Budget

Commentary: We Don’t Need to Fix the Subsidized State, But Discard It Altogether

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One of the best editorials of the year appeared in the New York Times recently courtesy of Ross Douthat. Douthat refers to the array of crises which have beset the United States in recent years – the automotive industry, health care, big bank failure, etc.- and astutely points out that, despite glaring evidence of a systemic failure, our response has not been to disassemble the system, but to consolidate it and grant it even more power.

Douthat correctly diagnoses these assorted meltdowns not as failings of capitalism or democracy, but as the implications of an unprecedented collusion of government and private industry. “The panic of 2008 happened, in part, because the public interest had become too intertwined with private interests for the latter to be allowed to fail.” In the wake of the financial meltdown, many were quick to point out the supposed failure of free market and/or unregulated capitalism. This, however, is a poor interpretation of what has actually been transpiring.

Despite the constant growth of government mechanisms to prevent disasters of all kinds – economic, ecological, national defense – these apparatuses have not succeeded in their duties, even with the untold trillions of dollars which prop them up and the innumerable laws and policies which are created to empower them. In spite of these failures, we continue to trust the system. So much actually, that we vest it with even more responsibilities, allowing the government to keep expanding in scope and further collude with our private sectors.

In his brilliant assessment of the state of American health care, David Goldhill makes the analogy to a dilapidated house. If before the passage of comprehensive “health care reform,” American health care was a rotting house, the recent legislation merely made cosmetic changes. The rotting foundation remains, and the government just added a few more stories to the decrepit structure.

His analogy does not just hold water in regards to health care, but illuminates other sectors of our economy which are currently being bailed out and subsidized to no end. As long as we continue to think so finitely, we are sentencing ourselves to another economic catastrophe. What we need, as both Douthat and Goldhill implore, is a paradigm shift altogether. For instance, Goldhill is adamant that “the most important step that we can take toward truly reforming our system is to move away from comprehensive health insurance as a single model for financing care.”

Likewise, Douthat criticizes the rapid consolidation and centralization of government:

“From the Troubled Asset Relief Program to the stimulus bill, from the auto bailout to health care reform, we’ve created a vast new array of public-private partnerships – empowering insiders at the expense of outsiders, large institutions at the expense of small ones, and Washington at the expense of state and loval governments.”

Instead, we need to reduce the size of government and its reach into private businesses and industries, disassemble and reconfigure those government departments which don’t work, rather than adding on to them, and stop treating public workers and labor unions as a client class of its own. Slight modifications to the current system are only delaying the inevitable- we need to think beyond the status quo and create a sustainable system independent of the welfare state which we reside in now.

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