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Tuesday, January 10, 2012

America Confronted by Renewal or Revolution

By Daniel J. Cassidy

The Boston Tea Party, 1846 Nathan Currier depiction
They were patriots who loved their country but were wearied by a government whose distant wars and foreign intrigues placed a crushing and ever-growing tax burden on our people.  They were frustrated by a government that denied them access to vast American territories and the God-given resources they contain and that are needed for the well-being of our people.  They saw a government creating a “multitude of new offices to harass” and regulate the people and their businesses.  They grew hostile to a government of powerful special interests that promulgated treaties and trade practices for the benefit of a few, and mostly foreign interests, while denying hardworking and resourceful American workmen and women, farmers and manufacturers, the opportunity to compete on a fair and level playing field in world commerce.  They saw a government headed by a young and inexperienced leader surrounded by dishonest and self-serving deputies, whose arrogance and indifference to the plight of ordinary people drove loyal, patriotic Americans to a symbolic act of defiance.

The situation described above may seem applicable to the TEA Party movement or, interestingly, it might also describe the Occupy Wall Street demonstrations that have occurred throughout the nation.  But in fact, the conditions described above were the very conditions that prompted the first Tea Party in Boston back in 1773, and presaged the American Revolution.

Human nature and the corrupting influence of power have not changed much over the history of mankind, much less in the last few hundred years.

The Occupy Wall Street demonstrators and the TEA Party movement may be motivated by different political philosophies, with different prescriptions for what ails America, but they both arose from the grassroots and are responding to something that has gone profoundly wrong in the American economy and its political system. 

The TEA Party movement believes that government is too big and has too much power over the marketplace.  The Occupy Wall Street people believe that corporations have too much power over government.  Nevertheless, both groups are responding to the same corrupt collusion between big business and big government.  It has been called corporatism and crony capitalism and its roots go back to the dramatic growth of government that began in the sixties and seventies under Democrat and Republican presidents.

With an increasingly larger government sector driven by public sector unions, Wall Street makes money off the debt of bloated government.  That expanding public sector crowds out the private sector, while concentrating and diminishing the nation’s overall wealth.  With more and more public and financial sector employees depending on an increasingly smaller and over-taxed wealth producing sector, the seeds of rebellion are planted and the push-back may be just beginning.

America’s largest banks, the very institutions so generously bailed out by the Bush and Obama administrations, have $1.6 trillion in reserves.  That is 80 times what they had in reserve only four years ago.  Economists at the University of Massachusetts have stated:
If America’s largest banks and non-financial companies would just loosen their death-grip on a chunk of the $3.6 trillion in cash they’re hoarding and move it into productive investments instead, the report estimates that about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent.
Why have banking institutions lost all interest in investing in the small and medium businesses on which their local communities depend?  Because they have an even more profitable and secure symbiotic relationship floating paper on which an ever bigger government depends.  In 1980 the finance sector was 7 percent of the U.S. economy.  By 2007 it had grown to 23 percent.  And it, like government, is dependent on a diminishing number of wealth producers.

The results of this phenomenon are seen in the suburban and rural communities across America where small enclaves are surrounded by a nation growing increasingly poorer.  New York’s Long Island provides a good example.  Fifty years ago, Long Island was a diverse economy of farms, middle, upper middle and affluent communities whose economic backbone was a dynamic defense and aero-space industry comprised of such companies as Grumman, Fairchild, Sperry and Republic Aviation.  Today, Long Island’s North Shore communities are increasingly comprised of Wall Street investment bankers, financial services industry executives and public sector employees.  On Long Island’s South Shore, once middle class communities have become poorer and crime-ridden.  True wealth creation through dynamic private sector manufacturing has become as scarce as the farms which once dominated much of the landscape.  Wealth is concentrated, some of the nation’s highest taxes have decimated the middle class, and those too poor to leave have become increasingly dependent on government entitlement programs.  It is a story being played out throughout America.

They don’t know it yet, but the leftist students and the middle-aged TEA Party movement people will increasingly find themselves united in battling the crony capitalism of big government and big corporations.  If revolution is one’s goal, the current economic and political environment is dry tinder for a conflagration. 

Will a new president and a new congress have the wisdom and independence to undertake systemic change and roll back the size of government and end its symbiotic relationship with Wall Street?  Other nations have successfully confronted this problem.  Canada, New Zealand and Germany have trimmed the excesses of their welfare states.  Canada’s economy was so precarious twenty years ago that many Canadians did their banking in the United States.  Now in comparison with the United States, Canada’s government spending is disciplined and its economy is robust.  Many state governors are also taking steps to curb the power of public sector unions by ending government collection of public sector unions’ dues and collective bargaining.

Thomas Jefferson noted that “mankind are more disposed to suffer, while evils are sufferable.”  But a freedom loving people will only tolerate so many “abuses and usurpations.”  Today, as in 1773, Americans have been driven to symbolic acts of defiance.  The next president and the next Congress had better heed the warnings or revolutionary change in America is inevitable.  With a rededication to the Constitution, smaller government, individual freedom, private sector initiatives and national sacrifice, it can be a glorious American renewal ensuring the continuity of our institutions and our freedoms; or it could be as costly as America’s first revolution and as destructive of freedom as the French and Russian revolutions.  With each increase in the national debt limit, it is becoming clear to grass roots Americans as diverse as the Occupy Wall Street protestors and the TEA Party movement that without such a renewal, crony capitalism, big and increasingly oppressive government and unsustainable debt will force economic collapse and produce an America quite different from that secured by our founding fathers and the American Revolution.


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