When the Right Surrenders, Part 1

On this April Fool's day my good friend Dan Mitchell over at the Cato Institute explains:

Donald Trump wants the federal government to subsidize child care. If enacted, this policy is sure to increase costs and lead to inefficiency, just as similar types of intervention have caused problems in both healthcare and higher education. While Trump’s proposal is misguided, it hasn’t generated much surprise because politicians routinely try to buy votes with other people’s money. I was surprised, however, when the normally market-friendly American Enterprise Institute began to publish articles starting a few years ago in support of government policies on the related issue of paid family leave. I was even more surprised when I saw that AEI teamed up with the left-leaning Brookings Institution on a joint “Project on Paid Parental Leave.”

Since Dan insisted that this was not an April Fool's joke, I tracked down his sources. Not that I mistrust Dan - he is a rock-solid public policy scholar and a good economist - but as I kept reading his blog article, I tried very hard to convince myself that maybe, just maybe this was really an April Fool's joke.

Unfortunately, it was not. The American Enterprise Institute, which once presented itself as a conservative, free-market oriented think tank, now wants to be

a public policy think tank dedicated to defending human dignity, expanding human potential, and building a freer and safer world. The work of our scholars and staff advances ideas rooted in our belief in democracy, free enterprise, American strength and global leadership, solidarity with those at the periphery of our society, and a pluralistic, entrepreneurial culture.

 Normally, I would not pass judgment on what profile a think tank wants to have, but in this case I have to make a point about it. As a country, we are at a very important watershed moment. Our welfare state is not quite as big and comprehensive as the standard European welfare state - not yet. We are three entitlement programs away from eradicating the trans-Atlantic differnces: universal child care, universal paid family leave, and single-payer health care.

A generous interpretation of the Affordable Care Act (ACA) is that it took us half way to a single-payer system, reducing the distance to the European welfare state to 2.5 entitlement programs. As Republicans fail to unite around a roll-back plan for the ACA, they effectively remove the last obstacles for Democrats to make the final leap from today's half way model to a single-payer system. One need not go to Europe to figure out how bad this idea is; just consider the proposal for a state-level single-payer system in Colorado.

On top of that, Democrats have been favorable to universal preschool or child care - or both - since at least 2010.

At the state level, Democrats are actively pushing paid family leave at the state level, for example in New York and in the District of Columbia. Their latest presidential candidate made it part of her platform. There is no doubt that the American left harbors a deep desire to "complete" the construction of the welfare state.

Because of the serious, long-term consequences that the welfare state has had in Europe, it is imperative that conservatives and libertarians resist new entitlement programs, and that they present a clear, concise alternative to the welfare state. With this in mind, it is incomprehensible that a reputable think tank like the AEI has chosen to get on board with welfare-state expansion - unless, of course, they have chosen to redefine themselves and abandon their former conservative, free-market values.

That would be sad, because the fight over the welfare state is not just a fight to save our prosperity, although that is where most of the battles will be fought. But it is also a question of whether the United States of America is a country defined by principles of limited government, free markets and personal responsibility; or if it is just another egalitarian welfare state. 

This is a question of how ideas shape the lives of 320 million Americans here and now, not to mention coming generations. Therefore, it imperative that conservatives and libertarians accept the challenge from welfare-state protagonists and meet them head on. 

A good place to start is to counter the welfare-statist proposals from the American Enterprise Institute. For example, here is what Columbia University professor of social work Jane Waldfogel writes for the AEI:

More than twenty years ago our country enacted the Family and Medical Leave Act (FMLA), recognizing that workers should not lose their jobs because they have a new child, have a close family member who needs care due to a serious illness, or are seriously ill themselves.  ... The Act has since been amended to recognize special caregiving needs that may arise when family members are serving in the military or are injured during that service. I believe that as we move toward a national paid family and medical leave policy, our goal should be to offer paid leave for all the types of leave covered under the FMLA.

This entitlement package would cost taxpayers north of $1 trillion per year. It would create a spending program that exceeds Social Security in size, administrative rigidity and regulatory complexity.

Impervious to the gargantuan cost of her entitlement proposal, Waldfogel continues:

Parental leave — to care for a newborn or newly adopted or newly placed foster child — is the simplest policy to design and enact. ... Other family leaves – to care for a child, parent, spouse, or other close family member with a serious illness such as cancer, or to provide care related to a family member’s service in the military – can be just as necessary, but may occur more than once or twice, may occur unexpectedly, and may be harder to define and verify. Similar challenges apply to medical leave. For these reasons, there is currently a debate about whether the US should enact a national paid family and medical leave law or should move first on enacting paid parental leave. I favor the more comprehensive approach, because it would be unfair to offer one employee paid leave to care for a newborn while not offering paid leave to a co-worker to care for a child or other close family member with cancer, to receive treatment for cancer him/herself, or to care for a family member who needs care related to service in the military. Moreover, if all employees are going to pay into a program, it’s only fair that parents and non-parents should benefit.

 The AEI has published a 21-page report specifically on paid parental leave. It is co-authored by Ben Gitis, director of labor market policy at American Action Forum, an organization that

injects forward-thinking ideas into the public debate that will build a better economic future, promoting innovative, free-market solutions to create a smaller, smarter government.

The other co-author is Angela Rachidi, research fellow in policy studies at the AEI. In other words, both authors represent organizations that traditionally would be considered closer to free-market ideals than welfare statism.

Paid family leave is one of the most destructive entitlements ever invented. Regardless of whether it takes the form of a traditional government-run entitlement program, or a micro-managing regulatory package, it imposes serious costs, both ethically and economically, on families and businesses. These costs are largely unknown to an American audience, which is why I am going to address them in a series of blog articles, from its ideological core to its fiscal consequences.