Get out the bell bottoms and the lava lamps. We are going back to the 1970s. This is not a new fashion craze. It is the new economic and international reality. The good news for Republicans: after the 1970s came Ronald Reagan.
On the domestic front we have at least temporarily given up emphasis on free markets and economic expansion. Instead, we are back to expanding government and running up a frightful tab. The debt is piling up, the Fed has the printing press going and the Chinese rightfully concerned we will inflate away our obligations.
On energy, regulatory schemes to increase energy prices and thereby decrease energy usage are now in fashion. We aren’t yet rationing gas by the last digit of car license plates, but cap-and-trade legislation and the pronouncement that carbon dioxide is a threat to the planet have a common goal: restrict carbon output and industrial activity.
Meanwhile, unemployment is edging higher and higher. Forty-six states have seen joblessness increase, the national rate is 8.5%, and more states will be joining those with double digit unemployment in the months ahead.
We therefore see the prospect of the infamous combination of high inflation and unemployment. Unfortunately, unlike the steely-eyed Paul Volker, who wrung inflation out of the system in the early 1980s, Ben Bernanke now is Fed chairman. And he seems to fashion himself not as the guardian of the money supply but as a policy maven. It therefore is questionable that he will, when necessary, apply the monetary brakes to stifle inflation, especially as he angles for appointment by President Obama to another term.
But it is on the national security front that the resemblance to the 1970s, and Jimmy Carter’s presidency specifically, is uncanny. Defense Secretary Gates, unlike all his peers in the cabinet, is told to make “hard choices.” On the cutting block are a variety of programs, from the F-22 to missile defense. Tom Donnelly of AEI writes:
Gates has rightly been emphasizing the need to ensure that irregular warfare concerns have “a seat at the table” in Pentagon program deliberations. But it’s increasingly clear that, given the large-scale cutbacks directed by President Obama, Gates’ rhetoric is becoming an excuse for budget cuts rather than an argument about the nature of the threats we face. If the administration’s commitment to irregular warfare were genuine, it would not have been content to simply confirm the land-force expansion plan completed under President Bush, but would, as Sens. Joseph Lieberman and John Cornyn have advocated, continue to grow the Army.
Moreover, the president’s modus operandi appears to be to apologize to and ingratiate himself with allies and enemies of the U.S. He bows to the Saudi king and does the grip-and-grin routine with Hugo Chavez. He sits through a scathing rant from the likes of Daniel Ortega without objection. He sends a TV valentine to the mullahs in Iran, apologizing for Americans’ supposed indifference to Muslims. With no promise of reciprocation, he lifts bans on travel and money transfers to Cuba. He sends a letter to Russia offering to nix missile defense in Europe in exchange for Russia’s help with Iran. Secretary of State Hillary Clinton is told to pipe down about human rights when talking to the Chinese. The North Koreans shoot a missile while the president talks disarmament and the response, two weeks later, is a resolution from the UN to really get going on those sanctions. And when an America citizen is convicted of spying in Iran, we initially can only muster “disappointment.” Then we are “gravely concerned.” That’ll show them.
It is a foreign policy which Jimmy Carter would approve of — minus the emphasis on human rights. Obama appears convinced that by denigrating American interests and contributions (both economic and military) we will get back in the good graces of world opinion. Throw in plenty of multilateral chit-chat, slice and dice the defense budget, avoid condemnation of the world’s bad actors and guarantee that they face no penalty for their conduct; we have completed the picture of America in retreat. The only exceptions: a willingness to complete George Bush’s Iraq policy and a needed push forward on Afghanistan.
We are, it seems, in a state of collective amnesia. The 1970s formulas (both domestic and international) proved to be a dismal failure. It is only when we turned to economic policies of sound money, low taxes, reasonable regulation and free trade and to robust defense of American interests abroad that America enjoyed a period of peace and prosperity. But disregarding the lessons of the not-so-distant past, the Obama administration now casts aside policies which promote economic growth, domestic energy production and military readiness in favor of a hodge-podge of government-centric programs, debasement of our currency, and displays of international weakness. The results are unlikely to be different that they were 30 years ago.
The silver lining for the Republicans: the 1970s were the prelude to an intellectual and political renaissance for their party. Mired in scandal and held in low repute after Watergate, they lost the White House and were in the minority in both houses of Congress. But the insistence by Democrats then on pursuing misguided policies and the Democratic president’s failure to assert American power spurred popular unrest. That in turn gave birth to the Reagan Revolution.
If the Republicans now find their voice, define a robust agenda and recruit some attractive leaders there may once again be an opening to present the American people with an alternative to domestic feebleness and international retreat. Things may get worse before they get better, but they will indeed get better — as soon as we relearn the lessons of the 1970s.