Explanations for Proposed Planks for LPMN Platform (Working Paper)
By Mike Holly, Americans Against Monopolies
The industry planks of the current platform of the Libertarian Party of Minnesota are not libertarian but rather even more extreme right than those of the traditional Republican Party. The planks more extremely oppose specific monopolies in the public sector while failing to oppose specific government regulations favoring monopolies and oligopolies in the much larger private sector. This is effectively limiting the opposition to the government policies that deny people the freedom to compete in the problematic health care, pharmaceutical, education, public utilities, energy, tech and banking industries.
The mission of my organization Americans Against Monopolies is to demonstrate that powerful special interests are lobbying politicians for preferential government policies used to create monopolies and oligopolies throughout the entire economy, in both the private and public sectors. The initial focus is on the nation’s top lobbying and most problematic industries: health care, prescription drugs, education, public utilities, energy, tech and banking. I am also formulating ways to eliminate these policies to promote free markets. Policies that deny economic freedom to people must be eliminated.
Government policies favoring monopolies and oligopolies in both the private and public sectors are likely the root cause of America’s economic and societal problems. They are likely the cause of the extreme wealth disparity by limiting opportunity, and increasing costs and/or lowering quality endured by consumers. The wealthiest 10 percent of families hold more than 75 percent of the wealth. However, politicians, economists and the media are misleading people into believing that markets are responsible for creating monopoly power in the private sector. Many Americans are now turning to fascism and socialism in their fight against the elites of industry and government.
Republican Party platforms have tacitly supported regulations favoring private sector and also global monopolies like OPEC, while clearly opposing regulations creating public sector and labor monopolies. As Nobel Prize-winning economist Milton Friedman once said “almost every businessman is in favor of free enterprise for everybody else, but special privilege and special government protection for himself.” The reaction to the Republican Party by those denied economic freedom and the benefits of free competitive markets has been to seek more government protection. The Democratic Party platform offers to eliminate or at least counter private sector monopolies with even more government regulations, some of which create public sector and labor monopolies.
If libertarians truly sought liberty and free markets, they would oppose government regulations favoring monopolies in both the private and public sectors, regardless of the perceived magnitude of the economic effects. However, the Libertarian Party of Minnesota platform focuses almost exclusively on the total elimination of public sector and labor monopolies: government health insurance programs, public education, publicly-owned utilities, public transportation, the Postal Service, public entertainment facilities, unions and the Fed. Meanwhile, the platform ignores government regulations favoring monopolies and oligopolies in the private sector of industries and also globally: the medical professions, hospitals, private health insurance, Big pharma, non-profit private schools, privately-owned utilities, Big Oil & Gas, OPEC, wind and solar power, electric cars, tech giants and Big Banks. Even though many libertarians realize government creates monopoly power, the Party is tacitly supporting crony corporatism like Republicans.
Late last year, I proposed to the executive committee of the Libertarian Party of Minnesota that they consider new planks that oppose regulations favoring private sector monopolies. Although they set up a platform committee to formulate and consider changes to the platform, they opposed the planks and I suspect are telling party members that they rejected the policies on their merit. However, aside from a few policy criticisms that were readily countered, they offered mostly excuses that the planks were too long, too specific, too divisive, too restrictive for candidates, unnecessary, and rejected by the majority. The majority offered no feedback and then just said “no.”
The leadership of the Libertarian Party of Minnesota demonstrated the platform is by design (not ignorance). Clearly, they don’t seek to solve America’s economic problems caused by regulations favoring private sector monopolies, or remedy the loss of economic freedom and free markets. Perhaps, this can be explained by the large numbers of disenchanted Republicans and conservatives that have been joining the Libertarian Party. Maybe, Party leaderships lacks the courage to take on the powerful special interests or they see fewer personal opportunities if they do.
Regardless, I will present the following seven planks to convention members to find out where the Party stands:
HEALTH CARE PLANK
Current Plank on Health Care
In order to insure the best possible health care, we advocate the deregulation of the health care industry. Government intervention, restriction, and protectionism in the health care industry has driven up costs and decreased the supply of doctors, nurses, technicians, hospitals, and medical insurance. We advocate replacing compulsory or tax supported plans to supply health services (f)or insurance with voluntarily supported efforts.
Proposed Plank on
In order to reduce outrageous medical costs that are indebting Americans, companies and the nation, and to improve quality, we seek to increase competition in the monopolistic industry through deregulation. Regulations drive up prices by restricting the supply of doctors, nurses, technicians, hospitals and insurance, and by increasing demand with tax support of insurance plans. We support elimination of occupation licensing in states, including lifting more restrictions on nurses and other mid-level practitioners. We oppose state regulation of medical education that accredits and limits enrollments at schools and training programs. We oppose state certificate-of-need and similar laws that restrict the supply of medical facilities. As competition reduces prices, we support eliminating tax-supported insurance plans, including Medicare and Medicaid. We oppose the regulation of insurance, including compulsory plans that force the healthy to subsidize the sick like the Affordable Care Act and restrictions on pre-existing conditions.
Comments on Current Libertarian Party of Minnesota Platform on Health Care
The Party is committing political hypocrisy and suicide by clearly advocating for the elimination of tax-support for insurance plans including the Medicare and Medicaid buyer monopolies in the public sector, while ignoring the outrageous prices and the specific government policies causing them by creating oligopolies of practitioners, hospitals and insurance companies in the private sector.
The following are problems within each sentence of the current platform on occupation licensing and health care:
(1) The “elimination of protectionist occupation licensing and mandatory certification laws” isn’t offered specifically for health care. A special policy is needed because most people consider medical practitioners differently than most other professions like barbers. Perceived market imperfections may include consumers requiring some licensure laws to assure medical professionals have been adequately trained before they cut into them. There are currently no countries, states or regions that can serve as a model for eliminating licensing. The total elimination of medical licensing laws throughout the U.S., or even Minnesota, is likely politically infeasible at this time and would likely damage the credibility of any politician proposing it.
(2) The call for deregulation in the current platform isn’t clear on what specifically is being advocated for health care, especially since the term deregulation can mean the elimination of one or all government regulations. The next sentence says “government intervention, restriction, and protectionism in the health care industry has driven up costs.” But it doesn’t say how it is doing it and specifically what needs to change. It also greatly understates the problem by not saying how much particular costs are rising or even whether government is the main driver of costs. A definition and significance of the problem is first needed to give specificity and urgency to reform, before formulating and advocating solutions. Like education, goals should also include competition.
(3) In addition to providing no explanation for how “government intervention, restriction, and protectionism in the health care industry has increased costs,” there is also no explanation for how it has “decreased the supply of doctors, nurses, technicians, hospitals, and medical insurance.” This sentence needs specificity, especially since the medical industry often tries to deflect blame. Is government intervention referring to regulations and paperwork required by government and private insurance companies? Is it saying these regulations and paperwork are discouraging the entry of more doctors, nurses, technicians, hospitals, and medical insurance? Doctors have also blamed rising costs on malpractice lawsuits, which has resulted in some 30 states passing regulations limiting damages for negligently maimed patients. The difficulty of proving the causes of health care problems necessitates the elimination or phasing out of as many specific regulations as possible.
(4) Many people probably don’t understand what is meant by “We advocate replacing compulsory or tax supported plans to supply health services (f)or insurance with voluntarily supported efforts.” The LPMN shouldn’t try to hide its views but rather just come out and say what they support and oppose, and explain why. It supports voluntary health insurance schemes (where the decision to join and pay are voluntary), including private and employer-based. The LPMN opposes compulsory government health care plans including Obamacare and regulations preventing insurance companies from raising rates for pre-existing conditions. The LPMN also opposes tax supported government plans including Medicare and Medicaid. These policies will not be popular without moderations and/or explanations.
Comments on the Positions of Libertarian Party Presidential Candidates on Health Care
Political candidates cannot be relied upon to oppose powerful medical special interests without the backing of the Party and its platform. Some Libertarian candidates have called for the elimination of medical licensing, but most including Libertarian Presidential candidates Jo Jorgensen and Gary Johnson seem to have avoided the issue. Libertarian Presidential candidates Gary Johnson and Jo Jorgensen largely avoided supply issues, instead focusing on government and private insurance. Republicans have supported private doctor and hospital oligopolies, while seeking to cut costs by promoting private insurance with less coverage and limiting malpractice awards. Democrats have supported public monopolies or nationalization, starting with insurance, while seeking increased government coverage with price controls that further erode quality.
During the 2012 and 2016 campaigns, Libertarian presidential candidate and former Republican Governor Gary Johnson proposed slashing popular programs for the disadvantaged, like Medicaid, Medicare and Social Security, while hardly mentioning medical monopolies. Gary Johnson should not have been trying to slash tax-supported plans without also reducing prices. In 2020, Libertarian Party Presidential Candidate Jo Jorgenson claimed the cost of health care can be reduced 75% by allowing real price competition and by substantially reducing government and insurance company paper work. She claimed control must be put back in the hands of the patient by eliminating employer insurance and having insurance companies cover only unexpected costs. Jorgensen should not have been telling the private sector what to do.
Libertarians should not be eliminating the market-based insurance of America’s workers. Moreover, the private sector has already devised a wide range of medical plans, such as catastrophic and high-deductible plans, meant to bring down insurance costs by covering only unexpected costs. Catastrophic health insurance is a type of health plan that offers coverage in times of emergencies, as well as coverage for preventive care. Catastrophic health plans typically come with low monthly premiums and a high deductible. The IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. In 2017, 43.2 percent of adults under the age of 65 were in high-deductible plans.
Comments on Proposed Libertarian Party of Minnesota Platform on Health Care
The proposed health care plank corrects the failures of the current plank by:
- presenting health care as a problem that must be solved especially since it has been bankrupting the nation (green),
- gets beyond the use of the broad term deregulation (that can mean the elimination of just one regulation), and (like education) presents health care as a monopolistic industry in desperate need of competition (blue),
- recognizes that restricting supply creates monopoly power and drives up costs, and explains how government regulations have driven up costs and decreased supply (purple),
- opposes specific government regulations restricting supply, creating monopolies and driving up costs (black), and
- explains what are compulsory and tax supported insurance plans, and that they drive up demand and costs (dark orange).
(1) The first sentence should read “In order to reduce outrageous medical costs that are indebting people, companies and the nation, and to improve quality, we seek to increase competition in the monopolistic industry through deregulation.”
Health care is America’s most problematic industry. Since the 1960s, health care prices have skyrocketed at twice the rate of the consumer price index. Prices charged by hospitals and doctors are increasing by far the fastest. Health care bills are an outrageous rip off and the largest contributor to financial stress and personal bankruptcies. Exorbitant medical bills in the United States play a huge part in personal bankruptcies, accounting for about 40% of the filings last year. 137 million Americans are struggling with medical debt. U.S. companies are burdened with the enormous cost of providing health insurance for their employees, a stark contrast to international competitors like European businesses. America has the highest health care costs in the world and it is the number one barrier to global competitiveness. The costs are bankrupting the country as the leading contributor to the $20 trillion plus national debt, through spending on Medicare, Medicaid and Social Security. Continental Western European countries typically receive health care at prices from doctors and hospitals that are less than one-half of those in the U.S. and they spend less than one-half as much per person on health care overall. Comparisons to Europe indicate the U.S. has been wasting about two trillion dollars per year.
In the U.S., quality is also dubious as malpractice lawsuits against doctors have skyrocketed. The nation, and especially the rural and poor urban areas, has experienced unmet demand for doctors in preventive care, geriatrics, house calls, cost management, computerized medicine, entrepreneurism, medical supply, environmental protection, public-health services, mental institutions, drug programs, military and foreign service, and pandemic control.
(2) The second sentence should read “Regulations drive up costs by restricting the supply of doctors, nurses, technicians, hospitals and insurance, and by increasing demand with tax support of insurance plans.” The two major parties started the “health care cost crisis,” as well as the “malpractice crisis,” in 1965 by increasing demand with the passage and social spending of Medicare and Medicaid, while restricting supply and creating monopolies (and oligopolies) of doctors, nurses, technicians, hospitals and later medical insurance. Medicare and Medicaid increase demand by paying the bills of those covered. People are less likely to forgo treatment if their bills are supported by the government. In 1972, the Journal of the American Medical Association reported that, “The average patient load and the average volume of units of patient care for the average physician has increased dramatically in the last five to six years. Medicare, Medicaid and the increased coverage of medical and hospital insurance have produced a skyrocketing rise in effective demand for medical services…the demand could be met only by the existing number of physicians providing more units of patient care.”
Doctors and hospitals account for most of health care costs while the net cost of health insurance is only about 7 percent of total health costs. Continental Western Europe has much lower health care costs because they have 40% more physicians and hospital beds per population. There is no evidence to support the prevailing economic theory in the U.S. that “physician supply can create its own demand” (i.e., which means increasing the supply of doctors and hospitals will just motivate them to convince “ignorant” consumers to order more unnecessary and expensive health care).
(3) The third sentence should read “We support elimination of occupation licensing in states, including lifting more restrictions on nurses and other mid-level practitioners.” The LPMN should admit to supporting the unpopular policy of eliminating medical licensing in the health care section of the platform but explain why and how it should be phased out. The scope of nurses and other mid-level practitioners can be expanded, along with the elimination of entry barriers on foreign-educated doctors, and limits on practicing medicine across state lines and telemedicine. Another possible approach could be local pilot demonstrations that provide models for licensing-free medical marketplaces.
(4) The fourth sentence should read “We oppose state regulation of medical education that accredits and limits enrollments at schools and training programs.” Even the total elimination of medical licensing can’t solve the supply problem because state policies also restrict the training of medical practitioners. The AMA accredits and limits medical schools and the training of students, while the ACGME accredits and limits the number of graduate medical training programs. The health professions are the most restrictive, even deny opportunities to the highly qualified. Professions like engineering are inclusive of most everyone that can do the work. So as to not discourage new students from pursing the health care professions, subsidies (e.g. vouchers) may be needed to maintain a level playing field with past graduates who have already had their currently very expensive education subsidized. But subsidies shouldn’t be granted directly to medical schools, but rather follow only students, to promote admissions and competition at medical schools. Subsidies should be phased down or even out on a per student basis, especially as medical education becomes more competitive.
(5) The fifth sentence should read “We oppose state certificate-of-need and similar laws that restrict the supply of medical facilities.” States use certificate-of-need and similar laws to limit the supply of hospitals and other medical facilities. Certificate of Need laws are state regulatory mechanisms for establishing or expanding health care facilities and services in a given area. A state health planning agency must approve major capital expenditures for certain health care facilities. Certificate of Need programs aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Nearly 40 states have Certificate of Need laws. While Minnesota does not have a certificate of need program, it maintains various approval processes that function similarly to Certificate of Need. The 2004 state legislature established a public interest review process for hospitals seeking exceptions to the state’s hospital bed moratorium law.
(6) The sixth sentence should read “As competition reduces prices, we support eliminating tax-supported insurance plans, including Medicare and Medicaid.” A perceived market imperfection is the elderly and poor require subsidies due to the high costs of medical care and their limited incomes. Subsidies should be reduced and eliminated as competition reduces prices for health care services and wealth disparity is alleviated through free markets in all industries. Some other insurance policies used to control medical costs at the expense of quality should be phased out as the supply of doctors and hospitals is increased. The LPMN should oppose the use of buyer monopoly power by Medicare, Medicaid and large companies (e.g., HMOs) to effectively set price and quality controls on providers, shift costs onto others, and promote insurance and provider monopolies. It should support repeal of the ERISA Act, which exempts employee health benefit plans offered by large employers from lawsuits brought by people denied coverage. It should probably also oppose tax-deductibility for group premiums, although individuals can also deduct medical expenses to a degree. These policies force other insurance and provider companies to merge to improve market power for negotiation of prices. The primary barrier for an insurer looking to enter a new insurance market is building up a provider network that can offer discounted prices and spread risk. The supply of practitioners and hospitals should be allowed to expand.
(7) The seventh sentence should read “We oppose the regulation of insurance, including compulsory plans that force the healthy to subsidize the sick like the Affordable Care Act and restrictions on pre-existing conditions.” The LPMN should oppose compulsory plans that force the healthy to subsidize the sick such as Obamacare. Rates for some consumers, like the sick and older people, should not be subsidized by other consumers, like the healthy and younger people. Rates increased by pre-existing conditions are often not large and, when they are, could be more fairly subsidized by charity or government, especially as competition reduces prices. The LPMN should also oppose government regulation of private health insurance. The insurance industry has been concentrated and even monopolized in many states. Some insurance companies claim the complexity of multi-state regulations has prevented them from entering new markets. A perceived market imperfection is consumers need some protection, especially regulations requiring insurance companies to have adequate capitalization to cover losses. If elimination of state regulation of health insurance is politically infeasible, the LPMN should support the LP national policy calling for the elimination of laws preventing people from purchasing health insurance across state lines, which prevents consumers from seeking coverage from states with less regulation.
Current Plank on Drugs
Proposed Plank on
We recognize the government grants protections from competition to pharmaceutical companies developing prescription drugs so they can recover development costs, most of which are from clinical trials whose costs should be reduced by increasing competition in the health care industry. In order to reduce unreasonable prescription drug prices demanded by the already highly-profitable global pharmaceutical industry especially as the cost of clinical trials decreases, we seek to eliminate monopoly protections. We support reducing patent lifetimes and extensions, the discriminatory awarding of patents favoring synthetic drugs, non-patent protections, research grants, and preferential enforcement of regulations by the Food and Drug Administration.
Comments on Current Libertarian Party of Minnesota Platform on Prescription Drugs
The Party is committing political suicide by ignoring the unreasonable costs of prescription drugs caused by the government awarding long-term drug monopolies to pharmaceutical companies in the private sector.
Comments on the Positions of Libertarian Party Presidential Candidates on Prescription Drugs
Political candidates cannot be relied upon to oppose Big Pharma without the backing of the Party platform. Gary Johnson didn’t appear to have a policy on prescription drugs. Jo Jorgenson proposed to remove regulations enforced by the Centers for Disease Control (CDC) and Federal Drug Administration (FDA). She wanted to get rid of the efficacy requirement of the FDA, if not the FDA entirely, so consumers can get treatments and test products as quickly as possible. She noted it takes up to 10 years and costs over a billion dollars to bring a drug to market. She also noted the response of the CDC and FDA to the coronavirus failed, while South Korea succeeded. However, it is doubtful many voters want to be sold drugs that aren’t proven to work. Eliminating the FDA entirely would result in also eliminating even drug safety recommendations, which would be even more unpopular and likely why she won’t say it directly. Reducing regulations would likely be helpful but, like Trump, she makes no attempt at the very difficult task of determining which regulations should be eliminated.
Comments on Proposed Libertarian Party of Minnesota Platform on Prescription Drugs
The following are the advantages within the two sentences of the proposed platform on prescription drugs:
(1) The first sentence recognizes “the government grants protections from competition to pharmaceutical companies developing prescription drugs so they can recover development costs, most of which are from clinical trials whose costs should be reduced by increasing competition in the health care industry.” The research and development of new drugs is often expensive, while mass production is often much cheaper. This creates the potential market imperfection that new drugs may need to be awarded temporary patent monopolies to recoup their investment in development. However, if health care costs were reduced through competition (as prescribed in the health care plank), protections from competition could be more readily reduced for prescription drugs without sacrificing development. Most of the development cost is due to the high costs of clinical trials inflated by working with the outrageously expensive U.S. health care delivery system.
(2) The LPMN should support reducing “unreasonable prescription drug prices demanded by the already excessively-profitable global pharmaceutical industry as the cost of clinical trials decrease,” by eliminating “monopoly protections by reducing patent lifetimes and extensions, the discriminatory awarding of patents favoring synthetic drugs, non-patent protections, research grants, and preferential enforcement of regulations by the Food and Drug Administration.” The drug industry is reaping excessive profits from extreme prohibition of competition caused by long patent lifetimes and other policies. As the cost of clinical trials falls, the solution involves eliminating the following five policies awarding monopolies to the global pharmaceutical industry after extensive lobby efforts:
(2a) The LPMN should support reducing the lifetime of drug patents and eliminating extensions. A drug patent term is 20 years from the date a pharma company applies for a patent. The maximum term extension is five years, provided that the extension does not result in a total remaining patent term of more than fourteen years. This 14-year period is measured from the date the drug product received regulatory approval up to the date of patent expiration (with term extension). As Robin Feldman explains in his 2019 book “Drugs, Money, and Secret Handshakes,“ the government is awarding pharmaceutical companies with monopoly power through overly generous drug patent protections from competition.
(2b) Synthetic drugs should not receive monopoly patent right advantages over natural medicines and nutraceuticals, especially if clinical trials are needed to prove claims. The ultimate norm for any medicine is nontoxicity, effectiveness, specificity, stability and potency. Herbal medicines are often considered less potent than synthetic drugs but also less toxic or having less side effect. The problem is the development of natural medicines are discouraged by the high cost of clinical trials and the inability to patent. As a rule, raw natural material is generally rejected for patent approval by the USPTO. The Court has ruled that as long as the medicine or organism is truly "man-made," it is patentable. Rachel Kreppel found clinical trials are not adequately protected by current forms of intellectual property and should be recognized as a form of intellectual property.
(2c) The LPMN should oppose policies that award drug monopolies through non-patent protections. Patents and exclusivity work in a similar fashion but are distinct from one another and governed by different statutes. Exclusivity refers to certain delays and prohibitions on approval of competitor drugs available under the statute that attach upon approval of a drug. A new drug application or abbreviated new drug application holder is eligible for exclusivity if statutory requirements are met.
(2d) The government should retain patent ownership of drugs discovered and developed with taxpayer money. In 1980, Congress passed the Bayh-Dole Act, which allows universities to patent drug discoveries made from publicly funded research. The government does not usually support the further work needed, such as costly clinical trials, to develop the drug to the point of being useful. Instead, it allows and encourages universities to license the patents to private firms to do so. The universities get money from licensing the invention, and the companies they license make profits on successful drugs. The problem is grants create monopolies and government and Universities often award grants discriminately.
(2e) The FDA should be relegated to only making recommendations, instead of regulations. The FDA has been making preferential approvals of drugs and other medical products that indicates possible payoffs by companies in the private sector. In his 2017 article “Regulatory Discretion and Corruption in the FDA,” Jetson Leder-Luis claims the FDA has been marred by numerous scandals because corruption blooms where transparency and accountability are lacking. Yet the FDA has vast discretion over the regulations it sets, incredibly loose restrictions on the money it can receive from industry, and little public accountability. Drug companies spend heavily on lobbyists to influence FDA approval policy. Furthermore, the FDA suffers from a pervasive “revolving door” problem: many FDA administrators, either before or after their time at the agency, receive payments from, and sit on the boards of, large pharmaceutical companies.
Current Plank on Education
In order to achieve the best possible opportunity of education we advocate bringing the positive benefits of competition to the monopolistic government schools. Therefore we call for the privatization and deregulation of schools. Also we call for the repeal of compulsory education laws, truancy laws, school and teacher certification and licensing laws, and taxpayer financing of education.
As an interim measure we advocate tax credits for any individual or business sponsoring a person’s education, equal to the amount of that assistance. We also support open enrollment and the expansion of Minnesota’s charter school program which allows parents, students and educators to independently set up semi-autonomous schools operating under reduced public authority.
On principle, Libertarians call for the eventual complete separation of government and education, and call for an immediate end to state mandated curricula, including but not limited to: the Profile of Learning, Goals 2000, and School to Work.
Proposed Plank on
In order to reduce skyrocketing costs for K-12 and higher education that are squeezing taxpayers and families, and achieve the best possible opportunity of education, we advocate bringing the positive benefits of competition to the monopolistic public and non-profit private schools. Therefore we call for the privatization and deregulation of schools. We call for the repeal of compulsory education laws, truancy laws, school and teacher certification and licensing laws, and taxpayer financing of education." We recognize the potential need for alternative financing for students if families and charity prove insufficient sources. In the interim, we oppose state K-12 competition programs that produce higher test scores from students attending public schools by regulating and providing less funding to non-profit and especially for-profit private schools.
Comments on Current Libertarian Party of Minnesota Platform on Education
The Party is committing political hypocrisy by advocating for the elimination of the monopolistic public schools, while ignoring the monopoly power granted to the non-profit private schools of religions and the rich through tax incentives. The Party is committing political suicide by completely ignoring the skyrocketing costs of higher education offered by oligopolies created with appropriations to public colleges and tax incentives for non-profit private colleges. Perhaps, this is because the private sector is larger in higher than K-12 education.
Admittedly, the current education plank is better than the current health care plank because it:
- gets beyond the use of the broad term deregulation, and presents education as a monopolistic industry in need of competition (blue), and
- opposes specific government regulations restricting supply, creating monopolies and driving up costs by opposing teacher certification and licensing laws, and taxpayer financing of education (black), and
However, the following are detailed explanations of the problems within each of the six sentences of the current platform on education:
(1) The first sentence on K-12 public schools is failing to represent and advance the Party’s goals, because it fails to recognize the need to give urgency for reform by warning about the extreme cost and quality problems at K-12 schools, and also colleges. The first sentence of the current platform on education greatly understates the problem, because it portrays an education system that just needs to be improved to become the “best,” rather than a system that is ripping off taxpayers and families. Moreover, the problem is at both K-12 public and non-profit private schools and also colleges. The monopolies and oligopolies of non-profit public and private schools dominating elementary and secondary (K-12) and higher education are taking advantage of a lack of competition to demand outrageous and skyrocketing prices from taxpayers and college students. Politicians from the two major parties have suppressed supply and competition by awarding limited numbers of non-profit public and private schools with preferential government subsidies. These subsidies have rendered for-profit schools as uncompetitive.
(2) The second sentence on K-12 public schools is failing to represent and advance the Party’s goals, because it fails to recognize the need to first reform existing K-12 pilot voucher programs that are subverting the move to privatization and competition by preferentially subsidizing schools in the order of public, non-profit private and for-profit. They simply demonstrate that more subsidies result in higher test scores. Privatization, deregulation and competition should be the goals, but must first be proven in K-12 pilot programs that are currently rigged to fail. In addition, it isn’t clear what specifically is being advocated, since the term deregulation can mean the elimination of one or all government regulations. The problem is privatization and deregulation have yielded even worse results (e.g., test scores) than public schools. This failure has been caused primarily by preferential subsidies favoring public schools and secondarily by non-profit private schools receiving tax breaks, compared to far less for private for-profit schools even after the inclusion of vouchers. Vouchers awarded by states currently average only $4,000 to 5,000, which is a fraction of the national average of appropriations awarded to public schools of $12,000 to 14,000 (i.e., Minnesota falls within this range). Another problem has been that states have regulated the private schools. The initial step toward showing privatization and deregulation works should be to create competition by levelling the subsidies to all three types of schools in pilot programs and deregulating. Eventually, privatization, deregulation and competition can be achieved by stripping tax breaks from private non-profits, in addition to repealing appropriations for public schools.
(3) The third sentence on K-12 public schools is failing to represent and advance the Party’s goals, because it fails to recognize the need to appear credible by providing reasoning for repeal of popular laws requiring children to attend school. Most voters are likely uncomfortable with repealing compulsory education and truancy laws, especially without good reasoning. Proponents sometimes argue parents should be responsible for their own children. But children can’t depend on parents, and certainly can’t be responsible to make their own decisions like adults. These laws were initially passed to improve literacy rates and discourage child labor abuses. Today, students face many family problems including alcohol, drug, physical and mental abuse, divorce and single parents, and poverty. A sentence or two is needed to explain and defend the repeal of compulsory education and truancy laws. As for the other listed policies, teacher certification and licensing laws should be repealed after competition is realized. The elimination of taxpayer financing of education is fine as a goal, but can’t be done politically at this time as suggested in the current LPMN platform. It could be argued that the repeal of taxpayer financing would also include tax incentives for non-profit private schools, but the next sentence advocates for an interim solution of tax credits that favor the wealthy and the sentence after that advocates for reform of public schools. Some claim non-refundable tax credits are not taxpayer financing because no new taxes are needed, rather less taxes are paid.
(4) The fourth sentence on K-12 public schools advocating for “tax credits for any individual or business sponsoring a person’s education” fails to represent and advance the Party’s goals, because it would inappropriately allow the wealthy and businesses to control the K-12 education of students from poor and middle-class families. The LPMN agrees with most policymakers that students and their families can’t currently afford education and thus some government funding is needed in the interim before the elimination of taxpayer financing of education. There must be realistic financial policies for assuring that all students have access to a quality education, and children cannot currently rely on financing from their parents or charity. However, the current interim solution raises many questions. Besides the potential inequity problems created by relying on the wealthy and businesses for funding the education of students from poor families, it is inconsistent with the national platform saying “Parents should have control of and responsibility for all funds expended for their children’s education.”
It is difficult to evaluate the LPMN’s platform of tax credits without knowing more details. The original language appears to come from The Libertarian Party’s November 7, 2000 Legislative Program: “Provide financial incentives for businesses to help fund schools and for individuals to support students other than their own children.” It doesn’t appear to have been adopted into the platform of the national Libertarian Party. But similar versions of the language are in the platforms of Libertarian parties in several states, including Minnesota. There doesn’t appear to be anything else available specifically about it, such as details, explanations, promotions, critiques, analyses, evaluations, legislation or pilots. Since no other details are given, it must be assumed the LPMN is proposing tax credits similar to those used in several states, namely Georgia, Alabama, Florida, Arizona and Pennsylvania. The Education Freedom Scholarships (EFS) unveiled by Trump in 2019 (totaling only $5 billion) are also similar.
The states issue education tax credits to private individuals, businesses or corporations. The wealthy and businesses make donations to a third party, often called a school tuition organization (STO), that is set up as a nonprofit by the state or by financial groups connected to the private school industry. The STO distributes the money to selected students and parents to use as payment for private school tuition. The tax credit scheme, requiring the wealthy and businesses to fund the K-12 education of students, has created yet another corrupt industry with government funds. Although the devil is in the details, these types of tax credits have been readily corrupted by the wealthy, businesses and middlemen.
First, the tax credits allow the wealthy and businesses to inappropriately control the K-12 education of students, including those from poor and middle-class families. The STO must respond to their wishes on the types of schools that are supported. The wealthy and businesses favor promoting corporatism (claiming people get rich fairly and not with preferential government policies). The benefactors may even degrade the education of other children so they can continue their meritocracy favoring the wealthy. Tax credits are favored by the CATO Institute that is controlled by deca-billionaire Charles Koch.
Second, the tax credits needlessly allow the wealthy and businesses to control the K-12 education of poor and middle-class families, even though they don’t actually contribute any money. According to the LPMN: the tax credits are “equal to the amount of that assistance” for “sponsoring a person’s education.” Most families don’t have the taxable income to take advantage of this opportunity. U.S. taxpayers haven’t even fully utilized the much smaller American Opportunity Tax Credit. A parent can claim a tax credit for 100% of the first $2,000 and 25% of the next $2,000 of a dependent's college tuition and related expenses. If the credit reduces the tax bill to $0, they can get 40% of the remaining credit refunded, up to a maximum of $1,000.
Third, the wealthy and business special interests seek to abuse the opportunity by manipulating tax policy to further reduce their taxes even more than their contribution. Often, wealthy taxpayers donating to STOs can also claim a federal charitable tax deduction on their donations. This can result in a tax cut as large as $1.35 for each dollar donated.
Fourth, the “benefactors” favor their own children and those of their cronies. The STO selects and distributes the funds to students that the wealthy and businesses want them to fund. They also seek increasing the much higher amounts already spent on the children of the wealthy. Typically, the wealthy enroll their children in non-profit private schools costing $20,000 per student. Some private schools have received as much as $18,000 per scholarship from tax credits. Parents can get multiple scholarships for a child from multiple tuition organizations. States don’t even track who gets what. In Georgia, state lawmakers made it a criminal offense to disclose information about the program to the public. Education tax credit scholarships are a program for parents who can already afford private school.
Fifth, there would be no assurances that every child would receive funding and have access to an education, especially children from poor families and from poor school districts. In the event public schools are privatized, the wealthy and businesses couldn’t be relied upon to support all children.
Sixth, the need for middlemen introduces the potential for even more corruption (Think Wounded Warriors!). Middlemen used by the wealthy and businessmen skim off money that would be better spent on direct services to kids. The state of Arizona skims 10% off for administration. Pennsylvania’s tax credit scholarship programs allow STOs to keep 20% of the funding they receive ($25 million annually) and are not required to report how they spend it. Education tax credit programs also open opportunities for financial fraud and theft of public funds. States don’t have personnel and resources to track how the money is spent.
Seventh, education tax credit programs are often a conflict of interest benefiting the well-connected and not a competitive market. The education tax-credit program in Arizona has been championed by the president of the State Senate, who owns one of the state’s largest voucher-granting STOs, the company that provides the computers, data entry and customer service to the program, and the building where the STO is located with his law firm. The education tax credit program in Alabama is directed by a board dominated by the same board members who direct Florida’s program. One board member is also chairman and founder of Florida’s largest tax credit voucher provider and vice-president of American Federation for Children, a school choice advocacy organization founded by former Trump Education Secretary Betsy DeVos.
Eighth, the tax credits don’t necessarily promote competition between schools and thus likely won’t lead to a reduction of subsidies. The wealthy and businesses are more concerned about political agendas, reducing taxes and their children’s education, while their middlemen take their cut.
Ninth, the success of tax credits can’t be tested in pilot programs since states don’t even know who gets what. Success in privatization pilot programs is needed before widespread privatization, deregulation and competition can be advanced.
Tenth, tax credits are not an improvement over other taxpayer financing (e.g., vouchers) from a libertarian ideological perspective, since it is also a government subsidy requiring even more amounts of tax collection.
(5) The fifth sentence on K-12 public schools is failing to represent and advance the Party’s goals, because it fails to recognize its interim support for reforming public schools with open enrollment and charter schools doesn’t represent and even deters from its goals for privatization and real competition. The LPMN shouldn’t be distracted from the creation of real competition by supporting reform of public schools, including open enrollment or the expansion of the charter school program. There are plenty of supporters in the two major parties for these attempts to bring some choice and competition to public schools, so they can deter calls for privatization and deregulation. Moreover, there are many potential problems that are best left to the market. Under open enrollment policies, state aid follows the student, but almost half of K-12 is paid for with local property taxes. For example, isn’t that creating a burden on local taxpayers of the best school districts and incentivize them to seek lower quality? Isn’t it encouraging consolidation of rural school districts? Isn’t it increasing transportation costs, and wasting time for students and parents riding in cars or for the student taking a bus?
(6) The sixth sentence on K-12 public schools is failing to represent and advance the Party’s goals, because it fails to recognize its call for immediate elimination of quality controls (e.g., Goals 2000) currently placed upon public schools, before competition can be created, would likely decrease public school accountability even more and also the Party’s credibility. The LPMN is correct to call for the eventual complete separation of government and education, but competition is needed first. The LPMN should wait for privatization, deregulation and competition before calling for “an immediate end to state mandated curricula, including but not limited to: the Profile of Learning, Goals 2000, and School to Work.” Not only could it make the public school system even less accountable, but it would distract from the need for first achieving competition. In addition, this sentence mentions goals that are now outdated.
Comments on the Positions of Libertarian Party Presidential Candidates on Education
Political candidates cannot be relied upon to oppose the education lobbies without the backing of the Party platform. Gary Johnson favored the privatization of public K-12 education, but pressured disadvantaged families with school vouchers of only $3,500 per student. He ignored public college monopolies while seeking to eliminate federal student loan guarantees for higher education. Jo Jorgenson sought to eliminate the Department of Education and return control of education to parents, teachers and students. She claims that since the founding of the Department of Education, government spending on education has skyrocketed, while the quality of education has declined. But the cost and quality problems started long before the Department of Education was founded in 1979.
Comments on Proposed Plank of Libertarian Party of Minnesota on Education
The proposed plank for education corrects the failures of the current plank by:
- presenting education as a problem that must be solved especially since it has been squeezing taxpayers and families (blue),
- expands the problem from public schools to also non-profit private schools (blue),
- expands the problem to higher education (blue),
- recognizes the tax credit scheme corrupted by the wealthy, businesses and middlemen is not the answer, even if alternative financing for students is needed (green), and
- recognizes how the government is blocking the move to privatization by rigging state K-12 competition programs to show that public schools provide higher quality by regulating private schools and preferentially subsidizing public schools and to a lesser extent non-profit private schools over for-profit private schools (green).
The following are advantages within each sentence of the proposed platform on education:
(1) The first sentence should read “In order to reduce skyrocketing costs for K-12 and higher education that are squeezing taxpayers and families, and achieve the best possible opportunity of education, we advocate bringing the positive benefits of competition to the monopolistic public and non-profit private schools.” Since the 1960s, the costs of an education have been inflating at a faster pace than those of any other service or product, even while schools offer dubious quality, especially for on-line learning. But the cost problem applies to both K-12 and higher education and has been caused by subsidizing both public and also non-profit private schools.
(2&3) The proposed plank would not change the second and third sentences of the current platform.
(4) The fourth sentence should read “We recognize the potential need for alternative financing for students if families and charity prove insufficient sources.” The LPMN platform implies agreement with most policymakers that many families can’t currently afford K-12 education for their children even with tax credits, and thus some interim government funding is needed. The annual cost of K-12 public education is about $600 billion or $12,000 per student, and is funded by equal amounts of state and local property taxes, with the federal government funding the remaining 10%. The top 10 percent of earners pay 70 percent of all income taxes while the bottom half pays just three percent ($50 billion) on only about 11 percent of total income.
The Party needs to agree on an equitable way of financing education that promotes competition, starting with state K-12 competition programs. Education is the most difficult sector to incorporate libertarian principles, especially considering children and young adults are involved. The biggest problem is that higher quality (e.g., test scores) appears to be achieved at the schools that spend the most (i.e., tuition plus subsidies). In voucher programs, public schools receive much higher subsidies than most non-profit private schools, who in turn receive much higher subsidies than for-profits. Moreover, the rich spend much more than everyone else on their children’s education in private schools.
The two main instruments for funding privatization have been tax credits and vouchers. Both would require the government to tax people and businesses in equally greater amounts to raise more revenues for awarding subsidies. The difference is tax credits decrease revenues before the taxes reach the IRS while vouchers decrease revenues after they reach the IRS as appropriations. A key difference with these tax credits is most must be sent through the wealthy and businesses and also middlemen before reaching students and schools; whereas vouchers distribute funds directly through students and schools. Most young families lack the taxable income to use tax credits and non-refundable tax credits wouldn’t guarantee taxpayers that the money would be spent on education.
The LPMN platform would grant “tax credits for any individual or business sponsoring a person’s education.” These tax credits would allow the wealthy and businesses to control America’s education, while reducing their taxes and children’s exorbitant education costs, and getting credit for providing any charity they so wish to the children of families that they made poor by controlling the economy. The tax credits are unlikely to foster real competition and don’t allow for testing the effects of competition.
A better transition to privatization, deregulation and competition would likely be the improvement and expansion of the current voucher system, which was first promoted by Nobel Prize winning economist Milton Friedman, who also saw it as an interim step. All tax revenues collected by local, state and federal governments for education could be diverted to vouchers that follow students for compensation to the schools of their choice. Vouchers are simpler, treat all students equally, don’t allow for the full costs of high-quality private schools, can foster real competition if awarded such that a level playing field between schools is created, allows for testing the effects of competition, and is much easier for preventing corruption.
A simple phase-out of existing appropriations to public schools may be better yet. Appropriations and tax revenues collected by local, state and federal governments for K-12 and higher education are reduced to the extent that the families of students can pay for their education, according to the incomes and net worth. High-income families are required to pay for their children’s education, thus setting off real competition between public and private schools. The problem is few young families can afford to pay for their children’s education.
(5) The fifth and last sentence should read “In the interim, we oppose state K-12 competition programs that produce higher test scores from students attending public schools by regulating and providing less funding to non-profit and especially for-profit private schools.” The government has suppressed competition and created monopolies and oligopolies by regulating private schools and awarding preferential subsidies, mainly appropriations and tax breaks, to limited numbers of non-profit public and private schools, respectively. A plan on K-12 and higher education is needed that better represents and advances privatization, deregulation and competition, at least until libertarians can agree on the methods of long-term financing.
PUBLIC UTILITIES (B13 - Public Utilities and Energy)
Current Plank on Public Utilities
We advocate bringing the positive benefits of free market competition to utilities; accordingly we call for privatization and deregulation of all government monopolies, such as garbage collection, electric, gas, or communication utilities, the Public Utilities Commission, fire departments, water and sewer departments, the Nuclear Regulatory Commission, the Price Anderson Act, the Minnesota Energy Agency, and all similar regulatory agencies.
Proposed Plank on
We advocate bringing the benefits of competition to utilities; accordingly we call for privatization and deregulation of government monopolies, such as fire, water and sewer departments; deregulation of government-granted monopolies, such as private companies involved in garbage collection, electric, gas, and communication; and deregulation to eliminate regulatory agencies such as the Public Utilities Commission, Minnesota’s energy agency, and the Nuclear Regulatory Commission.
We recognize states have failed to foster competition with partial deregulation of electricity, natural gas, telephone, cable and internet, including efforts that force cooperative use of the constrained networks of regulated monopolies, and Minnesota’s discriminatory bidding of electricity and natural gas. We support deregulation efforts that remove government barriers to building alternative distribution networks.
Comments on Current Libertarian Party of Minnesota Platform on Public Utilities
The Party is committing political hypocrisy and suicide by advocating for the elimination of government monopolies established for utilities in the public sector, while ignoring government-granted monopolies awarded to utilities owned by the private sector. The Party is even tacitly supporting current state efforts that use partial deregulation to allow privately-owned utilities to create deregulated monopolies.
This current platform calls “for privatization and deregulation of all government monopolies.” A government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. These include fire, water and sewer departments and some municipal and rural utilities involved in garbage collection, electric, gas, and communication. A government-granted monopoly is created by the government granting a monopoly to a private company, including many involved in garbage collection, electric, gas, and communication.
Moreover, the Public Utilities Commission, Minnesota’s energy agency, and the Nuclear Regulatory Commission are considered regulatory agencies, not monopolies, but can be eliminated through deregulation. The Price Anderson Act is also not a monopoly or agency of any kind and doesn’t belong on this list but rather in energy policy. Another major source of misunderstanding is deregulation, which can mean the elimination of one or all government regulations governing these monopolies and agencies.
Comments on the Positions of Libertarian Party Presidential Candidates on Public Utilities
Political candidates cannot be relied upon to oppose powerful utility lobbies without the backing of the Party platform.
Comments on Proposed Libertarian Party of Minnesota Platform on Public Utilities
The following are the advantages within each sentence of the proposed platform on public utilities:
(1) The proposed platform is not limited to the privatization and deregulation of government monopolies such as fire, water and sewer departments. It also includes “deregulation of government-granted monopolies, such as private companies involved in garbage collection, electric, gas, and communication,” and “deregulation to eliminate regulatory agencies such as the Public Utilities Commission, Minnesota’s energy agency, and the Nuclear Regulatory Commission.”
(2) The proposed platform will “recognize states have failed to foster competition with partial deregulation of electricity, natural gas, telephone, cable and internet, including efforts that force cooperative use of the constrained networks of regulated monopolies, and Minnesota’s discriminatory bidding of electricity and natural gas.” It is important to distinguish the Libertarian Party from the failed partial deregulation of many states. For electricity and natural gas, deregulation is generally considered fuel supply and generation, but not transmission and distribution. Transmission and distribution has been badly constrained, and ineffective regulatory policies have failed to compensate to create real competition. Partial deregulation has largely been a failure (e.g., 2000 California Energy Crisis, 2021 Texas Power Crisis). Minnesota’s so-called “competitive” bidding of electricity and natural gas allows utilities monopolies and regulators to use subjective bidding criteria to discriminate in favor of themselves and cronies.
(3) The proposed platform will “support deregulation efforts that remove government barriers to building alternative distribution networks.” There have been some discussions about advancing electricity deregulation to allow competitors to build distribution networks. Companies have also been seeking to use utility poles to build broadband networks, but have experienced resistance from utilities.
Current Plank on Energy
None (besides that in the public utilities section)
Proposed Plank on
We recognize government is blocking the development of many alternative energy, bio-chemical, vehicle and other technologies with policies that require the use and/or reduce the costs of favored sources and technologies, such as fracking of oil and natural gas, wind and solar energy, and electric vehicles. We oppose policies that pick winners and losers, including mandates and subsidies, regulations that don’t account for and thus overvalue unreliable generation like intermittent wind energy, and preferential environmental regulation including those restricting coal while exempting oil and gas and favoring nuclear power under the Price Anderson Act. In addition, we oppose immunity from antitrust lawsuits granted to OPEC and other government oil monopolies that manipulate global oil prices to alternatively drive out competitors developing other sources and technologies, and then drive-up prices.
Comments on Current Libertarian Party of Minnesota Platform on Energy
Besides favoring privately-owned utility monopolies, the only energy policy in the current platform opposes the Price Anderson Act. It is also the only industry plank opposing a specific government regulation favoring companies in the private sector. Why is the Party picking on nuclear power, which represents less than a tenth of U.S. energy consumption and is declining? It is also strange because Libertarian Party Presidential Candidate Jo Jorgenson promoted nuclear power as the solution to climate change. Meanwhile….
The Party is committing political hypocrisy and suicide by allowing the government to block the development of many alternative technologies with energy policies favoring the dominant Big Oil & Gas industry, utility monopolies, wind and solar energy companies and electric vehicles in the private sector. The Party even tacitly favors OPEC.
Comments on the Positions of Libertarian Party Presidential Candidates on Energy
Political candidates cannot be relied upon to oppose the energy lobbies without the backing of the Party platform. The simple and contradictory energy positions of the last two presidential candidates endorsed by the Libertarian Party demonstrate the problems with the current platforms on energy. Gary Johnson picked winners and losers for energy monopolies by supporting fossil and nuclear fuels, even while acknowledging the possibility that humans cause climate change and that government has a role to protect Americans against businesses harming the environment. Jo Jorgensen wanted to stop picking winners and losers, level the playing field, and create competition and innovation to help develop cleaner energy by ending all subsidies. Yet, she picked winners and losers by supporting the replacement of coal and oil burning power plants with nuclear and off-grid solar power. She would allow more nuclear plants by streamlining Nuclear Regulatory Commission regulations while ignoring the Price Anderson Act. Neither had plans for the deregulation of utility and OPEC monopolies, or eliminating the many preferential regulations.
Comments on Proposed Libertarian Party of Minnesota Platform on Energy
The following are the explanations for each sentence of the proposed platform on energy:
(1) The first sentence should read “We recognize government is blocking the development of alternative energy, bio-chemical, vehicle and other technologies with policies that require the use and/or reduce the costs of favored technologies, such as oil and natural gas, wind and solar energy, and electric vehicles.” U.S. policymakers have created monopolies and oligopolies that produce and use mainly unsustainable oil and natural gas fuel supplies, along with unreliable wind and solar energy. Oil and gas account for 67% of total U.S. energy use, compared to 13% from coal, the next highest source. U.S. politicians, especially Republicans, favor oil and by-product natural gas with preferential environmental exemptions, even though the U.S. is among the world’s highest-cost oil producers. Favored companies often hold patents in these favored technologies. Meanwhile, preferential mandates and subsidies, as well as regulations that shift the costs of backing up intermittent generation onto reliable power sources, are allowing wind and solar energy to dominate new additions of renewable electricity generating capacity in the U.S. Preferential mandates and subsidies are projected to require electric vehicles to reach 10% of global passenger vehicle sales by 2025, rising to 28% in 2030 and 58% in 2040.
Government has not necessarily picked the best technologies The U.S. has favored oil and natural gas over coal with preferential environmental exemptions that overlook the environmental impacts of fracking. Preferential mandates, subsidies and regulations favoring wind, solar and electric cars have discouraged the development of alternatives that don’t rely on the development of new battery technology. Many automakers expect hydrogen cars to eventually succeed where electric vehicles fail. By preventing competition, fuel diversification and innovation, they have increased the risks of economic and environmental crises, and even war, in the near future.
(2) The second sentence should read “We oppose policies that pick winners and losers, including mandates and subsidies, regulations that don’t account for and thus overvalue unreliable generation like intermittent wind energy, and preferential environmental exemptions including those restricting coal while exempting oil and gas and favoring nuclear power under the Price Anderson Act.” The current platform of the Libertarian Party of Minnesota lacks much energy policy. The government is picking winners and losers among energy technologies, and not only with subsidies that are cited are elsewhere in the platform although for companies and not technologies. There are also mandates requiring the use of favored technologies, regulations that shift the costs of backing up intermittent generation onto other power sources, and preferential environmental exemptions. The Price Anderson Act is an environmental exemption because it establishes a no-fault insurance-type system against liability claims arising from nuclear accidents, in which the first money is funded by the nuclear industry and any claims above that are handled by the federal government. The Price Anderson Act may be the only specific government regulation favoring a private sector company or technology in any industry that is opposed by the current platform of the Libertarian Party of Minnesota. But that’s not saying much since U.S. nuclear electricity generation hasn’t grown since the 1980s.
The Energy Act of 2005 provided shale oil and gas fracking with another preferential environmental exemption that has been far more impactful. The so-called Halliburton loophole resulted in no federal, and little state, regulation of fracking. This wouldn’t be as much of a problem if states had not also made it difficult to sue the companies. Court rules that normally protect victims have been weakened or eliminated altogether. The federal and state governments allow companies to keep many of the ingredients in their fracking fluid secret, making it difficult to prove the extent to which fracking has contaminated air, water or soil. The government also allows companies to deny people bringing lawsuits from accessing information learned in previous suits, thus forcing them to start from scratch with expensive testing and legal discovery. Meanwhile, severe environmental regulation has drastically declined the use of coal, leading to the increased use of oil and gas and leaving the nation and world even more vulnerable to problems in oil and gas markets.
(3) The third sentence should read “In addition, we oppose immunity from antitrust lawsuits granted to OPEC and other government oil monopolies that manipulate global oil prices to alternatively drive out competitors developing other sources and technologies, and then drive-up prices.” OPEC is comprised of 14 member nations, mostly located in the unstable Middle East and having authoritarian governments with nationalized oil monopolies. The oil cartel has the world’s lowest-cost oil reserves and has provided about 60 percent of global oil exports. They deprive their people of economic freedom, especially the freedom to drill for oil and gas. Oil markets would be stable if these governments allowed their citizens to produce oil on their lands.
OPEC is the major cause of the world’s energy problems, the U.S. government’s excuse and even need for preferential policies favoring certain domestic energy sources, and also economic problems in the unstable Middle East. OPEC has caused cycling and volatility of global oil prices by limiting production for gouging with high prices, and after that causes overproduction and low prices, by increasing (or maintaining) production to wipe out competitors with predatory pricing. These actions are currently discouraging investment in the U.S. shale oil and gas industry, and the development of alternatives and inventions. Since 2015, fracking for oil and natural gas has failed to attract much investment even at oil prices as high as $60 a barrel. U.S. politicians have stood by as world markets have been heading toward increased reliance on oil exports from OPEC again. This is increasing the possibility of oil and natural gas price spikes, which have preceded 10 of the last 12 recessions. Moreover, the Middle East continues to host the world’s major war-zones, and even more risk was posed by Trump’s baiting of Iran and abandoning Syria to Russia. The world may be heading for another major disruptive energy crisis (although it will likely be temporary followed by another cycle of low prices).
U.S. politicians favor the Organization of the Petroleum Exporting Countries (OPEC) with immunity from antitrust law, and also military protection. This is a crucial time to advocate for repeal of immunity from antitrust lawsuits granted to OPEC and other government oil monopolies. Although there are no guarantees that antitrust actions will solve the problem, this would be a good first step. Diplomacy hasn’t worked. The U.S. could also stop trading with them without affecting oil prices much, but much of the rest of the world would be severely impacted. Wikipedia has a good summary of NOPEC legislation would repeal OPEC’s immunity from antitrust lawsuits.
Current Plank on Tech
Proposed Plank on
We recognize the intellectual property (IP) protections from competition that government awards to the tech industry are excessive, especially considering the technology is advancing rapidly. We seek to eliminate the monopoly power of tech companies by shortening the lifetimes of copyright and patents. In addition to providing economic and technological benefits, increased competition will reduce the ability of tech companies to violate privacy, censor information, computerize discrimination, favor political interests and facilitate authoritarianism.
Comments on Current Libertarian Party of Minnesota Platform on Tech
The Party is committing political suicide by totally ignoring the many societal problems resulting from the government awarding the tech giants in the private sector with intellectual property protections from competition over excessively long lifetimes.
Comments on the Positions of Libertarian Party Presidential Candidates on Tech
Political candidates cannot be relied upon to oppose the powerful tech lobbies without the backing of the Party platform.
Comments on Proposed Libertarian Party of Minnesota Platform on Tech
The following are the advantages within each sentence of the proposed platform on tech:
(1) The first sentence should read “We recognize the intellectual property (IP) protections from competition that government awards to the tech industry are excessive, especially considering the technology is advancing rapidly.” Statista provides statistics that demonstrate the domination of patents by tech companies.
Throughout the history of the U.S. technology industry, tech giants have squashed competitors, and investors have avoided the markets they dominate. The administration and Congress are investigating whether antitrust laws are being violated by Tech’s Big Four: Apple, Alphabet (Google), Amazon and Facebook. Many legal experts are skeptical the Big Four are even monopolies and whether current antitrust law can be used to break them up. However, the Big Four are almost certainly legal monopolies. Each of the Big Four dominates a major U.S. market, like does Microsoft, which was ruled by the courts to have a monopoly over operating systems software for IBM-compatible personal computers. Apple dominates over high-quality smartphones, Google over Internet search engines, Amazon over e-commerce, and Facebook over online social media. Their market shares, valuations, profits and patents suggest they are monopolies.
However, antitrust actions have historically only created new monopolies. The perceived need for antitrust is typically based on the false assumption that monopolies are created by market failures, such as network effects, economies-of-scale and branding. The most significant tech monopolies were established with the help of the U.S. government, before benefiting from so-called market failures. Post-war regulators realized the AT&T monopoly was stifling competition and innovation with patents. However, their decision to use antitrust enforcement, instead of reforming patent laws, likely led to today’s tech monopolies created with IP. Recent efforts to enforce antitrust and reform patent laws will not end the monopolization. The best chance is to shorten the lifetimes of intellectual property (IP), both copyright and patents.
In 1877, Bell Telephone was founded on the basis of their master telephone patent filed just hours before a similar application. Their telephone company AT&T became a monopoly until the patent expired in 1894. By the early 1900s, 3,000 competitors captured about half of the market. In 1913, the U.S. Department of Justice agreed to grant the nation’s telephone monopoly to AT&T. However, a 1956 antitrust decree barred AT&T from entering the computer business and required Bell Labs to make its patents publicly available.
IBM, and likely also Silicon Valley companies, used AT&T’s transistor technology and government-funded computer research to create new monopolies. In 1964, IBM introduced computers designed and manufactured for the full range of applications. Most competitors were blocked by their patents. From 1969 to 1982, the government investigated IBM for antitrust violations and eventually prevented them from bundling software with its mainframe. IBM was relegated to dominating computer business applications, and also patents.
In 1980, Microsoft used the opening to license their MS-DOS operating system to IBM for use in its PCs. Competitors haven’t developed competing or generic products because Microsoft still holds copyright protections. Microsoft used the monopoly to favor its other software products. From 1998 to 2001, U.S. antitrust prosecution of Microsoft found they were illegally using their monopoly to eliminate competitors. The government discouraged Microsoft from entering new markets, which opened opportunities for today’s Big Four.
Since the 1970s, Apple has sold personal computers. In 2007, they modified their computer’s operating system to develop a smartphone that worked better. The basic technologies were developed by the U.S. government, the smartphone was invented by IBM in 1992 and the product was improved by many companies. In 2006, CEO Steven Jobs said they were “going to patent it all.” Apple has blocked the competition for better smartphones by conducting patent wars against Samsung, HTC and Motorola. Today, their iPhone enjoys 87% of global smartphone profits.
During the 1990s, Google entrepreneurs developed their core Internet search engine while working on government public surveillance research grants awarded to Stanford and managed by the CIA and NSA. Stanford licensed the important but trivial PageRank technology to them. From there, they mostly just required additional algorithms that could be formulated in someone’s garage. Other algorithms have broad, general and trivial patent and copyright protections. They have been using IP to block the competition from developing better search engines.
In 1994, Amazon started selling books online and later expanded to dominate 50% of e-commerce. Amazon used its trivial “1-Click patent” against competitor Barnes & Noble’s book website, and has become one of the most criticized companies for using IP to hinder competition. Amazon also has many patents covering its now more profitable cloud computing technology, which was developed with government funding from the CIA.
In 2004, Facebook founded their online social networking website and now dominates about 60% of social media. After initially procuring some patents of their own and buying patents from IBM and Microsoft, they used them as leverage to take much of their IP from smaller businesses through hostile acquisitions and copying.
Obama promised patent reform, but the Leahy–Smith America Invents Act of 2011 created an administrative patent review process employing politically-appointed judges favoring Big Tech (i.e., Patent Trial and Appeal Board). During the past three years, Congressional hearings have been held to consider the STRONGER Patents Act, but it would largely just undo the 2011 act. Since IP has proved too difficult to regulate, the obvious solution is to shorten the lifetimes.
(2) The second sentence should read “We seek to eliminate the monopoly power of tech companies by shortening the lifetimes of copyright and patents.” Monopolies are created by government. Tech monopolies have been created by intellectual property (IP) protections from competition, patents and copyright, since the founding of AT&T, followed by IBM, Microsoft and the Big Four today. Copyright, which is awarded for the life of the author plus 70 years, blocks even obvious solutions by others. Patents, granted for 20 years, are often general and trivial, and block even largely unrelated inventions. Tech monopolies often use monopoly power and profits to expand into related markets. Big Tech companies hire large legal staffs to accumulate broad IP protections and sue competitors for violating them. They also take technology from smaller businesses that can’t afford to defend patents by invalidating them in court and administrative hearings, pressuring sale of their company or technology, and copying them if they won’t sell.
Libertarians should not support the government telling somebody that they can’t do something, especially for decades, just because somebody else filed patents or copyright with the government first. Yet, there is nothing about intellectual property, patents or copyright, in the entire platform. Tech doesn’t need long patent lifetimes, especially given the pace of new technology that is being awarded to a few companies. Other industries have been monopolized by different policies. Prescription drugs have been monopolized by patents and extensions, the discriminatory awarding of patents favoring synthetic drugs, non-patent protections, research grants, and preferential enforcement of regulations by the Food and Drug Administration. The rest of health care, energy and education have been monopolized by completely different government-granted policies. Monopolies may be suppressing technology in these industries so patents become less helpful.
(3) The third sentence should read “In addition to providing economic and technological benefits, increased competition will reduce the ability of tech companies to violate privacy, censor information, computerize discrimination, favor political interests and facilitate authoritarianism.” In a free market, producers are incentivized by competition to produce what consumers want at a reasonable and affordable price. Competition would force tech companies to look out for the best interests of consumers. The 2021 article “Bipartisan effort investigating Big Tech and data privacy concerns” notes: “There's now a bi-partisan effort to improve business competition and the privacy for consumers when they go online. Looking into big tech business practices attorneys general in Colorado and Nebraska say without more competition online this will continue to be a problem. Part of the challenge is people say well Google's product is free, so what's the problem? Well, if it is a lower quality product because they don't face competition and consumers don't have any place to go to get the privacy protection they may want, that's bad for consumers, said Colorado Attorney General Phil Weiser.”
BANKING (B3 – Money and Inflation – replace with Money and Banking)
Current Plank on Banking
We recognize that government control over money and banking is the major cause of inflation, depression and distortion of relative prices and production. In order to have a free market and its relative stability, we advocate replacing legal tender laws, the Federal Reserve central bank, and the maze of banking, monetary, and securities regulations, with standards set in the free market. Until a free market monetary system is established, we support voluntary exchange using gold, silver, or other commodities in exchange for goods and services.
Proposed Plank on
In order to achieve rapid and sustainable economic growth with competitive and stable prices, we support a free-market economy and oppose the manipulation of interest rates. We advocate for free banking that requires repeal of the Federal Reserve central bank system, legal tender laws, and banking, monetary and securities regulations. We oppose federal and state regulations requiring privately-owned banks to secure charters, which has been used by regulators to restrict entry and competition in the industry in favor of nationally-chartered banks of which some have been considered “too big to fail” and also cartels of state-chartered banks.
Comments on Current Libertarian Party of Minnesota Platform on Banking
The Party is committing political hypocrisy and suicide by advocating for the elimination of the Federal Reserve central bank in the public sector, while ignoring government charters restricting competition for “too big to fail” national banks and cartels of state banks in the private sector.
The following are the problems within the title and each sentence of the current platform on Banking:
(Title) The title should be changed to Money and Banking. The LPMN platform and also that of the national Party are about the manipulation of money. However, the title should be changed because inflation is not always the result, often it is recession and depression, and even deflation.
(1) Although there should be at least one criticism of the existing system in each plank of the platform to motivate change, it is difficult to offer any for Money and Banking. The criticisms offered by LPMN (“inflation, depression and distortion of relative prices and production”), and also the national Party, originate mostly from considerations of the manipulation of money. I wanted to say something to the effect that: "The Federal Reserve’s low interest rate policies and resulting inflation are responsible for the theft of savings, disincentivizing individuals from saving to protecting themselves, and instead inflate speculative investments that ultimately burst." (I also wanted to add debt and say debt reduces future economic growth, but debt belongs in Taxation.)
However, the manipulation of interest rates causes many problems that change with policies and vary too much for simple presentation in this platform. Moreover, it is too difficult to separate the economic problems caused by money manipulation from those caused by government policies in all of the specific industries. There are no specific criticisms of the banking industry (e.g., the monopoly power of the big banks) offered by LPMN and also the national Libertarian Party.
Although low interest rates clearly lead to asset price inflation (e.g., stocks and homes) benefiting mostly the wealthy, it only leads to consumer price inflation when it increases demand, and may not even be the major cause of inflation over the long-term. Investopedia lists the causes of inflation as increases in production costs (raw materials, wages), increased demand for products and services, deficit spending (e.g., war, infrastructure), and increased spending and demand for goods and services resulting from the lowering of interest rates by the central bank. The following graph “US Inflation from 1775 to the Present” shows the history of inflation in the U.S. Before 1965, inflation was largely caused by war. Not only prices, but the distortion of production is also caused by industrial policies and war. Before 1965, inflation occurred mainly during and after the Revolutionary War, the War of 1812, the Civil War, World War I and World War II. The root cause was always deficit spending associated with war, even though the printing of money contributed (same with Weimar Germany Hyperinflation).
Since 1965, my graph in the following article shows the root cause of inflation to be skyrocketing health care and education costs. The 2016 article entitled on “Least productive sectors only thing keeping inflation going” by Matthew C Klein of the Financial Times also blames healthcare and education for inflation. In addition, oil prices have contributed greatly from 1973-85 and much from 2000-2014. Since 1965, government policies limiting supply and increasing demand have inflated education and health care prices at three and two times the rate of inflation of all items, respectively. Energy, housing, food and transportation are close to the rate of inflation of all items even though government policies have distorted markets in these industries as well. Meanwhile, prices charged for telephone and apparel have hardly increased at all. The supply of money contributed, but it can’t be considered the major cause as stated in the current platform.
Alternatively, increasing interest rates can reduce inflation and even lead to deflation and/or depression. If rates are increased too much for the economy to bear, the result can be slower economic growth, a stock market or housing crash, and recession or even depression. But even that doesn’t necessarily mean it was the major cause of recession or even depression, but rather it could have been a precipitating factor. Growth is also almost always slowed first by monopolies in other industries or post-war conditions. A recession or depression may have happened anyway. There were lots of recessions and depressions before the Federal Reserve was founded. In addition, lowering rates back down could prevent a crash or help the economy recover. If not, increasing debt could be used instead, albeit at the expense of future economic growth. But future economic growth could be worse without stimulating the economy.
The Depression of 1920-1 and the Great Depression were both precipitated by raising interest rates to stop inflation resulting from lowering rates. However, interest rates were manipulated because the economy had many problems including inflation resulting from World War I and the socialization of industries during the Progressive Era. After raising interest rates to cause a depression, they lowered rates too much to create the Roaring 20s. They tried to raise interest rates again to stop the speculative investments in the stock market, causing a crash that led to the Great Depression. But this severe depression could likely have been shortened by more spending and the accumulation of more debt.
The Fed was not responsible for very high interest rates between 1968 and 1992, which were needed to counter health care and energy inflation. In fact, they have been criticized for not increasing rates fast enough. High interest rates led to a severe recession in the early 1980s. After markets and regulation reduced energy and health care inflation, respectively, and interest rates were reduced slowly, the economy took off until 2000. In the early 2000s, energy inflation took off again, interest rates were fairly high, and economic growth was slow. So the Fed lowered rates for Bush, causing a stock market and housing bubble. Later, they tried to raise interest rates, and markets and home prices collapsed from 2006 to 2008. Then, the Fed lowered rates to rock bottom and federal debts were increased, saving the country from a likely depression.
Since the manipulation of money can cause either inflation or depression, it isn’t accurate to say it causes both inflation and depression. These outcomes are generally not precipitated by the same policies or at the same time. It could more accurately be said lowering interest rates can cause inflation and raising them can cause depression. But even that statement looks bad when they often don’t. The Fed tries to maintain a decent growth rate at about 2 percent inflation. But it can make mistakes that cause either inflation or depression. In addition, health care and energy inflation can cause the Fed to pick its poison between inflation and recession. With interest rates already very low, the future is likely spending and debt.
(2) The second sentence says “In order to have a free market and its relative stability, we advocate replacing legal tender laws, the Federal Reserve central bank, and the maze of banking, monetary, and securities regulations, with standards set in the free market.” I prefer the term “Federal Reserve central bank system” because it also encompasses the Fed’s regional banks. Although it doesn’t include the big national banks favored by the federal government including Federal Reserve central bank. I also prefer the term “free banking” because it better describes these proposed policies than “standards set in the free market.”
The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Federal Reserve System is governed by the presidentially-appointed board of governors or Federal Reserve Board (FRB). The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress. Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately owned commercial banks. Nationally chartered commercial banks are required to hold stock in, and can elect some of the board members of, the Federal Reserve Bank of their region.
(3) The third sentence says “Until a free market monetary system is established, we support voluntary exchange using gold, silver, or other commodities in exchange for goods and services.” A free market monetary system has essentially already been established, and just needs implementation. My understanding is nothing prevents such voluntary arrangements from being made now if both parties agree on a value for the commodities. Moreover, there is also no reason to maintain this right only “until a free market monetary system is established.” The LPMN also made a mistake by limiting support to commodity money. The LPMN should not pick winners and losers, and rather let the market decide the money used. Another possibility are digital currencies including cryptocurrency and virtual currency. The national Libertarian Party platform is better but also has problems: “Individuals engaged in voluntary exchange should be free to use as money any mutually agreeable commodity or item.” Their support is not conditional on the current monetary system, and they use the word “item” to open up alternatives besides commodity money. But they appear to be at least favoring commodity money by mentioning it specifically. Moreover, there is no need for this statement since they don’t say there are any government policies preventing it.
Comments on the Positions of Libertarian Party Presidential Candidates on Banking
Political candidates cannot be relied upon to oppose the powerful banking lobbies without the backing of the Party platform.
Comments on Proposed Libertarian Party of Minnesota Platform on Banking
The following are the advantages within each sentence of the proposed platform on banking:
(1) The first sentence should read “In order to achieve rapid and sustainable economic growth with competitive and stable prices, we support a free-market economy and oppose the manipulation of interest rates.” The Federal Reserve is not the major cause of inflation, not that it can’t be a cause of inflation. I have provided information showing wars were the root cause of inflation before 1965, and health and education have been the root cause since 1965. On the other hand, the Fed is responsible for the low interest rates that have discouraged savings while causing asset price inflation. It is simpler to just say “In order to achieve rapid and sustainable economic growth with competitive and stable prices, we support a free-market economy and oppose the manipulation of interest rates.” This is somewhat included at the start of the second sentence of the current platform.
(2) The second sentence should read “We advocate for free banking that requires repeal of the Federal Reserve central bank system, legal tender laws, and banking, monetary and securities regulations.” I prefer the term “free banking.” Free banking is considered the main alternative to central banking. The nation even attempted a Free Banking era from 1837 to 1863, although the states corrupted it. Renewed debate among economists got its modern start in 1976 with The Denationalization of Money, by Austrian economist Friedrich Hayek, who advocated that national governments stop claiming a monopoly on the issuing of currency, and allow private issuers like banks to voluntarily compete to do so. In the 1980s, this expanded into an increasingly elaborate theory of free market money and banking, with proponents like economists Lawrence White, George Selgin and Richard Timberlake.
(3) The third sentence should read “We oppose federal and states laws requiring privately-owned banks to secure charters, which has been used by regulators to restrict entry and competition in the industry in favor of nationally-chartered banks of which some have been considered “too big to fail” and also cartels of state-chartered banks.”
The 74 national banks are typical commercial banks operated by private individuals, chartered by the Comptroller of the Currency (within the United States Department of the Treasury), and supervised and regulated by them and the Federal Reserve. Commercial banks make money by providing and earning interest from loans, although some also maintain savings and trust functions. The top 15 national banks make up over half of the deposits for all banks in the U.S., and the top five account for over 38%. The top five largest U.S. banks by assets are:
JPMorgan Chase & Co.
Bank of America Corp.
Wells Fargo & Co.
A 1988 analysis “The Myth of Competition in the Dual Banking System” found the beneficiaries of the current system are existing banks and banking regulators that extract political payoffs. Federal providers of bank charters restrict entry, supply and competition within the industry. Capital markets are conducted on a national level with the relevant interest groups demanding uniform regulations across all jurisdictions. States control a bank's decision to branch, which permits supervisors and small banks to protect local banking cartels that restrict output and raise prices for consumers. Fixed federal deposit insurance allows state regulators to impose costs on banks in other jurisdictions by permitting local banks to engage in excess risk taking. Existing federal and state banks would lose the franchise value of their charter if the dual federal and state system were replaced with a system not based on geographic market segmentation.
A 2019 analysis “Too-Big-To-Fail: Why Megabanks Have Not Become Smaller Since the Global Financial Crisis?” found an extensive bank lobbying effort, both domestically and globally, has resulted in national and international financial regulation, such as the 2010 Dodd Frank, that relies on stricter capital requirements and closer monitoring of megabanks. They have not addressed bank size, and many critics claim it has had a negative impact on small banks and economic growth.
Moreover, these “too big to fail” banks have continued to loan to unregulated shadow banking firms (e.g., Blackrock) that are buying up homes, creating another housing bubble and setting up for another bailout.