Watching Our Rulers Destroy Our Worldby
Robert Higgs
Our rulers are destroying the economy. Not little by little, as they usually do, but in huge swaths. Each great assault on the free market, whether it be denominated a bailout, a stimulus, or some other species of purported salvation, brings us visibly closer to the complete ruin of an economic order that required centuries to build. Awestruck, as if we were observing a tsunami sweep across an island, we can only watch the rulers' devastating actions, for which, strange to say, they expect the public to be grateful―and, truth be told, most people are grateful, and clamor for more of the same. We listen to the kingpins' lunatic ravings as they describe their perceptions of the current situation and solemnly declare their determination to "do something" to restore the prosperity that they themselves have demolished by previously "doing something" of the very same kind. They gaze out at a financial debacle rooted in various government policies that induced lenders to do business with millions of borrowers who had no realistic prospect of repaying the loans. And what do these überguardians propose? They aim to relieve the unfaithful borrowers of their contractual obligations, to purchase the disappointed lenders' "toxic assets," and to "get credit moving again," so that new loans will be made, again at artificially reduced interest rates to borrowers who have no realistic prospect of repaying them. They are pouring credit madness on credit madness because they have no real understanding of how the economic world actually works and, even if they did understand, they are politically beholden to the owners and managers of failing economic behemoths who profited handsomely from the artificial prosperity of the boom and are now staring into the abyss. Our forebears have stood in a similar position on previous harrowing occasions, and the sense of utter helplessness we feel now resembles the one they felt then. When the world was rushing toward total war in the late 1930s, every intelligent person could imagine the abattoir toward which the great leaders were dragging their nations, yet no one could pull them back from the appalling destruction into which they seemed hell-bent to plunge. In 1939, in his poem "In Memory of W. B. Yeats," W. H. Auden wrote:
Though everyone foresaw the catastrophe, no one could pull the leaders back from its execution. I experienced this sense of powerlessness in 2002 as I watched the Bush administration rushing headlong toward its murderous attack on the Iraqis. On September 23 of that year, I gave vent to my feelings in an article called "Helplessly, We Await the Catastrophe Our Rulers Are Creating." "Today," I wrote,
The calamity that Bush and his government wrought in Iraq has now become a chronic, seemingly permanent condition, a pain that never eases, an emergency destined to continue as far as the eye can see, and nearly everybody has given up hope that anything good will ever come out of it, or even that its daily horrors will ever do anything but continue to erupt episodically in spasms of political madness and haphazard violence. Iraq, however, is thousands of miles away, and few Americans could keep their attention focused on it for long, in any event. Now that the financial mess and the deepening recession are affecting all Americans and raising fears about the whole country's future economic well-being, Iraq has been relegated to brief articles on page A-23 of the newspaper. The economic crisis had become overwhelmingly the foremost concern, and on this front, good news has been a very scarce commodity for the past year.
Artificially easy credit, rapid monetary growth, subsidized homeownership for people who cannot make the mortgage payments, exclusive privileges granted to dishonest bond-rating agencies, explicit and implicit government guarantees of bank accounts, bonds, and other financial assets―these policies and others that tend in the same direction have created our present economic difficulties. To suppose, and to act on the supposition, that precisely these same kinds of policies will repair the day is supreme folly. To augment these mistakes by expending a trillion borrowed dollars in new government outlays for whatever suits the grasping members of a totally corrupt Congress only compounds the folly on a cosmic scale. Yet, no struggling firm or family wants to fail, and each prefers to survive the day without having to make painful adjustments, even if doing so requires supping disgracefully at the state's filthy trough. The entire spectacle is painful to behold. The good that the people and their leaders expect to come of these foolish measures can provide, at most, only temporary relief. Not far down the road, the devil is waiting to collect his due.
February 4, 2009
Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society. Copyright © 2009 Robert Higgs
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In
the present situation, the formula our rulers employ to guide their
actions is simple: borrow and spend―the more, the better.
If reminded that the government cannot accumulate ever more debt
without grave repercussions, they always answer that the present
emergency is so pressing that concern about the future must be set
aside until the present exigencies have been met. It is not clear
that they sincerely believe the economic drivel they dispense to
the news media. Perhaps they are merely cunning enough to appreciate
Rahm Emanuel's 
