This commentary originally appeared in NRO on February 19, 2014.
“President Barack Obama is a masterly practitioner of the occult art of single-entry bookkeeping,” says Kevin Williamson. In concurrence, I would say only that while the art of “single-entry bookkeeping” may indeed be “occult” in the sense that it entails a kind of magic trick – namely that of making the costs of a particular policy vanish for political purposes – the art is widely practiced, has a long pedigree, and is viciously effective.
Most progressive policies you can think of – going back to the agriculture and labor laws of the New Deal – are sold to the public only by reference to the benefits for beneficiaries, and never by reference to the far greater costs for society as a whole. Progressive policies are virtually never sold to the public on the basis of an honest cost-benefit analysis. Instead, proponents systematically deny that there are any such costs, and supporters earnestly believe it. This is strange magic indeed, because progressive policies virtually always cause net losses for society as a whole. That’s because they virtually always consist of interventions in the market in the form of limitations on the freedom of exchange. The immediate effect is systematic mis-allocation of resources, hence reduced output and higher prices for everyone – in other words, dead-weight economic loss, as with monopoly pricing.
So how do these policies continue to enjoy so much support? That’s where the artifice of “single-entry bookkeeping” comes into play. If all those poor working families throughout America don’t know that they’re paying far more for milk and sugar than they would in a competitive market – that in essence they’re being defrauded by a conspiracy of government and special interests – then you can get their votes as well as the support of the dairy farmers and sugar producers whose interests you actually serve. It is through this sleight-of-hand that the astonishingly wasteful “emergency” agricultural supports of the 1930s have remained in place for nearly a century. And I hasten to add that while such policies may be categorized as progressive, the politicians who support them range from one end of the political spectrum to the other, as the shameful recent Farm Bill shows. If fraud were legal, competition would force you to resort to it. Just so with democracy in America today.
Kevin’s post about Obama’s “single-entry bookkeeping” (a wonderfully apt formulation) aims at what should be a primary target for today’s conservatives. Single-entry bookkeeping is fraud, and eventually, bankruptcy. The way to defeat it is to insist on double-entry, and expose the fraud by exposing the costs.