Paying Political Deference To Dead Ideas
Let me toss in a few thoughts. First, if you watched Obama's press conference Tuesday night, it's clear that the Dead Idea that will be hardest to bury is the idea that "Taxes Hurt The Economy (And They're Always Too High)". I thought the president was at his worst on all the questioning about the $7 trillion to $9 trillion he's slated to add to the national debt, and the reason is that it's taboo to mention higher taxes as one obvious thing we're going to have to do to close the budget gap once the recession is safely past. This is the only way to make the math work as 76 million baby boomers retire. I'm interested that Bob thinks the economic trauma we're going through will make it harder to raise taxes in a few years - he may be right, but my own hunch is that with retirement savings so decimated, it's going to be harder than ever to trim future retirement benefits, so somehow both parties will come up with a hand-holding way to boost taxes to help us get back to fiscal sanity (perhaps as part of some broader tax "reform"). More likely we'll end up doing some of both. But in any event, when Obama seems off his game, and tap dancing unpersuasively, it's a sure sign he's paying political deference to a Dead Idea.
Justin, I'm glad you liked the history in those chapters. Researching the history of these Dead Ideas, and writing mini-biographies of each idea for those early chapters, was one of the most fun and fascinating parts of working on the book. And as for your question as to which of the Dead Ideas might keel over first, I'd vote for "Schools Are A Local Matter" and "Your Company Should Take Care Of You." Take schools first. I argue in the book that we'll only get schools where we need to get them if the feds play a bigger financial role in helping poorer schools rise (these schools now spend far less per pupil than more affluent suburban schools). I also argue that the feds need to set national standards for what kids should know in a 21st century global economy - instead of leaving this (unlike other wealthy nations) to the whims of 15,000 local school districts and 50 states. In his stimulus and budget blueprint Obama has taken some promising steps to increase the federal role in school finance, which to date has only accounted for about 9 cents on the k-12 dollar. And in his big education speech the other day Obama jawboned in favor of common, higher standards. So I think he's at least starting to push this Dead Idea toward the grave (whether he's buying enough real reform for all the money he's poring into schools is another matter...).
I'm also hopeful that we'll start moving beyond employer-based health care as well - though again, as with taxes, I think Obama is not framing the issue in quite this way because of political concerns. As I argue in the book, employer-based health care may have made sense 50 years ago -when health care was much cheaper, a single breadwinner worked at a big firm for 35 years, and U.S. companies were so dominant that they could afford to pass on, through higher prices, the cost of much of America's welfare state. But those days are gone. Health costs are killing business competitiveness even as our employer-based system leaves millions of people falling through the cracks. My own sense is that any major health reform now seems certain to include new ways for people to have access to group coverage outside the employment setting (like what Massachusetts has pioneered). And once this parallel system is set up, it can evolve and offer an option beyond job-based health care to more and more Americans over time.
I agree with Philip Howard that we need to find ways to institutionalize ways to "refresh the laws of the land." (PH's own new book, "Life Without Lawyers," is must-reading in this regard, and chock full of constructive ideas to move the country forward.)
Here's a question I've been thinking about and I'd be curious what others think: does the current economic crisis truly create an opening in the next few years to rethink our old (and now dysfunctional) ways of doing things - or will we just focus on fixing the financial system, and clawing our way back to growth, and not get to the outdated approaches plaguing us in these other areas? Will it instead take the slow march of globalization, and competition from rising economic powers like India and China, to force us to shed old ways of thinking that no longer make sense?
Why don't we see how every idea fares in the current crisis, before jumping into deconstruction. I believe all your idea areas are currently in use and now is the time to see how different approaches work. The Eurozone is in worse shape than we are in spite of all the cheerleading for adoption of their practices. For instance the WSJ notes the collapse of Hungary this morning, from pension payments payments.
The hard part is separating cause from coincidence. For instance, you think that a high tax rate left over from WW2 produced the prosperity of the fifties. Whereas I think it came from our economy being the only one left standing.
The thing I do like, is the idea that tax objections are always the same. It's time to see who is right about their effects. Especially the regressive taxes.
March 25, 2009 12:03 PM | Reply | Permalink
Wouldn't it be fairer to ascribe Hungary's collapse to the Fx version of the old "borrow short lend long" banking arb -- that is, banks borrowing in strong currencies and lending in weak currencies?
March 25, 2009 9:50 PM | Reply | Permalink
Could be, but this sentence from the article says it all.
That's stunning.
March 26, 2009 7:42 AM | Reply | Permalink
We will never see new ways of thinking about ideas until we enact real systemic reform to the system.
First, stop lobbying and lobbyists. For one thing it is nothing more than legalized bribery and blackmail and no new ideas or dead ideas can be thought or rethought as long as we have powerful self interests protecting those ideas from consideration.
Second, enact term limits on congress. As long as powerful members of congress are being supported by lobbies and lobbyists and both are interested only in self-preservation there is no possiblity that meaningful change can be enacted. Congressional office was never meant to be a career option with pensions and benefits which in itself is corrupting and dispiriting and encourages hunkering down in the past.
Third, we must have open and real accounting both in government and business and especially where the two cross the line that supposedly separate the two. If we don't know how much money we have, how much money we spend and how much money we owe there is no way to gauge the efficacy of any ideas, new or old. As long as costs can be hidden, the people are at the mercy of those holding that information. Do we really know if Social Security is going to be 50 trillion dollars short in 75 years? No, we don't, because there is no true accounting and anyone with an axe to grind is free to choose whatever numbers best suit his/her argument for or against it.
Fourth, we need direct election of the president, public and limited financing of the campaign and limited time in which campaigning can take place. Now, by the time the election takes place the candidate is beholden to more and more of the special interest groups that have financed the campaign. It is the snowball that becomes the avalanche that wipes out all intentions of change and duty to country. The money class becomes the true constituents, not the citizens of the country.
Fifth, while you can't have taxation without representation, you also can't have representation without taxation. Everyone, including corporations must pay a fair share, so the moving of taxable entities offshore must be stopped immediately. Who knows? We may be able to fund new ideas and ditch dead ideas if we have an equitable and fair taxing system. We could infuse schools right away with new funds if tax abatements for businesses were prohibited - we all have a vested interest in educating citizens so why shouldn't we all pay for it? Local school boards don't work because they're hostages to teachers' unions, they don't work because the people don't care, don't attend meetings unless they have some particular axe to grind and have no idea as what school boards are responsible for or what they do. Why call for nationalizing schools when people have no idea as to how schools are funded now?
Sixth, stop beating dead horses. Without real, systemic change, we will never have reform and without reform there can be no flexibility in assessing and re-assessing programs - enacting new ideas and the rethinking of dead ideas is futile and nothing more than beating dead horses if there is no mechanism for change. Every few years in the business community some new trend in management rears its head - mission statements, road plans, innovative management styles and do you know what happens? Nothing. Nothing changes, the business/corporation goes on exactly as it always has because people who become entrenched in the business are too afraid to innovate and change. The higher they rise in the business, the longer they are there, the more reason they have to keep the system they have. The government is exactly the same - the same people, deeply entrenched in the system, all educated at the same schools with the same network of connections manage it (which is why the senate looks like a geriatric daycare center) and have no impetus to change, in fact they are deeply afraid of it. That is why every single candidate goes to D.C. after promising the constituents that he will go there to change it, finds that the system will not allow change and because the system is too powerful, they are afraid to try.
It's great to call for rethinking and changing our way of thinking, but until the system changes, there is no point in it.
March 25, 2009 12:25 PM | Reply | Permalink
As a single payer advocate my suggested dead idea is, of course that for private profit health insurance companies contribute anything useful to a health care system. This fits more generally into the dead idea that is free market fundementalism. Sometimes pure capitalism is useful for producing widgets. But health care systems and health economics are not such a place. It is "American Exceptionalism" at its stupidest (http://www.dailykos.com/story/2008/11/25/666148/-American-ExceptionalismHealth-Insurance-Company-Costs).
More specifically when it come to cost-control, as well as getting to health care that is both universal (all people) and comprhensive (all needed care), all the independent analytic studies, such as by Lewin Group recently for Commonwealth of national programs (http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=777197); and for state programs, and earlier national analyses by GAO and CBO (http://www.pnhp.org/facts/single_payer_system_cost.php?page=all) show that single payer is the best way to control total costs (e.g., %GNP) and individual/family total costs.
The "politically acceptable" mandates plans, building blocks plans, mixed-public-private plans from mainstream Democrats don't do it. Neither does Wyden-Bennett and the various Republican proposals to get rid of the tax deduciton and promote free market competion for buying private health insurance (http://www.dailykos.com/story/2009/1/13/683458/-The-Most-CompleteHonest-Comparison-of-Health-Proposals)
So despite all independent economic anaysis, single payer is not on the table or to be spoken of in polite company. Sigh.
March 25, 2009 12:38 PM | Reply | Permalink
"This is the only way to make the math work as 76 million baby boomers retire. I'm interested that Bob thinks the economic trauma we're going through will make it harder to raise taxes in a few years"
Opposition to taxes is not by definition bad or a dead idea. Opposition to taxes can be useful, in certain contexts.
I also wouldn't necessarily accept the upper-class frame of making tax-talk all about middle class "entitlement" programs and not all the many things a very destructive and negligent federal government has been piling on us: namely, military adventurism and bailing out collusive financial fraud on an unprecedented scale.
If we're paying for what the criminal gangs running "our" government just threw on deck, then our taxes really are too high.
March 25, 2009 5:01 PM | Reply | Permalink