Wall Street and Washington

Whenever the politicians create a scapegoat, you can guess one thing. The scapegoat isn't to blame. It's the politicians.

So when the politicians blamed greedy bankers for the mortgage meltdown, you had to know that the bankers were at worst the willing accomplices of the real greedy crooks. And they had to be the politicians.

So when you read about Charles Gasparino's Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street you know the real story.

There's only one thing to remember when it comes to figuring out Wall Street. It's the old, old line from Jesse Unruh, once Speaker of the California Assembly. "Money is the mother's milk of politics," he said. Unruh was talking about campaign contributions, but the same applies to government finance, only in spades. If money is the mother's milk of elective politics, then money is the very red blood corpuscles in the blood stream of government. Here's a story that tells it all. I got from The Merchant Bankers by Joseph Weschsberg.

After the Napoleonic Wars, in 1815, the Allies demanded an indemnity of 700,000,000 francs from the defeated French. How on earth would the French come up with that kind of money? Perfectly simple, said French merchant banker Gabriel-Julien Ouvrard. Don't borrow from the rich in France with a compulsory loan. Don't raise taxes. Float a bond issue in London. Everyone thought the guy was crazy. Why would the Goddamns pay for the indemnity? But it worked! Ouvrard got permission from the Duke of Wellington, the general of the Allied occupying army in France. He got merchant bankers Barings and Hope & Co to syndicate the loan and in 1817 the French sold a 350,000,000 franc bond issue in London. So they got Brit investors to cough up the money to pay the indemnity and got to pay back the Brits in installments.

This little story illustrates the reality of government finance. Governments need the bankers more than they need the armed forces, more than they need their supporters. Because it is the bankers, more than anyone, that keep them in business.

If you don't like the idea of Wall Street and Washington in bed together, then make the bed smaller. Cut the size of government. At least you'll know then that neither Wall Street nor government is comfortable.

The Emergent Democratic Minority

Now that the prophecies of an Emerging Democratic Majority by chaps like John Judis and Ruy Teixeira have been laid to rest, let's look at the more realistic idea of an emerging Democratic minority, which seems more likely.

Michael Barone takes a look at the demographics of the late election and notes the desertions of several long-term stalwarts from the Democratic rank and file.

The Jacksonians from Appalachia and the South who have been Democratic since the days of Andrew Jackson in 1828 seem to be definitely gone.

The Germans and Scandinavians from Minnesota, Wisconsin and Iowa are definitely on the move, in particular in Wisconsin.

The Rust Belt was a disaster for Democrats as industrial workers in trouble voted against big government.

The Hispanics are showing definite signs of movin' on up from liberalism, in Florida, in Texas, and in Nevada and New Mexico.

Even the Finns in upper Michigan are deserting the ship.

The only chaps still firmly in the Democratic camp are gentry liberals and blacks. My prediction is that blacks will start deserting the Democrats as soon as Barack Obama leaves the presidency and they no longer feel the need to defend their guy to the death.

That leaves our friends the gentry liberals as the core of the Democratic Party. I want to believe that gentry liberals are Democrats because they benefit disproportionately from Big Government. Just voting their pocket-books, don't you know. But the trouble is that I know too many liberals that don't work for the government. They are liberals because they believe.

Life after Liberalism

Women yearn for love; men yearn for victory. Our liberal friends yearn for the perfect ten-point program. Alas, our dreams are fantasies. Yearning for love, women live with the grief of loss; yearning for victory, men live with the humiliations of defeat. And liberal government programs end in perfect failure.

The beginning of wisdom is to dissolve our fantasies, to surrender to loss while ever keeping the light of love shining, to accept defeat while continuing to fight the good fight. But what of the perfect government program?

For two hundred years our liberal friends have pursued a chimera. They have longed to create a perfect world of peace and justice through a system of centralized administrative government. Their method has been to remove certain socially necessary activities from the economic sector and subject them to the administrative control of the government, the political sector. This, of course, has the effect of stripping these activities of their social character and reducing them to a transaction of force, for government is force, and politics is power.

Each act of force is the victory of the strong over the weak; it is the triumph of power over love. And so, wherever liberal programs hold sway, there is no peace and no justice. At best, liberal government produces a society of envy policed by surly officiousness. At worst it descends into the hell of political terror. At its best it operates with the Keystone Kops incompetence of the US Transportation Security Administration; at worst it slashes through history with the murderous rage of the Soviet KGB.

Every life ends in death; every government ends in default. It is our task to imagine and to build a life after the default of liberal government.

It is possible to set forth on this quest because we now know that the trajectory of liberalism has passed its apogee. It must now end in default, because it cannot deliver on its promises. It must either default on its promises, or default on its debt.

As liberal government defaults on its promises, it will lose its power. It creates a space for a new power, a new foundation and a new order. We already know what this foundation must be. It must be a new dedication to the principles of limited government set forth in the US Constitution. Our society is not a single government monolith nor can it flourish and grow when all social transactions are collapsed into the political sector.

Our modern commercial society is founded upon a differentiation of the public square into three sectors. There is the political sector, the realm of force where people jostle for power. There is the economic sector, the realm of trust where people cooperate to serve each other's needs. Finally, there is the moral-cultural sector, the realm of faith where people search for the meaning of it all. The differentiation of society into these three institutional sectors means that society cannot be yoked to a single purpose or moral vision. It is a plural society, with many competing moral visions, many economic actors competing to serve, and many political actors lusting for power.

Our liberal friends, in their century-long liberal dynasty, have used their power to blur, and sometimes collapse the separations between the three sectors. With their secular religions, socialism, fascism, and communism, they sought to fold the moral-cultural sector into the political. Whenever they succeeded, the result was tyranny. With their war on business they sought to fold the economic sector into the political. Whenever they succeeded, the result was poverty.

Our task is simple. We must renew the promise of the differentiated society. There must be a renewal of the separation of church and state, to keep the political power from co-opting and corrupting the moral-cultural power. And there must be a renewal of the separation between economy and state, to keep the political power from dominating and corrupting the economic power.

Of course, this practical and honorable project will not bring in the millennium. But it will heal the corruption of the centralized liberal administrative state. It will let women dream of a love free of liberal rapine, and it will let men dream of victory in a life free of the liberal kowtow.

And people will rejoice in Life after Liberalism.

The Mystery of the Missing Voter?

Now I've seen it all! Democrats are apparently shocked by the mystery of the missing voter. What happened, they wonder, to the hordes of Democratic voters of 2008 that turned out to elect Barack Obama? Writes Gerald Seib,

A popular theory of this year's midterm election holds that Democrats took a shellacking in part because big chunks of the party's core liberal base, discouraged at the path of the Obama administration, stayed home rather than show up to vote as they did in 2008.

Well, not exactly. According to a Wall Street Journal poll of 2008 Obama voters that didn't turn out this year, they are not angry lefties. No, the explanation is much simpler than that. Sure, they are mostly self-described as Democrats.

But they also were more likely to identify themselves as "not very strong Democrats" rather than "strong Democrats." And the largest share identified their ideology as moderate rather than liberal.

In other words, these are Americans that are not strongly connected to politics and not strongly motivated to vote.

That fact rather steps on the desire of many strong Democrats to rile up the Democratic base by doubling down on the liberal Obama agenda with a strongly partisan attack on the Republicans.

No, the voters that stayed home are momentum voters. They voted for Obama because they got swept up in the euphoria of Hope and Change. To bring them out again, the president is going to have to rile up the uncommitted.

Really, that's going to be almost impossible, absent a big turnaround in the economy. Think about the average uncommitted young woman voter. In 2008 she found herself all excited by Candidate Obama because all her friends were excited. But now she and her friends are looking for work and not finding it. They are discovering, for the first time in their young lives, that politicians will say anything to get elected. They are discovering that politics really doesn't transform their lives with Hope and Change. What is it going to take to get those young voters back to the polls? A strong economy, that's what. But even so, they are not going to be marching to the polls in battalion strength like they did in 2008. You only get to do the euphoria experience once, when your side is out of power and half the electorate is groaning for release from the evil corrupt in-party.

What President Obama needs is a Morning in America feeling, like the feeling that Americans felt in 1984 when the economy had emerged from four years of inflation and recession. The big question is whether Obama's economic policies will deliver that. After all, his policies are the exact opposite from President Reagan's policies in 1981-84. Instead of hard money, he is backing "quantitative easing." Instead of spending cuts, he favors big spending increases. Instead of tax rate cuts, he wants to increase tax rates on the most productive Americans.

It's a great experiment, and we will see what works by 2012. And then the missing voters of 2010 will get to decide whether they want Four More Years, or whether they think it is Time for a Change.

The Meaning of the Secret Donations

Our friends at The New York Times are shocked, shocked to discover that the US Chamber of Commerce has been laundering "secret" donations for corporate special interests.

Specifically, according to a Times editorial, the Chamber has received secret donations from the insurance industry and from Wall Street.

Secret donors spent at least $138 million on the midterm elections, according to the latest figures, and 80 percent of that secret money supported Republican candidates. What will those donors get for their money, and who will they get it from?

Yes, it is very annoying that corporate interests are secretly spending money to oppose the Obama administration. Who would have thought it?

But the Times is missing the point. The reason that these corporate interests are laundering their money through the Chamber of Commerces is that they are afraid. They are afraid of what the Obamis would do to them if they came out and honestly admitted, with their contributions, that they are dead set against Obama and all his works.

Let's put it this way. The reason that many Democrats want Nancy Pelosi to continue as Minority Leader in the House is that she is a great fundraiser. Now why do you think that the lovely Nancy has such a reputation as a fundraiser? Charm? Personal beauty? A winning sales pitch? Or is it just naked threats to pay up or get thumped?

Here is a story that might illuminate the issue. Right after the 1994 elections Speaker-elect Newt Gingrich is reported to have told his people to put the screw on all the corporations. They hadn't contributed much in the runup to the elections, but now they had better learn which side their bread was buttered.

The fact is that the secret contributors to the Chamber were afraid. They were afraid of the consequences if it became known that they were contributing to Republicans.

And that, I suggest to my liberal friends, convinced of the enormous power of big corporations, is not good. Nobody, not progressives, not pro-lifers, not corporations, not unions should be afraid to contribute openly to the candidate of their choice.

As for me, I live for the day when government employee unions feel the need to hide their contributions to Democrats, because they are afraid to face the wrath of the permanent-majority Republicans.

State Winners And Losers

The US Bureau of Economic Analysis released its numbers on state GDP (called Gross State Product or GSP) for 2009 yesterday. The numbers are now up on usgovernmentspending.com. So now we can see the winners and the losers in the Great Recession.

Here are the top winners:

State	Growth Rate
Oklahoma	6.6%
Wyoming	5.4%
North Dakota	3.9%
Alaska	3.5%
Louisiana	2.5%

Looks like the energy states were doing best. Now here are the big losers:

State	Growth Rate
Nevada	-6.4%
Michigan	-5.2%
New York	-4.3%
Arizona	-3.9%
Indiana	-3.6%

Looks like two housing-crash states and two deep-blue basket cases. But Indiana?

Head on over to usgovernmentspending.com and take a look.

What Do the Soros Guys Want?

I'm confused. After President Obama has rammed just about all that a lefty president could ram through Congress and the federal bureaucracy in the last two years, the rich-bitch progressive funders at the Democracy Alliance, George Soros, proprietor, are all bent out of shape. Says Soros:

"We have just lost this election, we need to draw a line," he said, according to several Democratic sources. "And if this president can't do what we need, it is time to start looking somewhere else."

I would think that the Soros brigade would realize that now is not the time to go soft on the president. After all, he and Pelosi are the front rank in the battle to stop repeal of ObamaCare and the federal takeover of the financial system, etc.

Actually, my confusion goes even deeper. These liberal moneybags, that style themselves the "progressive movement", are working to do what? Further empower the government employee unions to loot the government? I'd say that the big problem right now for genuine progressives is that the government administrative tail is so large and expensive that it is impossible to do anything.

Well, I shouldn't be surprised. Every liberal I check on knows all about the Koch brothers, how they are the top-down funders of the Tea Party movement, and how that is bad for America. But they seem to be wholly innocent of the influence of George Soros, who seems to be much more influential on the Democratic side. Scratch a liberal these days and she is worried about the peons working like indentured servants for Wal-Mart. Maybe so, but have you liberals checked to see how many people line up for Wal-Mart jobs whenever Wal-Mart opens a new store? And how the lines are much longer when Wal-Mart opens near a liberal city like Oakland or Chicago?

And what is all this about a progressive "movement?" How can we be talking about a genuine movement when it is composed of people who like the current administrative state and just want more of it? These are people who are part of the ruling class and want more of it.

The way to think about this is to think of it as religion. Religion is about faith, faith in the meaning of life and faith in the way things work. These liberal progressives are members of the church of liberalism. They believe in the Articles of Liberal Belief and they believe that what we need is more liberalism. The only trouble is that the mass of the American people are not co-religionists. They do not worship at the church of liberalism. No re-messaging or re-focus is going to change that. Here's a SEIU honcho:

"People are determined to help build a progressive infrastructure and make sure it is there not just in the months ahead but one that will last in the long term," said Anna Burger, the retired treasury secretary of SEIU. "Instead of being pushed over by this election it has empowered people to stand up in a bigger way."

Progressive infrastructure? Does Burger not realize that liberals already have a massive progressive infrastructure in place from the liberal media to the schools to the foundations to Hollywood to their own Democracy Alliance?

Really, this is good news for conservatives. These chaps are like Tory "ultras" in the 19th century. They are like southern segregationists in the 1950s. Their whole project is running on the rocks of unaffordable programs and pensions, and they are proposing to reinforce failure.

Bring It On.