Money Ain’t For Nothing … and the Checks are for Free!

As stated in Comments on The 2008 Second Presidential Debate, the only difference between the state of our country and its institutions and the Titanic is that the Titanic had a band. So, after a little thoughtful reflection and a strong sense that we are about to inaugurate the first social Marxist to be president of the United States , I propose that we celebrate (with the little money we have left) by hiring the band Dire Straits. With a little twist on the lyrics, their classic hit “Money Ain’t for Nothing” could become American pop culture’s new national anthem! Unfortunately for Obama and his fellow Marxists, the euphoria will be short lived, tempered by economic reality. The “wealthy,” upon which the left’s tax and spend economic policy depends, are fleeing the market. Apparently, they understand that replacing the free market with a large central government controlled entirely by “Democratic” socialists – propped up by a $100B stimulus package, a $700B bailout, and yet another $150B stimulus package currently under discussion – will not work .

America is at a “strategic inflection point” in its history. I believe that if Obama is elected, our children and grandchildren will look back in history and identify this election as the point in time we transitioned from a free, capitalist society – one nation under God with equality of opportunity for everyone – to a Marxist socialist one – a multi-cultural, secular humanistic post-modern society that seeks equality of outcome for everyone but its “intellectual elite,” who view themselves as saviors of the common man and worthy of special dispensation. The Bush Administration’s policies are not the cause of the recent economic implosion, as much as the left would like to us to believe. The cause is the result of a relentless, long-term strategy that was implemented by Marxists starting in the 1920s, brought to the United States in the 1930s, and fully implemented starting in the 1950s (see Taking America to School … and Other Places We No Longer Recognize for background, discussion, and links to Obama’s world view).

The principal thesis of this movement (Critical Theory) was that Marxism could not defeat Capitalism through direct conflict or economic means but had to first undermine its culture by attacking its underlying institutions: the nuclear family, its Christian faith, education, media, entertainment, and popular culture. As the theory goes, success in subversion of these institutions would lead to economic, political, and military collapse. This is exactly what we have seen. Future articles will examine trends in each of these areas; however, suffice it to say that the current economic meltdown is simply a result of this much larger strategy. Our current economic woes are the result of 70 years of social engineering, which has year-by-year – in 2007 inflation adjusted dollars – driven federal spending in 1965 from $628 billion to $2.7 trillion in 2007 (a 334% increase), while the median income of the average American has risen 35% ($28,346 to $38,386 per year). Over this period, mandatory spending on entitlement programs (social security, Medicare, Medicaid, Welfare, etc.) has grown from 26.9% of the budget to 52.9% of the budget. These programs had their genesis in the 1930s through democrat president Franklin D Roosevelt’s “New Deal” and came into full bloom under democrat president Lyndon Johnson’s “Great Society.” When interest is considered (8.3%), only 38.8% of the budget is discretionary (within the control of the President).

One of these social engineering programs was the Community Reinvestment Act (CRA), signed into law by democrat president Jimmy Carter in 1977 and further expanded by democrat president Bill Clinton in 1999 to offer sub-prime mortgages to low and moderate income persons, who otherwise could not afford them. This fiscally irresponsible, social engineering program targeted at providing “affordable housing” to those who could not “afford” it directly resulted in the economy crumbling under the weight of credit that could not be repaid. In true socialist fashion, the democratically controlled congress – aided and abetted by a minority of clueless Republicans – have now exacerbated the problem by throwing more fuel on the fire, in the form of $700B in cash guarantees. Instead, they should have taken action by unleashing the power of free market capitalism: eliminating insane mark to market rules, reducing capital gains taxes, reducing corporate income taxes, and debating the merits of new tax systems like the fair tax or flat tax system. Note: all solutions proposed by democrats require the government to be in the middle, and that is the problem.

So, what is the bottom line (pun intended)? The progress made by the Bush administration over the past six years has been erased in two weeks by long-term, systemic socialist policies that have been at work for 70 years. A little over a year ago, consumer confidence stood at a two-and-one-half year high, regular gas sold for $2.19 per gallon, the unemployment rate was 4.5%, the Dow reached record highs, and Americans were buying new cars. Over the six year period, the Bush administration has put forward proposals to regulate Fannie Mae and Freddie Mac, address social security, address energy policy, and address health care. Many of these proposals passed the House, only to die in committee in the Senate because they were blocked by the democrats. Since the democrats have taken control of congress, every one of these economic indicators has reversed and to borrow a phrase from one of their social justice theorists, Rev. Jeremiah Wright, “the chickens have come home to roost.” Consumer confidence has dropped, the Dow is trading in ranges we have not seen since the 1970s, a record number of homes are in foreclosure, unemployment has risen by 10% (to 5.5%) , and the federal deficit has ballooned.

May be the market understands, better than the voters, the true cost of Obama’s Change: you give him a dollar and he gives you back two cents.