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Commentary

Government Failure: Who Benefits?
Government Failures Empower Special Interests


     
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Anyone who listens to the news hears a lot about failed policies. Conservative Republicans in Congress describe themselves as seeking to overturn the failed policies enacted by liberal Democrats. Although the Democrats defend their deeds, they admit that certain policies may have failed and should be reviewed. But, as detailed in the new Independent Institute book, Beyond Politics, by William Mitchell and Randy Simmons, politicians who talk about failed policies are just blowing smoke.

For many years, tax-funded education has been a national embarrassment marked by declining test scores and students who perform well below those in many other countries. Surely the dismal results of government schooling allow one to say that it has failed.

But that conclusion won't float. Why would the people who appropriate educational funds and operate the schools tolerate a failing system for decades? In fact, the system has been a great success. Not for the students, of course, but for the real beneficiaries -- the teachers, staff, administrators, and others who feed off the public school bureaucracy.

These people are middle-class, organized, politically savvy, well connected to the media, and turn out to vote in mass. They form a formidable, highly focused political interest group. For them, the tax-funded school system works nearly to perfection, as attested by the rise of public school spending per pupil (adjusted for inflation) from $2,035 in 1960 to $5,247 in 1990. In turn, public school employees reward friendly politicians with campaign contributions, voters, and get-out-the-vote work.

The welfare system is another national disgrace. For at least 25 years commentators of various political persuasions have recognized that our tax-funded welfare system promotes dependency, family dissolution, juvenile delinquency, and other pathologies. Since 1965 an increase of more than five fold (adjusted for inflation) in anti-poverty spending only subsidized the growth of a wretched underclass.

It would take little more than $50 billion to raise every poor person above the official poverty line, yet the percentage of the population in poverty hardly budges while annual welfare spending amounts to four times that much. Where's the money going?

You guessed it. The money goes mostly to the poverty fighters -- the planners, researchers, social workers, public health doctors, nurses, and technicians, public housing managers, community organizers, administrators and assorted apparatchiki. Like the public school teachers, these people have strong political connections, vote in every election for candidates who support more welfare spending, and never fail to accuse would-be budget cutters of endangering innocent children.

Liberals are not the only promoters of such scams. A notable favorite of conservatives is the Veterans Health Administration, which has some 240,000 employees and a $16 billion budget. The VHA operates 171 hospitals, 362 outpatient clinics, 128 nursing homes, and 35 residential facilities. This monstrosity provides some of the worst health care in America, but whenever anyone suggests privatizing it, anguished patriots protest the betrayal of the brave men who fought to defend our freedom.

In reality this vast bureaucracy serves only about 10 percent of all veterans annually, and most of the patients qualify by virtue of low incomes, not service-related disabilities. The true beneficiaries include most prominently the more than 7,000 employees with annual salaries above $100,000. You can bet that when congressional committees hold hearings on the FHA budget they hear plenty from these top guns.

Democrats and Republicans alike support the failed "war on drugs." Federal state, and local police make more than a million drug arrests yearly. Drug cases clog the courts. More than 60 percent of all federal prison cells and about 30 percent of all state prison cells contain drug offenders. No-knock drug raiders nullify the Fourth Amendment of the Constitution every day of the week. Yet illicit drugs continue to pour onto the market; they are readily available to young and old throughout the land.

Politicians say more money will win the war. for fiscal 1996, President Clinton has requested a record $14.6 billion for this gargantuan exercise in futility. State and local governments also will spend huge sums. Who benefits? Posturing politicians, of course, but also the Drug Enforcement Administration, Customs Service, Coast Guard, FBI, and the rest of the drug warriors. Police love the drug war, because the forfeiture laws it inspired allow them to seize and keep private property with impunity. Corrupt cops get fabulous bribes.

Many other sacred cows graze in the pasture of failed policies, and a similar story may be told about each of them. When we take a realistic view of the political process, we see that the so-called failed policies are nearly always spectacular successes. Otherwise, they wouldn't last.


Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and Editor at Large of the Institute’s quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation. He is the author of many books, including Depression, War, and Cold War.

Full Biography and Recent Publications

NeitherNew from Robert Higgs!
CRISIS AND LEVIATHAN (25TH ANNIVERSARY EDITION): Critical Episodes in the Growth of American Government

The size and scope of government power has grown in response to crises of war and economic upheavals. Such increased power remains long after each crisis passes, threatening both civil and economic liberties, all at the behest of special interest groups. Learn More »»






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