With ideological battles shaping up, a response to Nate

I already posted this on my blog, at Campaign Diaries. I am cross-posting it here because it arose as a response to a diary by "the mollusk."

With Democrats in a position to shape legislation for the first time this decade, ideological disputes were bound to arise quickly - and centrists led by Treasury Secretary Timothy Geithner are already winning the Administration's first internal battles:

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod... Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid. He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Congressional Democrats and liberal activists can play a big role in tipping the balance one way or the other. In this particular case, they can boost the case of those wanting to increase oversight and implement more regulatory measures. If anything, these early ideological battles could shape the White House's power dynamics for years to come, and this is why I am concerned to read columns like Nate Silver's latest post, which has been commented on in a recommended diary:
<span id="fullpost">This is neither the time nor the place for mass movements -- this is the time for expert opinion. Once the experts (and I'm not one of them) have reached some kind of a consensus about what the best course of action is (and they haven't yet), then figure out who is impeding that action for political or other disingenuous reasons and tackle them.</span>

As we have all noticed, very qualified people people have conflicting ideas on how to fix the economy. Whether or not you agree with them, there is little doubt that Larry Summers and Timothy Geithner hold a center-right economic ideology; they believe in the virtues of free trade and are generally skeptical that heavy regulation or nationalization will improve the situation.

Other economic experts (whether leftist economists, Nobel Prize-winner Paul Krugman, or a proponents of Chicago school of economics-style free market) disagree with that vision; for instance, Krugman just wrote a piece criticizing Geithner's reluctance to nationalize. It's certainly hard to imagine John Keynes and Milton Friedman developing a consensus on how to respond to an economic crisis. Perhaps they could agree on a detail or two, but not on an overall coherent (and sufficiently ambitious) policy. In other words: There is no such thing as the"expert opinion," there no ideal point at which all "experts" come to agreement.

The government's solutions will necessarily have an ideological leaning: The economic policies that will be implemented in the months ahead will conform to the ideology of those who wield power. It will have little to do with expert consensus or intellectual deliberation (thankfully, for someone to become a White House adviser or Treasury Secretary means they have already thought about what policies can stimulate a staggering economy), and everything to do with political power.

Right now, that power belongs to center to center-right economists who will resist the type of regulation and ambitious spending demanded by liberals unless congressional Democrats and activists present enough pressure to force them to listen. (For that matter, they will also resist the type of tax cuts conservative economists would advocate for - and conservatives have even less of a route through which to influence Obama and Geithner.)

Saying citizens should refer to expert opinion amounts to saying that they should uncritically defer to power - and it is tragically anti-democratic. For those who oppose the experts-in-power's ideological leanings, this is more than ever the time for mass movements. This is something European and Canadian citizens have understood. The Canadian opposition managed to block the government's proposal of conservative policies to deal with the economy; and as Naomi Klein reports, workers in France, Greece and Italy are rising in protests that the vast majority of the population is supporting.

Nate Silver adds:

Nobody, absolutely nobody, has more incentive to get this right than the Obama Administration. If the economy collapses -- well, more than it already has collapsed -- then the Democrats get slaughtered in 2010.<span id="fullpost">

Yet, the fact that Obama has more incentive to get this right has little to do with whether he chooses the right set of policies to address the crisis. (That is, unless you believe that Democrats might be looking to get this wrong and make the economy collapse further - but I have yet to hear anyone make that argument.) What people are arguing over is not Obama's motivation but the appropriateness of his economic policies: He could desperately want to make the economy stronger but still implement an ineffective set of policies that backfire.

After all, did Hoover want to make the Depression worse? To take a more recent example: nobody, absolutely nobody, had more incentive to get the Iraq War right than the Bush Administration and congressional Republicans. Does that mean that we should have trusted Bush's decisions on the Middle East and followed his recommendations because no one's legacy was more at stake than his and no one's electoral prospects were more at risk than those of Republicans?

A political leader could convince citizens to trust him in any endeavor if they were to believe that he would do no wrong since he would stand the most to lose if things backfired. It is a great feeling to be able to trust one's government, but a dose of skepticism and oversight is never a bad thing.

Tags: Ideology (all tags)



Re: a response to Nate Silver

Well put.

Nate Silver has sort of a technocratic bias here, but even taking his assumptions as given, mass movements generally have expert opinion governing their direction.  And the experts aren't agreeing anyway.

by Jess81 2009-02-11 10:17PM | 0 recs
Re: a response to Nate Silver

It is a mistake to think Nate's bias is "technocratic", it is not. His bias is centrist, moderate and post-partisan. The technocratic consensus among economists across the political spectrum is that if you are going to use a stimulus to attempt to solve our current economic crisis the it must be big enough to close the expected gap in GDP.

The technocratic consensus is that the stimulus bill as passed, and for that matter the bill proposed by the Obama administration, is not big enough, given the GDP gap and range of tax and spending multipliers the CBO projects. The CBO numbers encompass the range of multipliers used by a the technocratic consensus of economists.

No one, and certainly not the Senate centrists who shaped this bill, has made any economic or technocratic argument for the compromise. The Republican argument is not over the size of stimulus, it is that stimulus, no matter what size, will not work. So what Nate is promoting here is a purely political argument that privileges compromise over any coherent economic or technocratic theory.

LeftistAddiction is correct, Summers, Geithner's and Obama's center-right economic ideological preference is interfering with their ability to propose a technically adequate plan. They can do the math as well as anyone else, they know that what they have proposed, and what has passed, is not adequate. But they are ideologically opposed to the theory that explains our current situation and the correct response to it, so they split the difference between doing nothing and doing enough. They have not proposed an alternative economic argument that explains their numbers because there is no such argument.

by souvarine 2009-02-12 11:45AM | 0 recs
Re: A response to Nate
He's a great statistician, but when it comes to policy, he's clearly out of his league.
I question his motivation in dabbling in this type of opinion-based punditry. Did he become so in love with being a media darling that he's decided to join the punditocracy? As a statistician, he's well suited to predict an election or a batting average, but that expertise does not translate to policy-making.
by LakersFan 2009-02-12 11:05AM | 0 recs
Re: a response to Nate

Umm, y'all write as if there will not be more legislation that will contribute to solve economic problems and also address specific agenda items.  This is not the last chance to get stuff done.

by Leading Edge Boomer 2009-02-12 01:38PM | 0 recs
Re: a response to Nate

In the likely event that the economy continues to deteriorate dramatically you are probably correct. Obama will get another bite at the apple.

But the other scenario is Japan's lost decade, where the economy's slide slows. In that case there will be no appetite from Specter, Collins or Snowe for any additional stimulus, and we will spend Obama's four year term with stagnant growth or slow decline, zombie banks, and a Republican President in 2012. Maybe in 2016, after the Republicans have completely tanked our economy Great Depression style, we will get another chance to set things right.

by souvarine 2009-02-12 03:05PM | 0 recs


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