Confidence Lost

Take a look at this chart from Gallup on confidence in US institutions:



You can read the Gallup report on this poll here.

But let's think about what this poll is telling us. Interestingly, the military, most small business, the police and the Church are tightly controlled hierarchical organizations - in other words they are not democratic. The perception of trust and confidence tells us that people think these non-democratic organizations work pretty well.

Now let's look at the bottom: Congress at 12% is now considered the most ineffective institution in American society. And yet it's supposed to represent our democracy. Not such a good sign, do ya' think?

Look at the media - down there below our poor beleaguered president. Now that's a slap in the face. Organized labor and the justice system? Regulated HMOs? Ouch. This tells me our "liberal" institutions are hurting real bad in terms of public confidence. Perhaps we can blame this on the Bush presidency, but somehow that explanation doesn't appear to account for enough. It seems more likely we're having a problem with the self-regulation of our public institutions. The public--which these institutions are supposed to serve--see the politicians, CEOs, labor leaders, judges and bankers as part of the problem rather than the solution.

What's the solution? I'd guess something like citizen wikis. I recently read up on wikis and though their application to private goods and business seems very limited, their real value lies in the provision of public goods. Think about Wikipedia and how it may become the repository of all knowledge that dwarfs the great universities and libraries of the past. Wikipedia is still fairly unreliable, but the process by which it grows is self-correcting and thus the knowledge base is constantly becoming more accurate and valuable. Think of applying this to public institutions where information flows from the bottom up rather than from the top down. Perhaps this is the way we can make public institutions work for the people they're meant to serve.

I think Obama is hip to the power of the network and he may ride that network power to the presidency. But it doesn't really matter whether it's President McCain or Obama because citizen wikis could render the power hierarchies superfluous and purely symbolic, and that includes the presidency and the Congress. Think the royal family in Britain.

It's Not Just Ignorant Voters

It was an interesting coincidence that the day I finished reading a new book a publisher had sent me gratis, I picked up this week’s copy of USNWR and found an article summarizing that book’s argument with an interview from the author. (See here) Such serendipity demands affirmation, and so I comment.

I found Mr. Shenkman’s book engaging, quite succinct and convincing in its general parameters. He documents well the failures of our society reflected in the public’s selected awareness of politics. These include the failures of an educational system to teach, and students to learn, fundamental civics and how our republic functions. One must assume this also includes the history of our civic institutions and a wide range of current events beyond Lindsey and Britney.

A second factor he cites is the role of the media in all this – both print media and television. We may be able to correct the educational deficiencies, but we’ll have to learn how best to manage the effects of media technology and entertainment because it’s not going back in Pandora’s box. Media is entertainment is drama is simple conflict. If news people want to be taken for something of greater consequence they must learn to distinguish between reporting the facts and interpreting events. The first is reportage, the second is commentary.

However, I do believe Mr. Shenkman’s story then begins to veer into murkier waters. First off, his example of the public’s knowledge of the Iraq war as a sign of stupidity is fatuous. I daresay none of us know very well what is going on in the Middle East beyond what we see on TV and read in the headline news. Our foreign policy is run by a small cadre of Washington elites that include the Department of State, the DoD, the military corps, and the presidency and cabinet, with oversight by both houses of Congress. Even well educated political professionals must evaluate this information against their pre-ordained mental frameworks.

What Mr. Shenkman attributes to stupidity on WMDs is in fact a loss of confidence and trust in the media and the political establishment. Because both parties have politicized Iraq, the public has decided to believe what confirms prior beliefs and disbelieve whatever contradicts those priors. So, anti-war groups refuse to believe reports from General Petraeus or the administration and hawks refuse to give credence to reports from the NY Times, Washington Democrats or the Iraq Survey Group. This loss of trust is not stupidity; for the average voter it’s a lesson well learned.

Mr. Shenkman should be castigating a news media that has politicized reporting and misinformed to the point where everybody chooses to believe whatever they want. The tarnished reputation of the NY Times is the most serious casualty here. Next, Mr. Shenkman should train his sights on the educational establishment that has elevated political correctness over truth and self-criticism. We have let ourselves become defined by our racial, ethnic and sexual identities and this has poisoned our politics. The major political parties have been front and center on this and the Democrats can shoulder much of the blame for stitching together a coalition based on race, ethnicity, gender and sexual orientation. This has yielded the red vs. blue subculture nonsense that now defines our politics. If we vote our immutable identities, how can we possibly compromise?

There is no indication in the current election cycle that voters are ready to discard this self-defeating calculus. In fact, Democratic primary voters divided themselves up, with the eager prompting of both Clinton and Obama, into camps of red v. blue conflict with nary a Republican operative in sight. It was working class whites, women and Hispanics against blacks, academic and urban elites. In this sense, we voters are stupid to allow our identities to cast our votes. This is the change we should demand of ourselves, but one that neither Obama nor McCain can deliver.

My last quibble is with Mr. Shenkman’s idea that to correct our politics we must strengthen labor unions. Huh? In an information economy that is becoming highly entrepreneurial and fluid, it makes absolutely no sense to focus on peak labor organizations. I can only think this is nostalgia for a New Deal past talking. Both manufacturing’s share of national employment and union participation rates are approaching the low teens as a percentage of the labor force. Why should we focus our national attention on such a rapidly shrinking share of the population?

Unions have a positive role, but in developed countries this role should be focused on securing equity participation for its members, not restricting the supply of labor to increase bargaining power. Let organization membership drives and the empowerment of labor versus capital migrate to developing countries, but foreign worker unionization can hardly be a high priority for smart American voters.

I found it unfortunate that Mr. Shenkman’s argument is a bit tainted by a left liberal bias because it will diminish serious consideration by those who disagree. This does not mean I believe Mr. Shenkman is a rank partisan or that he is trying to slip a liberal screed by us. I take Mr. Shenkman at his word concerning objective intent, but we should recognize that those of us who live in professional, academic and urban enclaves tend to view the world through a narrow self-referential prism. Toleration, diversity, negotiation, privacy, civil rights, government regulation, etc. all appear inherent to our chosen lifestyle preferences and we view those ideals as the American norm. Thus, they appear eminently reasonable and centrist, certainly not biased. With this mindset liberals appear mainstream, conservatives appear out-of-sync, and the NY Times appears as the epitome of right reason.

However, US electoral politics have been divided up according to rural, suburban and urban interests and the parties have targeted their appeals to these different segments. I would recommend a book by Bill Bishop titled The Big Sort that explains how this political geography has happened. It is important for any serious student of American politics to understand the grassroots details of American voting patterns and the complexion of political tradition and not rely on the NY Times or Fox News to interpret it.

Instead of liberal-conservative, Democrat-Republican, red-blue, I prefer to classify the dominant political ideology in America as what I would call “tolerant traditionalism.” It’s a less charged conceptualization that captures the vast crossover territory between the two extremes and thus becomes more useful to understanding our varied political preferences.

Another caveat is that opinion polls and sampling never reveal a truth as accurate as what people do, rather than say. Voting is hard data, polling is soft data; when they disagree the hard data wins.

Does the "liberal" message really play?

Here's a very interesting post from the WSJ's political blog that outlines the ideological path our politics has taken over the last 40 years: "Is the Democrats' Message Flawed?".

Peter Brown argues:

After the 1980, 1984, 1988, 2000 and 2004 elections, Democratic leaders argued that the American people had not rejected their ideas or governing philosophy. Instead, they said, their nominee had not effectively communicated the party’s core message. It wasn’t the American people rejecting those views and values, they contended.

Whether that was an accurate reading of the electorate or a self-serving analysis by the party’s elites, it has made wonderful cocktail party fodder for years. But it has also been used as a rationale by those who didn’t see the string of defeats as a call to retool the party’s message.

My own studied view is that the liberal political agenda has needed retooling for a generation, but the true believers who cling to an updated version of FDR's New Deal coalition refuse to accept the lesson of lost elections. Republicans have been the beneficiaries of this monumental self-referential myopia, but conservatives have also failed to redefine their own agenda in the face of new challenges. (One would hope they will be quicker to respond to electoral defeat. See Paul Ryan's proposals under my "Policy Futures" post.)

You'd think the Obama-McCain choice would resolve the issue once and for all, but I have my doubts. The problem as I see it is that both partisan ideological extremes misinterpret mainstream America. I would say that the average non-partisan voter is neither liberal nor conservative and would eschew those labels for what might be better termed "tolerant traditionalism." But left partisans stereotype the "traditionalism" as ignorance, bigotry or religious fakery, while right partisans stereotype tolerance as licentiousness and moral degeneracy. These stereotypes are inconsistent and rejected by those to whom they are meant to be applied. However, we do have the empirical lessons of dozens and dozens of social and economic policies here and abroad that we can evaluate with objective judgments - it's more revealing when we refuse to accept those judgments.

The reason why this election may not resolve this issue is because Obama might be elected and his policy agenda may fail. McCain may win, and fail as well. Or both candidates may completely bastardize their respective ideological agendas, and succeed or fail on their own. The worst case would be for McCain to win and discredit conservatism, while Democrats lay the blame for electoral failure on racism. Then we'll be back at this same point 4 and 8 years from now, probably having learned nothing new about what we believe politically.

Wiki-wiki to the White House?

As the Obama saga develops many have taken note of what has empowered a relatively unknown and inexperienced politician to his present heights. Geraldine Ferraro is probably right and serendipity plays a large role in our fortunes, but the more important factors that will continue to propel Obama's campaign forward go beyond race and luck.

The focus of many analysts is on Obama's prescient application of new technologies that employ the power of networks. "It's the Network, Stupid" is the paraphrased mantra of this campaign. (A couple of articles here and here.)

It's the new media MySpace Facebook YouTube viral campaign. And it's worked.

What's significant about this is that Obama has managed to raise more than $250 million so far, most of it from small contributions over the Internet. This is the Howard Dean campaign finance model perfected. His success has led him to reject public financing, as was just reported today. Big surprise. But citizens voting with their pocketbooks is a lot more meaningful than polling. This suggests Obama has a significant edge in the level of commitment of his support.

Beyond the money is the organizational power. Web-based technologies can organize faster at much less cost than the old methods through social and economic institutions like unions and churches. It appears that Obama has powered his campaign at minimal cost through the phenomenon known as crowdsourcing.

Crowdsourcing is a form of mass collaboration when the masses contribute their efforts to the common cause for little or no remuneration or the possibility of winning a prize. Think reality TV. This is the current rage in business circles, but the open commons has its limits in economics. It really only works when the product is shared by all, not just the owners of the business. We might think of crowdsourcing as a more modern form of feudalism, where the serfs get to contribute to welfare of the lord.

However, with the public good of democracy, it may just be a viable strategy and this is the promise Obama is selling. (Of course, as president he will be Lord of the Manor, but it's a dirty job and somebody has to do it.)

The danger here is that wikipolitics may just empower a minority to win an election over a less well-organized majority. (Hmmm, just like non-democratic politics of the past.) This result would be similar to Bill Clinton's win in 1992 with only 43% of the vote, though that was due to the three-way split between Clinton, Bush and Perot.

But if Obama is able to win the presidency with minority positions on the issues we can probably expect the same kind of backlash Clinton got in in his first term in office. It remains to be seen how committed Obama is to the liberal agenda he's followed in the past, but the country is ideologically center-right, and that, my friends, has not changed.

The Economic Policy Vacuum

Last week David Brooks had an article in the NYTimes "Calling Dr. Doom." He cautioned against the optimism of both parties and candidates' campaigns, citing the obvious vulnerabilities of both and the dearth of ideas to combat the numerous policy crises we face.

The economic proposals seem particularly hollow and shortsighted. Neither candidate has a strong conviction about how to break the downward spiral of declining house prices, rising inflation, increasing health care costs, a collapsing dollar, rising energy prices, stagnant incomes, increasing debt burdens and slackening world demand. The only real way out of this is not by some clever sleight of hand, but by getting people to work more productively, increase their savings and investment, and pay down their debt. Concomitant to this is a necessary price correction for bursting asset bubbles. In the immediate case, this means housing prices. (This was a mistake that needs correcting, sooner rather than later.)

So Obama wants to jiggle the tax code to redistribute the tax burden in ways that seem more "fair." He proposes to increase income, capital and Social Security taxes on income for the rich (over $250K) and reduce taxes on those making less than $50K. McCain wants to maintain the income tax cuts but reduce corporate taxes and raise exemptions for dependents.

This feels an awful lot like Nero fiddling while Rome burns.

How will the economy respond to increased taxes on production? We already know the answer to that one, so why is Obama proposing it. Obama's policy guidelines follow some subjective notion of "fairness." But if fairness is desired, why not eliminate taxes on savings and capital returns for those under a certain income threshold, say $75K? He wants to raise corporate taxes, but these just reduce shareholders returns and aggravate the divide between haves and have-nots by subsidizing corporate expenses. Better to eliminate the corporate tax completely and recapture those revenues after they are paid out to owners.

Obama's proposals seem to adhere to a postwar philosophy of rewarding labor incomes over capital incomes, but that resigns workers to participating economically solely as an input cost. International wage pressures make that look like a bleak proposition. Besides, that's not how a poor Obama achieved his new wealth. Senator Obama is an entrepreneur who markets his intellectual capital, so why not encourage such activities through tax reforms?

His spending proposals, on the other hand, portend an ever increasing tax bite to pay for them. By necessity this will fall on middle class incomes. His trade objections have been written off to campaign politics, but what message is he sending and what expectations is he creating?

McCain's proposals seem to fiddle at the margins without negatively impacting production, but they sound too timid. If the economy tanks, his proposals will be sorely inadequate to deal with the problem. His spending restraints would go a long way to decreasing the burden on earners, but it remains to be seen for an administration of either party to actually decrease the federal budget.

Both Obama and McCain seem to lack the boldness required to open up our economic system and make capitalism work for every citizen. Liberalism suggests that we can move the tax burden around to reward certain deserving groups over others, after the fact. But this most often results in reducing inequality by making us all poorer. It would be nice if this fallacy was admitted and we focused on rewarding certain economic behavior that adds to the public good and found ways to encourage that behavior across all groups--rich, poor and middle class.

Want fairness? Introduce a low flat income tax, a national consumption tax with a high threshold, and some form of wealth tax that might be folded into an inheritance tax with a reasonably high threshold. Let's reward productive activity, whether it's labor or capital productivity and grow ourselves out of these doldrums. Yes, we can.

The DNC's Dilemma

The primary results are in the bag and Barack Obama holds a clear advantage in delegates over Hillary Clinton, essentially winning the nomination prize. Now the ball moves into the Democratic leadership's court.

The Clintons have made it plain that they expect a quid pro quo to rally their supporters to the cause and no one claims to know the voters' minds on this. Dick Morris presents the negative case here: "No Ménage-à-trois for Obama."

At the recent rules committee hearing over the FL and MI delegations, Hillary supporters were vocally opposed to any compromise short of awarding full delegations that favor Clinton. One wonders how prevalent are the sentiments expressed by one participant quoted in an article yesterday by Froma Harrop titled "White Women Take the Gloves Off":

"Obama will NOT get my vote, and one step more," Ellen Thorp, a 59-year-old flight attendant from Houston told me. "I have been a Democrat for 38 years. As of today, I am registering as an independent. Yee Haw!"

The Democratic leadership has been walking a tight rope for the past two months, with superdelegates refusing to declare for either candidate to avoid alienating either white women, working class Hillary supporters, or the black vote for Obama. In so many words, they were desperate to save the party from itself.

So, this is the dilemma: does the DNC force the issue of Clinton for VP to save a fragile party coalition, or do they give Obama free rein to try to win the election on the strength of his "new politics" message? There are risks and uncertainties to either option. Putting Clinton on the ticket pleases certain Democratic constituencies who fantasize of a "dream ticket," but it contradicts Obama's message of a new style of politics. Most likely he loses many moderate and independent voters who cringe at the idea of eight more years of Clintons. Thus, the result is probably a wash.

On the other hand, if the DNC disses Clinton, will we see a mass defection of Reagan Democrats to John McCain? Might this defection overwhelm any advantage Obama may have among independents?

So, does the DNC try to save the party and risk the election, or do they go all out for the election and risk destroying the party?

The way out of this dilemma is for the DNC to navigate it's way out of fractious identity politics and reform a winning coalition based on cross-over liberal principles rather than group spoils, but this is impossible to do without risking the meltdown of the existing coalition. This has haunted Democratic presidential candidates for forty years and was only solved by Carter's evangelical conservatism and Bill Clinton's DLC triangulation.

There are other options that offer a possible escape: award Clinton something short of the vice-presidency in return for her support. Perhaps another shot at health care or a high cabinet post? Senate majority leader? These various options have their upsides and downsides, but the immediate risk the party faces is real and the leadership is certainly feeling the heat.

Electoral College Math? Same Old Same Old.

Robert Novak had a recent post from the Evans-Novak report. The report gives a state-by-state breakdown of EC predictions. The national map looks remarkably like the last two presidential elections, with the tally predicting McCain winning with 270 votes to Obama's 268. Support for Democrat Obama is in the northeast, Great Lakes and Pacific regions, with the big red "L" defining red state support for Republican McCain. So much for a new political configuration.

Of course, the actual result will be different, but the voting and polling data already support another red-blue, polarized 50-50 election. I don't expect either McCain or Obama would necessarily govern as President Bush has, but our political polarization is a reflection of voters' behavior, not governing style. All the evidence points to this, yet people would still like to find a scapegoat in the media, the parties, the Talk Radio pundits, the Bush Republicans, or the culture warriors. But it's the voters forcing the candidates and the parties into uncompromising ideological positions, despite the candidates' promises of a new page in our politics.

As we have seen in the primaries, neither McCain nor Obama can deliver a new politics. Only the voters can reject their own identity politics, listen to the opposition, and learn to compromise on the issues. As James Carville might say, "It's the voters, stupid."