Baby Bonds

Pretty much everyone, including those of us who don't think she would be the best Democratic nominee, are pretty impressed with how tight a campaign Hillary Clinton's run. MSNBC's first read, The New York Times, and Larry Sabato, however, see a hint of weakness:

Her $5,000 “baby bonds” proposal may have given fodder to Republicans. “The baby bonds proposal is one of the few mistakes Hillary Clinton has made in her campaign,” said University of Virginia Professor Larry Sabato per the New York Times. ‘Should Clinton become the Democratic nominee, she may have handed a powerful issue to the Republican candidate.”

But of course any proposal from a Democrat is going to be "fodder" for Republicans. The idea deserves to be considered on its merits. Nick Beaudrot, baby bonds fan and John Edwards fan, notes that his idol "has said good things about these sorts of plans before." Tony Blair and Gordon Brown pioneered a similar policy in the United Kingdom several years ago. Ray Boshara at the New America Foundation is also a longtime advocate of these measures, and it goes even further back to Bruce Ackerman and Anne Alstott's book, The Stakeholder Society.

One of the main policies that made the United States we know and love was the Homestead Act of the 19th century. The question this was intended to address was how to dispose of the vast land mass that the country was in the process of stealing from its native inhabitants. One way to do this would have been to auction it off to the highest bidder. Wealthy investors would have bought large estates and hired overseers and tenants to farm the land while living back home in New York, Chicago, Philadelphia, wherever. Instead, the congress guaranteed a small farm to anyone willing to move west and live and work on the land, building a property owning democracy of smallholders wherein ownership of the means of production (viz. land) was widely distributed.

Baby bonds could and should be a step toward creating a 21st century version of a society lack that -- one in which every citizen who works hard and obeys the law gets to share in the prosperity that's created by everyone's labor together.

Comments

You leftist.

Posted by neil | October 8, 2007 5:48 PM

I'd like to know what happens if the child dies before they are able to cash in the bond.

Posted by Mario | October 8, 2007 6:03 PM

'I'd like to know what happens if the child dies before they are able to cash in the bond.'

Then, the terrorists win.

Posted by craig | October 8, 2007 6:09 PM

That 'bond as birthright' idea crossed my horizon several years ago. I forget who--?Marshal Whitman--some liberal hawk who's been absent since Operation Iraqi Freedom made the internet poisonous. I thought it was a good idea then and still do but as a priority it really is down near the bottom. Hillary is going to suffer a sh*t-storm from the right-wingers anyhow but it should be about more important issues.

Posted by JohnMcC | October 8, 2007 6:09 PM

Thomas Jefferson and James Madison were the founders of the Democratic Party -- called the Democratic Republicans in their day.

If you read the letters Thomas Jefferson wrote to James Madison, you see concepts re the economic system required to support a republic that would be considered somewhat Marxist today. Not so much communual property as the idea that political freedom can't endure if wealth is greatly concentrated.

Jefferson, for example, promoted agarian philosophy NOT because he was a tree-hugger but because he thought citizens of a free republic need to be economically independent.

He compared a small farmer's independence and freedom to speak up versus urban residents whose incomes are wholly dependent upon the good will of some wealthy merchant and noted that the latter group would always have to yield to economic intimidation. He cited the example of bourgeois residents of Paris and their groveling obedience with contempt.

One of the suggestions that Jefferson made re the Constitution was that it should have a clause protecting citizens from monopolies. Such as Bill Gates' Microsoft, for example.

Again, the problem is that our Democratic leaders are craven cowards who won't give Republican whores the kicks in the teeth they richly deserve. In their 12 years in power, the Republicans stole $4 Trillion from Social Security in order to give $2 Trillion tax cuts to the rich and to seize Iraq for Big Oil. They have repeatedly abused their power in COngress to give gifts to rich patrons that are far greater than $5000. They and Bush have dumped the equivalent of more than $50,000 in debt on every middle class household.

But what do you hear from our great Democratic leaders? Total fucking silence.

Posted by Don Williams | October 8, 2007 6:20 PM

Yet it is telling that these days the bulk of ownership in those vast expanses of land, as well as the produce of that land, are owned by a few massive agribusinesses, whose owners are essentially living back home in New York, Chicago, and Philadelphia.

And, indeed, this doesn't even come close to the land grants of Federal and State gov'ts to men like Stanford, which was in fact reason for the railroad barons' immense wealth. At least ConAgra makes an attempt to play fair.

So the myth of the Homestead Act never really played out. Large, absentee private interests have been the big movers ever since the Virginia Company issued stock in the 17th Century. The major exception to this rule is probably not the Homestead Act but rather the Northwest Ordinances. Although, even here, men like Washington who had speculated heavily in western land made a fair killing when the government paid them off.

Posted by Greg | October 8, 2007 6:27 PM

Don-

Tho. Jefferson's writings carry next to no water with me, since he was probably their biggest violator. (There's a good recent book about Jefferson and the lands of the LA Purchase).

Moreover, Jefferson saved himself from bankruptcy in the same way many planters in Virginia and No. Carolina did as the land became too weak to support greedy, destructive crops like Tobacco.

He sold his slaves, not even by families, down the river to the new lands in the Deep South and the West.

That's why I have to raise an eyebrow at anyone who actually thinks Jefferson is worthwhile to quote, considering his hypocrisy, which is staggering even by today's standards.

Posted by Greg | October 8, 2007 6:32 PM

Greeley & Evans had their idealistic reasons for the Homestead Act, but old Honest Abe always was a friend of the Railroads. Along with Alaska & the Transcontinental, the HA was interesting behavior for the congressman who opposed Polk's Mexican adventure.

Should read the Vidal book, I suppose. I have connected imperialism with a kind of classical liberalism in past comments.

Posted by bob mcmanus | October 8, 2007 6:38 PM

Hmm, my impression was that the Homestead act was a textbook example of back-to-the-soil idiocy.

The government took the rich farmlands of the midwest, and gave them away to a mob of city slickers who didn't know how to farm.

As a result, most of the land remained effectively non-productive, divided into little family farms that barely were able to support themselves.

Then the whole mess ended in the dust bowl foreclosures, sending the homesteaders' descendants back to the cities looking for work.

The massively corrupt railroad grants were the only part that really produced anything of lasting value.

None of this says anything one way or another about the baby-bond issue, but you might want to pick a historical parallel that was a bit less of a spectacular failure.

Posted by heedless | October 8, 2007 7:23 PM

Greg,

Jefferson's relationship to slavery was indeed complicated. Nevertheless, I find him worthwhile to quote because of the power of his words and the importance of his thought to the institutions of our republic. Thomas Jefferson is not another disposable blogger; we are not capable of writing him off just because atrios, or you, would have called him a wanker.

Whatever his faults, Jefferson's thought and actions hundreds of years ago continue to have a profound effect on our daily lives. A great many people, myself included, despite knowing that he was a slaveholder throughout his life, continue to think he did more good than harm in this world. So, in short, you're stuck with him:

"Can the liberties of a nation be secure when we have removed a conviction that these liberties are the gift of God? Indeed I tremble for my country when I reflect that God is just, that his justice cannot sleep forever. Commerce between master and slave is despotism. Nothing is more certainly written in the book of fate than these people are to be free." -Notes on Virginia

Posted by southpaw | October 8, 2007 7:39 PM

Greg -

Not that I don't think that Jefferson shouldn't be taken to task for his actions, but I can't think of anyone (past or present) that wasn't/isn't in some shape or form a hypocrite. Some are worse than others, of course, but some are better at expressing "ideals" despite the lack of ideality in their lives.

I tend to avoid the whole mess and stick with the ideas rather than the people expressing them. "...the idea that political freedom can't endure if wealth is greatly concentrated." rings true to me regardless of the author and I'd rather not ignore it out of spite of the baggage that comes with it.

Posted by Rihilism | October 8, 2007 7:41 PM

The baby bond is just a way of taking more money from families who don't breed and giving it to families who do breed. If history is anything to go by, families who breed will never be satisified by how much money they have forced families who don't breed to hand over to them. They will always want more.

Posted by abc | October 8, 2007 7:42 PM

southpaw-

I agree wholeheartedly that Jefferson was, on the balance, more harm than good, so I probably wouldn't call him a wanker. But I admire Jefferson for his political writings and his impact on this country's structures and liberties.

At the same time, it is his *economic* writing, namely his discussion of yeomanry and opposition to Hamiltonian manufacturing/commerce, that I find distasteful.

Also, Rihilism, your point is very well made. I just find it amusing that the men who wrote this were quite unashamedly manipulating and speculating in order to make fortunes from western lands.

Washington, to his credit, doesn't ever seem to have denied this, and in fact, I believe his response was along the lines of "I basically refused compensation for serving my country, but now I'd like rewards commensurate with my service"

Posted by Greg | October 8, 2007 8:36 PM

southpaw-

I agree wholeheartedly that Jefferson was, on the balance, more harm than good, so I probably wouldn't call him a wanker. But I admire Jefferson for his political writings and his impact on this country's structures and liberties.

At the same time, it is his *economic* writing, namely his discussion of yeomanry and opposition to Hamiltonian manufacturing/commerce, that I find distasteful.

Also, Rihilism, your point is very well made. I just find it amusing that the men who wrote this were quite unashamedly manipulating and speculating in order to make fortunes from western lands.

Washington, to his credit, doesn't ever seem to have denied this, and in fact, I believe his response was along the lines of "I basically refused compensation for serving my country, but now I'd like rewards commensurate with my service"

Posted by Greg | October 8, 2007 8:37 PM

southpaw-

I agree wholeheartedly that Jefferson was, on the balance, more harm than good, so I probably wouldn't call him a wanker. But I admire Jefferson for his political writings and his impact on this country's structures and liberties.

At the same time, it is his *economic* writing, namely his discussion of yeomanry and opposition to Hamiltonian manufacturing/commerce, that I find distasteful.

Also, Rihilism, your point is very well made. I just find it amusing that the men who wrote this were quite unashamedly manipulating and speculating in order to make fortunes from western lands.

Washington, to his credit, doesn't ever seem to have denied this, and in fact, I believe his response was along the lines of "I basically refused compensation for serving my country, but now I'd like rewards commensurate with my service"

Posted by Greg | October 8, 2007 8:38 PM

As a result, most of the land remained effectively non-productive, divided into little family farms that barely were able to support themselves.

Yeah srsly. From the Grange and dairy collectives through the foreclosures through ConAgra, the story of midwest farmland is a frantic attempt to get big and vertically integrated enough to outrun your margins.

Posted by Senescent | October 8, 2007 9:17 PM

Re: Along with Alaska & the Transcontinental, the HA was interesting behavior for the congressman who opposed Polk's Mexican adventure.

Alaska was purchased after Lincoln's death (1867 I think). I also see nothing contradictory in Lincoln's opposing the Mexican War while supporting the transcontinental railroad or proposing the Homestead Act.

Re: The government took the rich farmlands of the midwest, and gave them away to a mob of city slickers who didn't know how to farm.

No, Most of the homesteaders were from farming families further east, or perhaps former peasants who had immigrated from Europe. Homesteading on the frontier held no charms for city dwellers.

Posted by JonF | October 8, 2007 9:51 PM

My view of this one is that it is a trap for republicans. In the key debate moment when the republican goes for the kill on government giveaways, Clinton answers:

"The real way to encourage an ownership society is to start ownership at a young age. You like to talk about encouraging investment and responsibility, but it always seems to come out of the pockets of the middle class and end up in the pockets of the people who already own everything. This is a chance to do for the next generation what the GI bill did for the greatest generation. So, do you believe in an ownership society?"

Posted by jayackroyd | October 8, 2007 9:58 PM

My understanding is that Jefferson planned to free his slaves --but was unable to do so because he had stood surety for a friend on a business deal, the deal crashed and burned , and Jefferson was LEGALLY obligated to sell any property he had in order to pay his friend's loan. Because of this friend's failure, Jefferson died essentially bankrupt.

I find the defense of Alexander Hamilton astonishing. Hamilton was a hateful scum of the earth -- this country would be far better off today if Aedanus Burke had blown Hamilton's brains out in 1790 --instead of allowing Hamilton's friends to talk Burke out of the duel and allowing Hamilton's malign manipulations to continue.
If I could travel back in time, I would go back and kill Hamilton myself.

The criticism of the Louisiana Purchase is ,in my opinion, deeply ignorant. The Founders had always feared that this continent would splinter into warring states --a la Europe --and the resulting warfare would cause the rise of strong monarchies and the death of republican government. Such had been human experience in the 1800 years since Julius Caesar overthrew the Republic of Rome. Plus, the North American states were still wide open to invasion and control by a far more powerful Europe if the USA splintered.

But whoever controlled New Orleans controlled the Mississippi River, hence the economy of the Mississippi River Valley, and hence the states west of the Appalachian Mountains. If a European power controlled Louisiana, states like Tennessee, Kentucky, etc would have been compelled to join that power and to desert the United States. That disaster is what Jefferson managed to avert.

Posted by Don Williams | October 8, 2007 10:05 PM

pretty impressed with how tight a campaign Hillary Clinton's run.

By this I assume you mean talking out of both sides of her face without ever answering the questions asked of her while using her secret service detail like the Praetorian Guard. Nothing is uncontrolled or unscripted because she is never challenged by anyone in the MSM or the Democratic Party on anything she says or does. This baby bond idea is ridiculous. Bread and circuses. Someone please make her defend it.

I'd rather have the land. It lasted longer and required something of the recipient in return (work). $5000 today doesn't pay for a single year of daycare.

Posted by Just Karl | October 8, 2007 11:30 PM

Modified from what I posted on an earlier thread here and which MattY, of course, didn't respond to, here's a challenge:

gregmankiw.blogspot.com/2007/09/new-entitlement.html

And, this will be a huge incentive for people to come here illegally. There are already tour companies that bring people to the U.S. specifically to have U.S. citizen kids; expect that industry to rapidly grow.

I'm sure MattY would oppose selling dangerous products without warning labels, yet when it comes to policies he's a bit more "libertarian". Let's see if he can be brought around to discussing some of the downsides of what he promotes, or whether he's just a, er, promoter.

Posted by TLB | October 9, 2007 1:00 AM

RE Just Karl's comment "I'd rather have the land"
-----------
Maybe Obama will top Hillary and promise to give each of us 40 acres and a mule.

Posted by Don Williams | October 9, 2007 1:38 AM

I've seen several instances lately where "University of Virginia Professor Larry Sabato" has popped up in the media to take a disingenuous concern-troll swipe at Hillary Clinton. He's never identified as a consultant to any campaign.

Google Larry Sabato Hillary Clinton and you quickly get the impression that Sabato's current goal in life is to spread negative memes about Clinton. I wonder who he's shilling for.

Posted by LaFollette Progressive | October 9, 2007 2:13 AM

The baby bond is just a way of taking more money from families who don't breed and giving it to families who do breed. -- abc

If true, that means it's a guaranteed political winner for the Democrats. Sorry you hate kids -- it must suck to be you!

With a conservative spread of 3% between the bond's earnings and inflation, a baby bond of $5000 will be worth almost $35000 by the time you retire. Not grandiose, but not nothing, either. It would help correct America's abysmal savings rate, and it would make every American into a shareholder in our society. There is no honest way for any Republican to be for Social Security privatization but against a baby bond.

Posted by brooksfoe | October 9, 2007 6:10 AM

It's just Nixon's negative income tax updated. People are insane.

Posted by Jeffrey Davis | October 9, 2007 7:38 AM

And, this will be a huge incentive for people to come here illegally. There are already tour companies that bring people to the U.S. specifically to have U.S. citizen kids; expect that industry to rapidly grow.

Apparently, this is why we can't have nice things. Illegal immigrants will show up to claim them!

Posted by Steve | October 9, 2007 8:09 AM

taking matt at face value (and assuming he is not being cynical towards this "plan"): does $5K really provide a step towards an ownership (in this case, giveaway) society, even after inflation reduces it by half in 20 years. Wouldn't we be better off spending the money on (really) better education? job training (skills upgrading)? How about fewer disincentives to save (see taxation and inflation again)?
This is a populist, vote-charming gimmick, pure and simple. False analogues to homesteading act notwithstanding, don't you think we, and our putative presidential candidates, could come up with better solutions that this? arrrgggghhhh.

Posted by mike c | October 9, 2007 10:35 AM

Of course the GOP, and the right wing ultraconservatives, don't want Baby Bonds for college education.

That might mean that every child in America would have the opportunity to become smart, and that's the last thing these folks want.

The only way for the neocons to hold on is to keep America dumbed down. No one else, with any brains, would pay them any mind!

Posted by Liberal Long Islander | October 9, 2007 1:27 PM

What? Hillary's endorsing Barry Bonds? Didn't anybody do a focus group on how popular Barry Bonds is?

Posted by Steve Sailer | October 9, 2007 11:06 PM