July 22, 2009

National Bankruptcy - Lessons From The Past

People have short attention spans. It was probably always true, but it is especially so in today's fast-paced Internet age. People are daily bombarded with non-static external stimuli - television, radio, text messages, cell phones, the Internet. The ability to keep up is dependent on weeding out information and focusing on items of core importance. This is not a symptom of a degrading mental capacity nationwide, rather it's a sign that people have adapted to the pace of today's daily life as has been required.

For most Americans, aggravating as it is to those of us who focus on politics and national interest, this means filtering out the daily flow of information involving political events. It's not important to the day-to-day lives of most Americans. That works as a positive for politicians of every stripe, who seemingly can get away with virtually anything and still be re-elected or even elected (like the President). People's attention focuses on those issues only during a narrow election cycle window that typically doesn't even include the primaries. And when it comes into focus, it's easy enough to throw up an array of interpretations that are at odds with the truth and obscure people's understanding enough to get re-elected (like Ayers, et. al.).

So it comes as no surprise that lessons from the distant past are not learned by the people or by the politicians in charge. The public doesn't have time for it and the politicians don't have a need for it. That's why they can recycle the Keynesian arguments in pretty new packaging and make it seem innovative and a break from the past. People don't have time to fact check this stuff, and the 'journalistic' press typically won't do it for them because they (1) love the Democrats and BELIEVE in them, particularly Obama and (2) they suffer from the same myopic problem of attention span as everyone else, plus they are apparently afflicted with a good dose of sloth, too busy parroting what someone else has said to actually do investigative work. Maybe it's just budgetary constraints, I can't say for certain.

But there are lessons to be learned from the past, that have clearly been missed. Case in point back in 1975, New York city was on the verge of bankruptcy. Milton Friedman wrote in Free To Choose;

New York City is the most dramatic example in the United States of trying to do good through government programs. New York is the most welfare-oriented community in the United States. Spending by the city government is larger relative to it's population than any other city in the United States - double that in Chicago. The philosophy that guided the city was expressed by Mayor Robert Wagner in his 1965 budget message: "I do not propose to permit our fiscal problems to set the limits of our commitments to meet the essential needs of the people of the city." Wagner and his successors proceeded to interpret the "essential needs" very broadly indeed. But more money, more programs, more taxes didn't work. They led to financial catastrophe without "meeting the essential needs of the people", even on a narrow interpretation, let alone Wagner's. Bankruptcy was prevented only by assistance from the federal government and the State of New York, in return for which New York City surrendered control over it's affairs, becoming a closely supervised ward of the state and federal governments.

New Yorkers naturally sought to blame outside forces for their problem, but Ken Autella wrote in a recent book, New York "was not compelled to to create a vast municipal hospital or City University system, to continue free tuition, institute open enrollment, ignore budget limitations, impose the steepest taxes in the nation, borrow beyond its means, subsidize middle-income housing, continue rigid rent controls, reward municipal workers with lush pension, pay and fringe benefits."

He quips, "Goaded by liberalism's compassion and ideological commitment to the redistribution of wealth, New Yorker officials helped redistribute much of the tax base and thousands of jobs out of New York."

Anyone paying attention to that situation that occurred back in 1975, would know the obvious lessons encompassed in those 3 short paragraphs. California didn't learn the lesson and got themselves as a state into the same trouble. The President, being not much older than myself (he's closing in on 48) might not be aware of the events that transpired in NYC in the late 1960's and the 1970's. But he certainly either hasn't seen or hasn't learned the lesson. He talked about much of the same time-worn, disproven policies that NYC was trying decades ago and failed. He specifically mentioned spreading around the wealth to Joe the plumber during the election campaign. If he wasn't aware of the lessons from NYC, surely he must of seen the same problem being faced in California today? Could he not learn from that scenario instead? Apparently not.

If he weren't ruining the country, the President could be forgiven for his blind ideological allegiance to a socialist agenda. But he is ruining the country and should not be forgiven. He should be challenged.

He SHOULD have been challenged by the press during the election campaign but we already know why he wasn't (see paragraph 3 above in case you've already filtered that out). Should they be forgiven for dereliction of duty? Absolutely not.

He SHOULD have been challenged by voters but we know why he wasn't (paragraph 2). Should they be forgiven? Well, no. Unfortunately they require some of the blame for the current fiscal nightmare that is snowballing under the Obama administration. When the country goes bankrupt, who will be there to bail out the USA? NYC had an out, America's only possible bailout could come from China. Is that what people want: "in return for which New York City surrendered control over it's affairs, becoming a closely supervised ward of the state and federal governments." Substitute New York City for the US and 'state and federal ' with Chinese and see how that reads.

What can be done? Can Obama be rehabilitated to fiscal sanity? Doubtful. Can the press be rehabilitated to do their jobs properly? Doubtful. That leaves only the American public to come to their senses before it's too late. 2010 may be meaningful, but that may be too late. Realize the fierce urgency of now to borrow a phrase, and kill any effort towards cap and trade, and towards nationalizing health care before they set the country back decades and put it on an unstable bankruptcy-inducing path.

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