Monday, April 14, 2014

My Senator

Yes, this is THC's Senator (though the phrase "callow youth" also comes to mind), Chris Murphy (D-CT) explaining away the woes of the Affordable Care Act by whining that it was a tough job since "we were reordering one sixth of the American economy" and that "the only way to do it was to make it big".

That certainly is one way of looking at it. But perhaps THC is being unfair.  Perhaps we should have more empathy for the task of the legislator and regulator who must get everything just right in order to make that one-sixth of the economy operate like clockwork.  And for those who ceaselessly criticize those who are tirelessly working on our behalf - that irksome American public which does not appreciate all that is being done for them - we need only remember the sentiment of the Emperor Caligula when vexed once again by a stubborn Roman populace: 

Utinam populus Romanus unam cervicem haberet!
Would that the Roman people had but one neck!

  (Caligula, not a nice guy)
And certainly our public servants deserve a better class of citizens.  THC is sure that once they can reorder the rest of the economy they'll start working to ensure they have a citizenry worthy of them, or, in the alternative, arranging for that one neck (undoubtedly with advance publication of the proposal in the Code of Federal Regulations) and establishing a more suitable populace which will more tamely accept their guidance. 

Sen Murphy's sentiments merely echo themes of progressives that are now a century old, sentiments best captured in Franklin Roosevelt's Commonwealth Club speech of Sept. 23, 1932, given in the midst of his first presidential campaign. It is worth reading in full because it gives you the most undiluted picture of the Progressive mindset and, as an added attraction, comes complete with a Fractured Fairy Tale version of American history.

Let's enter the WAYBAC Machine and take a look at that speech:File:Waybackmachine3.png(Mr Peabody & his pet boy, Sherman, enter the WAYBAC Machine)

In FDR's view, the world of the Founders had disappeared by the beginning of the 20th century with the emergence of industrial America and thus their ideas about property and liberty were now outmoded.  The Progressives believed that in order for the United States to continue to compete as a great nation the social reforms of late 19th century Bismarckian Germany and the government-industry cooperative model of the new corporatist Italian state provided a better path forward.  It was a world where all that could be invented had already been invented; a world where the large corporations that existed would always exist and maintain their dominance (a generation later John Kenneth Galbraith would make the same argument with a different constellation of corporations in The Affluent Society and The New Industrial State), in other words, a static world in which the pie had been baked and now just needed to be cut up.  Under these circumstances it was time for the rule of the manager and administrator.  FDR summed it up this way:

A mere builder of more industrial plants, a creator of more railroad systems, and organizer of more corporations, is as likely to be a danger as a help. The day of the great promoter or the financial Titan, to whom we granted anything if only he would build, or develop, is over. Our task now is not discovery or exploitation of natural resources, or necessarily producing more goods. It is the soberer, less dramatic business of administering resources and plants already in hand, of seeking to reestablish foreign markets for our surplus production, of meeting the problem of under consumption, of adjusting production to consumption, of distributing wealth and products more equitably, of adapting existing economic organizations to the service of the people. The day of enlightened administration has come.

Take that Steve Jobs and Bill Gates!  No soup for you. 

The goal of this new process was simple then, and remains simple today for Progressives.  Provide regulators and the Executive Branch with enough authority to make the "right" decisions.  The substance of those decisions may change over time; the important part is that bureaucrats have the authority to tame this unruly economic system and the citizens who insist on acting in such a chaotic manner - as FDR put it, we can rely on the enlightened administrator.  That's why, as it turned out, the actual language of the Affordable Care Act, has mattered so little.  Whatever the Obama Administration hasn't liked it just ignores or unilaterally changes.  Maybe they'll get it wrong this time but there is always a more perfect regulation and a more perfect regulator to get it right the next time.

The idea that order needs to be imposed, and can be done so effectively by all-knowing regulators, was widespread in the New Deal and remains a touching, faith-based creed, today.  This distaste for the disorder created by the individual decisions of millions of citizens, along with some bizarre views on economics, can be seen in an excerpt from Justice Cardozo's dissent in Carter v Carter Coal Co (1936) in which the Court, in a 5-4 vote, found the Bituminous Coal Conservation Act of 1935 to be unconstitutional.  The Act was another attempt to set up a government, industry and union cartel to set prices and wages:

Overproduction was at a point where free competition had been degraded into anarchy. Prices had been cut so low that profit had become impossible for all except the lucky handful. . .
Congress was not condemned to inaction in the face of price wars and wage wars so pregnant with disaster. Commerce had been choked and burdened; its normal flow had been diverted from one state to another; there had been bankruptcy and waste and ruin alike for capital and for labor. The liberty protected by the Fifth Amendment does not include the right to persist in this anarchic riot.
What's missed is that those individual decisions by millions of people are an incredible example of spontaneous collective action whereas the nominal "collective" decisions by regulators and crony cartels on behalf of "the people" are actually made by very few persons. 

The "principles" other than control remain malleable though the New Deal principles look somewhat odd from today's perspective.  The New Dealers saw the need to reorganize both the industrial and agricultural sectors of society and it was upon these two pillars that their reforms were built. First, was the National Industrial Recovery Act (NIRA) which created a cartel of industry and government and industry to regulate prices and create operating rules for every industry sector.  The Progressive idea was that prices were too low and needed to be raised in order for the country to end the Depression.  Doesn't sound like today's Progressives, but no matter, the real point is "who decides?" and "who controls?"  Fortunately, the law was declared unconstitutional by the Supreme Court thanks to Schechter Poultry Corp. v U.S. (1935) in which the government prosecuted a family of Kosher chicken sellers in Brooklyn who insisted that their customers should actually be able to select the chickens they wanted to buy.  You are reading that correctly - the new regulations required buyers to accept chickens only in blocks of a dozen or half-dozen because allowing them to select individual chickens would disrupt the market!

(It's all or nothing!)
The other pillar was the Agricultural Adjustment Act designed to accomplish the same goal - raise prices for the consumer.  As a result of the New Deal policies, millions of cattle and hogs were killed and their meat not allowed to be marketed in order to create more demand and raise prices at a time when millions of Americans were going hungry and a web of subsidies and growing restrictions established to reduce production and make food more expensive.

(Let's make it more expensive for the kids in order to increase corporate profits!)
Unfortunately the agricultural subsidy program has endured and in creating a new constituency for its benefits has ensnared politicians on both sides of the aisle, preventing any meaningful reform measures for 75 years.

While the specific type of Risorgimento intended by the NIRA was knocked off track by Schechter Poultry, later New Deal Supreme Court cases such as Carolene Products (1938) and Wickard v Filburn (1942) resulted in the Court dropping nearly all barriers to government regulation, except for certain Constitutional clauses which the Court still deemed worthy of protection.  As THC has pointed out before, the worst damage done to the Constitution in those years were all in cases where the government advocated for measures to improve the profitability of producers and to increase prices for consumers.  That is why THC says that the governing principle is about control, not about anything else; the details can change at any point as long as the right people continue to make the decisions. 

The result is today's upside-down Constitution. The original one presumed that rights remained with the people except to the extent those rights had been specifically delegated by the people (or the states) to the new federal government.  Today's Constitution, in the view of the predominant legal scholars, presumes that the default position is that the Federal Government, and for that matter, State governments except to the extent preempted by Federal action, can act as they see fit except for certain matters that have been delegated back to the people.  For instance, some sexual-related matters seem to have been delegated back, something the earlier Progressives would definitely not have approved of and, who knows, at some point that delegation may be revoked as academic theories change.

The best way to understand our current situation is that we are governed by the tenured liberal arts faculty of an Ivy League college which has the freedom to instruct students as they deem best and, when funds run low, to send out another tuition bill to the parents.

THC wonders what Senator Murphy next plans to "reorder".  THC knows who will get the tuition bill.


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