Slouching Towards Socialism

Bush, Socialism

“Bully for Bush. The president has achieved another milestone in his mission to bridge the philosophical gap between conservatism and left-liberalism. ‘The Decider’ recently endorsed the socialist concept of a wealth gap, and promised to do his level best to level the playing field through the familiar distribution schemes…””A more meaningful measure of economic health is the ability to afford basic necessities: food, housing, clothing, hygiene, health care, telephone and transportation, to use the Fraser Institute’s gauge. More crucially, the freer a society, the less likely government is to placate the envious by taking from those they envy. In unfree societies, that’s precisely what governments do: pacify the multitudes by mulcting the few…”

“Whether he is addressing the ‘wealth gap,’ galvanizing government to ‘create jobs’; capitulating to climate-change crazies or rabbiting on about renewable energy —Bush just cannot tell his left from his right.”The excerpts are from my new column, “Slouching Toward Socialism.” It leads the Commentary Page on WorldNetDaily today. Discuss.

Bernanke Not Bullish

Economy, Free Markets, Government

Federal Reserve Chairman Ben Bernanke testified today before the House Budget Committee. Afterwards there was some grilling as to the real size of the federal budget deficit. Also discussed in casual passing were the fishy accounting practices galvanized to reduce said deficit — raiding social security and Medicare, for example. The kind of fraud that if committed in the private sector would net the perp serious jail time.
More crucially, Bernanke had some dire economic forecasts about “the evolution of national debt” and the “high rates of government borrowing.” As libertarian writers never tire of reminding their readers, the national debt and government borrowing will “drain funds away from private capital formation and thus slow the growth of real incomes and living standards over time. i the necessity of paying interest on the foreign-held debt would leave a smaller portion of -ur nation’s future output available for domestic consumption. Moreover, uncertainty about the ultimate resolution of the fiscal imbalances would reduce the confidence of consumers, businesses, and investors in the U.S. economy, with adverse implications for investment and growth.”
If current trends in government spending continue, the forecast for the proverbial children caring conservatives and Democrats so love to invoke is particularly grim. Said Bernanke:

According to the CBO projection that I have been discussing, interest payments on the government’s debt will reach 4-1/2% of GDP in 2030, nearly three times their current size relative to national output. Under this scenario, the ratio of federal debt held by the public to GDP would climb from 37% currently to roughly 100% in 2030 and would continue to grow exponentially after that. The only time in U.S. history that the debt-to-GDP ratio has been in the neighborhood of 100% was during World War II. People at that time understood the situation to be temporary and expected deficits and the debt-to-GDP ratio to fall rapidly after the war, as in fact they did. In contrast, under the scenario I have been discussing, the debt-to-GDP ratio would rise far into the future at an accelerating rate. Ultimately, this expansion of debt would spark a fiscal crisis, which could be addressed only by very sharp spending cuts or tax increases, or both.

Updated: The 'Stock Scare': Connecting the Dots

Free Markets, Government, Media

Jeffrey Tucker of the Mises Institute connects the dots:

“Ah, nothing focuses the mind that a good ol’ fashioned stock market sell-off. Nothing is more likely to cause people to decide that Bush is a really bad president, or inspire pessimism about the future. One might think that a war in Iraq and US equity valuations have politically nothing to do with each other, but when portfolios show declining cash value, blame flies in unexpected ways. Depending on how long this lasts, we might find that brutal criticism of all this president’s policies will become even more ubiquitous.
Meanwhile, looking through my email archive from yesterday, I see this alert from Frank Shostak: ‘The central bank of China’s tighter stance runs the risk of creating a financial accident, which could have serious effects on US real economic activity.’
So let us make another prediction: Republicans will blame China for its reckless monetary policy. And while the data seem to suggest that there is merit to the idea, Frank himself says that we must distinguish between the bullet (bubble in the US) and a trigger (China’s inflation).”
[End Quote]

I listened to Kudlow and Friends, but they seemed more interested in justifying their abiding political faith in Bush, deficit spending, and the miracle of tax cuts. Sure, on the face of it, returning stolen goods to their owners is a good thing for the robbed and the economy in general. The problem lies in what is unseen: the hidden theft/tax of inflation, which finances deficit spending. Congress, as you know, is spending so much more than the treasury collects in revenues. Could this malpractice possibly have (gasp) wider repercussions?!

Some “Texas Straight Talk” will help complete the picture.

Update: Wouldn’t you know it, “his Holiness Alan Greenspan, who can’t stand not being in the spotlight” (as a friend put it), shot his gob off about a recession on Sunday, and voila: the market reacted. Greenspan’s Delphic pronouncement contributed to a stock-market decline. The man should be muzzled!