By: Lee Cary
We Americans live in a political era when it’s reasonable, perhaps even prudent, to consider the unthinkable.
Before the election of Barack Obama, most Americans were unable, or unwilling, to consider what his campaign promise to “fundamentally transform” the nation might mean. Before his election, those who used the word “socialism” to refer to his intentions were chided for being too extreme. (A longtime friend of mine said I’d “gone over the edge” in using such language.)
Not until Newsweek published a February 2009 article entitled “We Are All Socialists Now” did the word become widely acceptable, if used benignly.
The litany of previously unthinkable events that have unfolded since then, most recently including our role in Libya, don’t need listing here. The hits just keep on comin’, with no let-up in sight.
For example, when Fox Nation recently reported that former Clinton administration official Jamie Gorelick is on the short list to be the next director of the Federal Bureau of Investigation, we weren’t shocked; we’ve grown accustomed to the unthinkable.
The New Socialist Democrat Party is now fully engaged in a relentless pursuit of what was, throughout the 20th Century, an intermittently-enacted, comprehensive, progressive agenda. The Tea Party Movement (TPM) emerged as a wrench, perhaps not unexpectedly but with unanticipated energy, tossed into the progressive machine. Consequently, über-progressive Democrats, like Senators Harry Reid and Chuck Schumer, simply label the TPM based on their experience of it. Anyone, or anything, that gets in their way is, by definition, “extremist” — a label used by tyrants, big and small, throughout history to refer to their opponents.
Jump now to the 2011 budget battle underway in the House and Senate, with a focus on the House where scores of new members of Congress arrived, metaphorically carried on the shoulders of Tea Partiers.
Before the paint was dry on their office doors, speculation began as to whether they would be change agents and fundamentally transform the new Republican majority in the House, or merely conform to the well-entrenched good-ol-boy principle of go-along-to-get-along.
We’ve heard it said that the best tactic of House Republicans with regard to the 2011 budget is to compromise on cuts by backing off their promise to cut $100 billion from the remainder of this year’s federal expenditures, so as to save their powder for the bigger battle over the 2012 budget.
Already it sounds as though the House Republican leadership is justifying the need to avoid a government “shut-down” — which actually isn’t a shut-down — by meeting Democrats part way. “Compromise” is in the D.C. air, while TV pundits speculate over which party would be blamed for any potential “shut-down.” (Talk concerning who could gain the credit for a shut-down is, on the other hand, conspicuous by absence.)
The “narrative arc” — words Senator Obama liked to use during the campaign — suggests that Speaker John Boehner will successfully cobble together a consortium of Republicans, perhaps excluding many of the newly elected members, along with moderate Democrats, meaning those Dems who want to be re-elected to their conservative-leaning districts in the next election.
At the end, the more progressive House Democrats will agree to insignificant 2011 budget cuts they’ll say are necessary to placate the cold-hearted Republicans whom they’ll accuse, with crocodile tears, of caring little for the poor, the elderly, the children, and the puppies. And that hollow metallic sound we’ll hear will be the infamous can being kicked further down the road.
If this happens, conservatives in sympathy with the TPM, whether or not they ever attended a public gathering, will conclude this: The House GOP leadership caved to the Democrat minority because they care more for their careers than for the nation.
Already, the major meme voiced among House Republicans pushing a compromise is that, after all, they only control one-half of one-third of the federal government. (Imagine where we’d be if General George Washington at Valley Forge had said, “We only control a few thousand soldiers, so let’s compromise with the British.)
If this is how the 2011 budget battle plays out, we’ll have at least two ways to interpret it.
Conventional wisdom will say that Boehner and the Boys were careful to avoid blame for shutting down the government a la Newt Gingrich v. Bill Clinton in 1994-95. A shut-down would have weakened their position in the upcoming 2012 budget battle. (It’s hard to see how surrendering in a small battle before a bigger one yields strength to the loser.)
But since this is the era when it’s reasonable, perhaps even prudent, to think the unthinkable, let’s suppose Boehner and the Boys do understand both the message and power of the TPM, and they’d rather not have it so closely aligned with the GOP going forward. Why? Because they fear the “extremist” label being applied to them.
Furthermore, let’s think this unthinkable: that the GOP’s primary goal in 2012 is to win the Senate, not the White House. And, given a choice, they’d choose the Senate. To that end, the House Republicans’ willingness to negotiate an agreement with the Democrat-controlled Senate on the 2011 budget could eventually be cited as evidence of the GOP’s ability to work cooperatively with a Democrat minority in the Senate, and, yet, temper the progressive initiatives likely to emerge out of a second term Obama White House.
The answer to the question — Do Republicans want the White House? — might be this unthinkable: No. Here’s why: If the GOP controls both the legislative and executive branches after 2012, when the inevitable economic axe falls on our debt-ridden nation, they’ll suffer the blame that will automatically befall the party of the incumbent Chief Executive.
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Our Patrick Henry Moment Is Here
Aug 3
Posted by ImpeachCongress in Commentary, Economics, Opinion | 1 Comment
By Monty Pelerin
This country’s first socialist president strode into office confident that he would remake this country. Fortunately for the country, the timing of his election was twenty, if not fifty, years too late. Socialism has failed in its pure form wherever it has been tried. Now it has failed in its modified form. While much of the world realizes this, President Obama is either ignorant or has more sinister plans for the country.
In the 1920s, Ludwig von Mises demonstrated via economic reasoning why socialism could not work. His argument was that without market prices, there was no way to properly allocate resources. About ten years later, Friedrich Hayek supported Mises’ conclusion from a different angle. He approached it as a “knowledge problem” and argued that no central authority, regardless of how intelligent, could possess enough information to make proper and efficient decisions for tens of millions of people and businesses.
History validated the theory of the two Austrian economists. Russia, China, Eastern Europe, Cuba, and North Korea produced inevitable the misery, poverty, and brutality. The two countries that continue the system are amongst the poorest countries in the world, held together only by totalitarian rule and outside economic support.
With the recognition that socialism did not work, “do-gooders” changed their efforts to a system that would be part capitalism and part socialism. They believed that capitalism could be used for resource allocation while the “caring nature” of socialism could ensure equitable distribution of wealth. President Clinton expressed interest in what was then referred to as a “third-way.” Western Europe had adopted this approach decades earlier.
Interestingly, Mises argued that a “third way” could not work, either. In the 1940s, Mises demonstrated that one intervention begets additional interventions. A so-called mixed system is nothing more than capitalism with interventionism imposed. Mises showed that any such system eventually degenerates into full-fledged socialism. In a collection of essays entitled “Planning for Freedom,” Mises concluded:
The countries of Western Europe have, as Mises predicted, deteriorated into social welfare states likely never imagined or intended at their inceptions. As full-blown socialism approached, these countries became insolvent. Soon all will be forced to either dismantle their welfare states or incur sovereign defaults. The U.S., while never formally adopting either socialism or the mixed system, drifted into the mixed system by gradually adopting many socialist programs. As a result, the U.S. faces the same future of insolvency as its European counterparts.
In terms of history, the mixed system dates back only to Bismarck in the 1880s. It was initiated in a few countries in the first quarter of the twentieth century. Its widespread acceptance occurred after World War II, when several countries chose not to return to the decentralized economies that existed prior to the war. England was the prime example. Industries nationalized for the war effort remained nationalized after the war. England rapidly devolved into a third-rate economy as a result. Prime Minister Thatcher reversed the decline by re-privatizing most of these industries.
It took only about fifty to seventy years for the mixed systems to fail. That is literally a moment in terms of history. Many people are still reluctant to admit that socialism is a failure despite the theoretical warnings and the actual failures themselves. With socialists, it is never the system and always the people that are the cause of failure. “If only we had better leaders.” As Hayek and Mises pointed out, it has nothing to do with leadership. There is a fatal flaw in the concept.
As a result of attempting to extend the socialist myth, governments and their populations are now burdened with debt, much of which will never be paid. We are on the verge of a worldwide depression that will hit as governments run out of resources. It is likely that politicians will continue to play the game of “extend and pretend.” But we have reached Ms. Thatcher’s end-point: “The problem with socialism is that you run out of other people’s money.”
How ironic that President Obama’s first major achievement was ObamaCare. In May, Greece was ordered to privatize its health care system. This month, it was reported that England was going to overhaul their health care system. England was frequently referenced as a model of affordable, efficient health care by ObamaCare advocates. Apparently, the English government and its people view it differently.
These instances are not one-time events. Nor will they be limited to health care. The welfare states of Europe will soon be dismantled in part or whole. So too will the entitlement programs in the U.S. The laws of economics and physics are immutable. They are above legislation. Countries do not have the resources necessary to honor their commitments, period!
Our Founding Fathers, without using the term socialism, designed a Constitution to protect against such incoherent schemes. Over time, the Constitution was vitiated by “living document” interpretations, penumbras, and other nonsense. Now, the U.S. stands on the precipice of failure just as Western Europe. It is insolvent, and there are no other alternatives than to default or dismantle.
The world is at a very dangerous inflection point. We are about to enter a depression. Politicians are not going to back away from socialism willingly. They and large numbers of other beneficiaries will do whatever they can to retain the status quo. Despite the unequivocal failure of the modern welfare state, it is unlikely to disappear quietly. The status quo is always difficult to change. It becomes especially so in desperate economic times and for people who believe they are entitled to be taken care of by others.
The welfare state is headed for the dustbin of history. That is certain because it is no longer sustainable. The critical question is what will replace it. As Mises pointed out, there are only two alternatives: freedom or totalitarianism. There is no middle ground. There is no political compromise that can bridge this gap.
Regardless of which side of the issue you are on, the battle will be bitter and likely last a decade or more. Economically, everyone will be hurt, including many of the “well-off.” Whether our moral and ethical code is strong enough to get through this together is moot. We are not like our ancestors in the sense of their strong commitment to community, responsibility, forbearance, and integrity. We are the pampered generation, entitled to gratification now and willing to cut corners to get it.
In many ways, this problem is more serious than that faced by our Founding Fathers. After all, King George had little control over their lives or fortunes. Yet these principled men risked both rather than accept even a little bit of tyranny. Theirs was a fight of principle; ours is one of survival. The fight is made more important when it is coupled with a depression. We know what monsters rose to power during the last depression and their effect on the world.
We will either get liberty or totalitarianism. There is no middle ground. For me, the choice is clear and was stated by Patrick Henry more than two centuries ago: “Give me liberty or give me death.”
I am willing to sacrifice just as much as our Founding Fathers did so that my grandchildren and their grandchildren can live in the same country I grew up in. I hope enough others feel the same.
Monty Pelerin blogs at www.economicnoise.com.
Tags: constitution, Economics, founding fathers, hayek, socialism, socialist, von mises