That “We The People” Thing
By Mitch Berg
Janet Dailey, writing in the Telegraph, notes British Minister of the Exchequer George Osborne’s visit to the US, along with Prime Minister David Cameron.
“George who, minister of what?”
George Osborne. The “Minister of the Exchequer” is what they call their “Secretary of the Treasury” over there.
Anyway, Dailey – who is a center-right columnist at the center-right Telegraph (yaaay, Europe, for at least having a journo culture that’s honest about its biases!), notes something that eludes our entire media and one, and sometimes both, of America’s major poitical parties:
This brings me to my original theme: why America’s recovery – which will eventually come, as night follows day – cannot be an instantly usable model for a British one, which is not inevitable. It is not federal governments that bring about economic revival in America: it is the country’s people.
From Daily’s pen to God’s ears.
John McCain got pounded by the media and America’s Stupid Class for saying, in 2008, that the fundamentals of the American economy were strong. As wrong as he was, and is, on so many issues, he had that one as right as anyone ever has.
Because the only relationship our economy has with our government is a negative one. Government action inevitably harms the economy (in the long run, if usually but not always the short). It’s only when government butts out that it does no harm, which is the best it can do.
Even Franklin Roosevelt’s New Deal has finally been demythologised. All those works projects and federal programmes may have done something for national morale, but the hard economic evidence shows that the worst effects of the 1929 crash had begun to abate under Herbert Hoover, and that the Great Depression (which was arguably prolonged by FDR’s policies) did not properly end until the US entered the Second World War.
That’s the elephant in the American economic room.
We’ve got four generations of economists, now, who pay obeisance to the flawed notion that Keynesianism worked, once.
It’s wrong, of course; as Dailey notes, it was a morale booster that arguably did more harm than good, and certainly prolonged the period of extended private unemployment.
No – America’s nine economic lives come from its private sector.
Read Dailey’s entire piece.
Send it to a liberal friend. Make a liberal friend to send it to, if you need to.
March 20th, 2012 at 12:34 pm
Keynesian economics did not replace classical economics, it modified it, under particular circumstances.
Classical economics said that in a depression or recession, wages and prices would fall until full employment was restored. This wasn’t happening in the Great Depression. Keynes identified the problem as “sticky” wages and prices. “Keynsian economics” tried to address this problem by restoring consumer demand (rather than supply).
Keynesian government spending is supposed to address the cyclical ups-and-down of the business cycle, it is not socialism.
Keynesian stimulus must be borrowed money, or it counter-acts the stimulative effect. This is true whether you get your taxes from the rich or poor (“taxes at any income level reduce both spending and investment”).
If people are forward looking, the stimulative effect of spending borrowed money is lessened or negated because people will reduce their current spending and investment in expectation future higher taxes.
March 20th, 2012 at 1:20 pm
I’m not a professional sociologist but here is what I’ve observed in my travels. One morning when I was in New York City I suddenly realized that everywhere you went and everywhere you looked, just about everyone was working at something. It may have been sweeping a broom or carrying packages, or serving food at a stand, but everyone – all colors, all classes – was hustling (in the good sense of the word, though no doubt many were also “hustling”). Most surprising was that in the businesses almost everyone was more proactive and helpful than I’d been led to expect. Even in non-commercial settings such as us standing on a corner looking at a map and trying to find where we were, people would stop of their own volition and point us in the right direction or offer a helpful tip. It’s part of the energy of the place and it has made NYC one of this midwestern boy’s favorite places.
When we were in London, though, and in traveling around England it was damnably difficult to get even the simplest things done (such as buying gas or finding a hotel). Aside from the bubbly staff and proactive management at one hotel (where the manager said they purposefully focused on doing things to make people want to come back) the people we met in shops and on the street were indifferent at best to you and their surroundings. Whenever you asked why public phones were universally vandalized or why brush was allowed to grow over road signs you’d get the inevitable shrug and response of “That’s just the way it is, innit?”
Now you can suggest that the form of government has something to do with this, but it goes beyond that. When my wife traveled in China she found the people to be industrious and even entreprenuerial despite the Communist government. The Chinese students our family has hosted over the years have been very focused and achievement oriented. In many ways the Chinese we’ve known demonstrate a more “capitalist” nature than many Americans we know of the same age.
The system of government that is in place can have a large impact – as in discouraging even the idea of doing something a little better than the next person – but it can’t kill the spirit of those who refuse to give in. I don’t think this attitude and resilience is gone from Americans. Just look at the energy (human and otherwise) being produced in North Dakota right now, even as the sheepish elite tsk-tsk at the crude conditions and rough people while giving the Bakken the Reardon Steele treatment politically and environmentally. They aren’t concerned about the danger to the environment, but to the danger individual entrepreneurism poses to their controlling world view.
March 20th, 2012 at 1:45 pm
For further information regarding FDR’s feckless and self-serving stab at our freedom, I suggest “FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression” by Jim Powell….it should be in every high school history classroom..
http://www.amazon.com/FDRs-Folly-Roosevelt-Prolonged-Depression/dp/0761501657
March 20th, 2012 at 1:49 pm
Chancellor of the Exchequer, not Minister of the Exchequer…
Small thing.