My Two Cents

I'm hard at work on a common-law conservative perspective on the current financial crisis. But before I'm done with it, I thought I'd chime in with two thoughts.

1. The "bailout" plan is something that in general has to happen. It is not unthinkable that the state enters the markets and buys and sells on the markets. After all, that is what the Treasury does every day when it sells bonds. That is also what the Federal Reserve does every day when it buys bonds. Andy Kessler's article in yesterday's Wall Street Journal provides the basic framework for understanding the way this would work. The question about what the government would do with the proceeds is the key here. A separate agency should be established with its own budget, insulated from the federal budget, so that the monies do not disappear a la the Social Security "trust fund." Those monies should rather be rebated to the taxpayers, from start to finish completely separate from the federal budget.
2. There can never again be a socialist-paradise inspired venture to set aside market discipline in the name of social justice or equality. This is what by now has nearly destroyed our financial system. Our hot-shot financial experts thought they had developed a new angle on risk so that non-creditworthy borrowers could be covered by creditworthy borrowers in super-sophisticated loan packages which in turn could serve as collateral for new lending. That they were allowed to do this was the hook by which the government got them to cooperate with its push for "affordable housing." The linchpin for this rickety setup was Fannie Mae and Freddy Mac. This we all now know. We also return to the basic understanding of credit. Credit depends on faith, on trust. This contagion of bad risk mixed with good has done for collateral what bad currency did for good currency back in the old days of metallic coins. There was a term for this phenomenon: Gresham's Law (coined by Henry Dunning Macleod): bad currency drives out good. Perhaps we need a new law (Alvarado's law?): bad risk drives out good. This packaging of risk has backfired bigtime, and the guys who developed the schemes, with their computerized risk calibrations, have proven once again that basic laws of economics cannot be repealed. Bad credit cannot be lifted by good, good credit will only be destroyed by bad.

God Does Answer Prayer

A couple of posts back, I asked the rhetorical question, "Does God answer prayer?"

Lee Culpepper answers:

Palin is an answered prayer. She is exactly what America and John McCain needed. She is a proven leader. And leaders have an obligation to inspire others to do what is in the nation’s best interest.

That question is more than rhetorical. It is a wonder-filled acknowledgement that God is in control. Sarah Palin=God's avenging angel.

The text for this morning's sermon was Psalm 124:

If it had not been the LORD who was on our side, when men rose up against us
Then they had swallowed us up quick, when their wrath was kindled against us
Then the waters had overwhelmed us, the stream had gone over our soul
Then the proud waters had gone over our soul.
Blessed be the LORD, who
hath not given us as a prey to their teeth.
Our soul is escaped as a bird
out of the snare of the fowlers
the snare is broken, and we are escaped.
Our help is in the name of the LORD, who made heaven and earth.

I would be remiss not to acknowledge the events of the past week as an answer to fervent prayer: for they were.

She Did It

Sarah Palin has embarked on her journey toward restoring representation to its proper meaning. Her acceptance speech at the Republican National Convention incorporated red meat in this regard. To wit:

I’m not a member of the permanent political establishment. And I’ve learned quickly, these past few days, that if you’re not a member in good standing of the Washington elite, then some in the media consider a candidate unqualified for that reason alone. But here’s a little news flash for all those reporters and commentators: I’m not going to Washington to seek their good opinion - I’m going to Washington to serve the people of this country. Americans expect us to go to Washington for the right reasons, and not just to mingle with the right people.

This is the proper function of representation: to channel the influence of the people into the state, not to channel the influence of the elite to the people. The latter is what the political process has become, and it takes gutsy, brilliant, compelling persons like Sarah Palin to divert the flow back to its proper course.

Palin's Qualifications

In one area at least, Sarah Palin will be a great improvement: she is definitely a better shot than Dick Cheney.

All-American Girl

She even anchored the sports news in Anchorage.

Sarah Palin seems to be the conservative dream woman, straight out of Proverbs ch. 31. And from everything I´ve seen and heard, this may be correct. If so, the threat of a Democrat tsunami in November has been overthrown in one fell swoop. In one of my previous posts, I gloomily reflected on the condition of politics in America today. The Democrats are bent on destroying the traditional understanding of law and liberty, while the Republicans are too intent on retaining power to make a stand against that threat. Or so it seemed, at least in the case of the Republicans. For the past two months or so, the McCain campaign has started to make an effective case against Obama and the Democrats, especially in the areas of foreign policy (Russian invasion of Georgia) and oil (drill, drill, drill). But by bringing Palin onto the ticket, McCain solidifies a common-sense approach to energy policy while also bringing front and center the theme of confronting the elites in power rather than mollifying them. In short, restoring representation to its proper direction, from the people to the government rather than the reverse.

If this truly is the case, August 29th -- the day Sarah Palin was nominated vice president -- may well become a national holiday of sorts. If she makes good on her promise, and the ticket wins in November, she will be first in line to be the next President of the United States. If she does not get corrupted by Washington politics -- a big if -- and brings that Northwest no-nonsense grit to the table day in and day out, they may end up erecting a monument to her some day.

Does God answer prayer?

Read Kudlow

Just a quick note to my army of readers (!): if you don't read Larry Kudlow's blog, you should. His latest entry on the mortgage bailout and prospects for a "drill bill" is excellent. Check it out.

Popular Sovereignty as Pitfall

As some of you are aware of, I am working on (in fact, nearing completion of: word count is now approaching 100,000) the constitutional law volume of Stahl's Philosophy of Law. Just this morning I translated a section which, at first glance, seems "over the top" in terms of its utter rejection of the concept of popular sovereignty. But the more I think about it, in the light of my earlier posts regarding the machinery of manipulation, the more I can see the truth in what Stahl is arguing. And that truth is this: that popular sovereignty severed from a confession of faith and subjection to Almighty God is the most powerful means the machinery of manipulation has to work its own will. The version of popular sovereignty Stahl argues against is the version put forward by Rousseau and the French Revolutionaries -- but how much of it was likewise in the minds of men such as Thomas Jefferson? America has founding fathers such as John Adams, James Madison, and Alexander Hamilton (not to mention the de facto supreme importance of George Washington) to thank that popular sovereignty did not take the turn there that it did in France. But how much of the theory was to thank for that, and how much was simple stubborn adherence to received institutions, even in the face of theory? And how much of that theory has since been used to corrupt and undermine the institutions making for America's greatness? That is the question facing Christians who wish to be faithful to the republican tradition not as shibboleth but as historical artifact from God's hand, and therefore answerable to Him.

Here is the relevant text (State Law and the Doctrine of State, §. 147):

As is the case with every untruth, the doctrine of popular sovereignty is not even in agreement with itself, not even capable of implementation in terms of its own principle and standard. It is already an impossibility to determine the will of the people. What is to be recognized: the decisions of the chamber, the declarations of journals and associations, or the shock of insurrection? Even with the general acclamation of the primeval assembly, in view of the fact that its composition changes through death and accession to voting age up until a result is determined, the end result will no longer be the will of the now-existing people. There is further the undeniable consequence: when the popular majority is not bound to the given ruling authority and fundamental law, the minority and the individual is no longer bound to the popular majority. For then the law of majority vote is itself a sort of fundamental law. And thus it is not the will of the people but the will of each party and every individual that is sovereign. In the end, it is obscurity from the start regarding the concept of sovereignty upon which this doctrine is constructed.

For sovereignty is precisely the state power in its center, by which it in uniform manner joins, supervises, leads the functions which unfold in manifold directions; it cannot (as Rousseau asserts) be separated from government and exist apart from it, but is itself the innermost moving power of government. Therefore only a self-conscious being unified in itself can be sovereign, and therefore only a personality can be so in the fullest sense. Even the popular assembly in the republic has the capacity for sovereignty only through the artificial imitation of this unity by means of ordered forms and through a supplementation by the natural personality of the magistracy (§. 130).

But that the collective mass of individuals, thus the people, precisely apart from the unity of its constitutional order, according to which it beforehand is subject to authorities, is to be sovereign, is factually impossible. This is why with the doctrine of popular sovereignty one understands sovereignty not as a power in the state organism, which is what the concept truly is, but a power apart from and over the state organism. Thus also not a power restricted by law, which is what sovereignty always is (§§. 74, 75) but a completely unrestricted arbitrary power. The people is not to be sovereign, i.e., state power, but a power over the sovereign or the state power and over the laws of the state, authorized to dismiss the state power at any moment and appoint another, to abolish the law and issue another. Popular sovereignty thus is a power of the people not to rule the state but continually to eliminate the state and constitute it afresh. And herein lies the self-deception of the originators and the proponents of this doctrine, that they opine that the people can exercise an absolute power accruing to it apart from and over the state order, which yet is something ordered; for from whence are order and law to come to it, in that its essence is not to be bound to order and law?

Popular sovereignty is the denial of order not merely in factual consequences but already in the concept itself. With it one does not proclaim, as he fancies he does, another relation of rulership in the state, but the abolition of the state, societal chaos.

At its deepest level, the doctrine of popular sovereignty is precisely the reversal of the ethical world-order. In that the people subject themselves to no order and personal authority as something given over them, the human will is the lord of the ethical world rather than an obedient member thereof.