As I write, it appears Congress will give us an economic “stimulus” plan whether we need one or not, just as Federal Reserve Chairman Greenspan has offered his judgment that the recession is over and expansion is well underway. Last week, President Bush significantly delayed the necessary continuing transformation of the steel industry by imposing sweeping tariff protection from steel imports for three years. Now pending resolution in House-Senate conference is a farm bill that would reverse the free market agriculture reforms begun in the mid-1980’s and, in effect, repeal the Freedom to Farm Act of 1996. What do these bailouts have in common? Along with the Federal payments to the victims of 9-11, they perpetuate our entitlement mentality, feed the cancer of cynicism, and send the wrong message about the role of government in a free society. I am reminded of a statement made years ago by former Michigan Governor George Romney: “We no longer have a republic. We have a special interest pork barrel democracy and we haven’t adjusted our institutions to that fact.”
Meanwhile, as we bail out anyone with a distant claim to victimhood, we’re still discussing the “cost” of reductions in marginal tax rates and tax cuts for the “wealthiest 1%”. As to the latter point, the top 1% of taxpayers, ranked by adjusted gross income, paid 36.2% of total taxes in 1999, the top 10% paid 66.5%, and the top 50% paid 96%! Is this progressive enough? It’s enough to make one wonder along with former Congressman Bill Archer why the lower 50% will ever again vote for tax rate reduction except for the fact that they understand how jobs and prosperity are created. And the “stimulus” plan now being executed does nothing for long-term growth. In fact, a case can be made that it is counter-productive. But, of course, what matters more than anything is the Romantic notion that good intentions are more important than good deeds and that intensity of feeling and “concern” justify the resulting policy.
Prior to the War on Terrorism, immigration policy was a front-burner item for the Bush administration, having been given heightened visibility by the President’s early September 2001 meeting with Mexican President Vicente Fox and the floating of various amnesty and guest worker plans. Understandably, the events since 9-11 tabled these proposals temporarily, but concurrently gave immigration policy new impetus and new perspective. Then came Pat Buchanan’s popular book, The Death of the West, around which the issues of assimilation, nativism, and cultural decline received much visibility. Whether or not one buys Buchanan’s complete argument, and I don’t, it is difficult to disagree that our current immigration policy is flawed and that we are trending toward a double standard of citizenship. Serious attention is warranted to the points he raises.
Clearly, President Bush’s vision is based on a determination to recognize U. S.-Mexico interdependence by placing the American relationship with Mexico on a par with the Atlantic Alliance with Great Britain. The centerpiece of this interdependence and this vision is, of course, free trade leading to hemispheric economic prosperity, but it has huge consequences for our culture, not to mention domestic politics. The cultural implications should be of great concern. Buchanan’s thesis that current immigration policy leads to the death of American culture will be true only if it is assumed that assimilation is not possible.
Michelle Malkin has correctly noted that our founding fathers didn’t envision the naturalization process as a means to boost the labor supply or voting rolls. The ultimate end, she writes, the purpose of granting citizenship is to help create one people who share a common allegiance. I would add that this allegiance ultimately is to more than an abstract universal idea, although it may begin there.
In the first half of the 20th century, the primary job of assimilation into the American social fabric was assumed by our public schools. This began with our language and proceeded to our history, our heroes, and the founding ideas that are essential to the sustenance of allegiance to a common sense of the good. Unfortunately, over the past several decades, our schools have lost this sense of the common culture and have taken on a multicultural approach, as though instruction can be adjusted to the ethnic composition of the neighborhood. This is part of the popular notion of “celebrating diversity”, but in fact, is cheating our children and undermining the distinctive American culture.
The War on Terrorism has added a dimension to the immigration issue that transcends Bush’s North-South vision. We should now have in high relief the necessity for clarity in our convictions and the importance of our founding ideals, not only to the sustenance of our republic, but to human freedom throughout the world. In re-thinking immigration policy, let’s not squander the opportunity to re-establish assimilation as a top policy priority.
The outcry on this subject has been somewhat muted by the moderate approach used by the Bush administration in the John Walker case. (More moderation than he deserves, I might add.) As David Henninger has noted, the first thing to be said in defense of the use of military tribunals is that if nothing else they make it clear we are in a war. The sad part is that we would not need such tribunals in a judicial process that had not been undermined by the media climate of the past twenty years or so and the corruption of the criminal justice system by the morass of individual rights-based rules of evidence. The tribunals are needed as an option for the President and Secretary of Defense in order to avoid the “OJ syndrome” and to assure that due process doesn’t become a circus. As to the possible trial of Osama bin Laden or other high-ranking al-Qaeda leaders, ask yourself, could Hitler have been acquitted? Or, did the Nuremberg trials lack fairness or suppress rules of evidence? Should we extend Fifth and Sixth Amendment rights to OBL? How about the Second Amendment? As usual, Thomas Sowell is on point when he asks, “How can anyone have rights within a framework that he rejects and is trying to destroy? Rights are not just abstractions plucked out of thin air………..At one time, all this would have been considered too obvious to require saying.” It is instructive of our times that many of our elites believe we need a “show” trial with American rules of evidence to demonstrate the legitimacy of our cause.
A letter from Bud Shivers in response to my January “Lessons From Enron” posed some good thoughts for follow up. There is a lot more to be learned about the true culpability as this story plays out, and much of the substance is presently being obscured by political demagoguery, but further lessons are surfacing. Enron highlights the degree to which the investment banking industry has been headed in the wrong direction since the major firms began offering their shares publicly a couple of decades ago. The concept of privately owned, general partnership governance of these firms served us well. Conversely, the perverse incentives created by the pressure for stock performance has produced conflicts of interest among corporate finance, research, and retail sales, and has certainly contributed to the quarterly earnings-driven management of client companies. As to the accounting profession, I see two problems manifest here: (1) the profession has not properly adjusted its practices to the growth and development of the “virtual” firm, such as Enron, for which the attest function is less a matter of validation of historical cost and revenue recognition and much more a validation of risk management processes, and (2) the conflict of interest inherent in the attest and management consulting functions, which has severely damaged the objectivity of the independent audit.
Alan Greenspan has made some interesting comments about the legacy of Enron. Essentially, he said that the result will be a transformation of corporate governance, which I agree is long overdue, and that the critical standard for these “virtual” companies is reputation. If he is correct, this may also mean a return to the days when investment banking, accounting, and commercial banking were conducted based on the concept of the “trustee” by partners with full liability and a significant personal financial stake in their stewardship. In the meantime, as we continue to make the conversion from “defined benefit” based to “defined contribution” based retirement funding, we are certainly in for much more government oversight and intrusion, at least until the governance and self-regulatory functions catch up with the markets.