Feed on

I briefly addressed why I am not surprised by the small amount of violence that broke out last week when some Americans started to realize the absolute sham and joke that is American democracy. Lots of my thoughtful students have asked me repeatedly, “I see that the economics they practice is awful, so why do we still eat the castor oil?” I would like them to take a long course on Public Choice, but for now, a little start to understanding is in this post from Arnold Kling – and yes, DO read his book Unchecked and Unbalanced. Here is the post in its entirety:

The public probably does not understand this budgetary legerdemain, but their instinct is to distrust Congress. In this case, the populist instinct is valid, and the elitist contempt for ordinary citizens is quite unjustified.

In fact, I believe that the elites have so mistreated the American people that we should declare that a state of war exists between America and Washington. Our goals in this war must go well beyond the repeal of this year’s health care legislation.

Glenn Reynolds would correct me to say that they are not an elite–they are just a ruling class.I wrote this before the memo got sent around telling everybody to tone down the militant, extremist rhetoric. Regardless, I do not intend to comply.

I see today’s ruling class as the equivalent of the British generals who kept launching offensives in World War I or the executives at Citigroup and Freddie Mac who loaded up on sub-prime mortgages. If my views seem extremist compared to theirs, so be it.

I also got the memo that health care reform will reduce the deficit. That is a baloney sandwich. Relative to current law, I am willing to grant that the legislation will reduce the deficit (assuming no glitches, such as failure to project expenses properly or failure to follow through on promised benefit cuts). It does so by cutting future Medicare benefits by X, and then using a little bit less than X to pay for new subsidies. But in order to actually have a budget that does not collapse by 2030, we have to cut future Medicare benefits by much, much, more than X, and not use the cuts to pay for anything else.

Imagine if these “health care reform will reduce the deficit” arguments were being made by the acolytes of somebody named George Bush. Then you would see Brad DeLong sneering at them, Paul Krugman accusing the authors of having no integrity, and Mark Thoma linking to articles debunking them.

I will not tone down my rhetoric, because I believe that those in power are on a course which is profoundly out of step with reality. In Unchecked and Unbalanced, which was written before the Obama Administration took office, I argue that government’s size and centralization were inconsistent with the increased dispersion of knowledge. With knowledge now highly specialized and dispersed, we need power to be dispersed also, or we will see more catastrophes like the financial meltdown. This Administration instead is trying for more centralized control.

In many respects, the ruling class is engaging in misguided policies. But on the budget, they are approaching world-historical levels of folly.

Thugs with guns. He is right. And he is right that we ought not sit here and consent to having those guns stuck deeper down our throats.

Leave a Reply