May 26, 2010

Inglorious Results of an Overspent Youth

Hatched by Dafydd

Michael Barone just published a fascinating column; he argues that something is happening that has never happened before in Western civ. For the very first time, a populist, small-c conservative uprising is focused not on taxes (that's fairly common), but rather on the deeper and more profound cause of socialist woe, government spending itself:

In the past rebellions against fiscal policy have concentrated on taxes rather than spending. In the 1970s, when inflation was pushing voters into higher tax brackets, tax revolts broke out in California and spread east. Ronald Reagan's tax cuts were popular, but spending cuts did not follow. Bill Clinton's tax increases led to the Republican takeover and to tax cuts at both the federal and state levels but spending boomed under George W. Bush.

The rebellion against the fiscal policies of the Obama Democrats, in contrast, is concentrated on spending. The Tea Party movement began with Rick Santelli's rant in February 2009, long before the scheduled expiration of the Bush tax cuts in January 2011.

A garden-variety tax revolt is more immediately gratifying to the people, forthey pay less tax immediately; and sometimes it can function as a proxy for reducing government spending, but only when accompanied by a ban or limitation on deficit spending, as with a state. Even then, however, lawbreakers lawmakers can shield the true culprit by simply ignoring the law; this is what is happening in California, which mandates a balanced budget -- but is currently about $20 billion in the red for this year alone, with no prospect of things looking up in the near future.

But in the country as a whole, Barone sees a growing mass movement -- which I dubbed a "popular front" in a previous post, What Makes Lefty Run? For the first time, we see in the Tea Parties (and associates, hangers-on, groupies, and fellow travelers) a genuine popular front against bread and circuses:

What we are seeing is a spontaneous rush of previously inactive citizens into political activity, a movement symbolized but not limited to the Tea Party movement, in response to the vast increases in federal spending that began with the Troubled Asset Relief Program legislation in fall 2008 and accelerated with the Obama Democrats' stimulus package, budget and health care bills.

The Tea Party folk are focusing on something real. Federal spending is rising from about 21 percent to about 25 percent of gross domestic product -- a huge increase in historic terms -- and the national debt is on a trajectory to double as a percentage of GDP within a decade. That is a bigger increase than anything since World War II.

Now the political scientists' maxim seems out of date. The Democrat who won the Pennsylvania 12th Congressional District special election opposed the Democrats' health care law and cap-and-trade bills. The Tea Party-loving Republican who won the Senate nomination in Kentucky jumped out to a big lead. The defeat of the three appropriators, who among them have served 76 years in Congress (and whose fathers served another 42), is the canary that stopped singing in the coal mine.

Barone goes on to question whether the Republican Party will be bold enough to seize upon this popular front, but that's a side issue. The front itself represents the maturation of the American (perhaps world) polity itself away from the nanny-state and towards greater reliance upon state, local, family, and oneself. More and more, people see the government not as a comforting, protective mother but as a smothering, clutching, giant kraken, entwining its squirming, grasping, sucker-clutching tentacles into everybody's back pocket.

Our greatest fiscal problem has always been overspending, not whether that spending is "paid for" by taxation or run up on the national credit card. The most extreme examples of socialism do not limit themselves to high taxes; they invariably supplant private spending with public spending and diminish private wages to greatly expand the public payroll, with the concomitent increase in government control. The intent is to destroy or hobble all personal and local institutions of society, forcing citizens to rely more heavily upon the national State -- or even transnational bodies, from the Communist Party to the European Union.

(President Barack H. Obama is currently pushing both of these policies as well, demonstrating that he does indeed have the socialist, specifically "liberal fascist," impulse himself -- joining Carter, Nixon, Johnson, F. Roosevelt, Wilson, and T. Roosevelt in the ranks of liberal-fascist presidents of the United States.)

The farther removed the institution is from the individual, the weaker the individual becomes; when all necessities can only be obtained from the national or international government, that constitutes pure socialism, which invariably metastasizes into totalitarianism, whose motto is "because we can!"

But perhaps counterintuitively, the lever that moves the meter from liberty to tyranny is always spending, not taxes. Whether the overspending State taxes or borrows, the result is the same: Power to the State, powerlessness to the people.

We certainly haven't gone as far as totalitarianism, or even as far as the EU, which does appear to be the short-term goal of Obamunism. One reason is the provenance of America itself; born in bloody revolt against oppressive government tyranny, the citizens of the United States have stubbornly maintained their distrust in remote, all-powerful government rule. Today, that distrust is "expressing," like an activated liberty gene, as the Tea Party-driven popular front against overspending and red ink.

The most outrageous recent example of just what our popular front is fighting is a bill introduced yesterday by Sen. Bob Casey (D-PA, 90%). It calls for the federal government to bail out labor-union pension plans, which are grotesquely underfunded due to staggering mismanagement and criminal looting since long before the current financial upheaval. The Casey bill is a $165 billion early Christmas present to Democrats' most reliable backers, Big Labor.

But it's counterproductive to nitpick a few obvious insanities. The problem is much deeper: Too many people have formed the conclusion -- not unreasonable, assuming colossal ignorance -- that government has a bottomless pocket, boxcars of cash like Scrooge McDuck, enough to pay for everything that everybody wants, twice over! And if you object either to forking over most of your dough to the feds or to the recipients of all this largess, then you're a selfish son of a bachelor -- and of course a racist, sexist, homophobic carnivore.

Lookee here:

Six weeks of vacation a year. Retirement at 60. Thousands of euros for having a baby. A good university education for less than the cost of a laptop.

The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. Generous lifelong [!] benefits have since become a defining feature of modern Europe.

Wow, let's all move to Belgium. Who can resist Aladdin's cave, where diamonds, sapphires, rubies, and emeralds sprout from bushes that grow in gold-dust soil? Ah, but a specter is haunting paradise:

Now the welfare state - cherished by many Europeans as an alternative to what they see as dog-eat-dog American capitalism - is coming under its most serious threat in decades: Europe's sovereign debt crisis.

Deep budget cuts are under way across Europe. Although the first round is focused mostly on government payrolls - the least politically explosive target - welfare benefits are looking increasingly vulnerable.

"The current welfare state is unaffordable," said Uri Dadush, director of the Carnegie Endowment's International Economics Program. "The crisis has made the day of reckoning closer by several years in virtually all the industrial countries."

Europe is battered by many economic and sociopolitical monsoons:

  • Wars erupting across the world (so what else is new?), into which European nations are dragged by alliances and by their own colonialist obligations.
  • A stomach-clenching plummet in the fertility rate that has left some European countries reproducing at only half the rate needed to maintain their populations.

  • Labor shortages (caused by the above) that require massive immigration from outside Europe, leading to a slow-motion Moslem invasion of the continent.

But even without these external body blows, the reality is simply that Europe cannot afford to spend like drunken Democrats. Neither can we; nobody can. But like scions of wealth and privilege, too many who grow up suckling at the government teat know only decadence and profligacy, and nothing of responsibility, duty, or sacrifice -- even sacrificing for one's own future, let alone the future of society. So when Europe's eternal adolescents are told that the well has run dry, the obvious response (as in Greece) is -- let's throw a riot!

Or let's storm the property of a Bank of America executive, and maybe they'll just write off those tens of billions of dollars we owe them. More bread! More circuses!

Here in America, we've had our own teen-logic flirtations with the "bottomless pocket" of government. One topical example was the enactment of the Community Reinvestment Act of 1977 that treated mortgages, for the first time, as a "right." Expanded drastically under President Bill Clinton and egregiously misused by organizations such as Rainbow Push and ACORN, the CRA was turned into a cattle prod driving lenders to offer mortgages to people who could never possibly repay them.

These toxic mortgages were then bundled into a vast river of unrecoverable debt, there concealed from the naked eye by "securitization" into mortgage-backed securities (MBSs) and the like. The quasi-federal agencies Fannie Mae and Freddie Mac then issued bogus guarantees of the now "toxic assets" (now there's an oxymoron!), reselling them back into the banking world.

Thus was "wealth" created ex-nihilio. Free money, as much as you want! More bread. More circuses.

There are many other examples of the Cult of the Bottomless Pocket, but this is the one that led directly to the spending crisis of 2010 -- thence ironically to the popular front that will, I predict, end up resolving not only the crisis of the moment but the very culture that creates such crises and catastrophes in the first place.

Historical detour: Alexander Fraser Tytler (1747–1813) has been forever tarred by the spurious claim that he wrote the following:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

No matter who's opinion this actually represents, it sits upon a gaping fallacy of static analysis. In fact, as we're starting to see today, when enough politicians vote themselves, and their lucky constituents, "largess from the public treasury," the republic does not necessarily collapse; evidently, there is another possibilty: that the majority rises up and squelches the greedy-pig minority.

The impulse began with an increasingly virulent attack on earmarks, but voters quickly realized that ears are only the tail of the iceberg. The real danger is not secret theft of public funds for petty bribery, but brazen expenditures of vast amounts of tax money to purchase another lump of socialist coal for our Christmas socks. Now the demand is simply to stop overspending our money, period... a surging popular front now stands athwart the history of government expansion yelling Stop!

To answer the question asked at the end of our last post, perhaps this then is the synthesis created by debt-theft plus the spending crisis: Instead of the New Soviet Man that the Left has sought for nearly a century, we may be midwives at the birth of the New Sovereign Voter, who rises to seize control of the government and return it to what our Founders meant it to be: a useful ass, not the whip-wielding master.

Hatched by Dafydd on this day, May 26, 2010, at the time of 5:29 PM

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The following hissed in response by: paul

I recently read "The Evolution of Political Thought" by C. N. Parkinson. He points out that by the time of Aristotle there was a lot of experience with democracy in the Greek city states and very good reason why it became distrusted. Athens was the most famous but there were 158(!) examples by then. The evolution was from a dictatorship/monarchy to an aristocracy as the kingship inevitably weakened. This was followed by a democracy which degenerated into socialism once the civil service and people on the dole became a large enough force to overwhelm the productive part of the population. Socialism quickly became a dictatorship once the economy collapsed. Even in Athens, democracy only lasted about fifty years. The founding fathers were well aware of this history and one reason why they designed a republic with enumerated powers. (They also didn't like socialism. At the end of Federalist #10 Madison calls redistribution of wealth immoral) So whether it was Tyler or someone else, he just read Aristotle.

The above hissed in response by: paul [TypeKey Profile Page] at May 27, 2010 12:14 PM

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