The country is still divided over the government bailout of the Big Three automakers.
Mostly Democratic supporters cited the need to save jobs and ensure that a hallmark manufacturing industry remains healthy and American. Mostly Republican opponents complained that taxpayers were asked to subsidize serially incompetent management and a fossilized overpaid union work force.
So here’s a modest suggestion for proponents of the bailout - start buying American cars.
I travel frequently to bastions of progressive thinking - Boston, Los Angeles, New York, San Francisco and Washington. From what I can tell, there is a lot higher percentage of BMWs, Lexuses, Mercedes, Toyotas and Volvos on the road in these places than what I see in Fresno, Lansing and Salt Lake City.
If you wish to subsidize with taxpayer funds money-losing, union-produced American-made auto-manufacturing, then please buy more Chevys and Fords that now get as good gas mileage as their foreign competitors.
The current American gospel is “stimulus.” That is a new euphemism for printing more money. The latest round started with the financial meltdown in September, when the government decided to guarantee the solvency of banks and financial firms, and offer some loans to a troubled industry to jumpstart a stalled economy.
But in the last few months, the conventional wisdom has morphed into “Go big!” and provide trillions of dollars for “infrastructure investment,” more government programs, relief of consumer and mortgage debt, and aid to all sorts of weak industries.
Lost among the hysteria is the fact that all sorts of “stimuli” have already been in the works. The annual budget has been in red ink for years. Borrowing may approach $1 trillion this year. We already owe more than $13 trillion to overseas lenders, and have vastly run up the national debt.
Don’t forget the crash in gas prices that has given American consumers a collective nearly half-trillion-dollar annual uplift. And both those who defaulted on their mortgages and those now looking to buy homes have been given plenty through renegotiated debt and cheaper housing prices - ultimately subsidized in part by those with decimated 401(k)s, whose values have plummeted to cover the debts of others.
Near-zero interest on passbook saving accounts and little interest paid out on government bonds also translate into trillions of dollars in subsidies for our economy. Both those with cash in the bank and foreign holders of U.S. Treasury notes receive little return on their cash investments, thereby ensuring American consumers historically cheap rates on their debts.
In short, we are pushing the rock so hard up the slope that we are oblivious to the danger that it is just about to go over the crest and cascade down the other side - in the form of roaring inflation.
Here’s another modest suggestion for 2009 for all those now calling for even more trillions of government spending. When the tab comes due in the form of slow growth, steep interest rates and high inflation - what we used to call stagflation - please do not blame others for necessary higher taxes and government cutbacks.
A final suggestion for the new year. If we still wish to blame soon-to-be ex-President Bush for most of our maladies, then as 2009 unfolds let’s also stop for a second and ask whether hope-and-change President Barack Obama is rejecting or continuing hated Bush policies?
Will he get out of Iraq promptly with deadlines as promised or continue the unpopular Bush withdrawal plan? Will he overturn the Patriot Act, close Guantanamo immediately, summarily either try or release enemy combatants detained without a trial, and revisit the wiretap FISA accords?
Will Mr. Obama “re-engage” with the Middle East, be more sympathetic to Hamas and the Palestinians and more evenhanded in the current mess in Gaza, or simply continue Mr. Bush’s strong support for democratic Israel?
The same question should extend to an entire range of issues, from drilling offshore, burning coal and building nuclear plants to talks without preconditions with Iran and promoting missile defense in Europe.
If Mr. Obama follows Bush precedents, rather than his own campaign rhetoric, Americans should at least consider that some of our policies for the last eight years have not been a product of Bush’s unhinged mind but simply a reflection of few good choices amid a host of bad alternatives.
Let’s try a new honesty this year. Buy American cars before asking others to lend their money to Detroit. Understand that if borrowing more money is now necessary, then so will be paying it all back later. And if Mr. Obama keeps in place much of Mr. Bush’s policies, then either Mr. Bush was right then or Mr. Obama will be wrong in 2009.
Victor Davis Hanson is nationally syndicated columnist and a senior fellow at Stanford University’s Hoover Institution and recipient of the 2007 National Humanities Medal.