Indefensible

Ya know, I was being sarcastic recently when I said, "If the first $9.7 trillion spending spree doesn't help, then what? Another $9.7 trillion? 'Cause you know, if the first "stimulus" heist doesn't spend America into prosperity, the only reason must be that you didn't spend enough."

But truth is the essence of proper sarcasm, as proven once again by primo asshat Jonathan Chait:

TRB: In Defense of Waste

Note to Republicans: The whole point of the stimulus is to spend money!

Republicans like to accuse Democrats of wasting taxpayer dollars and being condescending eggheads. But if President Obama's economic stimulus fails to prevent a depression--and I'm not saying it will--it will be because he didn't waste enough money, and didn't spend enough time being a condescending egghead.

Let's start with the egghead part. The stimulus bill is based on Keynesian theory, which I'll briefly explain in the condescending manner we liberals so enjoy using. When we're in a severe recession, good productive capacity goes to waste. Autoworkers sit home unemployed because nobody has money to buy cars, and cooks sit home unemployed because nobody has money to go out to dinner. The first thing for government to try is to reduce interest rates, to encourage businesses to borrow money to hire more workers and buy equipment. But, if interest rates hit bottom, then the government has to shock the system back to life by spending money directly. Say, Washington hires construction workers to build something, and those workers start buying cars and going to restaurants, and, after a while, the economy is running again.

So Obama decided to spend a lot of money. The Republicans' hoary opposition technique is to boil any legislation down to one or two silly-sounding expenditures that Joe Sixpack can understand--Midnight basketball! A bear DNA study! Obama anticipated this critique and tried to eliminate all waste from the bill. He kept earmarks out and focused the spending on public investments like energy efficiency and education. The logic went beyond just politics. If you're going to spend a lot of money, you might as well get something useful for it.

This manifest of naked hubris, published by the formerly third-rate New Republic (it's hovering somewhere around eighth-rate these days), is yet another focused snapshot of the Left's unconstrained vision that we discussed the other day -- specifically, the belief that an economy is best run by "the best and the wisest" rather than through systemic processes that have evolved over the centuries and have been proven to work best when government interference is kept to a minimum. The Left believes we're not brilliant (like them) so we can't possibly understand the nuanced details of how an economy ostensibly "ruined" by Bush's excessive spending can only be "fixed" by more excessive spending, or how throwing "stimulus" dollars at political cronies for porkbarrel projects is not "pork" or "waste." Therefore, we should just shut our pieholes and let the geniuses run the show. Pure elitist claptrap. I'm undecided as to what angers me more -- the fact that they actually believe they possess the unique wisdom to wonk they're way out of the economic downturn, or that they have the balls to admit that they think they're better and smarter than the rest of us.

Keynseian economics -- which Chait thinks we're all too stoopid to understand -- centers on the belief that an economy functions best when it is directly manipulated by government to produce desired results in the interest all people, and that those who do the tinkering are by necessity smarter than the majority of ignorant dolts in society (i.e., Liberals, a sentiment pretty much laid plain by Chait). Such a system can only be thought to work if one blinds oneself to historical evidence. History is persistent, however, and it has proven repeatedly that tax hikes and government spending during a recession always prolongs hard times and delays recovery; tax cuts always generate greater tax revenues; people always spend more when they are taxed less; and the economy always benefits when people spend their own money. Elitists refuse to recognize these historical factors while rationalizing their policies because they don't support their worldview.

The fact is, "the best and the wisest" were the ones who formulated the past economic policies which created the current mess. Regardless of who you blame -- Democrats, Republicans, Clinton, Bush, Frank, or Greenspan -- it all boils down to the same truth: tinkering with economic forces, most of which are beyond our control, never helps and usually makes things a lot worse. The best argument the Left seems capable of making is, "Our elitist geniuses are better than your elitist geniuses." What is lost in the debate between the elitists on both sides is, the citizens have zero confidence in any of them... and for good reason. They all like to proclaim to varying degrees that free markets have failed, even though they've never actually been allowed to flourish without government sticking their wrenches in the gears. And when the manipulation of market forces fail, their answer is always an argument for more of the same. Witness, for example, the result of government regulations which forced financial institutions lend to borrowers who everyone knew wouldn't be able to service their debt. The knee-jerk blame is placed on alleged "deregulation", and the knee-jerk solution is more regulation -- even though it was precisely government regulation that precipitated the whole sub-prime collapse in the first place!

Under the plan Chait argues for, "Joe Sixpack" works to earn money; a portion of this money is then confiscated by government in order to create more work for Joe, who then must labor to recover some of the money which he already earned but that was taken from him through confiscatory taxation! It's like buying your car stereo back from the thief who stole it.

Those of us in the Sixpack Community believe that if only we were allowed to keep the money we earned in the first place, we'd have already used it to stimulate the economy on our own terms through consumer spending -- spending which puts money into circulation in a much more efficient manner because there is no government overhead. Yes, the whole point of the stimulus is to spend money. The argument is, who gets to do the spending: us, or the government?

Chait's defense of government waste is, in fact, indefensible to anyone who has ever run a business or managed a family's finances. Government spending is and has always been inflationary and inefficient, and has never produced anything approaching the benefits to the individual that tax relief has consistently done. Both sides give lip service to the notion that putting money in people's pockets is the key to recovery. The difference is in the details: should this money be that which we've already earned and are allowed to keep and spend as we choose; or should it be money confiscated from the earners and distributed according to some grand plan designed by our intellectual overlords?