Consensus is hard to find in Washington these days. There wasn’t that much just before before this month’s election, and there is a lot less after it. President Obama is willing to compromise on extending the Bush tax cuts and on cutting spending, but many Democrats won’t follow his lead. Similarly, any deals by soon-to-be House Speaker John Boehner are likely to run afoul of newly elected Tea Party Republicans or of a filibuster by their compatriots in the Senate. It’s going to be very difficult to find 60 votes in the Senate for anything controversial during the next two years. The middle has gone out of American politics, and the extremes work against compromise.

Failure to govern can be a good thing if the ship of state is on a safe and sustainable course, but it isn’t. Here’s my short list of unsustainable U.S. policies:

  1. Record deficits
  2. Uncertain tax policies
  3. Runaway health care costs
  4. Overextended military operations
  5. Poorly defended borders and counterproductive immigration policies
  6. Failing K-12 schools
  7. Burdensome litigation

Over the holidays, I will blog on each of these subjects, not to declare the right answers, but to show that we must build consensus on how to solve these problems if we are to continue as a strong democracy. I encourage comments and pledge to respond to those that promote consensus.

Whenever I get discouraged about the course of U.S. policy, I cheer myself up by reading how much worse it was for George Washington during the Revolutionary War and for Abraham Lincoln during the Civil War. I’m always impressed by their unbending determination to build and to preserve the United States no matter what it took and without getting hung up on ideology.

Washington was among a distinct minority of Americans who favored armed rebellion against the most powerful nation on earth in 1776 to gain the right to self determination. Most Americans were not wealthy landowners like he was and had not had their massive western landholdings confiscated by the British as he had to pay for ridding North America of the French. He fought the French as an officer in the British Army in 1755, and, 22 years later, he embraced French support, without which he couldn’t have driven the British out. He appointed foreigners who didn’t speak English as generals, and he couldn’t have won without them. Most Americans saw little chance of victory, and when, after paying a terrible price in blood and treasure, victory was achieved, about 100,000 of them, 3½% of the 3 million American population, moved to Canada. As our first president, when Pennsylvania farmers refused to pay a new federal tax on whisky, Washington led an armed expedition in 1794 to collect those taxes. We forget what it took to establish consensus 216 years ago.

Lincoln didn’t want war, but, to preserve the Union, he didn’t hesitate to unleash the most scorched earth campaigns ever fought on U.S. soil. Nonetheless, Lincoln was widely viewed as weak and compromising. He kept people guessing where he stood on emancipation until late in the second year of the war, and he was derided for emancipating only the slaves in the states that had seceded over which he had no control. That was an expedient to keep the border states on the Union side, absolutely necessary to winning the war. Lincoln allowed very generous surrender terms for General Lee and was about to go easy on the South against the wishes of his party when he was shot.

It’s easy for us to forget that both Washington and Lincoln used all sorts of compromises and expedients to achieve their only goal: to create and to preserve the Union. The controversies that arose from their actions dwarf those we face now. Let’s get our act together, build consensus, and strengthen our United States.

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About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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