Conservatives and libertarians have been frustrated by the lack of choice between the two parties. There is a belief that the Republican Party is a conservative party and that the Republican Congress of the mid 1990s and early 2000s failed to actualize the Republicans' true nature. Many conservatives argue that Republicans are a moderately conservative party and that Democrats are a moderately social democratic party and that a moderate conservatism is all that can be expected. However, there is a limited historical reason to believe that the Republican Party is a conservative or libertarian party even in a moderate sense. If not, then conservatives' recent disappointment with the Republican Congress is not a result of failure to deliver or deviation but a case of Republicans' returning to their true nature.
With respect to the Democrats, there is reason to believe that the Democratic Party is a moderate social democratic party and not a conservative or socialistic one, although there is a strong strain of socialism running through the membership. There have always been divisions within the Democratic Party. There was traditionally a southern Democratic Party which was very different from the northeastern urban Democratic Party. But those differences have evaporated as divisions about race have subsided. Today there is a significant presence of left-wing Democrats coupled with a more moderate social democratic element that is not so interested in aggressive redistribution of wealth. However, the differences within the Republican Party are greater than within the Democrats.
The notion that the Republican Party is a conservative one arises from the New Deal. Franklin D. Roosevelt and his associates applied the same tactics to the Republicans that Theodore Roosevelt applied to his opponents in the early 1900s, whom he called "reactionary" and "stool-pigeon progressives". The truth is that the current social democratic edifice of government regulation was largely formulated by Republicans, notably Theodore Roosevelt and his appointees such as Herbert Knox Smith, whom Roosevelt had appointed to head the Bureau of Corporations.
Progressivism was a Republican ideology. The one exception to this rule was Woodrow Wilson, who came to progressivism late and who emphasized individualism and small business interests to a greater degree than did the Republican progressives, especially Roosevelt and Taft. Although Warren G. Harding and Calvin Coolidge were Republicans, they were not progressive. But they were not conservative in today's meaning either. Both were "home grown" in their "conservatism". Coolidge was from Vermont and his upbringing was in the tradition of home grown Yankee Americanism. He did not have a well-formulated ideology and he integrates a number of progressive ideas with conservative ones in his autobiography. Likewise, his predecessor, Harding, was an Ohio newspaper editor with limited philosophical and economic training. Harding was not adverse to progressivism any more than he was a proponent of limited government or Burkean conservatism. Harding and Coolidge, who had limited reform agendas in any direction, were elected because America had tired of progressivism, Wilson's idealism and World War I. Herbert Hoover, who was the third Republican elected in the 1920s, was, like Roosevelt and Wilson, an ideological progressive who advocated reform.
American politics since 1932 largely has been a battle between two ideologies: the ideology of progressivism and the ideology of New Deal social democracy. The Republicans were the party of progressivism, which emphasized efficiency and bureaucracy, while the Democrats' New Deal social democracy advocated application of Progressive principles to redistribution of wealth. (Claiming that the redistribution was from rich to poor, by abolishing restraint on the money supply Roosevelt accomplished a longer term redistribution from poor to rich. Post World War II inflation and today's stagnant real wages and wealth inequality follow directly from the abolition of restraint on the Federal Reserve Bank's ability to create money. Progressives like Wilson did not believe in Keynesian economics because it was not created until the 1930s and did not anticipate this aspect of Roosevelt's New Deal.)
The home-grown conservative element in the Republican Party from 1908 to 1964 was a fossil. The fossil-conservatives reacted to the New Deal in tandem with the non-New Deal progressives, who were the most visible element called "conservative". I suspect that many involved in the Liberty League that some big businessmen founded in the early 1930s to fight the New Deal were progressives, not traditional conservatives. I suspect that few if any of them believed in the ideas of Sumner, Cobden or EL Godkin. Rather, they, like the Republican Party more generally, were a statist movement that had been preempted by a different statist movement. Until Barry Goldwater reformulated the image of conservatism in the 1960s the Republican Party was dominated by progressives. By the 1980s these progressives were called "Rockefeller Republicans". Even Ronald Reagan carried forward many elements of their progressivism.
In June 1906 Roosevelt pushed through the Hepburn Act which gave the Interstate Commerce Commission the power to set just and reasonable railroad rates and to view railroads' financial records even if the railroads were privately held. Some have argued that the Hepburn Act led to the railroads' inability to compete with trucking in ensuing decades. As well, bestowing the power to federal agencies to set prices and manage corporations can easily be interpreted as the first step toward socialism. The public tired of Roosevelt's radicalism. No subsequent president except for his cousin, Franklin D. Roosevelt, was as radical as Theodore Roosevelt.
In The Writings of Theodore Roosevelt* William H. Harbaugh edits a series of Roosevelt's speeches and articles. Here is an excerpt from Roosevelt's 1906 Annual Message to Congress which Harbaugh entitles "For More Thorough-Going Regulation". This Progressive motif has not disappeared from elements within the Republican Party to this day (p. 93):
"The present Congress has taken long strides in the direction of securing proper supervision and control by the National Government over corporations engaged in interstate business--and the enormous majority of corporations of any size are engaged in interstate business. The passage of the railway-rate bill...of the pure-food bill, and the provision for increasing and rendering more effective national control over the beef-packing industry, mark an important advance in the proper direction. In the short session it will perhaps be difficult to do much further along this line; and it may be best to wait until the laws have been in operation for a number of months before endeavoring to increase their scope, because only operation will show with exactness their merits and their shortcomings and thus give opportunity to define what further remedial legislation is needed. Yet in my judgment it will in the end be advisable in connection with the packing-house-inspection law to provide for putting a date on the label and for charging the cost of inspection to the packers. All three laws have already justified their enactment...
"In enacting and enforcing such legislation as this Congress already has to its credit, we are working on a coherent plan, with the steady endeavor to secure the needed reform by the joint action of the moderate men, the plain men who do not wish anything hysterical or dangerous, but who do intended to deal in resolute common-sense fashion with the real and great evils of the present system. The reactionaries and violent extremists show symptoms of joining hands against us. Both assert, for instance, that if logical we should go to government ownership of railroads and the like...As a matter of fact our position is as remote from that of the Bourbon** reactionary as from that of the impracticable or sinister visionary...
"...What we need is not vainly to try to prevent all combination, but to secure such rigorous and adequate control and supervision of the combinations as to prevent their injuring the public, or existing in such form as inevitably to threaten injury--for the mere fact that a combination has secured practically complete control of a necessary of life would under any circumstances show that such combination was to be presumed to be adverse to the public interest. It is unfortunate that our present laws should forbid all combinations,instead of sharply discriminating between those combinations which do good and those combinations which do evil."
Theodore Roosevelt established the state regulatory edifice that both the Democrats and Republicans support. With the big-government tradition that Roosevelt bequeathed to the Republican Party, it is incorrect to call the Republicans a conservative or libertarian party.
*Theodore Roosevelt. The Writings of Theodore Roosevelt. Edited by William H. Harbaugh. Indianpolis, Ind.: Bobbs-Merrill Company, 1967.
**The Bourbon Democrats were a 19th century Democratic Party faction who supported free trade, the gold standard and laissez faire policies.
Friday, May 23, 2008
When Will They Ever Learn?
Larwyn just forwarded a post by the Dinocrat blog that led me to paraphrase the old '60s anti-war song "Where Have All The Flowers Gone?":
Where have all the conservatives gone?
Long time passing
Where have all the conservatives gone?
Long time ago
Where have all the conservatives gone?
Gone to big government solutions every one
When will they ever learn?
When will they ever learn?
Dinocrat links to Mike Masters' Senate testimony and refers to Dan Dicker's article. Masters and Dicker blame speculators for increasing commodity prices and aim to regulate commodities markets. Dinocrat doesn't indicate whether Masters and Dicker are from Wall Street, are long on stocks or short on commodities and are offering self-serving testimony to Congress or whether they just like the Bear Stearns bail out. Wall Street dislikes commodity speculation.
There is a much more accurate explanation for the run up in commodity prices than commodity speculation: Federal Reserve Bank inflation, which is now currently working its way through the economy. If futures prices are higher than the underlying demand warrants, there will be a correction in prices. The index speculators will pay for their errors if commodities are at higher-than-market prices. As well, foreign producers can enter the market and undersell inflated commodity prices.
There is a more fundamental error in the Masters-Dicker proposals. Few people can outsmart financial or commodity markets, and those who can are very rich. Why should anyone believe Masters and Dicker are smarter than the funds who are buying the commodities indexes? Passing a law limiting economic activity because a few observers have a hunch based on limited information that they are right and the market is wrong would be inept.
If limits are put on ways of trading or holding commodities, these will not reduce commodity prices. For example, if pension funds are not permitted to hold commodities, traders outside of pension funds will profit from the Masters proposals. Likewise, if limits are put on commodity prices, then there will be shortages.
It is true that across-the-board price increases are a major public concern, but these have been caused by the Federal Reserve Bank, not by speculators. If the speculators are over-bidding, then farmers and commodity producers from overseas will undercut the speculators and bankrupt them.
We do not need a "Federal Commodity Commission" to create more bureaucratic waste and to rip off the American public to a greater extent than the Federal Reserve Bank already does.
Where have all the conservatives gone?
Long time passing
Where have all the conservatives gone?
Long time ago
Where have all the conservatives gone?
Gone to big government solutions every one
When will they ever learn?
When will they ever learn?
Dinocrat links to Mike Masters' Senate testimony and refers to Dan Dicker's article. Masters and Dicker blame speculators for increasing commodity prices and aim to regulate commodities markets. Dinocrat doesn't indicate whether Masters and Dicker are from Wall Street, are long on stocks or short on commodities and are offering self-serving testimony to Congress or whether they just like the Bear Stearns bail out. Wall Street dislikes commodity speculation.
There is a much more accurate explanation for the run up in commodity prices than commodity speculation: Federal Reserve Bank inflation, which is now currently working its way through the economy. If futures prices are higher than the underlying demand warrants, there will be a correction in prices. The index speculators will pay for their errors if commodities are at higher-than-market prices. As well, foreign producers can enter the market and undersell inflated commodity prices.
There is a more fundamental error in the Masters-Dicker proposals. Few people can outsmart financial or commodity markets, and those who can are very rich. Why should anyone believe Masters and Dicker are smarter than the funds who are buying the commodities indexes? Passing a law limiting economic activity because a few observers have a hunch based on limited information that they are right and the market is wrong would be inept.
If limits are put on ways of trading or holding commodities, these will not reduce commodity prices. For example, if pension funds are not permitted to hold commodities, traders outside of pension funds will profit from the Masters proposals. Likewise, if limits are put on commodity prices, then there will be shortages.
It is true that across-the-board price increases are a major public concern, but these have been caused by the Federal Reserve Bank, not by speculators. If the speculators are over-bidding, then farmers and commodity producers from overseas will undercut the speculators and bankrupt them.
We do not need a "Federal Commodity Commission" to create more bureaucratic waste and to rip off the American public to a greater extent than the Federal Reserve Bank already does.
Thursday, May 22, 2008
Orenstein Reports Sighting of CUNY Faculty Meeting
Phil Orenstein has written an excellent article in Frontpagemag about his close encounter with a handful of fringe CUNY faculty. Professional Staff Congress officer "Sue" O'Malley, currently engaged in a McCarthyist law suit against the awe-inspiring Sharad Karkhanis, was in attendance. Orenstein does not mention whether the panelists were wearing white hoods and sheets. But he writes of this close encounter of the fourth kind:
"What I witnessed was a closed forum dedicated to a veiled radical agenda, riddled by hysterical paranoia, name-calling, slanderous accusations against prominent scholars and city officials, and strategies for their ouster, where the panelists professed that “attacks” against Arabs and professors are a coordinated right wing smear campaign launched by Daniel Pipes, CUNY trustee Jeffrey Wiesenfeld and their ilk, which they dubbed the “New McCarthyism.”
Read all about Orenstein's encounter with uncollegiality among extremist elements of CUNY's senior faculty here.
"What I witnessed was a closed forum dedicated to a veiled radical agenda, riddled by hysterical paranoia, name-calling, slanderous accusations against prominent scholars and city officials, and strategies for their ouster, where the panelists professed that “attacks” against Arabs and professors are a coordinated right wing smear campaign launched by Daniel Pipes, CUNY trustee Jeffrey Wiesenfeld and their ilk, which they dubbed the “New McCarthyism.”
Read all about Orenstein's encounter with uncollegiality among extremist elements of CUNY's senior faculty here.
Institutional Death in America and Europe
The new and old worlds are divided not just by their relative emphasis on flexibility and markets, but also by their openness to change. Radicalism in Europe has generally taken the forms of Hegelian emphasis on historicism. Marxism and its derivatives while pretending to advocate radical change are romantic reassertions of medieval stability and security. The chief outcomes of Russian and eastern European communism were societies that had difficulty with flexibility and change, that could not integrate information about price and consumer demand intelligently and that placed political stability before economic change. As well, Europe has emphasized the Nietzschean will to power and minimized liberal openness to change.
Both Americans like Europeans have revealed prejudices but while Americans are discarding them, Europeans are not. In the 19th century the people of California hated Asians and passed discriminatory laws against them. The first immigration law in America, the Chinese Exclusion Act of 1882, excluded Chinese mining labor from immigration under penalty of law and required that Chinese immigrants obtain certification of their qualification to immigrate. In 1902 Chinese immigrants were required to register with the government and obtain a certificate of residency. Similarly, antagonism and hatred toward African-Americans following Reconstruction led to passage of Jim Crow laws by post-Reconstruction redeemer governments beginning in 1876 and the laws continued in force until passage of the Civil Rights Act in 1964. The northeastern Mugwumps, the educated post-reconstruction Republicans who preceded the Progressives around 1884, did not advocate the Jim Crow laws aggressively but did not oppose them aggressively either. The Jim Crow laws were primarily the product of southern Democrats. The northern Democrats did not oppose them either. As president, Woodrow Wilson intensified the Jim Crow laws and supported them. During the Progressive era, imperialist sentiment fit the racism of the Jim Crow laws. Progressivism was very much associated with racism.
In Europe, there was a parallel history of anti-Semitism. Jews were banned from England, France and Spain in the middle ages and were forced to migrate to Asia Minor and eastern Europe. In Germany and Italy they were forced to live in ghettos. During the Crusades, Crusaders murdered tens of thousands of Jews (along with eastern Christians, southern French Christians and Muslims). There was a brief period of liberalization in the 19th century, but in the twentieth the rise of Nazism, a derivative of Marxism, led to the murder of the majority of European Jews.
Despite this history of bigotry in both continents, in recent decades Americans have reduced but not eliminated the degree of anti-Asian and anti-Chinese racism. In contrast, anti-Semitism is more intense in Europe than it has been since World War II. The European addiction to anti-Semitism attends a deeper inability to overcome antiquated traditions and class structures that inhibit change.
Americans' ability to create and accept change may in part be the cultural residue of the American frontier. The open frontier led this people to see the possibility of the new. As well, the science and technology that freedom made possible, the inventions and progress that came from laissez faire capitalism, led to an openness to change. Perhaps the openness to change went to far under the philosophy of modernism, but it is preferable to the alternative, which is the stagnation of bigotry, impoverishment and lost economic opportunity. The degree of tradition and change is best balanced through private decision, not through bureaucratic laws that require landmark preservation.
As well, Americans are a religious people, and their acceptance of change is likely linked to their faith. In America, religious tolerance has been the norm and religion has been a matter of belief and conscience rather than social imposition and structure. Many Americans have believed that material rewards reflect divine grace. Since belief in God is a matter of conscience, not social institution, and since material rewards reflect divine election, in many Americans' view, American are likely to pursue and feel comfortable with such rewards and with the change that they require.
Since the creation of wealth requires the creation of change, of new ideas, of new markets and new technology, the converse of new ideas, the death of old ones, is critical to change. Europeans are reluctant to give up old prejudices like anti-Semitism and tribal social arrangements like socialism. Firms cannot in the European model be allowed to go bankrupt. Business executives must be permitted to maintain their social position and employees must be secure in their jobs.
To the extent that Americans adopt such tribal, European views they will be unable to change. Change depends on death. The growth of the economy depends on the death of failed firms. Incompetent managements like Bear Stearn's or Enron's do not deserve subsidies. Their managements have failed and deserve the economic returns that failure implies.
Likewise, the introduction of Progressive and New Deal institutions were significant not so much because they reflected change, but rather because the institutions reflected the tribal views of German historicism and so became institutionalized as reaction to change. Few Progressive institutions have been overturned and those New Deal institutions that were not rejected by the Supreme Court have remained in place for the past 70 years. When change in proposed, the American people's reaction is not the openness to change that characterized America in an earlier era but a European-style tribal reacton, a fear of change and a hostility to the possibility that failed institutions ought to change. Likewise, when American business has failed, as it increasingly often has in the past decade, the American people's reaction has been to protect the wealth of those whose businesses failed to produce value for investors or for the American people and so shore up a class system that is decidedly non-American in nature.
Both Americans like Europeans have revealed prejudices but while Americans are discarding them, Europeans are not. In the 19th century the people of California hated Asians and passed discriminatory laws against them. The first immigration law in America, the Chinese Exclusion Act of 1882, excluded Chinese mining labor from immigration under penalty of law and required that Chinese immigrants obtain certification of their qualification to immigrate. In 1902 Chinese immigrants were required to register with the government and obtain a certificate of residency. Similarly, antagonism and hatred toward African-Americans following Reconstruction led to passage of Jim Crow laws by post-Reconstruction redeemer governments beginning in 1876 and the laws continued in force until passage of the Civil Rights Act in 1964. The northeastern Mugwumps, the educated post-reconstruction Republicans who preceded the Progressives around 1884, did not advocate the Jim Crow laws aggressively but did not oppose them aggressively either. The Jim Crow laws were primarily the product of southern Democrats. The northern Democrats did not oppose them either. As president, Woodrow Wilson intensified the Jim Crow laws and supported them. During the Progressive era, imperialist sentiment fit the racism of the Jim Crow laws. Progressivism was very much associated with racism.
In Europe, there was a parallel history of anti-Semitism. Jews were banned from England, France and Spain in the middle ages and were forced to migrate to Asia Minor and eastern Europe. In Germany and Italy they were forced to live in ghettos. During the Crusades, Crusaders murdered tens of thousands of Jews (along with eastern Christians, southern French Christians and Muslims). There was a brief period of liberalization in the 19th century, but in the twentieth the rise of Nazism, a derivative of Marxism, led to the murder of the majority of European Jews.
Despite this history of bigotry in both continents, in recent decades Americans have reduced but not eliminated the degree of anti-Asian and anti-Chinese racism. In contrast, anti-Semitism is more intense in Europe than it has been since World War II. The European addiction to anti-Semitism attends a deeper inability to overcome antiquated traditions and class structures that inhibit change.
Americans' ability to create and accept change may in part be the cultural residue of the American frontier. The open frontier led this people to see the possibility of the new. As well, the science and technology that freedom made possible, the inventions and progress that came from laissez faire capitalism, led to an openness to change. Perhaps the openness to change went to far under the philosophy of modernism, but it is preferable to the alternative, which is the stagnation of bigotry, impoverishment and lost economic opportunity. The degree of tradition and change is best balanced through private decision, not through bureaucratic laws that require landmark preservation.
As well, Americans are a religious people, and their acceptance of change is likely linked to their faith. In America, religious tolerance has been the norm and religion has been a matter of belief and conscience rather than social imposition and structure. Many Americans have believed that material rewards reflect divine grace. Since belief in God is a matter of conscience, not social institution, and since material rewards reflect divine election, in many Americans' view, American are likely to pursue and feel comfortable with such rewards and with the change that they require.
Since the creation of wealth requires the creation of change, of new ideas, of new markets and new technology, the converse of new ideas, the death of old ones, is critical to change. Europeans are reluctant to give up old prejudices like anti-Semitism and tribal social arrangements like socialism. Firms cannot in the European model be allowed to go bankrupt. Business executives must be permitted to maintain their social position and employees must be secure in their jobs.
To the extent that Americans adopt such tribal, European views they will be unable to change. Change depends on death. The growth of the economy depends on the death of failed firms. Incompetent managements like Bear Stearn's or Enron's do not deserve subsidies. Their managements have failed and deserve the economic returns that failure implies.
Likewise, the introduction of Progressive and New Deal institutions were significant not so much because they reflected change, but rather because the institutions reflected the tribal views of German historicism and so became institutionalized as reaction to change. Few Progressive institutions have been overturned and those New Deal institutions that were not rejected by the Supreme Court have remained in place for the past 70 years. When change in proposed, the American people's reaction is not the openness to change that characterized America in an earlier era but a European-style tribal reacton, a fear of change and a hostility to the possibility that failed institutions ought to change. Likewise, when American business has failed, as it increasingly often has in the past decade, the American people's reaction has been to protect the wealth of those whose businesses failed to produce value for investors or for the American people and so shore up a class system that is decidedly non-American in nature.
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