Monday, March 19, 2012

Money and Freedom

Not only in American history, but in the histories of all different parts of the world, there is a curious connection between the freedom of speech and the right to use your own property as you see fit. It might seem odd that this link between the expression of beliefs on the one hand, and material objects on the other hand, is so pervasive in the human experience. But as unlikely as this bond between immaterial ideas and physical possession may appear, the modern world is based, as Mark Levin writes, on the intellectual heritage of philosophers and scholars, whose work coalesced into our modern outlook, which

is a way of understanding life, society, and governance. The Founders were heavily influenced by certain philosophers, among them Adam Smith (spontaneous order), Charles Montesquieu (separation of powers), and especially John Locke (natural rights); they were also influenced by their faiths, personal experiences, and knowledge of history (including the rise and fall of the Roman Empire). Edmund Burke, who was both a British statesman and thinker, is often said to the father of modern

revolutionary theory: he was able to clearly express the distinction between the American Revolution and the French Revolution, and clearly and accurately predicted the trajectory of the latter before it happened.

He was an early defender of the American Revolution and advocate of representative government. He wrote of the interconnection of liberty, free markets, religion, tradition, and authority.

This bond between freedom of speech and economic freedom lies at the heart of the American Revolution. The Founding Fathers - the Continental Congress, the authors of the Declaration of the Independence, the Constitution, the Bill of Rights, and The Federalist Papers - believed

in the dignity of the individual; that we, as human beings, have a right to live, live freely, and pursue that which motivates us not because some man or some government says so, but because these are God-given natural rights.

In this way, the more abstract freedoms are joined to the more concrete freedoms. Among the abstract freedoms are freedom of speech, freedom of religion, freedom of assembly, and freedom of belief; naturally, these can all be phrased differently - represented by different words - but they all revolve around ideas and the communication of ideas. Among the concrete freedoms we find freedom from "taxation without representation," freedom from being forced to yield property or its use (quartering British troops), and the freedom to buy and sell at freely-agreed-to prices.

It is our task to remove the outdated circumstances which surrounded the ideas of the Founding Fathers, and place those ideas, without corrupting them, into new circumstances. What are the contemporary analogues of The Sugar Act of 1764, The Stamp Act of 1765, The Townshend Acts of 1767, The Tea Act of 1773, The Coercive Act of 1774, and the Quebec Act of 1774? How did these legislations harm us then, and which legislations harm us now in the same way?

When we can free society from government's intrusion, we allow people to speak and act freely, and the ordinary citizen

also recognizes in society a harmony of interests, as Adam Smith put it, and rules of cooperation that have developed through generations of human experience and collective reasoning that promote the betterment of the individual and society. This is characterized as ordered liberty, the social contract, or civil society.

Thomas Paine eloquently distinguished between government and society, as John Locke had done a generation earlier. Although not perfect, the equilibrium toward which a society moves, when unencumbered by government intervention, is continuously self-correcting, and the best achievable in this world.

Saturday, March 10, 2012

Roosevelt's New Deal

History books usually use the phrase 'New Deal' to refer to a bundle of legislation and programs initiated by FDR during his first term, between 1933 and 1936. The New Deal can be subdivided into a First New Deal and a Second New Deal. The many different organizations and government offices created by the New Deal were a bewildering maze of abbreviations and acronyms, and possibly gave rise to the term "alphabet soup" as people attempted to understand them.

The Civilian Conservation Corps (CCC), which was closely linked to the Soil Conservation Service (SCS), and provided unskilled manual labor opportunities, primarily for young men, and primarily in rural settings. These projects were linked to the preservation of natural resources, e.g., planting trees as windbreaks to reduce soil erosion. The National Youth Administration (NYA) was an urban counterpart to the CCC and offered jobs in the cities, but the NYA also offered jobs to girls as well as boys. Historian Jonah Goldberg notes that the CCC was operated like the army:

Perhaps no program better represented the new governmental martial outlook than the Civil Conservation Corps, or CCC. Arguably the most popular program of the New Deal, the CCC mobilized some 2.5 million young men into what could only be called paramilitary training. CCCers mostly worked as a "forestry army," clearing dead wood and the like. Enlistees met at army recruiting stations; wore World War I uniforms; were transported around the country by troop trains; answered to army sergeants; were required to stand at attention, march in formation, employ military lingo - including the duty of calling officers "sir" - read a CCC newspaper modeled on Stars and Stripes, went to bed in army tents listening to taps; and woke to reveille.

More jobs were created, for men as well as boys, by the Works Progress Administration (WPA), the Public Works Administration (PWA), the Federal Emergency Relief Administration (FERA), and the Civil Works Administration (CWA). The WPA was the largest of the New Deal programs; it created jobs by constructing public buildings and utilities; its focus was on smaller projects and unskilled workers. The WPA was a "grownup" version of the NYA. The PWA worked on bigger projects - dams and bridges - and did not hire workers directly, but rather gave contracts to construction companies who then created jobs. The CWA's task was to create a short burst of employment in order to get men back to work; their main projects were pipelines, schools, roads, playgrounds, and airports. FERA was the "mother agency" which created the others, but did some direct work itself. Confusingly, these agencies did not all start or end at the same time, sometimes changed their names, gave birth to other programs, absorbed other programs, replaced other programs, and eventually went out of existence. Not only was the public faced with the dizzying "alphabet soup" of acronyms, but they were all constantly changing. In any case, these programs also invigorated the arms industry:

The Public Works Administration paid for the aircraft carriers Yorktown and Enterprise as well as four cruisers, many smaller warships, and over one hundred army planes parked at fifty military airports. Perhaps one reason so many people believed the New Deal ended the Depression is that the New Deal's segue into a full-blown war economy was so seamless.

The Tennessee Valley Authority (TVA) was designed to create jobs by building a system of hydroelectric dams, electrical power generating plants, and a long-distance high-voltage power grid to bring electricity to much of the rural south. Operating as it did with federal subsidies, it was able to offer the service at a relatively low price, which put downward price pressure on the private utility providers in the region. Like the CCC, it had a military tone:

Almost every program of the early New Deal was rooted in the politics of war, the economics of war, or the aesthetics of war coming out of World War I. The Tennessee Valley Authority, or TVA, the signature public works project of the New Deal, had its roots in a World War I power project. (As FDR explained when he formally asked Congress to create the thing, “This power development of war days leads logically to national planning.”) The Supreme Court defended the constitutionality of the TVA in part by citing the president's war powers.

The Agricultural Adjustment Administration (AAA) was most famous for paying farmers not to grow crops, but had other activities as well. The AAA slaughtered six million pigs, which were not butchered for sale, but simply buried. It also directed that ripe crops in the field, ready for harvest, were either burned, plowed under, or left to rot. All of these actions were aimed at reducing the food supply so that farmers could get better prices for the crops they sold. Paradoxically, the AAA was shrinking supply to raise prices, while the TVA was dumping subsidized supply into the market to lower prices. More than half of the AAA's programs were eventually ruled unconstitutional by the Supreme Court, because it placed fees and taxes on the companies who processed agricultural products, and used that revenue to subsidize farmers, which violated principles of fair commerce.

Because one of the central goals of the early New Deal was to create artificial scarcity in order to drive prices up, the Agricultural Adjustment Administration ordered that six million pigs be slaughtered. Bountiful crops were left to rot. Many white farmers were paid not to work their land (which meant that many black tenant farmers went hungry). All of these policies were enforced by a militarized government.

The Social Security Administration (SSA) was created during the New Deal, and is still with us today as one of the more significant government programs. Created to address the needs of those who were too old to work, or physically unable to continue working, it was not meant to finance the semi-recreational concept of retirement which developed in later decades.

The Federal Deposit Insurance Corporation (FDIC), which followed on the heals of the Emergency Banking Act (EBA) and the Economy Act (EA), attempted to restore stability and confidence in the financial system by assuring ordinary depositors that their savings were safe.

The National Labor Relations Board (NLRB) was formed to strengthen organized labor by recognizing the right of unions to have "closed shops" - all workers in factory must join the union if a majority of the workers votes for it - and by forcing management to negotiate with union bargaining teams (management is required to recognize the union as the legitimate bargaining representative, and is required to bargain). Understandably, union leaders were enthusiastic about Roosevelt's New Deal, and about Hugh Johnson, appointed by Roosevelt to operate some New Deal programs:

The President's NRA Day Parade boasted fifty thousand garment workers, thirty thousand city laborers, seventeen thousand retail workers, six thousand brewery hands, and a Radio City Music Hall troupe. Nearly a quarter-million men and women marched for ten hours past an audience of well over a million people, with forty-nine military planes flying overhead. Because of events like this, writes Arthur Schlesinger Jr., Johnson and Roosevelt achieved their goal of "transforming a government agency into a religious experience." A member of the British Independent Labour Party was horrified by such pageantry, saying it made him feel like he was in Nazi Germany.

Perhaps the program which most symbolizes the spirit of Roosevelt's New Deal was the National Recovery Administration (NRA). The NRA attempted to micro-manage the American economy by writing thousands of regulations for nearly every aspect of business and industry. The response from the public was negative, and the Supreme Court eventually rejected much of the NRA's activity as unconstitutional. Roosevelt was forced to re-think his strategy, and the NRA's failure gave way to the 'Second New Deal' which attempted to be less invasive. The Supreme Court's nullification of the NRA was based on the famous "sick chicken" case (if poultry was raised, butchered, and sold inside one state, then the state, not the federal government, has jurisdiction for questions of safety and sanitary conditions). By the time the NRA was overturned by the Supreme Court, it had lost much of its popularity, but in its early days, it had been promoted by the media and the government:

Not surprisingly, victims of the Blue Eagle received little sympathy in the press and even less quarter from the government. Perhaps the most famous case was Jacob Maged, the forty-nine-year-old immigrant dry cleaner who spent three months in jail in 1934 for charging thirty-five cents to press a suit, when the NRA had insisted that all loyal Americans must charge at least forty cents.

For promotional purposes, the NRA had adopted as its symbol a blue eagle. This imagery continued the military tone of other New Deal programs:

It's difficult to exaggerate the propagandistic importance FDR invested in the Blue Eagle. "In war, in the gloom of night attack, soldiers wear a bright badge on their shoulders to be sure their comrades do not fire on comrades," the president explained. "On that principle those who cooperate in this program must know each other at a glance."

In response to the Supreme Court's nullification of the NRA and AAA, Roosevelt proposed his "court packing" scheme in 1937, to add judges to the Supreme Court - implicitly meant were judges friendly to Roosevelt's programs. The "court packing" plan was rejected inasmuch as it conflicted with the constitutional concepts of separation of powers.

The Fair Employment Practices Commission (FEPC) was created by Roosevelt's executive order 8802, and represented a step forward for the civil rights of African-Americans. Arising as it did in 1941, it is generally considered to be too late to be part of the New Deal, and is instead considered to be part of the arms build-up which allowed America to survive the Japanese attack.

We have reviewed here only a representative of the many New Deal programs. Other initiatives included the Reconstruction Finance Corporation (RFC), Homeowners Loan Corporation (HOLC), the Securities and Exchange Commission (SEC), Federal Crop Insurance Corporation (FCIC), Rural Electrification Administration (REA), Resettlement Administration (RA), Farm Security Administration (FSA), and the Indian Reorganization Act (IRA). Many of these agencies had overlapping jurisdictions, and others supervised each other, compounding the confusion.

In sum, the New Deal presented staggering number of agencies and programs, which continually morphed, gave birth to each other, and replaced each other. It was difficult to keep track of them. Eventually, the Supreme Court reminded Roosevelt that there were constitutional limits on his power. The net effect of the New Deal, by increasing taxes and public debt, was to prolong the depression, and to turn a temporary depression into the Great Depression.

Saturday, March 3, 2012

The Mind of an Assassin

Who was the man who killed President William McKinley? Born in Alpena, Michigan, he also spent part of his childhood in Detroit, and on a family farm in or near Warrensville, Ohio. His family's heritage was from eastern Europe; they were Roman Catholics and generally voted Republican. Leon abandoned his family's traditions, and began embracing socialism and anarchism, after finding himself lacking in social skills and generally treated as an outcast by other young people. He spent huge amounts of time in his family's attic, reading radical books.

His life's trajectory moved ever further away from things normal and healthy. As Ann Coulter explains,

Leon Czolgosz, who killed President William McKinley in 1901, was a socialist and anarchist (okay, that's redundant) who was captivated upon hearing a speech by radical socialist Emma Goldman the year he shot McKinley. If memory serves, Goldman's inspirational speech had something to do with "hope" and change."

Coulter's quirky humor in recounting this bit of history reveals the ironic patterns: despite potential conflicts between socialism and anarchism, radicals like Goldman and Czolgosz continually worked at formulating the perfect blend of the two. Violence thoroughly permeated this movement: Goldman and her boyfriend, Alexander Berkman, attempted to murder Henry Clay Frick in 1892, who was not even a government official, but merely a businessman. They planned this murder as an act of terrorism - many anarchists of the era organized random acts of violence to keep the public in a state of anxiety. Frick survived the attempt, and Goldman's boyfriend went to jail.

The attempted murder of Frick, along with a pattern of similar anarchist bombings and assassinations around the world - the King of Italy had been murdered in 1900 - inspired Leon Czolgosz, a misfit and a malcontent.