Politics, et Cetera

A publication from The Political Forum, LLC

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Tuesday, October 24, 2017

They Said It:

There is some danger that our impatience for quick results may lead us to choose instruments which, though perhaps more efficient for achieving the particular ends, are not compatible with the preservation of a free society.  The increasing tendency to rely on administrative coercion and discrimination where a modification of the general rules of law might, perhaps more slowly, achieve the same object . . . is still a powerful legacy of the socialist period which is likely to influence policy for a long time to come….

The most important change which extensive government control produces is a psychological change, an alteration in the character of the people . . . The political ideals of a people and its attitude toward authority are as much the effect as the cause of the political institutions under which it lives.  This means, among other things, that even a strong tradition of political liberty is no safeguard if the danger is precisely that new institutions and policies will gradually undermine and destroy that spirit.

Friedrich Hayek, The Road to Serfdom (Forward to the American paperback edition), 1956.



Nearly twenty years ago –when we were gainfully employed – we hosted a conference for clients, featuring a handful of famous and well-connected scholars and policy makers.  The keynote speaker at our big dinner that year was Senator John McCain, who was, at the time, in the midst of crafting legislation to enable a “global settlement” between cigarette manufacturers and the federal and state governments.  McCain’s bill was considered much more aggressive and vindictive than the settlement previously negotiated between the tobacco companies and the state attorneys general, and it failed quite spectacularly.

As many of you undoubtedly recall, the tobacco liability issue was, more or less, a money-grab on the part of the various governments.  Unlike individual cigarette users and their families, the state and federal governments could not demonstrate direct, personal harm from smoking.  So they fabricated an indirect case, a financial argument whereby they sought to recoup allegedly misspent taxpayer dollars.  They claimed that smoking and tobacco-related illnesses placed an undue financial burden on various health care bureaucracies, and therefore they – and the taxpayers! – were entitled to compensation from those who created the problem.

In truth, of course, cigarettes actually saved these various government entities money over the long-term.  As morose as it sounds, the fact that cigarette users die comparatively young meant that these governments were saving money on old-age health care costs, pension payments, and especially Social Security payouts.  Honest accounting would have killed this extortion/rent-extraction effort in the cradle, but there was nothing especially honest about any of the cigarette settlements.  “Big Tobacco” was easily demonized and defended itself poorly and deceitfully.  All of which meant that a righteously indignant politician stood to gain great deal from the tobacco mess.  If one could portray himself as a noble crusader and righteous champion of the people, then he could forever ingratiate himself with the mainstream press and the other kingmakers of national politics.

Enter John McCain.

That evening nearly two decades ago, McCain started the evening with his standard stump speech.  He prattled on about how he thought Leonardo DiCaprio was an “effeminate wimp,” and about how there is too much money in politics, and about Bill Clinton’s problems, and a host of other fairly common and anodyne topics.  He avoided the topic of his tobacco litigation legislation altogether – until, that is, he was asked about it in the Q&A portion of his presentation.

An old friend of ours – a reader of this newsletter who shall remain nameless – asked McCain about the legislation and whether the impetus behind it was wise.  How, our friendly interlocutor asked, does the government justify collecting health-care-related “paybacks” from the tobacco companies when there are so many other products on the market that affect health adversely?  Would the government go after Coke and Pepsi next?  Would it turn its attention to McDonald’s and Burger King?  Would it make Anheuser-Busch repay the costs for liver transplants caused by cirrhosis?  Where, pray tell, would the government draw the line?

What happened next surprised everyone, although, in retrospect, it probably shouldn’t have.  The Senator’s little face grew beet red.  The veins in his neck and on his forehead popped out.  He clenched his teeth, and then he fired back.  That’s stupid, he said.  No government would ever do something so asinine.  And even to suggest the possibility was even more asinine.  Moreover, he continued, maybe he shouldn’t be going after tobacco companies at all, and instead should be investigating and punishing “crooked insurance companies.”

Now, if that last bit sounds a bit like a non-sequitur, remember that, at the time, the firm we worked for was a subsidiary of a large insurance company, one with a recent history of checkered behavior that would eventually result in record, nearly 9-digit fines.  John McCain was offended by a simple question that he should have heard a thousand times, and his instinct reaction was to lash and, more ominously, to threaten the questioner, or at least to try to threaten the questioner.

We learned a great many things about John McCain that evening, at least a couple of which hint at large, substantive problems with our politics that are more relevant than ever today, some twenty years later.

The first thing we learned was that the Senator’s arduously cultivated image as the last honest man in Washington was pure garbage.  After narrowly escaping Ethics Committee sanction – or worse – in the Keating Five scandal, John McCain had tried very hard to prove that his true nature was incorruptible.  Indeed, his long and tiresome crusade against money in politics was a blatant and obvious attempt to distract from his own questionable behavior with respect to effects of money on certain politicians.  Yet, here he was talking to and cultivating ties with people he believed were employees of a “corrupt insurance company.”  He was wrong about that, of course, but he didn’t know that.  He was happy to show up, to glad-hand, and to mingle with corrupt insurance types, last honest man in Washington be damned.

More importantly, the second thing that we learned about John McCain that day – and that would come back to time and again in our discussions about the foolishness of trying to regulate campaign funds – is that he is intoxicated with the power of government to make the world a better place.  Many years ago, Max Eastman, the former communist who saw the light, described this fixation as “yearning to do good and obsessed with the power of the state to do it.”  Eastman described these advocates of a state-planned society as “fellow travelers,” and allowed as how they were not themselves on the death train, but were “laying the tracks upon which another death train will travel.”

John McCain is a fellow traveler.  He may have honestly and earnestly truly believed that his campaign against tobacco would be a public service, that it would never ever metastasize into a far more ambitious governmental plan to save people from themselves.  But here we are today, watching dejectedly as the Republicans ignore the problems with the Obamacare regime and the Democrats plan to “reform” it by making the passage of a single-payer government plan and integral part of their 2020 presidential platform.  McCain helped lay the tracks, you see, and now the engineers of government planning are stoking their fireboxes, getting ready to head out of the station.

Almost exactly a year ago, in one of our last pre-election pieces, we wrote about the absolute derangement of anyone who thinks that a single-payer health care system can or should be set up in the United States.  For a variety of reasons, we argued that even to attempt to implement such a system would be a disaster – by any and all human, political, and economic measures.

We also warned that the sheer irrationality of such a proposal wouldn’t keep the Democrats from embracing it and using it as a platform for the 2018 midterms and the 2020 presidential campaign.  “What this means,” we concluded, “is that the Republicans – God help us – are going to have to figure out how to manage the health care debate next year and guide it in the direction of less, not more government control.”

And we all know how that turned out.

There are, of course, a number of reasons why the Obamacare reform movement failed, but one of the most troubling and most significant is the fact that Democrats and even a number of Republicans understand that Federal control of the health care system is the key to power that would make Machiavelli blush.

Don’t believe us?  Well, check this out from the London’s Telegraph.

The NHS will ban patients from surgery indefinitely unless they lose weight or quit smoking, under controversial plans drawn up in Hertfordshire . . . . In recent years, a number of areas have introduced delays for such patients – with some told operations will be put back for months, during which time they are expected to try to lose weight or stop smoking.

But the new rules, drawn up by clinical commissioning groups (CCGs) in Hertfordshire, say that obese patients “will not get non-urgent surgery until they reduce their weight” at all, unless the circumstances are exceptional.  The criteria also mean smokers will only be referred for operations if they have stopped smoking for at least eight weeks, with such patients breathalysed before referral.

East and North Hertfordshire CCG and  Herts Valleys said the plans aimed to encourage people “to take more responsibility for their own health and wellbeing, wherever possible, freeing up limited NHS resources for priority treatment”.

This is where the administrative state is headed.  This is where it has always been headed.  This is the inevitable outcome of the conscious decision to turn over “health care” to the bureaucracy.

Seven years ago, when the Democrats were working hard to pass Obamacare, Sarah Palin was mocked mercilessly for suggesting that such a reform would lead inevitably to “death panels,” government-enabled boards that would decide who was or wasn’t deserving of life-saving care, particularly in old-age.  We doubt that anyone in England is laughing at Mrs. Palin now.  Once the tracks have been laid, the train will come in due time.

Almost twenty years ago, John McCain angrily denied that this was the case, that the state, when given an inch, invariably demands miles and miles and miles more.  He also denied the notion that if you decide that the government should regulate one thing, it will demand to regulate everything.

By contrast, during the health care debate early in Obama’s presidency, we warned that the reforms proposed would forever change the relationship between the people and their government; that the government would henceforth be forever in charge of deciding what is and what is not good for the people – and, by extension, for the state’s pocketbook.  We are seeing this today in England, where the government has the power to decide, in any gross and ham-handed way it damn well pleases, “to encourage people ‘to take more responsibility for their own health and wellbeing . . .’”  Or else.

And that brings us, inevitably, to the third and likely most important thing we learned about John McCain that night nearly two decades ago, namely the fact that he doesn’t especially think that government needs to be of, by, and for the people, as long as the government has access to glorious and renowned philosopher kings like him.

Before we go any further, we want to make a couple of brief points.  First, our obvious distaste for John McCain the politician should not misconstrued as disparagement of the sacrifices he made for this country.  In Vietnam, he was a hero.  And for that the nation owes him a debt of gratitude.  We also believe that is a patriot who loves this country very much.  Why else would have given it everything that he has, including five years in the Hanoi Hilton?

That said, in Washington, McCain has worn thin his welcome.  And the nation’s debt simply does not extend to allowing him to continue to govern as if his own personal opinions matter more than those of his constituents – in Arizona, in the Republican Party, and in the nation more generally.

At our conference dinner lo those many years ago, McCain grew incensed at the fact that someone clearly beneath him would dare to challenge his wisdom.  The question he was asked was perfectly bland, perfectly reasonable, and perfectly within the expected bounds of elected official-constituent discussion.  There was nothing about the question that should have caused him such discomfort.  And yet it did.  Part of that was his legendary temper.  But another, larger part was his belief that he understood what was best for country, while everyone else – including the other elected representatives of his own party – was too stupid, too corrupt, or too indebted to “special interests” to grasp what really needed to be done.

This latter characteristic is NOT, we should note, one that is unique to John McCain.  Indeed, the arrogance and scorn for the people and their Constitution that McCain demonstrated that night are pervasive among members of our ruling class, and especially among its elected members.  It is this characteristic, this ruling-class belief in their own moral and intellectual superiority, that finally awakened many patriotic Americans to the fact that the government has gone too far and become too corrupted.  And so out of desperation, they voted for the only man who promised to anything about, now-President Donald Trump.

Not surprisingly, this desperation also gave us a Congress controlled entirely by President Trump’s party.  Unfortunately, the people’s leap of faith appears wasted on this latter count, as they voted for a party and elected a Congress that is nonetheless still unable to anything at all about anything at all.  We’re not usually ones to complain about a “do-nothing Congress,” but this Congress in particular is doing nothing not because it wants to move cautiously or seeks compromise, but out of spite.

In July of this year, after seven years of GOP promises to roll-back Barack Obama’s greatest achievement, President Trump and his few allies in Congress were finally able to push health care reform to the Senate floor, in the form of the “skinny repeal” bill.  The House had already passed a bill, and therefore all that was needed to form a conference committee and to fashion an effective compromise bill was Senate passage – or to be more specific, one single vote to secure passage.  Our old friend John Fund explains what happened next:

In 2008, presidential candidate John McCain bravely proposed a health-care reform that Fortune magazine said was a giant step toward “laissez faire liberty” in health care. He wanted to empower consumers to find the best health care and even end the tax break for employer-sponsored plans.  In 2015, McCain joined all but one other GOP senator in voting to repeal Obamacare.  The next year he ran an ad in his primary campaign against a Tea Party Republican claiming he [John McCain] was “leading the fight to stop Obamacare.” That ad helped him win 51 percent of the primary vote.

Just this year, McCain introduced a bill to “fully” repeal Obamacare and replace it with a “free-market approach that strengthens the quality and accessibility of care.”

Then, last Friday, McCain faced a choice on the Senate floor.  He could vote with all but two of his GOP colleagues for “a skinny repeal” bill and get to a conference committee, where negotiators from the House and Senate could devise a bill that might pass both chambers.  Or he could effectively leave Obamacare in place, dooming any realistic effort at curbing it given the uniform Democratic opposition to any real reform.

McCain sided with the status quo, killing the “skinny repeal.”  Journalists rushed to gush over his vote, cast only a few days after a surgery to remove a dangerous brain tumor.

In September, Trump and his allies were somehow able to resurrect the dead and seemingly buried Obamacare repeal effort by fashioning the Graham-Cassidy repeal bill.  Care to take a guess how that turned out?  The New York Times has the answer:

Senator John McCain of Arizona announced on Friday that he would oppose the latest proposal to repeal the Affordable Care Act, leaving Republican leaders with little hope of succeeding in their last-ditch attempt to dismantle the health law and fulfill their longstanding promise to conservative voters.

For Mr. McCain, it was a slightly less dramatic reprise of his middle-of-the-night thumbs-down that killed the last repeal effort in July.  This time, the senator, battling brain cancer and confronting his best friend in the Senate, Lindsey Graham of South Carolina, issued a statement saying that he could not “in good conscience” support the proposal by Senators Graham and Bill Cassidy of Louisiana.

With health care reform/Obamacare repeal dead, President Trump has moved on to other projects, most notably tax reform.  Trump ran on a promise to cut taxes, especially corporate taxes, which are currently high by developed world standards, confusing, and generally irrational.  Kevin Hassett, the chairman of the President’s Council of Economic Advisers, has made a career of detailing the economic benefits that would accrue to the nation – and especially its workers – by standardizing and cutting corporate taxes.  The Left, of course, hates Hassett for doing so and especially for backing up his arguments with extensive evidence.  Republicans, by contrast, are reassured by Hassett’s efforts and enthusiastic about the idea of normalizing corporate taxes.  Or at least most Republicans are.  The Washington Post managed to discover one who might not be quite so excited:

It’s a specter that should stalk the nightmares of Republican leaders: a Senate chamber, packed on Christmas Eve, as lawmakers gather to decide the fate of a tax package that will shape the GOP’s political fortunes.  The bill remains one vote shy, and then Sen. John McCain walks in, pauses before the desk, and delivers his second thumbs-down dagger of the year.

For that reason, the Arizona Republican, who is fighting a public battle with brain cancer, will be among his party’s most closely watched as the year winds down and the tax debate gears up.  Yet over his decades in public life, McCain has traced a zigzagging line on the subject, leaving little clear indication of how he’ll approach a potentially decisive vote.  A look at the senator’s record on taxes shows that three things seem most important to him: public debate, some help for the middle class, and not exploding the deficit . . .

So far, McCain’s potential objections sound familiar . . . .

On tax policy itself, McCain has proved a moving target.  He opposed the 2001 Bush tax cuts — one of only two Republicans to do so — citing what he called the bill’s lopsided benefits for the wealthy.  “I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief,” he said.  0Two years later, he was one of only three Republicans to vote against the next round of Bush cuts, again citing its skew toward the rich but also the deficit impact of another round of breaks as the country faced mounting war bills . . . .

More recently, McCain sounded more like his trustbusting political hero, Teddy Roosevelt, when he confronted Apple’s tax-dodging strategies. In a 2013 hearing, he joined with then-Sen. Carl Levin (D-Mich.) in criticizing chief executive Tim Cook. “U.S. corporations cannot continue to avoid paying their appropriate share in taxes,” McCain told the tech honcho. “Our military can’t afford it. Our economy cannot endure it. And the American people will not tolerate it.”

Now, Doug Holtz-Eakin — McCain’s top economic adviser in his 2008 campaign, currently president of the American Action Forum — said the senator will want to know first what a tax bill will mean for the middle class.  It’s not clear whether that means the package needs to maintain the current code’s progressivity, and Holtz-Eakin noted he doesn’t speak for McCain.  “Nobody gets everything they want,” he said.  “He’ll look at the package as a whole and ask if its beneficial for the middle class.”

The deficit impact will matter, too.  “He’s cognizant of the fiscal outlook, which is not good, and he’s never been fond of big spending, big government, or big red ink,” Holtz-Eakin tells me.

If you’re beginning to sense a pattern here, you’re not alone.  A great many commentators on the Right and even a few on the Left believe that this is McCain’s payback to the President for comments Trump made about the Senator back during the campaign.  This supposition gained credence over weekend, when McCain made comments about the draft and Vietnam, saying that it was wrong that rich kids with “bone spurs” were able to get deferments.  Trump, of course, received five draft deferments, including one for a bone spur.

For our part, we do think that McCain meant to mock Trump’s deferment history – even if the Senator now denies it – but we do not think that he is using his position as a critical vote to take his revenge on the President.  We were very deliberate above when we noted that we believe McCain is a hero and a patriot and that his arrogance and scorn for outsiders are not unique among Washington insiders.  John McCain is our example here, but only because he is an easy target, someone who makes his opinion known constantly and is unembarrassed by his belief that his opinion is better than everyone else’s.  In all of this, he is no different than a great majority of those who ostensibly run this country.  Moreover he loves this country deeply and would never do anything intentionally petty to harm it.  The problem is that he is unable to distinguish what he believes from what his constituents want or want the country needs.  He has been in Washington so long and has become so deeply enmeshed in the ruling class milieu that for him everything blends together: his opinion, the best interest of the nation, the will of the people, etc.

We’re afraid that what all of this means going forward is continued Washington paralysis.  Donald Trump’s broad campaign promise consisted of two principal themes:  rolling back the Obama presidency and restoring power to the people.  The Republican Party more generally agreed and agrees with the first theme, but is fervidly opposed to the second.  Over the next few months, we will learn which of the two is most important to the Republican swamp creatures.  Are they willing to give up some of their own personal power to unwind the Obama legacy?  Or are they too comfortable and too accustomed to power to risk sacrificing any of it?

We’re pretty convinced it’s the latter, which means that the Republican Congress will continue to nothing and to do it as slowly as possible.  Ironically – or fittingly, if you prefer – this may backfire on the Republican establishment, costing it the very power its members are trying desperately to preserve.  We hate to be the bearers of bad news for the GOP, but trouble is on the horizon.  National Journal reported the following over the weekend:

Of the 53 House Republicans facing competitive races, according to Cook Political Report ratings, a whopping 21 have been outraised by at least one Democratic opponent in the just-completed fundraising quarter.  That’s a stunningly high number this early in the cycle, one that illustrates just how favorable the political environment is for House Democrats.

The third-quarter fundraising reports paint a gloomy picture for many Republicans.  Rep. Steve Knight of California raised only $144,000 in the last three months, less than the total of two lesser-known Democratic challengers.  Veteran Rep. Rodney Frelinghuysen of New Jersey brought in only $154,000 — just over one-third the amount of his leading Democratic rival, retired Navy helicopter pilot Mikie Sherrill.  In the Houston area, Rep. John Culberson, who typically doesn’t face competitive races, raised only $172,000 in a Democratic-trending district that backed Hillary Clinton last year.

The list goes on: Rep. Dana Rohrabacher of California, under scrutiny over his unseemly ties to Russia, was outraised by a highly touted challenger and has only $600,000 in the bank.  Rep. Claudia Tenney of New York saw her leading opponent raise twice as much money she did; even her Republican predecessor, former Rep. Richard Hanna, donated to the Democratic challenger.  Rep. Leonard Lance of New Jersey brought in less than $200,000 in the quarter and has less than a half-million in cash on hand in a district where advertising is prohibitively expensive . . . .

The odds of a Democratic House takeover in 2018 have never looked greater this election cycle.  One plugged-in House Democratic strategist, who has previously been circumspect about the party’s chances to win control of the lower chamber, put the chances of Nancy Pelosi again becoming speaker at a 7 (with 10 being the most likely).  The strategist’s outlook is bolstered by a growing pile of empirical evidence, like eye-popping fundraising from the party’s top challengers, suggesting that next November is poised to be a wave election for the Democrats.

If this happens, if the Republicans lose their majorities next year – and right now, we have no reason to think that it won’t happen – they will have one but themselves to blame.  Not that they will blame themselves, of course.  They will find someone else to blame, most likely “the people” who were simply too dumb to know better or too impudent to do the proper thing.

As for the Democrats, they will crow loudly, insisting that their “resistance” to trump yielded the desired results.  NeverTrumpers like Bill Kristol will tut-tut, sorrowfully and knowingly, absolutely certain in the knowledge that Donald Trump tore the party asunder.  None of this will be true.

To paraphrase Walt Kelly’s Pogo, the Republicans have not yet met the enemy, but he is them.

And anyone who watched John McCain closely one evening twenty years ago could have told them that was the case.

Copyright 2017. The Political Forum. 3350 Longview Ct., Lincoln NE  68506, 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.