Organizations and Markets

Disaster Socialism

28 January 2009 at 7:40 am Peter G. Klein 1 comment

| Peter Klein |

As I noted elsewhere yesterday, the “stimulus” bill making its way through Congress is a fine illustration of the Higgs effect, the tendency of government to expand massively in response to “crises,” real or imagined. Naomi Klein’s “Disaster Capitalism” thesis is exactly backward: “disasters” are inevitably followed by huge increases in the public sector at the expense of the private. Anyway, if you have any doubt that the current legislation has precious little to do with economic stimulus, consider the details of the House’s proposed $825 billion package, which includes:

• $1 billion for Amtrak
• $2 billion for child-care subsidies
• $50 million for the National Endowment for the Arts
• $400 million for global-warming research
• $2.4 billion for carbon-capture demonstration projects
• $650 million for digital TV conversion coupons
• $8 billion for renewable energy funding
• $6 billion for mass transit
• $600 million for the federal government to buy new cars
• $7 billion for modernizing federal buildings and facilities (including $150 million for the Smithsonian)
• $252 billion is for income-transfer payments ($81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don’t pay income tax)
• $66 billion for education

Now I should state, for the record, that unlike other critics of this particular stimulus package, I don’t favor government “stimulus” packages of any kind. I’m not a Keynesian, after all.

Entry filed under: - Klein -, Classical Liberalism, Myths and Realities, Public Policy / Political Economy.