Wednesday, March 28, 2012

New age of Jefferson: How will the world respond to American decentralization?

By Bernie Quigley

For The Hill on 3/28/12

The optimists on Charlie Rose Wednesday night said likely the vote would likely preserve Obamacare. Turning back the way of life since FDR seemed unrealistic. The war of ideas between centralization and decentralization is supposed to have been settled at Cemetery Ridge. But this is not over. Senator Mike Lee of Utah said 5-4 turning back the Obama initiative.

Pundits say it is as important as Brown v. Board of Education. It is a good comparison in that yes, what the Court rules this week will change America. I felt the best perspective was in an editorial, Bracing for the Court in the New York Sun. They compare the challenge today to an appeal to the Supreme Court in 1935 by a family of kosher butchers, challenged the constitutionality of the National Industrial Recovery Act, which was the centerpiece of the New Deal. They appealed to the Supreme Court on much the same grounds as the states are now making their appeal on health care.

But consider the scope of the challenge to centralization then and that today. This is not a challenge from a family of kosher butchers in Brooklyn. The challenge to centralization today comes from 26 states. It goes beyond Brown v Board of Education and past Schechter Poultry v. U.S. It goes to our very beginnings.
America’s outward trajectory in the world depended on New York consolidation of power in the Roosevelt era and before in the Lincoln era. But it harks back to Alexander Hamilton. Centralization of capital and power was Hamilton’s vision. Thus the name, the “empire” state. But is New York still the Empire State? One would assume so reading The New Yorker or watching Charlie Rose, but the cash on which those assumptions were based for more than 200 years has dispersed. Capital runs today lickety split throughout the regions and throughout the world. In fact, there is clearly more now on the other side of the world than here. In fiscal and economic matters, decentralization has already happened.

In the stock market crash of September, 2008, legendary investor Jim Rogers said, “London and New York are finished.” Rogers has a historic view of economy and sees a cycle of farming rising to industrialization and then tailing off to an age of investment which occurred in New York in the Reagan/Clinton period. Then the age falls fallow. Things go back to farming and the heartland, rich in commodities, is a healthy place to start the world again.

And here we have completed that arc. The country is full. The states are beginning to think for themselves. That, I expect, the Justices understand, with a challenge presented to them today by 26 states.

In the beginning, wrote historian Frank Owsley, two men defined the fundamental principles of America, Hamilton and Jefferson. Hamilton was for extreme centralization, while Jefferson was for extreme decentralization.
When America moved to centralization in the 1850s the world followed. But today, decentralization is even a theme in massively popular pop cultural venues like The Hunger Games.

How will stocks and world markets respond to American decentralization? Hamilton’s vision has reigned since about the time Mozart was writing the Requiem. This is the turning we are at today. How will the world respond instead to Jefferson?

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