Saturday, May 12, 2012

Books I Like - Demosclerosis

Demoscleroris: The Silent Killer of American Government by Jonathan Rauch.

The best description of the governance woes besetting us today at the national level can be found in this 1994 book.  Rauch is a writer for the National Journal and Atlantic Monthly and politically not easily classifiable.  The book is an essential read if you are interested in public policy and governance.

Rauch's thesis is that you can't reduce the influence of the "special interests" until you "unriddle the paradoxes of a political malady whose perverse dynamics" undermine government - which is that the growth of government has made us all "special interests"; the problem is us.

In Rauch's words:

"Why are many liberals and Democrats, with their greater proclivity to use government to right wrongs and correct flaws, paralyzing the very government that they believe they are championing?"

And (I'll add), why have so many Republicans ended up as accomplices in this process?

Rauch rejects the "gridlock"metaphor since it implies, incorrectly, that nothing is getting done.  A lot is getting done, just not very effectively and in ways that create more problems than it solves.

He also makes a convincing case that the "American system of governance today is much less at the mercy of any narrow, manipulative few than at any time in the past".  In the robber baron era it was a few individuals who had influence.  Today, in addition to business and self described "public interest" groups it is the aggregated millions of us via AARP, NRA etc who are the special interests.  Why, because politics today is about everything.  We're either protecting what we see as our entitlement from government (social security, agricultural subsidies) or protecting ourselves from the encroachments of government.  Today, virtually every aspect of our lives has the potential to be in play politically so we are compelled to become "special interests".

To quote Rauch:

"Government's power to solve problems comes from its ability to reassign resources, whether by taxing, spending, regulating, or simply passing laws.  But that very ability energizes countless investors and entrepreneurs and ordinary Americans to go diffing for gold by lobbying governments.  In time, a whole industry . . . emerges and then assumes a life of its own. . . . As it grows, the steady accumulation of subsidies and benefits, each defended in perpetuity by a professional interest group, calcifies government.  Government loses its capacity to experiment and so becomes more and more prone to failure.  That is demoscelerosis: postwar government's progressive loss of the ability to adapt."
"Today it appears that democracy's truer vulnerability lies closer to home - in the democratic public's tendency to form ever more groups clamoring for ever more goodies and perks and then defending them to the death.  Free and stable societies, it seems, tend to drift toward economic cannibalism and governmental calcification, unless they make a positive effort to fight the current."
As an example, let's take those agricultural subsidies (please!).  Today, both liberals and free marketeers oppose these yet they persist, protected on a bipartisan basis by legislators from key states.  These subsidies started as one of the key components of the liberal New Deal.  The theory at the time was that the subsidies and crop control programs were needed to boost crop prices - imagine today a liberal program devoted to raising food prices for children!   The continued political power of this program was demonstrated in 2001 when Senator Jim Jeffords (VT) switched from the Republican to Democratic parties, giving the Democrats control of the Senate over the issue of increasing milk prices for children. After ducking for years on the subsidy issue the Republicans finally in 2001 began to move on curbing price supports which prompted his switch (not surprisingly, The New York Times which condemned Republicans for caving to the ag lobby the last time the subsidies were up for renewal in 1999, praised Jeffords for his party switch in 2001).

Now did Sen. Jeffords really want to increase milk prices for children?  No, but this 1937 program had created a strong and powerful lobby - one that did not exist until the subsidies began - and that even six decades later, in a much more prosperous America, retained enough clout to make the senator jump as high as they wanted.

So a policy, based on an antiquated 80 year old economic theory, has been "calcified" into our laws.  And, as a side note, it's led to three of the worst Supreme Court decisions of the 20th century - Nebbia (1934), Carolene Products (1938) and Wickard v Fillburn (1942) in which the Court upheld laws preserving agricultural monopolies in the interest of maintaining higher consumer prices, mutilating constitutionally protected liberties in the process.

What happened with agricultural subsidies has been repeated over and over again. We have a blossoming of lobbies and interest groups, created by government policies which in turn make it difficult for government to change course.

While Rauch does not explicitly mention it, public choice theory provides a further explanation of part of this syndrome.  Public choice theory explains why policies which, in general, might be opposed by voters nonetheless persist.  For example, the benefits of a subsidy may provide substantial benefit to a particular interest but the cost to the general public is relatively small on an individual basis.  To put it another way, the  benefits are high to a narrow group and the costs are dispersed widely and unnoticeable to the individual.  It also means those with potential benefits can have more focused and powerful leverage on government officials.

For the broader entitlements, social security and medicare, they've become nearly impossible to trim or  reform because no matter how dissatisfied citizens are with the current situation they fear losing what they have and they feel, well, entitled to those benefits.

Here's the phenomenon in real-time: student loans with both parties pandering.

This only gives you a flavor for Rauch's argument.  It's worth reading the entire book to appreciate the depth of his analysis.

We have failed to understand the basics of governance.  For conservatives it makes it nearly impossible to undo anything and for progressives it ends up severely limiting what they can effectively do since the whole system is so clogged up and there is no excess capacity financially.  The tangled, overgrown thicket of government programs is choking the government and us.  And for those of you who would like to see less money in politics, well the only way to do that is to make politics about less.  Anything other than that is just about pushing the money from one pocket to another - it'll still get spent.

Let's close this by going to the silliest video of 2011 done by Rachel Maddow & Spike Lee on National Projects in which they promote big federal projects like - I am not joking - Hoover Dam!  Rachel, Spike - this is not the 1930s when the government could just do things (and before it was encumbered by enormous debt and future unfunded obligations).  You can't build these things any longer because of the policies advocated for, and put in place by, your ideological predecessors - you have met the enemy and it's you.  See, for instance, this lawsuit against the largest proposed solar farm in California by the Sierra Club and two other special interest groups.  It's surprising to see this inability to connect cause and effect but it also shows up in the belated surprise of some, including the President, that there weren't really a lot of "shovel ready" projects in 2009 and 2010. There may be sound policy arguments for some of the laws and regulations that created this situation but it seems those advocating for each incremental policy view them as individual actions without any attempt to understand how they fit into the existing system of governance.

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