• Steven Malanga, Shakedown: The Continuing Conspiracy Against the American Taxpayer, Lanham, Md.: Ivan R. Dee, 2010, 168 pages, $22.50.
Politics has been described fatuously as “the art of the possible” — as if it were not possible to achieve goals through means other than politics. But politics has a unique feature that sets it apart from all sorts of voluntary action: It employs coercion. Politicians can raid the wallets of taxpayers, forcing them to part with money they would rather spend, donate, or invest according to their own desires. Much of the money thus confiscated then is spent to succor special-interest groups that will in turn support their political friends.
Once I happened to criticize high tax rates to a friend, a “liberal” with decidedly egalitarian beliefs. His reply was that he didn’t mind high taxes because, he said, “The public receives needed government services in return.” That is the sentiment politicians and interest group leaders know how to exploit. All they have to do is to cloak their programs in rhetoric about “the public good,” and most opposition to their schemes will evaporate.
In his latest book, Manhattan Institute scholar Steven Malanga explores the venal game of separating people from their money through conspiracies between politicians and special interest groups. Taxpayers are being systematically robbed by those conspiracies — Malanga uses precisely the right word — to fund a plethora of high-cost, low-benefit (sometimes no-benefit) government boondoggles like public education, urban renewal, safety from terrorists, mass transit,alternative energy sources, and so on. Naturally, the people and organizations receiving the government cash reinvest some of it in propaganda (excuse me — “public relations”) and political campaigns to ensure that their money flow never is diminished or shut off.
This plague is far worse in some states than others. Malanga devotes entire chapters to the fiscal wreckage done to California and New Jersey by public-sector unions. California has a prodigious budget deficit that is sure to increase due to the extravagant promises that politicians have made to government employees — high salaries followed by lavish retirement benefits. Prison guards, for example, earn six-figure salaries owing to the political support their union gave to former Gov. Gray Davis and key legislators. The union’s endorsement enabled them to posture as being “tough on crime” when they really meant to be tough on taxpayers.
Teachers’ unions are virtuoso performers in the shakedown ritual. They tirelessly promote the notion that more spending on education is a panacea that cures poverty, inequality, economic woes, environmental degradation,and so on. Anyone who dissents will be pilloried as “anti-education” in heavily funded attack ads. In New Jersey, the state government until recently was little more than a vassal of the New Jersey Education Association, squeezing more and more out of taxpayers. That rising tax burdens have long-term adverse economic effects apparently never occurs to the union leaders. Or perhaps they simply don’t care. In any event, New Jersey underscores just how steep a price we pay for having turned education, which should be a matter of choice and contract, into a coercive near-monopoly by government.
The most expensive shakedown ever has been our housing debacle. Malanga has an illuminating chapter on that. He begins with the forgotten history of governmental meddling in the housing market, which goes back to that early advocate of government economic intervention, Herbert Hoover. As Warren Harding’s Secretary of Commerce in 1922, Hoover launched the Own Your Own Home campaign, the beginning of a long series of futile, costly federal programs to encourage Americans to buy rather than rent their housing. Just as with education, housing is none of the government’s business, but the notion that rising ownership percentages show “progress” has become an article of faith with many politicians. From Hoover through Barack Obama, taxpayers have had to pick up the costs of mortgage defaults — mortgages that never would have been written but for the idiotic political mania. The huge tab for the lending binge by the two government mortgage giants Fannie Mae and Freddie Mac falls not on the politicians and advocacy groups that inflated the housing bubble, but on the suffering taxpayers.
What makes these and many other shakedowns possible (and arguably inevitable) is what Malanga calls “the culture of entitlement.” Rapidly eroding are the old virtues of thrift and self-reliance. They have been replaced by feelings that everyone is entitled to whatever he wants and that the purpose of government is to ensure that it is provided. Thus, there is nothing morally wrong in pushing the government to give you whatever you want. If others aren’t happy, they can play the political game, too. As long as the process of expropriation takes place under the cover of “democracy,” no one can complain.
Well, people should complain, and Shakedown will undoubtedly provide the fuel for the building rebellion against the conspiracy Malanga has ably exposed.