Noblesse Oblige

Listening to politicians talk about the state of the economy often sounds like a rock musician or Igor Stravinsky talk about expressionist German opera. They either sound painfully out of their depth or unable to discuss the matter without disdain and great trembling. What even the coherent pols have so failed to address is what exactly would be an optimal "recovery".

We know for the Republicans in Congress it would be more 30% returns for the top 1% and sackcloth and ashes for the rest of us. Never mind that those very policies have brought us to our current precipice. Eastern Europeans fresh from their forty lean years "in the communist wilderness" fear any government hand in the financial markets. Thus it was that the current president of the European Union, Czech prime minister, Mirek Topolanek, labeled Obama’s emergency stimulus package “a way to hell” that will “undermine the stability of the global economy.”

But most economists, even those like Douglas Holtz-Eakin, a former McCain adviser, understand that to get the folks back investing and markets lending requires a much larger stimulus than our timid President Obama has so far put forward. For once and no doubt the very last time I agree with Darth Vader himself, Dick Cheney who said: "Deficits don't matter" -- it depends on what you're buying and what you'll be getting. What we certainly do NOT need is greater consumption leading to even MORE inflation. Here I agree with Brad de Long that there "are legitimate fears when a government undertakes a deficit-spending plan. We can all recall historical episodes when they turned out to be not just fears but realities. We remember bottleneck-driven and wage-push inflation from the late 1960s and from the oil shock-ridden 1970s – those episodes were the first fear coming home to roost. Nobody today is happy with American fiscal policy in the late 1960s or American demand management policy in the 1970s."

Instead what we need is a complete change in thinking. Here again, we have history to serve as a guide. To drag us out of the Depression (something quite different than bulking up our powers of purchase) FDR's government hired the unemployed. They planted over a billion trees, saved endangered species, modernized backwoods America, and built New York’s Lincoln Tunnel and Triborough Bridge. They also put up 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields while employing 50,000 teachers and 3,000 writers, musicians, sculptors and painters, among them de Kooning and Jackson Pollock.

For the world to experience a truly sustainable recovery there is but a single viable solution-- we must reeducate the filthy rich and indoctrinate them with the virtues of public sacrifice and noblesse oblige.