Not EVER

posted at 2:32 pm on April 25, 2010 by J.E. Dyer
[ Economics ]   

There is a qualifier that GOP politicians, and many pundits, keep putting on their opposition to Obamacare, Cap-and-Trade, and other onerous, intrusive, and destructive statist measures being advanced by the Obama-led American left.  The qualifier goes like this:

“Now, when we’re in a deep recession, is the worst possible time to inflict these additional taxes/regulatory costs on the economy.”

In theory that may be true, in that it could be less bad – in, say, the first 5 years of the forced economic decline – if we started it from a higher point of prosperity and economic confidence.

But that theoretical distinction is like saying it’s better for an adult human to weigh 500 pounds than to weigh 600 pounds.  Sure, 500 pounds is better than 600 pounds – but neither is desirable or advisable.  Both are problems that will lead inevitably to diminished quality of life and an early demise.

The statism of Obamacare and C&T, which is both prophylactic and punitive, is itself a problem.  At no time would it be a good path to go down.  We might be able to sustain some of the elements of these programmatic approaches better if the economy were in better shape right now, but that wouldn’t last.  These concepts for centralized control of a breathtaking segment of people’s life choices would very soon end both prosperity and hope.  If we began imposing them on a better economy, it would merely take a bit longer for the inevitable outcome to arrive.

The effect of just these two pieces of legislation will be to dismantle, just about entirely, the financial liberty of the middle class.  Between government controlling our energy and how we use it, and government controlling our access to health care, our loss of individual choice will be catastrophic.  And that’s just with these two realms of government action.  If we expand our view to the financial reforms currently being debated in Congress, we discover that they would severely curtail the ability of well-managed companies – mid-size companies that have followed sound investment policies and had nothing at all to do with the meltdown – to retain diversified investments, and earn profits for their shareholders and clients.

Worse even than that, it would make the earning of profit a “perk,” to be distributed by government agencies to firms that curry favor with them.  All three of the major legislative thrusts before Congress – health care, C&T, and financial reform – will have that effect, in the forms drafted by the Democrats.  This sort of “crony capitalism” is exclusionary, with monopolistic implications, and inimical to smaller businesses.  It is bad for markets, consumers, and prices.  It weighs commerce down, causes wages to stagnate, and keeps out newcomers.  It ultimately puts the force of an entrenched, bureaucratic state behind a commercial status quo that becomes increasingly sclerotic as it favors, not the innovative and hard-working, but the “connected” and entitled.

A super-wealthy polity can tolerate a little of this over a couple of generations.  The pattern itself is dysfunctional, and cannot be made self-sustaining, as we see today with the impossible totals of retirement obligations owed by the US automakers to the unions, and by a number of states to retired government employees.  A strong case can also be made that favoritism from Congress was what allowed overleveraged finance companies like Citi and AIG to persist in operating unsoundly.  There is a price to pay eventually, but if the actors are in a single or distinctive category, a free and dynamic economy can perhaps outproduce the burdensome sclerosis troubling one or two segments of it.

What the Obama cohort wants to do, however, is turn the whole economy into the fiefdom of government regulators, industry cronies, and unions.  There will never be a time when that is advisable.  When Republicans and sympathetic pundits add the caveat about this not being the time to do it, they weaken their case and leave themselves vulnerable.

Ultimately, the conservative right has to address the beliefs themselves that lie behind the left’s political agenda.  This is a twofold requirement:  the points to address include both the specific beliefs about what threatens us – the “uninsured,” “global warming” – and the general beliefs about the proper relation between man and the state.  If we don’t establish our terms on those topics, we cede the whole debate to the left, and end up with the weak, easily-trumped argument that “now is not the time.”  Unless the left’s premises are dealt with, there is no unassailable basis for objections tied defensively to whatever depiction of the economy is current in USA Today.

Cross-posted at The Optimistic Conservative.

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