In David Brooks recent op-ed, The Paralysis of the State, he explains New Jersey’s financial ills as being traceable back to the power of public sector unions, the wages of public employees and their retirement benefits. That is why New Jersey "cannot afford" to build a new tunnel into New York. According to Brooks, politicians are held hostage by unions; fire fighters and policemen are overpaid and if we could just cut them loose with no pensions, governments would have all the cash they would need to dig a tunnel to China, I guess.
Brooks laments: "Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t." History must not have been his strong suit in school.
Of course, Brook’s excursion into fantasyland would not be complete without finding the root cause of this problem in liberalism. From wars and famines to hangnails and bad breath is there anything that liberalism doesn’t cause? Brooks writes: "This situation, if you’ll forgive me for saying so, has been the Democratic Party’s epic failure. The party believes in the positive uses of government. But if you want the country to share that belief, you have to provide a government that is nimble, tough-minded and effective. That means occasionally standing up to the excessive demands of public employee unions. Instead of standing up to those demands, the party has become captured by the unions. Liberal activism has become paralyzed by its own special interests." "Nimble, tough-minded and effective" is not how I think most people remember the George W. Bush administration.
Brooks can be forgiven for his fit of nostalgia for the post-WWII era, and his knee-jerk anti-liberalism but not his historical revisionism. There is a stark contrast between the decade of the 1950s and its preceding decade and today and what has happened since 2,000. Just a few things need to be noted. WWII was largely a pay-as-you-go war in that it was an item on the federal budget from Day One, not off-budget like Bush’s two wars. The public was asked to help pay for the war and the income tax rates were set to reflect the fact that the country was at war, not being encouraged to go to the mall. And, for the record, the marginal income tax rate was 91% on everything above $400,000 from 1951 to 1963 with the exception of 1952 and ‘53 when it was 92%.
During the decade of the 1940s, the marginal income tax rate averaged 86.45% on any earnings over an average of $266,667 - the only exception to this was when the rate was 81% on anything above $5,000,000 in 1940 and ’41... but this was before the Pearl Harbor attack. Couple that with the fact that consumers came out of the war with high wages, family health care insurance, little or household debt, job security (union contracts were the norm not the exception), savings (aka spending power) at historic levels and a Republican administration which shared with Democrats the vision of a society based on these middle class values: a living wage for a single-breadwinner household without a college education, a safe working environment, time-and-a-half for overtime, a 40-hr work week, free quality public education, the dignity of retirement and the centrality of the family. In those days, people who reneged on their obligation to pay their fair share of taxes were called deadbeats and cheats, not lionized because they had found a loophole in the tax code! Tax time was a time members of the Greatest Generation accepted the burden of civic duty. It was not time to figure out how to game the system and stiff the IRS. [I wonder what history will call this generation.]
And, finally, in the ‘50s, everyone knew we were in a Cold War with a formidable enemy in the Soviet Union, not a made-up threat of a Saddam Hussein with imaginary WMD, and it was not the time to make like spoiled adolescents hungering for yet another hit of narcissistic self-indulgence. There was no spoiled 2% making like crybabies because their taxes might be raised from 36 to 39% or a bunch of business illiterates claiming that, because of their overwhelming tax burden, the 2% lost sleep over not being able to afford adding employees, they did not need, to their payroll.
Is there anything today that would parallel the 1950s had Brooks really looked at the historical record? My answer would be, "Nothing!" Only if we took the profile of the 1950s and turned it on its head would we have the 2,000s. So I would suggest that, when Mr. Brooks wants to return to the economic profile of the 1950s in its entire dimension, I will accept his criticism of liberalism but until then, his comparison is between apples and rutabagas and the only real paralysis is in Brook’s brain.