Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

02 August 2009

Putting a Price on Obstructionism


In our heyday as a nation, a simple principle governed both business and politics. If you have a better idea, propose it. If you don’t, get out of the way of the people who do have ideas that might work.

At no time did this principle prevail in politics more than during our Great Depression. Then the brand-new administration of FDR and his “Brain Trust” threw out ideas (and drew corresponding legislation out of Congress) with the greatest intensity in our history. Some of these ideas didn’t work, and some the Supreme Court shot down as unconstitutional. But the effort, as whole, reflected the “do it, fix it, try it!” approach that has always characterized American pragmatism. The same approach has been a credo of “excellent companies” and leading business thinkers since the 1980s.

These simple principles prevailed for obvious practical reasons. People in business wanted to beat the competition and make an honest profit. People in politics wanted to serve a vague but vital abstraction called the “general welfare.” Most leaders were smart enough to recognize their betters, or at least not to bet their country, their parties and their careers on crossing their arms and just saying “No!”

Not so today. We’ve replaced the “do it, fix it, try it!” approach with sterile debate over abstract principles like smaller government and free markets that may or may not have any relevance to the subject under discussion, or even to the real world. And a sizable minority of our politicians refuses to try anything.

Besides education (which the Obama Administration has yet to address seriously) we have two crucial domestic problems: health care and energy policy. It should be clear to everyone who can read that both problems have been with us for decades and that either, if not solved soon, could put this country on an irrevocable course of secular decline. Yet at this late stage of what is still a national crisis, we have scores of elected representatives whose public persona recalls that priceless vignette of Ted Stevens (now convicted of corruption) shouting “No!”

The ostensible reasons for obstructionism are of course a charade. The projected ten-year cost of fixing health care may be over $ 1 trillion (if you discount all the cost-saving proposals, some of which just might work). But that number itself is a trick of special-interest PR.

Never, until this health-care debate, has a public, national dialogue classified the cost of any government program on anything other than an annual basis. If we classified all government expenses on a decennial basis, here’s what we would find:

Social Security8.9 trillion
Defense6.7 trillion
Medicare6.5 trillion
Interest on the national debt4.6 trillion
Medicaid3.5 trillion
War in Iraq (six years only) 0.7 trillion (excluding indirect costs)

Next to these numbers, $1 trillion to fix a health-care problem that has plagued us for three generations seems a bargain, especially as that money is supposed to help reduce long-term health-care costs.

To put it another way, over the next ten years we are projected to spend a total of $10 trillion of taxpayers’ money on existing, mandatory health care for the poor and aged (Medicaid and Medicare). For an extra $ 1 trillion—only 10%—we can make sure that everyone else is also covered. If that’s not a bargain, I don’t know what is.

Then there’s the canard of a “government takeover.” New York Times pundit and Nobel-prize winning economist Paul Krugman debunked this myth for health care so thoroughly that I can’t do much but provide a link. As for cap and trade, it’s nothing more than a rational way of incorporating the real costs of local and atmospheric pollution into free-market pricing. You wouldn’t expect polluters to pay the costs their pollution imposes on the rest of us voluntarily, would you? Business is not an eleemosynary institution.

But even if you like breathing coal-produced sulfur dioxide and eating mercury-tainted fish—and even if you doubt climate change—there’s always the problem of energy dependence and its effect on economic stability and national security. Gas prices may be tolerable today, but tested economic theory suggests they won’t be for long. And in any event the vicissitudes of the global oil market put our industrial and security future beyond our control.

Even at today’s low prices for oil (about $65 per barrel), here (in rough numbers) is what we pay for foreign oil:

Daily imports10 million barrels
Daily cost$650 million
Annual cost$237 billion
Decennial cost (assuming no increase)$2.4 trillion

The $1 trillion we must pay to fix health care will buy us social cohesion, a healthier workforce, and relief from the competitive disadvantages that our automobile and heavy industries—not to mention small businesses!—labor under every day. If you balk at paying the price for such decisive national advantages, shouldn’t you balk more at spending $2.4 trillion for foreign oil, which gives us nothing of lasting value, when much of it comes from places whose national mores are inimical to ours?

So the naysayers’ big reasons for “Nos!”—cost and government control—are bogus.

Then what are their real motivations? Sheer stupidity is always a possibility. But one hopes that those words do not describe too many members of Congress, else we are lost.

None of the naysayers offers a better plan to solve these problems. Most of them offer no plan at all, but “just say no.”

In that circumstance only three motives seem possible. First, someone may be paying them, most probably with campaign contributions (the modern, legal form of bribery). A special interest—often connected with health insurance, coal or oil— “convinces” them that its goals are in the public interest, and a large campaign contribution closes the deal.

Second, special interests may control a politician’s jurisdiction, for example, by employing a lot of people and thereby influencing a lot of votes. So the politician favors the local special interest despite the negative effect on general welfare.

Third, the politician has no idea of how to solve the problems but hopes that his political opponents’ solutions will fail. Then he can pick up the pieces and increase his political power over a diminished nation.

All three of these motivations have one thing in common. They put the politician’s own future ahead of the nation’s. They are part of the wave of selfishness and greed that has swamped us during the past two decades. They are the political flip side of the bankers who gave us sub-prime loans and economic catastrophe and walked away (about 5,000 of them) with million-dollar bonuses for trashing our financial system and our economy. They epitomize the modern “fuck you, I’ve got mine” philosophy that bids fair to demote the world’s greatest democracy (so far) to third-world status.

So what can we do about it?

A society as rich and diverse as ours offers lots of ways to put a price on this behavior. First of all, there’s direct political action. It can take two forms: traditional and modern. In the traditional mode, the Democratic party (which has made solid gains in battleground states) could re-gerrymander key districts like John Boehner’s and put up prime candidates to dis-elect him. This fate for all the obstructionist ringleaders is devoutly to be wished.

But there are tougher nuts to crack. If takes far more to dis-elect a senator in a statewide race than a member of the House in a gerrymanderable district. In such cases the modern mode—Internet-based popular organizations—might be more effective than political parties.

The Internet organization moveon.org, for example, began with the goal of thwarting Republicans’ drive to impeach a popular president for sexual peccadillo. (It’s title “MoveOn” is short for something like, “slap him on the wrist and move on, so we can solve the nation’s problems and do the people’s work.”) Today, moveon.org seems rudderless and causeless. Why not use it to fund massive campaigns to dis-elect the naysayers’ ringleaders, people like John Boehner (R. Ohio), Mitch McConnell (R., Ky.), Jeff Sessions (R., Ala.) and John Ensign (R., Nev.)?

Beyond political action, there are boycotts. Special-interest lies have become so prevalent and outrageous that a voter in South Carolina recently wanted to get the government out of “his” Medicare. Fox News and its blatherheads are the primary sources of the propaganda that produces these misunderstandings. What would happen, for example, if an Internet-based public-interest group called for a massive, nationwide boycott of all sponsors of Fox News or Rush Limbaugh?

Our economy is still powerful and diverse enough to offer several good choices for almost every good or service. If Chevy supports Rush, buy a Ford (or maybe even a Hyundai). If Clorox seeks to make money from supporting demagoguery, buy an off-brand generic bleach. Broadcasters are, after all, business people out to make money. All if would take is a ten or twenty-percent sales dip for a few big sponsors to make them reconsider their long love affair with Rush.

The Baby Boomers are just beginning to retire. By and large, they will be the best educated, wealthiest, and most politically active cohort of seniors this nation has ever seen. Even if they weren’t there personally, they cut their teeth on political activism in the Freedom Rides to Alabama and protests against the Vietnam War. If there’s anything they care as much about as themselves and their children, it’s their country and its sense of social justice.

As they retire, Boomers will be looking for things to do with their unprecedented collective wealth, savviness and spare time. They have knowledge; they have expertise; and they have influence. They will soon be the leading demographic group of our most productive states, which account for 72% of GDP and elected President Obama. And they will still want to make a difference before they die. If you think that the AARP is a powerful lobby now, wait until the Boomer seniors hit their stride.

With the power and convenience of the Internet, there are lots of things that Boomer retirees can do to bring obstructionists to heel. It’s going to be interesting to see whether the politics of personal power and nation-be-damned pandering to local interests can survive this coming demographic tidal wave.

Footnotes

1. Source: OMB FY 2010 Summary Tables, Table S-4. (All numbers are rounded to the nearest tenth of a trillion.)

2. The assumption implicit in these numbers that oil prices will not increase over the next ten years is wildly optimistic. Although the British, who invented economics, are looking in closets for speculators and ignoring basic economic theory, that theory predicts rapid, nonlinear increases in oil prices as the global economy recovers. What caused the last year’s dramatic drop from the $140 per barrel price range to the $60s was: (a) the global recession and (b) the fact that Americans, for the first time in their profligate history, began getting serious about driving less and buying smaller, more efficient cars. (The first of these causes reinforced the second: the recession was what got Americans thinking seriously about exchanging Humvees for Hyundais.)

This sea change in American consumers’ attitudes is a much-neglected but hard-to-quantify factor in reducing oil prices. When Jimmy Carter lowered the White House thermostats and wore a sweater in the early 1970s, he was universally ridiculed. Today no one laughs at efficiency or conservation, and our youth are fully committed to them. These changes have an unquantifiable but probably substantial effect on both demand for oil and the expectation of future demand, both of which affect oil prices.

The President’s voluntary agreement with auto makers to improve cars’ efficiency dramatically and his “Cash for Clunkers” program are prime examples of intelligent policy designed to lower oil prices through tried and tested economic theory (reducing demand) rather than gimmicks or political witch-hunts for speculative abuse. To the extent they actually produce greater average efficiency (and hence lower demand for oil), they may help keep near-term oil prices from rising as fast as the population bomb and explosion in global living standards otherwise might predict. But in the long run, only the introduction of electric cars promises significant relief from ever-rising oil prices.

3. Nearly all the naysayers are men. Most women in Congress have the sense to keep their mouths shut when they have nothing useful to say. That’s one reason why we need more qualified women in Congress. They don’t tend to treat politics like a football game, in which winning trumps the general welfare.

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1 Comments:

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