Watching journalists on the weekend news interview shows, I was startled by the confidence — no, the joy — they seem to have in activist government and their warm feelings for more taxes and spending.
It’s understandable. Activist government provides one-stop shopping for journalists who have to write a story each day. It is much harder to do stories about the millions of entrepreneurs and tens of thousands of local civic organizations that really make things happen in a free society.
Now, we are about to experience the excitement of an activist government that is focusing its activism on cultural and economic issues. The economic agenda comes this week. Instead of spending controls and deficit reduction, it now looks like Clintonomics will include more taxes, more spending and greatly increased government intervention in the economy.
There are surprisingly few detractors. The Council of Economic Advisors, normally a place where presidents find skepticism about government’s ability to guide the economy and manage trade, is now headed by a chairwoman who made a career advocating industrial policy and managed trade. The national press, usually a source of skepticism about almost anything, seems to have bought into Clintonomics. And Congress is in tow, where lockstep has replaced gridlock.
Those who like activist government should remember that activism is a two-edged sword. Ask the Japanese consumer, who has been largely excluded from enjoying the fruits of the Japanese miracle by the cozy relationship among leaders of big government, big business and big labor in Japan. Ask citizens of the former Soviet Union or Eastern Europe who lived under state socialism, the ultimate in activist government.
Or look at South America, where misguided governments have undermined the progress of a continent and the freedom and prosperity of its people for 500 years. South America’s 300 million people live in 12 countries with tremendous stores of natural resources; vast areas of fertile land for crops and pasture; enormous supplies of energy; and tremendous human resources, where more than four out of five people can read and write.
But most countries also suffer retarded economic development and widespread poverty. They were pillaged by the colonial policies of Spain and Portugal, who discouraged local development. When independence came in the early 1800s, many were taken over by self-serving and inexperienced leaders. Then came a century of coups, counter-coups, revolts and revolutions as most governments were run by a succession of military juntas and powerful families. Now, most South American countries are rebounding in response to the democratization, deregulation and privatization policies of a new generation of political and business leaders.
So, to those who say that it doesn’t really matter who governs — as former Texas agriculture commissioner John Hightower once said, “It’s just a matter of tweedle dumb and tweedle dumber.” — I would say, “Look at South America.” Governments do matter. Public policy does matter.
Inattentive parents and self-serving educational leaders in the U.S. have tragically weakened what used to be the world’s best public school system. Business leaders and the media, too quick to endorse activist government, could do the same to the economy. An activist government that seeks to increase revenues (already at record levels) so it can increase spending (already at record levels) and micromanage trade, technology and the workplace can lay waste to an entrepreneurial economy. Activist government has upsides and downsides. We need leaders who know the difference.