Political Bankruptcy: Stage Three Gary North from Specific Answers

Political Bankruptcy: Stage Three

Gary North - November 14, 2015

Peggy Noonan was a speech writer for Ronald Reagan and George H.W. Bush. She was a master. These days, she writes columns for The Wall Street Journal.

When she writes on politics, I pay attention. She was inside Washington at the highest level, yet she did not have to get into any fights to defend institutional turf. She watched. She thought. Then she wrote speeches.
To write a speech that works with an audience, you must understand the audience. You must then craft your words to gain the support of the audience. Peggy Noonan has understood the Republican audience for three decades better than anyone else I can think of.
OUTSIDERS AND INSIDERS
Her latest article surveys the Republicans running for the nomination for President. She asks the obvious question: Why are two outsiders, Trump and Carson, ahead of the others? She comes up with a plausible answer.

What is going on, and not only with Republicans, is that American voters are surveying the past 15 years. At home they see an economic near-collapse followed by a feeble recovery, a culture that grows every day grosser and more bizarre, falling educational results, a bigger, more demanding and more corrupt federal government. In the world: two unwon wars, ISIS, a refugee crisis greater than any since the end of World War II, Putin on the move, American clout and prestige on the decline.They think: Who gave us this world? Who led us the past 15 years? They realize: It was the most credentialed, acclaimed and experienced political professionals in both parties. The pros gave us this world--the people who knew what they were doing! Who had a lifetime of political attainment!

This is the joint work of George W. Bush and Barack Obama. This has been the Bush-Obama Administration. She of course does not say this openly, but she describes its outcomes.
We should not blame today's bizarre culture on Washington. The federal government is not in charge of American culture -- fortunately. But everything else on her list of horrors is the product of the United States government. I include the Federal Reserve System.
Educational standards have been visibly falling since 1963, the year that SAT scores peaked. But Bush took possession of the decline with his preposterously named program, "No Child Left Behind." That was right up there with "Mission Accomplished."
Bush's PR flaks had a kind of perverse ability to name things wrong, beginning with the war on terrorism in the Middle East. Bush announced: "this crusade, this war on terrorism, is going to take awhile." Crusade. Yes. Memories of old -- just perfect to gain the support of Saudi Arabia. The Pentagon then backtracked, renaming the invasion of Afghanistan "Operation Infinite Justice." I see. A Western crusade for infinite justice. Saudi Arabia again. This was soon renamed "Operation Enduring Freedom." That operation officially ended with America's military victory in Afghanistan on December 28, 2014 -- a Sunday. Mission accomplished! The Bush Team had a kind of reverse Midas touch, rhetoric-wise.
Not to be outdone, Obama followed "No Child Left Behind" with his own rhetorical disaster: "Race To The Top" slogan. I see. Obama. Race. Get that front and center, guys!
In the field of rhetoric, these are bipartisan Keystone Kops.
That scraping sound you hear is the bottom of the barrel.
THREE STAGES
Warren Buffett is good with one-liners. He has described the descent of new economic ideas: first, the innovators; second, the imitators; third, the idiots. This applies just as well to politics.
We are well beyond the political innovation stage. It ended in 1952. The imitators went into retirement in 2000. The idiots are now in charge.
First, it was the New Deal/Fair Deal: centralization. That ended with Eisenhower's election. Then it was half a century of imitators, all claiming to be the spiritual heirs of Franklin Roosevelt. Reagan and Gingrich joined the chorus. But with Bush II and Obama, the idiots have come into their own. Our own. Yours and mine.
Republican voters have had enough.
"Had enough?" That magnificent slogan brought victory to the Republicans in the 1946 off-year Congressional election. They won back both houses of Congress. But the voters had not had enough. They re-elected Truman in 1948. Eisenhower consolidated the New Deal/Fair Deal.
Kennedy gave us another "new": the New Frontier. Then came Johnson's Great Society: the consolidation of the New Deal. After that . . . no more administration-defining bumper-sticker slogans. Reagan's ad man tried in 1984: "Morning in America." Morning ended with Irangate.
Nixon gave us Watergate. Ford gave us Nelson Rockefeller. Carter gave us G. William Miller as the head of the FED, who in turn gave us 12% price inflation and 20% T-bill rates. Reagan gave us deficits. Bush I gave us a promise: "no new taxes." Then he raised taxes. Clinton gave us Monica and a federal budget surplus, but he raided Social Security's surplus to get it.
This was the imitation stage. Then the idiots took over.
CAPITAL DEPLETION
The public does not perceive that this is a matter of capital depletion. We see it in the federal deficits. These deficits are relentless. But the voters shrug this off.
This is capital depletion on a massive scale. And, yes, it is also cultural. But it is far more obvious in Washington. The statistics are there for all to see. A $400 billion deficit is seen as tight budgeting -- the best we can expect.
What Noonan describes is the final stage of a process. It is the process of government bankruptcy. This is reflected in the federal budget -- the on-budget budget -- and especially the real budget: the unfunded liabilities of Medicare, Social Security, and Medicaid, which are in the $200 trillion range (the present value of discounted future liabilities).
Bankruptcy comes in stages. In the early stages, it is barely visible. Income does not keep pace with expenditures. The spendthrift borrows. "No problem." This is seen as a temporary anomaly. Then the borrowing speeds up, but there is sufficient capital to justify the increased debt. The accountants warn of trouble ahead. The debtor responds: "So far, so good!" "There's more where that came from!" The process continues. Then the accountants say: "The future is now." The spendthrift responds: "Eat, drink, and be merry, for tomorrow we die."
The U.S. government can borrow 90-day money at less than two-tenths of a percent. In October, it could borrow for free: zero percent.
A recession will produce negative interest rates. We will pay the U.S. government to take our digital money and guarantee to give most of it back in 90 days.
Congress will spend this free money with abandon. The voters will shrug. "There's more where that came from!"
The public senses correctly that we have gone through the looking glass. We are getting farther and farther away from the mirror -- our point of entry and our way of escape.
And so we have Trump and Carson leading the pack. This was not summer madness. This is the real deal.
Noonan speculates. Is there an alternative? She comes up empty-handed.

Is it possible what we need right now isn't a nonpolitician but instead a brilliant and gifted politician to lead us through these times? (Yes, I know: Who? I don't know. The powers of the most successful pols tend to be clearest in retrospect.)

So, she returns to the trough of rhetoric, of which she is a master. This is salvation by rhetoric.

Is it conservative to say we have to cut back entitlement spending to cut our unsupportable deficits, or is it conservative to say a deal's a deal, generations paid into it and have a moral right to everything they were promised? Is it conservative to say there's plenty to be saved by cracking down on fraud and waste but in a time of economic stress the people will not accept benefit cuts and no serious party that lives in and respects reality should attempt it?

The key words: to say. Always, it is to say.
She neglects this ancient wisdom. "Actions speak louder than words." And this: "Talk is cheap." And this: "But be ye doers of the word, and not hearers only, deceiving your own selves." And this: "But the emperor has no clothes."
CONCLUSION
In his novel, The Sun Also Rises, Ernest Hemingway describes what we are now seeing.

"How did you go bankrupt?" "Two ways. Gradually, then suddenly."