Arnold Kling  

The Light of Day?

Great Moments in Property Righ... Time Consistency in Bank Regul...

Not exactly. My op-ed was placed here, where it probably will get fewer readers than this blog post.

The public probably does not understand this budgetary legerdemain, but their instinct is to distrust Congress. In this case, the populist instinct is valid, and the elitist contempt for ordinary citizens is quite unjustified.

In fact, I believe that the elites have so mistreated the American people that we should declare that a state of war exists between America and Washington. Our goals in this war must go well beyond the repeal of this year's health care legislation.

Glenn Reynolds would correct me to say that they are not an elite--they are just a ruling class.

I wrote this before the memo got sent around telling everybody to tone down the militant, extremist rhetoric. Regardless, I do not intend to comply.

I see today's ruling class as the equivalent of the British generals who kept launching offensives in World War I or the executives at Citigroup and Freddie Mac who loaded up on sub-prime mortgages. If my views seem extremist compared to theirs, so be it.

I also got the memo that health care reform will reduce the deficit. That is a baloney sandwich. Relative to current law, I am willing to grant that the legislation will reduce the deficit (assuming no glitches, such as failure to project expenses properly or failure to follow through on promised benefit cuts). It does so by cutting future Medicare benefits by X, and then using a little bit less than X to pay for new subsidies. But in order to actually have a budget that does not collapse by 2030, we have to cut future Medicare benefits by much, much, more than X, and not use the cuts to pay for anything else.

Imagine if these "health care reform will reduce the deficit" arguments were being made by the acolytes of somebody named George Bush. Then you would see Brad DeLong sneering at them, Paul Krugman accusing the authors of having no integrity, and Mark Thoma linking to articles debunking them.

I will not tone down my rhetoric, because I believe that those in power are on a course which is profoundly out of step with reality. In Unchecked and Unbalanced, which was written before the Obama Administration took office, I argue that government's size and centralization were inconsistent with the increased dispersion of knowledge. With knowledge now highly specialized and dispersed, we need power to be dispersed also, or we will see more catastrophes like the financial meltdown. This Administration instead is trying for more centralized control.

In many respects, the ruling class is engaging in misguided policies. But on the budget, they are approaching world-historical levels of folly.

Comments and Sharing

COMMENTS (39 to date)
MikeDC writes:

The irony here is that your "extremist" rhetoric is actually quite mellow in tone compared to the guys you're arguing against.

If you really stop and think about it, it's sort of odd, isn't it, that the guys blatantly cooking the books and screaming "SOMEONE THINK OF THE CHILDREN!" are now the mainstream and the guy pointing out the books are being cooked is considered a kook?

Daniel Kuehn writes:

How do you square this with the fact that millions of Americans (ie - not Washingtonians) support this reform? I don't get this "real America" attitude or this "America vs. Washington" attitude. One of the biggest proponents of this position lately - Dick Armey is THE DEFINITION of a Washington insider.

I think the story your telling is just recycled campaign rhetoric from other Washington insiders with R's next to their name (I know you are not an R here - you're probably an L, which makes it all the more important for you to realize when you're reading from an R script). It plays well on the campaign trail, but it's not very sensible. The fact is, "America" believes lots of different things, and lots of "America" agree with people in Washington with D's after their name, while lots of "America" agrees with people in Washington with R's after their name. The D's and R's also agree on lots of stuff, some of which "America" agrees with too, and some of which it doesn't.

Stop trying to homogenize and polarize. And stop acting like those of us who happen to agree with the president aren't "Americans".

jb writes:

Daniel, lots of people will agree with anything the government does, because they have an innate respect for authority, heritage and tradition.

That doesn't mean the government can't screw up -it just means that the people in power have a built-in level of support.

Daniel Kuehn writes:

jb - definitely. And there are some things that the government does that R's and D's are in agreement on that the American public is united against. I accept all that, and both of those issues are serious problems.

What puzzles me is Arnold's "war between America and Washington", as if what's been going on in Washington over the past year is somehow in conflict with or opposed to America. As if America doesn't want it or as if America is blindly trusting. That's what I don't get. "If you don't agree with me then you're either duped by Washington or in some other sense you're not on the 'America' side of the Washington v. America war". That's childish.

Although Arnold doesn't use these words exactly, I've also found the whole "real American" and "real Virginian" as opposed to "Washingtonian" issue weird. I grew up in Northern Virginia. My family has been here for four generations, and other family has been in the DC-Baltimore area for almost two hundred years. But because I currently reside inside the beltway the narrative goes that I'm not a "real American" or a "real Virginian" (again, I know Arnold didn't say this, but he's drawing from the same narrative). I don't and never have worked for the government. My parents never did. It's a really strange phenomenon to be told that in an X vs. America struggle or in an X vs. "real" America, you're not on the "America" or "real America" side. I'm not sure if the people who say these things realize how condescending and snobby they're coming across.

Daniel Kuehn writes:

I guess my point is America is a big place and Americans think and want a lot of different things. What Arnold really means is that he wants to declare a war on other Americans who disagree with him. If he wants to do that, that's fine, but he should own up to that. He shouldn't hide behind this farce that he's on the side of "America" and that the only thing he is opposing is "Washington".

todd writes:

dan, the reason I tend to agree with arnold is that in the context of the distribution of political power there are only zero sum games. if a bureacrat in washington has the ability to tell me what to do, then a bureacrat in my home state does not have that power, to say nothing of of where I fit into the scheme.

this is not the competition of the marketplace. this is the conflict of the battlefield. living in dc doesn't make you a foreigner, but advocating for the concentration of power at the federal level does put you at odds with those who think america should be a place where the ambit of personal choice and responsibility should be as wide as possible.

eccdogg writes:

Good points Daniel.

I do think the policies that Arnold mentions are away from the center of the country and our historic values, however you are right that many non-elite non-Washington people support these reforms and even elite Washington people are just as much Americans as anyone else.

I think the real issue is that the political class seems very wiling to ram through very big programs that lack the support of a consensus of the country in most cases and even a majority in some cases.

BV writes:


You disagree with the tone of the letter, we get it. However, you seem to be OK with the substance of the argument: Washington is growing, budget is in trouble, etc... In other words, you did not dispute ANYTHING in the letter besides the "tone" that you got from it.

This is the problem with many of the "left" talking points these days; they attack the messenger (see DK above) and not the message.

drobviousso writes:

"Extremism in the defense of liberty is no vice. And let me remind you also that moderation in the pursuit of justice is no virtue."
I never understood how the advocates of theft can justify complaining about being called mean names.

Brian writes:

War is an accurate representation of what is going on. For example, look at it from a territory stand point, for example Germanys Conquest of Austria in the 1930's. A majority of Austrians did not want Germany rule, but a large minority did. When Germany conquered Austria (due to the Austrian government allowing it and not putting up a fight) Germany and Austria were a war by all definitions. It was for a short time after which the Austrian goverment surrendered.

If you believe the Constitution is a right you are given which lays out authority (boundaries) just as land borders do, then blatting violating the Constitution (both houses not voting on the exact same bill, forcing individuals to pay fines if they do not want some service) is the same as t Germany banality ignored Austria’s sovereign territory. You just need to understand the context and background the statement is put in.

David R. Henderson writes:

Good piece, Arnold. I note that although Daniel Kuehn admits that you didn't use that obnoxious language about "real America," he keeps writing as if you did.

Daniel Kuehn writes:

todd -
RE: "dan, the reason I tend to agree with arnold is that in the context of the distribution of political power there are only zero sum games. if a bureacrat in washington has the ability to tell me what to do, then a bureacrat in my home state does not have that power, to say nothing of of where I fit into the scheme."

Oh certainly. Don't misunderstand me - I'm disagreeing with Arnold on his "America vs. Washington" mantra. I wouldn't disagree with him on the value of decentralized authority. I share that view and value, why would I disagree with him on that?

Daniel Kuehn writes:

RE: "Good piece, Arnold. I note that although Daniel Kuehn admits that you didn't use that obnoxious language about "real America," he keeps writing as if you did."

You need to re-read my posts then, David. I absolutely did not. I specifically qualified that point many times to make it clear that I wasn't implying he used that language.

But you tell me, David - if someone told you

"You side with Washington against America"
"You're not a real American"

Although it's worth noting the differences, aren't both of them "obnoxious"? What exactly do you find accurate or reasonable about the language that Arnold did use?

JPIrving writes:

Does anyone else see the seeds of secession? I do but I am such a radical libertarian that I think my ability to be objective is pretty well compromised.

Shouldn't we expect Tiebout sorting to increasingly move Americans to states with similar ideologies? I lived in Vermont until last year and saw this in an anecdotal way. Many of the most left people were originally from other states, and many conservatives/libertarians moved down south or out west, if only because they were focused on serious careers and were wasting their time in Vermont.

It seems to me we have irreconcilable differences between progressives and everyone else, and the economic differences trump anything else. The whitehouse has become so powerful that whoever is president is guaranteed to enrage at least a third of the country. Eventually the Utahs, Floridas and Texases are going to stop obeying DC right?

William Barghest writes:

Does anyone have a theory explaining why the ruling class is acting this way?

ThomasL writes:

You sound _almost_ as angry as I was right after TARP.

(FWIW, I've only gotten angrier since.)

Justin writes:

From what I can tell, health care reform is supported by roughly half of the country. Some who don't support it are single payer, although I'd imagine the vast majority of opposition is on the right.

There were a lot of arguments in Democratic circles that they needed to pass a bill. If they failed to pass anything, they'd look weak and ineffectual, and with most Democrats having already voted for the bill in one form, they'd still be vulernable to Republican criticism but wouldn't have any positive things to sell (and I mean positive from the perspective of the typical voter). In addition, there was lots of concern that a failure to pass the bill would mean a passive base.

At least one poll had congressional democrats see soaring support from independents in the wake of the bill's passage (from losing 19%/28% dem/rep approval to winning 33%/31%). From this standpoint, I think the actions of the Democrats make sense from a political perspective.

As for Arnold's op-ed, I agree that Paul Ryan's budget is signficantly more honest than any of the official budgets we have seen from Washington since, well, I'm not sure when but for at least my lifetime. That said, his revenue estimates came up short, and so debt as a percent of GDP is higher 75 years from now than it is today (much better trajectory, but then that assumes all goes well too). I'm also not sure why capital income is exempt from tax, if only because it creates a very strong incentive to classify labor income as capital income.

MikeDC writes:

Rent seeking seems to be a pretty good explanation to me.

Les Cargill writes:

William Barghest: "Does anyone have a theory explaining why the ruling class is acting this way?"

Roughly, because the central figure of Progress in American maps to Abraham Lincoln. When Harvard was Puritan, it wanted one kind of Progress. This morphed into an informed-by-Unitarian Progress later - which had to do with Abolition, Prohibition and Suffrage ( and later, Civil Rights, and a lukewarm Egalite)

Having executed something like a Manifest Destiny on all of politics in the name of those three things, they need another frontier to conquer.

Now, what I have written is flawed, and probably chock full of errors. But you must also remember that the Progressives were, like Spencer, Positivist. There were even advances in physics and mathematics about the fundamental nature of reality to come in the early 20th Century which teach us that it's all more complicated than that.

So it is, IMO, the difference between those who know that Perfection is attainable, and those who know that Perfection is an illusion.

Ultimately, the biggest boost Hayek got was from Information Theory. That's still being digested, too. I am unsure that a Paul Krugman has any exposure to that sort of thing - but all I really know is his textbooks and blog, which aren't necessarily going to reveal his exposure to those things.

It could be that libertarians are too skeptical, but the historical record gives us much to skeptical of.

All totally IMO, IMO. And I formed all these ideas from a spine of one book - "Been Down So Long It Looks Like Up To Me" by Richard Farina.

J writes:

Does anyone have a theory explaining why the ruling class is acting this way?

Because they are a bunch of know-it-all, do-good, arrogant blankety blanks?

I would not be surprised if sometime within the next year that several states bring back the idea of Nullification and say "Sorry, we aren't doing this. None of it, nada, zero." The Feds will of course counter with holding back funds or some dumb thing, and the states will say "Fine, we aren't remitting any Federal taxes to you", and then what? Either the Feds back down or they declare the states to be in rebellion. I'm pretty sure the former would happen before the latter.

Mercer writes:

Obama and his fellow Dems won a clear majority of the votes in the last election. Their number one issue was health care. When they put into law what they campaigned on it is not " a state of war" between between America and Washington. It is how a democratic government is supposed to work.

I don't think the budgeting is fully honest but it is better then what the GOP did in 2003. The Dems are not starting an expensive program in the same year that they cut taxes and launch a new war.

You are upset that the Dems passed a bill that half of the country opposes and think it shows elite contempt for the populace. I have a better example of elite contempt: In a time of high unemployment granting amnesty to millions of illegal aliens and increasing the number of legal immigrants who can come to the country. That is more unpopular then the new health law.

roversarus writes:

Does anyone have a theory explaining why the ruling class is acting this way?

I have a simpler theory. For the same reason a dog licks himself - Because he can.

The "ruling class" expands it's power because everyone tries to expand their power. Everyone seeks to achieve greater wealth and status and security.

The problem is that unlike normal thieves there has never been a good way to stop the "ruling class".

Randy writes:

The way I see it, Washington (i.e., the political class) is America. Certainly they have the right to claim that title if anyone does. But if they are, then I'm not, so they can forget their appeals to patriotism - for any reason. I'll have no more of that.

MikeDC writes:

I think you're perception of the 2008 election is pretty far off.

1. Health care pretty quickly seemed to take a back seat to financial crisis and quickly unfolding recession.

2. The largest single plank of the health insurance package passed by Obama was probably the mandate, which Obama vigorously ran against. So to whatever extent the election was about health care, the people are getting the exact opposite of what they asked for.

eccdogg writes:

He also ran against taxes on employer provided insurance as well and that is happening too.

So again if that is what people voted for it is not what they got

Mercer writes:


Anyone who did not know the Dems wanted to expand health coverage was not paying attention in 2008. It was the biggest difference between the two parties. Obama did not stop promising health care expansion after the financial crisis in September.

david writes:

Hi Arnold.

Thanks for fighting the good fight, your “cri de coeur” and for being resolutely “non-compliant”.

However, I have to quibble with you over which date was the date of infamy. I believe the day of infamy was not 21 March 2010 but the day on which Obama was elected (at least as far as the stimulus and healthcare – the Fed date of infamy was back in 1913). It was the day on which I suspect a significant proportion of people who have consistently opposed his policies since his election nonetheless voted for him (or perhaps some of them simply failed to vote). Why did they vote for Obama? It’s true that many had convinced themselves that he would move to the centre or moderate his stance but that wasn’t a reason to vote for him. That was a simply a reason not to vote against him. They can’t really argue that they were fooled into voting for him. From my perspective, now that Obama is in office, he is simply acting in a way that is perfectly consistent with his past, his track record as a senator, his campaign, etc. He telegraphed explicitly or implicitly very clearly that he intended to move the country well to the left and, having received a mandate, he’s doing it. Concerning his style of politics and the arrogance of power, well, perhaps it’s not that surprising when a Chicago politician brings “Chicago-style” politics to the White House. So, again, no surprises there.

My assessment is that some who voted for Obama supported his policies and many more were caught up in the some form of self-indulgent “people’s romance” (to use Daniel Klein’s phrase). They are paying the price, and probably will continue to pay the price, for that indulgence. The US is a representative democracy, not a participative one. What matters more than anything else is how one thinks and acts on election day, not on all the other days. That’s why you can’t give a guy whose policies and politics you disagree with a mandate to run the country. It’s foolish. Ultimately, if he’s got the congressional votes, he gets to win (and in fact has been given a mandate to win) no matter how many people disagree with him, no matter how many protests there are and no matter what the polls say.

TomB writes:

But baloney sandwiches are so tasty. Especially if you dress them up with some mayo and maybe some lettuce and tomato. And if you ask around, you'll find that pretty much everybody likes bread and lettuce and tomato. Of course baloney is really high in fat and will probably kill me some day. But I'll stop eating them before then.

William Barghest writes:

Regarding Mercer,
It does seem emotionally dishonest for libertarians (who believe many unpopular things) to get angry when the US government defies popular opinion. I think there are two causes of this reaction in this case. 1. If you are a libertarian then you probably think that Obamacare will make things worse for you, your friends and neighbors, and your progeny, and this is indeed something to be upset about. 2. Being a loyal American citizen you somehow believe that you as well as the populace are somehow a part of the US Government's decision making process and feel betrayed when it becomes obvious that the ruling elite which really controls the US Government doesn't care what you think. This betrayal is even more anger inducing when it seems fairly obvious that you and the populace are right.

I think one should view the actions of the US Government (or governments in general) as one views meteorological events. The US Government as well as the atmosphere is not really a part of you and doesn't care what you think, nor can you really get away from it. The best thing to do is keep an eye on it and try to get out of its way when it is behaving ominously. One should respond more like 'Darn, it looks like a big storm is coming, should I hunker down or should I flee)' to Obamacare, rather than trying to declare a pointless war against the forces of nature.

Brad DeLong writes:

Why do you think it is a winning intellectual move for you to tell lies about what I would be doing in some alternative universe?

david writes:

From Daniel Kuehn's first comment:

"Stop trying to homogenize and polarize"

I don't think it's possible to do both at once - it's a bit like saying "stop trying to homogenize and de-homogenize".

Apart from that pedantic cheap-shot (on my part), I've always interpreted exhortations against "polarization" to really be about trying limit debate and enforce some sort of conformity. I mean, in a free society, what's wrong with polarization? And if society really is polarized, perhaps it's evidence that there is insufficient consensus for one side to enlist government coercion.

Robert writes:

A lot of the rhetoric in that op-ed was dumb in my opinion, but the goals Arnold listed were good ones.

Yancey Ward writes:

Power corrupts and expands itself. It is that simple. At some point, that power over their lives becomes so overwhelming that even a minority of the population feels it so intensely that their only recourse is violence. A few commenters above make much of the claim that half the population supports the just passed bill. So what? What is the other half to do when such legislation is passed over their objections? What are they to do if this happens repeatedly? Just shut up and take it? The world doesn't work that way- it never has. Wide consensus in broad measures is a requirement for a legitimate government. When that consensus is violated, as it has been with the recent bill, violence is always a possibility, and if consensus is repeatedly violated, revolution and civil war is inevitable.

The path we are on leads to either tyranny and/or war. We have a government making promises that can only be filled by yoking an ever larger fraction of the population to pay for it. Unless we begin volutarily allowing these promises to be withdrawn, our government and the society is doomed.

Matt writes:

Why are the rulers acting this way?

Because they know damn well the moderates are often too scared to do anything, but very slight moderate change. Now that we have the legislation, it here to stay, like social security, medicare, medicaid, Dept of Energy and Education. Those people have nothing to compare it to and even if the next President promises to undue the legislation it won't happen, just like Reagan. Give it 10 years, it could be the worst thing the government ever did, but most people will assume it is basically good, with only minor tweaking. At the very best Government expands two steps forward, one step back.

eccdogg writes:

"And if society really is polarized, perhaps it's evidence that there is insufficient consensus for one side to enlist government coercion."


Large sweeping government action should never be undertaken uneless there is a reasonable consensus among the populace about a course of action. 51% doesn't cut it. And I think that for things both that I agree with and disagree with.

Loof writes:

If the liberals are elitist and a ruling class of ‘we the people’ by Democrats through government, what does that make conservatives in America, Republican and Libertarian?

To see some light of day, view social conservatives as elitist as social liberals. If not myopic in the dawn you’ll clearly see a ruling class, just not the dominant one. This upper crust doesn’t seek to rule through government in the public interest. No. They wanton to rule and control people more with buddy business – and the vehicle is the corporation with its private interest.

Jacob writes:

Brad DeLong,

Much respect, but I don't think you can claim that Arnold is telling lies about a Brad DeLong in an alternate universe... Think about it.

Judging by the comment though, I think maybe that someone made the comment using your name. It's quite atypical.


[Jacob: You are right that sometimes comments are faked, but in this case, the comment was made by Brad DeLong. --Econlib Ed.]

Tony Abbot writes:

I think this is the first time in all my years of reading Econlog I have to say this – Arnold got this one completely wrong. I don’t mean wrong in the sense that the health bill is going to make the long term fiscal situation even more unsustainable but the way he characterizes the issue – as a war between the Washington elite (the insiders) against the American population. While there is a huge amount of justifiable opposition to the health care legislation – this is also a democratic country where a large percentage of population supports this law and elected its representatives on the expectation that this legislation would become the law. Yes you and I may disagree with the legislation and will argue about the details and berate the dysfunctional political establishment that requires mollifying each special interest to get legislation passed – but don’t stoop to the emotion driven analysis of framing this as an us vs them issue – just because you and your social circle disagrees. Do you really thing that the majority of average Americans think it is against their interest to have access to government guaranteed health care if someone promises them whether its Obama or Reagen? Arnold might well benefit from reading Greg Mankiw’s reaction to the passing of Health Care Legislation. (

R. Richard Schweitzer writes:

The real underlying issues here concern THE FUNCTIONS OF GOVERNMENTS.

We have several layers of governments; Federal, State and Local. At one time the functions of the Federal were constrained by specific enumerated powers. That concept has steadily eroded and in significant ways been (and is continuing to be) replaced by political fiat.

There is no specific enumerated power for Congress to appropriate Federal monies to persons who have paid a particular tax and survived to a specific age (Social Security). But, doing so has been accepted by the electorate as a political fiat.

There is no specific enumerated power for Congress to appropriate monies to persons who have medical needs after a certain age in life, whether they have paid a specific tax or not, or have a particular level of income at the time of need. (Medicare/Medicaid)

We can go on looking at Education, Arts, Science, Research, HealthCare, elements of Housing, etc., etc. All of these can easily be brought within the enumerated powers by amendments to the Constituion - but they have not been. We have political fiat instead.

Those are also the principal sources of the strains of taxation on our political economy.

Back up, fill in the Constitutional deficiencies (if any) with as much care for the future as was shown originally, and we may work out of these trends.

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