Tuesday, April 3, 2012

Obama's Lack of Vision

It is possible (although hardly likely) that President Obama just blew his bid for reelection. By "warning" — threatening, actually — the "unelected" United States Supreme Court that it should not take the "extraordinary and unprecedented" act of overturning a law passed by overwhelming majorities in the House and Senate by an "elected" Congress, he seems to think he has the power of Henry VIII Tudor or the Queen of Hearts. He thinks he can bully anyone he likes and get away with it. His reelection may very well depend on how many voters he can get to agree with him that bullying of any kind is now acceptable.

Bullying is not, however, the real issue. True, Americans traditionally detest bullies. It remains to be seen, however, how much calcium remains in the national spinal column, and how willing the country is to oppose someone who, however good or bad his intentions and proposals, has so spectacularly failed the character test.

Aside from that we need to look at the substance of what the president said. Frankly, there are so many things wrong, even contrary to established fact in Obama's statements that it's difficult to know where to begin. "Elected," for example, implies a free choice by the voters. Do Americans (or anyone else, for that matter) truly have a free choice when they lack the economic power to support and sustain their (alleged) political power? Neither Daniel Webster nor Benjamin Watkins Leigh thought so.

The indifference of many of today's voters — in contrast to the sometimes violent elections up through the 1890s when a determinant number of Americans still owned capital — simply reflects the reality expressed by Webster that "power naturally and necessarily follows property." People who own meaningful capital stakes don't vote for politicians who try to guarantee every want and need of their supporters — and who raise taxes to pay for it. As William Cobbett pointed out,

"You may twist the word freedom as long as you please, but at last it comes to quiet enjoyment of your own property, or it comes to nothing. Why do men want any of those things that are called political rights and privileges? Why do they, for instance, want to vote at elections for members of parliament? Oh! because they shall then have an influence over the conduct of those members. And of what use is that? Oh! then they will prevent the members from doing wrong. What wrong? Why, imposing taxes that ought not to be paid. That is all; that is the use, and the only use, of any right or privilege that men in general can have." (A History of the Protestant Reformation in England and Ireland, 1827, §456.)

The Tammany Hall machine stayed in power and controlled New York City for the benefit of a Democratic Party elite until the 1930s because it monopolized "patronage" — city jobs and benefits to the propertyless masses that elected their candidates. In the 1890s, however, and up until the 1930s Congress (although probably just as corrupt) ignored the demands of Coxey's Army and others to increase government spending and debauch the currency to finance public works and create meaningless jobs because their constituents — the trusts and the financial services industry — demanded sound money to support the industry and commerce on which they had a virtual monopoly.

What brought down Tammany Hall was not the reforming Fiorello LaGuardia, but the shift in the political power base — and thus patronage — from local and state governments, to the federal government with the New Deal. Keynesian economics and its emphasis on debt financing allowed FDR to manipulate the currency and fund government programs without having to cater quite as much to the rich or the rapidly shrinking capital-owning middle class voters who (then as now) paid the bulk of taxes. Along with the wage system, patronage in the form of job creation, corporate and individual welfare, Social Security, and the tax code was legitimized and entrenched as a matter of national policy. A non-owning majority now not only acquiesced to increasing government power, but began demanding it, often voting only when their share of patronage was threatened.

What about that "extraordinary and unprecedented" step of overturning a law passed by a duly elected legislature? We'll ignore for the sake of argument the president's puffery that the health care bill was passed by overwhelming majorities. "Puffing" is a legal term meaning "[a]n expression of opinion by [a] seller not made as a representation of fact." In other words, something that no reasonable person is expected to take seriously.

"Extraordinary and unprecedented"? Hardly. As William Crosskey pointed out in his monumental study, Politics and the Constitution in the History of the United States (1953) the expansion of judicial review into judicial activism has been going full throttle since Marbury v. Madison in 1803. Although a correct decision, Marbury was used to justify later action by the Court, primarily intended prior to the Civil War to preserve slavery. Judicial review was used afterwards to extend the Court's power as an end in itself. It was pivotal in the development of the theory of the "Living Constitution," a triumph of the Harvard school's legal positivism that can make the Constitution mean whatever the justices want it to mean.

Obama lauded such "raw judicial power" recently when he celebrated the decision in Roe v. Wade. His whole training as a lawyer is based on its validity. It's what he taught as a professor of Constitutional Law at the University of Chicago. Now that it is getting in the way of what he wants, however, judicial review suddenly becomes "extraordinary and unprecedented."

Even that, however, is not the real issue. The fact is that President Obama's vision of the role of government as government is seriously flawed. The State is not the guarantor of every individual want and need, but the guardian of the general welfare, the "level playing field" within which opportunity, not results, is optimized. In the real world, the government cannot mandate or guarantee results, any more than the market — free or unfree — can. Contrary to popular belief, government does not have the power of a god to create something out of nothing and provide it to its faithful worshippers, be it manna, quail, or a welfare check. Government creates nothing — creation and control are not functions of government.

Instead, government is supposed to protect the environment within which people can provide for themselves through their own efforts — preferably through their exercise of private property in capital. As Pope Leo XIII explained,

"This becomes still more clearly evident if man's nature be considered a little more deeply. For man, fathoming by his faculty of reason matters without number, linking the future with the present, and being master of his own acts, guides his ways under the eternal law and the power of God, whose providence governs all things. Wherefore, it is in his power to exercise his choice not only as to matters that regard his present welfare, but also about those which he deems may be for his advantage in time yet to come. Hence, man not only should possess the fruits of the earth, but also the very soil, inasmuch as from the produce of the earth he has to lay by provision for the future. Man's needs do not die out, but forever recur; although satisfied today, they demand fresh supplies for tomorrow. Nature accordingly must have given to man a source that is stable and remaining always with him, from which he might look to draw continual supplies. And this stable condition of things he finds solely in the earth and its fruits. There is no need to bring in the State. Man precedes the State, and possesses, prior to the formation of any State, the right of providing for the substance of his body." (Rerum Novarum, § 7.)

Yes, we need health care that is universally available, not universally mandated. We also need a way for people to be able to pay for what they get, backed up by private charity when they cannot, with government welfare the final recourse when all else fails. A State guarantee of every want and need only guarantees State bankruptcy.

A growth economy built on an aggressive program of expanded capital ownership, e.g., "Capital Homesteading for every citizen," financed by monetizing the present value of future marketable goods and services instead of government deficits, could lay the foundation for sustainable economic growth in which everyone can participate as an owner of both labor and capital, and provide sufficient income to meet ordinary needs — including health care — adequately.

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