Belmont Club

The Election of 2012

Lincoln argued in the Gettysburg Address that the central issue of the Civil War was whether a society which regarded men as political equals could survive. “Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation, so conceived and so dedicated, can long endure.”

Janet Daley, writing in the Telegraph believes that the American presidential election of 2012 is about something equally momentous. It is about whether people are still equals or are now permanently divided into two camps: the taxpayers and the recipients. As Daley rather dramatically frames it, about whether an unbounded welfare state can still coexist with a market economy or whether ‘that nation, or any nation’ dedicated to the primacy of entitlements can long endure without ending in fascism. She writes:

Whatever the outcome of the American presidential election, one thing is certain: the fighting of it will be the most significant political event of the decade …

What is being challenged is nothing less than the most basic premise of the politics of the centre ground: that you can have free market economics and a democratic socialist welfare system at the same time. The magic formula in which the wealth produced by the market economy is redistributed by the state – from those who produce it to those whom the government believes deserve it – has gone bust. The crash of 2008 exposed a devastating truth that went much deeper than the discovery of a generation of delinquent bankers, or a transitory property bubble. It has become apparent to anyone with a grip on economic reality that free markets simply cannot produce enough wealth to support the sort of universal entitlement programmes which the populations of democratic countries have been led to expect. The fantasy may be sustained for a while by the relentless production of phoney money to fund benefits and job-creation projects, until the economy is turned into a meaningless internal recycling mechanism in the style of the old Soviet Union.

Or else democratically elected governments can be replaced by puppet austerity regimes which are free to ignore the protests of the populace when they are deprived of their promised entitlements. You can, in other words, decide to debauch the currency which underwrites the market economy, or you can dispense with democracy.

Daley writes from a European perspective in which whole nations, Greece and Italy being notable examples, are actually being told to give up sovereign control to Brussels appointed bureaucrats in exchange for an uninterrupted supply of government cheese. For Daley the question is no longer academic; it is actual.

But she adds that nowhere except in the United States is the matter central to political debate. In Europe it has been politely decided not to speak of it. In her view the question of what kind of government one should have is at the core of the current American presidential contest.  Not surprisingly James DeLong has been saying the same thing but from an American standpoint. DeLong argues that the  Grand Bargain on which America was founded has been progressively eroded to the point where it may now be permanently destabilized by a “breakout” in government size limits.

Across many decades, my mind’s eye sees Professor Samuel Beer pacing the lecture hall stage at Harvard, talking about the accession of Henry II to the throne of England in 1154 and the end of 20 years of anarchy …

Throughout the year, the class time travels to societies in crisis over legitimacy: From the England of Henry II to its long revolution of 1640 to 1688 to the American Revolution in 1776, the French and Russian Revolutions of 1789 and 1917, and Weimar Germany as Hitler comes to power in 1933.

In each instance, a government has forfeited its claim to obedience and loyalty—at least in the view of a significant portion of its subjects—and has broken down. The questions are: Why? And what comes next?…

It has taken some time, but the result has been predictable. Once the overall principle was broken, the system turned into a chaotic war in which interests fight for pieces of power and control. … The political culture has evolved to the point where anyone who declines to push for special favors is regarded as a fool, and systemic corruption is accepted as the normal and inevitable way of doing political business …

All the talk of the government needing power to solve national problems or to fix the healthcare system, the housing market, the financial world, or anything else is only blather to obscure the determination of the special interests to gain and defend their turf. Yet still they come, fighting their way to the trough, arguing that more than 60 percent of GDP is not enough and that the “welfare state” requires still more if it is to achieve cosmic justice.

Gallup and Rasmussen are telling us that the Founders were right to posit that a breakdown of the limits of government would cause a breakdown of consent. In response to the question of whether the current government has the consent of the governed, only 22 percent of likely voters say “yes.” The partisan divide is marked; Democrats split evenly, but only 8 percent of Republicans say yes. These are scary numbers, particularly when one considers that many of the “no consent” Democrats are probably on the left, denying the legitimacy of a government that does not do more for them. Also scary is that the political establishments of both parties seem oblivious.

So Beer’s time-traveling students would have little trouble deciding that the United States has a legitimacy crisis. They could produce competent term papers on how it arose. The big question, of course, is what happens next. That is indeterminable. Unstable political arrangements often continue for a long time, until some crisis pushes them over the edge. France faced severe fiscal problems in 1789, and Russia’s tsars might still be with us if they had avoided the strains of World War I. So the United States might be pushed into full-blown chaos only by serious fiscal dysfunction or some national security disaster. Unfortunately, neither of these possibilities appears remote.

In other words DeLong believes America is now reaching the point where it can have either its original Grand Bargain or government  without bounds to provide unlimited ‘free’ cheese. It cannot have both. It’s an extraordinary assertion by a serious scholar. Condensed to its essence, DeLong’s argument is very similar to Daley’s. He too argues that the price of an unlimited commitment redistribution must in the end be authoritarianism.

But it’s not just the academics who are making the argument. To those who were listening the idea has been advanced in mainstream politics on network television. Marco Rubio came very close to making the same assertion at the Republican National Convention. Rubio argued that President Obama was restoring the very ideas that “people come to America to get away from”.

The new slogan for the president’s campaign is “Forward.”

A government that spends $1 trillion more than it takes in.

An $800 billion stimulus that created more debt than jobs.

A government intervention into health care paid for with higher taxes and cuts to Medicare.

Scores of new rules and regulations.

These ideas don’t move us “Forward,” they take us “Backwards.”

These are tired and old big government ideas. Ideas that people come to America to get away from …

No matter how you feel about President Obama, this election is about your future, not his. And it’s not simply a choice between a Democrat and a Republican.

It’s a choice about what kind of country we want America to be.

As we prepare to make this choice, we should remember what made us special. For most of history almost everyone was poor. Power and wealth belonged to only a few.

Your rights were whatever your rulers allowed you to have. Your future was determined by your past.

If your parents were poor, so would you be. If you were born without opportunities, so were your children.

But America was founded on the principle that every person has God-given rights. That power belongs to the people. That government exists to protect our rights and serve our interests.That we shouldn’t be trapped in the circumstances of our birth. That we should be free to go as far as our talents and work can take us.

And there it lay, perfectly clear yet hiding in plain sight, the press pretending not to notice, as if just as in Europe there was a tacit agreement not to notice the elephant in the living room. Even those who would not go so far as to put 2012 on par with the Civil War would concede that a “specter has been haunting” a seemingly triumphant Western neo-Marxism.  It is the specter of the American Idea. The ghostly metaphor may be all the more accurate because for the last 25 years the American Idea has been considered buried. But it has not yet even been exorcised even though as Daley put it no one in the elite wanted to look at where it stood, refusing to go away.

And now it’s back, booing the silent consensus that there existed a “magic formula in which the wealth produced by the market economy is redistributed by the state – from those who produce it to those whom the government believes deserve it”. This disquiet is challenging the central doctrine of the “advanced West”, which is broke and it ain’t so advanced any more.

"Ideas that people came to America to get away from."

What happened? It all went swimmingly until the economic crisis showed the magic formula didn’t work any more. The almost innumerable crisis meetings among European leaders and the crazy gyrations of the American cultural elites have revealed a deep doubt. Now the world –like America — like Europe may have to make a hard choice: unlimited government cheese with very limited liberty or a greater liberty with limited government cheese. Which will it be?


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