The Best Laid Plans…

Most of you who read this regularly know that I am a big history buff. My main area of interest from age 13 until recently was the American Civil War (or War Between the States for you unrepentant Southerners out there). But recently, the last four years or so, I have started reading a lot of Founding Father bios and Revolutionary War era stuff. It definitely gives you a different perspective on how we do things now. One of the things that people of my generation have always had, but is not provided for in the original Constitution, is the popular election of senators. It’s something that I never really questioned until I started reading about the founders. Events that we view as inevitable most certainly were not to that generation. And unless you’ve done some reading you sometimes take for granted the thought that went into organizing our institutions. George Will’s most recent column dogging Russ Feingold and his attempts to amend the 17th amendment, puts forth a strong case for repealing it altogether. And while this is probably not a realistic course of action, his article provides interesting perspective on how our government was intended to work versus how it works (or doesn’t) now.


Risky Business

Well, it’s been a long time since I’ve posted anything. I’d like to say I have a good excuse but I guess that laziness will have to suffice.

Well, it looks like Congress has come to a verbal agreement on the proposed $700 billion government bailout plan. That would be the bailout that was proposed by the Treasury Secretary of the current REPUBLICAN administration! Reagan and Goldwater, fathers of the modern conservative movement, might be spinning in their graves fast enough to actually reverse the rotation of the earth. I understand that the government has an interest in preventing the economy from colapsing or sliding into a recession or depression…sometimes. That’s why Alexandar Hamilton proposed our first National Bank and it’s why the Federal Reserve was created. But the fact that this is happening 40 days before an election has the rhetoric all hopped up on goof balls. I have three main issues with this whole debacle. First, as a Republican it saddens me to see my party just go along with this. This is Socialism Light (and maybe not so light at that) and not only does it violate one of the primary conservative principles – the free market and the lack of government meddling therein – but it’s a dead end road for Republicans. They won’t get credit if this all works and they’ll definitely get the blame if it goes south. You see, the left wing of the Democratic party has hardcore socialist leanings. Republicans cannot out New Deal the original New Dealers. My second issue is with two of the rumored provisions of the legislation that Congress will be sending to the president. It’s been said that the new bill will strip most of the so-called “golden parachutes” from CEOs and other top executives of companies that fail. Golden parachutes refer to clauses in executive contracts that allow executives to leave the company with a large lump sum of money. It’s kind of like the signing bonus in the NFL in that it is given regardless of performance, only it’s given on the back end. It’ even rumored that the provision might be able to be applied retroactively. One of the other scary (again rumored) provisions is that judges might be able to review individual mortgage contracts and change them if they find them unfair in some way. Both of these provisions speak to a fundamental lack of understanding of one of the foundations of our society; the inviolable nature of contracts. This was one of the Founding Fathers’ biggest issues and one of the things that they all agreed on. The Founders split into bitterly opposed factions early on in the beginning of our republic, but one thing that they all agreed on was the sacrosanctness of property rights and the only thing that could secure property rights was the inviolability of contracts. The founders saw contracts as a way to save both individuals and businesses from the whims and caprices of an unfettered government. Now don’t get me wrong, I understand why people are upset when they hear of a CEO that runs a company into the ground because of greed or just plain incompetence and then leaves with a cool $20 million in his pocket. It’s the same reason people don’t understand why A-Rod gets $25 million a year but a teacher, policeman or fireman get $25 thousand. But you know what? Unless you’re a share holder with that company it’s just none of your damn business how that CEO is compensated. And if you are a share holder then you have a voice in how the board of directors do things and you should express your concerns at the annual shareholders meeting. The government has no business reworking contracts whether it’s a contract between a corporation and its executives or between a corporation and a mortgage holder unless there’s some sort of fraud involved. And I’m really getting tired of the term “predatory lending”. You know what, if you just blindly signed your mortgage without understanding its terms, without asking any questions about things you didn’t understand then you, my friend, are stupid. If you are enough of an adult to sign your name to a piece of paper that obligates you to 30 years of debt at $100K or more then you need to be adult enough to either live up to that obligation or take the hit and suffer the consequences if you can’t.

But here is what I think is the underlying problem with all of this. Americans (especially the generations that came after the Great Depression) increasingly feel that the government should insulate us from, and ameliorate any of the consequences associated with, the everyday risks of business, the market and life itself. Before the 30’s, putting your money in a bank was a somewhat risky proposition. If the bank failed you were SOL; bye-bye life savings. Those of us born after the FDIC came about don’t know what that’s like. If my bank fails, I don’t loose anything as long as my accounts are under $100K. Back in the Dust Bowl days, if your house was destroyed and all the topsoil on your farm blew away, you packed up what was left and moved somewhere to “start over”. Now, people expect FEMA to pay their hotel bill while they wait to get their check from FEMA to rebuild their house in the same below-sea-level spot. And now both of the presidential candidates, responding to the current financial meltdown, are saying something like this: “The government has to step in and do something about this crisis because millions of Americans’ homes, investments and retirements are at risk.” Holy shit! You mean investing in the stock market involves risk? WTF! Why didn’t anyone tell me that when I invest my money I’m not guaranteed a 20% return for life. You mean if my 401K isn’t performing well I might have to work a few extra years? Outrageous! And now you’re telling me that just because I signed a mortgage that allowed me to make interest-only payments for the first five years and then raises my interest rate 3 points and then requires that I start paying down principle and now I can’t make my payments that I might loose my house? That’s just crazy talk!

Maybe it would serve us well to be reminded of that old cliche: Nothing is certain but death and taxes. You can modify the latter component if we keep allowing government to “insure” more and more aspects of our lives to read “higher and higher taxes.”

United We Fall

I read an interesting article recently about Barack Obama and especially his repeated calls for “Unity”. Much has been made about his supposed ability to “reach out across the aisle” and to “unite” Americans of all parties, races and creeds. But oddly enough, Obama doesn’t have much of a history of bi-partisan voting. During his tenure in the U. S. Senate he has actually voted the party line more often than the Senate Majority Leader Harry Reid. That bears repeating. The guy that the Democrats voted to lead them in the Senate has had fewer party-line votes than Obama. The main thrust of the article is best stated as: who cares about unity? While Obama seems to put unity forward as a value, unity is actually value neutral. If we could all unite around the banner of Peace, Love, and Girl Scout Cookies that would be a good thing. Nazi Germany was pretty united; that was not so good. And if Obama is so hot for unity, why doesn’t he jump on board with all of the President’s policies? Wouldn’t that be a great example of reaching across the aisle? Hey, if you want unity lead by example. Of course, that scenario is as ridiculous as his call for unity is insincere. In reality Obama doesn’t believe the steaming pile he’s shoveling any more than you or I should. His voting record proves that. The fact is that the call for “unity” makes for great sound bites and campaign rhetoric but has no value or practical use in the American political arena. Who would respect the politician that sacrificed his political values in the name of unity? In fact, one of the problems that so many Republicans had/have with McCain is that he seems to have taken that tack too often for comfort. The problem with Obama’s calls for unity is that it sounds as if he’s labeling dissent as unhelpful or even un-American. Basically, his message seems to be if you’re not with us you’re part of the problem. 

The Founding Fathers certainly didn’t care too much about unity. As I mentioned in a post before, the political atmosphere of the Revolutionary/Founding period was probably the most rancorous period in our history. The Founding Fathers couldn’t agree on whether or not to split with England or stay and press for more rights. Once the split happened, they couldn’t agree on how to prosecute the war. Should Washington try for a bold, decisive move crushing the invading army on the field of battle or should it be a “war of posts” whereby Washington would adopt a defensive position only joining in battle when absolutely necessary, thereby wearing the enemy down in a protracted war? Once they had achieved independence and it became obvious that the Articles of Confederation weren’t doing the job, the Founders were divided on whether to revamp the Articles or ditch them and create the government eventually outlined in the Constitution. And even the system laid out in the Constitution not only sets up an adversarial system among the three branches with checks and balances but also has the individual States contending against the Federal government.

And then of course, the Founders gave us the two party political system. And although at the time, most of them detested the idea of partisanship (Jefferson famously saying “If I could not go to Heaven but with a party, I would not go there at all.”), James Madison, the “Father of the Constitution”, later admitted that it was one of the greatest of their generation’s contributions. The party founded by Jefferson and Madison was created solely for the purpose of thwarting the efforts of the Federalists led by George Washington, John Adams and Alexander Hamilton. Jefferson spent most of his time as Secretary of State (for Washington) and Vice President (for Adams) scheming against and trying to undermine the authority and accomplishments of the very administrations he was “working” for. And he did it all because he felt these fellow patriots were betraying the “true spirit” of 1776. So the myth of the all-for-one-and-one-for-all attitude of the Founders is just that, a myth. The fact is that the Founding Fathers recognized that constant debate and contention gave our government the best chance of meeting the challenges it was sure to face.

The Founders for the most part were unified in their desire to see America succeed; they just strongly disagreed about what success meant and about how to achieve it. The same holds true today. I believe that, with a few exceptions, most of our politicians want what’s best for America and her people. But we all have different ideas on what truly is best and how to go about making our vision for America a reality. The best thing our politicians, specifically the presidential candidates, can do is jettison the silly rhetoric and have honest discussions about their ideas on the direction our country should take.