Politics, et Cetera
A publication from The Political Forum, LLC
Tuesday, January 30, 2018
They Said It:
It is obvious that a graduated tax is a direct penalty imposed on saving and industry, a direct premium offered to idleness and extravagance. It discourages the very habits and qualities which it is most in the interest of the State to foster . . . . It is at the same time perfectly arbitrary. When the principle of taxing all fortunes on the same rate of computation is abandoned, no definite rule or principle remains. At what point the higher scale is to begin, or to what degree it is to be raised, depends wholly on the policy of Governments and the balance of parties. The ascending scale may at first be very moderate, but it may at any time, when fresh taxes are required, be made more severe, till it reaches or approaches the point of confiscation . . . . Highly graduated taxation realizes most completely the supreme danger of democracy, creating a state of things in which one class imposes on another burdens which it is not asked to share, and impels the State into vast schemes of extravagance, under the belief that the whole cost will be thrown upon others. Dishonest politicians . . . will have no difficulty in drawing impressive contrasts between the luxury of the rich and the necessities of the poor, and in persuading ignorant men that there can be no harm in throwing great burdens of exceptional taxation on a few men, who will still remain immeasurably richer than themselves. Yet, no truth of political economy is more certain than that a heavy taxation of capital, which starves industry and employment, will fall most severely on the poor. . . Taxation is, ultimately, the payment which is made by the subject for the security and other advantages which he derives from the State. If the taxation of one class is out of all proportion to the cost of the protection they enjoy; if its members are convinced that it is not an equitable payment, but an exceptional and confiscatory burden imposed upon them by an act of power because they are politically weak, very many of them will have no more scruple in defrauding the Government than they would have in deceiving a highwayman or a burglar.
W.E. H. Lecky, Democracy and Liberty, Volume 1, 1896.
A CONSTITUTION IN CRISIS?
This past week, we read an interesting article in, fittingly enough, The Week magazine, a British publication with an American edition that promises a variety of political insights and offers a variety of political viewpoints, most of them “centrist.” It was written by someone called Ryan Cooper, who, it turns out, is the magazine’s “national correspondent.” Though ostensibly a centrist, Cooper is actually a liberal – or a progressive or a leftist, or whatever they call themselves these days. In any case, he is fed up with the way Washington operates these days – that which we call “blessed gridlock” – and has proposed a solution: ditch the Constitution. He put it this way:
The American Constitution is an outdated, malfunctioning piece of junk — and it’s only getting worse.
When written, the Constitution made a morally hideous compromise with slavery that took a war and 750,000 lives to make right. And while its basic structure sort of worked for a while in the 20th century, the Constitution is now falling prey to the same defects that has toppled every other similar governing document the world over.
The truth seems clear: America is going to have to overhaul its basic structure of government, or eventually it will fall to pieces.
The major problem with America’s Constitution is that it creates a system in which elections generally do not produce functioning governments, and there is no mechanism to break the deadlock (like calling snap elections). Most of the time, control of the House, Senate, and presidency is split between the two parties in some way. Bipartisan compromises to keep government functioning used to be common, but are near-impossible anymore due to extreme party polarization. So as [American socialist] Michael Kinnucan points out, during divided government “there is de facto no legislative body.”
This is getting worse over time. Even with unified control of government, a party now only gets one big law per year through the reconciliation process. To actually govern in a way that would be normal for any other country, it takes unified control of government plus a Senate supermajority of 60 votes to get past the filibuster — something that has happened only three times since the Second World War. If Democrats take control of either the House or the Senate in 2018, we are likely in for even fiercer partisan combat and high-stakes standoffs. It’s a ratchet that tends to end in constitutional collapse.
This should surprise no one, of course. This is precisely what the political Left believes. Various conservative commentators responded harshly to Cooper’s article. A smaller group responded by noting that “at last” a liberal had admitted what conservatives have long known, that the Left really and truly hates the Constitution.
We don’t disagree, but we do think that the “at last” bit is unnecessary. The Left has long made the very same arguments against the Constitution that Cooper makes. It doesn’t work in our “modern” times. It is outmoded and destructive. It relies too heavily on the antiquated and tiresome “separation of powers,” which serves only to hamper real “progress” on important issues. The whole business is archaic.
Herbert Croly, the godfather of Progressivism openly and frequently stated his disdain for the document. Woodrow Wilson, the founder of American public administration and the first Democratic Progressive president, constantly complained about the Constitution’s supposed irrelevance. “The old political formulas do not fit the present problems,” he wrote, “they read now like documents taken out of a forgotten age.” Franklin Roosevelt disliked the Constitution so intensely that he did everything within his powers to try to undermine it, including trying to pack the Supreme Court. And so has it gone for since the turn of the last century. Wilson put it this way:
The Constitution was founded on the law of gravitation. The government was to exist and move by virtue of the efficacy of “checks and balances.” The trouble with the theory is that government is not a machine, but a living thing. It falls, not under the theory of the universe, but under the theory of organic life. It is accountable to Darwin, not to Newton. It is modified by its environment, necessitated by its tasks, shaped to its functions by the sheer pressure of life.
In short, we’ve been here before. Unfortunately, as trite and hackneyed as Cooper’s criticism of the constitutional order is, the conservative response isn’t much better. Twitter was alight with Republicans and libertarians mocking Cooper and insisting that the constitution is a “brilliant document” that should be left alone and certainly shouldn’t be junked. In calmer fora, some conservative thinkers did their best to explain to Cooper what he doesn’t understand about the Constitution and to explain to the world why Cooper’s ideas are therefore silly. Writing at National Review Online the always-impressive Jay Cost made the argument as follows:
Our system of government, then, is best understood as one of mediated majority rule. Yes, the people at large are the only source of sovereignty, but that sovereignty is tempered in multiple ways. Checks and balances within the government, as Madison outlined in Federalist No. 51, are perhaps the most obvious form of mediation. The idea of the extended republic, introduced in Federalist No. 10, is another such instrument. There are other, more subtle ones as well.
There is a temporal mediation, which is to say that the people never get to remove all the officers from government at once. So if they want something to happen, they have to vote for it again and again — for the House, the president, and the Senate. Fleeting majorities, animated by temper or whimsy, can therefore dissipate before a full change in government is made.
There is also a geographical mediation, which has of late come to vex progressives. This is embodied in the Senate, where apportionment is equal among the states, regardless of population. It also exists in the House, where districts are geographically bound. This means that simple numbers are not enough to rule. Majorities must be broadly distributed across the country and by implication include a correspondingly large number of factions.
The filibuster in the Senate is an extraconstitutional form of mediation. At first blush, it seems like an anti-democratic instrument, but in practice it merely raises the threshold for majoritarian action. The logic behind it is that a majority in the Senate need not speak for the national interest, and so the minority, if it is sufficiently large, should be able to block certain actions. The courts serve a similar function, impeding majoritarian action insofar as it violates the common law that has been built up around the Constitution.
What these mediating elements do, in sum, is empower the majority to rule only in certain conditions. This is consistent with a view that goes back to ancient Greece, that democracy — like all pure forms of government — contains within itself the seeds of its own destruction. Namely, the masses are prone to being overwhelmed by fractious and even violent passions, and can repurpose the tools of democratic government for unjust ends. The classical solution was to check majority rule with some kind of hereditary estate, but the Framers rejected this, and instead used constitutional instruments to mediate public opinion.
This is all well good, we suppose. And Cost, as always, makes his point very clearly, very concisely, and very well. Nevertheless, we have bad news for the conservatives here. They’re wrong. We won’t say that Cooper is right, exactly, since his proposed remedies are silly at best, but he’s less wrong than the conservatives in this case. The Constitution is indeed a “malfunctioning piece of junk.” And the sooner we recognize that, the sooner we can do whatever is necessary to come to terms with it. Note here that we didn’t say “the sooner we can fix it,” largely because we can’t fix it. It’s over.
Now, before you get all worked up, wondering who took the real Steve and Mark and what they did with them, give us a minute to explain. The Constitution is, as Wilson said, a “living document.” This wasn’t necessarily the way the Founders intended, but it’s the way things have evolved over time. The Founders created a careful, calculated means by which their document could be amended to meet unforeseeable problems and issues. Unfortunately, one of the issues that they were unable to foresee was the emergence of a group of people who would wish to see that document amended right into irrelevance. The Constitution, as written, and as amended by the Bill of Rights was, indeed, a brilliant and powerful treatise. But that document no longer exists – and hasn’t for more than one hundred years.
The first ten amendments to the Constitution were, of course, ratified as part of the document, Madison’s Bill of Rights being one of the greatest contributions of any man in history to the cause of liberty. Four of the next five amendments dealt with slavery and with righting the greatest wrong written into the Founders’ otherwise splendid document. After these, however, all hell broke loose.
The four amendments of the Progressive Era, changed the entire complexion of the Constitution and, by extension, of the nation. One of these amendments, the 19th, gave women the right to vote and changed the Constitution and the country for the better. Another one of these amendments, the 18th, was sheer lunacy, but was mercifully undone a mere 14 years later, when the 21st amendment ended prohibition. The other two, though – the 16th and the 17th – have done immeasurable damage.
The first and most significant of these was the 16th, which permitted a graduated income tax. In writing the tax provision of the Constitution, the Founders were very deliberate and very specific. The debate among the Founders over this section was long, intense, and complicated. It focused on two primary concerns; the first relating to the possible abuse of the power to tax, and the second involving the type of taxes that the federal government could use, given that the states would have to tax citizens also.
The Founders had many lengthy discussions over these issues, which covered everything from matters of punctuation to the use of federal funds to finance disaster relief in cases such as the great Savanna fire. What they never discussed, however, what never even crossed their collective mind was the idea that taxes should be levied disproportionately across various categories of citizens. And so the provision on which they settled read (emphasis added): “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
The Founders found the notion of a tax levied inconsistently to be so outside of the realm of serious consideration for a government dedicated to liberty that they almost never even mentioned the idea. It is broached once, in Federalist #10, by Madison himself, but then only tangentially, as part of a broader discussion of the importance of preventing certain factions of society from acting in concert to “carry into effect schemes of oppression” against others. Madison wrote:
The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling with which they overburden the inferior number, is a shilling saved to their own pockets.
In spite of this warning, on February 13, 1913, President Taft’s Attorney General, Philander Knox, quietly (and some insist, to this day, fraudulently, due to errors in the way several states had handled the approval) signed the 16th Amendment into law, thereby introducing the graduated income tax. We don’t want to sound hyperbolic here, but save the attack on Fort Sumter, the graduated tax was almost certainly the greatest intentional assault on the values of the Founding in the nation’s history. Not only did it undermine virtually all of the key characteristics of the American experiment in self-government, ranging from the inviolability of private property to equality under the law, but it also set the stage for the great American political game of using the tax code to punish and reward specific behaviors and thus to punish and reward various interest groups.
Unfortunately, the Progressives were just getting warmed up. A short three months later, on May 31, 1913, President Wilson’s Secretary of State, the Progressive stalwart William Jennings Bryan, issued a notification of the Ratification by Congress of 17th Amendment to the Constitution, which stated that “The Senate of the United States should be composed of two Senators from each state elected by the people thereof.”
The ostensible purpose of this amendment was to promote the election of more honest senators, the argument being that the state legislatures were hotbeds of corruption and that this led to the selection of crooks and lackeys of the state machines. When considering this, keep in mind that that this was the “Gilded Age,” shiny on the outside and deeply corrupt underneath, and there was no reason to expect that “the people” themselves would elect cleaner advocates in Washington. In any case, it seemed like a minor alteration at the time, but the fact is that it radically changed the entire nature of the American public’s relationship with the federal government by stripping the individual states of their most important constitutional guarantee of protection from the collective will of the entire polity. The National Center for Constitutional Studies explains the 17th amendment as follows:
For more than a century, senators were elected by state legislators rather than by popular vote. The founders said they had organized Congress in such a way that “the people will be represented in one house, the state legislatures in the other.” Thus the states were an integral part of the federal government and had a strong voice in the formation of federal policy. As James Madison put it, “No law or resolution can now be passed without the concurrence, first, of a majority of the people, and then of a majority of the states.”
According to George Mason of Virginia, the object of this design was to arm the state legislatures with “some means of defending themselves against encroachments of the national government . . . And what better means can we provide than [to give] them some share in, or rather to make them a constituent part of, the national establishment?”
Madison explained that the House of Representatives was always regarded as a “national” institution because its members were elected directly by the people, but “the Senate, on the other hand, will derive its powers from the states. [and in this respect] the government is federal, not national.” In other words, the government in Washington is a “federal” government only if it incorporates the states into its very structure.
The founders even cautioned us about the dangers of altering this arrangement. For example, Fisher Ames of Massachusetts declared in 1788: “The state governments are essential parts of the system . . . The senators represent the sovereignty of the states; . . . they are in the quality of ambassadors of the states . . . [But suppose] that they [were] to be chosen by the people at large . . . Whom, in that case, would they represent? Not the legislatures of the states, but the people. This would totally obliterate the federal features of the Constitution. What would become of the state governments, and on whom would devolve the duty of defending them against the encroachments of the federal government?”
As fate would have it, even after the passage of these two appalling amendments, that fateful year, 1913, was not yet done wreaking havoc on the existing Constitutional order. On December 23, 1913, President Wilson signed into law the Federal Reserve Act, which, naturally, created the Federal Reserve and thereby fashioned a system by which enormous and absolute power was transferred from the people and their representatives to a quasi-public institution run largely in secrecy and with no accountability to anyone.
We will spare you the fascinating, complicated, and sordid details of how the fed came into being. (Besides, we have a book, soon to be published, that relays the story exhaustively.) For our purposes today, it should suffice to say that the Fed was planned and shaped not by good-government Progressives, but by the nation’s big bankers, who saw the American banking system as primitive and in desperate need of reform. Over the course of five years, these banking interests worked behind the scenes on many fronts, both to bolster public demand for a central bank and to ensure the election of key officials to prominent positions that would permit them to facilitate its creation.
Wilson, as was his wont, patted himself on the back interminably for helping to fashion a system which, in his words, would ensure that “banks may be instruments, not the masters, of business and of individual enterprise and initiative.” Wilson’s son-in-law and Treasury Secretary William McAdoo was practically giddy with excitement when he discussed the new federal banking system, which could create an endless supply of fiat currency and thus would “so alter and strengthen our banking system so that the enlarged credit resources demanded by the needs of business and agricultural enterprise will come almost automatically into existence, and at rates of interest low enough to stimulate, protect, and prosper all kinds of legitimate business and to bring about ultimately a greater equality in interest rates throughout the country.”
For a variety of reasons, the Federal Reserve Act was constitutional in only a Wilsonian sense of the word – which is to say that it could only have been considered so under a very liberal, very “living” interpretation of the term. More to the point, the Act was destined to be disastrous, largely because it permitted the fabrication of “money” out of whole cloth. Senator Elihu Root of New York rose in opposition to the plan and delivered a very powerful, very prescient speech on the subject:
What is an elastic currency? We all agree that it is a currency which expands when more money is needed and contracts when less money is needed. It is important not merely that the currency shall expand when money is needed, but that it shall contract when money is not needed, for to an industrial and commercial country a redundant currency is the source of manifold evils, some of which I shall presently point out. At present I observe that this is in no sense a provision for an elastic currency. It does not provide an elastic currency. It provides an expansive currency, but not an elastic one. It provides a currency which may be increased, always increased but not a currency for which the bill contains any provision compelling reduction . . .
It is manifest that when banks issue currency there is a certain limitation involved in the nature of things, because their credit is not unlimited . . . But we are proposing to furnish everybody who can draw and sign a bill currency that has behind it the credit of the American people — the Government of the United States. What limit is there to that credit now? What limit up to this time?
So as to the sale of Government securities. Ah, yes; now, behind the system under which we are working, and under which we have grown so great and strong, stands always the Government of the United States, with its credit unimpaired, with its solvency undoubted, always ready to come to the rescue by the sale of its securities to bring gold. This bill proposes, however, to put in pawn the credit of the United States; and when your time of need comes, it is the United States that is discredited by the inflation of its demand obligations which it cannot pay.
These three acts of government, plus the Mann Act, which was signed in 1910 and greatly enlarged the scope of the Commerce Clause, worked in concert to expand the federal government, expand its ability to cause damage to the fabric of the nation, and thereby to expand the opportunities for corruption and government malfeasance far beyond the dreams of avarice. Suddenly, the federal government had access to the kind of money necessary to do just about anything. It could punish or reward segments of the population at will. And it could reach deep into minute matters of local and regional import, taking for itself the power that legitimately belonged to the states. In short, these actions conspired to destroy the Constitution and the republic built upon it.
As we said at the top of the piece, we are sympathetic to Ryan Cooper and share his frustration with the current state of our politics. Unfortunately, what he – and others of his ilk – proposes is more of the same type of meddling that caused or exacerbated many of the nation’s greatest and most significant problems in the first place. A few weeks ago, in a column published at Townhall.com, we noted that one of the greatest causes of government overreach in the contemporary era is “surplus wealth,” which is to say the wealth produced by our economy in excess of what is necessary to meet basic needs. We wrote:
Congress doesn’t borrow all that money year after year because it is needed to make up for shortfalls caused by unanticipated events such wars, economic crashes, or natural disasters. In truth, our honorable legislators borrow all of that money simply because they can, and because it makes them look both generous and benevolent, which, in turn, helps to ensure their reelection. It is indeed “surplus money” because its purpose was not determined by “need,” but by a desire for near-term gratification. And this, we’re afraid, is a prescription for mischief.
Do you ever wonder why American presidents are now inclined to make war, by executive action and thus in violation of the Constitution? The answer is simply because they can. The money for these wars is readily available. No one has to figure out where the funds for war – and seemingly endless occupation – will come from. No one has to raise levies (i.e. taxes) to support their foreign adventurism. Presidents can, more or less, do as they please, and expect that Congress will rubber stamp the funds whenever they get around to it. Most reliable estimates place the costs for the war in Iraq and the ONGOING operations in Afghanistan in the neighborhood of $2 trillion. For better or worse, George W. Bush never blinked an eye about these costs – precisely because the surplus capital made it a non-issue.
Hannah Arendt went on note that one of the consequences of surplus money in 19thcentury Europe in addition to the need to search for investments abroad was “an unparalleled increase in swindles, financial scandals, and gambling in the stock market.”
And so it is today with the flood of trillions of dollars of “surplus” funds, which have turned the federal government into a swamp of corruption and waste, and have created multi-millionaires of common politicians. In what world should a man and his wife – lifelong “public servants” – now be worth well over $100 million, simply because he was president and she a senator and secretary of state? In what world should a former high-school wrestling coach-turned politician even be able to pay nearly $2 million in hush money? In what world should the House Minority Leader be able to condemn public policy with which she disagrees for enabling permanent “oligarchy,” even as she herself is one of the most powerful women in the world and is worth north of $120 million?
Here’s the thing: the Sixteenth Amendment and the Federal Reserve Act gave the federal government access to as much of this surplus wealth as it could handle, and the Seventeenth Amendment helped ensure that no one would be able to do anything about it. Californians, for example, like to complain that they give more to the federal treasury than they get back in terms of federal expenditures. That may or may not be true, but in either case, there’s not much they can do about it. The protections granted to the states by the Constitution, including the Tenth Amendment, have been eroded. And unfortunately, there is no going back.
Cooper ends his essay about the Constitution by lamenting that it will probably take a major constitutional crisis and then a constitutional breakdown to get the people of the United States to wake up and realize how outdated and inefficient their governmental structure truly is. We don’t doubt that he is right. At the same time, we doubt that the people, in the face of a crisis and a breakdown would understand that to take Cooper’s advice would be to sacrifice even more of their liberty and to make matters even worse. We’re stuck, you see. Unless, by some miracle, the people of the United States wake up tomorrow and decide to repeal the Progressive Amendments (save women’s suffrage), the constitutional order is probably doomed. And we aren’t hopeful on that count.
The other day, Senator Joe Manchin, Democrat of West Virginia, appeared on Meet the Press and was asked about reports that President Trump had almost fired Special Prosecutor Robert Mueller. In response, Manchin declared that the President has to get used to the way government works, that he can’t just get his way, like he did in private industry, by changing the rules of the game. Trump, he went on, is risking the ire of Congress. “Let’s see if he moves on [Deputy Attorney General Rod] Rosenstein,” Manchin said, “I think at that time there’ll be Democrats and Republicans saying, “Time to protect the judicial system and the three branches of government having equal power.”
For the record, Manchin is a U.S. Senator. Before becoming a Senator, he was the Governor of West Virginia. Before that he was the Secretary of State of West Virginia, a state senator, and a member of the state house of delegates. He’s been in government for a long, long time. He is the embodiment of the governing class. And he doesn’t, apparently, have the foggiest idea that the Special Counsel and the Justice Department are NOT part of the “judicial system” or a different, co-equal branch of government from the President. He thinks, somehow, that they are and should be completely independent from the executive branch.
It’s no wonder our Constitution doesn’t work these days the way it should. The people in charge of protecting it and abiding by its stipulations don’t know a damn thing about it.
And Ryan Cooper wants to fix the system by giving them MORE power.