August 31, 2025

By Stephen Stofka

Sunday morning and another breakfast with the boys. This week Abel and Cain discuss several  political theories as they try to make sense of current events. The conversations are voiced by Abel, a Wilsonian with a faith that government can ameliorate social and economic injustices to improve society’s welfare, and Cain, who believes that individual autonomy, the free market and the price system promote the greatest good.

Abel said, “I was reading this week that there are now more GenXers than Boomers in the House. The Boomers still control the Senate by a good margin, though (Source).”

Cain poured a bit of syrup on his French toast. “Next year, the first Boomers are going to turn 80. I mean, don’t they have anything else to do? Are they all going to die in their seats like Diane Feinstein?”

Abel shrugged. “I think they get into politics because they want to make a difference and they get addicted to that sense of importance. The office comes to define them. They can’t let go.”

Cain nodded. “Ok, I can understand that, but why do voters keep putting them back in office? Feinstein served about thirty years. Most states have term limits for governors (Source). We have term limits for the President, but none for the House and Senate? Come on, we need a better system.”

Abel replied, “Congress rewards seniority. The oldest members get key assignments. They chair legislative committees that control what legislation gets to the floor of either chamber. Let’s say someone challenges a sitting Senator who chairs the committee on Energy and Natural Resources. Right now, that’s Mike Lee from Utah, a Republican. Through him Utah voters can steer policy. If the challenger wins, he doesn’t get to chair the committee. Utah voters lose that power. Why would they want that?”

Cain stabbed at his French toast. “The problem with that system is that it allows special interests to ‘capture’ a Senator or House member. What do they call it? An Iron Triangle. Special interests, key committee members and some executive agency all work together to steer policy to the benefit of the special interests (Source). For example, ranchers band together as a group to lobby for below market grazing fees for their cattle.”

Abel smirked. “What are you going to do? Stop people from being people? Sure, Senators and House members are supposed to represent a broad constituency but there are a lot of interests within that constituency. Interest groups have to compete with each other for representation. That’s just politics.”

Cain replied, “There’s a guy called David Pinsof who developed what he calls Alliance Theory. Political beliefs are not based on principles or moral maxims but are simply arguments that a coalition uses to cement alliances. His theory helps explain a lot of contradictions.”

Abel asked, “Like what?”

Cain looked up at the ceiling as he searched his memory. “Conservatives say they respect authority but they can disregard authority if they think a regulation is unfair (Source). They champion the free market but actively lobby for subsidies.”

Abel laughed. “Subsidies are in the best interest of their stockholders. Regulations are not.”

Cain smiled. “Exactly. Another example Pinsof gave was a distrust of foreigners but conservatives should trust Putin when he said that he did not interfere in the 2016 election.”

Abel laughed, asking, “Any contradictions on the liberal side?”

Cain thought a second. “Oh, yeah, here’s one. CEOs should not make so much more than their workers but it’s OK for stars in Hollywood to make way more than most working actors. What else? Liberals criticize those who stereotype Mexican immigrants as criminals but hold onto the stereotype that a lot of voters in southern states are racist.”

Abel nodded. “Like I said, it’s what people do. So what’s Pinsof’s theory?”

Cain replied, “Don’t waste time trying to find inconsistencies in political arguments. It’s just spin. The opposition points out those inconsistencies as a way of signaling to their own coalition. No one expects that the other side will change their mind when someone points out a contradiction in their argument.”

Abel frowned. “Trump instinctively knows that its all about alliances. That’s why he will say anything, do anything. He asks, ‘does it strengthen my alliances and weaken those on the other side of the political aisle?’ It’s just so, so…”

Cain asked, “Nihilistic? Is that the word you looking for? Cynical, transactional?”

Abel replied, “Yeah, nihilistic, unanchored to any moral principles.”

Cain nodded. “It’s the morality of me, me, me. I think Pinsof borrows some elements from Skepticism as well as Pragmatism, a philosophy that understands ideas by looking at the effect of those ideas in the world (Source).”

Abel interrupted, “Reminds me of Milton Friedman’s paper saying that an economic model was valid if it made good predictions, not whether it was realistic or consistent (Source).”

Cain raised his eyebrows. “Talking about economics, Trump said that he had fired Lisa Cook, one of the Fed governors.”

Abel frowned. “Yeah, he’s attacking the independence of the central bank. When I read that, I thought, ‘How much has the stock market gone down on that news?’ I glanced at the SP500 index. Nothing. No reaction. What the heck?”

Cain shook his head. “Hard to figure. Traders are betting that there will be a standoff. Trump is pushing. Cook and her lawyer are pushing back.”

Abel asked, “Yeah, but I read that she is off the job for now. The Fed meets again in mid-September to decide interest rates. Has Powell said anything about Cook’s firing?”

Cain replied, “I don’t think so. Anyone that Trump wants to put in her place will need to be approved by the Senate.”

Abel asked, “Has the Supreme Court said anything?”

Cain said, “Cook’s lawyers would need to file something with a district court. If the judge rules against Trump, the lawyers with the Department of Justice would need to file an emergency application with the Supreme Court asking for immediate relief. It’s called the Shadow Docket (Source).”

Abel shook his head. “I think of Trump in control of interest rates. Tariffs are already driving up prices. He said he wants interest rates to be like three percent less. Such a huge drop in rates would increase inflation, a tax on everyone. This guy’s got more ways to tax ordinary people while giving the rich big tax breaks.”

Cain sighed. “Well, the key interest rate, it’s called the Federal Funds Effective Rate, is set by a committee called the FOMC. They have 12 members. There are seven Fed governors, the president of the New York Fed bank, and a rotating panel of four presidents from the regional Fed banks. Even if the Supreme Court said that Trump could fire one of the Fed governors, he can’t fire any of the presidents of the regional banks because they are employees of their banks, not the Federal government (Source).”

Abel asked, “So let’s say Trump gets five governors to do his bidding. You’re saying there are still seven governors who could vote against policies Trump wants.”

Cain nodded. “One of those governors is the Chair, Jerome Powell. Earlier this year, the Court indicated that Trump could not fire the Chair (Source).”

Abel frowned. “Trump pushes boundaries. That’s his brand.”

Cain shook his head. “Trump wants what he wants. He doesn’t recognize the validity of boundaries. That’s his brand.”

Abel sighed. “He is going to provoke a final crisis. I was re-reading Generations by William Strauss and Neil Howe. They wrote that book back in 1991 and predicted a major crisis during this decade.”

Cain squinted. “Didn’t we talk about this a few weeks ago?”

Abel nodded. “Oh yeah. I think I was talking about their second book, The Fourth Turning. This first book goes into the history of the generational cycle. They trace the pattern in America starting in the 17^th century.”

Cain interrupted, “I’m skeptical about these grand cyclic theories. There are some stock traders who claim that the stock market works on Fibonacci cycles (Source).”

Abel argued, “Like Friedman said, does the theory make good predictions? If not, it’s not a good theory. Strauss and Howe predicted an inciting event sometime around 2005 that starts this two decade period called the fourth turning. It shakes the foundations of society before a final breaking point.”

Cain asked, “So, 9-11 or the financial crisis might have been those events? I don’t know. Seems like that would be fitting history to the theory.”

Abel replied, “Let me finish. Strauss and Howe thought the breaking point would come this decade. The last three turning points have been the Great Depression, the Civil War and the founding of the United States.”

Cain replied, “Ok, maybe it’s not just fitting data to a theory. A few weeks ago, we talked about legal turning points. I think I mentioned Richard Epstein’s book The Classical Liberal Constitution. He wrote about those turning points in Constitutional interpretation, or jurisprudence, I guess you could call it. Under the Fourteenth Amendment the Bill of Rights protections now applied to the states as well as the federal government.”

Abel interrupted, “Fat good it did down in the south. Jim Crow laws persecuted blacks.”

Cain sighed. “Yeah, these Constitutional protections don’t enforce themselves.”

Abel argued, “It was a failure of the Supreme Court, I think.”

Cain nodded. “Anyway, then there as a turning point Supreme Court decision in 1937 that set a precedent for big government. Helvering v. Davis upheld the constitutionality of the Social Security Act under the General Welfare clause of the Constitution (Source). A major expansion of the power and scope of the federal government.”

Abel said, “FDR was threatening to ‘pack’ the court. Increase the number of justices and put his own people in there.”

Cain agreed. “Yeah, FDR was a strongman, just like Trump. Unlike Trump, FDR had a clear electoral mandate from the 1936 election. He whupped the Republican candidate, taking all but a few votes in the electoral college (Source). He had a supermajority in the Senate so he would have been able to get his nominees for the court confirmed (Source).”

Abel asked, “Wasn’t the court all FDR nominees by the time he died?”

Cain nodded. “Yeah. No one should have that much power.”

Abel interrupted, “Trump is trying to expand his personal power under some Unitary Executive theory. The scary part is that some of the conservatives on the court support that theory (Source).”

Cain shook his head. “Hey, I’m all about checks and balances. This administration is all about consolidating power and I’m against that.  In 1945, F.A. Hayek wrote a landmark essay The Use of Knowledge in Society that explained why central planning would fail. Those in control cannot get or process enough information to make successful decisions (Source).”

Abel smirked. “DOGE is a great example of that. Even with sophisticated computers and data tools, they made a mess of things.”

Cain sighed. “The question is how much damage will Trump do. So, why do these turning points come every eighty years or so? Something to do with the human life span?”

Abel replied, “Strauss and Howe separate out four generations within that life span. Each has different characteristics as they move through their life cycle from youth, to rising adult, to middle age and then the final stage as elders. It’s the combination, the sequence of generations that causes the turning point, I think is what they say. There is an idealist generation that precipitates the crisis. This generation has a historical impact late in life.”

Cain shook his head. “What are some examples? It’s hard to follow.”

Abel nodded. “Lincoln, FDR, and Trump were all part of an idealist generation. Strauss and Howe identify several tendencies within each generation. Idealists think their principles are transcendent and they have unyielding opinions (page 11).”

Cain looked skeptical. “I don’t think of Trump as an idealist.”

Abel argued, “Well, he’s been saying the same crazy things for decades about criminals and immigrants.”

Cain interrupted, “Unyielding opinions? The guy changes his mind from day to day. He exaggerates most of the time and doesn’t care. And yes, don’t say it. I voted for him. It wasn’t my idea to have two old-timers run against each other in the 2020 election or the 2024 election. That’s why I want to change the system. The bosses in both parties are hurting the American people.”

Abel nodded. “Yeah, I agree. Most voters get herded into one of two corrals when they would prefer more alternatives. The whole election process is designed to suit the party bosses and the fundraising effort. It’s not about empowering voters.”

Cain laid his napkin on the table and stood up. “We said earlier that no law enforces itself. Principles of governance don’t just happen. The question is how does a system change without a civil war or an absolute economic catastrophe like the 1930s? It’s not a question I like to think too much about.”

Abel looked up. “See you next week.”

Cain turned. “Till then.”

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Photo by Josh Calabrese on Unsplash