Archive for the ‘woodrow wilson’ Tag

Federal History   Leave a comment

Part of the current secession sentiment in the United States grows from our differing views of the structure of the United States government. This goes back to the Constitutional Convention in 1787. American history classes today try to present our current constitution as something that James Madison presented to the delegates and everybody simply saw the wisdom in it and ratified it, but that isn’t actually what happened. The Virginia Plan (essentially Madison’s plan) was strongly favored, but many of the delegates objected to the power given to the central government and the ability for large population states to functionally crush the smaller population states. Alexander Hamilton, who was essentially a monarchist, proposed his own plan that called for dissolving the states altogether.  Maybe that scared the delegates into agreeing to a compromise – the Connecticut Compromise. It kept many of the features of the Virginia Plan while strengthening the states and tempering the power of the large states so as to protect small-state sovereignty.

The Federalist Papers portrayed the new constitution as a compromise between the confederation of the Articles, which was too weak to function, and the national government most people in the states feared with a deep and abiding loathing. They proposed a federation – a cooperative agreement among states that lent the federal government (not national government) power to represent them on the international stage and to, in limited circumstances, regulate issues among the states. This was acceptable to enough Americans that they ratified the constitution with a promise of a bill of rights to acknowledge (not protect) individual liberty. After ratification, however, the nationalists co-opted Federalism for themselves, distorted the meaning of the term, and set about strengthening the federal government along strong centralist lines. At first the Supreme Court went along with this, but with the election of Thomas Jefferson, there was a slow return to a more federalist system which remained in place throughout the 19th century … to be smashed by the Civil War.

Let’s be honest about that – the Civil War was the national government forcing some of the states to comply with a change in culture against their will. I’m wholly in agreement with ending slavery in the United States and would not agree with its reestablishment because I believe the practice violated our first principle of “all men are created equal”, but that doesn’t negate the fact that the national government violated the individual rights of southerners and the state sovereignty of southern states in order to force a change in culture. Lincoln smashed the Constitution and during the War and Reconstruction, our country was a dictatorship of the northern states over the southern states. To a certain extent, the country has never recovered from that dictatorship. We returned to a federal system after Reconstruction, but then a president who had spent his youth as a southerner during those tyrannical years came to power and Woodrow Wilson understood our country as a national, central government rather than as a federation.  I sometimes wonder – if I could sit down to interview Woodrow – if he’d admit that his broad manipulative form of governance was his way of striking a blow for southern states, to wrap all of us up in the tyranny of Washington so that the South might once again be equal to the North.

Men can be as equal  in slavery as we were in liberty.

Regulatory Hang Man   Leave a comment

I’ve been blogging on the administrative state, sometimes called the “regulatory state”, the largely-invisible, increasingly powerful “shadow” government of unelected bureaucrats that control so much of American life. Like Jack Sparrow, we feel the presence of the Kraken, lurking just beneath the surface, ready to drag us down to our destruction, but we never quite put our finger on why we feel so off-kilter and most none of us know what to do about it. We sense that something has gone seriously awry with “life, liberty and the pursuit of happiness”, but we feel powerless to get the ship of state back on course.

Hangman - hangman photoCongress and the White House are currently focused on the federal budget. They should be, given the perennial deficits and the unsustainable levels of U.S. debt. However, federal spending accounts for only a portion of the burden government places on the American public. Regulatory costs, representing the largest cost of government, hinder job creation and innovation while undermining American liberty.

Woodrow Wilson, the American “father of administration”, thought that we would eventually come to see regulation as a form of liberty, because it would free the people from being involved in governmental “housekeeping”. Do we feel free in the 21st century? Does liberty abound in our modern era?

We may be free of responsibility, but we are certainly not at liberty to enjoy it.

President Obama and the sitting Congress of both parties talk a good game about reducing regulation, but the facts don’t match their rhetoric. President Obama’s first term saw a nearly $70 billion increase in regulatory burden as federal agencies imposed 131 new major regulations. In 2012, the Obama administration issued a total of $23.5 billion in new regulatory costs from 25 major rulemakings. Only two rules in 2012 decreased burdens. Sadly, a tsunami of regulation is following with another 131 major rules on the Administration’s agenda. These include dozens of rules for implementing Dodd-Frank and Obamacare. The magnitude of regulations is unmatched by any administration in the nation’s history.

The obvious solution is Congress exercising its oversight authority on the Executive branch, passing the REINS Act or something similar, which would require congressional approval of each new major regulation before it is implemented. Sunset deadlines should be set for all major regulations as well as so-called “independent” agencies, such as the Securities and Exchange Commission. If these regulations and independent agencies are vital to American society, they can go before Congress and make their case for an up or down vote. It’s a big job, but it is essential for the cause of liberty in our nation.

You’re not convinced? Don’t we need regulation to keep us safe, healthy, wealthy, etc.? I agree, we need some regulation, but the mountainous labyrinth of rules we have now is beyond the pale and may be damaging to safety, health, wealth, etc.

I’m planning to measure some of this red tape, so we understand just how bad it is and provide an understanding of why you need to write your congressional delegation.

Tracing the Kraken’s Tentacles   Leave a comment

We’re looking at the Wilson policies that advanced the administration state.

The Clayton Antitrust Act of 1914. It wasn’t the first antitrust law in the United States. There was the Sherman Antitrust Act of 1890, which outlawed monopolies, cartels and trusts. Clayton prohibited conduct, imposed a three-level enforcement scheme, provided exemptions and outlined remedial measures.

It limited price discrimination between different purchases if such a discrimination substantially lessened competition or created a monopoly in any line of commerce, banned exclusive dealings, and limited mergers and acquisitions where the effect might substantially lessen competition. It also prevented any person from being the director of two or more competition corporations.

The exemptions had a wide influence because they included labor unions and agricultural organizations. Boycotts, peaceful strikes, picketing, and collective bargaining were not regulated.

The Act is enforced by the Federal Trade Commission and the Antitrust Division of the US Department of Justice and it is still enforce today.

The FTC is an independent federal agency. While obstensibly part of the Executive branch, it is free of presidential control. A president can usually appoint an administrator when the vacancy comes open, but cannot dismiss the administrator without concurrence from the board of commissioners. Again, the president appoints the commissioners, if their term of office is concurrent with his, but often commissioners terms start under one president and do not come up for reappointment until after the next president leaves office. The Senate confirms the appointments, but cannot do much to change the commission except to impeach specific members, which almost never happens.

While originally created with the best of intentions, the FTC acts as a fourth branch of government instituting regulations that may or may not serve the people of the 21st century well. For example, when President Obama discovered that Congress was unwilling to change the laws to allow the Federal Communications Commission to regulate the Internet (called “net neutrality”), he then tasked the FTC to begin to write regulations for Internet privacy. The new FTC Commissioner Ellen Ramirez has advocated for strict regulations that “protect” privacy and will likely include requirements for “net neutrality”, complicating the ability of people to speak their minds on the Internet.

That’s only one small area where the FTC impacts are lives. In reality, just about every moment of every day, you interact with the FTC in one way or another. Often that is for good, but often it isn’t and if you object … well, who are you to object?

The most troublesome aspect for me is that, while the FTC will get involved if Safeway wants to buy Carrs Grocery in Alaska so that we can have multiple grocery stores in our community (and rule that Safeway had to divest of some stores, resulting in fewer stores available in Fairbanks), the FTC allows labor unions to form vast monopolies to strengthen their bargaining positions.

That’s the administrative state picking winners and losers on your behalf, without your permission.

Where is the Kraken Today?   Leave a comment

The rise of the income tax is instructive for our current day. The Kraken is a many tentacled beast intent upon dragging us all to the bottom of the deep blue sea. The federal income tax was one tentacle and it remains quite a viable one.

The United States had experienced economic contractions before the Depression of 1920, but this one promised to be a very bad one. Maybe it was coincidence, but it occurred about seven years after the initiation of the income tax, the Federal Trade Commission and the Federal Reserve. Federal government employment expanded greatly under the Wilson administration as did business regulation. Were these the causes of the Depression of 1920? Who knows? If it was merely coincidental, it was a strong coincidence.

When Harding took the presidency in 1921, he set about quickly to first reduce government spending, cut programs by about one-third, while his Secretary of Treasury, Andrew Mellon, encouraged Congress to reduce tax rates. Was it a coincidence that the economy rebounded from a serious depression far quicker than it had from other less serious depressions? Maybe. Or maybe it was wise economic policy recognizing that the economy cannot be entirely healthy when businesses and individuals are not free to use a large slice of their income. It’s 20-20 hindsight.

There are experts who claim the Roaring 20s inevitably led to the Great Depression. I’m not convinced. As noted, the regulations put in place under the Wilson administration were relaxed, but they didn’t go away. Businesses had never faced so much regulation as they did at that time. The Federal Reserve also practiced a loose money standard that encouraged debt by ordinary people who had usually avoided debt in previous eras. This encouraged speculation in the stock market by people who had little experience with the stock market. The stock market crash in 1929 was followed by President Hoover’s attempts to slow the resultant slide in the economy.

It can be noted that the European nations and Canada also experienced the Depression of 1929. None of them call it the Great Depression because for them it was a steep contraction followed by a relatively quick recovery. Oddly, most other nations did not pursue governmental economic manipulation. Is that another coincidence? The Great Depression lasted about 18 months in those other countries and 12 years in the United States. While Hoover and then Roosevelt regulated, taxed, and spent in an effort to fix the broken economy, Canada and England did not. They recovered and we did not. Coincidence? I doubt it.

When you look at the economic history of the United States during the late 20th century, you will find that the economy went great guns almost always when the government was taking a break from meddling with it. Yes, government grew somewhat in the Golden Age of the 1950s, but you might want to notice that America discovered vast new markets for our products in Japan and Europe following the war. You can’t point to just one thing and say “that” was the cause of economic collapse or expansion. The economy is not a closed system.

In our modern time, the economy experienced a great contraction following the expansion of the welfare state in the 1960s. It took a while for it to fully affect people, but following our withdrawal from Vietnam, the economy slumped very badly. An increase in regulation by Nixon didn’t improve things. Increased government spending under Carter made it manifestly worse. A reduction in tax rates and regulations under Reagan preceded a strong economic expansion. An increase in spending and tax rates under Bush 1 preceded a recession. When Congress forced Clinton to reduce government spending and commit to welfare reform, the economy exploded. And when Bush 2 pursued two wars, an expansion of the Department of Education, and a huge prescription drug plan while at the same time regulators forced banks to lend money to anyone who wanted a home regardless of the ability to pay the mortgage — well, we all know where that ended up.

Since Barack Obama became president, we’ve spent a lot of money and there has never been an administration that has increased regulation as much as this one has. Is the economy recovering? Sure, there are small green shoots sticking their heads up into the arctic front occasionally, but they soon collapse back into the morass. So … the economy is still alive, but it’s ailing and there hasn’t been a recession this long since the Great Depression, so ….

More on how Barack Obama resembles Woodrow Wilson in another post.

Releasing the Kraken Part 2   6 comments

The question is: how did we get from a modest 1% income tax on fairly wealthy people to the current system?

It’s easy to say — well, it’s been a century, but actually it took a lot less time than that. Within the space of seven years, the income tax had grown beyond its modest beginnings to become something close to what it is now.

In 1913, newly elected President Woodrow Wilson included a call for tariff reform in his inaugural address, then reiterated the need for revenue reform in that joint session of Congress, with a particular emphasis on lower import duties. House Ways and Means Chairman Oscar W. Underwood (D-Va.) introduced a bill to lower tariff rates from an average of 40% to roughly 29%. To compensate for lost revenue, the bill also included an income tax. The House passed the legislation in May and the Senate four months later. When Wilson signed the bill in October, it included an income tax of 1% on individual income over $3,000 ($4,000 for married couples). It also featured a progressive surtax ranging from 1 to 6%, depending on income.

The Bureau of Internal Revenue established a Personal Income Tax Division to collect the new tax, including a Correspondence Unit of 30 employees dedicated solely to answering questions about the new levy. The four-page-long Form 1040 was considered by many congressmen to be too complicated.

That sounds sort of familiar, doesn’t it? Here we see a professional bureaucracy created to deal with a crisis it created. It’s still going on 100 years later. The solution might be to make the form less complicated, but that wouldn’t employ thousands of IRS agents, so ….

Of course, the administrative state never lets a crisis – even one not of its manufacturing – go to waste. World War I brought a sharp decline in international trade, further affecting tariff revenue, causing President Wilson to call for emergency revenue legislation, which featured a whole new slate of excise taxes. These consumption taxes were lucrative, but proved unable to close the fiscal gap, so Wilson joined Democrats in Congress to support a steeper, more productive income tax. 

The Revenue Act of 1916 set out to raise $205 million in new revenue, more than half coming from the income tax. The “normal” income tax rate rose from 1 to 2% on net incomes over $3, 000 ($4,000 for married couples). Surtax rates also rose from 6 to a maximum of 13% on incomes over $2 million. To avoid widespread protests, the changes made the personal income tax steeper, but left its base quite narrow as the levy still applied only to the nation’s richest taxpayers. Corporation income tax also increased from 1 to 2% and a new federal estate tax was introduced with an exemption of $50,000 and rates ranging from 1 to 10%. The law also included a novel munitions tax designed to appease opponents of American involvement in the war; levied on manufacturers of military equipment, it was advertised to prevent war profiteering. Finally, the law featured a host of excise taxes, as well as a capital stock tax on corporations. Because of widespread voter objections, the 1916 revenue law repealed the “collection at source” provisions of the 1913 tax. Instead, the law now required simply that income sources provide information to the government on the amount of income paid out to recipients.

In March 1917, Congress introduced a corporate excess profits tax, a major innovation to the federal tax system. This levy taxed any profits above a “reasonable” rate of return, which was originally set at 8% profit; if owners made more than that, then they paid taxes according to a steep rate schedule.

Supporters defended the new tax on equity grounds, but it also turned out to be the biggest money maker among new wartime taxes. It attracted bitter opposition from business groups, who considered the tax a threat to managerial prerogatives. They were certainly justified in their suspicion, since both Wilson and his allies in Congress considered the levy a legitimate means of business regulation that many hoped to retain it after the war ended.

The excess profits tax applied to individuals as well as businesses. Individuals were taxed at 8% on incomes over $6,000. This innovation applied mostly to professionals and other highly educated workers, prompting critics to call it a “brain tax”.

Additionally, regular income taxes now applied to incomes over $1000 ($2000 for married couples), imposing a 2% rate, with graduated surtaxes as high as 63% of income.

Federal revenue grew dramatically. From 1900 to 1915, the average annual revenue collection was $281 million. From 1915 to 1926, the average collection was $2.78 BILLION.  

That enabled the administrative state, naturally. Every new type of tax required new administrative machinery to interpret and administer the law and the resultant rates. The Bureau of Internal Revenue had 524 headquarters staff and 4,529 field staff in 1917. By 1920, it employed about 12,000 staff nationwide.

Rates were raised in 1919. Corporations were allowed to exempt the first $2000, but rates were raised to 12% on net taxable income and large income individual payers were forking over 77% of their income. Still, it remained a narrow levy. In 1920, only 5.5 million returns showed any tax due.

In May 1919, lame-duck President Wilson made his famous “politics is adjourned” speech, urging higher taxes on income, estates and excess profits and the Bureau of Internal Revenue began a massive recruitment campaign to reduce its personnel shortage.

There existed a broad consensus that the steep wartime tax rates were unsustainable, driven home by a mid-term election that ushered the Democrats out and the Republicans in. Even Wilson’s own Treasury secretaries, Carter Glass and David Houston, suggested cuts. Wilson himself even suggested reducing taxes in his 1919 State of the Union Address. Still, many Democrats and progressive Republicans were unwilling to roll back wartime tax reforms. They liked the newly progressive cast of federal revenue policy, especially the excess profits tax, which they saw as a blow for egalitarian ideals. They argued that it would shift the fiscal burden to the individuals and corporations whose wealth posed a threat to American society.

Voters disagreed, however.

Releasing the Kracken 1   Leave a comment

To understand the administrative state, you have to look at how it got started. Wilson wasn’t the first president to have bureaucrats. Even George Washington had bureaucrats, but Wilson was the first president to advocate and empower career administrators who could not be fired by elected officials (easily) and who were viewed as “experts” in their field, divorced from politics, and therefore, permanent.

Of course, Wilson couldn’t release the Kracken by himself. He needed the help of Congress and he needed the help of public opinion to force Congress to do it his way.

So, let’s look at some of Wilson’s major policy thrusts as an example of the administrative state.

The United States Revenue Act of 1913 (the Tariff Act, the Underwood Act, or the Underwood-Simmons Act) re-imposed the federal income tax following ratification of the 16th Amendment and lowered basic tariff rates from 40% to 25%.

Understand how this happened. Theodore Roosevelt had advocated for inheritance taxes a decade before, reasoning that wealthy individuals should not be allowed to pass on their estates in entirety. This found resonance with the American ideal of being self-sufficient and self-made, but Roosevelt also exploited class differences, indicating that the very wealthy had gotten very wealthy through inheritance and unseemly means, not by thrift or hard work.

Roosevelt picked his successor, a moderately progressive Republican William Taft. At that same time, an uneasy coalition of Democrats and western Republicans joined to support passage of an individual income tax. The specter of a hostile Supreme Court haunted the debate. Some observers believed the justices would invalidate an income tax, just as they had in 1895. Others, however, thought the Court had changed to reflect growing bipartisan — and popular — support for the levy. A few income tax supporters wanted to press the issue regardless of the Court’s likely response, eager to make the case for progressive taxation. In any case, the income tax coalition developed a moderate proposal and sought to attach it to tariff legislation in the Senate.

GOP leaders were alarmed by rebellion in their own ranks, with numerous Republican progressives indicating their support for a new income tax and Republicans in the Senate Finance Committee tried to fend off the income tax proposal, but pro-tax forces had planned their program well. President Taft convinced the committee chairman that a modest tax on corporate income would siphon off support for general income taxation and deny victory to the congressional income tax coalition, preserving GOP unity, thus orchestrating passage of a 1% tax on net corporate income. Framed as an excise tax on the privilege of doing business as a corporation, the levy was carefully designed to sidestep constitutional issues surrounding the income tax.

It also temporarily deflated the larger income tax movement, in part because it included a publicity requirement that all returns be open to public inspection. Small business owners objected, but Taft argued publicity would enhance federal oversight of corporations, aiding lawmakers, administration officials, and investors. It was also key to Progressive support for the law, helping convince many lawmakers to accept the corporate excise tax in lieu of a broader income tax that included individuals. Eventually the publicity feature was set aside due to taxpayer complaints, forcing progressives to find another way to regulate corporations by requiring availability of accurate financial information..

Taft also supported a constitutional amendment authorizing federal income taxes, which would settle constitutional questions once and for all and temporarily delay substantive action on the income tax. Ratification was far from certain anyway, so Taft may have thought the amendment might defuse the income tax issue indefinitely, allowing it to simply fade away in the state legislatures.

In making his case for the amendment to wary Republican legislators, Taft stressed the importance of avoiding a confrontation with the Supreme Court. Such a fight , he warned, would diminish public confidence in the Court and threaten one of the pillars of American government. Congress agreed, and lawmakers soon approved the amendment and sent it to the states.

While opponents couldn’t stop the 16th amendment, they argued long and hard against it. Richard E. Byrd, speaker of the Virginia House of Delegates made a particularly impassioned plea to reject the amendment, offering a potent rhetorical blend of state rights, limited government, and anti-tax convictions. Ratification, he warned, would open a new and dangerous chapter in American governmen–

“a hand from Washington will be stretched out and placed upon every man’s business, the eye of the Federal inspector will be in every man’s counting house … Who of us who have had knowledge of the doings of the Federal officials in the Internal Revenue service can be blind to what will follow?”

Opposition from Byrd and like-minded conservatives couldn’t stop the amendment. To the suprise of many, the states ratified the amendment in relatively short order, and in February 1913 it became the Sixteenth Amendment to the Constitution. Yet, many people still opposed the income tax. It fell to Woodrow Wilson to find a way to change that opinion.

To show how fed up the people were with the Republicans at the time, voters showed the Republican the door in the November elections. They apparently thought changing parties would change things.

They were wrong!

Wilson had barely been president a month when he called a special session of Congress and addressed them personally, becoming the first president since John Adams to do so. When the president does something out of character for his office, early in his term, that leads the public to think there must be some urgency involved. Every seat was filled and the media coverage was intense. The Democrats controlled both Houses of Congress and the White House. Ooo, does that sound familiar? We’ve been there kind of recently, haven’t we?

Thousands of lobbyists invaded Washington DC and angry constituents wrote their congressmen. Whether Wilson manufactured the crisis or just took advantage of it is unclear. The Revenue Act of 1913 passed the House 281-139 and the Senate 44 to 37, establishing the lowest tariff rates since 1857 – which was before the Civil War. Wilson wanted a tariff board to scientifically fix tariffs, but Congress compromised on a study commission. The federal income tax was needed to compensate for lost revenues.

The last income tax bill (Wilson-Gorman Tariff of 1894) had been declared unconstitutional by the Supreme Court because the tax on dividends, interest, and rents was deemed a direct tax not apportioned by population. That obstacle was removed by ratification of the 16th Amendment on February 3, 1913. The incomes of couples exceeding $4,000 (or $3,000 for single persons) were subject to a 1% federal tax and it was progressive, meaning higher income earners were required to pay at a higher rate. Less than 1% of the population paid federal income tax at the time.

That doesn’t sound like much, does it? Those of us who pay taxes in this country in the 21st century, pay a much larger percentage of our income.

How’d that happen?

Wilson as President   Leave a comment

It’s hard now to see that Wilson’s contemporaries in the academic world considered him a conservative when they persuaded him to run for Governor of New York. That’s right, in 1910, Wilson was a “conservative”. During the campaign, he asserted his independence from the conservatives and the machine that had nominated him, endorsing a progressive platform, which he pursued as governor. When nominated for President in 1912, he campaigned on a platform called the New Freedom, which stressed individualism and states’ rights. He won a three-way election with only 42% of the popular vote, but the overwhelming electoral vote.

Woodrow Wilson, a Democrat, was inaugurated as the 28th President of the United States on March 4, 1913, proclaiming it his duty “to cleanse, to reconsider, to restore, to correct the evil without impairing the good, to purify and humanize every process of our common life without weakening or sentimentalizing it.”

He then set about to maneuver major legislation through Congress. First, the Underwood Act enabled a lower tariff and a graduated Federal income tax, which would later survive a Supreme Court challenge. The passage of the Federal Reserve Act provided for a more elastic money supply. The Clayton Antitrust legislation in 1914 established the Federal Trade Commission to prohibit unfair business practices and legalized many union activities. That same year, John D. Rockefeller – one of the richest men in America – donated $100 million to establish the Rockefeller Foundation, which remains the largest philanthropic act in American history.  Henry Ford established the first automobile assembly line to produce the Model T, paying his workers an unprecedented sum of $5 a day as he believed higher wages could lead to greater worker productivity and loyalty.

Almost immediately, the “anti-war” Wilson became suspicious of Mexico and began issuing edicts to the Mexican government. By 1914, we were on the verge of war because a US General had demanded Mexican forces salute an American Flag as an apology for arresting drunken American sailors in Vera Cruz.

In Summer 1914, a Serbian nationalist assassinated Archduke Francis Ferdinand of Austria in Sarajevo, Serbia, resulting in most of Europe being drawn into what should have been a minor incident. The United States officially proclaimed neutrality. While Wilson gave lip service to staying out of the war, he pursued a very active role in various negotiations and the American merchant marine was actively involved in transporting American arms to Britain and France. Secretary of State Williams Jennings Bryant would resign in 1915, claiming Wilson was deliberately antagonizing Germany.

That same year, the Smith-Lever Act provided federal funds for agricultural instruction for farmers and state college students and the Panama Canal was completed.

The mid-term elections saw large Democratic gains in the Senate and a retained majority in the House.

Congress, reasoning the country was admitting too many poorly-qualified immigrants into the country, required literacy tests for all immigrants, but Wilson vetoed the bill. In 1915, he authorized the invasion of Haiti “to teach them to elect good men.” The United States occupied Haiti until 1934. The next year, Wilson would order the invasion of the Dominican Republic, which we would occupy until 1924.

In 1916, Wilson introduced legislation prohibiting child labor and limiting railroad workers to an 8-hour day and the Federal Farm Labor Act, which established a banking system for farmers to improve their holdings. While campaigning assiduously as the man who “kept us out of war”, Wilson began to beef up the military in preparation for war and blamed bombings on American soil on either the labor movement, socialists or German saboteurs. Margaret Sanger, Fania Mindell, and Ethel Burne opened the nation’s first birth control clinic in Brooklyn, New York.

Less than a month after his second  inauguration, Wilson declared war on Germany. Quickly, he established the Espionage Act that severely limited freedom of expression, chilling criticism of the military or the government by imposing a $10,000 fine or up to 20 years in prison. Federal agents raided the offices of the Industrial Workers of the World (IWW) in 24 cities, seizing literature and arresting 10, including William “Big Bill” Haywood. Congress also passed the Sedition Act which coupled with the Espionage Act virtually suspended first amendment. Prominent socialist and presidential candidate Eugene V. Debs was sentenced to a 10-year jail term for violating the Espionage Act, the result of an antiwar speech.

Congress submitted the 18th Amendment to the US Constitution to the states for ratification, which forbade the sale, manufacture, or transport of alcohol except under special circumstances and food administrator, Herbert Hoover called for one meatless day, two wheatless days, and two porkless days each week to promote food conservation. Wilson issued an executive order created the War Industries Board, an agency designed to coordinate wartime production and transportation. By August, the Labor Department announced that the cost of living jumped 17% in New York City from July 1917 to July 1918.

In a January 1918 address to Congress, President Wilson listed his “14 Points” for a just and lasting peace. His objectives included the self-determination of nations, free trade, disarmament, a pact to end secret treaties, and a league of nations to realize collective security. This speech became the basis for Wilson’s peace proposals at the end of the war.

The world-wide influenza epidemic reaches its height in the United States in October. The extremely virulent strain of the disease first developed in East Coast cities and spread rapidly across the country and the Atlantic as a result of war-related transportation. The epidemic eventually claimed more than 600,000 lives in the United States and perhaps 20 million globally.

In November, Republicans won majorities in both houses of Congress, securing a two-seat majority in the Senate and a comfortable cushion of fifty votes in the House. Kaiser Wilhelm II abdicated the throne of the German Empire after revolution broke out in Germany. Allied and German military leaders implemented an armistice as the new German government issued an appeal to President Wilson to negotiate peace along the lines he enumerated in his Fourteen Points speech. Wilson announced plans to attend the Paris Peace Conference and signed the Wartime Prohibition Act, banning the manufacture of alcohol for domestic sale effective from June 30, 1919, until demobilization.

The Paris Peace Conference opened in January 1919, two weeks after President Wilson received glowing welcomes in Rome and Paris. The State Department announced the ratification of the 18th Amendment to the Constitution as of January 16, 1919, when Nebraska’s approval achieved the amendment’s required three-fourths majority. A nation-wide ban on the sale, distribution, or production of alcoholic beverages would go into effect on January 16, 1920. President Wilson presented his draft for the League of Nations covenant to the Paris Peace Conference in February.

In March, the Supreme Court upheld the constitutionality of the Espionage Act in Schenck v. United States, establishing that civil liberties can be restricted by the government if there is a “clear and present danger” to law and order.

Congress adopted the 19th Amendment to the U.S. Constitution, giving women the franchise in May. Wilson had previously campaigned that women’s suffrage was vital to the war effort. The joint resolution read: “The right of citizens of the U.S. to vote shall not be denied or abridged by the United States or by any State on account of sex.”

In July, after failing to secure a peace without rancorous provisions from his fellow Allied leaders, President Wilson submitted the Treaty of Versailles and League of Nations to the Senate for ratification. Senatorial deliberation on the treaty would last longer than the Paris Conference itself.

In September, against the advice of his doctors and advisors, President Wilson opened his nation-wide speaking tour to promote the Treaty of Versailles and the League of Nations in Columbus, Ohio. Police in Boston walked out on strike.

In October, President Wilson suffered a serious stroke in Wichita, Kansas, in the middle of his national speaking tour and returned to Washington, DC. It is unclear how much of the rest of his term of office was Wilson acting as President and how much was his wife acting on his behalf, with or without his knowledge. Later that month, Congress overrode President Wilson’s veto of the Volstead Act to provide enforcement power to the 18th Amendment.

After a lengthy national debate, the Treaty of Versailles failed to achieve ratification in the Senate by a vote of 53 to 38.

In December, foreign-born radicals arrested by the Department of Justice in the “Red Scare” raids of 1919 were deported to the U.S.S.R. In January 1920, Attorney General A. Mitchell Palmer staged the most extensive series of raids of the entire “Red Scare,” arresting nearly 2,700 people in 33 cities. The Senate defeated a resubmitted version of the Treaty of Versailles with reservations added by Foreign Relations Committee chairman Henry Cabot Lodge.

In April, US forces ceased their operations in support of counter-revolutionary forces in Siberia and were withdrawn.  In May, Congress passed a joint resolution declaring an end to the war with Germany. President Wilson vetoed the resolution. In June, Republicans gathered in Chicago to select candidates for the presidential and vice presidential elections. After party leaders broke the convention deadlock in what one attendee called a behind-the-scenes deal “in a smoke-filled room,” Ohio Senator Warren G. Harding was nominated for the presidency. Massachusetts governor Calvin Coolidge received the vice-presidential nomination.  Ohio governor James M. Cox and Franklin Delano Roosevelt of New York received the nominations for President and vice president at the Democratic National Convention in San Francisco.

In August, the 19th Amendment, granting women the right to vote, officially became law. In a speech given from his front porch in Marion, Ohio, Harding denounced the League of Nations.

In November, Warren G. Harding was elected the 29th President of the United States with an overwhelming 404 electoral votes (60.3% of the popular vote to Democratic rival James Cox’s 127 electoral votes (only 34.1% of the popular vote). Eugene V. Debs garnered nearly one million popular votes for the Socialist Party despite his imprisonment for violating the Espionage Act the previous year. The election split the North and South, with Cox winning all states (except for Tennessee) below the Mason-Dixon line and Harding winning the rest.

Later that month, Woodrow Wilson won the Nobel Peace Prize for his efforts to secure a lasting peace after the Great War.

In January 1921, the US Census Bureau reported that for the first time in American history, 51% of Americans lived in cities and towns of more than 2500 people.

Rebuttal of Wilson on Administration Part 3   Leave a comment

Wilson concluded his study, but rest assured, I am not going to conclude mine, because it is important to take a look at where we are today in light of what Wilson was trying to accomplish.

For now, my final snark.

Government is so near us, so much a thing of our daily familiar handling, that we can with difficulty see the need of any philosophical study of it, or the exact points of such study, should be undertaken. We have been on our feet too long to study now the art of walking. We are a practical people, made so apt, so adept in self-government by centuries of experimental drill that we are scarcely any longer capable of perceiving the awkwardness of the particular system we may be using, just because it is so easy for us to use any system.

Self-government is easy for us, so we must make it more difficult. I suspect Wilson is looking at the American system from a European viewpoint. How crude, how grubby the American system appears to be.

So far as administrative functions are concerned, all governments have a strong structural likeness; more than that, if they are to be uniformly useful and efficient, they must have a strong structural likeness. A free man has the same bodily organs, the same executive parts, as the slave, however different may be his motives, his services, his energies.

Pay no attention to the loss of liberty, free man. That rope around your neck is merely meant to guide you on the safe path.

It is abundantly safe nowadays to insist upon this actual likeness of all governments, because these are days when abuses of power are easily exposed and arrested, in countries like our own, by a bold, alert, inquisitive, detective public thought and a sturdy popular self-dependence such as never existed before.

So, looking back over the last 140 years, has it really been easy for us to uncover abuses of power? Has self-dependence been encouraged by administration or damaged by it.

What do you think?

Woodrow Wilson on Administration Part 3   Leave a comment

Wilson’s concluding remarks on his administrative utopia are every bit as indicative as the rest of his essay. Please do read his original words. It is my belief that we should read what authors actually wrote in additional to what commentators say about what they wrote because a lot of the confusion about the Founding Fathers would be done away with if we actually read their writings rather than what Woodrow Wilson and his fellow “educators” wanted us to believe about their writings. We should give Wilson the same courtesy. Lela


Having thus viewed in some sort the subject-matter and the objects of this study of administration, what are we to conclude as to the methods best suited to it-the points of view most advantageous for it?

Government is so near us, so much a thing of our daily familiar handling, that we can with difficulty see the need of any philosophical study of it, or the exact points of such study, should be undertaken. We have been on our feet too long to study now the art of walking. We are a practical people, made so apt, so adept in self-government by centuries of experimental drill that we are scarcely any longer capable of perceiving the awkwardness of the particular system we may be using, just because it is so easy for us to use any system. We do not study the art of governing: we govern. But mere unschooled genius for affairs will not save us from sad blunders in administration. Though democrats by long inheritance and repeated choice, we are still rather crude democrats. Old as democracy is, its organization on a basis of modern ideas and conditions is still an unaccomplished work. The democratic state has yet to be equipped for carrying those enormous burdens of administration which the needs of this industrial and trading age are so fast accumulating. Without comparative studies in government we cannot rid ourselves of the misconception that administration stands upon an essentially different basis in a democratic state from that on which it stands in a non-democratic state.

After such study we could grant democracy the sufficient honor of ultimately determining by debate all essential questions affecting the public weal, of basing all structures of policy upon the major will; but we would have found but one rule of good administration for all governments alike. So far as administrative functions are concerned, all governments have a strong structural likeness; more than that, if they are to be uniformly useful and efficient, they must have a strong structural likeness. A free man has the same bodily organs, the same executive parts, as the slave, however different may be his motives, his services, his energies. Monarchies and democracies, radically different as they are in other respects, have in reality much the same business to look to.

It is abundantly safe nowadays to insist upon this actual likeness of all governments, because these are days when abuses of power are easily exposed and arrested, in countries like our own, by a bold, alert, inquisitive, detective public thought and a sturdy popular self-dependence such as never existed before. We are slow to appreciate this; but it is easy to appreciate it. Try to imagine personal government in the United States. It is like trying to imagine a national worship of Zeus. Our imaginations are too modern for the feat.

But, besides being safe, it is necessary to see that for all governments alike the legitimate ends of administration are the same, in order not to be frightened at the idea of looking into foreign systems of administration for instruction and suggestion; in order to get rid of the apprehension that we might perchance blindly borrow something incompatible with our principles. That man is blindly astray who denounces attempts to transplant foreign systems into this country. It is impossible: they simply would not grow here. But why should we not use such parts of foreign contrivances as we want, if they be in any way serviceable? We are in no danger of using them in a foreign way. We borrowed rice, but we do not eat it with chopsticks. We borrowed our whole political language from England, but we leave the words “king” and “lords” out of it. What did we ever originate, except the action of the federal government upon individuals and some of the functions of the federal supreme court?

We can borrow the science of administration with safety and profit if only we read all fundamental differences of condition into its essential tenets. We have only to filter it through our constitutions, only to put it over a slow fire of criticism and distil away its foreign gases.

I know that there is a sneaking fear in some conscientiously patriotic minds that studies of European systems might signalize some foreign methods as better than some American methods; and the fear is easily to be understood. But it would scarcely be avowed in just any company.

It is the more necessary to insist upon thus putting away all prejudices against looking anywhere in the world but at home for suggestions in this study, because nowhere else in the whole field of politics, it would seem, can we make use of the historical, comparative method more safely than in this province of administration. Perhaps the more novel the forms we study the better. We shall the sooner learn the peculiarities of our own methods. We can never learn either our own weaknesses or our own virtues by comparing ourselves with ourselves. We are too used to the appearance and procedure of our own system to see its true significance. Perhaps even the English system is too much like our own to be used to the most profit in illustration. It is best on the whole to get entirely away from our own atmosphere and to be most careful in examining such systems as those of France and Germany. Seeing our own institutions through such media, we see ourselves as foreigners might see us were they to look at us without preconceptions. Of ourselves, so long as we know only ourselves, we know nothing.

Let it be noted that it is the distinction, already drawn, between administration and politics which makes the comparative method so safe in the field of administration. When we study the administrative systems of France and Germany, knowing that we are not in search of political principles, we need not care a peppercorn for the constitutional or political reasons which Frenchmen or Germans give for their practices when explaining them to us. If I see a murderous fellow sharpening a knife cleverly, I can borrow his way of sharpening the knife without borrowing his probable intention to commit murder with it; and so, if I see a monarchist dyed in the wool managing a public bureau well, I can learn his business methods without changing one of my republican spots. He may serve his king; I will continue to serve the people; but I should like to serve my sovereign as well as he serves his. By keeping this distinction in view,—that is, by studying administration as a means of putting our own politics into convenient practice, as a means of making what is democratically politic towards all administratively possible towards each,—we are on perfectly safe ground, and can learn without error what foreign systems have to teach us. We thus devise an adjusting weight for our comparative method of study. We can thus scrutinize the anatomy of foreign governments without fear of getting any of their diseases into our veins; dissect alien systems without apprehension of blood-poisoning.

Our own politics must be the touchstone for all theories. The principles on which to base a science of administration for America must be principles which have democratic policy very much at heart. And, to suit American habit, all general theories must, as theories, keep modestly in the background, not in open argument only, but even in our own minds,—lest opinions satisfactory only to the standards of the library should be dogmatically used, as if they must be quite as satisfactory to the standards of practical politics as well. Doctrinaire devices must be postponed to tested practices. Arrangements not only sanctioned by conclusive experience elsewhere but also congenial to American habit must be preferred without hesitation to theoretical perfection. In a word, steady, practical statesmanship must come first, closet doctrine second. The cosmopolitan what-to-do must always be commanded by the American how-to-do-it.

Our duty is, to supply the best possible life to a federal organization, to systems within systems; to make town, city, county, state, and federal governments live with a like strength and an equally assured healthfulness, keeping each unquestionably its own master and yet making all interdependent and co-operative combining independence with mutual helpfulness. The task is great and important enough to attract the best minds.

This interlacing of local self-government with federal self-government is quite a modern conception. It is not like the arrangements of imperial federation in Germany. There local government is not yet, fully, local self-government. The bureaucrat is everywhere busy. His efficiency springs out of esprit de corps, out of care to make ingratiating obeisance to the authority of a superior, or at best, out of the soil of a sensitive conscience. He serves, not the public, but an irresponsible minister. The question for us is, how shall our series of governments within governments be so administered that it shall always be to the interest of the public officer to serve, not his superior alone but the community also, with the best efforts of his talents and the soberest service of his conscience? How shall such service be made to his commonest interest by contributing abundantly to his sustenance, to his dearest interest by furthering his ambition, and to his highest interest by advancing his honor and establishing his character? And how shall this be done alike for the local part and for the national whole?

If we solve this problem we shall again pilot the world. There is a tendency—is there not?—a tendency as yet dim, but already steadily impulsive and clearly destined to prevail, towards, first the confederation of parts of empires like the British, and finally of great states themselves. Instead of centralization of power, there is to be wide union with tolerated divisions of prerogative. This is a tendency towards the American type of governments joined with governments for the pursuit of common purposes, in honorary equality and honorable subordination. Like principles of civil liberty are everywhere fostering like methods of government; and if comparative studies of the ways and means of government should enable us to offer suggestions which will practicably combine openness and vigor in the administration of such governments with ready docility to all serious, well-sustained public criticism, they will have approved themselves worthy to be ranked among the highest and most fruitful of the great departments of political study. That they will issue in such suggestions I confidently hope.

Rebutting Wilson on Administration Part 2   2 comments

More opportunity to snark at Wilson from a long view.

The field of administration is a field of business. It is removed from the hurry and strife of politics; it at most points stands apart even from the debatable ground of constitutional study. … The object of administrative study is to rescue executive methods from the confusion and costliness of empirical experiment and set them upon foundations laid deep in stable principle.

Wilson took a dim view of the US Constitution, principally because it delayed progress in governmental programs.

It is clearing the moral atmosphere of official life by establishing the sanctity of public office as a public trust, and, by making service unpartisan, it is opening the way for making it businesslike. By sweetening its motives it is rendering it capable of improving its methods of work.

Again, Wilson was a utopian thinker. He honestly thought if administrators were not political appointees they would not have political opinions. I wonder what he would think if he met an EPA official today. Would he recognize how wrong he was? Sadly, I doubt it. For an extremely intelligent man, Wilson does not appear to have been very astute about human nature.

Let me expand a little what I have said of the province of administration. Mostpeople being abused by administrative state policies are the sovereign authority in the United States. It’s like the boss of a company who regularly takes abuse from his employees and is utterly unable to fire them.

Wilson could not conceive that administrators, properly selected by the right kind of statesmen, would come to control the government against the wishes of the people. He really believed that the education system could be used to train the population into believing what was good for it and getting on board with it. He recognized that it wouldn’t be easy. In Europe, the people generally had no opinion of public service and rarely bothered their administrators, but here in America … well, the people, stupid though we may be, insisted we know how to operate the government. It would take some time to educate us so that we would know what we should properly have an opinion about and when we might properly state that opinion. But it was all for our own good, of course. The people really are meddlesome and in need of proper housebreaking, but if done correctly, we would thank him in the end, he was sure … so long as we never caught on that we were being manipulated.

What part shall public opinion take in the conduct of administration?

The right answer seems to be, that public opinion shall play the part of authoritative critic.

I appreciate the theatrical bone here because one of my journalism professors had been a theater critic when he was a student at Columbia University. What he taught me was that a critic does not write, act or direct the play; he must merely suffer through it and then render an opinion which the theater will call tripe before the printed page is used to line the bird cage. Wilson would render the front-page self-governance of American citizens to a four-column-inch puff piece on Page 13 of Section D.

I really don’t think he understood how incredibly condenscending he was. It’s right up there with Barack Obama’s guns and religion comment or Mitt Romney’s 47%.

Wilson’s contemporaries did find the ideas coming from Europe to be worrisome. They saw the risk to liberty if he did not. Again, he remarks on it, but then misses the point … and shows his knickers with the next statement.

Our peculiar American difficulty in organizing administration is not the danger of losing liberty, but the danger of not being able or willing to separate its essentials from its accidents. Our success is made doubtful by that besetting error of ours, the error of trying to do too much by vote. Self-government does not consist in having a hand in everything, any more than housekeeping consists necessarily in cooking dinner with one’s own hands. The cook must be trusted with a large discretion as to the management of the fires and the ovens.

Yes, liberty does consist of the people having a hand in everything through our elected representatives. Wilson clearly lived the life of a southern plantation man. He had servants who did the cooking, cleaning, etc. I don’t have servants. Do you? Most of us take an active role in cooking and cleaning in our homes. And, frankly, if I had servants who were under no obligation to listen to my opinion or my complaints, I’m not sure I’d trust the food they were serving me.

The ideal for us is a civil service cultured and self-sufficient enough to act with sense and vigor, and yet so intimately connected with the popular thought, by means of elections and constant public counsel, as to find arbitrariness of class spirit quite out of the question.

Can we agree that what we have today is not what Wilson claims was his intention? Arbitrariness of class spirit is exactly what we have. Our ruling class inhabit organizations like the Environmental Protection Agency, the Department of Education and the Internal Revenue Service. They proposed and force through ideas like ObamaCare, ignoring the will of the people, insisting that we’ll “like it” once we’ve tried it. And when we argue, they still go right ahead with their plans, because the ruling class knows better than we do, in their opinion.

And that’s what counts, of course!


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