January 22, 2004

Defanging the Welfare State

I've written before that I think Bush a transitionary figure to a government based on effective types of spending only on legitimate government aims. The liberal welfare state has always rested on two main pillars:

1. The beneficiaries were potent vote getters and highly visible while the expenses were spread around and hidden as much as possible
2. Nobody ever really measured effectiveness and insisted on systemic accountability. By the time one program was painstakingly demonstrated to be a bad idea and shut down more than one program had been created to supplement and replace it.

With both of these pillars strong, government growth became a one way ratchet up. Holding the line on spending created a network of highly offended people that could be stitched together for a durable electoral majority while disgust at government inefficiency, waste, and counterproductive spending was never able to coalesce into a durable counter-majority. Instead it was spasmodic and faded over time.

George Bush's domestic agenda is to dismantle pillar number two. Most probably he calculates that if he can do that, the american people, in combination with his successor, can demolish pillar number one without him.

All of the initiatives that he is pushing have been dollar cost indifferent but insistent on choice and accountability by measuring results. For these purposes, choice and measuring results are the same. You can't have meaningful choice if you can't figure out which choice is better. And what's the point of measuring results if you can't choose to change things. The goal of all this is not to cut spending (as a look at his fiscal record makes obvious). The goal is to reverse the direction of the national policy one way ratchet.

Even with razor thin legislative majorities, he's been able to push through a great deal of this sort of reform. The problem is that the thinness of these majorities means that any individual senator or representative has an enhanced bargaining position to extract a bit of money for his constituency. In effect, President Bush has to rent his majority. Any fool in america knows, it's generally more expensive to rent than to own.

Earmarked funding expenditures have exploded. Deficits are ballooning. All the fiscal conservative instincts of the country are screaming in agony. But if the ratchet is reversed, it'll all be worth it, just as Reagan's deficits were a worthwhile price for breaking the back of stagflation and the death of the soviet bloc. All these three provide multi-decade dividends to the United States.

So what's a fiscal conservative to do besides grin and bear it? The only variable that is in play is the thinness of Republican majorities and the bipartisan minority of fiscal conservatives. The President is getting his agenda passed, as all presidents do, on a twin pillar structure of ideological compatibility and party loyalty.

If there were more representatives and senators who were ideologically fiscally conservative, Republicans, or both, the President's position at the bargaining table would be improved. He would be able to hold a dutch auction to lower the price for getting a majority for the major reforms that still need to be passed. In the best case, he wouldn't have to rent anybody at all, being able to pass accountability/choice legislation on the strength of ideologically fiscal conservative Republicans alone. That, unfortunately, is an unlikely pipe dream in this decade. The stars are unlikely to align so well in the conservative's favor anytime soon.

Posted by TMLutas at January 22, 2004 11:08 AM