In the Arena

A Feast for Fat Cats, A Project for Liberals

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Jim Young / Reuters

These are depressing times for liberals. The President is groveling in the White House, trying hard to please the Wall Street financiers who bankrolled him in the past, but are angry now because he called them “fat cats” and passed a financial reform bill. They fought to weaken the bill, succeeded in making it pretty much a mess, with new regulations often left to the discretion of the tyros at weak-tea agencies like the Security and Exchange Commission. Now the financiers are complaining about the resulting “uncertainty” that prevents them from loaning money to actual people (but somehow doesn’t affect their ability to speculate in currencies and derivatives and other funky instruments, and make huge paper profits as a result).

Indeed, the whole liberal project seems pretty rickety right now…although perhaps not in the dire state that Walter Russell Mead describes in a thoughtful essay in the The American Interest.

Mead’s point is not new: There is a tendency of government agencies and programs to go to flab. The price supports that saved family farmers during the Depression metastasize into ethanol subsidies for agribusiness that causes food price inflation. Fannie Mae morphs from an agency that helped credit-worthy people buy homes into a slovenly glutton that helps trigger the 2008 financial collapse by helping mortgage crooks sell ridiculous loans to unworthy buyers.

The essay is a bit one-sided. Fannie Mae was a player, but not the most important force, in the financial collapse. ObamaCare, which Mead scourges with drive-by carelessness, will help reduce the costs of Medicare (a goal that Mead supports). But Mead’s obvious, and recently acquired, prejudices should not divert serious readers from his absolutely essential point: that the liberal project cannot survive unless liberals take the lead in weeding out programs that aren’t working, and either reforming them or closing them down.

This is the least fun and most difficult aspect of Information Age governance–and the greatest weakness of an essentially benign, if flabby, philosophy that posits the optimistic notion that there is a solution for every problem. The fact is, there are problems that demand public attention–and there are solutions. But times change and if supporters of collective action are going to have any credibility at all, they have to focus perpetually on the efficiency of the programs they support.

A case in point: Head Start. A wonderful idea, an essential act of humanity–but study after study shows it doesn’t work very well, if at all. A few months ago, the Obama Administration decided to study why this was so. I’m waiting to hear the results. (My suspicion is that an awful lot of the people working in this program are undereducated themselves; that it often is a smokescreen for paying unemployable parents to babysit their children. I’d love to see a Head Start version of Teach for America, but that’s another column.)

Given the prevailing skepticism about the public sector, and the natural bloat that Mead describes, the most important threshold job for any liberal President is to prove he (or she) can manage the government. Obama has made significant efforts in this regard, but he also devoted far too much of his stimulus package to fattening liberal wish-list programs that weren’t performing very well. This is a complicated message to sell right now, but the President may have to burn down significant sectors of the government in order to save–and augment–the parts that are working.