Bailouts in perspective
Also from NRO, this time from Mark Hemingway:
And that's what worries me. The raw numbers (while huge) mean nothing or almost nothing, at this point in America's fantastical record of economic success. Weathering the current credit crisis will, IMO, require record-setting expenditures of public dollars simply because we're a fantastically rich nation, and if that's what it takes takes to restore consumer confidence in capitalist America, I'm okay with that. But what will our political leaders take away as the principle lesson from this crisis? That it is better to govern lightly, and give the private sector the freedom to gain or fail, to rise or fall on its own merits? Or that it is better to take away freedoms from the private sector as a safeguard against future crises?
I hope for the former, but fear we're in for another round of the latter. Say hello to the new New Deal.
UPDATE: Case in point - "Obama Chief of Staff Hopes to Exploit the Economic Crisis to Expand the Growth of Government"
Those of us who intend to push back against our would-be government nannies have got to get invigorated now, or else we'll be swept aside by the momentum of Barack's historic win. By nature, I'm not an activist. I don't have an activist's compulsion for public demonstration. But I do intend to observe and point out my observations (both here on the Kadnine blog and in letters to my elected leaders.) It's long been my policy to listen to my elected leaders' words (and the words of their appointees) and take what they say at face value. I don't assume it's some sort of benign code to placate the base. When Obama's Chief of Staff is quoted, "... You never want a serious crisis to go to waste," because it's "an opportunity to do things you could not do before," ... believe him! Why? Here's why.
More Central Planning is always the proposed answer in every crisis. Always. It's human nature. We humans are hard-wired to want to meddle in the affairs of others (and politicians doubly so.) It takes self-awareness, education, and discipline to leave our neighbors alone. It takes instruction from those who came before us to learn that giving in to that base desire to try to run the lives of others is, in fact, a vice. It's a character flaw and not (as too many have convinced themselves,) a virtue. These deluded on both Left and Right believe their only sin is "caring too much." And that's unfortunate.
Also, I'll be watching for an epidemic of mission-creep coming down the legislative pike from the majority Democratic Congress, (aided by many Republicans who just loves them some big federal programs!) Congress critters of all brands use crises to further their pet projects. Remember how we were told draconian new drug enforcement laws were "needed" to win the War on Terror? Yeah. It was fun pushing back then, wasn't it? It worked, too. It can work again.
The bailout [thus far] has cost more than all of these big budget government expenditures – combined:Some staggering numbers, to be sure. But also keep in mind the staggering wealth, the surplus we've enjoyed in recent years as compared to even a generation ago. I'm not worried about the numbers so much as I am worried about Thomas Sowell's assessment about what this "crisis" is really all about:
- Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billionThe only expenditure that comes close is WWII, and even that cost less.
- Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
- Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
- S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
- Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
- The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
- Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
- Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
- NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
Amid all the political and media hysteria, national output has declined by less than one-half of one percent. In fact, it may not have declined even that much-- or at all-- when the statistics are revised later, as they very often are.
We are not talking about the Great Depression, when output dropped by one-third and unemployment soared to 25 percent.
What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them.
And that's what worries me. The raw numbers (while huge) mean nothing or almost nothing, at this point in America's fantastical record of economic success. Weathering the current credit crisis will, IMO, require record-setting expenditures of public dollars simply because we're a fantastically rich nation, and if that's what it takes takes to restore consumer confidence in capitalist America, I'm okay with that. But what will our political leaders take away as the principle lesson from this crisis? That it is better to govern lightly, and give the private sector the freedom to gain or fail, to rise or fall on its own merits? Or that it is better to take away freedoms from the private sector as a safeguard against future crises?
I hope for the former, but fear we're in for another round of the latter. Say hello to the new New Deal.
UPDATE: Case in point - "Obama Chief of Staff Hopes to Exploit the Economic Crisis to Expand the Growth of Government"
Those of us who intend to push back against our would-be government nannies have got to get invigorated now, or else we'll be swept aside by the momentum of Barack's historic win. By nature, I'm not an activist. I don't have an activist's compulsion for public demonstration. But I do intend to observe and point out my observations (both here on the Kadnine blog and in letters to my elected leaders.) It's long been my policy to listen to my elected leaders' words (and the words of their appointees) and take what they say at face value. I don't assume it's some sort of benign code to placate the base. When Obama's Chief of Staff is quoted, "... You never want a serious crisis to go to waste," because it's "an opportunity to do things you could not do before," ... believe him! Why? Here's why.
More Central Planning is always the proposed answer in every crisis. Always. It's human nature. We humans are hard-wired to want to meddle in the affairs of others (and politicians doubly so.) It takes self-awareness, education, and discipline to leave our neighbors alone. It takes instruction from those who came before us to learn that giving in to that base desire to try to run the lives of others is, in fact, a vice. It's a character flaw and not (as too many have convinced themselves,) a virtue. These deluded on both Left and Right believe their only sin is "caring too much." And that's unfortunate.
Also, I'll be watching for an epidemic of mission-creep coming down the legislative pike from the majority Democratic Congress, (aided by many Republicans who just loves them some big federal programs!) Congress critters of all brands use crises to further their pet projects. Remember how we were told draconian new drug enforcement laws were "needed" to win the War on Terror? Yeah. It was fun pushing back then, wasn't it? It worked, too. It can work again.