The Consequences of Big Government

As Charles Murray wrote in his book "What it means to be a libertarian," government can displace but it cannot replace. When government hauls in big taxes and spends lots of money on government programs, people change their behavior. An analogy that Murray uses is that because his wife always makes sure that the doors are locked before going to bed, he feels no need to check the locks on the doors himself.

Michael Barone discusses the effects of big government in New Jersey in a recent post to his personal blog site.

Another example of the power of public-employee unions, and the destruction they are wreaking on a once thriving private sector economy is in New Jersey. Steven Malanga of the Manhattan paints the picture in "The Mob That Whacked New Jersey." Here are his concluding paragraphs:

Aided by the courts and the vast expansion of budgets during the flush 1990s, New Jersey's tax eaters have little by little created a full-fledged example of the kind of regional government that the Left touts these days—a government that forces businesses and residents who have fled the dysfunction of the cities to pay the tab for those urban problems, whether they like it or not.

Further, Jersey is part of a cultural shift that is changing politics in many northeastern areas, as some high earners abandon traditional middle- and upper-class fiscally conservative values and vote liberal instead. In national elections, Jersey today is now reliably in the "blue" column. The trend is also showing up in local elections, where longtime Republican strongholds like Millburn, Summit, and Madison have elected Democratic city councils and mayors for the first time. Jersey may soon resemble its neighbor, New York City, as a place where the rich who tolerate high taxes or consider them a social obligation live side by side with the poor, but with a shrinking middle class.

In short, it may be that New Jersey, having for years enthusiastically welcomed New York's residents and jobs, is now watching the Empire State take a measure of revenge as its neighbor settles into a familiar high-tax, low-growth inertia. Jersey has caught a bad case of the blue-state blues.

Third, many on the political left complain about the disappearance of the middle class, the alleged tendency of our economy to produce hefty income growth for those at the upper end of the economic scale and relatively little income growth for the large number at the lower end. Interestingly, this tendency toward income inequality is most pronounced in states that have been voting Democratic in presidential elections—especially New York, New Jersey, Connecticut, and California. Income inequality tends to be much less in many states that vote heavily Republican. New York, New Jersey, Connecticut, and California have imported many high-income earners and low-income immigrants and have been exporting many more middle-income earners. This process is accelerated when, as in these four states, high-income earners have been eager to vote for Democrats backed by public-employee unions: The same people who have been complaining about this trend have been causing it.