The Liberty Archive FREECAPITALISTS.ORG

Chapter 439 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt

Revolt against Spending

633 words · All 943 chapters

November 21, 1955

Immediately before last year’s Congressional elections, I pointed out in this column (Nov. 1) that the “middle-of-the-road” and semi-New Deal policies being pursued by the present Administration would probably be the main cause of a Republican Congressional defeat if it occurred. Following those elections (Nov. 22), I remarked that the real danger of the Republican defeat that had just occurred was that “Administration Republicans . . . may interpret the result as a repudiation of President Eisenhower’s more conservative policies and a public demand for return to New Dealism—to big government, big spending, inflation, and subserviency to labor-union bosses.” Unfortunately, this interpretation did in the main prevail. In this year’s local elections we have had further Democratic gains. And once more it is widely argued that this is because the Eisenhower Administration did not go sufficiently left.

A more plausible interpretation is the very opposite—that the Democratic voters, as usual, voted for Democrats, but that a substantial percentage of conservative Republicans, disheartened by the abandonment of traditional conservative Republican policies on the part of the Administration, simply stayed home—as they did in the Truman-Dewey election of 1948 and as they did last year.

It might be difficult to prove this interpretation statistically if we did not happen to have direct evidence that whatever caused the election of more Democrats and fewer Republicans, it was not a drift of the electorate toward the left. This direct evidence shows, on the contrary, a return toward conservatism. It shows a revolt, above all, against the constant increase of government spending.

The most dramatic example of this was in Ohio, where, in the face of tremendous CIO propaganda, the voters overwhelmingly rejected a proposal to increase the state’s unemployment-compensation benefits from a maximum of $33 to $50 a week, to extend the length of time a person can receive benefits from 26 to 39 weeks, and to permit the payment of state unemployment benefits to people drawing out-of-work pay from private industry. The votes of many factory workers, including rank-and-file CIO members themselves, must have been against this proposal to bring about such a defeat.

Only slightly less dramatic were the results in New York State. Here the voters heavily rejected a proposed constitutional amendment to authorize a $750 million bond issue for highway construction. They defeated a proposed amendment authorizing local governments to borrow in excess of their debt limits for sewage systems. They rejected a proposition to authorize the lending of $50 million in state housing funds for “middle income” housing. They very nearly defeated the proposal to increase annual subsidies for low-rent housing from $25 million to $34 million. In New York, such housing subsidies have hitherto been approved by overwhelming majorities.

Over the country as a whole, the balloting resulted in the defeat of 75 percent of the bond issues proposed to finance road building and other projects. This reversed the pattern of recent years in which the voters have ratified an average of 85 percent of the bond issues submitted to them.

Let us hope that the lesson will not be lost in Washington. If people in our richest states have finally decided that they cannot afford to keep on piling up debt for more roads and other improvements in their own localities, what, do you suppose, would happen if they were permitted to vote directly on the Administration’s grandiose national road-building program, or on its policy of scattering subsidies totaling $4.7 billion to dozens of foreign governments?

Next week I expect to write about the spread of the political delusion that the government can draw on a sort of Fourth Dimension to supply everybody’s needs or wants without taking the corresponding dollars or goods away from anybody else. This year’s elections show that the voters are less subject to this delusion than most of our politicians.

Business Tides: The Newsweek Era of Henry Hazlitt

Read the whole book online · Book details

This work is published under a Creative Commons licence. You may copy, share, and re-host it with attribution.