In the second post of a two-part series, Daniel Berger explains that Democrats must approach messaging like marketing -- and try to forge partnerships with our elites.
What Is To Be Done?
In a previous post, I identified some of the serious deficiencies in the political strategies followed by the Democratic Party and, to a lesser extent, the progressive political movement in general. A general policy approach as a political strategy or a so-called "centrist" strategy -- while not without their positive aspects -- is simply not effective. Moreover, the Democrats need to figure out a way to engage business and professional elites without totally abandoning their progressive ideals and base. Fortunately, alternatives to current approaches exist on both scores.
One of the principal insights of modern advertising is that marketing efforts are most effective when focused on the attributes not of the product but of the audience to whom it is being sold. In the advertising industry, promotional efforts are geared to the demographic, financial, social and cultural attributes of consumers in marketing segments, not the product.
Politics can be seen as analogous to advertising or product promotion, since it involves the "selling" of candidates or ideas to the public -- a target audience -- with analogous "marketing" characteristics. Beliefs in and of themselves and as characteristics of the electorate are central to the political persuasion process. This strategy could be called a "values- or belief-based approach" to politics.
There are two general approaches to values/belief-based political strategies. The first approach focuses on a set of basic principles or values, which a political party claims to represent. For example, the Republican Party has purported to represent the values of individualism, property rights, free enterprise and patriotism. More recently, it has added religion and family. The Democratic Party has also had a long history of advocating values and ideals that are central to the American experience and ethos. These broadly shared values include equality, fairness, justice, community, support for the little guy and underdog and making the world a better place. However, it would be difficult to identify the Democratic Party now -- or even the progressive movement -- with any recognizable broad-based set of shared values, because of their current political strategies.
Articulating a set of beliefs is important. Studies of public opinion show that voters often make political decisions based on their belief systems and affinities they feel for candidates, rather than specific policy issues. The Republicans are deep into the values/belief approach to politics. They have gone to great lengths to differentiate Obama from the average voter, attempting to portray him as either not sharing the values of the average person or simply different, even against accusations of racism. They have also charged the President and Democrats as being "un-American," even as it strikes reasonably informed people as both ludicrous and reprehensible. Despite persistent questioning of their integrity, the Republicans persist in these efforts, suggesting that they may have public opinion data showing that these strategies are effective.
Whatever the effectiveness of this ploy, Democrats cannot and should not cede the definition of "American" to the Republican Party. Let us not forget that the Republican leadership has acquiesced, if not openly supported, advocacy by its members and spokespersons of violent overthrow of the government or secession from the United States, tantamount to the commission of sedition. Moreover, their reckless domestic and foreign policies have destroyed the U.S. economy, including fighting disastrous wars without paying for them and, inter alia, the deregulation of the financial markets, which directly led to the current economic emergency. This sorry record is real un-Americanism.
A second approach to a values-based political strategy is to apply sophisticated advertising techniques to political messaging. Like a typical advertising campaign, the target audience is segmented into sub-groups, analogous to market segments for marketing purposes, who share common affinities. This process is similar to public opinion surveying in the polling process, except much more detailed (through interviewing) and focused on actual values and beliefs expressed by each of the electorate sub-groups.
Whether generalized or specific, the merits of a values-based political strategy needs to be seriously considered by the Democratic Party and its moderate and progressive allies. The Republican Party's vision of an "ideal" world is incomplete, self-contradictory, largely wrong and has brought American society to the brink of collapse. But it still can win out if there is no alternative. Politics, like nature, abhors a vacuum. Democrats must respond with their own vision or the Republican "vision" -- like a bad product, relentlessly promoted -- will appeal by default. Democrats can and should say what they believe in.
For example, Democrats could say that they believe in a society that is not only free, but one that is also decent, humane, just, and environmentally responsible. In such a society, individual liberties are guaranteed and circumscribed by the principle of fairness. Private property rights and free enterprise are viewed as important ideals, but not absolute. Government has a key role in assuring that private interests don't get out of control and that the public interest is protected and upheld. Taxes are necessary to pay for public needs. Finally, Democrats believe in a strong national defense, but don't believe in nation or empire building -- except at home.
A Strategy To Deal With The Elites
The importance of pursuing a new approach for dealing with the elites is illustrated by the fact that in early October 2010, Michael Bloomberg sponsored a private and unpublicized dinner for the 100 richest people in the United States. The day of the dinner, one of the participants published an op-ed piece in the Wall Street Journal dealing with six fundamental problems facing the country, although without reference to the dinner that was scheduled to take place that evening. According to one of the participants, the sense of the assembled group was of deep concern about the state of the nation, the political situation in the U.S. and, in particular, the political will of the country to address its fundamental problems. No further information was provided on the issues addressed at the dinner or possible solutions proposed, if any.
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The good news is that the elites appear to be both concerned about the condition of the country -- and the responsiveness of the political system -- and open to a non-ideological policy approach currently favored by the Administration and the Democratic leadership in Congress. Without specifically saying so, they also appear to recognize that action by the government, if any, needs to be taken on the national level. This suggests that the elites could become natural allies if an understanding could be reached with them on two other fundamental issues: "market failure" and the problem of inequality. This would create a rational framework within which a meaningful dialogue could take place. On the other hand, an unwillingness on their part to consider one or both of these issues would probably make discussion impossible.
Sometimes markets fail to do the job assigned to them, namely, to allocate resources efficiently. Market failure, even in limited situations, has important implications from an economic organizational standpoint. First of all, the fact that markets can fail does not mean that the system is a failure and requires replacement by some other system of economic organization. Although there was a huge political fight about this subject in the 20th century, the weight of historical evidence is that a market system is superior to others. Market failure simply means markets and the system are not perfect, reflecting the unremarkable fact that human social institutions are imperfect. However, a commonly accepted corollary to the principle of the superiority of markets -- that nothing should be done to correct market failures -- does not in any way follow or hold true. Both economic theory and historical experience show that corrections for market failure can and do improve economic efficiency and social welfare.
Additionally, market systems are not self-correcting, self-regulating economic systems. Regulation to correct and/or prevent market excesses and abuses is fully justified from the standpoint of economic efficiency and social welfare, as these terms are defined in standard economic theory. Thus, a more optimal form of economic organization than a pure "free market" system is a mixed system of private markets and government oversight and regulation to correct for instances of market excesses and abuses.
The financial crisis, as was the case with the Great Depression, both clearly and spectacularly illustrate that markets fail, even egregiously. Most of the other pressing problems facing the nation -- such as energy, environment, climate change, health care, etc. -- also involve situations where markets fail or don't work well. Thus, any dialogue between the Democratic Party and the elites around a policy approach must at least recognize the problem of market failure and the reality that the market system is not completely (or always) self-correcting and self-regulating. If the elites accept this premise, a serious policy approach would be possible and a real prospect for a consensus could develop.
A second issue that the elites must ponder long and hard is a policy issue almost always absent from lists of fundamental problems: inequality. Inequality was the driving political issue of the 20th century on a worldwide basis, and it split the world between capitalism and socialism and along economic, social and political lines.
An economic system based on private property and free enterprise inherently produces vast inequalities in wealth because, inter alia, the economic returns to capital are far higher than the economic returns to labor. The unrestrained operation of market forces in capital and labor markets will necessarily concentrate wealth in the hands of property owners and their heirs, which invariably means in the hands of the few.
The original arguments against inequality (and capitalism) were based on the proposition that massive inequality of the scope which capitalism and market forces produce is fundamentally unfair. Social scientific research has now also weighed in. Over the last 30 years, there has been an accumulation of research on the effects of wealth inequality in modern society. The result is that there now is a growing body of knowledge (including quantitative social scientific evidence) that wealth inequality is strongly correlated with virtually every social ill, dysfunction and pathology in modern society including crime, drug and alcohol abuse, divorce, domestic violence, illiteracy, illegitimacy, homelessness, truancy, school drop-out, and job absenteeism, among others. It is also highly correlated with medical illness, both physical and mental, accidents, premature death and suicide.
Inequality also costs society hundreds of billions of dollars a year in lost productivity, and in the direct costs of medical treatment, even without taking into account the associated psychological pain and suffering or deleterious social effects. In a rational world, it would be cheaper for society to eliminate or materially reduce inequality than to continue to absorb its huge financial and other tolls. Although shocking, the U.S. has the highest level of economic inequality among the 35 leading industrialized nations as of 2009.
There is also evidence that growing income disparities in the U.S. have caused middle class household income to stagnate over the last 30 years. Slow (if any) growth of this income was, in part, responsible for the unprecedented increase in household debt in the last 15 years, as middle class families borrowed on an unprecedented basis to maintain their standard of living. Increased private debt levels played a major role in the financial crisis and its associated fall-out, including the current unexpected slow recovery. As such, growing wealth inequality, because of its effects on middle class and working class purchasing power, is a threat to the short-run stability of the economy and places the economy more at risk of cyclical collapse.
If these findings about the effects of wealth inequality are confirmed by subsequent research, the U.S. must reconsider the issue of inequality and determine whether social policies should be adopted to at least reduce its levels and/or its attendant effects. If the elites can set aside ideology and self-interest and recognize wealth inequality as a fundamental issue facing the country, then real progress could be made in fashioning a policy and political consensus with the Democratic Party and its progressive allies.
Daniel Berger is an attorney in the field of complex litigation, including securities and anti-trust litigation, and has a broad-based knowledge concerning the structure and functioning of the US economy and US financial markets. He practices in Philadelphia.