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Commentary by Robert Tracinski
1. The New New Deal It looks as if we are going to have to relive all of the mistakes of the 20th century, one more time—let's hope it is one last time—before we relearn the superiority of the free market and the disastrous consequences of statism.
Thus, Barack Obama has announced plans for up to $700 billion in New-Deal-style "public works" boondoggles, running a trillion-dollar deficit in his first year in office. It is a good old-fashioned Keynesian "stimulus" based on the premise that you can revive the economy by spreading paper money around at random.
The article below notes, however, that even under Keynes's failed theory, the amount of Obama's spending is not enough to actually stimulate the economy, just as it is now acknowledged that the New Deal's public works spending did not revive the economy. So naturally Columbia University historian Alan Brinkley recommends that Obama spend even more of our money.
"Was the New Deal Too Small?" Alexandra Marks, Christian Science Monitor, December 9 In announcing the biggest public works spending in 50 years, President-elect Obama takes a page from the Great Depression that is both model and cautionary tale….
The infrastructure component of the still-evolving Obama economic-recovery plan would inject billions of dollars into repairing old roads and bridges and constructing new ones, upgrading the nation's schools with new technology, and making public buildings energy efficient.
When Obama announced those "few key parts" of his plan on Saturday, he called them "the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s." That's when the federal government invested $25 billion and built more than 41,000 miles of roads, highways and bridges over a 20-year period. In today's dollars, that would be the equivalent of $197 billion investment.
How much Obama will spend on infrastructure is unknown. His economic team is still "crunching the numbers," in his words, on the economic-recovery package, which would include far more than infrastructure and could end up costing $700 billion or more….
Still, some critics point to the Depression and note that infrastructure spending did not create enough of a stimulus to revitalize the economy. It took World War II to get it back on track. Depression historians contend that's because the Roosevelt administration didn't spend enough.
"There was a kind of crude sense that generating economic activity was what you needed to do to get the economy going," says Alan Brinkley, a professor of history at Columbia University. "But they didn't spend nearly enough. They were constrained by all kinds of traditional ideas about balanced budgets and austerity."…
The consensus is "bad theory and bad evidence," says Robert Higgs, a senior fellow at the Independent Institute, a libertarian think tank in Oakland, Calif. Government spending in the 1930s crowded out potential private investment, he says.
Government infrastructure projects "are inherently wasteful because they are designed with political objectives in mind," he says "The [Works Progress Administration], which was probably the major New Deal infrastructure building program, was an enormous vote-buying scheme for Democrats."
2. The Return of the Old Left When I looked at the news last night, I could hardly believe my eyes: in Chicago, there is an old-fashioned factory sit-in, the kind of union protest we read about in history books but did not expect ever to see again in our lifetimes. This clinches it: the Old Left—the left of thuggish industrial labor unions, central planning, and populist demagogues openly shaking down corporations on behalf of "the workers"—is trying to come back.
The story below notes the historical anomaly of a union tactic that hasn't been seen much since the 1930s, and it discusses Illinois Governor Rod Blagojevich's Bonnie-and-Clyde-style bank raid against Bank of America. In the middle of a financial crisis caused by banks making too many loans to unsound enterprises, Blagojevich wants to force a bank to make a loan to an unsound enterprise.
Good thing he's going to jail. (See item #3 below.)
Blagojevich may have been neutralized by the FBI, but another product of Chicago politics, Barack Obama, is now going to be president. And true to his rabble-rousing "community organizer" roots, he is encouraging the factory sit-in.
"Governor Supports Workers at Factory," Kari Lydersen, Washington Post, December 9 Workers occupying a Chicago factory that closed abruptly last week gained a significant political ally Monday in their fight to receive back benefits, when Illinois Gov. Rod Blagojevich (D) ordered state agencies to stop doing business with Bank of America until it uses some of its federal bailout money to keep the factory open.
The standoff at Republic Windows & Doors, which began Friday, has been a throwback to tactics hardly seen since the 1930s that labor experts and union leaders say may become more common if the economy continues its downturn.
More than 200 unionized employees say they will not allow Republic or its creditor, Bank of America, to remove equipment from the factory until they get severance and vacation pay they are owed. Their union alleges that Republic violated federal law by giving its workers only three days' notice before shutting down. Workers were told the company was closing because Bank of America did not extend it enough credit to keep operating.
The sit-in has garnered support from a number of Illinois Democrats, including President-elect Barack Obama. "I think they're absolutely right," Obama said Sunday, adding: "What's happening to them is reflective of what's happening across this economy. . . . These workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments."…
Bank of America said in a statement, "We agree with the statements of public officials that Republic Windows and Doors should do all it can to honor its obligations to its employees," but added that the bank has "provided the maximum amount of funding we can."
3. The Chicago Way For some strange reason, Chicago seems to be an enclave in which the Old Left was never really killed off, and from which it is now re-emerging. And with the Old Left comes—as it always must—a culture of deep-seated, endemic political corruption.
Hence the news that Illinois Governor Rod Blagojevich and his chief of staff have been taken into custody by the FBI and charged with—get this—selling a US Senate seat to the highest bidder, along with other depredations that are astonishing in their scope and brazenness.
This is the normal flip-side of the Old Left. Having relentlessly schemed to expand the power of government, Old Left politicians then find that this power has enormous value, which they can't resist taking advantage of. Or as Blagojevic put it, in a telephone conversation caught by an FBI wiretap, "It's a 'bleeping' valuable thing. You just don't give it away for nothing."
"Prosecutor: Blagojevich Engaged in 'Political Corruption Crime Spree'," FoxNews.com, December 9 "He has been arrested in the middle of what we can only describe as a political corruption crime spree," Fitzgerald said in a news conference to announce the charges against the governor and his chief of staff. "This is a sad day for government. It's a very sad day for Illinois government. Governor Blagojevich has taken us to a truly new low."…
The series of allegations say that Blagojevich and Harris tried to sell President-elect Barack Obama's vacated Senate seat to the highest bidder. Fitzgerald quoted Blagojevich recorded during court-authorized wiretaps as saying, "It's a 'bleeping' valuable thing. You just don't give it away for nothing."
Fitzgerald said no allegations were being made that Obama was aware of any alleged scheming by Blagojevich.
The prosecutor added that the two men allegedly schemed with previously convicted defendants Antonin Rezko, Stuart Levine, Ali Ata and others to arrange financial benefits in exchange for appointments to state boards and commissions, state employment, state contracts and access to state funds.
The charges also allege that Blagojevich tried to influence the composition of The Chicago Tribune editorial board in exchange for state aid to the Tribune Company, which owns the newspaper.
Fitzgerald said Blagojevich was recorded in wiretaps as saying, "Fire all those 'bleeping' people, get them the bleep out of there and get us some support."…
In an earlier statement Fitzgerald said, "Blagojevich put a for sale sign on the naming of a United States senator; involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism."…
Illinois Democratic Sen. Dick Durbin said the state Legislature should call a special election to fill Obama's seat rather than allow Blagojevich to appoint his successor.
4. Old Left Versus New If the Old Left is trying to make a comeback, what will happen to the New Left, the left of hippies and environmentalism and neo-primitivism? Partly, the Old Left and New Left are making an accommodation; much of Obama's massive "public works" proposal has a "green" twist. But partly the revived Old Left will compete with the New Left.
National Review Online, for example, notes a little-reported aspect of the negotiations over the auto industry bailout: an Old Left versus New Left tussle between the Michigan and California congressional delegations. It is a conflict within "a party once dominated by blue-collar union interests in the Midwest, but that is now run by upper-income coastal greens." The Michigan contingent wants to save old-fashioned heavy industry, while the California contingent wants to suffocate it under environmentalist restrictions.
That conflict is not just happening in the United States. The article below describes a rebellion against global warming regulations in Germany, where local leaders are demanding that Chancellor Angela Merkel scrap a new European Union energy rationing treaty in order to save German heavy industry. I found this article by way of Benny Peiser's CCNet, and he provided the English translation I use below.
"Merkel under Pressure: German States Call for Reversal of Climate Policy," translated by Benny Peiser, Handelsblatt, December 8 Massive resistance is growing in Germany against the EU's energy and climate package which Chancellor Angela Merkel, as well as the other heads of state and government, intend to decide at the weekend in Brussels. German federal states run by the governing Christian Democrats are vehemently calling for significant corrections of the current mode of climate politics. The view is expressed ever more strongly that companies and industries should not be burdened with additional costs in face of the economic downturn.
"The management of the global economic crisis must now be given priority also in the European Union," Jürgen Rüttgers (CDU), the North-Rhine-Westphalian Prime Minister demands. Above all, the EU's emissions trading scheme should not be allowed to undermine the competitiveness of enterprises, the Prime Ministers of Bavaria, Lower Saxony, Saarland, Saxonia as well as the Hessian Finance Minister are demanding.
For the chancellor, who spoke with the French President Nicolas Sarkozy about the topic on Sunday, the demand by the federal states is not binding. However, as leader of the ruling Christian Democrats, Angela Merkel can ill-afford to ignore such a united front of Prime Ministers.
5. "Obama Derangement Syndrome" I've been aware for a little bit of a fringe movement on the right that is trying to claim that Barack Obama is not technically a "natural" citizen of the United States and is therefore ineligible to become president.
Below, David Horowitz takes on this movement and gets close to naming what I think is its essence: an attempt to overthrow an unpleasant election result by trumping up a reason to claim that it is "illegitimate." Horowitz is right that this implies a refusal to accept representative government itself, and it is a prescription for chaos.
This is what the left did with George W. Bush, and it's good to see that the mainstream of the right does not seem inclined to emulate this particular form of madness.
"Obama Derangement Syndrome," David Horowitz, National Review Online, December 8 The continuing efforts of a fringe group of conservatives to deny Obama his victory and to lay the basis for the claim that he is not a legitimate president are embarrassing and destructive. The fact that these efforts are being led by Alan Keyes, a demagogue who lost a Senate election to the then-unknown Obama by 42 points, should be a warning in itself.
This tempest over whether Obama, the child of an American citizen, was born on American soil is tantamount to the Democrats' seditious claim that Bush "stole" the election in Florida and hence was not the legitimate president….
The birth-certificate zealots are essentially arguing that 64 million voters should be disenfranchised because of a contested technicality as to whether Obama was born on US soil….
It is not conservatism; it is sore loserism and quite radical in its intent. Respect for election results is one of the most durable bulwarks of our unity as a nation. Conservatives need to accept the fact that we lost the election, and get over it; and get on with the important business
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