Let’s Skip the War and Just Force the Spending

First, I must be sensitive to my last post Narrative Fallacies Are Kind of Like Porn if I am going to avoid exposing myself to the same ridicule I dished out.  So I’ll try my best not to create a narrative fallacy here, but I may allude to them as they exist in the common zeitgeist.

That aside, I was inspired by an article in today’s New York Times titled Reinvention or Recovery? by David E. Sanger.  The article, well worth reading, is well sumarized by the opening sentence:

As President Obama and Congress barrel toward the latest emergency program to resuscitate the American economy, one question is looming over their search for a cure: Can the government fashion a fast and efficient economic stimulus while also seizing the moment to remake America?

My argument here is one for the latter, seizing the moment to remake America, and moreover, to remake capitalism into something sustainable and something obtainable by all nations.  As I have heard it said and written before, an economic crisis is a terrible thing to waste.

Few would argue against the idea that the Great Depression bred a fertile environment of tension and discontent.  The common narrative fallacy concludes that such a platform either helped or caused events that ultimately led to World War II.  I happen to accept that the war was at least in part a result of the depression, and the great discontent in Europe.  More importantly, however, I do believe that the end of the depression came as a result of the call to arms, the great mobilization of American labor to support the war effort.  While FDR’s New Deal policies injected an equal amount of liberal ideology with government spending in the years prior to the war, there remains some argument around whether or not the New Deal actually ended the depression, and argument which is currently supporting GOP opposition to Obama’s $800+ trillion stimulus plan.  What is hard to argue against, however, is that the massive amount of government spending that funded America’s entrance into the Great War directly fueled the prosperity that followed the war’s end.

Government Spending as % of GDP

Government Spending as % of GDP (Source: USA Today)

The above chart is from a recent USA Today article. The chart noted that government spending peaked at the height of the war at 43.6% of GDP, a truly astonishing number compared to today’s elevated 20.7%.  The article is critical of the current spending plan, as are a number of fiscal conservatives.  At the same time many of the same critics are also pushing for protectionist policies, seemingly unaware that trade protectionism was another component that created global discontent and tension prior to WWII.  In fact, the inclusion of a “Buy American” campaign is another example of the shortsightedness within the GOP and something that would certainly create conflict with all of our current major trading partners.

Unfortunately the Obama administration is considering such a policy to win broad accord.  My growing concern about the Obama administration, in stark contrast to his predecessor, is that he seems addicted to broad support.  I hope he knows or learns quickly that he cannot please everyone all of the time, and that beating, not coopting the opposition is part of the game.

In short, I am beginning to feel as if history may be repeating itself with vivid clarity.  If we prove to be on a similar path that we were on in 1933, then I only hope we can skip the physical war to get to the same end we achieved in 1945 and the subsequent prosperous years.  Let us support massive government spending, with transparency and wisdom as driving forces.  Let’s use our one get out of jail free pass to help construct a natural order much like the order inspired by our founding fathers.  Our founding fathers set up a system for democracy that remains healthy today, highlighted by the election of our first African American president.  Capitalism and democracy are not the same.  They require separate rules and to date capitalism has  come in many forms.  We need to end imperialistic capitalism, and set out the standards for organic capitalism, maybe even social capitalism.  Capitalism is the best economic system we have found, and we need to ensure its survival in as many years.

From my soapbox; my dogma in a rant:

Let’s make this war one of global economic sustainability for all free nations.  That is something that un-free nations can aspire to.  Sustainable economic development and global prosperity can unwind tyranny and dictatorships.  Let’s fight the urge of trade protectionism, the old economic paradigm, and the tyranny of ignorance.  Let’s fight for energy independence, through global cooperation.  Let’s fight for freedom afforded by economic stability, education and acceptable healthcare for all.   Building a new paradigm will create jobs.  Building a new paradigm will also cost jobs.  But a new paradigm for global prosperity will force us to retrain the global workforce.  It will crush unsustainable industry, and it will be painful in the short run.  But we can fight short term pain for long term prosperity.  We cannot continue to avoid transient pain out of fear.  Short term solutions only prolong the inevitable outcome.  Let’s accept the mistakes of our parents, and not force that we repeat them on our children out of a vain sense of entitlement disguised by working to return to the old status quo.  Regardless of the means, our current end game will require that we rewrite the rules as we are all part of a natural order.  Natural order has a law of sustainability that forces systems into long term equilibrium.  The system that is currently flat lining was not sustainable.  Why should we wait for an enemy to unite our efforts?  Why do we need an enemy to inspire us to improve our lot?  Our biggest enemy today is still ourselves.  If we don’t change things, that may no longer be true.

We are at the bitter end of the Industrial Age.  The Industrial Age was unsustainable on a global scale.   We cannot continue to pollute, to deplete natural resources or to consume unsustainably.  We cannot continue to waste human, natural or economic capital.  We cannot build peaceful nations with dramatic social or economic inequality.  One way or another social or natural order will create just enough chaos to re-level the playing field.  We are currently lucky to be experiencing only economic chaos.  If not treated radically, however, our current economic chaos will turn into global social chaos.  If need be that social chaos will force the kind of spending upon us to fight a new war, one of ideals masked by national security.  And once again, we would be fighting to defend capitalism.  Let’s let Keynes help us buy time to defend capitalism at home so we don’t need to fight for it abroad.  Big government is not a permanent solution either, but it would be better to have it without the war.  There is little doubt that we would win such a war, but is it really necessary?

If we can instead fight to build a global system that can support the development of the third world and allow the first world to continue in a sustainable manner, then we can can avoid much of the human conflict that is growing in the shadows today.

Reinvention or Recovery?
David E. Sanger, New York Times, February 01, 2009
http://mobile.nytimes.com/article?a=307241&f=19&single=1Narrative Fallacies Are Kind of Like Porn

Narrative Fallacies Are Kind of Like Porn
Greenewable, Greenewable’s Weblog, January 30, 2009

Wikipedia, Accessed January 30, 2009

Federal share of economy soaring
Richard Wolf, USA TODAY, December 10, 2008

2 Responses to Let’s Skip the War and Just Force the Spending

  1. Richard says:

    The US could take a leadership role in developing the third world, but only if we undergo a major sea-change. Capitalism as it is practiced today is at war with the third world. Instead of trying to establish a sustainable international economy that would benefit third world countries, we are plundering them to benefit ourselves and a few other economic powers. The middle eastern wars are a perfect example. Do you think we would even be there if Iraq wasn’t on top of a major oil field?
    There would have to be a major upheaval in our international policy to bring about the ideal you espouse, but I don’t think at present our leadership has the will to make that change. We see the third world as competition for dwindling resources, not as possible partners in a sustainable world economy. Unless we break out of the shell of our present world view, we will just continue on this same downhill trajectory toward a world economic collapse. Is there any hope that we can change our policies? At present, I’m not sure. We’re like drug addicts who know they are destroying themselves, but just don’t have the will power to quit. I don’t know what it will take to change us, but I don’t see it happening in the near future with our present national state of mind. We don’t want to get out of our comfort zone, even for a little while. It doesn’t seem to matter that the alternative is economic disaster. People just can’t seem to look that far down the road.

    • greenewable says:

      I agree with your comments, and regarding your question on whether or not we can change our policies, I don’t think its a question, I think it is inevitable. The only question which also supports your point is how much blood will have to be shed to get there. My sincere hope is that nuclear proliferation will act as the ultimate deterrent to full scale global conflict. At some point, though people will stand up to be counted. When that happens our hand will be forced.

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