The Meaning of the Debt Crisis

The complexities of money and credit in the economy often serve to obscure the simplicities of the market economy. It is built on trust. When you hire someone to do a job for you, then you trust that they can and will do a good job. When you lend money to someone then you trust that they are good for the interest payments and the return of principal.

In the real world, of course, things get messy. People are optimistic. They offer themselves for jobs they are not quite qualified for; they borrow money on more of a hope that their business plan will work out than a real knowledge of the difficulties and the problems ahead.

Then there is government. Historically, government has entered the credit system to borrow money to finance its wars. If the wars turned out well then the bond holders got their money back. If the war was a disaster then the credit system crashed and bond-holders were lucky to get anything back. Anyway, governments default on their debt all the time.

But the Anglosphere was different. It managed to pay its debts more or less, from 1700 to 1930. That was, no doubt, because politics was dominated by the merchant class and the merchant class wanted a functioning credit system.

The century of the welfare state, starting in 1900, was different. Now politics revolved around the bribing of the employee class by the political class. Credit conditions were a secondary question. The only thing that mattered for the political class was winning the next election. The only thing that mattered for the employee class was getting and keeping their benefits.

Our present crisis is the end game of the century of the welfare state. The manipulation of the credit system to buy votes, in outright government debt, Federal Reserve open market operations to print money, and subsidies for debt in a host of vehicles like Fannie Mae and Freddie Mac have debauched the currency and brought the government debt up to about 100 percent of GDP.

President Obama is therefore in a bit of a bind. Sooner or later he must cut spending and/or raise taxes, but not before the 2012 election when he hopes to be reelected. Thus, for him, the long-term health of the economy is nothing. The propping up of the economy through the election is everything.

Republicans, goaded by the Tea Party movement, think that we might as well start baling out the ship of state right now by cutting spending. It's easy for them; Republicans don't buy votes with spending. Instead they buy votes by offering tax cuts.

Many people are shocked and appalled by the undignified spectacle of the debt-ceiling debate. But what we are seeing is the opening battle in the struggle for the future. Will the big authoritarian welfare state continue with its centralized, politicized programs of pensions, health care, education, and welfare, or will we cut these failed programs down to size? The Republicans, representing the middle class with jobs in the private sector, don't see too much of the benefit of big government. Democrats, as an over-under coalition of government administrators and experts on the one hand and program beneficiaries on the other are fighting to maintain their sinecures and their benefits. The fight is getting nasty and it will get worse. Of course it will. We are fighting over money.

In the end, of course, the American people will get what they want, whatever it is. In the meanwhile, government will break just about every promise it ever made.

Conservativism and Organized Religion

An e-mailer wrote me asking about an assertion I made that "religion is the only thing that will 'get people to live together without being bossed around by police and government.'" He wonders "is there no place for the atheist conservative/libertarian? Or the agnostic? My religion is very personal and I do not wish to share it with others in a formal, organized setting."

It's a tricky question. Most people in the educated elite today find "organized religion" a little distasteful, and express their search for meaning in more personal, philosophical terms. Including me. Right now I am listening to a Teaching Company lecture series called "The Meaning of Life: Perspectives from the World's Great Intellectual Traditions" given by Jay L. Garfield of Smith College. Garfield skirts around Christianity but gives full value to the Bhagavad Gita, Aristotle, the Stoics and Epicureans, Confucius, the Tao, Buddhism, Hume, Kant, Mill, Tolstoy, Nietzsche, Gandhi, and the Native American Lame Deer. All very private and personal.

But the implication of 20th century philosophy from Wittgenstein to Habermas is that meaning is a shared thing. There is no private knowledge; indeed private knowledge doesn't make any sense. The immensely successful knowledge of the natural sciences is instrumental, an attempt to understand nature in order to dominate it--and other humans. But it is also social. Scientists advance the boundaries of knowledge by bouncing ideas and claims off each other and shamelessly appropriating other peoples' ideas. If you read Charles Darwin, you will find that he mentions another scientist or naturalist and their findings on every page.

If knowledge is a "knowledge game" between people, then the way to knowledge is a process of discourse between people.

When it comes to moral knowledge the importance of knowledge as a social process, a discourse between equals, suggests that discourse creates a community, even that community demands a discourse.

Let's return to the question: Can there be such a thing as a private religion, can moral ideas exist except in a social setting where people are held to their commitments?

The immense value of organized religion as it has flourished in the United States under the doctrine of the separation of church and state is that religion provides a means of social consensus and control that operates in the space between individual and government. The point about society is that it is social. People live in a community and they influence each other and live together most of the time without resort to government and to hegemonic power. It is only when they fail to resolve their differences that they resort to government and force.

To live in a private space is to live beyond the influence of others. It means not having to listen to the opinions and maybe the authority of others. I fear that the modern yearning for privacy--in which all of us participate--is little more than a flight from accountability. We humans are social animals. We live together. If we are honest with each other we must acknowledge that the modern turn of increased individuality and government represent a troubling shrinking of community and social life, and who knows where it is leading us?

Anyway, the limit of privacy and individuality is the point at which it bumps up against another person and another idea of the good. Then what? Do we work together to resolve our differences or invoke the nuclear option and call in government?

Win Two Elections

The best way to understand the debt-ceiling crisis, in my view, is a battle at the end of the long strategic advance of the authoritarian welfare state.

But, as Michael Barone points out, Republicans lack the strength to win a decisive battle at this point. That's because, as he writes, the Constitution made it that way. You have to win two elections in a row to flip the government to your side:

The lesson is that you have to win at least two elections in a row to make the kind of policy changes that the Obama Democrats made in 2009 and 2010 and that House Republicans want to make now.

Right now the president and the Democrats are insisting behind the scenes that there will be no spending cuts without revenue increases. That is what comes up time and again as negotiations break down. Democrats want to cement in as much of the huge increase in spending as possible. They know they have to do it by minimizing spending cuts and maximizing tax increases.

In my view, of course, they are whistling Dixie. We are going to see a massive realignment over the next few elections and a huge repudiation of the Democratic approach to politics. If Democrats had any sense they would be preparing the battlefield and making strategic retreats on the most egregious of their corruptocratic programs and subsidies.

That's what they should do. But people usually don't. They keep doing what they are good at even after the game is up.

Napoleon is a good example. His great skill was manoeuvering his army between the widely separated armies of his coalition enemies. Time and again he managed to defeat one opposing army with his whole force while the other opposing army failed to get to the battlefield in time to make a difference. The reason the Battle of Waterloo was a close run thing was that the Prussians almost didn't make it to the battlefield in time.

Napoleon's problem was that, eventually, he wasted an entire army in Russia, and then the next year suffered a huge defeat at the Battle of Leipzig. His army never recovered from those two blows.

Democrats are still good at manoeuvering over the political battlefield and winning the war of words. But the game is up. Spending cuts will be necessary: big spending cuts. The Democrats just don't want to face up to them before 2012 because they understand that if they cut spending on their spending constituencies before the election they are dead meat.

It comes down to the Fram oil filter man's proposal. Do we want to pay him now, or pay him later? With benefits cut and sinecures reduced, all those loyal Democrats will be betrayed in the end anyway. It's a shame, but that's what happens when you put your trust in princes.

Energizing Civil Society

Suppose we agree with Edmund Burke that it is the "little platoons," with Berger and Neuhaus that it is the "mediating structures", and with Lawrence Cahoone that civil society is the essential ingredient for the liberal republican society because "under conditions of civility, membership plus freedom equals dignity." Now what?

The what is obviously the culture that animates the civil society. The whole point of civil society is that it is a space of people living together without the interference of government, a community that, most of the time, resolves its problems internally.

But obviously, people do not just jolly along with their neighbors in a vacuum. They are inspired by trust in each other.

In The Faith Instinct Nicholas Wade makes it clear what it takes to get people to live together without being bossed around by police and government. It is religion. In the crudest terms, it is the threat of divine justice. People that behave badly may not be punished in this life but they will certainly be punished in the next one.

To expand this notion we could say that culture, in the broadest sense including religion, folkways, philosophy, and moral movements, is what makes civil society--people living together--work and give life meaning.

In the United States in the last century we have experienced a culture war between people who wanted to continue the Judeo-Christian religious cultural tradition and those who wanted a break with it in the direction of more sexual freedom, more cultural creativity, and more government in the areas of health, education, and welfare that were previously the responsibility of the Church and civil society. The situation has become complicated by the entry into the United States of East and South Asians with their faith traditions. How can all these traditions be brought together and blended so that civil society is still possible?

The answer is fairly simple. The three great cultural traditions, Abrahamic, Hindu, and Confucian, must come together to tame the modernist war on tradition and the mediating structures of civil society. For the great traditions are united in their knowledge of the importance of personal piety, the moderation of the individual impulse with the social impulse. They stand in the way of radical individual license and radical government power.

The moment for this coming together is now, as the modernist combination of radical individualism and overweening government crashes morally, economically, and financially all over the world. The great power of instrumental reason in the economic sector and the political sector must be tamed, and the place to do it is in the middle, the public sphere between the megastructures where people come to live together or close to each other and take off their political armor and economic weapons.

Is this possible? Can we really succeed in taming the monster? We already tamed the monster of plantation slavery, that Original Sin of capitalism. Now it is time to tame the monster combination of antisocial individualism and anti-human big government. It can't be that hard.

Obama Boxed In

There is always a presumption in presidential politics in favor of the president. He has his bully pulpit, his status as head of state. What the president wants, when the chips are down, he usually gets.

But is President Obama's position on the debt-ceiling talks as strong as it seems and as the mainstream media wants us to think? I suggest that the president's position is in fact strategically very weak.

Oh yes, the president can win any tactical fight. He can use the mainstream media to make the Republican opposition look extreme and partisan. The question is: would he want to if he wants to win reelection?

The president's basic problem, as I developed in "Where Obamanomics Went Wrong," is that he chose the wrong economic policy back in 2009. Now he is starting the reap the whirlwind, with a weak recovery, a danger of inflation, and still no bottom in the housing market. And he's scared the wits out of the business sector, as gambling king-pin Steve Wynn admits.

I'm telling you that the business community in this country is frightened to death of the weird political philosophy of the President of the United States. And until he's gone, everybody's going to be sitting on their thumbs.

They talked this way in the late 1930s. Business has gone on strike, they said.

I can understand Obama's tactics. From his point of view, he wants to get as much liberal stuff on the wall before they ring down the curtain on this "liberal hour." The problem is, of course, this. What if this isn't just another "liberal hour" but the "Liberal Last Act," after which America turns a corner, demands real change and gets a Republican who does a real number on entitlements, and never lets a liberal in the Oval Office again?

The president is gambling that he can keep most of his agenda, win reelection, and avoid a complete blowout in the 2014 second mid-term. It's easy for him: win or lose, he'll still be America's First Black President, with all the perks and privileges of a former president. For the American people, his gamble could result in a generation of hard times.

Tea Party Grows Up

The big question about the Tea Party has always been: is it for real? It's all very well to have rallies and infuriate liberals, but can the Tea Party move the needle?

For two years liberals have been busily telling us that, in addition to being a bunch of rich racists, it was all a storm in a teacup, an astroturf outfit, engineered by the billionaire Koch brothers.

Then came the 2010 election and clear victories for Tea Party inspired candidates adding up to a once-in-a-generation flip of 63 seats in the House of Representatives.

So now the question has shifted. This year the Tea Party turned out fewer people at rallies. Does this mean that the Tea Party is peaking? Not according to its activists.

In the Washington Post Amy Gardner reports that the Tea Party is shifting its priorities "to focus more on policy."

The strategy appears to be working, both on the presidential campaign trail, where most Republican candidates are eagerly embracing tea party priorities, and in Washington, where loyalists are setting the terms of the debate over taxes and spending.

Ned Ryun in the American Spectator agrees. And then there is the fact that people don't really know what the Tea Party stands for, and are uncertain about associating with it. Yes. Liberal slurs on the Tea Party actually do work! Jason Hoyt of the Florida Alliance has experienced the effect.

Jason related that he speaks at many non-Tea Party events, and will ask the audience to raise their hands if they consider themselves part of the Tea Party. In one women’s Republican group, only three or four raised their hands. Then Jason asked one of them what her definition of “being a part of the Tea Party” was. She stated the core principles of the Tea Party movement (limited government, fiscal responsibility, and free enterprise) perfectly. Jason then asked, “Based on that definition, who here believes they are part of the Tea Party?” Everyone present raised her hand.

Yes, but what about the future? Here is Ken Emanuelson of the Dallas Tea Party:

I'm confident that the Tea Party's best days are still ahead, whether it calls itself the Tea Party, or something else. If you want to see a true revolution, just wait until the center-right grassroots finally succeed in making common cause with the center-left and minority grassroots against the public/private crony corporatist establishment. If and when that happens, game over. I think the proper term is, "sea change."

Yes. The thing about the United States is that it is peopled by people that up-sticked from wherever they are to change their lives. There is no reason to suppose that the can-do attitude has completely disappeared from the American experience.

Cahoone and "Neutralist" Liberalism

The starting point of Lawrence E. Cahoone's Civil Society: The Conservative Meaning of Liberal Politics is that the "neutralist or proceduralist liberalism" of left and right (i.e. Rawls and Nozick) is inadequate.

[Neutralism] either contributes to chronic social problems or blocks attempts to address them. Most troublesome is the rigid distinction of the political from the social and particularly the cultural spheres of life.

The problem is that "political theory has become more specialized, purified, and rationalized... Active citizenship, the language of public duty, and... cultural context..." have been cast aside by our liberal friends. Politics reduces to "rights, opportunity, and prosperity." For libertarians it reduces to "individual liberty;" for egalitarian liberals to "individual liberty plus cash." Missing from this view of society is the idea that politics and economics issue from society; they are not free-floating universal ideas good in themselves. The Good must be anchored in actual people and actual community.

This notion is the increasingly ubiquitous idea of "civil society" and Cahoone defines it in four ways.

First, civil society expresses the "priority of the social, the conviction that extant societies gain their norms from within, not from government, Church, or military organizations."

Second, Cahoone states the importance of "spontaneity," the idea that civil society lives in a space between the contractual relations of Toennies' "Gesellschaft" and the "Gemeinschaft of shared traditional morality."

Third, civil society is "intrinsically local," arising out of people living together or living near each other. Nineteenth century Populism was an attempt to express this against the hegemony of elites.

Fourth, for Cahoone, civil society means holism, "the total ensemble of social relations and culture." It is that whole that should drive "political affairs."

Of course, it is the holist view, that society and culture should drive politics, that is problematic for our liberal friends. The whole thrust of modern liberals is to short-circuit the local and traditional--experienced by liberals as benighted and cramped--in favor of the universal and global. But it is, of course, their politics of the universal that has bombed the local community to rubble, and bombed until it bounced the local community of lower income folks that have a less robust defense against the hegemony of the elites than the ordinary middle class. It is the opposition to the local and the particular that drives liberal opposition to modern conservatism, modern enthusiastic Christianity, and most recent of all, liberal opposition to the Tea Party.

Lawrence Cahoone, using modern philosophical ideas deveoloped in the last 50 years, says that "neutralist" liberalism can't deliver the kind of society that most of us want. What does that mean? It means that sooner or later, "most of us" will insist on change, whether liberals like it or not.

Frankly, we'd prefer that liberals work with us on this. But there is always the other possibility, that liberals will fight rather than switch.

That would be a shame.