Thinking through Preserving Democracy: Taxes and the Welfare State, Planning vs Competition

I am shutting down my ‘trophy’ blog shortly, so I am moving posts to here. Sorry about that… Before you comment, however, let me encourage you to read the review series, buy the book, and argue with it. Part of the conversation – any conversation as important as the future of this country – is to hear the multi-sides. Hushbeck has an opinion, and while I don’t always agree with, or his facts, his voice is an important one. Frankly, anyone who pens a document instead of shouting and takes the position of a fear-monger deserves high praise. Hushbeck is no Glenn Beck and for that, whether we disagree or not, he is commendable.

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This is an ongoing review, taking it chapter by chapter, or so. This post covers Chapters 1 – 3. While I generally try to be apolitical until the political sphere and the religious sphere clash, when Energion asked me to consider reviewing this book, I took the chance to do so to engage in a discussion which does far too often come in close contact with the Church. Each of these posts will discuss just various points within the chapter.

Beginning in the introduction, Hushbeck promises an attempt to ‘remain balanced’ in his presentation, however, into the second chapter, I find the usual conservative talking points against unions, in which they are accused of ‘actively seek(ing) to limit competition and thus drive up wages’ while praising the upswing in ‘contract work.’ (p35) While a review should not consist of all the counterpoints that the reviewer could raise to such a remark, it is safe to say that such a bitterly partisan jab at unions so early in the book only made me read the rest with apprehension. Further, on the very next page, the description of government workers is such a stereotype that it is off-putting. What he doesn’t consider is that his experiences with government workers (said I, a government worker) may not be typical across the entire spectrum of government positions of governments, and yet, he freely uses the analogy, as he does with one later, to prove his point, unsubstantiated.

In explaining tax theory, he focuses in on the ‘Bush Tax Cuts’ and heralds them as a proper and expedient thing which brought in more money than expected, all the while ignoring the current situation in which we find that during the Bush-era, there was zero job growth, the deficit skyrocketed and even now, the CBO is suggesting that the tax cuts be allowed to expire. Further, he ignores the fact that President Clinton raised taxes in 1993, and through sufficient Government Regulation, the economy soared, the budget was balanced, and jobs were added to the economy.

Hushbeck rarely uses two sides of the information, often relying upon the same source for his information. His simple explanation is contrary to many economists, which he never thinks to consider; however, he is correct that taxes are becoming a problem in this country. One chart tells the story beyond all words and resources, in that at the turn of the 20th century, the tax rate was well below 10%, but now? Hovering at 33% or so. Hushbeck is correct that taxes plays a large part in the current American political system, in which taxes are used as bait for votes. Further, he is correct in his analogies and use of history of political rulers opening the treasury, generally filled the most by the wealthiest, to the poorest amongst us without any plan to raise their plight. I don’t much care for some of his tactics, but Hushbeck at the very least, unlike so many today, has plans to offer.

His plans, contrary to his ideas expressed in the next chapter, include a national tax. While he criticizes the 16th amendment for its nearly uncontrolled ability for Congress to lay taxes on income, he sees no real problem with a national tax, either Flat or Fair, in which Congress can readily tax, according to income, the citizens of the United States. I, for one, like the Flat Tax, finding the Fair Tax, as he describes it, nothing more than creating a real, honest to goodness, welfare state.

Opening the next chapter, which is entitled Planning vs. Competition, he compares the earthquake which occurred in 1906 in San Fransisco and post-World War 2 Sweden and seemingly believes that they are fully comparable. He ignores the several important factors in comparing the two, such as the conflicts in Sweden before hand and the large governmental role in the aftermath of the 1906 earthquake. For Hushbeck, the comparison is adequate based on housing and real estate (which is ironic, because the 1906 death toll was originally scaled way down by the Government to increase real estate prices in the Bay area), and perhaps it is on the surface, but any small amount of historical research shows that the two are vastly different.

Further, his take on the 55 speed limit laws, again, leaves the facts a bit distorted. While he corrects that this law, a farce, was put into place as an energy-saving measure by (Republican) President Nixon, he was left in place until 1995, when, as he notes, once the Congress ‘changed hands’ (p69), it was repealed. He also notes that the accident rates didn’t see the jump which many expected. He leaves out several factors here. First, while the national law was 55, there were various roads where the law was not applied. Further, States challenged this law. Second, while after the law, the accident rates didn’t return to pre-1973 status, neither did the actual speed limits.

In the same chapter, Hushbeck makes a comment which grated on my pro-States’ Rights (or, if you prefer, States’ Rats). He writes, ‘From the time of the Constitution until World War I, the federal government maintained a fairly limited role.’ (p69) I believe that Mr. Hushbeck has ignored the period between 1861 and 1877, in which the Federal Government fought a war, won, and then imposed occupation over a large swath of the country. As any Southerner should be able to tell you, the Articles of the Confederation was to be a ‘perpetual union’ while the Constitution never mentions any sort of thing. Before the U.S. Constitution, there was no such thing as a ‘federal government’ as the States, as free and independent geo-political entities, were sovereign. It was only after an increase in attacks on the economic system that without authorization of the Confederation, that men set and drafted the Constitution, with the notes of the meeting not being released until long years afterward. By the time the War Between the States came in 1861, the territorial expansion, railroads and interstate commerce had greatly expanded the ‘limited’ role of the Federal Government, which was challenged by nullification and secession. The challengers, as we know, lost. From then on, the States become more like provinces. So, no, it wasn’t Wilson the Democrat who expanded Federal power, but by and large, the Republican Lincoln.

Returning later in the third chapter to the analogy which he attempted at the beginning, Hushbeck focuses on Socialism (p77), repeating the often told heresy that fascism and Communism are socialist extensions. He cites, as his proof Hitler’s National Socialist Party, ignoring the fact that Hitler preached against socialism and communism, with a murderous rage. To define socialism, he uses Friedrick Hayek’s book, The Road to Serfdom, which, along with Ayn Rand‘s books, have become the staple intellectual foundation for conservative thinkers. Using Hayek to define Socialism is like using the Grand Dragon of the KKK to highlight the positive attributes of minorities. Hayek, and Rand, was an avowed agnostic who used evolutionary theory, expanding it into the economic sphere. For Hayek, there was no social justice, perhaps in part, due to the survival of the fittest mentality suggested by Darwinist evolution. Socialism, itself designed in an evolutionary stance in which humanity grows in compassion and humility towards one another (Hushbeck notes that Socialism requires humans to act against their nature, p81, something most moral religions and philosophies do as well), is not about central planning, but were, at one stage of evolutionary economics, about communal ownership of some of the basic means of production. It is an economic theory, not a political system, and consistent with the development of a pure democracy. Capitalism is at its heart an individualist and selfish enterprise which is often times anti-social in nature. With Hushbeck basing his understanding and personal theory only on one side, without considering the source or the foundation for said source, leaves me questioning Hushbeck.

In the same chapter, Hushbeck moves to the Federalism supported by the Founding Fathers, noting that they created a system of government ‘that would keep governmental decisions close to the people’ (p85). Yet, this is entirely historically accurate either. Colonies were formed a township or so at a time on land granted by the King. Each land grant became the colony (hence Georgia, etc…). When independence came, each Colony assumed sovereign statehood and joined in confederation with the other states. Only when economic security of the wealthy and the peace of the 13 states were threatened, did the need for a stronger, ‘more perfect Union’ come to be. The Founders didn’t create local government, but simply allowed it to the extent where one local government couldn’t invalidate another. The Constitution was meant to guard the economic wealth of the individual states, the oligarchy which ruled them, and to prevent the united States of America (the ‘u’ wasn’t capitalized for a long time) from descending into European madness. Understanding the economic and political history of the Constitution is a must when discussing the Republic and any attempt at preserving the system enumerated in the document.

Hushbeck then turns to public education, which I believe all Americans should be concerned with, and rightly notes that with the increased of Federalization and centralization, the nation’s educational scores and key indicators have plummeted. He is completely correct in this part, however, like he has shown other areas of his book, he is wrong on the history. He writes, ‘Against it is important to remember that it was not until 1980 that we even had a Department of Education.’ (p89) In fact, it was in the wake of the War for Southern Independence that the first Department of Education was created in 1867. It was soon demoted out of cabinet status to a minor operating agency. I note, however, that the original role was said by Congressman Donnelly of Minnesota, referring to the southern states and the recent Civil War, to mean,

We have found that the hitherto governing populations of those states could not be trusted to uphold the national Government, . . the responsibility for all this has been properly charged to slavery. Slavery has been swept away, but the ignorance, the degradation, which were its consequences remain. . . . “

Hushbeck is correct in his argument against the centralized educational system, but does not go far enough nor historical enough, to finish his arguments. It is in the educational system which the several sides most first examine as proof either for or against the centralization or abandonment of federalism. The author loses a great opportunity to drive home his point here.

Further, in this already weak chapter, Hushbeck fails to analyze the start of Government planning in the United States, although he does touch ever so briefly on how the Government began the accreditation process, bringing tighter control over the country’s higher educational institutions. If he writes a follow-up, or a third edition, he should focus on World War 1 as the start of Governmental planning in the United Stated. It was during this time that the Government began to greatly interfere, whether rightly or wrongly, in the lives of its citizens, which because of the Great Depression, World War II then the Korean and the Cold Wars, made those citizens forget pre-centralization days. Nearly three generations have passed since the Great War and the rush to centrally plan and yet, the country still operates in that mode, whether rightly as a response to globalization or wrongly as three generations of Americans now have no clue as to the original idea of Federalism.

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