Saturday, July 16, 2011

Emergency powers

From time to time, I have had conversations over the last few years with a friend of mine, a historian of Weimar Germany, comparing our situation to theirs. We haven't talked for a couple of months, but a new and unmistakable parallel has emerged. It suggests that our domestic crisis is far from over, and it does not bode well for the short-term future of American democracy.

The designers of the Weimar Republic were sincere democrats who took various elements of their constitution from existing Republics. They decided on proportional representation for the Reichstag, the parliament, which probably gave an advantage to extreme parties whose support was scattered around the country. They also created a strong President elected by the popular vote, and even gave him emergency powers to carry on the essential functions of government should the legislature fail to agree. In so doing they followed a precedent from German history: Otto von Bismarck, as Prime Minister of Prussia, had successfully exercised such powers from 1861 until 1867, governing with the existing budget when Parliament refused to pass a new one. There is of course no such provision for emergency powers in either the unwritten British or the American Constitutions. The federal government can neither spend nor borrow money without an explicit authorization from the Congress.

This is as good a place as any for me to introduce a new element into the budget discussion: as far as I can tell, the United States is not in the least threatened with default if Congress does not act by August 2. The US Government is currently authorized to carry a debt of a certain amount--checking I find it is apparently $14.294 trillion--and I assume that that authorization is indefinite. Thus, even after August 2, the government would be able to borrow money every time an existing obligation came due, since that would not increase the overall debt. But it would not be able to borrow more money to make additional expenditures. Given the size of the government deficit, that is, the amount of current government expenditures not covered by revenues, that would indeed be catastrophic for government and the American people, but it would not be a default. If the Republicans really meant what they are saying they might in fact argue that the government's job is to start balancing its revenues and expenditures on August 3, but of course they haven't.

But back to the topic. The Weimar Constitution required a strong, sincerely republican president to function effectively, and German voters initially elected just such a man, Friedrich Ebert, a social democrat. Tragically, however, he died in 1925 at the age of 54, and in a close election German voters replaced him with the right wing candidate, Field Marshall Paul von Hindenburg, who did not believe in the Republic at all (and in fact asked the deposed Emperor William II for permission to run for this illegitimate office.) But as late as 1928, the Weimar government was firmly in the hands of a center-left coalition, led by another Social Democrat, Hermann Muller. That government fell in 1930 and the new Chancellor, Heinrich Bruening, called for new elections. They catastrophically increased the power of the Nazis and the Communists and made it impossible for any government to command a Reichstag majority for the rest of the Weimar Republic's short life. For the next two years, all budgets were passed under Article 48 of the Weimar Constitution, providing for emergency presidential decrees. Bruening for two years cut the budget in the midst of a depression, making it worse, increasing the Nazi vote, and paving the way for the final catastrophe.

The Nazis and Communists refused to take responsibility for governing their nation. The Republicans have been doing the same, insisting on absolutely impossible conditions before increasing the debt limit and allowing the government to function, because their House majority refuses to vote for anything that violates their principles of budget-cutting and no new taxes. Their policies, particularly the Paul Ryan budget, would return us to something like the Gilded Age once and for all. Some of them evidently would be glad to stop government borrowing right now, and they may indeed prevail over the next two weeks, although I think that is unlikely. But Mitch McConnell--who like Joe Biden belongs, barely, to the Silent Generation (b. 1942)--has lost his nerve, and I think John Boehner has as well, although he is still putting up a brave front. McConnell has come forward with a proposal designed in effect to turn the United States into something similar to the Weimar Republic in 1931-2, that is, to give the President emergency powers to deprive Congress, which refuses to do its job, of one of its most essential functions.

McConnell apparently is willing to give the President the authority to raise the debt ceiling himself, subject only to approval of one-third of each house. That will allow the government to continue to function while leaving every single Republican in Congress free to vote against what is happening. It is surely unconstitutional--I do not believe the Congress is free to abdicate its powers, although it has done so on several occasions recently already. It illustrates the inability of the majority that Fox News and Clear Channel have brought into being to face reality and be honest with themselves about the necessary role of the federal government and the need to pay for it. It also illustrates the incredible power of Grover Norquist, an unelected official who has never held any government office who can single-handedly prevent tax increases which we desperately need. The McConnell compromise no looks like the most likely solution to the crisis. President Obama yesterday signally failed to insist on a broader deal. It will allow our government to function, but it will also confirm that our democracy, like Weimar after 1930, isn't functioning at all. One reason the United States is in such trouble today is that its Boomer and Xer politicians have no respect for established traditions or laws. They care only about pleasing their backers and their constituents. It may turn out that some genuine reverence for our Constitution--something that history departments and law schools have also more or less stopped teaching--is necessary to make it work.

What happened in Weimar? In 1932 Hindenburg was barely re-elected running against Hitler. (He had now become the candidate of the Left, since he seemed to be the only man who could defeat the Nazi leader.) But as the economic crisis got worse and worse because of budget austerity, he was eventually persuaded to appoint Hitler Chancellor as head of a center-right coalition in January 1933. Hitler immediately claimed various emergency powers of his own and within a few months had convinced the Reichstag to vote itself out of existence.

I have argued before, and still believe, that today's Republicans have essentially noting in common with the Nazis from a policy point of view, even though many of their rhetorical tactics are very similar. The Nazis wanted big government and a strong state; the Republicans are moving as quickly as they can to destroy our state and federal governments. But the Republicans, like the Nazis, have scored a big enough electoral triumph thanks to the economic crisis to make the country ungovernable by traditional means. In addition--and this may turn out to be the critical point--they have moved the political debate catastrophically to the right. In the midst of the second-worst economic crisis in our history we are not arguing about whether to cut the budget, but about how much to cut it. Both the federal government and virtually every state government in America are taking steps that will make the economic situation worse, and President Obama will pay for that at the polls next year. The only question is--how much?

Politically Obama has been rather clever in trying to seize the center over the last few months, and he has won centrist pundits like David Brooks over to his side. If he could secure his grand bargain to include some (although not nearly enough) tax increases and entitlement cuts, he could actually bring the current crisis to an end, and that obviously is what he would like to do. The Republicans, however, are determined not to let him. They will neither give up their policies which will make the economy worse, nor give up their right to blame the President for everything. (This very interesting interview with a Congressional budget staffer strongly suggests that there will be no deal before August 2 for the reasons that I just cited. It's a rare glimpse into the inside of the Republican Party right now and I recommend it very highly.) Whether that works depends on what happens to the economy and I am afraid that it may actually get worse. If it does, we may indeed find ourselves in January 2013 with President Romney or Bachmann or Perry in the White House and Republican majorities in both houses. That will mean the dismantling of the entire modern government of the United States, further economic catastrophe, and a very uncertain political future.

20 comments:

Anonymous said...

For the first two years of the Obama's administration,
his party had majority in both the Congress and
the Senate. Yet, no budget was passed and the
debt ceiling was not increased.

How is that the fault of the Republican party?

David Kaiser said...

Well, your comment is not quite accurate. The Democratic Congresspassed a budget for fiscal 2010, but not for fiscal 2011, which ends in October. And yes, that was their fault, and we are paying for it now.

James50 said...

One of the great evils of the past couple of years is the collapse of the budget process in Congress.

What this leaves us with is budget by crisis. The only thing left is to take the debt limit increase and create budgets within the crisis atmosphere it entails. Its no way to run a railroad.

The country is so polarized that the Democrats in the Senate have decided that no budget is better than having a budget.

It is easy to see the anarchistic tendencies of the Tea Party, but its becoming also possible to see the same in the Senate democrats.

The authoritarian solution will always be a temptation when democracy fails.

Anonymous said...

On an unrelated topic, just thought this might interest you:

Atlanta Schools Created Culture Of Cheating, Fear,
Intimidation

http://www.huffingtonpost.com/2011/07/16/atlanta
-schools-created-c_n_900635.html

Anonymous said...

Lots of typos

steveftw said...

You know, I was thinking just this week about Leader Cantor, and how the famous quote "Beware of Cassius, for he has a lean and hungry look...." is becoming more and more applicable.

Cantor is someone that (IMHO) is driven to power for personal validation, and has positioned himself as the leader of a growing movement of zealots.

There is little in the current political alignment that frightens me more.

Steve

Anonymous said...

Where is the American Constitution Party and candidate when you need them?

galacticsurfer said...

I heard you recnetly saying that you thought the big crisis had not really happened and would not occur, which I thought to be hopeful and optimistic. Now you are making me scared. Crisis dead ahead. In two years you will be writing more concretely of civil war, debt collapse or war with China, etc., whatever way things pan out in the meantime. This irresponsible generation has to have an endgame sometime.

Gerald Meaders said...

Professor

Many thanks for this great summary of the position re the budget, and the political context going forward.

There are so many troublesome issues running around in the current situation, hard to shake a stick at them.

You have hit many, including comparisons and contrasts with Weimar Germany.

all the best,
GM

Anonymous said...

The USA needs a real revamp of it's electorial system . Maybe an MMP system vs First Past the Post ?
Alohamac

David Patin said...

David Brooks has not actually endorsed Obama, he merely wrote that Republicans were nuts. In eight years of the Bush adminstration I can't say I remember Brooks expressing any form of even the most mild or timid critizium. In the face of a possbile Palin Presidency, he was still more critical of Clinton (both Clintons). My prediction, in 2012, Brooks, regardless of who is the Republican candidate will not make any statement that might be interpreted as "vote for the Democratic Party".

David Kaiser said...

To David Patin:

I agree that Brooks is a Republican, but in a column two weeks ago, if I'm not mistaken--possibly last week--he praised Obama for moving so far towards the Republican position, and he compared the behavior of the Republicans now (extreme right) to what he saw as Obama's behavior during his first term (extreme left.) I took it as a guarded endorsement of Obama's leadership in this case.

Anonymous said...

"Recent studies, however, have found the opposite:
Countries that rely primarily on spending cuts tend
to experience less economic pain in the short term.
Moreover, in some cases, the cuts seem to spur
faster growth.

The monetary fund study reported that a 1 percent
fiscal consolidation achieved primarily through tax
increases reduced economic activity by 1.3 percent
over two years, while an identical consolidation
driven primarily by spending cuts reduced activity
by 0.3 percent.

“It’s coming to be accepted wisdom that it’s better
to have spending cuts than tax increases,” said Alan
Auerbach, an economics professor at the University
of California, Berkeley."


Excerpts from the NY Times article at:
http://www.nytimes.com/2011/07/18/us/18econ.
html?_r=1&hpw

Anonymous said...

I am reading a fascinating book titled "Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State" by Gotz Aly. I had never realized before how "socialist" the "National Socialists" really were.

They were quite willing to buy the support of the masses with major transfer payments, which were paid for by a combination of soak-the-rich taxes, confiscation of Jewish assets, and tinkering with exchange rates between the mark and the local currency of occupied regimes.

Despite all of this, the Nazi state was constantly on the verge of near-bankruptcy, and kept having to resort to ever-escalating finance tricks to keep the books balanced.

Recommended reading. You wonder if the US will start down this path at some point...

--Wandering Nomad

Anonymous said...

Many states celebrate surpluses as Congress struggles
with debt

http://www.washingtontimes.com/news/2011/jul/17/
many-states-celebrate-surpluses-as-congress-
strugg/

Anonymous said...

Politicians know they can get all the money they want just be taking it. They just can't help but think they are almighty gods and we are their servants and slaves. Greed has corrupted them beyond all limits.

We live in the double standard society - total retirement and health coverage for the politicians and nothing for the rest of us. As their own boss and accountable to no one they put themselves above everyone else.

We need a system that allows us to vote on the benefits and pay politicians receive. Computers make it possible to collect our votes but no politician will ever allow that to happen.

Bad news is it continues to get worse and those in power grow bolder and bolder. Ever wonder what this is all leading to?

Anonymous said...

As I see it, Dems have only one real choice, unpalatable as it is: Register as Republicans, and vote for Romney in GOP primaries. If Dems reward Obama after he's made a career of betraying every one of their ideals, they may as well fold up their party.

Romney's not a sadistic lunatic -- an unusual thing, in today's Republican Party. He's a completely uninspiring center-right kind of guy -- exactly like Hope'n'Change. In fact, it's a safe bet that Romney wouldn't have stumbled into Obama's idiotic Libya adventure. So there's absolutely nothing to lose if Romney wins in 2012.
-- sglover

Anonymous said...

"During these discussions -- as in my earlier
discussions -- it became evident that the White
House is simply not serious about ending the
spending binge that is destroying jobs and
endangering our children’s future.

A deal was never reached, and was never really
close.

In the end, we couldn’t connect. Not because of
different personalities, but because of different
visions for our country.

The president is emphatic that taxes have to be
raised. As a former small businessman, I know tax
increases destroy jobs.

The president is adamant that we cannot make
fundamental changes to our entitlement programs.
As the father of two daughters, I know these
programs won’t be there for their generation unless
significant action is taken now.

For these reasons, I have decided to end discussions
with the White House and begin conversations with
the leaders of the Senate in an effort to find a path
forward." - John Boehner

Anonymous said...

Debt Ceiling Deadline Might Be August 10, Not August
2: Report

http://www.huffingtonpost.com/2011/07/22/debt-
ceiling-august-10_n_907480.html

Jude Hammerle said...

Dear Dr. Kaiser,

On an unrelated matter (hopefully), happy 97th anniversary of the Austrian ultimatum to Serbia.

With affection and respect,
Jude Hammerle