A repeated segment on 60 Minutes II last month caught my attention. It told the story of the Seminole Indians of Florida, their assimilation and intermarriage with freed slaves, and their tragic “trail of tears” journey to the Oklahoma Territory after 1830. Recently, the U. S. Government settled a lawsuit, awarding $56 million to the tribe for “reparations” for this history. But now the tribe has voted to exclude from the settlement any blacks among them who cannot prove pure blood direct Seminole descendancy from 1823 (somewhat analogous to the Nazi Nuremberg Laws of the 1930’s). These people have lived together as a tribe and a community for 180 years, until the government, encouraged by a few members of the trial bar, gets involved with its group-based rights theories. It strikes me that this is where all such theories will lead. So who is being “divisive”? Who are the racists? Is it we opponents of “group think” affirmative action and reparations? I think not.

In response to my request for comments from readers on their ideas for the prominent themes of the 21st century, I received a particularly provocative response from Dr. John Fieler, which follows in part:

“This century will either be noted for the rise of a third party into a position of prominence in this country, or the demise of our form of government into just another socialist country. The Republican Party is now nothing more than another entitlement generator. They have abdicated their basic principles in order to win election and they brag about the permanence of their proposed entitlements. I don’t know where the new party will come from, but it will be the only chance for a revolution within the framework of the Constitution………………..When the ruling class takes from the producers to give to the non-producers, society eventually unravels. Ours will be no different.”

Coincidentally, and consistent with John’s theme, David Brooks for The Weekly Standard editors produced a lead editorial on June 24, entitled “The Problem With K Street Conservatism”, in which he bemoans the tepid response of conservatism as practiced by the Republican Party to the current range of opportunities for transformational leadership. As he puts it, “instead of a fundamental debate about ideas, conservative politics becomes transactionalism”. I have written before about the difference between transformational and transactional leadership and the difference it makes for our country. With K Street corporate priorities dominant, we get transactional leadership tied to the here and now, devoid of transformational ideas, with no strategic vision and plenty of cynicism. Where are the Gingrich-era insurgents? It makes one wonder why it is important for conservatives to elect Republicans, for they have done very little to differentiate themselves from the other party. Ramesh Ponnuru of National Review points out that the Democrats have been successful in frustrating the Republicans because the latter have refused to politicize the war. It seems that they hope that homeland security will drown out debate on domestic issues and allow them to avoid such debate. This is a strategy that will doom them to minority status.

July 11, 2002 was the 21st anniversary of the Kemp-Roth bill, the legislation most responsible for completely transforming the terms of policy debate and launching the Reagan Revolution. And how did he do it with Democratic majorities in both houses of Congress? He went over their heads to the people and won with Democratic support. The economic boom that is just now taking a breather began then. Properly understood and properly articulated, limited government and conservative policy wins. The tragedy of the 1990’s, beginning in 1988, is that we allowed the Reagan economic policies to be discredited without lifting a finger to defend them philosophically or with the facts of their success.

President Bush should forget about the K Street crowd and use his high approval rating now in the same way Reagan used his popularity. Otherwise, maybe John Fieler is right, that a third party revolution is the wave of the future.

I was encouraged by a little noticed and under-reported ruling by the Internal Revenue Service that could have significant implications for the cost and availability of health insurance. The IRS in effect breached the 1996 cap on the number of Medical Savings Account policies that can be issued by ruling that employer funded out-of –pocket medical expenses are not taxable and that any unspent funds can be rolled over and can follow the employee. Over time, this should greatly increase the incentive for health care consumers to spend wisely and demand more patient-directed coverage features. More choice and greater control by consumers will lead to more individual responsibility and a bottom-up transformation of the system. Ted Kennedy and Hillary Clinton, call your office!

“If the choice is between doing too much and nothing at all, I’ll choose the latter every single time.”—Jonah Goldberg

“If you see ten problems rolling down the road, nine of them will roll into the ditch before they hurt you.”—Calvin Coolidge

Thank God Congress will soon be in recess! Maybe back in “flyover country” members can listen to some common sense about the frenzy over corporate misdeeds and what to do about them. When I hear people like Sen. Paul Sarbanes declare, “we’re out to restore capitalism”, and the bill to increase regulation of the accounting profession is approved by the Senate on a 97-0 vote, I fear for the republic. Even the vote to declare war on Japan was not unanimous.

Where do we get this idea that it is the business of government to intervene in every instance where there is tragedy or economic loss? The political class has been led to believe that there should be a government answer for every misfortune, including those that are the result of the vagaries and over-indulgence of the market. It reminds me of the old comic strip, “There Oughta Be A Law”. Why is this the case? Because the people expect it and the political class, both Republican and Democratic, is only happy to accommodate. I submit this came from an entitlement culture that grew out of the progressive philosophies of the early 20th century and was given impetus by FDR and his four freedoms. If entitlement doesn’t drive greed and deceit, it gives them a big push.

Do we need some corrective measures to shore up corporate governance? Sure. Do we need to correct the glaring conflicts of interest in the accounting/consulting and investment banking industries? Absolutely. And the crooks should go to jail. But the markets will punish substantially all the non-criminal bad behavior and have done a pretty good job of it already, with U. S. market losses of about $1.5 trillion since the first of July alone. In my opinion, we have now reached the point where the markets now fear regulatory overkill most of all. More regulation and more government is not the answer. More integrity is. Rules are never a substitute for ethics.

There is nothing new here but, as one analyst on CNBC pointed out, people are watching and want to know what behavior will be rewarded and what will be penalized. And while we’re on the subject of ethics, who gave us our most recent lesson? Which teacher-in-chief (President) of the past 22 years was most instructive on this subject? Was it the “decade of greed” of the 1980’s that produced this phenomenon? No. It was the “irrational exuberance” of the 1990’s, during which we were pondering the definition of “is” and wondering whether character counts! And, by the way, does anyone care to compare business waste, fraud, and abuse with those of government? No contest.

Meanwhile, President Bush and the Republicans have joined the push to find a government solution. I just hope we can get past the November elections before permanent damage is done.

The title above is also the title of Francis Fukuyama’s latest book, which I have just completed. I have recommended him before (The End of History and the Last Man), and he continues to attract me with his penetrating insight on the most pressing issues. Here he traces our changing understanding of human nature through history leading to a description of the potential impact of the revolution in the life sciences on the foundation of liberal democracy—the belief that human beings are equal by nature. In my opinion, there will be no more compelling theme in this century than this one.