More Lies from the Lying Class
By: Guest Authors
By: James E. Miller
Number one rule for politicians when facing a crisis: deny reality.Â If the market doesnâ€™t buy it, lie through your teeth till the point where even Saturday Night Live canâ€™t get a laugh out of your disingenuousness.
Call it kicking the can, willful blindness, or just plain irresponsibility; there is nothing politicians specialize more in than issuing a bold faced lie to their constituents.Â Take the quickly failing experiment in currency harmony known as the European Union. Â After nearly a year of denying Greece will default, the fat lady of fiscal reality is starting to sing.Â Private investors are agreeing to a 21% bond haircut and a controlled default is being planned for November.Â So what does Greece Finance Minister Evangelos Venizelos do in light of the inevitable default for the birthplace of democracy?Â Vow that Greece will â€œnever go bankruptâ€ of course!Â Thankfully, such decisions are not up to Venizelos.
Today, blissful ignorance isnâ€™t limited to European social democracies; it has a home within the Obama administration. During a recent â€œState of the Unionâ€ interview with Candy Crowley, White House Senior Adviser David Plouffe attempted to defend his bossâ€™s new jobs plan.Â Crowley brought up a quote from â€œnever right, yet still trustedâ€ Mark Zandi of Moodyâ€™s Analytics, which asserted the jobs plan would be short lived;Â â€œ”Beginning in 2013, and certainly into 2014, the plan is a drag on the economy because the stimulus starts fading away. So by 2015, the economy is in the same place as now, as if there were no jobs package.”Â Anyone would be fool to listen to Zandi.Â But like a broken clock, a Keynesian quack can be right at least twice a day.Â And it doesnâ€™t take a genius to figure out that stimulus spending ultimately runs out and leaves behind the dead carcass of undelivered prosperity.Â
Even in the face of such common sense, Plouffe doubled down and twisted Zandiâ€™s message to say that â€œweâ€ must act now to rejuvenate the economy.Â In a direct appeal to the democrat base, Plouffe warns of massive teacher layoffs and a lack of students being taught myths such as F.D.R. saved capitalism.
When reason fails, fear mongering makes for great cover.Â Especially when it involves children.
But as Crowley rightly asserts, â€œhis point is that they (the teachers) will still be laid off once the stimulus money runs out.â€Â Plouffe, knowing full well his goose is cooked, gives the viewer two options: take the pain now, or put it off till next election so that he doesnâ€™t get a pink slip next November.Â He calls it â€œwe can act right now, or not act right now.â€Â My translation is more accurate.
Plouffe, like all bureaucrats in his position, claims that economic growth is coming without a shred of evidence to prove otherwise.Â He boasts that the Obamaâ€™s jobs act will drop the unemployment rate by one percent.Â Having the Fed print off a few thousand sheets of Benjamin Franklins to pay the unemployed to dig ditches would drop the unemployment rate to 0%; whatâ€™s Plouffeâ€™s point?Â Despite what is taught in college economics classes, jobs donâ€™t represent wealth creation, especially those funded through tax dollars.
Whatâ€™s really holding back the economy isnâ€™t the reluctance of governments in industrialized countries to go hog wild in spending.Â It once again comes back to the number one rule of politicians when facing a crisis: deny reality.Â Greece could have defaulted a year ago with bondholders taking a much less expensive haircut than they will now.Â The U.S. housing market, driven by an unsustainable, Fed-induced boom, should have been allowed to collapse years ago; the market would have cleared by now.Â China is finally beginning to curb inflation which is slowing not only its economy but the rest of the world.Â Each of these cases involves government hell bent on disregarding the inevitable and kicking the fiscal can of pain down the road.
We are now witnessing the aftermath of the David Plouffes of the world sticking their fingers in their ears and putting their heads in the ground.Â And like the Candy Crowly interview, it isnâ€™t pretty.