Broker Check

What we need to do to save the democracy that we cherish

April 16, 2020

I was so impressed with this article by the president of Hillsdale College that I had to share it with all of you. It is insightful and frankly right on point about our government, the agencies within our government and what we need to do to save the democracy that we cherish. Read it and share it with friends and family. I agree with everything said in this article and support his recommendations. Some of what you will read will shock you, but it is important to know the facts. Interestingly, you will not see this in the press.


Thoughts on the Current Crisis 

March/April 2020 • Volume 49, Number 3/4 • Larry P. Arnn 

Larry P. Arnn 

President, Hillsdale College 

…The same cannot be said for the federal agencies assigned to protect the public health. As I write, I am not confident that I know whether all of the current economic shutdowns in the United States are necessary to stop the virus. Every hour I read some authoritative person saying yes, and the next hour I read some authoritative person saying no. What I am confident about is that we were not prepared for this pandemic, and yet we spend an enormous amount of money on a centralized bureaucracy that now operates top down from the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the National Institutes of Health (NIH), and other agencies to Hillsdale, Michigan, and tens of thousands of other communities. 

Why didn’t we have testing kits early on, which seems to have been one of the keys to South Korea’s success in dealing with the virus? Why didn’t we have masks? Why didn’t we have ventilators? I am told that our national stockpile of these things was depleted during the swine flu pandemic of 2009 and never built back up. I am told that there has been an unsuccessful push to produce a stockpile of ventilators going back to the end of the second Bush administration and extending through President Obama’s two terms, and that the FDA has delayed production recently by taking five years to approve a new ventilator design. There is no doubt that there are many people at fault, but above all the blame lies with the bureaucratic form of government that has developed in our country since the 1960s. 

To take just one example, the CDC was created in 1942 as the Office of National Defense Malaria Control Activities, and in 1946 was renamed the Communicable Disease Center. For many decades it focused its full efforts on its original mission: viruses and communicable diseases. But by the 2000s, the CDC, like most executive agencies, had become largely independent of political control and lost its focus. It had widened its work to include chronic diseases and addictions, nutrition, school health, injuries, and—a telltale sign of ideological corruption and mission creep—racial and ethnic approaches to community health. It is a logical fact that if you favor some people you must disfavor others. 

In 2007, the late Senator Tom Coburn issued a well-documented report entitled, “CDC Off Center—A review of how an agency tasked with fighting and preventing disease has spent hundreds of millions of tax dollars for failed prevention efforts, international junkets, and lavish facilities, but cannot demonstrate it is controlling disease.” In the years since, there have been reports documenting multi-million dollar CDC studies on topics like the prevention of gun violence, how parents should discipline children, and chronic health conditions among lesbian, gay, and bisexual populations. 

In 2017 alone, the CDC spent over $1.1 billion on chronic disease prevention and health promotion, $215 million on environmental health, and $285 million on injury prevention—all purposes that are addressed by other federal agencies. That money could have been used to prepare for communicable diseases, including replenishment of our stockpile of masks and ventilators. In other words, it could have been used to do the work the CDC was created to do. 

The communist government of China, where the coronavirus originated sometime last fall, deserves the harshest criticism at the very least for allowing the crisis to get out of control. As is now well known, Li Wenliang, the doctor who first sounded the alarm about the virus’s outbreak in the province of Wuhan (and who subsequently died of the virus), was disciplined by the Chinese government for “spreading rumors” injurious to the state. More recently, Ai Fen, the head of emergency at the Wuhan Central Hospital, gave an interview condemning the government for its lies about the virus—specifically, its denial that the virus was transferable between humans—and she has since disappeared. As a result of the Chinese government’s deceit, a worldwide pandemic that might well have been prevented is costing countless lives. 

For example, the now famous Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases in the NIH, did not understand the risks of the virus as late as January 26. During a radio interview with host John Catsimatidis, he said that the American public shouldn’t worry about the coronavirus outbreak in China. “It’s a very, very low risk to the United States,” Fauci said. He continued: 

But it’s something that we as public health officials need to take very seriously. . . . It isn’t something that the American public needs to worry about or be frightened about, because we have ways of preparing and screening of people coming in [from China]. And we have ways of responding—like we did with this one case in Seattle, Washington, who had traveled to China and brought back the infection. 

His point is clear: we experts need to worry, not the public. But it is the public that must bear the cost of this disruption, and the public should be enlisted in something other than a passive capacity to help stop the virus. It was President Trump, much criticized for it at the time, who closed our borders to China on February 2. Fauci and many other public health officials have since praised that decision, but many experts opposed it. 

One needed response to the pandemic is already taking shape with the introduction of legislation by Senator Tom Cotton and others to return pharmaceutical manufacturing to the United States. How many of us realized before this crisis the extent of our dependence on China for medical drugs and supplies? How many knew that China produces around 40 percent of the total world supply of “active pharmaceutical ingredients,” including 97 percent of the U.S. market for antibiotics? Or that it produces 50 percent of the world’s surgical masks? 

Did these facts raise red flags at the CDC? They should have. There was a reason that the original name of the CDC, created during World War II, included the words “national defense.” One thinks of something Winston Churchill said in 1934: 

We cannot afford to confide the safety of our country to the passions or to the panic of any foreign nation which may be facing some desperate crisis. We must be independent. We must be free. We must preserve our full latitude and discretion of choice. 

We should look at how much money the NIH, the CDC, and other U.S. public health agencies give to China, and reconsider that largesse. We should also reconsider our support of the United Nations’ World Health Organization (WHO), of which we are by far the chief financial supporter. Recent budgets show that the WHO spends two times more on travel than on medical supplies, and it has defended and parroted the lies of the communist Chinese government during this crisis as if it were a wholly owned subsidiary. At a January 28 meeting with China’s President Xi, for instance, the director general of the WHO, Tedros Adhanom Ghebreyesus, gave Xi personal credit for his efforts to tackle the crisis, and complimented the Chinese government’s transparency (which in fact had been nonexistent). For weeks after President Trump closed our borders to China, and even after other countries began doing the same, the WHO continued advising against such travel restrictions as economically harmful (presumably to China). And on February 21, with the pandemic looming, the WHO credited China with giving the world “a fighting chance of containing the spread” of the virus, when exactly the opposite was true. 

It is also worth noting that Taiwan, which has some experience in battling viruses that cross the 110-mile Taiwan Strait separating it from communist China, reported its concerns about the severity of the coronavirus to the WHO in late December but was ignored. Taiwan, we might recall, was barred from participating in the WHO in 2016 at China’s insistence after Taiwan elected a president who strongly opposes China’s attempts to bring Taiwan under its full control. Despite Taiwan’s early warnings and subsequent success containing the coronavirus, it was excluded from attending, even as an observer, the Emergency Committee meeting convened by the WHO on January 22 and 23 to determine the severity of the virus and the potential for a pandemic. 


More dangerous in the long run than the failure of our health experts is the idea that they and others with scientific expertise should run our government. President Trump has been consistently criticized by the media and others on the Left for his frustration that our economy has been shut down and for his eagerness—whether through a successful treatment for the virus or some other means—to restart the economy and get people back to work. Time and again he has been challenged as to whether he would dare go against the advice of his medical experts. 

Why would we not want to be governed on the basis of scientific expertise? 

Start with the fact that expertise is necessarily narrow. To be a nuclear physicist or to be a medical doctor takes years or decades of focus. It is rare for anyone to possess this high expertise in more than one field, impossible for anyone to have expertise in as many as ten. But the problems we face are not presented in the silos that are necessary to gaining expertise. There must be some art of coordinating the knowledge and forming a policy that addresses our problems in their entirety. 

Aristotle writes that the architect does not know how to lay bricks as well as the bricklayer, but he knows how to direct the bricklayer toward the completion of the building. The word “architect” comes from two Greek words: arche, which means “ruling principle,” and techne, which means “art” or “making” (the word “technology” derives from this word as well). So architecture means the ruling art, and it is a form of the kind of understanding every person must have to manage his life. The classical word for it is prudence. It is the common-sense capacity we each have to pursue the proper ends of life amidst a welter of constantly shifting circumstances. 

This is actually the intellectual basis that underlies free government. If decisions are made ultimately according to common sense, and if everyone can have it, then we are able as well as entitled to manage the affairs of the nation as citizens who deliberate together. 

Here is Churchill again: 

I decline to admit there are any experts in democracy in [the House of Commons]. We are all elected on equal terms and have a right to equal credit and consideration. We are elected on the widest franchise obtaining in any country in the world, and it is our business to see that the people’s rights are not derogated from or prejudiced in any respect. 

We must of course listen to experts, just as Churchill did, but expertise cannot as a simple fact of principle tell us finally what is right to do. 

This is why it is offensive when any member of our government, expert or not, addresses us chiefly as carriers of a pathogen to be kept indefinitely in our homes. Keeping us in our homes may be necessary in extreme circumstances, and it may be necessary in these circumstances, but officials should be extremely reluctant about it. At a recent White House briefing on the virus, one of the medical experts began scolding Americans, saying that based on the experts’ models, the virus curve was not bending enough because people were not following the rules of distancing to a sufficient extent. The President interrupted to praise Americans for the active steps they were taking for the country, including not just those staying at home but those millions who were performing necessary tasks. (The next day, that same expert told Americans that they should not go to the grocery store, forgetting I guess that we pathogen-carriers need to eat.) 

The experts with their narrow points of view, backed by the media, urge the President to declare a national economic shutdown. The President has wisely left the shutdowns to the governors on a case-by-case basis, which will also allow some governors to end shutdowns earlier than others based on the circumstances in their states. The experts with their narrow points of view, backed by the media, have resisted recommending treatments for the disease that show promise—these treatments need to go through rigorous testing for months or years, they say—whereas the President urges the use of treatments that show promise in hopes of saving lives and getting back to work sooner. As he rightly points out, at some point the costs of devastating our economy will become worse than those of the virus. 

Economist Brian Wesbury predicted that keeping the economy closed until Easter would cost the economy three percent of its capacity; until the end of April, eight percent; and until the end of May, 15 percent. There are 30 million businesses in America, which means the loss of nearly a million of them at a minimum and 4.5 million by the end of May. That is 4.5 million people who have built enterprises with sweat and toil and always at risk, not to mention the millions more who they employ. 

Wesbury also wonders why these shutdown orders are so sweeping. Why cannot landscapers work? Why cannot factories be allowed to remain open, even if it means increasing the number of shifts? He mentions that the highest suicide rate in America’s history was during the Great Depression. What expertise, by itself, can take all these factors into account? I personally wonder why hospitals here in Michigan are running out of money and laying people off and worrying about closing because our Governor has forbidden “non-essential” surgeries. If the people being laid off cannot help with coronavirus treatments, why are they not allowed to do other work? 

It is hard to admire the $2 trillion bill Congress recently passed to address this problem. Critics have made much of the fact that it included $25 million for the Kennedy Center for the Performing Arts in Washington, D.C. That fact is indeed indicative of the lack of seriousness with which so many, especially in the House of Representatives, take the plight of the millions who have lost their jobs due to the shutdowns. But there was a lot more in the bill that had nothing to do with relief for people thrown out of work or with helping our economy recover: $75 million each for the National Endowment for the Arts and the National Endowment for the Humanities, $324 million for diplomatic programs, $25 million for salaries and expenses in the House of Representatives, $78,000 for the Institute of American Indian and Alaska Native Culture and Arts Development, and the list goes on. This bill is unworthy of a great democracy in a time of crisis. 

We certainly need to provide a safety net for the workers who have lost their jobs in these shutdowns. After that the most important thing is to end the shutdowns and restart the economy as soon as possible. After that I like the recommendation of my friend of longstanding, the great economist Art Laffer. If ever one were to forget the power of incentives, he will be reminded by spending ten minutes around Art. He makes a compelling case that the only sensible policy in such a time is to cut taxes. Specifically, he proposes that we should (1) protect solvent companies with extended lines of credit or loan guarantees to stave off a liquidity crisis and (2) waive the payroll tax for both employees and employers through the end of this year. I do not know if this is the single best thing, but it is certainly the best kind of thing. 


It is heartening to see in President Trump, in others in his administration, and in many in Congress and in state houses around the country a real frustration at not being able to end the economic shutdowns. It is sad to see others in government who lack that sense of frustration, not to mention the eagerness among some governors to outdo one another by announcing shutdowns that extend beyond where anyone claims to know that shutdowns will be necessary. 

Winston Churchill wrote grave warnings in 1936, as Hitler consolidated his power. His calls for rearmament were not sufficiently heeded to prevent the worst war in history. He warned that heavy sacrifices were necessary and justified to prevent Hitler from dominating the world. Amidst these warnings, in that same year, he took time to sound a different note in an essay entitled, “What Good’s a Constitution?” 

[W]e must not be led into adopting for ourselves the evils of war in time of peace upon any pretext whatever. The word ‘civilization’ means not only peace by the non-regimentation of the people such as is required in war. Civilization means that officials and authorities, whether uniformed or not, whether armed or not, are made to realize that they are servants and not masters. 

Socialism or overweening State life, whether in peace or war, is only sharing miseries and not blessings. Every self-respecting citizen in every country must be on his guard lest the rulers demand of him in time of peace sacrifices only tolerable in a period of war for national self-preservation. 

The sacrifices that are demanded of Americans today may be necessary, but they must never become customary. The purpose of our government is to keep us alive, yes, but also to keep us living and working, as is our right. 

Going forward, our best leaders will eschew political gamesmanship and work to control our borders, fix our public health agencies, and end our dependence on China and other foreign countries for goods that are essential to our national health and security. We must prepare ourselves to face the next pandemic without surrendering our way of life. 

Join Our Market Commentary or add a friend!  

 "This material is provided for general information and is subject to change without notice.  Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. The information does not represent, warrant or imply that services, strategies or methods of analysis offered can or will predict future results, identify market tops or bottoms or insulate investors from losses. Past performance is not a guarantee of future results.  Investors should always consult their financial advisor before acting on any information contained in this newsletter.  The information provided is for illustrative purposes only.  The opinions expressed are those of the author(s) and not necessarily those of Geneos Wealth Management, Inc."