Commanding the Tide

Dedicated Reds never tire of pointing out that communism never failed, because it was never tried. No country ever made the product pure enough. It would succeed, they aver – utterly without evidence – if only truly implemented.

Similarly, when considering the New Deal – which everyone now admits to be a massive economic failure – the American Left contends that its somewhat softer leftism – massive governmental spending, huge deficits, tremendous debt – didn’t truly fail, because it wasn’t tried: the spending, deficits, and borrowing weren’t massive enough.

Let’s be clear: there is no real world evidence – that’s NONE – that a tremendous expansion of government will produce ANY economic benefit.

What its advocates hope it produce is a leftist utopia, in which all the things they’ve pined for over the years – massive expansion of entitlements and social spending, centralized control over health care, etc. – comes into being. As Rahm Emanuel noted, "rule one: Never allow a crisis to go to waste. They are opportunities to do big things." They might be wrong things, but they will be BIG!

None of the "economic stimulus" proposals have anything whatsoever to do with actually bringing about prosperity. They are, rather, designed to effect a huge concentration of power in DC. Because, as between a prosperous society, and a "fair" society, the Left always chooses the latter. Better, from the Left’s perspective, for all to be mired in poverty than to permit some – even a substantial majority – to prosper when others do not.

We KNOW what makes for prosperity, because it’s actually been tried, both in the US and around the world: freedom. The freer the economy, the greater the prosperity. Look at those nations with the greatest economic growth, and, without fail, they also provide the most economic freedom. Those which attempt to corral their economies in the name of "fairness" inevitably lag behind.

Governor Corzine muses that, with a huge federal stimulus bill, NJ could reap $6 billion in new funds. We could effect the same goal tomorrow, through the expedient of a substantial tax cut, directed squarely at "the wealthy", which is to say, people who live in New Jersey.

But the Left will not permit that. Indeed, President-elect Obama’s proposals are already running into Leftist objections because they include (gasp!) tax cuts (albeit profoundly silly, one-time gimmicky cuts). Bob Herbert encapsulates the Leftist manta perfectly when he writes:

"This is an emergency. There is one overriding mission for the incoming Obama administration when it comes to dealing with the economy, and that’s putting Americans back to work. Forget the G.O.P.’s mania for tax cuts. Forget, for the time being (but not forever), the ballooning budget deficits. Forget the feel-good but doomed-to-fail effort to play nice-nice with the rabid partisans of the right who were the ones most responsible for ruining the economy in the first place.

"Put the people back to work!"

By "back to work", he means massive governmental spending on huge governmental projects. He envisions creating not a single new private sector job, except such as may "trickle down" from governmental spending. Indeed, his Times colleague, Paul Krugman, worries that $2 trillion in deficits might not be big enough!!

Ah, what a difference an election or two makes!! Remember the quaint old days when the Democrats ran for office as fiscally prudent, green-eye-shade types, trumpeting their support for "pay as you go" federal programs, pledging that every single new spending program would be offset by cuts to another, or tax increases? That proved too Republican to last.

Contrary to the Leftist narrative, what got the economy into trouble was a combination of stupid governmental policy – Fannie Mae, Freddie Mac, the CRA – and creative, but profoundly dangerous, financial products, like Mortgage Backed Securities, which transformed what might have been a problem for overexposed lenders into a system wide failure. The economy did not contract because taxes are too low (a patently absurd assertion), because government is too small, or regulation too lax. Indeed, if massive spending, crazy borrowing, and huge deficits stimulate the economy, how is it that we are not awash in prosperity? Were not the past eight years the virtual definition of a governmental spending orgy?

King Canute famously commanded the tide to halt; curiously, the tide refused to listen. King Obama and his leftist allies stand upon the beach, commanding the economic ocean to obey. They’re going to get wet, and drown us all in the process.

Because while government has proved remarkably efficient at destroying economies, it cannot provide prosperity. Only private folks can do that. The New Deal and the Great Society – never mind the more expansive governmental economic intrusions prevalent in Europe – prove that Big Government NEVER provides prosperity. Put another way, government can very effectively contract the economic pie, but it never increases it.

Ronald Reagan proved that low taxes stimulate the economy, provide greater prosperity, and serve the common good, far better than any governmental controls. In a word, freedom works. This galls the Left mightily. Hence the objections by Senate Democrats to the prospect of tax cuts, which would let the people keep and spend more of their own money. Leftists truly believe they can spend the people’s money better than can the people themselves. While that represents extreme hubris – and has NEVER worked anywhere in the world – they remain stalwart.

But fear not. Like their somewhat redder colleagues, when the Obama-Democratic plan fails to produce economic recovery, Krugman, Herbert and their friends will complain that it would have worked, if only we’d spent a few trillion more. Like any religious dogma, leftist economic tenets are simply immune to rationale refutation: they accept them as a matter of faith, without regard to the actual evidence.

Like King Canute, the Left is about to get (yet another) demonstration on the limits of governmental power. Unlike that wise King, though, they’re unlikely to actually learn the lesson.