Policy and Incentives

The United States' Federal Budget has many problems. They are compounded by Republican party's a priori allergy towards taxes, irrespective of context. On that note, Ezra Klein talks some sense about budget policy, and the radicalism of the current state of the Republican party's fiscal proposals:

You can’t look at that and say revenues have nothing to do with our current deficits.

Which isn’t to say it’s not difficult for elected Republicans to admit that taxes need to rise. The Club for Growth might primary you. Grover Norquist will come after you. But being responsible is difficult. No Democrat who says Medicare and Medicaid and Social Security can’t be cut can be considered fiscally responsible. And no Republican who pledges to oppose all tax increases, regardless of circumstances, can be considered fiscally responsible. There’s no curve here. There’s only math. And politicians who want to be applauded as “responsible” can’t be permitted to ignore it. (emphasis mine - JMG)

The kind of policy "flat-earthism" that Klein is talking about permeates the the Republican party so much right now because the party's constituents are demanding it. I think this is the real tragedy of the Republican party these days. Perhaps even a tragedy of our politics in general.

Ideally, elected representatives and they constituents they represent would work in concert. People have policy preferences and vote accordingly. In turn, paid representatives of the state have a responsibility to the people they represent, to be clear about the realities of the state's finances. To me the problem is coming from both ends; GOP voters want to hear strident re-confirmations of preconceived conclusions about spending and taxes. Republican officials are not responsibly trying to cultivate a discussion of what are budget problems are, and what possible solutions might be.

Intellectual curiosity is a tricky thing. But without it, I think, we are worse off as a nation.

Culturally-Identified Ideology is Unconcerned with Policy

Newt Gingrich, correctly, remarks that voters are probably uninterested in the alleged $1.6 million he was paid by the mortgage broker Freddie Mac; the very same Freddie Mac he excoriated as a key driver of 2008's financial collapse. I believe he is correct.

Specifically, the optics of Gingrich earning such vast sums of money from a right-wing boogyman is more much damaging to his candidacy than the actual policy ramifications of it. Median voters, and I think the especially Republican primary voters, are much more concerned with cultural indicators than they are with policy outcomes. The fact that Mr. Gingrich admits as much is the real surprise.

I wanted to highlight this because it is one of those moments where Gingrich's mask slips. Per Wikipedia, Mr. Gingrich has "served as the 58th Speaker of the United States House of Representatives from 1995 to 1999 and before that, as House Minority Whip. He represented Georgia's 6th congressional district as a Republican member from 1979 […]" After twenty years of holding a national-level public office, and even more as a public figure, I am sure Gingrich knows the fact that voters―especially Republican primary voters―are less concerned with policy ramifications of candidates than they are with the cultural and political signals the candidates transmit. This is how a thrice-divorced Gingrich is able to be taken seriously in a primary process of a party ostensibly dominated by "family values."

Update: From Dave Weigel, a reminder on just what kind of snakeoil Gingrich is selling:

It's true to say that Gingrich never "lobbied" for the bill. Lobbying is a distinctive career; you have to register to conduct it. Gingrich merely used his status as a conservative icon, with close ties to many House members and a well of respect with others, to advocate for policies.

The Debt Limit Showdown and Party Incentives

National Journal has an interesting piece up today about how the House Republican leadership is trying to warm it's freshman members to the (hopefully) eventual debt limit increase. Specifically,

"[John] Boehner has been "aggressive," in one aide's words, in articulating the need to reach a deal."

I would argue this is a reasonably optimistic development for what has been a very worrisome episode in American democracy.

Party incentives drive policy enactments, for the most part. Up until now, it seemed like the House GOP's incentives were being solely driven by the Tea Party, the ostensible drivers of their 2010 Midterm electoral success. The interest group consistently engages in a kind of economic "earth-is-flastism" by denying that a credit national default would have adverse effects. For example, the Tea Party Patriots co-founder Jenny Beth Martin told CNN that the issue was simple to solve by litteraly using the phrase: "It's that simple." This type of oversimplification of a complex and urgent issue is worrisome to the extent of the damage that a default would have on our nascent economic recovery. This all makes sense as structurally, economic issues are hard to explain; and except in the case of the shortest of slogans, even harder to use as a tool of political motivational.

So, no one should be surprised that these type of statements play well with the median, non-engaged constituent, especially in the populist context of the Tea Party demographic.

What is surprising, is the fact that the Republican party's indulgence in this kind of rhetoric as their preferred economic policy, rather than just political sloganeering. To legitimately engage the notion of not raising the debt ceiling is to court an actual default of the US government. It's one thing for base activists to push for economic nonsense that jeopardizes our country. It's quite another thing for professional politicians and major party leadership do the same thing.

That's why this National Journal piece is significant. It's showing us that the basic framework of our incentive system hasn't been placed so out of wack the the House GOP would pursue the political advantage of a government default. The Tea Party may try an exert more pressure to prevent a debt limit increase, but they're only one pressure group out of thousands. As others make the (correct) point that a debt default would be bad both substantiatively as well as politically, Boehner, Cantor, McCarty and others in the House majority leadership begin to pressure their caucus members to step away from the brink.