Wednesday, November 03, 2010
More about Democracy, etc.
Today is Wednesday, November 3, 2010. When I started to write this post several days ago the election had not yet happened and I was going to write about some of the seeming contradictions in the American system of government. Now that the election is past and the results are known, I can add some comments about the election and what I think it means.
Except in California, the Republicans won big yesterday. They achieved the largest turn-over in the House since - perhaps during the administration of Franklin Roosevelt. I don't have the statistics handy, but it was larger I believe than the turn-over in 1994. What meaning is there for the present big change in representation in the House?
My first thought is that the result affirms a statement ascribed to Alexander Hamilton. He is quoted to have said something like "the public (people?) is a great beast." The most common element among voters to explain their choices is that they were reacting in anger and by instinct, not by reasoning. I may have a blind spot regarding Conservative thought but it seems to me that in many cases the voters voted against their own best interests. They were angry that the government hasn't done enough to create jobs and end the recession. So, they voted for candidates who promised that they would have the government cut taxes and do less. To me, that is the reaction of an angry wild beast, not a logical thinking human.
A more subtle explanation is that the voting public is frustrated at the failure or refusal of elected officials to make changes in "Washington" and do something effective about unemployment. The frustration is misdirected. Our system of government was designed by the likes of Alexander Hamilton to prevent government from doing anything unusual or out of the ordinary. Certainly Hamilton never imagined that the federal government would ever be involved in trying to create new jobs for unemployed workers. The classic solution for unemployment in his day, and right up to the beginning of the last century, was to encourage an unemployed worker to "go west" and find his fortune. The government facilitated the "go west" solution by dealing with the rather annoying fact that there were already people living on the land that the unemployed worker wanted to claim for his family's farm. These annoying people, even more annoying than some of the wild animals, like wolves and bison, were dealt with sternly by the Army. They were killed off or relocated in areas not desired for agriculture. That's where their descendants are today, on Indian Reservations.
Clearing out the indigenous population was a "Conservative" program to deal with unemployment. It had been used in various places for thousands of years. Our government was designed to favor "Conservative" acts and policies: acts and policies that had been in place since the beginning of history.
The Great Depression of the 1930's was the first big economic downturn since the closing of the frontier some time between 1910 and 1915. My father witnessed that event while homesteading in the State of Washington. After that, the nation could not solve economic hardship by telling the unemployed to "go west." The "west" was the Pacific Ocean, completely unsuitable for farming.
If we were a logical people, we would recognize that "going west" was no longer a useful means of dealing with recessions. We would have developed other alternatives and embraced them. In fact, during the Great Depression of the 1930's we were fortunate to have had a President who recognized the need for other means and who tried a method of having government fund work projects to put unemployed workers to work doing things that were supposed to be useful. Some of the projects were very useful; others were boondoggles. Somehow we recovered from the depression without having a violent revolution. The French in 1789 and the Russians in 1919 were not so fortunate.
Our archaic system of government did not fit well with President Roosevelt's make-work programs. Later political leaders eschewed the idea of government spending money just to put unemployed people back to work. Recently we have tried giving money (bail-outs) to banks and insurance companies so that they won't go bankrupt and can continue lending money to entrepreneurs who want to start businesses. This approach hasn't worked even as well as Roosevelt's WPA and PWA and other alphabetic programs.
Roosevelt had the advantage that the United States had an excellent credit rating. He was able to fund the various programs by borrowing money. However, the ease of borrowing money led many of his successors to use borrowing in preference to increased taxation to pay for projects that were not aimed at putting unemployed workers in jobs but rather in projects that didn't have a lot of public support. Many of these projects involved wars aimed at establishing and protecting an American commercial empire. As a consequence we are now at a state in which we have a huge national debt and have justifiable doubts that we can raise the money for programs like the WPA and PWA by selling T-bills to China.
By the way, how many of you watched the interview with David Stockman on the "60 Minutes" program on CBS last Sunday? He pointed out that our political leaders of both Parties are unwilling to propose an increase in taxes as part of the solution of the chronic deficit problem. He advocated simply letting the Bush Tax Cuts expire as scheduled on December 31 as a start. All of them, not just those for the people with incomes greater than $250,000 a year.
Except in California, the Republicans won big yesterday. They achieved the largest turn-over in the House since - perhaps during the administration of Franklin Roosevelt. I don't have the statistics handy, but it was larger I believe than the turn-over in 1994. What meaning is there for the present big change in representation in the House?
My first thought is that the result affirms a statement ascribed to Alexander Hamilton. He is quoted to have said something like "the public (people?) is a great beast." The most common element among voters to explain their choices is that they were reacting in anger and by instinct, not by reasoning. I may have a blind spot regarding Conservative thought but it seems to me that in many cases the voters voted against their own best interests. They were angry that the government hasn't done enough to create jobs and end the recession. So, they voted for candidates who promised that they would have the government cut taxes and do less. To me, that is the reaction of an angry wild beast, not a logical thinking human.
A more subtle explanation is that the voting public is frustrated at the failure or refusal of elected officials to make changes in "Washington" and do something effective about unemployment. The frustration is misdirected. Our system of government was designed by the likes of Alexander Hamilton to prevent government from doing anything unusual or out of the ordinary. Certainly Hamilton never imagined that the federal government would ever be involved in trying to create new jobs for unemployed workers. The classic solution for unemployment in his day, and right up to the beginning of the last century, was to encourage an unemployed worker to "go west" and find his fortune. The government facilitated the "go west" solution by dealing with the rather annoying fact that there were already people living on the land that the unemployed worker wanted to claim for his family's farm. These annoying people, even more annoying than some of the wild animals, like wolves and bison, were dealt with sternly by the Army. They were killed off or relocated in areas not desired for agriculture. That's where their descendants are today, on Indian Reservations.
Clearing out the indigenous population was a "Conservative" program to deal with unemployment. It had been used in various places for thousands of years. Our government was designed to favor "Conservative" acts and policies: acts and policies that had been in place since the beginning of history.
The Great Depression of the 1930's was the first big economic downturn since the closing of the frontier some time between 1910 and 1915. My father witnessed that event while homesteading in the State of Washington. After that, the nation could not solve economic hardship by telling the unemployed to "go west." The "west" was the Pacific Ocean, completely unsuitable for farming.
If we were a logical people, we would recognize that "going west" was no longer a useful means of dealing with recessions. We would have developed other alternatives and embraced them. In fact, during the Great Depression of the 1930's we were fortunate to have had a President who recognized the need for other means and who tried a method of having government fund work projects to put unemployed workers to work doing things that were supposed to be useful. Some of the projects were very useful; others were boondoggles. Somehow we recovered from the depression without having a violent revolution. The French in 1789 and the Russians in 1919 were not so fortunate.
Our archaic system of government did not fit well with President Roosevelt's make-work programs. Later political leaders eschewed the idea of government spending money just to put unemployed people back to work. Recently we have tried giving money (bail-outs) to banks and insurance companies so that they won't go bankrupt and can continue lending money to entrepreneurs who want to start businesses. This approach hasn't worked even as well as Roosevelt's WPA and PWA and other alphabetic programs.
Roosevelt had the advantage that the United States had an excellent credit rating. He was able to fund the various programs by borrowing money. However, the ease of borrowing money led many of his successors to use borrowing in preference to increased taxation to pay for projects that were not aimed at putting unemployed workers in jobs but rather in projects that didn't have a lot of public support. Many of these projects involved wars aimed at establishing and protecting an American commercial empire. As a consequence we are now at a state in which we have a huge national debt and have justifiable doubts that we can raise the money for programs like the WPA and PWA by selling T-bills to China.
By the way, how many of you watched the interview with David Stockman on the "60 Minutes" program on CBS last Sunday? He pointed out that our political leaders of both Parties are unwilling to propose an increase in taxes as part of the solution of the chronic deficit problem. He advocated simply letting the Bush Tax Cuts expire as scheduled on December 31 as a start. All of them, not just those for the people with incomes greater than $250,000 a year.
Labels: Alexander Hamilton, David Stockman, deficit spending, Demand side economics; Franklin Roosevelt; public works projects
