Sunday, November 9, 2014

Statism

The word ‘statism’ does not occur frequently in ordinary conversation, and even in political discussions it is not common. But this word identifies an idea which has a measurable impact on the world.

Various reference books will define ‘statism’ in different ways. Statism is the notion that whichever question or need or problem a citizen may have, the state has the answer, or the state is the answer.

Statism begins with sentiments about what the government can do for citizens, but gradually morphs into questions about what the citizen can do for the government. President Kennedy famously encouraged people to think about “what you can do for your country” - statism conceptually reverses that phrase into “what you can do for your government.”

In statist thinking, Lincoln’s “government for the people” meets it opposite: “people for the government.”

Because statism begins, however, by presenting itself as a benign or even beneficial effort to help people by means of government action, its true nature is not immediately seen. People of honest good will embrace social programs which are designed to help the poor.

But as the nature of the world works its inevitable way, sincere efforts to help society’s vulnerable members are exploited by cynical bureaucrats who understand that they can receive steady paychecks for administering social programs, whether or not those programs actually help anyone.

The Oxford English Dictionary offers this definition of statism:

The theory or system of social organization in which the State has substantial centralized control over a nation's social and economic affairs.

While an effort to offer social benefits is almost always part of the justification offered for giving ever more controlling power to state - which is the same as taking power away from the people - , the anticipated benefits are often replaced with outright harm to the very social classes which one hoped to help by means of some statist scheme.

The programs which were introduced as ways to help the poor reveal themselves to be programs which actually hurt the poor, and take freedom away from all social classes, rich or poor.

Taxation in any form is, in the final analysis, a reduction of individual civil liberty. Mark Levin, who served as chief of staff for the United States Attorney General, writes:

In the name of “economic justice” and “equality” the Statist creates the perception of class struggle through a variety of interventions, including the “progressive” income tax. In the Communist Manifesto, Karl Marx wrote, “In the most advanced countries the following will be pretty generally applicable: a heavy progressive or graduated income tax.”

Decisions about funding are observable and quantifiable. If the foundational purpose of a government is to protect the lives, freedoms, and property of its citizens, the defense programs would be seen as a priority. Instead, however, defense spending fell from 70% of federal outlays in the mid-1950s, to 46% at the height of the Vietnam War, to 28% during the so-called “Reagan Buildup,” to 19% during the “war on terror.”

Meanwhile, spending on programs which verifiably harm the poor - those would be programs which claim to help the poor - has increased. The language surrounding such programs has moved from unintentionally ironic to Orwellian doublespeak. A range of social programs have increased both urban and rural poverty.

Programs like food stamps, now part of EBT, have decreased nutrition for the poor and created “food deserts” in major urban areas. Medicare and Medicaid have decreased both the quality and the quantity of healthcare available to senior citizens and to low-income families, and has trimmed their ability to make independent decisions about their medical treatments.

The more the government funds programs to help the poor, the more the poor are harmed. This dynamic has a twofold root: good intentions gone wrong, in which a sincere desire to help the poor has been stymied by administrative incompetence, and cynical bureaucrats, who merely see a chance for a steady paycheck.

Scholar William Voegeli documents how funding is directed largely to programs which do not, and cannot, help their intended beneficiaries:

That amount has increased steadily, under Democrats and Republicans, during booms and recessions. Adjusted for inflation and population growth, federal welfare state spending was 58 percent larger in 1993 when Bill Clinton became president than it had been 16 years before when Jimmy Carter took the oath of office. By 2009, when Barack Obama was inaugurated, it was 59 percent larger than it had been in 1993. Overall, the outlays were more than two-and-a-half times as large in 2013 as they had been in 1977. The latest Census Bureau data, from 2011, regarding state and local programs for “social services and income maintenance,” show additional spending of $728 billion beyond the federal amount. Thus the total works out to some $3 trillion for all government welfare state expenditures in the U.S., or just under $10,000 per American. That figure does not include the cost, considerable but harder to reckon, of the policies meant to enhance welfare without the government first borrowing or taxing money and then spending it. I refer to laws and regulations that require some citizens to help others directly, such as minimum wages, maximum hours, and mandatory benefits for employees, or rent control for tenants.

Government-organized social programs are necessarily subject to inefficiencies, incompetence, and corruption. These characteristics plague any public-sector endeavor.

While the programs to help the poor are necessarily ineffective, statist tax schemes are quite effective at harming citizens. Mark Levin writes:

A recent study by the Organization for Economic Co-operation and Development found that when measuring household taxes (income taxes and employee Social Security contributions), the United States “has the most progressive tax system and collects the largest share of taxes from the richest 10 percent of the population,” placing a heavier tax burden on high-income households than other industrialized nations do. The latest Congressional Budget Office figures show that the top 1 percent of income earners in the United States paid 39 percent of the federal income taxes while earning 18 percent of the pretax income and the top 5 percent of income earners paid 61 percent of federal income taxes while earning 31 percent of pretax income. Indeed, the top 40 percent of income earners paid 99.4 percent of federal income taxes. The bottom 40 percent of income earners paid no federal income tax and received 3.8 percent from the tax system. And the middle 20 percent of income earners pay only 4.4 percent of federal income taxes.

Citizens of good will see the fairness in paying taxes for the communal good. A reasonable voter

does not object to wealthier individuals paying more to finance the legitimate functions of government, the government has grown well beyond the limits placed on it by the Constitution, particularly since the New Deal. Redistributing wealth is a central objective of the progressive income tax.

But there is another purpose to graduated or progressive tax structures: to emphasize different levels of wealth among the citizens, and to pit them against each other in class struggle. Bureaucrats and elected politicians can, if they forego ethical considerations, profit from creating divisiveness among the citizens:

For the Statist, there must be a class struggle and it must be a never-ending struggle, for it is perhaps his most valuable weapon in his war against the individual, the free market, and ultimately the civil society. The Statist, therefore, not only opposes efforts to eliminate the progressive income tax, including such alternatives as the FAIR tax (a national sales tax) of the flat tax (a flat-rate income tax), he opposes most any income tax reductions that might weaken the “class structure.”

There is an alternative to the statist nightmare, in which the government takes wealth from citizens to fund programs which do not benefit those who most need help, and in which the government controls ever larger segments of private life which pitting groups of citizens against each other.

A more humane, and more effective, option is private-sector charity. Organizations across the United States operate effectively, without government funding, soup kitchens and homeless shelters, scholarships for needy students and daily care for low-income senior citizens.

Such private-sector charity routinely has much less corruption and inefficiency. Overhead is also lower, and in many cases, reduced to near-zero levels when individuals volunteer and donate their time and effort, as well as their money.

Private sector charities are not only a measurable and significant way to benefit the poor, but they can also preserve our civil liberties.

Saturday, November 8, 2014

Good Intentions, Bad Results

Decisions about spending reveal actual priorities, whatever the alleged priorities may be. A man might talk about how much he values healthy food, but if the records show that he spends much of his money on donuts and bologna, his true preference has been shown.

The same is true of government spending. Political leaders may express deep concern for the poor, but if they allocate millions and billions of dollars in programs which actually make the condition of the economic underclasses worse, the true priorities of these bureaucrats make themselves manifest.

Programs which harm low-income citizens do so even if they are presented as strategies to help the poor.

In the twentieth and twenty-first centuries, the United States has experienced a series of actions which were labeled with ambitious phrases like “War on Poverty” and “Great Society.” In reality, these programs not only failed to help the poor, but they measurably made the lot of the lower class worse.

The “food stamp” program has worsened the nutrition of both the urban and the rural poor, and created “food deserts” in major cities. Social Security and Medicare have worsened the economic status of elderly citizens, reduced their independence, and brought them under more government control.

The “war on drugs” has increased illegal drug smuggling, domestic production, sales, and consumption. The federal government’s attempts to raise the quality of education have merely worsened the standards of the nation’s schools.

Many people with sincerely good intentions worked to promote and enforce these programs. But sincerity, intentions, and compassion are not the same as observable and measurable results.

A program may have the best of intentions, but why continue to fund it if it produces the very opposite of its stated goals? Although people of genuine goodwill may have instituted the program, legions of cynical bureaucrats will receive comfortable paychecks from it. They have an interest in keeping such programs in place, even when the programs fail to help the intended beneficiaries - even when the programs harm the intended beneficiaries.

Thus it is that the machinations of bureaucrats keep funding flowing to institutionalized failure. Scholar William Voegeli writes:

America’s welfare state has been growing steadily for almost a century, and is now much bigger than it was at the start of the New Deal in 1932, or at the beginning of the Great Society in 1964. In 2013 the federal government spent $2.279 trillion — $7,200 per American, two-thirds of all federal outlays, and 14 percent of the Gross Domestic Product — on the five big program areas that make up our welfare state: 1. Social Security; 2. All other income support programs, such as disability insurance or unemployment compensation; 3. Medicare; 4. All other health programs, such as Medicaid; and 5. All programs for education, job training, and social services.

The clear trend in government is to fund those programs which both fail to help their intended recipients and which harm their intended recipients. The government has funded almost exclusively those anti-poverty programs which in fact increase poverty.

The other side of the coin is that programs which help citizens are prone to funding cuts. Given that the unambiguous purpose of a government is to protect the lives, freedoms, and properties of its citizens, it is at least counterintuitive that defense spending in the United States has been repeatedly cut. In the mid-1950s, defense spending was 15% of GDP. Since then, it has been chopped to 9.5% at the height of the Vietnam War, to 6.2% during the so-called “Reagan Buildup,” to less than 4% during the “war on terror.”

One need only to pose the rhetorical question whether the lives, freedoms, and property are more or less secure as a result.

A similar decline in security for the ordinary citizen has resulted from cuts to funding direct police presence. While total police funding has in some cases actually increased, posting of armed police to patrols in urban or suburban neighborhoods has in many cases decreased.

While it is true that violent crime, by some measures, has decreased in the last decade or two, it has increased in the last fifty years or so.

There is a sort of emotional satisfaction that a truly compassionate person feels when directing funding to a social program. But that satisfaction is an illusion if that program, despite its facade, fails to help people.

There is an unfortunate interplay between sincerely compassionate people and insincere bureaucrats. Good intentions can be exploited by public-sector careerists. People of genuine goodwill are exploited by governments.

A promising alternative is offered by private-sector charities. Meaningful and measurable help is offered by organizations like Ypsilanti’s Hope Clinic, which does not squander donated funds on overhead.

Rural and urban residents of all races and religions can receive significant and observable benefits from private sector charities which efficiently use the funds voluntarily donated by citizens.

Wednesday, October 15, 2014

Lois Lerner's Long Train of Abuses and Usurpations

In 2013, Lois Lerner’s role in using the IRS as tool for political harassment became widely known in Congress, in the news media, and among the general public. Although Lois Lerner achieved her greatest fame, or infamy, in this matter, she had been involved in political machinations already for several decades. Matt Kibbe writes:

There is real evidence that Lois Lerner is a partisan with an ax to grind, and is willing to use her positions of power to advance her personal agenda. In 1996 she used her position as a Federal Elections Commission lawyer to go after Illinois U.S. Senate candidate Al Salvi, a Republican challenging Senator Dick Durbin. Late in the election, Salvi was hit by an FEC complaint filed by the Democratic National Committee, a charge that would dominate the headlines for the remainder of the campaign, which Salvi lost to Durbin. The charges were later dropped in court as frivolous, but not before Lois Lerner put Salvi through a bureaucratic and legal wood chipper.

Lerner’s abuse of power conforms to a predictable pattern. The Investor’s Business Daily reports that not only did Lerner again use a federal agency to intimidate a political opponent, but that her partner in crime was the same in 1996 as a decade later: Senator Dick Durbin. Durbin and Lerner designed a plot to keep opponents hamstrung by false accusations:

Before his 2010 letter urging the IRS to target conservatives, the Senate majority whip's 1996 campaign benefited from the targeting of his opponent by a Federal Election Commission official with a familiar name.

Perhaps not surprisingly, the IRS scandal may have its roots in Illinois politics with the 1996 targeting of Illinois conservative Al Salvi by a familiar name, Lois Lerner, then head of the Enforcement Division of the Federal Elections Commission.

Lerner has been able to subvert not only the IRS, but also the Federal Elections Commission, and - as described below - even FBI agents to serve her political ambition.

That year, Democrat U.S. Rep. Dick Durbin and Republican State Rep. Al Salvi were locked in a battle for the U.S. Senate seat Durbin would eventually win.

As the journal Illinois Review details, Salvi was confronted with an "October surprise," not one, but two, FEC complaints filed against him — one by Illinois Democrats about the way he reported a loan he made to himself, and another by the Democratic Senatorial Committee about a reported business donation.

What worked in an Illinois senatorial campaign also worked in a national presidential campaign.

The late inning complaints stalled Salvi's campaign against Durbin. "We couldn't get our message out because day after day, the media carried story after story about the FEC complaint," Salvi told Illinois Review.

This tactic of keeping political opponents busy was repeated by IRS Exempt Organizations Division chief Lerner on her targeting of Tea Party and other conservative groups in the 2012 presidential campaign.

Salvi refused to bargain and instead fought to clear his name in court. Although he lost the election, because the voters didn’t learn of Lerner’s and Durbin’s crimes until a court cleared Salvi after the balloting, Salvi has been acknowledged by the court as not guilty, while Judge Lindbergh determined that Lerner and Durbin had filed frivolous charges. By contrast, years later, when confronted with her crimes, Lerner did not seek to clear her name, but pled the Fifth Amendment. The Investor’s Business Daily explains:

Salvi recognized Lerner when she invoked her Fifth Amendment right against self-incrimination before Rep. Darrell Issa's House Oversight Committee as the woman who made him an offer: "Promise me you will never run for office again, and we'll drop this case."

This was an offer he could and did refuse, running again in 1998 for Illinois state treasurer.

"That's the woman," Salvi said. "And I didn't plead the Fifth like she did."

In addition to harnessing the power of the IRS, the FBI, and FEC, Lerner managed also to use ATF agents and the OSHA bureaucracy in her extortion and intimidation efforts.

Nearly four years and $100,000 in legal fees later, federal Judge George Lindbergh dismissed the frivolous FEC case against Salvi for lending his campaign his own money, leaving FEC attorney Lerner, who was present and actively arguing before the judge, dismayed. "We never lose!" Lerner said, in a veiled threat to Salvi afterwards.

In an action reminiscent of the harassment of Tea Party activist Catherine Englebrecht, who was visited by an alphabet soup of federal agencies including the ATF, the IRS and OSHA after she sought tax exempt status for her group, Salvi received other special scrutiny.

The FBI was called in at one point to gather evidence on the case. According to Salvi, two FBI agents unexpectedly visited the Salvis' home, and interrogated his elderly mother about her $2,000 check to her son's campaign and where she got "that kind of money."

The case of Lois Lerner serves to demonstrate that federal power, housed in agencies formed with good intent and staffed by civil servants of good intent, can be a tool of blackmail and extortion if high-level appointees are so inclined.

Wednesday, July 30, 2014

Coal's Second Chance?

By the second half of the twentieth century, it had been established with reasonable certainty that high-sulfur coal had the potential, when burned, to damage the environment. Scientists hypothesized that this type of coal, also known as ‘lignite’ or brown coal, could be a contributing factor to “acid rain.”

Anthracite, a low-sulfur coal, was by that time recognized as environmentally friendly. Also known as hard coal, it is composed of nearly pure carbon and gives off few pollutants during combustion.

Between those two is a third type, bituminous coal. Known as ‘black coal,’ it contains detectably more sulfur than anthracite. For this reason, some lobbyists and activists wondered if it posed a threat to the environment.

Given the possibility of pollutants from bituminous coal, legislation was enacted to reduce, and in some cases nearly eliminate, its use. Industries hurried to find alternative energy sources. Nuclear power was seen as the future of electrical generation in the early 1970s, and while those plants were being built - a nuclear power plant takes several years to build - natural gas was burnt as a temporary measure to replace some of the coal. Jeanne Marie Laskas writes:

The federal Clean Air Act of 1970 and its amendments in 1977 and 1990 placed stringent controls on the sulfur dioxide emissions from burned coal. Acid rain was the thing. Power plants were forced to turn to more expensive but cleaner-burning natural gas, while the industry flirted with nuclear technology.

The United States had relatively few lignite reserves, and not much of it was mined or burned. The ban on such high-sulfur brown coal had little impact on industry, and seemed reasonable, at least as a temporary measure, until the matter could be further studied.

But bituminous coal was a major industry. It was, and is, a major source of electrical power. Millions of refrigerators, microwaves, computers, lights, iPods, phones, and other devices rely on black coal. Electricity prices increased significantly and suddenly as utility companies tried to quickly find other sources of power. Jeanne Marie Laskas records the impact of this shift in fuel, as thousands of people lost their jobs:

Coal? Suddenly, you could hardly give away the stuff they mined in the East, the medium-sulfur bituminous coal of the Pittsburgh Number 8 seam and similar-grade stuff of the 6A seam.

The media gave black coal a bad reputation and called it “dirty.” Activists had yet to demonstrate any clear link to alleged environmental damage. For the sake of possible connections between bituminous coal and pollution, lobbyists were willing to demand huge strip-mining operations in the western United States, which yielded a type of coal which the industry deemed inferior to bituminous:

That coal burned dirty. Power companies turned to the far less efficient but cleaner coal out west, where very large-scale strip mines became coal’s new cash crop. Mines throughout Pennsylvania, Ohio, Kentucky, and West Virginia closed as the industry in Appalachia went into a free fall.

A full-fledged economic disaster threatened thousands of mining families in the eastern states, while all Americans faced rising electrical prices. Regulations were crippling the ability of one large industrial sector, and retarding the ability of several others - all because of an allegation of a hypothetical risk of environmental damage.

Happily, a total disaster was avoided: “The eastern mines started reopening in the late 1990s,” Laskas notes, writing in 2012:

The mines reopened because the power plants had figured out how to burn that gloriously efficient dirty coal and was the emissions, meeting EPA standards. They’re still reopening today, at a fierce rate, thanks to “clean-coal technology.”

Although the “scrubbers,” as the emissions-reducing devices are called, removed even the possibility of environmental harm, they did raise the cost of doing business, and so did not completely remove the burden from ordinary families who must pay for their electrical power needs.

Despite continued attacks from regulators, the coal industry experienced a partial renaissance.

Scientists are figuring out how to convert coal into liquid fuel to power cars and jets. The country is in a decidedly passionate mood to let go of its dependency on foreign oil.

Geologists continue to find new coal reserves, both anthracite and bituminous. Because alternative energy sources - like solar, wind, and geothermal - are still decades away from contributing a significant percentage to the nation’s electrical supply, coal, together with nuclear power, remains the most likely option for the future.

The opponents of the coal industry falls into two camps: first, the sincere environmentalists, who are concerned about the possibilities of environmental harm, no matter how remote or hypothetical; second, the cynical manipulators, who exploit environmentalism as a cover for their true motive, which is a desire to harm the U.S. economy and reduce the standard of living for the ordinary citizen.

The United States has, needs, and can benefit from its large coal reserves, and can do so without measurable harm to the environment. The only obstacle to coal, and to the health of a large segment of our industrial sector, is politics.

Friday, July 18, 2014

Obama: the New Nixon?

Scholars continue to find President Nixon to be a complex and intriguing figure. Possessing both keen insight into policy and an excess of personal ambition, Nixon alternated between brilliant political maneuvers and tragically self-defeated power-grabs.

When he discovered that his campaign staffers had broken into, and attempted to steal information from, an office in the Watergate building complex, his pride prevented him from simply turning them over to the police. Had he done so, he might have retained the presidency. But instead, like Shakespeare’s MacBeth, his ambition and pride led him down the path to destruction.

But the Watergate scandal was merely the occasion for further investigations into, and revelations of, improprieties in the Nixon administration. His use of the IRS to bully his enemies was troubling. The press labeled his administration “the imperial presidency” because of his overbearing and officious attitudes and expectations. Matt Kibbe writes:

In January 1973, Richard Nixon ended the military draft in the wake of a series of high-profile draft-card-burning protests by antiwar activists. (That’s right, a Republican ended the military draft. And it was Nixon.) His presidency would soon enough end ignominiously, though, in part due to his eagerness to use the IRS to selectively punish his political enemies. The Democrats, the Republicans, the left, and the press were all outraged by this remarkable abuse of executive power.

The parallels between Nixon and Obama are striking: the use of the IRS to harass political enemies; the “imperial” attitude; illegal monitoring of telephone conversations and other information intercepts for political, not policy, purposes; the staff’s functioning as a White House “under siege” administration; and a growing psychological distance leaving the president “out of touch.” Matt Kibbe continues:

The current IRS scandal, where the agency systematically targeted moms organizing their communities to defend constitutional principles like the freedom to associate and peaceably assemble, elicits no such outrage from Democrats or the many tentacles of leftist activist organizations. Few seem willing, or even interested in, defending everyone’s civil rights and the First Amendment protection of political speech those guys. How sad.

Obama may be spared Nixon’s fate, however, because the media are either inclined, or required by their employers and owners, to be less critical of Obama, and because the machineries of Congress have either been neutralized or are controlled by Obama’s partisans.

Thursday, July 17, 2014

The Senate Breaks Bad

Since the United States Congress held its first meeting in 1789, the bicameral legislative process has been adjusted and refined over the centuries. Many small changes, and a few large ones, have taken place, but perhaps none more impactful than the Seventeenth Amendment in 1913.

Originally, the Constitution called for the legislatures of each state to elect two senators. The Constitution did not specify how the legislatures were to elect them, it merely said the senators were to be “chosen by the legislature” of each state. In practice, the state legislatures usually chose the senators by a simple majority in each of the legislature’s two houses.

The Seventeenth Amendment introduced the direct election of senators by the electorate of each state. Those in favor of the amendment indicated two reasons for their support of it: first, they felt that the original system created opportunities for corruption; second, there had been several cases of deadlocked state legislatures which sent, for a period of time, no senator to the national capital because they could not agree.

Those opposed to the amendment noted that opportunities for corruption would also be present after the adoption of the amendment, and that the deadlocked legislatures remained so for relatively brief periods of time, after which a duly appointed senator was properly sent to the Congress.

The amendment also reduced the stability of the original system, in which representatives were directly elected and senators chosen by the state legislatures. The original system balanced the more-quickly changing opinions of the voters with the more stable configurations of the legislative bodies, whose blocs remained steady between elections.

In favor of the amendment were William Jennings Bryan, who at the time was Secretary of State, and William Randolph Hearst, who owned and controlled majors newspapers across the United States. Hearst was able to manipulate media coverage of discussion about the amendment prior to its adoption; Hearst’s influence was a decisive factor in moving both individual states and Congress to approve the amendment.

Opposed to the amendment were Elihu Root, who had been both Secretary of State and a member of the U.S. Senate, and George Frisbie Hoar, a senator from Massachusetts who died before the amendment was approved.

The net effect of the amendment’s adoption was to make the election of senators into a sort of national referendum. While the smaller size of congressional districts ensured that the direct election of representatives to the U.S House of Representatives remained a matter of local concern, the state-wide nature of senatorial races effectively removed local concerns from those races, and attracted political attention and campaign resources from out of state.

Before the amendment, local concerns dominated the selection of senators. After the amendment, out-of-state factors influenced senatorial elections to the extent that truly local matters, the matters which senators are supposed to represent in Washington, were nudged aside by national questions.

Mathematically, if there are senatorial elections in one-third of the states in a given year, then two-thirds of the states - or more precisely the political groups in two-thirds of the states - are free to direct their resources to the campaigns going on in other states. Thus out-of-state influence on what is supposed to be a local election might be twice the domestic influence.

The U.S. Senate, in the wake of the Seventeenth Amendment, changed its tone. No longer representatives of their home states, the senators were now representatives of nationwide political movements. The Senate thereby became a sort of “club,” as Matt Kibbe notes:

The filibuster, a last-ditch attempt by a single member of the Senate to stall consideration of legislation, has a storied history in legislative warfare. Typically, this roadblock has been used to defend the status quo inside the cloistered walls of the most closed, insulated institution in America - the U.S. Senate. They don’t call it a club for nothing: It’s a privileged cadre unaccustomed to the bright light of public attention. And that’s the way they like it.

The impact of the Seventeenth Amendment, transforming the Senate into a club-like atmosphere, had implications for many pieces of legislation, e.g., for the 1957 Civil Rights Act. Backed by President Eisenhower, the bill intended to clearly restate the voting rights of Blacks, and articulated specific measures to ensure that those rights were fully available for Blacks. Eisenhower’s popularity gave the bill reasonably good prospects of passage.

A truly representative body - i.e., a body in which the legislators represented the interests and opinions of the state which sent them to Washington - would have quickly passed with bill without objection. That’s what happened in the House of Representatives. But the Senate, in its post-Seventeenth Amendment condition, was different: the senators did not feel themselves compelled to represent their home states. They were representing political parties and interest groups - they were representing the powers which had put them into office.

And so it was that there was significant Senate opposition to the 1957 Civil Rights Act. Matt Kibbe continues:

The most infamous use of the filibuster, of course, was by Democratic senator Strom Thurmond, then a segregationist who famously fought against the the efforts of Martin Luther King.

Senator Thurmond organized and energized the senators from his party. If they could not stop the bill entirely, they would at least attempt to remove its most effective provisions.

Thurmond would later argue that “King demeans his race and retards the advancement of his people.”

The “civil rights movement” was in motion and had gained momentum during the early 1950’s. Eisenhower, during WWII, had desegregated the army’s combat troops, and during his presidency worked to systematically implement that desegregation throughout the armed services.

The momentum of the civil rights movement was strong enough that only a legislative body which had ceased to be truly representative of its home states could afford to oppose it. The House of Representatives, more closely reflecting the electorate, was more supportive of the 1957 Civil Rights Act. As Matt Kibbe notes,

In 1954, the landmark Supreme Court case of Brown v. Board of Education had ended “separate but equal” and started the process of integrating schools all over the country. A year after that, Rosa Parks famously refused to sit in the “blacks only” section of a bus in Montgomery, Alabama. Her bravery helped force racist government policies into the public psyche.

Contradicting the Supreme Court decision, contradicting public opinion, and contradicting the American voters, the Senate, now safely removed from public pressure, now clearly under the direction of lobbyists and political parties, was comfortable in its opposition to the civil rights bill.

On August 28, 1957, at 8:54 P.M., Thurmond took the Senate floor in opposition to major provisions of the 1957 Civil Rights Act. He would not stop until more than twenty-four hours later. He denied that any blacks were being denied a right to vote and argued that every state already had sufficient voter rights protections in their existing laws. “I think it is indicative that Negroes are voting in large numbers. Of course, they are not so well qualified to vote as are the white people.”

Initiating a filibuster under any circumstances requires audacity, but Thurmond, and his fellow senators from the Democrat Party, were not only starting a filibuster, but doing so in direct contradiction to a clear and growing public opinion - the voters of the nation were affirming the civil rights movement in increasing numbers, and the Supreme Court had voiced itself in the Brown decision.

African-American political freedoms had fallen from the highpoints they had reached between the late 1860’s and the 1890’s. After enduring the humiliation of having their voting rights violated for several decades, Blacks demanded a return of their political liberties, and the majority of United States voters sided with them. But safely insulated from the pressure of having to represent their alleged constituents, the senators blithely moved in the opposite direction. Matt Kibbe writes:

To this day, Thurmond’s remains the longest verbal filibuster in U.S. history. Ultimately, the Civil Rights Act of 1957 passed the Senate and was signed into law, but not before Thurmond and his Democratic colleagues had stripped the legislation of key provisions.

In a masterpiece of political deception and doublespeak, Thurmond, whose presence in the Senate was the result of a violation of states’ rights, claimed that he was acting in the name of states’ rights. The seventeenth amendment harmed the rights of states to freely choose their own senators; the senators now so chosen could safely ignore the states’ desires.

Had the states truly had their rights, the nature of the Senate would have had a different composition, a different self-conception, and a different set of operating habits. The presence of Thurmond and others like him was a direct result of a violation of states’ rights. Had states’ rights been observed, the opposition to the Civil Rights Act of 1957 would have been weaker. Matt Kibbe continues:

Segregationists like Thurmond had thoroughly corrupted the notion of “states’ rights” and the Tenth Amendment to the Constitution - vital and legitimate check on federal abuses of power - to obfuscate their real agenda. Thurmond and many others used the excuse of federalism to justify the oppression of individuals - unequal treatment under law - but that was never the intention of the federalist system. Yes, the states must not submit to federal tyranny, but that does not give them license to be tyrannical themselves. It was all about the rights of the individual.

The result was mixed: the Civil Rights Act of 1957 was passed by the Congress, and President Eisenhower signed it into law. But the act had been weakened, and some of the key provisions altered, by the Democrat Party’s filibuster. This was partly remedied when Eisenhower supported the Civil Rights Act of 1960, which was then passed by the Congress. But three years were wasted.

After Thurmond’s filibuster ended, and after Eisenhower signed the bill into law, Arkansas governor Orval Faubus denied the rights of Black students to attend a public high school in Little Rock. In a display of resoluteness, President Eisenhower sent the 101st Airborne Division to escort the African-American students into the high school.

In the wake of Thurmond’s filibuster, the Republican Eisenhower would not let another segregationist member of the Democrat Party, in this case Orval Faubus, stand in the way of equal civil rights. As Matt Kibbe writes,

Free people should judge others based on the content of their character, not the color of their skin. If you believe in liberty and the dignity of the individual, you inherently believe in treating everyone equally under the laws of the land. This is a first principle. It’s nonnegotiable. Defending the rights of the individual, including equal treatment under the law, is a fundamental responsibility of a constitutionally limited government, as James Madison had so eloquently argued in Federalist 51.

Thus, in a long and complex narrative, the Seventeenth Amendment was passed by a progressivist movement, headed by a racist president, Woodrow Wilson, who, as head of the Democrat Party, imposed racial segregation into the offices of the federal government which had been racially integrated since the Reconstruction era. That same amendment, and its effect on the culture of the U.S. Senate, would be used half a century later as Strom Thurmond organized his fellow Democrat Party senators to oppose civil rights.

Sunday, June 22, 2014

Downgrading the U.S. Federal Government's Creditworthiness

In 2011, major financial agencies reduced the rating of bonds and other forms of debt issued by the United States federal government. Simply put, the USA isn't as good a risk as it used to be.

This doesn't mean that the nation is teetering on the edge of bankruptcy. Yet. But it does mean that by standards as objective as any can be, we've not done a good job of managing our budget.

Naturally, efforts were made to hold someone responsible for this. Who to blame? The Democrats and Republicans blame each other; the liberals and conservative blame each other; the Congress and the President blame each other. Perhaps the most realistic, and least political, location in which to lodge blame is in the past, about forty years earlier.

President Lyndon Johnson, under his slogan of a "Great Society," orchestrated a mathematical impossibility, a sort of generational Ponzi scheme stretching over decades. One financial engine motivating the eventual downgrade of the nation's credit is the Medicare Plan. Kevin Williamson writes:

The blame for Standard & Poor’s downgrade of U.S. sovereign credit belongs almost exclusively to the president, the most socialistic American chief executive in living memory, but also to key congressional Republicans, who got carried away by their emotions. The president is Lyndon Baines Johnson, and the congressional Republicans are the 70 members of the House and 13 senators who, led by Rep. John W. Byrnes (R., Wis.), voted to create Medicare, a welfare handout disguised as an insurance program and structured as a Ponzi scheme. The handiwork of these illustrious gentlemen has taken some time to catch up with us, but catch up it has.

One definition of 'Ponzi scheme' in a common dictionary tells of "the payment of quick returns to the first investors from money invested by later investors." LBJ's Medicare setup was never financially viable; but it took forty years to reach critical mass. Exacerbating factors included other Great Society programs like Medicaid.

Medicare cannot go out of business, no matter how boneheaded its financial decisions. Because enrollment in Medicare is automatic rather than voluntary, because it is funded mainly out of payroll taxes, and because its premiums are mostly symbolic, Medicare encourages beneficiaries to make maximum use of it, which drives up both overall healthcare expenses and the deficit. We have managed to cut ourselves with both sides of that double-edged sword.

Hence the downgrading of the USA's credit. Medicare is an example of what some economic textbooks call a perverse incentive. Selling insurance for far less than its market value encourages consumers to buy it and use it - and those most likely to see the benefit to themselves in the arrangement are those least likely to need it: educated consumers, used to calculating comparative advantages, tend to come not from the lowest income classes. Kevin Williamson explains that while a number of various Great Society programs pose dangers to the nation's credit rating, Medicare is by far the most dangerous, precisely because it appeals to those savvy consumers who need it least:

And it’s really Medicare. Medicaid is a clear and present fiscal danger, but it will be relatively easy to fix, because it is easier to take benefits away from poor people than to take them away from well-off people, and the oldsters who collect Medicare are one of the most affluent and therefore politically powerful demographic groups in the country, age and wealth going together in our society more or less.

Medicare is also an example of a regressive tax. The poor are likely to put more money into it, while getting less out of it. Life expectancy alone would insure this regressiveness, but education does as well. Well-educated people tend to live longer and accumulate greater net worths.

It is worth keeping in mind that, as a National Bureau of Economic Research report found, “Medicare has led to net transfers from the poor to the wealthy, as a result of relatively regressive financing mechanisms and the higher expenditures and longer survival times of wealthier beneficiaries. Even with recent financing reforms, net transfers to the wealthy are likely to continue for at least several more decades.”

When the USA's credit rating was lowered in 2011, it was the fault of neither President Obama nor President Bush. It was a long time coming, and it was due to President Johnson.