The New Orleans Investment Conference is an annual gathering of investors interested in hearing several perspectives from investment experts, economists, political analysts, and more. At the 2011 New Orleans Investment Conference, Charles Krauthammer spoke for nearly an hour on government, and American ideology, and Washington's plans for your wealth and freedom.

Charles Krauthammer is called "the most influential commentator in America" and his humorous, articulate talk engaged the conference's attendees. We've summarized his talk here. (Please note: Most of Mr. Krauthammer's quotes are direct quotes but some have been edited for readability).

Mr. Krauthammer warmed up the audience by joking about being a psychiatrist, suggesting that some of his patients (from when he was a practicing psychiatrist) suffered from paranoia and delusions of grandeur, and then drawing a parallel between those patients and the politicians in Washington who suffer from the same problems… but also control nuclear weapons.

From there, Mr. Krauthammer turned to the serious business of politics by boiling down all of the political rhetoric to the real message: "There are lots of debates on policy. There are lots of debates on the details," he said. "But every piece of legislation, policy – from spending to taxation to debt – is all related to a single topic: They are all related to the size, scope, reach, and power of government; what the nature is of the social contract between state and citizen." All this forces everyone to wonder what the nature of the American political system should be and what the relationship between citizen and state should be.

Mr. Krauthammer says it's a great debate (in spite of the name-calling) because of how important the debate is. Not only is it important, it's also a debate that we won't often hear. He explained: "This debate occurs once in a generation and we are lucky to be living with [it]. The last time we had anything resembling this was about 30 years ago at the beginning of the Reagan revolution. Now we're in different circumstances – much more dire circumstances – and the stakes are even higher."

From there, Mr. Krauthammer reviewed the first two acts of Obama's time in office and offered conference attendees an analysis of what it meant for Americans.

"The first act", as Mr. Krauthammer called it, was the rapid ascendance of liberalism into the political arena in 2008.

The American people were panicked by the economy, the Republicans were unpopular, so Obama won the election, Mr. Krauthammer explained. But once Obama (and the democrats) were in control, they made a mistake. They misread their mandate. They thought their mandate was to change the country… but what the country really wanted him to do was fix the economy. They misunderstood the fiber of the American people. They assumed the people were so demoralized by the economy, they thought they could do whatever they wanted, ideologically.

Mr. Krauthammer shed light on Obama's ideology and how it drives his political agenda: In America, our tradition has been to promote liberty, enterprise, more innovation, and more freedom. There is equal opportunity but not equal result, but Obama believes in a system where the government provides more protection, regulation, security, taxation, and a levelling between classes. Therefore, Obama's social agenda is to nationalize health care, energy, and education.

To help push his agenda forward, Mr. Krauthammer asserted that Obama was drawing a false relationship between the economy and healthcare: While the economy was imploding, Obama was making speeches about healthcare. He was connecting healthcare to the economy. Obama was dealing with existing entitlements by creating more entitlements. "He was pretending to solve the debt problem and the entitlement problem by adding an entitlement," concluded Mr. Krauthammer.

Then Mr. Krauthammer warned: "If Obama-care is not repealed by the next administration, within 10 years we'll have a crazy, inefficient Rube Goldberg device that will destroy the quality of healthcare in America… Obama-care will change America irrevocably. Once you have that entitlement in place, it changes the nature of citizenship."

Mr. Krauthammer explained that this was the first act – the rapid rise of liberalism.  Then he talked about the second act, in which the political balance shifted in the direction of the right.

In the second act, around 2009, the Tea Party launched as a resistance movement that started out of nowhere. They started in town hall meetings and the Tea Party itself was just a tip of the iceberg – the most vocal minority of a group of people who believe ideologically that the country should move in a different direction.

Mr. Krauthammer then talked about how Obama noticed and reacted by moving his political agenda toward the center… all in a response to a rising voice of the right-leaning conservative electorate. "Obama understood the impact of this revolution. He flipped. He moved to the center; he positioned himself as friendly to business; he issued a Presidential directive to his cabinet members to reduce regulation, and he promised a new direction. But he knows he can't fake it because he's "a man of the left."

Popularity in a conservative approach grew. Mr. Krauthammer reported that during the mid-term elections, "even I was surprised by the extent of the democratic loss. They lost 53 sites in the house – that's the largest loss in 70 years. 19 state houses flipped from democratic control. All of Obama's changes toward larger, more controlling government had occurred at the federal level. There was an electoral response at the state level."

And the result of this flip? Mr. Krauthammer explained: "As a result of the overreach of the Obama administration, this threat of a very intrusive government got a spontaneous reaction that resulted in an election. [The election led to] flipping control of the national House but also extended to the state level. So the entire country is entirely engaged at every level about this central issue: Who runs our lives; who determines how we live?"

Next, Mr. Krauthammer talked about Obama's current political agenda and what he foresees as a likely scenario in the upcoming federal elections: "In any election, you can only run on two things – stewardship or you can run on ideology. Running on a stewardship platform works well when you have a strong economy and everybody is working. You can't run on stewardship when 80% of Americans say we're not on the right track. And Obama's ideology is not the ideology that the country wants to adopt… Obama can't run on stewardship and he [can't run on ideology]." As a result, Mr. Krauthammer warned, Obama can only run with class warfare as a campaign method. "As soon as the Republicans choose a candidate, you will see millions of dollars spent on [negative campaigns]."

Mr. Krauthammer believes in the value of the debate on the social contract between state and citizen. But he is right to warn us that political agendas might be confusing the issues now, and in the upcoming election. But Mr. Krauthammer is optimistic about the power of the people. "In our democracy, the people will decide," he concluded.

REFERENCES

http://www.neworleansconference.com/

Charles Krauthammer's Washington Post bio: http://www.washingtonpost.com/charles-krauthammer/2011/02/24/ADJkW7B_page.html