Review: Jacob Hacker and Paul Pierson – American Amnesia

by Henry on June 20, 2016

Jacob Hacker and Paul Pierson’s new book, American Amnesia: How the War on Government Led Us to Forget What Made America Prosper does four things. First, it makes the case for the mixed economy – the effort to make the market and state work together. Second, it makes the case that mixed government existed. The US used not to be as divided as it is now, and business, rather than being committed to a virulently anti-state agenda was often relatively pragmatic. Third, it tries to explain how this went South – how mixed government, and indeed government, became a dirty word. Finally, it asks how mixed government can be resuscitated again.

Hacker and Pierson’s political argument, as I read it, has a lot in common with that of old-style liberals like J.K Galbraith and Charles Lindblom. Hacker and Pierson don’t want an overweeningly powerful state – instead, they want a state and market that work together. They borrow Lindblom’s analogy of markets working like the fingers of a hand to provide dexterity, while the state works like a thumb, to provide authority and to help grasp things that need to be grasped. This does not imply that the state and markets should be guided by a single will so much as that they work, when they work well, in complementary ways. Indeed, like both libertarians and many leftists they are highly suspicious of what might happen when the state and private industry build relations that are too congenial. As they describe it (p.5), “Democracy and the market – thumbs and fingers – have to work together, but they also need to be partly independent of each other, or the thumb will seek to provide effective counterpressure to the fingers.”

In a mixed economy, government provides services and goods that will be underprovided by the private sector, or perhaps not provided at all. It also regulates market actors, obliging them to behave more honestly towards the consumers of their products. As the economy becomes increasingly complex, it becomes increasingly easy for private sector interests to take advantage of ordinary people. Regulators can help restrain business through regulation and antitrust (Hacker and Pierson acknowledge Woodrow Wilson’s racism but have kind words for his efforts to build the institutions that would regulate market competition). Unless business is restrained by the state, it is liable to behave badly.

Hacker and Pierson argue that a mixed economy – in which the state and markets worked together, but were also in a healthy tension with each other, existed for much of the twentieth century. A strong government helped to underpin prosperity – and did so through “extensive reliance on [its] effective political authority” (p. 97). During most of this period, they argue that the right was less crazy than it is now, confining lunatics to a fringe, rather than electing them as leaders. People like Vannevar Bush pushed for heavy government investment in research. After initial hostility, business reconciled itself to the New Deal, recognizing that the state had a useful role to play. It saw that government provided public goods, and gave some firms a competitive edge. The complaisance of business organizations was in part a recognition of the reality that business had no choice but to compromise with the government and with strong unions so that “[b]usiness leaders found themselves compelled to negotiate and seek mutually acceptable solutions within a system where other voices would be heard.” (p.146)

This world of moderate business and countervailing power is not the world of today. Hacker and Pierson discuss how right moderates have been drowned out, both in business and the Republican party. The crucial change, in their view, was one in both ideas and incentives:

Ideas were crucial, especially in the initial right turn. The emergence of “stagflation” – the combination of inflation and stagnation – strengthened the hand of economic thinkers who argued that government couldn’t manage the economy effectively. Had there not been vigorous critics of the mixed economy at the ready, had they not wielded a coherent and powerful set of arguments, these economic troubles surely would not have precipitated such a fundamental reversal.

Yet the rapid and durable repudiation of the mixed economy was hardly a “gradual encroachment of ideas.” Instead, new understandings swept the field because they intersected with and guided powerful economic interests that were becoming more and more influential within American politics. Facing meager profits and depressed stock prices, business leaders mobilized to lobby Washington as never before. Fatefully, they were also increasingly inclined to accept the diagnosis offered by the new market fundamentalists: The source of their woes was not foreign competition or deindustrialization or hostile financial players; it was government. The changing economy didn’t just change the conversation, in other words. It changed who had power and how those with power thought about their priorities. (pp.171-172)

Pete Peterson – kicked out of MIT for plagiarizing a paper by Roy Cohn, but vastly enriched by the sale of Lehman and creation of Blackstone – spent “a fortune to influence public debate.” His former partner in Blackstone, Stephen Schwarzman, complained that Obama’s relatively anodyne proposals were warfare against the rich. These figures represent a new economic elite, which is not monolithic, but is very different from the old one, less tied to locality, more tied to Wall Street and Silicon Valley, and very often skeptical of the mixed economy on principle. Some are hard Randians – convinced that they were members of a tiny minority of creators faced with a majority of moochers and government determined to steal their money. Others are soft Randians, disdainful of government and willing (as in Peterson’s case) to spend large amounts of money to push for limits in government spending and benefits. Both have found many people willing to help them make their case; as per Thomas Piketty’s sardonic quip:

We know something about billionaire consumption, but it is hard to measure some of it. Some billionaires are consuming politicians, others consume reporters, and some consume academics.

Business organizations such as the US Chamber of Commerce have become effective outposts of the Republican party. That party has itself become committed to a shifting combination of (a) rolling back the state, and (b) making it subordinate to commercial interests (leading sometimes to internal spats, as over the Export/Import Bank, when the two priorities come into conflict).

Business and the Republican party have both been radically transformed. However, the Republican Party has paid only a limited price for its extremism, because it has advantages in turnout and because voters sometimes don’t understand what is going on, and because it enjoys the support of funders and donors. The corruption of politics has gone together with a corruption of market institutions, as businesses extract increasingly high profits, either because they have heavy political connections (as when members of Congress like Billy Tauzin become lobbyists) or because they know that they have nothing to fear from toothless regulators.

Hacker and Pierson want to see the return of the mixed economy. They are not leftist firebrands – their proposed agenda has a lot more in common with the ideas of Elizabeth Warren and the pro-free market populism of Lynn and Longman’s article in this month’s Washington Monthly than with the modal article in Jacobin. Specifically, they would like to see an America in which business moderation found its voice again, rather than one in which business as such was dramatically weakened. Even so, their proposals for how to bring the mixed economy back may seem utopian given current politics. They are noticeably weaker on detail in their prescriptions for the future than their description of what has gone wrong. They present an agenda – but also many reasons to expect implicitly that this agenda will be hard to realize. As they explicitly note, there are few signs in the Republican party that it is going to reconsider its anti-government position. Nor are Democrats nearly as much an opposing force as they ought to be.

Of course, politics has gotten more complicated in the last few months. It would be interesting to see how their argument might have changed after Trump (their book was written before it became clear that Trump was going to be the nominee). It’s plausible right now that the Republican party will pay a price for its extremism in the upcoming Presidential election, and perhaps in the accompanying Congressional elections too.

This might suggest more hope for change than Hacker and Pierson’s book suggests, although any optimism ought to be tempered. Even if Trump suffers a crushing defeat in November (which is by no means a given), the Republican party may not interpret this as a repudiation as such of their position. They may, indeed, be right not to – the Republican party could still end up doing quite well in the 2018 mid-terms, and what happens in 2020 is very hard to predict. What can be said is that any revolt for common sense Republicanism led by Bill Kristol and friends is not going to produce anything recognizable as actual common sense.

The book’s more interesting questions for me involve a longer time horizon. The book’s underlying claim – that one needs to understand the confluence of ideas and economic interests to get what happened in American political economy – marks a potentially important intellectual shift in broader debates about political change. Hacker and Pierson are both prominent historical institutionalists – and as Mark Blyth, Oddny Helgasdottir and William Kring vigorously complained in a new piece, recent work in historical institutionalism has tended to ignore how ideas can shape political trajectories. Figuring out how ideas and interests work together isn’t just important for academic debate – it is also important for thinking about long term political strategy. Indeed, academic debate and practical politics may intersect. As Hacker and Pierson (and, for that matter, Blyth’s first book) suggest, economists like Hayek and Friedman (and, in a quite different way, Rand) provided much of the cement that held the new coalition together. Any replacement for that coalition will need its own ideas.

Some of those ideas are provided by the book. It hardly needs mentioning that Hacker and Pierson are not looking to revive the mixed economy as an abstract intellectual exercise. They want to reinvigorate the poltiical fortunes of the idea of the mixed economy, and provide a politically usable history who might want to push it further. There may be a political audience for such a history among people like Warren, who used to be a Republican, and might still be had the party not changed so dramatically.

Yet I think that there are also some holes that need to be filled (unsurprisingly, my sense of what the big holes are is heavily biased by my own intellectual priorities). Here’s one. Hacker and Pierson identify how the economy has become vastly more complex, and how this makes it easier for businesses and others to take advantages of gaps of opportunity and information to exploit ordinary people. They make a compelling case that regulation could restrain this if it were appropriately intelligent. Finally, they sketch out a convincing negative story of how the Republican party and business have systematically sought to cripple the intelligence of government, depriving it of staffing and information.

What they do not do as I read them is to provide a strong positive case for how government will be able to come up with intelligent regulations if it only had the resources it was deprived of. Building such a case seems to me to be crucial. The attractions of markets are not purely ideological. Hayek’s defense of the market as a system of distributed informal intelligence is far from being entirely wrong; many of his arguments are indeed compelling and powerful. A defense of the government as same – and much better, arguments about the conditions under which the government can do better than market mechanisms – seems to me to be both important, and missing from Hacker and Pierson’s argument as it stands. Some of these arguments could be taken from Lindblom (whose work on how bureaucracy works is criminally neglected in modern political debate). Other arguments could and should build on the great changes, both in complexity of circumstance and availability of tools to deal with complexity, that have transpired since Lindblom wrote in the 1960s and 1970s.

Put a little differently, Hacker and Pierson provide us with a book showing that markets and the state can work together, building on historical example. This is both a rallying call and a proof of possibility. They also argue convincingly that we need a strong state more than ever in a world where the operations of markets have become vastly more complex. Yet putting these two together – to figure out how the state can work well in an economy that is very different from, and much more complicated than, the economy of the 1950s and 1960s, is both very hard and utterly necessary if their project is to succeed.

{ 86 comments }

1

JakeB 06.20.16 at 7:36 pm

You say: “They borrow Lindblom’s analogy of markets working like the fingers of a hand to provide dexterity, while the state works like a thump, to provide authority and to help grasp things that need to be grasped.”

Delightful, but perhaps you want to voice that consonant.

2

Henry 06.20.16 at 7:48 pm

I almost didn’t want to correct that because it was so lovely.

3

cassander 06.20.16 at 7:56 pm

>Hacker and Pierson argue that a mixed economy – in which the state and markets worked together, but were also in a healthy tension with each other, existed for much of the twentieth century

Once again, a book founded on the notion that the american state is, in some meaningful way, getting smaller. It isn’t. We still have a heavily mixed economy, and one where the role of the state is growing, not shrinking. Today it taxes as much, spends more, and regulates more than ever in its history by almost any empirical metric you choose.

>Business and the Republican party have both been radically transformed. However, the Republican Party has paid only a limited price for its extremism,

What extremism? Other than gun control, there’s not a single position on which the republican party today is to the right of where it was, say, 20 years ago.

>They are not leftist firebrands – their proposed agenda has a lot more in common with the ideas of Elizabeth Warren

Perhaps this lack of perspective explains the earlier problem. If you think that warren isn’t on the far left, of american politics, you need to get out more.

4

Ben 06.20.16 at 8:01 pm

Do H and P provide what you’ve previously termed on CT a “theory of politics” for how political economic dynamics will affect their proposed changes?

In other words: why won’t their changes fail due to the mechanisms they describe? (You get into this a little with the “whither shall spring intelligent regulations?” bit at the end, any more thoughts on other aspects of their argument?)

5

RNB 06.20.16 at 8:05 pm

Look forward to reading this, but very quickly: mixed economy suggests to me Keynesian regulation of the business cycle. The question is whether a. fiscal and monetary policy can theoretically stabilize the business cycle and b. whether there are political obstacles to the use of Keynesian policy (interestingly both Kalecki and Krugman from very different theoretical positions think there may be political difficulties in adopting Keynesian policies).

It seems to me from just a quick glance here that the stabilization policy part of the mixed economy may not get the central attention that it probably should have.

6

Layman 06.20.16 at 8:17 pm

cassander: “Other than gun control, there’s not a single position on which the republican party today is to the right of where it was, say, 20 years ago.”

Ladies and gentlemen, I give you the Voting Rights Act of 1965, renewed in 2006 by a vote in the House of 390-33. Renewable in the House today?

7

bob mcmanus 06.20.16 at 8:40 pm

I’m sorry, I can’t get interested in a book that sees neoliberalism as an exceptional American problem (Republicans!) looking for an exceptional American solution, when the movement is so very clearly global in all its aspects. That kind of American exceptionalism is inextricably linked to American imperialism.

Labour demonstrations are still going in France, and getting more intense.

8

cassander 06.20.16 at 8:47 pm

@Layman

>Ladies and gentlemen, I give you the Voting Rights Act of 1965, renewed in 2006 by a vote in the House of 390-33. Renewable in the House today?

I have zero doubt that it will be, though let’s not pretend that the VRA is the only change to voting laws made in recent history.

@Bob mcmanus

>I’m sorry, I can’t get interested in a book that sees neoliberalism as an exceptional American problem (Republicans!) looking for an exceptional American solution, when the movement is so very clearly global in all its aspects.

An excellent point, especially considering that if anything, the impact of neo-liberalism was much bigger in other countries than in the US.

9

oldster 06.20.16 at 8:49 pm

I’m guessing this is another typo here?

“…or the thumb will seek to provide effective counterpressure to the fingers.”

I’m thinking “seek” should be “cease”?

10

Collin Street 06.20.16 at 8:53 pm

Ladies and gentlemen, I give you the Voting Rights Act of 1965, renewed in 2006 by a vote in the House of 390-33. Renewable in the House today?

Most political problems are at heart mental-health problems, and I am not being hyperbolic.

11

Layman 06.20.16 at 9:37 pm

cassander: “I have zero doubt that it will be…”

Gosh, that’s an odd way to say “you’re right, voting rights in general, and the Voting Rights Act in particular, are an issue where the Republican Party is to the right of where it was 30 years ago. I wonder if there could be more that I’ve missed?”

12

LFC 06.20.16 at 9:40 pm

from the OP, stating one of H&P’s contentions:
After initial hostility, business reconciled itself to the New Deal, recognizing that the state had a useful role to play.

Only some sectors of business reconciled themselves to the New Deal; others (esp. among some of the more closely-held firms) never did. That’s made clear by, e.g., the opening chapters of Perlstein’s Before the Storm.

Also, stagflation and declining union strength were (as mcmanus’s comment implies) part of the breakdown of ‘the Keynesian accommodation’ that was not confined to the U.S. That said, I see nothing esp. wrong w H&P writing about the U.S. specifically, since every country has its own peculiar path and history even w/in trends that are more global. (Moreover, since H&P collaborated on at least one book about the U.S. before, which presumably sold relatively well and got attention, they had every reason, intellectual and doubtless practical, to collaborate on another.)

13

cassander 06.20.16 at 10:10 pm

>Gosh, that’s an odd way to say “you’re right, voting rights in general, and the Voting Rights Act in particular, are an issue where the Republican Party is to the right of where it was 30 years ago. I wonder if there could be more that I’ve missed?”

In 2006, the republicans grumbled about, then re-authorized the VRA. They’ll do the same thing this time around. I fail to see any change in their position. Please come back when you have an actual point to make, not a hypothetical vision of republican nefariousness.

14

MPAVictoria 06.20.16 at 11:31 pm

Cassander is once again wrong. There are many, many examples of the extremism of the current Republican Party.

1. The Texas Republican Party Platform
https://www.texastribune.org/2016/05/15/analysis-texas-republicans-their-own-words/

2. Refusal to provide funding to combat a new virus outbreak in the United States
http://www.msnbc.com/rachel-maddow-show/congressional-republicans-reject-robust-response-zika-threat

3. Speaker Ryan’s Propsed plan to “fight” poverty is more extreme than anything Reagan ever proposed
http://www.vox.com/2016/6/9/11885526/paul-ryan-poverty-plan

4. The current republican nominee for president’s Tax plan is extreme by any measure:
http://robertreich.org/post/141444893405

5. Meanwhile Senate Republicans are breaking all records for obstruction in the appointment of judges
http://www.motherjones.com/politics/2016/05/senate-republicans-barack-obama-judicial-nominees-courts

Additionally gov’t spending in the US is down:
http://www.forbes.com/sites/rickungar/2012/05/24/who-is-the-smallest-government-spender-since-eisenhower-would-you-believe-its-barack-obama/#e8072f957eca

Federal Governemnt employment is down:
https://newrepublic.com/article/118954/public-sector-payrolls-under-obama-much-lower-other-presidents

And Taxes as a percent of GDP are lower than they have been at many points in the 20th and 21st century :
https://commons.m.wikimedia.org/wiki/File:U.S._Federal_Tax_Receipts_as_a_Percentage_of_GDP_1945%E2%80%932015.jpg

So in short sit on it.

15

MPAVictoria 06.20.16 at 11:32 pm

Bah I have a response to Cassander in moderation with a ton of links. Can someone release it please

16

Anarcissie 06.21.16 at 12:25 am

Corporations are created and have the powers they have because they are created and empowered by governments. As such, they are parts of the state. The ruling class and the very rich have the powers and possessions and money they have because the government upholds and protects them and makes their high status possible. They, too, as social actors, are produced by and are part of the state. As inequality becomes deepens, these tasks of the government become more intense and more crucial: hence the vast expansion of surveillance, the militarization of the police, the furious production of funny money, the endless war and imperialism. There is no conflict between government and Capital: the former is the agent of the latter. I don’t understand why people pretend otherwise.

17

Layman 06.21.16 at 12:44 am

cassander: “I fail to see any change in their position.”

Except, well, the Republican majority of the USSC invalidated the preclearance provisions of the Act, and the Republican majorities in the House and the Senate refuse to allow a fix to be brought up for a vote. It’s perfectly clear that the Republican Party has moved right on the question of voting rights, whether you want to acknowledge it or not. The same is true on a host of other issues.

18

JeffreyG 06.21.16 at 12:56 am

Correct me if I am wrong, but don’t H & P argue elsewhere that the American gov system has structural reasons for policy inadequacy (veto points, empowering of narrow interests, degeneration of policy usefulness over time as underlying conditions shift, the gap btw written legislation and implementation). In this case, I don’t see how they imagine anything ‘getting better’ in a robust manner without fundamental changes in the U.S. system of government – including constitutional changes. Not only do these sorts of radical changes appear unlikely to move forward, they are barely* being discussed by actors with the institutional power to set us along a path where this change is possible.

*this characterization may even be too generous- in some quarters this discussion is not only absent but prima facie rejected as un-American (etc)

19

cassander 06.21.16 at 12:58 am

>Except, well, the Republican majority of the USSC invalidated the preclearance provisions of the Act,

One minor provision was struck down by the courts. Hurah! clearly all the achievements of the civil rights era have been swept away forever

>refuse to allow a fix to be brought up for a vote

That’s a funny way to pronounce “engaged in perfectly normal legislative activity”

>It’s perfectly clear that the Republican Party has moved right on the question of voting rights, whether you want to acknowledge it or not. The same is true on a host of other issues.

No, on both counts. If the VRA was the only bit of voting law in the country, and had remained absolutely unchanged since 1965, you might have a point. But it isn’t and you don’t. The VRA has been altered every time it’s come up for a vote. You can’t take one change in one provision of one law that happened to go the republican’s way and say “See! we’re back in 1955!” It’s naked cherry picking.

20

jake the antisoshul soshulist 06.21.16 at 12:58 am

For market fundamentalists, Keynes is the new Marx. I don’t see making any progress with the anti-government right. Disdain for state action is one of the real connections among the religious right and market fundamentalists. Bombing non- white non-Christians connects the neo-cons and the RR.
“War is good for business links the market fundamentalists.

21

JeffreyG 06.21.16 at 1:00 am

And this is not even to broach the issue raised by bob m above – that neoliberalism is a global phenomenon and that any political effort to avert from that path will likely require a form of transnational politics for which history is a poor guide, and which is at best in a nascent state.

22

tom 06.21.16 at 1:05 am

“Yet putting these two together – to figure out how the state can work well in an economy that is very different from, and much more complicated than, the economy of the 1950s and 1960s, is both very hard and utterly necessary if their project is to succeed.”

Maybe the scope of this statement is too large and, while having an overall idea in mind (the mixed economy or whatever), we should evaluate the statement policy by policy. In this regard, it seems to me how you may be making things more complicated than they are. For example, the U.S. is one of the few developed countries without a universal national health insurance program. The details of the ACA have been debated ad nauseam and sometimes the big picture is missed: national health insurance programs work in most european countries and Canada and they add a crucial and valuable safety net to its citizens. If America is so exceptional, then how come can it not do as well as other countries in this regard?

The proof of possibility is there, A.D. 2016, not 1950. What has been missing is the rallying call (which, as a side, is why I found Sanders’ candidacy so refreshing in this regard). Of course, no system is perfect and there are issues with the NHS etc. But the macro results are there (the U.S. is one of the most unhealthy among the developed countries) and the burden of the proof is on the randians.

23

Layman 06.21.16 at 1:29 am

cassander: “You can’t take one change in one provision of one law that happened to go the republican’s way…”

Um, well, you can’t simultaneously claim that the Republicans haven’t moved to the right on voting rights; and that while they used to vote for preclearance, now the elimination of preclearance is an instance where things have ‘gone their way’. If they voted for it before, but now they’re happy it’s gone and won’t vote to restore it, something in their view has changed.

Well, I guess you can claim that, but you’d be an ass.

24

Layman 06.21.16 at 1:59 am

Also, too, this:

“It’s naked cherry picking.”

But you asked for cherry-picking. You said “Other than gun control, there’s not a single position on which the republican party today is to the right of where it was, say, 20 years ago.” You claimed there was only 1 cherry (gun control). When someone says you’re wrong, and points to another cherry, you can hardly complain that they’re pointing at cherries.

25

Dan Nexon 06.21.16 at 2:05 am

Section 5 is not a ‘minor provision.’ It’s the only stopgap against the ability of states to infinitely tinker with their voter suppression efforts when one is invalidated. Remember how quickly states moved after Shelby County? Like lightning, I tells you.

But, let’s see… In addition to Civil Rights, the GOP has moved right on regulatory policy, environmental protection in general, international law, taxes…. I mean, seriously, this is some good play-dumb trolling. It isn’t like we don’t have a mountain of studies demonstrating this (https://scholar.google.com/scholar?q=+polarization+congress&btnG=&hl=en&as_sdt=0%2C21) or retired GOP members saying this (http://www.stanforddaily.com/2016/04/28/john-boehner-talks-election-time-in-office/) or long-term congress watchers (https://www.amazon.com/Even-Worse-Than-Looks-Constitutional/dp/0465031331).

But I suppose there’s some sort of ‘no true Scotsman fallacy’ working here.

26

JeffreyG 06.21.16 at 2:14 am

With all respect to the esteemed professors, the faith that Hacker and Pierson have for a fairly stock mix of old style liberalism is incompatible with their own assessment of the scope of the problem in their past work. Their faith in old school pragmatic liberalism in the current environment is – if I may be so frank – only explicable given their status as wealthy and successful members of the American elite class. To people with actual skin in the game, their tepid proposals and dismissal of the popular sense that the US government is actively hurting the working class as mere ‘disillusionment’ is a proverbial thumb in the eye.

Where they see a negative trend, the experience of many Americans closer approximates a state of economic freefall. (1)

Perhaps nothing better emblematizes the nature of the US state as a guarantor of elite and corporate interests against those of the working class than the TPP. Not only is this agreement being championed by the liberal wing of US politics, but that advocacy is being conducted under a great deal of secrecy – if not outright deception of the US voting public.

Today, the likely future leader of the liberal wing of American politics – who H & P strongly support (2) – is on record as calling the TPP “the gold standard” of trade agreements. Since then, she has walked her support back to…. well who knows? The average American voter has no way of knowing what HRC and the liberals generally actually believe on the subject of the TPP. HRC herself has edited out mentions of the TPP from recent copies of her book (3), transparency be damned. Meanwhile, the State Department has agreed to release HRC’s emails on the subject of the TPP ….. on November 31st! (4)

Not only is that date conveniently after the election, November 31st is a date that does not exist.

How are we supposed to have “a more balanced discussion of government’s role” (H&P: NYT, 2016) when the government spits in our face in such a manner? What faith can one put in the US government as an agent for the advancement of the working class when this is the normal manner of business?

So congrats to Hacker and Pierson for their book deal and the additional line on their CV. But honestly I cannot see how this work is doing much more than providing a gloss over the fact that the institutions of the US government have been not just complicit with, but actively engaged in the systematic looting of the American* people for the past generation.

(1) https://postimg.org/image/s9nf22c5z/
(2) http://www.nytimes.com/2016/03/17/opinion/campaign-stops/clintons-bold-vision-hidden-in-plain-sight.html
(3) http://cepr.net/blogs/the-americas-blog/hillary-clinton-s-memoir-deletions-in-detail
(4) http://freebeacon.com/issues/state-department-predicts-will-respond-foia-request-november-31-not-real-date/
* to say nothing of the broader global population

27

cassander 06.21.16 at 2:19 am

@Layman

>When someone says you’re wrong, and points to another cherry, you can hardly complain that they’re pointing at cherries.

The issue in question here would be voting rights as a whole, not one provision of one voting law. I have no doubt that, in some part of the country, you could find somewhere that has stricter gun laws than it did 20 years ago. That does not mean the country has not moved right on gun laws.

@Dan Nexon

>as moved right on regulatory policy, environmental protection in general, international law, taxes

No it has’t. there is more regulation than ever before. Bush multiple large increases in regulation. As for environmental regulation, can you name even a single environmental regulation the bush administration repealed or weakened? Not a new ruling they delayed or modified, mind, you, an existing rule that they repealed or weakened. Because I can think of precisely one, a reversal of a court ruling that returned to the status quo of 1997 for fracking. And for taxes? Taxes have remained almost the same since 1950. Neither side has managed to move the needle significantly there.

>It isn’t like we don’t have a mountain of studies demonstrating this

No, you don’t. Polarization of congress is not the same thing as right or left of the overton window. Take DW nominate, the popular “proof” that republicans are moving right. Imagine the only political issue in the US was the number of buttons on military uniforms. congress constantly debates and votes on the question. extreme Republicans want 8 buttons, moderates of both parties want 6, and extreme democrats want 4. Then there’s an election and all the 8 button republicans are defeated and a bunch of new 2 button super left democrats are elected. In such a circumstance, the both parties would, objectively, be moving to the left. DW nominate, however, would show both parties moving right, because the republicans were now entirely clustered around the new extreme position while the democrats were spread out over all positions. That the current extreme is the old moderate, the system simply cannot account for. The nominate people make a few efforts to correct for this, but they are grossly insufficient and do not take account of how legislatures actually work.

DW nominate, and other measures of polarization, are relative measures. They can only measure the differences between parties, not the absolute position of the parties over time.

>But I suppose there’s some sort of ‘no true Scotsman fallacy’ working here.

No, I just know what I’m talking about. That can be confusing to people like you who don’t.

28

JeffreyG 06.21.16 at 2:24 am

comment stuck in moderation.

Can we get someone from the CT collective to take a look at the auto-mod policy here? I don’t see why the inclusion of a couple of links should automatically lock a comment in moderation, especially given how moderation throws a wrench in the CT format.

29

JeffreyG 06.21.16 at 2:30 am

given that this is a thread about Hacker and Pierson, someone might want to say something about ‘drift’ in the side conversation on ‘has the gov moved to the right’

30

Layman 06.21.16 at 2:47 am

@ JeffreyG, are you 12?

31

JeffreyG 06.21.16 at 3:13 am

turning 13 in August!

32

Donald A. Coffin 06.21.16 at 3:22 am

I’ve had a tendency, in teaching intro econ and the role of government, to talk about most of the 20th century as shifts away from “caveat emptor” in product markets and the “employment-at-will” doctrine in labor markets. Unfortunately (n my opinion) we seem to be moving backwards on both hose fronts.

33

LFC 06.21.16 at 3:32 am

@JeffreyG
Can we get someone from the CT collective to take a look at the auto-mod policy here? I don’t see why the inclusion of a couple of links should automatically lock a comment in moderation, especially given how moderation throws a wrench in the CT format.

As front-page posters here have explained repeatedly, there is no ‘auto-mod’ policy. Comments go into mod basically at random. (Hasn’t happened to one of mine in quite a while, so on the basis of the randomness I’m probably due.) I’ve seen suggestions that a lot (not a couple) of links in one comment may increase the chances of its landing in moderation but I don’t know if that’s true. Even if it is true, it would presumably be a probabilistic thing, not automatic.

34

js. 06.21.16 at 3:50 am

More than three links in a comment will get the comment automatically modded. Pretty sure of this. I believe that’s a WordPress default, among other things.

35

LFC 06.21.16 at 4:13 am

@js.
I’ll take your word for it but was not aware CT is using a WordPress platform (if that’s the right word) for comments (?).

36

js. 06.21.16 at 4:36 am

LFC — I’m pretty certain CT is customized WordPress. Several “look/feel” elements of the blog are very WP-ish, e.g. the name/email/website boxes above the comment box. I want to say I *know* that it’s WordPress, but I can’t point to any definite evidence right now.

37

nick s 06.21.16 at 4:40 am

Okay, cassander is a tosser who’s hogging the thread, and his 20-year template (which lands in the middle of Newt Gingrich’s toxic swamp) is bullshit. Can we just blow raspberries at his ignorance and move on?

An interesting point of reference here might be Frank’s One Market Under God (2000) and its narrative of ‘market populism’: how markets became an object of popular attention and CEOs became celebrities instead of dull men in suits, in part because 24-hour news channels needed to fill space, and Americans are mostly not allowed to bet on sporting contests so instead treat the NASDAQ like the 3.15 at Kempton Park.

38

LFC 06.21.16 at 5:09 am

@js. — you know more about this than I do, so I’ll defer.

Re cassander: his appearance in this thread reminded me of an argument/dialog w him about US nuclear ‘modernization’ in an earlier thread. I let him have the last word on that occasion but going back to the thread just now and doing some quick research, I found out some useful/interesting (to me) things I hadn’t known about before (it’s OT here so won’t go into details). This is not at all to defend cassander’s style of arguing, just to say that remembering my annoyance w him on that occasion proved, in retrospect, useful. One might as well, where possible, try to salvage something from these often pointless and frustrating exchanges. Often it isn’t possible, of course.

39

ZM 06.21.16 at 7:09 am

I think to act on climate change and other environmental (and equity) problems there will need to have to be more connections with government and business and civil society. No sector can adequately respond to these problems alone. We have a good local example where Powercor one of Victoria’s man energy grid providers, has teamed up with a local township and the State government to work on moving to 100% renewables. This is a huge step forward since not that long ago Powercor was very much sceptical about Victoria moving to renewable energy.

The New Republic has an interesting article in May this year about Climate Mobilisation. I think the author found it difficult to see an exact analogue with WW2 mobilization due to the lack of an enemy , such as the Axis powers in WW2, but it gave a reasonable overview of the idea.

“Though climate mobilization has existed as a concept for as many as 50 years, it’s only now entering the mainstream. Green group The Climate Mobilization pushed the idea during a protest at the April 22 signing of the Paris Agreement.

On April 27, Senators Barbara Boxer and Richard Durbin introduced a bill that would allow the Treasury to sell $200 million each year in climate change bonds modeled after WWII War Bonds.

Bernie Sanders has mentioned mobilization on the campaign trail and in a debate. And Hillary Clinton’s campaign announced last week that if she’s elected, she plans to install a “Climate Map Room” in the White House inspired by the war map room used by Roosevelt during World War II.

….

To compare the fight against climate change to WWII may sound hyperbolic to some, but framing it in such stark, dramatic terms could help awaken the public to that “physical reality”—and appeal to Americans less inclined to worry about the environment.

“It’s not tree hugging—it’s muscular, it’s patriotic,” said Margaret Klein Salamon, director and co-founder of The Climate Mobilization. “We’re calling on America to lead the world and to be heroic and courageous like we once were.”

When Salamon began working on the group that would become the Climate Mobilization, she was earning her PhD in clinical psychology. “I view it as a psychological issue. What we need to do is achieve the mentality that the United States achieved the day after the Pearl Harbor attacks,” Salamon said. “Before that there had been just rampant denial and isolationism.” “

https://newrepublic.com/article/133423/respond-climate-change-like-wwii

40

Dan Nexon 06.21.16 at 7:39 am

“No, you don’t. Polarization of congress is not the same thing as right or left of the overton window. Take DW nominate, the popular “proof” that republicans are moving right. …”

That was a lot of space you used for stating the obvious… while ignoring most of the post. The reason we can interpret DW NOMINATE polarization as evidence of increased conservatism is precisely because of the content that GOP officials have polarized around. This involves rejections of policies (e.g., cap-and-trade) that were default GOP national proposals as recently as the 2008 election. See Orenstein, Bohner’s comments, or just talk to legislative aides whose careers bridged the 1980s, 1990s, and 2000s.

It’s interesting that you think delaying or blocking environmental regulations proves your point; but it’s on par with taking outcomes of political processes where the GOP loses as evidence of ideology. But, I suppose. one could note Bush era policies on the Endangered Species Act, Mining, the Clean Water Act, staff cuts that hit motoring and enforcement, and so on.

I don’t know what data you’re citing for total tax burden, but we have very good evidence for what how the modern GOP does tax policy when it isn’t constrained by veto points — say, in Oklahoma and Kanasa — and for what it does when it can build coalitions with conservative Democrats — the pro-cyclical Bush tax cuts; we know what Ryan’s budget looks like.

In the off chance that you’re not trolling, the point that you’re responding to involves cross-temporal comparison. What is your baseline for the modern GOP being less conservative? 1994? 1984? 1976? Is your position really that George Romney and Gerald Ford are to the right of contemporary national GOP figures (other than Trump, and I’ll agree that if European right-wing populism captures the GOP this whole discussion is moot). What policy goals do you see as key indicators for your assessment? Which do you discount. As I noted above, I’m perplexed that you *seem* to be focusing on outcomes as a metric of ideological position. But that’s like saying the GOP is moderate because they can’t overcome Democratic filibusters and veto threats.

41

Peter T 06.21.16 at 10:07 am

It’s worth thinking about when, why and how the public share of gdp increased. My impression is it happened in two stages: a late C19/early C20 stage – more in Europe than the US – when governments started to provide universal education and pensions; and a mid C20 stage when pensions expanded to broader social security and health care and, in some cases, housing.

[Additional to these big ones was defence-related spending (not just guns, ships and planes, but the key industries enabling the equipping of mass armies). Governments had learned by experience that private provision in this area only worked until the bullets started flying – ie until you needed it most].

The drivers were the manifest inability of the private sector to provide continuous, comprehensive coverage, pressure from the working class and military competition (this last was very weak in the US, so much of this change arrived later there).

The US has more or less always preferred subsidy or regulation to direct provision. This gives the appearance of lower public cost at the expense of effectiveness (compare health-care costs as a key example). The issue, as I see it, is that many current major challenges are likely to need both direct provision and involves substantial private costs (eg closing down the coal industry, moving agriculture to a sustainable footing, climate change mitigation). This is going to be a much more contentious program in the US than in Europe – and it’s not going to be easy in Europe. So in terms of the post, moves towards a more “cooperative” government/private relationship is going to look more like a yoke than a partnership to the private sector.

42

t. gracchus 06.21.16 at 11:19 am

Going South makes things bad? Australia and Peru are bad? Might be time to retire that phrase.

43

Layman 06.21.16 at 12:49 pm

OP: “Even if Trump suffers a crushing defeat in November (which is by no means a given), the Republican party may not interpret this as a repudiation as such of their position.”

Indeed, history suggests that many Republicans will interpret a Trump defeat as evidence that Trump was insufficiently Republican. This has been the result of prior defeats, e.g. Bush I, Dole, McCain, Romney. To be fair, Republican leaders may not actually believe this, but most Republican leaders – sitting members of Congress, Senators, Governors from safely red states, and media figures who profit from ginning up right-wing outrage – have much to gain from pretending to believe it, and nothing to gain from apostasy.

Also, too, explicit race-baiting and the appeal to white fear seems to be missing from the explanation of what went wrong. The ascendancy of Nixon, in part through explicit appeals to racism which became a staple of the Republican Party, exploited white fears about losing their place in the social and economic strata. Since it was the state that was changing the game – civil rights, affirmative action, special secret free super welfare for blacks (with their T-bone steaks and Cadillacs!) – then the state was the enemy that had to be drowned in the bathtub. A starved and reviled state is not a partner in any mixed economy, how can it be?

44

Carl 06.21.16 at 1:23 pm

It should probably be read together with “The entrepreneurial state” by M Mazzucato, one of my favorite books.

45

cassander 06.21.16 at 2:55 pm

> precisely because of the content that GOP officials have polarized around. This involves rejections of policies (e.g., cap-and-trade) that were default GOP national proposals as recently as the 2008 election.

The most relevant bit of data on climate change legislation is the senate’s non-binding kyoto vote, it was 97-0 against. the GOP has always been against climate legislation, it’s the democrats that have moved, more rhetorically than actually, it must be said, to support it.

>It’s interesting that you think delaying or blocking environmental regulations proves your point;

I said no such thing. But good to know that I was right and you can’t name a single environmental regulation the GOP has repealed. Pro-tip, when things don’t change, you can’t claim they’re moving right

>one could note Bush era policies on the Endangered Species Act, Mining, the Clean Water Act, staff cuts that hit motoring and enforcement, and so on.

No, you couldn’t. the bush administration policies increased the level of regulation in all of those areas. less, of course, than the left wanted, but that’s still movement LEFT, not right.

>I don’t know what data you’re citing for total tax burden, but we have very good evidence for what how the modern GOP does tax policy

the OMB: https://upload.wikimedia.org/wikipedia/commons/7/75/U.S._Federal_Tax_Receipts_as_a_Percentage_of_GDP_1945%E2%80%932015.jpg

>when it isn’t constrained by veto points — say, in Oklahoma and Kanasa —

Ah, yes, Kansas, the land where a 2% budget deficit is mad max style anarchy.. Of course, we’re talking about federal policy, but taxes and spending in kansas are higher than when brownback came into office, so please don’t brag about your innumercy or willingess to forgo reading actual budgets in favor of hyperbolic reporting: http://budget.ks.gov/files/FY2017/CRE_Long_Memo_April2016.pdf

>we know what Ryan’s budget looks like.

Yes we do. Well, I do. You obviously don’t because one of its main stipulations is taxes at 19% of GDP, a considerable increase above the historical average.

>In the off chance that you’re not trolling,

You keep using that word, it doesn’t mean what you think it means.

>the point that you’re responding to involves cross-temporal comparison. What is your baseline for the modern GOP being less conservative? 1994? 1984? 1976?

Pick whatever you want, it doesn’t matter.

>Is your position really that George Romney and Gerald Ford are to the right of contemporary national GOP figures

They lived in a country with less regulation, less social spending, and more military spending. A country where being gay was, at best, still considered some sort of mental disorder. Where feminism was still nascent. If either ran today advocating the country they presided over, or aspired to preside over, they’d be run out of the GOP as bigots. So yes, they are, unquestionably, measurably, well to the left.

>What policy goals do you see as key indicators for your assessment?

pick whatever goals you want, the only goal the right regularly achieves is blunting the left. In the modern US, it has almost never actually moved the needle rightward.

> I’m perplexed that you *seem* to be focusing on outcomes as a metric of ideological position.

Because enacted policy is what matters. I care what politicians do, not what they say. I can’t imagine why anyone would care what they say if it doesn’t change what they do.

46

Steve Williams 06.21.16 at 7:45 pm

Huh, guess the left won after all.

Hooray.

47

RNB 06.21.16 at 7:51 pm

Haven’t been reading commentary or even OP very carefully. But I remember that in Pierson and Hacker’s NYT editorial piece for Hillary Clinton, they recommended predistribution over redistribution. I think they meant predistribution in James Heckman’s sense of investing in the human capital that individuals bring to the market. They may have also suggested that more favorable unionizing rules and higher minimum wages would obviate the need for progressive taxation. But I don’t think this what they meant by predistribution. But what is predistribution exactly?

48

RNB 06.21.16 at 7:54 pm

In Rise and Fall of Neoliberalism David Kotz provides evidence of a shift in business thinking towards neoliberalism in response to the 70s crisis of stagflation. He looks at Business Roundtable and Chamber of Commerce reports and political statements or some such evidence from these kinds of business groups. He compares it to similar reports/statements by business groups in the so-called Golden Age.

49

bruce wilder 06.21.16 at 9:45 pm

Peter T: It’s worth thinking about when, why and how the public share of gdp increased. My impression is it happened in two stages: a late C19/early C20 stage – more in Europe than the US – when governments started to provide universal education and pensions; and a mid C20 stage when pensions expanded to broader social security and health care and, in some cases, housing.

Just some random reflections — no real argument is offered, more an admission that I don’t have an argument to offer, just questions about how to construct one.

There’s an ungrounded assumption that the share at some linear regress was “small” and the government has grown out of proportion to the rest, perhaps because it has taken on functions and roles (like education or social insurance) that either didn’t exist or were handled differently. We are conscious, of course, that public functions of government loom large in our lives, but we have little means to grasp analogous circumstances in previous centuries or make comparisons that must be incommensurable given the differing status of money itself in less developed economies and the more limited agricultural (and energy?) surplus.

It has never been a simple or linear a development. Over centuries, the economy has expanded, deepened its complex specialization and money exchange has permeated the organization of everything. Thru much of the 19th century, the advanced economies were struggling to develop a wage economy and to escape the constraints of a limited agricultural surplus — that’s not irrelevant to the political struggle to finance the state from taxes. Ancien regime France had pretty good roads, but they were “paid for” by corvée. Baron Haussmann had a pretty easy time of it early on, in his transformation of Paris, but things got harder as the legislature gained power vis a vis the Emperor. England extracted so much of the agricultural surplus of Ireland that they brought about mass starvation — is that because government looms large or small? The American Civil War was conducted by a Party championing the wage labor economy: was that expanding the role of government or shrinking it, in the economy? And, the pensions paid out to veterans?

How large was the established church in the economy of late 16th century England? I really have little idea. How good was the equivalent of public education? It produced Shakespeare and a paying audience for Shakespeare. It couldn’t have been that bad. When you include legal education at the Inns of Court, it looks like England had more university wits in the 16th century as a proportion of population than in the 19th. What do we make of impressment or the injustices of the merchant navy in the 18th century?

50

Lee A. Arnold 06.21.16 at 9:57 pm

Cassander #3: “a book founded on the notion that the american state is, in some meaningful way, getting smaller.”

This is false. Hacker and Pierson are unlikely to question the fact that the total U.S. tax burden, and U.S. gov’t net expediture as % of GDP, have been fairly stable for decades, despite the big blip in expenditure as % of GDP the depressed aftermath of the financial crash.

The facts which they consider, and which should be obvious even from the most cursory examination of the book, are the great diversion of net transfers to the upper classes (which has just recently abated, though not for long, if the GOP regains control of the White House) and the failure to maintain gov’t expenditure on infrastructure and on basic scientific R&D. These failures are going to hurt the country for decades into the future, by not planting the “seed corn” for the future economy, now.

The continuing failure to understand this destruction of the future defies rational explanation, and we can only assume that almost all Republican politicians, and half the Democratic politicians, are insane.

Now, we are in the era of secular stagnation (i.e., surplus financial capital + a deficit of consumer demand + a big question about whether future workers can ever expect the large incomes growth that workers saw in the past). So, it could be that gov’t needs to get a little bigger.

51

bruce wilder 06.21.16 at 11:38 pm

The continuing failure to understand this destruction of the future defies rational explanation, and we can only assume that almost all Republican politicians, and half the Democratic politicians, are insane.

Not insane, just on the grift.

The New Deal had two things going for it.

First, there was a long and grievous history of struggle during the 1930s and stretching back decades. This was evident in popular participation in and support for labor organizing, in the face of threats of violence. People were willing to fight, organized to fight, with a pretty clear understanding that the bosses were not their friends, not to be admired or trusted. Working people in Detroit in 1930 didn’t have to be told who Harry Bennett was. Or what kind of monster he was or whose monster he was.

Antagonism with capital was a feature of the early New Deal. Harold L. Ickes, a key Administration and Democratic Party official, for example, made his bones in a feud with Samuel Insull, the Chicago electric utility financier (whose holding company apparatus collapsed after the crash). The Pecora Investigation exposing the practices of the National City Bank (Citibank) exposed both the sharp practices of Wall Street and the Street’s culture of hostility to the public interest.

The Second thing — the thing that sealed the New Deal — was World War II, which, on top of the shared trauma of the Depression, created a sense of national solidarity that induced in a whole generation of business leadership a public spiritedness and sense of public responsibility.

The Great Depression was a consequence of some hopelessly impractical imbalances in the distribution of income, both between countries and within the United States. Politically, it was one long drawn out domestic struggle over the distribution of income, which was ultimately settled in favor of egalitarianism by the outbreak of a total war that posed an existential threat to the whole polity.

The spirit of solidarity that underwrote the New Deal has long since worn off, in a series of stages coincident with generational change.

I do not see how you can make rich people care, as a political program.

You can associate status with certain kinds of philanthropy, and get opera houses built, but you cannot solve social problems that way, because the social problems are ultimately how the rich make themselves rich and powerful — at least at the margin. They will repair only some of the damage their greed does, and as a group or class, will always oppose any program of amelioration or innovation that reduces their power or economic rents.

If the interests of the common people, the poor, the working or middle-classes are to be represented, then those classes will have to organize and face the necessity of conflicts and fighting with the rich and powerful. Then, and only then, is there some possibility of selecting among the rich and powerful, the better angels.

Hacker and Pierson seem to want the legendary Republican Moderate of the 1950s or 1960s and, of course, they’ve found one in Hillary Clinton, who they are sure has a vision similar to theirs, but is keeping it a secret.

Republican Moderates were never spontaneous effusions. They were the product of fear and political loss, at a time when conflict of interests were the stuff of political battles, not quiet political corruption and lowering of expectations of integrity.

Like I said, I don’t see how you can make a patriot out of a greedhead. If people are organized around their anger and resentment, I can imagine prosecutions and strikes doing some good. But, you’d have to sweep away the barriers to protest erected in recent years and disable the surveillance state and, of course, replace the spirit of looking forward, not backward that permeates the Democratic Party’s neoliberal ruling factions and prevents prosecution of much of anyone except whistleblowers.

52

Layman 06.22.16 at 12:28 am

“Like I said, I don’t see how you can make a patriot out of a greedhead.”

Conscription?

53

MilitantlyAardvark 06.22.16 at 2:25 am

I do worry that Cassander may be suffering concussion after hitting his head while moving the goalposts so many times.

54

Peter T 06.22.16 at 4:48 am

I’ll add a bit to my observations @ 42. The reason why government grew as a percentage of gdp was that it was found to be impossible to reach a high stage of advanced industrialisation with a poorly-paid, unhealthy, insecure, illiterate workforce, or even with one that was not fairly uniform in these dimensions. In other words, you could not build and operate reliable power grids or assemble large steel ships with a small number of engineers and a large amount of casual unskilled labour (Russia and a few other places tried).

And only the government could provide these things on a comprehensive and uniform basis. This was a solution reached reluctantly, after a great many trials of other arrangements. Note that the expansion was largely confined to areas of industrialisation – in the US and UK, areas like agriculture and domestic service were left to the old arrangements.

My impression is that the areas of the economy which you can operate with a small number of high-skilled people and a large number of comparatively low-skilled ones have grown relative to those where this is not possible. Much IT work has this character, as has the service sector generally. And, of course, agriculture and personal services are still on the old model. If you are going to extend direct government provision you have to identify areas where this would either increase productivity or limit damage.

55

bruce wilder 06.22.16 at 6:23 am

areas like agriculture and domestic service were left to the old arrangements

of course, agriculture and personal services are still on the old model.

What was the old arrangement, the old model?

Agriculture was “industrialized” — science and technology developed and applied, fossil fuels applied in abundance, etc

I feel I have missed something?

56

Peter T 06.22.16 at 9:32 am

The old model – patron-client, largely unionised, left out of Social Security in the US, casual, unskilled labour, often exploited (see all those LGM posts on illegal migrants picking produce, or the working conditions in front-line food-processing, or the labour trucked in to British or Spanish fields from the Middle East at harvest time, or indigenous/back-packer farm labour here in Australia…). High turnover, low wage, low value-add.

The old model is not necessarily technologically backward. It just uses technologies that do not require a high level of front-line skill and cooperation.

57

Peter T 06.22.16 at 9:49 am

sigh

“largely UNunionised”

58

Lee A. Arnold 06.22.16 at 1:39 pm

Bruce Wilder #52: “Not insane, just on the grift.”

I think it is more complicated than this.

The incidence of larceny among politicians is probably no greater than it is among businesspeople in general. Although if we include high finance, the statistic goes upward.

Certainly there is also class war and political antagonism over income distributions. Who can argue? This emerged full-blown in the early modern period, when “individualism” when exercised in the “market system” replaced the traditional/religious justifications for social hierarchy.

But crooks usually don’t kill the goose wots layin their golden eggs.

More important, 1. greed and 2. class war cannot explain how the intellectual premise to destroy the future has reached so fully into academia, dressed as the Hayekian fallacy of market fundamentalism.

So, we also need 3. insanity. Or at least, 3. widespread intellectual incompetence.

Market fundamentalism, in the guise of Thatcher-Reaganism (sometimes leavened by Clinton-Blairism), has overtaken most politicians. Why? Because it has overtaken most voters, of course.

It is not something that is largely being “done to us” by evil elites in conspiracy. Although there is a terrific little book, The Selling of the Free Market by James Arnt Aune (2001) which examines the rhetorical devices that have been deliberately employed to reinforce the falsehoods, and names some venues of their production.

Why is this belief so durable?

Market fundamentalism provides a simple (false) explanation of how the modern system could work: if everybody gets with the program, rolls up their shirtsleeves, emulates their betters, and dives into the mess — it will work!

It neatly justifies two falsehoods: “freedom” and “efficiency”. Common people, non-academic people don’t put these so concisely in their conversation, but the ideas will always be found there: Gov’t ALWAYS makes you less free. Gov’t ALWAYS destroys the economy.

(And the destruction is supposed to be caused by both regulation and gov’t deficits.)

It’s the tandem, one-two punch — “freedom + efficiency” — that secures the belief. It’s a verbal double-bind upon the typical brainpan. Most people can’t put two different ideas together in the same thought. Much less can they argue back. It’s a full day’s work; it’s a revelation. Market fundamentalism provides a fait accompli that is impossible for most people to argue against.

And not only the untrained! The first to be so doubly bound were the academics who cooked it up. At one time or another, market fundamentalism has been consented to — if not espoused by — every bounder you can name. From left to right. Not only in economics but in the rest of the social sciences.

The first book I can think of which directly opposed market fundamentalism in the Thatcher-Reagan era was not by an economist or other academic. It was a popular book, Everything for Sale, by Robert Kuttner, a journalist. I remember reading it the month it was published in 1988. At that time the reviews I read were uncomprehending if not mildly derogatory: crickets chirping in the trades.

At this time, the best new books merely glance over the fact that market fundamentalism is false, on their way to explaining why gov’t activity is now necessary:

2014 Entrepreneurial State — Mazzucato
2015 We Are Better Than This — Kleinbard
2016 Between Debt and the Devil — Turner
2016 Concrete Economics — Cohen, DeLong
2016 American Amnesia — Hacker, Pierson

All good books. Of course these writers are correct to focus first on the largest problem, and let the ideological chips fall where they may. This strategy avoids Popperian historicism, in clean intellectual fashion. And it is surely the best practical strategy to gain readership in our present case, when the voters and their elected politicians are so uncomprehending.

It also reflects the reality that most practitioners of the social-science racket still fall back into Hayekian craziness whenever possible, and might find it easier to kick heroin (e.g., read Tyler Cowen & the writers of his links and citations). So these writers have to avoid their colleagues.

Our biggest problem is thus a form of intellectual insanity: market fundamentalism, still running rampant and still paid lip service.

And it gets worse. There are two more problems which help to inculcate its reign upon the brain: voting and complexity.

To vote properly, you need cognitive ability, cognitive time, and cognitive interest. These are not high on most bucket lists.

By contrast, market fundamentalism is simplistic. You need only follow prices, not study to cast a vote. If the widescreen TV costs more at this store than at the other store, that’s all you need to know. Simple.

And further, if you can bankrupt everybody else while getting out with your millions — and it’s legal — then yeah, go for it! Simple.

Thus, Trump.

Further, the world is getting more complicated. So what good does it do you, to study the issues?!

Thus, Trump.

Need for simplicity is exactly same with lefties: Blame it on crookery, capitalism.

59

bianca steele 06.22.16 at 1:51 pm

The reason why government grew as a percentage of gdp was that it was found to be impossible to reach a high stage of advanced industrialisation with a poorly-paid, unhealthy, insecure, illiterate workforce, or even with one that was not fairly uniform in these dimensions. In other words, you could not build and operate reliable power grids or assemble large steel ships with a small number of engineers and a large amount of casual unskilled labour (Russia and a few other places tried).

Oh, that can be handled if you know how to communicate!

60

JimV 06.22.16 at 2:59 pm

Further to Bruce Wilder’s excellent summary @52: I blame Jack Welch. (I may be biased.)

Welch’s strategy was to sell GE’s seed corn (its R&D budgets). When he took over, GE had a large corporate R&D department that mostly did basic research, and my GE department, Large Stream Turbine-Generator Engineering (~1000 design, manufacturing, and field-service engineers) had a shadow department, LST Development Engineering, with another 1000 engineers with PhD’s or Masters. To meet his goal of higher profits each quarter, he sold off and/or laid off R&D divisions. By 1985, the last remnant of the LSTG Development organization was a single six-person office called “Advanced Design” to hide it from Welch on the organization chart. Meanwhile Welch had sold off GE’s computer business and later sold off GE’s early Internet business (GE Time Sharing Services).

Welch’s strategy was so successful (in personal terms) that other CEO’s mimicked it , and here we are as a result.

61

cassander 06.22.16 at 4:01 pm

@lee arnold

Cassander #3: “a book founded on the notion that the american state is, in some meaningful way, getting smaller.”

>This is false. Hacker and Pierson are unlikely to question the fact that the total U.S. tax burden, and U.S. gov’t net expediture as % of GDP, have been fairly stable for decades, despite the big blip in expenditure as % of GDP the depressed aftermath of the financial crash.

the size of the state is governed by more things than the amount of money it has, though that is an important capacity. Henry claims that they claim explicitly that regulation is being rolled back. it isn’t.

>The facts which they consider, and which should be obvious even from the most cursory examination of the book, are the great diversion of net transfers to the upper classes

the american welfare state has always served mostly to transfer money not from rich to poor, but from young to old. The biggest change to this recently was the ACA, which increased the rate of transfer from young to old (though old in this case is not the usual post 65 definition). Last I checked, the republicans were not in favor of that particular program. So please, credit where credit is due.

>So, it could be that gov’t needs to get a little bigger.

Ah, the theory that the government is corrupt/insane, and therefore should be made larger and more powerful. If you think the government is transferring money in ways that are bad, why on earth would you call for giving it more money? If your theory of government is correct, you should be hanging out with the libertarians, not the CT crowd

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Lee A. Arnold 06.22.16 at 4:33 pm

Cassander #62: “Henry claims that they claim explicitly that regulation is being rolled back. it isn’t.”

What does Henry write, exactly?

Cassander #62: “the american welfare state has always served mostly to transfer money not from rich to poor, but from young to old.”

No idea what this sentence proves, but from 1979 to 2007, share of total gov’t transfers by income percentile increased for the upper three percentiles and decreased for the bottom two percentiles. See for example CBO, “Trends in the Distribution of Household Income Between 1979 and 2007”.

Cassander #62: “the theory that the government is corrupt/insane”

This is your theory, not mine. Gov’t is not required to be corrupt/insane.

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cassander 06.22.16 at 5:32 pm

@Lee A. Arnold 0

>What does Henry write, exactly?

“This world of moderate business and countervailing power is not the world of today. Hacker and Pierson discuss how right moderates have been drowned out, both in business and the Republican party.”

“Yet the rapid and durable repudiation of the mixed economy was hardly a “gradual encroachment of ideas.”

>No idea what this sentence proves, but from 1979 to 2007, share of total gov’t transfers by income percentile increased for the upper three percentiles and decreased for the bottom two percentiles.

Almost like the size of the elderly population, the group that has most of the money and gets most of the transfers, increased!

>This is your theory, not mine. Gov’t is not required to be corrupt/insane.

“The continuing failure to understand this destruction of the future defies rational explanation, and we can only assume that almost all Republican politicians, and half the Democratic politicians, are insane.”

Your words, not mine. As for the theory that government doesn’t have to be this way, how about you achieve that, THEN expand the state, not the other way around?

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cassander 06.22.16 at 5:35 pm

@JimV

You do realize that sold off divisions don’t disappear, correct? That they’re bought by someone else and their work continues? Why should it matter if GE owns the division or some other company?

@MilitantlyAardvark

When all you offer is not very clever insults, all you do is demonstrate your inability to make actual arguments.

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b9n10nt 06.22.16 at 5:43 pm

Lee A. Arnold:

I don’t think “insanity” is in anyway clarifying: It’s the norm that societies become “bewitched” by religious-economic ideologies that unconsiously channel and restrain status anxiety. Market fundamentalism is simply one contemporary form of self-medication against standard-issue human bewilderment.

(Though I would discern market fundamentalism as akin to Catholic theology: an intellectual contrivance for those who need a stronger dose of medication than is offered by the modern cultural opiates of individualism-consumerism-entertainment).

As you suggest (“we did it to ourselves”), there’s a collective imperative to create meaning (illusion): Jack Welsh and his ideological brethren are as much a victim of their “meds” as they are cynical manipulators of the body politic.

I agree with what I think BW is saying: the Great Compression was a predictable aberration. Both the interests and ideas that have fueled the elites’ post-60s backlash are emanations of human drives to act and justify, exposed to new conditions, new opportunities.

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Lee A. Arnold 06.22.16 at 6:34 pm

Cassander #64,

1. What you quote by Henry does not say that “they claim explicitly that regulation is being rolled back”.

2. The fact that the welfare state makes transfers from young to old is immaterial to the discussion. And not merely because the young become old, so there is equity over lifespan. The transfers over the last 30 years have changed: from going to the poorer, to going to the richer. And that in turn impaired effective aggregate demand and economic growth, which is material to the discussion.

3. The fact that voters and politicians have bad ideas surely impacts the effectiveness of government. But that doesn’t refute the argument that more government spending is part of our only way out, due to secular stagnation, infrastructure underspending and increasing environmental externalities. Does “making go’vt better” = “making gov’t smaller”? Not necessarily.

Nor does it refute the argument that we are surely going to get bigger government, whether it is better or not.

Because so far, we are not avoiding the next crisis: The fact that fully 1/4 of the populace has accepted the need for the Trumpian attitude, and are convinced that Trump knows what he’s talking about despite his unpreparedness, contradictions and incoherence, is a strong indicator.

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cassander 06.22.16 at 7:23 pm

>1. What you quote by Henry does not say that “they claim explicitly that regulation is being rolled back”.

How on earth is ““Yet the rapid and durable repudiation of the mixed economy” not an explicit claim that the state is being rolled back?

> The fact that the welfare state makes transfers from young to old is immaterial to the discussion.

No, it isn’t. The old are richer than the young, so if you transfer money to the old, and the old get more numerous, you also transfer more money to the rich. This is very basic math. Yes, it’s true that if you take a lifecycle analysis it all washes out, but you aren’t doing that. You’re looking at a snapshot in the 70s and a snapshot today and ignoring cohort/demographic effects.

>But that doesn’t refute the argument that more government spending is part of our only way out, due to secular stagnation, infrastructure underspending and increasing environmental externalities.

Yes, it does. If the money is going to be spent badly because voters and politicians have bad ideas, then you can’t assume that more spending won’t be spent at least as badly.badly.

> Does “making go’vt better” = “making gov’t smaller”?

making government smaller makes it easier to make it better. For a given amount of attention/political will/whatever, you can more closely monitor and change a smaller government than a large one.

>Nor does it refute the argument that we are surely going to get bigger government, whether it is better or not.

I have no doubt that we will get a bigger government, we’ve been getting bigger and bigger government for going on nearly a century now and I don’t think it will stop any time soon. What I can’t understand is how someone can think the current government is bad and that it getting bigger is a good thing without going mad from cognitive dissonance.

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Lee A. Arnold 06.22.16 at 8:37 pm

b9n10nt #66,

I suppose “insanity” might not be the right word, if we recognize that there is an economic ideology that bewitches even the academics and intellectuals.

However, economists and other social scientists have done their status anxieties no good with the financial crash and subsequent depression. For now we believe them less than ever! So were they sane, or not? Or just lacking intellectual competence, comprehensiveness?

The same ideology appears to be strongly correlated with climate denialism. Which clearly is insane.

And the opposing economic ideology, on the left, is equally guilty of simplified bewitchments. Is everything due to greed and the self-justification of greed? I doubt it.

Is the Great Compression a “predictable aberration” if the sample size is 1? I doubt it.

Will the return to the “norm” of Great Divergence of Incomes be politically tenable, since it is now manifestly revealed that it hasn’t led to rising boats for everyone as promised? I doubt this too.

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Lee A. Arnold 06.22.16 at 8:39 pm

Cassander #68: “How on earth is ‘Yet the rapid and durable repudiation of the mixed economy’ not an explicit claim that the state is being rolled back?”

Because it’s expanded elsewhere, causing net expenditures as percentage of GDP to be near constant? The “mixed economy” that Hacker and Pierson write about is market and state working together, for example via technical research that is publicly funded (and which led to a huge list of privately marketed goods and services, most recently almost all the components used in the Apple iPhone), to public funding for education and training of the workforce, and to public spending on infrastructure. The public expenditures on all of these basics are SMALLER, as % of GDP.

It would even be easy to make the argument that the number of regulations, as well as the size of prisons and welfare spending, have had to INCREASE, and must needs increase further far into the future, due to these shortsighted deficiencies in the basics.

Cassander #68: “The old are richer than the young, so if you transfer money to the old, and the old get more numerous, you also transfer more money to the rich. This is very basic math.”

Still immaterial, for two very different reasons: 1. As the old become more numerous and money is transferred to them, their goods and services expand in an economic growth sector for incomes of the young. (You can see this in the increase of jobs in the medical industry and ancillary businesses.) The flow of money is circular. 2. Overall productivity makes it easier to pay into those transfers, to support the old. (This is the reason why the old argument that Social Security must go bankrupt because it used to have 15 workers per retiree, but now has only 2 or 3 workers per retiree, is itself a bankrupt argument.)

Cassander #68: “If the money is going to be spent badly because voters and politicians have bad ideas, then you can’t assume that more spending won’t be spent at least as badly.”

Certainly one would prefer proper spending, but this has nothing to do with the argument that the only way out of secular stagnation etc. looks like more gov’t spending. Even at this moment, ANY reduction in U.S. gov’t spending, whether it is spent badly or well, would throw the U.S. and the world into a bigger slump away from potential GDP. This is not only true at this moment, but remarkably, true for the foreseeable future.

Cassander #68: “Making government smaller makes it easier to make it better.”

Not necessarily, nor likely. Simplification and targeting is a better method, (for example), and quite in line with Ostrom’s rules for institutions. A good example is Social Security: it is the biggest component of the U.S. federal budget yet its bureaucratic burden and overhead are miniscule. And without it, we would need even BIGGER, more intrusive, much more bureaucratic government, to deal with the resulting destitution. Social Security is a brilliant win-win.

Cassander #68: “we’ve been getting bigger and bigger government for going on nearly a century now… What I can’t understand is how someone can think the current government is bad and that it getting bigger is a good thing”

Not “bigger and bigger” continuously. As already mentioned above, fed gov’t net expediture as % of GDP has been within a narrow band for over 30 years, with the exception of the temporary blip up for the financial depression.

Meanwhile what I can’t understand is why someone would ignore the call for better gov’t. And I can’t understand why someone would mistake the argument that bigger gov’t will be a necessity, for an argument that it will be either good or evil.

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Collin Street 06.22.16 at 9:28 pm

The same ideology appears to be strongly correlated with climate denialism. Which clearly is insane.

Empathy impairment greatly limits your ability to even comprehend the existence of collective action problems, let alone approach solutions.

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b9n10nt 06.22.16 at 10:12 pm

Lee A. Arnold @ 69

However, economists and other social scientists have done their status anxieties no good with the financial crash and subsequent depression. For now we believe them less than ever! So were they sane, or not? Or just lacking intellectual competence, comprehensiveness?

You may be kidding a bit, but I don’t think that’s how ideology works. Making a fool of oneself is stressful: In our youth or if we are sufficiently narcissistic we may make a desperate play for status that leaves us vulnerable to being (a)shamed, but generally we position ourselves very carefully to ensure this is unlikely to happen.

Any professional economist, like any of us, will have myriad opportunities to tell ourselves or be told “I did that [analysis, lecture, research] well, I’m competent, my status is secure” in our immediate day-to-day lives. And there’s no end to intellectual defense mechanisms (cherry picking, moving goal posts, etc…) that we can draw on to protect our less-practical ideological effusions from risking our sense of worth. Also, we join teams that will circle the wagons and reinforce our defenses. I very much doubt that the Eugene Fama’s or Casey Mulligan’s of the world lose proverbial sleep over their post-Great Depression rhetorical performances.

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b9n10nt 06.22.16 at 10:14 pm

Depression was supposed to be Recession

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bruce wilder 06.22.16 at 10:55 pm

Lee A. Arnold @ 59

That was a good rant. I found it stimulating.

When I first read Henry Farrell’s original post, I noticed as apparently you did “market, market, market” — 16 times in 2000 words, leading up to this in the next to last paragraph:

The attractions of markets are not purely ideological. Hayek’s defense of the market as a system of distributed informal intelligence is far from being entirely wrong; many of his arguments are indeed compelling and powerful. . . . arguments about the conditions under which the government can do better than market mechanisms – seems to me to be both important, and missing from Hacker and Pierson’s argument as it stands.

Overlooking the dissonance of placing Hayek and “not purely ideological” in the same paragraph, I sighed to myself and wondered if it would do any good to type out my now standard protest against mindless repetition of the “market economy” myth.

You are right that there is something like a double-bind at work, locking otherwise highly intelligent people into a framework of terms that locks out critical thinking.

To the extent that “market economy” is just a convention of our shared culture, we really shouldn’t expect expressions of critical thinking. Culture is shaped and reinforced with slogans, not analytics, taboos and clichéd tropes, not science. But, that doesn’t explain why the professionals, the economists or political scientists whose stock-in-trade presumably includes reason and evidence, seem almost more deeply trapped than ordinary folk.

There are two entangled threads in the double-helix of Chicago economics and they have both been pounding on the market=good, gov’t=bad drum since at least the 1960s. Milton Friedman is the well-known leader of one of those threads and he was a supremely clever rhetorician and spinner of narratives. A Monetary History of the United States, 1867–1960(1963), which he co-authored with Anna J. Schwartz, is a masterpiece of persuasion, even if it is a total crock on the causes of the Great Depression. He battled with John Kenneth Galbraith for control of the narrative of American political economy, and, with a little help from Samuelson and Solow, he won, even though Galbraith was wittier.

The other thread, which is probably as familiar to Farrell though maybe not to others, is sometimes referred to as Public Choice, though that’s a name for a subspecialty in economics and what I have in mind is the ideologically distinctive work of James M. Buchanan and Gordon Tullock and Mancur Olson, also from the early 1960s. Like Friedman’s, their arguments are powerful and compelling, very far from entirely wrong . . . and twisted, ever so subtly twisted. They also beat the gov’t=bad drum, positing that the New Deal politics of conflicting interests must deteriorate into a sclerosis of “rent-seeking” a term they did much to make into a popular political cliche; it is unclear in retrospect, whether they were protesting the prospect or providing blueprints.

You write, “the best new books [you have a list] merely glance over the fact that market fundamentalism is false, on their way to explaining why gov’t activity is now necessary . . . Of course these writers are correct to focus first on the largest problem, and let the ideological chips fall where they may. This strategy avoids Popperian historicism, in clean intellectual fashion. And it is surely the best practical strategy to gain readership in our present case, when the voters and their elected politicians are so uncomprehending.”

This assessment, which seemed astute, raised an important point for me — Should they avoid historicism?

I am not saying we should embrace Hegelian historical destiny, the romantic claptrap Popper opposed. But, among the fundamental flaws of Samuelson’s Economics and the Econ 101 and the market fundamentalism drawn from it, is the absence of history. The pedantic way to put it is that Samuelson’s economic theory is ergodic. But, we could also say with considerable force: Political Economy is properly the history of the political economy.

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bruce wilder 06.22.16 at 11:18 pm

Political Economy is the history of the political economy.

It does have a ring to it, if I do say so myself.

The argument that the Great Compression was historically contingent that I made earlier could be classed as historicism, no? If that is the understanding we need, then the job of political economics is a hermeneutics of the one and only one case presented by historical development.

Friedman’s argument for a market economy — and he swallowed Hayek’s “The Use of Knowledge in Society” whole, in a move that Phillip Mirowski identified as a landmark in the evolution of neoliberalism — takes Samuelson’s economy in ergodic equilibrium — and makes it into a narrative that erases all the ways that government and political activism shaped and managed and organized “markets” so that they worked toward the public good. Friedman addressed the Baby Boomers and told them that well-functioning economy they inherited was a natural emergence and government an encumbrance. It made superficial sense only in that historical moment.

But, in addition to making superficial sense, Friedmanite market fundamentalism came attached to the dividends realizable from cashing out on the sunk-cost investment in those structures. So, there have been thirty or forty years of political payoffs available from dismantling the New Deal in various ways, reducing the “burden” of regulation or disinvesting from public infrastructure, privatizing and so on. Again, the argument is a form of historicism, because it calls on an interpretation resting on specific historical context and sequence of developments.

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bruce wilder 06.22.16 at 11:24 pm

This is just a side-note for Lee, because I know how he likes to take note of the path developments are taking, but I do think the criticism of Econ 101 has reached crescendo and will be eclipsed completely in short time, after a very long run. Samuelson’s Economics was first published in 1948, which would mean that it will have had its Biblical allotment of three score and ten in 2018. Take a look at http://evonomics.com/ if you want to see how easy and conventional it now is to write facile essays refuting market fundamentalism. And, notice they embrace the historicism of evolution as their controlling metaphor.

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Rich Puchalsky 06.23.16 at 12:48 am

Lee’s nonsense is mostly an expression of what he criticizes in others. He dismissed one of Corey Robin’s arguments as mood affiliation because he didn’t understand it (and, I guess, because it didn’t fit his mood of optimism.) He’s addicted to facile both-sides-do-it equivalencies and I see no sign that he can actually learn anything from anyone.

The flip side of the now-argued-to-death “market fundamentalism is bad” trope is, of course, that government is good. But of course market fundamentalism can not exist without government: they are inextricably linked. Neoliberal market fundamentalism is just as much a creation of government as the New Deal was. The question isn’t about the size of government, it’s about government for whom, controlled by whom, doing what.

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RNB 06.23.16 at 3:15 am

@45 Only having heard an online lecture by Mazzucato and pehaps having a read a short piece by her, I am wondering whether the question comes down at least in part to time horizons. Mazzucato emphasized the ability of the state to undertake projects that promise good returns only in the long term. It seems that with the possible exception of the Iraq War the US state has been involved most in giving short-term fixes to economic problems– this or that specific deregulation to encourage investment; or this or that tax reform to raise aggregate demand; or this or that form of radical monetary policy to stabilize asset markets.
The US state does not seem to have the long-term time horizon to make investments on behalf of the next generation, whether we are speaking of the adult capabilities today’s preschoolers will have or the energy system we will have to have or a 21st century infrastructure.
The government seems mostly to have become an institution that responds to crises and social problems; it does not seem possible today to speak of state investments that will have huge payoffs in the future. The discount rate for state projects seems very high.

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reason 06.23.16 at 11:09 am

RNB @78
That is the problem with polarised democracy (and I think a fundamental one). A “Yes Minister” state with an independent public service can counteract this tendency (as for instance to some extent happens in the EU) but also has its own share of problems. I’m not sure this is inherently a problem with democracy as such, but could be an inherent problem in human nature. Maybe we can invent some strategies to counteract it, I don’t think the possibilities of institutional evolution have been exhausted, which is yet another reason that I find the deification of the US constitution is such a nightmare.

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cassander 06.23.16 at 2:13 pm

@lee

>It would even be easy to make the argument that the number of regulations, as well as the size of prisons and welfare spending, have had to INCREASE, and must needs increase further far into the future, due to these shortsighted deficiencies in the basics.

Making almost any absurd argument is easy. That doesn’t make it not absurd. the regulatory state expands for its own reasons according to its own logic. the idea that poor regulators were forced to expand for lack of other resources is patently absurd.

>Still immaterial, for two very different reasons: 1. As the old become more numerous and money is transferred to them, their goods and services expand in an economic growth sector for incomes of the young. (You can see this in the increase of jobs in the medical industry and ancillary businesses.) The flow of money is circular.

By that logic, transfers from poor to rich don’t matter,their goods and services expand in an economic growth sector for incomes of the poor. Transferring money from one group to another matters distributionally, even if you assume that the cost to economic activity as a whole is close to zero.

>Certainly one would prefer proper spending, but this has nothing to do with the argument that the only way out of secular stagnation etc.

It most certainly does. Even if you accept that proper spending could theoretically get us out of the hole we’re in, there’s no reason to assume that more spending would be done properly.

>looks like more gov’t spending. Even at this moment, ANY reduction in U.S. gov’t spending, whether it is spent badly or well, would throw the U.S. and the world into a bigger slump away from potential GDP.

You were just arguing that transfers don’t matter because the overall level of economic activity remains the same! Which is it?

Cassander #68: “Making government smaller makes it easier to make it better.”

> And without it, we would need even BIGGER, more intrusive, much more bureaucratic government, to deal with the resulting destitution. Social Security is a brilliant win-win.

And if all government spending worked like SS I’d have much less problem with it. Unfortunately, it doesn’t, and the trend for decades has been away from programs like ss and towards absurdities like the ACA. Again, you assume competent government for no reason. Fix the spending we have, THEN I’ll trust you with more money, not before.

>Not “bigger and bigger” continuously. As already mentioned above, fed gov’t net expediture as % of GDP has been within a narrow band for over 30 years, with the exception of the temporary blip up for the financial depression.

I hate to repeat myself, but you don’t seem to like listening. Expenditure is not the only measure of size. Spending has plateaued, though it will not stay plateaued for long as the bill for our unfunded liabilities start coming due. Regulatory activity has continually increase.

>Meanwhile what I can’t understand is why someone would ignore the call for better gov’t.

You’re ignoring that call, not me. I’m the one saying make it better, then bigger, not before.

>And I can’t understand why someone would mistake the argument that bigger gov’t will be a necessity, for an argument that it will be either good or evil.

Because some of us don’t believe in magic, like you apparently do. New government cannot be assumed to be better just because you want it to be better. It will be at least as bad as current government and, if recent history is any guide, probably worse.

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Layman 06.23.16 at 2:20 pm

cassander: “Unfortunately, it doesn’t, and the trend for decades has been away from programs like ss and towards absurdities like the ACA.”

This is helpful! I had no idea you were a supporter of a single-payer health care system. Can I put you down on the list for ‘Medicare for all’?

“Spending has plateaued, though it will not stay plateaued for long as the bill for our unfunded liabilities start coming due.”

Oops, hang on a minute. Aren’t our ‘unfunded liabilities’, er, um, Social Security and Medicare? So you think government spending should be more like Social Security, which you also think is a financial ticking time bomb. Is that right?

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Lee A. Arnold 06.23.16 at 2:37 pm

Cassander #80: “Making almost any absurd argument is easy. “

I read no further.

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cassander 06.23.16 at 3:13 pm

>This is helpful! I had no idea you were a supporter of a single-payer health care system. Can I put you down on the list for ‘Medicare for all’?

Medicare can’t send checks to the right people, so no. But nice to know that I can stick you in the swingle payer is magic camp. You seem to be very fond of magic.

https://paymentaccuracy.gov/high-priority-programs

> So you think government spending should be more like Social Security, which you also think is a financial ticking time bomb. Is that right?

that SS is better than average does not mean that it is good or perfect. Please stop constructing absurd straw man. SS would be a much better program if it actually was a forced savings scheme rather than a ponzi scheme. Absent that, the ponzi scheme could be made to work if the age one receives SS was indexed to the dependency ratio. Absent those, or equivalent, features, it remains a massive financial liability.

Medicare, however, is not simple like SS. it’s a massive effort in soviet style price setting that, despite spending hundreds of billions of dollars on healthcare for old people, has managed to engineer a shortage of gerontologists. It’s a classic example of that magical thinking you love so much, and a disinclination to deal with the world as it actually is rather than as you wish it were. Medicare, sensibly organized, would work as a voucher program, not the fraud and ineptitude ridden monstrosity it actually is

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b9n10nt 06.23.16 at 4:53 pm

Cassander on this thread:

Claim: “Today the American state taxes as much…[as] ever in its history by almost any empirical metric you choose”.

Refutation: the graph you provided showing that current federal tax receipts as % of gdp are NOT equivalent to earlier high marks. “It’s not as catchy [to say]: ‘tax receipts running at historical average,’ but that’s a more accurate description of where we’re at right now,” says Joe Rosenberg, a senior research associate at the Tax Policy Center. (CNN 8/14/15)

Claim: “Other than gun control, there’s not a single position on which the Republican Party today is to the right of where it was, say , 20 years ago,”

Refutation: Preclearance within the Voting Rights Act.

Claim: “Can you name even a single environmental rule that the Bush administration…repealed or weakened”?

Refutation: The Energy and Policy Act of 2005 was signed into law. The first provision mentioned in its Wikipedia article states, “The bill exempted fluids used in the natural gas extraction process of hydraulic fracturing (fracking) from protections under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and CERCLA.[21]”

Aside: this misses the point, as Cassander seems to be aware when (s)he qualifies that we should NOT consider lax enforcement as an example (itself a seeming contradiction to Cassander’s claim that the poster cares about politicians actions, not their words, implying that we should look at results of governance, not process):

Implications: At least 3 times in this thread, Cassander has made strident claims (“as much as ever”, “not a single”, “name even a single”) that are clearly refuted. Even allowing for narrow, legalistic interpretations of “taxes as much”, Republican “positions”, and “weakened environmental regulation”, the claims fail. Strong rhetorical stances, oftentimes paired with insults to others, could represent a passionate commitment to truth. But then shouldn’t a commitment to truth inspire rhetorical discipline and humility?

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Layman 06.23.16 at 6:27 pm

cassander: “…that SS is better than average does not mean that it is good or perfect.”

Were I you, I’d look into some kind of heavy equipment, given how frequently you seem to need to move those goalposts.

“Medicare, sensibly organized, would work as a voucher program, not the fraud and ineptitude ridden monstrosity it actually is”

Isn’t it odd, then, that the customers of Medicare resist like crazy every time someone tries to throttle it into a voucher program? Maybe they know something you don’t know – a shocking idea, to be sure!, but one you might want to consider.

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bruce wilder 06.24.16 at 4:10 am

Neoliberal market fundamentalism is just as much a creation of government as the New Deal was.

Politics is about the creation of government: “government for whom, controlled by whom, doing what” as you say.

People commonly think they know what the government should be and do, even when they have no idea what they are talking about. I do not mean they merely overestimate their own comprehension; I mean it is common to know nothing, know one knows nothing and to have a strong opinion on what ought to happen. I don’t know if this a form of insanity or stupidity or just human nature.

These circumstances do create a great demand for systems of thought that can generate plausible opinions with agreeable implications quickly and with as little effort as possible. I think neoclassical economics has thrived satisfying this demand without contributing much to our shared practical understanding of governance. In fact, what makes competitive market economy analysis (aka Econ 101) an effective rhetorical engine may make it wholly impractical as a science or technology of political economy.

I am just not sure how the cognitive complexity of the world relates to the things people are asked to vote on. People seem to express something with Brexit or Bremain, just to pick the example of the moment, but . . .

In any case, this is not a game of antonyms. The flip side of simplicity is complexity. The “opposite” of gov’t = bad or “market fundamentalism is bad” is gov’t is problematic.

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Kate Jackson 06.24.16 at 9:31 pm

I’d like to pick up bruce wilder’s point:
“Neoliberal market fundamentalism is just as much a creation of government as the New Deal was,” with the authors’ thesis that government used to be at both times a guide and a countervailing power.

I think it might be fruitful to flesh out these two ideas with some empirics.

In the post-war years, the expansion of mega-size public corporations (which, by definition, are not attributes commonly associated with the “Adam Smith” style free market — Ronald Coase recognized this decades ago) were accepted, finally, as a necessary — if not evil — compromise if we wanted to pursue a certain level of economic growth. They survived the trust-busting of late-19th century and matured into a settled part of our economic landscape after the New Deal.

But then the 1970s came. For whatever reason (history of course is overdetermined!) — free trade, overseas competition, etc. — our corporations were seen to have become less profitable. They weren’t pulling their weight, weren’t justifying their existence by serving as the motors of our national wealth. But at the same time, CEOs were seen as power-grabbers, merging and growing and gobbling up the market to aggrandize personal ambition.

And so government stepped in to act like the countervailing power it has always been. It empowered finance to hold corporations accountable, to serve their social purpose, viz., to generate economic growth. Here, Katharina Pistor’s legal theory of finance is particularly instructive, but anyone familiar with the discourse surrounding the hostile takeovers of the 1980s will be familiar. Who better to make CEOs and boards accountable and responsible than the shareholders who elect them?

The solution, while pragmatic, is of course in hindsight drastically flawed. Quis custodiet ipsos custodes?

At the same time, government is fulfilling its “guide” role by encouraging the development of a comparative advantage in a service industry (finance). Like it subsidized and encouraged railroads. Like it created a national central bank back in post-revolutionary days.

My own question remains: what makes people think that “finance,” an essentially *legal* phenomenon, is an example of a “free market”? And why do people anthropomorphize the giant corporation, pretending it really *is* the black box that neoclassical economics only pretend that it is?

Scott Bowman has a wonderful history of intellectual thought on the corporation, and I also recommend Dalia Tsuk Mitchell’s work on this.

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