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Circumventing Congress

from Charles C.W. Cooke in The National Review, Our Presidents Are Beginning to Act Like Kings

Most important of all, why are we not up in arms when the president openly abuses his position as the head of the bureaucracy in order to circumvent Congress’s explicit will? When even left-wingers such as Georgetown Law School’s Jonathan Turley are warning that Barack Obama has now become “the very danger the Constitution was designed to avoid,” should our ears not perk up? Our Founders’ ancestors in Britain spent centuries trying to rid their constitutional structures of opportunities for abuse. Why are we so indifferent to their return?

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A Poor Guide to The Future

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A NYT article, The Debate About America’s Best Days  about Robert Gordon’s The Rise and Fall of American Growth sounds like another academic pontificating how our best days are behind us.  Reminds me of economists from the 1970s and early 80s who made the same claim- I just cannot remember their names- neither can anybody else. (wait… just came to me….  Lester Thurow)

 “For reasons I have never understood, people like to hear that the world is going to hell,” the economic historian Deirdre N. McCloskey  of the University of Illinois, Chicago, wrote in an essay about “Capital in the Twenty-First Century,” the blockbuster about income inequality by the French economist Thomas Piketty. “Yet pessimism has consistently been a poor guide to the modern economic world.”

While reading the article I thought of the term for my economic outlook- ‘cynical optimism’- I am optimistic sbout the future and man’s potential, but I have little faith in those who predict or worse, pretend they can influence or control it.

While reading Rove’s book The Triumph of  William McKinley, about his  campaign it was clear  that after major recessions in 1873 and 1893 (and the doozy still to come in 1907), they were pretty pessimistic then as well.  It appears that eras of great economic growth coincide with eras of great economic and political turmoil. I would not assume that either is a cause of the other or predict accordingly.

It would seem that economists,  of all professions,  would understand the danger of predicting the future based on the past or even the current trend.

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Pre-Progressivism

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Henry Oliner 2016 01 21

In the campaign leading up to William McKinley’s campaign of 1896 the two hottest topics in political debate was tariffs and currency.  Consider them as prominent as health care and immigration are today. Tariffs and currency were the litmus test issues that divided loyalties within and between the parties.

The constitution depended on tariffs for funding the central government.  It was not the absence of ideology against income tax that defaulted to tariffs; it was the lack of income tax as even a practical consideration.  There were few with a regular weekly income that could be taxed, and there were few records of anyone’s income. In the aftermath of a revolution against one central authority few had the tolerance for individuals to pay such a tax.  Trade tariffs were much easier to monitor because trade came into relatively few ports.

Tariffs served two purposes: first to supply needed revenue and second to protect infant industries which became just another special interest.  As the nation became industrialized and corporations and trusts grew this protection became quite valuable and businesses lobbied hard to maintain and increase those tariffs.  The more egalitarian also considered the jobs that were protected by those tariffs.

But the early progressive thinkers saw that the tariffs protected wealthy businessmen at the expense of the consumer; an argument that would sound familiar to a free market economist today.  The tariffs were fought by the south and the west who imported more consumables while the north reaped most of the benefits of protection. Progressives pushed for an income tax as an alternative to the unfairness they deemed part of trade protectionism.  They succeeded in the ratification of the 16th Amendment in 1913 to allow the Federal Income Tax.

But in the decades before the Federal income tax the trade issue was one of the two most contentious political issues of the day.  The other issue was currency.

Many of the same segments that lobbied for lower tariffs also argued for a silver based currency or at least some portion of the currency to be silver backed. It was an inflationary policy that was deemed to help the farmers get a better price for their product.  Gold backed currency as considered a preference for the wealthy Wall Street business and financial interests.  Advocates of a gold backed currency also recognized that foreign currencies were gold based and that to rely on silver in the absence of any international standards about silver valuations would have adverse consequences for our trade and economic stability.

Silver advocates were already suffering adverse consequences from the severe financial Panic of 1873 and the Panic of 1893.  From their perspective their interests were being sacrificed to the gold based currency dogma of eastern financial interests. After the additional Panic of 1907, leaders focused on a more systemic solution to our volatile economy which eventually gave birth to our Federal Reserve Act of 1913. The story of the complicated return to an American central bank was well told in America’s Bank by Roger Lowenstein.

Although the country was growing substantially in population, land mass and wealth the volatility (three major economic panics in 44 years) and its unequal effect on the population created a yearning for something different.  History would reveal the success of the progressive solutions.

Before in history we have seen periods of great violence and volatility co-exist with great advances in science and commerce. Thinkers ponder how each trend fuels the other.  Given the development of technology and its ever increasing speed and a century of ideological and tribal violence the pursuit of both stability and equality proved to be far more fleeting, perhaps beyond the capability of any single ideology.

 

 

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Invitations to Executive Caprice

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from Charles C.W. Cooke in The National Review, Our Presidents Are Beginning to Act Like Kings

At best, Wilson’s argument is a good-faith but terribly naïve attempt to make government “work.” When the Supreme Court rules, as it did in 1989, that in an “increasingly complex society, replete with ever changing and more technical problems, Congress simply cannot do its job absent an ability to delegate power under broad general directives,” it is echoing the contention of men who believed that it was important to take certain questions out of the political realm so that they might be better answered.

Somewhere within this contention there is a kernel of truth. If the federal government is to work effectively, at least some delegation will have to be permitted. But while it is one thing to acknowledge that Congress does not have the time to engage every small-ball question, it is quite another to endorse legislators’ filling our laws with endless invitations to executive caprice. Here, as elsewhere, to accept that occasional exceptions must be granted is by no means to demolish the rule. There is a difference between a legislature’s charging the executive with certain narrowly specified tasks and a legislature’s delegating broad legislative powers to that executive. Slowly but surely, we have forgotten this.

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Children of Legislatures

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from Charles C.W. Cooke in The National Review, Our Presidents Are Beginning to Act Like Kings

As Thomas Jefferson had it, “the natural progress of things is for liberty to yield, and government to gain ground.” There are no new fights in politics.

Do we know this? In the United States, as in the rest of the Anglosphere, we seem to believe that we are the children of legislatures, not of kings; the beneficiaries of careful reasoning, not of iron will; the heirs to a safe political settlement immune to disintegration. That we are proud of our institutions is understandable. But our unshakeable confidence in their permanence is not. There is nothing written in the stars that secures in perpetuity our free system of laws. There are no stone tablets upon which legislative supremacy and judicial integrity are guaranteed against usurpation. Men’s hearts are no less ambitious this week than they were in the era of the pyramids.

John Adams characterized the office that Obama holds as enjoying “the whole executive power, after divesting it of those badges of domination called prerogatives.” In this assessment he was reflecting what might be regarded as the Founders’ central conceit: that when the laws that govern men’s fortunes are subject to the whims of the powerful rather than to the consent of the governed, there can be no liberty. Are we at liberty?

HKO

A tenet of the Progressive movement was a non partisan administrative state of educated and credentialed experts to handle complex matters considered beyond debate; what Wilson considered a unified will.  The idea of a unified will is a myth- it is only unified within the confines of one group who inevitably uses government power to force others into compliance. The concept of a ‘unified will’ has a distinctly fascist whiff about it. This is the tyranny of central planning Hayek wrote about in The Road to Serfdom. But more important, as Cooke points out, this unelected group has grown into a fourth branch of govenment and has come to undo many of the protections the founding fathers carefully considered and wrote into the Constitution.

This piece is well worth the time to read in its entirety.