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Thought for Today

Amidst the din of the political fray, it's hard to do much clear, quiet thinking about the economic crisis the politicians claim they are addressing. A lot of people won't listen anyway. They'll assume it's politically motivated. That assumption is actually a symptom of what's wrong with any approach that seems to put politicians at the helm of economic decision-making. When it comes to economics, partisan political ambition is a bad counselor. What's called for is a clear head, and a common sense willingness to think about what really works.

From what we've been told, bad debt precipitated the crisis. Encouraged and pressured by self-serving politicians, banks and the government agencies responsible for regulating them, suspended good lending practices to make sub-par loans to people who couldn't sustain the payments involved. To attract investment, (that is, make money) supposedly reputable financial institutions created and sold hollow assets based on these bad loans (that is, they made virtual hay in the phony sunshine.) For a while (a long while), the pyramid of false expectations built upon these virtual reality assets balanced on its mostly imaginary base, against a blue screen backdrop of lies and regulatory collusion. But, for reasons still shrouded in mystery, at a politically critical moment last fall the CGI program crashed, revealing a largely hollow pyramid precariously set upon its pointed end. Investors awakened in a panic from their suspension of disbelief, seeking desperately to avoid being crushed by the collapsing monument to political ambition, shortsighted greed and blindly arrogant deception. It proved all the more weighty in its fall precisely because it was just an illusion.

As far as I can tell, the key ingredients in this breathtaking con game were bad debt, unregulated greed and self-serving political ambition. To get homes they couldn't afford people made promises they couldn't keep. To make money they couldn't earn, bankers offered assets they couldn't back. To get votes they didn't deserve politicians forced lending practices the financial system couldn't sustain, while implicitly making their constituents involuntary co-signers on loans they knew nothing about.

Now we're being told that the remedy for the threatening mess that resulted is more of the same. Only now, to buy a power base they can't afford, the politicians are spending money the government doesn't have, on political assets that won't produce one kilobyte of real economic profit. How can it make more sense to direct funds through political channels to support projects dictated by political ambition, than it does to leave those dollars in the hands of millions of people with even more incentive (in tight times) to squeeze every ounce of value out of them? A handful of politicians maximizing their own political gain can't possibly make better use of money than millions of earners and enterprises forced by necessity to seek the best economic return on every dollar they expend.

This is the common sense reason why tax cuts are more likely than government spending to produce solid economic recovery and growth now, as they have in the past (e.g., under John F. Kennedy and Ronald Reagan.) Of course, such plain reasoning only seems sensible if economic recovery is the goal. I'm sure it has few attractions if the goal has more to do with seizing power. In that case, the propaganda of the economists who attended a recent globalist conclave in Davos, Switzerland will seem more compelling (see WND's exclusive Globalists see econ crisis as excuse for 'new world'.) They urged governments to take advantage of the crisis to seize control of the banking system in their respective countries, using bureaucratic control to impose decisions on behalf of the taxpayers. They call it "the Swedish solution." Now let's see. Would those be decisions along the lines of pressure to make more bad loans? Or the allocation of more tax dollars to subsidize politically valuable special interests, like the ones hogging the benefits of the so-called 'stimulus' bill?

But why stop there. Once the government is running the banks on behalf of the taxpayers, the bureaucrats will need to dictate terms to the businesses getting bank loans, starting perhaps with the media companies, the energy companies and the health care facilities. Last fall when folks like me warned people that the so-called bail-out was America's leap across the Rubicon into socialism, I'm sure the usual claque of more 'moderate' observers snidely dismissed it as alarmism. But now that Newsweek has proclaimed it, I'm sure they all agree it must be true. Is this the real purpose of their so-called 'moderation': to encourage people to ignore the truth until it's too late to forestall disaster. (That may explain what they're up to. It doesn't explain the lemmings among the people, who follow their lead.)

Here's another "alarmist" view prematurely shared. The reference to Swedish socialism is meant to make us all think we're in for sex, saunas and Bergman at the cinema. In fact what's coming are gag rules, gun-grabbing, and gulags (in that order.) Before the gags silence us, and the gun-grabbing leaves us defenseless, it might be a good idea to heed the alarm. Someone's in the house making off with the jewelry and silverware. And by the time the police arrive, they'll be under orders to arrest the people who live there. Except you luhhhhhhhhhove Obama (Ok everybody, Group hug!!!!!) that means you.