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The first president and the origins of American corporate welfare


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Kevin D. Williamson

Precisely the same argument would be made a short time later when the Germans and the French began to have some success with experimental aircraft. Again, it was a question of national security: If the Germans had aircraft and we did not, then we would be at their mercy. Panels of experts were consulted, and those experts did what experts do, which is to recommend the shunting of vast streams of money to experts who reminded them of themselves and who shared their financial interests. And ask yourself — if you were in charge of picking the man to head up the all-important national airplane project, whom would you pick? On the one hand, there was the acknowledged aeronautical expert Samuel Pierpont Langley, whose résumé was close to perfect: Boston Latin, Harvard Observatory, Naval Academy, head of the Smithsonian Institution. If it’s him or a couple of nobody autodidacts from Ohio, the choice is obvious. Mr. Langley’s experimental aircraft, which were launched via catapult, careered into the Potomac, and there is now a town in Virginia that bears his name and remains to this day associated with lavishly financed government boondoggles catapulted into the wide blue yonder in the name of national security. The other guys, Orville and Wilbur Wright, invented the airplane.

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As Robert Higgs argues in Crisis and Leviathan, there’s always an emergency to be found if you look hard enough for it. And we’ve had some real emergencies: The “war socialism” of the Wilson years was a reaction to the genuine emergency of the Great War, and it is to the credit of subsequent administrations and Congress that they rejected calls to make that “war socialism” an enduring national policy after the Hun was licked. But the allure of central planning is eternal, and, soon enough, the Great Depression and World War II gave the national college of experts an excuse to attempt once again to put the economy under political discipline. Those attempts were, unhappily, longer lived. As the Folsoms chronicle, Herbert Hoover argued that his Reconstruction Finance Corporation would need to operate only sporadically and could probably be retired after a few years. Soon enough, Franklin Roosevelt was using it to try to buy off newspaper columnists, Harry S. Truman’s cronies were treating it as a personal slush fund, and Dwight D. Eisenhower was discovering how to turn it into a Republican-friendly political piggy-bank.

There was an important difference in the postwar years, however. Wrong as Wilson, Hoover, and Roosevelt were about the efficacy of national economic management, their programs were enacted in response to genuine emergencies, and their ideas, though defective, had not yet been discredited by historical experience and the economic analysis of Ludwig von Mises and others, who identified the insurmountable problem of knowledge as the limiting factor on central planning. Later in the 20th and 21st centuries, advances in the mathematical study of complex systems would very strongly suggest that such planning projects were not feasible even in principle.

Wilson and Roosevelt can be forgiven their ignorance. But we know better now.

Not that you’d know it from President Obama’s energy policy, so-called conservatives’ agriculture policies, the immortality of the Small Business Administration, the persistence of the Export-Import Bank, the continuing outsized role of Fannie Mae, bailouts, windmill subsidies, corn-juice mandates . . . 

— Kevin D. Williamson is roving correspondent for National Review.



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