Politics, et Cetera

A publication from The Political Forum, LLC

[print-me target=”body”]

Tuesday, March 11, 2014

They Said It:

“We have met the enemy, and he is us.”

Walt Kelly, “Pogo” Earth Day Poster, April 22, 1970.

 

WE’RE GONNA NEED A BIGGER BATHTUB.

For a variety of reasons, most especially the failure of Big Government’s latest iteration, many on the Right are suddenly convinced that a new era of small government is upon us, if only the Republicans will make the proper arguments and offer the proper policies.  After all, Barack Obama has proven to be both a very poor messiah and a very poor chief executive.  Moreover, the Keynesian experiments and entitlement expansion have all proven less than successful at reigniting the American economic engine, even as bureaucratic failure, misfeasance, corruption, incompetence, and persecution have become synonymous with government in the age of Obama.

In short, Big Brother has taken a beating at Obama’s hands, and the American people appear ready for a change, telling pollster after pollster that government is too large, too intrusive, too ineffectual, and too malevolent to stomach any longer.  Barack Obama, Democrat, has done what no Republican in the last ninety years has been able to do, though all have tried, namely to thoroughly discredit the New Deal-Great Society-Progressive experiment.  That being said, the moment for course correction is now.

Or so we are told.

Among those who have been proclaiming the rebirth of the small-government movement are the libertarian-leaning Republicans and their political champions, led by Rand Paul, the junior Senator from Kentucky and the son of the GOP’s crazy uncle in the attic, former Congressman Ron Paul.  Paul the Younger is now considered by many forecasters to be the favorite in the race for the Republican nomination in 2016, in part because of Chris Christie’s self-destruction, and in part because of his manifestation as the opposite of Obama.  Where Obama wants to coddle us, Paul wants to liberate us.  Where Obama wants to help us, Paul wants to let us help ourselves.  Where Obama wants to put up roadblocks to success, Paul wants merely to get the hell out of the way.

This past weekend, Paul was the hero of the annual convention of conservative thinkers and activists known as CPAC, the Conservative Political Action Conference.  On Friday evening, Paul wowed the crowd with a stem-winder that was heavy on both red meat and hip cultural references.  When, do you suppose, was the last time that a prospective Republican presidential candidate addressed a crowd of conservative supporters and quoted Pink Floyd – in context, nonetheless – and received a standing ovation for his efforts?  By the end of the weekend, it was clear that even among the crush of the GOP’s favored sons, Paul was, by far, the most popular.  He spoke of liberty.  He spoke of freedom.  He spoke of smaller government.  And he won the CPAC straw poll by an enormous margin, besting his fellow Tea-Party-darling and second-place finisher Ted Cruz, 31%-11%.

Of course, libertarian-leaning politicians and presidential wannabes are not the only ones who have of late been arguing that Republicans need merely to capitalize on their unexpected good fortune.  Tea Partiers, renegade conservatives, and even those in the right-leaning alternative media have been insisting that the case for smaller government practically makes itself after the Obamacare debacle, and that Republicans can usher in a new era of constitutional governance, if only they will find the courage and the wisdom to fight the good fight.  Roger L. Simon, the novelist, screenwriter, and conservative media guru put it this way last week:

The Obama administration has been the culmination of the advancement of state intrusion into our lives that began roughly a hundred years ago and has reached such a point that the originality and the intentions of our country are barely recognizable.  The results of this have been disastrous both economically and socially, most of all in terms of the personal freedom and liberty of our citizens.  We have gone backwards in many ways, not the least of which is that race relations have deteriorated during the administration of the first African-American president, largely due to state meddling.  We are divided as we have never been since the Civil War, and for really no good reason.

The people aren’t the problem. It’s the state.

And in a still-growing country of over 300 million the state gets bigger and bigger and bigger just by entropy, until we are all engulfed.

We need some government, obviously, but at this point in American history, in order to save our nation, we need to get the state as much as possible out of our lives, to cut its functions with a meat cleaver to release our better impulses, to have the renewal of Spring.  Deep down even some modern liberals realize this. (Bill Clinton famously said the era of big government is over before running the other way as if in fear of his own honesty.)

In this coming crucial year, those of us who feel the overweening state is the problem must reach out our hands to our fellow citizens as never before.  My sense is that many of them are ready to hear our message.  (The fiasco of Obamacare has been a gift in that regard.)  And if we don’t reach out our hands, there will be no American Spring.  Things will only get worse.  (The horrific attempt of the FCC to monitor newsrooms is a harbinger of totalitarian things to come.)

I am one of those eternal optimists who think we are on the brink of this American Spring.

Sounds great to us.  Get the state out of our lives.  Cut its functions with a meat cleaver.  Unleash the American spirit again!  What could be better?  But is it possible?

We don’t mean rain on the Paul-Simon parade, but they are, we’re afraid, out of their minds.  Would that it were just that simple.  Cut some programs here.  Slash the budget there.  Kick the NSA off our phones.  Make the CIA quit spying on the Senate.  Everyone’s happy, yes? Well . . . no.

When one reviews the list of the also-rans in the CPAC straw poll, it becomes painfully clear that there is something wrong.  In fourth place, for example, behind Paul, Cruz, and the surgeon Ben Carson, is the former front-runner for the GOP nomination, Chris Christie.  Below him, tied with perennial primary loser Rick Santorum, is Wisconsin Governor Scott Walker.  And way down at the bottom of the list, with a resounding 3% of the vote, is a guy named Paul Ryan, who, only two years ago, was the probable front-runner for the 2016 nomination.  Why, one cannot help but wonder, are these three stuck at the bottom of this poll of conservative big shots, all finishing well behind a non-politician (Carson) who is unabashedly anti-gun?

Well, there are several explanations.  Some of it is scandal.  Some of it is perceived scandal.  Some of it is connection to and participation in losing presidential campaigns.  Some of it is just personality.  But a big part of it – a part that is rarely discussed and which has affected some of the other parts, including the scandal business – is that these three candidates share something in common, which is the fact that they have actually taken on big government in real and concrete ways and have been mercilessly pilloried for their efforts.

It is true, we suppose, that Chris Christie was never exactly the kind of guy about whom CPAC attendees were going to go crazy.  But then, he is more conservative than Mitt Romney, who won the straw poll two years ago.  More relevantly, Christie has been severely damaged by the Washington Bridge scandal, which would make him appear a less attractive candidate, particularly to those who are predisposed to disagree with much of his ideology to begin with.  But that’s sort of our point.

Why, exactly, has Christie been so damaged by this scandal, which is relatively minor in the grand scheme of things, and which has never been tied to him personally?  The answer, put simply, is because his “scandal” has received more national attention by the mainstream media than Benghazi, or the IRS, or even the ATF’s Mexican gun-running operation.  Chris Christie has, in short, been targeted.

Now, don’t get us wrong.  We broach no excuses on behalf of politicians who are corrupt or who abuse their power.  And if Christie did so, then to hell with him.  At the same time, it’s obvious to anyone paying even the slightest bit of attention that Chris Christie’s scandal is the product, by and large, of a media obsession with him.

And why this obsession, you ask?  Because Chris Christie is “Enemy #1.”  And he became Enemy #1 by cutting government spending, by standing up to the teachers’ unions, and especially by reforming the state pension system.  Chris Christie may not be anyone’s idea of a hardcore Burkean, but he has done much of what he promised and has, especially, been a thorn in the side of the Big Government Left.  All of which is to say that it was imperative that he be destroyed.

Many of the same things can be said about Wisconsin’s Governor, Scott Walker.  It is easy to forget, we imagine, given the number of trials, tribulations, and attacks Walker has withstood, but this is a governor who is still in his FIRST TERM.  Walker was attacked in the press.  He faced a recall election.  The Wisconsin capitol building was picketed and Walker supporters were physically attacked.  Democratic legislators fled the state to avoid voting on Walker’s legislation.  And then, last month, the Walker-hate culminated in the release of some 27,000 pages of emails from Walker’s tenure as the Milwaukee County Executive, which his detractors had hoped would “prove” that he is as corrupt and abusive as Chris Christie allegedly is.

Of course, the results of the e-mail inquiry were less than spectacular.  But you can bet that’s only the beginning of the attacks on Walker.  After all, his reforms – most especially his reforms of public-sector unions and their “right” to collective bargaining – have been substantively more far-reaching than anything Christie has even attempted.  And therefore, he too must be destroyed.  As Jonathan Tobin recently noted on the Commentary web site:

Even a fishing expedition into 27,000 pages of emails revealed nothing more damning than an internal debate about whether a former thong model was a suitable candidate for a job.  Liberals may have had a brief moment of elation when they thought this would remove Walker from the 2016 picture as effectively as Bridgegate turned Chris Christie’s presidential hopes to ashes.  But Democrats would do well to ignore this distraction and instead take a deep dive into a story published today in the New York Times that centers on the real reason why the Wisconsin governor is so important: fiscal reform.

Though the slant of Steven Greenhouse’s lengthy feature is not so much Walker’s record but an attempt to engender sympathy for the unions he defeated in a 2011 legislative showdown, the governor still emerges as the hero of the saga.  Wisconsin’s public-sector unions are telling their colleagues around the nation to worry about other states emulating Walker’s efforts to change the balance of power between labor and government.  They’re right.  Though Walker paid a high price in terms of vilification and a recall effort that failed to drive him from office, the results of his reforms are now apparent.  As the Times reports, Wisconsin’s municipalities and school districts have saved more than $2 billion in the last two years.  The nation confronts a future in which the costs of public-sector salaries and benefits could push a host of cities off the same fiscal cliff that landed Detroit in bankruptcy and civil ruin.  Though the unions that lost their power to raid the public treasury will never forgive Walker, his courage in standing up to them and achieving results provides a compelling story that could very well inspire a run to the White House.

As for Paul Ryan, where do we even start?  Over the past couple of years, Ryan has been rather thoroughly and aggressively criticized, both on the Left and on the Right.  The guy can’t do anything right.  Or at least he can’t do anything right anymore.  Two years ago, of course, he was the President-in-Waiting.  Now he’s . . . well . . . Jack Kemp-lite.  During the 2012 presidential campaign, Ryan was repeatedly called a “radical” and a “social Darwinist.”  He was, naturally, portrayed as an aggressive “kid” who wanted nothing more than to throw Mama from the train – or to push her over a cliff.  The Democrats even went so far as to question the sincerity of his religious beliefs, arguing that a “true” Catholic would never produce a budget so at odds with Catholic social teaching as was Ryan’s.

Ryan’s “sin,” of course, was grabbing the proverbial third rail of government, by trying to reform runaway entitlement spending, specifically, runaway Medicare spending.  Far be it from us to jump on the bash-Ryan bandwagon, but didn’t he learn anything from George W. Bush’s second term?  Doesn’t he know that they call it the “third rail” for a reason?  Did it not occur to him that by offering to reform Medicare he was, essentially, ending his career?  Bush only talked about Social Security reform.  Ryan actually proposed Medicare reform and pushed it through the House – multiple times!  How could he not have known how that would end?

This, sadly, brings us to the nub of the problem with respect cutting government in this country, namely the fact that “government” as it’s traditionally understood is but a minor part of the overall concern.  Here is the sad but largely inarguable truth:  even if the Republicans take control of the Senate this November, even if they win EVERY SENATE SEAT up this fall, they still won’t be able to make the federal government “small.”  They could roll back into Washington next January with a mandate and an overwhelming majority.  They could keep their promises (for a change!) and cut the budget.  Heck, they could zero-out the entire discretionary budget.  They could override a hypothetical Obama veto and shut the city of Washington down.  And it still wouldn’t make the federal government small.

The federal debt currently stands at or around $17.5 trillion, which is just a shade over the entire GDP of the country.  Unfortunately, that’s just a drop in the proverbial bucket, which is to say that it is likely less than a third of the entire federal obligations, which stand at anywhere from $50-$100 trillion.  As we have noted before in these pages, there is not enough money in the country, not enough total wealth in cash, securities, and real estate to cover our federal obligations.  And whether anyone will admit it or not, those obligations won’t disappear, no matter how severely the Republicans slash the budget.  They are “non-discretionary,” which is to say that cutting the discretionary budget won’t affect them a lick.  In a recent column, Robert Samuelson, the Washington Post’s beacon of fiscal practicality, laid out the details in all their goriness:

Something strange is happening in Washington.  We are slowly dismantling the federal government, even as its spending is growing larger.  The paradox is that governmental competence is being systematically degraded while the government’s size, as measured by its budget, is increasing.  We are spending more and getting less, and — unless present trends are reversed — this will continue for years.  It threatens the end of government as we know it.

The cause is no mystery.  An aging population and higher health spending automatically increase budget outlays, which induce the president and Congress to curb spending on almost everything else, from defense to food stamps.  Over the next decade, all the government’s projected program growth stems from Social Security and health care, including the Affordable Care Act. By 2024, everything else will represent only 7.4 percent of national income (gross domestic product), the lowest share since at least 1940, says Douglas Elmendorf, head of the Congressional Budget Office.

This is the central budget story, and it’s largely missed – or ignored – by political leaders, the media, political scientists and the public.  The welfare state is taking over government.  It’s strangling government’s ability to respond to other national problems and priorities, because the constituencies for welfare benefits, led by Social Security’s 57 million, are more numerous and powerful than their competitors for federal support.  Politicians of both parties are loath to challenge these large, expectant and generally sympathetic groups.

Now, please don’t get us wrong.  We have long argued in these pages that the problem with big government isn’t necessarily the cost of it.  The problem with big government is the big government, and all the attendant restrictions of liberty, both personal and economic.  We continue to believe this.  Still, there are some inescapable facts here, the most significant of which is the fact that the cost of government entitlements will, eventually, overwhelm everything else.

This is, unfortunately, a more pronounced fact on the local and state levels, which explains the travails of Chris Christie and Scott Walker documented above.  If the federal government decides to cut costs, it cuts costs.  Slash a program here.  End a war there.  And if the federal government were, by some miracle, to change entitlements, the change would affect everyone and the change would be made as a matter of law.  If state or local governments try to cut their costs, however, and especially if they try to cut costs related to their single greatest long-term expense, public employees’ pensions, then all hell breaks loose.

The state of Rhode Island, for example, one of the states in most dire need of public pension reform, passed such a reorganization plan three years ago.  And public employees sued, taking the case to an arbitrator.  How’d it work out?  Well, the state was able to keep most of the reforms it made, but not everything.  The unions clawed back some benefits and especially took care of long-term workers, who managed to keep their defined-benefit pensions.  Similar efforts at reform – inadequate though they may be – have been challenged by public employees’ unions in California and Illinois.  All of which is to say that federal and state governments are not necessarily able to right there fiscal houses – and cut their governments – even if they want to do so.  Government is a force unto itself, and one that apparently cannot be stopped, even if tries to stop itself.

Consider as well the Federal Reserve.  It is a monster.  A veritable monument to all that is wrong with big government.   It must be either killed or tamed.  And Senator Rand Paul, the hero of CPAC, is on the job.  Like his father, he hates the beast.  He thinks it is too secret, too mysterious, and too lucrative for Wall Street types and for Fed personnel who used to be Wall Street types or will, one day, be Wall Street types.  The good Senator has long called for the Fed to be independently audited and for an end to what he calls the Fed’s “insane” leverage.  Two months ago, Paul took the floor of the Senate and made his pitch once again:

I rise today in opposition to secrecy, in opposition to the veil of secrecy that cloaks the money changing hands in the temple of the Federal Reserve.  While the money changes hands, the monied class gets richer and the middle class gets short-changed.  It is more than time to part the curtain that hides the trillions of dollars that change hands.  There is a revolving door from Wall Street to the Treasury to the Fed and back again.  We have former Secretaries of the Treasury going from government to Wall Street and pocketing hundreds of millions of dollars.

I have called repeatedly for transparency at the Federal Reserve so Americans can see what is being done with their money supply.  Every time I’ve called for transparency, people from both sides have said that transparency would only undermine the independence of the Federal Reserve.  But Congress does have a role in overseeing the Fed.  Congress created the Fed and right now independence has come to mean no oversight . . .

No one can tell for sure what the future holds.  But I for one am concerned that the panic of 2008 may not have been an anomaly but a harbinger of something far worse.  I am concerned that we have papered over our problems in a sea of new currency.  That quantitative easing has created an illusion of safety and security but beneath the surface lurks the seeds of another panic . . .

I believe the Federal Reserve is structurally flawed.

OK.  We can all agree, up to a point.  He is mostly right.  But so what?  What are his chances of success?  They should be pretty good, huh?  After all, he had the entire CPAC crowd on his side.  And, given that income inequality is considered by the Leftist elite to be one of the greatest evils in America today, they too should be on his side.  After all, it is pretty clear to anyone paying even the slightest bit of attention that Warren Buffett’s share of the nation’s wealth is going up because Berkshire is having a stellar year, largely as a result of the Fed’s various and sundry effort to goose the economy.  Likewise, it’s clear that Joe Sixpack’s income isn’t going up in the same way because he owns no equities or, if he does, they are held indirectly in his IRA or 401K and therefore aren’t counted as part of his income.  Moreover, zero-interest environments KILL traditional savers, those middle class types whom all politicians purport to love and who put their money in CDs and hope for the best.

So kill the beast.  And Conservatives win one of their most heated battles.  Right?

Well, there is a slight problem.

For starters, back in late 2010, banking analyst Meredith Whitney predicted a rather significant round of municipal bankruptcies.  And then last summer, after Detroit’s largest-ever municipal bankruptcy, Whitney again predicted that there would be a wave of defaults.

Of course, she turned out to be rather spectacularly wrong, Detroit notwithstanding.  And while there are a number of reasons for this, one of the most important and least mentioned is the fact that the pressure on municipalities and states has been eased significantly by the equities market performance over the last couple of years, the same equity markets that have been exacerbating income inequality.  And suddenly, not only does the Left’s support for sticking it to the Fed vanish, but the Right’s enthusiasm for the project begins to wane as well.  Indeed, would any political party in its right mind want to assume the direct responsibility for deciding how to get the nation out of the fiscal mess it is in?  We, for two, are dubious.

If anyone really believes that even a President Paul would be able to manage the political fallout that would hit his party after he takes personal responsibility for the Fed’s actions, then we should make a point of noting here that we have some swampland in Florida for sale.  It’s far more likely, we think, that he’d be happy to hide behind the Fed’s apron with every other politician.

And just like that – POOF! – the long-awaited “libertarian moment” would be gone.

We would, of course, love to see the government – at all levels – cut and cut drastically.  We think our old friend Grover Norquist was on to something when he said that we should shrink government down to the size where we can drown it in the bathtub.  But under current conditions, that is simply not going to happen.

The fact of the matter is that the government in these here United States, as it currently exists, is built on a demographic conception that no longer conforms to reality.  And this applies not just to the welfare state, but to the administrative state as well.  Way back in the early part of the last century, when both the welfare state and the administrative state were under construction, there were more than enough workers in private enterprise to provide for both the retired population and the new clerical class, the great bureaucracy that would manage our world and our lives.  That is simply not the case any longer.  The Baby Boomers are retiring.  The birth rate has collapsed and continues falling.  Neither the welfare state nor the administrative state is sustainable long-term.

A couple of weeks ago, National Review’s Jay Nordlinger posted a comment from a reader that went as follows:

A . . . reader, who works in the defense arena, made a very important point:

“You surely have heard the joke that, given the overwhelming predominance of entitlement spending in the federal budget, the United States is not a nation but instead a pension plan with an army.”  I had never heard that, but it is a good joke.

Well, continued our reader, “the military is itself increasingly a pension plan that also fights wars on occasion.”

It’s not just the army.  And it’s not just the government of the United States.  It’s every government and every bureaucracy at every level in our federalist system.  For nearly a century, our politicians have bought favor with the electorate and its purported servants by promising them that they could retire young, live for years, and have someone else pay for it.  Anybody anywhere who thinks he can simply waltz in to Washington – or Trenton or Madison – and simply “cut government” is going to have to deal with this fact and this near-century of promises first.

Careful readers will, of course, recognize that this is hardly a new theme for us.  Indeed, it’s been nearly four years now since we wrote the following:

Gird your loins, ladies and gentlemen, and beat the drums of war.  It is coming.  As surely as the sun rises in the east and Bill Clinton digs interns, war is coming.  And as war always is, it will be ugly and destructive.  And when it’s over, everything will have changed.

This won’t be a war against a foreign aggressor or an existential and nebulous attacker.  It will be a war within the states, a civil war.  And like the previous civil war, it will pit brother against brother and father against son.  The hostilities will rage for years and will destroy families, friendships, and maybe even governments . . .

Like nearly all wars throughout history, this one will be about resources and their scarcity.  As the resources run out, competition for them will increase.  And as competition increases, hostilities will commence.  Truth be told, they’ve already begun.

The proximate cause of this war – or wars, really – will be the inability of government to sustain itself in its current bloated condition.  The fact of the matter is that government at all levels in this country has grown too large too fast and will simply be unable to maintain its massive girth.  At current levels of taxation, there simply are not enough resources available to maintain the bloat that plagues the federal and especially the state and local governments.  Something is going to have to give.

If Rand Paul – or Roger Simon or the folks at CPAC last week – believes for a second that cutting government is as simple as he makes it sound, then he is in for a rude awakening, and we along with him.

There’s a war going on here, after all.  And the other side is not just going to give up and quit – largely because the “other side” is, in some very important ways, us.  We have Social Security checks coming, after all.  And we want retiree health care/Medicare someday.  We’ll even let you in on a little secret:  fully one half of The Political Forum  is already taking checks from the government and letting Uncle Sam pay for his annual check-ups.  And judging by the number of you, gentle readers, who have changed email addresses and moved to Florida over the past couple of years, we’re guessing that that half of TPF is not alone.

You think Rand Paul can drown the government in a bathtub?  We’d love to see him try.  Of course, even if he does, he’ll still have to manage the pensions.  And good luck to him with that.

 

Copyright 2014. The Political Forum. 8563 Senedo Road, Mt. Jackson, Virginia 22842, tel. 402-261-3175, fax 402-261-3175. All rights reserved. Information contained herein is based on data obtained from recognized services, issuer reports or communications, or other sources believed to be reliable. However, such information has not been verified by us, and we do not make any representations as to its accuracy or completeness, and we are not responsible for typographical errors. Any statements nonfactual in nature constitute only current opinions which are subject to change without notice.