Dissent Of The Day II

A reader writes:

You conflate two policies with being essential to avoiding a Depression, when they are distinct. The Fed did the right thing when it pumped up the money supply in the banking system to avoid what Milton Friedman called “The Great Contraction” that led to the Great Depression in 1929. The analogy often used to justify this action is similar to putting out a fire in a row house that could spread to the other homes in the row if it isn’t put out.  Ben Bernanke did the right things to avert that disaster and your Big Babyism critique applies to that policy.

However, what many conservatives do justifiably complain about are the TARP expenditures that amounted to pure wealth redistribution with no contagion rationale. 

The bailout of AIG preserved the credit default swap market to the benefit of Merrill Lynch, Morgan Stanley and Goldman Sachs shareholders.  These institutions were not part of the banking system when the crisis broke out.  In fact, the government strong-armed them into becoming bank holding companies so that a fig-leaf could be used to justify this policy, ex post facto.

The same goes for the GM bailout.  The US economy would not collapse if GM went bankrupt.  However, a key voting Democrat voting bloc would be severely impacted – the unions who mostly contributed to the financial demise of the auto industry in the first place.

The pork-barrel spending contained in subsequent stimulus bills were of the same ilk and only deepened the government’s fiscal crisis in the hopes of creating a soft landing that doesn’t feel so soft 8 months later.  And now Obama wants to take over another 16% of the US economy before the fires have been put out on the Medicare and Social Security fiscal crises?  This is what is causing true conservatives to snap.

The brazen abuse of a crisis to pursue an ideological agenda instead of resolving the deep fiscal crisis faced by this government is what has caused the severe reaction against Obama. You should be ashamed of yourself for not screaming STOP to this madness.

This is it? Seriously? The madness is in my reader. There were indeed emergency measures used to prevent both a financial meltdown and an economic spiral. To my mind, the acid test is whether these measures helped avoid a second Great Depression, as a lot of people feared. They did. Now we get to tackle the underlying causes of the crash and re-regulate the financial industry to saner, older, more conservative standards. Then the recourse to utterly trivial pork barrel spending and the idiotic canard that Obama wants to "take over" 16 oercent of the US economy suggests to me we are simply dealing with ideology here, removed from any real engagement with the actual real world choices Obama faced and the real world choices we all have to face.

It is as if the right has become so ideologically calcified they cannot see what is in front of their noses. And so they concoct a fantasy world in which Obama is the leftist spender - rather than what he is, a pragmatic reformer in a desperate situation caused in part by conservatism's ideological over-reach.