The Corner

Economy & Business

‘Responsibility’ Is No Canard

Tucker Carlson (Gage Skidmore)

Michael Brendan Dougherty has chimed in on the Tucker monologue discussion, and rather critically responded to the contributions offered by myself, David French, and Ben Shapiro (he ignored Jim Geraghty, which I take to mean Michael found his arguments overwhelmingly persuasive). He opened the article with an appeal to the minor prophet of Micah, who emphatically warned Israel of those who “seize the fields and houses” of innocent people, and “rob them of their inheritance” (Micah 2:2). Michael neglected to contextualize the passage from the third chapter of Micah, which we see in the very preceding verses he quoted is referring to those who “drive women from their homes.” Michael sarcastically suggests that the prophet in warning against these people was practicing victimhood politics. I have a lot of things to say about NAFTA, but I don’t believe it was assault, battery, and theft.

But much of Michael’s article does raise legitimate questions, and I hope I can answer them satisfactorily. One of the very first things he says just has to be responded to once and for all:

While French, Bahnsen, and Shapiro all variously object to Carlson’s jeremiads about elites, and his iconoclasm when it comes to the “free market,” nobody disputed that, as Carlson said, sometimes private-equity outfits do take advantage of our laws to extract value from existing companies for shareholders, charging fees while passing on pension burdens to the public.

I am happy to discuss the nature of the private-equity business and its objective of creating shareholder value any time with Michael, Tucker, or anyone else. And if he believes it would be helpful for me to say that there are some cases of bad actors in private equity, I am happy to do so (though in billions of dollars of transactions with such people, and in my heavy interactions with that sector, I happen to have never met someone who was taking advantage of laws, or doing a disservice to the public at large). I suspect Michael is not making the basic argument that there are bad apples in private equity, but rather that the system itself is flawed. This is a conclusion, not an argument, and it is a brutally flawed conclusion. My argument in this conversation’s context, on the other hand, is not to defend private equity (I would be happy to do that in another venue, any time). If we were to look at the net–net impact of private equity on the happiness of society at-large, I am quite confident the real data on job creation and quality of living will overwhelm the other side. I recognize this to be a nuanced and complex subject, but might I just suggest that the reason potshots at the private equity industry come so easily has nothing to do with a policy viewpoint, but rather rhetorical well-poisoning to play off the very natural human intuition towards resentment. I offer nothing to counteract that emotional temptation. On the merits of argument, though, we need better.

Michael delves much further into an attack on financial institutions, and unfortunately conjured some of the most dubious data and painful straw-men imaginable. His argument is that if many American blue-collar industries are obsolete now, why didn’t us elites call for the same in 2008 when Wall Street managed to blow itself up? Citing a Bloomberg report, he claims (wrongly) that the bailouts cost $12.8 trillion, and offers an ever-so-common ding against Goldman Sachs, this time referring to its urinal. Michael shares the view of millions of people that the TARP bailouts were outrageous, but makes no effort to parse who was actually bailed out. The depositors and creditors of the firms were left to fight another day; the equity was decimated. It hurts his case rhetorically to make this distinction, but it actually would add to the honesty and thoroughness of the discussion. The Federal Reserve and the Treasury department believed that the depositors and creditors of those financial firms would be better off not being devastated. I disagree with nearly every aspect of the TARP legislation and even more so its execution, but the Occupy Wall Street talking points do not help this conversation.  I am a fervent critic of post-crisis policy, but I do know that their flawed policy response was driven by trying to help a very different actor than Michael is suggesting.

But that very line — “Where were the lectures about personal responsibility, the sacrosanct judgements of the market, and the consequent virtue of adapting in 2008?” — is frustrating to hear from my astute colleague. Does Michael actually believe that people on the side of David, Ben, and myself were supportive of the reckless behavior of Wall Street? I was a managing director at one of those firms! I left one of those firms, largely out of disdain for then lack of moral and intellectual scruples at the firm. I have written ad nauseam about the flaws in the American financial advisory system and devoted my career to a more fiduciary treatment of the American saver and investor, not the better treatment of financial institutions.

I simply reject Tucker’s implication and Michael’s accusation that the present system has coddled American finance, and that elites who defend it do so out of a conflicted relationship.  I reject out of hand any belief that the American economy can function without capital markets, and I wholeheartedly embrace a system of capital markets that lets winners win and lets losers lose. In the present cultural context, the winners would be hated regardless, though: I hope no one is in denial about that.

Michael also asked:

My question to Bahnsen would be this: If mediating institutions such as family, church, and civic organizations are important, should it not trouble us that many of modern capitalism’s defenders give capitalism praise precisely because it tends to efface and render obsolete the authority of those institutions? Should it not trouble us that many libertarian allies praise capitalism in the same terms that Marx describes it in The Communist Manifesto: as an engine of destruction for social bonds?

I hope this is a rhetorical question, since I actually took it on point blank in my piece:

Randian advocates of a free market do not understand that the freedom of our system is wholly dependent on virtue. The secular, libertarian view of markets that Tucker rightly condemns does indeed fail.

I view the anarcho-libertarian/secular-humanist defense of markets to be, in many cases, morally and economically inferior to collectivism. I serve as faculty at the Acton Institute, which works to counter not just the evils of socialism, but the evils of market capitalism rooted in the wrong anthropology. I not only am troubled by libertarian allies of capitalism who praise its destruction of social bonds, but I emphatically proclaim — with Michael — that a market economy cannot function without social bonds.

Michael continued:

To those who object to Carlson along these lines I would ask: At what point can we actually move on from the subject of personal responsibility and onto governance? Or, to put it another way, are there any political conditions in which the advice to be virtuous and responsible aren’t the best counsel you could give an individual?

The answer is very simple: “Yes, when the subject at hand is one primarily of political conditions.” But see, that is not what I was talking about in the context of Carlson’s monologueThere, the subject was, broadly, happiness, and I do not believe that political institutions and policy should play the primary role in generating happiness in the U.S. I said on dozens of occasions in Crisis of Responsibility that there are, in fact, people who suffered from various trade and immigration developments of the last generation, and that we must have empathy and compassion for them. I said, further, that where policy can be improved to improve the lot of human flourishing, we must pursue it. My criticism of Tucker’s monologue, and now Michael’s response, is the materialist idea that the conditions of human flourishing are primarily a byproduct of economic developments that can be controlled with policy levers.

I actually wish I did believe that! I obsess over what I believe to be the causes of human flourishing. If I thought we could change a trade deal here, and get less companies to hire foreigners there, and ban financial institutions here — and by all that create a genuine wave of happiness in the souls of those who are disenfranchised, I would fight for it. I am not hiding behind a (cruel?) message of personal responsibility because I do not care about people; I believe in my message about the crisis of responsibility for the very reason that I desperately want those not achieving the good life to find it, and I am convinced that we are deceiving them if we pretend it is a policy lever away.

The other point I would gently make to Michael is that the policy issues that I believe are actually having the most negative effect on our middle-class population are, indeed, covered extensively in my book: the cult of higher education and the cult of housing. I talk on a weekly basis about the horrific policy view that housing is to be managed (manipulated) to a state of permanently escalating housing prices. I find the lack of affordability in housing far more damaging to working-class Americans and millennials than I do NAFTA.

In other words, isn’t it possible people like myself, French, and Shapiro absolutely feel the public-policy sphere is fair game, but don’t totally agree with Michael and Tucker as to what the needle-movers are? And I will add: I don’t believe those who fail to bring up the fraud of higher education or the failures of housing policy as I do are in a state of apathy about the working class. There is room to disagree about complicated subjects.

Anecdotally, one of the easy lines uttered so frequently now is that the Right has become obsessed merely with corporate tax cuts for large multinational companies. Yet we tend to totally disregard the far more significant part of tax reform that sought to mitigate the inequity in the tax code on pass-through businesses (LLC’s and subchapter-S corporations that are very often small businesses and family companies). Those entities were having their profits “passed through” to the much higher ordinary income rates, often, for starters, the top federal rate of 39.6 percent. And while wealth-management firms and elite lawyers were carved out from the change, the corporate-tax-reform bill offered constructive policy relief to hundreds of thousands of businesses that are not named Apple, and do not buy back corporate stock. Why is this missed in today’s public monologues?

If we are to adequately delve into a discussion of where policy is not just wrong or ineffectual but actually undermining social well-being, we will need far more specificity than has been forthcoming thus far from the Tucker side of the monologue debate, as Kevin D. Williamson has pointed out. The specifics Tucker offered were payday lending and the legalization of marijuana. But payday lending fills a useful liquidity need for many in an economy of free exchange, though it can be an ugly abuse, one not solvable in the policy realm but unseemly nonetheless. And while I am a fervent opponent of drug abuse, who has painfully struggled with the pros and cons around criminalization for years, there is a compelling case that criminalization has done more to undermine people’s happiness than has legalization.

But I would love to delve into a policy debate that extended beyond these two reasonably small issues. Michael and Tucker will probably disagree with me, but I do not believe free trade has been a net negative for the American worker (the data says otherwise), though I freely admit it has hurt some people in some cases. And as I tried to unpack the economic aspects of a changing economy in chapter five of my book, I concluded that a renewed advocacy for labor dynamism  was a far better policy prescription than is protectionism. I did not draw this conclusion because I do not care about those who have been net losers in a global trade modern economy; I drew this conclusion because I do care about them.

Michael is one of the most gifted writers and thinkers on the national stage. I want to see this debate reach a point where the dissonant perspectives can be appropriately harmonized. Michael and Tucker believe that if we do not address the conditions of America’s working class, the country will turn to socialism. He found my omission of this claim curious, and perhaps I did omit a treatment of that concern from my article.  But I did not omit that concern from my book, Crisis of Responsibility.

Rather, I wrote the book because I agree with that thesis! And there are two sides to that coin  If we do not improve certain elements of federal policy, we risk sliding further toward statism, collectivism, paternalism, and yes, socialism. But if we do not address our cultural crisis of responsibility, and if we indulge a view that tells people and communities succumbing to social decay that it is not their fault, and that a better trade deal is all that is needed to alleviate their woes, we also will slide further toward elitism, paternalism, larger institutions, and yes, socialism

There is no reason — none — that we cannot fix our policy shortcomings (consistent with the first principles Michael and I both hold dear), while maintaining the primacy of individual responsibility. In fact, our society’s happiness depends on it.

David L. Bahnsen is the managing partner of a wealth-management firm, a trustee of the National Review Institute, and author of the book, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It.

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