Revolt of the Elites
By Arnold Kling
I am getting ready to take a couple days off from blogging. If I could count on Congress to leave town now, I would put in an order to increase my holdings of stock index funds. But I’m going to hold off.
I am struck by how bitterly some commentators have taken the House vote against the bailout. The elite, including many conservatives, are appalled that House members would listen to their constituents rather than their betters. The title of Chistopher Lasch’s book, The Revolt of the Elites, comes to mind, to characterize the feelings of the jilted establishment. David Brooks must be horrified.
At this point, those who voted against the bill, and have been called “unpatriotic” and other names, have nothing to gain by voting for a different version of the bailout. The press will hold them in contempt no matter what, so their best chance of saving face is to vote against any bailout and hope that the economy survives.
I think that the financial markets and the economy will be rocky with or without a bailout, for at east another year or so. My guess is that if Obama wins, then the Democrats will spend the next two months pouncing on every negative economic indicator, to try to build the case for massive economic restructuring under his Presidency–making the bailout seem libertarian by comparison.
I see free markets as very much the underdog going forward. But if there is no bailout, then at least markets have a fighting chance. I would want to defeat this particular revolt of the elites, realizing that larger battles probably lie ahead.