Sometimes, looking at the political discourse in this country, I wonder if we really understand the ratchet effect of increasing government programs and power over time: unlike in business, unlike in nature, unlike in, well, real life -- failure is not punished, but at best ignored, at worst rewarded. Once a program is in place, it is almost impossible to repeal, even when Republicans obtain political power because voters become dependent on it.
Progressives have known this for as long as they have been blowing up the bureaucracy. Congressman Henry Waxman famously said that, if it took losing a few members of Congress in the next election to get Obamacare passed, it would be worth it. And this was no partisan bias: Senate Republican leader Mitch McConnell agreed, warning his troops that once an entitlement is given, it is nearly impossible to get it back.
Franklin Delano Roosevelt also understood this. He proudly said, in introducing Social Security, that since all paid taxes for it, all had skin in the game. That’s how Ponzi schemes work: eventually someone gets left with the bill, so everyone tries to keep it going as long as possible. It’s like musical chairs: eventually the music will stop, and someone will lose. The game is all about avoiding being that person.
In nature, when a gazelle is weak, he is eaten by a lion, taken from the pack. When a branch of a tree is weak, it breaks and other, stronger limbs remain. When a business fails to make resources more valuable, it goes bankrupt and is, effectively, killed off. This is how the free market works; this is how real life works.
It’s interesting, then, that a November 2011 Wall Street Journal poll indicates that 60% of Americans believe that the current structure of the economy favors a small portion of the rich over the rest of us. And surely they are right: the government is radically warping the market. There is no free market, at least not anymore.
Why do we ignore the tone of Obama’s class warfare (taxes on only the top 2%) and anti-free market (“you didn’t build that”) rhetoric? He is making mainstream what has never been so in America. Obama clearly has a commitment to state controlled communalism as opposed to mere protection of individual rights and freedom. He believes that the state should control individuals in society rather than individuals in society controlling the state. I’m not picking on the president: he got elected by tens of millions of Americans! What I’m concerned about is that lots of people agree with him!
The President is not a socialist. He is, however, a statist. The current term for this is crony capitalism. He does not want the state to own the means of production and the assets in economy, but he wants the state to control the economy indirectly, through regulation for the benefit of the “friends” of the state: the private sector still owns businesses and assumes business risks, but the government tells individuals and businesses who to hire, what to pay, what to make, how to invest, and how much to pay the government in tribute for its “protection.” Much like in a casino, the house always wins. The government plays with house money, and there’s just no competing with that. This, in turn, has an unsubtle impact on the way the government is run and the policies that are implemented, as the cronies’ special treatment is reinforced with their success.
What do progressives do when a government program fails? Add on another program. Modify the program. Expand it. No one punishes a government program with spending cuts. Bad programs get more money, so each program is incentivized to fail, much as welfare recipients are paid to fail. If they succeed, the money is cut off.
How much further can we ratchet up the spending in this country? We have an enormous bureaucracy, but the problem is so much worse than that; as bad as it is, discretionary spending is a tiny percentage of our budget.
Sadly, the only thing we’re entitled to now is more and more debt.
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