Tuesday, November 25, 2008

Blue-State Economics

On one level, there's little shock-value to be derived from the near total absence of Republican mischief-making in the aftermath of November 4th: They did, after all, just get their watches wound in the national election. But taking a slightly longer view, it's not obvious exactly when this same measure of electoral defeat has stopped them before. Past Democratic transitions have been marred (to say the least) by a bull-headed intransigence on the part of the defeated, born of equal parts denial, ideological certitude, and base-whipping. Just ask Bill Clinton.

If all is quiet on the right flank in Washington these days, it may just be that the Republican agenda-makers, especially on the domestic side of the ledger, have awakened to the bankruptcy of their ideas--but probably that isn't it. The far more likely scenario is that the right is lying in wait for the sort of substantive policy shifts that Barack Obama has already promised and already (during the campaign) been assailed for. Once the assault on these shifts has agitated their own base into a frenzy of disdain, Republicans can renew their time-tested formula of overwhelming the national agenda with catch phrases and vitriol, inevitably casting the Democrats in a weak light, despite the power and snatching away the independents.

It is worth considering how things got this way.

The modern discipline of economics is surprisingly neutral on questions of political discourse: Progressive income taxes may be defended on the principal of "diminishing marginal utility," by which a dollar taken from a wealthy person and given to a poor one has a net-beneficial effect on all of society's collective happiness, to pick one random but unusually topical example. Environmental regulations may be defended on the principal of "internalizing social costs," wherein the non-monetary repercussions of a firm's activities are converted into monetary ones through fines and regulations -- to pick another. Minimum wage laws may be defended as having negligible effects on the employment of unskilled labor, since the unskilled labor in question is already being used in its smallest possible quantities by the firms employing them, to pick a third.

And yet, as adaptable as the underlying principles of modern economic thought would seem to be to such progressive claims, the academy is at the same time populated by individuals so ubiquitously and inflexibly Conservative as to render them the frequent butt of both merriment and derision at the hands of their would-be colleagues in the other social sciences. "An economist engages someone else's ideas about the way the world works," wrote one columnist in a recent edition of The New Yorker, "the way a bulldozer engages a picket fence."

This phenomenon is largely attributable to the coincidental (and misguided) desire on the part of professional economists to be regarded as objective, physical scientists--more like chemists and biologists, and less like their messy-headed brethren down the hall in Psychology and Poly-Sci. If the practitioner has to be clean, then the practice has to be clean too--which in turn means that the rich (progressive) texture of policy debates must melt on contact with the paradigm, to prevent it from looking unresolved. The anguish of jobs lost to technological change, the qualitative detriment of polluted air, the elusive tabulation of the spoils of a war on poverty--all of these are matters dismissed with a smug wink and the back of a hand.

As the paradigm has polarized itself to the right, at the same moment in time and for the same reasons the rhetoric from Conservative Think Tanks has tailored itself to a world in which the cleanliness and simplicity of an answer is its highest virtue, existing in a perfect synergy with the rank-and-file's inability to regard a complex idea as anything but a threat. (Surely the good people at Americans for Tax Reform don't really intend for their government to be "drowned in the bathtub"? Surely Grover Norquist has been to enough school to know that bridges in the host city of the Republican National Convention will, absent a government that's just been drowned in someone's bathtub, fall unceremoniously down?) With such a de facto simple paradigm to claim as their own, the Norquists of the world have all the excuse they need to reduce a messy world to painfully simplistic causes that play perfectly with the low-information voters in swing districts, regardless of whether they genuinely believe anything they say, or not.

It would be tempting to presume a January 20th expiration date on such laments--to believe that some sort of corner has been turned. But the bitter reality of the matter is that Mr. Obama's performance was at its shakiest when he found himself confronted by a self-appointed Ohio foot soldier so perfect for the slick-sided provincialism of the modern conservative economics that he was drafted by the McCain campaign as its chief spokesman before the sun had set. It won't get any easier from there.

The Democrats will not win an economics argument in this country on the basis of raw numbers alone; they never do. Now that the battle has been won, the Democrats must take a big-picture approach to winning the larger war. Selling complex, messy ideas like progressive income taxes (to say nothing of the restoration of a modicum of governmental oversight) will require a fresh infusion of street-smart packaging to match such hate-button phrases as "death tax," a fire fought with fire, as it were. If the Obama Administration dismisses such efforts as quotidian (or, worse, elitist), or if it presumes victory before the fact on the strength of its mandate, they could surely suffer the same fate as wide-eyed Democratic Administrations in years past. The good news is that they're already winning this P/R battle with cool-headed, pragmatic appointments and centrist views. In other words, they're winning it the same way they won the election.

Dave O'Gorman
("The Key Grip")
Gainesville, Florida


Anonymous said...
This comment has been removed by a blog administrator.
Sully said...

Dear Key Grip,
Two points. 1) If you mean Joe the Plumber in your second-to-last paragraph, and I think you do, I saw the original dialogue between Joe the Plumber and Obama, several times, and in my humble opinion, Obama put a complex argument in comprehensible terms and made it perfectly clear. Including the fact that Joe, had he been who he presented himself to be (which, of course, he wasn't), would have been better off under Obama's tax plan than under present tax law. I don't see how Joe caused Obama any real trouble -- and even the spin doctors didn't succeed in making the false charges of "higher taxes for the middle class" stick enough to influence the election's outcome. Of course, "Joe" set off my B.S.ometer, which is relatively fine-tuned -- for example, I couldn't listen to a speech by Ronald Reagan either, and look how many people fell for his bloviations! But I still don't think pseudo-Joe "won" his argument by any means.
2) Even twenty-five years ago I was stunned by economists' self-destructive drive to turn their discipline into a "hard science." The only result I can perceive is that their beloved clean and simple theories are close to useless if not downright destructive when they collide with the real world. I remember one professor, the exception rather than the rule, painstakingly explaining the derivation of betas to a room full of anxious M.B.A. students. When he'd gone through the whole spiel, this blessedly sane man walked around his desk, sat down on the front edge, smiled and said,
"Of course, in the real world, this doesn't work."
This came to the great relief of yours truly and my friend Isabella, who had listened to the whole unfolding concept with skepticism, and to the horror of all the others. They just didn't want to hear that betas don't take whole categories of data and influences, including psychological factors, into account. Economics and tea-leaves will always have something in common as long as a particular economist is clever enough to use his intuition as well as what is numerically codifiable.
Oh, and last but not least, many of us are somewhat to very perturbed by Obama's centrist-Clintonite tack. Old answers aren't going to solve our present problems, in fact, they're part of what created them. Of course he needs some old hands to help him navigate the bureaucratic waters, but the gods forbid he do nothing more than expand that stale old paradigm.
Yours respectfully,