Galt’s Gulch: Or How the core Republican Idea is Destroying the American Way of Life

This, from the Denver Post, on the city of Colorado Springs’ discovery that taxes actually pay for things that people, you know, need and use. (h/t Atrios).

This is, among other things, what folks like Megan McArdle never seem to get — not merely that governments do things that (a) private entities won’t and or can’t and (b) that are necessary if you are, say, going to have thousands or millions of folks living in close proximity to each other, and (c)  those things that need to be paid for — by the people in common, that is to say, by government — include a bunch of stuff essential for a sound economy and any chance of achieving what is commonly thought of as the American way of life.

That is — it might be hard to quantify the contribution of adequate street lighting to GDP — but ask yourself what it would do to retail sales to have pools of darkness every thirty feet along a commercial street.

Or — it may not show up on a a monthly report of manufacturing output, but ask yourself whether the long-tail consequences of a diminished police presence in a factory district might include an impact on that district’s safety, and hence production — or if a change in fire response times could translate into altered insurance costs.

And you don’t even have to ask the speculative question about the value of investment in school facilities and in the quality of public schooling as discovered in very real dollars in the home valuations realized by property owners in the relevant districts.  That’s on that answers itself.

See e.g. this recent NBER working paper for an account of facilities spending (institutional access required for the full paper. Abstract here.) (That there is a lot of complexity in the area of the private and public economic value of education I willingly concede. But the broad picture of improved schools = higher property values appears to hold.)

It is possible, if you are a true believer, to imagine a gated world in which the “accomplished” secure for themselves all those qualities of life they seek on piece-work/piece-paid basis.  Dystopic science fiction turns on this conceit, among others.

But I’m a believer in Jane Jacobs work. And the key message of her Cities and the Wealth of Nations is that you need thriving, diverse (in every sense of the word), and ambitious cities to generate the range of activities that produce both healthy economies and polities.

To get that, you need some sense of a common stake in the civic enterprise.  You need to be willing to pay to keep the streets lit, potholes filled, police on their shifts and schools capable doing more than riding herd on the pre-unemployed.  Any society can tolerate some proportion of the unconsciously lucky in the delusion that their comfort is insulated from any external shock.  It cannot survive when that belief becomes an epidemic psychosis with an incidence >50% in one of our would-be ruling parties.

Don’t believe me?  Just ask the good, tax-averse citizens of Colorado Springs.

Image:  Wojciech Gerson, “Merchants in Danzig” 1865.

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23 Comments on “Galt’s Gulch: Or How the core Republican Idea is Destroying the American Way of Life”

  1. Jim Bales Says:

    RE: Rand and Galt’s Gulch.

    I was 17 when I read Atlas Shrugged. I was about 2/3rds of the way through it, absolutely eating it up and buying into Rand’s “philosophy”. I distinctly recall thinking to my teen-aged self: “Wow — this works! This so totally works! … Wait …. This is fiction. Of course it works! She makes it up so that it works!

    And thus a critical reader was born — thank you, Ms Rand (even if it was not your intent).

    Imagine my surprise when I got to the end of the book. Rand was free to invent whatever she wished to allow her philosophy to triumph, and yet, she could not. With all of the freedom of a novelist at her disposal, the most plausible outcome of her philosophy was a small group of adherents hiding in an isolated enclave, unable to face interactions with anyone of a different opinion or mindset.

    Ayn Rand could not invent even one plausible fictional scenario in which her philosophy could triumph in the marketplace of ideas (never mind in reality). Randism is really that feeble.

  2. […] the Inverse Square blog, where Tom editorializes so I don’t have […]

  3. Jeff W Says:

    Megan murdered you:

    Don’t attack your intellectual superiors without first giving your ideas the sniff test. Your post is so preposterously stupid that I’m amazed Megan even bothered. But I’m glad she did. Now I know I never have to read your blog again.

    • Tom Says:

      Sadly, from the point of view of empirical claims, I am still alive. Ms. McArdle’s aim is no better than her cause.

      Don’t let the door hit ‘ya on the way out — but despite your distress, you are always welcome back.

    • Barry Says:

      I’m sure that Megan has written at least one actual intellectually devastating post in her career, but the odds are pretty frikkin’ low.

  4. […] The Inverse Square Blog science and the public square — by thomas levenson « Galt’s Gulch: Or How the core Republican Idea is Destroying the American Way of Life […]

  5. Jim K Says:

    You miss the most important line of the entire article:

    “The deep recession bit into Colorado Springs sales-tax collections, while pension and health care costs for city employees continued to soar.”

    The argument that folks like me (who are apparently wrecking the American way of life) have is not with government provision of services per se but the fact that a great proportion of the dollars we are paying into the government these days is going to support unsustainably high compensation schemes for governement employees.

    What is going on in Colorado Springs is a perfect example of the “Washington Monument Syndrome”

    Things that people really want, like streetlights, are being cutback instead of lavish pension benefits for government employees. And make no bones about it, they are lavish.

    Punch in some numbers into this calculator:

    This calculator tells me that a Colorado public employee with 40 years of work experience at age 61 and a decent middle class salary of $75,000 will get a monthly retirement benefit of $75,000 or 100% of final year salary

    Now go here and punch in that monthly benefit $6250 and age of 61.

    To buy that same annuity stream in the private sector would cost you $1.07mm and it would not come with cost of living adjustments.

    I ask those of you in the private sector making 75k right now, who expects to retire (at 61 no less) with over $1mm in their retirement account?

    Additionally, most state employees do not fund any contributions to their pensions from that 75K. Almost all private sector employees do.

    What else am I forgetting? Health care benefits, much better job security, and hours and holidays most of us would envy.

    The rest of us are suffering deeply in this recession with 10% unemployment, deep compensation cuts and major hits to retirement plans.

    What is really destroying the American way of life, the unwillingness of some of us to pay ever more to support this abomination or the fact that we have created a class of citizens who demand ever more of our money in return for keeping the streetlights on?

  6. […] Springs's budet shortfalls have served as a natural experiment, and the free market has been proved […]

  7. Ragspierre Says:

    I see this blog is the inverse square of rational thought.


  8. Amit Uttam Says:

    The claim that trash collection, maintaining street lights, sidewalks and roads requires government intervention is patently wrong. Many cities contract waste management to other companies. Think Waste Management Inc., (it is actually a company) Why pay the government when you can cut out the middle man? In fact most roads and street lights are maintained through yearly contracts. Why not sell all major roads to toll operators? That way people will really see what owning a car takes and maybe private public transportation can actually take off. Finally when it comes to sidewalks or street lights, I can buy having a contract negotiator and a government paid inspector but why do we need so many government workers? Government retirement benefits are obscene. You should retire on what you save while you work. Not on future promises to pay no matter what. I also oppose the non-performance related pay bonuses that bankers get. I have nothing against government workers but I think the role of government should be to regulate and facilitate but not to operate. No, I am not a republican or tea bagger, those people are idiots. They are against regulation which I think is insane. You can’t play game without a referee.

  9. […] Thomas Levenson (via Monica Potts) writes, This is, among other things, what folks like Megan McArdle never seem to get — not merely that governments do things that (a) private entities won’t and or can’t and (b) that are necessary if you are, say, going to have thousands or millions of folks living in close proximity to each other, and (c) those things that need to be paid for — by the people in common, that is to say, by government — include a bunch of stuff essential for a sound economy and any chance of achieving what is commonly thought of as the American way of life. […]

  10. Mike Says:

    improved schools = higher property values. Well, it’s a little more complex than that. For example, in my town, the equation is tax increases outside of proposition 2 1/2 = improved schools = higher MCAS scores = higher property values. Or, you need to vote on this tax increase or your property values will go down. Lather, rinse, repeat. But, yeah, i get the point.

    What I don’t get is the whinning – they voted for this – they voted down the tax increase the city said was necessary to maintain services. Now the services are being cut. That’s what they voted for – what’s the problem?

    • Tom Says:

      I hear you (I live in a town where we recently overrode 2 1/2 — which is MA insider talk, for all you auslanders).But as you say — for all the complexity of the issue, the point is that communities that are willing to tax themselves to improve their common resources tend to benefit accordingly, and those that don’t end up fearing the stranger in the dark.

  11. Comrade Rutherford Says:

    The anti-American comments on this blog post are quite revealing. Back in the 1950s the top income tax rate was 90% for the obscenely wealthy. The private sector used to have the same benefits and retirement packages as the public sector still has today. Throughout the late 1960s, ’70s, and meeting it’s final death at the hands of anti-Amercian Way Reagan, the private sector finally realized it’s goal of eliminating good pay and benefits for it’s employees.

    So instead of fighting for the restoration of your benefits and decent pay, you all complain that public sector employees still get the American Dream, while you have given that all up.

    You guys have it backwards, public sector employees do NOT have “lavish pension benefits for government employees”, it’s YOUR benefits and pay that’s been cut to obscenely low levels. All of you are supposed to have “lavish pension benefits” but you willingly gave them up in the 1980s so the CEOs could steal all of the money you deserved for themselves!

    Reagan killed the American Dream, Conservatism’s sole purpose is to make sure the American Dream stays dead by killing off the middle class and turning America into another Haiti-like country run by a totalitarian dictatorship for the benefit of the top .1% of the wealthiest by exploiting YOU!

    If you are a ‘conservative’, ‘libertarian’ or ‘tea bagger’ you are fighting to impoverish your own family.

    • Tom Says:

      Preach it. I think the evidence is strong that a 90 % top rate is counterproductive, but it’s equally strong that there is plenty of room for a progressive income tax and strong polity. And certainly the laughable laffer experiment has tended to accelerate the relative decline of American power and wealth.

  12. mr x Says:

    So someone is saying that contractors can do the work of a city’s public sector. The taxpayers not only have to pay for the work to be done, but to line the pockets of the capitalists who run the outfits commissioned to do the work – that’s even more wasteful. I suppose those people think that making workers work for slave wages will make up the difference that the capitalists pocket. Naturally, these capitalists contribute to politicians who reward them with newer, more lucrative contracts.

    There’s no doubt that this ideology is killing the United States of America… none. If I was Usama bin Laden I would be sending so much money to the Teabaggers and the GOP and its echo chamber it would make your head spin. Then again, the Saudis do own much of Fox News…

  13. lichanos Says:

    There is a wonderful little piece by Thomas Paine entitled, “On the Necessity of Taxes.” Seems that some folks in Pennsylvania wanted the government to protect them from marauders, but nobody wanted to foot the bill for a protective force.

    Same old stuff…

  14. lichanos Says:

    Ohh…here’s an excerpt from Paine at my blog. Couldn’t find the text online:

  15. […] K., in this comment thread takes issue with my claim that anti-tax glibertarianism is […]

  16. Maria Says:

    Interesting Read

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