Thursday, October 27, 2011

Three Big Problems

In a way, the Occupy Wall Street protesters are right.  Wall Street is the epicenter of our problems.  But not in the way the protesters think.

Actually, the left has rigidly determined to misunderstand everything about the modern era.  The interesting question is Why.  Why would they be so superstitiously determined to call this age of prosperity and opportunity a monstrous age of exploitation?

The big problems we face today are a consequence of the vanity of the current ruling class, the educated elite.  Our present rulers began in the middle of the 19th century as a moral witness against the huge dislocations of industrialization.  That was a useful, if widely overblown critique.  The industrial revolution was and is rough and tough, just like Major Bagstock.  But then any transition is rough and tough, J. B.

The great mistake the modern educated elite made was that it wasn't satisfied with moral critique.  It wanted to get its hands on the levers of political power.  One thing we know in the modern age; the combination of moral and political power is a recipe for disaster.  Then it gets worse.  Pretty soon, when you combine political and moral power, you find it is not enough, so you decide to get your hands on the levers of economic power as well.  Then you have totalitarianism.

It is telling that there is idle talk among the Obamis about the need to postpone elections.  They just don't get it.

So let's get to the three problems.

Government is lousy at pensions, health care, education, and welfare.  Government is only good at things that require force, like policing and warmaking.  They are lousy at everything else.  On pensions, they have turned savings programs into vote-buying programs,  On health care they have tried to regulate the details when the details, indeed the whole system, keeps changing.  On education they have turned teaching into a pension program, and gutted the learning.  On welfare they have broken up  the low-income family.

Government is lousy at finance.   There is an argument for government getting control of the financial system.  But only during a war when government ought to have access to every instrument for winning the war.  But in all other times, government is a financial pest, because it manipulates the financial system to buy votes with low interest rates and subsidies and it abuses its debt issuing power until it ends up in debauching the currency and/or defaulting on its sovereign debt.

Government is lousy at long-term anything.  It is comical that politicians and their bribed apologists like to criticize business for short-term thinking.  Politicians are worse.  Government really cannot be allowed to do anything long-term, because it loses interest after a couple of years and then the special interests and the crony capitalists take over.

The Occupy Wall Street folks are right that Wall Street is a problem.  But only as a symptom of the bigger problem, that government is a failure and it always tries to paper over its failures with debt.  And Wall Street is where you go when you need to issue debt.

Every politician needs a friendly banker.  And that's the problem.

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