Saturday, April 10, 2010

Why the Tea Party Doth Protest Enough

The above graph shows the growth in total government spending, including state, local and federal, divided by gross domestic product, since 1948.  Notice the asterik at the far right that jumps up above the rest of the pack.  The outlier reflects President Obama's and the Democratic Party's outlays last year.  This was the most radical movement in spending in the past 62 years.  A similarly radical increase will occur in 2010.

Notice that one can draw an arc from 1948, when Harry Truman was president, to 2010.  The arc over-arches a V shaped pattern that began in the early 1990s and ended in 2009.  The Bush administration and Republican Congress of the mid '00s began the upwarded-moving right-hand leg of the V shape pattern after 2000  by gradually reversing the spending cuts of the Republican Congress during the Clinton years.  In other words, the federal government's best performance from the standpoint of an advocate of small government was during a Republican legislature and Democratic presidency. 

The Obama administration and Democratic Congress have effected  a radical shift from fiscal conservatism and the conservative consensus of the past 30 years.  The Democrats' radical shift amounts to a return to the social democratic arc (in the above graph) of the mid twentieth century.  In other words, the election of President Obama represents a return to the ideas of social democracy that were prevalent before the election of Ronald Reagan in 1980.

The next graph above shows the growth of non-defense government spending as a percentage of gross domestic product since 1948.  There were high post-World War II expenditures that were reduced during the Truman years.  From the early 1950s, the Eisenhower years, through 1980 there was a rapid increase in non-defense federal spending.  The election of Ronald Reagan changed the trend, but only moderately.  Between 1980 and 2010, three decades during which small government conservatives had a voice in government, spending fluctuated but remained roughly constant.

President Obama's spending levels represent a radical break back to the pattern of  the social democratic years of the early 1950s. Notice that the small government movement that President Reagan started did not reduce non-defense government spending.  A Republican Congress impeached Bill Clinton and proposed cuts in the Contract with America, but was unable or unwilling to execute sharp reductions in government spending.  The late twentieth century Republicans were moderate.  For many in the small government movement they were too moderate.  The Tea Party is on the avant garde of change on behalf of small government.

President Obama and congressional Democrats washed away three decades of moderation in a single, radical swipe.  We of the Tea Party anticipate further radicalism from the Democrats.  The Tea Party is insisting that the Republicans develop a taste for realistic change.

When defense spending is included in the ratio of federal government spending to gross domestic product in the above chart, several shifts become evident.  Until the late 1980s, including the Reagan administration, spending increased.  The difference between President Reagan and his predecessors was that he focused on defense spending and downloaded spending to the states via his new federalism.  The military spending paved the way for the peace dividend of the early 1990s.  As well,  the Republican Congress  gradually limited non-defense federal spending.

President Bush increased spending, partially for military reasons associated with the wars in Iraq and Afghanistan. The shift was not nearly so pronounced as it was in the first year of the Obama administration with its stimulus package.  It is true that Bush reversed much of the progress that the Republicans made from the early 1980s until 2000.  However, Bush's spending increases were not so radical as Obama's.    

The final graph is of state spending divided by Gross Domestic Product since 1948.  There was a significant dip in state spending during the 1970s during President Nixon's new federalism and then a significant increase during President Reagan's new federalism.

During the Bush years state spending advanced once again.  Currently, state and local spending divided by gross domestic product is at the highest level in history, and federal government spending divided by gross national product also is at the highest level in history.  With the stimulus and health care law, the Obama administration has altered federal spending to fit the mid twentieth century pattern that had ended in 1980 (as represented by a line that can be drawn from early 1950s non-defense federal spending levels to the Democratic Party's spending level in 2009 or as an arc with respect to total government spending).

Advocates of small government may rightly conclude that the Republicans' chief error during the past 30 years was  moderation.  The Obama administration and the Democratic Congress are interested not in consensus but in a radically reactionary return to the social democracy of the Eisenhower, Kennedy, Johnson and Nixon era.  The public rejected that consensus in 1980 and non-defense spending was kept roughly constant.  This is consistent with a moderate perspective whereby the Republicans recognized the interests of a large segment of the population that still believes in the social democratic programs of the 1930s to 1970s. Many in the small government movement would like to see those programs wound down.  However, the Democrats do not respect those who believe in small government in any way that parallels the respect that Republicans showed to Democrats.  This needs to change if the Republicans hope to regain office.

Small government advocates do not believe that government solves problems; that the Obama health reform law will save lives; or that current government programs such as the department of education or the department of energy have succeeded.  In future, given the radicalism that Democrats have shown, those who believe in small government have no ground to exercise moderation. The only explanation for doing so will be incompetence.   Were the Democrats, like George W. Bush, moderate in their big government stance, moderation among small government advocates might be a realistic strategy.  But to maintain a moderate bargaining position in the face of President Obama's radicalism would be absurd.

Hence the Tea Party.  The mass media has been unwilling to comprehend the Tea Party's nature.  When I Google the words "tea party racist" I obtain more than 2.1 million hits. But the Tea Party meetings I have attended have contained less racism than the average university faculty meeting. The Tea Party movement is not racist and it is non-violent. It is composed of people who were willing to accept the disappointing, moderate consensus of the Reagan and Clinton years, but whose moderation has been betrayed.

Friday, April 9, 2010

American Breakfast Tea

Paul Smart, editor of the Olive Press and Phoenicia Times published an article about Glenda McGee's, Chris Johansen's and my forming the Woodstock-Shandaken-Olive Tea Party in the Woodstock Times this week. The article begins:

"We're drinking lattes and regular bold coffees in the back of the Kingston Starbucks, talking about the starting up of a new Olive/Shandaken/Woodstock offshoot of the year-old Kingston Tea Party group that meets monthly at the Ulster Town Hall. Mitchell Langbert and Glenda McGee are noting how they wished their friend Chris Johansen had been able to make it, since he was the one working the organizational details involving who'd be joining, when and where meetings would be occurring, and how the new local Tea Party effort would operate."

Read the whole article here.

Congressional Moron Thinks Guam Will Sink

 Adding to the federal government's self-destructive problems is congressional mental unfitness. Here we have a video of congressional moron Hank Johnson asserting that Guam will sink because of too much population. Johnson is one of the leading minds of the Democratic Party. (H/t Erich Deagostino.)

Wednesday, April 7, 2010

Newt Gingrich--Failed Republican

Newt Gingrich was coauthor of the Contract with America in 1994 and became Speaker of the House in 1995, claiming that he would reduce government, abolish the department of education, and end corruption. Instead, while he led Congress, he got embroiled in corruption scandals that mirrored those of the Democrats he had replaced.  The Republican Congress reduced  federal spending as a percentage of gross domestic product, GDP, chiefly because of the "peace dividend" that had resulted from the end of the Cold War. Gingrich and his Congress did little to reduce spending other than cut military spending, cuts that began (as a percentage of GDP) in 1989.  The department of education went full steam ahead.

Gingrich resigned after only a few years amidst complaints about corruption involving a book deal.  As well, he allowed himself to be accused of battling President Clinton over the federal budget not because he cared about spending but because he was miffed that he had gotten a bad seat on the President's plane. The repeated exhibition of self-indulgent, selfish immaturity weakened the GOP.

Subsequent to Gingrich's departure, impeaching Clinton absorbed the Republican Congress's energy.  If the Democrats could stop the Republicans from cutting government, why couldn't they stop them from impeaching Clinton?

Gingrich is a tragic figure.  He is one of the few national GOP leaders to have come out against the Paulson-Bush-Obama bailout.  He deserves credit for this. He is brilliant. He is a liberal in the old-fashioned meaning.*  But his failure to execute his contract with America in the mid 1990s remains a blot on the GOP's record, one that was made much worse by the GOP's unforgivably dismal record during the Bush years.

It would be tragic if Gingrich were the best the GOP could do for a presidential candidate.

*The old-fashioned word "liberal" in fact means someone who believes in freedom, free market capitalism, and less government. Because those policies had such favorable results, advocates of socialism and social democracy began to call themselves "liberal". But socialism and social democracy had dismal results, so the term "liberal" became one of opprobrium.  It is a better term to describe what I believe than is conservative. I do not wish to conserve a thing. 

Morons Leading Morons: How the Democratic Party Media Lies to Its 1345 Viewers about the Tea Party

I just received this e-mail from Jim Crum about the fictitious reporting on CNN and MSNBC concerning the Tea Party. 

Obviously anyone who disagrees with the official government/media elite narrative is a racist.  
In fact, just recently Gallop did a survey of all of the remaining 1,345 viwers left for CNN and MSNBC, and nearly two thirds of their combined viewers- a full 892 people thought eveyone in the Tea Party was racist. 
This is congruent to what Keith Olberman and Chris Matthews feel.
I gotta tell you folks that really hits me hard, a hammer blow to my self esteem.

Olive-Shandaken-Woodstock Tea Party to Meet April 14

I just received this e-mail from Chris Johansen of West Shokan, NY:

Attention All Patriots  
                                            Please pass this on
On April 14th  7PM at the Phoenicia Fish and Game club the Olive, Shandaken Woodstock Tea Party will hold their Ist meeting. If your unfamiliar with this group Visit and . On this night we will not be boarding any ships to dump the Kings tea so leave your tomahawks in your trucks. We will have a guest speaker Don Wise who wants to run against Kevin Cahill in the 10 1st assembly district. So come on out on the 14th and listen to Don and help get this organization off the ground.
For More Information Contact
Chris Johansen                              Mitch Langbert
845- 657- 8279                      

Mission Statement

The impetus for the Tea Party movement is excessive government spending and taxation. Our mission is to attract, educate, organize, and mobilize our fellow citizens to secure public policy consistent with our three core values of Fiscal Responsibility, Constitutionally Limited Government and Free Markets.

Core Values

  • Fiscal Responsibility
  • Constitutionally Limited Government
  • Free Markets

Fiscal Responsibility: Fiscal Responsibility by government honors and respects the freedom of the individual to spend the money that is the fruit of their own labor. A constitutionally limited government, designed to protect the blessings of liberty, must be fiscally responsible or it must subject its citizenry to high levels of taxation that unjustly restrict the liberty our Constitution was designed to protect. Such runaway deficit spending as we now see in Washington D.C. compels us to take action as the increasing national debt is a grave threat to our national sovereignty and the personal and economic liberty of future generations.

Constitutionally Limited Government: We, the members of The Tea Party Patriots, are inspired by our founding documents and regard the Constitution of the United States to be the supreme law of the land. We believe that it is possible to know the original intent of the government our founders set forth, and stand in support of that intent. Like the founders, we support states' rights for those powers not expressly stated in the Constitution. As the government is of the people, by the people and for the people, in all other matters we support the personal liberty of the individual, within the rule of law.

Free Markets: A free market is the economic consequence of personal liberty. The founders believed that personal and economic freedom were indivisible, as do we. Our current government's interference distorts the free market and inhibits the pursuit of individual and economic liberty. Therefore, we support a return to the free market principles on which this nation was founded and oppose government intervention into the operations of private business.

Conservatism Is Socialism

The appellation conservative ought not apply to Americans who believe in the Constitution or in liberty. The very word contradicts itself. Today's America differs fundamentally from the plan set forth in the Constitution not because of changing technology or mores, nor because the US Supreme Court has legitimately interpreted changing economic necessity or social values and so updated constitutional principles, but because powerful economic interests have usurped the Constitution, with the US Supreme Court acting as a rationalizing vehicle on their behalf.  To maintain today's economic structure and government is to maintain a form of fascism that is in decline.  The decline is occurring not only in economic conditions, living standards, economic opportunities, freedom of speech, property rights, and the right to keep the product of one's labor. It is also occurring in ever worsening outcomes in education;  intolerant extremists' domination of universities; a media run by bankers' lackeys; misallocation of resources on a scale that is beginning to approach that of the great failed socialist states, the USSR and communist China.  None of this would be possible without the US Supreme Court, which has illegitimately and illegally facilitated the transfer of power to economic elites. 

Given the ongoing economic decline; the absence of respect for law within American legal institutions;  and the failure of the American government to respond to evolving economic conditions, a radical or revolutionary posture is necessary.  To be a conservative is to be the most extreme socialist. 

Sunday, April 4, 2010

Happy Easter--Enjoy the Coming Economic Collapse

The Econdata site has posted the above graph of the Consumer Price Index, CPI, since 1800.  I'm not sure how they calculated it for the 19th century because the Bureau of Labor Statistics didn't start its series until the first or second decade of the twentieth century.  There were various attempts to measure inflation in the 19th century so approximations can be made.   I can't vouch for their numbers but let's assume they're correct.

Notice that most of the inflationary peaks are around wars.  There's a peak following the War of 1812, a peak right at the end of the Civil War, a peak around 1920, following World War I, and then an upswing that starts around 1940 and doesn't abate. Around 1970 (the gold standard was abolished in 1971) the inflation rate surges. It surged at a faster rate in the 1970s than during 1980 to 2010, which is probably why many Americans believed that inflation had ended in the 1980s, which it had not.  It just began increasing at a decreasing rate instead of an increasing rate.

Compare the deflation that occurred after the post-Civil War peak with the deflation that occurred during the Great Depression of the 1930s.  During the Gilded Age, from 1865 to 1910,  the deflation was proportionately greater than in the period from 1930 to 1940 (notice that the twenties, which are usually considered a boom period, also saw some deflation).  The Gilded Age was the period of greatest rates of innovation, expansion and immigration.  Fundamental inventions like the telephone, the railroad (actually pre-Civil War but largely developed post-Civil War), the automobile, radio, A/C electricity, movies, all were created in that period.  As well, there was across the board innovation in processes and methods to a far greater degree than today, despite the lip service paid to total quality management and reengineering.  Moreover, on a proportional basis there was heavy immigration, a few years reaching as high as 500,000 on a base of less than 90 million.

Yet the rapid progress occurred during the largest deflation in American history.  The deflation during the 1930s was much milder, yet the employment effects far more severe.  Yet, academic economists base their arguments on the grievous harm that deflation causes.

Here is the reason.  In the Gilded Age businessmen and Wall Street complained endlessly. The deflation created political instability because real estate investors and farmers who were anticipating real estate profits suffered losses.  But the skimpy profits led to intensification of competition.  Reducing labor costs was hardly sufficient to compete. This led to innovation.

Wall Street, the real estate investors, farmers and businesses complained about the deflation, but the average American was better off.  There was an election that emphasized this issue in 1896, and the pro-gold (but pro-tariff) McKinley defeated the pro-silver Bryan.   Despite this victory, within seventeen years in 1913, the year of JP Morgan's death, Woodrow Wilson established the Fed, which was modeled after a recommendation that Morgan's associates had previously devised.

The depression of the 1930s was accompanied by a rapid expansion of the state and by continued missteps in monetary policy (especially in the late 1930s by Mariner Eccles, the Fed chairman, who caused a second stock market collapse).  The crash of 1929 was a second leg to the correction of the 1920 inflation that the Fed had caused.  The unemployment was intensified by federal policy.  For instance, Herbert Hoover, the last Progressive president, "jaw boned" corporations into not cutting wages.  This forced a much higher layoff rate than would have otherwise occurred (see Murray Rothbard and Ronald Radosh's New History of Leviathan for information about Hoover's role and Hoover's long standing commitment to price fixing and cartelization).  Following Hoover's loss to FDR, the nation embarked on a long term socialization policy that integrated Hoover's Progressive ideas (public works and cartelization via FDR's failed National Industrial Recovery Act) as well as additional ideas that the New Deal Democrats added--regulation of wages via the Fair Labor Standards Act; Social Security; the National Labor Relations Act; and price fixing for agriculture, the Agricultural Adjustment Act, which paid farmers not to grow.  As well, the Smoot-Hawley tariff, enacted in 1930, raised tariffs to the highest levels at any time in US history save in 1828.

The period of inflation from 1940 to today has been the worst in American history for the average worker.  The claim that deflation during the 1930s caused the massive unemployment is contradicted by the fact that a larger deflation in the late nineteenth century was not accompanied by such severe unemployment. 

In other words, the Democrats used the failure of their policies to justify intensification of their policies.  They are doing it again with health care.

Happy Easter!