Author's Note: This piece was originally sent to REASON right around Christmas of 1999. Apparently, REASON no longer publishes detailed letters critical of the ideological stances of its editors. I have elected to offer a version of the letter on this web page, because I believe those who might find it of interest or value ought to be able to read it. Because space limits are less of a constraint, I have added a few lines here and there; but to be as true to the original as possible, I have endeavored to keep the additions as minimal as I could.
Nick Gillespie's column "Boom and Gloom" (REASON, January 2000) was disappointing. It makes the all-too-common assumption that one can focus exclusively on economic indicators and ignore the larger culture--including common economic behavior. Gillespie makes the most common mistake today: getting caught up in the prevailing euphoria of the moment and losing sight of the Big Picture.
Most of those writing about today's U.S. economy look exclusively at one thing: the amount of money being spent. No one doubts that enormous quantities of money are exchanging hands. E-commerce makes it easy to spend. One can sit at one's computer and spend hundreds of dollars in a matter of minutes--all of it on credit, of course.
Neither Gillespie nor anyone else in the booming-economy crowd notes any of the following:
(1) The 1990s have been the scene of the most massive credit expansion in U.S. history
(2) Credit card debt rose from $243 billion in 1990 to $560 billion by 1997, with roughly 60 percent of Americans carrying personal debts of over $7,000 (undoubtedly these figures are higher today).
(3) For the first time since the Great Depression, Americans are spending more than they are earning. Personal savings have plummetted partly because of the ease of credit-spending and the highest federal and state taxes in history.
(4) The stock market--particularly the so-called dot-com stocks credited for creating overnight "millionaires" through the offering to employees of lucrative stock options--is inflated beyond all reason, a product of the micromanipulation of the economy by our central bank, the Federal Reserve.
(5) The family unit, meanwhile, is weaker than at any time in history. This is because the instant millionaire is the exception instead of the rule. The average family has actually lost ground during the 1990s because of the declining value of real wages. People are working longer hours for less take-home pay. Many parents are working two, sometimes three and sometimes four jobs between them. And then we wonder why their children are in trouble! Being an instant stock-option millionaire is not some kind of new norm. Having to subsist on less than 25K a year in a post-NAFTA economic landscape where well-paying middle-management positions are being systemically replaced by low-paying "temp work" or "service sector" jobs; that is the norm. A recent report by a private market and technology consulting firm, Annex Research, documented the truth about the "services sector," which in 1998 accounted for 73 percent of all American jobs, and where wages subsist at a pathetic $7.26 per hour.
Obviously, these trends cannot continue indefinitely. It is not just that the segment of the population trapped in a world of starvation wages is getting restless. Credit expansion is trouble, as real economists such as Ludwig Von Mises and Murray Rothbard pointed out in their numerous works years ago. There are grounds for skepticism about the coming "roaring 2000s," as one boom-enthusiast calls it in a popular book of that title. Our economy is animated by a huge and growing financial bubble. Bubbles eventually burst. It is useful to remember a central premise (or so I thought it was) of Libertarian thinking: the economic world works according to laws the same as everything else. It does not respond too well to mindless euphoria or wishful thinking. Sooner or later, resolute ignorance and head-in-the-sand approaches are punished.
We have to look at both the larger culture and the contemporary political Establishment in this country to understand the discrepancy between "official economics" and the real thing. We stand at the end of 40-plus years of educational dumbing down and moral emptying out. The goal of the former has been the effort, much criticized by Libertarians, to make everyone equal. The latter results from the idea that any hint of moral judgment equals "intolerance" and ought to be banished from politically correct, properly relativistic discussion. The result is that educational culture is now a moral sewer. Cheating is epidemic. The average college student cannot write a grammatical sentence, much less think conceptually, much less think critically about the economic situation in America today. The average university professor is too busy pushing her political agenda to care. Small wonder deceptions about the health of the economy proliferate. Small wonder, too, that the feds can report "surpluses" as the total federal indebtedness slowly approaches $6 trillion, and no one asks obvious questions.
Or consider the spate of school shootings that were among the hallmarks of the 1990s (and it almost certainly isn't over, as 2000 has already shown!). Of course, such events are statistically rare. We are told, in another irrelevant government statistic, that crime is falling. In fact, crimes are occurring in ever younger age brackets and have vastly increased in their level of viciousness. Events such as the Columbine shootings did not occur when I was in high school in the 1970s. Not once. At all. Period. Nor did wackos walk into churches and murder Christians in cold blood (Fort Worth, Texas, last summer). Isn't it interesting that while we still hear about Columbine, this latter case has sunk without a trace? The culture is unimportant because the economy is "booming"? Nonsense!
And then there is the political culture of the New Establishment. Lest we forget, in power in Washington is the most corrupt Executive Branch ever. I'm not thinking of Monica Lewinsky, either. The Clinton Regime made covert financial deals with agents of the Beijing government--a self-declared enemy of the United States. The latter ended up with sensitive nuclear technological secrets, and Bill Clinton ended up with the money to finance his re-election. There have been numerous Clinton shenanigans, some of them practically unreported by the dominant media: Filegate, IRS-gate (which occurred when Clinton Regime operatives targeted a lengthy list of conservative foundations for IRS audits during the early 1990s; only the Western Journalism Center blew the whistle on this), the Blood Trail, the list goes on and on. Moreover, the stealth expansion of federal police-state powers during the Clinton-Gingrich era is well documented, along with the attacks on personal privacy at the hands of covert operations such as Echelon. For a period, only Ron Paul (R-TX) and groups of people routinely dismissed as "extremists" stood between the public and national ID cards. This fight is far from over, as new technology now makes it possible to plant ID-type electronic devices under people's skins (the Digital Angel manufactured by a company with the disarming name Applied Digital Solutions.
Gillespie scorns intellectuals not just as doomsayers--"declinists" is his neologism--but by virtue of their inconvenient knack for seeing the Big Picture implicit centralizers and statists. This is a very odd confusion. What of Libertarianism itself? Is it not an intellectual position--or, at least, one with a specific intellectual foundation? It is worthwhile to remember that Libertarians are not exactly setting the world afire selling their ideas to voters and getting elected to anything in numbers sufficient to make a difference. It is not that the public rejects Libertarianism. In my experience, Libertarian ideas are just over many people's heads! College students exposed to them routinely confuse them with do-your-own-thing license (a mindset that is also helping to destroy this country). "Let the market decide" easily becomes a bumpersticker slogan without much more cognitive content. In education, we had best stop our present effort to crank out as many techies as possible, assembly-line like, and try to restore the intellect to the status it once held in American society. Today, the only visible intellectual critic of the political and economic status quo in America is Patrick J. Buchanan, the likely Reform Party presidential candidate who is routinely demonized in the dominant media and also by Libertarians as an "isolationist." To be sure, Buchanan is outside today's mainstream. I am not so sure that isn't such a bad place to be.
No culture which systematically abandons intellectual leadership and moral principles long survives its mistake. It is either conquered or falls from within (we are rapidly doing the latter). Since morals must have an intellectual foundation and justification, we must reject vapid anti-intellectualism. Anything else would be irrational. If Libertarians have turned anti-intellectual in a misguided effort to defend the prevailing irrational euphoria of a booming-economy crowd motivated by short-term greed but with no long-term vision for the kind of country they are helping to create, it will be the final undoing of a moment already in grave danger of withering on the vine.
About the Author:
Steven Yates earned his Ph.D. in philosophy in 1987. He is the author of one book, Civil Wrongs: What Went Wrong With Affirmative Action (San Francisco: ICS Press, 1994) and numerous articles both in academic journals and elsewhere. He has taught philosophy at Clemson University, Auburn University, Wofford College, the University of South Carolina, Southern Wesleyan University--Columbia, and Midlands Technical College, and has held fellowships with or worked on projects with the Institute for Humane Studies, the Heritage Foundation, the Heartland Institute, and the Acton Institute for Religion and Liberty. He currently lives in Columbia, South Carolina, and is dividing his time between his next book, a few articles and reviews, and working at a day job to make the rent payments.
Recommended reading:
The Long Shadow of a Bubble" by Hans Sennholz.
Paper Credit and Imaginary Wealth by Hans Sennholz.
Still Partying on the Deck of the Titanic: Perspective on the New Millennium by Don McAlvany.
Reflections on Prosperity by Anthony Deden.
Is the Economy Really 'Booming' in Massachusetts? John Pike interviews MIT economist Lester Thurow.
Our Goldilocks Economy by Seth Sandronsky.
Too Good To Be True by Larry Elliot.
Email Steven Yates by clicking here
Contents of this web page (C) 2000, by Steven Yates.
