Does character matter? We are obliged to say yes. Character must matter. But where does character show itself in the pre-eminent economic conundrum of our times – the market meltdown of 2008 and the deepening recession of 2009? Yes, Chrysler workers accepted pay and cuts to benefits to save their jobs. But that concession was forced on them, and they remain ready to bill the people of Canada for any pension defaults down the road. In this case, the retreat on wages speaks more to strategic necessity than moral choice.

The Chrysler workers are not alone. They exhibit the same traits as the other special interest constituencies that rely on government for economic advantages denied to the people who wind up paying for them. As Fraser Institute senior economist Niels Veldhuis put it in his critique of the federal budget in January, the government “caved in to the special interest groups lined up in Ottawa with their hands out for federal cash.” In the lineup this year, he noted, were such “select groups and preferred industries” as senior citizens, farmers, the auto industry, forestry, tourism and arts and culture.

The phenomenon is sustained by an exaggerated sense of personal entitlement and by the time-tested principle of the squeaky wheel. It is a characteristic of governments, whether affluent democracy or criminal gang. It is ostensibly economic in nature, but is actually political (enabling governments to appear benevolent). It is amoral (giving governments cover to buy elections, which is otherwise a crime). And it imposes consequences (letting governments determine corporate winners and losers). How can people still believe in the concept and promise of equal treatment before the law when so many other people are singled out for special treatment? They can’t.

Against all odds, though, some integrity remains. The Fraser Institute itself, for example, accepts neither government grants nor government research contracts. This is character – which, in part, is simply the refusal to nationalize your personal wants and needs. But with trillions of dollars already pumped into the economy around the world, how many have said “no thanks” – aside, this time round, from Ford? (Thank you, Mr. Ford.) For its part, the U.S. government now requires companies to accept federal money whether they want it or not. Why? The answer lurks in the explanation that the Wolf gave Little Red Riding Hood when she asked him about his big hands: “All the better to hug you, my dear.”

We are tempted to think things were different in the old days, that character played a more important role than it plays today. Did it? The answer is an unequivocal yes. Until the Great Depression, more or less, governments discharged their responsibilities with only single-digit resort to GDP. A fierce independence was the default position of good citizenship. As one Canadian historian put it, Jeffersonian democrats – deeply distrustful of expansive government – “littered the ground” on both sides of the U.S.-Canada border.

In his recent blog on the devastating recession that followed the War of 1812, New York author C.J. Maloney wrote persuasively on the question of character: “The response of America’s intellectual and political elite to the Panic of 1819 was, in most ways, vastly different from what it has been so far in our current [crisis],” he writes. “Although we live under the same legal constitution and within the same lines on the map, the America of 1819 had a citizen who was, culturally speaking, utterly alien to the modern American.”

The panic of 1819 had its origin in the easy-credit economy of the War of 1812. The United States was on the gold standard when the war began but was compelled – by war debt – to abandon gold in 1814. For the next five years, the federal and state governments printed money with great abandon. Prices rose by 25 per cent, import prices by 70 per cent, in three years. In 1817-1818, credit increased by 40 per cent.

Although guilty of the same credit excesses as modern consumers, people responded differently in the recessionary days of yore. The Massachusetts Legislature repudiated stimulus spending in 1819 because, it said, this would simply increase the state’s indebtedness; rather, it determined to leave the solution to “the community itself, according to public wants and needs.” Virginia’s United Agricultural Society, an important coalition of farmers, declared that it would “not harass our representatives with high-wrought pictures of distress which their wisdom could not have anticipated and cannot remove.” The Union newspaper of Pennsylvania castigated state plans to extend emergency credit, asserting correctly that more excess credit would only make things worse.

“Who … would dare express such heresy today?” Mr. Maloney asks. “In my lifetime, I have never seen nor heard such a thing.” He mourns for “ideals long dead to my time.” Left to the people, the panic of 1819 was over in three years. The Great Depression, in contrast, lasted 10 years. The current recession deepens. Who knows how indebted to governments we will be when it ends, or how more dependent on governments we will be? And who cares in our own times that the best plan – as Mr. Maloney astutely expressed it – is often no plan at all?

By NEIL REYNOLDS
Globe and Mail
April 29, 2009

Linda R. Monk, J. D., is a constitutional scholar, journalist, and nationally award-winning author. A graduate of Harvard Law School , she twice received the American Bar Association’s Silver Gavel Award, its highest honor for law-related media. Her books include The Words We Live By: Your Annotated Guide to the Constitution, Ordinary Americans: U. S. History Through the Eyes of Everyday People, and The Bill of Rights: A User’s Guide. For more than 20 years, Ms. Monk has written commentary for newspapers nationwide, including the New York Times, Washington Post, Los Angeles Times, and Chicago Tribune

THE PARTY’S OVER – October 2008

By Linda Monk

The Crash of 2008, which is now wiping out trillions of dollars of our people’s wealth, is, like the Crash of 1929, likely to mark the end of one era and the onset of another.

The new era will see a more sober and much diminished America .

The “Omnipower” and “Indispensable Nation” we heard about in all the hubris and braggadocio following our Cold War victory is history.

Seizing on the crisis, the left says we are witnessing the failure of market economics, a failure of conservatism.

This is nonsense.

What we are witnessing is the collapse of Gordon Gecko (“Greed Is Good!”) capitalism.

What we are witnessing is what happens to a prodigal nation that ignores history, and forgets and abandons the philosophy and principles that made it great.

A true conservative (Rep or Dem) cherishes prudence and believes in fiscal responsibility, balanced budgets and a self-reliant republic.

He believes in saving for retirement and a rainy day, in deferred gratification, in not buying on credit what you cannot afford, in living within your means.

Is that really what got Wall Street and us into this mess — that we followed too religiously the gospel of Robert Taft and Russell Kirk?

“Government must save us!” cries the left, as ever.

Yet, who got us into this mess if not the government — the Fed with its easy money, Bush with his profligate spending, and Congress and the SEC by liberating Wall Street and failing to step in and stop the drunken orgy?

For years, we Americans have spent more than we earned.

We save nothing.

Credit card debt, consumer debt, auto debt, mortgage debt, corporate debt — all are at record levels.

And with pensions and savings being wiped out, much of that debt will never be repaid.

Our standard of living is inevitably going to fall.

For foreigners will not forever buy our bonds or lend us more money if they rightly fear that they will be paid back, if at all, in cheaper dollars.

We are going to have to learn to live again within our means.

THE PARTY’S OVER!

Up through World War II, we followed the Hamiltonian idea that America must remain economically independent of the world in order to remain politically independent.

But this generation decided that was yesterday’s bromide and we must march bravely forward into a Global Economy, where we all depend on one another.

American companies morphed into “Global Companies” and moved plants and factories to Mexico , Asia, China , and India , and we began buying more cheaply from abroad what we used to make at home: shoes, clothes, bikes, cars, radios, TVs, planes, computers.

As the trade deficits began inexorably to rise to 6 percent of GDP, we began vast borrowing from abroad to continue buying from abroad.

At home, propelled by tax cuts, war in Iraq and an explosion in social spending, surpluses vanished and deficits reappeared and began to rise.

The dollar began to sink, and gold began to soar.

Yet, still, the promises of the politicians come.

Barack Obama will give us national health insurance and tax cuts for all but that 2 percent of the nation that already carries 50 percent of the federal income tax load.

John McCain is going to cut taxes, expand the military, move NATO into Georgia and Ukraine, confront Russia and force Iran to stop enriching uranium or “bomb, bomb, bomb,” with Joe Lieberman as wartime consigliore.

Who are we kidding?

What we are witnessing today is how empires end.

The Last Superpower is unable to defend its borders, protect its currency, win its wars, or balance its budget.

Medicare and Social Security are headed for the cliff with unfunded liabilities in the tens of trillions of dollars.

What we are witnessing today is nothing less than a Katrina-like failure of government, of our political class, and of democracy itself, casting a cloud over the viability and longevity of the system.

Notice who is managing the crisis.

Not our elected leaders.

Nancy Pelosi says she had nothing to do with it.

Congress is paralyzed and heading home.

President Bush is nowhere to be seen.

Hank Paulson of Goldman Sachs and Ben Bernanke of the Fed chose to bail out Bear Sterns but let Lehman go under.

They decided to nationalize Fannie and Freddie at a cost to taxpayers of hundreds of billions, putting the U. S. government behind $5 trillion in mortgages.

They decided to buy AIG with $85 billion rather than see the insurance giant sink beneath the waves.

Unelected financial elite is now entrusted with the assignment of getting us out of a disaster into which an unelected financial elite plunged the nation.

We are just spectators.

What the Greatest Generation handed down to us — the richest, most powerful, most self-sufficient republic in history, with the highest standard of living any nation had ever achieved — the baby boomers, oblivious and self-indulgent to the end, have frittered away.

Added Comments:

How do WE THE PEOPLE put the villains who are responsible under oath and sit them down at public hearings to determine whose necks should meet the guillotine?

Hypocritically, those who had oversight responsibility such as Senator Chris Dodd [Chairman of the Senate Banking Committee] and Barney Frank [Chairmen, House Financial Services Committee] who helped get us into this mess are on every TV channel voicing their righteous indignation and pompously sitting on their elevated platform glaring down at those they are chastising and grilling, trying to pass the blame to others.They are disgusting.

WE THE PEOPLE should be on the elevated platform in judgment and execution of the likes of Chris Dodd, Barney Frank and the rest of the band of thieves and conspirators who are responsible for the financial collapse of the USA.

To name just a few of the culprits:

Henry Paulson Jr, Secretary of the Treasury

Alan Greenspan & Ben Bernanke — Chairman Federal Reserve

Christopher Cox, SEC Chairman.

But not to worry — YOUR PUBLIC SERVANTS who fear being voted out of office will take their self-awarded Golden Parachute Congressional Retirement, give WE THE PEOPLE the finger one last time and head for their safe havens as the World Citizens they are.

However, before they waddle off into the sunset, they will go on record one last time denouncing corporate greed, lavish salaries, and bonuses for their key felons at Fannie May, Freddie Mac, Lehman Brothers & AIG.

Meanwhile, WE THE PEOPLE fiddle while Rome burns and are too lazy and indifferent to vote the scum out of office.