An Effective Rebuttal
When I read Greg Anrig's recent Washington Post column, "McCain's Problem Isn't His Tactics. It's GOP Ideas," (via Brad DeLong) I thought he was speculating a bit wildly based on the 2006 midterm elections and the current race for President.
An e-mail from Bruce Bartlett directs us to this post by Warren Coats, who gets the rebuttal exactly right in my view. Here are two passages that particularly resonated with me:
I am a Barry Goldwater Republican. I believe that we and our families and friends are largely responsible for our own well being, that government should be kept small and focused on what only it can do well, that free markets are the most effective way to create and allocate wealth, that the individual freedoms, checks and balances on government, and separation of church and state in our constitution and its Bill of Rights provide the best environment for my personal moral and material development and in which I can live in harmony with my neighbors, and that if I work hard (which almost always means serving the needs of others) I have the best chance of doing well for myself and family. I believe in a strong national defense (but not empire building) and international collaboration and cooperation in today’s globalized world. In order to keep them relatively honest, governments operate under significant disadvantages relative to private enterprises with free trade, but there are some things that only government can do or do best and therefore they should be done well.
[...]
As public sentiment swings back to the left what the public wants (domestically), I think, are largely free but better regulated markets and a better social safety net (health care and pensions). Those like me who think that too much regulation stifles beneficial market innovation and worry about the work incentive stiffing effects of excessive or poorly designed safety nets need to take note of these sentiments. The freedom for me to lead my life largely as I choose and to enjoy the fruits of my labor depends heavily on the willingness of my neighbors (fellow citizens and residents) to accept those rules of the game. Our society functions as it does because of a broad social consensus on the rules of public behavior. This consensus rests in part on each player’s confidence that if he fails there is a safety net that makes it worth his taking the risk of playing. We need to compromise what we consider first best for society (and Republicans and Democrats tend to differ on what this is) to the extent needed to preserve that broad consensus.
Read the whole thing. It is refreshingly optimistic.
Solving problems
Government is supposed to help solve collective problems that require public consensus to resolve. There is a reason why the phrase "market failure" is used in every intro economic text. Republicans and current conservative philosophy has failed as a governing strategy. Modern conservative ideology denies market failure and the necessity for a society to come to a consensus on the rules that govern an economy. Clearly, infrastructure and productive workforce are necessary for a healthy economy. Modern conservative ideology and its focus on shrinking government stifles the ability of government to maintain and improve collective infrastructure.
The biggest problem facing the US is healthcare. The US healthcare system is far more expensive and fails to deliver outcomes that are as good as other developed countries. Our current system is bloated, inefficient and a drag on our economy. Health care costs are anti-business. As you well know, exploding health care costs are the largest threat to fiscal responsibility in future budgets. Reform must happen. McCain and Republicans deny that there is even a problem. If they deny the problem can they have a solution?
Republicans, including McCain have an answer to everything: tax cuts. Tax cuts are not a solution to most of our current problems one of which is underinvesting in infrastructure and workforce training.
Shrink the government ideology is a failure. It places conservative ideology at odds with the public demand for collective services. Staffing the government with people who believe that government cannot successfully deliver services is a recipe for failure. The result is placing responsibility for government in the hands of people who do not believe in it, do not like it, want it to go away. If people expect government to fail, how hard will they work to do a good job that you do not believe is possible? Would people who believe in government be more likely to succeed in making it work?
The way out of the dilemma is to ditch the wrongheaded ideology of shrinking the government. Private enterprise does not solve all problems faced by a society. That is why the phrase "market failure" is found in every introductory economic text. Conservatism would be much better to direct its energy to improving the efficiency and effectiveness of the government we have. Can Republicans reform their ideology to one that is capable of governing, without a break from governing?
My abstract take on unfettered v. regulated
My best abstract take on unfettered v. regulated
What the central planner (in the broadest, most general sense of the term) is unable to do -- at all -- is duplicate the zillions to the zillionth power different rational decisions that need to efficiently operate a market. What the central planner is able to do -- very efficiently -- is to interfere with or substitute any individual decisions that he can be personally aware of -- like deciding what the minimum price per hour of labor should be.
What any one of the millions of individual decision makers are not usually doing -- at all -- is seeking an outcome that the overall consensus of millions of decision makers would see as useful.
Fans of the unfettered free market believe its outcomes are perfectly proportional and that interfering with it is inherently inefficient. Actually, whether 80% of the profit of a fast food enterprise goes to labor and 20% to ownership -- or vice-versa -- has no direct effect on the consumer at all -- only affects what the profit will ultimately buy: perhaps better educated because better paid labor or perhaps more business investment because more profitable; both of which are within the realm of reasonable predictability to central planners.
Ditto for labor upping the price of a burger through minimum wage hike (or collective bargaining) to the highest price consumers are willing to pay (even it means selling fewer burgers for more labor profit per burger). "Natural" utility, if you will, should be seen as the highest price a product or service can command, not the lowest.
If a piece of land is sold at a fire-sale price because the owner is destitute and on the verge of starvation, that price probably wont fully reflect the utility the land might have to the purchaser. Unorganized labor is often in the same fire-sale position, since necessity may force it to accept whatever price will barely sustain it. There is nothing "naturally" efficient about sale of anything below the price which reflects its full utility to the purchaser. (There is something very naturally inefficient about keeping people too poor to reach the natural potential of their personal talents.)
First bites into the animal, anyway...
All I've got to say is
"Our society functions as it does because of a broad social consensus on the rules of public behavior. This consensus rests in part on each player’s confidence that if he fails there is a safety net that makes it worth his taking the risk of playing." -Warren Coates
Amen
"Our society functions as it
"Our society functions as it does because of a broad social consensus on the rules of public behavior. This consensus rests in part on each player’s confidence that if he fails there is a safety net that makes it worth his taking the risk of playing." -Warren Coates
Therein lies the explanation of why the last 8 years have resulted in societal AND economic dysfunction. This administration did whatever it could to hammer social wedges precisely to destroy this consensus under the "divide and conquer" mantra.
The results are not pretty, to say the least.
The fact of the matter is
The fact of the matter is that even though republic values say small govenment the republicans in office themselves haven't been small government. Bush himself expanded the governments roll more then any rescent president. You can't really call him a true republican.
It's exactly what i think.