Congress and the President reached an agreement to end the budget impasse last night. Looking through news reports of the event, there are many different viewpoints of the outcome expressed that range from President Obama gaining leverage for his agenda to serious implications for investments in the US due to the severity of political divisions. I tend to agree with the latter assessment, there are no winners here. America lost; and I question the loyalty, patriotism and priorities of all the politicians involved.
I have mentioned philosophical similarities and differences between my libertarian friends who have an affinity with the Austrian School and me in previous posts. The free market and economic freedom principles are nearly identical, with the major point of contention being monetary system preference, a choice between commodity money and fiat money or some combination of the two. While I believe that some other monetary system that doesn’t involve government management would better serve to preserve founding principles, the disagreement involves both whether their preferred choice of monetary system, the gold standard, would produce and enhance the desired effects and, most importantly, how we would get from what is to there without major economic disruption that would merely serve to provide incentive for even more government interventions and power grabs.
The point that I am making here is that we currently have a political situation resulting from a clash of philosophies that is likely similar and there is quite a shortage of practical and strategic thinking to achieve political goals over a longer time horizon on the part of all parties involved. We did not arrive at this condition of political and economic disarray overnight. Nor did we achieve the political consensus required to produce the economic sweet spot of the Great Moderation overnight, either. And I suspect that there is good reason to support the application of the legal premise of stare decisis, avoiding broad and sweeping changes to legal foundations in a relatively short period of time to other governmental institutions in a nation that is as vast and complex as ours. We simply cannot cope with immediate, broad and sweeping changes that happen overnight with our political and social cohesion intact.
Whether anyone choses to accept that we are all in this together doesn’t change the reality that we are limited by being human and can’t handle the boat of legal foundations rocking too far in either direction. Because of this, approaching politics with the ‘my way or the highway’ attitude means we all lose and both parties are guilty of it. But I tend to lay the majority of blame for the current situation on Democrats out of the fact that they control 2/3 of government and are hastily and aggressively pursuing, as Obama put it, “a major transformation of America,” failing recognize and deal with the way things are against a constituency that can only be expected to achieve change in small doses at a time. I think Republicans are rightly resisting major changes called for in the Democratic agenda, but for the wrong reasons. They would prefer major changes in the other direction, thus they are offering up elements of compromise that Democrats will never accept. The pox of irresponsibility is on both our houses and everyone is worse off for it.