Is Governor Christie Winning NJ's Public School War?

OK ... maybe "winning" is too strong a word. 2011 was to be the year of education reform, according to Governor Chris Christie. The results were underwhelming, to say the least.

But Christie has two more years of his first term to go, and an interesting development occurred on the last day of the 2011 NJ legislative session; passage by a heavily Democratic legislature of the Urban Hope Act. This narrowly tailored bill would authorize private companies to build and run public schools. The companies would finance and build the schools themselves, but would draw upon tax dollars to fund operations. They would have to operate under strict state- and municipal-imposed guidelines. Furthermore, these schools would be restricted to only three "failing" districts; Newark, Camden, and Trenton. In other words, the bill is minimal "privatization", but not a significant move toward a genuine free market.

The interesting thing about this bill is not the bill itself, but the fact that it drew the reluctant support of the New Jersey Education Association - the teachers union. The question is why?

The union has long been a steadfast opponent of anything with a scent of privatization. As such, the decision to support this bill came as a shock to government-run public schools’ staunchest defenders. Bob Braun of the NJ Star-Ledger, writing on the eve of what looked like certain passage, blasted the union endorsement:

In a move that displays either its weakness or cynicism — or both — the state’s largest teachers’ union has joined forces with archenemy Gov. Chris Christie and the powerful Camden County Democratic machine of George Norcross to endorse the "Urban Hope Act," which would allow private companies to build and manage public schools using taxpayer money.

The union’s flip-flop shatters the unity of a coalition that has consistently opposed the Christie administration’s efforts to bring privatization to public education. It left spokesmen for some of those groups literally speechless.

So again, the question is, why? The answer could be that the union views itself as losing a battle it can’t afford to lose; Christie’s ultimate goal is universal parental school choice. Braun continues:

Privately, union allies say it had no choice but to support the bill. They say the union hopes its collaboration with the Camden County machine might forestall legislative action on Christie proposals the NJEA fears more than it does private management of public schools — private school vouchers and tenure reform.

"The passage of the Urban Hope Act certainly will remove the logic behind the argument for vouchers,’’ Schnitzer said. She denied reaching a quid pro quo for the union’s support of the Norcross bill.

I hope Christie reads the tealeaves as pointing to a green light for more aggressive initiatives. The argument that the UHA “will remove the logic behind the argument for vouchers” is wishful thinking. Why should only parents with kids in “failing” school districts have choice? Once the principle that parents have the right to direct the course of their own children’s’ education is accepted, as is increasingly the case, the “logic” leads more and more towards freedom and individual rights in education – until and unless proponents get cold feet. This is not to say that I support Christie’s plan of implementation, which is, ultimately, fatally flawed. As I wrote in my 5/19/10 post “The Voucher Trojan Horse”:

Governor Christie intends no small, half-way measures. His approach is bold, aggressive, and courageous. He means to engage the entrenched establishment, including the coercive political power of the state teachers’ union, in full frontal ideological combat. He has done us a huge service by bringing education to the front burner in a big way. The government-run public school monopoly has been put on notice - your days are numbered in New Jersey. For this, he deserves enormous credit.

Unfortunately, his energetic enthusiasm is hitched to the wrong solution. While some measure of educational improvement is bound to occur early on, if his plan is fully implemented, the very advantages of private education that makes parental choice so appealing will eventually be washed away. They will get smothered by establishment conditions attached to their voucher checks, as the bureaucratic handcuffs are slipped on and their entrepreneurial freedom such as it is slips away.

A better way to implement universal choice is through a plan I spelled out in my Spring 2011 Objective Standard article, Toward a Free Market in Education: School Vouchers or Tax Credits? It is a plan that gives full private control over all education tax dollars to all that pay those taxes, and is thus a real, viable step toward an education free market.

That aside, the political message that can be drawn from the passage of the Urban Hope Act is that the education establishment is on the defensive as the momentum continues to shift toward the parental school choice movement. Governor Christie has played a big part in humbling the Democrats’ strongest constituency in a heavily “blue” state – no small achievement. This is no time for true education reformers to rest on their laurels.

Welfare Statists Circle the Wagons

The political strategy of the Left is becoming clearer as we move deeper into the 2012 election cycle. After being seemingly knocked back a bit on their heels by the Tea Party rebellion, the Left is beginning to regroup and circle the wagons around the welfare state. One battle line has formed along the moral front. Another is forming on the economic front. The Left’s latest target is the growing “wealth gap” between rich and poor, a rehash of an old bugaboo. Its main weapon is, as always, its extreme collectivist ideology. NJ Star-Ledger columnist Tom Moran seized upon a report allegedly showing a widening gap:

Shake the numbers any way you want and the answer is the same: Millionaires are getting richer fast, and their tax burden has been cut in half since World War II. The middle class is slowly sinking, despite working longer hours with greater productivity. And the army of the poor is flooded with new recruits, most of them with a long history of working in lousy, low-wage jobs.

The tax statement is utterly false, of course. Tax rates have come down, but the tax burden has shifted steadily up the income scale. The top 1% of earners now pay about 40% of all income taxes. The bottom 50% pays virtually no income tax. (Moran is vague here, however. The Left has taken to throwing payroll taxes into the mix, which skews the overall tax burden down the income scale, as measured by percentage of income. But even including payroll taxes, the top 1% pays nearly 30% of all federal taxes. Furthermore, Medicare and Social Security are tied to contributions, with the benefit calculations skewed toward the lower end of the income scale, as well. In other words, in relation to what they pay in taxes, lower income folks make out quite well. Payroll taxes are much less progressive, owing to the earnings cap. This is hardly unfair, though. One can hardly say that the economic bottom is being cheated)

How do they propose to correct that alleged problem? Not by liberating the economy from oppressive government, but by targeting the people that by their own admission are doing well. How will that foster a return to economic health? It won’t, but they don’t care. Why? Because they are ideologically driven, uncompromising, unabashed statists:

The irony is that robust government programs on a scale we need today are very popular. The GI Bill helped create the middle class by sending a generation of veterans to college. Social Security ended widespread poverty among the elderly. Medicare made sure they would not die without a doctor.

No serious person can argue that private charity would have matched this government effort.

That last sentence is all too true, and that points to the fundamental problem. The private sector could not and would not match it, because the vast majority of people receiving government “help” neither need it nor are worthy of private, voluntary charity. (The GI Bill is a special case, which can be seen as payment for services rendered in defense of America. But that is beside the main point.) All of those programs are still in place, and have in fact been expanded into uncharted, vastly unfunded territory. And many more have been added. The results are in. But again, the Left statists are not interested in reexamining the entire welfare state concept. Their goal is more of the same, as they press forward toward their long dreamed of egalitarian utopia. The inverted mentality that seeks to achieve a better economy by sacrificing people who are doing well is dramatized on page 535 of Atlas Shrugged:

“There are people who aren’t broke,” said Boyle slowly [at an economic crisis meeting of top-level government officials]. “You boys have no excuse for permitting all that need and misery to spread through the country – so long as there are people who aren’t broke.”

Moran continues:

America wasn’t always like this. After World War II, the country made big gains that were widely shared. The result was the most prosperous middle class the world has ever known. Play by the rules and you could make out fine, and expect that your kids would do even better.

What was the difference between the post WWII period and today? For one thing, the New Deal and thus the Great Depression ended, Truman lifted wage and price controls, and the gold-backed Bretton Woods international currency system kicked in. Tax rates were high – 91% at the top – but almost no one paid the highest rates, and they were widely seen as a drag on the economy. Remember that Democrat JFK ran on a 1960 presidential campaign slogan “get America moving again”, and followed that up with his signature tax accomplishment that lowered the top rate to 70% in his across-the-board rate reduction plan.

But the most important difference between then and now was the size and scope of government, which was much, much smaller then. Beginning in the mid 1960s, the welfare state exploded, the gold standard ended, and government spending soared at an accelerating rate. Today, the welfare state has reached new heights, federal spending alone now consumes 25% of GDP, and government regulations are descending upon the economy at the most feverish pace since at least the Great Depression.

No, as Tom Moran says, “America wasn’t always like this.” There was a time when we were freer, and consequently individuals had a much easier time rising economically. The struggles of the middle and lower income people that Moran describes are exactly what one would expect in a controlled economy like we have today. But, the Left doesn’t see the obvious correlation between today’s economic troubles and today’s burgeoning welfare state. They don’t want to see it, because the facts threaten their statist worldview. So, they set up a straw man like the wealth gap, and point to that as a symptom of what’s wrong with the economy. It is a symptom, but not in the way the Left believes. Moran and others on the Left have taken a huge bite of foot, this time. The supreme irony is, all of the government-imposed programs Moran credits for lifting the lower and middle classes are still in place, and have been joined by a myriad of new programs piled on top as the welfare state continues to expand to this day. If the size and scope of the welfare state is to be the measure of middle and lower class well-being, then the only conclusion one can draw is that it has been a dismal failure, having wrecked both the middle class and the economy.

[Note: I use the term “class” only in the economic sense of reflecting income brackets. There are no actual classes in America.]

The dream of every stripe of American socialist is to turn the middle class into a welfare class. This is being accomplished by forcing productive Americans to launder their hard-earned money through politicians’ hands via an ever-growing assortment of wealth redistribution programs, return that money in various strings-attached ways, and then call them vital “government benefits”. Social welfare programs did not create the middle class. They were created by politicians – regrettably, often with widespread popular support; but still, by politicians making an end run around the constitution they swore to uphold. Who pays for the welfare state? It is the productive achievements of private citizens that pay for and make the welfare state possible.

What created the middle class? – The individuals that make it up, led by the highly productive rich who break out to new economic heights, creating the mass market products we see all around us, jobs, raising the physical labor productivity that leads to rising real wages, and providing investment opportunities that enable millions to share in the profits of productive businesses. The middle class arose naturally as a direct corollary of the rise of free market capitalism in the 19th century, which arose naturally as a direct consequence of the American ideals of unalienable individual rights and limited rights-protecting government. Popular support or public opinion polls notwithstanding, the facts speak for themselves: The modern welfare state did not create the middle class, but was made possible by the exploitation of the middle class.

The statist mentality has to create the myth that free individuals acting on their own judgement can not take care of themselves, despite all of the evidence to the contrary, in order to justify the case for omnipotent government. Welfare statists love to claim credit for such things as educating veterans, “end[ing] widespread poverty among the elderly”, and “ma[king] sure they would not die without a doctor”, even though such programs are actually paid for by widespread forced taxation of private productive citizens. But the fact is, the very few people who can’t – as opposed to won’t – take care of themselves were merely the rationalization for forcing everyone into a welfare state trap.

What is it that the Left depends upon to make such a defense of its welfare state crown jewel appear to make sense? Moran writes:

Now that social contract has been broken. In the past 20 years, all of the economic gains we’ve made were captured by the top 10 percent of earners. The bottom 90 percent lost ground.

The “social contract” is a euphemism for the legalized armed robbery of forced wealth redistribution. The Left is driven by a bastardized egalitarian conception that views individuals not as equal before the law but as equal in the sense of an ant colony. All wealth is an anonymous collective achievement, this view holds. Intelligence, self-motivation, ability, self-discipline, innovativeness, and all of the virtuous individual character traits that productive work demands are irrelevant to the “distribution” of that wealth. The wealth or “economic pie” just appears, independent of individual activity, and falls into one big tribal pot. It is created by everyone but no one in particular. If someone has too high an income, it’s because they “captured” too much out of the pot. We are all ants, incapable of individually producing wealth by our own capabilities and voluntary private trade. The tribal wealth pot is a static quantity, where one man’s gain is another man’s loss. Left free, some will “capture” an unfair amount, leaving less for others. We need the queen ant, or the tribal chief, or the welfare state – variations of Plato’s “philosopher king” all - to step in to create a fairer distribution by cutting down the successful top. Then somehow, “the economic gains we’ve made” will keep coming.

Of course, all wealth is the product of individual minds, individual initiative, and individual work – the relative individual value of which is determined by free and voluntary association and trade, and, to the extent there is a free market, manifested in the amount of money each individual makes. This fact is buried under a mountain of collectivist jargon and the tribal view of wealth, which unfortunately is a view held beyond just the Left. The result is an ever-expanding government and the rise of force as the dominant means of social interaction. (See my post of 10/6/11).

Over the past century, power-lusting American politicians, by regularly exploiting the genuine needs of the few and the greed of those unwilling to plan their own lives, created today’s economic crisis. The alleged “income gap” is a straw man. The solution is not to go after the one economic group that still manages to flourish, which will only worsen the plight of everyone else. The solution is to begin to lift the suffocating blanket of statism from the economy – beginning with taxes and regulations.

The income gap isn’t growing because the top 10% is in some mystical way benefiting unfairly, it is growing because the government is stifling upward mobility through taxes, spending, monetary policy, central planning, and regulations, while destroying incentives through an expanding array of handouts that encourage the lazy and the shiftless and discourage the ambitious. The middle and lower economic groups are victims not of the top 10%, but of government. More than ever, to cite the Reagan wisdom that Moran quotes in his article, "Government is not a solution to our problems. It is the problem."

The soft communism of welfare state socialism is inexorably approaching its inevitable blind alley throughout the West. We could be witnessing the last gasp of the deadly 20th century scourge of collectivism. One can observe Moran’s reliance on collectivist premises to fortify his Leftist call to action. It is those collectivist premises that must be challenged, and the only alternative is individualism. There are signs that that challenge is beginning to emerge. But, by and large, the Right has so far failed to mount an ideological counter-attack, thus conceding the philosophical battlefield to statism. We must explicitly uphold individualism, otherwise the largely reflexive national recoil against “big government” epitomized by the Tea Party will crash and burn on the rocks of philosophical incoherence.

"More Prosperity" or "Shared Sacrifice"?

The NJ Star Ledger took NJ Governor Chris Christie to task concerning remarks he made in his recent Reagan Library speech. The clash points to the two fundamentally different worldviews that animate today's Left-Right debate about the political/economic future of America.

The Left's view was summed up by Elizabeth Warren, who recently advanced the view that no one succeeds on his own, and thus success translates into a societal claim on "a hunk" of that success:

There is nobody in this country who got rich on his own. Nobody.

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Don Watkins of ARI more accurately called Warren's "social contract" a social shakedown, and Ari Armstrong shreds her argument in an op-ed in Pajamas Media.

In the Star-Ledger editorial, the editors echo Warren's point, and one correspondent actually quoted Warren in the comments section. What triggered the editorial were these comments by Christie:

“Telling those who are scared and struggling that the only way their lives can get better is to diminish the success of others. Trying to cynically convince those who are suffering that the American economic pie is no longer a growing one that can provide more prosperity for all who work hard. Insisting that we must tax and take and demonize those who have already achieved the American dream.

“That may turn out to be a good re-election strategy for President Obama, but it is a demoralizing message for America.”

"Clue phone for the governor," advise the editors, "America is not demoralized by the notion of increasing taxes on top earners. Polls show that big majorities support the idea. Some even show that most Republicans do."

That's right: Let's raise taxes, but only on the other guy. That's not demoralizing. Hypocracy is OK, if the majority says so.

Why should we raise taxes only on the rich? The editors, in part, had this to say:

The reason is that we need the money. We are entering a period of national sacrifice and most feel it should be shared.

It’s remarkable that Christie can look across the American landscape today and conclude that our priority should be to protect the interests of those at the top of the pyramid, the one group that is doing okay.

It is especially galling to hear this from Christie, who raised taxes on the working poor by cutting their tax credits. Are they better able to take the blow?

Remember, too, that businesses didn’t earn their money without help from taxpayers. They use public roads and rails, they rely on police protection, many of their employees were educated in public schools, and they enjoy the social peace that comes from a shared sense of fair play, a social contract.

The "tax credits" referred to is the Earned Income Tax Credit, which generally means a "refund" for those who owe no income tax. Under our convoluted tax structure, I'm not necessarily opposed to the EITC, since low earners do pay other taxes. Absent major tax reform, I don't necessarily agree with cutting it at this time. But let's not call it what it's not - a sacrifice.

I've left the following comments:

Posted on September 29, 2011 at 10:19AM

The Left is apparently circling the wagons around the welfare state, as the points made in this piece are suddenly cropping up around the media. But, they are a feeble attempt that runs straight up against logic, facts, and morality.

There is no “shared sacrifice”. The reduction of a handout (the earned income “tax credit”) is not a sacrifice, since one can not lose what one doesn’t rightfully own to begin with. Taking one’s earnings by force of a tax increase is.

Businesses provide far more benefits to “the taxpayers” through the products they provide and the jobs they provide than they benefit from them. Furthermore, the editors conveniently forget that businesses are huge taxpayers themselves, and they pay more than their share to fund public roads and rails, police protection, and public schools. Furthermore, businesses pay additional moneys for private security and employee education and training.

The IRS provides readily available data that shows that the top 1% already pays 40% of all income taxes, and the top 10% (which starts at about $120,000 annually) pays 70%, while the bottom 50% pays virtually nothing. Even including payroll taxes, the figure for the top 10% comes in at about 50%. And speaking of payroll taxes: Yes, it is unfair that the lower earners must pay for Warren Buffet’s healthcare and retirement. So, how about ending that travesty by privatizing Social Security and Medicare so that every workers earnings goes into his own personal account, rather than laundered through Washington and into the pockets of retirees who are capable of taking care of themselves?

The true mindset of the Left is revealed here. Why must “we” tax the rich more? “The reason is that we need the money”. Why go after the rich? Because they’re “the one group that is doing okay”. In other words, need is a license to steal, and – as Willie Sutton said – “that’s where the money is”. The Left’s mindset is that of a street thug, and they don’t even try to hide it any more. Christie is absolutely right, and the editors just gave us the ringing proof. The Left doesn’t want more people “doing okay”. They want shared poverty. It’s a moral travesty.

The regulatory welfare state soared over the last 11 years, and today is bigger than ever – at the very time when the struggles of the vast middle class multiply. The Federal government is consuming 25% of GDP as spending and deficits reach unheard-of heights, even when compared to the Bush profligacy. By now the village idiot can see what the increasingly desperate ideologues of the welfare state refuse to see or admit. The welfare state is destructive to prosperity, morality, the economy, and the middle class – and today, throughout the West, is coming to its inevitable dead end.

Howard Roark and the GOP

From GOP leaders must free themselves from the Tea Party’s grip by E.J. Dionne, regarding this summer's budget battles:

“The Tea Party’s followers have endangered the nation’s credit rating and the GOP by pushing both House Speaker John Boehner and Majority Leader Eric Cantor away from their own best instincts.”

Now, why would a liberal want the Republicans to abandon the Tea Party? Could it be because “The Tea Party’s followers [are] pushing both House Speaker John Boehner and Majority Leader Eric Cantor away from their own best instincts?” Those “instincts” have usually worked to the Democrats’ advantage, so it’s no wonder the GOP gets such friendly advice from the likes of Dionne. See my Extremists vs. the Moderates: Why the Left Keeps Winning, and the Right has been Powerless to Stop It, which references another Dionne piece.

Be that as it may, it is this paragraph that got me writing:

“The Tea Party lives in an intellectual bubble where the answers to every problem lie in books by F.A. Hayek, Glenn Beck or Ayn Rand. Rand’s anti-government writings, regarded by her followers as modern-day scripture — Rand, an atheist, would have bridled at that comparison — are particularly instructive.

“When the hero of Rand’s breakthrough novel, 'The Fountainhead,' doesn’t get what he wants, he blows up a building. Rand’s followers see that as gallant. So perhaps it shouldn’t surprise us that blowing up our government doesn’t seem to be a big deal to some of the new radical individualists in our House of Representatives.”

And, why would a liberal be against “radical individualists”? Perhaps because such folks don’t easily succumb to the predatory welfare state.

Here is a commentary I left, interspersed with additional remarks, which are italicized:

Posted on 7/21/2011 10:05:53 AM EDT

Three things stand out in this column.

Ayn Rand was (and is) anti-statist, not anti-government. Her well-reasoned case FOR a government powerful enough to protect the rights of its citizens counterbalanced through being constitutionally forbidden to turn predatory is regularly sidestepped by supporters of statism, the doctrine that holds that the lives, freedom, and property of the people are at the disposal of the government. The question is not whether or not we need a government, but whether the government’s power is limited and if so, by what principles? If Rand is anti-government, then the likes of EJ Dionne are anti-freedom.

Brushing Rand off as “anti-government” enables statists to make an end run around the necessity of defending their big government agenda against her actual philosophical validation of the limited, rights-protecting state. By lumping her in with anarchistic libertarians, Dionne exhibits the kind of intellectual cowardice typical of statist ideologues. They uphold, in essence, a false dichotomy: The choice we face is either authoritarianism or anarchy. By sidestepping Rand, they sidestep the Founding Fathers.

It is fitting that Dionne would trivialize The Fountainhead’s hero Howard Roark as a man who “blows up a building [because he] doesn’t get what he wants”. Statists disdain individual rights, especially property rights. Roark took that illegal but principled action along with the risk of a decade in jail because his property – the design of the housing complex – was stolen from him and he was left with no other legal recourse. The analogy to the Tea Party Republicans “blowing up our government” is very loose, as the GOP offers little in the way of concrete suggestions for dismantling the rights-violating welfare state that is really at the heart of our fiscal crisis. But this much is true: In a vague sort of way, the Tea Party Republicans are nobly going to bat for those of us who oppose our freedom and property being systematically drained away, leaving us no other recourse but to “blow up our government” (figuratively speaking, of course).

Of course, it is highly unlikely that the Republicans by and large have anywhere near the philosophical intransigence implied by their so far uncompromising stand against tax increases. But the Left must sense what I sense; the stirrings of a real intellectual strength emerging from the Right.

Finally, Dionne’s slap at free market economic theory (our “intellectual bubble”) is disingenuous, to put it mildly. The Left/statists have always clung to their radical collectivist ideology, the driving intellectual force behind their agenda; building a socialist America one brick at a time. American welfare statists fear a principled pro-individual rights counterweight to THEIR OWN intellectual bubble. “[T]he answers to every problem [we face today do in fact] lie in books” by free market intellectuals and philosophers who predicted long ago where our government’s interventionist policies would lead. Left/statists want us out of our “intellectual bubble” because they have no defense against the theoretical arguments that can teach us how we got here and point us toward the way out - free market capitalism, individual rights, and limited rights-protecting government. Unfortunately, the Tea Party doesn’t have anything close to that kind of philosophical clarity.

On the face of it, Dionne appears to be taking an anti-intellectual position by denying any application of broad abstractions or principles to concrete cultural and political issues. But in fact, Dionne and the left always measure issues against the related ideological yardsticks of altruism in ethics, collectivism in metaphysics, and statism in politics. The incessant admonition to abandon ideology for pragmatic practicality is a ruse to intellectually disarm the Right, an admonition that too many free market conservatives are all to quick to embrace.

In regard to Dionne's "radical individualists" remark, this angle is not new. See my E.J. Dionne Answers the Call With Assault on "Extreme Individualism". Radical. Extreme. Do you see a pattern? The strategy is to abort any possible emergence of a principled free market opposition with smear charges of extremism and radical. The GOP should take some advice from Ayn Rand, which could be found in the essay "Extremism," or the art of smearing, which is as relevant today as ever before. She wrote:

The welfare-statists need a new cover. What we are witnessing now is a desperate, last-ditch attempt to put over two “anti-concepts”: the “extremists” and the “moderates.”

The best proof of an intellectual movement’s collapse is the day when it has nothing to offer as an ultimate ideal but a plea for “moderation.” Such is the final proof of collectivism’s bankruptcy. The vision, the courage, the dedication, the moral fire are now on the barely awakening side of the crusaders for capitalism.

The Left dare not say explicitly what motivates it, because what motivates it is the same ideology that brought us all of the 20th century tyranny and bloodshed. They have rarely had to, because the compromising Republicans have been granting the Democrats steady political gains bit by compromising bit. The rise of the Tea Party threatens to upset the game, and embolden Republicans to call the Left's "moderation" bluff. So, expect a lot of charges of "extremist" and "radical" to be hurled at the GOP in 2012. Will the Republicans find the ideological spine to turn the tables?

Finally, here is a response from another corespondent, who is obviously ignorant on both Rand and political philosophy:

Posted by grantmh

Fascists used the same language as Rand (and Zemack) to describe why their idea of a government designed to rule according to what a minority believes is optimal, is something other than fascism.

And my reply:

Posted on 7/21/2011 10:26:57 AM EDT

If Rand’s philosophy is fascist, then so were the Founding Fathers. In fact, the country should not be run by any minority. The minority – i.e., the individual - should be free to run his own life, so long as he/she respects and refrains from violating the rights of others to do the same. A proper government protects the individual’s rights, rather than run his life, and employs no policies that economically favor one group over another. It is capitalism – the separation of economics and state, and which is based upon the recognition of individual rights – that Rand upheld. This is the opposite of fascist doctrine, which means socialism through the back door.

It is primarily today’s Left that is in tune with fascism – in fact, rooted in it. Jonah Goldberg’s book “Liberal Fascism” makes the case unequivocally.

The Resurrection of Ronald Reagan

The Democrats have re-anointed former Democrat Ronald Reagan into their party! They are lecturing Republicans to follow their hero’s example. But, what is the real lesson the GOP should draw from the Left’s sudden infatuation with Reagan?

Ronald Reagan is the icon of the modern conservative movement. He is also the only American politician that I have ever been passionate about. To be sure, he was a very mixed bag from an Objectivist perspective. But he stood for certain definite principles, even though in practice he was far from consistent. On the positive side, he went to bat for the productive members of society, he extolled the individual and the private sector against the state, and his agenda of income tax rate cuts, modest regulatory restraint, and sound Federal Reserve monetary policy ignited a nearly two decade long economic expansion that blasted Keynesian economics into the dust bin of history, despite its vampire-like reincarnation of the past few years. From the early 1980s to the late 1990s, unemployment, interest rates, and price inflation all trended steadily lower simultaneously. This was thought to be impossible according to Keynesian dogma (along with the 1970s “stagflation” – the combination of high price inflation and slow economic growth).

Perhaps the biggest blockbuster of his presidency was his policy towards the Soviet Union. He firmly championed, and pursued policies to reflect, the fervent belief that Soviet Communism was a house of cards that would collapse of its own weight if only the West would stop propping it up economically. The results were dramatic.

He had plenty of flaws and inconsistencies, however. He supported the New Deal, and as president signed a bill raising Social Security taxes in order to save it for 75 years (remember that?). He helped ignite the Religious Right by courting them as part of the “Reagan Coalition”, swinging to their authoritarian social agenda including eroding the separation of church and state. He failed to fight hard enough to reign in government spending.

The Left has seized upon this last to transform Reagan into a welfare state icon. In The new party of Reagan, Dana Milbank writes:

After he switched to the Republican Party in 1962, Ronald Reagan famously quipped: “I didn’t leave the Democratic Party. The party left me.”

Now, the Republican Party is doing the same thing to him — and Democrats are happy to take Reagan back.

Milbank then reels off a litany of compromises Reagan made, both as Governor of California and President of the United States. They range from tax hikes to debt limit increases to a Medicare expansion. He is “revered by many Democrats”, a “procession” of whom “claimed Reagan’s support for their position…during the debt-limit debate”. Audio recordings of Reagan warning of the dangers of failing to raise the debt limit is the new rallying cry of the Democrats. There is even a quote from Mike Huckabee about how “he made deals with Democrats [and] compromised on things in order to move the ball down the field.”

But what are the Democrats really saying? Perhaps not exactly what they think they are saying. There is a lesson hidden behind the Democrats’ sudden resurrection of Reagan from liberal hell.

The NJ Star-Ledger weighs in:

[The GOP] is no longer the party of Ronald Reagan, who raised the debt limit 18 times and included tax hikes in 11 of them. He saw that deficits were skyrocketing on his watch, and he understood that compromising on his conservative principles was not the same as betraying them. He was a realist.

In answer, I left the following comment:

Zemack, posted July 22, 2011 at 6:59PM

In their enthusiasm to trash the Tea Party, the editors made the “radical Republicans’ ” case. Every budget Reagan sent to congress in the 1980s was declared “dead on arrival” by the liberal Democrats, who then so larded them up that even the surging federal tax revenues of the ‘80s, which doubled under Reagan’s watch, couldn’t keep up. Yet, Reagan “compromised his conservative principles” in the name of “realism”.

Imagine if, instead, Reagan had taken the “radical” stand of drawing the line somewhere along that parade of debt ceiling and tax increases? Imagine if he had stuck to his conservative principles and demanded that congress bring its spending into line with the generous revenue stream emanating from the Reagan economic boom? Imagine if his party then picked up where he could have left off, rather than go the way of neo-conservatism and George W. Bush.

The obvious lesson to be drawn here is that the explosive growth of the welfare state spending juggernaut – now at an astounding and destructive 25% of GDP - is driven by the Left’s best secret weapon, those principle-compromising Republicans. It’s a pattern that has been going on for decades. The Republicans are guilty, all right. We’ve been brought to the economic precipice by welfare statists traveling on a long road paved by conservative compromises.

Democrats are trying to save their winning strategy, by posthumously re-anointing Reagan back into their party. Suddenly, Reagan is the liberals’ new hero! But any retreat by the GOP on the very modest principle of no tax hikes would be disastrous. In fact, we need true reform proposals, starting with the complete privatization of SS and Medicare through personal accounts and a new low-rate flat income tax. The GOP – or at least part of it - is merely trying to hold the line, and only because of the much-needed intransigence of the Tea Party. You call that radical? I call it a starting point, because that’s not enough. The West’s and America’s economic crisis is a failure of the soft socialism of the welfare state. The Republicans need to go on offense with a pro-free market, pro-individual rights economic agenda. I have hope, but I’m not holding my breath.

But at least the editors clarified the issue for us, and demonstrated the value of today’s Tea Party.

Where did Reagan’s repeated compromises with the Left get the country. For one thing, they killed his own “Reagan Revolution”. Since Reagan, the welfare state has surged, especially over the past dozen years. No wonder the Dems suddenly want to hold Reagan up to the country as a model for today’s Republicans to emulate.

Of course, Reagan had his strengths, as I pointed out at the outset of this article – strengths that Democrats ignore. I believe that his strengths outweighed his weaknesses, even though his weaknesses – his compromises – helped sow the seeds for the problems we have today. The implications behind Reagan’s economic policies of income tax rate cuts, regulatory restraint, and support for a sound Fed monetary policy should be a model for any president who has widespread prosperity as a goal. But, as Steve Forbes recently observed, “Sadly, …President [Obama] does not … have much interest in slowing down Washington's spending machine, recognizing that big spending means more power for the central government.”

Amen! The Democrats are not interested in learning from Reagan’s strengths, either, because they are not interested in emulating Reagan's pro-growth economic policies and actually compromising on their principles. Their phony exaltation of Reagan contains a lesson for Republicans that they ignore at their, and the country’s, peril: compromising on your principles of free markets and limited government paves the way for expanded government and shrinking freedom.

The Balanced Budget Amendment is not the Answer

What is the purpose of a constitution?

Government holds a legal monopoly on the use of physical force: It is the only institution in any society that is sanctioned to use force against people. Accordingly, some means is necessary to tell those in charge of the apparatus of government under what circumstances they may and may not exercise its powers. That is the purpose of a constitution. Its sole purpose is to define the limits of government power, for the purpose of protecting from government power the individual rights of its citizens. Government officials – politicians, bureaucrats, employees, all of them – may act only within the confines of the enumerated powers granted by the constitution. In other words, government acts by permission only.

A constitution is not designed to define the limits of personal private behavior (such as with amendments forbidding flag-burning or limiting marriage to one man and one woman). That is the purpose of laws created by government officials operating within the limits imposed upon them by the constitution. Nor is the purpose of the constitution to specify particular government policy. A proper constitution doesn’t spell out how to deal with the Middle East, what level of taxation is appropriate, or what criminal penalties are appropriate for Bernie Madoff. It will simply lay out the abstract parameters within which such policies and laws may be enacted and carried out.

The Balanced Budget Amendment being pushed by the Republicans does not measure up to these constitutional criteria. As Robert J. Samuelson writes over at the Washington Post: “The Constitution is the repository of the nation’s basic political principles, …not a handbook for the day-to-day operations of government.” A balanced budget mandate may be a good idea, but that belongs under the purview of elected legislators. Should they decide to enact one, it - like all laws – must then pass muster with the basic political principles enshrined in the constitution. But any attempt to muddy up the constitution with such concrete minutia would render it unworkable. As Samuelson writes:

The fatal flaw of the BBA is that it would take the Constitution in precisely this direction. It not only says the budget should be balanced, but one Republican version says it should be balanced at 18 percent of the economy (gross domestic product). That’s not a principle; it’s an instruction. Why not 17 percent or 22 percent of GDP? What happens in a national emergency?

All this threatens to turn many budget disputes into constitutional crises, as one side or the other takes to court to prove the other side violated the nation's Magna Carta. Do we really want to force unelected judges to make what are fundamentally political decisions? Didn’t we learn anything from Bush v. Gore?

Beyond that, a Balanced Budget Amendment may hinder but will not stop the welfare state express, as many conservatives hope. The driving force behind the rise of socialist statism in America is moral and philosophical. It is only on moral/philosophical grounds that the welfare state can be successfully challenged. As long as statism’s fundamental altruist/collectivist intellectual underpinnings are in place in the culture, the politicians will always figure out a way to get around the constitutional restrictions posed by the amendment. Samuelson continues:

The BBA is another example of congressional evasion. “It’s showcasing. It plays to the public,” says political scientist Allen Schick of the University of Maryland. What it does not do is balance the budget, now or ever. Only unpopular decisions to cut spending, including Social Security and Medicare, and raise taxes can do that. The BBA distracts from this and, if ever adopted, would undermine the Constitution.

I, of course, don’t favor raising taxes. But, Samuelson does raise an important point. Those “unpopular decisions” belong in the legislature. Furthermore, given the philosophical corruption of the collectivist mindset, it is not at all certain that a BBA will translate into much in the way of spending cuts. Such a constitutional mandate could (and will) empower judges to impose tax hikes to enforce that mandate. (This in fact happened in New Jersey, where in the 1970s the State Supreme Court essentially rammed a state income tax down the throats of the legislature and the state’s residents to enforce a constitutional education mandate. See my post New Jersey's Constitutional Roadblock to Reform.) A BBA could well become a tool for further entrenching the welfare state.

There are good reasons to oppose the Republicans’ initiative. (There may also be good reasons to support such a constitutional amendment. If there are, I have not seen them.) Not all opponents base their reasoning on respect for our basic constitutional principles, however. No discussion of our constitution is complete outside of the context of the philosophical principles that form our original constitution’s foundation. Stepping outside of that context is the means by which statists have been able to dominate over the past century. A good example of this tactic is provided by Doug Kendall and Dahlia Lithwick in a piece entitled The Balanced Budget Amendment would make the Framers weep.

The principles that must always form the framework for any constitutional question are laid out in the Declaration of Independence, this nation’s philosophical blueprint. The principles of unalienable individual rights and a government whose sole purpose is to protect those rights is the frame of reference upon which all aspects of the constitution must be considered. Rights are sanctions to freedom of action in a social context, not an automatic claim to unearned benefits. The freedom of action that rights convey also defines the limits of that freedom. Since rights are unalienable and held equally by all people at all times, each individual is free to act only so long as he respects and refrains from violating the same rights of others. Equally important, the principle of individual rights defines the limits of government’s power – a broad limitation indeed. In regard to the relationship of the government to the people, the Founders fundamentally intended this: The domestic laws and their agents – the police and the law courts - protect the people from criminal predators, while the constitution protects the people from governmental predators. Despite some imperfections and contradictions it contains, the original constitution was mostly true to its fundamental principles.

Kendall and Lithwick try to make the case that the Founding Fathers would have opposed the BBA. They are almost certainly right. So, it’s interesting that they sneak in Chief Justice John Marshall's 1919 quote that our constitution is a document that may be “adapted to the various crises of human affairs”. The “Living Constitution” doctrine attempts to airbrush our founding principles out of existence, a la “1984”, and has done far more to undermine our constitution than anything the Republicans have proposed. That helped paved the way for the ongoing stealth transformation of America from a constitutionally limited republic to a democracy. But the Founders understood majority rule as an institution that must be severely limited, because democracy unconstrained by the principle of individual rights is another form of totalitarian tyranny. Redefining America as a democracy is the Progressives’ real intend. Kendall and Lithwick take the right position for the wrong reasons. They oppose the BBA not to preserve the constitution or in deference and respect to the Founders or America’s founding principles, but because they fear it “would remove huge swaths of lawmaking power from majority rule and arbitrarily limit the size of government to a level not seen since the 1960s. Under the guise of promoting fiscal responsibility, we would be creating a government that could not govern.”

The 1960s are notable for a huge wave of rights violating “social welfare” legislation. Those programs clearly violate our founding principles. But the distorted view of our constitution that took hold mostly in the 20th century paved the way for democracy-driven welfare statism. Kendall and Lithwick fear the BBA not because it contradicts the roper purpose of a constitution, but because they fear that it will hamper the Progressives’ ability to “govern”. And to “govern”, in the Progressives concept, means to dictate.

I agree that the Founders probably would not have approved of the BBA. But they would have been horrified at the Progressives’ view of the constitution as a document devoid of the very principles that formed the basis for their achievement in creating this country.

Behind The Debt Ceiling Debate

This NJ Star-Ledger editorial appeared in May 2011. It discusses the political impasse regarding the raising the debt ceiling to accommodate the insane Federal spending binge. Since that impasse is still with us, I thought I’d publish a bit of activism I engaged in back then.

Basically, the editors chastise the Republicans for refusing to “compromise” by accepting tax increases in exchange for spending cuts. The S/L writes:

House Speaker John Boehner … issued an ultimatum. His party will agree to raise the debt limit only if Democrats yield to the Republican solution on the debt — $2 trillion in spending cuts and no tax increases.

A $2 trillion spending cut over the next decade is reasonable if it is done in a way that protects the most vulnerable, as the president’s bipartisan commission attempted to do.

But the Republican budget plan fails that test. While protecting tax cuts for the wealthy, it imposes two-thirds of its spending cuts on programs that serve families of limited means. Medicaid, food stamps and college scholarships would face deep cuts, to name a few.

The bigger problem with Boehner’s ultimatum is that he pretends we can solve the debt problem without raising taxes.

The federal government today is taking in revenue equal to about 15 percent of the GDP. It hasn’t been that low since the 1950s, before programs like Medicaid and Medicare existed. To keep revenue that low as Baby Boomers retire is simply not realistic.

This is classic. Raise taxes now, and we promise to cut spending, but not on the really important programs (which is just about anything the statist Left wants). The Republicans, in my mind, have already compromised too much by failing to demand tax cuts along with those spending cuts. But my comments concerned other aspects of this. As usual, I used my screen name Zemack. First, I answered this:


Eatontownbob May 12, 2011 at 8:02AM

Cut the $4 billion in subsidies (our money) for the top 4 oil companys which combined made $18 BILLION in first Quarter profits. With oil trading for aprox $100 a barrel, I don't think they need tax breaks to be encouraged to explore/drill.

Zemack May 12, 2011 at 12:08PM

A tax break is not a subsidy. It's a taxpayer (individual or corporate) keeping more of what he earned. There is no government money - i.e., other taxpayers' money - involved.

Aside from that fact, eatontownbob is on to something. Our income taxes - both corporate and personal - are corrupt, special interest-driven monstrosities that empower politicians to manipulate the private economy and dole out political favors. I would agree with eatontownbob if he endorsed the general idea to eliminate all tax breaks, including the massive renewable energy subsidies. That industry is a gigantic corporate welfare scheme that should be freed to compete and sink or swim on it own economic merits.

Then, how about lowering both taxes to a single flat rate with no deductions except for personal exemptions for each individual? It would be economically stimulative (promote production, trade, profits, and jobs), more justly progressive, much fairer politically, and thus more moral than what we have now.

Here is another comment and the exchange that followed:

Zemack May 12, 2011 at 1:14PM

The Star-Ledger is being incredibly disingenuous here. It states that “The federal government today is taking in revenue equal to about 15 percent of the GDP. It hasn’t been that low since the 1950s”.

But revenue receipts are not the true measure of the governments tax take: Spending is. And today, federal spending as a percentage of GDP is at about 25%. That means 25% of America’s wealth is being consumed by the federal budget alone, the highest since WW II.

The Editors fail to mention inflation – the artificial expansion of the money supply via the government printing press to finance the deficit. Inflation is a tax that confiscates your purchasing power, while leaving you with increasingly devalued dollars manifested in rising prices.

The real problem is not the deficits, but rather the government’s consumption of the nation’s wealth. The only way to address that problem is through spending cuts, which means the privatization and gradual elimination of the immoral wealth redistribution programs that constitute the bulk of federal spending.

The editors call for compromise as the ultimate solution to the latest crisis, and berate the Tea Party for refusing. But more and more people are on to the sinister game that has been going on for more than a century in America. The current state of affairs has been built on such compromises as the Coburn/Durbin deal the editors trumpet. The spending cuts are non-existent, because the programs that feed the growth of spending are not being phased out and eliminated. The tax hikes are real, however, and will only serve to feed the cancerous growth of socialism in America.

Conservatives and the GOP have historically caved time and time again, always falling victim to the god of compromise. But any compromise between Left and Right always benefits the Left. And yes, compromise sometimes is a moral failing. And yes, it is “time to settle long-standing grievances”: to attack the fundamental causes of the crisis. If not now, then when? Putting that day of reckoning off time and again is irresponsible, irrational, and immature. Real adults think long-term and don’t continually punt the problem down the road, as the editors would have us do once again.

BigMarbles May 12, 2011 at 2:56PM

zemock- Your numbers are bad.

The Congressional Budget Office last Thursday released its latest projection of the 2011 deficit - an astonishing $1.5 trillion. The spending that goes along with the deficit has been the focus of news and commentary around the country. The other culprit hiding behind the deficit is of course Federal Government Revenue levels. Revenues are projected to be some where around 15% of GDP an all time low over the last 60 years. The average revenue level as a percent of GDP for the last 30 years is 18%.

Yes, some of the revenue short falls are due to the recession, but much of it is related to the extension of the Bush tax cuts.

Why is it you eightballs who constantly attack the SL are ALWAYS proven wrong? And the SL is ALWAYS RIGHT???

Some people do get my point, though.

Deceiverbo May 13, 2011 at 8:36PM

Lost Marbles, it appears you have a serious comprehension problem. The poster wasn't denying the 15% figure, he was pointing out the flip side of the coin (spending) which people like you and the liars at the SL try to hide.

I tried one more time with BigMarbles.


Zemack May 12, 2011 at 7:50PM

If government is spending 25% of the nation’s income (GDP), and only 15% is supplied by direct taxation, where does the balance come from? Borrowing - which means pulling investment capital and savings out of the economy. But to the extent that the state can't sell its bonds in the open market, as is mainly the case now, it grabs your wealth indirectly through inflation.

One way or another, the government is taxing the economy to the exact tune that it is spending. The combination of direct taxation, borrowing, and inflation (ex. - Bernanke’s “quantitative easing”) adds up to a commutative tax take of 25%. There is no way around these numbers. Reality is the final arbiter. I stand by my numbers. The wealth consumed by government spending doesn’t come out of thin air, or grow on trees, or miraculously appear from government printing presses.

Governments nationalize their monetary systems under central banks so they can grab a much bigger share of their nation’s wealth than people would tolerate through direct, easily perceivable taxation. That so many people never catch on to the monumental crime of inflation is a testament to the ability of governments to hide the truth by distorting the teaching of basic economics in their government-run schools.

BigMarbles May 13, 2011 at 12:14PM

zemac- Geeeez...............Who should i believe..........who's numbers are correct??....................
The Congressional Budget Office...............................or ZEMAC??.............................................
CBO or Zemock?????...................this is a tough one..................................................................
I gotta tell ya, zemock,..........................I GOTTA DO WITH THE CBO!!!!!
Sorry!

Sigh! I really didn’t think this guy that can’t spell would understand. But I made my point.