Jack Kemp arrived in February 1989 at the dark halls of the Department or Housing and Urban Development (HUD). During the Energy Crisis, the lights had been dimmed to save electricity, but as secretary, Kemp ordered them turned up. With that action, he began a two-year spending spree which has transformed its colossal concrete headquarters in L’Enfant Plaza, Washington, D.C., from a hated leftist agency to a beloved center for neoconservative social activism.

It’s hard to remember, but HUD was on the ropes three years ago. Every day brought new media revelations about widespread corruption under the disgraced regime of secretary Samuel R. Pierce. The Washington Post had its crack reporters sniffing out every detail. The agency seemed irreformable, and calls for its abolition were growing. At the very least, devastating budget cuts were imminent.

But who remembers the “Robin HUD” incident today? (That was the media name for the employee who stole $6 million, supposedly to give it to the poor.) Even though a recent internal audit by Price Waterhouse, which Kemp won’t release to the public, showed that corruption is just as rampant, Kemp has changed the agency’s public image. Thanks to his efforts, its budget has been growing 15 percent per year, completely reversing the minor cuts of the Reagan years. But that’s not enough; Kemp now wants a 32 percent increase for next year. Early in his tenure, Kemp was asked by this writer why U.S. taxpayers should entrust their money to the agency after its long history of waste, fraud, and abuse. “Because I’m in charge now,” he said.

In September 1989, in a piece of forgotten history, two Kemp aides, Ken Blackwell and C. Austin Fitts, sent Kemp a memo urging him to hold a massive fire sale of housing under government control, with thousands foreclosed-upon properties included. Prices would be set at their market level and made available for sale to whoever would buy. Prices would fall every day by one percent until each one was sold. The government would be done with it.

Nice idea. At least it might have compensated for the tax dollars used to save the eyesight of HUD bureaucrats. But Kemp didn’t take up the idea, and it went nowhere. An even better idea would have been to sell all public housing to the highest bidder, and let the new owner charge market rent. It would have encouraged some degree of responsibility.

But today, Kemp’s eyes are focused on another program: Housing Opportunity for People Everywhere (HOPE), enshrined in the 346-page housing bill signed by Bush in November 1990. HOPE is the name for a big pile of money (about $2.1 billion, if Kemp gets his way) earmarked to facilitate the conversion of HUD-funded housing blocs into resident-managed (or partially owned) properties.

Kemp’s promise not to squander money might have been plausible before April 1991. That’s when the agency’s bête noire, the National Journal, revealed the truth behind a beloved showcase for tenant management and housing ownership, Washington’s Kenilworth-Parkside housing project and its administrator Kimi Grey, the welfare queen whom the Bush administration has tried to make into a national hero. Once a haven for drug dealers, violent criminals, and hopeless cases, it was supposed to have been converted into a vibrant community of apartment owners who have been “bootstrapped” onto the fast track of mainstream life. So the story goes, though it still looks like a housing project, albeit with trimmed hedges and lower than expected crime rates.

It turns out, according to the Journal, that Kenilworth-Parkside is the most expensive public housing project in American history. Add up all the costs of renovations, subsidies, relocation funds, etc., and federal and local governments will spend $130,000 per apartment at Kenilworth-Parkside to complete Kemp’s plans. That’s the price of an upscale townhouse in suburban Alexandria, Virginia. Renovation at the project took the pace of, well, a government project: the first grant was awarded in 1982, and the renovation and “sales” are far from finished.

The National Journal article should have done an enormous amount of damage, and made Kemp and his program the subject of wide ridicule. People joked about the revelation at private Washington parties. But the news that Kemp’s program cost $130,000 per apartment didn’t travel outside the Beltway.

HUD does its best to cover up such information. A glossy book targeted at the public and distributed by the agency (“Home Ownership and Affordable Housing: The Opportunities”) features pictures of Kimi Grey receiving the key to 132 renovated units. But the book makes no mention of the rise in costs. The agency’s book lists no aggregate figures for any of the 17 “successful” cases of conversion to tenant ownership, giving it the ring of an elaborate disinformation campaign. But it does quote Kemp saying he wants to “replicate the spirit and success of this home ownership program throughout the Nation.”

Why does it cost so much to sell public housing? After all, the decision to sell usually implies an expectation of profit. But not at HUD. “These sales,” says the agency, “will be complex transactions, requiring planning for rehabilitation, counseling of tenants, organization development, and planning for economic development activities.” Those are code words for a bureaucratic bonanza. Yet Kemp wants to replicate the Kenilworth experience with the nation’s 13,000 public housing projects, with critics estimating the cost at $75 billion.

Once the transaction is complete, we find that none of these poor people will actually “own” anything, if ownership implies control. The government sets the price at which they are sold, one which people below the poverty line can afford. The “owners” continue to receive regular subsidies for five years, and there is plenty of money available after that during economic downturns.

A survey by Stegman and Robe asked public housing residents the reasons for wanting ownership, and 67 percent of them said it was a good financial investment. But under the Kemp standards of “ownership,” it is not. The owners cannot put their places on the open market, but can only sell it back to the government, or to a government proxy, which then allows only poor people to “buy” it. And for the first twenty years, the person is not allowed to make money from sales because “undue profits” are disallowed by law. This is not a market: it is what Ludwig von Mises called “playing market.” As Cassandra Chrones Moore pointed out in National Review, HUD rules for housing ownership parallel the Soviet system for land ownership, except the Soviet system is slightly freer.

The agency publishes a monograph of questions and answers about HOPE. The first question: How does HOPE fit into a national housing strategy for low-income people? Answer: “The Department’s housing strategy includes maintaining the existing subsidized housing stock—through programs such as public housing operating subsidies and modernization, preservation, and renewal of Section 8 contracts—while expanding the number of households served through housing vouchers and certificates.” That’s some vision.

If you were under the impression that Kemp is trying to move away from public housing, the monograph is quick to correct this. “In fact, we’re doing the opposite . . . because all units sold will be replaced on a one-for-one basis, we are actually doubling the stock available.” For every unit sold, another public housing unit goes up. Though this is like using bug spray that breeds a roach for every one it kills, in 1992, HOPE will spend $270 million on “Public Housing Replacement.”

In the Orwellian language of Kemp’s agency, providing “opportunity” actually means giving more cash grants for much more than the fundamentals. Thus the poor get not only a house, but social therapy as well. For example, the “Elderly Independence” project of HOPE is openly welfarish. It promises to provide more “comprehensive” care than when the liberals were in charge. The “frail elderly” get funds for “personal care, case management, transportation, meals, counseling, supervision, and other services essential for achieving and maintaining independent living.” This is encouraging independence, Washington-style.

Another part of HOPE is the “Shelter Plus Care” program dedicated to “ending the tragedy of homelessness.” In its literature, the agency provides a chronology of the great deeds this division has done between May 1989 to January 1991. Adding up all the expenditures for these deeds, the bill comes to over $1 billion. Kemp has asked for another 22 percent increase in the program for 1992.

Amidst all this fretting about the homeless, the Census Bureau reports that in the rest of America, the average age of first-time home buyers is 31 today, compared to 28 in 1976.

It is virtually impossible for young couples to raise money for a home without outside help, usually provided by their parents. The country is getting poorer, thanks to agencies like HUD, but few seem interested in this problem.

In budget battles, Kemp spends his time and energy lashing out at anyone who dares question his demand for nearly $900 million in grants for his HOPE program, even though that’s a 450 percent increase over the 1991 budget. The Senate wanted to appropriate “only” $440.4 million and the House only $361 million. But that’s unacceptable, according to Kemp, because it puts “HUD’s FY 1992 budget on a collision course with very important housing needs in the future,” Kemp told congressional conferees. He also blasted Congress for suggesting staffing cuts in the Office of Policy Development; cuts would “make it extremely difficult for this Office to function effectively,” he wrote.

That’s what we get from a man who describes himself (most recently to the Washington Post) as a “bleeding-heart progressive liberal democrat—small 1, small d—Abraham Lincoln private-property-based conservative.” He speaks often for conservative groups around Washington, D.C., delivering roughly the same message at each gathering. He attacks old-line conservatives in terms as strange as those he uses on liberals. Vintage Kemp: “How can the poor pull themselves up by their bootstraps if they don’t have any boots?!”

Between speeches, he tours housing projects in big cities to demonstrate his concern for the poor, the cameras always on hand to capture the moment. Conservatives may be amused at his bravado, but then sit back comfortably on the belief that if Kemp is not openly dismantling federal housing programs, he is doing so covertly, or at the very least improving the situation.

But there is no mystery about what Kemp is up to. He is erecting a conservative welfare state of a peculiar variety, and piling it on top of an already existing liberal one. To the taxpayer, the ideological label makes no difference. Kemp does get needled from the right from time to time. The National Review has attacked the home ownership program in strong terms, but ultimately places the blame for flaws on Congress, a tactic that worked to keep Reagan’s reputation alive among conservatives for his two terms. The National Right to Work Committee has blasted Kemp for favoring unions in the distribution of housing contracts. I have criticized in these pages Kemp’s enterprise zone program as a covert subsidy program for business. And a conservative activist group, the Stamp Out Crime Council, has blasted Kemp’s decision to provide community development block grants to illegal immigrants. (Kemp’s defense: “discrimination against illegal aliens . . . would frustrate the basic purposes” of HUD; besides, “whether alleviating hunger and homelessness, combating child abuse, minimizing substance abuse, or providing crises intervention, the community as a whole benefits.”) But somehow these criticisms from the right don’t stick. The faith that a bureaucracy like HUD can promote conservative ends stays alive.

But the bottom line on bureaucracies is that they don’t work well. From an economic standpoint, it doesn’t matter whether conservatives or liberals are running them. The administrators toy with money that is not their own; employees are under no constraints to serve the consuming public; and managers operate without the benefit of a profit and loss system to guide decision making. These used to be critiques the right offered as a matter of course. But sometime between 1980 and 1990 this wisdom was tossed out, and now we suffer under rightwing welfarism not substantially different from the left-wing variety.

In fact, if HUD were leveled today, it would be Washington’s right wing, not left, that would scream bloody murder. It serves as useful employment for conservatives who came to Washington to participate in a revolution, but who now occupy the offices of government agencies, and use those positions of established power while claiming to promote their social goals. Almost everyone identified with the “conservative movement” in Washington has a “good contact” at HUD. Kemp continues to harbor hopes of getting the presidential nomination in 1996. Is it possible that his record of providing cash giveaways—unpopular with the public but immensely popular with those getting the loot—can be the basis of a Republican campaign? If so, that tells us much about the new political equilibrium that has settled upon America—and the desperate need to reassert the old conservative view, long forgotten, that the free society requires limitations on government power.