Montreal, August 3, 2002  /  No 107  
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Robert Nelson is a professor at the University of Maryland and senior fellow of the Competitive Enterprise Institute.
by Robert Nelson
          Ever since the Reagan era, the Republican Party in the United States has consisted of an uneasy alliance of neo-conservatives, business corporate interests, religious conservatives, and libertarians. Today, with another Republican in the White House, one section of that coalition is feeling left out in the cold – the libertarians. With disconcerting frequency, the administration under George W. Bush has announced steps that undermine the free market, increase the size of the federal government and curb the future civil rights of Americans.
          Perhaps 20 percent of the U.S. electorate approaches politics from a broadly libertarian perspective. William Galston, a long-time adviser to Al Gore and other Democratic presidential candidates, says: "If even a fraction of these people left the Republican fold, it would upset the applecart of American politics." The Bush administration, caught up in the global war on terrorism and a spate of corporate scandals, may not realize it, but it is flirting with this outcome. Everyone in politics must make compromises; it is an inevitable part of the give and take. 
          The Bush administration, however, has gained little in return for its concessions. The Bush team is either politically maladroit, or, as seems more likely, it assigns a low priority to the economic and political freedoms of Americans. Instead, in one area after another, it has acted to increase federal power. 
Federal power on the rise 
          The Bush education bill – said to be one of the main accomplishments of the administration – significantly expands federal funding of education, and imposes "accountability" requirements on states, such as wider testing of students. It is a large step towards the nationalization of education in the United States. In the face of congressional resistance, no attempt was made to challenge teachers' unions and the education bureaucracy; within a few months of arriving in office, the Bush campaign promise of private school vouchers was history. 
          Education is not only about learning arithmetic; it also instills the values of a society. To have one education system for the United States is virtually to have a state religion. Even the mandatory testing of students is not value-neutral; the exam questions define what is educationally significant. Joseph Bast, president of the Heartland Institute, a libertarian think-tank in Chicago, says that "a year and a half of Bush have done more harm (to education) than the last four years of Clinton." 
          After six years of Republican control of the Senate and seven of the House of Representatives, any hope of bureaucratic surgery in Washington has been dashed. In 1994, the budget of the Department of Education was $25 billion; it is now projected to be $54 billion in the next fiscal year. The Justice Department budget has gone from $10 billion to $29 billion. The government is hiring 65,000 federal employees to staff security at the airports of the nation. Under Bush, the federal budget is out of control. Even leaving out spending in Afghanistan and other requirements of the war on terrorism abroad, total domestic spending by the federal government will rise 8 percent in fiscal 2002 – and is on track for another 11 percent jump next year. By comparison, domestic spending rose 4 percent in the first Clinton term and 5 percent in the second. 
          Stephen Moore, president of the Club for Growth in Washington, notes that the Bush presidency acts to undermine efforts by fellow Republicans to limit spending. Ironically, Moore says, "historians may well look back on two Bush presidencies of fiscal profligacy separated by eight years of relative Clinton budgetary restraint." 
          The farm bill signed in May illustrates the problem. The bill commits $l90 billion to a program denounced by Stuart Butler of the Heritage Foundation as "a shameless example of corporate pork-barrel spending." In 1996, Congress passed two groundbreaking welfare reforms, one for the poor in the inner cities and one for farmers. It was a high point of the "Republican revolution" of 1994, based on the Contract with America. Both bills are being rewritten this year. The Bush administration is just as determined to be tough on welfare queens, but the rich farmers of the United States are apparently another matter. 
     « Even leaving out spending in Afghanistan and other requirements of the war on terrorism abroad, total domestic spending by the federal government will rise 8 percent in fiscal 2002 – and is on track for another 11 percent jump next year. »
          As reported by the Cato Institute, agriculture is just one part of the federal give-aways to business constituencies. In 2002, in addition to $35 billion for agriculture, another $67 billion went into transport, energy, urban development and other forms of "corporate welfare spending." The Departments of Agriculture, Labor, Commerce, Veterans Affairs, Interior, Transportation, and Energy exist today in large part to hand out federal largesse. 
Assaults on free-market principles 
          Since the New Deal, there has been only one trend – more agencies to satisfy the demands of more constituencies. Even the creation of national parks – mostly intended now to promote local economic development – has come to be known as the "park barrel." 
          The private ownership of property is vital to a free society. Many people are surprised to learn that the federal government owns 30 percent of the land in the United States, and state governments own another 8 percent. Yet, in 2002, the Bush administration committed to spend $900 million, most of which will go for further acquisitions of land by federal and state governments. 
          In another assault on free-market principles, the Bush administration in March imposed a 30 percent tariff on many imported steel products. This is welfare for steel workers, paid for by U.S. consumers in the form of higher prices for steel goods. According to Robert Crandall of the Brookings Institution, this cost to other Americans each year will amount to more than $600,000 for each job protected in the steel industry. It is the same story for U.S. homebuyers with the 27 percent average tariff imposed this spring on Canadian softwood lumber. 
          This tariff is likely to raise lumber prices by more than $1,000 in the price of a typical new home. The United States is undermining its own free trade credibility and flirting with a trade war with its closest allies abroad, even as it undermines its own economic interests. 
          Another recent folly was the signing of the campaign finance bill. Again, the Bush administration protested mildly and then caved in. The United States no longer has truly competitive elections for most congressional seats – only about 40 of the 435 seats in the House of Representatives are in play for elections in September. Restrictions on campaign fund-raising and spending are a main reason along with district boundaries tailored by the parties to eliminate competition. Previous campaign finance laws helped to create the problem and the new legislation only makes it worse. 
          Fortunately, most observers expect the Supreme Court to throw out much of the campaign finance bill as an unconstitutional violation of the First Amendment. Freedom of speech is only one of the constitutional rights that the Bush team seems to regard as an irritating annoyance. Robert Levy, senior fellow in constitutional studies at the Cato Institute in Washington, says the USA Patriot Act – enacted shortly after the events of September 11 – amounts to "gutting much of the Fourth Amendment," which prevents unreasonable searches and seizures of persons, homes and property. The federal government will now be able to engage in new forms of surveillance without a court warrant. It will be able to hold legal residents who are not citizens traditionally accorded the same legal rights as other Americans – in jail for long periods without showing cause to a judge. The Bush administration has already trampled on the civil rights of many Islamic residents in the United States over the past year, incarcerating them for long periods without making their identities known publicly. 
Exercises in symbolic politics 
          It would be one thing if all this repression of individual liberties was likely to make a large practical difference. People might be willing to be undressed in public as they board aircraft if they thought it would really assure their safety. But most of this activity is for show. Michael Barkun, a professor at the Maxwell School of Public Affairs at Syracuse University, says: "If the goal is the complete elimination of a terrorist threat on American soil, even the most draconian measures will fail." Rather, most anti-terrorist measures "serve as exercises in symbolic politics to soothe an anxious public."  
          As is becoming increasingly clear, the events of September 11 represented an intelligence failure of colossal proportions. The CIA, FBI and other intelligence bureaucracies are funded to the tune of more than $30 billion a year. Yet, for the past decade, the government did little to counter al-Qaeda, despite thousands of members and its many years of existence as a virtual private army dedicated to terror. Admittedly, this is not so much a failure of the Bush administration as of Congress, the Clinton administration, and the entire Washington culture since the 1970s. Unfortunately, with only a few exceptions, the devastating failures of U.S. intelligence are symptomatic of the state of federal administrative capacity across the board. What is desperately needed is radical surgery for most of the agencies in the nation's capital. 
          Perversely, the effects of September 11 seem to be working in the opposite direction, as Americans have rallied behind the flag. Even the recent proposal for a Department of Homeland Security amounts mostly to reshuffling the chairs on the deck, avoiding the more drastic – and painful and difficult – measures of internal cultural change in congressional micromanagement and other Washington policy-making and administrative decision-making. 
          Bush is, by all appearances, a more emotionally secure and morally upright person than former president Bill Clinton. However, the workings of his administration increasingly resemble the Clinton years – everything based on holding a finger to the latest political winds. 
          Bush is reportedly anxious to avoid the one-term fate of his father. If he continues to undermine the free market and decentralist principles of his own 2000 campaign, many of his former supporters unfortunately will have no reason to care whether he continues in office beyond 2004. 
* A version of this article was published in The Financial Times on July 20, 2002. 
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