Saturday, April 19, 2014

Why Majorities Can't Rule (part three)

Our Constitution no longer does the main tasks it was meant to do: Balance power among the nation's constituent parts so that the people can enjoy ordered liberty, yet the nation is strong, peaceful and free.

The Constitution today mainly governs minor aspects of government: There shall be two senators from each state, etc. But our founding document's main task -- to put clear limits on government -- has simply been overridden by changes in the way we view government, and the way majority-rule government functions.

Look at today's news stories to confirm that. Each day the nation's fiscal liabilities grow; government on all levels expands its reach; government officials grab more power; and in most cases we the sheeple egg them on. Whether it's the NSA spying on us or Obamacare gobbling up the health care industry, there seem to be no limits on what government can do.

I would guess that most readers see this is so; I just thought I should underline it at this point.

Part of the problem, as mentioned previously, is that rationalism, secularism and Romanticism of the Revolutionary Era tended to undermine the classical and Christian elements that tended to restrain government and, as important, the people who make up the government. The further growth of secularism and scientism in the industrial age accelerated these trends. 

Majority rule is one problem. In our age, we instinctively feel that once we get 51 percent of the vote, we should rule. The obvious problem is: What happens when the majority wants something harmful or dictatorial?

But another crucial dynamic came into play: once restraints on government begin to ease, the mechanisms of majority rule dictate that government will metastasize in size, scope and power.

As in so many things, Hayek saw this in The Road to Serfdom. In a nation-state, there are no majorities. That means more and more power is handed off to the bureaucracy, even as the voters are bought off with government handouts.

That is, there are no effective, sustainable majorities about any specific actions about which there is major debate.

Aside from truisms, public opinion is splintered. A poll may say that 51 percent of the voters are in favor of X. But, let us say, 30 percent are strongly in favor of it, and 21 percent are slightly in favor of it. As an idea grows more specific, support splinters further. Of the 30 percent in favor of the general idea, 15 percent favor plan A, 15 plan B.

Moreover, that support is fluid. The fervent supporters may well grow cooler to the idea; opponents often grow more opposed. 

A poll may show a majority of voters in favor of cutting the deficit. But let members of Congress propose cutting popular programs, or raising taxes. Suddenly there will appear a new majority clamoring for those legislators to be voted out of office.

Also, as is plain, the minority's support may be far more fervent. The classic case is that of a special interest group that gets a subsidy, such as the wool and mohair producers.

In other words, in addition to the problems of rule by the 51 percent, there is the failure to even get 51 percent.

If I understand Hayek correctly, that means elected officials can't even count on the backing of a majority. Instead, they are battered on all sides by fanatical minorities -- who may have been fervent majorities the day before. To avoid this conundrum, they hand off the power to the bureaucrats.

Take the Affordable Care Act. We conservatives may much of the fact that "we'll have to pass it to see what's in it." But if this analysis is correct, Obamacare is an inevitable result of trying to get a majority to agree on health care for all Americans.

Of course no Congress could write a law that would be cover health needs so well and so fairly that it would be approved wholeheartedly by 51 percent of Americans. First, some voters (perhaps too small a group) don't want the government involved in health care. 

Then the needs -- and demands -- of us aging people are different from those of single young people, which are different from those of parents with small children, which are different from people with chronic diseases, and so forth.

And then there are probably an unlimited number of opinions as to the actual text and mechanics of such a law. 

Congress would never find enough support for any comprehensive health care law. That's exactly why Congress handed off so much power to the bureaucrats, and to the executive branch. The law grinds on, trampling over restraints on government.

This is just the most glaring example of how the U.S. government has expanded far beyond its constitutional limits. The checks and balances envisioned by the Founders have been overrun.

Next: Moreover, the problem is also generational, raising the question of whether the current generation can change things.

Monday, April 14, 2014

The Rise of Lincoln and the Erosion of the Constitution (Part Two)

Ages do pass away; sometimes we have a sense of foreboding.

From Max Hastings' Catastrophe 1914:

Historian Charles Masterman in 1909: Whether civilization is about to blossom into flowers, or wither in a table of deal leaves and faded gold ... whether we are about to plunge into a new period of tumult and upheaval or whether a door is to be suddenly opened, revealing unimaginable glories."

Austrian writer Carl von Lanf in 1914: "There is a feeling that events are in the air; all that is unpredictable is their timing. perhaps we shall see several more years of peace, but it is equally possible that overnight some tremendous upheaval will happen."

I'm still reading it; it's a troubling book for our times. Catastrophe can be there, right in front of us. It does not good to say our leaders should be smarter; they are who they are. And it's foolish to think we can always have good leaders; or that even good leaders can avoid catastrophe.

As per the last post, our Constitution had hardly been finished, when we began evolving away from the people who created it. (Historian Page Smith is my guide here.)

Conservatives like to decry Progressivism and the New Deal for subverting the Constitution. Of course that is so; but why did the Progressives succeed? Because they brought to the fore things that had been happening since the Revolution.

The Revolution unleashed the power of the people, as it should have. They, quite naturally, wanted to use that power. Meanwhile, rationalism and secularism began eating away at the traditions and beliefs that reined him human drives.

Also, as Smith points out, after the Revolution the winners drove many of the Tories out of America, or at least out of public life. That greatly diminished a segment of society that naturally represented order and tradition. 

That is what the American Revolution did on all levels. Although the modern cliche is that the American Revolution was largely a product of the mercantile/ruling class, yada, yada, yada, in fact it was the most radical revolution in history. The French Revolution tried to merely replace one order with another. We wiped them all out.

Every previous society in history had some kind of official religion; we forbade it. Every other society has had clear social classes -- formally recognized as such in every country I can think of. We had none, and we banned the creation of them. Even George Washington caught flak because a group founded by former Revolutionary War officers sounded too much like a fledgling aristocracy to American ears. All societies have traditions; but America began by dynamiting them all. We could light out for the territories, and act the way we wanted to. We didn't change when civilization at last filtered in.

There was nothing to resist the tide of thought that was, at its base, forward-looking, secular, pragmatic, and in a sense Romantic. The people of the young Republic quickly chafed at the limits imposed by the Constitution. And when necessary they rebelled against it.

Now Woodrow Wilson et al get a lot of the blame -- but could they have done anything unless public sentiment was with them.

Take a change in the Constitution that dismays many conservatives: the direct election of Senators. The Founders wanted state legislators to pick U.S. Senators as a check to the pure will of the people. In many ways, the Constitution, as has been said, was meant to pour public opinion out into a saucer where it could cool.

But that began to crumble not under Woodrow Wilson, but with Abraham Lincoln, and before he or anyone thought of him as a presidential possibility. (I'm doing this off the top of my head. Let me know if I err. All errors are mine; I should note my favorite Lincoln bio is William Lee Miller's Lincoln's Virtues.)

The year is 1854. The slavery question has suddenly broken out. Political alliances are shifting, and shattering. Lincoln, who had been drifting away from politics, is galvanized into action. He makes his first great speech. In his home state, Illinois, he supports politicians who are opposed to the extension of slavery.

But he doesn't campaign for himself. Nor does anyone else campaign directly for the Senate. There's no point in doing so. The next senator will be elected by the Illinois Legislature. So he works for those fighting the extension of slavery, and lobbies quietly for support.

The Illinois House and Senate meet in joint session early in 1855: 100 lawmakers. First candidate to get 51 votes is the next U.S. Senator, which is the job Lincoln always really wanted.

 Lincoln gets 44 votes on the first call. Looks good. As the votes go on, however, he can't get over the hump. Then his total began to decline alarmingly. It looks as if some legislators have cut a deal with a former governor whose anti-slavery credentials are a bit slim. Finally, to keep that from happening, Lincoln asks his supporters to vote for another hopeful -- who got a mere five votes when the voting started. That man is elected, and Lincoln heads back into the political wilderness.

Can it get much more obvious than that? Here we have one of our greatest leaders, and the state legislature doesn't pick him. Moreover, the whole deal reeks of log-rolling and political backstabbing. To us that sounds bizarre and unjust. Can you imagine Americans of 2014 standing for that? I can't.

It doesn't sit right with the people of the time, either. The next U.S. Senate race in Illinois was 1858 -- famous for its debates between Lincoln and Stephen A. Douglas.

But it's also famous for another development. By this time Lincoln had helped form the Republican Party, and made himself its statewide leader. When county Republican organizations met that year prior to the election, they all proclaimed that their "first, last and only choice" for the Senate was A. Lincoln.  When the Legislature met after the election, Republican lawmakers followed those orders and cast their ballots unanimously for Lincoln. Meanwhile, Democrats cast their ballots in unison for Douglas. 

Illinois had turned the legislature to a sort of electoral college for the Senate.  If the Progressives pushed through the 17th Amendment, instituting direct election of senators, they were responding to popular sentiments that became evident fifty years earlier. 

We are no different. Does anyone want state legislators picking U.S. Senators? I doubt even conservatives really want that. 

One poll found that only 16 percent of respondents would favor repealing the 17th Amendment. The poll was commissioned by liberal groups, but I find it hard to imagine anything close to a majority favoring giving legislatures the power to pick U.S. senators. We want to pick our own cellphones and entertainment and clothing, and expect to get exactly what we want. In 21st century America, we're not going to let some state lawmakers pick our senators for us.

Modern conservatives are if anything those most mistrustful of powerful figures. Conservatives would howl if a legislature overrode the sentiment of the voters -- if of course voters wanted a conservative.

This is just one example of the evolution of our constitutional age. Leaving aside the pros and cons, having the legislature pick senators was part of the balance of powers within the constitutional system.  But modern people don't want a balance of powers; they want the power. The changes are not as progressive or liberal plot; it's the way most Americans think today.

This is not to say the constitution is outdated, in the sense that it is merely too old. Our constitutional order is the best system yet imagined for securing ordered liberty, simply because it does balance out power..  But We the People have changed in ways that make us unwilling to live under such a system. Rather than balancing groups against each other, we want our group to win. Rather than balancing interests, we want our interest to prevail. We don't even want to fight about it; we want the other interests to prevail too.

Ah, but shouldn't the majority rule? The problem is: It never can.

Next: Why the majority always founders.

Previous: The End of the Constitutional Era

Sunday, April 6, 2014

America Faces the End of the Constitutional Age

In The Lord of the Rings, the age of the elves and wizards is passing on to the age of Men. For us too, ages pass. The age of the classical world gave way to the medieval world, then the Renaissance, and on to the modern world.

In America, the Colonial Era passed into the Constitutional Era. That last era is drawing to a close, for better and worse. To understand what that means, let's look at the beginning.

Pull out a dollar bill and look at the back. There you'll find the Latin phrase "novus ordo seculorum." It is often translated as "a new order of the ages." The same motto is found on the Great Seal of the Unites States. Americans have always thought the rise of our Republic heralded a new age for humanity, and we were right, though not always for the reasons we meant.

Yet in looking back it's clearer that our notion of constitutional order grew distorted and weak very shortly after the founding. It should be no surprise that such an age is guttering out; the surprise may be in how long it lasted.

Historian Page Smith drew on "a new order for the ages" for his classic book on the American Revolution, "A New Age Now Begins." One of his key insights is that the Revolution took place as one age was segueing into a new one.

The Founders drew on Christianity; the rationalism of the Enlightenment and the classical era. Smith underlines the Founders' classical mindset: an inherent respect for tradition; an understanding of limits we face; a respect for tradition; a cool-eyed appraisal of human beings at all levels of a culture; and perhaps above all humility about humankind's place in the cosmos and its ability to solve problems.

Also, there were 13 states. Note these were not provinces or administrative districts, but states, as Bundesrepublik Deutschland (Federal Republic of Germany) or People's Republic of China are states. 

In much the same way, North Carolina, Massachusetts et al considered themselves separate nations. Until the Civil War, "the United States" was often considered a plural.  The founders took it for granted that such a tension among 13 sometimes jealous little nations put healthy restraints on government and on ambition.

But even as the founders put the capstone on that vision with our Constitution, a newer age was breaking out in France. Classicism, Christianity and rationalism lost their power. Romanticism replaced reason. Leaders were no longer those naturally produced by a social and economic structure, but those who most enthralled or incited 51 percent of voters. Human beings scorned the idea that improvement was gradual and fragile; they began to believe progress could be and should be dramatic, constant and inevitable. Humanity, rather than being viewed with a healthy respect and even healthier mistrust, became its own idol. Tradition, rather than an edifying product of evolution, was derided as a plot against happiness. The idea of limits itself was belittled; there was nothing we couldn't do -- and if we couldn't do it, then some dark conspiracy must be at work.

Even in the United States, the forces set in motion by the revolution began quickly to eat away at the idea of government restraint. The Founders were obsolete before they were in their graves. Their America was succeeded by a secular, rationalist age that wanted the people to rule without limit -- which eventually mean government without limit. It is one of history's useful symbols to note that Thomas Jefferson and John Adams died on July 4, 1826, and Andrew Jackson was elected president in 1828.

This is not to say that the Age of Jackson and his successors was in all ways a bad one; but it was one that was contrary in spirit to the Constitutional Age, and eventually to its workings. The structures of the Constitution began to crumble, even as the spirit behind it changed.  And that dooms the order the Constitution heralded and upheld.

Next (i.e., when I have some spare time): The Constitution Evolves Away

Tuesday, April 1, 2014

The AGE of Nutritional Caution

In the barroom brawl between fats, carbs and protein, are there any winners?

The latest health news is that there's no apparent link between saturated fat and heart disease.

Gary Taubes has a brilliant exposition of why carbs are the real culprit in ill health.

I also came across a fascinating piece:

Apparently, cancer has an appetite for glucose that is three times that than of other cells; .... This rapid ingestion of glucose leads to the secretion of lactic acid which decreases cellular pH and — here’s the aha! moment — that’s what encourages metastasis. ...Cancer, it turns out, craves carbs. Typically, the maleficent Western diet is made up of over 50% carbohydrates and only 15% protein. Protein has a unique capacity to enhance a body’s immune system but most of us don’t get nearly enough of this essential nutrient. We love our fats, however, but the wrong sort of fats in the wrong amounts can also prove deadly.

The hypothesis is that our body may fight off several cancers in our lifetimes; the cancer that kills us is one we inadvertently feed -- with carbs. Protein, on the other hand, builds our immunity.

And a companion  piece reiterates:  "... .cancer craves carbs and metastasis is encouraged by the pH changes that accompany high cellular glucose combustion."

Even veggies may not be panaceas. A new study suggests vegetarians have poorer health, and a poorer quality of health, than carnivores.

Case closed?

First, here's been some push back against the research that dismissed the dangers of saturated fat. 

And what if there are other culprits?

One is foods with lots of advanced glycation end products -- AGEs, an apt acronym. These food products have been linked to diabetes and heart disease, according to research:

Modern diets are largely heat-processed and as a result contain high levels of advanced glycation end products (AGEs). Dietary advanced glycation end products (dAGEs) are known to contribute to increased oxidant stress and inflammation, which are linked to the recent epidemics of diabetes and cardiovascular disease. .... Animal-derived foods that are high in fat and protein are generally AGE-rich and prone to new AGE formation during cooking. In contrast, carbohydrate-rich foods such as vegetables, fruits, whole grains, and milk contain relatively few AGEs, even after cooking.

AGE-rich foods have also been linked to dementia.

The good news: the effect of AGEs can be reduced by cooking with less heat, moist cooking (as in boiling or steaming), or marinating or cooking with acidic substances such as vinegar or lemon juice. 

The bad news: some really tasty foods -- isn't this always the case? -- are rich in AGEs. The first study cited above on AGEs says that, per serving, bacon has the most AGEs -- more than a Big Mac or a broiled hot dog or a steak fried in olive oil or fried chicken.

Pizza, by the way, is also fairly high on the list. A brown crust is also a clue that AGEs are present.

By now I'm confused. But the above scares me enough to be alert to changing things. Some of my protein is in whey shakes with a raw (pasteurized) egg added. Recently with hamburgers I've been sauteing them with a little water. They come out juicy, so that's good.

In any case, it's a matter of balance. Protein has great value; even so, some caution might be in order. It might be worth sprinkling a little lemon juice on that chicken breast, and slowly simmering it in wine sauce might not be a bad idea, any way you look at it.

The fact is, in our unstable world, we have to stay in shape. We don't know what's going to hit next. We need protein for muscle and to stay healthy. And with Obamacare, you really want to stay healthy. And since we might be in the for the long run, we might want to be careful how much roasted and broiled meat and crusted pastry we we eat.

Sunday, March 30, 2014

What Will Conservatives Do?

Is the conservative movement hopelessly divided or unsure about its goals and how to achieve them? Or is it in the midst of great creative ferment that will bring a new, stronger freedom party to life?

I work for the Civitas Institute, which just put on its Conservative Leadership Conference. This is my own personal take, based on those parts of the conference I happened to see. I do think, however, I saw enough to note that we are still wrestling with basic questions any movement in a democratic republic must face.

Consider the basic question about whether we are about the individual or the community. Jason Lewis, the talk show host, said, "I've never heard of a community that wasn't made up of individuals." This is closer to the libertarian viewpoint.

And isn't that what America is about? That here we have the opportunity to shape our own lives, without undue interference from anyone else.

Yet is that enough? John Papola is best known for creating those hilarious "Keynes vs. Hayek" rap videos. His skill at putting conservative ideas into a modern format makes him someone worth listening to. He, however, placed the accent more on community: ""We exist in community," he said "We leverage each other."

This is closer to the conservative views that show up perhaps strongest in Burke:  Our freedoms and well-being have their foundation in the ties that we have built up in civil society: Families, churches, labor unions, social and charitable organizations, and the mores and habits that undergird our societies. "Freedom is about togetherness," Papola said.  "It is about building real community."

Big Government, however, "sandblasts that away," he said. Big activist government destroys the civil society that enables us individuals to be free. See Nisbet's The Quest for Community. We have to band together to fend off big government.

Nevertheless, it could be argued, we need to think about individuals first to fend off the Hive mentality. Walter Williams often made his points, in the keynote Friday, about how things affected us as individuals. If we are talking about freedom, isn't that where it begins?

Which brings up tone. Williams' bluntness seemed to be strong medicine to even our conservative audience. Ann Coulter on Saturday was, of course, even blunter. 

Bill Frezza, of Real Clear Radio Hour, was adamant that harsh rhetoric -- at least harsh to the unaffiliated people who don't much care for politics -- "makes people close their ears." 
It allows "the Left to make demons of us."

"Why now?" he asked. There's an important election in the fall; and a crucial one two years from then. Win people over with humor and with stories; reach out to people; connect with their genuine and well-deserved anxiety about the economy. Save the hot-button issues for later.

And isn't that in line with the freedom agenda? Matt Kibbe, of FreedomWorks, said that one of his rules for liberty was, "Mind your own business." So should we conservatives mind our own business?

Yet, do desperate times call not only for desperate measures but desperate language? Williams put forward this thought experiment: Bob takes a gun and holds you up for $200 to buy food and clothing for a homeless woman down the street. The IRS takes $200 of your income for the same end, on a vastly larger scale.

"The first is illegal theft. The second is legal theft," he said.

In the same vein, he said, "Most Americans believe … in the forcible use of one person to serve the use of another. Indeed, that's the same as slavery."

Too harsh, especially for the ears of the unaffiliated? Or necessary hyperbole to jar us out of our complacency? Or, simply the truth, put in a form we rather would not face?

On the other hand, the old Al Davis football adage comes to mind: "Just win, baby." We conservatives should, of all people, understand the world is imperfect. We should understand we don't want utopia, but the best nation we can can reasonably hope for. It took us a century to get to this situation. But we can't afford to lose in 2014 and 2016. Do we need to downplay things the unaffiliated aren't ready to hear -- so we can win, baby, win?

Yet, are these tough issue more important in the long run than an election, or even a budget?

I don't know the answer. I'm not even saying this is a problem. This kind of frank debate is a symptom of a healthy movement. Yet much hangs in the balance. Also, this is a mid-term election. Turning out the base may be the key, as one audience member pointed out in a session I was at. For 2016, however, with more people tuned in, conservatives and our libertarian friends, and unaffiliated voters who share our anxiety about the economy and the world, will need find some synthesis we can all get behind.

I'm a Lincoln nut, but I can't resist pointing out he rallied racists and abolitionists and the great mass of ordinary people behind a cause. Or FDR, who cobbled together Southern segregationists and northern liberals. It can be done. But we need the plan, and the person, to do it.

Tuesday, March 25, 2014

Ulp Alert: the Financial Report of the United States

If there were any sense or even sanity in our time, the 2013 Financial Report of the United States  would have driven other news completely off the screen, and the whole nation would be in a frenzy to seek solutions.

But of course the main news media ignore it. Apparently most of us do too. Perhaps that is for self-preservation. Maybe a normal mind can't cope with the reality of the latest report.

As some in the new media (such as Hot Air) noted, the report, though it leads with soothing platitudes and was prepared by apparatchiks in the administration, makes it plain that the nation's finances are  plunging straight downhill. A slight improvement in the annual deficit only masks the fiscal horror.

Looking at the summary -- I'm a journalist by training, I have to go slowly -- I got my first shiver when I read about the assets.

As of September 30, 2013, the Government held about $3.0 trillion in assets, comprised mostly of $1.0 trillion in net loans receivable (primarily student loans) and $896.7 billion in net property, plant and equipment. Other nontangible assets of course include its ability to tax. But, as many have pointed out, you could tax the 1 percent into poverty and only make the slightest dent in the national debt.

Look closer at the assets. So a big chunk of the nation's assets are the future earnings of those art-history baristas who will pay back their student loans on the first of Never, Eastern Fantasy Time.  

Another tense moment occurs when you get to the liabilities report.

The $19.9 trillion in total liabilities is comprised mostly of: (1) $12.0 trillion in federal debt securities held by the public and accrued interest2 and (2) $6.5 trillion in federal employee and veteran benefits payable. 

Note this (minus the "assets") makes up the $17 trillion debt that is often tossed around. To round things in the government's favor, let's say you had assets of $300,000. OK. But what if nearly $90,000 of that was IOUs from your nephews and nieces that have trouble finding full time work. Suddenly that doesn't sound so hot. Then, what if you owed $1.9 million? That doesn't sound so hot, either.

And what if you had other liabilities -- amounting to millions more?

For the above $17 trillion of course it doesn't include Medicare, Medicaid or Social Security. Though the Financial Statement has some cheerful whistling about how the Affordable Care Act will reduce medical costs -- just as, we may suppose, it will allow you to keep your health plan and doctor -- eventually it has to confess:

Between 2022 and 2037, however, increased spending for Social Security and health programs6 due to continued aging of the population is expected to cause primary surpluses to steadily decline and become a deficit starting in 2029 that grows to 0.8 percent of GDP by 2036. 

It also confesses that the  debt-to-GDP "ratio was 72 percent at the end of FY 2013, and under current policy is projected to be 69 percent in 2023, 112 percent in 2043, and 277 percent in 2088. The continuous rise of the debt-to-GDP ratio after 2023 indicates that current policy is unsustainable."

In other words, in the government's official report, with the best possible spin, the nation is headed into a fiscal catastrophe.

There's a way out, of course. Let's go back to thinking of this in household terms. You could economize. But what if you and your spouse simply can't agree what to cut, or you can't bear to part with some of the luxuries you've become accustomed to?

The Financial Statement notes:

It is estimated that preventing the debt-to-GDP ratio from rising over the next 75 years would require some combination of expenditure reductions and revenue increases that amount to 1.7 percent of GDP on average over the next 75 years.

As the Hot Air post above points out, that bite grows a bit sharper every year, because it's a steady 1.7 percent reduction of a shrinking total GDP.

Note that this means the government can't just reduce the annual deficit; it can't merely break even. Rather:

It is noteworthy that preventing the debt-to-GDP ratio from rising over the next 75 years requires that primary surpluses be substantially positive on average. This is true because projected GDP growth rates are, on average, smaller than the projected government borrowing rate over the next 75 years. The implication is that debt would grow faster than GDP if primary surpluses were zero on average. For example, if the primary surplus was precisely zero in every year, then debt would grow at the rate of interest in every year, which would be faster than GDP growth.

Have you seen any candidate who has promised to run surpluses? As the Financial Statement points out, it isn't a matter of  shutting the Department of Education, though that wouldn't hurt anybody. Nor is it a matter of cutting foreign aid, as Kevin Williamson recently pointed out. It's a matter of cutting Social Security, Medicare and defense. The attack ads could be written by a robot: "Candidate X wants to cut your Social Security." "Candidate Y wants old people dying in the streets." Of course, the real fear is: Candidate Z will force your mom to move in with you.

In short, these are terrifying statistics. Plus, there are plenty of hints that these statistics are what's left over after the real statistics have been fudged, sanitized or even plain made up.

This is from the summary:

As it has for the past sixteen years, GAO issued a “disclaimer” of opinion on the accrual-based, consolidated financial statements for the fiscal years ended September 30, 2013 and 2012. GAO also issued disclaimers of opinion on the 2013, 2012, 2011, and 2010 Statements of Social Insurance (SOSI), following an unqualified opinion on the 2009 SOSI, and a disclaimer of opinion on the 2013 and 2012 Statement of Changes in Social Insurance Amounts (SCSIA). A disclaimer of opinion indicates that sufficient information was not available for the auditors to determine whether the reported financial statements were fairly presented in accordance with Generally Accepted Accounting Principles (GAAP). In FY 2013, 322 of the 35 most significant agencies earned unqualified opinions on their financial statement audits.
In other words, even another government agency won't vouch for the numbers we are supposed to rely on -- this year and for the past 16 years.

The whole thing reeks.

Sunday, February 16, 2014

Call it Envy or Inequality, our Time Grows More Unstable

When writers in two reliably conservative publications raise the alarm about inequality, it's time for conservatives to wake up to the dangers of an apparent widening gulf between those at the very top and the great majority of people.

In the Wall Street Journal, William Galston says we need a new social contract to ensure productivity is linked to compensation. (I'm speaking from my recall of his piece, which is behind a paywall.) I'll put it this way: workers are being lashed to do more and more, but, obviously, many are treading water at best.

In Forbes, the insightful Joel Kotkin notes that the "biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status."

Some of the left's critique is hooey. It's not at all clear that the growth of the super-rich is a cause of inequality, rather than just a side effect. I recall reading somewhere that the best period for wealth equality in the last hundred-some years was the period between roughly 1929 and 1945, which was not exactly a fun time.

Some of the debate is a distraction from other other issues, Robert Samuelson recently wrote.Still, the trends are obvious and worrying. Let's face it, when the world contains not only the rich but the ultra-rich, we have to at least re-examine what is happening. As many have said, democracy only functions if we agree we're all in the same boat.

Of course no society can be entirely "equal." That word has no meaning beyond a certain point. Yet when there is a gulf between the middle class -- the yeomanry, as one of the writers above puts it -- the structure of our polity becomes strained. And perhaps to the breaking point.

To my fellow conservatives who are complacent about this, I have two words: George Soros. It is by no means clear that the ultra-rich, as a class, are friendly to conservatism.

Indeed, once "classes" become an important factor, conservatism is threatened. One of the strengths of a democratic polity is that there are no huge imbalances within it.  This is Burke's point: Every group and individual has a role, rights and responsibilities, which balance to some tolerable degree.

The majority of people do not feel desperate; they feel they can achieve their goals in life, more or less, thus feel at ease about the wealthy and powerful. They feel that there is a balance of power in society, with individuals, communities and groups all having a more or less reasonable status. In America, moreover, there has long been the belief that one could rise if one wanted to. 

Another way to put it is that a balanced society keeps envy at bay. Let us not dismiss the reality and power of envy, either. (Henry Hazlitt I think talks about this.) Conservatives recognize the realities of human life. One of them is envy. If the ultra-rich incite too much envy, the results are predictable and dangerous.

Another reality of homo sapiens at this stage of our evolution is that if you don't allow the  people as a whole their fair place and share, and hope for the future, they will think of other ways to achieve their share. That won't be a fun time either. 

Of course, stability isn't everything. A too-stable system stagnates, and creates its own problems. That's the genius of modern conservatism. The trick is finding the right balance between change and stability, inequality and equality. Right now, inequality seems to be growing. 

Perhaps the problem seems worse than it is. Perhaps. But conservatives must reckon with it, if only to find and address the real problems of which "inequality" may be only a symptom.This is not to predict anything. It's just to note that riding apparent instability means the system is unstable. (Check out Antifragile.) 

When and how that instability strikes cannot be reckoned. It might restabilize as part of forces we don't understand or can't foresee. Or instability may hit cataclysmically next week. Or so gradually that we may not even notice, and it will only become apparent when historians look back.

But however real or apparent, inequality is at least a symptom of unstable forces at work. Our era is being changed by forces we only dimly understand, or even see. It's urgent to look for and understand them, before these instabilities weak havoc.