In the aftermath of the housing bubble and steep decline in US financial markets it bears noting that many truths considered heretofore unassailable have been shown to be wholly flawed. Such is the nature of any truly cataclysmic event that conventional wisdom, informed by the tidal wave of collective agreement among many “experts”, is ultimately shown to be a lie. Who would have thought, in 2006, that housing prices and
stocks would drop so precipitously just a few years hence? The answer is practically no one.
These phenomena of extraordinary delusions and the madness of crowds, to borrow Charles Mackay’s title, are even more interesting as it applies to today’s political climate. With just over a month in office President Barrack Obama has aspired to some lofty goals and managed to bring about even more extraordinary results, not all of them good by any means. But the persistent refrain from his supporters has been that his election was not only historic but a resounding mandate to effect change on scale not seen in decades.
Many people, I believe, have been stunned by the President’s behavior in his first weeks in office. It’s been a shock and awe performance. Historians of this period will look back in wonder: how ever did a new President waltz into office and, before he had even finished unpacking, extract $800,000,000,000 from taxpayers for partisan spending programs?
We’re still in the first act of the President’s melodrama. A few weeks ago, he warned of “catastrophe” if taxpayers didn’t fork over $800,000,000,000 instanter. In fact, the catastrophe of this drama is yet to come.
The shock and awe is beginning to sink in and more than a few moderates that voted for Obama are beginning to have second thoughts. Given the hot house campaign coverage afforded to him by the establishment media, the president was able to avoid the serious scrutiny that sharpens the thinking (and moderates the behavior) of most presidential candidates. As a result, the country is presented with the most radical policy initiatives in a half century, the main components of which are doomed to fail. Raising taxes in a recession will not hasten a recovery. Raising taxes on consumer goods (energy via carbon emission taxes) in a recession will not hasten a recovery. Massively increasing government spending will not hasten a recovery.
Re-examining the root causes of any bubble that is the result of excess enthusiasm necessarily requires a person to identify what does not work. The fiscal policies of the Obama administration and the Democrat Congress are doomed to fail. But rather than defend the soundness of these policies the Obama administration is utilizing a strategy of deflection and demonization. Jay and Jennifer Rubin make this point quite well at Contentions.
The first sign of a bubble is the abject refusal to examine the fundamentals underlying the issues (some Obama supporters are beginning to do this). As one noted, do you think the Obama administration would be going after Rush Limbaugh and Rick Santelli if they thought they were on the right side of this? The Obama bubble may expand still more, but it is still a bubble.