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Monday, Mar 30, 2015

The American economic model of success: limited government

More Than Words


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This piece is more of a reminder of the recent past in American history than a contemporary political position paper. The concept of limited, frugal government was accepted by both conservative Democrats and Republicans in the last century.

Both parties had conservative, moderate and liberal wings; the fiscally conservative Democrat being similar to the liberal Republican. In the 1940s the conservative coalition was across party lines - both Democrats and Republicans. On the Democratic side it morphed years later into the Blue Dog coalition. I was one.

The size of government hadn't exploded back then. It was more or less assumed by the fiscally conservative that frugality was more likely accomplished with a limited government. It logically follows that multiplying the number of bureaucrats by the thousands would increase programs, regulations and spending, as well as the cost of government itself .

It was pretty much understood that the private sector had to be vibrant for job creation; that if the government grabbed too much potential investment capital, they would suck all the oxygen out of the economy.

If today's low-knowledge Democrats could think their way through the economic effects of the Great Recession on them personally, they would realize two stark realities:

Limited government is becoming an imperative at state and local levels. Tax revenues simply aren't there. Employment has fallen by an astonishing 489,000 public union workers. Bankrupt Detroit is but one example of the unraveling of Democratic big city politics nationwide.

Polls indicate that job creation is the number-one issue for both Democrat and Republican workers. Now that public sector employment has atrophied, this means looking to the non-union private sector, which has the capital and the entrepreneurs - those who don't "pay their fair share" according to Democrats. Even the Chinese - who will surpass us as the number-one economy - figured out what every economist has known since the modern era: the way to grow an economy and jobs is to encourage wealth creation and capital formation - both anathemas to Democrats.

From a historical perspective, progressive liberal statism - a big government-centered and regulated economy - is relatively new, beginning with FDR. Modest government, with a people-centered economy, is considered quaint.

Rather than looking to our reviled Founders ("old, dead white men") for guidance, let's revisit the thoughts of Calvin Coolidge, a successful 20th century American president - a man who is but a footnote in high school history classes.

Even though he is forgotten in history, Coolidge was the first president on film recorded with sound (1924), and the first president to broadcast to the nation over radio -- his state of the union message (1923).

Take a look at and listen to his 1924 talking film: "Taxes take from everyone and force everyone to work for government ... One of the greatest favors that can be bestowed upon the American people is economy of government." What he says is profoundly correct, but today's media would have a field day lampooning his speaking skills.

His 1923 State of the Union message was applauded by none other than The New York Times. Reflecting the work ethic of those times, in an interesting turn of words, Coolidge expressed hope that the "benefits" of our "enormous wealth" would "reach the merit of every individual." (A strange descriptor for the merit system.) "This is not a suggestion that government should or could assume for the people the inevitable burdens of existence. There is no method by which we can be relieved of the results of our own folly or be guaranteed a successful life."

In noting that the main problems of the country were domestic in 1923, and bearing in mind that in 2013 the Senate will still not pass a budget - nor will the president prod them to do so - Coolidge observed that "without a budget system there can be no fixed responsibility and no constructive scientific economy." (Politics being the order of the day in 2013, this allows the Democrats to keep blaming the Republicans for the fiscal crisis.)

Coolidge's advice then, would certainly be timely today: "Financial stability is the first requisite of sound government. We cannot escape the effect of world conditions. We can avoid the inevitable results of the economic disorders which have reached all nations ... by bringing our expenses within our means."

Clearly a proponent of a frugal and limited government, Coolidge couldn't be elected dogcatcher in any failed union big city today. Yet his was the era known as the "Coolidge prosperity." He was one of four presidents who declined re-election because he would have been in office for ten years - longer than any man up until that time.

It is hard to believe - as our country moves inexorably left toward a government-centered existence - that during his presidency, the combined budgets of both state and local governments exceeded the federal budget!

In what should be in every public school commencement speech today, Coolidge, in his State of the Union message reminds us, "There is an inescapable personal responsibility for the development of character, of industry ... of self-control. These do not come from the government, but from the people themselves. This is the American policy."

Dream on. No longer. This is now the age of Obama - redistribution of federal revenues for economic fairness.

John Reiniers is a retired attorney and regular columnist who lives is Spring Hill.

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