Big Think

Spaghetti Economics

The Big Point being lost in all the back and forth over the stimulus plan's flaws is this: there is no such thing as a perfect stimulus. First, we don't really know what will work best, and second, no giant bill like this gets through Congress without massive amounts of unattractive stuff. But with consumer demand collapsing and business retrenching, government is the only entity that can lift demand in ways that avert a self-reinforcing downward spiral. We need to throw lots of spaghetti against the wall, and fast -- and continue to throw lots of spaghetti against the wall for at least a few years. This is not a case against trying to make the spaghetti tossing as smart as we can -- it's just an acknowledgment that we're unlikely to know what's really best and the most important thing is the volume and speed of the spaghetti we start tossing. And yes, once we get things stabilized, we'll have to come back and figure out a pasta withdrawal diet (i.e. long term budget reform, slowing the growth of health care costs, raising taxes, etc). But that will be a comparatively good problem to have once we're past this mess.

February 7, 2009, 1:19 PM

Stop the Heirs!

Caroline Kennedy is a fine lady, but Nick Kristof has it right on his blog regarding the aristocratization of American politics. My own entry on this demoralizing phenomenon was a column back in March 2001, reprinted below. Nothing's changed. Forget Soft Money -- Stop the Heirs! I know we're all supposed to moan about "soft money" this week, but to my mind there's a bigger campaign scourge that John McCain has missed altogether: the plague of heirs running amok on the political landscape. Surely the Heir Factor does more to undermine the morale of our democracy than a thousand Clinton coffees or Republican Eagle fundraisers ever could. You can hardly turn on the tube these days without stumbling over some smiling scion primping himself for high office. Like most rot this starts at the top, as last year's emblematic showdown between George Walker Bush and Albert Gore Junior proved. But the specter of inherited political power is so commonplace nowadays that it's getting hard to keep track. There's Andrew Cuomo, the former housing secretary under Bill Clinton, now readying himself to run for governor of New York, like his father. Presidential wannabe Evan Bayh holds the Indiana senate seat held by his father. So too with Connecticut Senator Chris Dodd. New Hampshire Senator Judd Gregg's daddy was governor. Louisiana Senator Mary Landrieu's father was mayor of New Orleans. West Virginia Senator Jay Rockefeller has two uncles who were governors. And, as Ron Brownstein quipped in a 1998 look at this trend in The American Prospect, Chicago Mayor Richard Daley's father was emperor. Jesse Jackson Jr. waltzed into the House as Jesse Johnson never could have -- as did Rep. John Sununu (son of the former New Hampshire governor and White house chief of staff) and Charlie Gonzales (who inherited papa Henry's Texas seat). Three generations later there are so many Kennedys in power that no one actually knows the number anymore. Does anyone think Colin Powell's son Michael would be chairman of the Federal Communications Commission today if his last name were Powers? This weird inventory could go on (and on). James Hahn, son of legendary Los Angeles county executive Kenneth, has a lock on this year's mayoral race in LA. Before long we'll doubtless see Karenna Gore, Chelsea Clinton and Jeb Bush's son George P. join the parade. Many of these folks are fine people. And going into the family business is a proud American tradition. But at some point the sheer volume of political heirs gets a little ridiculous for any self-respecting democracy. It's bad enough to have these constant reminders that the system is rigged. Yet governance by heir may also be dangerous. The men and women who inherit their power tend to be far more bland and cautious than their dashing forbears -- who had to make their name, after all, and not simply avoid squandering it. It's not unlike the ethos of those who inherit great wealth, who are more concerned with preserving their pile than with taking risks to build a fresh one. This means we're increasingly led by a species of timid tacticians, groomed from birth to censor any impulse that might make them more interesting as human beings but less viable as politicians. No wonder politics seem so dull and unimaginative, except when enlivened by political Gatsbys like Ronald Reagan and Bill Clinton [update: or obviously Obama today]. What to do? Any reform has to address the enormous built-in advantage heirs have when it comes to name recognition, the family fundraising rolodex, and opportunities for political apprenticeship. One option would be to offer huge amounts of compensating public financing to any average Joe who finds himself in a race against an heir. Lawyers will naturally quibble over what relationship should trigger this provision, but you get the idea. But more radical steps may be needed. Taking a page from trust and estate law, Congress could adopt a "generation skipping" rule, under which the children of high officeholders would simply be barred by law from seeking office themselves -- only the grandchildren could. This would nip the whole Chelsea and Karenna thing in the bud. Of course, it might also present a few little First Amendment problems -- but then that makes it a perfect fit with every other campaign finance reform being debated. Come on, John McCain, do something before we morph entirely into an aristocracy. Flabby heirs are as big a threat as soft money!

December 17, 2008, 2:50 PM

Health Care Next!

This article originally appeared at The Big Money. Yes, it takes a breathtaking level of chutzpah for Hank Paulson to bar as "punitive" any caps on Wall Street compensation or clawbacks of ill-gotten gains on the verge of an epic federal bailout. But Democrats would be foolish to fixate on payback when a bigger prize is at hand. They should tell Hank Paulson it's fine. Let the high rollers keep the loot they made wrecking the economy. We'll flog no fat cats in the public square. All is forgiven! In exchange, though, Mr. Secretary, we just want one thing: boost your $700 billion rescue to $800 billion and enact universal health coverage this week, too. Welcome to the logic of the next American capitalism. Once upon a time -- about a week ago, actually -- insuring the uninsured was a pipe dream. Sure, Barack Obama had to talk about it to keep the lefties happy. But how could America stomach such a massive government intervention? Just thinking about it made one swoon from the deadly vapors of socialism. Plus, even if it was a good idea, how could a deficit-ridden nation begin to pay for such a thing? How quaint such quibbles seem today! Now that we've socialized large chunks of the mortgage, banking and insurance industries -- with auto and airlines not far behind -- universal health coverage is among the most conservative initiatives left for America to pursue. And unlike finance -- where market principles plainly lead to disaster -- in health care, Democrats can throw sulky conservative ideologues a bone. Just give the uninsured vouchers with which they can buy decent coverage from among competing private health plans. Toss in a couple of rules to assure that insurers can't discriminate against the sick (a far lighter federal hand than Republicans will shortly be proposing for tomorrow's banks). Presto! We have "market-friendly" universal health coverage. Whaddya say, Hank? Amortized over thirty years -- like a mortgage, say -- the extra ten percent or so added to your rescue package is peanuts. This deal lends the perfect patina of justice to a scheme that would otherwise be pure socialism for the rich. It can bring the bipartisan spirit we need to muscle through this crisis together. Best of all, it lets fallen financiers sleep better in the knowledge that their plunder ultimately served a cause greater than self. Or as they say on Wall Street nowadays: "Country first!" Matt Miller is a senior fellow at the Center for American Progress. His new book, The Tyranny of Dead Ideas, will be published by Times Books in January.

September 27, 2008, 12:13 PM

Time For The Political Pre-Nup!

A classic from the archive (March 1999) brought to mind by Scott McClellan's current choices As bombs fall in Belgrade and George Stephanopoulus' memoir hits number one on bestseller lists, President Clinton has to be wondering who in the room is taking notes for the next kiss-and-tell. Unfortunately, he's got more cause to fret than ever, because if anyone still wondered how integrity stacks up against buzz in today's moral code, respectable reaction to George's book is the clincher. Here we have one of the handful of advisers closest to a president trading confidential conversations for millions while the president is still in office. It was bad enough when disgraced toe-nibbler Dick Morris was rewarded for these sins with berths at the New York Post and Fox television. Decent people, at least, kept him at arms length. With ex-altar boy Stephanoupoulus, however, something has changed. Maybe its the Rhodes scholarship, or the seat with Sam and Cokie, or his progressive politics, or Clinton's own deep dishonor. Whatever the reason, the tut-tuts of luminaries have been half-hearted. Instead, the general air has been one of resignation to the times. The speed of history is now faster, we're told, and book deals so rich it would be superhuman to resist. The few who blast Stephanopoulus without caveat (like ex-LBJ aide Richard Goodwin) are written off as quaint, cranks, or jealous. Stephanopoulus' own defense has been a diversion. His "test," he told the New York Times, was to ask, "was what I had to say relevant, fair and accurate?" But this is the question a disinterested journalist asks. The right question for a presidential adviser was, "is this a breach of the trust that came with the position I was privileged to hold?" To ask this is to answer it, and Stephanopoulus plainly calculated that the cash and career benefits outweighed any potential taint. The man knew his age. The twenty-five city book tour, the toasts from establishment heavies, even the obligatory, fleeting and publicity-generating 'debate' over George's ethics -- all send a message to aides on the make: there's no real price to pay for betrayal. Its all basically upside. Remember, this wasn't Peggy Noonan off in the basement rhapsodizing harmlessly on the trivia of White House life. No, the fact that someone as close in as Stephanopoulus can pull this off, relatively unscorned, dooms future presidents to seemingly awful choices. They can hide their true thoughts from their inner circle, a weird and self-defeating notion, to say the least. They can stock this inner circle with people whose loyalty is truly beyond question, leaving us regrettably ruled by a brain trust of kindergarten pals like Mack McLarty, and presidential spouses. Or, as conventional wisdom seems to suggest, presidents can simply accept that betrayal from intimates comes with the territory, and helplessly await the knife. Well, nonsense. Just as mergers and marriages that flourished on handshakes and vows had to turn to coarser arrangements once the stakes of breakup became high, the politician-aide relationship now needs its contract. Time, in other words, for the political pre-nuptial. Every president (and presidential candidate) should simply require key advisors and officials to sign a binding contract of confidentiality as a condition of employment. Aides would pledge not to disclose anything they see until, say, five years after their boss leaves office. The legitimate claims of history would thus be honored, along with the rightful expectations of presidents. Its a shame, of course, that integrity now has to be assured rather than assumed, but can anyone deny that's where we are? Given this, its hard to object. True, one path from White House service to riches will be foreclosed, leaving future Stephanopouluses to make do on celebrity alone. And publishers will doubtless raise a fuss because betrayal is good business. But the political pre-nup could become Stephanopoulus' legacy. Hollywood celebrities have required such contracts forever, from every cook, nanny and "personal assistant" they hire. And as politicians who think about it for a moment will realize, there's no downside to a pre-nup, and, after George, no shame in insisting on one. "Of course I trust you," Elizabeth Dole or George W. Bush can say lovingly into their aides' eyes, "but look what happened with George." Its routine adoption, even by politicians whose secrets seem unmarketable, could represent the establishment's late but lasting verdict on Stephanopoulus' crime. It offers lawyers a corner of public life where they can finally do something constructive. And it leaves presidential paranoia where it belongs -- not centered on aides, but on mistresses.

May 30, 2008, 7:03 PM