Since few of us can actually wade through and comprehend a federal budget (or even a 2,000-page \u201chealth care law,\u201d as written), most political decisions are based on \u201cnarratives\u201d — histories of how we got here, reduced to a few easy-to-remember sentences.<\/p>\n
The problem is, if we get the \u201cnarrative\u201d wrong, bad outcomes grow far more likely, since we\u2019ll be working to \u201csolve\u201d the wrong problem, or even applying larger doses of the \u201cmedicine\u201d that got us here in the first place.<\/p>\n
Let\u2019s review a few of the \u201cnarratives\u201d now in circulation:<\/p>\n
1) \u201cIt took George W. Bush eight years to create the current economic mess; obviously it\u2019s going to take the Obama administration more than two years to get things fixed.\u201d<\/p>\n
The problem with this narrative isn\u2019t that George W. Bush didn\u2019t do economic harm. He did, if only by refusing on principle to go along with much of the unconstitutional guff Congress enacts, as has every president at least since Taft. The problem is that the narrative wrongly implies we are somehow now embarked on a policy OPPOSITE to that pursued by both parties in the period 2001-2008.<\/p>\n
In fact, Barack Obama draws his economic advisors from the same ranks — largely Goldman-Sachs and the Federal Reserve Board of New York — as did Mr. Bush. The current \u201cBailout Era\u201d began under Mr. Bush; Mr. Obama has merely extended the Great Recession by continuing the same brand of Keynesian interventions to prop up failed enterprises and prevent the purge of mal-investments — on steroids.<\/p>\n
How should we expect a dramatic turnaround when essentially the same gang now recommend the same interventionist policies, only on a much grander scale, albeit it through a different \u201cfront man\u201d?<\/p>\n
Central state interventions in the economy were minimal, by today\u2019s standards, through the early 1900s — the period of America\u2019s most spectacular growth in wealth — with the result that most recessions were short-lived and self-correcting. The problems started when fractional-reserve banking (previously and properly considered a form of fraud) received an official government imprimatur, at the same time the power to print money and set its value in terms of gold and silver (today: zero) was transferred from Congress to a group of private banksters operating as the \u201cFederal Reserve Board.\u201d<\/p>\n
That happened in 1913 — the same year our forebears launched the income tax, interestingly enough — followed (as the night follows day) by the divorce of the paper \u201cdollar\u201d from gold in 1933 and from silver in 1964.<\/p>\n
When government is bound to redeem every \u201cdollar note\u201d in gold or silver on demand, they\u2019re limited in the amount of paper they can print by the amount of bullion in the vaults. Remove that limit, and they will eventually print money till it\u2019s worthless.<\/p>\n
Although all the steps mentioned above came under Democratic presidents (Wilson, Saint Roosevelt, Lyndon Johnson), plenty of Republicans went along. Tossing out Republicrats and installing Demopublicans seems to have little impact.<\/p>\n
2) It\u2019s widely asserted we need more collectivism, more redistribution, due to \u201cthe increased gap in wealth between America\u2019s rich and poor.\u201d<\/p>\n
How does this hurt the non-rich?<\/p>\n
The rich can\u2019t eat their money. They have to invest it somewhere — usually creating new products, useful technologies, and new jobs. They don\u2019t do this to be altruistic. They do this to earn more money — if nothing else, to leave it to their kids. So long as they\u2019ll still get arrested should they commit fraud or sell poison labeled as candy, how does this hurt me?<\/p>\n
The CEO of the corporation that employs you may enjoy a salary which is a greater multiple of yours than was the case for your great-grandfather and his boss. But grand-grandpa walked to work, while his boss had the service of a horse-drawn carriage, or early flivver with chauffeur.<\/p>\n
Today, you drive a modest automobile with an automatic transmission. Even if your outfit\u2019s CEO flies around in a corporate jet and owns cars much fancier than you\u2019ll ever have, does this \u201cincreased gap\u201d mean you\u2019re worse off that your great-granddad? No. He was stuck paying the prices of the only store within walking distance, while your car — and your Internet connection — allow you to comparison shop all around the globe.<\/p>\n
With central heating and indoor toilets and hot and cold running water and microwaves and refrigerators and flat-screen TVs and home computers, our lifestyles are fabulously more affluent than those of great-grandpa. How does it hurt us that this same system allows the CEO to make millions? It\u2019s not as though we\u2019re divvying up a permanently fixed pile of \u201cwealth.\u201d<\/p>\n
A great source on this topic is the $15 paperback \u201cIt\u2019s Getting Better All the Time \/ 100 Greatest Trends of the Last (sic) 100 Years,\u201d by Stephen Moore and Julian L. Simon, full of reassuring graphs and charts on wealth, nutrition, environmental protection, even \u201cthe state of Poor Americans.\u201d<\/p>\n
Nor does it make much sense to whine that \u201cToday, 20 percent of America\u2019s children live in poverty\u201d when they enjoy all the amenities described above, plus more, despite the fact the taxpayers subsidize the moms\u2019 choice not to marry.<\/p>\n
First, the government simply re-sets the \u201cpoverty line\u201d each year, making sure (de facto) that 15 to 20 percent of families fall \u201cbelow\u201d it. Second, the value of their government \u201cbenefits\u201d is rarely counted in the calculation of whether they live \u201cin poverty.\u201d<\/p>\n
This explains why most of America\u2019s \u201cpoor\u201d enjoy a lifestyle which would place them among \u201cthe privileged\u201d in most of the rest of the world.<\/p>\n
On the other hand, we know how \u201cpunishing the rich\u201d till they fled with their remaining wealth worked out for the Soviets from 1917 to 1991, for the North Koreans from 1945 until today, for the Cubans since 1959.<\/p>\n
Do we really want to repeat the experiment here?<\/p>\n
# # #<\/p>\n
Though they weren\u2019t the main topic of my column, I mentioned in passing last week that as a youth Barack Obama attended a Muslim school in Indonesia, and that his recent trip there and to India, hauling along an entourage of some 3,000 courtiers, cost an estimated \u201c$200 million per day.\u201d<\/p>\n
A few readers complained these were \u201cRepublican lies.\u201d<\/p>\n
The source of the $200 million per day estimate for \u201csecurity, stay and other aspects of the presidential visit\u201d was \u201ca top official of the Maharashtra government privy to the arrangements for the high-profile visit\u201d as cited Nov. 3 in the Times of India, the paper of record thereabouts (http:\/\/miniurl.com\/68024<\/a>).<\/p>\n So far, most attempts I\u2019ve seen to \u201cdebunk\u201d this number have been limited to multiplying the standard cost of an Indian hotel room times 3,000 (I HAVE noticed every time I check into a Day\u2019s Inn they now add the cost of a mid-air refueling for my escorting F-15s to my bill, haven\u2019t you?)<\/p>\n The estimate does seem high. Many commentators have backed away from it, though much of the cost will have been for deployment of military assets for security, which makes the true figure elusive — you rarely want to take the \u201cunder\u201d on a Pentagon expenditure. The main point, surely, is that traveling with an entourage of 3,000 courtiers and retainers is hardly a signal of frugality on the part of a government running huge deficits.<\/p>\n As for a reader\u2019s assertion that young Obama did not attend \u201ca Muslim school\u201d in Indonesia because he attended \u201ca public school,\u201c the writer may be under the impression that some version of our First Amendment provides a \u201cseparation of church and state\u201d in Indonesia, which is not the case.<\/p>\n