Pressure on the Welfare State

Today's New York Times presented two interesting pieces that are significant in our understanding of the future of the Welfare State. In the first, Monica Davey writes:

The dismal fiscal situation in many states is forcing governors, despite their party affiliation, toward a consensus on what medicine is needed going forward.

The prescription? Slash spending. Avoid tax increases. Tear up regulations that might drive away business and jobs. Shrink government, even if that means tackling the thorny issues of public employees and their pensions.


She goes on to analyze the inaugral addresses of a number of incoming governors with an eye to understanding the rhetoric of the new state leadership. While this rhetoric many well be illusionary, it seems that there is an emerging recognition of the high cost of the welfare state. As the burden has increasingly shifted to the states and municipalities it is informative to see what elected leaders are considering.

For example:

In his speech, Rick Scott, the new Republican governor of Florida, called for eliminating a business tax and reducing property taxes. He dubbed taxation, regulation and litigation “the axis of unemployment.” And he issued a warning: “No job — public or private — should be immune from accountability.”

The recognition of the impact of taxation and regulation on employment and economic growth is extremely important. The next and more important step is one of education, I would guess that the vast majority of participants in society are unaware of this fundamental relationship and the elite are certainly hostile to any effort to apply logical reasoning and analysis to the welfare state in an effort to compare the costs and benefits.

This elite hostility is reflected in the second NY Times piece - Dr. Krugman's editorial.

The elite hostility and hubris is manifest in the preultimate paragraph of his editorial which is revealing titled - War on Logic. Krugman evidently views any disagreement with his presciption for society as war and illogical. Given what we know about the pretense of knowledge I find Krugman's "confidence" alternatively amusing and disturbing. Amusing because his shrill "attack" rhetoric which is so similar to that of others on both the right and left as to be a caricature of the ivory towered professor. Krugman opines:

As I tried to explain in my last column, the modern G.O.P. has been taken over by an ideology in which the suffering of the unfortunate isn’t a proper concern of government, and alleviating that suffering at taxpayer expense is immoral, never mind how little it costs.

Setting aside Krugman's obvious frustration that his correct view is not prevailing and his failed attempt to associate free and responsible liberalism with the GOP (if Krugman is the Howard Stern of elites, then conservative GOPers are the Jon Stewarts of elite) make for pity - this man won the Nobel?

But in fact, the point he uses to attack freedom and liberty is at the heart of our contemporary dilemna, it is in fact immoral to coerce another in order for some ethermal goal of social justice.

As I ponder the absurdity of Krugman I reflected on a great book - The Forgotten Man. Amity Shales wrote:

The 19th-century academic William Graham Sumner had a famous formulation for the hidden costs of feel-good economic legislation.

Persons A and B, he wrote, usually get together to decide what C will be compelled to do to alleviate problem X. “What I want to do,” Sumner wrote, “is to look up C. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who is never thought of. He works, he votes, generally he prays — but he always pays.”

This is the height of immorality - and yet I fear that the elites have carried the high ground and from their commanding heights continue to convince the populace of the falsehood that somehow coercive activities if approved by the elite are not immoral.