What's Wrong with This Picture?

A recent Gallup poll tells us that Americans Prioritize (ugh...there's that non-word...sorry...quoting) Deficit Reduction as a Strategy. Asked to choose the "best approach for Congress and the president in dealing with the economy, responses break down as follows:

Reduce the deficit/debt	39%
Increase taxes on the wealthy	31%
Cut Taxes	23%
Increasing stimulus spending	5%

The article goes on to say:

The increased government spending in late 2008/early 2009 to bail out major U.S. corporations and attempt to jump-start the economy concerned many Americans and helped fuel the Tea Party movement, leading to significant Democratic losses in Congress in the midterm elections. That concern is also reflected in Americans' endorsing deficit reduction as an economic strategy over generally popular approaches like tax cuts or tax hikes on the wealthy. [emphasis added]

OK. Now I'm really confused. Last time I checked, a tax hike on the wealthy was estimated to reduce the deficit over the next 10 years by about $700-800 billion. (See Linda Beale's blog at ataxingmatter for an excellent summary.) So the 39% who favor deficit reduction should favor a tax hike on the wealthy, yes? But do they? Probably not all of them (based on the party line breakdown in the Gallup results).

And I'm willing to bet that only 5% (as high as 9% among Democrats) support increased stimulus spending because after watching the bankster bailout (which some probably still confuse with stimulus spending), 95% of the country (91% of Ds) has no confidence in the government's ability to direct stimulus funds to people and projects that yield the most benefit for the rest of us. It's the moral collateral damage of a no-penalty, no-pain bailout of the guys at the top.

And what about the 31% who favor a tax hike on the rich (mostly D's and Independents)? Why is it apparently more important to them then reducing the deficit (even though it would also reduce the deficit)? Do they view it not as a technocratic economic policy instrument, but instead as, say, a moral penalty for profligacy and the externalities of investment bankers' most recent hijinx? What about those who don't favor it? Do they see retained income as the moral reward for real or imagined productivity, effort, and creativity?

Here's David Stockman, former head of OMB under Ronald Reagan:

"We've demonized taxes. All right. We've created almost the idea they're a metaphysical evil," he said.

Still, he says there should be a one-time 15 percent surtax on the wealthy that he estimates would cut the national debt in half.

"In 1985, the top five percent of the households, wealthiest five percent, had net worth of $8 trillion, which is a lot. Today, after serial bubble after serial bubble, the top five percent have net worth of $40 trillion," he explained. "The top five percent have gained more wealth than the whole human race had created prior to 1980."

"Demonized taxes." "Metaphysical evil." Not to mention the obvious fairness issues of the top five percent gaining so disproportionately in wealth. You see how economics plays out as a morality play, not necessarily among economists, but among the electorate? The most technocratic of solutions, say, increased government spending, borrowing at historically low interest rates, to stimulate aggregate demand, to build and restore the infrastructure and human capital of a growing, thriving 21st century economy is a non-starter because taxes and debt are both perceived as morally wrong or as supporting something that is morally wrong: guvmint, ne'er-do-wells who get their mortgages restructured, people with different skin color or religion or sexual preferences who might get something they are perceived as not deserving.

It's a tribute to the GOP's ability to engineer a morality play that plays out in politics, but is mostly about economics. If debt were all that was morally wrong, we could be purely technocratic and raise taxes. Since taxes are morally wrong, we can only cut spending. And as we decide how to cut spending, the morality play will provide us with a narrative where the least and last will benefit most from a good, swift kick to get them jump started and if they don't "jump," well then it's their own fault if their kid dies of (untreated or too-late-treated) leukemia while they were unemployed and without health insurance.

It remains to be seen whether we can persuade the middle class to cut their own future safety net or that of their parents, but I'm pretty sure that a grossly distorted moral narrative can make that happen, too. Unless, of course, we come up with a compelling moral counter-narrative in support of the technocratic solutions to these moral dilemmas.

If we do, it had better be quickly and in ways that are easily expressed in 25 words or less.

Comments

[rjs]

we dont stand a chance unless krugman gets a daily time slot on TV...

[jamzo]

relax, it means very little to you and i

polls perform a role in political theater

politician and expert sound bytes on tv and radio influence people who are hardly paying attention to "legislative gaming"

gallup and others poll people on political issues of the day

media buys polls and writes news "stories"

politicians justify their actions on polls

this poll says 3 of 4 "hot phrases" provide political cover

round and round it goes, year after year, issue after issue

[Bruce Wilder]

round and round, swirling the drain

[Bruce Wilder]

Great post, though I'm not convinced that the technocratic understanding is not just as corrupted and defective as the bumpersticker moral narrative.

I, personally, think that the economic analysis of incentive and risk in the face of uncertainty, for example, supports the idea that efficiency requires a lot of cheap insurance. That's how I would read the fundamental results of Arrow-DeBreu-McKenzie (and I think it is how Arrow, at least, read his own work). But, I'm not sure most economists see it that way.

I could spin out a macroeconomics and financial economics, where the national debt was a public utility, creating the means for stabilizing the value of a fiat currency and creating a financial basis for capitalist investment. I could argue for a Federal Reserve managing the yield curve, and regulating banks and financial markets, in a coordinated fashion, but it's clear that the technocrats in charge have seen their duty in other terms. And, they've been supported by an economics of extraordinarily narrow vision and scope: a macro without money and a financial economics, which "assumes" efficiency -- neither respecting pervasive uncertainty.

I'm sorry to be so cynical. It does seem to me that the mainstream of economics, even while claiming the technocratic mantle, aims squarely at NOT identifying mechanisms of the economy, qua mechanism.

The financial economists do not want to be evaluating how efficient are actual financial markets; they dispute only how efficient they should assume them to be. The macroeconomists assume away money altogether, before discussing monetary policy. These technocrats are not earthy mechanics with a wrench and a theory of latent heat; these are priests at the temple, discussing augury and omens. The religious nature of the "techno" in technocrat gives support to the unworldly nature of the common moral narrative.

[Peter Kurze]

I hate to say it, but if we ever hope to see these gross iniquities push Dancing With The Stars off of the front page, sooner or later this is going to have to play out in the streets. How does USA Today/Gallup get away with presenting choices one and two as either or? Objectivity? They may be subtle about it, but it's still a push poll.

Sorry for the rantish tone, maybe it's time to lay off of the abolitionist history for a while.

[marcel]

This press release seems on topic. Have you seen it?

http://sanders.senate.gov/newsroom/news/?id=2169CDBB-B7C8-41F8-BEF2-77C3FF5CE4AB

[reason]

I don't understand this prioritiz(s)e bit. You can do all of the above at the same time.

[Econ]

Polls are designed purely in a framework to elicit the output expected.

[The Raven]

"Furthermore, if a legislator is noted for his insistence upon budget-balancing and tax-cutting, we can predict with a fair degree of success that he will also tend to oppose expansion of government welfare activities. If, however, a voter becomes numbered within his sphere of influence by virtue of having cast a vote for him directly out of enthusiasm for his tax-cutting policies, we cannot predict that the voter is opposed as well to expansion of government welfare services. Indeed, if an empirical prediction is possible, it may run in an opposing direction, although the level of constraint is so feeble that any comment is trivial. Yet we know that many historical observations rest directly upon the assumption that constraint among idea-elements visible at an elite level is mirrored by the same lines of constraint in the belief systems of their less visible 'supporters.' It is our argument that this assumption not only can be, but is very likely to be, fallacious."--Philip E. Converse, "The Nature of Belief Systems in Mass Publics," 1964.

I recommend that article to anyone who cares seriously about democracy and politics. It was recently reprinted in *Critical Review: A Journal of Politics and Society* 18, no. 1 (2006): 1 - 74.

Converse argues, and defends statistically, that the consequences of policy do not enter into the political thinking of the vast majority of the public. This has its positive side: the public is probably not, actually, supportive of many of the draconian consequences of tax and budget cutting. But it makes democracy difficult.

I want to stress that I do not consider political unawareness a validation of political abuse: one is not supposed to need a medical education to get good medical care.

Croak!