The Wrong "Road to 60"

Some Republicans are learning the wrong lesson from the filibuster-proof Senate of 2009-10. Grover Norquist is mapping out "The Road to 60" for the next two election cycles.

Social Security reform failed in 2005, on his view, because Republicans only had 55 seats in the US Senate and Democrats absolutely refused to countenance any reform. So Republicans are going to have to get to 60 so that they can ram reform down the Democrats' throats just like the Democrats rammed ObamaCare down Republican throats.

(My recollection was the Republicans couldn't even get Social Security reform out of the House in 2005.)

But this gets it all wrong. There is no point in reforming entitlements unless Republicans can forge a bipartisan majority with moderate Democrats. It would be a terrible mistake to craft a plan and ram it down Democratic throats. That would create a Democratic rejectionist movement and years of rancorous division.

Anyway, Republicans aren't going to need to get to 60 to pass entitlement reform. Back in 2005 Democrats never imagined that we'd be in a situation where states were going bankrupt, public pension plans were underwater, and the federal debt would be heading for 100 percent of GDP. They know, at least in a semi-conscious way, that their programs are in trouble.

When the Republicans start on Rep. Ryan's Roadmap and start to tentatively reform entitlements they will start be able to find Democratic votes. And if they can't find them in 2013 or 2015 they will find them sooner or later.

Republicans must understand that they are moving into a strategic advantage. If these entitlements go belly up it will be Democratic voters that will suffer most. The sooner the Democrats do a deal the better their voters will do out of it. The longer they wait, demagoguing the "cuts," the worse it will be for the "little people."

Democrats don't yet realize that their breakout effort in 2009-10 was a strategic blunder of monumental proportions. They have created issues that Republican candidates will run on for a generation. ObamaCare is going to kill them, because anything that goes wrong in health care will get blamed on ObamaCare and Democrats. And now that Democrats don't have the legislative power they had before the election they are trying to do everything by administrative ukase: instituting "death panels" at the Department of Health and Human Services and pushing carbon dioxide regulation at the Environmental Protection Agency. They couldn't have thought up a better way to creat Republican voters if they had tried.

The centralized administrative state has had an amazing run during the last century. But now it is running up against the reality that it is profoundly undemocratic and profoundly unjust. Democrats have no idea the trouble they are in. Not yet.

The Six Government Mistakes That Led to the Meltdown

One thing our liberal friends seem to be determined to do is to turn their faces away from the truth of the Great Recession.

No, Virginia and New York Times readers, it wasn't greedy bankers or even stupid borrowers. That is mixing up the symptoms for the cause. The cause of the Great Meltdown was government. In fact there were six, count 'em, six different government mistakes, according to Mark J. Perry and Robert Dell in The American.

1. Bank misregulation "incentivized (not merely “allowed”) the creation and highly-leveraged systemic accumulation of the highest yielding AAA- and AA-rated securities among banks globally. Mostly, these banks acquired securitized US mortgages."
2. Continually increasing leverage. "Creditors with the lowest cost of capital generally drive underwriting and leverage standards within the segment in which they compete. In the residential mortgage market, with government entities [Fannie and Freddie] historically being the low-cost providers of capital and the dominant purchasers and guarantors of loans and securities, it is reasonable to hold government accountable for system-wide leverage."
3. Abandonment of proven credit standards and the "enlargement of the riskier subprime and Alt-A mortgage markets by Fannie and Freddie." Government was forcing banks to make high-risk loans.
4. Creditor bailouts by "FDIC, Federal Reserve, Treasury Department, and Congress" starting in the 1980s. Creditors normally control business lending through a variety of devices. But when they are protected by, e.g., deposit insurance, they don't bother.
5. The increase in deposit insurance. It was not just FDIC but the "unchecked expansion of coverage up to $50 million under the Certificate of Deposit Account Registry Service beginning in 2003."
6. Low interest rates from 2001 to 2005. This encouraged the teaser rates on Alt-A and subprime mortgages that made "the rollover or refinancing of short-term instruments all the more precarious" in 2006 and 2007.

The rhetorical problem for conservatives is to boil this sophisticated analysis down into a sound bite. Because we really need to create a meme and a national consensus that government was to blame for the Great Meltdown. It needs to go something like this. Look, you can't fool me. Greedy bankers are always greedy bankers. The problem here is that greedy politicians encouraged greedy bankers and borrowers to become stupid greedy bankers and borrowers. "Government turned greedy bankers into stupid greedy bankers. And that's no error."

And there is no excuse for that.

McCloskey Week: The Messenger

The message of Deirdre McCloskey's mammoth Bourgeois Cycle -- in The Bourgeois Virtues and Bourgeois Dignity -- is that good old bourgeois culture and ideas are a mammoth blessing on humankind. Whatever middle-class people say about middle-class prudence, the bourgeoisie is not a One Big Thing class. It practices all the virtues, devoted to the sacred as well as the profane. And it is the triumph of bourgeois dignity, the success of innovation and the good old college try--over aristocratic pride and peasant doggedness--that has elevated humankind from a perilous life consuming $3 per day to the present US consumption rate of $120 per day, a change that has particularly benefited the poor.

Back to start: Conservatism's Big Problem.

But what about the messenger? Deirdre McCloskey is perhaps more interesting than her message, for Deirdre McCloskey started out life in 1942 as Donald. Only in the 1990s did s/he take the plunge and decide to become a woman.

Thus we have the most unapologetic apology for the bourgeois culture and capitalism being written by a transsexual. The conservative heroine of our time is a LGBT chappie or chappette.

And not just that. McCloskey is a multi-disciplinary writer, an economist, expert in economics and economic history who is also well-read in philosophy and literature and culture. On top of that, she affects a girlish style that no woman-writer-wanting-to-be-taken-as-seriously-as-a-man would ever dare to essay.

In my view, we conservatives have needed a Deirdre McCloskey for decades. We have needed a serious political philosopher that knew the foundations of the grand western project but also knew all the ins and outs of recent cultural thought, the modernisms and post-modernisms that leaves most conservatives non-plussed and resentful.

The great question of the coming years is what comes after the century of big government and the centralized administrative state. Its ruling class has been, in McCloskey's words, the post-1848 clerisy, the cultural and intellectual movement that appeared on the radar in the revolutions of 1848 and has dominated culture and politics ever since. Our task is to delegitimize this cruel, corrupt, unjust, wasteful and deluded movement and substitute something else in its place. We cannot do this without thinkers that "know the best that has been said and thought in the world" in the words of Matthew Arnold, and are not afraid to shout it from the mountain-top.

Something tells me that the utterly shameless Deirdre McCloskey is just what the world has been waiting for. God does indeed play dice, and He does indeed like a cosmic joke. So the idea that the conservative future should be midwifed by a flaming transsexual girlishly arguing for a return to the virtues and a celebration of bourgeois culture and dignity is so crazy that it must be right.

And Deirdre McCloskey has only just begun. Volume three of the Bourgeois Cycle is already written, and three more volumes are planned.

McCloskey calls her books "The Bourgeois Era," but I think she is mistaken. Her project is of Wagnerian scope, and her bourgeois project is just as over-the-top as the Ring Cycle. So, for me, her bourgeois project is nothing less than "McCloskey's Bourgeois Cycle."

Next: Big Fact vs. Big Mistake.

McCloskey Week: It's Not What You Think

What was it that propelled the economic Hockey Stick of the last 200 years, the step change in economic prosperity from $3 per day back than and since forever, versus the $120 per day in economic prosperity we enjoy today?

Back to start: Conservatism's Big Problem.

Never mind that. What about the things it was not, the plausible reasons for modern prosperity that writers from Marx to Weber floated before the world, and that turned out to be wrong, wrong, wrong?

Most of the second volume in Deirdre McCloskey's Bourgeois Cycle, Bourgeois Dignity: Why Economics Can't Explain the World, is given over to exploding the "reasons" that the educated class have come up with for modern prosperity. It was not:

• Thrift, Greed, Protestant Ethic. Sorry chum. There is no indication that thriftiness was uniquely in fashion in the 18th century. In fact it is likely that the crucible of the industrial revolution, Britland, has always been moderately un-thrifty. Same with greed. You think that people were less greedy in ancient times? How about the plains of Ilium? And recent scholarship says that Catholics have just as much of a Protestant Ethic as Protestants.
• Capital Accumulation. A lot of people have assumed that the industrial takeoff could not have occurred without a lot of saving, a storing up of capital to finance the takeoff. But it didn't happen. The textile revolution was financed out of personal savings and modest capital improvements.
• Oppression, Stealing. It wasn't financed by starving the workers, or the profits from the slave trade, or the ill-gotten gains of the enclosure movement. For one thing, a lot of the industrial revolution took place away from the center in out of the way places, organized by nobodies, where economic regulation could not find it.
• Transportation. It wasn't transportation improvements, although they didn't hurt.
• Coal. Nor coal. Although it helped.

No, it wasn't all the economic materialist reasons that all the experts want to believe. It wasn't education either, because innovation is typically transfered directly from one person to another.
No, according to Deirdre McCloskey, it all comes down to dignity--just like in Singin' in the Rain. It was dignity and liberty for ordinary people. She quotes Dr. Johnson:

That the attempts of such men [projectors] will often miscarry, we may reasonably expect; yet from such men, and such only, are we to hope for the cultivation of those parts of nature which lie yet waste, and the invention of those arts which are yet wanting to the felicity of life. If they are, therefore, universally discouraged, art and discovery can make no advances.

Any new project, Johnson goes on, exposes "its author to censure and contempt" and if people were discouraged by contempt or stopped by censure nothing would ever get done.

And that is exactly McCloskey's point. If anything is to change in this world, people have to believe in change, and the rest of us have to resist our instinct to prevent it. We have to take the attitude of Samuel Johnson and look with tolerance, even approval, upon the mad projects of the projectors.

Next: The Messenger.

McCloskey Week: The Moral Case Against Obamanomics

Writes Peter Wehner in Commentary and The Weekly Standard about the current political situation:

[I]t does strike me that a compelling moral argument on behalf of conservative economics specifically, and capitalism more broadly, has been sorely missing from the public debate.

Well, you could start with the moral case put forward by Deirdre McCloskey in her Bourgeois Cycle -- The Bourgeois Virtues and Bourgeois Dignity. She says, more or less, that the difference between our modern middle-class society and the previous oppressive regimes is the revaluation of the things that bourgeois, middle-class persons do.

Back to start: Conservatism's Big Problem.

Under the old regime we had an "elite of Brahmins and warriors [living] by the dignified collection of rents and taxes imposed on the lower classes."

So now in the liberal welfare state we have liberal Brahmins and tenured class warriors living on the dignified proceeds of the progressive tax and regulatory system.

What is needed, in McCloskey's terms, is a reevaluation of the worth of liberal activities: taxing, spending, regulating, dividing, blaming, subsidizing when compared with bourgeois activities like innovating, producing, serving, building, anticipating, trusting, cooperating, competing.

It seems, against all odds, as though this is actually happening. That is why the Democrats are sitting around in a state of shock. Because, against all odds, the Great Recession of 2007-2009 has resulted not in a frightened populace eager to be led to safety but an angry Tea Party pointing the finger at bailouts and handouts to favored Democratic political constituencies.

The heart of McCloskey's argument is that it was not thrift, or a Puritan ethic, or the transport revolution, or the piling up of capital, or coal, or the slave trade, or imperialism that created the freedom of the past two centuries. That's not what created the economic Hockey Stick of the last two hundred years that has built an economy where the average American spends $120 per day instead of $3 per day, and can live a life of greater scope and moral depth than under the old daiy necessity of getting food.

The difference was that, for the first time, the bourgeois code of innovating and inventing and adjusting was valued and appreciated rather than considered low and dishonorable. It is not surprising that the central idea in left-wing rhetoric from Marx to the Fabians to today's "progressives" is to damn the middle class, the higgling of the market, and the people that bury us in goods and services, the evil corporations. The whole point of the class warfare strategy is to marginalize the people that respond to market changes, that anticipate the needs of the consumer and make a lot of money out of it.

The net-neutrality push by liberal foundations is a prime example of this. God forbid that internet providers should start charging a premium to people downloading movies and videos. People have rights!

A central argument of McCloskey is that we are what we think. We got the society of freedom and the economy of innovation because people got out there and said freedom is good, innovation is good. Liberals are going around saying regulation is good, free stuff from the government paid for by the rich is good.

The moral case against Obamanomics centers around the moral case for freedom and the right of people to order their lives without getting permission first from the government.

This shouldn't be that hard. Government screws up everything it does, and the policy of force that is buried in every government program always leads to tears. If we conservatives and libertarians can't convince the American people of the moral and practical worth of our ideas for each individual American, then we deserve a generation of Obamas and their big government delusions.

Next: It's Not What You Think.

McCloskey Week: Bourgeois Dignity

What did it? What was the cause of the Hockey Stick? No, we are not talking about Michael Mann's hockey stick, the spurious "hide-the-decline" surge in global temperatures in the last century. We are talking about the real hockey stick, the extraordinary surge in human well-being in the last two hundred years.

Back: Conservatism's Big Problem.

As Deirdre McCloskey reminds us, time and again in her Bourgeois Cycle, right through volume one, The Bourgeois Virtues, and volume two, Bourgeois Dignity, we are talking about a staggering change. In 1800 humans on average subsisted on about $3 per day in today's dollars. Today, in the United States, we each of us get to dispose of $120 per day. That is forty times the spending of two centuries ago.

And even that really underestimates the change. I recently watched the promo movie at the Boeing visitor center at Paine Field, Washington. They had a shot of a Mayflower-style ship. In the days of sail, it took thousands of hours to get from London to Seattle. Now you can do it in ten. And there are a whole bunch of other things we have today which weren't available to the richest and most powerful of humans two hundred years ago.

The key thing that changed, according to McCloskey, was not technological change, but a cultural, rhetorical change. About three hundred years ago, around the North Sea, societies started to respect the commercial bourgeoisie and the things that it did. It allowed, for the first time, the bourgeoisie to do what comes naturally, to innovate and change things.

That's why McCloskey would rather not call our present economic system "capitalism." The real essence of the modern era is not capital, piles of money, or ruthless accumulation. It is the spirit of innovation, of seeing an opportunity and taking it. "I seen my opportunity, and I took it," said the ward-heeler George Washington Plunkitt. We should call our modern system "innovation," she writes. What happened is that, about three hundred years ago, people stopped ragging on the bourgeoisie.

People stopped sneering at market innovativeness and other bourgeois virtues exercised far from the traditional places of honor [in religion, politics, and war].

All of a sudden, the traders and the merchants were according a dignity and a liberty they had never had before.

Even so, people really didn't realize what was happening. In the mid 19th century, the classical economists didn't really grasp that everything had changed. It was Macaulay, the last of the Whig historians, who really understood.

If any person... after the crash in 1720 [had told that] in 1830 the wealth of England would surpass all their wildest dreams,... that London would be twice as large... and mortality would have diminished to one-half,... that men would be in the habit of sailing without wind and would be beginning to ride without horses, our ancestors would have given as much credit... as they gave to Gulliver's Travels.

Of course our lefty friends still don't want to credit what has happened. That is because they can't get beyond the first stage of every capitalist improvement. The first person to benefit from a new idea is the capitalist innovator and his profit. But then the competitors rush in and everyone benefits from the innovation.

[T]he profits from innovation go in the first act mostly to the bourgeois rich. But in the second act... the poor get better off in real terms.

Of course, some people do suffer from innovation, and we have often not done enough to help them. Our liberal friends, the folks that McCloskey calls the clerisy, in the years after the failed revolutions of 1848--and indeed ever since--insisted upon seeing the capitalist economy as cruel and unjust.

But surely you cannot say that the principal cause of a rise in income from $3 per day to $120 per day was the cruelty of the capitalists in grinding the faces of the poor working class. Or indeed that it was the legislation of the welfare state. The increase in wealth was caused by innovation, middle-class entrepreneurs released from the bonds of age-old prejudice against risk-taking innovation, and allowed, finally, to do their stuff without being put in the stocks.

And when the opponents of the bourgeoisie got their way, in Russia, in Germany, in China, in Cuba, misery and poverty ensued.

You can't say all that enough, and Deirdre McCloskey, in her Bourgeois Cycle, says it. Again and again.

Next: The Moral Case Against Obamanomics.

McCloskey Week: Conservatism's Big Problem

There's a problem at the heart of the modern project of conservatism in America, and it's a simple problem. How can you hope to convince liberals of the truth of conservatism when conservatism is based upon three-hundred-year-old ideas?

F.S.C. Northrop identified the problem precisely in his Meeting of East and West.

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Hueman scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate.

The secular religion and the politics of our liberal friends is based upon this faith. British empiricism and the American founding fathers are all very well, but they cannot speak for the modern era. Hence the need for an educated elite, a "living constitution," and a big federal government. As if to underline this, Russell Kirk's The Conservative Mind: From Burke to Eliot has absolutely no references to Immanuel Kant.

Sorry chums. If the conservative mind has nothing to say about Kant, whose transcendental idealism points in a straight line to Einstein, relativity, and quantum mechanics, then it's not going to appeal to the broad community of thinkers and doers of the modern era.

So what conservatives have needed, like an oasis in the desert, is a thinker to put the conservative case in the context of the entire three-ring circus of modern thought, starting where Hume left off with Kant, continuing through Hegel, Marx, Nietzsche, Heidegger, Sartre and the preenings of the postmodernists, and then ending up saying: well, that's all very well, but these chaps ultimately missed the point, and here's why!

I am pleased to announce that this prophet of conservatism has now emerged. Her name is Deirdre McCloskey, and her work is a grand apology for the middle class, an over-the-top Bourgeois Cycle built upon Wagnerian principles just like the Ring Cycle. That is to say: it is long, it is ambitious, it is insufferable, and it is brilliant. And it may never get finished. McCloskey is now 68ish, and has only finished the first two volumes of her multi-volume epic.

OK, so what is all the fuss about?

In the first volume, The Bourgeois Virtues: Ethics for an Age of Commerce, McCloskey argues for a return to virtue, all seven of them. Although the bourgeoisie insists that it is a practical venture, an effort of pure prudence, bourgeois actions belie this. The commercial middle class practices all the virtues, the four cardinal, masculine, pagan virtues of: Prudence, Temperance, Courage, and Justice; and it also practices the Christian, theological, feminine virtues: Faith, Hope, and Love.

The trouble is that the clerisy, particularly the post-1848 clerisy, has turned against a multi-faceted faith in all the virtues, and has plumped instead for the One Big Thing. In Kant, it was Duty.

Kant made a mistake in rejecting as a constituent of ethics the unreasoning particularities of philosophical anthropology or philosophical psychology.

A very guy thing to do, of course. No woman in her right mind would or could come up with a One Big Thing narrative of meaning. Although some have tried.

In Bentham the one big thing is utility. In Marx, the big thing is labor. It is a materialist view of life:

If virtues cannot be connected to self-interest or genetics, to utility or power, they are, in the early twentieth century philosophical term of Vienna and Cambridge, simply "meaningless."

McCloskey calls this the "Prudence Only" approach of the modern era. But Prudence-Only is not how the world works, and particularly not how the bourgeois middle class works. That's important because it is the commercial bourgeoisie and its virtues that has brought the western world from $3 a day of real material consumption in 1800 to $120 a day in the US today. Meanwhile the Prudence Only materialism of socialism and communism has created nothing out of nothing. What is needed is a return to the virtues, as the movement of virtue ethics has been doing since 1958.

You can see, very easily, how this sort of thinking solves the conservatism problem. It is exactly what conservatism has needed. We want a thorough discrediting of the One Big Thing ethos, which for modern American liberals means that liberals get to call all the big shots because they are more educated, more evolved, and more knowledgeable than the average bitter clinger. We want someone who can argue the hind tails off the liberals all day, and then go out and party all night. And now we have got it.

Next: Bourgeois Dignity.