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Wednesday, April 19, 2017

The Master of the Presidential Flipflop

FDR mastered this long before Trump came along

The reversals of promised policy from Candidate Trump to President Trump have people reeling. In fewer than 100 days, it’s happened in so many areas: Syria, Afghanistan, the promise to repeal Obamacare, the claim that China is a currency manipulator, relations with Russia, the value of NATO, the promise to get out of NAFTA, the supposed hiring freeze, the Ex-Im Bank, the re-hiring of Janet Yellen as the head of the Fed, the urgency of tax reform, and there’s many more coming, no doubt.

Electioneering has little to do with governing results. Some reversals are welcome and some are not, depending on your politics. In any case, I’m not exactly surprised: his reversals all favor more power, more government, more control, over anything that would actually drain the swamp.

What’s most striking, however, is how little electioneering has to do with the governing results. People voted for one thing and got another.

Just how out-of-the-ordinary is this for presidents? Betraying the voters seems to be an American tradition.

FDR for Small Government

The man widely but wrongly considered to be the greatest American president of the 20th century flip-flopped on a huge range of policies. Franklin Delano Roosevelt promised one kind of administration but delivered another entirely.

Let’s first give FDR his due. His first great action as President was to fulfill a hugely popular pledge he made in the campaign: he promised to repeal alcohol prohibition. The 18th amendment to the US Constitution had come into effect in January 1920, unleashing amazing crime, corruption, social unrest, and, ironically, astonishing amounts of binge drinking (and poisoning).

When he promised them “Beer by Easter,” the people at his rallies cheered.President Hoover, in contrast, called Prohibition “the great social and economic experiment, noble in motive and far-reaching in purpose.” FDR gained enormous personal advantage by campaigning for repeal, giving more than enough reason for many people to vote for him. When he promised them “Beer by Easter,” the people at his rallies cheered.

FDR was inaugurated on March 4, 1933. On March 13, he called on Congress to repeal the Volstead Act, the main prohibition law. On March 22, he signed into law the Cullen-Harrison Act that legalized beer. By December 5, 1933, enough states had chosen the 21st amendment that it was finally passed, ending Prohibition.

And thus did FDR fulfill a main campaign promise, to the cheers of the multitudes.

Cut Spending, Not So Much

He then sent a message to Congress that reflected another main campaign theme: cut government spending. “For three long years,” he said, “the federal government has been on the road toward bankruptcy … Too often … liberal governments have been wrecked on the rocks of loose fiscal policy. We must avoid this danger.”

And during the campaign itself, leading up to election day, FDR said many things along these lines.  Hoover and the Republicans, he said, “piled bureau on bureau, commission on commission … at the expense of the taxpayer.”

FDR repeatedly complained that Hoover had ballooned the federal deficit by 50% since 1927.FDR said: “For three long years, I have been going up and down this country preaching that government – federal, state, and local – costs too much. I shall not stop that preaching.”

He did his best to appeal to libertarian sensibilities. “We must eliminate the functions of government,” he said. “We must merge, we must consolidate subdivisions of government and, like private citizens, give up luxuries which we can no longer afford.”

Again: “I propose to you that government, big and little, be made solvent, and that the example be set by the President of the United States and his cabinet.”

FDR repeatedly complained that Hoover had ballooned the federal deficit by 50% since 1927. But once he was in charge, his deficit spending went completely out of control and clocked in at 100% in four years.  As he approached election day, he pushed crowds to chant: “Stop the deficits! Stop the deficits!”

It’s hard to imagine today, but back then, it was the Republicans who seemed to have a penchant for expanding government power. Hoover practiced this well in response to the stock market crash of 1929. He signed off on the Smoot-Hawley tariff the following spring, a bill which severely damaged the capacity of the economy to recover from the growing economic crisis. By comparison, the Democratic party represented free trade and smaller, more frugal, government.

These were the themes of his election.

He even complained about Hoover’s agricultural policy, which was indeed terrible. Hoover was mandating that crops be plowed up on the foolish theory that this would cause prices to go up and lift the economy out of depression (Hoover was a Keynesian even before Keynes wrote his book). But then after FDR was elected, he actually paid farmers to do exactly that.

As for money, FDR nowhere railed against the gold standard. He frequently deployed the language of the Democratic platform that endorsed a “sound currency at all hazards,” which was the phrase of the day to indicate a dedication to the gold standard.

Say One Thing, Do Another

When you look at the New Deal in total, what you see is a highly regulated, high taxed, highly controlled, big spending, cartelized, quasi-fascist system that ballooned the deficit and prevented market adjustments from taking place. This is why the New Deal prolonged the Great Depression rather than fixed it.

John T. Flynn comments:

“Why did the President completely reverse his policy after his inauguration? It must be because he felt the things he was urging before election were not adapted to the realities of the case when he came to power. When he was outlining his policies before election he was completely cocksure of his rectitude and wisdom. Yet all those policies and techniques of which he was so absolutely certain he brushed aside as unusable. ”

No Returns Policy

Here’s the weird part. We proclaim our devotion to democracy, but in what does this consist? When we go to the polls, we are not voting on specific policies, unless we are talking about a state referendum. Instead, we are voting for specific actors, people who, once elected, are bound by no promises whatsoever. They can do what they want. Once the power goes to their heads, they are unleashed to behave in any way they can get away with.

I had actually hoped that the repeal of Obamacare would be the one thing he would accomplish as a sop to the voters who backed him. This is not a good system. So long as the system survives, voters are completely stuck with the ego that is first-past-the-post, who then deploys newfound power to do whatever he or she wants.

It’s completely the opposite with free enterprise. If you order a burger and get a salad instead, you send it back and are met with obsequious apologies from your server. If you buy a computer and it doesn’t compute, you get another for free. But when people vote for a person they perceive as draining the swamp, who then becomes the biggest beast in the swamp, what can be done? We wait another four years and repeat the same mistake again.

For my own part, I had actually hoped that the repeal of Obamacare would be Trump’s equivalent of FDR’s actions to repeal alcohol prohibition, the one thing he would accomplish as a sop to the voters who backed him. No such luck.

At some point, this is no longer betrayal. It is living up to tradition.