Wednesday, December 18, 2013

The Founders on Limited Government

Governments govern … which means they exercise power.

James Madison wrote, “The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.” 

Fear of an overly powerful government was a basic principle of the Founders. They firmly believed liberty could not exist with unrestrained government.  Many modern Americans find this belief odd or quaint. After all, a powerful government is needed to right all the wrongs in this world. And there are so many wrongs. Certainly benevolent rule is preferable to wrongs perpetuated on innocent people. Except all-powerful government has been the norm throughout history … and people have been duped, subjugated, robbed, imprisoned, and even murdered by governments.

The Founders weren’t paranoid; they came by their fear of power through personal experience and their study of history. They believed governments oppress and liberty depended on decentralized authority and potent restraints on the abuse of power.

To prevent the government from becoming overly powerful, the Founders used a number of techniques:
  • Enumerated powers
  • Three branches of government with power balanced between them
  • Each branch was given checks on the exercise of power by the other branches
  • A federal system with the states acting as a check on the national system
  • Different terms of office for elected and appointed officials
  • Limited taxing authority (Superseded by the 16th Amendment)
  • A list of things the government could not do ... commonly called the Bill of Rights

Monday, December 16, 2013

Commentary: How to Kill an Economy!

"I'm sure everyone feels sorry for the individual who has fallen by the wayside or who can't keep up in our competitive society, but my own compassion goes beyond that to the millions of unsung men and women who get up every morning, send the kids to school, go to work, try and keep up the payments on their house, pay exorbitant taxes to make possible compassion for the less fortunate, and as a result have to sacrifice many of their own desires and dreams and hopes. Government owes them something better than always finding a new way to make them share the fruit of their toils with others." --Ronald Reagan

When I was an economics major in college, I was taught that Franklin Roosevelt saved capitalism using Keynesian principles. The unchallenged assertion was that the sole reason the Great Depression lasted a decade was because New Dealers were too timid in spending borrowed money. In many economists’ minds, skyrocket spending to win World War II proved conclusively that huge deficits were the cure for slow growth. To a large extent, this is a rewriting of history. It didn’t happen this way.

Instead of spending our way back to wealth, two phenomena saved the American economy. Impending war forced Roosevelt to cease bashing business and the 80th Congress elected in 1946 balanced the budget and undid the worst aspects of the New Deal.

Freedom’s Forge, How American Business Produced Victory in World War II by Arthur Herman does an excellent job of describing the shift from an anti-business bias to acquiescence of capitalism during Roosevelt’s third term. The new tolerance of a profit motive had a huge impact on the production of war materials. The United States manufactured two-thirds of all weapons and supplies used by the Allies, “yet the output of consumer goods was larger every war year than it had been in 1939, despite the restrictions and rationing. In 1945 Americans ate more meat, bought more shoes and gasoline, and used more electricity than they had before Hitler invaded France … total economic production in the United States had doubled; wages rose by 70 percent.”

Wednesday, December 11, 2013

The Founders on Excessive Government Power

The Founders distrusted overly strong governments.  That’s why they engineered a limited republic. Today, Americans seem to turn to their government to validate and protect real and presumed rights, and increasingly rely on government to guarantee the substance of life.  Many modern Americans embrace national authority and fight to enlarge governmental powers.  The Founders would be appalled.

What would the Founders think about growing government power? Here is what they said in their own words.

In our governments the real power lies in the majority of the community, and the invasion of private rights is chiefly to be apprehended, not from acts of government contrary to the sense of its constituents, but from acts in which the government is the mere instrument of the major number of the constituents. Wherever there is an interest and power to do wrong, wrong will generally be done. – James Madison

Tuesday, December 10, 2013

Most Americans confuse the Declaration of Independence and the Constitution

The Constitution means different things to different people. While there has been resurgence in the interest and study of the Constitution, most Americans remain ill-informed. Last Constitution Day, the James Madison’s Montpelier’s Center for the Constitution held a celebration that attracted nearly 300 people. Those who attended were asked questions that had already been answered in a national poll. Here are some of the results from the multiple choice quiz:

Only 35% of the general population identified “We the People” as the first words of the Constitution. 85% of attendees selected this answer. 
78% of attendees knew that James Madison was the “father of the Constitution.” In the national poll, only 20% answered correctly and 50% thought Thomas Jefferson fathered our Constitution. 
62% of attendees correctly identified 1787 as the year the Constitution was written. 55% of the national poll respondents thought the Constitution was written in 1776, and only 13% knew the correct answer.

Sunday, December 8, 2013

What happened in those secret meeting in 1787?

“Can it be of less consequence that the meaning of a Constitution should be fixed and known, than a meaning of a law should be so?”—James Madison

Fifty-five men came to Philadelphia in May of 1787 to secretly plot the overthrow of the United States government. At first, a coup was not subscribed to by all the participants, but most of them soon acquiesced to framing an entirely new form of government. At the time, this conclave was called the Federal Convention; today we refer to it as the Constitutional Convention.

Tempest at Dawn
James Madison, circa convention
One of the first acts of the convention was to declare the proceedings secret. There was a general fear that newspapers would excite Congress and the populace against abandoning the Articles of Confederation. The windows were nailed shut and guards posted at the doors. Delegates were lectured by George Washington never to whisper a word to anyone about what was happening inside the chamber. The official minutes are scanty, recording little beyond an official tally of the votes. A few delegates made private notes, but of those, only one attended every day and wrote everything down. James Madison purposely sat in front so he could take extensive notes of all the deliberations. He recorded the proceedings in his own shorthand, and then transcribed his daily notes into longhand. When finally published in 1840, Madison’s notes exceeded 230,000 words—all written with a quill pen.

Friday, December 6, 2013

The Founders on the Economy

Many think the Founding Fathers were a bunch of old-fogies who lived way before iProducts, and have little to contribute in handling modern economic issues. Those people would be wrong. The post-war economy under the Articles of Confederation was in a tailspin. Alexander Hamilton under the leadership of George Washington saved this nation from economic collapse. (See The Man who saved America from financial ruin.)

What would the Founders think about our current economic problems? Here is what they said in their own words.

In framing a system which we wish to last for ages, we should not lose sight of the changes which ages will produce. An increase of population will of necessity increase the proportion of those who will labor under all the hardships of life, and secretly sigh for a more equal distribution of its blessings. These may in time outnumber those who are placed above the feelings of indigence. According to the equal laws of suffrage, the power will slide into the hands of the former. No agrarian attempts have yet been made in this country, but symptoms of a leveling spirit, as we have understood, have sufficiently appeared in a certain quarters to give notice of the future danger. — James Madison, Federal Convention, June 26, 1787

Wednesday, December 4, 2013

Commentary—Debating Jobs is Wrongheaded

“The circulation of confidence is better than the circulation of money.” James Madison

There has been endless debate and angst over the government’s failure to create jobs. This is a dangerous and highly inappropriate debate.

Goals are important. They can mean the difference between success and failure. Improper goals destroy people, organizations, or even nations. The most common error is to set goals based on effect, rather than cause. This is why the jobs debate is dangerous. The government cannot create jobs. It’s true government can hire a person, but the process only shifts money from the private sector to the public sector. Nothing was created.

The public sector has no innate growth potential. It doesn’t invent, innovate or drive productivity. This is because there is no profit motive to drive entrepreneurship. In fact, the only way to gain personal wealth in government service is through corruption.