We wrote earlier that the Entertainment industry would highlight the starker differences between the hot tub wing of the Democrat Party and the more austere Amber Socialists-With-An-Edge. We also predicted who would win, although we 'don't know how long it will take the contest to play out.
    But it will be Economic policy by which the New Direction (or Change, to coin a phrase) will be defined. The theme of this new socialism will be set by its Economic direction.
    So, which way will it go?
    I just wrote (Part IX) about the irony of the New Socialism, since  it will do many things for all the wrong reason cultural conservatives have wanted to see put into place for many years now. We are at the front end of what may be a deep, deep recession. This recession was, for the most part, the creation of the hot tub Leftists and their allies in the Black Congressional Caucus, a small criminal scam which, shall we say, got out of hand. Way out of hand. Greed in all the expected places helped.
    Two things will come of this. First, power over consumer spending now rests firmly in the hands of the consumers. For the first time in twenty years consumers will have to make choices based on actual availability of cash, and not on an endless supply of debt. Second will be how the new government wants to facilitate or debilitate new consumer spending, and in what sectors. In other words, we're not sure the administration will want us to shoot out of this recession anytime soon, as long as they control who will grow out of it, and who will sink. I say this because they probably don't have to worry about voter wrath since (it's our opinion) elections won't matter for awhile. Until the people (forget the GOP) can figure out the Democrats can win entire Republican districts out of whole cloth, voting won't matter. Honeymoon or no honeymoon, the Obamailis can make this last as long as they wish.
    Let's look at these things in sequence. We (I've) been screaming since the Reagan Administration when RR strolled to the mic and urged Americans to spend. Can't you be a little more clear, Mr President? After, what they spend on can matter greatly to the safety and security of the House, and in turn, the Republic. Pres Bush urged us likewise, and whether we know it or not, the hot tub Democrats actually liked the idea, so long as they were getting a nice slice of the pie. In fact, since Reagan led us out of the last real recession in 1983, jobs growth has doubled, there has been strong measurable gains in average income per households, so the Democrats have doubled their ability to "spread the wealth". Still, they have been been able to maintain the rhetorical high road by saying the economy is in the crapper and it has all been the GOP and their rich corporate friends' fault, as always, skinning the little guy...just as welfare recipients were lining up to buy their second car. They got away with this because the media wouldn't expose the lie, and the Republicans felt it more important that they suck their thumbs in a corner rather that create their own bull-horns to spread the truth. An oafishly humble (I hate oafish humility, by the way, don't you?) President didn't help. We've already written about what happens when one's honor (M'Cain) or one's association with God (Bush) becomes a vanity. The same for humility. When it harms your country, you need to pause and reflect.
    In any case, the American consumer is now the final arbiter about the spending side of the economy, and this in turn will negatively effect tax revenues both at the state and federal levels. What we know is that we will not likely see a shrinkage in either's bureaucracies, where all the waste is.
    Probably as much as 20% of the American consumer economy has been dedicated to profligate spending the past two decades. If there is a real politics then there is also a false politics, and likewise, if there is a real economy there is also a false economy. Using the Aristotelian yardstick of the Good End, a false economy is that group of activities that steer men away from their own good end. For instance, when condom use goes up (which is good for some district's economy, i.e., jobs, tax base) other elements of the moral culture goes down. The House is in more trouble, not less. Fast food twice a week is a treat. 15 times a week, a disaster. How many young working kids...they even target this group with advertising...spend 30% or more of their average weekly income by eating out rather than bagging lunches, thus saving what, two-three thousand a year? Or how about how much we spend on our kids, especially in electronics? Cell phones, I-tunes, phone-photos, video games, have all launched even more business lines that steer those kids away from the long term objectives of their own futures. They already can't tell time with clocks that have hands (unless Mom and dad taught them). Now, because they can't read a map, or even use MapQwest, which requires reading, they just pop in a Garmin. But they all have MySpace or somesuch where, suddenly, at thirteen, they start advertising their newest underwear..to total strangers.
    And just who's paying for all this? Mom and Dad, or Dad through Mom only Dad doesn't live here anymore. Forget pre-sweetened cereal, Hollywood and Pop Music have all grown in leaps and bounds because of what Mom and Dad spend to entertain their kids. Has anyone ever heard of earning a thing? And then there's China, whose collectivist heart races every Back-to-School Season, because hand-me-downs have become anathema in American society. The list goes on. Point is, kids don't earn any of these things, thus the jeopardizing the future of their House.
    And young adults are not much better. Ever see a 48" Toshiba flat screen in an unswept studio apartment that requires sitting on plastic lawn chains and eating off one of those big circular wood wire-spools telephone companies discard? How will that guy re-prioritize in the coming dark days?
    It will be interesting to see how all this plays out, for if the kids have their way, Mom and Dad will be driving '78 Pontiacs before they'll give up their cell phones. Fourteen is a tough tough age to finally hear the word "No". And the Obamailis sure don't want to lose them once they turn eighteen. The effects of a re-prioritized economy on the youth that helped them get into office is but one of many existential crossroads for the new socialism.
    But we know Congress is already pulling for a new stimulus package after the New Year, but like the last one, it will do little other than improve the overall temperament among citizens about getting something for nothing. No matter what Congress does, we expect the consumer economy to constrict considerably...again for all the wrong reasons.
    In the long run, 10-20 years for starters, socialism will require the economy to constrict and that will be in just the profligate places I've outlined. Big Fast Food has been in cross hairs of the health nazis for years, and they surely will be big winners under the new socialism. We've already written about where the Entertainment industry is likely to go over the next generation, especially if there is a puritanical edge to the new socialism, as we expect there will be.
    But as explained, it will be helpful to the new government if it appears the people are making these choices rather than themselves. Therefore, while the pirate wing of the Party will want to explode out of this recession as quickly as possible, so that Reid doesn't have to opt for a cheaper gravy on his roast beef, the new socialism may want to drag this out and squeeze every advantage out of it. Congress may well have to settle for DiGiorno's and a microwave.
    But this is only the matter at hand now. This will eventually pass. Someone, we know, actually has a schematic of a 20-30-even 40 year plan over there. It's the sort of thing people like Ayers do just for sport. It's one aspect of planning and governance the Clinton's absolutely missed. Both lived for the moment and could never see past their most immediate appetite for even an day. While we're curious about all the Obama appointments coming from the old Clinton administration, and while Obama's explanation is entirely plausible (that he is the idea guy and they are tried and proven action guys), it could be that many of them from the Clinton days left their jobs "unfulfilled", shall we say, seeing so much more promise, in a socialist sense, than they ever could ever realize under the Clinton's. If I were a dedicated socialist I would have found working for two spoiled children very frustrating. A second shot at the ring may be in the offing. This is merely a speculation, mind you.
    As to the central theme of the new socialism, I believe if you look at European bourses you will get a glimmer of how they envision it. The market will be less diversified, and far less numerous. (This will take years.) Big winners of course will be those industries that find favor with government. I repeat what I wrote before, that the socialist do not want to own these industries outright, but over the next 30 years for many internal management reasons there will be an inexorable pull in that direction. This will be the case in part because of what has already taken place, which is government's equity stake (ownership) in banking and lending, and soon to be automobile industry.
    Banking, like steel, oil, raw materials, is a foundational enterprise in a free economy. A central part of the engine. Communism doesn't actually need banks except to carry on international trade (or, as they found out by the 1970s) as a way to steal back what even their poor workers could save, by way of savings accounts. Hot tub socialist, like the facsists of the 30s, really don't mind some industries and businesses being very, very wealthy, including executive salaries and other perqs, as long as they are friends of the families. (Hitler knew he was secure once he brought the Krupps over to his side.)
   So Reid & Co really have no problem with enormous personal wealth being created for executives inside their orb. Just look at Fannie Mae and Freddy Mac. The problem they face are twofold: One, what to do about companies that were the enemy while outside their orb, but suddenly allies once inside their orb? Again, Reid & Co will have no problem realigning their thinking. But will Waxman make nice? And how about the Obamailis? Executive compensation for them is a philosophical issue, just just one of patronage. It has been a major issue with them for a very long time, and merely pushing the tax rate back to 89% won't quite fix the problem as they see it. As long as the tax code is the tax code, they know their client corporations will always find ways around it, just as they did in the 70s.
   This brings about problem #2; and that is what to do about all those other giant corporations that have not come under the government umbrella. True, most are consumer companies, like Proctor & Gamble, Microsoft, Big Oil and Big Health (which we think will fall next). They will constrict as the economy constricts. But as long as there are companies out there with no government fingers around the throat, companies inside the government orb will be looking for ways to match their executive colleagues...even if they have to cheat. As we saw with Fannie Mae, et al, some members of Congress are easy to bribe. The Obamailis, we suspect, will not be so easy, thus creating a problem. How it will be resolved will be anyone's guess.
   Since we believe the theme of the Obama socialists will be to re-distribute income into whatever "equitable formula" it deems fit (all this is as yet unrevealed) we believe they will move to limit at the federal level executive compensation across the board. Unconstitutional? Of course. But when did that stop Congress? And how will it stop how some judges would rule on the case, even now, let alone the new Court as set up in the next four years? I just hope Roberts, Scalia and Alito all check their brake linings regularly.
   That done, the new socialism can pick and choose what industries will get most favored status. We believe a reoriented health care industry will be among those. To be sure, R&D, not only in drugs, but also medical technology, will all but grind to a halt within 30 years, by then, who will know how it used to be? That's always been the unintended beauty of socialism...kill cultural memory through attrition.
   Second will be transportation. More precisely, the environment. The current bail out of the auto industry is being played up by the Right as a bail out of Big Labor, which it is, but they are missing the new role environmentalists will play. Global warming may be a hoax, but it has worked as good advertising at the most elemental of levels, so will work for many more years, even as air and water quality actually gets worse (which they will) by say 2030. Anyone who has visited the old Soviet Bloc and seen the black skies (worse than Pittsburgh in 1950) and rivers than run red (worse than strip mines from the 1940s, now long gone), and the undrinkable tap water (to this day), and areas the size of Kansas totally denuded due to nuclear mishaps, has to scratch his head and ask why it is that it is that form of government American environmentalists want to adopt in order to achieve their goals. It's a complex issue, and among modern environmentalists, laced with an incredible amount of incredible stupidity. But we know the new Obama socialism will be inheriting a mature, developed, and clean industrial base, so industrial expansion or development is not a central theme of theirs. In fact, reducing it, will be, for that is one sector they expect to pick up several thousand new workers for the upcoming Happy Pappy works programs. But the short answer, the reason the skies and water will worsen anyway will be one word: Bureaucracy. It just happens and there's nothing they can do about it.
    But in the meantime, state-to-state auto travel will diminish considerably. Thousands of interstate motel and gas station exchanges will dry up like so many old Humble stations in the Mojave. Gasoline will go back to 3.50-4.00 a gallon, and even in-town driving will be discouraged, as the new gas taxes will pay for other forms of mass transportation, many of which will make so sense at all. I can see trolleys, sure, in St Louis, maybe even say Omaha (maybe). But Lincoln?
   If environmentalist have their way, and we can't say just yet they will, by the way, they will try to force a migration away from the cities, a shut down of suburbia, and a return to the farms...with disastrous results. The kibbutzification of the Midwest will be a thing to see. New Harmony, Indiana, anyone?  Shakertown? But it will be tried, and if there are any successes, more to come. Ask again in 2040.
    Finally, as mentioned, we believe the Obamailis desire a constriction of the economy so as to be able to provide labor for the new infrastructure projects they have in planning stages already...at a deflated wage rate. New rising businesses under this regime will be those companies that can get these new contracts. Plus that, all the labor shifts from private to public sectors will also be away from non-union work to union work, too, no matter what state rules say. See how it will work?
    Again, without an external catastrophe, this will take years to develop. Like hair, it will not be seen to grow just by looking in the mirror each day.  Right now we're just watching and taking notes. The point is, if there is to be a counter strategy, it has to be put into action by next mid-terms, with expected results by 2012. As to what an action plan will actually look like, we think it best to cover our cards for now.
Vassar Bushmills