July 3, 2010
Repeal the 20th Century?By J. Robert Smith
Repeal the 20th Century? Or at least repeal the welfare state?
In a long exposition on the direction of the tea parties, Weekly Standard contributor Matthew Continetti writes that more than a few tea partiers want to do something most Americans oppose: namely, repeal the 20th century -- or repeal the massive welfare state that grew up in it.
Continetti's take on Americans' sentiments may be right, but he misses an overriding critical point. Events may prove to be larger than any sentiments or attachments. What Americans want and what they get in the next years could well stand in stark opposition. Why? Because that clunky, early-industrial-model welfare state that Americans don't want repealed may fail right before their eyes. In fact, big government-liberalism -- that peculiarly 20th-century invention -- may finally be playing itself out.
Where is it etched in stone that big government has been granted a license in perpetuity? Or, for that matter, that the ideology and political movement that created and fostered big government has a claim on forever?
The election of Barack Obama and Democratic Congresses over the last four years was supposed to herald a renewal of the liberal era. All that good big government tamped down by Ronald Reagan and the Gingrich Republicans was to be freed. Government would again assertively captain the economy and extend the welfare state's reach. Yet Mr. Obama's renewed liberalism would represent a striking departure from the older brand: It would aspire to more closely approximate European welfare-statism, meaning it would be far more pervasive and redistributionist than earlier liberals dared to or could go.
It is instructive, and a tad curious, that American liberals have always looked to Europe for ideas and leadership. It is still more curious that liberalism's rise and Europe's decline have largely tracked one another over the last century. Europe's trend line since World War I has been down, with a few exceptions. Twentieth-century Europe was convulsed by great wars and ravaged by the "isms," fascism and communism. Post-World War II Western Europe's answer to deadly tumult and killer ideologies was social democracy, or bureaucracy-dominated welfare-statism.
But as all are witnessing, Europeans may have been as unlucky in their choice of social democracy as they were in their earlier choices. The top-down, government-heavy nations of Western Europe are now under enormous stress. The recession that began galloping across the globe in late 2007 is proving to be a tipping point for Europe's social democracies. So long as Europe's dwindling producers could produce, Europe's welfare states had the ability to sustain themselves, albeit with no eye to the future, given Europe's dramatic birth dearth.
What Europe is demonstrating now in light of a substantial economic downturn is the unsustainability of leviathan government. The old cradle-to-grave-government belief may still have appeal, but it's proving to have no legs. Europe is in the early days of prolonged crisis. Hard, fundamental decisions will need to be made about its welfare states -- decisions well beyond temporary austerity measures. If Greece is any indication, early-21st-century Europe is poised to be roiled again. What's unfolding in Europe is indeed a harbinger for what will soon occur in the United States.
Many Americans may hanker to dial back history -- let's say, prior to December 2007, when the recession is reported to have begun. A few short years ago, with a strong economy, Americans could have their welfare state cake and eat it, too. But even then, sanguine, if not naïve, Americans failed to appreciate the ticking time bomb the nation was perched on. Expansion of the welfare state -- government growth, generally -- had been ongoing for decades. There may have been times when government grew more slowly, but grow it did. Entitlements were expanded or added under both Democrats and Republicans. Government spending and borrowing climbed ever higher. Debts and deficits may have been reined in every blue moon, but not as a rule.
Then came Obama. The left-wing, ideologically chained Mr. Obama and his congressional Democratic helpmates chose to unfetter government in response to the recession. Well, they would have unfettered government anyway, but the recession was convenient. So according to the liberal playbook, torrents of spending and borrowing have been unleashed. New government is being spawned. Government-run health care legislation squeaked through Congress.
Taxes are going up in January 2011 to generate more revenue to help meet the fevered spending -- or partly so under that pretense, since wealth redistribution dovetails nicely with the first aim. Given spending, debt, and deficit levels -- given all those gargantuan unfunded liabilities, like Social Security and Medicare -- Democrats can't raise taxes high enough or fast enough to ever keep pace with the outpour of dollars. And never mind that the esteemed Arthur Laffer long ago showed the critical link among tax rates, incentives to produce, and tax revenues. Higher tax rates, especially during a recession or an anemic recovery, are a surefire bet to further depress tax revenues.
Liberalism is no friend of economic growth, since it seeks to centralize and direct the economy, and it's no friend to producers, as it tends to penalize them. The policies and remedies that Mr. Obama and congressional Democrats have and are pursuing are poison pills to the nation's free economy. With the conventional wisdom crowd suggesting that the "new normal" is the sluggish growth and higher unemployment rates the nation is now experiencing, and which has been chronic in Europe for years, how will businesses large and small generate the profits that fuel the tax revenues needed to keep big and bigger government afloat?
As Americans are learning, and as they will learn more abundantly in 2011, liberalism is no cure for what ails the nation's economy. Liberalism is, in fact, like a cancer consuming the economy. The welfare state was sustained previously 1) because of the robust performances of the private sector and 2) because accretions in government spending, borrowing, and regulation had yet to reach the giant proportions they have finally attained. In the near term -- during this decade -- big-government welfare-statism has reached a critical mass ripe for failure.
The nation's current economic woes have simply advanced a day of reckoning. The recession has revealed the underlying fundamental structural problems that government is facing due largely to the welfare state. There will be no turning the clock back. The second decade of the 21st century is likely to be momentous, as the nation grapples with what sort of government replaces the outdated model created in the early 20th century. More to the point, the nation can expect a major dustup between contending forces -- between statists and friends of liberty, broadly speaking -- about the nation's future. By decade's end, the nation that emerges from this struggle may well be less free or freer.
Human nature tends to the known and conservation, even when the known is far less than ideal and not really worthy of conservation. The founders understood human nature keenly. As was written in the Declaration of Independence:
So Continetti's estimation about Americans being disposed to retain the welfare state may hit the mark. But there are massive forces now at work in the country, economic, societal, and governmental in nature. These great tectonic plates -- the grind and shift of these plates -- are becoming evident with each passing day. Throughout history, change has come, and changes will come, regardless any of our attachments or predilections. Will America's behemoth welfare state survive the decade? Stay tuned.