Small Government Democrats
by Benjamin Studebaker
I ran across an interesting hunk of data supplied by Paul Krugman that confirms what I have long suspected–American politics is no longer a contest between the progressive left and the conservative right; it is a mere feud between different conservatives. Let me show you what I mean.
Here’s the data:
The blue line represents state spending at all levels (local/state/federal) as a percentage of GDP. The red line represents state spending as a percent of potential GDP–the estimated output we would have if the economy were operating at full employment instead of wasting the labour of several unemployment percentage points worth of unemployed people. What we see when we look at this chart is that spending as a percentage of GDP peaks right around 1992–the last year of George H.W. Bush’s presidency–before falling throughout the nineties. It then begins to take off in the early 2000’s–George W. Bush’s presidency–and peaks out right at the start of Barack Obama’s first term, at which point it begins declining.
The upshot of all of this? State spending tends to rise (relative to output) during republican presidencies and fall during democratic ones. There are two possible reasons for this:
- Democrats increase economic output so much more effectively than republicans that, despite being big government leftists, they still manage to reduce spending as a share of GDP.
- Democrats are actually more conservative on spending than republicans are.
While the left might prefer the former to be true, I argue that the latter is the case.
Let us not forget some of the laws that were passed by the Clinton administration. There was the Balanced Budget Act of 1997, which cut Medicare in order to reduce spending by $127 billion, which was, in 1997, a reduction in federal spending of 1.5% of GDP. Then there was the Personal Responsibility and Work Opportunity Act of 1996, better known as welfare reform, which led to a deep cut in spending at the state level on welfare:
Consequently, as soon as the late nineties boom ceased to mask its effects, poverty rose:
It is not just Clinton, either. As we discussed the other day, the outcome of the fiscal cliff deal results in a spending reduction of $304 billion, or 1.9% of our 2012 GDP–a larger reduction than that made by the Clinton administration in 1997. In addition, the Obama administration chose not to extend emergency aid to state governments beyond 2011. The states decided to respond to this predominantly by slashing spending:
Since 2011, the result has been vast job losses at the state level, particularly in education (many of the states ceased to aid their local governments before 2011, so local job losses start earlier):
These spending cuts are most noticeable in education:
The American left would be utterly horrified by any one of these laws or statistics were they to have come to pass during the presidency of a Ronald Reagan or a George Bush, but because the president is a democrat, he is given a pass. It is assumed that if a republican were president, the legislation being passed would be even worse, but historically, this is not true. When republicans are elected president, they do not enact deeper cuts; they spend more money than their democratic rivals (though predominantly on defence and foreign wars, not welfare). The rhetoric of republicans is that of the deficit scold, but their actions tell the opposite story. By the same token, democrats talk of helping the middle class and the poor, but, when given the reigns of power, they cut welfare, cut spending, and allow the mass firing of teachers. The public believes the talk and gives the actions little heed, when it should be the reverse.
We are told that we have this polarised political climate in which the two parties have embraced extremism; what we really have are two parties who are very nearly identical in outlook who use the media to create the perception of difference and distinction in order to attract campaign funding, votes, and public support. Why donate or work for the Obama campaign if the reality is that an Obama administration would be little different from a Romney administration? It is imperative that the average citizens be made to fear the other party and its plans. So the republicans will be painted as the grim reapers of entitlements and the democrats will be painted as flaming Marxists, and in the donations, volunteers, and supporters will flow. The media, which makes money from the spectacle, has no reason to question it.
This is not to say that the two parties sit in back rooms and plan to say nasty things about each other while secretly plotting to do the same thing–the politicians themselves are the truest of true believers. They get into politics telling themselves that they will bring about a variety of wonderful changes, but when they actually rise to office they find that, in order to survive in electoral politics, one must employ the only strategy both of the parties has, in truth, employed for decades–paint oneself as a reasonable centrist and paint one’s opponents as ideological extremists. The net effect of both parties doing this very same thing has only been to convince the public that both parties are extreme. Consequently, in order to appear moderate and counter the perception of extremism, both parties refrain from actually doing anything they believe in while in office. The left will actually behave more right wing while in office than the right will, and the right will actually behave more left wing while in office than the left will. It is a fascinating phenomenon–in order to be in office so as to enact policies they believe in, politicians do not enact policies they believe in while in office. To keep power, they refrain from using it. Such behaviour is not the behaviour of some rational schemer trying to sensibly achieve something or other, it is the behaviour of an irrational fool who cannot see that the system in which he participates does not work. When you must not use power in order to have it, you do not actually have any power at all.