I am reproducing John C. Wright's latest post in its entirety because I desperately want my liberal readers to tell me why he is wrong, and many of you don't bother to click through when I merely provide links. Three things keep me from utter despair over the course we are following: (1) denial; (2) knowing that God—not the President, not the media, and not the corporate CEOs—is ultimately in charge, and will bring good out of even our most boneheaded mistakes; and (3) our children, and young people in general, are still enthusiastic and optimistic. Maybe they're in denial, too, but as long as they don't give up we will make it through.
Adding more to the debt than all previous presidents combined
In The Wall Street Journal, Michael Boskin writes:
Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents—from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
Mark Steyn makes this comment on Boskin:
What emerges from such a blueprint will not be America. The United States will survive as a geographical designation, a collection of zip codes, but what goes on within them will be a Euro-Canadian form of societal arrangement
My comment: With this amount of money, NASA could have built an Arthur C Clarkian space elevator. Out of one hundred dollar bills.
What astonishes me is the sheer economic illiteracy of this course and its defenders. During FDR's disastrous New Deal (which made the depression from a one-season market correction into a decades-long nightmare. Dow levels did not return to their 1920's figures until the late 1950's, a years after FDR was dead and WWII was over) at least FDR had two excuses: first, Keynes talked such charming goobledegook that anyone might get confused; and (2) a depression of this magnitude had never happened before, so experience was no clear guide.
The supporters of the current administration do not have those excuses. First, the current spending makes no sense even from a Keynesian point of view. Second, the lesson learned from the Great Depression is clear enough with anyone who has eyes to see.
Keynes suggested that massive public works projects would tax savings and increase borrowing, lowering the interest rate. This is a bone-headed idea, but it is not insane. It is wrong, but not evil. The current administration suggests that massive transfer payment from the most productive to the least productive sector of society, with moneys spend on consumption goods rather than investment, will somehow stimulate .... something. The rhetoric is a little vague on the intended consequences. The consumption goods in this case include socialized retirement savings (known as social security), socialized medicine, socialized education to the college level, socialization of the banking and lending industry (thanks, Bush!) and pork projects whose wastefulness beggars exaggeration.In the Wall Street Journal, Reason Foundation Founder Robert Poole’s op-ed lists just some of the pork our children and grandchildren, for the rest of their lives, will be making interest payments on.
A wish list that is 11,391 projects strong! What vital infrastructure projects would cash-strapped taxpayers get for their $73 billion? Here's a sampling: - Hercules, Calif., wants $2.5 million in hard-earned taxpayer money for a "Waterfront Duck Pond Park," and another $200,000 for a dog park.
- Euless, Texas, wants $15 million for the Midway Park Family Life Center, which, you'll be glad to note, includes both a senior center and aquatic facility.
- Natchez, Miss., "needs" a new $9.5 million sports complex "which would allow our city to host major regional and national sports tournaments."
- Henderson, Nev., is asking for $20 million to help "develop a 60 acre multi-use sports field complex."
- Brigham City, Utah, wants $15 million for a sports park.
- Arlington, Texas, needs $4 million to expand its tennis center.
- Miami, Fla., needs $15 million for a "Moore Park Community Center, Tennis Center and Day Care" facility. The city is also desperate for $3.6 million to build a covered basketball court and a new tennis court at Robert King High Park. Then there's the $94 million Orange Bowl parking garage you are being asked to pay for.
- La Porte, Texas, wants $7.6 million for a "Life Style Center." And Oakland, Calif., needs $1 million for Fruitvale Latino Cultural and Performing Arts Center.
At some point, this degree of economic irrationality tips over from good-hearted-but-wrong-headed eurosocialist nonsense, into corrupt-headed Soviet-style totalitarianism. After a certain point, a certain degree of negligence when it comes to how the world actually works is not longer excusible; and it is not negligence, but depravity.
In my judgment, we have reached that level of depravity.
This is not the normal back-and-forth of partisan politics. This is damage to the Republic which could spell the end of it. Nations do not survive as nations once they are bankrupt and addicted to government power. Oh, will no doubt continue to call ourselves the United States of America, with the same sincerity that Spanish and German princes were called The Holy Roman Emperor, long after the Fall of Rome.
Meanwhile, bank stocks bottom out, the Dow continues to plummet, unemployment in all sectors EXCEPT GOVERNMENT continues to rise (Big Brother is hiring), and the Conservative movement's main concern seems to be a name-calling match between Rush Limbaugh and David Frum. (For those of you who did not notice, President Obama used his vampire hypnosis powers learned from the Secret Masters of Tibet to declare Rush the leader of the Republican Party, and, for some reason not clear to me, Republicans scurried to agree with him.)
The sheer triviality of the media coverage of this is beyond belief and without parallel in history. Meanwhile we are at war with a ruthless, well funded, and highly motivated enemy, who operates from a decentralized power structure, difficult or impossible to locate and destroy. Meanwhile our defense budget is being slashed to levels (as percent of GDP) as low as it was between the Great War and World War Two. Those with long memories recall the sequel to that.
Instead of drilling here and drilling now, the new administration's energy policy ignores the three viable sources of energy on planet earth, coal, petrol, and nuclear. Instead the government will be replacing storm windows in all government buildings, on the taxpayer's tab.
While I support free trade as an economic matter, as a military matter, it is unwise to by oil from Middle Eastern regimes who fund our enemies. As a miltiary matter, it is unwise to borrow money from Red China. Whenever Peking decides it would be expedient politically to bankrupt their own rising (and unruly) middle class, they can sever trade relations with us, and call in their debts. Certainly they would suffer from this. But their Party elite would not suffer. We would suffer more. Again, our elite would not suffer.
Meanwhile, our European allies, far from being delighted to return to American alliance once the dreaded Darth Bush term expired, discover that protectionism is the order of the day. The collapse of our economy -- due in large part, perhaps entirely, to the Democrat party's socialist experiments in the housing market -- collapses their economy. The economically sane thing to do at such times is to lower trade barriers. A depression is the worst time for protectionism. But the new adminitration has rushed through protectionist schemes, tarriffs, and so on, in the name of the emergency, so our European allies are being left to fend for themselves.
Meanwhile, Iran is working on a nuke, and the Iranian leader promises to destroy Israel, a nation whom the new administration has no interest in supporting.
Meanwhile, in other topics, the corruption and degeneration of art, of literature, of morals, of notions of truth and beauty, vice and virtue, continue to degrade. Ignorance is rampant; the public school system has failed; the aesthetes praise only mind-jarringly grotesque and talentless rubbish; the nuclear family decays; and the California Supreme Court seriously debates whether to overrule the voter's sovereignty regarding Prop 8 in California. The only thing sacred to the Left is sexual perversion. Whatever is abnormal, sterile, morally empty and self-destructive, to them, looks fine and fair.
Meanwhile, the administration plans to make any and all state restrictions on infanticide unlawful. The administration seeks to appoint the most abortion-friendly candidate imaginable to the leadership of the department of health and human services. The billions of infants slain so far is not enough: Moloch is not pleased because the pyramid of tiny skulls is not piled high enough.
Call your Congressman. For each call they receive, the politicians calculate that a certain number of other voters feel the same, but did not call. In other words, if you make the effort to complain, the complaint is amplified in their ears.
You want us to call our congresspeople? Ha!
I cannot fathom how you can possibly see any difference between the left and right on this issue, and in general for that matter.
Two facts I beg you to think about:
1) The Bush administration, and in particular Henry Paulson, begged for (in Paulson's case, literally on his knees) a $750 billion bailout package, just as harmful to the US budget as what Obama is doing.
2) 95% of americans opposed it and made that fact well known to their congresspeople.
It seems clear to me that all the "pork" you list above is a far better use of money than giving it to irresponsible bankers so they can continue giving themselves $100 million bonuses and evading any responsibility for their choices. At least we get something, parks and roads, however little use they may be.
Phil, please don't confuse what I said with what John C. Wright said. I'm afraid much of what he says is probably right, but they are his words, not mine; his opinions, and not necessarily mine.
If you will recall, I was (and am) not one bit happier with the financial shenanigans under Bush than you are. What I asked the government to do, back in the early stages, was to step in and bring some stability to the hemorrhaging credit markets by buying up properties that were clearly and obviously undervalued because of the panic—a move that could have been a net profit for the government instead of an unimaginable debt.
For the record, lest anyone think my inclusion of the quote about a Euro-Canadian societal arrangement means I am being disrespectful of Europe or Canada, I am not. Ever since my high school years I have always thought that if I couldn't live in my own country my first choice would be Switzerland and my second Canada. (This was before I'd been to New Zealand, however....) There are many, many things other countries do better than we do. Off the top of my head I can think of Switzerland's seven-member executive with rotating presidency, France's subsidy of its small farmers, and Germany's attitude toward GMO foods. There's much, much more. But there's also a lot that we do better here. What's more, some things that work on a small scale cannot translate easily to a country as big as ours. More still, some of the European programs that look so attractive are beginning to fall apart as their demographics change, so we would do well to adopt them carefully, if at all.
The troubled properties aren't undervalued, IMO. At the very least, you can't prove that they are and the feds shouldn't be speculating that they are. The fact is that the feds' encouragement and pressure on banks through federally subsidized home loans amongst other things caused artificial demand for housing which the market met with increased supply of housing and which finally resulted in a glut of housing when the artificial demand couldn't be sustained. The solution here is for the feds to stay out of it. There is nothing wrong with low housing prices just like there is nothing wrong with low food or car prices.
What are "abnormal" market forces?
The only thing abnormal about the housing market the past few years has been the exotic mortgage products offered (Alt-A, Interest Only, blah blah blah) and the lack of due diligence. The current market and its resulting valuations seem far more normal to me.
Therefore it would seem to me that "stabilization" would basically mean artificially attempting to keep home prices at previous unsustainable levels. Important to note is that if nothing were done, the market would have cleared all the bad debt ASAP and we could all have gotten on with our lives. By "stabilizing" the market, you basically encourage people underwater on their homes to hang on and hope for free money. It also makes housing less affordable for lower income people.
I suppose you're in favor of artifically high home prices because you already own a home and therefore are happy to have your asset's price artificially inflated at the expense of low income families and first time home buyers. :(
I find it difficult to frame a cogent reply to an author who complains about everything and offers no alternative, and would find it difficult even if I knew enough to reply in a well-informed manner. I'd rather read (and perhaps even respond to) a focused complaint than an all-encompassing rant complete with name-calling. To respond well, I'd have to forsake work and family just to research all the issues, and I'd likely run out of energy and interest before addressing point #18.
Or I could resort to Phil's techniques of mockery and poisoning the well. That might save me time.
But - with permission - I'd rather do neither, for the moment.
Another thing to remember about John C. Wright is that, as an artist, he is a conservative living and working in a very liberal world; this gives him more of an understanding of the "other side of the story" than many conservatives have, but also makes him more defensive than one might hope. At least that's what feeling dramatically outnumbered does to me.
The alternative I offer is for the government to let the market correct prices instead of intervening to keep them artificially high. The government should also stick a fork in Fannie Mae and Freddie Mac. With lower housing prices, the government would probably need to spend less on HUD too, in the same way that they'd have to spend less on food stamps if they stopped artificially raising food prices through "farm aid".
I cant see where i've name called above.
Phil, I'm sorry I apparently wasn't clear in my comment. Neither the lack of alternatives nor the name calling referred to you, but both to John C. Wright's article. Only the line about mockery and poisoning the well referred to your comments. (In retrospect, and after some research, I think I meant circumstantial ad hominem and not poisoning the well. I wish I was more adept at identifying logical fallacies.)
I love how people are angry that bonuses are being handed out to execs at AIG who just got done running their company into the ground. I think it's hilarious that AIG claim's it's legally required. Were it not for the bailouts, AIG's inevitable bankruptcy would have fixed that problem too.
If you remember (from this discussion, I was promoting a stabilization plan, not the "stimulus" plans(s) that have been foisted on us. There's nothing wrong with low housing prices if they come about as a result of normal market forces, I agree. I've always laughed (somewhat bitterly, I'll admit) at the news media, which reports a rise in housing prices as a disaster (because it is hard on buyers) and then turns around and reports a drop in housing prices as a disaster (because it is hard on sellers). Nothing makes reporters happy except bad news, because bad news sells.
But there's a big difference between normal market forces and panic-induced discontinuities and forced sales that bring down the good investments with the bad. If we had stopped the bleeding sooner, the patient would not now be in intensive care. The point was to stop the panic, not replace the patient's entire blood supply.
Be my guest. (Or is it not my guest?) I'd actually much rather you contribute to the Invitation to Conversation discussion, which is more serious and more important, although I think more intimidating, as there are many thoughtful and coherent comments that deal with several issues; I find it difficult to handle all the threads without dropping something important. I'd love your perspective on any and all of it. But if you'll just weigh in on the health care discussion with the Swiss point of view, and maybe what you know about Japan, I'd be happy. As long as you don't neglect your family, that is. :)
I guess you have to be used to John C. Wright's style to appreciate it (or at least not to be turned off by it); he's a science fiction writer, and it shows, especially in phrases like "vampire hypnosis powers learned from the Secret Masters of Tibet." I find his perspective as a former-atheist-turned-Catholic Christian ("If Vulcans had a church, they'd be Catholics"), Great Books-educated writer of fantasy novels both entertaining and thought-provoking. But he does have kind of a Wild West style. :)
I am seriously concerned by the course we are setting, nay, being driven on as before a hurricane, for which I believe our children and grandchildren will suffer. But I'm quite happy to give up this comment thread!