Another Application of Conquest's Law


Washington. -- Before learning what Conquest's Law is consider some recent episodes of government that illustrate the Law.

Last year Congress, sensing that just a slight touch or two on the tiller of the ship of state would put America on course to perfection, passed a bill to regulate cable television, the complaint of consumers being that prices are "too high." Trouble is, the new law means a gusher of regulatory business for the Federal Communications Commission, such as holding rate hearings and listening to consumers griping.

So now the FCC wants to charge cable TV companies $16 million to pay for 240 additional bureaucrats needed to cope with the new law. If Congress approves the fee, cable companies will be able to pass the cost along to consumers. And the fee may not be enough. The FCC's interim chairman says his office space is already overflowing and he will be hard pressed to find room for his new troops. Call this "reinventing government."

The reinvention was supposed to involve "reining in entitlements" (to ease "the deficit crisis"). But President Clinton is proposing a new entitlement for a portion of his class -- the political class. It is public financing for candidates for House and Senate seats. This program was presented as an exhibit of the New Responsibility: The entitlement would be "revenue neutral," paid for by revenues raised by ending the tax deductibility of lobbying expenses. Said Mr. Clinton, "not one red cent" from elsewhere would be needed to pay for the bill.

Trouble is, the money from ending the lobbyists' deduction -- perhaps more than $100 million in 1994 and $800 million over four years -- is already allocated. It is counted in President Clinton's 1994 budget as general revenues for deficit reduction.

Mr. Clinton is trying to assuage public cynicism about deficit reduction by concocting a cynicism-inducing deficit "trust fund" that will not reduce the deficit by a dime, and which members of his own administration describe as "symbolism" and "a display device." The administration should instead try trustworthy bookkeeping.

Last week the House Ways and Means Committee began the repeal of a recent adventure in symbolism. The committee undid one of its blunders that was part of the 1990 budget deal.

The deal-makers, dealing in the symbolism of "fairness," imposed a luxury tax on yachts, airplanes, jewelry, furs and expensive cars. This supposedly would raise both money and the morale of the toiling classes. Trouble is, it cost lots of toilers their jobs.

The 10 percent tax on yachts costing more than $100,000 went into effect January 1, 1991. Sales of such yachts plummeted 70 )) percent in six months, much more than could be blamed on the recession (which could be blamed in part on the tax increases in the budget deal).

Shepard McKenney, chairman of a yacht-building company in Maine, patiently explained that yachts are efficient redistributors wealth: "A typical $1 million yacht requires 12,000 labor hours (eight worker years) to build, not counting all the manufactured parts supplied by other domestic industries, which provide their own employment, or the considerable labor required to maintain such a yacht."

The Joint Economic Committee of Congress estimated in the first six months that the luxury tax on all items cost $159.6 million in lost wages. In the first year a third of all U.S. yacht-building companies stopped production and more than 20,000 yacht-builders lost their jobs.

The luxury tax (except on cars, which is partly a protectionist measure) is about to be repealed. The false assumption behind the tax was that the rich would not alter their behavior because of tax disincentives. The same assumption is behind the administration's optimistic revenue projections for the higher income tax for "the rich."

The luxury tax was a "deficit reduction" measure, as is the administration's energy tax, which a University of Oklahoma study estimates will cost that energy-intensive state 11,000 jobs. Louisiana, Alaska and Wyoming also will suffer immoderately. Will Congress pass the energy tax while repealing the luxury tax? Don't bet a lot on it. Or against it.

Explaining why so much of the tax bill was debated behind closed doors, Dan Rostenkowski, chairman of Ways and Means, used thumbs-up and thumbs-down gestures. The New York Times reports, "He said he did not want his members to have to look to lobbyists in the audience for thumbs-up or thumbs-down signals before they spoke or voted."

The implications of Mr. Rostenkowski's explanation, together with the episodes cited above, underscore the application to government of Conquest's Law, promulgated by Robert Conquest, historian and poet. It is:

To anticipate the behavior of an organization, assume it to be controlled by a secret cabal of enemies determined to discredit it.

George F. Will is a syndicated columnist.

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