[Swiftwater Gazette] Dear Peggy

[Brad Haslett]

Ms. Noonan sees the light.  I was going to write something about the
"good" economic news published yesterday,  Peggy beat me.

Brad

---------------

    * OCTOBER 29, 2009, 7:20 P.M. ET

We're Governed by Callous Children
Americans feel increasingly disheartened, and our leaders don't even notice.

    *
      By PEGGY NOONAN



The new economic statistics put growth at a healthy 3.5% for the third
quarter. We should be dancing in the streets. No one is, because no
one has any faith in these numbers. Waves of money are sloshing
through the system, creating a false rising tide that lifts all boats
for the moment. The tide will recede. The boats aren't rising, they're
bobbing, and will settle. No one believes the bad time is over. No one
thinks we're entering a new age of abundance. No one thinks it will
ever be the same as before 2008. Economists, statisticians,
forecasters and market specialists will argue about what the new
numbers mean, but no one believes them, either. Among the things swept
away in 2008 was public confidence in the experts. The experts missed
the crash. They'll miss the meaning of this moment, too.

The biggest threat to America right now is not government spending,
huge deficits, foreign ownership of our debt, world terrorism, two
wars, potential epidemics or nuts with nukes. The biggest long-term
threat is that people are becoming and have become disheartened, that
this condition is reaching critical mass, and that it afflicts most
broadly and deeply those members of the American leadership class who
are not in Washington, most especially those in business.

It is a story in two parts. The first: "They do not think they can
make it better."

I talked this week with a guy from Big Pharma, which we used to call
"the drug companies" until we decided that didn't sound menacing
enough. He is middle-aged, works in a significant position, and our
conversation turned to the last great recession, in the late mid- to
late 1970s and early '80s. We talked about how, in terms of numbers,
that recession was in some ways worse than the one we're experiencing
now. Interest rates were over 20%, and inflation and unemployment hit
double digits. America was in what might be called a functional
depression, yet there was still a prevalent feeling of hope. Here's
why. Everyone thought they could figure a way through. We knew we
could find a path through the mess. In 1982 there were people saying,
"If only we get rid of this guy Reagan, we can make it better!" Others
said, "If we follow Reagan, he'll squeeze out inflation and lower
taxes and we'll be America again, we'll be acting like Americans
again." Everyone had a path through.

Now they don't. The most sophisticated Americans, experienced in how
the country works on the ground, can't figure a way out. Have you
heard, "If only we follow Obama and the Democrats, it will all get
better"? Or, "If only we follow the Republicans, they'll make it all
work again"? I bet you haven't, or not much.

This is historic. This is something new in modern political history,
and I'm not sure we're fully noticing it. Americans are starting to
think the problems we are facing cannot be solved.

Part of the reason is that the problems—debt, spending, war—seem too
big. But a larger part is that our federal government, from the White
House through Congress, and so many state and local governments, seems
to be demonstrating every day that they cannot make things better.
They are not offering a new path, they are only offering old
paths—spend more, regulate more, tax more in an attempt to make us
more healthy locally and nationally. And in the long term
everyone—well, not those in government, but most everyone else—seems
to know that won't work. It's not a way out. It's not a path through.

And so the disheartenedness of the leadership class, of those in
business, of those who have something. This week the New York Post
carried a report that 1.5 million people had left high-tax New York
state between 2000 and 2008, more than a million of them from even
higher-tax New York City. They took their tax dollars with them—in
2006 alone more than $4 billion.

You know what New York, both state and city, will do to make up for
the lost money. They'll raise taxes.

I talked with an executive this week with what we still call "the
insurance companies" and will no doubt soon be calling Big Insura.
(Take it away, Democratic National Committee.) He was thoughtful,
reflective about the big picture. He talked about all the new proposed
regulations on the industry. Rep. Barney Frank had just said on some
cable show that the Democrats of the White House and Congress "are
trying on every front to increase the role of government in the
regulatory area." The executive said of Washington: "They don't
understand that people can just stop, get out. I have friends and
colleagues who've said to me 'I'm done.' " He spoke of his own
increasing tax burden and said, "They don't understand that if they
start to tax me so that I'm paying 60%, 55%, I'll stop."

He felt government doesn't understand that business in America is run
by people, by human beings. Mr. Frank must believe America is
populated by high-achieving robots who will obey whatever command he
and his friends issue. But of course they're human, and they can
become disheartened. They can pack it in, go elsewhere, quit what used
to be called the rat race and might as well be called that again since
the government seems to think they're all rats. (That would be you,
Chamber of Commerce.)
***

And here is the second part of the story. While Americans feel
increasingly disheartened, their leaders evince a mindless . . . one
almost calls it optimism, but it is not that.

It is a curious thing that those who feel most mistily affectionate
toward America, and most protective toward it, are the most aware of
its vulnerabilities, the most aware that it can be harmed. They don't
see it as all-powerful, impregnable, unharmable. The loving have a
sense of its limits.
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When I see those in government, both locally and in Washington, spend
and tax and come up each day with new ways to spend and tax—health
care, cap and trade, etc.—I think: Why aren't they worried about the
impact of what they're doing? Why do they think America is so strong
it can take endless abuse?

I think I know part of the answer. It is that they've never seen
things go dark. They came of age during the great abundance, circa
1980-2008 (or 1950-2008, take your pick), and they don't have the
habit of worry. They talk about their "concerns"—they're big on that
word. But they're not really concerned. They think America is the
goose that lays the golden egg. Why not? She laid it in their laps.
She laid it in grandpa's lap.

They don't feel anxious, because they never had anything to be anxious
about. They grew up in an America surrounded by phrases—"strongest
nation in the world," "indispensable nation," "unipolar power,"
"highest standard of living"—and are not bright enough, or serious
enough, to imagine that they can damage that, hurt it, even fatally.

We are governed at all levels by America's luckiest children, sons and
daughters of the abundance, and they call themselves optimists but
they're not optimists—they're unimaginative. They don't have faith,
they've just never been foreclosed on. They are stupid and they are
callous, and they don't mind it when people become disheartened. They
don't even notice.