“It’s Hogwash, But People Never Seem To Learn”: The Outsider Delusion And The Fallacy Of ‘Getting Things Done’
As you will read in a hundred news stories over the next few weeks, the outsider’s moment in the presidential campaign has arrived. This is going to be the prevailing narrative of the 2016 race, until a new one comes along. It’s perfectly accurate (for now, anyway), but we should ask just what voters are seeking when they gravitate to outsiders, and what they’re likely to get.
First, the latest numbers. A new Marist/NBC News poll of Iowa and New Hampshire shows Donald Trump holding a healthy lead in both states, with Ben Carson coming in a strong second in Iowa and third in New Hampshire; Carson’s rise is not quite as entertaining as the Trump campaign, but it’s nearly as significant. Meanwhile, Bernie Sanders has cut into Hillary Clinton’s lead in Iowa and moved ahead of her in New Hampshire, where the race between the two has been closer for some time now. And a new Economist/YouGov poll shows Trump moving even farther ahead nationally, with his support at 36 percent, followed by Carson at 11 percent.
Most reporters have decided, based not just on poll numbers but also on their conversations with voters and the evidence they gather on the trail, that the state of the race can be explained by the American people’s dissatisfaction with “politics as usual.” Fed up with Washington’s gridlock and its inability to solve big problems, voters turn to outsiders who promise to do things like “shake up the system” and “change the way Washington does business.” These candidates supposedly possess fresh ideas and new perspectives that can turn everything around.
It’s hogwash. But people never seem to learn.
On the Democratic side, you can at least make a reasonable case for Bernie Sanders’ brand of outsiderism. Sanders is no political neophyte — he has held public office for most of the past 35 years, which gives him an insider’s understanding of how the system works. And his argument is a focused one, centered on the influence of big money and how it helps produce and sustain inequality. While tackling that problem is extremely difficult, one could at least imagine a President Sanders making some progress on it.
On the Republican side though, the two leading outsiders, Trump and Carson, have nothing so specific in mind. They argue that they’ll get things done, Trump through the force of his will, and Carson because he is untainted by politics. Ask either one of them about a specific policy issue, and it quickly becomes clear that when it comes to the issues a president deals with, they’re utter ignoramuses, which is perhaps understandable, if less than reassuring. I’m sure Marco Rubio doesn’t know much about brain surgery, which Carson knows a great deal about, but he’s not running for Brain Surgeon in Chief.
If you’re a voter attracted to these outsiders, you’d do well to ask yourself: What, precisely, will an outsider do as president that an insider wouldn’t? Would they pursue a fundamentally different set of policies? Not likely — the policies they’ll pursue will by and large be those of their party. Ben Carson may be a political newcomer, but the policy positions he takes are essentially the same as those of the other Republicans. And any Republican will appoint most of the same people to the thousands of executive branch positions. When it’s out of power, each party maintains what is essentially an executive branch in exile, spread among Washington think tanks and advocacy organizations, waiting to move back into government. It isn’t as though the outsider candidate can fill these positions from somewhere else.
And when it comes to things like government gridlock, you have to ask the question again: What is the outsider candidate going to do differently? Outsiders talk about things like “shaking up the system” and “changing the way Washington does business,” but they seldom get too specific about what those things might mean in practice. What would a shaken-up system look like? For instance, would it mean that Congress would swiftly and efficiently pass a bunch of bills instead of being consumed by bickering?
If that’s your idea of what the system ought to produce, then electing an outsider president isn’t the way to do it. The way to do it is to give one party control of Congress and the White House, preferably with at least 60 votes in the Senate to overcome filibusters. Then you’ll see the system work.
President Obama had that for a time in his first term, and Congress was extremely productive, passing a large economic stimulus, financial reform, health-care reform and a bunch of other stuff you’ve probably forgotten about by now. If you don’t remember that period as one in which the system worked the way it’s supposed to, it’s probably because you didn’t like the particular things Washington accomplished. The real problem you had wasn’t with how smoothly the system operated, but with the substance of what it produced. In fact, Republicans often complain that the Affordable Care Act was “rammed down our throats” — in other words, they think the legislation wasn’t mired in gridlock for long enough (the fact that on Planet Earth it actually passed after more than a year of hearings, debates and negotiations isn’t really the point).
Plenty of voters say they want to get beyond partisanship and just find someone who’ll “get things done,” but that’s not what they really want. Everyone has an agenda. They want some things to get done, but not others. No conservative looked at Obama’s first two years and said, “I don’t like his policies, but I do admire the fact that he’s getting things done, so I’d like him to keep going in the same direction.” When George W. Bush tried and failed to privatize Social Security, no liberal said, “I’m disappointed that he wasn’t able to get things done.”
It’s perfectly understandable that Republicans are attracted to outsiders at this particular moment in history. As I’ve noted before, the real source of discontent among GOP voters with their party’s leaders is less about the rift between the establishment and the tea party than it is about the belief that the party’s leaders are ineffectual. They keep promising their constituents that they’ll destroy Barack Obama, repeal the Affordable Care Act and cut government down to size, but they never deliver. So when someone like Trump comes along and says he’ll sweep aside every problem and make all their dreams come true, it’s quite compelling, no matter how removed it is from reality.
But the truth is that voters of any persuasion don’t want to shake up the system when it isn’t getting things done; they want to shake it up when it isn’t doing the particular things they want. Washington may not be working, but what we really care about is whether it’s working for us.
By:Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, September 7, 2015
“Liberals And Wages”: Public Policy Can Do A Lot To Help Workers Without Bringing Down The Wrath Of The Invisible Hand
Hillary Clinton gave her first big economic speech on Monday, and progressives were by and large gratified. For Mrs. Clinton’s core message was that the federal government can and should use its influence to push for higher wages.
Conservatives, however — at least those who could stop chanting “Benghazi! Benghazi! Benghazi!” long enough to pay attention — seemed bemused. They believe that Ronald Reagan proved that government is the problem, not the solution. So wasn’t Mrs. Clinton just reviving defunct “paleoliberalism”? And don’t we know that government intervention in markets produces terrible side effects?
No, she wasn’t, and no, we don’t. In fact, Mrs. Clinton’s speech reflected major changes, deeply grounded in evidence, in our understanding of what determines wages. And a key implication of that new understanding is that public policy can do a lot to help workers without bringing down the wrath of the invisible hand.
Many economists used to think of the labor market as being pretty much like the market for anything else, with the prices of different kinds of labor — that is, wage rates — fully determined by supply and demand. So if wages for many workers have stagnated or declined, it must be because demand for their services is falling.
In particular, the conventional wisdom attributed rising inequality to technological change, which was raising the demand for highly educated workers while devaluing blue-collar work. And there was nothing much policy could do to change the trend, other than aiding low-wage workers via subsidies like the earned-income tax credit.
You still see commentators who haven’t kept up invoking this story as if it were obviously true. But the case for “skill-biased technological change” as the main driver of wage stagnation has largely fallen apart. Most notably, high levels of education have offered no guarantee of rising incomes — for example, wages of recent college graduates, adjusted for inflation, have been flat for 15 years.
Meanwhile, our understanding of wage determination has been transformed by an intellectual revolution — that’s not too strong a word — brought on by a series of remarkable studies of what happens when governments change the minimum wage.
More than two decades ago the economists David Card and Alan Krueger realized that when an individual state raises its minimum wage rate, it in effect performs an experiment on the labor market. Better still, it’s an experiment that offers a natural control group: neighboring states that don’t raise their minimum wages. Mr. Card and Mr. Krueger applied their insight by looking at what happened to the fast-food sector — which is where the effects of the minimum wage should be most pronounced — after New Jersey hiked its minimum wage but Pennsylvania did not.
Until the Card-Krueger study, most economists, myself included, assumed that raising the minimum wage would have a clear negative effect on employment. But they found, if anything, a positive effect. Their result has since been confirmed using data from many episodes. There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America.
How can this be? There are several answers, but the most important is probably that the market for labor isn’t like the market for, say, wheat, because workers are people. And because they’re people, there are important benefits, even to the employer, from paying them more: better morale, lower turnover, increased productivity. These benefits largely offset the direct effect of higher labor costs, so that raising the minimum wage needn’t cost jobs after all.
The direct takeaway from this intellectual revolution is, of course, that we should raise minimum wages. But there are broader implications, too: Once you take what we’ve learned from minimum-wage studies seriously, you realize that they’re not relevant just to the lowest-paid workers.
For employers always face a trade-off between low-wage and higher-wage strategies — between, say, the traditional Walmart model of paying as little as possible and accepting high turnover and low morale, and the Costco model of higher pay and benefits leading to a more stable work force. And there’s every reason to believe that public policy can, in a variety of ways — including making it easier for workers to organize — encourage more firms to choose the good-wage strategy.
So there was a lot more behind Hillary’s speech than I suspect most commentators realized. And for those trying to play gotcha by pointing out that some of what she said differed from ideas that prevailed when her husband was president, well, many liberals have changed their views in response to new evidence. It’s an interesting experience; conservatives should try it some time.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 17, 2015
“The ‘Depends’ Defense”: Republicans Will Hate Obama’s New Overtime Rule, But They Can’t Do Anything About It
Last night President Obama announced — in an article on the Huffington Post — that he will raise the threshold for overtime pay in American workplaces. The new regulations are substantively important for the millions of workers who will be affected, and they’re politically important as well. Republicans are going to squawk, saying that this change will cost jobs and is another example of Obama’s tyrannical rule. But they can’t stop it, and they’re going to lose the argument as well.
Under the Fair Labor Standards Act, employers have to provide overtime pay (usually time and a half) to employees who work more than 40 hours a week, but executives and managers are exempt from the requirement, as are those who make higher salaries. The trouble is that the rules don’t account for inflation, and so over time, what constituted a higher salary became absurdly low. The threshold has been raised only once since 1975, when it covered nearly half of U.S. workers; today it stands at less than $24,000, or lower than the poverty level for a family of four. (This document from the Economic Policy Institute offers some background on the regulation if you’re interested.) Here’s how Obama described the change he will be making:
We’ve got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.
This week, I’ll head to Wisconsin to discuss my plan to extend overtime protections to nearly 5 million workers in 2016, covering all salaried workers making up to about $50,400 next year. That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t.
That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay. That’s at the heart of what it means to be middle class in America.
We should note that Obama could have gone higher than $50,400. Earlier this year, some Democrats on Capitol Hill worried that the administration was going to propose a lower overtime threshold, something like $42,000 a year. A group of liberal senators urged Obama to set the threshold at $54,000. They also argued that it should be pegged to increase with inflation going forward, an absolutely critical provision that would give the measure lasting effect. So Obama didn’t raise the threshold as far as they wanted, but he is accounting for future inflation, by pegging the overtime threshold to the 40th percentile of incomes.
As much as Republicans will object, they can’t expect that their next president will undo this action. There are some regulations that we can expect to change whenever the White House changes hands. For instance, the Mexico City Policy, also known as the “global gag rule,” prohibits the funding of any organization anywhere in the world that even discusses abortion with a woman; when a Republican president takes office, he institutes it, and when a Democratic president takes office, he revokes it. But rules such as this one almost certainly won’t fall into that category. Try to imagine a President Rubio or Walker announcing that he was taking overtime pay away from millions of lower-middle-class U.S. workers. It won’t happen. They may argue against the rule when it is proposed, but once it’s in place, undoing it becomes politically impossible.
The more immediate political impact of this rule change lies in its place among a constellation of proposals Democrats will be offering on things such as the minimum wage and paid sick leave, proposals that are aimed at arresting the growing cruelty of the American workplace. As I’ve argued before, one way to think about the contrast between what Republicans and Democrats offer on the economy is that Republicans say they’ll get you as far as your employer’s door, while Democrats want to walk inside with you. Republicans argue that their preferred policies, mostly tax cuts and light regulation on businesses, will accelerate growth so that new jobs will be created. But once you’ve got the job, you’re on your own. The Democratic argument is that government has to come inside the workplace, to make sure people are being treated fairly. So they want to increase pay, provide family and sick leave, allow workers to bargain collectively, make sure no one is discriminated against and generally establish a structure that guarantees that people are treated well and can maintain some measure of dignity.
The Republican counter, of course, is that all those things increase costs to employers and therefore cost jobs. But their argument presumes that there’s nothing fundamentally wrong with the American workplace, which most of us know just isn’t true. Yes, many employers already treat their employers well. But millions of others don’t and would treat their workers even worse if they could get away with it.
As for this measure, we know exactly what employers will say: This will cost us money, which means fewer jobs. We know that’s what they will say, because that’s what they say about every marginal improvement in working conditions, benefits or pay. And in the short term, they’re right: It will cost them some money.
But let’s turn it around. What if employers said, “We could save money by removing the employee bathrooms and just telling our workers to wear Depends to the job. And that would mean we’d be able to hire more people.” Would we respond, “Well, if it would save you money and produce a few more jobs, then that sounds great”? Of course not. The short-term cost to employers of a regulation is certainly something to consider, but it’s not the only thing to consider.
The change to overtime regulations isn’t some kind of dramatic transformation. Like increasing the minimum wage, it’s nothing more than taking an existing rule and updating it for inflation. But it’s built on the assumption that the government should come into the workplace and make sure that what happens there is fair. Republicans don’t believe that’s government’s job. But it isn’t going to be easy for them to make that case to a population that feels increasingly insecure at work. And even if they could win the argument, they won’t be able to change the policy.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, June 30, 2015