I Want a Divorce

As I hear people express disgust at the federal government, I also pick up a tone that's kind of like: “Why can’t you meat heads just get the job done like your political forebears did?” or “Why can’t we just get back to the way things were when Washington worked?”  How many times have I heard reference to President Reagan and Tip O’Neill (at one another’s throats during the day, sharing a beer after hours) lately? 

I’d like to advance a view of modern American political history that goes something like this: we haven’t truly had substantive collaboration in Washington for decades now.  What’s felt like cooperation to us hasn’t been true give and take.  Rather, it’s been a long series of negotiated settlements financed by the issuance of U.S. Treasury bonds.

'I want a new kitchen counter top.'
'Oh, yeah?  Well I want a new bass boat!'
'Hey, how about we get both and put them on the card?'
'Great idea!'    

That game is over.  Bond investors and rating agencies have begun to tell us that we need to stop, that we can’t continue satisfying all of our diverse wants by putting our purchases on 'the card', so to speak.

Republicans favor limited government and free enterprise and Democrats see government as a force for good and a crucial provider of social services.  Republicans don’t want to raise taxes because they see the oppressive tendencies of bloated federal bureaucracies.  Democrats don’t want to stop spending money on social programs because it would kill their very purpose for having a government.

On the face of it, is either of those a bad preference?  Think about it for a minute.  I’m sure you, like I, have a preference for how society SHOULD look or an opinion about how it operates BEST.  But is either of those desires inherently wrong?  I don’t think so.

What is wrong is pretending that we can eat our cake and have it, too.  We can’t prioritize both low taxes and government programs.  The price of equality is liberty, and vice versa.  France's national motto is idealistic, not realistic. 


Last November we were treated to bureaucratic sausage making at its finest: the “Supercommittee” negotiations.  This committee was the product of the settlement to raise the debt-ceiling last August and was comprised of six Democrat and six Republican senators & representatives.  They were tasked with finding a compromise to restore a modicum of health to the federal budget (or, rather, what would be a budget, if they'd passed one in the last three years).  Both tax increases and reforms to the real fiscal nightmares ahead (Medicare & Social Security) were to be on the negotiating table.  Shortly before Thanksgiving, however, the Supercommittee announced that it had failed to come to an agreement, thus triggering automatic spending cuts, mainly to defense and certain discretionary items.

The Supercommittee's failure was one of the most predictable outcomes of the last decade.  Did anyone really think the six Democrats on the Supercommittee would be able to look their constituents in the eyes after agreeing to any substantive entitlement cuts?   Could the six Republicans renege on their promises to not raise taxes?  Each of the 12 committee members had simply voted the way they’d been elected to vote.

Republican Supercommittee Co-chair Jeb Hensarling summarized the failure well in a Wall Street Journal Op Ed (November 22):  “…I believe my Co-chair, Sen. Patty Murray, and every Democrat acted with honor and integrity and negotiated in good faith to the end…Ultimately, the committee did not succeed because we could not bridge the gap between two dramatically competing visions of the role government should play in a free society, the proper purpose and design of the social safety net, and the fundamentals of job creation and economic growth.”

That strikes me as a pretty fair way of summarizing the problem. Things don’t get immediately easier with this realization.  In fact I think they’re almost certain to get a lot harder before we resolve anything.  But, I think acknowledging this gulf offers the possibility of a much more civilized negotiating process going forward, one which I think can lead to deep healing from some serious societal dysfunction.

The first step in this healing process is admitting that we have a problem.  Our problem is two competing societal views, which cannot both be satisfied.

I propose a divorce.

I don’t mean a name-calling, plate-throwing, dog-kicking divorce.  I'm just being real about our massive irreconcilable differences and I think splitting up is very sensible.  What I mean is it’s time to acknowledge that we’re never just going to “get along” again.  Let’s let our nostalgia for political cooperation, collaboration, and compromise just die—they’re anachronistic, given the magnitude of the current divide.

One way to move forward is through a more clearly federalist form of government: transfer most power, money, and responsibility back to the states and let the genuine differences flourish.  If Wisconsin wants to pay public school teachers minimum wage, let them.  If Massachusetts wants to allow its citizens to add their livestock to their health insurance policies, let them.  If we get 50 smaller laboratories experimenting with social and economic issues, we’ll be much more likely to distill the most effective public policies.

Plus, we’ll all be happier. You know, that freedom of association thing.
 
I’m not suggesting that we do away with the Federal government.  Keep the constitution, the military, the Supreme Court, and the Fed (Ron Paul’s off his rocker on this one), so long as we really limit the last one.  Keep Congress and the Presidency.  Heck, the Commerce Department might actually become relevant in that scenario, ironically enough, so keep it for the time being, too.  But most everything else could be done more effectively—and harmoniously—in the 50 state “laboratories”.  California learns from Tennessee's experiments, which learns from Ohio's, and so forth.

I don’t suppose that the split would be easy: if one state starts to migrate to the right, there’s no reason to think the progressives there will enjoy it and stay put.  Likewise, for example, if Indiana shifted dramatically to the left, I don’t know for sure that I’d move, but I would certainly encourage my kids to be deliberate about where they choose to settle because their residency choices would bear significantly on their social satisfactions.

Does this sound ridiculous and extreme? Maybe, but it really shouldn’t.   The reality is that the divorce has already happened in our hearts: all that's changed is we've lost our ability to remain in denial.  How we proceed with the split is key.

If not federalism, then what?  Moderates take over?  Hardly.  The recent political volatility is the result of the perennially wishy-washy—neither the left nor right would tolerate that.  The Socratic "golden mean" was a nice idea, but often times is as realistic and useful as a painting of a unicorn.  Don't get me wrong: moderates are often both peacemakers and pragmatists, and I respect those qualities.  It's just that the time of giving a little something to everybody is over.  We really have arrived at the big fork in the road.

The Left takes over?  Maybe, but you might as well start filling container ships with American capital and sending it to foreign markets (Think I'm using hyperbole?  Read this).  Our standard of living will get absolutely creamed if we follow President Obama's impulses. Plus, there are those pesky Second Amendment & military asymmetries to be reckoned with.  The Right takes over?  Only if you’re prepared for even bigger and more violent OWS-style wealth disparity protests, general strikes, etc.  And, many on the left would sooner die than be governed by someone they perceive to be a theocratic nut-job who champions social liberties, but only as he defines them. 

Coercion is coercion, whether from the left flank or the right.   If we shrink the number of instances where we have to coerce one another, we'll necessarily have fewer opportunities for division, bitterness, and hatred.  

As I see it, the way to avoid a second American civil war down the road is to figure out how to live peaceably in the same house right now and quit pretending that we’re going to get along again someday. Let’s just get a divorce--a federalist divorce.  We’ll all be happier.

C'mon, John, Just Say it!

If you didn’t happen to catch House Speaker John Boehner’s summary of why congressional Republicans caved on their earlier demands to pay for the payroll tax cut with spending cuts, here it is.  His accusation that Democrats are playing political games isn’t at issue, rather it’s the insinuation that he and his cadre are taking the high road and not playing games.   

Really, Mr. Speaker?  Blech!

How refreshing would it have been to hear the Speaker say instead: “Look, everybody, we did our level best to force these spendthrift redistributionists to pay for their economically-ineffective-but-politically-popular, vote-buying tax cut with spending cuts elsewhere, but we failed.  And, in case you numbskulls hadn’t noticed it’s a rather big election year; it would’ve been political suicide for us to try to take the high-fructose corn syrup laden lollipop away from the diabetic toddler.”  

 

People love free stuff.  OK, the stuff’s not really free, but they don’t have to pay for it now and if we finance the purchase of the stuff with debt, chances are pretty good that eventually someone else will have to cover the tab.  Over time, people come to believe that the free stuff should always be free to them.  It becomes something to which they feel entitled.     

The Democrats clearly get that restoring taxes during a weak economic expansion won’t help anything.  But, surely, they also must know—deep down—how ineffective a temporary FICA tax holiday is, right?  I don’t know, maybe they’ve never been exposed to permanent income theory, but I'm inclined to give them the benefit of the doubt. Maybe that's too much to assume: our last president didn't seem to get that one and he was, a 'conservative'. Still, Democrats are always saying how much smarter they are than Republicans, so I think I'm safe.

Anyway, assuming Democrats do actually understand how silly tax holidays are, then we should expect them to propose a date or set of economic conditions as a trigger for restoring the tax to pay for Social Security’s obligations. 

On the other hand, when will it be politically feasible for Democrats to raise taxes on 'middle class families'?  Might the underlying strategy be a permanent shift of financial obligation for funding Social Security—from the beneficiaries to the 'rich'?

There’s one way to tell.  Someone should ask the Democrats at what point it makes sense to fully reinstate payroll taxes, and see what they say.  What kind of response would Rep. Boehner get if he asked that question?