There are truths and there are truths.
Rush Limbaugh likes to cite his “Undeniable Truths of Life” which contain such gems as Undeniable Truth #24: “Feminism was established so as to allow unattractive women access to the mainstream of society.“
That’s lovely and provocative, but it’s irrelevant, regardless of whether or not it’s true. It can certainly provoke some interesting discussions, but it doesn’t move the ball forward in terms of actually accomplishing anything constructive.
Indeed, the truths that neither party has the courage to confront are the ones that stand in the way of getting the United States back on track. Since I now consider myself staunchly “post-partisan,” I feel far more comfortable offering my own unhumble opinions as to how the world ought to work. My assessment of the situation is based on the following Stallionic Axioms, which, ideally, should enrage partisans of any stripe.
Stallionic Axiom #1: The economy of the United States is not a product of the government of the United States.
That is not to say that the government has no effect or impact on the economy, but it is true that government is a very blunt instrument in how it can impact economic activity. Stimulus spending that’s supposed to stimulate usually doesn’t, and lower taxes, at this point, don’t really make that much of a difference. Indeed, regardless of the tax rate, the amount of GDP collected by the government has been remarkably stable over the years, hovering at around 20%. Who pays that 20% shifts somewhat over time, but the reality is that the market finds its way around the more egregious extremes of government interference, regardless of who is in power.
That’s why I tune out very quickly when Obama defenders talk about the “mess he inherited from Bush.” People who repeat that kind of tripe obviously don’t understand what mess they’re talking about. How did Bush create it? How could he have created it if he had tried? The truth is that Bush didn’t cause this recession, whether by action or inaction. It was caused by a worldwide speculation bubble in housing prices, something that Bush would have been incapable of engineering even if he’d wanted to. Did Bush force banks in the UK to start offering loans at 125% of equity? The excesses of the market did this, just as they did during the dot com bubble, and just as they have done since the beginning of time. Could government have been more helpful in containing it? Maybe in the margins, but trying to contain speculation through intrusive regulation usually causes just as many problems as it supposedly solves.
I’m equally disgusted, however, with Republicans who gleefully blame Obama’s “socialism” for digging our economic hole. Folks, Obama’s signature accomplishment – health care reform – doesn’t start hitting your pocketbook until next year. Since he’s agreed – albeit very reluctantly – to extending the Bush tax rates for another two years, what policy, exactly, has Obama enacted that has wreaked such economic havoc? The fact is that the market has to correct the excesses of the speculation bubble, and since the bubble was pretty darn big, it’s still going to take time to work itself out. Conspiracy theorists will be very disappointed to discover that there’s really not a whole lot the government can do on that score.
The fact is that government is, by and large, inefficient and ill-equipped to shield us from the buffetings of the marketplace. It would be nice if both parties were willing to openly acknowledge this, because both parties have managed to get the public to primarily judge them on economic circumstances that are almost entirely out of their control.
Consequently, corrupt presidents like Bill Clinton get to ride good economic times to victory, while decent men like George H.W. Bush are maligned because the happen to hold office during the wrong end of the business cycle. Neither one deserves the praise or opprobrium they received. For example, can you cite a single economic policy of the Clinton administration that was directly linked to the prosperity of the 1990s? Good luck, because after the election of 1994, Clinton stopped making economic policy and focused on things like V-chips and school uniforms. But it didn’t matter – the dot com bubble fueled our rapid expansion, and Clinton took all the credit, when, in fact, it was his Vice President who created the Internet.
Yeah, I’m post-partisan, but I still loathe Clinton, primarily because he knew Stallionic Axiom #1 better than anyone and he shamelessly told the masses otherwise. When he told us “it’s the economy, stupid,” very few people noticed that they were the ones he was describing with his final word.
The consequences of Stallionic Axiom #1 are profound in terms of governance, however, because they lead to Stallionic Axiom #1A:
Government tax revenue is a product of the economy, not government.
In a recession, you can jack the rates up to high heaven if you want to, but you’re not going to get a lot more money, because there’s not enough economic activity to produce it. When a store is going under, you can’t save it by jacking up your prices and driving away whatever customers you may still have.
All of government’s control over revenue comes on the spending side. They can’t really control how much they take in, but they have precise control over how much they dish out.
Or do they? To learn the answer, prepare yourselves for Stallion Axiom #2, coming soon to a blog near you.