Original post March 3, 2009 on "Autos and Economics" blog, moved here as part of reorganization of my blogs.
This has become a hot topic: for a related post see a Paul Krugman NYT op-ed on Texas.
This has become a hot topic: for a related post see a Paul Krugman NYT op-ed on Texas.
One of the legacies of George Bush will be a n erosion of state's rights. There is much irony in that, because it is in direct contradiction to his self-proclaimed position of opposing the power of the Federal government in favor of those of these several States assembled.
First of course is his own push for an imperial presidency, that sits above both courts and legislature. Here we have had an administration that claimed to seek judges for our highest courts who would adhere to our founding father's faith as expressed in the Constitution. But not in practice. Who is the arbiter of what is legal? The presidency. What is the role of the legislator? To do his bidding, and if not, to be overridden in signing statements.
Second were a series of policies that intruded into historic state powers, over education, over law enforcement and in other areas. This is hardly new, and not necessarily inappropriate: there is no particular reason that the range of contemporary issues will line up neatly with the divisions of locality and state that prevailed in the past, much less the distant past. However, a number of such policies, including in education, have not been accompanied by a commensurate transfer financial resources from the federal government. In other words, while on paper states had been delegated responsibility, from their perspective these were unfunded mandates to follow federal guidelines for tasks that as often as not had long been delegated to them. So the reality has been that in the name of states rights their powers have been abrogated by the federal government in a manner costly to their fisc.
Third and not yet apparent is the long-run impact of multiple bubbles. As long as real estate prices and retail sales boomed, grumbling did not translate opposition to the above changes. With 50 states and over 10,000 localities, priorities vary widely; organizing joint "voice" proves well-nigh impossible. This is the in line with the standard "tragedy of the commons," but the common result is that states and localities throughout the US are facing budgetary pressures unknown in memory – perhaps they were worse in the 1930s, but not in my memory. For all practical purposes they are unprecedented.
Here I am making a prediction, bolstered by years of casual observation as an economist rather than a close reading of developments in local public finance. I believe, however, that states and localities in hardest-hit regions will face bankruptcy before the current recession recedes, not the least of which will be California. In the meantime, the provision of basic services such as education and public safety is being pared to the bone, and beyond, weakening these systems for years to come. The only way to stave off collapse will be through a vast expansion of subventions from the federal government. This will represent a de facto transfer of power to Washington, unlike anything seen before, wrought out of the dregs of 8 years of Republican rule.
As an economist I have mixed feelings about this; I believe that today the US is primarily a national economy rather than a collection of local economies. We can see this in our personal mobility, in the growth of retailers that are national in scope, and in the multi-state (though not yet truly national) structure of our banking system. Having political subdivisions disjoint from the geography of our economy does not (always? every?) make sense. What the Republicans have done is to undermine the status quo from multiple directions. This seems not to have been a conscious process; there certainly was no vision of a new order. But it may already be too late to shore up that old infrastructure.
In any case, the irony remains that politicians mouthing the mantra of states rights have unleashed forces that in hindsight serve instead to increase the power to the central government.
First of course is his own push for an imperial presidency, that sits above both courts and legislature. Here we have had an administration that claimed to seek judges for our highest courts who would adhere to our founding father's faith as expressed in the Constitution. But not in practice. Who is the arbiter of what is legal? The presidency. What is the role of the legislator? To do his bidding, and if not, to be overridden in signing statements.
Second were a series of policies that intruded into historic state powers, over education, over law enforcement and in other areas. This is hardly new, and not necessarily inappropriate: there is no particular reason that the range of contemporary issues will line up neatly with the divisions of locality and state that prevailed in the past, much less the distant past. However, a number of such policies, including in education, have not been accompanied by a commensurate transfer financial resources from the federal government. In other words, while on paper states had been delegated responsibility, from their perspective these were unfunded mandates to follow federal guidelines for tasks that as often as not had long been delegated to them. So the reality has been that in the name of states rights their powers have been abrogated by the federal government in a manner costly to their fisc.
Third and not yet apparent is the long-run impact of multiple bubbles. As long as real estate prices and retail sales boomed, grumbling did not translate opposition to the above changes. With 50 states and over 10,000 localities, priorities vary widely; organizing joint "voice" proves well-nigh impossible. This is the in line with the standard "tragedy of the commons," but the common result is that states and localities throughout the US are facing budgetary pressures unknown in memory – perhaps they were worse in the 1930s, but not in my memory. For all practical purposes they are unprecedented.
Here I am making a prediction, bolstered by years of casual observation as an economist rather than a close reading of developments in local public finance. I believe, however, that states and localities in hardest-hit regions will face bankruptcy before the current recession recedes, not the least of which will be California. In the meantime, the provision of basic services such as education and public safety is being pared to the bone, and beyond, weakening these systems for years to come. The only way to stave off collapse will be through a vast expansion of subventions from the federal government. This will represent a de facto transfer of power to Washington, unlike anything seen before, wrought out of the dregs of 8 years of Republican rule.
As an economist I have mixed feelings about this; I believe that today the US is primarily a national economy rather than a collection of local economies. We can see this in our personal mobility, in the growth of retailers that are national in scope, and in the multi-state (though not yet truly national) structure of our banking system. Having political subdivisions disjoint from the geography of our economy does not (always? every?) make sense. What the Republicans have done is to undermine the status quo from multiple directions. This seems not to have been a conscious process; there certainly was no vision of a new order. But it may already be too late to shore up that old infrastructure.
In any case, the irony remains that politicians mouthing the mantra of states rights have unleashed forces that in hindsight serve instead to increase the power to the central government.
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