Well, expectations were more-or-less met, but expectations weren’t that good to begin with.

My own opinion is that the job market will start to recover in earnest very soon, and faster than people are expecting. But then, I didn’t expect it to stay this bad for this long, so who knows?

Yet more not-so-bad economic news.

As I’ve often said, charisma is the #1 factor in determining elections. In elections where there is not a meaningful “charisma gap” between candidates, however, the economy is often the deciding factor. And, right now, an improving economy benefits the Democrats.

As the economic recovery takes hold, it makes sense to suppose that market equilibria will go back to where they were before the crisis hit in late Summer of 2008.

In other words; the return of high gas prices. Remember, $4.00 a gallon gasoline had dominated the headlines until mid-September of ’08.

In many ways, this is actually a worse problem then the huge recession. High gas prices lead to “stagflation”, which causes both unemployment and inflation to rise. Normally, there is thought to be a trade-off between the two.

“If we allow that Socialism (in the ethical, not the economic, sense) is that world-feeling which seeks to carry out its own views on behalf of all, then we are all without exception, willingly or no, wittingly or no, Socialists…. All world-improvers are Socialists.”–Oswald Spengler, The Decline of the West.

It is common among President Obama’s critics to say that he is a Socialist. The evidence for this claim rests upon his administration’s expansion of government spending, as well as Obama’s infamous line to the so-called “Joe the Plumber” that he would like to “spread the wealth around.” This, combined with the standard Democratic party platform of welfare and general reliance on the Federal government, forms the basis for their case.

And, in the very broadest sense, they’re right. Obama’s philosophy seems to me to be, at its least redistributionist, one of Utilitarianism, which in my opinion is inevitably Socialistic in practice if not in theory. To say otherwise requires a narrow definition of Socialism. Nor does the fact that his critics themselves have in mind a particular brand of Socialism that may not in fact be Obama’s refute their basic claim.

 Now, it is true that most of the people charging this do not understand the definition under which Obama can most certainly be described as a Socialist. If they did, the charge would lose much of its sting. Indeed, much of the cries of “Socialism” seem to simultaneously suggest Obama is a Marxist or, more broadly, a Communist. But these are not the same as Socialism, and it is inaccurate to describe Obama’s policies as such.

Among Obama’s supporters, it is common to point out that expansions of the Federal government also occurred under George W.Bush, and that there were no outcries of Socialism then. This, they say, proves the case that the accusations of Socialism are in fact simply attempts to scare people. In my view, it actually shows a truth that neither side would likely care to admit: that Bush was also a socialist, though of a different flavor than Obama.

The easiest way to describe the difference between each man’s socialism is to say that Obama’s is an international Socialism, whereas Bush’s was National Socialism. Regrettably, describing it thus will inevitably lead to associations with the Nationalsozialistische Deutsche Arbeiterpartei (National Socialist German Workers’ Party), often abbreviated as “Nazi”. Understand that I have absolutely no intention of describing Bush (or Obama) as a Nazi. Their brands of socialism are nothing like Nazism. A better term might be “American-exceptionalist Socialism”.

Bush’s socialism was also closely intertwined with his professed Christian faith. Much of the government’s power under Bush was focused on carrying out tasks that were associated with the Christian right. And these policies are as Socialist as any others which seek to use government power to impose a philosophy on the people of a country.

Likewise, it must also be said that while the redistribution policies may not have increased much under Bush, they did not cease altogether. Likewise, the tax-cuts he implemented notwithstanding, Bush did not fundamentally change the socialistic nature of the U.S. government, and, in his own way, enhanced it.

Finally, Bush initiated the use of military force in an effort that is, all but technically, a war. War is a fundamentally Socialist undertaking. For a successful war effort to be made, the power of the State must be increased. That Bush and his Administration appears to have been unwilling to admit this fact does not disprove it. Furthermore, Bush’s attempt at waging a “capitalistic” war through the use of private security contractors and the effort to avoid actually paying for it proves the Socialistic nature of War by its very failure. And, in what is shaping up to be the defining issue of the administration, it expanded the power of the government to encroach on what were hitherto considered rights of private citizens in the interests of defending National Security. (The “greater good” that is at the core of all Socialist thought.)

The true Capitalism, of, say, Ayn Rand, is a philosophy which tells its adherents to enrich themselves through production of goods and trade. This is a philosophy to which war is indeed alien. A successful war is waged only by making the Individual sacrifice for the sake of the Team. Similarly, no True Capitalist would engage in “faith-based initiatives” and foreign aid, as Bush did.

Hence, Bush’s brand of Socialism differed from Obama’s in that (1) It placed more emphasis on the use of governmental power for the purposes of advancing the religious beliefs prevalent in the administration and (2) it encouraged the United States to act unilaterally in advancing its interests.

Nor was Bush’s Socialism a fundamental shift in the American philosophy of government. The American government has been, at least since FDR, a socialist one. So too have been all subsequent Presidents, except perhaps Ronald Reagan. And even if Reagan was indeed a Capitalist, he did not change the nature of the government.

Now, it is true that, generally speaking, Republicans are less like stereotypical Socialists then Democrats. The Republicans obviously prefer to cut taxes, and profess to believe in smaller government, less government intervention in matters of business. On the surface, at least, it would seem that they are right to claim they are not economically socialist like the Democrats.

Yet, there are still divides in the party, even in the matter of business. Many Republicans support the criminalization of drugs such as Marijuana. This not a pro-business move. Indeed, it means the use of tax dollars to suppress a substance that people take for pleasure. One can imagine the outcry if Democrats proposed similar measures for, say, soda or alcoholic beverages. The libertarian wing of the party may object; but the fact remains that many Republicans support this anti-capitalistic behavior.

Thus, while it is justifiable to claim that Obama is a socialist, it is nonetheless very remiss to pretend that his philosophy is a “new” or “alien” one to the way America has for some time behaved. He may be more of an internationalist than has been previously seen, but this itself is an unremarkable development. The trend of globalization to some extent necessitates that existing socialistic codes evolve to account for this.

In closing, I must note that government inherently attracts Socialists to it, and the power granted to those in government must, I think, encourage the Socialistic tendencies in all people. Individualists do not seek office. “All world-improvers are Socialists” wrote Spengler. I have always interpreted this comment to mean not that all who actually do improve the world are socialists, but rather that all who believe themselves to know what is best for all people are socialists. And it is just such people, whether from the Republican party or the Democratic party, who seek office.

It’s not good news, but it’s less bad news than we thought.

As I have said, if the economy starts to improve from now till November, things might go better for the Democrats in the midterm elections than people are predicting. And, just based on gut-instinct, I feel like the business cycle is starting to swing away from the “bust” and more towards… well, not a “boom” exactly, but something less like a bust.

Chances are that if the economy gets much better, they will probably do okay in November.

If it gets worse or remains the same, they will be swept out in a tidal wave of voter anger.

Whether or not they pass the health care bill is irrelevant.

According to CNN, the Tea-Party-supported principles include:

  • Fiscal Responsibility.
  • Lower Taxes
  • States’ rights
  • National Security.

My opinion is that anyone who tries will find it very difficult to achieve principles #1 and #2 at the same time. The Laffer curve is not that powerful, if it even exists at all. And “National Security” is so far better under Obama than it was under either Clinton or George W. Bush after their first years. So I’m not sure what their movement would really do if given power. Even supposing that tax cut multipliers are much larger than economists think, they cannot balance the budget based solely on that.

As near as I can tell, the optimal strategy according to this movement would be “militaristic Keynesianism,” which would mean cutting taxes, and increasing government spending by vastly increasing expenditures on the military (to further National Security) while making cuts elsewhere. The resulting stimulus from these increased outlays would hopefully get the economy back to full employment, at which point the military spending would be curtailed as well, and the increased wealth produced by the hopefully-booming economy would allow for deficit reduction. (I can’t figure how states’ rights is involved. I suspect it’s a euphemism for overturning Roe v. Wade.)

 That’s the ideal scenario for the Tea-Party. Frankly, however, I really doubt whether the deficit can ever be eliminated altogether by this method.  I think that, at any time, they can have at most 3 of the 4 principles adhered to. 

Paul Krugman writes

“Suppose, for example, that Congress took the advice of those who want to ban insurance discrimination on the basis of medical history, and stopped there. What would happen next? The answer, as any health care economist will tell you, is that if Congress didn’t simultaneously require that healthy people buy insurance, there would be a “death spiral”: healthier Americans would choose not to buy insurance, leading to high premiums for those who remain, driving out more people, and so on.”

If this went on long enough, eventually it would mean no one would have health insurance. It would destroy the health insurance industry. They’d come asking for a bailout. The government could be forced to take them over. The government would now control health insurance. It would be impossible to abolish this program once created, so it would be a de-facto public option, even once the industry recovered . Ta-Da!

As John Hodgman would say, you’re welcome.