The New Deal Was a Success — at Creating Dependency

Drawing from Amity Shlaes’ excellent new book The Forgotten Man, George Will notes that FDR’s policies were an economic failure but a political success.

It is particularly galling that Roosevelt’s statist policies were so harmful (as Chris Edwards has succinctly explained), yet he is portrayed as the man who saved the nation from unbridled capitalism:

Franklin Roosevelt’s success was in altering the practice of American politics. This transformation was actually assisted by the misguided policies — including government-created uncertainties that paralyzed investors — that prolonged the Depression. This seemed to validate the notion that the crisis was permanent, so government must be forever hyperactive.

…Roosevelt, however, made interest-group politics systematic and routine. New Deal policies were calculated to create many constituencies — labor, retirees, farmers, union members — to be dependent on government.

…Roosevelt implemented the theory that (in [Shlaes’] words) “spending promoted growth, if government was big enough to spend enough.” In only 12 months, just one Roosevelt improvisation, the National Recovery Administration, “generated more paper than the entire legislative output of the federal government since 1789.” Before Roosevelt, the federal government was unimpressive relative to the private sector. Under Calvin Coolidge, the last pre-Depression president, its revenue averaged 4 percent of gross domestic product, compared with 18.6 percent today. …In 1936, for the first time in peacetime history, federal spending exceeded that of the states and localities combined.

…[A]s Roosevelt demonstrated and Shlaes reminds us, compassion, understood as making the “insecure” securely dependent, also makes the state flourish.

Seeking a Political Savior

Conservative evangelical Christians are having trouble finding an appealing presidential candidate this year. Among the major Republican candidates, they note that Giuliani is pro-choice, Romney is Mormon, and McCain in 2000 called religious right leaders “agents of intolerance.”

I’d like to see a pollster ask conservative Christians two questions:

1. Would you support a presidential candidate who is divorced, has estranged relations with his children, never sees his grandchildren, rarely attends church, strongly opposes a law to ban gays from teaching school, and as governor signed the nation’s most liberal abortion law?

2. Would you support him if you knew his name was Ronald Reagan?

A First Amendment for Broadcasting

Bill Monroe, who was moderator for NBC’s Meet the Press for about 10 years, is a longtime advocate of extending the First Amendment to broadcasting. Actually, I’m sure he thought that the First Amendment did cover all forms of the news media — but he knew that Congress and the courts didn’t see it that way, so he wanted an explicit amendment to make that clear.

Because his articles on this topic were published in the pre-Internet Dark Ages (yes, children, there are great ideas not online), I can’t link to any of them. But he briefly reprised the argument in the letters column of the Washington Post today, concluding:

Broadcasters are also open to government pressure through the Federal Communications Commission, whose members are appointed by the president. Newspapers are specifically protected against government interference by the granite wall known as the First Amendment.

When the present form of broadcast regulation was set up early in the previous century, nobody understood what powerful instruments of news and information would evolve from the primitive radio stations of that day. Now that we do understand it, we can repair that historic mistake. We can extend the clear, stirring language of the First Amendment to equal protection for freedom of the electronic media. The problem of allocating broadcast licenses does not have to cost the American people the benefit of free broadcasting.

The Anti-Universal Coverage Club Manifesto

The Anti-Universal Coverage Club is a list of scholars and citizens who reject the idea that government should ensure that all individuals have health insurance. It exists to challenge the idea that “universal coverage” is the best way to protect and promote health.

The following principles explain the club’s opposition to “universal coverage”:

  1. Health policy should focus on making health care of ever-increasing quality available to an ever-increasing number of people.
  2. “Universal coverage” could be achieved only by forcing everyone to buy health insurance or by having government provide health insurance to all, neither of which is desirable.
  3. In a free society, people should have the right to refuse health insurance.
  4. If governments must subsidize those who cannot afford medical care, they should be free to experiment with different types of subsidies (cash, vouchers, insurance, public clinics & hospitals, uncompensated care payments, etc.) and tax exemptions, rather than be forced by a policy of “universal coverage” to subsidize people via “insurance.”

To join, post something to your blog or email me mcannon [at] cato [dot] org (here).  If you blog about the club, pro or con, please send the link to that address as well.

Michael Gerson and the Fantasy-Based Community

In today’s Washington Post, former Bush speechwriter and policy adviser Michael Gerson sees the online role-playing game Second Life as a “large-scale experiment in libertarianism.” And since the world of Second Life apparently features its share of weirdness — violent, sexual, and otherwise — Gerson concludes that the libertarian concept of spontaneous order is a fantasy. Because of what he saw in a fantasy game. 

I know, I can’t follow the logic either, but remember that Gerson runs with a crowd that thinks “We’re an empire now, and when we act, we create our own reality,” so he may not be all that clear on the distinction between what’s real and what’s make-believe.  

I don’t know much about Second Life, and what I hear about it makes me feel crotchety and unhip beyond my years. But however bizarre the game is, it seems that nobody actually gets hurt. In that respect at least, it’s superior to the large-scale experiment in “compassionate conservatism” that Gerson helped conduct for the last several years. That experiment has left us with an exploding federal budget, a metastasizing welfare state, and a vast humanitarian disaster in Iraq. It’s little wonder some people prefer virtual reality to the real thing.     

Full-Spectrum Lindsey

Cato vice president for research Brink Lindsey tries to be a uniter, not a divider. In his much-discussed “Liberaltarians” article for the New Republic, Brink held out an olive branch to liberals. TNR’s Jonathan Chait was, well, less than enthusiastic.

In his “A Farewell to the Culture Wars,” recently published in National Review, Brink does much the same for conservatives, advising them to seek to conserve the “great American heritage of limited government, individual liberty, and free markets,” instead of, say, exclusively heterosexual marriage and a not-so-Mexican America. Perhaps unsurprisingly, NR’s Ramesh Ponnuru has declined the advice. Brink’s rejoinder, published online this Tuesday, is smart and effective:

Ramesh Ponnuru concedes the main point I was trying to make. Specifically, he admits that “[i]t really is pointless to pine for the social order that existed prior to the late 1960s,” and that “most conservatives would not want to go back if they could.”
 
Ramesh makes this concession almost casually, as if it were no big deal. But I’m sorry, it’s a very big deal indeed. After all, a great deal of intellectual and emotional energy on the right has been expended over the years in precisely the kind of pining Ramesh now regards as pointless. Conservatives have defended, with great conviction and moral passion, positions on race relations, the role of women in society, and sexual morality that most conservatives today would disown as ludicrous or offensive. I don’t think it suffices to dismiss these glaring errors of judgment with an Emily Litella-like “Never mind.”

While commentators left and right may be hesitant to pick up what Lindsey’s laying down, that doesn’t mean he’s about to stop trying to transcend the stale terms of yesterday’s political dialectic.

Tune into Cato Unbound on Monday, where Brink will kick off a fresh round of discussion on “The Politics of Abundance” with a panel of blogosphere luminaries. On the left, we’ll have The Atlantic’s Matthew Yglesias. On the right, National Review’s Jonah Goldberg. And in the … middle? … Reason contributing editor Julian Sanchez.  

Mr. Frank Gets Mixed Up

In an article today in the Boston Globe, Rep. Barney Frank (D, MA) commented on the closure of a fabric maker located in or near (the article is unclear) his district:

These working-class people are bearing the brunt of a policy of globalization that benefits the few and damages the many,” Frank said. (my emphasis)

Mr. Frank has the problem precisely backwards. Open trade benefits the many — through more competition and lower prices — even though it takes away the protection of a chosen few. It is tariffs that impose (relatively small) costs on many dispersed consumers, but benefits concentrated interests (and harms the economy overall). In this case, the closure of a 900-employee textile plant is a highly visible manifestation of a phenomenon that has been largely postive on net. It is sad for those losing their jobs, to be sure, but millions of American consumers benefit every day from opening the U.S. market to cheaper imports.

As a Wall Street Journal article yesterday pointed out (and my colleague Dan Ikenson blogged about here last week), the power of organized labor in the Democratic Party has probably spoiled any further trade liberalization in the near future, despite the month-old and much-hyped “bipartisan deal” on trade. This backtracking comes after the administration agreed to Democrats’ demands for stronger labor and environmental provisions in trade agreements.

The recently-inked deal with Korea — the biggest trade deal for the United States since NAFTA, and one that promises large market opportunities for American farmers and service providers, not to mention deals for U.S. consumers — is probably off, all because of American automobile makers who fear competition from Korean imports and assert that the Korean market was not going to open enough for their liking. (Of course, if the deal fails, then the market probably won’t open further at all, but that logic is apparently unconvincing.) Talk about benefiting the few and damaging the many.