Learning from the Secret of FDR's Success

The conventional line on the New Deal is that FDR captured a generation with his New Deal programs. Sure, they didn’t all work, but they gave people hope.

Not exactly, writes Michael Barone. What put FDR into the pantheon of national heroes was World War II.

In 1938 the Democrats suffered a meltdown.

In the 1938 off-year elections, Democrats lost 81 House seats, 51 of them in the industrial belt from Pennsylvania and Upstate New York west to the Upper Midwest. The Democratic governors of Michigan and Ohio were defeated for re-election. The congressional district that included Flint, Mich., site of the first sit-in strike, went from Democratic to Republican; so did most congressional districts in Ohio.

The 1938 elections didn’t return the Congress to Republican control but the 81 seats that changed hands almost wiped out the 92 seats that had gone Democratic in the 1932 election.

So the Republicans were looking good for 1940. But then along came World War II and Americans decided to stick with FDR. A whole generation went to war, and found that government could get things done. Then they went home and got an education on the GI Bill. Hey, government really worked for those people, so they went to work and voted Democratic. After all, they had benefitted from government programs. They owed the generations coming after them and wanted to give them a helping hand.

So what? What does that have to do with today?

I think that the Democrats are completely misreading the American people if they think that it’s time for a New New Deal. And they are kidding themselves if they think that the American people are going to swallow the stimulus package. Today’s Americans—outside the political looter class—don’t think that government works. They don’t think that Senator Harry Reid (D-NV) and Speaker Nancy Pelosi (D-CA) are noble public servants. And they will soon start to think that President Obama is just the President of the United States and not a hope-and-change phenomenon.

The Democrats have been playing a high-stakes game with the American people. They insisted that President Bush was uniquely stupid and that Republicans were corrupt and dominated by the right. They, the Democrats, were the friends of the middle class.

That’s all fine and good. Everyone gilds the lily when running for office. But when you actually get elected you really ought to at least go through the motions of pretending that you meant all that stuff.

But no. The Democrats arrived in Washington last month thinking that they were at First and Goal rather than First Down on their own 20 yard line. So they nominated a bunch of lobbyists and tax cheats to the cabinet. So they passed a “stimulus” bill that shovels money at people already in receipt of staggering amounts of government spending. So they shoved through a partial repeal of welfare reform.

Here’s a fearless prediction. I’ll bet that very few centrist Obama voters thought they were voting for a repeal of welfare reform. They are really going to get a shock when Republicans tell them that their Democratic congressmen voted to turn back the clock on welfare.

Recalled to Life

Remember “Recalled to Life?” It comes from A Tale of Two Cities, Charles Dickens’ romance about the French Revolution. The phrase referred to Dr. Manette, imprisoned in the Bastille and now released.

For years Republicans and conservatives have felt a bit like they were imprisoned, or at least uncomfortably shackled.. The long withdrawing roar of the Bush administration and the cold-cock politics of the Democrats put decent, common-sense reform in the meat locker and sadly depressed Republican morale.

But now, in a short three weeks, the Obama administration has Recalled the conservative base to Life. In the lobbyist-fest of the Cabinet nominations, in the pork-fest of the stimulus bill, in the stealth repeal of welfare reform, we are reborn. Thank you, Mr. President, we needed that.

Now we know. There is no Hope. There is no Change. There is nothing to Believe In. It is back to business-as-usual. The Obama administration is giving the clearest signal you can give that the Democrats have not changed. In fact, they are beside themselves in pent-up frenzy after having to pretend throughout the Clinton era that they were really “new” Democrats who weren’t at all like the McGovern Democrats of the 1970s or the San Francisco Democrats of the 1980s who always “blamed America first.”

After years of patient message management and brilliant tactics the Democrats got the American people to believe that they were the party of the middle class and that the Democratic Party was a center-left party and that the Republicans were dominated by the right. You gotta say: they did a remarkable job with that message.

But now it looks like the Democrats under President Obama, Speaker Pelosi, and Majority Leader Reid are throwing off the cloak of invisibility. Underneath all that rhetoric they are liberal Democrats, and that means they believe in the neo-feudal welfare state and its huge patronage systems. They are building a land of great fiefs, vertical hierarchy, and a sea of helpless peasants.

Back in November, I voted for Barack Obama because I thought that, after four years of the Democrats in power, the American people would be ready for a Republican age of reform. Silly me. How wrong can you be?

It’s beginning to look as if the American people will be ready for Republican reform in about another month.

So I think I’ll take time this weekend to make my first contribution to Sarah Palin’s new PAC. Money, said Jesse Unruh, a California sate politician, is the mother’s milk of politics.

But isn’t this all too much too soon? Not really. Here’s the Four Step program I see in the months ahead.

1. Energize the base.
2. Start the money flowing.
3. Organize.
4. Start a conversation with the American people.

So let the games begin!

The Stealth Repeal of Welfare Reform

It is cruel, Mr. President. It is corrupt. It is wasteful, it is unjust. And it is delusional.

What I am talking about? I am talking about the reports from Benjamin E. Sasse and Kerry N. Weems, Mickey Kaus and from Robert Rector that your stimulus bill is repealing welfare reform.

All reports agree that the provisions in the bill that remove incentives to the states to reduce welfare caseloads will result in expansion of welfare programs. The bill will result in a return to the status quo ante 1996. And that is wrong.

I think it is fair to say that nowhere, Mr. President, did you say that you would be turning back the clock on welfare reform. I am talking about the rotted, dysfunctional welfare system that had been a national scandal for 30 years before President Bill Clinton signed off on the landmark reform bill in 1996.

The Obama administration has no mandate to roll back welfare reform. None at all.

This is wrong, Mr. President. It is cruel, corrupt, wasteful, unjust, and it is deluded. Let us count how this is so.

1. Cruel: Let’s roll the Ellwood and Jencks chart from their 2004 report on welfare. Need I say more? It is cruel to destroy the low-income family in America with your welfare benefits.
2. Corrupt: Let’s face it. We know why liberals like welfare. It is about patronage, about the same as pirate captains sharing out the plunder. Liberals share the wealth because that is how they buy the patronage support of Democratic Party rank-and-file voters. And then, of course, liberals get to award themselves big administrative jobs to hand out the loot. Pensions too. This is corruption, pure and simple.
3. Wasteful: I could go on and on. There is the waste of taxpayers’ money. There is the waste of the lives caught up in the “poverty trap” of welfare. There is the waste of talent in the people who supervise and administer the programs. There is the waste, dare I say it, of scarce global resources at a time when we are trying to save the planet.
4. Unjust: It is a gross injustice to force Americans to pay for this expansion of welfare. There’s a penalty for injustice, and it catches up with you in the end.
5. Deluded: Yes, liberals. Go ahead. Make my day. If you think that this is just a cute little sweetener for your friends, you don’t understand what you are doing. Let us leave aside the record of thirty years of social science, of political philosophy, of simple decency and common sense, all of which thunders that government welfare is a terrible idea that devastates lives. There is the simple politics of it. Government welfare is very unpopular with the voters. They hate it.

There is only one thing to say about the monstrous repeal of welfare reform by the Obama Adminstration and the Democratic Congress.

This shall not stand.

The SNL Administration

I haven’t watched prime-time TV for 15 years. But I know that back in the day Saturday Night Live developed the concept of “not ready for prime time.” Not that I ever watched the Not Ready for Prime Time Players. (But I did just check Google to make sure I had my facts straight.)

It was common knowledge that the Clinton administration was not ready for prime time in 1993. And now it is looking like the same is true of the Obama administration.

Certainly the Obamites have swung and missed at three pitches in a row. First of all there was the “stimulus” bill that isn’t. Then there was President Obama’s first prime-time press conference. (A non-political friend call and said: R-O-O-K-I-E!)

Now we’ve just had to go through Treasury Secretary Tim Geithner’s not-read-for-prime-time performance on completing the bank bailout. Writes Larry Kudlow:

On Tuesday morning, stocks opened down about 75 points in the wake of Obama’s pessimism. But stocks really started to tumble when Tim Geithner stepped to the microphone. He totally bombed in his debut.

Geithner had no real plan to deal with the problem of unmarketable toxic assets on bank balance sheets. He offered no new architectural structure, no good way to remove the toxic assets, no clear pricing or funding proposals, and no meat on the bones.

Look. I’m a conservative and a partisan Republican. I have no debt and cash in the bank. What do I care if the Obama administration totally tanks and fails to fix the most important government program of all: the government-run and government-dominated credit system? Hey, all this stumbling and bumbling has energized the Republican base like you couldn’t believe.

(Yes. Forget the idea that the banks are private. Banking has been a government-regulated business since whenever. And it has been totally in the pocket of government ever since the Federal Reserve System was formed in 1913.)

(And if you wonder why bankers get all those bonuses, remember this. State and local government workers earn about 50 percent more that comparable workers in the private sector. So why shouldn’t government sponsored enterprises like the banks earn more than ordinary mortals too?)

But the fact is that the people who are going to be hurt by all this are the Democratic faithful. They are the people who got suckered into mortgage loans they couldn’t afford. The people who work in retail. The people who work at the less desirable trades in construction.

So I do care. And I wish that the Obama administration would get its act together, stop playing politics, and get the economy back on track. It’s not that hard. First of all, we’ve got to do Stage 2 of the bank bailout. We’ve got to get the bad loans off the books of the banks. We did that after the S&L meltdown (another Democratic program that went south). Secondly, it wouldn’t hurt to throw a lifeline to small business. Try something like a cut in the FICA tax, the tax on jobs. Try lowering the corporate income tax rate.

But let’s do one thing right now. Let’s stop throwing money at the Democratic establishment. They get 20 percent of GDP to play with already, and have just about zero accountability. So why load ’em up with more? They’ll just waste it.

Stimulus: Administrative vs. Incentive

The good thing about the Obama administration is that it gives the nation a clear experience of the difference between the two political parties.

Like the “stimulus” package. It clearly reestablishes the Democratic Party as the party of the administrative solution. Got a problam? Design a program and administer the people and resources needed through a bureaucratic, political process.

By comparison, here is Republican Newt Gingrich’s 12 Point Plan, which almost 100 percent pure incentive.

1. Payroll Tax Stimulus. Cut FICA, the tax on jobs.
   
   
2. Real Middle-Income Tax Relief. Reduce the marginal tax rate of 25% down to 15%.
   
   
3. Reduce the Business Tax Rate. Match Ireland’s rate of 12.5% on corporate income tax.
   
   
4. Homeowner’s Assistance. Provide tax credit incentives to responsible home buyers.
   
   
5. Control Spending. This begins with eliminating Congressional earmarks and wasteful pork-barrel spending.
   
   
6. No State Aid Without Protection From Fraud.
   
   
7. More American Energy Now. Explore for more American oil and gas, plus clean coal, ethanol(???), nuclear power and renewable fuels.
   
   
8. Abolish Taxes on Capital Gains. Match China, Singapore and many other competitors.
   
   
9. Protect Our Right to Vote in the Workplace. We must protect a worker’s right to decide by secret ballot whether to join a union.
   
   
10. Replace Sarbanes-Oxley. This failed law is crippling entrepreneurial startups.
    
    
11. Abolish the Death Tax.
    
    
12. Invest in Energy and Transportation Infrastructure.
    

Notice the difference between this plan and the president’s plan for admininstrative distribution of government handouts for this administered idea or that administered idea; this cash handout versus that cash handout? It’s the difference between an administrative world-view and an incentive world-view, between the notion that you must lay out the specifics of what you want to do, and the idea that you only need to lay out the incentives and people will respond positively and competently.

It all goes back to my Two Nations concept. We really are two nations here in the United States, between whom there is no understanding and no sympathy. Take any difference: Venture Nation versus Tenure Nation. Contract Nation versus Power Nation. The difference between conservatives and liberals is as clear as day.

Or take today’s example: Incentive Nation versus Administrative Nation.

Let's Be Serious, Mr. President

It’s sometimes hard to remember, but governments are instituted among men for serious reasons. The principal reasons are to secure peace at home and abroad and provide a platform for people to go about their daily lives and earn a living.

In the modern era, that means a functioning credit system. As long as the credit system is sound, then everything else will fall into place.

So when the Obama administration put off the announcement of Bank Bailout Part II, to clear the decks for Senate passage of the so-called stimulus bill, you could say that it demonstrated as clearly as can be where its priorities lie.

First of all we service the Democratic faithful with a trillion dollar bonus. Then we fix the economy. Thanks, Mr. President.

Mr. President: I am sorry to say this, but you are wrong. You are making a terrible mistake.

The only thing that is important right now is to finish the business of righting the credit system, to recapitalize the banks and to do something about the toxic debt. That’s what you need to restore confidence in the banks, and get the economy moving again.

But that’s not what the Obama administration has elected to do. And it speaks volumes.

There’s a lot of political hot air venting right now about bankers dealing themselves big bonuses. Although it is small potatoes, it is scandalous. What we have seen in the last year is that the big beasts of Wall Sreet aren’t as big and aren’t as smart as they thought. There’s a simple reason for this. The credit system is not a glorious triumph of the capitalist system. Not at all.

The credit system is a government program, and has been ever since the Federal Reserve Act of 1913.

What does that mean? It means that the government is responsible for the monetary and credit system, and the bankers are just subaltern clerks. It’s the government that mucked up the credit system with its foolish idea that it could shovel credit at low-income homeowners without creating an economy-wide housing bubble. Now it’s the government that must clean up the mess it made.

The fact that the bankers thought it was time to hand out bonuses shows how dumb they really are.

OK, so the bankers are dumb. But the Obama administration is dumber. It would rather focus on increasing Medicaid grants to the states, and building important universities and a thousand other pet projects than fixing the credit system that it broke with its Fannie Freddie catastrophe.

I can’t say that I’m disappointed. I am getting exactly what I hoped for when I voted for Obama.

I felt that it was time for a change from the seriousness of the Bush Administration. Democracy, we know, is the system where the people get what they want: good and hard. And what the people need right now is a four-year demonstration of the unserious nature of the today’s liberal Democratic oligarchy.

It looks like we are going to get just what the doctor ordered.

The How and the What

In government there are two ways of looking at things: how you do things—the process and the image—and then there is the what, the actual policies and ideas that you implement in law and regulation.

President Obama ran as a how candidate, according to Kimberley A. Strassel. He wanted us to judge him on the way he was going to do things.

It was all about how he was going to do it — with bipartisanship and ethics and a new era of "responsibility." Now comes the reckoning. President Obama is being judged not on the what, but the how.

Well, it’s one thing for liberals to talk to themselves about ethics rules and process, and blow clouds of smoke about Hope and Change. But the truth is that government is about force. In our case, it is $5.5 trillion a year of force budgeted or estimated in FY09 at all levels of government, according to usgovernmentspending.com.

So the bottom line is that, what with the gigantic amounts of money swilling around in government, almost anyone who has had something to do with government has got their hands dirty. That creates problems when you advertise, as President Obama does, that all can be fixed with the proper process.

His first full day in office, Mr. Obama imposed the "most sweeping ethics reform in history," barring officials from working on issues on which they’d lobbied in recent years. Then came the realization that a lot of really smart people hadn’t just sat around for years waiting for him to give them government jobs, but had used their expertise for private profit.

You see, it doesn’t matter if you have the most ethical administration in history. If you are shoveling government spending out the door then people are going to lobby big time for a chunk of it. And the senators and congressmen and former senators and former congressmen are going to be right in the middle of all the wheeling and dealing, using their experience and their contacts to help their clients get a piece of the action.

This is what our liberal friends don’t understand. They think that because they are rational and compassionate that their ideas on politics and government programs are rational and compassionate. Put in a proper ethics reform and a few more billion dollars and money will start to flow to the areas with the greatest need.

But they are deluding themselves, of course. Politics is a competitive struggle for power between powerful men and women. The medium of exchange in this fight is government spending for programs. It is ultimately civil war by other means. For all that the language of politics is about helping people, the truth is that it is all about power. And anyone who thinks differently is deluding themselves.

That’s why I say that the welfare state is cruel, corrupt, wasteful, unjust, and the people who believe in it are deluded.