All That Darned Conservatism

Did you realize that we conservatives got all we wanted and that's what screwed up just about everything, from hurricanes and Iraq to the global financial meltdown?  That's a rapidly-developing propaganda theme being disseminated in the Big Media. Case in point: Thomas Frank (What's the Matter with Kansas?) in the Wall Street Journal.

"Over many years of ascendancy, conservative Republicans have filled government agencies with conservative Republicans and proceeded to enact the conservative Republican policy wish list -- tax cuts, deregulation, privatization, outsourcing federal work, and so on.

"And as a consequence of these policies our conservative Republican government has bungled most of the big tasks that have fallen to it. The rescue and recovery of the Gulf Coast was a disaster. The reconstruction of Iraq was a disaster. The regulatory agencies became so dumb they didn't even see the disasters they were set up to prevent. And each disaster was attributable to the conservative philosophy of government."

If Mr. Frank really believes this, then one of us is crazy.  But I don't think he believes it.  I think he's in the tank for Barack Obama and wants to use the megaphone of the WSJ to put some meat on Obama's bones of "the last eight years."

You can read his whole article, and you'll find no shred of evidence to support any of his claims.  His logic is simple -- and flawed.  It goes like this.

  • Republicans are conservative. (Flawed premise number one.)
  • Republicans have ruled in recent years. (Flawed premise number two.)
  • Everything wrong in that time is therefore due to conservatism. (The good old post hoc ergo propter hoc fallacy, even if based on good premises.)

Republicans are conservative

We conservatives wish Republicans governed with any conservatism.  There were some tax rate cuts in 2001, but that's about the sum total of the conservative "wish list" that was enacted under George W. Bush.

And how about those tax cuts?  In 2006, the federal government took in more money, after adjusting for inflation, than it ever had in its history.  While it was "only" 18.4% of GDP, that still beat the 1960-2000 average of 18.2%.  And those making over $200,000 per year, or the top 2%, paid 47% of all personal income tax .

As a conservative, I can tell you that historic levels of federal revenue were not on my wish list.  Nor was a tax code so progressive that 2% of filers pay almost half of all income taxes.  Could Mr. Frank, as a non-conservative (one could presume), please tell us how much the federal government should take in?  Is the most in history not enough?

And that's as good as it gets, conservative agenda-wise.  I see Mr. Frank did not bother even listing "spending cuts" in his so-called conservative wish list.  I'm a conservative who reads lots of conservative stuff, and I don't recall seeing much in the way of calls for "outsourcing federal work."  But every conservative I know wants the government to cut spending.  And every conservative I know is pretty irritated that the exact opposite happened under George Bush.

As for deregulation and privatization, what is Mr. Frank talking about?  I'm sure that somewhere in the byzantine world of government, some regulation was changed or something might have been privatized.  But the general trend has been the exact opposite.  In 1999 the federal register published 73,880 pages of regulations.  In 2004 it was 78,851, or almost 5,000 more pages of regulations.  And whatever was privatized, our government still managed to spend 20.3% of GDP in 2006 versus 18.4% in 2000.  If we privatized anything, it was overwhelmed by un-privatizing a net 1.9% of our economy (about a quarter of a trillion dollars).

To be blunt, we conservatives did not get a damn thing on our real wish list.  Instead we got more government spending, prescription coverage under Medicare, No Child Left Behind, Campaign Finance Reform, increased minimum wage, etc., etc.  And we conservatives believe that is the problem!

Republicans Have Ruled?

George W. Bush has been President since January 20, 2001, or almost the last eight years; that is true.  But the President can only sign the budgets Congress gives him, and he can only fill high-level positions with people approved by the Senate.

On June 6, 2001, Jim Jeffords jumped from the Republican party and the Senate jumped to Democratic control with him, for almost two years.  And both houses of Congress have been in Democratic hands the last two years.  For those four years in between, the Democrats had enough Senators to filibuster anything, and they used that power freely.  But with Republicans like Chafee (now endorsing Obama), Collins, Snowe and Specter, the filibuster was not always necessary.

The US Senate has been the final resting place of virtually every "conservative" initiative in the last eight years, yet the birthplace of such non-conservative monsters as Campaign Finance Reform and Comprehensive Immigration Reform.

By the way, at the end of 2006, just before the Democrats took over Congress again, the unemployment rate stood at 4.4% and real GDP had averaged 3% annual growth in the previous four years.  Did you get the change you wanted?

Everything Wrong Is Due to Conservatism

In what way was the "rescue and recovery of the Gulf Coast" a "disaster"?  Our military and Coast Guard pulled thousands of people out of harm's way.  Virtually all fatalities were due to the initial hurricane and immediate flooding, having nothing whatever to do with a federal government response, and just about everything to do with a Cat-4 hurricane hitting a major population center built below sea level.  What we saw on TV was a mess at the Superdome, a place where people who had been told to leave the city were told not to go.

Just as the Katrina mess should be blamed on a hurricane and not on "conservative policies", Iraq reconstruction problems should be blamed on 20 years of rule by the psychotic Saddam Hussein.  The Iraqi infrastructure, other than Saddam's palaces, had been neglected ever since Saddam assassinated his way to power 20 years before.  The security situation was a little dicey because Saddam's "police", rather than serving and protecting, raped, killed and tortured Iraqi citizens.  There was a rape room in almost every police station, with the busiest one in the Baghdad Central Police Academy.  Such thugs do not go gently.

How can Mr. Franks so glibly, with no evidence whatever brought to bear, blame the Iraqi reconstruction difficulties on conservative policies?  What "conservative" policies?  The one of using only 150,000 troops?  The one of insisting on Iraqis running Iraq, under a constitution and fair elections?  The one of spending billions of our own dollars in Iraq?  Would a 5-year occupation under a US viceroy and 500,000 troops have been the "liberal" policy?  Would he have preferred Harry Truman's "liberal" solution used on Japan in 1945 - two atomic bombs?  Again, what is Mr. Franks talking about?

Deregulation and the Financial Mess

When it comes to blaming the current financial mess on "deregulation", Mr. Franks is not alone.  Barack Obama did just that in the most recent debate.

How did we manage to deregulate the world, from Germany and Britain to Belgium and Iceland?  Are you telling me that a minor change to Glass-Steagall signed into law by President Clinton in 1999  ultimately caused Iceland to go bankrupt in 2008?

The very liberal Village Voice  places the blame of the housing mess very squarely on the shoulders of Andrew Cuomo, President Clinton's Secretary of HUD.  Hint: he did not "deregulate."

And when it came to Fannie Mae and Freddie Mac failing, which started the whole snowball, it was Republicans who were clamoring for stricter regulation and oversight, and Democrats fighting them tooth and claw.  Here was Barney Frank in 2003:

"These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.  The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

You can also see on YouTube how those Democrats treated the regulators.

Thomas Frank said in the WSJ, "The regulatory agencies became so dumb they didn't even see the disasters."  I think he mixed up the regulators, who did see disasters coming, with Barney Frank, the Congressional Black Caucus and other defenders of Fannie Mae.

Conversely, John McCain co-sponsored (with three other Republicans) the Federal Housing Enterprise Act of 2005, a bill "to address the regulation of secondary mortgage market enterprises" and which passed committee.  McCain then made an impassioned plea on the floor of the Senate to pass the Act , beginning this way:

Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The bill was killed on the Senate floor.

Three of Fannie Mae's top executives were sued by the government for misstating earnings.  According to the Washington Post:

The Office of Federal Housing Enterprise Oversight sued the former executives in 2006, seeking to recoup more than $115 million of compensation the agency said they received while Fannie Mae's earnings were misstated, plus penalties that could have exceeded $100 million.  [Franklin] Raines, former chief financial officer J. Timothy Howard and former controller Leanne G. Spencer were fighting the charges.

... OFHEO Director James B. Lockhart III said the former executives "improperly manipulated earnings to maximize their bonuses . . . misleading the regulator and the public."

Also according to the Washington Post , the executives settled the suit.

Raines had agreed to forgo stock, cash and other benefits worth $24.7 million in exchange for dismissing the charges against him... Former chief financial officer J. Timothy Howard agreed to a settlement OFHEO valued at $6.4 million -- $5.2 million in stock options -- and former controller Leanne G. Spencer agreed to pay $275,000.

I'm not seeing a lot of "conservative policies" in action here.  In fact, Barack Obama apparently still gets housing advice from Franklin Raines.  Can you imagine if John McCain took advice from a former Enron executive?  At least the government didn't bail out Enron, nor did Enron's failure lead to the bankruptcy of Iceland.

Back to Basics

The Federal Reserve Act was enacted in 1913 to manage monetary policy.  Seventeen years later a recession was turned into the Great Depression, largely due to mismanaged monetary policy.  Despite the lousy monetary policy, Hoover's tax increases and Smoot-Hawley protectionism, all anything but free market solutions, Democrats were successful in blaming the Depression on the free market.

Now, some 75 years later, government at all levels in the US takes up almost 40% of our economy.  Federal regulations took up 2,620 pages in 1936, the middle of the New Deal.  In 2004 those regulations took up 78,851 pages.  Government has become ever larger and more intrusive and the free market has been smothered almost to death, with no let-up in the last eight years.

How can you blame the "free market" when it doesn't even exist?  What does exist is a government that only Kafka could understand and only Marx could love.  (For the conspiracy minded, get a load of a 1922 New York Times article.)

And how do Thomas Frank, Barack Obama and the rest of the Democrats plan to fix it?  More government, of course.

Randall Hoven can be contacted at or  via his web site,