December 18, 2008

The Loss of Freedom

A lot of people think I am nuts. And I sincerely hope they are right. We focus, 'round these parts, on right-vs-left arguments, with a liberal smattering of internecine right-on-right. Yet for the bulk of people I know, the question is "why do you worry so much?"

I say that the Obama Administration, supported by solidly Democratic majorities in the House and Senate will curtail freedom. My friends on the left have been waiting for these policies, but my moderate friends think that nothing will change, it never does, vote for the tall guy with the nice hair and everything works out okay.

I tip a hat in my bio to Moss Hart's play "You Can't Take it With You." I loved Steinbeck and Vonnegut without ever embracing their collectivism. As I told Sugarchuck, I've even listened to Willie Nelson without nostalgia for an 18th Century agrarian economy. But I have never shaken Hart's dastard message that productive people are dull. If I may yank another line out (from memory) Grandpa Vanderhoof recalls a distant past election and said that he was quite agitated at the time over who won but that it doesn't matter now.

I certainly think they all matter and that people who do not will just see their liberties diminished before it is too late. I don't expect people in the stockades (well -- unless they fail to recycle) but it is coming. The WSJ Editorial Page discusses a bill that Rep. Barney Frank is anxious to submit. The bill would "protect consumers" from having their rates increased. What it will really do is force those with good credit to subsidize the abusers. As a result, we lose access to flexible and cheap credit.

Scolds in Congress such as Barney Frank have long sought to clamp down on the credit-card companies. Mr. Frank seems to believe that credit terms that Americans freely accept when they apply for a card are nevertheless predatory, and he has had a bill ready for years that would put in place the same restrictions on interest rates that the Fed is now proposing. So there's little doubt that the Fed's proposed rules are the result of pressure from Mr. Frank. The new rules will also appeal to those who think Americans spend too much, and save too little, and blame credit cards for encouraging the trend.

Likewise, we'll soon see bankruptcy judges (or the FHA) redictating terms on existing mortgages. And we will lose access to cheap mortgages that have been a huge boon to people in all income quintiles.

Not with a bang but a whimper (can I mix Moss Hart and T.S. Eliot in one post?) we pass on a far less free world to the next generation. A more union-structured workforce that will be less dynamic and reduced access to innovative financial vehicles (only Frank and Dodd Approved®)

As a net result, people will have to lead duller lives of less risk and less potential. And so few will know what they are missing,

Philosophy Posted by John Kranz at December 18, 2008 12:40 PM

"The first thing that strikes the observation is an innumerable multitude of men, all equal and alike, incessantly endeavoring to procure the petty and paltry pleasures with which they glut their lives. Each of them, living apart, is as a stranger to the fate of all the rest; his children and his private friends constitute to him the whole of mankind. As for the rest of his fellow citizens, he is close to them, but he does not see them; he touches them, but he does not feel them; he exists only in himself and for himself alone; and if his kindred still remain to him, he may be said at any rate to have lost his country.

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living? "

~Alexis de Tocqueville, Democracy in America.

Posted by: T. Greer at December 18, 2008 1:46 PM

Great post, JK. The Refugee shares your concerns about the loss of liberty under the incoming administration. But, he must admit that the current administration has done more to promote socialism in this country than anyone since Lyndon Johnson. The moniker "Big government conservative" should be an oxymoron, but is apt label for GWB.

Nevertheless, The Refugee sees a different microeconomic outcome. If Barney's bill becomes law, credit companies will either deny credit to marginal consumers because they cannot get a fair return for the associated risk, or they will severely limit the amount of credit available to lower income consumers. Either way, it hurts precisely the group that Barney professes to champion.

Posted by: Boulder Refugee at December 18, 2008 2:34 PM

I agree that "poor and minorities will be hardest hit." I'd guess that most legislation hurts those it aims to help.

But I'd caution against thinking that a market will remain for good credit folk. The providers (predators) know that they can raise rates on a customer who becomes delinquent, or whose scores suffer. This allows them to offer lower rates across the board. They will have to price you not as you are but as bad as they can imagine your becoming.

Looking too much at my own life, cheap credit helped me pursue entrepreneurial ventures. My scores are pretty good today, but I was not the only guitar player with a few credit stains. Taking that away removes the freedom of another young person to pursue a music career, small business, or educational opportunity.

I would not recommend that any young person follow my circuitous career path. But it saddens me that the simple freedoms that I enjoyed will not be available to my nieces and nephews.

Posted by: jk at December 18, 2008 3:22 PM | What do you think? [3]