Friday, October 30, 2009

Is America Going John Galt?

I don't know about you, but I am fascinated by efforts to read the public mood. To look seriously at the complexity of public attitudes and to distill a clear and simple concept that makes things fall into place... that is a talent deserving unstinting praise.

Among those who excel at the exercise is Peggy Noonan. In her most recent column she declares that Americans are becoming increasingly disheartened, and that the governing class is not even noticing. Link here.

Disheartened, despairing, depressed... call it what you will, it represents, as I wrote yesterday in my post on "How to Recover From Failure" a state of mind where you are convinced that you cannot do anything to change things. Thus, you give up.

As Noonan puts it: Americans are starting to think the problems we are facing cannot be solved."

It is not a constructive or productive attitude. I would not recommend it for an individual facing personal problems.

Yet, what happens when the powers-that-be create a situation where it is more profitable not to work.

Now that we have invested extraordinary powers in government, business leaders are beginning to respond. Their attitude might well stand as a corollary to David Brooks' observation that the epicenter of American overconfidence has now moved from Wall Street to Washington. For my take, link here.

As Washington arrogates more and more power to itself, the productive class, especially those who are in executive positions are pushing back. Noonan does not use the phrase, but they are going John Galt.

An insurance executive commenting on the attitude of government officials told Noonan: "They don't understand that people can just stop, get out.... They don't understand that if they start to tax me so that I'm paying 60%, 55%, I'll stop."

Under the circumstances stopping work is not quite the same thing as doing nothing. It offers a way to make a statement about the current state of affairs. If no other message gets through, then perhaps doing nothing is the only way to express an opinion.

As a sidelight, a recent poll of physicians showed that while more than 60% were opposed to Obamacare, slightly over 40% declared that if it passed they would seriously consider retirement.

The insurance executive clarified his thought in this way: "...government doesn't understand that business in America is run by people, by human beings. Mr. [Barney] Frank must believe that America is populated by high-achieving robots who will obey whatever command he and his friends issue. But... they're human, and they can become disheartened. They can pack it in, go elsewhere, quit what used to be called the rat race...."

This might mean retirement; it might mean leaving high-tax states; it might even mean relocating to a foreign country.

As Noonan sees it our leaders do not see that a country that is bordering on insolvency simply cannot take their tax and spend schemes. Why do they imagine, she states more strongly, that America can tolerate that much abuse.

She answers that they have never seen really hard times.

In her words: "We're governed at all levels by America's luckiest children, sons and daughters of the abundance, and they call themselves optimists, but they're not optimists... they're unimaginative. They don't have faith. They've... never been foreclosed on. They are stupid and they are callous, and they don't even mind it when people become disheartened. They don't even notice."

This is an awfully good description of the kind of temperament Brooks was talking about: arrogant, self-absorbed, in love with themselves to the point where they have no awareness of the existence of others.

But how did this governing class become so blind to the consequences of its own policies? Why can't they see that their approach is not going to work?

Simply, because they are living a myth. Government officials, along with intellectuals, teachers, journalists, and other deep thinkers, have spent the last few decades of American prosperity losing status. Relative to their old college friends who went into finance, they have seen their incomes diminish along with their prestige.

If we assume, as I suggested in my post on overconfidence, that their resentment has been brewing for all these many years, we can also assume that they are watching the fall of the Masters of Universe with a feeling of vindication. And they also must feel that some kind of divine justice has been visited against all of those swaggering capitalists who have spend the better part of the past decades bad-mouthing government.

Now, with the epicenter of power moving to Washington, they find themselves able to right a wrong, and to avenge themselves on the fallen Masters of the capitalist universe.

Ensconced in their rectitude, convinced that God has heard their prayers, they are living a myth of justice where the undeserving rich are despoiled of their riches.

They do not know and do not care that the productive human beings who make the economy run are about to walk away from it all. They are not seeing things in terms of human beings and in terms of policies that might or might not work. They are seeing a golden opportunity to right what they perceive as a decades-old wrong. They are not going to miss the chance.

So,the new governing class is constantly attacking the productive class, vilifying them, disrespecting them, doing everything possible to lower their status. When someone is taking away the fruits of your labor and using you as their whipping boy the only way to assert your human dignity is to walk away.

Of course, the people Peggy Noonan was interviewing can presumably afford to walk away. They do not have to work and they are certainly not going to continue working if that entails jumping when Barney Frank says: Jump!

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