Remembering Public Policy

Newt Gingrich, Mitt Romney, Rick Santorum, and Ron Paul are playing out the Republican primary drama to its logical conclusion, which now appears to be Florida on Tuesday. Conventional wisdom -- thrown on its head almost every other week -- now has it that Gingrich had his final run, and Romney survived it and is poised to win handily in Florida. As Florida goes, so goes the nation, most especially because the Republican Establishment has gotten the long knives out because Gingrich is wicked crazy and will stuff Republican chances in 2012 deep into the dark place. Romney Forever.

But among these dramas, we still see that actual public policy is at the heart of the campaign for the presidency, and in a presidential election year, the Congress, as well. And to get a more focused glimpse of this public-policy debate, let's simplify: Romney will get the nomination because Gingrich is an abomination. I actually believe what I just typed, but that's not important. What's important is that it's what the Republican Establishment believes. Newt Gingrich is still alive and kicking and may well give his fellow Republicans heartburn for a few more weeks. But he himself is toast-in-waiting.

Barack Obama laid down his public-policy markers in his State-of-the-Union address, which has caused palpitations for the usual prognosticators like David Brooks, who yesterday criticized the president for going small ball a la Bill Clinton. Why didn't the president call for BIG IDEAS like reforming the whole tax code or solving, once and for all, the budget deficit, or ending entitlements forever. After all, the Republicans have BIG IDEAS like this. Why doesn't Obama float his BIG IDEAS?

It's simple, David. Obama already has. He got some of them through before the 2010 elections, like his fiscal stimulus and his ACA healthcare laws. For better or worse, he runs on those already. As for big ideas (okay, I'm done with the caps for now), Brooks likes to cite Simpson-Bowles. Hey, guess what? Obama has already said he'd be willing to work on budget deficits and entitlements using the Simpson-Bowles framework. David, you know the answer: the Republicans rejected it. Paul Ryan voted it down. It's the actual story. Obama was willing to go beyond Simpson-Bowles in his budget talks with John Boehner. Rejected! So let's move on.

Where did Obama go when he moved on? Fine, call it small ball if you want. But don't act so surprised. For Republicans to dismiss Obama's "small ball" is more than disingenuous. It's so predictable as to be meaningless. The Republican House wouldn't pass an Obama bill if it offered million-dollar bonuses to Republican grandmothers.

What Barack Obama did in his State of the Union, as I said, was to lay down public-policy markers on which to run this year. Okay, they were somewhat small ball (though not all) and a laundry list and a smorgasbord like most State of the Unions. But they do represent policy choices. What are they?

1. Buffett Rule (in your face, Mitt Romney). This is actually large-ball tax policy. Obama says the tax code shouldn't favor the wealthy at the expense of the middle class. This hurts consumers and in the end drives down demand that sustains the business interests of the nation. In other words, the tax code favoring the rich not only creates economic inequality on a large scale but is actually bad economic policy even for the wealthy it seeks to protect.
2. Rebuild manufacturing. Brooks criticizes Obama for wanting to increase manufacturing in the U.S. by rewarding those who help to do this. Why? Brooks reminds us that 90 percent of Americans work in the service sector, so why would Barack even mention it? Maybe because it's in manufacturing that we've shrunk the most and policies that increase manufacturing at home is a smart place to begin to reclaim jobs lost overseas. What does Brooks want, more Walmarts? What any decent conservative would want is to make the goods on the shelves.
3. Barack Obama doesn't want to overhaul the tax code the way Mitt Romney wants to because Romney wants to give even more tax breaks to the wealthy, but we already knew that. Obama likes the current progressive tax system. He just wants to bring back higher rates on the rich, which is where even rational conservatives should want them. After all, what happened during the Bush years as a result of the tax cuts should be the opposite of what conservative want, which is fiscal responsibility. Sounds to me that's what Obama wants. And that's not small ball.
4. Barack Obama mentioned a number of small ideas that added up to something resembling an actual energy policy. Again, that's not small ball. The Republicans have their energy policy: drill, baby, drill! Obama embraces drilling, too. And he's open to better-regulated fracking. If truth be told, I think he's not adverse to the Keystone XL pipeline; he just wants the environmental studies to actually happen. (I think tar sands oil blows, but that's beside the point in this discussion.) Obama also wants to grow the green economy in order to supplant the need for (foreign) oil over time. Conservatives should want this, too. That they don't is pure hypocrisy, or simple politics.
5. In general terms, Barack Obama launched a populist agenda that seeks to bring the 99 percent into the Democratic fold. This harnesses the energy from the Occupy movement (possibly in advance of a resurgence of the movement in the spring) as well as unleashing the hounds on the hapless capitalist that is Mitt Romney. Romney is so tone-deaf in this regard that Obama should be able to make Romney dance like a trained seal on the issue of fair distribution of wealth. This may be politics, but it's also actually good public policy. When wealth coalesces at the top, crashes happen (see 1929) and depressions result. Here we go, again, right, people? What do we do with the tax receipts from increasing taxes on the wealthy? See 6.
6. Diverting money from the investment accounts of the wealthy to government-driven R&D and to education on all levels, as well as driving innovation in technology, green or otherwise, is a worthy pubic-policy set of goals. (See Noah Smith on this.) Conservatives should want this, unless their agenda is to protect wealth now at the expense of wealth later. Guess what I think? Don't bother.
7. Why didn't Obama present his plans for entitlements? Mostly because he has already, but I believe he already has an agenda in place, which amounts to, first, preserving the economy through Keynesian-light measures, such as the original stimulus package along with his continuing -- but temporary -- payroll tax cuts; second, growing the economy over time until it better supports social programs; third, waiting for his healthcare plan to help solve the Medicaid/Medicare insolvency difficulties. Will it succeed? Probably not completely, because it's not enough. But it leans in the right direction and if amplified in the future (see Robert Reich on Social Security, and here and here for Medicare), there's some promise of weathering the storm.

This is my take-away from the State of the Union. Is it a plan to stand on? Meh. Is it a plan to run on? Certainly. If it all came to pass, would the U.S. be in a better position moving forward? Yes. Is it enough? Of course not. Nothing is ever enough, unless you're Denmark, with a population that is well-educated and generally agrees that the public good is, well, good for the public. For us, here in the U.S., we've got Rush Limbaugh to explain why anything good for the rich is good for the poor. Note to Rush fans: the rich don't listen to Limbaugh. Limbaugh's job is to convince the poor slobs that letting the rich get richer is exactly how the poor slobs will have more money. That Rush seems to succeed at this is one of the great mysteries of life. In fact, the greatest political mystery of all is that the common man can be made to vote against his own self-interests so often. But there it is.

In 2012, we have real policy choices. You can call Obama's game plan small ball, and you can call the Republicans the party of Bold Ideas ("Entitlements are for wussies!" and "Bomb Iran!" and "Tax increases for the wealthy will hurt the rest of America because, ah...gee, look at that pony!"), but this is what the choice, The Choice, is all about.

Update. This op-ed by James P. Wilson is a classic piece of data-misapplication fiction whose basic premise is, wait for it, that the poor are responsible for their own predicament, and it's up to them to solve their own problems. The op-ed should have been entitled "Angry about inequality? Blame the Negroes." Sheesh. The good news here is that the comments on the article show that the vast majority of the article's readers don't buy the baloney. Good going, Washington Post.

Update 2. This time props to the Washington Post for this article by Barry Ritholtz of The Big Picture on Obama's proposed mortgage fraud panel. It seems -- from Barry's posting in the comments section (must read) that from the subpoenas announced Friday that the panel will have real investigative teeth. Let's hope heads roll and soon. It's the only way I'll believe that the rule of law hasn't been suspended for everyone except the poor slobs that keep getting suckered -- and ignored by the government.