The Truth Greenspan Knows
On Sunday, August 7's "Meet the Press," of everybody at the table, only Alan Greenspan came close to truth, and host David Gregory quickly moved the conversation away from it.
The pre- and post-debt ceiling debacle argument about economic policy has been firmly framed as (A) spend more, borrow more and tax the rich more to stave off the bankruptcy the spending and borrowing must inevitably bring, versus (B) cut spending, shrink government to live within its income and reduce taxes to liberate economic recovery, slow as it must now be. It's a false debate de-linked from the chief, true cause of the shameful and dangerous position we are now in.
The other post-debacle framing has to do with the first credit downgrade in U.S. history: the left calls it The Tea Party Downgrade; the right calls it The Obama Downgrade. It is his, but with a tornado approaching the house, must we dither over who inside left the toilet seat up?
Only Greenspan pointed out that there is money available for use without sending the unmanageable debt zooming higher and without sinking the economy to unimaginable lows under weight of new taxes. And there's a lot of it.
American corporations have about $2 trillion of capital idled, parked, saved, sat on. And they are doing their best to add to it rather than hire, build, expand or invest. But there's a lot more. This total doesn't reflect the additional trillions exported from here to be invested in other countries - opening restaurant outlets there rather than here, building factories there rather than here, buying up companies there rather than here, and creating jobs there rather than here. Microsoft, GE, KFC, Heinz, Tupperware - you name 'em, you'll find them exporting money.
Then you have all the affluent individuals like me who are refusing to spend, spending less this year than any of the previous ten, withdrawing dollars from the market and from real estate, delaying growth initiatives in our own small businesses, hoarding money in gold bars, even paying banks to warehouse money. Greenspan put his finger on it: all this money has been withdrawn from the economy. And that is starving the economy to its death.
But he stopped short of saying something I've been writing about for two years - something that the other pundits on this panel are likely oblivious to and that his old mentor Ayn Rand would easily recognize. The strike and flight of this capital is a deliberate, knowing starvation of the economy. It is the only self-defense available to all of us who are daily threatened, ridiculed and targeted, who the president and his minions impede and encumber.
Obama can create the most hostile government toward business or achievers since FDR's second term, and he can lay out the most horrendous game rules he likes, and replace referees with thieves to his heart's content - but we can simply refuse to play. And we are. In growing numbers.
Greenspan was stopped before he could explain that these trillions; who knows how many - 4 trillion, 5 trillion, 6 trillion and the added money made were it in constant motion as money naturally is - these trillions are not the only money available without incurring suicidal debt or by taxation. But unless people start taking this money out of the mattresses, coffee cans, lock-boxes, corporate reserves and foreign investments, no amount of borrowing or taxing the rich at 100 percent can save us.
In the face of this we have president Obama. He has a Nobel Peace Prize and we're in three wars, one entirely of his choosing, one expanded at his whim, all three a mess and deepening financial quagmires. He's supposedly the smartest president ever and by any and every meaningful statistic, the economy is in worse condition than when he got it, and getting worse. And he presided over the first credit rating downgrade in history on his watch.
By the way, he arrogantly said if he hadn't turned all this around in three years, he'd be a one term president. It'd be nice if he were right about something. Wasn't he going to restore America's prestige in the world? Putin is laughing and licking his lips. Our allies disdain us, our enemies are emboldened. Our foreign policy is incomprehensible and indefensible.
Leadership? His "greatest legislative accomplishment" is Obamcare, so flawed he has been issuing exemptions to it with flying fingers and an unprecedented number of states have sued to overturn it. Transform America? Well, that he is doing. When, I wonder, will he so humiliate and embarrass this nation that his tortured media defenders will sit down, and he will be asked by all to leave?
With LBJ it required only one failed war and Walter Cronkite turned critic. How much more abject failure on all fronts is required now?