The Problem with Purportedly Apolitical Policy Wonks: Their Faulty Logic

Peter Orszag opines from the politically sheltered comfort of his gig at Citigroup that we have too much democracy.

I’ll say more about specific claims he makes below, but first, let me point out a fundamental problem with his argument. He suggests we need to establish institutions insulated from our so-called polarization to tackle the important issues facing this country. That argument is all premised on the assumption that policy wonks sheltered from politics, as he now is, make the right decisions. But not only is his own logic faulty in several ways–for example, he never proves that polarization (and not, say, money in politics or crappy political journalism or a number of other potential causes) is the problem. More importantly, he never once explains why the Fed–that archetypal independent policy institution–hasn’t been more effective at counteracting our economic problems.

If the Fed doesn’t work–and it arguably has not and at the very least has ignored the full employment half of its dual mandate–then there’s no reason to think Orszag’s proposed solution of taking policy out of the political arena would work.

Here’s Orszag’s initial claim that polarization is dooming our country.

During my recent stint in the Obama administration as director of the Office of Management and Budget, it was clear to me that the country’s political polarization was growing worse—harming Washington’s ability to do the basic, necessary work of governing. If you need confirmation of this, look no further than the recent debt-limit debacle, which clearly showed that we are becoming two nations governed by a single Congress—and that paralyzing gridlock is the result.

There are a couple of problems with this. First, in response to the debt limit charade, voter approval of Congress and the President pretty much tanked. And while we don’t know how voters will act on their disgust with Congress’ (and the President’s) inaction, polling at least suggests that Congress will pay for the debt limit fiasco. It also suggests that support for the Tea Party, the architect of that fiasco, continues to decline. Which seems to suggest that democracy is working, it will end up punishing elected representatives for playing games with our country’s future, it will have precisely the result you’d want for such idiocy.

Add in the fact that Orszag later points to the automatic triggers that that flawed political process put in place.

Beyond automatic stabilizers, we also need more backstop rules: events that take place if Congress doesn’t act. In this sense, the fiscal trigger created as part of the debt-limit negotiations is a good step forward. It leads to automatic spending reductions if Congress doesn’t enact measures to reduce the deficit; in other words, it changes the default from inaction to action.

In other words, Orszag points to the debt-limit fiasco (and returns to it in his closing paragraph) as the best example of the problem with politics, but then points to the automatic triggers that resulted from that fiasco as a good thing. I don’t necessarily agree with him on that point, but his own logic doesn’t make any sense. He’s simultaneously saying the debt limit fight was the worst thing ever, but applauding the result.

Curiously, while Orszag tries to claim that the problem with all of Congress is polarization, rather than polarization being a problem in the House and Senate rules being a problem in the Senate (plus, the money in politics and crappy political journalism I mentioned earlier), he makes no mention of the number of centrists in the Senate. Perhaps that’s because the centrists back policy proposals (like immediate cuts) to the right of what Orszag proposes in his piece (which notes that economists advocate holding off on cuts and advocates for progressive taxation). The most likely outcome of more non-partisan or bipartisan commissions, then, are policies that aren’t the ones Orszag champions.

Which means the key to these so-called independent commissions would immediately get us into the question of who chooses them? Peter Orszag cites, among others, former Vice Chair of the Fed, Alan Blinder with approval; but he has been criticized for his own failed independence. Will we use the process that resulted in the selection of Ben Bernanke and the rest of the current Fed, that hasn’t even fulfilled its mandate, much less necessarily made the right decisions on restoring our economy?

In short, Orszag promises that independent wonks will make the right decisions for the country. But in making that argument he shows that even policy wonks sheltered from politics, like him, allow bad logic and personal biases to cloud their decisions.

16 replies
  1. Bay State Librul says:

    The problem with Congress is not “polarization” but “money”

    In my opinion, democracy has been hijacked
    by Campaign Financing.

    All campaign financing is dirty, ugly, and
    should be ABOLISHED.

    Any time you defy logic and lie, such as “Don’t ask, don’t tell” and “Corporations are people”, you fuck things up.

    Instead of restricting the flow of lobbyist’s dirty money, The Citizens decision opened up a sieve.

    The Roberts court should be ashamed.

  2. dakinikat says:

    I can’t agree with your take on the Fed because I’ve just seen way too much research and history of other countries with central banks that have been politicized and the results are horrible. I think that the statement after the charge of “archetypal independent policy institution” isn’t a sound argument. You’re mistaking the impotency of monetary policy in the face of a liquidity trap for problems with the Fed itself. All you have to do is google central bank independence and you’ll get the decades old studies that show just how bad it can get if there’s a central bank invaded by pols. The Fed needs to be monitored but it no way should any politician get close to the Open Market Committee. The times the Fed actually does get political–like back in the 1970s–the inflation has been horrible. Japan and Germany never had the inflation we did because their central banks thumbed their noses a their election seeking Prime Ministers who wanted stimulus.I even think the worst of the FED actions in 2007–saving banks at all costs–came from political pressure on Bernanke.

    Just some alternative thoughts from a person with the dismal science background.

    p.s. Glad to see you doing so well over here as a stand alone blog!! You and BMAZ have always been some of my favorite people to read!

  3. emptywheel says:

    @dakinikat: Hey, thanks for the kind words and especially, for this comment–I wasn’t exactly clear what you were saying on Twitter.

    I’m not necessarily saying political orgs are better, I’m saying Orszag presents no proof that apolitical orgs are better, generally.

    And isn’t your argument partly proof of the point? That is, if politics infects the Fed, then why should we believe that bipartisan commission whose members are picked by politicos are better?

  4. dakinikat says:

    @emptywheel: Well,the FED’s BOG is basically a 14 year term bipartisan commission whose members are picked by POTUS and okay’d by Senate so point taken there. However, the Open Market Committee is blended. It includes the political appointments which generally are actually good economists above everything else as well as some of the FED region’s presidents. It’s a hybrid.

    I’ll move to a similar example down here in the bayou. Prior to Katrina, all of our Levee boards were political appointees. Their levee inspections consisted mostly of annual wine and dine events and a short walk along said levees. Now we have consolidated Levee boards and you don’t get on there without an engineering degree. Which levee board would you trust with all your worldly belongings and the lives of every one you know including your family and yourself?

  5. ReaderOfTeaLeaves says:

    I’m not clear what economic policies Orsag is focused on, but in a world rife with tax havens, I think most of what passes for economic argument is sheer nonsense.

    Today, Nick Shaxson’s blog has a post referencing Reuters reporting about Nevada tax havens — even a cursory reading suggests that any state data about biz formation is highly suspect. If that new biz is basically a PO Box that is set up as a shell company, the stats on biz formation that feed into wonky decision making and policies are based on deceptive, bogus info. The wonks will bs the last to know.

    Also, Shaxson has been nominated as an ‘influential thinker’, so any Treasure Island fans can vote…

    When Orsag incorporates tax secrecy into his policies, I might pay attention. In other words, when he’ll freezes over…

  6. Brian Silver says:

    Orszag’s is yet another argument for technocracy shorn of political motivations. Polarization is bad and therefore we need to ignore the street, public opinion, and elected representatives and instead do what’s in the best interests of all the people. Too much INPUT; let experts decide. This type of argument has been debunked many times in the past, and not least by asking its proponents to explain why technocrat decisions aren’t also fundamentally political.

    In the Twitter discussion EW calls attention to rules, perhaps particularly in the Senate, that exacerbate conflict and make it more difficult for our legislature to make decisions — unless, of course, one regards “no decision” or “no new policy” or “no new spending” or “no new taxes” as decisions — which, of course, they are. In the current configuration of things such blocking moves are highly politically conservative.

    I would point to another set of rules that affect how the differences in opinions and values that are out there in the public get translated into representation in both houses of Congress — and in every state legislature and governorship as well. This above all is the plurality-winner-take-all (or so-called “first past the post” — FPTP) voting rule in elections.

    A FPTP election system means that you can end up with, say, a truly nutty governor in Maine who got less than 40% of the vote in the general election. Had there been a majority-winner rule — using either a majority runoff or an instant runoff — it’s very unlikely this nutcase would have won.

    The lack of a majority-winner requirement plays out in primary elections, too, as the FPTP rule allows an energized, and perhaps extreme, minority to capture the nomination within a party, and then to ride into office in the general election based on a minority of the votes cast. (Some of our states do have majority runoffs; so the idea isn’t unknown!)

    Instituting majority voting requirements across the states (this is a state prerogative) would go some way toward incentivizing pragmatism, compromise, or playing toward the middle. Not that “extremism in the defense of liberty” is a necessarily a vice (h/t to B. Goldwater), but a system of “minority rule,” which is what he often have in our country, is undemocratic.

  7. emptywheel says:

    @Brian Silver: I didn’t check all his citations to studies on polarization (though one seemed to relate only to the House while he was using it for the Senate). Are you familiar with them?

  8. emptywheel says:

    I meant to link to Russ Feingold, dismantling the church of bipartisanship.

    That is utter nonsense. The test of an idea is not whether it belongs to the political left, right, or center. The test of an idea is whether it will work. Yet too many of our nation’s current political leaders seem to be captives of a kind of political GPS system, programmed to seek either a specific set of principles laid down by a fervent base or, alternatively, a political middle ground whose inhabitants observe profoundly that “both sides dislike it, so it must be right.”

    A favorite and related concept of these same sages is that of bipartisanship, but for them bipartisanship is not so much members of different parties’ hammering out meaningful solutions as it is a group of middle-grounders who can be relied upon to embrace impotent proposals. To many in the Beltway, bipartisanship itself has become its own hollow ideology.

    True bipartisanship, of course, can be a powerful engine of pragmatic solutions. The campaign-finance reform I constructed with Senator John McCain was a classic, substantive measure that certainly did not adhere to any one ideology. And in my eighteen years in the Senate I was privileged to participate in several other serious bipartisan endeavors. But we shouldn’t confuse real efforts at cooperation with those that cloak the inadequacy of a middle road to nowhere with the label of bipartisanship. They may make some editorial boards happy, but they won’t get the job done.

  9. John B. says:

    Is it any surprise that in an era when the rich have never been as rich as they are right now and the middle class as poor as it is right now … that banker Peter Orzag, who has never received a single democratically cast vote for any public policy position, would want “cutbacks” on the power of average people to vote? As the income disparity widens you will be seeing more and more (rich) people demanding a larger and larger share of the power to select government of the (poor) by the (rich people) for the (rich) people.

    They know what history has taught time and again ever since the will of the people installed Solon in power to correct the same kind of imbalance between the rich and the rest: it can’t last in a democracy. The small minority of rich eventually have to seize power from the (rest of) the people so they can keep on getting richer.

    Expect more to pick up on Orzag’s theme. U.S. democracy is doomed.

  10. Bay State Librul says:

    @John B.:

    Broken and subverted, but doomed?

    The only hope I can gather was listening to Justice Breyer in this exchange with Tom
    Ashbrook (on NPR)

    Ashbrook: But your book title is “Making Democracy Work,” and this is fundamental to democracy, this comes to even electing the president of the United States, this comes to electing everybody. And you’ve got a whole lot of people saying: Wait a minute. How does this work? There is great fear of money buying influence that subverts democracy, and Citizens United seems to empower that trend. So, I know it’s a tough decision, personal feelings come into play, maybe politics too, we’ll talk about that. But here are Americans that you say the court depends on their support to maintain its legitimacy and here’s a decision that to some makes it appear to make it more difficult to exercise honest democracy.

    Breyer: If I risk paraphrasing: There’s been a view of the First Amendment that protects the freedom of speech. And that view says don’t get into the business of trying to censor some people’s speech in order to give some others people more speech. It’s too risky. And in a campaign, money does – it’s not equal to a speech but it is necessary.

    The opposite view says that it is possible in the constitution, to limit the amount of money some people give, so that other people will have an opportunity to speak themselves.

    Those two views have always been at war. There is something to be said for both. I favor the second, and that is why I joined a long, long dissent. Trying to explain why they were right. I think the majority is unpopular and wrong. But still, I think it is important for the country to support the institution.

  11. EH says:

    it was clear to me that the country’s political polarization was growing worse—harming Washington’s ability to do the basic, necessary work of governing.

    No, Peter, it’s the government’s job to do the will of the people, not the duty of the people to make the government’s job easier.

  12. quake says:

    Let’s not forget the un-representative nature of the Senate, in which the low-population states (e.g., Wyoming) have the same two Senators as California. There were various reasons the Senate was set up this way in 1787, but maybe it’s time to change this to reflect modern conditions. The fact that this probably isn’t feasible even under present dysfunctional climate in Washington doesn’t bode well for the future.

  13. rg says:

    In considering the term “political independence”, it occurs that a good definition of political is needed. To me politics is activity (especially verbal activity) related to some agenda, and to others that might share that agenda. To be independent of this seems a far fetched notion. Now for Mr Orzag working in an a government office subjects him to whatever agenda prevails at that office, as well as any superodinate policy imposed by the chief executive. The can be a Democratic agenda and a Republican, which describe the state of polarization when the forces balance closely. To suppose that working for a bank insulates one from having an agenda, especially one hierarchically imposed seems naive.

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