Michael Malone On The Failure Of Social Engineering

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What if the current Mortgage/Credit Crunch is not just an isolated financial crisis, but in fact the signal for the death of one era, and the (painful) birth of another?

If that is the case, it goes a long ways towards explaining the bizarre nature of what we’re seeing going on in Washington and on Wall Street… and suggests that we need a whole different set of solutions.

Living out here in Silicon Valley, the heartland of American innovation, it’s hard not to be appalled by the events taking place 3,000 miles away in the seats of American finance and government - and hard not to fall back on the ‘pox on both their houses’ attitude that polls say is increasingly common among American voters.

From where I sit, the United States government has embarked on two pieces of social engineering in the last few years. One was to make oil expensive as expensive as possible to drive people to greater use of alternative energy sources - because anything less would be irresponsible and destructive to the environment. The other was to enshrine home ownership (i.e., easy-to-obtain mortgages) as a new American right - because anything less would be unequal and racist.

None of us voted on these decisions - indeed, neither was even spoken about directly, much less debated. But nevertheless, both became national policy… and both have sparked national, now international, crises. Then, once they became crises, both were blamed on ‘greedy capitalism’, instead of what they really were: legislative interference into market forces.

Fine. We’ve been through this before, and no doubt we will see similar, government-induced crises again - inevitably accompanied by Administration officials and our elected representatives pointing at everyone but themselves.

But what makes this particular economic crisis so appalling, at least from this vantage point, is the sheer scumminess, corruption, short-sightedness and general incompetence of everyone involved. At least in the business world, especially in the take-no-prisoners world of high-tech that kind of venality and ineptitude either gets you fired or kills the company; by comparison, in Washington, it puts you in charge of the recovery effort.

Nobody in this mess has covered himself or herself in glory. President Bush seems to have had the right instincts on this, but as a lame duck who long-ago burned up all of his public support, he mostly seems dithering and toothless. The Democrats declare that the nation is at risk… then go about as usual turning the bailout bill into another yet another partisan pay-off scheme to fund the next round of crisis-creating social engineering. It is a measure of just how corrupt the Dems have become that Senators Dodd and Frank, who perhaps more than anyone in Washington are responsible for this crisis, not only are allowed to keep their committee seats, but run the press conference on the bail-out. Quis custodiet ipsos custodes?

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It is impossible not to look upon all of this as a kind of a vast, predictable pantomime. The same people who created the mess are honored for (sorta) getting us out of it, a few scapegoats go to jail, the real perpetrators not only escape punishment but are often rewarded, a bunch of regular people get screwed (lose their jobs, go bankrupt) and a whole lot more end up paying the bill for two million failed mortgages that never should have been granted in the first place.

The American people know this, which is why:

1) They aren’t taking this current crisis as seriously as pundits say they should - after all, if our elected officials can play politics against their enemies, and take the time to lard the bailout bill with pork, why should they? And,

2) They have nominated for President two candidates who - ostensibly — represent ‘Maverick’ attitudes and ‘Change’.

To my mind, what makes this economic crisis different from ones in even the recent past is that it has exposed the fact that there are, apparently, no real leaders left in Washington - that the intellectual capital in the National Capitol has fallen to a new low - if that’s possible. Most of all, it shows that we can no longer look to D.C. for leadership into the rest of the 21st century.

Marxists and statists of all stripes are, as one might expect, rubbing their hands in glee and declaring this the final death crisis of Capitalism. But I think just the opposite is occurring. What we are in fact seeing are the final death throes of governmental social engineering...