If we can take Barack Obama at his word—and I fear we have to—we are in all likelihood entering a new era of regulation. Whatever Wall Street Pacification Package emerges from the current confusion, it certainly won’t turn things around before election day, which is looking more and more like a blowout win for the Democrats.
At this point, it won’t take much to reduce the McCain-Palin ticket to a smoldering wreck, floating dead in the water and dragging other Republicans down with him.* McCain’s furious razzle-dazzle, which for a brief, shining moment had the Democrats knocked back on their heels, has left him back where he started, but turned around and headed for his own goal line.
In light of what they have done to us, the Republicans deserve the shellacking of a lifetime. A two-trillion dollar war in Iraq that shows not a glimmer of resolution, a worsening situation in Afghanistan/Pakistan—after seven years!—plus the massive collapse of U.S. financial markets, made massively worse by the stunning incompetence of Bush/Cheney/Paulson/Bernanke.
But what solutions do the Democrats have? Lots of new regulations, to punish business, some of which may be helpful, but (probably) most won’t be, plus higher tariffs and more subsidies, to help the little guy, plus some aimless environmental subsidies that will make a pretence of “dealing” with global warming without cutting CO2 emissions by more than a mole.
If times were good, I could imagine Barack functioning as a Clinton Democrat, but in the undoubted hard times that lie immediately ahead I don’t see how he can resist the pressure for vastly increased federal spending, if he even wants to. I don’t think there’s a Democrat in Congress who can get his or her head around the idea that actually cutting federal expenditures might be a good idea. Which means that the dreaded “entitlement crunch,” which “Rubin Democrats” like columnists Robert Samuelson and Sebastian Mallaby have been warning about for the past decade, is likely to hit full force sometime near the end of Barak’s first term. It will be like a lava flow encountering a glacier. It will be a stunning education for the Democrats, but it won’t be pretty.
* The metaphor is at once mixed and yet frighteningly apropos.
