[See a collection of political cartoons on the Republican Party.]

Good libertarians: Focus on cutting taxes that affect low-income earners. Scrapping the payroll tax (again, as as Tim Carney has suggested) is a very good example of this.

Bad libertarians: Want a flat tax. They would cut taxes, but in the process, raise taxes on the poor while cutting taxes on the rich. Ramesh Ponnuru explains how Kentucky Republican Sen. Rand Paul's current flat-tax plan would do that:

Paul's economic plan includes a 17 percent flat tax to replace the current income tax. The effect of such a policy would be a bigger bill for a lot of middle-class households. The median income for a family of four is $65,000, and under the current tax code – assuming the family takes the standard deduction – its federal income-tax bill would be about $2,700. Under the plan Paul sketches, it would be about $3,500.

A single mother of one making $35,000 a year would see her tax liability rise, too. If she uses the standard deduction, she pays about $1,500 today. She'd probably pay $2,100 if Paul had his way.

[Read the U.S. News debate: Is There a Republican 'War on Women'?]

Good libertarians: Think that the Confederate States of America was not a force for liberty and acknowledge it is morally repulsive to defend the right of states to form a nation based on an economy of chattel enslavement. They also tend to understand that the Civil Rights Act of 1964 was necessary because Jim Crow laws functioned as an anti-free market cartel and that it was appropriate for government intervention to be used to end segregation at private businesses.

Bad libertarians: Think that Abraham Lincoln was a tyrant and that the war was not "really" about slavery. Ron Paul frequently gave dog whistles in that direction, and a Rand Paul staffer was recently fired because of his pro-Confederacy views.

Good libertarians: Defend the existence of the Federal Reserve (while acknowledging its flaws) and support moderate inflation in the short term to help the economy. The best libertarians support Nominal GDP Level Targeting. The economist who has done the most to promote this is Scott Sumner. CNBC host Larry Kudlow is the most prominent supply-sider to come around on this topic.

Bad libertarians: Want a gold standard or some other way for America's monetary base to be tied to hard commodities (or as they should be referred to: rocks in the ground). This is a view that is unfortunately much more common than it should be. The prevalence of this view is disheartening given how much data has been collected to show how inflexible monetary standards are bad for economies. (It is no surprise that the Euro is leading Greece to ruin. The Euro is what a modern-day gold standard would look like.)

[Read the U.S. News debate: Has the Federal Reserve Overstepped its Mandate?]

I bring up these issues partly because of a recent dust-up over the Rand Paul staffer, but I would hate for any libertarians to think I am singling them out for bad behavior here.

Unsightly and unhelpful fringe elements are something with which every political movement deals. National Review famously had to write the John Birch Society out of the conservative movement. In 1989, the authors of the seminal "Politics of Evasion" made a fact-based case for liberals to ignore their own fringe elements within the Democratic Party, laying the foundation for Bill Clinton's presidency.

I don't think it is too much to ask for libertarians to do more self-policing of their ranks to make sure that the confederate sympathizers, hard money advocates and regressive tax-cutters are not influential in their movement. This will be great policy from an objective standpoint and will also make it easier for the actual substantive policies of "libertarian populism" to be separated from the problematic elements of the libertarian movement.

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