I recently had a conversation with an intensely conservative businessman whose first foray into politics was fighting for a tax hike on his business and others like it. The little town where he lived as a young man had no paved roads, waterworks, or sewage facilities, and the men who had the most invested in the town knew that it needed these to grow, which of course it did. That’s part of what Barack Obama and Elizabeth Warren are referring to with their “you didn’t build that” rhetoric, though they draw the wrong conclusions. They are also sometimes wrong in the specifics, too: The gentleman I was speaking with organized a few other businessmen to install streetlights at their own expense, with the understanding that the town fathers would pay them back when they could afford it. If you’re looking for an example of how small government is good government, a handshake deal to put in streetlights is a pretty good one. That is government at a scale that people can control, manage — and keep an eye on.
It is important to keep government small, but scale is not the only concern: Even the pettiest bureaucracy can descend into indolence and corruption. We talk a great deal about the level of government spending, but pay relatively little attention to a much more basic concern: It matters — a great deal — what government spends that money on. Even the wooliest anarcho-capitalist must look with some sympathy and admiration upon the small-scale model of township government that once characterized New England and the West. “But who will pave the roads?” is a standing libertarian punchline (“The federal government spends enormous sums of money getting monkeys addicted to cocaine, the police have murdered your puppies — But who will pave the roads?”) and, as noted in a certain volume of political speculation, the first paved intercity road in these United States was in fact privately built, suggesting that private enterprise is more than capable of road-making. But it was as a matter of history largely governments that paved the roads, built the sewage systems, drained the swamps, etc. And there was a time when governments, particularly at the local level, did a pretty good job of it.
There was more room for them to experiment in an era in which the federal government did relatively little. At the end of the 19th century, the largest single federal expense was veterans’ pensions, which accounted for nearly half of federal spending
. As James Carafano notes
, that pension system was a swamp of Republican graft, the original dependency agenda
; but in real terms, the money lost to graft today in programs such as Medicare and Medicaid probably would have paid for all
of the operations of the federal government in the late 19th century, with a surplus. So easy and profitable is Medicare fraud that New York’s Bonanno mafia clan set up a Florida operation specifically for that purpose
. (Florida is the Augean stables of Medicare fraud.) Some of the graft is explicitly criminal, but much of it is perfectly legal: subsidies for cronies, sweetheart loans and generous tax treatment for politically connected businesses, etc. The Solyndra debacle may not have been a crime, but it was criminal.
Big government, big expenses, big corruption — big problem.
On the one hand, we have the small-town entrepreneur yearning for sidewalks and streetlights; on the other, we have dodgy “Five Aces” federal contracts and Al Gore’s federally enabled greenmongering. Between those two points there exists a spectrum of possible configurations of government, and the fundamental political debate of our time is whether we’re on the right side of that spectrum or the wrong side. Conservatives want to prune back the vines, and progressives want them to grow thicker.
How’s that working out in the laboratories of the Left?
Progressives argue that we need deeper government involvement in the economy in order to assuage the ill effects of economic inequality. But, as Joel Kotkin points out, inequality is the most pronounced in places where progressives dominate: New York City, San Francisco, Los Angeles, Chicago. The more egalitarian cities are embedded in considerably more conservative metropolitan areas in conservative states. “Part of the difference,” Mr. Kotkin writes, “is the strong growth of higher-paid, blue-collar jobs in places like Houston, Oklahoma City, Salt Lake, and Dallas compared to rapidly de-industrializing locales such as New York, San Francisco, Chicago, and Los Angeles. Even Richard Florida, the guru of the ‘creative class,’ has admitted that the strongest growth in mid-income jobs has been concentrated in red-state metros such as Salt Lake City, Houston, Dallas, Austin, and Nashville. Some of this reflects a history of later industrialization but other policies — often mandated by the state — encourage mid-income growth, for example, by not imposing high energy prices with subsidies for renewables, or restricting housing growth in the periphery. Cities like Houston may seem blue in many ways but follow local policies largely indistinguishable from mainstream Republicans elsewhere.” In Detroit, Chicago, and Philadelphia, African Americans earn barely half of what whites earn — and in San Francisco, African Americans earn less than half of what whites earn. Hispanics in Boston earn 50 percent of what whites make; but it is 84 percent in Riverside County, Calif., a traditional Republican stronghold (it holds the distinction of being one of only two West Coast counties to have gone for Hoover over FDR and is Duncan Hunter’s turf), and the figures are comparable in places such as Phoenix and Miami.