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Monday, June 28, 2010

DeLong: Listening to Arsonists

Brad DeLong seems pessimistic about our political system:

Listening to Arsonists, by J. Bradford DeLong, Commentary, Project Syndicate: I had always thought that Barack Obama made a significant mistake in naming the Republican ex-senator Alan Simpson to co-chair the president’s deficit-reduction commission. Simpson was a noted budget arsonist when he was in the Senate. Indeed, he never met a budget-busting, deficit-increasing initiative from a Republican president that he would not lead the charge to pass. Nor did he ever meet a sober deficit-reducing initiative from a Democratic president that he did not oppose with every fiber of his being.
You don’t pick an arsonist to head the fire department... But perhaps I am ungenerous. Perhaps Simpson has had a change of heart. ... Even in that case, however, naming those who misbehave to important positions of high trust and acclaiming them as bipartisan statesmen gives the next generation really lousy incentives. And it’s not as though Congressional Republicans think they owe enough to Simpson for him to swing a single vote in either chamber of the legislature.
Obama officials assured me that Simpson had, indeed, had a change of heart; that he was a smart man with a sophisticated understanding of the issues; that he could sway reporters and get them to describe the commission’s advice as “bipartisan” (even though he could not sway actual legislators); and that he would be a genuine asset to the substantive work of the commission.
John Berry recently wrote in the online journal The Fiscal Times that not even that is true. Simpson is “condescending and derisive – and wildly wrong about important parts of the Social Security system's past.” ...
Four centuries ago, the consensus, in Western Europe at least, was that good and even adequate government in this fallen world was inevitably a rarity. Democracy always degenerated into mob rule, monarchy into tyranny, and aristocracy into oligarchy. Even when well run, democracy took little interest in the distant future, aristocracy took little interest in the well-being of those whom Simpson calls the “little people,” and monarchy took little interest in anything other than legitimate succession.
Then, at the end of the eighteenth century, the founders of the United States of America and their intellectual successors claimed that this pessimism about government was unwarranted. “The science of politics...like most other sciences,” claimed Alexander Hamilton, “has received great improvement....The regular distribution of power into distinct departments...legislative balances and checks...judges holding their offices during good behavior; the representation of the people in the legislature by deputies of their own election...are means, and powerful means, by which the excellences of republican government may be retained and its imperfections lessened or avoided...”
Perhaps Hamilton was too much the optimist. When I look at Barack Obama’s deficit commission – indeed, look at governance worldwide – I see many imperfections, but few or no examples of excellence.

I get pessimistic too, especially when I see Simpson types put in charge of things they have no business overseeing. But when I step back and look at the U.S., I see progress over time on important economic and social issues. The progress is not linear, or even always positive, it's excruciatingly slow, and that can be pretty frustrating when you are fighting the battle of the moment. But things are better now than they once were, and we continue to make progress on important social issues (though, again, it is frustratingly slow). Don't get me wrong, we are far from the end of the process, there is much, much more to do before our job is complete, but if you are a anything but a wealthy white male, things are relatively better now than they once were.

Will things continue to get better? I think so, but the system must continue to evolve over time so it can match the rise of economic and political power with institutions and mechanisms that will blunt their influence and reassert core principles. People with power will find a way to capture the system for themselves, and as their economic and political power increases as a result of their efforts, they will be increasingly successful at this task. I believe that we have allowed far too much capture of government by the powerful in recent decades -- the current state of campaign finance is one reflection of this -- and that this is the biggest danger we face going forward.

Political power is derived in large part from economic power, and a good place to start would be to begin asking harder questions about the costs and benefits of having businesses as big and influential as they are presently. If the economic efficiencies from size do not justify the costs from having such large and powerful firms, and I suspect in most cases they will not, then we need to reduce the power that these firms have (by breaking them if that is the best way to accomplish this). And even when size is justified by efficiency considerations, we need to do a much better job of regulating these firms so that they cannot exert undue influence on politics and the economy. If we don't, if we continue to allow the biggest among us to have the most say as has happened more and more in recent decades, if being big means you will mostly get your way, then we should worry about the future of our political system. I've been optimistic that we'll see the light, but that optimism has been shaken a bit by the outcome of legislation to reform the financial system. This legislation did very little to blunt the power that large firms can exert on our political system. That must change.

    Posted by on Monday, June 28, 2010 at 10:24 AM in Economics, Politics, Social Security | Permalink  Comments (12)


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