Happy New Year!  As I indicated in the close of the November letter, as Americans we should begin the new year and the prospect of a new era in our politics with enormous pride in and thanks for the wisdom of the system that will again allow us to perform the true miracle of the American experiment–the peaceful and seamless transition of political power in the most powerful nation on Earth.  And as patriots, regardless of our partisan leanings, we should also wish our new President God speed and every success in the best interests of the American people.

As for those of us in the loyal opposition who tend toward the traditional and conservative on the political spectrum, we are presented with a set of challenges that haven’t confronted our movement for at least a generation and, as I have suggested, will require some deep soul-searching, for all is not well in the great land of political conservatism and significant damage has been done to the brand of the party that has been its vehicle, most of it self-inflicted.  It has been suggested by several that much of the introspection needed by the Republican Party about its future and that of the conservative movement will be largely determined by the result of a lengthy debate about the Bush administration.  That may be true, and I will have my own thoughts about the outgoing President soon, but at this point I will leave all of the party introspection to others, because, as I have previously written, the GOP is important to me only to the extent that it serves as a useful vehicle for political conservatism.

So, whither conservatism in the new era that is upon us?  Peter Berkowitz of the Hoover Institution at Stanford University, building on the work of Edmund Burke, has written that the essence of modern conservatism is the balancing of the claims of liberty and tradition, or showing how liberty depends on tradition.  Further, he adds that the divisions within contemporary American conservatism–social conservatives, libertarians, and neoconservatives–arise from differences over which goods most urgently need to be preserved, to what extent, and with what role for government.  There is much more to his analysis about how the hotly contested debates among these divisions over the competing goods play out, but this is about as concise a modern definition as I have seen. 

In the wake of recent election defeats, conservatives have been counseled by a range of observers to build a “bigger tent”, adopt a more “moderate” stance on a number of issues, particularly those that are considered “social” in nature, to be more ”inclusive” and more “tolerant”.  We are told that there is a creeping “anti-intellectualism” in the movement and a turn to populist demagoguery cultivated by its principal media spokesmen, Rush Limbaugh and Sean Hannity, and personified by the new conservative star, Sarah Palin.  We are advised that the demographic and generational changes in our country demand that conservatism be “modernized” to reflect the new notions of procedural fairness and social responsibility, as well as enlightened government activism to realize the goals of “positive liberty”, as opposed to the “negative liberty” conceived by the Founders.   

Some of this advice may be well taken, although I don’t buy into a lot of it, and all of it should be included in the mix of discussion about the future of conservatism as a political movement in America.  And I agree that conservatism needs new faces and that it should rethink and develop new applications for its traditional values as they apply to contemporary issues in addition to the priority of goods to be preserved.  But I am troubled by those who preach “moderation” as the answer for the problems of conservatism.  What is a moderate?  Is it someone who splits the difference on policy issues?  Is it someone who is “middle of the road”?  What does that mean in the context of specific issues? 

I suspect that most who use the term ”moderate” have in mind its application to the issues that are usually most important to traditional or social conservatives.  Should these be off the table entirely as some suggest?  Why should consideration of our most deeply-held values, those that are foundational to who we are as a people and as a culture be left off the table of policy deliberation?  And can we and our public policy really be moderate or neutral on these foundational beliefs?  Can we be neutral on the validity of the ideas espoused in the second paragraph of the Declaration of Independence?  Can we be neutral on the foundational belief in a moral order undergirded by natural law?  Can we be neutral on the degree to which the freedom and equality we champion can be sustained only within this moral order?  What is moderation in these contexts?  If we adopt a neutral stance on these issues and their implications, or bracket them out of public discourse, then our civic republican ideal of ordered liberty under the rule of law cannot survive.  In the right ordering of the priority of goods, these goods must have the heaviest weighting; otherwise, all the other goods treasured by conservatives will be moot. 

In a more recent article, Berkowitz suggests that a successful compromise among the divisions in conservatism can be built around a commitment to our constitutional order and its underlying principles, much as I have indicated here, but that the demand for purity by the partisans of the two major blocs–social conservatives and libertarians–will be destructive.  I agree, for the reality of simple electoral math is that neither wing can be successful without the other.  

This is not a rhetorical exercise, for the hopefully revived and enhanced conservative movement will be immediately challenged by a new regime that has a drastically different worldview, including that of America’s foundations as well as its future role.  It will ultimately reveal itself as the most radically leftist regime in American history and one that is Eurosocialist and multicultural to its core.  What will follow is a battle for the political soul of the country.  So let the debate proceed with considerable urgency. 

It is comforting to think that the worst of the economic meltdown may be behind us, that hopefully the extreme volatility of the markets has abated somewhat and they have found their bottom for the time being, but I fear a more profound and longer lasting negative impact from the “cures” that have been applied and proposed.  The most destructive policy has been the Federal Reserve’s failure to honor its most important responsibility–to preserve the value of the dollar. 

Believe what you will about the causes of the recent crisis, but the political corruption of Fannie and Freddie, the failure of regulatory oversight, and the overreach of Wall Street product engineering would have produced relatively controllable aberrations were it not for the enabling availability of oceans of excess dollars that financed the debacle.  Aside from this role played by the Fed’s monetary policy over the past five years in misallocating capital in excessive amounts to the subprime mortgage market, the policy that has been pursued over that period has been destructive in a number of other respects.  It has used a cheapened dollar as an instrument of trade protection, thereby significantly damaging U. S. credibility in world markets, which for the country that manages the world’s reserve currency is absolutely critical to world order.  It has undermined the world’s pricing discipline, for our markets can operate to clear themselves only in an environment of rational pricing based on the value of underlying goods and services without the manipulation of exchange rates by central banks.   It has destroyed the anti-inflation discipline of the past 25 years and, with the prospect of new “stimulus” plans proposed by the Obama administration, which can only be financed by the creation of many billions of additional dollars along with the expected tax increases, it will be the accomplice for what I fear will be a renewed round of 1970s-style stagflation, which will have repercussions for entrepreneurial activity far beyond its immediate impact on inflation and prices. 

My hope is that, as a principal advisor to President Obama, Paul Volcker will speak forcefully against this continued misdirection in Fed policy, although it appears that he may be in the minority on the new economic advisory team.   As for the longer term, we need a revived Bretton Woods type compact among a new league of democracies, one that will restore gold backing to the dollar and tie the dollar to the world’s currencies.  Our role as the keeper of the world’s reserve currency and our stewardship of order in world financial markets is much more than a good strategy, it is a moral obligation and we have failed to uphold it.

No One Sees God, by Michael Novak

Novak is one of the more insightful theologian/philosophers and in this release he is at his most provocative.  He draws from his lifelong study of philosophy and his personal struggles with religious faith and belief in exploring the age old debate between faith and reason.  He does so by demonstrating the ways in which both atheist and believer experience the “dark night” of the void, where God seems nowhere to be found.   The most interesting parts of the book are his challenges and responses to the currently most popular atheists, Dawkins, Dennett, Harris, and especially Christopher Hitchens.  Not a light read, but worth the effort.

The Return of History and the End of Dreams, by Robert Kagan

This is a follow up to Kagan’s widely acclaimed Of Paradise and Power.  In it, he explores the new realities following the expected peaceful international order that was to have followed the end of the Cold War and poses the important questions facing the liberal democracies by the growing threat of the eastern autocracies, China and Russia, and the international competition and possible regional conflicts posed by those countries in addition to Europe, Japan, India, and Iran.  A very concise and insightful overview and a touch of reality for the incoming Obama administration.

Education’s End: Why Our Colleges and Universities Have Given Up on the Meaning of Life, by Anthony T. Kronman

If you were a fan of Allan Bloom’s The Closing of the American Mind, or didn’t read it but wondered what all the fuss was about, or if you simply have wondered what has happened to the core academic curriculum of the American university and its impact on the past couple of generations of American youth, this is the book with the answers.   Over the years, I have grown in my belief in the basic premise of this book: that the questions of what living is for and of what one should care about and why are the most important questions a person can ask.  It is one of the great tragedies of higher education in this country that these questions have been relegated to the backwaters of the academy and, in fact, have in most cases been expelled from the classrooms of our most prestigious campuses.  Kronman explores why this happened on our watch and calls for a restoration of the pursuit of the quest for life’s meaning to its proper place in higher education. 

On a personal note, I had the opportunity to meet the author when he spoke to the supporters of the Program in Western Civilization and American Institutions at The University of Texas at Austin, on whose board of visitors I serve.  I am pleased to say that this program has received national notoriety as a breakthrough at a major university with the potential to help reverse the unfortunate situation he describes.