Book Review: Taxpayers versus Tax-eaters, The Atlas Society | Ayn Rand, Objectivism, Atlas Shrugged

The 1960s New Left gathered together civil-rights and anti-war demonstrators, college students and draft protesters, flower children and Black Panthers. All had one thing in common: No one wanted a steady job.July/August 2005 -- Steven Malanga, The New New Left: How American Politics Works Today (Chicago: Ivan R. Dee, 2005), 157 pages, $22.50.

How times have changed. In The New New Left, Manhattan Institute senior fellow Steven Malanga identifies the groups comprising the modern New Left, and there is nary a dropout among them. Malanga, a former executive editor at Crain’s New York Business, says the Left today is an alliance of public-sector unions and nonprofit social-service providers. Government directly employs members of the first group, while the jobs of the second depend on the availability of public funding—and both sectors are prospering.

For Malanga, American politics today is a struggle between taxpayers and “tax-eaters,” the pro-government interest groups whose paychecks come from publicly funded accounts. Organized labor may be fracturing and floundering, but government-employee unions represent more than 36 percentof the public workforce. And social-service providers like Catholic Charities, once almost entirely privately funded, now have billion-dollar taxpayer-funded budgets. They contract with government agencies to provide housing, daycare, healthcare, job training, and other services to mainly low-income people.

Union leaders and charity officials also have become a formidable political force, especially in urban areas and “blue states.” While they may pose as supplicants, they possess insider knowledge of government policy processes, access to public resources, and control over a large social-service clientele, making them more than a match for the business lobby in most big cities. Moreover, the Left is dedicated to a common goal alluring to most politicians—increased public spending. The result is a new locus of power in cities across America.

Unions and nonprofits today propose specific public policies tailor-made to benefit themselves.In New York City, where public/nonprofit-sector employees make up one-third of the workforce, politicians dispense benefits to public employees to win the endorsement of Dennis Rivera, the powerful head of SEIU Local 1199, the healthcare-workers’ union. The new mayor of Los Angeles, Antonio Villaraigosa, is a former organizer for the L.A. teachers’ union. Kansas City mayor Kay Barnes once worked in a social-services cooperative and founded a women’s advocacy center. In city after city, public-sector professionals have captured power from old-line party bosses and now work in synch with publicly funded interest groups.

How to Profit from Liberalism

The modern Left has learned to frame public issues for its own economic advantage. The 1960s New Left issued lists of non-negotiable demands and manifestos calling for a new social consciousness, but not the new New Left. Unions and nonprofits today propose specific public policies tailor-made to benefit themselves. For instance, unions and community activists established the nation’s first “living wage” law in Baltimore in 1994. Over 120 cities now have such laws, which require private contractors for city business to pay a local minimum wage far above the federal mandate. In New York City, living-wage proponents also passed companion legislation prohibiting private buyers of buildings from firing any maintenance and security staff without first adopting a burdensome review process. The law, however, contains an opt-out provision—buyers are conveniently exempted from regulation if their buildings are unionized.

Malanga has fun pointing out that pro-union politicking sometimes has unanticipated if predictable consequences. For instance, some nonprofit service providers have priced themselves out of the labor market. Activists at ACORN, the radical pressure group responsible for many local living-wage laws, actually asked to be exempted from the laws that more than doubled the federal $5.15 minimum wage in some California cities. In a classic display of political hypocrisy (and economic clear-thinking), the group complained: "The more that ACORN must pay each individual outreach worker . . . the fewer outreach workers it will be able to hire."

More often, however, the modern Left protects itself while skillfully targeting its opponents with clever public-relations campaigns. Malanga notes that when unions and activists orchestrate attacks on proposed Wal-Mart store sites, they typically pronounce on the ugliness of suburban sprawl and the need to protect local merchants and historic neighborhoods. But what is seldom mentioned is the threat a non-union Wal-Mart poses to the unionized big grocery chains. Wal-Mart is revolutionizing retail merchandizing by introducing new methods of production and cost control. When it hires new employees to sell high-volume, low-price goods to eager consumers, it threatens union control over static labor markets in an uncompetitive industry. Moreover, every new Wal-Mart store undermines the Left’s theories of “market failure” and its never-ending search for poverty’s “root causes.”

Malanga neglects the Left’s ties to Hollywood and to billionaires like George Soros.Of course, it’s hardly news that the Left prefers government to the private sector. But Malanga emphasizes how the new New Left uses its insider status to assist its most radical elements with carefully crafted special-interest legislation. In 1994 he wrote a path-breaking article on the topic for Crain’s New York Business: “Nonprofits: New York’s New Tammany Hall.” It explained how unions, activists, and social-service professionals use taxpayer-funded health clinics, storefront drug-treatment centers and halfway houses, and other social services to create political coalitions for more public spending. Charity workers in the Big Apple learned to “network” and launched each other into political careers. The old coalitions of middle-class ethnics and neighborhood political clubs (which, to be sure, usually favored more public spending) are out; activists with nonprofit backgrounds are in.

In some ways, The New New Left builds upon Malanga’s earlier article, which focused solely on New York City. Here he ranges more widely across the social landscape. Unfortunately, his most salient arguments about leftist interest-group politics beg for more in-depth reporting and juicy narrative detail, and it’s a shame there’s not more of it in this short book. Also, his interest-group argument is often sidetracked by chapters critical of academic programs in “labor studies” and of left-wing journalists who write misleadingly about the poor.

Curiously, Malanga neglects to discuss the weirdest aspect of today’s Left: its ties to Hollywood money and to billionaires like George Soros. Ideological passion, not economic self-interest, propels the Howard Dean/Michael Moore crowd; it thrives on celebrity, not nonprofit careerism, and feeds off private fortune more than public funding. These people have trust funds. To understand that aspect of “the vast left-wing conspiracy” requires a different book—the one published under that title this year by journalist Byron York. (The Vast Left Wing Conspiracy, New York: Crown Forum, 2005, 278 pages, $26.95.) It is a fine companion to Malanga’s volume, helping to fill in the portrait of the contemporary collectivists working to undermine America’s individualist legacy.

‍