Repeatedly over the past month I have read something like the following in the American (and in the foreign) press:
The expected showdown over the legislation is the culmination of months of efforts by Tea Party-allied freshmen and fellow conservatives to demand a fundamentally smaller government in exchange for raising the federal borrowing limit.
This from today’s New York Times (July 27, 2011). The problem I have with this casting of the debt crisis is that it isolates this particular campaign to disable and eliminate the federal government from past and continuing campaigns. This is not about smaller government. This is about the restoration of “private law” on behalf of private self-interest at the expense of public law on behalf of res publica. Nor is it about reducing deficits. The best outcome for the so-called Republican Party would be default, financial crisis, followed by a complete political overhaul of the nation.
This agenda places private investors in a dilemma. On the one hand, they are not all too fond of the rule of public law. As the framers of the U.S. Constitution pointed out two and a quarter centuries ago, the single greatest defect in the Articles of Confederation was that it prevented the federal government from raising revenues to maintain the consistent rule of law across the states. In 1787, the federalists won out over the anti-federalists. But the argument didn’t end there.
Throughout the nineteenth century, southern Congressmen and northern industrial leaders labored tirelessly to overturn, pare back, and undermine federal institutions and federal authority. And, as we well know, in 1861, exactly one and a half centuries ago, eleven states determined that the only way to undo the decisions of 1787 was to once again declare their independence from the federal government. These states, in effect, re-instituted the Articles of Confederation. For private investors, the decision was was an unmitigated disaster.
Which is why financial markets are a bit jittery to say the least. For, the alternative is the consistent rule of law res publica, on behalf of the public. And they know what this means. As it did in 1787, it means the taxation of private wealth on behalf of public interests.
The game is over. Private financial institutions need to step up to the plate. They need to make clear to Tea Party Republicans that they are now on their own; that, given the alternatives before them, they will support (small “r”) republican values and institutions over private law and private self-interest. Because, in the end, this is what also serves the interests of financial markets.
My fear is that it is too late and that, having coddled and cheered these anti-federalists since the end of World War II, these anti-republicans now rule the roost. Which means that this may be not 1787 or 1861, but 1932. No, this is not about smaller government. It is about an entirely different kind of government. And, that is what concerns me.