Ponzi Politics and Public Choice

by G. Murphy Donovan (February 2012)

distributive justice,” an ideal which suggests that if we could don a “veil of ignorance” (sic), and ignore the inequalities of nature, birth, and achievement; society could be organized around a set of principles where the point of departure is equality – and the end game is a consensus political system where the advantages of successful individuals work to the benefit of the “least advantaged.” The bottom line for Rawls is a kind of bumper sticker wisdom; “Justice equals fairness!” The fairness thread has become the weft of contemporary liberal cloth. President Barrack Obama’s most recent 2012 campaign rhetoric, for example, is ripe with appeals for justice and “fairness.”

Unfortunately, there is little consensus on the precise meaning of grand abstractions like justice and fairness. Like “hope” and “change,” such generalities are too vague to be social strategies or political destinations. Fairness is case specific and good luck with political principles that might insure justice. If politicians could reason their way to justice, the judiciary might be eliminated – and all the lawyers might be shot tomorrow. And if citizens could reason their way to fairness, logic would have them agitate to end costly programs that clearly do not work. In the real world, continued funding of failed social and strategic programs is “unfair” to the future – and today’s taxpayers.

Predictably, these public players often make poor collective policy choices. The common outcome of this matrix is expensive programs, good and bad, that get cast in cement. The knee jerk answer to any program failure is every politician’s favorite asserted conclusion – spend more! Unfortunately, with social programs, “more” never seems to be enough.

worst and most expensive public school system in America. The enlightened voters of Washington, DC promptly gave the mayor and his education chancellor, Michelle Rhee, one-term pink slips.

Michelle Rhee

All of the political rewards or payoffs in social democracies are associated with creating new programs or sustaining old ones. National security failures like nation building or domestic ciphers like public education and public housing are examples. Sailors do not get to be admirals by building fewer warships. Unfortunately, efficiency and effectiveness are minor considerations in contemporary policy debates. And unintended consequences, the harm a program might do, seldom factor into programmatic decisions.

Conservatives are not without fault in the fairness debate. They complain that bailouts and stimuli for industry remove moral hazards from the risk of doing business. Yet the absence of moral hazards is more of a problem for government than industry. When was the last time a major failed government program was dismantled? Indeed, the worst examples of modern governmental dissipation, foreign aid and nation building come to mind, have bipartisan support. Bipartisan good intentions now trump any measures of effectiveness.

philanthropy. Apple quickly refocused on its creative core and returned to profitability. In contrast, governments, especially federal governments, cannot stop doing that which does not work. It is government programs, not commercial enterprises, which are too big to fail. Long before the Apple success story, Daniel Patrick Moynihan wrote an epitaph for men like Jobs:

Government policy can and does influence the world of commerce. Yet the influence is too often a one-way street. Governments have a congenital inability to stop, change, or end failed enterprises.

housing and public schools, for example, provide too much grist for an overburdened judicial mill.

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G. Murphy Donovan is a former Intelligence officer who writes for frequently about politics and national security.

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