Charles Krauthammer is right. President Obama's reading of the current crisis is fantasy. Link here.
In his fantasy the crisis was caused by not enough taxes on the rich, too much energy consumption, not enough health care, too many private sector jobs, too few public sector jobs, and not enough windmills.
Obama wants to solve the problem by raising taxes on the rich, taxing energy consumption, nationalizing health care, growing the government, redistributing income, and building windmills.
The president is saying that we are suffering from insufficient virtue. 2% of us have sinned and have not done proper penance. They will be punished and the innocent 98% will be rewarded.
For Obama the sin lies in competition, especially the kind fostered by free enterprise. To solve this problem, he proposes more forced charity.
That is the only reasonable interpretation of Obama's budget. God help us if he really believes it.
From this fantasy Obama has crafted a fiction. If the policies make no sense, as Krauthammer says, then why are so many people buying into them?
Perhaps the reason is that they have no idea of what is really going on. A fiction is better than nothing.
The fact is, most people do not understand the workings of the banking system; fewer still understand the insurance industry.
Most people's eyes glaze over when they hear about Credit Default Swaps, Collateralized Debt Obligations, and Structured Investment Vehicles. And most did not fully grasp the urgency of unfreezing the credit markets. Most people did not even know that these markets had a temperature.
As has often happened in human history, people who do not know the facts fall back on a fiction. Especially when the fiction absolves them of responsibility for the crisis.
According to Obama 98% of the people bear no responsibility for the crisis. They will receive tax breaks that are going to be paid for by the 2% who gained unjustly from the credit explosion.
In Obama's narrative, the crisis is the wages of sin, the just deserts that a just God is meting out to the people who got rich by exploiting the poor and the middle class.
The market crash would then be justice, a purge of the bad actors that will necessarily lead to a new reign of justice. Many of Obama's followers do not mind taking a hit to their retirement accounts because they do not have retirement accounts. Those who do, console themselves by watching vainglorious former investment bankers driving cabs and waiting on tables.
This reminds me of pre-scientific communities where people believed that they could cure diseases, make the crops grow, and even win wars by purifying their faith through ritual sacrifices.
People who were mired in superstition used to believe that epidemics-- think, the Black Plague-- were God's way of punishing those who had offended him. They tried to cure the sickness by prayer and sacrifice, to say nothing of scapegoating groups that were supposed to have poisoned the wells.
Modern medicine has overcome such superstitions. Or so we thought. Darwin notwithstanding Obama's policy prescriptions suggest that he believes that an intelligent designer has sent him to solve the crisis by righting wrongs, punishing the guilty, and rewarding the innocent. He must believe that by being right with this designer he will lead us out of the wilderness and back on to the road to salvation.
If it does not produce any economic growth, at least it will produce spiritual renewal. Isn't that what Obama's faith, hope, and charity are all about?