The postwar liberal consensus, beginning with President Roosevelt’s New Deal and extending through President Johnson’s Great Society, has broken down. The Reagan Revolution did not undo it and politics in the new 21st century have now become highly contentious with neither the Democrats nor the Republicans able to push their agendas very far.
The Manhattan Institute’s James Piereson has written a book, “Shattered Consensus: The Rise and Decline of America’s Postwar Political Order,” describing how we have arrived at our current impasse. Most interestingly, he predicts that “the Democratic blue model is unlikely to succeed at restoring growth and dynamism to the American economy” and that a new system will necessarily look more like the red model than the blue model, i.e. more sympathetic to business and private sector growth than to public employee groups and beneficiaries of public spending.
There will likely be at least three central elements to the new synthesis that must eventually replace the postwar order. They are:
- A focus on growth, and the fiscal and regulatory policies required to promote it, as an alternative to the emphasis on redistribution, public spending and regulation.
- An emphasis on federalism both to encourage experimentation and innovation in the American system and to remove issues from the national agenda which contribute to division, stalemate and endless controversy.
- A campaign to depoliticize the public sector by eliminating or strictly regulating public employee unions.
Mr. Piereson promotes these three new principles of political organization on their intrinsic merits. For me there is the added attraction that each one would also improve our perilous fiscal condition by significantly reducing budget deficits. Growing the economy faster will increase tax revenue. Strengthening federalism means transferring spending programs from the national government (which is highly wasteful) to state governments which are far more efficient because they have to balance their budgets. Public employee unions are especially costly to state governments because of their strong negotiating power.
In short, the cost of government simply must be brought under much tighter control and Mr. Piereson has proposed three organizing principles which would accomplish this.