As the Spending Battle is Joined

In the coming months there will be lots of fiery rhetoric about government spending. Orphans will starve and widows will die. But there is one thing to remember. It's liberals that have a problem, not conservatives. The longer that liberals put off agreeing to spending cuts, the harder it will be for the folks vote for liberals and have put their trust in government. Let's go through the list of proposed cuts that Dick Armey and Matt Kibbe have drawn up in The Wall Street Journal.

1. Return discretionary spending to 2007 levels.
2. ObamaCare
3. Eliminate bailouts, and cut the cord with Fannie and Freddie
4. Eliminate subsidies on ethanol and unproven energy.
5. Scrap Departments of Commerce and Housing and Urban Development.
6. End farm subsidies, cut NASA, Repeal Davis-Bacon, End urban mass transit grants
7. Cut defense spending
8. Cut entitlements by slow conversion of Social Security to personal accounts, and conversion of Medicare and Medicaid and tax subsidies for employer health benefits into "capped contributions to individuals."

According to Armey and Kibbe that would amount to $3 trillion in cuts over ten years.

But never mind that.

Look at all the proposed cuts. Does anything shine out at you? Exactly. None of that stuff is really going to affect you.

Maybe that's the big problem with the liberal welfare state. Liberals carefully started out by handing out benefits to the opposition. But now they have forgotten the consensus politics of the old days. Now they and their clients just flat out elbow everyone else away from the trough. That's what happened in the Reid-Pelosi Congress from 2007-2010.

It was great fun while it lasted. But there is a problem with it. The time is coming, because of looming default, to start cutting. Oh well, say conservatives. Oh no, scream liberals! If the only people benefiting from government programs are liberals and their clients, then only one thing can happen if we have to cut spending to stave off default. We will have to cut liberal government programs. So it will necessarily be liberals and their clients that will suffer.

And that is sad.

But it is not the end of the world.

Blue Social Model: That's All There Is?

Our liberal friends live and work and write as though the "developed" model for western countries, the bureaucratic social welfare state and the bureaucratic corporate model were the final end point of social development. Thus: "developed."

But Walter Russell Mead argues that they must be kidding us.

The "blue social model" had its good points, but putting working people onto unionized bureaucratic life-employment tracks and putting white-collar people into corporate bureaucratic life-employment tracks pretty obviously can't go on much longer.

Ironically, many social critics on the left were appalled by the bureaucratic system.

Social critics spent decades, rightly in my view, denouncing our school system from Pre-K through Ph.D. Mediocre, conformity inducing, alienating, time wasting: the school system trains kids to sit still, follow directions, and move with the herd.

And what we have seen over the last generation, the years after the "developed" moment in 1970, is that the economy is much more fluid and entrepreneurial than the "blue social model" assumed. We've seen remarkable changes, technological and social, in the last generation.

As the economy becomes more fluid, more entrepreneurial, it is clear that raising one generation after another of aspiring time-serving bureaucrats is not very effective.

We have a stuff-rich society where even the "poor" have a lot of material comfort. But now it's time to think beyond material to meaning.

The blue social model, for all its merits, separates production and consumption in ways that are ultimately dehumanizing and demeaning for large chunks of the population. The true value of human life does not come from consumption, even lots of consumption. It comes from producing goods and services of value through the integration of technique with a vision of social and personal meaning. Being fully human is about doing good work that means something.

Our liberal friends have been very good at designed meaning for themselves. They are all in favor of extended education, of creative arts, of meaningful activism, of saving the planet. But all these paths of meaning seem to be accompanied by notices that say "conservatives need not apply." That is, after all, the meaning of assaulting conservatives about their hateful and violent rhetoric. It is to say that conservatives have nothing to contribute to social meaning.

But our liberal friends are heading for disaster. The next social model must include everyone in the conversation, and that means a moral/cultural model that includes not just liberal discourse but moderate and conservative discourse as well.

By denying ordinary Americans the right to contribute to the cultural conversation, liberals are denying them the right to live lives of meaning.

When liberals deny the right to a life of meaning, there is only one thing to say. Liberal cultural hegemony is unjust, and it will not stand.

Who Knew? AZ Suspect Bush Hater

You gotta love our liberal friends at The New York Times. They spend a week spinning the notion that the suspect in the AZ shooting is a right-wing nutcase. Now, it turns out, in a long thumbsucker, that Loughner bought into all the liberal conspiracy stuff: 9/11 conspiracies and Bush hatred.

He became intrigued by antigovernment conspiracy theories, including that the Sept. 11 attacks were perpetrated by the government and that the country’s central banking system was enslaving its citizens. His anger would well up at the sight of President George W. Bush, or in discussing what he considered to be the nefarious designs of government.

Oh no! How could that be? How could a young high-school student get involved in all that wing-nut stuff? I'll tell you how. All the left-wing conspiracy stuff is pretty easy to find. Any ordinary high-school student would find it in the air. That's because, in the mid-2000s, it was swirling around in the mainstream media, and prominent Democrats were winking at it. Remember the premiere of Michael Moore's lefty Fahrenheit 9/11 in Washington DC? Prominent elected Democrats, including United States senators, went to that performance. No doubt mainstream TV hosts like John Stewart, Stephen Colbert, and Bill Maher were winking at the anti-Bush rhetoric--even extending to foaming anti-Bush rhetoric.

So now, after a week of wild speculation, The New York Times calmly states that Loughner was angry at Bush. Why, what a shock. I'd say that any teenager in the mid-2000s that did not pick up on the anti-Bush hysteria would have been a psycho, living in his own private world. Or he would have been a Rush baby that, by accident or by influence from some non-educator adult, had received a mild indoctrination in conservative politics.

I've said it before and I'll say it again. The next few years are going to be a perfect hell for our liberal friends. You see, they promised their clients, first of all the white working class, and now the expanded victim class of women and minorities, that by signing up with Democrats they would never have to suffer the challenge and stresses of ordinary adult life. They could have their benefit cake and eat it.

But now the great game of entitlement politics is hitting the buffers, as the Brits say, and the people that will suffer are the people that put their trust in liberals and Democrats.

The only thing we don't yet know is how these disappointed folks will express their disappointment, their fear, and their rage.

When Will Inflation Kick In?

Old hand Pat Buchanan chimes in today commending the president for tacking to the middle. Based on his record of bipartisan compromise since the election, including his Arizona speech, Pat rates the president "a survivor... with an almost Nixonian capacity for maneuver."

So that makes him a shoo-in for reelection, right?

Maybe not. The question is: when will inflation kick in after the enormous monetary stimulus of the last two years and the stimulus from "QE2" that began last fall? Jim Johnston from Investors Business Daily, quoting Milton Friedman, thinks that the president has got the calendar just right.

Six to nine months after an injection to the money supply, there is a short-term increase in economic activity. After 24 months, inflation appears and is persistent until money growth is slowed, another recession occurs, and 24 months pass before the inflation is abated.

If these lags are superimposed on the nation's political calendar, there is a disturbing conclusion.

A short-term increase in economic activity will occur before the 2012 presidential election, and a virulent inflation will occur after the votes are in.

Maybe. But I have a suspicion that the monetary easing already committed since the economy turned in early 2009 is going to get inflation going this year. So 2012 will be full of demands to know what the president is going to do about inflation.

All that means, of course, that making an inflation bet is not too late, even now. We are not yet well into a classic flight into real values. We are just in the early stages, where sophisticated people are still laughing at the stolid types that are buying coins and commodities.

Then there is real estate. I know, everyone "knows" that real estate is finished. But with the US government printing lots of dollars, it might not hurt to borrow some of them and pick up some deals. Remember Mr. Potter, the evil small-town banker. When everyone was losing their heads, crying sell, sell, sell, Mr. Potter was buying.

State Spending vs. Revenue

The Census Bureau is out with its data on state spending and revenue for FY 2009, the first year of the Great Recession. Now the numbers are up on usgovernmentspending.com. They make for pretty interesting reading. If you look at usgovernmentspending.com's 5-year chart of state spending, It looks like spending is heading on up, without a pause.

Actually, the numbers for 2009 are down from the usgovernmentspending.com "guesstimate", which shows that politicians are getting serious at last. Will we see significant spending cuts next year when the FY 2010 data come out? Will the politicians make usgovernmentspending's current "guesstimate" for 2010 look like reckless alarmism? We'll see.

The big story, of course, is in state revenue. Look at the following chart of state revenues.

What on earth is going on? How could state government revenue be cut in half in one year? I will tell you.

There is one number that dwarfs all the others. It is the $525 billion investment loss in state government retirement systems. That is what brings the state government revenue number down to $664 billion. Hopefully, of course, in 2010 the state government retirement systems will show a healthy investment gain. Hopefully.

If we discount the $0.5 trillion loss in state pensions, that means that the states were spending $1,330 billion against revenue of $1,189 billion. That's a deficit of a mere $141 billion. So that's all right.

The Liberal "Tell"

In poker, after you've mastered the odds, you graduate to "tells." That's the art of reading the emotional response of your opponents during the course of the game.

So that's why conservatives should thank liberals like Paul Krugman for the rather amateurish "tell" over the tragic Arizona shooting.

So you chaps really are scared by Sarah Palin and the Tea Party movement and the power of Fox News and talk radio. Why else would you chaps react like conspiracy theorists to the crazed outrage of a crazed mind?

But think of the opportunity that our liberal friends have given us. They have given conservative talk radio the chance to display the hypocrisy of the liberals, who use war metaphors all the time (why wouldn't they, given that politics is civil war by other means?). They have given Fox News the chance to present itself as measured and responsible. And they have given Sarah Palin a chance to broadcast a presidential fireside chat from her house in Wasilla, complete with a quote from Saint Ronald:

President Reagan said, “We must reject the idea that every time a law’s broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.”

Yep, liberals are telling us that they are really, really worried by Sarah Palin, the Tea Party movement, and the conservative media. You can "tell" from the beads of sweat on their foreheads.

Now that it is becoming pretty clear that the alleged assailant Jared Lee Loughner is a paranoid schizophrenic, the whole episode is starting to move towards a national conversation on mental illness and institutionalization. It might move on to the whole liberal health metaphor that substitutes for a sensible and practical ethics.

My interest is moving to the larger question of the combination of politicians and experts. The problem with modern psychology is that it has gotten too close to politics and government. That is why we have had the scandals of lobotomy, forced sterilization, and forced institutionalization. Too many moral decisions have been abdicated to the legal system.

Our modern society is a differentiated society. We like to differentiate between politics, economics, and moral/cultural questions. The record of the last 200 years shows pretty clearly that when politics and economics get too close together you get crony capitalism and government using the credit system for political purposes. When the political and moral/cultural sectors get too close you get the expert-led central administrative state where people start to use the political system to legislate their morality in the faces of people that disagree with them.

The question of what to do about seriously disturbed people is partly a political question, where violence is the issue, and partly a moral question, where potential help is the issue.

Sooner or later we must stop delegating moral and cultural questions to the political sector and accept the sacrifice that comes with responsibility.

You'll know that we are making progress from the reckless ravings of our liberal friends.

Learning from Tragedy

When tragedy strikes, people go for their standard templates. If you are a liberal, the problem is thunder on the right and the answer is gun control. If you are a conservative, the problem is the welfare state and the answer is smaller government.

As as conservative, my template looks for a failure in the expert-led centralized bureaucratic administrative welfare state. Yeah! How come nobody did something to stop this kid Jared Lee Loughner before he killed? It's not as if he hadn't been a problem and hadn't became a person of interest to a number of government bureaucracies.

The chaps at The New York Times today are wittering on about experts-this and experts-that: "Red Flags at a College, but Tied Hands," writes Benedict Carey.

“It wasn’t a case of ‘Gee, no one saw this coming,’ ” Dr. Borum said. “People saw it. But the question then was what do you do about it? Who do you call? The whole thing speaks to the need for some coordinated way to detect such threats.”

See what's coming here? We need a new administrative system of experts to detect and deal with the threat of a paranoid killer. Fully funded and credentialed, of course. Not to say pensioned.

But I wonder. I wonder about the limits of government to solve social problems. We are talking about the whole question of freedom.

The meaning of freedom, if it means anything, is that people have a right to make mistakes. We say that there should be no prior restraint on the actions of normal humans just because, according to scientists, they might be a problem. Liberals are big on this, and rightly so. They point to the sorry record of lunatic asylums, psychiatric hospitals, electroshock, lobotomies, and psycho-active drugs. If you are going to restrain a dangerous person, where do you draw the line?

There's another thing. When a paranoid person kills a national politician it is national news. Everybody demands that something be done. But how often does a paranoid kill a non-public figure? What are the numbers on that? And what could we actually do to reduce the incidence of killings by people with mental illness?

Of course, my template is that the bureaucratic method is not a good way to deal with these issues, because they are not a question of rules and tests and procedure. They are a question of social relations, and that means that they are moral and cultural questions. I believe we need to rediscover and restore a moral community in our "little platoons" that can deal with people at the edge of sanity, and reclaim such people back into the human community. I think that the institutionalization of modern people, starting in kindergarten or before, is a big question mark. What does it do to a human being to be incarcerated in bureaucratic government institutions right through their childhood, and then delivered to big business bureaucracies when they are adults?

You could say that in the modern era we don't socialize people, we bureaucratize them.

Any ideas on that, you experts? I know. More research is needed.