Of Limited Freedom and Limited Government

November 17, 2013 1 Comment

I live and work near the belly of the beast, and I can report that these days he is not happy. His belly is rumbling. He has eaten more than he can digest. Watch out, he may throw up. He is already belching.

The federal government is not working, we know and see. Not only is it not working as was intended when it was created by the States, it is not working as designed and over designed in subsequent years. The federal government cannot manage the national parks, the welfare system is breaking down, the national transportation infrastructure takes in more money and yet the signs of dysfunction and decay on roads, rails, and bridges are increasingly apparent. Banks are regulated with thousands of rules while the banking industry continues to shrink: we have fewer banks today than we did in 1891, and their share of the financial markets has been dwindling for decades. So much of what the federal government touches turns to rust and ruin.

Yet the federal government keeps reaching out for more, undeterred by its failures. The Environmental Protection Agency aggressively imposes restrictions on the air we exhale, the Food and Drug Administration announces plans to control the fat in our foods, the new Bureau of Consumer Financial Protection has decided what kind of mortgages lenders can make and what kind of people can get them (acknowledging that many who qualify today will be outside the boundaries of federal standards in 2014).

You can augment this brief sampling of a longer list from your own experiences. This is nothing new, other than perhaps in frequency and intensity. If there is a virtue in Obamacare it may be that its unworkability and its increasingly universal hurt are demonstrating broadly what many have been feeling individually.

Demonstrating the hurt is not the same as redressing it. The beast, however ill, will not cheerfully surrender its prey. During the debate over ratification of the Constitution, one commenter, writing in the Philadelphia newspaper Independent Gazetteer (October 12, 1787), observed, “People once possessed of power are always loth to part with it”, and then warned that the Feds could not be counted on, by their own volition, to do “any thing which shall derogate from their own authority and importance . . . or give back to the people any part of those privileges which they have once parted with”. If that was predictable in 1787, it is painfully apparent today. Perhaps the clearest example is how the Washington power elites have exempted themselves and their cronies from the application of Obamacare while continuing to inflict it on the rest.

And yet, Obamacare is the hurt that keeps on hurting. People will not get over it or get used to it. Its pain and suffering will be felt again and again with each new illness, every new tax, as its strictures reduce availability, affordability, and quality of wellbeing. Wave after wave of new harm will come, astonishing its supporters and augmenting the ranks of its victims until it is addressed.

Americans, much like other people, will put up with much before they are roused to action. Unlike for many other people, our Constitution gives us avenues for action. The Constitution embodies the concept of continual redress within the rule of law to make appeal to extremities outside of the rule of law unnecessary and unthinkable, so long as the principles of the Constitution retain their vitality.

The core principle of the Constitution is limited government, designed to protect the growth and expansion of human freedom. Increasingly, for about a century, the “progressives” in Washington have turned public affairs on their heads. Human freedom has been the focus of limitation, while government enjoyed constant growth and expansion. The end seems approaching, either of the ability of government to manage what it has taken on, or perhaps (and hopefully) when the holders of power can no longer convince enough people that it is all for their own good. Limitation on government may return in vogue as promises of government solutions to feed the beast ring ever more hollow.

The Philadelphia writer of 1787, whom I cited above, was a critic of the Constitution, because he believed it impossible that the power gathered in by the federal government could be wrested from its hands. I remain hopeful that it still can be. Nothing else will work.

Filed under banking, Constitution, environmentalism, federalism, freedom, government, healthcare, progressives, rule of law, statism, tyranny, Washington Tagged with

Of Dysfunction and Governing the Nation

October 27, 2013 Leave a comment

It seems that no more evidence is needed.  The establishment press, normally loathe to criticize the federal government, has at last become even fond of proclaiming that “Washington is dysfunctional,” although they do so as if announcing something worthy of being “news.”  The Senate has not passed a budget in some four years.  The House of Representatives regularly passes budgets that the Senate will not even consider.  The President—who has no budget-proposing role under the Constitution—proposes budgets that are routinely disregarded while declaring his intent to govern without the Congress.  At the same time, people feel more alienated from their government than ever before, in ever increasing numbers considering the nation headed in the wrong direction, regardless of the party in control of national policy.

In the most recent demonstration of the Washington breakdown, the Congress this year failed to pass the annual appropriations bills before the current ones expired.  Or, better said, the House passed appropriations bills, the Senate demurred, and the President announced that he would veto any appropriations legislation that offered either more or less than what he wanted.

The establishment press, amplifying executive branch efforts to promote panic and stampede the public, announced that “the government would shut down,” and yet 83% stayed open.  Some prominent public operations (that do not require any appropriations to operate) were closed at the President’s bidding, like the Lincoln Memorial and the various veterans and war memorials, but the President seemed to have enough money to travel to various campaign-style rallies to complain about the government shut down.  There was national confusion and consternation.

Perhaps what is news is that there is, at last, general agreement, and the President has helped demonstrate, that the federal government has become dysfunctional, by which we may mean, not doing what it needs to do.  I also notice that this condition has not been getting any better.  In addition to the recent, visible indicators, I would offer some longer-term measures.

Economic growth is depressed and has been declining for decades; employment is also down, with millions leaving the work force.  Government welfare rolls have expanded dramatically, suggesting that a very large portion of the population is either not able to take care of itself or has surrendered its responsibility to do so.  The federal balance sheet approaches ever closer to insolvency.  To avoid being gloomy and doomy, I will not recount dismal education trends, eroding family formation patterns, the precarious condition of national infrastructure, or our worsening international relations (with allies and opponents).

Yet, the federal bureaucracies are far larger, taxes—visible and hidden—are higher, red tape has become ubiquitous, and federal subsidies have fallen behind promises even as they outdistance the ability of the federal government to pay for them.  If government is the solution, then why is more government not making things better?

How could this happen?  Have we as a nation lost our ability to govern ourselves?  Have “partisan politics”—as though something new rather than part of our national intercourse since 1796—frozen the ability to consider, set, and follow national priorities?  Have the problems of modernity exceeded the ability of policymakers to resolve them?

A case could probably be made for each and all of the above explanations.  I think, however, that they are all symptoms of a more fundamental problem, one recognized long ago, at the founding of the nation.

As early as 1787 the Founders recognized that a central government would not work for the United States.  Even with just the original 13 states and 3 million people, the nation was too vast to be governed in detail from one capital.  That is why they created a federal system, under which the few, truly national concerns—such as national defense, trade, international relations, national standards of measures and sanctity of contracts, preservation of freedom and the rule of law, together with the means to fund these activities—would be handled by the national government.  All else was reserved to the States.

Note that I did not say given to the States.  Remember, the States and the people in them created the national government.  The States and the people in them gave to the national government its authority and power.

Today, the United States stretches across a continent and reaches to the isles of the sea, with over 300 million inhabitants.  It is even more impossible than ever to govern from a single capital, by a centralized government.  We all have seen the evidence, in addition to the growing dysfunction of Washington.  Everyday, people all over the nation struggle with rules made by the federal bureaucracies, rules that are often nonsensical where people live and work and play, rules governing the volume of water in our toilets, the content of our children’s food, the gasoline in our cars, the content of our communications, the form of our financial affairs, and many other elements of daily, personal life.  Even worse, they have become too vast and complex to be administered faithfully or complied with loyally. 

We could fault the executive branch bureaucrats who make them or the Congressmen and Senators who write the laws, but these people are no smarter or dumber than the rest of us, and just as well meaning.  They just have an impossible job.  No one can know enough to run so many things from Washington.

Consider the big issues that seem to have Washington all tied up in knots—in turn afflicting all the rest of us.  The new national healthcare systems are breaking down even as they get started.  National rules for farmers have Congress stuck over who should get subsidies and who should not.  National tax plans designed to take from some to give to others divide the people into winners and losers.  Environmental regulations impose costs on some in order to subsidize someone else.  National education programs follow each other in rapid succession, each with a new and high-sounding name, none of which do much to stem the continued decline in education.  And ever present with all of these national rules are unintended consequences that were not and probably could not be foreseen but which crush people’s businesses, destroy jobs, and disrupt lives.

These are all issues that the Founders never intended for the national government, issues that if governments should address at all should be left to State and local governments, where decisions can be made closer to the people who have to live with the results.

We have at hand a better, competent government, or at least its blueprint.  It is found in the structure of our Constitution that created a federal system.  Our Constitution is the recognition that only through a system that keeps governing as local as possible can a great nation exist in union and harmony.

What we are seeing play out before our very eyes is that our nation not only should not be governed by a central authority, but that it cannot be.  The sooner we recognize that and return to the federal plan of the Founders the happier, and the sooner Washington will be able to function as it should for the benefit of all rather than frustration for all.  The task is too big otherwise and doomed to failure.  It will not be a pleasant failure.

Filed under Barack Obama, bureaucracy, Congress, Constitution, deficit spending, economic growth, education, environmentalism, federalism, freedom, government, government spending, healthcare, House of Representatives, international relations, jobs, media, national defense, personal finance, personal responsibility, politics, rule of law, sanctity of contracts, Senate, statism, taxes, trade, unity, Washington, welfare

Of War and Freedom

October 24, 2013 2 Comments

Independence Day 2013 had perhaps a more than usual significance for our national holiday. On that day, 150 years before, the Army of the Potomac waited on the hills and ridges south of Gettysburg for a rebel assault that did not come. Though General Meade and his officers and soldiers were unaware of it that morning, the rebel army was beaten, after three fruitless days of attacking the soldiers of the United States to clear a path to Philadelphia, Baltimore, or even Washington itself. Instead, Robert E. Lee was engaged on July 4, 1863, in plans to extricate what was left of his army from Pennsylvania and get it across the Potomac and into Virginia before it could be destroyed.

On that same day a thousand miles to the southeast, the rebel army in Vicksburg, Mississippi, surrendered to the U.S. Army and General U.S. Grant. It was strategically an even more important victory. The fall of that rebel stronghold would lead to the free navigation of the entire Mississippi River, from its source to the Gulf of Mexico, for all shipping loyal to the United States, and it divided the rebel Confederacy in two.
As Grant reflected later in his Memoirs,

The fate of the Confederacy was sealed when Vicksburg fell. Much hard fighting was to be done afterwards and many precious lives were to be sacrificed; but the morale was with the supporters of the Union ever after. (Ulysses S. Grant, Personal Memoirs of U.S. Grant, p.297)

Some who are not friends of the United States Constitution make the false claim that the War of the Rebellion was clear evidence that the Constitution was hopelessly flawed, that the war revealed the weakness of the American government rather than its strength. Such critics little understand history or what a rare thing it is for nations—or rather the people of nations—to learn to be willing to settle issues of life, death, and livelihood by the casting of ballots. It is an acquired discipline.

Consider how very few democracies or republics have been established and accepted by the populace without the people being convinced by bloody war and rebellion that deciding issues by votes and law is superior to trying them by force. England had many civil wars and rebellions on its way to rule by parliaments instead of kings. France, too, went through several revolutions before its current Fifth Republic achieved political stability. The Weimar Republic of Germany teetered for some fifteen years until it descended into the Third Reich, and only upon ruins was a stable federal republic built. Japan at last settled for meaningful republican government after its military dictatorship completely prostrated the nation in World War II. Republican government was only months old when the Bolsheviks replaced it with the dictatorship of the proletariat, and the verdict is not yet in as to whether the Russian nation has embraced free republican government even now. Similar stories can be told all across the globe, about China, Korea, Turkey, Mexico, and many other lands that through trauma and struggle came today to be governed by leaders chosen by the people limited in their authority by viable constitutions.

But if the American War of the Rebellion demonstrated the challenges to constitutional government in the first one hundred years of the Republic, it also showed its strength. That can be illustrated by what its critics consider its most damning flaw, for they denounce the document for enshrining human chattel slavery instead of abolishing it. In this they are entirely wrong. The Constitution took the thirteen new American states as they were in the late eighteenth century and brought them into a society of constitutional freedom incompatible with slavery, where the operations of that Constitution would sooner or later bring slavery to an end.

It is true that there are provisions in the Constitution as adopted in 1787 that recognized slavery. That was the price for bringing the slave-holding states into the Union within the structure of the Constitution. That very Constitution, however, made it impossible for slavery in the United States to endure. Four score and seven years after the Declaration of Independence, war waged by the people under that very Constitution was abolishing legal slavery in America. Perhaps there was a time when it might have ended peacefully, but peacefully or not, slavery in the United States had to end.

As Abraham Lincoln predicted at the 1858 Illinois Republican Convention, “I believe this government cannot endure, permanently, half slave and half free. I do not expect the Union to be dissolved; I do not expect the house to fall; but I do expect it will cease to be divided. It will become all one thing, or all the other.” I believe that Lincoln knew which would triumph, but I do not know that he suspected that he would be the constitutional officer that would see that the Union was not dissolved and that all of the United States would become free.

By the end of 1860, slaveholders knew that they could not retain slavery if they stayed under the Constitution. Sooner or later, the votes would be cast to end the practice. The slaveholders chose to rebel and get out from under the Constitution before its principles of human freedom inexorably overcame them. But once under the Constitution, it was too late to leave. Under the organization of the Constitution, the armies of the Republic were organized and put down the rebellion and slavery, holding congresses and conducting elections along the way.

The War of the Rebellion did not free the land from enemies of freedom and constitutional law. Those who would impose their will on their neighbors remain with us today. Their freedom is protected by the Constitution. But the Constitution has ever stood in the way of their plans to subjugate their fellows, and it will continue to do so as long as it is upheld. Hence the relentless efforts to undermine it, to claim it a flawed document, or pronounce it a “living document,” changeable at the whim of politicians and judges who are allowed to raise their own will above its meaning. Our devotion to that Constitution, if we are to remain free, cannot be any less than that of those who fought at Gettysburg and other battles of freedom. As we remember them, it is our turn to show “increased devotion to that cause for which they gave the last full measure of devotion”.

(First published July 11, 2013)

Filed under Abraham Lincoln, America, Civil War, Constitution, exceptionalism, freedom, government, positivism, rule of law, slavery

Of Liberty and Breaking the Rules

October 21, 2013 Leave a comment

Sometime in the 1990s, before the days of YouTube, I received a homemade video from a man who owned and operated a small business near Dallas, Texas. He ran a landscaping company, had a handful of employees, and, according to the video, was in violation of some rule or regulation of the federal government every day. He did not intend to be in violation. He did not want to be in violation. As he explained, it was just impossible to comply with all of the requirements.

The video began with the owner sitting behind his desk, explaining the problem. He stood up and took the camera with him as he walked through different parts of his operations, pointing out what was required of him, his business, and his colleagues.

In the main office he described the employment rules, the tax laws, the related mandates and regulations that applied because he had hired other people. He walked over to the equipment and described the numberless “safety hazard” regulations, from warning notices that had to be glued beneath the seats of garden tractors, to how he and his workers used, carried, and stored their tools, gear, and machines, and what they were supposed to wear while using them. He discussed the multitude of formal requirements for managing and applying the fertilizers, pesticides, and other chemicals that are commonly used in his business, including their handling, storage, clean up, and their transportation. Speaking of transportation, because his company used trucks and other vehicles, there was another long list of rules and regulations that applied to that part of the firm.

Added to all of this, there were numerous reports, applications, notices, and other papers to be filed with a variety of agencies on a regular basis. When he was through, he sat down again behind his desk and said, “I break the law every day. I don’t intend to, but I cannot avoid it. I can’t keep up with it all as long as I stay in business.”

How did we get here? Is this America? Is this the land of the free and the home of the brave? Is this a land of freedom sustained by law? It is an unknown America, too unknown to most but too familiar to people who run a business, especially the people who own a small company. The rest of us see little of it, though perhaps we suspect it is there. Some of us catch glimpses.

In a large business it takes longer for the regulatory burden to become overwhelming. For a while the boss can hire more people to help carry the load. In the large firms of America there is a host of employees who produce no goods or offer any services to any customers. They spend their careers complying with their slices of these federal rules, laws, and mandates so that some of the other employees can be involved in what the business is all about, providing something to a customer for which the customer is willing to pay.

The customer may not realize that a large share of what he pays for he never receives; it goes to pay those people who work to keep the business in compliance with the government rules. More than businessmen would be wealthier without this heavy, dead hand clamped on firms, factories, and farms. The necessities and luxuries of life would all be a lot cheaper. Or, another way to say it, we would get more of the goods and services we pay for, less of our money sunk into these hidden costs for unproductive activity.

America’s Founders sought to create a land of freedom, not dominated by government and the officiousness of government functionaries. To them “unregulated” was a goal, not a criticism. They also knew the danger of what could happen, even in America. James Madison wrote, “It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood. . .” (James Madison, Federalist no. 62)

And yet here we are. What the Texas businessman faced in the 1990s has not become any lighter since. When was the last time that you read the full text of a law? Who has read the Obamacare statute, the Dodd-Frank Act, or any of the other voluminous, incoherent laws recently enacted, each written on more than a thousand pages? For each page of law enacted by Congress today government bureaucrats write ten pages of rules and regulations, all of which are enforced as law though never voted on by anyone who himself has been voted into office by the people.

In the land of the free, whose founding document begins with “We the People”, why do we tolerate it? One of the complaints against the king of England in the Declaration of Independence reads, “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.” And yet we have done the same to ourselves. The Dodd-Frank Act alone created several New Offices and has already stimulated the hiring of more than a thousand new officers.

“I wear the chain I forged in life,” replied the Ghost. “I made it link by link, and yard by yard; I girded it on of my own free will, and of my own free will I wore it. Is its pattern strange to you?”

Scrooge trembled more and more.

“Or would you know,” pursued the Ghost, “the weight and length of the strong coil you bear yourself? It was full as heavy and as long as this, seven Christmas Eves ago. You have laboured on it, since. It is a ponderous chain!”
(Charles Dickens, A Christmas Carol)

There was a time when the chains had to be broken to restore the rule of law.

(First published August 8, 2013)

Filed under America, bureaucracy, Congress, Constitution, Declaration of Independence, Dodd-Frank Act, exceptionalism, freedom, government, healthcare, law, productivity, rule of law, statism, wealth

Of Claiming Good and Doing Bad

October 13, 2013 1 Comment

A very good book was published this month. Ostensibly, it is about our economy and the recession. It is actually about much more. It is the first book about the current American economy written by a philosopher, and it is perhaps the best book I have read yet about all the recent unpleasantness. Some might say that the economic trouble still continues, more like a long, slow convalescence from a serious illness than a healthy recovery. For many whose financial condition stagnates, for those who have replaced a full-time job with one or two part-time jobs, for graduates who have a degree in hand but no work in the field for which they have trained, and especially for the millions who remain out of work, talk of an economic turnaround can seem like a mockery.

For those and others, Infiltrated, by Jay W. Richards, can help make some sense of what hit us. The book does not suggest that there was a massive conspiracy to drive our nation into economic turmoil. It explains how turmoil came nevertheless as national policymakers followed the prescriptions of people who claimed to be doing good but tried to cheat the laws of economics and markets to impose what they might call “benevolence” on the rest of us.

It was their idea that in order to help more people own homes lenders should ignore such things as ability to repay a mortgage, strong history of employment and steady income, and having some equity in the value of the house so there would not be an incentive to walk away if prices dropped. They also agitated for the government to expand its guaranties for mortgages to people with poor credit histories and loans where lenders cut corners. And they badgered builders to keep building more houses.

Their plans horribly miscarried, and yet those people have even more control over us and our economy today and are more able and determined to try again. The recession, rather than educating and deterring them, has made them bolder.

I am reminded of what the late Louis Rukeyser, the very popular host of the PBS program Wall Street Week, wrote in the 1990s:

Washington has been taken over by an impregnable mob of short-sighted, power-hungry megaclowns.

They try their worst to micromanage every detail of the economy, but succeed only in whipping the markets back and forth, up and down in spastic patterns. They despise the gentler forces of a free market, which would moderate swings far more predictably.
(Louis Rukeyser, 1993 advertisement for his financial newsletter)

The people to whom I refer and whom Richards exposes in his book do not like the markets. They trust themselves more and think that you should trust them, too. They seriously do believe themselves smarter than the markets, and that is the problem. No one, other than God, is smarter than the markets. A large part of economic history, the tragic part, is a chronicle of the disasters caused when a small coterie of people are able to enforce their wishes and preferences on the rest of us in contravention of economic reality. It never works.

That was the story of the Great Depression, and it was entirely the story of communism, where whole societies were based upon the now well-proven fallacy that any group of people, no matter how smart or well intentioned, can gather sufficient data and know and understand enough to run a national economy. It is just far too complicated, with billions of economic decisions being made by millions of people all day and all night long. The markets make it all work, because the markets are the sum combined total of all of those economic actions and decisions interacting with each other. No human five-year plan for economic control has escaped failure.

What is worse, as well intentioned as such people may start out, all too often, as Richards’ book exposes, their efforts not only fail to do what they set out to do, they fail to stay virtuous and instead become enlisted in the service of private gain at the expense of the rest of us. The Soviet system might have worked pretty well for the party owners of the dachas along the Black Sea but only by impoverishing the workers their leaders claimed to be serving.

Do not let yourself be put off that Richards is a philosopher. His book is remarkably readable, one that you can take with you to the beach and actually enjoy, and feel that you have learned something—a lot—in the reading. Richards mixes real life narrative with hard facts and good research, unified by sound reasoning to expose a nasty and growing problem in American government today. The problem is a big part of why government is expanding and becoming more intrusive in all aspects of our lives, including our financial affairs, education, healthcare, energy use, the products we buy, the food we eat, and the entertainment we enjoy, and even the breath we exhale.

That is to say that the story told by Jay Richards, in Infiltrated, is actually a longer story, a story that began long before the recession, and continues afterward, a story that is bigger than his book. The recent economic events and their painful aftermath illuminate Richards’ core message, the human wreckage caused when some people are able to harness the coercive force of government to impose their personal notions of “benevolence” on the rest of us.

Roger Kimball, writing in 2011 in The New Criterion, warned that such efforts are “intoxicating, addictive, expensive, and ultimately ruinous.” (Roger Kimball, “Liberty versus benevolence,” The New Criterion, February 2011, p.6) Richards offers several well-described examples, well illustrating the truth of Kimball’s observations.

A valuable lesson for policymakers and for the people they would govern: the more discretion you give to government, the more you create the opportunity for abuse of that discretion for private gain. Europe in the 18th century was lousy with the practice. Our forebears sought to escape it and fought a revolution to get out of its grip. The men who threw the tea into Boston Harbor were acting in protest of the partnership between the British Crown and the British East India Company.

Beware the public-private partnerships. Jay Richards explains how some public-private mortgage partnerships went bad, very bad, for the partners and for all of us caught in the dust and debris of their collapse. I am reminded of the warning by former Congressman Dick Armey, that when you enter into a partnership with the devil, you are always the junior partner.

I conclude with the words of New York City Democrat Congressman Bourke Cockran, delivered 110 years ago:

That Government only is good, that Government only is great, that Government only is just, which has neither favorites nor victims.

(W. Bourke Cockran, speech given before the National Liberal Club of England, London, July 15, 1903, in W. Bourke Cockran, In the Name of Liberty, p.190)

Our government should be that government.

(First published August 18, 2013)

Filed under banking, benevolence, economic depression, economic growth, economics, healthcare, jobs, markets, personal finance, progressives, recession, rule of law, socialism, statism, tyranny

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