I would like to follow up on the last post and other posts I've made lately regarding politics and economic reality. I have a saying -- "Reality always wins" -- and we must adjust ourselves to this fact. Against this reality are a combination of forces which I believe are bedeviled by ignorance, wishful thinking, denial and a purposeful campaign to transform our economic reality.
Most moderates and liberals and Big Government Republicans, and even many conservatives believe that government has a responsibility to not only protect our country and our rights, but also to provide social services and infrastructure and to regulate what many call an unfettered free market. Most of the people who hold these ideas regarding the purpose of government also believe that government intervention should not be so great as to damage the positive aspects of the market -- they want a mixed economy that balances government responsibilities, as they see them, with production, close to full employment and economic growth. Different people within these categories might expect different degrees of government intervention, but almost everyone believes in the mixed economic approach. Liberals might expect more government intervention in areas like healthcare and energy policy and education than some moderates or conservatives, but this is just a disagreement over the degree of intervention, and perhaps over different kinds of intervention.
Most of these people aren't economists, even though I'm sure many have a working knowledge of economics. Currently, progressives have co-opted liberals and many moderates into believing the new healthcare bill, financial bill and EPA energy regulations are just a greater degree of intervention needed at a time in which the economic crisis calls for more regulation and management to avoid a disaster and return the economy to normal. Conservatives aren't convinced we need to go to this degree of intervention although they agree with the basic mixed economy concept.
What we've witnessed in America is a continuous violation of economic realities -- one being that we can't spend more than we take in on a continuous basis. Another reality is that businesses can't operate rationallly and confidently in an environment in which government is making constant changes which will affect the bottom line -- when there's regulatory uncertainty, businesses will not likely invest or hire. Another reality is that government intervention in a complex economy, that now is part of a more complex global economy, causes unintended consequences which sometimes are so far removed from the original cause, no one is able to make the connections between cause and effect, thus causing government intervention to be trapped in a negative loop spiralling downward, doing the same things over and over and never discovering the leverage to break free from the loop.
Most liberals and moderates have convinced themselves that by making a few adjustments we can create economic growth, and by raising taxes coupled with resasonable spending cuts we can get back on track. This is wishful thinking, not an adjustment to economic reality. If the system that causes the fundamental problems isn't significantly changed, the same things will happen over and over as we spiral downward, with minor tweaks and tax hikes only slowing the spiral temporarily. Conservatives want to slow the spiral even more, and they probably can, but if they don't change the statist system, the spiral will continue.
Hardcore progressives, on the other hand, understand what our statist system is doing -- they have no reason to deny or practice wishful thinking to avoid reality, because they are determined to transform the system even more as it spirals downward, and they're willing to accept the temporary consequences. As Obama said before getting elected, he knows that energy prices will necessarily skyrocket as energy regulations are put into place, and he's said there will be some pain and sacrifice during the transformation. Also, the progressives aren't motivated by economic growth, per se, but rather by economic management and redistrbution of wealth in an attempt to create a different America in which the producers are subjugated and the bottom rises up through a revolution of sorts. Having great wealth is not important to the progressives -- it's not about nice clothes or fancy cars or boats or a vacation home or a diamond ring or the glitzy rich in the Hamptons -- they'll settle for much less as long as social justice is the outcome and those underserving of wealth are put in their proper places. Progressives plan to use redistributed wealth to manage a just world for the have-nots who've been oppressed by an unjust capitalist system -- the have-nots will be their proected flock. Of course, the progressives with political power and positions aren't saying it like this in prime time, but the organizations below are saying it among themselves and in their literature. At the top it's sold as just a greater degree of government intervention in complex economic times, not unlike what liberals and moderates and even conservatives have accepted to lesser degrees for decades.
One reason progressives don't really care about economic growth and wealth creation personally is because most see themselves as the intellectual and spiritual leaders who'll be part of the necessary elite once the transformation is completed, and we all know that the elite leaders are taken care of. The union members who go along with their union bosses who push the progressive agenda aren't thinking about economic reality, they're only thinking about gaining collective power and security. The private sector union members who're still affected by the coolaid, see their employers as wealthy oppressors who can survive the redistribution of power -- they aren't thinking about the reality of economics and whether their employers even want to survive under the transformed progressive system. The special interest groups which have bought into the progressive agenda aren't thinking about economic reality -- they're thinking about the reality of power, favors and government support for ther cause -- they feel safe under the progressive agenda. No, the progressives aren't pretending, they know that the economy as we've known it will go steadily down if we stay on this path, and they see it as an opportunity.
So, we're all faced with choices going forward -- liberals and moderates can continue to pretend it's not that bad, and that progressives have good, honorable intentions and ideas regarding social justice, and that all we have to do is make a few tweaks and raise taxes, or, liberals and moderates can break out of their fantasy world of wishful thinking and change the statist system to a free market. Conservatives can continue to think they are champions of free markets and limited government while practicing statism-lite, or they can get serious and demand a system change. What we can't do, as we've heard a thousand times, is the same things over and over and expect different results -- and we can't allow progresives to lead the way if we still want liberty, economic opportunity and growth and an improving standard of living for everyone.
In the political world people believe they can change economic reality by wishing real hard and having good intentions, an then there are people who use politics to control the economy for political purposes. But reality is reality, and reality always wins.