The Road to Greece

The End of an Era, Part 2

This article is continued from the previous edition of The Tracinski Letter.

When Obama was first elected, amidst a wave of bailouts, re-regulation, union payoffs, and central planning, I described what we were going through as "20th Century Lite." We had been told to forget all of the lessons of the 20th century—the lessons the intellectuals refused to learn—so we were going to have to go through them all over again, but hopefully on a smaller scale and an accelerated timeline. I had hoped that Obama would be the new Carter, who would bring this recapitulation to a quick end and kick off a new Reagan revival. Now we know that won't happen. The worst case is that Obama is a new FDR, who wrecks the economy but is still re-elected and viewed as a savior. More likely, he will be the new LBJ, who triumphantly extends the welfare state but in doing so sets it up for future collapse.

Either way, 20th Century Lite is not going to be a small diversion. It's going to be heavier and last a lot longer.

My greatest concern is the cultural impact of this new era. What will it do—or, given the recent election results, what is it already doing—to the attitudes of voters?

A prolonged period of increased dependency on government will definitely have a profound impact. But given the recent attention paid to this issue—the whole "47%" line of argument—I think this has been overstated. Notice that Obama just won a majority of the vote in eight of the ten wealthiest counties in the nation. For the most part, these people are net contributors to government, and by a wide margin. But it has become part of the cultural identity of college-educated upper-middle class professionals that they declare their devotion to the "liberal" pieties. In the way that you used to have to wear a suit and tie to work—because you weren't considered respectable without it—you are now supposed to put an Obama sticker on the bumper of your $45,000 car. In fact, these people cling to leftist pieties precisely because they are so prosperous. It is a seemingly low-cost way of avoiding the guilt they've been told they are supposed to feel for being so well off. The bumper sticker makes the $45,000 car acceptable. Or as Victor Davis Hanson puts it, "Liberalism is an elite person’s psychological investment in enjoying a guilt-free affluence."

The left has long relied on a coalition of high-school dropouts and those with post-graduate degrees. It unites those who want big government because they have given up striving for success and those who support big government to help them feel good about their success. What ties these seemingly disparate groups together is not the experience of dependency but a common ideology and a common "narrative" centered around a big event that has been interpreted to provide a rationalization for leftist ideology.

That is another way of looking at the end of the Reagan Era, the beginning of the new era, and where it is taking us. Every era has big events that shape the lives and outlooks of the people who live in it. Eighty years ago, the Great Depression was blamed on the free market, while Franklin Roosevelt and the New Deal were hailed as the nation's saviors, and this served as a formative experience that built a constituency for big government for decades. A generation later, the Vietnam War was blamed on American military assertiveness, and its failure led to the "Vietnam Syndrome" that discouraged the use of military force overseas.

The two biggest events that shaped the Reagan Era were the Fall of Communism and September 11. The Fall of Communism discredited socialism and encouraged the global rise of capitalism as the standard economic model for how to create a prosperous society. September 11 encouraged greater American military and diplomatic assertiveness by giving people a sense of the destructive effects of American weakness and passivity.

The Obama Era is largely the result of a successful attempt to do with the financial crisis of 2008 what a previous generation of statists did with the Great Depression. That crisis will be trotted out for years as a symbol of the failure of capitalism and as a demonstration of the need for government intervention. In foreign policy, I suppose the Iraq War will serve as a minor stand-in for Vietnam.

History suggests that trying to look back and change the now-accepted historical interpretation of a big event like the Great Depression and Vietnam doesn't produce much direct result. The effort is worthwhile, because it helps give intellectual confidence and ammunition to the defenders of free markets and strong national defense. It certainly undercuts us, intellectually and psychologically, not to have a proper explanation for these big events. But I am afraid that it generally takes a new event to change things—and we're plunging headlong in that direction.

The Obama Era was launched by one financial crisis and will inevitably terminate in another, even bigger crisis. The contest is no longer about how we can prevent this second crisis. It is about how we can warn about it and explain it, so that voters will be prepared to understand why it happened.

In this election, America basically chose the road to a Greek-style debt crisis in which runaway entitlement spending, supported by chronic borrowing, suddenly becomes unsustainable and the whole system collapses. Mitt Romney and Paul Ryan were at least considering entitlement reform, but instead voters chose a leader who has pledged not to touch the entitlement state. And while he proposes to fill the gap with higher taxes on "the wealthy," this is inadequate and counterproductive—it may well neutralize any increase in revenues by suppressing economic growth. So for at least another four years, we are going to continue with the status quo: slow-to-nonexistent economic growth, trillion-dollar annual deficits, a massive new burden of welfare and "disability" payments for the permanently unemployed, and continually growing middle-class entitlements.

We will stay on this road until it hits its dead end. When we reach the end, we have to be intellectually prepared for it. We have to be ready to explain it, we have to be already shouting about it from the rooftops, and we need to be ready to offer alternative solutions to the crisis.

We can take some comfort in the fact that it is often in time of gravest extremity that the best minds have originated and advocated the ideas we need. In 1991, it was a financial crisis in India that allowed leaders like Manmohan Singh to push through free-market reforms that led to decades of rapid growth and modernization, a process that is not yet over. Or to take an example that is closer to home (in more than one respect), out of the Great Depression and the New Deal emerged a new generation of intellectuals on the right—chief among them Ayn Rand—who revitalized the defense of free markets, capitalism, and constitutionalism and laid the foundations for a better era.

I am not endorsing the notion that bad news is good, that a crisis or a turn to the left will really be good for us because it will spur a backlash. In fact, this election definitively refutes that idea, since the bad news did not lead to a revival. But I do think we need a reminder, in times of crisis, not to give up but to fall back on our reserves of strength.

So it remains to catalog those reserves and see how we can make the most of them.

This article will be concluded in the next edition of The Tracinski Letter.

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