As a native of an historically significant Civil War city in the southern United States, as well as an economist, I have often had the feeling that by electing its first black President, the normal U.S. partisan politics were going to take on a completely new and intensified atmosphere. Not to make a direct comparison, but the secession of the southern state that resulted in America's Civil War was immediately preceded by the election of Abraham Lincoln.  I have had the uneasy feeling that the Republican Party, and the Tea Party which was absorbed by it so quickly and seamlessly after President Obama's election, would be resurrecting not only sociological remembrances of my childhood but the economic remembrances as well.

Fact of the matter is, I grew up in a unique town which had as its center, a crescent-shaped National Military Park which commemorates the Siege of Vicksburg---a siege which, in some ways, was the turning point of the Civil War, since the fall of Vicksburg gave control of the Mississippi River to the Union troops and signaled the inevitable defeat of the Confederacy, especially since Gettysburg’s demise occurred on almost the same day.

Vicksburg Unknown Soldier Cemetery, 1956 (Photo credit: Wikipedia)

As I struggle daily with conceptualizing a way to cure America's ailing economy (short of killing all politicians because my One-Penny Solution is clearly not catching fire), these feelings of unease keep rising to the surface, despite my continual attempt to restrict my focus to the economy and the eerie similarities which the last 30 years share with the run-up to the Great Depression. Congress and the "Supreme" judicial branch of our government have fallen so deeply into partisan dysfunction that I struggle against an innate instinct to lock myself away in the safe, warm, cozy, retro-fitted, circa 1955, fallout shelter that I discovered on my property after purchasing my house years ago. Either by nature or nurture, I’m not sure which, I have evolved over my lifetime into a “fixer”, in that I prefer to solve, then fix problems, and move the heck on. This problem, however, is above my pay grade.

I have inexorably become overwhelmed by the partisan nastiness which has become the daily staple of cable and broadcast news, and I keep coming back to a nagging question.

Just what the hell is the function supposed to be of the United States of America, and by extension, its government?

Taking a play out my collegiate Business Statistics text book , I decided on a radical course of action. It’s a familiar political ploy, but one that usually proves nothing. Nevertheless, since everyone seems to place a lot of trust in them...I conducted a poll.

I have a nifty cable plan that allows unlimited calls from my home phone, so I just started calling numbers. A day or two in, I decided to get a list of area codes from "the Google" just to give the appearance of legitimacy. I got a helluva lot of hang-ups, cursing in various accents, dialects and languages, but it was interesting nonetheless as I stumbled upon those who were willing to talk(some were surprisingly EAGER to talk). In all, over a period of three months, I recorded the answer from two thousand five hundred willing Americans. I made certain that I had at least 30 responses from all 50 states, and having achieved that lofty goal, I just started literally picking phone numbers at random. Not a bad statistically relevant sampling, as my college Stats professor would’ve mumbled in a somewhat agitated tone some 25 years ago.

The most common answer I got to my self-imposed question above, regardless of area code, whether they were a university graduate, an out-of-work blue collar worker, or a high school teacher, was this: To help me get rich of course(or some variation thereof).

Out of 2500 responses, this response was the RANDOM answer (not multiple choice) of 60% of those who chose to answer the one question that I asked. That is an astounding percentage given a lack of choices from which to choose. Not to raise a family, not to obtain a more comfortable life for their loved ones, not to get a world-class education. To get rich....OF COURSE. OF COURSE!

Although it didn't particularly surprise me as I was slogging through the daily grind of making all those calls, it was a bit shocking to me as that one column of tick marks continued to grow. I suppose for most people born after the Viet Nam War era, the world has been shaped by Ronald Reagan's redefining of government's relationship with the private sector’s interests. His was a vision of lower taxes, less regulation, and maximum economic latitude for those at the top, or the now (in)famous “trickle-down, supply-side”economics. In Reagan’s (or his advisers’) view, the pursuit of wealth is the only thing worth pursuing in America; everything else is just fine, if its foundation stemmed from that single meme.

But I had to wonder if this was some sort of other-world statistical anomaly or has it been this way all along and I had just missed a memo, or was taking a nap while it happened...or something.

 Official Portrait of President Ronald Reagan (Photo credit: Wikipedia)

Historical References

The preamble to the Constitution tells me that the government’s function can be captured in 52 words. Those stated functions are rooted in six simple ideological principles:

1.     Society

2.     Justice

3.     Peace

4.     Security

5.     Commonwealth and

6.     Freedom

If anyone can find individual riches listed anywhere in that document, I would really appreciate it if they would point it out to me.

Individual enrichment is a product of American society for sure, but not it’s guiding purpose. And to the best of my knowledge, it was never intended to be so.

It seems to me that along the way,  the meme became that greed, profit, or looking out for one’s self, to the exclusion of  the six principles above, is what this country is all about. I simply had not imagined that it  had ever been the purpose for our ancestors' exodus from one empire-building nation(Great Britain), just so that we could form another in which we would all look out for only ourselves or our states and the hell with everybody else in this country, much less the planet.

Had that indeed been the purpose, why would our founders have decided to go to the trouble of creating this Second document to properly communicate the values they wanted for the new American Republic? Yes, I said a SECOND document.

I think it's worth remembering that the failure of the Articles of Confederation, whose principles (weak government, unfettered capitalism, inability to collect taxes, the lack of ability to conduct foreign affairs,among others),were constructed while still at war with Britain. The Founding Fathers were divided between those seeking a powerful, centralized national government, and those seeking a loosely structured one. Jealously guarding their new independence, members of the Continental Congress arrived at a compromise solution dividing sovereignty between the states and the central government, with a unicameral legislature that protected the liberty of the individual states.

However, while calling on Congress to regulate military and monetary affairs, for example, the Articles of Confederation provided no mechanism with which to compel the States to comply with requests for either troops or revenue. At times, this left the military without adequate funding, supplies or even food. The Treaty of Paris (1783), which ended hostilities with Great Britain, languished in Congress for months because several state representatives failed to attend sessions of the national legislature to ratify it.

But Congress had no power to enforce attendance. In September 1783, George Washington complained that Congress was paralyzed(sound familiar?). Many revolutionaries had gone to their respective home states after the war, and local government and self-rule seemed quite satisfactory and preferable to them. Ultimately, the Confederation's lack of cohesive power reduced the likelihood for profit to be made by political means, thus potential rulers were uninspired to seek power, and the new Constitution was ratified by all thirteen colonies. But the objections of Statists have apparently never subsided.

For the past three decades, the return to State-ism seems to me to be the preferences under which the “conservative”, right-wing zealots have been trying desperately to steer the U.S. towards once again. But those Articles of Confederation were eventually rejected in favor of the Constitution, which is now twisted and contorted by those same Statists in an effort to magically transform the Constitution back into that rejected, first document.

I find it oddly curious that no one has equated the supporters of those State-ist principles set fort in the Articles of Confederation with the name of the group of states that tried to secede from the Union into the Confederate States of America, or simply The Confederacy. You know, the ones who promulgate that the Civil War was NOT about slavery at all....it was about states rights; too much governmental control; and yes, the feeling that 1% have every right to be the beneficiaries of the efforts 99% for a pittance! Perhaps the Republican Party could adopt the name Confederates Party so that the return to those policies held in such high esteem could enjoy a historical reference point with which it is so alarmingly similar.

How Has That Worked Out for You?

Even judged by its own inherently flawed measurements, the "trickle-down" approach to economics has failed miserably. Rather than everyone getting an improved monetary, sociological status, rather than improving the quality of life for the majority or Americans, rather than being the salvation and backbone upon which we can proudly point to a wildly successful and prosperous middle class…we have been slowly impoverishing ourselves. The Republicans seem determined to convince the silent majority of Americans that it is really they who have our best interest at heart in much the same way that plantation slaves in the pre-Civil War era came to believe that their masters really had their best interest at heart as well, despite obvious and plentiful facts to the contrary.

Perhaps The Confederacy Will Rise again

While incomes at the very top of the scale have sky-rocketed to levels beyond any imagination even a generation ago, the average inflation-adjusted income of the bottom 90 percent of earners was lower in 2008 than it was back in 1973!

The Republicans routinely try to undermine our public schools system in order to render the majority ignorant and therefore more pliable. The propaganda machine of right-wing radio, Fox News, Republican Governors, et al, have, since President Obama took office, succeeded in suppressing the vote, subjecting women to second-class status, and forcing laws upon 99% of us that do not apply to themselves. They've taken laws to such extremes that in states with Republican governors and lawmakers, women cannot even choose what is best for themselves and their bodies. All subjects that the unsuspecting in America thought were judged unacceptable just a few decades ago.

Since 2000, the median income of 99% of Americans has actually eroded. If this one factor alone does not prove that tax cuts for the rich do not create general prosperity, what in heaven’s name would it take to do so?

Today, more and more of the middle class does not have enough money to live on unless they go into either unwanted or otherwise unnecessary debt. For every dollar of equity individuals added via their home values from 1980 to 2006, they borrowed two dollars! And even if an equitable share of that is attributable to simple lousy decision making, that would leave a preponderant share to blame on the extreme challenge of merely making ends meet due to said erosion of their equity.

How soon we forget that 401(k)s were devastated in 2008. That hard-working, law-abiding, do everything right Americans were left homeless, retirement income-less, and damn near hope-less, at the hands of Wall St . excesses with other people's money. And the Republicans answer? LET'S DE-REGULATE THEM EVEN MORE!! HELL YEAH, THERE ARE A FEW MIDDLE-CLASS AMERICANS STILL SURVIVING!!! AND WE'LL BLAME THE REGULATORS.....AMERICANS WILL BELIEVE IT...THEY BELIEVE ANYTHING IF YOU SAY IT OFTEN ENOUGH!!

Our entire economy has been re-calibrated, primarily through bad tax policy, due to a Congressional obsession with their own re-election rather than service to the country. "Just take a little more from the poor and the middle class in order to give to the very richest of the rich. That will fix everything, I promise."

And to my utter shock and complete dismay, the presumed Republican candidate, Willard Mitt Romney, even has the gall to utter the same phrase that STARTED this downward slide......"Trickle-Down"! My Gawd people, are we really so completely and utterly ignorant to believe this?

In 2000, people making between $50,000 and $75,000 paid the same share of their income to the federal government as those making more than $87 million, and that those making between $100,000 and $200,000 were taxed more heavily than those making $10 million.

Thanks to “trickle-down” economic policies, we have encouraged the once-competitive industries such as oil or car manufacturing, and yes, even the news media to morph into unhindered oligopolies. We have slashed the ranks of  the auditors and investigators who were meant to keep  securities, food, drugs, medicine and industry competing honestly, and have so overworked the remaining few that they are ineffective at best, but more likely simply resigned to "doing what they can" and saying thy hell with it.

Republicans have convinced a large portion of America that bankers would self-regulate despite the massive destruction left byEnron WorldCom The Savings & Loan collapse, and the Real Estate collapse. If you want to see the mastermind in common, follow the history of Phil Gramm(R), Texas.

What used to be a laughable notion has become the fundamental nature of the Republican theory of effective government policy.  The results were as predictable as if we removed all gun laws on the theory that most gun owners are responsible, or simply removed all traffic lights under the assumption that drivers will act with courtesy, restraint, and responsibility to all others on the roads.

Come to think of it, we actually have let the NRA convince Congress that AK-47s are necessary for hunting naked, defenseless animals, while the rate of crime continues to rise despite more and more guns on every street in every corner of the country.

One by one, election after election, we sit and watch as our leaders strive to convince the average American that the fundamentals of our economy are strong but can be stronger if we would just take down a few more traffic lights that slow down those IPOs, or runaway Investment Banks, or whatever. What will it take for Americans to realize that despite coat after coat of new paint on our walls, termites are eating away at the foundation of our economic house and the walls of our hard-fought victories of equality.

I had personally hoped that there would be a coming of stark realization after 2008. I hoped that the economic crisis of 2008 would help all of America finally see the obvious causes of corruption, the hyper-partisanship, the inane repetitive finger-pointing, and that it would give way to new growth and good old principles of right and wrong.

Capitalism, The Correct Way

Moreover, I hoped that with the last collapse it would become obvious that Capitalism is great, but Capitalism unrestrained and unchecked is a recipe for outright disaster. As a student of economic theory for 25 years, I felt sure that American citizens would realize that we are only strong if we pull this wagon together.

The ONLY way a team of the most majestic Clydesdale horses will be able to pull even a small wagon is if they are pulling in the same direction! Otherwise, they will go nowhere until they inevitably pull each other from life and limb, or die. Except by pulling together, in the same direction, with the same purpose, they are forever broken in spirit and a mere shadow of what they could have been.

As I have stated before, Capitalism ONLY works if greed and avarice are offset by laws and regulations to prevent fraudulent and deceptive practices. Otherwise, the snake oil salesmen and Bernie Madoffs of the world will steal it all from those of us who actually want the best that be had for EVERY American. If the media televises any more primary election speeches, take a few minutes and look out into the crowd. Do the crowds really represent all of America? Of do they look more like old photos from the 1860s?

Free Markets are not created by profiteers who have been afforded the advantage of removing the inherent risks that promote the risk vs reward formula that evolve naturally. Free Markets do not flourish by simply removing the “risk” aspect by deceptive or fraudulent acts. And Free Markets do not flourish by subsidizing the favored business of the elected representatives who glean contributions from their lobbies. Flexibility and creativity is the hallmark and the cornerstone of capitalism’s longevity. Its main claim to success is its propensity to change in response to what ails it at any given time…but with safeguards to protect the consumers from abusive and corrupt practices.

By overturning Glass-Steagall with Gramm Bliley Leach, by passing the Commodity Futures Modernization Act of 2000, by the Supreme Court’s abysmal record of activism with rulings like Citizens United, we have opened more and more avenues of opportunity to those with the means and desire to abuse the freedoms of our economic system. There IS NO one-size-fits-all solution to economic theory. Economic policy has to meet the conditions of the times and circumstances...not vice versa.

To finish this article, please go to :

http://hg.scimth.net/2012/04/05/republicans-new-confederacy/

Thanks,

Harvey Gold