Originally Published in Flourishing May/June 2010
Some of you will disagree with what I say in this article, including some members of my own family. (But, Superman agrees with me.) I tell you that to remind you of two things: First, I have no partisan ax to grind. My political hero is George Washington, and, unfortunately, he’s dead. I’m interested in political philosophy, history, and economic science—not partisan politics. Second, this newsletter is a labor of love, written with nothing but my clients’ interests in mind, and I think you deserve my honest opinion on issues that affect all of us. Happily, the feedback I’ve received from clients over the years has been decidedly positive. As always, agree or not, I thank you for your business.
Do you remember how people were outraged by the Bush/Paulson $700 billion bank bailout? Or the $180 billion for AIG? Or President Obama’s dismissive treatment of Chrysler bondholders and the auto industry takeovers? Then, we saw the passage of an $800 billion stimulus package, with its litany of mostly irrational, hastily conceived supposedly shovel-ready projects. In my opinion, this was all unnecessary and mainly helped a few politicians and their business associates, some influential labor unions, and state and local governments.
Then there was the 2010 federal budget deficit of $1.4 trillion. The national debt, which was 50% of the Gross Domestic Product (GDP) in 2008, will approach 80% of the GDP by 2012. This program was sold primarily as a “jobs creation package”; yet, unemployment remains at nearly 10% of the American workforce. (http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf)
Now we have Obamacare, with concern from some of the American people, using tactics that politicians used to their advantage. It was uncomfortable for me to watch, as one legislator after another voted for this legislature. It now seems likely that those 2700 pages will add at least $1 trillion, possibly $2 trillion, (who can really know?) to our nation’s debt.
Spending of this magnitude is unlike anything Americans have ever seen—allowing for the wartime spike of 1942 to 1945. What scares people, I think, is that today’s spending doesn’t look like a spike; its shape is an asymptote to indigence. In my opinion, this fiscal irresponsibility will diminish their freedom, their quality of life, and their children’s futures. On the other hand . . .
The entrepreneurial spirit that defines America is too powerful to be swept away. Many Americans take their responsibility for their won lives quite seriously. They value their independence and the freedom to structure their lives as they see fit. They resent being subject to policies created by opposing politicians and bureaucrats, and, if you please, to policies supported by people who expect to be taken care of by politicians and bureaucrats. Some Americans are of an ambitious breed, not keen to trade self-determination and affluence for extended unemployment benefits and a healthcare queue. They do not want the government to run care companies, banks, or clinics.
Besides, the disparity between President Obama’s campaign promises and his governing style are now too apparent. People expected transparency and tolerance, not duplicity and disdain. The President and Robert Gibbs can slander the tea party movement, if they like, and at the risk of their own credibility; but I believe most tea-partiers are neither bullies nor bozos. In fact, some surveys have shown that a majority—particularly the organizers—are well-educated women. (http://volokh.com/2010/04/15/national-survey-of-tea-party-supporters–done-by-the-new-york-times-and-cbs-news/) Nor are they Tim McVeigh types, as some have suggested; I see them as Patrick Henry types. They’re our neighbors, driven by their dedication to freedom. They know American history, and they respect our founders’ Constitution. They are, for the most part, members of America’s honest, intelligent, and productive middle class. As the Wall Street Journal has noted, when President Obama vilifies and denigrates those he’s elected to serve, he dishonor’s himself, not the targets of his invective.
I’m confident that most Americans still have an inbred love for liberty. Most take appropriate pride in their personal achievements. Just look around, or better yet, in the mirror. Then look at Greece, a European country where those who live on the dole outnumber productive citizens. That country is quite literally bankrupt and it appears to me as if it’s the freeloaders who are taking to the streets to defend their nanny-state entitlements in violent demonstrations. Some people worry that America is heading down that same path. Maybe we are; but I don’t think so.
Just consider this difference. In America, it’s the producers who are taking to the streets, and peacefully so. The tea party movement is a non-violent, grass-roots campaign for fiscal responsibility and a more limited government. I think the tea parties foretell a dramatic and overdue return to America’s founding principles, and more prudent economic and fiscal policies from government at every level. Mh
The above material reflects the opinions of Michael Harvey and not those of LPL Financial.