The Deck Chairs Are Fine Where They Are

This is an edited, slightly expanded version of remarks delivered at the Campaign for Liberty’s Liberty Forum at the Conservative Political Action Conference (CPAC), February 27, 2009. A two-part video of the talk follows the article.

We are at a watershed point in our country’s history. Historians may look back on it as a turning point comparable in scope to the New Deal, the Progressive Era, or even the Civil War. The issues we are dealing with are not matters for genial debate. They involve the very survival of the republic.

What we need at a time like this are not half-measures. What we need are not semi-Keynesian arguments that complain only that the stimulus package contains too much pork. We don’t need conservatives arguing that the federal government should have blown the $800 billion on different things. As I’ve explained elsewhere, the problem with the stimulus is much more fundamental — namely, the blockhead economics on which it is based.

What we need, in short, is full-throttle opposition.

And the official conservative movement, such as it is, has not exactly delivered. The editor of the magazine Bill Buckley founded in 1955 lectured anti-bailout Republicans in September 2008 that they were being "extremely irresponsible." They dared to speak out against the brilliant bipartisan consensus being rammed down our throats. Well, then! We can’t have that! We need nicey-nice conservatives who pose no threat to anyone or anything.

Other prominent neoconservatives have made it sound as if we’re dealing with matters for genteel disagreement: "I have my doubts" about the September 2008 bailout, said Bill Kristol.

Thanks, Bill. That was bold.

And these are the people who pose as the leaders of the conservative movement? No wonder it’s in the toilet.

John McCain, for his part, might have turned around his hapless campaign if he had simply said, "I’m against the bailout." He could have exposed the phoniness of Barack Obama’s promises of change. He could have said, "This total fake, who campaigns on u2018change,’ promises nothing but the same old bailouts of Wall Street."

Predictably enough, he didn’t.

My view is that now is the time to be broad-minded and ecumenical. Perhaps during the Bush years you defended things that you knew in your heart you shouldn’t have. Perhaps you sat back while principles you claimed to believe in were trampled on. You may even have made contrived excuses for what the administration was doing. But if you’ve awakened after this eight years’ drunk with a hangover and a firm purpose of amendment, then we welcome you with open arms.

On the other hand, if you’re going to defend bailouts, bank nationalization, or Ben Bernanke and the Fed, then get out of the way.

I’m happy to report that things are changing, that at least some conservatives are finally starting to ask some serious, fundamental questions, instead of rearranging deck chairs on the Titanic. I’ve been doing a lot of radio in support of my book. I was on a syndicated program called the Martha Zoller Show, for instance, and the host asked me whether we really needed a Federal Reserve System after all. It is amazing, I thought, what Ron Paul has made possible. And she wasn’t alone: I’m being asked about abolishing the Fed all the time now.

Likewise, I’ve been on the Michael Medved Show a couple of times in recent weeks, and he, too, is wondering whether the Fed is really necessary.

Now anyone at CPAC knows who Ludwig von Mises and F.A. Hayek were. (If you don’t, you shouldn’t be here — you should be home studying.) Everyone claims to love them. But the aspect of their teaching that almost everyone has left out up until now is what they thought of the central bank. Hayek won the Nobel Prize for showing how the central bank’s manipulation of interest rates — in other words, its intervention into the free market — leads to the boom-bust business cycle with which we are sadly familiar.

Even those who claim to support the free market see nothing amiss in a monopoly central bank with the monopoly power to create money out of thin air. They spend their time talking about what our Soviet commissar in charge of money and interest rates should do, instead of asking whether we need central planning of money and interest rates in the first place.

The housing bubble could not have arisen without the Federal Reserve. Had people started buying houses at unusually high rates, banks’ loanable funds would have begun to deplete, interest rates would have shot up, and that would have been the end of it. That would have discouraged any additional speculation in real estate. But Alan Greenspan and the Fed could create money out of thin air, thus giving the banks more to lend and driving interest rates down, thereby perpetuating the destructive bubble in housing.

In our country we have one group that believes you can print wealth into existence, another that tries to spend it into existence, and a third (and by far the largest) group that believes in both. This is a philosophy fit only for children and ignoramuses, and the editorial page of the New York Times — or perhaps I repeat myself.

Then there’s the fourth group: the grownups, who understand that wealth is created through saving, investment, and entrepreneurial skill; that wealth has to be produced before it can be consumed; and that lending is impossible in the absence of prior saving. Simple things, really, but if it weren’t for the constant denial of these elementary ideas, our talking heads would have nothing to do.

Today, we grownups have to explain these basic principles to the deranged children — as they run around with their fingers in their ears, and screaming "I can’t hear you!" — who run our government, write our opinion columns, and fill American airwaves with stupid and destructive economic advice.

I’m always happy when people enjoy and profit from any of my work, but this is the first time I’ve ever felt that the message of one of my books was urgently necessary. And not because I’ve thought up some new theory to account for what’s taking place in the economy. All I’m doing is channeling the message of the great free-market economists, tailored to our present circumstances. Supporters of the market economy need to know how to defend their position at a time when the free market and so-called deregulation are being blamed for the economic collapse. And the American people need to know that there is another way of thinking about what has happened to our economy apart from what Paul Krugman tells them. That’s why I wrote Meltdown.

(By the way, for anyone in the room who doesn’t know who Paul Krugman is, I’ll just say you’re enjoying a more tranquil life than I am.)

So what happens now?

The tired ideology of neoconservatism isn’t the future. Everybody hates neoconservatism, and for good reason. Unless you want to be a military contractor, or get a sinecure in Parasite City or — I don’t know — be a professional idiot or something, there’s no attraction there.

Barack Obama claims to be the future. But he’s as much a product of the past as the people he criticizes. What does he propose? More Keynesianism, more bailouts, more central-bank manipulation of the economy. Doing more of the same is supposed to be "change we can believe in." But what would an ambitious politician be without an Orwellian campaign slogan?

But although it might sound like a cliché, it happens to be true that the future is to be found right here in this room. I have never been prouder than I am of my association with all of you who are in this fight. You have something to say that isn’t just more of the same, and you carry on this battle because you believe in the cause of freedom, not because you expect to earn some government loot.

The country is filled with people who have been clueless about the economy for years. In fact, it’s worse: the country is being run by such people. There are few things you can be certain of these days. But one of them is that whatever Washington does with regard to the economy, it will be the exact opposite of what anyone with any sense would do.

That is why this is our moment. We have the answers: what got us here, what’s happening now, and what to do to fix it. Now is the time to learn this stuff, get out there, and make ourselves heard.

This isn’t a question of whether to install a traffic light somewhere. This is our republic. We do not compromise with looters. For the sake of our liberty and our prosperity, we intend to roll back every one of the incursions they’ve made on our economy and our freedom, and keep on pushing back until we can live as a free people once again. No conservative movement worth speaking of would hesitate for a minute to embrace this program.

So what say you, CPAC? Do we rearrange more deck chairs, or do we fight?