Comments on: DC Week in Review: Democracy in Crisis

By: Michael Corey

Michael Corey — Thu, 11 Aug 2011 20:53:00 +0000

I do believe that there can be adjustments to both our spending programs, regulations and tax policies, but I think that they will be very difficult to get done. I’m not at all sure that the best choices will be made in controlling cost escalations and revising the tax system mainly because there is still a lack of willingness to recognize many issues. For instance, we continue to ignore the evaluations of Medicare/Medicaid and Social Security actuaries.

For most projected budget projections to work and be improved upon, we need sustained, higher than average economic growth that leads us to a fuller/full employment economy. Many governmental economic assumptions are not consistent with our policies. Too many people are willing to accept high unemployment (and much higher rates of underemployment) as the new normal. Higher growth rates in a value producing economy improves the life chances of most people, gives more people gratification in their personal lives , and also yields higher tax revenues while reducing social costs. We don’t have the policies in place to fuel this type of growth, and I don’t see an appetite to put them in place.

We have taken for granted the shift to consumerism from natural resource extraction and utilization; energy generation; production; and export. With this shift, the ability for many workers to earn good incomes has become much more difficult. I don’t believe that from a policy standpoint we have the will to turn this around at this time. We are willing to give lip service to this in campaign rhetoric, but are not willing to take actions. The irony is that an unwillingness to make policy changes in these areas tends to worsen the economic outlooks for large numbers of Americans, especially those who are less fortunate.

There are relatively simple things which could be done to encourage the creation of better paying jobs in the private sector which is the engine for value creation and redistribution. A few of them are: having a workable short, medium and long term energy policy that capitalizes on our strengths; willingness to exploit our natural resources; having procedures in place to expedite the approval of capital projects; implementing competitive tax policies; providing incentives to repatriate foreign earnings; encouraging savings and investments; and revisiting our foreign trade agreements to insure that there are level playing fields. In a full/fuller employment economy, many businesses have demonstrated the ability to train and develop workers at all levels of the workforce. Businesses are particularly good at innovation when a climate is established which encourages it. In many instances, we are moving away from these principles rather than towards them.

By: Jeffrey C. Goldfarb

Jeffrey C. Goldfarb — Thu, 11 Aug 2011 15:22:00 +0000

I don’t think things are as bleak as you do, Michael. The long term deficit problem can be addressed with relative ease. Reform Medicare and extend health care reform more generally with public actions to constrain costs, making us more like France for example. Reform the tax code to make it more efficient and just, generating more revenues, i.e. bring revenues more in line with past practices. There is enough in this to satisfy many different political passions, as long as true belief is abandoned, and as I indicate in the post, there are already a number of different bi partisan plans that move in this direction. Clearly now is the time for the President to lead.

On the other hand, it is time for more immediate stimulus. Infrastructure needs investment. The present de-funding of the educational system must be stopped. Aid to states and localities will be both economically sound and deliver necessary services. Obama’s forceful leadership is needed here as well. And it must become dangerous for Republicans to continue to subscribe to their market magic fantasies.

I suspect that there is something to your notion that we need to produce more, but to pin all hopes for recovery on this would be dangerous. It would be to mistake a hypothesis for a proven reality. I worry about propositions concerning root causes including this one.

By: Michael Corey

Michael Corey — Thu, 11 Aug 2011 14:45:00 +0000

My guess is that something much more basic is involved. Perhaps a medical analogy might help. Traditional Western medicine tries to diagnosis a problem and prescribes a treatment that alleviates the symptoms. Integrative medicine tries to identity the cause of a problem, and help address the cause. For instance, steroids are frequently used to treat inflammation. They help the patient feel better for awhile, but don’t address the source of the inflammation. Long term steroid use leads to complications which ultimately endanger the patient. I suspect that this is what is happening Washington.

There seems to be a reluctance to identify the cause of our current problems, and there is a drive to treat the symptoms. As expected, the country isn’t getting better and is suffering from complications. The first step in the recovery process is to accurately identify the causes of our malaise. This requires a suspension of ideological beliefs and a willingness to look at the facts wherever they lead us. Once the causes are identified, then there is an opportunity to address them. Personally, I think that the causes may be found the major demographic and economic changes that are happening throughout the world. Within the United States, this is partially connected to an aging population and an economy which for decades has shifted from producing to consuming and the associated lose of value associated with this change. Over leverage in the public and private sectors has disguised these issues, and dealing with them is not an easy task. I suspect that there are long term solutions, but they are politically controversial. Is it possible to push past political preconceptions and deal with the issues instead of just prescribing steroids? I’m not so sure about that.

By: Tim Rosenkranz

Tim Rosenkranz — Thu, 11 Aug 2011 06:24:00 +0000

I am still waiting for this argument to come up again in the US-political context. If the system is broke, it needs to be fixed. How can a country with the population size of the US still have a two-party system – how can this represent the ideological as well as pragmatical diversity of the voters? As Arjen says, only in a multiple party system can parties be both: ideological and pragmatic, as there is the possibility to solve problems through deliberation, but also changing ideological and pragmatic coalitions. But it is the US-electoral and media system (for example winner-takes-it-all, campaign financing, media coverage of primaries, the presidential debate format, etc) itself that prevents the introduction of successful third and fourth party alternatives into the political landscape.

By: Tim Rosenkranz

Tim Rosenkranz — Thu, 11 Aug 2011 06:24:00 +0000

By: Jeffrey C. Goldfarb

Jeffrey C. Goldfarb — Thu, 11 Aug 2011 00:44:00 +0000

I think now is the time for Obama to make the big push, to explain what has to be done, to make it clear who is blocking the necessary, to build a consensus of the sensible against the crazy. I would like to see a second term, still think it is likely, but it has to be made clear why it is important. The Tea Party and Fox and company have shaped the political debate. Now is the time when it must be reconfigured. I hope Obama will fully use his skills in that project. I expect it, and then we will confirm how good he is, or not. Will we do the sensible thing and combine long term deficit control, along with stimulus, now before it’s too late? Will growing inequalities in American society be corrected? Will truth rather than fiction be the basis of our social, economic, environmental, educational policies? The answers have to come with eloquence and consequential policies.

By: Jeffrey C. Goldfarb

Jeffrey C. Goldfarb — Thu, 11 Aug 2011 00:30:00 +0000

I agree. Perhaps I exaggerated in making the comparison. Europeans are just as capable of pragmatic action as Americans.My point is that the American system cannot work when a party is motivated primarily by ideology. Coalitions have to occur within and between parties in America, without that the system is now showing itself to be highly dysfunctional.

By: Lisa Aslanian

Lisa Aslanian — Wed, 10 Aug 2011 16:54:00 +0000

the Fox take and the Fox universe —- I am never sure how much time or attention to give the crazies on Fox and other networks and websites that cater to the far right. On the one hand, the tea party has enough power to paralyze congress and on the other hand, I hear that the demographic that watches and believes Fox news is a small group of old white men and women. Was it Lee Atwater who picked up and ran with the idea that perception is reality (in politics) and we know the way in which he used that insight. But has it really come to be that there is no reality in reality anymore? From where I sit, Obama has the rhetorical skill (Bill Clinton had this talent, too) to explain to people what is going on and what we need to do to address it. And, then, to frame the stand-off on the debt ceiling— the tea party holding us hostage– for what it was: uninformed, destructive and purely political. He could have let the world begin to crumble and then invoked his executive power and saved the day (or not)— perhaps it would have continued to crumble. But it would not have been his doing— he could have gone on the offense (we on the left are going to die on our cross of refusing to engage with spin, with fear mongering, with lies, etc. — again pull a tactic from Atwater’s book and put the other side on the defensive)— we have to engage; we have to say and say again and again that the right is hell bent on bringing ruin at whatever cost. They say it themselves: they are ready for the rapture, for the end of order, for the world to fall apart. What Obama did is on Obama at this point, which is a huge disappointment, because it may mean he does not get a second term. For a lot of us on the left, we were holding out hope for the second term— that he was yes-ing who he needs to yes so he can get elected again and then just push reform through, a la the Bush clan.

By: Arjen Berghouwer

Arjen Berghouwer — Wed, 10 Aug 2011 16:32:00 +0000

It would be wrong to think that European parties are not pragmatical. Notwithstanding their deeper ideological base, institutional structures make European parties highly pragmatical. This has mainly to do with the difference between competitive and consensus democracy described by Arend Lijphart (see for example his ‘Patterns of Democracy’). The mere fact that in most European countries parties have to form a coalition government is a huge institutional pressure in favor of pragmatic politics. Steiner et al. (‘Deliberative Politics in Action’) even go a step further: they pose that consensus democracies in Europe lead to a relatively higher quality of deliberation in formal politics, and that a better deliberation by and large leads to better (public policy) results.