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

08 September 2009

Fear, Delusion and Their Antidote


As Joe Biden said the other day, just last year we were looking at the beginning of a second Great Depression. Now we see the end of a recession rapidly approaching in our daily news. Most of the massive infrastructure spending in the President’s stimulus bill has yet to kick in, and the G-20 just agreed to keep the global pedal to the metal. Yet fear of harder times is rampant, even on usually sunny Wall Street.

Our government has broken the bank to keep private industry private and afloat. In the past half-year or so, the Fed and Treasury have spent or committed three or four trillion dollars (depending on whose figures you read) on guarantees and direct support for financial firms. Far from failing, many of them are thumbing their noses at the government that saved them and pressing to give their bailout money back.

Though restructured, GM and Chrysler are still viable (Chrysler barely) and still privately owned. Both have sold lots of cars under the government’s “Cash for Clunkers” program. Yet after writing one of his best columns on Ted Kennedy and gradualism, usually sane conservative pundit David Brooks decries a government takeover.

So where’s the government takeover? I just don’t see it. What I see is government committing trillions to keep private business viable and privately owned.

Then there’s the terror over the presumed cost of health-insurance reform—about a trillion dollars over ten years. We have a $14 trillion economy, and health care accounts for about sixteen percent of it. So health care costs us collectively well over $2 trillion every year, or about twice the ten-year cost of a fix. We plan to spend $10 trillion on Medicare and Medicaid alone in the next ten years, and fixing health insurance will cost only 10% of that.

Viewed against these figures, a trillion doesn’t seem like much money at all—not to fix a sixty-year-old problem that everyone agrees will break us if it stays unsolved. Yet fear that health-insurance reform will lead us to economic ruin is rampant.

Where is all this irrational angst coming from? The fear and delusion sweeping the country are so absurd that it’s difficult to pinpoint the source.

Only two possible sources are readily apparent. The first I call “leadership deficit disorder.” For nearly thirty years (since Reagan), we’ve gotten used to dogmatic leaders who derived their domestic economic policies from a set of simple fairy tales, without the flexibility to deal with facts, evidence or changed circumstances. The exceptions—Jimmy Carter and Bill Clinton—failed because they couldn’t translate their superior intelligence for ordinary folk. Carter was a White-House recluse who couldn’t deal with Congress, and Clinton was so entranced with his own intelligence that he enraged both the opposition and a lot of ordinary people as well.

Barack Obama is our first president in two generations who combines superior intelligence with enormous diplomatic and political skill and yet knows how to keep his ego in check. So people just don’t know what to make of him. Most of us have been conditioned like Pavlov’s dogs to think of government as untrustworthy and incompetent. We still can’t bring ourselves to understand that we have a new kind of leader.

The second possible source of national delusion is something people would rather not talk about. Many people who ought to know better are afraid and deluded because they just aren’t comfortable with a president of mixed race.

But no matter. We’re all going to get the benefit of our President’s and his team’s extraordinary abilities whether we’re comfortable with him or not —just as we already have in escaping a second Depression far faster than anyone expected, in seven short months! Leadership will be the antidote to fear and delusion, just as it was in FDR’s day.

Although his strong supporter since well before the primary campaign, I myself underestimated the President twice and was wrong both times. Now I know he’s even smarter than I reckoned and infinitely more patient than I. He bides his time.

That’s exactly what he’s done on health care.

For the last seven weeks or so, we’ve had what amounts to a nationwide bar brawl on the subject. To say there has been far more heat than light would be Obamanian understatement. The President has watched it all patiently, with his special ability to play three-dimensional psychological chess in his head.

He knows now with great precision who all the brawlers are, who’s allied with whom, and where the obstacles to progress are. His aides have counted the votes in the Senate, over and over. He’s also conscious of sporadic outbreaks of intelligent debate, mostly in the elite press and on the Lehrer News Hour. And he has good internal advice from the best political, economic and medical minds in the country.

Now he knows how hungry we all are for leadership. He’s let the self-interested, greedy, stupid and demagogic all have their say. He’s let the small minds from small states give us a peek at a future of “no, no, no!” And he’s given us plenty of time to ponder what a sad state we’d be in if we had to rely on their leadership.

Now our hunger for rational leadership has built to the point of starvation. We are waiting for someone to break up the bar brawl and bring us to order.

So when the President speaks to Congress and the nation tomorrow night, expect us all to listen. I don’t know what he’ll say. I hope he’ll keep the public insurance option on the table or at least provide a good substitute.

But I do know this. When he speaks, he will outline the art of the possible.

The President’s hands are not free. Congress writes the laws, not he. And small minds from small states control Congress, at least as concerns health-insurance reform. Yet with intelligence and an extraordinary political sense, the President will get us the best deal that can be had today. And we had all better take it, because we won’t soon get another.

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