News Flash: Free Things From Government Are Never Really Free

News Flash: Free Things From Government Are Never Really Free

by | Jul 9, 2023 | Opinion

By Dr. Thomas Patterson |

American school children are instructed that the late 19th century, the Gilded Age, was dominated by “robber barons” who made great fortunes creating monopolies that exploited the poor and middle classes.

Howard Zinn‘s best-selling textbook, which introduced generations of Americans to their own history, informed them that “ordinary people who lived through the Gilded Age… experienced tremendous hardships and losses… While they got poor, the rich were getting richer.” Another noted economist concurred that “the poor grew helpless, the middle class got swept away.”

But let’s look again. In fact, by the numbers, it was a golden age for American workers.

As Phil Gramm and Amity Shlaes documented in the Wall Street Journal, between 1870 and 1900, the national GNP rose 233%, per capita GNP surged by 90%, and wages increased 53%, all inflation adjusted. Meanwhile, food costs and other necessities fell by 70%. Better yet, the illiteracy rate fell by 46%, life expectancy rose12.5%, and infant mortality declined by 17%. The people did OK when government stayed on the sidelines.

But Americans, then as now, misread their history and so were doomed to repeat it. Modern progressivism was born in response to the purported outrages of the plutocrats. Government controls stifled economic growth and innovation. Later, big government was credited by many with pulling us out of the depression.

By the 1970s, the damaging effects of the dead hand of government were so obvious that Ted Kennedy and Jimmy Carter led a massive deregulation movement – airlines, communications, energy, and other sectors – that ushered in the tech revolution and renewed prosperity.

But the tendency to regard socialistic policies as inherently good is so ingrained in human nature that once again we have already forgotten the lessons learned. Now the Biden administration is creating a new industrial policy in which government handouts are lavishly dispensed but conditioned on compliance with progressive mandates.

For example, America’s semiconductor chip producers scored a $280 billion subsidy recently, on the grounds that their sector was ailing financially, and its health was so important to the economy generally, that it was, you know, too big to fail. Commerce secretary Gina Raimondo was very explicit about the strings attached, “if Congress wasn’t going to do what they should’ve done [in the Build Back Better bill], we’re going to do it in the implementation.”

She meant it. For starters, chipmakers receiving $150 million or more in federal aid will be required to provide childcare to their employees and construction workers that has been crafted in “tandem with community stakeholders including…local groups with expertise in administering childcare” (i.e., lefty nonprofits).

Chipmakers will also have to pay construction workers prevailing wages set by unions and abide by “project labor agreements” which allow unions to mandate conditions and benefits for all workers, union members or not.

That’s not all. The “lucky” chipmakers must also provide “paid leave and caregiving support” to employees as well as wraparound services such as adult care, transportation, and housing assistance to the disadvantaged or underserved.

Centralized economic planning is once again butting up against economic reality. Chip manufacturers have already been transferring production overseas because costs are 40% higher stateside. Any benefit from the subsidies will be so offset by the increased costs that the net profit may be questionable.

Still, other industries are eagerly lining up for their government handouts. In their ceaseless efforts to socialize their losses while retaining profits to themselves, banks lobbied the FDIC to guarantee uninsured deposits without limit after the recent midsize bank collapses. Broadband providers received tens of billions in grants from states to build high-speed broadband to subsidize low-income purchases of Internet service plans.

Years ago, EV producers received temporary subsidies as start-up inducers, which, of course, aren’t going away at all. They just keep expanding, like $523 billion over 10 years for vehicle consumer and battery production tax credits.

As the chipmakers are discovering, the effect of all this free stuff from government is to make big businesses the compliant wards of the state. Thus, the administration imposes a cradle-to- grave welfare system through centralized industrial policy, while unconstitutionally usurping congressional authority in the bargain.

It’s the path to nowhere – again.

Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.

Strong Families for All Are Worth Defending

Strong Families for All Are Worth Defending

by | Jun 24, 2022 | Opinion

By Dr. Thomas Patterson |

In 1965, Daniel Patrick Moynihan wrote a landmark report in which he contended that the rising number of black families headed by unmarried mothers would reduce the prospects for Blacks to rise out of poverty, in spite of that era’s landmark civil rights legislation.

Moynihan was furiously denounced for his efforts. But he was proven right, and he would be even more correct making the same observations today.

It’s been a tough half century for families. Although Moynihan focused his concerns on Blacks, family breakdown correlates as much with income level as it does with race.

Because there are more low-income Blacks, more black children are raised by single mothers, but the overall percentage of births to unmarried women has gone from 5% in 1960 to 40% today. In 1970, 84% of U.S. children spent their entire childhood with both biological parents. Today, about half do.

Partly because of the withering criticisms directed at Moynihan, the chattering classes have mostly avoided the issue of family deterioration, at least until recently. But the consequences have been enormous.

Harvard economist Raj Chetty analyzed the causes of income disparity and concluded that “the strongest and most robust predictor is the fraction of children with single parents.”

In fact, there is scant evidence that race or racial discrimination causes the multiple economic and societal problems associated with family breakdown. Government spending doesn’t seem to have any effect, nor even does education explain the income gap. It’s family status itself.

So, what caused families, long our core civic institution and the means for passing on our values, to falter? There’s no easy answer, of course, but scholars note a sea change in our views of almost everything that began about the middle of the last century.

Especially in developed countries, people became more anti-authoritarian and more critical of traditional rules and roles. Views about sex outside of marriage, divorce, cohabitation, and single parenthood significantly changed.

It wasn’t all bad. Many of the changes extended civil rights and created a fairer society. But some of the “progress” has been tough on the kids.

For example, it’s not judgmental, just descriptive, to note that the increase in cohabitation has resulted in more unstable family structures.

Even with children, cohabiting couples break up faster and more often than married couples. Unmarried fathers are even less likely than divorced dads to form lasting bonds with their children. What may appear to be simply a matter of documentation can have a profound impact on the well-being of children.

Changing mores regarding sex before marriage has resulted in millions of young women bearing children for which they have made no financial or other preparations.

It’s not judging. It is the essence of caring for each of us to do a better job of informing these potential mothers of the catastrophic lifelong consequences of their casual decisions, both on themselves and the new life they are bringing into the world. We should also do a better job of making unwed fathers, many of whom openly boast about the children they are not raising, accountable for the consequences of their actions.

As Ronald Reagan might say, government is not the solution to this problem. It is the problem. There’s no question that the Great Society welfare rules, requiring recipients to be unmarried and unemployed to qualify for benefits, led to countless women making the sensible decision to “marry the government” rather than the uneducated, undependable father.

Government has also mortally harmed families by taking over many of their traditional functions, especially care of the young and the aged. Families traditionally stayed together to assure that those unable to provide for themselves would be sustained.

Today, it is assumed that the elderly are entitled to be cared for by the government. Some adults are known to simply walk away from their families because they don’t see the need.

We need sound strong families for all Americans, not only the wealthy and privileged. It would help if government did less harm. But we need to do a better job of protecting and prioritizing our families, respecting the outsized role they play in making our country strong and our lives worthwhile.

Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.