After all, we’ve been enacting plans to control spending and balance the budget for generations. One of the first efforts was the 1974 Budget and Impoundment Control Act passed in the Nixon administration.  Then we had the Gramm-Rudman-Hollings Act, signed into law by President Reagan in 1985. A few years later, in 1994, feisty Republicans took over both houses of Congress and provoked a government shutdown in the crusade for fiscal responsibility.

The lesson of history, then, is that you can’t cut spending by trying to cut spending. It’s a hard point for budget makers to digest, because it seems to defy the rules of arithmetic. Well, when it comes to national budgeting, these rules don’t apply. What matters are the rules of political perception.

Most Americans perceive that government is an effective provider of valuable services. They see it as a super store that supplies education, medical care, retirement income, housing, assistance to the needy, safe drugs, safe foods, scientific research, and so forth. That’s why spending cuts can never be more than temporarily effective. As soon as the specifics of the cutting become apparent, the public will be reminded how very much it likes government programs. As people learn about the autistic child who will be left unassisted, the hospital that will close, and the food inspectors who will be laid off,  the public clamors to fund these functions, and the campaign to cut spending falters. We’ve been through this cycle many times.

The lesson is clear: The real cause of red ink is the widespread belief that government programs are effective responses to national needs.  If you don’t counter this belief, you can never really cut government spending.

Faith in Government

Where does this confidence in government come from?  One possible answer is that it is based on reality and that we have numerous careful, unbiased, scientific studies that prove government is a cost-effective provider of services.

There are several difficulties with this position. The first problem is there are no such studies. There are studies that purport to evaluate government programs, but they never include all the overhead costs. By my count, there are 14 overhead costs in the typical government transfer program, seven involving taxation and seven involving disbursement. Such cost-benefit studies as have been done include, at best, only three or four of these costs. The reason why evaluations of government action are shallow and incomplete is the bias of the researchers. Before they attempt their study they already believe government action is beneficial. In other words, the cart—the belief that government is effective—comes before the horse—the evidence that it is.

Historically, too, confidence in government has preceded the evidence that might justify such confidence. The modern faith in government as a problem-solving machine emerged in the late nineteenth century, decades before any interventionist policies had been attempted. For example, in 1888 Edward Bellamy published a hugely successful utopian novella, Looking Backward, which posited a federal government in charge of everything, and solving all problems of poverty, unemployment, old-age assistance, and so on. Bellamy and the thousands who formed “Bellamy Clubs” all around the nation had no way of knowing if government programs in these spheres would be cost-effective solutions. They took it on faith.

The belief in government efficacy is not empirically based. It is the product of illusions. When they first notice government, children tend to see it as a super-parent, an authority figure that has many virtues — including great wealth, foresight, objectivity, and maturity — and is without ugly vices such as selfishness, irresponsibility, callousness, and a tendency to violence. This benign impression forms the basis of the popular view of government. Over time, as the result of actual experience with government, people begin to overcome this naïve faith, but in most cases they do not move far beyond the child’s view. They continue to see government as a machine that can fix everything — if only the right people are put in charge. Telling a public with this naïve confidence that spending should be cut is like trying to tell a child that a birthday cake should not be eaten: It has no understanding of, or sympathy for, the recommendation.

Toward a Solution

To restrain spending, therefore, one needs techniques that counteract the mistaken, illusion-based view of government. These measures will not resemble traditional spending reforms. They will not be laws that address the amount of spending. Instead, they will address the perceptions underlying spending, since once those attitudes are corrected, the pressure for spending will abate. To illustrate this approach, consider the simple idea of reminding people where government money comes from.

One misunderstanding that gives the public a false view of government is the philanthropic illusion. This is the idea that government has money, that it is like a wealthy philanthropist with extra cash to give to needy people and worthy causes. In fact government has no money of its own. The money that it spends has to be first taken away from taxpayers, and if you do the arithmetic carefully, tracing out all the indirect and shifted burdens of taxation, you will discover that everyone is a taxpayer. Therefore, to get money for its spending programs, government inflicts privation on everyone, including low-wage workers, college students, the homeless, and so on, and it drains resources from vital activities like technological innovation, medical care, job creation, and so forth.

Declaration of Gratitude

Under the spell of the philanthropic illusion, politicians and the public downplay or forget the harm and injury of taxation. A simple device that will help counteract this myopia is the “Declaration of Gratitude.” Everyone who receives government money would be required to sign this statement:

I realize that the funds I am about to receive come from the nation’s taxpayers, and I am grateful for the sacrifices they are making on my behalf.

Its administration is simple. When you fill out the paperwork for any government grant, subsidy, or payment, you also must sign the statement, whatever the benefit: food stamps, cotton subsidy, small business loan, government paycheck, research grant.

In monetary terms, signing this statement doesn’t change anything: Everyone gets whatever government dollars he was going to get. No one can be accused of starving grandma. What it does do is change the psychological climate. It destroys the assumption that government spending harms no one. This frank reality is covered up today. Take the Earned Income Tax Credit. This is a $50 billion welfare program, yet the people receiving this benefit call it a “tax refund” when they get their check. Most of them have no idea that this is a subsidy paid for by taxpayers. Well, if they had to sign the Declaration of Gratitude, they would know.

There is likely to be a lot of resistance to the Declaration of Gratitude idea. Most Americans seem to feel themselves “entitled” to whatever government funds they get, and are loathe to recognize their dependent status. This entitlement mentality produces the bizarre contradiction of a country with a national debt of $15,000,000,000,000 whose citizens believe they are paying their own way.

But resistance or no, reforms that change the perceptual climate are essential for national economic health.  Sound fiscal policy will not be achieved until the public attains a disillusioned view of government.

I’m afraid it was an unrealistic hope. You can say many good things about the Founding Fathers, but these gentlemen fell short in one critical way: The Constitution they drafted contains no significant intellectual impediment to the endless growth of government; that is, it does not explain what’s wrong with too much government. If anything, it goes in the opposite direction, inviting politicians to use the federal government to address everything. This invitation stands in the preamble, where after noting government’s obvious jobs—“establish Justice” (a court system), “insure domestic Tranquility” (armed forces to put down riots), “provide for the common defence” (armed forces to take care of foreign invaders)—the drafters added that government’s function was also “to promote the general Welfare.”

This phraseology may not have had much importance in 1787, when communication about national issues was limited. In modern times, however, the mass media turn every human need into a national problem that can be said to affect the general welfare: unemployment, wages and working conditions, medical care, education, food production, science, natural disasters, and so on. Following the lead of the preamble, lawmakers feel justified in using government to address every one. The result is a big and ever-growing government.

What Else Is There?

What’s the way to stop this drift? For the answer, we need to examine the logic that drives governmental growth. The modern argument for government involvement looks like this:

1. Problem X affects the general welfare;

2. Government is the only institution that can address national problems;

3. Therefore, government has to address X.

Notice how the argument depends on statement 2, that government is the only answer. If you accept that assumption, then you are pretty much bound to agree that government has to be involved. Not to agree makes you look cruel and insensitive, unwilling to fix the nation’s problems. And it doesn’t matter how badly government has performed in the past. Those urging more government concede that government is wasteful, often inept, and corrupted by special interests. But that doesn’t affect their position. “We’ve got to do something,” they say. “After all, what else is there?”

Well there is something else, but we often overlook it because it’s not big, imposing, and centralized like government. It’s the millions of independent thinkers and doers who each day strive to make the world around them a better place, working individually, and joining together with friends and neighbors, in groups, churches, associations, and businesses. We can call this problem-solving system the private sector, or civil society, or the voluntary sector.

Although we often don’t stop to realize it, this collection of independent actors is working to address just about every national problem you can think of. Take disaster relief. On this subject standard political logic has taken us to a big-government solution. Hurricanes and earthquakes certainly affect the general welfare; therefore, we say, government must step in. So we end up with the Federal Emergency Management Agency. Many agree that this massive bureaucracy is inept and wasteful, but if you suggest closing it down people say, “We have to have it. When disaster strikes, we can’t just sit by and do nothing.” That’s the fallacy of assuming only government can solve problems.

When disaster strikes, the fact is that millions of individuals react in constructive ways. The people immediately affected do much to take care of themselves and their families. Neighbors pitch in to help neighbors. Businesses sell—or donate—needed supplies. Churches send aid and volunteers. Voluntary groups in other regions take up collections and send supplies. Businesses rebuild. Philanthropists support reconstruction projects. This vast multitude of helping hands is a disaster-relief system. The same is true for other problems: education, working conditions, medical care, and so on. The private sector can and does address all of these issues.

Its biggest enemy, the entity standing in the way of this vital, intricate system of private, voluntary action is . . . government! It undermines the private sector in three ways:

1. Resources. Government’s taxation drains wealth from the private sector. Every dollar government puts into its programs comes, directly or indirectly, from individuals, businesses, and groups that would have used their resources to do what the government agencies try to do.

2. Regulations. Government’s rules and regulations are, like taxation, a burden on the private sector. Every minute someone spends filling out a government form is a minute he cannot use to help a neighbor.

3. Motivation. Private action is prompted by the belief that we make a difference. When people assume government is supposed to solve problems, it weakens their motivation to help themselves, and it weakens their inclination to reach out and solve problems in their communities.

In conclusion, if the Founding Fathers had wanted to block the drift toward big government, they should have written a preamble that extolled the virtue of the private sector, perhaps like this:

We the people of the United States of America,

recognizing—

That the general welfare is promoted by individuals, families, neighbors, and societies freely striving to improve the condition of mankind,

And further recognizing—

That government action often counteracts their independent, creative activities;

Do hereby establish a government which shall establish Justice, insure domestic Tranquility, and provide for the common defence.

I’m afraid it was an unrealistic hope. You can say many good things about the Founding Fathers, but these gentlemen fell short in one, critical way: The Constitution they drafted contains no significant intellectual impediment to the endless growth of government; that is, it does not explain what’s wrong with too much government. If anything, it goes in the opposite direction, inviting politicians to use the federal government to address everything. This invitation stands in the preamble, where after noting government’s obvious jobs — “establish Justice” (a court system), “insure domestic Tranquility” (armed forces to put down riots), “provide for the common defence” (armed forces to take care of foreign invaders) — the drafters added that government’s function was also “to promote the general Welfare.”

This phraseology may not have had much importance in 1787, when communication about national issues was limited. In modern times, however, the mass media turn every human need into a national problem that can be said to affect the general welfare:  unemployment, wages and working conditions, medical care, education, food production, science, natural disasters, and so on. Following the lead of the preamble, lawmakers feel justified in using government to address every one. The result is a big and ever-growing government.

“What Else Is There?”

What’s the way to stop this drift? For the answer, we need to examine the logic that drives governmental growth. The modern argument for government involvement looks like this:

1. Problem X affects the general welfare;

2. Government is the only institution that can address national problems;

3. Therefore, government has to step in and address X.

Notice how the argument depends on statement 2, that government is the only answer. If you accept that assumption, then you are pretty much bound to agree that government has to be involved. Not to agree makes you look cruel and insensitive, unwilling to fix the nation’s problems. And it doesn’t matter how badly government has performed in the past. Those urging more government concede that government is wasteful, often inept, and corrupted by special interests. But that doesn’t affect their position.  “We’ve got to do something,” they say. “After all, what else is there?”

Well there is something else, but we often overlook it because it’s not big, imposing, and centralized like government. It’s the millions of independent thinkers and doers who each day strive to make the world around them a better place, working individually, and joining together with friends and neighbors, in groups, churches, associations, and businesses. We can call this problem-solving system the private sector, or civil society, or the voluntary sector.

Although we often don’t stop to realize it, this collection of independent actors is working to address just about every national problem you can think of. Take disaster relief. On this subject standard political logic has taken us to a big-government solution. Hurricanes and earthquakes certainly affect the general welfare; therefore, we say, government must step in. So we end up with the Federal Emergency Management Agency. Many agree that this massive bureaucracy is inept and wasteful, but if you suggest closing it down people say, “We have to have it. When disaster strikes, we can’t just sit by and do nothing.” That’s the fallacy of assuming only government can solve problems.

When disaster strikes, the fact is that millions of individuals react in constructive ways. The people immediately affected do much to take care of themselves and their families. Neighbors pitch in to help neighbors. Businesses sell — or donate — needed supplies. Churches send aid and volunteers. Voluntary groups in other regions take up collections and send supplies. Businesses rebuild. Philanthropists support reconstruction projects. This vast multitude of helping hands is a disaster-relief system. The same is true for other problems: education, working conditions, medical care, and so on. The private sector can and does address all of these issues.

It’s biggest enemy, the institution standing in the way of this vital, intricate system of private, voluntary action is. . . government! It undermines the private sector in three ways:

1. Resources. Government’s taxation drains wealth from the private sector. Every dollar government puts into its programs comes, directly or indirectly, from individuals, businesses, and groups that would have used their resources to do what the government agencies try to do.

2. Regulations. Government’s rules and regulations are, like taxation, a burden on the private sector. Every minute someone spends filling out a government form is a minute he cannot use to help a neighbor.

3. Motivation. Private action is prompted by the belief that we make a difference. When people assume government is supposed to solve problems, it weakens their motive to help themselves, and it weakens their inclination to reach out and solve problems in their community.

In conclusion, if the Founding Fathers had wanted to block the drift toward big government, they should have written a preamble that extolled the virtue of the private sector, perhaps like this:

We the people of the United States of America, recognizing—

That the general welfare is promoted by individuals, families, neighbors, and societies

freely striving to improve the condition of mankind,

And further recognizing—

That government action often counteracts their independent, creative activities;

Do hereby establish a government which shall establish Justice, insure domestic Tranquility, and provide for the common defence.

“Let me try a green one,” he says. We’re still tolerant. The new wand is waved. Afterward dear George is decidedly worse.

“Let me think,” the healer says. “Maybe it should be a purple wand and a different chant.”

For 98 years the federal government has been attempting to prevent asset bubbles, recessions, and spasms of unemployment. In 1913 Congress and Woodrow Wilson created the Federal Reserve System, the President telling the country this new institution would be “a safeguard against business depressions.” In 1929, after 15 years of Fed operations, the United States plunged into a deep depression.

Okay, so maybe red wands don’t work, and we should try green. Politicians of the 1930s created more bodies designed to stabilize the economy and build investor confidence: the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the Securities and Exchange Commission, and the National Credit Union Administration. The Depression deepened, becoming by far the longest and deepest economic downturn in the history of the United States.

This is the national pattern in economic policy: In the face of failure, we keep looking to government. Since the Great Depression, we’ve added more units designed to curb inappropriate behavior and ward off recession, including the Commodity Futures Trading Commission (1974), the Federal Financial Institutions Examination Council (1979), the Working Group on Financial Markets (1988), and the Office of Thrift Supervision (1989). Yet in 2008 we fell into another economic downturn.

The 2008 recession was triggered by the boom and bust in the housing market. Was housing an unregulated market where government had failed to intervene? Sorry: There were seven agencies supposedly nurturing this industry:

1. Federal Housing Administration (1934)
2. Federal National Mortgage Association (Fannie Mae) (1938)
3. Government National Mortgage Association (Ginnie Mae) (1968)
4. Federal Home Loan Mortgage Corporation (Freddie Mac) (1970)
5. Neighborhood Reinvestment Corporation (1978)
6. Federal Housing Finance Board (1989)
7. Office of Federal Housing Enterprise Oversight (1992)

In sum, at the onset of the 2008 recession there were 16 units of the federal government that were supposed to manage economic life and keep us from harm, yet harm befell us. No wand-waving faith healer has ever failed so conspicuously.

Alas, economic policy is not a drug trial; it is politics, and politics is ruled by illusions. In June 2009 we found President Barack Obama urging the creation of yet more government units to manage the economy, promising that his reforms would “make sure that these problems are dealt with so that we’re preventing crises in the future.”

We can’t be too critical of Obama, because many others share this confidence in government regulation. “Without intervention by the government,” say economists George Akerlof and Robert Shiller in their 2009 book Animal Spirits, “the economy will suffer massive swings in employment. And financial markets will, from time to time, fall into chaos.” It’s astounding to assert that government can prevent crises, recessions, and “swings in unemployment” while being fully aware that for 98 years it has been trying and failing.

Not Learning from Experience

A powerful subconscious bias is obviously at work here, a mental distortion that prevents normal, intelligent people from being able to learn from experience. I call it the watchful-eye illusion: the idea that government has greater knowledge and wisdom than the public. In extreme form this illusion treats government as God, a superior being who surveys the scene from His Olympian position, controlling error and wrongdoing. Once this illusion is locked into your thinking, you remain convinced, despite any amount of failure, that government has the ability to do things right next time.

It appears that this fallacy begins in childhood. Youngsters see that their lives are guided by people who are more thoughtful and mature than they are: their parents. If they challenge the parents—asking, in effect, what gives you the right to make rules over me?—the parents say they know more. When children first learn about government, they see it as a super authority ten times more powerful than parents. Naturally, they assume it must have ten times their parents’ wisdom and foresight.

Many do not outgrow this perspective; they carry into adulthood the idea that government is a superparent. Economists Akerlof and Shiller accept this view, declaring that it forms the core of Keynesian economics:

The proper role of the parent is to set the limits so that the child does not overindulge her animal spirits. But those limits should also allow the child independence to learn and to be creative. The role of the parent is to create a happy home, which gives the child freedom but also protects him from his animal spirits.

This happy home corresponds exactly to Keynes’ position (and also our own) regarding the proper role of government.

Ordinary Beings

There are two fallacies in the Keynesian view that government can be a “parent” watchfully guarding over the national economy. First, the politicians who run government don’t have superior wisdom and maturity. Government officials are ordinary, fallible human beings. They can be careless, inattentive, and shallow. They can be swayed by emotion. And sometimes they can be dishonest and corrupt.

The second fallacy is that the public is an ignorant child. The economy’s millions of individual businessmen and investors have, collectively, vast wisdom about economic possibilities and trends. These individuals pour their knowledge into their market behavior, thereby setting the prices of assets, goods, and services. Left free to suffer the consequences of their decisions, investors and entrepreneurs will develop systems for managing risk and for evaluating the validity of investments. These systems won’t be perfect, of course: There will be errors, bubbles, and frauds. But from these errors, the community learns to improve decisions in the future.

This system of social learning is short-circuited by government intervention, with its subsidies, bailouts, changing rules, and false promises to protect everyone. In truth, the greatest long-run threat to the health of the economy is the chaotic meddling of eager politicians whose intellectual powers have been so naively overrated by academic economists.

“Let me try a green one,” he says.  We’re still tolerant. The new wand is waved:  afterwards, dear George is decidedly worse.

“Let me think,” the healer says. “Maybe it should be a purple wand and a different chant.”

For 98 years the federal government has been attempting to prevent asset bubbles, recessions, and spasms of unemployment. In 1913, Woodrow Wilson created the Federal Reserve System, telling the country that this new institution would be “a safeguard against business depressions.” In 1929, with the Fed in operation for 15 years, the United States plunged into a deep depression.

Okay, so maybe red wands don’t work, and we should try green. Politicians of the 1930s created more bodies designed to stabilize the economy and build investor confidence:  the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the Securities and Exchange Commission, and the National Credit Union Administration. The Depression deepened, becoming by far the longest and deepest economic downturn in the history of the United States.

This is the national pattern in economic policy: in the face of failure, we keep looking to government. Since the Great Depression, we’ve added more units designed to curb inappropriate behavior and ward off recession, including the Commodity Futures Trading Commission (1974), the Federal Financial Institutions Examination Council (1979), the Working Group on Financial Markets (1988), and the Office of Thrift Supervision (1989). Yet in 2008 we fell into another economic downturn.

This 2008 recession was triggered by the boom and bust in the housing market. Was housing an unregulated market where government had failed to intervene? Sorry: There were seven agencies supposedly nurturing this industry:

1. Federal Housing Administration (1934)

2. Federal National Mortgage Association (Fannie Mae) (1938)

3. Government National Mortgage Association (Ginnie Mae) (1968)

4. Federal Home Loan Mortgage Corporation (Freddie Mac) (1970)

5. Neighborhood Reinvestment Corporation (1978)

6. Federal Housing Finance Board (1989)

7. Office of Federal Housing Enterprise Oversight (1992)

In sum, at the onset of the 2008 recession there were 16 units of the federal government that were supposed to manage economic life and keep us from harm, yet harm befell us. No wand-waving faith healer has ever failed so conspicuously.

Ruled by Illusions

Alas, economic policy is not a drug trial; it is politics, and politics is ruled by illusions. In June 2009 we find President Barack Obama urging the creation of yet more government units to manage the economy, promising that his reforms will “make sure that these problems are dealt with so that we’re preventing crises in the future.”

We can’t be too critical of Obama, because many others share this confidence in government regulation. “Without intervention by the government,” say economists George Akerlof and Robert Shiller in their 2009 book Animal Spirits, “the economy will suffer massive swings in employment. And financial markets will, from time to time, fall into chaos.”  It’s astounding to assert that government can prevent crises, recessions, and “swings in unemployment” while being fully aware that for 98 years it has been trying to do it and failing.

A powerful subconscious bias is obviously at work here, a mental distortion that prevents normal, intelligent people from being able to learn from experience. I call it the watchful-eye illusion: the idea that government has greater knowledge and wisdom than the public. In extreme form this illusion treats government as God, as a superior being, who, from His Olympian position, surveys the scene and controls error and wrongdoing. Once this illusion is locked into your thinking, you remain convinced, despite any amount of failure, that government has the ability to do things right next time.

It appears that this fallacy begins in childhood. Youngsters see that their lives are guided by people who are more thoughtful and mature than they are: their parents. If they challenge the parents — asking, in effect, what gives you the right to make rules over me? — the parents say they know more. When children first learn about government, they see it as a super authority ten times more powerful than parents. Naturally, they assume it must have ten times their parents’ wisdom and foresight.

Many do not outgrow this perspective; they carry into adulthood the idea that government is a super-parent. Economists Akerlof and Shiller accept this view, declaring that it forms the core of Keynesian economics:

The proper role of the parent is to set the limits so that the child does not overindulge her animal spirits. But those limits should also allow the child independence to learn and to be creative. The role of the parent is to create a happy home, which gives the child freedom but also protects him from his animal spirits. This happy home corresponds exactly to Keynes’s position (and also our own) regarding the proper role of government.

Ordinary Beings

There are two fallacies in the Keynesian view that government can be a “parent” watchfully guarding over the national economy. First, the politicians who run government don’t have superior wisdom and maturity. Government officials are ordinary fallible human beings. They can be careless, inattentive, and shallow. They can be swayed by emotion. And sometimes they can be dishonest and corrupt.

The second fallacy is that the public is not an ignorant child. The economy’s millions of individual businessmen and investors have, collectively, vast wisdom about economic possibilities and trends. These individuals pour their knowledge into their market behavior, thereby setting the prices of assets, goods, and services. Left free to suffer the consequences of their decisions, investors and entrepreneurs will develop systems for managing risk and for evaluating the validity of investments. These systems won’t be perfect, of course: There will be errors, bubbles, and frauds, but from these errors, the community learns to improve decisions in the future.

This system of social learning is short-circuited by government intervention, with its subsidies, bailouts, changing rules, and false promises to protect everyone. In truth, the greatest long-run threat to the health of the economy is the chaotic meddling of eager politicians whose intellectual powers have been so naively overrated by academic economists.

The problem with this view is that “government” is an abstraction. In practice everything done in the name of government is done by government employees, ordinary human beings who can be, well, as fallible as anyone. To support this point we need only look at one of the cases Fahrenthold and Mui cited in buttressing their idea that government needs to protect us: the careless spraying of insecticides like DDT.

In the 1950s airplanes flew over swamps and suburbs, fields and forests, drenching everyone and everything with a rain of DDT and other insecticides. It was a triple fiasco: 1) it failed to control the target insect pests (such as the spruce budworm, the imported fire ant, and the gypsy moth, among others); 2) it cost a lot of money; and 3) the spraying slaughtered living things on a vast scale. It killed some farm and domestic animals; it killed hundreds of species of beneficial insects and nematodes; and it killed wildlife, including foxes, raccoons, rabbits, fish, and birds, turning affected areas into—in the eyes of a sensitive environmentalist—an eerie wasteland.

Who carried out this irresponsible madness? Rachel Carson fingered the culprits in her celebrated 1962 book, Silent Spring. The point is often overlooked today, but Silent Spring was not so much a critique of pesticides but a condemnation of their irresponsible use. In case after case, the organizations that drenched land and wildlife with poisonous insecticides were . . . wait for it . . . government agencies! For example, in 1958 the U.S. Department of Agriculture launched a campaign to spray 20 million acres in nine southern states in an attempt to eradicate fire ants. The department won congressional approval for the program by making the unsupported assertion that fire ants were dangerous to livestock and crops, when in actuality, as Carson documented, they were no significant threat to either. The spraying did not control the fire ant, but it did cause massive kills of wildlife, especially fish and birds. The program was, said Carson, “an outstanding example of an ill-conceived, badly executed, and thoroughly detrimental experiment in the mass control of insects.”

In New York State the U.S. Department of Agriculture joined forces with the New York Department of Agriculture and Markets in a futile attempt to eradicate the gypsy moth. In 1957, Carson continued, they “showered down the prescribed DDT-in-fuel-oil with impartiality. They sprayed truck gardens and dairy farms, fish ponds and salt marshes. They sprayed the quarter-acre lots of suburbia, drenching a housewife making a desperate effort to cover her garden before the roaring plane reached her. . . . Birds, fish, crabs, and useful insects were killed.”

In Michigan, in an attempt to control the Japanese beetle, government agencies joined forces to dust the suburbs of Detroit with aldrin, a pesticide 100 times more toxic to birds than DDT. The first offender in this debacle was the Michigan state legislature, which gave state agencies the power to spray indiscriminately, without notifying landowners or gaining their permission. The spraying was carried out by the Michigan Department of Agriculture, backed by the pesticide-tropic U.S. Department of Agriculture. When worried citizens reported dead birds and sickened humans and animals, Carson reports, government agencies stonewalled. The Federal Aviation Agency, the Detroit Department of Parks, and the Detroit police all vouched for the safety of the operation even though they had no evidence on the point.

Silent Spring—the gospel of the environmental movement—abundantly demonstrates that government can be an irresponsible, insensitive polluter. This raises an interesting question: Why has this point been forgotten?

My explanation of this blindness is that these reporters—and environmental activists in general—are victims of the “watchful eye illusion.” Human beings have a disposition to believe in authority and to ascribe godlike wisdom and maturity to it. This orientation probably begins in childhood when parents are viewed as wise and capable. As children grow up, many transfer this faith in authority to government, producing the watchful eye illusion: the belief that government is wise and responsible. This illusion will lead people to forget about—or repress—all the evidence demonstrating that government officials are often unwise and irresponsible.

The 1950s spraying scandal hasn’t been government’s only environmental miscue. For another, look at the Hanford Nuclear Reservation in the state of Washington, where the federal government’s radioactive spills are now expected to cost taxpayers $50 billion to clean up. In just one type of pollution at that site, the feds deliberately vented 725,000 curies of radioactive iodine-131. This was over 36,000 times as much radioactivity as was released in the 1979 Three Mile Island accident in which naughty private interests were supposedly “taking risks in search of a payoff.”

Just as government can be an irresponsible polluter, it can also be an ineffective regulator. Many people don’t grasp this reality because, again, they are blinded by their faith in authority. With naive confidence, they propose, for example, that “government should regulate oil drilling,” thinking that this will prevent oil spills. If they could overcome the watchful eye illusion they would realize that they need to put their proposal more carefully: “Assuming that the government employees doing the regulating are alert, thoughtful, energetic, and responsible, and never lazy, complacent, uninformed, irrational, careless, corrupt, or paralyzed by red tape, government should regulate oil drilling.” Thus stripped of illusion, the idea that government can protect the environment loses much of its luster.

In the final analysis, overcoming environmental abuse is not likely to be achieved by governmental dictation. Instead, it is a process of social learning that includes everyone: friends and neighbors, reporters, pamphleteers, teachers, researchers—and companies too, as they discover how pollution hurts their image and their bottom line.

The problem with this view is that “government” is an abstraction. In practice everything done in the name of government is done by government employees, ordinary human beings who can be, well, as fallible as anyone. To support this point we need only look at one of the cases Fahrenthold and Mui cited in buttressing their idea that government needs to protect us: the careless spraying of insecticides like DDT.

In the 1950s airplanes flew over swamps and suburbs, fields and forests, drenching everyone and everything with a rain of DDT and other insecticides. It was a triple fiasco: 1) it failed to control the target insect pests (such as the spruce budworm, the imported fire ant, and the gypsy moth, among others); 2) it cost a lot of money; and 3) the spraying slaughtered living things on a vast scale. It killed farm and domestic animals including cows, pigs, chickens, dogs, cats, and honey bees; it killed hundreds of species of beneficial insects and nematodes; and it killed wildlife, including foxes, raccoons, rabbits, fish, and, especially, birds — thus turning the affected areas into an eerie wasteland devoid of bird songs.

Who’s Responsible?

Who carried out this irresponsible madness? The culprits were identified by Rachel Carson in her celebrated 1962 book, Silent Spring. In case after case, the organizations that drenched land and wildlife with poisonous insecticides were …  government agencies! For example, in 1958 the U.S. Department of Agriculture launched a campaign to spray 20 million acres in nine southern states in an attempt to eradicate fire ants. The department won congressional approval for the program by making the unsupported assertion that fire ants were dangerous to livestock and crops, when in actuality, as Carson documented, they were no significant threat to either. The spraying did not control the fire ant, but it did cause massive kills of wildlife, especially fish and birds. The program was, said Carson, “an outstanding example of an ill-conceived, badly executed, and thoroughly detrimental experiment in the mass control of insects….”

In Montana in 1956 the U.S. Forest Service sprayed 900,000 acres of forest with DDT in an attempt to control the spruce budworm. After the sprayings, Carson wrote, along the streams biologists found a “characteristic pattern of death … an oil film on the water surface, dead trout along the shoreline.”

In New York State the U.S. Department of Agriculture joined forces with the New York Department of Agriculture and Markets in a futile attempt to eradicate the gypsy moth. In 1957, she continued, they “showered down the prescribed DDT-in-fuel-oil with impartiality. They sprayed truck gardens and dairy farms, fish ponds and salt marshes. They sprayed the quarter-acre lots of suburbia, drenching a housewife making a desperate effort to cover her garden before the roaring plane reached her…. Birds, fish, crabs, and useful insects were killed.”

In Michigan, in an attempt to control the Japanese beetle, government agencies joined forces to dust the suburbs of Detroit with aldrin, a pesticide 100 times more toxic to birds than DDT. The first offender in this debacle was the Michigan state legislature, which gave state agencies the power to spray indiscriminately, without notifying landowners or gaining their permission. The spraying was carried out by the Michigan Department of Agriculture, backed by the pesticide- tropic U.S. Department of Agriculture. When worried citizens reported dead birds and sickened humans and animals, Carson reports, government agencies stonewalled. The Federal Aviation Agency, the Detroit Department of Parks, and the Detroit police all vouched for the safety of the operation even though they had no evidence on the point.

Silent Spring — the gospel of the environmental movement — abundantly demonstrates that government can be an irresponsible, insensitive polluter. This raises an interesting question: Why has this point been forgotten? Post reporters Fahrenthold and Mui were so certain that government was the good guy in the DDT pesticide scandal that they didn’t even bother to check the point.

Watchful Eye Illusion

My explanation of this blindness is that these reporters — and environmental activists in general — are victims of the “watchful eye illusion.” Human beings have a disposition to believe in authority and to ascribe godlike wisdom and maturity to it. This orientation probably begins in childhood when parents are viewed as wise and capable. As children grow up, many transfer this faith in authority to government, producing the watchful eye illusion: the belief that government is wise and responsible. This illusion will lead people to forget about — or repress — all the evidence demonstrating that government officials are often unwise and irresponsible.

The 1950s spraying scandal hasn’t been government’s only environmental miscue. For another, look at the Hanford Nuclear Reservation in the state of Washington, where the federal government’s radioactive spills are now expected to cost taxpayers $50 billion to clean up. In just one type of pollution at that site, the feds deliberately vented 725,000 curies of radioactive iodine-131. This was over 36,000 times as much radioactivity as was released in the 1979 Three Mile Island accident where naughty private interests were supposedly “taking risks in search of a payoff.”

Just as government can be an irresponsible polluter, it can also be an ineffective regulator. Many people don’t grasp this reality because, again, they are blinded by their faith in authority. With naive confidence, they propose, for example, that “government should regulate oil drilling,” thinking that this will prevent oil spills. If they could overcome the watchful eye illusion they would realize that they need to put their proposal more carefully: “Assuming that the government employees doing the regulating are alert, thoughtful, energetic, and responsible, and never lazy, complacent, uninformed, irrational, careless, corrupt, or paralyzed by red tape, government should regulate oil drilling.” Thus stripped of illusion, the idea that government can protect the environment loses much of its luster.

In the final analysis, overcoming environmental abuse is not likely to be achieved by governmental dictation. Instead, it is a process of social learning that includes everyone: friends and neighbors, reporters, pamphleteers, teachers, researchers — and companies too, as they discover how pollution hurts their image and their bottom line.

How did this suburban forest come about? What preserves it year after year? Most people would see no mystery. Trees are pleasant. They make for nice neighborhoods and add to the value of property. Hence, builders have gone out of their way to preserve them, and homeowners have been inclined to protect them, and to plant more. You don’t have to force people to want trees: it happens automatically.

Alas, there is a certain kind of person—shall we call them busybodies?—who rejects this logic. To their way of thinking, people are too ignorant or too selfish to behave constructively. For any good thing to happen, or to continue to happen, they believe, it has to be mandated by a higher power. Take suburban trees. You and I may think that homeowners would take care of them without assistance, but the busybody has no such confidence in his fellow man. He fears that leafy suburbs would become Arabian deserts if people did what they wanted with their trees.

Takoma Park, one of the wealthy Maryland suburbs of Washington, is densely forested. It is also densely populated with busybodies fretting about the fate of local trees—and eager to meddle in their neighbors’ decisions about them. The product of this anxiety is a tree ordinance that makes it illegal for people to remove trees on their own property.

Alas, regulating trees is not as easy as it first appears. You can’t prohibit cutting down all trees, because there are some that have to be cut down. They are dying or dead, for example, or about to fall on a house, or their roots are heaving up foundations, sidewalks, or driveways. Since the homeowner isn’t allowed to decide when it is appropriate to cut down a tree, government must create the machinery, paperwork, and personnel to handle the decision.

Let’s follow the process in a case that was recounted in the Washington Post by reporter Phil McCombs last year. Takoma Park resident Ken Shields wanted to cut down a catalpa tree. The Shieldses are not pro-asphalt fascists. “I love trees,” Ken says. “My wife is a woodswoman and appreciates and adores trees.” But this particular tree needed to be cut down because its roots are tearing up his driveway and it blocks their vision when they back out of the driveway.

The first step was to call the city’s arborist, since under Takoma Park’s tree ordinance this official must approve any proposed tree removal. The arborist came out and, after inspection and consultation, gave Ken permission to apply for a tree-removal permit. Ken filed the application and paid the $25 fee. (He also agreed to pay an additional $257 fee if he failed to plant another tree to replace it). Then the application was posted in front of his house, inviting anyone to object to the removal of the tree. One person stepped forward. He was an employee of an environmental nonprofit organization who objected to cutting down the tree because, he said, he liked to walk past it on his way home from work.

So the dispute went to the city’s Tree Commission. The five-member commission heard testimony from all sides and, after long deliberation, decided the tree could not be cut down. The busybody smugly announced that his victory vindicated his collectivist ideology: “There is at least a communal, if not communitarian, aspect if one chooses to live here,” he told the reporter.

Someone’s Always Unhappy

It’s not clear, however, that giving strangers the power to mess up other people’s lives makes for happy communal life. Ken Shields, for one, is angry. “The more I thought about it the more it made my blood boil,” he said. “What I am not dealing with is how angry the whole process is making me.” Shields is not alone. Under the regulatory system in force, tree removal becomes an arena of continual conflict. “Sometimes people scream at me that someone’s taking down a tree,” says the city arborist. “Other times they scream at me because they’re not allowed to take a tree down.”

The many disputes about tree removal prompted the city council to hold hearings on a rewrite of the tree ordinance last year, but this produced only more dissension. Fearing that the ordinance was about to be gutted, the environmentalists came out to protest any relaxation in the rules. In the end, the council approved a ponderous revision that it claimed would be more “user friendly,” but which actually tightened regulation by including all trees over six inches in diameter in the regulation (down from 7 5/8 inches).

Those of us who fly into Reagan National have to be amused by all this struggling by the ant-like people below. We know that trees thrived in Takoma Park into the 1980s, before the city adopted a tree ordinance, and that they thrive apparently as well in neighboring jurisdictions that do not have tree ordinances. Tree regulation in Takoma Park, and all the costs, bureaucracy, infighting, and bitterness that come with it, have very little to do with the preservation of the urban forest. What it reflects is the human tendency toward intolerance and self-centeredness. Some people are not satisfied unless they can deny other people the freedom to make choices for themselves.

Dear Lawyer,

The following is a letter sent to A. J. De Bartolomeo of the San Francisco law firm of Girard Gibbs & De Bartolomeo on August 6, 2004, in connection with litigation against PayPal, the Internet payment company. The suit alleged that PayPal’s customers have been injured because PayPal “did not provide account statements in the manner required by the Electronic Fund Transfer Act.” PayPal denied wrongdoing, but to avoid the cost of litigation, it reached a settlement. It agreed to pay $9.25 million: the law firm gets $3.3 million, and each PayPal customer who joins the suit will get $50.*

Dear Mr. De Bartolomeo:
I am replying to your invitation to join, and cash in on, the class-action lawsuit you have filed against the PayPal company. Although I am an affected party and therefore eligible for money, of course I refuse to participate in the proposed settlement. Anyone with a sense of proportion and morality would refuse to be a part of it. When a private party demands money by threatening to use force we call it extortion. A lawsuit is a demand for money by threatening to use the physical force at the command of a court in the form of policemen and jails. It therefore borders on extortion, however legal it might be. To qualify as non-extortionary, a lawsuit needs to meet two criteria. First, the defendant should have inflicted an intentional, major injury on the plaintiff. In other words, the defendant has to do something he knew was very wrong, like deliberately driving a bulldozer into his house. If this condition isn’t met, the plaintiff’s lawyer is no better than a gangster holding a gun who says, “Give me ten G’s on account of you wrinkled my suit.”

This lawsuit does not meet this test. It does not allege, for example, that PayPal used violence against any of its customers, or that it deliberately defrauded them of their life savings. It says the company failed to implement certain government regulations. I’m sorry, but failing to follow a federal regulation hardly rates as a major wrong. Every American does it, and must do it to survive in our over-regulated society. As a satisfied PayPal customer, I am not aware I have suffered any injury as a result of PayPal’s failing to adhere to these regulations (which PayPal contends don’t even apply in its case). The fact that plaintiffs are to get only $50 each proves that this is a trivial “injury,” one that does not merit using the threatened violence of the state to redress. The second condition that distinguishes a legitimate lawsuit from extortion is that no one profits from the lawsuit beyond the amount necessary to make the wronged party financially whole. This suit does not meet this criterion. It does not indicate that plaintiffs suffered any monetary loss, certainly not the $9.25 million being awarded. They are just greedily cashing in. And so are you, Mr. DeBartolomeo, lining your own pockets with the obscene fee of $3.3 million.

It’s dismaying to think that any of my fellow Americans will join you in this deplorable racket.

Sincerely yours,
James L. Payne

]]> http://www.thefreemanonline.org/uncategorized/a-letter/feed/ 0 http://www.thefreemanonline.org/featured/are-welfare-state-orphans-in-good-hands/ http://www.thefreemanonline.org/featured/are-welfare-state-orphans-in-good-hands/#comments Thu, 20 May 2010 14:04:59 +0000 James L. Payne http://www.thefreemanonline.org/?p=9341722 On February 22, 2010, a court in suburban Washington, D.C., passed judgment in one of the most horrendous cases of child abuse in modern times. Renee Bowman, the adopting parent of three girls, had for years starved, neglected, and beaten them, while keeping them locked night and day in their bedroom. She choked two of the girls to death, put their bodies in plastic bags, and stored them in the freezer. The third girl escaped by jumping from a window.

At first glance, these child murders may seem an inexplicable, isolated tragedy; a closer look reveals that this outrage was constructed, piece by thoughtless piece, by the modern welfare state.

In It for the Money

The first error came with the selection of Bowman as the adoptive parent. She was obviously a negligent and seriously deranged person who never should have been approved for adoption. Well, who approved her? The adoption had been supervised from start to finish by a government agency, the District of Columbia’s Child and Family Services. In theory, it was supposed to establish that Renee Bowman was a suitable parent. In practice it didn’t even notice, or care, that she had a criminal record—she threatened a 72-year-old with bodily harm—a rather glaring instance of “government failure” by this notoriously incompetent agency.

The next link in the tragedy concerns Bowman’s motivation for adopting the children. If she did not love children, if she saw them as a burden, why had she bothered with the expense and effort of adopting them? The answer is money. In 1980 Congress approved a subsidy program to provide payments to parents who adopt children from foster care. I’m sure lawmakers thought it was a useful idea. If the federal government can buy tanks and bombs, after all, why can’t it buy adoptions?

Well, it does buy adoptions, but not high-quality ones. Worthy parents adopt out of love, conviction, enthusiasm, and dedication. They are willing to make real sacrifices for their children. Putting money on the table changes the mix of motivations. Yes, loving parents will still appear, but insensitive people who view children as an economic commodity also come forth. Renee Bowman was one of these insensitive, grasping types. She was being paid $2,400 a month by the federal government to be listed as the mother of these three girls; altogether she collected $152,000. “This woman was in it for the money,” said the prosecutor at the trial. “And by killing the children, keeping them literally on ice, the money continued to flow.”

Keeping Adoptions Low, Abuse High

Officials point out that without adoption subsidies to attract parents, children would languish in the state foster care systems. There’s some truth to this, but it exposes another flaw in the state system of handling orphans. A survey by the National Center for Health Statistics found there were nearly 600,000 women seeking to adopt children, a figure over four times the total of 129,000 children in foster care available for adoption. The oversupply of willing parents holds for all categories of children, including older children, black children, and children with disabilities. But under government management, adoption from foster care has become a tortuous, burdensome process demeaning to prospective parents. The government agencies are so focused on trying to apply a host of bureaucratic regulations that they repel many, especially independent-minded individuals critical of silly red tape and micromanagement. The result is that children remain stuck in foster care. Even so, hundreds of thousands of people would like to adopt them.

The severity of government impediments to adoption was documented by a study undertaken in 2005 by Listening to Parents, a nonprofit research group. It followed 1,000 prospective parents who called a public child-welfare agency seeking to adopt. Out of this initial group, only 36 adoptions occurred.

Having inadvertently contrived a deplorably low adoption rate, government sought to correct the problem by applying government’s inevitable fix-all: throwing more money at the problem, in the form of adoption subsidies. They created a situation of moral hazard where a person like Renee Bowman might adopt children primarily for the money, and, lacking love and a sense of responsibility, might neglect and abuse them.

Bowman’s was not an isolated case. Washington Post columnist Courtland Milloy reported in February 2009 that in the previous eight months at least seven adopted children in D. C. had been killed, their adoptive parents charged or suspected in the homicides. And those are just the murder cases—that we know about. Given the number of children in Washington, D.C.’s adoption subsidy program, it’s fair to wonder if neglect and abuse short of murder are far more widespread than anyone would like to imagine.

This brings us to the most shocking failure in this sorry episode. After the deadly consequences of the misguided adoption subsidy became screaming headlines, officials did nothing! They didn’t close down the program. They didn’t fire, fine, or imprison employees responsible for the miscues. They didn’t resign in shame and embarrassment. Jobs and careers depend on this program: It’s in officials’ economic self-interest to downplay its problems. The same is true of the pressure groups that represent parents taking the subsidy. Their attitude was captured by a Washington Post reporter: “Even with limited oversight, most children end up in safe and supportive families, advocates said.”

In the old days, before we got hardened to welfare-state abuses, we would have said that a system that resulted in even one murdered child was unacceptable. Today, the self-interested participants of the welfare state are content with a program where “most” of the children aren’t slain.

The solution to the travesties being committed by government child welfare agencies lies right before us: Move away from the welfare state as fast as we can. Turn the problems of orphans, foster care, and adoption back to private charitable and commercial entities, unsubsidized by tax money and largely unregulated.

Will errors occur in this voluntary system? Undoubtedly they will, but they wouldn’t be met with institutional shrugs of the shoulders. The voluntary system would have this advantage: If a private agency was implicated in a tragic malfunction, donors and customers would be free to turn away from it and the agency would disappear.