We all know the political dynamic. It’s been in place for decades. People vote for politicians who stick to their principles. John Kerry, like all Democrats, was a flip-flopper – when circumstances changed he thought about what just happened and sometimes changed his mind. George Bush would never do that – he stuck to his guns, as real leadership was knowing what you always knew, and not letting a swirl of new evidence move you from your original position in any way. The calculation was that people admire strength and conviction. And it wasn’t a bad calculation. Strong but Wrong always wins, because the first matters more than the second.
Yes, during every Republican administration in the last sixty years the national debt exploded, growth stalled and unemployment soared, and the government grew larger and less useful. And in every Democratic administration the opposite happened – Clinton left Bush a giant budget surplus, for example, from an economy that created twenty-five million new jobs. And Bush left office with the economy in shambles, the world’s financial systems in chaos with only a blind gift to the treasury of seven hundred billion dollars staving off global economic collapse, and more debt than America had ever run up before – and add the worst economic downturn since the Great Depression, with twenty-five million Americans newly out of work. But even so, Democrats could not escape the charge that everyone somehow knew was true – they were tax-and-spend idiots who knew nothing about business and never would, and everyone knows if you let them run things they’ll ruin the economy. People still believe that.
And there’s a reason they do – the idea the Democrats have no real principles beyond spending lots of money and expanding government. But the Republicans have a core set of principles that never change – the less government the better, taxes should never be increased, as when you cut taxes tax revenues magically increase because when people don’t pay much at all in taxes growth explodes, and anything the government does can be done better and cheaper and more effectively by private enterprise, as when you have to make money you do things right. So you privatize everything in sight. The market is the god here – the market is always right. If an activity cannot generate profit then reality has spoken – whatever that activity is shouldn’t be undertaken – there’s no point to it. And you should let the market, whatever it is, operate on its own – no regulation. Things will sort themselves out. What is good and useful will thrive, and the owners of whatever that process is will get really rich, and everyone will love their cheap and wonderful products. And so on and so forth – you can add what other details you like – the whole social safety net is evil as it destroys the free market by supporting those who are useless, or choose to be useless – the freeloaders. That’ll do too, but the point is that all this is a unified coherent political philosophy. They believe in Free-Market Capitalism.
And all the Democrats seem to offer is their usual diffuse what-works stuff, not bound to any ideology. Yeah, the ideologically pure stuff tends to produce inevitable disasters, and doing what works tends to work – that was the whole point. But when it works the charge is that yeah, that works, but you guys really don’t believe in anything. You tell the voters those Democrats are just tinkerers – they have no principles, you see – and you’re the serious folks who know things, the adults in the room. That seems to work like a charm. Strong but Wrong always wins.
The current example of this comes from Jonathan Cohn, who turns his attention to Detroit:
Will the voters ever give President Obama credit for rescuing the American auto industry? I have no idea. But it looks more and more like they should. On Thursday General Motors announced that, for the fifth consecutive quarter, it had made a profit. And not just a measly one, either. The $3.2 billion was higher than experts had predicted and more than three times the profit of the same quarter in 2010, when the company was still struggling to emerge from its bankruptcy. …
“Reducing excess capacity” is a Wall Street euphemism for eliminating jobs. A lot of people suffered, and still are suffering, because they lost their livelihoods. Still, if not for the Obama Administration’s intervention, the entire American auto industry might very well have collapsed and taken the Midwest with it. Instead, the industry is on the rebound, at least for now.
At Mother Jones, Kevin Drum comments:
Back in 2009, when the rescue of GM and Chrysler was up in the air, I remember that my main thought was, “I’m sure glad I don’t have to make this decision.” Philosophically, after all, a bankrupt company ought to be allowed to die. The government just shouldn’t be in the business of rescuing badly run industrial behemoths, especially in an industry with the kind of massive global excess capacity that the auto industry has.
At the same time, would you want to be the guy who lets GM shut down at the height of the biggest recession in fifty years, potentially losing a million jobs and sending the economy into an even bigger tailspin? Not really. It was just a classic rock and a hard place.
In the end, though, Obama almost certainly made the right call. We don’t know for sure what the impact of letting GM and Chrysler fail would have been, but it quite likely would have been grim. And in the end, despite the endless yowling about “Government Motors” and Obama’s “secret socialist agenda,” the fact is that his team rammed through a pretty good deal, GM has recovered, Obama was fastidious about letting GM’s managers run the company, and taxpayers will likely take only a modest loss. It’s not something anyone wants to repeat – and GM’s board better understand that it’s unlikely it ever will be – but under the circumstances it was the best we could do.
And Jon is right: voters ought to give Obama more credit for it than they have.
The Republicans will try to stop that from happening. It’s a matter of principle. The market should have decided things. And the only problem they will have is explaining why Obama was fastidious about letting GM’s managers run the company, not bureaucrats from Washington. And to that, Drum offers this:
Why? Because Barack Obama is actually a boring, gray-flannel-suit, garden variety American capitalist pig. Like just about everyone else in the country, he has no interest in controlling the means of production and wants only to regulate capitalism’s excesses, not replace it with socialism. But you knew that already.
Whatever works – not socialism – was what motivated the rescue here. This bothers the Republicans. An ideology wants to defeat another ideology, but in the face of simple pragmatism you can attack pragmatism itself if you must. So they do.
But ideological purity sometimes hits a wall in real time, not years later when it’s too late, as in the case of all the financial deregulation that started with the repeal of Glass-Steagall then accelerated with excluding derivatives trading from regulation and then dropping all pretense of enforcing securities laws. We hit the wall there in the last year of the Bush administration with near total economic collapse. We had to wait to see what would happen. And sometimes you really don’t want to wait. And thanks to Paul Ryan and his ideologically pure budget we don’t have to.
In this case the issue is Medicare, and the proposal in the Ryan budget to fix Medicare, to balance the budget, is a pure free-market proposal. And the whole thing is rather simple. Medicare was established because no healthcare insurer in his right mind would ever write a policy for anyone over sixty-five. Those are the people who get sick. You’re looking at pure loss. You cannot make money there. The actuarial tables show that. So the idea was the government would act as the insurer for those over sixty-five. You pay in during your working years – the line is right there on your pay stub – and at sixty-five Medicare covers things – not that well, but no one else would cover you at any price. It works well enough.
But the Ryan plan is a market plan. You’d now be covered for nothing at all – you wouldn’t be insured at all. Instead you’d be given a voucher each year to use to buy private health insurance on the open market. What you paid in over all the years would come back to you as a government check, each year, for you to go shopping for a policy. Yes, it would mean a lot of research and careful comparisons, or just trying to find a policy at all. But the theory is that with all that voucher money floating around, someone, somewhere, would start offering insurance to those over sixty-five, just to get their hands on some of that money. It’s a free-market thing. Of course to contain costs these vouchers never increase in value no matter what the cost-of-living figures do – so there’s less money available each year. That would force the hypothetical new healthcare insurers to be more and more efficient – a good thing, hypothetically. What’s not to like?
That depends on your love of free-market ideology, and it seems Paul Ryan’s proposal to transform Medicare didn’t last long:
Senior Republicans conceded Wednesday that a deal is unlikely on a contentious plan to overhaul Medicare and offered to open budget talks with the White House by focusing on areas where both parties can agree, such as cutting farm subsidies.
On the eve of debt-reduction talks led by Vice President Biden, House Majority Leader Eric Cantor (Va.) said Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nation’s finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama “excoriated us” for a proposal to privatize Medicare.
Kevin Drum doesn’t see it that way:
Um, yeah, it was Obama’s fire breathing stemwinders that turned the tide. It had nothing to do with the fact that constituents hated the idea and Republicans would have lost fifty seats in the next election if they’d stuck with it. Nothing at all.
It seems loose and diffuse whatever-works won the day here. Free-market theory is cool and all that, but enough with the ideological purity, guys – when you get sick that doesn’t help much. And as for Medicaid – the parallel program for the sick and poor where Ryan proposes the feds just send money in blocks to the states and let them figure it out – things get even hotter. And that too seems to have taken the Republicans by surprise. Jonathan Chait has an item, regarding Medicaid in this case, on the large contingent of conservatives who seem really outraged that Democrats accuse Paul Ryan and other Republicans of not wanting to fund healthcare for the poor and the vulnerable:
Who do they think is on Medicaid? Prosperous, healthy people?
No, Medicaid is a bare-bones program throwing a lifeline to people who are in bad shape. Cutting Medicaid may be the politically easiest way for Ryan to clear budget room to preserve Bush-era revenue levels, as Medicaid patients have little political clout. But it is, well, deeply immoral. I’m actually surprised that conservatives not only can’t seem to imagine (or care about) the consequences of such policies, but they can’t even imagine that people like Obama would actually feel moral outrage at their plan. They can’t imagine a liberal objection as representing anything other than an attempt to score political points. It’s bizarre. I mean, of course Obama finds it morally objectionable to take away medical care to people in nursing homes and children with special needs. That’s why he’s a Democrat.
And Kevin Drum adds this:
It’s not just conservatives, either. Media talking heads routinely stroke their chins and then, more in sorrow than in anger, accuse Democrats of “scare tactics” when they warn people about what Republican budget cuts will mean.
Is that a scare tactic? I suppose it is. But it’s also the truth. The truth is that Paul Ryan’s budget, like so many Republican proposals before it, would decimate Medicare, Medicaid, SCHIP, and dozens of other programs that benefit the elderly, the poor, and the disabled. Democrats think that’s a bad idea because we think those programs are good things. What’s more, we think it’s an immoral idea because that decimation would primarily serve the purpose of keeping tax rates low on corporations and the rich.
You may or may not agree about this, but either way it’s not really that hard to grasp what’s motivating liberals to feel the way they do.
But these guys voted to move the Ryan budget forward in the first place. What had always worked before – be strong and principled – really should have worked this time. And then it didn’t. And practically speaking, Matthew Yglesias wonders what they were thinking:
This all kind of raises the question, however, of why the Republican leadership pushed Paul Ryan’s Medicare privatization plan in the first place. Obviously the fact that they favor privatizing Medicare played some role in that. But conventional wisdom is that the smart time to push a major piece of politically controversial legislation is when you can pass it into law. That’s why Scott Walker and other conservative governors are being so aggressive this year, and it’s why Nancy Pelosi pushed tons of progressive bills through the 111th Congress. But right now anything the House passes still needs to go through a Democratic-controlled Senate and then Barack Obama’s desk. So what’s the point in asking vulnerable members of congress to vote for taking away seniors’ health care benefits?
That’s a good question, and linked to a long video discussion, Yglesias lays out the case for socialized medicine:
The basic point here is that government-provided health care is more cost-effective than private health care. That still leaves people with the option to consume additional health care with their out-of-pocket money, but the evidence from around the world is that people aren’t super inclined to do this. They do a bit. I don’t know of any developed country with zero private health care spending. But they don’t do very much of it. In America’s consumer-focused system, people seem to develop a voracious appetite for additional, often ineffective treatment. In the more statist UK system, people mostly take what they’re given and then spend their money on Indian food.
Things seem to be heading that way here. Whatever works is fine. The rest is just tiresome.
And House Ways and Means Committee Chairman David Camp effectively killed Medicare privatization, explaining that he doesn’t see the point of his committee wasting time on it if the proposal is just doing to die in the Senate anyway, and then moved into the other big issue:
Rep. Dave Camp (R-Mich.), chairman of the powerful House Ways and Means Committee, acknowledged Thursday that Republican plans to repeal President Barack Obama’s signature health care law were “dead.” Instead, Camp predicted, the GOP would turn its focus to overturning the most controversial portion of that legislation: the mandate requiring individuals to buy insurance.
“Obviously, I voted to repeal the bill and you pretty much know where I am on replacement because I put out a bill last year on that,” Camp said. “Is the repeal dead? I don’t think the Senate is going to do it, so I guess, yes.”
What? They’re giving up repealing what they call Obamacare?
Steve Benen fills in the details:
Camp added that he’d keep an eye on the courts – the Affordable Care Act is still the target of multiple, ongoing federal lawsuits – and might push for a vote to repeal the individual mandate “some time in this Congress.”
Of course, congressional Republicans have been talking about repealing the health care law since before it even became law. After the midterm elections, GOP officials said eliminating the entirety of the law was their top priority – more important than jobs, energy policy, or anything else – and immediately went to work on this goal.
Republicans didn’t have an alternative policy and didn’t care that polls shows Americans opposing a full repeal, but they nevertheless invested an enormous amount of time and energy into this. The result was predictable – the House GOP passed its measure; Republicans felt good about themselves for a couple of days; and the whole effort faded away.
It’s just occurring to these guys now that a Democratic Senate and Democratic White House aren’t going to accept this, so it’s time to give up?
Ideologically pure principles are one thing, and reality is another. The public opposes them on Medicare and a Democratic Senate and Democratic White House opposes them generally, and now it seems the whole strategy – strong trumps what most say is wrong – isn’t working any longer. Could it be that people are now deciding that they’re fine with whatever works? That could be the end of the Republican Party as we have known it for many years.
Here’s hoping. It was tiresome.