Saturday, August 06, 2011

End of Week Economic and Political Potpourri

We offer some links and observations that converge on SWNIDish themes.

In WSJ, Eric Cantor is featured in the weekend-edition's profile that leads the opinion page. The brief interview and analysis emphasize what SWNID has been posting lately: that our body politic is riven by two distinct notions of what the country ought to be. If you haven't been paying attention, those two notions are (a) a republic of equal and abundant opportunity, relatively unfettered by government interference; (b) a European-style welfare state pursuing equality of outcome. Cantor is quoted on the subject:

The assumption . . . is that there is some kind of perpetual engine of economic prosperity in America that is going to just continue. And therefore they are able to take from those who create and give to those who don't. We just have a fundamentally different view.

Meanwhile, others in WSJ are noting a corollary: that in the present debate, as progressives get the worst of it, they retreat to more overt expressions of elitism. So writes Stanford's Peter Berkowitz. Cataloging some of the recent examples of egregious name-calling from lefty Congresspersons and pundits, Berkowitz observes a fundamental contradiction in the progressive political mindset:

The evident panic of the progressive mind stems from a paradox as old as progressivism in America. Progressives see themselves as the only legitimate representatives of ordinary people. Yet their vision of what democracy requires frequently conflects with what majorities believe and how they choose to live.
Add to this the progressive belief that human beings can be perfected through the rule of experts, and you have a recipe--when the people make choices contrary to progressive dictates--for generating contempt among the experts for the people whose interests they claim alone to represent. And not just contempt, but even disgust at diversity of opinion, which from the progressive's perspective distracts the people from the policies demanded by impartial reason.
The progressive mind is on a collision course with itself. The clash between its democratic pretensions and its authoritarian predilections has generated within its ranks seething resentment for, and rage at, conservatives. Unless progressives cultivate the enlightened virtues they publicly profess and free themselves from the dogmatic beliefs that undergird their political ambitions, we can expect even more harrowing outbursts to come.

Meanwhile, S&P has downgraded US Treasurys to AA+ with a negative outlook. Of course, they did it despite having to acknowledge a $2 trillion mistake in their analysis. We see this change as more symbolic than substantial, as there is no real alternative for cash in the global economy to replace Treasurys. So we expect little change in interest rates, even though a rise in interest rates is perhaps in the interests of longer-term prosperity. Markets are more important in determining prices than are market-watchers.

And meanwhile, Ohio's bonds have been upgraded. Ohio Governor, shameless self-promoter and former Lehman Brothers partner John Kasich explains how he has accomplished this fiscal feat by doing the Coolidge thing in balancing the state budget and reducing taxes:

What to say in conclusion? That we dearly hope that the decade-long flirtation with spending and borrowing our way to prosperity is at an end, and that this time the lesson will last longer than the 20 years it takes for another generation to arise, hold its parents in contempt, imagine that we suffer from a deficit of civic-minded virtue that they intend to fill, and concoct yet another failed experiment in patron-client relations between a government and its citizens.

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