HANSON: Politics and pitchforks

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It should have been easy for Democrats to connect depleted 401(k) accounts and lost home equity with the buccaneers of Wall Street who supposedly prompted the panic.

The public, after all, has been whipped up in furor at the masters of the universe who bankrupted portfolios as they walked away with multimillion-dollar bonuses. We now hate those on Wall Street as much as we used to like them for bringing spectacular growth to our retirement accounts.

In a recent private meeting with some of the world's largest bankers, President Obama reportedly railed at them: “My administration is the only thing between you and the pitchforks!” But not so fast, Mr. President.

The Obama administration, remember, signed the Democrat-sponsored bill to authorize new bailouts for Wall Street firms and mega-bonuses for their executives. During the Clinton administration, Treasury Secretaries Robert E. Rubin and Lawrence H. Summers - who both later made millions on Wall Street - freed investment banks from federal regulations that eventually led to their reckless gambling with trillions in subprime mortgage debt.

The quasi-governmental Fannie Mae and Freddie Mac - staffed with ex-Clinton-administration cronies - were at ground zero of the financial meltdown. Liberals in Congress such as Sen. Chris Dodd and Rep. Barney Frank were among the largest recipients of Wall Street money. In the 2008 presidential campaign, most of the big investor money went to Democratic candidate Barack Obama.

Billionaire investors such as Warren Buffet and George Soros proved to be among Mr. Obama's staunchest supporters. Health and Human Services Cabinet nominee Tom Daschle had to bow out because he had skipped paying income taxes on free corporate limousine service. The Democratic Party clearly is no longer the party of sweaty dockworkers and dirt farmers in bib overalls.

Can fiscally conservative Republicans galvanize populist backlash against fat-cat Democrats and their supporters on Wall Street? From looking at some of Mr. Obama's initiatives, you would think conservatives would have plenty of ammunition.

Mr. Obama's promises to tax only those families making more than $250,000 probably will prove a fantasy, given the proposed $1.7 trillion annual budget deficit and the nearly $10 trillion in additional debt we are projected to incur over the next decade.

There simply are not enough wealthy people to tax to repay that sum. Instead, most likely our children and grandchildren for generations, through all sorts of higher taxes, will have to service the mountain of debt and interest for the larger entitlements we'll soon receive.

Shouldn't this kind of out-of-control spending and big government be natural wedge issues for conservatives against free-spending liberals?

But, again, not so fast, as conservatives have credibility problems of their own. The last Bush administration budget racked up a $500 billion annual deficit, and the administration added more than $4 trillion to the national debt over eight years. During the first Bush term, when the Republicans controlled Congress, government spending grew on average at an annual rate of more than 4 percent - far higher than during the Democratic Clinton administration. Mr. Obama and the Democratic Congress may be planning unheard-of multitrillion-dollar budgets, but they are in fact only expanding on earlier Republican fiscal recklessness.

You know we live in strange times when it's hard to figure out whether to blame big money or big government. In the past, Democratic populists could rail against the Wall Street excess that had helped wreck Americans' retirement portfolios. Those populist Democrats, though, are gone, replaced by liberal grandees more interested in Wall Street's money than its ethics.

Today's Democratic-led government, meanwhile, has gone on a spending spree, taking on massive debt for all sorts of new “stimulus” - and Republican conservatives, given their recent profligate past, can hardly serve as credible watchdogs.

So, take your pick whom to blame: not-so liberal Democrats, now trashing the Wall Street that enriched them, or not-so conservative Republicans, suddenly railing against Washington's out-of-control budgets, which they themselves never balanced.

In a democracy, maybe the real problem is with ourselves - for wanting big government without big taxes, big stock returns without big risk and easy money without hard work.

Victor Davis Hanson is a classicist and historian at Stanford University's Hoover Institution and the author of “A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War.”

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