January 10, 2012
I’ve become accustomed to people in elite circles saying that I do not exist, as in “nobody saw the housing bubble,” but it still hurts. Okay, excuse the self-indulgence, there is a point here.
In his column today, David Brooks notes that rent-seekers often benefit from government programs, then complains that:
“You would think that liberals would have a special incentive to root out rent-seeking. Yet this has not been a major priority. There is no Steve Jobs figure in American liberalism insisting that the designers keep government simple, elegant and user-friendly.”
I actually have been yelling at the top of my lungs for much of the last decade about how the government has been used by the wealthy to redistribute income upward. This is the point of the not subtly titled book, The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer. And there is my more recent book, The End of Loser Liberalism: Making Markets Progressive. (Both are available as free e-books, for those interested.)
These books have not attracted much attention, I would be fairly certain that Brooks has never heard of either one. Some of this undoubtedly reflects my skills as a writer, but there is a deeper issue here.
The people who dominate what passes for “liberal” politics in the United States would have little interest in promoting the views expressed in these books. Would Robert Rubin and his Wall Street friends want to promote the argument that they got rich primarily because they could rely on too big to fail insurance provided at no cost by the government? Those who question the importance of Wall Street interests in the Democratic Party should note that making a fortune on Wall Street seems to be a pre-requisite for being chief of staff in the Obama administration.
Similarly, both books point out the enormous waste associated with patent and copyright protection. Patent protection for prescription drugs costs us more than $250 billion a year compared to having drugs sold in a free market. This is five times as much money as what is at stake with extending the Bush tax cuts to the richest two percent. But the Hollywood crew, another important base of funding support for the Democratic Party, have little interest in calling attention to the government interventions that keep their industry alive in its current form.
The books also note the protectionist barriers that make it difficult for foreign professionals (e.g. doctors, dentists, and lawyers) from competing with professionals in the United States. This ensures that these professionals will benefit from international trade, since the goods they buy (including trips to Europe) will be cheaper as a result of trade, while the services they sell will continue to command a high price. However, the professionals who design policy for the Democratic Party have little interest in calling attention to the barriers that protect the high pay that they and their family members enjoy.
In short, there are clear structural obstacles to those advancing an argument that we should restructure the government so that it does not redistribute income upward. Those who control the purse strings that finance politics and policy research and the institutions that dominate public debate (e.g. the New York Times, Washington Post, and National Public Radio) have a clear interest in not having this argument get a wide audience.
This is why David Brooks can tell his readers that there are no liberals who are trying to combat rent-seeking that redistributes income to the wealthy. His friends, in both parties, do their best to ensure that anyone making such arguments never gets heard.
(I should mention Jacob Hacker and Paul Pierson as two people who have made a similar argument to a somewhat larger audience.)
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