The Instinct Of The Clueless

PRESIDENT Obama has got it all wrong. The problem with the economy is not greedy bankers trousering their multi-million dollar bonuses. So his plan to fix the banks and tighten up on financial regulation misses the point.

But at least he is doing something about the toxic assets at the banks.

The problem with this economy, with this nation, is greedy politicians and political activists. We are not talking about money greed either, although politicians have always insisted on their share of the loot. We are talking about a deeper, darker greed: the greed for power, for adulation, for ordering people about.

The president’s new bank plan gives the government vast new powers. Well of course it does. Governments always think that the solution to a problem is an increase in government power.

It is surely time to update Dr. Johnson’s famous saying: “Patriotism is the last refuge of a scoundrel.”

I think we need to change the old saying into something we can believe in, something like this:

Compulsion is the first instinct of the clueless.

What do you think of that, Mr. President?

I’d say that, after the experience of the week of the AIG outrages and the shock, shock, that bonuses were being paid to wholly-owned subsidiaries of the Dodd political empire, the most clueless thing that a politician could suggest is an ex-post-facto law on executive bonuses, vast new powers and a new regime of tightened financial regulation. But there’s one thing to be grateful for, according to the AP:

Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

That’s a relief.

The president is at least consistent. His bank bailout program, like the rest of his program, is all about compulsion: more compulsion in health care, more compulsion in education, a whole new area of compulsion in climate control, and “new powers” in financial regulation.

John Taylor Gatto, who is a bit of a wild man, reckons in his Underground History of American Education that the whole compulsion culture was always a corrupt bargain between the political elite and the business elite. For instance, the father of compulsory education, Horace Mann, was a Boston political insider who married a Mary Tyler Peabody—as in Peabody coal. Mary wrote a whole-word reading primer. Then Mann visited Prussia in 1843 and came back “satisfied that our greatest error in teaching children to read lies in beginning with the alphabet,” using the traditional method we now call “phonics.” Education has never been the same.

By the end of the nineteenth century government compulsion and regimentation seemed to be the wave of the future. Everyone agreed that centralized bureaucratic structure was beneficial and inevitable in everything from central banking to manufacturing and health care.

It certainly represents the animating principle in the Obama vision of America.

But while political elitists like Barack Obama have been drinking the Kool-Aid of compulsion the business elite has been turning away from regimentation. Even the Prussians, inventors of ferocious army discipline and compulsory schools, were among the first to give up on it. General von Seeckt wrote in 1921 of the need for an individual

soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility[.]

There’s even a German word for that: verantwortungsfreudig. As we know, this principle is now the dominant culture in business. It was demonstrated most recently during Hurricane Katrina when bureaucratic government failed utterly but Wal-Mart CEO Lee Scott sent the word down to his people that they’d be making decisions “above their level” but to do the best they could with the information available at the time and “above all, do the right thing.”

Now we have another Wal-Mart story. Writer Charles Platt thought he’d try a stint at Wal-Mart and see how it compared with Barabara Ehrenreich’s experience in Nickeled and Dimed. Pretty soon he had his own

handheld bar-code scanner which revealed the in-store stock and nearest warehouse stock of every item on the shelves, and its profit margin. At the branch where I worked, all the lowest-level employees were allowed this information and were encouraged to make individual decisions about inventory. One of the secrets to Wal-Mart’s success is that it delegates many judgment calls to the sales-floor level, where employees know first-hand what sells, what doesn’t, and (most important) what customers are asking for.

Somehow this doesn’t sound like President Obama’s new banking plan for America. From what we’ve heard so far, in President Obama’s America you’d better do what you are told. You’d better not be caught taking initiative in health care, in education, or in finance. President Obama in the White House, his courtiers in the agencies, and his barons in Congress will get to call the big shots in today’s America. And don’t you forget it.

Why even the president himself, last Fall, was hesitant to get above his pay grade when the subject of abortion came up.

Back in the nineteenth century the business elite and the political elite agreed that the workers were best kept subservient and dependent. Today things are different. The business elite thinks that many judgments can be made at the lowest level. But the political elite thinks that everyone from the lower-level people on the line to the banking Masters of the Universe are clueless and can’t be expected to make day-to-day decisions about their work and their lives.

But who are the really clueless ones in America? If you ask me it was the politicians filling up the gas tank at Fannie and Freddie during the 1990s and flooring the monetary accelerator at the Fed in the early 2000s

Now President Obama believes that the politicians should be given more power to run the financial system in th 2010s. It seems clueless to me.

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures

German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate.
F.S.C. Northrop, The Meeting of East and West

Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.” —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Churches

[In the] higher Christian churches� they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital

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