In defense of Michele Bachmann
[City Pages would like to apologize in advance for this pedantic lecture. This was not the author's original intent.]
Look: we know full well that Michele Bachmann is a bipedal, flesh-and-blood embarrassment to our state. Jesus knows we've thrown a few shots her way over the years... and we make no apologies for it.
Having said that, it's only fair to give the vacant-faced smiler her due when she gets it right. And regarding bailouts, our infamous Congresswoman is spot on. Or at least her conclusion is.
In a piece she penned yesterday on The Hill's blog, she lambasts both the financial and automotive bailouts, relying heavily on populist appeals. ("[Bailouts have] been overused by Congress' elite in hopes of rescuing their corporate friends from poor decision-making. It's been used to pick the pockets of the already hurting taxpayer.")
The elephant in the room Bachmann neglects to mention is that bailouts, while theoretically mitigative in the short-term, are disastrous in the long-term. This is especially true in our case, because the bailouts' implicit aim is to perpetuate the very system of credit and inflated consumption that ravaged our economy in the first place. Put in cold terms, this recession, like all recessions, is the market trying its damnest to attain consumption-production equilibrium. The more out-of-wack the equation, the worse the crash. (And yes, we realize how cold-hearted economic theory seems when people are losing their homes/jobs by the thousands. Unfortunately, this doesn't make it any less true).
True, eschewing bailouts and embracing the recession would be painful (understatement of the year). It would, in fact, be abjectly horrible entailing real consequences for real people. But attempting to put off the inevitable via government shenanigans will only make the situation worse, for the reasons clumsily explained above. The longer we delude ourselves into believing the economy can be resuscitated via artificial consumption as opposed to production/saving--that is to say the longer we keep perpetuting the gross imbalances that put us in this position the first place--the more painful/dramatic the inevitable "market adjustment" (don't worry, we hate dehumanizing bullshit jargon as much as you do) will be.
And the Federal Reserve's astounding, Third World Country-esque splurging of fiat currency to fund this madness will succeed only in plundering what little purchasing power consumers have left. (For all the outcry about the $700 billion bailout, bear in mind that the Fed introduced some $1.5 TRILLION via sweetheart loans during the last week of September. Forget inflation. When this chunk of cash makes its way into the real economy we'll be looking at hyper-inflation, and only a fool [or a liar] would suggest that wages can possibly keep up).
Granted, to suggest we bite the bullet now is a luxury afforded to armchair pseudo-economists and those unaccountable to a political consituency. After all, the body politic is demanding action, goddamn it. The fact that the proposed action will only compound our woes seems, amazingly, almost immaterial and/or unthinkable in the national debate.
The reason behind this devolution-in-debate is that both the fear-mongering Right and the tear-mongering Left have politicized, and thereby simplified, the crisis to childish oblivion. ("It's all because of conservatives' deregulation!" "Nuh-uh, the liberals' Community Reinvestment Act is to blame!")
Remember that wrinkled old koot, Ron Paul? Hard to believe now, but before the indefensibly racist drivel came out, the dude was one of the few political figures out there boasting anything resembling a reality-based handle on this conundrum. He spouted a "controversial" idea that, in retrospect, should have been an axiom: that is no entity--government or otherwise--can possibly consume more than it produces. More to the point, it can, but not without eventually crashing back to reality, which is what we're experiencing now. Production, he argued, is the engine of any economy, with robust consumption being the fruit-bearing result... not the other way around. (we know: a looney idea.)
Paul's chief economic advisor, Peter Schiff, was one of the few voices-of-sanity amongst pundits for the better part of this decade. In '06 and '07, his analyses were nothing short of precient. For his efforts, Schiff was villified and laughed at by the talking head ignorati. Now behold the redemptive power of YouTube!