The New Clarion

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The Purpose Of It All

November 24th, 2008 by Myrhaf · 7 Comments · Politics

The spending just keeps piling up. As Gus Van Horn puts it,

The Troubled Asset Relief Program, is, at $700 billion, the largest such outlay in history by the Federal government, but it is hardly the full dollar cost of the current financial crisis. Also passed in 2008 were the $30 billion Bear Stearns, the $150 billion American International Group, and the $200 billion Fannie Mae/Freddie Mac bailouts. This is nearly $1 trillion in bailouts for 2008 alone. In addition, the Federal Reserve may have already lent (as of last Friday) another $2 trillion on an emergency basis to prop up the economy, over half of that in the seven weeks following a relaxation of collateral standards on September 14.

And, by now, we should all know that “loan” is all but a government code-word for “present-day wealth transfer to the unproductive, to be paid for by future productivity on the part of other members of society”. Via Matt Drudge, there is news this morning that the Democrats are mulling an additional $700 billion “stimulus” package and the Fed “pledges” — our words are becoming as inflated as our currency eventually will be — have topped $7.4 trillion!

Obama is also talking about a new jobs program like FDR’s WPA:

President-elect Barack Obama is developing a plan to create or preserve 2.5 million jobs over the next two years by spending billions of dollars to rebuild roads and bridges, modernize public schools, and construct wind farms and other alternative sources of energy.

The campaign did not release an estimate of the number of jobs that his latest proposal would create. But congressional aides who have been involved in developing stimulus proposals said that any plan to create 2.5 million jobs is likely to be significantly larger — probably well over $200 billion, or between 1 and 2 percent of the gross domestic product.

Economists have called on the federal government to spend at least $150 billion and as much as $500 billion to ease the effects of what is expected to be the most painful and prolonged recession since World War II. A stimulus package signed by President Bush in February cost $168 billion.

House Democrats have been talking about a new package worth at least $150 billion, and possibly much more. During the presidential campaign, Obama proposed a two-year, $175 billion stimulus package with money for cash-strapped state governments and infrastructure projects as well as a $1,000 tax credit for working families.

This is done to “stimulate” the economy. Keynesians believe that if the state takes money from Peter to give to Paul that this somehow improves the economy.

Obama also wants “to make health insurance affordable and accessible to all.” (This used to be called socialized medicine, but sophisticates these days consider any talk these days about socialism as unrefined. Obama might be following the ten point program laid out in the Communist Manifesto, but please — don’t call him a socialist!) From Obama’s own web site,

The Obama-Biden plan provides affordable, accessible health care for all Americans, builds on the existing healthcare system, and uses existing providers, doctors and plans to implement the plan.

How much will this cost? However much the government estimates, you can bet the house, if you still have one, that the real cost will be a lot more.

Then there are Obama’s plans for sweeping new “service” progams.

President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps.

How much will this end up costing?

Earlier this year it was estimated that Obama was proposing $1 trillion in new spending. That was before the crisis and the hundred of billions — trillions now — of money being thrown at corporations the state considers too big to fail.

In addition to spending there are threats of massive regulations such as cap and trade that could devastate the economy. To top it all, there is talk in Congress of nationalizing 401k plans. Politicians are desperate to get their hands on that pool of wealth. After all, shouldn’t everyone sacrifice for the good of the country?

Benjamin M. Anderson, who was an economist working on Wall Street back in the 1920’s, proved in Economics and the Public Welfare that the economy was recovering when Roosevelt was elected president in 1932. Then Roosevelt’s first 100 days sent the economy into the Great Depression, which lasted until 1945, when the Republican Congress repealed some of Roosevelt’s most oppressive measures, such as wage and price controls. It looks like we are on the verge of another massive wave of government intervention, all in the name of ending a crisis.

Do our present politicians think all this spending and regulating will make anything better? Do they think Americans will prosper and be happy for all of it?

Statists don’t care if Obama’s program is practical, so long as it is, by their standards, moral. Altruism demands that the state redistribute wealth and reorder society to make it more “fair.” Obama’s web site says,

“Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.”

Obama considers taking from the rich to give to the less rich to be “restoring fairness.”

Obama’s program will not create wealth. It will only expand the power of the state in order to force the productive to serve the less productive. It will make statists happier because they are reforming American society in accordance to their morality. That is the real meaning of change. Millions of naive voters thought it meant making lives better.

Another thing people forget: environmentalists oppose prosperity. The idea of free people in a capitalist society improving their standard of living, driving bigger cars and exploiting more resources is their nightmare. In their ideal society, people would live in villages in a pre-capitalist economy, with food grown locally, and the local cobbler happily repairing Timmy’s shoes in his dusty little shop. Billions would die if we reverted back to such an economy. C’est la vie.

Obama’s spending and intervention will make America less prosperous. It will not work. A great deal of wealth that would have existed if the government did nothing will be destroyed. Maybe that’s the point.

7 Comments so far ↓

  • Harold

    It’s so ridiculous it’s almost comical. I mean I’ve reached the point where I almost don’t even care anymore. If people want this so bad (and they do) let them have it.

    “Obama will ask [lol] the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.”

    What, I wonder, is so responsible about taking people’s money like this in the first place? And “give back”? Well, if I’m not mistaken it was theirs to begin with as they (or the head of the household) earned it. You can be sure it wasn’t given to the IRS voluntarily, lol.

    Millions of voters may be naive (maybe) but millions of voters subscribe to the morality of altruism. The result is the same.

    The man wants hundreds of thousands of new government employees. Well, we’ll see if he can do it with the help of Congress. Lol, and they call themselves progressives. What’s so different about any of this? Not that new or old is necessarily good of course, but it’s certainly presented that way.

    You might want to seriously consider implementing a system that allows users to preview posts; or at least edit them within a time limit.


  • madmax

    “This used to be called socialized medicine, but sophisticates these days consider any talk these days about socialism as unrefined. ”

    This is extremely common with Leftists. To them Socialism is limited only to Soviet Russia. It doesn’t apply to modern day America which they think is an “unregulated” system. George Sorros is a typical example of this. He believes Communism, Fascism AND Capitalism are all unrealistic systems because they are based on absolutes. And since absolutes can’t exist in reality because we can never know reality (Popper is his favorite philosopher which means Kant really is) then a just society must avoid “free market ideologues” just the way it avoids fascist ones. And of course Bush and his fellow Republicans are “free market ideologues”. So, according to this view, there is no socialism in America.

    Also, the Left will attack you if you say that Obama is a socialist. Even some Objectivists or libertarians I have seen have criticized the claim that Obama is a socialist. Which leads me to ask, would it be better to call Obama and Bush “interventionists” or “welfare-statists” rather than “socialists”? I really like the socialist label because it gets to the heart of the matter and I fear that the Left will discredit the term like they have essentially discredited the legitimate use of the term fascism.

  • Jim May

    We need to insist on definition by essentials, not the pedantic meanings used by evasive intellectuals.

    Socialism is not defined by who owns the means of production; it is defined by whether the individual is free to opt out of something, or not. If individuals are free to opt out of something, it’s capitalism; if the individual is not free, it’s socialism.

  • Billy Beck

    I think you’re the only person I know besides me who’s actually read Anderson.

  • Myrhaf

    I worked for two months in the ’80s at Laissez Faire Books in NYC, where I picked up a lot of great books. The Anderson book is backed up with facts and figures that cannot be denied. The problem is that people like you and me have read the book, but not Paulson, Bush, Obama or Waxman.

  • Bill Brown

    This resurgence of Keynesian economics (or I guess it never really left the Left) makes me wonder if those in power actively refuse to read books like Anderson’s. Maybe it never crossed their radars, maybe they’ve read it but dismissed it on ideological grounds. It’s been a long time since I read it, but I remember considering it incontrovertible and immaculately researched.

  • Two--Four

    […] Myrhaf is posting at a new blog, and I’ve discovered who I’m pretty sure is the only other person I know who has actually read […]