America appears to be in a Great Depression. It’s not an economic one, so much as a psychological one. It has implications for the economy, however, along with everything else.
When people are depressed, they lack energy. They lack will, drive and, above all, do not wish to take risks. They develop exaggerated worries about security. They concern themselves with holding on to what they have, at all costs, rather than growing, expanding and even making some difficult choices to ultimately improve their lives for the better. When it comes to risk, even minor or rational ones, depressed people do not want to hear it. They seek to stand still.
Since the Great Recession of 2008-09, there’s a new normal in what used to be a land of opportunity, growth, risk and admiration for success. It’s easy to bash Obama, who stands for none of those things. But a majority elected him twice. His self-anointed successor, Hillary Clinton, is slightly favored to win, no matter who wins the Republican nomination, despite the fact she’s not widely liked and is known to be a probable criminal. Yet she promises to keep the entitlement state going, while expanding it.
That tells you something about the psychological state of America. We’re not in a socialist, ideological revolution so much as a transition from a growth-oriented society to one where security, benefits and “going along to get along,” rather than risks, opportunity and growth represent the new priorities. As a result, a majority may now settle for any economy that’s not in a massive depression or recession. “It could be worse.” Are things great? No, and a majority, based on polls, appear to realize it. But that’s OK. Just so nothing changes, and so we don’t have to take risks.
Economist Larry Kudlow says, “[Economist] Charles Murray has written about a beleaguered working class, telling us that it is falling away. They are angry at the so-called ruling class. They are getting a smaller bite of the economic pie, which itself is barely growing.”
Mind you, he’s talking about the Republican nomination race. The Democratic race has gone all socialist. Even Hillary Clinton is not socialist enough for them. But what’s with Republicans? Where’s the message of economic growth, capitalism, limited government and free markets that used to at least partially frame the Republican side of things? It’s a name-calling catfight, as Kudlow correctly characterizes the Republican race for president. But a catfight can only happen in a field devoid of ideas. Where are the ideas, the principles and the inspiration to uplift us?
As for the ruling class: Having money does not make you a “ruling” class. If your money enables you to rule over others, that says more about the government than anything else. Government routinely intervenes in the economy. This was true before Obama, and it has become truer than ever since Obama, primarily because of the 2007-08 economic crash. Most people blame this crash on greedy capitalists. However, the crash was caused primarily by bad loans. No free market would ever have given out bad loans, not on a wide enough scale to bring down the economy. The loans were made possible by incentives and requirements of government regulation. The free market gets the blame, but it was actually the government’s fault.
By the unprecedented standards of American history, the economy no longer grows. People are angry, and instead of blaming this on the government, they look at those who are still doing well, and conclude it must somehow be their fault. This sets the stage for outright socialism, which explains Bernie Sanders’ wins; and it also sets the stage for nationalism, which has been Trump’s emphasis far more than capitalism or economic freedom.
Getting the government out of the economy would eliminate any concerns about the wealthy having “power.” Without government, there can be no pull. Government should only prosecute frauds and cheats, not through regulatory edicts but through due process of law. No subsidies, no favors, no vague regulations which are lifted for some and imposed on others, from the anti-trust laws on down. That would be the solution to corporate corruption, if that’s your concern. Instead, all we get are calls for nationalization of industry (socialism) or trade barriers. We seek to punish China, who may well deserve punishing, for our own sins. It will not help, and it will probably only make things worse. Remember that trade restrictions under President Herbert Hoover (the Smoot-Hawley tariff) in 1930 actually worsened the effects of the Great Depression, according to many economists. China is a government-run, fascist economy. If we converted to an unhampered free market economy, we’d leave China in the dust.
Clinical depression is sometimes chronic, and sometimes even permanent. In other cases, it’s a phase that passes. American history is full of robust growth, risk-taking, innovation and ingenuity. Whether it’s Apple, Amazon or Uber, we have shown signs of life more recently, as well. But as long as so many Americans (Republicans as well as Democrats) remain angry at the wrong people for the wrong reasons, with government getting little or none of the blame for the misery it creates by interfering in the economy, we’re on a dead-end track to nowhere. How disappointing the Republican candidates for president do not realize it or, if they do, prefer instead to focus on catfights.
An economy and a society are only as great as its level of freedom permits. If its brightest and most brilliant innovators are not free to think, innovate, produce and use their skills to move everyone forward, we’re dead in the water. To set ourselves free, we have to put aside our envy, fear and unwarranted concerns for security and give ourselves moral permission to truly let America be great again.
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