Thursday, September 25, 2003

Rights and Reason: General Clark's Redistribution Plan

The Associated Press reports freshly minted Democratic presidential candidate Wesley Clark has a plan to help the economy by, you guessed it, having the government play economic God:
Delivering a 20-minute policy speech at a park along [New York's] East River, Mr. Clark said he would take the money that Mr. Bush gave the wealthy in tax cuts and create three funds: for homeland security, business tax incentives and relief for state governments.

Mr. Clark, who declared his candidacy last week, said he would allocate $40 billion for improvement of homeland security and the creation of security-related jobs such as police, fire and the Coast Guard.

Another $40 billion would be earmarked for state governments struggling under federal tax cuts, and $20 billion would be used as tax incentives for businesses that hire new employees.

The plan, Mr. Clark said, "will not increase the deficit. It simply moves $100 billion from tax cuts for households making more than $200,000 a year and directs it into job-creating funds that will help middle-income and working-class families."

"This job creation plan is part of my overall approach — one that I will be explaining over the course of the campaign," he said.
Clark's plan is obviously nothing more than a wealth transfer from producers to consumers, a staple of any Democratic economic plan. Contrary to this report, the tax cuts passed by Congress did not "give" the "wealthy" anything that wasn't taken from them by the government in the first place. Nor is it clear why Clark thinks $20 billion in "tax incentives" couldn't easily be replaced by simply cutting business taxes an additional $20 billion and off-setting them with federal spending cuts--another thing that appears to be missing from Clark's plan.

The fact that Clark is a former four-star general says a lot about his economic plan. The military is not designed to be a free-market organization, nor should it be. But the top-down decisionmaking of the Army is not appropriate for governing the private-sector economy, nor does it do much to protect individual rights generally. I would also suggest that Clark's experience as a top-level general is poor ideological preparation for the presidency in that high-ranking generals are more politician then they are pure soldier. By this, I mean the main component of a senior general's (or admiral's) job is fighting for allocation of resources within the insular, non-market world of the Pentagon. Military leaders are, in this sense, just another Washington interest group fighting for more money. I say this not to denigrate the military, or even to say the Army is the equivalent of, say, the National Education Association; what I am saying is that rational ideology requires objectivity, and that's hard to attain when your life's work is contained in an organization that consumes economic resources without producing them. I would no more favor a career general for the presidency than I would a lifelong union leader. You're just asking for narrow, concrete-bound leadership that way.

On a final note, Clark's proposed $40 billion to fund state governments "struggling under federal tax cuts" is obscene. As we've seen with many states, notably California, states are struggling because their own high taxes and anti-business regulation are reducing wealth creation. California Gov. Gray Davis recently signed union-backed legislation requiring most private employers to provide costly health insurance benefits to employees. If Clark is serious about promoting job creation, he should be calling out states that pass laws of that variety, rather than handing them a federal welfare check to encourage future bad behavior.

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