A Republic of Speculators

The long-suffering and largely ignored paleoconservatives might be forgiven for taking some satisfaction in the recent bursting of so many bubbles of avarice and pride, the sudden exposure of so many highly leveraged speculations in stupidity.  Let us recount some of the failed millennial assertions by the ruling party: that history has come to an end; that this will be a second American Century; that U.S. military power is omnipotent and redemptive; that nationalism and religion have lost all value in the global marketplace; that nature has been remade to serve our pleasure; that technology has abolished the laws of scarcity; that the business cycle has been broken and stretched into an ascending line to utopia; that we can borrow and spend our way to imperial munificence and exurban bliss.

Hence the shock when, in a little less than a year, Americans have seen the dollar plunge, inflation soar, the housing market collapse, the price of gas explode.  With their wages stagnating, their savings near zero, credit cards maxed out, their government in deficit and overextended abroad, Americans are panicking, and the mood is understandable.  Public-sector debt (state and federal) stands at $11 trillion.  That’s less than one third of private-sector debt, which is a staggering $37 trillion, and that does not count unfunded federal liabilities (Social Security, Medicare, pensions).  The ratio of credit-market...

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