The More Things Change…

How can we explain the mess—the morass—in which we find ourselves today as a society? 

One commentator on the public scene offers this answer: “The demoralization of war. A spirit of gambling adventure, engendered by false systems of public finance. A grasping centralism, absorbing all functions from the local authorities, to control the industries of individuals by largesses to favored classes from the public treasuries of moneys wrung from the body of the people by taxation…”

So this commenter, one Sam Tilden, seems to blame our malaise on the demoralization following the Iraq War; the federal guarantees backing Fannie and Freddie leading to a “gambling adventure” with mortgage-backed securities, as Wall St. functionaries played a game of heads they win, tails the taxpayers picked up the losses; the progressive destruction of Federalism—“absorbing all functions from local authority”—during the Bush and Obama years; the bailouts (“largesses to favored classes from the public treasuries”); the crushing taxes (“wrung from the body of the people.”)

And this may all be true, in which case Sam Tilden was quite prophetic, because Samuel J. Tilden was the liberal Democratic candidate for President in 1876, 134 years ago. He was speaking not of our current predicaments but of the similar corruptions of the post-Civil War Republican Grant administration and their favored business interests.

It gets worse, for Tilden, in the quoted passage, was comparing his time with what he saw as similar growth and corruption towards the conclusion of the first Adams administration at the end of the 18^th century, not two decades into the American experiment with limited government, as Hamilton and his cronies moved away from the promise of the Declaration to centralize government power in Washington. 

In Tilden’s time the Federal government spent 3% of GDP, compared to about 20% under Bush II and 24% under Obama. But small as it seems now, that represented a 2-fold (100%) growth in government compared to the antebellum years of less than two decades before. Thomas Paine had noted a century earlier that fighting wars grows government.

At the time Tilden spoke, the Democratic Party was the party of laissez-faire, limited government, and free trade. The Republican Party was the party of high tariffs, government projects for favored businesses interests, and subsidies to the politically powerful; it was a pro-business rather than pro-market party. The Democrats were the party of individual freedom while the Republicans were the party of industrial policy, the mercantilists of their day. 

To paraphrase Nixon, we’re all mercantilists now. 

The French say, “Plus ça change, plus c’est la même chose,” the more things change the more they remain the same. The Democrats are, to say the least, no longer the party of laissez-faire, but the Bush administration was filled with special business interests. Hank Paulson, Bush’s Treasury Secretary, easily—happily—confused an impending bankruptcy of Goldman-Sachs (and the loss of his personal fortune) with societal collapse, to be averted by a taxpayer-funded bailout of his industry, “wrung from the body of the people.”

This battle between Liberty and Power is not new. It is older than the Republic, and people whose idea of a Revolution is raising the federal budget less fast than Obama are not up to the task of reversing Power’s latest advance.

What is to be done? Edwin Lawrence Godkin, a contemporary of Tilden’s and himself a liberal in the 19^th century mold, the editor of New York’s Nation, offered this advice: “The remedy is simple. The government must get out of the ‘protective’ business, and the ‘subsidy’ business, and the ‘improvement’ and ‘development’ business. It must let trade, and commerce, and manufactures…alone. It cannot touch them without breeding corruption.” The New York Nation was a respected venue and Godkin a leading voice in his time. But today calls to merely drop the federal budget to 2008 levels are condemned as “extreme” and the idea of the government letting trade, commerce, and manufactures alone is…simply unheard of.

 The Tea Party has a long road ahead of it. As Santayana said, “Those who do not learn from history are doomed to repeat it.” Expanding government’s societal take from 3% to 24% of GDP in a century and a half is extreme. Fighting to reverse the tide is just, as Paine would say, common sense.