By William Neil
I now live in the heavily Republican area
of the Western Maryland mountains, which are closer in the gritty facts of
harsh economic life to West Virginia than to those of affluent Montgomery County, the “engine” of
the Maryland economy, and where I used to live, but can no longer afford to.
Our region has been consumed over the past
few months by the campaign to stop fracking, and I’ve been getting itchy to
write about the broader context of the political economy in which it takes
place. After all, Maryland’s new
Governor, Republican Larry Hogan, successfully beat the much larger Democratic
political machine by revving up the classic Republican Right ideology of
Austerity, not much different than Reagan’s older rhetoric which captured the
presidency in 1980: anti-regulatory,
anti-tax, anti-government, pro-free markets. That formula, before it was called
“Austerity,” was designed to deliver a permanent crisis in government by
denying it revenue, thereby forcing cuts in spending in non-defense areas,
because, let us not forget, this
philosophy insists on balancing budgets no matter what the broader economic
circumstances: financial panic, recession, depression, no matter, the Republican Right wants to dance
on Keynes’ grave in a Dionysian attempt
to create the conditions which will restore business “confidence.” This is one formula for “all seasons,” in
other words, and one which has become the dominant economic ideology in much of
the West. But if you understood the
meaning of Thomas Piketty’s book, Capitalism in the 21st Century,
you have to ask, how much more of the national wealth will businesses demand
before they feel confident and deliver the goods: jobs for all?
The American maldistribution of wealth now approaches that of the late
1920’s, just before the crash, and it was rising throughout the Gilded Age of
the late 19th century, when it was bad enough. And since we are living in the second great
age of Globalization, the first being 1870-1914, there is no guarantee that
further gilding of CEO’s pay will produce the jobs, or if it does, they will be
in our own nation.
There is a particularly German variety of
Austerity, which dominates the economic views in the key financial institutions
of the increasingly shaky European Union, and which has driven the citizens of
Greece to the economic wall. Germany
ideology presents a complication for American minds, doubtless, since isn’t
this the same Germany of national healthcare, strong unions and environmental
vision, supposedly a social democracy at
odds with American’s vaunted “exceptionalism,” the one based on heroic individualism? Well, that’s a complex story for another day,
but for now, please note that what happens between the Greeks and the Germans
in the ongoing negotiations is being watched very carefully in Spain, and in
Italy, since the Syriza party’s coming to power in Athens in 2015 represents
the first successful left electoral challenge to Austerity, something the existing
supposedly “leftist” socialist/social democratic parties in France, Spain and
Great Britain haven’t been able to manage.
The issues the Greeks in Athens are struggling with do have something in
common with those in Annapolis, even though Greece is in the equivalent of the
American Great Depression, but is being denied the tools that we ourselves used
in the New Deal to help pull ourselves out: debt forgiveness and creative
government job programs.
Did Maryland voters who elected Larry
Hogan have this in mind when they supported him in November of 2014? He claims they did and he has a decent claim,
based on the values he talked about in building his organization. If you
listened to his speeches in the early going this year, all the classic tropes
of the Republican Right and the Austerians were there, given added power, as
always, by the legal requirement that the state’s budget must be balanced, with
an additional fiscal vise being supplied by his party’s tax and fee rollback
pledges. Greece is like an American
state in its relation to the European Union: it doesn’t control its own
currency, it must use the Euro and it already had a huge government deficit
heading into the economic crisis caused by European bank lending to those
terrible, lazy southern periphery countries, the PIGS (Portugal, Italy, Greece
and Spain.)
There is a personal side to this for me,
though, which makes the Athens story mesh more closely with the one in
Annapolis: the chief Greek negotiator, economist Yanis Varoufakis, has
published two powerful essays about democracy and economics at the American
website run by Yves Smith, at Naked Capitalism, and I commented heavily
upon the democracy/Internet focused essay, and it turns out that Varoufakis and
I had been reading and thinking along similar lines without ever knowing
it. (The links will be provided at the
end of this introductory essay.) It
turns out that American economist James Galbraith has also been working with
Varoufakis in formulating a way out of the Austerity traps Greece is in, and he
is one of the three authors who drew up an intellectual outline of solutions
based in good part from the American New Deal, adjusted for the realities of
the institutions of the contemporary European Union.
Now it just so happens that a
Letter-the-Editor appeared in our regional newspaper, The Cumberland-Times
News on April 7th which breathlessly, in about 300 words,
described the distributionist evils of the big government sprung from
Progressivism, the New Deal and LBJ’s War on Poverty. Those programs have illegal origins, the
writer, Jim Hinebaugh of Maysville, West Virginia, says, because the American
Constitution, properly understand, does not authorize any of these activities, which are essentially public charity
undertaken with “other people’s money.”
In contrast, the more modest view of the 19th century based
on private property, was much more respectful “of the life, liberty or estate
of another.”
What is most interesting to me about his
letter is not only its attack on progressive economics, but his “strict
constructionist” interpretation of our brief founding Constitution, which his
very idealized version of the 19th century understood correctly ,
but which we on the left get so wrong. In
responding, I could have chosen to focus on this Republican Right “originalist”
Constitutional theme, but instead I chose to sketch a very different picture of
life in 19th century American, to illustrate how a larger governmental
response grew logically out of a response to repeated disturbances. This is a century I have been increasingly
reading and thinking about precisely because it is the Heavenly City of today’s
Republican Right and if they ever get us there it’s going to turn out to be the
same destination as the one in Nathaniel Hawthorne’s cautionary 1843 tale of
illusionary, technology driven material progress (the impacts of railroads
especially), portrayed in the short story, The Celestial Railroad. With just a little stretch, environmentalists
can insert global warming into Hawthorne’s warning, driven by now worldwide
visions of “middle class life” coming at an ecologically catastrophic cost, in
Hawthorne’s terms, a worldwide Vanity Fair of pretense with terrible secular consequences.
And so that is how I came to write the
rebuttal Letter-to-the-Editor which appeared in the lead “guest” slot this past
Sunday (April 12th). I’m
giving you, at the end of this essay, the full version I originally submitted,
some 1500 words, which was edited down by me at the suggestion of the paper’s
editors. You’ll also get the full letter
by Mr. Hinebaugh, so you can appreciate where the Right is coming from in his
own words. And as a check on my
“translation.”
I want to use these conservative assertions
about the 19th century’s virtues and my objections to it to help
create the context, the intellectual and policy background, for the coming
American Presidential race in 2016.
That’s an election, where, just to be clear, I’m not happy about the
choices I seem to be facing, their “inevitability” in one case, and their
uniform location on the Right in the other. To paint that canvas, I need a little more space
than that allotted in “Letters-to-the Editor” formats. So bear with me.
There is a great dichotomy building in
American life today, and it grows from the deepest assumptions about the role
of government in American economic life.
You can see the outlines in the exchange I had with Mr. Hinebaugh. The heart of it is this: a minimalist
national government will be straightjacketed by a “literal” reading of the
original constitution, and we will all be subjected to the waves of creative
destructions unleashed by the constantly churning private sector, whose power
will be presented as omnipotent. A
longer version of this schizophrenic “dream” reads like this: the Republican Right wants to return us, via
their strict constructionist view of the Founder’s intent in writing the
Constitution, to the same weak federal state that they say characterized the
great 19th century, a century when we didn’t have a regulatory
state, environmentalists, powerful labor unions or consumer movements, or a
vast printing press at the Federal Reserve.
With these countervailing powers
out of the way, and taxes reduced by the ever shrinking government, the average
citizen will have to face the awesome power of modern capitalism alone. Apparently the expectation is that each
citizen will be as strong and resourceful as James Fenimore Cooper’s
Deerslayer, and as morally upright. But instead of shooting deer at incredible
distances and rescuing Indian captured maidens, we will all be founding small
businesses – nearly as heroic an act. The fact that Mr. Hinebaugh totally ignores
the vast concentration of private power, national wealth and income that had
been accumulated by the Robber Barons and their trusts by the late 19th is an
astonishing feature of his assertions.
It is as if no abuse ever came out of this system of private property
which is the foundation underneath capitalism, the real name of our economic
system. Lord Acton’s assertion that
“power tends to corrupt, and absolute power corrupts absolutely” I have always
taken to be a human universal, applying wherever too much power is accumulated,
and I still do. (Feminists might ask why
I left out the next sentence from him: “Great men are almost always bad men.”
It’s because it’s less convincing than the first two, and I wonder if they
would think it would apply to great females.
Are we about to find out?)