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The only serious opposition to this arrogant Ruling Party is coming not from feckless Republicans but from what might be called the Country Party — and its vision is revolutionary. Our special Summer Issue cover story.
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By taxing and parceling out more than a third of what Americans produce, through regulations that reach deep into American life, our ruling class is making itself the arbiter of wealth and poverty. While the economic value of anything depends on sellers and buyers agreeing on that value as civil equals in the absence of force, modern government is about nothing if not tampering with civil equality. By endowing some in society with power to force others to sell cheaper than they would, and forcing others yet to buy at higher prices — even to buy in the first place — modern government makes valuable some things that are not, and devalues others that are. Thus if you are not among the favored guests at the table where officials make detailed lists of who is to receive what at whose expense, you are on the menu. Eventually, pretending forcibly that valueless things have value dilutes the currency’s value for all.
Laws and regulations nowadays are longer than ever because length is needed to specify how people will be treated unequally. For example, the health care bill of 2010 takes more than 2,700 pages to make sure not just that some states will be treated differently from others because their senators offered key political support, but more importantly to codify bargains between the government and various parts of the health care industry, state governments, and large employers about who would receive what benefits (e.g., public employee unions and auto workers) and who would pass what indirect taxes onto the general public. The financial regulation bill of 2010, far from setting univocal rules for the entire financial industry in few words, spends some 3,000 pages (at this writing) tilting the field exquisitely toward some and away from others. Even more significantly, these and other products of Democratic and Republican administrations and Congresses empower countless boards and commissions arbitrarily to protect some persons and companies, while ruining others. Thus in 2008 the Republican administration first bailed out Bear Stearns, then let Lehman Brothers sink in the ensuing panic, but then rescued Goldman Sachs by infusing cash into its principal debtor, AIG. Then, its Democratic successor used similarly naked discretionary power (and money appropriated for another purpose) to give major stakes in the auto industry to labor unions that support it. Nowadays, the members of our ruling class admit that they do not read the laws. They don’t have to. Because modern laws are primarily grants of discretion, all anybody has to know about them is whom they empower.
By making economic rules dependent on discretion, our bipartisan ruling class teaches that prosperity is to be bought with the coin of political support. Thus in the 1990s and 2000s, as Democrats and Republicans forced banks to make loans for houses to people and at rates they would not otherwise have considered, builders and investors had every reason to make as much money as they could from the ensuing inflation of housing prices. When the bubble burst, only those connected with the ruling class at the bottom and at the top were bailed out. Similarly, by taxing the use of carbon fuels and subsidizing “alternative energy,” our ruling class created arguably the world’s biggest opportunity for making money out of things that few if any would buy absent its intervention. The ethanol industry and its ensuing diversions of wealth exist exclusively because of subsidies. The prospect of legislation that would put a price on carbon emissions and allot certain amounts to certain companies set off a feeding frenzy among large companies to show support for a “green agenda,” because such allotments would be worth tens of billions of dollars. That is why companies hired some 2,500 lobbyists in 2009 to deepen their involvement in “climate change.” At the very least, such involvement profits them by making them into privileged collectors of carbon taxes. Any “green jobs” thus created are by definition creatures of subsidies — that is, of privilege. What effect creating such privileges may have on “global warming” is debatable. But it surely increases the number of people dependent on the ruling class, and teaches Americans that satisfying that class is a surer way of making a living than producing goods and services that people want to buy.
Beyond patronage, picking economic winners and losers redirects the American people’s energies to tasks that the political class deems more worthy than what Americans choose for themselves. John Kenneth Galbraith’s characterization of America as “private wealth amidst public squalor” (The Affluent Society, 1958) has ever encapsulated our best and brightest’s complaint: left to themselves, Americans use land inefficiently in suburbs and exurbs, making it necessary to use energy to transport them to jobs and shopping. Americans drive big cars, eat lots of meat as well as other unhealthy things, and go to the doctor whenever they feel like it. Americans think it justice to spend the money they earn to satisfy their private desires even though the ruling class knows that justice lies in improving the community and the planet. The ruling class knows that Americans must learn to live more densely and close to work, that they must drive smaller cars and change their lives to use less energy, that their dietary habits must improve, that they must accept limits in how much medical care they get, that they must divert more of their money to support people, cultural enterprises, and plans for the planet that the ruling class deems worthier. So, ever-greater taxes and intrusive regulations are the main wrenches by which the American people can be improved (and, yes, by which the ruling class feeds and grows).
The 2010 medical law is a template for the ruling class’s economic modus operandi: the government taxes citizens to pay for medical care and requires citizens to purchase health insurance. The money thus taken and directed is money that the citizens themselves might have used to pay for medical care. In exchange for the money, the government promises to provide care through its “system.” But then all the boards, commissions, guidelines, procedures, and “best practices” that constitute “the system” become the arbiters of what any citizen ends up getting. The citizen might end up dissatisfied with what “the system” offers. But when he gave up his money, he gave up the power to choose, and became dependent on all the boards and commissions that his money also pays for and that raise the cost of care. Similarly, in 2008 the House Ways and Means Committee began considering a plan to force citizens who own Individual Retirement Accounts (IRAs) to transfer those funds into government-run “guaranteed retirement accounts.” If the government may force citizens to buy health insurance, by what logic can it not force them to trade private ownership and control of retirement money for a guarantee as sound as the government itself? Is it not clear that the government knows more about managing retirement income than individuals?
Who Depends on Whom?
In Congressional Government (1885) Woodrow Wilson left no doubt: the U.S. Constitution prevents the government from meeting the country’s needs by enumerating rights that the government may not infringe. (“Congress shall make no law…” says the First Amendment, typically.) Our electoral system, based on single member districts, empowers individual voters at the expense of “responsible parties.” Hence the ruling class’s perpetual agenda has been to diminish the role of the citizenry’s elected representatives, enhancing that of party leaders as well as of groups willing to partner in the government’s plans, and to craft a “living” Constitution in which restrictions on government give way to “positive rights” — meaning charters of government power.
Consider representation. Following Wilson, American Progressives have always wanted to turn the U.S. Congress from the role defined by James Madison’s Federalist #10, “refine and enlarge the public’s view,” to something like the British Parliament, which ratifies government actions. Although Britain’s electoral system — like ours, single members elected in historic districts by plurality vote — had made members of Parliament responsive to their constituents in ancient times, by Wilson’s time the growing importance of parties made MPs beholden to party leaders. Hence whoever controls the majority party controls both Parliament and the government.
In America, the process by which party has become (almost) as important began with the Supreme Court’s 1962 decision in Baker v. Carr which, by setting the single standard “one man, one vote” for congressional districts, ended up legalizing the practice of “gerrymandering,” concentrating the opposition party’s voters into as few districts as possible while placing one’s own voters into as many as possible likely to yield victories. Republican and Democratic state legislatures have gerrymandered for a half century. That is why today’s Congress consists more and more of persons who represent their respective party establishments — not nearly as much as in Britain, but heading in that direction. Once districts are gerrymandered “safe” for one party or another, the voters therein count less because party leaders can count more on elected legislators to toe the party line.
To the extent party leaders do not have to worry about voters, they can choose privileged interlocutors, representing those in society whom they find most amenable. In America ever more since the 1930s — elsewhere in the world this practice is ubiquitous and long-standing — government has designated certain individuals, companies, and organizations within each of society’s sectors as (junior) partners in elaborating laws and administrative rules for those sectors. The government empowers the persons it has chosen over those not chosen, deems them the sector’s true representatives, and rewards them. They become part of the ruling class.
Thus in 2009-10 the American Medical Association (AMA) strongly supported the new medical care law, which the administration touted as having the support of “the doctors” even though the vast majority of America’s 975,000 physicians opposed it. Those who run the AMA, however, have a government contract as exclusive providers of the codes by which physicians and hospitals bill the government for their services. The millions of dollars that flow thereby to the AMA’s officers keep them in line, while the impracticality of doing without the billing codes tamps down rebellion in the doctor ranks. When the administration wanted to bolster its case that the state of Arizona’s enforcement of federal immigration laws was offensive to Hispanics, the National Association of Chiefs of Police — whose officials depend on the administration for their salaries — issued a statement that the laws would endanger all Americans by raising Hispanics’ animosity. This reflected conversations with the administration rather than a vote of the nation’s police chiefs.
Similarly, modern labor unions are ever less bunches of workers banding together and ever more bundled under the aegis of an organization chosen jointly by employers and government. Prototypical is the Service Employees International Union, which grew spectacularly by persuading managers of government agencies as well as of publicly funded private entities that placing their employees in the SEIU would relieve them of responsibility. Not by being elected by workers’ secret ballots did the SEIU conquer workplace after workplace, but rather by such deals, or by the union presenting what it claims are cards from workers approving of representation. The union gets 2 percent of the workers’ pay, which it recycles as contributions to the Democratic Party, which it recycles in greater power over public employees. The union’s leadership is part of the ruling class’s beating heart.
The point is that a doctor, a building contractor, a janitor, or a schoolteacher counts in today’s America insofar as he is part of the hierarchy of a sector organization affiliated with the ruling class. Less and less do such persons count as voters.
Ordinary people have also gone a long way toward losing equal treatment under law. The America described in civics books, in which no one could be convicted or fined except by a jury of his peers for having violated laws passed by elected representatives, started disappearing when the New Deal inaugurated today’s administrative state — in which bureaucrats make, enforce, and adjudicate nearly all the rules. Today’s legal-administrative texts are incomprehensibly detailed and freighted with provisions crafted exquisitely to affect equal individuals unequally. The bureaucrats do not enforce the rules themselves so much as whatever “agency policy” they choose to draw from them in any given case. If you protest any “agency policy” you will be informed that it was formulated with input from “the public.” But not from the likes of you.
Disregard for the text of laws — for the dictionary meaning of words and the intentions of those who wrote them — in favor of the decider’s discretion has permeated our ruling class from the Supreme Court to the lowest local agency. Ever since Oliver Wendell Holmes argued in 1920 (Missouri v. Holland) that presidents, Congresses, and judges could not be bound by the U.S. Constitution regarding matters that the people who wrote and ratified it could not have foreseen, it has become conventional wisdom among our ruling class that they may transcend the Constitution while pretending allegiance to it. They began by stretching such constitutional terms as “interstate commerce” and “due process,” then transmuting others, e.g., “search and seizure,” into “privacy.” Thus in 1973 the Supreme Court endowed its invention of “privacy” with a “penumbra” that it deemed “broad enough to encompass a woman’s decision whether or not to terminate her pregnancy.” The court gave no other constitutional reasoning, period. Perfunctory to the point of mockery, this constitutional talk was to reassure the American people that the ruling class was acting within the Constitution’s limitations. By the 1990s federal courts were invalidating amendments to state constitutions passed by referenda to secure the “positive rights” they invent, because these expressions of popular will were inconsistent with the constitution they themselves were construing.
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