Thursday, November 13, 2008
In the beginning the French Revolution was a reaction to a fiscal crisis. The King called a special session of the legislature (a really special session, the Estates General hadn't met in over a century) to raise taxes to cover a deficit that was about to consume the entire government. The Ancien Regime ran at a dead loss. Pensioners, parasitic aristocrats, a growing and cancerous bureaucracy, huge interest payments on existing debt and the degenerate luxury of the royal court, all fixed expenses that could not be cut, were outstripping the expected revenue to the point where people who were looking at the numbers rationally were becoming very alarmed.
So the legislature came together with the word 'change' on every lip. But this wasn't a legislative problem. The harvest had failed and the price of bread was ruinous to the average person. Taxes and overregulation were strangling business. The powerful hereditary class of aristocrats had contempt for business and the vulgar nouveau riche who were making large amounts of money in the private sector. They moved to reign in and confiscate the obscene excess wealth of these upstarts, depressing the economy and inhibiting new enterprises. The France of Louis XVI wasn't anywhere near as robust and wealthy as the France of Louis XIV but the fixed outlays were much bigger. What was the result? Chaos and anarchy, followed by a one-man dictatorship.
Here we are two centuries later. Once again beset by immovable 'fixed costs'. The interest groups, local state and national who run the government look on any cut in the rate of growth as an assault on their human rights and the timid cronies they've maneuvered into positions of power are far more likely to resort to robbing the public than they are to anger their sponsors and allies. After all, everybody, from the poorest to the richest gets some kind of a subsidy.
If you're poor there are myriad agencies and benefits that you can access. Food Stamps, Medicaid, Housing subsidies, Earned Income Tax Credit, the list is endless. If you're middle class your children can attend formerly out-of-reach universities run by the beneficent state. Vast bureaucracies and agencies sprawl across the landscape staffed with the middle class in their millions. These folks bask in the knowledge that they have lifetime jobs with a nice fat retirement check awaiting them at fifty-five so they can hop in the Winnebago and drive aimlessly around on the Interstates annoying the children who moved thousands of miles away to get away from their parents.
The rich have become adept at paying their legislators to write subsidies into the giant omnibus budget bills that have become so popular wherever lawmakers meet to 'craft' a budget. Most legislators and their cronies are as moderate in their demands on the public purse as those presented to the trembling and unarmed Romans by the King of the Visigoths as he stood outside their gates with an army of warlike barbarians. The wrathful and 'entitled' politicians now stand inside the gates backed by a swelling army of Senior Citizens who expect their every whim to be catered to instantly, an education bureaucracy that swells like a pig's bladder, farmers wanting bigger payoffs, unions wanting cash to bail out the enterprises they've bankrupted with their unreasonable demands and every variety of idealist and do-gooder all needing more federal cash than last year to shepherd in the new Nirvana.
The Iron Rice Bowl. That is the ultimate distillation of socialism. You own your job as a right. You cant be fired, your pay goes up because its increases are automatically written into an agreement pegged to the 'cost of living'. Health care is a right. Being able to retire and collect a pension that allows you to live comfortably is a right. High real estate prices and bogus mortgages that you never have to pay off are a right. You have a right to cheap food and cheap energy. Smooth roads and adequate police and fire protection. The right to attend university if you can spell your name on the entry form. We've all got lots of expensive rights.
Meanwhile, the idealists have launched on a crusade to fix the weather. Even though global temperatures have been declining for more than a decade and there is absolutely no empirical data linking carbon dioxide with climate change the new crowd has already announced its enthusiastic commitment to the most expensive and inefficient technologies to generate electricity and their enthusiastic opposition to any form of energy that involves fire or radiation. Promethius was tortured by the Gods for giving mankind the gift of fire, now the Democrats are giving that earth-destroying present back with a sneer of contempt written on their New Age visages. The crippling increase in electric bills will be passed on the the herd either in higher rates or higher taxes to subsidize this idiocy. The New Jacobins have also hatched a scheme called 'Cap and Trade' which is like a game of Three Card Monty where businesses are charged taxes for any carbon or anything else that they emit into the atmosphere.
The right to own a private automobile, erroneously taken for granted in the minds of the moronic Voters For Change, is an illusion that will be revealed for the stupidity that it is when the Weather Police get rolling and cripple the oil companies. Soon GM will be like Uruguay Airlines under the socialist government there in the 1960's; tens of thousands of employees but not a single airplane. The government subsidized auto workers will be sitting in their idle auto plants collecting full wages and bennies from the hand of the taxpayer.
Like France in 1789 the problem is not how the system is being run or which faction is running the system, its the unsustainablity of the entire enterprise. Blue State governments and large cities, all run on a one-party basis by Democrats and dominated by the rapacious Public Employee Unions, have now reached bankruptcy. So has the UAW-destroyed automobile industry. Forcing the banks to make loans to welfare cases, cronies and seedy deadbeat speculators has destroyed the banking system. The final coup de gras was the ocean of computer-generated cash poured into the credit system to smoothe over the wreckage of sound business principles and ensure de facto government control of the financial system-- the condition that caused the crash in the first place.
But the biggest beneficiaries of the funny-money loans were the middle class who moved into overpriced six thousand square foot clapboard shacks and imagined they had a million dollars worth of equity after two years of ownership which would allow them to endlessly 'refinance' every time they maxed out their credit cards. Thats the greatest thing about all this government intervention...everybody wins! Sniveling about trivia like sound business practices and free trade or even esoterica like 'free speech' or 'property rights' is for the few remaining conservative crackpots. Rejecting the flaccid Keynsianism of the beady-eyed Bushites or the outright Marxism of the incoming pack of geniuses puts one on the outskirts of society with the Ron Paulians and other political outcasts. The system is seen as immutably rock-solid and permanent by the vast majority, who are upset that there has been a temporary downturn but look to the intervening hand of the state to set things right.
Its not going to happen. An economist named Dougherty from Chapman University made a very credible case on the radio yesterday for a $1.5 trillion deficit for this fiscal year just based on the things that have been implemented already or are being proposed for the lame-duck session of Congress that will usher in The New Age Of Change. He's living in a dream world if he thinks its going to be that low. If the Dems arent going to let the UAW take the hit for ruining the auto industry, or Fannie and Freddie for ruining the banking industry and tanking real estate prices are they going to let their beloved Public Employee Unions pay for the state and local governments that have been brought low by their greedy rapacity? Will they let California and New York default on their bonds? Joe The Plumber defaulting on his mortgage, credit card and car payments, his unemployed kids throwing up their hands and walking away from $200,000 worth of unpayable student loan debt is one thing, the State Of California walking away from the worthless paper the voters have been authorizing is quite another. Actually, they're the same thing. The Perestroika that Gorbachev has been urging on Obama has arrived already. Just like it did in the Good Old Soviet Union-- which most of the people surrounding Obama supported over Reagan before they switched their admiration over to the Islamonazis.
If California bonds are worthless that means all bonds are worthless unless the Feds buy them with more computer cash. That means that low-interest Federal bonds are effectively worthless as is the US Dollar. That wipes out the reserves and investments of every other country on earth. The statists now in charge of the planet do not have the intellectual wherewithal or the philosophical underpinning to deal with this. But they'll be too busy implementing the Law Of The Sea Treaty and the Kyoto Accords to worry about an economic meltdown until its too late. Its already too late. The dinosaurs are arguing about how many electric fans to set up to fend off the approaching asteroid and whether turning on so many fans will cause Global Warming.
On his deathbed Louis the XV was heard to mutter, "Apres moi, le deluge." Most thought he was referring to his idiot son who was about to become king in his place, and that was certainly part of it, but he was looking at the oncoming crackup and thanking God for taking him before the flood hit. As the poet William S Burroughs said, "I dont want to be around when this sh!thouse blows up!" Burroughs had the good sense to check out a few years ago, probably defaulting on huge debts to heroin dealers and sundry other tradesmen and leaving the rest of us on the bare surface of the Earth contemplating the media's idiot son about to be coronated and watching with trembling fear the expanding shadow of the oncoming meteorite.