The Real Problem With Obama's Poll Numbers

My big takeaway today is supposed to be that Barack Obama is fading in selling his health care plan, as eroding poll numbers, both on health care and his job approval rating, threaten legislation in the coming year. As references to "Obamacare" rise, some blame the President for a poor sales job with health care legislation. I fault the President, but for different reasons.

Right now Obama is simply a captive to Congressional process. That process is messy, it's easy to view it as negative, and people are in general reacting to the ups and downs that wound the possibility of passing a bill. The President has no bill to go out and hawk because the Congress is deep into negotiations, so he's selling nothing, a difficult task for anyone. You could say that Obama should have just stepped in and laid down the law, but not only has that proven to fail in the 1993-94 Clinton health care plan, but I don't necessarily want executive dictates to trump Congressional process. I think there's a lot of unnecessary bottlenecks in Congressional process, like the undemocratic filibuster and the seniority system for Committee chairs (particularly in the Senate) and the anti-majoritarian nature of the Senate itself. But in general, we don't elect emperors, and checks and balances are by and large healthy, and I'm OK with Congress performing their task of coming up with legislation and the President performing his task of executing it. Obviously he has some input, but I don't want an executive dominating the process. The paradox of this is that, since people generally believe that a President can just walk in and magically implement his policies, his personal approval is getting dragged down by the slog of health care bills in Congress.

The other wall that Obama is running into has been described for years as the Two Santa Claus theory. For 30 years and more, the American people have been sold on the idea that they can have unlimited services and endlessly low taxes. Somehow the lower taxes generate enough revenue to cover all the services they desire. This was part of a Republican ideological project begun by Reagan aides to basically force Democrats into wearing the black hats, and it has turned into doctrine from then on.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections [...]

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness [...]

Democrats, (Wanniski) said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

The most important numbers in these collections of polls this week are this. People generally still want health care reform and they believe the system is broken. But they also believe that Congress should cut the deficit without raising taxes or cutting spending. With the caveat that we're talking about aggregate data and cannot make specific conclusions about individual beliefs on the deficit, taxes, and spending, this is not the result of one poll but pretty much the standard poll result over many decades, particularly when Democrats are in power and the deficit-industrial complex ramps up their rhetoric. Simply put, Republican fantasy projections have given the country an out to refuse to accept the normal choices that must be made to deal with reality.

If you don't have the time or inclination to obsessively pay attention to issues, I don't see why you wouldn't decide that we should just pay down the deficit but get good services like comprehensive health care reform but do it without raising taxes. It's very untroubling and simple, and if I'm working two jobs or busy with other things in my life it sure sounds like a good deal to me.

I agree that the President needs to do better in selling his plans to the public. A speech in prime-time, not a press conference but an actual speech, complete with Ross Perot graphs if necessary, as Nate Silver advocates, sounds like a good idea. But his problem is more about American political ideology than the ins and outs of this bill. America elected a Democrat because they didn't like George Bush. But they didn't elect a liberal ideology, even if they may agree with it on many points, because a liberal ideology wasn't on offer. Nobody in the Democratic Party has pushed back against the Two Santa Claus theory, or offered up a competing theory of their own, in the thirty-plus years since it was invented. Obama spent the first few months, when he had a honeymoon and his approval ratings were high, assuring everyone that 95% of Americans will see a tax cut, that he was pragmatic and will only go with "what works," and so on. And so when you get to an issue like health care, which does have moral overtones, which does speak to the fundamental rights of a society to ensure care for their sick and bleeding, there's no ideological foundation to fall back upon, no belief that America is worth paying for and those who use the commons to a disproportionate degree need to give a little bit to maintain the societal fabric. So we have an overhaul of health reform to expand coverage to everyone who needs it couched in the terms of cost curves and long term budget projections and constrained by the obsessive desire of deficit neutrality. This does not inspire activists and partisans to action. It does not force any thinking from those susceptible to attacks on "government-run health care" from the other side. And it does not break the underlying principles of the Two Santa Claus Theory. Nobody has fought the dominant wisdom, inside the Beltway and even in the country, and stated plainly that conservatives have lied to the country about economic issues for 30-plus years. The epic collapse of the economy under the Bush Administration provided an opportunity that nobody took.

Unless and until we start challenging conservative ideology and not conservative candidates, we will always have trouble making major changes because the public has swallowed a notion of government that makes no logical or coherent sense.

Gary Kamiya On The California Crisis

I'm sure many political observers will laud this New York Times magazine article on California's crisis and the men and women who seek to solve it, but I found it oddly pedestrian. The profiles of the candidates reveal little of substance, and aside from displaying the salient fact that Arnold has no interest in the well-being of his constituents, I didn't see the point.

“Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger said. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

Overall, I saw too much focus on personality in dealing with what is essentially a problem of process.

Actually, while I didn't agree with all of it, I thought Gary Kamiya had a much smarter take, and it didn't mention Arnold Schwarzenegger or the names of any of his potential replacements more than once. The headline, "Californians are sinking themselves," doesn't seem to match the bulk of the article, which focuses on the dysfunctional governing process.

The immediate source of California's financial problems is a lethal combination of ideology and rules. It is deeply politically divided, and its governmental mechanisms are completely broken. Bay Area leftists stare at Orange County conservatives across an unbridgeable abyss; a large and potent group of anti-government libertarians faces off against an equally powerful group of pro-tax, proactive government liberals. If California, like most states, required only a simple majority to pass its budget, the disagreements between these camps could be worked out; after all, the Democrats control the Legislature. But California requires a two-thirds majority, which gives the GOP, now dominated by anti-government, anti-tax ideologues, veto power over the process. The result is deadlock.

Compounding this problem is California's notorious initiative process, which allows voters to bypass the Legislature and place initiatives directly on the ballot simply by gathering enough signatures. The initiative process was originally passed by voters in 1911 to circumvent the power of the oligarchic railroad trusts by restoring direct democracy. And it still offers citizens a chance to take control of important issues. But it has gone out of control, abused by powerful interests who hire people to collect signatures and ram through bills that no ordinary citizen can be expected to comprehend. By sidelining elected officials, it achieves the worst of both worlds: It gives ordinary citizens, who lack requisite expertise, institutional memory and accountability, too much power, and then forces legislators to clean up their mess -- except that because of ideological gridlock and the supermajority requirement, they can't.

Kamiya looks at the three strikes law and in particular Prop. 13, which he views as the ultimate manifestation of the Two Santa Claus theory, that California can have endlessly lower taxes with endlessly more social services.

This was, in effect, a mass outbreak of cognitive dissonance, an up-yours delivered to government with the public's left hand, while its right hand reached out for Sacramento's largesse. Now, 31 years later, the bill has finally come due. There is no free lunch. If you want good roads, parks, decent schools (California's schools, once the best in the nation, are now among the worst) and adequate social services, you have to pay for them.

Out of this, Kamiya points his finger at the people who voted in Prop. 13 and failed to modify it over the ensuing 31 years, who are "self-centered" and have "not decided what it thinks about the New Deal, or government itself." They need to "grow up," Kamiya says.

I think this ignores the fact that Californians have traditionally been offered precious few choices to rectify the broken system. The Democratic Party essentially has made a pact with themselves to nibble around the edges for three decades instead of confronting the great unmentionable crisis of governance. People see the dysfunctional politics play out year after year and become rightfully disaffected with the system. And they are never told anything from anyone in a position of power to counteract the Two Santa Claus theory, and so they necessarily believe it. I don't blame citizens for responding to their leaders. The problem lies with the leadership itself, or more to the point the lack thereof.

I was 5 years old and on the other coast of the country when Prop. 13 was passed, and I'm not about to bear the brunt of the blame for that decision. I would blame myself if I continued to live with the failure of the political leadership to confront the root causes. But Californians are starting to use movement politics to go around the leadership and force the necessary solutions. The sheer enormity of the problem and the size of the state makes this a difficult option. But the alternative, to acquiesce and wait patiently for the leadership to figure things out, is unthinkable.

Bai Finds The Two Santa Clauses

Matt Bai, in his largely unremarkable and far from revelatory article about the Obama White House and the coming health care debate (Obama lets the legislature legislate! Sometimes he invites Senators to the White House!), does make an important point near the end. I've been talking a lot about how health care reform may crash on the rocks of having to pay for it, as enough members of Congress find fault with the multitude of options so that no consensus is reached. Bai recapitulates that nicely, and then makes a fine closing point:

THE NETTLESOME THING about leaving the details of the health care plan to Congress, though, is that this Congress, like most every other Congress, doesn’t appear inclined to pay for much of anything. And it is this part of the health care debate — where to find the money — that seems most likely to derail the process. Most discussions of America’s health care woes begin with talk of the uninsured — some 46 million of them at last count. How much a new health care system will cost depends primarily on how close to universal coverage you really want to get. On the high end of the scale, insuring every American might well cost as much as $1.5 trillion over the next decade at a time when deficits are gobbling up a greater share of the nation’s income than at any time since World War II.

The White House has focused mostly on new efficiencies in health care, insisting that lowering the costs of medical care could easily save $2 trillion in public money over the next decade. A coalition of providers, drug makers and insurance companies — no doubt looking for the best possible deal in health care legislation — helpfully vowed in a White House photo-op last month to institute changes that would lead to such savings, but their promise was maddeningly vague and utterly unenforceable (and in any event, the industry groups almost immediately distanced themselves from it). Short of realizing these projected savings, there are only so many ways to pay for health care — and, not surprisingly, congressmen and senators aren’t exactly lining up to embrace them. One way, as McCain proposed, is to rescind the tax exemption for some workers who receive health care benefits from their employers; Baucus is open to at least capping the exemption, but labor unions are adamantly opposed, and Rangel has publicly renounced it (though he and other House Democrats appear to be re-evaluating that stance). Another way is to slap new taxes on some of the products that cause health problems in the first place, like soft drinks, but industry lobbyists are already spending satchels of cash to head that off. Congress can always choose to slash Medicare benefits or the payments that doctors receive, but that idea generates about as much enthusiasm as you might find for putting George W. Bush’s face on the $5 bill.

In a larger sense, this may be the nagging flaw in Obama’s notion of the Congressional presidency, this strategy that leaves the lawmaking to Congress, even as it enables him to claim credit for one legislative success after another. Professional legislators can be great at devising complex language and finding creative ways to get a deal. What they are not especially good at — at least not in the current era — is making the difficult decisions that governing responsibly often requires. Left to their own devices, legislators rarely seem to ask the voters to sacrifice anything by way of taxes or entitlements or services, if only because voters don’t find the entreaties of legislators all that persuasive. And so, absent his own engagement, Obama’s vow to reverse our “collective failure to make hard choices,” as he put it in his inaugural address, may well be pushed aside for another day.

Bai's wrong about McCain, who wanted to eliminate the employer deduction entirely for all workers and replace it with a refundable tax credit to buy insurance. But overall he gets the dynamic right.

Obama actually has waded into this debate this week by announcing his support for using MedPAC to cut Medicare costs. But even that doesn't get you all the way to a deficit-neutral bill. And Bai is completely correct in arguing that Congress so often punts the tough decisions in the face of concerted lobbying efforts. He views it in the context of "sacrifice," which is the dead wrong way to sell it to the public, especially if he intends to mean that the best way to achieve health care reform is to inform the public that the government will take their Medicare away. But yes, he is basically laying out the Two Santa Claus Theory, the idea sold to the public by Republicans that Americans can have endlessly lower taxes and endlessly increased services with no parallel cost. That DOES have to change, and he's right that only a President can call on the American people to change their views on the matter. Democrats have refused to show leadership in this area for so long. Obama actually campaigned on it, at least in part. Health care reform probably hangs in the balance.