Tag Archives: ideology

A Fair And Balanced Economy

I have seen a fair number of articles recently suggesting that–if elected–Biden should pattern his economic approach on that of FDR.

Historians tell us that FDR was no ideologue; to the contrary, he was pragmatic. When he assumed office, he was faced with an economic situation for which there were no obvious remedies, and as David Brooks recently reminded us,

New Dealers were willing to try anything that met the specific emergencies of the moment. There was a strong anti-ideological bias in the administration and a wanton willingness to experiment. For example, Roosevelt’s first instinct was to cut government spending in order to reduce the deficit, until he flipped, realizing that it wouldn’t work in a depression.

“I really do not know what the basic principle of the New Deal is,” one of his top advisers admitted. That pragmatism reassured the American people, who didn’t want a revolution; they wanted a recovery.

One of the things about Joe Biden that I personally find reassuring is precisely that lack of rigid ideology, and what I perceive as a willingness to respond to the challenges of the moment. Sometimes, a proper response will be ambitious, sometimes cautious.

It depends.

There are two very different approaches to economic policy displayed in the comments readers post to this blog. There are those who have a favored economic system that they insist is “the” answer to every problem, and there are those who– recognizing the ambiguities and complexities of economic life– have come to terms with the fact that neither capitalism nor socialism is a one-size-fits-all answer to what ails us. Both systems are subject to distortion and capture, and both are destructive when they operate in economic areas for which they are unsuited.

Every successful economy currently operating is a mixed economy. That includes Scandanavia, which on several measures has a more robust free market than the U.S. According to research from the World Happiness Report

What exactly makes Nordic citizens so exceptionally satisfied with their lives? This is the question that this chapter aims to answer. Through reviewing the existing studies, theories, and data behind the World Happiness Report, we find that the most prominent explanations include factors related to the quality of institutions, such as reliable and extensive welfare benefits, low corruption, and well-functioning democracy and state institutions. Furthermore, Nordic citizens experience a high sense of autonomy and freedom, as well as high levels of social trust towards each other, which play an important role in determining life satisfaction. On the other hand, we show that a few popular explanations for Nordic happiness such as the small population and homogeneity of the Nordic countries, and a few counterarguments against Nordic happiness such as the cold weather and the suicide rates, actually don’t seem to have much to do with Nordic happiness.

The benefits of a comprehensive welfare state–the “socialism” element–are well documented. A reliable “floor” gives citizens a basic sense of security that research tells us mitigates crime and conflict, among other things. Taxes are high (although not as much higher than ours as Americans think), but citizens get real value for that money–they save what Americans must pay for education and health care, for example.

As economists will confirm, other than their generous welfare states, the Nordic countries are mostly free market economies–in fact, they rank high on several indexes of economic freedom. Businesses are not run by the state, nor are their employment practices dictated by the government. (That isn’t to say that there isn’t reasonable regulation of Scandanavian markets–the sort of reasonable regulation that America has largely abandoned.)

The bottom line is that any successful economy must be a mixture of appropriately-regulated capitalism and judiciously socialized public goods.

As I have noted many times, in order to operate properly, a market requires a willing buyer and willing seller, both of whom can access all information relevant to the transaction. We “socialize” police and fire protection and infrastructure provision, among other things, because that description doesn’t fit those services. (It doesn’t fit medical care, either.)  It does fit the production and purchase of consumer goods.

The challenge facing Joe Biden (and hopefully, a Democratic House and Senate) in the wake of the Trump administration’s destruction of both the economy and social trust, is to strengthen the social safety net and return a level playing field to a market that has been corrupted by crony capitalism.

That’s harder and more complicated than one-size-fits-all economic ideology. But properly implemented, it works.

Those State “Laboratories”

Ah, federalism.

Life in the 21st Century challenges our federalist system in a number of ways; it gets more and more difficult to decide–at least at the margins–what sorts of rules should be applied to the country as a whole, and what left to the individual states.

However those issues get resolved, however, our federalist system pretty much guarantees that state governments will continue to be the “laboratories of democracy” celebrated by Justice Brandeis, who coined the phrase in the case of New State Ice Co. v. Liebmann.  Brandeis explained that a “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

Most recently, state governments have been “laboratories” for the GOP’s belief that low taxes are all that is needed to stimulate economic growth.

As David Leonhardt of the New York Times recently noted,

Until recently, Kansas offered the clearest cautionary tale about deep tax cuts. The state’s then-governor, Sam Brownback, promised that the tax cuts he signed in 2012 and 2013 would lead to an economic boom. They didn’t, and Kansas instead had to cut popular programs like education.

Now Kansas seems to have a rival for the title of the state that’s caused the most self-inflicted damage through tax cuts: Louisiana.

Those who follow economic news have been aware of the painful results of the  Kansas experiment for some time. Evidently, however, the news of its dire results and the subsequent, ignominious retreat by the Kansas legislature failed to reach Louisiana–and that state’s legislators appear unable to deal with the reality of their own failed experiment.

“No two ways about it: Louisiana is a failed state,” Robert Mann, a Louisiana State University professor and New Orleans Times-Picayune columnist, wrote recently.

A special session of the State Legislature, called specifically to deal with a budget crisis caused by a lack of tax revenue, failed to do so, and legislators adjourned on Monday. No one is sure what will happen next. If legislators can’t agree on tax increases, cuts to education and medical care will likely follow.

Leonhardt places the blame for this state of affairs on Bobby Jindal, who came to the Governor’s office having drunk deeply of his party’s ideological Kool-Aid:

Louisiana’s former governor, Bobby Jindal, deserves much of the blame. A Republican wunderkind when elected at age 36 in 2008, he cut income taxes and roughly doubled the size of corporate tax breaks. By the end of his two terms, businesses were able to use those breaks to avoid paying about 80 percent of the taxes they would have owed under the official corporate rate.

At first, Jindal spun a tale about how the tax cuts would lead to an economic boom — but they didn’t, just as they didn’t in Kansas. Instead, Louisiana’s state revenue plunged. The tax cuts helped the rich become richer and left the state’s middle class and poor residents with struggling schools, hospitals and other services.

Unfortunately, these “laboratories” aren’t working the way Justice Brandeis envisioned, because Republican representatives elected by the rest of the country refuse to learn from their failures. Ideology has once again trumped evidence– the tax bill passed by Congress and signed by Trump is patterned after those in Kansas and Louisiana.

The rich will get richer, and the poor and middle-class will pay the price. And those who refused to learn from the experiences of our “laboratories of democracy” will profess astonishment.

About That Partisan Divide

Over at Talking Points Memo, Josh Marshall makes a point I have often made: partisanship today is different than it used to be, not just in intensity, but in kind.

Marshall’s essay was focused on what he sees as inadequacies in media coverage of the GOP’s “health care” bill, but in the course of that discussion, he made the following observation.

.. coverage of national health care policy is fundamentally distorted by the imperatives of false balance or forced balance coverage. The idea here is that the two parties are so set in their ideological corners that they can’t constructively come together and find points of compromise to address issues of great public concern. But this sentiment only makes sense if you think both parties are trying to accomplish something approaching the same thing, albeit perhaps with very different strategies. That is simply not true….

We talk a lot about how Republicans real focus is getting the ACA money for a big tax cut, which is unquestionably true. You can only get the tax cut if you get back the money that went toward getting people covered. But at a deeper level this is a philosophical dispute, a basic difference in goals. It’s a difference in desired outcomes, not an ideological dispute over the best way to achieve them. (Emphasis mine.)

Perhaps my memory is faulty, but back when I was a Republican, fiscal conservatism meant crafting more cost-effective policies to achieve goals we held in common with Democrats–policies that would help poor people, for example. We favored programs that would help those who needed that help without inadvertently distorting markets in ways that deepened the original problem.

An example would be rent control. The shared goal was affordable housing for low-income renters; opposition to rent control as a means of accomplishing that was based upon the belief that rent control would deter investment in additional, desperately needed units. You could agree or disagree with that analysis (I agreed), but the opposition wasn’t based on a belief that government shouldn’t help low-income people find decent housing.

We were arguing means, not ends.

Today’s Republicans and Democrats do not share a belief in the nature of the common good. Democrats believe that government has a responsibility to ensure access to healthcare. Republicans don’t. As Marshall says,

When you try three times to ‘repeal and replace’ and each time you come up with something that takes away coverage from almost everyone who got it under Obamacare, that’s not an accident or a goof. That is what you’re trying to do. ‘Repeal and replace’ was a slogan that made up for simple ‘repeal’ not being acceptable to a lot of people. But in reality, it’s still repeal. Claw back the taxes, claw back the coverage.

Pretending that both parties just have very different approaches to solving a commonly agreed upon problem is really just a lie. It’s not true. One side is looking for ways to increase the number of people who have real health insurance and thus reasonable access to health care and the other is trying to get the government out of the health care provision business with the inevitable result that the opposite will be the case.

That difference cannot be bridged with pious calls for “bipartisanship.”

When Evidence Doesn’t Matter

A friend who lives in Wisconsin recently shared an article from the Madison newspaper, detailing the declining rank of the University of Wisconsin in the wake of Scott Walker’s savage cuts to that institution.

Now-retired UW-Madison Chancellor John Wiley would often say that it took well over 100 years for the people of Wisconsin to build a world-class university, but it won’t take but a few years to tear it all down.

We saw the first signs of how true Wiley’s observation is when late last week the National Science Foundation reported that the UW-Madison has fallen from the ranks of the top five research universities in the country, a position it had maintained for the past 40 years.

The news underscored how the university is being impacted by the draconian policies of the current crop of Republicans who are running state government. .The governor and several key legislators have consistently insisted that UW faculty are overpaid and coddled. Walker chided that budget cuts could be weathered if only professors taught one more course. Other legislators would go so far as threatening more budget cuts when they would hear of a class they didn’t like.

Not surprisingly, a number of professors have left for greener pastures, and have taken their research grants with them, exacerbating the University’s fiscal woes.

As the article points out, Walker’s dogged insistence that cutting taxes and spending are the cure for anything that ails state government isn’t just affecting the university.

Wisconsin’s once-proud K-12 public education system is being forced to go begging to property taxpayers with referendums just to keep school districts’ heads above water. The condition of our lakes and streams and even our groundwater has been deteriorating each year and the DNR, charged with protecting it all, is being starved to death under a secretary who won’t fight for it. Our job creation is far below the national average and Wisconsin workers, many no longer protected by unions, earn less.

Wisconsin’s experience isn’t unique. Kansas’ economy continues to decline under the similar ideology and even more draconian policies of Sam Brownback. Betsy DeVos, Trump’s nominee for Secretary of Education, has presided over the abysmal performance of Detroit’s schools, thanks to a radical privatization philosophy she and Trump want to employ nationally. Paul Ryan and other House Republicans have their guns trained on Medicare, ignoring the fact that the program is both popular and cost-effective.

In each of these cases–and many others I could cite–elected officials are pursuing their ideological commitments with a decidedly religious fervor. Reality be damned.

When evidence doesn’t matter and experience doesn’t inform, Dark Ages aren’t far off.

Facts and Frames

I think it was Talleyrand who said something along the lines of “language has been given to man to enable him to conceal his thoughts.” Nowhere is this observation more apt than in the debates over school voucher programs.

Let’s begin by acknowledging that many public systems are underperforming, and that people of good will are working on a variety of reforms intended to improve them. Reform is not a dirty word; it is also not a specific description. Some reforms show promise; others do not. Some are consistent with the democratic mission of public education; others are not.

Thus far, the scholarship evaluating voucher programs suggests that participating schools perform no better than public schools when you control for student population–that is, if the children in the public and private classrooms all have the same socio-economic characteristics, voucher schools do no better (and sometimes far worse) than their public counterparts. I should also note that despite careless rhetoric used by proponents and opponents of this or that reform, vouchers and charters are different animals. Charters–whatever their merits or problems–are public schools.

Indiana, under Mike Pence, has vastly expanded its voucher program, and the funds for that expansion have come at the expense of the state’s underfunded public schools. So it is understandable that members of local school boards have gotten “a bit testy,” as the Fort Wayne Journal Gazette put it.

Things have gotten a bit testy between several members of the Fort Wayne Community Schools board and the Friedman Foundation for Educational Choice.

Last week the foundation sent a new report extolling the virtues of vouchers via email to Mark GiaQuinta, president of the Fort Wayne Community Schools board.

He responded with “more distortions and lies.”

The ensuing back-and-forth was not a model of civil discourse, but it certainly highlighted something that many of us who consider ourselves pro-reform but anti-voucher have long recognized: this is a fight to which people bring different weapons. Voucher proponents use framing (it is hardly an accident that the Friedman Foundation’s vice-president is a PR professional). Voucher opponents, by and large (and with some exceptions), counter with facts. 

Voucher proponents frame these programs as a means of getting poor children out of failing public schools and into private schools that will give them a better education. That may even be their sincere intent, but it is a frame, a proposition for which, thus far, there simply is no evidence. Quite the contrary; as the Brookings Institution reported a few days ago:

Recent research on statewide voucher programs in Louisiana and Indiana has found that public school students that received vouchers to attend private schools subsequently scored lower on reading and math tests compared to similar students that remained in public schools. The magnitudes of the negative impacts were large. These studies used rigorous research designs that allow for strong causal conclusions.

Fort Wayne School Board members responded with several facts inconsistent with the “frame”:

  • A majority of children using vouchers in Allen County go to religious schools at taxpayer expense, raising troubling questions about family motivation and public oversight.
  • Fewer than 10% of Allen County children using vouchers ever attended public schools.
  • Three times more students left Fort Wayne Community Schools that had earned an “A” rating from the state than left “D” schools.

At its base, the voucher debate is an argument about democracy, and the role of public schools in creating a polity–an “us”–out of the diverse populations that make up our nation. As I have previously written, in an article titled Privatizing Education: The Liberal Democratic Idea, Constitutionalism, and the Politics of Vouchers,

Arguments about the education of the young are at least as old as Socrates. However, it is fair to suggest that the voucher debate that has erupted over the past few years is qualitatively different from many that have preceded it. Rather than arguing about whether public schools are deficient, and if so, in what respects; rather than debating the merits of one “reform” over another, the issue has become whether America should continue to support a system of free, publicly controlled schools or whether government’s educational role should be reduced to dispensing vouchers to families, enabling them to “buy” educational services in the marketplace. It is a classic political confrontation, engaging partisan strategies and implicating political ideologies.

And all too often, giving short shrift to facts and the actual consequences of ideologically motivated reforms.