| It's Not the Economy, Stupid
| Wednesday, April 01, 2009
|By Max Borders
As for me, the penny has dropped: If the multi-trillion-dollar credit card, massive redistribution schemes, and behemoth budget seem so zany, why is anyone continuing to think of any of this is economic policy at all? Why don't we think of it as, well, politics? Shrewd and well-played politics at that. For if we do, everything the current leadership is doing makes perfect sense.
Consider the following ten assumptions of the Political Power & Government Expansion Hypothesis:
Neither the Administration nor Democrat-controlled Congress cares one iota about whether or not we're in recession—even if it's a deep, long-lasting recession. If it lasts two years or ten, it matters not.
Like the Great Depression and like global warming, it's a "crisis," which is to be used in the manner of Rahm Emmanuel or Naomi Klein—that is, to bring about sweeping, radical political reform, economics be damned.
Equality is more important than economic growth.
Entrenching power is more important than economic growth.
Keynesian stimulus is a plausible justificatory pretext under which to do everything the party in power has ever wanted to do, including socialize healthcare.
The electorate of the U.S. is largely ignorant about economic matters, especially warmed-over Keynesianism. "Stimulus" sounds stimulating.
Great swaths of the U.S. electorate can be bought via the formation of new interest groups who come to depend on all the new programs and new spending.
New, dependent interest groups help Democrats consolidate even more power, as it is much easier to dole something out than take it away.
If these economic policies fail in the short-to-medium term, it was always a problem that a) they "inherited" from George W. Bush, and b) will give them a justification for doing even more, for years to come.
If the business cycle starts to trend upward again and the recession lightens -- notwithstanding the bad economic policy -- the Administration and Congress will take credit for it even though the upturn will come despite all this government action, and not because of it.
What does all this mean? It means it's time for the commentariat to be more cynical. It's time to call spades spades. Let's stop trying to explain, on economic grounds, that warmed-over Keynesianism won't help us out of the recession—as if those in power cared about growth (or the electorate understood our explanations), anyway.
Milton Friedman used to say that we should always assume the best of intentions in any adversary. We probably should. But we should also understand that when addressing ideologues that have power, we should have serious doubts as to whether economic growth is their goal (particularly when income redistribution is the only thing close to a stated principle we've ever been able get out of our President).
|posted by citizen jerk @ 4:45 PM