Ben Meets His Demons, and Waffles

That’s what happens when you elect a bunch of radicals. Stuffy old Princeton professors run into the buzz saw of ideological invective. Yesterday our Ben managed to slide through his presentation to the Senate with comparative ease. The Senate is after all much like the Princeton Club. Replete with deferential staff, woody walls, lush carpets and so on, both worthy institutions reek of establishment and that solid sort of superiority that warns the rest of us to be quiet and respect our betters. These are places where our elders speak in polite tones and observe countless unwritten rules in order to maintain pleasant decorum.

Unlike that raucous bunch in the House of Representatives where the newbies and crazies were allowed to speak before the more seasoned folks. Can you imagine that?

Into this chamber of impolite rabble strode Ben. Where he was immediately set upon by the likes of Ron Paul who has a thing for the Fed. He hates it. In a Ron Paul world there would be no Fed, and we would all be using local currencies backed by solid stuff like gold that never, absolutely never, suffers from speculative bubbles. Given that hostility, which is well known, I am surprised to hear that Ben was taken aback by the harsh tone of his critics. Evidently they didn’t go to Princeton. They accused him of all sorts of things. Paul spoke of the immediate danger that the Fed represents to the safety of America. I am shocked he didn’t want Ben arrested as an enemy combatant. Don’t laugh, I am sure he thought of it.

The gist of the attack on the Fed from Paul and his ilk is that its easy money policy has stoked inflation, debased the dollar, and is presently destroying the fabric of our society. No it wasn’t the big banks. It was the Fed. The right wing in American politics has long reviled the Fed as being an unelected and elitist Federal institution whose interests cannot be trusted to coincide with those of the Ayn Rand version of the rugged American. Libertarians are naturally opposed to anything that restricts their ability to run wild and footloose over the pristine terrains of the frontier, and especially to trample on the weak and poor they might find there. And we now have a lot of libertarians like Paul. Rand’s book sales are soaring. How is America going to restore its pride if it is burdened by the socialists at the Fed who simply print money to mask the evil doings of the other socialists in the rest of government?

Paul even has his own economists who tell him, he informed Ben, that inflation is currently running at about 9.0%, and that the money supply is growing at an alarming – to Paul – 24%. Eek. That’s terrible. Of course this feeds the libertarian conspiracy theorist’s feeling that the government is lying. Don’t governments always lie? You see, the government says that inflation is only 1.6%. That’s a lot less than the Ron Paul figure. And since he hates the Fed and all that it does, a low inflation number is not helpful. Hence his reliance on a more supportive and alternative set of facts.

It gets worse.

One of the other critics, a new Representative from staunchly conservative Staten Island right here in New York, thought he clinched the deal by pointing out to Ben, who needs to learn some basic economics, that oil prices have jumped in the period since the Fed’s QE2 program was introduced. Notwithstanding the tenuous cause and effect of the two, this GOP representative hammered away at our Ben and urged him to slash the Fed’s support for the economy immediately. Presumably this person doesn’t read the newspapers or pay attention to events beyond Staten Island. As a Manhattanite I find that to be completely possible.

Poor Ben was reduced to stuttering. He was a tad lame in his responses, and managed only to inflame the zealots even more when he suggested that if oil prices are the only aspect of inflation on fire at the moment then he wouldn’t react.

I am not sure whose side I am on in this.

Ben, who represents much of what is wrong with economics; or the zealots, who represent much of what is wrong with politics. It would be amusing to watch were not so much at stake.

In the end we have to hope that the Fed remains untouched by the rise in pitch and fervor of its critics. As I have said, they want to destroy the Fed anyway, so there’s not much Bernanke can say to mollify them.

So there we have it. Our elected leaders displaying their wanton ideological agendas instead of dealing with our situation. Then again, their interpretation of our situation is what drives them. Match that analysis with their libertarian idealism and the result is what we heard today.

I find all this sad.

Not content with argument, the right wing is now intent on undermining our ability to debate by introducing a different set of facts. A set that miraculously justifies their extreme view of action. This is an extraordinary event. It ends the chance of discussion producing a compromise and enhances the inflammation that is already causing voters to veer from one extreme to another. How can voters choose wisely when there is no single set of facts for us to structure our debate around? If Ron Paul genuinely thinks inflation is running at 9.0% then he ought to publish his sources and defend his methodology. Alternative measures are always welcome. But only to the extent that they correct errors or allow us to progress our understanding of our problems. Inciting voters to fear the government, or to suspect that the government rigs its numbers so as to fool the public, is the stuff of extremist politicians and conspiracy theorists the world over. It is antithetical to sound democratic discussion and consensus building.

But that’s where we are.

America is undermining itself because it suffers from an excess of ideologically driven politicians who would rather stoke fears than deal with problems. They will inevitably make the problems larger. These are very radical people. They are not within the mainstream. Yet the dominate the news.

Gibbon was right. When politics becomes an end, and not simply a means to an end, a society is demonstrably in decline. It allows the steady erosion of social cohesion and the replacement of a collective vision with an unreconstructed individualism that benefits only the powerful. Once you have convinced a nation that individualism is the only thing worth defending you have destroyed its willingness to protect the poor, the weak, and the disadvantaged. You have returned it to the past. Once the concept of society is lost, so too, sooner or later, is the common purpose that provides the impulse that supports and ensures success. You have produced the kind of fractured and bickering atmosphere only extremists can exploit.

Look at American politics today, and that is what you will see. A nation unhinged. A nation at odds with its own history. A nation led by an incompetent and homogenous elite that seeks to profit from its power. Meanwhile the people left behind fall victim to the extremist ideas of the rabble rousers like Ron Paul, who in ordinary times would be ignored, but who flourish when the leadership is demonstrably weak or corrupt.

No wonder Bernanke waffled. He is part of a failed elite. He is one of those who profited, in prestige, money, or power, while the majority experienced decline.

He has little ability to confront or change people like Ron Paul because he has yet to confront himself. He has yet to admit his vast education is mainly based on error. Multiply that pathology right across our elite academic, business, and political institutions and you realize why the Tea Party and other extreme movements garner so much support.

That, too, Gibbon spoke about.

I know what his prognosis would be. I hope he is wrong.