- The conflict today between Democrats and Republicans increasingly pits public sector unions, government employees and contractors, and beneficiaries of government programs against middle-class taxpayers and business interests large and small. In states where public spending is high and public sector unions are strong, as in New York, California, Illinois, and Connecticut, Democrats have gained control; where public sector interests are weak or poorly organized, as in most of the states across the south and southwest, Republicans have the edge. This configuration, when added up across the nation, has produced a series of electoral stand-offs in recent decades between the red and blue states that have been decided by a handful of swing states moving in one direction or the other.
- The regime of public spending has at last drawn so many groups into the public arena in search of public dollars that it has paralyzed the political process and driven governments to the edge of bankruptcy. These groups are widely varied: trade associations, educational lobbies, public employee unions, government contractors, ideological and advocacy organizations, health-care providers, hospital associations that earn revenues from Medicare and Medicaid programs, and the like. These are what economists call rent-seeking groups because they are concerned with the distribution of resources rather than with the creation of wealth. They consume rather than create wealth. These groups are highly influential in the political process because they are willing to invest large sums in lobbying and election campaigns in order to protect their sources of income. While rent-seeking groups can be found in both political parties, the largest and most influential of them (at least on the spending side) have congregated within the Democratic Party. To expand on what was said earlier, one might describe the Democratic Party as a coalition of rent-seekers. [ emphasis added]
- This would be the ultimate challenge for a political regime organized around public spending and debt. It would immediately lead to a highly charged political situation in which incumbents are voted out of office, interest groups battle to protect their pieces of the budget, and the political parties struggle to keep their electoral coalitions intact.
- Despite all this, President Obama is unshaken in his presumption that he is a herald of a new era, a revolutionary on the models of Jefferson, Lincoln, and FDR. But is it possible that he will instead turn out to be something much different, a modern day Adams, Buchanan, or Hoover—that is, the last representative of a disintegrating order? Such a denouement is not only possible but, in view of our situation, more and more likely.
Excellent.
Update a short while later...
The author doesn't predict the outcome of this conflict. Whatever the outcome, there has to be a re-balancing of income and spending. You can't build an economy that runs strictly on debt. You can't just print money and expect to prosper. Spending has to be paid for somehow and the only way to do that is to grow the economy. Just raising taxes to confiscatory rates will do nothing to generate new growth. That's the bottom line.
