December 4, 2008
It's crazy. All those Reaganomicists who once chanted "Government is the problem!" are now full of irrational exuberance at its salvific power. Even Alan Greenspan is repentant.
It's like drunks falling off the temperance wagon: Dry for so long, they go on a bender. Actually, to modify the metaphor, they're just switching intoxicants: Now that their supply of the cocaine of unbridled capitalism has dried up, they've finagled the key to the federal liquor-locker.
The present Bush administration has been prepping these erstwhile conservatives for their turnabout for years by quietly jettisoning the bedrock principle of traditional Republicanism, the balanced budget, allowing Congress to spree on every manner of bridge to nowhere here and abroad while racking up the debt — different only in magnitude from the average American's credit- card mentality. Only late in his second term did the president begin to veto spending bills in the name of fiscal restraint — like a few million bucks for children's health-care, of all things.
Pundits love to quote the apocryphal but characteristic observation by the driest wit in the Senate, Everett Dirksen, back in the 1960's: "A billion here, a billion there, and pretty soon you're talking about real money." Adjusted for inflation, Ev, you'd better make that "trillion." And as for real money, even that isn't real anymore; it's impossible to wrap your mind around just how much several trillion dollars is. Dinky little programs like universal health care were until a couple months ago thought far too expensive, but since the bailouts began, expense means nothing — or more correctly, it means everything: We're all ultra-Keynesians now. The dam has broken and the dollars gush out, and any anxiety about the flood is just a momentary qualm, like judging how much to tip the waiter.
Crazynomics is the reactive result of the canonization of the free market that's been deluding Americans for three decades. The superficially noble philosophy of enlightened self-interest, what Bush once confidently named the "ownership society" — the utopian belief that everybody is a Horatio Alger who, left to his own ingenuity, will naturally grow rich — has twisted our collective psyche. Replacing the expert-run company pension with the you-decide 401-k, deregulating the formerly stable institutions for basic saving and borrowing, encouraging sky's- the-limit home loans, offering "free choice" in Medicare drug plans (the public only balked at privatizing Social Security), all are sending half the country over the cliff like lemmings. Panicked to stop the hemorrhaging, the Federal Reserve and the Congress thought nothing of injecting pure gold into the veins of institutions weakened by years of self-indulgence. And of course, the hemorrhaging hasn't stopped.
If this is 1932 all over again, it's because nearly 30 years of laissez-faire economic policy have sent us "Back to the Future" — the now ironic title of a 2004 Greenspan speech outlining his free-market philosophy.
After the Republican-led money-toss at their buddies the banks — let's see, where exactly are those trillions going? — Democrats are at last looking to their former hero, Franklin Roosevelt, in disrepute since the Carter days. They're going to the people, putting their proposed trillions on results you can see: in the short term, repairing the infrastructure and funding new technologies, and in the long term, re-regulating and stabilizing the fundamental structures of the economy — a minimalist, grounding socialism that provides basic economic assurance for everyone: social security, in lower case.
If crazynomics has done anything, it's made large-scale government spending on programs of real national benefit look modest. Funding for transportation, sustainable energy, new domestic industries, even universal health care that couldn't pass on principle when times were flush may now pass on expediency, just to "create jobs." But that's O.K.; it doesn't matter why they pass, as long as they pass.
So look on the bright side. The Great Depression was miserable, but it forced the creation of public works projects whose results endure to this day. Our Lesser Depression may actually pull the country forward to the future.