Hendrickson's View

Mark W. Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.

An Open Letter to Mitt Romney

Dear Mitt,

I have awakened on November 7 to learn that your bid for the presidency was unsuccessful. In the midst of the disappointment that I share with you, I want to thank you for devoting years of your life to the wearisome task of running for president. Millions of Americans are grateful to you.

You have been one of my heroes for the past 48 years. I still recall vividly the valiant cross country race you ran at our Cranbrook Homecoming in October of 1964 - a race when you willed yourself to run faster than you ever had until, near the end, oxygen starvation set in, causing you first to stagger, then to collapse just 30 yards from the finish line. I can still see your face, ashen and contorted in pain, as you ignored the torture of the cinders on the track scraping against soft skin and began to crawl. Even though every other runner passed you, and you had nothing to gain - other than surcease of agony - from dragging yourself to the finish line, you refused to quit until you reached your goal. Your brave effort touched me deeply. That's when I learned that you were special - a man of character, commitment, heart and guts, someone who embodied the indomitable American spirit.

I also admired your exuberant joie de vivre. You loved life, and I can see that your great capacity for love found abundantly happy fulfillment in your life with your wife and sons. I also remember your friendship with Chester, our night watchman at Cranbrook. At prep school, there can be a tendency to disregard the support staff, to take them for granted like the furniture, but you reached out to that good, simple, kind, salt-of-the-earth security guard. (Just for the record, I befriended Chester, too, during my senior year, so I feel we share that bond.)

Nobody can doubt your love for our country. Whereas your opponent concentrated on lining up support from key special interest groups, your focus was more akin to the patriotic statesman than the opportunistic politician - it was so clear that you wanted to get our country back on track. As we can now see, that wasn't to be.

What occurs to me is that, by losing the election, you might have been spared a cruel fate. If elected, you would have inherited an economic mess. The problem isn't just the looming fiscal cliff and debt ceiling, but the overall financial situation of our government is clearly unsustainable and nonviable. Entitlement spending has mushroomed so that it - combined with interest on the national debt - now consumes virtually every dollar of tax revenue. That means that the various departments and agencies that we normally think of as "the federal government," from the Pentagon through the EPA and everything in between, is being run on borrowed (or "quantitatively eased") dollars. No president could trim entitlement spending or shut down enough of the government to stanch the flood of red ink. Government indebtedness will continue to balloon and our currency will continue to be debauched, and it would have been impossible for you, given the prevalent attitudes of the people, to halt that insidious process. You might have tried by firing Ben Bernanke and replacing him with someone who would stop quantitative easing, but that would have caused interest rates to rise and the federal government to become insolvent, triggering a crisis that would have made you a vilified president.

The presidency at this juncture in history strikes me as an impossible job. Both domestic and foreign policy seem to be Gordian knots that no mere mortal can cut. I know, though, that you would have valiantly been willing to give your all in the attempt to help your country at this difficult time. Your path as president would have been as excruciating as those last 30 yards of that cross country race you ran so long ago, but you would have addressed the challenge with the same determination and commitment as you did then. Now those awful burdens you would have been willing to shoulder fall on your opponent, and we'll see what kind of shoulders he has.

You gave years of your life for the chance to be of service to your country, Mitt, and you lived by our school motto, "Aim High." You did us proud.

The Great American Policy Divide, and the Democratic Temptation

Can Americans holding different opinions on political issues even talk to each other anymore? Sometimes it seems like liberals and conservatives, statists and libertarians, Democrats and Republicans inhabit parallel universes, each with its own "facts" or perception of reality. Examples of "the great divide" abound.

Recently, my colleague Paul Kengor wrote an article citing several examples of how teachers and professors in America present Communism in the classroom. One would think that we could at least agree that a political ideology that resulted in well over 100 million deaths in the 20th century is as repulsive as Nazism, but that isn't the case. Many teachers prefer to ignore the genocide and extol Communism's allegedly positive attributes.

Here are some other, less startling, examples:

* People on the left insist that voter ID laws are vicious plots to disenfranchise racial minorities. People on the right perceive them as prudent protections against fraudulent voting.

* Conservatives thought (for a while) that our invasion of Iraq was a worthwhile military adventure. Liberals thought (for a while) that Afghanistan was "the good war."

* Republicans want to balance the budget largely by cutting spending, not tax increases, whereas Democrats are gung-ho for more taxes.

American politics has spiraled into a Hegelian netherworld wherein the thesis and antithesis forever produce a synthesis that both sides find unsatisfactory.

As shrill and contentious as the partisan divide has become, the great divide in the American polity runs far deeper than the divide between the two major parties. Mitt Romney's problematical comment about the 47 percent notwithstanding, our polity seems to be coalescing into the two classes, or warring factions, called the "taxpayers" and "tax consumers." The champions of the tax consumers, such as President Obama, are seeking to achieve a permanent political majority. One wonders if they know what happened to the Roman Empire when the tax consumers prevailed.

The great divide that plagues America today was vividly described by Ayn Rand in her prescient 1957 opus, Atlas Shrugged. In Rand's dystopian novel, the American polity and society were divided between the producers who produced wealth, and the looters who parasitically lived off of the producers. As the looters extended their democratic majority and solidified political control, they progressively [double entendre] suffocated and stifled the productive members of society upon whom the economic well-being of all depended. The inevitable result, of course, was the decline and fall of that corrupt system.

At the most fundamental level, today's great divide is not political or even ideological, but moral. What is raising the political temperature, ripping our society apart, and grinding down our economy is the insidious belief that it is morally justified for the government to grant anyone the spurious privilege (erroneously called a "right") to live at the expense of others. Most Americans still acknowledge that it is morally wrong to enter their neighbor's house and take some of his property, but far too many have been seduced or brainwashed by the toxic notion that as long as the government does the taking on our behalf, then such taking is legitimate, even laudable.

This is what I call "the democratic temptation" - the debased belief that if a democratic majority takes wealth from A to give to B, then the taking is just and legitimate. There is nothing sacred about democracy. Democratic majorities are capable of great evil (e.g., the deaths of noble Socrates and the innocent Jesus) and when they use their numerical superiority to gang up on others and redistribute property, that obnoxious practice is nothing more than what Frederic Bastiat so aptly termed "legal plunder."

Social harmony cannot survive when the members of a society make war on the property of others. The democratic temptation divides us into economic enemies, tearing our society apart, and we are all poorer-economically, socially, and morally-for having succumbed to it.

The Unstoppable March Toward National Bankruptcy: Who's to Blame?

The opening line of the Beatles' iconic "Sergeant Pepper's" album is echoing in my thought: "It was 20 years ago today . . ." Well, not quite to the day, but 20 years ago I published an article titled, "$4 Trillion and Counting." In it, I despaired at the rapid increase in the national debt from its first-ever crossing of the $1 trillion mark during the Reagan presidency to four times that gargantuan amount in only a decade.

Today, a mere two decades later, we have quadrupled the national debt again, to $16 trillion. (That figure represents the official national debt, but if you add the many "off-budget" items and all the liabilities that are conveniently omitted from government "accounting," then it's multiples of the official number.)

Who is to blame?

Let's start by picking the low-hanging fruit: "progressives," a.k.a, Democrats. The Dems always want more federal spending, higher taxes, more government. Indeed, there is no major area of economic activity over which they want less control. Whether it's food, energy, housing, health care, retirement, finance, transportation, education, etc., they always want to expand the government's scope and power.

The Democrats have led the way toward bigger government. They always succeed in getting Republicans to blink every time the debt ceiling is reached, because whereas Republicans are ambivalent and divided about Big Government, progressives are united and utterly committed to it. They do not vacillate; the Republicans do, and so they buckle.

Surely, though, now that we are racing toward a jarring fiscal cliff, the government's credit rating is at risk, and major entitlement programs are on a collision course with insolvency, Democrats will compromise to fix these problems before it's too late, won't they?

The short answer, dear reader, is "No." On the contrary, the threat of insolvency is something that progressives welcome. They view it as a means to an end.

The key to understanding this dynamic is to recognize what progressives want. They want government control over economic matters, and so they adopt whatever strategies will further that goal. We saw this strategy in action with Fannie Mae and Freddie Mac. When the two mortgage giants were about to implode from insolvency, Congress simply nationalized them, making the taxpayers responsible for their financial obligations.

Do you think Barney Frank, Nancy Pelosi, and the other "progressives" were sad about that pair of nationalizations? It is more likely that they popped open champagne bottles and celebrated, for now they had achieved government control over the gigantic home mortgage business.

What do you suppose Democrats will propose on the day that funds run dry for Social Security or Medicare? They surely won't say, "Sorry, folks we're broke; end of program." Instead, in the case of Social Security, they will try to use the emergency as the pretext to nationalize private retirement accounts a la Argentina (they've already held congressional hearings about taking this step); in the case of Medicare, they will do what many of them already have stated they want to do - nationalize it.

It doesn't even matter to the Dems if the whole government goes bankrupt. Look at Senate Majority Leader Harry Reid's obstinate (and criminal) refusal to let the Senate vote on a federal budget. That indicates that the Dems have gone "all in" on their diabolical "bankruptcy as the road to nationalization" strategy. They will tell a scared public that the government will continue to take care of them, the Republicans will be afraid to oppose "a strong government response" to the fiscal emergency, and the government will take over large swaths of the private sector.

Now for some bipartisanship: The Republicans must share in the blame for the government's fiscal woes. Other than Ron Paul, what Republican has refused to vote for expansions of government into numerous areas not enumerated in the Constitution? Yes, Republicans generally have wanted to grow government at a slower rate than the Democrats, but they still have supported its continued growth. The most "conservative" long-term fiscal plan that has gained any traction in the Republican Party has been Rep. Paul Ryan's plan that would increase the national debt by "only" $4 or $5 trillion over the next decade. If that is the most "radical" "right-wing" "anti-government" plan on the table, then clearly the flood of red ink will continue to swell (that is, until the Federal Reserve Note tanks and the system cracks up).

Having blamed both Democrats and Republicans for our impending national bankruptcy, is there anyone else left to blame? Yes, indeed, now we come to the principal culprits: "We, the people." It's very convenient to blame politicians for our fiscal wreck, but the bottom line is that a lot of Americans want the government to do things for them, and so they elect big spenders. Perhaps Joseph de Maistre (1753-1821) was correct when he wrote, "Every country has the government it deserves."

The reason our government is broke is staring most Americans in the face whenever they look into a mirror. Too many of us have acquiesced to, if not agitated for, a corrupt political system. As I wrote in that article 20 years ago:

Americans must return to the traditional principle of respecting the property of others, rather than seek to obtain a portion of it through government. . . . Until then, 4 [now 16] trillion dollars is just another milestone on the way to economic ruin.

Whom should we blame for the nightmare of runaway spending and debt? The majority of Americans in both major political parties.

What the "Obama Phone" Tells Us About America's Health

Perhaps you saw the recent "Obama phone" video clip that has gone viral. In it, an Ohio woman picketing a Romney campaign event proclaimed her emphatic support for Obama's reelection. Why? Because of the "Obama phone" the president had given her and some of her friends.

That short, mundane, trivial, video clip is quite instructive:

First, it provides an example of how ill-informed many voters are. The free cell phones about which the woman enthused were the result of policies that predated the Obama presidency. That program was another "mess" inherited from Obama's old pal, George W. Bush. The ignorance that Jefferson believed would pose the greatest threat to the survival of liberty was on prominent display in the video.

Second, it indicates how little some citizens value their vote. Mistakenly thinking that she owes her free phone to the generosity of Barack Obama, the grateful woman - sounding like a child who delights in the box of cereal that includes a free toy - will vote for the incumbent in hopeful expectation of another free prize.

Third, the reaction to the video displayed the left's cynical manipulation of the topic of race for political gain. Their entirely predictable knee-jerk reaction was to denounce the video as "racist," because the woman it captures in a less-than-flattering light happens to be black.

The race of the woman is irrelevant. The video reminds me of an incident that happened early in Bill Clinton's presidency. The Clintons had profited handsomely from an allegedly shady real estate deal that became known as "the Whitewater scandal." At a public presidential appearance, a woman (white, as I recall) called out from a crowd, "Don't you worry about Whitewater, Bill, just keep our welfare checks coming!"

The significance of both of these little incidents is that the two women are typical of millions of Americans regardless of race. They don't care about any of the larger issues facing the country (if, indeed, they even know what those issues are); they don't even care if the president of the United States is a lawbreaker who has ripped off the American taxpayer - as long as the president will give them their little piece of something-for-nothing.

So, are the barbarians at the gate? It appears that they are within the gates. Are there enough Americans (even if not literally 47 percent) hell-bent on getting something for nothing such that the Republic is doomed? Perhaps. But it is important to realize that the millions of grasping, pathetic, demoralized Americans who think that "the government" is a never-ending cornucopia of goodies and that the president is Santa Claus are not the primary cause of the problem.

How can we really blame a poorly educated woman for wanting a free cell phone when lobbyists secure seven-, eight-, nine-, and ten-figure favors from their cronies in government? Why shouldn't they get a small piece of the action, when their own congressmen magically become millionaires by getting a tiny slice of the trillions of dollars of loot they parcel out each year? Moreover, who can blame poorly educated, ignorant people for believing that they are entitled to government largess when they have been told this repeatedly by those who should know better?

Indeed, the real culprits here aren't the poor people receiving government handouts, but their enablers - the thought leaders who have propagated the notion that political taking is not just acceptable, but a morally superior way to prosper; economic service to one's fellow man a lesser path to prosperity. These thought leaders include the educators who teach collectivist ethics, the writers and journalists who scorn property rights and assert that government must redistribute wealth in the name of "social justice," and the clergymen who confuse socialism with Christianity. All of these highly educated (which is different from "well educated") individuals provide the intellectual justification that enables demagogic politicians to pander to the poor and lead them down the seductive path of dependency. The manifold pied pipers of this ethical plague, not the mice they mislead, bear the primary responsibility for the culture of thievery that is corroding the fabric of our Republic.

Ralph Waldo Emerson once wrote, "A nation never falls but by suicide." If we don't find a way to extirpate the moral rot that is corrupting us from within, future historians may some day write of the American experiment that we ultimately committed suicide.

The Kind of Energy Policy the U.S. Needs

Earlier this year, President Obama has told us, "we can't just drill our way to lower gas prices." In one sense, he is correct: If he is re-elected, his administration will not allow oil companies to do the drilling that would reduce the price of gasoline. In that case, "we can't" means "we won't let you."

Absent political interference, of course we can drill our way to lower prices. We've already done it with natural gas. The price of natural gas is lower now than it has been in years, because drilling has increased the supply so dramatically. Could the same thing happen with oil and gasoline prices? Absolutely.

Over a year ago, I published an article titled, "The Global Energy Superpower," in which I included links showing the vast extent of U.S. reserves of fossil fuels. It turns out that the United States is not only "the Saudi Arabia of coal," as has been accepted for decades, but in light of recent developments, we have a chance to be the Saudi Arabia of natural gas and even the Saudi Arabia of oil.

That was the assessment a year-and-a-half ago. Since then, the Congressional Research Service has tabulated the totals and acknowledges that the United States currently has the largest known fossil fuel reserves in terms of total oil equivalent - almost three times as much as Saudi Arabia - and it seems that every month the news gets better: The reserves continue to swell.

The benefits to our country of allowing our superabundant energy resources to be developed are manifold. Let me try to explain them in terms that show why Democrats as well as Republicans should abandon Obama's anti-drilling policies:

1) Increased oil production will benefit all Americans economically, but especially those with lower incomes - the ones who have taken the brunt of the pain from high fuel prices in recent years. Team Obama and others on the left who oppose domestic oil production like to claim that they care about "the little guy." Well, prove it. Let the experts tap into our immense petroleum reserves, increase supplies, and push oil prices lower.

2) The more oil we produce domestically, whether for domestic consumption or for export, the more we will reduce the merchandise trade deficit. For years, politicians on the left and right have bemoaned our enormous trade deficit. In some years, imports of oil have accounted for more than half of that deficit, so one way to take a hammer to the trade deficit would be to crank up domestic production.

3) Cranking up domestic oil production would crank down the unemployment rate. After years of unemployment rates above 8 percent and masses of workers dropping out of the labor market, a boom in the oil patch would add large numbers of desperately needed, high-paying jobs. The true friends of American workers would be whichever president and Congress would reverse the current policy of suppressing job creation in the energy industry.

4) Starting to provide for our own energy needs would show more respect for other countries and win more respect for us. It has been pathetic that the president of the United States has traveled to Saudi Arabia and implored them to increase their production while we have refused to increase our own. Liberals are uncomfortable with American exceptionalism, but isn't it a form of exceptionalism when we expect the rest of the world to produce our energy for us?

5) Increasing domestic oil production would enhance national security. The more energy we produce at home, the less vulnerable we are to disruptions in politically unstable oil-exporting countries. By increasing supply and lowering the price of oil, less money would go into the treasuries of such problematical regimes as the House of Saud - the principal funder of intolerant Wahabbism - and Venezuela's Chavez.

6) The increased domestic economic activity would generate significant revenues to the government. It makes me uncomfortable to say this, because my primary goal is to shrink government, not to find ways to divert more wealth to government control. Still, as the lesser of evils, my own preferred way of balancing the budget would be through reductions in federal spending, but the additional tax revenues resulting from increased domestic energy production would shrink the deficit in a way that would be far less damaging than raising existing tax rates.

Obama likes to rail about the allegedly "obscene" profits of oil companies. Actually, there are dozens of industries (sometimes more than 100) that earn higher profit margins than oil's 7 or 8 percent. Doesn't Obama realize that by restricting the supply, he has raised the price and probably the profits of Big Oil? If he really wants to hack away at oil profits, he should turn them loose and let them produce oil to their hearts' content. Under the resulting competitive pressures, prices would fall, consumers would rejoice, and oil company profits would be squeezed.

Superabundant fossil fuels have the potential to help snap us out of our economic doldrums and invigorate the economy. What we need is a change of energy policy. It's time to reject Team Obama's central planning. The Obama policy has been to impede, restrict, harass, and attack producers of fossil fuels, while heavily subsidizing uneconomical renewable energies. An enlightened energy policy - one that I hope a President Romney would adopt - would be to replace government intervention with nonintervention and let the free market work. The United States would be "open for business" to energy companies, market prices would determine the economic winners and losers in that competition, and our energy woes would be alleviated. *