The transcript is here.
At one point, Shields says
this is beyond the Obama administration. If this goes down, if the Obama — if health care, the Affordable Care Act is deemed a failure, this is the end — I really mean it — of liberal government, in the sense of any sense that government as an instrument of social justice, an engine of economic progress, which is what divides Democrats from Republicans — that’s what Democrats believe.
At this stage, they are inclined to put the blame on the American people. Here is Brooks:
My big thought is, are we no longer the kind of country in which you can pass this sort of thing? And by that, I mean, when you were passing the New Deal or the Great Society, there were winners and losers.
But the losers felt part of a larger collective and they said, OK, I’m going to take a hit for the team. We may no longer have that sense of being part of a larger collective, so when you’re a loser, you just say, I’m a loser. And, as a result, you’re just not willing to be part of the group.
…we have lower social trust, lower faith in the institutions, lower sense of collectivity.
And those are deep social trends that have been building for decades, but it just makes it much harder to sustain this kind of big legislation.
Shields agrees:
The we-ness of our society, the we, that we’re all in it together, has really been diminished.
To be charitable, this narrative could be correct. That is, it could be that the wonks who designed Obamacare had the right idea, and that the American people are too selfish and too unwilling to trust government to allow it to be implemented honestly and properly.
However, I see things differently.
Start by asking why it is that Healthcare.gov is not as good as Amazon.com or Kayak.com. One answer is that the government is not good enough at deploying information technology. However, I think that is only a shallow answer.
The deeper answer is that when we look at Kayak and Amazon, we are seeing the survivors that emerged from an intense tournament. In this tournament, thousands of competing firms fell by the wayside. Competitors tried many different business models, web site designs, business cultures, and so on.
Healthcare.gov did not emerge from this sort of competition. It came about because Congress passed a law.
Central to my approach to economics, and that of other economists who are variously called Austrians or market-oriented economists or Smith-Hayek economists or what have you, is the respect that we have for the evolutionary process by which markets produce innovation and excellence. My sense is that what divides us from pundits like Brooks and Shields, and even from most economists, is the credit that we assign to market evolution rather than elite expertise as a process for solving problems.
I see the problem with the ACA and its rollout as a fundamental flaw of progressivism. It was passed, essentially, to make the progressives feel good about themselves. Made up a problem, them fixed it. My, don’t we feel good! After the ACA passed SCOTUS muster, it was time to move on to another “problem”. I really don’t think the progressives had that much interest in the implementation.
“. . . liberal government, in the sense of any sense that government as an instrument of social justice, an engine of economic progress, . . . ”
“We may no longer have that sense of being part of a larger collective . . .”
“. . . we have lower social trust, lower faith in the institutions, lower sense of collectivity. ”
For about the past fifty years we have been witnessing a recession and actual suppression of individuality (once a prime driver of the expansion of Western Civilization). These events, plus those initiated by reactions to political dealings with personal mortgage debts, have triggered a reaction to the uses of the mechanisms of governments, particularly the federal, that is reviving a sense of the values of individuality.
That revival is likely to end the concept of the function of government cited in the first quote.
Is it really true that the nation was more socially cohesive in decades past? I suppose in some ways, but the feuds between the John Birchers and the New Dealers or various SDS type factions later on just seem like they were a lot more bitter and heated than anything we have today. Our politics seem pretty milquetoast compared to years past. The Tea Party types seem to have a lot of bark left in them but precious little bite, and the New Left faded into neoliberalism decades ago.
In any case blaming ‘the people’ writ large is a pretty common occurrence among elites when big plans go awry, as they often do. It allows the elites to excuse their own failures.
I just wish Shields’ comment about this bringing about the end of liberalism actually had a grain of truth to it, but somehow I think the American left will survive.
“…The deeper answer is that when we look at Kayak and Amazon, we are seeing the survivors that emerged from an intense tournament. In this tournament, thousands of competing firms fell by the wayside. ”
Yes, but it’s more than that. Businesses often release products that work but don’t sell well, and it’s not unusual for them to cancel new products before release when it becomes clear that they’re not going to meet the criteria for success. But businesses are almost never stupid enough to release product that they KNOW cannot possibly succeed. So yes, there have been lots of online travel and shopping sites, and many have failed, but to my knowledge, none of them failed because they just. didn’t. work. In contrast, it was completely obvious from testing that healthcare.gov couldn’t handle anything close to the expected load and was going to fall flat on its face..and yet they released it anyway. This is a special, rare form of incompetence that seems to require government action.
I think most people can see the strength of market processes, certainly in areas where profit may be had, and often beyond. But still there are areas where government action is needed, I’d claim. And I know Arnold draws heavily on the message from ‘The Best and the Brightest’ on the limits of elites.
So my question is what is the alternative? The world is in many ways a complex place, and it seems to be very difficult to sweep away and simplify. Many folks seem to want ‘status quo’ despite the known complexities and issues. While I agree that it would be good to see some humility on the part of experts in terms of what they can truly achieve, psychologically it sees like expertise and hubris tend to pair up.
I wonder if Shields would have a job in the for-profit media. He’s on the dole, so it’s not surprising that he is a government man.
Like, Jeff R., I question the assumption. The New Deal *sounded* nice to lots of people. However, how much ofthe New Deal is still around? My impression is that the majority of it was taken down over the decades, as cooler heads prevaled.
They weren’t good ideas. They just sounded like good ideas to people with soft heads.
1. IMO if you tried PPACA when healthcare spending was 5% of GDP it would have been less of a problem but 18% of GDP is huge.
2. It is very early yet. I do not like PPACA but I think it is cleverly designed to hide most of the cost and show most of the benefits so that the people might grow to love it.
3. Big projects do seem more difficult because government and the rent seeking process has matured.
4. As for the new deal I think that for example SS was structured it a way to fool the voters because else it would not have been supported. The employer match, the fact that high earners get more etc.
“But the losers felt part of a larger collective and they said, OK, I’m going to take a hit for the team. We may no longer have that sense of being part of a larger collective…”
Is this true? Were all of the “losers” of the New Deal just happy to pitch in? Or were they an unhappy minority that was just overrun by a majority? I have no idea what the answer is, but my sense is that when people narrate history, they like to suggest that human nature has somehow changed over time for the worse. That doesn’t sound likely to me.
BTW when Windows Visa was first released it was not much better than healthcare.gov.
I think there are three separate issues here:
1: It is true that Brooks and Shields do not appreciate capitalism. They have made their lives in organizations based on credentialing, convincing, and consensus. They likely have little appreciation for the processes of competition, evolution, and the adversarial posture.
2: That being said, they are right. There is little sense of “we” in the United States. To make an obvious example, I don’t have anything in common with the Brooks and Shields of the world. The geographic and cultural variation of opinion in this country is enormous, and the legislative process is reflecting that.
3: Because of the variance of opinion, large government projects will fail. ACA was dead the day it was signed, as will nearly any other large bill. The difference in opinion in this country is great enough that any sweeping piece of legislation will require sufficient compromise, lying, and bribery as to make it cumbersome and unworkable.
When it comes down to it, we’re just not that in to each other. That’s why I’m a believer in federalism.
“But the losers felt part of a larger collective and they said, OK, I’m going to take a hit for the team. We may no longer have that sense of being part of a larger collective…”
“That is, it could be that the wonks who designed Obamacare had the right idea, and that the American people are too selfish and too unwilling to trust government to allow it to be implemented honestly and properly.”
I have a different take on this.
It could be that the losers (and some of the prior winners) of the New Deal and Great Society legislation now have the benefit of experience. They have seen the consequences of these grand experiments and have come to the conclusion that they are not sustainable and especially that layering another “grand idea” on top of the prior ones is not.
So, this may not at all be a matter of “selfishness”; it may just be a rational reaction to experience and one might label that prudence.
What better view of how markets fail than health care. Assuming markets can fix health care is assuming we have just left the Garden of Eden.
Sounds like Brooks and Shields have it figured out. If we don’t want to to do what Brooks and Shields think best, it’s because we’re selfish. It can’t be that we think there are far better solutions where we can all come out ahead, rather than having to ‘take one for the team.’