A WEEKLY COMMENTARY
Year Twenty-Nine ... Number Five ... Jaunary 29, 1982
THE MAKE-BELIEVE RETURN OF STATES' RIGHTS
Six months ago, on July 29, 1981 at a Conference of State Legislators held in Atlanta, President Ronald Reagan said, "My administration is staging a quiet federal revolution." Today that federal revolution is no longer a quiet one. In what was purported to be a "State of the Union" address to Congress, Reagan laid out the broad principles of his "New Federalism" program. As he spoke, there was much cued applause at appropriate places. But when he finished, a storm broke out. Some called his address little more than a diversion to shift the spotlight from deficits, unemployment and other fiscal and economic problems that have been growing more and more serious. They said that instead of trying to solve today's problems, the President talked about a long-term plan -- an eight year plan -- that Reagan wouldn't be in the White House long enough to see it completed even if Congress approved it. Others insisted that regardless of the merits of his New Regionalism, first things had to come first. And first things had to do with hungry people, people out of a job, factories closing down and businesses going bankrupt. Still others, especially the Governors of the States and the Mayors of the Cities, wanted to know where they were going to get the money to finance all these welfare programs that the federal government was trying to shift onto them. The arguments became so intense, and so confusing, that it was difficult to know who was promoting what, and why. The President probably started it all by reversing himself several times on several important issues. He was not going to let the Red Chinese government tell him what weapons he could or could not sell to the Nationalist Chinese government on Taiwan. Then on January 11 he reversed himself and said he wouldn't permit the sale of sophisticated jet fighters to the Free Chinese government. No sale of advanced aircraft is required "because no military need for such aircraft exists," said State Department offical Alan Romberg. There arose immediate cries of protest from the New Right which had been growing tired of Reagan's disregard of issues they thought important. Possibly as an attempt at appeasement came an order disallowing IRS persecution of private and church schools and other non-profit institutions on charges of practicing race discrimination. Then came an immediate outcry from "civil rights" advocates and Reagan reversed himself once again; said he did it so Congress could pass a law denying tax exemption to schools practicing racial discrimination. By this time, those leaders of the New Right decided some action was required. They met on January 21 in Washington, issued a biting critique charging that Reagan had made a turn to the left and abandoned the policy goals which had caused them to vote for him in the first place. Said a White House aide, "We badly needed the enthusiastic backing from this base group of Reagan's supporters." So, again an act of appeasement: Reagan formed a Commission and named William Buckley and Clare Booth Luce as members. Somebody must have thought they were conservatives. But the protests continued: The real conservatives demanded no new tax increases, an all-out effort to cut social-entitlement programs, support of bills barring abortions, end of busing to achieve school integration, the State Department must be cleansed of all pro-Kissinger (Rockefeller) influence; the Department was labeled "Haig's plague." U.S. News reported that when asked if they had anyone to turn to except Reagan, Paul Weyrich, President of Coalitions for America, chilled White House officials by warning that in the upcoming November elections the voters "can vote for conservative Democrats or they can stay home."
This warning may have had some effect, at least temporarily, because Reagan had been straddling the political fence on whether to ask for bigger taxes on luxury items (gasoline being called a luxury), or to hold out for no increases in taxes of any kind. And in his State of the Union address he stuck with his original promise not to raise taxes, but to continue to cut them. Further tries at appeasement of this "base group of Reagan's supporters" might be read into the fact that Reagan again spoke of "dismantling" the Department of Education and Energy. And, at least on the surface, Reagan's so-called New Federalism seemed to be a sincere plan for returning to the Sovereign States the rights and powers that belonged to them Constitutionally, but had been gradually gobbled up by a power-hungry federal monster that had got beyond control of the States or the people.
A national election year, a time when all of the Representatives and one-third of the Senators can be replaced or re-elected, is a time for political expediency on the part of "ins" who don't want to become "outs." And it was obvious to every politician who heard Reagan's address that he was proposing a long-range program that had little or nothing to do with the immediate problems of today and now. So, since nothing could be done about the recession, deficits, unemployment, bankruptcies and idle industrial plants, a scapegoat had to be found. The blame for all this must be placed on something besides Reaganomics. And, wonder of wonders, a previously sacrosanct and untouchable institution was selected. The Federal Reserve System was the culprit. It was the goat that would bear the sins of the Reagan Administration and the 97th Congress! And, lo and behold, people in high places began saying out loud some of the things some of us have been saying about the Federal Reserve for many years.
In a recent press conference President Reagan said that the Federal Reserve System is autonomous. That means the Fed is its own boss, governs itself and nobody can give it any orders except its own stockholders. Reagan as much as admitted that he could do nothing about the Fed, could only appeal to it for the support he had not been getting. Then in his State of the Union address, President Reagan again referred to the Fed. He said that economic recovery depended upon, among other things, "a healthy dollar and a stable monetary policy -- the latter a responsibility of the Federal Reserve System." Unquote.
Then, when the political storm broke after the President's address, a person who had supported, lived with and worked with the Federal Reserve System for all of his professional life, came out with an unexpected blast against the Fed. Treasury Secretary Donald Regan told a joint Economic Committee of Congress that the Federal Reserve was to blame for the current deep recession. He warned that further "erratic" control of the money supply could derail Reagan's program for economic recovery. But Regan wouldn't go all the way. He said "the president is not going to call for (the) resignation" of Paul Volcker, present chairman of the central bank. Still, said Regan, "A steady monetary policy is absolutely essential if we are to steady the financial markets and reduce interest rates. Stability is the key requirement for any permanent recovery in output and unemployment." So, we have our scapegoat -- our present economic predicament is the fault of the Federal Reserve System but, supposedly, there isn't a thing we can do about it. Because the Federal Reserve Corporation is "an independent, autonomous agency which makes its own decisions."
However, says President Reagan, there is something else that can and should be done: The Congress should approve and proceed to implement his New Federalism program, which at least is a diversion and at most is presented as a long-range cure of our economic ills.
It is important to understand that there is nothing new about this slogan "New Federalism." It's been used before, and for a similar purpose. On August 8, 1969, President Richard Nixon said: "After a third of a century of power flowing from the people and the states to Washington, it is time for a New Federalism in which power, funds and responsibility will flow from Washington to the states and the people." This statement was made when Nixon was urging Congress to approve his "revenue sharing" plan; which Congress did. It should also be understood that it was President Nixon who first initiated the Concept of Regional Governance. He divided the Nation into Ten Federal Regions each with its own regional capital and its appointed Regional Council to govern and administer the disbursement of those revenue sharing funds. In short, Nixon's New Federalism consisted of the establishment of a new fourth, and unconstitutional branch of federal government. In theory, it was expected that State and local governments would be free to use Nixon's "shared revenue" as they saw fit (and as Nixon had indicated). But it didn't work out that way. Regional and Sub-Regional authorities were set up, and before any of this "shared revenue" could be used, the express purpose of its use had to be approved by the appropriate federal angecy. Revenue Sharing simply provided a way that could be used by the federal administration to control state and local administrations in all their development and promotional projects. This was the basis of that first "New Federalism."
Seven and a half years later a new Republican President borrows the same old slogan, "New Federalism," and proposes another step in the development and completion of the Regional Governance Concept. Again, the operation of some programs, especially welfare programs, will be turned over to the States for administration and operation. But, because there is much money involved, the president proposes that a federal trust fund be established to provide some of the money the States will need. So, here is nothing more than an extension of the Revenue Sharing program. The power to administer will be turned over to the States and their agencies, but the money will be provided, but only after the particular program has been approved by the appropriate federal agency! And for this purpose, the Ten Federal Regional Capitals to control and direct! This is hardly a returning to the States the powers and rights conferred by the Tenth Amendment to the United States Constitution:
| The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. |
One more peculiar aspect of President Reagan's New Federalism concerns the Departments of Education and Energy. Among President Reagan's many campaign promises was the assurance that as soon as he was able, he would eliminate these two new departments that had been created by President Carter. But Secretaries were duly appointed, they continued to operate. In fact, when he restructured and re-established the Ten Federal Regions with their respective capitals and appointed administrative councils, Reagan included these two departments in the Regional makeup. Still, in his State of the Union addres, possibly to appease the New Right, he said: "The budget plan I submit on February 8 will realize major savings by dismantling the Departments of Energy and Education, and by eliminating ineffective subsidies for business." Notice the phrase "by dismantling the Departments." Not by eliminating, but by dismantling. Which implies that the departments may disappear in name but that their activities will be shifted to other federal agencies. That is, if the departments are even eliminated. For, if Reagan really intended to do away with them, then why include them specifically in his Executive Order #12314, establishing Federal Regional Councils?
One other thing. It is known that, along with President Nixon, Governor Reagan was a proponent and an official participant in the creation of the Federal Regional Governance System. In fact, California became a test State for some of the experiments in federal power-grabbing. As President, he has a dream: that of not only operating a National Regional Government; but of establishing a Regional World Government, composed initially of Canada, Mexico, and the United States. Unlike Reagan's proposed federal revolution, Canada under the leadership of Trudeau has already undergone its revolution. It has involved a change in principles, values and direction. The Trudeau policy entails federal control of every major activity in every region of Canada. His is the socialist credo: personal freedom must be subordinated to the collective good. The only way to achieve this: centralization of power is essential. A government is not created to serve the individual, it is created for the individual to serve it, for the common good. Moreover, Trudeau is dedicated to the United Nation's New International Economic Order and to the One World Government which must follow. Trudeau described his navigation of the Canadian Ship of State in these words: "I have spun the wheel and I know that the rudder is beginning to press against the waves of the sea ... The observer who is on the deck and smoking his pipe, or drinking his tea, sees the horizon in much the same direction and he doesn't realize that he will find himself disembarking at a different island than the one he thought he was sailing for!" (Quotation compliments of Globescan, U.S. Office, 1545 New York Ave., N.E. Washington, D.C., 20002, 1 year (24 issues) $125).
So much for the plight of our longtime friend and ally Canada. Trudeau seeks to legalize a new constitution which would make of our northern neighbor a totally Socialized State, a thinly disguised dictatorship with all property rights sacrificed and individual freedoms curtailed. As for our neighbor to the south, it has been publicly proclaimed that the Mexican government looks upon Cuba's Castra as its best friend, and looks to Washington with dislike and distrust. Currently much agitation is being stirred up through a Communist-inspired demand for the return of "stolen Mexican land" in Texas, Arizona, New Mexico and California. And against this background, with Socialism to the north of us, incipent Communism to the south of us, and with Welfarism and Corporate Socialism polluting our own body politic, President Reagan voices the hope that he can create a North American Common Market similar to the European Common market which already has integrated its members into a Regional World Government. Its latest move: the call for installation on January 1, 1985 of a "European Community passport" for all of its inhabitants, regardless of country of original origin. Against quoting Globescan: "The pincer is closing on the U.S.! Europe and Africa are socialist; and most of Asia and South-East Asia also. Latin America is unstable -- the world is in a terrible crisis provoked by Socialism and financed by an International Establishment intent on having now -- right now -- a unified world that they can control."
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