Recessional

by Victor Davis Hanson

PJ Media

Et tu, Brute?

Conservatives created Barack Obama and his vision of the Europeanization of America, and so have themselves to blame for the current recessional, as the present as we have known it fades into the past..

Let me explain. Yes, I know that the 2000-01 recession, Hurricane Katrina, two wars, and a $1 trillion hit after 9/11 made fiscal discipline hard. But being a conservative in America these days is hard — and one gets very little leeway or second chances. Not disowning a Ted Stevens and instead pointing to a Charles Rangel or John Murtha or William Jefferson is fatal for a conservative. We expect such things from a promiscuous spender, but cannot tolerate it from a professed budget hawk.

Pillars of wisdom

The pillar of conservatism is fiscal responsibility.

Why? Balancing budgets and saying no to always expanding government, first, is a moral issue. Just as the individual does not borrow from others to satisfy his own appetite, does not consume what he does not earn, so too government should not spend what the nation has not produced. The conservative, as the custodian of ancient morality, must remind the populace of the thriftiness of our ancestors that explains the bounty we inherited. If not he, who will say that life is not fair, that human nature is predictable and thus tragic, that in our brief corporal lives we can guarantee an equality of rough opportunity but hardly mandate an equality of absolute result — since we are mere mortals, not gods?

Political suicide

Second, there are crass political concerns as well. The greater government grows, the larger the number of those receiving and expecting entitlements, and the more expansive the public work force becomes, so likewise the more permanent is the recipient constituency for high taxes, big government, and perpetual largess. The tragedy of the present disaster is that the Democrats are forming dependencies — cf. the President’s promises to provide new proposals for guaranteed cradle-to-grave education, health care, jobs, etc. — through these massive outlays that will last almost indefinitely — until the system collapses from its own weight and we start over again

Hypocrisy

Third, there is the question of hypocrisy. The liberal philosophy maintains that government, better than thousands of informed and self-interested individuals, can direct and guide our lives and national purpose. It has more confidence in the tenured bureaucrat than it does the small businessman, whose unpredictability and autonomy prove too disruptive to the common vision. If conservatives borrow and spend, then liberals quite naturally sense there are no longer any fiscal auditors left, and they can — and must — trump their newfound competitors for dependent constituents. For the liberal Democrat it is a liberating experience to see a free-spending Republican conservative run up deficits in hopes of providing largess and earmarks to his constituents — the proverbial mouse swallowed by the python, or the strutting hawk trapped under the eagle’s talon.

It wasn’t yours to begin with

Four, philosophically, conservatism hinges on rewarding the individual for his success, on the theory that such encouragement will eventually mean greater wealth for the common good, and reminds the citizenry that the individual, not government, owns his own wealth. But once spending spirals out of control, then naturally the government must take measures to raise revenue — and to accomplish that goal, it must educate the populace that the “rich” are greedy, and impoverish rather than enrich the commons; and, second, that wealth naturally belongs to the government. It taxes and thus merely takes back what is naturally its own, rather than lets be that which it has no intrinsic right to.

Conservative felonies

So the Republicans betrayed their own principles and allowed the Democrats in 2006 and 2008 to run against deficits in order that they could enlarge deficits, convinced that the natural opposition was long ago discredited.

Trashing Bush for spending and not spending enough

Note the irony. Liberals trashed George Bush for urging us to buy and consume after the shock of 9/11 in order to ward off a paralysis of fear and possible recession. Now in the present crisis they insist we buy and consume to ward off a paralysis of fear and further recession. It would have been better had they trashed Bush for not urging deficit spending and consumerism and risking a recession than ensuring a long-term unsustainable cycle of red-ink. Had Bush campaigned in 2005 with a surplus and reduced spending, and ran against Ted Stevens and Jack Abramoff, he might have made it far easier for conservatives to continue in power.

The squirrel-cage economy

Bush faced such hysterical opposition of matters of foreign policy, that to keep congressional support, on the domestic front he often gave into the fuzzy notion of ‘bipartisanship’ and ended up advocating massive entitlements like the prescription drug bill and No Child Left Behind, without detailing the source of funds to pay for them. So in fears of recession, and resulting political suicide, each new President now urges more borrowing and spending that allows him reelection and us yet another reprieve. No one dares tell the heroin addict that his habit is unsustainable, and that while each new fix brings temporary relief, in aggregate the injections are destroying the user himself. So it should have fallen to conservatives to yell, “Stop”, to risk recession and to change the ethos to ensure monies were not spent unless the source of additional revenue was assured. Such a readjustment might have been ugly, but not as ugly as the present mess.

Who will police the police?

The scariest thought is ‘who will police the police’. In a nation of government workers there is no higher auditor. I was reminded of that thrice this week: once while driving down the 41 freeway, I was passed by a municipal garbage truck, its trash spewing over the freeway (I remember being stopped once by a highway patrolman because the tarp over my brush in the pickup did not quite cover one corner of the bed.) What does that driver worry about? That his boss, the city of Fresno, will fire this unfirable unionized driver? Next, on a bike I was almost crushed at a crosswalk as a city busdriver did his rolling stop, one hand on his cigarette, the other illegally holding cell phone to the ear — whom do I call? (He surely does not fear another city-employee policeman to cite him.) Third, the radio just blared that the fifth California State University female sports coach is suing the university for sexual bias. We’ve had four over the last three years, and they have collected sixteen million dollars, so it is now open season on the local university treasury. Whom do you call? Fire the dean? There is no CEO who resigns, not with tenure. Plead with the litigant that being passed over for her coveted job does not justifying cutting 30 classes to pay for her anguish? There is no “they” to pay anymore when you sue a broke government — at least not until the judge’s check bounces.

A Reaganite fallacy

One of the apologies for the Reagan-era deficits (besides the new emphasis in calibrating them in terms of more palatable percentages of GDP rather than in actual red-ink dollars) was the notion of “starving the beast”: cut taxes so that federal revenues shrank (but I thought that supply-side economics always ensured greater revenue?), and redundant and ineffective federal entitlements and bureaucracies were starved into oblivion.

Beat the beastly taxpayer

That, of course, did not quite work. And now we see the liberal corollary as something we should call, “starve the beastly taxpayer,” or the notion that if one spends profligately, the ensuing deficits will ensure eventual higher taxes and force a socialist redistributive scheme. And always higher taxes ipsis factisreflect the creed of the liberal mind that the well-compensated do not deserve their high incomes. (Remember, again, the key to progressive thought is that compensation is unfair, rigged, or arbitrary and the government alone through taxation can bring moral justice back to the equation by ensuring the gardener gets federal money and pays no taxes while the surgeon gets none and pays lots of taxes, since it was never fair to begin with that one worker gets little money for dirty hands and the other lots for clean gloved ones.). The redistributive government becomes as fair as the cruel market is not. I was reminded of this while being operated in Libya for a ruptured appendix, when the surgeon said he did the best he could to save my life, but offered he was by law paid about the same salary as the mopper who did a poor job cleaning the rather dirty floor of the clinic.

Is it sustainable?

In the natural yin and yang of politics, of course, the liberals in power will not be able to say no to more and more government and higher and higher taxes — witness California. And then two things will begin to happen. First, their alliance of elites and masses will unravel. The Obamians have declared war, recall, against those who make between $250,000 and $1 million — caps off FICA taxes, top rates back to near 40%, state taxes climbing, and higher capital gains and means-tested deductions. The multimillionaires of say $10 million a year (Obama’s jet-setters who fly for drinks to the Super Bowl) don’t much care whether they will pay $7 million in taxes rather than $5 million, since (a) $3 million net is pretty good anyway; (b) with $10 million in gross income it is easier to buy the mechanisms to pay zero taxes rather than even the $3 million. The Obama cabinet picks reflected that reality of creative cheating well enough.

Did he mean us?

But the trial lawyers, the progressive stock brokers, and sympathetic endowed professors and high-paid journalists will cry “nos quoque?” and begin to resent that the messiah also had them in the cross hairs (FICA, Medicare, federal and state income taxes will now approach 70% of gross income, apart from property and sales taxes.). Remember, do the math: there are simply not enough of those horrendous 1%-ers, who now pay 40% of the nation’s taxes, left to gouge much more money out of to cover the entire debt. You must hit hard the $250,000 income earner, and then go back down to the real pot of gold — the millions who make between $100-200,000 if you finally must cover the massive transfers in capital.

Carterism — if we are lucky

Second, we will get Jimmy Carter’s stagflation that will affect us all. Interest rates will have to rise to attract capital to sell debt paper. Inflation will rage as money will be printed to cover deficits not covered entirely by foreign investment. Unemployment will rise as high-taxed small businesses will not sense there are incentives to hire and expand since they know additional income will simply revert to the government. Revenues will sink as creative individuals who won’t waste time in cheating on 50% rates, will suddenly balk at local, payroll, state, and income taxes approaching 70%. From what I remember in the 1970s, they will seek shelters, engage in barter, traffic in cash off the books, or simply lie — and the result will be less, not more revenue, to pay for federal spending.

I get the feeling we are in the Invasion of the Body Snatchers and there are only a few of us screaming to the wind wandering around left not yet absorbed.