All Politicians are Trapped by Decision Accretion

I recently saw a talk by an elected official during which a member of the audience said “You’ve been in office for almost two years. You can’t keep blaming the last government for the economy!”.

And then I remembered Harold Pollack telling me that disability payments for World War I veterans peaked in the late 1960s.

It’s quite a disconnect. Voters hold politicians responsible for the present situation as if elected officials were all-powerful. But the officials themselves know that they are highly constrained by the decisions of other elected officials no longer in office, and perhaps not even living. The great political scientist Carol Weiss used the vivid term “decision accretion” to describe how many large and small political choices and policy judgments made over many years give us the public policies we have today, rather than them emerging de novo because of whoever we most recently elected.

President Obama’s annual budget requests to Congress for example include funding for interest payments on debts that were incurred before he was born, enormous health insurance programmes that were created when he was a child (e.g., Medicare and Medicaid), and environmental cleanups for disasters that happened when he was a state senator.

On the revenue side, the President’s budget will derive taxation from economic growth caused by investments in infrastructure and education made in prior years. They will also take in some revenue based on a telephone excise tax which was passed to fund the Spanish-American War.

Every President before Obama faced this same reality: Being powerful in theory but constrained by a myriad prior decisions in practice. It is therefore entirely reasonable for any President, indeed any elected official, to say that the policymakers who are most profoundly shaping society’s current situation are no longer in office.

But voters are too impatient and ahistorical to accept that, and political spinmasters tell their bosses that it makes them sound weak to admit it. So our elected officials generally go along with the myth of the all-powerful now, and thereby get blamed for things they can’t affect and receive credit for things they did not do.

Comments

  1. says

    Fair enough, but Obama is specifically blaming just one of his predecessors–George Bush–rather than acknowledging that his budgetary decisions are largely driven, not by the Bush tax cuts, but by decisions we made decades ago about things like Medicare and Social Security. So it’s hard to feel too sorry for the Democrats on this.

    • Matt says

      Say what you want, but the economic meltdown was caused by rampant speculation and recklessness in the banking industry, not by entitlements. The problems Obama is currently facing are largely the result of decisions made by George Bush and to a lesser extent Bill Clinton: a financially-imprudent tax cut, an aversion to regulation of finance and the banking industry, very expensive wars, among many other decisions.

      Yes, for long term solvency our social programs and entitlements need to be retooled, but this is only part of the problem. Obama’s been thwarted in this by an intractable do-nothing GOP that demonstrates it cares more about winning back the White House than fixing these problems–even when Obama’s solutions are center-right and originally proposed by Republicans!

      Keith’s point is that it’s very difficult to repair an entire economy and see the results in a single term. Yet voters are ahistorical and expect miracles. My prediction is that if Romney is elected, the private sector growth we’ve seen over the last three years (due to successful administration policies) will continue, and very shortly into Romney’s term, he will begin to take credit for it. This is one of the maddening things about our political system. Economic cycles are slow, but taking credit or placing blame is lighting-fast.

    • Byomtov says

      What would have been our fiscal position at the end of 2008 without thse cuts, and without the war in Iraq?

  2. Brett Bellmore says

    Perhaps it was caused by rampant speculation. But borrowing to finance entitlements ensured that the government didn’t have any real headroom to engage in deficit spending without severe harmful effects on the economy. Kinda like the straight laced guy can take a stimulant in an emergency, while a meth junkie at the end of a binge would kill himself taking enough stimulant to make a real difference. You have to normally refrain from stimulation, for it to be an available tool.

    That’s the real joke about Keynesian counter-cyclical spending. It’s not counter-cyclical if you’re borrowing all the time.

    • navarro says

      despite the best efforts of the republican party to destroy the american governments ability to borrow, the united states has been able to borrow over the past couple of years at an effectively negative interest rate. if there were ever a time to use borrowing to stimulate the economy, this would be it.

      • Brett Bellmore says

        Yes, because everybody knows that, when you’re offered an absurdly low, temporary teaser rate on a credit card, the only rational response is to max the card out. What happens when the rates revert to historically normal levels, and debt carrying costs suddenly double or triple?

        • Barry says

          Brett, could you please stop lying? We’re talking about fixed rates on long-term bonds.

          • Brett Bellmore says

            Which, if past experience is any guide, will eventually have to be rolled over. But I guess you figure that by then it’s somebody else’s problem.

            So many of our problems are due to people thinking exactly that a while back: We’re suffering from their long run.

    • j_h_r says

      aus·ter·i·ty (ô-str-t)
      n. pl. aus·ter·i·ties
      1. The quality of being austere.
      2. Severe and rigid economy: wartime austerity.
      3. An austere habit or practice.

      The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.[emphasis added]

    • Matt says

      Brett, your perspective is based on a flawed macroeconomic notion. And also the false idea that austerity is the best way out of a crisis (see Europe for an example of how this policy is failing.) Plenty of Nobel laureates fundamentally disagree with you–and not only the one with the initials PK.

      Austerity and no stimulus is the monomaniacal attitude advanced by the modern, anti-Keynesian GOP. It’s fundamentally rooted in the GOP’s obsession with lowering taxes at all costs, which they use to justify an entire economic policy. But if you believe in Keynesianism, as I do, we had plenty of leverage with which to use stimulus as a tool.

      • Brett Bellmore says

        My point was that you can’t effectively stimulate if you’re stimulating all the time. Just like if you want caffeine to wake you up for an all-nighter, you can’t drink nothing but Mt. Dew on a regular basis.

        Decades of perpetual deficit have robbed stimulus of it’s effect. If we’d been balancing the budget all along, we’d be ABLE to effectively stimulate when we need to.

        And, since we never run surpluses, (No, Clinton didn’t.) every bout of stimulus permanently increases the burden of debt service. It’s not like the stimulus has it’s effect, and is history: We’re paying, today, for every stimulus in the last several decades.

        Isn’t it time to find a new response to downturns besides going even deeper into debt? Like maybe trying to figure out the structural reason behind the downturns?

        • Matt says

          “Decades of perpetual deficit have robbed stimulus of it’s effect.” Evidence? If we had been able to try real Keynesian stimulus back in 2009, we might have a legitimate answer to your speculation. But we weren’t, and therefore you don’t really have any evidence to back this claim up.

        • says

          We haven’t been borrowing profligately for decades. We’ve been borrowing profligately for decades *whenever Republicans control the White House.* That’s a very important difference. Until we had an extended recession and a zero interest rate environment, the amount of borrowing under Democratic presidents has been quite a bit lower.

          If what really concerns you is the budget deficit, there is zero evidence that you should elect Republicans and a lot of evidence that you shouldn’t. There is no reason at all to think that you are really concerned about deficits, no matter how much you protest otherwise, because you insist on voting in a way that is proven to be counter to your professed beliefs.

    • Byomtov says

      How about borrowing to finance huge tax cuts for the wealthiest members of society? Or borrowing to pay for a stupid, pointless, war? How about borrowing because an oath to Grover Norquist is more important than one’s responsibilities as a public servant?

      We had plenty of headroom. Who used it?

      And where exactly are the severe harmful effects from the (quite meager) stimulus we had?

  3. says

    There is no evidence that the fiscal crisis Obama faced when coming into office stemmed from Social Security spending. None. I challenge Megan (if that’s really her) and Brett (I know that’s our Brett! :-)) to prove that Social Security was a factor at all. As for Medicare, there is no evidence that supports it being a significant factor at all. Yes, Medicare Part B added costs to Medicare, but that’s not what drove the overall deficit and debt to high levels. It was the financial meltdown and Great Recession lowering revenues and raising costs in food stamps and unemployment payouts, the Bush income tax cuts lowering revenues from those who could most afford to pay their taxes, and the wars.

    If it was Social Security and Medicare, what changed between 1999 and 2009 in those programs? Medicare Part B may explain something, but not nearly enough to make the rhetorical points M & B are making. And there was no change in the structure of Social Security between 1999 and 2009.

    We know M & B don’t really like Social Security and Medicare. We get it. But we should not allow their ideological motivations to overcome realistic public policy making. We want to solve the rise in Medicare expenditures? The best way to do that is either gut the program (Paul Ryan’s solution) or go for Medicare for All, which allows for the healthy and young to be part of a larger pool, puts in price controls on medications (undoing one of the true cost drivers from Medicare Part B) and allows for better cost constraints than private insurers (My doctor friend, a high official in the Cal Med Association, says Medicare does too good a job of cutting his charges…:-)).

    • Brett Bellmore says

      I certainly don’t think the fiscal crisis was due to Social Security. I think that spending the increased SS taxes that were supposed to put the system on a fiscally sound basis, instead of doing something that would really help, like paying down the debt, left the country in a worse position to respond to fiscal crisis. But that was all that other spending, SS had a dedicated revenue stream.

      As I say, if you want a stimulant to really do you good in emergencies, you need to refrain from stimulation when there isn’t an emergency. Real life isn’t a linear model where the nth increment of stimulus does exactly as much as the first increment.

      • Byomtov says

        Do you understand that as long as the government was running deficits outside SS, using the SS surplus “to pay down the deficit” is meaningless?

        • Brett Bellmore says

          Do you understand that NOT running deficits outside SS is exactly what I mean by paying down the deficit? Way back when a scheme was hatched to increase SS taxes well above what was needed for current expenses, to prepare for the demographic future. IF spending outside SS had been held constant, that would have resulted in a much smaller debt, and a nation better situated to borrow to finance SS falling into negative cash flow.

          Instead, every cent went to increased spending, and the nation is no better situated. Worse, even, because the only effect the extra revenue had was to increase the apparently permanent baseline spending, leaving less financial headroom.

    • Barry says

      “There is no evidence that the fiscal crisis Obama faced when coming into office stemmed from Social Security spending. None. I challenge”

      Don ,are you reading this?

    • Matt says

      “we should not allow their ideological motivations to overcome realistic public policy making.”

      Thank you, Mitchell. It’s long struck me that the GOP starts with a single goal (maximize profits and lower taxes) and uses that to justify every other action and policy they have. Gut environmental regulations, strip and ravage established social programs, etc etc.

      Fixed, inflexible ideologies are bad whether you’re the GOP or a totalitarian government.

  4. politicalfootball says

    We can blame the current government for the choices of the current government. Obama and Congress have made a number of poor choices. That isn’t changed by the fact that they inherited a mess, but it’s certainly reasonable and important to keep in mind that they inherited a mess.

    I disagree with Ms. McArdle’s sense of priorities here. Whether or not we ought to sympathize with Obama, it’s useful to reflect on the reasons we’ve arrived in this slump, and people ought to be encouraged to do so. There’s a pretty straight line, for example between the Clinton administration’s failures – the revocation of Glass-Steagall, the reappointment of Greenspan, the failure to regulate derivatives, etc. – and the current economic mess. If you’re worried about deficits, the influence of Reagan and Bush is impossible to overlook.

    But that still doesn’t get the current administration off the hook. There are a lot of very basic, easy choices that could have been made – most obviously the larger stimulus package that economists called for – that would have mitigated a lot of the damage.

    • NCG says

      I don’t know that I agree with your Obama admin critique, but I agree about the right way to judge policy. It reminds me of what Robert Rubin said in an interview years ago that stuck with me. He judged his own decisions not by outcomes but by what he knew at the time. It made a whole lot of sense.

      My take is that we were all a little bit frazzled in 08 and 09, and quite possibly the administration should have tried to do a lot more. But regardless, the door shut in Congress pretty soon after, and that was that.

    • Matt says

      Were you around back in 2009? Do you remember Obama’s push for a bigger stimulus, that was whittled away down to what we got? Sure, the administration has its issues, but our current situation is not the administration’s fault–it’s the result of an intractable congress. I’m very tired of people acting (in hindsight) as if Obama somehow chose a smaller stimulus, chose not to deal with deficits, chose not to…etc etc.

      A president is not a king, he is one player in an increasingly complex and difficult political morass.

      • politicalfootball says

        Obama pushed for a modestly larger stimulus. He got most of what he asked for. Had Obama gotten what he asked for, the current situation wouldn’t have been much different.

        That said, I meant to be talking about the policy choices made by Obama and Congress. Certainly Congress could have given Obama more than he asked for. Younger people, especially, aren’t aware of this, but there’s no law or requirement that says that the influence of Congress must be destructive.

  5. Bruce Ross says

    Case in point: One of the few unambiguously thriving parts of the American economy is oil and gas. As the NYT has reported, that is thanks to new extraction technologies but also regulations — or lack thereof — put into place during the Bush administration. You could see a similar if more modest effect in public-lands forestry. Despite the lack of home-building, timber sales on public lands in California at least were higher in 2011 than in any year of the Bush administration, which was hobbled by Clinton’s Sierra Nevada Framework.

    And of course the left is happy to celebrate our move closer toward energy independence while continuing to loathe the administration that created the framework for that progress. (Not that fracking is without environmental impacts — far from it.)

  6. NCG says

    Great post, Keith. Voters need to understand these points. I also think politicians have a lot more room for being honest than they think they do — if they’re willing to take the risk of getting dumped. And I expect them to take this risk, especially since I think it usually pays, but it is or should be their job to say these things to voters. Over and over until it sinks in.

    I do think our press could use some serious soulsearching too though. You know, while we’re here fantasizing about a better world.