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Wednesday Update

What we want to start doing in some of these Wednesday Updates is begin to look at major events in the news in their larger historical context.... And maybe even how some things will be viewed in 5 years, 10 years or even 50 or 100 years...

Subject: The Bailout & More II

(Wed., October 15, 2008)

(approx. 1929 words, 4 pp.)

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Obviously we are in the midst a Presidential election, and this election has something to do with our current social, economic and political crisis, no doubt, but this current social, economic and political crisis is far bigger than this one election. What we are currently dealing with is not an ordinary crisis, economic or otherwise, nor an ordinary set of political issues. We are actually facing a crisis in the philosophical foundation of both political Parties, and we may even be facing something of the utter and total failure of the two major political Parties as they have played themselves out over the last 16 years specifically but in a larger sense over the last 40 to 50 years, if not more.

"Ideological" Failure of the Liberal and Libertarian Extremes

We have seen FDR’s social programs evolve over the last 40 to 50 years into a ridiculous and unimaginably corrupt welfare state "capitalism" and Reagan’s limited government and low taxes degenerate into an overheated boom and bust economic cycle, leveraged to a degree of corruption unheard of in the history of the Republic, and perhaps even the history of mankind? And this is just to get the ball rolling with an analysis! You might even say The New York Times as well as The Wall Street Journal have lost virtually all philosophical credibility for some time to come with the events of the last few months if not mere weeks or days? The Times, of course, has never heard of a liberal social program or politician that they did not like, no matter how foolish or corrupt the politician or ill-conceived the program, and The Journal, as true libertarians, holds that any deal or action taken between any two people or parties must be good, right and just, because it was done in a "free" market exchange. In the last 16 years, especially (Bush One was our last ‘adult" President?) we have built our Republic and economy on the sand of foolish humanistic liberal and libertarian extremes with all too predictable results! What does this mean? In the long run we are going to have to return to traditional notions of work, virtue, morality, markets, and economics, and the totality of these things will take some years to put together no doubt. What about our current election and immediate situation, which was apparently not very stabilized by the $700 billion, which we were assured it would be! Indeed, the markets began their free fall the hour it passed!

To get the nomination McCain had to parrot the "deregulate and tax cut" mantra as a social and economic cure-all as espoused by the Republican libertarians as well as maintaining "the economy is fundamentally sound" silliness of the Bush administration! Presumably all that is off the table now? Obama is an almost bigger disaster with his said-to-be possibly criminally corrupt Fannie and Freddie advisors, and not since Gary Hart with his "New Ideas" campaign have we seen such a superficial and hollow campaign as Obama has run with his "Change" campaign. Once again, someone must ask, "Where’s the beef?" And, of course, the answer is, yet again, there isn’t any except massive new liberal social programs to further bankrupt the Treasury! Wonderful! What a choice of candidates! But this current disaster and mess of both political Parties has been a long time in the making, both in theory and practice! But at least McCain was trying to blow the whistle on Fannie and Freddie before their collapse. Still, pure laissez-faire capitalism tends to extremes, with wild boom and bust cycles and corruption, and it is amoral at best, which can be disastrous for the society more generally. On the other hand, Welfare State "capitalism" tends toward massive political corruption and abuse of power, which ironically is the height of "injustice," and it is completely oblivious to the realities of markets and market forces and, hence, the real "justice" of the market place. What is real justice? Getting what you deserve or earn! That is supposed to be what markets do, but they do not always do it, but that is another subject for another day.

We are in a new era, and neither candidate is prepared to deal with this fact at this time? Why are we in a new era? The classic liberal programs have failed and have tended to make the problems worse they have been trying to solve, such as Fannie and Freddie did ("free" bad loans for the poor) and with even said-to-be corrupt (Enron type) accounting officials at these institutions to make them look profitable while they were going under. These people are said in the alternative media to be on Obama’s staff rather than in jail, and, of course, McCain, who had notoriously voted against Bush tax cuts and tried to rein in the foolish liberal (and potentially even corrupt/criminal) Fannie and Freddie changed his tune and adopted the libertarian Republican Party line, actually mantra, of "deregulate and tax cut" to solve all our problems. Then the Bailout crisis hit, and McCain has yet to decide what to say now! And good ole "bipartisan" Obama is said (by the alternative media) to have run to Washington for the Bailout rescue plan to get 200 billion for his nutcase liberal action group Acorn. None of this is in the mainstream press except the negative stuff on McCain of course, so it is hard to check the accuracy of any of it. (There are a lot of failing marks to go around here for both campaigns and the mainstream media?)

The two main political giants of the 20th century are of course FDR and Ronald Reagan, but my favorite figure is Eisenhower (what a capable leader!), but the most influential leader of the last 100 years may be Teddy Roosevelt for a variety of reasons that will play themselves out over the next 100 years, but be all that as it may, it was Franklin Roosevelt who created "big government," and it was Reagan who saw excessive government and taxes to be the central problem of his time. These then became two foundational ideological positions, even extremes, in American politics from the 1960s and 1970s to the present day. Unfortunately, I do not think that either Reagan or FDR would recognize their political Parties today! Bush has become almost a parody of Reagan with his "deregulate and tax cut" mantra, and Carter, Clinton, and Obama are, well, not FDR, let’s be honest. Indeed, it is almost an insult to mention these 3 at the same time as FDR?

When the inexperienced northeast liberal John Kennedy (war hero though playboy) was running for President he added, quite successfully obviously, Lyndon Johnson to the ticket to give it gravitas, experience and regional appeal. Obama is clearly playing the same sort of game with Biden. Will it work? Maybe? But I must be honest here, I knew Lyndon Johnson (actually people who did), and I can tell you Joe Biden (bless his heart) is no Lyndon Johnson. So, where is this all going? We are in uncharted waters clearly. FDR and Ronald Reagan extremes have played themselves out to tragic and undesirable ends in the last 16 years, and we are, in my opinion, going to return to tradition regulated capitalism of Benjamin Franklin and Teddy Roosevelt. Further, in my opinion welfare "capitalism" of the liberal Democratic Party and pure laissez-faire or un-regulated capitalism of the libertarian Republican Party are dead in the water (as of the last few weeks!), and presumably the first Presidential candidate who figures this out wins? Further, we have degenerated into special interest groups where no one is concerned with the good of the whole of the nation! Everyone is seeking more money or market privileges from the government! From ever increasing demands for public services (education, healthcare and so forth) in the public sector, to excessive confrontation between labor and management in the private sector. The "brilliant" UAW cannot figure out that what is good for the auto industry is good for them. As the auto industry goes down, they go down! They ought to become a bunch of Republicans and get out of their 1930s labor versus management mentality and quit trying to kill the goose that is laying their golden eggs, namely their employers! Public unions tend to go to the extreme of bankrupting local governments too often? And, as bad, the "brilliant" Republicans could not see if corrupt Wall Street goes down, they may take us all with them! Both political Parties should consider disbanding at this point?

If I were Obama, I would announce all my planned spending programs are on hold, and I would fire anyone connected with possible corruption at Fannie and Freddie and perhaps even request a Special Prosecutor be appointed to investigate, and without any question I would openly denounce this Acorn group, as he did Jeremiah Wright, whether people will believe it or not at this late date is another question? (Acorn is a radical leftist organization and everybody knows it, and there is a complete conspiracy of silence about this? Believe it or not, I used to "organize" with these folks probably even before Obama’s community organizing!) If I were McCain, I would openly denounce the libertarian mantra of "tax cuts and deregulation" as a solution to all of our social and economic problems, and state openly that if elected he would appoint a bipartisan commission to recommend economic policy in a way that non-ideological grownups would be more inclined to do. In this crisis whoever comes out swinging at both political Parties’ extremes in this economic mess will probably win? And McCain can probably do it with more credibility than Obama, McCain should drop the "fundamentally sound" nonsense, even silliness, which was Bush’s line for the last 6 months, and McCain just repeated it, presumably, because his current advisors are as foolish as Bush’s? (Greenspan saw no problem with a mortgage collapse, and he was by far better than anyone else of either Party? Still, he missed the inevitable crisis almost entirely?)

Obama has little or no record of political compromise to give such a promise credibility; however, McCain would have some credibility here since he has this record from the past, but unfortunately not always so wisely or in areas where so-called "compromise" is desirable or appropriate, say many conservatives, correctly in my opinion! So, who wins? Too hard to call at this point? The fact is, in the end, this election may be determined by something as simple as who has the least "baggage," and in fact Fannie and Freddie may prove to be more recent and relevant than the Keating 5? To be continued...