Wednesday, August 26, 2009

Obama & Lincoln Economics

Soon after the election of Barack Obama, there were many in the media and elsewhere making comparisons between our latest president and the 16th holder of that office, Abraham Lincoln. 

Having been born and raised in Illinois (which is of course, the land of Lincoln) and having little to judge with but the history courses that I took in a youth so far in the past that like Abe, we often read our books by candlelight, I have to admit that I was initially skeptical of any such similarity. 

Recently however, I have slowly been grinding my way through "The Real Lincoln", by Thomas J. DiLorenzo. This tome has been rather an eye opener for me both in its portrayal of Lincoln in the years leading up to and during the Civil War, and of the economic policies that shaped those years. 

Lincoln it seems, was someone who followed in the footsteps of one of our Founding Fathers, Alexander Hamilton; and of Henry Clay, who was Lincoln's hero in politics (Lincoln in fact delivered a eulogy for Clay in Springfield in July of 1862)

Like Hamilton, these were politicians who believed in a strong federal government and a strong federal banking system. They were opposed by those following the principles laid down by Thomas Jefferson (author of the Declaration of Independence) and James Madison (considered the father of the Constitution), who believed in the independence and primacy of the States, with only enough federal government to hold the union together. Lincoln likewise believed in an economic policy known as "mercantilism", which is characterized by protectionist tariffs (you know, like promising to renegotiate NAFTA), tax funded subsidies for favored businesses (you know, like GM, Chrysler, and the banking industry), and internal improvement subsidies to build railroads, canals, dams, and roads (you know, like the infrastructure projects that were part of the stimulus package)

The fact that the tariffs drove consumer prices up, that corporate welfare did likewise and were only good for the businesses that received them, and that the internal improvement projects were inevitably hotbeds of waste, graft, and huge cost overruns which did little more than run up government debt was mostly ignored by politicians at the time. (It should be noted that at the time that Lincoln became president, every State Constitution except that of Mass. specifically prohibited legislation for such projects.) 

It seemed however that while these practices were detrimental to the governed, they never the less did extremely well in maintaining the ruling elite in their seats of power. Interesting in the historical debate over such policies is that DiLorenzo points out that Madison, in his last day in office, vetoed one of these improvement subsidies proposed by Lincoln's mentor Henry Clay saying in part that, Congress has enumerated powers under section eight of the first article of the Constitution, "and it does not appear that the power proposed to be exercised in the bill is among the enumerated powers, or that it fall by any just interpretation with the power to make the laws necessary and proper" for carrying out other constitutional powers into execution. Madison in fact warned Congress that the general welfare clause of the Constitution was never intended to become a Pandora's box for special interest legislation. 

Having now lived through some eight months of President Obama's economic policies, one cannot help but note the striking similarities between the two presidents' philosophies where such policy is concerned. I am therefore forced to re-evaluate my position and admit that I have been wrong and that there may at least be some similarity between the two Presidents I must also further note that during the presidency of Abraham Lincoln:
  • The principle of habeus corpus was suspended and legislators, newspaper editors & publishers, and civilians who disagreed with Lincoln's policies were thrown into prison without charges or trial.
  • All telegraph communications in the US were censored and newspapers critical of Lincoln's policies were denied distribution by mail (the predominant method at the time) at the president's orders to his postmaster general.
  • Federal troops were posted outside of polling places during an election in 1861 in both Maryland and New York at Lincoln's direction in order to insure that pro government candidates were assured of election.
  • States like Maryland and Delaware who attempted to consider secession from the Union were prevented from such consideration when Lincoln sent troops into those states, declaring martial law.
  • Lincoln unconstitutionally created the state of West Virginia by orchestrating the secession of western Virginia from the rest of the state, setting up a pro-Union government in it, and then accepting this state into the Union.
  • A bloody and costly civil war was fought over the right of any states to secede from the Union, a right outlined in the Declaration of Independence and guaranteed in the Constitution.
Wow, if such similarities continue to hold true, we may have good deal more excitement to look forward to in the coming three years! 

1 comment:

Roland Hansen said...

Gee, Tim, thanks for all the great educational information about Honest Abe.
It appears that we may possibly have a different perspective as we compare Lincoln times with the forthcoming exciting political Obama times.