PPP = CAP

A mysterious looking equation perhaps. Economists might mistake PPP to stand for purchasing power parity, but in this case it refers to post-partisan politics. Both our presidential candidates have been struggling to advance themselves as the preferred standard-bearer of post-partisan politics, but what that means is anybody's guess. My own reading of the American electorate from a non-ideological perspective is that citizens are interested in a politics that offers policies and institutions that adhere to three principles. These are choice (C), autonomy (A) and protection (P), hence the acronym, CAP. (I've posted on this before here.)

Americans have grown used to a consumer world of choice - from goods to media to services. This extends to the world of social choice and voters don't expect a one-size-fits-all narrowing of choices from their politics. This appears more like a step backwards for a developed society. This pertains to universal social insurance programs like Social Security, Medicare and possibly health insurance.

Second, the strain of independence and autonomy runs deep in American culture. Capitalism and democracy are both meant to empower autonomy and policies that encourage dependency on public institutions run counter to this. (Yes, there are exceptions, covered in the next paragraph.) The recent financial crises have reinforced this suspicion of dependence and lack of trust in unresponsive public or private institutions. The ground for an FDR-style New Deal has shifted.

Lastly, a counter-balance to this desire for freedom and autonomy is a strong demand for protection from contingencies (like 9/11, Katrina or the credit and housing meltdowns) over which individuals have little or no control over their own fate. In most cases, contingency risks are managed by private insurance pools, but in cases where private markets are incomplete we rely on social insurance. This is where the demand for working social institutions comes in, where legal constraints and regulatory oversight play an important role. But, this demand for protection is predicated on the conditions of the previous two principles of choice and autonomy. The idea is to maximize choice and autonomy subject to the constraints of protection and security.

So, to sum up a simple rule on government policy and legislation, we would be wise to remember: PPP = CAP.