August 28, 2006
Conservatives Love Government
By Dean Baker
President Bush and other conservatives like government every bit as much as any big-spending liberal. The difference is on what the conservatives want the government to do. Liberals and progressives think that government should be acting to ensure the population a decent standard of living and provide it with essential services like health care and education. Conservatives want the government to redistribute income upward.
::::::::The Bush administration has repeatedly demonstrated extraordinary incompetence in a wide range of areas. The response to Hurricane Katrina, the coordination of "homeland security", and the implementation of the Medicare drug benefit top a long list of disasters. These failures have led many to say that the incompetence is attributable to the fact that Bush and other conservatives dislike government, and therefore can't run it well. Nothing could be further from the truth.
President Bush and other conservatives like government every bit as much as any big-spending liberal. The difference is on what the conservatives want the government to do. Liberals and progressives think that government should be acting to ensure the population a decent standard of living and provide it with essential services like health care and education.
Conservatives want the government to redistribute income upward. This is done through a variety of mechanisms, the most obvious of which are their tax policies, which favor upper income people. But conservatives want the government to intervene in the market in a wide variety of ways that have the effect of redistributing income from those at the middle and the bottom to those at the top.
Conservatives promote a long list of government policies that shift pre-tax income upward. The most obvious is trade policy. The conservative trade agenda is to put less educated workers (the 70 percent of the work force that lacks a college degree) in direct competition with workers in developing countries like Mexico and China. This competition lowers the wages of workers in manufacturing, construction, and many other sectors. Pushing down the wages of these workers benefits the wealthy both by increasing corporate profits and by making it cheaper for them to get a wide range of services, like having their house painted or buying restaurant meals.
A more progressive trade policy would focus on subjecting the most highly paid workers to international competition: doctors, lawyers, accountants. This would lead to huge economic benefits in the form of lower medical costs, as well as lower prices for a wide range of goods and services, as wages for the most highly paid workers declined under the pressure of international competition. But conservatives count on the government to protect the six figure salaries of highly educated professionals.
Conservatives also count on the government to protect the patent monopolies that allow Pfizer, Merck, and other big drug companies to earn billions of dollars in profits each year. Conservatives also count on the government to protect Microsoft's copyrights on Windows, allowing it to become one of the world's most profitable companies. The same is the case with entertainment industry giants, like Disney and Time-Warner. The big hand of government chases into college dorm rooms and the bedrooms of high school kids in search of unauthorized downloads of their copyrighted material.
With the new bankruptcy law, conservatives enlisted the government's help in debt collection. As a result of this law, the government will follow debtors for decades in order to provide a helping hand to credit card companies that made bad loans. In a free market, lenders who are bad judges of credit risk lose money, but when conservatives control the government, the banks just run to the government for help.
There are many other areas of policy where conservatives have run to the government in order to get a helping hand for businesses or those already rich. It is ridiculous to say that conservatives don't like government. They rely on the government to stay rich and get richer, as I point out in my book, The Conservative Nanny State.
It is true that conservatives don't like government programs that benefit broad segments of the middle class and poor. This is why they want to privatize Social Security, mismanaged the Medicare drug benefit, and completely failed in their response to Hurricane Katrina.
But no one should confuse their disdain for government social programs with a dislike of government. In areas that matter to conservatives, the government under President Bush is doing just fine. Pfizer and Merck are having their patent monopolies protected quite well by the government. In the same vein Microsoft and Disney can count on effective copyright protection. Highly paid cardiologists don't have to worry about having their salaries lowered by an influx of qualified foreign doctors. And the credit card companies are getting the government's help in shaking down debtors.
When Halliburton stops getting its checks for military contracts, then government will have failed conservatives. Until that day, the Bush administration is doing just fine managing government in the way that conservatives want it to be managed. Conservatives would like us to believe that they are free market individualists. In reality, they are dependents of the nanny state.
Dr. Dean Baker is a macroeconomist and Co-Director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He received his Ph.D in economics from the University of Michigan.