Americans are in pain.
We are in pain because we are being told by the government, the media, and the whiners of society, that the government must rescue us from every calamity, every uncertainty, and keep the pain away. Yet we know, deep in our hearts, what seems to be a law of nature.
Pain, for the lack of a better word, is good.
It is apparently wrong to say it out loud, but we needed the recession, and we still do. I shall now suffer the slings and arrows of outrage, because I dare to suggest that there is anything positive in the discomfort of my fellow citizens.
Now, it isn’t exactly that the pain itself is good. But in striving to get out from under economic difficulty, we improve ourselves and society. It is the stuff of real self-esteem, this accomplishing of things. And more, it is the stuff of virtue.
Every act of virtue requires the acceptance of some relatively certain pain or hardship to spare ourselves some seemingly less certain but greater hardship, or to achieve a greater reward. We admit our failures rather than lying our way out. We save money, forgoing a new possession so that we might have more later. We deny the quick pleasure of illicit congress for the trust of a lifelong spouse. And we volunteer in some civic or military capacity for a greater good. In all of these things there is virtue, and in all of them we deny the present for the future, deny ourselves for others.
But when we look for an easy way out, we often make things worse. When we lie our way out of trouble, borrow to pay creditors, give in to the smallness of carnality, or waste our days instead of helping our neighbors, we at best forestall pain, and typically deepen it.
In the long run, pain is reduced when an individual or company has to face the music for its unfortunate decisions. If the company is too big to fail, then why, pray tell, is it failing? Delaying the pain, by saying that a company is too big to fail, will only make the problem worse. Because when a company knows it is too big to fail, no amount of Pay Czar oversight can make it operate as it should.
And that is just the problem. We are not facing our economic pain. In its misguided “stimulus” plans, its Cash for Clunkers, and its runaway deficit spending, the Obama Administration seeks to apply Keynesian economic theory to the problem of economic pain. Consumers are wisely pulling back, virtuously attempting to face their economic problems. Because of that, the Keynesians despair a lack of demand in the economy and begin spending. But these are not mere drunken sailors, who eventually find their pockets empty, but drunken teenagers who have just found Daddy’s American Express Black card. And they are dumping all of this funny money on the same things that caused the economic mess in the first place.
These policies will fail to revive the economy, in part because they perpetuate the conditions that led to the recession. They will fail because Keynes didn’t account for the adverse negative effects of excess spending. They will fail because they are an attempt to repair a system no one fully understands with just the right the application of brute force.
What we need to do instead is to take our medicine. The pain may be worse for a short while, but we will be better off in the end, and much sooner than the current course will allow.
But rather than facing our problems and taking the medicine we need, wrongheaded liberal mismanagement has prolonged an ordinary economic correction into generational warfare.
It isn’t enough to say that current policies are either wrongheaded or have been bungled. The two are
inseparable. These policies have been mismanaged because they are wrongheaded, and are wrongheaded in no small part because there is no way to manage them well. Both things are true because the government
should not be in the business of managing the economy. It simply should not be their job, because it should be ours.
This is a good place to pause noting the left’s praise of economic pain’s power to destroy the American economy in favor of an environmentalist utopia.
And neither did I look forward last year to the coming recession with envy scantily clad by the selection of populist targets.
While imagining, imagine that the recession might somehow eventuate in a better form of capitalism more approximate to authentic meritocracy. Imagine if cancer researchers earned more than Madonna, opera singers more than basketball players, brave soldiers more than pornographers. And while we are dreaming, imagine that good people were better rewarded in this country than the current crowd of multi-culturalists and other sub humans who mis- and diseducate our people from their positions at The New York Times, television, and Hollywood.
No, I am in favor of pain for its power to instruct.
Instruction comes when people find out about failure, either their own or that of others. One of the many problems with government bailouts is that they forestall the pain and blur the instruction.
As Dwight R. Lee and Richard B. McKenzie of The Cato Institute wrote in 1996, some time before the current recession began,
The market economy is such a powerful engine in the production of wealth because it excels at letting people know when the resources they are using in one activity would be more productively used in another activity. That market communication not only provides important information, it comes in a form that no one can ignore, economic failure. Economic failure is to the economy what physical pain is to the body. No one enjoys pain, but without it the body would lack the information needed to maintain its health.
Under free market capitalism, even the watered down sort we have left today, sometimes people go in for fads. Sometimes people start businesses with some combination of the wrong business plan in the wrong place at the wrong time. Big companies may fail to note the changing marketplace. And people fail to notice that their professional skills are drifting away from the needs of the labor market. All of these things require instruction, and only economic pain can give it.
Let those who are too big to fail prove it on their own. Repeal Sarbanes-Oxley and its onerous accounting rules, including mark-to-market. Quit with the spending, so we can lower taxes without further discussion.
Then stand back, and marvel at the power of pain.