Roger’s Rules

Tax Day 2010: Two Thoughts From Hayek and an Observation from William Hazlitt

President Obama would be proud of me: this morning, it being the 15th of April, I got out my check book, searched the innermost recesses of my savings accounts and lines of credit, and with a few strokes of the pen helped to “spread the wealth around.” While engaged in this melancholy task, I noticed that Ben Bernanke, chairman of the Federal Reserve, is warning about the deficit. The man we pay to preside over the country’s money supply has had the amazing revelation that a $1.6 trillion deficit  might impede economic recovery.  Amazing!

How do you suppose Mr. Bernanke’s testimony fits into the narrative being woven by the Obama administration?  Try this on: the President embarks on a spending spree the dimensions of which are unprecedented in U.S., indeed, in world history, committing us to trillions—that’s “trillions” with an “s”—in “stimulus” packages, bailouts, cash-for-clunkers, cash for socialized medicine, etc., etc.  Then he and his minions turn around and point out we are deep, deep, deep in debt. How’d that happen? No one seems to remember.  The bottom line, however, is that now you—i.e., we—must pay. And pay. And pay.

It’s really a breathtaking performance. They rack up several trillion dollars in debt. Then, like the rat who invites you to lunch and then announces he has forgotten his wallet, they stick us with the bill. (The analogy is imperfect and unfair to the rat: at least with him you did get lunch.) “So sorry, we hate to raise taxes, but we just discovered this gigantic deficit and unless we take more of your money, we won’t be able to go on spending, spending, spending like there’s no tomorrow mad that wouldn’t be fair would it?”

“But,” you point out, “taxes haven’t really risen yet.”

Precisely.  And yet even so here’s an ordinary slob like me  feeling like Boxer in Animal Farm. What happens when the taxer-in-chief really gets going?

It was at this point in my musings that I thought about the 19th-century English essayist William Hazlitt: “those who lack delicacy,” he pointed out, “hold us in their power.” Early on in the Obama administration, Governor Mitch Daniels spoke about Obama’s “shock and awe statism.” The staggering spending programs. The government takeover of health care. The cap-’n-trade initiative. The destruction of thousands of perfectly good automobiles for the sake of a “green economy.” It has been difficult to keep up. It’s been a veritable Blitz: the spending, the world tyrants tour, the sudden coolness to Israel and Great Britain, the announcement that our nuclear arsenal is basically just for show, the coddling of terrorists: we now see  just how much in earnest Obama was when, a few days before the election, he told his followers that they were on the threshold of “fundamentally transforming the United States of America.”

The point is that Obama and his coterie have moved with dazzling speed on every conceivable front to transform the country. And he’s only, remember, 15 months into it.  The rest of us stand about dazed and confused, exclaiming (as our two-year-old daughter  is wont to do): “What just happened?

Here’s where the two thoughts from Hayek come in. In The Road to Serfdom (I am thinking of printing up and distributing a map of that road), Hayek notes that the “extensive government control” produces not only political changes in a society. More important, because more fundamental and harder to undo, is the concomitant “psychological change,” the “alteration of the character of the people.”  The change is from independence and self reliance to a culture of entitlement and the habits of dependency. Some 45 percent—nearly half—of tax filers pay no income tax.  What does mean? One thing it means is that wealth has been sufficiently “spread around” that those 45-plus-percent of the work force have no common stake in the public enterprise of fiscal responsibility. Under Obama, the only escort of the economy that is growing is the public sector, i.e., the unproductive sector, the taking sector.

Who populates that part of economy?  Here I come to Hayek’s second thought: “Who can doubt,” he asked, “. . . that the power which a multiple millionaire, who may be my neighbor and perhaps my employer, has over me is very much less than that which the smallest functionnaire possess who wields the coercive power of the state on whose discretion it depends whether and how I am to be allowed to live or to work?” It’s not only those who lack delicacy that hold us in their power, it’s also that army of officials, clerks, bureaucrats, public-sector employees of every description from your legislator on down to your local tax collector and DMV functionary.  They spend their working hours devising ways to make your life more cumbersome, your business less competitive, your sphere of freedom more constricted. Taxes. Fees. Regulations. Paperwork. The coercive power of the state in action.  No wonder tea parties are springing  up all over the country. The psychological “alteration in the character” of the American people may have pushed us far down the road to serfdom.   The tea partiers remind us that other roads stand before us.  The hour is late. It is not, however, too late. Gustav Mahler once predicted that “Europe will be killed by this principle: ‘It doesn’t concern me.’”  Obama has labored mightily to make America more like Europe, and he has succeeded so well that Mahler’s  admonition now applies equally to us.  We may have to write the checks.  We needn’t  act like sheep. Happy Tax Day.