America, Land of the Free -- Lunch

It appears that what the elder George Bush once called the “Voodoo Economy” has hit a bump in the road – or, more appropriately, somebody poked one of the zombies and it fell over. Imagine, a world without Merrill Lynch! Without Lehman Brothers.
Let’s see, last month it was who? Bear Stearns? And who will it be next month? AIG? Washington Mutual? Somebody we haven’t heard of yet?
And, yes, I believe that the American economy is likely to totter on. Too many foreign banks and nations have too much invested in us. Owe a thousand and you have a creditor. Owe a few billion or trillion and you have a partner. This does not seem like the moment of economic Armageddon – yet.
After all, too many privatized American workers have nowhere to go with their pension monies (IRAs, Keogh accounts, etc.) but into the stock market, so the DOW will come back from its 500 point loss. The Wall Street Ponzi scheme hasn’t yet run its course.
But it might be a moment to look at some of the underlying fundamentals of the American economy that Senator McCain just called “fundamentally sound” today.
We are and remain historically the land of the “free lunch”. (It’s wonderfully ironic that we coined the fatuous phrase, “There is no free lunch.” I suspect that the phrase was coined as a message to the lower classes who might get too eager to get on the same gravy train corporations and wealthy investors enjoy.)
Examples of free lunch? Anyone who has been on Social Security for over two years is eating a free lunch. There is no way I put as much into the system as I have now drawn out of it. How about a nothing down, 1% interest home? How about a bidding war for tax incentives to build a new factory in this state or that?
How about the home you bought that you can only afford because the government doesn’t tax the interest on your mortgage?
I often ask students, What’s the most subsidized industry in the United States? They venture this or that – none has ever said, Autos. How many cars would GM or Toyota sell if the government didn’t build and maintain endless miles of roads and highways? Most of them are driven on without fee or cost to the driver. Or the auto industry.
We started as a “free lunch” nation in 1776. That’s really what the Revolution is all about. We cloaked it behind some high sounding principles, but, when you come down to it, the colonists did not want to pay for their own defense.
One moment they were screaming for more British regulars to defend them against marauding French and Indians – five years later they were screaming their heads off at having to share the burden of paying for those troops.
So they went to the French, got 90% percent of their munitions paid for – just about their entire navy and artillery arm, plus thousands of French troops and fought a war with England on French money. When the French asked for some help in return, Washington cheerfully abrogated the treaty and the Americans joined the British and started shooting at the French.
How many times did we sucker European investors into buying American stocks and then have the whole business go to smash, ruining the Europeans? 1821, 1837, 1857, 1873, 1877, 1891 … .
We’ve been good at keeping the free lunches coming. Some social scientists profess to wonder why Americans arranged to have Democrats control one branch of the government and Republicans the other for so much of the 20th Century. Boy what an easy answer!
The American voter was well aware that the one party would never take away the goodies (Pell Grants, Social Security, Medicare, Medicaid, farm subsidies, oil depletion allowances, et cetera, et cetera), and the other party would never raise taxes and make them pay for those goodies.
Notice that both parties today are essentially promising further tax cuts for the American voter. One slants toward the “haves”, the other more toward the “have lesses”. But both are promised to cut taxes – at a time when we are incurring trillions in debt.
Oh, we’re sound. Fundamentally sound – have been since 1776. But what if it ever stopped?