WARNING: Even Going Halfway With Elizabeth Warren is Way Too Far

Elizabeth Warren

Amity Shlaes, author of the just published, “Great Society: A New History” warns, in a Wall Street Journal op-ed, about compromise with a lefty like Elizabeth Warren:

She’ll only get halfway. That’s the consensus on Elizabeth Warren: If the senator becomes president, Congress will wear down her ideological edge and stymie much of her radical agenda. The result won’t be something free-marketeers can love, but it will be something they can live with and then undo at a later date.

Maybe not. The lesson of the 1960s is that political compromises with progressives can be much more consequential than they look—and preclude future reform...

As a senator, John F. Kennedy fought hard for organized labor, but when he was president, Southern and Sun Belt states blocked repeal of right to work, as the state opt-out was known. The president felt he had to throw organized labor a bone. Daniel Patrick Moynihan, then a Labor Department aide, drafted principles codifying the legitimacy of unions in a new area: the federal government. In 1962 Kennedy signed Executive Order 10988. Kennedy and Moynihan told themselves the order was merely a bone: It authorized collective bargaining for federal employees, but deprived them of strike rights.

Kennedy’s mild compromise triggered an explosion of government unionization. States and towns followed his lead. The public unions used the threat of strikes—illegal or legal—to extract compensation that states and towns could ill afford. Hence today's state pension crises.

Next came health care. President Lyndon B. Johnson put expansion of health-care benefits at the center of his Great Society program. The president romanced Wilbur Mills, the reluctant House Ways and Means chairman, who prided himself on his fiscal knowledge. In 1965 the pair settled on what appeared to be a compromise: limited funds for senior citizens’ health care under a new add-on to Social Security called Medicare.

Johnson and Mills threw in health care for welfare recipients as well, calling it Medicaid. There was no need to worry: Such costs were dwarfed by defense outlays, the leaders told themselves.

Those health-care add-ons ballooned instantly. Worse, Medicare and Medicaid became so popular that succeeding presidents of both parties simply increased their size. As of 2018, entitlements cost four times as much as defense, and reform efforts have stalled.

History flashes the warning. Wild antimarket measures do wild damage, but so do compromises. Measures that look affordable can spiral out of control. Even halfway is way too far.

-RW