Economic Enemies of the State
The relationship between the individual and the state is at the center of political philosophy and debate. Though much of this philosophizing and debating is abstract and arcane, now and then a statement will cut through all of the verbiage and reveal, in a way that all can understand with shocking clarity, the world view of the speaker.
When such statements signal a shift in the relationship between the individual and the state, they can be especially important in the development of a longer-term outlook for the economy and financial markets.
For example, when President Ronald Reagan in his first inaugural address said: “In this present crisis, government is not the solution to our problem; government is the problem,” he foreshadowed the coming reduction in the burden of government and an increase in the liberty of the American people. This fundamental shift in the relationship between the Federal government and the American people led to one of the longest periods of prosperity and wealth creation in American history.
Two such statements by those now in power point with equal clarity toward a significant increase in the burden of government on the American people and a concurrent loss of liberty. The implications for the longer-term outlook are as dire today as they were positive in the aftermath of Reagan’s words in 1980.
The first, Barack Obama telling “Joe the Plumber” during the Presidential campaign: “I think when you spread the wealth around, it’s good for everybody,” reveals a worldview that justifies taking money from some individuals and families and giving it to other individuals and families in the name of the “common good”.
The second came when House Speaker Nancy Pelosi revealed a complimentary element that is at the core of the liberal view of the relationship between the individual and the state. In response to a question by George Stephanopoulos on the January 25th “This Week,” she defended the proposal to spend hundreds of millions of dollars on family planning services by saying: “Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children’s health, education and some of those elements are to help the states meet their financial needs. One of those – one of the initiatives you mentioned, the contraception, will reduce costs of the states and to the federal government.” (emphasis added)
In other words, children in poor families are “costs” to the state, and more should be done to limit their number – to keep them from being born. They are not potential doctors, or scientists, or entrepreneurs or future loving fathers and mothers. No, they are a part of the “terrible fiscal budget crises”; they are a drain on society, an inconvenient reminder that the grandiose promises of the welfare state are creating an ever-greater burden on the productive middle class.
As a result, it is appropriate for the federal government to put the American people hundreds of millions of dollars further in debt and to use that money to attempt to keep poor people from having children. These babies, it seems, are enemies of the state.
The views expressed by President Obama and Speaker Pelosi are common to those who believe that the chosen elite – the royal blood of the middle ages, the totalitarian leaders of the 20th century, or today’s professional politicians and bureaucrats – have the right to fashion society, not through persuasion and political discourse, but through the exercise of the power of the state. As revealed in their statements, human beings exist either to produce the wealth that those in power can give to their chosen constituents who, in turn, are expected keep them in power, or they are costs, and therefore, within the limits society finds tolerable, should be eliminated.
Such views do not auger well for the longer-term outlook for the economy or financial markets.