Governor Gary E. Johnson has been called the next Ron Paul.  He has not yet announced his candidacy for president, but has been widely mentioned as a potential Republican presidential candidate who reflects the Tea Party’s and liberty Republicans’ perspectives.

I recently blogged about Governor Johnson’s background.  He received good grades from the Cato Institute when he was governor and has a taste for honesty that is rare in politics and business today.

Besides serving as governor of New Mexico for two terms, he had built a significant corporation from scratch, which he sold in 1999.  Readers who would like to contribute or help Governor Johnson can find contact information on http://ouramericainitiative.com/. He also has a Facebook group page with 2,000 members.

Langbert: Governor Johnson, it is a privilege to interview you.  I teach business administration at Brooklyn College.  What are three things that you learned from your business career that could be applied to the federal government or that you did apply as governor of New Mexico?

Johnson: I started my company in 1974 and I was the only employee.  In 1994 we had 1,000 employees.  Things that I learned and applied as governor include the importance of hiring good people; cutting mistakes short; and sticking to basic principles.

I’m good at hiring people and have a great track record.  But mistakes are inevitable. When you make a mistake in hiring, you need to cut it short.   As governor, I avoided political appointments as much as possible.  There was one instance where I was forced to make one, and I closely monitored the individual’s performance.

The obvious things are most important. The basic principles:  being on time, sticking to principles, telling people to tell the truth.  As governor, I sat down in cabinet meetings and I told people to tell the truth.

L: One of the realities of large organizations is the use of information to manage conflict and improve social compatibility and coordination.  Managers call these patterns interpersonal skills.  Might not 100% truth telling interfere with interpersonal skills? Of course, if everyone in industry tells the truth, costs and performance will be improved.

J: On the contrary, being honest 100% of the time makes it easy.  If you tell the truth, you don’t have to remember anything.  What you’re talking about is managing conflict.  Someone once said that honesty is where what you say and what you think are the same as what you do.  But of course you can say things that minimize conflict.

L:  To what degree is it possible to cut the federal budget? How would you go about cutting?

J: I faced the same situation in New Mexico as the president faces.  I could have cut big government in New Mexico drastically and no one would have noticed.  (That is, these government employees produce no value for the economy.) The spending train is out of control.  But the Democratic legislature fought me and the courts handed down adverse rulings.  The legislature was 2 to 1 Democratic.  Common sense has gone out the window.  First you have to stop the spending.  The time is ripe for doing so in Washington, and it’s accomplishable.

We are a bankrupt nation.  We’re not taking care of our own house. Unlike the generation before us, interest and principle payments are due now. The enormous budget deficits will lead to inflation and an ever weaker dollar.

L:  What is your position on the bailout and TARP?

J: I would have opposed both.  Government should not have been involved in this. The Paulson connection amounts to this being an inside job.  Why should Goldman and AIG be saved but not Lehman?

L: What is your position on health reform?  How would you recommend the system control health costs?

J:  I would recommend a free market approach to health care reform.  Increase supply through the free market.  Gall Bladders R Us. We ended up with an insurance entitlement rather than health care.  Extending the current approach will lead to shortages and rationing health care.

The same principle applies to education.  We should blow the lid off publicly controlled education.

L: What is your position on the Fed and the gold standard?

J: The Federal Reserve deserves full responsibility for the housing bubble and as well deserves credit for mitigating the bust.  Overriding that, the dollar is now worth a nickel.  I understand the arguments for a free market in money and I support them.  I shy away from the phrase “regulate the Fed” because I do not want Barney Frank deciding monetary policy.  I wouldn’t say the Fed needs to be abolished.  I understand the argument for a gold standard, though.  The US government should be pursuing a strong dollar policy, which the Fed hasn’t done.

L: What is your position on the Middle East and Israel?

J: I’ve been to Israel and the Golan Heights and I understand the threats Israel faces from outside and within. I can’t summarize my position as the issues are too complex. I do believe in a strong national defense.  But our security is not threatened by Iraq and Afghanistan.

L: Where do you stand on Iraq and Afghanistan?

J: I believe we should pull out of both and return our focus to fighting terrorism. The focus needs to be protecting America. I’m not sure if that is still the mission in Iraq and Afghanistan. I was surprised that Obama increased US presence in Afghanistan.

L: What about Social Security reform?

J:  Social Security is flawed.  When it was brought into existence the life expectancy was  55. Benefits started at 65.  Now, life expectancy is 75, and benefits start at about the same age. It’s a Ponzi scheme.  A combination of benefit reduction and/or privatization are necessary.  At least part of Social Security should include private accounts that are counted in your estate.

L: What do you think of making Social Security voluntary and converting it into a defined contribution plan?

J: That would make it viable.

L: What is your position on states’ rights and state sovereignty?

J: The states are 50 laboratories of democracy.  The burden that the federal government places on the states is outrageous.  The same is true of health care.  A return to federalism is needed.

L: Thank you, Governor.  I am certain that liberty Republicans will be interested in learning more about your ideas.

Walter Weyl was one of the three founders of the New Republic, all of whom were pivotal in the creation of so-called “state activist liberalism”, an Orwellian phrase if there ever was one. Weyl was a professor at the Wharton School of Business and advocate of socialism. His book, New Democracy, is not as popular today as Herbert Croly’s and Walter Lippmann’s, his partners’. But Weyl’s book is the most prophetic and forthright. In it he argues (unlike Croly and Lippmann who were not so explicit) that Progressivism (the ideology of Theodore Roosevelt -R- and Woodrow Wilson -D-) would lead to socialism.

The culmination of Weyl’s ideas has occurred. The close linkage between the Progressivism of the Rockefeller Republicans (of whom Theodore Roosevelt was the first) and the social democracy of the Democrats (that traces back to Franklin Roosevelt and William Jennings Bryan) is now evident. With the bailout we see that both Progressivism and social democracy are, as Weyl knew and advocated, complementary versions of socialism.  The triumph of Progressivism was, as Gabriel Kolko put it, the triumph of conservatism.

One side effect of this is we now know what to call them. They are not  “liberals”, which is what libertarians should be called. They are not “Progressives” because no ideology is more conservative than socialism.  Nor are they “social democrats” because they do not believe in democracy, preferring pandering to Wall Street and other special interests, especially public sector unions, failed manufacturing firms and banks to democracy.  Rather, they are SOCIALISTS.  I therefore say to you now:

KNOW YE BY THESE PRESENTS THAT HENCEFORTH I, MITCHELL LANGBERT, REFUSE TO CALL  ROCKEFELLER REPUBLICANS AND DEMOCRATS BY ANY OTHER THAN THEIR TRUE NAME: SOCIALISTS.

A second side effect is that there is an important struggle ahead: to retake control of the GOP.  In the early twentieth century the GOP was the party of Progressivism.  William Howard Taft was what today would be called a conservative, and Theodore Roosevelt bolted the GOP to start the Progressive or Bull Moose Party by which time he was aggressively socialist.  William Jennings Bryan had captured the Democrats in 1896 on behalf of populism, and these ideas found final articulation not in the Progressivism of Wilson, who was for most of his life a Bourbon or laissez faire Democrat, but of Franklin D. Roosevelt. The fact is that most of FDR’s ideas had already been advocated by TR in 1912.

The GOP never recovered from the harm that TR did. Subsequent presidents, Harding and Coolidge, were not ideologically astute and did absolutely nothing to alter the Progressive institutions that Roosevelt and Wilson had initiated. Hoover was a Progressive from the time he had worked for Woodrow Wilson as his food industry price fixing Czar during World War I.  The New Deal was just a continuation of Hoover’s failed Progressive ideas such as using public works to cure unemployment. Eisenhower did nothing to reduce government and added his share, such as the Interstates.  Goldwater and Reagan were a departure, but George W. Bush was part of the Progressive tradition, and waited until several years into his office to make it clear.

We are left with a situation where socialist extremists are in control of both parties. The pro-bailout Republicans of McCain and Bush and the socialist Democrats constitute a twin-headed hydra.  We can win, though, because a healthy 30 percent of America still favors freedom.  If we align ourselves with various other interests, such as the religious,  we can win.

But there is a big fight ahead. Liberty Republicans need to think about how to convince the Rockefeller Republicans to move to their true home–the Democratic Party.  Yes, let’s get rid of them.  They predominate in the unwinnable Blue states anyway, and the public will not care if oil, health care and insurance executives align themselves with the party of greed, the Democrats.

In any case, we have a good argument:  the pro bailout Republicans lost because of their ideas. They have failed. They should step aside.

Mitchell Langbert blogs at http://www.mitchell-langbert.blogspot.com.

Recently, Newsweek featured a headline claiming that “We Are All Socialists Now.” Perhaps it should have featured a picture of Demetrius Poliorcetes on the cover instead. The history of the ancient Hellenistic cities in what is now Arabia and Turkey might provide more useful knowledge about what is happening in the United States than one can find in newspapers, magazines or on television.

Michael Rostovtzeff was a Ukrainian-born archaeologist and professor of ancient history at Yale beginning in 1925. He died in 1952. He was among the first historians to study the ancient world’s economies and to emphasize the role of capitalism in the rise and decline of ancient societies.

I have just started reading Rostovtzeff’s monumental Social and Economic History of the Roman Empire*, one of a number of massive books that he authored. The text runs to 488 pages but there are in addition more than 200 pages of footnotes. Friends of liberty will do well to consider Rostovtzeff’s work.

He starts the book by discussing the history of Greece and the Hellenistic city states that Greeks founded in what is now Arabia and Turkey. He notes that “class warfare” was common in classical Greece proper. “This class-war made the growth and development of a sound capitalistic system very difficult.” In classical Greece there were widespread movements for redistribution of land and abolition of debts. The problem was so widespread that Athens and Itana in Crete required citizens to swear that they would not put redistribution of land and abolition of debts to the vote. It seems that ACORN has precedents.

Rostovtzeff writes:

“Revolution and reaction followed each other with brief delays, and were marked by wholesale slaughter or expulsion of the best citizens…What was lost by the Greek cities of the European mainland and most of the islands was gained by the Hellenistic monarchies and more especially by the Greek cities of the East.”

Unlike the democracies in Greece proper, the eastern Hellenistic kings of the fourth and third centuries BC were anti-libertarian capitalists, much like more recent rulers of Chile and post-Mao China. “The result was that every attempt at a social revolution within their gates was stopped by the strong hand of the Hellenistic monarchs, and that the cities were very rarely involved in external warfare.”

The kings’ anti-libertarian suppression of revolution had a libertarian effect, at least temporarily. “The accumulation of capital and the introduction of improved methods in trade and industry proceeded more freely and successfully in the East than in the cities of Greece proper. Hence the commercial capitalism of the Greek cities of the fourth century attained an ever higher development, which brought the Hellenistic states very near to the stage of industrial capitalism that characterizes the economic history of Europe in the nineteenth and twentieth centuries.”

That is mind blowing. In the fourth and third centuries BC Greeks in Asia Minor were attaining 19th century levels of industrialization? In other words, from the year 300 BC until 1900 virtually no consistent economic progress was made? And how easy might it be to revert to the decline that followed the fall of the Roman Empire roughly 1500 years ago? True, these societies depended on slave labour. But recall that the American economy also so depended until 1862.

Rostovtzeff notes that the Greek cities not only had a large internal market and a large, competitive trade, but also:

“They gradually improved the technique of agricultural and of industrial production with the aid of pure and applied science…and they employed both in agriculture (including cattle-breeding) and in industry the methods of pure capitalistic economy based on slave-labour. They introduced for the first time a mass production of goods for an indefinite market. They developed banking and credit and succeeded in creating not only general rules for maritime commerce…but also a kind of common civil law, which was valid all over the Hellenistic world. The same tendency towards unification may be noticed in attempts to stabilize the currency, or at least to establish stable relations between the coins of the various independent trading states.”

These impressive advances, a globalization that occurred nearly 2,500 years ago, very quickly “stunted” and then was “atrophied” by “constant warfare which raged almost without interruption all over the Hellenistic world.” It didn’t take long for the military-industrial complex to assert itself.  ”The wars forced the Hellenistic states, both great and small, to concentrate their efforts on military preparations, on building up the largest possible armies and navies, on inventing new devices in military engineering, and thus wasting enormous sums of money as, for instance, in the case of the siege of Rhodes by Demetrius Poliorcetes.”

Rostovtzeff notes that this led to:

“Nationalization of both production and exchange, which was carried out in some, at least, of the Hellenistic monarchies, especially Egypt. By nationalization I mean the concentration of the management of the most essential branches of economic activity in the hands of the state, that is to say, of the king and his officials. Profitable at first for the state, this system gradually led to dishonesty and lawlessness on the part of the officials and to the almost complete elimination of competition and of the free play of the individual energy on the part of the population.

“Hand in hand with this tendency towards state control went the minute elaboration of a highly refined system of taxation, which affected every side of economic life. It was based on the experience of the Oriental monarchies, but it went much farther both in inventing new taxable objects and in improving the mode of collecting the taxes. The burden of taxation lay heavily on the population of the Hellenistic world…

“This disastrous economic system of the Hellenistic monarchies produced ever-growing discontent among the masses of the natives. From the end of the third century onwards the native population of Egypt, for example, rose repeatedly against its foreign oppressors…”

Naturally, the warfare and economic dislocations due to taxes and socialism in the Greek world opened the city gates to a rising new republic: Rome. Might the United States’ ever-expanding government spending; subsidization of corrupt and inefficient financial institutions and corporations; and its military-industrial complex open the door to the ascendancy of a new power, this time from the east?

*All quotes in this blog are taken from chapter 1, “Italy and the Civil War”.

Mitchell Langbert can be visited at http://www.mitchell-langbert.blogspot.com.

As a result of organized Democrat opposition in key state legislatures, the state sovereignty movement is probably not going to be able to sweep the nation or even produce passed sovereignty resolutions in a majority of the states. Yet there have been some important achievements that may be enough to be called a limited victory, though the victories may never be acknowledged by the media and the current administration.

In one of the biggest developments for the state sovereignty effort, on Thursday Governor Rick Perry of Texas came out with a wholehearted endorsement of not only Texas House Representative Brandon Creighton’s state sovereignty resolution (HCR 50), but in support of all of the states whose legislatures are seeking to assert their rights to self-governance under the 10th Amendment to the Constitution.

I’ve never been a big fan of Rick Perry, though I’ve always admired his lovely hair. He’s too much in the pocket of the religious right and has too often been wrong on key issues vital to the future of Texas like the legalization of gambling. Yet on this issue Perry has consistently taken the lead, championing the autonomy of state governments, by rejecting federal stimulus money for unemployment and the strings which came with it, and now by supporting legislative efforts to assert 10th Amendment rights.

The bold stand which Perry and a few other governors like Alaska’s Sarah Palin, Mississippi’s Haley Barbour, and South Carolina’s Mark Sanford have taken against federal intrusion into the rights of state governments and the citizens of those states and the efforts of more than 30 state legislatures which have tried to pass — with mixed success — resolutions asserting state sovereignty under the 10th Amendment have offered a small ray of hope for better government at a time when the administration in Washington seems to be running completely out of control.

As the federal government spends us into generations of inconceivable debt, responsible state governments are trying to insulate themselves, protect their citizens and govern with fiscal common sense. Perry summed up what has become the common concern of people across the nation when he said:

“I believe that our federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state. That is why I am here today to express my unwavering support for efforts all across our country to reaffirm the states’ rights affirmed by the Tenth Amendment to the U.S. Constitution. I believe that returning to the letter and spirit of the U.S. Constitution and its essential 10th Amendment will free our state from undue regulations, and ultimately strengthen our Union.”

Meanwhile state sovereignty resolutions have been moving forward in the state legislatures. In Oklahoma, Alaska, South Dakota, Indiana and most recently this week in Idaho and North Dakota, sovereignty bills have passed in both houses. But New Mexico, Arkansas and New Hampshire sovereignty bills were either killed in committee or voted down along partisan lines, and that’s likely to happen in many more states in the next couple of months. In other states bills just seem not to be moving forward and may not go anywhere because of Democrat opposition.

Even if the state sovereignty movement has not yet achieved enough success to be called a revolution, with six state legislatures and a number of prominent governors committed to sending a message to Washington, it is bound to have some impact. The influence has already been felt among Republican Senators and Representatives, who have started to realize that keeping their jobs means not waffling on fiscal issues. What remains to be seen is what governors with an eye on the presidency in 2012 like Sanford and Perry are banking on — whether this movement will translate into votes in the 2010 Congressional elections, building towards an even bigger shakeup in 2012.

Perhaps even more importantly, it shows that at least on the state level, some legislators and governors have woken up to the fact that the people are fed up with the excesses of the federal government and the mess they have created and are screaming for real grassroots change.

Not just a change of faces in the White House, but fundamental changes in national policy and a transfer of power away from bureaucrats and politicians and back to the people. We’re tired of seeing our rights, our money and our futures squandered and want to be back in control, through the ballot, through protests and through using the power of state governments under the Constitution to hold the federal government accountable and bring an end to its abuses of power.

All across the country on Tax Day, Republican Liberty Caucus members will be attending Tea Party Rallies to express dissent to Members of Congress and local officials and encourage sensible economic reforms that will enhance America’s struggling economy.

To see a listing of the Tea Parties in your state, click here. On February 27th, an estimated 30,000 Americans took to the street in 40+ cities across the country in the first nationwide “Tea Party” protest.

So why rally? What is the point? Several reasons: 1) There has not been ENOUGH dissent in this country and the “go along, get along” attitude has plagued us for many years; 2) folks are FINALLY starting to wake up, and public rallies engage average citizens in issues; 3) public officials pay attention to large groups of taxpayers; 4) it provides a coalition-building opportunity with like-minded groups; and 5) it allows the RLC to gain visibility.

The Tea Party movement has been organized to protest the Bailouts approved by Congress, the massive federal debt that continues to grow daily, and the increasing burden on average taxpayers. There is no better day to express your distrust of government than April 15 — Tax Day.

In conjunction with the Spirit of the Founders, RLC members are organizing and speaking at Taxpayer Tea Parties throughout the country. For example, in Melbourne, Florida, RLC East Central Florida Coordinator Matthew D. Nye has organized the Brevard Tea Party.

At its website, Nye features a video from a savvy young lady who discusses the relevance of Ayn Rand’s novel Atlas Shrugged to the current state of the economy. She says:

“The similarities [in Atlas Shrugged compared to] today are striking. In Atlas, we see a world crumbling under the weight of government interventions and regulations. The economy is ground to a halt. Each day, more and more businesses are shutting their doors. The government blames greed and the free market and frantically imposes more government control, but the crisis only deepens. Sound familiar?”

Atlas is currently the Amazon.com “Best Seller” in the fiction category, but it’s RLC member Nye who is educating taxpayers in Brevard County, Florida.

According to the newly chartered Republican Liberty Caucus of Alabama, “Quite a few RLC members are active in the planning of Tea Party rallies to be held across Alabama (and the nation) on April 15th.”  Similarly, RLC Tennessee Officers Gregg Juster, Bryan Haddock, and Joe Dumas are assisting with the Tea Party organizing in Chattanooga.

In Arizona, RLC member Tom Jenney will be a featured speaker, along with RLC State Representative Frank Antenori, at the Tucson Tea Party. Members of the RLC of Pima County, including organize Ken Rineer, are active participants in the Tucson Tea Party.

In northern Virginia, RLC Secretary Aaron Biterman will be addressing the crowd at the Tea Party in Reston, an outer-Beltway suburb of the nation’s capital. Biterman will be speaking about continuing the “Spirit of the Revolution” in 2009 and the importance of eliminating the federal income tax.

These are just some of the RLC members and activists who have taken an active role in the Tea Party Movement.  Look for a full report post-April 15.

In addition to attending your local Tea Party, the RLC is encouraging its members to take the following five steps to promote local Tea Parties:

• Make signs with legible slogans that send a clear message to the public and the media;
• Call local talk radio hosts to ask them to announce the location, date, and time of your local Tea Party on the air for a few days leading up to the protest;
• Send a letter to the editor of your local newspaper announcing the rally;
• Write a press release and e-mail, mail and fax copies to the local TV stations, radio stations and newspapers; and
• Call the reporters that cover local events or politics and leave messages on their voice mail.

As more governors declare their opposition to the Stimulus Bill — which is now estimated to include more than $1 trillion in unfunded mandates for the states above and beyond the initial $800 billion cost — more and more state legislators across the nation have been introducing bills to assert state sovereignty under the 10th Amendment in an effort to assert the rights of their citizens and the authority of state governments against unwarranted interference by the federal government.

Louisiana Governor Bobby Jindal, Mississippi Governor Haley Barbour and Idaho Governor Butch Otter stated their support for the position against the stimulus taken by Texas Governor Rick Perry and South Carolina Governor Mark Sanford this week. Governor Sarah Palin of Alaska has been speaking publicly against the bill and when it passed her office issued a statement praising Alaska’s congressional delegation for voting against it:

“Congressman Young and Senator Murkowski did their best to achieve the right balance in the bill, but in the end the majority allowed the spending to balloon and encompass support for programs that don’t respond to the problem at hand.”

Meanwhile, Governor Palin made the bizarrely optimistic suggestion that President Obama should Veto the bill to five lawmakers a chance to at least read the bill and specifically citing the problem for the states in the huge amount of unfunded mandates in the bill.

The push for state sovereignty laws has really gone nationwide. Texas has gotten on board with a bill submitted this week with six sponsors. It is basically the same as the Oklahoma resolution rather than the more radical New Hampshire resolution, which gives it a better chance of passage. Texas is a big state, and having it in the fight adds a lot of serious weight.

Although it is not yet confirmed on their legislature’s website, the story is circulating that Tennessee is the first state to pass a sovereignty resolution through both of its legislative houses, in only 2 days from its introduction on Wednesday. Their version is a non-binding resolution which doesn’t require the governor’s signature or have the force of law, but it is a significant statement nonetheless.

In Pennsylvania, State Representative Sam Rohrer is leading the charge, and has made a very impassioned video statement which lays out exactly what the problem is and urges other states to join him in reasserting their sovereignty and rejecting federal mandates, stressing the very real concern that the spendthrift federal government will take the fiscally responsible states down with them.

There’s also news from Oklahoma, where a quick phonecall to State Representative Charles Key confirms that the sovereignty resolution which he got through the house last year was approved unanimously by the rules committee and on Wednesday was passed by the Oklahoma House by a 83-13 majority and may be voted on by the state Senate as early as next week, with high hopes of passage.

Missouri, as always, is marching to its own radically conservative drummer, with a state sovereignty bill up for consideration which is unique in that it specifically takes exception to the pro-abortion proposed federal Freedom of Choice law. This is conceptually similar to the bills being considered in Indiana, Wyoming and Oregon which reassert state sovereignty with a special emphasis on gun owners rights in response to a bill currently being considered in the House of Representatives to require licensing of all firearms nationwide.

Because of these articles a lot of concerned citizens are contacting me from various different states about what their states are doing. Sources in Maine inform me that they have also had a sovereignty bill proposed, but because of the structure of their legislative session it likely won’t even be looked at for months. A sovereignty bill was introduced in Minnesota on Thursday as HF997. Arkansas joined in with a bill in its state House of Representatives on Friday morning as well.

Some states have yet to get state legislators on board and are trying alternative methods. In Florida there is a pettition which will be submitted to the state legislature, which may not sit terribly well will stimulus-embracing Governor Charlie Crist. In Massachusets under a provision of their state constitution any citizen can request that a legislator submit a bill on their behalf. Ron Bokleman is struggling to get his bill, which is a version of the New Hampshire bill, past bureaucratic red tape so that it will actually be considered by the legislature. One correspondent also pointed out that a number of states passed or at least considered sovereignty bills in the past, starting with the Kentucky and Virginia Resolutions authored by Madison and Jefferson back in 1799, but with some much more recent, like Utah’s 1995 bill which passed their House, a reminder that concern over unfunded mandates isn’t new, though it’s growing ever more critical.

It now looks as if at least half the states will have some sort of sovereignty bill up for consideration this year. Combine that with governors and legislators who are worried about how they’ll ever be able to pay for the massive unfunded mandates included in the so-called stimulus bill, and you have a volatile rift developing between the relatively fiscally responsible and citizen-friendly state governments and the incredibly fiscally irresponsible and increasingly autocratic government in Washington, DC. If we stand together and make our voices heard, we can stop further federal stimulus and bailout spending. If we can reassert control by 2010 we can stop at least two thirds of the current stimulus money from ever being spent. It’s time to storm the gates of power and let our elected leaders know that we do not want to see our country bankrupted and driven into socialism out of desperation and expediency.

In a short and insightful article on Blogcritics, Kenn Jacobine has uncovered something which the media and all the blog pundits seem to have missed. There is a report from economists led by Timothy Kehoe which was commissioned by the Federal Reserve and uses solid historical research to show very convincingly that government overreaction with things like bailouts and massive stimulus spending is directly responsible for turning recessions into depressions.

Working with examples going back to the 1980s these economists show how countries like Mexico and Japan which followed the Keynesian model and responded to recessions with the same kind of panic spending our government is currently engaging in, prolonged recessions and turned them in to long, slow economic depressions. In contrast countries like Chile and Finland which responded in ways which were harsher in the short term but more fiscally responsible, which shut down businesses and banks and let people go bankrupt, ended up recovering quickly and having much stronger long-term economies.

That this study could have been commissioned and published by the Federal Reserve and be for sale on their website while they utterly ignore its findings and continue to advise more deficit spending and bailouts is the height of stupidity and incompetence. To remind them of this, the authors have just released a short version of their report which is a must read for anyone concerned about our economic future. Their conclusion really says it all:

“Studying the experience of countries that have experienced great depressions during the twentieth century teaches us that massive public interventions in the economy to maintain employment and investment during a financial crisis can, if they distort incentives enough, lead to a great depression.”

That we should have spent trillions and are preparing to spend trillions more on a policy which history demonstrates is dead wrong, is inexcusable and unforgivable.

In the past I’ve been a supporter of the moderate element in the Republican Party. I even blog occasionally for the Republican Leadership Council. They’re the heirs of Abraham Lincoln and Teddy Roosevelt and their socially liberal and fiscally conservative positions are at the heart of Republican tradition. I lean more libertarian, but I’ve always seen Republican moderates as natural allies with a lot in common with the libertarian wing of the party.

When there has been disagreement between moderate Republicans and the more ideologically extreme wings of the party, the main thing which has redeemed the moderates in the eyes of doubters and justified party unity is that they have remembered the importance of fiscal responsibility, an essential Republican value which some other factions within the party seem to have lost track of in recent years.

But now, faced with an unprecedented economic crisis and a Democrat-dominated Congress running out of control, it looks like some of the moderates in the GOP are going to fail the party and fail the country by supporting the ill-conceived “stimulus” bill in some sort of misguided fit of irrational bipartisanship.

The latest news reports suggest that Senators Arlen Specter (R-PA), Olympia Snowe (R-ME), and Susan Collins (R-ME) may vote with the Democrats to give them the 60 votes they need in the Senate to pass this massive spending package. Collins argues that their cooperation is justified because of $110 billion in cuts which have brought the cost of the Senate version of the bill back down to about the $800 billion total of the House version.

The problem is that, despite the name which has been attached to it in an effort to provide positive spin, this is anything but a “stimulus” bill. The bill creates far fewer jobs than has been claimed, at a ridiculous cost of hundreds of thousands of dollars per possible job, and most of those jobs are short-term with no lasting positive impact. The tax cuts it contains are misdirected and will have very limited stimulus value. There’s still a great deal of pork and earmarked spending on pet projects. But that’s really all beside the point.

The country is in the middle of a fiscal crisis which was to a large extent precipitated by overspending and over extension of credit, not just by the big banks but by the federal government. To spend almost a trillion dollars which the government does not have does nothing but compound the fiscal irresponsibility which created the crisis in the first place. It will further devalue the dollar, increase inflation and likely create more business failures and greater unemployment.

Last week Douglas Elmendorf, Director of the non-partisan Congressional Budget Office, made observations on the likely effects of the bill. He suggests that the beneficial effects of the bill will wear off quickly after about two years, and that the long term effect will be a reduction in available capital and ultimately a long-term reduction in GDP of between .1 and .3 percent. Elmendorf’s concerns are mild compared to those of prominent economists on both the political left and right who are increasingly unified in opposition to the bill. Over 200 of them took out an ad opposing it in the New York Times, saying that:

“It is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”

Relatively moderate Harvard economist Martin Feldstein who had initially supported the bill came out unequivocally against it in an editorial where he calls it “An $800 Billion Mistake” and specifically faults it for gross deficit spending with too little stimulus. In an article in the Wall Street Journal economists Alberto Alesina and Luigi Zingales sum up the problem with the bill succinctly: “Tax cuts have a much better effect on job creation than highway rehabilitation.”

Given all of this, it would be a terrible mistake for Republican moderates to adopt a misguided “go along to get along” attitude and vote with the Democrats when standing firm on their belief in fiscal responsibility might be just what’s needed to find a better solution. It’s quite likely that doing nothing at all would be better than this bill. But at the very least, Republicans in the Senate ought to hold out for a bill which has less unnecessary spending and more genuine stimulus in the form of tax cuts for individuals and businesses.

I’ve always believed that moderate Republicans had remarkably good sense and the best interests of the people at heart. Like many others in the party, I’ve put my trust in them over the years to balance out the voices of extremism because they could be counted on when it really mattered.

But if these three are going to betray the fiscally responsible traditions of the GOP and vote to support this disastrous bill, then they have clearly lost their way and will have failed as Republicans and as stewards of the best interests of their constituents and the nation.

You may want to contact these Senators and encourage them to develop some spine and remember their values. You can e-mail them with these links: Specter, Snowe, Collins. These are alternate links because their Senate contact pages are being crashed by the volume of emails.

The below special column is authored by RLC endorsed candidate for Congress, Steve Beren of Seattle. Steve has run twice for Congress against Jim McDermott, one of the most liberal members of Congress. He has given us permission to reprint his article below.

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“Stimulus” – Wasteful, harmful, job-killing, and a threat to liberty
by Steve Beren

Eric Earling of SoundPolitics.com, under the heading “Hope-n-Change,” cites a Washington Post report that “[s]ome Democratic leaders … said … they will seek to cut provisions that would not provide an immediate boost to the economy.”

If we take this phrase literally and examine it carefully, the “stimulus” bill is composed of provisions that WOULD provide an immediate boost to the economy, and that WOULD NOT provide an IMMEDIATE boost to the economy (implying that those provisions would provide a boost to the economy a little later on).

Like last fall’s $700 billion “bailout,” this $900 billion “stimulus” is wasteful spending, counter-productive, harmful to the economy, restrictive of liberty, and a job-killer.

Whether it goes by the name of “stimulus,” or “bailout,” or “rescue,” or “recovery,” the recent and proposed measures are dangerous to our prosperity and to our liberty.

The sheer size of these wasteful measures attempt to soften up the American people to accept further expenditures of billions and trillions.

Sen. Patty Murray (D-WA) is proposing a $25 billion INCREASE in the “stimulus,” while just one year ago that amount — $25 billion — would have been considered outrageous as a stand-alone proposal. Now, it is just a small fraction of a much bigger, much more wasteful, much more harmful package.

The increased deficit and increased taxes that will result are bad enough, but the threat to liberty is the worst danger of all.

The government does not just expand in its spending — it also expands in its scope of control, regulation, and authority over our lives.

Increasingly, the Obama administration will seek to tie “bailout money” and “stimulus money” to rules and regulations about how businesses should be run – salaries, office renovation, travel, expansion, etc.

Don’t bet on government control over a company’s spending to be limited just to the top executives. The (socialist) principle is the same — what’s to stop Obama from asking for controls not just on pay to executives, but also to secretaries, receptionists, bookkeepers, and other staff?

Also, don’t bet on government interference and dictates to companies to be limited to companies that receive so-called “bailout” money. The (socialist) principle is the same – such government control and mandates could also be applied to companies that receive so-called “stimulus” money and/or receive tax cuts as part of the “stimulus” package.

Considering the vast reach of the “stimulus” proposal, and considering how many types of industries it purports to “help,” this is a dangerous threat to liberty indeed.

This understanding is the substantive basis and rationale for Senators to oppose the stimulus bill.

Also, before we get too carried away in thinking this bill consists of “provisions” that will benefit the economy “immediately” versus “provisions” that will benefit the economy “later” …

Kirby Wilbur on KVI this morning cited a Wall Street Journal article by Sen. Tom Coburn (R-OK), in which Coburn evidently states that at least 90% of the bill is not a stimulus at all. Not beneficial at all. Not immediately, not later.

If Coburn is right, than something less than 10% of the bill could potentially (theoretically) help the economy. That, of course, is if we just assume the Obama-Pelosi-Reid promises and projections are definitely true and trustworthy.

Wisconsin State Representative Steve Nass, who was endorsed by the RLC in 2006, has a great column at WisOpinion.com about the proposed economic stimulus package.

Says Nass:

It is true that the country faces the greatest economic challenge in nearly 100 years. It is true that greed and wasteful government spending are fundamental reasons fueling the financial inferno.

If you believe that greed is a serious part of the problem, do you then offer solutions that reward both individual and corporate greed?

If you believe wasteful government spending helped sap the strength of the economy, do you then offer proposals that will require some of the largest tax increases in U.S. and world history?

Read more.