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Whither - Or Wither Go Our Economy?

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JOHN REINIERS

More Than Words

Published: February 19, 2009

Updated:

Speaking not as an economist, but as a lawyer born during the Depression, thus growing up both before, during, and in the shadow of World War II with its economic deprivation and "ration coupon" induced austerity, gives one a considerably different perspective than a "boomer" who hit the ground running in the swinging sixties with its unconstrained counter-culture followed by decades of consumer excess.

For me the 1960s was somewhat of a bewildering blur of emerging "rights" - described by its beneficiaries as "Power to the People" (with virtually no responsibility) - conveniently justified as being necessary to overcome social repression. (But more accurately an explosive knee jerk reaction to old fashioned American conservatism.) The philosophy of this counter-culture became the template for our left leaning educators whose intellectual feet are still firmly planted in outer space.

The economy that developed over the ensuing decades was seen by this boomer class to be dependent upon the omniscient, omnipresent government "helping hand," rather than dependent upon individuals bootstrapping themselves up the ladder of success. (You can't help but think of Abraham Lincoln, our iconic American messiah, who with no formal schooling other than perhaps a year's worth in Kentucky and Indiana, taught himself to read and write; and oh yes - went on to become President of these United States.)

Many of us are now confused as to exactly what undergirds the 21{+s}{+t} century U.S. economy. Public schools have successfully inculcated our kids to believe that one's economic success is dependent upon a government social and financial support system. As of this week we have now completed the economic circle going beyond the individual to an era of corporate bailouts, or even government ownership of what used to be private business. Socialism - of the old Europe variety is here to stay.

This is a slippery slope, but predictable, considering that our new leadership is largely a product of what was the counterculture of the 60s, which has now emerged as the predominant culture of the intelligentsia in the new millennium. This new leadership majority is composed of legislators who are not businessmen, given the fact that the majority party is composed of social democrats. I can't imagine Harry Reid, Nancy Pelosi, Chuck Schumer, Barney Frank, and - oh yes - even Barack Obama or Joe Biden as entrepreneurial business leaders. (One would have to agree that our Founders envisioned the Congress as being a composite of the American milieu - not professional tenured politicians.) Some political scientist should check the bios of House and Senate members to determine who actually has business experience. I'll bet there are more conservatives in the business camp, and more lawyers in the liberal camp.

Many economists believe our economy would have started to fix itself without a stimulus package. Many do not. Business economics seems to be plagued by natural cycles, much like agriculture. But the recent mess was clearly started with congressional social legislation during the New Deal; embellished as Democrats attained majorities; and then massaged over these same decades by lawyers and the opportunistic financial sector to the point of ruin.

It seems as though every time Congress legislates and the bureaucracy regulates, lawyers and other experts start gaming the devised system against itself for economic gain. (Look no further than the perennially revised tax code or the Fannie Mae/Freddie Mac mess.)

We may be better served to have a Council of Economic Advisors (CEA) which is also staffed with people who produce things or provide real services, rather than just economists. Christina Romer is the current chair of the CEA. She and Edward Lazear have co-authored Obams's plan for economic recovery. Both were professors of economics with no business experience. Academia is not where the rubber hits the road.

Something I read recently resonated with me about what ails us. James K. Anderson, admittedly an investment guru, observed: "I think that ultimately when one talks about all the extraordinary interventions, that thing that is absolutely essential is to reassess the place of finance in the way our economies work ... It's part of the great Keynes observation, "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done."

That's what we've got to get turned around. We've got to get back to being a serious service rather than a method of making obscene fortunes. We've got to get away from a system that gives the intermediary all the benefit rather than the ultimate shareholder."

That's us.

John Reiniers, a regular columnist for Hernando Today, lives in Spring Hill.

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