Jimmy Carter: A Post-Presidential Leader

The association of leadership with an office, whether atop a government or a corporation, is so tight that it is easy to overlook U.S. President Carter as a leader rather than as a micromanager. Carter’s leadership by example, and thus by symbol, came after he lost re-election. Nelson Mandela of South Africa had led as a symbol in civil rights before he was elected president, and Gandhi effectively exercised ethical political, moral and religious leadership without holding any office. The reductionism or, at the very least, the mere association of leadership with holding an office biases how we evaluate leaders, as distinct from governors.  

The full essay is at "Jimmy Carter."

Beyond Fixing the U.S. Government's Debt

After a number of failed attempts over decades to solve a problem, it is natural that the problem itself would barely get mentioned, let alone any cure. I submit that the U.S. federal debt is a case in point. President Reagan made it an issue in 1980, and Congress has tried to mandate for itself automatic spending cuts and tax increases, but to no avail. The desire for instant gratification outstripped self-discipline. This could perhaps be said of the society generally. 
In anticipation of the “fiscal cliff” steep U.S. tax increases and budget cuts that were set to go into effect January 2013 for a decade, Moody’s Investor Service served notice to Americans and their federal government that the sequestration of $1 trillion over the ten years and the immediate end of the Bush Tax Cuts would mean a downgrade in the credit rating of the U.S. Government. The New York Times reported that the rating agency, like S&P before, “emphasized political dysfunction more than soaring government debt. The agency said that Washington must come to agreement to head off billions of dollars in simultaneous tax increases and spending cuts scheduled to begin in January—and to put the government on a sustainable fiscal trajectory. Only then would the United States keep its AAA rating.”[1] Moody’s pointed to the need for “specific policies that produce a stabilization and then [a] downward trend in the ratio of federal debt to G.D.P. over the medium term.”[2] 

Moody's Investor Services     (Reuters)

Significant reductions in spending over ten years, plus an immediate end of the tax-rate reductions that George W. Bush had signed into law, would presumably have produced a downward trend in the ratio of federal debt to G.D.P. over the medium as well as long term unless a recessionary impact would be such as to counter the effect from the sequestration and tax increases. Pressure would have built to exempt spending on unemployment compensation and other sustenance programs, while the tax revenue would have fallen short. In other words, the sequestration, had it been allowed, would not have been a sure thing in reducing the federal debt. 
As of June, 2019, the debt stood at over $22 trillion. The will in a democratic system to take corrective action can be so deficient that a serious problem can get much worse. Whereas the rating agencies were ready to downgrade the U.S. Government's credit rating when the debt stood at $16.7 trillion, no such warning went up six years later when the debt was substantially more and no hint of any sequestration was in the air. 
Ronald Reagan had made balancing the federal budget a salient part of his 1980 platform, though once in office he pushed for tax cuts and increases in defense spending that undercut prospects for a balanced budget. The experiment in whether cutting taxes could actually boost tax revenue due to more economic activity failed. In 2013, sequestration failed even to launch. It is no wonder that as the debt passed the $20 trillion mark, the political discourse had given up on a cure. That such a debt might be too big to be paid off, that the U.S. Government was de facto already out of reach, was never mentioned even in conversation. 

1. Jonathan Weisman, “Moody’s Warns That U.S. May Face Debt Downgrade,” The New York Times, September 12, 2012.
2. Ibid.

Ronald Reagan

Ronald Reagan’s extolling of individualism amid the problem that he saw as government itself resonated with the religious overtures of American divine providence as a city on a hill—a promised land akin to the New Jerusalem. Even as material self-interest taking advantage of unbridled markets under the guise of competition was not Reagan’s primary orientation, greed could easily trump the force of Reagan’s normative envelop, human nature such as it is.

According to Madrick (p. 116), “The transformation of a political and economic message to a moral one was Reagan’s strength.” Religious would have to be added to moral for one to get a sense of Reagan’s individualism beyond its economic and political aspects. In a speech in 1963, for example, Reagan said that the inalienable rights of individuals are “God-given,” and that this individualism “puts us in opposition to . . . a prevailing attitude of many who have turned to a modern-day secularism” (Madrick, p. 117). Freedom is God-given, whereas totalitarianism is inherently secular. Hence, Reagan referred to the U.S.S.R. as the “evil empire” on more than one occasion—even as far back as in his television work for G.E.

Reagan saw the American welfare-state in as being similar to the totalitarian regime of the Soviets. According to Robert Dallek, “To Reagan . . . there are striking similarities between a Communist Russia and a welfare-state America that [he sees] as abandoning its traditional spirit of rugged individualism” (Madrick, p. 116). Reagan claimed that American government had failed to protect those truly in need of sustenance, but I do not believe he thought that government should enable the survival of those individuals whom misfortune or illness would otherwise kill. Reagan’s mindset was formed in the twentieth century largely before the rise in divorce and the associated fragmentation of the American family.

In Reagan’s America, it was generally assumed that church, charity and family could be relied on—albeit perhaps idyllically—to sustain those who could not survive otherwise on their own. Whether Reagan’s concern for the working class would include support of government aid for the long-term unemployed as a last resort in another era (i.e., the other safety nets being compromised) would have to encounter his disdain for lazy people living off the work of others.  Reagan agreed with Paul’s dictum that those who do not work do not eat. In more abstract terms, Reagan’s value on individual self-reliance and his association of the welfare state with totalitarianism together trump a solidarity value based on the human right to life qua “right to survival.”

Similarly, Reagan associated government regulation with totalitarianism. Accordingly, he viewed deregulation as essential to individual freedom. In a speech in 1959, he said that the power of “the stultifying hand of government regulation and interference . . . under whatever name or ideology, is the very essence of totalitarianism” (Ibid.). His push for deregulation was therefore not primarily to enable corporations to become bigger and richer; freedom as divinely-endowed rather than mere materialism was Reagan’s sun.

In a speech in 1967, Reagan said, “The world’s truly great thinkers have not pointed us towards materialism; they have dealt with the great truths and with the high questions of right and wrong, of morality and of integrity. They have dealt with the question of man, not the acquisition of things” (Madrick, p. 124). The moral (and religious) basis of Reagan’s political and economic ideology discounts not only material gain, but also the underlying self-interest. Madrick (p. 124) observes that “Reagan mostly avoided making economic self-interest the centerpiece of his economic program. . . . It was the selflessness of hard work, self-reliance, and courage associated with an American Protestant ethic. Material success was its by-product, not its objective.” Selflessness is indeed a value in American conservatism, even if was relegated by the version oriented to economic self-interest following Reagan. Indeed, individualism itself need not be reduced to selfishness and greed, even in conservatism.

However, in advocating deregulation, Reagan’s religio-moral individualism allowed for the ensuing materialist-based, free-market economic conservatism that has been so susceptible to unfettered corporate empire-building and the related love of gain, or greed, as an end in itself. For example, Madrick (p. 116) points out that “Reagan agreed with Friedman that unfettered capitalism gave people the freedom to find their own way; this was its greatest benefit.” Even though Reagan’s orientation was on freedom, it allowed for the unfettered capitalism that enabled the unregulated sub-prime mortgage derivatives that in turn nearly toppled the financial system in 2008. Madrick (p. 124) concludes that Reagan “planted a visceral distaste for government in the American belly, justifying to many, and even making moral, runaway individualism and greed.” Whereas Reagan’s religio-moral orientation was not tucked within an economic paradigm of economizing self-interest, his anti-government plank enabled even a moral basis for such self-interest; such a moral basis is not that of Adam Smith’s moral sentiments that constrain competition.

Reagan’s legacy is not his religio-moral basis for individual rights; rather, he is known for having facilitated and consolidated a fundamental shift in the American psyche, which had begun in the context of the Vietnam conflict and Watergate. Reagan made it explicit that government was the problem rather than a solution; he made this into a cause. The financial crisis of 2008, including the failure of regulators to check the greed on Wall Street, can be related directly back to this paradigmatic shift. In fact, it is likely that economic self-interest unfettered by “evil” regulations came out on top as a result of the shift—even compromising Reagan’s God-given individual rights through the organizational power made possible by deregulated (and thus consolidated) corporate capitalism. Indeed, it could even be argued that the latter is more of totalitarianism than is government regulation, at least from the standpoint of the mere individuals who happen to be citizens.

The triumph of the legal persons doctrine with its associated rights is just one indication of the hypertrophy that has dwarfed Reagan’s highest virtue even as the reductionism has sprung from Reagan’s very own apparatus. Had the former president modified his anti-government plank such that government should be put in the positive service—government service being ideally selfless—of protecting and furthering fundamental individual (not corporate) rights against commercial as well as governmental totalitarianism, the materialist hypertrophy of economic empires may not have been able to gain so much power over individuals.

Source:

 Jeff Madrick, Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (New York: Alfred A. Knoff, 2011).

Moral Hazard in Mortgages

“The cherished American ideal of self-reliance has a flip side”[1]  Before getting to the implications, or flip side, I want to fill out what informs this ideal. One could add to it the ideological stance that came into its own in 1980 with the election of Ronald Reagan, who declared that government is the problem. This implies that government should be minimized, and otherwise corrected as much as possible. Government is hardly to be viewed as the solution. This is the legacy of the Kennedy assassinations of the 1960s, the Vietnam War, and Watergate as well as Ford’s pathetic “WIN” buttons and Carter’s micromanagement and failure in regard to the hostages in Iran. I was not old enough for the Kennedys’ truncated optimism (and that of Martin Luther King) to resonate; I knew the political (and economic) pessimism of the 1970s and the energizing “fix it” mentality of the early 1980s. Of course, Reagan’s “new federalism” failed, as did his aim to balance the federal budget, and the jury is still out on whether “peace through strength” pushed the USSR off the cliff.

The full essay is at "Moral Hazard in Mortgages."

1. Shaila Dewan, “Moral Hazard: A Tempest-Tossed Idea,” The New York Times, February 26, 2012.