As the stock market bubbled ever higher in the 1990s, managers of pension plans ratcheted up their expectations of future "permanent" growth, giving politicos the go-ahead to ramp up pension pay-outs.From 2002 to 2008, pension payments to retirees grew 56%, triple the inflation rate.In essence, pension plans, which were once constructed on the long-term expectation of 4-5% returns on capital, now based future earnings and pay-outs on the stock market's "average return" of 8% annually.As any reasonable person might have foreseen, the bubblicious stock market of the 1990s was not a "new permanent plateau" but, in fact, a bubble which imploded. Real returns in the past decade have been literally half what was anticipated and, as a result, state and local governments are having to make up the difference with cash out of general fund tax receipts.
Low-wage public-sector workers also had better access to retirement plans: 74% were eligible, compared with 40% in the private sector. - The Public Sector “Haves” Get Richer Benefits Too…, The Swine Line, July 28, 2010
Having public pensions being so superior and far better than private retirement savings — and the inevitable backlash this would produce — is one of the unavoidable adjustments similar to falling house prices. This huge gap of public employees being so much better compensated than private employees became visible about a year ago even in just ordinary news reports in the papers, for those that read widely.Just like falling house prices, this will be adjusted, sometimes by drastic action (similar to a foreclosure being drastic). The bottom line is that taxpayers cannot be expected to make public employees far more comfortable than themselves. - Hal Horvath, Pension Envy, Pension Crisis, On Point Radio, July 28, 2010
Private sector defined benefit (DB) plans, private sector defined contribution (DC) plans, and state and local pension plans have all suffered declines of over 25 percent of their 2007 values, but that is simply another way of stating that the three types of plans (in aggregate) had basically the same portfolio composition at the end of 2007. The one exception is the federal government's civilian retirement plan, which (for the DB portion) is similar to Social Security insofar as the investments are completely in non-marketable government debt issues ... To date, the most immediate effects of the stock market crash have been on DC participants planning to retire in the next few years. However, all DC participants observe, when reading their quarterly statements or checking on-line balances, that they have incurred dramatic losses ... The extent to which the 2008 stock market crash affected pension participants obviously depends on the extent to which those participants were invested in the stock market before the crash. We use data from the Federal Reserve Board's Flow of Funds Accounts to measure the aggregate change in pension assets across the four broad categories of plans: private sector DB, private sector DC, state and local, and federal civilian. Of these, all but the federal civilian employee plan were greatly exposed to the drop in equity prices. This distinction is reflected in the approach to funding pensions before 2008; all but the federal civilian plan relied on equity exposure to achieve funding targets, which allowed lower contribution rates. - How will the stock market crash affect the choice of pension plans?, National Tax Journal, September 1, 2009 Only 9% of all private sector workers are now represented by a union, less than half the percentage of two decades ago. Meanwhile, the proportion of state and local workers with union representation has held steady over the same time, at about 43%... Government pensions are generally much richer than those offered by corporations. The average public sector employee now collects an annual pension benefit of 60% after 30 years on the job or 75% if he is one of the one-fifth or so of workers who are not eligible to collect Social Security benefits. Of the corporate employers that still offer traditional pensions, the average benefit is equal to 45% of salary after 30 years... Just as important, about 80% of government retirees receive pensions that are increased each year to keep pace with the cost of living, a feature which protects pensions against the effects of inflation and that can increase the value of a typical pension by hundreds of thousands of dollars over a person's retirement. But such inflation protection is nonexistent in corporate plans. - Bankrupt Public Pensions: A Time Bomb That Will Explode, AnchorRising.com, May 16, 2005
Corporations have been moving away in massive numbers from the defined benefit programs that governments had emulated. In 2008, just 48,000 companies in the U.S. offered pension programs -- down from 150,000 in 1988. Instead of maintaining costly pensions and committing to a lifetime of defined benefits for retirees, companies contributed to mobile retirement accounts, such as 401(k)s. The nation's workforce has also changed. By January 2010, for the first time, public employees made up the largest percentage of union workers. Several recent studies show that at least some public employees now make more than their private-sector counterparts, although that is not true across the board. - Public Pay, Benefits Set Off New 'Civil War', Star Tribune, February 13, 2011
For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector. -Want to Get Rich? Work for Feds, Washington Examiner, April 29, 2010
One-third of the 2009 stimulus money went to state and local governments--an obvious payoff to the public employee unions which gave hundreds of millions of dollars to Democrats and got hundreds of billions of dollars in return, to insulate public employee unions from the effects of the recession which has affected everyone else. - Michael Barone, The Case Against the Public Employee Unions, Washington Examiner, April 20, 2010
Obama cannot be reelected in 2012 unless union pockets are full of taxpayer money and dues from members who are coerced to join them (and voting union members who think he will give them stuff!). Frankly, Obama and those behind him want to create chaos because they know chaos will lead to civil unrest. The people driving the unions want civil unrest because then people look to government to literally save them. Believe me, what is going on in the Middle East is connected to what is happening here—they are the same agitators. Some of these union leaders were in Egypt helping the Revolution along! As we go into the next tumultuous weeks, keep in mind, the enemy of the Tea Party is not your average apolitical local teacher, fireman or policeman, but the union leaders who are using regular folks as their foils for changing our form of government.Pensions are simply a pretense for creating division and strife. Progressives (Socialists, Marxists, whatever you want to call them) know this is the best chance they have had in a century to “change” America and it is slipping away from them—Obama has less than two years (we hope it’s only two) to get it done! They know that, and they are desperate. I repeat, this is not about pensions! This is about creating civil unrest and pitting neighbor against neighbor to bring America, as we know it and love it, to its knees! - Unions to 'Storm' Annapolis on March 14th - Counter Protest Scheduled, Right Coast Conservative, March 13, 2011
We will have world government whether or not we like it. The only question is whether world government will be achieved by conquest or consent. - James Paul Warburg, Monopoly Banker, Testimony before the U.S. Senate Committee on Foreign Relations, February 17, 1950 (Warburg was an agent of the Rockefeller-JP Morgan-Rothschild banking bloc and son of Paul Warburg, chief architect of the Federal Reserve Corporation, an unconstitutional private bank monopoly set up for cartel hegemony.)
A key player in the nation's unfolding pension debacle is rarely fingered--The Federal Reserve.
If you reckon state and local government have created their own guaranteed-to-go-bankrupt pension problem, you'd be half-right: the Federal Reserve's policies of the past two decades are the crumbling foundation beneath the nation's unsustainable pension plans.
Here's a precis of how the nation's local government pension plans were set to implode.
Public unions formed an unholy alliance with elected officials (in effect, an oligarchy) to establish politically untouchable protected fiefdoms.
In a typical labor-management nexus, labor negotiates with capital for a slice of the profits from the enterprise. In local government, the unions lavishly funded the election campaigns of state and local politicos, who then awarded unions lavish pensions and other benefits. There was no "push-back" against union demand except elections, and the unions stupendous "investment" in buying politicos ensured elections were never a threat to the fiefdom's rising share of the tax swag.
Here is an MSM (mainstream media) summary of the public-union/politico oligarchy:The Bankrupting of America: We have a ruinous collaboration of elected officials and unionized public workers.
As the stock market bubbled ever higher in the 1990s, managers of pension plans ratcheted up their expectations of future "permanent" growth, giving politicos the go-ahead to ramp up pension pay-outs.
In essence, pension plans, which were once constructed on the long-term expectation of 4-5% returns on capital, now based future earnings and pay-outs on the stock market's "average return" of 8% annually.
As any reasonable person might have foreseen, the bubblicious stock market of the 1990s was not a "new permanent plateau" but, in fact, a bubble which imploded. Real returns in the past decade have been literally half what was anticipated and, as a result, state and local governments are having to make up the difference with cash out of general fund tax receipts.
Currently, Riordan says, the city is struggling to meet its pension obligations, and that's assuming it will receive 8% annually on the money invested on retirees' behalf. In fact, the average return over the past decade has been just 4%.
As tax receipts plummet in the "slow-growth," jobless recession, then state and local governments are forced to gut their programs to fund the oligarchy / fiefdom's pension promises.
Los Angeles officials say Riordan's prediction is overstated. But pension costs are soaring to $800 million, tripling during the last decade, as Los Angeles faces years of projected budget deficits even with deep cuts in services and staff.
Since the pension pay-outs were based on plump stock market returns, the pension plan managers had no alternative but to gamble in the stock market on a massive scale. With "safe" bonds paying so little in the Fed's low-interest universe, the only way to get an 8% yield was to speculate in real estate or stocks. As the sharpy behind the three-card-monte card table could have told you, the pension fund sheep got sheared along with all the other marks:
The main driver of higher pension costs is the stock market crash. CalPERS gets about 75% of its revenue from investment earnings. Its portfolio peaked at $260 billion in 2007, fell to $160 billion last year and now is about $204 billion.
Now that the stock market is setting up for a long-term crash, CalPERS will be lucky to have $100 billion in its coffers in two years. And that won't be enough to fund the bloated promises made in the go-go 1990s:
A political issue is the benefit increases enacted a decade ago, when pension systems had surpluses during a strong economy. A major increase for state workers, SB400 in 1999, even included retirees.
A typical state worker can retire after 40 years of service with a pension equal to their final pay. The formula for the Highway Patrol, 3 percent of final pay for each year served at age 50, became a statewide trendsetter for police and firefighters.
In the usual gaming, favored by gutless politicos desperate to cling to their diminishing power to channel tax funds to their cronies and masters, elected officials are setting aside their pension fund contributions until next year, in the hopes that "growth" will magically save them next year.As this article explains, that is a vain hope without foundation in the real world:
But under the laws now dominating government budgets, many expenditures essentially are or will be growing faster than both revenues and the rest of the economy. In fact, in many areas of the budget, automatic expenditure growth matches or outstrips revenue growth under almost any conceivable rate of economic growth.
Now, so much spending growth is built into permanent or mandatory programs that they essentially absorb much or all revenue growth. Meanwhile, we've also cut taxes, widening the gap between available revenues and growing spending levels.
Consider government retirement programs. Most are effectively "wage-indexed" insofar as a 10 percent higher growth rate of wages doesn't just raise taxes on those wages, it also raises the annual benefits of all future retirees by 10%. Meanwhile, in most retirement systems, employees stop working at fixed ages, even though for decades Americans have been living longer.
Today, so much of government spending is devoted to health and retirement programs that their growing costs tend to swamp gains we might achieve in holding down the ever-smaller portion of the budget devoted to discretionary spending. Still other programs add to the problem, such as tax subsidies for employee benefits, the cost of which grows automatically without any new legislation.
In other words, the entire system of state and local government is now based on the same 8% "permanent high growth" of the 1990s speculative market.Funding increases are wired in, regardless of how much tax revenues fall. That is a recipe for insolvency.
Now we get to the heart of the matter.Which institution engineered and enabled the heady stock market bubble of the 1990s that created the illusion of "permanent high returns" and growth of tax receipts? The Federal Reserve.
The Greenspan-era Federal Reserve's policy of low interest rates, abundant liquidity and lax oversight directly created the incentives and the wherewithal for malinvestment and speculation on a scale heretofore unknown. Under the phony guise of "boosting productivity and home ownership" with essentially free money and splendid opportunities for embezzlement, fraud and gaming of the system, the Fed studiously avoided any policy which might have offered some modest restraint on the asset bubbles it inflated.
As the dot-com era market foamed into an unmistakable bubble, wiser heads implored Greenspan to increase the margin requirement for borrowing funds to play the market--he steadfastly refused. Whatever barriers remained to rampant speculation were dismantled under the false banner of deregulation in the service of free enterprise.
Thus the Glass-Steagalldivide between commercial and investment banking was effectively dismantled in 1980 (under President Carter) and the late 1990s (under President Clinton). (So much for the blame being placed solely on the evil Republican lackeys of the bankers-- the "liberal" Democrats were just as craven and slavish.)
Thanks to these long-standing Fed policies favoring exponential expansion of credit and low interest rates, pensions funds were forced into speculating in the stock market to "reach" for their required return on capital.
This certainly suited Wall Street and the deeply politicized leaders of the supposedly independent Federal Reserve, but it set in motion a set of policies, expectations and incentives which fatally undermined pension plans.
In a richly ironic playing out of unintended consequence, the Fed's "zero interest rate policy" (ZIRP) and endless creation of credit for speculation in asset bubbles will in effect bankrupt all the states and local governments which foolishly based their pension plans on 8% yield in a low-inflation environment.
But one last pernicious Fed-created self-destruct awaits pension managers scrambling for both safety and yield. As they pour into long-term Treasuries based on low inflation and low interest rates as far as the eye can see, the pension fund managers will find their remaining capital decimated as interest rates rise later this decade.
The Fed's policy of pushing zero interest rates and abundant credit has undermined not just pension plans and local government, but the entire U.S. economy. Asset bubbles and incentives for embezzlement, fraud and gaming the system are not productive. While Bernanke et al. issue ponderous promises that the "nascent recovery" is not just a house of cards flying apart in the rising wind of global volatility and malinvestment, high above his head the chickens are coming home to roost at the Fed.
The crisis in state budgets is not an accident, and it wasn't unforeseeable.
Reason Magazine July 30, 2009
Everywhere you look, states are being crunched by fiscal emergencies that range from painful to excruciating. California, which has been paying bills with IOUs, is now preparing to close state parks and furlough state employees—which is what you have to do when your budget deficit is bigger than the entire budget of some states.
It's not alone.
"At least 39 states have imposed cuts that hurt vulnerable residents," trumpeted a recent report from the liberal Center on Budget and Policy Priorities. California, New York, and Delaware have approved income-tax increases, and Pennsylvania and Illinois are considering doing likewise.
We all know the reason for the squeeze: An unexpected, severe national recession has dried up revenues just when states need funds to help out-of-work citizens. That's true: You would expect the worst downturn in decades to have a negative effect on tax collections. But it's a long way from the whole truth.
The crisis in state budgets is not an accident, and it wasn't unforeseeable. For years, most states have spent like there's no tomorrow, and now tomorrow is here. They bring to mind the lament of Mickey Mantle, who said, "If I knew I was going to live this long, I'd have taken better care of myself."
If they had known the revenue flood wasn't a permanent fact of life, governors and legislators might have prepared for drought. Instead, like overstretched homeowners, they took on obligations they could meet only in the best-case scenario—which is not what has come to pass.
Over the last decade, state budgets have expanded rapidly. We have had good times and bad times, including a recession in 2001, but according to the National Association of State Budget Officers, this will be the first year since 1983 that total state outlays have not increased.
The days of wine and roses have been affordable due to a cascade of tax revenue. In state after state, the government's take has ballooned.Overall, the average person's state tax burden has risen by 42 percent since 1999—nearly 50 percent beyond what the state would have needed just to keep spending constant, with allowances for inflation.
Even low-tax states like Texas and Nevada have followed the same course. No one has been inclined to say, "Taxpayers don't need to send us more money. We've got plenty."
All that growth should have been enough to pay for essential programs and furnish ample reserves, allowing state governments to weather a downturn without major adjustments. But the states put a priority on burning through all the cash they could get.Last year, they spent about 77 percent more than they did 10 years before.
California illustrates the problem. Adam Summers of the libertarian Reason Foundation in Los Angeles has calculated that:
If it "had simply limited its spending increases to the 4.38 percent average annual increase in the state's consumer price index and population growth each years since fiscal year 1990-91, the state would be sitting on a $15 billion budget surplus right now."
Illinois is another problem child. The state's general fund appropriation is some two-thirds higher today than it would be if the state had just kept those outlays in line with inflation over the last two decades. That increase, as in California, is the difference between a gaping deficit and a comfortable surplus.
Then there is New York. Last fall, Democratic Gov. David Paterson called for an end to the "unsustainable growth in state spending" in recent years. Since the mid-90s, he noted, the state budget has doubled, outstripping the inflation rate by nearly twofold. And New York was not exactly notorious for its frugality 15 years ago.
Unlike the federal government, states can't simply run deficits indefinitely. For that reason, they have a powerful duty to pile up surpluses during fat years, which would allow them to make up the revenue that goes missing during lean years.But for many lawmakers, the future extends only to the next election. So any money they have, they feel an insatiable need to lavish on someone.
Politicians are happy to blame the recession for depriving citizens of programs they have come to expect. The recession didn't create the gap between state government commitments and state government resources. It only exposed it.
...How pension funds got into this position is both simple (they got killed in the stock market) and complex (remember the sausage machine).
First, the easy and painful part. One of the most noteworthy actuarial assumptions in a pension plan is the return it expects to earn on invested assets (also called the discount rate because plans discount future liabilities as assets accrue). Most public pensions nationwide use a return benchmark of 8 percent, though they vary higher (Minnesota’s statewide plans use 8.5 percent) and lower (7.75 for the South Dakota Retirement System and several plans in Montana).
This assumption is noteworthy because the return on invested assets over 30 years tends to be very volatile, and small differences in the assumed return—say, between 7.5 percent and 8.5 percent—make a big difference in the calculation of unfunded liabilities. Many pension plans will be funded if they can achieve 8.5 percent returns, on average, for 30 years. But that’s a big and costly “if” because unfunded liabilities accrue if returns fall short, even if everything else in the sausage machine is running perfectly.
Pension advocates say the 8 percent benchmark is based on historical returns, but the fine print of any investor brochure points out that past returns are not a reliable indicator of future returns.
From a short-term view, that might actually be good, because the past decade has been particularly poor (see Chart 5). Since 2001, there have been four negative return years, which are a double whammy for pensions. In 2002, for example, the largest district pensions lost an average of 7 percent, which means actuarial returns fell short of their benchmark by about 15 percentage points...
By Angelo M. Codevilla, The American Spectator July 2010 - August 2010 issue
As over-leveraged investment houses began to fail in September 2008, the leaders of the Republican and Democratic parties, of major corporations, and opinion leaders stretching from the National Review magazine (and the Wall Street Journal) on the right to the Nation magazine on the left, agreed that spending some $700 billion to buy the investors' "toxic assets" was the only alternative to the U.S. economy's "systemic collapse." In this, President George W. Bush and his would-be Republican successor John McCain agreed with the Democratic candidate, Barack Obama.
Many, if not most, people around them also agreed upon the eventual commitment of some 10 trillion nonexistent dollars in ways unprecedented in America.
They explained neither the difference between the assets' nominal and real values, nor precisely why letting the market find the latter would collapse America. The public objected immediately, by margins of three or four to one.
When this majority discovered that virtually no one in a position of power in either party or with a national voice would take their objections seriously, that decisions about their money were being made in bipartisan backroom deals with interested parties, and that the laws on these matters were being voted by people who had not read them, the term "political class" came into use.
Then, after those in power changed their plans from buying toxic assets to buying up equity in banks and major industries but refused to explain why, when they reasserted their right to decide ad hoc on these and so many other matters, supposing them to be beyond the general public's understanding, the American people started referring to those in and around government as the "ruling class."And in fact Republican and Democratic office holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a class.
Although after the election of 2008 most Republican office holders argued against the Troubled Asset Relief Program, against the subsequent bailouts of the auto industry, against the several "stimulus" bills and further summary expansions of government power to benefit clients of government at the expense of ordinary citizens,the American people had every reason to believe that many Republican politicians were doing so simply by the logic of partisan opposition. After all, Republicans had been happy enough to approve of similar things under Republican administrations.
Differences between Bushes, Clintons and Obamas are of degree, not kind. Moreover, 2009-10 establishment Republicans sought only to modify the government's agenda while showing eagerness to join the Democrats in new grand schemes, if only they were allowed to. Sen. Orrin Hatch continued dreaming of being Ted Kennedy, while Lindsey Graham set aside what is true or false about "global warming" for the sake of getting on the right side of history. No prominent Republican challenged the ruling class's continued claim of superior insight, nor its denigration of the American people as irritable children who must learn their place. The Republican Party did not disparage the ruling class, because most of its officials are or would like to be part of it.
Never has there been so little diversity within America's upper crust. Always, in America as elsewhere, some people have been wealthier and more powerful than others. But until our own time, America's upper crust was a mixture of people who had gained prominence in a variety of ways, who drew their money and status from different sources and were not predictably of one mind on any given matter. The Boston Brahmins, the New York financiers, the land barons of California, Texas, and Florida, the industrialists of Pittsburgh, the Southern aristocracy, and the hardscrabble politicians who made it big in Chicago or Memphis had little contact with one another. Few had much contact with government, and "bureaucrat" was a dirty word for all. So was "social engineering." Nor had the schools and universities that formed yesterday's upper crust imposed a single orthodoxy about the origins of man, about American history, and about how America should be governed. All that has changed.
Today's ruling class, from Boston to San Diego, was formed by an educational system that exposed them to the same ideas and gave them remarkably uniform guidance, as well as tastes and habits.These amount to a social canon of judgments about good and evil, complete with secular sacred history, sins (against minorities and the environment), and saints. Using the right words and avoiding the wrong ones when referring to such matters -- speaking the "in" language -- serves as a badge of identity. Regardless of what business or profession they are in, their road up included government channels and government money because, as government has grown, its boundary with the rest of American life has become indistinct.Many began their careers in government and leveraged their way into the private sector. Some, e.g., Secretary of the Treasury Timothy Geithner, never held a non-government job. Hence whether formally in government, out of it, or halfway, America's ruling class speaks the language and has the tastes, habits and tools of bureaucrats. It rules uneasily over the majority of Americans not oriented to government.
The government has been adding jobs over this time:
The two classes have less in common culturally, dislike each other more, and embody ways of life more different from one another than did the 19th century's Northerners and Southerners -- nearly all of whom, as Lincoln reminded them, "prayed to the same God."By contrast, while most Americans pray to the God "who created and doth sustain us," our ruling class prays to itself as "saviors of the planet" and improvers of humanity.Our classes' clash is over "whose country" America is, over what way of life will prevail, over who is to defer to whom about what. The gravity of such divisions points us, as it did Lincoln, to Mark's Gospel: "if a house be divided against itself, that house cannot stand."
The Political Divide
Important as they are, our political divisions are the iceberg's tip. When pollsters ask the American people whether they are likely to vote Republican or Democrat in the next presidential election, Republicans win growing pluralities. But whenever pollsters add the preferences "undecided," "none of the above," or "tea party," these win handily, the Democrats come in second, and the Republicans trail far behind. That is because while most of the voters who call themselves Democrats say that Democratic officials represent them well, only a fourth of the voters who identify themselves as Republicans tell pollsters that Republican officeholders represent them well. Hence officeholders, Democrats and Republicans, gladden the hearts of some one-third of the electorate -- most Democratic voters, plus a few Republicans. This means that Democratic politicians are the ruling class's prime legitimate representatives and that because Republican politicians are supported by only a fourth of their voters, while the rest vote for them reluctantly, most are aspirants for a junior role in the ruling class. In short, the ruling class has a party, the Democrats. But some two-thirds of Americans -- a few Democratic voters, most Republican voters, and all independents -- lack a vehicle in electoral politics.
Sooner or later, well or badly, that majority's demand for representation will be filled. Whereas in 1968 Governor George Wallace's taunt "there ain't a dime's worth of difference" between the Republican and Democratic parties resonated with only 13.5 percent of the American people, in 1992 Ross Perot became a serious contender for the presidency (at one point he was favored by 39 percent of Americans vs. 31 percent for G.H.W. Bush and 25 percent for Clinton) simply by speaking ill of the ruling class.Today, few speak well of the ruling class.Not only has it burgeoned in size and pretense, but it also has undertaken wars it has not won, presided over a declining economy and mushrooming debt, made life more expensive, raised taxes, and talked down to the American people. Americans' conviction that the ruling class is as hostile as it is incompetent has solidified.The polls tell us that only about a fifth of Americans trust the government to do the right thing. The rest expect that it will do more harm than good and are no longer afraid to say so.
While Europeans are accustomed to being ruled by presumed betters whom they distrust, the American people's realization of being ruled like Europeans shocked this country into well nigh revolutionary attitudes. But only the realization was new. The ruling class had sunk deep roots in America over decades before 2008. Machiavelli compares serious political diseases to the Aetolian fevers -- easy to treat early on while they are difficult to discern, but virtually untreatable by the time they become obvious.
Far from speculating how the political confrontation might develop between America's regime class -- relatively few people supported by no more than one-third of Americans -- and a country class comprising two-thirds of the country, our task here is to understand the divisions that underlie that confrontation's unpredictable future. More on politics below.
The Ruling Class
Who are these rulers, and by what right do they rule? How did America change from a place where people could expect to live without bowing to privileged classes to one in which, at best, they might have the chance to climb into them? What sets our ruling class apart from the rest of us?
The most widespread answers -- by such as the Times's Thomas Friedman and David Brooks -- are schlock sociology.Supposedly, modern society became so complex and productive, the technical skills to run it so rare, that it called forth a new class of highly educated officials and cooperators in an ever less private sector. Similarly fanciful is Edward Goldberg's notion that America is now ruled by a "newocracy": a "new aristocracy who are the true beneficiaries of globalization -- including the multinational manager, the technologist and the aspirational members of the meritocracy." In fact, our ruling class grew and set itself apart from the rest of us by its connection with ever bigger government and, above all, by a certain attitude.
Other explanations are counterintuitive. Wealth? The heads of the class do live in our big cities' priciest enclaves and suburbs, from Montgomery County, Maryland, to Palo Alto, California, to Boston's Beacon Hill as well as in opulent university towns from Princeton to Boulder. But they are no wealthier than many Texas oilmen or California farmers, or than neighbors with whom they do not associate -- just as the social science and humanities class that rules universities seldom associates with physicians and physicists. Rather, regardless of where they live, their social-intellectual circle includes people in the lucrative "nonprofit" and "philanthropic" sectors and public policy.What really distinguishes these privileged people demographically is that, whether in government power directly or as officers in companies, their careers and fortunes depend on government. They vote Democrat more consistently than those who live on any of America's Dr. Martin Luther King Jr. Streets. These socioeconomic opposites draw their money and orientation from the same sources as the millions of teachers, consultants, and government employees in the middle ranks who aspire to be the former and identify morally with what they suppose to be the latter's grievances.
Professional prominence or position will not secure a place in the class any more than mere money. In fact, it is possible to be an official of a major corporation or a member of the U.S. Supreme Court (just ask Justice Clarence Thomas), or even president (Ronald Reagan), and not be taken seriously by the ruling class. Like a fraternity, this class requires above all comity -- being in with the right people, giving the required signs that one is on the right side, and joining in despising the Outs.Once an official or professional shows that he shares the manners, the tastes, the interests of the class, gives lip service to its ideals and shibboleths, and is willing to accommodate the interests of its senior members, he can move profitably among our establishment's parts.
If, for example, you are Laurence Tribe in 1984, Harvard professor of law, leftist pillar of the establishment, you can "write" your magnum opus by using the products of your student assistant, Ron Klain. A decade later, after Klain admits to having written some parts of the book, and the other parts are found to be verbatim or paraphrases of a book published in 1974, you can claim (perhaps correctly) that your plagiarism was "inadvertent," and you can count on the Law School's dean, Elena Kagan, to appoint a committee including former and future Harvard president Derek Bok that issues a secret report that "closes" the incident. Incidentally, Kagan ends up a justice of the Supreme Court. Not one of these people did their jobs: the professor did not write the book himself, the assistant plagiarized instead of researching, the dean and the committee did not hold the professor accountable, and all ended up rewarded. By contrast, for example, learned papers and distinguished careers in climatology at MIT (Richard Lindzen) or UVA (S. Fred Singer) are not enough for their questions about "global warming" to be taken seriously. For our ruling class, identity always trumps.
Much less does membership in the ruling class depend on high academic achievement.To see something closer to an academic meritocracy consider France, where elected officials have little power, a vast bureaucracy explicitly controls details from how babies are raised to how to make cheese, and people get into and advance in that bureaucracy strictly by competitive exams. Hence for good or ill, France's ruling class are bright people -- certifiably. Not ours. But didn't ours go to Harvard and Princeton and Stanford?Didn't most of them get good grades? Yes. But while getting into the Ecole Nationale d'Administration or the Ecole Polytechnique or the dozens of other entry points to France's ruling class requires outperforming others in blindly graded exams, and graduating from such places requires passing exams that many fail, getting into America's "top schools" is less a matter of passing exams than of showing up with acceptable grades and an attractive social profile. American secondary schools are generous with their As. Since the 1970s, it has been virtually impossible to flunk out of American colleges.And it is an open secret that "the best" colleges require the least work and give out the highest grade point averages.
No, our ruling class recruits and renews itself not through meritocracy but rather by taking into itself people whose most prominent feature is their commitment to fit in. The most successful neither write books and papers that stand up to criticism nor release their academic records. Thus does our ruling class stunt itself through negative selection. But the more it has dumbed itself down, the more it has defined itself by the presumption of intellectual superiority.
The Faith
Its attitude is key to understanding our bipartisan ruling class. The ruling class's first tenet is that "we" are the best and brightest while the rest of Americans are retrograde, racist and dysfunctional unless properly constrained. How did this replace the Founding generation's paradigm that "all men are created equal"?
The notion of human equality was always a hard sell, because experience teaches us that we are so unequal in so many ways, and because making one's self superior is so tempting that Lincoln called it "the old serpent, you work I'll eat."But human equality made sense to our Founding generation because they believed that all men are made in the image and likeness of God, because they were yearning for equal treatment under British law, or because they had read John Locke.
It did not take long for their paradigm to be challenged by interest and by "science."
By the 1820s, as J. C. Calhoun was reading in the best London journals that different breeds of animals and plants produce inferior or superior results, slave owners were citing the Negroes' deficiencies to argue that they should remain slaves indefinitely. Lots of others were reading Ludwig Feuerbach's rendition of Hegelian philosophy, according to which biblical injunctions reflect the fantasies of alienated human beings or, in the young Karl Marx's formulation, that ethical thought is "superstructural" to material reality.
By 1853, when Sen. John Pettit of Ohio called "all men are created equal" "a self-evident lie," much of America's educated class had already absorbed the "scientific" notion (which Darwin only popularized) that man is the product of chance mutation and natural selection of the fittest.
Accordingly, by nature, superior men subdue inferior ones as they subdue lower beings or try to improve them as they please. Hence while it pleased the abolitionists to believe in freeing Negroes and improving them, it also pleased them to believe that Southerners had to be punished and reconstructed by force.
As the 19th century ended, the educated class's religious fervor turned to social reform: they were sure that because man is a mere part of evolutionary nature, man could be improved, and that they, the most highly evolved of all, were the improvers.
Thus began the Progressive Era. When Woodrow Wilson in 1914 was asked "can't you let anything alone?" he answered with, "I let everything alone that you can show me is not itself moving in the wrong direction, but I am not going to let those things alone that I see are going down-hill."
Wilson spoke for the thousands of well-off Americans who patronized the spas at places like Chautauqua and Lake Mohonk. By such upper-middle-class waters, progressives who imagined themselves the world's examples and the world's reformers dreamt big dreams of establishing order, justice, and peace at home and abroad. Neither were they shy about their desire for power. Wilson was the first American statesman to argue that the Founders had done badly by depriving the U.S. government of the power to reshape American society.Nor was Wilson the last to invade a foreign country (Mexico) to "teach [them] to elect good men."
World War I, and the chaos at home and abroad that followed it, discredited the Progressives in the American people's eyes. Their international schemes had brought blood and promised more. Their domestic management had not improved Americans' lives, but given them a taste of arbitrary government, including Prohibition. The Progressives, for their part, found it fulfilling to attribute the failure of their schemes to the American people's backwardness, to something deeply wrong with America. The American people had failed them because democracy in its American form perpetuated the worst in humanity. Thus Progressives began to look down on the masses, to look on themselves as the vanguard, and to look abroad for examples to emulate.
The cultural divide between the "educated class" and the rest of the country opened in the interwar years. Some Progressives joined the "vanguard of the proletariat," the Communist Party. Many more were deeply sympathetic to Soviet Russia, as they were to Fascist Italy and Nazi Germany. Not just the Nation, but also the New York Times and National Geographic found much to be imitated in these regimes because they promised energetically to transcend their peoples' ways and to build "the new man."
Above all, our educated class was bitter about America.In 1925 the American Civil Liberties Union sponsored a legal challenge to a Tennessee law that required teaching the biblical account of creation. The ensuing trial, radio broadcast nationally, as well as the subsequent hit movie Inherit the Wind, were the occasion for what one might have called the Chautauqua class to drive home the point that Americans who believed in the Bible were willful ignoramuses.
As World War II approached, some American Progressives supported the Soviet Union (and its ally, Nazi Germany) and others Great Britain and France. But Progressives agreed on one thing: the approaching war should be blamed on the majority of Americans, because they had refused to lead the League of Nations. Darryl Zanuck produced the critically acclaimed movie [Woodrow] Wilson featuring Cedric Hardwicke as Senator Henry Cabot Lodge, who allegedly brought on the war by appealing to American narrow-mindedness against Wilson's benevolent genius.
Franklin Roosevelt brought the Chautauqua class into his administration and began the process that turned them into rulers. FDR described America's problems in technocratic terms. America's problems would be fixed by a "brain trust" (picked by him). His New Deal's solutions -- the alphabet-soup "independent" agencies that have run America ever since -- turned many Progressives into powerful bureaucrats and then into lobbyists. As the saying goes, they came to Washington to do good and stayed to do well.
As their number and sense of importance grew, so did their distaste for common Americans.Believing itself "scientific," this Progressive class sought to explain its differences from its neighbors in "scientific" terms. The most elaborate of these attempts was Theodor Adorno's widely acclaimed The Authoritarian Personality (1948). It invented a set of criteria by which to define personality traits, ranked these traits and their intensity in any given person on what it called the "F scale" (F for fascist), interviewed hundreds of Americans, and concluded that most who were not liberal Democrats were latent fascists.
This way of thinking about non-Progressives filtered down to college curricula. In 1963-64 for example, I was assigned Herbert McCloskey's Conservatism and Personality (1958) at Rutgers's Eagleton Institute of Politics as a paradigm of methodological correctness. The author had defined conservatism in terms of answers to certain questions, had defined a number of personality disorders in terms of other questions, and run a survey which proved "scientifically" that conservatives were maladjusted ne'er-do-well ignoramuses. (My class project, titled "Liberalism and Personality," following the same methodology, proved just as scientifically that liberals suffered from the very same social diseases, and even more amusing ones.)
The point is this: though not one in a thousand of today's bipartisan ruling class ever heard of Adorno or McCloskey, much less can explain the Feuerbachian-Marxist notion that human judgments are "epiphenomenal" products of spiritual or material alienation, the notion that the common people's words are, like grunts, mere signs of pain, pleasure and frustration, is now axiomatic among our ruling class. They absorbed it osmotically, second -- or thirdhand, from their education and from companions.
Truly, after Barack Obama described his opponents' clinging to "God and guns" as a characteristic of inferior Americans, he justified himself by pointing out he had said "what everybody knows is true." Confident "knowledge" that "some of us, the ones who matter," have grasped truths that the common herd cannot, truths that direct us, truths the grasping of which entitles us to discount what the ruled say and to presume what they mean, made our Progressives into a class long before they took power.
The Agenda: Power
Our ruling class's agenda is power for itself. While it stakes its claim through intellectual-moral pretense, it holds power by one of the oldest and most prosaic of means: patronage and promises thereof. Like left-wing parties always and everywhere, it is a "machine," that is, based on providing tangible rewards to its members.Such parties often provide rank-and-file activists with modest livelihoods and enhance mightily the upper levels' wealth. Because this is so, whatever else such parties might accomplish, they must feed the machine by transferring money or jobs or privileges -- civic as well as economic -- to the party's clients, directly or indirectly. This, incidentally, is close to Aristotle's view of democracy.
Hence our ruling class's standard approach to any and all matters, its solution to any and all problems, is to increase the power of the government -- meaning of those who run it, meaning themselves -- to profit those who pay with political support for privileged jobs, contracts, etc. Hence more power for the ruling class has been our ruling class's solution not just for economic downturns and social ills but also for hurricanes and tornadoes, global cooling and global warming. A priori, one might wonder whether enriching and empowering individuals of a certain kind can make Americans kinder and gentler, much less control the weather. But there can be no doubt that such power and money makes Americans ever more dependent on those who wield it.
Let us now look at what this means in our time.
Dependence Economics
By taxing and parceling out more than a third of what Americans produce, through regulations that reach deep into American life, our ruling class is making itself the arbiter of wealth and poverty. While the economic value of anything depends on sellers and buyers agreeing on that value as civil equals in the absence of force, modern government is about nothing if not tampering with civil equality. By endowing some in society with power to force others to sell cheaper than they would, and forcing others yet to buy at higher prices -- even to buy in the first place -- modern government makes valuable some things that are not, and devalues others that are. Thus if you are not among the favored guests at the table where officials make detailed lists of who is to receive what at whose expense, you are on the menu. Eventually, pretending forcibly that valueless things have value dilutes the currency's value for all.
Laws and regulations nowadays are longer than ever because length is needed to specify how people will be treated unequally.
For example, the health care bill of 2010 takes more than 2,700 pages to make sure not just that some states will be treated differently from others because their senators offered key political support, but more importantly to codify bargains between the government and various parts of the health care industry, state governments, and large employers about who would receive what benefits (e.g., public employee unions and auto workers) and who would pass what indirect taxes onto the general public.
The financial regulation bill of 2010, far from setting univocal rules for the entire financial industry in few words, spends some 3,000 pages (at this writing) tilting the field exquisitely toward some and away from others.
Even more significantly, these and other products of Democratic and Republican administrations and Congresses empower countless boards and commissions arbitrarily to protect some persons and companies, while ruining others. Thus in 2008 the Republican administration first bailed out Bear Stearns, then let Lehman Brothers sink in the ensuing panic, but then rescued Goldman Sachs by infusing cash into its principal debtor, AIG. Then, its Democratic successor used similarly naked discretionary power (and money appropriated for another purpose) to give major stakes in the auto industry to labor unions that support it.
Nowadays, the members of our ruling class admit that they do not read the laws. They don't have to. Because modern laws are primarily grants of discretion, all anybody has to know about them is whom they empower.
By making economic rules dependent on discretion, our bipartisan ruling class teaches that prosperity is to be bought with the coin of political support. Thus in the 1990s and 2000s, as Democrats and Republicans forced banks to make loans for houses to people and at rates the banks would not otherwise have considered, builders and investors had every reason to make as much money as they could from the ensuing inflation of housing prices. When the bubble burst, only those connected with the ruling class at the bottom and at the top were bailed out.
Similarly, by taxing the use of carbon fuels and subsidizing "alternative energy," our ruling class created arguably the world's biggest opportunity for making money out of things that few if any would buy absent its intervention. The ethanol industry and its ensuing diversions of wealth exist exclusively because of subsidies. The prospect of legislation that would put a price on carbon emissions and allot certain amounts to certain companies set off a feeding frenzy among large companies to show support for a "green agenda," because such allotments would be worth tens of billions of dollars. That is why companies hired some 2,500 lobbyists in 2009 to deepen their involvement in "climate change."At the very least, such involvement profits them by making them into privileged collectors of carbon taxes.Any "green jobs" thus created are by definition creatures of subsidies -- that is, of privilege. What effect creating such privileges may have on "global warming" is debatable. But it surely increases the number of people dependent on the ruling class, and teaches Americans that satisfying that class is a surer way of making a living than producing goods and services that people want to buy.
Beyond patronage, picking economic winners and losers redirects the American people's energies to tasks that the political class deems more worthy than what Americans choose for themselves.John Kenneth Galbraith's characterization of America as "private wealth amidst public squalor" (The Affluent Society, 1958) has ever encapsulated our best and brightest's complaint:
Left to themselves, Americans use land inefficiently in suburbs and exurbs, making it necessary to use energy to transport them to jobs and shopping.
Americans drive big cars, eat lots of meat as well as other unhealthy things, and go to the doctor whenever they feel like it.
Americans think it justice to spend the money they earn to satisfy their private desires even though the ruling class knows that justice lies in improving the community and the planet.
The ruling class knows that Americans must learn to live more densely and close to work, that they must drive smaller cars and change their lives to use less energy, that their dietary habits must improve, that they must accept limits in how much medical care they get, that they must divert more of their money to support people, cultural enterprises, and plans for the planet that the ruling class deems worthier.
So, ever-greater taxes and intrusive regulations are the main wrenches by which the American people can be improved (and, yes, by which the ruling class feeds and grows).
The 2010 medical law is a template for the ruling class's economic modus operandi: the government taxes citizens to pay for medical care and requires citizens to purchase health insurance. The money thus taken and directed is money that the citizens themselves might have used to pay for medical care. In exchange for the money, the government promises to provide care through its "system."But then all the boards, commissions, guidelines, procedures, and "best practices" that constitute "the system" become the arbiters of what any citizen ends up getting. The citizen might end up dissatisfied with what "the system" offers. But when he gave up his money, he gave up the power to choose, and became dependent on all the boards and commissions that his money also pays for and that raise the cost of care.
Similarly, in 2008 the House Ways and Means Committee began considering a plan to force citizens who own Individual Retirement Accounts (IRAs) to transfer those funds into government-run "guaranteed retirement accounts." If the government may force citizens to buy health insurance, by what logic can it not force them to trade private ownership and control of retirement money for a guarantee as sound as the government itself? Is it not clear that the government knows more about managing retirement income than individuals?
Who Depends on Whom?
In Congressional Government (1885) Woodrow Wilson left no doubt: the U.S. Constitution prevents the government from meeting the country's needs by enumerating rights that the government may not infringe. ("Congress shall make no law..." says the First Amendment, typically.)
Our electoral system, based on single member districts, empowers individual voters at the expense of "responsible parties." Hence the ruling class's perpetual agenda has been to diminish the role of the citizenry's elected representatives, enhancing that of party leaders as well as of groups willing to partner in the government's plans, and to craft a "living" Constitution in which restrictions on government give way to "positive rights" -- meaning charters of government power.
Consider representation. Following Wilson, American Progressives have always wanted to turn the U.S. Congress from the role defined by James Madison's Federalist #10, "refine and enlarge the public's view," to something like the British Parliament, which ratifies government actions. Although Britain's electoral system -- like ours, single members elected in historic districts by plurality vote -- had made members of Parliament responsive to their constituents in ancient times, by Wilson's time the growing importance of parties made MPs beholden to party leaders. Hence whoever controls the majority party controls both Parliament and the government.
In America, the process by which party has become (almost) as important began with the Supreme Court's 1962 decision in Baker v. Carr which, by setting the single standard "one man, one vote" for congressional districts, ended up legalizing the practice of "gerrymandering," concentrating the opposition party's voters into as few districts as possible while placing one's own voters into as many as possible likely to yield victories. Republican and Democratic state legislatures have gerrymandered for a half century. That is why today's Congress consists more and more of persons who represent their respective party establishments -- not nearly as much as in Britain, but heading in that direction. Once districts are gerrymandered "safe" for one party or another, the voters therein count less because party leaders can count more on elected legislators to toe the party line.
To the extent party leaders do not have to worry about voters, they can choose privileged interlocutors, representing those in society whom they find most amenable. In America ever more since the 1930s -- elsewhere in the world this practice is ubiquitous and long-standing -- government has designated certain individuals, companies, and organizations within each of society's sectors as (junior) partners in elaborating laws and administrative rules for those sectors. The government empowers the persons it has chosen over those not chosen, deems them the sector's true representatives, and rewards them. They become part of the ruling class.
Thus in 2009-10 the American Medical Association (AMA) strongly supported the new medical care law, which the administration touted as having the support of "the doctors" even though the vast majority of America's 975,000 physicians opposed it. Those who run the AMA, however, have a government contract as exclusive providers of the codes by which physicians and hospitals bill the government for their services. The millions of dollars that flow thereby to the AMA's officers keep them in line, while the impracticality of doing without the billing codes tamps down rebellion in the doctor ranks.
When the administration wanted to bolster its case that the state of Arizona's enforcement of federal immigration laws was offensive to Hispanics, the National Association of Chiefs of Police -- whose officials depend on the administration for their salaries -- issued a statement that the laws would endanger all Americans by raising Hispanics' animosity. This reflected conversations with the administration rather than a vote of the nation's police chiefs.
Similarly, modern labor unions are ever less bunches of workers banding together and ever more bundled under the aegis of an organization chosen jointly by employers and government. Prototypical is the Service Employees International Union, which grew spectacularly by persuading managers of government agencies as well as of publicly funded private entities that placing their employees in the SEIU would relieve them of responsibility. Not by being elected by workers' secret ballots did the SEIU conquer workplace after workplace, but rather by such deals, or by the union presenting what it claims are cards from workers approving of representation. The union gets 2 percent of the workers' pay, which it recycles as contributions to the Democratic Party, which it recycles in greater power over public employees. The union's leadership is part of the ruling class's beating heart.
The point is that a doctor, a building contractor, a janitor, or a schoolteacher counts in today's America insofar as he is part of the hierarchy of a sector organization affiliated with the ruling class.Less and less do such persons count as voters.
Ordinary people have also gone a long way toward losing equal treatment under law. The America described in civics books, in which no one could be convicted or fined except by a jury of his peers for having violated laws passed by elected representatives, started disappearing when the New Deal inaugurated today's administrative state -- in which bureaucrats make, enforce, and adjudicate nearly all the rules. Today's legal -- administrative texts are incomprehensibly detailed and freighted with provisions crafted exquisitely to affect equal individuals unequally. The bureaucrats do not enforce the rules themselves so much as whatever "agency policy" they choose to draw from them in any given case. If you protest any "agency policy" you will be informed that it was formulated with input from "the public." But not from the likes of you.
Disregard for the text of laws -- for the dictionary meaning of words and the intentions of those who wrote them -- in favor of the decider's discretion has permeated our ruling class from the Supreme Court to the lowest local agency. Ever since Oliver Wendell Holmes argued in 1920 (Missouri v. Holland) that presidents, Congresses, and judges could not be bound by the U.S. Constitution regarding matters that the people who wrote and ratified it could not have foreseen, it has become conventional wisdom among our ruling class that they may transcend the Constitution while pretending allegiance to it. They began by stretching such constitutional terms as "interstate commerce" and "due process," then transmuting others, e.g., "search and seizure," into "privacy." Thus in 1973 the Supreme Court endowed its invention of "privacy" with a "penumbra" that it deemed "broad enough to encompass a woman's decision whether or not to terminate her pregnancy." The court gave no other constitutional reasoning, period. Perfunctory to the point of mockery, this constitutional talk was to reassure the American people that the ruling class was acting within the Constitution's limitations. By the 1990s federal courts were invalidating amendments to state constitutions passed by referenda to secure the "positive rights" they invent, because these expressions of popular will were inconsistent with the constitution they themselves were construing.
By 2010 some in the ruling class felt confident enough to dispense with the charade. Asked what in the Constitution allows Congress and the president to force every American to purchase health insurance, House Speaker Nancy Pelosi replied: "Are you kidding? Are you kidding?"No surprise then that lower court judges and bureaucrats take liberties with laws, regulations, and contracts. That is why legal words that say you are in the right avail you less in today's America than being on the right side of the persons who decide what they want those words to mean.
As the discretionary powers of officeholders and of their informal entourages have grown, the importance of policy and of law itself is declining, citizenship is becoming vestigial, and the American people become ever more dependent.
Disaggregating and Dispiriting
The ruling class is keener to reform the American people's family and spiritual lives than their economic and civic ones. In no other areas is the ruling class's self-definition so definite, its contempt for opposition so patent, its Kulturkampf so open.It believes that the Christian family (and the Orthodox Jewish one too) is rooted in and perpetuates the ignorance commonly called religion, divisive social prejudices, and repressive gender roles -- that it is the greatest barrier to human progress because it looks to its very particular interest, often defined as mere coherence against outsiders who most often know better. Thus the family prevents its members from playing their proper roles in social reform. Worst of all, it reproduces itself.
Since marriage is the family's fertile seed, government at all levels, along with "mainstream" academics and media, have waged war on it. They legislate, regulate, and exhort in support not of "the family" -- meaning married parents raising children -- but rather of "families," meaning mostly households based on something other than marriage. The institution of no-fault divorce diminished the distinction between cohabitation and marriage -- except that husbands are held financially responsible for the children they father, while out-of-wedlock fathers are not. The tax code penalizes marriage and forces those married couples who raise their own children to subsidize "child care" for those who do not.
Top Republicans and Democrats have also led society away from the very notion of marital fidelity by precept as well as by parading their affairs. For example, in 1997 the Democratic administration's secretary of defense and the Republican Senate's majority leader (joined by the New York Times et al.) condemned the military's practice of punishing officers who had extramarital affairs. While the military had assumed that honoring marital vows is as fundamental to the integrity of its units as it is to that of society, consensus at the top declared that insistence on fidelity is "contrary to societal norms."
Not surprisingly, rates of marriage in America have decreased as out-of-wedlock births have increased. The biggest demographic consequence has been that about one in five of all households are women alone or with children, in which case they have about a four in 10 chance of living in poverty. Since unmarried mothers often are or expect to be clients of government services, it is not surprising that they are among the Democratic Party's most faithful voters.
While our ruling class teaches that relationships among men, women and children are contingent, it also insists that the relationship between each of them and the state is fundamental. That is why such as Hillary Clinton have written law review articles and books advocating a direct relationship between the government and children, effectively abolishing the presumption of parental authority. Hence whereas within living memory school nurses could not administer an aspirin to a child without the parents' consent, the people who run America's schools nowadays administer pregnancy tests and ship girls off to abortion clinics without the parents' knowledge.
Parents are not allowed to object to what their children are taught. But the government may and often does object to how parents raise children. The ruling class's assumption is that what it mandates for children is correct ipso facto, while what parents do is potentially abusive. It only takes an anonymous accusation of abuse for parents to be taken away in handcuffs until they prove their innocence. Only sheer political weight (and in California, just barely) has preserved parents' right to homeschool their children against the ruling class's desire to accomplish what Woodrow Wilson so yearned: "to make young gentlemen as unlike their fathers as possible."
At stake are the most important questions: What is the right way for human beings to live? By what standard is anything true or good? Who gets to decide what? Implicit in Wilson's words and explicit in our ruling class's actions is the dismissal, as the ways of outdated "fathers," of the answers that most Americans would give to these questions. This dismissal of the American people's intellectual, spiritual and moral substance is the very heart of what our ruling class is about. Its principal article of faith, its claim to the right to decide for others, is precisely that it knows things and operates by standards beyond others' comprehension.
While the "unenlightened ones" believe that man is created in the image and likeness of God and that we are subject to His and to His nature's laws, the "enlightened ones" know that we are products of evolution, driven by chance, the environment, and the will to primacy. While the unenlightened are stuck with the antiquated notion that ordinary human minds can reach objective judgments about good and evil, better and worse through reason, the enlightened ones know that all such judgments are subjective and that ordinary people can no more be trusted with reason than they can with guns. Because ordinary people will pervert reason with ideology, religion, or interest, science is "science" only in the "right" hands. Consensus among the right people is the only standard of truth. Facts and logic matter only insofar as proper authority acknowledges them.
That is why the ruling class is united and adamant about nothing so much as its right to pronounce definitive, "scientific" judgment on whatever it chooses. When the government declares, and its associated press echoes that "scientists say" this or that, ordinary people -- or for that matter scientists who "don't say" or are not part of the ruling class -- lose any right to see the information that went into what "scientists say."
Thus when Virginia's attorney general subpoenaed the data by which Professor Michael Mann had concluded, while paid by the state of Virginia, that the earth's temperatures are rising "like a hockey stick" from millennial stability -- a conclusion on which billions of dollars' worth of decisions were made -- to investigate the possibility of fraud, the University of Virginia's faculty senate condemned any inquiry into "scientific endeavor that has satisfied peer review standards," claiming that demands for data "send a chilling message to scientists...and indeed scholars in any discipline." The Washington Post editorialized that the attorney general's demands for data amounted to "an assault on reason." The fact that the "hockey stick" conclusion stands discredited (and Mann and associates are on record manipulating peer review), the fact that science-by-secret-data is an oxymoron, and the very distinction between truth and error all matter far less to the ruling class than the distinction between itself and those they rule.
By identifying science and reason with themselves, our rulers de-legitimize opposition. Though they cannot prevent Americans from worshiping God, they can make it as socially disabling as smoking -- to be done furtively and with a bad social conscience. Though they cannot make Americans wish they were Europeans, they continue to press upon this nation of refugees from the rest of the world the notion that Americans ought to live by "world standards." Each day, the ruling class produces new "studies" that show that one or another of Americans' habits is in need of reform, and that those Americans most resistant to reform are pitiably, perhaps criminally, wrong. Thus does it go about dis-aggregating and dispiriting the ruled.
Meddling and Apologies
America's best and brightest believe themselves qualified and duty-bound to direct the lives not only of Americans but of foreigners as well.George W. Bush's 2005 inaugural statement that America cannot be free until the whole world is free and, hence, that America must push and prod mankind to freedom was but an extrapolation of the sentiments of America's Progressive class, first articulated by such as Princeton's Woodrow Wilson and Columbia's Nicholas Murray Butler.
But while the early Progressives expected the rest of the world to follow peacefully,today's ruling class makes decisions about war and peace at least as much forcibly to tinker with the innards of foreign bodies politic as to protect America. Indeed, they conflate the two purposes in the face of the American people's insistence to draw a bright line between war against our enemies and peace with non-enemies in whose affairs we do not interfere. That is why, from Wilson to Kissinger, the ruling class has complained that the American people oscillate between bellicosity and "isolationism."
Because our ruling class deems unsophisticated the American people's perennial preference for decisive military action or none,its default solution to international threats has been to commit blood and treasure to long-term, twilight efforts to reform the world's Vietnams, Somalias, Iraqs, and Afghanistans,believing that changing hearts and minds is the prerequisite of peace, and that it knows how to change them. The apparently endless series of wars in which our ruling class has embroiled America -- wars that have achieved nothing worthwhile at great cost in lives and treasure -- has contributed to defining it and to discrediting it, but not in its own eyes.
Rather, even as our ruling class has lectured, cajoled, and sometimes intruded violently to reform foreign countries in its own image, it has apologized to them for America not having matched that image -- their private image. Woodrow Wilson began this double game in 1919, when he assured Europe's peoples that America had mandated him to demand their agreement to Article X of the peace treaty (the League of Nations) and then swore to the American people that Article X was the Europeans' non-negotiable demand. The fact that the U.S. government had seized control of transatlantic cable communications helped hide (for a while) that the League scheme was merely the American Progressives' private dream.
In our time, this double game is quotidian on the evening news. Notably, President Obama apologized to Europe because "the United States has fallen short of meeting its responsibilities" to reduce carbon emissions by taxation.But the American people never assumed such responsibility, and oppose doing so. Hence President Obama was not apologizing for anything that he or anyone he respected had done, but rather blaming his fellow Americans for not doing what he thinks they should do while glossing over the fact that the Europeans had done the taxing but not the reducing. Wilson redux.
Similarly, Obama "apologized" to Europeans because some Americans -- not him and his friends -- had shown "arrogance and been dismissive" toward them, and to the world because President Truman had used the atom bomb to end World War II. So President Clinton apologized to Africans because some Americans held African slaves until 1865 and others were mean to Negroes thereafter -- not himself and his friends, of course. So assistant secretary of state Michael Posner apologized to Chinese diplomats for Arizona's law that directs police to check immigration status. Republicans engage in that sort of thing as well: former Soviet dictator Mikhail Gorbachev tells us that in 1987 then vice president George H. W. Bush distanced himself from his own administration by telling him, "Reagan is a conservative, an extreme conservative. All the dummies and blockheads are with him..." This is all about a class of Americans distinguishing itself from its inferiors. It recalls the Pharisee in the Temple: "Lord, I thank thee that I am not like other men..."
In sum, our ruling class does not like the rest of America. Most of all does it dislike that so many Americans think America is substantially different from the rest of the world and like it that way. For our ruling class, however, America is a work in progress, just like the rest the world, and they are the engineers.
The Country Class
Describing America's country class is problematic because it is so heterogeneous. It has no privileged podiums, and speaks with many voices, often inharmonious. It shares above all the desire to be rid of rulers it regards inept and haughty.It defines itself practically in terms of reflexive reaction against the rulers' defining ideas and proclivities -- e.g., ever higher taxes and expanding government, subsidizing political favorites, social engineering, approval of abortion, etc. Many want to restore a way of life largely superseded.
Demographically, the country class is the other side of the ruling class's coin: its most distinguishing characteristics are marriage, children, and religious practice. While the country class, like the ruling class, includes the professionally accomplished and the mediocre, geniuses and dolts,it is different because of its non-orientation to government and its members' yearning to rule themselves rather than be ruled by others.
Even when members of the country class happen to be government officials or officers of major corporations, their concerns are essentially private; in their view, government owes to its people equal treatment rather than action to correct what anyone perceives as imbalance or grievance. Hence they tend to oppose special treatment, whether for corporations or for social categories. Rather than gaming government regulations, they try to stay as far from them as possible. Thus the Supreme Court's 2005 decision in Kelo, which allows the private property of some to be taken by others with better connections to government, reminded the country class that government is not its friend.
Negative orientation to privilege distinguishes the corporate officer who tries to keep his company from joining the Business Council of large corporations who have close ties with government from the fellow in the next office. The first wants the company to grow by producing. The second wants it to grow by moving to the trough. It sets apart the schoolteacher who resents the union, to which he is forced to belong, for putting the union's interests above those of parents who want to choose their children's schools.
In general, the country class includes all those in stations high and low who are aghast at how relatively little honest work yields, by comparison with what just a little connection with the right bureaucracy can get you. It includes those who take the side of outsiders against insiders, of small institutions against large ones, of local government against the state or federal. The country class is convinced that big business, big government, and big finance are linked as never before and that ordinary people are more unequal than ever.
Members of the country class who want to rise in their profession through sheer competence try at once to avoid the ruling class's rituals while guarding against infringing its prejudices. Averse to wheedling, they tend to think that exams should play a major role in getting or advancing in jobs, that records of performance -- including academic ones -- should be matters of public record, and that professional disputes should be settled by open argument. For such people, the Supreme Court's 2009 decision in Ricci, upholding the right of firefighters to be promoted according to the results of a professional exam, revived the hope that competence may sometimes still trump political connections.
Nothing has set the country class apart, defined it, made it conscious of itself, and given it whatever coherence it has, so much as the ruling class's insistence that people other than themselves are intellectually and, hence, otherwise humanly inferior.Persons who were brought up to believe themselves as worthy as anyone, who manage their own lives to their own satisfaction, naturally resent politicians of both parties who say that the issues of modern life are too complex for any but themselves. Most are insulted by the ruling class's dismissal of opposition as mere "anger and frustration" -- an imputation of stupidity -- while others just scoff at the claim that the ruling class's bureaucratic language demonstrates superior intelligence. A few ask the fundamental question: Since when and by what right does intelligence trump human equality? Moreover, if the politicians are so smart, why have they made life worse?
The country class actually believes that America's ways are superior to the rest of the world's, and regards most of mankind as less free, less prosperous, and less virtuous. Thus while it delights in croissants and thinks Toyota's factory methods are worth imitating, it dislikes the idea of adhering to "world standards." This class also takes part in the U.S. armed forces body and soul: nearly all the enlisted, non-commissioned officers and officers under flag rank belong to this class in every measurable way.Few vote for the Democratic Party. You do not doubt that you are amidst the country class rather than with the ruling class when the American flag passes by or "God Bless America" is sung after seven innings of baseball, and most people show reverence. The same people wince at the National Football League's plaintive renditions of the "Star Spangled Banner."
Unlike the ruling class, the country class does not share a single intellectual orthodoxy, set of tastes, or ideal lifestyle. Its different sectors draw their notions of human equality from different sources: Christians and Jews believe it is God's law. Libertarians assert it from Hobbesian and Darwinist bases. Many consider equality the foundation of Americanism. Others just hate snobs.
Some parts of the country class now follow the stars and the music out of Nashville, Tennessee, and Branson, Missouri -- entertainment complexes larger than Hollywood's -- because since the 1970s most of Hollywood's products have appealed more to the ruling class and its underclass clients than to those of large percentages of Americans. The same goes for "popular music" and television. For some in the country class, Christian radio and TV are the lodestone of sociopolitical taste, while the very secular Fox News serves the same purpose for others. While symphonies and opera houses around the country, as well as the stations that broadcast them, are firmly in the ruling class's hands, a considerable part of the country class appreciates these things for their own sake. By that very token, the country class's characteristic cultural venture -- the homeschool movement -- stresses the classics across the board in science, literature, music and history even as the ruling class abandons them.
Congruent Agendas?
Each of the country class's diverse parts has its own agenda, which flows from the peculiar ways in which the ruling class impacts its concerns. Independent businesspeople are naturally more sensitive to the growth of privileged relations between government and their competitors. Persons who would like to lead their community rue the advantages that Democratic and Republican party establishments are accruing. Parents of young children and young women anxious about marriage worry that cultural directives from on high are dispelling their dreams. The faithful to God sense persecution.All resent higher taxes and loss of freedom.More and more realize that their own agenda's advancement requires concerting resistance to the ruling class across the board.
Not being at the table when government makes the rules about how you must run your business -- knowing that you will be required to pay more, work harder, and show deference for the privilege of making less money -- is the independent businessman's nightmare. But what to do about it?
In our time the interpenetration of government and business -- the network of subsidies, preferences, and regulations -- is so thick and deep, the people "at the table" receive and recycle into politics so much money, that independent businesspeople cannot hope to undo any given regulation or grant of privilege. Just as no manufacturer can hope to reduce the subsidies that raise his fuel costs, no set of doctors can shield themselves from the increased costs and bureaucracy resulting from government mandates.
Hence independent business's agenda has been to resist the expansion of government in general and, of course, to reduce taxes.
Pursuit of this agenda with arguments about economic efficiency and job creation -- and through support of the Republican Party -- usually results in enough relief to discourage more vigorous remonstrance.
Sometimes, however, the economic argument is framed in moral terms: "The sum of good government," said Thomas Jefferson, is not taking "from the mouth of labor the bread it has earned." For government to advantage some at others' expense, said he, "is to violate arbitrarily the first principle of association." In our time, more and more independent businesspeople have come to think of their economic problems in moral terms. But few realize how revolutionary that is.
As bureaucrats and teachers' unions dis-empowered neighborhood school boards; while the governments of towns, counties, and states were becoming conduits for federal mandates; as the ruling class reduced the number and importance of things that American communities could decide for themselves; America's thirst for self-governance reawakened.The fact that public employees are almost always paid more and have more generous benefits than the private sector people whose taxes support them only sharpened the sense among many in the country class that they now work for public employees rather than the other way around.
But how to reverse the roles? How can voters regain control of government?Restoring localities' traditional powers over schools, including standards, curriculum and prayer, would take repudiating two generations of Supreme Court rulings.So would the restoration of traditional "police" powers over behavior in public places. Bringing public employee unions to heel is only incidentally a matter of cutting pay and benefits. As self-governance is crimped primarily by the powers of government personified in its employees, restoring it involves primarily deciding that any number of functions now performed -- and the professional specialties who perform them, e.g., social workers -- are superfluous, or worse.Explaining to one's self and neighbors why such functions and personnel do more harm than good, while the ruling class brings its powers to bear to discredit you, is a very revolutionary thing to do.
America's pro-family movement is a reaction to the ruling class's challenges: emptying marriage of legal sanction, promoting abortion, and progressively excluding parents from their children's education. Americans reacted to these challenges primarily by sorting themselves out. Close friendships and above all marriages became rarer between persons who think well of divorce, abortion, and government authority over children and those who do not.
The homeschool movement, for which the Internet became the great facilitator, involves not only each family educating its own children, but also extensive and growing social, intellectual and spiritual contact among like-minded persons.
In short, the part of the country class that is most concerned with family matters has taken on something of a biological identity.
Few in this part of the country class have any illusion, however, that simply retreating into private associations will long save their families from societal influences made to order to discredit their ways. But stopping the ruling class's intrusions would require discrediting its entire conception of man, of right and wrong, as well as of the role of courts in popular government. That revolutionary task would involve far more than legislation.
The ruling class's manifold efforts to discredit and drive worship of God out of public life -- not even the Soviet Union arrested students for wearing crosses or praying or reading the Bible on school property, as some U.S. localities have done in response to Supreme Court rulings -- convinced many among the vast majority of Americans who believe and pray that today's regime is hostile to the most important things of all.Every December, they are reminded that the ruling class deems the very word "Christmas" to be offensive. Every time they try to manifest their religious identity in public affairs, they are deluged by accusations of being "American Taliban" trying to set up a "theocracy."
Let members of the country class object to anything the ruling class says or does, and likely as not their objection will be characterized as "religious;" that is to say, irrational; that is to say, not to be considered on a par with the "science" of which the ruling class is the sole legitimate interpreter. Because aggressive, intolerant secularism is the moral and intellectual basis of the ruling class's claim to rule, resistance to that rule, whether to the immorality of economic subsidies and privileges, or to the violation of the principle of equal treatment under equal law, or to its seizure of children's education, must deal with secularism's intellectual and moral core. This lies beyond the boundaries of politics as the term is commonly understood.
The Classes Clash
The ruling class's appetite for deference, power and perks grows. The country class disrespects its rulers, wants to curtail their power and reduce their perks. The ruling class wears on its sleeve the view that the rest of Americans are racist, greedy, and above all stupid. The country class is ever more convinced that our rulers are corrupt, malevolent, and inept. The rulers want the ruled to shut up and obey. The ruled want self-governance. The clash between the two is about which side's vision of itself and of the other is right and which is wrong. Because each side -- especially the ruling class -- embodies its views on the issues, concessions by one side to another on any issue tend to discredit that side's view of itself. One side or the other will prevail. The clash is as sure and momentous as its outcome is unpredictable.
In this clash, the ruling class holds most of the cards because it has established itself as the fount of authority; its primacy is based on habits of deference.Breaking them, establishing other founts of authority, other ways of doing things, would involve far more than electoral politics. Though the country class had long argued along with Edmund Burke against making revolutionary changes, it faces the uncomfortable question common to all who have had revolutionary changes imposed on them: are we now to accept what was done to us just because it was done?Sweeping away a half century's accretions of bad habits -- taking care to preserve the good among them -- is hard enough. Establishing, even reestablishing, a set of better institutions and habits is much harder, especially as the country class wholly lacks organization. By contrast, the ruling class holds strong defensive positions and is well represented by the Democratic Party. But a two to one numerical disadvantage augurs defeat, while victory would leave it in control of a people whose confidence it cannot regain.
Certainly the country class lacks its own political vehicle -- and perhaps the coherence to establish one.In the short term, at least, the country class has no alternative but to channel its political efforts through the Republican Party, which is eager for its support. But the Republican Party does not live to represent the country class. For it to do so, it would have to become principles-based, as it has not been since the mid-1860s. The few who tried to make it so the party treated as rebels: Barry Goldwater and Ronald Reagan. The party helped defeat Goldwater. When it failed to stop Reagan, it saddled his and subsequent Republican administrations with establishmentarians who, under the Bush family, repudiated Reagan's principles as much as they could.
Barack Obama exaggerated in charging that Republicans had driven the country "into the ditch" all alone. But they had a hand in it. Few Republican voters, never mind the larger country class, have confidence that the party is on their side. Because, in the long run, the country class will not support a party as conflicted as today's Republicans, those Republican politicians who really want to represent it will either reform the party in an unmistakable manner or start a new one, as Whigs like Abraham Lincoln started the Republican Party in the 1850s.
The name of the party that will represent America's country class is far less important than what, precisely, it represents and how it goes about representing it because, for the foreseeable future, American politics will consist of confrontation between what we might call the Country Party and the Ruling Class. The Democratic Party having transformed itself into a unit with near-European discipline, challenging it would seem to require empowering a rival party at least as disciplined. What other antidote is there to government by one party but government by another party? Yet this logic, though all too familiar to most of the world, has always been foreign to America and naturally leads further in the direction toward which the ruling class has led. Any country party would have to be wise and skillful indeed not to become the Democrats' mirror image.
Yet to defend the country class, to break down the ruling class's presumptions, it has no choice but to imitate the Democrats, at least in some ways and for a while. Consider: The ruling class denies its opponents' legitimacy. Seldom does a Democratic official or member of the ruling class speak on public affairs without reiterating the litany of his class's claim to authority, contrasting it with opponents who are either uninformed, stupid, racist, shills for business, violent, fundamentalist, or all of the above. They do this in the hope that opponents, hearing no other characterizations of themselves and no authoritative voice discrediting the ruling class, will be dispirited.
For the country class seriously to contend for self-governance, the political party that represents it will have to discredit not just such patent frauds as ethanol mandates, the pretense that taxes can control "climate change," and the outrage of banning God from public life. More important, such a serious party would have to attack the ruling class's fundamental claims to its superior intellect and morality in ways that dispirit the target and hearten one's own. Opponents who want electoral success are obliged to follow the rules of modern politics set by the Democrats.
Suppose that the Country Party (whatever its name might be) were to capture Congress, the presidency, and most statehouses. What then would it do? Especially if its majority were slim, it would be tempted to follow the Democrats' plan of 2009-2010, namely to write its wish list of reforms into law regardless of the Constitution and enact them by partisan majorities supported by interest groups that gain from them, while continuing to vilify the other side. Whatever effect this might have, it surely would not be to make America safe for self-governance because by carrying out its own "revolution from above" to reverse the ruling class's previous "revolution from above," it would have made that ruinous practice standard in America. Moreover, a revolution designed at party headquarters would be antithetical to the country class's diversity as well as to the American Founders' legacy.
Achieving the country class's inherently revolutionary objectives in a manner consistent with the Constitution, and with its own diversity, would require the Country Party to use legislation primarily as a tool to remove obstacles, to instruct, and to reintroduce into American life ways and habits that had been cast aside. Passing national legislation is easier than getting people to take up the responsibilities of citizens, fathers and entrepreneurs.
Reducing the taxes that most Americans resent requires eliminating the network of subsidies to millions of other Americans that these taxes finance, and eliminating the jobs of government employees who administer them. Eliminating that network is practical, if at all, if done simultaneously, both because subsidies are morally wrong and economically counterproductive, and because the country cannot afford the practice in general. The electorate is likely to cut off millions of government clients, high and low, only if its choice is between no economic privilege for anyone and ratifying government's role as the arbiter of all our fortunes. The same goes for government grants to -- and contracts with -- so-called nonprofit institutions or non-governmental organizations.
The case against all arrangements by which the government favors some groups of citizens is easier to make than that against any such arrangement. Without too much fuss, a few obviously burdensome bureaucracies, like the Department of Education, can be eliminated, while money can be cut off to partisan enterprises such as the National Endowments and public broadcasting. That sort of thing is as necessary to the American body politic as a weight reduction program is essential to restoring the health of any human body degraded by obesity and lack of exercise. Yet shedding fat is the easy part. Restoring atrophied muscles is harder. Reenabling the body to do elementary tasks takes yet more concentration.
The grandparents of today's Americans (132 million in 1940) had opportunities to serve on 117,000 school boards. To exercise responsibilities comparable to their grandparents', today's 310 million Americans radically would have to decentralize the mere 15,000 districts into which public school children are now concentrated. They would have to take responsibility for curriculum and administration away from credentialed experts, and they would have to explain why they know better. This would involve a level of political articulation of the body politic far beyond voting in elections every two years.
If self-governance means anything, it means that those who exercise government power must depend on elections. The shorter the electoral leash, the likelier an official will have his chain yanked by voters, and the more truly republican the government is. Yet to subject the modern administrative state's agencies to electoral control would require ordinary citizens to take an interest in any number of technical matters. Law can require environmental regulators or insurance commissioners, or judges or auditors to be elected. But only citizens' discernment and vigilance could make these officials good. Only citizens' understanding of and commitment to law can possibly reverse the patent disregard for the Constitution and statutes that has permeated American life. Unfortunately, it is easier for anyone who dislikes a court's or an official's unlawful act to counter it with another unlawful one than to draw all parties back to the foundation of truth.
How, for example, to remind America of, and to drive home to the ruling class, Lincoln's lesson that trifling with the Constitution for the most heartfelt of motives destroys its protections for all? What if a country class majority in both houses of Congress were to co-sponsor a "Bill of Attainder to deprive Nancy Pelosi, Barack Obama, and other persons of liberty and property without further process of law for having violated the following ex post facto law..." and larded this constitutional monstrosity with an Article III Section 2 exemption from federal court review? When the affected members of the ruling class asked where Congress gets the authority to pass a bill, every word of which is contrary to the Constitution, they would be confronted, publicly, with House Speaker Nancy Pelosi's answer to a question on the Congress's constitutional authority to mandate individuals to purchase certain kinds of insurance: "Are you kidding? Are you kidding?"The point having been made, the Country Party could lead public discussions around the country on why even the noblest purposes (maybe even Title II of the Civil Rights Bill of 1964?) cannot be allowed to trump the Constitution.
How the country class and ruling class might clash on each item of their contrasting agendas is beyond my scope. Suffice it to say that the ruling class's greatest difficulty -- aside from being outnumbered -- will be to argue, against the grain of reality, that the revolution it continues to press upon America is sustainable.For its part, the country class's greatest difficulty will be to enable a revolution to take place without imposing it. America has been imposed on enough.
Editor's Note: This version corrects an error that appears the print edition of this article, which incorrectly lists Barack Obama as a research assistant to Laurence Tribe in 1984. He in fact was an assistant to Tribe in 1988-89.
Angelo M. Codevilla is professor emeritus of international relations at Boston University.
