Change? From What? To What?

First, of course, congratulations are due to Barack Obama, the president-elect of the United States. It is a remarkable achievement for anyone. Mr. Obama has pursued that goal with a singlemindedness that heralds well for the dedication he will bring to the job of president. Our hope, of course, is that the "reality check" he is receiving this morning in his first security briefing, combined with his innauguration, will not dim his enthusiasm nor disappoint his many supporters. Mr. Obama is about to find out the true scope and magnitude of the challenges faced by George Bush from a different perspective, and it is to be hoped that the realities of the situation will not undermine his power to effect substantive change as they subverted Mr. Bush's leadership.

That being said, the election of Barack Obama as the first black president of the United States appears to be taken by many people as sufficient to indicate that the promised change will, in fact, take place. The only problem (well, not the only problem) is that it has never been entirely clear of what the "change" will consist, other than from the Republicrats to the Democrans, or from "zero" to "nothing."

From a Just Third Way point of view, however, there are definite signs of change: from bad to worse. Not that these aren't similar to the signs of change promised by Senator McCain; as noted a number of times on this blog, there doesn't appear to be any significant difference between the two. The election of Barack Obama is "worse" than that of Senator McCain due to the fact that now the Democrats will control both Houses of Congress, the Executive Branch, and have a lock on the Supreme Court.

The presumed advantage of a two-party system is that one group is prevented from having total power, and that the mistakes of one will be stopped or corrected by the other, or (at the very least) no action will be taken due to a deadlock. It can be argued that President Bush's failure to act effectively has been due in part to a hostile legislature.

That "advantage" will no longer exist, at least for the next four years. There may even be sufficient momentum and distaste with the Republicans to keep President-elect Obama in office for eight years. The opinion of this writer is that the crises faced by Mr. Obama will, for the next four years, be blamed on the Republicans, thereby ensuring his election for a second term. After that, his lack of an effective economic, political, or social program can be blamed on the failure of Congress to vote enough money — regardless how much money is thrown into the Keynesian whirlpool, it is never enough (as Keynes asserted in the mini-depression of 1936/37), so insufficient funds is always a safe card to play.

Of course, had Senator McCain won, the situation would be almost identical, with the exception that it would not be as easy for Mr. McCain to obtain money and legislation as it will President Obama. Further, McCain wouldn't be able to blame the Democrats, except for opposing him in Congress, which, in a way, is their job.

The basic problem with both parties and platforms, of course, is that they are locked into a Keynesian paradigm that does not admit of a solution, no matter how hard they try, or how much of our or our children's money they spend. Despite the title of his 1936 treatise, The General Theory of Employment, Interest, and Money, Keynes does not appear to have understood money, credit, or banking, and (possibly at the root of the problem) private property. Without a proper understanding of property, the institutions based on property (e.g., employment, interest, and money), become a mystery open only to few initiates. Unfortunately, the initiates (as demonstrated by the monetary and fiscal policies of the last eighty years) frequently don't understand what they're doing, either.

Possibly the last well-known economist who understood money, credit, and banking (and he wasn't all that well-known) was Dr. Harold G. Moulton, president of the Brookings Institution in the 1930s. At that time, Brookings investigated alternatives to the Keynesian programs of the New Deal. What Dr. Moulton developed, added to the work of Louis O. Kelso and Mortimer J. Adler in the 1950s, can be found in the Capital Homesteading proposal of the Center for Economic and Social Justice.

Given the evident goodwill and hopes for change we see in the election of Barack Obama, it would be well if, before taking office, the president-elect gave serious consideration to the principles of the Just Third Way embodied in Capital Homesteading for Every Citizen. Otherwise, all we have to look forward to is more of the same, only more so.

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