Is the revolution over?

Megan McArdle writes:

There's a lot of sadness on liberal blogs these days.  What happened to
Hope and Change?  Climate change is coming sometime next year, maybe. 
Financial regulation also isn't coming anytime soon, and what's
proposed is the minimum set of politically feasible propositions rather
than a sweeping overhaul.  And health care? 

There is more at the link and I suspect it is mostly or fully correct.  Here is Ezra on health care reform and the very big chance that it might fail.  I'd just like to repeat a simple question I asked at the beginning of the Obama administration: which would you rather have, the fiscal stimulus or $775 billion in public health programs?

Even better, how about $300 billion in stimulus — the immediate stuff like aid to state governments — and $475 billion in public health programs?

At the time no one except a few progressives thought such a question was particularly relevant.

Note that the economy has seemed to stabilize, more or less, and well under ten percent of the stimulus money has been spent to date.  Moving forward, if no further major programs will be put into place, how would you like to spend the rest of that cash?


And I don't mean this post as a poke at Democrats in particular.  Conservatives, libertarians, etc. all commit their own versions of this error, at least if they find their way to power.  The basic mechanism is simply that policy advocates underestimate the opportunity costs of the measures they propose, as they tend to see those measures as more "win-win" than others are willing to believe.


I definitely committed this error to a certain extent but on another level it wasn't an error at all. It's a false choice between a bigger stimulus and more healthcare. If the stimulus was smaller the fight for a more robust public health plan would be no easier. I think it is less that the simply underestimate the opportunity costs, and more that the politicians and pundits opportunity costs aren't measured in dollars but in more nebulously defined political clout. Because of the way people (can't) deal with big numbers moving from a 200 billion dollar stimulus to a 700 billion dollar stimulus is much easier than having one 200 billion dollar stimulus and one 500 billion health care program.

"Sadness on liberal blogs"??? That sounds like wishful thinking on the conservative blogs. Even Krugman, long an Obama skeptic, is coming around to being impressed with Obama now.

Obama's popularity is currently 25 points higher than Bill Clinton's was at this point in his presidency and 10 points higher than Bush's. Obama is by far the most popular figure in the nation. Meanwhile, GOP support is literally at a record low. On specific issue after issue, Americans support Obama and the Democrats.

Does doing health care, stimulus, energy, environment, financial reform, etc all at once spread his political capital? Maybe, but it also dilutes out the focus of people like Limbaugh, Gingrich, Lott, McArdle, Krauthammer, etc. who are trying to fight a rearguard action to prevent change. The progressives have far more political power, popularity and intellectual support than the opponents of change so they may as well press their advantage across the board while the memory of Bush and GOP rule are still fresh in everyone's mind. Why let their opponents concentrate their relatively small resources on stopping just one initiative?

Serious people did not expect this to be easy or perfect - that's a straw man. But for the first time in two generations, real progress is likely to be made on long-overdue reforms in health care, financial reform, energy and other areas.

Tyler wrote: "Note that the economy has seemed to stabilize, more or less, and well under ten percent of the stimulus money has been spent to date."

I love this jab as much as the next anti-stimulus critic, but is it fair? In the Keynesian models that presumably justify massive fiscal stimulus, does the first round of money have to actually be spent, or is it enough if people expect that it's coming?

"We don't live in a monarchy or a dictatorship"

Um, so does that mean that popular support is irrelevant? I don't follow your logic.

I don't really understand, especially the part about libertarians getting power.

When the problem is getting something complex exactly right, you'd better not do more than one thing at a time, unless you are in a purely opinion-based endeavor like politics where people's memories, your tenure, and the results cycle do not match up. In reality-based endeavors, "getting something done" is not the measure of success. We got a lot of loans done and got a lot of securitized deals done.

The problem is that the political fight is way too easy. They don't have to recognize reality until they slam into it like a brick wall years down the road. They don't understand or recognize trade-offs at all. Even if they have to log roll with the other side, the other side just demands more goodies. There is no third side that demands fiscal responsibility that must be reckoned with (see above).

Perhaps Obama is banking on a second term and he is more pragmatic than the lefties would like. That's the bad news.

Maybe Obama is employing a conservative strategy to take advantage of all the idle conservative resources.

From Ezra's piece suggesting that the answer is staring us in the face: "Rather than protecting the private insurance system, the Finance Committee could include a public plan with the ability to bargain to Medicare rates, thus saving, according to the Commonwealth Fund, 20 percent to 30 percent against traditional private insurance."

I hate this argument so much. Government bargaining rates and saving 30% over private insurance and all that. You'd almost think there's no tradeoff. If you rephrased this argument as: "The solution is fundamental reform to reduce the amount of healthcare available by capping return on healthcare investment," that suddently doesn't sound like an answer, does it?

With the exception of healthcare which obviously would cost a lot this post doesn't make much sense. Financial regulation is not traded off with dollars of stimulus nor is this the case for the climate change bill, although auctioning off all of the permits would obviously raise a lot of revenue. Progressives are just as upset about detainees and gay rights, again these issues are difficult but they have nothing to do with the current size of the deficit.

I had not thought about today's politics this way. Without addressing the feasibility, desirability or likelihood of the contenders' desires, I see a large gap between expectations and potential outcomes.

For good or ill, Obama has promised to meet the needs/demands of his supporters. What we are beginning to hear now are the cries of "faster, faster" or "not enough".

Unfortunately for Obama most of his promises involve complicated domestic issues. He has to depend on Congress. An organization not noted for its alacrity. And to a great extent constrained by time, procedure and the reality of having to create legislation that satisfies 50% plus one vote.

The ideal of Hope and Change has run smack dab into the reality of Madison's factions.

Maybe there is hope for us yet.

You're posing a false dichotomy, Tyler. First of all, there's no reason fundamental health care reform needs to be tremendously expensive -- as even the Ezra Klein piece linked to explains. The United States spends twice as much money on health care as normal industrial countries and gets worse coverage, and SOME of that is subsidy of medical research and thus probably worthwhile, but most of it isn't.

Secondly, a smaller stimulus might have led to deficits exactly as large or larger, which was the major point of the stimulus (one often considered too small, not too large, to work). Since the world economy has in fact been shrinking at 1929-like rates as is, and since the United States economy is still awaiting the possible further blows from when the first unemployment checks disappear, I don't think you're right to assume any stability has been reached.

I'd like _more_ serious health care reform, a bunch of mass-transit and reforestation spending added to the stimulus, and a smaller deficit. If necessary, I'd be more than happy to tax the well-off to get there. But it's not clear that it would even be necessary.

Infrastructure, infrastructure, infrastructure.

On specific issue after issue, Americans support Obama and the Democrats..

Really? Issue after issue?

A substantial majority of Americans say President Obama has not developed a strategy to deal with the budget deficit, according to the latest New York Times/CBS News poll, which also found that support for his plans to overhaul health care, rescue the auto industry and close the prison at Guantánamo Bay, Cuba, falls well below his job approval ratings.

A distinct gulf exists between Mr. Obama’s overall standing and how some of his key initiatives are viewed, with fewer than half of Americans saying they approve of how he has handled health care and the effort to save General Motors and Chrysler. A majority of people said his policies have had either no effect yet on improving the economy or had made it worse, underscoring how his political strength still rests on faith in his leadership rather than concrete results.

"Obama's popularity is currently 25 points higher than Bill Clinton's..."

Hmmm. The bubble from Hope. Pop!

Severance packages.

Note that Colin, aside from being presumptuous and rude and incorrect, fails to address my point that the stimulus was designed to save/create jobs, thus creating tax revenue, and a larger stimulus would have been designed to create more revenue. At a time when tax revenue is rapidly disappearing, in a way that happens to disrupt and/or destroy millions of individual lives. This is also part of what I feel Tyler Cowan was choosing to overlook.

Most liberals, in their heart of hearts, should admit that the difference between Obama administration policies and actions and Bush administration policies and actions, at this point so far, is less than they had hoped and expected.

Hence, a sadness.

Note: I do not plan to disagree with John Thacker about the disconnect between what I'd like to see, and what Congress will do. But that has less to do with the Blue Dog Democrats than with the far-too-numerous Republicans who give the Blue Dogs such power.

Which in turn has to do with my views being outnumbered. I know that. Duh. I'm not sure why Thacker thinks it's therefore ludicrous for me to argue for them, though.

"The rather huge difference being that Keynesian stimulus saved American democracy in the 1930s while bringing unemployment from 33% to near-zero (if you count WPA and CCC and wartime jobs, which I do) or a still-impressive 10% (if you don't), meanwhile creating a physical, educational, scientific, and knowledge-base infrastructure of long-term value. The only bump on the road to recovery in the 1930s, a large bump, was when Roosevelt temporarily abandoned Keynsianism after the '36 elections.

The Laffer curve experiments led to increased poverty and ballooning debt. Yes, we on the left find these differences meaningful. We're silly that way."

Yeah you are silly that way-because FDR's wild fiddling with the economy managed to make a depression last nearly a decade and while he was maliciously proscecuting people for not paying TAXES they didn't owe, attempting to pack the Supreme Court because they wouldn't cave to his machinations-no less a liberal icon than JM Keynes left a meeting with FDR less than impressed with his grasp of economics.

I find it hilarious to read the writings of people on the left-they vigorously assert independence from religious doctrines; yet they have a heaven, saints, deities and now they are so detached from reality as to believe they have found god.

From the book "acts of the one", Chapter 6 Verse 17,

And, lord Obama spoke and he was troubled by a fly, so the lord gathered his concentration and smote the fly and the fly was dead; all his angels gathered to hear the lord saw this and were made humble by the lord's wrath upon the fly.

End the wars
Universal single-payer government administered health care
preK-20 public education
Remediate the environment
green the transportation and energy systems
broadband everywhere

More than enough things to do to keep everyone gainfully employed...

You sound so naive. You cannot govern in a country (a basically conservative country) like the U.S. from the radical left. Get over yourselves.

Hitting rock bottom and staying there is stability as well. Will "Yea, stimulus worked" be the cheer?

Any "stability" or decline in the rate of decline is probably due to the Fed printing $1.2 trillion to buy treasuries (assuming that actually was done).

When investors sell their bonds, they must buy something else. That adds to demand in the next bubble.

There's a lot of sadness on liberal blogs these days. What happened to Hope and Change? Climate change is coming sometime next year, maybe. Financial regulation also isn't coming anytime soon, and what's proposed is the minimum set of politically feasible propositions rather than a sweeping overhaul. And health care?

So folks are impatient. This is not an indicator for future success or failure. Nor should it be a call to bulk up on steriods to speed up the heavy lifting. Sheesh. Big ships don't turn on a dime and societies don't change overnight.

Let's spend a brazilian dollars. Let's give everyone 10 billion dollars. Let's execute anyone who doesn't quote the "we are all equal" Marx Scout pledge. Let's pretend there's no human nature. Let's build a suspension bridge to the moon, and paint it rainbow colors to celebrate diversity. You people are such weak minded pansies....and the rest of us have to pick up the slack and be on the ready CONSTANTLY so that we don't go down a rat hole buying magic beans, or whatever else feels good to you at the moment.

Thanks, so very deeply appreciated.

I think that the most perceptive Obama has given is that
he is steering a carrier, not a PT boat, and changing coarse is a time consuming proposition. When you consider the various and sundry fronts (issues) that are at least being brought forward, you have to , at least, respect that the necessity is great, and that
the important issues are identified, being worked on, and, while you may not agree with all of the solutions, it sure beats what we had before, and it has been a busy 5 months.

you clearly think FDR and Keynes are worthy of veneration

I think, because the statistics and the social histories and the voting patterns of the time tell me so, that their stimulus policies (heavily impacted as well by for example Frances Perkins and Harold Ickes) dramatically reduced unemployment and poverty, produced extremely rapid sustained growth over a period of 13 years, and produced many things of lasting worth that the private market showed no interest in handling.

Religion does not enter into it, and I can't say I much admire, e.g., the internments at Manzanar, or the fire-bombing of Dresden. Sober judgment does, nonetheless, tell me that FDR and Keynes each accomplished one hell of a lot more with their lives than I or, almost certainly, you. More, even, than Tyler Cowan, whom I also admire rather strongly. While, obviously, feeling free to disagree with him when appropriate.

That you, Phil, can only see admiration of others as "worship" suggests narcissism on your part to me. A guess, obviously, only a guess.

> because the statistics and the social histories and
> the voting patterns of the time tell me so,

Ah, indeed. The problem is, your statistics and social histories have about as much relation to the reality as the history of Soviet Union taught in Soviet schools had to the reality.

Dig your head out of sand and read the alternative tellings of the history. Yep, those which point out that Depression ended when government spending was cut by 2/3rds - after FDR was safely dead.

Besides, only a religious nut can think that plowing crops under, digging holes just to fill them in the next day, and spilling milk into rivers can fix the economy.

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