Friday, 26 April 2013

You go to the sequester with the Democratic Party you have

Ezra Klein has a good piece on the decision by the Democratic party to allow a bill that would ease the pain of sequestration for the FAA:
Recall the Democrats’ original theory of the case: Sequestration was supposed to be so threatening that Republicans would agree to a budget deal that included tax increases rather than permit it to happen. That theory was wrong. The follow-up theory was that the actual pain caused by sequestration would be so great that it would, in a matter of months, push the two sides to agree to a deal. Democrats just proved that theory wrong, too.
...
It is worth noting how different the Democrats’ approach to sequestration has been to the GOP’s approach to, well, everything. Over the past five years, Republicans have repeatedly accepted short-term political pain to win the leverage necessary for long-term policy gain. That’s the governing political principle behind their threats to shut down the government, breach the debt ceiling, and, for that matter, accept sequestration. Today, Democrats showed they’re not willing to accept even a bit of short-term pain for leverage on sequestration. They played a game of chicken with the Republicans, and they lost. Badly.
For the most part, I agree with this analysis. But its worth pointing out that the different tactics adopted by the Democrat and Republican parties reflect different underlying philosophies of government, and longer term strategic aims.

The basic philosophy of the Democratic party is that capitalism basically works but under-produces public goods, over-produces negative externalities, can become unstable if not properly regulated, and can lead to gross inequality. Their governing philosophy is that government can effectively overcome these problems through a combination of regulation, the pricing of externalities, the subsidization of public goods, and the provision of a progressive social safety net.

The Republican party has a political philosophy that is less concerned about the weaknesses of capitalism. But more importantly, they also believe that government is incapable of solving these problems effectively. And this is what they focus on politically. Republicans seek to demonstrate that government is wasteful, corrupt, and ineffective at solving problems, and so the less government the better. This is a good strategy because Americans are generally more skeptical of government than other wealthy, democratic countries.

With this is mind, it is easy to see why the Democrats aren't going to be very good at the type of political chicken the Republicans have mastered. By allowing FAA delays to continue, the Democrats help the Republicans (albeit, in a small way) make the case that government is incompetent and doesn't work. Now I don't want to let the Democrats off the hook. It strikes me that it was probably worth it to hold the line in this particular case, as Klein notes:
The result is that sequestration is no longer particularly politically threatening, but it’s even more unbalanced: Cuts to programs used by the politically powerful will be addressed, but cuts to programs that affects the politically powerless will persist.
This is a really horrible outcome, and the most vulnerable in our society will suffer because of these cuts.

But a big lesson is that these types of standoffs are stacked against the Democratic party, and they should do everything to try to avoid them.

One could imagine an alternate universe with a more aggressively leftist Democratic party. This party could have been the one in summer 2011 that was refusing to raise the debt ceiling (and pay wealthy bondholders), unless the government increased stimulus spending. This would be a party willing to more aggressively harm the interests of the business class, in order to secure benefits for the poor. But that would be a different Democratic party than the one we have, and probably one less likely to secure large majorities.

Effective, non-corrupt governance is hard, and most places throughout history and the world have been/still are terrible at it. A few countries in the world, for a brief moment in time, have managed to build effective institutions and establish good norms of governance. The United States is one of them. The Democrats have shouldered the burden of continually demonstrating this. And as long as they do, they will always be the center-left technocrats who cave on these issues.

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