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Hugh Hewitt Book Club

Mark Steyn’s economic and electoral Rx

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HH: To discuss it all and get the day started off, the hour started off, Mark Steyn, Columnist To the World. Mark Steyn, another terrible day. We’re now down to about 20% in a week, which is getting to rival the big day in 1987. What’s your sense from the experts you’ve been talking to and listening to of whether or not we’re at the bottom?

MS: Well, a few days ago, there was an argument about these swings and roundabouts in the markets as to whether they were going down because Congress wouldn’t pass the bailout package, or because it was likely to pass the bailout passage. There was a genuine argument about that. I think now the fact is that the decline, the slippage in the markets is the market’s reaction to the bailout package. And I think that actually gets very serious indeed. I think clearly, Congress’ attempt as a sort of government band-aid is not, was not the correct answer. And the question now is whether the Congressional consensus, and in a sense, both Obama and McCain represent that, I think the market has expressed its opinion on that, and we need something else now.

HH: Now there are, of course, lots of prognosticators saying McCain is paying a heavy price for this. Our friend, Geraghty, has said that tracking polls show every day that there’s a loss like this, Republicans drop in the polls. On the other hand, the facts of the matter are that Freddie and Fannie started this. They’re the infection that spread. Freddie and Fannie are protected by creatures, really, of the Democratic majority. And there’s an Obama premium being paid in this market as people flee capitalism. I heard Kelsey Grammer talking about this today, saying why he’s gotten out of the market in July because he didn’t want to be around when Obama was president. Does that message get through, Mark Steyn?

MS: Yes, I think that’s actually factored into it. In this crisis, do you want what by any measure would be the most left-wing government in the United States if not of all time, then certainly…well actually, I think it would be the most left-wing government of all time if you think of a Pelosi-led Congress, and an Obama-led White House. It’s not yet clear to me that what is happening on the markets isn’t also a comment on Obama’s lead in the polls. Now obviously when something like this happens, the incumbent party takes a hit. There’s an election in Canada coming up on Tuesday, and at the start of the campaign, Stephen Harper’s Conservative Party was expected to win a majority. It’s now looking as if they will get another slender minority government, or maybe it may even be a liberal minority government. And this is from one of the Western countries least affected by all this. So I think in a sense, it’s obvious that it’s the incumbent party that takes the hit, and that begs the question in a way, why isn’t McCain being damaged more by this, which I think is a reasonable question. And I think the answer to that has to be that the markets are not happy at the thought of the most left-wing government in American history.

HH: Let’s also talk about the incumbent party in the House and Senate, and that means Nancy Pelosi, Barney Frank, Harry Reid and Christopher Dodd.

MS: Yeah.

HH: Does that message get through, because it’s so true that they protected the virus. They let the virus spread.

MS: Yeah, well the point is we’re told we need this government intervention to save credit, because if you have a situation as there was in the 1930s where credit was in short supply, then that is disastrous for the economy. But what happened in this case is that the United States Congress devalued the currency of credit. They made credit meaningless. They created a world in which you can go and buy a house based on the size of your welfare payments. This is nuts. They’ve effectively debauched the currency of credit. And so if they’re not actually…I would argue that in fact what Congress ought to do is to step back and aside from anything else, end some of its previous interference in the market, rather than interfering in it further.

HH: Mark Steyn, earlier today I also heard a very savvy investor say look, you know, this is a panic sell-off, it will recover, it will recover over a period of time, don’t sell into an panic. However, he is worried about the amount of money that is being flooded in by a government such that he worries about hyper-inflation, especially in matters of fixed assets, land down the road. Now if you own a house, that’s fine. But if you don’t own a house, you could see land prices go to the sky.

MS: Yeah, and I’m opposed to that, because I think one…you know, I’m very much Mr. Demography Bore, as people who read my book know. And one of the reasons why I think America has the healthiest demographic profile of any Western nation is because it’s the cheapest advanced nation in which to buy a four bedroom house on a nice sized lot and raise a family. So I’m actually in favor of non-speculative house prices. And the government distortion of the market is very disturbing. I think it’s also worth bearing in mind what we’re talking about in terms of victims. I’m sure you get a lot of mail, I certainly do, about people moaning that their 401K has fallen 20%, 15%, or whatever. I mean, that would be a problem if you needed the 401K to pay your grocery bill this week. But in fact, that’s a hypothetical problem. That’s a sort of theoretical figure, that it will correct itself by the time you actually need the hard cash of that 401K. So I’m not yet persuaded that there are millions and millions of victims across the country who have actually lost the sums of money that would justify this size of a government intervention.

HH: Let’s turn to the political news before we lose you. This is the RNC’s ad released literally an hour ago backing up McCain’s attacks on Bill Ayers today, the RNC ad, cut number 10:

Voiceover: The Chicago way, shady politics. That’s Barack Obama’s training. His teachers? Tony Rezko, convicted of corruption, money laundering, aiding and abetting bribery. Rezko got Obama in on a shady land deal. William Daley, heir to the Chicago machine, a top Obama advisor, and William Ayers, leader of a terrorist group that bombed the U.S. Capitol. Obama’s first campaign was launched at a gathering at Mr. Ayers’ home. There’s more you need to know. The Republican National Committee is responsible for the content of this advertising.

HH: Mark Steyn, overdue, yes, but effective?

MS: This sort of stuff would have been better coming out a few months ago. And if Hillary had had any sense, she’d have used it. The fact is normally, politicians who aren’t known, the danger is that the opposition gets to define you. In fact, in Obama’s case, he has ridden to the brink of victory on the fact that he is an enigma. He’s basically a man nobody knows. His biography is shrouded in a sort of blur. He has all kinds of interesting things like his university records and everything haven’t been released. He’s the man nobody knows. It’s been left awful late to try and define the reality of this enigma before he’s up there taking the oath of office in January.

HH: What’s your advice, then, to the McCain campaign if they’re listening?

MS: Well, if I had to give one piece of advice, I’d say, I’d echo my friend Jay Nordlinger and say get Sarah Palin on her own in some ads on TV, face to face, talking to the camera. There’s enthusiasm for Sarah Palin out there that the McCain campaign is not meeting the demand for.

HH: What about the argument that Fannie and Freddie are in bed with Obama, that he was the leading recipient after Chris Dodd of money from them, which is true? Does that make any sense at this point?

MS: I think if you can distill that into a terse enough soundbyte to hang the sub-prime mess and the credit crunch and all the rest of it around the neck of Obama, you can do that. But for McCain to do that, he would have to be doing a Harry Truman 1948 campaign, and running against Congress. And right now, he doesn’t seem to be nimble enough to understand that that’s what he has to do.

HH: Now as the voter looks around the world, this is obviously a global crisis, not a George Bush crisis. Gordon Brown is buying the banks in London right now. But you’ve been watching…

MS: Yeah, but the Russians are buying the banks in Iceland, which can’t be good, either.

HH: And the Icelanders are not giving the British money back. I was reading the Telegraph this afternoon. What’s your sense of panic in the world, Mark? I’m very sanguine about this, because I just believe in democratic capitalism. What do you think?

MS: Well, I think that’s true in the United States. The Europeans have a problem, not the United Kingdom, but Continental Europe. They’re in the Euro zone. Effectively, they’re sovereign nations with a joint currency and a joint central bank. So their freedom of movement is far more restricted. And so I think in the end, a lot of the pain, the actual financial pain on citizens is going to fall a lot harder on Continental Europe than it will in the United States. And you’re right. I think Americans can afford to be relatively sanguine.

HH: Last question. The American media has hit a new low in the esteem of many today. An angry person at a Wisconsin rally brought this up, I’ll be talking about it a little bit later, that McCain’s got to fight back. Did you ever imagine that it could be this in the bag for a Democrat?

MS: I think this is really the worrying thing, that old media, which is on the ropes in terms of its market share, if they can drag their guy across the finish line, and it took them some effort in the primary season, if they can drag their guy across the finish line, I think you’re going to see a lot of attempts by the Pelosi-Obama left-wing government to regulate the internet and talk radio and all kinds of other things. I think this is in a sense a defensive play by the mainstream media.

HH: Oh, wow. That’s interesting. The good news is we have a conservative 1st Amendment majority on the Supreme Court. Mark Steyn, Columnist To the World,, thank you.

End of interview.


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