“The previous government understood that principle well enough – at least, well enough to understand that giving disinformation to the people was every bit as empowering. For the government.”

Couldn’t agree more which is why I put “informed” in quotes when I wrote it. So we must ask ourselves why the disinformation worked, whether the source was FDR or GWB. Maybe education?

The education of the founding fathers, born of many hours of study and reflection, lead them to found the greatest republic in the history of man. So, why do so many adults not desire to emulate their example in the education of our youth? Americans seem to know more about the science of making excuses than the science of government.

TomB wrote:

“GB, since we’re dealing quotes apropos of this question I’ll just give Mencken’s answer: “Democracy is the theory that the people know what they want, and deserve to get it good and hard.””

The American people will learn the hard way as their expectations get smashed beyond illusion. In other words, the “there is a program for that” or “there is a war for that”, mentalities converge to the same limit that government excesses always seem to converge: tyranny and corruption. The challenge comes in rebuilding, assuming of course, we have the materials and builders.

“If an ‘informed’ people’ decide to give excessive energy to government, what can be done?”

GB, since we’re dealing quotes apropos of this question I’ll just give Mencken’s answer: “Democracy is the theory that the people know what they want, and deserve to get it good and hard.”

Sounds about right to me.

No argument here… In my mind, GWB definitely was undoubtedly a proponent of big government as evidenced by his profligate spending and actions such as the creation of the enormous bureaucracy mess called the Department of Homeland Security. I cannot say with certainty, given GWB’s background and education, whether he made decisions with the preservation of our republic foremost among his concerns.

TomB, I’m not sure about the quote you mentioned but here is another one I like:

“Say… whether peace is best preserved by giving energy to the government, or information to the people. This last is the most certain and the most legitimate form of government”.
-Thomas Jefferson

The big question in my mind is this: If an “informed” people decide to give excessive energy to government, what can be done? In my mind, given the current framework, the answer is very little for the time being…

“After the financial collapse started, proponents of government expansion saw their chance and pounced.”

Wait a minute, it wasn’t the usual “proponents of government expansion” suspects that pounced, it was George W. Bush. AIG, Fannie, Freddie … you name it, he started it.

The sad fact is that when times are bad proponents of gov’t expansion of course have their chance. But that when times are good they have their chance too … because the times are good. Witness, again, Bush and the prescription medication program.

It’s funny that it doesn’t seem to be known who said that democracies will succeed only until its citizens realize that they can vote themselves their national wealth, but it’s still a great one. Maybe epitaph-great even.

The myth of monotonically increasing home prices is a subset of a much greater myth: The belief, of many Americans, that they are entitled to the guarantee of ever-expanding wealth be it in their homes, stocks, etc… After all, Americans didnt’t just stop saving for a reason. In retrospect, consider how ridiculous it was to be making financial predictions out 10, 20 , or 30 years!

After the financial collapse started, proponents of government expansion saw their chance and pounced. Americans stood by powerless. With the exhaustion of what little savings they had left along with the dwindling values of thier assets, they happily traded away another portion of one of their remaining assets: liberty.

“…if we are universally vicious and debauched in our manners, though the form of our Constitution carries the face of the most exalted freedom, we shall in reality be the most abject slaves.”
-Samuel Adams

What must be done is purge all ‘democratic’ qualities out of the republic. It is precisely this democratism in capitalism that renders impossible the operation of a free market, where people would willingly accept whatever sacrifices would be necessary to amend any arising crises rather than passing the buck to later generations. It could be that democracy (i.e the entitlement ethos) and the federal reserve (the only banking system that can facilitate these entitlements) are entwined.

DONT PUT FORWARD A TAX ON THE REAL BANKING INDUSTRY: SAVINGS, CHECKING, MORTGAGES, CREDIT CARDS, CAR LOANS, MUTUAL FUNDS

PUT A TRANSACTION TAX ON EVERY HEDGE, DERIVATIVE, FUTURES, SWAPS, ETC…AND MAKE IT PAYABLE REGARDLESS OF WHETHER THE TRANSACTION IS TRADED IN THE USA OR OVERSEAS BOURSE. IF THEY WANT THIS SHADOW BANKING THEN MAKE IT TRANSPARENT AND TAX IT PERMANENTLY.

To deliver McCain/Palin their Oct 10th surprise, “speculators” (read big money-left) drove up the price of oil, and removed corn from the world’s food market.

This unintended detonator ignited the housing bubble, starting with the nation’s farms (the corn fed their animals, the price of transportation bled them, and petrolium makes their fertilizer – they were the first to begin defaulting on bank loans). Then it cascaded worldwide.

(We later found out that Goldman Sachs had computers in place that could manipulate commodities markets worldwide.)

US politicians scrambled to ship billions overseas to stay out of jail, then were relieved to find that the expected backlash never arrived, because politicians worldwide were using the same scams to enrich themselves.

The global warming hype has nicely made the whole issue recede into the distance, and the scams continue, as the supposedly “rich” countries dangle the “climate-guilt payments” in front of the little countries.

PJB, your entire article above is predicated on the assumption that the administration wishes to avoid collapse of the US financial structure.

Reality check.

What is inevitable is that the US (and most countries in western civilization) will find some way to get out from under the significant debt loads that they have created.

This could be an outright default, but it probably won’t be. As long as most US national debt is held in dollar denominated bonds, then the most likely scenario will be higher taxes combined with massive quantitative easing (printing money).

Recent history in Argentina and Russia suggests that countries default in situation where they can’t inflate the debt away (because the debt is denominated in some foreign currency).

And I believe that you are right to suggest that the current fiscal situation (and foreign policy situation and entitlement situation) calls into question liberal democracy as a belief system. If I were a guerilla or national leader in the developing world, why would I choose to believe in a system of government whose end result is inevitable financial ruin?