Social Bonds

President Obama relayed to the American people that the only way this country can become better is through Americans working together for a common good. While this statement is certainly true, it is important to qualify his statement. The way that Americans work together is through the pursuit of their own individual desires. Adam Smith once wrote, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." Like Smith's philosophy, the desires of bettering a community for gain is what makes a nation progress. This of course is self-centered but the pursuit of anything is by definition self-centered. Even the pursuit of humility and servanthood is an act of self-centeredness - the person is trying to become better through selflessness. Being self-centered is not necessarily wrong, it is how that self-centerdness is used that makes it either wrong or right.

America was built through the rugged individualism that was a hallmark of its western expansion. But at the same time, the American way of life was forged through the belief that America as a whole was an exceptional nation. A collectivist sense of responsibility was instilled on the people, particularly at the lower levels of community. Whether in small towns or in large cities, ethnic, social, and cultural ghettos brought people together. Whether under the banner of a "melting pot" or a "tossed salad," the diverse people that make up this land has come together under the banner of America. The collectivist mentality has always been a part of the American experience and that mentality has been brilliantly forged with the desires of the individual person.

The American spirit is at its brightest when a governing body acts as passive referee, allowing the people to live as they choose (within reason, of course). The people are bound in a Social Contract, promoting community and direction for the group. The government must enforce this contract as the embodiment of the people's will. By the individual seeking to promote their own interests they will also help others in the process. President Obama is correct when he said that Americans must work together for the common good, but the collectivist mentality must be paired with the individualistic spirit that helped build America.

Financial Jargon

In case you've been living under a rock or are Amish (which in the latter case, you probably won't be reading this post...), you might have noticed that the financial system is struggling. Insolvency, balance sheets, FDIC and TARP are only a few terms that have been launched into the consciousness of the American public. While it is certainly confusing, I have found myself personally struggling to keep up with the jargon and inside baseball stats that have been thrown around. Luckily, I have stumbled across a podcast that clears up some of the confusing language surrounding the financial debacle. It is a 59 minute broadcast from This American Life that explains the cause and effects of the crisis in common terms.

As of right now, various banks have received TARP funds that were meant to be given out in the forms of loans, unfreezing the credit market. However, this purpose was not met since the balance sheets (see podcast or transcript to learn about this) were worse than originally anticipated. The banks gave out too many loans prior to TARP, becoming immensely overstretched. Once people began to default on their repayment of the loans, the banking system began to falter and crumble. As the show explained, to merely lend more is to go back to the root origin of the problem, over-lending. While members of congress are grandstanding on many issues and dumbing down the problem into populist nonsense, they do not confront the problems of the banking industry openly. The remedy to this could come in the form of letting banks fail, making the Bank of America truly become the Bank of America by nationalizing banks or anything in between (click here for one view that lies somewhere in between). We must talk openly and frankly about the crisis. Hopefully this podcast will allow more people in on that important conversation!

Victor Davis Hanson Column

Obama: The Great Divider?

By Victor Davis Hanson

I confess I did not believe Barack Obama entirely during the campaign when he bragged on working across the aisle and championing bipartisanship.

You see, as in the case of any other politician, one must look to what he does--and has done--not what he says for election advantage.

And in the case of Sen. Obama, in his nascent career in the Senate, he had already compiled the most partisan record of any Democratic Senator. He had attended religiously one of the most racially divisive and extremist churches in the country. His Chicago friends were not moderates. His campaigns for state legislature, the House and the Senate were hard-ball, no-prisoner affairs of personal destruction, even by Chicago standards. Campaign references to reparations, gun- and bible-clingers, and Rev. Wright's wisdom were not words of healing.

In short, while the rhetoric was often inspirational, I found no real reason then--or now--to believe that Barack Obama wishes to be a uniter. And nothing in his first five weeks of governance has disabused me of that first tough impression.

Nevertheless, here are five modest recommendations that he might adopt if he were really interested in bringing the country together.

1) Forget talk radio. During the campaign, President Obama, you went after Sean Hannity on numerous occasions--which are recycled ad nauseam almost daily as sound-bites on his radio program. Once in office, both you and your staff have zeroed in on Rush Limbaugh by name. But Presidential candidates and elected Presidents must seem above the fray, and not descend into tit-for-tat with media celebrities. There is a reason why even your closest associates have ceased calling you Barack and now quite properly address you as "Mr. President"--and it is not due to your persistence in demonizing talk radio.

Did George Bush go after Bill Maher or Air America or Keith Olbermann when almost daily they slandered his character? Did he serially evoke Michael Moore? To have done so by name, would have demeaned his office. Worry about refuting conservative ideas, and governing the country, rather than dueling over the airways with those who get paid for only that. The country wanted a Lincoln, not another Nixon going after Dan Rather at a press conference. So far your administration resembles the latter, not the former.

2) Forget about George Bush. We got the message already that he is near satanic, you angelic. Yet even in your inauguration speech, you could not leave well enough alone, and so once again went after a predecessor who won two elections, and so far has been circumspect in his criticism of your own brief tenure. Even ex-Presidents--cf. Jimmy Carter's self-serving ankle-biting and Bill Clinton contorted snipes--reduce the office when they engage in schoolyard "they did it, not me" finger-pointing.

Again, in your first address to the nation, you went out swinging: "As for our common defense, we reject as false the choice between our safety and our ideals." But President Bush never set up such a Manichean either/or situation, as you yourself must accept, when you embraced his protocols on FISA, the Patriotic Act, the Bush-Petraeus Iraq withdrawal plan, and kept rendition, and so far have not quite closed Guantanamo.

And there was more still in that address: "A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. . .Regulations were gutted for the sake of a quick profit at the expense of a healthy market."

But Mr. President, deficits arose from out-of-control spending, inasmuch as the Bush tax cuts resulted in increased revenue. It is fair to fault the past eight years of profligate spending, but when you engage in such demagoguery, the American people can detect your subtext: "I won't criticize Bush's spending because I found it not enough and will trump it; I will criticize his tax cuts, since I want to make the wealthier pay for my even greater borrowing."

Cutting taxes on everyone who pays them is not transferring wealth, unless you believe that one's own income belongs to the government in the first place. Under Bush, nearly 50% of the tax filers for the first time paid no income tax at all--hardly a transfer of wealth.

As far as "gutting" regulations go, I don't think you wish to go there--given the careers of Franklin Rains, a disgraced Jim Johnson (of your recent hire), Barney Frank, and Chris Dodd, who not only really did gut regulations that were at the center of the financial meltdown, but profited from such complicit laxity.

3) Drop the messianic style. The campaign is over. The Victory Column and Parthenon facades belong to last summer. Remember, it's hard finding elites to serve in government that are not tainted. You yourself discovered that depressing fact when you nominated tax-dodgers and lobbyists to your own cabinet. Not only did you have far more trouble on such ethical fronts than did Bush in his first month of nominations, but you suffered the additional wage of hypocrisy after adopting the prophetic rhetoric about your own virtue. 2012 will come soon enough without vero possumus at every turn.

4) Enough of the evil "rich." We've heard now about the proverbial jets, parties, and 'they want us to eat cake' rhetoric that is approaching the sloganeering of the French Revolution. No one likes a Bernie Madoff, or supports AIG and Citicorp execs wanting federal subsidies to cover their lavish lifestyles.

But a little humility is in order: the problem is not just Richard Fuld at a bankrupt Lehman Brothers, but also Clintonites like Robert Rubin at Citicorp, and liberals at Freddie and Fannie who took millions while destroying the financial integrity of hallowed institutions.

A William Jefferson, Charles Rangel, or John Murtha is an advertisement for ethical impropriety. Nancy Pelosi's private jet is as worrisome as those of the Big Three auto execs now on public assistance; both Ms. Pelosi and the car CEOs get federal monies and preside over bankrupt entities--and fly in class.

You are our President; so, please, begin seeing greed as an equal opportunity vice that infects liberal and conservatives alike--and anyone else with all too human frailties. If anything, the liberal egalitarian suffers the additional wage of hypocrisy for engaging in Rangelesque schemes or Robert Rubin 'me-first' bonuses--in the same manner conservatives do when caught with women or drugs after boasting of the need for old-time morality.

5) Stop the dissimulation. Your plan might work for a while given the incineration of trillions in stock and home equity and the need for replacement cash, but its revenue-raising component is not just aimed at the miniscule number of "rich", which you imply to the American people are flying the skies of America in private jets while being unpatriotic in avoiding taxes and violating regulations.

In fact, for your plan to succeed, you must go after the upper, upper middle-class, those making between $250,000 and $600,000 who are restaurant owners, home builders, labor contactors, architects, surgeons, engineers, hospital executives, college administrators, Ivy-League law professors, and many dentists.

These households are wealthy, yes; but they don't own or even fly on $50 million private jets or host private Super Bowl parties. Their income is all reported, and with such good salaries come high insurance and, in the case of business, constant reinvestment and expensive inventories. They are not greedy, but the bulwark of the United States' productive classes who in aggregate pay over 40% of the collective income taxes, and provide most of the jobs in the country. Under your plan many in these high-tax states will pay nearly 70% of their incomes in FICA, Medicare, federal income, and state income taxes. Why gratuitously mislead the American people that those for whom you will lift FICA ceilings or up their IRS bites to 40% are in any way synonymous with the super-rich? Remember the very, very wealthy voted overwhelmingly in your favor precisely because their riches gave them immunity from high taxes, and in many cases they were far removed from the everyday risk and worry of owning a hardware store or trying to keep together a family-owned construction firm. George Clooney is a world away from a paving contractor, just as making $400,000 a year on call 24/7 is not quite making $40 million investing or $2 million for a cameo.

So please no more intellectual dishonesty, Mr. President. Those in great numbers who will pay your higher taxes are not really the rarer Warren Buffets, Bill Gateses, Diane Feinsteins, Teresa Heinz Kerrys, Sean Penns, George Soroses, Oprah Winfreys, or Tiger Woodses, whose mega-wealth really does result in private jet rides, and yet exempts them from worries that increased taxes might wreck their small businesses.

A final note. You are engaged on a vast revolutionary agenda, one that if successful will create a high-tax, big government, large entitlement, UN-centered, and European-emulating country, far different from America of the past. Given your political skills and the current economic crisis, you, as FDR once did, may well pull it off.

Such radical transformation ipso facto creates winners and losers and means radical readjustments that stir passions. But the challenge of a President is to show empathy for those you must target, and some sensitivity to counter-arguments made from good intentions and sound logic.

Instead, you are beginning to create an 'us/them' climate of increasing passionate intensity, and unleashing zeal that cannot be healthy for the country. So far your soaring rhetoric, untraditional background, and the good will of the American people have mitigated such extremism as your Attorney General calling the nation collective "cowards" or your own serial invective against "the rich," "bankers" and Rush Limbaugh.

But there will come a time, when you will rue the politics of class warfare and the rhetoric of the demagogue--and may find the very intensities that you are unleashing for political advantage now, later on will be precisely those that you most regret that even you cannot control.

So a little less 'Bush did it' or Rush this and Sean that, and a little more of the need of all Americans to debate in calm and respect dissension in these times of uncertainty in which no one has all the answers.