| August 15, 2012

Peggy Noonan: Let's stop talking about Europe and start talking about the states

In her most recent column, former Reagan speechwriter Peggy Noonan says it avails little to warn Americans of the coming entitlement crisis with dramatic references to a declining Europe. To most Americans, Noonan explains, even a Europe in decline has its appeal, an elegance that derives from its status as an ancient continent that has gracefully weathered the rise and fall of empires. In light of that, "We're about to become Europe!" just isn't an effective rallying cry for entitlement reform, even if it should be.

A better one: "Imagine the Californian predicament writ large!"

Noonan elaborates:

What Americans are worried about, take as a warning sign, and are heavily invested in is California—that mythic place where Sutter struck gold, where the movies were invented, where the geniuses of the Internet age planted their flag, built their campuses, changed our world.

We care about California. We read every day of the bankruptcies, the reduced city services, the businesses fleeing. California is going down. How amazing is it that this is happening in the middle of a presidential campaign and our candidates aren't even talking about it?

Mitt Romney should speak about the states that work and the states that don't, why they work and why they don't, and how we have to take the ways that work and apply them nationally.

We couldn't agree more -- and we'd extend Noonan's advice beyond Mitt Romney to anyone who wants to enact major policy reforms. Cite the states.

In 1932, when radical Supreme Court Justice Louis Brandeis promoted the idea that the individual states are laboratories of democracy, he actually didn't intend to promote limited government. Federalism scholar Michael Greves puts it this way: Brandeis' "famous dictum had almost nothing to do with federalism and everything to do with his commitment to scientific socialism." In other words, Brandeis wanted the states to become what First Things online editor Joe Carter calls "laboratories of liberalism" -- governments of geographically limited jurisdiction that would experiment with socialist policies and thereby demonstrate their efficacy, ultimately providing justification for a national takeover of the private realm.

The joke is on Brandeis. Some states -- California and Illinois come instantly to mind -- have become "laboratories of liberalism," but liberal economic policies just aren't efficacious. Credit rating agency Standard and Poor's recently docked the credit ratings of both the Golden State and the Prairie State. In California, politicians are plagued by budget and pension shortfalls, commitments they can't keep without raising taxes or cutting spending. In Illinois, per capita debt and unfunded liabilities are three times what they are in Wisconsin or Montana.

It's no wonder, then, that California residents are refugeeing to the center of the country, to states like Oklahoma and Texas, the leaders of which have assiduously sought to create a climate that encourages entrepreneurship. In 2010 alone, for example, nearly twice as many Californians moved to Texas as Texans moved to California (could it be no income tax?) -- and 1.6 times as many Californians moved to Oklahoma as Oklahomans moved to California. Call it a reversal of The Grapes of Wrath.

The governing principle of federalism, then, can be invoked to justify state-level experimentations with both demand-side and supply-side policies -- but it can't change the effects of either. Free-marketeers should cite Brandeis' "laboratories of democracy" idea, then, not because it cannot also be used to justify state government encroachments on the private sphere (it can!) but because states have experimented -- and the results suggest a free-market approach is the path to prosperity and personal responsibility the path to personal happiness.

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