Monday, February 01, 2010

Ending the bipartisan era

The following is a personal outlook paper of The Jacksonian Party.

Amongst the gloomy news on economics, on inane attitudes towards terrorism and terrorists, and the general disheartening way that the current Administration treats our National Friends & Allies, there is only one back-handed way in which this attitude actually is a help.  With the election of President Obama and a Democratic super-majority in the House and Senate we have seen what you get when you aren't 'bipartisan' and don't accommodate 'across the aisle', and what happens when your ideology is put forth in mush-mouth bills that ramble on for a thousand or two pages: you get challenges to the good sense of the Nation.

Ushering in a super-majority was supposed to be a 'sea change' and a 'permanent change' in politics towards the Democratic Party, and yet that party now unravels at the seams as its most trenchant ideologues are in charge of the House, Senate and White House, yet those ideologues are finding that the only way they can pass anything is by bribing their own party members and there often aren't enough of those to form a simple majority.  Instead of offering a JFK style recovery via small business and personal tax cuts and trimming the federal budget, this group of ideologues and their accomplices have sought to expand federal spending, federal power, let repeals of taxes lapse and to put in place newer, larger bureaucracies that create nothing and manage so poorly that they aren't even efficient.  By intruding on the banking industry to cover for one large bank, Citi, and forcing other banks to take failing financial institutions, like the Bank of America in the Merrill-Lynch deal, and by not seeking to repeal the power of the FHA, Freddie, Fannie, Ginnie and Federal Reserve to push AAA security ratings on loans that are taken by those unable to pay them back, and through the threat of even more regulation, small businesses aren't expanding so as to get the economy out of the doldrums.  A large GDP growth is in inventory, only, while actual growth is at less than half the 5% mark of growth.  Talking up small businesses now, in a climate that is hostile to them, won't work until the atmosphere changes and the institutions that oversaw the financial and banking problems, including the SEC, are brought to task for their ill-advised backing of schemes that would not work.  Schemes started by Congress like CRA and its follow-ons, plus banking regulations pushing more money out the door than can be covered by borrowers.

These regulatory systems were set up by bi-partisan agreements in Congresses for decades, and the founding of financial and mortgage institutions dates back to 1914 for the Federal Reserve and to the FDR Administration for mortgages and SEC.  These institutions have never been called into account, never audited and never had the basis of their standing questioned by later Congresses to see if they were doing fiscally prudent oversight or just bowing to Congress wanting fiscally imprudent schemes.  There is no single party to blame in this as both parties have had majorities in both Houses and exchanged the Presidency multiple times over the last 60 years.  The bi-partisan of National Defense during the Cold War also ushered in an era of Progressive government expansion for social programs based on the foundations laid by Woodrow Wilson and FDR with the Federal Reserve, SEC, FHA and Social Security. To that was added more mortgage based systems, expansion of Federal Reserve powers, medical subsidies (in the form of Medicare/Medicaid), affirmative action programs (which changed government outlook from color-blind to color-biased), welfare, unemployment compensation, massive regulatory systems for 'the environment', and expansion of powers into education and firearms.

The characterization of these as Progressive Government is one that dates back to the Progressive Era in which the power of the States was reduced via the Constitution and Public Law, which I have gone over previously.  This has changed the public dialogue from the Constitution as a negative rights document, in which rights are granted to government from the people, to a 'positive rights' conception of government in which government grants and then must support new 'rights' that can only be had through government.  These new 'positive' rights, held and asserted by government, come at the cost of your own rights as an individual, which I covered previously but do let me note that many of these 'rights' derived from government are de-basement of personal liberty held by you.  A woman has the liberty to have an abortion, but may have the right to do so circumscribed by public law.  One has the liberty to seek out health care, but when that is supported by the government there are multiple problems on supply, demand and cost that get thrown into disarray as the government is not a positive economic actor (it does not create wealth) but a negative one that taxes wealth and then impedes the movement of wealth via regulation which is an impediment to personal liberty.  All regulations, good and bad, do this: they are negative in nature and stop the free flow of personal decisions based on government fiat.  Anyone has a right to seek health care, and if their liberty can provide or if the charity of society or other individuals can help provide it, then it can be received.  Government by placing a price on the priceless renders a value judgment not based on personal outlook and liberty, but governmental cost outlook, thus pricing your health and determining if you should have access to health care at all.

Encroachment of government into the daily lives of individuals to control those lives is the aim of Progressive Government, and it has many good-meaning, swell hearted backers who wish to have government tell you how to live, work, play and do every last thing in your life: from when to wake up to what you eat to how you work to what you work at to how long you work to how much you are compensated.  These are all parts of your liberty and freedom that Progressive Government aims to include in its umbrella of 'positive rights' and make it impossible for you to exercise liberty on your own behalf.  This could not happen without bi-partisanship in the Legislative Branch and appeasement of such goals from the Executive and Judicial Branches of federal government.  Time and again government 'rights' to your property and how you lead your life trump personal liberty and freedom, be it from the Kelo decision on eminent domain to the Raich decision (an article by me here on that) on being able to use plants that you grow, government at all levels has won on these grounds of property rights and personal liberty in your own home.  These are not problems that are unforeseen, and as far back as the debates over the Constitution there were those who pointed out that Congress would have this tendency over time to regulate and tax everything in sight.  What is fascinating is that this concept of government expanding was well known so far back and described, even though not named as Progressive, and even the backers of the Constitutions in the public fora (Hamilton, Madison and Jay as Publius) acknowledged that any system designed by man can be brought down via other men in later times.  It is to their great benefit that this took nearly 140 years to start as a serious project under Progressivism, and to our great dismay of not having recognized that over the next 90 years as just that: an undermining of a Constitutional Republic by Amendment and Public Law.

With the end of the Cold War, however, came the end of the rationale of the interim period of Progressive Government (1948-1991), and those coalitions of bi-partisanship frayed during the 1990's with the Moderates of the bipartisan and Progressive persuasion becoming those who would dispense the federal goodies during that decade.  Only the project to bring down unlimited welfare was achieved by those who are fiscally conservative, and while that was a great accomplishment that force was spent against the monobloc of 'moderate' Republicans and Democrats of the 'Third Way' form of Progressivism.  Socialists would describe this as incremental socialism or reform socialism that attempts to reform a capitalist system into socialist tendencies before it is ready for a full socialist transformation.  Many socialists actually were against that post-1918, not only due to the NOV 1917 Revolution, but as it put a clear and heavy dividing line between capitalism and socialism.  American Progressivism, influenced by Bismarck state-social reformism took a divergent path from European social democracy and put together a different constellation of reform-based socialism under that title of Progressivism.  Theodore Roosevelt proclaimed the marginalization of conservatives in his autobiography at Project Gutenberg in Chapter X:

For the reasons I have already given in my chapter on the Governorship of New York, the Republican party, which in the days of Abraham Lincoln was founded as the radical progressive party of the Nation, had been obliged during the last decade of the nineteenth century to uphold the interests of popular government against a foolish and illjudged mock-radicalism. It remained the Nationalist as against the particularist or State's rights party, and in so far it remained absolutely sound; for little permanent good can be done by any party which worships the State's rights fetish or which fails to regard the State, like the county or the municipality, as merely a convenient unit for local self-government, while in all National matters, of importance to the whole people, the Nation is to be supreme over State, county, and town alike. But the State's rights fetish, although still effectively used at certain times by both courts and Congress to block needed National legislation directed against the huge corporations or in the interests of workingmen, was not a prime issue at the time of which I speak.

He then goes on to speak of the matter at hand:

This had, regrettably but perhaps inevitably, tended to throw the party into the hands not merely of the conservatives but of the reactionaries; of men who, sometimes for personal and improper reasons, but more often with entire sincerity and uprightness of purpose, distrusted anything that was progressive and dreaded radicalism. These men still from force of habit applauded what Lincoln had done in the way of radical dealing with the abuses of his day; but they did not apply the spirit in which Lincoln worked to the abuses of their own day. Both houses of Congress were controlled by these men.


I made a resolute effort to get on with all three and with their followers, and I have no question that they made an equally resolute effort to get on with me. We succeeded in working together, although with increasing friction, for some years, I pushing forward and they hanging back. Gradually, however, I was forced to abandon the effort to persuade them to come my way, and then I achieved results only by appealing over the heads of the Senate and House leaders to the people, who were the masters of both of us. I continued in this way to get results until almost the close of my term; and the Republican party became once more the progressive and indeed the fairly radical progressive party of the Nation. When my successor was chosen, however, the leaders of the House and Senate, or most of them, felt that it was safe to come to a break with me, and the last or short session of Congress, held between the election of my successor and his inauguration four months later, saw a series of contests between the majorities in the two houses of Congress and the President,—myself,—quite as bitter as if they and I had belonged to opposite political parties. However, I held my own. I was not able to push through the legislation I desired during these four months, but I was able to prevent them doing anything I did not desire, or undoing anything that I had already succeeded in getting done.

The Conservative dreads radicalism and holds a 'States Rights fetish' that Theodore Roosevelt was glad to break inside the Republican Party.  Of all the issues put forward during the Cold War it must be understood that this transformation of the Republican Party from a 19th century based Conservative (which is to say conserving the Liberal basis for States Rights and the Rights of Man as an Individual, or Jeffersonian Liberalism with Federalism) to a modern Progressive Party means that the concepts of 'fiscal restraint' espoused by Moderates in the Republican Party is not one of restraining spending or government, but in restraining the expansion of both to a moderate degree.  It is not on the table that government can or should expand, but that it will and needs to do so slowly.  For all that was espoused by Ronald Reagan coming into office, the government he had under him can be described as moderate in its expansion, not that it did not expand or even retract in scope or size.  Dissolving a public union is not on the level with, say, dismantling the Dept. of Education or Energy, or stopping the excesses of HUD or Dept. of Agriculture.  In this view Ronald Reagan, scion of so many Republicans, is seen not as a Conservative, although he talked at depth about conservatism, but as a Moderate Progressive for the expansion of government.  The concept that cutting taxes would restrain the growth of government was ill-founded and actually worked contrarily as a booming economy would signal the expansion of government with added receipts from the expanding tax base.  The legislation to do that was done by Congress.  A Congress that rejected any notion of paring down government in scope and size, and only looked to make it a bit more 'efficient' in its operation and expansion.

Old line conservatism, that of Federalism, limited government, limited taxation and diverse representation with the States holding an equal spot at the table, has very, very few adherents left in DC.  Perhaps 20 or so at most, across both Houses of Congress.  Fiscal Conservatism, which serves as a public base of understanding of how income works, has a deep and strong resonance across the Nation as households are used to balancing their books, paying off their debt and going into bankruptcy when you are unable to earn your way out of debt.  Stopping that bankruptcy process for private companies via public funds is not only deeply offensive but highly disturbing as government is going outside all normal venues of operation to interfere with the standard and normal practices of finances on a grand scale.  Intrusion of the government into health care is not only offensive, but seen as a power grab by the Federal Government to directly control a major portion of the economy.  When added in to home mortgages, banking, auto industry and financial companies, the Federal Government by trying to add that portion that is health care under its purview and direct interference is seen as trying to tip its control from plurality to majority, which is sold as a 'good thing' to the people. 

What has happened with government interference in health care, to-date, with subsidies to companies and individuals via tax breaks, and direct subsidies via Medicare/Medicaid is that it sets the payments too low after having put inflators on the cost to drive them up over time.   The response by the Federal Government to inflation on payment for services is one feedback mechanism outside the Federal Reserve's purview, and by backing inflationary spending for subsidies (be it medical care or wheat futures or sugar price supports) the Federal Government takes a direct part in not only keeping up with inflation, but putting down future inflationary budgets to ensure that inflation is adopted as a means of operation.  That message comes through and the market adopts inflationary outlooks to ensure that its pricing to the government will go up at least as much as the annual budget inflators allow, if not higher.  This is not a major part of the financial system when the government is a mere consumer of goods and services, but when it directs finances and payment schedules for larger parts of the economy, the tone for minimal future inflation is set and it is the very, very rare year when prices go down or hold steady in the face of an expanding federal budget willing to pay more for what it gets.

That is minor, BTW.  Regulations pushing loans, directing finances and even directing companies to buy each other out at government behest is not only authoritarian but destructive of a financial system that depends on bankruptcy as a known failure mode.  Who will invest in a company if it is known that it will be 'allowed' to fail by government?  And why would you invest in a company 'too big to fail' and 'too big to control its finances' when it is backed by the Federal Government, as there is no way it can get a profit under public control which adds another layer of bureaucracy for 'oversight' but diffuses accountability amongst the new 'oversight' structure and the existing dysfunctional corporate structure?  Being 'too big to fail' and being supported also comes to mean you are 'too big to succeed' thus the term 'Zombie Company'.  Not dead, not on life support but undead and unable to be killed by normal means.

When business, labor and government all sit at the table together, the public is left on the outside looking in.

That is to the ends of bi-partisan government that is Progressive and expansive in its scope and depth of power: that a very unrepresentative government puts in appointed officials to run things leaving the public out of the loop.

This has been hidden by decades of talking about how 'good' bi-partisanship is, and how much it serves the public 'good' while helping get convenient means of manipulation created to the ends of such 'good' government.  Unfortunately such convenience can become too convenient, too expedient, for government:

A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.

Andrew Jackson in the Bank Veto Message of 10 JUL 1832.

That National Bank had nowhere near the powers of the Federal Reserve, SEC, FHA, Fannie, Freddie, Ginnie and FDIC.  Strange that all these powers got added incrementally, over time, as a 'good' way to 'regulate' the banking,financial and home mortgage systems.  While, taken as a whole, they are far outside the scope of powers the Congress has to delegate.

It is very, very good that partisanship has returned to DC.

It is exposing the underpinnings of Progressive Government that expands day by day, year by year, Congress by Congress further and further into the lives of ordinary Americans.

And gets opposed.

Bi-partisanship gives cover to this project.

Partisanship makes it clear.

I support highly partisan political parties trying to push their agenda through against an unwilling public.

It makes the public less willing to sit around.

And far more willing to stand up against those they elect who do not represent them.

Anyone wanting a return to 'bi-partisanship' is asking to return to incremental expansionism, and they deserve the cold hearing they will get.

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