The experts charged with determining when recessions begin and end tell us that the latest of these unpleasant events ended a while ago. Technically, they are no doubt right. But that does not mean that the economic crisis we have been facing is over. I suspect that we have thus far only seen its first act. The drama to come may be far, far worse. To see why, one must recognize that economic downturns come in two different forms.

The economists who study recessions tend to think about them in turns of the business cycle – and rightly so, for in most cases it is the business cycle that produces the downturn. In the course of such a cycle, boom builds upon boom and bust upon bust. It is a bit like a game of crack the whip. Downturns occasioned by the business cycle are caused by overproduction. When businesses have more stock than they can sell, they stop producing and lay off workers. The workers laid off and no longer getting paychecks cut back on their consumption, and this in turn reduces the demand for goods and services and causes other businesses, which find their products and services no longer as much in demand, to curtail their efforts and lay off another set of workers. And so the recession grows, building on itself, until some businesses find that they have underproduced or underprovided for the services in demand. Then, the same process takes place in reverse with stepped-up production and a stepped-up provision of services requiring stepped-up employment, which occasions more consumption requiring another round of stepped-up production and provision of services and a further increase in employment and so forth – until production and provision once more overshoot demand. In the absence of perfect knowledge, human beings living in commercial societies are fated to suffer from an oscillation of this sort – between boom and bust.

When Barack Obama became President, his economic advisors appear to have been on automatic pilot and to have taken it for granted that this was the sort of recession that they were up against. And so they opted for a remedy that – if applied in the proper fashion, at the proper time, and  in the proper amount – might serve to hasten an economy’s recovery from a recession occasioned by the business cycle. That is, they sought to prime the pump – to increase consumption by artificial means, to borrow money from the future, put it in the pockets of certain citizens, and hope that they would spend it right away and thereby put others back to work.

Such was, at least, their pretense. In practice, of course, the so-called “stimulus bill” was a targeted measure – a massive pay-off designed to reward the public-sector employees and unionized workers involved in infrastructure construction who make up core constituencies within the Democratic Party and to do so at the expense of those whose taxes the Democrats intended in the future to raise. Obama’s advisors did not worry much about the manner in which the “stimulus” was to be applied, its timing, and amount, however. For they took it for granted that the expenditures would do no immediate damage to anyone and that the economy would bounce back quickly in any case, as it always does when the downturn is caused solely (or at least primarily) by the business cycle.

(more…)

A bit less than a year ago, I posted piece entitled Is Barack Obama a One-Trick Pony? I raised this question with an eye to three thumbsuckers that had recently appeared – one on Politico by veteran commentator Elizabeth Drew; another, entitled Amateur Hour at the White House, written by Leslie Gelb for The Daily Beast; and a third, drawing on the remarks of these two well-known Democratic scribes, published in The Wall Street Journal by Peggy Noonan.

Noonan had two things to say – first, that no one among her liberal acquaintances really loved Barack Obama the way so many Democrats had loved Bill Clinton; and, second, that the Democrats were wrong to think that passing his healthcare reform would help him. In her view, the passage of “such a poor piece of legislation” would, in fact, do him almost irreparable harm. Moreover, she added, “There is the growing perception of incompetence, of the inability to run the machine of government. This, with Americans, is worse than Obama’s rebranding as a leader who governs from the left. Americans demand baseline competence. If he comes to be seen as Jimmy Carter was, that the job was bigger than the man, that will be the end.”

To this, I added, “The Democrats are getting what they asked for.”

In 2004, they tried a trick. If we nominate a man who won the Purple Heart in Vietnam, they thought, we will win. Never mind that John Kerry disgraced himself in the aftermath of his service in Vietnam, making unjust charges against his brothers-in-arms and resolutely thereafter refusing to apologize to those whom he had slandered. Never mind that he had no executive experience. Never mind that, as a US Senator, he was – to say the least – undistinguished. They wanted to win; and they gave not a thought to what sort of President he might be.

In 2008, the Democrats did the same thing. They had on their hands an inexperienced, recently minted US Senator from Illinois who was – as Joe Biden put it in a candid remark that typifies his propensity for speaking his mind without first thinking about the consequences – “the first mainstream African-American who is articulate and bright and clean and a nice-looking guy.” Never mind, they thought, Obama’s long-standing connections with William Ayers, the unrepentant mastermind of a domestic terrorist bombing campaign in the 1970s. Never mind Obama’s close association with the racist demagogue Jeremiah Wright. Never mind his lack of executive experience, his unfamiliarity with the private sector, and his ignorance of the ways of Washington. With the help of the pliable press, he could be sold – and the Americans would congratulate themselves on their lack of racial prejudice if they voted for him.

“Now,” I then wrote, “comes the reckoning. That is one problem. The other is that Obama’s one trick cannot often be played. As we have seen over the last few months, as he has tried to play this trick over and over and over again, the more we see of him, the less we are impressed. Franklin Delano Roosevelt never held his fireside chats more than three times a year. How many times has Obama demanded airtime from the networks in the last ten months? I shudder to think.” And to this, I added,

(more…)

Scott Rasmussen now predicts that the Republicans will pick up fifty-five seats in the House. Larry Sabato at the University of Virginia still has the pick-up at forty-seven but says that, if forced to tweak the numbers right now, he would increase his estimate of Republican gains by single digits – which is to say, he agrees with Rasmussen.

There are pollsters out there who are playing games, as a glance at the polls for the Senate race in West Virginia should make clear – and, of course, it is easy to play games. If one wants to encourage the Left and discourage potential Republican voters and donors, all that one has to do is to base one’s poll on the presumption that the percentage of self-described Democrats within the voting public in 2010 will be equal to the percentage in 2008.

Sabato and his associates and Rasmussen are not, however, among the gamesters. Both are aiming at accuracy. Sabato and company have a reputation to uphold (and, in the academic world, that is all-important), and Rasmussen is a nonpartisan pollster who attracts clients by way of demonstrated precision. Neither outfit can afford to make a fool of itself.

I nonetheless think that both are greatly underestimating the size of the Republican surge. Both have reason to be cautious. For understandable reasons, neither is going to climb out on a limb; and both are basing their estimates on recent electoral history. If something is in the offing that exceeds the range of political oscillation in recent decades (including, notably, 1994), if we in American live in something other than normal times, they will miss the size of the surge.

It is good to remember that not a single Sovietologist predicted the collapse and dismemberment of the Soviet regime. History has a way of lulling us into sleep. What has been in recent times we tend to think will be in the foreseeable future. Then, every once in a while, suddenly, out of nowhere, a political earthquake arrives – and only in the aftermath do the experts notice that there were ample warning signs.

(more…)

On Thursday, in Detroit, a federal district judge named George Caram Steeh ruled Obamacare constitutional. On Friday, Mike Pence, a Republican Congressman from Indiana, expressed his confidence that the Supreme Court will declare key sections of the bill unconstitutional.

I believe that Pence is right – and for three reasons: one principled, one personal, and one practical and political. The first is easy to grasp.

At stake, Pence asserts, is “whether or not the Constitution of the United States permits the government to order the American people to purchase goods or services, whether they want them or need them or not.” With this description of what is at issue, Judge Steeh, who was appointed to the court by William Jefferson Clinton, is in wholehearted agreement. As he puts it in his ruling,

The decision whether to purchase insurance or to attempt to pay for health care out of pocket, is plainly economic. These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance.

It is his view that – since our “decisions” to buy or not buy insurance have an impact on the market – the federal government can make these decisions for us.

(more…)

A year ago, in a blogpost entitled The Great Awakening, I argued that conservatives “should be grateful to Barack Obama, Nancy Pelosi, Harry Reid, and Rahm Emanuel.” After all, I wrote, they had unmasked “the Democratic Party as a conspiracy on the part of a would-be aristocracy of do-gooders hostile to the very idea of self-government in the United States,” and they had done so by making “the tyrannical propensities inherent within the progressive impulse visible to anyone who cares to take notice.” This is a theme to which I have returned repeatedly in a series of posts – some of them linked here, others archived here and here, and the most recent found here – arguing that, with the proper leadership, the Republican Party could seize this occasion and effect a political realignment.

The heart of the matter is simple. What Franklin Delano Roosevelt falsely claimed in 1936 is now demonstrably true: “A small group” of individuals – lead by our current President, his Chief of Staff, the Speaker of the House of Representatives, and the Majority Leader in the United States Senate – really is intent on concentrating “into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives.” If they wish to effect a realignment, all that the Republicans have to do is to complete the task of unmasking begun by Obama, Pelosi, Reid, and Emanuel and make it clear that they really do intend to repeal Obamacare, to balance the federal budget without enacting permanent tax increases, to roll back the scope and size of the administrative state, and to restore within these United States limited, constitutional government.

They face two great obstacles. First, as I argued last year in my book Soft Despotism, Democracy’s Drift, the administrative state has been growing for almost a century now, and it has become entrenched. Moreover, its growth has been fueled not only by the ambitions of a self-styled progressive elite proclaiming its expertise and its desire to manage our lives for us. It has also been supported by the political psychology to which – the baron de Montesquieu, Jean-Jacques Rousseau, and Alexis de Tocqueville contended – commercial, liberal, democratic societies, such as our own, generally give rise. Put simply, men in liberal democracies tend to fall prey to what these thinkers call inquiétude, and under the influence of this uneasiness – this vague, unfocused fear lacking a defined object – they are apt, especially in times of economic distress, to be willing to trade independence for a promise of security. The Americans whom Tocqueville met in the early 1830s had the resources, institutional and moral, with which to resist this propensity. But we can no longer boast that, in the United States, local self-government is vigorous, private associations do much of what was allocated to government in Europe, the Christian religion provides us with a moral anchor, and marital fidelity and family solidarity afford us a haven from the upheavals that typify life in a dynamic, commercial society.

Second, no one really trusts the Republicans in Congress.

(more…)

When they teach American government and the history of the early American republic, political scientists and historians have a puzzle to explain. There is, within the American constitution, no mention of political parties. And yet it is impossible to make sense of American politics in and after the early republic without reference to parties. Moreover, the parties that did emerge in the United States bear only a faint resemblance to the parties that existed in England and on the European continent prior to the American civil war and even less to the parties that exist on the other side of the Atlantic today.

The two puzzles are related. It is true that the Framers of the Constitution had no liking and made no provision for organized political parties, and it is also true that all of the early Presidents made at least a half-hearted attempt to transcend partisanship. It was not until Andrew Jackson that we got our first unequivocally partisan President. It is also true that the partisan divide that emerged in the 1790s was viewed by both sides as something temporary and regrettable. Thomas Jefferson and James Madison formed a party, which in time they called the Republican Party, to counter what they considered a conspiracy on the part of George Washington’s Secretary of the Treasury Alexander Hamilton, and in response he formed a party to counter what he considered a conspiracy on their part. Absent the conspiracy, or in the eventuality of its defeat and disappearance, the American republic’s first partisans expected the parties to wither away.

In this presumption, as Martin van Buren came to realize, they were wrong. Given the separation of powers, it was virtually impossible to govern in the absence of partisan alliances. But the very structure of American government – in which Congressmen are elected by particular constituencies located in particular places and look to that locality for re-election, and in which Senators represent particular states and are no less sensitive to local concerns – subverts partisanship and promotes a species of moderation as well. Only the President sees the Union from the perspective of the whole. When Tip O’Neill remarked that all politics is local, he spoke in a fashion perfectly appropriate to his situation as Speaker of the House of Representatives.

We must, then, view political parties from a double perspective.

(more…)

When, in The Federalist, Alexander Hamilton writes that “energy in the executive is a leading character in the definition of good government,” he refrains from asserting that energy in the executive is the leading character in the definition of good government. He is right to deploy the indefinite, rather than the definite, article. Had he chosen the latter, Thomas Jefferson’s accusations would have been on the mark: our first Secretary of the Treasury really would have been a monarchist of sorts.

What Hamilton had in mind, however, when he insisted on the necessity that the new nation be endowed with an energetic executive is the fact that a government in which the laws are not vigorously executed and in which emergencies are not confronted and handled with decision and dispatch is hardly a government at all. He knew that wisdom, prudence, and moderation are also required for a government to be good, and he recognized as well that the ends and sphere proper to government are limited. He was no less committed to the principles of the Declaration of Independence than was the man who had drafted it.

Hamilton was also aware that that Julius Caesar and Oliver Cromwell had been energetic executives, and to their number we can now add such luminaries as Napoleon Bonaparte, Benito Mussolini, Adolf Hitler, Josef Stalin, Mao Tse-Tung, Fidel Castro, and Pol Pot. The executive temperament necessary for good government is not, alas, sufficient to guarantee its achievement.

If, as I argued in mid-June, it is now abundantly clear that Barack Obama lacks the temperament requisite in an executive, if, as I contended, he is inclined to shirk responsibility, shift the blame, dither, and punt, his administration is beyond question a government insufficient for our needs. This does not mean, however, that – merely by demonstrating energy, vigor, and dispatch in shouldering the responsibilities of executive office – Bobby Jindal of Lousiana, Chris Christie of New Jersey, Mitch Daniels of Indiana, Tim Pawlenty of Minnesota, Mitt Romney of Massachusetts, Jeb Bush of Florida, Haley Barbour of Mississippi, or any of the other potential presidential aspirants in the Republican Party who have been effective governors has demonstrated that he possesses all of the qualities called for in the grave crisis we now face.

All of the individuals I have named are impressive – as are, for example, Sarah Palin and Mike Huckabee. The moment has not yet arrived, however, for a thorough assessment of the qualities and outlook of each. There will be plenty of time for sorting through the candidates after the midterm elections.

(more…)

In his recent cover story for The Weekly Standard, Matthew Continetti praises CNBC’s Rick Santelli effusively for erupting against Barack Obama’s redistributionist policies on 19 February 2009 in such a fashion as to inspire the Tea Party Movement. Then, he blasts Fox News commentator Glenn Beck for seizing upon the current crisis as an opportunity for urging on the part of his fellow Americans a serious reconsideration of the country’s first principles.

“What distinguishes Beck from Santelli is,” Continetti writes, “the breadth and depth of his critique.”

In his broadcasts, books, and stage performances, Beck provides his audiences with a dark vision of American life. In this bleak tableaux, rich, highly educated, radical elites are using the instruments of power to control the common man and indoctrinate his children. The elites, Beck says, seized on the 2008 financial crisis to shape America according to their socialist, fascist, globalist vision. The only remaining obstacle to the elitist agenda is the pro-freedom movement that wants to return to America’s founding principles. The elitists fight the patriots by calling them racists and extremists.

(more…)

This is the question that Rush Limbaugh posed to his listeners on Monday: Is Paul Rahe right? And it is, alas, an all-too-open question. Rush was responding to a piece, entitled “A New Birth of Freedom,” posted on BigGovernment.com early on Saturday, in which I endorsed in part the analysis of our current situation articulated by Mark Steyn here and, at greater length, here, but insisted that he underestimates American civic spirit. Where Mark sees catastrophe, I see opportunity.

Mark is, I believe, undoubtedly right in supposing that, if we acquiesce in the massive expansion of the administrative entitlement state shoved through a reluctant Congress on 21 March by Barack Obama, Nancy Pelosi, and Harry Reid, the game is up. The progressives have for the most part dominated American politics for something like a century — ever since the election of Woodrow Wilson in 1912 in a presidential race in which the only defender of the American constitution came in third. And step by step they have centralized power and influence in Washington and subverted the separation of powers. In consequence, today, our real rulers are the bureaucrats. Within the administrative state, they make rules that have the force of law, they enforce those rules, they adjudicate all disputes arising therefore, and they are unaccountable. It is no accident that civil servants have tenure in their jobs and boast of higher salaries and far better benefits than their counterparts in the private sector.

Moreover, the progressives have succeeded in making a substantial proportion of the American people wards of the state — dependent in one fashion or another on federal largesse — and no body of men is more beholden to the federal government than the CEOs of our largest corporations. It is telling that Wall Street voted with its pocketbook for Barack Obama in 2008. It is telling that the pharmaceutical companies and health insurance companies lined up behind the Obama administration’s healthcare proposals. And it is telling that big business is treading cautiously now. Those who run these companies know where their bread is buttered.

Mark Steyn’s two replies to my piece — here and, more emphatically, here — are cogent.

(more…)

Back in November, when Peter Robinson interviewed me for Uncommon Knowledge, he waited until the last segment to throw down the gauntlet, asking me bluntly why I was so much more sanguine regarding the future than was the estimable Mark Steyn. My reply, which caught him off guard, was what he jocularly called “a low blow.” For I said something like this: “Mark Steyn is a Canadian. What would you expect? I’d be a pessimist myself if I were a Canadian.”

I would not want to deny that my ad hominem argument struck a bit below the belt, but I nonetheless thought it apt, and I have not in any way changed my mind. Mark is a man of keen understanding and quick wit, and he bears comparison with George Will and Charles Krauthammer, the very best of our pundits. Moreover; as a Canadian who has lived in Great Britain, he has firsthand experience of the profound damage done by what I, echoing Alexis de Tocqueville, termed soft despotism in my recent book. When he writes, in a recent post, “ it’s hard to overestimate the magnitude of what the Democrats have accomplished,” he is surely right. Indeed, I agree with almost every word in the following:

Whatever is in the bill is an intermediate stage: . . . the governmentalization of health care will accelerate, private insurers will no longer be free to be “insurers”  in any meaningful sense of that term (i.e., evaluators of risk), and once that’s clear we’ll be on the fast track to Obama’s desired destination of single payer as a fait accomplis.

If Barack Obama does nothing else in his term in office, this will make him one of the most consequential presidents in history. It’s a huge transformative event in Americans’ view of themselves and of the role of government. You can say, oh, well, the polls show most people opposed to it, but, if that mattered, the Dems wouldn’t be doing what they’re doing. Their bet is that it can’t be undone, and that over time, as I’ve been saying for years now, governmentalized health care not only changes the relationship of the citizen to the state but the very character of the people. As I wrote in NR recently, there’s plenty of evidence to support that from Britain, Canada, and elsewhere.

More prosaically, it’s also unaffordable. That’s why one of the first things that middle-rank powers abandon once they go down this road is a global military capability. If you take the view that the U.S. is an imperialist aggressor, congratulations: You can cease worrying. But, if you think that America has been the ultimate guarantor of the post-war global order, it’s less cheery. Five years from now, just as in Canada and Europe two generations ago, we’ll be getting used to announcements of defense cuts to prop up the unsustainable costs of big government at home. And, as the superpower retrenches, America’s enemies will be quick to scent opportunity.

Longer wait times, fewer doctors, more bureaucracy, massive IRS expansion, explosive debt, the end of the Pax Americana, and global Armageddon.

(more…)

President Obama’s State of the Union obviously was a first in more than one way.  Obama point blank, called out (to use the modern vernacular) our Supreme Court Justices on national TV.  He did so because he politically disagreed with their legal decision.  In doing so, Obama demonstrated his supreme arrogance – and let America know just how far he is willing to go to get his way.

As we know, our Federal Judicial system is one of three separate but equal branches.  Historically, the judiciary has been the least political of the three branches.  That status reaches well beyond our own system.  Prior to judges and courts, civilizations tended to rely on counsels of elders to pass judgment on the actions of their village or tribe.  Those elders held a special place, as dispensers of wisdom, in their societies.

The roles of judges today evolved from those wise elders.  Importantly, our system and theirs was based on the notion that the decisions made were made dispassionately and not subject to mob rule or pressure.  By publicly ridiculing the Supreme Court, and subjecting them to a standing ovation from the complicit Democrats that surrounded them, Obama demonstrated to everyone how little regard he has for our system.  That disregard is in keeping with his Saul Alinsky radicalism and the methods he employed.

Obama, to be sure, is not the first President with a constitutional changing agenda to take on the Supreme Court – nor the most crass about it – at least so far.   That dishonor belongs to Franklin Delano Roosevelt.

(more…)

Democrats are feeling stimulated these days.  In a recent study, Jerry Brito and Veronique de Rugy of the Mercatus Center tracked stimulus spending in all 435 congressional districts plus the District of Columbia.  They found that the amount of stimulus money received by a district was influenced by its partisan representation, rather than economic need. Districts with a Democratic congressman received almost twice as many dollars as those with Republican representation, whereas there was no relationship between a district’s unemployment level and the amount of stimulus money it received.

Barack Obama has broken many campaign promises since taking office, but when it comes to the comparisons to Franklin Delano Roosevelt saddled on him by his adorning followers in the media, he has worked hard to live up to the hype.  We already knew that both dishonestly campaigned against the excessive spending of their predecessors before breaking the bank on their own watch.  Now we also know that President Obama, like FDR, has abused a crisis atmosphere to direct economic relief funds for partisan purposes.

Patronage was instrumental in protecting the incumbent Democratic Party in the first mid-term election under FDR, despite an unemployment rate that surpassed 20 percent.  His administration targeted swing districts for infusions of federal dollars – spending money not to increase employment, but to maximize electoral gains.  He succeeded.  Democrats expanded their majorities by nine seats in both chambers.

(more…)

Back in early May, James Carville gleefully published a book entitled 40 More Years: How the Democrats Will Rule the Next Generation.

In part, an extended rant against George W. Bush and his administration, it also purported to show that “the Republicans are going to keep getting spanked again and again for forty more years because we’re right and they’re wrong, and Americans know it.”

Of course, Carville added, “the Republicans have been down before, and the Democrats have won Congress before, and we’ve still managed to lose.” But, he continued, “this time we strung our policies together into a coherent, appealing narrative. And we did it with the help of the historically diverse, historically Democratic young people who will be the foundation for a lasting Democratic majority.”

This may have seemed a plausible claim late in 2008 or early in 2009 — when the ragin’ Cajun sent off his book to Simon & Schuster. By the time of publication, however, the Republicans in Congress had shown that they still had some fight in them, and the Tea-Party Movement had already made its appearance.

(more…)