Shaping the ‘social insurance state’

SHAPING THE ‘SOCIAL INSURANCE STATE’…. David Frum’s piece cheering the the modern American welfare state has generated quite a bit of attention this week, and for good reason. It offers a center-right perspective that struggles to exist in modern conservatism.

Frum, for those unfamiliar with his work, is, in fact, a conservative. He was a speechwriter for George W. Bush, a member of Rudy Giuliani’s campaign team, a supporter of the McCain/Palin ticket, and a fellow at the American Enterprise Institute.

But Frum also seems to be reevaluating the most basic tenet of conservatism: its hostility towards the welfare state.

In his piece, Frum explains that the right’s guiding principles broke down and the larger societal “trade” ultimately failed during the Bush era.

Especially after 2000, incomes did not much improve for middle-class Americans. The promise of macroeconomic stability proved a mirage: America and the world were hit in 2008 by the sharpest and widest financial crisis since the 1930s. Conservatives do not like to hear it, but the crisis originated in the malfunctioning of an under-regulated financial sector, not in government overspending or government over-generosity to less affluent homebuyers. Fannie Mae and Freddie Mac were bad actors, yes, but they could not have capsized the world economy by themselves. It took Goldman Sachs, Merrill Lynch, AIG, and — maybe above all — Standard & Poor’s and Moody’s to do that.

In the aftermath of the catastrophe, the free-market assumption and expectation that an unemployed person could always find work somewhere has been massively falsified: at the trough of this recession, there were almost 6 jobseekers in the US for every unfilled job. Nothing like such a disparity had been seen since the 1930s. The young faced the worst job odds. But some of the most dismal outcomes were endured by workers in their 50s, laid off from middle-class jobs likely never to see middle-class employment again.

GK Chesterton once wrote that we should never tear down a fence until we knew why it had been built. In the calamity after 2008, we rediscovered why the fences of the old social insurance state had been built.

This is not only a striking admission from a conservative, it’s also vaguely reassuring. As Kevin Drum noted the other day, “It’s nice to read it because it’s such an unusual concession to reality. The financial crisis of 2008 was a stupendous event, and it’s frankly stunning to me how few people seem to have responded to it in any substantive way. Occasional throat clearing aside, it’s been business as usual for a huge chunk of the political, business, and pundit class, especially on the right.”

Just as important, this approach seems to have led Frum to reconsider the very idea of public benefits he found unnecessary in years past.

…I cannot take seriously the idea that the worst thing that has happened in the past three years is that government got bigger. Or that money was borrowed. Or that the number of people on food stamps and unemployment insurance and Medicaid increased. The worst thing was that tens of millions of Americans — and not only Americans — were plunged into unemployment, foreclosure, poverty. If food stamps and unemployment insurance, and Medicaid mitigated those disasters, then two cheers for food stamps, unemployment insurance, and Medicaid. […]

I strongly suspect that today’s Ayn Rand moment will end in frustration or worse for Republicans. The future beyond the welfare state imagined by Yuval Levin will not arrive. At that point, Republicans will face a choice. (I’d argue we face that choice now, whether we recognize it or not.) We can fulminate against unchangeable realities, alienate ourselves from a country that will not accede to the changes we demand. That way lies bitterness and irrelevance. Or we can go back to work on the core questions facing all center right parties in the advanced economies since World War II: how do we champion entrepreneurship and individualism within the context of a social insurance state?

The same piece quotes Irving Kristol arguing in 1995, “The idea of a welfare state is perfectly consistent with a conservative political philosophy — as Bismarck knew, a hundred years ago. In our urbanized, industrialized, highly mobile society, people need governmental action of some kind … they need such assistance; they demand it; they will get it.”

Frum concludes, “Conservatism’s task is to shape that social insurance state, not repeal it.”

In 2011, this isn’t just heresy in Republican circles; it’s no longer what one might even call “conservative.” Leading GOP voices, including the likes of Paul Ryan, consider a social insurance state itself a form of socialism. Food stamps, unemployment insurance, and Medicaid — the elements of a safety net Frum feels it necessary to cheer — have not only been deemed unnecessary expenses by the right in 2011, a surprising number of Republican officials have insisted these programs literally unconstitutional, along with Social Security, the minimum wage, and most of the federal government’s other functions.

Indeed, I suspect a great number of those on the right saw the piece and dismissed the author as a “liberal.”

And that’s a problem. What Frum’s piece reminded me of is the basis for a modern conservative political party — in other industrialized democracies. Other countries have conservative parties, but it’s obvious that they’re not nearly as far to the right as our Republican Party, and Frum’s essay help get to the heart of the difference. Around the world, “conservatives” believe in a safety net and a social insurance state. As recent elections in Canada and England show, conservatives tend to go out of their way to make it clear they won’t dismantle the foundations of the welfare state. This existed the same way in the U.S. for much of the post-WWII era.

Of course, any hopes that modern conservatism might return to a worldview consistent with Frum’s vision is folly. The right has simply gone over a cliff — jumped, really — and has no interest in climbing back up.

But I can’t help but wonder how constructive our political process and public discourse would be if there were still conservative Republicans who were capable of perceiving reality as Frum does.