Small-Government Egalitarianism:

Harvard economist Edward Glaeser has a nice piece on what he calls "small-government egalitarianism." I don't agree with all of his specific points, but I do agree with the general theme that an underemphasized aspect of the case for limiting government is the tendency of big government to benefit the politically powerful at the expense of the poor and disadvantaged. This issue has been a theme of much of my own work on property rights (e.g. here and here) and political ignorance (e.g. - here). Glaeser's view and mine go against the still-dominant conventional wisdom of the last 75 years, which holds that big government is the best way to promote the interests of the poor. Nonetheless, I think that the poor have a lot more to gain from limiting the power of the state than is often assumed.

FantasiaWHT:
That's interesting since one of the major arguments for increasing the size of government is to (allegedly) redistribute wealth in a more egalitarian manner.
1.27.2009 7:50pm
Thomas_Holsinger:
This is the fundamental dilemma facing the Obama administration. It wants to implement all these wonderful lefty ideas, but that requires going through Congress, and Congress will turn them all into vehicles for transferring wealth and income from the less politically connected to the more politically connected.

As an example, any tax increase on the so-called wealthy will come out of Congress as vehicles to sell tax breaks to the wealthy in exchange for campaign contributions to deserving incumbent Congressmen, so there will not merely be no actual revenue gain for the Treasury for the so-called tax increases, but there will be an actual decrease in normal revenue increases (from future population &productivity increases) due to so much potential productive investment being side-lined into unproductive tax shelters.

While as a conservative I doubt that those wonderful lefty ideas can possibly benefit anyone even when implemented as intended, I can guarantee that they will be absolute disasters as actually implemented by a rapacious, corrupt and shameless Congress with solid Democratic majorities in both houses. IMO the Obama administration would be much better off if the GOP had a majority in one house of Congress.

The latter assumes, however, that the Obama administration is sincere about policy, as opposed to its own power. We'll learn which is the case soon enough.
1.27.2009 7:53pm
Shelby (mail):
the tendency of big government to benefit the politically powerful at the expense of the poor and disadvantaged

I continue to be astonished that anyone competent enough to get a graduate degree could fail to know this.
1.27.2009 8:11pm
FantasiaWHT:
Shelby, I think it's the tendency for the big and powerful to feel "Hey, I'm doing the poor SOME good, so why shouldn't I benefit, too?"

It's like the example of the student who goes door to door raising money for charity and uses some of it to buy themselves some new clothes. They rationalize that without them, the poor wouldn't have gotten any charity, so it's still a net gain for everybody.
1.27.2009 8:23pm
David Welker (www):
Thomas Holsinger,

Your view has very interesting similarities with nihilism.
1.27.2009 8:30pm
Splunge:
Oh, I don't doubt they know it, Shelby. I think you underestimate human cynicism. For many of those elite folks, it does not pay to admit this truth. Indeed, it often pays rather well to pretend that just the opposite is true.

That is to say, the fiction that the king or emperor or President or Son of God is going to superhumanly right all the myriad wrongs committed on the powerless by the powerful is one of the most useful methods by which the powerful maintain their ascendancy. Always has been, always will be.
1.27.2009 8:31pm
Jim Ison (mail):
Comparisons are good. Has anyone an example of small government actually being helpful to the poor? What is a small government, actually? Where? Or, how small can we make the US government and still be who we are at home and globally?
1.27.2009 8:31pm
Cash:
Other than claiming land use regulations hurt the poor by raising their housing costs and arguing that post-Katrina we should have given money directly to New Orleans' poor instead of allowing politically connected contracters to spend, Gleaser doesn't have much evidence.

Why not weigh the purported higher cost of housing versus everything else government does on behalf of the poor?

I'd rather be poor in Sweden or the Netherlands than in some small government paradise like Somalia.
1.27.2009 8:33pm
Jim Ison (mail):
Yes. It's interesting that conservatives rarely mention Sweden when trashing any socialist ideas like medicare or public auto insurance, and so on. Anyway, per capita I assume that Sweden's government is pretty big. Where are the poor doing better than they do here other than in tiny countries, where once again, perhaps per capita government size may be larger than we think...
1.27.2009 8:37pm
Michael Ejercito (mail) (www):


I continue to be astonished that anyone competent enough to get a graduate degree could fail to know this.

To not know this and have a graduate degree requires invincible ignorance.

Over four thousand years of human history has proven that big governments benefit those who are rich and well-connected.
1.27.2009 8:54pm
Michael Ejercito (mail) (www):


I'd rather be poor in Sweden or the Netherlands than in some small government paradise like Somalia.

What makes you think Somalia has a small government?
1.27.2009 8:56pm
JB:

I'd rather be poor in Sweden or the Netherlands than in some small government paradise like Somalia.


Somalia does not have small government. "small" is not a synonym for "ineffective." The Somalian government is composed of people who will shoot you and take your stuff if they want it, offering no recourse. The combination of minimal services and high, arbitrary taxes does not strike me as small government in any sense it is normally used.
1.27.2009 9:02pm
Thomas_Holsinger:
Welker,

Make that Twainism - Congress is the only uniquely American criminal class.

How much, and how often, this is true depends on both the incumbent President and a given Congress. The current Congress has given every indication of being the most corrupt since the Gilded Age, and is being given far more money to throw around.

President Obama is clearly a major political innovator, as his plans for the White House web site and continuation of his camapign organization, as a means of two-way feedback and political influence, show. IMO he is creating the means of appealing to the public, over the heads of Congress, in a way that has not been seen since the Reagan adminstration, and Ronald Reagan was known as the Great Communicator.

But Barack Obama has never in his life shown any political courage. Chutzpah and ambition yes, but not courage.

A President who gets elected without ever showing any political courage does not augur well for his demonstrating it when in office. A comparison is in order here. John Kennedy wrote Profiles in Courage before he was elected President.

I stand by my prior post.
1.27.2009 9:09pm
David Welker (www):
I think that of course we can think of particular government policies that are not helpful to the poor.

But, to go from there to the assertion that this is all about the size of government is quite a stretch. To repeat a theme I made in another post, it is all about the "role" of government (i.e. what government does), not the size. If an economic stimulus bill of $825 billion would be effective -- I personally think that is too small -- but one that was only $200 billion would be ineffective, then it would be the case that smaller government would hurt the poor disproportionately. (Because economic downturns tend to hurt those who are least economically competitive, i.e. the poor, disproportionately.)

The thing is, you cannot just go from critiques of particular government policies that disproportionately harm the poor (i.e. land use regulations that limit the construction of housing or farm subsidies that increase the cost of food that make up a higher percentage of poor people's income) to a big fat generalization about the size of government. That is both unconvincing and intellectually sloppy.

I should note one more thing. It seems to me that underneath this all is a certain deep cynicism about the possibilities of positive action. (What is "public choice theory" really but merely ordinary cynicism dressed up in academic garb? Government will inevitably be "captured" by the powerful -- i.e. regulated industries -- and cannot do anything right.)

But here is the issue. Any political movement that could create small government would also have to overcome those powerful interests. So, if your cynical theory is right, that is no reason to favor small government. Because, it is not as though small government could be achieved with anything other than a powerful political movement that, based on your cynical worldview, would only be truly interested in benefiting itself.

Cynicism, I tend to think, it the refuge of the weak. Perhaps of the scoundrel. But even if we take a cynical worldview to be a correct one, that is not exactly an argument for a small government, because any political movement that could create a small government would also be capable of reforming government.

I think people like Somin would benefit enormously from trying to be just a little more optimistic. But, especially by avoiding generalities. If you want to critique land use regulations and other specific regulations on the ground that they are harmful to the poor, have at it. But throwing out the baby with the bathwater (because you think there is no such thing as clean bath water and thus the baby will always be a dirty little monster) is overkill.

Overall, I think you can contribute more by focusing on specifics (particular laws and regulations that can be improved) rather than generalities (size of government).
1.27.2009 9:13pm
David Welker (www):
Thomas Holsinger,

You can quote Mark Twain all you want. That doesn't change the fact that your views, at least as expressed above, are characterized by a pessimistic cynicism which bares a striking resemblance to nihilism.
1.27.2009 9:25pm
Benjamin Coates (mail):
If we're looking for a positive example of a small-government country, looking at statistics along gives me Taiwan has very low government spending of 11% of GDP, and a GINI (distribution of wealth index) of 33, making it fairly egalitarian, low government spending and otherwise successful.

It should be noted that while Sweeden is one of the highest-spending countries it also consistently scores at or near the top of both personal and business freedom indexes, so perhaps their government is "small" in other ways.
1.27.2009 9:36pm
trad and anon:
But here is the issue. Any political movement that could create small government would also have to overcome those powerful interests. So, if your cynical theory is right, that is no reason to favor small government. Because, it is not as though small government could be achieved with anything other than a powerful political movement that, based on your cynical worldview, would only be truly interested in benefiting itself.
This sounds about right to me. Suppose a small-government movement is politically effective. To be so, it needs the support of the wealthy and powerful, who will seek to capture the movement and use it for their own benefit. We can thus predict that small-government movements will tend to focus on cutting or eliminating government policies that benefit the poor at the expense of the well-off, while preserving, or expanding, government policies that benefit the well-off at the expense of the poor. And in fact this is exactly what happens with real-world small government movements, which tend to focus on parochial concerns of the elite like the estate tax.
1.27.2009 10:07pm
Ilya Somin:
Any political movement that could create small government would also have to overcome those powerful interests. So, if your cynical theory is right, that is no reason to favor small government. Because, it is not as though small government could be achieved with anything other than a powerful political movement that, based on your cynical worldview, would only be truly interested in benefiting itself.


I agree that it would be difficult to set up an effective small-government political movement. But it is easier to establish a one-time movement to set up highly institutionalized constraints on government power (such as constitutional restrictions) than to engage in the ongoing monitoring of government operations that large government requires to make them effective.
1.27.2009 10:25pm
Ilya Somin:
I think people like Somin would benefit enormously from trying to be just a little more optimistic. But, especially by avoiding generalities.

I am optimistic. Just not about government.

As to avoiding generalities, that depends on whether a generality is valid or not. If government (or any institution) has systematic generalizable flaws, then discussion of generalities is essential.
1.27.2009 10:27pm
MarkField (mail):
The actual experience of government in the US doesn't strike me as supporting this theory very well. The worst examples of cronyism in government come at the local level (in fact, that's a primary argument of those who oppose Kelo). Historically, the US government has become MUCH more just and fair as it has grown larger, though of course lots of other factors need to be taken into account there. Still, it's not like this argument works in favor of Glaeser.

Perhaps the problem is that the word "small" is a comparative and not well-defined.
1.27.2009 10:43pm
Floridan:
". . . an underemphasized aspect of the case for limiting government is the tendency of big government to benefit the politically powerful at the expense of the poor and disadvantaged."

Can you give some examples of small governments that do not benefit the politically powerful?

During the first half of the twentieth century, most county governments in the American South were small, even by the standards of the day; one of their primary concerns was low taxes. No one would argue that these governments were not run by the politically and economically powerful for their own benefit.
1.27.2009 10:54pm
Ilya Somin:
During the first half of the twentieth century, most county governments in the American South were small, even by the standards of the day; one of their primary concerns was low taxes. No one would argue that these governments were not run by the politically and economically powerful for their own benefit.

The key question is whether, given the conditions of the time, they would have been better run if they were bigger. Obviously, I highly doubt it. Moreover, given the extensive government apparatus needed to enforce Jim Crow, southern state governments were not in fact small by the standards of the day in the early 20th century.
1.27.2009 11:27pm
Ilya Somin:
Historically, the US government has become MUCH more just and fair as it has grown larger, though of course lots of other factors need to be taken into account there. Still, it's not like this argument works in favor of Glaeser.

A lot depends on what is meant by "just and fair." To my mind, most of the increase in justice and fairness over the last several decades has come from the elimination of government's own previous harmful interventions (especially the elimination of state-imposed Jim Crow segregation).

If you look at the the new government programs created over that time, however, a large proportion of them benefit primarily the middle class and wealthy, often at the expense of the poor.
1.27.2009 11:29pm
Thomas_Holsinger:
Welker, you have a very youthful conception of cynicism and pessimism. Heaven forbid you should encounter the real world.

OTOH, you have not disagreed in the least with my opinion of the current Congress, so perhaps there is some common ground.
1.27.2009 11:39pm
David Welker (www):
Thomas Holsinger,

On what basis do you assert I have not been in contact with the real world?

If it makes you feel any more certain about whether we disagree or not, I do in fact have a positive opinion of the current Congress.

I am sure there is some common ground on some issue or another. But probably not to the extent that you feel very cynical about the possibilities that could arise from good government.
1.28.2009 12:19am
Thomas_Holsinger:
MarkField,

Infinite progression arguments do not work, particularly with regard to administrative law. My administrative law instructor used the Bureau of Indian Affairs as an example of the first federal agency to achieve the bureaucratic nirvana of possession of enough regulations to allow it to justify, or forbid, most any act it was capable of.

I also suggest you specialize in tax law. Consider our newly confirmed Treasury Secretary.
1.28.2009 12:25am
Thomas_Holsinger:
David Welker,

Glad to hear it.
1.28.2009 12:28am
David Warner:
That does it, Somin, you're now officially my favorite Conspirator. The trick is going to be getting the limited government movement back under the Dem label where it started, as the culture has discredited the R's rep along those lines. The R's are the natural Hamiltonian party anyway, so it makes a certain sort of sense.

Maybe we could re-release Liberal Fascism with a better title, like That Brief Seventy-Year Interlude Where Good Liberals Mistakenly Acted Like Republicans or somesuch.
1.28.2009 3:43am
Tom Perkins (mail):

This is the fundamental dilemma facing the Obama administration. It wants to implement all these wonderful lefty ideas, but that requires going through Congress, and Congress will turn them all into vehicles for transferring wealth and income from the less politically connected to the more politically connected.


What makes you think he's facing the dilemma, or even sees it as a bug not a feature?

Yours, TDP, ml, msl, &pfpp
1.28.2009 6:48am
Tom Perkins (mail):

On what basis do you assert I have not been in contact with the real world?


I would assert it on the basis of the fact you are conflating realism in looking at government as being something to do with nihilism. Firstly, your posts show you conflate skepticism with government as skepticism with everything. Nihilism is a very catholic concept.
1.28.2009 6:50am
Floridan:
Ilya Somin: "Moreover, given the extensive government apparatus needed to enforce Jim Crow, southern state governments were not in fact small by the standards of the day in the early 20th century."

In fact they were. The maintenance of Jim Crow laws did not depend primarily on government enforcement, but rather on the economic power of the politically powerful. The role of Southern governments (state and local) in maintaining legal segregation was more often in not doing something, such as providing adequate schools, hospitals and equal access to legal recourse, than it was in actively supervising the intricacies of Jim Crow.
1.28.2009 7:35am
Crispulo Marmolejo (mail):
Interesting text. I completely agree with you
Best
Crispulo
1.28.2009 8:52am
David Warner:
MarkField,

"Perhaps the problem is that the word "small" is a comparative and not well-defined."

I mostly agree, although I'd think we could both concur that the size of, say, the military budget is in no sense small, and that its unsmallness doesn't do much for egalitarianism, especially equality between the generations who benefit from it and the generations that will have to pay for it.

My hope is that renewed limited government progressivism will rally under the banner of No Taxation (of future generations) Without Representation, as the original did.

"Limited" seems more to the point than "small".
1.28.2009 10:45am
MarkField (mail):

Moreover, given the extensive government apparatus needed to enforce Jim Crow, southern state governments were not in fact small by the standards of the day in the early 20th century.


As Floridian correctly points out, this is empirically false. Indeed, Southern local and state governments were much smaller precisely because they had no need to enforce laws against crimes committed by whites against blacks.


I'd think we could both concur that the size of, say, the military budget is in no sense small, and that its unsmallness doesn't do much for egalitarianism, especially equality between the generations who benefit from it and the generations that will have to pay for it.


Agreed.
1.28.2009 10:55am
Arkady:
@Ilya:


But it is easier to establish a one-time movement to set up highly institutionalized constraints on government power (such as constitutional restrictions)


Quis custodiet ipsos custodes? That is, in the present context, who would fashion those "highly institutionalized constraints on government power"? Is there any reason at all to think it would not be the rich and powerful (who would fashion those constraints to safeguard and enhance their wealth and power)? I submit it is counterintuitive to suppose that the powerful would just stand by and allow a constitutional order to be erected that constrained them in their pursuit of even more power and wealth. Your one-time movement would, I fear, result in oligarchy. Not clear to me how that would redound to the benefit of the rest of us.
1.28.2009 11:07am
Thomas_Holsinger:
Floridan,

Actually Southern governments before World War Two were very much tools of the rich to oppress everyone else regardless of color. Jim Crow was useful to distract non-wealthy whites from the fact that the rich were oppressing them too.

Southern governments then were kept small as a means of maximizing the power of the rich to oppress everyone. Larger governments by defnition reduce the relative political power of the rich, by injecting more power into the system overall. It was much easier for the rich to exert their power directly than to have to do so indirectly via larger governments, particularly larger governments which they wouldn't control unless they worked harder at it.
1.28.2009 11:30am
Arkady:


Actually Southern governments before World War Two were very much tools of the rich to oppress everyone else regardless of color. Jim Crow was useful to distract non-wealthy whites from the fact that the rich were oppressing them too.


Yeah. I've often thought that the greatest accomplishment, politically, of the ruling class in the antebellum South was the convincing of poor southern whites that slavery was in their interest.
1.28.2009 11:39am
Clayton E. Cramer (mail) (www):
In the 1920s, there was a large anarchist socialist movement in the U.S., and the anarchist movement in Europe was similarly built on the assumption that in the absence of government, there would be equality at last. There's a germ of truth there.

Governments have historically been instruments for granting privileges to those who were politically connected. That's why Adam Smith's The Wealth of Nations was so vigorously in support of laissez faire. Certainly, much of the current system of government in the U.S. is for the benefit of the wealthy: farm price supports; bailouts of Wall Street firms (only somewhat justified by the government's requirements that they make subprime loans); bailouts of the car companies so that GM, Ford, and Chrysler, won't be able to renegotiate their absurd UAW contracts. (At $72/hour, you can hardly call UAW members "the poor.") Of course, there's all the corruption scandals ongoing, such as the "Friends of Angelo" and the sale of Obama's seat in the Senate.

I think the anarchists were wrong in thinking that perfect equality results from anarchy. There are natural differences in ability, ambition, luck, and access to capital, both physical and intellectual. There are thugs who, in the absence of governmental restraints, will allocate resources to themselves by sheer force. But all those thuggish behaviors are, if anything, accentuated when those of a criminal nature end up in charge of the levers of governmental power, as the subprime mortgage crisis demonstrates. If Rep. Barney Frank (D-MA) hadn't been humping Fannie Mae's general counsel's Fannie Mae, would he have been so vigorous in fighting efforts in 2003 and 2005 to get this idiocy stopped?
1.28.2009 11:49am
trad and anon:
I agree that it would be difficult to set up an effective small-government political movement. But it is easier to establish a one-time movement to set up highly institutionalized constraints on government power (such as constitutional restrictions) than to engage in the ongoing monitoring of government operations that large government requires to make them effective.
If there is anything we should have learned from the past 221 years, it is that constitutions do not enforce themselves. Brown and Heller would never have come about without a movement working to undermine the popularity of the opposing view, as well as its intellectual credibility. Likewise with Lawrence and Roe. (And recall that Brown would have done nothing without the involvement of federal troops: the southern states did everything they could to avoid enforcing it.)

Any constitution will be placed under constant siege from those seeking to "interpret" it to allow more government power to do this or that. Your "highly institutionalized constraints" will turn to dust without someone fighting to enforce them.
1.28.2009 11:57am
trad and anon:
Southern governments then were kept small as a means of maximizing the power of the rich to oppress everyone.
Indeed. It is trivial to set up an oppressive small government, simply by having it vigorously enforce the "rights" of the privileged while declining to enforce the rights of the weak.
1.28.2009 12:02pm
Michael Ejercito (mail) (www):

Can you give some examples of small governments that do not benefit the politically powerful?

During the first half of the twentieth century, most county governments in the American South were small, even by the standards of the day; one of their primary concerns was low taxes. No one would argue that these governments were not run by the politically and economically powerful for their own benefit.

A big government can provide more benefits than a small government.
1.28.2009 12:16pm
Sarcastro (www):
Clear conclusion: no government means no misdirected benefits!
1.28.2009 12:18pm
Clayton E. Cramer (mail) (www):

Yeah. I've often thought that the greatest accomplishment, politically, of the ruling class in the antebellum South was the convincing of poor southern whites that slavery was in their interest.
This wasn't hard to do. People at the bottom usually want someone below them on the ladder to look down at.
1.28.2009 12:32pm
Andy Freeman (mail):
> Yes. It's interesting that conservatives rarely mention Sweden when trashing any socialist ideas like medicare or public auto insurance, and so on.

They don't need to mention it because no one thinks that the US govt doing those things would do them like Swedish govt does.

We have experience with how the US govt does things. It's absurd to argue that it would do new things differently.

The US govt can change how it does things, but until it does, it's absurd to act as if it has.
1.28.2009 12:47pm
MarkField (mail):

Actually Southern governments before World War Two were very much tools of the rich to oppress everyone else regardless of color. Jim Crow was useful to distract non-wealthy whites from the fact that the rich were oppressing them too.

Southern governments then were kept small as a means of maximizing the power of the rich to oppress everyone. Larger governments by defnition reduce the relative political power of the rich, by injecting more power into the system overall. It was much easier for the rich to exert their power directly than to have to do so indirectly via larger governments, particularly larger governments which they wouldn't control unless they worked harder at it.


Agreed.
1.28.2009 1:01pm
Floridan:
"Actually Southern governments before World War Two were very much tools of the rich to oppress everyone else regardless of color. Jim Crow was useful to distract non-wealthy whites from the fact that the rich were oppressing them too."

I agree, but Southern governments could be kept small in large part because of the rural nature of the region as well as the reliance on extra-legal means of enforcing Jim Crow laws.

As segregation broke down,the South began to urbanize and agriculture decreased as the economic foundation of certain regions, local governments began to grow in response citizen's demands for better social, educational, and protective services.

In many ways, larger government was a response to residents' desire for a more egalitarian community (or at lease a community in which benefits were more equitably distributed).
1.28.2009 2:37pm
Thomas_Holsinger:
Floridan,

Larger governments in the South were a direct response to public demand for economic growth. Southern elites much preferred the status quo of being the biggest fish in small ponds.

But World War Two veterans came back from the war demanding better roads and schools to foster economic growth. And federal war production spending in the South increased local demands for those too. See:

Defining the Peace: World War II Veterans, Race, and the Remaking of Southern Political Tradition and The White House Looks South: Franklin D. Roosevelt, Harry S. Truman, Lyndon B. Johnson.
1.28.2009 2:47pm
David Welker (www):
Clayton Cramer,

I thought I would respond to a tangential point you made.


If Rep. Barney Frank (D-MA) hadn't been humping Fannie Mae's general counsel's Fannie Mae, would he have been so vigorous in fighting efforts in 2003 and 2005 to get this idiocy stopped?


As is often the case, when the facts do now fit our ideological preconceptions, there is a tendency to make up myths. In this case, the myth that Fannie Mae and Freddie Mac are somehow primarily responsible for the housing bubble when in fact this was primarily a market failure.

Consider the the market share of Fannie and Freddie actually went down. Meaning that they clearly were not fueling the housing bubble. But, I do not expect ideologically convenient myths like this one to die away in response to mere facts and the actual truth. For more, check out this post by Berkeley economist Brad Delong. He explains it quite well:


Brad DeLong's blog post
1.28.2009 2:54pm
Clayton E. Cramer (mail) (www):

As is often the case, when the facts do now fit our ideological preconceptions, there is a tendency to make up myths. In this case, the myth that Fannie Mae and Freddie Mac are somehow primarily responsible for the housing bubble when in fact this was primarily a market failure.
What this misses is that Fannie Mae and Freddie Mac lost market share because non-GSE lenders were pressured to make subprime mortgages, and followed along.

I won't claim that there was no stupidity and greed by non-GSE lenders involved. But the pressure to make subprime mortgages was there, encouraging non-GSE lenders to do stupid things. The government, if it does anything at all in the oversight area, should not be encouraging stupidity. But Barney Frank insisted that financial stability and security were not the most important matters involved.
1.28.2009 3:40pm
martinned (mail) (www):
The connection between egalitarianism and the size of the government seems like something that can be studied empirically quite easily. Any volunteers for running a regression on GINI depeding on the size of government relative to GDP?
1.28.2009 4:55pm
Thomas_Holsinger:
Below a given level of social and governmental complexity, the rich and powerful oppress the poor and weak directly, through the exercise of superior private power.

Above a given level of social and governmental complexity, the rich and powerful use their superior influence on government as a means of bringing superior public power to obtain benefits for the rich and powerful at the relative expense of the poor and weak, though this is disguised via the use of hypocrisy. Aka the rich and powerful use government power as a transfer mechanism, transferring income and wealth from the less politically connected to the more politically connected.

And there is a vast middle ground in which the middle class uses government to grab a disproportionate share of the goodies.

Note also that a not insignificant element of the poor and weak are that way due to their own moral, emotional, pyschic and often cultural failings, and that improving their lot requires the use of government power to protect them from themselves. I.e., a not insignificant element of the poor and weak oppress themselves just fine without need of anyone else's help.

This is in addition to there being a vast middle ground between too little and too much government power.
1.28.2009 4:57pm
LN (mail):
I see.

First, bring up "Barney Frank humping Fannie Mae's general counsel's Fannie Mae," and ignore the fact that Frank's partner Herb Moses left Fannie Mae in 1998.

Then when it becomes apparent that Fannie and Freddie were actually losing market share during the bubble, shift the blame to the "pressure" applied on banks to make subprime mortgages, even though this is an independent issue.

Left unexplained is how this government pressure could lead to interest-only mortgages, loan originators encouraging false statements of income, the shareholders of a trillion-dollar company like AIG getting completely wiped out, and so on. This is probably all Barney Frank's fault.

Politicians are weak and spineless; they like bubbles and are terrified of popping them. (Although see here for Bush chief economic adviser Lawrence Lindsey saying "Rep. Barney Frank (D., Mass.) is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters.") But the claim that the government successfully encouraged banks to wipe themselves out is a bit illogical.
1.28.2009 5:10pm
JoeSixpack (mail):
I'm still not sure how to post links here, but this is an interesting chart on the topic of big government and general prosperity. My initial conclusion is that there are both good and bad examples all over the chart. Of course, it doesn't address the impact of the relative size of government on the poorer segments of the population in particular.



http://anepigone.blogspot.com/2008/03/government-
spending-as-percentage-of.html

One other point I wanted to mention is that Sweden is a small (9 million people) homogenous (86% white Lutheran) population with extensive natural resources that they are willing to exploit, so it is not easily comparable to the United States and may be more adaptable to the idea of a shared collective. A much more apt comparison to the effects of big government would be the Soviet Union. I don't know if the average poor person was better off in the US or the Soviet Union, but I am pretty confident that the average PERSON was better off in the United States.
1.28.2009 5:29pm
Tatil:
Let's not rewrite history. Many financial institutions were falling over themselves trying to extend loans to anybody who had a pulse. Reluctant banks would not give out loans without income documentation etc. It was very clear that house prices could not rise at this pace forever, but the lure of easy profits blinded them to the risks that the end of this party could come sooner and in a more sudden fashion than expected. Fed's low interest rates, the reluctance of regulators to hit the brakes or some laws might have contributed to the financial crisis, but the main responsibility lies with the banks themselves.
1.28.2009 5:46pm
Thomas_Holsinger:
JoeSixPack,

Bear in mind that the evils of excessive government do not disproportionately impact the poor. They disproportionately impact the middle class, not the poor, for the same reason Willie Sutton robbed banks, "Because that's where the money is."

The poor simply don't have enough money to make it cost-effective for the politically connected to use governmente power to transfer it to them. The middle class does, so they are the ones most harmed by excessive government power.

We are seeing this right now. The Democratic Party, and the Obama administration, comprise an alliance of the rich and powerful, i.e., the politically connected, with relatively poor voters to transfer money from the less politically connected, i.e., the middle class, to the more politically connected.

The Republican Party lost power because its politically connected rich &powerful were less willing to share with other groups than the Democratic Party's politically connnected rich &powerful.

I.e., all this is about sharing. And that is what democracy is for.
1.28.2009 8:25pm
Andy Bolen (mail):
Nonetheless, I think that the poor have a lot more to gain from limiting the power of the state than is often assumed.

Plus, the poor to benefit most would be the deserving poor. :)
1.31.2009 6:21pm

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