I’m not even going to bother linking to the latest round of stories about the planned government bail-out of banks.  Suffice it to say that the news today makes it almost impossible to avoid the thought that the economy is in the tank.  Now the very people who put it there are going to take a few stabs at trying to pull it out.

It always puzzles me that some of my (economically) middle- and lower-class friends, none of whom ever seem to do any reading on the subject, believe that Republicans have a better handle on things like lowering taxes, spurring job growth, and just generally protecting our standard of living.  I haven’t lived very long — just a half century so far — but even I have noticed that whenever we have a Republican President, things tank.  Whenever we get a Democrat in the White House, things improve. All the way around.

The current administration has, however, far surpassed past Republican administrations in damaging our country on just about every front imaginable.  Perhaps this is not surprising. After all, influential Republican adviser Grover Norquist once famously said one goal was,

to cut government in half in twenty-five years, to get it down to the size where we can drown it in a bathtub.  (Sheldon Rampton & John Stauber, Banana Republicans: How the Right Wing is Turning America into a One-Party State (2004) p. 6.)

And journalist Elizabeth Drew noted that,

It’s not just because taxes are irritating and unpopular and all that.  He [Norquist] has a long-term view, which is the lower the revenues that the government takes in, the less spending it will be able to do, the less money will go to the groups that he sees as the base of the Democratic party and its power—the teachers’ unions, welfare workers, municipal workers and so on.  This is the big, long-term war.  It’s total.  It’s Armageddon.  And I have to say that the people on the right, I think, have thought this through much more than their opponents on the other side who really don’t much know what they do and how the opposition thinks and are just waking up to it.  (Elizabeth Drew, Whatever It Takes: The Real Struggle for Political Power in America, quoted in Banana Republicans, p. 7.)

I can only hope that people will start to wake up to what’s happening.  I’m personally concerned that the United States cannot survive another Republican President, not even one from the great hockey-playing, moose-shooting state of Alaska.  (Yeah, truth is, Obama isn’t running against McCain; he’s running against Palin.  Because while I’m concerned about whether the United States can survive another Republican President, I’m convinced that his health and age make it unlikely McCain will.)

Maybe it’s time we recognize that there’s a reason George W. Bush continues smiling and appears to be unconcerned about the severity of the problems into which he’s gotten us.  The reason is at least as old as the recognition that Rome needed a more robust fire department. I doubt it’s a mistake that Grover Norquist was once called “Field Marshall” of the Bush economic plan. And people think the administration doesn’t know what it’s doing.  Bush continues to smile and nod and grin and bob his head because everything is going exactly according to plan.

So I’m not surprised at either the economic devastation that we’ve seen under Bush’s watch, nor at his apparent lack of concern.  I suspect there may well be private parties in the now anything-but-transparent White House where Bush gleefully fiddles away, impervious to the vagaries of the economy he and his friends are helping to destabilize.

What does surprise me is the lack of recognition on the part of everyone else that this mess is caused by eight years of unbridled Republican policies. What does surprise me is that middle- and lower-income voters can’t see in their own lives what economists have long recognized:

The real incomes of middle-class families grew more than twice as fast under Democratic presidents as they did under Republican presidents. Even more remarkable, the real incomes of working-poor families (at the 20th percentile of the income distribution) grew six times as fast when Democrats held the White House.  (Larry Bartels, “Inequalities” (April 27, 2008) New York Times Magazine.)

Unfortunately, the thing that has created this mess is what will also make it virtually impossible for a true government bail-out.  For that, we need only look at the now-historic (and thus largely forgotten) Great Depression.  Only the oldest amongst us really remembers — and understands — the depth of that depression, the key cause of which was “an expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom.”

The factors noted by the Austrian School economists, primarily Friedrich Hayek (The Road to Serfdom) and Murray Rothbard (A History of Money and Banking in the United States), are present again today.  And the government is trying the same things it tried after the crash of 1929 that preceded the Great Depression.

But forget that for now.  If you’ve ever tried to balance a checkbook, or run a household, just think about this:  George W. Bush has spent years — almost eight of them — cutting taxes.  Forget also, for the moment, that those tax cuts have largely benefitted the rich, and not the rest of us — seriously, forget that part for now.  Just think of it this way: Bush has cut the “income” of the United States government.  At the same time, he started a war that costs billions per day to run.  Coupled with that, he and his friends have failed to regulate lenders, effectively removing the controls that kept the kids from dipping into the piggy bank whenever they ran low on cash.

How long would your household last before you lost everything, if you did the same things our government is doing?

Even now I can see Dick Cheney and Grover Norquist sitting in a bathtub, clinking glasses, toasting one another, while George Bush fiddles (read that however you want) in the background.

Suggested Reading

The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek)	A History of Money and Banking in the United States: The Colonial Era to World War II	Unequal Democracy: The Political Economy of the New Gilded Age