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Warren Buffett Shelters from Hurricane Obama What Third Rail?

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Invisible Hand vs. Clenched Fist

by Christopher Chantrill
September 10, 2011 at 12:32 pm


THE ADVANCE word on President Obama’s Thursday jobs speech is: nothing new. According to George Stephanopoulos it will contain tax cuts for corporations, an infrastructure bank and the usual pablum of job training for the unemployed.

The president could take another path, according to Tony Blankley. “He could decide to embrace all the major Republican, Tea Party free-market ideas”, as in marginal tax rate cuts, discretionary spending cuts, entitlement cuts, EPA and Dodd-Frank deregulation, Drill Baby Drill, Frack Baby Frack, and death to the NLRB.

Some chance of all that!

The utter failure of Keynesian stimulus is setting up 2012 as a watershed election. Do the voters want a politics that lets business get on with business and start creating jobs? Or do they want, in presidential advisor Alan Krueger’s words, more of the “kind of temporary, targeted and responsible policy that has been the hallmark of this administration”? The choice is as clear as it has ever been,.

It’s a choice that goes back 200 years, to when Adam Smith first proposed that the modern economy seemed to work like an “invisible hand” to regulate selfish behavior into socially beneficial results. We think Smith hit on something new, but he didn’t. We humans do what every social animal does: help the world by helping ourselves. But it wasn’t long before a rival narrative appeared, that capitalism was a savage beast laying waste to everything it its path. It would take the clenched fist of the workers, backed up by the intelligence of an educated elite, to prevent this monster from immiserating everyone in its path, from workers to the middle class.

Ever since the choice for moderns has been this. Do you believe in the Invisible Hand or the Clenched Fist? I’d say the choice is obvious. The Clenched Fist has failed every time it’s been tried, from the French Revolution to the Bolshevik Revolution, from the New Deal to the Obama stimulus.

The stock market has something to say about this. Veteran Wall Street hand Sydney Williams III observes that there have been four markets in his lifetime. There was the bull market from 1941 to 1966, the bear market from 1966 to 1982, the bull market from 1982 to 2000, and the bear market from 2000 to the present.

To you and me, it’s pretty obvious what has driven the market. In 1941, Dr. New Deal became Dr. Win the War, and business flourished. In 1966 the Great Society/Vietnam War grew government and business wilted. In 1982 the Reagan economic policy began to heal the 70s inflation, and in 2000 easy money combined with compassionate conservatism checked in. It’s a no-brainer. The Invisible Hand is good for business and jobs and people. The Clenched Fist hammers everything flat.

The Obama administration economic policy is Clenched Fist from stimulus to ObamaCare to Dodd-Frank. That is why it is failing. Thanks to the Tea Party, the Republicans are returning to Invisible Hand policies. It’s our choice. Do we believe in fisting the American people into the government’s economic army, or do we believe in giving a hand to the little platoons of voluntary cooperation?

Of course the contest between the Invisible Hand and the Clenched Fist in economic policy is mere by-play. The real battle is shaping up below the radar in the woman’s world of relationships and family. Modern conservative women in their Tea Party millions are coalescing into a new moral movement that will end rejecting the clunking Clenched Fist of the authoritarian welfare state.

The only surprise is how long it has taken the girls to rise up. If you want what is best for your children then why in the world would you send them to a government child custodial facility where the custodians’ interests run to big pensions and generous health insurance? If you believe in family then why in the world would you demolish it with government welfare? If you believe in love and relationships then why would you replace sharing and caring with the rules and regulations of government bureaucracy?

No wonder our liberal friends hate Sarah Palin and Michele Bachmann with a ferocity that takes your breath away. They know, at a gut level, these wicked witches of childless feminism, that Palin and Bachmann are water-wielding Dorothys.

You cursed brat! Look what you’ve done! I’m melting! melting! Oh, what a world! What a world! Who would have thought a good little girl like you could destroy my beautiful wickedness? Oooooh, look out! I’m going! Oooooh! Ooooooh!

Yes, even back in 1939 liberal women had potty mouths.

The war between the Invisible Hand and the Clenched Fist is not just an American thing. It’s global. Here’s how it’s playing out in newly middle-class India. Writes Gurcharan Das:

[A] significant number of Indians have experienced a palpable betterment in their lives. As a result, the discourse of the nation... [is] changing. People have begun to believe that their future is open, not predetermined, and can be altered by their own actions.

In a predetermined world, change is only possible when the Clenched Fist spreads the wealth. If your “future is open” you believe in the voluntary cooperation of the Invisible Hand. President Obama please note.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action


“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing


[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust

Class War

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”


Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity

Conservatism's Holy Grail

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph


“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Drang nach Osten

There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion


“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

presented by Christopher Chantrill

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