Public Policy and Governance – Page 106

The Economy And The Parties

Talk about your provocative headlines! The New York Times opinion page recently ran a column titled: “The Economy Does Much Better Under Democrats. Why?”

The column began with an acknowledgement of the limited control presidents exert over the economy. After all, presidents are at the mercy of numerous global and other realities, as the pandemic is currently illustrating. Furthermore, economic performance is determined by literally millions of decisions made every day by businesses and consumers, many if not most of which have little relation to government policy.

So why is there an undeniably “stark pattern” showing that the economy has grown significantly faster under Democratic presidents than Republican ones?

It’s true about almost any major indicator: gross domestic product, employment, incomes, productivity, even stock prices. It’s true if you examine only the precise period when a president is in office, or instead assume that a president’s policies affect the economy only after a lag and don’t start his economic clock until months after he takes office. The gap “holds almost regardless of how you define success,” two economics professors at Princeton, Alan Blinder and Mark Watson, write. They describe it as “startlingly large.”

Since 1933, the economy has grown at an annual average rate of 4.6 percent under Democratic presidents and 2.4 percent under Republicans, according to a Times analysis. In more concrete terms: The average income of Americans would be more than double its current level if the economy had somehow grown at the Democratic rate for all of the past nine decades. If anything, that period (which is based on data availability) is too kind to Republicans, because it excludes the portion of the Great Depression that happened on Herbert Hoover’s watch.

If the disparate results are too clear and too large to dismiss, the reasons are far less obvious. (As the King in “The King and I” liked to say, “It’s a puzzlement.”)

The authors of the study considered and discarded several possibilities. They threw out Congressional control, because the pattern held regardless of which party was running Congress; deficit spending also couldn’t explain the gap, because–contrary to GOP rhetoric–during the past 40 years, Republican presidents have run up larger deficits than Democrats.

If Congressional partnerships and deficit spending couldn’t account for the differences, what might? The authors concluded that the difference could be explained by the willingness of Democrats–but not Republicans–to respect that pesky thing we call evidence.

As they note, Democrats have been far more willing to consider the lessons of economic history–to see which policies have been shown to actually strengthen the economy, and to replicate those approaches. Republicans, on the other hand, have “clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation.”

In other words, Democrats have been pragmatists; Republicans have been ideologues.

As the authors note, since 1980, Republican economic policy has boiled down to a single measure: large tax cuts, tilted heavily toward the rich. That may work in countries with very high tax rates, but the United States has had very low tax rates for decades.

It may be that Republicans actually believe in their own prescription, despite the repeated failure of tax cuts to provide the promised economic stimulus and/or job creation. Or it may be–as cynics suggest–that the parties are simply playing to their respective bases of support– responding to the interest groups that support and finance them. Democratic-leaning groups (like labor unions and civil-rights organizations) favor policies aimed at achieving broad-based economic growth; Republicans are pandering to wealthier supporters (those we used to call “country club Republicans), who favor policies that will shift income in their direction.

It will be interesting to see whether Republican ideology shifts as the GOP becomes increasingly the party of whites without wealth or a college education–and as significant numbers of those suburban “country club” Republicans desert a GOP that is firmly in thrall to bigots and crazy people.

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The Downside Of Democracy…

It’s hard to disagree with the pundits and political scientists who point to the vote for Brexit (and the worrisome number of votes for Donald Trump) as evidence that majority rule is not necessarily a blessing.

In the idealized version of democratic systems, a majority of citizens cast informed votes after considering the positions articulated by the candidates or descriptions of the issues vying for their support. (Political scientists Achen and Bartels dubbed this the “folk theory’ of democracy in their book Democracy for Realists. I recommend it…)

One problem is that much of 21st Century policy has become too complicated and/or interdependent with other aspects of our common lives to allow the average voter to be genuinely informed. Another is that campaigns and candidates are richly rewarded for misrepresenting reality. There are electoral advantages to be gained by turning issues into “us versus them” choices, and plenty of political actors willing to do so.

Brexit is a good example. The Week recently had a very good description of the “unanticipated consequences” of the UK’s departure from the European Union.

Those who followed the campaign noted that it played heavily upon resentment of EU bureaucracy, and especially tensions over immigration. The Vote Leave campaign was led by Boris Johnson, who led rallies in a red bus featuring the slogan “We send the EU 350 million pounds a week, let’s fund our NHS instead.” Johnson and the other proponents claimed that the U.K. would keep its tariff-free trade with the EU, but no longer would be subject to EU law; best of all, the U.K. could “take back control” of immigration. Wages would be higher and the country would sign new trade deals with better terms.

All gravy, no gristle.

Reality–as Brexit opponents warned– has been considerably different. Import/export companies face a raft of new paperwork that will cost them millions of pounds a year. Worse, the trade deal doesn’t cover the services sector, which represents some 80 percent of Britain’s economy.

As for the financial savings, the true net amount that the U.K. paid to the EU was $208 million a week, less than half of what was claimed, and little of that money is going to the NHS, which remains strapped for cash. While the border between EU member Ireland and Northern Ireland will remain open, there will be customs checks.

There’s a lot more (grim) detail in the linked article, but the bottom line is that Brexit is predicted to cost Britain about 4 percentage points of its gross domestic product over the next 15 years, and unemployment, inflation, and public borrowing are all likely to rise.

In the United States, we have plenty of examples of campaigns that over-simplify or distort the issues involved, and count for their success on the likelihood that most voters will not recognize the complexities or potential pitfalls. But thanks to demographic shifts and the peculiarities of our electoral system, we also have a growing problem that most other Western countries don’t have.

In 2018, Norman Ornstein explained it in a tweet:

“I want to repeat a statistic I use in every talk: By 2040 or so, 70 percent of Americans will live in 15 states. Meaning 30 percent will choose 70 senators. And the 30 percent will be older, whiter, more rural, more male than the 70 percent. Unsettling to say the least.”

Ornstein’s analysis was checked by the Weldon Cooper Center for Public Service of the University of Virginia, which concurred.

Democratic systems are those that accurately reflect the wishes–expressed through the ballot box– of a majority of citizens. In the U.S., majoritarian preferences are constrained only by constitutional safeguards of individual rights, primarily those protected by the Bill of Rights.

I have posted before about the reasons that Indiana’s legislature is dominated by–and answerable to–rural areas of the state, and the multiple ways in which that reality makes us backward and dysfunctional. If Ornstein is correct–and he is–the entire country will be in our shoes–dominated in the very near future by voters whose priorities simply do not reflect–or even include– the preferences and needs of urban America.

I don’t know what you would call that outcome, but it sure isn’t democratic….

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The People’s Business

The polarization that characterizes American politics these days begins with very different world-views–and very different beliefs about what government is and what it is for. Those differences used to exist within a “big tent” Republican Party, back when there were still a lot of perfectly sane Republicans. (I still remember those times; I told you I’m old…)

I still remember the telling difference between the rhetoric employed by Mayor Stephen Goldsmith, who liked to refer to citizens as “customers” of government, and the Hudnut Administration that preceded Goldsmith’s. I served in the Hudnut Administration, and although we didn’t borrow from business terminology, I think it’s fair to say that we considered citizens to be shareholders, not customers.

We understood that citizens are the owners of the government enterprise.

So far, the Biden Administration has taken steps to do the people’s business, to reflect a belief that government should actively pursue the public good as reflected in the desires of a majority of its citizen-owners. As Heather Cox Richardson recently noted, Biden has refused to engage with the craziness and has instead acted on matters ordinary people care about.

Biden is using executive orders to undercut the partisanship that has ground Congress to a halt for the past several years. While Biden’s predecessor tended to use executive actions to implement quite unpopular policies, Biden is using them to implement policies that most Americans actually like but which could never make it through Congress, where Republicans hold power disproportionate to their actual popularity.

According to a roundup by polling site FiveThirtyEight, Biden’s executive actions cover issues that people want to see addressed. Eighty-three percent of Americans—including 64% of Republicans—support a prohibition on workplace discrimination over sexual identification, 77% (including 52% of Republicans) want the government to focus on racial equity, 75% want the government to require masks on federal property, and 68% like the continued suspension of federal student loan repayments. A majority of Americans also favor rejoining the World Health Organization and the Paris climate accords, and so on.

There is, of course, a limit to what can be accomplished by Executive Order. Biden has thus far shown an admirable intent to “stay in his lane”–to restrict his actions to those that can be defended as appropriate to the Executive Branch. But doing the people’s business–fulfilling the numerous needs and demands of government’s “owners”–will require action by Congress.

Congress, unfortunately, is massively dysfunctional.

The current debate in Congress about the filibuster illustrates that today’s partisan divide is between those who believe government is obliged to do the people’s business–to carry out the wishes of the owners of the enterprise– and those who quite clearly believe that their role is to prevent that business from being conducted (unless, of course, the business at hand involves a tax cut that will benefit their donors.)

The nation’s Founders contemplated a Congress that would engage in negotiation and compromise, and would then proceed to pass measures by a simple majority vote–not a super-majority. Today, thanks to the evolution of the filibuster over the years, it takes sixty votes to pass anything, no matter how innocuous.

Of course, the Founders also believed that the people we would elect to Congress would be “the best and brightest”–public-spirited, educated and reasonable men (yes, I know…) who would take their legislative responsibilities seriously. I wonder what they’d think of the gun-toting, conspiracy-believing wackos who are currently walking the halls of the Capitol and warning about fires started by Jewish space-lasers …

Not to get overly partisan here, but those lunatics are all Republicans…..and they have no concept of–or ability to do– “the people’s business.”

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Health Costs And Benefits

Americans have been arguing over health care (actually, health insurance) for my entire life–and as I frequently mention, I’m old. Every time the federal government has extended access to health insurance, conservative politicians have insisted that America cannot afford it.

“Medicare for All” proposals invariably meet with outrage–and disinformation. In addition to insistence that universal health care would bankrupt the country, opponents used to warn that extending access would ruin what they say is the “best medical care in the world.”

That claim that “we’re number one” has diminished considerably, as more people have recognized that we’re actually number thirty-seven or thirty-eight, and that the only people who receive the “best” medical care are people who have lots of money. But Republicans have continued to insist that America just can’t afford universal coverage.

Which brings me to a very interesting report in The Hill, titled “22 Studies Agree: Medicare for All Saves Money.”

The evidence abounds: A “Medicare for All” single-payer system would guarantee comprehensive coverage to everyone in America and save money.

Christopher Cai and colleagues at three University of California campuses examined 22 studies on the projected cost impact for single-payer health insurance in the United States and reported their findings in a recent paper in PLOS Medicine. Every single study predicted that it would yield net savings over several years. In fact, it’s the only way to rein in health care spending significantly in the U.S.

All of the studies, regardless of ideological orientation, showed that long-term cost savings were likely. Even the Mercatus Center, a right-wing think tank, recently found about $2 trillion in net savings over 10 years from a single-payer Medicare for All system. Most importantly, everyone in America would have high-quality health care coverage.

The studies found that Medicare for All would eliminate three-quarters of the estimated $812 billion the U.S. now spends on health care administration. Administrative costs in the United States are so high because insurance companies–and there are hundreds, if not thousands of them– individually negotiate benefit rules and rates with thousands of hospitals and doctors. They also require different billing procedures , use different forms and have different rules for submitting claims.

The studies estimate that savings from Medicare for All would be about $600 billion per year. And that’s not including savings on prescription drugs, estimated to be another $200 or $300 billion a year if we paid about the same price as other wealthy countries pay for their drugs.

Even more savings are possible in a Medicare for All system because, like every other wealthy country, we would have a uniform electronic health records system. Such a system generates additional savings because system problems would be easier to detect and correct. A uniform claims data system helps reduce health care spending for fraudulent services. In 2018, total U.S. health care costs were $3.6 trillion, representing 17.7 percent of GDP.

The “cherry on top” of these calculations? Savings were calculated assuming the elimination of deductibles and out-of-pocket expenses.

The article also pointed to something that is not widely understood: government already pays approximately two-thirds of all American health care costs. A few years ago, when I participated in a multi-disciplinary study, the calculation was that some seventy percent of all health costs were being paid for by some unit of government– not just via Medicare and Medicaid, but also through the VA, CDC awards of research dollars, federal, state and local health care programs, coverage for government employees (including thousands of employees of public schools and universities), and ACA tax subsidies for private insurance.

A more expansive and accurate cost/benefit analysis would also include things like the decline in bankruptcies–some 50% of personal bankruptcies are due to medical costs not covered by insurance.–and evidence that crime and other forms of social discord decline sharply when social safety nets improve.

Here’s my question: if Medicare for All improves health care and costs less, what is the real reason so many Republicans oppose it?

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It Isn’t Just Media Literacy

Americans today face some unprecedented challenges–and as I have repeatedly noted, our information environment makes those challenges far more difficult to meet.

The Internet, which has brought us undeniable benefits and conveniences, also allows us to occupy “filter bubbles”—to inhabit different realities. One result has been a dramatic loss of trust, as even people of good will, inundated with misinformation, spin, and propaganda, don’t know what to believe, or how to determine which sources are credible.

Fact-checking sites are helpful, but they only help those who seek them out. The average American scrolling through her Facebook feed during a lunch break is unlikely to stop and check the veracity of most of what her friends have posted.

There is general agreement that Americans need to develop media literacy and policy tools to discourage the transmittal of propaganda. But before we can teach media literacy in our schools or consider policy interventions to address propaganda, we need to consider what media literacy requires, and what the First Amendment forbids.

Think about that fictional person scrolling through her Facebook or Twitter feed. She comes across a post berating her Congressman for failing to block the zoning of a liquor store in her neighborhood. If our person is civically literate—if she understands federalism and separation of powers– she knows that her Congressman has no authority in such matters, and that the argument is bogus.

In other words, basic knowledge of how government works is a critical component of media literacy.

It isn’t just civic knowledge, of course. People who lack a basic understanding of the difference between a scientific theory and the way we use the term “theory” in casual conversation are much more likely to dismiss evolution and climate change as “just theories,” and to be taken in by efforts to discredit both.

To be blunt about it, people fortified with basic civic and scientific knowledge are far more likely to recognize disinformation when they encounter it. That knowledge is just as important as information on how to detect “deep fakes” and similar counterfeits.

There are also policy steps we can take to diminish the power of propaganda without doing violence to the First Amendment. The Brookings Institution has suggested establishment of a “public trust” to provide analysis and generate policy proposals that would defend democracy “against the constant stream of disinformation and the illiberal forces at work disseminating it.”

In too many of the discussions of social media and media literacy, we overlook the fact that disinformation isn’t encountered only online. Cable news has long been a culprit. (One study found that Americans who got their news exclusively from Fox knew less about current events than people who didn’t follow news at all.) Any effort to reduce the flow of propaganda must include measures aimed at cable television as well as online media.

Many proposals that are aimed at online disinformation address the social media protections offered by Section 230 of the Communications Decency Act. I reviewed them here.

Bottom line: we can walk and chew gum at the same time.

If and when we get serious about media literacy, we need to do two things. We need to ensure that America’s classrooms have the resources—curricular and financial—to teach civic, scientific and media literacy. (Critical thinking and logic would also be very helpful…) And policymakers must devise regulations that will deter propaganda without eviscerating the First Amendment. Such regulations are unlikely to totally erase the problem, but well-considered tweaks can certainly reduce it.

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