To the Editor:
Christopher C. DeMuth [“Why the Era of Big Government Isn’t Over,” April] passes lightly over the main reason the era of big government continues: most Americans want the government to help them get through life. Mr. DeMuth seems to believe that most Americans are as well off as he is. His article glitters with exaggerations—describing America, for example, as “a mass-upper-middle-class society”—and bizarre untruths, like his claim that the United States is “the most egalitarian of any advanced, prosperous society.” The reality is that economic inequality is more pronounced in the United States than in any other industrial democracy. Moreover, since the recession of 1973, real income for the poorest two-thirds of Americans has declined an average of 1 percent a year.
If the income gap continues to grow, and I believe it will, there will be a popular demand for income equality. Then the era of big government will truly begin.
John Engelman
Walnut Creek, California
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To the Editor:
Everyone supposedly knows that big government is bad and smaller government is better—more efficient and effective, closer to the people, ultimately more democratic. Relying on this truism, Christopher C. DeMuth makes a persuasive case that big government is still with us, and may even be growing. The only problem is that the truism is not true.
Social Security is one of the biggest government programs. A few years ago, magazines were filled with dire warnings that the aging baby boomers would soon bankrupt the Social Security system. Now that we debate how best to spend a trillion-dollar surplus in the next decade, the issue has faded. With his genius for sensing public opinion, President Clinton has made saving Social Security one of his top priorities. For all its size, in other words, Gingrich revolution popular. Nothing destroyed the Gingrich revolution more than the perception that the Republicans would gut or cut Social Security. Maybe the American people know something Mr. DeMuth does not.
The more important debate is between proponents of means-tested programs (based on income) and supporters of universal programs (for broad categories of people). The old adage still holds: programs just for the poor become poor programs. Thus, if I am a working person in the lower middle class, just barely ineligible for welfare, Medicaid, food stamps, and housing subsidies, and I see my neighbor, much like me but barely eligible for all these benefits, I am likely to become embittered, the stereotypical hard-hat bigot. By contrast, I treasure my benefits under a universal program like Social Security. We need some unity in America, and only such universal programs can provide it.
Donald Feldstein
Teaneck, New Jersey
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To the Editor:
In his extraordinarily important article, Christopher C. DeMuth contends that an increase in executive-branch initiatives is what best explains the persistence of “big government.” Although highly informative and powerfully reasoned, his argument gives too little weight to the role of the judicial branch in producing the erosion of democratic values he describes. Three examples will illustrate the point.
One of the major devices by which the judiciary has enhanced its power is the class-action suit, which enables lawyers to shape public policy by exposing private defendants to litigation that is prohibitively dangerous to fight, or by suing public bodies and entering into stipulated “settlements” (e.g., for the governance of prisons or the administration of welfare systems) that are indistinguishable from legislation. The federal rule of civil procedure that allows class actions dates only to 1967, and like all such rules is subject to plenary control by Congress, which could quickly curb class-action excesses by amendment. “Law” that is now made in class actions, far beneath the radar of public debate, would then have to be made either in Congress or not at all.
The failure to regulate awards of punitive damages and attorney fees in the federal courts is another shocking omission on the part of Congress. Punitive damages are an inherently lawless, unjustifiable exaction, which the Supreme Court has tried, and failed, to control. Congress could step in to prevent this unconscionable enrichment of the private bar.
Finally, I have never understood why the judiciary committees of Congress do not conduct oversight hearings into the behavior of federal judges as other committees routinely do in the case of executive officers. Given the enormous discretion judges enjoy to make law, often relying on a judicial determination that Congress has authorized such “public litigation,” there can be no credible objection to such hearings on grounds of “judicial independence.” The result would be a greater degree of that political accountability whose decline Mr. DeMuth chronicles.
The failure of Congress to address even one of these issues in nearly six years of Republican control of both houses is a grave indictment of the GOP’s leadership.
Michael W. Schwartz
New York City
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To the Editor:
Congress itself is complicit in the creation of the “unbounded administrative government” that Christopher C. DeMuth describes. Not wishing to touch issues that engender conflicting opinions in their constituencies, our representatives have, by nonfeasance and through the creation of vague legislation, left voids that appointed activists in the executive and judicial branches have been only too eager to fill. An egregious example of this has been the distorted enforcement of the 1964 Civil Rights Act, which has led to affirmative-action mandates that are in direct conflict with the act itself.
The solution for the problems adduced by Mr. DeMuth lies in Congress’s exercising the legislative powers clearly set forth in Article One of the Constitution. That Congress does not so act is a function not of its laziness but of its constant preoccupation with fund-raising and reelection.
Frederic Wile
New York City
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To the Editor:
Christopher C. DeMuth sets forth some of the realities of a U.S. government that is growing not only in size but also in complexity. In the long run, the latter phenomenon may be even more destructive of democratic values and effective management of the public business than the former. The more complex government becomes, the less the average citizen can understand it, and the more indifferent he becomes toward the entire process.
As a result of the evolving conditions Mr. DeMuth describes, we see experts, technicians, systems analysts, bureaucrats, and special pleaders of all kinds taking over the mechanics of the governmental process. Meanwhile, our elected officials stand by, truculent and assertive as usual but completely uncertain how to conduct public affairs. To make matters worse, the media simply ignore government issues they do not understand or find boring.
Joseph C. Doherty
Chestertown, Maryland
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Christopher C. DeMuth writes:
My article’s account of American egalitarianism was summary, but it was not exaggerated or untrue, as John Engelman complains. After calling my account “bizarre,” he says that “since the recession of 1973 [not a recession year, by the way], real income for the poorest two-thirds of Americans has declined an average of 1 percent a year.” That is to say that the incomes of a large majority of Americans have fallen by nearly one-quarter since 1973. Does he really believe this?
Mr. Engelman is repeating a factoid-myth that has been in circulation for many years. Its exact provenance remains a mystery, but it is probably a misinterpretation of one of the government’s wage surveys. The likeliest source is a Labor Department survey of “weekly and hourly earnings of production and nonsupervisory workers,” which covers about two-thirds of the workforce (not “of Americans”) and which shows annual declines in the 1-percent range for some stretches (though not for the 1973-2000 period).
That survey has been collected in such a way, however, as to include progressively more lower-wage workers over time: it does not track changes in individuals’ earnings over time. Moreover, the survey, like most official wage surveys, does not include employee bonuses, profit-sharing, or benefits (the fastest growing form of compensation), or in-kind government transfers (Medicaid, WIC, food stamps) or the Earned Income Tax Credit (which can be substantial for lower-wage workers). Finally, this survey, like most others, uses the Consumer Price Index (CPI) to adjust for inflation, and all competent economists agree that the CPI has seriously overstated inflation, and thereby seriously understated wage increases, over the past several decades. The Boskin Commission’s 1.1-percent CPI correction would itself reverse a 1-percent annual decline in inflation-adjusted wages.
Although Mr. Engelman fell for a statistical whopper, he could easily find good data showing increasing inequality in annual incomes (properly measured and adjusted) in recent decades. But the important point is that annual income is itself a highly misleading measure of the distribution of personal welfare in a society as rich as ours—where we are so wealthy that “annual income” has become, to a significant degree, discretionary. In the early 20th century, most Americans went to work immediately after secondary school or earlier and kept working until shortly before they died; today young adults are spending much more time in school (and engaging in other non-earning pursuits), and older people are spending well over a decade on average in retirement. Consider that a man and a woman about to graduate from medical school will typically appear toward the bottom of the income distribution. When they begin work, their incomes are above average, and when they marry, their “household income” doubles. Thirty years later, in their peak earning years, they will probably be in the top 5 percent of the income distribution. Today the bottom and top of the income distribution in any given year include many people such as these; the word for this form of income inequality is “progress.”
An important reflection of these trends can be seen in the work of Daniel Slesnick of the University of Texas, who finds that the distribution of annual consumption has remained essentially unchanged since 1973, even as the distribution of annual income has become less equal. (This includes Mr. Engelman’s “poorest two-thirds,” whose consumption expenditures have been increasing at about the same rate as the top one-third.) And Slesnick’s data do not capture the most important new form of consumption—consumption of leisure (non-earning) time, which is particularly striking among the “poorest two-thirds” and among those who are in the workforce. New research by MIT economist Dora Costa shows that, in 1950, Americans in the top 10 percent for wage income were working 46 hours a week on average while those in the bottom 10 percent were working 52 hours—and that by 1998 the two groups had traded places, the top 10 percent laboring 52 hours a week while the bottom 10 percent were down to 45 hours. That is a redistribution from the top to the bottom of the wage scale of nearly one day of free time every week, or a month-and-a-half every year! These changes in the allocation of time have important consequences for income distribution. Robert Have-man of the University of Wisconsin has shown that most of the recent increase in income inequality among male wage earners (at least 63 percent of increased inequality for the period 1973-1988) has been due to voluntary personal choice, not lack of opportunity.
Mr. Engelman is right that economic inequality, beyond a certain point, generates popular demand for some equalization. So he should ask himself why, if inequality has really been growing as much as he supposes in recent decades, redistribution has faded from U.S. politics during this period. The last big redistributive initiative was President Clinton’s 1993 proposal to provide health insurance to the dozens of millions of Americans who lack it: the proposal was a spectacular flop, and health care reformers have despaired ever since over the public’s indifference to the issue. Now the levelers have turned to the “digital divide,” where social justice is to be had through government subsidies for Palm Pilots and Internet connections. Such is the equality politics of a super-rich, super-egalitarian society.
Every important statement in Donald Feldstein’s letter is wrong. Magazines were not filled with warnings that Social Security would be bankrupt soon, but rather that it would be bankrupt in 30 or 40 years; the current surpluses in the government’s general account have not altered those projections; Social Security has not faded but is one of the central issues in this year’s presidential campaign. President Clinton has not made saving Social Security a top priority; he offered one reform proposal with some interesting features, and submitted budgets that claimed to “protect” Social Security through entirely meaningless, indeed ridiculous, slights of accounting, but his eight years in office have produced little of substance in the area despite the pleas of prominent Democratic legislators like Daniel P. Moynihan and Bob Kerrey. (The one important Social Security reform of his term, the recent elimination of the earnings limit for people over 65, was a longtime Republican proposal.) The Gingrich revolution was not “destroyed”—its 1994 majority of the House of Representatives remains intact, although diminished in size—and Speaker Gingrich’s setbacks at the hands of President Clinton, such as during the government shutdown in the fall of 1995, had nothing whatever to do with Social Security.
I am sorry that Mr. Feldstein imagines himself, as a low-income worker, becoming an “embittered bigot” because poorer neighbors are receiving means-tested welfare benefits. And I am sorry that he thinks the only way to achieve unity in America is through universal government programs. If he were to look closely at Social Security, he would see that it has many features that are disuniting and embittering and distributionally perverse to boot—such as its treatment of working women and widows in many circumstances—features that would be cured if the program were means-tested or, better yet, privatized and vested.
I agree with Michael W. Schwartz and Frederic Wile that the courts and Congress are responsible for much bad policy and willy-nilly government growth. Both writers offer several choice examples and emphasize congressional pusillanimity—which, I think they would agree, is an institutional problem rather than one of party or persons. That, in my view, is why the executive agencies should be regarded as the “most dangerous branch,” and why the President is the only likely source of constitutional reinvigoration. The specialized executive agencies, with the “experts, technicians, systems analysts, bureaucrats, and special pleaders of all kinds” that Joseph C. Doherty describes, are the activist forces of modern government. The Congress is essentially two large unwieldy committees, subdivided into hundreds of smaller overlapping committees and rent by innumerable factions of interest and ideology, the judiciary is constrained by self-denying doctrines of precedent and jurisdiction and, above all, by the inability to set its own agenda.
In contrast, the executive agencies are purposive, protean, persistent: able to seize and promote with alacrity every opportunity created by vague legislation and judicial innovation (the Civil Rights Act mentioned by Mr. Wile, and the rules concerning class actions, punitive damages, and attorneys’ fees mentioned by Mr. Schwartz, being conspicuous examples). But the parchment still says the agencies work for the President. The situation will improve when—and, I think, only when—a President reverses course, and obliges his hundreds of thousands of energetic, well-organized subordinates to follow.
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