One of the most pernicious effects of the Fed’s policies on American politics, especially over the past 25 years, has been what increasingly seems to be a homogenized set of policy choices. Identifying this homogenizing effect has been one of the themes of Mixed Market Artist.
For example: Americans elected the “Not Bush” candidate in 2008, amid explicit promises that he would end foreign military excursions, stop favoring the wealthy, and drastically reduce the role of Big Business — especially Big Finance — in politics. And yet, six-and-a-half years later:
- Americans watch in horror today as our latest foreign military excursion of choice has led to massive meltdowns all over the middle east.
- An asset boom (aided greatly by ZIRP) has goosed the stock market to unprecedented levels, a change that has largely tended to benefit those with substantial wealth.
- Major financial institutions have received tens of billions of dollars in bailouts while ordinary Americans have lost tens or hundreds of thousands of dollars apiece in equity as their homes collapsed in value.
- Big Finance (especially Goldman Sachs) played a major role in electing (and re-electing) Barack Obama.
Plus ça change, plus c’est la même chose. (“The more things change, the more they stay the same.”)
We see another example of this phenomenon with the issue of US immigration policy. Overall American opinion on immigration shows a clear consensus in favor of secured borders and limits on immigration. Despite this fairly durable consensus, American immigration policy is a dysfunctional mishmash of policies that neither secure the borders nor limit illegal immigration.
The Left in America is generally quite favorable to the mass legalization of immigrants who are in the US illegally (a.k.a. amnesty). On the Right, the story is more muddled. Libertarians generally favor open borders, while traditional Conservatives generally favor secured borders with substantially limited annual immigration. Rank-and-file GOP voter line up pretty closely with overall American opinion on amnesty: they broadly oppose it.
But despite this broad opposition among actual voters, the GOP’s big money donors funding candidates have apparently decided that they won’t support a candidate who opposes amnesty.
Even if Tea Partiers aren’t willing to get on board [with amnesty], Zwick [Romney’s 2012 Finance Director] said the GOP money men have learned their lesson: I really believe that the donor community … now finally recognizes, and I see them only wanting to get behind a candidate that is willing to take leadership on his issue.
So American voters seem likely to be presented with a choice on immigration in 2016: a really big amnesty (the Democrats’ position) or a somewhat smaller amnesty (the Republicans’ position). It doesn’t seem like there will be a viable third option.
This situation, quite frankly, makes a mockery of (small “r”) republican government. It’s like American voters walked into that bar with Jake and Elwood Blues, and were met by the bartender proudly telling them that they offer both kinds of policies there.
This situation seems unlikely to end well. At all.