Friday, January 16, 2009

Welcome To Ayn Rand's Hell (updated with stuff from TMQ and a couple of extra Perilous Principles)

Otherwise known as the world in which Dubya, Sec. Paulson and the Obamessiah have solved the economic crisis. I'm laying the sarcasm on thick, of course, as it is my firm opinion that the following two things may truly be said of the overwhelming number of "solutions" that government offers:

1. The "crisis" to be solved either is not in fact a crisis, or else is a crisis that was created by the government to begin with.

2. The "solution" will make things worse, certainly in the long term and usually in the short term as well.

Thanks to Jennifer for the link, which was especially generous of her since she most certainly does NOT share my (and Rand's) libertarian cynicism.

UPDATE: Adding two more general rules to the above, plus pasting in an excerpt from Tuesday Morning Quarterback that seems beautifully relevant (especially since TMQ obviously shares my take more or less exactly):

3. More often than not, the people who will suffer the most from the "solution," are the people the politicians claim to be "helping."

4. But one group of people who ALWAYS benefit from government solutions, are the politicians implementing the "solution," which is to say, as a general rule, the people who created the crisis in the first place (assuming there really is a crisis and not just the illusion thereof).

Here's TMQ's take:

The Crisis-Claiming Crisis: Barack Obama also said last week the recession may last "years and years" unless Congress votes him fantastic new spending power. The recession is unlikely to last "years and years" even if Congress does nothing: The late-1970s and early-1990s recessions ended on their own without dramatic legislation. But presidents love crises -- famously, Bill Clinton lamented that he never got to preside over a war. The economic situation is "a crisis unlike any we have seen in our lifetime," Obama declared at George Mason University. Really! Unlike Sept. 11, unlike the 1980s crime wave, unlike the 1960s civil-rights riots and murders? To me the current recession resembles the early 1990s recession, which was also triggered partly by mortgage-based financial fraud (in that case the S&L meltdown), which also caused credit and investment markets across the United States and European Union to seize up, which also was accompanied by a stock swoon (about 30 percent, only somewhat worse than the current swoon) and which also brought about deflation in the housing market. But who remembers 1991? That's ancient history. Wasn't Augustus the Emperor in 1991?

Presidents love to proclaim things are worse than they seem, because this can be used to justify the awarding of extra presidential power. Just after George W. Bush took office, in the winter of 2001, he proclaimed an "energy crisis" and demanded sweeping new powers from Congress. Petroleum and electricity-generating capacity should have run out by now based on Dick Cheney's 2001 statements. In the spring of 2001, a U.S. military plane collided with a Chinese jet and crash-landed in China; this was declared a crisis and said to justify new White House powers. Sadly, on 9/11, an actual crisis occurred. Next, Bush declared a crisis of weapons of mass destruction in Iraq, and asked Congress for extraordinary powers to invade a nation that did not appear to pose any threat to the United States. Then terrorists within the country were said to be a crisis, said to justify board expansion of presidential powers including warrantless wiretapping of American citizens and the holding of prisoners without charges. When gas pump prices hit $4 a gallon in the winter of 2008, Bush called that a crisis and asked for additional powers. When financial markets froze in the autumn of 2008, Bush immediately asked for $700 billion to spend without congressional oversight. Presidents love to cry crisis and then ask for extra power and extra money outside normal channels of accountability.

Obama hasn't even been sworn in, and already seems susceptible to the desire to proclaim a crisis. "A bad situation could become dramatically worse," the president-elect said of the economy last week. This seems exactly what a president-elect should not be saying -- there's a lot of self-fulfilling prophecy in business. But such comments sync with the practice of presidents describing situations as much worse than they actually are, in order to justify more presidential authority. The moment the economy resumes ticking upward, expect President Obama to tell us there is a shocking super-ultra global warming crisis that justifies expanded presidential powers and extraordinary spending programs. (Climate change is a genuine problem, but no crisis.)

The news media like the sense of crisis, because it keeps viewers glued to TV news and nervously scanning newspapers. Part of the downward psychology of the recession is that journalists are using the most negative language possible -- "SALES PLUMMETED 2.2%" is an actual headline from last week's New York Times economic coverage -- while demonstrating no sense of history or proportion. The latest Bureau of Labor Statistics figures show 7.2 percent unemployment. That is a serious concern, yet was presented by the media as an unprecedented calamity -- in 1991, unemployment was 11 percent. Even with 2.6 million jobs lost in 2008, obviously a disturbing number, there are more people employed right now than five years ago, since overall, employment grew in that period. The civilian labor force did not even decline in December -- read the fine print. Unemployment rose because jobs did not keep pace with population growth. This kind of perspective is utterly missing from media coverage, since news organizations perceive a self-interest in making the situation sound worse.

Members of Congress of both parties like the sense of crisis, whether real or imagined: it gives them excuses to take money away from average people and hand bags of gold to favorites and interest groups, who repay the representatives and senators with campaign donations. The extent to which members of Congress have a financial incentive to tax the average and confer money on political favorites would I think shock the Framers, who did not anticipate the corrupting impact of campaign donations, because campaigning in their time entailed giving speeches in town halls.

You might think: Washington is full of somber experts and urbane talking heads, why don't they warn presidents not to declare crises? Institutional Washington loves the sense of crisis, because this makes institutional Washington feel important. Lobbyists, think tank fellows, news-channel figures, government officials and Washington pundits all become more significant when there is a sense of national peril -- plus, they get to strut around projecting gravitas. If things are basically fine, why give extra attention, to say nothing of extra money, to institutional Washington?

1 Comments:

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