Topic: Government and Politics

What the American Experience Suggests for Brexit

A few years ago President Barack Obama urged members of the European Union to admit Turkey. Now he wants the United Kingdom to stay in the EU. Even when the U.S. isn’t a member of the club the president has an opinion on who should be included

Should the British people vote for or against the EU? But Britons might learn from America’s experience.

What began as the Common Market was a clear positive for European peoples. It created what the name implied, a large free trade zone, promoting commerce among its members. Unfortunately, however, in recent years the EU has become more concerned about regulating than expanding commerce.

We see much the same process in America. The surge in the regulatory Leviathan has been particularly marked under the Obama administration. Moreover, the EU exacerbated the problem by creating the Euro, which unified monetary systems without a common continental budget. The UK stayed out, but most EU members joined the currency union.

The Smoot-Hawley Tariff and the Great Depression

[Reprinted with permission from Alan Reynolds, “What Do We Know about the Great Crash?National Review, November 9, 1979]

 Many scholars have long agreed that the Smoot-Hawley tariff had disastrous economic effects, but most of them have  felt  that  it could  not have caused the stock market collapse of  October  1929, since the tariff was not signed into law  until the following June. Today we know that market participants do not wait for a major law to pass, but instead try to anticipate whether or not it will pass and what its effects will be.

 Consider the following sequence of events:

 The Smoot-Hawley tariff passes the House on May   28, 1929.  Stock prices in New   York   (1926=100) drop   from 196 in March to 191   in June.   On June   19, Republicans   on the Senate Finance Committee   meet   to   rewrite   the   bill. Hoping for improvement, the market rallies,  but  industrial production  ( 1967 = 100)  peaks  in  July,  and  dips  very  slightly through  September.  Stocks  rise  to  216  by  September,  hit­ting their peak on  the  third  of  the  month.  The  full  Senate Finance Committee goes to   work  on  the  tariff  the  following day,  moving  it  to  the  Senate  floor  later  in  the   month.

 On October 21, the Senate rejects, 64 to 10, a move to limit tariff increases to agriculture. “A weakening of the Democratic-Progressive Coalition was evidenced on October 23,” notes the Commercial and Financial Chronicle. In this first test vote, 16 members of the anti-tariff coalition switch sides and vote to double the tariff on calcium carbide from Canada. Stocks collapse in the last hour of trading; the following morning is christened Black Thursday.   On  October 28,  a  delegation   of   senators   appeals   to   President   Hoover to help push a tariff  bill  through  quickly  (which  he  does  on the 31st). The Chronicle  headlines  news  about  broker  loans on  the  same  day:  “Recall  of  Foreign  Money  Grows  Heavier-All Europe  Withdrawing  Capital.” The following day is stalemate. Stocks begin to rally after November 14, rising steadily from 145 in November to 171 in April. Industrial production stops falling and hovers around the December level through March.

Progressives Fought for High Tax Rates in the 1920s Too (They Lost)

“A deeper reason for the failure of progressives to unite ideologically in the 1920’s was what might be called a substantial paralysis of the progressive mind… .[They] fought so hard all through the 1920’s against Andrew Mellon’s proposals to abolish the inheritance tax and to make drastic reductions in the taxes on large incomes. [Yet] the progressives were hard pressed to justify the continuation of nearly confiscatory tax levels.”

–Arthur S. Link, “What Happened to the Progressive Movement in the 1920s?” American Historical Review 64 (1959): 851-883. http://www.jstor.org/stable/1905118

On Presidential Legacies, “History” Has Lousy Judgment

It’s legacy-polishing season for the Obama administration, with the president making himself available for “articles that will allow [him] to showcase his major achievements,” the New York Times reports. Over at Time.com, I have a piece on what I think will turn out to be Obama’s lasting legacy: the evisceration of virtually any remaining legal limits on the president’s power to wage war abroad.

As I note in the column, it’s unlikely that “history” will judge our 44th president harshly because of that. After all, “when it comes to presidential legacies, ‘history’ has lousy judgment.”

More specifically, the academics charged with evaluating presidential legacies have lousy judgment. A look at the presidential rankings reveals that the scholars who fill out the scorecards hardly subscribe to the historian-as-“hanging-judge” theory. Bill Kauffman’s arch description of the rankings is more accurate: “polls by which court historians reward warmarkers and punish the peaceful.” The odious Woodrow Wilson is a perennial top 10 favorite, while his normalcy-securing successor, Warren Harding, is nearly always dead last. Say what you will about Wilson’s brutality and contempt for civil liberties at home, his senseless waste of life abroad–at least the man dreamed big! Teapot Dome, however? Unforgivable. 

Set Fixed Judicial Terms for Supreme Court Justices

Contrary to the judiciary’s reputation as the least dangerous branch, judges exercise almost every executive and legislative power other than going to war. This is why the battle over Antonin Scalia’s successor is so bitter.

That wasn’t the Constitution’s original plan. The courts were important but were not to supplant the other branches. Rather, judges were expected to constrain the executive and legislative branches.

Alexander Hamilton expected the judiciary to play a “peculiarly essential” role to safeguard liberties and act as an “excellent barrier to the encroachments and oppressions of the representative body.” Judges were to “guard the Constitution and the rights of individuals” from “the people themselves.”

James Madison, intimately involved in drafting the Constitution, explained that: “independent tribunals of justice will consider themselves in a peculiar manner the guardians of [Bill of Rights guarantees]; they will be an impenetrable bulwark against every assumption of power in the legislative or executive; they are will be naturally led to resist every encroachment upon rights expressly stipulated for in the constitution by the declaration of rights.”

Seven Reforms to Confront the Populist Wave in America and Europe

Donald Trump keeps winning Republican Party primaries. He could be America’s next president. It’s a sobering thought.

But Trump is not alone. Europe is filled with populist parties, old and new.

It’s too simple to decry a proto-fascist wave, as feared by some alarmists. In fact, most of his Republican competitors were far more aggressive and irresponsible on foreign policy than Trump. Normal folks simply are tired of being viewed as problems to be solved rather than citizens to be engaged.

In the U.S. it doesn’t much matter who people vote for. Government will expand. New regulations will be issued. More tax dollars will be spent. Additional wars will be started. The only certainty is that the views of those who vote will be ignored. Much the same governing consensus dominates Europe.

At the same time, the governing class protects itself. The response of this ruling class to public challenge only increases popular anger and frustration.

Donald Trump’s Hits and Misses in Foreign Policy

Donald Trump has offered his foreign policy vision. It was a bit of a mishmash, but he is no Neoconservative and broke with pro-war Republican orthodoxy in important ways.

The speech, delivered last week in downtown Washington, was standard campaign fare, intended to demonstrate that the candidate was serious, and included some of the usual bland generalities.

Still, there was considerable good in the talk.

After the Cold War, he noted, “Logic was replaced with foolishness and arrogance, which led to one foreign policy disaster after another.” Hard to argue with that. Moreover, said Trump, it was a mistake to believe that the U.S. could impose Western-style democracy on countries “that had no experience or interests” in the process.

Indeed, he noted that “the legacy of the Obama-Clinton interventions will be weakness, confusion and disarray, a mess.” It actually is the Bush-Obama-Clinton interventions, but point taken. “Our actions in Iraq, Libya and Syria have helped unleash ISIS,” Trump added.

Added Trump: “unlike other candidates for the presidency, war and aggression will not be my first instinct.” Those are words not often spoken by Republicans. He also criticized the Iraq debacle, whose “biggest beneficiary has been Iran.”

Further, complained Trump, “our allies are not paying their fair share.” He promised to get out “of the nation-building business.” He argued that Washington should cooperate with Russia.

But there was the bad in the talk as well.