The Day the Liberal Narrative Dies

For half a century our liberal friends have lived off the story that FDR saved the USA with his New Deal and his jobs programs like the WPA and the CCC. Occasionally conservatives have pushed out an analysis or a screed that picks holes in it. Most recently, Amity Shlaes in The Forgotten Man has walked all over it. But the narrative is still alive and kicking.

Now the Democrats are trying to tell us that the meltdown of 2008 was all the fault of greedy bankers. Reports Maya Jackson Randall in the Wall Street Journal:

A blue-ribbon panel investigating the 2008 financial crisis blamed failures in financial regulation, flaws in corporate governance and excessive borrowing as key elements leading to the meltdown, Financial Crisis Inquiry Commission Chairman Phil Angelides said Thursday.

That's the story of the six Democrats on the panel, and they are sticking to it. It's the story that liberals and the New York Times have been selling. The Republicans split in their dissent. Peter Wallison, for the conservative American Enterprise Institute:

Instead of pursuing a thorough study, the commission's majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions—that the crisis was caused by 'deregulation' or lax regulation, greed and recklessness on Wall Street, predatory lending in the mortgage market, unregulated derivatives and a financial system addicted to excessive risk-taking[.]

Wallison fingered the two GSE mortgage twins, Fannie and Freddie as the main cause of the crisis.

Three Republicans, led by former House Ways and Means Committee Chairman Bill Thomas came up with ten reasons for the crisis:

The three commissioners narrowed the causes of the crisis down to 10, faulting, among other things: credit and housing bubbles; nontraditional mortgages; failures in credit-rating and securitization; financial firms' massive housing risk; firms holding too little capital; the ease at which losses spread through the system; bad bets on housing; and market shock and panic.

In my view, Thomas and his co-dissenters go too light on Fannie and Freddie. And, for that matter on the Fed that stoked the fires in the early 2000s.

But the bigger problem is the problem for Democrats. Their failure to realize that the mess in 2008 was not going to be solved with a quick Depression-style stimulus means that high unemployment will continue for years. Despite their valiant effort to blame greedy bankers and deregulation, the American people will blame the chaps in charge for the last four years. At the end of it, the Democratic economic narrative that has stood strong and tall for half a century is going to collapse.

It's about time, because the liberal governing strategy of administrative centralism is bringing the US to the brink of national bankruptcy. The liberal administrative state is cruel, corrupt, unjust, wasteful, and deluded. The sooner we send them back to their universities and their think tanks the better for the prosperity of all Americans.

100,000 Policemen Redux

Remember when President Clinton moved to the center with his 100,000 policemen policy? You couldn't move politically without running into those 100,000 policemen being added to the beat.

Now President Obama is moving to the center with 100,000 teachers. That was the center piece of his 2011 State of the Union speech. Thus we are tempted to haul out the old Marxian line about history repeating itself as farce.

But as for getting the federal government's fiscal house in order, here's the key takeaway:

I recognize that some in this chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without. But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens. (Applause.) And let’s make sure that what we’re cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine.

Never mind about the weak simile about overloaded airplanes. Let's focus on the key point, "the backs of our most vulnerable citizens." Because that really is the key to the next few years.

Here we are, with a trillion a year in government pensions, a trillion dollars a year in government health care, a trillion dollars a year in government education, and half a trillion dollars a year in government welfare. And it's all supposed to take a load off the back of our most vulnerable citizens. In fact, though, it has encouraged people to make themselves dependent upon government. There are millions of people who take advantage of government programs, and thus, if there are going to be cuts, people will suffer. But this is a failure of government. If this $3.5 trillion a year in help for the most vulnerable actually helped them to build independent and productive lives it would be one thing. But we know that in fact the reverse is true. Government programs encourage people to make themselves less independent, and to make themselves vulnerable so that they can qualify for government assistance.

President Obama calls for another 100,000 teachers. He calls for innovation. He calls for clean energy. He calls for high-speed rail. But all this is stuff that government already does very badly. Its education is a mess, particularly for the children of the most vulnerable. Clean energy is expensive energy that necessarily is paid for by higher energy prices that fall most heavily on the most vulnerable. High-speed rail is most suitable for government managers traveling from New York to Washington DC, or Los Angeles to Sacramento. It's not going to help the most vulnerable.

The government sector is the sector of force. It is suitable for things that need political power and force. It needs an enemy to conquer, the forces of evil to subdue. But innovation? That takes a bourgeoisie dignified and free, Mr. President. And if we are going to make the vulnerable into strong independent citizens that can contribute to society then we must free them from the narcotic of government and give them the tools to stand on their own and give back to society in work and in generosity.

Today is the first day of the future of America. Let's start that journey with a reality check. Government doesn't do innovation. It doesn't do compassion. It doesn't do anything except break things. President Obama's plan for the future is nothing more than another of Barney Frank's roll of the dice with Fannie and Freddie. And we know how that turned out.

Investment vs. "Investment"

Tonight President Obama is expected to trail his proposed "investments" before the nation in his State of the Union speech.

That's the euphemism the center left has been using for government spending for the last 20 years since the Third Way started up with Bill Clinton in the US and Tony Blair in the UK.

The purpose of the euphemism is obvious. Voters understand that government spending is waste. But who can object to an investment in clean technology and education of our kids? After all, the children are our future, right?

So that's the challenge for conservatives. It's a question of extending the narrative. It doesn't matter what you call it, government spending is still a waste.

You can tell it's a waste by the way people don't value it.

Take ObamaCare. The whole point of the government takeover of health care is that there are a bunch of people, notably people with pre-existing conditions, that can't get health insurance. So one of the marquee features of ObamaCare is a plan to subsidize high-risk people. All those high-risk people with pre-existing conditions should be rushing forward to take advantage of it, right? Wrong. Only hundreds have signed up for the plan thus far.

The reason is obvious. If you have a pre-existing condition you would be a fool to sign up for health insurance premiums until you actually get sick. Unless you have assets that need to be protected from unexpected health bills.

The fact is that government is not in the business of making investments. It is in the business of buying votes with freebies and subsidies. Don't want to pay for health insurance? Maybe the government has a plan for you.

The big problem for Republicans going forward is the fact that Americans love a freebie. They love getting a special deal, whether it's a weekly special at the grocery store, or a break on their health care costs.

Here's the issue. The great social question down the ages has been the freeloader problem. The whole idea about social animals and human society is to share the risks of this dangerous world. But somehow you have to figure out a way to get everyone to put their shoulder to the wheel. There are two ways of doing that. You can force people into contributing or you can shame them. Shaming works best in a face-to-face society where a dirty look can often work wonders. But often it comes down to force, and force is expensive.

Many societies have figured out a way to split the difference between shame and force. They delegate the punishment of freeloaders to God. God, they say, will punish the evildoer and the freeloader, if not in this world then the world to come.

The liberal welfare state stands this principle on its head. It rewards and lionizes the freeloader as a helpless victim, and it encourages people to combine in special interests and factions to loot society through piratical threats and power plays,and "investments" in the pet projects of powerful interests.

But the truth is that all government spending is a waste, starting with the defense budget and going on down to pensions, health care, education, and welfare.

Because the simple fact is that if you want something done, then it will be done better by some innovative businessman striving to sell a product or service to the consumer. For him, force or shame is not an option. He has to satisfy the consumer or go out of business.

Blacks and the Blue Social Model

Scholar Walter Russell Mead is advancing the idea of the failed "blue social model" to symbolize the political contest now in progress. Conservatives believe that the blue social model of Big Units, life-time employment in big corporations for blue-collar and white-collar employees, has broken down, and has been breaking down ever since its hey-day in 1970.

But hey, he writes, in "Black and Blue," there's a big problem with the collapse of the blue social model. Blacks are going to suffer disproportionately, because they are overrepresented in government jobs that will be cut in the coming years when governments run out of money and cut spending. Worst of all, there is a whole cohort of blacks about to retire from government service.

A pension crisis for state or federal workers will hit African-American families harder, proportionately, than white ones; municipal layoffs and bankruptcies will have a disproportionate effect on both the African-Americans who depend on these services and those who are paid to provide them.

There's no doubt; it's a problem. But the question is: what, if anything could we or should we do about it? This problem is a problem of liberalism. It is liberalism that decided to shunt blacks into government jobs. It is liberalism that kept the pedal to the metal on government spending. It is liberalism that encouraged the government employee unions that have bankrupted the blue state governments. So now ordinary Americans are supposed to bail out the blacks?

Let's talk about another group that has been led astray by liberals: the white working class.

In the decay of the blue social model since 1970 no group has suffered more than the white working class. They believed the promises of FDR and Democratic elected politicians. They put their trust in government. They voted for Democrats. And look where it got them. Half a century ago liberals loved the working class as knights of labor. Now liberals scorn them as bitter clingers.

The fact is that the white working class, like Eve in the Garden of Eden, was tempted. "The serpent tempted me, and I did eat." A little further on in the Bible there is the admonition: "Put not your trust in princes." The white working class did both, it succumbed to temptation and it put its trust in government. Now it is paying the price.

Blacks did the same thing. Liberals came calling with government benefits and government jobs, and blacks signed on. Now the party is over, and blacks are in the position of the white working class in 1970.

Hey, we want to be compassionate about this, but the solution for the problem of the white working class is the same for the blacks. Stop playing the government patronage game, get yourself an education, and get out into the world as an proud, independent American.

Every group that ever did that lived happily ever after.

Lucky Sarah Palin

Just imagine, if you will, that all the cognoscenti were saying that the GOP presidential nomination was Sarah Palin's to lose. Exactly. It would be the kiss of death.

Instead, we have the perfect storm of liberal abuse and conservative patronizing. Liberals say, as a liberal gay once announced to me at dinner, "I loathe Sarah Palin." Conservatives say, as James Taranto writes in the Wall Street Journal:

Whether or not she is presidential timber--and we are inclined to think that she is not--there is no denying that she is a highly accomplished person.

There is a phrase for this. It is called "damning with faint praise." But, as an urban sophisticate, you know when you go out in polite liberal society that the safe opening is to assume that your audience thinks that Sarah Palin is a moron.

When asked about my views, I delicately say that I consider her a very talented politician. That creates an opening for people to admit that they have a sneaking respect for her too.

The paranoid rage about Sarah Palin is, I believe, part snobbery similar to the liberal disdain for the frat-boy Bush. Liberals are, we know, mostly very good at grades and excelling at good colleges. If your Bushes and your Palins can succeed in politics, then that means that any underqualified nobody could pip a qualified liberal in the next search for director.

But the bigger thing is that it smashes the liberal cultural and social tableau, the elegant mirror in which liberals like to admire themselves.

Out flew the web and floated wide-
The mirror crack'd from side to side;
"The curse is come upon me," cried
The Lady of Shalott.

Sarah Palin is the curse come upon liberals and the carefully choreographed liberal tableau.

The liberal tableau has well-turned-out black male supervisors advising goofy male white twentysomethings; it has serious, tailored female lawyers; and it has colorful gays dispensing creative wisdom when they aren't marrying for love. Sarah Palin smashes that vision. She reminds us that career is a canard, that relationships for love is a fantasy. What really matters for 97.3 percent of us is our children. All the time we spend on career (or other diversions) instead of our children is a waste. Because for nearly all of us, nothing will remain of us except our children. And so all the things with which we fill our lives--the loves, the careers, the successes, the hobbies, the creative works, the entertainments--these are all diversions, and pretty sorry diversions and tangents at that.

The one thing you are not allowed to do in America is remind liberals of their hypocrisy and their moral delusions. And so Sarah Palin must be destroyed.

The trouble is that it won't work, because it will be antagonizing the key swing voting group in 2012: the white working class. The white working class folks know all about liberal scorn and patronizing: they've toiled under it all their lives. And they are just about fed up with it to the back teeth.

Lucky Sarah Palin.

Incivility and the Blue Model Breakdown

That ruling-class organ, the London Economist, reliably worries that the heightened political rhetoric "makes it harder for America's two political parties to co-operate in tackling urgent questions such as their nation's gargantuan debt, or its slide in the world education rankings."

What rubbish, as the Brits say. The problem, as Walter Russell Mead wrote a year ago, is that the "blue social model" is breaking down. He means the assumed post-New Deal political and social culture in which

a professional career civil service administers a growing state, with living standards for all social classes steadily rising while the gaps between the classes remain fairly stable, and with an increasing ‘social dividend’ being paid out in various forms: longer vacations, more and cheaper state-supported education, earlier retirement, shorter work weeks and so on.

Or, as Kevin Williamson writes, that everyone lives their lives according to "The Plan" of the socialist central planners. Says Mead:

Call this the blue model, and the chief division in American politics today is between those who think the blue model is the only possible or at least the best feasible way to organize a modern society and want to shore it up and defend it, and those who think the blue model, whatever benefits it had in the past, is no longer sustainable.

That division is going to begin to erode in the next few years because the blue model is breaking down so fast and so far that not even its supporters can ignore the disintegration and disaster that it entails.

The reason that the blue social model is breaking down is because it has run out of other peoples' money.

The reason that things are so uncivil right now is that our liberal friends do not believe, cannot believe, that their whole world view, the blue social model, in which liberals benevolently presided over America with avuncular concern for the "little people," is over: crashed, refuted, bankrupt. That is why they are so angry. That is why they are so angry that other people are angry.

Of course, for conservatives, the blue social model has never worked. It seemed to work because it frankly and ruthlessly taxed and regulated the economy and the wealth creators and gave the money away to liberals and their clients. Liberals argued, beginning with John Kenneth Galbraith, that the Big Units of business, unions, and governments would even things out through "countervailing power." There was no reason to believe, he wrote, that they would conspire in a powerful cabal, to grab all the gold for themselves.

But in fact, the Big Units did conspire. They set up a nice little conspiracy and they looted America; that's how they kept the peace between them. Now we have to pay for their corruption, and we ain't happy about it. And then the Democrats allowed public employee unions to bargain collectively with the government. That was another betrayal as unions bargained for high wages, high benefits, and very little in the way of public services.

Now it's all coming to an end and the liberals and their clients are mad.

There was another time in America when you couldn't discuss the important issues of the day, when heightened rhetoric made "it harder for America's two political parties to co-operate in tackling urgent questions." That was in the pre-Civil War era, when the South absolutely refused to discuss the question of slavery. As a matter of fact, the South absolutely refused to discuss the question of slavery for about 80 years, from the Constitutional convention of 1787 to the actual freeing of the slaves in the 1860s.

In my view there are two options for the angry liberals, deeply in denial about the injustice, the waste, the cruelty, the corruption of their blue social model. Liberals can retreat gracefully, or they can truculently resist until there is a Clausewitzian "decisive battle" and in the chaotic aftermath, liberals retreat in a rout.

And there is the strategic problem that liberals face that I mentioned yesterday. If you are a conservative you don't give a damn about the all the government programs, because they are not meant for you. Now the white working class, cast aside by the liberals a generation ago, are waking up to the notion that they don't have an interest in the vast swamp of government either. So when the liberals yell and scream that widows will be cast out into the street and orphans will starve, the American people will shrug. After all, who would be dumb enough to trust the government for the necessaries of life?

As the Spending Battle is Joined

In the coming months there will be lots of fiery rhetoric about government spending. Orphans will starve and widows will die. But there is one thing to remember. It's liberals that have a problem, not conservatives. The longer that liberals put off agreeing to spending cuts, the harder it will be for the folks vote for liberals and have put their trust in government. Let's go through the list of proposed cuts that Dick Armey and Matt Kibbe have drawn up in The Wall Street Journal.

1. Return discretionary spending to 2007 levels.
2. ObamaCare
3. Eliminate bailouts, and cut the cord with Fannie and Freddie
4. Eliminate subsidies on ethanol and unproven energy.
5. Scrap Departments of Commerce and Housing and Urban Development.
6. End farm subsidies, cut NASA, Repeal Davis-Bacon, End urban mass transit grants
7. Cut defense spending
8. Cut entitlements by slow conversion of Social Security to personal accounts, and conversion of Medicare and Medicaid and tax subsidies for employer health benefits into "capped contributions to individuals."

According to Armey and Kibbe that would amount to $3 trillion in cuts over ten years.

But never mind that.

Look at all the proposed cuts. Does anything shine out at you? Exactly. None of that stuff is really going to affect you.

Maybe that's the big problem with the liberal welfare state. Liberals carefully started out by handing out benefits to the opposition. But now they have forgotten the consensus politics of the old days. Now they and their clients just flat out elbow everyone else away from the trough. That's what happened in the Reid-Pelosi Congress from 2007-2010.

It was great fun while it lasted. But there is a problem with it. The time is coming, because of looming default, to start cutting. Oh well, say conservatives. Oh no, scream liberals! If the only people benefiting from government programs are liberals and their clients, then only one thing can happen if we have to cut spending to stave off default. We will have to cut liberal government programs. So it will necessarily be liberals and their clients that will suffer.

And that is sad.

But it is not the end of the world.