StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between


26 Nov 2010
Posted by Pete Davis

Consensus is hard to find in Washington these days. There wasn't that much just before before this month's election, and there is a lot less after it. President Obama is willing to compromise on extending the Bush tax cuts and on cutting spending, but many Democrats won't follow his lead. Similarly, any deals by soon-to-be House Speaker John Boehner are likely to run afoul of newly elected Tea Party Republicans or of a filibuster by their compatriots in the Senate. It's going to be very difficult to find 60 votes in the Senate for anything controversial during the next two years. The middle has gone out of American politics, and the extremes work against compromise.

Failure to govern can be a good thing if the ship of state is on a safe and sustainable course, but it isn't. Here's my short list of unsustainable U.S. policies:

1. Record deficits

2. Uncertain tax policies

3. Runaway health care costs

4. Overextended military operations

5. Poorly defended borders and counterproductive immigration policies

6. Failing K-12 schools

7. Burdensome litigation

Over the holidays, I will blog on each of these subjects, not to declare the right answers, but to show that we must build consensus on how to solve these problems if we are to continue as a strong democracy. I encourage comments and pledge to respond to those that promote consensus.

Whenever I get discouraged about the course of U.S. policy, I cheer myself up by reading how much worse it was for George Washington during the Revolutionary War and for Abraham Lincoln during the Civil War. I'm always impressed by their unbending determination to build and to preserve the United States no matter what it took and without getting hung up on ideology.

Washington was among a distinct minority of Americans who favored armed rebellion against the most powerful nation on earth in 1776 to gain the right to self determination. Most Americans were not wealthy landowners like he was and had not had their massive western landholdings confiscated by the British as he had to pay for ridding North America of the French. He fought the French as an officer in the British Army in 1755, and, 22 years later, he embraced French support, without which he couldn't have driven the British out. He appointed foreigners who didn't speak English as generals, and he couldn't have won without them. Most Americans saw little chance of victory, and when, after paying a terrible price in blood and treasure, victory was achieved, about 100,000 of them, 3½% of the 3 million American population, moved to Canada. As our first president, when Pennsylvania farmers refused to pay a new federal tax on whisky, Washington led an armed expedition in 1794 to collect those taxes. We forget what it took to establish consensus 216 years ago.

Lincoln didn't want war, but, to preserve the Union, he didn't hesitate to unleash the most scorched earth campaigns ever fought on U.S. soil. Nonetheless, Lincoln was widely viewed as weak and compromising. He kept people guessing where he stood on emancipation until late in the second year of the war, and he was derided for emancipating only the slaves in the states that had seceded over which he had no control. That was an expedient to keep the border states on the Union side, absolutely necessary to winning the war. Lincoln allowed very generous surrender terms for General Lee and was about to go easy on the South against the wishes of his party when he was shot.

It's easy for us to forget that both Washington and Lincoln used all sorts of compromises and expedients to achieve their only goal: to create and to preserve the Union. The controversies that arose from their actions dwarf those we face now. Let's get our act together, build consensus, and strengthen our United States.

I'm curious about your

I'm curious about your definition of "burdensome litigation." It's now become "unsustainable" policy for people to seek redress for damage done to them in courts of law? Presumable, you have a more precise and persuasive reason for adding that to your short list of "unsustainable U.S. policies."

Burdensome litigation

Good point.  I agree that people should be free to seek redress for damages, but when 25% of our doctors are sued for malpractice each year, something is wrong.  I'm also very concerned that much too large a portion of the damage awards go to the lawyers and not to those harmed.  Doctors are practicing defensive medicine, which imposes huge additional costs on everyone.  We established no fault auto insurance, why can't we establish no fault medical insurance?  I just want to restore some sanity to health care, and tort reform should be part of that. 

Let's get our act together,

Let's get our act together, build consensus, and strengthen our United States.

This sounds very nice, and might work if we were dealing with conflict between two parties who both want to "strengthen our United States". The problem, however, is that one of the political parties cares about nothing other raw naked political power, and would rather gain absolute power in a depleted, diminished, weakened Unites States than share power in a strengthened one. And the other political party has been almost completely compromised by capitulation to the whims of the wealthiest factions in the United States.

Let's get our act together.

Sure, if you're dealing with intransigent and obstructionist political parties that reject rational compromise, it makes reaching consensus a lot harder.  Democrats and Republicans have extremes in their parties that qualify.  That's why I'm trying to point out that the broad middle of America needs to stand up and assert itself.  Public pressure and voting out the extremes in both parties is the answer. 

Washington didn't pursue consensus

If he had, he would have ended up in British America or dancing a jig in the air. You pointed out above that he took many radical actions to survive.

We are faced today with a situation in which the GOP is taking a deeply unpatriotic position with respect to getting us back on track.

GOP members took Macroecon 101. Nixon said we are all Keynesians. They know that federal stimulus to revive aggregate demand is crucial. They know that direct employment programs have higher multipliers, more immediate effect, and less leakage than tax cuts. Even the Club for "Growth" knows this, but policy purity is more important than reviving our country.

I hope that our President follows Washington's example and takes radical action to turn the tide.

Washington didn't purse consensus

I would argue that Washington pursued a vision that became the consensus.  That's always the problem of leadership, when does a leader's vision lead to a better future, and when does it lead to disaster?  People make judgments after the fact, but leaders have to act in advance.

Thanks re George Washington perspective

... Although like both Washington, and particularly Lincoln, I think we'll continue having a festering crisis, and then go over the brink, and sometime after that be prepared for leadership, as, as you point out, neither side is ready for leadership. FYI, I'd bet money that 10-15% of Medicare costs could be cut with no change whatsoever in outcomes, if we moved from a defined benefit ("entitlement") versus a defined contribution (a la Wurope in having a national budget, and fairly set standards for coverage and reimbursement). It would be great if, in addition to having a defence specialist, this site could have a federal level healthcare expert, someone to specifically comment on interest rates and money supply and such, and, third, a macro view of the states, since they have there own budget crises, and a la EU one wonders if the states/munis could lead to a run on the federal gov't.

re George Washington

 I like the way you put that, "be[ing] prepared for leadership."  We're not, and I hope we will get there without "go[ing] over the brink."

Sure, a health expert would be great.  We've all dabbled in it from the budget side, but not from inside of the health system.

No question, the states will go through the wringer again next spring.  It won't be pretty, and it will be a considerable drag on the economy.

The only real unsustainable

The only real unsustainable problem on your list is #3 Runaway Health Care Costs. Too bad you were on the wrong side of that issue the last 2 years.

Recent comments


Order from Amazon


Creative Commons LicenseThe content of is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. Need permissions beyond the scope of this license? Please submit a request here.