There’s lots of interest in Michele Bachmann’s interview with the WSJ editorial page’s Stephen Moore, but what I think’s particularly interesting about it is that part of Bachmann positioning herself as the rightmost candidate in the field is that she wants to practice incredibly savage generational warfare:

Her big challenge is whether the country is ready to support deep spending cuts. On this issue, she carries a sharper blade than everyone except Ron Paul. She voted for the Paul Ryan budget—but “with an asterisk.” Why? “The asterisk is that we’ve got a huge messaging problem [on Medicare]. It needs to be called the 55-and-Under Plan. I can’t tell you the number of 78-year-old women who think we’re going to pull the rug out from under them.”

Ms. Bachmann also voted for the Republican Study Committee budget that cuts deeper and faster than even Mr. Ryan would. “We do have an obligation with Social Security and Medicare, and we have to recognize that” for those who are already retired, she says. But after that, it’s Katy bar the door: “Everything else is expendable to bring spending down,” and she’d ax “whole departments” including the Department of Education.

If you’re old, then Bachmann thinks there’s an “obligation” for you to keep your health care and pension benefits. But not only do those of us born later than 1956 have no right to decent health care and pension when we are old, but if we’re right now relying on student loans to make college affordable, that’s going to be cut. If you’re a parent relying on Medicaid to cover your autistic child’s treatment, you’re out of luck. If commute to work and are hoping America continues to have a viable transportation infrastructure, you’re out of luck. Absolutely everyone born after 1956 is going to be subject to immediate draconian cuts in the programs we benefit from, while we’re supposed to believe that nobody born earlier than that will suffer even the slightest bit.

Earlier in the interview she’s going on about Ludwig Von Mises and Milton Friedman, but the actual economic agenda here is rather different from small government as such. It’s all about who’s the right kind of people and who’s not.

Paul Krugman is shrill on the idea of controlling health care costs by rolling back Medicare:

It’s a mystery why anyone claims that shifting more people into private insurance is a good idea. Actually, no, it isn’t a mystery; it’s an outrage.

This is one situation in which I think it’s unfortunate that debates about the best way to organize public services get bound up with debates about redistributive taxation. The primary organizing principle of the contemporary conservative movement is the idea that it’s difficult for rich people to get a fair shake in tax policy debates, and someone needs to stand up for them. And obviously the need to finance a Universal Medicare program through taxation could become the vehicle for substantial redistributive taxation. But the point underscored by Krugman’s chart is that Medicare being a good deal for the vast majority of people isn’t dependent on the assumption that rich people will be picking up the tab. It’s simply more efficient to organize an insurance function with the largest possible risk pool.

In lieu of substantive commentary about banks scrambling to avoid regulatory definition as too big to fail (until they’re on the verge of failure, of course) I wanted to write about the fact that though it’s little-discussed today the United States of America was substantially forged as a result of a massive bailout.

The setting was New York City, then-capital of the then-new United States of America in the fall of 1789. The Revolutionary War had been won years ago, but the constitution was brand new. What’s more, the war had been a long one. A long one financed primarily by state governments. And one financed with a large degree of debt. That debt took two forms. To an extent, both the Continental Congress and state governments took out loans, and then used the money raised by loans to pay for things. And to an extent both the Congress and state governments found themselves paying soldiers with promissory notes. Fight now, and when we win the war we’ll pay you back. Of the course of the war years, the value of those promissory notes had often declined sharply below face value. Liquidity constrained soldiers and veterans had sold their notes for cash money to late 18th century vulture investors.

In his “report on public credit”, Alexander Hamilton proposed a kind of double bailout. First, all debts owed by state governments would be assumed by the federal government which had greater fiscal capacity to raise taxes without wrecking the economy. Second, with all the debt consolidated under federal aegis, the debt would all be paid off in full to the present owner of the paper. James Madison objected to both such bailouts. On the one hand, he felt that there was no reason citizens of less-indebted states should pay the debts of more-indebted ones. And on the other hand, he felt that though an obligation existed to fulfill Congress’ commitment to actual Revolutionary War soldiers there was no reason that hardworking people should be taxes to pay the full face value of securities owned by speculators.

Ultimately, Hamilton’s view prevailed and the debt was consolidated and paid. Yet Madison’s arguments about fairness seem unimpeachable. Here we are taxing a nation of farmers to transfer wealth to bond speculators. Why do that? But Hamilton’s argument that acting swiftly and decisively in this regard would establish the credit of the United States, give America access to capital, and ultimately boost the prosperity of the nation seems amply vindicated by history. And here were are, over 200 years later, citizens of a country with the very best credit in the world poised on the brink of an easily avoidable debt default as a side-consequence of dangerous political brinksmanship.

A little bit of followup on the Mercatus Center study that says Californian have drastically less freedom than South Dakotans courtesy of a reader:

I wanted to see if their index of freedom was actually linked to any positive outcomes (e.g., life expectancy, per capita GDP, industry R&D) or negative outcomes (e.g., suicides per capita, income inequality) based on Census data.

In a nutshell, the results were not good for the libertarian cause. The Mercatus Institute’s freedom score was significantly linked to (by state)- lower educational attainment (measured by percent of Bachelor degrees or higher), lower population density, lower per capita GDP, increased infant mortality, increased accident mortality, increased incidence of suicide, increased firearm mortality, decreased industrial R&D, and increased income inequality.

You can see the data here. Now of course I wouldn’t put too much stock in that result, either. It’s just important to keep in mind that while public policy is important, it’s not the be-all and end-all of human existence. New York City has a lot of regulations in place (it’s generally illegal to dance in a bar, for example) but there’s lots of stuff you can do there that you can’t do in Indiana.