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  • The Real State of the Union

    Posted by David Foster on January 28th, 2010 (All posts by )

    Fear

    As Michael Ledeen observes: This fear is extremely broad-based. It is not limited to social class nor to domestic or foreign policies. Banks are not lending, companies are not hiring, because they are afraid of what Obama will do next.

    It is very clear that Obama/Pelosi/Reid view America primarily as a playing field for a neo-Hobbesian struggle of group against group. And the winning and losing groups at any given moment are determined not only by the elements of the “progressive” creed, but also by the social prejudices of the the leading promulgators of that creed…and by the political exigencies of any given moment.

    If you are a union worker in a well-paid industry, for example, you probably thought you were in good shape with the Obama administration…

    Yeah, a pro-union President, that’s nice…But wait…here’s a proposal to put a special tax on our contractual health care benefits! That’s not an expense we were counting on! Oh…okay, now they’ve dropped that idea. Hope they don’t change their minds again.

    Which they might, if the political tradeoffs point in that direction.

    If you’re an investment banker (a very significant proportion of whom supported Obama), you probably felt that underneath the populist rhetoric, Obama and his advisors held you in a lot higher regard than he did the factory workers and small-town residents (remember those “bitter clingers?”) and ditto, that he had a lot more respect for you with your Ivy League MBA than he had for people with state college degrees who are running manufacturing companies. Almost certainly true…but it doesn’t mean that he won’t sacrifice your interests for a small boost in the polls. On the other hand, he may decide that Wall Street contributions matter even more than next month’s polls, and throw you another bailout instead of throwing you under the bus. Either way, your future depends more and more on Obama’s attitude toward you and less and less on your own business ability.

    If you’re a small businessperson, you’ve heard a lot of talk about how valued you are and how much the government is going to help you. But you have friends whose businesses have been crippled and even destroyed by ill-thought-out regulations…like the dreadful Consumer Product Safety Improvement Act…and you know that the people running Congress don’t care enough to make responsible adjustments. So you wonder when your turn to be sacrificed will come up.

    The reality is that Obama, with the complicity of Pelosi and Reid, is in the process of creating an economy and a society in which the primary factor affecting the success of every individual and every business is the attitude of the federal government toward that individual or business. See, for example, this: Remember when we used to care about P/E ratios? Now we’re all political science majors. And don’t kid yourself that this explosive expansion of the political realm affects just corporations and Wall Street players. It will, if allowed to continue, affect and increasingly dominate the lives every of every individual in the country.

    A commenter at the Michael Ledeen link quotes Thomas Jefferson: “When the people fear their government there is tyranny. When government fears the people there is liberty.” We now have an environment in which increasing numbers of people have very valid reasons to fear what their government will do to them…and in which the attitude of government toward the majority of the people is, increasingly, one of contempt.

    In a previous post, I quoted Benjamin Franklin:

    There are two passions which have a powerful influence in the affairs of men. These are ambition and avarice—the love of power and the love of money. Separately, each of these has great force in prompting men to action; but, when united in view of the same object, they have, in many minds, the most violent effects.

    The whole direction of the country, under the direction of Obama/Pelosi/Reid, is toward the uniting of ambitiona and avarice in precisely the manner feared by Franklin. When moneymaking is principally accomplished by grabbing hold of the power of the state and using it to club rivals over the heard, it is no longer a mutually-beneficial positive-sum game. The uniting of ambition and avarice erodes the spirit of a country as well as its productivity.

    We are in the hands of a group of people who for the most part know nothing about business or about any form of economically-productive activity, who know nothing about technology, who wilfully fail to understand the seriousness of the threats of international terrorism and of rogue regimes, whose offices and/or credentials have given them a total lack of humility, and who–despite the aforesaid credentials–are mostly very shallowly educated. There is plenty of reason for fear.

     

    19 Responses to “The Real State of the Union”

    1. onparkstreet Says:

      I have no idea what to make of that speech. I watched only a part of it and then switched to something else. He kind of freaks me out, which I suppose supports your point about fear. Hmmph.

    2. onparkstreet Says:

      Oh, and to the investment banker stuff. I was surprised how much support he got from that sector. It seemed very weird to me, almost like an affection of the newly wealthy. It’s cool, he’s cool, he’s credentialed.

      Well, as you said, that crowd probably just assumed they’d be able to game the system if they paid off the right politicians in campaign donations, so to speak. I’m not casting aspersions! I just don’t know why any business person would support a cast of characters from Chicago which routinely runs its business in the same closed-door fashion!

    3. onparkstreet Says:

      Aargh, “affectation” of the newly wealthy in the above comment.

    4. Paul Milenkovic Says:

      Um, I only caught 2 min of it, and I tuned in when “Washington” was accused of being too partisan? Huh? Who is that aimed at?

    5. Michael Kennedy Says:

      The reality is that Obama, with the complicity of Pelosi and Reid, is in the process of creating an economy and a society in which the primary factor affecting the success of every individual and every business is the attitude of the federal government toward that individual or business.

      I hate to say it, but this is how Mugabe got where he is. I did a book review at Amazon a year or two ago on a book about his administration. It was called “Dinner With Mugabe” and was quite interesting. Theodore Dalrymple has also written a very good essay about Rhodesia before Mugabe and the pathology of a tribal culture. I suppose this will sound racist but the point is not. It is about the arbitrary rule and its effect on the economy. We see the same thing going on in Venezuela, now. And Argentina, which had the world’s largest gold reserves in 1939.

      I think there is a growing consensus, not just Amity Schlaes, that the Depression was prolonged by the uncertainty created by an administration in which Roosevelt would choose a gold price based on a whim. I fear we have another such president although he seems to be far less able than FDR was.

    6. tyouth Says:

      Re. gov’t. arbitrariness, relative ineffectiveness of gov’t. directed enterprises, etc; This might well become the ultimate symbol of bad government: In Florida 2000 a referendum for a high-speed rail system was on the state wide ballot. (Cool, the future is here!) It won. By 2004 Floridians sobered up and got to seriously thinking about the cost-benefit ratio and voted it down in another referendum. The benefits were small and the cost was large….good thinking.

      Now the rather greasy Governor of the sunshine state has got a chance to use other people’s money on this make-work, large, expensive toy. Is Obama out of his mind?

      ttp://en.wikipedia.org/wiki/Florida_High_Speed_Rail

    7. Joseph Somsel Says:

      I intended to watch the SOTU but there was a poetry reading program on public radio that I just couldn’t tear myself away from.

      As to the administration’s lack of business experience or tech savvy, it doesn’t matter – to them. Their goals are different and their skills unique. They don’t want to save the country or build up its people. They want to transform it into a socialist soft tyranny.

    8. Tom Holsinger Says:

      Obama and the Democrats also tend to view the economy as a zero-sum game in which every gain for some entails loss by others. The concept of economic growth seems foreign to them.

    9. Lexington Green Says:

      “I just don’t know why any business person would support a cast of characters from Chicago which routinely runs its business in the same closed-door fashion!”

      I know why. The business person wants to be in the room when the door is closed.

      That is why the system works in Chicago. The insiders get their slice of the pie.

      Business people often prefer to be in a regulated economy, where they can write the rules, protect themselves, and prevent competititors or consumers or suppliers from having any leverage.

      The kind of heroic, pro-freedom, pro-market capitalists depicted in Ayn Rand novels are very, very rare.

      Adam Smith was fighting that very thing: crony capitalism, that went by the name of Mercantilism in his day.

    10. onparkstreet Says:

      I understand that, LG, but what I don’t understand is why they were so sure that they would be inside the room? Hope springs eternal, I guess, especially when it comes to shoving the other guy out of the way so you can make a buck from your cronies. Or being a crony.

    11. Michael Kennedy Says:

      I think there is a big difference between big businesses and small businesses. How many Goldman Sachs CEOs have ever had a month in which they could not afford to write themselves a paycheck because there wasn’t enough in the till to pay the rent, utilities and the employees who had to be paid first? I have and I know a lot of people who have. I also know that none of us is going to be inside that room when the door closes.

      There was a very astute letter to Jonah Goldberg at NRO today. I wish I had been perceptive enough to have seen this.

      Obama hates being ridiculed.

      At 48:45 on the cspan feed, Republicans laugh when he says the freeze will start next year. Obama pauses, clinches his jaw, and adds the off-script line “that’s how budgeting works.” Then Democrats laugh back at the Republicans and applaud.

      If you saw the fox feed, it was on the tight shot when he said it. I remember being struck at how angry his face looked, much like it did after Joe Wilson’s comment last year.

      That’s his greatest weakness. Republicans should just start laughing at him and making jokes.

      On the substance, I guess Obama and the dems suggest there is some rigid budget structure they must follow. Not really. They routinely miss budget deadlines and pass motions to continue spending at the previous year’s level.

      I saw that moment but didn’t realize the significance. This guy should be a pundit.

    12. david foster Says:

      “in the room when the door is closed”

      That’s certainly part of it. But another big part is social/class affinity. People like to vote for those who they perceive as *being like them*…that’s why politicians go around hanging out a diners even if they really hate diner food.

      In this case, “being like me” meant having a degree, preferably an advanced degree, for a “top” school and speaking with the mannerisms which denote high social class, especially on the East Coast. There are probably quite a few people in the financial industry who would have supported McCain if his VP nominee had not been Palin, and even more who would have supported him if he had the academic background and mannerisms of, say, David Petraeus, even if his policy ideas had been precisely the same.

    13. Jonathan Says:

      I understand that, LG, but what I don’t understand is why they were so sure that they would be inside the room?

      Depending on who “they” were I would suggest several possible alternatives. They could have been foolish enough to think that they could buy Obama and that he would stay bought. They could have been arrogant enough to believe that because they aren’t ideologues Obama isn’t one either, despite evidence to the contrary. They could have assumed that Obama would have the sensibility of a Richard Daley, who might give lip service to leftist causes but could be depended on not to do anything to really hurt the productive parts of the economy. They could have been relying on Obama’s whispered assurances that he was on their side. In short, they let themselves be conned as did many other people who voted for Obama.

    14. Mitch Townsend Says:

      Taking your original point a little further, I wonder if the administration is getting to where even well intentioned, well thought out proposals will have a contrary effect. The SOTU address sounded to me like a campaign speech, with lots of promises and proposals, most either vague or outlandish (double US exports in 5 years?). Each time the government lurches one way or another, it introduces uncertainty. Anyone trying to plan or budget for a business is going to have to deal with more risk of changes in tax, regulation, and economic conditions. That extra risk will depress economic activity.

      Some forethought and restraint would be welcome here, but I don’t see much sign of it. Obama seems, to himself anyway, destined to do great things. Maybe he will equal the economic blundering of Nixon, Ford, and Carter combined in a single term in office.

    15. Michael Kennedy Says:

      That extra risk will depress economic activity.

      Unfortunately, I don’t think he recognizes this at all. I recommend this essay once again. Sorry to be repetitive.

      Gorbachev seemed to assume, right up to the fall of the Berlin Wall and then beyond it, that his Communist Party would recover from any temporary setbacks, and that the long-term effects of his glasnost and perestroika could only be to make it bigger and stronger.

      There is a corollary of this largely unspoken assumption: that no matter what you do to one part of a machine, the rest of the machine will continue to function normally.

      A variant of this is the frequently expressed denial of the law of unintended consequences: the belief that, if the effect you intend is good, the actual effect must be similarly happy.

      Very small children, the mad, and certain extinct primitive tribes, have shared in this belief system, but only the fully college-educated liberal has the vocabulary to make it sound plausible.

    16. Michael Kennedy Says:

      I don’t like to criticize the University of Chicago Law School, but did they really have a guy teaching Constitutional Law who doesn’t know that “All men are created equal” is not in the Constitution ? It’s in the Declaration of Independence.

      Not being a lawyer, myself, I hadn’t noticed but others have.

    17. veryretired Says:

      There is an undercurrent in some of the comments that magical thinking is bizarre and unusual, and that rationalism and empiricism are normal. But the history of the human race, right up to the present day, shows that just the opposite is true.

      I don’t know how many times over the years I have heard or read people complain that they cannot understand how anyone could pursue socialist policies because “they never work”, or that the belief in a benevolent, powerful state is unrealistic, etc., etc.

      However, one of the universal tenets across human cultural variation is the fervent belief that there is some powerful force that can be believed in, and appealed to, which will stack the deck in the believers’ favor, and, casting aside that annoying “cause and effect” business, bring about the result so earnestly desired.

      No doubt, in many times and many places, the supposed power is known by the elites to be a phantasm, or, as we have seen in our own recent history, the human agent allegedly protecting the interests of the supplicants is, in fact, dissolute, insane, corrupt, or all three.

      The essence of magical thinking is the firm belief that cause and effect can be negated by the power of the believers’ faith that the desired result will occur, if only everyone is pure in their faith.

      Alas, the needed purity is rarely found, the longed for benefits rarely achieved, and the need for large numbers of scapegoats rarely avoided.

      There is a marvelous scene in “Apocalypto” when the hero is about to be sacrificed, only to have the ritual brought to an abrupt halt when an eclipse of the sun mezmerises and terrifies the crowd. The “High Priest” then gives a reassuring speech about how they have satisfied the god’s need for blood, and the sun reappears.

      For just a second, the eyes of the priest and the ruler lock, and with a nod, the ruler congratulates the priest for his quick thinking, and the priest laughs uproariously, reveling in his power and control over the faithful, even as it is clear he knows full well he has no control over the sun and moon.

      I submit that that is the scene we are witnessing, over and over again, as the members of the various elites that compose the ruling class around the world pose and posture, giving speeches they know are bunk, proposing laws they know full well will never accomplish what they claim to intend, asserting knowledge they fervently hope they have right, but secretly doubt; cynical in their unending belief that, if they can just put the day of reckoning off a little longer, none of it will really matter anyway.

      Something, or someone, will come along and save them.

      As the scales finally fell from Reardon’s eyes when the whining little collectivist told him, “Oh, you’ll do something.”

      It is the rational that is the rare earth. The empirical that is the golden nugget found in the stream bed. It is respect for individual rights which is the utterly rare pearl of great price.

      But the magical? The irrational? Common as grains of sand on the beach.

    18. onparkstreet Says:

      veryretired – as usual, a phenomenal comment.

      In addition to magical thinking, I really do think class plays into the confusion. Some people just think that, in addition to the “right” accent, clothes, and car, the “right”, i.e. left, party is more sophisticated. So, I suppose class enters into your argument of magical thinking in some way? It’s emotion, not reason.

    19. veryretired Says:

      Onparkstreet—ty for the compliment.

      The inability to consider one’s own fallability is an all too common human failing. The more sophisticated, educated, worldly, accomplished a person is, or considers himself to be, the more he is inclined to believe that everything he thinks and does is correct.

      It is most glaringly obvious when the actor is a member of some hereditary aristocracy, as in the royal families of Europe or Asia, and simply assumes his superiority, even though by any objective standard he is an absolute dunce.

      I am afraid the same sort of assumptions have now become embedded in the mindset of the highly educated and connected types who seem to abound in the chattering classes. Male or female, they seem to have concluded that their elevated status, and positions of power and influence, actually mean that they can simply decide how something should be, and it will be that way.

      The notorious “wreckers” campaign in Stalin’s day is the ultimate example. Things weren’t working as the party said they would, so it must be secret sabotage by nefarious agents of international capitalism. The other possibilities, that the party, and its leadership, and its theories, were wrong about how to achieve their goals, could not ever be considered.

      We see a shadow of that now in the health care reform deal, or the climate change debate—it cannot be possible that the experts, and conerned pols, and all the people who so fervently believe in big government programs to solve these huge problems, could all be wrong.

      No, the answer must be that the people don’t understand the problem, or they are being misled by paid agents of “big oil”, or our western culture is too mean and selfish to appreciate the genius of the proposals put forth by the annointed.

      Anything, absolutely anything, but acknowledging the possibility that the elites, the educated class of natural rulers, don’t know what they are talking about.

      The genius of a strictly limited state is that it prevents the kind of megalomaniacal grandiosity that initiates these huge all-encompassing programs, which might very well be wrongly conceived, implemented, or administered.

      The limits on state power force almost everything to start out small, be proven to work as intended, be open to modification on a small scale to correct flaws, and only grow as people accept the idea’s utility for their own purposes.

      It is the embodiment of the scientific method on a social scale.

      The great lesson of empiricism is not that we can figure everything out if we are smart and powerful enough, but that everything must continually prove itself correct in order to be accepted as correct.

      Intentions mean nothing—only results matter.

      That is the simple axiom that the magical mind cannot accept.

      Pardon me for going on at such length. This is an important topic for me, and I’m afraid I abuse the good nature of our hosts here by going on so.