“Never Let a Crisis Go to Waste”

August 10, 2010

by Mario Rizzo  

“They are opportunities to do big things.”  

I don’t find myself agreeing with Rahm Emanuel very much. However, he has a good point. Franklin Roosevelt used the Great Depression as an occasion to make permanent changes in the US economic system by creating programs and regulatory agencies that did not vanish when the depression ended. 

When I read stories about the budgetary “crises” facing most state governments as well as the long-term debt problems of the federal government, I can’t help but see an opportunity here. Of course, there is the familiar cast of characters, now including Alan Greenspan, seeking to plug holes in the dyke by tax increases. These would have to be much, much higher to put a dent in state and federal fiscal troubles. Americans won’t, and should not, tolerate higher taxes.  

Business cycle issues aside (most recessions end regardless of what the government does or doesn’t do), we ought to be focusing on the potential for real downsizing of government. Unfortunately, it will not come in an orderly and painless way. There are those preaching austerity – but not yet. Do they really believe that when times are good, governments will retrench?  

The opportunity is here. At first, interest groups will prevent attempts to cut either “discretionary” or “entitlement” spending. And then the system will begin to crack with public pension defaults perhaps leading the way, followed by Medicare and Social Security. Soon all will benefit from cuts more than they lose.  

It will not be a pretty sight. But it is the only way we are going to see a real retrenchment in the state. Many innocent people will suffer. But as a political culture we have mocked reality long enough. The ultimate fault does not lie in the crisis or failure to raise taxes but in the long period of acquiescence most Americans have displayed in the face of growing Leviathan.  

Dare I say it?  In the long run “we” shall all be better off.

25 Responses to ““Never Let a Crisis Go to Waste””

  1. Thomas M. Hermann Says:

    I think this is wishful thinking. More likely, we are on the road to a European style social democracy. Band-aid after band-aid will be used to perpetuate the system and the status quo. While that system disgusts me, I don’t think it will change without violence, which disgusts me more.

    Give up on substantial change in governments, it’s time for seasteading. :-)

  2. Bill Stepp Says:

    I agree with Thomas M. Hermann’s point that violence will be necessary to change the system. A future civil war is likely.
    But why is the prospect of this disgusting?
    Was the prospect of the American Revolution disgusting? I mean apart from the inflation used to finance it, the Test Oaths used to keep loyalists in line (which the so-called libertarian Tom Paine endorsed), and other acts inconsistent with fighting a just war.

    What we need is a second American Revolution, one that is not reversed by an anti-revolutionary constitutiion, which should be taken out back and burned.

  3. Roger Koppl Says:

    I seem to be much more of a statist than Bill Stepp. I’m pretty afraid of civil war and I don’t like the idea of revolution one little bit. I think it is a basic principle of prudence that established governments should not be changed because of light or temporary issues; I think historical experience has shown, that people are generally more disposed to put up with bad governments for as long as possible, rather than fix perceived problems by abolishing the forms to which they have become accustomed. I think that view of prudence implies that European-style government such as that in France or Italy is much better than the dangers of revolution. I have lived (for short periods I admit) in the hell of no fewer than four West European social democracies and lived to tell the tale. It was really not so bad at all. Indeed, there’s plenty to love over there even if I would personally prefer more liberal state policies.

  4. Mario Rizzo Says:

    I think change can happen without violence.But it takes a “crisis” as my good friend Rahm points out.

  5. Troy Camplin Says:

    We also forget that every revolution except the American Revolution resulted in a government far more oppressive than the one overthrown. History shows we would be far more likely to replace the current government with a worse one. What we need is a marginal revolution.

  6. Mario Rizzo Says:

    “marginal revolution” Very good.

  7. Daniil Gorbatenko Says:

    I think at first it will be more of a mass secession of conservative states than a violent revolution.

    The question is how the central government will respond. Will it repeat the tragic decision of the North to keep the South in the union by force? I hope not.

  8. Bob D Says:

    There are signs that the revolution has already started. The Tea Party, is an example as is the recent protest of excessive municipal salaries in Bell Ca.. People are becoming aware that they are being ripped off by the ruling class and their public union cohorts.

  9. Bill Stepp Says:

    I think the seasteading option is a non-starter. I agree that revolution-by- seccession is the way to go. Sounds marginal enough to me; but I think the “Union” would do whatever it thought necessary to preserve itself, Lincoln-style.
    Some people in New Hampshire have bruited the idea of seccession. “Live Free or Die” and all.

  10. James Pier Says:

    I think Mario Rizzo is pretty close to predicting how the revolution will play out. It will not be violent, and there won’t be secessions. What is necessary is a long-term transformation in the ideas that create the political environment that makes a sea change possible. It took 100 years for progressive ideas to get us to where we are. Free enterprise and the Constitution have resisted along the way, slowing the process materially. European democratic socialism is three decades ahead of the US in proving the fallacy of the ideas on which it is based, and will therefore serve to energize the revolution in ideas in the US as more and more nations suffer the fate of Greece. What is needed now is a new popularization of the economic ideas and knowledge of people like Hayek, Rizzo, Thomas Sowell, the George Mason economists, etc. Writers and commentators and political leaders that can translate these ideas to a mass audience must come to the fore. This is a 50+ year process that has yet to begin in earnest. Many Americans who entered the work force in the ’80s and later have been prepared not to count on entitlements. It is we who will prove receptive to the painful but gradual reduction in the size of government. The battle for liberty is never permanently won. There is no guarantee that this will happen, but as Mario says, the opportunity is here now.

  11. James Pier Says:

    re Mario’s statement that “Many innocent people will suffer”: I agree with Mitch Daniels that it will surprise people how much government spending they don’t miss. An honest look at Paul Ryan’s “Road Map” will conclude that the process need not be cataclysmic.

  12. Bill Stepp Says:

    James Pier says:

    “It took 100 years for progressive ideas to get us to where we are. Free enterprise and the Constitution have resisted along the way, slowing the process materially.”

    Free enterprise has been hijacked aplenty.
    Is Government Motors, to pick one, free enterprise? What about the local farmers groveling in their subsidies?
    The Fed, the income tax, and the estate tax are all foursquare with the Constitution.
    The commerce clause was also highjacked by the SCOTUS in, I think, 1877, and then again during the New Deal.
    It seems to me that the Constitution aided and abetted the process of statism materially. That’s why I call it the Conjob. Spooner might have adopted the term in one of his ringing denunciations of it.

  13. James Pier Says:

    Reply to Mr. Stepp:

    I said the Constitution served to resist the process of statism. I did not claim that it stopped it. The Senate’s role in limiting the damage of Obamacare is an example of what I mean. It could have been worse — were it not for the existence of the Senate, we would have the Public Option.

  14. Othyem Says:

    Roger Koppl: “I seem to be much more of a statist than Bill Stepp. I’m pretty afraid of civil war and I don’t like the idea of revolution one little bit.”

    I’m not a statist by any means and I recognize how utterly foolish an idea such as “revolution” is, especially one that leads to civil war. Going to war for “freedom” smacks of nationalism, and is the result of too many years of thinking that this piece of ground we stand on and that “magical” concept of government are worth dying for. Why risk my one and only life for things that are merely concepts? REAL violent threats, such as genocide, sure, I’ll fight for that. But to give my ONE and ONLY life for such an abstract notion? No thanks. I’ll live in a social democratic state any day of the week rather than die for such a silly thing.

  15. Richard Ebeling Says:

    There is a rather good article in the July/August 2010 issue of “The American Spectator” on ‘America’s Ruling Class – and the Perils of Revolution’ by Angelo Codevilla.

    It is really an updated restatement of the classical liberal idea that there is a “class conflict” in modern society, but it is between those who wish to peacefully go about their personal and productive business in the market place vs. those who wish to use the authority of the state for power, plunder, and privilege.

    What needs to be overcome (among other things) in modern society is the myth of democracy that “we” rule ourselves, and “we” therefore can never tyrannize or oppressive or “exploit” ourselves.

    If classical liberal “class” analysis combined with various aspects of Public Choice theory can succeed in weening our fellow citizens away from the mythology of democracy, the door can be opened to a serious revival of the liberal ideal of individual liberty and civil society.

    This can be a “revolution” of ideas, rather than a revolution of violent action.

    Unless the intellectual and ideological climate is changed first, any radical “moves” in the political arena will threaten to lead to a far worse outcome.

    To understand the intellectual enemy and the philosophical and political rationale he presents for a “good,” “socially just,” and collectively minded social order, see the recent restatement by historian Tony Judt, ‘What is Living and What is Dead in Social Democracy,’ “The New York Review of Books,” (December 17, 2009).

    (You will also see that according to Judt we are the victims of the triumph of the ideas and politics of people like Mises, Hayek, Schumpeter, Drucker, and Popper, who undermined the communitarian ideal of social democracy by the false claim that it leads to tyranny and in its place a false ideal of individualism.)

    Judt was not a fool. He was a learned and often insightful historian and analyst of European affairs.

    But in this piece are all the elements of the continuing rationale for reducing the market order to a secondary place in human affairs, for it is through the state that we share a common sense of belonging and through which we achieve common goals beyond and superior to the self-interested profit motive.

    Richard Ebeling

  16. Troy Camplin Says:

    I’m in favor of a cultural revolution. Songs, poetry, plays, short stories, and novels will go a long, long way toward helping to create the world we desire. But they have to be GOOD songs, poems, etc. first and foremost. Never replace a good story with didacticism. But we have to change the culture first, then the legislation will follow.

  17. James Pier Says:

    Mr. Camplin –

    I wholeheartedly agree with you about the importance of cultural revolution, especially your emphasis on quality. But the influence of ideas in the intellectual, media and political environments is too powerful to dismiss. The canard that ‘deregulation’ caused the ‘crisis’ of 2008 found a receptive audience because of decades of liberal dominance of academics and politics. Advocates of liberty cannot expect a change in the cultural environment if we continue to leave the schools and universities to the statists.

  18. Troy Camplin Says:

    Where do you think ideas come from? Ideas are first tried out in the arts. Philosophy codifies those investigations. And then those ideas enter the political realm — some in a bottom-up fashion, through the public; others in a top-down fashion from intellectual elites. But conservatives and libertarians need to care as much about the culture — as in cultural production — as do the Left. Artists know on which side their bread is buttered, so we shouldn’t be surprised that the arts are dominated now by Leftists. Who buys books of poetry, or even literary novels? Attend plays? Now, you may say, “If plays I wanted to watch were being produced, I’d attend them,” but the fact is that nobody believes people who say that. They believe people who attend plays and either continue to see them or refuse to see one or two. If they don’t think you’re in their audience in the first place, why should they produce anything you would like? If I write a play with libertarian themes underlying the plot (and I do), who is going to come see it? In other words, we have to participate in the culture to change it, rather than just disregarding it.

  19. James Pier Says:

    I am inclined to challenge your argument that ideas are generated in the arts, then find their way into philosophy and finally into politics. It doesn’t seem right to me. Did Marxism, for instance, somehow originate in the arts?

  20. Troy Camplin Says:

    Aristotle’s “Poetics” is really about ethics and action. He uses tragedies as his examples.

    Socrates admits to being influenced by Euripides. Plato was a tragedian before he became a follower of Socrates and then a philosopher. Plato’s “Phaedurs” appears to me to be a satirical commentary on Euripides’ “Hippolytus.” Plato was constantly referencing Homer and responding to him.

    Hegelian dialiectics had its origin in Aeschylus’ Oresteian trilogy.

    Nietzsche’s entire philosophy is a response to tragic literature and to the German arts in particular.

    Voltaire often developed his ideas in his literary works. Rousseau developed his theories of education in a novel.

    Of course, it is in fact very much a dialogue. Milan Kundera responds to Nietzsche, who responds to Goethe, who responds to Rousseau.

    Marx responds to Hegel, who develops the idea of the dialectic from ancient Greek tragic structure.

  21. Troy Camplin Says:

    Fiction (including plays) creates “what if” scenarios. Poetry stretches the language and, thus, meaning. The visual arts stretch perception.

  22. Dain Says:

    Unfortunately for those of us bitten by the “obtusely hyper rational” bug ala people like Robin Hanson, libertarian themes in the arts are a disappointing prospect due to the inevitable reliance on good and evil (or let’s just say “bad faith”) usually found therein.

  23. James Pier Says:

    Really? The human drama in Shakespeare, for instance, would be spoiled if it were set in a different political environment? I doubt that. It seems to me that drama and comedy come from the portrayal of human relationships, regardless of the times. If Troy can create a captivating drama set in a visionary ‘what if’ America where nobody depends on the government and government doesn’t regulate daily life, he can still find plenty of good and evil to portray. Liberty does not remove the humanity from humans. Does it?

  24. Current Says:

    I think there are all sorts of interesting storylines and characters that can be drawn from libertarian and economic ideas.

    The books by Robert Heinlein are famous, but there are many other good examples in Science Fiction. “Snow Crash” by Neal Stephenson would be one example, many of the books by Jack Vance such as “Emphyrio” and stuff by Poul Anderson.

    I think the challenge is bringing it over into the modern novel from sf.

  25. Troy Camplin Says:

    Indeed, both Shakespeare and SciFi are good examples. Shakespeare’s works are full of liberal ideas — in fact, Shakespeare probably contributed as much or more to the foundations of classical liberalism as anyone. SciFi has been one of the main genres which have developed libertarian ideas within the arts. The poet Frederick Turner has done so with his SciFi epic poems. But such ideas do need to be mainstreamed.

    This is what I try to do in my own works.

    An excerpt from one:

    http://zatavu.blogspot.com/2009/03/cain-apocalypse.html

    Summaries:

    http://zatavu.blogspot.com/2008/10/synopsis-and-character-list-for-vice.html

    http://zatavu.blogspot.com/2008/10/synopsis-and-characters-of-sandy-keenan.html

    http://zatavu.blogspot.com/2008/04/synopsis-and-characters-of-reflections.html

    http://zatavu.blogspot.com/2008/01/synopsis-of-hefs-bunnies.html


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