Monday, May 17, 2010

Federalism, please?

Okay, I thought of something.  A while back I wrote about the difference between political power and economic power.  In my essay I wrote that there will always be businessmen who prefer the easy work of lobbying a politician for advantage to the hard work of building a reputation for good service and quality.  I then went on to say that in that situation it is the responsibility of the politician to say NO.  Now, I still agree with my statement, it is the politician's responsibility to deny special favors, but I left something out of my analysis.  If I don't expect perfect behavior from all businessmen, how can I expect perfect behavior from all politicians?  We are all flesh and blood.  The answer, of course, is that I can't.  So what to do?  There will always be corrupt businessmen, and there will always be corrupt politicians, and they will always find each other.  I gave a general answer in my original essay--regulate less, not more, but I could have been more specific.  What is required is a return to the federalist system as originally conceived by the Founders of the country, with limited powers ascribed and assigned to the Federal government and virtually all public spending constrained to the state and local levels.  Milton Friedman has this commentary in his book "Free to Choose", which was first published in 1979:  "From the founding of the Republic to 1929, spending by governments at all levels, federal, state, and local, never exceeded 12 percent of the national income except in time of major war, and two-thirds of that ws state and local spending.  Federal spending typically amounted to 3 percent or less of the national income.  Since 1933 government spending has never been less than 20 percent of national income and is now over 40 percent, and two-thirds of that is spending by the federal government. ... By this measure the role of the federal government in the economy has multiplied roughly tenfold in the past half-century."

I am reminded of the line from the movie "Field of Dreams", "if you build it, he will come."  In other words, when the federal government is spending trillions, what businessman wouldn't like to have a piece of that action?  What politician wouldn't like to control it?  Sadly, the current remedy for this situation as envisioned by politicians of all kinds, is a tweak to the system.  If we just add a regulation here, take away this incentive, add in that incentive, then all will be well.  No, it won't.  A world-class skeet-shooting friend of mine once said that learning to shoot is like nailing down a warped piece of plywood--you fix one corner and another one pops up.  So it is with government spending--no one person, or group of persons, no matter how well informed they may be, can account for all the outcomes, incentives, and loopholes that a population of three hundred million will unearth.  The problem is the centralized system; the answer is decentralization, or, as I put it earlier, federalism as originally conceived by the Founders.  When local and state governments are spending your money, every person has a much greater ability to understand the amount and reason for the spending, and if necessary, to effect changes.  Until the federal government spends less, and controls less, the unholy combination of political and economic power can be expected to continue.

Tuesday, May 11, 2010

Ssshhhh, I'm reading.

Yeah, I know.  Nothing new here in two weeks.  I'm thinkin', I'm thinkin'.  There's lots of stuff to write about, but nothing's really inspired me for a couple of weeks now.  I will say this...after two years spent reading the books of many of the prominent, present-day philosophers of freedom like Jonah Goldberg, Mark Steyn, Thomas Sowell, and Mark Levin, with the notable exception of Ayn Rand, of course, whose non-fiction philosophy was decades, decades, ahead of her time, I've decided to step back about 20 years and have read through the first 100 or so pages of one of Milton Friedman's best known books, "Free to Choose."  His writing on the banking system and the cause of the depression has been particularly interesting so far.  I went back and forth over whether to buy his other, best-known work, "Capitalism and Freedom", instead of "Free to Choose"--I don't think you'd go wrong reading either of these books by one of the great, 20th century economists and thinkers.