Speaker Nancy Pelosi calls the vote to approve the stimulus bill President Obama will sign this week “historic and transformational,” and I can imagine no other way to justify those words than to think she’s happy government has finally grown enough to pay for the things she’d like to see it do. What is so historic about it, other than it is the largest spending bill in history? Why is it transformational, other than it pushes government to unprecedented levels? Government intervention, especially to this degree, should be a course of last resort, not something that almost invites celebratory language. The economic crisis should be a cause for shame– an opportunity for reflection and regret at the way we’ve lived the past two decades. The economy we knew heretofore was built on fake wealth, easy money, and consumption like there was no tomorrow. (We actually had a negative savings rate for the first time in our history.) But instead of a little correction, a little realignment, a little pain, what is the solution? Let’s borrow billions of dollars from China and our kids and grandkids so we can reinflate the bubble and get on with our bloated lives. It’s almost as if happiness is guaranteed in the Constitution!
So now, businesses are not allowed to fail. Why should they be? According to President Obama in his first press conference last week, the newly unemployed of Elkhart, Indiana “have no idea what to do or who to turn to.” With temporary unemployment, suddenly people are rendered helpless. Alas, Obama declares, “the federal government is the only entity left with the resources to jolt our economy back into life.”
So maybe this is what Nancy Pelosi meant by “transformational”– a new orientation toward government as sugar daddy. I’m trying hard to resist dropping the word “entitlement,” but such, I think, is exactly what the new stimulus paradigm fosters. No citizen or business can experience the consequences of their unwise actions– instead, we must have lower credit standards (as if that’s going to force banks to lend again), we must continue to prop up the failed business model of Detroit, we can’t let the market choose winners and losers– we must bailout Amtrak. We might as well subsidize a typewriter factory. But you see, that will give the typewriter factory the impression that it is entitled to exist, whether it really contributes to the economy or not.
Paternalistic parents create coddled, soft children. No child ever truly grows up without having to deal with the consequences of his or her actions. At the risk of resorting to platitudes, a robust society is created out of the natural conditions and choices of life. I hope it is apparent by now that I think this whole deal is better analyzed morally rather than economically.
I do not envy the position our new president is in. I have no doubt he’s trying to govern the best he can. Yet I cannot shake the suspicion that certain politicians are using the crisis as a (not-so-) Trojan horse to enact expansive programs –otherwise they wouldn’t be using such telling language.