"Is Our Democracy Becoming Illiberal?"

Sydney M. Williams

Thought of the Day

“Is Our Democracy Becoming Illiberal?”

October 5, 2011

One of the more misleading myths of our political world – and one perpetuated by the mainstream liberal press – is that the Democratic Party represents hardworking laborers and the needy. And that the Republican Party represents “Fat Cats” in urban and suburban America. An analysis done by the New York Times (but never used to my knowledge on their editorial pages) shows that in the 2008 election the richest counties in America, those with median incomes around $100,000, went for Obama 55% to 44%, while those with incomes under $40,000 went for McCain. Two counties in New York State serve as a proxy. Westchester County, where the median income was $71,472, voted 62.9% for Obama with McCain taking 36.2%. In the upstate county of Hamilton, where the median income was $36,413 the results were almost precisely inverted, with McCain taking 63.7% of the vote to Obama’s 35.5%.

Over the past couple of decades, economic growth in the U.S. was dependent on the consumer and his willingness to assume increasingly ridiculous levels of debt. He was aided and abetted by a Congress intent on permitting our least credit worthy citizens before the feeding trough and a Wall Street whose sense of morals went no further than their pocketbooks. The consumer, as a percent of the economy, grew from 66.7% in 1990 to 70% in 2008. Between 2000 and 2007, total consumer debt doubled to $13.8 trillion (an annual compounded rate of 10 percent,) while GDP compounded at an annual rate of 5.2% to $14 trillion. That world of “Wonderland” came crashing down, as housing prices began deflating in early 2006. The punch bowl was empty and all that remained was the stomach ache. Deleveraging definitionally results in less economic growth. It is the way the math works. To offset declining consumer spending an $800 billion stimulus bill was passed; but then Mr. Obama, in an attempt “to not let the crisis go to waste” immediately followed that bill with an idiotic decision to push through Congress, in a partisan fashion, the Affordable Care Act. He also attempted, and fortunately failed, to pass a climate change bill and card-check – all three job killers. The three bills were advertised as liberal, but, in reality, would deprive individuals of basic rights. Why Mr. Obama chose that moment to remake the country, when a lack of jobs was the problem, could cost him a second term.

When government intercedes for moral (prohibition) or economic (healthcare) reasons, it consumes capital by borrowing money or raising taxes, thereby increasing the cost of capital for the private sector. In the introduction to his book, Liberalism, Ludwig von Mises wrote: “Antiliberal policy is a policy of capital consumption. It recommends that the present be more abundantly provided for at the expense of the future.” That reads like the United States over the past couple of decades.

Hard times make for even odder statements. Peter Orszag, Mr. Obama’s former budget director, wrote recently in the New Republic that, “we need to counter the gridlock of our political institutions by making them a bit less democratic.” Governor Bev Perdue of North Carolina suggested last week to a Rotary Club audience that perhaps Congressional elections be suspended. “I think we ought to suspend, perhaps, elections for Congress and just tell them we won’t hold it against them, whatever decisions they make, to just let them help this country recover.” She now claims she was being funny. Nevertheless, she added at the end of her speech: “I hope that someone can agree with me on that.” That does not sound like an attempt at humor.

Dana Milbank, a columnist for the Washington Post, in an op-ed in this weekend’s Investor’s Business Daily, sounded fatalistic about the future of Presidential politics. He wrote: “Washington’s problems are beyond the ability of one man to repair.” The comment reeks of cynicism and ignores the positive effect individuals from FDR to Churchill to Reagan have had on the course of events. On Thursday, the President suggested the people had become soft and less competitive over the past couple of decades. I am not sure exactly what he meant, but words like those do little to restore confidence. Reducing regulation and reforming the tax code would certainly help, as should his sending to Congress, as he did on Monday, the three trade bills that he has been keeping on his desk. Of course, the value of those three trade pacts will be more than offset by the Yuan-bashing and protectionist bill (The Currency Exchange Rate Oversight Reform Act) proposed by Senators Chuck Schumer and Lindsay Graham that amazingly cleared the Senate yesterday with a 79-19 procedural vote.

A story in this past weekend’s edition of the Wall Street Journal told of an African-American mother of two young girls from Ohio. She had been sentenced to jail because she used her father’s address to enroll her daughters in a better public school. Fortunately, she was granted clemency by Governor John Kasich, but not until she had spent nine days behind bars. Poor families, unable to afford private schools and who live in districts with no access to vouchers or charter schools, are left without choice. Michael Flaherty puts it well in his Journal article: “Only in a world where irony is dead could people not marvel at concerned parents being prosecuted for stealing a free public education for their children.” So much for the liberality of the America Federation of Teachers! Civil disobedience has a long history in the U.S. and is a hallmark of our democracy. This case certainly fits that definition.

Classical western liberalism stems from John Locke and his belief in the natural rights of man. Of course, he was writing at a time when hereditary or divine rights held sway and the church was an organ of the state. Today those laws and traditions, like primogeniture, have been relegated to the dusty bin of history. Locke’s “natural rights” assumed the right to assemble, to speak and write; to elect their own leaders, and to worship as they chose. However, Locke’s “natural rights” were also based on the concept of constitutionalism, capitalism and free trade, all functioning under the rule of law.

Too often today’s “liberals” equate a more powerful, benevolent government that grants entitlements as being liberal. Classical liberalism would object to a government whose very expansion, definitionally, diminishes the role of the individual. A man like Herman Cain far better fits the classical definition of liberal than does Barack Obama. The ongoing debate over the budget, deficits, entitlements and taxes is in essence a debate over what kind of a society do we prefer – how intrusive a government will we allow. The more power government assumes the less available to individuals. The spectrum ranges from anarchy to authoritarianism. The people must decide where on that grid they choose to reside.