George Dangerfield’s 1935 “The Strange Death of Liberal England” set out how increasing unrest and inept government in 1910-14 led to the collapse of the Liberal Party that had ruled Britain for most of the 19th century. A similar book could be written today about the collapse since 2000 of the centrist, well governed “Liberal” polity that President Bill Clinton bequeathed to George W. Bush in January 2001. Whether President-elect Trump now succeeds or fails, there is no chance of a return to that liberal consensus. Instead, a choice will be made in 2028 and thereafter between authoritarian progressivism and a new populist conservatism. It is to be hoped that the American electorate chooses wisely.
Relative to today, the United States of the late 1990s was well governed. That’s not to say that it was conservatively governed. The conservatism of Ronald Reagan’s Presidency had been dissipated by President George H.W. Bush in an orgy of feeble government, pointless overseas meddling, mindless social legislation, excessive spending and a tax rise that he had promised his voters to resist. This gross betrayal of core Republican principles was typical of both Bushes, father and son, and “Reaganite” Republicans in our time who bleat against Trump ignore the fact that the cause of “Reaganite” conservatism was betrayed three decades ago, not under Trump. Nevertheless, the “liberal” middle-of-the road government of President Bill Clinton’s years worked well for the American people.
Whereas the first two years of the Clinton administration in 1993-95 had seen an attempt to socialize healthcare that would have imposed all the cost increases and inefficiencies of the 2009-10 “Obamacare,” that attempt had been defeated by a massive wave of public support for the Republicans under their inventive House Speaker Newt Gingrich. The period of coexistence in 1995-99 between a Democrat President and a well-led Republican Congress produced some of the best government the United States has ever enjoyed.
For one overwhelmingly important matter, the Federal Budget was balanced and pushed into surplus, the only time this had happened since 1969, an achievement that has disappeared into a pink celestial haze of dreamlike memory in the decades since. The Social Security and Medicare trust funds were in surplus, as had been promised by the reforms of 1983, and it seemed likely that their funding crises looming in the 2030s could be met easily by a minor tweak in the system, not affecting current or near-term future retirees.
Military spending had been reduced since the end of the Cold War, and whereas Daddy Bush and his Congresses had disgracefully wasted the first part of that reduction on social programs, the Clinton/Gingrich combination had kept a tight lid on spending, thus allowing the ebullient economy of those years to produce revenues that soared beyond expenditure. Admittedly, it was obvious even then that some of those revenues were capital gains taxes on the dot-com bubble, but even the market peak of 1999-2000 seems less absurd now than it did then. With continuing tight management of spending, the surplus seemed likely to be maintained in most years; indeed, Fed Chairman Alan Greenspan produced a paper, now appearing utterly fanciful, about how he would manage the Fed after the full elimination of the Federal debt, which was projected to occur in a decade or so. Internationally, U.S. interventions were modest and mostly successful, with the Dayton peace agreement of December 1995 ending the Yugoslav civil war being a notable success.
From the end of 1998, it all went wrong. The Republicans insanely removed Gingrich and replaced him, after one failed nomination, with Dennis Hastert. More serious than Hastert’s child molesting tendencies was his tendency to bloat the Federal budget. Whereas in the Gingrich years the Budget had emerged from the Congressional sausage machine an average $25 billion slimmer than the President sent it in, in Hastert’s first four years, it emerged $25 billion fatter than it went in – and things only got worse from then on.
The problem was made worse by the 2000 election. To an impartial observer, it did not seem to matter much who won that closely fought contest; Gore ran as a follower of Clinton’s moderate policies, while President George W. Bush was his father’s son. Indeed, had he won, Gore might have subjected the U.S. economy to the “climate change” mania earlier than otherwise – though that possibility leads to the delightful thought that we might thereby have skipped President Barack Obama after 2008.
However, the Bush years soon saw a sharp reversal of the benign policies of the 1990s. Most damagingly, Bush, who had promised a “modest” foreign policy that sounded attractive, grossly overreacted to a terrorist attack getting very lucky on 9/11, declaring an “Axis of Evil” of three randomly chosen U.S. antagonists and involving the country in endless (because poorly conducted) wars in Iraq and Afghanistan. Bush also forced through the Patriot Act of 2002, which has since been used in countless ways to deprive Americans of their constitutionally-granted civil liberties, and created an enormous new bureaucracy, the Department of Homeland Security, which proved competent only at self-enlargement. With the aid of Hastert, Bush blew out the Federal budget deficit, ending the benign fiscal picture of the 1990s, and appointed Ben Bernanke as Fed chairman, thus ensuring every delusional “funny money” policy would be tried at least twice. By the time Bush left office in 2009, nobody could reasonably claim that the U.S. was well governed.
Economically, Obama did not do much damage beyond what was already in place. His Obamacare medical reform made the budget deficit worse, but its effect was almost invisible beside the gigantic trillion-dollar deficits left by Bush and the 2007-09 recession. His main ill-effect was in foreign policy, aided by Hillary Clinton; they intervened excessively and generally (as in Libya and Syria) on the wrong side. Add to that the State Department’s subversion in attempting to insert leftist regimes, notably in Macedonia and Ukraine, and you have a drastic worsening of the U.S. strategic position. Even the Financial Times’ reliably leftist Gideon Rachman on December 2 wrote of “The tainted legacy of the Merkel-Obama years” indicating that Obama’s policies were no longer supportable in the market of public opinion, even by the left.
Trump’s first term produced but a brief and modest interlude in the litany of American decline. At least initially, he was forced to work with Bushites in a number of jobs, several of whom such as John Bolton worked consistently to undermine his policies. Most notably, Speaker Paul Ryan, who with a Republican House majority in 2017-18 had one job: to fund President Trump’s WALL and solve the immigration problem, totally failed at that assignment. Then Trump was subjected to an entirely spurious impeachment, followed by an epidemic that is now known to have emerged from a Wuhan lab funded by Dr. Anthony Fauci – this appears to have been a rigging of the 2020 election that preceded all the other actual and potential riggings thereof.
The result was President Joe Biden. Under Biden, the United States drifted yet further from the moderate liberal policies of the 1990s. The budget deficit doubled yet again, as Biden and the Congressional Democrats invented ever more foolish ways to spend $6 trillion per annum. Globally, the United States provided extensive funding for not one but two futile wars in different regions that have shown no sign of ending.
Domestically, the United States unjustly imprisoned some 600 opposition supporters who had participated in an almost entirely peaceful demonstration at the Capitol — which should henceforward be known as the “Pelosi riot” since Speaker Nancy Pelosi withdrew normal protection from the Capitol and sent agents provocateurs into the demonstration to ensure that something bad happened. The Biden/Pelosi regime followed this by a rigged “J6 Committee” staffed only by Democrats and Republican party quislings and by “lawfare” against the opposition Presidential candidate and, more damagingly and disgracefully, against the most successful Mayor of New York of the last century. Biden’s administration is not a liberal regime, it is a leftist quasi-Communist authoritarian junta, without even the merit of being capable. Fortunately, the 2024 election was “Too Big to Rig” – but only just, as demonstrated by the Republicans losing all the close Senate and House races. If U.S. election security is not rectified in the next four years, an infinite series of Soviet-style “elections” will be the result.
As the above description indicates, the United States has moved a very long way from the middle-of-the-road “liberal” government of the 1990s. That Liberal America is indeed dead – there is not the consensus or the inter-party goodwill to revive it. Nor indeed are there any Newt Gingriches in Congress. We are therefore left with two alternatives. One is a “MAGA” populist movement that is rough at the edges and unsound on monetary policy, but on which a return to a populist-conservative fusion may be built. The key will be the success of Elon Musk and Vivek Ramaswamy’s “Department of Government Efficiency” – DOGE. For long-term prosperity, $2 trillion per annum in spending must be cut from the Federal budget, and DOGE is our only albeit remote chance to achieve this.
The other fork leads to the “progressive” wing of the Democrats, bringing hard socialism and severe restriction of civil liberties, once they have emasculated the Supreme Court and the filibuster. The populace will no longer be able to vote them out, or to complain about the Stalin-era living standards they will bring through their “climate change” mania.
Britain lost much when the Liberalism of the amiable Herbert Henry Asquith died, strangely or otherwise. U.S. Liberalism has similarly perished. Let us hope that what replaces it will not be incomparably worse.
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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)