Government as Faith

Ensconced at Brookings and Georgetown, opining twice weekly at the Washington Post, and a frequent PBS/NPR voice, E.J. Dionne is your quintessential inside-the-beltway liberal. His column this morning, “Government is the solution,” doesn’t disappoint. Democrats should “just say it,” he argues. If they really believe in government, then stop beating around the bush, apologizing, qualifying. Look at Gov. Scott Walker’s win last week in Wisconsin, “helped by the continuing power of the conservative anti-government idea in our discourse. An energetic argument on one side will be defeated only by an energetic argument on the other,” he counsels.

Trouble is, it’s not just the energy, or the clarity: It’s the argument. As we say in horse racing, no matter how good the jockey, he can’t carry the horse across the finish line. And the government horse has a pretty bad track record.

You’d never know it, however, from the rest of Dionne’s exhortation. Going back to the nation’s beginnings he invokes Hamilton’s and Clay’s road and canal building projects – they who “read the Constitution’s commerce clause as Franklin Roosevelt and progressives who followed him did, as permitting the federal government to serve the common good.” Alas, Dionne’s constitutional history is amiss. In his 1791 “Report on Manufactures,” which Congress rejected, Hamilton invoked not the Commerce but the General Welfare Clause. And the canal projects, like the railroad projects 20 years later, involved improvident donations of government land, under Article IV’s Lands Clause, resulting in the panics of 1837 and 1857, respectively, all of which is nicely documented in Harvard Law Prof. Charles Warren’s wonderful little volume, aptly entitled Congress as Santa Claus, published in 1932, on the eve of the New Deal.

But it doesn’t get any better when Dionne turns from law to economics. Here his main point is to urge Democrats to say that “government creates jobs.” Thus, he writes that it was “salutary that Douglas Elmendorf, the widely respected director of the Congressional Budget Office, told a congressional hearing last week that 80 percent of economic experts surveyed by the University of Chicago’s Booth School of Business agreed that the stimulus got the unemployment rate lower at the end of 2010 than it would have been otherwise.” Who could argue with that? Indeed, more stimulus spending would have lowered the rate even further: there was no unemployment in the Soviet Union, if you want serious stimulus spending.

The point is that government spending is not cost-free. The money comes from the private sector now, where it might otherwise be employed creating private-sector jobs, or is borrowed from the future. And it’s no answer to contend, as Dionne does, that we need government “investments” in such things as transportation and clean energy (high speed rail? “green fuel” requirements for the Defense Department?) because “the private sector is no longer investing” and hence no longer creating jobs – not if you ignore the massive regulatory uncertainty that is impeding private-sector investing. But what’s any of that to someone who believes that “government is the solution.”