QED

Conservatives and ObamaCare

The luck of timing 

In the introduction to his article in Pajamas Media on March 24, 2010, Rick Moran predicts, ‘in five years the GOP will have embraced ObamaCare and be running on a platform that boasts how much more efficiently they can manage it’. 

Other conservatives will respond with the valid argument that this was the first major annexation of the economy enacted without any bipartisan support and, indeed, against popular opposition. Previous extensions of state welfarism, FDR’s Social Security Act and Lyndon Johnson’s Medicare legislation, enjoyed both majority popular support and significant support from Republican members of Congress. Perhaps the burgeoning opposition to Obama’s statism, represented by the proliferation of ‘tea parties’, will result in a Democrat Party rout come the November mid-term congressional elections, and repeal legislation will be enacted rapidly. 

Speed is essential for any successful rollback of welfarism. Once entitlements are granted, they are nearly impossible to remove in the absence of a financial and fiscal crisis. 

It is no accident that enduring extensions of welfare statism have ridden on the back of economic recoveries. FDR had the great good luck to succeed the hapless Hoover when the worst of the depression was over, and a recovery had already started. (The stock market had bottomed in July 1932.) Acolytes have continued to credit the New Deal for this recovery. However, other historians such as Amity Schlaes in her book, The Forgotten Man, A New history of the Great Depression, have convincingly shown that in fact the New Deal impeded a natural recovery. 

The massive annexation of the economy by the state in Britain after 1945 was sustained by a popular sense of entitlement after the privations of war. Sustained by a moderate recovery during the 1950’s, British statism became immune to any political challenge. Winston Churchill and his conservative successors felt impelled to preside over a social democratic consensus. Indeed, until the crisis in the 1970’s, which brought Mrs Thatcher to power, a kind of genteel decline in real terms seemed to be accepted as part of the natural order in Britain. 

The period of Lyndon Johnson’s presidency appeared to demonstrate that the United States could expand welfare entitlements and augment its military commitment in South Vietnam, while enjoying a rising stock market and growth in GDP. But in fact there was consumption of capital.  

The longer recovery of the American economy as measured by GDP growth can be sustained, the more ObamaCare will become entrenched. Conservatives may well argue that in the long term, it is unsustainable. The problem, as Keynes once remarked, is that in the long term we’re all dead anyway.

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