Thinking about Ron Brownstein’s article from over the weekend, about current Republican governors being much more united in their opposition to Obama than 1990s-era GOP governors were with respect to Clinton, it struck me that this is exactly what you’d expect politics to look like in a world of low-to-zero real growth expectations. Which happens to be the world we pretty much live in, at least in this country.
The big Obama Administration initiative that the GOP governors are so unified in opposing is the health-care law. You can make an argument that this law – if it works – is a pro-growth initiative. That by planting the seeds of a real individual insurance market, it begins the process of decoupling health insurance from employment, increasing labor market flexibility and making it possible for more people to commit to an entrepreneurial career path. That by providing health insurance to more of the uninsured, it will reduce the drag that ill health poses on their productivity. That, by restraining spending over time on some of the least “productive” kinds of health expenditures, it will free up resources both for more productive uses, whether in health care or in other sectors. And so forth.
That’s if it works – and if its reforms are extended by further reform. And that’s a big “if.” What it does immediately, of course, is transfer resources from the “haves” to the “have-nots.” It takes resources from the elderly and gives them to the young, from the rich to the poor, from those with “Cadillac” health benefits to the uninsured. All of those transfers are, of course, defensible on moral and practical grounds – but it’s not surprising to see the “haves” fight back.
The big state-level initiative of the GOP governors that the national Democrats are trying to blunt is the effort to kill, or at least maim, public sector unions. The states in aggregate are in terrible fiscal shape, and unless we enter a period of rapid economic growth they will remain in lousy shape indefinitely. Somebody is going to have to lose in the huge budgetary battles in statehouses around the country. GOP governors want that “somebody” to be public sector workers who, in many cases, have seen their position improve relative to their private-sector equivalents (which, I think, is the important comparison – not whether they are over- or under-paid in an absolute sense, but whether one group of workers has been gaining or losing ground relative to the other).
This effort could also be pro-growth – if it was part of a larger effort to restructure the public sector to make it more productive. Take teachers. “More pay but less job security” is a deal that lots of education reformers would be enthusiastic about. If teaching was something that lots of decently-educated people did for 5-10 years (like becoming a drug rep, or a management consultant, or working in publishing, or any of the myriad other jobs that people mostly don’t do for their whole working lives), instead of a career where most of the benefits are back-loaded, you could actually pay teachers more, save a lot of money, and have a better-educated and more-energized cadre of teachers. But that’s another big “if.” Meanwhile, what public sector workers know is that they are being asked to give up something they have. Once again, it’s not surprising to see the “haves” fight back.
But in the absence of a period of “catch-up” growth that brings us back to something like the long-term trend, politics is going to be about cutting up the pie rather than making the pie higher. And if that’s what politics is going to be, then you’re going to see this kind of polarization, as the “haves” in each political coalition organize massive resistance to any attempt to take away from them what’s “theirs.”
It’s that larger pro-growth vision that’s missing from the dominant message both parties are giving. Both parties, rather, are saying something like “if we do what we’d be saying we should do anyway, growth will come.” If we cut taxes and cut spending, the magic of the free market will produce jobs. If we expand the social safety net, working people will be more secure and demand will pick up. I’m not surprised neither of these propositions are really selling all that well.
So get ready for another season of zero-sum trench-warfare politics.