Reality check on the debt

Our country has a problem with debt. With the situation our economy is in, it’s a problem that won’t be going away on it’s own anytime soon. The massive deficits we are currently running aren’t helping either. The options on the table to deal with this problem seem to range from ignoring the problem and continuing a program of reckless spending to forcing an immediate balancing of the budget. If we ignore the problem, our situation will quickly deteriorate until it cannot be ignored any longer and drastic measures become necessary. Immediately reforming entitlements and balancing the budget will also have negative consequences. There is a large constituency that has come to rely on Uncle Sam’s largesse, and a lot of financial pain can be avoided if we wean them from government dollars gradually.

Social security, Medicare, and Medicaid are major drivers of federal spending, but people depend on these entitlements. No one wants to see seniors subjected to abject poverty or children suffer because they aren’t receiving the most basic medical service. Even if we had to choose between cutting off these entitlements and destroying the economic engine of our country, there isn’t the political will to completely end entitlements. Entitlements support strong voting constituencies. Forced to make the decision, the politicians will inevitably choose to destroy our economy while laying the blame somewhere else.

Even if we do get to the point where major cuts become a political necessity, it’s not just the fat that’s going to get cut. There are vocal constituencies for all of the programs supported by discretionary spending as well. It is not politically feasible to only cut programs where conservatives think government has no business to meddle. Balancing the budget is going to require cuts to important government functions such as national defense. Although it’s annoying to hear the constant whining about “fairness”, too many people have become dependent on the government to ignore it. The only way to keep the entitlement mentality in check in the face of deep cuts is to make cuts that are roughly even across the board. Across the board cuts will be the only way forward when our government enters crisis mode and a compromise needs to be reached quickly for action to be taken. These across the board cuts will happen whether they are the result of real cuts or papered over by inflation.

For the time being, we can thank the economic turmoil in Europe for keeping us afloat. Until the Europeans get their act together, we can keep the current teaser rate on our national credit card without the Fed printing massive amounts of money to buy up treasury bonds to keep the yields low. Although the Fed has already been monetizing the debt to some extent, the printing presses haven’t been working overtime yet.

If there was a better place to park large sums of money, we’d be in serious trouble right now. As much as I hate to wish ill on others, we can only hope that Europe teeters on the brink without a wave of defaults long enough for us to get our house in order. If we’re lucky, we’ll avoid having to make tough decisions with some sensible reforms to entitlements, modest cuts in government spending, and some drastic action to clear the way for the private sector to grow the economy. If we’re unlucky, Washington will avoid the tough decisions with the printing press.

Cross posted at RedState

Liberal Leadership = Demonize Conservatives

From time to time, I find it worthwhile to take a good look at the liberal point of view. It’s important to avoid getting stuck in conservative echo chambers and taking a look at what our liberal friends have to say. The other day, I stumbled upon this little gem by Drew Westen.

The overarching theme of the article is that liberals are disappointed with Obama because he hasn’t taken a leadership role in demonizing conservatives or Wall Street. I’ve had a hard time understanding the liberal narrative that Obama is too conservative or why liberals aren’t happy with Obama. But if this is the kind of leadership that liberals are looking for, it’s no wonder that they are disappointed. The president has a lot more work to do if he is going to match the level of vitriol demonstrated here, here, or here.

I don’t want to get into the author’s claim about the growing gap between rich and poor. Thomas Sowell has done an excellent job of pointing out the problems with that claim, and I have nothing further to add to the conversation.

I do want to pick apart the author’s narrative for the causes of our economic troubles and the liberal solution.

"'This was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated with your lives and futures. It was made by conservative extremists who told us that if we just eliminated regulations and rewarded greed and recklessness, it would all work out. But it didn’t work out.'"

You can’t blame investment bankers on Wall Street for rationally acting in their own self-interest. The root of the problem doesn’t lie with the moral failings of investment bankers, but with the incentives for risky speculation provided by the government and the marketplace. Attempting to place all of the blame for deregulation on Republicans is also problematic (see the vote tallies for the repeal of Glass-Steagall, for example). The claim that only Republicans are in bed with Wall Street doesn’t pass the smell test either. Despite the problems with Mr. Westen’s analysis, let’s temporarily suspend our disbelief and take a look at the rest of his argument.

"Yet instead of indicting the economic policies and principles that had just eliminated eight million jobs, in the most damaging of the tic-like gestures of compromise that have become the hallmark of his presidency — and against the advice of multiple Nobel-Prize-winning economists — he backed away from his advisers who proposed a big stimulus, and then diluted it with tax cuts that had already been shown to be inert. The result, as predicted in advance, was a half-stimulus that half-stimulated the economy."

It’s not like we didn’t see this one coming. First they tried to claim that the stimulus worked, but that narrative was quickly overrun by reality. Aside from admitting that Keynesian economics is a sham, the only other option is to double down and claim the stimulus wasn’t big enough. It’s hard to tell if this is solely the product of delusional thinking or a shrewd ploy, knowing that there’s no chance in hell that another stimulus will be passed to test this hypothesis.

But even if more money had been wasted on stimulus, where would that money go? There weren’t any enough shovel-ready jobs for the money that was spent. Would any of that additional stimulus go towards rewarding more of those greedy and reckless corporations by bailing them out? I thought that only Republicans were interested in rewarding greed and recklessness. Or is Mr. Westen only referring to the second stimulus, since Democrats had nothing to do with the TARP bailout (despite controlling both houses of Congress)?

Let’s see what else the president could have done to make things right.

"When he wants to be, the president is a brilliant and moving speaker, but his stories virtually always lack one element: the villain who caused the problem, who is always left out, described in impersonal terms, or described in passive voice, as if the cause of others’ misery has no agency and hence no culpability."

 "Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it."

Let me see if I have this right. The economy is in the tank, people are out of work, and our nations credit rating has been called into question. And the solution is to demonize conservatives and put Wall Street bankers in prison for greed? I hate to break it to Mr. Westen, but this plan isn’t going to solve any of our problems. Liberals can scream all they want about conservatives bringing about some kind of “Christian sharia”, but it sounds like liberals are the ones who want to criminalize greed, one of the seven deadly sins. Although I think it is important to engage the liberal point of view, I can’t help but thinking these people lack any capacity for critical thinking.

cross posted at RedState

Style Over Substance

            The average American is no political pundit. Widespread voter apathy certainly doesn’t help the matter. Even my liberal friends that can be reasonably grouped with the intellectual elite are for the most part uninformed about important political issues. Many times I have had a heated political discussion only to discover later that the same liberal talking points appeared the prior evening on Jon Stewart’s Daily Show. It makes me suspicious. Are these intelligent, thoughtful, and educated people really getting their talking points from a second rate political program disguised as entertainment? It would be unfair to say these friends get all of their talking points from Jon Stewart. They do discuss issues from the occasional debate or interview as well. But you can’t complain about Republican candidates for having uninformed opinions about evolution and in the same breath criticize the Ryan Plan without reading it. If this is how “thoughtful” people approach politics, there isn’t much hope for the apathetic.

            The lack of informed voters creates a serious problem for a country where elections have political consequences. It is difficult enough for informed voters to make good decisions since politicians are often trying to tell us what we want to hear. It is too easy for elections to be determined by who gives the best speech rather than who does the best job. Those two people are not necessarily the same individual.

            One of the common criticisms of President Obama is the focus on style over substance. During the 2008 election, many pundits described the president as “articulate”. Although this word carries racial overtones when used to describe a black man, I think this description is intended to be interpreted at face value. The current president is certainly capable of giving a good speech. He may be having problems demonstrating this ability recently, but he has certainly demonstrated the capability in the past.

            Despite his recent rise to national prominence, there has been some criticism from conservatives of Governor Christie as well. He has provided fodder for frequent YouTube videos, and many conservatives applaud Governor Christie for his style. While no one doubts his fiscally conservative credentials, a deeper look at where he stands on other issues turns up some positions that are more aligned with the liberal platform. Some have complained that many conservatives are enamored with Governor Christie because of his style rather than his substance.

            I think too many people associate style with “empty suit”, and it concerns me. Although style alone can’t get the job done, style is an important factor in delivering on substance. Our nation has a tough road ahead. For too long, our government has taken the path of least resistance to lead us into the ditch we find ourselves in. It’s going to be an uphill battle to climb our way out. Just supporting the right policies is not enough. We need politicians that can actively advocate for the conservative vision.

            The importance of style can be seen in the contrast between Governor Walker and Governor Christie. Governor Walker has a lot to be proud of. In the face of intense national pressure and scrutiny, Republicans in Wisconsin have taken some important steps towards getting the state’s finances in order. While these policies haven’t been in effect for very long, they seem to be having positive effects on the economy of Wisconsin and the finances of local government. In spite of what they have accomplished, Governor Walker and the Republicans in the legislature still find themselves under constant attack from a massive pushback by liberals in the state with support from liberal interest groups around the country. Governor Walker himself has said that he has learned some important lessons about the importance of selling his policies to the people. As much as I like what he has accomplished in office, his performance in communicating his policies comes across flat.

            In contrast, Governor Christie has managed to accomplish quite a bit of his agenda despite Democrats controlling the legislature in New Jersey. He’s not afraid to take his case to the people in town hall meetings and on television. And when the host tries to set him up as some kind of angry, unpopular hypocrite, he challenges the narrative and knocks it out of the park with his response. Whether or not you think Governor Christie is presidential material for conservatives, you have to give the man credit for his leadership and style as governor. He makes a clear and compelling case for his vision for New Jersey, and he doesn’t get sucked into the questions loaded with liberal spin.

            As the Republican presidential primary approaches, I’m keeping an eye out for the conservative candidate that can also talk the talk. As much as we may prefer for results to speak for themselves, our country desperately needs a real leader that can communicate clearly and persuasively. For the sake of our nation, I hope that one of the conservative candidates is up to the task.