Liberal dynasties riding above the mess

Do you realize that Hillary Clinton and Justin Trudeau are the most popular politicians in North America today?

Two inspirational speakers with inspiring names ride above scandal, uneven recovery, and apocalyptic worries about the environment, global governance, and democratic capitalism. They are more popular than all the other professional politicians who’d like to change things significantly and, as well, they lead the conservative-minded incumbents in Ottawa and Washington.

They have plenty more in common.  

Beyond the daily pleasures and perils of celebrity, they’ve both won regional elections and campaigned to lead national liberal parties. (Trudeau now leads Canada’s Liberal Party and Clinton was supposed to win the presidential nomination for the Democrats in 2008.)

Also, neither has ever run a winning national campaign, a significant national organization, an elected government, a domestic program, or a domestic department of government. They’ve never raised a tax, cut a loophole, shrunk a program, passed a program, selected a Cabinet, nominated a judge, chosen one good cause over another, or negotiated with a public sector union.   

Still, their polling numbers sweep the field. Their names conjure memories of better times; and they do that old trick of appearing to do politics and modern government better than all the overwrought ideologues and sordid hacks who don’t call themselves liberals.

They hang with the rich and their retainers but don’t answer to money. They’re “aspirational” without being ideological.

They don’t play on the edges or ever stray outside the orthodoxies of the two oldest political machines in the West. Today, each carries the dream of power that beats in the hearts of insiders in both machines.

Yet, they both complain about cynicism and bet they can win by owning the slogan “It’s time for a change”—that sigh that kills rigorous debate and skirts the hard business of securing a mandate to do something important.

Bit cranky? Do I have a problem with dynasties? Sure.

But declining to bet on Trudeau in the Canadian election of 2015 and Clinton in the US election of 2016 is easy, even a cold calculation. Betting that both will win is far harder.

Big surprises may come along and save Stephen Harper and elect a Republican President. And, after that happens, people will say: a second term for Harper was in the cards and a third term for Democrats wasn’t. However, even if nothing extraordinary happens, we already know enough about Trudeau and Clinton, their styles, their politics, and their adversaries to question their chances of keeping ahead for years before anyone votes.

Saying they’ve got what it takes today is roughly equivalent to believing that focus groups today can tell Apple executives what will be selling—and how to sell it—2 years from now.

Cliff Jumping: today’s wicked liberal temptation

Barack Obama is strong in the polls and is enjoying his second honeymoon in Washington. Once again, he’s Time Magazine’s “Person of the Year”.

However, this lovely year is dying and, as in 2008, the year approaching is killing the holiday spirit. Rather than boast about the last campaign or act as though it holds all the cards, Obama’s White House keeps trying to compromise with Republicans.

Rather than only exempting income under $250,000 from higher tax rates, he now proposes to exempt income under $400,000. Furthermore, he’s agreed to constrain the growth of Social Security payments. Overall, he’s offered a plan that is less liberal than many Democrats would like, but sufficiently conservative to rally the support of business and moderates. Overwhelmingly, they see their interests best served by incremental restraint, incremental deficit reduction, and incremental revenue enhancing tax changes—whatever a majority of legislators and the President agree is necessary to sustain the recovery and avoid another crisis that would make America look stupid.

Obama doesn’t talk about bi-partisanship anymore; he just scorns extremists and those who avoiding making a deal. Also, he says he’s prepared to keep negotiating. This is making some influential liberals very uncomfortable.  Are Democrats reverting to Wimps? Timothy Noah asks in today’s post for The New Republic.

Calling a politician a “wimp” can be dangerous. Remember George Bush’s first term? However, this isn’t Obama’s first crisis, nor is it his first term. Politically and legislatively, he’s done quite well settling for what often appeared at the time as less than half a loaf.

Daredevil liberals presume that Obama finally has sufficient political capital to intimidate the more pragmatic Republicans and shouldn’t be compromising anymore. If those blockhead Republicans don’t give in voluntarily they can be bullied into after Washington, Wall Street and American self-confidence goes over the “Fiscal Cliff”. Whoopee!

If only politics was only theatre and its artists controlled the scripts. Winning on fiscal policy, however, isn’t ever clear-cut or permanent. New Deal Democrats didn’t get through their agenda before they were thrown out. Reagan and Thatcher conservatives didn’t undo big government or even change the public’s habit of turning to the state for help and solutions.

Before risking another recession that—in advance—looks manageable, liberals should recall why they feel like winners, and why that feeling could be fleeting.

They won, in large part, because millions of Americans decided that Obama offered a more careful Presidency than the alternative. And they want a careful President because the economy and America’s stature are recovering.

Maybe there is no honorable deal to be had over the next ten days. However, insisting Obama win big in this lame duck Congress carries immeasurable risk. Historically, economic prosperity has been good for liberal incumbents. And retrenchment has been very tough.

Avoiding another recession and the scorn of the world are not only the responsibility of wimps. Obama’s extraordinarily liberal agenda—immigration reform, now gun control, implementing universal healthcare, advancing gay rights, and possibly, securing election finance reform—needs the climate of generosity and confidence that economic prosperity inspires.

Going over the “Fiscal Cliff” could destroy John Boehner. However, returning to mean times could save the Tea Party in 2014. 

Supreme Court’s mandate: protect individuals, not other politicians

Except for burying the lead on page 2 of his statement, last week’s decision by Chief Justice John Roberts and four other judges on the Supreme Court to not stop Obamacare was impeccable television news. It happened in one place, on time, and mid-day. It looked like one sane man was making history.

The big story is more complex and scarier.

Half of America’s elected leadership—congressional and state Republicans—asked five lawyers to legislate their political vision for the future of a universal social service, over one sixth of the US economy. Rather than try to sweep the fall elections with the proposition that health reform should be turned over to the states holus bolus, they asked five judges to enshrine that proposition in the US constitution.

Reformers are wondering whether five judges are really enough, whether a super-majority would be best, whether judges should be retired well before they're too old to absorb new, complex ideas. Conspiracy theorists and pop psychologists wonder about Roberts' motives. Was he actually worried about what others might think?

 

Jamal Greene in the New York Times makes a compelling case for term limits along Canada’s lines, and David Dow in the Daily Beast outlines a number or legislative measures to explicitly limit the Supreme Court’s powers.

Click on: www.nytimes.com/roomfordebate/2012/07/08/another-stab-at-the-us-constitution/revisiting-the-constitution-we-need-term-limits-for-federal-judges

Click on: www.thedailybeast.com/articles/2012/07/08/after-health-care-ruling-time-to-reconsider-supreme-court-s-power.html

These reforms, however, will likely have to wait until after the bigger problem is addressed. It’s become reflexive for American conservatives to turn to the US constitution, as written in 1787, to settle arguments with their political opponents.

The point of contention before the Supreme Court was not about infringing the freedoms of individuals. The 26 state Republican supplicants were speaking for the prerogatives of state governments. They were saying that on the issue of health insurance and free riders, reformers must not go to Washington for a solution.

They can debate their ideas in Mississippi and Massachusetts but not, all at once, across America in a nation-wide election.

There is great merit to the argument that the states are underperforming as instruments of social reform. However, using a constitutional court to prevent the federal government from solving social problems the states can’t or won’t fix is a radical challenge to America’s popular democracy.

The American and Canadian federations have bills of rights to protect individuals from ruthless and careless majorities. We don’t ask individuals to wait for popular remorse to correct popular government excesses. That’s the best reason for having accessible independent courts.

However, American conservatives as well as liberals should re-acquaint themselves with an old fashion conviction about their old federal democracy: the electorate and its representatives will, in good time, get around to correcting excessive federal interference—and passivity—in the federal government’s dealings with other democratically elected governments.

There you go again, Paul Krugman

It’s self-defeating to be bitter before the fight is lost. Paul Krugman compounds that danger by being prolific.

Along with Robin Wells, Krugman wrote in The New York Review of Books a sympathetic review of three bitter books about Barack Obama, Wall Street, and the Republican Party.

Here’s Krugman's retrospective on how Obama made decisions during the crisis-filled early days of his presidency:

“True, not all members of the team got it wrong. We now know in particular that Christina Romer, the Berkeley professor appointed to head Obama’s Council of Economic Advisers, called from the beginning for a much larger economic stimulus than the administration ever proposed. But Romer was sidelined and it was Larry Summers—a person not shy about displaying his brilliance—who had Obama’s ear. In principle, that needn’t have made much difference; when wearing his academic hat, Summers espouses Keynesian economic views not noticeably different from Romer’s (or ours). But Summers, rather than passing on straight economic analysis, tried to show his political astuteness about what Congress would accept, and as a result underplayed the case for a bigger stimulus.”

Click on: www.nybooks.com/articles/archives/2012/jul/12/getting-away-it/?pagination=false

Krugman doesn’t point out that not one advisor or school of economic opinion knew, in fact, how deep the recession was until well after the recovery package was passed into law. Nor does he say that Romer’s bigger package could have been enacted.

Instead, Krugman endorses the pop-psychological notion that Obama’s favored "all-star team” was assembled to give him the intellectual affirmation that he “craved.”

There’s something deeply unfair about all this.

Americans also “craved” an all-star team.

Obama’s task was to save a sinking economy. He wasn’t elected to fix morale in the Executive Branch or the White House—or spend his time finding out who’d screwed up.

According to Krugman and the books he reviewed, America was in a terrible mess because of stupid populist Republican decisions over the previous eight years.

So, what does the new president do? What was his fatal mistake? He listened to Larry Summers—a man who displayed his brilliance. In a crisis that absolutely required a divided Congress to quickly agree to explode the size of the federal deficit, Obama was swayed by political astuteness.

Indeed.

Too bad Obama didn’t know that the recession was three times deeper than the statisticians thought. Too bad he didn’t have the freedom to decide when to fight it. However, in an economic emergency or in a war, the nicest leaders must pick the option that’s doable and go with the most brilliant, plausible advise available.

Let the losers write the quickies.

Move on liberals: the number 99 died in Wisconsin

The Wisconsin recall election of Governor Scott Walker was concocted by liberal Democrats and was to be a liberal’s dream come true.

There wasn’t a charismatic politician on the right, a personal or religious scandal to cloud the issue. Months of debate were conducted about union rights and the management of the state’s financial affairs. Each side had plenty enough money, campaign professionals, and neighborhood volunteers to get their message out, and repeat their message over and over.

Nothing is airtight in politics. Some voters didn’t think a recall election was justified in the first place. However, a strong majority voted to keep Walker as governor and, according to CNN exit polls, a good half of those voting openly supported his legislation to restrain the public payroll and the power of public sector unions.

Walker didn’t just complain about greedy unions. He severely reduced their rights and their financial capacity to advance their interests in the future. Liberals asked voters to side with the unions—to stand as 99 per centers. They declined.

Walker, of course, didn’t settle the issue for all time, for Wisconsin, or for America. However, his re-election does demonstrate that middle-class America is not of one mind on bread-and-butter issues and will not automatically unite with liberals, even when conservatives aren’t messing up their heads with religious and patriotic gimmicks.

Liberal Dean Bakolpoulos in Salon isn’t yet ready to learn anything from what happened:

“If Barack Obama plans to win in November, he needs to unite two factions of the Rust Belt population: The middle-class of public workers and union members and teachers, and the other middle-class, which ranges from self-made entrepreneurs to struggling service industry workers. How does he do it? With an honest message that points to the real villain: An increasingly greedy corporate culture that stops at nothing in its quest to consolidate power and wealth.

“There is, in fact, a 99 percent in this country. But right now, a big chunk of it votes in the interest of the 1 percent.”

Click on: www.salon.com/2012/06/06/whats_the_matter_with_wisconsin/singleton/

Barack Obama has had the good sense to reject this advice. He hasn’t singled out the 1 percent as villains—or their wealth as the salvation of all America’s problems.

To redress the federal government’s structural deficit, he has frozen federal salaries, endorsed in principle the Bowles-Simpson recommendations, and he has offered a “grand bargain” that would accept as much as three times more in federal spending cuts as in new taxes.

Obama and fellow Democrat pragmatists in state governments today didn’t create all the unfunded liabilities of federal and state governments. They needn’t defend past excesses. Liberals in office, like popes, make mistakes and needn’t treat what they have inherited as infallible.

America without strong unions would become an even tougher place to live. However, the middle class will not buy the argument that the ambitions of public unions and their ambitions are always the same.

If pro-union policies by public employers were invariably in the best interests of the middle class and the less so, states like Illinois, for instance, wouldn’t have an unfunded liability of $83-billion in public employee pensions.

Click on: www.theglobeandmail.com/commentary/wisconsin-recall-vote-shows-its-about-math-not-politics/article4237376/

Keynes wasn’t a Keynesian every time he saw a tough problem. He would have collected necessary taxes to pay for all operating expenses, including salaries and benefits—and accounted for how future liabilities would be met.

When the interests of the middle class and positive government are aligned, they will vote for “tax and spend” liberals. When liberals believe in what they’re doing in government, they should ask for the money.

George Will on the Glory of Messy Change

Bow ties are worn by men who take extra care to avoid common sentiment, and George Will has been wearing one as long as he’s been writing a national column. He’s tireless in exposing soft thinking and back-sliding in others:

“Creative destruction continues in the digital age. After 244 years - it began publication five years before the 1773 Boston Tea Party - the Encyclopedia Britannica will henceforth be available only in digital form as it tries to catch up to reference websites such as Google and Wikipedia. Another digital casualty forgot it was selling the preservation of memories, a.k.a. "Kodak moments," not film.

“America now is divided between those who find this social churning unnerving and those who find it exhilarating. What Virginia Postrel postulated in 1998 in "The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise and Progress" - the best book for rescuing the country from a ruinous itch for tidiness - is even more true now. Today's primary political and cultural conflict is, Postrel says, between people, mislabeled "progressives," who crave social stasis, and those, paradoxically called conservatives, who welcome the perpetual churning of society by dynamism.

“Stasis’s see Borders succumb to e-books (and Amazon) and lament the passing of familiar things. Dynamists say: Relax, reading is thriving. In 2001, the iPod appeared, and soon stores such as Tower Records disappeared. Who misses them?”

Click on: www.jsonline.com/news/opinion/the-glory-of-messy-chaos-d24lm1g-143698876.html

Some of this is merely too simplistic and some is bad because it is simply partisan nonsense.

First, individuals everywhere are of two minds about change and their own futures; they’re not divided on these questions according to whether they’re on one side of town or the other, or live in one class or race or another, read romance novels or went to Rocky films—or whether they live in public housing or Tribeca, Manhattan.

Does Will honestly think that his faithful reader living in his gated community in Naples, Florida, is “exhilarated” by perpetual change? Does he really think the phrases “globalization and “free trade” are doing poorly in Newark, New Jersey, because young men there have a “ruinous itch for tidiness"?

Change, as Robert Kennedy warned, always has enemies. Unlike Will, however, he was not referring merely to sentiment and nostalgia.

The change in North America for 200 years has been relatively unrelenting, not because North Americans lost the reflex to look back, romanticize, and fight for what they have, but because change in North America kept producing great material dividends, across the board.

The real challenge serious conservatives are engaging with progressives today is how to ensure that capitalism, in a global context, can again produce a dividend for society at large. If 97% of the dividend is going to go to the top 1% on a regular basis, then “creative destruction” will become an untenable sick aesthetic.

The idealist’s problem with divided government

Hendrik Hertzberg’s review of Amanda Foreman’s “A World on Fire: Britain’s Crucial Role in the American Civil War” includes a striking quotation on the problem the best of presidents have in meeting the expectations of America’s best friends—whether in 1863 or today.

England’s most ardent liberals never warmed to Lincoln; he simply wasn’t sufficiently wholehearted, especially on slavery. The Emancipation Proclamation, Foreman writes,

“… was widely denounced as a cynical and desperate ploy . . . even pro-Northern supporters could not understand why Lincoln had allowed the border states to keep their slaves, unless the emancipation order was directed against the South rather than slavery itself. ‘Our people are very imperfectly acquainted with the powers of your Federal Government’ explained the antislavery crusader George Thompson to his American counterpart, William Lloyd Garrison. ‘They know little or nothing of your constitution—its compromises, guarantees, limitations, obligations, etc. They are consequently unable to appreciate the difficulties of your president.”

Click on: www.newyorker.com/arts/critics/books/2011/08/01/110801crbo_books_hertzberg

Imperfectly acquainted? Indeed.

For a long time, it was understandable that eminent British and European politicians wouldn’t bother to understand America’s convoluted system of government. Its liberal principles were magnificent on paper, but probably wouldn’t work for long. A great power, Old World Machiavellians believed, needed to have a powerful central executive that was clearly superior to individual states and was enjoying extensive freedom from—and dominant influence in—popular legislative bodies.

Lincoln saved the American union, but neither he nor his successors have been able to make it easier to exercise leadership through the Office of the President. There’s a strange irony here: the head of state of the most powerful nation on earth still looks weaker than the leaders of its democratic partners.

So, why, after being able to make the US constitution work for so long, is compromise by the White House still seen as an option, a reflection of a president’s temperament, and not something embedded in his job description? Why is it not an encumbrance Barack Obama can set aside for the last year of his first term—letting him get things done like a CEO?

America’s constitution is not power-friendly. It is liberal, however, in that it makes it no easier to be a reformer than a reactionary.

When people are passionate, America’s constitution is not entirely people-friendly either.

That is a price most people, and especially progressives, should be happy to pay. Forcing presidents to be persuasive and to reason with others who are equally secure in their constitutional roles helps protect America as a relatively safe place to be an adult, to be unpopular, and to be out of fashion.

Today, European and American romantics can’t be excused for their ignorance—despite its checks and balances, America’s federal government has been able to keep up with the times and serve the noisiest grass-roots democracy in the world. The pace of strategic decision-making doesn’t fit the contemporary news cycle or the attention span of the more fevered partisans. However, if we hold our fire and observe what’s happening over a reasonable span of time, we will see that Presidents can still lead, within the rules.

Inequality’s challenge to the capitalist consensus

There’s no question that the “Washington Consensus”—with its 20 years of globalization, private innovation and state restraint—survived the great recession. Mainstream politics in the west is dominated by arguments about how much faith to put in markets and how to make big government affordable.  The breadth of support for capitalist global economic development is unprecedented and may have contributed significantly to the swiftness of the global recovery.

Nevertheless, that broad support will only be sustained if the benefits are broadly shared.

We live in mass democracies; the unenlightened, the less adventurous, and those less able to enjoy vicariously the good fortune and exceptional talent of the few—have the vote. We know that anxiety about food and shelter and the future trump flag waving and slick advertising. Consequently, the cascading evidence that globalism, on its own, isn’t sharing the benefits as broadly as the nation-based industrial capitalism of the mid 20th century must soon receive more public attention by mainstream conservatives as well as liberals.

In America, the fact that nearly 70% of the people don’t believe their country is heading in the right direction is narrowly and naively seen as a good omen by Republican tacticians. However, this lack of confidence in the workings of the most powerful market economy in the world is based in real disappointment not just in exploitable shortcomings by and misconceptions about big government.

Recently, OECD reported that over the last two decades the gap in incomes between the most affluent and the rest has widened across the developed world. In the US, this trend has included chronic unemployment and wage stagnation along with gaudy displays of wealth in a handful of coastal cities. Most important, the evidence is accumulating that this isn’t simply the result of one wrong-headed tax cutting Republican president. Good old free enterprise—at its most Harvard MBA best—isn’t sharing the riches the way it used to.

Nobel Laureate Michael Spence and Sandile Hlatshwayo of New York University carefully document how America’s most dynamic global corporations are successfully restoring America’s global economic credibility by creating high paying jobs for the most highly skilled while offing little domestic employment for others. In their article, “Jobs and Structure in the Global Economy” they conclude:

“If a relatively open global system is to survive in a world where nation states are the principle decision makers, it will have to be managed and guided not just to achieve efficiency and stability (important as these goals are), but also to ensure that its benefits are distributed equitably between and within countries.”

Click on: http://www.project-syndicate.org/commentary/spence21/English

It may not be politically possible to use significantly more government intervention to directly encourage business and “strategic” sectors, in particular, to hire more people and invest differently. It might be wiser to take a more hands off approach and explicitly share more broadly the benefits of free markets and global trade through tax reform and universal programs that most benefit middle and low income Americans.

Liberals and conservatives pragmatists can argue about means. Market conservatives, however, can’t for long maintain there is no problem. Conservatism’s most banal virtue ought to discipline conservatives first: when the glass is half empty, you can only insist that it’s half full—and accept that much is missing.

Alfred E Kahn: a visionary market advocate and not a conservative

Last December, at his home in Ithaca, New York, Alfred E Kahn died at 93. He was one of the most important economic policy reformers since the New Deal democrats went to Washington in the 1930s. Since his passing, his accomplishments have been widely noted, especially his leadership in deregulating American Airlines. The New York Times published one such positive summary.

“Mr. Kahn, a leading regulatory scholar who wielded his influence in both government and academia, helped spur a broad movement beginning in the mid-1970s toward freer markets in rail and automotive transportation, telecommunications, utilities and the securities markets. Before deregulation, the airlines were tightly controlled by the Civil Aeronautics Board, which approved routes and set fares that guaranteed airlines a 12 percent return on flights that were 55 percent full.

The changes Mr. Kahn orchestrated resulted in increased competition, lower fares and the rise of low-cost carriers like JetBlue and Southwest. But they also created severe financial problems for the industry, leading to bankruptcies and mergers.

‘I have to concede that the competition that deregulation brought certainly was terribly, terribly hard on the airlines and their unions, who had heretofore enjoyed the benefits of protection from competition under regulation,’ Mr. Kahn said decades later.”

Click on: http://www.nytimes.com/2010/12/29/business/29kahn.html?_r=1&ref=alfredekahn

His public career and public accomplishments cast an ironic light on contemporary American politics and the divisive clichés of our time.

The so-called “Reagan revolution,” the “neo-con” think tanks, and the “Washington consensus” that championed market-based economic reforms over most of the last three decades actually followed Alfred Kahn’s leadership. They didn’t add much intellectually; they tried to flesh out his vision. And, all the while, he was a liberal.

Alfred Kahn and President Carter weren’t bullied into radical regulatory reform by Republican intellectuals or vested interests. They didn’t have to “triangulate” with backlash conservatives.

Khan’s critique of the aging New Deal vision of government was more positive than President Clinton’s later concession that, yes, government can get too big. If Kahn was in Washington today, he would likely be called an economist with bipartisan tendencies. However, he was far more ambitious than that. He was motivated by a set of liberal market values that don’t merely stand between the extremes of left and right.

The liberal vision that once largely thrived at the center of US politics —that wherever possible governments should protect and nurture competition and rely on consumer choice to drive efficiency and innovation—was shouldered out by the catastrophes of the 1930s and the Cold War. However, by the 1970s, the federal government’s take-charge response to economic developments had become too reflexive and too often a generator of privilege rather than national progress. A liberal response to the unnecessary excesses of the interventionist state (that liberals had built) was awkward but inevitable.

The restoration of traditional liberalism (or what’s now called neo-liberalism) by reform Democrats, of course, was quickly interrupted by the election of Ronald Reagan in 1980. Nevertheless, Reagan didn’t change course. He made it look easier.

The free market bias of Alfred Kahn and the neo-liberals is intact; its agenda in energy, transportation, agriculture, trade, and education is unfinished and still controversial.

Those who insist on seeing history as one story after another like to identify “eras” with one dominant idea. From 1980 to the financial collapse of 2008, the free market ideologues were said to be in charge. And now they’re out. Well, nothing original started or was settled with Reagan—and it’s very unlikely that Alfred Kahn would say that for the last three decades markets consistently beat entrenched interests and those who still think only government can be trusted to deliver.

Instead of demonizing deregulation as a right-wing conspiracy, Democrats and Liberals elsewhere would be more useful and credible if they took up its essential liberal rationale.