The argument of Libertarians, who I think are bigger fools than most, and Republicans, who have sold out America to make a buck in the world economy, that unfettered Capitalism is the best solution to setting world and national priorities, how people should use their resources and how government should govern, if at all, is, now quite literally, bankrupt. The business cycle has reared its ugly head, and for precisely the same reasons as 80 years ago, and even though the mechanisms have changed and the process will play out differently the result is the same, an upcoming international calamity on the scale of World War II, caused by the failure of market economics and having a similar result, the end of the current world order and its replacement with a new one, actually the old one.
The argument of Conservatives that the New Deal did not end the Great Depression of 1929 but that spending in the World War that followed is moot if you regard the idea that both Stalin and Hitler were a result of the get-rich-scheme set up by the fix of 1918, the Treaty of Versalles, and the resulting economic boom for the U.S. and UK, that came apart in 1929, and cleared the way for an essentially conservative reaction to the flow of capital into Wall Street and its subsequent evaporation. If John Maynard Keynes is wrong it may be the the spending by government on arms is more seductive than spending it on people, the flow of capital is more facile when politicians imagine enemies, whether they are real or not, the issue is only if the spending priorities drive the flow of capital. The spending might only reflect the idea that spending is good, not that is does anything worthwhile for the people at the time. Had there been no New Deal, the economy might have been forced to spend its way out of the depression anyway, but criminals would have killed more plutocrats as they were starting to do in 1934, and so the issue for the most cynical is that they went and killed Germans and Japanese instead of rich people. Does this mean that Latino and Black Gang Bangers and Drug Dealers who are bankrupting the nation's penal systems should be "drafted" to kill Taliban in Afghanistan? That might be the hard-ass Republican solution to what is an essentially economically created imbalance, and it smacks of the Roman solution of the Empire, to create a mercenary army to do the dirty work of the Capitalist world order: Gang Bangers for Oil. Dark Side, Dick Chaney, couldn't have said it better, nor could the "brains" inside Hoover Institution.
The alternative is the have government do what market economics doesn't do well: Create roles for people when markets lose their nerve. Which is why 2.6 million government employees is such an economic force, and like the failure of leadership in the private sector, which is what the economic downturn is really about, the Congress, that pool of potential leadership, has a chance to step up and really use its power to create economic power and leadership, or so does the next President.
The "New World Order", looking for opportunities mostly in Asia to create a cheap manufacturing labor force, and undercut organized labor in the West, will be a failure. It won't be decapitated by political and economic processes within itself, but by a combination of cultural flaws in the US and Asia and by the external timing of ecologic calamity caused by energy "policy", i.e. unregulated energy markets. This has nothing to do with the race or intelligence of people, but everything to do with the economic practices and myths within cultures. Who will emerge triumphant is the "Old" world recast, but with a set of values that caused the Industrial Revolution in the first place, that could be said to have caused all of our current problems, but because of these traditions of openness and curiosity, now declining in the US and never finding ground in Asia, what is now the EU will pick up the pieces later in this century when the economies of Asia and the US have been decimated. The US has a chance to join the EU, not in the literal sense, but in the cultural and intellectual sense by revaluing learning and reinvesting in its roots in European cultural values. Even though other cultural traditions, such as Chinese and Islamic preserved and extended technologies from the Classical tradition, and passed them eventually to the European Scholastic and University system, it was Europe who delivered this amassed knowledge to the rest of the world, and it is Europe who will emerge from the next crunch, especially if the US does not rediscover this tradition and use it to innovate out of its emerging problems.
Failure of Leadership in business and government is due to computer technology as one of the major causes. The failure of the Congress to regulate short-term capital gains and the rapidity of on-line trading has created too much investor speculation and has caused leadership in business and government to become ineffective as control becomes short-term, With investors breathing down the throats of boards and leaders, no one makes any long-term decisions and leaders do not get a chance to develop their craft. We need deliberation and leadership, even if the past was shaped by the abuse of power by leaders who had too much power, at its best men of vision, provide a guide for the rest of us who might make decision on whim or purely by conventional wisdom. The National leaders as well as many of the leaders in business do not lead well. George W. Bush is a poor leader. a man of little vision, who has relied on fear to guide the Nation and a man who is so inarticulate who, even if he had a good idea, can't express it. Many of the leaders of business are so ruled by ROI and the fear that their investors will cut and run that they cannot lead. Planning has become so short-term because investors and markets have the ability in the technology to act as impulsively and as fickle as they can.
And as for the wisdom of crowds, or markets, or investors, there isn't any. A mere consensus or a tally of conventional thinking does not constitute wisdom, and anyway, so far as markets are concerned there is always some 800-pond gorilla in the room. There is always some big player, sometime just the people who got there first who set the agenda, limiting the choices in the so-called "free" market. Or when a market matures, the choices narrow as the "winner-take-all" mechanism eliminates choices, reducing freedom. There is no wisdom in deciding from a set of choices that have been rigged by the people who are first or who leveraged the field. Nor, for that matter are investors all so wise. Most do not know what they are doing, and even if they do, their decision-making is mostly myopic, short-term ROI. Wisdom that involves a long view of things or a plan with a delayed gratification or future reward is in short supply. That is where the vision that comes from effective leadership comes in and that is not determined by the form of the political system, but by how we nurture the quality itself in people.
The wisdom of "Mixed" is that finding the qualities in people to lead comes from a variety of sources and experiences. It comes from a rigorous education that values deliberation and learning, from years of gathering facts, of holding back from impulse, and yet of knowing when to act. It does not come from gathering around you people who agree with you. The key failure of leadership of Hitler, Stalin, and yes, George W. Bush, is gathering around you a group of "yes" men and women, who even though they go through the motions of a lively discussion, really protect the paranoid personality of the leader. This is no less a problem in business leadership, in fact it is more of a problem in my direct experience. Not only do you have to eat your own dog food, as the saying goes, but you have to recognize when it is crap. That is the problem most business people have, seeing that their ideas are crap.
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