Relevant and even prescient commentary on news, politics and the economy.

Bargaining power, progressive maximalism, and Medicare for All

The HuffPo has reported on a minor dust-up between Bernie Sanders and Alexandria Ocasio-Cortez over the politics of Medicare for All (see here, here, here, also Paul Waldman here).  The tl;dr summary is that AOC suggested that it is good politics for Sanders to insist on MFA, because this will give him more leverage in negotiations over a final bill, but that compromising on a public option is an acceptable outcome that would represent real progress.  Sanders shot back that his bill is already a compromise.  Of course, Sanders’ reply is consistent with AOC’s comments – he may be trying to maximize his bargaining power by pretending to rule out the possibility of further compromise.

My view (here) is that the only significant effect of insisting on MFA will be to make it less likely that the Democratic candidate wins the election.  To be clear, I think that a Democrat who insists on short-run implementation of MFA can win in 2020.  I just think running on MFA will make winning less likely, and that there is no reason to increase the chances of a second Trump term since a second Trump term would be a catastrophe and MFA will not pass no matter what happens in the election.  But AOC suggests one way my theory may be wrong:  perhaps electing a candidate who stakes out a maximalist negotiating position on MFA will help get a stronger reform package through Congress.

This is, unfortunately, wishful thinking.  The hard truth is that progressives will have essentially no bargaining power on the issues that they care about most strongly.  The reason is simple.  To have bargaining power in a negotiation, you need to be willing to walk away from the table and settle for the status quo.  But on the issues they care about most passionately – health care, climate change, etc. – progressives will be the least willing members of Congress to settle for the status quo.  If Congress is trying to decide whether to 1) add a public option to Obamacare or 2) implement full-blown Medicare for All, Sanders and AOC can threaten to oppose the public option all day – but no one will believe them.  Instead, legislation on key progressive priorities will be shaped almost entirely by the need to win over centrists and swing district legislators.  The votes of progressives will be taken for granted, full stop.

Of course, it is possible to argue that “insisting” on Medicare for All may help a bit at the margins.  Perhaps.  But in addition to its electoral costs, focusing on maximalist positions has two serious drawbacks.  First, the language of progressive maximalism is not persuasive to people who are not already progressive.  Second, staking out “tough” positions diverts the attention of progressives from the really critical task of designing policies that can attract support from their more moderate colleagues.  In the case of climate legislation, I will argue that these issues are of overwhelming importance.

I suspect that both AOC and Sanders know all this.  AOC’s comments suggest she understands the importance of compromise and incremental progress and is willing to provide leadership on this issue.  This is a hopeful sign – leadership by elected progressives will be critical to building a more strategic and effective brand of progressive politics in the United States.  But – as Sanders’ reaction shows – we have a long way to go.

Comments (9) | |

How to roast the planet with good intentions: The Climate Equity Act

I have suggested (here and here) that idealism is leading progressives astray.  Unfortunately, climate policy offers many examples.

Consider the Climate Equity Act of 2019.  The CEA was, I believe, the first concrete piece of legislation proposed as part of the Green New Deal.  Unfortunately, it illustrates several of the problems with progressive idealism.  The CEA is moralistic rather than strategic.  It does not take policy analysis seriously; it assumes that Congress can simply write a law requiring justice and that justice will magically appear.  In practice, the CEA will do little to promote justice, but it will put a powerful weapon in the hands of opponents of a clean energy transition.

The purpose of the CEA is to ensure all people a right to a healthful environment, and to address systemic environmental injustices and inequities.  To achieve these goals, the CEA imposes extensive procedural and analysis requirements on federal rules that affect “frontline communities”, which the act defines as low income communities, indigenous communities, communities of color, deindustrialized communities, vulnerable elderly communities, unhoused populations, people with disabilities, and communities dependent on fossil fuel industries.

Protecting frontline communities is a worthy goal.  However, the federal rulemaking process is already too cumbersome to address a problem like climate change, which will require rapid, economy-wide changes.  The CEA will make the problems with the federal rulemaking process much worse.  The CEA 1) requires agencies to engage in a comprehensive review of proposed rules and possible alternatives to proposed rules that minimize negative economic, environmental, and health consequences on frontline communities, or maximize benefits to these communities, 2) fails to specify a clear standard for agencies to use when evaluating alternative rules, and does not explain how conflicts between or within frontline communities should be resolved by government agencies, and 3) gives members of any aggrieved frontline community the right to judicial review, including the right to block enforcement of agency rules.

If progressives care about preventing climate change, this is insane.  Requiring agencies to evaluate multiple options using vague standards and giving a wide array of groups easy access to the courts will turn the CEA into a powerful weapon against all federal rulemaking, including rules that are essential for stopping climate change.

For example, creating a renewable energy system may require construction of a new network of high voltage power lines to shift electricity from areas where the wind is blowing and the sun is shining to areas where it is calm or cloudy.  It is far from clear that our political system will be able to overcome the NIMBY forces that will predictably resist every power line location decision.

Instead of helping to solve this problem, the CEA will make it far worse.  The government will have to investigate the impact of multiple power line routes on different frontline communities.  There will be conflicts between frontline communities and within such communities.  The law is silent on how these conflicts should be resolved, but everyone gets to go to court.  Fossil fuel producers resisting clean energy growth will have no trouble creating “astroturf” organizations to challenge rules they dislike.  The same problems will arise with siting decisions for wind and solar farms and the location of dams for hydro power.  Stalemate rather than progress will be the order of the day.

Even rules limiting the burning of fossil fuels will be snarled in lawsuits.  Suppose EPA tries to limit the burning of coal to generate electricity.  Such a rule would be vulnerable to attack by coal producers (recall that communities dependent on fossil fuels are frontline communities).  Coal producers or their allies would not have to argue that regulation is impermissible, they would just have to argue that the agency failed to consider an alternative rule that would be less economically harmful to communities dependent on fossil fuels – say, a rule with a somewhat slower timetable for reducing coal use.  On the other hand, children with asthma could sue the agency for not reducing coal use fast enough.  (Are children with asthma covered by the CEA?  This question seems to turn on whether asthma counts as a “disability” under the law, because people with disabilities are a frontline community.  No matter how an agency decides this question, it will be vulnerable to a lawsuit.  The possibilities for legal wrangling and delay are literally endless.)

Decarbonizing the United States economy will be a massive undertaking, and even progressives who care about a just transition to a carbon-free world should think twice about turning administrative procedure into an all-purpose weapon at the disposal of anyone seeking to block change.  This doesn’t mean that we should ignore the very real burdens imposed on disadvantaged groups.  But instead of adding more veto-points to our already creaky environmental rulemaking system, we need to figure out what types of assistance different communities need and get it to them directly.  Fossil fuel workers and communities need job training, relocation assistance, pensions and other forms of assistance.  Unhoused populations need housing.  Giving people the assistance that they actually need will do far more to alleviate hardship than suffocating the rulemaking process in a blanket of CEA lawsuits.

Comments (5) | |

Progressive idealism and Medicare For All

I have suggested (here and here) that idealism is leading progressives astray.  Idealism leads progressives to ignore the political opposition that their proposals will encounter, and the need to win over reluctant allies through policy design, messaging, and – yes – compromise.

A clear example of the pitfalls of progressive idealism is provided by the current debate over Medicare for All.

The case for single payer health insurance in the United States is quite strong but treating Medicare for All as a short-term policy goal is a serious political error.  The problem is not just that immediate implementation of single-payer health insurance will meet insurmountable political resistance, which of course it will.  MFA turns social insurance – which should be one of the Democrats’ greatest electoral advantages – into a serious liability.  If the election is close, which at this point seems quite possible, this unforced error may result in a second term for Trump.  Since re-electing Trump would be a calamity, and MFA has virtually no chance of being passed even if the Democrats hit the trifecta and win the presidency and both houses of Congress, this is a huge mistake.

Rather than running on a platform calling for immediate implementation of MFA, Democrats should promise to protect and modestly expand Social Security, Medicare, and Medicaid, in ways that will visibly help struggling Americans.  They should increase Social Security payments for seniors with limited income and assets and for the very old.  They should push to expand health insurance coverage, to improve drug coverage, and for a public option at least in rural areas.  They should promise paid family leave and expanded tax credits for families with children.  What they should not do is insist on dismantling the existing system of employer-based coverage in a big-bang transition to a single-payer system.

Social insurance should be a huge electoral advantage for Democrats . . . 

Comments (15) | |

Progressive Idealism, continued . . .

In a previous post, I argued that rising incomes and increasingly liberal attitudes may move opinion and policy in a progressive direction in the United States.  However, the Democratic victory in the 2018 election did not signal the start of a progressive “revolution”; it mostly reflected a predictable reaction to the unpopular policies of Trump and congressional Republicans.  Any major progressive shift in policy will be hard fought and will likely take years to materialize.

Given the serious obstacles progressives face and the importance of the issues that confront us, it is critical for progressives to think carefully about how to maximize their chances for success.  However, as I argued here, idealism is preventing progressives from thinking strategically about policy and politics.  My goal is to persuade progressives that they can – must – be much more hard-nosed and strategic to achieve their goals.  I will focus on two basic tools progressives can use to make progress in this difficult political environment – policy design and political persuasion.

Policy Design

To achieve their goals, progressives need to design policies that 1) will help win elections, or at least will not harm Democratic candidates, 2) will win over congressional allies who are not-so-progressive, or maybe even not-progressive-at-all, 3) will not trigger a backlash, 4) will withstand hostile scrutiny from the Supreme Court, and 5) are relatively immune from executive branch obstruction, because it is likely that the executive branch will fall under hostile Republican control on and off over at least the next decade, and 6) will actually achieve progressive goals if they are implemented successfully.  (For a small example of a policy that may violate this final condition, see Peter Dorman here.)  Designing policies to win over reluctant allies means, in part, taking into account the deep suspicion that most Americans have about the competence and fairness of government.

Political Persuasion

Comments (17) | |

Generational replacement

Via Matt Grossmann, a new paper by Patrick Fisher:

Contemporary American politics is marked by an unusually substantial generation gap. This has important implications for the future of American politics as an overwhelmingly white and conservative generation, the Silent Generation, is being replaced in the electorate by much more diverse and liberal generations: the Millennial Generation and Generation Z. To project potential partisan changes in the American electorate with generational replacement, simulations were calculated estimating what the electorate may look like, using the 2016 presidential election as a baseline. Hypothesizing the same generational dynamics of vote choice and turnout for 2020 that existed in 2016, with generational replacement alone the national plurality of 2.1 percent for the Democratic candidate increases to 4.8 percent if Generation Z votes the same as Millennials. For elections beyond 2020, the potential partisan swing toward the Democrats based on generational replacement become even much more considerable. By 2032, Millennials and Generation Z combined are projected to consist of almost one‐half of the entire electorate. Even if Generation Z is not distinct from the rest of the electorate politically, given how strongly Democratic the Millennials are, the simulated gain for the Democrats in 2032 is 5 percent; and, if Generation Z becomes as Democratic leaning as Millennials are, the simulated swing toward the Democrats is greater than 7 percent.

Paper here (paywalled).

Comments (3) | |

If democracy fails in the United States . . .

will it survive anywhere else?

Many people (including me) are worried about the failure of democracy here.  But what happens in the rest of the world if democracy fails here, with the leading countries outside Europe authoritarian or leaning authoritarian, and European democracy looking a bit frayed around the edges?  And if authoritarianism is ascendant around the world, what would be the chance of a democratic restoration here?  This is above my pay grade, but I’m not optimistic . . . thoughts?

Comments (7) | |

Does the United States Have a Progressive Future?

Spoiler alert:  maybe.

The surprising success of Bernie Sanders’ 2016 presidential bid, widespread protests against Trump, and the election of a number of highly progressive candidates in the 2018 midterms all seem to suggest a progressive turning point in American politics.  At the very least, the intellectual stranglehold of right-wing economic ideas on our political discourse seems to have been broken.  Progressive proposals for Medicare for All, a higher minimum wage, higher taxes on the wealthy, free college, child support, and the Green New Deal are all generating enthusiasm among Democrats and getting a more respectful hearing in mainstream political circles than would have seemed possible even 5 years ago.

I agree that greater interest in progressive policy ideas among journalists, political leaders, and the policy elite is an important political development, but it is a common mistake to read too much into short-term swings in public opinion or the results of a single election.  So it is useful to step back and ask what we know about the path to a progressive future in the United States.

Comments (13) | |

Is Progressive Idealism Self-Defeating?

Like many liberals, I am encouraged by the new energy of progressives and the growing political support for progressive causes.  But I also share the common worry that the idealism of progressives is in danger of becoming self-defeating (see, e.g., Judis and Edsall for two recent discussions).  That’s a problem, because the stakes are high and we don’t have much room for error.

As I see it, progressive idealism today has two manifestations, one political, one economic.  Political idealism manifests itself in a reluctance to acknowledge the scale of the political challenges progressives face, the scorched-earth opposition that awaits us, and the need to find potential allies among the not-so-progressive and to design policies and arguments that can win them over.

On the economic side, idealism makes progressives reluctant to take policy design seriously.  For example, there is a big gap between progressives and economists (including progressive economists) on carbon pricing and other aspects of climate policy.  There is also a gap on fiscal and budgetary policy, and on many other issues.  To some extent, this simply reflects the unavoidable fact that non-economists always find economics counter-intuitive – if they didn’t, we wouldn’t need economists.  But the problem today goes beyond this.  There is a strong tendency to rely on moralistic thinking, to assume that every wrong has an easy remedy and that good intentions can solve any problem.  This goes along with a resistance to thinking about tradeoffs, costs, and market-oriented solutions like carbon pricing, and a tendency to favor command-and-control policies and to ignore fiscal constraints.  I suspect that we have right-wing economists and politicians to thank for this state of affairs, but whatever its cause the rejection of careful economic thinking on the left is real.

Comments (1) | |

What Is Up With Empirical Economics?

Tyler Cowen today flags a paper by Currie, Kleven, and Zwiers on changing practices in economics, and highlights the following:

Panel A illustrates a virtually linear rise in the fraction of papers, in both the NBER and top-five series, which make explicit reference to identification. This fraction has risen from around 4 percent to 50 percent of papers.

This caught my eye, because Matt Yglesias at Vox recently highlighted a study claiming to show large educational benefits from air filtering in schools:

This paper identifies the achievement impact of installing air filters in classrooms for the first time. To do so, I leverage a unique setting arising from the largest gas leak in United States history, whereby the offending gas company installed air filters in every classroom, office and common area for all schools within five miles of the leak (but not beyond). This variation allows me to compare student achievement in schools receiving air filters relative to those that did not using a spatial regression discontinuity design. I find substantial improvements in student achievement: air filter exposure led to a 0.20 standard deviation increase in mathematics and English scores, with test score improvements persisting into the following year. Air testing conducted inside schools during the leak (but before air filters were installed) showed no presence of natural gas pollutants, implying that the effectiveness of air filters came from removing common air pollutants and so these results should extend to other settings. The results indicate that air filter installation is a highly cost-effective policy to raise student achievement and, given that underprivileged students attend schools in highly polluted areas, one that can reduce the pervasive test score gaps that plague public education.

Kevin Drumm was quick to spot the problem in the paper (click through to see the data).

Then Andrew Gelman weighed in:

Comments (1) | |