Does American Democracy Still Work? Thursday, May 3, 2012:

Join us at the Faculty Club for the second panel symposium on American politics and democracy. This panel will offer three deeply informed perspectives on the origins and evolution of the economic and political angst that seem to afflict the nation. The panel will feature J. Bradford DeLong, Professor of Economics and a research associate of the National Bureau of Economic Research; David Hollinger, Professor of American History; and Paul Pierson, Professor of Political Science.

Is American Democracy Broken?

I am here somewhat under false pretences.

I am not a political scientist.

I am an economist.

And, with this topic, I feel myself outside my comfort zone.

What I have to say is made up of two parts: The first part is an economist’s not theories or analyses but rather prejudices about how modern democracy should work. The second part is my reflection on both my experience of serving as a deputy assistant secretary of the U.S. Treasury for economic policy in the Clinton administration and from watching as my friends went to Washington in the Obama administration, in what seemed to me to be at times a bizarre surrealistic remix of "Mr. Smith Goes to Washington".

An economist is going to start thinking about democracy with Tony Downs’s economic theory of same. First-past-the-post electoral systems and office-seeking politicians should produce a two-party system. Office-seeking candidates simply won't join any third party because their chances of election will be too small. Only those who want to make some ideological or demonstrative point rather than to actually win office and then make policy--cough, Ralph Nader, cough--will do so. Hence the stable configuration has two parties. And then the two parties hug the center and follow policies attractive to the median voter.

Ideology will matter--politicians do not run purely for love of office but rather to then make the country into what they regard as a better place. There will be swings to the left, to the right, to the up, to the down, to the forward, to the back. But the policy views of the median voter ought, according to Tony Downs, function as a strong attractor and we should not expect the policies implemented by the politicians who get elected to deviate far from them.

Now there are qualifications. It is the median voter, not the median citizen.George W. Bush became president not because his policies came closer to the preferences of the median person who voted on that Tuesday in November but because his policies came closer to the preferences of the median Supreme Court justices Anthony Kennedy and Sandra Day O'Connor. Gerrymandering and misapportionment--cough, the Senate, cough--matter a lot. But these are qualifications. Tony Downs made a very strong case that first-past-the-post electoral systems will produce policies that the median voter likes. Thus in this sense the electorate gets the government it deserves. If there are problems, the problems are in the minds of the voters rather than in the Democratic system.

That is the economist's not theory, not analysis, but rather prejudice. theory. Political scientists will scorn it as hopelessly naïve. But it is the benchmark from which I start.

Now let me shift and talk about our experience here in America since I got to Washington in early 1993, carrying spears for Alicia Munnell in Lloyd Bentsen’s Treasury Department in the Clinton administration.

Clinton was a centrist Democrat. The Clinton administration's priorities were by and large, with exceptions--gays in the military--what you might call "Eisenhower Republican" priorities. Expand healthcare coverage so there were fewer uninsured and fewer people dumped by ambulances on the corners of the Tenderloin. But also control government healthcare costs, which were then ballooning out of control--even though we didn’t know what "ballooning out of control" really meant back then. Balance the budget. End welfare as we know it--thus buying into the Republican critique of the Depression-era belief that raising children was real work and a socially-valuable task, even if you were not married to a rich husband who was the chief executive of Bain Capital. Passing NAFTA. Creating the World Trade Organization. Strenthening Social Security through a combination of tax increases, benefit cuts, retirement-age increases, mandated private accounts requiring individuals to contribute their own money over and above Social Security (as an add-on but not a carve-out, as a supplement to and not a substitute for Roosevelt's New Deal's Social Security), etc.

All of these seemed to us in the early 1990s to be bang-on the median voter’s preferences. Eisenhower Republicans. Clinton Democratics. We in the Bentsen Treasury at the start of 1993 looked forward to doing an awful lot of technocratic work--cranking out centrist legislation approved by large bipartisan majorities.

We found Republicans cooperative on NAFTA.

We found Republicans pushing for welfare reform--but only to the extent of passing things that were so highly punitive that they could not believe any Democratic president could in good conscience sign them. But Clinton fooled them. He signed welfare reform--and then spent some time in 1996 campaigning on the message: "re-elect me because only I can undo some of the damage that I have done to the welfare system". Which was true. And which he did.

Otherwise...

Otherwise the Republicans when I got to Washington at the start of 1993 decided that they were going to adopt the Gingrich strategy: oppose everything the Democratic president proposes, especially if it had previously been a Republican proposal and priority.

That is not a strategy that would ever be adopted by anybody who wants to see their name written in the Book of Life.

But Gingrich found followers.

And so things that we in the Bentsen Treasury all expected to happen, did not happen. We had expected that sometime between January and June 1994 Lloyd Bentsen’s chief healthcare aide would sit down with Bob Dole's chief healthcare aide. We had expected that they would hammer out a deal, so that people in the future would never be as dependent on on charity for their healthcare as Bob Dole was when he returned injured from World War II.

That meeting never happened. Bob Dole decided he would rather join Gingrich to try to portray Clinton as a failure. So Bob Dole never got a legislative accomplishment. Instead, he got to lose a presidential election. And I today remember Bob Dole not as the co-architect of health care reform in 1994, but as somebody who denounced Roosevelt and Truman for getting us into those Democrat wars that saved Europe from the Nazis, China and the rest of Asia from Imperial Japan (and that have allowed South Koreans to grow five inches taller than their North Korean cousins).

As my friend Mark Schmitt wrote in his review of Geoffrey Kabaservice's book about the moderate Republicans, Rule and Ruin, the moderate Republicans were partisan Republicans first and Americans second. And so they erased their names from the Book of Life.

And in all of this back in 1993-4, it really didn’t help that various Democratic barons--Boren, Kerrey from Nebraska, Moynihan, a bunch of others who are not spoken of for their names are Unwritten--thought at the time that their principle task was to teach the Hick from Arkansas that he was not boss.

Then came Bill Clinton's affair with Monica Lewinsky.

Then came George W. Bush--installed, as I said before, by the mandate of the median voters Sandra Day O'Connor and Anthony Kennedy. Bush's priorities were: (i) tax cuts for the rich (which attracted the support of "centrist" Democrats); (ii) an unfunded Medicare drug benefit, Part D, that also busted the budget and seemed designed more for drug companies than for Medicare beneficiaries (partisan); (iii) to casually and thoughtlessly bust the budget and undo all the budget-balancing work we in the Clinton administration had accomplished (partisan); (iv) o child left behind (bipartisan), (v) the war on Iraq (bipartisan); (vi) the deregulation of finance (which attracted the support of "centrist" Democrats; and (vii) a big right wing push for social security privatization that was purely republican, but that never passed because the Republicans shied at the jump.

We seemed to have returned to normal politics.

Certainly there was no lockstep Democratic opposition to all Bush initiatives in the hope of portraying him as a wimp and winning the next election. The policies were, all in all, very lousy--but I blamed that on (i) the voters who elected Bush--cough, Rehnquist, Scalia, Thomas, O'Connor, Kennedy--(ii) a media that refused to tell the citizens when and how Bush was lying to them, and (iii).

Then came George W. Bush in 2007 and 2008. Things seemed to be heating up again: Bush seemed not terribly interested in centrist policies. But the Democrats seemed not terribly interested either. Everybody seemed to be interested in "heightening the contradictions" and waiting for November 2008.

Then came Obama in 2009 and 2010. My friends--Christina Romer, Lawrence Summers, Peter Orszag, and company--headed off to Washington to plan a Recovery Act. A bipartisan Recovery Act. They thought it would get 25 Republican votes in the Senate easy, for itt was a squarely bipartisan fiscal stimulus: this tax cut to make the Republicans stand up and applaud, this infrastructure increase to make the Democrats applaud, this increase in aid to the states to make the governors and state legislators applaud.

It didn’t get 25 Republican votes in the Senate.

It got 3.

On healthcare reform, Barrack Obama's opening bid was the highly-Republican Heritage Foundation plan, the plan that George Romney had chosen for Massachusetts.

RomneyCare got zero Republican votes.

On budget balance, Obama’s proposals have not been the one-to-one equal amounts of tax increases and spending cuts to balance the budget of Clinton 1993 or Bush 1990. Obama’s proposals have been more along the lines of $1 of tax increases for every $5 of spending cuts.

And the Republicans rejected them.

Controlling global warming? Doing something to deal something to deal with our increasingly unequal and outsized income distribution? Strengthening financial regulation so tht things like the 2008-9 financial crisis do not happen again? No republican votes for any proposals on any of these issue areas under any circumstances--not even when the proposals Obama makes were baked in Republican think tanks even five years ago.

What’s going on?

I look around and I see a number of things:

I see a press corps that is unconcerned with policy substance and the future of America and devotes itself to calling politics like a basketball game: "who wins the week?" "who wins the day?" Lately it’s been: "who wins the morning?"

An electorate that in my fears appears to want to be led by a strong or a competent leader--or rather by a leader whom the press corps tells it wins lots of mornings--and that does not want to see its policy preferences actually enacted and satisfied, or that does not know what its policy preferences are.

Multiple blockage points in our outdated eighteenth-century orrery of a political system that froze the distribution of power between President, Senate, and House where the distribution of power between King George III, Lords, and Commons had been in 1776--and thus that makes it easy to block things, and hence very easy to portray a president of the other party as a hapless failure.

A recognition that if you make blocking everything the president of the other party does your highest priority, you do have a good chance of portraying him as a weakling and doing well in the next election cycle.

1994 and 2010 demonstrate that this nihilistic, anti-patriotic, un-American strategy works.

Democratic barons--cough, Blanche Lincoln and Ben Nelson, cough--who remind me of Wile E. Coyote standing in the desert after the Roadrunner has dropped a 500 ton weight from above: frozen and watching in place as the shadow covering him grows larger. Simply put, they do not understand that when they face the electorates of Nebraska and Arkansas, saying "but I helped block Obama from doing liberal things!" is not a strategy that wins them reelection. But "I backed the president, and the president did X, Y and Z, and look at how much better things are" might well be.

On top of all these, everybody below the top 5% of the American income distribution today is not living any better than their predecessors did a generation ago. We all have lots of cheap electronic toys (I love mine). But offsetting that we have more congestion, longer commutes, and more expensive houses. For the top 5% things are better. For the rest of America, it looks as though they may well not be.

Right now, for every 13 workers in America, we have one person who would be working in normal times--who was working back in 2007--and who now is not working. That means that two-thirds of American households today have one or more people in their or their parents' or their siblings' or their childrens' households who would be working in normal times and is not working now. At the moment more people still think that this is George W. Bush’s fault than think that it is Barack Obama’s. But everyone agrees it is the governments fault somehow--although they are not sure how.

Is this broken democracy? Does our politics still work?

I am just an economist.

I am not sure what the definition of broken politics is.

I am looking for enlightenment from my other two panelists.