Neo-Liberalism, the Submerged State and the Politics of Nudge

So Mettler’s view is that tax expenditures (credits and deductions) keep Americans from appreciating the role of government, making Americans more inclined to listen to a conservative call to shrink government. If we turn those tax expenditures into explicit transfer payments, the conservative call will be undermined, and progressive policies can flourish.

But I don’t see how, for example, turning the mortgage deduction into an explicit transfer payment will make Americans more willing to fund unemployment benefits. Mettler seems to believe this will happen because Americans will become better educated about the government, and will feel more connected to the government.

Neither of those theses is well supported. In fact they seem doubtful.

The problem of the poorly informed voter seems largely a function of the complexity of policy, scarce time and energy to expend on learning about policies, aversion to cognitive dissonance, and possibly an insufficient education to fully grasp policy (contributing to the time/energy needed to understand it).

Telling Americans that they’ll need to wait for a check from the government, rather than simply not paying income to the government, isn’t likely to remedy this – nor to enhance appreciation for the government.

Seconding Cranky Observer (#2) about Bruce Wilder’s comment, which packs a number of important arguments into a compact, cogent statement.

“One could imagine” a lot of things. But imagining that altruism and education are even remotely equivalent to the power of mass-merchandised, jingoistic politics is not just naïve, it’s tragically irrational.

Why do people choose Froot Loops over oatmeal and a grapefruit for breakfast, even though they know the latter is better for them (and I loves my Froot Loops!)? Because Kellogg has done a better job of selling convenience over nutrition. Today’s politics has (d)evolved to the same level. YOU don’t have to sacrifice – the other guy does. But most of us don’t seem to realize we already ARE the other guy.

While I’m a big fan of Behavioural Economics (love the Intemporal Choice work of Daniel Read) I think it’s a bit too soon to use it as a proactive “weapon” in the political toolbox. If anything, it tells us that most people believe they can “double-down” on their previous losing bets and still come out ahead. Combine that type of behaviour with the propaganda machine of the right, and the result of the 2010 US elections is easier to understand. Also, “neo-liberal” DLCers are making the self-defeating mistake of trying to sell oatmeal by saying it’s Froot Loops, but even if it works, all it does is convince people that what the “real” liberals are saying is a bad choice is actually good.

The DLCers have unwittingly(?) advocated the Neocon arguments that all taxes are bad, that it benefitrs the middle class to transfer their wealth to the rich, and that government is inherently evil. And “Greed is good,” of course. That this strategy filled their campaign coffers with money from institutional donors only reinforced the mistaken notion that this was a successful political strategy. Again, just look at 2010 for the truth of that.

Of course, like Froot Loops, the Necon strategy is packaged so well that too many in the “silent majority” don’t see the best outcome they can expect: Great news! We’re only going to shoot you once.

Andrew F. @ 1

I don’t think that Mettler is arguing – or needs to argue – that tax expenditures should be banished. They are probably appropriate responses to certain policy problems. But they should be deprecated as a tool for distributing benefits, precisely because they are intended to be hidden. How does the polity benefit from the status quo, in which the vast majority of Americans simultaneously benefit massively from government policy while believing that they derive no financial benefits whatsoever from government policy?

At any rate, it sounds to me like Henry has already anticipated your reaction, when he noted that “democratically inclined libertarians [might be] in favor of a de-obscuring of the operations of government, both because it is appropriate in its own right, and because they are willing to make the opposite bet.”

It’s conceivable that, in some alternative America, we’ve all agreed that taxes should be around the OECD average, and then the debate becomes about the best way to manage those revenues, and optimised technocratic policies like hidden tax expenditures would be preferable. But in this America, “government spending” means “MY taxes being wasted on THOSE people,” and tax expenditures do nothing but perpetuate that destructive fallacy.

the notion that people would prefer a specific kind of politics more only if they knew more about it (it certainly smells like “only if the Tsar knew!”) is, to me, pretty daft.

Maybe I’m too focused on the analogy, but I think you’ve got it precisely wrong: the fallacy of “if only the Tsar knew!” is that the Tsar, in fact, knew; but the premise here is that tax expenditures (and the like) are specifically designed to obscure policy, and so the people do not, in fact, know. You’ve surely seen the chart in which 90% of people who get gov’t $$ for college say that they don’t, and 80% of people who get gov’t $$ for their mortgages say that they don’t, etc.

It’s entirely possible that libertarians are right that people would oppose programs that benefit them if only they were more aware of them (speaking of daft), but A. democratic principles say that an informed populace is more important anyway, and B. Social Security and Medicare sure seem to indicate otherwise. Would farmers be more in favor of crop subsidies if they were somehow hidden on the 1040?

This is a very good post, and the point about the submerged state is excellent. However, I don’t think it quite hits the target of neoliberals specifically, at least with regard to tax credits versus direct transfers.

In particular, most of the more or less neoliberalish arguments I’ve seen are generally against this sort of implicit subsidy — a very common argument (and one I don’t necessarily disagree with is something like this) —

a) Sales taxes exclude food, because poor people need to buy food.
b) This is inefficient because much of the benefit goes to non-poor people.
c) To make things cleaner and more efficient, we should broaden the sales tax to include food.
d) We can compensate the poor with a means-tested direct transfer.

Now, the glaring problem is that the American political system never gets around to d. Moreover, even if they do, the constituency of the direct benefit is poor people, rather than everyone. However, I’ve always seen neoliberals recognize the distortion itself as a problem.

I meant the above as an example of what Henry describes this way: “Even restricting oneself to effects of the policy process (rather than the broader politics of group formation etc), one might alternatively look at the circumstances under which (as Paul Pierson describes it), “effect becomes cause,” that is, under which policies generate constituencies that can create feedback loops in which the new constituencies demand more policies. Such loops might have beneficial or pernicious consequences, depending on specific circumstances.”

This “neoliberal” discussion is critical, and perhaps needs a dedicated website. But I think you’ve massively overstated the importance of the Mettler thesis–“tax expenditures” are certainly an poorly understood policy issue, but it is incorrect to argue that “submerged state” subsidies are a major reason for the utter collapse of liberal/progressive political power or for the general crisis of US government finances.
At the center of the larger issues is the problem of marrying ideals and policy objectives to raw political power in a way that would support sustainable national coalitions. Semi-coherent policies preclude meaningful political power. Viewed “rationally”, neither the New Deal/Great Society or today’s Megacorporate/Christianist coalitions made/make any sense. Pursuing beneficial policies without pursuing electoral power is intellectual masturbation. But given human nature, you can’t balance these things—those pursuing raw power will always overwhelm those worried about the “public interest” Narrow groups protecting their power base undermined the New Deal/Great Society coalition; corporatists obviously get 98% of the benefit within today’s GOP. You can’t discuss tax (or any other) policy without coming back to the political power dynamics, and that means focusing on the most powerful, best-organized economic interests.
Mettler’s problem is that she frames tax policy in a simplistic “conservatives who think government is bad versus liberals who think government is useful and honorable” frame and then proposes a purely technocratic solution (more transparency), which brings us back to the historical “neoliberal” problem. Early conservative thinkers (Kirk, Buckley, Friedman, et al) weren’t on a “government is evil” crusade, but wanted to shift the balance to favor market (over bureaucratic) power in purely economic spheres and to limit the scope of government action (in favor of individual freedom) in purely personal spheres. People like Andrew Sullivan still reflect this non-rabid approach to conservatism. “Neo-liberalism” was originally the “Democratic” wing of the 70s/80s “law and economics” movement and married liberal objectives with a recognition that market economics were much more important than 1960s conventional left-wing wisdom allowed and the pragmatic view that many New Deal-era economic structures (urban machines, regulatory agencies, big unions) has ossified and become unpopular. Airline Deregulation was driven by Democrats like Fred Kahn, Steve Breyer and Ted Kennedy, marrying popular outcome (massive consumer benefits) with a “public interest” view of dynamic market competition. People like Paul Krugman still reflect this progressive approach to economic policy.
What happened of course, is that real-world politics were completely captured by economic interests who had focused on the raw power dynamics. Democrats are controlled by latter-day “neo-liberals” who are totally comfortable in the Goldman Sachs board room, totally focused on rigging markets to support rent-extraction, and couldn’t give a rat’s ass about real competition or consumer welfare, much less safety nets. Republicans are of course controlled by interests even more radically opposed to free markets or personal liberty. Mettler’s article (and much of the internet “neo-liberal” discussion) overemphasizes the 70s/80s intellectual shift and largely ignores the raw interest/power shifts of the 90s/00s. We now have two political parties dedicated to undermining both markets and laws in order to further the interests of a narrow group of rent-extracting industries and very rich individuals, and both parties want to massively reduce benefits available to the other 95% of the population in order to sustain rent-extraction and low taxes on the rich. All US political debate is between the Republican view that the only way to prevent the 95% from rebelling is to completely crush them politically, and destroy all electoral/judicial avenues for redress, and the Democratic view that rebellion is best forestalled by actively maintaining a Potemkin Village appearance that traditional social programs and electoral/judicial processes are still in place.
Quoting Wendy Brown (Peter Frase’s recommended source on neoliberalism), “the significant features of constitutional and representative democracy have been gutted, jettisoned, or end-run, even as they continue to be promulgated ideologically, serving as a foil and a shield for their undoing (and for the doing of death) elsewhere”. Unfortunately Brown’s paper also completely misses the real history of the shifts that created this situation, and thus her specific critique of “neo-liberalism” is seriously flawed. But given this reality, Mettler’s proposal for greater transparency about the motives of tax policy is clearly just pissing into the wind.

This is a very interesting point and one that I agree with (see, e.g., my posts on Mettler) but I question how tightly this tracks divides between neoliberals and people with more leftwing views. If anything the paradigmatic neoliberal proposal is “how about instead of doing that, we do an explicit tax-and-transfer scheme” as against various ideas to try to establish covert transfers via labor market regulation.

One thing that concerns me a little bit about the discussion is that talk of unions seems to focus purely on their political value in defending a left-wing policy regime. Obviously, that’s a big part of the appeal, and a necessary one, as even a truly robust system of private unions can’t do enough to remove the necessity for a social welfare state. However, it’s imperative to point out that unions also directly provide for working class standards of living by using labor organization to secure higher wages, safer and cleaner working conditions, and the other working conditions we generally associate with a quality workplace.

Matt – I think of this as involving second bests. I am sure that many neo-liberals would prefer explicit tax and transfer schemes in a first best world. So, I think, would many (not all) lefties (so I don’t think that your proposed division maps very well onto the real world division either) – there is a perfectly reasonable left wing case to be made in principle for allowing free markets to go at it, and then to tax as necessary to redress inequalities. The problem though is that we are not in the world where tax and transfer schemes like this are likely to happen on a large scale. Cosma has just put up a post which says everything I wanted to say rather better than I myself was capable of saying it. As he puts it:

bq. “When you tell us that (1) the important thing is to maximize economic growth, and never mind the distributional consequences because (2) we can always redistribute through progressive taxation and welfare payments, you are assuming a miracle in step 2. For where is the political power to enact that taxation and redistribution, and keep it going, going to come from? A sense of noblesse oblige is too much to hope for (especially given how many of our rich people have taken lots of economics courses), and, for better or worse, voluntary concessions will no longer come from fear of revolution.

A better distinction, I think, than yours is to say that left-leaning neo-liberals are those people who go on assuming that the miracle will happen in step 2, and that they are living in the first best world where the wisdom of policies necessarily translates into their political efficacy (or if it doesn’t, it suggests that there is something wicked that has happened to to a world that ought otherwise behave just as paternalist technocrats should will it). If it weren’t that the phrase ‘underpant gnomes theories of social democracy’ had already been used up, I’d apply it here ;) Others, including the people with more leftwing views that you talk about, start thinking about how to work policies and politics together so as to achieve fairer outcomes – and this is where the whole ‘theory of politics’ thing comes in. I’d quite like to see a left neo-liberal theory of politics, if only because I’d sometimes like to live in a world where decisions were made on the basis of their policy efficacy rather than their political appeal (nb the word _sometimes_ though – I think that political contention can also have some heuristically valuable consequences, as well as the normative good stuff of creating an engaged citizenry etc). And I think that there are at least gestures that could be made in the direction of a more politically effective left neo-liberalism. But I don’t see an easy way towards a US in which explicit tax and transfer schemes to remedy structural inequality are going to be very easily achievable (at the most, we could have what Mettler would like if I read her right – a world in which the actual transfers that occur through the submerged state are less grossly inequitable than they are as they stand).

Obscuring works in both directions. In a single-payer system like Canada’s, where health care expenses are paid for from general tax revenues, individual taxpayers don’t know how much they’re in fact paying for their medical care. Since the system is strongly redistributive, most better-off taxpayers are paying considerably more than they would pay in a purely private system. But there’s no accounting that tells them that, and they therefore don’t know it.

Isn’t it well known that universal social programs are more politically sustainable than means-tested ones, because they have wider-spread support? It seems to me that much of that support depends on better-off taxpayers’ not knowing how much they’re paying for the programs and therefore seeing only the benefits and services they receive.

I don’t mind that at all; it seems a place where a little obscurity is a good thing. But it suggests that more transparency in social policy wouldn’t always have left wing consequences, and maybe that’s partly what Henry has in mind when he says some libertarians might place the opposite bet.

Wouldn’t Mettler’s argument apply against Social Security and Medicare as well–whose status as part of the American welfare state some citizens have indeed been conveniently forgetful? If so, is it really an argument against neo-liberalism in particular?

I think “collective” is a significantly underspecified term. I’m making up a terminology in the rest of this post, so if there’s an existing one I’d like to hear it.

One kind of collective goods is what I’ll call “club goods.” The group that’s “in it together” benefits collectively, and their contributions may be very different. This is currently typical of a lot of non-profit groups (symphonies, universities, churches); the average beneficiary contributes some, but a few beneficiaries contribute a lot–and it’s perceived by everyone as solidarity, not patronage. Critically, this kind of good is excludable. This used to be a common way of arranging public life; you had neighborhood parks that the neighborhood could exclude people from, libraries and schools and pools and on and on and on.

The other kind I’ll call publicly available goods. These are provided by the government, and you can’t exclude people from them. This is what has changed public spaces the last 50 years; the long war to tear down racist exclusion tore down the whole idea of club goods as part of the government’s function. So libraries and public parks have a significant number of homeless people, and there are no neighborhood parks and pools and schools, and so on.

I think a lot of the leftist project is trying to figure out how to get the collective spirit that’s associated with club goods for publicly available goods. I think more transparency will not help. (I’m definitely in the category of libertarians who would happily take the bet that transparency will not increase people’s desire for a larger government.)

LFC — I disagree to some extent. I think there’s a crucial Mettler-esque misconception about SS and Medicare, regarding how much an individual pays into it versus what they get out of it. Witness “You can’t reform Medicare because we’ve paid into it all our lives”.

Not that this is always (or even usually) a bad thing.

Here’s an earlier blog post that discusses the conservative origins of the tax subsidies strategy in relation to Mettler’s original article:

http://rortybomb.wordpress.com/2011/06/30/the-hidden-welfare-state-and-private-sector-spending-coalitions/

if we look at where the spending on protection is concentrated and is most difficult to uproot, it plausibly confirms rather than refutes the argument. Large scale programs such as Social Security and Medicare prosper because they are linked to large interest groups (the AARP), which organize large segments of the population against change and push for expansion when they can (and protection, or damage limitation when they can’t). Programs which do not have such organized support, whether potential or actual, do not tend to do so well

Couldn’t that also be confirming that it’s hard to uproot spending for very popular programs–whether they’re obscured or not? I doubt the mortgage-interest deduction is going anywhere.

Henry: “But the turn towards submerged state measures as the “policy tool of choice” has pernicious broader consequences. It means that people fail to understand the ways in which they actually benefit from government….”

The ways in which people actually benefit from government is not a discussion in politics, it is a theory in economics. You need the correct theory of economics. It isn’t taught. You have to teach that institutions reduce costs; that this cost-reduction may not be monetized but it still improves quality of life; and that markets don’t suffice.

Showing people how they benefit from gov’t, as Mettler asks for, is going in the right direction, but it won’t do the whole trick because people can be led to believe that markets can provide it better. So then you are off into the rhetoric of market failure, on the negative side, and the rhetoric of quality of life indicators, on the positive side. These are valid, but it is a very roundabout argument.

Now the problem with the correct theory of economics is that economics to-date is a half-witted discipline — technically half-witted. They don’t teach half of their subject matter because it is not about markets. So it is going to be necessary to demonstrate how innovations and institutions are formally similar.

After that, it is clear sailing to a good theory of politics. The key is that an institution is not a legal entity, it is a little prior to that. An institution is a set of stable preferences, set-up with a two-way transaction of expectations vs. responsibilities.

So your politics is to set-up strong, stable preferences. Everything flows from that. This is why the Tea Party is spitting angry at the healthcare reform. Some of them can barely articulate it, but the essence is: it sets up the preference for universal coverage. They know that makes it inevitable.

You can think of it as feedback loops, but that displaces the primary mechanism of political change, preferences.

Republican strategists appeared (until recently) to have a slightly better understanding of this, I think: that the real game is to create and inform preferences. What your whole town believes is much more important than what a single interest group believes. The Democratic strategists on the other hand remain clueless.

Thankfully the Republicans have, however, fallen into an historical cul-de-sac, because (1) their ideology (Reaganomics) is unscientific, and so it has finally begun to contradict obvious reality; at the same time as (2) they sold it to the Tea Party, who really believe it, and are the Republicans’ most reliable voting bloc. Thus any sane politics would exploit this historical contradiction among the opponents in as many ways as possible, to hasten their doom.

Your politics should be to grasp whatever is going on in Washington right now, and argue that it ought to happen in certain ways so that at least it creates preferences and expectations for the future. This is why the Tea Party is so spitting angry against tax increases in the debt-ceiling package. It is absolutely necessary to make the case to President Obama that he stick to his guns on this. If the House and Senate both send him a bill without increases in revenue, he should veto the bill and do the 14th amendment. Let’s make them hopping mad, and let’s ride it into the next election. No time like the present, to change preferences.

Underpants gnomes at the so-called neoliberal point wrt to redistribution?

or

Underpants gnomes at the so-called progressive point wrt to organization?

Organization has happened and has had results in the past. Redistribution without powerful organized constituencies behind it has NEVER happened, and never will. “Power concedes nothing without a demand.”

Economics, and thus most neo-liberal approaches to policy, axiomatically take preferences (“this is the one we want, this is the one we don’t want”) as a given input, and then determines the least-cost way of achieving some objective. From there, one can determine who wins, who loses, and by how much per person and in the aggregate. But what economics can’t answer is: what is the benefit or cost of changing people’s preferences? As an economist, I don’t think I would have a framework for answering that question. It’s like asking “what’s the square root of red?” And it seems like the criticism of left-neoliberalism hinges a lot on the point that policy decisions do in fact change people’s preferences.

So perhaps it’s not surprising that neoliberalism lacks a “Theory of Politics” insofar as it relates to the way politics changes people’s preferences – the benefits and costs of changing preferences is simply not something that economics is equipped to measure. I’ve long been aware of this short-coming but I’m not sure others in the profession are.

Leaving aside how doubtful Mettler’s central thesis is, as a practical matter the strategy of “surfacing the submerged state” (to complete the metaphor) is a little crazy.

You’d want the left to:

(1) End some of the most popular “government programs” we have;
(2) Promise to replace them with huge government programs to explicitly effect transfer payments.

The justification given will be to “make Americans more aware and appreciative” of government.

At least neoliberals get some of their policies enacted. If “surfacing” is the new strategy of the left, then I think they’d be better off donating their political funds to other charities. Or taking up a hobby. Or doing anything other than chopping off their legs in order to win the race.

Andrew F-

Tell me how Obama’s hidden tax refunds were better for liberal politics than Bush’s high profile ones were for conservative politics.

Steve LaBonne, your comment was actually interesting to me. Loopy, but interesting. Seriously, though, apply this sort of reasoning behind EITC or somesuch…

Again, the only times political systems *ever* bargain in good faith with non-elite constituencies is when they explicitly need them for some reason, like in a war. Otherwise, it’s usually adopted in a spirit of paternalistic energy, with an eye out for relieving business of traditional social burdens. There’s a reason Bismark created the first national welfare state (besides creating a reason for people to be loyal to the hub of a new Empire).

I still see the first challenge to creating alternatives to the current means of introducing changes to the left as being about organization. Internal political police action is pretty aggressive here, compared to other places in the West.

“What Mettler is interested in is better policy – but she is also willing to make a bet that better policy can generate its own support.”

Henry, come on — you’re completely contradicting yourself here, at least insofar as you’re setting Mettler up in opposition to neoliberals. Your whole critique of neoliberalism’s theory of politics (or lack thereof, in your mind) was that neoliberals fantastically believed that good policy could earn public support because it’s good policy. Indeed, Cosma, in the post you so approvingly quote, writes that without strong collective institutions, you can’t expect good policies to be enacted, because rich people have all the real power and will not use it for noble ends. Yet here you approvingly cite Mettler to the effect that “better policy can generate its own support,” which seems very much like a concept neoliberals (at least your version of them) would support.

I’ll add also, as a corollary to this, that Cosma’s theory leaves us mystified at the fact that things like the EITC, the recent expansion of the minimum wage, and the ACA have all become law even in the absence of strong unions, etc., or that TARP (to bring up that hobbyhorse again) failed the first time around, or that Social Security remains as intact as ever while Medicare has been vastly expanded (via the prescription-drug benefit and the ACA’s closing of the doughnut hole) in the past decade. As Matt says, transfers have been rising, not falling, over the same period in which leftish collective institutions have been declining.

shah8-

What on earth are you talking about? The vast majority of Americans believes that Obama has raised their taxes. As a result, far more were open to the arguments of the Tea Party, which has resulted in the biggest Congressional landslide in history and may result in the worst economic disaster of American history. The extent to which Obama’s hidden refunds were more efficacious than Bush’s is at the second decimal place of the multiplier of tax rebates; do you seriously claim that an extra $20B (to be extremely generous) in a multitrillion dollar economy has enough effect on peoples’ perceived wellbeing to offset a belief that their taxes have been raised in a recession?

This is a perfect crystalization of the delusions of neoliberal technocrats: an imperceptible improvement in the workings of policy does more political good than any amount of tangible benefits.

A politician knows that delivering an actual $5 chicken to every household in his ward will deliver votes on Election Day; a neoliberal technocrat wants to put an extra dollar in the voters’ paychecks every month for half a year, arguing that the 20% increase in benefits will lead to even more votes. Delusional.

Henry @38—
Again, this extended discussion keeps getting the history and meaning of “neoliberalism” wrong. Neoliberals are not those who want to “allow markets free rein”. No major policy maker described as “neoliberal” fit that description. The original “neoliberals” of the 70s/80s wanted a much stronger mix of “market-type” solutions to policy issues, but were never extreme market fundamentalists. “Neoliberals” were not responsible for the later attempt to not only cripple every New Deal-era social program, but to undermine all the historical advantages of dynamic competitive markets for the private gain of rent-seeking industries, and to gut all of the historic regulatory/judicial/electoral protections against abuses by highly concentrated economic power. Folks like Summers and the Clintons get called “neoliberals”, and they deserve to be attacked for lots of things, but they were not the ones driving the “markets are always right and can solve every policy problem” train that Metter is trying to slow down. And it gets downright silly when the Brad deLongs of the world are lumped in as part of the “neoliberal” problem. As many have noted, purely academic/technocratic solutions that totally ignore partisan and interest group power dynamics are a waste, but Mettler is more guilty of this than deLong or Yglesias. You’ve still never properly explained exactly who the problematic “neoliberals” are, or explained why they should be blamed for gutting social welfare programs, competitive markets and legal/electoral protections instead of the rent-seeking industries and wealthy individuals who have actually been driving Washington.
Henry @48/55—
You quote Mettler’s observation that people seem to change their opinions of programs (like mortgage subsidies) once they “understand what is at stake” This ignores all the evidence suggesting that people have have long had very favorable views of mortgage subsidies because powerful, well-organized economic interests spent huge sums to create the original false views—that subsidies that actually benefit the very wealthy and narrow industry groups actually create huge benefits for the middle-class and economic growth as a whole. And it ignores that opinions only seem to change when left-leaning academics can explain “what is really at stake” in carefully controlled settings. The problem is rent-seeking industries seeking to capture billions and a political establishment that no longer serves any function except to facilitate rent-capture by these industries. The explanations of mortgage and all the other subsidies have been out there for years and are meaningless unless you have a political program that can sustainably attack the powerful interests. As Yglesias pointed out the other day, those interests spent decades tirelessly working to develop this political power, and it will likely take decades to counter them. Pushing Mettler’s naïve “lets recast all these popular programs that have powerful vested interests behind them, and do it in a way that the general public won’t like and the vested interests will immediately attack” seems to be missing the point.

There’s a reason Bismark created the first national welfare state (besides creating a reason for people to be loyal to the hub of a new Empire).

Yes indeed, but not the ridiculous “paternalistic” reason that you adduced. It was because he was worried about eh ORGANIZED Soc1alists and wanted to coopt some of their potential support. But thanks for pointing out one of the better examples of what I was talking about.

As precarious as the early assembly was, I seriously doubt Bismark had any fear of the socialists as actual organized political entities rather than simply a group that hopes to repeat 1848 and perhaps overthrow the government.

That’s quite a remarkable distinction you’re trying to make there, between being “organized” and being “a group that hopes to overthrow the government”, which, one would think, requires a certain degree of organization. Remarkable, as in remarkably incoherent. Also, yes he was also worried about Catholic support for the Center Party- another ORGANIZED group. But then, I can detect no content in any of your recent comments other than “shah8 occupies the sensible center and everybody else is wrong”, and you seem to think that this absolves you from the need to know what you’re talking about or to make any kind of sense. I can see that it would be a waste of time to respond to you in the future.

Shah 8

Bismarck – and his successors (Caprivi, Bethmann-Hollweg) were VERY conscious of the threat posed to the regime by the Socialists. Almost hysterically so. They were members of an elite (mostly landed, although part industrial) that regarded any form of urban working class politics as akin to treason, and saw themselves as isolated and under constant serious threat (the French and British having already succumbed, the Austrians being an unreliable rabble and the Slavs barbarians). The whole politics of Wilhelmine Germany revolved around finding new ways to keep the Socialists out – war being one oft-considered option. See, eg Berghahn, or most other historians of the period.

What this says about current US politics I don’t know, but it is a useful reminder that elites too can be seriously deluded.

Who questioned absolute control of the military by the Kaiser, that is.

The first mistake that liberals make is not calling the right-wing frauds on their fraud.

They do, but real liberals not Serious people and their voices aren’t amplified by the MSM megaphone. Krugman is pretty much the only one whose voice gets through, which makes it easy for the Serious to treat him as a lone oddity. Most “liberal” politicians, on the other hand, are fakes who have long since been co-opted by the Serious establishment. For example look at what a complete ass Durbin, who used to be a pretty good guy, has been for quite a while now.

Henry @55: Mettler’s argument is…an informational one – that if the public is provided with better information about the distributive consequences of bad policies, it will be much less supportive of them.

This is an awfully expensive, roundabout way to educate voters.

And the idea that voters will be better educated about the distributive effects of explicit transfer programs than they are about tax deductions and credits doesn’t strike me as persuasive on its face.

Also… the critique of neoliberalism put forth is that neoliberals are naive about politics. They advocate policies on strong grounds, but they fail to be realistic about the political effects of those policies, and how those political effects will affect future policies.

But Mettler’s idea is, well, politically stupid. People who put her policy ideas in place have to be elected; and they’re going to care about being re-elected. I can’t think of any scenario where reducing tax deductions for popular programs – and we have to reduce the deductions for popular programs for her idea to make an impact on “the American’s” appreciation for government – and enacting a huge explicit transfer program is going to result in a political win.

Ironically, the major problem with Mettler’s proposal IS the politics.