Politicians constantly face incentives to spend and print money, thanks to interest groups’ never-ending demands. But a deeper rot in conventional economic thinking allowed those who thought interest rates would stay forever low to think they had a theoretical justification for recklessly spending and borrowing.
The latest Congressional Budget Office (CBO) numbers show public debt has reached close to $26 trillion, or 97 percent of GDP. Ten years ago, it was roughly $12 trillion, or 71.9 percent of GDP. About 70 percent of this debt has been taken on since 2019. While jacking up spending in times of emergency is understandable, COVID didn’t require spending more than $5 trillion in just two years. Even by Keynesian standards, the amount of cash injected into the economy since 2019 was larger than any plausible output gap. What’s more, in the last year the deficit has doubled even though the pandemic is effectively over.
For decades, Washington has spent money it didn’t have on entitlement programs that benefit the relatively old and rich. They have picked up the pace of spending in recent years, encouraged by economists and pundits who claimed that interest rates would always stay low and that the insatiable appetite for U.S. government debt would not end anytime soon.
You don’t have to be ideologically committed to a smaller government to understand that this was a risky bet. Rates are up, and people aren’t as eager to buy U.S. debt at the current price, especially since there is much more to come. So we’re probably in for more rate hikes and higher interest payments, and we may get more inflation. I don’t know where that will end, but I do know that all this was utterly predictable—and that the blame rests not just on lawmakers’ failure to tend to the country’s fiscal health, but on those who made up dubious economic theories to facilitate their fiscal delinquency.
Sadly, labeling critics as “bad faith” actors has become a default weapon of its own for burying factually accurate revelations of academic misconduct by figures on the political left. We saw this same defensive pattern emerge in the early 2000s controversy around Michael Bellesiles, then a history professor at Emory University. Bellesiles’s book, Arming America, skyrocketed to academic fame primarily because its historical narrative bolstered present-day arguments for firearms regulation. When researcher Clayton Cramer uncovered evidence that Bellesiles falsified his sources and made unsupported claims from nonexistent historical records, academia circled the wagons. The American Historical Association passed a resolution depicting Bellesiles as a victim of harassment, and numerous scholars attacked Cramer as a “bad faith” critic with ties to the firearms lobby. They only changed their tune when the evidence became impossible to ignore, resulting in Bellesiles’s resignation and the revocation of the prestigious Bancroft Prize for his book.
Last year, I discovered signs of possible plagiarism by Kevin M. Kruse, a Princeton historian and left-wing Twitter celebrity. Much like Claudine Gay, Kruse cribbed text from other authors without the requisite quotation marks or, in some cases, citations. In one case, Kruse copied the thesis statement of his dissertation from another author’s book, only modifying its location from Detroit to Atlanta. A review in the Chronicle of Higher Education concluded that “what Kruse did in those instances is, by almost any definition, plagiarism” and further cited Princeton’s own policies, “which specifically say that sloppiness is not an acceptable excuse.” To Kruse’s supporters though, I was a “bad-faith actor” on account of simply disagreeing with Kruse’s progressive politics. Presaging Harvard’s own deflection strategy, Princeton contradicted its published rules and excused away the evidence as “careless cutting and pasting.”
The resulting epistemic fluidity is a hallmark of the “critical theory” mindset that currently dominates large swaths of academia. So is the willingness to selectively discard longstanding rules against plagiarism when they inconvenience one’s own teammates. After dividing the world into oppressors and the oppressed, all other judgment calls depend solely on whether they serve a favored ideological perspective. The validity of evidence becomes wholly subordinate to the question of whether it advances or embarrasses a particular political objective. For this reason, it is not uncommon to see strident defenses of Gay by the very same academics who howled at Neil Gorsuch and Melania Trump over significantly lesser allegations of plagiarism. The substance of the charge does not matter in these circumstances—only its usefulness to the political cause.
Peter Huntsman, writing in the Wall Street Journal, offers this wise warning about the Davos divas: “In the name of green utopia, political leaders are quietly killing vital energy-intensive industries.” A slice:
One of the results of capitalism is that it creates such abundance that people can take for granted all the resources and work that go into everyday products. You rarely think about the plants making the chemicals that go into everything from smartphones to fertilizers that enable the global food supply chain to feed more than eight billion people. Manufacturers of our most basic materials are out of sight and out of mind, just like the regulatory pushes crushing those industries in Europe. But as the Continent will discover in the years ahead, upstream deindustrialization will spread downstream over time into the agriculture, automotive, aerospace, electronics and construction sectors, as well as the thousands of small businesses that are the backbone of Europe.
Our forebears relied on forests for energy, whales for lighting, and animals for transportation. They didn’t have the luxury of believing that nations shouldn’t extract natural resources and convert them into useful materials. That Europe was once willing to do so led to the Enlightenment and then the Agricultural and Industrial revolutions. Through innovation, the Continent created the mass production of petroleum, chemicals, iron, steam power, fertilizer and textiles. Population growth exploded, and standards of living skyrocketed. These technological advancements, ideas and values spread worldwide and lifted humanity to unforeseen heights.
It doesn’t add to the prosecution’s credibility that one of its key witnesses is a former pro-democracy activist named Andy Li. Mr. Li is a sad case. He was arrested and taken to China after trying to escape Hong Kong. There are credible reports that he was tortured while in custody, and Mr. Lai’s lawyers have lodged an appeal with the U.N. Special Rapporteur on Torture.
Mr. Lai is a British citizen, and this month Prime Minister Rishi Sunak wrote a letter to Chris Patten, the last British governor. Mr. Sunak called Mr. Lai a “champion of freedom,” declared his trial “politically motivated,” and said his case remains a priority for the British government. The 76-year-old has already been imprisoned for three years.