The Magazine

Look to Lincoln

Not to FDR, when designing legislative agendas.

Apr 6, 2009, Vol. 14, No. 28 • By WILLIAM J. STUNTZ
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Obama's program is more Rooseveltian than Lincolnian. Whether the stimulus works depends on the wisdom of Larry Summers and Nancy Pelosi, who appear to have been its primary authors. (Now there's an odd couple.) Geithner's proposed bank rescue plan will succeed if Geithner has given hedge funds enough incentive to invest in toxic assets while bearing enough risk if those assets prove worthless--i.e., if Geithner made all the right calls. As for green energy, cap-and-trade will succeed in reducing emissions without destroying the economy only if the number and size of permits are correct: too many, and carbon-based emissions won't decline; too few, and a host of businesses will be driven into bankruptcy. The success of cap-and-trade also depends on Congress's willingness to resist the temptation to tinker with the permits. Good luck with that. The administration's health care and education programs are as yet unclear, but it seems a fair bet that they too will be exercises in centralized, command-and-control governance.

This is worrisome, for two reasons. The first has to do with the politics of legislation. No 1,000-page bill will be written by 535 members of Congress, or by the few hundred who belong to the majority party (or by their staffers, to whom the drafting is usually delegated). In order to avoid the death of a thousand cuts, those who back the relevant legislation must do the drafting behind closed doors--and in order to be sure the doors stay closed, the number of people involved in the drafting must be kept small. No matter how many degrees they have, a handful of people sitting around a conference table are unlikely to devise wise plans for large sectors of a complex economy.

Which leads to the second reason: The Lincoln model regularly succeeds; Rooseveltian legislation usually fails. Consider the following examples of simple and successful legislation. The Sherman Antitrust Act of 1890 embodied a simple idea in simple language: "[e]very contract, combination .  .  . or conspiracy, in restraint of trade or commerce" is illegal. That proposition guaranteed competitive markets, the key factor in America's long economic dominance. The G.I. Bill fueled the long post-World War II economic boom by investing in veterans' education; what those veterans made of the investment was up to them. Even as it raised the safety and lowered the price of shipping goods, Eisenhower's Defense Highways Act made possible the rise of middle-class suburbs. The Civil Rights Act of 1964 created an integrated national economy; the Voting Rights Act of 1965 created an integrated democracy. Both acts gave black Americans opportunities they had long been denied. Obama's presidency is evidence of the success of that venture. All these pieces of legislation depended on the energy and talent of the private citizens they benefited.

Top-down, command-and-control legislation is inevitably more complicated, and the list of successful statutes of that sort is a good deal shorter. The Clean Air and Clean Water Acts of the 1970s were massively complex; nevertheless, they worked well, as those of us who remember smog alerts and polluted bays and rivers can testify. So did welfare reform in the 1990s--another notably complex legislative endeavor. Sometimes, government regulators get it right. But even those success stories are double-edged. Welfare reform worked because welfare recipients did so: The victory was as much theirs as any government official's. As for the landmark environmental legislation of the Nixon and Carter presidencies, America's economy performed poorly in the 1970s and early 1980s. Environmental progress may have carried a higher price tag than politicians imagined. Not an encouraging story for supporters of cap-and-trade.

The lesson seems clear enough. Banking on the innovation, hard work, and entrepreneurial spirit of ordinary Americans is smart policy. Betting on the wisdom of staffers in the White House and on Capitol Hill isn't.