Zero-Sum Federalism


A Display of State Flags

Our federal bonds are fraying.

We Americans increasingly are conditioned to view federalism and, along with it, national unity, in zero-sum terms. And why should we be surprised? The century-old cookie-cutter-style federalism imposed on this country via Wilsonian progressivism has been stretched far beyond the limits of its design function. It’s grown increasingly threadbare. It’s no longer equipped to accommodate the world’s largest and most diverse economy, much less a culture that is growing increasingly diverse and divided.

The latest evidence attesting to that fact: The uproar among several blue states – California, New York, Connecticut and Oregon, to name a few – over the House Republican tax cut plan.

The House bill would eliminate the most widely-used deduction – income tax – and would cap property tax deductions, the second most-used, at $10,000. Here’s the rub: Many high tax blue states rely heavily on these state and local deductions. Consequently, many middle-class families in these states will end up paying more under the plan.

This is a lesson in history repeating itself – and possibly with dire consequences. This growing dissension among states over tax policy bears remarkable parallels to the vexatious debates over tariff policy in the years leading up to the Civil War. This dissension contributed mightily to the already toxic relations between the manufacturing Northeastern states, which favored high, protective tariffs, and the agrarian, slave-holding, export-oriented Southern states, which that not only insisted on low tariffs levied only to raise essential federal revenue.

And, honestly, why should blue states be expected to foot tax relief for the rest of the country?

Some here in the red hinterland would argue that states that operate expansive and expensive safety nets have no grounds for complaint. But isn’t this their prerogative as sovereign states within a federal union?

This brings me to a social media exchange I had with some friends this morning regarding the future of the country and strategies for restoring some semblance of a social policy, one that accommodates all regions and classes throughout country.

Frankly, I think that’s proving increasingly impossible, partly for the reasons I outline above.

For the last generation or so, I’ve striven to become an amateur scholar of post-war politics and economics of post-war West Germany. As a Tory conservative, I believe that there is much that Americans in the highly secularized, post-Christian 21st century can learn from this morally ravaged society.

I admire the old Christian Democratic party, which strove to restore a measure sanity to a morally and ethically gutted out post-Nazi society. Moreover, I admire deeply the social market economy that emerged after the war. As this term, social market, implies, it was an attempt by the Christian Democratic Chancellor Konrad Adenauer and his fledgling party not only to stave off socialism but also to build a vibrant post-war free-market economy, albeit one that would provide a reasonably generous safety net and collective bargaining for the working class.

Frankly I would like to replicate some version of the social market to conditions in the United States, but the more I reflect on this, the more it occurs to me that this country is simply too big and diverse – not to mention, too badly divided – to implement any such system over a vast scale. What worked – and, to a degree, still works – in a relatively organic society like Germany, simply isn’t tenable in this United States. I could marshal a number of historical arguments for his, but in the interests of brevity, I wont.
Suffice it to say that blue-state Americans seem to regard any concession to red-state America as tantamount to moral betrayal and vice versa. We seem to have fallen into a sort of toxic, zero-sum paranoia.

Under the circumstances, maybe we really are past the point where any kind of humane social order can be established in a nation as large and diverse as the present-day United States. Indeed, the more I think about all of this, the more inclined I am to adhere to the vision a new constitutional order outlined by the late American diplomat and statesman George F. Kennan. Maybe the only viable option for American federalism is to heed his call to devolve power to 10 to 12 smaller entities, which Kennan described as constituent republics where citizens share strong historical and cultural affinities.

We could still share a common market and a common defense, but responsibilities for implementing social policies such as healthcare, social security, etc., would be left more or less exclusively to these constituent republics.
Yes, this amounts to a systemic, radical change, but is there really any other choice? Aren’t many states evolving what amounts to different social and economic systems? California, which possesses the fifth largest economy in the world, has evolved social policies and even a legal system that diverges significantly from much of the rest of the country.
Under the circumstances, why should we be surprised that states increasingly regard federalism as a zero-sum game?

About Jim Langcuster

A Southern late-Baby Boomer whose post-retirement focus is on building a post-racial, post-Confederate Southern regional identity. If the election of 2016 underscored one thing, it is that this country is intractably divided and that radical devolution of power to localities and states is the only way to save the American Union.
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