One of my favorite quotes is from the French economist Frederic Bastiat. In his essay “Ce qu’on voit et ce qu’on ne voit pas” (“What is Seen and What is Unseen”), he explains, “There is only one difference between a bad economist and a good one: The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”
Much of our political discourse is conducted by bad economists. It focuses on “what is seen” — generally whatever immediate benefit government can deliver. In attacking Mitt Romney’s career in private equity, for example, President Obama is a wildly bad economist.
Turning around a failing business can be a painful process and may not always succeed. It may involve misery that is seen. But, if no one were willing to inject the money and make the tough decisions that might rescue a doomed venture, we could foresee even more misery.
In his recent book, Never Enough, William Voegeli writes that modern American liberalism suffers from philosophical incoherence. Its view on the role of government has no limiting principle. The state may — and should — do whatever can garner political support. The Democratic mainstream, he says, is committed to an exercise in what he calls “adhocracy.”
One could defend this as a commitment to find what works and to discard what does not. But given the prevalence of bad economists, this is not what happens. Here’s why.
The benefits of social spending are concentrated and easy to see. The costs are diffuse and not always obvious. A political movement without any firm notion of what the state ought to do — and hence no capacity to resist the political benefits of government largesse — will devolve into the party of government — perhaps not quite government “for its own sake” but uncomfortably close.
One of the most remarkable things about the reaction to Gov. Scott Walker’s reforms was how angry it was. To be sure, the governor’s proposal entailed a pay cut for a sizeable group of people, and no one likes that. But the chanting and occupation — the blue fists and vuvuzelas — cannot simply be dismissed as the anger of disgruntled employees. Nor can the Walker reforms be readily seen as an attack on middle-class families.
The governor’s collective bargaining reforms affected a group — state and local employees — who earn considerably more than the average worker. Given that taxes in Wisconsin aren’t particularly progressive, one might have seen Walker’s reforms as striking a blow for working families.
But recall that a party that believes that the government can do anything will tend to believe that it should do everything. The adhocracy of the left is a conversation about how quickly the state should expand. For a Democratic Party that has come to rest on a coalition of beneficiaries, Walker’s departure from business as usual was existential.
We’ve all seen the yard signs and bumper stickers displayed by recall opponents urging us to “recall Santa” because “I didn’t get what I wanted.” As a criticism of the recall, this message may have been more insightful than humorous. Walker’s message, at least in part, has been that there is no Santa.
There is a fundamental contradiction in being the party of promises. The lack of a limiting principle results in a state with no boundaries other that what is politically possible today. Because the Democratic coalition is based on assembling a majority of voters who see themselves as net takers of tax dollars, and because it is the reach of that coalition that will determine whether Democrats get elected, the modern American liberal has no language to persuade the recipients of government largesse to pay for it.
Thus, President Obama defends every last entitlement and proposes significant expansion in the role of government while promising not to raise taxes on 98 percent of the population. Wisconsin liberals did not want to give things up, but, significantly, were unwilling to explain how they proposed to pay for keeping them.
Tom Barrett refused to explain how he would have addressed the $3.6 billion deficit that led to the Walker reforms. Indeed, his Democratic primary opponent, Kathleen Falk, seemed to regard it as ridiculous that anyone would even ask.
Voegeli points out that conservatives have a bind of their own. They do not wish to raise — and may want to cut — taxes. But they are often either unwilling to propose — or unable to obtain — corresponding cuts in government spending. They, too, can be bad economists.
He suggests that they escape this bind by doing what liberals — dependent on a coalition of beneficiaries — won’t. Conservatives ought to insist that those parts of the welfare state that cannot be ended be made to work — and at the lowest possible cost.
As I have written in these pages, that is precisely what Walker tried to do. The morning after the election, I appeared on a national radio show. A caller from Massachusetts asked why Walker had to limit collective bargaining. He could have just laid off teachers.
The question contained its own answer.
Richard Esenberg is president of the Wisconsin Institute for Law & Liberty and an adjunct professor of law at Marquette University. He blogs at Shark and Shepherd.