After America - Mark Steyn [47]
And then, just to pile on, the government steps in to replace all that dead imaginary money with real (or realish) money. Having, in effect, colluded in the destruction of meaningful risk-evaluation, Washington decided it was obliged to act—not to prevent a Thirties-style “credit crunch” but to prop up an unsustainable form of mock credit that had led to the crisis in the first place. The state’s response to the downturn was to insist that we needed to re-inflate the credit bubble. If someone punctures your balloon, you can huff and puff into it all you want, but you’re never going to get it up in the air again. The Obama administration blew a trillion dollars of “stimulus” into the punctured credit balloon, and it flew out the gaping hole in the back, dropped into the Potomac, and floated out to sea.
“Borrowing,” continues Polonius, “dulls the edge of husbandry”—and that goes double for government, whose husbandry is dulled in the best of times. The state spends too much. So the individual spends too much. The state hires too many people on whom it lavishes too many benefits. So those foolish enough to remain in the private sector have to pay for the benefits of the public sector, and fund both their basics (housing) and their baubles (plasma TVs) through debt. At the start of the Reagan administration, America was the world’s largest creditor nation and its citizens had a 10 percent savings rate.105 Not today: By 2007, the average U.S. household had debts equivalent to 130 percent of income.106 Keynes’ view of the economy derived from the premise that a government treasury was not a family purse, and so the state, unlike the household, could borrow to “invest.” Now, the family purse has caught up: Governments and individuals alike borrow extravagantly—and to “consume” in the most transient sense rather than invest in anything meaningful.
SLOW BOAT TO CHINA
The intellectual cover for America’s structural deformation was provided by “globalization.” Some of us have always been in favor of the “global economy.” If I want to buy a CD or a sofa, I don’t think it’s any business of the government whether it comes from Cleveland or Milan or Ougadougou. As Adam Smith and John Stuart Mill will tell you, free trade has been indispensable to economic vitality from the Netherlands to Bengal. But you no longer hear much about “free trade.” That humdrum, prosaic supply-anddemand concept yielded to a glittering new coinage: “globalization,” less a commercial mechanism than an ideology.
But what does this mysterious metaphysical force called “globalization” actually boil down to? At the end of 2008, a few weeks after Barack Obama’s historic election, the media reported on America’s Christmas shopping spree. “Retail Sales Plummet,” read the headline in the Wall Street Journal. “Sales plunged across most categories on shrinking consumer spending.”107
That’s great news, isn’t it? After all, everyone knows Americans consume too much. What was it that then Senator Obama had said on the subject only a few months before? “We can’t just keep driving our SUVs, eating whatever we want, keeping our homes at 72 degrees at all times regardless of whether we live in the tundra or the desert and keep consuming 25 percent of the world’s resources with just four percent of the world’s population, and expect the rest of the world to say, ‘You just go ahead, we’ll be fine.’”108
And by jiminy, we took the great man’s words to heart. SUV sales nosedived, and 72 is no longer your home’s thermostat setting but its current value expressed as a percentage of what you paid for it. If I understand the president’s logic, in a just world Americans would be 4 percent of the population and consume 4 percent of the world’s resources. And in his first year in office we made an excellent start toward that blessed utopia: Americans were driving smaller cars, buying smaller homes, giving smaller Christmas presents.
And yet, strangely, the Obama administration