Currency Devaluation

Photo by Phil Dokas

Suppose you were Treasury secretary at a moment of worrisome global financial instability. Here is near-bankrupt Greece, truculently threatening, unless Germany pays the pensions of its retirees and the salaries of its public servants, to undermine Europe’s rather fanciful currency, managed by a central bank operating within no single government’s fiscal policy. Meanwhile, in the world’s two largest national economies, China is trying to deflate safely a giant real-estate bubble of ghost cities financed by zombie banks, while the U.S. Federal Reserve presides over the seventh year of capitalism with an almost zero return on capital. Would you spend any time, as Treasury secretary Jack Lew is doing, on redesigning the $10 bill by removing the portrait of Alexander Hamilton, the genius architect of the nation’s financial system, as its main image and replacing it with the portrait of a woman, based on the politically correct whim that America should mark the 2020 centennial of women’s suffrage in this way?

What woman? It seems that almost any one will do, from civil rights pioneer Rosa Parks to Cherokee chief Wilma Mankiller, the reports. “It’s very important to be sending the signal of how important it is to recognize the role that women have played in our national life and in our national history for a very long time, really from the beginning,” said Lew, in prose that shows that language can become as inflated and devalued as currency.

This move would be an error of almost comic silliness. What makes money sound is people’s belief in the solidity of its value. It isn’t that it is made of gold, since history teaches that governments have debased even the hardest currency, clipping tiny bits off gold coins or mixing base metal with bullion in new batches stamped at the mint. The same is true of gold-backed banknotes, which governments have devalued again and again. After all, beyond its commodity value for filling teeth or making jewelry, gold has no value beyond the magical quality superstition assigns to it—or once assigned to it.

As world-historical Founding Father Hamilton rightly postulated, a banknote or a coin is just a promise to pay, whose value ultimately rests on people’s trust that that promise will be fulfilled. And it be fulfilled, not because America’s currency represents some set quantity of specie but rather because it mobilizes “the productions of the country,” wrote Hamilton, fueling the nation’s “unequalled spirit of enterprise, which . . . is in itself an inexhaustible mine of national wealth,” more than any of the gold mines of Spanish America or the not-yet-discovered gold fields of California. The wealth of the nation, at its most fundamental level, consists of the energy and imagination of its citizens in making use of and developing the natural and human resources at hand, often in ways never dreamt of before, and in the constant commercial exchange of the productions of their industry and inventiveness. The medium of exchange—the currency—that allows all this to happen seamlessly therefore does possess something like the magical quality of a self-fulfilling prophesy. The belief that it represents wealth frees and incentivizes people to create wealth.

Recognizing the role of belief—of faith—in making a currency work, Hamilton noted that “in nothing are appearances of greater moment, than in whatever regards credit. Opinion is the soul of it”—that is to say, the spirit that breathes life into it—“and that is affected by appearances as well as realities.” It’s for that reason that our first Treasury secretary backed his paper currency with a tiny fraction of gold, when gold still carried its magical aura. It would make the paper sound, so that people wouldn’t try to cash their paper dollars in for it all at once but instead would use them to finance productive activity. Like Dumbo’s feather, the small national stock of gold was a totem that gave people the courage and incentive to work the magic that was in themselves, which is what wealth creation really is. It’s for that reason, too, that Hamilton ensured that the shareholders of the central bank that would manage the currency would be largely private investors, with a minority government stake, because governments can’t resist the temptation to pay off national debt by inflating the currency, thus debasing it as a trustworthy medium of exchange. Private owners, by contrast, care about nothing more than the stability of their bank.

So the completely fiat U.S. currency that came into being when President Richard Nixon ended the dollar’s convertibility into gold in 1971 is scarcely more factitious than Hamilton’s 1790s dollars, but it is theoretically no less solid and effective—as long as the central bank manages it, as Hamilton did, to ensure its solidity. That’s why the 1978 Humphrey-Hawkins Act proved so dangerous to the national credit, for it charged the U.S. central bank—the Federal Reserve—with the impossible, contradictory task of balancing the economic need for a sound currency with the political desire for full employment. And it’s no wonder that the Fed is coming under criticism for its failures to do an impossible job flawlessly, or that critics are proposing such nostrums as a return to the gold standard.

I would suggest the simpler Hamiltonian course of repealing Humphrey-Hawkins, giving the Fed responsibility and regulatory powers only to ensure a sound currency, and insulating it as much as possible from meddling by government, now more fiscally profligate than usual. But with so much worry in the air about the soundness of our currency, I would urge Secretary Lew to remember Hamilton’s words about appearances. Hamilton is on the $10 bill not because he is a white man (though a West Indian immigrant) but because he helped found the world’s oldest and most successful democracy and created a remarkably resilient financial system—if we can keep it. While Misses Parks and Mankiller are no doubt estimable and important characters, it is at least arguable whether they are in a league with Martha Washington, Abigail Adams, Sarah Jay, or Dolley Madison—and, as a mere matter of historical fact, none of those extraordinarily talented women founded our nation or framed the constitutional system that, however battered, has survived for more than two and a quarter centuries. So we honor Hamilton on our banknote for the inestimable value and worth of his contribution to our own freedom and prosperity.

The change Secretary Lew proposes is, he says, “symbolic,” but “symbols are important.” Indeed they are. So he would do well not to meddle with symbols of value and worth—the nation’s currency—in a way that suggests that value and worth can change with the shifting currents of politically correct fashion.

City JournalThe Founders at Home.

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Against Judicial Activism

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, by Michael Stokes Paulsen and Luke Paulsen (Basic Books 2015)

The meaning of the United States Constitution is “fixed by the original meaning of its words,” according to the authors of a highly engaging new book titled, simply, . That proposition—music to the ears of originalists like Justice Antonin Scalia—underlies the book’s central theme: defending the Constitution’s text against those politicians and judges who “seek to rewrite [its] terms in the service of what are thought to be desirable policies.”

is the product of a multi-year collaboration between Michael Stokes Paulsen, a professor of law at the University of St. Thomas, and his non-lawyer son, Luke. The book’s first half provides an overview of the Constitution’s key provisions and an introduction to the major schools of constitutional interpretation, including the authors’ own originalist perspective. The second half offers a condensed history of American constitutional law. With sidebars on many of the personalities who shaped constitutional doctrine—not just judges, but politicians and litigants, too—the book does an excellent job of placing legal controversies in historical context.

The Paulsens are at their best when critiquing the modern era of judicial activism. In their telling, the Warren Court (1953–69) produced “careless” decisions, because the justices were focused on achieving policy goals rather than upholding the law. The nadir of this results-oriented jurisprudence was, as the authors correctly point out, the Court’s 1973 decision in v., which invented a federal right to abortion on demand. The authors assail as “the most extreme example of judicial activism in the twentieth century.” They even compare the decision—unfavorably—to , the notorious pro-slavery decision that helped provoke the Civil War. “Not even ,” they argue, “so completely seemed to disregard the text as did.”

Rather than citing the Constitution’s actual language, the Court relied on the doctrine of “substantive due process,” the idea that the Due Process Clause of the Fourteenth Amendment empowers judges to strike down laws that they consider flawed, even if not strictly unconstitutional. That doctrine had been strongly endorsed by the Court eight years earlier in v., in which Justice William O. Douglas famously discovered a constitutional right to privacy hidden in “penumbras, formed by emanations” of the First, Third, Fourth, Fifth, and Ninth Amendments.

Justices O’Connor, Kennedy, and Souter come in for heavy criticism from the authors for their less-than-courageous decision in v. (1992) to reaffirm “whether or not mistaken” for fear of provoking a political backlash. Rather than engaging in honest jurisprudence, the three justices were motivated by delusions of “fashioning a political compromise they thought should settle the abortion issue once and for all.”

The authors take aim at many other sacred cows of progressive jurisprudence. The famous police warnings mandated by v. (1966) reflected the Court’s “policy judgment” and not the text of the Fifth Amendment. The Court’s rejection of school prayer in v. (1962) was based on a notion of the separation of church and state that is “found nowhere in the Constitution.” The Court’s 2013 decision striking down the Defense of Marriage Act was “cryptic and meandering in its reasoning.” v. (2003)—which struck down state anti-sodomy laws—is portrayed as an abrupt reversal of an earlier precedent ( v.) driven by certain justices’ desire to legislate from the bench. On affirmative action, the authors take a hard line: the plain meaning of the Equal Protection Clause of the Fourteenth Amendment “renders nearly all forms of state affirmative action programs illegal”—notwithstanding the Court’s continued tolerance of certain forms of affirmative action.

While makes a compelling case against judicial activism, the book is not without its flaws. In order to arrive at its critique of the modern Supreme Court, the authors have crammed too much Supreme Court history into a simplified narrative in which “substantive due process”—the legal doctrine at the heart of activist decisions like v.—is the central villain. The authors assert, for example, that substantive due process was invented by Chief Justice Roger Taney in , but fail to acknowledge that Taney never used the term “substantive due process” and, in fact, made only a single fleeting reference to “due process” in the course of his 50-page opinion.

Turning to the years after the Civil War, the book faithfully describes the rise of substantive due process culminating in v. (1905), in which the Supreme Court struck down state business regulations, ostensibly for violating the “liberty” protected by the due process clause, but more likely because the justices simply thought the regulations unwise. The Paulsens, however, don’t merely criticize the so-called Lochner Era of cases; they label the entire period of 1876 to 1936 as one of constitutional “betrayal.” The years 1936–60, when the Court repudiated , is celebrated in a chapter called “Restoration.” But this is painting with too broad a brush. While the Lochner Era including some regrettable activist decisions, the pre-1936 Court was generally quite faithful to the Constitution’s overarching design of a limited federal government. In v. (1917), for example, the Court correctly struck down the federal Child Labor Act as beyond Congress’s enumerated powers. In order to stay within their narrative of “betrayal,” the authors condemn for “curbing the national government’s ability to address important social problems”—a criticism grounded more in policy than on constitutional interpretation.

The authors are left trying to shoehorn the Court’s New Deal decisions into a tale of constitutional “restoration.” Alas, this was the era in which the Court tore down the Constitution’s express limitations on federal power in order to clear the way for FDR’s massive increase in federal power. The most extreme New Deal decision, v. (1942)—which upheld the power of the federal government to dictate how much wheat a farmer could grow for his own use—is depicted as “restoring the broad interpretation of national legislative power” asserted by Chief Justice John Marshall in the early years of the Republic. But that’s an odd kind of restoration—rather than restoring the Constitution’s text, the Court was restoring the (already-overbroad) interpretations that Marshall had asserted and that later courts had rejected. In reality, the Court in did exactly what the Paulsens argue against: it rewrote the Constitution to further its desired policy goals.

In attacking the Court’s “rights revolution” of the 1960s and 1970s, the authors have to some extent accepted one of the basic premises of judicial activism: the idea that the Constitution is primarily rights. It isn’t. The Constitution is a structural document—its purpose is to create a central government and simultaneously to limit that government’s scope. The document’s framers cared deeply about rights, but they believed that the best way to protect Americans’ rights was to limit the power of the federal government. The right to local self-government—ultimately enshrined in the Tenth Amendment—was the right that would safeguard all others. Though the Paulsens rightly identify federalism as one of the Constitution’s core themes in the book’s early chapters, they shy away from states’ rights throughout the historical narrative. They depict Jefferson’s doctrine of nullification, for example, as a tool that would be used to perpetuate slavery. In fact, the doctrine was invoked more often by abolitionists. With respect to the sovereign right of states to resist unconstitutional federal laws, the book claims that “the Civil War settled issue once and for all”—an odd proposition for authors who insist that constitutional interpretation must be based on the text alone.

Happily, the authors are on much firmer ground when discussing separation of powers—the other essential structural feature of the Constitution. The Court’s decision in v. (2006), striking down the use of military tribunals to try captured al Qaeda war criminals was an “extraordinary” curtailment of executive power and one that President George W. Bush would probably have been justified ignoring entirely. The authors make the important point—one that continues to elude the mainstream media—that President Barack Obama has gone far beyond Bush in his assertion of unilateral executive power by claiming the right “to deploy offensive military force against other nations , without any authorization by Congress” (emphasis in the original).

All in all, is an excellent resource for non-lawyers and lawyers alike looking to understand the role of constitutional law in American history. Though the book would have benefited from a more nuanced narrative and a greater attention to structural issues, the Paulsens’ piercing attack on judicial activism is well worth the price of admission.

The Naked ConstitutionA Less Perfect Union

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The Softest Soft Target

Photo by Howard Arnoff

Charleston’s Emanuel AME Church

Just when it seemed that it couldn’t get any worse, comes this: nine innocent people murdered at a prayer service in an African-American church in Charleston, South Carolina, evidently by a lone white gunman. The killer’s purpose seems to have been to set a match to the always-dry tinder of racial comity. A survivor of the massacre said that the suspect, Dylann Roof, told his victims: “You have to go. You rape our women and you’re taking over our country.” If this proves accurate—early reports from such events are notoriously changeable—any hopes that the simmering racial tensions of the last year would soon blow over are probably at an end.

Mass murder of African-Americans by a white man stirs echoes of an uglier period of race relations in this country. In particular, the murder of Christians at prayer invites comparison with the 1963 bombing deaths of four innocent girls at 16th Street Baptist Church in Birmingham, Alabama. Incalculable good has been achieved in race relations in the ensuing 50 years. America shed the skin of legal segregation, elected a black president, and saw the appointment of black attorneys general and black secretaries of state. But we’re told constantly that the issue remains unsettled. We are reminded—often, it seems, for the express purpose of sowing division—that the ghosts of slavery and Jim Crow haunt us always.

This discord is not foreordained. It’s entirely within our power to avoid descending into a profitless cycle of racial animus and recrimination, though this will require politicians and community leaders to speak tactfully and soberly. It will require decency and neighborliness. If the past is any guide, today and for the next several weeks, those qualities could be in short supply, as we will likely be treated to endless media fulmination on the question, “Who is to blame?”

Obscured by the passions this event will probably cause is the increasingly relevant issue of soft-target terror, which the , with unfortunate timeliness, devoted an article to yesterday. “[C]hurches and religious facilities . . . remain extremely vulnerable,” said James Nicholson, former U.S. ambassador to the Vatican. “[B]ecause it’s virtually impossible for them to serve their mission as places for people to go to worship and thus be accessible to the public without onerous security hurdles that they have to jump through.”

Personally, I’ve lost count of the number of times I’ve sat in a church pew, scoping the exits and thinking, “What would I do if someone opened fire in here right now? Would I be able to carry these kids and run, or would I have to shield them with my body?” I used to think that this was post-9/11 paranoia; now I know that I’ll never be free of these thoughts.

The terrorist attacks of 9/11 turned our airports and airplanes into lock-down zones. The 2012 Newtown massacre turned our schools into maximum-security fortresses. The Charleston slayings might work to similar effect on our churches. How long before we are all living, working, studying, traveling, and worshipping in impregnable boxes of bulletproof glass? What a world to offer our children.

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Investing in Libraries . . . or Pensions?

Photo by jen-the-librarian

New York City will soon finalize its budget for the next fiscal year, and public libraries are feeling shortchanged. Though Mayor Bill de Blasio’s budget boosts capital funding by $300 million over ten years, the libraries had requested much more—$1.4 billion. And de Blasio would cut operational funding by $10 million.

If the libraries are getting less than they wanted, it’s not for lack of a public relations effort. Visitors to the New York Public Library’s website find a pop-up petition enjoining them to “tell the city that libraries need more funding.” Every major city newspaper has recently run stories or editorials echoing the systems’ demands. But most commentary has failed to explore why, in a city with such a marked preference for bigger government, libraries remain cash-strapped almost six years after the last recession ended.

Any honest account of library underfunding must include the ongoing burden of retirement-benefit costs on the city budget. In the last fiscal year, New York City devoted $8.1 billion to pensions—a 152 percent increase over the prior decade. If pension costs had kept pace with the overall budget, which grew 42 percent between 2005 and 2014, the city would have had an additional $3.6 billion to spend on services. To put that figure in context, after accounting for inflation, libraries would need about $164 million to restore spending to prerecession levels.

Pensions are a form of deferred compensation. “Backfilling” pension systems—that is, making contributions into the system to make up shortfalls—is effectively using current tax revenues to pay for past work. The costs of the past squeeze services in the present.

In addition, last year, the city spent $3.1 billion on retiree health care. Workers who retire before they become eligible for Medicare can stay on the city’s plan at no cost. And, when they reach 65, they get their Medicare Part B premiums reimbursed. Such generous benefit packages have nearly vanished from the private sector—and are thus totally unnecessary to attract and retain a qualified city workforce.

In recent years, the city’s libraries have harmed their cause through lack of transparency. Last March, they tried to pass off a glorified Powerpoint presentation as a “special report” substantiating their request for more money. And yet, the libraries need more money. Even greater transparency won’t save them from having to close on hot summer days due to malfunctioning HVAC systems.

The fatal flaw of defined-benefit pensions, which city workers have, is that their costs increase during recessions to compensate for stock-market losses. When such cost increases combine with reduced revenues and the rising demand for many services—including libraries—that typically occurs during bad fiscal times, pensions’ impact on city budgets becomes devastating.

New York City is a big-government town. Municipal service commitments here are broader than elsewhere, and no true fiscal conservative has served as mayor in modern history. That’s a reality of New York, but it also means that single-issue advocacy makes even less sense with respect to municipal services here than in other cities. In exchange for any additional funding, city officials should demand more accountability and information from the New York library system, especially about its plans for what it calls its “midtown campus.” In addition, as should be the case with all capital commitments in New York, new appropriations should be guided by the principle of “fix it first,” not service expansion. Yes, the city should give libraries more funding—but library advocates should appreciate the inherent tension between expansive services and generous benefit programs for public employees. It’s those benefit programs that most need reform, which would ease the mounting fiscal pressure on city services, libraries included.

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No Jokes for You

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“They just want to use these words,” Jerry Seinfeld observed of today’s ideologically intolerant young in his recent ESPN radio interview, explaining why so many comics no longer play colleges. “They just want to use these words. ‘That’s racist. That’s sexist. That’s prejudice.’ They don’t know what the hell they’re talking about.” It’s no wonder the remarks generated such notice. Seinfeld has never shown an ideological bent in either his work or his life. That he cited his own 14-year-old daughter as exemplifying the unhappy phenomenon was especially surprising. A few nights later, appearing on Seth Meyers’s late-night show on NBC, Seinfeld more fully revealed himself. He made it clear that he views our politically correct popular culture, and the reflexive caution it imposes, with the stunned surprise of the belatedly aware; and, more to the point, that now that the veil has been lifted from his eyes, he has no intention of backing off.

Seinfeld described how an innocuous comic observation he made at a recent performance—that, when scrolling through names on their cell phones, people assume the imperious air of “a gay French king”; illustrating with an insouciant flick of an outstretched finger—he instantly felt the room go tense, as the audience silently responded: “What are you talking about ‘gay’? What are you doing? What do you mean?’ And I thought, ‘Are you me?’” He added that he “could imagine a time when people would say that it is offensive to suggest that a gay person moves their hands in a flourishing motion and you now need to apologize.”

it? That time is here and has been for quite a while. Like most of America, Seinfeld simply hadn’t been paying attention.

Nor, even now, is there any suggestion that Seinfeld is politically engaged in a traditional sense. Notably well-adjusted and comfortable in his own skin, especially for a comedian, he enjoys friendships across the political spectrum, from Chris Rock and Louie C.K. on the left to Colin Quinn and Larry the Cable Guy on the right. His allegiance is to humor, about which—catch him on or in his chat with David Steinberg, or almost anywhere else where the subject is generating laughs—he’s unbelievably smart and analytical. Above all, he understands that the most essential element in his kind of comedy is precisely the one under such sustained attack today: honesty. It was key to the observational humor with which he established himself in the clubs and on late-night TV, and it drove his iconic show. No one on was especially nice or generous of spirit; corner-cutting and pettiness ran rampant. Yet the show’s characters, true to themselves even when (make that when) their behavior didn’t reflect well on themselves, inspired such affection because they were so recognizable, especially to the millions of young urbanities who formed its core audience. As Upper West Siders, pretending to social consciousness even when their hearts weren’t in it, their manifold hypocrisies made for especially rich comic fodder.

This is what Seinfeld is defending: the truth, irreverently expressed.

While this is obviously a fight on principle, it is just as obviously intensely personal. As marked its 40th anniversary in 2014, Mel Brooks, himself a liberal, bemoaned that racial sensitivities would preclude the film being made today—and it’s a real question whether some of most memorable episodes would pass muster in what conservative pundit Guy Benson aptly terms today’s culture of shut-up. Just off the top of my head, as a fan of the show, there were the following:

George, desperate to prove his racial bona fides by producing a black friend, seeks to befriend any black guy he can find, including a random guy on the street.

Kramer, refusing to wear a red ribbon on the AIDS walk, is set upon by a pair of gay bullies.

At the Puerto Rican Day Parade, Kramer accidentally sets fire to the Puerto Rican flag, and is attacked by a mob, including the same pair.

Not realizing that a woman he hopes to date is Native American, Jerry repeatedly offends her by proffering a gift of a cigar store Indian, using phrases like “Let’s bury the hatchet,” and finally by trying to using the term “reservation” when booking a table at a restaurant.

Susan’s father is humiliated when it emerges that he was John Cheever’s secret lover.

Kramer is serenaded by Mel Tormé at a benefit for the Able Mentally Challenged Adults, after being socked in the mouth, treated with Novocaine, and mistaken for someone mentally impaired.

All the episodes featuring shyster lawyer/Johnny Cochran stand-in Jackie Childs.

And that’s before we get to the Seinfeld guys’ constant objectification of women (just like real guys!), down to comparisons of specific behaviors and body parts. In fact, with the possible exception of a Jimmy Kimmel/Adam Carolla cable vehicle that once featured a video of clueless young women eagerly signing a petition to “end the suffrage of women”— might have been more indifferent to feminism than any in the medium’s history.

It’s a good bet that any of these subjects, treated more or the less the same way by a comedian on a college campus today, would be greeted with stony silence, or worse. Among the most telling reactions to Seinfeld’s remarks on ESPN was “An Open Letter to Jerry Seinfeld from a ‘Politically Correct’ College Student,” written by a journalism student at San Diego State University. It is a rather startling document, as poorly written as it is poorly reasoned, yet utterly confident in its rectitude. While allowing that he “loves and appreciates offensive, provocative comedy,” he cautions that “comedy in our progressive society today can no longer afford to be crass, or provocative for the sake of being offensive. Sexist humor and racist humor can no longer exist in comedy because these concepts are based on archaic ideals that have perpetrated injustice against minorities in the past . . . There needs to be a message, a central truth behind comedy for it to work as humor.” Offend away, he concludes his lecture to arguably the most successful comedian in America, as long as you’re “offending the right people.”

To a considerable extent, his celebrity—along with the general presumption that, in his heart of hearts, he’s one of the good guys, a liberal—has shielded Seinfeld from the abuse he might have otherwise provoked from the nation’s humorless army of social-justice warriors. Indeed, Jerry Seinfeld may well be the hardest celebrity in America to marginalize. But some are ready to take a crack at doing just that. “Jerry Seinfeld’s anti-P.C. tirade isn’t just stale and lame—it’s cowardly,” tweeted Salon, following the ESPN interview. An MSNBC panel on the controversy made up of left-of-center media millennials produced the following:

Hostess Alex Wagner: Seinfeld has “fallen behind the times.”

’s Annie Lowrey: “I kind of roll my eyes at Jerry Seinfeld. You know, he’s a billionaire—like I don’t feel sorry for him if people don’t laugh hard enough at his jokes.”

Bloomberg Politics’s Dave Weigel: “(N)o one wants to think they’ve stopped being cool or they stopped being relevant—or especially, that they—that they’re now a bigot because they believe something they’ve always believed.”

MSNBC’s Dorian Warren: “I think it’s so cheap and easy to be able to insult people who are socially marginalized . . . you’re afraid to be criticized, because you can’t come up with funny jokes that don’t insult people.”

To his credit, Seinfeld isn’t backing down. In fact—and, perhaps this, too, speaks to his sense of invulnerability—he seems more eager than ever to engage the issue, as was clear on the Seth Meyers program. The host is straightforwardly liberal; the other guest that evening, editor David Remnick, is that and more—a man ever vigilant, lest an errant thought slip into his magazine.

“There’s a creeping p.c. thing out there that really bothers me,” Seinfeld opined of the troubling audience’s reaction at his recent performance, and Meyers and Remnick readily professed to agree.

“But you can also screw up,” said Remnick, noting that thanks to the web, he instantly hears about it whenever he does.

When that happens, asked Meyers, “Do you look back on the work and say ‘Wait, did we make a mistake?’”

“Of course,” said Remnick. “If you have half a brain you give it a second look.”

“When was that?” challenged Seinfeld, from down the couch. “Tell us about that?”

Remnick replied that one of the magazine’s recent covers had so offended “a guy on CNN” that the guy told him, on the air, that it “could have been a cover on a Nazi magazine.”

Seinfeld wasn’t buying. “Explain and defend, not apologize. Did you apologize? . . . Have you ever done that?”

No, Remnick said, but added that some cover sketches do go over the line, and sometimes there’s “a misfire—I got a misfire today.”

“What does that mean, you got a misfire?” Seinfeld asked.

“It was a sketch about a possible cover about the cover recently,” Remnick said, referring to ’s Caitlyn Jenner cover. “But it didn’t work.”

“I would like to know what it was,” pressed Seinfeld.

“You’re not gonna get it.”

The audience laughed and applauded, as if it was all in good fun, but Seinfeld was clearly in earnest. A moment later, he turned to the other media heavy, Meyers. “I saw on Instagram where you said, ‘I’m not going to make any jokes about Caitlyn Jenner.’”

Meyers looked momentarily abashed, before replying, lamely, “I said ‘that day.’ I sort’ve thought that was a wonderful moment, so it wasn’t a good time to make jokes.”

“Oh, good,” allowed Seinfeld drily. “I feel better about it.”

Many of us should feel better knowing Seinfeld is in this fight. Might he eventually go all in, and connect the dots? Might he come to realize that this issue also bears on the proliferating trigger warnings at colleges—the kinds his children will soon be attending—and the treatment of people like Condoleezza Rice and Ayaan Hirsi Ali, and so much more?

Probably not. But for now, let’s settle for a steady push for the freedom to make light of anything, across the ideological spectrum—including, for the next month or so, Rachel Dolezal and her amazing quick-switch from white to black.

Not that there’s anything wrong with that.

City JournalNo Matter What . . . They’ll Call This Book RacistWhy We Won’t Talk Honestly About RaceWill Tripp, Pissed-Off Attorney-at-Law.

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Antisuburbanist

Photo by Scorpions and Centaurs

, by Steve Conn (Oxford University Press, 392 pp., $34.95)

The American political Left is now heavily associated with cities, but it wasn’t always so. Proto-Democrat Thomas Jefferson once claimed that the “mobs of great cities add just so much to the support of pure government, as sores to the strength of the human body.” William Jennings Bryan and prairie populists criticized cities as thrones of parasitic capitalism and exploitation. Franklin D. Roosevelt’s New Deal explicitly focused on rural concerns; where it did address urban concerns, it often provided an incentive for people to move out of the city. The National Industrial Recovery Act, the Resettlement Administration, and most importantly, the Federal Housing Administration, set the framework for the American suburban boom, with mortgage guarantees encouraging single-family home acquisition and tilting the field of housing purchase forever since in favor of buyers and against renters.

One merit of Steve Conn’s is a frank accounting of this past. Conn is understandably hostile to policies that explicitly favor the rural or suburban over the urban. The Interstate Highway system, he argues with ample justification, ruined countless urban neighborhoods in the name of progress. Large-scale urban renewal did the same. But while Conn doesn’t hesitate to eviscerate the architects of the highway system wholesale, he’s repeatedly eager to offer at least partial excuses for the tremendous missteps of the urban renewal crowd. Why? Because they possessed the twin left-wing graces of compassion and a willingness to spend public money. He grades on a curve; good intentions count in his book.

Conn outlines both left- and right-wing critiques of various urban renewal policies, but weights them differently. Left-wing criticisms are deemed undeniably true, while right-wing views—even those Conn generally agrees with, such as Martin Anderson’s —are dismissed as being anti-government. It’s a grating pattern, repeated throughout; Conn wants us to remember the good intentions behind a failed program, while reminding us of the bad faith of the failed program’s critics.

Anti-urban government policies undoubtedly contributed to urban decline in the late-twentieth century. City dwellers flocked to federally underwritten homes in suburbs connected by federally constructed roads. Sprawling Sunbelt cities looked nothing like their predecessors on the East Coast. Those who moved there, as Conn rightly notes, were often small government conservatives suspicious of government spending. Largely absent from Conn’s narrative of the growth of suburban and Sunbelt America, however, is mention of the crime, dysfunction, and high costs that drove people out of the cities in the first place. Conn views cities as powerless vessels, tossed asunder by waves of national scale.

Migration from the cities to the suburbs wasn’t all rosy, to be sure. Urban problems followed along with the people, and heavily suburban cities often proved worse at dealing with these problems than their more densely packed predecessors. Conn’s criticism of the legacy of sprawl is strong, and his account of suburbanites’ complaints rings true:

They complain about all the time wasted in traffic, and they lament the ugly sameness of it all. Most of all, they report that these places leave them feeling alienated and alone. They mourn the loss of some sense of community that these sterile physical and social environments have failed to give them. On the other hand, many of them reject the idea that any collective public action can or should be taken to address these problems.

Trouble is, Conn hates the suburbs so much he can’t bring himself so much as to acknowledge their benefits. Movement from the cities to the suburbs wasn’t driven simply by tail-finned, Goldwaterite selfishness. Compared with a life of urban renewal, school busing, crime, and crushing taxation, life in a cul-de-sac offered far more real community to millions of Americans. Whatever you think of them, the suburbs have clearly satisfied the hopes and wishes of many Americans more effectively than cities have over the last half-century.

Urban America is in better condition today than it was at the dawn of the progressive era. Some conservatives remain hostile to urbanism even now, when it boasts many more functional examples. This faction, as Conn notes, often opposes even sensible efforts to improve cities. But the best means of winning over these conservative suburbanites is not by lambasting them as anti-urban reactionaries, but by acknowledging that they have excellent cause for suspicion.

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Restarting Christchurch

Photo by subhachandra

In the early afternoon of February 22, 2011, a magnitude 6.3 earthquake struck downtown Christchurch, New Zealand. For nearly five months, the city had lived with constant tremors. But from the first seconds of February’s quake, residents knew this one was different. John Suckling, the owner of a local shoe store, was at home preparing an advertisement for the next day’s paper when, at 12:51 P.M., he felt his house begin to shake. Less than a minute later, 185 people were dead and another 11,000 injured. Thousands of buildings collapsed in an instant. Christchurch had faced disaster before, but not on this scale. The city’s unlivable “red zone” stretched over an area equivalent to two-and-a-half Central Parks. The bill for the damage came to $40 billion, or roughly 20 percent of New Zealand’s GDP.

Suckling had just been appointed chairman of a group of local business and property owners, and they began meeting within the week to craft a recovery plan. Economic demand would soon return and, like a river flowing around a rock, life in Christchurch would continue along the course of least resistance. Suckling and his fellow merchants feared that the rebuilt city would become simply a galaxy of suburbs, without a center. “We believed,” said Suckling, “that those places where residents were proud of their cities were cities that had vibrant downtowns.”

Suckling and the downtown business group hatched a brilliant idea: construct a shopping mall out of simple and inexpensive shipping containers. The team placed an order, and in late September, a ship drew into Lyttelton Harbor with 64 containers stretched across its bow. The Christchurch government was “very keen for something to happen,” Suckling says; it gave the group all the support it needed. “Between all parties,” he says, “there was total agreement on the concept, design, and deadline.” Perhaps the greatest barriers to development in any city are land-use and zoning regulations. The Canterbury Earthquake Recovery Authority, formed to coordinate Christchurch’s rebuilding, helped the group bypass most traditional regulations.

On October 29, 2011, the project, named Re:START, was opened for business. Framed by the iconic Ballantynes department store and situated on the blank spaces left behind by demolished Victorian and Edwardian buildings, the shopping complex became Christchurch’s new downtown—a human-sized, retail city. Some 40 retailers came out for opening day, including many of the city’s established shops that had been around for a century or more. “Our main objective,” Suckling told me, “was to enable smaller retailers to reestablish their businesses reasonably close to where they used to be.” More than 20,000 people visited Re:START on its opening weekend.

Re:START doesn’t look like a container park. It is made to be beautiful to the eye, not just in its profusion of bright colors, but also in the way it draws visitors into little lanes and past the sharp edges outside to the soft interiors inside. Re:START was designed for density and walkability, too. “The public and tourists loved how we created a shopping precinct out of containers,” says Suckling. “We also made it look colorful, convenient, and interesting.” The concentration of business helped spur more commercial activity, both inside Re:START and beyond. Clusters of new tourism and hospitality businesses soon formed on the outskirts of the downtown core to serve the influx of Re:START visitors. Artists also gathered there, as did Christchurch’s young, skilled workforce, who, prior to the earthquake, had been leaving the city for greener pastures.

Re:START’s new urbanism infused the rest of Christchurch with more opportunity than it had had on the day of the earthquake—an impressive testament to what can be achieved when cities allow themselves to think unconventionally.

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Failure to Thrive

Illustrations by The Heads of State

America’s economy has grown for nearly six years and with particular vigor over the last six months. By historical standards, we’re due for another recession. When that downturn comes, it will mark the end of what has been, recent months notwithstanding, a weak recovery. Even though private employers have added nearly 3.6 million jobs since the beginning of last year, the number of American workers is still only roughly where it would have been by the end of 2008 had the financial system not cratered that dark September.

Several numbers point up the shortfall: if employers had added jobs after this recession as fast as they did after the short recession that ended in 1991, we’d have nearly 128 million private jobs now, not about 119 million. Then, too, not all jobs are equal. A family with two breadwinners made slightly less money in 2013 than in 2003, inflation-adjusted, census data tell us. A single-earner family fared much worse, taking in less than a family dependent on one worker made back in the mid-1970s. And many part-time workers want full-time jobs, as well as more predictable schedules.

Why has the recovery been so soft? It’s easy for Republicans to blame President Obama or for Democrats to blame President Bush. But the truth is less partisan, and harder. As three of the best recent accounts of the economic crisis explain, the recovery has disappointed because the economy was fragile long before it broke. For decades now, the United States, like the rest of the West, has depended on massive levels of consumer debt to mask weaknesses in jobs and income. As American workers made less money competing with Asians and Eastern Europeans for jobs, they borrowed more, until the U.S. economy owed trillions of dollars to the rest of the world. The economy crashed because its debt levels were unsustainable.

Regrettably, President Obama hasn’t used the crash as an opportunity to rebuild with stronger foundations. Instead, we’ve spent seven years doubling down on the mistakes that got us into this mess. It’s not too late, though, to change course; but first, it’s necessary to see what happened—and why.

After recessions, economies usually bounce back—but to what, in America’s case? By 2008, the U.S. economy was disastrously out of whack. In his 2014 book, , Martin Wolf, the ’s chief economic commentator, explains how the U.S. and the rest of the West failed in the globalizing decades leading up to 2008. In a healthy free-trade system, one country makes a product or delivers a service because it’s good at it (Costa Rica and bananas, say, or the U.S. and movies), and sells it to another country; in return, the exporting country imports something that it’s especially good at making. Since most countries tend to be good at making or doing something, none should be left buying a lot more than it sells—at least, not for years on end. And if a country were to try to keep buying more than it sold, other countries eventually would make it stop, by refusing to extend credit for otherwise unaffordable purchases.

That’s not what happened between the United States and China—now the two largest economies in the world—particularly in the new millennium. Wolf rightly recognizes that millennial globalization has “produced impressive results, notably the successful integration of China . . . into the world economy, together with large reductions in mass poverty” in that country, India, and elsewhere. Still, Wolf shows, “the once-in-a-century impact of the rise of China” hasn’t gone all that smoothly. “A crucial aspect” of the global economic crisis was “the rise in global imbalances, with emerging economies deciding to export capital to advanced countries that the latter proved unable to use effectively.” Nowhere was the imbalance greater than between the U.S. and China. Three decades ago, the two countries had evenly balanced trade—we sold them a small amount of stuff, and they sold us a small amount of stuff. By 2008, however, the U.S. had accumulated a $1.8 trillion trade deficit with its fast-expanding trading partner, government figures show. In simple terms, that means that we bought nearly $2 trillion more from Chinese producers than we sold back to Chinese purchasers. Such a massive disparity can’t last forever.

In a real free market, the imbalance would have partially fixed itself. As America bought more things from China, the value of China’s yuan would have gone up, making its exports pricier, and thus less competitive. Instead, Wolf observes, China, keen to keep its job growth exploding by maintaining a high level of exports, artificially kept the value of its currency lower than it should have been, thus keeping those exports cheap. It did this by holding on to the U.S. dollars it received for its exports, instead of converting them into yuan. By 2008, China held $2 trillion in U.S. currency, mostly in Treasury bonds and mortgage bonds. China’s insatiable appetite for U.S. debt allowed Americans to borrow more money more cheaply—temporarily easing the pain for American workers who’d lost jobs and income to global competition. (Former Fed chairman Alan Greenspan warned of the same imbalances in his 2007 memoir, arguing that in the face of our big deficit with China, America had little control over the Chinese money that was flooding U.S. credit markets.) But, as Wolf concludes, “transferring the excess savings of the Chinese into the wasteful consumption of Americans made no sense. Generating a huge financial crisis as a result was worse than senseless.”

Wolf doesn’t blame the free market for the cataclysm. China’s monetary policies fall under the category of “state capitalism,” he believes, in which government leaders manipulate markets to achieve desired political outcomes. Indeed, he laments that the crisis has dealt a “blow to the prestige of Western financial capitalism”—and to democracy itself.

In , Daniel Alpert argues that America and the global economy are struggling with “an oversupply of labor, productive capacity, and capital.” Too many people and too many dollars are chasing after insufficient work and investment opportunities, thinks Alpert, a veteran financier who founded the boutique investment bank Westwood Capital 20 years ago.

The collapse of the Soviet Union and the state-directed opening of China’s economy helped “doubl[e] the global labor supply in the free market in the past two decades,” Alpert writes. “Today, the world has a market labor force of roughly three billion people,” and “nearly half live in China, India, and the former Soviet Union.” There are thus more people around the world looking for work—and they push the price of labor (wages) down. Ironically, Alpert says, “the demise of the socialist experiment” in Eastern Europe and Asia “set the stage for the greatest threat yet to the supremacy of the United States and other advanced democracies.”

If you’re a software engineer in India or a luxury shop clerk in Beijing, life has never been better. But there’s no getting around it: such global gains have come at the expense of U.S. workers without solid college or technical education—a group that still comprises a majority of working-age Americans. The last time workers received at least a half-share of the nation’s GDP was 1974, Alpert reminds readers, and the reason is that “labor is no longer a scarce or valuable resource.” The fact that 41 percent of American children are now born out of wedlock—more than double the 1980 rate—has hurt workers, too, a cultural change Alpert doesn’t address. One working parent generally can’t support a middle-class family in the U.S. up to the same standard that he or she did in the past, as those census numbers show. And if the working parent is a single mother, reaching anything close to that level of support is nearly impossible.

“Competing against nearly two billion new workers from poor countries” was never going to be easy, Alpert acknowledges. But America made the “worst possible choices” as it tried, or didn’t try, to help beleaguered working-class and middle-class workers. Rather than finding ways, say, to reduce education and health-care costs to ease the burden for people losing ground, the government—via loosened regulatory standards for mortgages, low interest rates, and other measures making it a cinch to borrow—“pacifi[ed] millions of Americans with easy credit.” Sixty percent of Americans saw their real incomes fall, but they didn’t complain because the “shower” of easy money “allowed them to make up for lost income and maintain living standards—at least for a while.”

The result: private debt “on a scale no nation has ever before confronted.” Household debt in America, driven especially by mortgages, more than tripled between 1981 and 2008, while the population expanded by just 37 percent. As countries with cheaper workers piled up surpluses, they invested that money in American consumers with “a seemingly limitless appetite for incurring debt of every kind.” By the end, “borrowers were sought everywhere,” until the only ones left were people who couldn’t even make their first mortgage payments. “Instead of a balanced rise of both supply and demand”—that is, newly rich workers around the world demanding a roughly comparable amount of goods and services from the countries to which they were selling—“we’ve seen a totally skewed situation”: the trade and financial imbalances that Wolf describes.

No politician had the will to stop Americans from getting drunk on debt—let alone address the causes of the profligate borrowing—before it was too late. But why has the recovery been so weak? In their 2014 book, , Princeton economics professor Atif Mian and University of Chicago finance professor Amir Sufi explain why the recovery was never going to be like a typical postwar business cycle, with a quick bust followed by a strong boom. Mian and Sufi, like Wolf and Alpert, point to household debt as a chief culprit of the collapse. They go a step further, likening the crisis to that of the 1930s. “Both the Great Recession and Great Depression were preceded by a large run-up in household debt,” they note. Between 2000 and 2007, household debt doubled, to $14 trillion. The debt-to-income ratio rose from 1.4 to 2.1, meaning that people were using debt to buy things that they couldn’t afford—putting them more in need of the wage gains that they weren’t getting to pay for the higher debt. Similarly, “consumer debt as a percentage of household income more than doubled during the ten years before the Great Depression,” the authors explain, quoting 1930s-era economist Charles Persons on the stark reality unveiled by the market meltdown: “Our period of prosperity in part was based on nothing more substantial than debt expansion.” That’s not entirely true; then, as now, America was producing the real innovations that fire economic growth. But our optimism—or ability to delude ourselves—outran the pace of those innovations in both periods.

The Great Recession, like the Great Depression before it, was marked by a devastating consumption crunch. When people couldn’t borrow anymore, they couldn’t maintain the freewheeling spending that had powered the economy for the previous decade. And the authors present data from across more than a century, and across the world, showing that “the bigger the increase in [household] debt” before a recession, “the harder the fall in spending.” Ireland had one of the wildest debt binges before 2008, and then one of the most acute spending contractions.

In America, the fall in spending seemed at first mysterious to some, especially those living in regions where housing prices hadn’t caved. But the effects of burst housing bubbles radiated everywhere. Indiana’s housing prices hadn’t dropped significantly when the crisis worsened, for example—but Monaco Coach, headquartered there, nevertheless had to lay off 1,430 people in 2008 as house prices in places like California’s Central Valley, Florida, and Arizona plummeted. Customers from those and similar locales could no longer afford to purchase the firm’s camper-style vehicles. Owing more money on their houses than those houses were worth and struggling with heavy credit-card debt, customers—and the jobs associated with them—weren’t coming back anytime soon. The heavily indebted cut their spending three times more severely than did those who owed less, the authors point out. In California’s Central Valley, as residents’ net worth fell 50 percent, spending fell by almost a third. As people cut back on manicures and babysitting, manicurists and babysitters grew poorer, too.

The fact that the people collectively owing the most (relative to income) were the poorest, with their “wealth” tied up in their homes, widened the inequality in the U.S. economy, explain Mian and Sufi. Before the recession, the top 10 percent of American households owned 71 percent of the nation’s assets; by 2010, that percentage had climbed to 74 percent. As the authors note, our “financial system’s reliance on mortgage debt . . . concentrate[d] the risk on the homeowner” least able to bear that risk. “The net worth of poor home owners was absolutely hammered during the Great Recession,” they say, “collaps[ing] from $30,000 to almost zero.” The people in the lowest income quintile found themselves back where they’d been, in terms of savings and assets, in 1992.

If not for politics, a straightforward solution to this debt overhang would have been to cut the amount of money that people owed on their homes. Mian and Sufi scathe Washington for failing to call for (or even require) such reductions. “Principal forgiveness” on mortgages “would have resulted in a more equal sharing of the losses” from the housing crash, the authors argue, because lenders—wealthier people—would have lost as much as their poorer borrowers. In , Wolf makes the same point about Germany and Greece. Germany, like most creditor nations, “insists that the difficulties of borrowers are entirely their fault.” Rather than blaming borrowers, it makes more sense, Wolf believes, “to put the blame on the stupidity of creditors”—such as surplus-rich Germans who lent to debtors in Greece, Ireland, and other nations. In practice, neither party succumbed as much to stupidity as to a herd mentality. But it’s certainly fair to make both sides take their losses; protecting creditors, but not debtors, is bad market economics, as well as unjust.

Regrettably, Mian and Sufi contend, housing policy during the earliest years of the Obama administration adhered to the view—advocated ceaselessly by banks and government officials close to banks—that reducing mortgage debt would inflict substantial harm on the banks and that this “would be the worst thing for the economy.” The authors compare the leaders of 2008 unfavorably with the leaders of 1819, when Washington, as well as the states, “responded aggressively to the needs of indebted individuals, in particular farmers,” by pushing for debt forgiveness.

But another force stood in the way of mortgage reductions: the American public. Mian and Sufi cite CNBC personality Rick Santelli’s famous anti-bailout outburst in 2009—the one that launched the Tea Party—as a key force in discouraging mortgage write-downs. “Natural reactions” to a debt binge “are moral judgment and outrage,” the authors admit. So Americans wound up stuck with all their bad debt—and an economy that would struggle to grow through it for years to come.

Washington’s post-2008 actions, along with similar steps taken by the rest of the world, set the postcrash economy on the wrong path, all three books maintain. Though the authors don’t say so, Obamacare hardly helped, imposing an expensive new mandate and regulatory uncertainty on employers as they struggled with the steepest drop in consumer demand in many decades. But the most obvious problem with recovery efforts has been government reliance on yet more household debt to ignite growth. As Mian and Sufi acidly put it, the West is “trying to cure a hangover with another binge-drinking episode.” Alpert agrees, noting that “in a world awash in cheap money, churning out even more cheap money can’t fuel an economic recovery”—at least not one that avoids the same problems that caused the crash. For his part, Wolf frets that “our big problem is the addiction to ever-rising debt, and the most worrying debt is not the public debt with which policymakers are obsessed but private debt.” Writes Wolf: “The belief that . . . private borrowing is the cure has survived all that has happened. The chances are good that reliance on this surprisingly durable piece of conventional wisdom will lead to another and still bigger crisis.”

Since 2008, the Federal Reserve has kept its interest rates at record lows—zero, to be exact—to spur banks to keep lending to people who really can’t afford to borrow any more. A grab bag of government policies has kept mortgage rates at record lows, as well. House prices are finally moving up, and people buoyed by that development are borrowing and spending again. Household debt, after falling between 2008 and 2011, is once again mounting. Our trade deficit with China, after shrinking markedly in 2008 and 2009, is reaching new records. There’s zero reason that America should want young people to keep borrowing from our key trading partner to pay more for houses, as well as for imported goods—unless, of course, the point is to keep a broken system grinding away for just a while longer.

And though the 2009 stimulus law pumped $787 billion into the economy and cushioned the full impact of the recession, that money failed to put the economy on the right path. About one-third of the stimulus money went to households via tax cuts. Such a policy was “much less effective than household-debt restructuring”—which would have saved the same households money on their mortgages—when the “fundamental problem with the economy is excessive private debt,” observe Sufi and Mian. Moreover, adds Alpert, this Keynesian fix breaks down when “that cash may just result in busier Chinese workers in Shenzhen.” Another third of the stimulus flowed to state and local governments to avoid layoffs of government workers. Firing public workers during a recession isn’t a good idea. But the real problem that state and local taxpayers face is excessive bills for public-sector pensions and benefits. Washington made no move to tie the stimulus to long-term benefit cuts, which would have put American finances on surer ground.

Much of the remainder of the 2009 stimulus went to infrastructure. Spending the stimulus and then some “to repair and expand the nation’s infrastructure would have had an enormous impact,” Alpert writes, “but that’s not the stimulus Congress passed.” One problem was that the most complex infrastructure projects, which the nation needs, were not “shovel-ready.” Instead, state and local governments spent their infrastructure money on repaving and repairs—necessary work, yes, but not strategic investments for future growth. But given that the recession was always going to be lengthy, we would have been better off spending the money more slowly and smartly.

What, then, should we be doing economically, going forward? The goal remains what it should have been back in 2008: get the economy to generate higher-paying jobs and change the incentive structure for spending beyond our means so that we don’t sink ourselves—and the nation—in unpayable debt.

It may be more efficient to start with the symptom, not the problem. If you’re shooting heroin because you’re unhappy, it makes sense to stop shooting heroin—and figure out why you’re miserable. Modern history shows that as long as we can rely on debt to mask our economic weakness, we will. Thus, the nation must finally fix the “too-big-to-fail” financial system that has channeled so much bad debt to American borrowers, assuming that it will never pay the consequences of its risky lending. The “entire financial system is based on explicit or implicit government guarantees,” say Mian and Sufi, acknowledging the decades-long history of taxpayer bailouts of lenders. (See “Too Big to Fail Must Die,” Summer 2009.) “The idea that financial firms should never take losses is indefensible. They are in the business of taking risk.” In a useful overview of proposed financial reforms over the decades, Wolf describes, without endorsing, everything from modest new limits on borrowing by the financial industry to abolishing banks altogether and having government create money directly (doing so would be “politically dangerous,” he says, with considerable understatement). But the simplest fix for finance is strictly to cap borrowing, for lenders and borrowers alike.

Authors of all three books accordingly take aim at mortgage financing. Of America, Wolf notes that “in a country supposedly dedicated to the ideals of market economics . . . the most important social function of finance—lending for home purchase—has become almost completely nationalized,” thanks largely to the government takeover of Fannie Mae and Freddie Mac, the nation’s biggest mortgage lenders. The authors all agree with most economists that America should stop subsidizing mortgages through the tax code, by letting borrowers deduct mortgage interest when they pay their taxes. Instead of incentivizing home borrowing in this fashion, Alpert suggests, we should have a five-year tax holiday for Americans who want to put money in savings accounts and other safe investments. A deeper reform would go further, with the government matching savings and investments on a sliding scale for people earning less than six figures.

Mian and Sufi offer a particularly creative reform for mortgages. They suggest that America address “the inflexibility of debt contracts” by making mortgages act more like stocks. That is, if home values in a particular area fell by 30 percent, a homeowner’s monthly mortgage payment would decline by 30 percent. The balance owed would automatically fall, too. Payments would rise again (up to the original amount owed) as home prices increased. To compensate themselves for this “automatic principal reduction,” mortgage lenders would keep 5 percent of the profits from any home sale or refinancing. Such a system “would have benefited everyone” in 2008 “by protecting the entire economy against foreclosures and the sharp drop in . . . spending,” say Mian and Sufi. What they call “automatic stimulus”—financed by private lenders—would have saved 2 million jobs, they claim.

What else can the politicians do to boost incomes and spark long-term, substantial economic growth? Alpert and Wolf agree that it’s not too late to do the infrastructure spending that we should have done more than half a decade ago. Undeterred by the American political class’s lack of interest in roads, bridges, dams, and transit, Alpert suggests a $1.2 trillion, five-year public investment in infrastructure, which, he says, would create 5.5 million jobs. Alpert is willing to anger Democrats by calling for the suspension of federal laws that artificially drive up wages for construction workers on government-funded infrastructure projects.

Alpert also warns that we should build the infrastructure—a fundamental distinction that many stimulus advocates missed the first time around. “Japan built highways to nowhere when it should have invested more in cities,” he says. One project he suggests is “the new rail tunnel under the Hudson River” between New York and New Jersey, which New Jersey governor Chris Christie abandoned in 2010. The tunnel “would not only create thousands of jobs, but also save [commuters] millions of hours.”

Indeed, infrastructure’s impact on the private sector is more important, long term, than any temporary effect its construction might have on job creation. The purpose of bridges and subways is, as Alpert implies, to help private-sector workers get to work faster and thus be more productive. New York City punches far above its weight in terms of productivity and income, but it risks weaker economic growth over time if it fails to invest in better subways and buses to keep up with its swelling population. We might as well spend the money now, putting some of the cheap credit flowing in from China toward boosting efficient private-sector production in the years ahead, rather than sustaining our debt-enabled consumption. Alpert also says the obvious: we’ve still got to cut health-care and education costs.

None of these things is impossible. So why haven’t we done any of them? The authors sometimes make the wrong diagnosis. Mian and Sufi are incorrect, for example, in saying that “the financial system benefits very few people, and those few have a vested interest in staving off any reform.” The problem is the reverse—that the current economic system benefits of people—at least, in the short term. Take away people’s cheap mortgages by making the reforms that Mian and Sufi suggest, and they’ll understandably scream. Take away the health-care insurance they get from their employers and make them pay cash for it directly, and they’ll scream, again. That’s why nothing much has happened.

Wolf castigates the political and business classes’ failure to level with the public in the strongest terms. “The economics establishment failed,” he says flatly, and their continued failure will have serious consequences, he warns: “Angry and anxious people are not open to the world.” That is: if elites want to save free global markets, they should do a better job of responsibly governing them. Otherwise, next time will be worse. “The loss of confidence in the competence and probity of elites inevitably reduces trust in democratic legitimacy.” That’s already happening, as voters around the world grow ever more dissatisfied with mainstream politicians.

After the Fall: Saving Capitalism from Wall Street—and Washington.

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Chris Christie’s Pension Victory

Photo by Olivier Douliery/Getty Images

New Jersey is one of America’s most heavily indebted states. Over the decades, the state’s Supreme Court has liberally interpreted its constitution to allow the governor and the legislature to heap numerous new obligations onto taxpayers, without voter approval. As a 1991 article described the situation, “The New Jersey courts have eviscerated the [state constitution’s] debt limitations.” But now, in a big victory for Governor Chris Christie and a defeat for public unions, Jersey’s Supreme Court has ruled that it cannot compel state government to appropriate money to pay off Jersey’s big pension debt. Only the state’s voters, the court ruled, have that right. The decision may force unions back to the bargaining table, as Christie seeks new reforms to cut the still-growing costs of the pension system.

This is only the latest chapter in Jersey’s long drama over government-worker pensions. Since the early 1990s, Garden State governors and legislators granted public workers pension benefits unbacked by adequate funding, and then used financing gimmicks to hide the growing debts. Unions often traded political support for the enhanced benefits and ignored the lack of funding. They imagined that one way or another, the state would have to pay up. The maneuvering produced one of the nation’s worst-funded state and local pension systems, and Christie made addressing its woes one of his earliest concerns. In 2011, the state passed reform legislation rolling back some benefits, increasing the retirement age, and requiring greater contributions from workers. Jersey also committed to a steadily rising schedule of appropriations to pay off the system’s debt. But the changes didn’t do enough. A mediocre economic recovery hasn’t helped, and the price of paying off the debt has continued to soar.

Thanks to the 2011 legislation, the state would have been required to make a $2.5 billion payment this year—rising to nearly $4.5 billion by 2018—out of its budget into the pension system. Christie refused to make a full payment, instead agreeing only to pay for the pension costs being earned by current workers—not the debt accumulated from years of gimmicks, which Christie described as “the sins of the past.” The Democratic-controlled state legislature tried to compel the governor to sign a $1.5 billion tax increase, which would have been enough to cover the expenditure but would have left the state still facing billions of dollars in future-year costs. Christie instead commissioned a bipartisan pension panel that recommended further pension reforms, including closing the current defined-benefit plan, transferring its assets to the state’s government unions to manage, and creating a new hybrid pension plan for state workers. Unions refused to go along, hoping to win victory in the courts.

The court ruled that the 2011 legislation mandating money to pay off the pension debt was unconstitutional, because no legislature or governor has the right to bind itself and future officials to a mandatory, long-term debt-repayment scheme. Only the state’s voters can do that, through a direct ballot initiative. Now Christie has greater leverage. If he can use the high court’s ruling to win greater cost cuts, the state will benefit. In the meantime, Jersey’s pension liabilities continue to increase.

As its latest ruling indicates, the New Jersey Supreme Court has proved surprisingly friendly of late to taxpayers and voters on the issue of retirement benefits. Court rulings in about half the states have provided far more protections to government-worker pension benefits than private-sector workers enjoy. In many states—including California, New York, Arizona, and Illinois—reformers have found it virtually impossible to change pensions for current workers, even for work they have yet to do, thanks to state courts’ interpretations of local laws. As a result, states have struggled to cut pension debt. By contrast, the New Jersey Supreme Court has previously ruled that it was legal for the legislature to require greater pension contributions from workers. In invoking voters’ rights to weigh in on any long-term plan to retire pension debt, the court was far more cognizant of taxpayers’ rights than the Illinois Supreme Court, which recently quashed that state’s pension reforms and bluntly suggested that the Illinois legislature could have solved its pension problems with higher taxes.

Some reformers are working to give voters greater control over these issues. Late last week, former San Jose mayor Chuck Reed and former San Diego city councilmember Carl DeMaio announced a California pension-reform ballot initiative. It would, among other things, require voter approval of any pension-benefit increases for government workers. That might help to short-circuit the power of public unions, who work hard to elect union-friendly legislators. These legislators then wind up passing benefit increases for the unions, with taxpayers on the hook.

In the meantime, Christie has another shot at fixing a 25-year-old problem that could hobble the fiscal and economic future of the Garden State.

City JournalShakedown: The Continuing Conspiracy Against the American Taxpayer.

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Bloodless Headers in Lifeless Papers

Photo by U.S. National Archives

For centuries, sloths have been caricatured as the essence of laziness. But the stigma no longer applies. (the two-toed sloth), has been replaced by (the creator of headlines for daily newspapers and tabloids). Gone are the raffish days of HEADLESS BODY IN TOPLESS BAR, the immortal headline written by V.A. Musetto, who died this week at the age of 74. Now, prudently avoiding any semblance of originality, headline writers reach into a deep bag of bromides. No follow-through is attempted, nor any examination of stats or claims. Worse still, these worn-out headers are offered as if they had never been printed before.

The run-up to the 2016 presidential election presents a cornucopia of clichés:

ANOTHER GOP HAT THROWN IN CROWDED RING

HILLARY DUCKS PRESS

O’MALLEY, WARREN, CHRISTIE, WALKER, CRUZ, CARSON, FIORINA, RUBIO (AD NAUSEUM) CARRIES HEAVY BAGGAGE

But headline writers don’t need politics to bore from within. With little effort, they can render their papers fit for recycling before reading. Here are a few chestnuts culled from recent dailies. No doubt readers have their own favorites:

PLAGUE OF OBESITY HITS AMERICA

Hominid Skull Older Than Originally Thought

Poor Get Inferior Medical Care, Study Finds

House Contained 96 Cats, Dogs

Rock Star in Rehab After Overdose

Retirement “A Period of Stress” Say Psychologists

Pope Decries Violence

Isis Vows Revenge

Men, Women Think Differently, Survey Suggests

Sharpton Accuses Police of Bias

Genes, Diet, Exercise Keys to Longevity Say Researchers

Hamas Vows Revenge

Scientists Argue Over Global Warming

“Assumed Phone Call Was Joke” Says Nobel Prizewinner

Casino Transforms Life for Western Tribe

Boko Haram Vows Revenge

Professional Sports Rife with Corruption

Unruly Crowds Protest Globalization

Hezbollah Vows Revenge

According to the Pew Research Center, millennials no longer get their information from the papers. They are rapidly being joined by other groups, who turn to the Internet and cable for news. Small wonder, then, that advertisers are spending their money elsewhere. Can there be any doubt that this headline will be parroted incessantly in the near future—and the far one?

NEWSPAPERS IN STEEP DECLINE—JOURNALIST JOBS LIKEWISE

City JournalThe Eskimo Hunts in the Twin Cities.

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Our Parties, Part Two

THE GRANGER COLLECTION, NYC

The intellectual founder of the GOP

Our parties, as liberal and conservative, oppose each other over progress in the drive toward ever-greater equality. In defending progress, as we saw in the last issue, liberals run into the difficulty that equality seems impossible to define and heedless in its never-ending motion. (See “Our Parties, Part One,” Winter 2015.) Liberalism claims to be more rational than custom, tradition, and common sense; but liberalism, or progressivism, relies on simpleminded principles and unthinking passion. It suffers from faults that it fails to acknowledge—the clumsiness of administering its programs, their cost, and its lack of prudence in dealing with foreign enemies (as opposed to its skill in defeating conservatives at home). Conservatives, for their part, face the difficulty of countering the impression that progress is inevitable and irreversible, and so of generally playing defense and reacting to their opponents’ initiatives. They have the faults of progressivism to work against but have enjoyed more success in electing conservatives than in reversing so-called progress. If liberals are the party of government, conservatives are the party of responsible government, their responsibility often being manfully to make the best of a bad situation.

Liberals have the advantage in the battle over progress because they call for more democracy in a democratic country, while conservatives find themselves stuck with defending inequality. And the liberals’ advantage isn’t confined to this point. Liberals also say that they are cruising on the tide of History, the winning side, as well as fighting on the side of justice, the right side—thus claiming credit for both greater power and greater morality. With the entitlements they favor, they appeal to citizens’ desire to live securely when young or old or poor—thus satisfying conservative instincts and attaching people to liberal programs. That fusion, bringing the spirit of conservatism to the support of liberal innovation, leaves the party of conservatism to defend the liberal status quo. Or conservatives can attack the status quo and try to reform or revolutionize it, either going slow with reform or seeking to return to an older, better day. If they go slow, they must accept and take responsibility for improving the liberal status quo; if, refusing this responsibility, they try to go back to some better time in the past, which serves as a standard (the “Republican Revolution”), they may frighten the country—and also themselves. Moreover, it probably is not possible to make just one of these choices and stick with it. Reformers will find themselves in need of a standard or principle with which to resist the liberals; revolutionaries will find it necessary, at some point, to moderate their views in order to win.

The way to understand this dilemma—since it probably is inescapable—is to consider more frankly the objection to liberal progress toward ever-greater equality. This objection, in practice, amounts to the defense of inequality by conservatives or Republicans. Democrats are the inclusive party: their drive toward equality seeks to include as equal all those presently considered unequal, those who lack security and are, in one way or another—by incapacity, lack of virtue, or bad luck—vulnerable. Republicans are the exclusive party: they believe that, while all share equality of rights, some people are better than others and deserve to be honored or rewarded for this. I call them the party of virtue, though they do not make that claim themselves. They would probably speak of “values” rather than of virtue, fearing the prudish connotation of that lovely antique word. They would also probably call themselves the party of liberty and reject the boastful claim of being more virtuous, so invidious in a democracy. But they want not any liberty but the virtuous use of liberty—liberty used to the end of supporting and honoring virtue, as opposed to lazy or licentious liberty.

Republicans are, of course, the party of money as well as virtue. Anyone particularly attracted to either virtue or money is likely to be a Republican, the obvious problem being that these two things are not identical. Recently, many of the Wall Street and technology rich have been supporting the egalitarian Democrats, thus challenging the association of virtue and money. (In a way, they actually illustrate the subordination of money to virtue, for they find virtue in lack of virtue as Republicans see it—in same-sex marriage, for example.) Republicans try to conceive virtue and money as close, if not identical, viewing success in money as justly earned, the money as a consequence of virtue. They believe in the free market as an institution both democratic and open to all—and just in its rewarding of merit. In general, with the idea of “getting ahead,” Republicans do their best to reconcile the inequality of virtue with the equality of democracy.

Democrats say that inequality is a matter of privilege, which is luck, not virtue. They say this especially about gaining wealth, but the more sophisticated will say the same of honors gained through talent or intelligence. They reserve their indignation, however, for those wealthy in money and tend to give a pass to those rich in another sense. Those outstanding in honor or public esteem and recognition are not attacked, as their ranks would include professors (at least in the opinion of professors); Democrats do not object to the inequality of the talented, the intelligent, or the celebrated on side. Today, those uncomfortable about being wealthy in money will be Democrats, even if they are rich; those convinced that the wealthy deserve their wealth will be Republicans, even if they are poor and perhaps even envious. To be a Democrat is to believe that government must be concerned, above all, with counteracting ill luck; to be a Republican is to believe that government should sustain, rather than punish, the virtue of citizens and incidentally help out those who, through no fault of their own, do not succeed in managing their own lives. In this way of regarding them, our parties look different from the way they look in their division over progress, where liberals have the upper hand. Now, it is conservatives who take the initiative and stand up for something, rather than always being against something. They make the positive assertion in favor of virtue, to which liberals must react.

In doing so, conservatives follow a different, older political science from that of the progressives. John Stuart Mill, the patron saint of liberals, saw two typical parties in modern times: the party of reform and the party of order. The reformers held the beacon of progress in their advance. But noble as that advance might be, Mill recognized that it could cause some disturbance in society as it was being improved. He therefore awarded the party of order, the conservatives, with a positive function in this context. They were not to slink away defeated but instead to bring the discomposed and the grumpy—people like themselves—into line by stressing the need for order out of the temporary disorder of reform.

Recently, Yuval Levin, in his book , proposed an analysis of liberals and conservatives that traces the division back to Tom Paine versus Edmund Burke, with more philosophy than Mill’s division and with the advantage to Burke. If we are brave enough to go back to Paine and Burke to understand this division, though, we might as well return even further, to Aristotle. Aristotle also thought that there are two great political parties in society, but for him they are democrats and oligarchs (or aristocrats). Democracy, he maintained, wants to include all people as citizens and pursues equality to do so; oligarchy wants to divide the people into those who deserve to be citizens and those who do not. But democrats and oligarchs differ not only in what they want but in how. Democrats want instinctively a whole that includes everybody, and they are willing to sacrifice human differences in order to have it; oligarchs insist on a distinction between the few and the many, and they care less about the whole. Oligarchy represents our human faculty of deliberate choice based on reason, while democracy takes men as they are and is satisfied with, and takes responsibility for, what chance presents to us (“no matter who you are, we embrace you”). In this view, the whole that democracy craves is responsible for the equality that it espouses as a means to that end, as if the only way to make society whole is to have no condition for membership.

Each of the two parties starts by ignoring the other, though the oligarchs do so more deliberately. Yet human societies are characterized both by being wholes and by containing differences of rank or honor within those wholes. Every society is both democratic and oligarchic, in other words, but hardly ever does a society bring into balance those two tendencies, both of which are partial by themselves. Instead, all, or almost all, actual societies go with one tendency or the other. They absolutize their own preference to make a partisan whole. They think that because all men are equal in some ways, they are equal in all ways, or that because some men are better in some ways, they are better in all ways. Rather than cooperate, as would be sensible and just, the two parties attack each other, one whole against the other, driven perversely by their very reason and their sense of justice to absolutize their differences.

Abstractly, both tendencies are correct. We are born into a society that we must accept as by chance or providential, a whole that we have not chosen, and yet we cannot as humans prevent ourselves from admiring some of our fellows more than others. Surprisingly, in the Aristotelian view, the reform party is the oligarchical party, as it is the oligarchs who want to set a standard for inclusion or preferment in society. Even if the standard is wealth (in money) rather than virtue, it remains a standard. And those setting that sort of standard imply that there is virtue in making or having money. Aristotle agrees with those who deny that money and virtue are the same, but he argues with those who claim rank on the basis of money that they, too, really want virtue; so why not go for real or better virtue? His political science is aimed at the reform of both great parties by instruction. Democrats learn the importance of choice that permits honoring, oligarchs the need for a whole that includes all.

Alexis de Tocqueville presents Aristotle in modern dress, which means in the perhaps inferior circumstance that humans now live in a democratic age and do not have a viable choice between democracy and aristocracy (as Tocqueville presents it). Actually, our modern, democracy permits the few, known as elites, to gain mostly unopposed honor and advantage over the many as long as the opportunity for rising appears more or less equal and open. And if our democracy is less democratic than Aristotle’s, which was based on the rule of the indigent, so our oligarchy is more democratic than his, offering opportunity to many to rise.

Tocqueville says that the two great parties rest on two opinions “as old as the world.” One wants to restrict popular power; the other wants to extend it indefinitely. In this formulation, Aristotle’s two parties are stated in terms of only one of them: the democratic. Oligarchy appears as a naysayer rather than as the initiator of choice, so that both parties focus on the people—the of the people rather than the whole that they aim at. From the standpoint of power, democracy is about majority rule, and equality is not so much the overriding end as the means to majority rule—democracy in action as democratic government. An insistence on virtue would disqualify—or “marginalize,” if not exclude—too many of the people and thereby subtract from its power. So it was that the American Founders’ Federalist Party, which was responsible for the Constitution and which Tocqueville calls “aristocratic,” was overborne by the Democratic-Republican Party (precursors to today’s Democrats), in the election of 1800.

Since then, America has been democratic as a whole, and the distinction that James Madison tried to maintain in 1787 between a republic (good) and democracy (bad) has been abandoned. When today’s Republican Party formed in 1854, it was a popular party—but it was still a virtue party. Abraham Lincoln made sure of that and set an example for today, for the contemporary conservative need is to recognize the basis of conservatism in virtue and to make virtue democratically suitable to our time. Lincoln’s opposition to slavery took America back to the Declaration of Independence more than to the Constitution—as he put it, the Constitution was the “frame of silver” and the Declaration the “apple of gold”—and hence to equality, the principle that all men are created equal. This is the democratic principle in its extreme in Aristotle’s analysis, which Lincoln used to abolish the distinction between free and slave that Aristotle thought endemic to human life.

Perhaps Aristotle was not altogether wrong, because he understood freedom to be as much a human accomplishment, through virtue, as a gift from nature, perfect without a human contribution (the view stated by John Locke). As he explains it, nature gives men the capacity for freedom in their capacity for virtue (as opposed to animal instinct). It is up to men to free through education and politics by engaging the capacity for virtue. Lincoln took heed of nature’s requirement of virtue as well as nature’s gift of equality. Freedom is an attainment, a right to be free and be treated as free, not a right to be let alone and to be respected, regardless of how that freedom is used. For one thing, citizens should not use their freedom in elections to impose slavery on others, contrary to Stephen Douglas’s theory of popular sovereignty. Free citizens must be morally disposed against slavery so as not to tolerate it. Equality should be understood as equal rights, a “standard maxim” constantly looked to, though never perfectly attained. The Constitution tolerates slavery but only in a manner that does not fix it in our politics and in preparation for the day when free citizens will be willing to abolish it. Lincoln subordinates the Constitution to the Declaration by infusing it with the spirit of equality; at the same time, he specifies that spirit by explaining how the Constitution will bring it about with the free consent of citizens—for the South found itself coerced only when it refused assent to a president duly elected under the Constitution to which it had consented.

Lincoln had more to say about promoting virtue in a democracy. In a less well-known speech of 1857 to the Wisconsin State Agricultural Society, he speaks to farmers, “the most numerous class,” having the most votes, he remarks—not entirely as a joke. These farmers are not stupid peasants; they are always using their minds. They know the difference between doing one’s work and doing it , which they take pride in. They do their work thoroughly, which means with an eye to how it might be improved and become more productive. They know, therefore, that labor and education are compatible and that labor is not slavish (nor is it a punishment) but, on the contrary, makes one free. Free labor is earned freedom, freedom with virtue in the moral and intellectual as well as the physical world. It justifies the hope that the course of the world “shall be onward and upward.”

This is progress as it was presented before the Progressives, to which conservatives in a democracy might repair, a progress without the mindless extension of equality, the numbing guarantee of historical inevitability, the well-meaning oppressiveness of Big Government, the sludge of bureaucracy, and the curse of demagoguery. In one of the typical beauties of his rhetoric, Lincoln warns the Wisconsin farmers that he is going to flatter them—before proceeding to do so. And Lincoln gets away with it. Virtue, to do its work, needs an agreeable presentation. Lincoln, intellectual founder of the Republican Party, the less self-knowing party, is the rare American politician who has something to say about what he is saying.

What about virtue as the Democrats see it? Republicans do not have a monopoly of virtue because humans cannot live without passing “value judgments,” prizing some activities and some humans over others. Democrats have no difficulty in stating their virtues, even if they would not volunteer them. Their virtues are those of inclusiveness, which are two opposites: compassion and justice. Both aim at succoring the vulnerable and weak, but compassion comes readily from the heart, while justice comes out of indignation against the few and applies coercion to enforce the demands of the many. Compassion is undiscriminating, and justice is focused. Democrats prefer these virtues to generosity, the Republican virtue of giving freely and well. Generosity to Democrats seems hit-or-miss and arbitrary; its very voluntariness, they believe, causes those who practice it to puff themselves up above the rest of us—which is the general objection of Democrats to virtue. They would rather have taxation, universal in principle and rationally selective in application. This is the wholesome coercion of the whole. There can also be a wholesome exclusion from the whole of Republicans who deny the virtues of the whole, which focus on the vulnerable. For Democrats, the whole is that of those who put inclusiveness first.

For this reason, no cause is more congenial to the Democrats than environmentalism. The danger from climate “change”—here a scientifically neutral euphemism for “warming”—equalizes everyone by exposing the equal vulnerability of all. All are guilty, but the most successful are the guiltiest. Guilty of what? Of having made the most technological progress while inspired by the most advanced science. Fortunately, science has technological remedies for climate change, so that progressives do not have to turn against science and forsake its ambiguous help. In our woes of excess warmth, science will make us more equal and less vain about our triumphs over nature, together with two valuable political consequences: we shall have more Big Government and more redistribution of wealth from rich countries to poor ones. Science will be morally improved by turning it to the task of sustaining, not exploiting, nature; science will indeed secure the triumph of human morality instead of seeking to increase the bounds of human empire, à la Francis Bacon. Putting man back into his place—an equal place, not a separate kingdom—in nature will be true progress toward equality and sobering inclusiveness, to boot. When taken to the limit, Democrats are the party of ambition against all human ambition.

Since the 1970s, especially since the Supreme Court’s 1973 v. decision, Democrats have defended the right to abortion fervently and with increasing conformity, so that nowadays no strong abortion opponent would be with the Democrats. The vehemence of abortion supporters betrays a strong moral indignation against the other side for keeping women down, in the status of the second sex, bound to motherhood. Their Republican opponents, Democrats think, do not want to allow women to join men as equals, whether in career opportunities or in sexual liberation. Thus, theirs is a demand for inclusiveness in the new gender-neutral society created by feminism. Feeling on this issue runs high on both sides, but that in support of abortion is more remarkable because it runs against any maternal inclination and serves only to make career more convenient and sex more available. Women are slightly more than half of Americans, and though most do not follow feminism to its demanding extremes, all are open to the judgment that women are often put upon by men. Feminism has a stranglehold on American universities—not just threatening but actually squeezing—and an important role, at least a veto power, in the Democratic Party.

By its interest in safeguarding women’s careers, feminism has made its peace with capitalism and with the bohemian bourgeoisie of Hollywood moguls and would-be technocrats, thus enabling Democrats to dispense with Marxism, though not, of course, with Big Government. Democratic women like to work for the government and to be active in public-employee unions. Republican women are likely to appreciate the advantages of femininity, which grace the virtues of a woman, as distinct from those of a man. They might think that women are better than men in some regards, whereas Democratic women believe that the two sexes are roughly the same and that men treat women as inferiors accidentally and unnecessarily. Above all, Republican women believe in feminine modesty; Democratic women, if they practice it, do not believe in it.

A word should be added on libertarians, who haven’t yet entered into our discussion. Libertarians hold to the sovereignty of the free market as far as they can. The free market, they believe, substitutes for the government of men, who have special interests, as all men do, that disqualify them as just and impartial rulers. But since government is necessary to regulate these special interests, the rule of law is needed and desirable, and libertarians are not anarchists. They can be quite fierce and unbending in enforcing the law, if law has been the product of just consent in a fair system of representation. They do not like executive or judicial discretion, however wise or responsive to emergencies, because it clouds the calculations and expectations of free citizens. Libertarians are leftists of the Right or rightists of the Left. They can go left in company with Democrats, demanding abortion rights for women, or they can go right with Republicans, who justify inequalities arising from the accidents of a free market. Though they are the party of self-interested calculation, hostile to the demands of virtue, they can be quite surprisingly moralistic in defense of the freedom expressed in “spontaneous order” (the concept of their philosopher, Friedrich Hayek). Readers of Ayn Rand know that they have their heroes, too. Libertarians cause trouble for both parties, wanting, as they do, to eat their cake (allowing inequality) and have it, too (not imposing inequality). They do not cause trouble for an analysis based on the duality of parties, however, even though they stand for a whole that just happens without anyone’s caring for it (spontaneous order) and for a freedom that needs no instruction in virtue.

Because the Democrats are the party of the people, they are free to be less scrupulous than the Republicans, who are more earnest and uptight. Both have their scandals, but Democrats get away from theirs more easily and do not suffer much from guilt. To see the difference, contrast the most outstanding recent scandals of each party, those of Presidents Nixon and Clinton. Nixon had to face his embarrassed party and resigned in shame; Clinton’s party supported him with a dismissive shrug at his misdemeanor, and both he and his party prospered. Whatever the faults of Democrats, they automatically mean well, as being on the side of the people, which is also the winning side, the party of History. The Republicans’ virtue compels them to defend propriety in the conventions that the more virtuous erect to identify themselves, in which they too readily take satisfaction. Republicans take pride in being shocked, Democrats in not being shocked. Thus, as a dinner companion, one would probably prefer the beguiling charm of a Democrat to the stiffness of a Republican. But when selecting a spouse, one’s preference might be reversed, to favor a person capable of shame.

As the more inclusive party, Democrats are more informal than Republicans. For Democrats, formalities are barriers closing off the warmth of feeling known to them through their scientific psychology as “empathy.” Republicans are suspicious of psychology—the modern psychology that speaks of the self, not the soul, and so has nothing to say of the beautiful soul. They sense its hostility to virtue, particularly the virtue of self-reliance, so contrary to its therapy of self-excusing. But Democrats love the sort of care that makes few demands on the recipient. They do give the impression, though, that they would be happy if the recipient got off his duff enough to show gratitude to Democrats with his vote. But they always want to make it easier to vote, and they prefer automatic voters, voting their interest or their identity, to conscientious ones, who might think about it.

Republicans believe that virtue is efficacious. If you are honest and hardworking, you will succeed in making a living for yourself and your family. This means that society is, on the whole, just; it rewards the deserving. A just society needs the support of a just God to correct for human imperfections, and Republicans tend to be churchgoers and worshipers more than do Democrats. Many Democrats go to church, too, but often to liberal churches that preach compassion for human weakness rather than assistance to the virtuous. Republicans speak of sin or vice, though less frequently than they used to; Democrats omit sin and denounce the vices of the powerful and rich. Republicans will agree to have government help the “truly needy,” a suspecting description they like to use, but in a spirit more of generosity than of justice. For Democrats, virtue is not efficacious and society is not just. Things are stacked against the various vulnerable groups, and they have no real chance to show their virtue. The vulnerable, suffering from the callous neglect of the pseudo-virtuous, are victims in need of government’s protection.

Republicans contend that the welfare state has encouraged a disastrous loss of virtue in Americans. In America, the welfare state, under the title “the Great Society,” came later than in the social democracies of Europe. The name suggests an intent to avoid confusion with socialism and the lassitude that develops when the government pays one’s bills, just as Franklin Roosevelt’s Democrats had denied that permanent “relief” was their plan. But the name also appeals to America’s desire for greatness. With a crushing victory in the 1964 election, Lyndon Johnson became the author of an ambitious transformation of America that began with a “War on Poverty.” In demographer Nicholas Eberstadt’s fine analysis, that war, despite its bureaucratic overhead and naïve scientific optimism, was actually won. At a huge cost, estimated by Eberstadt as about $1 trillion annually, poverty as it was in the 1960s has been nearly eliminated. In a startling sign of the incompetence with which this feat was accomplished, the measure of improvement in the War on Poverty—the government’s “poverty index”—has not moved down since the war began. According to the official measure, poverty has held its own. So much is progress impeded by its own machinery that it cannot identify its success. Or would news of success be inconvenient for Democrats, who would like to spend still more, and whose party depends on finding ever more poverty to overcome? Believing in the irreversibility of their progress, Democrats nevertheless conceive, when they encounter opposition, that all may be lost in a moment. “History,” with its supposed inevitability, is as unreliable as virtue and as mysterious as God.

Yet the war on poverty, though won, has made the country worse, not because of the cost but because the American people have become corrupted in a “tangle of pathologies.” The phrase comes from Daniel Patrick Moynihan’s notable report of 1965, used by him to describe disturbing trends within the black community but now borrowed by Eberstadt to describe what has spread to all races and classes. The pathologies are welfare dependency, flight from work, and family breakdown. Each represents a failure of the virtues that philosophers have often thought necessary to the life of republics: self-support, taking satisfaction in one’s work, and living with responsibility for one’s family. These are “bourgeois” virtues, perhaps, but as the political theorist Judith Shklar once said, What other sort of virtue is there? These indicators of social health began to drop with the legislation of Johnson’s Great Society, and have worsened with its advance. They constitute a vindication of the Republicans’ criticism of the Democrats and their purported progress.

The Eberstadt analysis may well be incomplete, however. The tangle of pathologies he shows to coincide with the growth of the welfare state also coincides with the rise and success of feminism, beginning in the 1970s. The feminist desire to gain independence, especially from men, not only turned women away from motherhood and family toward careers but also compelled them to abdicate their traditional role, stressed by Tocqueville and accepted by nineteenth-century feminism, of being in charge of morals and mores. One could say that women have held on to that role but now use it differently. Instead of shaming sexual and other misconduct by both sexes, they reprove oblivious male disregard of women’s equality. It is clear in regard to feminism as to the welfare state that Democrats have not exactly abandoned virtue, then, but adapted it to programs mainly intended to substitute for virtue. Republicans, for all their love of moneymaking and sometime worship of economics, bear the burden of defending virtue in a democracy.

And yet—another yet—greatness can be found in both parties. Democratic egalitarianism is elitist in inspiration. “The few are always the ministers of the few,” said Machiavelli, and this goes for the progressives, as well. They care for themselves, and they can remind one of the defects of oligarchy—oblivious self-satisfaction and unjustified superiority—as much as do Republicans favoring the rich. But Americans want to be a great people, not just another people like all the rest, and they locate their greatness mostly in their great presidents, and those presidents come from both parties—when one from the party of inclusiveness, like Jefferson or Franklin Roosevelt, shows the people what an aristocrat is, and when one from the virtue party, like Lincoln or Ronald Reagan, makes virtue popular rather than conceited. Thus, one should not dismiss the ambition of the Great Society, even if, in effect, it made Americans more dependent and less great. (Only George Washington, the father of his country, and Abraham Lincoln, the savior of his country, hold popular reputation untainted with partisanship. While Washington served before our parties formed, Lincoln was the first president of the new Republican Party but still enjoys bipartisan esteem.)

BARRY THUMMA/AP PHOTO

Ronald Reagan made virtue popular rather than elitist.

Democrats and Republicans also differ over “relativism,” which is the term that Republicans use to disparage the multiculturalism of Democrats. Democrats have indeed increasingly shifted their thinking from “progress,” with its positive value, to “change,” ostensibly neutral but, in practice, the same as before. The individual rights they once thought the basis of progress have been eclipsed by the notion of “culture.” Formerly, the ways of liberal society were thought to derive from knowledge of rights, but now it is the reverse. Culture is held to be the basis of that “knowledge,” now demoted to mere belief. Democrats tend to accept, with some hesitation in the older generation and among the uneducated, the view that all cultures are equal, hence that the best culture is a multiculture. In this way, relativism becomes a principle itself, the principle that saves principle in the age that denies it. Democrats will therefore become indignant—on principle—about someone who holds a principle and will take offense at Republicans not so much for principles as for having principles that imply judgmental standards. With this development, taking offense becomes legitimate, replacing the calm toleration taught by earlier liberalism, since standards can often be deemed insults against the person or group judged. In this mess, confused Republicans, inevitably old-fashioned, stick to their principles and often forget to argue for them, calling them “values,” as if they could not, and need not, be defended—you have your values, and I have mine.

And to speak of defense, both parties are public-spirited, but each in its way. Republicans are much more likely to join the volunteer military, which performs well. To serve in the military is to make a career of sacrifice and risk; those who do so cannot help taking pride in themselves and feeling some disdain for others they defend, who live an easier, better-rewarded life. Such people are Republican material. Democrats are more likely to work in the caring and regulatory parts of government—public employees in the kludgeocracy, servers who, with their own entitlements, serve themselves first.

America is a country that stands for progress—in prosperity, in freedom, in science, but, above all, in the practice of self-government. That is the attainment set forth on the first page of and so nobly in Lincoln’s Gettysburg Address as America’s gift to mankind—the plan of an experiment whose success would prove that any other country could do as America had done first. America would not be best in this enterprise, or even unique; only first. This was high ambition but not exclusive. Yet it proved too much for the partisans of progress, who put their faith in History rather than in their own virtue. America’s troubles are the failures of progress, manifest most obviously in the low approval of government these days in public opinion surveys. The party of government, the Democratic Party, has lowered Americans’ estimation of their own government. It has done so even while changing the standard from the once-valued “self-government” to the much lower standard of “government that cares.”

We began, in the previous issue, with the inevitability of progress—inevitable because it is intended to be irreversible. The purpose of this “progress” (which deserves its quotation marks) was to escape the fate of living in the status quo of prejudice. But instead of being a substitute for fate, this progress became a substitute fate. It is indeed worth joining the fight against unreason—but virtue is the way. Virtue depends on us, not on History. It must be suitably accommodated not to angels but to men, not to the ages but to our time. It asks not only what makes us better off but also what makes us better. Let this be the task of the party of virtue as it contests the party of progress.

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