The largess fallacy 

I try not to read the papers anymore.

When I do, I usually encounter some recurring theme -- some fetish du jour cascading through the chatterscape. Two years ago it was global warming hysteria. Last year it was the Tea Party troglodytism. Today, it’s the Largess Fallacy.

Here’s how it goes: If the government stops funding it, it will cease to exist.

The Largess Fallacy is being used to scare the bejeezus out of the last remaining independents squatting on the fence when it comes to questions about excessive government spending.

And the Largess Fallacy is popular among pundits these days. Two out of three of my forthcoming examples - unsurprisingly - come from the New York Times. Indeed, the first two are big government elitists angry at all this common sense populism. But the third is, well, a little surprising, as we’ll see...

The School of Fish

First, I come across the lamentations of one Stanley Fish, who doesn’t believe in principles. But woe betide the budget cutters who come for the humanities weilding steely sheers:

 

In a response to last week’s column ... Charlie from Binghamton asked, “What happened to public investment in the humanities and the belief that the humanities enhanced our culture, our society, our humanity?” And he speculated that it “will be a sad, sad day if and when we allow the humanities to collapse.”

What he didn’t know at the time is that it had already happened, on Oct. 1, when George M. Philip, president of SUNY Albany, announced that the French, Italian, classics, Russian and theater programs were getting the axe.

Behold those towers, once ivory, they now run red with the lifeblood of unemployed Tolstoy scholars! How will upper middle class kids learn to order a crepe when abroad in Paris junior year? How will the future Fishes of the world learn to become philosopher kings if Plato is pulled from the curriculum by the godforsaken bean counters!

Fish fails to mention anything about inflation in higher ed. The fact that these institutions are run like protectionist guilds simply escapes him. And more strangely still, Fish treats SUNY Albany as the harbinger of all things bad in higher ed. I’d advise Professor Fish to walk over to the economics department wherever he’s teaching these days and let them explain how you can get humanities without government red ink.

That Other Friedman (The One Who Gushes)

Turn now to the incomparable Thomas L. Friedman who manages, almost weekly, to gush about something utterly flaccid -- like green energy or Chinese export planning. This week? It’s “eight innovation hubs”. Seriously:

 

Kishore Mahbubani, the dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is over for tea and I am telling him about what I consider to be the most exciting, moon-shot-quality, high-aspiration initiative proposed by President Obama that no one has heard of. It’s a plan to set up eight innovation hubs to solve the eight biggest energy problems in the world. But I explain that the program has not been fully funded yet because Congress, concerned about every dime we spend these days, is reluctant to appropriate the full $25 million for each center, let alone for all eight at once, so only three are moving ahead. But Kishore interrupts me midsentence.

 

“You mean billion,” he asks? “No,” I say. “We’re talking about $25 million.” “Billion,” he repeats. “No. Million,” I insist.

 

The Singaporean is aghast. He simply can’t believe that at a time when his little city-state has invested more than a billion dollars to make Singapore a biomedical science hub and attract the world’s best talent, America is debating about spending mere millions on game-changing energy research.

Welcome to Tea Party America. Think small and carry a big ego. [Emphasis mine.]

How much ‘energy cash’ was in that trillion-dollar stimulus, again?

If Tom Friedman could stop letting preoccupation with the Tea Party dangle so before his eyes, he might be able to see that not all - hardly any, in fact - great innovation comes from the public sector. He might be able at least to scoot his rolling chair over to the dusty shelf where the Econ 101 textbook sits unread and look up “opportunity cost.” He might be able to find an ounce of profundity beyond mere movie paraphrases.

Of course, Friedman’s use of the Largess Fallacy implies that if the government doesn’t spend us $25 million - not billion, just million -- more into debt, then we’ll never see another Xerox Parc, Carnegie Mellon, or X-Prize Foundation. (Oh wait, those are all private innovation hubs.) Anyway, if we don’t spend more money on yet another non-cost-effective energy boondoggle that diverts resources from real market innovations, we’ll all be [insert dire Malthusian prediction here].

I tell you what, Other Friedman. If you can convince Congress through cajoling or crocodile tears to scrap the NASA budget, then I won’t write ugly things if they use more funny money to start “eight innovation hubs.” (Why, because that would be $19 billion a year we could use to solve real problems -- minus, of course, the $25 million, of course, for your “exciting, moon-shot-quality, high-aspiration initiative.”)

Trickle-down Defense Spending

Now, I’m saving the best for last. A so-called conservative. If you haven’t already seen it, here’s Matthew Continetti warning disaffected America about spending cuts in the pages of the Weekly Standard. Here’s a sliver:

In the austerity trap, Republican congressmen get so outraged over earmarks to fund studies of the mating patterns of red-bellied newts, they neglect legislation that would foster long-term growth. Deficit anxiety causes conservative lawmakers to rule out sensible policies like a payroll tax cut. A myopic focus on government spending causes Republican leaders to short-change the defense budget and renege on America’s global responsibilities. The entitlement nightmare frightens GOP candidates into framing their economic agenda in strictly negative terms.

Translation: cut the stuff they like, not the stuff we like or that might get us votes.

The whole point on attacking spending is that the Rs have been cutting taxes but increasing spending for way too long. People want both cut now. Rs can’t eat their cake and have it to, as they did under Reagan, Bush and Bush. Your chickens will come home to roost. The natives will get restless. (And there is another old saying in there somewhere that is apt. I’ll think of it later.)

All of this agonizing about spending cuts appears to be a last-ditch effort to stop what is likely to be an establishment bloodbath. The professional politicians - D or R - who have gotten us to this state should prepare for the reckoning -- would-be spending Cassandras notwithstanding. Continetti alludes to Reagonomics as if it had been the best thing since Star Wars. It was okay, but let us not forget that Reagan was a deficit spender, too--not nearly as bad as the Obama Administration, but pretty bad. At least he had the Soviets and the Arms Race as an excuse. It took a more rabid Republican Congress and a Democratic president running right to dig us out of the Reagan-Bush deficits the first time.

(For another response to Continetti’s establishment thinking, read a voice of Reason.)

Austerity is Not a Four-Letter Word

No, this time we’re going to have to abandon the Largess Fallacy totally and utterly. We’re going to have to embrace both fiscal austerity and lower taxes, as well as an informed belief that the renewal of the private sector is the answer to our economic woes. Absent gridlock, the party in power is going to have to put their tea bags on the table. For if they don’t, we’ll just be spending ourselves into becoming a permanent wasteland. The decline of the Republic will be slow but inevitable. And a brave, new Special Interest State waits to take her place.

Max Borders is a writer living in Austin, Texas. He blogs at Ideas Matter.

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