Mitchell’s Musings 8-28-2017: Deal or No Deal?

26 Aug 2017 10:30 AM | Daniel Mitchell (Administrator)

Mitchell’s Musings 8-28-2017: Deal or No Deal?


Daniel J.B. Mitchell


In the past few days, the Republican minority in the California state assembly voted out its leader because he had supported legislation extending the state’s greenhouse gas emissions cap-and-trade program. The cap-and-trade bill, supported by Democratic Governor Jerry Brown, was also supported by the business community which prefers the flexibility provided by cap-and-trade to a system of command-and-control regulations. Cap-and-trade, which relies on markets rather than regulation to control emissions, is basically a conservative idea. (For that reason, many on the environmental left don’t like it.) The combination of business support and a market/conservative concept would - in decades past - have been a natural for Republican support. But nowadays, anything pushed by Democrats has become verboten for purists on the GOP right.


A similar example at the federal level is “Obamacare,” which was in its origins a Republican idea. Its basic framework was implemented in Massachusetts under Republican Governor Mitt Romney. Republican Governor Arnold Schwarzenegger tried (but failed) to have California adopt it. The Obama folks adopted the idea in 2009 as a program that might attract bipartisan support. But it didn’t get that support, mainly because Obama was pushing it. Again, compromising and endorsing anything which the other side proposed was rejected. In the end, Obamacare became law without a single Republican vote.


A sense of political purity is not confined to Republicans. Some Democrats in the California assembly last spring began pushing a single-payer health insurance bill. A major problem was that the bill had no funding mechanism. But that missing element was not the only problem. Replacing all private health insurance with a public program is a complicated administrative task. The details in such an effort matter, and there were no details in the California bill. The bill was a symbol of a desire, not real legislation.


Vermont – the home of Bernie Sanders – tried to go the single-payer route and failed. California would need the permission of the federal government to establish such a plan, something unlikely to be obtained from the current administration. The Democratic assembly speaker eventually killed the bill, citing its incompleteness and impracticality, and leading to his condemnation by True Believers in his party. (Unlike his Republican counterpart in the cap-and-trade case, he was not removed.)


What is the lesson from such behavior? A recent op ed in the Guardian was entitled “Liberal elite, it's time to strike a deal with the working class.”[1] The title basically tells the story. It advices Democrats not to fall into the trap of avoiding compromises with those perceived as supporters of the other “side.” Avoiding deals with anyone who does not meet all of your criteria for pure and proper thought is a route to political oblivion.


It’s worth looking back at history to a time when the Democrats won the working class. The New Deal administration in the 1930s – which (among other things) enacted Social Security (pensions, unemployment insurance) – was based on a truly unholy alliance of northern liberals and southern segregationists (the so-called “solid South” and its block of electoral votes). Would the U.S. be better off today if the deals that were cut back then had not been reached? You really have to be a purist to answer “no.”


For better or worse, the U.S. has a two-party system with the general rule of winner-take-all in elections. There are other democratic political systems in the world, essentially parliamentary set-ups with proportional representation, in which every cause or interest group has its own party and governments are elected in the national legislature through horse-trading until some collection of parties can form a workable coalition. In the U.S., the horse-trading and compromising has to be done within the parties – which is why the two parties are ideologically incoherent, both at any moment in time and over time. The party that can pull together enough groups and interests to win an election rules.


As we have noted in prior posts, the minority party in Congress usually picks up some seats in non-presidential midterm elections (such as 2018). But if the economy continues along at its current pace with low unemployment and no recession, there may not be enough of a gain by Democrats in the short run to change control of either house. The outcome could depend instead on the Russia thing or some other Trump scandal, and no one knows how Russia or related controversies will turn out. However, in the longer term, a winning coalition strategy should focus on traditional issues: work, good jobs, economic security, etc. Promising to address those things, even if little was done about them after-the-fact, was certainly part of the Trump appeal in 2016.


There was much recent ridicule of the Democrats for coming up with a slogan of “A Better Deal.” But the lack of a peppy slogan is a matter of marketing, not substance. (How good a slogan was “New Deal”? Or “Great Society”? Or “Make American Great Again”?) Given the current propensities of the incumbent president, the Democrats don’t need to engage in the excesses of so-called “identity politics” which tend to be divisive. Identities will take care of themselves. California provides yet another example.


In 1994, California’s Republican Governor Pete Wilson ran for re-election on a platform of support for Proposition 187, an initiative of dubious constitutionality, aimed at control of illegal immigration.[2] Prop 187 and Wilson won, but in doing so the Latino vote was pushed to the Democrats. The result by 2017 is that the Republicans hold no statewide offices in California. And they are barely relevant in the legislature. In short, if one party is attacking various groups (overtly or indirectly), those groups will migrate over time to the other party. Sometimes, you just have to wait for political reactions and demographics to take hold. And, in the meantime as the song goes, “Accentuate the Positive.”

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[1] https://www.theguardian.com/commentisfree/2017/aug/23/liberal-elite-its-time-to-strike-a-deal-with-the-working-class

[2] Through a process of litigation, Prop 187 was largely voided. 

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