“A good catch word can obscure analysis for fifty years.”
— Oliver Wendell Holmes
The Obama era comes clearer.
The President-elect, says the President-elect himself on CBS’ 60 Minutes, believes in an administration centered on the principle of “something that works.”
This bromide always sounds appealing to the unwary. It has that fairy tale intrigue. Not too hot, not too cold. J-u-u-u-s-t right. A little left here, a little right there. Middle, sort of. Centrist, don’t ya know?
Except of course, this idea never turns out to be either center or, as it is also frequently touted, new. It is — shockingly! — nothing more than old-fashioned liberalism afraid to advertise. It is, as the saying goes, what it is.
In a week which sees the cover of Time magazine photoshopping Barack Obama into Franklin Roosevelt, accompanied by the appropriately reverent paen to the New Deal and a blossoming New Liberal World Order by liberal journalist Peter Beinart, one can only — well — laugh. Why not just cut to the chase and do Obama and Joe Biden as the con men Robert Redford and Paul Newman portrayed in the classic Oscar-winner The Sting?
All of this, from Obama’s musings about “something that works” to the quivering anticipation at the sight of the New Deal born again is nothing less than the kind of hype usually reserved by members of the Flat Earth Society for their own peculiar fantasies.
Think for a moment of the greatest claims trumpeted for the vaunted philosophy of “something that works.” From the New Deal to the Great Society, from FDR to LBJ and Jimmy Carter (Carter apparently serving as the Obama first term), the results are nothing if not striking failures. There’s Social Security, perpetually on track for bankruptcy if it is not hurriedly “fixed” yet again. Medicare, which Mr. Beinart praises without quite explaining the American people may not be aware this too is racing along briskly to Fannie Mae-style financial disaster.
Ah yes, Fannie Mae. The New Deal chestnut designed as a financial institution but quite inevitably transformed by the Clinton administration into a welfare agency under the catchwords “affordable housing.” You remember Fannie Mae. The fuse that lit the financial implosion that is, as we speak, upending the lives and fortunes of millions of Americans and, for that matter, non-Americans. The list of results from this “something that works” philosophy is long. LBJ alone listed 207 cherished results in his memoirs, results that generally go under the catchwords “Great Society.” The cost, we know decades later, was trillions and neither “Great” nor, in many situations, much of a society either. (Think of pre-Katrina New Orleans or pre-Giuliani New York.)
Then wrap your mind around the results that began appearing when Ronald Reagan finally brought a halt to this “something that works” idea in 1981. Even with George H.W. Bush and Bill Clinton unable to resist some tax hikes, the Reagan idea kept on rolling, producing over forty million jobs between August of 1981, when taxes were cut, and September of 2008, when the fuse lit by FDR’s Clinton-modified Fannie Mae exploded. Here are some of the more well-known products the American people responded to between 1981 and today:
Microsoft, Blockbuster, Dell computers, Apple computers, the DVD, the VCR, the iPod, cell phones, Martha Stewart Living, Fox News, Amazon.com, talk radio, Harpo productions (Oprah Winfrey’s empire of TV: films, books and a magazine) and DreamWorks studios (Steven Spielberg).
Tax dollars required for start-ups? Zero. All were the product of dreams and private capital. Private capital that in turn has provided good jobs and, yes, health care for thousands of employees. Private capital that, if the Obama team were to breathe new life into the ghost of the New Deal, would vanish into more Fannie Mae-style black holes and Bridges to Nowhere. Private capital that would be sucked up from countless less famous but equally valuable small businesses across America. Businesses that are in fact the economic backbone of our communities.
The Obama idea behind doing “something that works” is, as Time acknowledges, nothing if not the new New Deal in both fact and form. What goes unmentioned by Mr. Beinart and his editors is that FDR’s penchant for experimenting effectively unstabilized the American economy for a full decade. Markets crave stability and FDR proudly promised none. He tried “something that works” with currency and exchange policy, agriculture, utilities and the gold standard, to name but a few. The last policy was so erratic no less than the famed economist John Maynard Keynes described FDR’s work as “the gold standard on the booze.” According to Amity Shlaes, author of the current bestseller The Forgotten Man, one fine morning FDR informed his advisors he was raising the gold standard by twenty-one cents. Why? Said FDR in a classic “something that works” response: “It’s a lucky number because it’s three times seven.”
This is the kind of economic philosophy behind Barney Frank’s now infamous statement that he was willing to “roll the dice” with Fannie Mae.
There is no new thinking coming to America in January if the president-elect and his media cheerleaders are to be paid heed. There will be no effort to realize that government-induced environmental standards or labor rules are sucking the prosperity from the Big Three automakers’ already very bad business model. There will be no new look at the actual economic effect after decades of New Deal laws like labor’s prized Wagner Act (which has effectively given the United Auto Workers their now clearly devastating and unchallenged run of Detroit for decades). There will be no rethinking of why Medicare fails yet Martha Stewart succeeds or why Social Security limps as Microsoft cruises.
The reason the idea behind “something that works” will never be challenged is that “something that works” is itself always forced to cover the tracks of old and very much failed policies constructed in the same way for the same reason: it just sounds so politically good. As astutely understood by Justice Holmes, catch phrases like the “New Deal” and “something that works” can obscure tough analysis for decades.
The problem for President-elect Obama and his friends is that decades after the post-New Deal era have in fact gone by. To re-offer the New Deal in 2008 is just the same Old Deal.
What’s “something that works” really all about? What is this cry for a new New Deal? As a new generation is about to learn, it is nothing more than the policy of the con job.
Stay tuned for The Sting. The sequel.
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