This piece follows and explains “The Assault of the Left, the Case for Fierce Optimism and Ruthless Honesty” posted on The Policy Think Site (in pdf) at this LINK: http://jaygaskill.com/RuthlessHope.pdf and http://jaygaskill.com/PoliticsAndCreativity.htm. As you might glean from the content, this is a series.
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Politics & Polity:
Our Rodney King* Moment
“Yet I confess, watching all this, I feel again why I’m no
longer spiritually attached to the Democratic Party. The essence of
“The Democratic Party, as it revealed of itself over the past year, does not seem to be up to that coming challenge (neither is the Republican Party). This country is in the position of a free-spending family careening toward bankruptcy that at the last moment announced that it was giving a gigantic new gift to charity. You admire the act of generosity, but you wish they had sold a few of the Mercedes to pay for it.”
“My definition of broken is simple. It is a system in which
Republicans will be voted out for doing the right thing (raising taxes when
needed) and Democrats will be voted out for doing the right thing (cutting
services when needed). When your political system punishes lawmakers for the
doing the right things, it is broken. That is why we need political innovation
...worse, far worse than it looks....
“...the debt held by the public with current tax policies extended would soar to 90% of GDP by 2020, Mr. Elmendorf (CBO Director) said, making the U.S. public debt load one of the world’s highest.
“...the Fed has to handle the historically large fiscal deficit. By and large, government spending diverts money to unproductive recipients, making the economy more susceptible to inflation. And the deficit is so large that bond investors may yet choke on Treasury debt, forcing longer-term interest rates up. Confronted with that, an accommodative Fed might hold down its short-term rate, which could also stoke inflation.”
“Bernanke said the deficit might affect monetary policy if it causes investors to lose confidence in the government’s ability to achieve fiscal balance.
‘Interest rates might rise because of a lack of confidence by creditors in the long-term fiscal stability of the government,’ and “high interest rates tend to slow the economy,” he said.’
“Demand at this week's 2-year and
5-year note auctions was also lukewarm, which has raised speculation that a
long-awaited boycott of
‘The message from the bond market
“Many analysts have been predicting
that investors will eventually begin demanding higher yields, given the flood
of Treasurys that has come to market over the last
several months and the risks tied to the swelling
Yet we are suffering a perfect storm of delusion and denial (purposeful or pathological).
Five distinct elements of our current situation are being ignored as if they didn’t exist:
The toxicrats and the procrasticans (with their enablers, the moderati) have been manipulated (all too willingly) by predatory financial elites selling permanent prosperity through permanent borrowing. For the last 30 years, faux prosperity bubbles (most recently, the dot com and real estate securities booms) temporarily masked the severity of the festering fiscal and economic crisis.
The off-the-books indebtedness of the federal government, the so-called structural deficit has been ignored, because, in the words of one economist “we just owe it to ourselves”. But the dirty little secret is that the federal government hasn’t been able to function for decades without outsourcing our indebtedness to foreign investors like, say, the Chinese. Even minor foreign participation in financing US government operations is dangerous. If next week, for example, all foreign lending dried up, the federal government’s operations would grind to a brutal halt. The other dirty little secret: hat there is no escape from debt repayment. Monetizing the debt means creating more money to pay for it. Two consequences immediately materialize: rampant inflation and the inability to borrow more.
As federal borrowing grew without any real attempt to repay, our leaders and their handlers kicked disaster down the road. The next bubble to shatter will be the Great American Deficit Scheme itself.
If that bubble deflates in a relatively brief period, say
within only two of three fiscal years, it will be a catastrophic event. If it happens even more quickly, it is
capable of bringing down the social order.
We then may be forced to relive the last days of the
Our present circumstance has recently been described as a crisis in polity and civility as if Rodney King* had been promoted to chief political science guru.
An electoral uprising against president and congress is the predictable consequence of a policy coup by the elite left. An angry division in the electorate is a natural response.
The underlying financial crisis presents on the threat-scale of a world war. This demands a searching, honest policy dialogue aimed at prevention. But a real constructive dialogue will remain out of reach until we reach agreement on three threshold conditions:
(a) a common baseline moral framework rooted or congruent with the constitution;
(b) a common commitment to the realistic pursuit of the optimum social order instead of the holy pursuit of social Unobtainium – pursuit of that class of Utopian constructs that seeks to re-engineer human nature always ends badly;
(c) ...shared honesty and (at least minimal) candor.
Ideological true believers do not actually dialogue with opponents. They practice strategic listening, misdirection, demands and walkouts. Mr. Obama’s recent treatment of the Israeli Prime Minister – the president walking out of the room during their discussions - is a good example.
Ideology is to dialogue as deafness is to orchestra conducting.
Years ago, a political analyst named Daniel Bell proclaimed “The End of Ideology” in 1960 (http://en.wikipedia.org/wiki/The_End_of_Ideology), much as Francis Fukuyama declared in 1992 “The End of History.” (http://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man).
Of course, neither history nor the role of ideologues has actually ended. The irony escapes me here only because irony requires detachment. The history we are compelled to live through at the moment is painful. An outmoded ideology of the left has arisen like a vampire at midnight from its coffin, captured the presidency and both chambers of the legislative branch, utterly shattering – for the moment – any common constitutionally rooted moral framework, embracing divisive Utopian social projects financed by Madoff style accounting tricks, and selling them with an astonishing departure from former standards of honesty and candor.
I fear we will be forced to wait until the current set of leaders has been replaced and hope that the next set will be able to engage in a reasonable dialogue.