Hard Headed, Soft Hearted, and Useless? The Problem of Political Will

The parts of Hard Heads, Soft Hearts that had the greatest impact on me were those in which Alan Blinder discusses the problem of political will: how to convince democratically-elected leaders to adopt good economics when it is bad politics. Or, if necessary, to move public opinion and make good economics good politics. This excerpt probably sums up the point best: "no technical problems stand between us and the hard-headed but soft-hearted policies that can make our economy work better. We need only the will to find the way."

The problem, however, is that Blinder has few solutions to generate that political will. He has wise economic and philosophical prescriptions; I agree with almost all of them. Should we balance respect for the virtues of free markets with concern for those the market leaves behind? Absolutely. Are equity and efficiency two guideposts to be used for all economic policy? Certainly. Is environmental pollution really conducive to market-based solutions? Duh! Are protectionism, agricultural subsidies, and special interest welfare all examples of diffuse "winners" losing to concentrated "losers"? Clearly. I am with Blinder's analysis of the problem with our economic politics almost 100%.

What frustrates me throughout the book is that he offers scant strategies to persuade people to his point of view. Perhaps that is unfair, since I am essentially faulting him for failure to offer a public relations strategy for his "hard-headed, soft-hearted" economic vison. But I think it is a fair practical critique of what, in my view, is Blinder's appealing bipartisan argument. Without a plan to convince people to value equity, efficiency, and sound economic policy -- why does this book matter? What good is it to convince a few (really smart, really good-looking) PPEers to this point of view if, 25 years later, you haven't convinced politicians in power or the electorate? We face the same political challenge we did during Blinder's time: sound economic policy is bad politics, and few politicians are willing to risk their careers to advocate for it.

To substantiate this rant, consider two case studies that demonstrate how the problem of political will Blinder identifies has persisted and perhaps worsened since 1987.

Immigration Reform

In 2005, Senators John McCain and Ted Kennedy proposed a bipartisan bill on immigration reform and won the strong support of President Bush. The bill included tough border and interior enforcement mechanisms, a restrictive point-based system for future inflows of immigrants, a guest worker program for temporary migrants, and a path to citizenship (“amnesty”) for the 12 million undocumented already in the United States. The bill reflected a bipartisan compromise: neither side would receive everything it wanted. But Democrats could celebrate the path to citizenship while Republicans could applaud the tougher border restrictions. And both sides could applaud the measures to encourage legal immigration to the U.S.

Sadly, the bill did not even get to the floor of the Senate or House for a vote. Republican legislators hated it because it provided a legal path for undocumented workers; Democratic legislators opposed it because it reduced family unification. Key interest groups also lined up against it. The unions, for example, vehemently opposed the temporary guest-worker provisions.

The repeated failure of bipartisan proposal for immigration reform – not just in 2005, but also in 2007 and 2010 – typifies the failure of our political process. A solution that wins broad support from most on the left, most on the right, and the center of the electorate cannot be enacted because of opposition at the fringes. Bipartisanship and compromise are at the heart of the legislative process. But over the past decade, we have lacked the political will to address one of our greatest economic challenges.

The Long-Term Debt

A similar story can be told about the failure to reach a "grand bargain" on America's deficit and debt. As Blinder suggests, this is not a technical problem -- it is simple math. The debt can be reduced either by cutting spending or raising revuenes. Realistically, any substantial cut in spending must include entitlements. And unless we want to gut popular, important investments in education, infrastructure, energy, etc. revenues have to be part of the solution. Every mainstream economist agrees with this kind of balanced approach.

Mainstream politicians, however, do not. Instead, Blinder's all-too-accurate prediction holds true: a bipartisan majority of the economics profession unites on the opposite side from a bipartisan majority of Congress. Democrats remain unwilling to cut entitlements; Republicans remain unwilling to raise revenues -- and many have signed sacred pledges not to do so, even by eliminating loopholes. The bipartisan compromise has been to agree to disagree and kick the can down the road, and instead implement a painful and counterproductive "sequester."

Conclusion

Contemporary politics of both immigration and the debt suggest that problem of political will Blinder lamented in 1987 still persists, is perhaps more severe than before. On a host of other economic and non-economic issues including climate change and agriculture, a broad consensus among the "technical" policy world is ignored by political actors. I applaud Blinder for pointing this out 25 years ago, but criticize him for offering few solutions to change it.