From Thomas Friedman in the NYT:
Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.
One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.
The real object of Friedman’s wrath? Republicans, of course. Why? Because they have the temerity to oppose Change™. If only they would get out of the way, if only America could shed its democracy fetish and just… leap forward. There is simply no way to read these opening paragraphs as anything other than a desperate Hope™ for an autocratic solution that could eliminate political opposition and “just impose” whatever it wishes.
As Kenneth Anderson says on Volokh, “Let me just say for the record that this is a monstrous column.”
A direct appeal to authoritarian fascism, it’s certainly monstrous. It’s just not surprising.
There’s been some discussion about the possibility that the bailout could become a windfall for “taxpayers.” The idea is that the government will be buying distressed assets. When held to maturity, many of these assets will become profitable. Some estimates peg the net profit at over $2 trillion.
I don’t dispute the fact that there may be profit to be found in these assets. But if there is profit to be found, why not let the market enjoy that profit? Then actual taxpayers might realize some return on their investments. If the U.S. Treasury profits from the assets, then that profit is subject to political whim. Any profit the Treasury makes will be spent by the government. It will not be returned to taxpayers. That’s partly why the bailout is such a bad idea. Not only does it require the government to engage in high-risk investment banking, it will always result in a massive transfer of wealth from the private sector to the government.
Taxation slows the economy because the government is extraordinarily inefficient at allocating capital. Even if the Treasury does make $2.2 trillion in this deal, that’s $2.2 trillion that’s been removed from the private sector; exactly as if it had come from an increase in taxation.
Now, many would argue that the cost of inefficiency in government action is a cost we should be willing to pay to receive needed services and infrastructure. (I think that’s an extremely silly argument, but I won’t get into that now.) These people will argue that the government could do a lot with $2.2 trillion. So what if it amounts to a massive tax increase?
Well, the problem is that it wouldn’t be a just tax. Part of the point of democracy is that tax rates are set by representatives that have some accountability to their constituents. A tax rate is just (if not fair) if it’s a legislative tax increase. There’s a reason that only Congress has the power to tax: a very good reason. Giving this money to the executive amounts to a huge transfer of constitutional authority. The legislature will be ceding an enormous amount of power to the executive. In a very, very real sense, the bailout amounts to taxation without representation.
There’s a word to describe an economic system that involves government control of equity and massive appropriations of wealth by a powerful executive.
That word is fascism.