Ordered Liberty

'The Great Achievements of Liberalism' a/k/a 'The Ponzi Scheme' – A Response to Ron Radosh

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Life may be too short to unwind everything Ron Radosh distorts in his PJ Media blog post on Monday. In it, he purported to recap both Charles Krauthammer’s recent appearance on The Daily Show with Jon Stewart and my NRO column from last weekend, which examined that appearance in the context of mainstream Republican enthusiasm for the federal welfare state.

I need to say that again: mainstream Republican enthusiasm for the welfare state.

The emphasis is warranted because Ron provides readers with the following synopsis of my position: “McCarthy says no mainstream Republican accepts” the “centralized welfare state” that began with “the Progressive Era of Woodrow Wilson followed by FDR’s New Deal” (emphasis added). Of course, that is exactly the opposite of what I said. Ron evidently missed not only the column’s main point – viz., that the mainstream of the Republican Party fully accepts the centralized welfare state – but also its headline, which announces in bold black letters, “The Republican Embrace of the Welfare State,” followed by the sub-heading, “The establishment GOP has accepted progressivism’s central premise.”

There is a salient distinction between Republicans and conservatives. That was the upshot of my argument, which follows up on the theme from the previous weekend’s column: Mainstream Republicans are sympathetic to President Obama’s case for a massive, centralized welfare state; mainstream conservatives favor the Tea Party’s emphasis on individual liberty and limited government – which, contrary to Ron’s apparent misconception, is hostile not to humane, transparent welfare programs but to the insatiable, Washington-centered imposture that is devouring the prosperity of present and future generations of Americans. That is the rift on the Right.

Ron is similarly sloppy throughout. In this post, I address the hash he makes of my Krauthammer-Stewart critique. This weekend, I will have more to say about Ron’s fanciful depiction of Social Security as a bona fide retirement insurance program – which parrots a Roosevelt administration fairy tale that even its authors abandoned three-quarters of a century ago when forced to justify the program in Supreme Court litigation. I’ll also discuss Ron’s misstatement of my position on welfare.

Like Ron, I value “serious and respectful” debate, and have generally managed to keep things civil through 30 years of mixing it up with some fairly strident characters: aggressive lawyers, government officials, journalists, talk-show hosts, academics, Islamic-supremacists, etc. I might nevertheless be more receptive to Ron’s Dale Carnegie lecture if he were a better practitioner of what he preaches. I have not commented on this but, since he brings up the subject of civility, I am still taken aback by the tone of his review of Diana West’s American Betrayal … and I cringed upon learning that, in the midst of the nasty cross-fire that it ignited, he sent Diana a giddy email taunt when another commentator, Conrad Black, published a similarly intemperate review. To be clear, I am not talking about substantive merit here – I happen to disagree with Ron and Conrad about Diana’s book, but that is neither here nor there (I’ll have more to say about it soon). I am talking about peer-to-peer civility. Even in the context of Ron’s post about my column, the “serious and respectful” twaddle is just a set-up for branding my argument as “a child’s temper tantrum.” “Serious and respectful” starts to seem a lot like “agrees with Ron.”

That said, we can certainly stipulate that Charles Krauthammer is a charming, consummate gentleman, and that his discourse with the reciprocally gracious Jon Stewart was a model of civility. I fail to see the relevance, however, since my quarrel had nothing to do with the tenor of the Krauthammer-Stewart dialogue. Nor with the forum in which it took place. Ron claims I “chastise[d]” Dr. K for appearing on The Daily Show. I did no such thing. While I’ve not been on that program, I’ve appeared on more left-leaning media broadcasts and in more debates at left-leaning universities than I can count. It is a good thing for conservatives, especially compelling conservatives like Charles Krauthammer, to engage progressives in settings where they meet good faith interlocutors (as Stewart, whom I don’t know, seems to be), or where there is an open-minded (even if left-leaning) audience that might be moved by conservative arguments.

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What I took issue with was Dr. K’s assent to some of the Left’s central premises. Pace Ron, I do not believe that is a model strategy for debating liberals. That was my point about the choice of forum – not that a conservative should refuse to appear on a left-leaning program, but that if a conservative harbors some affinity for progressive principles, it is more likely to surface in a progressive forum than in interaction with his usual conservative audience.

To be sure, Krauthammer challenged a number of Stewart’s “liberal shibboleths”; but, contrary to Ron’s insistence, not all of them. Krauthammer concurred in Stewart’s claim that being a conservative has meant being anti-government. Now, as I made clear in my column, Krauthammer did indeed reject Stewart’s assertion that contemporary conservatives are anti-government. He maintained, however, that Stewart’s statement would have been a fair indictment against conservatives until the New Deal. That is simply wrong. It would be a vast overstatement even if, as I assume from the context, Krauthammer meant conservatives could fairly be accused of being anti-welfare before the New Deal.

Dr. K went on to proclaim, moreover, that conservatives came to accept “the great achievements of liberalism – the achievements of the New Deal” – which he specified as Social Security, Medicare and Medicaid. These are not “great achievements”; they are pillars of an ambitious dependency edifice erected by statists and controlled by Washington’s career politicians, just as its architects intended. These programs have bankrupted the country. Their combined accrued obligations, plus the accumulating (and inevitably inflating) interest on the astronomical debt that finances them (because they cannot finance themselves), is already several multiples of our roughly $16 trillion gross domestic product, outstripping the nation’s total existing wealth (around $70 trillion).

(Ron also says Charles and I disagree about liberal programs to “end child labor.” I never mentioned the subject; if Charles mentioned it, I don’t recall that; and, other than Ron’s fertile imagination, I don’t know where this supposed dispute comes from.)

Now, as anyone who has followed my work over the years knows, I hold Charles Krauthammer in high esteem. I do not agree with Ron that he is “America’s most well known and highly regarded spokesman for conservatism.” Though Charles defies easy labeling, I see him more in the neoconservative tradition. As Charles points out in his fine new book, Things That Matter, the term “neoconservative” is sometimes used “invidiously”; however, I am speaking of the great tradition of Irving Kristol and Norman Podhoretz. And, in fact, Charles refers to those legendary thinkers, as well as to Ronald Reagan (who, he reminds us, started out as a “New Deal Democrat”), in describing his own journey from Left to Right.

It is not my intention to quibble with Ron on this point. Charles is a hugely influential voice on the Right, and deservedly so. I’ve been privileged to consult with him at times over the years on national-security issues. When he speaks, I almost always learn something, as we all do. What I most admire is his rigor: he tries hard to get the facts right and willingly alters his conclusions when his understanding of facts changes – which is bound to happen now and then to anyone who, like Charles, is daily asked to opine publicly on major news, often before critical details have come to light.

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Charles Ponzi

As Charles succinctly puts it in Things That Matter, “I’m open to empirical evidence.” That is, he is not just worth listening to, but willing to listen. That is why I have spoken up over the years on some of the rare occasions when I’ve disagreed with him – e.g., on the Bush Islamic democracy project (a big part of the enterprise that Charles refers to as “Democratic Globalism”) and, specifically, on the State Department-authored constitution for post-Saddam Iraq (establishing Islam as the state religion and installing sharia as fundamental law – Charles approved, I was a naysayer).

As noted above, Charles told Jon Stewart that Social Security was one of “the great achievements of liberalism,” and – along with its Great Society descendants, Medicare and Medicaid – was among the “achievements of the New Deal.” Ron takes umbrage at my suggestion that Charles, while ingratiating himself to Stewart’s progressive audience, might conceivably have been more generous in describing welfare state programs than he would have been in speaking or writing for his customary, largely conservative audience – i.e., that the latent admiration he has for these progressive nostrums more naturally emerged in a progressive setting.

Am I wrong? It wouldn’t be the first time … but let’s have another peek at Things That Matter. In the main, it is a collection of memorable Krauthammer columns and essays from the last three decades. It turns out there is one on Social Security.

Know what it’s called? If you guessed “Of Course It’s a Ponzi Scheme,” you win the prize.

Writing for his broadly conservative audience in 2011, Dr. K said Social Security is essentially indistinguishable from Charles Ponzi’s classic scam. Now, the Ponzi scheme may be a “great achievement” … but only if we are talking about the annals of fraud.

Dr. K’s column explains that the Social Security program deludes Americans into believing they are making “investments” that will generate dividends. In reality, it is a “pay-as-you-go” scheme in which government spends the money as it comes in, with early entrants getting paid by the “investments” of later entrants. As Charles puts it, “Pay-as-you-go is the definition of a Ponzi scheme.” Ultimately in the latter, he writes, “Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the remaining investors lose everything.”

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Charles opines that there is one difference between Social Security and a Ponzi scheme: participation the former is mandatory. But that distinction is of little moment because law is impotent to command the impossible. Social Security, too, must collapse; just as in Ponzi’s fraud, there are not enough later entrants to make good on the outlandish promises that have been made.

I freely concede that Charles goes on to argue for Social Security’s preservation. He would “fix” it, in essence, by expanding on the fraud. Charles posits that Social Security’s humane upsides (which I believe he overrates) outweigh its fugazi design. Consequently, rather than scrap it in favor of a more transparent welfare program, he reckons it would not be unreasonable to maintain the “insurance” charade by, among other things, extending the retirement age and adding a “means-test for richer recipients.” The idea is that, having trod this far down the Ponzi path, we might as well take the next logical step of breaking it to “investors” that the harder they work and the better they do, the tinier the “dividends” that await them in a more distant future.

My column offered contrary views on how we ought to deal with so-called entitlements. For present purposes, though, the point is that Charles’s portrayal of Social Security in “Of Course It’s a Ponzi Scheme” is not very different from what Ron refers to as my “more than foolish” assertion that Social Security is a “fraud designed to create dependency on the government.”

And I’m fairly confident that, if I were a progressive New Deal devotee sitting in Jon Stewart’s audience, listening intently to a prominent conservative dilate on Social Security, I’d find “Ponzi Scheme” a teensy bit less ingratiating than “great achievement of liberalism.”

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Cross-posted at PJ Lifestyle