Mike Konczal has written a provocative post that is getting quite a bit of play today and is well worth reading. He posits that the rough Obamacare rollout is a direct consequence of misplaced faith in neo-liberal solutions, which he defines in this instance as a reliance on means testing, privatization, devolution to the states, all in the pursuit of “choice” and “competition” as the best ways to provide services at an affordable choice. He contrasts that with the New Deal style programs which are universal, federal government-run programs:
Conservatives in particular think this website has broad implications for liberalism as a philosophical and political project. I think it does, but for the exact opposite reasons: it highlights the problems inherent in the move to a neoliberal form of a governance and social insurance, while demonstrating the superiorities in the older, New Deal form of liberalism. This point is floating out there, and it turns out to be a major problem for conservatives as well, so let’s make it clear and explicit here.
He goes on to discuss the issues in-depth and concludes:
Some of the more cartoony conservatives argue that this is a failure of liberalism because it is a failure of government planning, evidently confusing the concept of economic “central planning” with “the government makes a plan to do something.”
However, the smarter conservatives who are thinking several moves ahead (e.g. Ross Douthat) understand that this failed rollout is a significant problem for conservatives. Because if all the problems are driven by means-testing, state-level decisions and privatization of social insurance, the fact that the core conservative plan for social insurance is focused like a laser beam on means-testing, block-granting and privatization is a rather large problem. As Ezra Klein notes, “Paul Ryan’s health-care plan — and his Medicare plan — would also require the government to run online insurance marketplaces.” Additionally, the Medicaid expansion is working well where it is being implemented, and the ACA is perhaps even bending the cost curve of Medicare, the two paths forward that conservatives don’t want to take.
I find this particularly fascinating since over the years I’ve written quite a bit about my own evolution from mainstream 70s liberal to being willing to experiment with New Dem ideas and back again. Back in the late 80s and early 90s all this neo-liberal talk sounded promising, particularly since it was clear to me that the Republicans had convinced the nation, as Barack Obama admiringly said two decades later that “all the excesses of the 1960s and 1970s and government had grown and grown but there wasn’t much sense of accountability in terms of how it was operating” and so they wanted “that sense of dynamism and entrepreneurship that had been missing.”
For a time I was willing to entertain the idea that we might be able to attain progressive goals with “market” oriented processes but it didn’t take me long to realize that it was all just an excuse for rich people to keep more of their money (as usual.) Unfortunately, the Democratic Party bought into it heavily, some of it due to the proliferation of big money in politics and the necessity of getting their hands on it to compete. But I think generally they have thought it was a good idea on the merits for the past two decades. Certainly, they have been unwilling to publicly back anything that smacks of traditional welfare state programs.
This all has its roots in “the best and the brightest” fetish in the 1960s when John F. Kennedy called in the smart industry guys with pocket protectors to run his administration. I suppose it is, therefore, no surprise that Bill Clinton would be the neo-liberal hero of the modern era. Here’s how he defined the New Democrat philosophy back in 1992:
In the global economy of the 1990s, economic growth won’t come from government spending. It will come instead from individuals working smarter and learning more, from entrepreneurs taking more risks and going after new markets, and from corporations designing better products and taking a longer view…
Too many Washington insiders of both parties think the only way to provide more services is to spend more on programs already on the books in education, housing, and health care. But if we reinvent government to deliver new services in different ways, eliminate unnecessary layers of management, and offer people more choices, we really can give taxpayers more services with fewer bureaucrats for the same or less money.
That sounded very nice, but I don’t think anybody ever really understood exactly why this was a superior way to accomplish liberal goals. Here’s my favorite example of an elite New Democrat’s explanation of why we should “reform” Social Security. It’s Joe Klein:
Government was, and very much still remains, the last of our major institutions that stuck in the Industrial Age, where the paradigm is top-down, centralized command and control, assembly line, standardization, and one size fits all.
In the Information Age, Clinton knew that the paradigm was the computer, that the government had to be more decentralized, that bureaucracies had to become more flexible, and that our social safety net had to reflect that–the fact that people had more information and have to have more choices about where they get their health care, where their money for their retirement is held, and so on.
He just asserts that people must need more choices about where their retirement money is held and where they get their health care because the world is now like a computer. I don’t know why. And considering what we’re currently going through with the Obamacare web-site rollout, that statement is more hilariously absurd than ever.
Matt Yglesias caught Joe Klein making similar statements some years later:
Josh Marshall wonders about Joe Klein’s contention on Meet The Press that “private accounts [are] a terrific policy and that in the information age, you’re going to need different kinds of structures in the entitlement area than you had in the industrial age.” Josh wants to know “if anyone knows of an example where he explains this argument.” To make a long story short, I don’t believe that he has. Nexising for “industrial age” or “information age” and Social Security you get a few repetitions of the meme, but nothing one would call an argument. The closest you get is his February 6 column “The Incredible Shrinking Democrats” which states:
There is, then, a profitable discussion to be had between ‘ownership’ Republicans and ‘third-way’ Democrats about transforming the stagnant bureaucracies of the Industrial Age.
To Klein, then, the problem with Social Security is that it’s mired in stagnant bureaucracy. Needless to say, Social Security’s associated bureaucracy is, in fact, very small compared to the (large) overall scale of the program. Much smaller, in fact, than the administrative costs that would be entailed by the information age alternative of private accounts. In a September 22, 2003 column, Klein dismissed Dick Gephardt’s attack on Howard Dean’s past support for raising the retirement age as “an utterly transparent industrial age process, like a steam locomotive creaking out of a station.”
I’ll be rude and quote myself here:
Klein’s DLC catechism has all the markings of someone who jumped on a sexy trend when he was younger and hasn’t realized the fashion has changed. There is no there there. He’s like one of those e-venture capitalists of the late 90’s spewing fast talking bullshit about “new organizational paradigms where knowledge is defined in terms of potential for action as distinguished from information and its more intimate link with performance.” In other words, gibberish.
Unfortunately, it was much more than just a sexy trend. It became an article of faith in the Democratic Party. This faith in complex technocratic designs for the sake of technocratic design and our insistence on kludgeocracy just because has always been a mistake. Most of us saw that pretty early on (and certainly predicted that there would be no political advantage to it) but the Democratic Party has adopted this view so fully that very few people even notice what it is anymore. And it must be said that as with so many of our current problems, there is a lot of money to be made in privatization, our-sourcing, devolution and the like. The incentives are obvious.
Konczal predicts that this argument about neo-liberal governance is going to characterize much of the debate in the next decade. All I can say is, “it’s about time.”