when I look around the globe for episodes of successful spending restraint I see Canada, Finland, Sweden, and now possibly (probably) Ireland, which is in the midst of fiscal restructuring. I see change coming from elites and I see relatively left-wing governments (Ireland, admittedly, is harder to classify) which are trusted by their citizens.
I see smaller countries (Canada's population is slightly less than that of California) with less social distance between elites and mass. Just as the ratio of top income to median income is spectacularly high in the United States, the ratio of power at the top to the power of the median individual is spectacularly high here.
I think that Tyler might agree with me that the ruling class in the United States is not addressing the fiscal problems of the country. However, he might think that our best hope is to restore trust in the ruling class and hope that they turn around.
One can argue that the Tea Party movement is not going to help, in spite of its generic concerns with government spending. The movement lacks a specific program. Its anti-insider character also means that it likely will lack the know-how to translate whatever electoral success it achieves into concrete action in Washington.
The ruling class is confident that when it comes to specific spending programs, the coalition in support of continued spending will always be there. As elitists like to point out, polls show that the only spending that a majority of people want to cut is foreign aid.
I share some of these doubts about whether the Tea Party movement will make a constructive difference on fiscal policy. However, I do not think that the ruling class is going to come around on its own. I think we are going through one of those periods in which the ruling class is fundamentally messed up. The Wall Street-Washington axis fundamentally messed up housing finance, and they have not really learned anything in that area--the consensus solution is to rebuild the securitization machine, with more regulation. The ruling class thinks that we need more central planning of the economy. They are saying, "Markets fail. That's why we need government," rather than "Markets fail. That's why we need markets."
Many libertarian intellectuals deeply resent the populists, perhaps because the populists are not offering much in the way of deference to the intellectuals. What I am seeing is libertarian intellectuals showing their group-solidarity with the ruling class by throwing around accusations of racism, sexism, and homophobia. Nothing makes the ruling class feel better than the sense of moral righteousness that comes from believing in the moral backwardness of those who would challenge it.
Tyler is making a more subtle argument. Perhaps the only thing worse than trusting the ruling class is not trusting them. But I cannot get past my hostility toward the arrogance and foolishness emanating from their quarters.