- The Centenary of Ludwig von Mises’s Critique of Socialism - June 9, 2022
- In the Beginning: The Mont Pelerin Society, 1947 - May 19, 2022
- Political Paternalism, Not Free Markets, Cause Economic Shocks - May 9, 2022
President Joe Biden journeyed from the White House to the Capitol building on October 1, 2021. There he admonished and pressured Democratic Party Senators and Congressmen to come together and pass both his $1.2 trillion infrastructure bill and his $3.5 trillion Build Back Better Act, which might more accurately be called the Make Big Government Even Bigger bill. He left with no bill, yet, to sign.
When asked by a reporter about the possibility of the bill passing via a razor thin Democratic majority in both houses of Congress, a majority further divided over the size and content of the bill, Biden replied, “It doesn’t matter whether it’s six minutes, six days, or six weeks – we’re going to get it done.”
Reading these words in the printed press, the reader could easily get the impression that here was a calm, collected, and experienced politician taking things all in stride as he “reasons together” with his fellow party members. So what if it takes a few minutes, a few days, or a few weeks, as long as the bills are passed?
Biden’s Power-Lusting Arrogant Irritation and Bullying
But if someone caught this brief exchange between the President and a reporter on the television news, things would have seemed much different. Biden, even with his Covid mask covering half his face, clearly was showing irritation, frustration, and even anger.
His nine months as President have shown that his, “Aw, shucks” persona is simply a sophisticated and experienced politician’s façade, his public persona to win votes and hide his bullying nature.
When he signed the bill sent to him to prevent the danger of another government shutdown at the end of September, Biden said in a statement, “There is so much more to do . . . for the American people.” What such soothing words hide is that for the government to do things “for you,” it must have the power to do things “to you.” And that is what Joe Biden is all about.
Trillions More for the Biden’s Bigger Government Agenda
The $1.2 trillion infrastructure bill is not really about roads and bridges and highways, though even here the actual status of the physical ground transportation network in the United States is far from the disastrous state asserted by the bill’s proponents. Instead, it is about government reshaping how we live, how we drive, and how we use energy sources to power production, and heat and cool our homes.
As for Biden’s $3.5 trillion Make Big Government Even Bigger bill, it includes $1.8 trillion that would radically extend the welfare state and, therefore, dependency on the redistributive plunder machine in Washington, D.C. There is mandated paid leave for either parent following the birth of a child, or for care of a parent or other relative. Benefits include nearly ⅔ of income for the employee, reimbursement of up to 90 percent of employers’ costs and increased financial subsidies for the elderly in the form of price caps on prescription drugs. There are even environmental regulations and financial subsidies to manipulate the energy and manufacturing sectors.
Also in the package is a proposed $726 billion for universal child care for children up to four years of age, tuition-free community college, increased subsidies for racial minority colleges, and increased Pell grants for higher education.
There is also $332 billion for government “investment” in public housing, and home subsidies and guarantees for “equity” in housing. There is $198 billion for government funding of clean energy sources, and $135 billion more to reduce carbon emissions. Add to this another $67 billion for the funding of low-income solar and related climate-friendly technologies.
There is $37 billion for electrifying federal vehicles, and for retrofitting government buildings for clean-fuel electrification, investment in green-materials procurement, and investment in “resilience” (climate adaptability). There is also $83 billion for government-funded research and investment in new climate-adapted technologies, manufacturing, and general economic development. This includes “healthy oceans” investment money for the National Oceans and Coastal Security Fund and the National Science Foundation.
To round this out, there is a planned $107 billion for a fund for lawful, permanent status qualified immigrants,” up to $25 billion to fund access to credit, investment, and markets for small businesses, another $20.5 billion for Indian affairs, to assure native Americans more health care programs and facilities, education programs, housing programs, energy programs, and the Native American Climate Corps. Finally, there is $18 billion for veterans’ affairs facilities.
Democrat’s Self-Image and Survival Requires Big Spending
Given the infighting among Congressional Democrats, with radicals, who want all of this and more on the road to their vision of a progressive socialist America, and moderates, who also want a welfare-state America but worry about the price tag, it remains to be seen how much of the $3.5 trillion price tag actually makes it into the final bill.
But worse for them than facing voters in 2022 will be the dilemma within the party if Democrats fail to pass anything of fiscal substance. What do they run on in 2022?
With all These Trillions Comes Increased Political Control
Rattling off the billions and trillions of dollars Biden and his Congressional supporters want to spend over the next several years with these expanded and new programs fails to highlight some of the most serious consequences that will emerge. It is not merely the dollars spent – though huge by even current government spending standards – or the trillions of “costless” taxes that funding these expenditures will require, which will distort and slow down market-based investment and production possibilities in the future. (See my article, “Biden’s Demagoguery that Government Spending is Costless”.) It is the extension and intrusion of even more government into the consumption, business, and investment decisions of just about everyone.
Under the fear campaign surrounding global warming, the default position of the government and many in the news and social media arena is that the planet is under imminent threat of irreparable destruction due to human behavior. Only those in political power are able to muster all the resources in order to save the world.
Thus, whether it is subsidized solar power panels, retrofitted government and private sector buildings, penalties on auto makers if they don’t conform to Biden-approved electric-powered vehicles, an increased minimum wage, price controls on prescription drugs, further government involvement in health care and medical insurance, everything must reflect and bend to the will of the President’s vision of what is “good” for America.
Shifting More Consumer and Business Choices to Government
All of this means taking decision-making out of the hands of each of us and transferring them to those in political power and the bureaucracies that support them. For Joe Biden to “save” us from global warming or the dangers of the Coronavirus, he must have the authority to make us conform to the economic and social shape of things that he and his advisors prefer.
But this, inescapably, denies us our respective freedoms to choose how best to adapt and adjust our consumption and production activities as we think best. Government would leave every individual less free to best use his knowledge in light of changing circumstances.
Utilizing Dispersed Knowledge to Benefit All Though the Market
Austrian economist and Nobel laureate, Friedrich A. Hayek, explained this, perhaps, most clearly:
The chief task of an effective social order is thus to assure the utilization of knowledge that can exist only in dispersed form among millions or billions of individuals. Now, the main point I want to submit to you is that freedom is the most successful method man has found to cope with the constitutional ignorance of all individuals, and to achieve the maximum utilization of knowledge . . . Coercion is bad precisely because it prevents the individual from making the fullest use of his knowledge and capacities, which are always unique in some aspects . . .
If freedom is essentially a matter of making the best of our ignorance, its importance must increase as society grows in complexity. If nobody can hope to master more than a small fraction of the knowledge that society utilizes, the chief need is increasingly an impersonal mechanism for the coordination of individual actions. The order at which we aim must therefore rest not on specific commands, but on the spontaneous adjustment of the separate individuals to each other.
Such “spontaneous adjustment” is brought about through the decentralized and competitive price system, by which individuals convey both what it is they want as consumers, and what they might be able to produce and supply as sellers. The importance of such a decentralized price system is that it provides the liberty and latitude for each individual, anywhere in the world, to evaluate and decide what is best given his own particular circumstances and situation.
This, in turn, enables all the others in society to determine and decide what that information means for them to appropriately adapt and adjust in terms of (marginal) trade-offs in what they do as demanders and suppliers in their respective corners of the global community. The overall results are constant and continuous coordinative responses of everyone to all the others in society.
Biden’s Hubris and Pretense of Knowledge
How does Joe Biden know all of the necessary adaptations and readjustments to address ongoing health hazards and environmental issues? This would require him (not to mention the advisors and experts who surround him) to know far more than any human could.
Hayek called this a “pretense of knowledge.” The German free market economist, Wilhelm Röpke, referred to it as “the hubris of the intellect;” that is, an arrogant confidence that a man could possibly know enough to guide society. Biden’s impatience, his arrogance, even his rudeness captures the essence of a man who presumes to know what is better for everyone.
The Elitist Mindset of Democratic Dictatorship
In Biden’s mind, people are apparently neither capable nor to be trusted to make such choices for themselves, based upon their own circumstances, with their own means through trade-offs and decisions about their own life in the present and the future. Only government can do this.
This is not only insulting to every person in the country, it also reflects an elitist mindset by those who assert their presumptive right to take over ever more corners of our lives, always for our own good.
Their notion of democracy actually results in a social and economic dictatorship of those who know best over those who just have to live with their paternalistic pronouncements. When our betters say that they want government to “serve the people,” what they really mean is that they want to use government to control and command people.
Real Progress with Free Markets for More Free and Responsible People
Real social progress is the ability of more members of society to be self-supporting and responsible individuals. Wilhelm Röpke highlighted this in, Welfare, Freedom and Inflation (1964):
It is all too often forgotten that anyone who is serious about human dignity should measure progress less by what the State does for the masses than by the degree to which the masses can themselves solve the problem of their rainy days out of their own resources and on their own responsibility.
This, and only this, is worthy of free and grown-up persons, certainly not constant reliance on the State for assistance which, as we have seen, can, in the last analysis, come only out of the pockets of the taxpayers themselves or from an enforced restriction in the standard of living of those whom inflation really hits . . .
If it is accepted that the modern Welfare State is nothing but an ever-expanding system of publicly organized compulsory provision, then it follows that it enters into competition with other forms of provision available in a free society: personal provision, by saving and insurance, or voluntary collective provision by families or groups.
The more compulsory provision encroaches upon the other forms, the less room will be left for individual and family provision, as it absorbs resources which might be devoted to this purpose and at the same time threatens to paralyze the will towards individual provision and for voluntary mutual assistance.
For Röpke and other free market liberals, the way this becomes more possible for more members of society is to move in the opposite direction of Joe Biden.
What is needed is a repeal of government regulations and restrictions, ending any and all government control over consumption and production, lowering taxes, the end to budget deficits, and working with a balanced budget. Finally, we need to end central bank monetary creation, which fuels government borrowing, manipulates interest rates, and misdirects investment decisions.
Alas, none of this is likely to happen.
[FIRST PUBLISHED AT: AIER].
PHOTO: IMG_4966. PHOTO BY: Matt Johnson, Attribution 2.0 Generic (CC BY 2.0).