A Constitutional Republic, If You Can Keep It

by Michael Liss

The principles of Jefferson are the definition and axioms of free society…. All honor to Jefferson—to the man who, in the concrete pressure of a struggle for national independence by a single people, had the coolness, forecast, and capacity to introduce into a merely revolutionary document, an abstract truth, applicable to all men and all times, and so embalm it there, that to-day, and in all coming days, it shall be a rebuke and a stumbling-block to the very harbingers of re-appearing tyranny and oppression. —Abraham Lincoln, April 6, 1859 Letter to Henry L. Pierce and others.

Constitution of the United States. National Archives Museum.

An extraordinary man. Two extraordinary men, whose lives were bound together by a common thread of devotion to an idea of self-government in which all men are created equal. It is true that they did not understand it in exactly the same way (you cannot ignore the stain of slavery). Yet, the kind of people who rejected Jefferson’s core concept had—in his time, in Lincoln’s time, and now—a purpose: in Lincoln’s words, “supplanting the principles of free government, and restoring those of classification, caste and legitimacy.”

We are less than two years away from the 250th anniversary of Jefferson’s defining words, and yet it seems we are less certain, less secure, perhaps even less committed to the idea of self-government.

There is a stunning AP-NORC Center for Public Affairs Research poll that was just released, which reported the finding that “[o]nly 21% of adults feel U.S democracy is strong enough to prevail no matter who wins the election in November.”

Just exactly what is the “U.S. Democracy” that may not prevail? Before we go further, we ought to get some nomenclature misunderstandings out of the way. Let’s introduce Democracy’s cousin, the “Constitutional Republic.” Yes, we live in a Constitutional Republic and not a Democracy. No, that’s not a concluding and conclusive argument any time someone wants to make government more representative, more answerable to the voters, or less beholden to privilege. Opponents of change who invoke the phrase “mob rule” just highlight the fact that what’s at stake isn’t high principle, but rather a desire to “supplant[] the principles of free government, and restor[e] those of classification, caste and legitimacy.”

There are no “pure democracies,” even if we frame it that way out of convenience. To quote from a 2017 essay by Ryan McMaken, Executive Editor at the (very not liberal) Mises Institute:

[I]f anyone wants to argue against majoritarianism, he should simply do so. There is no need to rely on a half-baked usage of the writings of ‘the Founding Fathers’ who clearly supported a political system in which majority votes play a big part in selecting elected officials, and which is obviously a democracy according to the modern usage of the term.

In actuality, we have always had a constitutional republic, rather than a democracy. That we call it Democracy changes absolutely nothing. It’s the substance of the argument that ought to matter. The Founders did not first put an electric fence of privilege around the Constitution, and then bind for eternity all succeeding generations. Rather, they understood that Madison’s intricate document was imperfect, but it created a mechanism (through Amendment) to update it. It’s not easy to pass an Amendment, but it has been done many times, and in the service of expanding individual liberties and “Democracy.” Read more »



Monday, July 29, 2013

It’s All About the Benjamins: Grappling with Fears of Inflation

by Akim Reinhardt

BankerI belong to a credit union. It's been fifteen years since I kept my money in a for-profit bank.

Nearly one-third of Americans also belong to credit unions, and for most of us, the reason is obvious: for-profit banks suck. They nickle-and-dime you to death, looking for any excuse to charge fees. And that makes perfect sense. After all, banks aren't designed to do you any favors. They're designed to make money off of your money.

Credit unions, however, are non-profit cooperatives. So they're not out to fuck ya. People who keep money with them are shareholders, not targets of exploitation. And when a credit union does charge fees, the reason and amount always seem sensible, to me at least. So not only do I keep my money in a credit union, I also took a home mortgage with one and run my credit card through one.

The financial meltdown of 2008 only reinforced my decision to avoid for-profit banks at all costs. As profiteering financial institutions hit the skids, and were either bailed out with public money or put down altogether, the credit union industry was relatively unscathed by comparison. Reasonable regulations and responsible banking practices ensured that most credit unions never gambled away their shareholders' money.

In fact, no retail (a.k.a. consumer or natural person) credit union, the kind that operates like a bank for regular people, has ever been bailed out with taxpayer money. Ever. Furthermore, compared to banks, only a fraction of retail credit unions went under, although it should be noted that the financial meltdown did substantially damage the wholesale (a.k.a. corporate or central) credit union industry, which offers investments and services to the retail credit unions, not their patrons.

Fewer fees and peace of mind are nice perks, to be sure. However, there are certain disadvantages. One inconvenience that plagued me for several years has to do with the relatively sparse physical presence of credit unions, compared to the monstrous for-profit banks that loom large on the landscape; it seems you can't spit without hitting one of the latter, while the former is far less ubiquitous.

With fewer branches and outlets, credit unions can't offer nearly as many automated tell machines as do the big boys. Of course the credit union would never charge me for using someone else's ATM. Again, they're not looking for excuses to screw me over. But the non-credit union ATMs that I did occasionally use invariably charged me for using their machine.

So to avoid fees, I had to take care to make withdrawals only from the relatively few credit union ATMs, none of which were near my home. Either that, or I had to suck it up and pay the piper.

Fortunately, my credit union came up with a solution. They cut a deal with 7-11. As a result, I can withdraw money with my credit union ATM card at any of their stores and pay no fees. And it just so happens that there are two 7-11s within a few blocks from my home.
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Monday, February 11, 2013

Never on a Saturday

by Akim Reinhardt

Charlie Brown by Charles Schulz Earlier this week, the United States Post Office announced that come August, it would be suspending regular home delivery service of the mails on Saturdays, except for package service. The USPS is In financial straits, and the budget-cutting move will save about $2 Billion in its first year, putting a dent in the $16 Billion it lost just in 2012.

The Post Office has come under financial pressure from a number of sources over the past decade. Of course the internet has usurped traffic. And there’s also lost market share to private carriers like Federal Express and United Parcel Service, which cut into the lucrative package an overnight delivery markets, while leaving the USPS with an unenviable monopoly in the money-losing but vitally important national letter-and-stamp service. Despite regularly increasing rates over the last decade, the United States still offers one of the cheapest such services in the world, with a flat fee of 46 cents to send a 1 oz. envelope 1st class anywhere in the United States.

For less than half a dollar, you can send a birthday card from Maine to Hawai’i, and be confident that it will arrive in 2-3 days. Pretty impressive. Especially when compared to other nations, almost all of which charge more for an ounce of domestic mail, even though most of them are quite a bit smaller in size. The chart below compares rates from 2011.

Another financial constraint comes from the fact that, other than some small subsidies for overseas U.S. electoral ballots, the USPS is a government agency that pays its own way, operating without any taxpayer dollars for about thirty years now..

However, the biggest factor in its recent financial free fall is undoubtedly the Postal Accountability and Enhancement Act of 2006 (PAEA), which Republicans pushed through Congress and President George W. Bush signed into law. The PAEA required the Post Office fully fund its pension healthcare costs through the year 2081.

Yes, you read that right. 2081. And it was given only 10 years to find the money to fund 75 years worth of retirement healthcare benefits.

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