Monday, May 4, 2009

Liberty Loses A Champion

We lost a lover of liberty on Saturday with the passing of Jack Kemp. From the WSJ today,
Along with Senator William Roth of Delaware, Kemp proposed a 30% across-the-board tax cut. Though the Democrats who ran Congress combined with Old Guard Republicans to defeat it during the Carter Presidency, a GOP candidate by the name of Ronald Reagan liked what he saw. Reagan largely adopted Kemp-Roth as his own, campaigned on it in 1980, and the proposal eventually became the basis for the 25% income-tax cuts that finally took effect in 1983 and became the most successful domestic policy achievement of the modern era. The Kemp-Reagan policy mix of lower taxes to lift incentives, sound money to break inflation, and regulatory relief to unleash entrepreneurs became the foundation for the prosperity of the 1980s and 1990s.

Kemp's ideas and legacy continue to be relevant for today's Republicans, even if few of them seem to recognize it. The financial meltdown and recession have given President Obama a chance to revive a policy mix of higher spending and taxes, intrusive regulation and easy money. If those policies don't result in a sustainable expansion -- and history argues that they won't -- then Americans will again be looking for other ideas. Full article here
Kemp was a Republican, but his ideas were not about politics. He understood the value and morality of voluntary exchange markets. He understood that taxing away the income of the people to finance the schemes of the 545 leads to economic morass and concentration of power in the hands of the few.

Isn't it strange that BHO and his partisan supporters decry voluntary exchange markets, claiming that markets concentrate economic power in the hands of capitalists? Yet, all we have to do is look around to see that just the opposite is true. Voluntary exchange is, after all, voluntary. Government power is achieved through threat of and use of force. Which sounds moral to you?

Voluntary exchange markets are the most egalitarian, liberating, field-leveling social institutions ever devised. Barred by law from use of compulsion, markets require that buyers compete with other buyers to get what they want. Sellers must compete with other sellers to get the business of buyers. Voluntary exchange markets require that participants vote with their offers to buy and sell each and every time, offering value for value to get what they want.

Contrast voluntary exchange with politics. Politicians compete only in a tightly controlled game every few years for the votes of people who have extremely limited choices---choices from among those anointed by the major party power brokers. Politicians---funded by taxing the income of people who are productive--- concentrate economic power in the hands of the very few, the 545.

Jack Kemp understood that voluntary exchange coupled with lower taxes returns power and prosperity to the people. BHO and his supporters are evidently oblivious to this simple, historical truth.

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