All Life Is Problem Solving

I’ve always been a Democrat and a pretty progressive one at that. But since the Carter Administration, I’ve been pretty dismayed by the tendency of Democrats who have won the Presidency, or gained control of Congress, to give away their ability to produce solutions to problems that serve the interests of their constituencies by adopting some rule or regulative ideal that makes it impossible to serve those interests. I think this tendency began with Jimmy Carter. The Carter Administration was socially liberal and also idealistic in foreign policy. But in the area of domestic economic policy it adopted the ideal of fiscal responsibility and made various fruitless attempts to “Balance the Budget” by being frugal and refusing to stimulate the economy. President Carter ran the most conservative economic administration since Dwight Eisenhower’s, and his policies seemed to have the effect of persuading the American working class that the Democratic Party was no better friend to them than the Republican Party. When Reagan showed up in 1980, he had a comparatively easy time persuading many industrial workers to vote for him because he reflected their social conservatism and Carter’s tenure had not been particularly good times for them anyway.

All through the Reagan years, the Democratic controlled Congress reflected their loss of faith in Keynesian economics, and in their traditional role as protectors of the “have nots,” while running the other way in the face of Reagan’s ridiculous supply-side economic policies and his pandering to social conservatives. This was done in the name of bipartisanship. But it really signaled the failure of the Democratic Party as the legitimate representative of its historical interests. When President Clinton took over, the approach followed was a practical one of passing very incremental changes and implementing them competently, while studiously avoiding any conflicts that might educate a new generation about the historical ideals that the Democratic Party has always stood for, including greater economic equality, social and economic democracy, and individual civil liberties. Some will say that the Clinton efforts to pass universal health care were an exception to this strategy, and this is true in that the Health Care reform legislation would have been a major advance. But, even here, the characteristic short-term manipulative pragmatism of the modern Democratic Party can be seen, and may have been responsible for the failure of reform. I say this because the Clintons were so careful to put together a construct that wasn’t obviously “socialized medicine,” that the cuteness and complexity of their proposal went right by the public, and it was just as vulnerable to the “Harry and Louise” charges of “socialized medicine,” as any national health care/ single-payer plan would have been. Unfortunately, though they didn’t escape the stigma of “socialized medicine,” because of its complexity, they also sacrificed the ability to defend it. If only they had proposed a simple single-payer scheme and argued for it straightforwardly, they might have been able to persuade people that it was good for them, that it had worked well in many other western nations, and that it would work for them too.

In other areas, the Clinton Administration followed economic policies attempting to triangulate on the political center of the 1990s that were not particularly progressive. In fact, they were not far different from those of the previous Republican Administrations, putting aside more socially liberal policies and a critical tax rise on higher incomes that eventually produced a surplus. But, here again, was another Democratic Administration that didn’t seek to continuously achieve greater equality, social, and economic democracy, and stronger civil liberties. It didn’t do very much to re-acquaint people with the historical mission of the Democratic Party as it had been expressed in every Democratic Administration from Woodrow Wilson through Lyndon Baines Johnson. It did very little to win back working Americans to the Party. It continued to stabilize the interest group and identity politics structures that had characterized the Party since Carter, and it continued to reinforce the themes of short-run pragmatism that had come to constitute the chore of Democratic behavior.

We come now to Barack Obama’s Administration. What do we see? We see the most ambitious statement of positive presidential objectives since the Johnson Administration, and perhaps since the New Deal. But we also see an attempt to accomplish those objectives by triangulating on measures that will be viewed as centrist. Thus, the financial system needs Governmental assistance, so the Administration selects an aid plan that minimizes disruptions to existing financial structures and Wall Street, and doesn’t address the underlying causes of the collapse of 2008, namely lack of regulation, and high rates of foreclosure that are still creating toxic housing assets for banks.. What it doesn’t do is to take the advice of the top economists in the United States, force the banks to value their assets and liabilities honestly, and take into receivership those whose liabilities exceed assets.

Next, the economy needs a stimulus that is sure to have an impact in cutting short the depression. Again, economists who have recovery as their primary purpose recommend a stimulus package focused primarily on public projects of one sort or another totaling $1.3 – 1.6 trillion. Instead the Administration aims for a much smaller package in total assistance that it believes will receive bipartisan support, and, in order to get a truly miniscule amount of such support, compromises on one that contains far too much in tax cuts, and far too little in public project expenditures to do the job for main street. A few months after passage it has to face Republican complaints that its stimulus package is ineffective because the unemployment rate has hit 9.4%, without having any reasonable projection that its stimulus package will show its effectiveness any time this year.

In health care reform, the Administration decides that it wants to pursue bipartisanship and goes along with those who want to take a single-payer plan “off the table”, even though it is favored by a substantial majority of voters, and allows the debate to focus on various proposals that contain public option plans of varying strength, offer a “trigger” for a public option, or provide no public option at all. All of these alternatives are harder to understand than single-payer would be, and all of them are less favorable to those lacking health insurance, or who have health insurance that will let them down in a crisis, than a single payer plan. At this writing it’s not clear what kind of health care reform will emerge from the tug of war we’re in the middle of. But it is pretty clear that the Administration, as it did in the case of the stimulus bill, has sacrificed the negotiating leverage and intense public support that might have been created by placing a strong option on the table. It is also pretty clear that in the case of bailing out the financial system, it has handled things in such a way that it has undercut its own ability to control abuses and oppose continuation of practices that have gotten the system into this mess, while at the same time creating the impression that the Administration is the friend of Wall Street and not Main Street. This picture comes out even more plainly when we compare the financial bailout with the auto bailout. The appearance of a double standard is palpable in such a comparison. And whether there are good reasons for the difference in treatment or not, the narrative of the double standard plays into the long-running narrative that the Democratic Party and our Democratic President care much more for the interests of Wall Street than Main Street, and cannot be counted on to defend the interests of those “who work hard and play by the rules.”

We can see this narrative appear again in relation to the recent Credit Card reform legislation. The Congresspersons and Senators who passed it tout it as a bill providing tough constraints on the Credit card Companies. However, those constraints don’t kick in for nine months. And, in addition, they do nothing to cap credit card interest rates, which by any historical or religious standard are truly usurious, especially during a period when the credit card companies’ own rates are very close to zero. The Democratic Party has all sorts of excuses why its credit card reform legislation couldn’t be tougher than it was. But the truth is that caps on interest rates were never really on the table, and that the lawmakers were quite solicitous of the companies in allowing a period of preparation for changes, that provides plenty of opportunity for the Companies for jack up everyone’s interest rates before the new rules are operative. The effect of the bill, rather than relieving the immediate burden on consumers imposed by the Companies, is much more likely to be make that burden much heavier in the immediate future, when that is the last thing that is needed from the viewpoint of economic stimulus. And by the time the bill is operative it will not matter that it requires the companies to warn consumers of impending changes in interest rates, simply because the companies will have imposed all the increased rates by then. This bill is so much window dressing, since anyone owing $10,000 who lacks the means to pay an account off and suddenly finds that their interest rate has increased from say, 10% to 30% overnight is heading for default anyway, probably much before the new rules, which cannot help them in any case, take effect.

Another exercise in window dressing was carried out by Congress and the Administration in the recent mortgage legislation which originally provided the capability for people to ask bankruptcy court judges to “cram-down” the value of mortgage notes so that those approaching foreclosure could keep their homes. The Administration did not fight for “cram-down and the mortgage companies and banks successfully got it cut out of the bill, which now does virtually nothing to decelerate the rate of foreclosures.

These instances all illustrate the approach of the Administration to legislative activity and conflict. It is invariably to frame legislative initiatives in such a way that because these initiatives triangulate on the Center, there is little or no pressure to compromise on the Republicans, while the Democrats start with a compromise position of some sort, and then have to fight hard just to get a compromise that may do some good. Most often, however, the legislation emerging from this sort of process, doesn’t solve the problems it sets out too solve. The end products compromise the solutions inherent in the legislation, so that the Democrats end up failing to serve their constituents or accomplishing anything noteworthy.

I am not trying to say here that compromise should be abandoned by Democrats. Compromise is often necessary to get legislation passed. But compromise should not be one’s goal at the beginning of the legislative process. It should never be one’s strategy, offered at the beginning of a legislative negotiation. One’s goal, instead should be to pass legislation that will really solve a problem of one’s constituents. Compromise should be a tactic one uses to get a bill that will do some good when one cannot get a bill that will best solve a problem. It should never be used as a strategy. When compromise is a strategy, the Party using it gives the game away to the Party that is using it as a tactic. Democrats have been using compromise as a strategy since Jimmy Carter, and that’s why they never get what their constituents want, but only get some second-rate bill that provides an illusion for the gullible, but no reality for those really needing relief and a New Deal.