Our Health Care Dilemma

This column originally appeared at Big Jolly Politics:

In today’s Wall Street Journal, columnist Holman W. Jenkins, Jr., provides this interesting analysis (Conservatives and the Mandate) of the root problem with our health care system. Distilled to its essence, the problem with Obamacare (and Romneycare, and Schwarzeneggercare), it that they perpetuate and worsen an already existing distortion of the market for health care. Ladies and Gentlemen, I hate to tell you this, but there has been no free market for health care in a very long time, and we will have to accept a lot more personal responsibility in our lives if we want to re-establish a free market in that industry.

Since the end of World War II, when unions negotiated for insurance coverage in lieu of wage increases, the provision of health care in this country increasingly has come to be managed by middlemen: private for-profit insurance companies; private non-profit insurance companies; federal and state government agencies; and local public hospital systems. Moreover, most privately-employed full time workers have another middleman, their employer, involved in the process of selecting the insurance coverage, negotiating its price, and collecting and paying the premiums. Most doctor-patient relationships, including the cost and scope of care, are initiated and managed, directly or indirectly, by one of these middlemen. Relatively few individuals (if any) today “choose” their doctors and can negotiate the cost and scope of their care.

In the meantime, the premiums paid by employers and employees are no longer dictated by the actuarial pricing of the risk of illness, disease or injury, because coverage is so broad that it covers basic medical services for which there is no fortuitous risk involved. This means that increasingly the cost we pay for coverage has little or no relation to the individual needs of each person, but rather is based on the cost of sustaining the insurance coverage for everyone enrolled in a specific plan, or for everyone covered by a carrier or government program.

In turn, the decisions of the middlemen dictate how much health care is provided, to whom it is provided, when it is provided and where it is provided. These decisions affect the decisions of doctors in the treatment of patients, and distort the allocation of medical resources in every community.

The only major benefit of the private insurance market to the overall free-market economy is that the premium funds are re-invested in the private economy. But, if you think you are paying premiums to buy a free-market relationship with your doctor, you’re simply wrong.

What Obamacare and its state counterparts do is not a fix to these problems, so that the same quality and amount of medical care is accessible to everyone, and that you regain control of your doctor-patient relationship. Instead, these programs further institutionalize the role and power of middlemen, and raise their decisions from contractual dictates to legal mandates. Meanwhile, the program is designed, over time, to reduce the incentive to purchase private insurance, which eventually will reduce the primary economic benefit of such a product—the re-investment of premiums into the private economy. Eventually, Obamacare will lead to a pure transfer payment entitlement funded with tax dollars and public debt.

The only way to fix this mess in the long term is to restructure the health care industry into a free-market system where most of the economic and medical decisions are kept at the level of the doctor-patient relationship, and the middlemen’s role is greatly reduced. This can be done by creating three delivery systems:

• A private insurance system that only provides coverage for major medical issues—major illnesses, diseases or injuries—and that requires high deductibles or health savings accounts, and personal responsibility, for the payment of all other health care;
• Local hospital and clinic systems paid for with local tax dollars, and administered by local governments, for the indigent (and the continuation of a similar federal program for veterans); and
• A means-tested voucher system to fund the payment of private insurance premiums for insurance coverage for the elderly, paid for from the Medicare tax.

Although these changes sound like common-sense, conservative approaches to fixing the system, I have been amazed by the reaction of many conservatives to these ideas when you discuss them privately. Over the years, as I’ve tried to discuss our current predicament and these types of policy changes with people around the dinner table or in relaxed conversations, their eyes glaze over. More importantly, I have discovered another phenomenon during such discussions: many spouses and single parents, who control family finances and handle the doctor appointments (and, in my anecdotal experience from these conversations, these spouses and single parents are women, regardless of whether both spouses in a marriage work outside the home), hate the idea of losing the simplicity derived from the involvement of middlemen, and they especially hate the idea of losing the convenience of co-pays. They may complain about a specific bad experience with an insurance company over a coverage issue; but the idea of a return of more control over medical decisions and payments to families, and the resulting increase in personal responsibility over such transactions, is simply an anathema to many of these spouses.

Now add to this pre-disposition against assuming more responsibility over the doctor-patient relationship, the recent flap over Obama’s mandate for church-related hospital and charities to provide services and prescriptions, or insurance coverage for such services and prescriptions, which violate the tenets of the religious institutions that manage such hospitals and charities, and you see that this issue is more politically volatile and complex than we conservatives often think. Yes, conservatives and many independents viscerally recoil at the notion of government having and exercising the power to mandate us to do anything, and especially when such power is used to interfere with the decisions and doctrines of a church (and most believe that such government action is unconstitutional). On the other hand, even many conservatives are much more ambivalent about middlemen in their medical decisions, including government, when they are forced to consider the alternative. So, when these people hear that access to contraceptives could be denied to some women, and that the alternative to mandates that are designed to require such access is responsibility they don’t want, their reaction to the issue is not predictably supportive of the religious liberty of the church.

Where does all of this lead to? As I’ve said so often that I’m beginning to feel like a broken record, it leads to the hardest question we Americans have to face this fall, and for many years to come: are we willing to take back the personal responsibilities that the maintenance of liberty and a society of free people requires? If not, then electing Republicans to Washington this fall will not matter in the long-run, because the trajectory of public policy will continue in a leftward direction toward a European system with the trade-offs between social programs and national defense that Europeans have made, and with the acceptance of increasing public and private debts to finance such a system—until it inevitably collapses, internally or externally.

If electing Republicans this fall is to mean real change, we will have to look in the mirror and accept the personal responsibilities such changes will demand of us.

Trust and Consequences

This column originally appeared at Big Jolly Politics:

As I have listened to all of the campaigning, media coverage and breaking news stories over the last few weeks, I have been reminded of a conversation I had with a friend of mine late last year.

This friend is a committed Democrat, and we have enjoyed lively debates over the years about virtually everything. In this last conversation, we were both expressing our exasperation over some of the positions and mistakes of our respective parties, and the ups and downs of the Presidential race. When I restated my long held view that our country won’t be able to fix many of its problems unless we return responsibility to people and local communities, my friend said something that crystallized many of our differences: “Ed, I don’t trust people to do the right thing like you do.” Toward the end of the conversation, as we were discussing certain social issues about which we disagree, I asked my friend whether he was concerned at all by the unintended consequences that changes in social customs and mores create, and he flatly said, “No. We can address any problems later, but I am for change that broadens people’s ‘rights,’ and it is just mean-spirited not to broaden them.”

Now, it’s not like I had never heard comments like those before—any conservative who is old enough to read and write has heard statements like them too many times to count. But, for some reason, my friend’s statements have been ringing in my ears lately as I’ve tried to make sense of all that is transpiring around us, and of what needs to be done over the next few months as we head into the November election. If we conservatives are going to win the national elections this fall, we need to convince the American people that implementing our vision will fix the problems we face, not just rearrange those problems and defer their resolution to another day. My friend’s statements helped me re-look at what unifies our conservative vision.

What ties our conservative policies and ideas together is that they depend for their success upon a basic trust of our neighbors—a mutual trust that we will make more right choices than wrong choices privately and publicly, and that together we can rely on our mutual trust to rebuild our families, our communities and our economy.

This trust drives us to oppose centralization of responsibility in Washington and state capitols, to oppose the ridicule and diminishment of churches and organizations whose work helps to form our character as individuals and as a people, to oppose grand schemes that depend on mandates and entitlements to solve our problems, and to oppose a growth of government that is purchased with debt borrowed from our competitors and enemies. Meanwhile, this trust inspires us to promote the protection and exercise of our basic civil rights, to find answers to our problems in the opportunities constantly created by free markets and free trade, to require governments to live within their means and abide by their constitutional limits, and to engage with our neighbors in the lives of our communities to guide inevitable social changes in a way that prepares our children for the future while preserving for them the unique society we inherited.

But our trust is tempered by our inherited memory that decisions and actions have consequences, and that some of those consequences are often both unintended and destructive. Such memory leads us to oppose change for the sake of change, or to oppose change that may make us feel better about ourselves today without regard to what we may do to our children’s tomorrow. That memory leads us to oppose changes that confuse rights with privileges, that confuse liberty with autonomy, that confuse the exercise of wisdom and conscience with censorship or discrimination, that confuse opportunity with mandates and regulations, and that confuse growth of government with the growth of freedom and wealth.

However, such memory also challenges us to engage in the process of change when it is necessary or inevitable. That engagement requires us to guide such change so that it results in preserving and strengthening our unique society for future generations, rather than to disengage from the process and allow changes to unfold that destroy the fundamental principles of our society over time.

All of this is easier to describe than to live by—it always has been. That is why it is easier to be a political progressive or liberal in our society than it is to be a conservative. It is this gap between talk and action that has led many people to tune-out conservatives when we start talking about returning responsibility to the people, or when we discuss the potential for negative consequences from certain changes that, at least superficially, sound good, fair and just.

Indeed, this predicament frames our challenge this year: we must describe our vision of a society that is grounded in mutual trust, and that channels that trust to guide inevitable change confidently and prudently; and we must persuade our neighbors that we will live by the best of this vision, if elected.

We Must “Choose Wisely”

This column originally appeared at Big Jolly Politics:

But choose wisely, for while the true Grail will bring you life, the false Grail will take it from you.
Indiana Jones and the Last Crusade (1989)

I was reminded of this line, delivered in the soft, time-wearied voice of the Medieval knight from the third Indiana Jones movie, as I was reflecting on the remarkable string of events over the last two weeks—events that are changing and defining the nature of the 2012 election.

At the start of this period Romney looked as if he was going to walk away with the GOP nomination, and that the election would become a referendum on Obama’s economic policies. The emerging shape of the battle was reflected by two new and inconsistent reports coming from Washington. On the one hand, the CBO issued a report that should have scared the dickens out of everyone and made the case for a Republican sweep. It showed that the economy had lost more than 2 million jobs in just one month, and that the projected growth and unemployment figures would be anemic through 2013. On the other hand, the administration produced “seasonally adjusted” job numbers that magically showed a growth in jobs, and a drop in unemployment, which defied reality and made a mockery of government statistics, but which the chattering classes took as positive news and as gospel for the wisdom of Obama’s policies.

But, then the ground under our feet shifted, as foreign policy and social issues diverted everyone’s attention away from the economic debate. Every news report focused on the growing civil war in Syria, and our confrontation of Russia and China at the UN. Panetta and Obama sent mixed signals over Israel and Iran, and their words (and Israel’s intentions) became a focus of news reporting throughout the week. Progressives embroiled the Komen charity and the Catholic Church in controversies over abortion, contraceptives, and the First Amendment. Then, that never-ending source of liberal lunacy, the 9th Circuit Court of Appeals in San Francisco, gave us a double-whammy of cultural chaos:

• it reinstated the California Supreme Court’s construction of the California Constitution that changed and expanded the definition of “marriage” under California law to include same-sex couples; and,
• to do so, it determined that the people of California could not amend their own Constitution to re-instate a 3,000 year-old status quo that did not violate the federal constitution, because, once the California Supreme Court had decided to expand rights or privileges to a new class of people, the people could not change that decision.

Therefore, in one stroke the 9th Circuit stoked the fires of the culture wars and shredded the concept that the people, not the judiciary, are the ultimate source of power and authority in this country. Given these developments, and the predictable rise of Santorum in the polls in three states where, like Iowa, social conservatives make up a large portion of GOP activists, is it any wonder that Santorum, whose career has focused on these foreign policy and social issues, has risen from the ashes to upend the GOP race once again?

Before you get whiplash from all of this, let’s go back to the quote at the start of this post. We must remember that the story of America has been a story of choices made—some wise, and some not-so wise. And it now appears that recent developments are creating a new, epic choice for us to make this November. The choice will not be over the looming debt that is crushing individuals and governments alike, or what our position should be as to when or how Israel may attack Iran, or the wisdom of the Komen foundation’s changing decisions about funding Planned Parenthood, or the availability of contraceptives, or the future of religious freedom, or even the future definition of “marriage”. No, the choice is larger than all of these issues, though they each will be pieces that will fit together to ultimately form the puzzle picture in the end.

If you’ve followed any of my prior posts on Big Jolly Politics, you know I have a specific view of our history. Our Settlers—those dissident Protestants who began leaving England and the Netherlands in the 17th Century to come and start a new life on this continent, saw a “fork in the road” of human history and made a choice to go down what Robert Frost would call “the road less traveled.” They chose to come to America and begin an experiment not tried in human history—to live as free men and women in shared communities—rather than stay in Europe and continue on the age-old path of living under the thumbs of kings and bishops. Our experimental path was to preserve and promote man’s free will (the blessing of liberty) and to promote the exercise of that will to “pursue happiness” (“pursue a life well spent”, “love thy neighbor”) in local communities organized into states joined into a federal union. The paradox, as Franklin would allude to, was, whether we could “keep it” merely by depending on the preservation of a “Christian” character among our citizens.

Over the centuries, we became a people who were taught to look at our past as having been created from fundamental promises—a contract—that incorporated man’s greatest ideals. We were taught that even though the promises weren’t always properly or evenly enforced, our challenge was to fix those flaws to sustain the experiment. And we were taught that the experiment embodied in that contract was fragile, because it could always be derailed by undermining the character of the citizenry; meaning it could be derailed by one or more of four impulses:

• the impulse of man to believe in himself, and in nature, rather than God;
• the impulse of man to fight and die for false Gods;
• the impulse of some men to re-enslave the will of other men to keep the enslaved from pursuing their own impulses (good or bad); and
• the impulse of otherwise good people toward complacency and autonomy.

I believe our best leaders over the centuries recognized these enemies and rallied us against them. Since 1776, we have faced and defeated each of these enemies at one time or another. If we should ever lose this fight for the preservation of our experiment, or choose to no longer fight for our experiment when any of these impulses emerge, I believe the consequence will be both a political and a spiritual backslide, and the ensuing “darkness” will last a long, long time.

When we look around us we see evidence of that our experiment in self-government is backsliding, and I am not ready to choose to stop fighting the impulses that have brought us to this point. At some point between the election of FDR and the assassination of JFK, a core group in this country saw our nation, not as an imperfect experiment embodied in a contract to be enforced, but as historically illegitimate. These people worked quietly for decades to convince the last two generations of Americans to look at our past as having been illegitimate from the start; and to see America’s basic contract as so wrong that it needed to be reformed and replaced with a new contract that mirrored the social contract that had emerged within Europe since Bismark. To accomplish this task, they preyed on the four impulses that were always the enemy of our experiment, and have tried to rip-up the old contract. In its place, they have tried to re-assert a model of government by and for the elite that our Settlers rejected, and which has condemned a vast number of our neighbors to under-education and under-employment, and to an artificially low standard of living during a time of great wealth creation, while they have increasingly enjoyed unrivaled materialism and an autonomy from their responsibilities as citizens. Their efforts have torn deep holes in the fabric of our culture and society, and the policies they’ve implemented to create a new contract have nearly bankrupted our governments and our citizens.

What the developments over the last two weeks show is that the election this November presents another historical “fork in the road” for America—another time to choose. It presents a choice between—

• continuing the backslide to a form of society our Settlers rejected, and that thrives off a vast system of materialism, dependency and victimhood among so many of us that it has put our society on the road to societal bankruptcy; and

• re-committing our society to that experiment embodied in the original contract we inherited—a society of free men and women who believe that if our ideal promises are properly preserved and enforced, we can address all of the challenges that face us without bankrupting the system for our children.

We have a choice to make at this fork—we can’t take both paths from here, and the path we choose this year will determine the course of our history for generations to come. I for one, choose the path of the promise our ancestors made to preserve, protect and promote life, liberty and the pursuit of happiness to all our citizens, and of the commitment to share and enforce that promise and its benefits with all Americans; rather than the path of autonomous materialism and victimhood, and the ultimate dependency on elites, to which the other path will condemn the future.

I hope you will join me and “choose wisely” as this year unfolds toward the November election, for the stakes couldn’t be much higher.

A Basic “Conflict of Visions”

This column originally appeared at Big Jolly Politics:

In 1987, Thomas Sowell published a landmark book entitled “A Conflict of Visions,” in which he identified and explained the historical and intellectual roots of the differences between the modern worldview of Western liberals and that of Western conservatives. Since that first work, Sowell has published other works expanding on this theme. For any conservative who wants to fully understand the philosophical root cause of our political and cultural divisions with the modern left, these books are essential for your reading list.

But I want to focus on a more basic and practical conflict of visions facing us in 2012, and challenge you to listen to what our leaders say over the next two evenings. As you know, tonight the four remaining Republican Presidential candidates will debate in Florida on national television, to be followed tomorrow night by President Obama’s State of the Union speech. As you listen to these five men, I ask you to listen for their views on one topic: what provides for the general wellbeing of the people of this country? If you listen closely, the answer to this question will illustrate the basic conflict of visions between our two parties, and what is at stake in this election.

I believe you will find that the four Republicans, though they each will articulate the answer differently, will agree that the general well-being of the people is provided by private-sector jobs: jobs that employ people; jobs that provide for families and churches and neighborhoods; jobs that expand wealth by creating new goods and services, and return on investments to be re-invested to create new jobs; jobs that provide tax revenue for our infrastructure and schools; and jobs that channel and nourish individuals’ energies, hopes, dreams and ambitions. In turn, they see the role of government, like a private-sector business sees its staff or administrative departments—necessary to provide security and support for the people engaged in the creation of revenue for the company, or in this case for the creation of wealth by the private sector, but not as the primary creator of that revenue or wealth. For more than a generation, the private sector has been reducing the footprint of staff and administrative jobs, and making those functions more responsive to the needs of the people producing the goods and services, and the revenue, of their businesses, and conservatives believe that government at all levels should be similarly reformed. It doesn’t matter whether the conservative has been a lifetime elected official, a private-equity investor, or an entrepreneurial professional, conservatives share this fundamental view.

But what you will hear from President Obama is a completely different vision. He and his fellow travelers believe that government provides for the well-being of the people, and that all institutions, including private-sector businesses, function at the pleasure and direction of the government. Whether it is a re-distributive stimulus to try and spark employment, re-distributing resources to increase public-sector employment, or increasing taxes and then re-distributing them from providing security and infrastructure to providing entitlements, the underlying vision is that government owns and controls your wealth to use as it sees fit to provide for the “masses.”

Let’s see how the left’s vision works in the real world. Take public elementary and secondary education. The production of education occurs in the classroom between the teacher and the student. While we have re-distributed so much money to school districts over the last generation that we by far lead the world in per pupil expenditures, look at where it has gone. It hasn’t gone to the classroom, but instead to bloat the size and scope of staff and administration and their facilities to the extent that in many school districts the number of staff and administrators now equals or exceeds the number of teachers. When government sees itself as providing for the well-being of society, it increases its size, and runs every agency the same way—the perpetuation of the agency through increasing employment of staff and administration is seen as more important than the production of the service the agency was designed to provide. Because of this inherent inefficiency, little or no effective service is provided, and the wellbeing of the people is not furthered. Rather than reform this model, the left’s insane answer is to just continue to increase the wealth redistribution and the size of government until they “get it right.” The joke on all of us is that they’ll never get it right following this model.

The left’s model—its vision—simply doesn’t work in the real world over the long run. Not in Europe, and not here. And, as we are seeing in Greece, and throughout the Western world, we can’t afford (culturally, economically, or politically) indulging this vision anymore.

Regardless of who you are supporting in the Republican primaries this year, remember that it is this basic conflict of visions between the importance of a private sector job and the importance of bureaus and bureaucrats, which is at the foundation of our battle this year for our nation’s future.

Citizenship and “Right-Wing Social Engineering”

This column originally appeared at Big Jolly Politics:

Last night, as I listened to Newt Gingrich’s victory speech after winning the South Carolina Republican Presidential Primary, he made several statements the caught my attention—but none more than his nod to Governor Perry’s endorsement and their shared commitment to the 10th Amendment and returning power to the states.  As he discussed this point he said that one of the reasons he was asking voters to be “with me not just for me” was because as “we shrink the federal bureaucracy” we must “grow citizenship back home to fill the vacuum.”

I could not agree more strongly.  As I’ve tried to challenge fellow Republicans over the last few years, if we are successful in electing Republican majorities at every level of government and a Republican President, in 2012; and if we are successful in passing the legislation needed to limit the size and scope of the federal government and balancing its budget—what then?  The needs of our fellow citizens that the left has tried to address through federal-government schemes over the last 50 years won’t miraculously disappear.  The divisions that Charles Murray discusses in this new article, The New American Divide, which culturally exist within every racial and ethnic community in this country, won’t magically dissolve.  No, the paradox of our victory will be that it only will start our job to fix this country, rather than end it.

For our victory to last, we must use our political freedom to re-assert our liberty, which includes our reciprocal responsibilities as citizens—responsibilities to govern ourselves, our families, our neighborhoods, our schools, and our states. This renewal of self-governance will require our active participation in the life of our communities, rather than continuing to delegate such participation to faceless bureaucrats in distant capitals.  This active participation is the growth in “citizenship back home to fill the vacuum” that Gingrich is championing.  If we don’t accept this responsibility, the activists of the collectivist left will re-emerge and re-take control of government from us—and our unique system won’t survive another spasm of leftist policies.

Now for those who think this is just another “off the cuff” idea from Gingrich, you’re wrong.  In fact, he has been tremendously consistent about the relationship between limiting the federal government and a re-assertion of citizenship for many years.  He made this point in his first major speech as Speaker-elect to the National Press Club in late 1994, and in the “American Civilization” college courses he taught in the mid-1990s.  Nor is this idea new and revolutionary—it formed the heart of our Settlers’ and Founders’ view of America that de Tocqueville observed in action, and it formed the foundation of Reagan’s blueprint for his “New Republican Party” in 1977.

In fact, in a uniquely Gingrichian way, his widely derided critique of Paul Ryan’s budget proposal last year was consistent with his view of the need for citizenship.  His point was not that he disagreed with the ends or the means of that budget, but that such broad and fundamental reforms contained in that budget would not work unless and until the people were ready to re-accept their responsibilities at the local level—it was putting the cart before the horse.  To force such a sweeping change on people until they are persuaded to accept what that change means to their lives, would be “social engineering” from the present status quo that depends on federal involvement.

Now, I agree that Newt’s choice of words was wrong, but his point was correct.  As we fix the federal government, we must persuade the American people to re-assert their citizenship and to accept the responsibilities that citizenship will require from all of us.  Like you, I want, and the country needs, Paul Ryan’s approach to fixing the budget and the federal government, but it won’t work, and it will only delay the day on which we become a European welfare state, if we don’t become real citizens of this great nation again.  In fact, look in the mirror and ask yourself—isn’t this re-commitment to citizenship what the Tea Party movement was all about?  I can tell you that this re-commitment to citizenship is what forms the basis for the “Renewing the American Community” plan that I and others have been working to develop for the last two years.

So, whether Newt, Rick, Ron or Mitt becomes our nominee, we must dedicate ourselves like our forefathers did—with our lives, our fortunes, and our sacred honor—to not just taking back the government from the left, but to rebuilding the bonds of citizenship with each other in order for our reforms to work and for America to remain the exceptional and indispensable nation—and Reagan’s ideal of a Shining City on a Hill.

My Letter to Mitt Romney

This letter originally appeared at Big Jolly Politics:

Well, as the Republican Presidential roadshow moves on to South Carolina, I must admit that the disappointment I expressed in my last post is turning, slowly, to a begrudging acceptance of the looming reality we face. No matter how much I still hope that another candidate will emerge during the primaries, or at the convention, whose views and experience show him or her to be a real Conservative reformer, history shows that such a development is highly unlikely now. Therefore, I must prepare to support Mitt Romney if he wins the nomination, because I can not stand by and let Obama’s Democratic Party win this election.

But, bowing to such reality does not mean that I, and those of you who agree with me, must drop our desire for reform based on Reagan’s New Republican Party blueprint of 1977, and the recent 10^th Amendment movement. Instead, we should work to give Governor Romney (or whoever may still emerge from this process) the tools and support he will need to make the reforms we want: retention of the GOP’s House majority; gaining a GOP majority in the Senate and changing the filibuster rules once and for all to allow the basic business of government, like the passage of a budget, to be done; and retention and expansion of our majority in state houses and governorships. Above all else, we must continue to remind Governor Romney of what we want to see our party accomplish if it wins this election.

To that last end, here is my open letter to the Governor:

Dear Governor Romney:

As a supporter of another candidate in the GOP field this year, I congratulate you on your victories to date, and on the progress you are making toward winning the nomination of our party for the Presidency. Though there are many contests still to be fought in this process, and through those contests I will remain part of the loyal opposition, I want you to know that, as a Reagan Conservative, I will support you and work for your election if you win the GOP nomination. That said, I want to share some thoughts with you about this race from someone who has not supported you to date.

I have been told from a close friend who worked with you after you took over the 2002 Winter Olympics, that you are one of the finest managers of people and of business with whom he has ever worked. That is high praise, indeed. Moreover, your history of accomplishments in the private sector, and as Governor of a very Democratic state, supports this praise of your managerial skills. But, many of us believe that we need more than just a better manager to fix what ails this country, and we desperately hope that you are ready for the challenges you must face if you win this election. In light of this concern, I, for one, was impressed by one of the answers you gave in a recent debate in which you outlined what you believed to be the core issue against Obama as a conflict of visions of this country and for its future.

I hope you will expand on this theme over the coming months in the context of addressing the deep, structural problems that we as a people must address, debate, and resolve if we are to climb out of the whole we have dug for ourselves over the last few years. Although others may articulate these problems differently, I believe we face three fundamental problems that underlie virtually every problem you and your fellow Republican candidates have been discussing and debating during this campaign:

• The American people need to decide what role they want government to have in their lives, in the lives of their families, and in the lives of their communities—and why government should have such a role. To make this decision, we will need to take a hard look at how and where we (currently, and will in the future) live and work in the 21^st Century, and what activities must remain within the responsibility of individuals, their families, and their private organizations and churches to address. Once we take that hard look, we then will need to determine what activities need the attention of the collective responsibility of government (by itself or in coordination with the private sector), as opposed to remaining solely within the responsibility of the private sector. My guess is that the outcome of this debate will result in a different allocation of responsibility than what our ancestors, and even our parents, would have made, but we will never be able to address the future spending and revenue needs of the public sector of this country unless we have a candid discussion of this issue.
• Once this basic decision is made, we need to determine which responsibilities involve international or interstate activities, and which involve local or intrastate activities. Based on that determination, we need to apply our constitutional rules to determine which level of government should address each responsibility.
• Once this determination is made, the federal government needs to be reformed—branch by branch, and department by department—to address its international and interstate responsibilities efficiently and cost-effectively, and state and local governments need to be encouraged to do the same. Then, budget and tax policies need to be reformed to provide the resources needed to address these responsibilities in a manner that recognizes that wealth and property, in the first instance, belong to those who created them.

Governor, my guess is that most people will want government to continue to take responsibility for many of the activities that government programs currently attempt to address. The difference will be that such responsibilities should be, and will be re-allocated so that they are addressed more efficiently and cost-effectively at the local and state levels, and at those levels will be more likely to share their work with the private sector in each community. Moreover, such re-allocation will naturally cut from government much of the bureaucratic duplication that leads to the growth in the size, cost and debt of government at all levels. Finally, if people realize that the GOP doesn’t want to throw their grandparents into poverty, or abandon safety nets for our neighbors in true need, but, instead, wants to reform government consistent with its properly limited structure to make it more effective and to engage our citizens again to become active participants in the lives of the neighbors and neighborhoods, much of the wind will be taken from the sails of the great Democratic argument that has portrayed Republicans as unfeeling and uncaring extremists for generations.

That last point leads me to the final part of this letter. You recently have been criticized over the activities of Bain Capital while you managed that company. While some conservative commentators are wringing their hands over this development, I believe that this criticism, coming now, is a blessing to your candidacy, because it gives you an opportunity to turn this criticism into a strength during the rest of the election cycle. To create this strength, you need to understand the fears that the stereotypes underlying these criticisms arouse, and address the country about how the free market works and how you would apply your experience from your role in the free market to reform the government.

Ever since Commodore Vanderbilt took advantage of the economic depression of the late 1830s at the dawn of the railroad boom, Americans have had a love-hate relationship with those who have provided the financial capital within our free market system. We know that we have needed the Vanderbilts, the Morgans, the Carnegies, the Mellons, … and the Bain Capitals, along with banks and bondholders, to provide the loans, the bonds and the equity entrepreneurs need to turn their ideas into products and services—and wealth. In turn, we know that the wealth that is created employs people, whose earnings support their families, their communities and their states, and the nation. But most Americans have never embraced the bankers and investors as the positive image of the free market.

Instead, we tend to identify the free market with the “Horatio Alger” story of the entrepreneur—the man or woman who has the initial idea, who puts his or her own money and labor into the development of the idea into a product or service, and who creates a successful business that employs people, and builds and spreads wealth, from such efforts. Meanwhile, we have come to view the bankers and the investors as necessary evils in the free-market process who obtain their wealth without rolling-up their sleeves and building a business, and who retain the interest and dividends they were paid even after the businesses fail. Indeed, a popular post-war novel that was later made into a popular movie—Cash McCall—had as its central character such an investor, who endured many of the same criticisms that are now being leveled at you and Bain Capital.

But the ending of that story is instructive. McCall buys a business that appears to be about to fail, and then merges it with its main customer and receives what appears to be a fast, windfall return for his investors. The founder of the business who sold it to McCall is irate and feels swindled, until he realizes that McCall’s fresh set of eyes found a nugget of value that the founder never understood and would have never marketed—patents on the products he had developed. Those patents, locked away and forgotten, had hidden value in the market for the company, and it took an outsider to find it. Companies like Bain Capital bring that fresh pair of outside eyes that are able to objectively reassess the value of an entity and reform it to make it more effective, in return for a fee and/or a dividend.

Like McCall, sometimes Bain’s efforts work, and sometimes there is no long-term value to find or develop and the company fails. Anyone who has ever laid-off or fired an employee, or closed a business, knows how hard that is—you’re not just asking a person to leave, you are ending a source of income and benefits that supports a family, and that indirectly supports a community. When that happens, stresses are put on families, neighborhoods, schools and churches—and governments—to help these people through their time of transition. In part, investors use many of the dividends they receive to pay, through contributions and taxes, to support the organizations and governments that provide the support to individuals in time of need and to create the infrastructure in our communities. In the end, investors and banks that provide capital play an indispensible role in the creation of wealth and employment in a free market, and in the maintenance of our communities.

Your experience from providing that fresh pair of eyes in the evaluation of businesses can translate well to the need we now have for reform—and you need to tell the American people about the relevance of that experience to the challenges we face. We need a fresh pair of eyes to look at the responsibilities that the federal government has assumed, and to re-allocate them; to look at how the federal government is structured, and to reform it; and to look at how the money is raised and spent by the federal government, and to stop deficit spending. The only difference between your time at Bain and the challenge you face is this—you can’t just close the federal government; but you can, and you must, close agencies and departments, and stop paying for activities, if their missions no longer fit the proper allocation of federal responsibility or an efficient allocation of federal resources.

Governor, you have been given a great opportunity to tell this story of the free market, of how your experience in the free market (coupled with your unique experience as a Republican Governor of an archetypal Democratic state) applies to the challenges you will have to address, and how our Republican vision contrasts with the economic vision of the Democrats. Please use the criticism you are now getting to further refine a positive narrative before the general election campaign, so that we truly can present a vision to the American people this fall that competes with the socialist vision of capitalists and the free market as evil. If you develop such a positive message that dovetails with a positive plan for government reform, you can carry the Reagan mantle into the fall election. I hope you will.

Sincerely,

Ed Hubbard

To save the Reagan Revolution and the 10th Amendment, we may need a brokered convention

This column originally appeared at Big Jolly Politics:

In the wake of the Iowa Caucus results yesterday, it would be fair to say that I am disappointed with the direction in which the Republican nomination process is headed. There was essentially a three-way tie between a managerial Republican of the Eisenhower mold from Massachusetts, a pro-life statist Republican of the William Jennings Bryan mold who lost his last statewide election by 18%, and an anti-government libertarian who has never been elected to office outside his Congressional District in Texas. If this race continues along this course, I am afraid that the budding Reaganite movement to resurrect and implement the principles of the 10^th Amendment will die on the vine. In a year when we Conservatives have the greatest chance since 1980 of not only winning the Presidency, but changing the direction of the country, this development is depressing.

Then, I read here that a number of self-anointed leaders were being invited to convene at a Texas ranch to try to short-circuit the nomination process and pick a “conservative” candidate for us to support. Given the track record of the leaders of this group, I have no confidence that the candidate they choose to support will be Conservative, or will give a hoot about the 10^th Amendment. As depressed as I am at the current state of the race, this attempt to hijack the process is wrong. I, for one, am not inclined to support anyone anointed through such a process.

As hard as it is to watch this nomination process unfold, it should be allowed to unfold. It should be allowed to go through all of the primaries, and then to the convention. Let’s still give our 10^th Amendment candidates, like Perry and Gingrich, the chance to continue to make their case through the primaries, and let’s really see if any of these candidates has what it takes to win this nomination. Then, if no candidate receives a majority of the delegates before the convention starts, let the convention pick the nominee. Those are the rules of our party, and the rules under which we started this race, so let’s follow them.

In fact, the way that this race is unfolding, I believe that a brokered convention could lead to the nomination of a strong Conservative candidate—one who understands the real promise of the Reagan Revolution and the 10^th Amendment, and one who is fighting in the trenches to make conservatism work. One who believes the following:

… Americans, in a vast majority, are still a people born for self-governance. They are ready to summon the discipline to pay down our collective debts as they are now paying down their own; to put the future before the present, their children’s interest before their own. …
We should distinguish carefully skepticism about Big Government from contempt for all government. After all, it is a new government we hope to form, a government we will ask our fellow citizens to trust to make huge changes. …

… If freedom’s best friends cannot unify around a realistic, actionable program of fundamental change, one that attracts and persuades a broad majority of our fellow citizens, big change will not come. Or rather, big change will come, of the kind that the skeptics of all centuries have predicted for those naïve societies that believed that government of and by the people could long endure. …

The second worst outcome I can imagine for next year would be to lose to the current president and subject the nation to what might be a fatal last dose of statism. The worst would be to win the election and then prove ourselves incapable of turning the ship of state before it went on the rocks, with us at the helm.

The man who spoke these words was Governor Mitch Daniels of Indiana, in his address at last year’s CPAC convention (full text here). Daniels is one potential candidate, other than Perry or Gingrich, who the convention delegates could turn to, but there are others—like Governors Walker of Wisconsin, Snyder of Michigan, Kasich of Ohio and Christie of New Jersey, who are fighting to rebuild their state governments consistent with principles of Reagan’s New Republican Party, and like Paul Ryan, who has championed a new vision for government through his bold proposals. One or more of these men could still jump into this race before the April “winner-take-all” primaries begin if Perry or Gingrich don’t catch fire, or they could still answer the call of a brokered convention.

So, let this process unfold, and, while doing so, let’s fight for our future through the rules provided. Let’s not let any self-anointed group choose our nominee—let’s control this process to the very end. If we do, I still believe we will choose someone, either through the primaries or at the convention, who not only will beat Obama, but will lead us through the changes we need to implement to preserve the promise of the country for our children and grandchildren.