When blizzards or other dangerous weather conditions are threatening, the Weather Bureau may issue a special notice to owners of livestock--a "stockman's warning" as it is called. The recent controversy surrounding budget director David Stockman may also be something of a warning to those of us who are concerned about runaway government spending and the inflation that follows.
One of Stockman's disillusionments was over the painful contrast between the theory of reducing government spending and the practice. In theory, all spending can be cut. That means big cuts over all, but spread around so that no single group has to bear the main burden. In practice, it was a lot easier politically to cut food stamps than it was to cut the huge agricultural subsidies that made food artificially more expensive in the first place. It was a lot easier to cut CETA than to cut business subsidies. This had nothing to do with economic theory, whether laissez-faire or "supply side" economics. It has to do with politics.
Conservative politicians are politicians first and conservatives second. For some of them, "free enterprise" means helping business and farmers instead of cities and poverty programs. They are simply liberal big spenders for different groups. Stockman finally concluded that "there are no real conservatives in Congress."
That may have been overstating it. Stockman himself, when in Congress. opposed many spending bills that would have benefited his district, including the bail-out of Chrysler. But this attitude--and fortitude-- has been the exception rather than the rule.
What is the moral of this story? There are many. First, if the public is serious about ending inflationary deficits, it will not be enough to elect people who carry the label "conservative." It will also be necessary to watch them like a hawk, just the same as you would watch liberal big-spenders. Another moral is that splashy political victories for a "conservative" administration do not imply getting federal spending under control. The price of these victories may well be letting much of that spending continue to run amok.
Big-spending liberals have been so thoroughly discredited that they can be rescued only by big-spending conservatives who reduce the whole issue to a cynical question of whose ox is gored. In any showdown on that basis, the liberals seem likely to win in the long run, playing their two trump cards: "the poor" and "compassion." That does not mean that the poor themselves will win, but only that much tax money will be thrown around in their name.
CETA, for example, is often defended as necessary because of the huge unemployment rate among black teenagers. But Michael Novak has calculated that every black teen- ager in America could be employed 40 hours a week, year-round, for less than one-fourth the cost of CETA. Obviously, a lot of CETA money is ending up in someone else's pockets, without making a dent in black teen-age unemployment.
A few years ago, someone calculated how much it would cost to lift every man, woman and child in America out of poverty by simply giving them money. It was one-third of what was being spent on poverty programs. Again, a lot of money was finding its way to people who were not poor by any stretch of the imagination--administrators, statisticians, consultants, economists, sociologists, think tanks, universities, social agencies, and miscellaneous boondoggles. They may get most of the money, but the poor get most of the blame for inflationary deficits. The welfare state is the ultimate in "trickle-down" policies.
Every attempt to get around the welfare bureaucracy by giving the poor cash instead of services is sure to bring cries of outrage from the bureaucrats and their hangers-on. Moreover, cutbacks in agency funds are likely to be taken out of the hides of the poorest and most vulnerable, precisely in order to generate a public backlash against "heartless" budget cuts--even if there are plenty of other agency activities that could be reduced instead. In short, the poor are pawns, both to liberal and conservative politicians.
Someone once said that government is the illusion that we can all live at someone else's expense. The poor did not invent this game. Nor are they the best at playing it. The ultimate question, however is not who wins most at this game. The real challenge is to put an end to the game before we all lose through the crippling effects of inflation on the economy.