Imagine a republic in which the lawmakers refused to pass any legislation they had not read or did not understand. Imagine that these lawmakers were so honorable that they refused to burden generations yet unborn with crushing debts just to secure a few comforts for those who had voted them into office. This republic would resemble the one created by the idealists who kicked off the American Revolution. As the aging Benjamin Franklin hobbled out of Independence Hall after the Constitutional Convention of 1789, a woman called to him from the crowd asking what sort of government had been established in America. “A republic,” Franklin replied, “If you can keep it.”
In the 1830s the skeptical French aristocrat Alexis de Tocqueville toured America, took stock of the American character and offered his opinion that all would be well for America until the Americans realized that they could vote themselves anything.
Back then there were limits on what Americans could vote for themselves because there were limits on how much of people’s private property the Congress was at liberty to confiscate. The first American income tax wasn’t imposed until 1861 to finance the Civil War. It was a tax of 3% on all incomes over $800. In 1894, Democrats in Congress passed the Wilson-Gorman tariff, which imposed the first peacetime income tax. The rate was 2% on all incomes over $4,000 and it affected fewer than 10% of American households.
A scant fifteen years later, in 1909, President Taft proposed a 2% federal income tax on all corporations. On July 12th, 1909, a resolution proposing the Sixteenth Amendment was declared ratified. Thereafter, the Congress was at liberty to set income tax rates for American corporations and individuals.
Meanwhile, Karl Marx had been born in 1818. His Communist Manifesto was published in 1848. The first line of Chapter One read: “The history of hitherto existing society is the history of class struggles.” Mr. Marx’s social critique enjoyed a heightened appeal during the Great Depression.
Marx himself was a quack economist who was caught red handed falsifying his data to make it comport with his utopian vision; his true utility for politicians and leftist academics was the way in which Marx used the illusion of scientific fact to make envy and mediocrity socially acceptable.
Enter Franklin Roosevelt
Much like our present president, Franklin Roosevelt captured the White House with charm and bravado and exactly like Barack Obama, Franklin Roosevelt really didn’t have a plan; he just started doing stuff. First he tried some warmed-over Hooverism; then he got creative. When the Supreme Court told Roosevelt that he had strayed beyond the limits of his enumerated powers and that his schemes were unconstitutional, Roosevelt responded by threatening to enlarge the Supreme Court with lots of hand-picked pro-Roosevelt jurists. Nothing in our Constitution limits the number of justices on the Supreme Court to the number nine; it’s just a tradition. Roosevelt could have packed the Court with thirty friendly judges. The sitting Court backed down and Franklin had his way with the law.
Friends of Barack Obama do him no favors by comparing him to Franklin Roosevelt. By aping Roosevelt’s lavish spending programs, Obama is destined to repeat Roosevelt’s signal failure: the New Deal did nothing to end the Great Depression. In fact, New Deal programs made matters worse. Census data from the time of Roosevelt’s administration demonstrate that average unemployment for the year 1939 was higher than in the year 1931, the year Roosevelt took the presidency from Herbert Hoover in a landslide. Roosevelt’s golden rhetoric of hope and change only led to deepening despair. In the end, all credit for ending Depression Era unemployment must be taken away from Roosevelt and given to the master of change, Adolf Hitler, whose invasion of Poland in September of 1939 jump started American wartime employment.
Here’s the clincher: On May 9th, 1939, Franklin Roosevelt’s friend, luncheon buddy and loyal secretary of the Treasury Department, Henry Morgenthau Jr., gave testimony before ranking Democrats of the House Ways and Means Committee. During his testimony, Mr. Morgenthau explained that “We have tried spending money. We are spending more than we have ever spent before and it does not work.”
The well-meaning Mr. Morgenthau opened his heart: “I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.”
Just in case his utopian comrades had missed his point, Morgenthau added: “I say after eight years of this Administration we have just as much unemployment as when we started . . . And an enormous debt to boot!” That was a scant four months before the American economy got a big Nazi boot in the butt. Change had arrived.
So, the New Deal was a failure; lavish spending did not produce a recovery. But history’s lessons are lost on liberal utopians who insist that President Obama must be “bold,” that he must spend billions more to “save” jobs. They want Obama to pursue an economic model that is a proven failure.
The motto of liberal utopians ought to be “Oops!” Nothing fails quite as spectacularly as a gigantic New Deal program on autopilot. Obama, take note . . .
The New Deal program called Social Security was signed into law in 1935. In its original incarnation the program excluded all domestic workers and all agricultural workers. Because 90% of working black women did domestic work, and because most black men did agricultural labor, the Social Security program effectively excluded black folks. It also excluded women except as death-benefit recipients. Over time, all of that changed.
The first Social Security payment was to Ernest Ackerman, who retired only one day after Social Security began. Five cents were withheld from his pay during that period so Mr. Ackerman received a lump-sum payout of seventeen cents from Social Security.
The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1937 she had paid a total of $24.75 into the Social Security system. Her first check was for $24.54. After her second monthly check, Ida Fuller had already received more than she had contributed over a three-year period. She lived to be 100 and collected a total of $22,888.92. That should have been a warning.
Back when most men didn’t live past age 65 and there were dozens of workers contributing to Social Security for every person receiving benefits, the program seemed to be immune from The Law of Unintended Consequences. Today it stands exposed as a grotesque Ponzi scheme teetering on the brink of collapse. Today’s recipients are living decades beyond retirement age and soon there will be only two workers contributing to the fund for every beneficiary. Congress spent incoming Social Security revenues upon arrival; none of it was banked or invested. The cupboard is bare. The average Social Security recipient pockets far more that he ever contributed. It’s a welfare program. Social Security is billions of dollars in arrears. Annual expenditures for this program exceed the cost of our national defense; it is our nation’s greatest expense. In dollar volume, Social Security is the largest program on Earth.
Screwing the Young
It’s a raw deal for America’s young people. Here’s the dirty secret: the federal government never even tried to make the Social Security system self-sustaining. Instead, Congress played a shell game; they borrowed from Social Security revenues and promised to pay themselves back . . . with interest. Meanwhile, life expectancies grew by decades as Congress after Congress pretended not to notice. Recent college graduates will enter their peak earning years supporting half a retiree; they’ll be paying the bills for geezers playing golf.
This burden on the young will be a dream crusher: projected costs for Social Security and Medicare twenty years down the road will saddle every toiling young taxpayer with a weekly paycheck deduction of as much as $500 to pay for that half a retiree. If Obama tries to monetize the fabulous debt obligations he so eagerly created, then everyone’s greenbacks will be devalued and that weekly deduction to bankroll the geezers could go way up.
Worse yet, it’s a double whammy for young workers. Because our spendthrift government owes so much money to itself, young workers will be paying for old folks’ retirement costs with their payroll taxes, which go to Social Security and Medicare, and they will also see their income taxes go to pay back the money that Congress is looting from Social Security today.
Presidential candidate Barry Goldwater addressed this issue honestly back in 1964. Goldwater wanted to make participation in Social Security voluntary; he was opposed to Medicare, which was then only a proposal. This honest man lost the election by a landslide because the electorate understood that they would be on the winning side of the Social Security Ponzi scheme. By the year 2016 most Americans will be on the losing side of this decaying Depression Era scam.
Obama has plans to “save” Social Security by raising taxes rather than cutting back on benefits. He has hitched his star to a fading generation. The first presidential candidate who can explain the math and capture the emerging young electorate that is being screwed by Roosevelt’s Trojan Horse, will be the savior of future generations.
All of this would have dumbfounded the Americans of 1935. Opinion polls conducted during the Great Depression made clear that no less than 70% of Americans believed that government had little or no role to play in correcting economic downturns. No less a luminary than Henry Morgenthau Jr., Roosevelt’s secretary of the Treasury, has confirmed that all of the lavish New Deal spending did nothing to end the Great Depression. By 1939, Europe was farther down the road to economic recovery than was Roosevelt’s New-Deal United States.
For all the same reasons, Barack Obama must stop trying to “stimulate” America out of the Great Recession. None of his stimuli have worked and all of his predictions have proven false. Obama stampeded Congress into legislating a $787 billion spending bill by insisting that there was a “crisis” and that if Congress did not rush it into law without taking the time to read it and comprehend its consequences, then unemployment could not be stopped cold at 8%. So the spending was hastily authorized and Obama used it to reward the reckless left-leaning investment houses that had contributed so much to the crisis, but had also contributed so much to the Democrat Party. Then he turned his administration into a Goldman Sacks alumni association.
While he was feeling generous with our stolen earnings, Mr. Obama purchased a wildly overpriced automobile company that was losing money on every car sale. In truth, General Motors had long ago ceased to be a genuine car company; it was, in fact, just a cash cow for the United Auto Workers pension fund. General Motors just happened to assemble vehicles as a sideline. Every GM vehicle had a built-in pension cost of $2,000 which made GM vehicles uncompetitive in the marketplace. They also had a hard-to-shake reputation for building crap. Obama bought General Motors with our earnings for the purpose of saving the autoworkers’ pension-fund racket. It was the pension fund of these Democrat contributors that was “too big to fail.” General Motors is just a stupidly run company with an unsustainable business model. It should be a fond memory . . . like the Packard.
And what did all this stimulation get us? Unemployment shot up to 10.2%, more than 25% greater than Obama’s confident prediction. Obama’s inner child blamed it all on George Bush. Little Barack said he hadn’t realized how bad an economy he had “inherited,” even though he had been likening it to the Great Depression at every opportunity.
Beware the Incredible Blob
All of the above is a cautionary prologue. Looming before us is the most ruinous blob of legislation in American history. It’s the fulfillment of Alexis de Tocqueville’s prediction that America would endure until its citizens got a hankering to vote themselves anything and everything.
During the presidential campaign, candidate Obama entertained the electorate with his many impersonations of a person of competence. He was a man with a plan, many plans in fact; he would be the architect of a brighter tomorrow for us all. He had a plan to close the detention facility at Guantanamo Bay; he had a plan for universal health care. He had repeatedly declared:
“My job is to be so persuasive that if there’s anybody left out there who is still not sure whether they will vote, or is still not clear who they will vote for, that a light will shine through that window, a beam of light will come down upon you, you will experience an epiphany . . . and you will suddenly realize that you must go to the polls and vote for Obama.”
Obama was articulating his conviction that he possessed the power to produce divine manifestations, not unlike the Star of Bethlehem, which announced the birth of Jesus. Hadn’t Chris Matthews, the prophet of MSNBC, declared of Obama, “This is New Testament,” and “I felt a thrill going up my leg.” Hadn’t the luminous Oprah Winfrey said of Obama, “We’re here to evolve to a higher plane . . . he is an evolved leader.” And hadn’t the divine Obama himself assured his acolytes that “This was the moment when the rise of the oceans began to slow and our planet began to heal.” Then he got elected.
After that we discovered that Obama couldn’t close the Guantanamo Bay facility because he hadn’t given any serious thought to the question of where he would send lots of dangerous religious fanatics whom every civilized people feared and didn’t want near them. Then we found out that Barack had no vision of what universal health care might be; he offered no proposals. Instead of exerting himself, Barack punted the project to his fellow Democrats in Congress and wiped his hands clean of all the messy details. After that, the squabbling Dems homebrewed five possible programs. Obama expressed no preference for any of the five plans; he remained as inscrutable as the Sphinx.
The final hybrid legislation is a beastly 1,990-page behemoth, its dense fur clotted with thousands of sticky-sweet taxpayer-financed treats for the Democrat congressmen who had stitched the monster together. It is a gargantuan middle-class entitlement that is designed to expand over time.
During his presidential campaign, Barack Obama had promised to change how business gets done in Washington; he had railed against lobbyists. “Barack Obama has pledged to change the way Washington works and to curb the influence of lobbyists,” declared John Podesta, co-chairman of Obama’s transition team. “We are announcing rules that are the strictest, the most far-reaching ethics rules of any transition team in history.”
The silver-tongued Obama himself had announced that the revolving door between government and lobbying would be slammed shut as long as he was president. Everyone within earshot was too polite to explain to the president that you can’t slam a revolving door.
Here’s the truth: the health care Frankenstein that Barack Obama will rhapsodize about, should it become the law of the land, was stitched together by no fewer than one thousand one hundred (1,100) well-paid lobbyists. The Monster is almost two thousand pages long, all of it written in densely worded and utterly opaque lawyer-lingo hieroglyphics.
The average voter isn’t supposed to understand it; the Democrats who voted for it haven’t read it. Here’s why: the ObamaCare legislation was written by the eleven-hundred well-paid lobbyists whose employers also finance the election campaigns of friendly congressmen. These lobbyists may never meet the congressmen; they are paid to get close to the second and third tier congressional assistants who do the actual grunt work of drafting legislation. Only after the lobbyists and the congressional assistants have finished drafting the legislation do they present a synopsis of the legislation to the congressmen. When congressmen expound authoritatively about what is in the ObamaCare legislation, they are riffing from what they read in their synopsis.
The actual text of the legislation is so oddly worded that every passage of it is open to interpretation. That’s why this 1,990-page blob of legislation has the lurking potential to wreck the American economy.
Beware the Utopians
The danger posed by academic utopians in positions of power is their inclination to become philosopher kings. Barack Obama is an academic utopian; so is Obama’s recently confirmed boss of the White House Office of Information and Regulatory Affairs, Professor Cass Sunstein. The two are friends from their faculty days at the University of Chicago. Sunstein served a stint at Harvard.
From his White House post, Professor Sunstein will oversee the enforcement of regulations throughout all the departments of government. This enforcement will be critical as the Obama administration endeavors to implement universal health care, control atmospheric gasses, overhaul banking and financial services and so much more.
Here’s the scary part: Professor Sunstein believes that the responsibility for interpreting federal law, including the pending 1,990-page ObamaCare legislation, should be taken away from federal judges and vested in the president and the president’s underlings. In other words, in Obama and Sunstein.
The ObamaCare legislation is densely worded; it is a jumble of ambiguities. With that in mind, get a load of this classic Sunstein quote:
“There is no reason to believe that in the face of statutory ambiguity, the meaning of federal law should be settled by the inclinations and predispositions of federal judges. The outcome should instead depend on the commitments and beliefs of the President and those under him.”
In other words, he believes that Obama should be the final arbiter of what the arcane language of the health care bill really means, which means it can mean almost anything!
If ObamaCare becomes the law of our land, then all of America will, like Alice, have stepped Through the Looking Glass, and there we will meet Obama’s Humpty Dumpty, Cass Sunstein, telling us that “When I use a word it means just what I choose it to mean – neither more nor less.” And this Humpty Dumpty will have executive powers.
There are thousands of things in this half-baked legislation that beg for clearer definition; Cass Sunstein, as Obama’s proxy, will dictate those definitions, no matter how draconian or expensive.
The Structure of a Tyranny
America’s “health care crisis” is only so much political theater scripted by Nancy Pelosi and Harry Reid, with stage management by David Axelrod and some tap-dance choreography by Barack Obama. It is a muddled production that makes no economic sense. It is reviled by both liberals and conservatives. Every public opinion poll demonstrates that a great majority of Americans will not welcome the disruptions that ObamaCare will impose; they are content with their existing health care programs.
The millions of citizens of foreign powers who linger within our borders as economic tourists, swelling our labor pool and driving down our wages, have no rightful place in any American taxpayer-funded healthcare program. That leaves only twelve million Americans in need of healthcare insurance assistance. Their needs could be met by a far more modest and far less disruptive program than the Reid/Pelosi healthcare juggernaut. So why all the urgency to make such a complicated, disruptive and incomprehensible blob of legislation the law of the land?
If the true purpose of the ObamaCare architects is to improve the lives of American citizens, then it would be worth everyone’s while to take all the time necessary to get the legislation right. There would be no talk of just passing “something” into law and then “fixing” it later. In any case, that’s political poison because when “someday” finally arrives “fixing it later” will have become “fix it now” and the politicians who passed the first screwed-up version of ObamaCare, the one that caused so much trouble, will be exposed as clueless jerks. So what is the upside for the leftists who are frantically pushing the passage of this 1,990-page cipher?
Just this: ObamaCare in any form, no matter how primitive, if passed into law will put in place a regulatory structure so broad, so all encompassing and so intrusive as to allow only a handful of “well-meaning” utopians to regulate and control the most intimate aspects of our lives. Academic theoreticians such as Professor Sunstein and Professor Obama would, at long last, have achieved the status of philosopher kings. America will have taken a step toward monarchy.
There is almost no aspect of our lives that will not become the object of their attention because there is almost no aspect of our lives that cannot be re-imagined as having some unhealthful consequence. In the name of protecting the taxpayers from your unhealthy choices, the ObamaCare regulators will be at liberty to bully you about what you eat, drink, smoke, drive, sell, purchase, grow, manufacture, view on television or listen to on the radio. Once the regulatory structure is in place, our individual freedoms of choice are greatly diminished.
So, ObamaCare marks the dawn of a new tyranny disguised in the language of “rights.” But healthcare services are not a right; they are simply goods in trade to be acquired like all other goods. Humans no more have a right to the hard-won skills of the physician than they do to the hard-won skills of the carpenter or the farmer or the brick mason. Elevating human desires to the plane of God-given endowments emboldens cynical politicians to confiscate our earnings and restrict our freedoms.
The road to greater freedom and greater access to the goods we desire is the road unencumbered by bureaucratic interference. The fact that patients who pay cash for medical services enjoy a thirty percent discount hints at the cost burden of medical bureaucracy. Replacing crony capitalism with genuine free-market competition would also make health insurance more affordable. That would mean allowing every American to purchase the healthcare policy of his choice from the vendor of his choice. At present every citizen is confined to the policies of the few vendors within his home state. Allowing us to purchase health insurance across state lines would give each of us access to any of 1,300 insurance vendors. The competition for customers would pull down the cost of insurance. That’s the reason the state-line barriers are in place – to keep the cost of insurance high. It’s a sweetheart deal between the insurance companies and the jerks who are pretending to be our representatives. Such sweetheart deals are called crony capitalism.
While we were reforming things we might consider putting the trial lawyers on a shorter leash. These junkyard dogs are a pet constituency of the Democrat Party which won’t even consider tort reform. So much for their false piety about bringing down healthcare costs.
What must be resisted is the imposition of a bureaucratic regulatory structure that would empower a tiny elite of self-anointed do-gooders to dictate the most intimate aspects of our lives.
So, imagine a republic in which the lawmakers refused to pass any legislation they had not read or did not understand. Imagine that they were so honorable that they refused to burden generations yet unborn with crushing debts. Then empower such honorable people with your vote.
Thomas Clough
Copyright 2010
January 9, 2010