Chatting with Tom Wiens: Colorado Republican Candidate for U.S. Senate

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

Thanks to profligate spending policies, bailouts, stimulus packages, and unprecedented extensions of Federal power, I have a good deal of confidence that Democrats will suffer many defeats in the upcoming elections. I just wish I felt equally confident that the Republicans who replace them will do much better. Unfortunately, after chatting briefly with various candidates in the last few forums, I often had the impression that I was talking to some sort of annoying animatronic devices which, upon sensing motion, would begin to recite a list of talking points: “Drill, baby drill,” “All of the above,” “No more bailouts,” and “I’m against stimulus.” Any questions seeking more information about these subjects just triggered another recitation. If this is the depth of understanding we can expect from politicians, is it any wonder why even many Republicans in Congress voted for the so called Jobs bill—a stimulus by another name? Our Republican candidates have all figured out that they should oppose bailouts and stimulus packages, but if the only way they can recognize a bailout or stimulus bill is if it says so in the title, then we are all in a great deal of trouble.

In chatting with the various people vying for the Republican nomination to be the next U.S. Senator, I was impressed by the enthusiasm and decency of the candidates, but not by their grasp of the fundamental economic issues this country must face. I was almost ready to despair over the state of Colorado politics . . . until I overheard Tom Wiens answering a question about the gold market and displaying a depth of economic understanding I have almost never seen in a politician. I immediately requested an interview and, last week, he was kind enough to sit down with me for an hour and a half to chat about the state of the nation.

Now, I did not bring the PPC film crew to this interview; I did not even bring a voice recorder. I was not interested in sound bites or talking points. I was only interested to know what made Mr. Wiens any different from any other Republican candidate, and why anyone should trust him at all given the abysmal job Republicans have done so far in their half-hearted attempts to support limited government and a free market. Mr. Wiens exceeded all of my expectations and left me thoroughly impressed.

The difference in experience between Mr. Wiens and his fellow GOP contenders is fairly obvious. While his major competitors have spent virtually their entire careers in the public sector, Mr. Wiens, by contrast, has a strong background in the private sector as a Colorado banker, rancher, and entrepreneur. Thus, he knows the costs increased regulation and taxation place on small businesses – not just in money – but also in time and effort.

Of course, these days a strong business background is not always a great recommendation for politicians. Our federal government is absolutely full of private sector businessmen who seem all too happy to use the power of government to influence various industries. Many commentators have noted the unprecedented influence of former Goldman Sachs executives in the Bush and Obama administrations, and with the Federal Reserve. The American people are rightly angry that Wall Street so often persuades Congress to offer advantages to some businesses and industries over others.

Mr. Wiens certainly understands this. Rather than make the usual hollow attacks on special interests, however, he blames Congress for overreaching to the point they have created a business climate that almost requires government involvement. When Congress holds some industries accountable for their errors while providing bailouts to cover the mistakes of others and can be persuaded to create anticompetitive regulations to ensure the survival of favored businesses, it should surprise no one that lobbying has become a blood sport.

To Mr. Wiens, the solution to this is not to try silencing lobbyists and industry. That would just mean Congress could continue to meddle in the economy unimpeded—but with even less information on which to base their ill-considered policies. Congress, he says, needs to massively scale back spending, taxes, and much of its administration if it truly wants to aid the economy. Unfortunately, because so few members of Congress have any proper understanding of economics, even some Republicans can be convinced that stimulus packages and jobs bills are needed to help economic growth. In truth, all the stimulus bills have done is increase liquidity and inflation, pouring cash into an increasingly unstable financial market, without any increase in productive capacity at all.

Mr. Wiens suffers no such confusion about economics. He is an avid student of Austrian School free market economics and can speak eloquently and easily about the long term devastating effects bailouts and stimulus packages will ultimately have on our economy. According to him, if Congress really wants to help, it needs to stay out of the markets, lower taxes, pull back its administrative agencies, and massively cut spending—and not just the tiny bit of the total budget that goes to earmarks.

That is certainly sound policy, but I have heard other Republicans say something similar, then watched them vote on appropriations bills in lockstep with liberals. To this challenge, Mr. Wiens pointed out that, as a state senator, he was frequently the only ‘no’ vote in hearings despite the urgings of his own party. I checked with a few of his old colleagues at the state legislature and they all confirm that, even when every other Republican and Democrat was in agreement, if a bill violated Mr. Wiens’ principles as to the proper role of government, he would vote ‘no.’ This earned him a reputation as a bit of a curmudgeon, but also as a man of integrity and philosophical consistency. Though a smart politician can always feign devotion to principle, it is quite rare to find one who has a voting record to prove it.

All of this is rather encouraging and speaks well of Mr. Wiens. However, his many admirable traits are not what inspired my trust. It was his faults that impressed me most. You see, Mr. Wiens talks too much—far too much for talking points and sound bites. During the course of our conversation, he excitedly proposed a single subject rule for congressional bills, sunset provisions for virtually all laws and agencies, and an evaluation process to determine when an agency is bankrupt or failed and should be closed. He burbled on about the precious metal markets, the housing market, and the sovereign debt crisis of the states and much of the EU in great detail. Finally, we talked about energy policy and the liquid fuels crisis. I was impressed he could speak so fluently about supply shortages, increased usage, infrastructure problems, environmental issues, and national security concerns that affect the issue, and quickly decided we would have to discuss some of these issues in more detail on camera.

At one point, we were briefly interrupted by a member of his staff asking a question about provisions for a party. Mr. Wiens was somewhat irked by the interruption and apologized profusely. However, had it not occurred, I would have never known that, every year, he invites cadets from the Air Force Academy out to his ranch for a small celebration in appreciation of the service they do for this country. It just happened to be going on during our interview. While Mr. Wiens may not have thought to mention it, I was quite impressed.

This is why I did not want a video camera or voice recorder for this interview. When people know they are not going to be on video or quoted directly, they tend to speak more freely and you get a better picture of their true characters. When you get to know him, Mr. Wiens does not seem like a typical politician. In fact, I think trying to hold back his enthusiasm and speak only in prepared sound bites might actually kill him. Considering his passionate interest in free market economics and policy, and after examining some of the dense books on those subjects he reads for leisure, you might even call him a bit of a nerd. A distinctly private person, Mr. Wiens is more at home with his own family and business interests than with the megalomaniac self promotion required by a statewide campaign. I think he would not be running at all if he did not so clearly see the terrible financial storm building over this country and most of the world. Mr. Wiens certainly has the means to ensure he and his family can weather that storm. However, he is also a patriot, and he is trying to offer his knowledge and experience to the people of this state and nation to help them weather it as well. His knowledge, experience, and philosophical integrity impressed me greatly, and his personality is far too enthusiastic and quirky to be anything but honest. He may be exactly what we need. I strongly encourage all our honorable friends to take a good look at his candidacy as we approach the primary. I think you will be impressed. So far, I have yet to meet anyone better.

Child Safety Standards And The Idiocy of ABC

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

I know better. I really do. In truth, I was simply trying to be polite. Nonetheless, I opened the email from my honorable friend, clicked on the link, and suffered through a clip of ABC’s World News with Charles Gibson, a man who somehow manages to look grave while pronouncing utter rubbish.

The clip in question, "Lagging Safety Standards for Baby Products," was not news, but rather an inexcusably fear mongering advocacy piece calling for greater government regulation in response to the recent crib recall. My honorable friend sent it along to me in the hope that I could explain why the federal government does not already set strict safety standards for baby products.

Contrary to ABC’s histrionics over what it sees as a complete lack of regulation, the federal government does indeed impose rather exacting safety standards upon manufacturers and retailers of child products. The Consumer Product Safety Improvement Act of 2008 (CPSIA) stands as just one example of such regulation. This is nothing to celebrate, however. The CPSIA serves only to impose crippling costs on business, and actually undermines the safety of the children it purports to protect. All it successfully does is increase the size, scope, and power of government. Only Mr. Gibson could breathe a solemn sigh of relief over that. Sensible people should be alarmed.

The Economic Costs of Regulation

The economic costs of the CPSIA are fairly obvious. The CPSIA requires that any product intended for the use of children under age 12 must be tested by a third party and certified for safety under standards promulgated by the Consumer Product Safety Commission (the Commission). Other than prohibiting excessive levels of dangerous substances such as lead or phthalates, the CPSIA leaves it to the Commission to define and set safety standards. Once certified, a manufacturer must affix a proper label to each of its products. Even without knowing what additional testing standards the Commission will impose, this third party testing, certification, and labeling requirement imposes enormous expense.

For a large toy manufacturer such as Hasbro, these additional expenses, though irksome, are manageable. The company will simply pass the costs along to consumers, and young parents, struggling to pay bills, will marvel at the outrageous prices of baby products while no doubt cursing the "greedy" corporate executives they mistakenly blame for the cost. The consumer suffers, but the large company may survive with less profit. A small business, however, will suffer even more.

A stay at home mother who designs and creates baby bibs for her own children, then has them manufactured for public sale, will suddenly find her business faced with expensive new testing requirements for every fabric she uses, for every fastening device and material she attaches, and for any pacifier or toy she may include with the sale of such a creation. It makes no difference that she thoroughly researched the safest types of products and materials for use in her designs. She must meet the requirements of the regulations, though the cost of doing so is greater than all the revenue of her small start-up company. The time commitment alone is more than she has as a new mother. So she closes her business. Others like her are prevented from entering the market at all. Government has just set a high wealth barrier to market entry.

Regulation’s Cost to Safety

Perhaps even more worrying than the financial costs of the CPSIA, though, is the damage it does to the cause of child safety. This may seem counterintuitive given that CPSIA is intended to do the exact opposite. Make no mistake, though, the existence of the CPSIA ensures that baby products will be less safe than they would be without the CPSIA.

If the CPSIA and its like did not exist, children would not be in any imminent danger. Rather, the safety of products would be determined by the courts. If a child were injured by any given product, and the parents brought suit against the manufacturer, a judge would look to see whether the manufacturer knew, or should have known, that the product could be expected to cause injury. A judge would hold a manufacture responsible for knowing the best practices of his or her industry. Thus, even if a particular manufacturer was ignorant of a product defect or risk which others in the industry had discovered and corrected, he or she would still be held responsible in tort (and sometimes under criminal law) for failing to maintain best practices. The beauty of this system is that the safety standard is always rising as the industry gains new information. Manufacturers have great incentive to keep up with or exceed best practices as punitive damages can put them out of business and the safest products have great marketing appeal.

The CPSIA changes all that. Under the CPSIA, the Commission sets industry standards by law. That then becomes the minimum safety level, and as long as a manufacturer meets the legal standards for its products, it cannot be held liable for the injuries its products may cause. The industry may, in fact, develop best practices far in excess of the safety standard set by law. However, as these standards are more costly and the law does not require them, many manufacturers will not use them in the production of their goods. While the Commission will attempt to issue regulations modified for industry development, it cannot possibly keep pace. It is but one underfunded government agency charged with setting standards for millions of baby products in the industry. Inevitably, its regulations will lag by many years. That is the sole point ABC correctly reported. The government, acting through the Commission, cannot possibly set safety standards as exacting or as efficiently as the industry itself through the proper operation of our court system and the market.

ABC and Mr. Gibson seem to think government must involve itself in everything we do for our own good—especially to protect the children. As I hope you see here, though, further government regulation of child safety standards actually leaves our children more vulnerable while imposing crippling costs on our small businesses. Just ask yourself: do you want the products your child uses to be subject to the highest standards the market and toy industry can offer? Or do you really want to leave your child’s safety at the bottom of a federal bureaucrat’s inbox?

　

　

　

Free Trade? Obama Doesn't Get It

By Julian Dunraven, J.D., M.P.A.

Honorable friends:

Several months ago, we heard Sen. Barack Obama mention that he might like to renegotiate NAFTA. This caused such a panic in Canada that his campaign called to assure them that Obama was just spouting campaign rhetoric, and should not be taken seriously. Though this is disturbing enough, the topic of free trade agreements came up again at the final debate, and it sounded like the Canadians have good reason to be concerned. Obama stated:

“I believe in free trade. But I also believe that for far too long, certainly
during the course of the Bush administration with the support of Senator McCain,
the attitude has been that any trade agreement is a good trade agreement. And
NAFTA doesn't have -- did not have enforceable labor agreements and
environmental agreements.“And what I said was we should include those and make
them enforceable. In the same way that we should enforce rules against China
manipulating its currency to make our exports more expensive and their exports
to us cheaper.“And when it comes to South Korea, we've got a trade agreement up
right now, they are sending hundreds of thousands of South Korean cars into the
United States. That's all good. We can only get 4,000 to 5,000 into South Korea.
That is not free trade. We've got to have a president who is going to be
advocating on behalf of American businesses and American workers and I make no
apology for that.”

Obama should apologize. He does not believe in free trade any more than he does in domestic capitalism. The concept of free trade requires that one reduce or eliminates tariffs and other government interference from the international market to allow producers to compete so that each nation can find its own competitive advantage and the consumers benefit across the world. It does not mean that you use trade agreements as weapons with which you bully or beat any competitive advantage out of your trading partners.

Obama is upset that our regulations and taxes have made it more expensive to produce cars here in the U.S. than in Korea. Thus, rather than reducing our own costs, he favors tariffs and additional labor regulations that will increase foreign costs and remove any advantage they may have. All this does is make things more expensive for the U.S. consumer, who then cannot afford to buy as many things, causing a net loss in our economy. Removing the tariffs does give the Koreans an advantage in cars, but our gain in lower prices is greater than our loss in jobs. Americans will focus on other industries, which we can produce better here. Over and over, we have demonstrated that free trade produces huge gains in our economy, but Obama wants to replace free trade with universal overregulation and American citizens will pay the price for it.