After the 2012 Presidential Election, conservatives despondent with Barack Obama’s re-election predicted an economic collapse in the US thanks to Obama’s dirigisme. So far it hasn’t happened. Not only that but all indications point to real economic recovery – at long last. It’s amazing what a $60 per barrel drop in oil prices will do for an economy. A conservative objection would be that low oil prices were hardly due to Obama, that their drop was precipitated by the fracking revolution – something that Obama’s policies actively hindered, and that Obama is only benefiting from forces that he actively tried to stop. Yes, this is all true, but that’s the point. Thanks to the decentralized, federal system possessed by the United States (in spite of a century’s worth of effort by progressives to centralize all decision-making in Washington), America is able to heal itself in spite of its leaders.
Taken as a whole, Obama, Biden, McConnell, Reid, Boehner, and Pelosi are probably the worst group of leaders that the United States has had in recent memory. And yet, there is a profound renewal going on at the state and local level where a group of new, young, energetic Republican reformers have taken over many governorships and state houses. Blogger extraordinaire Walter Russell Mead has extensively chronicled this phenomenon, which he has coined, The Death of the Blue State Model. The result has been a grass-roots rejuvenation. For every Bill de Blasio (currently screwing New York City into the ground), there are a half-dozen reforming governors, like Bobby Jindal, Scott Walker, and Nikki Haley. The great Liberal Justice, Louis Brandeis, said it best:
“A state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”
What he meant was that competition between individual states ensures that the best policies win out while, at the same time, no individual has too much power to screw up. Will Bill de Blasio ever win another executive office again? Anywhere?
This phenomenon is best illustrated with a counterexample. Look at a country plagued by overcentralization, like Russia. On the surface, Russian strongman Vladimir Putin is powerful, exuding competence and glistening pecs. He made Obama look like a fool over the Syrian red-line fiasco. But in the long run, short-term victories don’t count. No man - no matter how tactically brilliant - is smart enough to run an entire country from a central location. (The governors of all its provinces are selected by the Kremlin). As a result, the Russian economy is a one-note song. Even when oil prices were $115 per barrel, Putin couldn’t maintain the road network he inherited from Yeltsin. It doesn’t matter if his American opponent is a lethargic golf-a-holic, promoting destructive policies. America is greater than that. Its wisdom is distributed and America is stronger and wiser for it. America is regenerating in spite of its worthless ruling class.
It is for this reason I am also not bullish on China in the long-term. The Chinese Communist Party’s Politbureau isn’t smart enough to run the entire Chinese economy. China’s explosive growth has been due to the fact that it has taken Chinese peasants, effectively living in the middle ages, and transported them into a ramshackled, semi-free, crony-capitalist simulacrum of a free economy. The growth rate has been up for so long because China has had a big supply of medieval peasants. These are beginning to run out. From now on, growth will be harder to achieve and will require real policy smarts. All the problems that the ChiComs have papered over, ignored, swept under the carpet, or simply not heard of, will need addressing.
As a result, I see a severe economic downturn and significant political instability in China’s near future and America will remain number 1, in spite of the bumblers inside the beltway.