Right Wing Nut House

Was the Austin terrorist John Stack a right wing loon?

Sure - because as we all know, liberals love to pay taxes and never get mad at the IRS.

Don’t believe me? Here’s Paul Begala wanting to make April 15 “Patriot’s Day:”

Happy Patriots’ Day. April 15 is the one day a year when our country asks something of us — or at least the vast majority of us.

[...]

This country has showered me with the blessings of liberty. So what do I owe my country in return? Paying my fair share of taxes, it seems, is the least I can do. Thanks to President Obama and the Democratic Congress, 95 percent of Americans will get a tax cut this year. No one — not even the wealthiest 1 percent — will have to pay higher income taxes until 2011.

But no one kisses the ass of our IRS overlords with more nauseating obeisance than Matt Stoller:

I just paid my taxes, and I have to say, I always take pride when I do so. I don’t like having less money to spend, of course, and the complexity of the process is really upsetting. But I am proud to pay for democracy, and I feel when I do send money to the DC Treasurer and the US Treasury that that is what I am doing. The right-wing likes to pretend as if taxes are a burden instead of the price of democracy. And I suppose, if you hate democracy, as the right-wing does, then taxes are the price for paying for something you really don’t want. Personally, I find banking fees, high cable and internet charges, health care costs, and credit card hidden charges much more abrasive than taxes, because with those I’m just being ripped off to pay for someone’s summer home.

To which I responded:

When liberals like Stoller make noises of satisfaction like an infant who has just soiled their diaper just because they obeyed the law one wonders what lefties like our Matt do when they come to a complete stop at a stop sign. The celebrations must go on far into the night.

Obviously, liberals love it when they are racked and stretched by the IRS - even for honest, piddly-sh*t transgressions. They get off on a government agency that can make your life miserable - and, as Mr. Stack suggests - unlivable once caught up in the maw of IRS enforcement procedures. The trauma and torture wears one down, as forcefully and unrelentingly as tectonic plates grinding against each other.

Here’s Amanda Marcotte who suggests that Mr. Stack was indeed a left winger but that he was trying to goose right wing nuts into picking up on his IRS jihad:

Stack’s beef with the IRS seems to have developed from personal problems stemming from possible tax evasion on his part. But it appears to have turned into a full-blown ideological stance, and again, it’s clear that he hopes others who share his ideological stance—and believe me, there are a lot of crazy right wing nuts in the area who do, and I have no doubt Stack was aware of this—will act on his wishes. This is what I mean by a mish-mash. Most of his ranting seems very left wing, but if you’re living in central Texas and you do something like this, you’re sending a signal to right wing nuts, and you know it.

“Most of his ranting seems very left wing…” but ignore that, pay it no mind. It disturbs the narrative that this fellow was a tea party type.

What was that “left wing rant?”

And while they appear to make it look like it’s all about anti-government and anti-IRS, they fail to mention his anti-Catholicism, anti-Bushism, anti-capitalism and pro-communism.

I guess it doesn’t fit the preferred narrative

No, it doesn’t. But when has that ever stopped anyone on the left from jumping to conclusions? Recall that suicide of the federal worker in Kentucky that the left flayed conservatives over before it was discovered he took his own life and wasn’t murdered by “anti-government extremists.” Or Fort Hood shooter Nidal Hasan’s “PTSD transference” where he heard so many bad things about Iraq coming from his patients that he snapped. I wrote here about both right and left jumping to conclusions about Hasan but in the case of the Austin terrorist, there is a clear, and laughably ignorant attempt by many on the left to tie Mr. Stack to tea partyers.

Why can’t a nutcase just be a nutcase? Why does he have to be “motivated” by political views at all? I’m not a mental health professional, but I’ve read enough to know that trying to glean intent from a diseased mind is a ludicrous sport for amateurs. The reason someone commits suicide in the first place is that the natural, healthy, normally functioning mind breaks and the primal urge of self preservation is either short circuited or is prevented from working properly. This does not happen in minds that are in love with logic or reason.

The left is ascribing a rational thought process to an irrational man. If it weren’t so stupidly obvious that there’s is a political attack rather than a serious attempt to reach a conclusion based on observation, investigation, and a familiarity with how mental disease can lead to suicide, we might excuse liberals for simply being dumb. But tis the season for idiotic political bloviating so we’re stuck with nonsense like this:

Joseph Stack was angry at the Internal Revenue Service, and he took his rage out on it by slamming his single-engine plane into the Echelon Building in Austin, Texas. We now know this thanks to the rather clear (as rants go) suicide note Stack left behind. There’s no information yet on whether he was involved in any anti-government groups or whether he was a lone wolf. But after reading his 34-paragraph screed, I am struck by how his alienation is similar to that we’re hearing from the extreme elements of the Tea Party movement.

I was not struck by that at all. What struck me was this guy’s lack of a clear ideology - something that some of the less reason challenged liberals recognized and, to their credit, are writing about.

Or this:

5. He was mad at the IRS, and left what CNN reports was a suicide note on a local website, detailing his trials with the agency. In fact, a lot of his rhetoric could have been taken directly from a handwritten sign at a tea party rally.

The question of whether this guy was a terrorist is a no brainer; of course he was. Maybe the FBI and Homeland Security refuse to call incidents like this “terrorism” because of the increased paperwork involved in reporting it that way. Otherwise, the only explanation that makes sense is they don’t want to make a big deal out of the incident.

But in this case, we have a terrorist without portfolio. His motivation, given the building housed a regional IRS office, seemed to have been revenge more than anything. His ranting about wanting to inspire people is just that - the mouthings of a madman who wanted to give his death a twisted kind of meaning. It’s not logical or rational. It is delusional.

Maybe some day both sides will realize that the only people they are fooling with their politicization of the insane are themselves.

Rob Port is at CPAC and took a White House tour which included the White House Library:

Now, according out the person who guided our tour, the library is stock with books picked out by the First Lady, Michelle Obama. Being a bit of a bibliophile, I started to peruse some of the books on the shelves…and lookie, lookie what I found (click for a larger view):

By itself, this wouldn’t be that big of a deal. But in the context of Anita Dunn saying Chairman Mao is her favorite political philosopher? In the context of the Mao ornament on the White House Christmas tree?

In the context of Obama’s economic policies?

Well, I’ll let you make your own call.

OK. My call is that you’re a loon.

Anyone looking at my father’s library would have had him arrested for sedition if they thought like Mr. Port. My dad had Karl Marx, Frederick Engels, Michael Harrington, Howard Zinn, and a host of socialists, communists, and other far left authors on his book shelf. The fact that he was a dyed in the wool capitalist, a New Deal Democrat, a veteran of World War II, and a practicing Catholic would not make any difference to someone of Mr. Port’s ilk. Those books are in his library so obviously, he must agree with their content.

Of course, this is anti-intellectualism run rampant. Whoever our next president is going to be, I hope to god they have a supple and open enough mind to have read Marx and Engels, as well as Ambrose and Friedman. I hope they inculcate this attitude of open scholarship and free inquiry into their children. I hope there are no ideas or ideology they fear. And I hope they can recognize this liberty of mind as essential to the liberty of the soul.

Parenthetically, I see where Michelle Obama also placed John Hicks seminal work on prairie populism, The Populist Revolt: A History of the Farmers’ Alliance and the People’s Party on the shelf. What are we to think of someone who displays a book about a grass roots rebellion against east coast elites? That they support the tea party movement?

Just asking.

I am not attending CPAC this year. Finances have become problematic and since neither one of my employers were going to pay my way, the $1,000 or so that the trip would cost me will be put to better uses I’m sure.

Not that they would have rolled out the red carpet for me anyway. RedState is running Blogger’s Row this year and it’s strange, but my invitation somehow got lost in the email. Or perhaps they’re still smarting from my post criticizing RedState as “a barbarous brew of angry yawpers.”

A mystery, yes?

Then there are the few conservatives who have gotten angry enough to de-link me, or write long screeds calling me a liberal or other swear words who would have taken great pleasure in confronting me at CPAC for my apostasy. I apologize for not giving you your “Chief Brody slap” moment. Maybe next year.

So who is going to be welcome at CPAC this year?

“There needs to be a purging of the movement, and I think we’re already starting to see a different of hierarchy of groups,” said Erick Erickson, the Macon, Ga.-based founder of RedState.com, who predicts that “you’re going to see a much more diffuse conservative movement that is being led in large part from outside of Washington and is much more in line from the grass roots.”

Erickson, a favorite of the new activists, said, “Some of these legacy groups have become so entrenched in the Republican establishment in Washington that a lot of these new activists don’t think they can trust them.”

As examples, Erickson singled out CPAC’s primary sponsor, the American Conservative Union, as well as CPAC stalwarts including the Heritage Foundation think tank and the groups headed by Grover Norquist and former House Speaker Newt Gingrich.

Those groups and other organizations that once formed the vanguard of the conservative movement — such as the National Rifle Association, the Family Research Council and Young America’s Foundation — haven’t made major inroads in the tea party movement.

And thus my first observation; this is not a friendly gathering where independent thought - or much thinking at all - is welcomed. It is the Palinization of conservatism; the rise of Joe the Plumberarianism on the right as George Will (another who is in bad odor with this crowd) points out:

America, its luck exhausted, at last has a president from the academic culture, that grating blend of knowingness and unrealism. But the reaction against this must somewhat please him. That reaction is populism, a celebration of intellectual ordinariness. This is not a stance that will strengthen the Republican Party, which recently has become ruinously weak among highly educated whites. Besides, full-throated populism has not won a national election in 178 years, since Andrew Jackson was reelected in 1832.

Note: It is not what these establishment conservatives say, nor especially what they think as much as what they represent that has Erickson and others pining for a Stalinist purge. Sidelining Norquist I can see. The man is a toad of a lobbyist who facilitated the sale of the Republican party to special interests. But kicking the Heritage Foundation out the door? Or Newt Gingrich? What connects these targets of the neo-right is that almost all of them approach politics and the issues with a thoughtfulness that is painfully lacking in their purge-happy opponents. They are no less fiscally conservative than the neo-rightists who want their scalps. Nor are they less devoted to the Constitution. To imply otherwise is libelous.

But the neo-rightists who smell blood in the water and wish to take control of the conservative movement are arrogant enough to believe that they have a corner on love for our founding document, and take the simple minded approach that if you criticize them, your devotion to First Principles are suspect. They constantly refer to themselves as “patriots” as if designating oneself thusly actually confers legitimacy on the honorific.

As I mentioned previously, I have never heard of this kind of self-reverence until tea partyers began to identify themselves as “patriots.” Real patriots allow others to append that appellation to them and eschew doing the honor themselves. That’s because some of the prerequisite qualities for being considered a patriot are humility and self-abnegation - not much of which will be on display at CPAC this year.

Second observation; welcoming the Birchers back into the fold while gleefully kicking intellectual conservatives and other “elites” out into the street may be enormously satisfying on an emotional level but brands the neo-rightists as gigantic failures in appreciating irony.

If there is one thing I wanted to do at CPAC if I had been able to attend, I would have loved to stand around the John Birch Society booth and talk to the visitors. Would they be aware of the battle that mainstream conservatives fought in the 1950’s and early 60’s to sideline these wackos, and bring conservatism into the intellectual mainstream? Probably not. In response to my criticisms of CPAC for allowing the JBS to co-sponsor and exhibit, I was informed that, at least as far as fringe nutjobs are concerned, the conservative tent should be expanded to include them. Others, who might not agree with the neo rightists on 100% of their pet issues need not apply.

Third observation; if this indeed, is a changing of the guard with the conservative establishment being marginalized and the neo right ascendant, then it stands to reason that the definition of “conservatism” will narrow considerably.

Protestations to the contrary will do no good. I have experienced first hand the definitional constriction of who these jamokes believe is “conservative enough.” We have seen the repudiation of Newt Gingrich, George Will, Peggy Noonan, David Frum, and countless others who, at one time or another, have been tarred with the “liberal” epithet, or RINO, or “Democrat-lite.” Their sin has been to disagree with the notion that there is one overarching definition of conservatism, that differences on issues or tactics does not mean that there are differences in principles.

But the neo right is unable to differentiate between issues and principles, and thus, there will be precious few “acceptable” conservatives from the northeast, the upper midwest, and most of the mid-atlantic. Ceding that much territory to your opponent will eventually lead to permanent minority status.

Right now, the right is rising because of the demonstrated incompetence and overreach of the Democrats. The voter literally has nowhere else to go if they disagree with health care reform, the bailouts, the buy outs, and the corporate cozying being carried out by the Obama administration. Since conservatives have offered nothing positive for voters to rally to, the recent polls showing people gravitating toward conservatism can be seen as a reaction to what Obama is doing, not to anything conservatives are offering as an alternative.

This will be fine for 2010. But what happens in 2012? And beyond? The bad economic times will be with us for a while, and there will come a point where people will get tired of hearing about sticking to principle and want their government to do something to help them. Since this is a foreign language to the neo-right, they will elect those who seem to care about their problems.

What problems? Here’s David Frum commenting on the vapid Mount Vernon Statement released yesterday:

* Are you an American who was earning less in 2007 than in 2000? The document has nothing to say to you.

* Did you lose your home or job or savings in the crisis of 2008-2009? Blank to you.

* Are you worried about the loss of your health insurance – or how you will pay for nursing care for your aged parents – or what 20% youth unemployment will mean for your newly graduated child’s life chances? Not our department.

* Do you wonder whether we are winning or losing the war on terror? Do you want an explanation for why it took so long for a conservative administration to react to military disaster? No answers here.

I’ve said it before; there are many on the neo right who claim allegiance to the Constitution but refuse to recognize a role for government in modern society. Their notion of “limited government” is more akin to the Articles of Confederation than the Constitution, more comfortable in a 19th century setting than the 21st century.

With that kind of attitude, and if candidates are elected to office that espouse this kind of extraordinarily narrow and restrictive view of what government is about, then conservatives will find themselves shunted to the sidelines before they know what hits them.

The true believers and ideologues who are angling to overthrow the existing conservative regime will eventually discover that populism, as George Will noted, hasn’t won an election in 187 years. And noble goals do not always translate into success at the ballot box. Government, limited or expansive, must answer the needs of the people. Forgetting or eschewing that fact will lead to marginalization and defeat.

The earthquake that shook the world’s financial system in September of 2008 opened many eyes to the fact that the largest companies on Wall Street had become heavily engaged in the extremely profitable but wholly unregulated derivatives market without a clue as to understanding the extraordinary damage their gambling could do to the economies of the industrialized countries if a financial shock came along.

There were some - in government and out - who sensed the trouble we were in but whose voices were drowned out in the speculative frenzy, the drive for ever larger profits, and the mania for secrecy upon which these firms traded. And the enablers in the Clinton Administration - including Larry Summers, Tim Geithner, and Robert Rubin - along with the anti-regulatory Fed Chief Alan Greenspan, worked hard during the 1990’s (as did their successors in the Bush administration) to keep the regulators at bay, discrediting them with Congress, and trying to bully them to toe the party line on keeping the derivatives market free of scrutiny by the government.

We paid for this shortsightedness with a meltdown of the financial industry that we are still feeling today and are likely to feel for years to come.

Those who continue to believe that the collapse of Lehman Brothers and subsequent tsunami that led to our current economic problems was the result of a few hundred thousand poor people who got loans they shouldn’t have received through the Community Reinvestment Act need to wake up and smell the coffee. The still unregulated derivatives market is worth $600 trillion today. That is not a misspelling. An unknown tens of trillions of that market - nobody can possibly know exactly - are in “toxic assets” still being carried on the books of big banks just waiting for the next shock to hit Wall Street to bring these great houses of finance to their knees again.

Yes, mismanagement of risk by Fannie and Freddie had something to do with the crisis, and the CRA had its own small role to play. But this crisis virtually begins and ends with the mind boggling way in which the largest financial service companies in the world fought tooth and nail to keep the government from finding out just what they were up to with these credit swaps.

I suppose I should mention that my understanding of all this is a mile wide and an inch deep. But the political explanations offered by both sides never satisfied my curiosity. The crisis was more than 2 decades in the making, and the idea that one side is more or less to blame for it is nonsense. Both Clinton and Bush, Democrats and Republicans in Congress have a lot to answer for and trying to place relative blame on a scale and weigh out who should be designated as the winner of the blame game is an exercise in futility.

No transparency, no record keeping, and little understanding by either the companies or the government of the systemic risk of these derivatives and credit swaps led directly to the collapse. But we can’t get rid of derivatives even if we wanted to, as business writer for the NY Times Timothy O’Brien points out:

But it’s really important to remember that there are a lot of good, practical uses for derivatives. In fact, the average person who’s a homeowner owns a derivative. It’s the insurance policy on their house, and it’s essentially a contract that you enter into with an insurer that pays you a certain amount of money if some kind of damage or calamity happens to your home. And you pay a little bit of money, or a lot of money depending on the size of your home, each year for that policy.

Wall Street has all sorts of contracts like this. Derivatives, in essence, are insurance policies that various players on Wall Street and in the business world enter into to protect themselves from unforeseen calamities, whether it’s wild interest-rate swings, changes in the values of currencies, someone’s debt going bad. …

And that’s a good thing. When people have protection from things they can’t control, it enables them to take sensible risks, which allows them to grow their business and allows more money to get created and creates jobs. These are all good things, as long as that’s what these things are being used for.

As you might have guessed, it was the other things derivatives were used for that sealed our fate:

The problem is, no one really knows exactly what derivatives are being used for because it all exists in a black box. They’re unregulated; the contracts aren’t traded on exchanges; they’re entered into between private parties. No one knows whether or not one company, let’s, for example, call them AIG, a big insurance company, has entered into so many of these contracts that if an unforeseen financial hurricane comes and hits the house known as Wall Street and suddenly AIG is required to make good on … so many of these policies that they don’t have enough money to do this, and they run into danger of going belly up. Which is exactly what happened at AIG.

And the lingering question is, if these transactions - if the derivatives market - had been regulated adequately, could we have avoided the worst of the meltdown? Joe Nocera, also of the Times:

The technical term for the kind of derivatives that really got us into trouble is bespoke derivatives. Bespoke means one of a kind. And these were complicated contracts that covered a particular, you know, one deal only. It couldn’t be replicated. It wasn’t like buying a share of IBM that is exactly the same as every other share of IBM. You bought a credit default swap; it would be built around a particular series of deals. It would have a particular set of terms. It would be one of a kind.

This is, by the way, why this stuff became so untradable. How do you trade a one-of-a-kind? There is no real market for them. It has a utility as a contract on a one-on-one basis. But there is no trading function. And that has been part of the whole problem. They don’t mark to market, i.e., because there is nothing to compare it to. What’s out there that you can compare this one thing to? So they mark to model. They come up with fancy, financial models every quarter. And they mark this thing to the model.

And for many years the model said they were worth more, worth more, worth more, so you mark them up. And then finally the model said: “Uh, you know what? Foreclosures are up. Subprime is down. We have got to start marking them down.” You start to blow up. But even though they are blowing up, you are still stuck with them. There is nothing you can do with them. You can’t trade them.

Bottom line:

So one of the big problems with the rise of credit derivatives is that Wall Street was terribly resistant to the idea of standardizing contracts and allowing them to be traded on an exchange, because it would hurt their profits.

The question now before us is what should be done about it? And for me and for many conservatives, the question becomes is there any regulatory regime that would be consistent with conservative principles?

It is a false assumption that regulation of markets is inherently un-conservative. Libertarians might take that position but since conservatives should value order above almost all else, sensible regulation of markets is a requirement for promoting a just and orderly society.

The size of companies like JP Morgan and Citigroup gives them an enormous advantage in the market already. And as I demonstrated above, these credit swaps take place in a totally unregulated, secret environment. Add the potential for harm to the community - harm that could be avoided or mitigated with a regulatory regime - and I think a solid, general case can be made for conservatives to support some kind of minimal regulation.

The problem as I see it, is that as with everything else President Obama wishes to do, he takes a good idea and ruins it by overkill. The president wants to transform the financial services industry. Conservatives want to rein it in. Obama wants to drastically reduce risk. Conservatives recognize the value of risk (as explained above) and want to minimize it without destroying its many advantages. The president wants to create a federal agency - the Consumer Financial Protection Agency - that some analysts believe would make credit extremely difficult to get for ordinary Americans. Conservatives believe that laws already on the books to protect consumers in this regard could be strengthened, but that a whole new agency is dangerous and unnecessary.

The differences then, are a matter of degree. Clearly, where there is no regulation or transparency, government must be there to create it so that not only is the economy protected, but that the derivatives market itself becomes less prone to the kind of exploitation that secrecy encourages.

Being supportive of a free market most decidedly does not mean that conservatives should oppose all regulation, or support less than adequate regulation, due to an ideological belief that such “interference” is an anathema to the functioning of the market. If the derivatives crisis showed anything, it is that our modern financial system is so complex that ordinary market forces that are supposed to correct imbalances are actually a danger to the economy as a whole. There may have been steps short of trillions in bail outs for firms “too big to fail.” We will never know because they weren’t tried. But even solutions like forced mergers of teetering banks, managed liquidations, guided bankruptcies, and the like would have required massive government intervention in the markets to achieve. And since the problem was worldwide, such measures may still have not been enough to keep the crisis from imperiling the world’s banking system.

A free market is only free if all benefit from its workings. When big companies can skew the market to gain advantages not available to others, or when they can game the system - backed by taxpayers - to take wild risks and place our economy in peril, it behooves conservatives to support reasonable steps by the government to rectify the situation.

Some of what the president proposes makes sense. Preventing big banks from both taking deposits and trading securities that benefit their own house - a small move back toward Glass-Steagell - is a good idea. Other ideas, like making the Fed the overseer of “systemic risk” and the creation of the CFPA smack of overreach. What eventually emerges from negotiations with Congress, with Wall Street, and the White House we can only hope will be adequate to address the problems without being so burdensome that they stifle economic activity.

You won’t want to miss tonight’s Rick Moran Show, one of the most popular conservative talk shows on Blog Talk Radio.

Tonight, I welcome Ed Lasky of AT, Andrew Ian Dodge, and Vodkapundit’s Stephen Green for a discussion of the Tea Party Movement, the upcoming CPAC conference, and other hot issues making news.

The show will air from 7:00 - 8:00 PM Central time. You can access the live stream here. A podcast will be available for streaming or download shortly after the end of the broadcast.

Click on the stream below and join in on what one wag called a “Wayne’s World for adults.”

Also, if you’d like to call in and put your two cents in, you can dial (718) 664-9764.

A good American political speech always has a strong component of patriotic reverence for America that pleases the ear and stirs the soul. The best of them explain the United States in terms that all of us can understand, and touch a deeply felt wellspring of love of country that resides in most of us just below the surface.

But talking about America in this fashion - what I will dub “Patriot Speak” - carries with it dangers as well. Not every politician can do it and sound the right note of honest, guileless, wholehearted love of country. Not all can strike exactly the right note of pride and humility, sincerity and cornpone earnestness, emotionalism and an appeal to reason and logic. It’s a balancing act that, when done correctly, can bring an audience to its feet in tears. When done poorly, it is indeed cringe-worthy.

In my lifetime, there were two politicians who had the ability at a drop of a hat to give a stemwinder oration guaranteed to fan the flames of patriotism among those within earshot. The first was Hubert Humphrey, a gigantic presence when he spoke despite his diminutive stature. This was a man who, when he spoke, was simply too big for the TV screens of the time His was a speaking style from a gentler age, when flowery language and exaggerated metaphor alternately uplifted his audience and invited them to despise the same enemies. Reading Humphrey’s famous 1948 convention speech in favor of the Democratic party’s civil rights plank, you have to remind yourself of the time it was given, as well as the temper of his audience:

For all of us here, for the millions who have sent us, for the whole two billion members of the human family, our land is now, more than ever before, the last best hope on earth. And I know that we can, and I know that we shall began [sic] here the fuller and richer realization of that hope, that promise of a land where all men are truly free and equal, and each man uses his freedom and equality wisely well.

My good friends, I ask my Party, I ask the Democratic Party, to march down the high road of progressive democracy. I ask this convention to say in unmistakable terms that we proudly hail, and we courageously support, our President and leader Harry Truman in his great fight for civil rights in America!

The speech electrified the convention - and drove Strom Thurmond and the Dixiecrats to the exits. Rarely has there been more historical proof of the power of the spoken word in politics.

Funny thing - if you listen to that speech, it doesn’t sound the least bit awkward or forced. You knew that Humphrey’s commitment to civil rights was in his soul, that it wasn’t just some position he took for political expediency. And when he spoke of America in such reverential tones, the “mystic chords of memory” were well and truly plucked in heartfelt fashion.

The other politician who could pull of a patriotic oration - probably in his sleep - was Ronald Reagan. I say that not to denigrate the Gipper but to simply point out what his biographer and other observers have said of him; Reagan was the living, breathing embodiment of American values and a particular kind of Americanism. It was an old fashioned kind of Americanism, perhaps not as relevant in 1980 as it was in 1950. But few cared about that. It’s how his audience felt that counted and there was no better politician at pulling people in and making them feel good about loving America. After a decade or more of ordinary folk being told that their patriotism was out of fashion, and even dangerous, Reagan told people it was ok to love America and to show it.

(Obama is not bad at all with Patriot Speak. But his rhetoric about change short circuits the connection to the past, ["hearkening to patriot graves,"] that is absolutely vital for his words, no matter how well delivered, to really resonate with a lot of people.)

But what if the politician may genuinely feel this love of country but, when trying to speak about it, comes off insincere, and even fake? Nixon’s efforts in this regard always grated. Carter’s too. Nixon never sounded real to me saying anything while Carter’s simpering, syrupy, orations always fell flat. Clinton rarely tried Patriot Speak beyond the pro forma utterances on formal occasions. Both Bushes were horrible at it, although #43 had his moments, such as his speeches after 9/11. I think in order to truly carry such sentimentality off, you have to be a first class orator - something both Bushes were definitely not.

Not so Sarah Palin, who may not be an “orator” in the classical sense but has won praise for her ability to connect at an emotional level with her audience. Evidently, Palin was a huge hit at Daytona this past weekend where they were running one of the most exciting sports events of the year; the Daytona 500.

I am not a NASCAR fan but what’s not to love about Daytona? If you doubt me, it’s evident you have not seen the race in Hi-Def and digital surround sound. Awesome.

But as a cultural happening, Daytona is where “real America” goes to party. I put “real America” in quotes because that is how they view themselves, not necessarily because it reveals any profound truths about who or what constitutes “real America.” Are they more “real” than a bunch of snobby upper east side writers who get together to talk about silly, pretentious things like when their next book that no one will buy is coming out? You betchya. Otherwise, not so much.

The former Alaskan governor was mobbed at every appearance. And in this sycophantic piece in the Fort Lauderdale Sun Sentinel, Palin let loose with a barrage of Patriot Speak that rang hollow and insincere:

“This is awesome,” said a slim Palin, wearing designer jeans, a smart charcoal coat and sky-high black stiletto heels. “It’s an All-Americana event. A good, patriotic, wonderful event that’s bringing a whole lot of people together. I think it’s good for our country.”

When asked what a trip to a swing state like Florida does for her political ambitions, the former Alaska governor said, “Haven’t thought a darn thing about the politics of this. I’m thinking about this good, active, speed-loving event that a lot of Alaskans, too, are really into. We’ve got our snow-machine races up there, and this is, of course, on a much greater scale, same type of sport though, same type of breath-taking, speed-loving, All-American event that we like to see up north.”

Palin doesn’t ordinarily have this effect on me. I can usually watch her and marvel at a speaking style that makes her so approachable, so homey. But this sort of Patriot Speak makes me cringe in embarrassment. And the idea that she hadn’t thought a “darn thing about the politics of this” made me want to puke. It’s clear that unlike Humphrey, Reagan, and many others, that she disrespects her audience, cynically manipulating them rather than showing deference to their deepest feelings. Only those already predisposed to love anything that comes out of her mouth can read the above and believe she is expressing anything genuine, or honest in those words.

Her words remind me some of the things I read on comment threads and forums on the right where some conservatives identify themselves as “patriots,” - actually referring to themselves as such - while spouting that anyone who disagrees with them is, by definition, not a patriot. I always thought that it was up to others to determine whether you were a patriot or not. Awarding oneself that designation always smacks me as prideful.

If I concerned myself with the matter, I might recommend that Palin work on her “Patriot Speak” or she will not succeed in broadening her support beyond those who already worship her. But in the end, it doesn’t matter. Those who want to see through her act have largely already done so. Those that remain aren’t listening anyway.

Tim Pawlenty is a mainstream conservative governor in a traditionally liberal state. When I use the term “mainstream,” I mean simply that he is in the mainstream of Minnesota conservatism - decidedly less conservative than the heart of Republicanism in the south, but conservative enough for most of the rest of the GOP. This alone gives him a decent shot as an alternative to either Palin or Romney in the 2012 primaries.

Reading this long interview in Esquire, I was struck by the governor’s pragmatism and unflappability. Esquire’s Mark Warren threw enough bait into the water that Pawlenty could have easily blundered in his responses. Instead, the Minnesota governor coolly maneuvered through the minefields and came off looking reasonable, and thoughtful.

One thing is for sure; Pawlenty has a very good idea of where the GOP went wrong during their time in the majority:

“The Republicans had their shot not long ago to address the real needs and concerns of everyday Americans, and they blew it…. Over the time that they were there and had the leadership opportunity, they blew it. We got fired for a reason.”

“The party got into a whole bunch of corruption and personal scandals that weren’t compatible with the principles it claimed to stand for.”

“We just lost our way. You can’t say that your hallmark issues are that we’re going to control spending, keep taxes low, and make government accountable, and then go to Washington and do the opposite…. Let’s face it, when Republicans had total control over it, they didn’t do what they said they were gonna do.”

“The marketplace measurement in politics is something called an election…. And in 2006 and 2008, the marketplace was telling the Republicans, We prefer the products and services of your competitors.”

That may still be the case in 2010 if the GOP tries to recycle an agenda better left in the 1980’s. Conservative principles may be deathless, but issues are not. Compared to Palin, Pawlenty has a lot going for him in this regard. Where Palin has a laundry list of resentments that resonate with the base, Pawlenty has a record of achieving concrete results by applying conservative principles to governance. That puts him lightyears ahead of Palin in my book.

Like most GOP governors, Pawlenty is a font of new and innovative ideas when it comes to applying conservative principles to a governing philosophy. Education, health care, mass transit, and other issues important at the state level were addressed to varying degrees by Pawlenty by growing government as little as possible. He also addressed budget shortfalls by generally cutting spending and not raising taxes, although he did raise the cigarette tax and tuition at Minnesota state schools among other “fee” increases to close the budget deficit.

Along with Indiana’s Mitch Daniels, and now Ambassador to China, former Utah governor John Huntsman, Pawlenty represents a new kind of Republican governor - pragmatic leadership buttressed by maintaining good relationships with the legislature, and plugging in conservative policy ideas to address the problems of ordinary people.

If this be the future of Republicanism, bring it on.

This pragmatic conservatism comes through in the Esquire interview as Pawlenty addressed what he would have done about the financial meltdown, a stim bill, and the bailouts:

Whether the threats or doomsday scenarios that were painted were real or partially real or not real at all. We won’t know the answer to that, but we do know that some very bright people said that we faced doomsday, and there were other very bright people who said that, at the very least, the danger was overstated, and this notion that they were too big to fail was untested or untrue.

I’ve argued, at least as it related to the stimulus bill as opposed to TARP, that there were things that we could have and should have done, but it should have been much more targeted. For example, instead of spending $800 billion in a stimulus package, I think we would have gotten much more bang for the buck if we would have done two simple things: focused on tax cuts that would have put cash immediately into the average citizen’s pocket, and two, put money into bread-and-butter infrastructure projects like roads and bridges that could be done quickly. Of the $800 billion stimulus package, only about $50 billion, give or take, actually went into roads and bridges. It was a paltry amount compared to the overall size of the bill.

As for the other bailouts, I did not support the car-company bailout, either. They should have been allowed to go bankrupt — in fact, they [entered] bankruptcy, most of ‘em. That’s the way that they’re going to get most effectively restructured. And I think the same could be said for many of the financial institutions. The idea that we’re gonna bail out every major bank in the country with the exception of Lehman Brothers is ridiculous. Why let Lehman fail and not all the others? These markets have to correct. And the answer can’t be for every problem that emerges as a result of reckless behavior, the government’s gonna come in and bail everybody out. I was talkin’ to people this morning who run small businesses. Where’s their bailout?

The narrative as it is presented today - the trillions we spent on TARP, bailing out the banks, the auto takeover, and the stimulus package - is that without these measures, we would have had a catastrophic, worldwide depression.

As Pawlenty says later, “We’ll never know” if that scenario would have played out if we had allowed the banks to go into bankruptcy, along with the GM and Chrysler (who, as the governor points out, went into bankruptcy anyway), or if the stim, bill had been smaller and more targeted in its spending and tax cuts. Yes, there are many economists who agree with Paul Krugman that Obama saved the world, but there are also many others who disagree to one degree or another. Why their criticisms should be any more or less valid than the dominant narrative that has emerged about these government actions mitigating a crisis is a mystery.

Nor do I believe that the choice was between doing nothing and having the government massively intervene the way it did. That’s a political take on what might have been accomplished short of the trillions in bailout monies advanced by the Fed and the government. The fact is, there was talk at the time of managed bankruptcies, forced mergers, and other measures short of simply handing over money to companies that it was claimed were “too big to fail.” It was never tried, so it is impossible to say if it would have accomplished much of the same thing; i.e., an economy in the toilet but a ruinous depression avoided.

I think Pawlenty is the man to make that case. He supports regulation of the banks, a modified stimulus bill, health care reform, but a firm belief in the idea that market forces are what underlies the American economy:

I think both sides have people who have genuine feelings and beliefs about what they think the proper direction of the country should be. I just think the other side’s wrong. I don’t question motives or assign some sort of label. But I think what President Obama and the Democratic Congress are offering is a dangerous direction for the country. Not just because it’s gonna cost us more, not just because taxes are gonna go up, not just because it expands government, but because of what it does to the American spirit. As I view it, there is an American spirit that is associated with the kinds of attitudes about taking risk, about taking responsibility, about a sense of respect for the private market and the power that it has in creating and rewarding wealth. The government doesn’t do that — the government redistributes, but it doesn’t actually create wealth or prosperity. And the health-care debate is a pretty good proxy for this struggle between these two views. And in the case of the Republicans, what they see and what they’re rightly concerned about is that it’s another increment down the road toward government taking over more and more things. And it worries people.

Is Obama a socialist?

You know, I don’t think name-calling is helpful. I’ve done my share of that, so I’m not Pollyannaish about how the political process works. But as a general proposition, I think these are serious times, the country’s in significant danger, and I think we need people who are thoughtful. We’re gonna have sharp differences, but we need to debate those in a way that’s constructive and civil. I think President Obama is governing as a movement liberal. I don’t think that rises to the level of being a socialist.

This puts Pawlenty in the mainstream of conservatism in about 75% of the country - and proves that he can handle a hostile interviewer. (Warren spent a lot of time making statements that defended Obama, much less time asking Pawlenty any questions that might reveal something about the man.)

Beyond that, note that he makes a classic defense of conservative principles against the onslaught of liberal orthodoxy on growing the size of government to meet challenges. And he frames this argument in terms of American exceptionalism - the “American Spirit” he calls it - while clearly delineating between the role of government and the role of private citizens.

Clearly, Pawlenty has given these issues and concepts a great deal of thought. This comes out in his statement on why he might run in 2012:

I think the country’s in trouble. And I think I have a pretty clear sense of the values and principles that have made this country great. I’ve had a chance to govern and lead with those in mind, with some significant success in Minnesota. And I think the country needs that kind of leadership and insight and perspective. So through my PAC, I’m going to share my beliefs across the country. And I’m gonna take the next year to see how that goes and make my decision late in 2010 or in early 2011.

His bid is still a very long shot. He will not generate the kind of excitement that Sarah Palin would if she chooses to run, nor will he possess the bottomless resources of a Romney should Mitt choose to throw his hat into the ring again. He will not capture much of the Republican base, nor attract much interest in the south generally speaking. He is not an inspiring speaker by any means.

But Pawlenty is a candidate brimming with ideas, and an idea of what kind of leadership the country needs right now. How far that will take him is anyone’s guess.

First, let’s dispense with the notion that Obama has not cut taxes for a very large majority of Americans. In fact, the administration went a step further and “refunded” monies to people who don’t pay any taxes in the first place - a giveaway little noticed at the time.

But most critics are focusing on the payroll tax cut that grants an individual an extra $400 a year in take home, and a married couple filing jointly $800. This is a tax cut - period. Of course, at the end of the year when you do your taxes, your calculated tax includes that extra cash so your refund may be slightly smaller. It’s not like you didn’t earn the money and don’t owe taxes on it. The government just decided to allow you to keep a little more of what you earned each pay period by reducing the amount they withheld from your check in payroll taxes.

Some administration opponents are trying to make the case that because this does nothing to decrease the average American’s tax bill that it is not a tax cut. Technically, they may have a case. But if you ask the average taxpayer if taking home more cash every week is a tax cut, they would almost certainly say yes.

It was a good plan, although fairly modest in its workings. It didn’t help the economy much at all and the reason most Americans think their taxes haven’t been cut is probably due to the fact that the average taxpayer’s take home pay was increased by only around $13 a week.

Also, concentrating solely on the reduction in withholding is disingenuous. There were other tax cuts in the stim bill (they didn’t work either) as well as extensions or enhancements of Bush era tax cuts that the president - being disingenuous himself - is claiming as his own.

Here are a few:

First time home buyer credit: Enacted under Bush, enhanced up to $8000 credit for buying a new home.

Reduction or elimination of sales tax and use taxes paid on qualified new car purchases. (Expired 1/1/10).

American Opportunity Tax Credit on college scholarships. Changed the name from the “HOPE scholarship credit” and enhanced and relaxed rules for broader participation.

Expanded and enhanced energy tax credits already in place.

Then there are “tax cuts” that primarily targeted Americans who don’t pay any taxes at all. Including these measures allows the president to say he has “cut” taxes for 95% of Americans:

Child Tax Credit. The Stim bill enhanced the child tax credit by making a larger portion of the credit refundable for 2009 and 2010. Even if you paid no income tax, you can still receive the money.

The Stim bill increased the Earned Income Tax Credit. This is another refundable credit that allows taxpayers that pay no income tax to get thousands of dollars “refunded” to them.

There were also a couple of items in the stim bill that either extended Bush era cuts for small business or enhanced existing programs.

What we can glean from this thumbnail summary is that both sides are right, and both sides are being disingenuous in picking and choosing what constitutes a tax cut and what doesn’t. The facts, however, are clear; taxes were cut for a large majority of Americans while the president is taking credit for some tax cuts not of his own design.

I think it very revealing of the philosophy of both sides in this argument as it relates to taxes in general and how the government funds itself.

Whose money is it anyway? It appears to me that on the left, there is the feeling that whatever you earn belongs to the government and it is up to government to decide how much of your money you can keep. Admittedly, this is put rather crudely but I think it an accurate reflection of what liberals believe, at least subconsciously. It is philosophically satisfying for many liberals to reduce what the government withholds from your paycheck because it signifies the government’s power to determine how much of your own property you are entitled to - even if the amount is paltry as it is in the stim bill.

Conservatives, on the other hand, believe that your earnings are your property and that the citizen consents to have the government take that portion it needs to operate efficiently. Ideally, we give our consent by electing representatives whose philosophy reflects that basic, underlying creed of personal liberty and the sanctity of private property. If taxes become too high, we elect people who promise to ease the burden. That also, is a form of consent.

I never hear the word “consent” from the left when it comes to a citizen parting with their property for taxes. Is it an important distinction? I believe it is indeed and that this fundamental outlook on taxes highlights a huge divide between right and left.

So perhaps all the hub-bub on the right about Obama not cutting taxes for the vast majority of Americans has more to do with a basic disagreement over whose money we’re talking about to begin with. Liberal governments appear to take an entirely different view of property than conservatives ones. This manifests itself in support for expanded eminent domain powers by the left, and a more limited definition of “private” property.

But if we’re going to criticize the president, let’s do it for his disingenuousness in claiming credit for tax provisions he had absolutely nothing to do with creating.

It would be easy to dismiss the deficit reduction plan offered by Representative Paul Ryan (R-WI) a couple of weeks ago as a non-starter politically. Indeed, ordinarily I would castigate either a Republican or Democrat for offering such a pie in the sky, politically unfeasible plan with regard to anything.

But what makes Ryan’s deficit reduction plan worthy of serious discussion is what it portends for the future; that the longer we go without addressing the underlying causes of the deficit, the harder it is going to be to save the US from bankruptcy.

Even liberals were impressed. Ezra Klein totally disagreed with it but called the plan “daring.” Ygelsias said of the plan that Ryan “has gone where I thought no Republican would dare to tread.” But the establishment Republicans tiptoed around Ryan and virtually disavowed his efforts at finding a way forward. Ryan himself said he wasn’t speaking for his fellow Republicans, thus letting them off the hook.

Ryan’s plan can be considered very stiff medicine indeed. He calls for the elimination of Medicare and Medicaid as we know it by substituting vouchers that seniors can purchase to buy their own insurance plans. The value of these vouchers will go up in succeeding years but - and here’s the kicker - they will not rise as fast as the cost of medical care. Basically, it is rationing health care through individual choices.

Bruce Bartlett writing in Forbes, gives us the barebones outline of Ryan’s bitter pill deficit reduction plan:

[I]t is really heroic that Rep. Ryan did not shrink away from confronting head-on the necessity of slashing entitlements for the elderly in order to achieve his goal of abolishing the federal debt without an increase in the tax-to-GDP ratio.

On Social Security Ryan would reduce initial benefits for retirees by changing the benefit formula. Private accounts would be established immediately for those under age 55 that would be partially funded by payroll taxes.

Ryan would also raise the age to qualify for Medicare from 65 to 69 years and 6 months for people born in the year 2022. After the year 2021, the Medicare program as we know it would cease to exist. Instead of receiving health benefits through Medicare, those over age 65 would instead receive government vouchers worth $5,900. These vouchers would be adjusted for age and health status, which would put the average voucher at $11,000. Medicare beneficiaries would buy private health insurance with the vouchers.

These amounts are considerably less than estimated Medicare spending per enrollee in 2022, so there is a sharp cut in spending right off the bat. Furthermore, these amounts would only be indexed to half the historical rate of price inflation for medical care. This means that the real, inflation-adjusted voucher amount would fall continuously. To cover the shortfall, Medicare beneficiaries would either have to pay out of their own pockets for medical care or buy private insurance over and above what could be purchased with the Medicare vouchers.

Ryan also calls for the elimination of the tax exclusion for employer health care plans. This would mean a huge tax increase for workers who would have to pay income tax on the cost to the employer of their insurance.

The plan is political poison - but illustrative of the kinds of draconian measures that will be necessary to get us out of this deficit mess. In this way, Ryan has done a huge service to the American people by having the political courage to present this plan with all its pain, and the political opening you can drive a Mack truck through if you were a Democrat seeking to make hay out of it.

The GOP showed in the health care debate how easy it is to demagogue Medicare cuts; just pretend that you never supported the idea of cutting Medicare and lambaste the Democrats for wanting to cut $500 billion over 10 years. You instantly become a hero to seniors who go nuts if you even whisper about cutting Medicare. They don’t know that as recently as 2007, Republicans were calling for similar cuts in Medicare. And thus will be the fate of any politician or party who seeks to fiddle with Medicare reimbursements or costs.

This is a recipe for total disaster, as the former GAO chief David Walker has been trying to tell us for the last 4 years:

“History has shown that when America faces difficult challenges and when it rises to the occasion, anything is possible,” he said in an interview. Yet “a fiscal cancer,” he said, “is growing within us, that if we don’t treat, can have catastrophic consequences.”

For more than a year that’s been Walker’s message to Americans. It is part of what he calls a Fiscal Wakeup Tour, an itinerant, bi-partisan lecture panel known as the Concord Coalition, which is traveling to college campuses in advance of the 2008 presidential elections. Accompanying Walker are economists from the left-leaning Brookings Institution and the conservative Heritage Foundation (usually Isabel Sawhill from the former and Stuart Butler from the latter). They may disagree about the potential solution, but they are in accord that a problem exists.

The crux of the campaign: to spread the word that Americans and their government are living beyond their means and that fiscal fecklessness is imperiling the country’s living standards.

Here we are, 3 years after that column was written and the prescience of Walker and others who have been shouting in the wilderness for so long about how absolutely imperative it is to address our long term deficit problem becomes obvious. We are only at the beginning of our “unsustainable” deficits. With the debt ceiling primed to rise above our GDP for the first time, we will get a very close look at what Walker, Ryan, and others have been grousing about; less and less government spending devoted to items like defense, education, the environment, and aid to the poor with more and more of the budget being forced to fund social security and Medicare.

When I profiled Rep. Ryan here, I highlighted the kind of muscular conservatism he stands for; meaty, intellectually coherent, and now add politically courageous to that thumbnail.

Bartlett challenges the tea party movement to embrace Ryan:

I think it is irresponsible to say, as almost all tea party goers do, that they are unalterably opposed to tax increases without specifying spending cuts–large cuts in popular programs that go far beyond foreign aid, earmarks and even a budget freeze. And if they are serious they must admit that coming anywhere close to budget balance cannot be done without slashing Social Security and Medicare benefits. There’s no way around that and anyone who says so is either ignorant or a fool.

When I see people like Paul Ryan addressing large tea party conventions and receiving standing ovations for his budget plan, maybe I will begin to think it is possible to avoid a massive tax increase. But right now, I don’t see even the tiniest glimmer of understanding among the tea party crowd about the true nature of our budget problem and what it would take to avoid a major tax increase.

The next time I see pictures of a tea party crowd I will be looking carefully for signs that say “Abolish Medicare,” “Raise the Retirement Age” and “Support the Ryan Plan!” I won’t hold my breath waiting.

Indeed, those familiar with this site know that I have, on several occasions, called out conservatives for their lack of specificity in defining what they mean by “limited government.” Where would you cut? Whose ox would you gore? How would you be able to do it when the political winds blow so strongly against you? In response, I’ve gotten vague intimations of some kind of “Super-Federalism” that would transfer most of what the federal government does now to the states, or a “let them eat cake” attitude where many on the right wish to roll back not only LBJ’s Great Society, but also FDR’s New Deal. Some wish to go even further and set up what would amount to a pre-constitutional government where the states would be supreme - “an Articles of Confederation on steroids” I’ve called it.

Ryan’s plan shows it won’t be easy, that it won’t come by only cutting spending, and that not only our lawmakers, but voters as well must become responsible citizens of the republic in order to bite down - hard - and do what is necessary to save us from our own profligacy. A nation that defeated fascism, communism, and can rise above its own sordid past and elect a black man president can do anything it sets its mind to.

Just give us a couple of hundred more Paul Ryans, please.

Are you as economics challenged as I am? Good - you’ll enjoy this. If you’re an economist by trade or got your PHD and are driving a cab, or working at The Gap, you may want to skip this.

Unbeknown to most Americans - unless you read the Wall Street Journal, Bloomberg, foreign newspapers or can stomach Paul Krugman for more than 200 words - there has been a full blown panic in Europe this last fortnight or so over the state of the Greek economy. Why this is true is kind of murky to me but it has something to do with the huge deficit the country is running and how close they are to a sovereign default - that is, the Greeks will default on on their debt to the rest of the world. This has the potential of starting a series of defaults of the weaker EU economies comprising about 10% of EU GDP.

A nice, simple, easy to understand definition from the TimesOnline:

The failure of Lehman Brothers in September 2008 symbolises the crisis. The biggest corporate bankruptcy in US history transformed a credit crunch into full-blown financial panic. But Lehman was a private company. A country unable to refinance its debt is a much bigger problem.

Greece has accumulated a massive public debt of € 300 billion. Its budget deficit amounts to almost 13 per cent of national income. Its Government has pledged austerity measures to reduce the deficit to 9 per cent of GDP in the next year and to 3 per cent in 2012. These projections are — and this is a euphemism — improbable. If financial confidence evaporates, then the contagion might spread to other indebted European economies. Sober analysts speak of the greatest test for the single European currency since its launch in 1999, and even of the possibility of Greece’s exit, voluntary or forced, from the euro.

The case against a bailout is formidable. No one forced Greece to borrow. Its previous Government, which lost office in October, understated the size of the budget deficit. A rescue is in effect asking the taxpayers of other eurozone countries to pay for irresponsible decisions over which they had no control. The main losers would be Germany’s prudent taxpayers. A rescue might also destabilise Greece. The prospect of foreigners attaching conditions to how the economy is run would be politically explosive.

In short, this is a two pronged crisis; not only is Greece up to its eyeballs in red ink but the other shoe that is poised to drop is that no one is exactly sure what should be done about it.

If we were talking about a Third World country, the solution would be found in the International Monetary Fund who would be more than happy to loan Greece some American taxpayer money to get out from under. Alas, no self-respecting First World country would be caught dead accepting loans from the IMF. Such things are just not done, even though Greece may go under and take a good portion of the European economy with it.

There are other interesting aspects to this crisis; the old government hiding the extent of the debt - evidently with the help of Goldman-Sachs. And Greek workers are none too pleased either. Rather than “taking one for the team,” government unions are saying “cut his not mine.” Pay close attention because when it becomes necessary in this country to cut government workers pensions and pay, we’ll look a lot like Greece.

Niall Ferguson writing in the Financial Times:

That leaves just three possibilities: one of the most excruciating fiscal squeezes in modern European history – reducing the deficit from 13 per cent to 3 per cent of gross domestic product within just three years; outright default on all or part of the Greek government’s debt; or (most likely, as signalled by German officials on Wednesday) some kind of bail-out led by Berlin. Because none of these options is very appealing, and because any decision about Greece will have implications for Portugal, Spain and possibly others, it may take much horse-trading before one can be reached.

Yet the idiosyncrasies of the eurozone should not distract us from the general nature of the fiscal crisis that is now afflicting most western economies. Call it the fractal geometry of debt: the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes.

What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch. Deficits did not “save” us half so much as monetary policy – zero interest rates plus quantitative easing – did. First, the impact of government spending (the hallowed “multiplier”) has been much less than the proponents of stimulus hoped. Second, there is a good deal of “leakage” from open economies in a globalised world. Last, crucially, explosions of public debt incur bills that fall due much sooner than we expect.

So Germany, reluctantly, and even though they could probably ride out the storm of a financial crisis if Greece and a few other weak EU sisters were to go under, appears ready to pony up and put its own taxpayers on the line in order to save the Euro and hence, the cornerstone of the EU itself:

European leaders, facing a crucial test for the credibility of their common currency, promised “determined and coordinated action” to safeguard the euro as they sought to persuade jittery bond market investors that Greece would not be allowed to default on its government debt.

Herman Van Rompuy, president of the European Council, also said that the European Union would monitor closely Greece’s pledges to reduce its alarming budget deficit, and would propose measures for Athens drawing on the expertise of the International Monetary Fund.

Further work by finance ministers on assistance for Greece, and the conditions that would be attached to any aid, will take place early next week. But the initial reaction in the markets was disappointment at the lack of detail in the announcement. The euro dropped 0.8 percent to $1.3630.

Mr. Van Rompuy, who insisted that the Greek government “has not requested any financial support,” issued his statement after meeting leaders of Greece, France and Germany in Brussels before the meeting of all 27 European Union national leaders. German Chancellor Angela Merkel said before the announcement: “Greece won’t be left alone but there are rules and these rules must be adhered to. On this basis we will agree on a statement.”

As good bankers are wont to do, they will perform feats of legerdemain, hiding the transfer of cash from Germany and France (probably), making it appear that it is anything except a massive bailout from one government to another. This will save Greek sensibilities and perhaps assuage the feelings of German taxpayers.

But don’t kid yourself. This crisis is far from over and might yet reach our shores, precipitating another meltdown in the financial sector. Much would apparently have to happen in Europe for that scenario to come true, including defaults by some of the larger economies like Great Britain. But as this phantom recovery continues in the US, it is well to bear in mind that outside forces could yet derail this weak economic comeback.