Thursday, April 09, 2009

A Test
Regular readers here (all four of you) know that I supported Barack Obama in large part because I thought he had the nearly unique ability among contemporary American politicians to not just respond to and/or try to manipulate public opinion in support of policies that he (and I) might favor, but to actually shift public opinion over time through education and persuasion. This means both directly engaging the public through speeches, interactions, electoral and issue campaigning, and so forth, and resetting the terms of debate by mobilizing favorable segments of the public to push intermediaries in the news press and the culture at large toward more favorable terrain. As Lincoln and Roosevelt showed, it's neither a quick process nor something that necessarily can happen absent traumatic circumstances like Civil War or Depression, but it is possible.

I mention this again because Matt Miller puts his finger on a concern that could turn out to be Obama's biggest short-term political challenge as well as the greatest test of his ability to move the needle on fundamental questions of American political culture: the "best" size and role of government, rates of taxation and level of engagement with citizens' lives. I share Miller's diagnosis but dissent from his prescription:

Obama never answered the question of how his epic debt can be squared with his call for generational responsibility. He can’t, because it can’t.

Behind this fudge is a secret: Obama and his advisers expect to limit such debt via broader tax increases, presumably in a second term. As every honest observer knows (and as I show in this chapter of my book The Tyranny of Dead Ideas), once this recession is past, taxes will go up in the years ahead no matter who is in power. John McCain’s top economic advisers from the campaign say so themselves. That’s because we’re retiring the baby boom, which means we’ll be doubling the number of people on Social Security and Medicare. We already have trillions of dollars in unfunded promises in these programs. The math simply doesn’t work at current levels of taxation.

...[T]he one hard truth Barack Obama won’t utter is that all Americans will have to pay higher taxes before long.

Why not? The answer, at one level, is obvious, but it’s instructive to dissect. Having sat in such meetings in the early Clinton years, I suspect the conversation at the White House ran something like this. Yes, the president’s advisers told him, at some point taxes will need to rise broadly for the reasons described above. If we didn’t inherit this economic mess, we might be discussing it now as part of a plan to put Medicare and Social Security on a sounder footing. But tax cuts are needed for most Americans to combat the recession—and, by the way, that’s what you promised in the campaign. Saying the truth publicly—that taxes will need to rise once the recession is past—will let the GOP brand you as a tax-and-spend socialist. They’ll try to do that anyway based on the modest taxes for the top you’re proposing, but if you go this further step, their charge may well stick. Given how tough times are for most Americans today, floating the prospect of future tax increases would cost you too much support, and your ambitious agenda—hard to enact under any circumstances—would be imperiled. Better to finesse this tax thing for now.

Emphasis mine. As the article continues, Miller argues that it really isn't "better to finesse" this long-term question--but I would counter (unhappily) that while he's probably right in a perfect world, in the one we all live in it's irrational to sacrifice the entire progressive agenda on the altar of immediate intellectual honesty.

Crazy as it seems, I think the problem is that for those not paying fairly close attention, which is most people, the connection between taxes and government services doesn't immediately come to mind--certainly not for government services of value to the individual who's thinking about it. After forty years of right-wing framing and advancement of a critique that, to be fair, had some basis in reality, the notion that comes to mind when one hears "higher taxes" is of Big Gummit reaching into one's pockets to throw pizza parties, treat special interest buddies to hookers 'n' blow, provide full body massages to welfare dependents, or something similarly silly and/or offensive. As Miller points out, Obama or any president at this point would face the choice between raising taxes and cutting entitlement spending. But until a measure of rationality is reintroduced into the discourse, the only reasonable political move is to BS and delay the painful moment when the subject is raised. Even if public confidence in government is rising some (as Obama's approval ratings suggest), I can't imagine it's close to where it would need to be to ease congressional Democrats who recall 1994--when a small tax increase, which eventually succeeded beyond anybody's hopes, demolished big Democratic majorities in the midterms.

Maybe the real question is what flavor of irresponsibility one prefers. Mark Schmitt writes that after years of the Bush administration and congressional Republicans pushing tax cuts first, then bringing up the spending side afterward, progressives have flipped the script:

The economic crisis makes deficits not just acceptable but essential as economic stimulus. We can advocate new investment in neglected priorities such as education, clean energy, and health reform, while avoiding the annoying question: How are you going to pay for all that? Just as the Republicans were able to treat taxes in isolation, we have the privileged position -- granted by unhappy accident rather than Ponzi tactics -- of being able to spend without consequence.

But the separation of spending from taxation cannot last, either. Stimulus is, by definition, temporary. As President Barack Obama's first budget proposes, when the economic cycle turns, we will need to bring the deficit down to a historically manageable level. While economists have different views about what that level is, it is unquestionably below the level projected under current tax and spending policies.

As Schmitt notes, the Bush-era Comptroller General, David Walker, believes that our political system is simply unable to embrace the hard decisions and has called for a "fiscal responsibility commission," which could somewhat take elected officials off the hook for having to raise taxes AND cut services--which I remember hearing a bipartisan panel of three experts, including Walker, saying a few years back would be the only way we could eventually dig out. (I think this was that.)

Schmitt wants to take issue with Walker's prescription and let the debate play out through normal channels, writing: "Progressives have nothing to gain from evading the long-term fiscal crisis. Genuinely transformative economic policy requires connecting the investment we favor with the taxes that will eventually finance it and being willing to restructure the tax system entirely." If this is to happen, though, the country's most prominent progressive will have to lead the way.


Anonymous said...

Myself, I would vastly prefer Obama to lay it out straight. If our country can't learn to stop punishing pols for speaking the truth, then we will run our country into the ground and have little cause to believe we deserve better. As is, I feel, in some ways, that Obama is falling into the trap of behaving just like anyone else who's gotten to the top of the political structure. Didn't he promise to stop that?

A big problem is that you can have a visionary guy or gal reach the top, but all of the advisors and seasoned strategist are going to give that person the same old party-line advice.


David said...

I think it's too soon to tell for sure, but this is a concern of mine as well.

Probably a case could be made that particularly in a recession, "telling difficult truths" carries political consequences. Already we've seen a lot of pundit types blast the guy for "talking down the economy." Now of course he's sounding some optimistic notes, and we're starting to hear that he's blowing smoke up the collective American tuckis.

I think one reason I'm writing less about politics here is that I'm finding that day-to-day inconsistency less interesting or significant.

The Navigator said...

If I were a Dem in Congress or the White House, I'd be thinking about 1994 too. In real life my parents are trying to clear out boxes of old stuff and they recently presented me with a box of files full of newspaper articles from the 1989- 1995 period, collected by yours truly. Going through them and picking out what to discard, it's a little scary how many parallels I'm seeing between then and now. Quite a few articles where you could more or less substitute some proper names and it would read the same. (One interesting side note: there was an actual, elite-level discussion in 1991-93 about abolishing the CIA entirely!) It's depressing reading. There's one story from Feb. 94 about how labor law reform (basically, a proto-EFCA) would probably get pushed off til after the midterms, when hopefully there'd be more support for it; Big Labor totally agreed with that strategy. Sigh.

David said...

That's interesting, and a little worrisome, but I think the differences between '94 and '10 overshadow the similarities--from Obama having his act together (and enjoying much more ideologically coherent majorities in Congress) to the Republicans being much more discredited after eight years of Bush II than four of Bush I.

I remember nothing about that "abolishing the CIA" debate. Were there any non-usual suspects (i.e. non-lefties) on board for that?