Libertarian Social Democrat

A.D. Freudenheim, The Editor

This recent political cartoon is a nutshell description of how and why I find myself drawn towards two conflicting approaches to government and governance these days. The Democratic and Republican parties are corrupt, cynical, and out of touch in equal measure, and it seems increasingly clear to me that this pathetic gridlock is unlikely to change for the better in the 2010 or even 2012 elections. The parties are too entrenched, the politicians too self-serving, and problems too vast. Here, then, are my two opposing perspectives on what must be done.

“Option A”: I call this approach the “Double-down on Obama, and embrace the hardcore, European-style Social Democrat approach of which the president’s critics are so afraid.” To anyone willing to listen, I am happy complain about the impact of current tax law on my household finances—not to mention the lack of affordable health insurance, the challenge of finding good public (i.e., free) schools in New York City, or the likelihood that Social Security will not be solvent should I ever need it. Nonetheless, I cannot help but wonder whether our society would be better off if we imposed the type of pervasive, all-encompassing “Nordic model” tax regime common in places like Denmark or Sweden. There, national income tax rates are upwards of 32% across the board, and there is a significant Value Added Tax on most purchases, a tax that typically rises for luxury goods. This hefty source of government revenue makes possible a generous network of social services, while also providing a slight leveling-out of wealth: the super-rich are slightly less so, while the poor can lead more stable lives with better government support where needed.

It isn't that I have a great need for more taxes, but the neither-here-nor-there nature of the current US tax plan is not working. The US Treasury, along with state government taxes, brings in enough revenue to sustain programs like Medicare and Social Security in the very near term—while much else has to be paid for with debt that will come due later. This tax revenue will diminish as Baby Boomers retire and government expenditures go up, making our future choices about programs and services even more complicated, and the population available to pay for them more diminished. As much as the wars in Iraq and Afghanistan are a drain on our resources, this situation—the demographic shift and its associated costs—existed before we went to war.

It is this absurd scenario that leads me to ponder the possibilities of giving the government 20% more money, in order to get better services out to a wider portion of the population while investing in and stabilizing some of the long-term programs that might otherwise run out of funding. Hell, witness Glenn Beck extolling the virtues of his local (taxpayer-subsidized) public library, and you can see all over again what could be accomplished with even more resources for these and other programs.

Not to mention that the more I have to listen to the self-serving, completely absurd Republican rationales for why national health care is effectively subsidizing the sick at the cost of the healthy, the more I think the “Nordic model”—heck, even the British model—is appealing. After all, this cross-subsidizing of resources and needs is one of the foundation stones of modern, Western civilization: taxpayers pay for police and fire services, even if most people never have their homes burgled or catch fire. Taxpayers pay for roads throughout their community, city, or state, even if the roads they drive on 90% of the time are the same 25 miles from home to school to work and back again. It takes a lunatic (like Glenn Beck) to think that eliminating (let’s say) the federal government, or even just federal income tax, would change this dynamic for the better. It would not diminish our needs, only the resources to address them.

And yet... there is my “Option B”: This one is summarized as “Learn from the Tea Baggers and the Libertarians—not to mention the founders of our nation, who revolted against an oppressive, self-serving regime.” Putting the terrorism-endorsing elements of the Tea Baggers, faux-Tea Baggers, and their GOP friends aside, it seems fairly clear that our governments actually are failing. From New York in the east to California in the west, the mixture of budget deficits, political gridlock, corruption, and pre-determined spending needs are making effective representative government harder and harder to find. (I know: Indiana is in great shape. Sorta.)

The thing is that the federal, state, and even New York City taxes I pay take a significant portion of my income—while the scope and quality of the services I receive in return continue to diminish, and the additional costs grow, too. At the same time, the sectors in which the federal government has been extremely focused for the last two years—such as banking and global finance—have become even more adept at taking advantage of a taxpayer-funded opportunity to soak the poor and middle-classes in favor of the already rich. Locally, one starts to wonder why Mayor Bloomberg’s city government can find the wherewithal to condemn private property in favor of billionaire developers when there are more basic needs left undone and while so many of the goals outlined in Bloomberg's PlaNYC remain unaccomplished. And meanwhile the optimistic, principled, values-driven “Yes, we can” president we elected seems to be either overwhelmed by actually having to govern or overwhelmed by the scope of the problems left him by the corrupt, sadistic, and politically twisted administration of Bush and Cheney. Heck, you know things are in bad shape when the ACLU is offering up a comparison between Obama and Bush!

No matter how noble the intentions or potentially good the outcomes of any new government initiative, skepticism and cynicism are easy to come by. Just look, for instance, at the convoluted health care bills that have passed both chambers of Congress: it’s easy to say that not every plan for reform is a good one—based on the impact of these two proposals in terms of taxes, costs, and access to medical care. Perhaps more government involvement in health care is not the benefit for which many of us were hoping, relative to a desire for lowered insurance premiums. Yet simple initiatives like the one proposed by Representative Alan Grayson, to allow people to buy into Medicare directly, probably have little hope of success.

Power corrupts, and government offices seem to fuel this even more than the power that comes from wealth and prestige. Given that, it seems like the the best way to tackle our present problems is not through greater and more vigorous government engagement. Instead, we need vigorous government disengagement—a winnowing and pulling back, especially at the Federal level—combined with a steep reduction in our Federal tax burden.

Ultimately, this should be combined with a series of national “conversations” about some of the key issues we face as a nation and state by state. From guns to, well, health care, we don’t know what we want. Our politicians, and the parties that support them, are too scared to help—too scared to move away from the ease of lobbyist-driven corruption, lest they make an unpopular move and wind up out of office and out of power. The platform of domestic policy goals I outlined in August 2007 remains as relevant now as it was then. The question is: who is going to help us get there—or when and how will we help ourselves?

E Pluribus Omnibus

A.D. Freudenheim, The Editor

Out of many, one piece of legislation.

One bill to slay all problems. One bill to stimulate all unstimulated areas of our economy. One bill, to tickle the fancy of those yearning for the good ol' days of the New Deal (most of whom, actuarially speaking, were not around to live through the original New Deal itself). As The Economist put it, one bill “larded with spending determined more by Democrat lawmakers’ pet projects than by the efficiency with which the economy will be boosted.”

One bill because multiple pieces of legislation—developed systematically, to address specific aspects of our economy that need help, and with all necessary due diligence and deliberation for each—would, obviously, be terrible. Genuine debate and analysis, obviously, would be a time-consuming abrogation of legislative responsibility, which would do nothing but slow down the momentum of the executive branch of government. Such an effort would be akin to voting to approve a war concocted (by the executive branch) under false pretenses. Or something like that.

***

One bill that has been passed by Congress, and which President Barack Obama again defended in his address to a joint session of Congress this past week as the first of many new measures.

I started writing this column two weeks ago. The idea came to me as my 20 month old daughter played with her little wallet and the dollar in it, and I had a chance to look again at the dollar itself in some detail. She has been folding it, wrinkling it, putting it in and taking it out of her wallet, and I thought that it was perhaps odd that we had given her an actual dollar as a toy. What does that say about its value? And what would she learn from playing with a real dollar that (at 20 months) she couldn’t get from a fake one?

At his inaugural address, President Barack Obama said "Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age." I loved that line. It was concise and eloquent, but also accurate and honest. It was representative of the person I wanted Obama to be as president.

That Obama is a person and a president whom we as a nation have not yet seen. Doling out federal dollars—as any Republican can tell you, after eight years of practice in Congress and the White House—is more or less the opposite of making hard choices. It's easy because, much like playing Monopoly, it doesn't feel like real money. Real money is what poor and middle class people lose when the GOP-led process of bank deregulation allows financial institutions to spiral out of control. Real money is what a father gives his daughter, not because it is a toy, but because—as an alert young person, learning about the world around her—she should know what it is, how to handle it, to hang on to it, and over time, understand its value. She will have to make hard choices with what to do with that dollar, so learning what it means, what kind of attachment to have to it and what its existence represents, is itself meaningful.

***

Congress and the Executive branch, as everyone knows, do not handle real money. They handle theoretical money that may (or may not) exist in the future, and that someone other than themselves will have to earn years later. If our government understood real dollars, then it would (for one thing) have started closing the absurd gap that our Social Security and Medicare systems will have, between the money coming in and the money going out. The President and Congress might have acknowledged that if it's OK to have government-managed health care programs for the elderly (and the poor), it's not really such a leap to consider creating a government-run system for the rest of us. Government might start moving more actively to draw down our troops in Iraq, and begin saving money on some of these absurd foreign adventures. Heck, an intellectually honest government would recognize the pointlessness of the so-called “War on Drugs,” and move to start taxing drug use instead of trying fruitlessly to eradicate it.

Or Congress and the Executive branch could wake up to the reality that investing billions of dollars to help people who cheerfully and greedily screwed up—while making essentially meaningless gestures in the direction of the hard working people who did not over-extend themselves as a result of greed—is unlikely either to solve many economic problems or to win over long-term voters.

Any of those things, just from that very small list, represent hard choices. They might also have served as economic stimulus components in their own right, by focusing on our long-term health and alleviating future debt or averting future disaster. But those are just a few of the hard choices that need to be made, and our nation has made none of them so far. No hard choices, on virtually any subject.

President Obama, in his address to Congress this week, again laid out a picture of the damage that has been done, and the hard choices we face. He was as elegant and as eloquent as usual when he said “Now, if we're honest with ourselves, we'll admit that for too long we have not always met these responsibilities, as a government or as a people. I say this not to lay blame or to look backwards, but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament.” But at some point, the continued acknowledgment of the problem needs to shift into an actual moment of making hard choices. Granted, he has been in office for only 39 days. There are many more to go. I just wish that the stimulus bill—if it is representative of Obama’s approach—was representative of more clarity and restraint, and was a leading indicator of how problems will be tackled beyond throwing money at them.

Sadly, this was not really an omnibus stimulus bill that our Congress passed and our President signed. Instead, it was more like the world's biggest birthday cake: a cake created by 535 bakers and their assistants, for themselves, by raiding everyone else's kitchen for the necessary ingredients, and on which those same bakers and their helpers subsequently gorged themselves.

If we, as a nation, are to continue on the path that E Pluribus Unum implies—if we are to continue to be a united, strong one rising from the contributions of many—then the many need to see The One start confronting that "collective failure to make hard choices." Obama needs to start living up to his words, and fast.