The belief that gains in the markets can improve the overall economy in a post-credit crisis environment is rather naive.

I reject the concept that printing money stimulates anything useful, but I believe that it does transfer wealth from society at large to those who gain transactional income from said money-printing. Thus the financial class writ large has a thrill running up its leg from the immense sea of liquidity provided by the combination of Obama and Fed policies. It’s go-go time again in the markets because of the money that has come into the system the past two years.

When people tell me how mad they are at Wal-Mart for driving the mom-and-pop stores out of business, I ask them how Wal-Mart managed to do that. Did they go around torching their stores in the middle of the night, threatening the moms and the pops with baseball bats if they didn’t close their stores? The consumers drove the mom and pops out of business. The consumers preferred Wal-Mart (and Target and K-Mart) to the mom-and-pops. To the extent Wal-Mart did the driving, it was by offering better products at better prices.

The old elite of the progressive Democratic left can’t lead the people to the promised land – but neither can the angry new right. Yet, as the Titanic sinks beneath them, it’s entirely likely that they’ll spend the next two years refighting health-care reform.

As we await today’s FOMC announcement, let’s hope our leaders in Washington will one day realize this mess needn’t have happened. If Alan Greenspan, Ben Bernanke, and the academics who overpopulate the Fed truly understood that asset bubbles must be prevented, then they wouldn’t feel such an urgency to hose them down with liquidity after they pop. Unfortunately, we’ve now reached the point where desperate men will think that desperate times call for desperate measures.

Once again, voters went to the polls to reject overweening government, responding to waves of rhetoric that decried the government takeover of health care, the bailouts and spending, and the arrogance of power. And again, domestic economic issues dominated. And so the “Obama regime,” as the Republicans have started calling it, got a much-deserved smack on the nose. Strangely, it was a similar set of themes that brought Obama to power: resentment against the outrageous power abuses and wars of the Bush regime, and fear that the Republican Party represented more of the same. Looking back further, it was the same theme that brought Bush to power. He ran with the promise of a more humble foreign policy, while decrying taxes and big government. We could keep going back and back this way, to 1994, 1992, and throughout the eighties, and back through the seventies, and back all the way to 1932 and even to Wilson’s promise to keep us out of World War I. Voters keep pulling the lever against the state and yet the state marches ever onward, growing bigger and more abusive all the time. How can we account for this?

While I think we have a duty to believe what is true, it’s possible for widespread errors to have good consequences. Attempting to murder someone doesn’t cause your head to explode. But the world would be a better place if everyone falsely believed that it did.

The wealth, freedom, and diverse experiences of a commercial culture liberate artists and educators both to be more creative and to cater to the demands of the general population. In a poor society in which only a small elite has wealth and leisure, artists and educators cater only to the elite’s desires. Art forms disliked by elites, as well as knowledge not useful to them, do not thrive. But as trade creates greater and more-widespread wealth, the range of tastes and opportunities that are available to support and influence art and education grows. With the elites no longer being the exclusive supporters of art, the artist who previously found no support for his musical compositions or his poetry might now find sufficient support from the middle classes. Likewise for the teacher who, earlier, found no market for his knowledge.