Forcing Both Parties to Get Specific About What Government Should Do

Apr 9, 2012Mark Schmitt

As part of the How We Value Government series, demanding that both Republicans and Democrats be forced to outline a real vision of government instead of proposing vague cuts or making specific defenses.

As part of the How We Value Government series, demanding that both Republicans and Democrats be forced to outline a real vision of government instead of proposing vague cuts or making specific defenses.

There's an old rule of thumb about Americans' attitudes toward government that's no less true for being familiar: Americans are "operational liberals" but "philosophical conservatives," the political scientists Lloyd A. Free and Hadley Cantril concluded in their 1967 book The Political Beliefs of Americans, based on their analysis of dozens of public opinion surveys. That is, we favor the specific services government provides, but we're distrustful on an abstract level and respond favorably to attacks on "big government."

This small insight was true even at the peak of the Great Society and the era of "liberal consensus," and it fits as an explanation for much of the back-and-forth of American conceptions of government ever since. Whether it accurately represents public opinion or not, it's a good guide to the behavior of actors in the political process. Conservatives attack "government" as an abstract concept that has little to do with our real lives and mostly creates wasteful excess benefiting either bureaucrats themselves or other people. Liberals respond by trying to show the harsh reality of cuts to particular programs, especially safe ones that reach large constituencies. In 1994 and 1995, for example, voters were first drawn to Newt Gingrich's promises to eliminate entire cabinet departments, but as soon as the idea of cutting government was converted to the reality of shuttering national parks and slashing Medicare, the political tides turned swiftly in the other direction. George W. Bush won reelection in 2004 talking vaguely about the need to change Social Security, yet given the opportunity to put such a plan in action, he saw the public lose faith so quickly that he never found a single congressional sponsor for the legislation. Even Ronald Reagan, elected in 1980 in what we still see as a critical moment in shifting attitudes toward government, largely backed off from that agenda after the 1981 budget cuts and his own ham-fisted attack on Social Security.

Mitt Romney's announcement recently that he would eliminate several large government programs, but wouldn't name them lest he face political criticism, represents the conservative tactical approach to Cantril-Free perfectly. (Except they usually remember not to read the stage directions.)

The struggle over government thus often takes the form of this push-pull between the abstract, where anti-government conservatism reigns, and the specific, where people seem to appreciate government. The result, until recently, has been a happy dance through which both sides achieve their short-term objectives: Conservatives win their share of elections, which they can use to push through tax cuts, without worrying much about the size of government, while liberals get their turns at power and avoid major cuts to programs. The Cantril-Free paradox has even generated new paradoxes of its own. Conservatives often expand government as political insurance, albeit carelessly, as in the creation of the Medicare Part D prescription drug program in 2003. Liberals and Democrats are more likely to cut programs (such as the Medicare cuts of 1993 and 2010), both because they take government more seriously and in the hopes that showing a commitment to cutting waste and improving people's experience of government will ameliorate their abstract opposition.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

But what's missing from this well-rehearsed dance is any effort to force the question, to make a real choice about what we want government to do. That missing element has been devastating in the last few years, when it seemed impossible to convince the public or Congress that an emphatic government effort was the only way to prevent a long and debilitating recession.

For the most part, as Romney's comment suggests, the 2012 election cycle is evolving into yet another battle between the abstract call for cutting government and the specific defense of popular programs, particularly those threatened by Rep. Paul Ryan's budget plan. But there are indications that the game might be changing. House Republicans have now tied themselves to the mast and voted twice for Ryan's radical plan. They've built up some defenses against the classic attacks about cutting Medicare and other vital programs: They've drawn a new line that defines Medicare and Social Security for current seniors and those over 55 as benefits that have been "earned," while for others they are unaffordable giveaways. They've redefined programs like unemployment insurance as if they were welfare. They've used deficit fever and misleading statistics to portray Social Security and Medicare as doomed, so that the only option is their cuts.

Meanwhile, embracing the need to reform entitlement programs, Democrats have (correctly and responsibly) blunted their own ability to play the old game. As Slate's Dave Weigel wrote after the Republican victory in a special election in New York City last year, Medicare is "not really a wedge issue -- it's the slow death of a wedge issue."

These two changes directly challenge the politics of "operational liberalism." Going forward, it might not be enough to pick a few appealing government programs that reach the middle class and use them as political ammunition. And that could be a good thing. Instead of focusing on narrow specifics, this change demands a full-throated defense of government as a whole -- programs that benefit "other people" as well as ourselves, programs that represent the shared benefits of our social contract. And it demands that we open up the "submerged state," which obscures government programs and encourages the illusion that government programs benefit only someone else.  It calls for a full-fledged commitment to making sure that government programs, especially Medicare, are in fact sustainable for the future.

The biggest risk to the promise of shared prosperity, assisted by government, is that liberals and Democratic political operatives are living in the past and believe that they can replay the old Clinton game against Gingrich over and over again.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.

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Eric Schneiderman Urges Progressives to "Dig Deeper" to Transform the System

Apr 6, 2012

Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute’s new flagship initiative, Rediscoverin

Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute’s new flagship initiative, Rediscovering Government, at an event with a keynote address from New York Attorney General Eric Schneiderman. Why are Americans so distrusting in government? Schneiderman's answer is that we've been led to believe in the "magical market" that supposedly guides us to equality and prosperity. "Its like the conservatives are pretending they've found some missing pages of Genesis that the rest of us are missing," he said. But in reality humans are to blame for profound changes -- like skyrocketing income inequality -- not supernatural forces. "The distribution of wealth is not determined by nature," he said, "it is determined by public policy."

 

Progressives' efforts at making significant changes to the system after the financial crisis have mostly borne little fruit, he noted. We therefore "need to dig deeper" see how deeply the unfettered propaganda that less regulation leads to growth and higher taxes always create jobs has affected the American mindset and economy. We also have to aim for long-term, "transformational" change instead of the everyday "transactional" change we usually get bogged down in. We have to move past the election cycles and everyday battles to politics that involve working today to improve circumstances in the future and challenging the way that people think about issues in the first place.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

But the importance of progressives' efforts can't be overstated. "Great strides in social justice don't come out because of politicians, they come out because of movements." The movement has to put pressure in all the right places -- most importantly by reviving the fact that government plays a vital and positive role in every American's life. "By demonstrating that the government can and will enforce one set of rules for everyone, and protect the interests of all Americans, not just the most fortunate, we begin the process of transforming people's awareness of themselves and our collective life," he said. "And if we do this work, we can put to rest the deep fallacies that have allowed injustice and inequality to grow unchecked for so long, and we can begin to rediscover the potential of government to get us back in touch to start building, as our counterparts in the 1930s did, a more equitable, educated, healthy, and compassionate nation."

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Memo to Romney: America's Greatest Presidents All Used Government to Increase Prosperity

Apr 5, 2012David B. Woolner

As part of the How We Value Government series, a reminder that while America has benefited from the free market, we wouldn't be anywhere without the government playing a major role in the economy -- and our entire society.

As part of the How We Value Government series, a reminder that while America has benefited from the free market, we wouldn't be anywhere without the government playing a major role in the economy -- and our entire society.

In his Wisconsin primary victory speech, presidential aspirant Mitt Romney made some interesting observations about Franklin Roosevelt, Lyndon Johnson, and Abraham Lincoln. He seemed to indicate that he admires them, as they were what he termed "historically great" presidents. He then went on to chide the current president for having the audacity to think of himself in the same league as these three great former leaders. He described the coming presidential election at great length as a historic choice between what he termed a "government-centered society" and a "society led by free people and free enterprises."

In making these observations, Mr. Romney made no attempt to rectify the fundamental contradiction in his remarks. He either failed to see, or decided to conveniently ignore, the fact that the three "historically great" presidents (one Republican and two Democratic) he made reference to at the opening of his remarks all shared one thing in common: a fundamental belief in the positive use of government to help expand the economy and provide a greater degree of economic opportunity and social justice for all Americans -- not just those at the top of the income ladder.

It was President Lincoln, for example, who in 1862 signed such pieces of legislation as the Homestead Act, which issued 160 acres of Federal land west of the Mississippi River at little or no cost to any adult citizen who had not borne arms against the United States, provided they agreed to improve the land. He also signed the Morill Act, which donated 30,000 acres of federal land to a number of states and territories that could then be sold by the state to provide the revenue needed to fund public colleges and universities. The result was the establishment of over 60 "land-grant" colleges and universities across the country, including Cornell University, the Massachusetts Institute of Technology, and the University of Wisconsin at Madison (the very state in which Mr. Romney made his remarks about the evils of a "government-centered" society). The Homestead Act greatly accelerated the settlement of U.S. territory in the West and was a boon to the overall economy. The establishment of "land-grant" colleges and universities brought the dream of higher education to tens of thousands of low-income farmers and workers who had previously been denied that opportunity, which had untold benefits in science, technology, and the liberal arts.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

FDR brought us the most comprehensive banking and financial reform in U.S. history. He established the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and a number of other important laws that restored confidence in the country's financial and banking sector not only among the American people, but also among the business community. In using government in this way, the Roosevelt administration laid the basis for the overall growth of the financial sector for decades to come. FDR also greatly expanded the country's economic infrastructure through a massive effort to update the country's antiquated roads, bridges, airports, and other facilities, all of which helped propel the expansion of the economy in the 1930s, '40s, '50s, and beyond. He also signed the National Labor Relations Act into law, which encouraged higher wages through the unionization of the workforce and, near the end of his life, pushed through the GI Bill, which allowed thousands of returning World War II veterans the chance to secure further job training or access to higher education. Both of those efforts helped make the post-1945 U.S. economy the envy of the world.

The Johnson administration gave us the Civil Rights and Voting Rights Act of 1964 and '65, which began the long, slow process of ending racial discrimination in America. It gave us Medicare and Medicaid to provide the elderly and low-income individuals with access to health care. Head Start and the Higher Education Act of 1965 helped low-income families secure a better education for their children. The Truth-in-Lending Act helped protect consumers from abusive lending practices. These and a host of other initiatives were designed to build a "Great Society" that would provide everyday Americans with a greater measure of social security and economic opportunity.

In short, all of these "historically great" presidents used government as a tool to improve the lives of working Americans through a host of important initiatives that not only helped render the United States a more just and equitable society, but also helped expand our economy by increasing the level of economic opportunity.

Ignoring all of this, Mr. Romney insists that it is only "free enterprise" and the "free enterprise system" that can lift people out of poverty, educate our kids, and build a strong middle class. He claims that this is the one true path to economic prosperity and as such says he is running for president because he wants to "restore to America the economic values of freedom and limited government that has made us the powerhouse of the world."

But in making this claim, Mr. Romney misreads our history. There is no question that the United States and the American people have benefited tremendously over the years from the fruits of the free enterprise system. But the notion that our government has not played a major part in this success story ignores the facts. Ask yourself where we might be today without the innovations of such institutions as MIT or Cornell University, if our banking system was not backed by the FDIC, or what sort of social security system we might have if we had turned over the Social Security Trust Fund to the private equity markets prior to the recent financial crisis. Also ask yourself if you really think the financial sector would be better off without the SEC or if it really is fair that Warren Buffett's secretary pays a higher rate of tax than her employer.

History teaches us that the true story of America is one of enlightened leadership in the creative use of government to unleash the creative energies of the American people. History also reminds us that the free market, left unchecked, can bring the country to financial ruin. Mr. Romney refuses to acknowledge this. Instead, he claims that President Obama is wrong to focus so much of his attention on finding government-led solutions to our current problems. Meanwhile, he mocks him for even attempting to aspire to the greatness of a Lincoln, Roosevelt, or Johnson -- the three of our presidents who, perhaps more than any others, understood that there are times when, as FDR put it, the American citizen, in seeking to rectify economic inequality and injustice, "could only appeal to the organized power of government."

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Giving Citizens Control Over Government Will Revive It

Apr 4, 2012Sabeel Rahman

As part of the How We Value Government series, a call for going beyond electoral reforms to bring citizens directly into the governing process.

As part of the How We Value Government series, a call for going beyond electoral reforms to bring citizens directly into the governing process.

From the Tea Party and Occupy Wall Street, to the 2012 campaign trail and the Supreme Court's consideration of the constitutionality of the Affordable Care Act, the central clash in American politics today is over the role of government in the modern economy. If the Great Recession has taught us anything it is that, on the one hand, we need government more than ever as a force for the common good -- whether in combating the vicissitudes of the market or in holding private actors like too-big-to-fail firms accountable. But, on the other hand, our faith in government's ability to do so has been (rightly) shaken. Conservatives have used this distrust to deregulate and dismantle the welfare state. As Roosevelt Institute Senior Fellow Jeff Madrick argues, one of the central challenges for progressive politics is to provide a constructive defense of the role and value of government.

One of the common responses to the declining faith in government is to appeal to individuals' civic virtue, which could revive government by pushing us to make good faith arguments as advocates, participate as voters, or promote the common good as policymakers. Yet Barack Obama's own appeal to bipartisanship and civic duty in 2008 now looks naïve in the context of the vitriolic political disputes over government policy in the Great Recession.

Yet Obama was on to something: citizenship does matter for restoring the effectiveness of and faith in government, but not in the way that it is commonly invoked. The deeper root cause of the questionable legitimacy of government today is not policymakers themselves; it is instead the sheer gap between we the people and those policymakers. The workings of government are too often seen as an outside force, driven by individuals who are not responsive or accountable to the people. Ultimately, reviving government requires expanding the opportunities for participation offered to citizens themselves. In other words, restoring government requires rethinking citizenship -- not by appealing to virtue but rather by thinking of it as an office, with its own powers and capacities to shape public policy.

When the ideal of citizenship is invoked, it is often as a corrective against narrow self-interested views of politics. Good citizenship, we are reminded, entails not only rights and benefits for the individual, but also shared obligations to one another. Good citizenship means giving reasons for one's political beliefs in public and arguing in good faith over what the common good requires. For elected and appointed officials, citizenship means governing with an eye toward the public, not the private or factional, interest -- while for voters citizenship means showing up on election day and choosing one's vote carefully.

But this "virtue-conception" of citizenship has remarkably little bite as a mode of political reform beyond exhortations to good behavior. Yes, a good citizen ought to take seriously his or her obligations to others and we ought to argue or govern in good faith. But this conception of citizenship by itself cannot generate the kind of shift in politics that we need. The exhortation to virtue is an aspiration, but not a reform strategy.

Indeed, many classical democratic theorists emphasized citizenship not as a virtue, but as an institutional configuration of political power. In this view, we need institutions to facilitate good government. But through participating in those institutions we as individuals can acquire civic virtues over time, learning through experience and being shaped by institutional powers and constraints to govern better. This "institutional view" sees citizenship as an office, a position in a democratic government. Like the other offices in a democracy such as the executive, the legislator, or the judge, this office has its own powers, responsibilities, and institutional forms -- structures that make possible the kinds of actions that we want from a "good citizen."

The problems of contemporary politics look very different from this view. The problem is not self-serving interest groups, callous politicians, or apathetic voters. Instead, the problem is that we have underinvested in the institutions that can make ordinary people effective officers in a democratic government.

Consider what one has to do to be a good citizen today. If we show up to vote, we have discharged our sole official duty. There are of course other avenues for more engaged citizens to participate in politics: people can learn about the issues through the media, and they can lobby policymakers through political associations and advocacy groups. But as an institutional matter, the powers of the citizen are minimal. Much of the task of governing is delegated: to executives, to representatives, to judges, to regulators. Our current institutions give so little space for citizens to govern themselves, it is little wonder that political officials seem unaccountable or citizens apathetic. What we need is to create spaces in which citizens can engage in meaningful political action. Direct experience with governing can help empower ordinary people, educate them on the issues, and ensure accountable and responsive government.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

Creating greater institutional spaces for citizens to share the powers and responsibilities of governing will not just enhance the accountability and responsiveness of government. It can also help foster a new generation of citizens who gain knowledge and insight into the moral and policy challenges of the day.

The first area where we can expand the office of citizenship is through reforms to our electoral process. Campaign finance reform would restore the political power of citizens vis-à-vis their representatives, offsetting the dependencies of elected officials on fundraisers and elites. Similarly, electoral processes themselves fall far short of basic fairness. A number of states have been systematically increasing barriers to voter registration and participation, threatening to disenfranchise millions of voters. The redrawing of representatives' districts continues to yield gerrymandered districts that make it difficult for citizens to actually engage with their representatives and have adequately contested elections. Finally, Election Day should be a holiday that enables citizens to actually discharge their duties seriously and easily.

Yet, even with these changes, elections by themselves are still insufficient. While they create opportunities for mobilization and debate, they offer little role for citizens after the moment of the election itself. To remedy this defect, we must also expand citizen participation in local governments and regulatory agencies.

Local government has long been celebrated as a way to provide citizens with an opportunity to engage in the political process more easily on issues most directly relevant to their lives. But for cities to serve as spaces for empowered participation, they first need broader authority to actually address complex policy issues. Currently many cities have highly constrained powers to tax, spend, and develop policy thanks to the constraints of state and federal law and judicial doctrine. Second, city governments can do much more to involve local citizens in the policymaking process, as recent efforts at participatory budgeting in New York, Chicago, and elsewhere suggest.

Finally, regulatory agencies can be reformed not just to allow citizen input but to also give citizens a more direct role in policy formation and implementation. While agencies already allow citizens to submit public comments on proposed regulations, the actual impact of these comments are often minimal. By contrast, agencies could involve citizens through more institutionalized consultations and procedures, giving stakeholders a direct voice in regulatory policymaking decisions. Indeed, it is telling that successors to the Occupy Wall Street protests have attempted to pressure the Securities and Exchange Commission to enact tougher financial regulations through detailed comments and protests -- laudable efforts, but unlikely to sway the SEC commissioners absent more institutionalized channels for citizen voice in regulatory policymaking.

These are only a few ideas on how citizens can be given greater power and voice in the actual project of governing. Until we reform the institutions of governance, citizenship will continue to have limited meaning in politics. But if we can create spaces in which citizens can be officers of the polity, shaping public policy and directly experiencing the challenges and rewards of government, then we can not only thicken the meaning of citizenship but also revive the efficacy and legitimacy of government itself.

It may be rightly argued that such civic participation may yield policies that we disagree with. Certainly it is true that participation does not necessarily mean that the best policies result. But the democratic faith is a faith in the people themselves, in their ability to develop their capacities of judgment through experience over time, and in their ability to learn from mistakes. For such learning and judgment to take place, citizens have to be given real power and real experience. This need not mean subordinating policies to public opinion. Indeed, one of the hallmarks of empirical studies into participation (see here, here, and here) is the degree to which ordinary citizens can exercise real political power in a nuanced way if provided with institutions that grant them the power, enable them to learn from experience over time, and place them in conversation with experts.

Democracy is the central animating value of American politics, on both the left and right. If we want to restore faith in government and overcome its political dysfunction, it is time to make democracy -- and citizenship -- more than a buzzword.

Sabeel Rahman is a Roosevelt Institute Fellow, a PhD candidate in Political Theory at Harvard University, and a JD candidate at Harvard Law School.

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The Economic Story Progressives Need to Tell

Apr 3, 2012Richard Kirsch

As part of the How We Value Government series, a simple narrative with clear heroes and villains that progressives too often fail to tell.

As part of the How We Value Government series, a simple narrative with clear heroes and villains that progressives too often fail to tell.

In his 2003 State of the Union address, President George W. Bush vowed to protect Medicare two sentences after he trashed "nationalized health care." The fact that Medicare is our national health care system was apparently as lost on the president -- and most of the listening American public -- as it was on the senior citizens who went to town hall meetings to protest the government takeover of health care after seeing their doctor earlier in the day on government health insurance.

When was the last time you heard someone define Medicare as "our national health care system for seniors?" Imagine if that was a regular description that Democratic elected officials and Medicare advocates used. Maybe the concept might begin to take hold.

People filter the experiences of their own lives and the world at large through stories and narratives. The greatest hole in progressive communication about government is not the absence of myriad good examples of how government meaningfully improves people's lives and drives a more prosperous economy or a host of recent examples of how stripping government protections is disastrous. What is missing is the consistent telling of our story about the role of government in creating broader shared prosperity, opportunity, security, and freedom.

One mistake that progressive advocates of government make is to make government the subject. People don't wake up in the morning wondering about government; they wake up thinking about getting their kids to school and themselves to work. They don't worry about the size of government; they fret about keeping their jobs, how they are going to pay for their kids' college and have enough left over to retire. The story we tell has to be focused on the core anxieties of ordinary people and how government can address those concerns.

Like any yarn, our story has to include heroes and villains. And since this is a narrative about how the world works, we need to explain what the villains did wrong to get us into this mess and what the heroes will do to rescue us, or better yet, themselves.

For the past year I have been working with a group of progressive leaders and communicators on the development of a "progressive economic narrative," a way of telling our story about the role of the individual, business, and government in creating shared prosperity. The goal of the group is "to develop and promote a common economic narrative that is used across the progressive movement, a powerful story that we are telling consistently through words and actions, in our communications and organizing."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

The progressive economic narrative we've drafted has five conceptual pillars, which describe what went wrong with the economy, define a powerful economy and how we get there, outline the political challenge, and conclude with a call to action. It has villains -- Wall Street speculators, CEO campaign contributors, and the super-rich -- who did bad things: cut our wages and benefits, shipped our jobs overseas, got rich quickly at the expense of American workers and families. These evildoers bribed politicians to rig the rules in their favor, and in doing so, crashed the economy, crushed and closed the middle class, and wrecked our democracy.

The hero in our tale is the great American middle class, the engine of our economy. At the heart of our story is the notion that, as Senator Paul Wellstone used to say, "We all do better when we all do better." This is a statement of economic truth and of our values. We believe that the true measure of our economic success is the well-being of our families and the productivity of our nation, not the stock market and corporate profits. And that economic progress is driven by innovating and investing in the future so that all Americans have good jobs and can educate their kids, support their families, and retire with security. We all do better when we all do better.

To get there, our hero -- the middle class, working families, the 99% -- has to fight to free the government from the grip of the rich and powerful and put our democracy back in the hands of ordinary Americans. That matters because the great American middle class does not happen by accident; it is built by decisions we make together. Decisions made when the government works for all of us -- decisions to invest in our people, to expand opportunity and security to pave the way for business to innovate and meet the future, and to write rules that boost businesses that do the right thing, like creating good jobs in America or safeguarding the environment.

You will recognize that this is a very different story from that told by the right, in which economic success depends on rugged individuals in a market free from government. Our story is that people, business, and government drive the economy by working together to create broadly shared prosperity, opportunity, and security.

If this seems simplistic, that's a strength. It is also misleading, because so much of communication on our side fails to talk about our view of what makes the economy a success and how the main actors -- people, business, and government -- each play a role. Simplicity is a powerful asset if we begin to tell the story consistently in all our communications, which means our words and our actions. The "we" here needs to be broad, including progressive organizers, activists, pundits, journalists, and academics.

If we are to help Americans rediscover government, we need to keep telling a powerful story about how a government that works for all of us will allow each of us to prosper and believe again in an America in which our children will prosper.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Stiglitz: The Invisible Hand is Invisible Because It Isn't There

Apr 2, 2012Elena Callahan

Americans have had it drilled into them that government is bad, but a new narrative is surfacing.

Americans have had it drilled into them that government is bad, but a new narrative is surfacing. Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute's new flagship initiative, Rediscovering Government, at an event in New York City, declaring, "There is no economy without government. There is no America without government. Government doesn't have a role; it is integral." In a keynote address, Roosevelt Institute Senior Fellow Joseph Stiglitz also argued that healthy societies have strong governments and that his research has shown that "the reason the invisible hand often was invisible was that it wasn’t there." Watch the full video of the opening remarks and keynote below:

 

Stiglitz says that "most Americans don’t realize that we are no longer the country of opportunity that we think of ourselves, that America today has less equality of opportunity than any of the other advanced industrial countries." He points out how many like to say that our economy is doing well because GDP is growing, but that "if you’re going to be judging how well an economy is doing, clearly I think the key metric that one wants to focus on is what is happening to the living standards of most citizens.” He says that most Americans don't realize how bad we're doing, including the fact that "the median income of a full-time male worker today is the same as it was in 1968," and "if you look at median household income it is the same today as it was a decade and a half ago."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

How did our society get to a place where government has taken a back seat and where people are wary of government control? Stiglitz thanks the conservatives who have successfully touted false ideology about markets over the past 40 years. While they like to blame the government for inequality, Stiglitz notes that not even Adam Smith thought markets were anything beyond efficient. "Nobody ever said that they were fair, that they would lead to a distribution of income that was socially acceptable." Furthermore, he says, "many of the aspects of our inequality are a result of market failure. People who don’t have health insurance when they get sick wind up in extreme poverty and they can’t get health insurance because of a whole set of market failures." He says it's "striking that in spite of the fact that there is no intellectual basis for what you might call a 'Smithian' view that unfettered markets lead to efficiency," conservatives have marched ahead with this idea.

So why was there so much economic growth after World War II? Stiglitz says one reason is "the legacy of the Roosevelts, the legacy that government made a difference.” In making the case for government he also points out that "government has played an important catalytic role in a whole variety of other areas. If you think about our modern economy, you think about Internet, you think about biotech, you think about telecommunications and all of these things rest on government-funded basic research." He recalls a conversation with a Scandinavian finance minister who, when asked how his economy was so successful, answered "high taxes." Stiglitz took away that "if you’re going to have a well-functioning economy... you have to pay for what you get. You need to have a well-functioning government that provides education, infrastructure, research, technology, all these things, and we have to pay for it." Given that markets are not predictable nor interested in social problems, our government should stop bailing the financial institutions out and start investing in its people and the institutions that benefit them.

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The Truth Will Set Us Free from Anti-Government Rhetoric

Apr 2, 2012Jeff Madrick

The way to talk about the purpose and value of government and be persuasive is simply to tell the truth. This has been in short supply over the last generation. To the contrary, government has been demonized in much discourse. It has at least, to coin a new verb, been "skepticized."

The way to talk about the purpose and value of government and be persuasive is simply to tell the truth. This has been in short supply over the last generation. To the contrary, government has been demonized in much discourse. It has at least, to coin a new verb, been "skepticized."

Trust in government now is very low. But trust in government has been falling on balance since the late 1960s and took an especially large hit in the 1970s. The nation hasn't truly regained its confidence in it ever since. In fact, the nation has been vulnerable to mythology and misinformation that has seriously damaged America's future.

There are many such myths, but the primary one is that any social program or any increase in government spending dampens economic growth. Liberal economists have contributed to this as well. Even MIT's Paul Samuelson, the leading Keynesian of his day, argued that there was a trade-off between social programs and economic efficiency 60 years ago.

It is simply not true. For the genuine evidence, not the propaganda, see a book by Joel Slemrod and Jon Bakija called Taxing Ourselves, which shows the true impact of higher taxes on growth. More to the point, see Peter Lindert's book, Growing Public, which argues that social programs often contribute to growth. There is certainly no evidence, doing cross-country comparisons, that they retard it.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

Both Bakija and Lindert were at the Rediscovering Government launch conference program on March 28 in New York City, and this week we will have video of their contributions on our web site, RediscoveringGovernment.org. Lane Kenworthy, among many others who participated in the conference, also made an important point about how much people of low income in the U.S. and other rich nations depend on social programs.

This is a key issue in my mind, but there are many others regarding government. How jeopardized has true democracy been by the cost of elections and the power of lobbying? Is the deficit as dangerous as it is made to sound? Why do people like Medicare so much and in turn often hate government intrusion?

The true history of government should be better known. It regulated land sales in the early 1800s. It built the canals, the free and mandatory schools, the sanitation and water systems, the roads and bridges. It financed the railroads and subsidized the colleges. It did the most critical technical research in American history. It established maximum hour and child labor laws. It pays you for a while if you lose a job through no fault of your own.

In a series of essays this week, we will discuss how to make the true value of government better known to America. Let's start with the truth.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

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Rediscovering Government

Mar 28, 2012Jeff Madrick

Today we launch a new initiative and a new conversation about the purpose and possibility of government in the lives of Americans.

Today we launch a new initiative and a new conversation about the purpose and possibility of government in the lives of Americans.

The discourse about the positive purposes and possibilities of government has been barren for a generation in America. What discussion there is has been dominated by proposals and philosophical disquisitions on how to make the most of less government, but rarely about new avenues for government action or new possibilities for social improvement. Since the Reagan years, there has been almost no new social policy that required a substantial outlay of money. George W. Bush's program for drugs for the elderly was the one major exception, and it was riddled with concessions to the private market. Obamacare is a second. Both are clouded in controversy that is in good measure ideological.

Even the conventional language about the "role" of government is misleading. Do we talk about the "role" of parents in their children's lives, or the "role" of children in their parents'? One doesn't exist without the other. You don't talk about the role of water in swimming or the role of the ball in soccer.

In short, there is no economy without government; there is no America without government. If all this seems a little elementary, it serves a point. The language we use suggests at the outset an assumption that government should be limited. Note we don't talk about the role of business in America. Business is generally assumed to be the senior partner.

Let me make this one point clear: There is no capitalism without government, either. Like Keynes, I'd like to enable the country to enjoy the benefits of capitalism but also the benefits of government safeguards, investments, and efforts to develop everyone's "capabilities" to benefit, if they so choose and if they do their share, from a full life.

America started losing its way, I'd argue, precisely when it began to lose so much faith in government back in the 1970s. Why this happened is complex. The nation has always been individualistic in its orientation, given its history as a rebel against totalitarianism and its small population compared to available resources, including an open frontier. But community action and responsibility also had a larger part in America's development than current mythology suggests. Trust in government is at a low today, but surveys suggest it started to fall rapidly under Lyndon Johnson after the surge in such faith after the New Deal and World War II. It fell further under Nixon during the Watergate scandal.

But the nation was still moderately confident in government. In the early 1970s, many new regulatory agencies, such as the Environmental Protection Agency, were started, Social Security was expanded, and welfare programs were expanded. A tax revolt in California led by Ronald Reagan was put down in early 1973.

But the economic devastation from 1973 through the early 1980s seemed to be a primary catalyst in causing Americans to doubt government. Americans were confused, frustrated, and angry. By 1978 there was a major tax revolt. Soon talk was all about cutting taxes, reducing social programs, and freeing business of regulations. Anti-trust became an almost archaic term. In ensuing years, few economists of any political stripe argued against undoing Glass-Steagall, which had separated investment and commercial banks in the 1930s. Higher unemployment rates were thought to be the ideal path for controlling inflation. The Democrats began talking about how free markets can supply social goods more efficiently than government. Unions increasingly were thought of as villains, not the providers of a middle class for workers. Hard-won gains on Social Security and Medicare were readily sacrificed in the name of fiscal responsibility, while raising taxes in the almost lowest-taxed rich nation in the world was considered anathema.

Check out the new special issue of The Nation, guest-edited by Roosevelt Institute Senior Fellow Jeff Madrick.

But government has brought some of this disillusion on itself. Some of it needed taming and pruning. Promises and hopes were at times excessive. And it has too often failed to do what it is supposed to do well. But one reason was also that those in charge often didn't believe in government. Reagan, for example, slashed budgets for key agencies. Increasingly, appointees saw government as a path to a good job once they left. Regulatory "capture" was widespread. Tax expenditures, like the home interest deduction, benefited the well-off far more than the rest. Companies enjoyed not merely loopholes but wonderfully lucrative and poorly administered government contracts. Democrats are not to be exonerated. They were leaders, for example, in deregulating key previsions that could have prevented the financuial crisis that began in 2007.

Maybe most sad, however, is that government stopped looking forward. I published a book a few years ago, to be found in our website's "Library," The Case for Big Government, that emphasized that government was a primary, and arguably the most important, agent of change. One of the myths that dominate America is that in the 1800s we had a laissez faire government. That is far from true. Government built the all-important canals when commerce needed them and the remarkable free and high-quality public school system when it became clear education was imperative both to freedom and a prosperous economy. Government built the municipal sanitation and water systems. Government financed the railroads. In the next century, it built the highways, financed research in health and technology, and subsidized college attendance. Oh, yes, it also picked up the garbage, sent the mail, and fought a couple of major wars.

None of this was anticipated. The tasks could not have been written into the Constitution. Times change, economies grow and become more complex, and our knowledge changes as well. Today, we know that early childhood education is key to full lives. We didn't always know that. Government should support it. We know that women need family support programs to join the workforce. And we know that markets don't cure racism on their own, even though some Nobel laureates claimed they would.

One final point. I find that many people I speak to underestimate how deep and dangerous the conflicts among the American people have been over the nation's history. I am not only talking about slavery, though that is obviously primary. But Thomas Jefferson had profound battles with John Adams and Alexander Hamilton about basic civil rights -- remember the Alien and Sedition Acts -- so much so that Jefferson felt obliged to assuage the differences in a famous State of the Union address. Andrew Jackson threatened to send in troops to force South Carolina to abide by new tariffs in the 1830s. Populism almost split the nation in two in the 1890s. America sent in troops to Arkansas in the 1950s to integrate schools.

This has not been an easy nation to run. Many were opposed to financing the canals, public education, and the municipilization of sanitation and water. These were all ideological battlegrounds, but fortunately the victory was usually in favor of community action, government support. Among America's remarkable achievements has been an ability to resolve conflicts, not always peacefully, that almost rent the nation asunder. Post-partisan good will does not well define most of American history. Government was needed to resolve differences and proceed forward. None of that progress was ever inevitable.

Today, we are launching a new web site called RediscoveringGovernment.com. It is the conversation locus for our new Rediscovering Government Initiative. We aim to restart a public discussion about the purposes and possibilities of government. We aim to present a counter-narrative to the cynical anti-government ideology that has dominated the nation since the 1970s. We do not want to tell people what to think. But we want to give them a place to think, comment, and argue. We will have open public discussions through presentations around the country, and our web site will be the repository of key information, news, research, and books on relevant subjects you, the reader, may miss. This blog will ideally be the cite of a new American conversation. We welcome all to participate. We will be open, searching, curious, and humble in pursuit of a healthy new discourse on how to govern ourselves.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

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Watch Live: Stiglitz, Schneiderman Lead Conversation on Role of Government

Mar 28, 2012

The Roosevelt Institute is kicking off its newest flagship initiative, Rediscovering Government, with a day of lively discussions by foremost thinkers exploring key questions around the role and purpose of government, including keynote addresses by Nobel laureate and Roosevelt Institute Senior Fellow Joseph Stiglitz and New York Attorney General Eric Schneiderman. Starting at 9 a.m., watch video of the conference live here:

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The Roosevelt Institute is kicking off its newest flagship initiative, Rediscovering Government, with a day of lively discussions by foremost thinkers exploring key questions around the role and purpose of government, including keynote addresses by Nobel laureate and Roosevelt Institute Senior Fellow Joseph Stiglitz and New York Attorney General Eric Schneiderman. Starting at 9 a.m., watch video of the conference live here:





Free desktop streaming application by Ustream

Out-of-touch conservative dogma has been on full display during the Republican primary season, but now we're going to hear from leading progressive thinkers as they work through how to change the national conversation and develop a new narrative about the purpose and value of public action. Under the leadership of Roosevelt Institute Senior Fellow and Rediscovering Government Director Jeff Madrick, our goal is to counter the anti-government language, attitudes, and policies that have dominated American politics for a generation.

For more, check out the new special issue of The Nation guest-edited by Madrick, in which he poses the fundamental question of American politics: Can we trust government again?

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FDR Countered Wall Street's Greed With Mass Prosperity

Mar 22, 2012David B. Woolner

Today's financial giants pursue greater wealth at any cost, but in order to build a sustainable economy, we have to make life richer for all Americans.

Today's financial giants pursue greater wealth at any cost, but in order to build a sustainable economy, we have to make life richer for all Americans.

Today, national progress and national prosperity are being held back chiefly because of selfishness on the part of a few... You know their reasoning. They say that in the competition of life for the good things of life "some people are successful because they have better brains or are more efficient; the wise, the swift and the strong are able to outstrip their fellowmen." And they say that that is nature itself and you cannot do anything about it and it is just too bad if some, the minority of people, get left behind.

It is that attitude which leads such people to give little thought, to give anything but lip service, to the one-third of our population which I have described as being ill-fed, ill-clad, and ill-housed. The majority of them say, "I am not my brother's keeper" -- and they "pass by on the other side." Most of them are honest people. Most of them consider themselves excellent citizens.

But, my friends, this Nation will never permanently get on the road to recovery if we leave the methods and processes of recovery to those people who owned -- I say "owned" -- the Government of the United States from 1921 to 1933. -Franklin D Roosevelt

The recent publication of an editorial in the New York Times by a top executive at Goldman Sachs has sparked a fierce debate about the culture of greed that has permeated Wall Street in recent years. Critics argue that the author of the article, Greg Smith, is right to point out that Wall Street has lost its moral compass and that firms like Goldman are no longer interested in their clients and couldn't care less about the long-term implications of their investment strategies. Today's Wall Street, they insist, is driven by one motive and one motive only: to make as much money as possible for themselves and for the firms they work for in the shortest possible time, whatever the consequences for the customers the company is supposed to be serving. On the other hand, the defenders of Wall Street insist that the desire to make money is nothing new -- that greed, in fact, has always been a part of the culture of the investment banking community, and that we should not be so surprised or alarmed that the people who work in the financial sector do so out of a desire to become rich.

Given the consequences of the recent financial crisis, the fact that Mr. Smith's article has provoked a debate about the culture of Wall Street seems understandable. With unemployment still over 8 percent nationwide, a good share of the population remains concerned about the possibility that the "toxic atmosphere" Mr. Smith describes on Wall Street might lead to another financial meltdown. Yes, we do have Dodd-Frank, but will this piece of legislation prove adequate to prevent a repeat scenario?

These are all legitimate questions, but given the poor state of our economy and the millions who remain unemployed or underemployed a full four years after the onset of the collapse of the financial sector, the real question that needs to be addressed concerns not just the behavior of Wall Street, but the impact that the singular pursuit of wealth in whatever field has on the nation as a whole.

Seventy-four years ago, on March 23, 1938, Franklin Roosevelt addressed this very question in a speech he made to the people of Gainesville, Georgia. Two years before, Gainesville had been devastated by a violent tornado that left over 200 people dead and destroyed much of its downtown area. But with the help of over $1 million in federal aid from the Reconstruction Finance Corporation (RFC) and a number of construction projects carried out by the Public Works Administration (PWA) and the Works Progress Administration (WPA), along with the financial support, hard work, and "unselfish cooperation" of the citizens of Gainesville, the city was rebuilt. Moreover, the new Gainesville was better than the old, with less congestion, better housing, and more parks and green space for the people to enjoy.

Buy a copy of The Unfinished Revolution: Voices from the Global Fight for Women’s Rights, featuring a chapter by Roosevelt Institute Senior Fellow Ellen Chesler.

Taking note of this, FDR observed that the efforts of the people of Gainesville to rebuild their city touched "the interest and life of the whole Nation" because they typified the concept of citizenship "which is latent in the American character." It was true that in the wake of the destruction the city had "great needs," but these needs "were met," he said, "in accordance with the democratic principle that those needs should be filled in proportion to the ability of each individual to help."

Not one to miss a teachable moment, FDR then went on to address the larger question of economic inequality that still plagued the country. Much of this inequality, he insisted, was the result of the selfishness and greed of those at the top end of the income ladder who refused to accept or acknowledge that a society built on such vast disparity of wealth was not only undemocratic, but also economically unsustainable. These individuals, he went on:

...are the kind of people who...were saying, "Oh, yes, we want nobody to starve" but at the same time were insisting that the balancing of the budget was more important than making appropriations for relief. And when I told them that I, too wanted to balance the budget but that I put human lives ahead of dollars and handed them the book of the government estimates and asked them just where they would out the appropriations, inevitably they folded up and came back and told me, "Mr. President, that is not my business, that is yours."

FDR then went on to speak about how such attitudes affected the nation as a whole, of the consequences of economic inequality and the critical need to provide work and better wages for the "bottom third" of the U.S. population. He insisted it was vital to improve the "buying power" of the millions of unemployed and other workers "who are so under-employed or so underpaid that the burden of their poverty affects the little business man and the big business man and the millionaire himself." Moreover, he also reminded his listeners that better buying power meant not just greater purchases in hard-hit industries but also "many other...things -- better schools, better health and hospitals, better highways."

In short, FDR insisted that the best way to work our way out of the Great Depression and sustain capitalism was to make sure it worked for all our citizens, rich and poor alike. Happily, the actions of the people of Georgia in the wake of tragedy had convinced him that more and more Americans from workers and farmers to bankers and businessmen were coming to see "that the continuation of the American system calls for the elimination of special privilege, the dissemination of the whole truth, and participation in prosperity by the people at the bottom of the ladder, as well as those in the middle and those at the top."

It is certainly not a bad thing that Mr. Smith's article about the culture of Wall Street has stirred up a debate about the values and motivations of the individuals working in the financial sector. But in a society where the same newspaper has recently reported that the number of poor and near poor in America -- those living "either in poverty or in the fretful zone just above it" -- has now reached approximately 100 million Americans, one wonders why more people are not focused on the "one third of a nation" that, as in FDR's day, sadly finds itself "ill-housed, ill-clad, ill nourished." Would an editorial bemoaning the increasing level of poverty in America have sparked the same amount of interest?

Viewed from this perspective, the culture on Wall Street, with its huge bonuses and drive for ever-increasing wealth no matter what the consequences for the client, becomes all the more disturbing. Not so much for what it says about the financial sector, but rather for what it says about the state of the country as a whole. The pursuit of wealth for wealth's sake is a poor foundation upon which to build a modern economy well-suited for the 21st century. Surely FDR is right when he reminds us that it is better for us to become "our brother's keeper" than to "pass on to the other side."

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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