Public Policy and Governance – Page 260

Public Service is NOT Amateur Hour

I had a disquieting exchange yesterday with a very nice woman who is apparently enamored of Ben Carson, and considers him qualified to be President. Because he’s a brain surgeon.

Carson–as political observers have noted and as his interviews have made painfully clear–is a seemingly nice man with no previous experience in government who has displayed a truly appalling ignorance of the issues America faces, the operation of our legal system and the current world situation.

And of course, I need not remind readers of this blog that the current front-runner for the Republican nomination is Donald Trump, who–in addition to sharing all of Carson’s deficiencies–is so monumentally narcissistic and un-self-aware that he is a walking joke.

Here’s the thing: none of us–including Ben Carson and Donald Trump–would hire someone to do a job who lacked any relevant experience, training or basic understanding of the most rudimentary requirements of the position. So why do so many Americans consider ignorance of how government works a virtue, and why do so many candidates seem to think that parading that ignorance should win them votes?

I teach in a school of public affairs. One of the majors we offer is public management–a course of study intended to prepare people for public sector positions. The skills we teach as essential for even entry-level bureaucrats include public finance (which–surprise!–is considerably different from balancing your checkbook), statistical analysis, the ways in which law constrains public policy, the effects of globalization, the operation of the policy process…the list goes on.

Like it or not, we live in a complicated world. Americans expect government to protect us from terrorists and e coli, to regulate utilities, to administer social insurance programs, to encourage economic development, to ensure that our air is breathable and our water drinkable, to prevent economic monopolies, to control air traffic, to wage our wars, to educate our children, to pave our streets and highways, and much more. Most of those functions require specialized expertise, and managing the public servants and contractors who provide these services is no small task.

Running a city, a state or a country is not a job for amateurs, or for people who have only the dimmest understanding of the myriad foreign and domestic challenges the nation faces on a daily basis, and the often difficult and surprising interrelationships among them.

It isn’t brain surgery–and the ability to do brain surgery, or to star in a television reality show, doesn’t make someone even remotely competent to run a country in the 21st Century.

Comments

John Ketzenberger’s Required Read

John Ketzenberger’s “Business Insider” columns should be required reading for anyone who cares about economic policy–and that should be all of us.

Ketzenberger, for those who don’t know, directs Indiana’s Fiscal Policy Institute, and is thus privy to a wealth of information about Indiana’s economic performance. He is also able to “connect the dots” between various economic indicators in clear English, as he did in his column in last Sunday’s Indianapolis Star. (For example: Job creation is only part of the picture; because Indiana workers make less than workers in other Midwest states, they have less buying power–one reason Indiana’s economy remains sluggish. We need to recognize that the number of jobs may be high while per capita income remains low.)

As illuminating as his economic analysis consistently is, however, what really struck me about last Sunday’s column was its conclusion. Ketzenberger drew on his years of observing the operation of Indiana policies on the prospects of Hoosier citizens and offered five recommendations:

Understand it’s not a political thing, it’s a practical thing. And that thing is compromise. Nobody has the market cornered on good ideas, so it’d be nice to see business leverage partnerships and politicians apply a little common sense. Compromise, contrary to popular belief, is not a sign of weakness, but it takes a lot of fortitude and smarts to apply it.
Mitch Daniels was right—never mix social issues with public policy making. It’s hard to debate the state’s budgetary priorities when all of the attention is on efforts to discriminate against a class of people in the name of protecting religious liberty already enshrined in the constitution.
When we’re ready to get serious about the issues, I’d suggest we consider them in this order: long-term infrastructure funding, comprehensive long-term education policy, ensuring the public safety net is wide as possible.
Let’s agree to destigmatize taxes. This is not a call for a tax hike, a cut or dramatic shifts. It’s just a plea to recognize that taxes are necessary to pay for domestic tranquility—an organized community, public safety and basic services. Treat all taxpayers fairly, use the money wisely and balance the need for fiscal responsibility with the other two points and we can get on with substantive policy debates.
Finally, we must remind our elected officials they are leaders obliged to serve all of the citizens, not just those who paid the freight or voted for them. Votes are a far greater currency than all the big-money interests, but only if people choose to participate. The next time you see a negative campaign ad, remember its purpose is to drive independent people out of the voting booth. Maintain your independence and vote.

Yes, yes and yes to all of these!

Comments

Efficiency versus Transparency

A couple of days ago, a friend re-posted a FaceBook meme–one of those numerous sardonic messages on what appear to be digital postcards. The message was “for all the taxes they take out of my paycheck, the least they could do is send me a picture of the ghetto family my tax money is supporting, to hang on my refrigerator.”

My friend’s response was perfect: “Here you go: Here are pictures of Walmart, Kaiser Permanente, Citibank, BP…”

Leave aside, for this discussion, the casual racism (we know what “ghetto” meant) and the mean-spiritedness, the implication that lazy “takers” are being supported by self-styled, hard-working “makers.”

What the statement really reflected was a widespread lack of understanding of corporate welfare, and the magnitude of the tax dollars flowing to profitable companies through the tax code.

Let’s stipulate that some of these subsidies can be justified. (Others not so much.) Let’s also stipulate that it is more efficient to subsidize an activity through the tax code than through a grant. (Why send money to the federal government and then have that government send it back?)

Let’s also stipulate, however, that there are situations in which transparency should trump efficiency. This is one of those situations.

Every time lawmakers vote to make what CPAs call a “tax expenditure,” that credit or deduction represents money otherwise due to the federal government that it doesn’t take in. The process is more efficient, but the fiscal impact is no different from a payment out of the treasury.

What is different is the ability of the public to monitor the decision to subsidize and to evaluate the justification for the subsidy.

What the federal government pays out in TANF or SNAP is visible; what it pays to GE or Exxon or Walmart is buried in the bowels of the Internal Revenue Code.

If we insisted that all corporate welfare payments also be paid in cash, in the full light of day, we might be able to begin a reasonable discussion of the merits, magnitudes and justifications for those subsidies.

It probably would be news to the people who posted that vile Internet message, but they are supporting a whole lot of people who not only aren’t “ghetto,” but who are pulling down salaries most of us ordinary “makers” can only dream of.

Comments

When Debt is Investment

I recently ran across a very interesting report from the Brookings Institution, arguing for a “balance sheet” approach to fiscal policy. The basic argument, in “economic-ese” was

For a long-term balance-sheet approach to gain traction, politicians will have to drop the ideological biases that are distorting fiscal policy. Proponents of austerity currently use nominal debt figures to scare voters, even in countries with record-low interest rates and large private-sector profits that are not being channeled toward investment. To counter their arguments, opinion-makers should emphasize the expected long-term returns on incremental public investment, not with ideological arguments, but with concrete examples from various sectors in the recent past that have had reasonably good rate of returns.

In everyday English, author Kermal Dervis was arguing–among other things– that we need to distinguish between kinds of debt.

The mortgage on your house is debt. So is the credit-card balance from that shopping spree you indulged in. But the house is a long-term asset–the clothes you bought probably aren’t.

When we look at the books of a business, the purchase of more modern tools and machinery are an investment that will allow the business to earn more in the future (hence the saying “you have to spend money to make money”), while the CEO’s acquisition of a spiffy and expensive corporate jet is unlikely to improve the bottom line.

When we invest tax dollars in improved infrastructure or education, those investments generate future productivity and economic growth.

When we play games with the tax code to subsidize profitable businesses (with influential lobbyists), not so much.

All debt is not equal.

Comments

Remember the American Dream?

Watching Donald Trump trash immigrants and refer none-too-obliquely to people who are less fortunate as “losers”—all while wearing a hat emblazoned with the slogan “Make America Great Again”– is depressing me. The fact that he is currently leading the GOP pack deepens that depression considerably.

Let’s deconstruct the notion of American “greatness.” Contrary to Trump’s (and others’) dog whistles, to the extent that the country’s greatness was real, it wasn’t because those who ran the show were white Christians of European origin. It was because we offered people who had very little a chance to improve their condition.

When I was growing up, the accepted description of America was “land of opportunity.” It was commonly believed that the American Dream could be attained by anyone willing to work hard; social mobility was the name of the game.

Cynics will point out—accurately—that the promise often exceeded the reality, but there was and is value in the widespread belief that personal responsibility and hard work could pay off, if not for yourself, at least for your children.

Knowing that poverty isn’t necessarily permanent is hugely important in a capitalist system. Inequalities may be inevitable, but they need not be paralyzing, they need not engender the sorts of simmering resentments that lead to social unrest, if they are seen as temporary and (fairly or unfairly) a reflection of the effort and entrepreneurship of the individual rather than an inevitable aspect of the system.

We are beginning to see what happens when belief in the possibility of social mobility declines, when it becomes all-too-apparent that no matter how talented, diligent and industrious they may be, Americans can no longer work themselves into the middle class.

Thanks to short-sighted and mean-spirited public policies, such social mobility as previously characterized our economic system is largely a thing of the past.

In a column written a couple of years ago, Gail Collins put it bluntly:

“We have no bigger crisis as a nation than the class barrier. We’re near the bottom of the industrialized world when it comes to upward mobility. A child born to poor parents has a pathetic chance of growing up to be anything but poor. This isn’t the way things were supposed to be in the United States. But here we are.”

Social scientists have documented the characteristics of stable democracies–the attitudes and institutions that keep societies from erupting, that strengthen the social fabric rather than shred it. A perception that the government “plays fair” and a belief in opportunity for advancement–a belief that effort and diligence will be rewarded–are among them.

When poor people lose hope–when the belief in the possibility of bettering their condition disappears, and they face the fact that social mobility is rapidly becoming a myth and the American Dream is out of reach–they become people with nothing to lose.

And that’s dangerous.

Bernie Sanders is drawing huge crowds, because he is talking about inequality and fundamental fairness, and offering specific policy proposals to address systemic issues.

The Donald is drawing sizable crowds by pandering to the resentments of people who have been unable to realize their own American dreams–by telling them that their problems aren’t due to systemic inequities, but to nefarious “others” (immigrants, minorities, women).

Neither of them is likely to be the next President, but they are stark representations of the choice America faces, of the fork in our national road. We can choose nativism, civic unrest and continued decline, or we can do the hard but necessary work of restoring the social contract, repairing the social safety net and breathing new life into the American Dream.

Comments