Even If It Works...

Two of the four horsemen of the economic apocalypse are riding, full-tilt, across the devastated landscape – namely, the bailout program and the “economic stimulus” program. The first horseman was, of course, the massive failure of the stock market, a blow from which the American middle class is still reeling. And the fourth -- “coming soon to an economy near you!” -- will be hyperinflation combined with even more confiscatory taxation. In other words, Obama will destroy the economy in order to save it. And amazingly enough, all of these assaults have fallen, are falling, and will fall on the exact same people – the good old reliable, but hopelessly naïve, gullible, and hapless American middle class. But hasn't it been the tradition down through the centuries, whenever the word “bourgeois” is mentioned, to think of people who never really stop to think where their money, and their prosperity, is coming from? They just take it for granted, as their just due. They are not theoreticians... they are not into long-range planning, or strategy. Their preferred technique is to find themselves a “situation”... a gig... a rice bowl... and cling to it for dear life, come what may. And when what may come finally comes, they are as clueless and helpless as the most abject lower-depths denizens of abandoned crack houses – but less enraged, actually. Hey, no time for shedding tears, chin up, stiff upper lip, hep hep, and on to the next folly. You see, in their world there is no room for conspiracy... whereas for the lower classes, the entire _world_ is a conspiracy... against them. So in that sense, the lower classes are actually more “conscious”, even if frequently mistaken, than the complacent middle classes, for whom any form of “theorizing” is just rocking the boat, and a threat to one's tranquility, and impolite besides. I'll bet you that plenty of dinner-table conversations in the “ghetto” revolve around the question of who “caused” AIDS in Africa, for instance... but how many middle-class dinner-table conversations are about who caused the stock market crash, and why? It's just too big... too upsetting... and it doesn't fit into the middle-class self-satisfied Candide-esque meme.

And yet... and yet! -- in the midst of all of this folly and foolishness, we are subjected to “news” that reminds me of nothing so much as the daily announcements of the success of the “Five-Year Plan” in the early days of Soviet Russia – which, if you hadn't pawned your radio, you could enjoy while your dinner – generally a pair of old boots – bubbled on the stove. In the present case, it's that the bailouts are actually working! And that the stimulus plan is actually stimulating something. But allow me to translate, if you will. The bailouts are “working” because the people who have received them _say_ they are working... and, in some cases, they are actually being paid back. In cases where they are not being paid back, they are represented as “working” because, in those various sectors fortunate enough to receive bailout money, things haven't gotten any worse. At least not a whole lot worse. Yet. The problem is, everyone making these claims is either a recipient of the bailout money or a bureaucrat assigned to hand it out. So is it too much to speculate that these people might just be a bit biased in this matter? Might they, perhaps, be engaged in self-vindication, or rationalization, to some degree? And, in fact, is their evidence for the success of the bailouts any more convincing than their evidence, a year ago, for the dire need for the bailouts? Isn't it really just a matter of taking their word for it, in both cases? That's how it appears to me. Not that I have any objection to bailout money being paid back, mind – it's just that it makes me wonder what all the fuss, and all the panic, was about in the first place.

We'll get back to the bailouts in a moment. But first, let's deal with the ironically-initialed ESP, or Economic Stimulus Plan. Like the bailouts, it was represented as something without which... well, you know the rest: Ruin! Anarchy! Starvation! And so on. Then it turned out that the stimulus plan was not stimulating the right people... or the right things. It was, in fact, being used as a catch-all for “pork” projects that had not met the usual, and very generous, budget cut. And many of these projects were not “shovel-ready” because even the most starry-eyed optimists had not expected a windfall of this magnitude. But not to worry – the no-bid contracts and the union featherbedding process is well under way, and work is going to start any day now, just you wait and see. So Little Timmy, who got his head stuck in a storm drain, is going to have a playground built in his honor after all. Is this a great country or what?

But here's the point. Even if it's true that the bailouts are, on some mysterious level, “working”... and that the ESP does succeed in, eventually, stimulating something, will those alleged successes, per se, signal a heroic recovery of the economy? Will they, in retrospect, be considered worthwhile, and worth all the money spent (which, by the way, was all borrowed – so it will be still getting paid back for years after the benefits are forgotten – kind of like the idiots who still owe money on their wedding after the divorce)? Again, all of the “payoff” data are going to come from those with vested interests. And add that to the truism that, when it comes to economics, you can't run experiments – you can only do things one way, and hope for the best.

But let's say, in the best of all possible Obama-worlds, that both the bailouts and the ESP are eventually pronounced a success, and that convincing data are offered to support that contention. Let's say that, in addition, hyperinflation has not yet occurred, and that the requisite tax increases have failed, so far, to completely beggar the middle class. It will be said, in that case, that we have “weathered the storm”, and that “America is still strong”, etc. But won't those, in fact, be instances of what used to be known as “false recovery”, as with a terminal TB patient who suddenly regains strength, energy, and clarity of thought just before dropping dead? (In opera, they even manage to belt out an aria or two in the process -- and, to steal a quip from Oscar Wilde, you'd have to have a heart of stone not to laugh.) I think the answer to that depends, at least to some extent, on other factors, like whether we have given up trying to sustain an American military and economic empire by that time – and the answer to that one is surely no. Or, whether we have gotten a grip on “entitlements” -- again, no. Or, whether we have reclaimed our foreign policy from the Zionists. Again, no. What might appear to be renewed strength would, in that case, be like a hospital patient who is no longer in critical condition – but is still in the hospital, and likely to stay there for a long time.

But there are other senses in which things can never be the same, even if we appear to survive the current crisis. One is the simple fact that the government felt perfectly justified in moving in and taking over large sectors of the nation's business and financial sector – again, to save it from itself, i.e. from its own folly and mismanagement (whether intentional or otherwise is a different issue). In short, no one had the slightest problem moving from a democratic/capitalist model to a fascist model. Just a simple matter of passing a few bills, and implementing a few “programs” directly from the White House. Again, “revolution within the form”. And even within this highly-suspect model there are better and worse ways of doing things. The administration's way – to reward incompetence with taxpayers' money but leave profits alone – is undoubtedly among the worst. Because all it can do in the long run is drive the truly productive, and honest, out of the business and financial sectors and leave only thieves and con artists in charge. (Another way of putting this is that if “Atlas shrugs” and departs the scene, and a bunch of pygmies, supported by the government, takes over, still aping capitalism but not practicing it on any level, where does that leave us? Basically, in a society of war lords and a corrupt central government, not unlike Afghanistan except for the substitution (in most cases) of money for bullets.)

And when it comes to the ESP, well... that is neither qualitatively or quantitatively different from government policies and budgetary tricks going back at least to the New Deal – and neither, for that matter, is the notion of spending taxpayers' money on things that no one one really wants, or would vote money for if they had the choice. What is different, however, is the notion that the economy needed “stimulating” and that only the government could do this, and that the way to do it is to spend more (non-existent) money rather than something that might really work, like lowering or eliminating confiscatory taxes, or reducing or eliminating the regulatory/legal burden on businesses and individuals. In fact, almost by definition, simply spending money doesn't “stimulate” anything in the general sense – it only buys goods and services on a temporary basis that, again, no one really wants. (Imagine not only rearranging the deck chairs on the Titanic, but providing them with a shiny new coat of paint and new upholstery as they slide down the tilting deck.) The way to stimulate is not to spend, but to quit punishing earning and investment (the real kind, not the current Wall Street mutation). But clearly, that is an option that never occurred to the wise men in the Obama administration – or if it did, they shied away from it the way Dracula shies away from a crucifix.

So... when we call what the government is doing these days “setting a bad precedent”, that only understates the case by about one light year. What they are doing is establishing a new baseline for government involvement with the economy – call it the “total involvement” level. And even if, for every person in favor, there are ten opposed, those ten have no voice, and no power, and no effective representation in Congress, much less the administration, which is made up entirely of socialist apparatchiks. And as I've said before, they all know exactly what they are doing – namely, increasing their own power and firmly establishing the mechanism for its continuance as far as one can see into the future. We will know that their victory is complete on the day when “capitalism” is no longer a dirty word – i.e. when they can use it with impunity to describe the brave new economic world they have created, knowing full well that true capitalism is dead and buried, but that the word itself still has the power to boost the attitude of American exceptionalism – an idea that will still be needed to undergird foreign-policy follies.

Perhaps not the first, but certainly a prominent, casualty of socialism is that words cease to mean what they have always meant up to that point, and start to mean their opposites. So you will certainly continue to hear politicians mouth words like “capitalism”, “democracy”, and “freedom” for years to come, long after any memory of the reality of those things has faded into obscurity.