"The people who are constantly exasperated about the perfidy and sheer irrationality of the other side is the team that is in fact ill-informed."
January 21, 2011 7:30 AM   Subscribe

Endogenize Ideology: Steve Waldman on the interplay between policy decisions and public opinion, in response to Krugman.
posted by Jpfed (14 comments total) 13 users marked this as a favorite
Here's the thing about that famous saying from Otto von B: "Politics is the art of the possible." I like to say it's been grievously misread all these years: it doesn't mean "The art of doing what's possible"—why would you celebrate something so tautologically self-evident? —It means, instead, of couse, "The art of making things possible."

How delightful to see the math supporting the snark!
posted by kipmanley at 7:46 AM on January 21, 2011

Player 1 erroneously believes constraints to be exogenous.

Those who know me will tell you I'm anything but constrained.
posted by exogenous at 8:33 AM on January 21, 2011 [4 favorites]

Here's what's bullshit about Krugman's position--in a way.

The people who think all taxation is theft are not paying attention. A small portion of the monies collected as taxes go to the less well off. Most go back to the community, where they generate wealth.

Think of it this way. Look at a road. Yes the cars of everyone travel the road. But guess what? So do the trucks of corporations owned by the rich. And that is a form of free riding to say that the taxes that make that road that their trucks travel is theft. And the Securities Exchange Act and the SEC that enforces it allows for low-cost capital accumulation with relatively low threat of fraud.

And the police spend most of their time protecting the rich from property crimes.

Even the dreaded health care helps the rich, for it provides healthy workers to do their jobs, from which the rich corporation owners make money.

Those fools do not understand their own free riding.
posted by Ironmouth at 8:49 AM on January 21, 2011 [4 favorites]

Ironmouth, I believe Krugman was saying "some people believe that all taxation is theft", not "I believe all taxation is theft". Krugman wonders how we can make effective policy given that some people believe that idea; Waldman considers that we might be able to make effective policy that could change that idea.
posted by Jpfed at 9:08 AM on January 21, 2011

Ironmouth, from Krugman's column:
Regular readers know which side of that divide I’m on. In future columns I will no doubt spend a lot of time pointing out the hypocrisy and logical fallacies of the “I earned it and I have the right to keep it” crowd. And I’ll also have a lot to say about how far we really are from being a society of equal opportunity, in which success depends solely on one’s own efforts.
posted by [citation needed] at 9:13 AM on January 21, 2011

One of the things that's become evident to me over the last few years is that the reasonable marcoeconomic policy idea of using the public sector to counterbalance the boom-and-bust swings of the private sector plays very badly with public opinion and political psychology.

In theory, and I think perfectly sound theory, when the economy is booming, the government should take advantage to pay off deficits etc. What some people have taken to calling "fiixng the roof while the sun is shining". And conversely, in bad times for the private sector, it makes sense to increase public spending to take up the slack, get projects done at low cost, keep people who would otherwise end up on welfare doing useful work etc.

Good economics, but it doesn't fit in with human psychology at all.

In the boom times, public sector workers cry "Our pay is getting left behind!" And as it becomes harder to recruit and retain good people, politicians and publlic sector employers are inclined to agree. At the same time people complain about, to use the Galbraith phrase, the combination of private affluence and public squalor. It seems all wrong that money isn't being spent on public services when things seem to be going so well for so many. And voters who are feeling comfortable financially are relatively willing to pay for better services.

In the bust times, the psychology is reversed. It might make economic sense to spend more on public services, but now the outcry is: "It isn't fair! People in the private sector are losing their jobs and taking pay cuts! Everyone should share the pain! I'm having to spend less, the government should too!"

The other thing to mention is lags in public psychology. It takes a while for people to start seeing the good times as normal, though maybe less time to start fearing the bad times have become the new norm. But because of these lags, it is politically easier to be prudent in the early years of a boom than to keep doing it after a long period of success. The nature of the imprudence might vary with the politicians who happen to be in power, whether it's making unwise tax cuts, or letting spending rip. But the pressure to relax the discipline that formerly seemed necessary is the same.

I don't know if I want to "endogenize" these phenomena. But I want people to start realizing that policymakers don't get these things wrong because they're stupid and short-sighted, but because there are real and inevitable social and political forces acting on them.

The best chance of avoiding the problem is to first have widespread understanding that it is a systemic problem, not purely about the inadequacies or some of other set of people that happened to be in power at the time.
posted by philipy at 9:16 AM on January 21, 2011 [2 favorites]

One of the things that's become evident to me over the last few years is that the reasonable marcoeconomic policy idea of using the public sector to counterbalance the boom-and-bust swings of the private sector plays very badly with public opinion and political psychology.

i think you misunderstand the political economy of the new deal i.e. using US federal government spending to balance out the business cycle. the point was always that enough people in finance and business saw the great depression as a existential threat i.e. a spectre over the US either of national socialism or communism. there was never majority support for roosevelt on wall street or in the business community, but given his old money credentials and the depth of the crisis, nascent left wing sympathies etc. that he was allowed, just barely and with a lot of fights, to do this.

the problem today isn't that keynesian economics isn't politically popular but that wall street has been lulled into thinking that the business cycle has been tamed. that's the constituency that needs to be sold on keynes.
posted by ennui.bz at 9:34 AM on January 21, 2011

Philipy, I think your analysis is a good one, but I think it needs to include the dynamic Waldman describes that some players in the political arena (including most Democrats) are open to considering the kinds of economic options you describe. Other players (a significant and increasing number of Republicans) are more interested in pushing their ideological opposition to taxes than trying to figure out what's in the best interests of the country.

In that environment, Democrats may need to make some policy decisions on ideological grounds and shift the Overton Window or we'll lose completely the capacity to have a bipartisan discussion about the issues you raise.
posted by straight at 9:36 AM on January 21, 2011 [1 favorite]

endogenizing ideology...

also btw Obama's Jobs Search - "With Geithner as its anchor, a new economic team is being built around Bill Clinton-era figures... in hiring former Commerce Secretary William Daley as chief of staff, Obama turned his White House over to an executive from JPMorgan Chase... The selection of Sperling, who held the same job under Clinton, was telling..."

posted by kliuless at 10:10 AM on January 21, 2011

Other players (a significant and increasing number of Republicans) are more interested in pushing their ideological opposition to taxes

Let me mention... I wasn't thinking only or even mainly of the US. The same things apply to many other countries as well. The phenomena play out differently depending on the culture, so in the US the "tax is evil" crowd gain in influence, while in the UK, the mood starts to shift towards the feeling "welfare is too generous".

Those people who were ideologically opposed to taxes were always around, but now the public mood is more receptive to them.

I guess it's also a tendency of psychology that people tend to personalize issues, which makes them slow to learn from history. For instance going for the narrative: "Gordon Brown thought he'd abolished boom-and-bust because he was arrogant" versus "Gordon Brown thought what most everyone did at that point, that all over the world people had learned to manage their economies better than in the past... And even if he had wanted to be more cautious, after years of feel-good times, the whole political tide was flowing the other way."

People who wanted to spend lots more on schools and health were always around too in the UK. But the interesting thing, for the purpose of this discussion anyway, is how those people came to gain or lose influence at various times, something which seems to be pretty independent of the merits of what they wanted to do at any given time.
posted by philipy at 11:03 AM on January 21, 2011

Let me be clear, I know that Krguman is right. I'm just saying that he doesn't go far enough into the real beneficiaries of most government.
posted by Ironmouth at 11:52 AM on January 21, 2011 [1 favorite]

I think both articles are on point. But I think the $250,000 question is, HOW do we move ideology to the Left?
posted by HighTechUnderpants at 2:48 PM on January 21, 2011

HighTechUnderpants: HOW do we move ideology to the Left?

The first step is to convince the powerful (Business, Media, Military-Industrial) that it is in their best interests to move to the Left. And by 'in their best interests' I mean 'they will make more money.'

No one ever said it was gonna be easy.
posted by jet_manifesto at 5:32 PM on January 21, 2011

This isn't the guy from belief.net is it?
posted by Rarebit Fiend at 6:21 PM on January 21, 2011

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