Monday, December 10, 2007

The “L” Word

Now, I'm liberal, but to a degree
I want ev'rybody to be free
But if you think that I'll let Barry Goldwater
Move in next door and marry my daughter
You must think I'm crazy!
I wouldn't let him do it for all the farms in Cuba.

Bob Dylan I Shall Be Free No.10

A week ago my wife had a colonoscopy. She passed with flying colors. My role was to chauffeur, to tote stuff to the car, and to hold my wife’s hand as she went from cloudy headed to groggy after the procedure was over and the anesthesia had done its thing. I knew there’d be some waiting till we could go home so I brought a book along. I was reading Paul Krugman’s latest, The Conscience of a Liberal. The nurse who was attending to my wife saw I had a book in my hand and asked what I reading. After I showed it to her she asked, “you’re not a liberal, are you?” as if that were a condition on a par with venereal disease. We then had about a five minute exchange about my job, how I dress (pretty traditional if you ask me but it was cold that day so I was wearing thermal socks that had some color to them), and my style of speech, all of which unmistakenly pigeon-holed me as a professor – one of those, which if it weren’t a college town, might be a cause for alarm. I could have done without the chit chat. At least she took good care of my wife.

But here I don’t want to ponder how the rest of the world views those of us in academe. I’m writing as one insider to another. What does it mean to be a Liberal in how we do our jobs and in those norms we’d like to see followed in Higher Ed? Does advocating for learning technology necessarily make one a liberal because implementing the technology requires change? Is there some tie between Liberal in the workplace and, for example, our attitudes toward the upcoming presidential primaries and our preferred candidates? Those are the questions I want to address. Recently I’ve had several instances where colleagues either referred to me as a liberal or where they referred to others as more conservative. When a group of others make a similar if not identical determination, it’s time to investigate the proposition more closely. That’s one of my work maxims.

Here are a couple of other axioms that guide me on the job. The first I call the traffic helicopter approach to management. There are a lot of bottlenecks in implementing learning technology, perhaps more on a big bureaucratic campus like mine than at smaller colleges and universities. The trick is to spot them early and once having identified a problem then to “reroute traffic” so to speak. I was able to do this reasonably well when I ran the small Sloan Center for Asynchronous Learning Environments (SCALE). It became harder to do as we got bigger and became the Center for Educational Technology (CET) and became still more difficult when CET merged with the big academic computing unit, then CCSO, to form CITES. I’m doing a bit more of it now in my new job, though we also have elements of gridlock that I associate with large bureaucracies.

The second I’ve mentioned before in other posts. It’s called “no surprises” and is a sound principle of IT management (really of all management. The Bush Administration would have fared much better with the public had they practiced it.) It means that when some information becomes known internally and that information will affect the decisions of others, get that information out now, even if those changed decisions are perceived as not desirable by you. No surprises makes sense as a long run approach to managing information flows. If you take your medicine early and often, you can limit the pernicious consequences of the negative information. It’s not that people will love you for getting the information out, but if you get a reputation of holding in bad news, nobody will trust you. That’s worse, much worse.

I’m now going to apply those principles in critique of Krugman’s book. I hope it to illustrate my approach more generally and to give the reader all the ammunition needed to make a determination of whether I’m liberal or not.

Krugman’s ideal society is a middle class world that he knew in his youth with little income inequality, a general sense of optimism, based on real opportunities for all. This is the world that the New Deal created, one that emerged after World War II and held together for about 30 years thereafter. FDR, as creator of the New Deal, is Krugman’s hero. Krugman would like to see a return to the principles that guided the New Deal, mainly that society should actively redistribute income to create more equality. This is a society with progressive taxation, a large fraction of the workforce unionized there by driving up the incomes of the working class members of society, and some substantial social stigma attached to CEOs and other high powered corporate executives receiving exorbitant compensation. In the main I agree with Krugman on this. Where I might disagree a tad, at least with how this was framed in Krugman’s book, is that there needs to be incentive to encourage innovation in society, the ‘70s were a period of no productivity growth and ultimately were marked by “Stagflation,” but we’ve swung way too far in that direction since the start of the Reagan Revolution.

Krugman argues that the more recent move toward inequality in income is not a consequence of globalization, as some others have argued. Rather, he asserts, it is a consequence of deliberate political acts. The welfare state of the New Deal and later the Great Society would have sustained if the Republican party had continued to be dominated with Eisenhower Republicans, who were moderate and not so different from their Democratic counterparts on the social agenda. (Did Ozzie and Harriet vote Democrat or Republican?) Krugman offers up Barry Goldwater as the father of “movement conservatism,” a different and more radical type of Republican; one who aimed to dismantle the welfare state. Goldwater failed miserably in 1964. But he sowed the seeds for what would come later. So far I’m still on board with Krugman.

The big issue for Krugman is how the radicalism of movement conservatism became so accepted, especially since much of the message was anti-populist, the very rich have benefitted enormously from the approach but the rest of us only a little and quite a few of us not at all. How can a rational electorate, the vast majority not in the very rich category, become enraptured by an approach to economics that does themselves a disservice? That is a puzzle which requires explanation.

Looking backward at history the path looks deterministic and there is a tendency to see things in terms of their primary cause. This partly explain why Krugman wrote the book he did. Further, Krugman is in an odd position writing this book, especially given his importance as a columnist for the New York Times. It’s as if much of the book is a primer for Democratic Presidential hopefuls, that they should press the points that Krugman argues for; to return to income redistribution policies that benefit the many. So he needs a winning rhetorical argument to win them over. As I’ve argued elsewhere, first here and then here, the best rhetorical argument comes from applying a very simple model in a consistent way and then just hammering on that over and over again. The model does all the work one needs to frame the issues. So the audience has no trouble understanding the points being made.

Western Europe (not so much the UK but certainly Scandinavia, France, Germany, etc.) has never abandoned the Welfare state; this in spite of globalization. Further, unions are much more prevalent there while CEOs are paid much more here. This makes the situation in the US look exceptional and so Krugman offers up an explanation that focuses on that. The coalition that Roosevelt forged for implementing the New Deal included the Dixiecrats in a crucial role. The south was poorer than the country as a whole and so it would benefit disproportionately from the redistribution policies of the New Deal. And the Roosevelt Administration more or less kept a blind eye to Jim Crow. Brown versus the Board of Education didn’t happen till Eisenhower was president.

But when it became clear that the Great Society aimed to improve the lot of Blacks in the country, something that Southern Whites were dead against at the time, there was now a reason for these same Southern Whites to vote against their own economic interests so they could put it to the Blacks. This was the essence of the movement conservative message and this is why it was a winning strategy, according to Krugman. First there were the Reagan Democrats. Then it became fashionable for Southern Whites to become Republican. That was the ballgame.

Krugman indeed hammers on racism and in my reading of the book he has two scapegoats – the Southern White racists and the politicians who have pandered to them. This scapegoat approach may be a good rhetorical device, but I quickly tired of it and then thought it limiting, even harmful. First, I believe it is not entirely accurate historically as the full explanation is more complex. Second, in terms of trying to implement redistribution policies, it is not sufficient to focus on the enemy who is them. One also needs to work through the enemy who is us. There is none of that till the chapter on Health Care reform, the penultimate chapter, the one chapter in the book I liked because unlike the rest of the book it got all the issues out on the table. But in all the prior chapters there is not this completeness in considering the issue. There is only the issue of racism, over and over again. Krugman must have written 5 times about Reagan announcing his candidacy for the Presidency in Philadelphia Mississippi, where the civil rights workers were killed. I get it. Keep it simple and stay on message. But as a reader I don’t have to like it. So let me take on the historical accuracy and enemy who is us issues in turn.

The ascendancy of movement conservatism was far from inevitable in my view. Many random events (random from the point of view of the story Krugman tells) ended up mutually supporting this outcome. None of them get a mention in Krugman’s book. I’ll focus on three of these.

Jerry Ford was a Republican in the Eisenhower tradition. Reagan tried to run for President in 1976. But Ford was the sitting President and he won the nomination. There is no way to know this, but I think it a likelihood that Ford would have won the election had it not been for the Pardon. After Watergate, most everyone hated Nixon, certainly Democrats and then many Republicans too. Ford explained that the Pardon was necessary for the country to heal. Maybe so. I’m not so sure. The Pardon was a huge assist to the Carter candidacy. Consider Ford as President from 1977- 1980, but imagine Ford facing the same Stagflation that Carter had to deal with and imagine the Shah falling and the hostage crisis in Iran happening anyway. Now when Reagan runs in 1980 it’s no slam dunk and quite possibly a Democrat wins that election as a reaction to the previous regime. But the Pardon set in motion the timing that we did observe. It’s not in Krugman’s book at all. It doesn’t help his case. But it clearly did set in motion a chain of events that contributed to Reagan winning in 1980.

Next consider that soon into Reagan’s term there was an assassination attempt on his life. This made Reagan a hero even to those voters who didn’t agree with him politically. (I wasn’t one of them. I never liked Reagan. That may be prima facie evidence that I am a liberal.) He was able to create a unity of purpose in the country that is relevant for the next point. This is the same type of support the Bush II received right after 9/11.

Paul Volker was appointed by Carter. There was a horrific inflationary expectation built into our economy when Volker took office. There was a lot of debate at the time of whether one could take inflation out of the economy and achieve a soft landing at the same time. Volker did the former but not the latter. He pursued a tight money policy that made credit hard to obtain. It induced a rather severe recession. The Reagan White House, for all the errors it made with Supply Side Economics, more or less let Volker have his way and did not impede him. Without Reagan’s popularity this wouldn’t have been possible, or at a minimum would have been much more difficult. So we endured the recession, wrested inflation out of the economy, and since then it has been much more under control. One of the unanticipated good consequences of the recession is that it encouraged the OPEC cartel strategy to unfold. The oil price drops made it much easier to keep inflation in check.

These macroeconomic wins happened under the Reagan watch. I think one can make a good case that Reagan policies did little to achieve them, other than, as I said, letting Volker stick with the tight money policy that was necessary at the time. This macroeconomic success allowed movement conservatism to grow more or less in an unfettered way. Again, none of that is in Krugman’s book.

Krugman also ignores two other factors I’d deem critical, not for his rhetorical argument but for implementing the redistribution policies he wants to see. The first is the graying of America and its effect as a political force. Krugman does say in his Health Care chapter that seniors consume health care disproportionately, but he doesn’t push on the political implications of that. Let me do that here. Quite a few of those Southern Whites who vote Republican, especially in states like Florida and Arizona, are formerly Northern Whites who have made the trek southward. Race may be a secondary issue for them but taxes are a big deal. They don’t like taxes. Especially taxes that are clearly redistributive in nature from old to young (think of funding for schools). When they were younger they may very well have been liberal in their political outlook. But a conservative point of view matches their current mindset. On the other hand, they treat Medicare benefits as an entitlement and would certainly not want to see those cut in any way, shape, or form. Indeed, they’d very much like to see the health benefits increase. They will consume those. This is simply an expression of self-interest, enlightened or not.

The other issue is the decline in the personal savings rate. My parents, who lived though the Great Depression, were voracious savers. It was habit for them. They lived frugally, if comfortably. They could have spent more on themselves but saved both as a form of self-protection for old age and so they could pay the college tuition for me and my sibs and also for the grandkids. My generation lives less frugally. The saving habit was not inculcated as severely. The perceived need was not so great. And in the next generation it is weaker still. Since by definition income minus savings is consumption, saving less means consuming more. Over consumption is like a more general form of over eating. At first it might actually be distasteful, but after a while it becomes addicting. We know it is very hard for addicts to get rid of their habits.

Those in society who are well off but not super rich, in other words those remaining members of the middle class, may very well dislike an income redistribution approach where they end up paying greater taxes without seeing any obvious concomitant increase in benefits, especially if their personal savings rate is low, because they’ll be forced to confront their consumption indulgence.

In other words, we’ve learned to be greedy and we’re used to it. Rising above personal greed is possible, first by making long term arguments about where we might end up, with society more healthy overall, and then also specifically in talking to seniors about what near term things can be done to assure them that changes put in place won’t be too drastic on them. But Krugman does none of that in the book. On the overconsumption, he writes a throw-away line to the effect that most of this spending is in housing and it happens as parents try to move to good school districts to get better education for their children. Of course there is an element of truth in this but it is not the whole story. Krugman ignores the rest of the story. In my view that is an error. Krugman wants to put a simple argument into the field. Simple arguments tend to win the rhetorical fights. But they are a bear when it comes time to implement policy.

Krugman argues that Health Care is the issue for the 2008 Presidential Campaign. I agree. He would really like to see a single payer solution but doubting that is politically feasible he suggests some alternatives. These will require additional funding. He argues this is doable simply from rolling back the Bush tax cuts. Those cuts are due to expire in 2010. But Krugman also notes that Health Care is an area that has been hyperinflationary and that is because almost any innovation – a new procedure or a new drug – raises the cost of care. So either Health Care may very well require additional funds beyond the Bush Tax Cuts, or the new solution will have to ration care in some sensible way. Coming to a resolution on that will not be easy.

Krugman also argues that if Health Care Reform is successful, then it will create a taste for government solutions in other areas (for example to replace all the old roads and bridges so we don’t experience another debacle like the collapse of the bridge over the Mississippi River in Minneapolis). He argues that is another reason why movement conservatives are against health care reform. And in that he is probably right. But what of the Liberals who actually want to see such investment in America. Where do they see the funds for doing that? And for those of us in Higher Education who may be expecting a jolt from the Feds so that like universal health insurance everyone in the country has a guarantee to be able to get a college education, how are we going to pay for it?

If Krugman were to take a No Surprises approach to his argument, I think he’d be forced to say your taxes will go up. Everyone’s taxes will go up. We’ll make the system more progressive so they’ll go up disproportionately more on the rich, but everyone will have to pay. That’s how we’ll fund the other government spending Krugman talks about aside from health care.

But there is no discussion of that in the book. There is only the scapegoating regarding racism and pandering to it. In the eye for an eye world that is national politics, perhaps Krugman needs to write his book his way, to counter all the rhetoric from the conservatives who don’t want to see health care reform at all. But, if that’s the reason, I wouldn’t use the word “Conscience” in the title.

I’m kind of surprised he didn’t make any argument about the enemy who is us. If we were talking about environmental issues, there’d be no getting around it. Maybe he feels we’re still not ready for those type of arguments. But I, for one, feel that putting them off makes it harder to implement his reforms.

At this point in my life I’m confused about whether the term liberal applies to means or ends. I’m not that far from Krugman on the latter, but am quite uncomfortable in what he writes on the former. What does that make me?

4 comments:

Steve said...

Intellectually honest? Someone without an axe to grind?

Lanny Arvan said...

Perhaps. It might also be just writing to the perceived audience with a guess of what they want to hear. Milton Friedman was the exemplar of writing and speaking to the simple model and hammering at it. One could make the argument that if it worked for Milton Friedman... But Krugman's audience is different.

Joel Galbraith said...

Haven't read Krugman's book, but it sounds like you may be more conservative than you'd like--or it may be fashionable--to admit. As an educator, I'm intrigued by the notion that conservative or even Republican views are out of place in higher education. Indeed, see myself as a conservative and agree with you on the ends (greater income distribution) your discuss...and even some of the the means (richer pay a higher share of taxes), but the implications of where we go with so much government is scary--be it Bush-style or its Democratic equivalent.
Anyway, I guess the main point I wished to make was to protest the undercurrent that higher education and conservative views were somehow incompatible. Unfortunately the labls simply do no one any favors.
-Joel G.

Lanny Arvan said...

Joel - thanks for the comment. I agree the labels don't help much. Most faculty I know are reluctant to take positions on political issues in their classes, for fear of appearing to lose objectivity. But students would benefit from hearing a well argued justification for a particular position. The labels make it harder to present such an argument, without getting inextricably wrapped up in it.

My employer is the University of Illinois, a government institution. If asked, I'd like to see my Campus expand its scope (with concomitant expanded funding). So I for one wouldn't argue for shrinking the role of government in the abstract. I'd rather see the question taken on sector by sector for the entire economy.