Economic, Social and Geopolitical

A brief history of the Federal government and unionism run amuck...

Or how we got into this mess now and why the country is divisive.

America is a big country with wide opinions as large as the population. We are at a moment in our history where our judgment and reasoning is diverse and our opinions are also divisive. In my lifetime the last time we were at this point was in the late sixties and early seventies in the "love it or leave it" period. In it's simplest form today it takes on the debate of libertarian conservative versus progressive liberal ideals.

Progressive Liberalism (as opposed to Classical Liberalism) as a movement started to take hold over a hundred years ago before the First World War. Theodore Roosevelt was the first President to push Progressivism. The consumerism of today is a result of the shift, at that time, in emphasis of managing the national economy from free market business to the regulation of business in favor of the consumer. The idea was that the consumer was more important than the producer. Consumers were the driver of the economy rather than the producers of goods and their rights to products were more important than those who invented, created, manufactured and marketed them.

In 1927 a group of elite academics, unionists, peace activists and radical leftists took a cruise to the then unrecognized Soviet Union to meet Stalin and tour Russia. Their mission was to be self-appointed unofficial envoys of the United States to document the marvels of the collectivist economy of the Soviets. They were given lavish guided tours to selected places that were successful planned economic enterprises and shielded from anything else. They documented their experiences and wrote papers, books and newspaper and magazine articles extolling the virtues of the collectivist society they witnessed. The importance of the trip and passengers is that many of these people become prominent in Franklin Roosevelt's New Deal administrations.

When the legacy became entrenched.

FDR tired of these people and their experiments by 1937 when the second wave of Depression hit from 1937 to 1939. He had been re-elected in 1936 in a landslide but it was becoming clear that the collectivists and their programs had not solved the problems of the economy. In fact, they made it worse, but the damage was done. The established major institutions we are stuck with today including Social Security and liberalized unionism. After the Second World War, the answer to converting from a wartime economy to a peaceful one was in promoting mass produced cookie cutter housing and consumer goods. The remnants of both Roosevelts, regulated monopolies, Social Security, federal government economic planning and unionism were accepted and tolerated as necessary evils.

Those were the seeds planted that the federal government and programs, as we know it today, mushroomed out of control. President Johnson exacerbated the situation by his Great Society programs. Later the Justice Department in law suits started in his administration resulted in Affirmative Action quotas forced onto private employers by consent decree. Public employee unionism also dramatically increased in this era.

To fully understand the consumerism mindset and sense of entitlement many Americans hold today it is important to see how long it took us to get here and how. In order to unravel it, which we must if we are to recover from our current economic crisis, cannot take a hundred years but must be unwound relatively quickly. If we are to recover from it, otherwise we really will spiral downward, a proposition I don't think most Americans are willing to accept.

Why we're divided today.

Due to the current administration, the ineffective political class of both parties in Washington, the divisiveness we are seeing today is a result of a growing movement that is getting stronger. The loose coalition of the Tea Party is the tip of the iceberg. The sentiment they represent is growing stronger among average Americans who don't necessarily align themselves with any political party of movement. The reason the unionists and supporters resistance, especially in the public sector, is so virulently strong (witness Wisconsin as an example) is they recognize the threat to their status quo. Whether they publicly acknowledge this or not, the Progressive Liberals of today realize they are losing the hearts and minds of the American people. In one election three years ago they won their last major victory and gradually they are losing more and more battles.

Some states, Arizona and Montana among them, are taking steps to buck the Federal government and loosen the grip. The process is called "nullification" and refers to state legislatures and elected officials passing bills and declaring that certain federal government edicts are "null and void" because these mandates violate the limits of authority as stated in the US Constitution. Some of their actions seem extreme to a number of people but they don't realize that some of these actions are literal and others are symbolic. Regardless, the trend is there and it is growing.

In Montana a state legislator, Krayton Kerns, is proposing a bill that would nullify the federal Endangered Species Act "null and void" in his state. According to an article in the Great Falls Tribune he argues that the federal government is in serious debt and the opponents to his bill, countering that this legislation would cost the state federal dollars, are arguing over money that isn't there.

"We may as well be arguing over pixie dust. It has as much intrinsic value, the federal government is going down, and you know when a republic dies, it's kind of an ugly thing. There will be no money in the future. Whether we argue about it or not is a nonissue."

On the federal level, Congressman Ron Paul is making the same argument he has for years. Since the US ended the convertibility of the dollar to gold we are using fiat money. Fiat money only has value because the government has laws that say it does. In other words, we keep printing more and more money that has no real intrinsic value to dig ourselves out of debt. Instead we are digging ourselves into a deeper hole.

What is going to happen.

Fear is a powerful thing and many people operate out of fear. The divisiveness of opinion today is driven by the fear of those who depend on the federal government to continue printing money, versus those who recognize that money has no real value and is leading to the inevitable collapse of the monetary system. Sides are forming up and soon there will be no middle of the road dilly dallying around it. The debate revolves around a number of issues but a few serve as focal points.

On the one side, are those who want to see the federal government get its grip off state and local governments and on the other side are those that want more federal control. There are many who want to be free of government interference in our personal lives and some who want the security of entitlement. It is not easily divided up by political parties but each side has organized representation. They are symbolized by the Tea Party movement and organized labor because they are the most visible. They are by no means the only brokers in this divisive war of opinions but it is becoming clearer, as our economic and social fabric dissolves, that we cannot go on this way.

My thought is that we will survive the increasing fights over how much federal government interference people will allow. At the core will be those who are against the status quo of a so-called planned economy and those who are proponents of it. To me the resolution, which will be a revolution in itself, will come when the bottom line is finally tallied. The government really has no money and we may as well be arguing over pixie dust. The system will break and fall and we the people, will have to pick up the pieces and put it back together.

When it's all over and the dust settles, we will be stronger people less dependent on a consumer economy, achievement oriented where accomplishing something matters, knowing things that are important, such as reading, writing, history, geography and math, working hard results in real reward. Above all we will be proud of our country all over again and what it stands for and what we have done for it and ourselves.


  1. Read this last night and had so many thoughts about it that I figured I'd better wait and let them boil down a little. They haven't yet, but I'll respond anyway.

    The fiat money is interesting to me, because it seems like it throws math right out the door. If it's only based on laws and ideas (and I think perception is stronger than law in this case) then, really, what is debt? What is a deficit? Spending an idea is nothing, really. I think people on the progressive side of things understood this way before I caught onto it...though I notice, as I always do, that their leaders do a lot more talking about spreading the wealth than actually doing so on anything close to a personal level. For all the words of "service" that you'll hear tossed about regarding a Kennedy or a Clinton (or your odd Roosevelt or two) I can't recall any of them ever saying, "Wait a minute here...I've got an awful lot of money in MY wallet. I'd better spread it around." I do, on the other hand, remember hearing that Chester Carlson, that evil capitalist founder of Xerox, saying that his life's goal was to die broke by giving his money for good reasons. He didn't quite succeed, but he tried his best. Funny, after you toss aside the words and look at the actions, who really cares.

    I think the government and its bureaucratic mass is like the classical musician who knows every single key and note and chord, and that the capitalist is the Kingsmen, sitting there happy at having written "Louie, Louie". I think there's resentment involved, and that resentment is acted upon in the guise of social justice or Green-ness or any other way a group of non-achievers can hassle achievers monetarily without being quite so bold as to be caught by enough voters. I think they've been caught now, and I think it's going to become very interesting. I feel very lucky to be alive to witness this. I really do.

    I know this answered nothing but I had to say something. It's an awesome post, JR.

  2. The idea of fiat money as a reserve currency has always fascinated me ever since Nixon abandoned the gold standard. Even at that age I was thinking "well how can something that doesn't even have partial intrinsic value (like currency being only 60% of gold and silver for example) be a RESERVE currency." I suppose I get the Keynesians argument on this but I still don't buy it because it makes no sense to me in that stubborn logical way my brain wants to work!

    I think Ron Paul and his polar opposites, those on the far left, could quite possibly be correct. The money will become worthless so all this debt will be repudiated. We'll start from scratch.

    What a great comparison with the government and "Louie, Louie!" Great commentary as always.