Elkhorn Creek Lodge

Conservatism; Steady As She Goes

Posted in economics, gop, obama, politics by Eugene Podrazik on November 10, 2008

There’s cum dripping down from the ceilings of every MSM newsroom over Obama’s presidential election last Tuesday. And, pundits from both sides of the divide, but particularly from the left, jabber on about another sea change in the political landscape. Socialists of every stripe are having wet dreams over the impending transformation of America into a worker’s paradise complete with a UN-approved zero-carbon footprint, $10 per gallon gasoline, a Prius in every garage and government paid abortions to prevent icky kids from messing up the upholstery. It’s very similar to such pronouncements upon Clinton’s accession to the presidency back in 1992. The millennium has arrived. A new realignment. And, so on.

But, as was attributed to Margaret Thatcher, the facts of life are conservative. Conservative ideas may not get you into a Georgetown cocktail party. They won’t spark up a conversation in the Hamptons (at least since Bill Buckley’s passing). But these ideas will not yield to the latest vogue policies coming out of Washington; not with out significant unintended effects. 

Economics policy will not work unless the two parties of an economic transaction both, voluntarily, want that transaction and both will benefit from that transaction. Transactions forcibly created are, in other circles, called robbery. The robber is the beneficiary and will naturally support such a transaction. The person being robbed will do everything to minimize his loss. Roman Emperor Diocletian tried price controls; they didn’t work. Lenin and Stalin murdered tens of millions in their GULAG’s; and still fell far short of their worker’s paradise.

Electric and steam powered cars have been around for over a century. Yet, the internal combustion engine dominated. For a reason, it is a far superior way to power vehicles since a vehicle powered by a gas or diesel engine is going to do a better job than other forms of locomotion. Weight for weight, volume for volume a tank of gas is going to power a car or truck far more efficiently than, say, batteries. We’ve known that for a century and the free market would have ordained otherwise if that weren’t so. 

Artificially distorting the market by allowing a cheap and plentiful commodity such as oil and gas to become prohibitively expensive by curtailing supply by government fiat will not our solve our energy problems. It certainly will direct our economy to make “alternative” cars. But, cars that American would rather not have because they simply will not replace current cars for their far superior utility. Again, things happen for good reasons. Reasons that are rapidly thought through and rationalized in the give and take of a free market economy. No amount of governmental bureaucratic massaging is going to come up with a better solution. What will have are more expensive and less capable alternatives to our present auto. Maybe less carbon, but what are you going to do with all of those lead-acid batteries when you have to replace your alternative auto? And, you will have a nation poorer as a result because of this gross misallocation of resources.

The real postmortem of this election is the slow abandonment of Reagan’s policies of 1980. The policies of less taxes and less government sparked a 30 year era of prosperity. A significant portion of our electorate never even experienced a real recession let alone a depression.   And, tied to these economic policies was a constant rhetoric that continued to pound home that basic message of less government. Reagan realized that just because things are working well doesn’t mean that there isn’t someone always waiting in the wings who thinks that he can run your life better than you can. Like Obama.

Our current economic problems can all be traced to governmental intervention. Once upon a time, you bought a house with a 30 year fixed rate mortgage; 20% down; monthly payment not to exceed 25% of your monthly take home wages. It reflected what could be reliably purchased with out default. Those rules, by government fiat and ACORN extortion, were upended and Fannie Mae happened. When the old plain vanilla rules were followed there arose a middle class of homeowners with real equity; real wealth. When these new-fangled mortgages (interest only, zero down, ATM) came on to the market, chaos followed.  The former was so booooooring, while the new mortgages were soooo exciting; and it got more exciting.

The other half of Reagan’s policies was a muscular foreign policy backed by a strong military. No, Reagan wasn’t the war-monger as his critics liked to paint him. But, his success in keeping the peace and bringing down a nuclear armed adversary were tied to a strong military and the impression, in the minds of our enemies, of a willingness to use that power. Again, for the last 30 years, we haven’t faced wars like the one’s in the past. The sum total of our battlefield casualties over the past 30 years are such that they do not exceed, in one day of combat, the casualties on the beaches of Normandy, Tarawa or Iwo Jima. It doesn’t take much of a misstep to get ourselves involved in such a conflict again if we choose to abandon Reagan’s foreign policy philosophies.  

From Bush I’s reneging on his “no new taxes” promise to the pork barrel spending by the GOP during the last decade, the GOP lost it’s credibility. So, when the sub-prime mortgage crisis hit, the GOP with its badly battered brand name was unjustifiably tarred with the crisis. Moreover, it could no longer articulate a warning that this crisis could only be surmounted by economic growth. It could no longer articulate that governmental intervention carried a strong risk of turning a recession into a depression. So, we elected Obama; and the market is doing the dwindles in the 8000’s.

By virtue of a 30 year track record of success, there’s no need to re-think conservatism. It worked because what Reagan brought to Washington was based on experiences, from time immemorial, of what works with regards to economics and foreign policy. As in Economics 101; as in ancient Rome; si vis pacem, para bellum.  The truth isn’t “new” or “exciting.” It doesn’t have the cache of deconstruction by some superstar Marxist professor. They just work.

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  1. Conservatism; Steady As She Goes - DIY said, on November 10, 2008 at 10:49 pm

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