Wednesday, November 23, 2016


For Thanksgiving, I offer a rumination.

Last month, the Hoover Institution's fall retreat was organized around the theme of American Exceptionalism. See here for podcasts of talks from the stars -- really good. I talked about the nexus between economics, rule of law, regulation, and exceptionalism.

This was before the election, but two themes strike me as especially important still.

First: America needs rule of law, regular order, a partisan truce, even more than it needs my particular free-market policy preferences.

If Republicans overturn Obamacare in their first 100 days, with no Democratic votes; if President Trump picks up his phone and pen, undoes 8 years of Obama in the first day, and starts writing his own; and sends the agencies after his critics and enemies, we are headed for disaster.  Future president Elizabeth Warren, or President Malia Obama with Vice President Chelsea Clinton, will just do the same. There is an anectdotal story of early 20th century Chicago mayors, who alternated between German and Irish. Each one's first act in office would be to overturn the ban on whiskey (beer), and impose a ban on beer (whiskey). (Too good a story to check the facts!) Let's not do that.

Second, we must not become a country where you can't afford to lose an election. The criminalization of politics has already gone too far. If you can't afford to lose an election -- if losing or supporting the losing party or speaking out on policy issues that lose gains you the tender attentions of the FBI, the IRS, the DOJ, the NLRB, and the EPA, if you lose your job and your business -- then people in power will fight to the end not to lose that power. Though I'm no fan of the Clinton foundation shenanigans, the noises coming out of the Trump transition not to push that issue are hopeful. Losing an election, a 95% reduction in speaking fees, and the public attention that investigative journalists can bring are enough. Putin can't retire and stay out of jail -- or alive.

A last thought for Thanksgiving. The Pilgrims were all illegal immigrants -- violating their charter from the English King, and the natives' longstanding ban on white settlement. Thank the Wampanoag's tolerant attitude for your turkey.

Economics, Rule of Law, and American Exceptionalism
(Talk given at Hoover retreat October 2016) 

To be a conservative — or, in my case an empirical, pax-americana, rule-of-law, constitutionalist conservative libertarian — is pretty much by definition to believe that America is “exceptional” — and that she is perpetually in danger of losing that precious characteristic. Exceptionalism is not natural or inborn, but must be understood, cherished, maintained, and renewed each generation — and her garden is always perilously unattended.

Like every word describing beliefs, however, “exceptionalism” is a slippery concept. America’s detractors often use the same word pejoratively and derisively. To them, exceptionalism means a parochial and ignorant moral superiority. We are not the first or only society to see itself as exceptional, different, or somehow better than everyone else.

The promise

So why is America exceptional, in the good sense? Here, I think, economics provides a crucial answer. The ideas that American exceptionalism propounds have led to the most dramatic improvement in widely-shared human well being, shared widely,  in human history. That improvement is not just material, but health, lifespan, peace and any measure of human prosperity. Yes, despite the horrors we read from the world’s war zones and some of our own cities, violence remains on a steady decline.

Aesop tells of a hungry wolf, who meets and admires a well-fed dog. But the wolf sees the dog’s collar, he says, no thanks, and walks off. Fortunately, we do not face the wolf’s conundrum. We do not have to argue for a moral superiority of freedom, and ask for material sacrifice. The wolf is both well-fed and free.

Despite the promises of monarchs, autocrats, dictators, commissars, central planners, socialists, industrial policy-makers, progressive nudgers and assorted dirigistes, it is liberty and rule of law that has led to this enormous progress. To the Chinese argument, say, that their ancient culture demands authoritarianism, a simple reply suffices: You, $7,000 per capita GDP, and filthy air. Us: $52,000 per capita and a clean environment.

I do not think this outcome was intentional. Neither our founders, nor those that built the British institutions which the founders improved, had any idea of the material progress their invention would  father, nor that the US would rise to lead the world to a 70 year pax Americana. Jefferson envisioned a bucolic agrarian society. Washington warned against foreign entaglements. A system designed only to defend individual liberty unintentionally unleashed unimaginable material and international benefits.

Of course, the foundations of this prosperity, in rule of law, security of property, internal peace, are not ours alone. America was built on British institutions, and the industrial revolution started there. Other countries have adopted many of these institutions, and joined in prosperity to the extent that they do so.

Without this economic success, I doubt that anyone would call America exceptional. Imagine that China were 7 times as productive per capita as we are, rather than the other way around. Or, imagine that great natural experiment, North Korea vs. South Korea. North Korea also claims to be exceptional. The rest of the world regards it as an exceptional basket case.

Of course, the foundations of this prosperity, in rule of law, security of property, internal peace, are not ours alone. America was built on British institutions. Other countries have adopted many of our institutions, and joined in our prosperity to the extent that they do so.

In fact, the core of exceptionalist faith describes its own undoing. If American values are indeed universal, if America’s exceptional role is to bring these ideas to the world, then when the world does adopt those ideas, America must become somewhat less exceptional.

America is already less unusual than it was at its founding, and through the eras of monarchies, of great dictators, and of soviet communism, when America’s detractors insisted she would be just one more short-lived republic.

But the process is far from over. The U.S. remains the essential, exceptional, nation

All the great ideas for the next advances in human well-being are being made here. Computers and the internet, biotech, genetics, the microbiome. Most importantly, the great ideas are being implemented here - the new companies are American.

More darkly, any hope for resolving the world’s gathering storm clouds reside in the U.S. If we don’t get our act together and revive our exceptionalism, and pretty darn soon, the consequences are truly terrifying.

Chaos in the middle east, more swarms of refugees. Russian and Chinese forcible expansion. Nuclear weapons going off here and there.  Pandemics of people, animals, or crops, which often follow waves of globalization.

The troops in the first Iraq war wore T-shirts saying “who you gonna call? 001.” It’s still the only number.

Enough self-congratulation. It’s time to move on to the second item of a conservative’s faith, that it’s all in danger of falling apart. And it is, more than ever.

The rule of law

I locate the core source of America’s exceptional nature in our legal system — the nexus of constitutional government, artfully created with checks and balances, and rule of law that guides our affairs. And that is also where I locate the greatest danger at the moment.

Lawyers? Government? You chuckle. That you may laugh just tells us how endangered this precious flower is. Without rule of law, any American character for innovation is quickly squashed.

Rule of law means the rights of the accused to know charges against them, to see evidence, to confront witnesses; the right of free speech and especially unwelcome political speech; the separation of prosecution and judges; grand juries to weigh evidence, and warrants for searches; the right to property, what that right means, and courts that will defend it (Fracking developed in the US pretty much because property rights include subsoil minerals, which are retained by the government in most other countries.); the delicate constitutional checks and balances that keep majorities from running amok, and delay awful ideas until enthusiasm passes; a free press, that can expose corruption. And so on ad infinitum.

Even democracy only lives on top of rule of law. We are a republic, not a democracy, and for good reasons. Democracy is a fundamentally a check on tyranny, not a good way to run day to day public affairs. Democracy without rule of law produces neither prosperity nor freedom. Even countries like Venezuela and Russia go through the motions of elections, but you can’t get a building permit without connections or speak out against the government without losing your job. Rule of law without democracy can function for a time and  tends to produce democracy. America lived for 150 years under rule of law while still a monarchy.

And without rule of law, democracy is soon subverted. Those in government are always tempted to use the government’s power to silence opposition and cement their hold on power, and ruin the economy in the process. That’s our danger. If speaking out for a candidate, a policy question such as climate change, or working on behalf of a losing party earns you the tender attentions of the SEC, IRS, EPA, CFPB, NLRB, and increasingly the DOJ and FBI, it does not matter who votes.

Erosion of rule of law

The erosion of rule of law is all around us. I see it most strongly in the explosion of the administrative, regulatory state. Most of the “laws” we face are not, in fact, laws, written by a legislature and signed by an executive as we are taught in school. They are regulations, promulgated by agencies.

This made sense, initially. For example, it does not make sense for Congress to write the criteria for maintaining an airliner. But now that system has spiraled out of control. The ACA and Dodd-Frank acts are poster children. Their enabling acts go on for thousands of pages. The subsidiary regulations go on for tens of thousands. The letters and statements of interpretation and guidance, now essentially laws of their own, go on for more.

Were these even rules that one can read and comply with, it wouldn’t be so bad. But the real problem is that rules are so vague and complex that nobody knows what they really mean.

Companies can’t just read the rules. They must ask for regulator approval ahead of time, which can take years, and gives arbitrary results.

Hence, the “rules” really just mean discretion for the regulators to do what they want — or to coerce behavior they wish out of companies by the threat of an arbitrary and adverse decision. Anyone can be found guilty at any time — if the regulator chooses to single them out, as an EPA administrator once said, for “crucifixion.”

Richard Epstein calls the system “government by waiver.” The law and regulations are impossible to comply with. So business after business asks for waivers. Which are granted, mostly. But you’d be out of your head to object too loudly to the actions of the agency or the administration it serves if you want a waiver.

On top of laws, rules, and judicial interpretations, now agencies write “guidance” letters to state their interpretation of a rule, which become laws of their own.

Like laws, new regulations are supposed to follow a procedure. They are supposed to respect and implement Congress’ authorizing legislation, incorporate public comment, serious cost benefit analysis, and so forth. But even these weak constraints are less and less binding.

Obamacare subsides. FTC internet regulation. The EPA taking on carbon and closing down coal. Keystone. The education department war on private colleges. All of these step far outside the established limits. (My point is not the merits of any of these, which may be fine regulations. My point is the lack of rule-of-law process in how they were promulgated)

The basic rights that citizens are supposed to have in face of the law are also vanishing in the regulatory state. The agency is prosecutor, judge, jury, appeal court, executioner, and recipient of fine money all rolled in to one.  You do not have conventional rights to see evidence and calculations, discover information, and challenge witnesses. Agencies change their interpretation of the law, and come after their victims ex post.

Retroactive decisions are common, never mind the constitutional prohibition on bills of attainder. When the DOJ and CFPB went after auto lenders, based on a statistical analysis of last names of people who had received auto loans, the computer program was obviously not announced ahead of time, so businesses had any idea if they were following the law. The CFPB went after PHH, a mortgage lender, issuing a novel interpretation of the law, charging the PHH ex-post with violation of that new interpretation, and increasing its own administrative Judge’s $6 million dollar fine to $109 million.

The expansion of the regulatory state, and disappearance of rule of law in its operation is already having its economic impact. The long-term growth rate of the US economy has been cut in half, driven largely by anemic investment.

I fear even more the political impact. The point of rule of law is to keep government from using law for political purposes. As we lose rule of law in the regulatory state, its politicization is inevitable. IRS and Lois Lerner. Campaign finance law and Gov. Scott Walker.

The drive towards criminalized regulatory witch hunts and going after the executives means one thing: those executives had better make sure their organizations stay in line.

ITT tech got closed down as part of the Administration’s war on for-profit education. Laureate International Universities, the for-profit college that coincidentally paid Bill Clinton $17.6 million as “honorary chancellor,” did not.

The SEC is piling on ambitious state attorney generals drive to sue Exxon, under securities law, for insufficient piety over climate change.

Big “settlements” with banks, are leading to millions of dollars channeled to left-wing and Democratic party political advocacy groups.

The classic analysis of regulation says it leads to capture: the industry captures the regulator, they get cozy, and regulation ends up being used to stifle competition in the industry. Capture is now going the other way. Health insurers, banks, energy companies are slowly being captured by the politicized regulators. Yes, they still get protection, but they must do the regulator and administration’s political bidding. And a constant stream of CEO show trials and criminal investigations keeps them in line. With calls for more. Just imagine what they could do with lists of donors to out-of-power party PAC and nonprofits.

Campaign finance law is precisely about regulating speech, and the government taking over who can support whom in an election. Corporations will be forced to disclose contributions. Unions will not.

In the classic story, industry captures the regulator, they get cozy, and regulation ends up being used to stifle competition in the industry. Capture is now going the other way. Industries are slowly being captured by the politicized regulators. Yes, they still get protection, but they must do the regulator and administration’s political bidding. And a constant stream of CEO show trials and criminal investigations keeps them in line.

The key attribute that makes America exceptional — and prosperous — is that you can afford to lose an election.  Grumble, sit back, regroup and try again next time. You won’t lose your job, or your business. You won’t suddenly find trouble getting permits and approvals. You won’t have alphabet soup agents at your door. You won’t have prosecutions of your political associations.

In many countries, people can’t afford to lose elections. Those in power do not give it up easily. Those out of power are reduced to violence.

We are losing that attribute. American exceptionalism does not mean that all the bad things that happen elsewhere in the world cannot happen here.

Perhaps I am guilty of nostalgia, but I sense that once upon a time, those in American public life believed that their first duty was to keep alive the beautiful structure of American government, and the policy passion of the day came second and within that constraint.

We are suffering now a devotion to outcome, to winning the momentary battle at any cost. Legislation that passes by one vote? Fine. Regulations written far past enabling authority? Go for it. Executive order in place of law or regulation? Do it. Just write a letter of interpretation to tell them what to do. Shove it down their throats. But when policies are adopted without at least grudging consensus that the battle was fairly won, you can’t afford to lose an election.

Since the Nixon impeachment, and with the spread of campaign finance law and regulation, we are seeing a greater and greater “criminalization of politics.” It’s part of using any tool to win. But it adds to America’s central exception to human affairs, that you can afford to lose an election.

Our public life depends on voluntary cooperation. Administrations follow the law, even when they don’t really have to. They defer to court and supreme court decisions which they could ignore. The president does have a pen and a phone — and the number at DOJ and FBI and IRS. The rule of law depends on him or her not using it.  We do not ask the question too deeply “so what are you going to do about it?” We are losing that respect for the system.

The idea of rule of law, the reverence for process over outcome seems to be disappearing. Few college seniors will have any idea what we’re talking about. Even basic civics courses are passé. And we see so much on both sides of the partisan divide that ignores it. Our many foreign-policy misadventures have a common theme, forgetting that all societies need rule-of-law foundations not just the superficial exercise of voting.

Rule of law, then, depends on a culture that respects it, not just the written word. And that culture depends on people to some extent understanding how it works. Like medieval peasants, having lost the recipe, looking up in marvel at Roman concrete structures, I fear our children will wonder just how the architecture of a broken system once worked its marvels. And the Romans lasted 1000 years. Pax Americana seems to be running out of steam at a mere 250.

Egalitarianism and the pursuit of happiness.

Our government’s purpose is set forth in the Declaration of Independence: to secure Life, Liberty, and the pursuit of Happiness, period. Government does not exist to lead us to some grander purpose: the advancement of the Christian faith, or the restoration of the Caliphate; the spread of communism on earth; the greatness of our kultur, or the glorious American Nation. When Kennedy said “ask not what your country can do for you — ask what you can do for your country” he had it precisely wrong.

Yes, American Exceptionalists wish to spread their ideas to the world, but not to subjugate those people to some greater cause — merely to allow them to pursue Life, Liberty and Happiness as those people see it.

A central article of exceptionalist faith is that American institutions are universal. We deny that they are specific to a culture or (heavens) race. People everywhere want freedom, and can learn to use American institutions to get it as quickly as they can learn to use an American iPhone to order American Pizza. (Sorry Italy!)

Most of all, government does not exist to further the ethnic or religious identity of a people. Throughout the world, governments parcel up the spoils of power along ethnic and religious lines. Each losing ethnic or religious group then needs its own government to defend its simple economic and expressive rights. Multi-cultural and multi-ethnic empires existed before. But by and large they were empires of tolerance, not right, and extracted resources from citizens equally rather than served them equally.

In the US, the children of Serbians and Croatians, of Indians and Pakistanis, of Catholics and Protestants and Muslims and Jews, live side by side and intermarry. None imagine that they needed a government run by one of their own ethnic group or religion for basics like getting a business permit. The idea that government serves to foster their ethnic or religious identity becomes quickly foreign. Yes, this melting pot ideal has never been perfect, but it holds much more than in any other country.

But how quaint this melting pot view seems now!

Interestingly, that ideal it disappeared first from our foreign policy. For a hundred years, the U.S. has stood behind ethnic or religious governments, happily playing one against the other, and not once saying “you know, we have a better idea for managing this, one where you won’t be at each other’s throats for another century or so.”

But that exceptional ideal is now vanishing domestically as well. Our government requires us to fill out forms with fine racial categorizations. The core principle, that to be treated fairly by the law, you  do not need to be represented by a police officer, mayor, congressman, senator, or president of your own particular racial, ethnic or religious identity is not not only fading away, but its opposite is enshrined in law.

It is true that these measures stemmed from the overturning of the even more egregious violation of American principles in laws governing African Americans, not only in the Jim Crow south but the segregated north as well. But at least we paid lip service to the principle.

A country that believes, and enshrines in law, the principle — opposed to everything in American exceptionalism — that you cannot be treated fairly by a government unless the officials of that government share your exact racial, ethnic, religious, and soon gender identity, will soon fracture.

Similarly, exceptional America does not recognize the concept of “class.” Our disavowal of aristocracy and titles set us distinctly apart from Britain in the 19th century. And yet we now use that language all the time — “middle class” or “working class” especially. Economic law, regulation, and policy, increasingly treats income as a permanent class designator, as fine and permanent as Indian castes, and treats its citizens on that basis every bit as much as monarchic England treated peasant differently from nobility. We decry the reduction in mixing in America, yet when housing, food, medicine and so on are distributed based on income, income becomes a permanent class marker.

Opportunity is a key part of the egalitarian credo. But a society divvied up by formal categories of class, race, and income quickly loses that opportunity. As with economic regulation though, each such division is a client usefully exploited for political advantage. Exceptional America foreswore the opportunistic politics of such divisions.

Don't get me wrong. Identity is important. Contemporary America is one of the most tolerant societies on earth, and if people want to use their liberty to explore their national, enthic, gender, religious, class or other identities, more power to them. But eventually, once the egregious persecutions of law have passed, we must aim to keep identity out of politics, especially presidential politics, and especially the ethnic and religious identities that are the organizing principle for conflict around the globe, and into culture and religious and community organizations where it belongs.

Fixing it

The third article in exceptionalist faith, however, is optimism; that despite the ever-gathering clouds, America will once again face the challenge and reform. There is a reason that lovers of liberty tend to be Chicago Cubs fans. (And, as a member of both tribes, I take hope from one for the other!)

Healing is not something we should take for granted, however. There is no automatic self-correcting force. Every scrape with disaster is a scrape with disaster. It can happen here. Hope is not a strategy.

The recipe is straightforward. Rather than just demand “less regulation” even louder, we need to bring rule-of-law process and protections to the regulatory state, and revive them in our legal procedures as well. It’s time to pay attention to the structure of government rather than on its outcome.

Congress should re-structure the law surrounding regulation. Stop writing 1000 page page bills. Strengthen the Administrative procedures act describing how regulations are written and implemented. Require serious, and retrospective, cost benefit analysis. Put in “shot clocks,” time limits for regulatory decisions. Give people more avenues to challenge regulation in a timely manner.

Good news: people on both sides of the partisan divide recognize this fact. The “better way” Ryan plan contains just this kind of radical restructuring of the regulatory process. It goes so far as to require that Congress must approve new major regulations — a large change in the balance of power back to Congress and away from Administration and Agencies.  The Obama administration tried to strengthen the OIRA (office of information and regulatory affairs)  its office of regulatory affairs, to regulation. The effort failed, but it signals a bipartisan realization that the regulatory state is broken and taught some useful lessons.

The court system plays a crucial role..  Fix the court system so you’re not bankrupt and dead by the time you win. The litmus test for new judges should be their willingness to sustain rule-of-law restrictions on the regulatory state, not to re-fight social issues. Let the litmus test be Wickard v. Filburn, which declared a man may not grow wheat in his own yard to make his own bread without a Federal Wheat Marketing Order,  not Roe v. Wade.

A small comment on foreign policy

I have focused on economics, but nowhere is the decline of American exceptionalism more evident than in foreign policy. Post world war II pax Americana has been the most peaceful and prosperous period in all human history. But its development and success has been one narrow scrape after another, and any of them could have gone wrong. The next one may.

What country can look at the experience of Ukraine — to which the United States guaranteed territorial integrity in exchange for giving up nuclear weapons — North Korea, India, Pakistan, Libya, and Iran and not conclude that getting nuclear weapons and rattling them is a darn good idea?

Teddy Roosevelt said to speak softly and to carry a big stick. America these days speaks loudly, aimed at the daily polls, doesn’t mean it, and announces ahead of time that it won’t use its stick. Eisenhower did not tell Hitler ahead of time how many troops he was going to put in at Normandy, and how quickly he would take them out. The answer was, enough to win, period.

The Bush administration gave the project of bringing democracy to the world a bad name, in part by misunderstanding just how much rule of law must underpin democracy, and in part by misundnerstanding just how much the world still needs the idea and culture of rule of law.
For a messianic, universalist, religion, we do precious little missionary work these days.

A small thought for those anxious for America to retreat from its "exceptional"  leadership role and allies to pay more and be more active: He who picks up the check gets to pick the restaurant.


It is common to bemoan the state of American politics. But we should be optimistic. The major parties are blowing up. We are in a once-in-a-generation major realignment and redefinition. Only a big realignment can produce the rule-of-law and free-market coalition that I describe here. Power may shift from the once imperial presidency to an emboldened Congress. Only a time of big change offers big opportunity.

Finally, ideas matter. An exceptional — and functional — America must understand how she is supposed to work. We are a democracy, and if voters don’t respond with elemental understanding of their rights, and outrage when those rights are violated, as the founders did, we can’t expect miracle politicians to save us.

How do we expect our children to understand the machinery if we don’t tell them? The schools and universities don’t do that any more. But others institutions do!

You’re sitting in an exceptionally American institution, a reservoir of, as our banner says “ideas defining freedom.” Sometimes that reservoir is an ark, keeping ideas alive in a dark age. Sometimes it is a fountain, ready to bring those ideas to the world when it’s ready. But you, me, and the institutions we form — another brilliantly exceptional American habit — are crucial to her renewal.


  1. I'm a fan of America's constitutional system, "rule of law" tradition and democracy. U.S. is a great country with spectacular achievement and indelible contribution to the world's peace and prosperity, although propaganda in some countries try to defame or deny it. They even use this U.S. election as a counterexample of democracy.

    As a foreigner, sometimes I can't figure out why those system deficiencies common in developing economies and authoritarian regimes; such as vague language in laws, complex regulation, and "criminalization of politics", would happen in America, a country with more than two hundreds years'democratic practice and well-developed institutions?

    1. I can see at least two plausible reasons:

      1. The political conspiracy reason. Things you couldn't get through in the light of day can be done through a back door using vague laws and un-reviewed regulation. If you politically control the agencies making the regulations, then shifting the power of decision to them can allow your side of politics to do things that the people would never vote for.

      2. The incompetence theory. The old quote - I would have written a shorter letter, but I didn't have the time. Writing something that is clear and concise, and easily interpreted, is actually difficult. Those doing the writing may not have the competence to make it clear, or may be so engaged in horse trading and tweaking that they spend no time on the core of the law itself.

    2. I suspect that part of the problem with writing laws is that the drafters run into a version of Godel's completeness theorem. No system of laws can be logically "complete" and the attempt to make the laws and regulations "complete" results in an endless cycle of ever increasing complexity.

  2. Growth & productivity with less hands-outs, that's an american exceptionalism. Happy Thanksgiving.

  3. Rule Of Law!

    In U.S., among establishment figures, the exalted reverence for rule of law instead becomes indolent oceanic apathy when the topic becomes enforcement of immigration law.

    If I believe our leaders in Washington, the U.S. can spend $6 trillion to $8 trillion in Afghanistan and Iraq and nearby, rearranging matters in Anbar Province, or along the lawless Pakistani borderlands, in Kunduz, Aleppo, Baghdad, or taking Mosul square foot by square foot. We can even prop an Islamic narco-puppet state in Kabul, evidently for decades on end.

    But how on earth could we ever enforce immigration laws! And Trump's wall? Preposterous!

  4. This comment has been removed by the author.

  5. I think this summarizes your point nicely:

  6. America did not invent free markets or the rule of law. Scotland probably has a better claim.

    American exceptionalism has a dark side. There is a very fine line between belief in American exceptionalism and hubris. Between belief in exceptionalism and foreign policy arrogance.

    Belief in exceptionalism leads America into foreign adventures - the belief that by invading Iraq and smashing an existing institutional structure something better will inevitably spring up in its place; the belief that if America foments revolution in Syria or Libya to overthrow an existing institutional structure something better will inevitably spring up.

    America is special and that gives it enormous soft power in the world. The belief that hard power can be used to achieve in a few years results that would take decades with soft power is a huge mistake.

    1. Scotland invented it, America implemented it.

      As for your "foment revolution" stuff, you've been reading too much fake news on the internet. The US didn't foment anything in those countries. Those places have more than enough history of revolution and civil wars and troubles all on their own.

    2. Yes, plenty enough infighting in those places for a long time.
      But don't forget the "project for the new american century". That was the, openly publicised, neo-con proposal to invade Iraq and establish permanent US military bases there. George gets in, 9/11 happens, oops it was not from Iraq so need some dancing around to use it to justify the invasion.
      That is neither fake news, nor fomenting revolution.
      It is also not exceptionalism.
      Except in the sense that actually getting to the point of invading Iraq required a great deal of public discourse and propaganda.

  7. "The Pilgrims were all illegal immigrants... "

    Gee, and that worked out splendidly for the native population, didn't it?

    It's interesting how pro-illegal alien types almost always rely on "argumentum ad passiones".

  8. Totally agree of course. But, whether GOP does x or y in the first 100 days or never, is no guarantee or barrier to future President Elizabeth Warren from engaging in the behavior you decry in her first 100 days. In fact, it is almost guaranteed she will since that is the entirety of the Democratic Party platform (big, swift top-down authoritarian executive actions).

    No system in the world is immune to it and neither is the US system.

    That being said, there are many things a President Trump and a GOP Congress can do to stop that from happening. Dismantle the regulatory state that allows for such swift executive actions. Establish barriers that are fait accompli and can't be undone with executive action etc.

    For example, the WALL. The reason why the WALL is a good idea is precisely because once it is in place it cannot be undone (without massive political barriers and opposition). Future Elizabeth Warrern won't have any more say in the matter because it is already build, already functioning, and without dismantling the entire mechanism of border patrol she can't undo it.

    This is why the strengthening of States sovereignty, of local government, of judicial power, is important.

    Arguing that Trump shouldn't undo the mistakes of the past 8 years which were pushed through by executive action and strong-arming, is no solution. You have to undo those problems first. It does nothing to prevent the Democratic Party from doing it again once they are in power.

  9. In as much as I've been indoctrinated with efficiency, I would rather that court settlements with banks (or other institutions) be burned, or 'deleted', than given to any political advocacy groups. Yes, I would be as heartless so as to deprive those good-willed groups their sources of funding for the sake of my assurance that my government, that the appointed judge who is to be and remain impartial, to give punishment in level with the crime and nothing more, gives the verdict that does nothing else but punish for the crime.

    There's that common expression that a policeman can't catch an offender speeding if he abides by the speed limit. But what if government is the offender? What if there is so much regulation, so many pages of ambiguiously uninterpretable regulation that rule of law can't possibly make its way into regulation so that it can't self-regulate? Surely the good-hearted elected politicians will eventually tire (or bore) of this much-too-long of a mess and move forward!

    When the promise of a presidency is to undo the previous 8 years, when separation of power is somewhat eroded, the highest court justices don't deny their political affiliation and publicly denounce candidates but still 'try' to stay impartial, when congressman play game theory, I can't help but wish there came some magical enlightened despot to reform how government reforms, undo much needed undoing and disappear. In as much the people lament about their distrust in government, the leading up to Brexit seems to be what popular referendum can and likely will amount to and instead of 'yes' or 'no', American identity is fragmented by more majorities than I ever knew, post-election.

    Mill defines liberty in one sentence and everything else is really on the importance of the conditional clause. When the conditional clause is ignored and we are where we are at now, when progress is to 'retrogress' to our founding principles and institutions and idealists are labeled and written off, in as much the idealist is slave to his hope, I think the Chicago Cubs analogy is quite dead on; preserve the hope and now we know the Chicago Cubs needed a 108 years to win a world series, but it happened.

  10. My comment is too long for your blog, it seems, which is a pity. You might do something to remove that limit. It's only fair to do so. After all, they are only electrons.

    Here are my thoughts:

  11. Fair to who?

    I think in fairness to blog readers and to the owner of the blog, comment writers should be direct and brief.

  12. Prof. Cochrane, this is all nice poetry, but it lacks the specificity, clarity, and attachment to fundamentals is needs to lead to actionable effective policy.

    You haven't really defined what we mean by "free markets" or "rule of law" or really described exactly how these things work and lead to better outcomes.

    More importantly, you haven't defined what we mean when we say "better outcomes" when we're talking about government policy.

    Please put more work on clarifying what a government's products, services, methods and KPIs should be.

    1. May I suggest a courses in Econ and Con law. I suspect you will learn how "free markets and "rule of law" are defined.

  13. Unlike most cultures/societies in history, we are exceptional/different because we are not a status quo society. We have always been a dynamic culture with institutions that are subject to change as each new generation comes along and re-examines old values to see where they fit in a contemporary setting.

    1. Unless you are a Republican appointee on SCOTUS in which case you believe that values and institutions are set down by the Constitution as holy, unchanging, writ handed by the founding fathers.

  14. Interesting article. As a Canadian, living next door to the US I think there is one element related to American Exceptionalism that has been completely missed - Geography. The land mass of the United States grants massive advantages over other countries that, in my opinion, would ensured American dominance regardless of it's political system.

    What other country on earth enjoys the massive agricultural advantages of the USA (great plains, California), with access to two oceans to transport their product? What other nation is boarded by two nations (Canada and Mexico) that present zero threat of invasion or competition? What other country has access to the kind of accessible natural resources available to the USA?

    I say, yes the American system is a good one (as is our system here in Canada). By design the American system makes it difficult for government to get things done, and it is built in a way that facilitates corruption. It is by no means the "best" system (if there can ever be one).

    I suggest that American exceptionalism is based on American geography first, then further facilitated by the attributes described in this article (rule of law, individual freedom, etc) that are available in many, many other countries who lack the significant geographic "leg-up" that the USA enjoys.

    Americans have a lot to be proud of with their country and their systems, but sometimes forget to be thankful of their position (as most lucky people are prone to do, including my fellow citizens)

  15. So, John, what is your position on Wickard v. Filburn?

    1. And what about Schmeiser vs Monsanto?
      My inclination is to allow the little guy to be protected by "rule of law" from the abusive big guy. So I favour the farmer in both cases.
      What color does the litmus paper turn in my case, then? Pink or blue?
      My assumption is that Hoover favours whichever is the less regulatory. Although it is not clear to me where that would leave farmers like Percy Schmeiser.
      Then what about the Texas Railroad Commission? Is their regulation of oil extraction to be applauded or not? I believe they were invited by the oil industry to regulate in order to provide stability when they were suffering from a history of boom/bust cycles.
      And, by the way, I also favour the pregnant girl's wishes over the wishes of the self righteous Bible thumper.



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