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Scapegoats for Keynesianism

Does an ignorant, intolerant right prevent Washington from working miracles?

Near the end of July, the Small Wars Journal published an article that described the possibilities for, as the title put it, “Full-Spectrum Operations in the Homeland”: war against American citizens, in the United States, waged by the U.S. military. The authors, a retired army officer with a recent history Ph.D. and a history professor with a too-perfect interest “in the field of Lincoln studies,” laid out the scenario that would lead to their case-study future war:

The Great Recession of the early twenty-first century lasts far longer than anyone anticipated. After a change in control of the White House and Congress in 2012, the governing party cuts off all funding that had been dedicated to boosting the economy or toward relief. The United States economy has flatlined, much like Japan’s in the 1990s, for the better part of a decade. By 2016, the economy shows signs of reawakening, but the middle and lower-middle classes have yet to experience much in the way of job growth or pay raises. Unemployment continues to hover perilously close to double digits, small businesses cannot meet bankers’ terms to borrow money, and taxes on the middle class remain relatively high. A high-profile and vocal minority has directed the public’s fear and frustration at nonwhites and immigrants. After almost ten years of race-baiting and immigrant-bashing by right-wing demagogues, nearly one in five Americans reports being vehemently opposed to immigration, legal or illegal, and even U.S.-born nonwhites have become occasional targets for mobs of angry whites.

As a predictable result, “an extremist militia motivated by the goals of the ‘tea party’ movement takes over the government of Darlington, South Carolina,” and the fight is on.

The authors are being cute here since Darlington is where the Confederacy got its first military volunteers: our new civil war begins in the cradle of the old one. But the choice holds. South Carolina is still known for its vicious right-wing population, which rages against all immigration, legal or illegal, and recently elected the daughter of Punjabi Sikhs to the governor’s office.

This flawlessly obtuse scenario misfires with almost every syllable, but one assumption stands out as particularly silly. In the long economic future-doldrums described in academic fairy tales, persistent crisis is caused by political obstruction and a withdrawal of bureaucratic intervention. Economies don’t grow because they are denied their mother’s milk, the wisdom of state planners. Without legislative nurturing, business withers and thriving enterprises like Solyndra and General Motors slip away toward insolvency. Only government checks create prosperity. Take them away, and the economy flatlines.

The authors compare the struggle of this hypothetical austerity-driven America to Japan, where government debt is well over two hundred percent of GDP and the “lost decade” has marched arm and arm with frantic state intervention. If only the Japanese government had been willing to spend some money, dear reader, their country would already be prosperous again. Who knew that Japan had its own share of teabaggers to obstruct progress and prevent all stimulus spending? Government is invariably rational, effective, wise, and morally decent. If something is broken, it must be because some fool wouldn’t let the state fix it.

Missing the Recipe

The historian Thomas Haskell has described the significance of “recipe knowledge”: if you do A, B, and C, in that order, then D will result. Recipe knowledge links facts to the future. Pass this stimulus bill, and unemployment will quickly fall below 6 percent. Invade this country, and a culture of freedom will blossom in the Middle East. Require everyone to buy health insurance, and have government subsidize the resulting market, and premiums will fall.

As the examples suggest, the American political class has not the slightest hint of recipe knowledge. They have the opposite, as if someone wrote a cookbook for people who want to start with frosted cake and turn it into burnt flour. They not only can’t connect acts and results, but go the next step and assert forecasts that slam against the obvious reality of their foundational premises. A hundred million Americans receive federal transfer payments, not counting Medicare and Social Security recipients, but somehow the economy isn’t thriving. So what we need is to get more people on food stamps, since those are a powerful driver of sustainable prosperity. Why isn’t this working? Is it because of right-wing obstruction?

In her book The March of Folly, Barbara Tuchman described the process of elite “self-hypnosis” in which a powerful status group comes to believe its own narrative fantasies. We have a spectacular case of it, and it has spread from our political class to academia and the news media. And so the New York Times reports, in an August 5 story, on “Why D.C. is Doing So Well,” that they see no connection at all between the growth of federal power and the rising fortunes of the capital city. The prosperity of the District of Columbia, writes bureau chief David Leonhardt, is “not all — or even mostly — about rent-seeking. The region has two legitimate economic lessons to offer the rest of the country.” Namely? “The narrower of the two is a reminder that, for all its unpopularity, a Keynesian response to an economic crisis really can make a difference.”

Why is the imperial city thriving while the provinces wilt? Because of the wisdom of the rulers in the imperial city, who have the right prescription for the vitality of the provinces. They just haven’t been allowed to apply the medicine fully on the periphery yet, while the wisdom of the center allowed it to benefit immediately. But no advantages were taken, for sure.

As the recipe knowledge of the political class fails, he kind of people who have doctorates and write for policy journals construct overwrought stories about a future in which economic crisis persists because extremists capture government and switch off its benevolent wisdom. (Then the toothless rural southerners pull their Fort Sumter act again, obviously.) To borrow from the left to describe the left, an increasingly frantic hegemonic performance labors to cover the failures of increasingly hapless power. A federal government that spends close to $4 trillion a year is sinking into the morass of its own uselessness and mediocrity, so anyone who questions its decency and utility must be tarred as crazy with a growing insistence. If the political class and its retainers knew what they were doing, they would speak with confidence, and we wouldn’t be seeing scholarly articles about future domestic war.

Die, Grandma, Die

And so Paul Ryan is the most terrifying Republican political candidate since Barry Goldwater nuked that poor little girl who was just trying to count her flower petals in peace. At one point last week, the top five opinion pieces on the Washington Post‘s website all solemnly warned in some way or another that Ryan was hiding under your sick grandmother’s bed with a straight razor and a sick smile. A typical headline was “Paul Ryan: Cruel, Not Courageous.” But at least he hasn’t killed anybody’s wife yet.

Ryan isn’t any of that. He’s smart, he’s personable, and he looked right into Barack Obama’s eyes while he compared the president to Bernie Madoff, but he also voted for TARP and Medicare Part D and every aspect of every war that anyone proposed to him. The American news media have somehow made a fiery near-anarchist out of a guy who has a plan to balance the federal budget within 30 years.

The unmoored rage of the liberal establishment is the product of a well-earned status insecurity, as industrial-era big government faces its post-industrial denouement. The Central Bureau for the Regulation and Subsidization of Widgets is blinking, confused, in the strange light of technological disintermediation. Their recipe knowledge stalled in 1936, and they’re beginning to realize it.

But they still have the place and the status. Barack Obama has seen the future, and it’s the place where GM and the UAW build government-subsidized cars at big factories forever, wrapped tightly in the tender arms of the National Labor Relations Act: centralized, industrialized, unionized, top-down, and endlessly bureaucratized, frozen miserably in time. That vision is too dull and irrelevant to be sustained: like a dead tree, it’s just going to fall down in a storm, someday.

Chris Bray served as an infrantryman in the peacetime Army.



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