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The Current Crisis
No Time for Mischief
Let’s see if President Obama truly understands markets.
WASHINGTON — There is a vexed brouhaha going on between two of my favorite conservatives, Rush Limbaugh and Senator Tom Coburn of the great state of Oklahoma. It has been caused by a mischief-maker by the name of Jeff Greenfield, now working apparently for CBS TV. Greenfield began his TV career as a mischief-maker on the late William F. Buckley’s “Firing Line” and continued it on CNN. Now he interviews personages for CBS, but he has not lost his knack for creating a row…or simple confusion.
Shortly after President Barack H. Obama took the oath of office, Greenfield was interviewing Senator Coburn, whom he stopped in his tracks after the senator genially offered that he wished the new President well and hoped he would “succeed.” Greenfield notified the senator that Limbaugh, “probably the most prominent conservative commentator in America,” did not wish Senator Obama success. Greenfield quoted Limbaugh as saying, “I know what he [President Obama] wants to do and I don’t want him to succeed.” That sounds like Rush has gone into kamikaze mode. It sounds downright unpatriotic. Yet it misrepresents what Rush was talking about, and later on his radio show Rush explained his point.
All depends on what President Obama “wants to do,” and Rush believes he wants to socialize the economy — the banks, healthcare, the auto industry, the works. Rush believes that state control of commerce is, well, the road to serfdom, as Friedrich von Hayek put it six decades ago. Since Hayek’s time we have had ample evidence to meditate on the performance of socialism, and such renowned socialist states as India (the soft form of socialism) and China (the rough form of socialism) have discarded it. Both have fashioned their economies around market capitalism and flourished in a way that would have been unthinkable a generation ago.
Capitalism brings prosperity. Since the Reagan Revolution, America has enjoyed a quarter of a century of almost unbroken economic growth. There were two brief and shallow recessions, but in modern history there has never been such a period of prosperity. Now we are in a recession and it appears it will be neither short nor shallow. That is why I have been drawing attention to the original cause of this recession, namely government. It was government, specifically the Clinton Administration, that goaded two government instrumentalities, Fannie Mae and Freddie Mac, to traffic in subprime mortgages, and traffic wantonly. The junk mortgages were sold all over the world, often to government-regulated institutions. I stand with the newly elected President in admiring government regulation, at least some government regulation. But this economic mess proves that government regulation is not foolproof. The regulators were human and humans fall prey to error, as they did in regulating American banks in the 1990s and more recently.
So once again Rush is right. Socialism is a menace to freedom and to prosperity. If President Obama nationalizes as extensively as some of his supporters are advocating, I too will be against him. Fortifying the banking system and buying up troubled assets is wise, and, as was seen in the late 1980s rescue of the troubled savings and loan institutions, is effective. The President’s proposed giant stimulus program is another matter. We have tried such programs in the past. They are ineffective, breed corruption, and leave in their wake inflation.
Yet for my part I am willing to give the new President the benefit of the doubt. In his fine and workmanlike speech he spoke out for markets, saying their capacity “to generate wealth and expand freedom is unmatched.” There was a day not so long ago when liberals denied markets even existed. The gat advocate of the mixed economy John Kenneth Galbraith, who late in life identified himself as a socialist, jeered at the very idea of a market, joking that he could not see it, he could not touch it. Well, most educated people now recognize the existence of markets and their indispensability to economic prosperity. I say let us give the new President an opportunity to show us what he knows about markets.
About the Author
R. Emmett Tyrrell, Jr. is the founder and editor in chief of The American Spectator. He is the author of The Death of Liberalism, published by Thomas Nelson Inc. His previous books include the New York Times bestseller Boy Clinton: the Political Biography; The Impeachment of William Jefferson Clinton; The Liberal Crack-Up; The Conservative Crack-Up; Public Nuisances; The Future that Doesn’t Work: Social Democracy’s Failure in Britain; Madame Hillary: The Dark Road to the White House; The Clinton Crack-Up; and After the Hangover: The Conservatives’ Road to Recovery.
Letter to the Editor View all comments (52) | Leave a comment
More Articles by R. Emmett Tyrrell, Jr.
More Articles From The Current Crisis
http://spectator.org/archives/2009/01/22/no-time-for-mischief
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Jason | 1.22.09 @ 7:54AM
Give Obama the benefit of the doubt? There IS no doubt for him to benefit from. He's a socialist, he believes in redistribution.
http://www.rightklik.net/
Paul Bunker| 1.22.09 @ 8:30AM
By the end of January it should be clear what the Pres. knows about markets and his intentions for the form of future government.
Michael Roush| 1.22.09 @ 9:10AM
Mr. Tyrrell,
Until I read the first sentence of your last paragraph, I thought you were pulling a little Jeff Greenfield yourself.
I am surprised that conservatives are still peddling the idea that President Obama wants to socialize the majors businesses. He has said very clearly that governments don't do well running businesses. Have conservatives not been paying attention? No reasonable person would argue that a state government can plan and run an economy successfully. No reasonable person would argue that laissez-faire capitalism works. We weren't even near a totally laissez-faire market economy and look at what happened to our financial markets. We need government regulations and oversight of our markets. I suspect we are in disagreement over this. If not, please state so plainly and clearly. Hopefully, your influence will cause some of your readers to re-think their ideology.
Greg| 1.22.09 @ 9:40AM
Mitchell-
We're in the mess we are in now because of Laissez-Fiare Capitalsim? Since when are lawyers suing banks to force them to loan money to people who can't afford loans, then using govt entities to launder the money considered Laissez-Faire Capitalism?
Ian Callum| 1.22.09 @ 9:48AM
We're in the mess we are now because the Fed mismanaged our money supply and government regulators refused to do their jobs.
I'm not sure what can be done to rectify this situation as our financial system has been ruined by Greenspan and his minions in DC.
frost| 1.22.09 @ 9:54AM
Yeah -- no question about it, Dubya was a lousy president. Not as bad as Jimmy Carter perhaps, but pretty awful. Yet, bad as he was, Obama's got me scared; not for myself, but for my kids and their children. Really, it’s a valid question: Do you really want Socialism? Do you genuinely feel that the government can spend YOUR earnings better than you can, yourself? Do you really want the Marxist “redistribution of wealth” to take place here, giving the money You worked for to those who demand “Something-for-Nothing”? Face it, our new inhabitant of the White House studied at the feet of Saul Alinsky, Bill Ayres and assorted other socialists and promises more of the same - - that the governmental bureaucracy is “the” answer? My God, it’s anything but! I'm reminded of something a very famous and astute grandfather said a few years back: "Anything the government touches turns to (crap)." Ringo Starr said that. And, if you doubt me, can you say DMV, ICE, the God-forsaken EPA, INS, SBA, NASA; the horribly inept SEC, TSB, USPS, CIA, CDC, FDA, DOE, IRS, FFA, the TxDOT with its having pushed the TransTexas Corridor; FEMA (who we told repeatedly that we had NO damage after Hurricane Ike, but they still sent TWO separate guys at different times to inspect and even Measure our House, TWICE, despite the fact that we told them repeatedly that we had NO Storm Damage!), etc… The inefficiency is appalling, nothing less! We’re flushing our once-great country down the toilet. Or, maybe it’s “past-tense” and we’ve already done it…?
Robert Nowall | 1.22.09 @ 10:07AM
I subscribe to the thesis that it would be better for the United States if Barack Obama is a successful president---I think I saw it stated somewhere in these webpages, somewhere between Election Day and now.
But I can't say that he will---given the past track record of liberals, it's unlikely the future will be different, and unlikely he will succeed---I can only say it would be better if he did.
Jeremy Jester| 1.22.09 @ 10:54AM
Hopefully, Mr. Obama has learned a few things about the market since his socialism laced campaign speeches. I also hope he has learned something of the concepts of liberty and individual determination. Consumers (especially in my business) are fearful of Mr. Obama and his potential policies. Therefore, they are spending vast sums of cash as a result and making the firearms industry one bright, successful spot in the midst of the current recession. The firearms industry knows it is in for a fight, both for our liberty and the very existence of the industry.
Howard| 1.22.09 @ 11:56AM
We are almost entering a laboratory for proving or disproving certain economic theories. Our liberal friends such as Paul Krugman are arguing that the Great Depression lasted so long was not due to Keynesian policies, but for timidity of applying these policies during the 1930's. So now with a full Democratic slate in place, it should be possible to see if fiscal policies work as our friends promise. I for one have my doubts. I was a Democrat during the 1970's until I was cured of my afflictions by Reagan. Buckle your seat belt, this is going to be a rough ride.
megapotamus| 1.22.09 @ 12:04PM
Greenspan declared himself astonished that banks would make loans so obviously inviable and that this shakes his faith in markets. Unsaid is that the banks were goaded and then rewarded mightily for making those dodgy loans. Bush declares that he has abandoned free market principles to save the free market system. This, I suppose, is Compassionate Conservatism. The deal the Reps have had for years with conservatives is that, hey, we are going to have these programs that everyone knows are worse than useless, because they are popular with morons (a healthy majority). With us at least they will be run with some sense and restraint. Well har-dee-har-har. Bush, and some others, made the fatal mistake of admitting the premise to these Commie sink-holes not knowing, apparently, where this must lead. Anyone of any party who votes for these crapulent bailouts must be relieved of their burdens of office as soon as possible and be replaced with anyone, of ANY party... of NO party who declares they embark to the capitol to STOP what is happening there. This is impossible for two years at least and students of history know it may well be much longer. This actually endorses one undeniable quality of Barack: his youth. He MAY not be quite so hidebound in his presumptions as another exec. Frankly, I am as certain as one may be that McCain would have been probably WORSE on this issue. And about the same on the GWOT, so what the hell?
elhombrelibre| 1.22.09 @ 12:19PM
As usual, Bob Tyrrell is spot on. I would like to see America safe, the markets recovering quickly, and prosperity, especially for myself. Of course, if Obama pursues policies that lead us in that direction (and if the cow jumps over the moon), I’ll support him and be modestly pleased. I believe PC lending policies demanded by our government (well the Democrats at least), incredibly rapacious oil prices by the OPEC monopoly (never criticized by Liberals despite the fact that it hurts the world’s poorest the most), and irresponsible economic personal decision making (in the tens of millions, of course (and obviously mostly Democrats), from free love to drinking too much to too often using credit cards,) have led to our present problem. Obama will show his true colors (red) as soon as he insist on gays in the military, Global “Warming” policies (pure claptrap), and Neville Chamberlains foreign policy. Obama’s support Left and Right is soft at best.
disruptive skeptic| 1.22.09 @ 12:54PM
Once again, more proof the Rushbo is a VOTEKILLER. His point may be valid but his delivery is awful. If he were a doctor of medicine it would be understood he needs a better bedside manner. As a doctor of democracy(SELF PROCLAIMED), he also needs a better bedside manner. Women hate him overwhelmingly. It is killing republicans.
elhombrelibre| 1.22.09 @ 1:35PM
disruptive skeptic,
What do your recommend of Rush, acting and accepting the Liberal worldview?
frost| 1.22.09 @ 2:13PM
Mr. D. Skeptic suggests that Limbaugh is killing the Republicans? Aw, I think not, the GOP is suffering from self-inflicted cowardess, wimpy folk and crummy candidates.
Michele San Pietro| 1.22.09 @ 3:02PM
I sincerely hope Obama does understand markets, otherwise it would simply be disastrous. I will never get tired of repeating that America, without free enterprise, has no reason for existing.
Marc Jeric| 1.22.09 @ 3:07PM
"Economy recovery act" - what? About one trillion dollars of pure pork and earmarks will bring back prosperity? Dream on, Abu Hussein and Reid and Pelosi and Frank and Dobbs! In 2010 we will have Carter-like unemployment (11%) and inflation (13%). And we want our new President "to succeed"?
David J| 1.22.09 @ 3:57PM
I hope Obama succeeds in teaching Disruptive Skeptic that (actually) Rush was correct. I also hope he succeeds in teaching America once and for all that Socialism does not work! I, also, hope he does not totally destroy our once great nation while doing the first two things.
TeeKay| 1.22.09 @ 6:49PM
About the only place where Laissez-Fiare Capitalism is practiced is in the illegal drug business, and business is booming.
Alan Brooks| 1.22.09 @ 7:19PM
illegal alien biz isn't doing to bad either. drivers get paid, you know.
Thom| 1.22.09 @ 7:33PM
I don’t make prediction about the future most of the time just on general principle that if I could do that and be right often enough I wouldn’t have to work another day in my life but there are things that can be seen that don’t need a crystal ball for. The Worst Generation in the history of the United States, mine is going to more than double the welfare/entitlement roles in less than 10 years. Between the net loss in taxable income to support the very programs they will depend on the rest of their lives and the gross increase in mandatory spending for these programs, there isn’t going to be anyway out of not raising taxes to support this or eliminating virtually all discretionary spending. Since no two people agree on what discretionary spending is that leaves just running a deficit. Given our current situation, printing money as fast as the presses will run, the loss of half the wealth in the market that my generation had been putting away to avoid having to live off just SS or a little more there is almost no scenario I can come up with (short of some fantasy) that is going to return us to the prosperity we had before in the near term. The market, which was the last hope to provide enough retirement income to keep SS/Medicare/Medicaid rates from going up to say 21 percent, is run by F.U.D. Fear, Uncertainly and Doubt has been sending Obama a not so subtle message since his election victory. It sent him a punctuation mark on the day he was coroneted. The market, or the place that free enterprise takes place is not going to expose itself to more risk than necessary and Obama has given the market more than enough reasons to entrench. Entrenchment and the natural population growth will compound all that I’ve mentioned about coming down the track. If his first year is about growing government and placing more regulation burden and hidden taxes on everyone through hair brain pie in the sky wishful thinking schemes, those 78 million Baby Boomers above are going to look upon him in ways that Praying Mantis looks upon a fly. The Worst Generation in the history of United States has done one thing that stands out from all those before and since the last New Deal. We’ve paid a lot of taxes to prop up all these entitlement programs for past generations and now that third rail is going to double in voltage in short order. I don’t envy Obama at all but if he is the fool he appears to be most of the time, he will surely deserve what he is going to get not too far down the road.
Neo| 1.22.09 @ 8:45PM
I hope POTUS Obama makes capitalism look good.
Die rechte Ecke| 1.22.09 @ 10:10PM
Obama will move us to the left. And will wreck us for a long time to come.
Let us not forget that the guy most of us voted for, George "Capitalism?" Bush got the ball rolling - along with progressive planners in Republican clothing.
Reading "Road to Serfdom" depressed me as I realized this is our turn, like Britain, down the dark hell-hole of a "planned" society.
So I say, "Lasciate ogni speranza, Voi Ch'entrate," you leftis- progressive, crypto communist, liberal dimwits.
Virgil will not take you on the tour, he's going to leave you there.
Long live Freedom!
Ran| 1.22.09 @ 10:37PM
Mr. Tyrrell,
""All depends on what President Obama "wants to do,""
Sarah Palin said something disturbingly apt, a line about how the Presidency would be for Obama just another step on a journey of self-discovery. Does he know his goals? I hope and pray they aren't consistent with his past. What he knows about markets? We'll see. It's what he knows about marketing that causes me concern.
Todd| 1.22.09 @ 10:56PM
Very good post Thom, I certainly agree with you. I can't even be bothered to open a 401-K at my work at the moment because I do not see the returns in the market in the next few years being worth anything and also with the inevitable double digit inflation that will be coming after these foolish Keynesian economic policies erode the value of the dollar. It is all very depressing actually. There might be still good value in certain stocks that could perform well in down times we will be in such as McDonalds and Wal-Mart, which were the only Dow Jones stocks to go up in the past year.
Any Conservative that hopes Obama will govern from the center needs to have their heads examined, he is a true Alinsky disciple through and through.
Osamas Pajamas | 1.22.09 @ 11:11PM
Some genius above evidently believes that conservatives advocate "laissez-faire capitalism" and that such a system doesn't work. This gentleman is wrong on both counts.
Conservatives, like Democarts, advocate a government-issued and managed supply of paper money which is routinely inflated in order to rob holders of it this paper of its exchange value. And of course the mortgage market has been for decades polluted by government controls, culminating in the current mess brought-on by relaxed loan standards and fractional-reserve banking practices, none of which are advocated by or originate with laissez-faire capitalist policy.
I am not criticizing conservatives here, however --- even if perhaps I should. I am criticizing those who criticize conservatives and who aim at the substitution of socialism [or any other brand of statism] for capitalism.
The future of America, if we are to have one, depends on debate among conservatives and libertarians, a process from which Democrats are rightly excluded, on the grounds that in any event they can revert to their root methods for redistributing income, by robbing liquor stores and bashing little old ladies for their purses.
Frank Talk II| 1.23.09 @ 12:54AM
Now time for a little light humor. A question ladies and gentlemen? Does anyone remember the talks about privatizing social security accounts several years ago? If the game was not rigged then, it most certainly would be now. Can you imagine the bailout needed and the utter chaos that would have resulted from financial institutions (banks and brokerages) having mismanaged (lost) the retirement savings of 100 million accounts. On the other hand perhaps that is what we needed in order to start anew. No I am not advocating socialism, I am a market speculator (which market, I won't tell) and if I am not correct in my speculation then I receive no reward. Ahh, the exhilarating feeling of being alive. Always remember people, the two oldest professions: gambler (liberty) and prostitute (freedom). In the end which will you choose?For those who are puzzled with the above associations investigate the original meanings of liberty and freedom.
Michael L. Hauschild| 1.23.09 @ 5:08AM
Frank Talk II,
What part of “Privatizing” Social Security don’t you understand? That scenario would have been just fine if indeed it had remained “private” and functioned under “free” market forces. The polarity that exits between Capitalism and Socialism is along the incremental axis of government intervention. The key to a functioning market is not the “endowed entitlement” of Fannie and Freddy but as you personally expound “earned wealth invested wisely.”
JJ JR| 1.23.09 @ 1:05PM
"I say let us give the new President an opportunity to show us what he knows about markets. "
Bob,
You're trippin' on this one--that line was in there exactly to get conservative columnists like you to write the "give him a chance" columns which you dutifully complied with. Geez Bob, you been hangin' with Peggy Noonan?
Michele San Pietro| 1.23.09 @ 3:22PM
Everybody knows that socialism doesn't work. Not only in America, but all over the world. So I trust Obama will not govern against the rest of the world.
I Conner Klast| 1.24.09 @ 12:07AM
Here's a solid test for the Obama approach to markets and capitalism. Instead of feeding the $350 billion TARP balance to banks, give it directly as a tax cut NOW. How 'bout it?
Craig G | 1.24.09 @ 9:30PM
I Conner, that's a very interesting idea. $350 billion is about one-third of the total take of the Feral Gov from the income tax; take a look at your pay stub and figure what you would do with a third of the Federal withholding.
For most of us, it would amount to an extra $60 a week or more. Now that's a stimulus!
William Dye| 1.24.09 @ 11:22PM
Mr. Tyrrell, by your logic we could just as aptly allow the Dear President an opportunity to show us what he knows about hand grenades by giving him one. Oops, bad analogy. You can scamper away from the blast radius. Unfortunately, we have no place to go when he explodes the economy.
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