PrintAugust 24, 2010
What Liberals Should Have Known
Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, has changed his mind about Fannie and Freddie, the government-sponsored home mortgage giants. According to Larry Kudlow, Rep. Frank is ready to send Fannie to a death panel:
"I hope by next year we'll have abolished Fannie and Freddie," [Frank] said. Remarkable. And he went on to say that "it was a great mistake to push lower-income people into housing they couldn't afford and couldn't really handle once they had it." He then added, "I had been too sanguine about Fannie and Freddie."
I suppose we should all offer forgiveness to Barney, as the generous Kudlow does. How nice that he has realized his error, now that we've had the worst banking crisis since the Great Depression. Now that millions of Americans have lost their homes. Now that we've passed the stupid bureaucratic finance "reform" bill that did nothing about Fannie and Freddie. Perhaps now Barney will tell his political chums to stop calling everyone a racist for opposing government housing subsidies.
Is Rep. "Too Sanguine" Frank now telling us that he didn't know that government-sponsored enterprises spewing out government-subsidized credit were a real risk for a credit meltdown?
Either way, the chap who is parading himself before the world as chairman of the committee with responsibility for the financial markets should have known. It's not as if we haven't seen this sort of thing before, starting with the South Sea Company and the South Sea Bubble of 1720. Guess what: the South Sea Company was a government-sponsored enterprise, too.
Here's another fine mess that liberals should have known about: ObamaCare. Back in January, President Obama was confidently telling Democrats that their tough votes for ObamaCare would pay off in the fall. Bill Clinton even had the effrontery to suggest that Democrats lost the 1994 midterms because they failed to pass HillaryCare. Come on, Mr. President. I was there in 1994. I remember exactly where I was driving in August 1994 when I heard an NPR reporter marvel that the majority of Americans were against HillaryCare because they thought it would raise their health care costs. I'd been waiting for that moment all year.
Now, all of a sudden, the Dems have woken up to the fact that the fall payoff ain't gonna happen.
But then the elected Democrats should have known that. If they were reading their policy analyst stuff like I was, they would know about Irving Kristol's Law of Social Programs. It simply says that if you want to help the poor, you have to deal the middle class in -- as in Social Security and Medicare. On this view, HillaryCare and ObamaCare are non-starters because they are too late. The middle class already has good health care. It's too late to deal them in.
Back in 1994, the middle class took a look at HillaryCare and decided it was going to mess up their health care. So it did the practical thing and sent an extra 54 Republicans to the House of Representatives that year. Here is how it looks over at US Stuck on Stupid. (You can make your own custom chart here.)
UsStuckOnStupid.com is a website that chronicles the economic policies of the disastrous decade from 1929 to 1939, "a decade which will live -- in stupidity." We are hoping that the president and the congressional Democrats don't force us to start a chronicle for this decade.
What should our liberal friends learn if they wish to avoid repeating the lesson of 1994? There is a clue in a recent Wall Street Journal article. It is called "The End of Management" by Alan Murray. Here's the subhead: "Corporate bureaucracy is becoming obsolete. Why managers should act like venture capitalists." The problem for corporations today is that all the traditional bureaucratic stuff -- listening to customers, studying market trends -- doesn't help when you find that you "missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products." By then, it's too late.
But our liberal friends, just at the moment that corporations are abandoning the bureaucratic model, want to bury the financial system and the health care system in the mother of all bureaucracies. They should have known that was a stupid thing to do.
In An American Manifesto, I am developing the idea that bureaucracy is, by its nature, oppressive and anti-freedom. Because in my view, the whole point of bureaucracy is to order other people around. In the America of the future, we will want to reduce the incidence and the scope of bureaucracy. You cannot have both bureaucracy and freedom. You have to choose.
It is starting to look as though, last winter, liberals chose oblivion.
Christopher Chantrill is a frequent contributor to American Thinker. See his roadtothemiddleclass.com and usgovernmentspending.com. At americanmanifesto.org he is blogging and writing An American Manifesto: Life After Liberalism.
