James Madison to America: This Is What We Warned You About
By Jerry Bowyer Wednesday, April 16, 2008, TownHall.com
As a Pennsylvania voter, I’m particularly fascinated by the identity politics that I see playing out every day before my eyes. It’s kind of ironic, since this is the state in which the founders met in to write a constitution which they intended to protect their posterity from the destructive effects of political factions. They warned us about the destructive power of political fanaticism. Not only has the modern Democratic Party failed to heed those warnings, but it has spent the last 40 years writing factionalism into its internal party rules. Identity politics may have worked for Democrats, from time to time, in the past. But now that the two leading candidates hail from different officially recognized racial, age and gender groups, the party is over. To quote Mr. Obama’s pastor ‘the chickens have come home to roost’.
US Democratic presidential candidate Sen. Barack Obama (D-IL) speaks during a Town Hall meeting at the Great Valley High School in Malvern, Pennsylvania April 9, 2008. REUTERS/Tim Shaffer (UNITED STATES) US PRESIDENTIAL ELECTION CAMPAIGN 2008 (USA)
James Madison wrote a pro-constitution editorial (known to history as Federalist 10), that described in prescient terms precisely why political factions are dangerous. When there is liberty, he argued, some men will create more wealth than others. Property and class factions are the result. Members of these different economic classes are tempted to pass laws which help themselves at the expense of the overall public good. Over time this excessive self-regard distorts the gift of reason and causes people to think and speak in ways that seem strange to the country at large.
Ambitious men with rhetorical skill exploit these factions, rising through them to positions of power. In fact, these ambitious men need factions in order to gain what they want. Groups of politically alienated voters are ideally suited to a demagogue’s desire for power and prestige. The narcissists and the fanatics feed one another.
Over time factions tend to move farther and farther away from reality as the reason-destroying power of fanaticism intensifies. Washington, following Madison’s lead, warned us in his Farewell Address that the power of party (his word for faction) tends to create convulsion and ‘false alarms’; that is social unrest and bizarre warnings about phantom dangers.
According to Madison, eventually factions can gain so much power that they are able to promote laws which destroy the liberty of other citizens. For instance (and these examples are his, not mine) they may erasing debt obligations, or impose trade restrictions in order to protect certain interest groups from foreign competition, or perhaps impose special taxes on the numerically small propertied classes . Both Madison and Washington also warned future generations about the role of foreign powers in this process. Faction leaders often identify less with America than they do with their country of origin. For all of these reason, factions should be discouraged, and their effects minimized, said the men who met in Philadelphia.
As I write this, I’m less and less clear whether I’m writing about Philadelphia in 1788 (when the constitution was implemented) or Philadelphia in 2008 (as I see it shredded). You probably are too. Last month, Barack Obama initiated his Pennsylvania campaign by giving a speech in Philadelphia on race in America. Ironically enough, that speech was delivered at the National Constitution Center, across the street from the place where Madison and Washington and the rest issued the Constitution of the United States, a documented explicitly designed to rectify the factionalism to which America has been so vulnerable. My National Review colleague Byron York was there and spent time talking with member of the audience. Over and over again, he found, not people who were satisfied that Barack had sufficiently distanced himself from Rev. Jeremiah Wright, but people who agreed with Wright in the first place. The comments of Obama supporter, Gregory Davis seem pretty typical, “I wasn’t offended by anything the pastor said. A lot of things he said were absolutely correct…. The way he said it may not have been the most appropriate way to say it, but as far as a typical black inner-city church, that’s how it’s said.” There in a nutshell is the problem of faction, one group speaking about the nation as a whole in levels of hostility which are simply incomprehensible to the general public.
It’s not just race and gender, it’s also age. My mother, who has come out of retirement to help the Northampton County Department of Elections deal with the overflow of new voter registrants told me that the cards she sees are overwhelmingly registering as Democrats and they are overwhelmingly coming from college students. Do you have any doubts about who those students intend to vote for?
The factionalism of interest group also spills out into what the founders called ‘sectionalism’, that is factions which correspond with geographical divisions. The sections now are less a matter of upper and lower then they are a matter of toward or away from. City,/suburb/exurb has replaced Southern state/border state/northern state as the sectionalism of the 21st century. Philadelphia belongs to Barrack; the southeast suburbs are battleground counties, and Pittsburgh’s industrial west belongs to Hillary.
In other words, Pa Democrats like their brethren around the country, are tearing their party apart along race, age, gender and geographical grounds.
Who can blame them? Democratic voters are just doing what they’ve been trained to do – they’re thinking of themselves as members of factions. Over and over the Democratic Party has rewritten its internal rules to assuage the anger of unsuccessful political factions. This pattern started after the rioting at the 1968 convention with the McGovern-Fraser commission. Delegate quotas were established based on age, race and gender. Party caucuses were structured in ways that favored organized activist groups.
The rhetoric followed the rules. Jesse Jackson articulated the new arrangement perfectly in the Democratic convention of 1988 when he likened his party to a quilt made from individual patches of cloth, stitched together by his grandmother. On their own, they could not expect to rule, ‘your patch is too small…’ he told them each in turn. But sewn together women, blacks, latinos, and unions could take the nation.
Al Gore articulated it inadvertently when he bungled the motto from the Great Seal: E Pluribus Unum, which he translated as “from one, many”. It is, in fact, the opposite “from many, one”. His Latin was pretty weak, but his ability to translate the mood of his party was spot on.
What, if not factionalism, lies at the heart of Hillary’s ‘its tough for a woman out there’? What, if not factionalism, lies at the heart of Obama’s church with it’s the-government-intentionally-created-Aids-to-kill-black-people paranoia and its Afro-centricity?
Step by step, the warnings of Federalist 10 have been trodden underfoot, until finally age, race and gender have moved from the edges of the party to its very center. Delegate quotas, activists-dominated caucuses, the replacement of winner-take-all with proportional delegate systems…even proposed fixes such as super delegates and front-loaded primaries, are all fruit which comes from the same poisoned tree – the rejection of the founder’s vision of a nation protected from factionalism.
G.K. Chesterton once said that if you find a boundary stone in the middle of a field, and you don’t know why it’s there - don’t move it. For the past four decades the party of Jefferson has been moving the ancient boundary stones. This year’s Democratic primary chaos stands as a monument both to the arrogance of the generation of 1968 and the wisdom of the generation of 1788.
The government compels banks to make loans in poor neighborhoods even if the applicants are not considered prime borrowers. You may not know about that because the Community Reinvestment Act is not exactly a household (excuse the pun) name.
But the commercial banks do know about it. They have a CRA department. They get a CRA rating. They know that the way to get a high CRA rating is to make loans to poor applicants or in poor urban neighborhoods regardless of the financial prudence of the loans.
They know that if they don’t do this, they will be punished severely by the regulators when they try to make any major change which is dependent on regulatory approval. And they know that pretty much every major change a traditional bank makes is, in fact, subject to regulatory approval. So, they grit their teeth and stamp a big inky “yes” on an application which they know, according to traditional financial standards, deserves a “no.”
Up until 1995 the Community Reinvestment Act was largely a requirement to support “community groups” in poor neighborhoods. Of course, this often meant left wing groups like ACORN, etc. But after 1995 the scope of the law was dramatically increased.
Over the strenuous objections of the banks themselves and some Republicans in Congress, CRA was renewed and modified in such a way that it gave far more power to the federal government to punish banks for not lending more widely in poor neighborhoods.
The classic “fair housing” laws from the Martin Luther King Jr. era of civil rights were deemed insufficient. Under CRA, not only were realtors required to sell to qualified buyers regardless of race, which they should have been, but banks were accused of a new kind of “financial redlining” if they didn’t provide the funds. Income, credit history, assets, debts were out. Urban neighborhoods were in. The Home Mortgage Disclosure Act pushed things along too by requiring banks to ask about and disclose the race of its mortgage applicants. In effect, banks were forced to provide the evidence of their own alleged discrimination.
Subprime loans to minority applicants exploded ten fold in the mid-1990s as a result. In fact the Clinton administration found a rapid increase in subprime loans in minority neighborhoods. Their principle worry was that, even then, not enough lending was going on in these communities. More was needed. And they got what they asked for.
Under New Deal-era regulatory rules of Glass-Steagall, commercial banks and investment banks were separated. When that act was repealed as part of banking deregulation in 1999, commercial banks and investment banks were able to merge, subject to approval by regulators.
However, the banks’ CRA rating was taken into account in the decision. This meant that a high CRA rating became an important prerequisite for mergers, which increased the pressure on the banks to make these risky loans. The banks also were given permission to put these loans into packages of securities that could then be sold into investment markets.
Last week, a front page Wall Street Journal article set off a national debate about the legacy of Alan Greenspan. Critics have been taking the former chief of the Federal Reserve to task for failing to see the alleged excesses of the marketplace and neglecting to issue new diktats to punish those excesses accordingly.
But it is not Mr. Greenspan’s fault that Congress substituted identity politics for financial prudence, although his easy money in 2003 didn’t help much. If anything, Mr. Greenspan regulated too much.
The fault lies with the small army of hard left political hustlers who spent the early 1990s pushing risky mortgages on home lenders. And the fault lies especially with the legislators that gave them the power to do it.
Mr. Bowyer, a contributor of CNBC, is the chief economist for Benchmark Financial Network.
…seems like the perfect man to focus on today, especially as the Obama/Wright fiasco continues to play itself out. Malcom X and Martin Luther King laid out two separate paths for America – a path of death and a path of life. Malcom represented faction, identity politics, racialism and violence. Martin represented The Sermon on the Mount, reconciliation, universalism and peace. James Cone, the founder of the school of Black Liberation Theology attempted a synthesis of the two. Questioning whether Martin’s background really represented the black experience in America, he concluded that King was himself a child of privilege and did not understand the anger of Malcom, who more perfectly represented the life experience of most blacks. Still, Cone noted, King’s rhetoric was very appealing to white America, and his political strategies seem to have been somewhat successful.
In the end, Cone laid out a strategy for black leaders to think like Malcom and talk like Martin. Keep the racialist emphasis of the black power movement, but without the violent rhetoric. Even Malcom towards the end of his life, notes Cone, ‘started to talk about hope’.
Cone’s disciple, Rev. Jeremiah Wright continued to the tradition: a merger of Marxist class analysis, but with race substituted for class, black nationalism and Kingesque rhetoric. This is the spiritual family in which Barack and Michelle were steeped. This is what they converted into as adults. This is what they, even now, refuse to leave.
The future belongs to King. He built on rock, not sand. No ideology which demonizes an entire variety of other human beings can long endure. It will either liquidate its enemies and live for the rest of history in infamy, or it will fail to do it and live out its span in conflict. It will, never, however triumph. In the end, Lincoln was right, the only real way to reliably destroy an enemy is to turn him into a friend.
To hear what may well be the greatest English language speech of the 20th century (and yes, I know the competition is tough, Reagan, JFK, Churchill, etc.), click on the link below:
Last Saturday, I was a guest on Larry Kudlow’s WABC radio program. Larry’s a good friend and we have been talking quite a bit lately on his TV and radio shows about the ways in which Federal regulations have created the sub-prime mortgage crisis. This is far and away the most underreported aspect of the mortgage story, and aside from Larry’s shows and a few conservative media outlets, such as Townhall, it has been completely missing from the discussion.
That’s a shame, because there simply was no such thing as a developed Subprime mortgage industry until the US congress created it by ordering banks to issue loans to people who were not credit worthy. Community activist groups (such as the Public Interest Research Group and Acorn) and civil rights law firms (such as Miner, Barnhill & Galland) had make their living by accusing banks of racism when the banks hesitated to approve loan requests from minority citizens with poor credit scores. Fair Housing laws, championed by American Heros like Martin Luther King, Jr., had long-ago outlawed the practice of ‘redlining’, which is refusing to sell or rent to blacks in certain neighborhoods. But a new generation of activists modified the concept of redlining, applying it not just to race-based home sale covenants, but to any refusal to lend to a minority member, even for sensible financial reasons.
The Community Reinvestment Act was created as a result. Initially the act was used, not to get banks to lend to minority households, but to get them to cut checks to ‘community groups’. Left of center activist agencies, which had pushed for the act in the first place, used it as a shakedown tool. So long as the banks kept paying off to the activists, the activists would hold off on sending complaints to the bank regulators’ CRA files.
Eventually, under Clinton, the CRA was renewed and, not surprisingly, made more punitive. Banks were required to make Subprime mortgage loans now too, or else suffer a low CRA rating and be punished accordingly. The Fed played it’s part. The Home Mortgage Disclosure rules created an unfunded mandate for banks to track and publicly disclose the race and gender of it’s mortgage clients. Now the shakedown artists had an easy source of complaints and a club with which to beat the banks into submission. The bankers complied and the Subprime mortgagage market was born.
But the bad paper remained principally on the balance sheets of the originating banks for a couple of years. The banks and their shareholders were directly hurt, but not the general public, at least in the beginning, that is until the bank regulators once again intervened and encouraged banks to push the paper out to unsuspecting investors.
First the Fed issued guidance which warned the banks that their capital requirements would be severely raised in response to the Subprime mortgages. In other words, banks were told that to the extent that they issued mortgages to high risk borrowers, to that extent they would not be allowed to put as much of their money into income-producing activities. The banks had already been told by the Fed that they would have to set aside more money for mortgages in general, and now they were being hit again for the Subprime variety.
Second, the Fed issued guidance on how to mix Subprime mortgage paper in with good paper and sell the resulting composite security to the general market. This is how the ‘toxic waste’ of bad debt was pumped out into the world. This is why credit markets are now having trouble clearing. This is why banks are taking massive write-downs of the loans which still exist on their books. This is why foreign investors don’t want to buy US mortgages, or bank stocks, and consequently don’t want to buy the dollars in which they are denominated either. If you add to this a Security and Exchange Commission ruling which compels banks to ‘mark to market’, which means they are forced to show large losses in times of market panic, you give a legal mandate for short-term thinking. You create a more serious crisis for the system and a fatal blow to the weaker banks.
This crisis has the fingerprints of congress and its bureaucratic enforcers all over it. It also has the fingerprints of a generation of activists and ‘fair housing’ lawyers as well, such as Barry (now known as Barack) Obama. That part of the story is yet to be told.
on error resume next if (plugin <= 0) then plugin = (IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.6")))
Renaissance era Vienna was a moral cesspool. Brothels were everywhere, marriage was disappearing and the resultant army of unfathered children created a crime wave. The Duke of Vienna decided to go on a 'listening tour' of the city. He donned a monk's habit and wandered the streets incognito with his face covered and his eyes and ears open. He needed to leave the government in strong hands and he chose Angelo, a strict and puritanical conservative to rule in his stead. Angelo looked upon the moral chaos of the city and decided to reinstitute an ancient tradition - hanging for fornicators.
It wasn't long before a case came before him, a young man was living with his fiancé. He couldn't afford to marry her outright, so she agreed to live with him on the understanding that they would eventually be married. There was no dispute, it was clear that the two of them were having sex. Angelo pronounced the sentence and the young man was sent to the dungeon to await his execution. His sister, a beautiful woman in training to be a nun, went to Angelo to plead for her brother's life. The instant she entered the room, Angelo fell in love with her. He demanded that she submit to his sexual advances. When she refused, he told her that this was the only way her brother could be spared. The family values candidate for ruler of Vienna demanded a sexual bribe in exchange for a pardon.
This story is told to us by William Shakespeare and the Bard being the Bard, the plot takes several turns, each one showing new depths of lust and deceit for Angelo. In the end, the true ruler reappears, reveals all, acquits the innocent, punishes (more mildly than they deserve) the guilty and sets it all to rights. The play is almost, well theological, and why not? It's title Measure for Measure is taken from Jesus' Sermon on the Mount.
"For in the same way you judge others, you will be judged, and with the measure you use, it will be measured to you.
The point is simple: you will be judged by the standards you apply to others. This verse is as frequently misunderstood by liberal as by conservative commentators. For the liberals, it forbids moral distinctions. Jesus, they say, is outlawing the making of moral evaluation. Of course, this is impossible. If judgments are forbidden than this prohibition includes the judgment that we shouldn't make prohibitions. Judgmental people are therefore 'bad', non-judgmental people are good.
The conservative answer view states that Jesus makes moral judgments all the time and that we should too. After all, without moral standards, chaos would ensue. They tend to ignore the actual language of 'judge not' and take the passage as meaning either nothing or meaning that only people who live up to their standards are allowed to judge and if you want to go around condemining people, that's fine, just so long as you get pure enough yourself that you're not covered by this warning.
Both seem to miss the point. The context is political. Although we call it the "Sermon" on the mount, it's much more speech than sermon. This remarkable document is Jesus of Nazareth's State of the Union Address. The state of the union, he finds, is not strong. The political elites are greedy collaborators and the grassroots pressure groups secretly undermine what they loudly proclaim. They cast out tax collectors for collaborating with Rome, but they carry Roman coins. They talk about the commandment to honor your father and mother, but make ostentatious gifts of their support. They sleep with women, but then try them (but not the men) for adultery.
Jesus is not ordering infinite tolerance, nor laying down the bars that must be passed before the privilege of intolerance is granted. He is describing the way the world works. Rulers of activists will be evaluated by the standards which they use to evaluate others. When someone uses the Torah to get power, eventually his conduct will be evaluated by that same Torah. If one uses the holiness of the temple as an excuse to shake people down for contributions, exchange fees, etc. eventually people will begin to wonder whether he is in his own conduct guarding the holiness of the temple.
Shakespeare got what so many commentators missed: Jesus as pundit, wisely (and it turns out accurately) predicting the implosion of the two great political parties of His day. The same holds true for us. The Democrats can't fly around the world in gas guzzling charter jets to give pious sermons about exceeding our carbon footprints. Republicans can't go on and on about Idaho family values and then cruise men's rooms for anonymous hook-ups. It's not just a matter of 'hypocrisy'. Hypocrisy is inevitable, any standard worth having is a standard that we will sometimes miss. It's more a matter of reality. You can't build a political coalition of lasting viability on leaders who trash by their actions the standards the profess with their mouths. The Prophet and the playwright tells us that it just won't work.
