The Dismal Science
The Lost Fig Leaf
Why the conservative revolution failed.

By Paul Krugman
(999 words; posted Thursday, Sept. 26; to be composted Thursday, Oct. 3)

       "You now work from the first of January to May just to pay your taxes so that the party of government can satisfy its priorities with the sweat of your brow because they think that what you would do with your own money would be morally and practically less admirable than what they would do with it. ... Somewhere, a grandmother couldn't afford to call her granddaughter, or a child went without a book, or a family couldn't afford that first home because there was just not enough money. ... Why? Because some genius in the Clinton administration took the money to fund yet another theory, yet another program, and yet another bureaucracy." The words are Bob Dole's (actually, they're Mark Halperin's, but Dole said them in his acceptance speech in San Diego). They are the key to understanding why the Republican Revolution, which seemed so unstoppable only a year ago, has stopped.
       Dole's speech tried to put over, one more time, the fiction that the federal government takes away your hard-earned money and spends most of it on things that only social workers want. Supply-side economics, with its promise that tax cuts would pay for themselves, may have given conservatives the courage to be irresponsible. But what sold the public on conservatism was the images of vast armies of bureaucrats and of welfare queens driving Cadillacs.
       Conservatives were able to get away with such stories for one main reason: They could always blame their failure to slay Big Government on the Democrats who controlled Congress. Then they suddenly found themselves in control--and the fig leaf was gone. Spinmeisters of the right are already saying that this election was all about tactics--that if only Dole were a better campaigner, if only Clinton hadn't shamelessly veered right, if only Gingrich hadn't thrown a tantrum on Air Force One, the conservative wave would have rolled on. And they insist that this looming defeat is only a temporary setback. But the truth is that the political appeal of radical conservatism has always been based on a fundamentally untrue vision of what the federal government is and does.

To get an idea of the gap between conservative mythology and reality, let's look at the best book published in America. It's called The Statistical Abstract of the United States, and if more people would get into the habit of checking it, our politics would be utterly transformed.
       The Statistical Abstract makes it quite easy to get a realistic picture of where your tax dollar goes. For example, here is a list of 10 major federal programs. The number after the colon indicates each program's percentage of fiscal 1994 spending:
  • Social Security: 21.6
  • Defense: 18.9
  • Interest on the debt: 13.7
  • Medicare: 9.7
  • Medicaid: 5.8
  • Pensions for federal workers: 4.2
  • Veterans' benefits: 2.6
  • Transportation (mainly highways, air traffic, etc.): 2.6
  • Unemployment insurance: 2.0
  • Administration of justice (courts, law enforcement, etc.): 1.1

There are three important things to say about this list. The first is that it encompasses the bulk of government spending--82.2 percent, to be precise. Anyone who proposes a radical downsizing of the federal government must mean to slash this list.
       The second is that with one possible exception, these are programs that the public likes--they are not at all what people object to when they rail against Big Government. We believe in honoring our debts. We like our strong military; indeed, Bob Dole wants it stronger. We like our highways. We want strong law enforcement. The only possibly unpopular item on the list is Medicaid, which is the only "poverty" program. But Medicaid is increasingly a program of aid not for the poor per se, but rather, for the old. More and more of it pays for nursing-home care--and many of those patients have middle-class children.
       And that brings us to the third point: Aside from defense and interest payments, the U.S. government is now mainly--yes, mainly--in the business of taxing the young and giving money to the old. Look at that list, and consider how utterly shameless Dole was in imagining a grandmother who couldn't afford to call her granddaughter because she pays too much in taxes. That grandmother almost surely lives better than people of her age ever lived before, supported by Social Security checks that will greatly exceed the value of the contributions she and her husband paid into the system. And her children could easily have sent her the money for phone calls, except that their Medicare contributions had to cover her hip replacement.

There is a good case to be made that America's gerontocracy has gone too far, that we are too generous to our retirees, especially to those who could afford to do without some of those benefits. But that is not a case the right has ever made. An honest advocate of smaller government would campaign not against elitist bureaucrats but against nice middle-class retirees in their Florida condominiums. Somehow, that wasn't in Dole's speech.
       It isn't as easy to summarize federal regulation as it is to summarize federal spending, but the basic point is similar: Most of what the government does is actually serving, not opposing, the public's will. Lots of people snicker at snail-darter jokes, but only a small minority wants to see a repeal of the clean-air or clean-water laws. And the voters are prepared to punish those Republicans whom they suspect of belonging to that minority.
       Of course, the federal government wastes a lot of money; so does the private sector (have you read Dilbert lately?). But the kind of oppressive government, run by meddling elitists, that Bob Dole tried to tell us about in San Diego exists only in the conservative imagination. And that is why Gingrich and Dole did not snatch defeat from the jaws of victory. Their reversal of fortune was preordained, because their doctrine could not withstand the responsibility that came with success.


The full text of Dole's Aug. 15 acceptance speech at the 1996 Republican Convention is on the Web. So are the "more than 1,400 tables and charts covering over 30 subjects" that make up the Statistical Abstract of the United States 1994.

Paul Krugman is a professor of economics at MIT whose books include The Age of Diminished Expectations and Peddling Prosperity.

Illustration by Robert Neubecker