What will the recovery look like? It’s a question we are not able to answer. We think it won’t be much like the past, though. The political class has abandoned the free market for something else. This didn’t happen overnight. But the process began to accelerate rapidly under the Bush and Obama administrations.
Whichever way you look at it, government’s power is growing in direct proportion to the decrease in free enterprise.
As George Will points out in the Washington Times, “TARP’s $700 billion, like much of the supposed ‘stimulus’ money, is a slush fund the executive branch can use as it pleases. This is as lawless as it would be for Congress to say to the IRS: We need $3.5 trillion to run the government next year, so raise it however you wish – from whomever, at whatever rates you think suitable. Don’t bother us with details.”
Will’s point is that you can’t simply whisk money out of thin air without consequence. Someone’s got to pay in the end. Ultimately, it will end up costing the middle class and the wealthy through inflation, higher taxation or both.
Of course, politicians are focused on another battle right now – the battle for re-election. This means the long-term health of the US economy is not their concern and short-term patches are the most we can expect.
The scam is in plain view, but it remains difficult to see. That’s because it’s on a scale greater than most of us can grasp. We now have a government that has taken on as its raison d’être the role of arbitrator of wealth. It is doling out tax dollars to whomever it chooses. And this is happening without adequate oversight.
Will this a) lead to a more competitive and vibrant economy that’s driven by merit and consumer choice or b) lead to an economy that awards incompetence and bad decisions and that is defined by widespread political cronyism? We think we know the answer… As Will puts it:The Obama administration’s agenda of maximizing dependency involves political favoritism cloaked in the raiment of “economic planning” and “social justice” that somehow produce results superior to what markets produce when freedom allows merit to manifest itself, and incompetence to fail. The administration’s central activity – the political allocation of wealth and opportunity – is not merely susceptible to corruption, it is corruption.