The trouble is, as sagacious as people like Kevin Drum are when compared to simple-minded people like Jonah Goldberg, these guardians of the main currents of enlightened opinion fail to think beyond stage one: Why is it that bankers won't learn from their mistakes? What incentive structures have been put in place or, as importantly, what has been demolished, so as to discourage them from learning from their mistakes?

Demolished might be too strong a word. Decayed, dissolved, deteriorated might all be better descriptions, as in a building not well maintained, as with much of our public infrastructure (oh, but shovel-ready will fix this as well!)

Here is the question they dislike most, as it reflects a shocking lack of faith in our ability to solve public problems through collective action: Have the institutions they favor demonstrated a better capacity for learning from their mistakes than the ones they mock? If not, why not?

Are California or Michigan or New York &tc doing better learning from their mistakes than Goldman Sachs is? Are they really? We mock the idea that bankers are, but is it a fair mockery? Or the gaunt, chilling laugh of those who are practically undead themselves?

Have the PIIGS learned from their mistakes? Really now, have they? Is there at least as much at stake here as there is in even the biggest "too big to fail" bank or corporation?

Those who think the problem was embedded in a previous Administration or one side of the aisle need to free their minds as well. The reassuring myth that it is all caused by having the wrong sort of people in government, and now we've got the right sort of master-minds involved; those who believe in government and have faith in its capacity to solve all problems, is one they may want to reconsider, and take a more historical view. If they can open their mind to untainted history.

A few points to keep in mind as they open their minds: Firstly, a group that swept into power asserting that they were going to make break with the failed policies of the past often use as one of their cudgels against those who object to their policies the fact that their policies are no different from that of the previous Administration's. This double-think has an old and dishonorable history, dating back at least to the Administration they most admire: FDR's, which has gone down in progressive history as a sharp contrast from the supposedly do-nothing lassez faire Hoover Administration, when the truth was "practically the whole New Deal was extrapolated from programs that Hoover started," as Rex Tugwell admitted.

Why is this ancient history important? Isn't it true that only cranks and nutters, usually on TV or Radio or at some obscure Think Tank, rave on about comparisons between Hoover and FDR? True, but ideological finger-pointing and sneering over this obscures rather than illuminates: It closes the mind you want open to engage in any reconsideration.

Exactly as it is meant to.

In this way, we lose track of the original task: Unravelling the big ball of string that has come down to us, in order to see where it leads us in answering our question: Why our are institutions, private as well as public, apparently no longer capable of learning from experience?

(Btw, how's fixing education working out for you? How has throwing money at the problem worked out for you? Do you retain faith in the same government that has complete and sole responsible for one District's public education system, the District of Columbia's, to solve the problem's of our country's education system? Where does DC rank in per-pupil spending? Has it become the shining jewel which the rest of the country should emulate?. Over the last, pick a time period, lets say 35 years, has government learned from its mistakes when it comes to the provision of education? And yet the wise are confident it will do the best of all possible jobs when it comes to, say, health care...or student loans...or home mortgages...or the auto industry).

Our enlightened, when they speak of society's problems and the need for "society" to address them, they always mean by the later government. <--- Non-sequitur inserted to keep in mind when considering all of this.

Is their confident mocking laughter really warranted? From who's knee have the Banker's learned from since 1933 (or before)? Who shields them from the consequences of their own decisions? Who is shielding the rest of us from the consequences of ours? This confidence that we out here, private individuals and institutions, make mistakes, make blunders, but they are wise and will ever nudge us in the Correct Direction, save us from folly, and never lead us all into folly or, like lemmings, off a cliff (such as a cliff of unsustainable unfunded future mandates): Is it justified?

I assume the proper response is: If only we fallible members of the public would ever select the "correct" people to hold public trust, and never the "Right," all would be well: But again, it is our blundering that makes a mess out of their efforts on our behalf. We should not mock this confidence they have in their own ability, good intentions, and their sense that it is only the saboteurs and wreckers that constitute their political opposition who cause failures in government. But we should question this confidence as we untangle the ball of string that they have handed us in the form of opinion-leading Lippmanesque journalism and Schlessingeresque Court Historianism.

We might find that the tu quoque isn't a tu quoque at all, and that indeed it is their mindset that is the source of much of what they decry: That in the evolution of things, the problem is they have created a government that creates problems, then appoints itself to fix them, rinse and repeat ad infinatum, and that after sufficient iterations of this there is an utter displacement of responsibility. Who or what for example is really entirely to blame for the financial crisis? Both and all sides have some merit in the narratives they construct in order to point fingers at their despised boogiemen and hated political opponents. When everyone is responsible, no one is responsible, and this is the political economy we have created, and will deserve until we fix it "as a society."

If you know the solution, you're a better man than I am, Gunga Din. But if you think you know the solution with the confident mockery that some have, but the solution you have is a sham-solution, one that merely iterates the cycle again rather than breaking and reversing it, then you are not a better man at all, but the worst, however full of passionate intensity you may be.

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I have been asked to talk about the respective powers of the National and State Governments to rule and regulate, where one begins and the other ends. By some curious twist of the public mind, under the terms "Home Rule" or "States' Rights," this problem has been considered by many to apply, primarily, to the prohibition issue.

As a matter of fact and law, the governing rights of the States are all of those which have not been surrendered to the National Government by the Constitution or its amendments. Wisely or unwisely, people know that under the Eighteenth Amendment Congress has been given the right to legislate on this particular subject, but this is not the case in the matter of a great number of other vital problems of government, such as the conduct of public utilities, of banks, of insurance, of business, of agriculture, of education, of social welfare and of a dozen other important features. In these, Washington must not be encouraged to interfere.

The proper relations between the government of the United States and the governments of the separate States thereof depend entirely, in their legal aspects, on what powers have been voluntarily ceded to the central government by the States themselves. What these powers of government are is contained in our Federal Constitution, either by direct language, by judicial interpretation thereof during many years, or by implication so plain as to have been recognized by the people generally.

The United States Constitution has proved itself the more marvelously elastic compilation of rules of government ever written. Drawn up at a time when the population of this country was practically confined to a fringe along our Atlantic coast, combining into one nation for the first time scattered and feeble States, newly released from the autocratic control of the English Government, its preparation involved innumerable compromises between the different Commonwealths. Fortunately for the stability of our Nation, it was already apparent that the vastness of the territory presented geographical and climatic differences which gave to the States wide differences in the nature of their industry, their agriculture and their commerce. Already the New England States had turned toward shipping and manufacturing, while the South was devoting itself almost exclusively to the easier agriculture which a milder climate permitted. Thus, it was clear to the framers of our Constitution that the greatest possible liberty of self-government must be given to each State, and that any national administration attempting to make all laws for the whole Nation, such as was wholly practical in Great Britain, would inevitably result at some future time in a dissolution of the Union itself.

The preservation of this "Home Rule" by the States is not a cry of jealous Commonwealths seeking their own aggrandizement at the expense of sister States. It is a fundamental necessity if we are to remain a truly united country. The whole success of our democracy has not been that it is a democracy wherein the will of a bare majority of the total inhabitants is imposed upon the minority, but that it has been a democracy where through a division of government into units called States the rights and interests of the minority have been respected and have always been given a voice in the control of our affairs. This is the principle on which the little State of Rhode Island is given just as large a voice in our national Senate as the great State of New York.

The moment a mere numerical superiority by either States or voters in this country proceeds to ignore the needs and desires of the minority, and, for their own selfish purposes or advancement, hamper or oppress that minority, or debar them in any way from equal privileges and equal rights - that moment will mark the failure of our constitutional system.

For this reason a proper understanding of the fundamental powers of the States is very necessary and important. There are, I am sorry to say, danger signals flying. A lack of study and knowledge of the matter of sovereign power of the people through State government has led us to drift insensibly toward that dangerous disregard of minority needs which marks the beginning of autocracy. Let us not forget that there can be an autocracy of special classes or commercial interests which is utterly incompatible with a real democracy whose boasted motto is, "of the people, by the people and for the people." Already the more thinly populated agricultural districts of the West are bitterly complaining that rich and powerful industrial interests of the East have shaped the course of government to selfish advantage.

The doctrine of regulation and legislation by "master minds," in whose judgment and will all the people may gladly and quietly acquiesce, has been too glaringly apparent at Washington during these last ten years. [For "master minds" read also "brain trust", "best and brightest", genius "Czars" - Porphy] Were it possible to find "master minds" so unselfish, so willing to decide unhesitatingly against their own personal interests or private prejudices, men almost god-like in their ability to hold the scales of Justice with an even hand, such a government might be to the interest of the country, but there are none such on our political horizon, and we cannot expect a complete reversal of all the teachings of history.

Now, to bring about government by oligarchy masquerading as democracy, it is fundamentally essential that practically all authority and control be centralized in our National Government. The individual sovereignty of our States must first be destroyed, except in mere minor matters of legislation. We are safe from the danger of any such departure from the principles on which this country was founded just so long as the individual home rule of the States is scrupulously preserved and fought for whenever it seems in danger.

Thus it will be seen that this "Home Rule" is a most important thing, a most vital thing, if we are to continue along the course on which we have so far progressed with such unprecedented success.

Let us see, then, what are the rights of the different States, as distinguished from the rights of the National Government. The Constitution says that "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," and Article IX, which precedes this, reads: "The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people."

Now, what are the powers delegated to the United States by the Constitution? First of all, the National Government is entrusted with the duty of protecting any or all States from the danger of invasion or conquest by foreign powers by sea or land, and in return the States surrender the right to engage in any private wars of their own. This involves, of course, the creation of the army and navy and the right to enroll citizens of any State in time of need. Next is given the treaty-making power and the sole right of all intercourse with foreign States, the issuing of money and its protection from counterfeiting. The regulation of weights and measures so as to be uniform, the entire control and regulation of commerce with foreign nations and among the several States, the protection of patents and copyrights, the erection of minor Federal tribunals throughout the country, and the establishment of post offices are specifically enumerated. The power to collect taxes, duties and imposts, to pay the debts for the common defense and general welfare of the country is also given to the United States Congress, as the law-making body of the Nation.

It is interesting to note that under the power to create post offices the Constitution specifically provides for the building of post roads as a Federal enterprise, thus early recognizing that good roads were of benefit to intercommunications between the several States, and that districts too poor to afford to construct them at their own expense were entitled to some measure of Federal assistance. It is on this same principle that New York and other States are aiding rural counties, or constructing entirely at State expense improved thoroughfares suited to modern traffic. The Constitution also contains guarantees of religious freedom, of equality before the law of all possible acts of injustice to the individual citizens; and Congress is empowered to pass laws enforcing these guarantees of the Constitution, which is declared to be the supreme law of the land.

On such a small foundation have we erected the whole enormous fabric of Federal Government which costs us now $3,500,000,000 every year, and if we do not halt this steady process of building commissions and regulatory bodies and special legislation like huge inverted pyramids over every one of the simple Constitutional provisions, we shall soon be spending many billions of dollars more.

A few additional powers have been granted to the Federal Government by subsequent amendments. Slavery has been prohibited. All citizens, including women, have been given the franchise; the right to levy taxes on income, as well as the famous Eighteenth Amendment regarding intoxicating liquors, practically complete these later changes.

So much for what may be called the "legal side of national versus State sovereignty." But what are the underlying principles on which this Government is founded? There is, first and foremost, the new thought that every citizen is entitled to live his own life in his own way so long as his conduct does not injure any of his fellowmen. This was to be a new "Land of Promise" where a man could worship God in the way he saw fit, where he could rise by industry, thrift and intelligence to the highest places in the Commonwealth, where he could be secure from tyranny and injustice - a free agent, the maker or the destroyer of his own destiny.

But the minute a man or any collection of men sought to achieve power or wealth by crowding others off the path of progress, by using their strength, individually or collectively, to force the weak to the wall - that moment the whole power of Government, backed, as is every edict of the Government, by the entire army and navy of the United States, was pledged to make progress through tyranny or oppression impossible.

On this sure foundation of the protection of the weak against the strong; stone by stone, our entire edifice of Government has been erected. As the individual is protected from possible oppression by his neighbors, so the smallest political unit, the town, is, in theory at least, allowed to manage its own affairs, secure from undue interference by the larger unit of the county which, in turn, is protected from mischievous meddling by the State.

This is what we call the doctrine of "Home Rule," and the whole spirit and intent of the Constitution is to carry this great principle into the relations between the National Government and the Governments of the States.

Let us remember that from the very beginning differences in climate, soil, conditions, habits and modes of living in States separated by thousands of miles rendered it necessary to give the fullest individual latitude to the individual States. Let us further remember that the mining States of the Rockies, the fertile savannas of the South, the prairies of the West, and the rocky soil of the New England States created many problems and introduced many factors in each locality, which have no existence in others. It must be obvious that almost every new or old problem of government must be solved, if it is to be solved to the satisfaction of the people of the whole country, by each State in its own way.

There are many glaring examples where exclusive Federal control is manifestly against the scheme and intent of our Constitution.

It is, to me, unfortunate that under a clause in our Constitution, itself primarily intended for an entirely different purpose, our Federal Courts have been made a refuge by those who seek to evade the mandates of the State Judiciary. [Commerce Clause, anyone? - Porphy]

I think if we understand what I have tried to make clear tonight as to the fundamental principles on which our Government is built, and what the underlying idea of the relations between individuals and States and States and the National Government should be, we can all of us reason for ourselves what should be the proper course in regard to Federal legislation on any questions of the day.

That Governor was, of course, the Governor of New York, a man who certainly knew a Blueprint for Action when he saw one: FDR.

(Per text in his Public Papers and Addresses, 1938, I, 569---also New York Times March 3, 1930)

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