Of Presidents and Derelicts

Barack Obama is no fan of the Constitution. He has been known to criticize it for its focus on limiting government, for telling governments what they can and cannot do. He prefers a Constitution that focuses more on telling governments what they should do, at least telling governments to do what he would like, including seeing to the “redistribution of wealth,” or what he calls elsewhere “redistributive change.”

Of course, that is a mischaracterization. Not a mischaracterization of Obama’s views but of what the Constitution says. It does limit government, but it also gives government specific responsibilities and the power to exercise those responsibilities. Article I, Section 8 provides a very clear list of the federal government’s duties. It is noteworthy that those enumerated responsibilities and powers are in the Article that establishes the Congress. The list includes such things as providing for the common defense, borrowing and paying government debts, regulating foreign and interstate commerce, establishing standards for weights and measures, and so forth.

There are plenty of other provisions that limit the powers of the government and how it operates. The Constitution is a balance of governmental duties within a structure intended carefully to limit the government. As a limited government our Republic has prospered. It has struggled either when its duties were neglected (as in the days of President Buchanan, who did nothing while he watched state after state rebel from the Union) or when the limitations have been eroded (as we have witnessed through much of the twentieth century and in the first 14 years of the twenty-first).

The President has specific powers and duties, too, nearly all of which are carefully linked with the role of the Congress. For example, while the President does not make the laws—Article I, Section 1 gives “All legislative Powers” exclusively to the Congress—the President is authorized to make proposals to Congress and has the authority to veto legislation (but not change it) that Congress has approved. Once an act of Congress becomes law, the President then has the explicit obligation to, “take Care that the Laws be fully executed” (Article II, Section 3).

Note the words, “fully executed”. The President takes an oath to fulfill those duties, and nowhere in oath or Constitution is the President authorized to execute the laws only as much as he likes or agrees with them. Once something has become a law, the President may not set aside this or that part of the law or decide that he will only enforce the law so far. His obligation is to take Care that the laws are fully executed.

Average Americans may not like this or that provision of law, but we are not at liberty to ignore any law that applies to us just because we do not like it. The President is not exempt from that common responsibility of all citizens, either. As the chief government executive, who sought to hold his high office of public responsibility, he is even more obligated not only to obey the laws but to execute them, fully. The President may not make the laws, he may not amend the laws, he may not change the laws, and he may not disregard the laws. His duty is to execute the laws, and when he does not he is derelict in his duties.

This is all in accordance with the important division of labor, the separation of powers that the Founders put into the very structure of the Constitution to combat the tendency of all humans to abuse power once it comes into their hands. By dividing the power of government among three separate but coequal branches, dividing legislative power even further between House and Senate, and yet again separating government power between federal and state governments, the Founders went to clear and elaborate lengths to create checks and balances.

Under the American system of government no branch, no person, no group of people in government, are to be able to do very much on their own without getting the other elements of government to go along. Where they are not able to agree, where there is no consensus, for the safety of our freedoms government is prevented by constitutional law from moving forward unless substantial consensus among the different branches can be reached. Those checks and balances again and again, throughout the more than two centuries of our Constitution, have forced the very human people in government to revisit their differences and come to terms with one another, however much they may disagree and be disagreeable. There is safety for you and me in that. And it helps keep our Union together, repeatedly forcing our leaders (and the parts of the nation that they represent and whose authority they exercise) to work with one another, like it or not.

Recently, President Obama has expressed impatience with the Constitution’s checks and balances. After all, he personally, in and of himself, embodies an entire branch of government. The other branches, Congress and the courts, have many different people with a messy variety of ideas. President Obama complains that Congress cannot decide what it wants to do as quickly as he can. In his view, why wait?

By design, Congress of course has something of a multiple personality. It is a gathering of elected representatives, reflecting the diversity of views among the people of the nation. Appropriately, it takes time to build a consensus that accommodates those views, as it should. But President Obama cannot wait. He sees the need to accommodate no ideas other than his own. He has decided that on this issue or that—today it is immigration laws—there is a limit, defined by himself, as to how much time Congress can take to consider things. When time is up, he, the executive branch, will take the matter into his own hands, and pretend to the authority to do it.

His tool of choice today is to abjure his duty to execute the laws fully and instead to execute them partially, just to the extent and manner that suit his own desires, as he engages in another round of redistributive change. That he is endeavoring to violate rather than execute our national, founding law, and his constitutional oath of office, apparently does not trouble him. It is the Constitution itself that troubles him.

But from where does he think he gets his authority to do anything. When he breaks the Constitution, does he not break his very authority to act in the office that the Constitution created?

Of Majorities and Modesty

Perhaps with some weeks enough dust has settled to allow a few reactions to the recent American elections, with more perspective than can be gathered from listening to reporters interviewing reporters. I will offer views that focus mostly on the results of the congressional elections, drawing upon experience from more than two decades of work in the Senate.

I do not, however, wish to minimize the importance of the elections for governors and state legislatures. In fact, I suspect that the next President of the United States will more than likely be a current or former governor than a Washington politico. Most Presidents, historically, have come from the state governments, which I find encouraging for our federal system. Moreover, judging from what we have seen, former Senators do not seem to make very good Presidents. I cannot name one to whom we can look with admiration for what he accomplished in the White House. There seems to be too much Washington blindness in them to govern effectively for our whole nation.

I am straying to an election yet to come, though. Back to this year’s results, I will begin with the view that we should expect, with the media-scorned Republicans holding the majority in both House and Senate, that the finger of blame for all problems—real or imagined—will be pointed at “Congress.” Disputes between legislative and executive branches will tend to be cast as exposing the nation to great danger as a result of congressional intransigence and/or “politics,” as if no real issues of policy—no questions of life, freedom, or wealth—are involved.

It is happening already. In one bizarre report I heard this week on a major network “news” report, some Amtrak railroad drawbridge in the northeast is over a hundred years old and prone to getting stuck when it opens to let ships pass. Amtrak wants a billion dollars or so to fix it, but, as the “news” story would have it, Republicans in the new Congress “are not looking for ways to spend money.” That was the story. Note the nothing new here. The bridge has been around for a hundred years and did not suddenly become prone to malfunction this November. But the election has now made it a story; a problem is arising, not because the President or the Democrats in Congress for several years did not seek to fix it, but because the new Republican majorities are not interested in spending money. The bridge is not the problem in the story, the Republicans are. Expect more of this kind of media “news.”

Second observation: in recent decades Congress has increasingly surrendered more and more authority to the executive branch, including to the regulatory agencies. The Senate, under the misleadership of Majority Leader Harry Read, has given up even more power and authority (perhaps in another post I will expound on lessons from the Senate of Rome, which by avoiding decisions paved the way for the Caesars—who were all too ready to make decisions). The Democrats retain full control of the executive branch. No small thing. In the remaining two years of the Obama Administration look for more aggressive activity from the White House and the regulators as they test just what they can try by regulation and regulatory fiat, without any detours to Capitol Hill. To quote Jacob Marley’s ghost, “Much!”

When it comes to big Republican plans to make major changes, the quidnuncs will be fed explanations of the thinness of the Republican majorities, along with the “responsibility” of Republicans to share power with Democrats that the Democrats failed to win at the ballot box. When it comes to work that needs to be done, the repeated common wisdom will be that the Republicans have the majority, so nothing should stop them from getting on with the job. There will be little mention that the President can veto what Congress passes, and that Democrats in the Senate will likely filibuster anything that the White House threatens to veto, saving the President the trouble—and political risk.

Yet, there are things that the Republicans, even with working but not overwhelming majorities in Congress, will be able to do. Most important, they get to set the agenda. They get to decide what issues will be debated, what hearings will be held, what will be put to a vote, even when they may not have the votes to break Democrat opposition in the Senate. It will be some relief that instead of the familiar series of proposals to curb liberties, raise taxes, or stifle economic growth and opportunity, the agenda will tend toward ideas of freedom and prosperity, though actual accomplishments will of necessity be modest against the strong opposition of the President and his media allies. I will take modest improvements over the calamitous policy fails of the past several years.

Of Elections and Sports

Shortly before the 2012 election I offered an observation about sports and elections, and how one is not like the other. That message may continue to have relevance today.

It is early Fall. That means that we are nearing the end of the regular season of baseball, and the New York Yankees are on course to make the playoffs and another run for the World Series title, number 28. Their chances look good this year, if they can keep their players from injury and the bullpen resumes pitching up to its abilities.

Others are following football. Already the Washington Redskins have gone from having a lock on getting into the Super Bowl, after winning their first game, to being nearly mathematically eliminated from the playoffs by losing their next two. As they say in baseball, though with less justification in pro-football, it’s a long season. And speaking of the Redskins, it has been said that you can tell that someone has been in Washington too long when he begins cheering for the Redskins. Let that rest on your own taste and experience.

Basketball fans know that in just a few weeks, practice begins for college hoops. The college basketball season will terminate several months later in the greatest sporting event that the United States has to offer, March Madness! I don’t know when or whether the professional basketball season ever ends. I suppose it does.

Somewhere someone is playing soccer, where some team is leading another by the insurmountable score of 1-0. But I think that we may be in the only few weeks of the year when there are no hockey games—even as the NHL is haunted again by more labor-management strife.

At his school my son is running on a cross country team, the Trinity Tempest. The motto of the team is not but should be, “Tempest Fugit.” Instead, it seems to be something like, “Pass the weak, hurdle the dead.” Nice so far as it goes. Classical Latin would be better, it seems to me, but I am not a runner and have no say.

Yes, there is much sporting excitement and many sports in the Fall. Elections, however, are not one of them. Electing the leaders of our government, who will wield control over life and death, freedom and slavery, prosperity and poverty, is not a sport. Self-government is one of the most serious activities of life for those who cherish their liberty. Those who do not will eventually vote away their freedom, as we have seen in places like Venezuela, Ecuador, and Bolivia in recent years, and before that in places like Germany of the 1930s.

Of course, you would never know that from the public discourse on television, radio, in newspapers and other media outlets. Presidential, gubernatorial, and congressional races are treated as if they all were games, with little at stake other than whether your favorite team wins. Issues are trivialized, if mentioned at all. The trivializers have even assigned team colors, one side “Red” and another “Blue.” The most important issue in the media after a debate is “who won?” rather than, “what did we learn about what a candidate believes and what he would do if elected?” Points are awarded by press experts for style, poise, rhetoric, and gotcha lines. Panels of talking heads award scores as if they were judges at a figure skating competition.

It is all more than beside the point. It corrupts the process. Rather than true debates, in which candidates have enough time to declare and explain their views and policies on important issues, media celebrities offer trick questions, to which the future President of the United States is given two, three, or sometimes even five minutes to respond as he or she fishes for a soundbite to make it into the 60-second news recap (most of which will again be focused on, “who won?”). Based on this silly exercise, viewers are encouraged to text in (for a small fee) their vote—not for who would be the best office holder—but for who was the winner of the night’s contest.

We should expect and demand better. Through modern revelation we have been given a set of standards. You do not have to be a believer in revelation to recognize the wisdom of the counsel:

Wherefore, honest men and wise men should be sought for diligently, and good men and wise men ye should observe to uphold; otherwise, whatsoever is less than these cometh of evil. (Doctrine and Covenants 98:10)

Our task as voters interested in preserving our rights and freedoms is too seek out diligently the honest, the good, and the wise. Anything less is evil. In an election, in a campaign, in a debate, I want to discover who is the honest, the good, and the wise, and I am little interest in style points.

That takes careful and diligent effort, for among the honest, the good, and the wise, are the liars, the false, and the foolish intent on deceiving. These latter like to hide in the noise of the sporting contest and often seek to divert attention to the things that little matter, the stray word, the high school prank. We need to keep our focus on a diligent search for the honest, the good, and the wise. With persistent effort, we can find them.

In self-government, we are the players. The issue is life, liberty, and the pursuit of happiness, decidedly not a game. But if we follow these standards and apply them diligently, then in the end We the People will be the winners.

(First published September 26, 2012)

Of Banks and Over Taxed Regulators

Banks, who needs them? A quick question and a quick answer: a thriving, prospering banking system is essential for a thriving, prospering modern economy. Banks bring together the resources of savers and the needs of borrowers, particularly borrowers who seek funds to establish or expand businesses or families and individuals who use occasional borrowing to smooth out their income (good banking principles penalize people who would borrow in order to live beyond their means, but more on that at another time).

Banks also created and maintain the payments system, the means by which money is transferred quickly and accurately throughout the nation and even internationally. Bank services include as well a variety of wealth management tools by which individuals, families, businesses, and governments can store, grow, and make best use of their financial wealth.

Without banks, almost none of these services would be available. Many non-banks provide bank-like services, but they all come to find the need to rest their own services at some point on a bank.

Banking in the United States has grown with the nation, from very simple institutions in the eighteenth and early nineteenth centuries, to a wide variety of bank types, charters, and business models, as diverse as the financial demands of the customers of the largest and most diverse economy in the world. I once presented at a meeting in Chicago a list of about two-dozen different types of banks in the United States. We have national banks, state chartered banks, small community banks, larger regional banks, and very large banks with extensive national and international business products and services. All of these operate and compete together, with a body of customers behind each one who think that their bank offers the best available choice of services that they want. No other nation in the world has a banking industry like ours.

The recent recession and financial panic—and the inevitable politicizing of finance that came in its wake—have thrown much into confusion and imposed upon sound and prudent bank supervision harmful ideas born of reckless sloganeering and hubristic financial engineering. The complexity of banking—no more complex than information technology, communications systems, or modern manufacturing—has been superseded by even more complex bank regulation.

The rules governing banking are too much and too many to function reasonably. They have become more than the very human people in the multitude of bank regulatory agencies can manage. The disciplining role of markets and the valuable service of banker judgment have in large measure been replaced by bureaucratic procedures and the judgments of government officials. These officials have had little if any practical experience making loans, taking deposits and putting them to work, building financial wealth, or otherwise providing products to customers. Government officials cannot run businesses. Now, their government jobs have become so demanding and complex, that they will not be able to do their own jobs, either. Too much has been placed upon them.

Those most harmed by all of this are bank customers. For the moment, bank profits are up, but that is because their losses are down as they recover from the recession, not because services to customers are expanding. As a result of government interest rate policies, depositors earn almost nothing on the money that they place in banks. The expanding oversight involvement of bank regulators makes it dangerous for banks to offer new services to customers; the risk of breaking any of thousands of pages of regulations has become too great. It takes almost half an hour to open a new bank account, something that used to take minutes. Fewer credit-worthy borrowers today qualify for mortgages than just a year ago, before new regulations went into effect. The number of banks has been declining in recent years, dropping at the rate of nearly one for every business day, week in and week out. Only one new bank has been opened since 2010. We have fewer banks today than the nation had in 1893. A stagnant industry is less able to evolve to meet changing customer needs and preferences.

For the good of all of us who rely upon banking services, and for the sanity of financial regulators, we need to return to the principles of good banking. We need to restore a system of supervision that is measured, not by how much banker judgment it takes over, but by how it adds value to the ability of banks to serve customers. Government agencies—and the laws that they administer—that are derived from a founding document that begins with the words, “We the People,” should do nothing less, and nothing more.

On another day I would like to share some thoughts about how banks are being goaded to become their own enemies.

Of the Rule of Law and the Separation of Powers

In the 1990s I was part of a congressional delegation to Argentina. At that time the Argentine economy was growing strongly and steadily, inflation was low, the currency was pegged to the dollar, convertible 1-for-1. Trade barriers were being lowered, commerce was booming. I recall asking Argentines what could possibly darken what seemed to be a very bright future. They were quick to reply: “Here in Argentina we have no rule of law. You can have no confidence in getting justice from the courts.”

That reminded me of Washington Irving’s observation on a European judge, from his famous work, The Alhambra:

It could not be denied, however, that he set a high value upon justice, for he sold it at its weight in gold.

Not long after that visit, the politics of income redistribution and confiscation threw the Argentine economy into turmoil, where it has remained.

I recently spoke with an economist friend of mine, who was waxing eloquent about the attractive monetary and tax policies in Bulgaria. I remarked that this would probably invite foreign investment. He replied, “No, there is no rule of law there.”

The point is that good economic policy cannot long survive inadequate legal safeguards. Many businesses that made major investments in China, attracted by a market of a billion people, have learned that the lack of a reliable legal and justice system in China has undermined much of the business value they thought to find. A similar story has been holding back investment and economic development in Russia.

Bringing that home, I would venture that concern for changing rules (or even lack of rules)—the substitution of arbitrary bureaucratic powers in Washington over objective rule of law—has been inhibiting more robust investment in the United States, a major cause for our current anemic economic recovery.

An ancient king in the Western Hemisphere, named Mosiah, warned, “because all men are not just it is not expedient that ye should have a king or kings to rule over you.” (Mosiah 29:16) Because men are not consistently just, freedom has historically rested upon rule by law rather than rule by men.

Fundamentally, that was the very reason for the American Revolution. Our revolution was based on the rule of law, an assertion of the rule of law, a response to violations of the rule of law by the English king and parliament. Most of the Declaration of Independence is a lengthy litany of violations of law by the English rulers. The Revolution was designed to take power away from man and men and rest it upon laws and rights, soon to be secured by a written supreme law embodied in the Constitution. Any erosion in the force and effect of the Constitution is an erosion of the rule of law and of the freedoms that rely upon law for their defense.

The Progressive Movement that thrived about a century ago, and found a major advocate in the federal government in President Woodrow Wilson, aggressively proposed an alternative to the rule of law. This program was the Rule of Experts. Their new view—and it really was a very old view though they dressed it up in modern-sounding rhetoric—was that there are Benign People, Experts, who know the process of modern government better than most people do, to whom we can safely yield governing authorities.

It sounds akin to the ancient theory of Divine Right of Kings, that the monarchs of the world are chosen by God and endowed with greater wisdom and perspective than the average man and woman. To their benign expertise and fatherly care was to be entrusted the governance of the rest of us.

The modern Rule of Experts people have much the same view, that these experts were endowed by their universities and other sources of expertise with ability far above that of most, and it would be wise to trust ourselves to their benign care. Not very democratic, and in fact these Benign Experts make no secret of their impatience with the Congress and other constitutional brakes on arbitrary authority.

As King Mosiah wisely pointed out that men are not always just, it is also appropriate to recognize that putting men in government does not make them any more reliably wise than the rest of us. The American Founders thought to address this problem by dividing political power among not only three branches in the Federal Government but also by embracing the federal system of dividing government with the States.

The current regulatory structure and program of the United States rest heavily on the idea that Benign Experts should be entrusted with authority for many of the big questions facing Americans and for many of the much smaller questions, too. That is certainly the structure of the Dodd-Frank Act, to offer one recent, prominent example among many.

Charles Calomiris, of the Columbia University business school, described the theory of the Dodd-Frank Act and related regulations this way:

The implicit theory behind these sorts of initiatives, to the extent that there is a theory, is that the recent crisis happened because regulatory standards were not quite complex enough, because the extensive discretionary authority of bank supervisors was not great enough, and because rules and regulations prohibiting or discouraging specific practices were not sufficiently extensive.
(Charles W. Calomiris, “Meaningful Banking Reform and Why it Is so Unlikely,” VoxEU, January 8, 2013)

This program of federal regulation has been imposed increasingly in contravention of the basic constitutional principle of separation of powers, by merging legislative, executive, and judicial authority in “independent” regulatory agencies. The unelected federal regulator today decides the details and specifics of binding mandates, identifies violators of those regulations, assesses guilt, and applies penalties.

Taken together our current regulatory system, by merging rather than maintaining the separation of powers of the Constitution, is eroding the rule of law. It is returning us to the age old practice of rule by men, with all of the potential for abuse of rights and freedoms, abuses that fill up most of the sadder pages of human history.

During the debate over the creation of the new financial consumer Bureau, Senate Banking Committee Chairman Dodd boasted that with this new agency people would no longer have to come to Congress for the enactment of new consumer laws. The Bureau would take care of all that.

There are serious operational flaws—too often overlooked—in the program of governance by Benign Experts. First, the regulators are not dispassionate umpires, limited to calling the balls and strikes. These umpires are also players in the game, the federal agencies each having their own set of particular interests and incentives that they take care of first.

Second, reliance on Benign Experts assumes an unproven, undemonstrated level of knowledge, insight, and forecasting skills. AEI President Arthur Brooks, in his book, The Battle, provides one of many examples of this flaw:

Federal Reserve economists were still forecasting significant positive growth and moderate unemployment in May and June 2008. They believed that economic growth in 2009 would be 2.4 percent, and unemployment would be 5.5 percent. What we experienced instead was negative growth, double-digit unemployment, and the destruction of at least $50 trillion in worldwide wealth. No one can get the numbers exactly right, to be sure. But getting them this much wrong certainly lends a whole new meaning to the expression ‘margin of error.’
(Arthur C. Brooks, The Battle, p.46)

It is not that regulators are dumber than the rest of the population, but they are no smarter either. The regulatory problems are increasingly too great for any designated group of humans to solve.

Third flaw, mission creep: power attracts power. Even if the tasks are too great, require too much knowledge, insight, foresight, and other skills in unachievable degree, the regulators still take them on, especially if the task increases the reach and influence of the agency.

I offer two examples from an example-rich environment.

Basel III capital rules started from a simple idea, that banks all around the world should be subject to the same capital standards. Capital (the financial cushion a bank carries against losses) is one of the three key elements of sound banking, the other two being liquidity and earnings. These international rules did not remain simple. Developed by an international team of experts from around the world, who labored on them for years, the rules number hundreds of pages, affecting the entire financial structure and business model of a bank, any bank. Congress was not involved and has no particular role in approving the rules. When exposed to public review they attracted thousands of comment letters expressing dismay that they are a bad fit for the U.S. economy. In the end, though, the regulators can go ahead with what they alone think is best.

A second example would be the Federal Reserve. One hundred years ago this year the Fed was created with a specific, identifiable, and rather narrow purpose, to provide liquidity for the banking system in times of financial stress. Before long, the Federal Reserve gained control of monetary policy and built up the practice of controlling interest rates. Later, it was given the task of promoting maximum employment. Under Dodd-Frank the Federal Reserve’s role in supervising banks and bank holding companies was expanded to supervising any financial business considered to be significant for financial stability. Each of these powers has drawn the Federal Reserve away from its narrow, objective task, to broad fields of subjective authority.

Perversely, this expansion of authority into more judgmental areas is eroding the independence of the Federal Reserve, making it yet one more political player in Washington, with responsibilities that far exceed human ability to fulfill, but which reach to every business and every home. The Fed’s prolonged policy of keeping short-term interest rates at or about zero has penalized all who save and live off of their savings, transferring trillions of dollars from savers to borrowers, the biggest borrower being the Federal Government, a policy decided by a small group of Washington experts.

I offer a partial but simple solution to point us back toward strengthening the rule of law and reducing our exposure to the rule of man and men, however expert they might be. Return the lawmaking and the policy decisions to the elected representatives. It is a messy process, but exactly the messy process that the Founders intended to preserve freedom from the encroachment of arbitrary and oppressive government. The regulators, which are theoretically part of the executive branch, should be left with the duty of implementing the laws and policy decisions that the elected and accountable representatives make.

If Congress were required to write the rules and mandates and delegate to the executive agencies only the execution, the mandates of government would be circumscribed by the limitations of a legislative body forced to be directly accountable for what it has wrought. It is easy for legislators to complain about bad regulatory decisions, when all too often these are decisions that Congress never should have delegated to regulators in the first place.

We would still have laws and regulations, but the laws might be more direct and specific, and perhaps fewer and surely smaller. We would probably not have Dodd-Frank Acts that number thousands of pages read by no congressman or Senator, containing a cacophony of half-baked ideas and multiple solutions to the same problem, all left for the regulators to sort out.

And legislators might recall this caution, from Thomas Paine:

Laws difficult to be executed cannot be generally good.
(Thomas Paine, The Rights of Man)

(First published February 17, 2013)

Of Obama and Ethelred the Unready

As the troubled year of 2009 was approaching its final weeks I wrote a commentary, reprinted below, reflecting on how President Obama’s unreadiness for the job of President was endangering our soldiers abroad and weakening the economy at home. As we have witnessed a recovery that month after month remains so anemic that many Americans are not experiencing much of a recovery at all, as our retreat from world affairs encourages aggression by adventurers in Russia and elsewhere, and as the Obama Administration plans to return our Army to levels not seen since before World War II, it seemed to me appropriate to reprise my musings of November 2009. I also have to wonder whether the Nobel committee, which was so excited to award the peace prize to Barack Obama for promises to reduce American influence in world affairs, still considers its decision and the policy that it celebrated to have been wise and fortunate for the world.

Arguably the worst king of England was Ethelred the Unready. He was unready to rule his kingdom, he was unready to promote its prosperity, he was unready to repel the invader. The chief manifestation of his unreadiness was his inability or unwillingness to recognize reality. Reality eventually caught up with him—as it always does—and with his kingdom—as it always does for those subject to unready rulers.

The current President of the United States, Barack Obama, may be working hard to earn himself the title of Obama the Unready. The evidence is accumulating.

For months, the novice commander-in-chief has been at a loss to know how to respond to the urgent recommendations of the field commanders in Afghanistan. They have been pleading to increase the troop levels. The added troops are needed to respond to increased enemy activity. Unwilling to say yes or no, the President vacillates while American soldiers die because they are stretched too thin. He seems to have forgotten that American soldiers under President Clinton were similarly sacrificed in another poor corner of the world—Somalia—only because Clinton did not provide enough troops to do the job. Rather than decrease casualties, insufficient troop strength increases casualties, soldiers who would not die if given enough support to overwhelm the enemy. This week the White House announced that President Obama is still unready to decide on troop strengths for the mission in Afghanistan. Unfortunately, the Taliban is not waiting for him to make up his mind.

Also this week, President Obama gave a little speech about the economy. It was hard to miss the sense of frustration and perplexity in his remarks, made quickly as the Nobel laureate left town to seek more praise from his adoring foreign fans. He admitted that unemployment remains high, despite his economic program. He admitted that employers are reluctant to hire new people. He just does not seem to know why. His solution is to call a conference of economic talkers in December to talk about it. He remains unready to do something about his economic plans and government policies that are making it riskier for employers to take on more employees. Faced with half a trillion dollars in new taxes (many focused on small businesses), higher health care expenses from the trillion dollar “reform” program, new environmental plans to cool off the globe by cooling off economic growth, and dozens of other new plans to make it harder for businessmen to succeed, businessmen are reluctant to hire new people that they will later have to let go. All the while, the natural tendency for the economy to recover is weakened.

Consumer spending remains suppressed, while the Obama Administration and its friends in Congress pursue policies that make consumer credit more expensive and harder to get. Congress this year, with the Obama Administration cheering on, passed new credit card laws that make it difficult for lenders to have riskier borrowers pay higher rates. The result is that everyone gets to pay higher rates. Predictably, consumer credit declined by 15% in September and shows little sign of getting better. As we approach the holiday season, so important for the success of retailers, the Obama Administration and its Congressional allies are busily making it tougher for banks to run their debit card programs. Expect more debit cards denied at the checkout lines. Also expect the pace of store closures, already growing faster than swine flu, to continue to grow. Seen any empty storefronts at shopping centers lately? Be ready to see more, even as President Obama convenes his economic talk show in December.

Not to forget swine flu, the Obama Administration was eager all year to pump up the worry about a swine flu epidemic, in hopes that it might frighten people into supporting healthcare legislation. In the meantime, the Obama Administration’s health officials, who are heavily involved in development and distribution of vaccines (lawsuits that plague the medical industry have driven most vaccine manufacturers out of the business), were ready to promise but unready to deliver swine flu vaccine. Expect more of the same, of promises that do not meet actual needs as government becomes even more involved in regulating healthcare. Service and speed are what most people look for when they are sick, but service and speed are not what government programs are known to provide—any government program.

It should be no surprise that President Obama is not ready for the growing challenges of being President. Like Ethelred, Barack Obama had little training for the job. Governing has not gotten easier in the thousand years since Ethelred disgraced the throne of England. It is not getting any easier for Barack Obama. Fortunately for America, we do not invest all power in a king.

(First published on November 13, 2009)

Of Panic and Complacency

I wrote the following a few days after the election of Barack Obama in 2008. I was not in despair then, and I do not despair of finding some value even today in the thoughts expressed just before the dawn of the Obama Administration.

First of all, do not panic. Second, do not take it easy.

This is in line with another piece of advice I came across a few years ago (attributed to Austrian statesman, Clemens von Metternich): “Let us not consider ourselves victorious until the day after the battle, nor defeated until four days later.” Well, it has been more than four days since the November elections, and I believe that it is safe to say that the Republicans were defeated.

There are other things, however, that are not safe to say. It is not safe to say that the Democrats won an overwhelming victory. In fact, their margin of victory was fairly narrow, less than 7% separating the Republican and Democrat candidates for President, a number that only looks large when compared with closer recent Presidential races. Senator Obama’s percentage of victory was a little less than George Bush’s (the father) over Michael Dukakis, 6.7% versus 7.8%. The Democrats also picked up significant gains in their numbers in the Senate and House of Representatives, but in both cases they fell short of the overwhelming victories for which they had hoped. The results of the election were neither overwhelming nor underwhelming—just whelming.

It is also not safe to say that President-elect Obama and the Democrats do not mean to do what they said they wanted to do during the election. They plan to raise taxes. These higher taxes will be felt by everyone, but they will fall most heavily on businessmen and entrepreneurs, exactly the people whose efforts we need to restore economic growth. So as Obama and his team work to spread the wealth around, there will be less of it to spread, and less and less as time goes by. There are many other like-minded plans of the change team arriving in January.

Elected with the embarrassingly undisguised support of the mass media, the new leadership will continue to rely upon the media, this time to hype the “mandate” from the voters and to try to cower the remaining Republicans in town into timidity. The early effect of this can be seen in the hushed conversations of “people in the know” trying to convince themselves that Obama is really more moderate than he appears, that he will try to “govern from the center.” Maybe that will be true, but there is nothing either in Obama’s brief but clear far left voting record or his statements during the election to support the theory.

There remains powerful virtue in the Constitution (which the President-elect considers to be a flawed document), in which we can take comfort. The founding fathers wisely diffused power, because they were rightly afraid of what concentrated political power would do to individual liberty. While it is frustrating to new politicians in Washington, there is not a lot that one man can do—for good or ill—in our system of government, and that should be more of a source of solace than of worry.

We need not buy into the slogans that we should rise above partisan politics (which usually means that the other party should keep quiet and become politely ineffective) in order to wish the new President and the congressional leadership well so long as they propose to do good. Neither do we need be devotees of political parties in order to speak up when policies are proposed that will make things bad. In the land of “We the People,” it is our job not to be complacent. It is our job to remind the authorities in government who they work for. Otherwise, as we approach the holiday season in 2009, things will be much worse than they are already today.

(First published November 16, 2008)

Of War and Virtue

One hundred fifty years ago the United States remained divided in a brutal war of rebellion. Rather than unusual, such convulsions are typical in the establishment of representative republics. It does not come easy for a population new to a republic to embrace in practice the idea that matters of life and wealth should be resolved by votes. It seems that the age old recourse to arms and blood has to be tried again a time or two before people, who have only experienced more abusive government, come to accept that ballots and representation, enshrined in the rule of law, are a better way of deciding a society’s important issues.

One hundred fifty years ago, in 1864, the people of the young United States were still learning that painful lesson. But the instruction was nearing its end. Back in July of 1863, at Gettysburg and Vicksburg, the outcome of the war became inevitable. The rebels of the southern states were going to lose, constitutional government of the United States was going to succeed. The only chance for the rebels would be if the loyal people of the nation lost their determination to persevere to reunite the nation and reaffirm the constitutional republic. Often that seemed in the press to be an iffy question, but in reality the republican will remained strong. The hundreds of thousands who sacrificed life and limb in the field of war, in an overwhelmingly volunteer army (the number of drafted soldiers remained relatively minor), testified to that determination.

In the winter of 1863-64 U.S. soldiers in the field reenlisted in large numbers. Throughout 1864, and into the Spring of 1865, many thousands more would die, but the battles were becoming increasingly futile for the rebel cause, little more than adding to the destruction and suffering that rebel commanders were pulling down upon themselves and their fellows and families in this national lesson in self-government.

For the rebel soldier, experiencing defeat after defeat to his regiment, his corps, or his tattered army—with only occasional respites and temporary successes—it all may have felt pointless. The high and growing rate of desertion from rebel armies in those days suggests so. The historian comes to this point in the conflict and is tempted to describe the remaining rebel heroics and gallant but failing defenses as futile, the casualty lists a bloody tally of worthless and wasted sacrifice—particularly for so ignoble a cause as breaking up the best form of government on the earth at the time.

From the perspective of the rebel “cause” it was pointless, the continued bloodshed and destruction a burden for which the rebel leaders—in the rebel government and at the head of the rebel armies—will surely have to give an accounting before the Judge who weighs the doings of nations and those who lead them. Does that mean, therefore, that the daily struggle of the individual rebel soldier was meaningless? His effort could not change the outcome, only affect in some small way its overall cost.

And yet, throughout 1864 and to the end of the war, there were meaningful and often pitched battles fought on every field of action. The battles to which I refer echo a passage from The Book of Mormon written almost two thousand years before, describing an ancient American people after a very long war:

But behold, because of the exceedingly great length of the war between the Nephites and the Lamanites many had become hardened, because of the exceedingly great length of the war; and many were softened because of their afflictions, insomuch that they did humble themselves before God, even in the depth of humility. (Alma 62:41)

War, on a very personal level, appears to accelerate moral development. Individuals become more virtuous or more evil more quickly than they might under more peaceful conditions.

I believe that for the individual rebel soldier, as for perhaps every soldier, the real battle was his own, and in the end it was the most important battle with the most long-lasting consequences. Abraham Lincoln understated that the world would “little note, nor long remember” his speech at the dedication of the Gettysburg National Cemetery, though he perhaps correctly predicted that the world would never forget the great battle fought there.

In the full scheme of things, in terms of what really matters in the eternal worlds after this temporary one is rolled up and its purposes completed, the individual battles fought by each soldier on each side will be recognized as far more important than the whole Battle of Gettysburg. The battle of armies is a temporary one. The battle fought by each soldier, whether he exercises virtues or chooses vices, is the more permanent, the one that has never ending consequences. The battles of freedom were fought in recognition and preservation of these more important personal struggles we all have.

In the battles of 1864 and 1865 of the American War of the Rebellion the rebel soldier could not change the outcome of the war. But in each case his own personal triumph or defeat was there to be etched into his character more permanently than the scars of bullet and saber in his flesh.

As my son has often reminded me, everyone who fought in the Civil War died. And all of them lived. So must we all die, and yet we will all live again where there is no more death. By the time each of us leaves mortality, each must face and fight his battles, the ones that really matter far above those recorded in the history books of the world.

Of Plumber Joe and Community Organizer Barry

I first published this before the 2008 presidential election. In the years since, President Obama’s community organizer background has faithfully exerted itself.

It took a real life example to give life to the key difference between the two candidates for president. When Plumber Joe met Barack Obama campaigning in his neighborhood, Joe asked the would-be president, why do you want to tax my small business? Actually, more precisely, Joe wants to buy the plumbing business he has worked at, and Obama wants to raise taxes on it, and Joe asked Obama, why? At first, Obama equivocated and mumbled something about getting some tax breaks to offset the tax hikes. When Joe refused to buy into that sleight of hand trick, Obama fessed up. Obama admitted that he wanted to spread the wealth around. In other words, he said that Joe would be making too much money, so Obama wanted to take from him and give to someone else.

Why would Obama want to do that? Because, unlike Plumber Joe, who has a real job, Obama’s career experience came as a “community organizer” (when he was known in Chicago as Barry). Taking money from people and giving it to others is what community organizers do. Barry the Community Organizer now wants to organize a big community, of over 300 million people, and he wants to keep spreading the wealth around. Community organizers like to do that, because they like to get the credit for being compassionate and generous, compassionate and generous handing out other people’s money.

Joe has worked hard as a plumber. Joe has saved and prospered. Now Joe wants to own his own business and provide work for other employees. The employees, these plumbers, would provide plumbing services and get paid by their customers. Barack Obama wants to take some of that money—O.K., a lot of that money—and spread it around to people who would get their money from Barack, people who have not been as “lucky” as Plumber Joe.

Lucky? My guess is that it was not luck that made Joe work hard over the years and save his money to be in a position to own a business and provide real jobs to other people. Under a President Obama, Joe and others like him would become unlucky.

John McCain has been trying to point out for weeks that the change offered by Barack Obama is a big time return to the tired old tax and spend politics of the big government politicians. John McCain is not the most eloquent campaigner, and the mass media has been doing its best to bury his message anyway. McCain finally found a real life example, and that is the most eloquent statement of all. At the last national debate, on a stage that the mass media could not ignore, McCain introduced us to Joe the Plumber (who by the way did not ask for all the attention and is a bit embarrassed by it), and McCain asked, why raise his taxes? Why raise anybody’s taxes going into an economic downturn?

If you do not raise the taxes, you cannot keep spending other people’s money and winning praise for your compassion and generosity. And that is the point of this election.

(First published October 16, 2008)

Of Demagogues and Big Problems

One of the common tricks of demagogues, as cheap as it is common, is to denounce in high dander something for being “Big,”—“bad” because it is “Big.” Some of the recent targets have been Big Banks, Big Pharma (the drug companies), Big Oil, Big Insurance, and Big Business in general. The target is apparently chosen for its relation to the prescription that the demagogue already has in mind. Invariably the prescription involves granting more power to the demagogue, sometimes ceded from the freedoms of the targeted Big, but not infrequently taken from the liberty of the people who are somehow harmed by the Big, who are to be somehow made better by being less free.

Obamacare is one example, Big Insurance, Big Pharma, and Big Medicine all denounced to some degree in the effort to generate popular support to pass the legislation. In the end, as more and more people are recognizing, it is individual choice that has been lost, personal freedoms to choose doctors, medical plans, and available treatments (along with substantial sums of money) that have been taken, passed on to big bureaucracies identified by the demagogues.

Demagogues on left and right and even in the middle resort to this device of denouncing Big Bad, because it resonates with many people who do not consider themselves “Big” anything. We all can feel intimidated by something in our lives and experiences bigger than ourselves, making us all potentially susceptible to the demagogue’s pandering. It is also a favorite device of demagogues, because it does not require much thought or creativity to make the anti-Big speech. It seems almost required that the demagogue at some point refer to the Big Target as “Goliath” and modestly identify himself or herself with “David.” That tired jape is now getting to be about 3,000 years old, but demagogues think that their audiences just cannot get enough of it.

To be sure, there are some cases where being big is a good thing and some things that can be too big to be good. It all has to do with why they are big and perhaps how they got that way. Big savings are usually good. The Grand Canyon is big and magnificent, and I would say that the Empire StateBuilding is, too, at least as I behold it. On the other hand, big debts are to be avoided, big pits can be dangerous, and the L Tower in Toronto is an eyesore in my estimation (though I will acknowledge that others could be fond of it).

Government can be too big or too small, depending on what it does with our rights and freedoms. There are governments too small to promote and protect freedom, while there are many—most—that are too big, and ever increasing at the expense of individual rights, freedoms, and opportunities. That includes governments that are big enough to help their cronies become bigger by robbing the competition and the public. Businesses that are big because of government favor would be better for everyone if they lost the government favor and let competition, efficiency, and customer choices determine how big they should be.

Some are just big because they grew that way. Is Microsoft or Apple too big? I do not know, and neither do you. Exposed to the full discipline of the free market they will be the right size, and so will their competitors. What is the right size for banks in the United States? I do not know, and again neither do you nor does anyone else. The more that they are exposed to market forces, the sooner we will get the best answer, which I expect will be along the lines of “many sizes and shapes” in order to match the many sizes and shapes and needs of businesses, families, and individuals who rely on banks for financial services. Free competition in open markets has the power to right size commercial enterprises.

A word of caution. Part of the success of the war on Big consists in making the listeners feel small and helpless—unless rescued and led by the fearless demagogue. Besides belittling most people, the demagogue’s device diverts attention from the fact that just about everyone is part of something Big, a Big that may eventually be the demagogue’s next target. Maybe your church will one day be considered too “Big.” Or maybe the industry in which you happen to work will become a “Big” target, the town or region where you live, your race or your ethnic group, your savings and investments, the cars or trucks that you drive, your appetite, your use of water, the size of the lot of your house, the wealth of your nation. All of these, and many others, have already been used by demagogues in their Big harangues. The demagogue’s insatiable appetite for power never has enough targets. He or she is always looking for more.

Sometimes there is a kernel of something genuinely amiss in the demagogue’s Big complaint. Often, when you boil down the genuine substance of any of the complaints to the hard facts, it is hard to discover what is the Big Deal—at least in the problem. The Big Deal is to be found in the solution, which is what the demagogue is really after. Were the Popes in Rome really controlling the lives and governments of England in the time of Henry VIII? No, but the solution of confiscating Catholic Church properties and awarding them to the King’s cronies was a very Big Deal. The Nazi demagogues in Germany played the same game with their own people, the German Jews, and with their property and possessions.

The demagogue’s solutions, resting upon emotion and panic, seldom solve anything and often lead to more problems. The Climate Wars—one year the coming ice age, the next year global warming, today just climate “change”—is an example we have all seen unfold, inflicting untold billions of dollars of costs while enriching favored cronies, but which in even the most enthusiastic promises of the demagogues will do little to affect the climate in reality in our lifetimes.

The next time you hear a public figure fume about something being Big, carefully inquire into and focus upon what he or she is after. You may be a target just Big enough.

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