Mises Daily Articles
The Magical Government Tour
The press puppy-dogged Bill Clinton as he traveled the country exploiting the troubles of others to pad his legacy. Oozing the compassion that he kept under wraps as he bombed civilians in Serbia, Clinton announced that he plans to use the power of the federal government to fix up dilapidated housing and schools and inspire a renewal of economic growth.
This is political agitprop. Indeed, news clips from his tour to troubled spots around the country looked like a Soviet propaganda film. America pretends to be wealthy, but look at the squalor and suffering kept under wraps! The rich are getting richer, while the poor suffer in silence!
The press ate it up. "There was a bit of magic in Mr. Clinton's trip," wrote Jeanne Cummings of the Wall Street Journal in a story purporting to report the news. But the only magic is that anyone takes this nonsense seriously.
Think about Clinton's claim: he and his friends are sure there is money to be made in these places. Corporate America, for reasons of prejudice or simple stupidity, doesn't understand this. To prove his point, he will offer tax incentives and investment guarantees for any business that invests in impoverished areas.
But wait a minute. If there are profits to be made, why are government investment guarantees and regulatory favors needed? In fact, free enterprise has proven itself quite capable of sniffing out profit opportunities, while bureaucrats are worse than useless at this.
And think about this: Clinton has spent his lifetime in government, and knows nothing about business except how to regulate it, tax it, and hit up its owners for campaign contributions. Here's Clinton on business economics: "If you have people who want to go to work and people with money to spend and they're both in the same place, it's a good place to invest."
Spoken like a true central planner. Notice, however, that he is not committing his own savings; he wants to enlist the public to back the investments of other people. And if such favors are necessary to bring investment to a place, doesn't that suggest that the profits to be had there are marginally more risky than elsewhere? Yes it does. And who is going to bear this risk? Taxpayers of America, that's where you come in. Your pocketbooks are being tapped again to fix up places that politicians, not free markets, think are important.
In truth, government never brought prosperity anywhere; only unhampered (and unaided) free enterprise does that. Public policy only works to redistribute wealth. For evidence, see the previous incarnations of Clinton's "New Market Initiative." In the 1960s, it was the War on Poverty and Urban Renewal. In the 1970s, it was UDAG grants and public housing. In the 1980s, it was Enterprise Zones, just as it was Empowerment Zones in the 1990s. It's always the same racket: taxpayers are looted in the name of economic uplift, resulting in wealth redistribution and poverty perpetuation.
Most fundamentally, the underlying assumption behind Clinton's tour is all wrong. There is a reason why the areas Clinton visited are poor, and it is not because they are being irrationally "overlooked" by business. In Kentucky, the labor unions destroyed many mining towns. In urban areas, welfare and crime conspired to sap these places of economic energy. On Indian reservations, look no farther than the socialist governments that control these places, thanks to vast and everlasting federal subsidies and regulations.
Places like East St. Louis, Watts, rural Mississippi, and the Pine Ridge Indian Reservation should be on the National Tour of Government Failure. These places aren't "neglected." Their problems are largely due to the lavish attention politicians like Clinton have paid to them over the years. If there are signs of hope, it is due to a handful of brave entrepreneurs, not the bureaucrats from HUD and the Agriculture Department that Clinton had in tow.
On the ideological front, and true to his political style, Clinton wants to have it both ways. He wants to claim that he is a friend to free enterprise while calling on the surgical "tools" of government to fine-tune the local economy. In this way, he can avoid the charge that he is repeating the errors of his predecessors.
But while he may not talk about the glories of public housing and UDAG grants, his proposals are just welfare in the guise of bank credit instead of outright spending. It is no less unsustainable than the Great Society. Congress should tell him to let America's poor communities alone so that they will have a chance to recover from the last ten thousand times politicians tried to help them.
Notice that Washington, D.C., wasn't on his Magical Government Tour. And yet there are few places in the country with more squalor, criminality, drugs, illiteracy, and poverty. A resident knows that he can attend a glorious reception at a fancy government embassy, leave and walk a few blocks, and find himself in what looks like a third-world country. This is a place where taking the wrong exit off the highway can land you in the hands of gangs that would rather highjack your car than take your tax credit.
Why doesn't Clinton try some of his magic in his own backyard? Once he turns D.C., the imperial capital of the world, into a bright and shining City on a Hill (instead of a slum in a swamp) we can talk about the rest of the country.
And yet Washington still gives us blather about a new plan for "community renewal" that is "the product of a concerted, four-year effort to construct a new model of revitalization" based on "a public-private partnership to give people in currently low-income areas new hope and opportunity as we enter the 21st century."
The trouble is this: that quotation is not from Bill Clinton; it's from Dennis Hastert, the Republican House Speaker who believes, like the man he pretends to oppose, that government is the source of hope and happiness.