America at the tipping point

Today, Daniel Henninger has a brilliant piece in the Wall Street Journal that lays bare the true significance of an Obama victory. Rather than being representative of a repudiation of "the last eight years", a victory for Obama will usher in a new and philosophically revolutionary change in the basic tenets of both the American economy and society. An Obama administration -- aided with huge Democratic majorities in the House and Senate -- will not be a "one-off" example of an over-reaction to the financial crisis that demands an immediate (but temporary) change in direction to right the ship.Rather, as Henninger so eloquently puts it, with this election the U.S. is at a "philosophical tipping point". This is spot on, and echoes the theme of many of my posts for the past several months. America is about to take a sharp 90 degree left turn, away from our history of free-market capitalism based on a risk/reward calculus, and toward a model of state-controlled system based on a no-risk/high security formula. It's a fundamental shift, as Henninger states:

The goal of Sen. Obama and the modern, "progressive" Democratic Party is to move the U.S. in the direction of Western Europe, the so-called German model and its "social market economy." Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create "wealth" so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.

This move toward "welfare capitalism" is exactly where Obama will take us over the next four years. And it is a tipping point because it is largely irreversible; the Great Society has now been with us for over 40 years, and its core elements -- Medicare and Medicaid -- are programs that make up a huge percentage of our entitlement spending. It is easy to giveth -- but it is much harder politically to "taketh away".  This is the issue we will face with Obama -- who plans an historic expansion of public-funded healthcare, energy development and welfare programs. As I've written previously, this will result not just in new taxes, but in the growth of a huge and growing dependent class that lives off government but does nothing to help fund it.The impact of this will be to move America back in the pack, to the economic alsorans of France, and Germany. As Henninger again writes:

Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, "Mothers, don't let your babies grow up to be for-profit cowboys. It's time to spread the wealth around."What this implies, undeniably, is that the United States would move away from running with the high GDP, high-growth nations rising today as economic and political powers and move over to retire with the low-growth economies we displaced -- old Europe.As noted in a 2006 World Bank report, spending in Europe on social-protection programs averages 19% of GDP (85% of it on social insurance programs), compared to 9% of GDP in the U.S. The Obama proposals send the U.S. inexorably and permanently toward European levels of social protection. This isn't an "agenda." It's a final temptation.

A temptation to remake America in the model of the "progressives left" -- which sees capitalism as a model that fundamentally offends them. It offends the notion that America should be about equality of outcome, not opportunity. At the heart of this is a super-charged version of those who believe that "self-esteem" matters more than keeping score, and the idea that some will win while others lose is not acceptable. Never mind that in our economy, those who win do so not because of some hereditary right that is baked in as a birthright, but rather because of their drive to succeed. The left wants to discount the winners so as not to offend those who are less able (or willing) to succeed. This is at the core of the progressive movement: don't brag, walk softly, don't make anyone else feel badly and -- most importantly -- spread your wealth around so as not to make anyone feel inferior.

What this ignores, of course, is that human nature desires independence and self-sufficiency, not dependence on others. Those who actively support this kind of system are the progressive intellectuals who live in a world of theory, rich liberals who feel guilty about their success, and students whose brains have been scrambled by the left-wing politics of the universities. But the vast middle -- who will vote for Obama on November 4 because they have been hoodwinked into thinking that he is more Bill Clinton than Jacques Chirac -- don't want a handout. They want opportunity. And opportunity is not granted by a statist model of economics, but rather by life-giving tax cuts and a light regulatory burden that will ignite the economy and create new jobs. That's the right tonic for America and those who have too little -- not a government handout in the form of a cash payment that serves only to affirm their lower lot in life.

But this is not Obama's view of the world. And if he wins on Tuesday, we will see America make a choice that will fundamentally alter the philosophical underpinnings of our great capitalist democracy.

It will be a choice we will long remember-- and long regret.