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Posts Tagged ‘Andrew Sullivan’

I had some fun at Andrew Sullivan’s expense a couple of weeks ago, mocking him for asserting that spending cuts today would be repeating the mistakes of Herbert Hoover. That was a rather odd thing for him to write since Hoover boosted the burden of government spending by 47 percent in just four years.

Since it is notoriously difficult to educate Obamaphiles, I’m guessing that he (and others) need some supplementary material.

How about the words of a key aide to Franklin Delano Roosevelt? Would that be considered a legitimate source? One would think so, which means this excerpt from a 2007 book review (the same statement was also cited by PBS) is rather revealing.

FDR aide Rexford Tugwell would claim in a 1974 interview that “practically the whole New Deal was extrapolated from programs that Hoover started.”

The fact that Hoover and Roosevelt were two peas in a big-government pod may be of interest to economic historians, but the real lesson is that interventiondidn’t work for either one of them. That’s what Andrew Sullivan and others need to learn. But since people like that probably won’t listen to me, maybe they’ll be more willing to accept the confession of Roosevelt’s Treasury Secretary.

FDR’s Treasury Secretary, Henry Morgenthau, wrote in his diary: “We have tried spending money. We are spending more than we have ever spent before and it does not work. … We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started … and an enormous debt to boot!”

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Even though he’s become rather partisan in recent years, I still enjoy an occasional visit to Andrew Sullivan’s blog. But I was rather amused last night when I read one of his posts, in which he was discussing whether government spending helps or hurts economic performance. He took the view that a bigger public sector stimulated growth, and criticized those who wanted to reduce the burden of government spending, snarkily observing that, “The notion that Herbert Hoover was right has become quite a dogged meme on the reality-challenged right.”

Since I’m one of those “reality-challenged” people who prefer smaller government, I obviously disagreed with his analysis. But his reference to Hoover set off alarm bells. As I have noted before, Hoover increased the burden of government during his time in office.

But maybe my memory was wrong. So I went to the Historical Tables of the Budget and looked up the annual spending data. As you can see from the chart, it turns out that Hoover increased government spending by 47 percent in just four years (if you adjust for falling prices, as Russ Roberts did at Cafe Hayek, it turns out that Hoover increased government spending by more than 50 percent).

I suppose I could make my own snarky comment about being “reality-challenged,” but Sullivan’s mistake is understandable. The historical analysis and understanding of the Great Depression is woefully inadequate, and millions of people genuinely believe that Hoover was an early version of Ronald Reagan.

I will say, however, that I agree with Sullivan’s conclusion. He closed by saying it would be “bonkers” to replicate Hoover’s policies today. I might have picked a different word, but I fully subscribe to the notion that making government bigger was a mistake then, and it’s a mistake now.

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Andrew Sullivan posted the following chart, which he found in National Geographic, and he noted, with considerable justification, that this was evidence of an insane and inefficient healthcare  system in America.

Sullivan Healthcare

The chart shows that America spends a lot more than other nations without a concomitant increase in life expectancy. Let’s set aside whether the right side of the chart is a bit misleading because American life-expectancy numbers are influenced by things that have nothing to do with the quality of the healthcare system, such as highway fatalities, homicides, and obesity, and focus on Andrew’s claim that Obama’s proposal will make things better because of its “cost-control measures.” Since the Administration’s own experts have predicted that Obama’s proposal will increase total healthcare spending, one can only wonder what he’s talking about. Does he actually think a new government entitlement program will lead to lower costs, when all the evidence suggests otherwise?

If he really wanted a chart that captures what’s wrong with America’s healthcare system, he should have gone to the Centers for Medicare and Medicaid Services’ national health expenditures data website and downloaded the figures showing how rampant third-party payment has resulted in consumers directly paying for less than 12 percent of healthcare costs. And when people are purchasing something with (what is perceived to be) other people’s money, it’s understandable that they don’t pay much attention to cost. My homemade chart does not compared to the one produced by National Geographic, but it does identify the real problem. Sadly, Obama’s plan (like Bush’s Medicare expansion, and everything else politicians have done for the past 50 years) will exacerbate the third-party payment problem and lead to even higher costs and more inefficiency.

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